Exhibit 10.1
EIGHTH AMENDMENT
WITH RESPECT TO
NOTE PURCHASE AGREEMENT
THIS EIGHTH AMENDMENT WITH RESPECT TO NOTE PURCHASE AGREEMENT is
entered into as of March 6, 2002 among HERCULES INCORPORATED, a Delaware
corporation (the "Company"), which is successor to BetzDearborn Inc.
("BetzDearborn") under the Note Agreement referred to below, XXXXXX FIDUCIARY
TRUST COMPANY ("Xxxxxx"), in its capacity as successor Trustee (the "Trustee")
of The BetzDearborn Inc. Employee Stock Ownership and 401(k) Trust (the
"ESOT") of the BetzDearborn Inc. Employee Stock Ownership and 401(k) Plan (the
"Plan"), the undersigned subsidiaries of the Company and THE PRUDENTIAL
INSURANCE COMPANY OF AMERICA ("Prudential").
W I T N E S S E T H:
WHEREAS, BetzDearborn adopted the Xxxx Laboratories, Inc. Employee
Stock Ownership Plan (the "Plan") effective January 1, 1989, changed the name
of the Plan to the name shown above and most recently amended and restated the
Plan effective January 1, 1994; and
WHEREAS, pursuant to the Plan and effective January 1, 1989,
BetzDearborn entered into an Agreement of Trust with Mellon Bank, N.A.
("Mellon") as trustee ("Trustee"), thereby establishing the ESOT; and
WHEREAS, as of June 19, 1989, the ESOT and BetzDearborn entered into
a Note Purchase Agreement with Prudential whereby the ESOT sold and Prudential
purchased $100,000,000 principal amount of the ESOT's Notes (guaranteed by
BetzDearborn), approximately $75,461,000 of which are still outstanding and
held by Prudential, which Note Purchase Agreement was amended by a First
Amendment thereto as of June 25, l996 and a Second Amendment thereto as of
June 25, 1998 and which was supplemented and amended by a Consent and Waiver
and Assumption (the "Consent and Assumption") effective October 15, 1998
executed by and among BetzDearborn, the Company and Prudential and further
amended by a Third Amendment and Assumption Agreement (the "Third Amendment")
dated as of December 31, 1998 executed by and among BetzDearborn, the Company
and Prudential, a Fourth Amendment dated as of April 19, 1999 among the
parties hereto, a Fifth Amendment dated as of July 26, 2000 among the parties
thereto, a Sixth Amendment dated as of November 14, 2000 among the parties
hereto and a Seventh Amendment dated as of July 17, 2001 among the parties
hereto (as so amended and supplemented by said Amendments and the Consent and
Assumption being herein called the "Note Agreement"); and
WHEREAS, as of October 1, 1992, BetzDearborn removed Mellon as
Trustee, appointed Xxxxxx as successor Trustee and amended and restated the
foregoing Agreement of Trust, retitling it as "Trust Agreement for Xxxx
Laboratories Inc. Employee Stock Ownership and 401(k) Plan," and continued the
ESOT with the successor Trustee; and
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WHEREAS, pursuant to an Agreement and Plan of Merger dated as of July
30, 1998 among the Company, Water Acquisition Co. and BetzDearborn,
BetzDearborn became a wholly-owned subsidiary of the Company on October 15,
1998 (the "Merger"); and
WHEREAS, pursuant to the Consent and Amendment and the Third
Amendment (i) the Company has assumed all of the obligations of BetzDearborn
under the Note Agreement and in respect of the ESOT Notes and BetzDearborn has
been released from all such obligations (except insofar as BetzDearborn shall
have obligations as a Guarantor under the Note Agreement), and (ii) the
Company has succeeded to, and been substituted for, and is entitled to
exercise every right and power of, "the Company" under the Note Agreement; and
WHEREAS, the parties hereto desire to amend certain provisions of the
Note Agreement, as provided for herein.
NOW, THEREFORE, in consideration of the foregoing premises and mutual
covenants and agreements contained herein, the parties hereto agree as
follows:
SECTION 1. AMENDMENTS TO NOTE AGREEMENT
(a) Subparagraph 5.2(b)(ii)(C) of the Note Agreement is hereby
amended and restated in its entirety to read as follows:
(C) if such transaction is a sale, lease or other
disposition of assets, (w) such transaction is not an Asset
Disposition, (x) such transaction is an Asset Disposition of the
Resins Division or FiberVision, (y) such transaction is an Asset
Disposition and is the BetzDearborn Sale or (z) the aggregate value
of the assets sold, leased or disposed of in such transaction, when
added to the aggregate value of all assets sold, leased or disposed
of in all transactions permitted by this clause (z) at any time after
the Sixth Amendment Effective Date, does not exceed $50,000,000.
(b) Subparagraph 5.2(b)(iii) of the Note Agreement is hereby
amended and restated in its entirety to read as follows:
(iii) In connection with any Asset Disposition
consummated while the Notes are outstanding (including for such
purpose the issuance of direct or indirect equity interests in
FiberVisions or the Resins Division or their respective assets or the
BetzDearborn Sale), no later than two (2) Business Days prior to such
Asset Disposition, the holders of the Notes shall have received a
certificate of a Responsible Officer of the Company specifying the
anticipated or actual date of such Asset Disposition, briefly
describing the assets to be sold or otherwise disposed of and setting
forth the net book value of such assets, the aggregate consideration
and the Net Cash Proceeds to be received for such assets in
connection with such Asset Disposition, and thereafter the Credit
Parties shall, within the period of 180 days following the
consummation of such Asset Disposition, apply (or cause to be
applied) an amount equal to the Net Cash Proceeds of such Asset
Disposition to prepay the Loans under the Credit Agreement and make
the offers to prepay the Notes in the manner specified in
subparagraph 5.2(n).
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(c) Subparagraph 5.2(d)(i) of the Note Agreement is hereby
amended and restated in its entirety to read as follows:
(i) Leverage Ratio. It will not permit, as of the last day
of any fiscal quarter, the Leverage Ratio to exceed the ratio set
forth below for the applicable period:
Maximum Leverage
Period Coverage Ratio
------ ----------------
October 1, 2000 through June 30, 2001 4.75 to 1.0
July 1, 2001 through September 30, 2001 5.25 to 1.0
October 1, 2001 through December 31, 2001 5.00 to 1.0
January 1, 2002 through March 31, 2002 4.75 to 1.0
April 1, 2002 through June 30, 2002 4.50 to 1.0
July 1, 2002 and thereafter 4.25 to 1.0
Notwithstanding the foregoing, during the BetzDearborn Sale Period (and, with
respect to any relevant period ending prior to the BetzDearborn Sale Effective
Date only, from and after the BetzDearborn Sale Effective Date), the
applicable maximum Leverage Ratio for the fiscal quarter periods ending as of
March 31, 2002 and June 30, 2002 shall be 5.50 to 1.0. Upon expiration of the
BetzDearborn Sale Period without the BetzDearborn Sale Effective Date having
occurred, if the Credit Parties were not in compliance with the covenant
levels set forth in the table above for the applicable periods, then an Event
of Default shall exist.
(d) Subparagraph 5.2(d)(iii) of the Note Agreement is hereby
amended and restated in its entirety to read as follows:
(iii) Interest Coverage Ratio. It will not permit, as of
the last day of any fiscal quarter, the Interest Coverage Ratio to be
less than the ratio set forth below for the applicable period:
Minimum Interest
Period Coverage Ratio
------ ----------------
October 1, 2000 through June 30, 2001 1.75 to 1.0
July 1, 2001 through September 30, 2001 1.65 to 1.0
October 1, 2001 through December 31, 2001 1.75 to 1.0
January 1, 2002 and thereafter 2.00 to 1.0
Notwithstanding the foregoing, during the BetzDearborn Sale Period (and, with
respect to any relevant period ending prior to or after the BetzDearborn Sale
Effective Date, from and after the BetzDearborn Sale Effective Date), the
applicable minimum Interest Coverage Ratio for the fiscal quarter periods
ending as of March 31, 2002 and June 30, 2002 shall be 1.75 to 1.0. Upon the
expiration of the BetzDearborn Sale Period without the BetzDearborn Sale
Effective Date having occurred, if the Credit Parties were not in compliance
with the covenant levels set forth in the table above for the applicable
periods, then an Event of Default shall exist.
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(e) The first sentence of paragraph 5.2(n) of the Note Agreement
is hereby amended and restated in its entirety to read as follows:
The Company will not amend, restate or otherwise change or
supplement the provisions of subsection 2.6(b)(ii), 2.6(b)(iii),
2.6(b)(iv) or 2.6(b)(v) of the Credit Agreement (as in effect on the
Eighth Amendment Effective Date after giving effect to the Fifth
Amendment to the Credit Agreement), other than to terminate the same,
and it will apply any Net Cash Proceeds from an Asset Disposition
(including any BetzDearborn Sale), Permitted Receivables Financing
(the consummation of which shall be subject to the prior written
consent of the Required Holders), Debt Issuance or Equity Issuance to
prepay the Loans under the Credit Agreement in accordance with the
terms of said subsection 2.6(b)(ii), 2.6(b)(iii), 2.6(b)(iv) and
2.6(b)(v), as applicable (herein called a "Bank Prepayment").
(f) Paragraph 12A of the Note Agreement is hereby amended by
adding the following definitions in the appropriate alphabetical order:
"BetzDearborn Purchase Agreement": that certain Stock and
Asset Purchase Agreement dated as of February 12, 2002 entered into
by and among the Company, General Electric Company and Falcon
Acquisition Corp, as such agreement may be amended, restated,
modified or supplemented from time to time.
"BetzDearborn Sale": shall mean the sale of the water
business of the Company (i) conducted through the BetzDearborn
Division of the Company and (ii) through the Pulp and Paper Division
of the Company and its Affiliates, pursuant to the BetzDearborn
Purchase Agreement for an aggregate purchase price of approximately
$1,800,000,000 in cash, subject to adjustment as provided in such
agreement, but resulting in minimum Net Cash Proceeds of
$1,600,000,000.
"BetzDearborn Sale Effective Date": the date upon which the
BetzDearborn Sale is consummated and the Company prepays the Loans
(as defined in the Credit Agreement) and the Note Obligations in
accordance with the Credit Agreement and paragraph 5.2(n) hereof.
"BetzDearborn Sale Period": shall mean the period from the
Eighth Amendment Effective Date to the earliest of (i) the date upon
which the BetzDearborn Purchase Agreement is terminated, (ii) the
BetzDearborn Sale Effective Date and (iii) July 15, 2002.
"Eighth Amendment" the Eighth Amendment dated as of March 6,
2002, amending and supplementing this Agreement.
"Eighth Amendment Effective Date" the date on which all of
the conditions precedent to the effectiveness of the Eighth Amendment
are satisfied by the Credit Parties or waived by the Required
Holders.
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(g) The definition of "Consolidated EBITDA" in paragraph 12A of
the Note Agreement is hereby deleted in its entirety and the following
substituted therefor with such amendment to be deemed effective as of December
31, 2001:
"Consolidated EBITDA": for any fiscal period, (i)
Consolidated Net Income for such period, plus (ii) Consolidated
Interest Expense for such period, plus (iii) to the extent deducted
in computing such Consolidated Net Income, the sum of (a) taxes, (b)
depreciation, (c) amortization, (d) any non-cash charges, (e) for the
fiscal quarter ended June 30, 2001 through the fiscal quarter ended
June 30, 2002 only, any non-recurring cash charges associated with
the restructuring of the Company and its Subsidiaries initiated on or
after April 1, 2001 in an aggregate amount not to exceed $50 million,
(f) for the fiscal quarter ended December 31, 2001 through the fiscal
quarter ended December 31, 2002 only, any non-recurring cash charges
associated with the reduction-in-force of the Company and its
Subsidiaries in an aggregate amount not to exceed $125 million and
(g) any extraordinary, unusual or non-recurring cash losses or cash
charges incurred in connection with (x) the Acquisition in an amount
not to exceed $170 million after taxes in the aggregate for all such
add-backs pursuant to this subclause (x), and (y) the settlement
prior to the Closing Date of certain litigation in an amount not to
exceed $63 million after taxes in the aggregate for all such
add-backs pursuant to this subclause (y), minus (iv) any
extraordinary gains and noncash gains.
(h) The following paragraph is added as a new paragraph 14N to
the Note Agreement to read as follows:
14N. Reorganization in Connection with BetzDearborn Sale. In
connection with the BetzDearborn Sale and notwithstanding any
provision of the Credit Documents to the contrary, the Credit Parties
and their subsidiaries may take such intercompany actions as are
reasonably necessary to consummate the Reorganization defined in and
referred to in the BetzDearborn Purchase Agreement (including without
limitation intercompany mergers, liquidations and asset transfers
related to separating the Water Business (as defined in the
BetzDeaborn Purchase Agreement) from the Company's other businesses);
provided, however, that (a) the Credit Parties shall make
commercially reasonable efforts to maintain the Collateral Agent's
collateral position as of the Eighth Amendment Effective Date
(including without limitation by promptly causing any newly formed
subsidiaries to execute Guarantor Joinder Agreements and otherwise
comply with the terms of paragraph 5.1(j)), and (b) upon the
expiration of the BetzDearborn Sale Period without the BetzDearborn
Sale Effective Date having occurred, the Credit Parties shall, within
30 days of such expiration (or such longer period of time as the
Collateral Agent may reasonably agree to if the Credit Parties are
diligently pursuing such actions in good faith) take such actions as
are reasonably necessary to put the Collateral Agent in a collateral
position that is as good as such collateral position as of the Eighth
Amendment Effective Date.
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SECTION 2. ACKNOWLEDGMENT AND AFFIRMATION BY CREDIT PARTIES
Subject to the release of the Pledged Collateral upon the
BetzDearborn Sale Effective Date, each Credit Party affirms the liens and
security interests created and granted by it in the Credit Documents
(including, but not limited to, the Pledge Agreement, the Security Agreement
and the Mortgages) and agrees that this Amendment shall in no manner adversely
affect or impair such liens and security interests.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF CREDIT PARTIES
In order to induce Prudential to enter into this Amendment, each of
the Credit Parties makes the following representations, covenants and
warranties which shall survive the execution and delivery of the Credit
Documents:
(i) It has taken all necessary action to authorize the
execution, delivery and performance of this Amendment.
(ii) This Amendment has been duly executed and delivered
by such Credit Party and constitutes such Credit Party's legal, valid
and binding obligation, enforceable in accordance with its terms,
except as such enforceability may be limited (x) by general
principles of equity and conflicts of laws or (y) by bankruptcy,
reorganization, insolvency, moratorium or other laws of general
application relating to or affecting the enforcement, of creditors'
rights.
(iii) No consent, approval, authorization or order of, or
filing, registration or qualification with, any court or governmental
authority or third party is required in connection with the
execution, delivery or performance by such Credit Party of this
Amendment.
(iv) The execution and delivery of this Amendment does
not diminish or reduce its obligations under the Credit Documents
(including, without limitation, in the case of each Guarantor, such
Guarantor's guaranty pursuant to paragraph 6 of the Note Agreement)
in any manner, except as specifically set forth herein.
(v) Such Credit Party has no claims, counterclaims,
offsets, or defenses to the Credit Documents and the performance of
its obligations thereunder, or if such Credit Party has any such
claims, counterclaims, offsets, or defenses to the Credit Documents
or any transaction related to the Credit Documents, the same are
hereby waived, relinquished and released in consideration of
Prudential's execution and delivery of this Amendment.
(vi) The representation and warranties of the Credit
Parties set forth in Section 3 of the Third Amendment are true and
correct as of the date hereof (except those that relate to an earlier
date) and all of the provisions of the Credit Documents, except as
amended hereby, are in full force and effect.
(vii) Subsequent to the execution and delivery of this
Amendment and after giving effect hereto, no unwaived event has
occurred and is continuing which constitutes a Default or an Event of
Default.
The Credit Parties hereby incorporate the representations and
warranties contained in Section 1 of the Credit Agreement (together with all
related defined terms) as in effect on the
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date hereof (and after giving effect to the Fifth Amendment to Amended and
Restated Revolving Credit Agreement, executed on or about the date hereof by
the Company, certain subsidiaries of the Company, BetzDearborn Canada, Inc.,
Bank of America, N.A., Bank of America Canada, and the several banks and
financial institutions identified on the signature pages thereto) by reference
herein to the same extent as if set forth at length herein (the "Incorporated
Provisions") and each hereby makes such representations and warranties (to the
knowledge of the Company, when applicable under the Credit Agreement) for the
benefit of Prudential as of the date hereof in connection with the execution
and delivery of this Amendment; provided, that references in the Incorporated
Provisions to "this Agreement" and "Notes" shall be taken as references to the
Note Agreement as amended hereby and to the Notes outstanding thereunder. The
Company represents and warrants to Prudential that no Default or Event of
Default exists under the Note Agreement, both before and after giving effect
to the provisions of this Amendment.
SECTION 4. EFFECTIVENESS OF AMENDMENTS
The provisions of this Amendment shall become effective upon the
execution and delivery of a counterpart of this Amendment by all of the
parties hereto and the satisfaction of the following additional conditions
precedent:
(a) Prudential shall have received counterparts of this
Amendment, duly executed and delivered by each of the Credit
Parties and by the Trustee;
(b) Prudential shall have received a copy of the duly executed
amendment to the Credit Agreement, and the terms of such
amendment shall be substantially similar to the terms of
this Amendment;
(c) no Default or Event of Default shall have occurred and be
continuing; and
(c) as of the date of the effectiveness of this Amendment all
representations and warranties made by the Company and each
other Credit Party in this Amendment and each other Credit
Document are true and correct in all material respects.
SECTION 5. MISCELLANEOUS
SECTION 5.1. DEFINED TERMS. Capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Note Agreement.
SECTION 5.2. REFERENCES. On and after the effective date of this
Amendment, each reference in the Note Agreement and the Notes shall mean and
be a reference to the Note Agreement as amended by this Amendment.
SECTION 5.3. EXPENSES. The Company agrees to pay all reasonable costs
and expenses incurred by Prudential in connection with the preparation,
execution and delivery of this Amendment, and the consummation of the
transactions contemplated hereby, including the reasonable fees and expenses
of Prudential's counsel.
SECTION 5.4. RATIFICATION. The Note Agreement, as amended by this
Amendment, is and shall continue to be in full force and effect and is hereby
in all respects ratified and confirmed. Except as expressly modified and
amended in this Amendment, all of the terms, provisions and conditions of the
Credit Documents shall remain unchanged and in full force and effect.
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SECTION 5.5. COUNTERPARTS. This Amendment may be executed in any
number of counterparts and by any combination of the parties hereto in
separate counterparts, each of which counterparts shall be an original and all
of which taken together shall constitute one and the same agreement.
SECTION 5.6. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
SECTION 5.7. ENTIRETY. This Amendment, the Note Agreement and the
other Credit Documents embody the entire agreement between the parties and
supersede all prior agreements and understandings, if any, relating to the
subject matter hereof. The Credit Documents represent the final agreement
between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties.
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IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
ESOT: BETZDEARBORN INC. EMPLOYEE STOCK
OWNERSHIP AND 401(K) TRUST ESTABLISHED
BY THE BETZDEARBORN INC. EMPLOYEE
STOCK OWNERSHIP AND 401(K) PLAN
By: XXXXXX FIDUCIARY TRUST COMPANY
as Trustee
By: /s/Xxxx. X. Xxxxxxxx
-----------------------------------
Xxxx X. Xxxxxxxx
Senior Vice President
PRUDENTIAL: THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA
By: /s/Xxxxxx Xxxxxxxx
-----------------------------------
Xxxxxx Xxxxxxxx
COMPANY: HERCULES INCORPORATED,
a Delaware corporation
By: /s/Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx
Vice President and Treasurer
(Principal Financial Officer and
duly authorized signatory)
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SUBSIDIARY GUARANTORS BETZDEARBORN CANADA, INC.,
an Ontario corporation
HERCULES CREDIT, INC.,
a Delaware corporation
HERCULES FLAVOR, INC.,
a Delaware corporation
WSP, INC.,
a Delaware corporation
AQUALON COMPANY,
a Delaware corporation
HERCULES FINANCE COMPANY,
a Delaware partnership
FIBERVISIONS, L.L.C.,
a Delaware limited liability company
FIBERVISIONS INCORPORATED,
a Delaware corporation
FIBERVISIONS PRODUCTS, INC.,
a Georgia corporation
HERCULES INTERNATIONAL LIMITED,
a Delaware corporation
BETZDEARBORN, INC.,
a Pennsylvania corporation
BETZDEARBORN EUROPE, INC.,
a Delaware corporation
DRC, LTD.,
a Delaware corporation
BL TECHNOLOGIES, INC.,
a Delaware corporation
BLI HOLDINGS CORP.,
a Delaware corporation
HERCULES SHARED SERVICES CORPORATION,
a Delaware corporation
BETZDEARBORN INTERNATIONAL, INC.,
a Pennsylvania corporation
ATHENS HOLDINGS, INC.,
a Delaware corporation
HERCULES CHEMICALS INTERNATIONAL, INC.,
a Delaware corporation
BL CHEMICALS INC.,
a Delaware corporation
CHEMICAL TECHNOLOGIES INDIA, LTD.,
a Delaware corporation
XXXXXXXXX HOLDINGS, INC.,
a Delaware corporation
EAST BAY REALTY SERVICES, INC.,
a Delaware corporation
FIBERVISIONS, L.P.,
a Delaware partnership
HERCULES CHEMICAL CORPORATION,
a Delaware corporation
HERCULES COUNTRY CLUB, INC.,
a Delaware corporation
HERCULES EURO HOLDINGS, LLC,
a Delaware limited liability company
HERCULES INTERNATIONAL LIMITED, L.L.C.,
a Delaware limited liability company
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By: /s/Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx
Vice President and Treasurer
(Principal Financial Officer and
duly authorized signatory) for each
of the foregoing Subsidiary
Guarantors listed on this page
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