EXHIBIT 10.35
EXECUTION COPY
SIXTH AMENDMENT
WITH RESPECT TO
NOTE PURCHASE AGREEMENT
THIS SIXTH AMENDMENT WITH RESPECT TO NOTE PURCHASE AGREEMENT is entered
into as of November 14, 2000 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), $91,000,000 of which are still outstanding and held by
Prudential, which Note Purchase Agreement was amended by a First Amendment
thereto as of June 25,1996 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 and a Fifth
Amendment dated as of July 26, 2000 among the parties thereto (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
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 2. AMENDMENTS TO NOTE AGREEMENT
Section l.1. (Paragraph 5) Paragraph 5 of the Note Agreement is amended
and restated in its entirety to read as follows:
5. COVENANTS.
5.1 Affirmative Covenants. So long as this Agreement, any of the
Notes or any other Credit Document shall remain in effect or any of the
principal of or interest on any of the Notes or any other amount payable by a
Credit Party to the holder of any Note pursuant to this Agreement, any of the
Notes or any other Credit Document shall remain unpaid, unless waived in writing
by the Required Holders, each Credit Party covenants and agrees that:
(a) Financial Statements.
(i) The Company will deliver to each holder of a
Note in duplicate:
(A) within ninety (90) days after the end of
each of its fiscal years, the consolidated statement of financial position
of the Company and its Consolidated Subsidiaries as of the end of such
year, and the related consolidated statements of income, stockholders'
equity and cash flows for the year then ended, accompanied by a
certificate of independent public accountants of recognized standing
satisfactory to the Required Holders as to such statements, which
certificate will contain no material exceptions or qualifications except
such as are acceptable to the Required Holders;
(B) within sixty (60) days after the end of
each of the first three (3) quarters of each of its fiscal years, the
consolidated statement of financial position of the Company and its
Consolidated Subsidiaries as at the end of such quarters,
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and the related consolidated statements of income and cash flows for such
quarters and the portion of the fiscal year then ended;
(C) promptly upon the filing thereof, copies
of all Form 8-K, 10-K, and 10-Q reports, if any, which the Company shall
have filed with the Securities and Exchange Commission;
(D) in the event the Company Notes are not
outstanding, promptly upon its becoming available and in any event within
30 days after such time as such reports are required to be filed with the
IRS, a copy of the annual report of the Plan on Form 5500;
(E) in the event the Company Notes are not
outstanding, promptly upon its becoming available, copies of the Annual
Report on Form 11-K of the Plan as filed with the Commission;
(F) in the event the Company Notes are not
outstanding, promptly following the Company's obtaining knowledge thereof,
a notice of the occurrence of any event that could, in the reasonable
judgment of the Company, be expected to give rise to a change in the
interest rate applicable to the Notes or the payment of any amount by the
ESOT pursuant to paragraph 7; provided, however, that the Company shall
not be required pursuant to this paragraph (G) to give notice of the
introduction or enactment of any amendments to ERISA or the Code or of the
proposal or adoption of any regulations under either ERISA or the Code or
any other matter of public knowledge;
(G) from time to time such additional
information regarding the financial position or business of the Company
as the holder of any Note may reasonably request; and
(H) simultaneously with the delivery of each set
of financial statements referred to in paragraphs (A) and (B) above, a
certificate of a Responsible Officer of the Company (1) stating that in
the course of the performance of his duties he would normally obtain
knowledge of any condition or event which constitutes, or which after
notice or lapse of time or both would constitute, an Event of Default
specified in paragraph 9, (2) stating whether or not he has obtained
knowledge of any such condition or event and, if so, specifying each such
condition or event of which he has knowledge and the nature and period of
existence thereof and the action the Company is taking and proposes to
take with respect thereto and (3) setting forth the calculations required
to establish compliance with subparagraph 5.2(d).
(ii) The Company shall promptly give notice to each
holder of Notes of (A) the occurrence of any Default or Event of Default,
accompanied by a certificate specifying the nature of such Default or
Event of Default, the period of existence thereof and the action that the
Company has taken or proposes to take with respect thereto and (B) the
occurrence of any of the following with respect to the Company or any of
its Consolidated Subsidiaries (x) the pendency or commencement of
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any litigation, arbitral or governmental proceeding against such Person
which if adversely determined could reasonably be expected to have a
Material Adverse Effect or (y) the institution of any proceedings against
such Person with respect to, or the receipt of notice by such Person of
potential liability or responsibility for violation, or alleged violation
of any federal, state or local law, rule or regulation, including but not
limited to, Environmental Laws, the violation of which could reasonably be
expected to have a Material Adverse Effect.
(b) Payment of Obligations. It will, and will cause each of
its Subsidiaries to, pay, discharge or otherwise satisfy at or before maturity
or before they become delinquent, as the case may be, all its obligations of
whatever nature, except where the amount or validity thereof is currently being
contested in good faith by appropriate proceedings and reserves in conformity
with GAAP with respect thereto have been provided on the books of the Company or
its Subsidiaries, as the case may be.
(c) Conduct of Business and Maintenance of Existence. It will,
and will cause each of the Material Subsidiaries to, (i) continue to engage in
business of the same general type as now conducted by it and preserve, renew and
keep in full force and effect its corporate existence (except in connection with
mergers or consolidations permitted under subparagraph 5.2(b)) and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business and (ii) comply with all
Contractual Obligations and Requirements of Law except to the extent that
failure to comply therewith could not, in the aggregate, be reasonably expected
to have a Material Adverse Effect.
(d) Maintenance of Property; Insurance.
(i) It will, and will cause each of the Material
Subsidiaries to, (A) keep all property useful and necessary in its
business in good working order and condition, except where the failure to
keep such property in good working order could not reasonably be expected
to have a Material Adverse Effect and (B) maintain with financially sound
and reputable insurance companies insurance on all its property in at
least such amount and against at least such risks as are usually insured
against in the same general area by companies engaged in the same or a
similar business (it being understood that the Company may maintain
self-insurance to a similar extent as is commonly maintained by companies
engaged in the same or a similar business). Within 60 days of the Third
Amendment Effective Date, the Collateral Agent shall be named as loss
payee or mortgagee, as its interest may appear, and/or additional insured
with respect to any such insurance providing coverage in respect of any
Collateral, and each provider of any such insurance shall agree, by
endorsement upon the policy or policies issued by it or by independent
instruments furnished to the Collateral Agent, that it will give the
Collateral Agent thirty (30) days prior written notice before any such
policy or policies shall be altered or canceled.
(ii) In the event that any Credit Party or any of its
Subsidiaries receives Net Cash Proceeds on account of any loss of, damage
to or destruction of, or any condemnation or other taking for public use
of, any Property of the Credit Parties or their Subsidiaries (with respect
to any such Person, an "Involuntary Disposition"), the Credit
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Parties shall apply (or cause to be applied) such Net Cash Proceeds in
accordance with the provisions of subparagraph 5.2(b)(iii). All insurance
proceeds shall be subject to the security interest of the Collateral Agent
(for the ratable benefit of the Secured Parties referred to in applicable
Collateral Documents) under the Collateral Documents.
(e) Books and Records. It will, and will cause each of the
Material Subsidiaries to, keep proper books of records and account in which
full, true and correct entries in conformity with generally accepted accounting
principles in effect with respect to such Person (meaning GAAP for the Company
and its Domestic Subsidiaries) and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities.
(f) EBITDA and Assets of Material Subsidiaries. The Credit
Parties shall at all times collectively account for 50% or more of the
Consolidated EBITDA and assets, respectively, of the Company and its
Consolidated Subsidiaries. Within 60 days of the Sixth Amendment Effective Date,
the Company will deliver to the holders of the Notes a certificate, in a form
reasonably acceptable to the Required Holders, demonstrating that the Credit
Parties are in compliance with this subparagraph 5.1(f).
(g) Year 2000 Compliance. The Company will promptly notify
each holder of Notes in the event any Credit Party discovers or determines that
any computer application that is material to its or any of its Subsidiaries'
business and operations will not be Year 2000 Compliant (as defined in
subparagraph 3.19 of the Third Amendment), except to the extent that such
failure could not reasonably be expected to have a Material Adverse Effect.
(h) Plan Existence. As long as the Company Notes are not
outstanding, each of the Company and the ESOT will (i) do all things necessary
to comply with the requirements for an "exempt loan" to the ESOT as defined in
Treasury Regulation sections 54.4975-7 and 54.4975-11 and the requirements, if
any, that may be promulgated from time to time with respect to section 133 of
the Code; (ii) do all things necessary to maintain and keep in full force and
effect the Plan as an "employee stock ownership plan", within the meaning of
section 4975(e)(7) of the Code and section 407(d)(6) of ERISA; (iii) cause the
Plan and the ESOT to be operated and administered at all times and be amended as
necessary so as to remain qualified under sections 401(a), 401(k) and 4975(e)(7)
of the Code and the ESOT to remain tax-exempt under section 501(a) of the Code;
(iv) cause all other actions to be taken which are necessary for the Plan and
the ESOT to be in material compliance with all applicable requirements of ERISA
(including Titles I and II thereof) and the Code and the regulations thereunder
as from time to time in effect and applicable to the Plan and the ESOT; (v) take
no action to amend or otherwise modify any Plan Document in a manner that would
result in the extension of credit represented by the Notes ceasing to qualify as
a "securities acquisition loan" within the meaning of section 133(b) of the
Code. The Company covenants that it will make contributions to the ESOT as
required by the Plan. Nothing in this subparagraph 5.1(h) is intended to give
any Person, other than the holders of the Notes, any rights.
(i) Audit/Inspections. Upon reasonable notice and during
normal business hours, each Credit Party will permit representatives appointed
by the holder of any Note, including, without limitation, independent
accountants, agents, attorneys and appraisers, to visit and inspect such Credit
Party's property, including its books and records, its accounts
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receivable and inventory, its facilities and its other business assets, and to
make photocopies or photographs thereof and to write down and record any
information such representative obtains and shall permit such holder of a Note
or its representatives to investigate and verify the accuracy of information
provided to the holders of the Notes, and to discuss all such matters with the
executive officers, pertinent employees and representatives of the Credit
Parties; provided, however, that so long as no Event of Default shall have
occurred and be continuing (i) no verification of accuracy of information shall
include contacting the account debtors under any accounts receivable of any
Credit Party and (ii) such visits and inspections shall not (A) disrupt the
normal business operations of any Credit Party, (B) be conducted by more than 5
Persons at any one time or (C) occur more frequently than annually. The holder
of a Note, by accepting the benefits of this subparagraph 5.1(i) agrees to keep
confidential the information obtained from any such audit or inspection in
accordance with the provisions of paragraph 140.
(j) Additional Credit Parties. At the time any Person becomes
a Domestic Subsidiary (other than a Receivables Financing SPC or a Preferred
Stock SPC or as otherwise agreed to by the Collateral Agent) or a "Credit Party"
under the Credit Agreement or becomes a guarantor with respect to any other
Indebtedness of the Company, the Company shall so notify the holders of the
Notes and promptly thereafter (but in any event within 30 days after the date
thereof) shall (a) cause such Person to execute a Guarantor Joinder Agreement in
substantially the same form as Exhibit A to the Sixth Amendment, (b) cause such
Person to execute counterparts of, or a joinder in, the Pledge Agreement and the
Security Agreement in a form reasonably acceptable to the Collateral Agent, (c)
cause all of the Capital Stock of such Person to be delivered to the Collateral
Agent (together with undated stock powers, if applicable, signed in blank) and
pledged to the Collateral Agent, (d) cause all of the Capital Stock of the
Domestic Subsidiaries of such Person and 65% of the voting Capital Stock and all
non-voting capital stock of its First Tier Foreign Subsidiaries to be delivered
to the Collateral Agent (together with undated stock powers, if applicable,
signed in blank) and pledged to the Collateral Agent, and (e) deliver, or cause
such Person to deliver, such other documentation as the Collateral Agent may
reasonably request in connection with the foregoing, including, without
limitation, certified resolutions and other organizational and authorizing
documents of such Person, favorable opinions of counsel to such Person (which
shall cover, among other things, the legality, validity, binding effect and
enforceability of the documentation referred to above) and appropriate UCC-I
financing statements, all in form, content and scope reasonably satisfactory to
the Collateral Agent.
(k) Further Assurances. Each Credit Party will:
(i) At its expense, within 60 days after it acquires any
ownership interest in real property (other than an Excluded Asset) or such
later date as may be agreed upon by the Collateral Agent provided the
Company demonstrates to the Collateral Agent that it is using it best
efforts to deliver such documents, execute, acknowledge, record or
register and deliver to the Collateral Agent, (in a form reasonably
satisfactory to the Agents) such mortgages, deeds of trust or other real
estate security documents as may be required validly to create and perfect
and ensure the priority and enforceability of a Lien upon such interest in
favor of the Collateral Agent for the benefit of the holders of the Notes
and each other beneficiary of the security interests granted in
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the Pledge Agreement and the Security Agreement (to the extent such
beneficiary has a legal or contractual right to the benefit of such Lien);
(ii) To the extent requested by the Collateral Agent, at
its expense, within 60 days after the Sixth Amendment Effective Date as to
each property subject to a Mortgage, deliver to the Collateral Agent such
additional certificates, legal opinions, surveys, policies of title
insurance, loss payee endorsements and other supporting documents related
to the Mortgages, and take such actions (specifically including
slipsheeting pages to the Mortgages to effect modifications suggested by
local counsel and providing for the recording of the Mortgages in the
appropriate recording offices) with respect to perfecting the Liens
granted to the Collateral Agent pursuant to the Mortgages, in each case as
the Collateral Agent may reasonably request. In connection with the
Mortgages, the companies hereto agree that the Mortgages may be
slipsheeted following the Sixth Amendment Effective Date to effect
modifications suggested by local counsel to ensure proper recording of the
Mortgages or for similar purposes;
(iii) At its expense, from time to time execute and
deliver, or cause to be executed and delivered, such additional
instruments, certificates or documents, and take all such actions, as the
Collateral Agent or the Required Holders may reasonably request, for the
purposes of implementing or effectuating the provisions of this Agreement
and the other Credit Documents or creating or perfecting or ensuring the
priority or sufficiency or enforceability or enforcement of a Lien in
favor of the Collateral Agent as security for the Notes upon any or all of
its Property (whether then owned or thereafter acquired), except the
Excluded Assets, or more fully perfecting or renewing any such Lien;
(iv) To the extent requested by the Collateral Agent or
the Required Holders, at its expense and, if the exercise by the
Collateral Agent or any holder of a Note of any power, right, privilege or
remedy pursuant to this Agreement or the other Credit Documents requires
any consent, approval, recording, qualification or authorization of any
Governmental Authority, execute and deliver, or cause the execution and
delivery of, all applications, certifications, instruments and other
documents and papers that may be required from any Credit Party or any of
its Subsidiaries or may reasonably be requested for such governmental
consent, approval, recording, qualification or authorization;
(v) In respect of any Property of any Credit Party that
is an Excluded Asset solely for want of consent from any Governmental
Authority or from one or more of the parties to a contract, use its
commercially reasonable best efforts to obtain such consent in such form
as may reasonably be requested by the Collateral Agent or the Required
Holders; and
(vi) Cause BetzDearborn Canada, Inc. ("BD Canada") and,
to the extent requested by the Collateral Agent, each Subsidiary of BD
Canada and each other Subsidiary of the Company that is domiciled in
Canada, to, at its expense, within 60 days of the Sixth Amendment
Effective Date, execute, acknowledge, record or register
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and deliver to the Collateral Agent such agreements, pledge agreements,
mortgages and other security or supporting documents as are reasonably
requested by the Collateral Agent to validly create and perfect and ensure
the priority and enforceability of a Lien upon such Person's Canadian real
and personal property in favor of the Collateral Agent for the benefit of
the holders of the Notes and each other beneficiary of the security
interests granted in the Pledge Agreement and the Security Agreement (to
the extent such beneficiary has a legal or contractual right to the
benefit of such Lien).
(l) Initial Hybrid Equity Transaction. No later than
January 15, 1999, the Company shall complete the Initial Hybrid Equity
Transaction.
(m) Contributions to the ESOT. As long as the Company Notes
are not outstanding, the Company covenants that it will make contributions to
the ESOT in amounts sufficient, together with other funds legally available
therefor, to enable the Trustee to make payments of principal, Market Premium,
if any, and interest of the ESOT Notes when due. Nothing in this subparagraph
5.1(m) is intended to give any Person, other than holders of the Notes, any
rights.
(n) Senior Note Indenture, Bridge Note Agreement. It will duly
and punctually perform and observe each and all of its covenants and obligations
under the Senior Note Indenture and the Bridge Note Agreement, as in effect on
the Sixth Amendment Effective Date and as waived, amended or otherwise changed
from time to time thereafter with the written consent of the Required Holders,
without giving effect to any other waiver, modification, termination or
replacement thereof.
5.2 Negative Covenants. So long as this Agreement, any of the Notes
or any other Credit Document shall remain in effect or any of the principal of
or interest on any of the Notes or any other amount payable by a Credit Party to
the holder of any Note pursuant to this Agreement, any of the Notes or any other
Credit Document shall remain unpaid, unless waived in writing by the Required
Holders, each Credit Party covenants and agrees that:
(a) Limitation on Liens. It will not, and will not permit any
of the Subsidiaries to, create, incur, assume or suffer to exist any Lien on any
Property owned by such Person (including all Capital Stock of any Subsidiary now
or hereafter owned by such Person) to secure Indebtedness, or acquire any such
Property subject to any conditional sale or title retention agreement, except:
(i) purchase money security arrangements upon Property acquired subsequent to
the date of this Agreement, provided that each such security arrangement does
not exceed 80% of the cost or fair value of the Property acquired and is a lien
only on such Property, or renewals or extensions of any such security
arrangement upon the same Property and not in a greater amount; (ii) Liens on
Property in favor of, or any conditional sale or title retention agreement
relating to any Property with, the United States of America or any State
thereof, or any department, agency or instrumentality or political subdivision
of the United States of America or any such political subdivision, or any agent
or trustee acting on behalf of any of the foregoing, or any agent or trustee
acting on behalf of the holders of obligations issued by any of the foregoing,
to secure partial, progress, advance or other payments pursuant to any
agreement, understanding, contract, lease or statute (including, but not limited
to, agreements, understandings, contracts, leases or statutes that require the
construction of Property and sale thereof to
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any of the named departments, agencies or political divisions, as a part
of the lease or installment purchase of such Property by the Company or
any Subsidiary) or to secure any indebtedness incurred for the purpose of
financing all or any part of the purchase price or the cost of
construction of the Property subject to such Liens; (iii) any reservation
or exception contained in any instrument under which the Company or any
Subsidiary owns or shall acquire any Property and under the terms of which
any vendor, lessor or assignor reserves or excepts an interest in oil, gas
or any other mineral or the proceeds thereof; (iv) any conveyance or
assignment under the terms of which the Company or any Subsidiary conveys
or assigns an interest in oil, gas or any, other mineral or the proceeds
thereof whether or not such conveyance or assignment is in connection with
or substantially simultaneous with an extension of credit to the grantee
or assignee thereunder on a basis providing for repayment of all or
substantially all of such advance out of such proceeds or out of
production from such interest; (v) any lien upon any Property owned by the
Company or any Subsidiary or in which the Company or any Subsidiary owns
an interest to secure payment of its proportionate part of the expenses of
developing or conducting operations for the recovery, storage,
transportation or sale of the mineral resources of such Property (or
Property with which it is unitized); (vi) easements, rights-of-way,
restrictions and other similar encumbrances incurred in the ordinary
course of business which, in the aggregate, are not substantial in amount
and which do not in any case materially detract from the value of the
property subject thereto or materially interfere with the ordinary conduct
of the business of the Company or such Subsidiary; (vii) Liens (not
otherwise permitted hereunder) which secure indebtedness for borrowed
money not exceeding (as to the Company and all Subsidiaries) $10,000,000
in aggregate amount at any time outstanding; (viii) any Liens securing
indebtedness for borrowed money of a wholly-owned Subsidiary of the
Company, to the Company or to another wholly-owned Subsidiary of the
Company; (ix) Liens for taxes not yet due or that are being contested in
good faith and by appropriate proceedings; (x) carriers', warehousemen's,
mechanic's, materialmen's, repairmen's or other like Liens arising in the
ordinary course of business; (xi) pledges and deposits made in the
ordinary course of business in compliance with workmen's compensation,
unemployment insurance and other social security laws or regulations;
(xii) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of
business; (xiii) Liens in favor of customs revenue authorities arising as
a matter of law to secure payment of customs duties; (xiv) any extension,
renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part of any lien referred to in the
foregoing clauses (i) to (v), inclusive, provided that the obligation
secured thereby shall not exceed the obligation so secured at the time of
such extension, renewal or replacement, and that such extension, renewal
or replacement shall be limited to that portion of the Property which
secured the lien so extended, renewed or replaced (plus improvements on
such Property); (xv) Liens in favor of the Collateral Agent pursuant to
the Collateral Documents; and (xvi) Liens (not otherwise permitted
hereunder) which are set forth on Schedule XI attached to the Sixth
Amendment.
(b) Limitations on Mergers, Asset Sales and Asset
Purchases.
(i) Limitation on Mergers and Liquidations. It will not,
and will not permit any of its Subsidiaries to, merge, consolidate,
amalgamate or enter into any similar combination with any other Person or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution) except:
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(A) Any Credit Party or any of its Subsidiaries
may merge or otherwise combine with any other Person, provided that (I)
such Credit Party or its Subsidiary, as the case may be, is the entity
surviving such transaction, (II) immediately prior to and after giving
effect on a Pro Forma Basis to such transaction, no Default or Event of
Default exists or would exist and (III) the Board of Directors of such
Person has approved such transaction;
(B) Any Credit Party may merge or otherwise
combine with any other Credit Party, provided that if the Company is a
party to such a transaction, the Company shall be the survivor;
(C) Any wholly-owned Subsidiary of a Credit
Party (which Subsidiary is not itself a Credit Party) may merge or
otherwise combine with a Credit Party or any other wholly-owned Subsidiary
of a Credit Party; and
(D) Any wholly-owned Subsidiary of a Credit
Party may liquidate, wind-up or dissolve itself (I) into a Credit Party or
any wholly-owned Subsidiary of a Credit Party or (II) otherwise in a
transaction in which the assets of such dissolving Subsidiary become owned
by a wholly-owned Subsidiary of a Credit Party.
(ii) Limitations on Asset Sales and Asset Purchases. It
will not, and will not permit any of its Subsidiaries to, sell, lease or
otherwise dispose of any of its assets or purchase another Person or the
assets of another Person in a transaction or series of related
transactions unless:
(A) immediately prior to and after giving
effect on a Pro Forma Basis to such transaction, no Default or Event of
Default exists or would exist;
(B) if such transaction is a purchase, the
cash purchase price of such purchase along with the cash purchase prices
of all other such purchases consummated pursuant to this subparagraph
2.5(b)(ii)(B) in each fiscal year does not exceed $25,000,000; and
(C) if such transaction a sale, lease or other
disposition of assets, (x) such transaction is not an Asset Disposition,
(y) such transaction is an Asset Disposition of the Resins Division or
FiberVision 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.
(iii) Application of Proceeds. In connection with any
Asset Disposition consummated while the Notes are outstanding (including
for such purpose the issuance of direct or indirect equity in FiberVisions
or the Resins Division or their respective assets), 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
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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 (A) make Eligible Reinvestments or (B) prepay the
Loans under the Credit Agreement in the manner specified in subparagraph
5.2(n).
(iv) Release of Guarantors and Collateral. Upon
the sale of any Subsidiary or Collateral permitted by this subparagraph
5.2(b), the Credit Parties may (to the extent applicable) request the
Collateral Agent (and the Collateral Agent is authorized, on behalf of the
holders of the Notes) to deliver to the Credit Parties, upon the Credit
Parties' request and at the Credit Parties' expense, such documentation as
is reasonably necessary to evidence the release of the Collateral Agent's
security interest, if any, in such Collateral, including, without
limitation, amendments or terminations of UCC financing statements, if
any, the return of stock certificates, if any, the release of mortgages,
if any, and the release of such Subsidiary from all of its obligations, if
any, under the Credit Documents including the release of such Subsidiary,
if it is a Guarantor hereunder from its obligations under paragraph 6
hereof. Upon the release of a Guarantor the pledges and grants of security
interests to the extent given by such Guarantor pursuant to the Pledge
Agreement, the Security Agreement and the Mortgages, and the covenants and
other agreements contained herein and therein, shall no longer be
effective as to such Guarantor and shall otherwise cease and be of no
further force and effect as to such Guarantor.
(c) Limitations on Sale/Leaseback Transactions. It will not,
and will not permit any of the Subsidiaries to, sell or transfer any
manufacturing Properties to anyone (other than the Company or to a Subsidiary in
which the Company owns 50% or more of the voting stock) with the intention of
taking back a lease of such Property or any similar Property, except in
connection with a lease for a temporary period during or at the end of which it
is intended that the use by the Company or its Subsidiary of such Property will
be discontinued.
(d) Financial Covenants.
(i) Leverage Ratio. It will not permit, as of the
day of any fiscal quarter, the Leverage Ratio to exceed the ratio set
forth below for the applicable period:
Period Maximum Leverage Ratio
------ ----------------------
October 1, 2000 through September 30, 2001 4.75 to 1.0
October 1, 2001 through March 31, 2002 4.50 to 1.0
April 1, 2002 through December 31, 2002 4.25 to 1.0
January 1, 2003 through December 31, 2005 3.75 to 1.0
January 1, 2006 and thereafter 3.00 to 1.0
(ii) Minimum Net Worth. It will not permit at any time
Consolidated Net Worth to be less than $839,900,000, increased or (in the
case of clause (z) below only) decreased, as applicable, on a cumulative
basis as of the last day of each
11
fiscal quarter (commencing on September 30, 2000) by an amount equal to
the sum of (x) 60% of Consolidated Net Income, if positive, for such
fiscal quarter, (y) 80% of any Equity Issuances (including an issuance of
hybrid equity securities (e.g., trust preferred capital securities), but
only if such issuance increases Consolidated Net Worth) commenced in such
fiscal quarter and (z) the amount of any gain or loss in Consolidated Net
Worth arising from any Asset Disposition consummated in such fiscal
quarter.
(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:
Period Maximum Interest Coverage Ratio
------ -------------------------------
October 1, 2000 through December 31, 2001 1.75 to 1.0
January 1, 2002 through December 31, 2005 2.00 to 1.0
January 1, 2006 through December 31, 2006 2.50 to 1.0
January 1, 2007 through December 31, 2007 2.75 to 1.0
January 1, 2008 and thereafter 3.00 to 1.0
(e) Limitations on Transactions with Affiliates. It will not,
and will not permit any of its Subsidiaries to, enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, with any Affiliate unless such transaction is
(a) otherwise permitted under this Agreement, (b) in the ordinary course of its
or such Subsidiary's business (or is a transaction among wholly-owned
Subsidiaries of the Company) and (c) upon fair and reasonable terms no less
favorable to it or such Subsidiary, as the case may be, than it would obtain in
a comparable arm's length transaction with a Person which is not an Affiliate;
provided that it shall not be a breach of this covenant to the extent that the
failure of the Company or any of its Subsidiaries to comply with the foregoing
would not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect.
(f) Limitations on Indebtedness. It will not nor will it
permit any of the Subsidiaries to, contract, create, incur, assume or permit to
exist any Indebtedness, except:
(i) Indebtedness arising under this Agreement and the
Notes and the other Credit Documents and under the Credit Agreement and
the other Credit Documents (as defined in the Credit Agreement);
(ii) Indebtedness of the Company and its Subsidiaries
set forth in Schedule IV attached to the Sixth Amendment (but not
including any renewals, refinancings or extensions thereof);
(iii) obligations of the Company and its Subsidiaries in
respect of Hedging Agreements entered into in order to manage existing or
anticipated interest rate or exchange rate and not for speculative
purposes;
(iv) obligations of the Company and its Subsidiaries in
connection with any Permitted Receivables Financing, to the extent such
obligations constitute Indebtedness;
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(v) intercompany Indebtedness owing by a Credit
Party to another Credit Party;
(vi) the Senior Notes and a guaranty of the Senior Notes
on the terms set forth in the Senior Note Indenture, if given by a
Permitted Guarantor,
(vii) in addition to the Indebtedness otherwise
permitted by this subparagraph 5.2(f), other purchase money Indebtedness
hereafter incurred by the Company and its Subsidiaries; provided that the
aggregate outstanding principal amount of such Indebtedness shall not
exceed $25,000,000 at any time;
(viii) the Bridge Notes and any refinancings,
refundings, renewals or replacements thereof (so long as the terms of such
refinancings, renewals or replacements do not provide for maturities or
amortization payments on or prior to November 15, 2007) and a guaranty of
the Bridge Notes by Permitted Guarantors on a pari passu basis with the
guaranties of such Guarantors hereunder and any refinancings, refundings
renewals or replacements thereof (on similar terms); and
(ix) one or more series of subordinated debt securities
issued by the Company for aggregate Net Cash Proceeds not exceeding
$250,000,000, on terms (including subordination terms) reasonably
consistent with those customary in the United States capital markets for
similar high yield subordinated debt instruments, if the Net Cash Proceeds
are applied to repay the Loans as required by subsection 2.6(b) of the
Credit Agreement and to make an offer to prepay the Notes pursuant to
subparagraph 5.2(n), and guaranties of such securities given by a
Permitted Guarantor on such terms.
(g) Fiscal Year; Organizational Documents. It will not (i)
without the prior written consent of the Required Holders, change its fiscal
year or make any material change, or permit any of its Subsidiaries to make any
material change, to its accounting treatment and reporting practices under GAAP
(except as required by GAAP; notwithstanding the foregoing, a Subsidiary that is
not a Credit Party may change its fiscal year to coincide with the fiscal year
of the Company at any time without the consent of the Required Holders) or (ii)
without the prior written consent of the Required Holders, amend, modify or
change its articles of incorporation (or corporate charter or other similar
organizational document) or bylaws (or other similar document).
(h) Limitation on Restricted Actions. It will not, and will
not permit any of the Subsidiaries (other than a Receivables Financing SPC in
connection with a Permitted Receivables Financing) to, directly or indirectly,
create or otherwise cause, incur, assume, suffer or permit to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any such Person to (i) pay dividends or make any other distribution on any of
such Person's capital stock, (ii) pay any Indebtedness owed to the Company or
any other Credit Party, (iii) make loans or advances to any other Credit Party
or (iv) transfer any of its property to any other Credit Party, except for
encumbrances or restrictions existing under or by reason of (A) customary
non-assignment or net worth provisions in any lease governing a leasehold
interest, (B) any agreement or other instrument of a Person existing at the time
it becomes a Subsidiary of the Borrower, provided that such encumbrance or
restriction is not applicable to any other
13
Person, or any property of any other Person, other than such Person
becoming a Subsidiary of the Borrower and was not entered into in
contemplation of such Person becoming a Subsidiary of the Borrower, (C)
this Agreement and the Notes, (D) the other Credit Documents and the
Credit Agreement and the other Credit Documents (as defined in the Credit
Agreement), (E) the Senior Note Indenture and (F) the Bridge Note
Agreement.
(i) No Other Negative Pledges. It will not, and will not
permit any of the Subsidiaries to, enter into, assume or become subject to any
agreement prohibiting or otherwise restricting the creation or assumption of any
Lien upon its properties or assets, whether now owned or hereafter acquired, or
requiring the grant of any security for such obligation if security is given for
some other obligation, except pursuant to (A) the documents executed in
connection with any Permitted Receivables Financing (but only to the extent that
the related prohibitions against other encumbrances pertain to the applicable
transferred assets actually sold, contributed, financed or otherwise conveyed or
pledged pursuant to such Permitted Receivables Financing), (B) this Agreement
and the other Credit Documents, (C) the Credit Agreement and the other Credit
Documents (as defined in the Credit Agreement), (D) the Senior Note Indenture
and (E) the Bridge Note Agreement.
(j) Restricted Payments. The Company will not, nor will it
permit any Subsidiary to, directly or indirectly, declare, order, make or set
apart any sum for or pay any Restricted Payment, except (a) to make dividends
payable solely in the same class of Capital Stock of each Person or the common
stock of each Person, (b) to make dividends or other distributions payable to
any Credit Party and (c) to make scheduled dividend payments of approximately
$51 million per year on the 9.42% Junior Subordinated Deferrable Interest
Debentures due March 2029 of Hercules Trust I and the 6.5% CRESTS Units of
Hercules Trust II outstanding as of the Sixth Amendment Effective Date.
(k) Limitation on Prepayment or Redemption of
Indebtedness or Capital Stock. The Company will not, nor will it permit any
Subsidiary to,
(i) amend, modify or refinance (or permit the amendment,
modification or refinancing of) any Indebtedness (other than Indebtedness
evidenced by this Agreement and the Notes issued pursuant hereto and
Indebtedness permitted under subsection 5.2(f)(viii)) if such amendment,
modification or refinancing would add or change any terms in a manner that
is more adverse to the issuer of such Indebtedness, or shorten the final
maturity or average life to maturity or require any payment to be made
sooner than originally scheduled or increase the interest rate applicable
thereto or change any subordination provision thereof, or
(ii) make (or give any notice with respect thereto) any
voluntary or optional payment or prepayment or redemption or acquisition
for value of (including, without limitation, by way of depositing money or
securities with the with respect thereto before due for the purpose of
paying when due) any Indebtedness (other than Indebtedness evidenced by
this Agreement and the Notes issued pursuant hereto, Indebtedness that is
being refinanced in accordance with clause (i) above and other than any
payment, prepayment or redemption of the Bridge Notes with the proceeds of
any
14
Indebtedness or equity securities issued by the Company or any of its
Consolidated Subsidiaries) or any Capital Stock.
(l) Advances, Investments and Loans. The Company will not, nor
will it permit any Subsidiary to, lend money or extend credit or make advances
to any Person, or purchase or acquire any stock, obligations or securities of,
or any other interest in, or make any capital contribution to, any Person except
for Permitted Investments.
(m) Incorporated Provisions. The Company will not amend or
supplement the Credit Agreement (or any agreement replacing the Credit Agreement
in whole or in part) in any manner, or enter into, amend or supplement any other
agreement relating to Indebtedness, if the effect thereof would be to adopt,
amend or add covenants or defaults, the effect of which are more restrictive on
the Company and its Subsidiaries than are the covenants and defaults contained
herein, unless the Company shall execute and deliver to the holders of the Notes
an instrument in writing supplementing this Agreement and extending the benefit
of such Additional Provisions to the holders of the Notes. Once incorporated in
this Agreement, no waiver or consent under or amendment or termination of, the
Credit Agreement (or any such other agreement), shall have any effect on the
Additional Provisions as incorporated herein.
(n) Prepayments under Credit Agreement; Offer to Prepay Notes.
The Company will not amend, restate or otherwise change or supplement the
provisions of subsection 2.6(b)(ii), 2.6(b)(iii) or 2.6(b)(iv) of the Credit
Agreement (as in effect on the Sixth Amendment Effective Date after giving
effect to the Bank Third Amendment), other than to terminate the same and it
will apply any Net Cash Proceeds from an Asset Disposition, 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) or 2.6(b)(iv) (herein called a "Bank
Prepayment"). If the Company shall elect or otherwise be required to apply any
such Net Cash Proceeds to make a Bank Prepayment, the Company shall give written
notice thereof to the holders of the Notes not later than 30 days prior thereto
and in that notice shall make (or shall cause the ESOT to make) an offer to
apply a percentage of such Net Cash Proceeds to the prepayment of a principal
amount of the Notes (at 100% of the principal amount thereof plus accrued
interest thereon and the Market Premium, if any, with respect to such Notes),
pro rata among the holders thereof, which percentage shall correspond to a
fraction, the numerator of which shall be the amount of all Note Obligations
outstanding at the time of such application and the denominator of which shall
be the sum of all Note Obligations and all Bank Obligations at the time
outstanding. If the Company (or the ESOT) shall make an offer to prepay Notes as
aforesaid, it will specify the date of prepayment (which shall be the same day
as the prepayment of the Loan under the Credit Agreement) and will prepay the
Notes of those holders which shall have accepted such offer by notice given to
the Company at least five (5) days prior to the date of prepayment.
Section 5.3 Incorporation of Covenants from Senior Note Indenture.
Reference is hereby made to the Senior Note Indenture and the covenants
contained in Article 4_ of the Senior Note Indenture, as in effect as of the
Sixth Amendment Effective Date or as amended or modified after giving effect to
any subsequent amendment to the Senior Note Indenture which the Required Holders
have approved in a writing referring to this Agreement (hereinafter referred
15
to as the "Incorporated Covenants"). The Credit Parties agree that the
Incorporated Covenants (and all other relevant provisions of the Senior Note
Indenture, as in effect as of the Sixth Amendment Effective Date or as amended
or modified after giving effect to any subsequent amendment to the Senior Note
Indenture which the Required Holders have approved in a writing referring to
this Agreement, related thereto, including without limitation the defined terms
and other provisions contained in Article 4 and Section 1.01 thereof which are
used in the Incorporated Covenants, hereinafter referred to as the "Additional
Incorporated Terms") are hereby incorporated by reference into this Agreement to
the same extent and with the same effect as if set forth fully herein and shall
inure to the benefit of the holders of the Notes, without giving effect to any
waiver, amendment, modification or replacement of the Senior Note Indenture or
any term or provision of the Incorporated Covenants occurring subsequent to the
Sixth Amendment Effective Date, except to the extent otherwise specifically
provided in the following provisions of this paragraph. In the event a waiver is
granted under the Senior Note Indenture or an amendment or modification is
executed with respect to the Senior Note Indenture, and such waiver, amendment
and/or modification affects the Incorporated Covenants or the Additional
Incorporated Terms, then such waiver, amendment or modification shall be
effective with respect to the Incorporated Covenants and the Additional
Incorporated Terms as incorporated by reference into this Agreement only if
consented to in writing by the Required Holders. In the event of any replacement
of the Senior Note Indenture with a similar indenture (the "New Indenture") the
covenants and additional terms contained in the New Indenture which correspond
to the covenants contained in Article 4 and such additional terms contained in
Article 4 and Section 1.01 (each of the foregoing contained in the Senior Note
Indenture) shall become the Incorporated Covenants and the Additional
Incorporated Terms only if consented to in writing by the Required Holders and,
if such consent is not granted or if the Senior Note Indenture is terminated and
not replaced, then the covenants contained in Article 4 and such additional
terms contained in Article 4 and Section 1.01 (each of the foregoing contained
in the Senior Note Indenture (together with any modifications or amendments
approved in accordance with this paragraph)) shall continue to be the
Incorporated Covenants and the Additional Incorporated Terms hereunder. For
purposes of the incorporation of the Incorporated Covenants pursuant to this
paragraph 5.3, all references in the Incorporated Covenants to the "Trustee"
shall be deemed to refer to the holders of the Notes.
Section 1.2. (Paragraph 6) Paragraph 6 of the Note Agreement is hereby
amended as follows:
(a) Paragraph 6.6 of the Note Agreement is amended by deleting
the phrase "during the Collateral Period" from such paragraph in both places
where it appears.
(b) Paragraph 6.9 of the Note Agreement is hereby deleted
in its entirety.
Section 1.3. (Paragraph 9A) Paragraph 9A of the Note Agreement is hereby
amended in its entirety to read as follows:
9A. DEFAULT; ACCELERATION. If any of the following events shall
occur and be continuing for any reason whatsoever (and whether such occurrence
shall be voluntary or involuntary or come about or be effected by operation of
law or otherwise):
16
(a) default in the payment of
(i) any principal (including any Required Installment
Payment) of or Market Premium on any Note when the same shall become due,
whether at maturity or at the times specified in paragraph 4A or 4B or
otherwise, either by the terms thereof or otherwise as herein provided, or
(ii) any interest on any Note when the same shall become
due and such default shall continue for more than 3 days, or
(iii) any other amount payable by any Credit Party
hereunder or under any other Credit Document when the same shall become
due and such default shall continue for more than 3 days; or
(b) the Company states or otherwise claims in writing that any
of its obligations under paragraph 8 is not enforceable in accordance with its
terms; or
(c) default in the performance or breach of any covenant of
the Company or the ESOT contained in (i) subparagraph 5.1 (h) or (m), (ii)
paragraph 7 of this Agreement and continuance of such default or breach for a
period of 5 Business Days or (iii) paragraph 8; or
(d) any Credit Party shall (i) fail to perform or observe any
covenant contained in subparagraph 5.1 (e), (h), (i) or (j) or subparagraph 5.2
hereof or (ii) fail to perform or observe any covenant contained in
subparagraphs 5.1(a)(i)(A), (B) or (H) or subparagraph 5.1(a)(ii) hereof and
such failure referred to in this subparagraph 9A(d) shall continue unremedied
for a period of five (5) days after the earlier of a Responsible Officer of the
Company becoming aware of such failure or written notice specifying such failure
and stating that such notice is a "Notice of Default" hereunder is given, by
registered or certified mail or by courier, to the Company on behalf of the
Credit Parties by the holder of any Note; or
(e) any Credit Party shall fail to perform or observe (i) any
term, covenant or agreement contained herein or in any Note (other than those
specified in clauses (a) through (d) above) and such failure shall continue
unremedied for a period of thirty (30) days after the earlier of a Responsible
Officer of the Company becoming aware of such failure or written notice
specifying such failure and stating that such notice is a "Notice of Default"
hereunder is given, by registered or certified mail or by courier, to the
Company on behalf of the Credit Parties by the holder of any Note or (ii) any
term, covenant or agreement contained in any other Credit Document and such
failure shall continue unremedied beyond any applicable grace or cure period; or
(f) any representation or warranty made or deemed made by the
ESOT or a Credit Party pursuant to this Agreement or in any other Credit
Document or in any other document or certificate delivered pursuant hereto or in
connection with any amendment hereof or any other Credit Document or any consent
or waiver or thereunder shall prove to have been incorrect or misleading in any
material respect as of the date made or deemed made; or
17
(g) the Company or any Subsidiary shall fail to pay at
maturity, or within any applicable period of grace, any Indebtedness (other than
the Indebtedness referred to in clause (a) above) or any obligations under
Hedging Agreements, in each case with an outstanding principal or notional
amount in excess of S25,000,000, or fail to observe or perform any term,
covenant or agreement contained in any agreement by which it is bound governing,
evidencing or securing Indebtedness or any obligations under Hedging Agreements,
in each case with an outstanding principal or notional amount in excess of
$25,000,000 for such period of time as would permit, or would have permitted (
assuming the giving of appropriate notice if required) the holder or holders
thereof or of any obligations issued thereunder (or a trustee or agent on behalf
of such holder or holders), to accelerate the maturity thereof, or of any such
obligation; provided, however, that if any such failure occurs as to any Hedging
Agreement or as to any Indebtedness other than Senior Notes and the Bridge Notes
and if such failure shall be cured by the Company or such Subsidiary or waived
by the requisite holders of the defaulted obligations, then the default
hereunder by reason of such failure shall be deemed to have been cured and
waived by the Required Holders unless prior thereto the Notes shall have been
declared to be or shall have become immediately due and payable hereunder; or
(h) the Company or any Subsidiary shall (i) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
administrator, custodian, trustee or liquidator of itself or of all or a
substantial part of its property, (ii) admit in writing its inability, or be
generally unable, to pay its debts as they become due, (iii) make a general
assignment for the benefit of its creditors, (iv) commence a voluntary case
under the Federal Bankruptcy Code (as now or hereafter in effect), (v) be
adjudicated as bankrupt or insolvent, (vi) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, administration,
reorganization, winding-up or composition or adjustment of debts, (vii) fail to
controvert in a timely and appropriate manner, or acquiesce in writing to, any
petition filed against it in an involuntary case under such Bankruptcy Code, or
(viii) be authorized by its Board of Directors to take any of the foregoing
actions; or
(i) a proceeding or case shall be commenced, without the
application or consent of the Company, any other Credit Party or any Material
Subsidiary, in any court of competent jurisdiction, seeking (i) the liquidation,
administration, reorganization, dissolution or winding-up, or the composition or
readjustment of debts, of the Company, any other Credit Party or any Material
Subsidiary, (ii) the appointment of a trustee, receiver, administrator,
custodian, liquidator or the like of the Company, any other Credit Party or any
Material Subsidiary, or of all or any substantial part of its assets or (iii)
similar relief in respect of the Company, any other Credit Party or any Material
Subsidiary, under any law relating to bankruptcy, insolvency, administration,
reorganization, winding-up or composition or adjustment of debts, and such
proceeding or case shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, in any such case for a period of sixty (60) consecutive
days, or an order for relief against the Company, any other Credit Party or any
Material Subsidiary, shall be entered in an involuntary case under the Federal
Bankruptcy Code (as now or hereafter in effect); or
(j) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any ERISA Plan, (ii) any "accumulated funding deficiency" (as defined
in Section 302 of ERISA), whether or not
18
waived, shall exist with respect to an ERISA Plan or any Lien in favor of the
PBGC or an ERISA Plan shall arise on the assets of the Company, any Subsidiary
or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to result
in the termination of such ERISA Plan for purposes of Title IV of ERISA, (iv)
any Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v)
the Company, any Subsidiary or any Commonly Controlled Entity shall, or in the
reasonable opinion of the Required Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or exist
with respect to an ERISA Plan; and in each case in clauses (i) through (vi)
above, such event or condition, together with all other such events or
conditions, if any, could reasonably be expected to have a Material Adverse
Effect; or
(k) one or more judgments or decrees shall be entered against
the Company or any Subsidiary, involving in the aggregate a liability (not paid
or fifty covered by insurance) of $50,000,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending appeal
within 60 days from the entry thereof; or
(l) this Agreement, any of the Notes or any other Credit
Document shall cease, for any reason, to be in full force and effect, or any
Credit Party shall so assert or any Credit Party shall disaffirm or deny any of
its obligations thereunder; or any Collateral Document shall fail to create or
constitute a legal, valid, enforceable and perfected Lien in favor of the
Collateral Agent, as security for the principal (including any Required
Installment Payment) of and Market Premium and interest on the Notes and other
obligations of the Credit Parties under the Credit Documents, upon a material
portion of the Collateral described therein as subject thereto or encumbered
thereby, or any Credit Party shall so assert; or
(m) any Change of Control shall occur;
(n) if ESOT Notes are outstanding, any order, judgment or
decree is entered in any proceeding by a court of competent jurisdiction
decreeing that the Plan, the ESOT or the ESOT Transaction has not been properly
established or consummated, as me case may be (other than as specified in clause
(b)(ii) of paragraph 4(A), in any material respect, and such order, judgment or
decree remains unstayed and in effect for more than 60 days of the time such
order, judgment or decree first becomes appealable;
then (a) if such event is an Event of Default specified in clause (h) or (i) of
this paragraph 9A with respect to the Company, all of the Notes at the time
outstanding shall automatically become immediately due and payable at par
together with interest accrued thereon, and together with the Market Premium, if
any, with respect to each Note, without presentment, demand, protest or notice
of any kind, all of which are hereby waived by the Company and the ESOT, and (b)
if such event is any other continuing Event of Default, the holder or holders of
at least 25% of the aggregate principal amount of the Notes at the time
outstanding may at its or their option, by notice in writing to the Company and
the ESOT, declare all of the Notes to be, and all of the Notes shall thereupon
be and become, immediately due and payable together with interest
19
accrued thereon and together with the Market Premium, if any, with respect to
each Note, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Company and the ESOT and the Company shall
give notice in writing of such declaration to the other holders, provided that
(x) if such event is a continuing Event of Default specified in sub-clause (i)
or (ii) of clause (a) of this paragraph 9A in respect of any Note, any holder of
Notes may, at its option, by notice in writing to the Company and the ESOT,
declare all of the Notes held by such holder to be, and all of such Notes shall
thereupon be and become, immediately due and payable together with interest
accrued thereon and together with the Market Premium, if any, with respect to
each such Note, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Company and the ESOT, (y) if any
holder of Notes shall have declared all of the Notes held by such holder to be
due and payable pursuant to clause (x) of this proviso, then the Company shall
give notice in writing of such declaration to the other holders of Notes and any
such other holder may at any time thereafter and until the later of (A) the
expiration of 60 days after such other holder shall have received notice from
the Company of such declaration and (B) the date on which all Events of Default
and Defaults have been cured or waived pursuant to paragraph 14C, by notice in
writing to the Company and the ESOT, declare all of the Notes held by such other
holder to be immediately due and payable, together with interest accrued thereon
and together with the Market Premium, if any, with respect to each such Note
without presentment, demand, protest or any other notice of any kind, all of
which are hereby waived by the Company and the ESOT. Nothing in this Agreement
shall permit (i) a transfer of assets of the ESOT to any Person in excess of the
amount permitted under Treasury Regulation Sec. 54.4975-7(b)(6), or (ii) if the
holder of any Note is a disqualified person within the meaning of the Code or
the Regulations thereunder, the transfer of assets of the ESOT to such holder
except upon the failure of the ESOT to make payment of regularly scheduled
payments of principal and interest on such Notes, and then only to the extent of
such failure.
Section 1.4. (Paragraph 12A) The defined terms and other provisions added
to paragraph 12A of the Note Agreement by Section 2.4(b) of the Third Amendment
are hereby amended and restated in their entirety to read as follows:
"Acquisition": the acquisition by the Company and/or any of its
Subsidiaries of the Capital Stock of BetzDearborn pursuant to the Merger
Agreement
"Additional Credit Party": each Person that becomes a Guarantor after
the date of the Third Amendment as provided in such 5.1(j).
"Additional Interest": at any time the annual rate of interest
determined by reference to Schedule I attached to the Sixth Amendment.
"Affiliate": as to any specified Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
"control" of a specified Person means the power, directly or indirectly, either
to (a) vote 20% or more of the securities having ordinary voting power for the
election of directors of such Person or (b) direct or cause the direction of the
management and policies of such Person whether through the ownership of voting
securities, by contract or otherwise.
20
"Agreement": this Agreement, as amended, supplemented or modified from
time to time.
"Asset Disposition": the disposition of any or all of the assets
(including without limitation the Capital Stock of a Subsidiary) of the Company
or any of its Subsidiaries whether by sale, lease, transfer or otherwise
(including a disposition pursuant to any casualty or condemnation event, but
excluding a disposition pursuant to a Permitted Receivables Financing). The term
"Asset Disposition" shall not include (i) the sale of inventory in the ordinary
course of business, (ii) the sale or disposition of machinery and equipment no
longer used or useful in the conduct of such Person's business, (iii) any Equity
Issuance by the Company or (iv) intercompany transfers from a Credit Party or a
wholly-owned Subsidiary of a Credit Party to a Credit Party.
"Attributed Principal Amount": on any day, with respect to any Permitted
Receivables Financing entered into by the Company or any of its Consolidated
Subsidiaries, the aggregate amount (with respect to any such transaction, the
"Invested Amount') paid to, or borrowed by, such Person as of such date under
such Permitted Receivables Financing, minus the aggregate amount received by the
applicable Receivables Financier (as defined in the definition of "Permitted
Receivables Financing") and applied to the reduction of the Invested Amount
under such Permitted Receivables Financing.
"Bank Documents": the Credit Agreement, the Notes issued under the Credit
Agreement, any Borrower Joinder Agreements(as defined in the Credit Agreement)
or Guarantor Joinder Agreements (as defined in the Credit Agreement), the
Collateral Documents (as defined in the Credit Agreement), any fee letters, any
LOC Documents(as defined in the Credit Agreement), any BA Documents(as defined
in the Credit Agreement) and all other related agreements and documents issued,
delivered or executed hereunder or thereunder or pursuant hereto or thereto (in
each case, as the same may be amended, modified, restated, supplemented,
extended, renewed or replaced from time to time).
"Bank Obligations": all payment obligations of the Borrowers (as defined
in the Credit Agreement) and the Guarantors (as defined in the Credit Agreement)
under the Bank Documents owing to the Agents and the Lenders parties to the
Credit Agreement, whenever arising, including without limitation, amounts in
respect of principal (which shall not, however, exceed S3,650,000,000),
interest, fees and "breakage costs" and other expense reimbursement obligations.
"Bank Third Amendment" means the Third Amendment to Amended and Restated
Credit Agreement, dated as of November 14, 2000, providing for the amendment and
restatement Of the Credit Agreement.
"BetzDearborn": BetzDearborn, Inc., a Pennsylvania corporation.
"Bridge Notes": the Senior Notes due 2001, if any, issued pursuant to
the Bridge
Note Purchase Agreement, as the same may be extended on the first
anniversary of the issuance thereof.
"Bridge Note Agreement": if any, the
Note Purchase Agreement among the
Company, the guarantors party thereto, and the purchasers party thereto,
executed upon a failure of the
21
Senior Notes to be issued, as the same may be amended, supplemented or otherwise
modified from time to time.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in Philadelphia, Pennsylvania or
New York City are
authorized or required by law to close.
"Capital Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"Cash Equivalents": (i) securities issued or directly and fully guaranteed
or insured by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United States of America
is pledged in support thereof) having maturities of not more than twelve months
from the date of acquisition ("Government Obligations"), (ii) U.S. dollar
denominated (or foreign currency fully hedged) time deposits, certificates of
deposit, Eurodollar time deposits and Eurodollar certificates of deposits of (y)
any domestic commercial bank of recognized standing having capital and surplus
in excess of S250,000,000 or (z) any bank whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or from Xxxxx'x is at
least P-1 or the equivalent thereof (any such bank being an "Approved Bank"), in
each case with maturities of not more than 364 days from the date of
acquisition, (iii) commercial paper and variable or fixed rate notes issued by
any Approved Bank (or by the parent company thereof) or any variable rate notes
issued by, or guaranteed by any domestic corporation rated A-1 (or the
equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within one year of the date of acquisition, (iv)
repurchase agreements with a bank or trust company (including a Lender) or a
recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of America, (v) obligations of any state of the United States or any
political subdivision thereof for the payment of the principal and redemption
price of and interest on which there shall have been irrevocably deposited
Government Obligations maturing as to principal and interest at times and in
amounts sufficient to provide such payment, and (vi) auction preferred stock
rated in the highest short-term credit rating category by S&P or Moody's.
"Change of Control": Any of (i) any "person" or "group" (within the
meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934)
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934) of more than 30% of then outstanding voting stock of the
Company, or (ii) the Company shall merge or consolidate with any Person other
than in a transaction permitted under subsection 5.2(b), or (iii) the first day
on which a majority of the members of the board of directors of the Company are
not Continuing Directors; or (iv) any Asset Disposition shall be made that (of
itself or when combined with any or all other Asset Dispositions) constitutes a
sale of all or substantially all of the assets of the
22
Company and its Consolidated Subsidiaries, taken as a whole; or (v) any event
shall occur that constitutes a "Change of Control" (as defined in the Senior
Note Indenture); or (vi) any event shall occur that constitutes a "Change of
Control" (as defined in the Bridge Note Agreement); or (vii) any event shall
occur that constitutes a "Change of Control" (as defined in the Credit
Agreement) ; or (viii) any event shall occur that requires the Company or any
Subsidiary to repay, redeem, or repurchase (or to offer to repay, redeem or
repurchase) any Indebtedness outstanding in a principal amount in excess of
$50,000,000 by reason of any change of ownership or control affecting the
Company or such Subsidiary.
"Closing Date": October 15, 1998.
"Code": the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations issued thereunder as in effect from time
to time.
"Collateral": all Property now owned or hereafter acquired by any and
all of the Credit Parties, upon which a Lien is required, intended or
purported to be granted pursuant to this Agreement or any of the Collateral
Documents.
"Collateral Agent": Bank of America, N.A., formerly known as
NationsBank, N.A. (or any successor thereto) or any successor agent appointed
pursuant to the provisions of the Intercreditor Agreement, dated as of
December 31, 1998, among Bank of America, N.A., formerly NationsBank, NA. (as
Agent under the Credit Agreement and as Collateral Agent) and The Prudential
Insurance Company of America.
"Collateral Documents": the Pledge Agreement, the Security Agreement and
all joinders therein, all Mortgages at any time executed and delivered by any
Credit Party, any and all other pledge or security agreements or collateral
assignments executed and delivered by any of the Credit Parties in favor of the
Collateral Agent, granting the Collateral Agent a Lien for the benefit of the
holders of the Notes and any other beneficiaries described therein, to secure
obligations of the Credit Parties under the Credit Documents and other
obligations that were outstanding on the Sixth Amendment Effective Date and were
then entitled (after giving effect to any amendments thereto as of such Sixth
Amendment Effective Date), under the agreement governing such obligations, to
the benefit of such Lien, together (in each case) with all other documents
executed and delivered in connection therewith, including UCC financing
statements, each as amended, modified, supplemented, extended, renewed or
replaced from time to time.
"Commonly Controlled Entity": an entity, whether or not incorporated,
which is under common control with a Credit Party within the meaning of Section
4001 of ERISA or is part of a group which includes a Credit Party and which is
treated as a single employer under Section 414 of the Code.
"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 and
(e) 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
23
(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.
"Consolidated Interest Expense": for any fiscal period, the amount of
interest expense of the Company and its Subsidiaries for such period, determined
on a consolidated basis in accordance with GAAP, including imputed interest
expense paid in respect of Capital Lease obligations and any dividends paid on
hybrid equity securities that are tax deductible (such as dividends on trust
preferred capital securities) (but, with respect to such dividends on hybrid
equity securities, without duplication to the extent a comparable amount is
taken by the Company as interest expense on the interest paid on the related
subordinated debt to the Preferred Stock SPC).
"Consolidated Net Income": for any fiscal period, net income of the
Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Worth": as of the end of the most recently ended
calendar month, the sum of (i) all items that would be included under
stockholders' equity on a consolidated balance sheet of the Company and its
Consolidated Subsidiaries plus (ii) insurance reserves. Consolidated Net Worth
shall be determined in accordance with generally accepted accounting principles
substantially the same as those used by the Company in preparing the financial
statements referred to in subparagraph 3.2 of the Third Amendment and on a
consolidated basis substantially the same as that used by the Company in
preparing such financial statements; provided, however, that (A) foreign
currency translation adjustments under Financial Accounting Standards Board
Statement No. 52, "Foreign Currency Translation" and (B) items reported in
comprehensive income and accumulated other comprehensive income under Financial
Accounting Standards Statement No. 130 (including but not limited to gains or
losses for derivatives designated as a hedge of exposure to variable cash flows
of forecasted transactions and derivatives designated as a hedge of foreign
currency exposure of a net investment in a foreign operation), shall not in
either case be taken into account in calculating Consolidated Net Worth.
"Consolidated Subsidiary": any Subsidiary the results of whose operations
are, for financial accounting purposes, consolidated with the results of
operations of the Company and its other Consolidated Subsidiaries on the most
recent annual or quarterly financial statements of the Company and its
Consolidated Subsidiaries.
"Continuing Director": as of any date of determination, any member of the
board of directors of the Company who (x) was a member of the board of directors
of the Company as of the Sixth Amendment Effective Date or (y) was nominated for
election or elected to such board of directors with the approval of a majority
of the Continuing Directors who were members of such board at the time of such
nomination or election.
"Contractual Obligation": as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
24
"Control Investment Affiliate": as to any Person, any other Person that
(a) directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person and (b) is organized by such Person primarily
for the purpose of making equity or debt investments in one or more companies.
For purposes of this definition, "control" of a person means the power, directly
or indirectly, to cause the direction of the management and policies of such
Person whether by contract or otherwise.
"Credit Agreement": the Amended and Restated Credit Agreement, dated as
of April 19, 1999, by and among the Company, such Subsidiaries of the Company as
may from time to time be Borrowers and/or Guarantors thereunder in accordance
with the provisions thereof, the several banks and other fiscal institutions
from time to time parties thereto (the "Lenders"), Bank of America, N.A.
(formerly NationsBank, N.A.), a national banking association, as administrative
agent for the Lenders, Bank of America Canada as Canadian administrative agent,
and The Chase Manhattan Bank, Xxxxxx Guaranty Trust Company of
New York and
Citibank, N.A. as Co-Syndication Agents, as the same has been amended and
restated by the Third Amendment thereto, dated as of November __, 2000, and as
the same may be further amended and be from time to time in effect (including
extensions, renewals, refundings and replacements thereof).
"Credit Documents": this Agreement, the Notes, the Third Amendment, the
Fourth Amendment hereto dated as of April 19, 1999, the Fifth Amendment hereto
dated as of July 26, 2000, the Sixth Amendment, any Guarantor Joinder
Agreements, the Collateral Documents and all other related agreements and
documents issued, delivered or executed hereunder or thereunder or pursuant
hereto or thereto (in each case, as the same may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time).
"Credit Parties": the Company and the Guarantors.
"Debt Issuance": the issuance of any Indebtedness for borrowed money
(including debt securities) by (and any refinancing thereof permitted hereunder)
the Company or any of its [Consolidated] Subsidiaries, other than (i) the Loans
under the Credit Agreement (as the same is in effect on the Sixth Amendment
Effective Date), (ii) the Bridge Notes and the Senior Notes and (iii) purchase
money Indebtedness permitted under subparagraph 5.2(f).
"Default": any event specified in paragraph 9A, whether or not any
requirement therein designated for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Domestic Subsidiaries": each direct and indirect Subsidiary of the
Company that (a) is domiciled, incorporated or organized under the laws of any
State of the United States or the District of Columbia or (b) maintains the
majority of its assets (determined on a consolidated basis) in the United States
of America.
"Eligible Reinvestment": an acquisition of assets that is (i) not
prohibited under subparagraph 5.2(b)(ii) and (ii) an acquisition of another
business or any substantial part of another business or other long-term assets,
in each case, in, or used or useful in, the same or a
25
similar line of business as the Company and its Subsidiaries were engaged in on
the Closing Date, or any reasonable extensions or expansions thereof.
"Environmental Laws": any and all lawful and applicable Federal, state,
local and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses, agreements
or other governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals, or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
"Equity Issuance": any issuance by the Company or any Consolidated
Subsidiary to any Person other than the Company or a Consolidated Subsidiary of
(a) shares of its Capital Stock, specifically including any hybrid equity
securities (e.g., trust preferred capital securities), (b) any shares of its
Capital Stock pursuant to the exercise of options or warrants or (c) any shares
of its Capital Stock pursuant to the conversion of any debt securities to
equity. The term "Equity Issuance" shall not include any Asset Disposition.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Plan": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Company or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Event of Default": any event specified in paragraph 9A, provided that
any requirement therein designated for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Excluded Assets": each of:
(a) any permit or license issued by any Governmental Authority, if and to
the extent that, and for as long as, the grant of a security interest therein
pursuant to the Collateral Documents is prohibited (notwithstanding the
intention of the holder to grant such security interests to the fullest extent
lawful) under any applicable law or judicial or administrative order, but not
including any proceeds of any sale, lease, transfer or other disposition of any
such permit or license;
(b) any right or interest under a lease of Property, an intellectual
property license agreement under which any Credit Party is the licensee or any
other agreement under which any Credit Party is entitled to the performance of
any material obligation other than the payment of money, to the extent that, and
for as long as, the grant of a security interest therein pursuant to the
Collateral Documents is prohibited thereby, would constitute a breach thereof or
default thereunder, would give rise to any power of termination or material
penalty or claim against the Company or any Subsidiary thereunder, or is subject
to a required consent that has not been
26
obtained, but not including any right to the payment of money or any proceeds of
any sale, lease, transfer or other disposition of any such right or interest;
(c) any personal property (other than Investment Property and Instruments
as such terms are defined in the Uniform Commercial Code) as to which a Lien
cannot be created by the grant of a security interest under the Uniform
Commercial Code, unless the Collateral Agent has requested the Company to create
a Lien as permitted under other applicable law and not otherwise an Excluded
Asset;
(d) any interest in real property having a fair market value, net of Liens
other than Liens in favor of the Collateral Agent, that is less than S1,000,000;
(e) any interest in the voting Capital Stock of a First Tier Foreign
Subsidiary to the extent that such interest exceeds 65% of the voting Capital
Stock of such Foreign Subsidiary;
(f) proceeds from any Indebtedness incurred, or equity securities issued,
by the Company or any of its Subsidiaries to the extent that the Net Cash
Proceeds thereof are used to refinance the Bridge Notes;
(g) such other assets or items as determined by the Administrative
Agent; and
(h) the assets listed on Schedule IX attached to the Sixth Amendment.
"Exempted Proceeds": all Net Cash Proceeds from any Debt Issuance or
Equity Issuance that are applied to pay the principal of or interest on
(premium or repayment fee, if any) the Bridge Notes.
"FiberVisions": that certain division of the Company responsible for the
manufacturing of thermal-bond polyproplene fine denier staple fibers and the
production of olefin fiber and yarn for the domestic textile and industrial
markets.
"Financing Lease": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"First Tier Foreign Subsidiary": at any date of determination, each
Foreign Subsidiary in which any one or more of the Company and its Domestic
Subsidiaries owns more than 50%, in the aggregate, of the voting Capital Stock
of such Foreign Subsidiary.
"Foreign Subsidiaries": all Subsidiaries of the Company that are not
Domestic Subsidiaries.
"GAAP": generally accepted accounting principles in the United States
of America as in effect from time to time.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
27
"Guaranteed Obligations": without duplication, all of the obligations of
the Credit Parties owing (i) to the holders of the Notes, whenever arising,
under this Agreement, the Guarantor Joinder Agreements, the Notes, the
Collateral Documents or any of the other Credit Documents to which a Credit
Party is a party including, but not limited to, obligations with respect to
principal, interest, Market Premium, tax gross-up payments and fees and expense
reimbursement payments and including, without limitation (to the extent
permitted by applicable law), any amounts that would have accrued but for the
automatic stay under the Federal Bankruptcy Code (as now or hereafter in
effect).
"Guarantor": each of the Domestic Subsidiaries (other than a Receivables
Financing SPC or a Preferred Stock SPC, The Xxxx Foundation) and each Additional
Credit Party which has executed a Guarantor Joinder Agreement, together with its
successors and assigns.
"Guarantor Joinder Agreement": a Guarantor Joinder Agreement referenced
in subparagraph 5.1(j), a form of which is attached as Exhibit A to the Sixth
Amendment.
"Hazardous Materials": any substance, material or waste defined or
regulated in or under any Environmental Laws.
"Hedging Agreements": interest rate protection agreements, foreign
currency exchange agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements, in each case
entered into by the Company or any of its Subsidiaries.
"Indebtedness": with respect to any Person, without duplication, (i) all
indebtedness for borrowed money created, incurred, assumed or guaranteed by such
Person, (ii) all amounts owing by such Person under purchase money mortgages or
other purchase money liens or conditional sales or other title retention
agreements, (iii) all indebtedness secured by mortgages, liens, security
interests, conditional sales or other title retention agreements upon property
owned by such Person (whether or not such Person has assumed or become liable
for the payment of such indebtedness), (iv) all obligations of such Person in
respect of Financing Leases and Synthetic Leases, (v) all guaranty obligations
of such Person with respect to Indebtedness of another Person, (vi) Indebtedness
of any partnership or unincorporated joint venture with respect to which such
Person is legally obligated or has a reasonable expectation of being liable with
respect thereto, (vii) the maximum amount of all standby letters of credit
issued or bankers' acceptances facilities created for the account of such Person
and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (viii) the principal amount of subordinated notes or debentures
issued by such Person to a Preferred Stock SPC in connection with hybrid equity
securities (e.g., trust preferred capital securities), and (ix) the outstanding
Attributed Principal Amount under any Permitted Receivables Financing (other
than a securitization of the receivable evidenced by the Tastemaker note, a $500
million five-year note of IMCERA Group, Inc. bearing interest at 6.2% and
classified as "held at maturity").
"Index Debt": the Company's long-term senior unsecured
non-credit-enhanced debt securities.
28
"Initial Hybrid Equity Transaction": the issuance, prior to or within
three (3) months of the Closing Date, of equity-like securities by the Company
and/or any of its Consolidated Subsidiaries in an amount sufficient to raise
$170 million in proceeds for the Company.
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Multiemployer Plan is insolvent within the meaning of Section 4245
of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Interest Coverage Ratio": with respect to the Company and its
Consolidated Subsidiaries for the twelve month period ending on the last day of
any fiscal quarter of the Company (and after giving effect to the Acquisition on
a Pro Forma Basis), the ratio of (a) Consolidated EBITDA for such period to (b)
Consolidated Interest Expense for such period.
"Leverage Ratio": with respect to the Company and its Consolidated
Subsidiaries for the twelve month period ending on the last day of any fiscal
quarter (and after giving effect to the Acquisition on a Pro Forma Basis), the
ratio of (a) Indebtedness of the Company and its Consolidated Subsidiaries on
the last day of such period minus the principal amount of subordinated notes or
debentures issued by the Company to a Preferred Stock SPC in connection with
hybrid equity securities (e.g., trust preferred capital securities) to (b)
Consolidated EBITDA for such period.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest to any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Financing Lease
having substantially the same economic effect as any of the foregoing).
"Material Adverse Effect": a material adverse effect on (i) the
operations, business, property or assets, or the condition (financial or
otherwise) of the Company and its Consolidated Subsidiaries taken as a whole or
(ii) the validity or enforceability of this Agreement and the other Credit
Documents or the rights and remedies of the holders of the Notes hereunder or
thereunder.
"Material Subsidiary": as of any date of determination, any Domestic
Subsidiary or any Foreign Subsidiary that (a) is a Credit Party, (b) together
with its Subsidiaries on a consolidated basis, during the twelve months
preceding such date of determination accounts for (or to which may be
attributed) 5% or more of the net income or assets (determined on a consolidated
basis) of the Company and its Subsidiaries or (c) is otherwise necessary for the
ongoing business operations of the Company and its Subsidiaries taken as a
whole.
"Merger Agreement": that certain Agreement and Plan of Merger dated as
of July 30, 1998 among the Company, Water Acquisition Co. and BetzDearborn.
"Xxxxx'x": Xxxxx'x Investors Services, Inc.
"Mortgages": any and all mortgages, deeds of trust, assignments of rents
or leases, or other security agreements, covering any interest in real property,
executed and delivered by any of the Credit Parties in favor of the Collateral
Agent, granting the Collateral Agent a Lien for the
29
benefit of the holders of the Notes and any other beneficiaries described
therein, to secure obligations of the Credit Parties under the Credit Documents
and other obligations that were outstanding on the Sixth Amendment Effective
Date and were then entitled, under the agreement governing such obligations, to
the benefit of such Lien, in each case as amended, modified, supplemented,
extended, renewed or replaced from time to time.
"Multiemployer Plan": an ERISA Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds": the aggregate cash proceeds received by the Company
or any of its Consolidated Subsidiaries in respect of any Asset Disposition,
Equity Issuance, Debt Issuance or Permitted Receivables Financing, net of (a)
direct costs (including, without limitation, legal, accounting and investment
banking fees, and sales commissions) and (b) taxes paid or payable as a result
thereof; it being understood that "Net Cash Proceeds" shall include, without
limitation, any cash received upon the sale or other disposition of any non-cash
consideration received by the Company or any of its Consolidated Subsidiaries in
any Asset Disposition, Equity Issuance, Debt Issuance or Permitted Receivables
Financing.
"Note Documents": collectively, this Agreement, as amended, modified or
supplemented from time to time, the Notes, all Guarantor Joinder Agreements, the
Collateral Documents and all other related agreements and documents issued,
delivered or executed thereunder or pursuant thereto (in each case, as the same
may be amended, modified, restated, supplemented, extended, renewed or replaced
from time to time).
"Note Obligations": all payment obligations of the Company, the ESOT and
the Subsidiary Guarantors under the Note Documents owing to the holders of the
Notes, or any of them, whenever arising, including without limitation, amounts
in respect of principal (which shall not, however, exceed $93,500,00), interest,
Market Premium, tax gross-up payments, fees and expense reimbursement
obligations.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"Permitted Guarantor": a Domestic Subsidiary that is a Credit Party and
that has granted to the Collateral Agent a first-priority (other than with
respect to Liens permitted under subparagraph 5.2(a)), perfected Lien on
substantially all of its domestic assets (other than Excluded Assets) pursuant
to the Collateral Documents, as certified by the Company in a certificate
delivered to the holders of the Notes (as well as the holder of the Indebtedness
to be guaranteed) and not objected to by the Required Holders within 5 days of
its receipt of such certificate.
"Permitted Investments":
(i) cash and Cash Equivalents;
(ii) receivables owing to the Company or any of its Subsidiaries or
any receivables and advances to suppliers, in each case if created,
acquired or made in the
30
ordinary course of business and payable or dischargeable in accordance
with customary trade terms;
(iii) investments in and loans to any Credit Parties;
(iv) loans and advances to officers, directors, employees and
Affiliates in an aggregate amount not to exceed S 1,000,000 at any time
outstanding;
(v) investments (including debt obligations) received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(vi) investments, acquisitions or transactions permitted under
subparagraph 5.2(b)(ii);
(vii) additional investments, provided that such investments made
pursuant to this clause (vii) shall not exceed an aggregate amount of
$1,000,000 at any time outstanding;
(viii) investments existing on the Sixth Amendment Effective Date
and set forth on Schedule X attached hereto;
(ix) investments by the Company and its Subsidiaries in Hedging
Agreements permitted under Subparagraph 5.2(f)(iii); and
(x) investments by Foreign Subsidiaries in other Foreign
Subsidiaries.
As used herein, "investment" means all investments, in cash or by delivery
of property made, directly or indirectly in, to or from any Person, whether by
acquisition of shares of Capital Stock, property, assets, indebtedness or other
obligations or securities or by loan advance, capital contribution or otherwise.
"Permitted Receivables Financing": any one or more receivables financings
in which (i) the Company or any of its Consolidated Subsidiaries (a) sells (as
determined in accordance with GAAP) any accounts receivable, notes receivable,
rights to future lease payments or residuals (collectively, together with
certain related property relating thereto and the right to collections thereon,
being the "Transferred Assets") to any Person that is not a Subsidiary or
Affiliate of the Company (with respect to any such transaction, the "Receivables
Financier"), (b) borrows from such Receivables Financier and secures such
borrowings by a pledge of such Transferred Assets and/or (c) otherwise finances
its acquisition of such Transferred Assets and, in connection therewith, conveys
an interest in such Transferred Assets to the Receivables Financier or (ii) the
Company or any of its Consolidated Subsidiaries sells, conveys or otherwise
contributes any Transferred Assets to a Receivables Financing SPC, which
Receivables Financing SPC then (a) sells (as determined in accordance with GAAP)
any such receivables (or an interest therein) to any Receivables Financier, (b)
borrows from such Receivables Financier and secures such borrowings by a pledge
of such receivables or (c) otherwise finances its acquisition of such
receivables and, in connection therewith, conveys an interest in such
receivables to the
31
Receivables Financier, provided that (1) such receivables financing shall not
involve any recourse to the Company or any of its Consolidated Subsidiaries for
any reason other than (A) repurchases of non-eligible receivables or (B)
indemnifications for losses other than credit losses related to the receivables
sold in such financing, (2) such receivables financing shall not include any
guaranty obligations of the Company or any of its Consolidated Subsidiaries, (3)
the Required Holders shall be reasonably satisfied with the structure of and
documentation for any such transaction and that the terms of such transaction,
including the discount at which receivables are sold, the term of the commitment
of the Receivables Financier thereunder and any termination events, shall be (in
the good faith understanding of the Required Holders) consistent with those
prevailing in the market for similar transactions involving a receivables
originator/servicer of similar credit quality and a receivables pool of similar
characteristics, (4) the documentation for such transaction shall not be amended
or modified without the prior written approval of the Required Holders and (5)
the Required Holders shall have given their prior written approval to the
entering into and consummation of such receivables financing and shall have
approved the intended application of the proceeds thereof.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": the BetzDearborn Inc. Employee Stock Ownership and 401(k)
Plan, and its successors.
"Pledge Agreement": the Pledge Agreement as amended by the First Amendment
to Pledge Agreement dated as of the Sixth Amendment Effective Date executed by
the Company and each of other Guarantors and substantially in the form of
Exhibit B attached to the Sixth Amendment, as amended, modified, supplemented,
extended, renewed or replaced from time to time.
"Preferred Stock SPC": a special purpose entity that is a Subsidiary
or Affiliate of the Company and that is formed for the sole and exclusive
purpose of engaging in activities in connection with the issuance of hybrid
equity securities (e.g., trust preferred capital securities).
"Pro Forma Basis": means, with respect to any transaction, that such
transaction shall be deemed to have occurred (for purposes of calculating
compliance in respect of such transaction with each of the financial covenants
set forth in subparagraph 5.2(d)) as of the first day of the four fiscal quarter
period ending as of the last day of the most recent fiscal quarter preceding the
date of such transaction with respect to which the holders of the Notes shall
have received the financial statements referred to in subparagraph 5.1(a). As
used herein, "transaction" means any corporate merger or consolidation or any
asset disposition or purchase as referred to in subparagraph 5.2(b). Any
Indebtedness incurred or assumed by the Company or any of its Subsidiaries in
order to consummate such transaction (i) shall be deemed to have been incurred
or assumed on the first day of the applicable period and (ii) if such
Indebtedness has a floating or formula rate, then the implied rate of interest
for such Indebtedness for the applicable period for purposes of this definition
shall be determined by utilizing the rate which is or would be in effect with
respect to such Indebtedness as at the relevant date of determination.
32
"Property": any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Receivables Financing SPC": a special purpose entity that is a Subsidiary
or Affiliate of the Company and that is formed for the sole and exclusive
purpose of engaging in activities in connection with the purchase, sale and
financing of accounts receivable in connection with and pursuant to a Permitted
Receivables Financing.
"Regulation U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the day notice period is waived
under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg. Section 2615.
"Requirement of Law": as to any Person, the Certificate of Incorporation
and By-Laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"Resins Division": that certain division of the Company responsible
for producing and marketing hydrocarbon resins, wood gum and tall oil rosin
resins, terpene resins and specialties and organic peroxides.
"Responsible Officer": when used with respect to the Company, the chief
executive officer or any senior vice president of the Company or, with
respect to financial matters, the vice president and treasurer of the Company.
"Restricted Payment": (i) any dividend or other payment or distribution,
direct or indirect, on account of any shares of any class of Capital Stock of
the Company or any of its Subsidiaries, now or hereafter outstanding (including
without limitation the Company or any of its Subsidiaries), or to the holders,
in their capacity as such, of any shares of any class of Capital Stock of the
Company or any of its Subsidiaries, now or hereafter outstanding, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of the Company or any of its Subsidiaries, now or hereafter outstanding
and (iii) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
Capital Stock of any Consolidated Party, now or hereafter outstanding.
"Security Agreement": the Security Agreement dated as of the Sixth
Amendment Effective Date executed by the Company and each of the other
Guarantors and substantially in the form of Exhibit C attached to the Sixth
Amendment, as amended, modified, supplemented, extended, renewed or replaced
from time to time.
33
"Senior Notes": the up to $400 million of 11.125% Senior Notes Due
2007 issued pursuant to the Senior Note Indenture.
"Senior Note Indenture": the Indenture dated as of November 14, 2000,
between the Company and Xxxxx Fargo Bank Minnesota, N.A., as trustee, as the
same may be amended, supplemented or otherwise modified from time to time.
"S&P": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"Single Employer Plan": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Sixth Amendment": the Sixth Amendment dated as of November 14, 2000,
amending and supplementing this Agreement.
"Sixth Amendment Effective Date": the date on which all of the
conditions precedent to the effectiveness of the Sixth Amendment are
satisfied by the Credit Parties or waived by the Required Holders.
"Subsidiary": as to any Person, a corporation, partnership or other entity
of which shares of stock or other ownership interests having ordinary voting
power (other than stock or such other ownership interests having such power only
by reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation, partnership or other entity are
at the time owned, or the management of which is otherwise controlled, directly
or indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Company.
"Synthetic Lease": any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where such
transaction is considered borrowed money indebtedness for tax purposes but is
classified as an operating lease in accordance with GAAP.
"Third Amendment": the Third Amendment and Assumption Agreement dated
as of December 31, 1998, amending and supplementing this Agreement.
All accounting terms not otherwise defined herein shall have the meanings
assigned to them in accordance with GAAP. In the event that a change in GAAP
affects the terms of the covenant contained in subparagraph 5.2(d) hereof
(including the related defined terms used therein), the Company and the Required
Holders shall negotiate in good faith such amendments to such covenant and
related definitions as are necessary to reflect such changes in GAAP and as are
otherwise reasonably satisfactory to the Company and the Required Holders.
Section 1.5. (Paragraph 14) Paragraph 14 of the Note Agreement is amended
by deleting paragraph 14N in its entirety.
34
SECTION 2. ADDITIONAL GUARANTORS
From and after the Sixth Amendment Effective Date, the Guarantors under
the Note Agreement shall include the Guarantors party to the Note Agreement
prior to this Amendment and each additional Subsidiary of the Company identified
as a Subsidiary Guarantor on the signature pages hereto (the "Additional
Guarantors"). Each of the Additional Guarantors hereby acknowledges, agrees and
confirms that, by its execution of this Amendment, such Additional Guarantor
will be deemed to be a party to the Note Agreement and a "Guarantor" and "Credit
Party" for all purposes of the Note Agreement, and shall have all of the
obligations of a Guarantor and Credit Party thereunder as if it had executed the
Note Agreement. Each Additional Guarantor hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
applicable to the Guarantors and Credit Parties contained in the Note Agreement.
Without limiting the generality of the foregoing terms of this paragraph, each
Additional Guarantor hereby jointly and severally together with the other
Guarantors, guarantees to the holders of the Notes, as provided in paragraph 6
of the Note Agreement, the prompt payment and performance of the Guaranteed
Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration or otherwise) strictly in accordance with the terms
thereof.
SECTION 3. ACKNOWLEDGMENT AND AFFIRMATION BY CREDIT PARTIES
Each Credit Party hereby acknowledges that by executing and delivering a
counterpart of this Agreement it is becoming a party to the Note Agreement as
amended by this Agreement and shall be bound by the provisions thereof to the
extent such provisions are applicable to it.
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 4. 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
35
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 date hereof (and after giving effect to the
terms and provisions of the Bank Third Amendment) 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. The following Schedules to the Credit Agreement are also
attached hereto:
SCHEDULE II - Subsidiaries
SCHEDULE III - Required Consents, Authorizations, Notices and Filings
SCHEDULE IV - Existing Indebtedness of the Company and its Subsidiaries
SCHEDULE V - Representation Regarding Collateral Documents
SCHEDULE VI - Existing Letters of Credit
SCHEDULE VIII - Sources and Uses on Third Amendment Effective Date
SCHEDULE IX - Certain Excluded Assets
SCHEDULE X - Permitted Investments
SCHEDULE XI - Permitted Liens
36
SECTION 5. INTEREST RATE INCREASE
Section 4 of the Third Amendment (and Schedule X referred to therein) are
hereby deleted in their entirety. With effect from and after the Sixth Amendment
Effective Date the annual interest rate on the Notes outstanding from time to
time under the Note Agreement shall be subject to adjustment by reference to
Schedule I to this Amendment and the ESOT hereby agrees to pay interest on the
Notes at the annual rate as so increased and determined. On the Sixth Amendment
Effective Date, and after giving effect to this Amendment, the rate payable in
respect of the Notes (including Additional Interest and adjustments provided for
in paragraph 7 of the Note Agreement) as determined pursuant to the provisions
of the Note Agreement will initially be 11.95% per annum. For purposes of the
Notes and the Note Agreement the parties hereby agree that the following rates
referred to in the Note Agreement are, as of the Sixth Amendment Effective Date
and until changed by the agreement of the parties, as follows:
"Fully Tax-Exempt Rate" shall mean 6.76% plus the Additional Interest, if
any, per annum.
"Gross-Up Rate" shall mean 9.48% plus the Additional Interest, if any, per
annum.
"Qualified Tax-Exempt Rate" shall me 8.15% plus the Additional Interest,
if any, per annum.
SECTION 6. 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 conditions precedent:
(a) Prudential shall have received (i) counterparts of this Amendment,
duly executed and delivered by each of the Credit Parties and the ESOT Trustee,
(ii) counterparts of the Intercreditor Agreement, duly executed by the
Collateral Agent and acknowledged by the Company, (iii) copies of the Pledge
Agreement, duly executed and delivered by each Credit Party (original delivered
to the Collateral Agent as contemplated in clause (h) below), (iv) the Security
Agreement, duly executed and delivered by each Credit Party (original delivered
to the Collateral Agent as contemplated in clause (h) below), and (v) the
Mortgages, duly executed and delivered by the applicable Credit Parties
(originals delivered to the Collateral Agent as contemplated in clause (h)
below), together with a certificate of the Secretary or Assistant Secretary of
the Company and each other Credit Party as to the incumbency and specimen
signatures of the officers of the Company and each other Credit Party who are
authorized to execute such Credit Documents and each other document to be
executed and delivered by the Company or any other Credit Party pursuant hereto;
(b) Prudential shall have received a certified copy of the resolutions of
the Board of Directors of the Company and each other Credit Party evidencing its
approval of this Amendment, the Collateral Documents and the other Credit
Documents and matters contemplated hereby, and a certified copy of all documents
evidencing other necessary corporate action and governmental approvals, if any,
with respect to this Amendment, the Notes and the other Credit Documents;
37
(c) Prudential shall have received opinions of Xxxxxx X. Xxxxx, General
Counsel of the Company, and Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP, acting as
counsel to each of the Credit Parties, in form and substance satisfactory
Prudential;
(d) Prudential shall have received all documents it may reasonably request
relating to the existence and good standing of the Credit Parties and to the
authorization, execution and delivery of this Amendment and the other Credit
Documents and other matters relevant hereto, all in form and substance
satisfactory to Prudential and its counsel in their reasonable discretion;
(e) the Company shall have received (or shall be unconditionally entitled
to receive) $775,000,000 in gross proceeds from (i) the Senior Notes or the
Bridge Notes and (ii) the Tranche D Term Loans extended under the Credit
Agreement and shall have applied the Net Cash Proceeds thereof (or shall have
made arrangements reasonably satisfactory to Prudential to apply such Net Cash
Proceeds) in a manner consistent with the sources and uses table set forth on
Schedule VIII attached to this Amendment;
(f) no Default or Event of Default shall have occurred and be
continuing;
(g) the Collateral Agent shall have received (except to the extent the
Collateral Agent shall have agreed to give the Credit Parties additional time,
not to exceed 60 days from the Sixth Amendment Effective Date, to deliver any
such item) (i) delivery in pledge of stock certificates representing all (or, in
the case of a First Tier Foreign Subsidiary, 65%) of the interests in any
Subsidiary of the Company held or beneficially owned by any Credit Party,
together with assignments thereof duly endorsed in blank by the registered
holder thereof, (ii) perfection by control over all other investment property
constituting Collateral, (iii) financing statements covering all personal
property and fixtures constituting Collateral other than the Excluded Assets and
duly executed by the Credit Parties in form sufficient for filing in all
jurisdictions that are scheduled as filing jurisdictions in the Collateral
Documents or as to which the filing of financing statements may reasonably be
requested by any Agent and (iv) with respect to the Mortgages, such other
documents as may be reasonably requested by Prudential to confirm the validity,
perfection, priority, enforceability and sufficiency of such Liens;
(h) The principal amount of the Tranche C Term Loan under the Credit
Agreement ($318,000,000) shall have been repaid in full;
(i) Prudential shall have received an amendment fee in an amount
equal to $227,500; and
(j) Prudential shall have received from a Responsible Officer of the
Company a certificate to the effect that as of the Sixth Amendment Effective
Date (i) 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, (ii) no Default or Event of Default (after
giving effect to the amendments to the Note Agreement set forth herein) shall
have occurred and be continuing. and (iii) annexed to such certificate are true
and correct copies of the Incorporated Covenants and the Additional Incorporated
Terms referred to in paragraph 5.3 (as amended by this Amendment).
38
SECTION 7. MISCELLANEOUS
Section 7.1. Defined Terms. Capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Note Agreement.
Section 7.2. 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 7.3. 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 7.4. 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.
Section 7.5. 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 7.6. 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.
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:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
39
PRUDENTIAL: THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
COMPANY: HERCULES INCORPORATED, A DELAWARE
CORPORATION
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
40
SUBSIDIARY GUARANTORS
(list continues on the next page):
BETZDEARBORN CANADA, INC.
an Ontario corporation
HERCULES CREDIT, INC.
an 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, LLC
a Delaware limited liability
company
FIBERVISIONS INCORPORATED,
a Delaware corporation
FIBERVISIONS PRODUCTS, INC.,
a Georgia corporation
BETZDEARBORN, INC.,
a Pennsylvania corporation
BETZDEARBORN EUROPE, INC.,
a Delaware corporation
DRC, LTD.,
a Delaware corporation
BLI HOLDINGS CORP.
a Delaware corporation
HERCULES SHARED SERVICES
CORPORATION, a Delaware corporation
BETZDEARBORN INTERNATIONAL,
INC., a Pennsylvania corporation
(execution on behalf of the
foregoing Subsidiary Guarantors is
on the following page)
42
SUBSIDIARY GUARANTORS
(continued from previous page):
ATHENS HOLDINGS, INC.,
a Delaware corporation
BETZDEARBORN CHINA, LTD.,
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, LLC,
a Delaware limited liability
company
HERCULES INVESTMENTS, LLC,
a Delaware Limited liability
company
HISPAN CORPORATION,
a Delaware corporation
By:
------------------------------
Name:
------------------------------
Title:
------------------------------
for each of the foregoing
Subsidiary Guarantors listed on
this page and the preceding page
43
SCHEDULE I
DETERMINATION OF ADDITIONAL INTEREST
"Additional Interest" in respect of the Notes shall mean the rate per annum
applicable on any date determined based upon the ratings applicable on such date
to the Company's long-term senior secured bank debt (the "Index Debt") by
Xxxxx'x and S&P as follows:
Clause Rating Additional Interest
------ ------ -------------------
(1) [Greater than or equal to] BBB from S&P and
[Greater than or equal to] Baa2 from Xxxxx'x 2.68%
(2) BBB- from S&P and Baa3 from Xxxxx'x 2.88%
(3) BB+ from S&P and Bal from Xxxxx'x 3.80%
(4) BB from S&P and Ba2 from Xxxxx'x 4.80%
(5) BB- from S&P and Ba3 from Xxxxx'x 6.05%
(6) [Less than or equal to] BB- (or no rating)
from Xxxxx'x or [Less than or equal to] Ba3
(or no rating) from Xxxxx'x 8.05%
For purposes of the foregoing, (i) if the ratings established by Xxxxx'x and S&P
shall indicate different clauses specified above, the Additional Interest shall
be determined by reference to the numerically higher clause (thus, by way of
example, if the Company's Index Debt is rated BBB- by S&P and Bal by Xxxxx'x,
the clauses indicated are (2) and (3), respectively, resulting in the Additional
Interest determined by reference to clause (3), which clause is the higher
numbered clause); and (ii) if any rating established by Xxxxx'x or S&P shall be
changed (other than as a result of a change in the rating system of either
Xxxxx'x or S&P) such change shall be effective as of the date on which such
change is first announced by the rating agency making such change.
Notwithstanding anything in this definition of "Additional Interest" to the
contrary, in no event shall the Additional Interest be less than the amount set
forth in clause (3) above prior to the date on which financial statements are
delivered in respect of the second full fiscal quarter of the Company following
the Sixth Amendment Effective Date. Each change in the rate of Additional
Interest shall apply during the period commencing on the effective date of such
change and ending on the date immediately preceding the effective date of the
next such change. if the rating system of either Xxxxx'x or S&P shall change
prior to the payment in full of the Notes, the Company and the holders of the
Notes shall negotiate in good faith to appropriately amend the references to
specific ratings in this definition to reflect such changed rating system. If
both Xxxxx'x and S&P shall cease to be in the business of rating corporate debt
obligations, the Company and the holders of the Notes shall negotiate in good
faith to agree upon a substitute rating agency and to amend the references to
specific ratings in this Schedule to reflect the ratings used by such substitute
rating agency.
44
