Exhibit 4.2
December 18, 1997
X. X. Xxxxx & Co.
Xxx Xxxx Xxxxxx Xxxx
Xxxx Xxxxx, XX 00000-1010
Attention: Xxxx XxXxxxx
Vice President and Treasurer
Gentlemen:
ABN AMRO Bank N.V., New York Branch ("ABN AMRO"), Bank of
America National Trust and Savings Association ("Bank of America"),
NationsBank N.A. ("NationsBank") and Bankers Trust Company ("BTCo") are
pleased to offer to X. X. Xxxxx & Co. ("X. X. Xxxxx") their respective
commitments in the amounts set forth opposite their names on their respective
signature pages hereto (or the equivalent thereof in permitted designated and
alternate currencies) as part of the One Billion Six Hundred Million United
States Dollar credit facility described herein, subject to the terms and
provisions set forth herein and in the attached summary of terms and
conditions (the "Facility"). ABN AMRO, Bank of America, NationsBank and BTCo
are herein referred to individually as an "Agent Bank" and collectively as the
"Agent Banks". All defined terms used herein and not defined herein shall have
the same meaning herein as in the attached summary of terms and conditions.
ABN AMRO will serve as Administrative Agent and Arranger and
BancAmerica Xxxxxxxxx Xxxxxxxx, XX Xxxx.Xxxxx Incorporated, and NationsBanc
Xxxxxxxxxx Securities, Inc. are herein referred to individually as a
"Co-Arranger" and, collectively, the "Co-Arrangers". Each of the Agent Xxxxx,
Arranger and Co-Arrangers will perform the customary duties under the Facility.
In addition, each of the Arranger and Co-Arrangers agrees to use its best
efforts to work with X. X. Xxxxx to syndicate the Facility to one or more
banks or financial institutions that are reasonably satisfactory to the
Arranger, Co-Arrangers and X. X. Xxxxx.
The Arranger and Co-Arrangers intend to commence syndication
efforts promptly after your execution of this letter, and you agree to
assist the Arranger and Co-Arrangers in achieving a syndication that is
satisfactory to the Arranger, Co-Arrangers and you. The syndication
efforts of the Arranger and Co-Arrangers, including contacts with and
requests for assistance from X. X. Xxxxx and SAC, will be coordinated
among the Arranger and Co-Arrangers. Such syndication will be accomplished
by a variety of means, including direct contact during the syndication
between senior management and advisors of X. X. Xxxxx and its affiliates
and the proposed syndicate members. To assist the Arranger and Co-
Arrangers in their syndication efforts, you hereby agree (i) to provide and
cause your advisors to provide the Arranger and Co-Arrangers, the Agent
Banks and the other syndicate members upon request with all information
reasonably deemed necessary by the Arranger and Co-Arrangers to complete
syndication, including but not limited to information and evaluations
prepared by X. X. Xxxxx and its affiliates and their respective advisors,
or on their behalf, relating to the transactions contemplated hereby, (ii)
to assist ABN AMRO upon its reasonable request in the preparation of an
Information Memorandum to be used in connection with the syndication of the
Facility, (iii) to otherwise assist the Arranger and Co-Arrangers in their
syndication efforts, including by making officers of X. X. Xxxxx and its
affiliates available from time to time to attend and make presentations
regarding the business and prospects of the Grace Packaging Business at a
meeting or meetings of lenders or prospective lenders, and (iv) to use your
best efforts to cause officers of SAC and its affiliates to be available
from time to time to attend and make presentations regarding the business
and prospects of the Grace Packaging Business and SAC and its subsidiaries,
taken as a whole, at a meeting or meetings of lenders or prospective
lenders.
As you are aware, we have received certain historical and
projected pro forma financial statements of the Grace Packaging Business and
of SAC and its subsidiaries. If additional information comes to our attention
which the Agent Xxxxx, Arranger or Co-Arrangers reasonably believe has a
material adverse effect on the business, assets, financial condition, or
prospects of the Grace Packaging Business, taken as a whole, or the Grace
Packaging Business and SAC and its subsidiaries, taken as a whole, or on the
Transaction, the Agent Banks may decline to provide the financing and ABN AMRO
may, in its sole discretion, suggest alternative financing amounts or
structures that ensure adequate protection for the Agent Banks, Arranger and
the Co-Arrangers.
You hereby represent and covenant that (i) all information,
other than the Projections (as defined below), which has been or is
hereafter made available to the Agent Banks, the Arranger and the Co-
Arrangers by you or on your behalf in connection with the transactions
contemplated hereby (the "Information") is and will (as supplemented below)
be complete and correct in all material respects and does not and will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements contained therein not materially
misleading as of the date provided to you and (ii) all financial
projections concerning the Grace Packaging Business. taken as a whole, and
the Grace Packaging Business and SAC and its subsidiaries, taken as a
whole, that have or are hereafter made available to the Agent Banks, the
Arranger and the Co-Arrangers by you or on your behalf in connection with
the transactions contemplated hereby (the "Projections") have been or will
be prepared in good faith based upon reasonable assumptions. You agree to
supplement the Information and the Projections from time to time until the
closing date of the credit facility so that the representation and warranty
in the preceding sentence is true and correct on such closing date as if
the Information and Projections were provided to you on the closing date.
You acknowledge that in arranging and syndicating the Facility, the Agent
Xxxxx, the Arranger and the Co-Arrangers will be using and relying on the
Information and Projections without independent verification thereof. In
issuing this commitment and undertaking, as the case may be, the Agent
Xxxxx, the Arranger and the Co-Arrangers are relying on the accuracy of the
information furnished by you or on your behalf.
The Agent Xxxxx will not be obligated to enter into the
Facility unless and until all of the following conditions set forth herein and
in the attached summary of terms and conditions have been met:
(a) The Facility will be made available pursuant to loan
and related agreements and documentation (collectively, the "Facilities
Documentation"), in form and substance consistent with the attached summary
of terms and conditions and otherwise satisfactory to the Agent Banks. The
Facilities Documentation shall contain such covenants, terms, conditions,
representations, warranties and events of default as are consistent with
the term sheet and otherwise as shall be satisfactory to ABN AMRO or as are
customarily included by ABN AMRO in agreements governing transactions of
the kind contemplated, or as the Agent Banks shall deem appropriate based
on their investigation of the Grace Packaging Business and SAC and its
subsidiaries. It is understood that the attached terms and conditions
attempt to set forth certain of the material terms and provisions of the
Facility, but not necessarily all of such terms and provisions, and that
the Facility as finally documented shall contain those terms and provisions
customarily required by the Agent Banks for facilities and transactions of
this type. Accordingly, each of our commitments remains subject to our
receipt of legal documentation in form and content satisfactory to us and
to our legal counsel.
(b) The Merger Agreement shall be in full force and effect.
Any consent of the shareholders of X. X. Xxxxx or SAC which may be
required to authorize the Merger shall have been obtained.
(c) All approvals, consents, authorizations, licenses,
permits, orders, filings and declarations of and with any governmental or
regulatory body, agency or authority or any person, firm, corporation or
other legal entity necessary in connection with the Facility and the
transactions otherwise contemplated thereby and to be obtained by you or
SAC, shall have been obtained and made and be in full force and effect and
all applicable waiting periods shall have expired without any action being
taken by any competent authority which restrains, prevents or imposes
materially adverse conditions upon, the consummation of the Merger or the
incurrence of the loans under the Facility, in each case on a basis
acceptable to the Agent Banks.
(d) The execution of the Facilities Documentation and the
consummation of the transactions contemplated thereby shall not violate or
conflict with any law, rule or regulation or any material agreement,
contract or other obligation binding upon or affecting the property of the
Grace Packaging Business or SAC or any of its subsidiaries or businesses.
(e) Except as previously disclosed to the Agent Banks no
action, suit or proceeding (including, without limitation, any inquiry or
investigation) shall be pending or threatened against the Grace Packaging
Business or against SAC or any of its subsidiaries which could reasonably
be expected to result in a material adverse effect on the Grace Packaging
Business, taken as a whole, or on the Grace Packaging Business and SAC and
its subsidiaries, taken as a whole, the financing contemplated hereby or
any documentation executed in connection therewith, and no injunction or
other restraining order shall have been issued or a hearing therefor be
pending or noticed with respect to the Facility or the transactions
contemplated hereby and thereby.
(f) The Agent Xxxxx shall be satisfied as to the existing
and potential liability of the Grace Packaging Business, taken as a whole,
and the Grace Packaging Business and SAC and its subsidiaries, taken as a
whole, with respect to any environmental matters including compliance with
laws and regulations relating to environmental protection.
(g) The results of the Agent Xxxxx' continued due diligence
review, analysis and testing of the assets, liabilities, commitments,
contingencies, results of operations and prospects of the Grace Packaging
Business, taken as a whole, and the Grace Packaging Business and SAC and
its subsidiaries, taken as a whole, shall be acceptable to the Agent Banks.
(h) There shall have been no material adverse change in the
business, financial condition, or results of operations of the Grace
Packaging Business, taken as a whole, or the Grace Packaging Business and
SAC and its subsidiaries, taken as a whole, since December 31, 1996.
(i) All extensions of credit under the Facility shall be in
full compliance with all applicable requirements, including, to the extent
applicable, the rules and regulations of the Board of Governors of the
Federal Reserve System.
(j) The Agent Xxxxx shall be satisfied that the pro forma
financial condition of the Grace Packaging Business, taken as a whole, and
the Grace Packaging Business and SAC and its subsidiaries, taken as a
whole, after giving effect to the Transactions is substantially consistent
with the Projections provided by you or your agents to the Agent Banks.
(k) The Agent Xxxxx shall have received such opinions of
counsel, officers' certificates, board resolutions and certificates of
accountants and other professionals in respect of such matters as the Agent
Banks shall reasonably request.
(l) There shall not have occurred and be continuing such a
material disruption in the market for syndicated bank credit facilities
generally as would, in the reasonable judgment of the Arranger and Co-
Arrangers, materially impair the syndication of the Facility.
(m) There shall have been no other syndications of private
debt by X. X. Xxxxx for which Cryovac or the Grace Packaging Business
would remain liable after giving effect to the Merger or by SAC during the
syndication of the Facility which would, in the reasonable opinions of the
Arranger and Co-Arrangers, affect the successful syndication of the
Facility.
For its commitment to the Facility, X. X. Xxxxx agrees to pay
to each of the Agent Xxxxx the upfront fee specified in the fee letter dated
the date hereof among the Agent Xxxxx and X. X. Xxxxx. X. X. Xxxxx agrees to
pay to ABN AMRO the additional fees specified in the fee letter dated the date
hereof between X. X. Xxxxx and XXX XXXX. The Facilities Documentation shall be
prepared by Xxxxxxx and Xxxxxx as special counsel to ABN AMRO. The reasonable
costs and expenses of Xxxxxxx and Xxxxxx (to be limited to a maximum amount to
be agreed upon) in connection with the preparation, execution and delivery of
this letter, the Facilities Documentation and the transactions contemplated
hereby and thereby and all other incidental out-of-pocket costs and expenses
of the Agent Banks, the Arranger and the Co-Arrangers in connection with the
syndication of the Facility shall be for your account, whether or not any
portion of the Facility is made available. To the extent any fees are payable
to the banks participating in the Facility (other than to the Agent Xxxxx),
such fees shall be for the account of X. X. Xxxxx as shall be mutually agreed
between X. X. Xxxxx and the Agent Xxxxx.
To induce the Agent Xxxxx, the Arranger and the Co-Arrangers
to enter into this letter, X. X. Xxxxx hereby agrees to indemnify and
hold harmless the Agent Xxxxx, the Arranger and the Co-Arrangers and their
affiliates and each director, officer, employee, agent, attorney thereof
(each an "indemnified person") from and against any and all actions, suits,
proceedings (including any investigations or inquiries), claims, losses,
damages, liabilities or expenses of any kind or nature whatsoever which may
be incurred by or asserted against or involve the Arranger or any Agent
Bank or Co-Arranger or any such indemnified person as a result of or
arising out of or in any way related to or resulting from this letter, the
Facility or the other transactions contemplated hereby and thereby and,
upon demand, to pay and reimburse the Agent Banks, the Arranger and the Co-
Arrangers and each indemnified person for any reasonable legal or other
out-of-pocket expenses incurred in connection with investigating, defending
or preparing to defend any such action, suit, proceeding (including any
inquiry or investigation) or claim (whether or not the Agent Xxxxx, the
Arranger and the Co-Arrangers or any such indemnified person is a party to
any action or proceeding out of which any such expenses arise); provided,
however, X. X. Xxxxx shall not indemnify any Agent Bank, the Arranger or
Co-Arranger or any indemnified person pursuant to this paragraph against
any loss, claim, damage, expense or liability resulting from its gross
negligence or willful misconduct (as applicable). The foregoing provisions
of this paragraph shall be in addition to any rights that an indemnified
party shall have at common law or otherwise. Neither the Agent Xxxxx, the
Arranger, the Co-Arrangers nor any indemnified person shall be entitled to
indemnity for any lost profits or consequential damages pursuant to this
paragraph.
The provisions of the immediately preceding two paragraphs
shall survive any termination of this letter.
This letter shall not be assignable by any party hereto without
the prior written consent of the other parties, subject to the right of the
Agent Xxxxx stated above to syndicate the Facility among banks or other
financial institutions acceptable to the Agent Xxxxx and X. X. Xxxxx, and the
right of the Agent Banks to sell, transfer or assign all or any portion of, or
interests or participation in, the Facility, in the case of assignments,
subject to the consent of X. X. Xxxxx.
If you are in agreement with the foregoing, please sign and
return the enclosed copy of this letter no later than 5:00 p.m., New York
time, on or before December 22, 1997. This letter will become effective upon
your delivery to us of executed counterparts of this letter. This offer shall
terminate if not so accepted by you prior to that time.
After this letter becomes effective, the commitments of the
Agent Xxxxx hereunder may be terminated in whole or in part at any time by X.
X. Xxxxx upon written notice to the Agent Xxxxx. This commitment will
terminate on April 15, 1998 unless definitive Facilities Documentation,
meeting the conditions set forth herein, shall have been entered into on or
prior to such date.
Prior to the receipt by the Agent Xxxxx, the Arranger and the
Co-Arranger of a counterpart of this commitment letter executed by you, this
commitment letter and the contents hereof shall be treated by you as
confidential and (except as required by law in the opinion of your or SAC's
counsel) shall not be disclosed by you to any person other than X. X. Xxxxx'x
or SAC's officers, directors, attorneys and other advisors. After such receipt
this commitment letter and its respective contents shall not be disclosed by
you or SAC except in furtherance of, and to other proposed participants in,
the transactions contemplated by such commitment letter and, in any event,
this commitment letter shall not be disclosed publicly (unless required by law
in the opinion of your or SAC's counsel) without the prior written consent of
the Agent Xxxxx, except that, following your acceptance of this letter, you or
SAC may make public disclosure of the existence and amount of the Agent Xxxxx'
commitments, and you or SAC may make such public disclosures of the terms and
conditions hereof as you or SAC are required by law, in the opinion of your or
SAC's counsel, to make.
Except as otherwise contemplated herein or as required by law or
requested by any regulatory authority, each Agent Bank, the Arranger, and each
Co-Arranger agrees that it will keep and cause its affiliates to keep as
confidential in accordance with customary banking practices, all non-public,
confidential materials of X. X. Xxxxx and its subsidiaries and SAC and its
subsidiaries (except as may be necessary to complete syndication, provided
that any such materials will be provided only subject to confidentiality
restrictions mutually agreed by the Agent Xxxxx, the Arranger, the
Co-Arrangers and you).
This letter may be executed in counterparts which, taken
together, shall constitute an original. This letter embodies the entire
agreement and understanding between the Agent Xxxxx, the Arranger, the
Co-Arrangers and you with respect to the Facilities and supersedes all prior
agreements and understandings relating to the subject matter hereof.
THIS LETTER WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS AND ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM,
ACTION, SUIT OR PROCEEDING ARISING OUT OF OR CONTEMPLATED BY THIS COMMITMENT
LETTER IS HEREBY WAIVED BY THE AGENT XXXXX, ARRANGER, CO-ARRANGERS AND YOU.
THE AGENT XXXXX, THE ARRANGER, CO-ARRANGERS AND YOU HEREBY SUBMIT TO THE
NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND NEW YORK STATE COURTS LOCATED IN
THE CITY OF NEW YORK IN CONNECTION WITH ANY DISPUTE RELATED TO THIS COMMITMENT
LETTER OR ANY MATTERS CONTEMPLATED HEREBY
Very truly yours,
Commitment: $300,000,000 ABN AMRO Bank N.V.
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Its: Vice President
-------------------------------
By: /s/ Xxxxxxx XxXxxx
-----------------------------------
Its: Vice President
-------------------------------
Commitment: $250,000,000 BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ Xxxxxxx Xxxxxxxxx
-----------------------------------
Its: Vice President
-------------------------------
Commitment: $250,000,000 BANKERS TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Its: Vice President
-------------------------------
Commitment: $250,000,000 NATIONSBANK N.A.
By: /s/ Xxxxxx X. Xxxx
-----------------------------------
Its: Vice President
-------------------------------
BANCAMERICA XXXXXXXXX XXXXXXXX
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------
Its: Vice President
-------------------------------
NATIONSBANC XXXXXXXXXX SECURITIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Its: Vice President
-------------------------------
BT XXXX XXXXX INCORPORATED
By: /s/ Xxxxxxxxxxx Xxxxxxx
-----------------------------------
Its: Vice President
-------------------------------
Accepted and Agreed to
this 22nd day of December, 1997
X. X. XXXXX & CO.
By: /s/ Xxxx XxXxxxx
-----------------------------------
Its: Vice President and Treasurer
-------------------------------
By:
-----------------------------------
Its:
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EXHIBIT A
X. X. XXXXX & CO.
SUMMARY OF TERMS AND CONDITIONS
$1,600,000,000 GLOBAL REVOLVING CREDIT FACILITIES
TRANSACTION
SUMMARY: X. X. Xxxxx & Co. ("X. X. Xxxxx" or the "Company"),
Cryovac Acquisition Corp. ("Mergco", a subsidiary of
X. X. Xxxxx) and Sealed Air Corporation ("SAC") have
entered into that certain Agreement and Plan of
Merger (the "Merger Agreement") dated as of August
14, 1997 attached to which is a form of
Distribution Agreement (the "Distribution
Agreement") (the transaction and events described
in the Merger Agreement and the Distribution
Agreement being herein referred to as the
"Transaction"). X. X. Xxxxx and Cryovac, Inc.
("Cryovac"), the subsidiary to which X. X. Xxxxx'x
packaging business (the "Grace Packaging Business")
has been or will be contributed, will borrow a
portion of the facilities, the proceeds of which
will be transferred (the "Grace Chemicals
Contribution") to Grace Specialty Chemicals, Inc.
("Grace Chemicals", the subsidiary of X. X. Xxxxx
that will hold, directly or indirectly, X. X.
Xxxxx'x non-packaging business), or a subsidiary
thereof, as provided in the Distribution Agreement.
X. X. Xxxxx will then be recapitalized, and, among
other things, will distribute the shares of Grace
Chemicals to its shareholders. Immediately
thereafter Mergco will merge (the "Merger") into
Sealed Air Corporation ("SAC"). SAC will be the
surviving corporation of such merger and will
become a wholly-owned subsidiary of X. X. Xxxxx,
and X. X. Xxxxx will change its name to Sealed
Air Corporation ("New Sealed Air").
BORROWERS: X. X. Xxxxx and Xxxxxxx. After completion of the
Merger X.X. Xxxxx may, without further approval,
cause SAC to be a Borrower.
At the Company's option, additional other
wholly-owned direct or indirect subsidiaries
(other than Grace Chemicals and its
subsidiaries) may be direct borrowers
("Subsidiary Borrowers", which term also
includes Cryovac and, if SAC becomes a Borrower,
SAC) under the Facilities if such subsidiaries
are mutually acceptable to the Company and (i)
the Administrative Agent, in the case of
subsidiaries being added to the Global Revolving
Credit Facility for U.S. and Alternate Currency
Borrowings and (ii) the Administrative Agent and
the relevant Country Specific Lender, in the
case of subsidiaries being added to the Global
Revolving Credit Facility for Designated
Currency Borrowings.
CO-OBLIGORS: After completion of the Merger, at the option of New
Sealed Air, SAC may become a co-obligor with X. X.
Xxxxx/New Sealed Air and assume joint and several
liability for all of X. X. Xxxxx'x/New Sealed Air's
obligations under the facilities.
GUARANTEE: All Borrowings will be unconditionally guaranteed by
X. X. Xxxxx, Cryovac and all material U.S.
Subsidiaries other than Grace Chemicals and its
subsidiaries.
ADMINISTRATIVE
AGENT: ABN AMRO Bank N.V. (the "Administrative Agent").
ARRANGER: ABN AMRO Bank N.V.
DOCUMENTATION
AGENT: Bankers Trust Company
CO-SYNDICATION
AGENTS: BancAmerica Xxxxxxxxx Xxxxxxxx and NationsBank N.A.
AGENT BANKS: ABN AMRO Bank N.V., Bank of America National Trust
and Savings Association, Bankers Trust Company and
NationsBank N.A.
CO-ARRANGERS: BancAmerica Xxxxxxxxx Xxxxxxxx, XX Xxxx.Xxxxx
Incorporated, and NationsBanc Xxxxxxxxxx Securities,
Inc.
GLOBAL
REVOLVING CREDIT
FACILITIES: 1) 5-year $1,000,000,000 Global Revolving Credit
Facility, with a sub-limit for U.S. Dollar
denominated Letters of Credit, to be determined,
and a swingline facility.
2) 364-day $600,000,000 Global Revolving Credit
Facility.
BORROWINGS: Borrowings will be available under either facility
as follows:
U.S. and Alternate Currency Borrowings:
Committed advances made pro rata by the Lenders
based upon their available commitments to the
Company and certain Subsidiary Borrowers who are
approved by the Administrative Agent.
Competitive bid advances in U.S. Dollars at a
fixed interest rate with maturities of 1-180
days may be requested. Bid Loans shall be
deemed to effect a pro rata utilization of the
Commitments of all Lenders under the applicable
facility and shall not reduce the successful
bidder's obligation to lend its pro rata share
of the remaining undrawn Facility. Each Lender
will represent that on the closing date no
payments by the Borrowers under the facilities
are subject to withholding taxes. Alternate
Currencies available include U.S. Dollars,
Belgian Francs, British Pounds, Dutch Guilders,
French Francs, Italian Lira, German Marks,
Swedish Krona, Norwegian Krone, Canadian
Dollars, Japanese Yen, Australian Dollars and
Spanish Pesetas, and other freely transferable
currencies approved by the Administrative Agent.
Designated Currency Borrowings: The Company
may, upon five Business Days notice to the
Administrative Agent, request that one or more
Lenders (each a "Country Specific Lender")
commit, subject to a sub-limit, to make foreign
currency loans to the Company or a Subsidiary
Borrower directly out of such Lenders' local
branch or affiliate. A Lender may, but shall
have no obligation to, make such a commitment.
While in effect, any Designated Currency
commitment by a Lender shall reduce dollar for
dollar such Lender's available commitment. The
relevant Borrower and Country Specific Lender
shall agree, among other things, on the
maturity, pricing and borrowing procedures
applicable to loans made by such Country
Specific Lender.
Swingline Loans. The Company may request the
Administrative Agent (in such capacity, the
"Swingline Lender") to make Swingline Loans
available to the Company in an outstanding amount
not to exceed $20,000,000. All Swingline Loans will
be made and maintained as Base Rate Loans or at
other short term fixed rates as agreed between the
Company and the Swingline Lender. Each Lender will
be unconditionally obligated to reimburse the
Swingline Lender for its pro rata share of all
Swingline Loans made by the Swingline Lender.
LETTERS OF CREDIT: The Administrative Agent will act as the Letter of
Credit Issuer (the "Issuer"). Each Lender shall be
unconditionally obligated to reimburse the Issuer
for its pro rata share of any drawing paid by the
Issuer under any Letter of Credit and, accordingly,
the Letters of Credit shall be deemed to effect a
pro rata utilization of the Commitments of all
Lenders under the applicable facility.
APPLICABLE
MARGIN: With respect to committed borrowings, the lower of
the rates as set forth on the attached Pricing
Grids. Letter of Credit fees shall be equal to the
applicable LIBOR margin. The Applicable Margin and
Letter of Credit fees will be established at
closing to be effective until the delivery of the
first quarter 1998 financial statements.
FACILITY FEE: The lower of the rates as set forth on the attached
Pricing Grids, calculated on a 365/366 day basis.
UTILIZATION FEE: As set forth on the attached Pricing Grid.
USE OF PROCEEDS: The initial borrowings under the facilities will be
made by X. X. Xxxxx and Cryovac, the proceeds of
which will be used to fund the Grace Chemicals
Contribution in an amount determined as provided in
the Distribution Agreement. Borrowings shall also
be available (i) to refinance outstanding
indebtedness, (ii) to provide working capital,
including the issuance of letters of credit, and
(iii) for other general corporate purposes.
AMORTIZATION: Bullet.
LENDERS: A syndicate of financial institutions acceptable to
the Arranger, Co-Arrangers and the Company.
AVAILABLE
COMMITMENT: Before maturity, the full amount of each Credit
Facility may be borrowed, repaid, and reborrowed,
subject to satisfaction of conditions precedent,
and Company's covenant compliance and notice
requirements. Letters of Credit must expire no
later than the maturity of the 5-Year $1,000,000,000
Global Revolving Credit Facility.
OPTIONAL
COMMITMENT
REDUCTIONS: Upon notice, the Company may irrevocably either
terminate the Credit Facilities or permanently
reduce the Credit Facilities in minimum multiples of
$10,000,000.
OPTIONAL
PREPAYMENTS: Any Borrower may make optional prepayments in
amounts of $2,000,000 or greater, subject to
payment of breakage costs and funding losses. Base
rate drawings may be repaid with same day notice.
U.S. DOLLAR
EQUIVALENT: The Administrative Agent shall determine the U.S.
Dollar equivalent of each loan denominated in a
foreign currency on the first day of the Interest
Period, and as adjusted from time to time
thereafter, applicable to such foreign currency
loan.
INTEREST RATES: Outstanding amounts shall accrue interest according
to the following pricing alternatives, as selected
by the Borrower:
A) Base Rate Option: Interest shall be at the Base
Rate, defined as the higher of (i) the
Administrative Agent's prime rate for U.S.
Dollar loans and (ii) the overnight federal
funds rate plus 50 basis points. Interest shall
be paid quarterly in arrears and shall be
calculated on the basis of the actual number of
days elapsed in a year of 365/366 days.
B) Eurocurrency Option: Interest shall be determined
for periods ("Interest Periods") of 1, 2, 3 or 6
months (as selected by the Borrower) and shall
be at a per annum rate equal to the London
Interbank Offered Rate ("LIBOR") offered to the
Administrative Agent for corresponding deposits
of the relevant currency, plus the Applicable
Margin. Interest shall be paid at the end of
each Interest Period or quarterly, whichever is
earlier and shall be calculated on the basis of
the actual number of days elapsed in a year of
360 days (except that any Loan denominated in
Pounds Sterling and other Designated Currencies
customarily computed on a 365/366 day basis in
accordance with customary Eurocurrency market
practice shall be computed on a 365/366 day
basis).
C) Loans by Country Specific Lenders: The Company
or the relevant Subsidiary Borrower and Country
Specific Lender shall agree on the appropriate
formula and margin for calculating and paying
interest (including a default rate of interest)
on loans made by such Country Specific Lender to
the Company or such Subsidiary Borrower.
D) Bid Rate Loans: Interest at a fixed rate shall be
determined pursuant to a competitive bid
Facility. Fixed rate maturities of 1-180 days
may be requested.
E) Default Interest: Amounts past due shall bear
interest at 2% per annum in excess of the
relevant rate, provided that a Country Specific
Lender and the Company or the relevant
Subsidiary Borrower may designate a different
default rate to apply to loans made by such
Country Specific Lender.
CONDITIONS
PRECEDENT: Customary for transactions of this type, including,
but not limited to:
Closing:
(i) Execution of loan documents and other
documentation related to the Transaction and
requisite shareholder approvals.
(ii) Legal opinions.
(iii) Corporate documents; Proceedings; Officer's
Certificates.
(iv) Satisfactory completion of the Agent Xxxxx' due
diligence review of the Grace Packaging
Business and SAC.
(v) No material adverse change in financial
condition, business, and results of operations
of the Grace Packaging Business, considered as
a whole, or the Grace Packaging Business and
SAC, considered as a whole.
(vi) No material litigation relating to the Grace
Packaging Business other than as previously
disclosed.
(vii) Payment of fees.
Utilizations:
(i) No Default or Potential Default.
(ii) Accuracy of Representations and Warranties.
(iii) Timely delivery of appropriate drawing notice.
DRAWINGS: A. U. S. Dollar Base Rate Drawings: In minimum
amounts of $2,000,000 and incremental multiples
of $500,000, to be determined, with same day
notice to the Administrative Agent, such notice
to be received by the Administrative Agent
prior to 12:00 noon (New York time).
B. U.S. Dollar LIBOR Drawings: For Interest
Periods of 1, 2, 3 and 6 months and in minimum
amounts of $2,000,000 and incremental multiples
of $500,000, upon three Business Days prior
written notice to the Administrative Agent.
C. Alternate Currency LIBOR Drawings: For Interest
Periods of 1, 2, 3 and 6 months and in minimum
amounts approximately equivalent to $2,000,000
and incremental multiples of 500,000 units of
the relevant currency, upon four Business Days
prior written notice to the Administrative
Agent.
D. Loans by Country Specific Lenders: As agreed
between the relevant Country Specific Lender and
the Company or a Subsidiary Borrower in minimum
amounts approximately equivalent to $2.000,000
and incremental multiples of 500,000 units of
the relevant currency.
SECURITY: Unsecured.
REPRESENTATIONS
& WARRANTIES: Usual and customary for facilities of this type for
similar borrowers including (provided that the
following shall not apply to Grace Chemicals and its
subsidiaries):
1. Corporate Status.
2. Corporate Power and Authority.
3. No Violation.
4. Governmental Approvals.
5. Financial Statements; Financial Condition;
Undisclosed Liabilities; etc.
6. Litigation.
7. True and Complete Disclosure.
8. Use of Proceeds; Margin Requirements.
9. Tax Return and Payments.
10. Compliance with ERISA.
11. Subsidiaries.
12. Compliance with Statutes, etc.
13. Environmental Matters.
14. Investment Company Act.
15. Public Utility Holding Company Act.
16. Patents, Licenses, Franchises and Formulas.
17. Properties.
18. Labor Relations.
19. Indebtedness.
COVENANTS: Usual and customary for transactions of this type
for similar borrowers, including the following
(provided that the following shall not apply to
Grace Chemicals and its subsidiaries):
Affirmative Covenants:
1. Information Covenants.
2. Books, Records and Inspections.
3. Maintenance of Property, Insurance.
4. Corporate Franchises.
5. Compliance with Statutes.
6. ERISA.
7. Performance of Obligations.
8. Payment of Taxes.
9. Consummation of Merger within 5 days of first
utilization.
Negative Covenants:
I. Liens.
2. Consolidation, Merger, Disposition of Assets.
etc. (other than as contemplated by the Merger
Agreement)
3. Subsidiary Indebtedness.
4. Limitation on Asset Transfers to Foreign
Subsidiaries.
5. Business.
FINANCIAL
COVENANTS: Financial covenants to be calculated on a rolling
four quarter basis, with levels to be determined:
1. Minimum EBITDA/Interest plus dividends on
Preferred Stock.
2. Maximum Total Debt/EBITDA.
EVENTS OF
DEFAULT: Usual and customary for transactions of this type
for similar borrowers, including, but not limited
to, the following for the Company and its
subsidiaries (other than Grace Chemicals and its
subsidiaries):
1. Failure to pay any interest or fees payable
under the Credit Agreement with two day grace
period or failure to pay principal when due.
2. Failure to meet covenants, with appropriate
grace periods where applicable.
3. Representations or warranties false in any
material respect when made.
4. Cross default to other material indebtedness.
5. Insolvency and bankruptcy.
6. Judgments.
7. Validity of Guaranty.
8. Change of Control (other than as a result of the
Transaction).
9. ERISA.
CAPITAL ADEQUACY &
YIELD PROTECTION: The Definitive Credit Documentation shall contain
yield protection provisions appropriate for
transactions of this type, including, but not
limited to, indemnity provisions relating to
increased reserve requirements, changes in law or
circumstances, possible future illegality of
interest options, "gross up" for taxes (other than
on net income), possible inability to determine
market rate, capital adequacy, interest period
indemnity and breakage, and increased costs,
redeployment costs, and consequential loss.
INDEMNIFICATION: Borrowers shall indemnify the Administrative Agent
and the Lenders, and their respective affiliates
for all reasonable costs, liabilities and expenses
arising out of the Credit Facilities, except to the
extent caused by gross negligence or willful
misconduct of the party seeking indemnity.
Borrowers shall also indemnify Lenders from any
loss, cost or expense incurred as a result of a
prepayment for any reason (including, without
limitation, prepayments resulting from the
occurrence of an event of default) on any day other
than the last day of the applicable Interest
Period, failure to borrow a loan after giving
notice, or failure to prepay a loan after giving
notice of its intent to make such a prepayment.
The Lenders shall indemnify the Administrative Agent
for any loss, cost or expense the Administrative
Agent may incur which arises out of the
transactions described herein and which is not
directly attributable to the gross negligence or
willful misconduct of the Administrative Agent.
ASSIGNMENTS &
PARTICIPATIONS: The Borrowers may not assign any of their rights or
obligations under the Credit Agreement. Assignments
of commitments by Xxxxxxx are subject to the
consents of the Company and the Administrative
Agent, such consents not to be unreasonably
withheld, in minimum amounts of $10,000,000.
Participations shall be without restriction,
provided that voting rights of participants shall
be limited to changes in provisions relating to
commitments, payments, interest rates, fees,
collateral, guarantees and maturity. The Company
shall authorize the Lenders to release confidential
information to prospective assignees and
participants, subject to confidentiality
undertakings.
DEFINITIONS: "EBITDA" is defined as consolidated net earnings
before interest expense, depreciation, amortization,
income tax expense, any non-cash contributions
or accruals to deferred profit sharing and
deferred compensation plans, any non-cash gains
or losses on asset sales and any non-cash gains
or losses resulting from the cumulative effect
of changes in accounting principles. EBITDA
will be calculated on a rolling four quarter
basis. EBITDA shall include any acquisitions
which have been owned less than one year on a
pro-forma basis, as if they had been owned for
the entire applicable Test Period.
Calculations of financial covenants which require a
rolling four quarter period shall be modified to
adjust for calculation periods as a result of the
Merger.
GOVERNING LAW: State of New York.
PRICING GRID
Pricing based on this grid shall be determined by reference to the Company's
senior unsecured long-term debt ratings as issued by S & P and Xxxxx'x. (All
spreads and fees in basis points)
364 DAY FACILITY:
-------------------------------------------------------------------------
S&P/Xxxxx'x
Rating LIBOR Margin Facility Fee Drawn Cost*
-------------------------------------------------------------------------
A-/A3 or Higher 19.0 6.0 25.0
-------------------------------------------------------------------------
BBB+/Baa1 22.5 7.5 30.0
-------------------------------------------------------------------------
BBB/Baa2 28.5 9.0 37.5
-------------------------------------------------------------------------
BBB- or Baa3 32.5 12.5 45.0
-------------------------------------------------------------------------
BB+/Ba1 45.0 17.5 62.5
-------------------------------------------------------------------------
BB/Ba2 or lower 55.0 20.0 75.0
-------------------------------------------------------------------------
5 YEAR FACILITY:
-------------------------------------------------------------------------
S&P/Xxxxx'x LIBOR Margin Facility Fee Drawn Cost*
Rating
-------------------------------------------------------------------------
A-/A3 or Higher 17.0 8.0 25.0
-------------------------------------------------------------------------
BBB+/Baa1 20.5 9.5 30.0
-------------------------------------------------------------------------
BBB/Baa2 25.0 12.5 37.5
-------------------------------------------------------------------------
BBB- or Baa3 30.0 15.0 45.0
-------------------------------------------------------------------------
BB+/Ba1 42.5 20.0 62.5
-------------------------------------------------------------------------
BB/Ba2 or lower 50.0 25.0 75.0
-------------------------------------------------------------------------
------------
* The LIBOR Margin is calculated on the basis of a 360-day year. The Facility
Fee is calculated on a basis of 365/366-day year.
If the ratings as issued by S& P and Xxxxx'x differ by one rating category, the
higher rating shall determine pricing.
If the ratings as issued by S& P and Xxxxx'x differ by two rating categories,
the rating which falls in the middle of the two published ratings shall
determine pricing.
Utilization Fee: An additional utilization fee of 5 basis points will be added
to the LIBOR Margin at any time that outstanding amounts under the Credit
Facilities are greater than $800,000,000.
PRICING GRID
Pricing based on this grid shall be determined by reference to a Total
Debt/EBITDA ratio for the Company calculated on rolling four quarter basis:
364 DAY FACILITY:
-------------------------------------------------------------------------
Total Debt/EBITDA LIBOR Margin Facility Fee Drawn/Cost*
-------------------------------------------------------------------------
less than 1.00X 19.0 6.0 25.0
--------------------------------------------------------------------------
less than 1.50X 22.5 7.5 30.0
--------------------------------------------------------------------------
less than 2.00X 28.5 9.0 37.5
--------------------------------------------------------------------------
less than 2.50X 32.5 12.5 45.0
--------------------------------------------------------------------------
less than 3.00X 45.0 17.5 62.5
--------------------------------------------------------------------------
greater than 3.00X 55.0 20.0 75.0
--------------------------------------------------------------------------
5 YEAR FACILITY
-------------------------------------------------------------------------
Total Debt/EBITDA LIBOR Margin Facility Fee Drawn/Cost*
-------------------------------------------------------------------------
less than 1.00X 17.0 8.0 25.0
----------------------------------------------------------------------------
less than 1.50X 20.5 9.5 30.0
----------------------------------------------------------------------------
less than 2.00X 25.0 12.5 37.5
----------------------------------------------------------------------------
less than 2.50X 30.0 15.0 45.0
----------------------------------------------------------------------------
less than 3.00X 42.5 20.0 62.5
----------------------------------------------------------------------------
greater than 3.00X 50.0 25.0 75.0
----------------------------------------------------------------------------
------------
* The LIBOR Margin is calculated on the basis of a 360-day year. The Facility
Fee is calculated on a basis of 365/366-day year.
Utilization Fee: An additional utilization fee of 5 basis points will be added
to the LIBOR Margin at any time that outstanding amounts under the Credit
Facilities are greater than $800,000,000.
