EXECUTION COPY
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REVOLVING CREDIT AGREEMENT
Dated as of May 3, 2002
among
STEPAN COMPANY,
as the Borrower,
THE FINANCIAL INSTITUTIONS NAMED HEREIN,
as the Banks,
and
BANK ONE, NA,
as Agent,
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BANC ONE CAPITAL MARKETS, INC.
as Lead Arranger and Sole Book Runner
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Table of Contents
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ARTICLE I: DEFINITIONS.........................................................1
1.1 Definitions........................................................1
1.2 Singular and Plural...............................................14
ARTICLE II: THE CREDITS.......................................................14
2.1 Commitment........................................................14
2.2 Ratable Loans.....................................................14
2.3 Rate Options......................................................14
2.4 Mandatory Principal Payments......................................14
2.5 Optional Principal Payments.......................................14
2.6 Commitment Fee and Reduction of Commitments.......................15
2.7 Method of Borrowing...............................................15
2.8 Method of Selecting Rate Options and Interest Periods.............15
2.9 Conversion and Continuation of Outstanding Ratable Advances.......16
2.10 Minimum Amount of Each Advance....................................17
2.11 Rate after Default................................................17
2.12 Method of Payment.................................................17
2.13 Notes; Telephonic Notices.........................................18
2.14 Interest Payment Dates; Interest Basis............................18
2.15 Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions.............................................18
2.16 Lending Installations.............................................18
2.17 Non-Receipt of Funds by the Agent.................................19
2.18 Swing Line Loans..................................................19
2.19 Competitive Bid Advances..........................................21
2.20 Facility LCs......................................................24
2.21 Increase of Commitments...........................................28
ARTICLE III: CHANGE IN CIRCUMSTANCES..........................................29
3.1 Yield Protection..................................................29
3.2 Availability of Rate Options......................................30
3.3 Funding Indemnification...........................................30
3.4 Taxes.............................................................30
3.5 Bank Certificates; Survival of Indemnity..........................32
ARTICLE IV: CONDITIONS PRECEDENT..............................................32
4.1 Initial Credit Extension..........................................32
4.2 Each Credit Extension.............................................33
ARTICLE V: REPRESENTATIONS AND WARRANTIES.....................................34
5.1 Existence and Standing............................................34
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5.2 Authorization and Validity........................................34
5.3 No Conflict; Government Consent...................................34
5.4 Financial Statements..............................................35
5.5 Material Adverse Change...........................................35
5.6 Taxes.............................................................35
5.7 Litigation........................................................35
5.8 Subsidiaries......................................................35
5.9 ERISA.............................................................36
5.10 Accuracy of Information...........................................36
5.11 Regulation U......................................................36
5.12 Material Agreements...............................................36
5.13 Subordinated Indebtedness.........................................36
5.14 Compliance with Environmental Laws................................36
5.15 Compliance With Laws..............................................36
5.16 Ownership of Properties...........................................37
5.17 Plan Assets; Prohibited Transactions..............................37
5.18 Investment Company Act............................................37
5.19 Public Utility Holding Company Act................................37
ARTICLE VI: COVENANTS.........................................................37
6.1 Financial Reporting...............................................37
6.2 Use of Proceeds...................................................39
6.3 Financial Covenants...............................................39
6.4 Notice of Default.................................................39
6.5 Conduct of Business...............................................39
6.6 Taxes.............................................................40
6.7 Insurance.........................................................40
6.8 Compliance with Laws..............................................40
6.9 Maintenance of Properties.........................................40
6.10 Inspection........................................................40
6.11 Dividends.........................................................40
6.12 Indebtedness......................................................41
6.13 Mergers and Consolidations........................................42
6.14 Sale of Assets....................................................43
6.15 Sale and Leaseback................................................43
6.16 Investments.......................................................43
6.17 Guaranties........................................................44
6.18 Liens.............................................................44
6.19 Purchase of Stocks................................................46
6.20 Limitations on Dispositions of Stock or Indebtedness of
Restricted Subsidiaries...........................................46
6.21 Affiliates........................................................47
6.22 Addition of Guarantors............................................47
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ARTICLE VII: DEFAULTS.........................................................47
7.1 Breach of Representations and Warranties..........................47
7.2 Payment Default...................................................47
7.3 Breach of Certain Covenants.......................................47
7.4 Breach of Other Provisions........................................47
7.5 Default on Material Indebtedness..................................48
7.6 Voluntary Insolvency Proceedings..................................48
7.7 Involuntary Insolvency Proceedings................................48
7.8 Condemnation......................................................48
7.9 Judgments.........................................................48
7.10 ERISA Matters.....................................................48
7.11 Change of Control.................................................48
7.12 Off-Balance Sheet Liabilities.....................................49
7.13 Guarantor Revocation..............................................49
ARTICLE VIII: ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES..................49
8.1 Acceleration; Facility LC Collateral Account......................49
8.2 Amendments........................................................50
8.3 Preservation of Rights............................................51
ARTICLE IX: GENERAL PROVISIONS................................................51
9.1 Survival of Representations.......................................51
9.2 Governmental Regulation...........................................51
9.3 Taxes.............................................................51
9.4 Headings..........................................................51
9.5 Entire Agreement..................................................51
9.6 Several Obligations...............................................51
9.7 Expenses; Indemnification.........................................52
9.8 Numbers of Documents..............................................52
9.9 Accounting........................................................52
9.10 Severability of Provisions........................................52
9.11 Nonliability of Banks.............................................52
9.12 Confidentiality...................................................53
9.13 Nonreliance.......................................................53
9.14 Disclosure........................................................53
ARTICLE X: THE AGENT..........................................................53
10.1 Appointment; Nature of Relationship...............................53
10.2 Powers............................................................54
10.3 General Immunity..................................................54
10.4 No Responsibility for Loans, Recitals, etc........................54
10.5 Action on Instructions of Banks...................................54
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10.6 Employment of Agents and Counsel..................................54
10.7 Reliance on Documents; Counsel....................................55
10.8 Agent's Reimbursement and Indemnification.........................55
10.9 Notice of Default.................................................55
10.10 Rights as a Bank..................................................55
10.11 Bank Credit Decision..............................................55
10.12 Successor Agent...................................................56
10.13 Agent's Fee.......................................................56
10.14 Delegation to Affiliates..........................................56
10.15 Release of Guarantors.............................................56
ARTICLE XI: SETOFF; RATABLE PAYMENTS..........................................57
11.1 Setoff............................................................57
11.2 Ratable Payments..................................................57
ARTICLE XII: NOTICES..........................................................58
12.1 Notices...........................................................58
12.2 Change of Address.................................................58
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS...............58
13.1 Successors and Assigns............................................58
13.2 Participations....................................................59
13.3 Assignments.......................................................59
13.4 Dissemination of Information......................................61
13.5 Tax Treatment.....................................................61
ARTICLE XIV: COUNTERPARTS.....................................................61
ARTICLE XV: CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL......61
15.1 CHOICE OF LAW.....................................................61
15.2 CONSENT TO JURISDICTION...........................................61
15.3 WAIVER OF JURY TRIAL..............................................62
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STEPAN COMPANY
REVOLVING CREDIT AGREEMENT
DATED AS OF
May 3, 2002
This Revolving Credit Agreement, dated as of May 3, 2002, is entered into
by and among Stepan Company, the Banks and Bank One, NA, a national banking
association having its principal office in Chicago, Illinois, as Agent and as LC
Issuer. The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
1.1 Definitions. As used in this Agreement:
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"Absolute Rate" means, with respect to an Absolute Rate Loan made by a
given Bank for the relevant Absolute Rate Interest Period, the rate of interest
per annum (rounded to the nearest 1/1000 of 1%) offered by such Bank and
accepted by the Company pursuant to Section 2.19.
"Absolute Rate Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Absolute Rate Loans made by some or all of the
Banks to the Company at the same time and for the same Absolute Rate Interest
Period.
"Absolute Rate Auction" means a solicitation of Competitive Bid Quotes
setting forth Absolute Rates pursuant to Section 2.19.
"Absolute Rate Interest Period" means, with respect to an Absolute Rate
Advance, a period of not less than 1 and not more than 30 days commencing on a
Business Day selected by the Company pursuant to this Agreement. If such
Absolute Rate Interest Period would end on a day which is not a Business Day,
such Absolute Rate Interest Period shall end on the next succeeding Business
Day.
"Absolute Rate Loan" means a Loan which bears interest at an Absolute Rate.
"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the Closing Date, by which the Company or any of its
Subsidiaries (i) acquires any going business or all or substantially all of the
assets of any firm, corporation or limited liability company, or division
thereof, whether through purchase of assets, merger or otherwise or (ii)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage or voting
power) of the outstanding ownership interests of a partnership or limited
liability company.
"Advance" means a Ratable Advance or a Competitive Bid Advance. The term
"Advance" shall include Swing Line Loans unless otherwise expressly provided.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract, or otherwise.
"Agent" means Bank One in its capacity as contractual representative for
the Banks pursuant to Article X, and not in its individual capacity as a Bank,
and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of the Banks
hereunder, as adjusted from time to time pursuant to the terms hereof.
"Aggregate Outstanding Credit Exposure" means, at any time, the aggregate
of the Outstanding Credit Exposure of all the Banks.
"Agreement" means this revolving credit agreement, as it may be amended
from time to time.
"Agreement Accounting Principles" means generally accepted principles of
accounting in effect at the time of the preparation of the financial statements
referred to in Section 5.4, applied in a manner consistent with that used in
preparing such statements. If any change in accounting principles from the
principles used in preparing such statements would have a material effect upon
the results of any calculation required by or compliance with any provision of
this Agreement, then the parties hereto agree to enter into negotiations in
order to amend such provisions so as to equitably reflect such changes with the
desired result that the criteria for evaluating Company's financial condition
and operations shall be the same after such changes as if such changes had not
been made.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Fee Rate" means, at any time, the percentage rate per annum at
which Commitment Fees are accruing on the unused portion of the Aggregate
Commitment at such time as set forth in the Pricing Schedule.
"Applicable Margin" means, with respect to Ratable Advances of any Type at
any time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Approved Fund" means any Fund that is administered or managed by (a) a
Bank, (b) an Affiliate of a Bank or (c) an entity or an Affiliate of an entity
that administers or manages a Bank.
"Arranger" means Banc One Capital Markets, Inc., a Delaware corporation,
and its successors, in its capacity as Lead Arranger and Sole Book Runner.
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"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the President, Vice President - Finance
or the Vice President and Corporate Controller of the Company, acting singly.
"Available Aggregate Commitment" means, at any time, the Aggregate
Commitment then in effect minus the Aggregate Outstanding Credit Exposure at
such time.
"Bank One" means Bank One, NA, a national banking association having its
principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"Banks" means the lending institutions listed on the signature pages of
this Agreement as amended from time to time and their respective successors and
assigns. Unless otherwise specified, the term "Banks" includes Bank One in its
capacity as Swing Line Lender.
"Borrowing Date" means a date on which a Credit Extension is made
hereunder.
"Borrowing Notice" means a Competitive Bid Borrowing Notice or a Ratable
Borrowing Notice, as the context may require.
"Business Day" means (i) with respect to borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York City for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in U.S. dollars are
carried on in the London interbank market and (ii) for all other purposes, a day
(other than a Saturday or Sunday) on which banks generally are open in Chicago
for the conduct of substantially all of their commercial lending activities and
interbank wire transfers can be made on the Fedwire system.
"Capitalized Lease" of a Person means any lease of property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person, prepared in accordance with
Agreement Accounting Principles.
"Closing Date" means May 3, 2002.
"Collateral Shortfall Amount" is defined in Section 8.1.
"Commitment" means, for each Bank, the obligation of the Bank to make
Ratable Loans to, and participate in Facility LCs issued upon the application
of, the Company in an aggregate amount not exceeding the amount set forth on the
Commitment Schedule or as set forth in any Assignment Agreement that has become
effective pursuant to Section 13.3.1, as such amount may be modified from time
to time.
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"Commitment Schedule" means the Schedule identifying each Bank's Commitment
as of the Closing Date attached hereto and identified as such.
"Company" means Stepan Company, a Delaware corporation, and its successors
and assigns.
"Competitive Bid Advance" means a borrowing hereunder made by some or all
of the Banks on the same Borrowing Date and consisting of the aggregate amount
of the several Competitive Bid Loans of the same Type and for the same Interest
Period.
"Competitive Bid Borrowing Notice" is defined in Section 2.19(F).
"Competitive Bid Loan" means a Eurodollar Bid Rate Loan or an Absolute Rate
Loan, or both, as the case may be.
"Competitive Bid Margin" means the margin above or below the applicable
Eurodollar Base Rate (adjusted for reserve costs, if applicable) offered for a
Eurodollar Bid Rate Loan, expressed as a percentage (rounded to the nearest
1/1000 of 1%) to be added or subtracted from such Eurodollar Base Rate.
"Competitive Bid Note" means any promissory note issued at the request of a
Bank pursuant to Section 2.13 to evidence its Competitive Bid Loans in the form
of Exhibit A-2 hereto.
"Competitive Bid Quote" means a Competitive Bid Quote substantially in the
form of Exhibit G hereto completed and delivered by a Bank to the Agent in
accordance with Section 2.19(D).
"Competitive Bid Quote Request" means a Competitive Bid Quote Request
substantially in the form of Exhibit E hereto completed and delivered by the
Company to the Agent in accordance with Section 2.19(B).
"Consolidated Capitalization" means the sum of (i) Consolidated Funded
Indebtedness plus (ii) Consolidated Tangible Net Worth plus (iii) long-term
deferred tax liabilities for the Company and its Restricted Subsidiaries.
"Consolidated Current Liabilities" means, at any date as of which the
amount thereof is to be determined, the amount which would be set forth as
current liabilities on a consolidated balance sheet of the Company and the
Restricted Subsidiaries prepared as of such date in accordance with Agreement
Accounting Principles.
"Consolidated Earnings Before Interest and Taxes" means, for any fiscal
quarter, the sum of (i) earnings before income taxes for such fiscal quarter,
plus (ii) Consolidated Interest Expense for such fiscal quarter less (iii)
equity earnings of Unrestricted Subsidiaries of the Company for such quarter
determined on a consolidated basis for the Company and the Restricted
Subsidiaries in accordance with Agreement Accounting Principles.
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"Consolidated Tangible Assets" means, as at any date as of which the amount
thereof is to be determined, an amount equal to the amount by which (a) the
aggregate amount at which all assets of the Company and the Restricted
Subsidiaries would be set forth on a consolidated balance sheet of the Company
and the Restricted Subsidiaries prepared as of such date in accordance with
Agreement Accounting Principles, exceeds (b) the sum of the amounts which would
be set forth on such consolidated balance sheet as (i) any surplus resulting
from any writeup of assets and (ii) the aggregate value of all patents,
licenses, trade names, trademarks, copy-rights, good will and deferred charges
(including, but not limited to, unamortized debt discount and expenses,
organizational expenses and experimental and developmental expenses, but
excluding prepaid expenses).
"Consolidated Tangible Net Worth" means, at any date as of which the amount
thereof is to be determined, (a) the sum of the amounts which would be set forth
as preferred stock, common stock, capital in excess of par value or paid-in
surplus and retained earnings on a consolidated balance sheet of the Company and
the Restricted Subsidiaries prepared as of such date in accordance with
Agreement Accounting Principles, minus (b) the sum of the amounts which would be
set forth on such consolidated balance sheet as (i) the cost of any shares of
the Company's common stock held in the treasury, (ii) any surplus resulting from
any writeup of assets, (iii) the aggregate value of all patents, licenses, trade
names, trademarks, copy-rights, good will and deferred charges (including, but
not limited to, unamortized debt discount and expenses, organizational expenses
and experimental and developmental expenses, but excluding prepaid expenses),
and (iv) other comprehensive income or expense (as defined by GAAP), in each
case determined in accordance with Agreement Accounting Principles.
"Contingent Obligation" of a Person means any agreement by which such
Person assumes, guarantees, endorses, contingently agrees to purchase or provide
funds for the payment of, or otherwise becomes liable upon, the obligation of
any other Person, or agrees to maintain the net worth or working capital or
other financial condition of any other Person or otherwise assures any creditor
of such other Person against loss, including, without limitation, any operating
agreement or take-or-pay contract and shall include, without limitation, the
contingent liability of such Person in connection with any application for a
letter of credit.
"Controlled Group" means all members of a controlled group of corporations
or other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Company or any
Subsidiary, are treated as a single employer under Section 414(b) or 414(c) of
the Internal Revenue Code.
"Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.
"Current Indebtedness" means all Indebtedness other than Funded
Indebtedness, and, without limitation, shall include (i) all Indebtedness
maturing on demand or within one year after the date as of which such
determination is made, (ii) final maturities and prepayments of Indebtedness and
sinking fund payments and (iii) all other items (including taxes accrued as
estimated) which, in accordance with Agreement Accounting Principles, would be
included as Consolidated Current Liabilities.
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"Default" means an event described in Article VII.
"Domestic Subsidiary" means a Subsidiary of the Company organized under the
laws of a jurisdiction located in the United States of America.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means a Eurodollar Ratable Advance, a Eurodollar Bid
Rate Advance, or both, as the context may require.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for the
relevant Eurodollar Interest Period, the applicable British Bankers' Association
LIBOR Rate for deposits in U.S. dollars as reported by any generally recognized
financial information service as of 11:00 a.m. (London time) two (2) Business
Days prior to the first day of such Eurodollar Interest Period, and having a
maturity equal to such Eurodollar Interest Period, provided that, if no such
British Bankers' Association LIBOR Rate is available to the Agent, the
applicable Eurodollar Base Rate for the relevant Eurodollar Interest Period
shall instead be the rate determined by the Agent to be the rate at which Bank
One offers to place deposits in U.S. dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of such Eurodollar Interest Period, in the
approximate amount of Bank One's relevant Eurodollar Ratable Loan, or, in the
case of a Eurodollar Bid Rate Advance, the amount of the Eurodollar Bid Rate
Advance requested by the Company, and having a maturity equal to such Eurodollar
Interest Period.
"Eurodollar Bid Rate" means, with respect to a Eurodollar Bid Rate Loan
made by a given Bank for the relevant Eurodollar Interest Period, the sum of (i)
the quotient of (a) the Eurodollar Base Rate applicable to such Eurodollar
Interest Period, divided by (b) one minus the Reserve Requirement (expressed as
a decimal) applicable to such Eurodollar Interest Period, plus (ii) the
Competitive Bid Margin offered by such Bank and accepted by the Company.
"Eurodollar Bid Rate Advance" means a Competitive Bid Advance which bears
interest at a Eurodollar Bid Rate.
"Eurodollar Bid Rate Loan" means a Loan which bears interest at a
Eurodollar Bid Rate.
"Eurodollar Interest Period" means, with respect to a Eurodollar Advance, a
period of one, two, three or six months commencing on a Business Day selected by
the Company pursuant to this Agreement. Such Eurodollar Interest Period shall
end on the day which corresponds numerically to such date one, two, three or six
months thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Eurodollar Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month. If a Eurodollar Interest Period would
otherwise end on a day which is not a Business Day, such Eurodollar Interest
Period shall end on the next succeeding Business Day, provided, however, that if
said next succeeding Business Day falls in a new calendar month, such Eurodollar
Interest Period shall end on the immediately preceding Business Day.
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"Eurodollar Loan" means a Eurodollar Ratable Loan or a Eurodollar Bid Rate
Loan, or both, as the context may require an Advance or a Loan, as the case may
be, which, except as otherwise provided in Section 2.11, bears interest at a
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Eurodollar Rate.
"Eurodollar Ratable Advance" means a Ratable Advance which bears interest
at a Eurodollar Rate requested by the Company pursuant to Section 2.8.
"Eurodollar Ratable Loan" means a Ratable Loan which bears interest at a
Eurodollar Rate requested by the Company pursuant to Section 2.8.
"Eurodollar Rate" means, with respect to a Eurodollar Ratable Advance for
the relevant Eurodollar Interest Period, the sum of (i) the quotient of (a) the
Eurodollar Base Rate applicable to such Eurodollar Interest Period, divided by
(b) one minus the Reserve Requirement (expressed as a decimal) applicable to
such Eurodollar Interest Period, plus (ii) the Applicable Margin.
"Existing Credit Agreement" means that certain Revolving Credit Agreement
dated as of January 9, 1998, among the Company, Bank One, NA (formerly known as
The First National Bank of Chicago) as agent for the banks, and the banks party
thereto, as amended through the Closing Date.
"Facility LC" is defined in Section 2.20(A).
"Facility LC Application" is defined in Section 2.20(C).
"Facility LC Collateral Account" is defined in Section 2.20(J).
"Facility Termination Date" means May 2, 2007 or any earlier date on which
the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to
the terms hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum 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 for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Fixed Rate" means the Eurodollar Rate, the Eurodollar Bid Rate or the
Absolute Rate.
"Fixed Rate Advance" means an Advance which bears interest at a Fixed Rate.
"Fixed Rate Loan" means a Loan which bears interest at a Fixed Rate.
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case,
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changing when and as the Alternate Base Rate changes. "Floating Rate Advance"
and "Floating Rate Loan" mean an Advance or a
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Loan, as the case may be, which, except as otherwise provided in Section 2.11,
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bears interest at the Floating Rate.
"Foreign Subsidiary" means a Subsidiary of the Company which is not a
Domestic Subsidiary.
"Fund" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Funded Indebtedness" means any liabilities or Indebtedness secured or
unsecured with a maturity due date or expiration more than one year from any
date of determination, including Capitalized Leases, (i) minus long-term
deferred tax liabilities and (ii) plus Guarantees and Unfunded Liabilities.
Funded Indebtedness determined on a consolidated basis for the Company and its
Restricted Subsidiaries will be referred to herein as "Consolidated Funded
Indebtedness".
"GAAP" is defined in Section 6.1.
"Guarantor" means the Company and each Restricted Subsidiary of the Company
(other than an SPV) that is a Domestic Subsidiary as of the Closing Date and
each other Restricted Subsidiary that has become a guarantor of the Obligations
hereunder in accordance with the terms of Section 6.22.
"Guaranty" means that certain Guaranty (and any and all supplements
thereto) executed from time to time by each Guarantor (other than the Company)
in favor of the Agent for the benefit of itself and the Banks, in form and
substance acceptable to the Agent, as amended, restated, supplemented or
otherwise modified from time to time.
"Indebtedness" of a Person means such Person's (i) obligations for borrowed
money, (ii) obligations representing the deferred purchase price of property or
services (other than accounts payable arising in the ordinary course of such
Person's business payable on terms customary in the trade), (iii) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from property now or hereafter owned or acquired by such Person, (iv)
obligations which are evidenced by notes, acceptances, or other instruments, (v)
Capitalized Lease Obligations (vi) Off-Balance Sheet Liabilities, and (vii)
obligations for which such Person is obligated pursuant to a Contingent
Obligation or pursuant to a Letter of Credit.
"Interest Expense" means with respect to any period for which the amount
thereof is to be determined, an amount equal to interest expense on
Indebtedness, including payments in the nature of interest under Capitalized
Lease Obligations and the discount or implied interest component of Off-Balance
Sheet Liabilities, as determined in accordance with Agreement Accounting
Principles. Interest Expense determined on a consolidated basis for the Company
and its Restricted Subsidiaries will be referred to herein as "Consolidated
Interest Expense."
"Interest Period" means a Eurodollar Interest Period or an Absolute Rate
Interest Period.
"Investment" of a Person means any loan, advance, extension of credit
(excluding accounts receivable arising in the ordinary course of business on
terms customary in the trade),
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deposit account or contribution of capital by such Person to any other Person or
any investment in, or purchase or other acquisition of, the stock, notes,
debentures or other securities of any other Person made by such Person.
"Invitation for Competitive Bid Quotes" means an Invitation for Competitive
Bid Quotes substantially in the form of Exhibit F hereto, completed and
delivered by the Agent to the Banks in accordance with Section 2.19(C).
"LC Fee" is defined in Section 2.20(D).
"LC Issuer" means Bank One (or any subsidiary or affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder.
"LC Obligations" means, at any time, the sum, without duplication, of (i)
the aggregate undrawn stated amount under all Facility LCs outstanding at such
time plus (ii) the aggregate unpaid amount at such time of all Reimbursement
Obligations.
"LC Payment Date" is defined in Section 2.20(E).
"Lending Installation" means any office, branch, subsidiary or affiliate of
any Bank or the Agent.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Bank, such Bank's loan made pursuant to
Article II (or, in the case of any Ratable Loan, any conversion or continuation
thereof).
"Loan Documents" means this Agreement, the Notes, the Guaranty and the
Facility LC Applications, in each case as amended, restated, supplemented or
otherwise modified from time to time.
"Modify" and "Modification" are defined in Section 2.20(A).
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Company or any member
of the Controlled Group is a party to which more than one employer is obligated
to make contributions.
"Notes" means, collectively, all of the Competitive Bid Notes, all of the
Ratable Notes and any note issued to the Swing Line Lender, in each case, which
may be issued hereunder, and
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"Note" means any one of the Notes, including any amendment, modification,
renewal or replacement thereof.
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Loans, all Reimbursement Obligations, all accrued and unpaid commitment
fees and all other obligations of the Company to the Banks or to any Bank, the
LC Issuer or the Agent arising under the Loan Documents.
"Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person or any of its Subsidiaries with respect
to accounts or notes receivable sold by such Person or any of its Subsidiaries
(calculated to include the unrecovered investment of purchasers or transferees
of accounts or any other obligation of such Person or such transferor to
purchasers/transferees of interests in accounts or notes receivable or the agent
for such purchasers/transferees), (ii) any liability under any sale and
leaseback transaction which is not a Capitalized Lease, (iii) any liability
under any financing lease or Synthetic Lease or "tax ownership operating lease"
transaction entered into by such Person, including any Synthetic Lease
Obligations, or (iv) any obligation arising with respect to any other
transaction which is the functional equivalent of or takes the place of
borrowing but which does not constitute a liability on the balance sheets of
such Person, but excluding from this clause (iv) Operating Leases.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Outstanding Credit Exposure" means, as to any Bank at any time, the sum of
(i) the aggregate principal amount of its Loans (including all Ratable Loans and
Competitive Bid Loans of such Bank) outstanding at such time, plus (ii) an
amount equal to its Pro Rata Share of the aggregate principal amount of Swing
Line Loans outstanding at such time, plus (iii) an amount equal to its Pro Rata
Share of the LC Obligations at such time.
"Phthalic Anhydride Line" means any product manufactured by the Company
from Orthoxylene.
"Payment Date" means the last day of January, April, July, and October.
"PBGC" means the Pension Benefit Guaranty Corporation and its successors
and assigns.
"Person" means any corporation, natural person, firm, joint venture,
partnership, limited liability company, trust, unincorporated organization,
enterprise, government or any department or agency of any government.
"Plan" means an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Internal Revenue Code as to which the Company or any Subsidiary may have any
liability.
"Pricing Schedule" means the Schedule attached hereto identified as such.
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"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Property" of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.
"Pro Rata Share" means, with respect to a Bank, a portion equal to a
fraction the numerator of which is such Bank's Commitment and the denominator of
which is the Aggregate Commitment. "Ratable Advance" means a borrowing hereunder
(i) made by the Banks on the same Borrowing Date, or (ii) converted or continued
by the Banks on the same date of conversion or continuation, consisting, in
either case, of the aggregate amount of the several Ratable Loans of the same
Type and, in the case of Eurodollar Ratable Loans, for the same Interest Period.
"Ratable Borrowing Notice" is defined in Section 2.8.
"Ratable Loan" means a Loan made by a Bank pursuant to its commitment to
lend set forth in Section 2.1 (or any conversion or continuation thereof).
"Ratable Note" means any promissory note issued at the request of a Bank
pursuant to Section 2.13 to evidence its Ratable Loans in the form of Exhibit
A-1 hereto.
"Rate Option" means the Eurodollar Rate or the Floating Rate.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System from time to time in effect and shall include any successor or
other regulation or official interpretation of said Board of Governors relating
to reserve requirements applicable to member banks of the Federal Reserve
System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System from time to time in effect and shall include any successor or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by banks, non-banks and non-broker-dealers for the
purpose of purchasing or carrying margin stocks applicable to member banks of
the Federal Reserve System.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Company then outstanding under Section 2.20 to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
"Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any lease of real or personal property having an original term
(including any required renewals or any renewals at the option of the lessor or
lessee) of one year or more but does not include any amounts payable under
Capitalized Leases of such Person.
"Reportable Event" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such Section, with respect to a Plan,
excluding, however, such
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events as to which the PBGC has by regulation waived the requirement of Section
4043(a) of ERISA that it be notified within 30 days of the occurrence of such
event, provided that a failure to meet the minimum funding standard of Section
412 of the Internal Revenue Code and of Section 302 of ERISA shall be a
reportable event regardless of the issuance of any such waivers in accordance
with Section 412(d) of the Internal Revenue Code.
"Required Banks" means Banks in the aggregate having at least 66-2/3% of
the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Banks in the aggregate holding at least 66-2/3% of the Aggregate Outstanding
Credit Exposure.
"Reserve Requirement" means, with respect to a Eurodollar Interest Period,
the maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities as defined in Regulation D).
"Restricted Subsidiary" means any Subsidiary of the Company which (i) is
organized under the laws of any state of the United States of America or under
the laws of Canada or any province thereof, (ii) has substantially all of its
assets located within, and operates substantially within, the United States of
America or Canada, (iii) at least 50% of the outstanding voting stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether or not at the time stock of any other class
or classes shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned by the Company, by
one or more of its Wholly-Owned Restricted Subsidiaries or by the Company and
one or more of its Wholly-Owned Restricted Subsidiaries, and (iv) which the
Company designates as a Restricted Subsidiary; provided, however, that the
Company may not subsequently change the description of any such Subsidiary from
Restricted Subsidiary to Unrestricted Subsidiary.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan maintained by the Company or any member
of the Controlled Group for employees of the Company or any member of the
Controlled Group.
"SPV" means any special purpose entity established in connection with the
incurrence of Off-Balance Sheet Liabilities permitted under the terms of this
Agreement.
"Stepan Family" means the Estate of Xxxx Xxxxxx Xxxxxx, F. Xxxxx Xxxxxx and
family, Xxxx X. Xxxxxx and family, Xxxxxxxxx Xxxxxx Xxxxxxxx and family, Xxxx
Xxxxxx Xxxxxx and family, Xxxxxx X. Xxxxxx III and family, Xxxx X. Xxxxxx and
family, Stratford X. Xxxxxx and family and Stepan Venture I and Stepan Venture
II.
"Subordinated Indebtedness" means any Indebtedness the payment of which is
subordinated to payment of the Obligations to the written satisfaction of the
Banks.
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"Subsidiary" means (i) any corporation more than 50% of the outstanding
voting securities of which shall at the time be owned or controlled, directly or
indirectly, by the Company or by one or more Subsidiaries or by the Company and
one or more Subsidiaries, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization more than 50% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled. Unless otherwise expressly provided, all references
herein to a "Subsidiary" shall mean a Subsidiary of the Company.
"Swing Line Borrowing Notice" is defined in Section 2.18(B).
"Swing Line Commitment" means the obligation of the Swing Line Lender to
make Swing Line Loans up to a maximum principal amount of $5,000,000 at any one
time outstanding.
"Swing Line Lender" means Bank One or such other Bank which may succeed to
its rights and obligations as Swing Line Lender pursuant to the terms of this
Agreement.
"Swing Line Loan" means a Loan made available to the Company by the Swing
Line Lender pursuant to Section 2.18.
"Taxes" means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding in the case of each Bank or applicable Lending
Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Bank or the Agent is incorporated or organized or (ii) the jurisdiction in
which the Agent's or such Bank's principal executive office or such Bank's
applicable Lending Installation is located.
"Transferee" is defined in Section 13.4.
------------
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance, an Absolute Rate Advance, a Eurodollar Bid Rate Advance or a Eurodollar
Ratable Advance, and with respect to any Loan, its nature as a Floating Rate
Loan, an Absolute Rate Loan, a Eurodollar Bid Rate Loan or a Eurodollar Ratable
Loan.
"Unfriendly Acquisition" means any Acquisition unless the board of
directors (or other person exercising similar functions) of the issuer of the
securities to be acquired shall have approved such Acquisition and recommended
it to the holders of the securities to be acquired.
"Unfunded Liabilities" means, (i) in the case of Single Employer Plans, the
amount (if any) by which the present value of all vested nonforfeitable benefits
under such Plan exceeds the fair market value of all Plan assets allocable to
such benefits, all determined as of the then most recent valuation date for such
Plan, and (ii) in the case of Multiemployer Plans, the withdrawal liability of
the Company and Subsidiaries.
"Unmatured Default" means an event which but for the lapse of time or the
giving of notice, or both, would constitute a Default.
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"Unrestricted Subsidiary" means any Subsidiary other than a Restricted
Subsidiary.
"Wholly-Owned Subsidiary" means (i) any Subsidiary all of the outstanding
voting securities of which shall at the time be owned or controlled, directly or
indirectly, by the Company or one or more Wholly-Owned Subsidiaries, or by the
Company and one or more Wholly-Owned Subsidiaries, or (ii) any partnership,
limited liability company, association joint venture or similar business
organization 100% of the ownership interests having ordinary voting power of
which shall at the time be so owned or controlled.
1.2 Singular and Plural. The foregoing definitions shall be equally
-------------------
applicable to both the singular and plural forms of the defined terms.
ARTICLE II: THE CREDITS
2.1 Commitment. From and including the Closing Date and prior to the
----------
Facility Termination Date, (i) each Bank severally agrees, on the terms and
conditions set forth in this Agreement, (a) to make Ratable Loans to the Company
from time to time, and (b) to participate in Facility LCs issued upon the
request of the Company from time to time, provided, that, after giving effect to
--------
the making of each such Ratable Loan and the issuance of each such Facility LC,
such Bank's Outstanding Credit Exposure shall not exceed its Commitment, and
(ii) each Bank may, in its sole discretion, make bids to make Competitive Bid
Loans to the Company in accordance with Section 2.19. In no event may the
Aggregate Outstanding Credit Exposure (including, without limitation, the
Ratable Advances and the Competitive Bid Advances) exceed the Aggregate
Commitment. Subject to the terms of this Agreement, the Company may borrow,
repay and reborrow at any time prior to the Facility Termination Date. The
Commitments to lend hereunder shall expire on the Facility Termination Date. The
LC Issuer will issue Facility LCs hereunder on the terms and conditions set
forth in Section 2.20.
2.2 Ratable Loans. Each Ratable Advance hereunder shall consist of
-------------
Loans made from the several Banks ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment. The aggregate
outstanding amount of Competitive Bid Advances shall reduce each Bank's
Commitment ratably in the proportion such Bank's Commitment bears to the
Aggregate Commitment regardless of which Bank or Banks make such Competitive Bid
Advances.
2.3 Rate Options. The Ratable Advances may be Floating Rate Advances
------------
or Eurodollar Advances, or a combination thereof, selected by the Company in
accordance with Section 2.8, or Swing Line Loans selected by the Company in
accordance with Section 2.18.
2.4 Mandatory Principal Payments. The Aggregate Outstanding Credit
----------------------------
Exposure and all other unpaid Obligations shall be paid in full by the Company
on the Facility Termination Date.
2.5 Optional Principal Payments. The Company may from time to time pay
---------------------------
all outstanding Floating Rate Advances (other than Swing Line Loans), or, in a
minimum aggregate amount of $100,000 or any integral multiple thereof, any
portion of the outstanding Floating Rate Advances (other than Swing Line Loans)
upon one Business Day's prior notice to the Agent without penalty or premium.
The Company may at any time pay, without penalty or
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premium, all outstanding Swing Line Loans, or, in a minimum amount of $100,000
and increments of $50,000 in excess thereof, any portion of the outstanding
Swing Line Loans, with notice to the Agent and the Swing Line Lender by 11:00
a.m. (Chicago time) on the date of repayment. The Company may from time to time
pay, subject to the payment of any fundings indemnification amounts required by
Section 3.3 but without penalty or premium, all outstanding Eurodollar Ratable
Advances, or, in a minimum aggregate amount of $100,000 or any integral multiple
of $100,000 in excess thereof, any portion of the outstanding Eurodollar Ratable
Advances upon three Business Days' prior notice to the Agent. A Competitive Bid
Loan may not be prepaid prior to the last day of the applicable Interest Period.
2.6 Commitment Fee and Reduction of Commitments. The Company agrees to
-------------------------------------------
pay to the Agent on each Payment Date for the account of each Bank a commitment
fee at a per annum rate equal to the Applicable Fee Rate multiplied by the
Available Aggregate Commitment from the Closing Date through and including the
date on which this Agreement is terminated in full and all of the Obligations
hereunder have been paid in full; provided, that Swing Line Loans and
Competitive Bid Loans shall not count as usage of any Bank's Commitment for the
purpose of calculating the commitment fee due hereunder. The Company may
permanently reduce the Aggregate Commitment in whole, or in part ratably among
the Banks, in integral multiples of $1,000,000, upon at least three Business
Days' written notice to the Agent, which shall specify the amount of any such
reduction, provided, however, that the amount of the Aggregate Commitment may
not be reduced below the Aggregate Outstanding Credit Exposure. All accrued
commitment fees shall be payable on the effective date of any termination of the
obligations of the Banks to make Credit Extensions hereunder.
2.7 Method of Borrowing. Not later than noon Chicago time on each
-------------------
Borrowing Date, each Bank shall make available its Loan or Loans in funds
immediately available in Chicago, to the Agent at its address specified pursuant
to Article XII. The Agent will make the funds so received from the Banks
available to the Company at the Agent's aforesaid address. Notwithstanding the
foregoing provisions of this Section, to the extent that a Loan made by a Bank
matures on the Borrowing Date of a requested Loan, such Bank shall apply the
proceeds of the Loan it is then making to the repayment of the maturing Loan.
2.8 Method of Selecting Rate Options and Interest Periods. The Company
-----------------------------------------------------
shall select the Rate Option for Ratable Advances and, in the case of each
Eurodollar Ratable Advance, the Interest Period applicable thereto from time to
time. The Company shall give the Agent irrevocable notice (a "Ratable Borrowing
Notice") not later than 11:00 a.m. Chicago time on the Borrowing Date of each
Floating Rate Advance (other than a Swing Line Loan) and three (3) Business Days
before the Borrowing Date for each Eurodollar Ratable Advance. Notwithstanding
the foregoing, a Ratable Borrowing Notice for a Floating Rate Advance may be
given not later than 12:00 noon (Chicago time) on the Borrowing Date for a
Floating Rate Advance (other than a Swing Line Loan) if the Company is required
to reject one or more bids offered in connection with an Absolute Rate Auction
pursuant to Section 2.19, and a Ratable Borrowing Notice for a Eurodollar
Ratable Advance may be given not later than 12:00 noon (Chicago time) three (3)
Business Days before the Borrowing Date for a Eurodollar Ratable Advance if the
Company is required to reject one or more bids offered in connection with a
Eurodollar Auction pursuant to Section 2.19. A Ratable Borrowing Notice shall
specify:
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(i) the Borrowing Date, which shall be a Business Day, of such Ratable
Advance,
(ii) the aggregate amount of such Ratable Advance,
(iii) the Rate Option selected for such Ratable Advance, and
(iv) in the case of each Eurodollar Ratable Advance, the Interest
Period applicable thereto.
Each Floating Rate Advance (other than a Swing Line Loan) shall bear interest on
the outstanding principal amount thereof, for each day from and including the
date such Advance is made or is automatically converted from a Eurodollar
Ratable Advance into a Floating Rate Advance pursuant to Section 2.9, to but
excluding the date it is paid or is converted into a Eurodollar Ratable Advance
pursuant to Section 2.9 hereof, at a rate per annum equal to the Floating Rate
for such day. Each Swing Line Loan shall bear interest on the outstanding
principal amount thereof, for each day from and including the day such Swing
Line Loan is made to but excluding the date it is paid, at a rate per annum
equal to the Floating Rate for such day. Changes in the rate of interest on that
portion of any Advance maintained as a Floating Rate Advance will take effect
simultaneously with each change in the Alternate Base Rate. Each Fixed Rate
Advance shall bear interest on the outstanding principal amount thereof from and
including the first day of the Interest Period applicable thereto to (but not
including) the last day of such Interest Period at the interest rate determined
as applicable to such Fixed Rate Advance. No Interest Period may end after the
Facility Termination Date.
2.9 Conversion and Continuation of Outstanding Ratable Advances.
-----------------------------------------------------------
Floating Rate Advances (other than Swing Line Loans) shall continue as Floating
Rate Advances unless and until such Floating Rate Advances are converted into
Eurodollar Ratable Advances pursuant to this Section 2.9 or are repaid in
accordance with Section 2.5. Each Eurodollar Ratable Advance shall continue as a
Eurodollar Ratable Advance until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Ratable Advance shall be automatically
converted into a Floating Rate Advance unless (x) such Eurodollar Ratable
Advance is or was repaid in accordance with Section 2.5 or (y) the Company shall
have given the Agent a Conversion/Continuation Notice (as defined below)
requesting that, at the end of such Interest Period, such Eurodollar Ratable
Advance continue as a Eurodollar Ratable Advance for the same or another
Interest Period. Subject to the terms of Section 2.5, the Company may elect from
time to time to convert all or any part of a Floating Rate Advance (other than a
Swing Line Loan) or into a Eurodollar Ratable Advance. The Company shall give
the Agent irrevocable notice (a "Conversion/Continuation Notice") of each
conversion of a Floating Rate Advance into a Eurodollar Ratable Advance or
continuation of a Eurodollar Ratable Advance not later than 11:00 a.m. (Chicago
time) at least three Business Days prior to the date of the requested conversion
or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
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(ii) the aggregate amount and Rate Option selected for the Ratable
Advance which is to be converted or continued, and
(iii) the amount of such Ratable Advance which is to be converted into
or continued as a Eurodollar Ratable Advance and the duration of the
Interest Period applicable thereto.
2.10 Minimum Amount of Each Advance. Each Eurodollar Ratable Advance
------------------------------
shall be in the minimum amount of $500,000 (and in multiples of $100,000 if in
excess thereof), and each Floating Rate Advance (other than an Advance to repay
Swing Line Loans) shall be in the minimum amount of $100,000 (and in multiples
of $100,000 if in excess thereof), provided, however, that any Floating Rate
Advance may be in the amount of the unused Aggregate Commitment. Each
Competitive Bid Advance shall be in the minimum amount of $500,000 (and in
multiples of $100,000 if in excess thereof). The Company shall not request a
Fixed Rate Advance if, after giving effect to the requested Fixed Rate Advance,
more than five (5) separate Fixed Rate Advances would be outstanding.
2.11 Rate after Default. Notwithstanding anything to the contrary
------------------
contained in Section 2.8 or 2.9, during the continuance of a Default or
Unmatured Default the Required Banks may, at their option, by notice to the
Company (which notice may be revoked at the option of the Required Banks
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Banks to changes in interest rates), declare that no Ratable Advance may be made
as, converted into or continued as a Eurodollar Ratable Advance. During the
continuance of a Default the Required Banks may, at their option, by notice to
the Company (which notice may be revoked at the option of the Required Banks
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Banks to changes in interest rates), declare that (i) each Fixed Rate Advance
shall bear interest for the remainder of the applicable Interest Period at the
rate otherwise applicable to such Interest Period plus 2% per annum, (ii) each
Floating Rate Advance shall bear interest at a rate per annum equal to the
Floating Rate in effect from time to time plus 2% per annum and (iii) the LC Fee
shall be increased by 2% per annum, provided that, during the continuance of a
Default under Section 7.6 or 7.7, the interest rates set forth in clauses (i)
and (ii) above and the increase in the LC Fee set forth in clause (iii) above
shall be applicable to all Credit Extensions without any election or action on
the part of the Agent or any Bank.
2.12 Method of Payment. All payments of principal, interest, and fees
-----------------
hereunder shall be made in immediately available funds, by noon (local time) on
the date when due and shall (except with respect to (i) repayments of Swing Line
Loans and (ii) Reimbursement Obligations for which the LC Issuer has not been
fully indemnified by the Banks, or as otherwise specifically required hereunder)
be made ratably among the Banks entitled thereto, to the Agent at the Agent's
address specified pursuant to Article XII or at any other Lending Installation
of the Agent specified in writing by the Agent to the Company. Each payment
delivered to the Agent for the account of any Bank shall be delivered promptly
by the Agent to such Bank in the same type of funds which the Agent received at
its address specified pursuant to Article XII or at any Lending Installation
specified in a notice received by the Agent from such Bank. The Agent is hereby
authorized to charge the account of the Company maintained with Bank One for
each payment of principal, interest, Reimbursement Obligations and fees as it
becomes due hereunder. Each reference to the Agent in this Section 2.12 shall
also
-17-
be deemed to refer, and shall apply equally, to the LC Issuer, in the case of
payments required to be made by the Company to the LC Issuer pursuant to Section
2.20(F).
2.13 Notes; Telephonic Notices. Each Bank is hereby authorized to
-------------------------
record the principal amount of each of its Credit Extensions and each repayment
on the schedule attached to its Note provided, however, that the failure to so
record shall not affect the Company's obligations under such Note. The Company
hereby authorizes the Banks and the Agent to extend Credit Extensions, effect
Rate Option selections and submit Competitive Bid Quotes based on telephonic
notices made by any person or persons the Agent or any Bank in good faith
believes to be acting on behalf of the Company. The Company agrees to deliver
promptly to the Agent a written confirmation of each telephonic notice signed by
an Authorized Officer. If the written confirmation differs in any material
respect from the action taken by the Agent and the Banks in response to any
telephonic notice, the records of the Agent and the Banks shall govern absent
manifest error.
2.14 Interest Payment Dates; Interest Basis. Interest accrued on each
--------------------------------------
Fixed Rate Advance shall be payable on the last day of its applicable Interest
Period and on any date on which the Advance is prepaid, whether due to
acceleration or otherwise. Interest accrued on each Fixed Rate Advance having an
Interest Period longer than three months shall also be payable on the last day
of each three-month interval during such Interest Period. Interest accrued on
each Floating Rate Advance shall be payable on each Payment Date and on any date
on which the Advance is prepaid, whether due to acceleration or otherwise.
Interest accrued on that portion of the outstanding principal amount of any
Floating Rate Advance converted into a Eurodollar Ratable Advance on a day other
than a Payment Date shall be payable on the date of conversion. Interest and
commitment fees shall be calculated for actual days elapsed on the basis of a
360-day year. Interest shall be payable for the day an Advance is made but not
for the day of any payment on the amount paid if payment is received prior to
noon (local time) at the place of payment. If any payment of principal of or
interest on an Advance shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and, in the case
of a principal payment, such extension of time shall be included in computing
interest in connection with such payment.
2.15 Notification of Advances, Interest Rates, Prepayments and
---------------------------------------------------------
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
---------------------
each Bank of the contents of each Aggregate Commitment reduction notice, Ratable
Borrowing Notice, Swing Line Borrowing Notice, Competitive Bid Borrowing Notice,
conversion/continuation notice and repayment notice received by it hereunder.
The Agent will notify each Bank of the interest rate applicable to each
Eurodollar Advance promptly upon determination of such interest rate and will
give each Bank prompt notice of each change in the Prime Rate.
2.16 Lending Installations. Each Bank may book its Credit Extensions
---------------------
at any Lending Installation selected by such Bank and the LC Issuer may book the
Facility LCs at any Lending Installation selected by the LC Issuer, as the case
may be, and may change its Lending Installation from time to time. All terms of
this Agreement shall apply to any such Lending Installation and the Loans,
Facility LCs, participations in LC Obligations and any Notes issued hereunder
shall be deemed held by each Bank or the LC Issuer, as the case may be, for the
benefit of such Lending Installation. Each Bank and the LC Issuer may, by
written or telex
-18-
notice to the Agent and the Company, designate a Lending Installation through
which Credit Extensions will be made by it and for whose account payments with
respect to Credit Extensions are to be made.
2.17 Non-Receipt of Funds by the Agent. Unless the Company or a Bank,
---------------------------------
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Bank, the
proceeds of a Credit Extension or (ii) in the case of the Company, a payment of
principal, interest or fees to the Agent for the account of the Banks, that it
does not intend to make such payment, the Agent may assume that such payment has
been made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Bank or the Company, as the case may be, has not in fact made such payment
to the Agent, the recipient of such payment shall, on demand by the Agent, repay
to the Agent the amount so made available together with interest thereon in
respect of each day during the period commencing on the date such amount was so
made available by the Agent until the date the Agent recovers such amount at a
rate per annum equal to (i) in the case of payment by a Bank, the Federal Funds
Effective Rate for such day for the first three days and thereafter, the
interest rate applicable to the relevant Loan or (ii) in the case of payment by
the Company, the interest rate applicable to the relevant Loan.
2.18 Swing Line Loans.
----------------
(A) Amount of Swing Line Loans. Upon the satisfaction of the
--------------------------
conditions precedent set forth in Section 4.2 and, if such Swing Line Loan
is to be made on the date of the initial Credit Extension hereunder, the
satisfaction of the conditions precedent set forth in Section 4.1 as well,
from and including the Closing Date and prior to the Facility Termination
Date, the Swing Line Lender agrees, on the terms and conditions set forth
in this Agreement, to make Swing Line Loans to the Company from time to
time in an aggregate principal amount not to exceed the Swing Line
Commitment, provided that the Aggregate Outstanding Credit Exposure shall
not at any time exceed the Aggregate Commitment, and provided further that
at no time shall the sum of (i) the Swing Line Lender's Pro Rata Share of
the Swing Line Loans, plus (ii) the outstanding Ratable Loans made by the
Swing Line Lender pursuant to Section 2.1, exceed the Swing Line Lender's
Commitment at such time. Subject to the terms of this Agreement, the
Company may borrow, repay and reborrow Swing Line Loans at any time prior
to the Facility Termination Date.
(B) Borrowing Notice. The Company shall deliver to the Agent and the
----------------
Swing Line Lender irrevocable notice (a "Swing Line Borrowing Notice") not
later than noon (Chicago time) on the Borrowing Date of each Swing Line
Loan, specifying (i) the applicable Borrowing Date (which date shall be a
Business Day), and (ii) the aggregate amount of the requested Swing Line
Loan which shall be an amount not less than $500,000 and in integral
multiples of $100,000 in excess thereof. The Swing Line Loans shall bear
interest at a rate per annum equal to (a) the Floating Rate or such other
rate as shall be agreed to by the Swing Line Lender and the Company plus
(b) the then Applicable Margin for Floating Rate Loans, changing as and
when the Applicable Margin changes.
-19-
(C) Making of Swing Line Loans. Promptly after receipt of a Swing Line
--------------------------
Borrowing Notice, the Agent shall notify each Bank by fax, or other similar
form of transmission, of the requested Swing Line Loan. Not later than 2:00
p.m. (Chicago time) on the applicable Borrowing Date, the Swing Line Lender
shall make available the Swing Line Loan, in funds immediately available in
Chicago, to the Agent at its address specified pursuant to Article XII. The
Agent will promptly make the funds so received from the Swing Line Lender
available to the Company on the Borrowing Date at the Agent's aforesaid
address.
(D) Repayment of Swing Line Loans. Each Swing Line Loan shall be paid
-----------------------------
in full by the Company on or before the seventh (7th) Business Day after
the Borrowing Date for such Swing Line Loan. In addition, the Swing Line
Lender (i) may at any time in its sole discretion with respect to any
outstanding Swing Line Loan, or (ii) shall on the seventh (7th) Business
Day after the Borrowing Date of any Swing Line Loan, require each Bank
(including the Swing Line Lender) to make a Ratable Loan in the amount of
such Bank's Pro Rata Share of such Swing Line Loan (including, without
limitation, any interest accrued and unpaid thereon), for the purpose of
repaying such Swing Line Loan. Not later than noon (Chicago time) on the
date of any notice received pursuant to this Section 2.18(D), each Bank
shall make available its required Ratable Loan, in funds immediately
available in Chicago to the Agent at its address specified pursuant to
Article XII. Ratable Loans made pursuant to this Section 2.18(D) shall
initially be Floating Rate Loans and thereafter may be continued as
Floating Rate Loans or converted into Eurodollar Loans in the manner
provided in Section 2.10 and subject to the other conditions and
limitations set forth in this Article II. Unless a Bank shall have notified
the Swing Line Lender, prior to its making any Swing Line Loan, that any
applicable condition precedent set forth in Sections 4.1 or 4.2 had not
then been satisfied, such Bank's obligation to make Ratable Loans pursuant
to this Section 2.18(D) to repay Swing Line Loans shall be unconditional,
continuing, irrevocable and absolute and shall not be affected by any
circumstances, including, without limitation, (a) any set-off,
counterclaim, recoupment, defense or other right which such Bank may have
against the Agent, the Swing Line Lender or any other Person, (b) the
occurrence or continuance of a Default or Unmatured Default, (c) any
adverse change in the condition (financial or otherwise) of the Company, or
(d) any other circumstances, happening or event whatsoever. In the event
that any Bank fails to make payment to the Agent of any amount due under
this Section 2.18(D), the Agent shall be entitled to receive, retain and
apply against such obligation the principal and interest otherwise payable
to such Bank hereunder until the Agent receives such payment from such Bank
or such obligation is otherwise fully satisfied. In addition to the
foregoing, if for any reason any Bank fails to make payment to the Agent of
any amount due under this Section 2.18(D), such Bank shall be deemed, at
the option of the Agent, to have unconditionally and irrevocably purchased
from the Swing Line Lender, without recourse or warranty, an undivided
interest and participation in the applicable Swing Line Loan in the amount
of such Ratable Loan, and such interest and participation may be recovered
from such Bank together with interest thereon at the Federal Funds
Effective Rate for each day during the period commencing on the date of
demand and ending on the date such amount is received. On the Facility
Termination Date, the Company shall repay in full the outstanding principal
balance of the Swing Line Loans.
-20-
2.19 Competitive Bid Advances.
------------------------
(A) Competitive Bid Option. In addition to Ratable Advances pursuant
----------------------
to this Article II, but subject to the terms and conditions of this
Agreement (including, without limitation, the limitation set forth in
Section 2.1 as to the maximum aggregate principal amount of all outstanding
Advances hereunder), the Company may, as set forth in this Section 2.19,
request the Banks, prior to the Facility Termination Date, to make offers
to make Competitive Bid Advances to the Company. Each Bank may, but shall
have no obligation to, make such offers and the Company may, but shall have
no obligation to, accept any such offers in the manner set forth in this
Section 2.19. Each Competitive Bid Advance shall be repaid by the Company
on the last day of the Interest Period applicable thereto.
(B) Competitive Bid Quote Request. When the Company wishes to request
-----------------------------
offers to make Competitive Bid Loans under this Section 2.19, it shall
transmit to the Agent by telecopy a Competitive Bid Quote Request so as to
be received no later than (i) 10:00 a.m. (Chicago time) at least three (3)
Business Days prior to the Borrowing Date proposed therein, in the case of
a Eurodollar Auction, or (ii) 9:00 a.m. (Chicago time) on the Borrowing
Date proposed therein, in the case of an Absolute Rate Auction, specifying:
(a) the proposed Borrowing Date, which shall be a Business Day,
for such Competitive Bid Advance,
(b) the aggregate principal amount of such Competitive Bid
Advance,
(c) whether the Competitive Bid Quotes requested are to set forth
a Competitive Bid Margin or an Absolute Rate, or both, and
(d) the Interest Period applicable thereto (which may not end
after the Facility Termination Date).
The Company may request offers to make Competitive Bid Loans for more than
one Interest Period and for a Eurodollar Auction and an Absolute Rate
Auction in a single Competitive Bid Quote Request. A Competitive Bid Quote
Request that does not conform substantially to the format of Exhibit E
hereto shall be rejected, and the Agent shall promptly notify the Company
of such rejection.
(C) Invitation for Competitive Bid Quotes. Promptly and in any event
-------------------------------------
before the close of business on the same Business Day of receipt of a
Competitive Bid Quote Request that is not rejected pursuant to Section
2.19(B), the Agent shall send to each of the Banks by telecopy an
Invitation for Competitive Bid Quotes substantially in the form of Exhibit
G hereto, which shall constitute an invitation by the Company to each Bank
to submit Competitive Bid Quotes offering to make the Competitive Bid Loans
to which such Competitive Bid Quote Request relates in accordance with this
Section 2.19.
(D) Submission and Contents of Competitive Bid Quotes.
-------------------------------------------------
-21-
(i) Each Bank may, in its sole discretion, submit a Competitive Bid
Quote containing an offer or offers to make Competitive Bid Loans in
response to any Invitation for Competitive Bid Quotes. Each Competitive Bid
Quote must comply with the requirements of this Section 2.19(D) and must be
submitted to the Agent by telecopy at its offices specified in or pursuant
to Article XII not later than (a) 10:30 a.m. (Chicago time) at least three
(3) Business Days prior to the proposed Borrowing Date, in the case of a
Eurodollar Auction or (b) 10:30 a.m. (Chicago time) on the proposed
Borrowing Date, in the case of an Absolute Rate Auction (or, in either case
upon reasonable prior notice to the Banks, such other time and date as the
Company and the Agent may agree); provided that Competitive Bid Quotes
submitted by Bank One may only be submitted if the Agent or Bank One
notifies the Company of the terms of the offer or offers contained therein
not later than 15 minutes prior to the latest time at which the relevant
Competitive Bid Quotes must be submitted by the other Banks. Subject to
Articles IV and VIII, any Competitive Bid Quote so made shall be
irrevocable except with the written consent of the Agent given on the
instructions of the Company.
(ii) Each Competitive Bid Quote shall be in substantially the form of
Exhibit G hereto and shall in any case specify:
(a) the proposed Borrowing Date, which shall be the same as that
set forth in the applicable Invitation for Competitive Bid Quotes,
(b) the principal amount of the Competitive Bid Loan for which
each such offer is being made, which principal amount (1) may be
greater than, less than or equal to the Commitment of the quoting
Bank, (2) must be at least $500,000 and an integral multiple of
$100,000, and (3) may not exceed the principal amount of Competitive
Bid Loans for which offers were requested,
(c) in the case of a Eurodollar Auction, the Competitive Bid
Margin offered for each such Competitive Bid Loan,
(d) the minimum amount, if any, of the Competitive Bid Loan which
may be accepted by the Company,
(e) in the case of an Absolute Rate Auction, the Absolute Rate
offered for each such Competitive Bid Loan,
(f) the maximum aggregate amount, if any, of Competitive Bid
Loans offered by the quoting Bank which may be accepted by the
Company, and
(g) the identity of the quoting Bank.
(iii) The Agent shall reject any Competitive Bid Quote that:
(a) is not substantially in the form of Exhibit G hereto or does
not specify all of the information required by this Section
2.19(D)(ii),
-22-
(b) contains qualifying, conditional or similar language, other
than any such language contained in Exhibit G hereto,
(c) proposes terms other than or in addition to those set forth
in the applicable Invitation for Competitive Bid Quotes, or
(d) arrives after the time set forth in Section 2.19(D)(i).
If any Competitive Bid Quote shall be rejected pursuant to this Section
2.19(D)(iii), then the Agent shall notify the relevant Bank of such
rejection as soon as practical.
(E) Notice to Company. The Agent shall promptly notify the Company of
-----------------
the terms (i) of any Competitive Bid Quote submitted by a Bank that is in
accordance with Section 2.19(D) and (ii) of any Competitive Bid Quote that
amends, modifies or is otherwise inconsistent with a previous Competitive
Bid Quote submitted by such Bank with respect to the same Competitive Bid
Quote Request. Any such subsequent Competitive Bid Quote shall be
disregarded by the Agent unless such subsequent Competitive Bid Quote
specifically states that it is submitted solely to correct a manifest error
in such former Competitive Bid Quote. The Agent's notice to the Company
shall specify the aggregate principal amount of Competitive Bid Loans for
which offers have been received for each Interest Period specified in the
related Competitive Bid Quote Request and the respective principal amounts
and Eurodollar Bid Rates or Absolute Rates, as the case may be, so offered.
(F) Acceptance and Notice by Company. Not later than (i) 11:00 a.m.
--------------------------------
(Chicago time) at least three Business Days prior to the proposed Borrowing
Date, in the case of a Eurodollar Auction or (ii) 11:00 a.m. (Chicago time)
on the proposed Borrowing Date, in the case of an Absolute Rate Auction
(or, in either case upon reasonable prior notice to the Banks, such other
time and date as the Company and the Agent may agree), the Company shall
notify the Agent of its acceptance or rejection of the offers so notified
to it pursuant to Section 2.19(E); provided, however, that the failure by
the Company to give such notice to the Agent shall be deemed to be a
rejection of all such offers. In the case of acceptance, such notice (a
"Competitive Bid Borrowing Notice") shall specify the aggregate principal
amount of offers for each Interest Period that are accepted. The Company
may accept any Competitive Bid Quote in whole or in part (subject to the
terms of Section 2.19(D)(ii)(d)); provided that:
(a) the aggregate principal amount of each Competitive Bid
Advance may not exceed the applicable amount set forth in the related
Competitive Bid Quote Request,
(b) acceptance of offers may only be made on the basis of
ascending Eurodollar Bid Rates or Absolute Rates, as the case may be,
and
(c) the Company may not accept any offer that is described in
Section 2.19(D)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
-23-
(G) Allocation by Agent. If offers are made by two or more Banks with
-------------------
the same Eurodollar Bid Rates or Absolute Rates, as the case may be, for a
greater aggregate principal amount than the amount in respect of which
offers are accepted for the related Interest Period, the principal amount
of Competitive Bid Loans in respect of which such offers are accepted shall
be allocated by the Agent among such Banks as nearly as possible (in such
multiples, not greater than $100,000, as the Agent may deem appropriate)
ratably based on each such Banks' Pro Rata Share as a percentage of the
aggregate of the Pro Rata Shares of all such Banks; provided, however, that
no Bank shall be allocated a portion of any Competitive Bid Advance which
is less than the minimum amount which such Bank has indicated that it is
willing to accept. Allocations by the Agent of the amounts of Competitive
Bid Loans shall be conclusive in the absence of manifest error. The Agent
shall promptly, but in any event on the same Business Day, notify each Bank
of its receipt of a Competitive Bid Borrowing Notice and the aggregate
principal amount of such Competitive Bid Advance allocated to each
participating Bank.
2.20 Facility LCs.
------------
(A) Issuance. The LC Issuer hereby agrees, on the terms and conditions
--------
set forth in this Agreement, to issue standby and commercial letters of
credit (each, a "Facility LC") and to renew, extend, increase, decrease or
otherwise modify each Facility LC ("Modify," and each such action a
"Modification"), from time to time from and including the Closing Date and
prior to the Facility Termination Date upon the request of the Company;
provided that immediately after each such Facility LC is issued or
Modified, (i) the aggregate amount of the outstanding LC Obligations shall
not exceed $5,000,000 and (ii) the Aggregate Outstanding Credit Exposure
shall not exceed the Aggregate Commitment. No Facility LC shall have an
expiry date later than (x) the fifth Business Day prior to the Facility
Termination Date and (y) one year after its issuance; provided, that any
Facility LC with a one-year tenor may provide for the renewal thereof for
additional one year periods (which in no event shall extend beyond the date
referred to in clause (x) above.
----------
(B) Participations. Upon the issuance or Modification by the LC Issuer
--------------
of a Facility LC in accordance with this Section 2.20, the LC Issuer shall
be deemed, without further action by any party hereto, to have
unconditionally and irrevocably sold to each Bank, and each Bank shall be
deemed, without further action by any party hereto, to have unconditionally
and irrevocably purchased from the LC Issuer, a participation in such
Facility LC (and each Modification thereof) and the related LC Obligations
in proportion to its Pro Rata Share.
(C) Notice. Subject to Section 2.20(A), the Company shall give the LC
------
Issuer notice prior to 10:00 a.m. (Chicago time) at least five Business
Days prior to the proposed date of issuance or Modification of each
Facility LC, specifying the beneficiary, the proposed date of issuance (or
Modification) and the expiry date of such Facility LC, and describing the
proposed terms of such Facility LC and the nature of the transactions
proposed to be supported thereby. Upon receipt of such notice, the LC
Issuer shall promptly notify the Agent, and the Agent shall promptly notify
each Bank, of the contents thereof and of the amount of such Bank's
participation in such proposed Facility
-24-
LC. The issuance or Modification by the LC Issuer of any Facility LC shall,
in addition to the conditions precedent set forth in Article IV (the
satisfaction of which the LC Issuer shall have no duty to ascertain), be
subject to the conditions precedent that such Facility LC shall be
satisfactory to the LC Issuer and that the Company shall have executed and
delivered such application agreement and/or such other instruments and
agreements relating to such Facility LC as the LC Issuer shall have
reasonably requested (each, a "Facility LC Application"). In the event of
any conflict between the terms of this Agreement and the terms of any
Facility LC Application, the terms of this Agreement shall control.
(D) LC Fees. The Company shall pay to the Agent, for the account of
-------
the Banks ratably in accordance with their respective Pro Rata Shares, (i)
with respect to each standby Facility LC, a letter of credit fee at a per
annum rate equal to the Applicable Margin for Eurodollar Ratable Loans in
effect from time to time on the average daily undrawn stated amount under
such standby Facility LC, such fee to be payable in arrears on each Payment
Date, and (ii) with respect to each commercial Facility LC, a letter of
credit fee at a per annum rate equal to seventy-five percent (75%) of the
Applicable Margin for Eurodollar Ratable Loans in effect from time to time
on the average daily undrawn stated amount under such commercial Facility
LC, such fee to be payable in arrears on each Payment Date (each such fee
described in this sentence an "LC Fee"). The Company shall also pay to the
LC Issuer for its own account (x) at the time of issuance of each Facility
LC, a fronting fee in an amount equal to 0.15% of the initial stated amount
(or, with respect to a Modification of any such Facility LC which increases
the stated amount thereof, such increase in the stated amount) thereof, and
(y) documentary and processing charges in connection with the issuance or
Modification of and draws under Facility LCs in accordance with the LC
Issuer's standard schedule for such charges as in effect from time to time.
(E) Administration; Reimbursement by Banks. Upon receipt from the
--------------------------------------
beneficiary of any Facility LC of any demand for payment under such
Facility LC, the LC Issuer shall notify the Agent and the Agent shall
promptly notify the Company and each other Bank as to the amount to be paid
by the LC Issuer as a result of such demand and the proposed payment date
(the "LC Payment Date"). The responsibility of the LC Issuer to the Company
and each Bank shall be only to determine that the documents (including each
demand for payment) delivered under each Facility LC in connection with
such presentment shall be in conformity in all material respects with such
Facility LC. The LC Issuer shall endeavor to exercise the same care in the
issuance and administration of the Facility LCs as it does with respect to
letters of credit in which no participations are granted, it being
understood that in the absence of any gross negligence or willful
misconduct by the LC Issuer, each Bank shall be unconditionally and
irrevocably liable without regard to the occurrence of any Default or any
condition precedent whatsoever, to reimburse the LC Issuer on demand for
(i) such Bank's Pro Rata Share of the amount of each payment made by the LC
Issuer under each Facility LC to the extent such amount is not reimbursed
by the Company pursuant to Section 2.20(F) below, plus (ii) interest on the
foregoing amount to be reimbursed by such Bank, for each day from the date
of the LC Issuer's demand for such Reimbursement (or, if such demand is
made after 11:00 a.m. (Chicago time) on such date, from the next succeeding
Business
-25-
Day) to the date on which such Bank pays the amount to be reimbursed by it,
at a rate of interest per annum equal to the Federal Funds Effective Rate
for the first three days and, thereafter, at a rate of interest equal to
the rate applicable to Floating Rate Advances.
(F) Reimbursement by Company. The Company shall be irrevocably and
------------------------
unconditionally obligated to reimburse the LC Issuer on or before the
applicable LC Payment Date for any amounts to be paid by the LC Issuer upon
any drawing under any Facility LC, without presentment, demand, protest or
other formalities of any kind; provided that neither the Company nor any
Bank shall hereby be precluded from asserting any claim for direct (but not
consequential) damages suffered by the Company or such Bank to the extent,
but only to the extent, caused by (i) the willful misconduct or gross
negligence of the LC Issuer in determining whether a request presented
under any Facility LC issued by it complied with the terms of such Facility
LC or (ii) the LC Issuer's failure to pay under any Facility LC issued by
it after the presentation to it of a request strictly complying with the
terms and conditions of such Facility LC. All such amounts paid by the LC
Issuer and remaining unpaid by the Company shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to (x) the rate
applicable to Floating Rate Advances for such day if such day falls on or
before the applicable LC Payment Date and (y) the sum of 2% plus the rate
applicable to Floating Rate Advances for such day if such day falls after
such LC Payment Date. The LC Issuer will pay to each Bank ratably in
accordance with its Pro Rata Share all amounts received by it from the
Company for application in payment, in whole or in part, of the
Reimbursement Obligation in respect of any Facility LC issued by the LC
Issuer, but only to the extent such Bank has made payment to the LC Issuer
in respect of such Facility LC pursuant to Section 2.20(E). Subject to the
terms and conditions of this Agreement (including without limitation the
submission of a Borrowing Notice in compliance with Section 2.8 and the
satisfaction of the applicable conditions precedent set forth in Article
IV), the Company may request an Advance hereunder for the purpose of
satisfying any Reimbursement Obligation.
(G) Obligations Absolute. The Company's obligations under this Section
--------------------
2.20 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment which
the Company may have or have had against the LC Issuer, any Bank or any
beneficiary of a Facility LC. The Company further agrees with the LC Issuer
and the Banks that the LC Issuer and the Banks shall not be responsible
for, and the Company's Reimbursement Obligation in respect of any Facility
LC shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even if such
documents should in fact prove to be in any or all respects invalid,
fraudulent or forged, or any dispute between or among the Company, any of
its Affiliates, the beneficiary of any Facility LC or any financing
institution or other party to whom any Facility LC may be transferred or
any claims or defenses whatsoever of the Company or of any of its
Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message
or advice, however transmitted, in connection with any Facility LC. The
Company agrees that any action taken or omitted by the LC Issuer or any
Bank under or in connection with each Facility LC and the related drafts
and documents, if done without gross
-26-
negligence or willful misconduct, shall be binding upon the Company and
shall not put the LC Issuer or any Bank under any liability to the Company.
Nothing in this Section 2.20(G) is intended to limit the right of the
Company to make a claim against the LC Issuer for damages as contemplated
by the proviso to the first sentence of Section 2.20(F).
(H) Actions of LC Issuer. The LC Issuer shall be entitled to rely, and
--------------------
shall be fully protected in relying, upon any Facility LC, draft, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel, independent accountants and other experts
selected by the LC Issuer. The LC Issuer shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first have received such advice or concurrence of the Required Banks as it
reasonably deems appropriate or it shall first be indemnified to its
reasonable satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or continuing to
take any such action. Notwithstanding any other provision of this Section
2.20, the LC Issuer shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a request
of the Required Banks, and such request and any action taken or failure to
act pursuant thereto shall be binding upon the Banks and any future holders
of a participation in any Facility LC.
(I) Indemnification. The Company hereby agrees to indemnify and hold
---------------
harmless each Bank, the LC Issuer and the Agent, and their respective
directors, officers, agents and employees from and against any and all
claims and damages, losses, liabilities, costs or expenses which such Bank,
the LC Issuer or the Agent may incur (or which may be claimed against such
Bank, the LC Issuer or the Agent by any Person whatsoever) by reason of or
in connection with the issuance, execution and delivery or transfer of or
payment or failure to pay under any Facility LC or any actual or proposed
use of any Facility LC, including, without limitation, any claims, damages,
losses, liabilities, costs or expenses which the LC Issuer may incur by
reason of or in connection with (i) the failure of any other Bank to
fulfill or comply with its obligations to the LC Issuer hereunder (but
nothing herein contained shall affect any rights the Company may have
against any defaulting Bank) or (ii) by reason of or on account of the LC
Issuer issuing any Facility LC which specifies that the term "Beneficiary"
included therein includes any successor by operation of law of the named
Beneficiary, but which Facility LC does not require that any drawing by any
such successor Beneficiary be accompanied by a copy of a legal document,
satisfactory to the LC Issuer, evidencing the appointment of such successor
Beneficiary; provided that the Company shall not be required to indemnify
any Bank, the LC Issuer or the Agent for any claims, damages, losses,
liabilities, costs or expenses to the extent, but only to the extent,
caused by (x) the willful misconduct or gross negligence of the LC Issuer
in determining whether a request presented under any Facility LC complied
with the terms of such Facility LC or (y) the LC Issuer's failure to pay
under any Facility LC after the presentation to it of a request strictly
complying with the terms and conditions of such Facility LC. Nothing in
this
-27-
Section 2.20(I) is intended to limit the obligations of the Company under
any other provision of this Agreement.
(J) Banks' Indemnification. Each Bank shall, ratably in accordance
----------------------
with its Pro Rata Share, indemnify the LC Issuer, its affiliates and their
respective directors, officers, agents and employees (to the extent not
reimbursed by the Company) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees' gross negligence or willful
misconduct or the LC Issuer's failure to pay under any Facility LC after
the presentation to it of a request strictly complying with the terms and
conditions of the Facility LC) that such indemnitees may suffer or incur in
connection with this Section 2.20 or any action taken or omitted by such
indemnitees hereunder.
(K) Facility LC Collateral Account. The Company agrees that it will,
------------------------------
upon the request of the Agent or the Required Banks and until the final
expiration date of any Facility LC and thereafter as long as any amount is
payable to the LC Issuer or the Banks in respect of any Facility LC,
maintain a special, interest-bearing collateral account pursuant to
arrangements satisfactory to the Agent (the "Facility LC Collateral
Account") at the Agent's office at the address specified pursuant to
Article XII, in the name of such Company but under the sole dominion and
control of the Agent, for the benefit of the Banks and in which such
Company shall have no interest other than as set forth in Section 8.1. The
Company hereby pledges, assigns and grants to the Agent, on behalf of and
for the ratable benefit of the Banks and the LC Issuer, a security interest
in all of the Company's right, title and interest in and to all funds which
may from time to time be on deposit in the Facility LC Collateral Account
to secure the prompt and complete payment and performance of the
Obligations. The Agent will invest any funds on deposit from time to time
in the Facility LC Collateral Account in certificates of deposit of Bank
One having a maturity not exceeding 30 days. Nothing in this Section
2.20(K) shall either obligate the Agent to require the Company to deposit
any funds in the Facility LC Collateral Account or limit the right of the
Agent to release any funds held in the Facility LC Collateral Account in
each case other than as required by Section 8.1.
(L) Rights as a Bank. In its capacity as a Bank, the LC Issuer shall
----------------
have the same rights and obligations as any other Bank.
2.21 Increase of Commitments. At any time prior to the Facility
-----------------------
Termination Date, the Company may, on the terms set forth below, request that
the Aggregate Commitment hereunder be increased; provided, that (i) the
Aggregate Commitment hereunder at no time shall exceed $75,000,000 minus the
aggregate amount of all reductions in the Aggregate Commitment previously made
pursuant to section 2.6, (ii) each such request shall be in a minimum amount of
at least $5,000,000 and in increments of $1,000,000 in excess thereof, (iii) an
increase in the Aggregate Commitment hereunder may only be made at a time when
no Default or Unmatured Default shall have occurred and be continuing, (iv) no
Bank's Commitment shall be increased under this Section 2.11(d) without its
consent. In the event of such a requested increase in the Aggregate Commitment,
any financial institution (including, without limitation, any existing Bank)
which the Company and the Agent invite to become a Bank or to increase its
Commitment may set the amount of its Commitment at a level agreed to by the
Company and the Agent. In
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the event that the Company and one or more of the Banks (or other financial
institutions) shall agree upon such an increase in the Aggregate Commitment (i)
the Company, the Agent and each Bank or other financial institution increasing
its Commitment or extending a new Commitment shall enter into an amendment to
this Agreement setting forth the amounts of the Commitments, as so increased,
providing that the financial institutions extending new Commitments shall be
Banks for all purposes under this Agreement, and setting forth such additional
provisions as the Agent and the Company shall consider reasonably appropriate
and (ii) the Company shall furnish, if requested, a new Note to each financial
institution that is extending a new Commitment or increasing its Commitment. No
such amendment shall require the approval or consent of any Bank whose
Commitment is not being increased. Upon the execution and delivery of such
amendment as provided above, and upon satisfaction of such other conditions as
the Agent may reasonably specify upon the request of the financial institutions
that are extending new Commitments (including, without limitation, the Agent
administering the reallocation of any outstanding Loans ratably among the Banks
after giving effect to each such increase in the Aggregate Commitment, and the
delivery of certificates, evidence of corporate authority and legal opinions on
behalf of the Company), this Agreement shall be deemed to be amended
accordingly.
ARTICLE III: CHANGE IN CIRCUMSTANCES
3.1 Yield Protection. If any law or any governmental rule, regulation,
----------------
policy, guideline or directive (whether or not having the force of law), or any
interpretation thereof, or compliance of any Bank with such,
(i) subjects any Bank, the LC Issuer or any applicable Lending
Installation to any Taxes or changes the basis of taxation of payments to
any Bank or the LC Issuer in respect of its Credit Extensions (including
any participations in Facility LCs) or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Bank, the
LC Issuer or any applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest rate applicable
to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Bank, the LC Issuer or any applicable Lending Installation
of making, funding or maintaining Credit Extensions (including any
participations in Facility LCs) or reduces any amount receivable by any
Bank, the LC Issuer or any applicable Lending Installation in connection
with Credit Extensions (including any participations in Facility LCs), or
requires any Bank, the LC Issuer or any applicable Lending Installation to
make any payment calculated by reference to the amount of Credit Extensions
(including any participations in Facility LCs) held or interest received by
it, by an amount deemed material by such Bank or the LC Issuer, except any
special charge imposed on a Bank or the LC Issuer separate from the
Assessment Rate that is imposed on such Bank or the LC Issuer, as
applicable, as a result of its non-performing loans or
-29-
(iv) affects the amount of capital required or expected to be
maintained by any Bank, the LC Issuer or Lending Office or any corporation
controlling any Bank or the LC Issuer and such Bank or the LC Issuer, as
applicable, determines the amount of capital required is increased by or
based upon the existence of this Agreement or its obligation to make Credit
Extensions (including any participations in Facility LCs) hereunder or of
commitments of this type,
then, within 15 days of demand by such Bank or the LC Issuer, as applicable, the
Company shall pay such Bank or the LC Issuer, as applicable, that portion of
such increased expense incurred (including, in the case of Section 3.1(iv), any
reduction in the rate of return on capital to an amount below that which it
could have achieved but for such change in regulation after taking into account
such Bank's or the LC Issuer's policies as to capital adequacy) or reduction in
an amount received which such Bank or the LC Issuer, as applicable, determines
is attributable to making, funding and maintaining its Credit Extensions and its
Commitment. The Company will not be liable for any amounts incurred by the Banks
or the LC Issuer more than one year prior to the receipt by the Company of a
notice from the Bank or the LC Issuer, as applicable, demanding payment of such
amounts.
3.2 Availability of Rate Options. If (x) any Bank determines that
----------------------------
maintenance of its Eurodollar Ratable Loans or Eurodollar Bid Rate Loans at a
suitable Lending Installation would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, or (y) any
Bank determines that (i) deposits of a type and maturity appropriate to match
fund Eurodollar Ratable Advances are not available or (ii) a Rate Option does
not accurately reflect the cost of making or maintaining a Credit Extension at
such Rate Option, then the Agent shall, in the case of clause (x) above, suspend
the availability of the affected Rate Option and require any Eurodollar Ratable
Advances or Eurodollar Bid Rate Advances outstanding under an affected Rate
Option to be repaid, subject to the payment of any funding indemnification
amounts required by Section 3.3, and in the case of clause (y) above, suspend
the availability of Eurodollar Ratable Advances and require any affected
Eurodollar Ratable Advances to be repaid or converted to Floating Rate Advances,
subject to the payment of any funding indemnification amounts required by
Section 3.3.
3.3 Funding Indemnification. If any payment of a Fixed Rate Advance
-----------------------
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Fixed Rate
Advance is not made on the date specified by the Company for any reason other
than default by the Banks, the Company will indemnify each Bank for any loss or
cost incurred by it resulting therefrom, including, without limitation, any loss
or cost in liquidating or employing deposits acquired to fund or maintain the
Fixed Rate Advance.
3.4 Taxes.
-----
(i) All payments by the Company to or for the account of any Bank, the
LC Issuer or the Agent hereunder or under any Note shall be made free and clear
of and without deduction for any and all Taxes. If the Company shall be required
by law to deduct any Taxes from or in respect of any sum payable hereunder to
any Bank, the LC Issuer or the Agent, (a) the sum payable shall be increased as
necessary so that after making all required deductions
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(including deductions applicable to additional sums payable under this Section
3.5) such Bank, the LC Issuer or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(b) the Company shall make such deductions, (c) the Company shall pay the full
amount deducted to the relevant authority in accordance with applicable law and
(d) the Company shall furnish to the Agent the original copy of a receipt
evidencing payment thereof within 30 days after such payment is made.
(ii) In addition, the Company hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder or under
any Note or from the execution or delivery of, or otherwise with respect to,
this Agreement or any Note ("Other Taxes").
(iii) The Company hereby agrees to indemnify the Agent, the LC Issuer
and each Bank for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.5) paid by the Agent, the LC Issuer or such Bank and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made within 30 days of
the date the Agent, the LC Issuer or such Bank makes demand therefor pursuant to
Section 3.5.
(iv) Each Bank that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Bank") agrees that it
will, not more than ten Business Days after the Closing Date, or, if later, not
more than ten Business Days after becoming a Bank hereunder, (i) deliver to each
of the Company and the Agent two (2) duly completed copies of United States
Internal Revenue Service Form W8BEN or W8ECI, certifying in either case that
such Bank is entitled to receive payments under this Agreement without deduction
or withholding of any United States federal income taxes, and (ii) deliver to
each of the Company and the Agent a United States Internal Revenue Form W-8 or
W-9, as the case may be, and certify that it is entitled to an exemption from
United States backup withholding tax. Each Non-U.S. Bank further undertakes to
deliver to each of the Company and the Agent (x) renewals or additional copies
of such form (or any successor form) on or before the date that such form
expires or becomes obsolete, and (y) after the occurrence of any event requiring
a change in the most recent forms so delivered by it, such additional forms or
amendments thereto as may be reasonably requested by the Company or the Agent.
All forms or amendments described in the preceding sentence shall certify that
such Bank is entitled to receive payments under this Agreement without deduction
or withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Bank from duly completing and delivering any such form or amendment with respect
to it and such Bank advises the Company and the Agent that it is not capable of
receiving payments without any deduction or withholding of United States federal
income tax.
(v) For any period during which a Non-U.S. Bank has failed to provide
the Company with an appropriate form pursuant to clause (iv), above (unless such
failure is due to a change in treaty, law or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was
-31-
required to be provided), such Non-U.S. Bank shall not be entitled to
indemnification under this Section 3.4 with respect to Taxes imposed by the
United States; provided that, should a Non-U.S. Bank which is otherwise exempt
from or subject to a reduced rate of withholding tax become subject to Taxes
because of its failure to deliver a form required under clause (iv), above, the
Company shall take such steps as such Non-U.S. Bank shall reasonably request to
assist such Non-U.S. Bank to recover such Taxes.
(vi) Any Bank that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Company (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Bank (because the appropriate form was
not delivered or properly completed, because such Bank failed to notify the
Agent of a change in circumstances which rendered its exemption from withholding
ineffective, or for any other reason), such Bank shall indemnify the Agent fully
for all amounts paid, directly or indirectly, by the Agent as tax, withholding
therefor, or otherwise, including penalties and interest, and including taxes
imposed by any jurisdiction on amounts payable to the Agent under this
subsection, together with all costs and expenses related thereto (including
attorneys fees and time charges of attorneys for the Agent, which attorneys may
be employees of the Agent). The obligations of the Banks under this Section
3.4(vii) shall survive the payment of the Obligations and termination of this
Agreement.
3.5 Bank Certificates; Survival of Indemnity. To the extent reasonably
----------------------------------------
possible, each Bank shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Company to such
Bank under Section 3.1 or to avoid the unavailability of a Rate Option under
Section 3.2, so long as such designation is not disadvantageous to such Bank. A
certificate of a Bank as to the amount due under Section 3.1, 3.3 and 3.4 shall
be final, conclusive and binding on the Company in the absence of manifest
error. Determination of amounts payable under such Sections in connection with a
Eurodollar Loan shall be calculated as though each Bank funded its Eurodollar
Loan through the purchase of a deposit of the type and maturity corresponding to
the deposit used as a reference in determining the Eurodollar Rate or Eurodollar
Bid Rate, as the case may be, applicable to such Loan, whether in fact that is
the case or not. Unless otherwise provided herein, the amount specified in the
certificate shall be payable on demand after receipt by the Company of the
certificate. The obligations of the Company under Sections 3.1, 3.3 or 3.4 shall
survive payment of the Obligations and termination of this Agreement.
ARTICLE IV: CONDITIONS PRECEDENT
4.1 Initial Credit Extension. The Banks shall not be required to make
------------------------
the initial Credit Extension hereunder unless the Company has furnished to the
Agent, with sufficient copies for the Banks:
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(a) Copies of the articles or certificate of incorporation (or similar
constitutive documents) of the Company and each Guarantor
(collectively, the "Loan Parties"), together with all amendments, and
a certificate of good standing, both certified by the appropriate
governmental officer in its jurisdiction of organization.
(b) Copies, certified by the Secretary or Assistant Secretary of each Loan
Party, of its By-Laws (or similar constitutive documents) and of its
Board of Directors' resolutions (and resolutions of other bodies, if
any are deemed necessary by counsel for any Bank) authorizing the
execution of the Loan Documents to which it is a party.
(c) An incumbency certificate, executed by the Secretary or Assistant
Secretary of each Loan Party, which shall identify by name and title
and bear the signature of the officers of such Loan Party authorized
to sign the Loan Documents to which it is a party and to make
borrowings hereunder, upon which certificate the Banks shall be
entitled to rely until informed of any change in writing by the
Company.
(d) A certificate, signed by an Authorized Officer of the Company, stating
that as of the date of the initial Credit Extension no Default or
Unmatured Default has occurred and is continuing.
(e) A written opinion of the Loan Parties' counsel, addressed to the Banks
in substantially the form of Exhibit B hereto.
(f) Notes payable to the order of each of the Banks.
(g) Evidence satisfactory to the Banks that the Existing Credit Agreement
shall have been, or shall simultaneously with any initial Credit
Extension hereunder be, terminated and all indebtedness and
obligations thereunder shall have been, or shall simultaneously with
any initial Credit Extension hereunder be, paid in full.
(h) Such other documents as any Bank or its counsel may have reasonably
requested.
4.2 Each Credit Extension. No Bank shall be required to make any
---------------------
Credit Extension (including the initial Credit Extension, but except as
otherwise set forth in Section 2.18(D) with respect to Ratable Loans for the
purpose of repaying Swing Line Loans), unless on the applicable Borrowing Date:
(a) There exists no Default or Unmatured Default.
(b) The representations and warranties (other than the representation
contained in Section 5.5 which shall be made only as of the Closing
Date) contained in Article V are true and correct as of such Borrowing
Date except for changes in the Schedules hereto reflecting
transactions permitted by this Agreement.
(c) All legal matters incident to the making of such Credit Extension
shall be satisfactory to the Banks and their counsel.
-33-
Each Ratable Borrowing Notice or Swing Line Borrowing Notice and
Competitive Bid Borrowing Notice, or request for issuance of a Facility LC, as
the case may be, with respect to each such Credit Extension shall constitute a
representation and warranty by the Company that the conditions contained in
Sections 4.2(a) and (b) have been satisfied. Any Bank may require a duly
completed compliance certificate in substantially the form of Exhibit C hereto
as a condition to making a Credit Extension.
ARTICLE V: REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Banks that:
5.1 Existence and Standing. Each of the Company and the Subsidiaries
----------------------
is a corporation, partnership (in the case of Subsidiaries only) or limited
liability company duly and properly incorporated or organized, as the case may
be, validly existing and (to the extent such concept applies to such entity) in
good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted except in those instances in
which the failure to maintain such authority does not materially adversely
affect the business or condition of the Company and the Subsidiaries taken as a
whole.
5.2 Authorization and Validity. The Company has the corporate power
--------------------------
and authority and legal right to execute and deliver the Loan Documents and to
perform its obligations thereunder. The execution and delivery by the Company of
the Loan Documents and the performance of its obligations thereunder have been
duly authorized by proper corporate proceedings, and the Loan Documents
constitute legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except as enforceability may
be limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally.
5.3 No Conflict; Government Consent. Neither the execution and
-------------------------------
delivery by the Company of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate (i) any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Company or any Restricted Subsidiary or (ii) the
Company's or any Restricted Subsidiary's articles or certificate of
incorporation, partnership agreement, certificate of partnership, articles or
certificate of organization, by-laws, or operating or other management
agreement, as the case may be, or (iii) the provisions of any indenture,
instrument or agreement to which the Company or any Restricted Subsidiary is a
party or is subject, or by which it, or its property, is bound, or conflict with
or constitute a default thereunder, or result in the creation or imposition of
any Lien in, of or on the property of the Company or a Restricted Subsidiary
pursuant to the terms of any such indenture, instrument or agreement. No order,
consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any governmental or public body
or authority, or any subdivision thereof, is required to authorize, or is
required in connection with the execution, delivery and performance of, or the
legality, validity, binding effect or enforceability of, any of the Loan
Documents.
-34-
5.4 Financial Statements. The December 31, 2001 audited consolidated
--------------------
financial statements and the September 30, 2001 unaudited consolidated financial
statements of the Company and the Restricted Subsidiaries heretofore delivered
to the Banks were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present the consolidated financial condition and operations of the Company and
the Restricted Subsidiaries at such date and the consolidated results of their
operations for the period then ended.
5.5 Material Adverse Change. No material adverse change in the
-----------------------
business, financial condition, prospects or results of operations of the Company
and the Restricted Subsidiaries has occurred since the date of the financial
statements referred to in Section 5.4.
5.6 Taxes. The Company and the Restricted Subsidiaries have filed all
-----
United States federal tax returns and all other tax returns which are required
to be filed and have paid all taxes due pursuant to said returns or pursuant to
any assessment received by the Company or any Subsidiary, except such taxes, if
any, as are being contested in good faith and as to which adequate reserves have
been provided. The United States income tax returns of the Company and the
Subsidiaries have been audited by the Internal Revenue Service through the
fiscal year ended December 31, 1997. No tax liens have been filed and no claims
are being asserted with respect to any such taxes. To the best of the Company's
knowledge and belief, the charges, accruals and reserves on the books of the
Company and the Restricted Subsidiaries in respect of any taxes or other
governmental charges are adequate.
5.7 Litigation. Except as disclosed in the Company's financial
----------
statements referred to in Section 5.4 and the opinion of the Company's counsel
referred to in Section 4.1(e), there is no litigation or proceeding pending or,
to the knowledge of any of their officers, threatened against or affecting the
Company or any Restricted Subsidiary which might materially adversely affect the
business, financial condition or results of operations of the Company or the
ability of the Company to perform its obligations under the Loan Documents. No
material adverse change, as evidenced by the filing of a Form 8-K, in the
litigation referred to in the opinion of the Company's counsel referred to in
Section 4.1(e) has occurred since the Closing Date. The Company is not, to the
best of its knowledge and belief (i) in default with respect to any order, writ,
injunction or decree of any court or (ii) in default in any material respect
under any order, regulations (including but not limited to any environmental
regulation), permit, license or demand of any federal, state, municipal or other
governmental agency, the consequences of which would materially and adversely
affect the business, properties or assets or the condition, financial or
otherwise, of the Company.
5.8 Subsidiaries. Schedule 1 hereto contains an accurate list of all
------------
of the presently existing Subsidiaries of the Company, setting forth, among
other things, their respective jurisdictions of organization and the percentage
of their respective capital stock or other ownership interests owned by the
Company or other Subsidiaries and whether each Subsidiary is a Restricted
Subsidiary or an Unrestricted Subsidiary. All of the issued and outstanding
shares of capital stock or other ownership interests of such Subsidiaries have
been (to the extent such concepts are relevant with respect to such ownership
interests) duly authorized and issued and are fully paid and non-assessable.
-35-
5.9 ERISA. The Unfunded Liabilities of all Plans do not in the
-----
aggregate exceed $5,000,000. Each Plan complies in all material respects with
all applicable requirements of law and regulations and no Reportable Event has
occurred with respect to any Plan.
5.10 Accuracy of Information. No information, exhibit or report
-----------------------
furnished by the Company or any Subsidiary to the Agent or to any Bank in
connection with the negotiation of the Loan Documents contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein not misleading.
5.11 Regulation U. Margin stock (as defined in Regulation U)
------------
constitutes less than 25% of the book value of those assets of the Company and
its Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder.
5.12 Material Agreements. Neither the Company nor any Subsidiary is a
-------------------
party to any agreement or instrument or subject to any charter or other
corporate restriction materially and adversely affecting its business,
properties or assets, operations or condition (financial or otherwise). Neither
the Company nor any Subsidiary is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in (i)
any agreement to which it is a party, which default might have a material
adverse effect on the business, properties or assets, operations, or condition
(financial or otherwise) of the Company and its Subsidiaries or (ii) any
agreement or instrument evidencing or governing Indebtedness.
5.13 Subordinated Indebtedness. The Obligations constitute senior
-------------------------
indebtedness which will be entitled to the benefits of the subordination
provisions of all outstanding Subordinated Indebtedness.
5.14 Compliance with Environmental Laws. Except as disclosed in the
----------------------------------
Company's financial statements referred to in Section 5.4, the Company and its
Subsidiaries comply with all applicable Federal, state and local laws, statutes,
rules, regulations and ordinances relating to public health, safety or the
environment including, without limitation, relating to releases, discharges,
emissions or disposals to air, water, land or ground water, to the withdrawal or
use of ground water, to the use, handling or disposal of polychlorinated
biphenyls (PCBs), asbestos or urea formaldehyde, to the treatment, storage,
disposal or management of hazardous substances (including, without limitation,
petroleum, its derivatives, by-products or other hydrocarbons), to exposure to
toxic, hazardous or other controlled, prohibited or regulated substances, to the
transportation, storage, disposal, management or release of gases or liquid
substances, the failure to comply with which could have a materially adverse
effect on the Company, its Subsidiaries, their business and properties, taken as
a whole. Except as disclosed in the Company's financial statements referred to
in Section 5.4, the Company does not know of any liability of the Company or any
Subsidiary under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986 (42 U.S.C. Section 9601 et seq.) which could have a
-- ---
material adverse effect on the Company and its Subsidiaries on a consolidated
basis.
5.15 Compliance With Laws. The Company and its Subsidiaries have
--------------------
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the
-36-
conduct of their respective businesses or the ownership of their respective
Property, except for any failure to comply with any of the foregoing which could
not reasonably be expected to have a material adverse effect on the Company and
its Subsidiaries on a consolidated basis.
5.16 Ownership of Properties. Except as set forth on Schedule 2, on
-----------------------
the Closing Date, the Company and its Subsidiaries will have good title, free of
all Liens other than those permitted by Section 6.14, to all of the Property and
assets reflected in the Company's most recent consolidated financial statements
provided to the Agent as owned by the Company and its Subsidiaries.
5.17 Plan Assets; Prohibited Transactions. The Company is not an
------------------------------------
entity deemed to hold "plan assets" within the meaning of 29 C.F.R. Section
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making of
Loans hereunder gives rise to a prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code.
5.18 Investment Company Act. Neither the Company nor any Subsidiary is
----------------------
an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.19 Public Utility Holding Company Act. Neither the Company nor any
----------------------------------
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
ARTICLE VI: COVENANTS
During the term of this Agreement, and until the Obligations are paid in
full, unless the Required Banks shall otherwise consent in writing:
6.1 Financial Reporting. The Company will maintain, for itself and
-------------------
each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles ("GAAP"), and furnish
to the Banks:
(a) Annual Reports and Financial Statements. As soon as reasonably
---------------------------------------
possible, and in any event within 90 days after the close of each fiscal
year of the Company, (1) the balance sheet of the Company and the
Restricted Subsidiaries as of the end of such fiscal year, setting forth in
comparative form the corresponding figures as of the end of the preceding
fiscal year, and (2) the statements of income, stockholders' equity and
cash flows of the Company and the Restricted Subsidiaries for such fiscal
year, setting forth in comparative form the corresponding figures for the
preceding fiscal year. Such balance sheet and statements shall be prepared
in reasonable detail and in accordance with Agreement Accounting Principles
and shall be prepared on a consolidated basis under the circumstances set
forth in the first paragraph following subsection (i) of this Section 6.1;
and such balance sheets and statements shall be accompanied by an opinion
of independent public accountants of recognized national standing
acceptable to the Banks, which opinion shall state that such financial
statements
-37-
were prepared in accordance with GAAP. In addition, such accountants will
furnish to you a letter stating that in making their examination of such
financial statements nothing came to their attention which caused them to
believe that there was any Default by the Company in the performance or
observance of any covenant of the Company contained herein insofar as such
covenants pertain to accounting matters, provided that if in the course of
their regular auditing procedure such accountants become aware of any other
type of default, they shall disclose the same but such accountants shall
have no responsibility for ascertaining the existence of any such Default.
The Company agrees to supply you promptly with a copy of any letter,
certificate or other writing supplied by its independent public accountants
to any other person pertaining to whether such accountants have cause to
believe that there has been any default by the Company under any other
agreement or evidence of Indebtedness.
(b) Quarterly Financial Statements. As soon as reasonably possible,
------------------------------
and in any event within 60 days after the close of each of the first three
fiscal quarters of the Company, (1) the balance sheet of the Company and
its Restricted Subsidiaries as of the end of such quarter, setting forth in
comparative form the corresponding figures for the corresponding quarter of
the preceding fiscal year, and (2) the income and stockholders' equity and
cash flows statements of the Company and Restricted Subsidiaries for such
quarter and for the portion of the fiscal year ended with such quarter,
setting forth in comparative form the corresponding figures for the
corresponding periods of the preceding fiscal year, all in reasonable
detail (and prepared on a consolidated basis under the circumstances set
forth in the first paragraph following subsection (i) of this Section 6.1)
and certified as complete and correct by a principal financial officer of
the Company.
(c) Together with the financial statements required hereunder, a
compliance certificate in substantially the form of Exhibit C hereto signed
by the Vice President - Finance and Administration or the Vice President
and Corporate Controller of the Company showing the calculations necessary
to determine compliance with this Agreement and stating that no Default or
Unmatured Default exists, or if any Default or Unmatured Default exists,
stating the nature and status thereof.
(d) During each fiscal year, within 30 days of receipt, a statement of
the Unfunded Liabilities of each Plan, certified as correct by an actuary
enrolled under ERISA.
(e) As soon as possible and in any event within 10 days after the
Company knows that any Reportable Event has occurred with respect to any
Plan, a statement, signed by the Vice President - Finance and
Administration or the Vice President and Corporate Controller of the
Company, describing said Reportable Event and the action which the Company
proposes to take with respect thereto.
(f) Promptly upon the furnishing thereof to the shareholders of the
Company, copies of all financial statements, reports and proxy statements
so furnished.
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(g) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which
the Company or any Restricted Subsidiary files with the Securities and
Exchange Commission.
(h) Promptly after the end of each fiscal quarter revised Schedules 1,
2 and 3 to the Agreement if there are any additions or deletions to those
Schedules.
(i) Such other information (including non-financial information) as
the Agent or any Bank may from time to time reasonably request.
If, and so long as, the Company has (i) one or more Restricted
Subsidiaries, the financial statements referred to in subsections (a) and (b) of
this Section 6.1 shall be on a consolidated basis prepared in accordance with
Agreement Accounting Principles, or (ii) one or more Unrestricted Subsidiaries,
the Company shall deliver to the Agent, promptly after receipt thereof, copies
of balance sheets and income and surplus and cash flows statements of each such
Subsidiary, prepared in accordance with Agreement Accounting Principles, which
are not included in the financial statements furnished pursuant to subsection
(a) of this Section 6.1, in the form delivered to the Company for the fiscal
year of each such Subsidiary.
6.2 Use of Proceeds. The Company will, and will cause each Restricted
---------------
Subsidiary to, use the proceeds of the Credit Extensions to finance
Acquisitions, other than Unfriendly Acquisitions, for working capital and
general corporate purposes. The Company will not, nor will it permit any
Restricted Subsidiary to, use any of the proceeds of the Loans to purchase or
carry any "margin stock" (as defined in Regulation U).
6.3 Financial Covenants.
-------------------
(A) Interest Coverage Ratio. The Company and the Restricted
-----------------------
Subsidiaries will maintain a ratio of Consolidated Earnings Before Interest
and Taxes to Consolidated Interest Expense, as of the end of each fiscal
quarter of the Company, such that the ratio calculated for such fiscal
quarter and the preceding three fiscal quarters taken as one accounting
period is at least 2.0 to 1.0.
(B) Funded Indebtedness Limitation. At no time shall the Company
------------------------------
permit the ratio of (i) Consolidated Funded Indebtedness of the Company and
the Restricted Subsidiaries to (ii) Consolidated Capitalization to exceed
0.55 to 1.00; provided that for purposes of this Section 6.3(B) all
--------
obligations incurred pursuant to Sections 6.18(2), (3), and (4) shall
constitute Funded Indebtedness.
6.4 Notice of Default. The Company will, and will cause each
-----------------
Restricted Subsidiary to, give prompt notice in writing to the Banks of the
occurrence of any Default or Unmatured Default and of any other development,
financial or otherwise, which might materially adversely affect its business,
properties or affairs or the ability of the Company to repay the Obligations
within five days after the Company's senior management shall have the knowledge
that an event constituting a Default or Unmatured Default or such a development
has occurred.
6.5 Conduct of Business. The Company will, and will cause each
-------------------
Restricted Subsidiary to, carry on and conduct its business in the fields of
manufacturing, developing,
-39-
producing and selling products which are primarily in the chemical field and to
do all things necessary to remain duly incorporated, validly existing and in
good standing as a domestic corporation in its jurisdiction of incorporation and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted except on those instances in which the failure
to maintain all such authority does not materially adversely affect the business
of the Company and the Restricted Subsidiaries taken as a whole.
6.6 Taxes. The Company will, and will cause each Restricted Subsidiary
-----
to, pay when due all taxes, assessments and governmental charges and levies upon
it or its income, profits or property, except those which are being contested in
good faith by appropriate proceedings and with respect to which adequate
reserves have been set aside.
6.7 Insurance. The Company will, and will cause each Restricted
---------
Subsidiary to, maintain with financially sound and reputable insurance companies
insurance on all their property in such amounts and covering such risks as is
consistent with sound business practice, and the Company will furnish to any
Bank upon request full information as to the insurance carried.
6.8 Compliance with Laws. The Company will, and will cause each
--------------------
Restricted Subsidiary to, comply with all laws, rules, regulations, orders,
writs, judgments, injunctions, decrees or awards to which it may be subject
except to the extent that such laws, rules, regulations, orders, writs,
judgments, decrees or awards (or the application of any thereof to the Company
or a Restricted Subsidiary thereof) are being contested by the Company by
appropriate proceedings provided that neither the Company nor any Restricted
Subsidiary shall be required to maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted in those
instances where the failure to maintain all such authority does not materially
adversely affect the business or condition of the Company and the Restricted
Subsidiaries taken as a whole.
6.9 Maintenance of Properties. The Company will, and will cause each
-------------------------
Restricted Subsidiary to, do all things necessary to maintain, preserve, protect
and keep its properties in good repair, working order and condition, and make
all necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times except
to the extent that compliance with this Section 6.9 is made impossible by fire,
flood, earthquakes, storm, natural disaster, strikes, accidents, inability to
secure labor or other causes beyond the control of the Company and the
Restricted Subsidiaries.
6.10 Inspection. The Company will, and will cause each Restricted
----------
Subsidiary to, permit the Banks, by their respective representatives and agents,
to inspect any of the properties, corporate books and financial records of the
Company and each Restricted Subsidiary, to examine and make copies of the books
of accounts and other financial records of the Company and each Restricted
Subsidiary, and to discuss the affairs, finances and accounts of the Company and
each Restricted Subsidiary with, and to be advised as to the same by, their
respective officers at such reasonable times and intervals as the Banks may
designate.
6.11 Dividends. The Company will not declare or pay, or set apart any
---------
funds for the payment of, any dividends (other than dividends payable in common
stock of the
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Company) on any shares of capital stock of any class of the Company, or apply
any of its funds, property or assets to, or set apart any funds, property or
assets for, the purchase, redemption or other retirement of, or make any other
distribution, by reduction of capital or otherwise, in respect of, any shares of
capital stock of any class of the Company (collectively referred to as
"Restricted Payments"), unless, immediately after giving effect to such action:
the sum of
(1) the amounts declared and paid or payable as, or set apart for,
dividends (other than dividends paid or payable in common stock of the
Company) on, or distributions (taken at cost to the Company or fair value
at time of distribution, whichever is higher) in respect of, all shares of
capital stock of all classes of the Company subsequent to December 31,
2001, and
(2) the excess, if any, of the amounts applied to, or set apart for,
the purchase, redemption or retirement of all shares of capital stock of
all classes of the Company subsequent to December 31, 2001, over the sum of
(i) such amounts as shall have been received as the net cash proceeds of
sales of shares of capital stock of all classes of the Company subsequent
to December 31, 2001, plus (ii) the aggregate principal amount of all
indebtedness of the Company and its Subsidiaries converted into or
exchanged for shares of capital stock of the Company subsequent to December
31, 2001,
will not be in excess of (x) $30,000,000 plus (or minus in the case of a
deficit) (y) the consolidated net income of the Company and its Restricted
Subsidiaries accrued subsequent to December 31, 2001. The foregoing provisions
of this Section 6.11 to the contrary notwithstanding (i) the Company may pay any
dividend within 90 days of the date of its declaration if, on the date of
declaration, such dividend could properly have been paid within the limitations
of this Section 6.11 and (ii) the Company may pay regular dividends on or make
payments or purchases required to be made at the time when made by the terms of
any sinking fund, purchase fund or mandatory redemption requirement in respect
of any outstanding shares of preferred stock of the Company originally issued
for cash but all amounts so paid or applied pursuant to clauses (i) and (ii)
above shall be included in any subsequent computation of Restricted Payments
under this Section 6.11. The Company will not declare any dividend payable more
than 90 days after the date of declaration thereof. The Company will not declare
any dividend if a Default or Unmatured Default shall have occurred and be
continuing.
6.12 Indebtedness.
------------
(A) The Company will not create, incur, issue, assume, permit to exist
or become or be liable, contingently or otherwise, in respect of any
Current Indebtedness or Funded Indebtedness other than:
(1) Unsecured Current Indebtedness arising in the ordinary course of
business;
(2) Indebtedness represented by dividends declared as permitted by
Section 6.11, but not yet paid;
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(3) Unsecured Current Indebtedness for borrowed money;
(4) Current Indebtedness representing amounts payable within one year
in respect of any Funded Indebtedness permitted by this Section 6.12;
(5) Funded Indebtedness, provided that after giving effect to the
incurrence thereof the Company would be in compliance with Section 6.3(B).
(B) Limitations on Restricted Subsidiaries. The Company will not
--------------------------------------
cause, suffer or permit any Restricted Subsidiary to:
(1) Issue or sell any shares of its capital stock or securities
convertible into such capital stock except (a) issuance or sale of
directors' qualifying shares, (b) issuance or sale to the Company or to any
Wholly-Owned Restricted Subsidiary and (c) issuance or sale of additional
shares of stock of any such Subsidiary to any holders thereof entitled to
receive or purchase such additional shares through the declaration of a
stock dividend or through the exercise of preemptive rights; or
(2) Sell, assign, transfer or otherwise dispose of any shares of
capital stock of any class of any other Restricted Subsidiary, or any other
security of, or any Indebtedness owing to it by, any other Restricted
Subsidiary (except in each case to the Company or to a Wholly-Owned
Restricted Subsidiary) unless such sale, assignment, transfer or other
disposition shall meet all the conditions set forth in Section 6.20 which
would be applicable to a similar disposition made by the Company; or
(3) Consolidate with or merge into any other corporation or permit any
other corporation to merge into it, except a merger into or consolidation
with (a) the Company, (b) any Wholly-Owned Restricted Subsidiary or (c) any
other corporation if, immediately thereafter, the surviving corporation
shall be a Restricted Subsidiary and the Company shall be in full
compliance with all the terms and provisions of this Agreement; or
(4) Sell, lease, transfer or otherwise dispose of all or any
substantial part of its property and assets except (a) to the Company or
any Wholly-Owned Restricted Subsidiary or (b) in the case of a sale to any
other person, in compliance with all applicable requirements of Section
6.21 and Section 6.14; or
(5) make any Investments or commitments to make Investments except as
expressly permitted by Section 6.16.
Any corporation which becomes a Restricted Subsidiary after the Closing Date
shall for all purposes of this Section 6.12(B) be deemed to have created,
assumed or incurred, at the time it becomes a Restricted Subsidiary, all
Indebtedness of such corporation existing immediately after it becomes a
Restricted Subsidiary.
6.13 Mergers and Consolidations. The Company will not consolidate with
--------------------------
or merge into any other corporation, or permit any other corporation to merge
into the Company, unless (a) the surviving or continuing corporation shall be
the Company, and (b) no Default or Unmatured Default shall exist at the time of,
or result from, such merger or consolidation, and
-42-
(c) after giving effect to such consolidation or merger the Company would be in
compliance with Section 6.3(B).
6.14 Sale of Assets. The Company will not, nor will it permit any
--------------
Restricted Subsidiary to, lease, sell or otherwise dispose of all, or a
substantial portion of, its property, assets or business to any other Person
except for:
(a) Sales of inventory in the ordinary course of business,
(b) In addition to sales of inventory permitted by Section 6.14 (a),
the Company and the Restricted Subsidiaries may sell, lease and otherwise
dispose of property, assets and businesses including the Phthalic Anhydride
Line provided that, after giving effect to any such sale, lease or other
disposition, the aggregate fair market value of all property, assets and
businesses (other than inventory sold in the ordinary course of business
and excluding the Phthalic Anhydride Line) sold, leased or otherwise
disposed of by the Company and the Restricted Subsidiaries during any one
fiscal year of the Company shall not exceed 15% of Consolidated Tangible
Assets as of the last day of the immediately preceding fiscal year of the
Company. Notwithstanding the above-referenced annual limitation on the fair
market value of all assets sold, leased or disposed of, excluding the
Phthalic Anhydride line, the aggregate amount of all assets, sold leased or
otherwise disposed of pursuant to this Section 6.14 after December 31, 2001
shall not exceed $50,000,000 on a cumulative basis.
The Company will not, nor will it permit any Restricted Subsidiary to, sell or
otherwise dispose of any notes receivable or accounts receivable, with or
without recourse.
6.15 Sale and Leaseback. The Company will not, nor will it permit any
------------------
Restricted Subsidiary to enter into any arrangement, directly or indirectly,
with any Person whereby the Company or any Restricted Subsidiary shall sell or
transfer any manufacturing plant or equipment owned or acquired by the Company
or any Restricted Subsidiary and then or thereafter rent or lease, as lessee,
such property or any part thereof, or other property which the Company or any
Restricted Subsidiary, as the case may be, intends to use for substantially the
same purpose or purposes as the property being sold or transferred, unless (a)
the lease covering such property shall be for a term of not less than three
years and (b) the Company could then incur Funded Indebtedness pursuant to
Section 6.12 in an amount not less than the capitalized value of the rentals
payable by the Company or any Restricted Subsidiary, as the case may be, under
such lease determined in accordance with Agreement Accounting Principles.
6.16 Investments. The Company will not, nor will it permit any
-----------
Restricted Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:
(a) Short-term obligations of, or fully guaranteed by, the United
States of America,
-43-
(b) Commercial paper rated A-l or better by Standard and Poor's Rating
Services, a division of The McGraw Hill Companies, Inc. or P-l or better by
Xxxxx'x Investors Service, Inc.,
(c) Demand deposit accounts maintained in the ordinary course of
business,
(d) Certificates of deposit issued by and time deposits with
commercial banks (whether domestic or foreign) having capital and surplus
in excess of $50,000,000,
(e) Loans to officers and employees made in connection with their
relocation and purchase of housing,
(f) Loans to officers and employees in addition to those permitted by
Section 6.16(e) provided that the aggregate amount of such additional loans
shall not exceed $1,000,000 in the aggregate for the Company and the
Restricted Subsidiaries at any one time outstanding,
(g) Investments made by a Restricted Subsidiary in the Company or
another Restricted Subsidiary, and
(h) Investments of cash made by the Company or a Restricted Subsidiary
in Persons other than the Company or a Restricted Subsidiary, provided,
--------
however, that notwithstanding any of the foregoing, the Company will not,
-------
nor will it permit any Restricted Subsidiary to make any Investment, or any
commitment to any Investment, if immediately after giving effect to any
such proposed Investment, whether made before or after the Closing Date,
the aggregate amount of all of the Investments (other than such Investments
existing as of December 31, 2001 as set forth on Schedule 3 attached
hereto) (all such Investments to be taken at the cost thereof at the time
of making such Investment without allowance for any subsequent write-offs
or appreciation or depreciation thereof, but less any amount repaid or
recovered on account of capital or principal), shall exceed 30% of the
Consolidated Tangible Net Worth plus long-term deferred tax liabilities of
the Company and its Restricted Subsidiaries.
6.17 Guaranties. The Company will not, nor will it permit any
----------
Restricted Subsidiary to, Guarantee any dividend, or Guarantee any obligation or
Indebtedness, enter into or remain liable upon any Contingent Obligation of any
other Person other than (i) an obligation or Indebtedness of a Restricted
Subsidiary which such Subsidiary shall be authorized to incur pursuant to the
provisions of this Agreement exclusive of Indebtedness permitted by clause (iii)
of this Section 6.17 and obligations or Indebtedness secured by mortgages or
Liens permitted under clauses (2), (3) and (4) of Section 6.18, (ii) Guaranties
incurred in the ordinary course of business of the Company or of a Restricted
Subsidiary and (iii) Indebtedness guaranteed by the Company to the extent
permitted by Section 6.12(A)(5).
6.18 Liens. The Company will not, and will not permit any Restricted
-----
Subsidiary to, create or incur or suffer to be created or incurred or to exist
any mortgage, Lien, security interest, charge or encumbrance of any kind on, or
pledge of, any property or assets of any kind, real or personal, tangible or
intangible, of the Company or any such Restricted Subsidiary, whether owned
before or after the Closing Date, or acquire or agree to acquire any
-44-
property or assets of any kind under a conditional sale agreement or other title
retention agreement or file or permit the filing of any financing statement
under the Uniform Commercial Code or other similar notice under any other
similar statute without equally and ratably securing this Agreement; provided,
however, that the provisions of this Section 6.18 shall not prevent or restrict
the creation, incurring or existence of any of the following:
(1) Any mortgage, lien, security interest, charge or encumbrance on,
or pledge of, any property or assets of any Restricted Subsidiary to secure
Indebtedness owing by it to the Company or a Wholly-Owned Restricted
Subsidiary;
(2) Purchase money mortgages or other liens on real property
(including leaseholds) and fixtures thereon, acquired by the Company or any
Restricted Subsidiary, to secure the purchase price of such property (or to
secure Indebtedness incurred solely for the purpose of financing the
acquisition of any such property to be subject to such mortgage or other
lien), or mortgages or other liens existing on any such property at the
time of acquisition of such property by the Company or by Restricted
Subsidiary, whether or not assumed, or any mortgage or Lien on real
property of Restricted Subsidiary, provided that at the time of the
acquisition of the property by the Company or a Restricted Subsidiary, or
at the time of the acquisition of the Restricted Subsidiary by the Company,
as the case may be, (a) the principal amount of the Indebtedness secured by
each such mortgage or Lien, plus the principal amount of all other
indebtedness secured by mortgages or Liens on the same property, shall not
exceed 75% of the fair value thereof (without deduction of the Indebtedness
secured by mortgages or Liens on such property) at the time of the
acquisition thereof by the Company or Restricted Subsidiary, whichever is
the lesser, (b) every mortgage or Lien shall apply only to the property
originally subject thereto and fixed improvements constructed thereon.
(3) Refundings or extensions of the mortgages or Liens permitted in
the foregoing subsection 6.18(2) for amounts not exceeding the principal
amounts of the indebtedness so refunded or extended at the time of the
refunding or extension thereof, and applying only to the same property
theretofore subject to the same and fixed improvements constructed thereon;
(4) the owning or acquiring or agreeing to acquire machinery or
equipment useful for the business of the Company or any Restricted
Subsidiary subject to or upon chattel mortgages or conditional sale
agreements or other title retention agreements;
(5) Deposits, liens or pledges to enable the Company or any Restricted
Subsidiary to exercise any privilege or license, or to secure payments of
workmen's compensation, unemployment insurance, old age pensions or other
social security, or to secure the performance of bids, tenders, contracts
(other than for the payment of money) or leases to which the Company or any
Restricted Subsidiary is a party, or to secure public or statutory
obligations of the Company or any Restricted Subsidiary, or to secure
surety, stay or appeal bonds to which the Company or any Restricted
Subsidiary is a party, but, as to all of the foregoing, only if the same
shall arise and continue in the ordinary course of business; or other
similar deposits or pledges made and continued in the ordinary course of
business;
-45-
(6) Mechanic's, workmen's, repairmen's or carriers' Liens, but only if
arising, and only so long as continuing, in the ordinary course of
business; or other similar Liens arising and continuing in the ordinary
course of business; or deposits or pledges in the ordinary course of
business to obtain the release of any such Liens;
(7) Liens arising out of judgments or awards against the Company or
any Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary shall in good faith be prosecuting an appeal or
proceedings for review; or liens incurred by the Company or any such
Restricted Subsidiary for the purpose of obtaining a stay or discharge in
the course of any legal proceeding to which the Company or such Restricted
Subsidiary is a party;
(8) Liens for taxes not yet subject to penalties for non-payment or
contested in good faith where adequate reserves have been set aside, or
minor survey exceptions, or minor encumbrances, easements or reservations
of, or rights of others for, rights of way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or
other restrictions as to the use of real properties, which encumbrances,
easements, reservations, rights and restrictions do not in the aggregate
materially detract from the value of said properties or materially impair
their use in the operation of the business of the Company or of such
Restricted Subsidiary owning the same;
(9) Liens in favor of the United States of America or any department
or agency thereof or in favor of a prime contractor under a United States
Government contract, and resulting from the acceptance of progress or
partial payments under United States Government contracts or subcontracts
thereunder;
(10) Inchoate liens arising under the ERISA to secure contingent
liabilities; and
(11) Any arrangement permitted by Section 6.15 of Article VI.
provided, however, that (i) the aggregate amount of all liens permitted by
Section 6.18(2) and Sections 6.18(3) and 6.18(4) shall not exceed an amount
equal to 15% of Consolidated Tangible Net Worth plus long-term deferred tax
liabilities and (ii) the aggregate unpaid principal amount of all Indebtedness
of the Company or any Restricted Subsidiary secured pursuant to the provisions
of Section 6.18(2), 6.18(3) and 6.18(4) shall not at any time exceed 30% of
Consolidated Tangible Net Worth plus long-term deferred tax liabilities.
6.19 Purchase of Stocks. The Company will not, nor will it permit any
------------------
Restricted Subsidiary to extend credit to others for the purpose of purchasing
or carrying any "margin stock" (as defined in Regulation U) or use any of the
proceeds of the loans made under this Agreement (a) to purchase or carry any
"margin stock" if, after giving effect to such purchase, more that 25% of the
book value of the consolidated assets of the Company and the Restricted
Subsidiaries subject to Section 6.14 or Section 6.18 consist of "margin stock"
or (b) to acquire any security in any transaction which is subject to Sections
13 and 14 of the Securities Exchange Act of 1934.
6.20 Limitations on Dispositions of Stock or Indebtedness of
-------------------------------------------------------
Restricted Subsidiaries. The Company will not sell, assign, transfer or
-----------------------
otherwise dispose of (except to a
-46-
wholly-owned Restricted Subsidiary) any shares of capital stock of any class of
any Restricted Subsidiary, or any other security of, or any Indebtedness owing
to it by, any such Restricted Subsidiary, unless (i) all of the capital stock
and other securities and the entire Indebtedness of such Restricted Subsidiary
at the time owned by the Company and by all its other Restricted Subsidiaries
shall be sold, assigned, transferred or otherwise disposed of, at the same time,
for cash, (ii) such Restricted Subsidiary shall not, at the time of such sale,
assignment, transfer or other disposition, own either (a) any shares of capital
stock of any class or any other security or any Indebtedness of any other
Restricted Subsidiary of the Company which is not being simultaneously disposed
of as permitted by this Section 6.20 or (b) any Indebtedness of the Company, and
(iii) such sales, assignment or transfer is permitted by Section 6.13 or Section
6.14 hereof.
6.21 Affiliates. The Company will not, and will not permit any
----------
Restricted Subsidiary to, enter into any transaction (including, without
limitation, the purchase or sale of any Property or service) with, or make any
payment or transfer to, any Affiliate except in the ordinary course of business
and pursuant to the reasonable requirements of the Company's or such Restricted
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Company or such Restricted Subsidiary than the Company or such Restricted
Subsidiary would obtain in a comparable arms-length transaction.
6.22 Addition of Guarantors. As promptly as possible but in any event
----------------------
within thirty (30) days after any Domestic Subsidiary (other than any SPV)
becomes a Restricted Subsidiary of the Company, the Company shall cause each
such Restricted Subsidiary to deliver to the Agent a duly executed Guaranty
pursuant to which such Restricted Subsidiary agrees to be bound by the terms and
provisions of the Guaranty.
ARTICLE VII: DEFAULTS
The occurrence of any one or more of the following events shall constitute
a Default:
7.1 Breach of Representations and Warranties. Any representation or
----------------------------------------
warranty made or deemed made by or on behalf of the Company or any Restricted
Subsidiary to the Banks or the Agent under or in connection with this Agreement,
any Credit Extension, or any certificate or information delivered in connection
with this Agreement or any other Loan Document shall be materially false as of
the date on which made or deemed made.
7.2 Payment Default. Nonpayment of principal of any Loan when due,
---------------
nonpayment of any Reimbursement Obligation within one Business Day after the
same becomes due, or nonpayment of interest upon any Loan or of any commitment
fee, LC Fee or other obligations under any of the Loan Documents within five
days after the same becomes due.
7.3 Breach of Certain Covenants. The breach by the Company of any of
---------------------------
the terms or provisions of Article VI.
7.4 Breach of Other Provisions. The breach by the Company (other than
--------------------------
a breach which constitutes a Default under Section 7.1, 7.2 or 7.3) of any of
the terms or provisions of this Agreement which is not remedied within five days
after written notice from the Agent or any Bank.
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7.5 Default on Material Indebtedness. Failure of the Company or any
--------------------------------
Restricted Subsidiary to pay any Indebtedness in a principal amount greater than
$2,500,000 when due; or the default by the Company or any Restricted Subsidiary
in the performance of any term, provision or condition contained in any
agreement under which any Indebtedness was created or is governed, the effect of
which is to cause, or to permit the holder or holders of such Indebtedness to
cause, such Indebtedness to become due prior to its stated maturity; or any
Indebtedness shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled payment) prior to the stated maturity
thereof.
7.6 Voluntary Insolvency Proceedings. The Company or any Restricted
--------------------------------
Subsidiary shall (a) have an order for relief entered with respect to it under
the Federal Bankruptcy Code, (b) not pay, or admit in writing its inability to
pay, its debts generally as they become due, (c) make an assignment for the
benefit of creditors, (d) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or similar
official for it or any substantial part of its property, (e) institute any
proceeding seeking an order for relief under the Federal Bankruptcy Code or
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (f)
take any corporate action to authorize or effect any of the foregoing actions
set forth in this Section 7.6 or (g) fail to contest in good faith any
appointment or proceeding described in Section 7.7.
7.7 Involuntary Insolvency Proceedings. Without the application,
----------------------------------
approval or consent of the Company or any Restricted Subsidiary, a receiver,
trustee, examiner, liquidator or similar official shall be appointed for the
Company or any Restricted Subsidiary or any substantial part of its property, or
a proceeding described in Section 7.6(e) shall be instituted against the Company
or any Restricted Subsidiary and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of 30 consecutive
days.
7.8 Condemnation. Any court, government or governmental agency shall
------------
condemn, seize or otherwise appropriate, or take custody or control of all or
any substantial portion of the property of the Company or any Restricted
Subsidiary.
7.9 Judgments. The Company or any Subsidiary shall fail within 60 days
---------
to pay, bond or otherwise discharge any judgment or order for the payment of
money in excess of $1,000,000, which is not stayed on appeal or otherwise being
appropriately contested in good faith.
7.10 ERISA Matters. The Unfunded Liabilities of all Plans shall exceed
-------------
in the aggregate $5,000,000 or any Reportable Event shall occur in connection
with any Plan.
7.11 Change of Control. Any Person or Persons other than Stepan Family
-----------------
acting in concert shall acquire beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of thirty percent (30%) or more of the outstanding shares of voting
stock of the Company; or during any period of twelve (12) consecutive months,
commencing before or after the Closing Date,
-48-
individuals who at the beginning of such twelve-month period were directors of
the Company cease for any reason to constitute a majority of the board of
directors of the Company.
7.12 Off-Balance Sheet Liabilities. Other than at the request of an
-----------------------------
Affiliate of the Company party thereto (as permitted thereunder), an event shall
occur which (i) permits the investors in respect of Off-Balance Sheet
Liabilities of the Company or any of its Subsidiaries in an amount, individually
or in the aggregate, in excess of $2,500,000, to require amortization or
liquidation of such Off-Balance Sheet Liabilities and (x) such event is not
remedied within ten (10) days after the occurrence thereof or (y) such investors
shall require amortization or liquidation of such Off-Balance Sheet Liabilities
as a result of such event, or (ii) results in the termination or reinvestment of
collections or proceeds of accounts or note receivables, as applicable, under
the documents and other agreements evidencing such Off-Balance Sheet
Liabilities.
7.13 Guarantor Revocation. Any guarantor of the Obligations shall
--------------------
deny, disaffirm, terminate or revoke any of its obligations under the applicable
Guaranty (except in accordance with Section 10.15 hereof) or breach any of the
material terms of such Guaranty.
ARTICLE VIII: ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1 Acceleration; Facility LC Collateral Account.
--------------------------------------------
(i) If any Default described in Section 7.6 or 7.7 occurs, the
obligations of the Banks to make Loans hereunder and the obligation and
power of the LC Issuer to issue Facility LCs shall automatically terminate
and the Obligations shall immediately become due and payable without any
election or action on the part of the Agent, the LC Issuer or any Bank and
the Company will be and become thereby unconditionally obligated, without
any further notice, act or demand, to pay to the Agent an amount in
immediately available funds, which funds shall be held in the Facility LC
Collateral Account, equal to the difference of (x) the amount of LC
Obligations at such time, less (y) the amount on deposit in the Facility LC
Collateral Account at such time which is free and clear of all rights and
claims of third parties and has not been applied against the Obligations
(such difference, the "Collateral Shortfall Amount"). If any other Default
occurs, the Required Banks may (a) terminate or suspend the obligations of
the Banks to make Loans hereunder and the obligation and power of the LC
Issuer to issue Facility LCs, or declare the Obligations to be due and
payable, or both, whereupon the Obligations shall become immediately due
and payable, without presentment, demand, protest or notice of any kind,
all of which the Company hereby expressly waives, and (b) upon notice to
the Company and in addition to the continuing right to demand payment of
all amounts payable under this Agreement, make demand on the Company to
pay, and the Company will, forthwith upon such demand and without any
further notice or act, pay to the Agent the Collateral Shortfall Amount,
which funds shall be deposited in the Facility LC Collateral Account.
(ii) If at any time while any Default is continuing, the Agent
determines that the Collateral Shortfall Amount at such time is greater
than zero, the Agent may make
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demand on the Company to pay, and the Company will, forthwith upon such
demand and without any further notice or act, pay to the Agent the
Collateral Shortfall Amount, which funds shall be deposited in the Facility
LC Collateral Account.
(iii) The Agent may at any time or from time to time after funds are
deposited in the Facility LC Collateral Account, apply such funds to the
payment of the Obligations and any other amounts as shall from time to time
have become due and payable by the Company to the Banks or the LC Issuer
under the Loan Documents.
(iv) At any time while any Default is continuing, neither the Company
nor any Person claiming on behalf of or through the Company shall have any
right to withdraw any of the funds held in the Facility LC Collateral
Account. After all of the Obligations have been indefeasibly paid in full
and the Aggregate Commitment has been terminated, any funds remaining in
the Facility LC Collateral Account shall be returned by the Agent to the
Company or paid to whomever may be legally entitled thereto at such time.
(v) If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Banks to make Loans
and the obligation and power of the LC Issuer to issue Facility LCs
hereunder as a result of any Default (other than any Default as described
in Section 7.6 or 7.7 with respect to the Company) and any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Banks (in their sole discretion) shall so direct, the
Agent shall, by notice to the Company, rescind and annul such acceleration
and/or termination.
8.2 Amendments. Subject to the provisions of this Article VIII, the
----------
Required Banks (or the Agent with the consent in writing of the Required Banks)
and the Company may enter into agreements supplemental hereto for the purpose of
adding or modifying any provisions to the Loan Documents or changing in any
manner the rights of the Banks or the Company hereunder or waiving any Default
hereunder; provided, however, that no such supplemental agreement shall, without
the consent of all of the Banks:
(i) Extend the final maturity of any Loan, or extend the expiry date
of any Facility LC to a date after the Facility Termination Date or forgive
all or any portion of the principal amount thereof or any Reimbursement
Obligation related thereto, or reduce the rate or extend the time of
payment of interest or fees thereon.
(ii) Reduce the percentage specified in the definition of Required
Banks.
(iii) Extend or reduce the amount or extend the payment date for, the
mandatory payments required under Section 2.4, or increase the amount of
the Commitment of any Bank hereunder or the commitment to issue Facility
LCs, or permit the Company to assign its rights under this Agreement.
(iv) Other than pursuant to a transaction permitted by the terms of
this Agreement, release any guarantor of the Obligations or any substantial
portion of the collateral, if any, securing the Obligations.
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(v) Amend this Section 8.2.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent, and no amendment of any
provision relating to the LC Issuer shall be effective without the written
consent of the LC Issuer. No amendment of any provision of this Agreement
relating to the Swing Line Lender or any Swing Line Loans shall be effective
without the written consent of the Swing Line Lender.
8.3 Preservation of Rights. No delay or omission of the Banks, the LC
----------------------
Issuer or the Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Credit Extension notwithstanding the existence of a
Default or the inability of the Company to satisfy the conditions precedent to
such Credit Extension shall not constitute any waiver or acquiescence. Any
single or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Banks required
pursuant to Section 8.2, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Agent, the LC
Issuer and the Banks until the Obligations have been paid in full.
ARTICLE IX: GENERAL PROVISIONS
9.1 Survival of Representations. All representations and warranties of
---------------------------
the Company contained in this Agreement shall survive delivery of the Notes and
the making of the Credit Extensions herein contemplated.
9.2 Governmental Regulation. Anything contained in this Agreement to
-----------------------
the contrary notwithstanding, neither the LC Issuer nor any Bank shall be
obligated to extend credit to the Company in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.3 Taxes. Any taxes (excluding income taxes) payable or ruled payable
-----
by Federal or State authority in respect of the Loan Documents shall be paid by
the Company, together with interest and penalties, if any.
9.4 Headings. Section headings in the Loan Documents are for
--------
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.5 Entire Agreement. The Loan Documents embody the entire agreement
----------------
and understanding among the Company, the Agent, the LC Issuer and the Banks and
supersede all prior agreements and understandings among the Company, the Agent,
the LC Issuer and the Banks relating to the subject matter thereof other than
the fee letter described in Section 10.13.
9.6 Several Obligations. The respective obligations of the Banks
-------------------
hereunder are several and not joint and no Bank shall be the partner or agent of
any other (except to the extent to which the Agent is authorized to act as
such). The failure of any Bank to perform any
-51-
of its obligations hereunder shall not relieve any other Bank from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall enjoy the benefits of the
provisions of Section 9.7, 9.11 and 10.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on its own behalf
and in its own name to the same extent as if it were a party to this Agreement.
9.7 Expenses; Indemnification. The Company shall reimburse the Agent,
-------------------------
the Arranger, the LC Issuer and the Banks for any costs, internal charges and
out-of-pocket expenses (including attorneys' fees and time charges of attorneys
for the Agent, the Arranger, the LC Issuer and the Banks, which attorneys may be
employees of the Agent, the Arranger, the LC Issuer or the Banks) paid or
incurred by the Agent, the Arranger, the LC Issuer or any Bank in connection
with the preparation, review, execution, delivery, amendment, modification,
administration, collection and enforcement of the Loan Documents. The Company
further agrees to indemnify the Agent, the Arranger, the LC Issuer and each
Bank, its directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not the Agent, the
Arranger, the LC Issuer or any Bank is a party thereto) which any of them may
pay or incur arising out of or relating to this Agreement, the other Loan
Documents, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any Credit Extension
hereunder. The obligations of the Company under this Section shall survive the
termination of this Agreement.
9.8 Numbers of Documents. All statements, notices, closing documents,
--------------------
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Banks.
9.9 Accounting. Except as provided to the contrary herein, all
----------
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
9.10 Severability of Provisions. Any provision in any Loan Document
--------------------------
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.11 Nonliability of Banks. The relationship between the Company on
---------------------
the one hand and the Banks, the LC Issuer and the Agent on the other hand shall
be solely that of borrower and lender. Neither the Agent, the Arranger, the LC
Issuer nor any Bank shall have any fiduciary responsibilities to the Company.
Neither the Agent, the Arranger, the LC Issuer nor any Bank undertakes any
responsibility to the Company to review or inform the Company of any matter in
connection with any phase of the Company's business or operations. The Company
agrees that neither the Agent, the Arranger, the LC Issuer nor any Bank shall
have liability to the Company (whether sounding in tort, contract or otherwise)
for losses suffered by the Company in connection with, arising out of, or in any
way related to, the transactions
-52-
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is determined in
a final non-appealable judgment by a court of competent jurisdiction that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. Neither the Agent, the Arranger, the LC Issuer
nor any Bank shall have any liability with respect to, and the Company hereby
waives, releases and agrees not to xxx for, any special, indirect or
consequential damages suffered by the Company in connection with, arising out
of, or in any way related to the Loan Documents or the transactions contemplated
thereby.
9.12 Confidentiality. Each Bank agrees to hold any confidential
---------------
information which it may receive from the Company pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other Banks and
their respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to such Bank or to a Transferee, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as required by law,
regulation, or legal process, (v) to any Person in connection with any legal
proceeding to which such Bank is a party, (vi) to such Bank's direct or indirect
contractual counterparties in swap agreements or to legal counsel, accountants
and other professional advisors to such counterparties, (vii) permitted by
Section 13.4 and (viii) to rating agencies if requested or required by such
agencies in connection with a rating relating to the Credit Extensions
hereunder.
9.13 Nonreliance. Each Bank hereby represents that it is not relying
-----------
on or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Credit
Extensions provided for herein.
9.14 Disclosure. The Company and each Bank hereby acknowledge and
----------
agree that Bank One and/or its Affiliates from time to time may hold investments
in, make other loans to or have other relationships with the Company and its
Affiliates.
ARTICLE X: THE AGENT
10.1 Appointment; Nature of Relationship. The Bank One, NA is hereby
-----------------------------------
appointed by each of the Banks as its contractual representative (herein
referred to as the "Agent") hereunder and under each other Loan Document, and
each of the Banks irrevocably authorizes the Agent to act as the contractual
representative of such Bank with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Bank by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Banks with only those duties as are expressly set forth in this Agreement
and the other Loan Documents. In its capacity as the Banks' contractual
representative, the Agent (i) does not hereby assume any fiduciary duties to any
of the Banks, (ii) is a "representative" of the Banks within the meaning of the
term "secured party" as defined in the Illinois Uniform Commercial Code and
(iii) is acting as an independent contractor, the rights and duties of which are
limited to those expressly set forth in this Agreement and the other Loan
Documents. Each of the Banks hereby agrees to assert no claim against the Agent
on any agency theory or any other theory of liability for breach of fiduciary
duty, all of which claims each Bank hereby waives.
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10.2 Powers. The Agent shall have and may exercise such powers under
------
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Banks, or any obligation to the
Banks to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3 General Immunity. Neither the Agent nor any of its directors,
----------------
officers, agents or employees shall be liable to the Company, the Banks or any
Bank for any action taken or omitted to be taken by it or them hereunder or
under any other Loan Document or in connection herewith or therewith except to
the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4 No Responsibility for Loans, Recitals, etc. Neither the Agent nor
-------------------------------------------
any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into, or verify (a) any statement, warranty
or representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Bank; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; or (f) the
financial condition of the Company or of any of the Company's Subsidiaries. The
Agent shall have no duty to disclose to the Banks information that is not
required to be furnished by the Company to the Agent at such time, but is
voluntarily furnished by the Company to the Agent (either in its capacity as
Agent or in its individual capacity).
10.5 Action on Instructions of Banks. The Agent shall in all cases be
-------------------------------
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Banks, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Banks. The Banks hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Banks. The Agent shall be fully justified in failing or refusing to
take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Banks pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6 Employment of Agents and Counsel. The Agent may execute any of
--------------------------------
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Banks, except as to money or securities received by it or its authorized agents,
for the default or misconduct of any such agents or attorneys-in-fact selected
by it with reasonable care. The Agent shall be entitled to advice of counsel
concerning the contractual arrangement between the Agent and the Banks and all
matters pertaining to the Agent's duties hereunder and under any other Loan
Document.
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10.7 Reliance on Documents; Counsel. The Agent shall be entitled to
------------------------------
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8 Agent's Reimbursement and Indemnification. The Banks agree to
-----------------------------------------
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Company for which the Agent is entitled to reimbursement by
the Company under the Loan Documents, (ii) for any other reasonable expenses
incurred by the Agent on behalf of the Banks, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents and (iii) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of the Loan Documents or
any other document delivered in connection therewith or the transactions
contemplated thereby or the enforcement of any of the terms of the Loan
Documents or of any such other documents, provided that no Bank shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the Agent. The obligations of the Banks under this Section
10.8 shall survive payment of the Obligations and termination of this Agreement.
10.9 Notice of Default. The Agent shall not be deemed to have
------------------
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Bank or the
Company referring to this Agreement describing such Default or Unmatured Default
and stating that such notice is a "notice of default". In the event that the
Agent receives such a notice, the Agent shall give prompt notice thereof to the
Banks.
10.10 Rights as a Bank. In the event the Agent is a Bank, the Agent
----------------
shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Credit Extensions as any Bank
and may exercise the same as though it were not the Agent, and the term "Bank"
or "Banks" shall, at any time when the Agent is a Bank, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Company or
any of its Subsidiaries in which the Company or such Subsidiary is not
restricted hereby from engaging with any other Person.
10.11 Bank Credit Decision. Each Bank acknowledges that it has,
--------------------
independently and without reliance upon the Agent, the Arranger or any other
Bank and based on the financial statements prepared by the Company and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Bank also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
-55-
10.12 Successor Agent. The Agent may resign at any time by giving
---------------
written notice thereof to the Banks and the Company, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Banks, such removal to
be effective on the date specified by the Required Banks. Upon any such
resignation or removal, the Required Banks shall have the right to appoint, on
behalf of the Company and the Banks, a successor Agent. If no successor Agent
shall have been so appointed by the Required Banks within thirty days after the
resigning Agent's giving notice of its intention to resign, then the resigning
Agent may appoint, on behalf of the Company and the Banks, a successor Agent.
Notwithstanding the previous sentence, the Agent may at any time without the
consent of the Company or any Bank, appoint any of its Affiliates which is a
commercial bank as a successor Agent hereunder. If the Agent has resigned or
been removed and no successor Agent has been appointed, the Banks may perform
all the duties of the Agent hereunder and the Company shall make all payments in
respect of the Obligations to the applicable Bank and for all other purposes
shall deal directly with the Banks. No successor Agent shall be deemed to be
appointed hereunder until such successor Agent has accepted the appointment. Any
such successor Agent shall be a commercial bank having capital and retained
earnings of at least $100,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Agent. Upon the effectiveness of the resignation or
removal of the Agent, the resigning or removed Agent shall be discharged from
its duties and obligations hereunder and under the Loan Documents. After the
effectiveness of the resignation or removal of an Agent, the provisions of this
Article X shall continue in effect for the benefit of such Agent in respect of
any actions taken or omitted to be taken by it while it was acting as the Agent
hereunder and under the other Loan Documents. In the event that there is a
successor to the Agent by merger, or the Agent assigns its duties and
obligations to an Affiliate pursuant to this Section 10.12, then the term "Prime
Rate" as used in this Agreement shall mean the prime rate, base rate or other
analogous rate of the new Agent.
10.13 Agent's Fee. The Company agrees to pay to the Agent, for its own
-----------
account, the fees agreed to by the Company and the Agent pursuant to that
certain letter agreement dated April 4, 2002, or as otherwise agreed from time
to time.
10.14 Delegation to Affiliates. The Company and the Banks agree that
------------------------
the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.15 Release of Guarantors. Upon the liquidation or dissolution of
---------------------
any Guarantor, or the sale of all of the capital stock of any Guarantor owned by
the Company and its Subsidiaries, in each case which does not violate the terms
of any Loan Document or is otherwise consented to in writing by the Required
Banks or all of the Banks, as applicable, such Guarantor shall be automatically
released from all obligations under the Guaranty and any other Loan Documents to
which it is a party (other than contingent indemnity obligations), and upon at
least five (5) Business Days' prior written request by the Company, the Agent
shall (and is
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hereby irrevocably authorized by the Banks to) execute such documents as may be
necessary to evidence the release of the applicable Guarantor from its
obligations under the Guaranty and such other Loan Documents; provided, however,
that (i) the Agent shall not be required to execute any such document on terms
which, in the Agent's reasonable opinion, would expose the Agent to liability or
create any obligation or entail any consequence other than the release of such
Guarantor without recourse or warranty, and (ii) such release shall not in any
manner discharge, affect or impair the Obligations of the Company, any other
Guarantor's obligations under the Guaranty, or, if applicable, any obligations
of the Company or any Subsidiary in respect of the proceeds of any such sale
retained by the Company or any Subsidiary.
ARTICLE XI: SETOFF; RATABLE PAYMENTS
11.1 Setoff. In addition to, and without limitation of, any rights of
------
the Banks under applicable law, if the Company becomes insolvent, however
evidenced, or any Default or Unmatured Default occurs, any indebtedness from any
Bank to the Company (including all account balances, whether provisional or
final and whether or not collected or available) may be offset and applied
toward the payment of the Obligations owing to such Bank, whether or not the
Obligations, or any part hereof, shall then be due. The Company agrees that any
holder of a participation in a loan may, to the fullest extent permitted by law,
exercise all its rights of payment with respect to such participation as if such
holder were the direct creditor of the Company in the amount of the
participation.
11.2 Ratable Payments.
----------------
(A) At any time when no Default shall be continuing, if any Bank,
whether by setoff or otherwise, has payment made to it upon its Outstanding
Credit Exposure (other than payments received pursuant to Sections 3.1,
3.2, 3.3 or 3.4 or payments of principal or interest on Competitive Bid
Loans when due) in a greater proportion than that received by any other
Bank, such Bank agrees, promptly upon demand, to purchase a portion of the
Aggregate Outstanding Credit Exposure (calculated exclusive of all
outstanding Competitive Bid Loans) held by the other Banks so that after
such purchase each Bank will hold its Pro Rata Share of the Aggregate
Outstanding Credit Exposure (calculated exclusive of all outstanding
Competitive Bid Loans).
(B) At any time a Default shall be continuing, if any Bank, whether by
setoff or otherwise, has payment made to it upon its Outstanding Credit
Exposure (other than payments received pursuant to Sections 3.1, 3.2, 3.3
or 3.4) in a greater proportion than that received by any other Bank, such
Bank agrees, promptly upon demand, to purchase a portion of the Aggregate
Outstanding Credit Exposure held by the other Banks so that after such
purchase each Bank will hold its Pro Rata Share of the Aggregate
Outstanding Credit Exposure.
(C) If any Bank, whether in connection with setoff or amounts which
might be subject to setoff or otherwise, receives collateral or other
protection for its Obligations or such amounts which may be subject to set
off, such Bank agrees, promptly upon demand, to take such action necessary
such that all Banks share in the benefits of such collateral ratably in
proportion to their respective Pro Rata Shares of the Aggregate Outstanding
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Credit Exposure. In case any such payment described in this Section 11.2 is
disturbed by legal process, or otherwise, appropriate further adjustments
shall be made.
ARTICLE XII: NOTICES
12.1 Notices. Except as otherwise permitted by Section 2.13 with
-------
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Company or the Agent, at its address or facsimile number set
forth on the signature pages hereof, (y) in the case of any Bank, at its address
or facsimile number set forth below its signature hereto or (z) in the case of
any party, at such other address or facsimile number as such party may hereafter
specify for the purpose by notice to the Agent and the Company in accordance
with the provisions of this Section 12.1. Each such notice, request or other
communication shall be effective (i) if given by facsimile transmission, when
transmitted to the facsimile number specified in this Section and confirmation
of receipt is received, (ii) if given by mail, 72 hours after such communication
is deposited in the mails with first class postage prepaid, addressed as
aforesaid, or (iii) if given by any other means, when delivered (or, in the case
of electronic transmission, received) at the address specified in this Section;
provided that notices to the Agent under Article II shall not be effective until
received.
12.2 Change of Address. The Company, the Agent and any Bank may each
-----------------
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 Successors and Assigns. The terms and provisions of the Loan
----------------------
Documents shall be binding upon and inure to the benefit of the Company and the
Banks and their respective successors and assigns, except that (i) the Company
shall not have the right to assign its rights or obligations under the Loan
Documents and (ii) any assignment by any Bank must be made in compliance with
Section 13.3.1. The parties to this Agreement acknowledge that clause (ii) of
this Section 13.1 relates only to absolute assignments and this Section 13.1
does not prohibit assignments creating security interests, including, without
limitation, (x) any pledge or assignment by any Bank of all or any portion of
its rights under this Agreement and any Note to a Federal Reserve Bank or (y) in
the case of a Bank which is a Fund, any pledge or assignment of all or any
portion of its rights under this Agreement and any Note to its trustee in
support of its obligations to its trustee; provided, however, that no such
pledge or assignment creating a security interest shall release the transferor
Bank from its obligations hereunder unless and until the parties thereto have
complied with the provisions of Section 13.3. The Agent may treat the Person
which made any Credit Extension or which holds any Note as the owner thereof for
all purposes hereof unless and until such Person complies with Section 13.3.1.
in the case of an assignment thereof or, in the case of any other transfer, a
written notice of the transfer is filed with the Agent. Any assignee or
transferee of the rights to any Outstanding Credit Exposure or any Note agrees
by acceptance of such transfer or assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Outstanding Credit Exposure (whether
or not a Note has been issued in evidence thereof), shall
-58-
be conclusive and binding on any subsequent holder, transferee or assignee of
the rights to such Outstanding Credit Exposure.
13.2 Participations.
--------------
13.2.1. Permitted Participants; Effect. Any Bank may, in the ordinary
------------------------------
course of its business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("Participants") participating
interests in any Outstanding Credit Exposure owing to such Bank, any Note
held by such Bank, any Commitment of such Bank or any other interest of
such Bank under the Loan Documents. In the event of any such sale by a Bank
of participating interests to a Participant, such Bank's obligations under
the Loan Documents shall remain unchanged, such Bank shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Bank shall remain the owner of its Outstanding Credit
Exposure and the holder of any Note issued to it in evidence thereof for
all purposes under the Loan Documents, all amounts payable by the Company
under this Agreement shall be determined as if such Bank had not sold such
participating interests, and the Company and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's
rights and obligations under the Loan Documents.
13.2.2. Voting Rights. Each Bank shall retain the sole right to
-------------
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Credit Extension
or Commitment in which such Participant has an interest which forgives
principal, interest or fees or reduces the interest rate or fees payable
with respect to any such Credit Extension or Commitment, extends the
Facility Termination Date, postpones any date fixed for any
regularly-scheduled payment of principal of, or interest or fees on, any
such Credit Extension or Commitment, releases any guarantor of any such
Credit Extension or releases all or substantially all of the collateral, if
any, securing any such Credit Extension.
13.2.3. Benefit of Setoff. The Company agrees that each Participant
-----------------
shall be deemed to have the right of setoff provided in Section 11.1 in
respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest
were owing directly to it as a Bank under the Loan Documents, provided that
each Bank shall retain the right of setoff provided in Section 11.1 with
respect to the amount of participating interests sold to each Participant.
The Banks agree to share with each Participant, and each Participant, by
exercising the right of setoff provided in Section 11.1, agrees to share
with each Bank, any amount received pursuant to the exercise of its right
of setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Bank.
13.3 Assignments.
-----------
13.3.1. Permitted Assignments. Any Bank may, in the ordinary course of
---------------------
its business and in accordance with applicable law, at any time assign to
one or more banks or other entities ("Purchasers") all or any part of its
rights and obligations under the Loan
-59-
Documents pursuant to an Assignment Agreement substantially in the form of
Exhibit D or in such other form as may be agreed to by the parties thereto (an
"Assignment Agreement"). The consent of the Company and the Agent shall be
required prior to an Assignment Agreement becoming effective with respect to a
Purchaser which is not a Bank or an Affiliate thereof or an Approved Fund;
provided, however, that if a Default has occurred and is continuing, the consent
of the Company shall not be required. Such consent shall not be unreasonably
withheld or delayed. Each such assignment pursuant to an Assignment Agreement
(other than an assignment to a Purchaser that is a Bank or an Affiliate of a
Bank or an Approved Fund) shall (unless each of the Company and the Agent
otherwise consents) be in an amount not less than the lesser of (i) $1,000,000
or (ii) the remaining amount of the assigning Bank's Commitment (calculated as
at the date of such assignment).
13.3.2. Effect; Effective Date. Upon (i) delivery to the Agent of an
----------------------
Assignment Agreement, together with any consents required by Section
13.3.1, and (ii) payment of a $4,000 fee to the Agent for processing such
Assignment Agreement, such Assignment Agreement shall become effective on
the effective date specified therein. The Assignment Agreement shall
contain a representation by the Purchaser to the effect that none of the
consideration used to make the purchase of the Commitment and Outstanding
Credit Exposure under the applicable Assignment Agreement are "plan assets"
as defined under ERISA and that the rights and interests of the Purchaser
in and under the Loan Documents will not be "plan assets" under ERISA. On
and after the effective date of such Assignment Agreement, such Purchaser
shall for all purposes be a Bank party to this Agreement and any other Loan
Document executed by or on behalf of the Banks and shall have all the
rights and obligations of a Bank under the Loan Documents, to the same
extent as if it were an original party hereto, and no further consent or
action by the Company, the Banks or the Agent shall be required to release
the transferor Bank with respect to the percentage of the Aggregate
Commitment and Outstanding Credit Exposure assigned to such Purchaser. In
the case of an assignment covering all of the assigning Bank's rights and
obligations under this Agreement, such Bank shall cease to be a Bank
hereunder but shall continue to be entitled to the benefits of, and subject
to, those provisions of this Agreement and the other Loan Documents which
survive payment of the Obligations and termination of the applicable
agreement. Any assignment or transfer by a Bank of rights or obligations
under this Agreement that does not comply with this Section 13.3 shall be
treated for purposes of this Agreement as a sale by such Bank of a
participation in such rights and obligations in accordance with Section
13.2. Upon the consummation of any assignment to a Purchaser pursuant to
this Section 9.1(f), the transferor Bank, the Agent and the Company shall,
if the transferor Bank or the Purchaser desires that its Outstanding Credit
Exposure be evidenced by Notes, make appropriate arrangements so that new
Notes or, as appropriate, replacement Notes are issued to such transferor
Bank and new Notes or, as appropriate, replacement Notes, are issued to
such Purchaser, in each case in principal amounts reflecting their
respective Commitments, as adjusted pursuant to such assignment.
13.3.3 Register. The Agent, acting solely for this purpose as an agent
--------
of the Company, shall maintain at one of its offices in Chicago, Illinois a
copy of each Assignment Agreement delivered to it and a register for the
recordation of the names and
-60-
addresses of the Banks, and the Commitments of, and principal amounts of
the Loans and other Credit Extensions owing to, such Bank pursuant to the
terms hereof from time to time (the "Register"). The entries in the
Register shall be conclusive, and the Company, the Agent and the Banks may
treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Bank hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Company and any Bank, at any reasonable time and from
time to time upon reasonable prior notice.
13.4 Dissemination of Information. The Company authorizes each Bank to
----------------------------
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Bank's possession
concerning the creditworthiness of the Company and its Subsidiaries, including
without limitation any information contained in any Reports.
13.5 Tax Treatment. If any interest in any Loan Document is
-------------
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Bank shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 3.4(iv).
ARTICLE XIV: COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Company, the Agent, the LC Issuer and
the Banks and each party has notified the Agent by telex or telephone, that it
has taken such action.
ARTICLE XV: CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
-------------
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET
SEQ, BUT OTHERWISE WITHOUT REGARD TO THE LAW OF CONFLICTS) OF THE STATE OF
ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2 CONSENT TO JURISDICTION. THE COMPANY HEREBY IRREVOCABLY SUBMITS
-----------------------
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE COMPANY HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF
-61-
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT, THE
LC ISSUER OR ANY BANK TO BRING PROCEEDINGS AGAINST THE COMPANY IN THE COURTS OF
ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE COMPANY AGAINST THE
AGENT, THE LC ISSUER OR ANY BANK OR ANY AFFILIATE OF THE AGENT, THE LC ISSUER OR
ANY BANK INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A
COURT IN CHICAGO, ILLINOIS.
15.3 WAIVER OF JURY TRIAL. THE COMPANY, THE AGENT, THE LC ISSUER AND
--------------------
EACH BANK HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
-62-
IN WITNESS WHEREOF, the Company, the Banks, the LC Issuer and the
Agent have executed this Agreement as of the date first above written.
STEPAN COMPANY
By:
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President and Corporate Controller
Xxxxx and Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Treasury Department
Facsimile No.: (000) 000-0000
Confirmation No: (000) 000-0000
E-Mail Address: xxxxxxxxx@xxxxxx.xxx
Signature Page to Revolving Credit Agreement
Dated May, 2002
2402589
BANK ONE, NA (MAIN OFFICE -
CHICAGO), as Agent, as LC Issuer and as a
Bank
By:
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Director, Capital Markets
Bank Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx,
Director, Capital Markets
Facsimile No.: (000) 000-0000
Confirmation No: (000) 000-0000
E-Mail Address:
xxxxx_x_xxxxxx@xxxxxxx.xxx
Signature Page to Revolving Credit Agreement
Dated May, 2002
2402589
XXXXXX TRUST AND SAVINGS BANK, as a Bank
By:
-------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx (111/10W)
Facsimile No.: (000) 000-0000
Confirmation No: (000) 000-0000
E-Mail Address: xxxx.xxxxxx@xxxxxxxxxx.xxx
Signature Page to Revolving Credit Agreement
Dated May, 2002
2402589
BANK OF AMERICA, N.A., as a Bank
By:
-------------------------------------
Name:
Title:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
Confirmation No: (000)000-0000
E-Mail Address:
xxxxx.xxxxxxx@xxxxxxxxxxxxx.xxx
Signature Page to Revolving Credit Agreement
Dated May, 2002
2402589
PRICING SCHEDULE
===========================================================================================
Applicable Margin Level I Status Level II Status Level III Status Level IV Status
-------------------------------------------------------------------------------------------
Eurodollar Rate 0.625% 0.750% 1.000% 1.375%
-------------------------------------------------------------------------------------------
Alternate Base Rate 0.000% 0.000% 0.000% 0.125%
===========================================================================================
===========================================================================================
Applicable Fee Rate Level I Status Level II Status Level III Status Level IV Status
===========================================================================================
Commitment Fee 0.125% 0.150% 0.200% 0.250%
===========================================================================================
For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:
"Financials" means the annual or quarterly financial statements of the
Company delivered pursuant to Section 6.1(a) or (b).
"Level I Status" exists at any date if, as of the last day of the fiscal
quarter of the Company referred to in the most recent Financials, the ratio of
Consolidated Funded Indebtedness to Consolidated Capitalization is less than
0.35 to 1.00.
"Level II Status" exists at any date if, as of the last day of the fiscal
quarter of the Company referred to in the most recent Financials, (i) the
Company has not qualified for Level I Status and (ii) the ratio of Consolidated
Funded Indebtedness to Consolidated Capitalization is less than or equal to 0.45
to 1.00.
"Level III Status" exists at any date if, as of the last day of the fiscal
quarter of the Company referred to in the most recent Financials, (i) the
Company has not qualified for Level I Status or Level II Status and (ii) the
ratio of Consolidated Funded Indebtedness to Consolidated Capitalization is less
than or equal to 0.50 to 1.00.
"Level IV Status" exists at any date if the Company has not qualified for
Level I Status, Level II Status or Level III Status.
"Status" means either Level I Status, Level II Status, Level III Status or
Level IV Status.
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Company's Status as reflected
in the then most recent Financials. Adjustments, if any, to the Applicable
Margin or Applicable Fee Rate shall be effective five Business Days after the
Agent has received the applicable Financials. If the
Company fails to deliver the Financials to the Agent at the time required
pursuant to Section 6.1, then the Applicable Margin and Applicable Fee Rate
shall be the highest Applicable Margin and Applicable Fee Rate set forth in the
foregoing table until five days after such Financials are so delivered.
2
COMMITMENT SCHEDULE
BANK COMMITMENT
-------------------------------------------------------
Bank One, NA $25,000,000
Xxxxxx Trust & Saving Bank $20,000,000
Bank of America, N.A. $15,000,000
AGGREGATE COMMITMENT $60,000,000
3
EXHIBIT A-1
RATABLE NOTE
$ [_________], 2002
------------
On the Facility Termination Date, Stepan Company, a Delaware corporation
(the "Company"), promises to pay to the order of (the
---------------------
"Bank") the lesser of the principal sum of Dollars
---------------------------
or the aggregate unpaid principal amount of all Ratable Loans made by the Bank
to the Company pursuant to Article II of the Revolving Credit Agreement (the
"Agreement") hereinafter referred to, in immediately available funds at the main
office of Bank One, NA in Chicago, Illinois, as Agent, together with interest on
the unpaid principal amount hereof at the rates and on the dates set forth in
the Agreement.
The Bank shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Ratable Loan and the date and amount of each
principal payment hereunder.
This Ratable Note is one of the Notes issued pursuant to, and is entitled
to the benefits of, the Revolving Credit Agreement, dated as of May 3, 2002
among the Company, Bank One, NA, individually and as Agent, and the banks named
therein, to which Agreement, as it may be amended from time to time, reference
is hereby made for a statement of the terms and conditions under which this
Ratable Note may be prepaid or its maturity date accelerated. Capitalized terms
used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
STEPAN COMPANY
By:
--------------------------------
Title:
-----------------------------
4
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
RATABLE NOTE OF STEPAN COMPANY,
DATED [_________], 2002
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
---- --------- ----------- --------- -------
5
EXHIBIT A-2
COMPETITIVE BID NOTE
[Date]
Stepan Company, a Delaware corporation (the "Company"), promises to pay to
the order of (the "Bank") the aggregate
------------------------------------
unpaid principal amount of all Competitive Bid Loans made by the Bank to the
Company pursuant to Section 2.19 of the Agreement (as hereinafter defined), in
immediately available funds at the main office of Bank One, NA in Chicago,
Illinois, as Agent, together with interest on the unpaid principal amount hereof
at the rates and on the dates set forth in the Agreement. The Company shall pay
the principal of and accrued and unpaid interest on each Competitive Bid Loan on
the last day of the Interest Period applicable thereto.
The Bank shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Competitive Bid Loan and the date and amount of each
principal payment hereunder.
This Competitive Bid Note is one of the Notes issued pursuant to, and
is entitled to the benefits of, the Revolving Credit Agreement, dated as of May
3, 2002 among the Company, Bank One, NA, individually and as Agent, and the
banks named therein, to which Agreement, as it may be amended from time to time,
to which Agreement reference is hereby made for a statement of the terms and
conditions governing this Competitive Bid Note, including the terms and
conditions under which this Competitive Bid Note may be prepaid or its maturity
date accelerated. Capitalized terms used herein and not otherwise defined herein
are used with the meanings attributed to them in the Agreement.
STEPAN COMPANY
By:
--------------------------------
Title:
-----------------------------
6
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
COMPETITIVE BID NOTE OF STEPAN COMPANY,
DATED [_________], 2002
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
---- --------- ----------- --------- -------
7
EXHIBIT B
May 3, 2002
The Banks who are parties to the
Credit Agreement described below.
Gentlemen/Ladies:
I am counsel for Stepan Company (the "Company") and have represented
the Company in connection with its execution and delivery of an Revolving Credit
Agreement among the Company, Bank One, NA, individually, as LC Issuer and as
Agent, and the Banks named therein, providing for Credit Extensions in the
original aggregate principal amount up to $60,000,000 and dated as of May 3,
2002 (the "Agreement"). All capitalized terms used in this opinion shall have
the meanings attributed to them in the Agreement.
I have examined the Company's articles of incorporation, by-laws,
resolutions, the Loan Documents and such other matters of fact and law which we
deem necessary in order to render this opinion. Based upon the foregoing, it is
my opinion that:
l. Each of the Company and each Subsidiary is a corporation,
partnership or limited liability company duly incorporated or organized, as the
case may be, validly existing and (to the extent such concept applies to such
entity) in good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
2. The execution and delivery of the Loan Documents by the Company and
the performance by the Company of the Obligations have been duly authorized by
all necessary corporate action and proceedings on the part of the Company and
will not:
(a) require any consent of the Company's shareholders;
(b) violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Company or any Subsidiary or the Company's or any
Subsidiary's articles of incorporation or by-laws or any indenture, instrument
or agreement binding upon the Company or any Subsidiary; or
(c) result in, or require, the creation or imposition of any Lien pursuant
to the provisions of any indenture, instrument or agreement binding upon the
Company or any Subsidiary.
3. The Loan Documents have been duly executed and delivered by the
Company and constitute legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their terms except to the
extent the enforcement thereof may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights
8
generally and subject also to the availability of equitable remedies if
equitable remedies are sought.
4. Except as disclosed in the Company's financial statements referred
to in Section 5.4 of the Credit Agreement, there is no litigation or proceeding
against the Company or any Subsidiary which, if adversely determined, would
materially adversely affect the business or condition of the Company or any
Subsidiary.
5. No approval, authorization, consent, adjudication or order of any
governmental authority, which has not been obtained by the Company or any
Subsidiary, is required to be obtained by the Company or any Subsidiary in
connection with the execution and delivery of the Loan Documents, the borrowings
under the Agreement or in connection with the payment by the Company of the
Obligations.
This opinion may be relied upon by the Agent, the LC Issuer the Banks
and their participants, assignees and other transferees.
Very truly yours,
Name:
--------------------------------
Vice President, Secretary and General
Counsel
9
EXHIBIT C
COMPLIANCE CERTIFICATE
To: The Banks parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Revolving Credit Agreement dated as of May 3, 2002, among the Company, the banks
party thereto and Bank One, NA as Agent for the Banks (the "Agreement"). Unless
otherwise defined herein, capitalized terms used in this Compliance Certificate
have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected [Vice President - Finance and
Administration][Vice President and Corporate Controller] of the Company;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Company and its Subsidiaries during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Company's compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Company has taken, is taking, or proposes to
take with respect to each such condition or event:
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
10
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this day of ,
---- ---------
20 .
-----
Name:
----------
Title:
11
[SAMPLE]
SCHEDULE I TO COMPLIANCE REPORT
Calculation Test
----------------
1. Interest Coverage Ratio
a. Consolidated Earnings Before Interest and Taxes
for quarter ended plus
-------------
preceding three quarters
------
b. Consolidated Interest Expense for quarter ended
plus preceding three quarters
--------------- ------
a : b to 1.0
---
[2.0 to 1.0]
2. Dividend Limitation
a. Restricted Payments since December 31, 2001
------
b. $30,000,000 + Consolidated Net Income -
Consolidated Net Loss since December 31, 2001
------
a + b
------
3. Funded Indebtedness Limitation
a. Consolidated Funded Indebtedness
------
b. Guaranties
------
c. Unfunded Liabilities
------
d. Consolidated Capitalization
------
a+b+c
-----
d to 1.0
---
[.55 to 1.0]
4. Sale of Assets
a. Assets sold since December 31, 2001 $50,000,000
------
b. Assets sold during FY , 20 15%
------- -- ----
c. Consolidated Tangible Assets
------
b : c
-------
12
EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption (the "Assignment and Assumption") is dated
-------------------------
as of the Effective Date set forth below and is entered into by and between
[Insert name of Assignor] (the "Assignor") and [Insert name of Assignee] (the
--------
"Assignee"). Capitalized terms used but not defined herein shall have the
--------
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
----------------
Assignee. The Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Agent as contemplated below, the interest in and to all of the Assignor's
rights and obligations in its capacity as a Bank under the Credit Agreement and
any other documents or instruments delivered pursuant thereto that represents
the amount and percentage interest identified below of all of the Assignor's
outstanding rights and obligations under the respective facilities identified
below (including without limitation any letters of credit, guaranties and
swingline loans included in such facilities and, to the extent permitted to be
assigned under applicable law, all claims (including without limitation contract
claims, tort claims, malpractice claims, statutory claims and all other claims
at law or in equity), suits, causes of action and any other right of the
Assignor against any Person whether known or unknown arising under or in
connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby) (the
"Assigned Interest"). Such sale and assignment is without recourse to the
-----------------
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.
1. Assignor:
-----------------------------------------------------
2. Assignee: [and is an
-----------------------------------------------------
Affiliate/Approved Fund of [identify Bank]/1/]
3. Borrower: STEPAN COMPANY
4. Agent: Bank One, NA, as the agent under the Credit Agreement.
5. Credit Agreement: The Revolving Credit Agreement dated as of May 3, 2002
among Stepan Company, the Banks party thereto, Bank One, NA, as Agent, and the
other agents party thereto.
13
6. Assigned Interest:
----------------------------------------------------------------------------------------
Aggregate Amount Amount of Commitment/ Percentage Assigned of
Facility Assigned of Commitment/ Outstanding Credit Commitment/ Outstanding
Outstanding Credit Exposure Assigned* Credit Exposure/2/
Exposure for all
Banks*
----------------------------------------------------------------------------------------
/3/ $ $ %
---------- -------
----------------------------------------------------------------------------------------
$ $ %
---------- -------
----------------------------------------------------------------------------------------
$ $ %
---------- -------
----------------------------------------------------------------------------------------
7. Trade Date: /4/
---------------------------------------
Effective Date: , 20 TO BE INSERTED BY AGENT AND WHICH
-------------------- --
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER BY THE AGENT.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
-----------------------------------------
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
-----------------------------------------
Title:
[Consented to and]/5/ Accepted:
BANK ONE, NA, as Agent
By:
---------------------------------
Title:
[Consented to:]/6/
*Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.
/2/ Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Banks thereunder.
/3/ Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g. "Revolving
Credit Commitment," "Term Loan Commitment,", etc.)
14
/4/ Insert if satisfaction of minimum amounts is to be determined as of the
Trade Date.
/5/ To be added only if the consent of the Agent is required by the terms of the
Credit Agreement.
/6/ To be added only if the consent of the Company and/or other parties (e.g.
Swing Line Lender, L/C Issuer) is required by the terms of the Credit Agreement.
[NAME OF RELEVANT PARTY]
By:
---------------------------------
Title:
15
ANNEX 1
TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
------------------------------
1.1 Assignor. The Assignor represents and warrants that (i) it is the
--------
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby. Neither the Assignor nor any of its officers, directors,
employees, agents or attorneys shall be responsible for (i) any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency, perfection, priority, collectibility,
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Company, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document, (iv) the performance or
observance by the Company, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document, (v)
inspecting any of the property, books or records of the Company, or any
guarantor, or (vi) any mistake, error of judgment, or action taken or omitted to
be taken in connection with the Loans or the Loan Documents.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it
--------
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Bank under the Credit Agreement, (ii) from
and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Bank thereunder and, to the extent of the Assigned Interest,
shall have the obligations of a Bank thereunder, (iii) agrees that its payment
instructions and notice instructions are as set forth in Schedule 1 to this
Assignment and Assumption, (iv) confirms that none of the funds, monies, assets
or other consideration being used to make the purchase and assumption hereunder
are "plan assets" as defined under ERISA and that its rights, benefits and
interests in and under the Loan Documents will not be "plan assets" under ERISA,
(v) agrees to indemnify and hold the Assignor harmless against all losses, costs
and expenses (including, without limitation, reasonable attorneys' fees) and
liabilities incurred by the Assignor in connection with or arising in any manner
from the Assignee's non-performance of the obligations assumed under this
Assignment and Assumption, (vi) it has received a copy of the Credit Agreement,
together with copies of financial statements and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision
independently and without reliance on the Agent or any other Bank, and (vii)
attached as Schedule 1 to this Assignment and Assumption is any documentation
required to be delivered by the Assignee with respect to its tax status pursuant
to the terms of the Credit Agreement, duly completed and executed by the
Assignee and (b) agrees that (i) it will, independently and without reliance on
the Agent, the Assignor or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents, and
16
(ii) it will perform in accordance with their terms all of the obligations which
by the terms of the Loan Documents are required to be performed by it as a Bank.
2. Payments. The Assignee shall pay the Assignor, on the Effective
--------
Date, the amount agreed to by the Assignor and the Assignee. From and after the
Effective Date, the Agent shall make all payments in respect of the Assigned
Interest (including payments of principal, interest, Reimbursement Obligations,
fees and other amounts) to the Assignor for amounts which have accrued to but
excluding the Effective Date and to the Assignee for amounts which have accrued
from and after the Effective Date.
3. General Provisions. This Assignment and Assumption shall be binding
------------------
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of Illinois.
17
ADMINISTRATIVE QUESTIONNAIRE
(Schedule to be supplied by Closing Unit or Trading Documentation Unit)
(For Forms for Primary Syndication call Xxxxxxxx Xxxxxxx at 312-732-8844)
(For Forms after Primary Syndication call Xxx Xxxxx at 000-000-0000)
18
US AND NON-US TAX INFORMATION REPORTING REQUIREMENTS
(Schedule to be supplied by Closing Unit or Trading Documentation Unit)
(For Forms for Primary Syndication call Xxxxxxxx Xxxxxxx at 312-732-8844)
(For Forms after Primary Syndication call Xxx Xxxxx at 000-000-0000)
19
EXHIBIT E
COMPETITIVE BID QUOTE REQUEST
(Section 2.19(B))
,
---------- ----
To: Bank One, NA,
as agent (the "Agent")
From: Stepan Company (the "Company")
Re: Revolving Credit Agreement dated as of May 3, 2002 (as amended,
supplemented or otherwise modified from time to time through the date
hereof, the "Agreement") among the Company, the lenders from time to time
party thereto and Bank One, NA, as Agent
1. Capitalized terms used herein have the meanings assigned to them in the
Agreement.
2. We hereby give notice pursuant to Section 2.19(B) of the Agreement that
we request Competitive Bid Quotes for the following proposed Competitive Bid
Advance(s):
Borrowing Date: ,
--------- ----
Principal Amount/1/ Interest Period/2/
---------------- ---------------
$
--------------- ---------------
3. Such Competitive Bid Quotes should offer [a Competitive Bid Margin] [an
Absolute Rate].
4. Upon acceptance by the undersigned of any or all of the Competitive Bid
Advances offered by Banks in response to this request, the undersigned shall be
deemed to affirm as of the Borrowing Date thereof the representations and
warranties made in Article V of the Agreement.
STEPAN COMPANY
By:
---------------------------------
Title:
------------------------------
----------
/1/ Amount must be at least $500,000 and an integral multiple of $100,000.
/2/ One, two, three or six months (Eurodollar Auction) or at least 1 and up
to 30 days (Absolute Rate Auction), subject to the provisions of the definitions
of Eurodollar Interest Period and Absolute Rate Interest Period.
20
EXHIBIT F
INVITATION FOR COMPETITIVE BID QUOTES
(Section 2.19(C))
,
---------- ----
To: Each of the Banks party to the Agreement
referred to below
Re: Invitation for Competitive Bid Quotes to
Stepan Company (the "Company")
Pursuant to Section 2.19(C) of the Revolving Credit Agreement dated as of
May 3, 2002 (as amended, supplemented or otherwise modified from time to time
through the date hereof, the "Agreement") among the Company, the lenders from
time to time party thereto and Bank One, NA, as Agent, we are pleased on behalf
of the Company to invite you to submit Competitive Bid Quotes to the Company for
the following proposed Competitive Bid Advance(s):
Borrowing Date: ,
--------- ----
Principal Amount Interest Period
---------------- ---------------
$
------------- ---------------
Such Competitive Bid Quotes should offer [a Competitive Bid Margin] [an
Absolute Rate]. Your Competitive Bid Quote must comply with Section 2.19(D) of
the Agreement and the foregoing. Capitalized terms used herein have the meanings
assigned to them in the Agreement.
Please respond to this invitation by no later than 10:30 a.m. (Chicago
time) on , .
--------- ----
BANK ONE, NA, as Agent
By:
---------------------------------
Title:
------------------------------
21
EXHIBIT G
COMPETITIVE BID QUOTE
(Section 2.19(D))
,
---------- ----
To: Bank One, NA,
as Agent
Re: Competitive Bid Quote to Stepan Company (the "Company")
In response to your invitation on behalf of the Company dated ,
---------
, we hereby make the following Competitive Bid Quote pursuant to Section
----
2.19(D) of the Agreement hereinafter referred to and on the following terms:
1. Quoting Bank:
----------------
2. Person to contact at Quoting Bank:
----------------
3. Borrowing Date: /3/
---------------
4. We hereby offer to make Competitive Bid Loan(s) in the following principal
amounts, for the following Interest Periods and at the following rates:
Principal Interest [Competitive [Absolute Minimum/Maximum
Amount/4/ Period/5/ Bid Margin/6/] Rate/7/] Amount/8/
--------- --------- -------------- --------- ---------------
$ $
-------- --------- ------------- --------- -----------
We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in the Revolving Credit
Agreement dated as of May 3, 2002 (as amended, supplemented or otherwise
modified from time to time through the date hereof, the "Agreement") among the
Company, the lenders from time to time party thereto and Bank One,
----------
/3/ As set forth in the Invitation for Competitive Bid Quotes.
/4/ Principal amount bid for each Interest Period may not exceed the
principal amount requested. Bids must be made for at least $500,000 and an
integral multiple of $1,000,000.
/5/ One, two, three or six months or at least 1 and up to 30 days, as
specified in the related Invitation For Competitive Bid Quotes.
/6/ Competitive Bid Margin over or under the Eurodollar Base Rate
determined for the applicable Interest Period. Specify percentage (rounded to
the nearest 1/1000 of 1%) and specify whether "PLUS" or "MINUS".
/7/ Specify rate of interest per annum (rounded to the nearest 1/1000 of
1%).
/8/ Specify minimum or maximum amount, if any, which the Company may accept
(see Section 2.19(D)(ii)(d)).
22
NA, as Agent, irrevocably obligates us to make the Competitive Bid Loan(s) for
which any offer(s) are accepted, in whole or in part. Capitalized terms used
herein and not otherwise defined herein shall have their meanings as defined in
the Agreement.
Very truly yours,
[NAME OF BANK]
By:
-----------------------------------
Title:
--------------------------------
23
SCHEDULE "1"
SUBSIDIARIES AND OTHER INVESTMENTS
(See Sections 5.8 and 6.16)
Amount of Percent Restricted or Jurisdiction of
Investment In Owned By Investment Ownership Unrestricted Organization
------------------- ----------- ----------- --------- ------------- ---------------
Stepan Europe S.A. Company $26,762,000 100% Unrestricted France
Stepan Canada, Inc. Company $ 880,000 100% Unrestricted Canada
Stepan Mexico, Company $ 5,754,000 100% Unrestricted Mexico
S.A. de X.X.
Xxxxxx Quimica Company $ 221,000 100% Unrestricted Brazil
Ltda.
Stepan Colombiana Company $ 4,311,000 100% Unrestricted Colombia
de Quimicos
Stepan UK Limited Stepan N/A 100% Unrestricted England and
Europe S.A. Wales
Stepan Deutschland Stepan N/A 100% Unrestricted Germany
GmbH Europe X.X.
Xxxxxx Philippines Company $ 8,814,000 50% Unrestricted Philippines
SCHEDULE "2"
INDEBTEDNESS AND LIENS
(See Sections 6.12, 6.15 and 6.18)
Maturity and
Indebtedness Indebtedness Property Amount of
Incurred By Owed To Encumbered (If Any) Indebtedness
------------ ------------ ------------------- ------------
NONE
SCHEDULE "3"
LONG TERM DEBT
(See Section 6.1(h))
9.7% Promissory Note (1991)
7.22% Promissory Notes, Series A and B
7.69% Promissory Notes, Series A
7.77% Promissory Notes, Series B
6.59% Promissory Notes
