EXHIBIT 10(mm)
CREDIT AGREEMENT
between
QUAKER CHEMICAL CORPORATION
and
ABN AMRO BANK N.V.
________________________________
Dated as of April 12, 2002
________________________________
$20,000,000
________________________________________________________________________________
CREDIT AGREEMENT, dated as of April 12, 2002, between QUAKER CHEMICAL
CORPORATION (the "Borrower"), and ABN AMRO Bank N.V., New York Branch (the
"Bank"). Unless otherwise defined herein, all capitalized terms used herein and
defined in Section 9 are used herein as so defined.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, subject to and upon the terms and conditions herein set forth, the
Bank is willing to make available the credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
Section 1. Amount and Terms of Credit
1.01 Commitment. Subject to and upon the terms and conditions herein set
forth, the Bank agrees to make a loan or loans (each, a "Loan" and,
collectively, the "Loans") to the Borrower, which Loans (i) shall be made at any
time and from time to time on and after the Effective Date and prior to the
Expiry Date; (ii) may be repaid and reborrowed in accordance with the provisions
hereof; and (iii) shall not exceed at any time outstanding that aggregate
principal amount of $20,000,000.
1.02 Minimum Borrowing Amounts, Etc. The aggregate principal amount of
each Loan shall not be less than the Minimum Borrowing Amount. More than one
Loan may be incurred on any day; provided that at no time shall there be
outstanding more than eight Loans.
1.03 Notice of Borrowing. Whenever the Borrower desires to incur a Loan,
it shall give written notice to the Bank, prior to (i) 12:00 Noon (New York
time), at least three Business Days' prior to the date on which the Loan will be
disbursed, if the requested Loan is to be a Eurodollar Loan, or (ii) 3:00 P.M.
(New York time) on the date on which the Loan will be disbursed if the requested
Loan is to be a Cost of Funds Loan or a Prime Rate Loan. Each such notice (each
a "Notice of Borrowing") shall, except as provided in Section 1.09(b), be
irrevocable, shall be executed by an Authorized Financial Officer of the
Borrower and shall be in the form of Exhibit A, appropriately completed to
specify: (i) the aggregate principal amount of the Loan requested; (ii) the date
of such borrowing (which shall be a Business Day); (iii) the Interest Rate Basis
selected for the Loan; and (iv) if applicable, the Interest Period to be
initially applicable thereto and (v) the Maturity Date of such Loan (provided
that the Maturity Date shall in no event be later than the Expiry Date).
1.04 Disbursement of Funds. On the date specified in the respective Notice
of Borrowing, the Bank will make available to the Borrower the amount of the
Loan to be made on such date (if any) by depositing such amount, in funds of
same day availability, to the account of the Borrower, on the books of the Bank;
or by wire transfer of such funds in accordance with the Borrower's prior
written instructions.
1.05 Note. (a) The Borrower's obligation to pay the principal of, and
interest on, the Loans shall be evidenced by a promissory note substantially in
the form of Exhibit B with blanks appropriately completed in conformity herewith
(the "Note").
(b) The Note shall (i) be executed by the Borrower, (ii) be payable to
the order of the Bank and be dated the Effective Date, (iii) be in a stated
principal amount equal to the
Commitment, and shall be payable in the principal amount of the Loans evidenced
thereby, (iv) mature on the Expiry Date, (v) bear interest as provided in
Section 1.06, (vi) be subject to voluntary prepayment as provided in Section
3.01, and (vii) be entitled to the benefits of the Agreement.
(c) The Bank will note on its internal records the amount of each Loan
made by it and each payment in respect thereof and will prior to any transfer of
the Note endorse on the reverse side thereof the outstanding principal amount of
Loans evidenced thereby. Failure to make any such notation shall not affect the
Borrower's obligations in respect of such Loans.
1.06 Interest. (a) The unpaid principal amount of each Loan shall bear
interest from the date of the disbursement thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable Margin plus the relevant Interest Rate Basis.
(b) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan shall bear interest at a rate per annum
(recomputed daily) equal to 2.55% per annum in excess of the average daily cost
to the Bank (as determined by the Bank, which determination shall be conclusive
and binding, absent manifest error) of overnight funds in the interbank market
in amounts comparable to the respective Loan.
(c) Interest shall accrue from and including the date of any Loan to but
excluding the date of any repayment thereof and shall be payable in respect of
the outstanding amount of each Loan, (i) in the case of any Prime Loan, on the
last Business Day of each consecutive calendar month, (ii) on the last day of
each Interest Period applicable thereto and, in the case of an Interest Period
in excess of three months, on each date occurring at three month intervals after
the first day of such Interest Period, and (iii) on any prepayment (on the
amount prepaid), (iv) at maturity (whether by acceleration or otherwise) and,
(v) after such maturity (as such maturity may be extended pursuant to Section
1.07(b)), on demand.
(d) All computations of interest hereunder shall be made in accordance
with Section 10.06(b).
(e) The Bank, upon determining the interest rate for any Loan for any
Interest Period, shall promptly notify the Borrower thereof.
1.07 Interest Periods.
(a) At the time the Borrower gives a Notice of Borrowing in respect of
the making of a Loan (in the case of the initial Interest Period applicable
thereto) or in the case of a notice given at the expiration of an Interest
Period, (i) prior to 12:00 Noon (New York time) on the third Business Day prior
to the expiration of an Interest Period (if the next Interest Rate Basis will be
the Eurodollar Rate) or (ii) prior to 3:00 P.M. on the date of the expiration of
the Interest Period (if the next Interest Rate Basis will be the Cost of Funds
Rate or the Prime Rate), it shall have the right to elect by giving the Bank
written notice (or telephonic notice promptly confirmed in writing) of the
Interest Period and Interest Rate Basis applicable to such Loan. If the Interest
Rate Basis is the Eurodollar Rate or the Cost of Funds Rate, the Interest Period
shall, at the option of the Borrower be any period not exceeding six months.
Notwithstanding anything to the contrary contained above:
(i) the initial Interest Period for any Loan shall commence on the
date of such Loan and each Interest Period occurring thereafter in respect
of such Loan shall commence on the day on which the next preceding Interest
Period expires;
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(ii) if any Interest Period for a Loan for which the Interest Rate
Basis is the Eurodollar Rate, begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day of
such calendar month;
(iii) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided, that if the Interest Rate Basis for the
respective Loan is the Eurodollar Rate and if such succeeding Business Day
falls in the following calendar month, such Interest Period shall expire on
the next preceding Business Day;
(iv) no Interest Period may be elected if it would extend beyond
the Maturity Date; and
(v) no Interest Period may be elected at any time when a Default
under Section 7.01 or Event of Default is then in existence.
(b) If by 3:00 P.M. on the day of the expiration of any Interest Period,
the Borrower (I) has not notified the Bank of its selection of a new Interest
Period and/or a new Interest Rate Basis, (II) has not notified the Bank that it
will repay the respective Loan at the expiration of such Interest Period, and
(III) no Event of Default has occurred and is continuing, then the Borrower
shall be deemed to have converted such Loan to an overnight Cost of Funds Loan
(and the Loan shall not thereupon be considered overdue), which election shall
be deemed to be remade daily and remain in effect until (A) the Borrower repays
such Loan and all accrued interest thereon, (B) selects another Interest Rate
Basis, (C) five consecutive days have elapsed or (D) the Expiry Date. In the
event that such election has continued for five consecutive days, then
thereafter, the Borrower shall be deemed to have selected a Prime Loan, which
election shall be deemed to be remade daily and remain in effect until (A) the
Borrower repays such Loan and all accrued interest thereon, (B) selects another
Interest Rate Basis, or (C) the Expiry Date.
1.08 Maturity of Loans. Each Loan shall mature on its Maturity Date or, in
the case of a Prime Rate Loan, on the Expiry Date. On the applicable date, the
Borrower will pay to the Bank any and all amounts due in connection with such
Loan, which have not theretofore been paid or automatically extended pursuant to
Section 1.07(b).
1.09 Increased Costs, Illegality, Etc. (a) In the event that the Bank
shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period, that, by reason of any changes arising after the date of
this Agreement affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that the Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Loan because of (x) any change since the date of this Agreement in any
applicable law, governmental rule, regulation, guideline, or order (whether
or not having the force of law), or in the interpretation or administration
thereof and including the introduction of any new law or governmental rule,
regulation, guideline, order or request (such as, for example, but not
limited to, a change in official reserve requirements, but, in all events,
excluding reserves required under Regulation D to the extent included in
the computation of the Eurodollar Rate) and/or (y) other circumstances
affecting the interbank markets generally; or
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(iii) at any time since the date of this Agreement, that the making or
continuance of any Loan has become unlawful by compliance by the Bank in
good faith with any law, governmental rule, regulation, guideline or order
(or would conflict with any such governmental rule, regulation, guideline
or order not having the force of law but with which the Bank and
similarly-situated banks customarily comply even though the failure to
comply therewith would not be unlawful), or has become impracticable as a
result of a contingency occurring after the date of this Agreement which
materially and adversely affects the interbank Eurodollar market; then, and
in any such event, the Bank shall (x) on such date and (y) within 10
Business Days of the date on which such event no longer exists give notice
(by telephone confirmed in writing) to the Borrower of such determination.
Thereafter, (x) in the case of clause (i) above, Loans shall no longer be
available until such time as the Bank notifies the Borrower that the
circumstances giving rise to such notice by the Bank no longer exist, and
any Notice of Borrowing given by the Borrower with respect to Loans which
have not yet been incurred shall be deemed rescinded by the borrower, (y)
in the case of clause (ii) above, the Borrower agrees to pay to the Bank,
upon written demand therefor (accompanied by the written notice referred to
below), such additional amounts as shall be required to compensate the Bank
for such increased costs or reductions in amounts received or receivable
hereunder (a written notice as to the additional amounts owed to the Bank,
showing the basis for the calculation thereof (and in the case of any
notice given as a result of a change with any law, governmental rule,
regulation, guideline or order, a description of the relevant provisions of
such law, rule, regulation, guideline or order and, as requested by the
Borrower, a memorandum or an opinion of counsel (the reasonable fees and
expenses of which shall be born by the Borrower) of recognized standing as
to the effect of such change on the Bank), submitted to the Borrower by the
Bank shall, absent manifest error, be final and conclusive and binding upon
all parties hereto) and (z) in the case of clause (iii) above, the Borrower
shall take one of the actions specified in Section 1.09(b) as promptly as
possible and, in any event, within the time period required by law.
(b) At any time that any Loan is affected by the circumstances described in
Section 1.09(a)(ii) or (iii), the Borrower may (and in the case of a Loan
affected pursuant to Section 1.09(a)(iii) the Borrower shall) either (i) if the
affected Loan is then being made pursuant to a pending Notice of Borrowing,
cancel such Notice of Borrowing by giving the Bank telephonic notice (confirmed
promptly in writing) thereof on the same date that the Borrower was notified by
the Bank pursuant to Section 1.09(a)(ii) or (iii)) or (ii) if the affected Loan
is then outstanding, convert such loan together with interest accrued thereon
and any other amounts due thereunder to a Prime Rate Loan. The Bank, upon
determining in good faith that any additional amounts will be payable pursuant
to this Section 1.09(b), will give prompt written notice thereof to the
Borrower, which notice shall set forth the basis of the calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish the Borrower's obligations to pay additional amounts
pursuant to this Section 1.09(b) upon the subsequent receipt of such notice.
(c) If the Bank shall have determined that after the date hereof, the
adoption or effectiveness of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by the Bank with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on the
Bank's capital or assets as a consequence of its commitments or obligations
hereunder to a level below that which the Bank could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration the
Bank's policies with respect to capital adequacy), then from time to time, upon
written demand by the Bank, accompanied by the notice referred to in the last
sentence of
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this clause (c), the Borrower shall pay to the Bank such additional amount or
amounts as will compensate the Bank for such reduction. The Bank, upon
determining in good faith that any additional amounts will be payable pursuant
to this Section 1.09(c), will give prompt written notice thereof to the
Borrower, which notice shall set forth the basis of the calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish the Borrower's obligations to pay additional amounts
pursuant to this Section 1.09(c) upon the subsequent receipt of such notice.
1.10 Compensation. The Borrower agrees to compensate the Bank, upon its
written request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by the Bank to
fund its Loans but excluding loss of anticipated profit with respect to any
Loans) which the Bank may sustain: (i) if for any reason (other than a default
by the Bank ) a Loan does not occur on a date specified therefor in a Notice of
Borrowing (whether or not withdrawn by the Borrower or deemed withdrawn pursuant
to Section 1.09(b)); (ii) if any repayment or conversion of any Loan occurs on a
date which is not the last day of an Interest Period applicable thereto; (iii)
if any prepayment of any Loan is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Loans when required by the terms of this
Agreement or (y) an election made pursuant to Section 1.09(b). Calculation of
all amounts payable to the Bank under this Section 1.10 shall be made as though
the Bank had actually funded its relevant Loan through the purchase of a deposit
bearing interest at the Eurodollar Rate in an amount equal to the amount of that
Loan, having a maturity comparable to the relevant Interest Period and through
the transfer of a Eurodollar deposit from an offshore office of the Bank to a
domestic office of the Bank in the United States of America; provided, however,
that the Bank may fund each of its Loans in any manner it sees fit and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this Section 1.10.
1.11 Change of Lending Office. the Bank agrees that, upon the occurrence
of any event giving rise to the operation of Section 1.09(a)(ii) or (iii), or
1.09(c) with respect to the Bank, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of the Bank) to
designate another lending office for any Loans affected by such event; provided,
that such designation is made on such terms that, in the sole judgment of the
Bank, the Bank and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequences of the event giving
rise to the operation of any such Section. Nothing in this Section 1.11 shall
affect or postpone any of the obligations of the Borrower or the right of the
Bank provided in Section 1.09.
1.12 Extension of Expiry Date. On any Business Day not less than 60 nor
more than 90 days prior to the Expiry Date then in effect, the Borrower may, by
written notice to the Bank, request that the Expiry Date be extended for an
additional 364 days. The Bank may accept or reject such request in its sole
discretion. The Bank will notify the Borrower of its decision, in writing, not
less than 45 days prior to the Expiry Date then in effect. If the Bank shall
fail to give such notice, it shall be deemed to have rejected such request.
Section 2. Fees; Commitments
2.01 Facility Fee. The Borrower agrees to pay to the Bank a facility fee
(the "Facility Fee") for the period from the Effective Date to but not including
the date the Commitment has been terminated, at a rate per annum equal to 0.20
per cent per annum, payable on the aggregate amount of the Commitment (as the
same may be reduced in accordance with
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Section 2.02), whether used or unused. The Facility Fee shall be computed in
accordance with Section 10.06.
2.02 Voluntary Reduction of Commitments. Upon at least three Business
Days' prior written notice (or telephonic notice promptly confirmed in writing)
to the Bank the Borrower shall have the right, without premium or penalty, to
terminate or partially reduce the unutilized Commitment; provided, that any
partial reduction pursuant to this Section 2.02 shall be in the amount of at
least $250,000.
2.03 Termination of Commitments. The Commitment shall terminate on the
Expiry Date as extended from time to time in accordance with the terms hereof.
Section 3. Payments
3.01 Voluntary Prepayments. The Borrower shall have the right to prepay
the Loans, in whole or in part, without premium or penalty except as otherwise
provided in this Agreement, from time to time on the following terms and
conditions: (i) the Borrower shall give the Bank written notice (or telephonic
notice promptly confirmed in writing) of its intent to prepay the Loans, the
amount of such prepayment and the specific Loans(s) to which prepayment shall be
applied, which notice shall be given by the Borrower prior to 12:00 Noon (New
York time) at least three Business Days prior to the date of such prepayment in
the case of Eurodollar Loans, or prior to 3:00 P.M. (New York time) on the date
of such prepayment in the case of Cost of Funds Loans; and (ii) each prepayment
shall be in an aggregate principal amount of at least $250,000; provided, that
no partial prepayment of a Loan shall reduce the aggregate principal amount of
the Loans outstanding to an amount less than the Minimum Borrowing Amount
applicable thereto; and provided further that the Borrower shall comply with
Section 1.10 hereof.
3.02 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the Bank not
later than 3:00 P.M. (New York time) on the date when due and shall be made in
immediately available funds and in lawful money of the United States of America
at the office of the Bank designated to receive notices pursuant to Section
10.03 hereof, it being understood that written, telex or facsimile transmission
notice by the Borrower to the Bank to make a payment from the funds in the
Borrower's account at the Bank shall constitute the making of such payment to
the extent of such funds held in such account. Any payments under this Agreement
which are made later than 3:00 P.M. (New York time) shall be deemed to have been
made on the next succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a Business Day, the
due date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.
3.03 Net Payments. (a) All payments made by the Borrower hereunder or
under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 3.03(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of the Bank pursuant to the laws
of the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of the Bank is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect to such non-excluded taxes, levies, imposts, duties,
fees, assessments or other charges (all such
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non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, the Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement or under the Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein or in
the Note. The Borrower will furnish to the Bank within 45 days after the date
the payment of any Tax is due pursuant to applicable law certified copies of tax
receipts evidencing such payment by the Borrower. The Borrower agrees to
indemnify and hold harmless the Bank, and reimburse the Bank upon its written
request, for the amount of any Taxes so levied or imposed and paid by the Bank.
(b) The Bank agrees to deliver to the Borrower prior to the Effective Date,
an accurate and complete original signed copy of Internal Revenue Service Form
W-8 ECI (or successor form) certifying the Bank's entitlement to a complete
exemption from United States Withholding Tax with respect to payments to be made
under this Agreement and under the Note.
Section 4. Conditions
4.01 Conditions Precedent to the Effective Date. This Agreement shall
become effective on the date (the "Effective Date") on which the following
conditions shall have been satisfied:
(a) Execution of Agreement. The Borrower and the Bank shall have signed
counterparts of this Agreement and shall have delivered same each to the other;
(b) Note. On the Effective Date, there shall have been delivered to the
Bank the Note executed by the Borrower in the amount, maturity and as otherwise
provided herein;
(c) Corporate Proceedings. On the Effective Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the Note shall be reasonably
satisfactory in form and substance to the Bank, and the Bank shall have received
all information and copies of all certificates, documents and papers, including
good standing certificates and any other records of corporate proceedings and
governmental approvals, if any, which the Bank reasonably may have requested in
connection therewith, such documents and papers, where appropriate, to be
certified by proper corporate or governmental authorities;
provided, however, that if the Effective Date shall not have occurred on or
before the 30th day after the Bank shall have executed and delivered to the
Borrower a counterpart hereof, then this Agreement shall be deemed terminated.
4.02. Conditions Precedent to Loans. The obligation of the Bank to make
each Loan hereunder is subject, at the time of the making of each such Loan, to
the satisfaction of the following conditions:
(a) Effectiveness. The Effective Date shall have occurred.
(b) No Default; Representations and Warranties. At the time of the making
of each Loan and also immediately after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and warranties
contained herein and in the respective Notice of Borrowing shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of the making
of such Loan, unless stated to relate to a specific earlier date, in which case
such
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representations and warranties shall be true and correct in all material
respects as of such earlier date.
(c) Notice of Borrowing. The Bank shall have received a Notice of
Borrowing in respect of such Loans satisfying the requirements of Section 1.02.
The acceptance of the benefits of each Loan shall constitute a
representation and warranty by the Borrower to the Bank that all of the
applicable conditions specified above exist as of the date of such Loan. All of
the certificates, legal opinions and other documents and papers referred to in
Section 4.01 shall be reasonably satisfactory in form and substance to the Bank.
Section 5. Representations and Warranties
In order to induce the Bank to enter into this Agreement and to make the
Loans provided for herein, the Borrower makes the following representations and
warranties, all of which shall survive the execution and delivery of this
Agreement and the making of the Loans.
5.01 Corporate Status. The Borrower is a corporation duly existing and in
good standing under the laws of the Commonwealth of Pennsylvania; each Principal
Subsidiary is a corporation duly existing and in good standing under the laws of
the jurisdiction of its respective incorporation; and the Borrower and each
Principal Subsidiary is duly qualified and in good standing as a foreign
corporation authorized to do business in each jurisdiction where, because of the
nature of its activities or properties, such qualification is required, except
where the failure to be so qualified would not have a Material Adverse Effect.
The Borrower and each Principal Subsidiary, respectively, has all corporate
powers and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
5.02 Power and Authority. The Borrower has the corporate power and
authority to execute, deliver and carry out the terms and provisions of the
Credit Documents and has taken all necessary corporate action to authorize the
execution, delivery and performance of the Credit Documents. The Borrower has
duly executed and delivered each Credit Document and each such Credit Document
constitutes the legal, valid and binding obligation of the Borrower enforceable
in accordance with its terms, except to the extent that the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws generally affecting creditors' rights, by equitable
principles (regardless of whether enforcement is sought in equity or at law) and
by principles of good faith and fair dealing.
5.03 No Violation. Neither the execution, delivery or performance by the
Borrower of the Credit Documents nor compliance by it with the terms and
provisions thereof, nor the consummation of the transactions contemplated
therein, (i) will contravene any applicable provision of any law, statute, rule
or regulation, or any material order, writ, injunction or decree binding upon
the Borrower of any court or governmental instrumentality, (ii) will conflict
with or result in any breach of, any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of the Borrower or any of its Principal Subsidiaries pursuant
to the terms of any indenture, mortgage, deed of trust, or other material
instrument or agreement to which the Borrower is a party or by which it or any
of its property or assets are bound or to which it is subject or (iii) will
violate any provision of the Certificate of Incorporation or By-Laws of the
Borrower.
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5.04 Litigation. There are no actions, suits or proceedings pending or, to
the knowledge of the Borrower, threatened with respect to the Borrower or any
Subsidiary (i) in which there is a reasonable possibility of an adverse decision
which could have Material Adverse Effect or (ii) that in any manner draws into
question the validity of any material provision of any Credit Document.
5.05 Use of Proceeds; Margin. (a) The proceeds of all Loans shall be
utilized for the general corporate and working capital purposes of the Borrower.
(b) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate the provisions of Regulation T, U or X of the
Board of Governors of the Federal Reserve System and no part of the proceeds of
any Loan will be used to purchase or carry any Margin Stock or to extend credit
for the purpose of purchasing or carrying any Margin Stock.
5.06 Governmental Approvals. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required in
connection with (i) the execution, delivery and performance of any Credit
Document or (ii) the legality, validity, binding effect or enforceability of any
Credit Document.
5.07 Investment Company Act. The Borrower is not an "investment company"
or a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
5.08 Public Utility Holding Company Act. The Borrower is not a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
5.09 Financial Condition; Financial Statement. (a) The consolidated
balance sheet of the Borrower at December 31, 2001 and the related statement of
operations and cash flows of the Borrower for the fiscal period ended as of said
date, which have been certified by PriceWaterhouseCoopers LLP, independent
certified public accountants, copies of which have heretofore been furnished to
the Bank, present fairly in all material respects the financial position of the
Borrower and its Subsidiaries at the date of said statements and their results
of operations and cash flows for the period covered thereby. All such financial
statements have been prepared in accordance with GAAP consistently applied
except to the extent provided in the notes to said financial statements. Except
as disclosed publicly and in writing by the Borrower, nothing has occurred since
December 31, 2001 that has had a Material Adverse Effect.
(b) Except as correctly reflected in the financial statements described
in Section 5.09(a) or in the footnotes thereto and any Indebtedness incurred
under this Agreement, there were as of the Effective Date (and after giving
effect to any Loans made on such date), no material contingent obligation,
contingent liability or liability for taxes or any long-term lease or unusual
forward or long-term commitment, including interest rate or currency swap or
exchange transactions, or with respect to the Borrower or its Subsidiaries which
either individually or in the aggregate would be material to the Borrower and
its subsidiaries on a consolidated basis, except as incurred in the ordinary
course of business subsequent to December 31, 2001.
5.10 Tax Returns and Payments. The Borrower has filed all federal income
tax returns and all other material tax returns, domestic and foreign, required
to be filed by it and has paid all material taxes and assessments payable by it
which have become due, except for those contested in good faith. The Borrower
has at all times paid, or has provided adequate reserves
Page 9
(in the good faith judgment of the management of the Borrower) for the payment
of, all federal, state and foreign income taxes applicable for all prior fiscal
years and for the current fiscal year to date.
5.11 Compliance with ERISA. Each Plan is in substantial compliance with
ERISA and the Code; no Reportable Event has occurred and continues with respect
to a Plan; no Plan is insolvent or in reorganization; no Plan has an Unfunded
Current Liability; no Plan has an accumulated or waived funding deficiency, has
applied for a waiver of the minimum funding standard or an extension of any
amortization period within the meaning of Section 412 of the Code; all
contributions required to be made with respect to a Plan have been timely made;
neither the Borrower nor any ERISA Affiliate has incurred any material liability
to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975
or 4980 of the Code or reasonably expects to incur any material liability
(including any indirect, contingent or secondary liability) under any of the
foregoing Sections with respect to any Plan (other than liabilities of any ERISA
Affiliate which could not, by operation of law or otherwise, become a liability
of the Borrower); no proceedings have been instituted to terminate, or to
appoint a trustee to administer, any Plan; no condition exists which presents a
material risk to the Borrower or any ERISA Affiliate of incurring a liability to
or on account of a Plan pursuant to the foregoing provisions of ERISA and the
Code; neither the Borrower nor any of its ERISA Affiliates has, within the past
six years, withdrawn in a complete or partial withdrawal under Section 4201 or
Section 4204 of ERISA from a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) which would result in a Material Adverse Effect; and no
lien imposed under the Code or ERISA on the assets of the Borrower or any ERISA
Affiliate exists or is likely to arise on account of any Plan.
5.12 Environmental Matters. The Borrower and each Subsidiary is in
compliance with all applicable Environmental Laws, except to the extent that
such failure to comply will not result in, has not resulted in and cannot
reasonably be expected to result in a Material Adverse Effect.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitment remains in
effect, the Note remains outstanding and unpaid or any other amount is owing to
the Bank hereunder, the Borrower shall:
6.01 Financial Statements. Furnish or cause to be furnished to the Bank:
(a) Within 90 days after each fiscal year of the Company, a consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as of the end of
such fiscal year and the related consolidated statements of earnings, cash flows
and changes in common stockholders' equity for such fiscal year, prepared on a
consolidated basis and in conformity with generally accepted accounting
principles, duly certified by independent certified public accountants of
recognized standing selected by the Borrower;
(b) Within 60 days after each quarter (except the last quarter) of each
fiscal year of the Borrower, a copy of unaudited consolidated financial
statements of the Borrower prepared in the same manner as the audited financial
statements referred to in Section 5.09, signed by a proper accounting officer of
the Borrower and consisting of at least a balance sheet as at the close of such
quarter and statements of operations and cash flows for such quarter and for the
period from the beginning of such fiscal year to the close of such quarter;
Page 10
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.02 Certificates; Other Information. Furnish to the Bank:
(a) from time to time such additional information regarding the business,
financial condition and operations of the Borrower and its Subsidiaries as the
Bank may reasonably request;
(b) as soon as possible and in any event within fifteen days after the
same are sent, (i) copies of all financial statements and reports which the
Borrower sends to its shareholders, and (ii) copies of any and all periodic or
special reports filed by the Borrower with any governmental authority, if such
reports indicate any Material Adverse Effect has occurred or is likely to occur,
or if copies thereof are reasonably requested by the Bank.
6.03 Payment of Obligations. If and to the extent the failure to do so
would result in a Material Adverse Effect, pay, discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may be, all
its Indebtedness and other 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 Borrower; and cause each of its
Subsidiaries so to do.
6.04 Conduct of Business and Maintenance of Existence. Except to the extent
that failure to do so would not result in a Material Adverse Effect, 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 and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business; comply with all material
contractual obligations and applicable laws except to the extent that failure to
comply therewith could not reasonably be expected, in the aggregate, to have a
Material Adverse Effect; and cause each of its Subsidiaries so to do. It is
expressly understood and agreed that the Borrower, continuing their respective
general businesses, have at any time the right to implement any changes that
they deem necessary or appropriate in their corporate group structures, provided
that such changes do not result in a Material Adverse Effect.
6.05 Insurance. Maintain, in the name of the Borrower, with financially
sound and reputable insurance companies, insurance with adequate coverage on all
of its properties.
6.06 Books and Records. Keep proper books of records and account in which
full, true and correct entries in conformity with GAAP shall be made of all
dealings and transactions in relation to its business and activities.
6.07 Notices. Promptly, upon gaining actual knowledge thereof, give notice
to the Bank of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any contractual obligation
of the Borrower or (ii) litigation, investigation or proceeding which may exist
at any time between the Borrower and any governmental or administrative body or
agency, which in either case, if not cured or if adversely determined, as the
case may be, would have a Material Adverse Effect;
Page 11
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries in which the amount involved is $10,000,000 or more and not covered
by insurance or in which injunctive or similar relief is sought which might
result in a Material Adverse Effect; and
(d) any Material Adverse Effect on the Borrower.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action (if any) the Borrower proposes to take with respect
thereto.
6.08 Environmental Laws.
(a) If and to the extent the failure to do so would result in a Material
Adverse Effect, comply with, and require compliance by all of its tenants and
subtenants, if any, and each of its Subsidiaries, with all Environmental Laws
and obtain and comply with and maintain, and require that all tenants and
subtenants obtain and comply with and maintain, any and all licenses, approval,
registrations or permits required by Environmental Laws; and
(b) If and to the extent the failure to do so would result in a Material
Adverse Effect, conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all applicable, lawful orders and
directives respecting Environmental Laws and cause each of its Subsidiaries so
to do
6.09 Payment of Taxes. If and to the extent the failure to do any of the
following would result in a Material Adverse Effect, (a) pay and discharge prior
to their becoming delinquent all taxes, assessments and other governmental
charges or levies imposed upon it or its income or upon any of its property or
assets, or upon any part thereof, as well as all lawful claims of any kind
(including claims for labor, materials and supplies) which, if unpaid, would by
law become a Lien upon its property; and (b) cause each of its Principal
Subsidiaries so to do; provided that the Borrower and its Principal Subsidiaries
will not be required to pay any such tax, assessment, charge, levy or claim if
the amount, applicability or validity thereof shall be contested in good faith
by appropriate proceedings or other appropriate actions diligently conducted and
if the Borrower shall have set aside on its books such reserves, if any, with
respect thereto as are required by GAAP and deemed appropriate by the Borrower
and its independent public accountants.
6.10 Further Assurances. From time to time hereafter, execute and deliver,
or cause to be executed and delivered, such additional instruments, certificates
or documents, and will take all such actions, as the Bank may reasonably
request, for the purposes of implementing or effectuating the provisions of the
Loan Documents. Upon the exercise by the Bank of any power, right, privileges or
remedy pursuant to the Loan Documents, which requires any consent, approval,
recording, qualification or authorization of any governmental or administrative
body or agency, the Borrower will execute and deliver, or will cause the
execution and delivery of, all applications, certifications, instruments and
other documents and papers that the Bank may be required to obtain from the
Borrower for such governmental consent, approval, recording, qualification or
authorization.
SECTION 7. NEGATIVE COVENANTS.
Page 12
7.01 Negative Pledge. The Borrower will not, and will not permit any
Principal Subsidiary to, create, assume, incur or suffer to exist any Lien on
any asset now owned or hereafter acquired by it, except for the following (the
"Permitted Liens"):
(a) any Lien on any asset securing Indebtedness incurred or assumed
for the purpose of financing all or any part of the cost of acquiring such
asset; provided that such Lien attaches to such asset concurrently with or
within 90 days after the acquisition thereof;
(b) any lien existing on any asset of any Person at the time such
corporation becomes a Subsidiary and not created in contemplation of such
event;
(c) any Lien on any asset of any Person existing at the time such
corporation is merged or consolidated with or into the Borrower or a
Subsidiary, or existing at the time that such asset was acquired from the
seller on arms' length terms, and, in each case, not created in
contemplation of such acquisition;
(d) Liens for taxes, assessments and governmental charges which are
not delinquent or which are being contested in good faith and by
appropriate proceedings and as to which appropriate reserves are being
maintained;
(e) Liens imposed by statute, ordinance or regulation, such as
materialmen's, mechanics' carriers', workmen's and repairmen's Liens and
other similar Liens arising in the ordinary course of business securing
obligations which (i) are not overdue for a period of more than 30 days
after filing of any notice with respect to, or such Person's otherwise
having notice of, such Lien, (ii) are fully bonded by reputable and
responsible insurers or (iii) involve claims which are being contested in
good faith and by proper proceedings and in respect of which such Person
has set aside adequate cash (or cash equivalent) reserves for the payment
of that portion thereof in excess of $100,000 or has provided such other
assurances as the Bank may approve;
(f) pledges or deposits to secure obligations under workers'
compensation laws, unemployment insurance or social security laws;
(g) Liens incurred to secure the performance of bids, tenders,
contracts (other than for the repayment of borrowed money) or Capital
Leases or to secure statutory obligations or deposits of cash or United
States government bonds securing surety or appeal bonds or to secure
indemnity, performance or other similar bonds, in each case, incurred in
the ordinary course of business;
(h) zoning restrictions, easements, licenses, restriction on the use
of real property or immaterial irregularities in title thereto, which do
not in the aggregate have a material adverse effect on the business or
financial condition of the Borrower and its Subsidiaries;
(i) Liens incurred by any Subsidiary to secure Indebtedness owing to
the Borrower or a wholly-owned Subsidiary;
(j) any Lien arising our of the refinancing, extension, renewal or
refunding of any Indebtedness secured by any Lien permitted by any of the
foregoing clauses of this Section, provided that such Indebtedness is not
increased and is not secured by any additional assets; and
(k) Liens not otherwise permitted by the foregoing clauses of this
Section securing Indebtedness in an aggregate principal amount at any time
outstanding not to exceed the greater of $10,000,000 and 15% of
Consolidated Net Worth.
Page 13
7.02 Dissolutions and Mergers. The Borrower shall not merge into or
consolidate with or into any corporation, unless, after giving effect to such
merger or consolidation, (a) the Borrower is the surviving corporation; or (b)
(i) no Default or Event of Default shall then exist and (ii) the surviving
corporation shall assume all of the obligations of the Borrower hereunder.
7.03 Disposition of Assets. The Borrower and its Principal Subsidiaries
shall not sell, assign, or transfer all or a substantial portion of its
consolidated assets, or its consolidated accounts receivable, other than in the
ordinary course of business.
7.04 Conduct of Business. The Borrower shall not make or permit to be
made any material change in the character of its business as carried on at the
date of this Agreement and will not allow any Principal Subsidiary so to do.
7.05 Use of Proceeds. The Borrower shall not use any part of the
proceeds of any credit extended under this Agreement or the Note to purchase or
carry, or to reduce or retire any indebtedness incurred to purchase or carry,
any margin stock (as defined in Regulation U of the Board of Governors of the
Federal Reserve System) or to extend credit to any Person for the purpose of
purchasing or carrying any margin stock.
7.06 Financial Covenants.
(a) The Borrower will not at any time allow the ratio of (i)
Consolidated Total Indebtedness to (ii) the sum of (A) Consolidated Net Worth
plus (B) Consolidated Total Indebtedness to exceed 0.50 to 1.
(b) The Borrower will not permit the aggregate amount of all
Indebtedness of Subsidiaries (exclusive of Indebtedness owing to the Borrower or
to a Wholly-Owned Subsidiary) outstanding at any time to exceed $40,000,000.
(c) The Borrower will not at any time allow Consolidated Net Worth to
be less than the sum of (i) $50,000,000, plus (ii) 33% of Consolidated Net
Income (without deduction for losses sustained) accrued from December 31, 1991,
to and including the most recent fiscal quarter prior to the date of
determination thereof, plus (iii) the net proceeds of any common stock issue or
conversion of Convertible Securities occurring after December 31, 2001.
SECTION 8. Events of Default.
Upon the occurrence of any of the following specified events (each, an
"Event of Default"):
8.01 Payments. The Borrower shall default in the payment when due of
any principal of the Loans; or of any interest on the Loans and such default
shall continue for three days after the Borrower has actual notice thereof; or
any Fees or any other amounts owing hereunder or under any other Credit Document
and such default shall continue for seven days; or
8.02 Covenants Without Notice. The Borrower shall default in the due
performance or observance by it of any material term, covenant or agreement on
its part to be performed or observed pursuant to Sections 6.07 or 7; or
Page 14
8.03 Representations, etc. Any representation, warranty or statement
made by the Borrower herein or in any statement or certificate delivered
pursuant hereto shall prove to be untrue in any material respect on the date as
of which made or deemed made; or
8.04 Covenants With Notice. The Borrower shall default in the due
performance or observance by it of any material term, covenant or agreement
(other than those referred to in Sections 8.01, 8.02 and 8.03 hereof) contained
in this Agreement and such default shall continue unremedied for a period of
fifteen days after written notice from the Bank; or
8.05 Other Agreements. The Borrower or any Subsidiary shall fail to pay
any Indebtedness in excess of $5,000,000 (excluding Indebtedness hereunder or
under the Note) of the Borrower or Subsidiary (as the case may be), or any
interest or premium thereon, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall continue
after the applicable grace period, if any, specified in the agreement or
instrument relating to any such Indebtedness; or any other default under any
agreement or instrument relating to any such Indebtedness, or any other event,
shall occur and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such default or
event is to accelerate, or to permit the acceleration of, the maturity of such
Indebtedness; or any such Indebtedness shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
8.06 Bankruptcy, etc. The Borrower or any Principal Subsidiary shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy", as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower under the Bankruptcy Code and the petition is not dismissed within 60
days, after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of the Borrower; or the Borrower commences any other proceeding
under any other reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower; or
there is commenced against the Borrower any such proceeding which remains
undismissed for a period of 60 days; or the Borrower is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Borrower suffers any appointment of any custodian
or the like for it or any substantial part of its property to continue
undischarged or unstayed for a period of 60 days; or the Borrower makes a
general assignment for the benefit of creditors; or any corporate action is
taken by the Borrower for the purpose of effecting any of the foregoing; or
8.07 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof or a waiver of such standard
or extension of any amortization period is sought or granted under Section 412
of the Code, any Plan shall have had or is likely to have a trustee appointed to
administer such Plan, any Plan is, shall have been or is likely to be terminated
or the subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability, a contribution required to be made to a Plan has not
been timely made or the Borrower or any ERISA Affiliate has incurred or is
likely to incur a liability to or on account of a Plan under Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971, 4975 or 4980 of the Code; (b) there shall result from
any such event or events the imposition of a lien, the granting of a security
interest, or a liability or a material risk of incurring a liability; and (c)
which lien, security interest or liability, individually and/or in the
aggregate, in the opinion of the Bank, will have a Material Adverse Effect; or
Page 15
8.08 Judgments. A judgment or decree shall be entered against the Borrower
or any Principal Subsidiary for the payment of money (to the extent not paid or
covered by insurance) which together with all other such judgments is in excess
of $5,000,000 and such judgments or decrees shall not have been vacated, paid,
discharged or stayed or bonded pending appeal within 30 days from the entry
thereof;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Bank may, by written notice to the Borrower, take
any or all of the following actions, without prejudice to the rights of the Bank
to enforce its claims against the Borrower, except as otherwise specifically
provided for in this Agreement (provided, that if an Event of Default specified
in Section 8.06 shall occur with respect to the Borrower, the result which would
occur upon the giving of written notice by the Bank as specified in clauses (i)
and (ii) below shall occur automatically without the giving of any such notice):
(i) declare the Commitment (or the unutilized portion thereof) terminated,
whereupon the Commitment (or the unutilized portion thereof) shall forthwith
terminate immediately and any Commitment Fees shall forthwith become due and
payable without any other notice of any kind and (ii) declare the principal of
and any accrued interest in respect of all Loans and all obligations owing
hereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower.
SECTION 9. DEFINITIONS
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms in this Agreement
shall include in the singular number the plural and in the plural the singular:
"Agreement" shall mean this Credit Agreement, as the same may be
modified, amended and/or supplemented from time to time.
"Applicable Cost of Funds Margin" shall be 0.55 per cent per annum.
"Applicable Eurodollar Margin" shall be 0.55 per cent per annum.
"Applicable Margin" shall the Applicable Cost of Funds Margin, the
Applicable Eurodollar Margin or the Applicable Prime Margin, as the context may
require.
"Applicable Prime Margin" shall be 0.00 per cent per annum.
"Assets" shall mean at any time the aggregate book value of all assets
of the Borrower as would be set forth at such time on a consolidated balance
sheet of the Borrower prepared in accordance with GAAP.
"Authorized Financial Officer" shall mean the chief financial officer,
treasurer or corporate controller of the Borrower or any other person duly
appointed in writing by the Borrower.
"Bankruptcy Code" shall have the meaning provided in Section 8.06.
"Borrower" shall mean Quaker Chemical Corporation, a Pennsylvania
corporation.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in the City of New York
Page 16
or the City of Philadelphia, Pennsylvania a legal holiday or a day on which
banking institutions are authorized by law or other governmental actions to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in U.S. dollar deposits in the London interbank Eurodollar market.
"Capital Lease" as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.
"Commitment" means $20,000,000, as the same may be reduced from time
to time pursuant to Section 2.02 or Section 8
"Consolidated Net Income" shall mean, with respect to any period, the
Net Income of the Borrower and its Subsidiaries for such period after
eliminating intercompany items, all as consolidated and determined in accordance
with GAAP.
"Consolidated Net Worth" shall mean, as of any particular time, the
amount which would be set forth under the caption "Stockholder's Equity" (or any
like caption) on a consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such period, less the amount which would be set
forth under the caption "Equity Adjustment from Foreign Currency Translation"
(or any like caption) on such consolidated balance sheet, all as prepared in
accordance with GAAP.
"Consolidated Total Indebtedness" shall mean, as of any particular
time and after eliminating inter-company items, all Indebtedness of the Borrower
and its Subsidiaries, all as consolidated and determined in accordance with
GAAP.
"Convertible Securities" shall mean any evidences of indebtedness,
shares of stock (other than common stock), or other securities directly or
indirectly convertible into or exchangeable for shares of common stock.
"Cost of Funds Loan" shall mean a Loan for which the interest rate is
the Cost of Funds Rate, plus the Applicable Cost of Funds Margin.
"Cost of Funds Rate" shall mean the rate, as determined by the Bank as
of the date on which the respective Loan is made (which determination shall be
conclusive and binding on the Borrower, absent manifest error) at which funds of
a comparable term and amount generally are available to the Bank.
"Credit Documents" shall mean this Agreement and the Note.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Effective Date" shall have the meaning provided in Section 4.01.
"Environmental Law" shall mean any federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, policy or rule of common law
now or hereafter in effect and in
Page 17
each case as amended, and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or judgment,
relating to the environment, health, safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, as
amended, 33 U.S.C. (S)1251 et seq.; the Toxic Substances Control Act, 15 U.S.C.
(S)7401 et seq.; the Clean Air Act, 42 U.S.C. (S)7401 et seq.; the Safe
Drinking Xxxxx Xxx, 00 X.X.X. (X)0000 et seq.; the Oil Pollution Act of 1990,
33 U.S.C. (S)2701 et seq. and any applicable state and local or foreign
counterparts or equivalents.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time and the regulations promulgated and the
rulings issued thereunder. Section references to ERISA are to ERISA as in effect
at the date of this Agreement and any subsequent provisions of ERISA amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower would be deemed to be a "single
employer" (i) within the meaning of Section 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loan" shall mean a Loan for which the interest rate is the
Eurodollar Rate, plus the Applicable Eurodollar Margin.
"Eurodollar Rate" shall mean with respect to each day during each
Interest Period, (i) the rate per annum equal to the offered rate (or, as the
case may be, the arithmetic mean of the offered rates, rounded upwards to the
nearest 1/100th of 1% per annum) as appears on the LIBO page on the Reuters'
screen (or, if no such rate appears, on the Telerate page 3750) at 11:00 a.m.
(London time) two Business Days prior to the start of such Interest Period, for
deposits of comparable term and amount in the London interbank Eurodollar market
for the delivery on the first day of such Interest Period divided (and rounded
upward to the next whole multiple of 1/16 of 1%) by (ii) a percentage equal to
100% minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves) applicable to any member bank of the Federal Reserve System in respect
of Eurocurrency liabilities as defined in Regulation D (or any successor
category of liabilities under Regulation D)
"Event of Default" shall have the meaning provided in Section 8.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Expiry Date" shall mean the date occurring 364 days after the
Effective Date.
"Facility Fee" shall have the meaning provided in Section 2.01.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
Section 2.01.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of Sections 6
and 7, including defined terms as used therein, are subject (to the extent
provided therein) to Section 10.06(a).
"Hazardous Materials" shall mean (a) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (b) any chemicals, materials or substances defined as or included
in the definition of "hazardous substances," "hazardous wastes," "hazardous
Page 18
materials," "restricted hazardous materials," "extremely hazardous wastes,"
"restrictive hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar meaning and regulatory
effect under any applicable Environmental Law.
"Indebtedness" of any Person means at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property, except accounts payable arising in the ordinary course of business,
(iv) all obligations of such Person as lessee under Capital Leases, (v) all
Indebtedness of others secured by a Lien on any asset of such person, whether or
not such Indebtedness is assumed by such Person, (vi) all Indebtedness of others
guaranteed by such Person and (vii) all non-contingent obligations of such
Person to reimburse or prepay any bank or other Person in respect of amounts
paid under a letter of credit, banker's acceptance or similar instrument.
"Interest Expense" shall mean, for any period, the total interest
expense of the Borrower determined as the same would be set forth in a statement
of income of the Borrower for such period.
"Interest Period", with respect to any Loan, shall mean the interest
period applicable thereto, as determined pursuant to Section 1.07.
"Interest Rate Basis" means the Eurodollar Rate, the Cost of Funds
Rate or the Prime Rate, as selected by the Borrower in accordance with this
Agreement.
"Lien" shall mean, with respect to any Person, any mortgage, pledge,
security interest, encumbrance, lien or charge of any kind with respect to any
asset of such Person (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any financing or similar
statement or notice filed under the UCC or any similar recording or notice
statute, and any lease having substantially the same effect as the foregoing).
"Loan" shall have the meaning provided in Section 1.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, results of operations or financial condition of the Borrower taken as
a whole.
"Maturity Date" shall mean with respect to any Loan, the date
specified in the respective Notice of Borrowing as the same may be extended
pursuant to Section 1.07.
"Minimum Borrowing Amount" shall mean $250,000.
"Note" shall have the meaning provided in Section 1.
"Notice of Borrowing" shall have the meaning provided in Section 1.05.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Bank pursuant to the terms of this Agreement or any other Credit Document.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
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"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any multiemployer or single-employer plan as defined
in Section 4001 of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute of) the Borrower or an ERISA Affiliate and
each plan for the five-year period immediately following the latest date on
which the Borrower or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such a multiemployer or single-employer plan.
"Prime Rate" shall mean the rate of interest equal to the higher
(redetermined daily) of (i) the per annum rate of interest announced by the Bank
from time to time at its principal office in New York City as its prime rate for
U.S. dollar loans (with any change in such Prime Rate to become effective as and
when such prime rate change shall become effective) or (ii) the Federal Funds
Rate, plus one half of one per cent (0.50 %) per annum. "Federal Funds Rate"
shall mean the average daily Federal Funds Rate as published by the Federal
Reserve Bank of New York in Publication H.15 (or any successor thereto), or, if
no such rate is published, the per annum rate of interest at which overnight
federal funds are from time to time offered to the Bank by any bank in the
interbank market in an amount equal to the principal amount of the respective
Loan, as determined in good faith by the Bank.
"Prime Rate Loan" shall mean a Loan for which the interest rate is the
Prime Rate, plus the Applicable Prime Rate Margin.
"Principal Subsidiary" shall mean any Subsidiary (i) whose net sales
or earnings, as shown by the accounts of such Subsidiary based upon which the
most recent consolidated financial statements delivered to the Bank pursuant to
Sections 5.09 and 6.01 which have been made up, are at least 5% of the
consolidated total net sales or earnings of the Company and its consolidated
Subsidiaries as shown by such financial statements or (ii) whose gross assets,
as shown by the accounts of such Subsidiary based upon which the most recent
consolidated financial statements delivered to the Bank pursuant to Sections
5.09 and 6.01 have been made up, are at least 5% of the consolidated total gross
assets of the Company and its consolidated Subsidiaries as shown by such
consolidated financial statements.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing margin requirements.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan other than those events as to which the 30-day
notice period is waived under PBGC Regulation Section 4043.
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Subsidiary" shall mean any corporation or other entity of which the
Borrower owns, directly or indirectly, such number of outstanding shares as have
more than 50% of the ordinary voting power for the election of directors.
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"Taxes" shall have the meaning provided in Section 3.03.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York.
"Unfunded Current Liability" of any Plan shall mean the amount, if any,
by which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
"Wholly Owned Subsidiary" shall mean any Subsidiary in respect of which
all shares (other than directors' qualifying shares required by law) of the
capital stock of each class, or other such ownership interests, outstanding at
the time as of which any determination is being made, are owned, beneficially
and of record by the Borrower.
"Written" or "in writing" shall mean any form of written communication
or a communication by means of telex, facsimile device, telegraph or cable.
SECTION 10. MISCELLANEOUS.
10.01 Payment of Expenses, Etc. The Borrower agrees to: (i) while an Event
of Default exists, pay all reasonable out-of-pocket costs and expenses of the
Bank in connection with the enforcement of the Credit Documents and the
documents and instruments referred to therein and the protection of the rights
of the Bank thereunder (including, without limitation, the reasonable fees and
disbursements of counsel for the Bank); (ii) pay and hold the Bank harmless from
and against any and all present and future stamp and other similar taxes with
respect to the foregoing matters and save the Bank harmless from and against any
and all liabilities with respect to or resulting from any delay or omission
(other than to the extent attributable to the Bank) to pay such taxes; and (iii)
indemnify the Bank, its officers, directors, employees, representatives and
agents from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of, any investigation,
litigation or other proceeding (whether or not the Bank is a party thereto)
related to the entering into and/or performance of this Agreement or any other
Credit Document or the use of the proceeds of any Loans hereunder (but excluding
any such losses, liabilities, claims, damages or expenses to the extent incurred
by reason of the gross negligence or willful misconduct of the Bank as
determined by a court of competent jurisdiction), including, without limitation,
the reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding (whether any such counsel's
fees are incurred in connection with any investigation, litigation or other
proceeding between the Borrower and the Bank or between the Bank or any third
Person or otherwise.) In case any proceeding shall be instituted in respect of
which indemnity may be sought by the Bank pursuant to this Section, the Bank
shall promptly notify the Borrower thereof provided that failure so to notify
the Borrower shall not relieve the Borrower from its obligations under this
Section. The Borrower (i) shall not be liable for any settlement effected
without its consent (which shall not be unreasonably withheld) and (ii) shall
have the right to participate in the defense of any proceedings for which
indemnification may be sought hereunder.
10.02 RIGHT OF SETOFF. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default,
the Bank is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to the
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Borrower or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and apply any and all deposits (general or
special) and any other Indebtedness at any time held or owing by the Bank
(including, without limitation, by branches and agencies of the Bank wherever
located) to or for the credit or the account of the Borrower against and on
account of the Obligations and liabilities of the Borrower to the Bank under
this Agreement or under any of the other Credit Documents, irrespective of
whether or not the Bank shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
10.03 Notices; Financial Information Available Through the SEC. Except as
otherwise expressly provided herein, all notices and other communications
provided for hereunder shall be in writing (including telegraphic, telex,
facsimile or cable communication) and mailed, e-mailed, telegraphed, telexed,
telecopied, cabled or delivered, at the address specified opposite the signature
of the Bank or the Borrower, as the case may be, below; or, at such other
address as shall be designated by any party in a written notice to the other
parties hereto. All such notices and communications shall be mailed, e-mailed,
telegraphed, telexed, telecopied or cabled or sent by overnight courier, and
shall be effective when received. In the event that this Agreement shall require
the Borrower to deliver to the Bank any financial statements or other similar
information, and such statements or information shall be publicly available at
the internet web site of the SEC, such statements or information shall be deemed
delivered in accordance herewith.
10.04 Benefit of Agreement. (a) This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, that the Borrower may not assign or
transfer any of its rights or obligations hereunder without the prior written
consent of the Bank.
(b) Nothing in this Agreement shall prevent or prohibit any Bank from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Bank from such Federal Reserve Bank.
10.05 No Waiver; Remedies Cumulative. No failure or delay on the part of
the Bank in exercising any right, power or privilege hereunder or under any
other Credit Document and no course of dealing between the Borrower and the Bank
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or under any other Credit Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies which the Bank would otherwise have. No notice to or demand on the
Borrower in any case shall entitle the Borrower to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of the Bank to any other or further action in any circumstances without notice
or demand.
10.06 Calculations; Computations. (a) Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with GAAP as in effect
from time to time, applied on a basis consistent (except for immaterial changes,
or changes concurred in by the Borrower's independent public accountants) with
the most recent audited financial statements of the Borrower delivered to the
Bank provided that, if the Borrower notifies the Bank that the Borrower wishes
to amend any covenant contained in Section 6 or F to eliminate the effect of any
change in GAAP on the operation of such covenant (or if the Bank notifies the
Borrower that the Bank wishes to amend any such covenant for such purpose), then
the Borrower's compliance with such covenant shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP
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became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Borrower and the Bank.
(b) All computations of Fees hereunder shall be made on the basis of the
actual number of days elapsed over a year of 365 or 366 days, as applicable, and
all computations of interest shall be made on the basis of the actual number of
days elapsed over a year of 360 days.
10.07 Governing Law; Submission to Jurisdiction; Venue (a) This Agreement
and the other Credit Documents and the rights and obligations of the parties
hereunder and thereunder shall be construed in accordance with and be governed
by the law of the State of New York. Any legal action or proceeding with respect
to this Agreement or any other Credit Document may be brought in the courts of
the State of New York or of the United States for the Southern District of New
York, and, by execution and delivery of this agreement, the Borrower hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Nothing herein shall
affect the right of the Bank or the holder of the Note to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against any the Borrower in any other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it may now
or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.
10.08 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Bank.
10.09 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
10.10 Amendment or Waiver. Neither this Agreement nor any other Credit
Document nor any terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by the Bank and (except in the case of a waiver) the Borrower.
10.11 Survival. All indemnities set forth herein including, without
limitation, in Section 1.09, 1.10 or 10.01, shall survive the execution and
delivery of this Agreement and the Note, and the making and repayment of the
Loans.
10.13 Waiver of Jury Trial Each of the parties to this Agreement hereby
irrevocably waives all right to a trial by jury in any action, proceeding or
counterclaim arising out of or relating to this Agreement, the other Credit
Documents or the transactions contemplated hereby or thereby.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
Address:
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QUAKER CHEMICAL CORPORATION
Xxx xxx Xxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Attn.: Xxxxxxx Xxxxx
Tel.: 000 000-0000 By: /s/ Xxxxxxx X. Xxxxx
------------------------
Fax. 000 000-0000 Title: Vice President
e-mail address: xxxxxx@xxxxxxxxxx.xxx and Chief Financial
Officer
By /s/ Xxxxxx Xxxxxxxx
-------------------------
Title: Vice President
and General Counsel
00 Xxxx 00/xx/ Xxxxxx XXX AMRO BANK N.V.
Xxx Xxxx, XX 00000
Attn.: Xxxxx Xxxxxxxx and Xxxxxx Xxxxx
Tel.: 000 000-0000 or 1569 By: /s/ Xxxxx X. Xxxxxxxx
------------------------
Fax.: 000 000-0000 or 1641 Title: Group Vice
President
e-mail address: Xxxxxx.Xxxxx@xxxxxxx.xxx or Xxxxx.Xxxxxxxx@xxxxxxx.xxx
By: /s/ Xxxxxx Xxxxx
------------------------
Title: Group Vice
President
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