Exhibit 10.1
EXECUTION COPY
U.S. $50,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of May 6, 2003
Among
POLYONE CORPORATION
as Borrower
and
THE INITIAL LENDERS NAMED HEREIN
as Initial Lenders
and
CITICORP USA, INC.
as Administrative Agent
and
NATIONAL CITY COMMERCIAL FINANCE, INC.
as Syndication Agent
and
KEYBANK NATIONAL ASSOCIATION
as Documentation Agent
and
CITIGROUP GLOBAL MARKETS, INC.
as Sole Lead Arranger
TABLE OF CONTENTS
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms..................................................................... 1
Section 1.02. Computation of Time Periods............................................................... 12
Section 1.03. Accounting Terms.......................................................................... 12
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES AND LETTERS OF CREDIT
Section 2.01. The Advances and Letters of Credit........................................................ 13
Section 2.02. Making the Advances....................................................................... 13
Section 2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit........................ 14
Section 2.04. Fees...................................................................................... 15
Section 2.05. Termination or Reduction of the Commitments............................................... 16
Section 2.06. Repayment of Advances..................................................................... 16
Section 2.07. Interest on Advances...................................................................... 16
Section 2.08. Interest Rate Determination............................................................... 17
Section 2.09. Optional Conversion of Advances........................................................... 18
Section 2.10. Prepayments of Advances................................................................... 18
Section 2.11. Increased Costs........................................................................... 18
Section 2.12. Illegality................................................................................ 19
Section 2.13. Payments and Computations................................................................. 19
Section 2.14. Taxes..................................................................................... 20
Section 2.15. Sharing of Payments, Etc.................................................................. 21
Section 2.16. Evidence of Debt.......................................................................... 21
Section 2.17. Use of Proceeds........................................................................... 22
ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING
Section 3.01. Conditions Precedent to Effectiveness of Sections 2.01 and 2.03........................... 22
Section 3.02. Conditions Precedent to Each Borrowing and Issuance....................................... 24
Section 3.03. Determinations Under Section 3.01......................................................... 24
ARTICLE IV REPRESENTATIONS AND WARRANTIES
Section 4.01. Representations and Warranties of the Borrower............................................ 25
ARTICLE V COVENANTS OF THE BORROWER
Section 5.01. Affirmative Covenants..................................................................... 27
Section 5.02. Negative Covenants........................................................................ 31
Section 5.03. Financial Covenants....................................................................... 34
ARTICLE VI EVENTS OF DEFAULT
Section 6.01. Events of Default......................................................................... 35
Section 6.02. Actions in Respect of the Letters of Credit upon Default.................................. 37
ARTICLE VII THE AGENT
Section 7.01. Authorization and Action.................................................................. 37
Section 7.02. Agent's Reliance, Etc..................................................................... 37
Section 7.03. Citicorp and Affiliates................................................................... 38
Section 7.04. Lender Credit Decision.................................................................... 38
Section 7.05. Indemnification........................................................................... 38
Section 7.06. Successor Agent........................................................................... 39
Section 7.07. Other Agents.............................................................................. 39
ARTICLE VIII MISCELLANEOUS
Section 8.01. Amendments, Etc........................................................................... 39
Section 8.02. Notices, Etc.............................................................................. 40
Section 8.03. No Waiver; Remedies....................................................................... 40
Section 8.04. Costs and Expenses........................................................................ 40
Section 8.05. Right of Set-off.......................................................................... 41
Section 8.06. Binding Effect............................................................................ 42
Section 8.07. Assignments and Participations............................................................ 42
Section 8.08. Confidentiality........................................................................... 44
Section 8.09. Governing Law............................................................................. 44
Section 8.10. Execution in Counterparts................................................................. 45
Section 8.11. Jurisdiction, Etc......................................................................... 45
Section 8.12. No Liability of the Issuing Banks......................................................... 45
Section 8.13. Authorization of Agent and Collateral Trustees............................................ 45
Section 8.14. Waiver of Jury Trial...................................................................... 1
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Schedules
Schedule I - List of Applicable Lending Offices
Schedule II - Mortgaged Properties
Schedule 2.01(b) - Letters of Credit
Schedule 3.01(b) - Disclosed Litigation
Schedule 5.02(a) - Existing Liens
Schedule 5.02(d) - Asset Sales
Schedule 5.02(i) - Existing Foreign Subsidiary Debt
Schedule 8.13 - Released Collateral
Exhibits
Exhibit A - Form of Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Security Agreement
Exhibit E - Form of Opinion of Counsel for the Borrower
Exhibit F - Form of Escrow Agreement
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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of May 6, 2003
AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 6, 2003 among
POLYONE CORPORATION, an Ohio corporation (the "Borrower"), the banks, financial
institutions and other institutional lenders (the "Initial Lenders") and initial
issuing banks (the "Initial Issuing Banks") listed on the signature pages
hereof, CITIGROUP GLOBAL MARKETS INC., as sole lead arranger, NATIONAL CITY
COMMERCIAL FINANCIAL, INC., as syndication agent, KEYBANK NATIONAL ASSOCIATION,
as documentation agent, and CITICORP USA, INC. ("Citicorp"), as administrative
agent (the "Agent") for the Lenders (as hereinafter defined).
PRELIMINARY STATEMENT:
The Borrower, certain lenders and the Agent are parties to a
Five-Year Credit Agreement dated as of October 30, 2000, as amended and restated
as of March 28, 2002 and as further amended by Amendment No. 1 dated as of
December 26, 2002 (such Credit Agreement, as so modified, the "Existing Credit
Agreement"). Subject to the satisfaction of the conditions precedent set forth
in Section 3.01, the Borrower and the Initial Lenders have agreed to amend the
Existing Credit Agreement in full to read as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Adjusted EBITDA" means EBITDA of the Borrower and its Subsidiaries
plus any net cash received from Equity Affiliates, minus any net cash paid
to Equity Affiliates, minus any income from Equity Affiliates plus any
income to Equity Affiliates.
"Advance" means an advance by a Lender to any Borrower as part of a
Borrowing and refers to a Base Rate Advance or a Eurodollar Rate Advance
(each of which shall be a "Type" of Advance).
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 5% or, if such Person
is the Borrower, 15%, or more of the Voting Stock of such Person or to
direct or cause the direction of the management and policies of such
Person, whether through the ownership of Voting Stock, by contract or
otherwise.
"Agent's Account" means the account of the Agent maintained by the
Agent at Citicorp at its office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Account No. ▇▇▇▇▇▇▇▇, Attention: Bank Loan Syndications or
such other account of the Agent as is designated in writing from time to
time by the Agent to the Borrower and the Lenders for such purpose.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance and
such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.
"Applicable Margin" means, as of any date of determination, a rate
per annum determined by reference to the Performance Level applicable on
such date as set forth below:
PERFORMANCE APPLICABLE MARGIN FOR BASE APPLICABLE MARGIN FOR
LEVEL RATE ADVANCES EURODOLLAR RATE ADVANCES
----------- -------------------------- ------------------------
I 1.75% 2.75%
II 2.00% 3.00%
III 2.50% 3.50%
The Applicable Margin shall be adjusted (if necessary) upward or downward
as of the first day of each fiscal quarter to reflect the Performance
Level as of the last day of the immediately preceding fiscal quarter;
provided that if such compliance certificate is delivered after the first
day of a fiscal quarter, such adjustment shall be made on the first day
following the delivery of such compliance certificate and shall be deemed
to have become effective as of the first day of such fiscal quarter.
"Applicable Percentage" means, for any fiscal quarter, a rate per
annum determined by reference to a fraction, expressed as a decimal, (a)
the numerator of which is the average daily amount of the Advances plus
the Available Amount of Letters of Credit outstanding during such quarter
and (b) the denominator of which is the average daily aggregate amount of
the Revolving Credit Commitments during such quarter as set forth below:
USAGE APPLICABLE PERCENTAGE
----- ---------------------
50% or less 0.875%
More than 50% but less than 75% 0.750%
75% or more 0.500%
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the
Agent, in substantially the form of Exhibit C hereto.
"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn under such Letter of Credit at such
time (assuming compliance at such time with all conditions to drawing).
"Base Rate" means a fluctuating interest rate per annum in effect
from time to time, which rate per annum shall at all times be equal to the
highest of:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 1/4 of 1% or, if there is no
nearest 1/4 of 1%, to the next higher 1/4 of 1%) of (i)1/2 of 1% per
annum, plus (ii) the rate obtained by dividing (A) the latest three-week
moving average of secondary market morning offering rates in the United
States for three-month certificates of deposit of major United States
money market banks, such three-week moving average (adjusted to the basis
of a year of 360 days) being determined weekly on each Monday (or, if such
day is not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday by Citibank on the basis
of such rates reported by certificate of deposit dealers to and published
by the Federal Reserve Bank of New York or, if such publication shall be
suspended or terminated, on the
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basis of quotations for such rates received by Citibank from three New
York certificate of deposit dealers of recognized standing selected by
Citibank, by (B) a percentage equal to 100% minus the average of the daily
percentages specified during such three-week period by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including, but not limited to, any
emergency, supplemental or other marginal reserve requirement) for
Citibank with respect to liabilities consisting of or including (among
other liabilities) three-month U.S. dollar non-personal time deposits in
the United States, plus (iii) the average during such three-week period of
the annual assessment rates estimated by Citibank for determining the then
current annual assessment payable by Citibank to the Federal Deposit
Insurance Corporation (or any successor) for insuring U.S. dollar deposits
of Citibank in the United States; and
(c) 1/2 of one percent per annum above the Federal Funds Rate.
"Base Rate Advance" means an Advance that bears interest as provided
in Section 2.07(a)(i).
"Borrowed Debt" means Debt described in clauses (a) through (f) of
the definition thereof.
"Borrowed Debt/Adjusted EBITDA Ratio" means, as of any date, the
ratio computed by dividing (a) Borrowed Debt of the Borrower and its
Subsidiaries, including their pro rata share of the Borrowed Debt of
Sunbelt, on a Consolidated basis as of such date by (b) the sum of (x)
Adjusted EBITDA of the Borrower and its Subsidiaries plus (y) Consolidated
Interest Expense, depreciation, depletion and amortization of intangibles
or financing or acquisitions costs for Sunbelt, each on a Consolidated
basis for the four consecutive fiscal quarters of the Borrower most
recently ended as of such date; provided that clause (b) of this
definition shall be calculated to include the Adjusted EBITDA for such
period of four consecutive fiscal quarters of any business acquired by the
Borrower or its Subsidiaries during such period.
"Borrowing" means a borrowing consisting of simultaneous Advances of
the same Type made by each of the Lenders pursuant to Section 2.01(a).
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the
applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on in the London interbank market.
"Capital Expenditures" means, for any Person for any period, the sum
of, without duplication, (a) all expenditures made, directly or
indirectly, by such Person or any of its Subsidiaries during such period
for equipment, fixed assets, real property or improvements, or for
replacements or substitutions therefor or additions thereto, that have
been or should be, in accordance with GAAP, reflected as additions to
property, plant or equipment on a Consolidated balance sheet of such
Person or have a useful life of more than one year plus (b) the aggregate
principal amount of all Debt (including obligations under Capitalized
Leases) assumed or incurred in connection with any such expenditures.
"Capitalized Leases" means all leases that have been or should be,
in accordance with GAAP, recorded as capitalized leases.
"Cash Interest Expense" means, for any fiscal period of any Person,
interest expense on all Debt of such Person and its Subsidiaries, net of
interest income, in accordance with GAAP and including, without
limitation, to the extent not otherwise included in accordance with GAAP,
(a) interest expense in respect of Debt resulting from Advances, (b) the
interest component of obligations under leases that have or should have
been or should be, in accordance with GAAP, recorded as capital leases,
(c) commissions, discounts and other fees and charges payable in
connection with letters of credit issued for the account of such Person or
any of its Subsidiaries, (d) the net payment, if any, payable in
connection with Hedge Agreements and (e) fees paid pursuant to Section
2.04(a), but excluding, in each case, (x) amortization of original issue
discount, (y) the interest portion of any deferred payment obligation and
(z) other interest not payable in cash.
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"Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to
any Lien in favor of the Collateral Trustees for the benefit of the
Secured Parties.
"Collateral Account" has the meaning specified in the Security
Agreement.
"Collateral Documents" means the Security Agreement, the Mortgages,
the Collateral Trust Agreements, the Intercreditor Agreement and any other
agreement that creates or purports to create a Lien in favor of the Agent
for the benefit of the Secured Parties.
"Collateral Trust Agreements" has the meaning specified in Section
3.01(h)(vi).
"Collateral Trustees" has the meaning specified in the Collateral
Trust Agreements.
"Commitment" means a Revolving Credit Commitment or a Letter of
Credit Commitment.
"Confidential Information" means the Projections, information
provided to the Lenders pursuant to Section 5.01(i)(iv) and any other
information that the Borrower furnishes to the Agent or any Lender in a
writing designated as confidential or otherwise on a confidential basis if
such information otherwise furnished is reduced to a writing designated as
confidential within 30 days of the initial disclosure thereof to the Agent
or any Lender, but does not include any such information that is or
becomes generally available to the public other than as a result of a
breach by the Agent or any Lender of its obligations hereunder or that is
or becomes available to the Agent or such Lender from a source other than
the Borrower or any consultant employed by the Agent to provide technical
advice that is not, to the best of the Agent's or such Lender's knowledge,
acting in violation of a confidentiality agreement with the Borrower.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Consolidated Interest Expense" means, for any period, cash interest
expense of any Person and its Subsidiaries determined on a Consolidated
basis in accordance with GAAP including, in any event, interest
capitalized during such period and net costs under all Hedge Agreements
and interest rate insurance for such period minus (b) Consolidated net
gains of such Person and its Subsidiaries under all Hedge Agreements and
interest rate insurance for such period and minus (c) any Consolidated
interest income of such Person and its Subsidiaries for such period.
"Consolidated Net Income" means, for any Person for any period, the
net income (or loss) of such Person and its Subsidiaries for such period,
determined on a Consolidated basis in conformity with GAAP.
"Convert", "Conversion" and "Converted" each refers to a conversion
of Advances of one Type into Advances of the other Type pursuant to
Section 2.08 or 2.09.
"Debt" of any Person means, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services (other
than trade payables not overdue by more than 60 days incurred in the
ordinary course of such Person's business), (c) all obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments,
(d) all obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (e) all obligations of
such Person as lessee under leases that have been or should be, in
accordance with GAAP, recorded as capital leases, (f) all Capital, Yield
and Reimbursement Obligations (each as defined in the Receivables Purchase
Agreement) under the Receivables Financing, (g) all obligations,
contingent or otherwise, of such Person in respect of acceptances, letters
of credit or similar extensions of credit and (h) obligations under direct
or indirect guaranties in respect of, and obligations (contingent or
otherwise) to in effect guaranty, any Debt of others of the kinds referred
to in clauses (a) through (g) above through an agreement (1) to pay or
purchase such Debt or to advance or supply funds for the payment or
purchase of
4
such Debt, (2) to supply funds to or in any other manner invest in the
debtor (including any agreement to pay for property or services
irrespective of whether such property is received or such services are
rendered) primarily for the purpose of enabling the debtor to make payment
of such Debt or to assure the holder of such Debt against loss or (3)
otherwise to assure a creditor against loss.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
"Disclosed Litigation" has the meaning specified in Section 3.01(b).
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant
to which it became a Lender, or such other office of such Lender as such
Lender may from time to time specify to the Borrower and the Agent.
"EBITDA" means, with respect to any Person for any period, an amount
equal to (a) Consolidated Net Income of such Person for such period plus
(b) the sum of, in each case to the extent included in the calculation of
such Consolidated Net Income of such Person for such period in accordance
with GAAP, but without duplication, (i) any provision for income taxes,
(ii) Consolidated Interest Expense, (iii) loss from extraordinary items,
(iv) depreciation, depletion and amortization of intangibles or financing
or acquisition costs, and (iv) all other non-cash charges and non-cash
losses for such period, including the amount of any compensation deduction
as the result of any grant of Equity Interests to employees, officers,
directors or consultants, other than charges representing accruals of
future cash expenses minus (c) the sum of, in each case to the extent
included in the calculation of Consolidated Net Income of such Person for
such period in accordance with GAAP, but without duplication, (i) any
credit for income tax, (ii) gains from extraordinary items for such
period, (iii) any aggregate net gain (but not any aggregate net loss) from
the sale, exchange or other disposition of capital assets by such Person,
(iv) cash payments for previously reserved charges and (v) any other
non-cash gains which have been added in determining Consolidated Net
Income, including any reversal of a charge referred to in clause (b)(iv)
above by reason of a decrease in the value of any Equity Interest.
"Effective Date" has the meaning specified in Section 3.01.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender; and (iii) any other Person approved by the Agent and, unless an
Event of Default has occurred and is continuing at the time any assignment
is effected in accordance with Section 8.07, the Borrower, such approval
not to be unreasonably withheld or delayed; provided, however, that
neither the Borrower nor an Affiliate of the Borrower shall qualify as an
Eligible Assignee.
"Environmental Action" means any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, notice of
non-compliance or violation, notice of liability or potential liability,
investigation, proceeding, consent order or consent agreement arising
under any Environmental Law or Environmental Permit or relating to
Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment, including, without limitation, (a) by
any governmental or regulatory authority for enforcement, cleanup,
removal, response, remedial or other actions or damages and (b) by any
governmental or regulatory authority or any third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment, decree
or judicial or agency interpretation, policy or guidance relating to the
environment or Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
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"Equity Affiliate" means, with respect to any Person, any
corporation, partnership, limited liability company or other business
entity of which an aggregate of 50% or less of the Voting Stock is, at the
time, directly or indirectly, owned or controlled by such Person or one or
more Subsidiaries or Equity Affiliates of such Person and which such
Person accounts for in its Consolidated financial statements on an equity
basis pursuant to GAAP.
"Equity Interests" means, with respect to any Person, shares of
capital stock of (or other ownership or profit interests in) such Person,
warrants, options or other rights for the purchase or other acquisition
from such Person of shares of capital stock of (or other ownership or
profit interests in) such Person, securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase
or other acquisition from such Person of such shares (or such other
interests), and other ownership or profit interests in such Person
(including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares,
warrants, options, rights or other interests are authorized or otherwise
existing on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the Borrower's controlled group, or under common
control with the Borrower, within the meaning of Section 414 of the
Internal Revenue Code.
"ERISA Event" means (a) the occurrence of a reportable event, within
the meaning of Section 4043 of ERISA, with respect to any Plan unless the
30-day notice requirement with respect to such event has been waived by
the PBGC; (b) the application for a minimum funding waiver with respect to
a Plan; (c) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA); (d) the cessation of operations at a facility
of the Borrower or any of its ERISA Affiliates in the circumstances
described in Section 4062(e) of ERISA; (e) the withdrawal by the Borrower
or any of its ERISA Affiliates from a Multiple Employer Plan during a plan
year for which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA; (f) the failure by the Borrower or any of its ERISA
Affiliates to make a payment to a Plan if the conditions for the
imposition of a lien under Section 302(f)(1) of ERISA are satisfied; (g)
the adoption of an amendment to a Plan requiring the provision of security
to such Plan pursuant to Section 307 of ERISA; or (h) the institution by
the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of
ERISA, or the occurrence of any event or condition described in Section
4042 of ERISA that could reasonably be expected to constitute grounds for
the termination of, or the appointment of a trustee to administer, a Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as
in effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender (or, if no such office is specified,
its Domestic Lending Office), or such other office of such Lender as such
Lender may from time to time specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing, an interest rate per
annum equal to the rate per annum obtained by dividing (a) the rate per
annum (rounded upward to the nearest whole multiple of 1/16 of 1% per
annum) appearing on Moneyline Telerate Markets Page 3750 (or any successor
page) as the London interbank offered rate for deposits in US dollars at
approximately 11:00 A.M. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest
Period or, if for any reason such rate is not available, the rate per
annum at which deposits in US dollars is offered by the principal office
of Citibank in London, England to prime banks in the London interbank
market at 11:00 A.M. (London time) two
6
Business Days before the first day of such Interest Period in an amount
substantially equal to Citicorp's Eurodollar Rate Advance comprising part
of such Borrowing to be outstanding during such Interest Period and for a
period equal to such Interest Period by (b) a percentage equal to 100%
minus the Eurodollar Rate Reserve Percentage for such Interest Period. If
the Moneyline Telerate Markets Page 3750 (or any successor page) is
unavailable, the Eurodollar Rate for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing shall be
determined by the Agent on the basis of applicable rates furnished to and
received by the Agent from Citibank two Business Days before the first day
of such Interest Period, subject, however, to the provisions of Section
2.08.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(ii).
"Eurodollar Rate Reserve Percentage" for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing means the
reserve percentage applicable two Business Days before the first day of
such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate
on Eurodollar Rate Advances is determined) having a term equal to such
Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by
the Agent from three Federal funds brokers of recognized standing selected
by it.
"GAAP" has the meaning specified in Section 1.03.
"Hazardous Materials" means petroleum and petroleum products,
byproducts or breakdown products, radioactive materials,
asbestos-containing materials, polychlorinated biphenyls and radon gas and
any other chemicals, materials or substances designated, classified or
regulated as being "hazardous" or "toxic" or words of similar import under
any federal, state, local or foreign statute, law ordinance, rule,
regulation, code, order, judgment, decree or judicial or agency
interpretation, policy or guidance.
"Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements.
"Indenture Limit" means (a) the maximum amount permitted under the
Borrower's public debt indentures that may be outstanding as secured
obligations without requiring the Borrower to equally and ratably secure
the Borrower's public debt multiplied by (b) 95% minus (c) all then
outstanding secured obligations of the Borrower and its Subsidiaries
(other than the Advances and the Letters of Credit) that are subject to
such public debt indentures' limitations on secured obligations.
"Information Memorandum" means the information memorandum dated
April, 2003 used by Citicorp in connection with the syndication of the
Receivables Financing.
"Insufficiency" means, with respect to any Plan, the amount, if any,
of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA.
7
"Intercreditor Agreement" has the meaning specified in Section
3.01(h)(vii).
"Interest Coverage Ratio" means, with respect to any fiscal quarter,
the ratio of (a) Adjusted EBITDA of the Borrower and its Subsidiaries,
including, at any time after demand for performance of the Borrower's
guaranty of the obligations of Sunbelt has been made, the Borrower's pro
rata share of the Consolidated Interest Expense, depreciation, depletion
and amortization of intangibles or financing or acquisitions costs for
Sunbelt, on a Consolidated basis to (b) Cash Interest Expense of the
Borrower and its Subsidiaries, including, at any time after demand for
performance of the Borrower's guaranty of the obligations of Sunbelt has
been made, the Borrower's pro rata share of the Cash Interest Expense of
Sunbelt, on a Consolidated basis, in each case in the aggregate for the
period of four consecutive fiscal quarters ended at the end of such fiscal
quarter; provided that clause (a) of this definition shall be calculated
to include the Adjusted EBITDA for such period of four consecutive fiscal
quarters of any business acquired by the Borrower or its Subsidiaries
during such period.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Base Rate
Advance into such Eurodollar Rate Advance and ending on the last day of
the period selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below and
subject to the delivery to the Agent of a certificate as contemplated by
Section 5.01(i)(v). The duration of each such Interest Period shall be
one, two, three or six months or, if available by all Lenders, nine or
twelve months, as the Borrower may, upon notice received by the Agent not
later than 11:00 A.M. (New York City time) on the third Business Day prior
to the first day of such Interest Period, select; provided, however, that:
(i) the Borrower may not select any Interest Period that ends
after the Termination Date;
(ii) Interest Periods commencing on the same date for
Eurodollar Rate Advances comprising part of the same Borrowing shall
be of the same duration;
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, however, that, if such extension
would cause the last day of such Interest Period to occur in the
next following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and
(iv) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any Equity Interests or Debt or the
assets comprising a division or business unit or a substantial part or all
of the business of such Person, any capital contribution to such Person or
any other direct or indirect investment in such Person, including, without
limitation, any acquisition by way of a merger or consolidation and any
arrangement pursuant to which the investor incurs Debt of the types
referred to in clause (g) of the definition of "Debt" in respect of such
Person.
"Issuing Bank" means an Initial Issuing Bank or any Eligible
Assignee to which a portion of the Letter of Credit Commitment hereunder
has been assigned pursuant to Section 8.07 so long as such Eligible
8
Assignee expressly agrees to perform in accordance with their terms all of
the obligations that by the terms of this Agreement are required to be
performed by it as an Issuing Bank and notifies the Agent of its
Applicable Lending Office (which information shall be recorded by the
Agent in the Register), for so long as the Initial Issuing Bank or
Eligible Assignee, as the case may be, shall have a Letter of Credit
Commitment.
"L/C Cash Collateral Account" means an interest bearing cash
collateral account to be established and maintained by the Agent, over
which the Agent shall have sole dominion and control, upon terms as may be
satisfactory to the Agent.
"L/C Related Documents" has the meaning specified in Section
2.06(b)(i).
"Lenders" means the Initial Lenders, each Issuing Bank and each
Person that shall become a party hereto pursuant to Section 8.07.
"Letter of Credit Agreement" has the meaning specified in Section
2.03(a).
"Letter of Credit Commitment" means, with respect to each Initial
Issuing Bank, the amount set forth opposite the Initial Issuing Bank's
name on the signature pages hereto under the caption "Letter of Credit
Commitment" or, if such Initial Issuing Bank has entered into one or more
Assignment and Acceptances, the amount set forth for such Issuing Bank in
the Register maintained by the Agent pursuant to Section 8.07(d) as such
Issuing Bank's "Letter of Credit Commitment", as such amount may be
reduced at or prior to such time pursuant to Section 2.05.
"Letter of Credit Facility" means, at any time, an amount equal to
the lesser of (a) the aggregate amount of the Issuing Banks' Letter of
Credit Commitments at such time and (b) $35,000,000, as such amount may be
reduced at or prior to such time pursuant to Section 2.05.
"Letters of Credit" has the meaning specified in Section 2.01(b).
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"Loan Documents" means (a) for purposes of this Agreement and the
Notes and any amendment, supplement or modification hereof or thereof, (i)
this Agreement, (ii) the Notes, (iv) the L/C Related Documents and (v) the
Collateral Documents and (b) for purposes of the Collateral Documents and
for all other purposes other than for purposes of this Agreement and the
Notes, (i) this Agreement, (ii) the Notes, (iv) the L/C Related Documents,
(v) the Collateral Documents and (vi) each Hedge Agreement entered into by
and between the Borrower and any Lender or any Affiliate of a Lender.
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
prospects, material obligations or properties of the Borrower or the
Borrower and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
prospects, material obligations or properties of the Borrower or the
Borrower and its Subsidiaries taken as a whole, (b) the rights and
remedies of the Agent or any Lender under this Agreement or any other Loan
Document or (c) the ability of the Borrower to perform its obligations
under this Agreement or any other Loan Document.
"Mortgage" has the meaning specified in Section 3.01(h)(v).
9
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Borrower or any of its ERISA
Affiliates is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an
obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any of its ERISA Affiliates and at least one Person other than
the Borrower and its ERISA Affiliates or (b) was so maintained and in
respect of which the Borrower or any of its ERISA Affiliates could have
liability under Section 4064 or 4069 of ERISA in the event such plan has
been or were to be terminated.
"Net Cash Proceeds" means, with respect to any issuance of any Debt
or the sale or issuance of any Equity Interests (including, without
limitation, any capital contribution) by any Person, the aggregate amount
of cash received from time to time (whether as initial consideration or
through payment or disposition of deferred consideration) by or on behalf
of such Person in connection with such transaction after deducting
therefrom only (without duplication) (a) reasonable and customary
brokerage commissions, underwriting fees and discounts, legal fees,
finder's fees and other similar fees and commissions and (b) the amount of
taxes payable in connection with or as a result of such transaction in
each case to the extent, but only to the extent, that the amounts so
deducted are, at the time of receipt of such cash, actually paid to a
Person that is not an Affiliate of such Person and are properly
attributable to such transaction or to the asset that is the subject
thereof.
"Note" means a promissory note payable to the order of any Lender,
delivered pursuant to a request made under Section 2.16 in substantially
the form of Exhibit A hereto, evidencing the aggregate indebtedness of the
Borrower to such Lender resulting from the Advances made by such Lender.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Issuance" has the meaning specified in Section 2.03(a).
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Performance Level" means, as of any date of determination, the
level set forth below as then applicable:
I Borrowed Debt/Adjusted EBITDA Ratio is less than or equal to
3.75:1.00.
II Borrowed Debt/Adjusted EBITDA Ratio is greater than 3.75:1.00
but less than or equal to 5.50:1.00.
III Borrowed Debt/Adjusted EBITDA Ratio is greater than 5.50:1.00.
For purposes of this definition, the Performance Level shall be determined
as at the end of each fiscal quarter of the Borrower based upon the
calculation of the Borrowed Debt/Adjusted EBITDA Ratio for such fiscal
quarter. The Borrowed Debt/Adjusted EBITDA Ratio shall be determined on
the date on which the Borrower delivers to the Agent a Consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of a
fiscal quarter and Consolidated statements of income and cash flows of the
Borrower and its Subsidiaries for the period commencing at the end of the
previous fiscal quarter and ending with the end of such quarter, duly
certified (subject to year end audit adjustments) by the chief financial
officer or the controller of the Borrower as having been prepared in
accordance with generally accepted accounting principles, together with a
certificate of said officer setting forth in reasonable detail the
calculations necessary to demonstrate the Borrowed Debt/Adjusted EBITDA
Ratio for the fiscal period then ended.
10
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture, limited liability company or other entity, or a government
or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Projections" means those financial projections dated May 6, 2003
covering the fiscal years ending in 2003 through 2006 inclusive, to be
delivered to the Lenders by the Borrower.
"Ratable Share" of any amount means, with respect to any Lender at
any time, the product of (a) a fraction the numerator of which is the
amount of such Lender's Revolving Credit Commitment at such time (or, if
the Commitments have been terminated in full, the amount of such Lender's
Revolving Credit Commitment immediately prior to such termination) and the
denominator of which is the aggregate Revolving Credit Commitments at such
time (or, if the Commitments have been terminated in full, the aggregate
amount of the Revolving Credit Commitments immediately prior to such
termination)and (b) such amount.
"Receivables Financing" means, collectively, the transactions
contemplated by the Receivables Purchase Agreement to be dated on or
before May 6, 2003 (the "Receivables Purchase Agreement"), among PolyOne
Funding Corporation, as Seller, the Borrower, as servicer, the banks and
other financial institutions party thereto and Citicorp USA, Inc., as
agent, and National City Commercial Finance, Inc., as syndication agent,
and the Transaction Documents (as defined in such Receivables Purchase
Agreement).
"Register" has the meaning specified in Section 8.07(d).
"Required Lenders" means at any time Lenders owed at least 75% of
the then aggregate unpaid principal amount of the Advances owing to
Lenders, or, if no such principal amount is then outstanding, Lenders
having at least 75% of the Revolving Credit Commitments.
"Restricted Payment" means with respect to the Borrower (a) any
dividend, distribution or any other payment whether direct or indirect, on
account of any Equity Interest of the Borrower now or hereafter
outstanding and (b) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of
any Equity Interest of the Borrower now or hereafter outstanding, provided
that (x) dividends, distributions or any other payment made on account of
any Equity Interest of the Borrower payable only in common stock of the
Borrower and (y) cash dividends paid by any Subsidiary of the Borrower to
the Borrower or any other wholly owned Subsidiary of the Borrower of which
it is a Subsidiary shall not constitute "Restricted Payments" hereunder.
"Revolving Credit Commitment" means as to any Lender (a) the amount
set forth opposite such Lender's name on the signature pages hereof or (b)
if such Lender has entered into any Assignment and Acceptance, the amount
set forth for such Lender in the Register maintained by the Agent pursuant
to Section 8.07(d), as such amount may be reduced pursuant to Section
2.05.
"Scheduled Other Debt Payment" means, with respect to:
(i) the 7.070% Medium Term Notes due June 26, 2006, issued by
MA ▇▇▇▇▇ Company, the payment of $20,000,000 of principal on or
after June 26, 2006;
(ii) the 6.740% Medium Term Notes due December 22, 2005,
issued by MA ▇▇▇▇▇ Company, the payment of $20,000,000 of principal
on or after December 22, 2005;
(iii) the 6.875% Medium Term Notes due December 1, 2004,
issued by MA ▇▇▇▇▇ Company, the payment of $20,000,000 of principal
on or after December 1, 2004; and
11
(iv) the 8.75% Medium Term Notes due December 15, 2005, issued
by The Geon Company, the payment of $75,000,000 of principal on or
after December 15, 2005.
"Secured Parties" has the meaning specified in the Collateral Trust
Agreements.
"Security Agreement" has the meaning specified in Section
3.01(h)(ii).
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower or any of its ERISA Affiliates and no Person other than the
Borrower and its ERISA Affiliates or (b) was so maintained and in respect
of which the Borrower or any of its ERISA Affiliates could have liability
under Section 4069 of ERISA in the event such plan has been or were to be
terminated.
"SPC" has the meaning specified in Section 8.07(f) hereto.
"Subsidiary" means any corporation, partnership, joint venture,
limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock or the equivalent
ownership or controlling interest, in either case having ordinary voting
power to elect a majority of the board of directors, managers or trustees
thereof (irrespective of whether at the time capital stock (or other
evidence of ownership) of any other class or classes of such entity shall
or might have the voting power upon the occurrence of any contingency) or
(b) the beneficial interest in such trust or estate is at the time owned
or controlled directly or indirectly, by the Borrower, by the Borrower and
one or more of its other Subsidiaries or by one or more of the Borrower's
other Subsidiaries.
"Sunbelt" means SunBelt Chlor Alkali Partnership, a joint venture
between a Subsidiary of the Borrower and a subsidiary of The ▇▇▇▇ Corp.
"Termination Date" means the earlier of (a) May 6, 2006 and (b) the
date of termination in whole of the Commitments pursuant to Section 2.05
or 6.01.
"Total Excess Availability" means (a) Receivables Excess
Availability (as defined in the Receivables Financing Agreement), plus (b)
the lesser of (i) an amount equal to the aggregate Unused Commitments at
such time and (ii) an amount equal to (A) the Indenture Limit at such time
minus (B) the sum of (1) the aggregate principal amount of all Advances
outstanding at such time and (2) the aggregate Available Amount of all the
Letters of Credit outstanding at such time.
"Type" refers to the distinction between Base Rate Advances and
Eurodollar Rate Advances.
"Unused Commitment" means, with respect to each Lender at any time,
(a) such Lender's Revolving Credit Commitment at such time minus (b) the
sum of (i) the aggregate principal amount of all Advances made by such
Lender (in its capacity as a Lender) and outstanding at such time, plus
(ii) such Lender's Ratable Share of the aggregate Available Amount of all
the Letters of Credit outstanding at such time.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening
of such a contingency.
"Withdrawal Liability" has the meaning specified in Part I of
Subtitle E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
12
SECTION 1.03. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with generally
accepted accounting principles, as in effect December 31, 2002, consistent with
those applied in the preparation of the financial statements referred to in
Section 4.01(e) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES AND LETTERS OF CREDIT
SECTION 2.01. The Advances and Letters of Credit. (a) Advances. Each
Lender severally agrees, on the terms and conditions hereinafter set forth, to
make Advances to the Borrower from time to time on any Business Day during the
period from the Effective Date until the Termination Date in an amount not to
exceed such Lender's Unused Commitment. Each Borrowing shall be in an aggregate
amount of $5,000,000 or an integral multiple of $1,000,000 in excess thereof and
shall consist of Advances of the same Type made on the same day by the Lenders
ratably according to their respective Commitments. Within the limits of each
Lender's Commitment, the Borrower may borrow under this Section 2.01(a), prepay
pursuant to Section 2.10 and reborrow under this Section 2.01(a).
(b) Letters of Credit. Each Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue letters of credit (each, a "Letter of
Credit") for the account of the Borrower from time to time on any Business Day
during the period from the Effective Date until 30 days before the Termination
Date in an aggregate Available Amount (i) for all Letters of Credit issued by
each Issuing Bank not to exceed at any time the lesser of (x) the Letter of
Credit Facility at such time and (y) such Issuing Bank's Letter of Credit
Commitment at such time and (ii) for each such Letter of Credit not to exceed an
amount equal to the Unused Commitments of the Lenders at such time. Each Letter
of Credit shall be in an amount of $1,000,000 or more. No Letter of Credit shall
have an expiration date (including all rights of the Borrower or the beneficiary
to require renewal) later than 10 Business Days before the Termination Date.
Within the limits referred to above, the Borrower may request the issuance of
Letters of Credit under this Section 2.01(b), repay any Advances resulting from
drawings thereunder pursuant to Section 2.03(c) and request the issuance of
additional Letters of Credit under this Section 2.01(b). Each letter of credit
listed on Schedule 2.01(b) shall be deemed to constitute a Letter of Credit
issued hereunder, and each Lender that is an issuer of such a Letter of Credit
shall, for purposes of Section 2.03, be deemed to be an Issuing Bank for each
such letter of credit, provided than any renewal or replacement of any such
letter of credit shall be issued by an Issuing Bank pursuant to the terms of
this Agreement.
SECTION 2.02. Making the Advances. (a) Each Borrowing shall be made
on notice, given not later than (x) 11:00 A.M. (New York City time) on the third
Business Day prior to the date of the proposed Borrowing in the case of a
Borrowing consisting of Eurodollar Rate Advances or (y) 11:00 A.M. (New York
City time) on the date of the proposed Borrowing in the case of a Borrowing
consisting of Base Rate Advances, by the Borrower to the Agent, which shall give
to each Lender prompt notice thereof by telecopier or telex. Each such notice of
a Borrowing (a "Notice of Borrowing") shall be by telephone, confirmed
immediately in writing, or telecopier or telex in substantially the form of
Exhibit B hereto, specifying therein the requested (i) date of such Borrowing,
(ii) Type of Advances comprising such Borrowing, (iii) aggregate amount of such
Borrowing, and (iv) in the case of a Borrowing consisting of Eurodollar Rate
Advances, initial Interest Period for each such Advance. Each Lender shall,
before 1:00 P.M. (New York City time) on the date of such Borrowing, make
available for the account of its Applicable Lending Office to the Agent at the
applicable Agent's Account, in same day funds, such Lender's ratable portion of
such Borrowing. After the Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Agent will make such
funds available to the Borrower by depositing such funds into an account of the
Borrower maintained with the Agent or to such other account as the Borrower
shall designate.
(b) Anything in subsection (a) above to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
any Borrowing if the aggregate amount of such Borrowing is less than $5,000,000
or if the obligation of the Lenders to make Eurodollar Rate Advances shall then
be suspended pursuant to Section 2.08 or 2.12 and (ii) the Eurodollar Rate
Advances may not be outstanding as part of more than five separate Borrowings.
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(c) Each Notice of Borrowing shall be binding on the Borrower. In
the case of any Borrowing that the related Notice of Borrowing specifies is to
be comprised of Eurodollar Rate Advances, the Borrower shall indemnify each
Lender against any loss, cost or expense incurred by such Lender as a result of
any revocation of such Notice of Borrowing by the Borrower or failure to fulfill
on or before the date specified in such Notice of Borrowing for such Borrowing
the applicable conditions set forth in Article III, including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the
Advance to be made by such Lender as part of such Borrowing when such Advance,
as a result of such revocation or failure, is not made on such date.
(d) Unless the Agent shall have received notice from a Lender prior
to the date of any Borrowing that such Lender will not make available to the
Agent such Lender's ratable portion of such Borrowing, the Agent may assume that
such Lender has made such portion available to the Agent on the date of such
Borrowing in accordance with subsection (a) of this Section 2.02 and the Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Agent and the Agent has made
such corresponding amount available to the Borrower, such Lender and the
Borrower severally agree to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Agent, at (i) in the case of the Borrower, the higher of (A) the
interest rate applicable at the time to Advances comprising such Borrowing and
(B) the cost of funds incurred by the Agent in respect of such amount and (ii)
in the case of such Lender, the Federal Funds Rate. If such Lender shall repay
to the Agent such corresponding amount, such amount so repaid shall constitute
such Lender's Advance as part of such Borrowing for purposes of this Agreement.
(e) The failure of any Lender to make the Advance to be made by it
as part of any Borrowing shall not relieve any other Lender of its obligation,
if any, hereunder to make its Advance on the date of such Borrowing, but no
Lender shall be responsible for the failure of any other Lender to make the
Advance to be made by such other Lender on the date of any Borrowing. Nothing
herein shall prejudice any rights that the Borrower may have against any Lender
as a result of any default by such Lender hereunder.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under
Letters of Credit. (a) Request for Issuance. (i) Each Letter of Credit shall be
issued upon notice, given not later than 11:00 A.M. (New York City time) on the
fifth Business Day prior to the date of the proposed issuance of such Letter of
Credit (or on such shorter notice as the applicable Issuing Bank may agree), by
the Borrower to any Issuing Bank, and such Issuing Bank shall give the Agent
prompt notice thereof by telex, telecopier or cable. Each such notice of
issuance of a Letter of Credit (a "Notice of Issuance") shall be by telephone,
confirmed immediately in writing, or telecopier or telex, specifying therein the
requested (A) date of such issuance (which shall be a Business Day), (B)
Available Amount of such Letter of Credit, (C) expiration date of such Letter of
Credit (which shall not be later than one year after the issuance thereof), (D)
name and address of the beneficiary of such Letter of Credit and (E) form of
such Letter of Credit, and shall be accompanied by such customary application
and agreement for letters of credit as such Issuing Bank may specify to the
Borrower for use in connection with such requested Letter of Credit (a "Letter
of Credit Agreement"). If (x) the requested form of such Letter of Credit is
acceptable to such Issuing Bank in its sole discretion and (y) it has not
received notice of objection of such issuance from the Required Lenders, such
Issuing Bank will, upon fulfillment of the applicable conditions set forth in
Article III, make such Letter of Credit available to the Borrower at its office
referred to in Section 8.02 or as otherwise agreed with the Borrower in
connection with such issuance. In the event and to the extent that the
provisions of any Letter of Credit Agreement shall conflict with this Agreement,
the provisions of this Agreement shall govern.
(b) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the applicable Issuing Bank or the Lenders, such
Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from
such Issuing Bank, a participation in such Letter of Credit equal to such
Lender's Ratable Share of the Available Amount of such Letter of Credit. The
Borrower hereby agrees to each such participation. In consideration and in
furtherance of the foregoing, each Lender hereby absolutely and unconditionally
agrees to pay to the Agent, for the account of such Issuing Bank, such Lender's
Ratable Share of each drawing made under a Letter of Credit funded by such
Issuing Bank and not reimbursed by the Borrower on the date made, or of any
reimbursement payment required to be refunded to the Borrower for any reason.
Each Lender acknowledges and agrees that its obligation to acquire
14
participations pursuant to this paragraph in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any Letter of
Credit or the occurrence and continuance of a Default or reduction or
termination of the Revolving Credit Commitments, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.
(c) Drawing and Reimbursement. The payment by an Issuing Bank of a
draft drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by any such Issuing Bank of an Advance, which shall be a
Base Rate Advance, in the amount of such draft. Each Issuing Bank shall give
prompt notice (and such Issuing Bank will use its commercially reasonable
efforts to deliver such notice within one Business Day) of each drawing under
any Letter of Credit issued by it to the Borrower and the Agent. Upon written
demand by such Issuing Bank, with a copy of such demand to the Agent, each
Lender shall pay to the Agent such Lender's Ratable Share of such outstanding
Advance, by making available for the account of its Applicable Lending Office to
the Agent for the account of such Issuing Bank, by deposit to the Agent's
Account, in same day funds, an amount equal to the portion of the outstanding
principal amount of such Advance to be funded by such Lender. Promptly after
receipt thereof, the Agent shall transfer such funds to such Issuing Bank. Each
Lender agrees to fund its Ratable Share of an outstanding Advance on (i) the
Business Day on which demand therefor is made by such Issuing Bank, provided
that notice of such demand is given not later than 11:00 A.M. (New York City
time) on such Business Day, or (ii) the first Business Day next succeeding such
demand if notice of such demand is given after such time. If and to the extent
that any Lender shall not have so made the amount of such Advance available to
the Agent, such Lender agrees to pay to the Agent forthwith on demand such
amount together with interest thereon, for each day from the date of demand by
any such Issuing Bank until the date such amount is paid to the Agent, at the
Federal Funds Rate for its account or the account of such Issuing Bank, as
applicable. If such Lender shall pay to the Agent such amount for the account of
any such Issuing Bank on any Business Day, such amount so paid in respect of
principal shall constitute an Advance made by such Lender on such Business Day
for purposes of this Agreement, and the outstanding principal amount of the
Advance made by such Issuing Bank shall be reduced by such amount on such
Business Day.
(d) Letter of Credit Reports. Each Issuing Bank shall furnish (A) to
the Agent on the first Business Day of each week a written report summarizing
issuance and expiration dates of Letters of Credit issued during the previous
week and drawings during such week under all Letters of Credit, (B) to each
Lender on the first Business Day of each month a written report summarizing
issuance and expiration dates of Letters of Credit during the preceding month
and drawings during such month under all Letters of Credit and (C) to the Agent
and each Lender on the first Business Day of each calendar quarter a written
report setting forth the average daily aggregate Available Amount during the
preceding calendar quarter of all Letters of Credit.
(e) Failure to Make Advances. The failure of any Lender to make the
Advance to be made by it on the date specified in Section 2.03(c) shall not
relieve any other Lender of its obligation hereunder to make its Advance on such
date, but no Lender shall be responsible for the failure of any other Lender to
make the Advance to be made by such other Lender on such date.
SECTION 2.04. Fees. (a) Commitment Fee. The Borrower agrees to pay
to the Agent for the account of each Lender a commitment fee on the aggregate
amount of such Lender's Unused Commitment from the Effective Date in the case of
each Initial Lender and from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender in the case of each other Lender
until the Termination Date at a rate per annum equal to the Applicable
Percentage in effect from time to time, payable in arrears quarterly on the last
day of each March, June, September and December, commencing June 30, 2003, and
on the Termination Date.
(b) Letter of Credit Fees. (i) The Borrower shall pay to the Agent
for the account of each Lender a commission on such Lender's Ratable Share of
the average daily aggregate Available Amount of all Letters of Credit made at
the request of the Borrower and outstanding from time to time at a rate per
annum equal to the Applicable Margin for Eurodollar Rate Advances in effect from
time to time, payable in arrears quarterly on the last day of each March, June,
September and December, commencing June 30, 2003, and on the Termination Date,
and after the Termination Date payable upon demand; provided that the Applicable
Margin shall increase by 2% upon the occurrence and during the continuation of
an Event of Default if the Borrower is required to pay default interest pursuant
to Section 2.07(b).
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(ii) The Borrower shall pay to each Issuing Bank for its own account
such fees as may from time to time be agreed in writing between the
Borrower and such Issuing Bank.
(c) Agent's Fees. The Borrower shall pay to the Agent for its own
account such fees as may from time to time be agreed between the Borrower and
the Agent.
SECTION 2.05. Termination or Reduction of the Commitments. The
Borrower shall have the right, upon at least three Business Days' notice to the
Agent, to terminate in whole or reduce ratably in part the unused portions of
the respective Commitments of the Lenders, provided that each partial reduction
shall be in the aggregate amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof.
SECTION 2.06. Repayment of Advances. (a) Advances. The Borrower
shall repay to the Agent for the ratable account of the Lenders on the
Termination Date the aggregate principal amount of the Advances then
outstanding.
(b) Letter of Credit Reimbursements. The obligations of the Borrower
under this Agreement, any Letter of Credit Agreement and any other agreement or
instrument, in each case, relating to any Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement, such Letter of Credit Agreement and such other
agreement or instrument under all circumstances, including, without limitation,
the following circumstances (it being understood that any such payment by the
Borrower is without prejudice to, and does not constitute a waiver of, any
rights the Borrower might have or might acquire as a result of the payment by
any Issuing Bank of any draft or the reimbursement by the Borrower thereof):
(i) any lack of validity or enforceability of this Agreement, any
Note, any Letter of Credit Agreement, any Letter of Credit or any other
agreement or instrument relating thereto (all of the foregoing being,
collectively, the "L/C Related Documents");
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the obligations of the Borrower in
respect of any L/C Related Document or any other amendment or waiver of or
any consent to departure from all or any of the L/C Related Documents;
(iii) the existence of any claim, set-off, defense or other right
that the Borrower may have at any time against any beneficiary or any
transferee of a Letter of Credit (or any Persons for which any such
beneficiary or any such transferee may be acting), any Issuing Bank, any
Agent, any Lender or any other Person, whether in connection with the
transactions contemplated by the L/C Related Documents or any unrelated
transaction;
(iv) any statement or any other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(v) payment by any Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit;
(vi) any exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to departure from any
guarantee, for all or any of the obligations of the Borrower in respect of
the L/C Related Documents; or
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
SECTION 2.07. Interest on Advances. (a) Scheduled Interest. The
Borrower shall pay interest on the unpaid principal amount of each Advance made
to it from the date of such Advance until such principal amount shall be paid in
full, at the following rates per annum:
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(i) Base Rate Advances. During such periods as such Advance is a
Base Rate Advance, a rate per annum equal at all times to the sum of (x)
the Base Rate in effect from time to time plus (y) the Applicable Margin
in effect from time to time, payable in arrears quarterly on the last day
of each March, June, September and December during such periods and on the
date such Base Rate Advance shall be Converted or paid in full.
(ii) Eurodollar Rate Advances. During such periods as such Advance
is a Eurodollar Rate Advance, a rate per annum equal at all times during
each Interest Period for such Advance to the sum of (x) the Eurodollar
Rate for such Interest Period for such Advance plus (y) the Applicable
Margin in effect from time to time, payable in arrears on the last day of
such Interest Period and, if such Interest Period has a duration of more
than three months, on each day that occurs during such Interest Period
every three months from the first day of such Interest Period and on the
date such Eurodollar Rate Advance shall be Converted or paid in full.
(b) Default Interest. Upon the occurrence and during the continuance
of an Event of Default, the Borrower shall pay interest on (i) the unpaid
principal amount of each Advance made to it owing to each Lender, payable in
arrears on the dates referred to in clause (a)(i) or (a)(ii) above, at a rate
per annum equal at all times to 2% per annum above the rate per annum required
to be paid on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii)
to the fullest extent permitted by law, the amount of any interest, fee or other
amount payable hereunder that is not paid when due, from the date such amount
shall be due until such amount shall be paid in full, payable in arrears on the
date such amount shall be paid in full and on demand, at a rate per annum equal
at all times to 2% per annum above the rate per annum required to be paid on
Base Rate Advances pursuant to clause (a)(i) above.
SECTION 2.08. Interest Rate Determination. (a) The Agent shall give
prompt notice to the Borrower and the Lenders of the applicable interest rate
determined by the Agent for purposes of Section 2.07(a)(i) or (ii), and the
rate, if any, furnished by Citibank for the purpose of determining the interest
rate under Section 2.07(a)(ii).
(b) If, with respect to any Eurodollar Rate Advances, the Required
Lenders notify the Agent that (i) they are unable to obtain matching deposits in
the London inter-bank market at or about 11:00 A.M. (London time) on the second
Business Day before the making of a Borrowing in sufficient amounts to fund
their respective Advances as a part of such Borrowing during its Interest Period
or (ii) the Eurodollar Rate for any Interest Period for such Advances will not
adequately reflect the cost to such Required Lenders of making, funding or
maintaining their respective Eurodollar Rate Advances for such Interest Period,
the Agent shall forthwith so notify the Borrower and the Lenders, whereupon (A)
the Borrower will, on the last day of the then existing Interest Period
therefor, either (x) prepay such Advances or (y) Convert such Advances into Base
Rate Advances and (B) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended until the Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.
(c) If the Borrower shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Agent will forthwith so notify the Borrower and the Lenders and such Advances
will automatically, on the last day of the then existing Interest Period
therefor, Convert into Base Rate Advances.
(d) On the date on which the aggregate unpaid principal amount of
Eurodollar Rate Advances comprising any Borrowing shall be reduced, by payment
or prepayment or otherwise, to less than $5,000,000, such Advances shall
automatically Convert into Base Rate Advances.
(e) Upon the occurrence and during the continuance of any Event of
Default, (i) each Eurodollar Rate Advance will automatically, on the last day of
the then existing Interest Period therefor, be Converted into Base Rate Advances
and (ii) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended.
(f) If Moneyline Telerate Markets Page 3750 is unavailable and
Citibank shall not furnish timely information to the Agent for determining the
Eurodollar Rate for any Eurodollar Rate Advances,
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(i) the Agent shall forthwith notify the Borrower and the Lenders
that the interest rate cannot be determined for such Eurodollar Rate
Advances,
(ii) with respect to Eurodollar Rate Advances, each such Advance
will automatically, on the last day of the then existing Interest Period
therefor, at the option of the Borrower, be prepaid by the Borrower or be
automatically Converted into a Base Rate Advance, and
(iii) the obligation of the Lenders to make Eurodollar Rate Advances
or to Convert Advances into Eurodollar Rate Advances shall be suspended
until the Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist.
SECTION 2.09. Optional Conversion of Advances. The Borrower may on
any Business Day, upon notice given to the Agent not later than 11:00 A.M. (New
York City time) on the third Business Day prior to the date of the proposed
Conversion and subject to the provisions of Sections 2.08 and 2.12, Convert all
Advances of one Type comprising the same Borrowing into Advances of the other
Type; provided, however, that any Conversion of Eurodollar Rate Advances into
Base Rate Advances shall be made only on the last day of an Interest Period for
such Eurodollar Rate Advances, any Conversion of Base Rate Advances into
Eurodollar Rate Advances shall be in an amount not less than the minimum amount
specified in Section 2.02(b) and no Conversion of any Advances shall result in
more separate Borrowings than permitted under Section 2.02(b) and provided
further that as a condition to each Conversion the Borrower shall have delivered
to the Agent a certificate as contemplated by Section 5.01(i)(v). Each such
notice of a Conversion shall, within the restrictions specified above, specify
(i) the date of such Conversion, (ii) the Advances to be Converted, and (iii) if
such Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for each such Advance. Each notice of Conversion shall be
binding on the Borrower. In the case of any Conversion of Base Rate Advances
into Eurodollar Rate Advances, the Borrower shall indemnify each Lender against
any loss, cost or expense incurred by such Lender as a result of any revocation
of such notice of Conversion, including, without limitation, any loss, cost or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund the Advance to be Converted by such
Lender as a result of such revocation.
SECTION 2.10. Prepayments of Advances. (a) Optional. The Borrower
may, upon notice at least two Business Days' prior to the date of such
prepayment, in the case of Eurodollar Rate Advances, and not later than 11:00
A.M. (New York City time) on the date of such prepayment, in the case of Base
Rate Advances, to the Agent stating the proposed date and aggregate principal
amount of the prepayment, and if such notice is given the Borrower shall, prepay
the outstanding principal amount of the Advances comprising part of the same
Borrowing in whole or ratably in part, together with accrued interest to the
date of such prepayment on the principal amount prepaid; provided, however, that
(x) each partial prepayment shall be in an aggregate principal amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and (y) in
the event of any such prepayment of a Eurodollar Rate Advance, the Borrower
shall be obligated to reimburse the Lenders in respect thereof pursuant to
Section 8.04(c).
(b) Mandatory. The Borrower shall, on each Business Day, prepay an
aggregate principal amount of the Advances comprising part of the same
Borrowings and deposit an amount in the L/C Cash Collateral Account in an amount
equal to the amount by which the sum of the aggregate principal amount of the
Advances then outstanding plus the aggregate Available Amount of all Letters of
Credit then outstanding exceeds the Indenture Limit on such Business Day. All
prepayments under this subsection (b) shall be made together with accrued
interest to the date of such prepayment on the principal amount prepaid.
SECTION 2.11. Increased Costs. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority including, without limitation, any agency
of the European Union or similar monetary or multinational authority (whether or
not having the force of law) which becomes effective after the date hereof,
there shall be any increase in the cost to any Lender of agreeing to make or
making, funding or maintaining Eurodollar Rate Advances or agreeing to issue or
of issuing or maintaining or participating in Letters of Credit (excluding for
purposes of this Section 2.11 any such increased costs resulting from (i) Taxes
or Other Taxes (as to which Section 2.14 shall govern) and (ii) changes in the
basis of taxation of overall net income or overall gross income by the United
States or by the foreign jurisdiction or state under the laws of which such
Lender is organized
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or has its Applicable Lending Office or any political subdivision thereof), then
the Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to the Agent), pay to the Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such increased cost.
A certificate as to the amount of such increased cost setting forth the basis
thereof in reasonable detail and submitted to the Borrower and the Agent by such
Lender shall be conclusive and binding for all purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any change in or in
the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law) which becomes effective after the date
hereof, there shall be any increase in the amount of capital required or
expected to be maintained by such Lender or any corporation controlling such
Lender as a result of or based upon the existence of such Lender's commitment to
lend hereunder and other commitments of this type, then, upon demand by such
Lender (with a copy of such demand to the Agent), the Borrower shall pay to the
Agent for the account of such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender or such
corporation in the light of such circumstances, to the extent that such Lender
reasonably determines such increase in capital to be allocable to the existence
of such Lender's commitment to lend hereunder. A certificate as to such amounts
setting forth the basis thereof in reasonable detail and submitted to the
Borrower and the Agent by such Lender shall be conclusive and binding for all
purposes, absent manifest error. Notwithstanding the foregoing and except in the
case of any such law, regulation, guideline or request having retroactive
effect, the Borrower shall not be required to pay to the Agent or any Lender
such additional amounts to the extent such amounts relate to periods prior to
six months before the Borrower's receipt of such notice.
SECTION 2.12. Illegality. Notwithstanding any other provision of
this Agreement, if any Lender shall notify the Agent that the introduction of or
any change in or in the interpretation of any law or regulation makes it
unlawful, or any central bank or other governmental authority asserts that it is
unlawful, for any Lender or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances hereunder, (a) each Eurodollar Rate Advance will
automatically, upon such demand, be Converted into a Base Rate Advance and (b)
the obligation of the Lenders to make Eurodollar Rate Advances or to Convert
Advances into Eurodollar Rate Advances shall be suspended until the Agent shall
notify the Borrower and the Lenders that the circumstances causing such
suspension no longer exist.
SECTION 2.13. Payments and Computations. (a) The Borrower shall make
each payment hereunder not later than 11:00 A.M. (New York City time) on the day
when due to the Agent at the Agent's Account in same day funds. The Agent will
promptly thereafter cause to be distributed like funds relating to the payment
of principal or interest or fees ratably (other than amounts payable pursuant to
Section 2.11, 2.14 or 8.04(c)) to the Lenders for the account of their
respective Applicable Lending Offices, and like funds relating to the payment of
any other amount payable to any Lender to such Lender for the account of its
Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon its acceptance of an Assignment and Acceptance and
recording of the information contained therein in the Register pursuant to
Section 8.07(c), from and after the effective date specified in such Assignment
and Acceptance, the Agent shall make all payments hereunder and under the Notes
in respect of the interest assigned thereby to the Lender assignee thereunder,
and the parties to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective date directly
between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made when due hereunder or under the Note
held by such Lender, to charge from time to time against any or all of the
Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate shall be
made by the Agent on the basis of a year of 365 or 366 days, as the case may be,
all computations of interest based on the Eurodollar Rate or the Federal Funds
Rate and of fees and Letter of Credit commissions shall be made by the Agent on
the basis of a year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest, fees or commissions are payable. Each determination by the
Agent of an interest rate hereunder shall be conclusive and binding for all
purposes, absent manifest error.
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(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest, fee or commission,
as the case may be; provided, however, that, if such extension would cause
payment of interest on or principal of Eurodollar Rate Advances to be made in
the next following calendar month, such payment shall be made on the next
preceding Business Day.
(e) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the Agent,
each Lender shall repay to the Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent at the Federal Funds Rate.
SECTION 2.14. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with Section 2.13,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the Agent, taxes
imposed on its income, and franchise taxes imposed on it in lieu of income
taxes, by the jurisdiction under the laws of which such Lender or the Agent (as
the case may be) is organized or any political subdivision thereof and, in the
case of each Lender, taxes imposed on its income, and franchise taxes imposed on
it in lieu of income taxes, by the jurisdiction of such Lender's Applicable
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder or under any
Note to any Lender or the Agent, (i) the sum payable shall be increased as may
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.14) such Lender or
the Agent (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or under the Notes or
from the execution, delivery or registration of, or otherwise with respect to,
this Agreement or the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the Agent for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section
2.14) paid by such Lender or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 30 days from the date such
Lender or the Agent (as the case may be) makes written demand therefor in
reasonable detail.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Agent, at its address referred to in Section 8.02,
the original or a certified copy of a receipt evidencing payment thereof. In the
case of any payment hereunder or under the Notes by or on behalf of the Borrower
through an account or branch outside the United States or by or on behalf of the
Borrower by a payor that is not a United States person, if the Borrower
determine that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel acceptable to the Agent stating that such payment is exempt
from Taxes. For purposes of this subsection (d) and subsection (e), the terms
"United States" and "United States person" shall have the meanings specified in
Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside
the United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Initial Lender and on the date of the Assignment
and Acceptance pursuant to which it becomes a Lender in the case of each other
Lender, and from
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time to time thereafter if requested in writing by the Borrower (but only so
long as such Lender remains lawfully able to do so), shall provide each of the
Agent and the Borrower with two original Internal Revenue Service forms W-8BEN
or W-8ECI, as appropriate, or any successor or other form prescribed by the
Internal Revenue Service, certifying that such Lender is exempt from or entitled
to a reduced rate of United States withholding tax on payments of interest by
the Borrower pursuant to this Agreement or the Notes. If the form provided by a
Lender at the time such Lender first becomes a party to this Agreement indicates
a United States interest withholding tax rate in excess of zero, withholding tax
at such rate shall be considered excluded from "Taxes" as defined in this
Section 2.14 unless and until such Lender provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
form; provided, however, that, if at the date of the Assignment and Acceptance
pursuant to which a Lender assignee becomes a party to this Agreement, the
Lender assignor was entitled to payments under subsection (a) in respect of
United States withholding tax with respect to interest paid at such date, then,
to such extent, the term Taxes shall include (in addition to withholding taxes
that may be imposed in the future or other amounts otherwise includable in
Taxes) United States withholding tax, if any, applicable with respect to the
Lender assignee on such date. If any form or document referred to in this
subsection (e) requires the disclosure of information, other than information
necessary to compute the tax payable and information required on the date hereof
by Internal Revenue Service form W-8BEN or W-8ECI, that the Lender reasonably
considers to be confidential, the Lender shall give notice thereof to the
Borrower and shall not be obligated to include in such form or document such
confidential information.
(f) For any period with respect to which a Lender has failed to
provide the Borrower with the appropriate form described in Section 2.14(e)
(other than if such failure is due to a change in law occurring subsequent to
the date on which a form originally was required to be provided, or if such form
otherwise is not required under subsection (e) above), such Lender shall not be
entitled to indemnification under Section 2.14(a) or (c) with respect to Taxes
imposed by the United States by reason of such failure; provided, however, that
should a Lender become subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps as the Lender shall
reasonably request to assist the Lender to recover such Taxes.
SECTION 2.15. Sharing of Payments, Etc. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of the Advances owing to it (other than
pursuant to Section 2.11, 2.14 or 8.04(c)) in excess of its Ratable Share of
payments on account of the Advances obtained by all the Lenders, such Lender
shall forthwith purchase from the other Lenders such participations in the
Advances owing to them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery together with an amount equal to such Lender's ratable share
(according to the proportion of (i) the amount of such Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 2.15
may, to the fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of the Borrower in the amount of such
participation.
SECTION 2.16. Evidence of Debt. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Advance owing to
such Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder in respect of
Advances. The Borrower agrees that upon notice by any Lender to the Borrower
(with a copy of such notice to the Agent) to the effect that a Note is required
or appropriate in order for such Lender to evidence (whether for purposes of
pledge, enforcement or otherwise) the Advances owing to, or to be made by, such
Lender, the Borrower shall promptly execute and deliver to such Lender a Note
payable to the order of such Lender in a principal amount up to the Revolving
Credit Commitment of such Lender.
(b) The Register maintained by the Agent pursuant to Section 8.07(d)
shall include a control account, and a subsidiary account for each Lender, in
which accounts (taken together) shall be recorded (i) the date and amount of
each Borrowing made hereunder, the Type of Advances comprising such Borrowing
and, if appropriate, the Interest Period applicable thereto, (ii) the terms of
each Assignment and Acceptance delivered to
21
and accepted by it, (iii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iv) the amount of any sum received by the Agent from the Borrower hereunder
and each Lender's share thereof.
(c) Entries made in good faith by the Agent in the Register pursuant
to subsection (b) above, and by each Lender in its account or accounts pursuant
to subsection (a) above, shall be evidence of the amount of principal and
interest due and payable or to become due and payable from the Borrower to, in
the case of the Register, each Lender and, in the case of such account or
accounts, such Lender, under this Agreement, absent manifest error; provided,
however, that the failure of the Agent or such Lender to make an entry, or any
finding that an entry is incorrect, in the Register or such account or accounts
shall not limit or otherwise affect the obligations of the Borrower or affect
the rights of the Lenders under this Agreement.
SECTION 2.17. Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrower agrees that it shall use such proceeds) solely for
working capital and general corporate purposes of the Borrower and its
Subsidiaries, provided, however, that proceeds of the Advances shall not be used
for repayment of third-party Debt.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Sections 2.01
and 2.03. Sections 2.01 and 2.03 of this Agreement shall become effective on and
as of the first date (the "Effective Date") on which the following conditions
precedent have been satisfied:
(a) There shall have occurred no Material Adverse Change since
December 31, 2002.
(b) There shall exist no action, suit, investigation, litigation or
proceeding affecting the Borrower or any of its Subsidiaries pending or,
to its or their knowledge, threatened before any court, governmental
agency or arbitrator that (i) could be reasonably likely to have a
Material Adverse Effect other than the matters described on Schedule
3.01(b) hereto (the "Disclosed Litigation") or (ii) purports to affect the
legality, validity or enforceability of this Agreement or any Note or the
consummation of the transactions contemplated hereby, and there shall have
been no adverse change in the status, or financial effect on the Borrower
or any of its Subsidiaries, of the Disclosed Litigation from that
described on Schedule 3.01(b) hereto that could reasonably be expected to
have a Material Adverse Effect.
(c) The Lenders shall have been given such access to the management,
records, books of account, contracts and properties of the Borrower and
its Subsidiaries as they shall have reasonably requested.
(d) All governmental and third party consents and approvals
necessary in connection with the transactions contemplated hereby shall
have been obtained (without the imposition of any conditions that are not
acceptable to the Lenders) and shall remain in effect, and no law or
regulation shall be applicable in the reasonable judgment of the Lenders
that restrains, prevents or imposes materially adverse conditions upon the
transactions contemplated hereby.
(e) The Borrower shall have notified each Lender and the Agent in
writing as to the proposed Effective Date.
(f) The Borrower shall have paid all invoiced accrued fees and
expenses of the Agent and the Lenders (including the invoiced accrued
reasonable fees and expenses of counsel to the Agent).
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(g) On the Effective Date, the following statements shall be true
and the Agent shall have received for the account of each Lender a
certificate signed by a duly authorized officer of the Borrower, dated the
Effective Date, stating that:
(i) The representations and warranties contained in Section
4.01 and in each other Loan Document are correct on and as of the
Effective Date, and
(ii) No event has occurred and is continuing that constitutes
a Default.
(h) The Agent shall have received on or before the Effective Date
the following, each dated such day, in form and substance satisfactory to
the Agent and (except for the Notes) in sufficient copies for each Lender:
(i) The Notes to the order of the Lenders to the extent
requested by any Lender pursuant to Section 2.16.
(ii) An amended and restated security agreement in
substantially the form of Exhibit D hereto (as amended, modified or
otherwise supplemented from time to time, the "Security Agreement"),
duly executed by the Borrower, together with:
(A) acknowledgment copies of proper financing
statements, duly filed on or before such day under the Uniform
Commercial Code of all jurisdictions that the Agent may deem
necessary or desirable in order to perfect and protect the
first priority liens and security interests created under the
Security Agreement, covering the Collateral described in the
Security Agreement,
(B) completed requests for information, dated on or
before such day, listing the financing statements referred to
in clause (A) above and all other effective financing
statements filed in the jurisdictions referred to in clause
(A) above that name the Borrower as debtor, together with
copies of such other financing statements,
(C) evidence of the completion of all other recordings
and filings of or with respect to the Security Agreement and
that all other action that the Agent may deem necessary or
desirable in order to perfect and protect the Liens and
security interests created under the Security Agreement has
been taken (including, without limitation, receipt of duly
executed payoff letters, UCC-3 termination statements and
landlords' and bailees' waiver and consent agreements) that
the Agent may deem necessary or desirable in order to perfect
and protect the Liens created thereby,
(iii) Evidence of the insurance required by the terms of the
Collateral Documents,
(iv) Favorable opinions of local counsels with respect to the
Security Agreement , in form and substance satisfactory to the
Agent.
(v) Amendments in form and substance satisfactory to the Agent
of the deeds of trust and mortgages covering the properties listed
in Schedule II hereto and delivered pursuant to the Existing Credit
Agreement (as amended, modified or otherwise supplemented from time
to time, the "Mortgages"), each duly executed by the Borrower,
together with a Mortgage Modification Endorsement to the Lender's
title insurance policy delivered with respect to each such Mortgage
under the Existing Credit Agreement in form and substance
satisfactory to the Agent.
(vi) Amendments in form and substance satisfactory to the
Agent of the Collateral Trust Agreements, each dated as of January
25, 2002 (as amended, modified or otherwise supplemented from time
to time, the "Collateral Trust Agreements") between the Collateral
23
Trustees named therein and the Borrower, duly executed by the
Collateral Trustees and the Borrower.
(vii) An agreement in form and substance satisfactory to the
Agent among the Collateral Trustees, the Borrower, the Agent and the
duly authorized representative of the creditors parties to the
Receivables Financing (as amended, modified or otherwise
supplemented from time to time, the "Intercreditor Agreement").
(viii) Certified copies of the resolutions of the Board of
Directors of the Borrower approving this Agreement and each other
Loan Document, and of all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to
this Agreement and each other Loan Document.
(ix) A certificate of the Secretary or an Assistant Secretary
of the Borrower certifying the names and true signatures of the
officers of the Borrower authorized to sign this Agreement and each
other Loan Document and the other documents to be delivered
hereunder.
(x) A favorable opinion of in-house counsel of the Borrower,
substantially in the form of Exhibit E hereto and as to such other
matters as any Lender through the Agent may reasonably request.
(xi) A favorable opinion of Shearman & Sterling, counsel for
the Agent, in form and substance satisfactory to the Agent.
(i) The Receivables Financing shall have been consummated having a
Total Commitment Amount (as defined in the Receivable Purchase Agreement)
of not less than $225,000,000 and having a tenor of not less than three
years.
(j) The Borrower shall have received cash proceeds of not less than
$190,000,000 from the issuance of senior notes in the debt markets having
a maturity no earlier than 90 days after the Termination Date, and
$87,775,000 of such cash proceeds shall have been delivered to Citibank in
accordance with an escrow agreement in substantially the form of Exhibit F
hereto.
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance.
The obligation of each Lender to make an Advance on the occasion of each
Borrowing and the obligation of each Issuing Bank to issue a Letter of Credit
shall be subject to the conditions precedent that the Effective Date shall have
occurred and on the date of such Borrowing or issuance (a) the following
statements shall be true (and each of the giving of the applicable Notice of
Borrowing, Notice of Issuance and the acceptance by the Borrower of the proceeds
of such Borrowing shall constitute a representation and warranty by the Borrower
on the date of such Borrowing or issuance such statements are true):
(i) the representations and warranties contained in Section 4.01 and
in each other Loan Document are correct on and as of such date, before and
after giving effect to such Borrowing or issuance the application of the
proceeds therefrom, as though made on and as of such date, other than any
such representations and warranties that, by their terms, refer to a
specific date other than the date of such Borrowing,
(ii) no event has occurred and is continuing, or would result from
such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default,
(iii) the Indenture Limit exceeds the aggregate principal amount of
the Advances plus the aggregate Available Amount of all Letters of Credit
to be outstanding after giving effect to such Advance or issuance,
respectively, and
24
(iv) for each Borrowing, the Available Capital (as defined in the
Receivables Purchase Agreement) under the Receivables Financing, after
giving effect to all Capital Investments (as defined in the Receivables
Purchase Agreement) shall be less than $5,000,000;
and (b) the Agent shall have received such other approvals, opinions or
documents as any Lender through the Agent may reasonably request.
SECTION 3.03. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the proposed Effective
Date, as notified by the Borrower to the Lenders, specifying its objection
thereto. The Agent shall promptly notify the Lenders of the occurrence of the
Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) The Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the State of Ohio, and is duly
qualified to do business, and is in good standing, in every jurisdiction
where the nature of its business requires it to be so qualified, except to
the extent that any failure to be so qualified or in good standing as a
foreign entity could not reasonably be expected to have a Material Adverse
Effect.
(b) The execution, delivery and performance by the Borrower of this
Agreement and the other Loan Documents, and the consummation of the
transactions contemplated hereby, are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate action, and
do not (i) contravene the Borrower's charter or code of regulations, (ii)
violate any applicable law, rule, regulation, order, writ judgment,
injunction, decree, determination or award, or (iii) breach or result in a
default under, or result in the acceleration of (or entitle any party to
accelerate) the maturity of any obligation of the Borrower under, or
result in or require the creation of any Lien upon any property of the
Borrower pursuant to the terms of any agreement or instrument binding on
or affecting the Borrower or any of its properties other than in favor of
the Collateral Trustee for the benefit of the Secured Parties.
(c) No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body or any
other third party is required for the due execution, delivery and
performance by the Borrower of this Agreement or the other Loan Documents,
except for the filing of UCC financing statements and the amendments to
the Mortgages contemplated by Section 3.01.
(d) This Agreement has been, and each of the other Loan Documents
when delivered hereunder will have been, duly executed and delivered by
the Borrower. This Agreement is, and each of the other Loan Documents when
delivered hereunder will be, the legal, valid and binding obligation of
the Borrower enforceable against the Borrower in accordance with their
respective terms, subject to bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the rights of creditors generally and
to general equitable principles.
(e) (i) The Consolidated balance sheet of the Borrower and its
subsidiaries as at December 31, 2002, and the related Consolidated
statements of income and cash flows of the Borrower and its subsidiaries
for the fiscal year then ended, accompanied by an opinion of Ernst & Young
LLP, independent public accountants, copies of which have been furnished
to each Lender, fairly present the
25
Consolidated financial condition of the Borrower and its subsidiaries as
at such date and the Consolidated results of the operations of the
Borrower and its subsidiaries for the period ended on such date, all in
accordance with generally accepted accounting principles consistently
applied.
(ii) Since December 31, 2002, there has been no Material
Adverse Change and there have been no events or developments that,
in the aggregate, have had a Material Adverse Effect.
(f) To the best of the Borrower's knowledge, there is no pending or
threatened action, suit, investigation, litigation or proceeding,
including, without limitation, any Environmental Action, affecting the
Borrower or any of its Subsidiaries before any court, governmental agency
or arbitrator that (i) could be reasonably likely to have a Material
Adverse Effect (other than the Disclosed Litigation) or, if adversely
determined, could reasonably be expected to result in a Material Adverse
Change or (ii) purports to affect the legality, validity or enforceability
of this Agreement or any Note or the consummation of the transactions
contemplated hereby, and there has been no adverse change in the status,
or financial effect on the Borrower or any of its Subsidiaries, of the
Disclosed Litigation from that described on Schedule 3.01(b) hereto.
(g) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock (within the meaning
of Regulation U issued by the Board of Governors of the Federal Reserve
System), and no proceeds of any Advance will be used to purchase or carry
any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock.
(h) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan.
(i) Neither the Borrower nor any of its ERISA Affiliates has
incurred or is reasonably expected to incur any Withdrawal Liability to
any Multiemployer Plan.
(j) Neither the Borrower nor any of its ERISA Affiliates has been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or has been terminated, within the meaning of
Title IV of ERISA, and no such Multiemployer Plan is reasonably expected
to be in reorganization or to be terminated, within the meaning of Title
IV of ERISA.
(k) The operations and properties of the Borrower and each of its
Subsidiaries comply in all material respects with all Environmental Laws,
all necessary Environmental Permits have been obtained and are in effect
for the operations and properties of the Borrower and its Subsidiaries,
the Borrower and its Subsidiaries are in compliance in all material
respects with all such Environmental Permits, and no circumstances exist
that could be reasonably likely to (i) form the basis of an Environmental
Action against the Borrower or any of its Subsidiaries or any of their
properties that could have a Material Adverse Effect or (ii) cause any
such property to be subject to any restrictions on ownership, occupancy,
use or transferability under any Environmental Law that could have a
Material Adverse Effect.
(l) None of the properties currently or formerly owned or operated
by the Borrower or any of its Subsidiaries is listed or proposed for
listing on the National Priorities List under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("NPL") or
on the Comprehensive Environmental Response, Compensation and Liability
Information System maintained by the U.S. Environmental Protection Agency
("CERCLIS") or any analogous state list of sites requiring investigation
or cleanup, the listing, or proposed listing of which would be reasonably
likely to have a Material Adverse Effect, except as described in the
annual report of the Borrower on Form 10-K filed with the Securities and
Exchange Commission, for the period ending December 31, 2002 or, to the
best knowledge of the Borrower, is adjacent to any such property.
(m) Except where noncompliance would not individually or in the
aggregate have a Material Adverse Effect (i) neither the Borrower nor any
of its Subsidiaries has transported or arranged for the
26
transportation of any Hazardous Materials to any location that is listed
or proposed for listing on the NPL or on the CERCLIS or any analogous
state list, and (ii) all Hazardous Materials generated, used, treated,
handled or stored at or transported to or from any property currently or
formerly owned or operated by the Borrower or any of its Subsidiaries have
been disposed of in compliance with all Environmental Laws and
Environmental Permits,
(n) Following application of the proceeds of each Advance, not more
than 25 percent of the value of the assets (either of the Borrower only or
of the Borrower and its Subsidiaries on a Consolidated basis) subject to
the provisions of Section 5.02(a) or subject to any restriction contained
in any agreement or instrument between the Borrower and any Lender or any
Affiliate of any Lender relating to Debt and within the scope of Section
6.01(d) will be margin stock (within the meaning of Regulation U issued by
the Board of Governors of the Federal Reserve System).
(o) 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.
(p) The Borrower is, individually and together with its
Subsidiaries, Solvent. "Solvent" means, with respect to any Person on a
particular date, that on such date (i) the fair value of the property of
such Person is greater than the total amount of liabilities, including,
without limitation, contingent liabilities, of such Person, (ii) the
present fair salable value of the assets of such Person is not less than
the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (iii) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay such debts and liabilities
as they mature and (iv) such Person is not engaged in business or a
transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute an unreasonably small
capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall
remain unpaid, any Lender shall have any Commitment hereunder or any Letter of
Credit shall be outstanding, the Borrower will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable
laws, rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA and Environmental Laws as provided in
Section 5.01(j).
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges or levies
imposed upon it or upon its property and (ii) all lawful claims that, if
unpaid, might by law become a Lien upon its property; provided, however,
that neither the Borrower nor any of its Subsidiaries shall be required to
pay or discharge any such tax, assessment, charge or claim that is being
contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable
against its other creditors.
(c) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower
or such Subsidiary operates; provided, however, that the Borrower and its
Subsidiaries may self-insure to the same extent as is consistent with the
past practice and to the extent consistent with prudent business practice.
27
(d) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, its corporate
existence, rights (charter and statutory) and franchises; provided,
however, that the Borrower and its Subsidiaries may consummate any merger
or consolidation permitted under Section 5.02(b) and provided further that
neither the Borrower nor any of its Subsidiaries shall be required to
preserve any right or franchise if the Board of Directors of the Borrower
or such Subsidiary shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Borrower or such
Subsidiary, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to the Borrower, such Subsidiary
or the Lenders.
(e) Visitation Rights. At any reasonable time and from time to time,
permit the Agent or any of the Lenders or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, the Borrower and any of
its Subsidiaries, and to discuss the affairs, finances and accounts of the
Borrower and any of its Subsidiaries with any of their officers or
directors and with their independent certified public accountants.
(f) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Borrower and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.
(g) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties
that are used or useful in the conduct of its business in good working
order and condition, ordinary wear and tear excepted.
(h) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under this
Agreement with any of their Affiliates on terms that are fair and
reasonable and no less favorable to the Borrower or such Subsidiary than
it would obtain in a comparable arm's-length transaction with a Person not
an Affiliate.
(i) Reporting Requirements. Furnish to the Lenders:
(i) within 50 days after the end of each of the first three
fiscal quarters of each fiscal year, financial information regarding
the Borrower and its Subsidiaries consisting of Consolidated
unaudited balance sheets as of the close of such quarter and the
related statements of income and cash flow for such quarter and that
portion of the fiscal year ending as of the close of such quarter,
setting forth in comparative form the figures contained in the
Projections or, if applicable, the latest business plan provided
pursuant to clause (iv) below for the current fiscal year, together
with a certificate of the chief financial officer or treasurer of
the Borrower (a) that such financial statements fairly presenting
the Consolidated financial position of the Borrower and its
Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the periods indicated in accordance
with GAAP (subject to the absence of footnote disclosure and normal
year-end audit adjustments), (y) as to compliance with the terms of
this Agreement and (z) setting forth in reasonable detail the
calculations necessary to demonstrate compliance with Section 5.03,
provided, that in the event of any change in GAAP used in the
preparation of such financial statements, the Borrower shall also
provide, if necessary for the determination of compliance with
Section 5.03, a statement of reconciliation conforming such
financial statement to GAAP;
(ii) within 95 days after the end of each fiscal year,
financial information regarding the Borrower and its Subsidiaries
consisting of Consolidated balance sheets of the Borrower and its
Subsidiaries as of the end of such year and related statements of
income and cash flows of the Borrower and its Subsidiaries for such
fiscal year, all prepared in conformity with GAAP and certified, in
the case of such Consolidated financial statements, without
qualification, including, but not limited to, as to the scope of the
audit or as to the Borrower being a going concern by the Borrower's
independent public accountants, together with the report of such
accounting firm stating that (A) such financial statements fairly
present the Consolidated financial position of the
28
Borrower and its Subsidiaries as at the dates indicated and the
results of their operations and cash flow for the periods indicated
in conformity with GAAP applied on a basis consistent with prior
years (except for changes with which the Borrower's independent
public accountants shall concur and that shall have been disclosed
in the notes to the financial statements) and (B) the examination by
the Borrower's independent public accountants in connection with
such Consolidated financial statements has been made in accordance
with generally accepted auditing standards, and accompanied by a
certificate stating that in the course of the regular audit of the
business of the Borrower and its Subsidiaries such accounting firm
has obtained no knowledge that a Default has occurred and is
continuing, or, if in the opinion of such accounting firm, a Default
has occurred and is continuing, a statement as to the nature
thereof; provided, that in the event of any change in GAAP used in
the preparation of such financial statements, the Borrower shall
also provide, if necessary for the determination of compliance with
Section 5.03, a statement of reconciliation conforming such
financial statement to GAAP;
(iii) as soon as possible and in any event within five
Business Days after the occurrence of each Default continuing on the
date of such statement, a statement of an officer of the Borrower
having knowledge of or responsibility for such matters setting forth
details of such Default and the action that the Borrower has taken
and proposes to take with respect thereto;
(iv) not later than the earlier of (A) 15 days after the
Borrower has received the approval of its board of directors
therefor and (B) 90 days after the commencement of each fiscal year:
(1) the annual business plan of the Borrower and its Subsidiaries
for such fiscal year approved by the Board of Directors of the
Borrower, (2) forecasts prepared by management of the Borrower for
each fiscal month in such fiscal year and (3) forecasts prepared by
management of the Borrower for such fiscal year and each of the
succeeding fiscal years through the Termination Date, including, in
each instance described in clauses (2) and (3) above, (x) a
projected year-end Consolidated balance sheet and income statement
and statement of cash flows and (y) a statement of all of the
material assumptions on which such forecasts are based and (z)
containing the types of financial information contained in the
Projections.
(v) as soon as possible and in any event within 50 days after
the end of each fiscal quarter, and on each date that the Borrower
gives notice of a Conversion in accordance with Section 2.09 or
notice of a subsequent Interest Period in accordance with the
definition of "Interest Period", a certificate of the chief
financial officer, treasurer or the controller of the Borrower
setting forth in reasonable detail the calculations necessary to
demonstrate that the sum of the aggregate principal amount of the
Advances plus the Available Amount of all Letters of Credit
outstanding as of the last day of such fiscal quarter do not exceed
the Indenture Limit.
(vi) promptly after the sending or filing thereof, the
Borrower shall send the Agent copies of (A) all reports the Borrower
sends to its security holders generally, (B) all reports and
registration statements that the Borrower or any of its Subsidiaries
files with the Securities and Exchange Commission or any national or
foreign securities exchange or the National Association of
Securities Dealers, Inc., (C) all press releases and (D) all other
statements concerning material changes or developments in the
business of the Borrower made available by the Borrower or any of
its Subsidiaries to the public or any other creditor.
(vii) promptly after the commencement thereof, notice of the
commencement and nature of all actions and proceedings before any
court, governmental agency or arbitrator affecting the Borrower or
any of its Subsidiaries of the type described in Section 4.01(f);
(viii) promptly and in any event within 10 days after the
Borrower or any of its ERISA Affiliates knows or has reason to know
that any ERISA Event has occurred, a statement of an officer of the
Borrower having knowledge of or responsibility for such matters
describing such ERISA Event and the action, if any, that the
Borrower or such ERISA Affiliate has taken and proposes to take with
respect thereto;
29
(ix) promptly and in any event within seven Business Days
after receipt thereof by the Borrower or any of its ERISA
Affiliates, copies of each notice from the PBGC stating its
intention to terminate any Plan or to have a trustee appointed to
administer any such Plan;
(x) promptly and in any event within 30 days after the receipt
thereof by the Borrower or any of its ERISA Affiliates, a copy of
the latest annual actuarial report for each Plan if the ratio of the
fair market value of the assets of such Plan to its current
liability (as defined in Section 412 of the Internal Revenue Code)
is less than 60%;
(xi) promptly and in any event within five Business Days after
receipt thereof by the Borrower or any of its ERISA Affiliates from
the sponsor of a Multiemployer Plan, copies of each notice
concerning (A) the imposition of Withdrawal Liability by any such
Multiemployer Plan, (B) the reorganization or termination, within
the meaning of Title IV of ERISA, of any such Multiemployer Plan or
(C) the amount of liability incurred, or that may be incurred, by
the Borrower or any of its ERISA Affiliates in connection with any
event described in clause (A) or (B); and
(xii) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as any Lender through the Agent may from time to time
reasonably request.
(j) Compliance with Environmental Laws. Comply, and cause each of
its Subsidiaries and all lessees and other Persons operating or occupying
its properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew and cause
each of its Subsidiaries to obtain and renew all Environmental Permits
necessary for its operations and properties; and conduct, and cause each
of its Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action
necessary to remove and clean up all Hazardous Materials from any of its
properties pursuant to the order of any regulatory authority and generally
in accordance with the requirements of all Environmental Laws; provided,
however, that neither the Borrower nor any of its Subsidiaries shall be
required to undertake any such cleanup, removal, remedial or other action
to the extent that its obligation to do so is being contested in good
faith and by proper proceedings and appropriate reserves are being
maintained with respect to such circumstances.
(k) Preparation of Environmental Reports. If an Event of Default
shall have occurred and be continuing, at the request of the Agent with
respect to any Environmental Action, condition or occurrence that the
Agent or the Required Lenders reasonably deem to be material, provide to
the Lenders within 90 days after such request, at the expense of the
Borrower, an environmental site assessment report for the properties
described in such request, prepared by an environmental consulting firm
acceptable to the Agent, indicating the presence or absence of Hazardous
Materials and the estimated cost of any compliance, removal or remedial
action in connection with any Hazardous Materials on such properties;
without limiting the generality of the foregoing, if the Agent determines
at any time that a material risk exists that any such report will not be
provided within the time referred to above, the Agent may retain an
environmental consulting firm to prepare such report at the expense of the
Borrower, and the Borrower hereby grants and agrees to cause any
Subsidiary that owns any property described in such request to grant at
the time of such request, to the Agent, the Lenders, such firm and any
agents or representatives thereof an irrevocable non-exclusive license,
subject to the rights of tenants, to enter onto their respective
properties to undertake such an assessment.
(l) Real Estate Matters. Deliver to the Agent, within 30 days after
the Effective Date, a title search for each property listed in Schedule II
showing no Liens of record other than those created or permitted by the
Mortgages. Deliver to the Agent, within 30 days after the occurrence of
any Actionable Default (as defined in the Collateral Trust Agreement), an
endorsement to each lender's title insurance policy for the properties
listed in Schedule II showing no Liens of record other than those created
or permitted by the Mortgages and down-dating such title insurance
policies to a then current date.
30
SECTION 5.02. Negative Covenants. So long as any Advance shall
remain unpaid, any Lender shall have any Commitment hereunder or any Letter of
Credit shall be outstanding, the Borrower will not:
(a) Liens, Etc. Create or suffer to exist, or permit any of its
Subsidiaries to create or suffer to exist, any Lien on or with respect to
any of its properties, whether now owned or hereafter acquired, or assign,
or permit any of its Subsidiaries to assign, any right to receive income,
other than:
(i) (A) Liens for taxes, assessments and governmental charges
or levies to the extent not required to be paid under Section
5.01(b) hereof (including contracts entered into in connection with
major construction projects); (B) Liens imposed by law, 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; (C) pledges or deposits to secure
obligations under workers' compensation laws or similar legislation
or to secure public or statutory obligations; and (D) easements,
rights of way and other encumbrances on title to real property that
do not materially adversely affect the use of such property for its
present purposes, provided in each case, that no enforcement,
execution, levy or foreclosure proceeding shall have been commenced
that is not being contested in good faith and by proper proceedings
with appropriate reserves being maintained,
(ii) purchase money Liens upon or in any property acquired or
held by the Borrower or any Subsidiary in the ordinary course of
business to secure the purchase price of such property or to secure
Debt incurred solely for the purpose of financing the acquisition of
such property, or Liens existing on such property at the time of its
acquisition (other than any such Lien created in contemplation of
such acquisition or extensions, renewals or replacements of any of
the foregoing for the same or a lesser amount, provided, however,
that no such Lien shall extend to or cover any property other than
the property being acquired, and no such extension, renewal or
replacement shall extend to or cover any property not theretofore
subject to the Lien being extended, renewed or replaced, provided
further that the aggregate principal amount of the indebtedness
secured by the Liens referred to in this clause (ii) shall not
exceed $25,000,000, at any time outstanding,
(iii) the Liens existing on the Effective Date and described
on Schedule 5.02(a) hereto,
(iv) the replacement, extension or renewal of any Lien
permitted by clause (iii) above upon or in the same property
theretofore subject thereto or the replacement, extension or renewal
(without increase in the amount or change in any direct or
contingent obligor) of the Debt secured thereby,
(v) Liens, if any, resulting from the documents evidencing the
Receivables Financing,
(vi) Liens created under the Collateral Documents, and
(vii) Liens not otherwise permitted by clauses (i) through
(vi) securing Debt or other obligations in an aggregate amount not
to exceed $10,000,000 at any time outstanding.
(b) Mergers, Etc. Merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in
a series of transactions) all or substantially all of its assets (whether
now owned or hereafter acquired) to, any Person, or permit any of its
Subsidiaries to do so, except that any Subsidiary of the Borrower may
merge or consolidate with or into, or dispose of assets to, any other
Subsidiary of the Borrower, and except that any Subsidiary of the Borrower
may merge into or dispose of assets to the Borrower, provided, in each
case, that no Default shall have occurred and be continuing at the time of
such proposed transaction or would result therefrom.
31
(c) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change (i) in accounting
policies or reporting practices, except as required by generally
accepted accounting principles or applicable law and disclosed to
the Lenders and the Agent or (ii) in its fiscal year.
(d) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of any of its assets or any interest therein (including the
sale or factoring at maturity or collection of any account) to any
Person, or permit or suffer any other Person to acquire any interest
in any of its assets other than (i) in connection with the
Receivables Financing, (ii) the assets listed on Schedule 5.02(d)
hereto, (iii) sales of inventory in the ordinary course of business
and (iv) assets having a book value of not more than $25,000,000,
provided, in the case of clauses (ii) and (iv) above, (x) no Default
has occurred and is continuing or would result therefrom, (y) such
sale or other transfer is for Fair Market Value and (z) 75% of the
proceeds of such sale or transfer are payable in cash to the seller
upon the consummation of such sale. "Fair Market Value" means (a)
with respect to any asset or group of assets (other than a
marketable security) at any date, the value of the consideration
obtainable in a sale of such asset at such date assuming a sale by a
willing seller to a willing purchaser dealing at arm's length and
arranged in an orderly manner over a reasonable period of time
having regard to the nature and characteristics of such asset and
with respect to the sale of assets with a book value in excess of
$25,000,000, as such sale is reasonably approved by the Board of
Directors of the Borrower or, if such asset shall have been the
subject of a relatively contemporaneous appraisal by an independent
third party appraiser, the basic assumptions underlying which have
not materially changed since its date, the value set forth in such
appraisal and (b) with respect to any marketable security at any
date, the closing sale price of such security on the Business Day
next preceding such date, as appearing in any published list of any
national securities exchange or the NASDAQ Stock Market or, if there
is no such closing sale price of such Security, the final price for
the purchase of such security at face value quoted on such Business
Day by a financial institution of recognized standing regularly
dealing in securities of such type and selected by the Agent.
(e) Investments in Other Persons. Make, or permit any of its
Subsidiaries to make, any Investment in any Person, except:
(i) equity Investments or Investments consisting of
intercompany Debt by the Borrower and its Subsidiaries in
their Subsidiaries outstanding on the date hereof and
additional investments in wholly owned Subsidiaries;
(ii) loans and advances to employees in the ordinary
course of the business of the Borrower and its Subsidiaries as
presently conducted; and
(iii) Investments by the Borrower and its Subsidiaries
in deposit accounts maintained in the ordinary course of
business; and
(iv) other Investments made during the term of this
Agreement of not more than $10,000,000 in the aggregate;
provided that with respect to Investments made under this
clause (iv): (1) any newly acquired or organized Subsidiary of
the Borrower or any of its Subsidiaries shall be a wholly
owned Subsidiary thereof; (2) immediately before and after
giving effect thereto, no Default shall have occurred and be
continuing or would result therefrom; (3) any company or
business acquired or invested in pursuant to this clause (iv)
shall be in the same line of business as the business of the
Borrower or any of its Subsidiaries; (4) immediately after
giving effect to the acquisition of a company or business
pursuant to this clause (iv), the Borrower shall be in pro
forma compliance with the covenants contained in Section 5.03,
calculated based on the financial statements most recently
delivered to the Lenders pursuant to Section 5.01(i) and as
though such acquisition had occurred at the beginning of the
four-quarter period covered thereby, as evidenced by a
certificate of the chief financial officer of the Borrower
delivered to the Lenders demonstrating such compliance.
(f) Restricted Payments. Directly or indirectly, declare,
order, pay, make or set apart any sum for any Restricted Payment
unless, after giving effect to such Restricted Payment, (i) Total
Excess
32
Availability (calculated on a pro forma basis using the average
Total Excess Availability for each day during the immediately
preceding calendar month) is not less than the greater of (A)
$210,000,000, reduced by the amount of any Scheduled Other Debt
Payment made during said immediately preceding month, and (B)
$150,000,000, and (ii) the Adjusted EBITDA of the Borrower and its
Subsidiaries for the twelve month period ending on the last day of
the most recently completed calendar month is not less than
$200,000,000.
(g) Negative Pledge. Enter into or suffer to exist, or permit
any of its Subsidiaries to enter into or suffer to exist, any
agreement prohibiting or conditioning the creation or assumption of
any Lien upon any of its property or assets except (i) in favor of
the Collateral Trustees for the benefit of the Secured Parties or
(ii) in connection with (A) any Debt (including the Receivables
Financing and the Debt contemplated by Section 3.01(j)) or operating
lease outstanding on the Effective Date, (B) any purchase money Debt
solely to the extent that the agreement or instrument governing such
Debt prohibits a Lien on the property acquired with the proceeds of
such Debt, (C) any Capitalized Lease solely to the extent that such
Capitalized Lease prohibits a Lien on the property subject thereto
or (D) any Debt outstanding on the date any Subsidiary of the
Borrower becomes such a Subsidiary (so long as such agreement was
not entered into solely in contemplation of such Subsidiary becoming
a Subsidiary of the Borrower).
(h) Capital Expenditures. Make or incur, or permit its
Subsidiaries to make or incur, Capital Expenditures during each of
the fiscal years set forth below, in an aggregate amount in excess
of the maximum amount set forth below for such fiscal year:
Maximum Amount of Capital
Fiscal Year Ending Expenditures
------------------ -------------------------
December 2003 $75,000,000
December 2004 $90,000,000
and each fiscal year thereafter
provided, however, that to the extent that actual Capital
Expenditures for any such fiscal year shall be less than the maximum
amount set forth above for such fiscal year (without giving effect to the
carryover permitted by this proviso), 50% of the difference between said
stated maximum amount and such actual Capital Expenditures shall, in
addition, be available for Capital Expenditures in the next succeeding
fiscal year.
(i) Foreign Subsidiary Debt. Permit any of its Subsidiaries
organized under the laws of any jurisdiction outside the United States to
create, incur, assume or suffer to exist, any Debt, other than:
(i) Debt owed to the Borrower or a wholly owned Subsidiary of
the Borrower,
(ii) Debt existing on the Effective Date and described on
Schedule 5.02(i) hereto (the "Existing Foreign Subsidiary Debt"),
and any Debt extending the maturity of, or refunding or refinancing,
in whole or in part, the Existing Debt, provided that the principal
amount of such Existing Debt shall not be increased above the
principal amount thereof outstanding immediately prior to such
extension, refunding or refinancing, and the direct and contingent
obligors therefor shall not be changed, as a result of or in
connection with such extension, refunding or refinancing
(iii) unsecured Debt aggregating for all of such Subsidiaries
not more than $25,000,000 at any time outstanding, and
(iv) endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business.
(j) Prepayments of Debt. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner,
or make any payment in violation of any subordination terms of, any Debt
and will not permit any of its Subsidiaries to do any of the foregoing;
provided, however, that the Borrower or any Subsidiary of the Borrower may
(i) prepay any obligations hereunder in accordance with
33
the terms of this Agreement, (ii) make regularly scheduled or otherwise
required repayments or redemptions of Debt, (iii) prepay Debt under the
Receivables Financing, (iv) prepay any Debt payable to the Borrower by any
of its Subsidiaries, (v) prepay the Borrower's 9 3/8% Senior Notes due
2003 with the proceeds of the proceeds of the Debt contemplated by Section
3.01(j) deposited into escrow on the Effective Date, (vi) renew, extend,
refinance and refund Debt on terms no less favorable to the Borrower or
its Subsidiary obligated thereunder, including as to weighted average
maturity and final maturity, than the Debt referred to in Section 3.01(j),
and (vii) prepay any other obligations on any Debt with funds other than
proceeds of Advances provided that before and after giving effect to such
prepayment, (A) Total Excess Availability (calculated on a pro forma basis
using the average Total Excess Availability for each day during the
immediately preceding calendar month) is not less than the greater of (x)
$210,000,000 reduced by the amount of any Scheduled Other Debt Payment
made during said preceding month, and (y) $150,000,000, and (B) the
Adjusted EBITDA of the Borrower and its Subsidiaries for the twelve-month
period ending on the last day of the most recently completed Fiscal Period
is not less than $200,000,000.
(k) Partnerships, Etc. Become a general partner in any general or
limited partnership or joint venture, or permit any of its Subsidiaries to
do so, other than any Subsidiary the sole assets of which consist of its
interest in such partnership or joint venture or as permitted pursuant to
Section 5.02(e)(iv),
SECTION 5.03. Financial Covenants. So long as any Advance shall
remain unpaid, any Lender shall have any Commitment hereunder or any Letter of
Credit shall be outstanding, the Borrower will:
(a) Interest Coverage Ratio. Maintain an Interest Coverage Ratio
during each fiscal quarter set forth below of not less than the ratio set
opposite such fiscal period:
Period Ratio
-------------------------------------- ------
July 1, 2003 through December 31, 2003 1.00:1
January 1, 2003 through March 31, 2004 1.25:1
April 1, 2004 through June 30, 2004 1.50:1
July 1, 2004 through September 30, 2004 2.00:1
October 1, 2004 through March 31, 2005 2.25:1
April 1, 2005 through June 30, 2005 2.50:1
July 1, 2005 through March 31, 2006 2.75:1
April 1, 2006 through June 30, 2006 3.00:1
July 1, 2006 and thereafter 3.25:1
(b) Borrowed Debt/Adjusted EBITDA Ratio. Maintain a Borrowed
Debt/Adjusted EBITDA Ratio during each fiscal quarter set forth below of
not more than the ratio set opposite such fiscal period:
Period Ratio
-------------------------------------- ------
July 1, 2003 through September 30, 2003 11.00:1
October 1, 2003 through December 31, 2003 9.00:1
January 1, 2004 through March 31, 2004 7.85:1
April 1, 2004 through June 30, 2004 6.85:1
July 1, 2004 through September 30, 2004 5.50:1
October 1, 2004 through March 31, 2005 4.85:1
April 1, 2005 through June 30, 2005 4.50:1
July 1, 2005 through September 30, 2005 4.25:1
October 1, 2005 through March 31, 2006 3.85:1
April 1, 2006 through June 30, 2006 3.75:1
July 1, 2006 and thereafter 3.25:1
34
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Advance when
the same becomes due and payable; or the Borrower shall fail to pay any
interest on any Advance or make any other payment of fees or other amounts
payable under this Agreement or any Note within three days after the same
becomes due and payable; or
(b) Any representation or warranty made by the Borrower herein or in
any other Loan Document or by the Borrower (or any of its officers) in
connection with this Agreement shall prove to have been incorrect in any
material respect when made; or
(c) (i) The Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 5.01(d), (i)(iv), 5.02 or 5.03,
or (ii) the Borrower shall fail to perform or observe any other term,
covenant or agreement contained in any Loan Document on its part to be
performed or observed if such failure shall remain unremedied for 30 days
after written notice thereof shall have been given to the Borrower by the
Agent or any Lender; or
(d) The Borrower or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any Debt that is outstanding in a
principal or notional amount of at least $15,000,000 in the aggregate (but
excluding Debt outstanding hereunder) of the Borrower or such Subsidiary
(as the case may be), when the same becomes due and payable (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 such
Debt; or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Debt and shall continue after
the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or
to permit the acceleration of, the maturity of such Debt; or any such Debt
shall be declared to be due and payable, or required to be prepaid or
redeemed (other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each case
prior to the stated maturity thereof; or
(e) The Borrower or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against the Borrower or any of its Subsidiaries seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its property and, in the case of any
such proceeding instituted against it (but not instituted by it), either
such proceeding shall remain undismissed or unstayed for a period of 30
days, or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against, or the appointment
of a receiver, trustee, custodian or other similar official for, it or for
any substantial part of its property) shall occur; or the Borrower or any
of its Subsidiaries shall take any corporate action to authorize any of
the actions set forth above in this subsection (e); or
(f) Judgments or orders for the payment of money in excess of
$15,000,000 in the aggregate shall be rendered against the Borrower or any
of its Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there shall
be any period of 30 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; provided, however, that any such judgment or order shall
not be
35
an Event of Default under this Section 6.01(f) if and for so long as (i)
the amount of such judgment or order is covered by a valid and binding
policy of insurance between the defendant and the insurer covering payment
thereof and (ii) such insurer, which shall be rated at least "A" by A.M.
Best Company, has been notified of, and has not disputed the claim made
for payment of, the amount of such judgment or order; or
(g) Any non-monetary judgment or order shall be rendered against the
Borrower or any of its Subsidiaries that could be reasonably expected to
have a Material Adverse Effect, and there shall be any period of 30
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(h) (i) Any Person or two or more Persons acting in concert shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act
of 1934), directly or indirectly, of Voting Stock of the Borrower (or
other securities convertible into such Voting Stock) representing 33-1/3%
or more of the combined voting power of all Voting Stock of the Borrower;
or (ii) during any period of up to 24 consecutive months, commencing after
the date of this Agreement, individuals who at the beginning of such
24-month period were directors of the Borrower shall cease for any reason
(other than due to death, disability or voluntary retirement) to
constitute a majority of the board of directors of the Borrower (except to
the extent that individuals who at the beginning of such 24-month period
were replaced by individuals (x) elected by 50% of the remaining members
of the nominating committee of the board of directors of the Borrower or
(y) nominated for election by a majority of the remaining members of the
nominating committee of the board of directors of the Borrower and
thereafter elected as directors by the shareholders of the Borrower); or
(iii) any Person or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a contract
or arrangement that, upon consummation prior to the Termination Date, will
result in its or their acquisition of the power to exercise, directly or
indirectly, a controlling influence over the management or policies of the
Borrower; or
(i) Any ERISA Event shall have occurred and the sum (determined as
of the date of occurrence of such ERISA Event) of the Insufficiency of the
Plan with respect to which such ERISA Event shall have occurred and the
Insufficiency of any and all other Plans with respect to which an ERISA
Event shall have occurred and then exist (or the liability of the Borrower
and its ERISA Affiliates related to any such ERISA Event) has, or is
reasonably likely to have, a Material Adverse Effect; or
(j) The Borrower or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer
Plans by the Borrower and its ERISA Affiliates as Withdrawal Liability
(determined as of the date of such notification), exceeds $15,000,000 or
requires payments exceeding $5,000,000 per annum; or
(k) The Borrower or any of its ERISA Affiliates shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, and as a result of such reorganization or termination
the aggregate annual contributions of the Borrower and its ERISA
Affiliates to all Multiemployer Plans that are then in reorganization or
being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding $15,000,000;
or
(l) Any provision of any Loan Document after delivery thereof
pursuant to Section 3.01 shall for any reason cease to be valid and
binding on or enforceable against the Borrower, or the Borrower shall so
state in writing; or
(m) Any Collateral Document or financing statement after delivery
thereof pursuant to Section 3.01 shall for any reason (other than pursuant
to the terms thereof or as otherwise permitted by the Loan Documents)
cease to create a valid and perfection first priority lien on and security
interest in the Collateral purported to be covered thereby;
36
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Lender to make Advances (other than Advances by an Issuing
Bank or a Lender pursuant to Section 2.03(c)) and of the Issuing Banks to issue
Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the consent, of the
Required Lenders, by notice to the Borrower, declare the Advances, all interest
thereon and all other amounts payable under this Agreement to be forthwith due
and payable, whereupon the Advances, all such interest and all such amounts
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrower; provided, however, that in the event of an actual or deemed
entry of an order for relief with respect to the Borrower under the Federal
Bankruptcy Code or other applicable bankruptcy statute, (A) the obligation of
each Lender to make Advances (other than Advances by an Issuing Bank or a Lender
pursuant to Section 2.03(c)) and of the Issuing Banks to issue Letters of Credit
shall automatically be terminated and (B) the Advances, all such interest and
all such amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon
Default. If any Event of Default shall have occurred and be continuing, the
Agent may with the consent, or shall at the request, of the Required Lenders,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will, (a) pay to the Agent on behalf of the Lenders in same
day funds at the Agent's office designated in such demand, for deposit in the
L/C Cash Collateral Account, an amount equal to the aggregate Available Amount
of all Letters of Credit then outstanding or (b) make such other arrangements in
respect of the outstanding Letters of Credit as shall be acceptable to the
Required Lenders. If at any time the Agent determines that any funds held in the
L/C Cash Collateral Account are subject to any right or claim of any Person
other than the Agent and the Lenders or that the total amount of such funds is
less than the aggregate Available Amount of all Letters of Credit, the Borrower
will, forthwith upon demand by the Agent, pay to the Agent, as additional funds
to be deposited and held in the L/C Cash Collateral Account, an amount equal to
the excess of (a) such aggregate Available Amount over (b) the total amount of
funds, if any, then held in the L/C Cash Collateral Account that the Agent
determines to be free and clear of any such right and claim. Upon the drawing of
any Letter of Credit, to the extent funds are on deposit in the L/C Cash
Collateral Account, such funds shall be applied to reimburse the Issuing Banks
to the extent permitted by applicable law. After all such Letters of Credit
shall have expired or been fully drawn upon and all other obligations of the
Borrower hereunder and under the Notes shall have been paid in full, the
balance, if any, in such ▇▇ ▇▇▇▇ Collateral Account shall be returned to the
Borrower.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender (in its
capacities as a Lender and Issuing Bank, as applicable) hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement as are delegated to the Agent by
the terms hereof, together with such powers and discretion as are reasonably
incidental thereto. As to any matters not expressly provided for by this
Agreement (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, however, that the Agent shall not be
required to take any action that exposes the Agent to personal liability or that
is contrary to this Agreement or applicable law. The Agent agrees to give to
each Lender prompt notice of each notice given to it by the Borrower pursuant to
the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (i) may treat
the Lender that made any Advance as the holder of the Debt resulting therefrom
until the Agent receives an Assignment and Acceptance entered into by such
Lender, as assignor, and an
37
Eligible Assignee, as assignee, as provided in Section 8.07; (ii) may consult
with legal counsel (including counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether written or oral) made in or
in connection with this Agreement; (iv) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of the Borrower or to inspect the
property (including the books and records) of the Borrower; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other instrument or document
furnished pursuant hereto; and (vi) shall incur no liability under or in respect
of this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier, telegram or telex) believed
by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. Citicorp and Affiliates. With respect to its
Commitments, the Advances made by it and the Note issued to it, Citicorp shall
have the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include Citicorp in its
individual capacity. Citicorp and its Affiliates may accept deposits from, lend
money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, the
Borrower, any of its Subsidiaries and any Person who may do business with or own
securities of the Borrower or any such Subsidiary, all as if Citicorp were not
the Agent and without any duty to account therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon the Agent or any other Lender
and based on the financial statements referred to in Section 4.01(e) and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
SECTION 7.05. Indemnification. (a) The Lenders agree to indemnify
the Agent (to the extent not reimbursed by the Borrower), ratably according to
the respective principal amounts of the Advances then owed to each of them (or
if no Advances are at the time outstanding, ratably according to the respective
amounts of their Commitments), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against the Agent in any way relating to or arising
out of this Agreement or any action taken or omitted by the Agent under this
Agreement (collectively, the "Indemnified Costs"), provided that no Lender shall
be liable for any portion of the Indemnified Costs resulting from the Agent's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Lender agrees to reimburse the Agent promptly upon demand for its ratable
share of any out-of-pocket expenses (including reasonable counsel fees) incurred
by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, to the extent that the Agent
is not reimbursed for such expenses by the Borrower. In the case of any
investigation, litigation or proceeding giving rise to any Indemnified Costs,
this Section 7.05 applies whether any such investigation, litigation or
proceeding is brought by the Agent, any Lender or a third party (other than a
third party with which a Lender contracts to obtain deposits to fund an Advance
with respect to claims arising from such contract).
(b) Each Lender severally agrees to indemnify the Issuing Banks (to
the extent not promptly reimbursed by the Borrower) from and against such
Lender's ratable share (determined as provided below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against any such Issuing Bank in any way
relating to or arising out of this Agreement or any action taken or omitted by
such Issuing Bank hereunder or in connection herewith; provided, however, that
no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Issuing Bank's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
any
38
such Issuing Bank promptly upon demand for its ratable share of any costs and
expenses (including, without limitation, fees and expenses of counsel) payable
by the Borrower under Section 8.04, to the extent that such Issuing Bank is not
promptly reimbursed for such costs and expenses by the Borrower.
(c) For purposes of this Section 7.05, the Lenders' respective
Ratable Shares of any amount shall be determined, at any time, according to the
sum of (a) the aggregate principal amount of the Advances outstanding at such
time and owing to the respective Lenders and (b) their respective Unused
Commitments at such time. The failure of any Lender to reimburse the Agent
promptly upon demand for its ratable share of any amount required to be paid by
the Lenders to the Agent as provided herein shall not relieve any other Lender
of its obligation hereunder to reimburse the Agent for its ratable share of such
amount, but no Lender shall be responsible for the failure of any other Lender
to reimburse the Agent for such other Lender's ratable share of such amount.
Without prejudice to the survival of any other agreement of any Lender
hereunder, the agreement and obligations of each Lender contained in this
Section 7.05 shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under the Notes.
SECTION 7.06. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Agent, which successor Agent, so long as no Default has occurred and is
continuing, shall be approved by the Borrower, which approval shall not be
unreasonably withheld or delayed. If no successor Agent shall have been so
appointed by the Required Lenders in accordance with the immediately preceding
sentence, and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent, which shall be a commercial
bank organized under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $500,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
SECTION 7.07. Other Agents. Each Lender hereby acknowledges that
neither the documentation agent, syndication agent nor any other Lender
designated as any "Agent" on the signature pages hereof has any liability
hereunder other than in its capacity as a Lender.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement or the Notes, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Lenders, do any of the following: (a)
waive any of the conditions specified in Section 3.01, (b) increase the
Revolving Credit Commitments of the Lenders or subject the Lenders to any
additional obligations, (c) reduce the principal of, or interest on, the
Advances or any fees or other amounts payable hereunder, (d) postpone any date
fixed for any payment or mandatory prepayment of principal of, or interest on,
the Advances or any fees or other amounts payable hereunder, (e) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Advances, or the number of Lenders, that shall be required for the Lenders or
any of them to take any action hereunder, (f) release any Collateral in any
transaction other than (x) sales of Inventory in the ordinary course of business
or (y) in connection with the sale of any assets listed on Schedule 5.02(d) or
permit the creation, incurrence, assumption or existence of any Lien on any
Collateral to secure any obligations other than obligations owing to the Secured
Parties under the Loan Documents or (g) amend this Section 8.01; and provided
further that (x) no amendment, waiver or consent shall, unless in writing and
signed by the Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the
39
Agent under this Agreement or any other Loan Document, (y) no amendment, waiver
or consent of Section 8.07(i) shall, unless in writing and signed by each Lender
that has granted a funding option to an SPC in addition to the Lenders required
above to take such action, affect the rights or duties of such Lender or SPC
under this Agreement or any other Loan Document and (z) no amendment, waiver or
consent shall, unless in writing and signed by the Issuing Banks in additions to
the Lenders required above to take such action, adversely affect the rights or
obligations of the Issuing Banks under this Agreement.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic or
telex communication) and mailed, telecopied, telegraphed, telexed or delivered,
if to the Borrower, at the address of the Borrower at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: Treasurer; if to any Initial Lender, at its
Domestic Lending Office specified opposite its name on Schedule I hereto; if to
any other Lender, at its Domestic Lending Office specified in the Assignment and
Acceptance pursuant to which it became a Lender; and if to the Agent, at its
address at ▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Bank
Loan Syndications Department; or, as to the Borrower or the Agent, at such other
address as shall be designated by such party in a written notice to the other
parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the Agent. All
such notices and communications shall be effective when received. Delivery by
telecopier of an executed counterpart of any amendment or waiver of any
provision of this Agreement or the Notes or of any Exhibit hereto to be executed
and delivered hereunder shall be effective as delivery of a manually executed
counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 8.04. Costs and Expenses. (a) The Borrower agrees to pay on
demand all costs and expenses of the Agent in connection with the preparation,
execution, delivery, administration, modification and amendment of this
Agreement, the Notes and the other documents to be delivered hereunder,
including, without limitation, (A) all due diligence, syndication (including
printing, distribution and bank meetings), transportation, computer,
duplication, appraisal, consultant, and audit expenses and (B) the reasonable
fees and expenses of counsel for the Agent with respect thereto and with respect
to advising the Agent as to its rights and responsibilities under this
Agreement. The Borrower further agrees to pay on demand all costs and expenses
of the Agent and the Lenders, if any (including, without limitation, reasonable
counsel fees and expenses), in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the Notes and
the other documents to be delivered hereunder, including, without limitation,
reasonable fees and expenses of counsel for the Agent and each Lender in
connection with the enforcement of rights under this Section 8.04(a).
(b) The Borrower agrees to indemnify and hold harmless the Agent and
each Lender and each of their Affiliates and their officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of, in connection with the preparation for a
defense of, any investigation, litigation or proceeding arising out of, related
to or in connection with (i) the Notes, this Agreement, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the
Advances or (ii) the actual or alleged presence of Hazardous Materials on any
property of the Borrower or any of its Subsidiaries or any Environmental Action
relating in any way to the Borrower or any of its Subsidiaries, in each case of
such an investigation, litigation or other proceeding to which the indemnity in
this Section 8.04(b) applies, such indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by the Borrower, its
directors, shareholders or creditors or an Indemnified Party or any other Person
or any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated, except to the extent such
claim, damage, loss, liability or expense resulted from such Indemnified Party's
gross negligence or willful misconduct. The Borrower also agrees not to assert
any claim against the Agent, any Lender, any of their Affiliates, or any of
their respective directors, officers, employees, attorneys and agents, on any
theory of liability, for special or indirect damages arising out of or otherwise
relating to the Notes, this Agreement, any of the transactions contemplated
herein or the actual or proposed use of the proceeds of the Advances.
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(i) Each Indemnified Party shall, promptly after becoming aware of
any actual or threatened action or claim against such Indemnified Party in
respect of which indemnification may be sought against the Borrower
pursuant to this Section 8.04(b), notify the Borrower in writing of such
action or claim. In case any such action shall be brought against any
Indemnified Party and such Indemnified Party shall notify the Borrower of
the commencement thereof, the Borrower may participate therein or assume
the defense thereof and after notice from the Borrower to such Indemnified
Party of an election so to assume the defense thereof, such Indemnified
Party shall cooperate fully, completely and promptly in the defense
thereof, including without limitation, the settlement of outstanding
claims, and the Borrower will not be liable to such Indemnified Party
under this Section 8.04(b) for any legal or other expenses subsequently
incurred by such Indemnified Party in connection with the defense thereof
other than reasonable costs of investigation incurred with the consent of
the Borrower, which consent shall not be unreasonably withheld or delayed;
provided, however, that unless and until the Borrower so assumes the
defense of any such action, the Borrower shall have the right to
participate at its own expense in the defense of any such action to which
it is a party. If the Borrower shall not have so assumed the defense of
any such action or if any Indemnified Party shall have reasonably
concluded that there may be defenses available to it or them which are
different from or additional to those available to the Borrower (in which
case the Borrower shall not have the right to direct the defense of such
action on behalf of such Indemnified Party), legal and other expenses
incurred by such Indemnified Party shall be borne by the Borrower;
provided that the Borrower shall be liable only for the expenses of a
single legal counsel for all Indemnified Parties in connection with any
single action. Notwithstanding the foregoing, the Borrower shall not be
liable for any settlement of any action or claim effected without its
consent.
(ii) The Borrower will not settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification has been sought hereunder
(whether or not an Indemnified Party is a party to such claim, action,
suit or proceeding) without the prior written consent of the Agent, unless
such settlement, compromise or consent includes an unconditional release
of the Agent and each Indemnified Party from all liability arising from
such claim, action, suit or proceeding.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrower to or for the account of a Lender (i) other
than on the last day of the Interest Period for such Advance, as a result of a
payment or Conversion pursuant to Section 2.08, 2.10 or 2.12, acceleration of
the maturity of the Notes pursuant to Section 6.01 or for any other reason, or
by an Eligible Assignee to a Lender other than on the last day of the Interest
Period for such Advance upon an assignment of rights and obligations under this
Agreement pursuant to Section 8.07 as a result of a demand by the Borrower
pursuant to Section 8.07(a) or (ii) as a result of a payment or Conversion
pursuant to Section 2.08, 2.10 or 2.12, the Borrower shall, upon demand by such
Lender (with a copy of such demand to the Agent), pay to the Agent for the
account of such Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses that it may reasonably incur as a result of
such payment or Conversion or as a result of any inability to Convert or
redenominate in the case of Section 2.08 or 2.12, including, without limitation,
any loss, cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by any Lender to fund or maintain such
Advance.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
Sections 2.11, 2.14 and 8.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the Notes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during
the continuance of any Event of Default and (ii) the making of the request or
the granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 6.01,
each Lender and each of its Affiliates is hereby authorized at any time that
payment owed to such Lender is not made by the Borrower to the Agent when due
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
or such Affiliate to or for the credit or the account of the Borrower against
any and all of the obligations of the Borrower now or hereafter existing under
this Agreement and the Note held by such Lender, whether or not such Lender
shall have made any demand under this Agreement or such Note and although such
obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
after any such set-off and application, provided that the failure to give such
notice shall not affect the validity of
41
such set-off and application. The rights of each Lender and its Affiliates under
this Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Lender and its Affiliates may
have.
SECTION 8.06. Binding Effect. This Agreement shall become effective
(other than Sections 2.01 and 2.03, which shall only become effective upon
satisfaction of the conditions precedent set forth in Section 3.01) when it
shall have been executed by the Borrower and the Agent and when the Agent shall
have been notified by each Initial Lender and each Initial Issuer that such
Initial Lender or Initial Issuer has executed it and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Agent and each Lender and
their respective successors and assigns, except that the Borrower shall not have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lenders.
SECTION 8.07. Assignments and Participations. (a) Each Lender may
and, if demanded by the Borrower (following a demand by such Lender pursuant to
Section 2.11 or 2.14) upon at least 20 Business Days' notice to such Lender and
the Agent, will assign to one or more Persons all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Revolving Credit Commitment, the Advances owing to it and the
Note or Notes held by it); provided, however, that (i) each such assignment
shall be of a constant, and not a varying, percentage of all rights and
obligations under this Agreement, (ii) except in the case of an assignment to a
Person that, immediately prior to such assignment, was a Lender or an assignment
of all of a Lender's rights and obligations under this Agreement, the amount of
the Revolving Credit Commitment of the assigning Lender being assigned pursuant
to each such assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be less than
$2,500,000 or an integral multiple of $500,000 in excess thereof, (iii) each
such assignment shall be to an Eligible Assignee, (iv) each such assignment made
as a result of a demand by the Borrower pursuant to this Section 8.07(a) shall
be arranged by the Borrower after consultation with the Agent and shall be
either an assignment of all of the rights and obligations of the assigning
Lender under this Agreement or an assignment of a portion of such rights and
obligations made concurrently with another such assignment or other such
assignments that together cover all of the rights and obligations of the
assigning Lender under this Agreement, (v) no Lender shall be obligated to make
any such assignment as a result of a demand by the Borrower pursuant to this
Section 8.07(a) unless and until such Lender shall have received one or more
payments from either the Borrower or one or more Eligible Assignees in an
aggregate amount at least equal to the aggregate outstanding principal amount of
the Advances owing to such Lender, together with accrued interest thereon to the
date of payment of such principal amount and all other amounts payable to such
Lender under this Agreement, and (vi) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with any Note subject to such
assignment and a processing and recordation fee of $3,500 payable by the parties
to each such assignment, provided, however, that in the case of each assignment
made as a result of a demand by the Borrower, such recordation fee shall be
payable by the Borrower except that no such recordation fee shall be payable in
the case of an assignment made at the request of the Borrower to an Eligible
Assignee that is an existing Lender, and (vii) any Lender may, without the
approval of the Borrower and the Agent, assign all or a portion of its rights to
any of its Affiliates. Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and Acceptance,
(x) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
and (y) the Lender assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (other than its rights under Section 2.11,
2.14 and 8.04 to the extent any claim thereunder relates to an event arising
prior such assignment) and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest created
or purported to be created under or in connection with, this Agreement or any
other instrument or document furnished pursuant hereto; (ii) such assigning
42
Lender makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under this Agreement or any
other instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee confirms that it is an
Eligible Assignee; (vi) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers and discretion
under this Agreement as are delegated to the Agent by the terms hereof, together
with such powers and discretion as are reasonably incidental thereto; and (vii)
such assignee agrees that it will perform in accordance with their terms all of
the obligations that by the terms of this Agreement are required to be performed
by it as a Lender.
(c) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Note or Notes subject to such assignment, the Agent shall, if
such Assignment and Acceptance has been completed and is in substantially the
form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower.
(d) The Agent shall maintain at its address referred to in Section
8.02 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recordation of the names and addresses of the Lenders,
with respect to Lenders, and the Commitment of, and principal amount of the
Advances owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Each Lender may sell participations to one or more banks or
other entities (other than the Borrower or any of its Affiliates) in or to all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitment, the Advances owing to it
and any Note or Notes held by it); provided, however, that (i) such Lender's
obligations under this Agreement (including, without limitation, its Commitment
to the Borrower hereunder) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note for all
purposes of this Agreement, (iv) the Borrower, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and (v) no participant
under any such participation shall have any right to approve any amendment or
waiver of any provision of this Agreement or any Note, or any consent to any
departure by the Borrower therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Notes or
any fees or other amounts payable hereunder, in each case to the extent subject
to such participation, or postpone any date fixed for any payment of principal
of, or interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation.
(f) Each Lender may grant to a special purpose funding vehicle (an
"SPC") the option to fund all or any part of any Advance that such Lender is
obligated to fund under this Agreement (and upon the exercise by such SPC of
such option to fund, such Lender's obligations with respect to such Advance
shall be deemed satisfied to the extent of any amounts funded by such SPC);
provided, however, that (i) such Lender's obligations under this Agreement
(including, without limitation, its Commitment to the Borrower hereunder) shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the Borrower, the
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement, (iv) any such option granted to an SPC shall not constitute a
commitment by such SPC to fund any Advance, (v) neither the grant nor the
exercise of such option to an SPC shall increase the costs or expenses or
otherwise increase or change the obligations of the Borrower under this
Agreement (including, without limitation, its obligations under Section 2.09)
(vi) the SPC shall be bound by the provisions of Section 8.08 and (vii) no SPC
shall have any right to approve any
43
amendment or waiver of any provision of this Agreement or any Note, nor any
consent to any departure by the Borrower therefrom, except to the extent that
such amendment, waiver or consent would reduce the principal of, or interest on,
the Notes or any fees or other amounts payable hereunder, in each case to the
extent subject to such grant of funding option, or postpone any date fixed for
any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such grant of
funding option. Each party to this Agreement hereby agrees that no SPC shall be
liable for any indemnity or payment under this Agreement for which a Lender
would otherwise be liable. Subject to the foregoing provisions of this clause
(f), an SPC shall have all the rights of the granting Lender. An SPC may assign
or participate all or a portion of its interest in any Advances to the granting
Lender or to any financial institution providing liquidity or credit support to
or for the account of such SPC without paying any processing fee therefor and,
in connection therewith may disclose on a confidential basis any information
relating to the Borrower to any rating agency, commercial paper dealer or
provider of any surety, guarantee or credit or liquidity enhancements to such
SPC. In furtherance of the foregoing, each party hereto agrees (which agreements
shall survive the termination of this Agreement) that, prior to the date that is
one year and one day after the payment in full of all outstanding commercial
paper or other senior indebtedness of any SPC, it will not institute against, or
join any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the
laws of the United States or any State thereof.
(g) Any Lender may, in connection with any assignment, participation
or grant of funding option or proposed assignment, participation or grant of
funding option pursuant to this Section 8.07, disclose to the assignee,
participant or SPC or proposed assignee, participant or SPC, any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower; provided that, prior to any such disclosure, the assignee, participant
or SPC or proposed assignee, participant or SPC shall agree to preserve the
confidentiality of any Confidential Information relating to the Borrower
received by it from such Lender.
(h) Each Issuing Bank may assign to an Eligible Assignee its rights
and obligations or any portion of its undrawn Letter of Credit Commitment at any
time; provided, however, that (i) the amount of the Letter of Credit Commitment
of the assigning Issuing Bank being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $1,000,000 or an integral multiple of
$1,000,000 in excess thereof, and (ii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with a processing and
recordation fee of $3,500.
(i) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Advances
owing to it and any Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
SECTION 8.08. Confidentiality. Neither the Agent nor any Lender or
SPC shall disclose any Confidential Information to any other Person without the
consent of the Borrower, other than (a) to the Agent's or such Lender's
Affiliates and their officers, directors, employees, agents and advisors and, as
contemplated by Section 8.07(g), to actual or prospective assignees and
participants, and then only on a confidential basis, (b) as required by any law,
rule or regulation or judicial process, (c) to any rating agency when required
by it, provided that, prior to any such disclosure such rating agency shall
undertake to preserve the confidentiality of any Confidential Information
relating to the Borrower received by it from such Lender, (d) in connection with
any legal proceedings to which such Person is a party, and then only on a
confidential basis and (e) as requested or required by any state, federal or
foreign authority or examiner regulating banks or banking. Notwithstanding
anything herein to the contrary, the Agent and the Lenders may disclose to any
and all persons, without limitation of any kind, the U.S. tax treatment and tax
structure of the transactions contemplated hereby and all materials of any kind
(including opinions or other tax analyses) that are provided to the Agent or the
Lenders relating to such U.S. tax treatment and tax structure.
SECTION 8.09. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of New
York.
44
SECTION 8.10. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
SECTION 8.11. Jurisdiction, Etc. (a) Each of the parties hereto
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of any New York State court or federal court of
the United States of America sitting in New York City, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the Notes, or for recognition or enforcement of any judgment, and
each of the parties hereto hereby irrevocably and unconditionally agrees that
all claims in respect of any such action or proceeding may be heard and
determined in any such New York State court or, to the extent permitted by law,
in such federal court. The Borrower hereby agrees that service of process in any
such action or proceeding brought in the any such New York State court or in
such federal court may be made upon the Borrower at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: Secretary. The Borrower hereby further irrevocably
consents to the service of process in any action or proceeding in such courts by
the mailing thereof by any parties hereto by registered or certified mail,
postage prepaid, to the Borrower at its address specified pursuant to Section
8.02. Each of the parties hereto agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.
(b) Each of the parties hereto irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the Notes
in any New York State or federal court. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
SECTION 8.12. No Liability of the Issuing Banks. The Borrower
assumes all risks of the acts or omissions of any beneficiary or transferee of
any Letter of Credit with respect to its use of such Letter of Credit. Neither
an Issuing Bank nor any of its officers or directors shall be liable or
responsible for: (a) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (b)
the validity, sufficiency or genuineness of documents, or of any endorsement
thereon, even if such documents should prove to be in any or all respects
invalid, insufficient, fraudulent or forged; (c) payment by such Issuing Bank
against presentation of documents that do not comply with the terms of a Letter
of Credit, including failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or (d) any other circumstances whatsoever in
making or failing to make payment under any Letter of Credit, except that the
Borrower shall have a claim against such Issuing Bank, and such Issuing Bank
shall be liable to the Borrower, to the extent of any direct, but not
consequential damages suffered by the Borrower that the Borrower proves were
caused by (i) such Issuing Bank's willful misconduct or gross negligence as
determined in a final, non-appealable judgment by a court of competent
jurisdiction in determining whether documents presented under any Letter of
Credit comply with the terms of the Letter of Credit or (ii) such Issuing Bank's
willful failure to make lawful payment under a Letter of Credit after the
presentation to it of a draft and certificates strictly complying the terms and
conditions of the Letter of Credit. In furtherance and not in limitation of the
foregoing, such Issuing Bank may accept documents that appear on their face to
be in order, without responsibility for further investigation, regardless of any
notice or information to the contrary.
SECTION 8.13. Authorization of Agent and Collateral Trustees. Upon
execution of this Agreement by the Required Lenders, the Lenders hereby (a)
authorize the Agent to instruct the Collateral Trustees to (i) release from the
Lien of the Security Agreement dated as of January 25, 2002 the assets listed on
Schedule 8.13 hereto, (ii) release the mortgages made by the Borrower or its
Subsidiaries pursuant to the Existing Credit Agreement and related to the
properties listed on Schedule 8.13, (iii) execute the amendments to the
Mortgages described in Section 3.01(h)(v), (iv) execute and deliver the
amendments to the Collateral Trust Agreements contemplated by Section
3.01(h)(vi), (v) execute and deliver the Intercreditor Agreement, and (vi)
terminate the Shared Collateral Pledge Agreement (as defined in the Existing
Credit Agreement) and release from the Lien of the Shared Collateral Pledge
Agreement the "Collateral" as defined therein, (b) authorize the Agent to (i)
execute on behalf of the Lenders the Intercreditor Agreement, (ii) execute all
documents to be executed by it relating to the
45
resignation of State Street Bank and Trust Company, N.A., as corporate trustee,
the appointment of U.S. Bank Trust National Association having its principal
place of business in New York, New York, as successor corporate trustee, and the
continued appointment of ▇▇▇▇▇▇▇▇ ▇▇▇▇, as individual trustee, under the
Collateral Documents, and (iii) take such other action as shall be reasonably
necessary to consummate the transactions contemplated by this Section 8.13 and
(c) terminate the Subsidiary Guaranty, as defined in the Existing Credit
Agreement.
46
SECTION 8.14. Waiver of Jury Trial. Each of the Borrower, the Agent
and the Lenders hereby irrevocably waives all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Agreement or the Notes or the
actions of the Agent or any Lender in the negotiation, administration,
performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
POLYONE CORPORATION
By_____________________________________
Title:
CITICORP USA, INC.,
as Agent
By_____________________________________
Title:
Letter of Credit Commitment
$35,000,000 NATIONAL CITY BANK
By_____________________________________
Title:
$35,000,000 Total of the Letter of Credit Commitments
Initial Lenders
Revolving Credit Commitment
$28,000,000 CITICORP USA, INC.
By__________________
Title:
$13,000,000 NATIONAL CITY COMMERCIAL FINANCE, INC.
By_____________________________________
Title:
$9,000,000 KEYBANK NATIONAL ASSOCIATION
By_____________________________________
Title:
$50,000,000 Total of the Revolving Credit Commitments
SCHEDULE I
POLYONE CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
APPLICABLE LENDING OFFICES
NAME OF INITIAL LENDER DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
---------------------- ----------------------- -------------------------
Citicorp USA, Inc. Two Penns Way, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇ Attn: ▇▇▇ ▇▇▇▇
T: ▇▇▇ ▇▇▇-▇▇▇▇ T: ▇▇▇ ▇▇▇-▇▇▇▇
F: ▇▇▇ ▇▇▇-▇▇▇▇ F: ▇▇▇ ▇▇▇-▇▇▇▇
Keybank National Association ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, 127 Public Square,
▇▇ ▇▇-▇▇-▇▇-▇▇▇▇ ▇▇ ▇▇-▇▇-▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇ Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇
T: ▇▇▇ ▇▇▇-▇▇▇▇ T: ▇▇▇ ▇▇▇-▇▇▇▇
F: ▇▇▇ ▇▇▇-▇▇▇▇ F: ▇▇▇ ▇▇▇-▇▇▇▇
National City Commercial Finance, Inc. ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ 1965 ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Locator 01-3049 Locator 01-3049
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
T: (▇▇▇) ▇▇▇-▇▇▇▇ T: (▇▇▇) ▇▇▇-▇▇▇▇
F: (▇▇▇) ▇▇▇-▇▇▇▇ F: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE II
POLYONE CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
MORTGAGED PROPERTIES
Facility Name State
------------- -----
Kennesaw GA
Macedonia OH
Massillon OH
Seabrook TX
Long Beach CA
Terre Haute IN
Avon Lake HQ OH
Avon Lake Mfg OH
Avon Lake PCC OH
Lehigh Valley PA
Sussex WI
North Baltimore OH
Elk Grove IL
Norwalk OH
Fort Worth TX
SCHEDULE 2.01(b)
POLYONE CORPORATION
AMENDED AND RESTATED CREDIT AGREEMENT
POLYONE CORPORATION
LETTER OF CREDIT SUMMARY
AS OF 5/1/2003
ISSUING OUTSTANDING EXPIRATION
BANK BENEFICIARY 5/1/2003 LC NUMBER DATE PURPOSE
-------- -------------------------------- ----------- ---------------- ---------- --------------------------------
Citibank MAH Supplemental Retirement Plan $ 7,279,000 NY00928-30028011 8/16/2003 MAH Supplemental retirement Plan
Citibank Liberty Mutual Insurance Company $ 2,400,000 NY-00928-30033915 11/20/2003 Environmental
Citibank United Missouri Bank $ 1,528,949 NY-00928-30029111 6/30/2003 MAH Executive Insurance
Citibank Nat Union Fire Ins., Pittsburgh $ 1,300,000 NY-00881-30035056 4/30/2004 Workers Compensation
Citibank Nat Union Fire Ins., Pittsburgh $ 135,523 NY-00928-30032148 4/18/2004 Workers Compensation
Citibank United Missouri Bank $ 100,000 NY-00928-30029112 6/30/2003 MAH Executive Insurance
KeyBank State of Washington $ 290,000 S97/94848 7/2/2003 Environmental
NCB Reliance National Indemnity Co. $ 5,808,381 SCL007823 5/13/2004 Workers Compensation
NCB B-Star, Inc $ 1,790,000 SCL007336 1/15/2004 Defendant lawsuit security
NCB Commonwealth of KY $ 1,571,612 SCL008206 5/8/2004 Workers Compensation
NCB NJ Dept. of Environment $ 1,000,000 SCL008341 ▇▇/▇/▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ $ 220,000 SCL007752 4/30/2004 Workers Compensation
NCB The Normandy Group $ 380,000 TO BE ISSUED - 5/1/2003 9/30/2003 Material payment security.
NCB Commonwealth of Virginia $ 12,160 75R 356 009 7/11/2003 Environmental
TOTAL
OUTSTANDING
5/1/2003
-----------
------------
TOTAL L/C'S OUTSTANDING $ 23,815,625
------------
SCHEDULE 3.01(b)
DISCLOSED LITIGATION
▇▇▇▇▇▇▇ CITY REMEDIATION- The Borrower has assumed remediation obligations for a
Superfund site located in ▇▇▇▇▇▇▇ City, Kentucky
CHEMICAL AND ASBESTOS EXPOSURE CASES- The Borrower and certain of its
subsidiaries currently defend chemical product exposure cases and asbestos
exposure cases. The Borrower and certain of its subsidiaries have been named in
suits involving multiple claimants and defendants relating to alleged asbestos
exposure and/or chemical exposure in the past by, among others, workers and
their families at plants owned by the Borrower, certain subsidiaries or by their
predecessors, or on board ships owned or operated by a predecessor of the
Borrower, members of the public who claim exposure to certain chemical products
manufactured by the Borrower and its predecessor(s) and (as to chemical exposure
only) workers at manufacturing facilities of others.
SCHEDULE 5.02(a)
EXISTING LIENS
ORIGINAL
FILING LOCATION SECURED PARTY FILE NUMBER FILE DATE DESCRIPTION OF COLLATERAL
--------------- ------------- ----------- --------- -------------------------
A. UCC FILINGS
Cuyahoga County, Ohio Newcourt Communications 708852 9/28/00 Equipment
Finance Corporation
Cuyahoga County, Ohio CIT Communications Finance 735973/1684 3/05/01 Equipment
Corporation
Cuyahoga County, Ohio Comdisco, Inc. 744539/1700 4/17/01 Leased equipment
Cuyahoga County, Ohio Comdisco, Inc. 744538/1700 4/17/01 Leased equipment
Cuyahoga County, Ohio Comdisco, Inc. 750551/1710 5/15/01 Leased equipment
Cuyahoga County, Ohio The Geon Company 1288530 8/15/94 Accounts and inventory
Cuyahoga County, Ohio Citicorp North America 200009139066 9/13/00 Inventory
Cuyahoga County, Ohio CIT Communications Finance 200012279125 12/27/00 Leased equipment
Corporation
Cuyahoga County, Ohio Safeco Credit Co. Inc. 200103149060 3/14/01 Lease
Cuyahoga County, Ohio CIT Group/Equipment Financing, Inc. 200105019029 5/01/01 Equipment
Cuyahoga County, Ohio LINC Quantum Analytics 200106019005 06/01/01 Equipment
Cuyahoga County, Ohio General Electric Capital Corporation 1407081 Lease
Delaware Toyota Motor Credit Corp. 11179428 09/18/01 Leased equipment
Delaware Toyota Motor Credit Corp. 20218663 12/27/01 Lease
Delaware Toyota Motor Credit Corp. 20218689 12/27/01 Lease
Delaware CitiCorp 20991228 4/20/02 All Accounts
Delaware Toyota Motor Credit Corp. 21037898 4/04/02 Lease
Delaware State Street Bank and Trust 21244825 5/17/02 Blanket Lien
Company, N.A., as
Corporate Trustee
Delaware CitiCorp 21281264 5/22/02
Delaware CitiCorp 21299605 5/24/02
Delaware GFC Leasing 21801780 6/24/02 Lease
Delaware GFC Leasing 22093767 8/19/02 Leased equipment
Delaware Toyota Motor Credit Corp. 22352791 9/18/02 Lease
Delaware Toyota Motor Credit Corp. 22417834 9/25/02 Lease
Delaware Crompton Corporation and its wholly 30566797 3/07/03 Consignment inventory
owned direct and indirect
subsidiaries
Delaware State Street Bank and Trust Company, 21243884 5/17/02 Blanket Lien
N.A., as Corporate Trustee
Delaware Crompton Corporation and its wholly 30566797 3/07/03 Consignment inventory
owned direct and indirect
subsidiaries
Delaware General Electric Capital Corporation 22057564 8/08/02 Lease
Delaware BASF Corporation 20136774 12/14/01 Consignment inventory
Depart. Of Financial Newcourt Communications 01938367 3/21/00 Leased equipment
Inst. Wisconsin Finance Corp.
▇▇▇▇▇▇ County Texas 1994 VCM Inc. ###-##-#### 8/19/94 Leased equipment
▇▇▇▇▇▇ County Texas 1994 VCM Inc. ###-##-#### 12/4/95 Leased equipment
▇▇▇▇▇▇ County Texas 1994 VCM Inc. ###-##-#### 12/26/96 Leased equipment
▇▇▇▇▇▇ County Texas 1994 VCM Inc ###-##-#### 5/5/99 Leased equipment
▇▇▇▇▇▇ County Texas 1994 VCM Inc. ###-##-#### 5/5/99 Leased equipment
Iberville Parish Louisiana AT&T Credit Corp. Book 24 Entry 21676 12/11/97 Leased equipment
Iberville Parish Louisiana AT&T Credit Corp. Book 24 Entry 19581 2/28/96 Leased equipment
Illinois GFC Leasing 4815135 1/04/01 Lease
Illinois CitiCorp 4357660 3/21/01 All Accounts
Illinois Toyota Motor Credit Corp. 4393993 6/05/01 Leased equipment
Illinois Toyota Motor Credit Corp. 4396268 6/11/01 Leased equipment
Jefferson Cnty. Kentucky IBM Credit Corp. 97-00630 1/22/97 Leased equipment
2
Jefferson Cnty. Kentucky Arrowhead Industrial Water Inc. 94-01627 2/22/94 Leased equipment
Jefferson Cnty. Kentucky Arrowhead Industrial Water Inc. 98-11018 12/18/98 Leased equipment
Jefferson Cnty. Kentucky Digital Financial Services 96-01124 2/7/96 Leased equipment
Jefferson Cnty. Kentucky TMCC 96-05992 7/10/96 Leased equipment
Jefferson Cnty. Kentucky Safeco Credit Co. Inc. 98-10779 12/11/98 Leased equipment
Lorain County, Ohio AT&T Credit Corp. 273701 6/28/95 Leased equipment
Lorain County, Ohio AT&T Credit Corp. 273700 6/28/95 Leased equipment
Lorain County, Ohio AT&T Credit Corp. 273770 7/5/95 Leased equipment
Lorain County, Ohio AT&T Credit Corp. 428076 9/30/96 Leased equipment
Lorain County, Ohio AT&T Credit Corp. 435714 11/8/96 Leased equipment
Lorain County, Ohio Yale Financial Services, Inc. 438007 11/22/96 Leased equipment
Lorain County, Ohio Yale Financial Services, Inc. 438008 11/22/96 Leased equipment
Lorain County, Ohio Copelco Capital Inc. 439670 12/10/96 Leased equipment
Lorain County, Ohio IBM Credit Corp. 447200 1/21/97 Leased equipment
Lorain County, Ohio IBM Credit Corp. 465494 5/5/97 Leased equipment
Lorain County, Ohio IBM Credit Corp. 465497 5/5/97 Leased equipment
Lorain County, Ohio IBM Credit Corp. 475971 6/30/97 Leased equipment
Lorain County, Ohio IBM Credit Corp. 482154 8/5/97 Leased equipment
Lorain County, Ohio AT&T Credit Corp. 484869 8/20/97 Leased equipment
Lorain County, Ohio IBM Credit Corp. 485823 8/26/97 Leased equipment
Lorain County, Ohio AT&T Credit Corp. 505835 12/10/97 Leased equipment
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 6/24/99 Leased equipment
3
Lorain County, Ohio KeyCorp Leasing 557353 8/19/99 Leased equipment
Lorain County, Ohio AT&T Credit Corp. 560982 9/8/98 Leased equipment
Lorain County, Ohio Advanta Business Services 273445 6/14/95 Leased equipment
Lorain County, Ohio AT&T Credit Corp. 276005 10/31/95 Leased equipment
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 8/17/98 Leased equipment
Lorain County, Ohio Newcourt Communications 656379 12/1/99 Leased equipment
Finance Corp.
Lorain County, Ohio Yale Financial Services, Inc. 438007 11/22/96 Lease
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 4/17/98 All Accounts
Lorain County, Ohio KeyCorp Leasing 557353 8/19/98 Lease
Lorain County, Ohio AT&T Credit Corporation 560982 9/08/98 Lease
Lorain County, Ohio NewCourt Communications 656379 12/01/98 Lease
Finance Corporation
Lorain County, Ohio NewCourt Communications 699448 8/07/00 Lease
Finance Corporation
Lorain County, Ohio NewCourt Communications 704832 9/07/00 Lease
Finance Corporation
Ontario IBM Canada Ltd. 844821621 9/29/98 Equipment, Accounts, Other
Ontario Newcourt Financial Ltd. 843754446 8/20/98 Inventory, Equipment,
Accounts Other, Motor
Vehicle Included
Ontario Hewlett-Packard (Canada) Ltd. 843396885 8/7/98 Equipment, Other
Ontario Xerox Canada Ltd. 836526789 12/4/97 Equipment, Other
Ontario Municipal Trust Co. 822352527 5/31/96 Equipment 1-Canon ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇-▇▇▇▇▇
▇▇▇▇▇▇ Photo Copier
1-Destroyit 2402CC
Shredder and the proceeds
of the foregoing
Ontario Teletech Financial Corp. 817292376 10/10/95 Equipment, Other
Ontario PHH Canada Inc. 802486656 10/1/92 Equipment, Other, Motor
4
Vehicle Included
Ontario GE Capital Canada Inc. 859446198 2/23/00 Equipment, Other
Ontario Liftow Limited 861459327 5/3/00 Equipment, Other, Motor
Vehicle Included 2000
Toyota 7FG18; VIN: 12194
Ontario GMAC Leaseco Limited 855814365 10/14/99 Consumer Goods, Equipment,
Other, Motor Vehicle
Included 1999 Chevrolet S
Truck VIN:
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Ontario GMAC Leaseco Limited 855484677 10/4/99 Consumer Goods, Equipment,
Other, Motor Vehicle
Included 1999 Chevrolet
Silverado VIN:
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Ontario Donlen Fleet Leasing Ltd. 851461875 5/28/99 Equipment, Other, Motor
Vehicle Included 1999
Pontiac Bonneville SE VIN:
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ All
improvements, additions,
replacement parts or any
other modifications of any
nature shall be, and
always remain, the
property of the lessor,
the whole without any
compensation to the
lessee.
Ontario Donlen Fleet Leasing Ltd. 851461884 5/28/99 Equipment, Other, Motor
Vehicle Included 1999
Pontiac Bonneville SE VIN:
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ All
improvements, additions,
replacement parts or any
other modifications of any
nature shall be, and
always remain, the
property of the lessor,
the whole without any
compensation to the
lessee.
Ontario Donlen Fleet Leasing Ltd. 851461893 5/28/99 Equipment, Other, Motor
Vehicle Included 1999 Jeep
Cherokee VIN:
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ All
improvements, additions,
5
replacement parts or any
other modifications of any
nature shall be, and
always remain, the
property of the lessor,
the whole without any
compensation to the
lessee.
Ontario Donlen Fleet Leasing Ltd. 851461902 5/28/99 Equipment, Other, Motor
Vehicle Included 1999
Pontiac Bonneville SE VIN:
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ All
improvements, additions,
replacement parts or any
other modifications of any
nature shall be, and
always remain, the
property of the lessor,
the whole without any
compensation to the
lessee.
Ontario AT&T Capital Canada Inc. 837993339 2/2/98 Equipment, Other
Ontario Xerox Canada Ltd. 836526789 12/4/97 Equipment, Other
Ontario Donlen Fleet Leasing Ltd. 836258283 11/26/97 Equipment, Other, Motor
Vehicle Included 1998
Pontiac Bonneville VIN:
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ 1997
Pontiac Bonneville VIN:
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ All
improvements, additions,
replacement parts or any
other modifications of any
nature shall be, and
always remain, the
property of the lessor,
the whole without any
compensation to the
lessee.
Ontario AT&T Capital Canada Inc. 833882301 8/28/97 Equipment, Other
Ontario Associates Capital Limited 826960176 12/9/96 Equipment, Other
Ontario IBM Canada Limited 825540084 10/10/96 Equipment, Accounts, Other
Ontario Danka Business Systems Ltd. 825392826 10/4/96 Equipment, Other
Ontario IBM Canada Limited 823927986 8/1/96 Equipment, Accounts,
6
Other
Ontario Danka Business Systems Ltd. 822325041 5/31/96 Equipment, Other
Ontario Hitachi Credit Canada Inc. 821219166 4/18/96 Equipment, Other Computer
equipment pursuant to
lease agreement No. 374-12
dated April 1, 1996, and
all amendments thereto,
under schedule of terms
for equipment lease
agreement No. 374 dated
March 25, 1991, and all
amounts owing thereunder.
Ontario PHH Canada Inc. 802486656 10/1/92 Equipment, Other Motor
Vehicle Included
Quebec National Leasing Group Inc. ▇▇-▇▇▇▇▇▇▇-▇▇▇▇ 8/17/99 RSW Technik energy
optimizer and related
equipment described
therein
Quebec PHH Vehicle Management Services, Inc. ▇▇-▇▇▇▇▇▇▇-▇▇▇▇ 12/22/99 All present and future
motor vehicles
Quebec Royal Bank of Canada ▇▇-▇▇▇▇▇▇▇-▇▇▇▇ 7/7/95 Re-transfer and
re-assignment of claims
Quebec The Bank of Nova Scotia and ▇▇-▇▇▇▇▇▇▇-▇▇▇▇ 8/22/94 Universality of all
property, present and
future, including claims,
Shintech Inc. receivables,
inventory, book debts,
equipment and other
movable property
Quebec AT&T Capital Canada Inc. ▇▇-▇▇▇▇▇▇▇-▇▇▇▇ 8/16/95 6 ▇▇▇▇▇▇ fax machines and
related equipment
Quebec AT&T Capital Canada Inc. ▇▇-▇▇▇▇▇▇▇-▇▇▇▇ 9/6/96 Copiers, collators and
related equipment
Quebec AT&T Capital Canada Inc. ▇▇-▇▇▇▇▇▇▇-▇▇▇▇ 3/5/96 Copiers, collators and
related equipment
Quebec AT&T Capital Canada Inc. ▇▇-▇▇▇▇▇▇▇-▇▇▇▇ 6/20/95 Copiers, collators and
related equipment
Secretary of State, The CIT Group 099-19922072927 10/8/92 Leased equipment
Colorado Credit Finance Inc.
Secretary of State, AT&T Credit Corp. 9734360328 12/5/97 Leased equipment
California
7
Secretary of State, Newcourt Communications Finance Corp. 9913360864 5/12/99 Leased equipment
California
Secretary of State, Fidelcor Business Credit Corp. 19882015682 3/16/88 Leased equipment
Colorado
Secretary of State, Fidelcor Business Credit Corp. 099-19882032426 5/4/88 Leased equipment
Colorado
Secretary of State, The CIT Group 099-19922072926 10/8/92 Leased equipment
Colorado Credit Finance Inc.
Secretary of State, The CIT Group 099-19942088799 12/1/94 Leased equipment
Colorado Credit Finance Inc.
Secretary of State, The CIT Group 099-19972094027 10/27/97 Leased equipment
Colorado Credit Finance Inc.
Secretary of State, Indiana AT&T Credit Corp. 2045493 4/3/96 Leased equipment
Secretary of State, Indiana AT&T Credit Corp. 2075526 9/24/96 Leased equipment
Secretary of State, KY AT&T Credit Corp. 139641 1/5/96 Leased equipment
Secretary of State, KY AT&T Credit Corp. 143196 8/20/97 Leased equipment
Secretary of State, KY Newcourt Communications Finance Corp. 1602095 10/21/99 Leased equipment
Secretary of State, Plasto-O-Meric, Inc. 2790951 5/19/97 Leased equipment
Missouri
Secretary of State, NJ AT&T Credit Corp. UC-01675659 1/4/96 Leased equipment
Secretary of State, NJ AT&T Credit Corp. UC-01693815 4/23/96 Leased equipment
Secretary of State, NJ IBM Credit Corporation UC-01710839 7/15/96 Leased equipment
Secretary of State, NJ AT&T Credit Corp. UC-01843825 6/15/98 Leased equipment
Secretary of State, NJ Newcourt Communications Finance Corp. UC-01871122 11/9/98 Leased equipment
Secretary of State, NJ IBM Credit Corporation UC-01883746 1/14/99 Leased equipment
Secretary of State, NJ Newcourt Communications Finance Corp. UC-01943976 12/1/99 Leased equipment
Secretary of State, NJ Newcourt Communications Finance Corp. UC-01943984 12/1/99 Leased equipment
Secretary of State, NJ Toyota Motor Credit UC-01951075 12/30/99 Leased equipment
Secretary of State, NJ Advantage Bank UC-01893206 3/11/99 Leased equipment
▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 8/15/94 Leased equipment
Secretary of State, Ohio Yale Financial Services AN19393 11/19/96 Leased equipment
Secretary of State, Ohio Yale Financial Services AN19409 11/19/96 Leased equipment
Secretary of State, Ohio IBM Credit Corp. AP0072841 8/7/98 Leased equipment
Secretary of State, Ohio Citicorp North America AP0077086 8/17/98 Leased equipment
Secretary of State, Ohio Keycorp Leasing AP0077677 8/19/98 Leased equipment
Secretary of State, Ohio AT&T Credit Corp. AP0080076 9/2/98 Leased equipment
Secretary of State, Ohio Safeco Credit Co. Inc. ▇▇▇▇▇▇▇▇▇ 10/21/98 Leased equipment
Secretary of State, Ohio IBM Credit Corp. AP0100171 11/23/98 Leased equipment
Secretary of State, Ohio IBM Credit Corp. AP0112853 1/4/99 Leased equipment
Secretary of State, Ohio IBM Credit Corp. ▇▇▇▇▇▇▇▇▇ 5/24/99 Leased equipment
Secretary of State, Ohio IBM Credit Corp. AP0153269 6/16/99 Leased equipment
Secretary of State, Ohio IBM Credit Corp. AP0176263 9/9/99 Leased equipment
Secretary of State, Ohio IBM Credit Corp. AP0180968 9/20/99 Leased equipment
Secretary of State, Ohio IBM Credit Corp. ▇▇▇▇▇▇▇▇▇ 10/22/99 Leased equipment
Secretary of State, Ohio IBM Credit Corp. AP0191197 10/27/99 Leased equipment
Secretary of State, Ohio IBM Credit Corp. AP0195162 11/12/99 Leased equipment
Secretary of State, Ohio IBM Credit Corp. AP0196196 11/22/99 Leased equipment
Secretary of State, Ohio Newcourt Communications Finance Corp. AP0197242 12/1/99 Leased equipment
Secretary of State, Ohio IBM Credit Corp. AP0197921 12/1/99 Leased equipment
Secretary of State, Ohio US Bank Trust AP0217222 2/29/00 Leased equipment
Secretary of State, Ohio IBM Credit Corp. AP0222347 3/20/00 Leased equipment
▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 8/15/94 Blanket
Secretary of State, Ohio Minnesota Mining & Mfg AL44935 11/28/94 Inventory
Secretary of State, Ohio Citicorp AP280153 9/12/00 All accounts
Secretary of State, Ohio Citicorp AP284296 9/27/00 Equipment
Secretary of State, Ohio CIT Communications Finance Corporation AP304325 12/27/00 Leased equipment
Secretary of State, Ohio Comdisco, Inc. AP317257 1/25/01 Leased equipment
Secretary of State, Ohio GFC Leasing AP316504 2/06/01 Leased equipment
Secretary of State, Ohio CIT Communications Finance Corporation AP316016 3/05/01 Leased equipment
Secretary of State, Ohio Safeco Credit Co. Inc AP319100 3/14/01 Lease
Secretary of State, Ohio Comdisco, Inc. AP328526 4/17/01 Lease
Secretary of State, Ohio Comdisco, Inc. AP328533 4/17/01 Leased equipment
Secretary of State, Ohio LINC Quantum Analytics AP340867 5/30/01 Equipment
Secretary of State, Ohio NMHG Financial Services Inc. OH00036157912 7/19/01 Equipment
Secretary of State, Ohio ▇▇▇▇▇▇▇ Financial Services OH00037860712 8/27/01 Equipment
Secretary of State, Ohio ▇▇▇▇ Corporation OH00039806285 10/12/01 Equipment
Secretary of State, Ohio CISCO Systems Capital Corporation OH00039906742 10/15/01 Equipment
Secretary of State, Ohio ▇▇▇▇▇▇▇ Standard Distributing Co. OH00042190738 12/03/01 Inventory
Secretary of State, Ohio BASF Corporation OH00042647474 12/13/01 Inventory-consignment
Secretary of State, Ohio CIBA Specialty Chemicals Corporation OH00043096355 12/24/01 Inventory
Secretary of State, Ohio Crown Credit Company OH00044256124 1/22/02 Equipment
Secretary of State, Ohio Crown Credit Company OH00044256457 1/22/02 Equipment
Secretary of State, Ohio ▇▇▇▇▇▇▇ Financial Services OH00044522301 1/28/02 Equipment
Secretary of State, Ohio Worldcom Communications, Inc. OH00045792636 2/28/02 Equipment
Secretary of State, Ohio ICX Corporation OH00046609165 3/18/02 Equipment
10
Secretary of State, Ohio Comdisco, Inc. OH00046635716 3/19/02 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00046636273 3/19/02 Leased equipment
Secretary of State, Ohio ▇▇▇▇▇▇▇ Financial Services OH00046725373 3/20/02 Leased equipment
Secretary of State, Ohio ▇▇▇▇▇▇ Leasing Corp. OH00047629421 4/09/02 Leased equipment
Secretary of State, Ohio CIT Communications Finance Corporation OH00048194732 4/22/02 Leased equipment
Secretary of State, Ohio Citicorp North America OH00048307026 4/23/02 All accounts
Secretary of State, Ohio Citicorp North America OH00048359540 4/24/02
Secretary of State, Ohio Toyota Motor Credit Corporation OH00048716285 5/02/02 Equipment
Secretary of State, Ohio State Street Bank and Trust OH00049499941 5/17/02 Blanket
Company, N.A. and
▇▇▇▇▇▇▇▇ ▇▇▇▇
Secretary of State, Ohio ▇▇ ▇▇▇▇▇▇▇▇▇▇ Company OH00051263300 6/28/02 Equipment
Secretary of State, Ohio Crown Credit Company OH00051500455 7/05/02 Equipment
Secretary of State, Ohio Bayer Corporation OH00051752337 7/10/02 Consignment inventory
Secretary of State, Ohio Bayer Polymers LLC 20030800302
Secretary of State, Ohio Hewlett-Packard Financial Services OH00052279051 7/24/02 Equipment
Company
Secretary of State, Ohio NMHG Financial Services Inc. OH00053737509 8/30/02 Leased equipment
Secretary of State, Ohio De ▇▇▇▇ ▇▇▇▇▇▇ Financial Services, OH00053819179 9/03/02 Equipment
Inc.
Secretary of State, Ohio ICX Corporation OH00056932273 11/20/02 Leased equipment
Secretary of State, Ohio Citicorp Del Lease, Inc. OH00058302199 12/26/02 Equipment
Secretary of State, Ohio Comdisco, Inc. OH00059308273 1/22/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059308384 1/22/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059308495 1/22/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059308617 1/22/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059308728 1/22/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059308839 1/22/03 Leased equipment
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇ Comdisco, Inc. OH00059308940 1/22/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059309063 1/22/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059309285 1/22/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059310319 1/22/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059312111 1/22/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059312333 1/22/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059312444 1/22/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059312555 1/22/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059331343 1/23/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059331565 1/23/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059331676 1/23/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059331787 1/23/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059331898 1/23/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059332022 1/23/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059332466 1/23/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059332688 1/23/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059332799 1/23/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059333145 1/23/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059694927 2/04/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059704728 2/04/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059704940 2/04/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059705174 2/04/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059705396 2/04/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059705518 2/04/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059705730 2/04/03 Leased equipment
Secretary of State, Ohio Comdisco, Inc. OH00059705841 2/04/03 Leased equipment
Secretary of State, Ohio Sun Chemical Company OH00059935676 2/10/03 Consignment Inventory
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇ Toyota Motor Credit Company OH00060401012 2/24/03 Equipment
Secretary of State, Ohio ▇▇▇▇▇▇ Finance Corporation OH00060687309 3/5/03 Leased equipment
Secretary of State, Ohio Crompton Corporation OH00060883274 3/10/03 Consignment inventory
Secretary of State, Ohio GFC Leasing OH000614285564 Equipment
Secretary of State, Ohio Ferro Corporation OH00061565362 3/27/03 Consignment inventory
Secretary of State, Ohio Citicorp Del Lease, Inc. OH00062065656 4/08/03 Equipment
Secretary of State, Ohio General Electric Capital Corporation AP0014808 1/06/98 Lease
Secretary of State, Ohio Minnesota Mining & Mfg. 3M AL44935 11/28/94 Consignment inventory
Receivables Management
Secretary of State, Ohio Danka Financial Services AP0073186 7/31/98 Equipment
Secretary of State, Ohio The CIT Group/ Equipment
Financing, Inc. AP0088569 9/29/98 Equipment
Secretary of State, Ohio The CIT Group/ Equipment AP0098109 11/14/98 Equipment
Financing, Inc.
Secretary of State, Ohio Inter-Tel Leasing Inc. ▇▇▇▇▇▇▇▇▇ 6/07/99 Lease
Secretary of State, Ohio NewCourt Communications Finance AP0214066 2/15/00 Lease
Corporation
Secretary of State, Ohio ICX Corporation AP0259669 8/03/00 Lease
Secretary of State, Ohio ICX Corporation AP314254 12/22/00 Lease
Secretary of State, Ohio CitiCorp AL21925 8/15/94 All Accounts
Secretary of State, Ohio Yale Financial Services, Inc. AN19409 11/19/96 Lease
Secretary of State, Ohio IBM Credit Corporation AP0072841 8/07/98 Lease
Secretary of State, Ohio CitiCorp AP0077086 8/17/98 All Accounts
Secretary of State, Ohio KeyCorp Leasing AP0077677 8/19/98 Lease
Secretary of State, Ohio AT&T Credit Corporation AP0080076 9/02/98 Lease
Secretary of State, Ohio Safeco Credit Co. Inc. ▇▇▇▇▇▇▇▇▇ 10/21/98 Lease
Secretary of State, Ohio IBM Credit Corporation AP0100171 11/23/98 Lease
Secretary of State, Ohio IBM Credit Corporation AP0112853 1/04/99 Lease
Secretary of State, Ohio IBM Credit Corporation ▇▇▇▇▇▇▇▇▇ 5/24/99 Lease
13
Secretary of State, Ohio IBM Credit Corporation AP0153269 6/16/99 Lease
Secretary of State, Ohio IBM Credit Corporation AP0176263 9/09/99 Lease
Secretary of State, Ohio IBM Credit Corporation AP0180968 9/20/99 Lease
Secretary of State, Ohio IBM Credit Corporation ▇▇▇▇▇▇▇▇▇ 10/22/99 Lease
Secretary of State, Ohio IBM Credit Corporation AP0191197 10/27/99 Lease
Secretary of State, Ohio IBM Credit Corporation AP0195162 11/12/99 Lease
Secretary of State, Ohio IBM Credit Corporation AP0196196 11/12/99 Lease
Secretary of State, Ohio NewCourt Communications AP0197242 12/01/99 Lease
Finance Corporation
Secretary of State, Ohio IBM Credit Corporation AP0197921 12/01/99 Lease
Secretary of State, Ohio Bank of America Illinois AP0217222 2/29/00 Lease
Secretary of State, Ohio IBM Credit Corporation AP0222347 3/20/00 Lease
Secretary of State, Ohio NewCourt Communications ▇▇▇▇▇▇▇▇▇ 8/03/00 Lease
Finance Corporation
Secretary of State, Ohio NewCourt Communications AP280998 8/31/00 Lease
Finance Corporation
Secretary of State, Texas Arrowhead Industrial Water, Inc. 94-051890 3/21/94 Leased equipment
Secretary of State, Texas Arrowhead Industrial Water, Inc. 98-750113 12/10/98 Leased equipment
Secretary of State, Texas IBM Credit Corp. 96-131342 7/3/96 Leased equipment
Secretary of State, Texas Caterpillar Financial Services Corp. 97-005427 1/14/97 Leased equipment
Secretary of State, Texas Associates Leasing, Inc. 97-141643 7/7/97 Leased equipment
Secretary of State, Texas AT&T Credit Corp. 97-172691 8/20/97 Leased equipment
Secretary of State, Texas AT&T Credit Corp. 97-246966 12/5/97 Leased equipment
State Corp. Com., VA Unisys Corp. 920592 1457 5/18/92 Leased equipment
State Corp. Com., VA Unisys Corp. 970213 7182 2/13/97 Leased equipment
State Corp. Com., VA Unisys Corp. 980224 7149 2/24/98 Leased equipment
14
Tennessee General Electric Capital Corporation 981-500049 Lease
Texas PHH Vehicle Management Services 98-137367 Lease
Corporation/▇.▇. ▇▇▇▇▇▇▇▇ Trust
Vigo County Indiana AT&T Credit Corp. 193729 4/3/96 Leased equipment
Vigo County Indiana AT&T Credit Corp. 194701 9/5/96 Leased equipment
Wisconsin CitiCorp 01855397 6/17/99 All Accounts
Wood County Ohio Plast-O-Meric, Inc. 97-954 6/9/97 Leased equipment
15
SCHEDULE 5.02(d)
ASSET SALES
The following are excluded from the limitations of Section 5.02(b) of the
Agreement:
1. The assets of Borrower's Elastomers and Performance Additives business.
2. The assets of Borrower's Engineered Films business, including the capital
stock interest of the Borrower in PolyOne Engineered Films, Inc.
3. The assets of Borrower's Specialty Resins business.
SCHEDULE 5.02(i)
EXISTING FOREIGN SUBSIDIARY DEBT
POLYONE CORPORATION - CONSOLIDATED
TOTAL DEBT OUTSTANDING
POLYONE USA CORPORATE
SUBSIDIARY
Tekno Polimer Group 1,154,418
CORPORATE
Citibank revolver 35,000,000
-----------
SHORT TERM BORROWING 36,154,418
SUBSIDIARY
Polibasa 7,558,250
▇▇▇▇▇▇▇▇ 367,470
Star Color 10,238
Formulators Group - Acrol GB (2)
Lincoln & Southern Railroad 51,699
PolyOne Canada 1,022,798
-----------
SUBTOTAL SUBSIDIARY 9,010,453
CORPORATE
Bank One debenture 75,000,000
Bank One debenture - deriviative fair value adjustment --
Bank One debenture swap unamortized 3,389,514
78,389,514
Bank One debenture 50,000,000
9-3/8% senior note 87,775,000
9-3/8% senior note - derivative fair value adjustment --
9-3/8% senior note swap unamortized 865,385
debt discount at merger unamortized 613,100
89,253,485
8.875% senior note 200,000,000
8.875% senior note discount unamortized (1,626,890)
198,373,110
medium term notes 160,000,000
Medium term notes - derivative fair value adjustment --
Medium term notes swap unamortized 3,037,023
Debt discount at merger unamortized (7,320,053)
155,716,970
Colombian loan 11,257,288
FX adjustment (2,686,283)
8,571,005
Capital lease obligations 150,252
Other --
-----------
LONG TERM DEBT 589,464,789
-----------
TOTAL DEBT 625,619,207
===========
2
SCHEDULE 8.13
RELEASED COLLATERAL
INITIAL PLEDGED SHARES- Certificates delivered under Security Agreement dated
January 25, 2002 of:
-PolyOne Distribution Company (▇▇▇▇▇ Plastics Company)
-PolyOne Engineered, Films, Inc.
-Lincoln & Southern Railroad Company
-▇▇▇▇▇▇ Rubber Company
-Polymer Diagnostics, Inc.
RECEIVABLES AND RELATED CONTRACTS
ACCOUNT COLLATERAL
MORTGAGED PROPERTIES- Mortgages delivered as to the following properties will be
released:
-Burton, OH
-Kennedale, TX
-DeForest, WI
-▇▇▇▇▇, AR
-▇▇▇▇▇, IL
-Pedricktown, NJ
-Dyersburg, TN
-Jonesboro, TN
-Winchester, VA
EQUIPMENT- Equipment located at the following properties will be released:
-Burton, OH
-Kennedale, TX
-DeForest, WI
-▇▇▇▇▇, AR
-▇▇▇▇▇, IL
-Pedricktown, NJ
-Dyersburg, TN
-Jonesboro, TN
-Winchester, VA
INTELLECTUAL PROPERTY-
PATENTS AND APPLICATIONS RELEASED FROM SECURITY INTEREST
APPLICATION
▇▇▇. NO. ISSUE DATE SERIAL NO. DATE TITLE OF PATENT
-------- ---------- ---------- ----------- ---------------
5,496,684 3/5/1996 08/122,400 9/17/1993 PHOTOSENSITIVE COMPOSITIONS AND ELEMENTS FOR
FLEXOGRAPHIC PRINTING
5,496,685 3/5/1996 08/122,682 9/17/1993 PHOTOSENSITIVE COMPOSITIONS AND ELEMENTS FOR
FLEXOGRAPHIC PRINTING
5,676,461 10/14/1997 08/617,361 3/18/1996 OIL INJECTION APPARATUS AND METHOD FOR POLYMER
PROCESSING
5,851,731 12/22/1998 08/707,862 9/9/1996 COMPOSITION FOR THE MANUFACTURE OF FLEXOGRAPHIC
PRINTING PLATES
5,865,535 2/2/1999 08/965,307 11/6/1997 DYNAMIC MIXER CONTROL IN PLASTICS AND RUBBER
PROCESSING
3
5,974,167 10/26/1999 08/887,913 6/30/1997 SYSTEM AND METHOD FOR MEASURING AND CONTROLLING THE
QUALITY OF DISPERSION OF FILLER PARTICLES IN RUBBER
COMPOUNDS
6,017,679 1/25/2000 09/150,889 9/10/1998 COMPOSITION FOR THE MANUFACTURE OF FLEXOGRAPHIC
PRINTING PLATES
09/975,534 10/11/2001 MOLDING COMPOSITION FOR THE TRANSFER OF
MICRO-STRUCTURED SURFACES.
09/975,700 10/11/2001 VACUUM FORMED THERMOPLASTIC FILMS AND ARTICLES
THEREFROM
10/100,830 3/18/2002 PROCESS FOR PRODUCING A MULTI-COLORED COVERSTOCK
60/431,308 12/6/2002 LINER WITH DIFFERENT IMPRESSMENTS AT OPPOSING
SURFACES
4
MARKS RELEASED FROM SECURITY INTEREST
▇▇▇▇ APPLN. DATE APPLN. NO. REG. NO. REG. DATE
---- ----------- ---------- -------- ---------
ACCU-WAY 21-Mar-90 1673872 28-Jan-92
ADAPHAX 18-Jul-69 894862 21-Jul-70
ADVANCE 22-Nov-95 2015482 12-Nov-96
AMBEREX 10-Aug-62 755774 3-Sep-63
AUTOGUARD OEM 22-Mar-00 76008362 2698214 18-Mar-03
AUTOMASK 22-Mar-00 76008361
B and DESIGN 10-Jul-72 971697 30-Oct-73
BUR-A-▇▇▇ 2-Dec-81 1242470 21-Jun-83
CASTILLIAN 18-Nov-99 2390002 26-Sep-00
CHASE IMAGE 10-Sep-96 2125186 30-Dec-97
CHASE WAVE 10-Sep-96 2226542 23-Feb-99
COLONIAL (Stylized) 3-Nov-77 1132000 1-Apr-80
COPY DEFENDER 4-Apr-00 2519478 18-Dec-01
CREATING THE RIGHT MIX 4-Mar-96 2052381 15-Apr-97
CSW 13-Jun-89 1624843 27-Nov-90
DESICAL 11-Oct-66 846885 2-Apr-68
Design of Pilgrim's Head 3-Nov-77 1110723 9-Jan-79
DLP 29-Apr-02 76402342
FACTICE (Stylized) 18-Aug-34 321475 5-Feb-35
FACTICE (Stylized) 28-Jan-55 642757 19-Mar-57
FLEXCLEAR 1-Mar-90 1622516 13-Nov-90
GRID-PAK 17-Oct-79 1159976 7-Jul-81
H2OKAY! 22-Jan-88 1569699 5-Dec-89
▇▇▇▇▇ IMAGE ANALYSIS 20-Nov-97 2303370 28-Dec-99
HYDRO FLOW 5-Aug-02 76437637
LUBREX 24-Jan-68 861263 ▇-▇▇▇-▇▇
▇▇▇ ▇▇-▇▇▇-▇▇ 1015583 15-Jul-75
MELOS 28-Sep-00 2492500 ▇▇-▇▇▇-▇▇
▇▇▇▇▇-▇▇▇▇▇ ▇-▇▇▇-▇▇ ▇▇▇▇▇▇▇ 21-Apr-92
NEOPHAX 9-Apr-56 659638 25-Mar-58
▇▇▇▇▇▇▇▇▇ 25-Mar-91 1723596 13-Oct-92
P.O.A. 23-Mar-01 76229582
POLYBOUND 29-Sep-94 2044293 11-Mar-97
POLYMER DIAGNOSTICS & DESIGN 16-Feb-98 2313072 1-Feb-00
POLYTRON 14-Dec-92 1866372 6-Dec-94
PROFLEX 27-Apr-01 76247357
REGALITE 28-Jul-97 2220182 26-Jan-99
REGALTECH 20-Jul-89 1622502 13-Nov-90
ROLL-A-GLASS 19-Jun-75 1056068 11-Jan-77
S'OFFICE 14-Jun-89 1595364 8-May-90
▇▇▇▇-MAG 19-Mar-62 748034 16-Apr-63
▇▇▇▇-TONE (Stylized) 7-Dec-46 511127 21-Jun-49
ULTRALITE 8-Feb-79 1386714 18-Mar-86
ULTRALITE 15-Jun-98 2323216 28-Feb-00
ULTRASHIELD 22-Sep-92 1861385 1-Nov-94
ULTRASHIELD 3-Jun-98 2363698 4-Jul-00
ULTRASHIELD AND DESIGN 23-Jan-98 2290539 2-Nov-99
VELVET CRUSH 23-Mar-01 76232851
5
MARKS RELEASED FROM SECURITY INTEREST
▇▇▇▇ APPLN. DATE APPLN. NO. REG. NO. REG. DATE
---- ----------- ---------- -------- ---------
VISIONS 29-Dec-98 2387091 19-Sep-00
VVO 4-Jan-94 1978733 4-Jun-96
WAVE 10-Sep-96 2226541 23-Feb-99
6
EXHIBIT A - FORM OF
PROMISSORY NOTE
U.S.$_______________ Dated: _______________, 200_
FOR VALUE RECEIVED, the undersigned, POLYONE CORPORATION, an Ohio
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
_________________________ (the "Lender") for the account of its Applicable
Lending Office on the Termination Date (each as defined in the Credit Agreement
referred to below) the principal sum of U.S.$[amount of the Lender's Revolving
Credit Commitment in figures] or, if less, the aggregate principal amount of the
Advances made by the Lender to the Borrower pursuant to the Amended and Restated
Credit Agreement dated as of May 6, 2003 among the Borrower, the Lender and
certain other lenders parties thereto, and Citicorp USA, Inc. as Agent for the
Lender and such other lenders (as amended or modified from time to time, the
"Credit Agreement"; the terms defined therein being used herein as therein
defined) outstanding on the Termination Date.
The Borrower promises to pay interest on the unpaid principal amount
of each Advance from the date of such Advance until such principal amount is
paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
Both principal and interest in respect of each Advance are payable
in lawful money of the United States of America to the Agent at its account
maintained at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in same day funds.
Each Advance owing to the Lender by the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded by the Lender and, prior to any transfer hereof, endorsed on the grid
attached hereto which is part of this Promissory Note.
This Promissory Note is one of the Notes referred to in, and is
entitled to the benefits of, the Credit Agreement. The Credit Agreement, among
other things, (i) provides for the making of Advances by the Lender to the
Borrower from time to time in an aggregate amount not to exceed at any time
outstanding the U.S. dollar amount first above mentioned, the indebtedness of
the Borrower resulting from each such Advance being evidenced by this Promissory
Note and (ii) contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events and also for prepayments on account of
principal hereof prior to the maturity hereof upon the terms and conditions
therein specified. The obligations of the Borrower under this Promissory Note
and the Credit Agreement are secured by collateral as provided therein.
POLYONE CORPORATION
By_______________________
Title:
ADVANCES AND PAYMENTS OF PRINCIPAL
AMOUNT OF
AMOUNT OF PRINCIPAL PAID UNPAID PRINCIPAL NOTATION
DATE ADVANCE OR PREPAID BALANCE MADE BY
2
EXHIBIT B - FORM OF NOTICE OF
BORROWING
Citicorp USA, Inc., as Agent
for the Lenders parties
to the Credit Agreement
referred to below
▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[Date]
Attention: Bank Loan Syndications Department
Ladies and Gentlemen:
The undersigned, PolyOne Corporation, refers to the Amended and
Restated Credit Agreement, dated as of May 6, 2003 (as amended or modified from
time to time, the "Credit Agreement", the terms defined therein being used
herein as therein defined), among the undersigned, certain Lenders parties
thereto and Citicorp USA, Inc., as Agent for said Lenders, and hereby gives you
notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that the
undersigned hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is _______________,
200_.
(ii) The Type of Advances comprising the Proposed Borrowing is [Base
Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is
$_______________].
[(iv) The initial Interest Period for each Eurodollar Rate Advance
made as part of the Proposed Borrowing is _____ month[s].]
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the Loan
Documents are correct, before and after giving effect to the Proposed
Borrowing and to the application of the proceeds therefrom, as though made
on and as of such date;
(B) no event has occurred and is continuing, or would result from
such Proposed Borrowing or from the application of the proceeds therefrom,
that constitutes a Default; and
(C) the Indenture Limit exceeds the aggregate principal amount of
the Advances plus the aggregate Available Amount of all Letters of Credit
to be outstanding after giving effect to such Proposed Borrowing, as
evidenced by the calculations set forth on Annex I hereto.
Very truly yours,
POLYONE CORPORATION
By_________________________
Title:
ANNEX I
2002 2003
POLYONE POLYONE
INDENTURE AMOUNT % GEON INDENTURE ▇▇▇▇▇ 9 3/8 INDENTURE ▇▇▇▇▇ MTNS INDENTURE
--------- ------ --- -------------- --------------------- ---------- ---------
Consolidated Tangible Assets 5%
Consolidated Net Tangible Assets 10%
Consolidated Shareholders Equity 10%
Consolidated Net Tangible Assets 10% _____________ ___________________ ____________ _________
MAXIMUM LIMIT X .95
Less - Secured Debt
(other than under Revolving Credit Agreement)
Availability under Basket - subtotal _____________ ___________________ ____________ _________
Exceptions:
Availability under Basket _____________ ___________________ ____________ _________
Advances plus Available Amount of Letters of Credit to be outstanding after giving effect to Proposed Borrowing _________
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Credit Agreement dated
as of May 6, 2003 (as amended or modified from time to time, the "Credit
Agreement") among PolyOne Corporation, an Ohio corporation (the "Borrower"), the
Lenders (as defined in the Credit Agreement) and Citicorp USA, Inc., as agent
for the Lenders (the "Agent"). Terms defined in the Credit Agreement are used
herein with the same meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 hereto
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor's rights and obligations under the Credit Agreement as of the date
hereof equal to the percentage interest specified on Schedule 1 hereto of all
outstanding rights and obligations under the Credit Agreement together with
participations in Letters of Credit held by the Assignor on the date hereof.
After giving effect to such sale and assignment, the Assignee's Commitment and
the amount of the Advances owing to the Assignee will be as set forth on
Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, the Credit
Agreement or any other instrument or document furnished pursuant thereto; (iii)
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrower or the performance or observance by
the Borrower of any of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto; and (iv) attaches the Note[,
if any,] held by the Assignor [and requests that the Agent exchange such Note
for a new Note payable to the order of [the Assignee in an amount equal to the
Revolving Credit Commitment assumed by the Assignee pursuant hereto or new Notes
payable to the order of the Assignee in an amount equal to the Revolving Credit
Commitment assumed by the Assignee pursuant hereto and] the Assignor in an
amount equal to the Revolving Credit Commitment retained by the Assignor under
the Credit Agreement[, respectively,] as specified on Schedule 1 hereto].
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 4.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers and discretion under the Credit Agreement as are
delegated to the Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (v) agrees that it will perform
in accordance with their terms all of the obligations that by the terms of the
Credit Agreement are required to be performed by it as a Lender; and (vi)
attaches any U.S. Internal Revenue Service forms required under Section 2.14 of
the Credit Agreement.
4. Following the execution of this Assignment and Acceptance, it
will be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Effective Date") shall
be the date of acceptance hereof by the Agent, unless otherwise specified on
Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after
the Effective Date, the Agent shall make all payments under the Credit Agreement
and the Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and fees
with respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Notes for
periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused
Schedule 1 to this Assignment and Acceptance to be executed by their officers
thereunto duly authorized as of the date specified thereon.
2
Schedule 1
to
Assignment and Acceptance
Percentage interest assigned: _____%
Assignee's Revolving Credit Commitment: $______
Aggregate outstanding principal amount of Advances assigned: $______
Principal amount of Note payable to Assignee: $______
Principal amount of Note payable to Assignor: $______
Effective Date*: _______________, 200_
[NAME OF ASSIGNOR], as Assignor
By_____________________________
Title:
Dated: _______________, 200_
[NAME OF ASSIGNEE], as Assignee
By
Title:
Dated: _______________, 200_
Domestic Lending Office:
[Address]
Eurodollar Lending Office:
[Address]
----------
* This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Agent.
3
Accepted and Approved this
__________ day of _______________, 200_
CITICORP USA, INC., as Agent
By_____________________________________
Title:
Approved this __________ day
of _______________, 200_
POLYONE CORPORATION
By_____________________________________
Title:
4
EXHIBIT F-1- FORM OF
OPINION OF COUNSEL
FOR THE BORROWER
[Effective Date]
May 6, 2003
To each of the Lenders parties
to the Amended and Restated Credit Agreement
dated as of May 6, 2003
among PolyOne Corporation,
said Lenders and Citicorp USA, Inc.,
as Agent for said Lenders
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 3.01(h)(iv) of
the Amended and Restated Credit Agreement, dated as of May 6, 2003 (the "Credit
Agreement"), among PolyOne Corporation (the "Borrower"), the Lenders parties
thereto and Citicorp USA, Inc., as Agent for said Lenders. Terms defined in such
Credit Agreement are used herein as therein defined.
We have acted as counsel for the Borrower in connection with the
preparation, execution and delivery of the Credit Agreement.
In that connection, we have examined:
1. The Credit Agreement.
2. The documents furnished by the Borrower pursuant to Article III of the
Credit Agreement, including the Security Agreement.
3. The Articles of Incorporation of the Borrower and all amendments
thereto (the "Charter").
4. The Regulations of the Borrower and all amendments thereto (the
"By-laws").
5. A certificate of the Secretary of State of Ohio, dated April 21, 2003,
attesting to the continued corporate existence and good standing of the
Borrower in that State.
In addition, we have examined the originals, or copies certified to our
satisfaction, of such other corporate records of the Borrower, certificates of
public officials and of officers for the Borrower, and agreements, instruments
and other documents as we have deemed necessary as a basis for the opinions
expressed below. We
have assumed the due execution and delivery, pursuant to due authorization, of
the Credit Agreement by the Initial Lenders and the Agent.
Our opinions expressed below are limited to the law of the State of Ohio and the
Federal law of the United States.
Based upon the foregoing and upon such investigation as we have
deemed necessary, we are of the following opinion:
1. The Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the State of Ohio.
2. The execution, delivery and performance by the Borrower of the Credit
Agreement and the Notes, and the consummation of the transactions
contemplated thereby, are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, and do not
contravene (i) the Charter or the By-laws, or (ii) any law, rule or
regulation applicable to the Borrower (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System) or
(iii) any contractual or legal restriction applicable to the Borrower. The
Credit Agreement and the Notes have been duly executed and delivered on
behalf of the Borrower.
3. No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other
third party is required for the due execution, delivery and performance by
the Borrower of the Credit Agreement and the Notes.
4. To the best of our knowledge, there are no pending or overtly
threatened actions or proceedings against the Borrower or any of its
Subsidiaries before any court, governmental agency or arbitrator that
purport to affect the legality, validity, binding effect or enforceability
of the Credit Agreement or the consummation of the transactions
contemplated thereby or that, except as described in Schedule 3.01(b) to
the Credit Agreement, are likely to have a materially adverse effect upon
the financial condition or operations of the Borrower or any of its
Subsidiaries.
5. In any action or proceeding arising out of or relating to the Credit
Agreement in any court of the State of Ohio or in any Federal court
sitting in the State of Ohio, such court would recognize and give effect
to the provisions of Section 8.09 of the Credit Agreement wherein the
parties thereto agree that the Credit Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York. Without
limiting the generality of the foregoing, a court of the State of Ohio or
a federal court sitting in the State of Ohio would apply the usury law of
the State of New York, and would not apply the usury law of the State of
Ohio, to the Credit Agreement and the Notes. However, if a court of the
State of Ohio or a Federal court sitting in the State of Ohio were to hold
that the Credit Agreement and the Notes are governed by, and to be
construed in accordance with, the laws of the State of Ohio, the Credit
Agreement and the Notes would be, under the laws of the State of Ohio, the
legal, valid and binding obligation of the Borrower enforceable against
the Borrower in accordance with their respective terms.
6. The Security Agreement creates in favor of the Collateral Trustees for
the benefit of the Secured Parties, as security for the payment of the
Secured Obligations as defined therein, a security interest in the
Collateral described therein in which a security interest may be created
under Article 9 of the UCC as enacted in the State of Ohio. Perfection of
the security interest in the Collateral, other than the Patents and
Trademarks, shall occur upon the recordation of UCC-1 financing statements
pursuant to Article 9 of the UCC as enacted in the State of Ohio.
The opinions set forth above are subject to the following qualifications:
(a) Our opinion in the last sentence of paragraph 5 above as to
enforceability is subject to the effect of any applicable bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
creditors' rights generally.
(b) Our opinion in the last sentence of paragraph 5 above as to
enforceability is subject to the effect of general principles of equity,
including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing (regardless of whether considered in a
proceeding in equity or at law).
(c) We express no opinion as to (i) Section 2.14 of the Credit
Agreement insofar as it provides that any Lender purchasing a
participation from another Lender pursuant thereto may exercise set-off or
other similar rights with respect to such participation and (ii) the
effect of the law of any jurisdiction other than the State of Ohio wherein
any Lender may be located or wherein enforcement of the Credit Agreement
or the Notes may be sought that limits the rates of interest legally
chargeable or collectible.
Very truly yours,.
EXHIBIT F
ESCROW AGREEMENT
BETWEEN
POLYONE CORPORATION
AND
CITIBANK, N.A.
DATED AS OF MAY __, 2003
ESCROW AGREEMENT
ESCROW AGREEMENT made this day of May, 2003 (the "Agreement") by and
between CITIBANK, N.A., a national banking institution incorporated under the
laws of the United States of America (the "Escrow Agent"), and POLYONE
CORPORATION, an Ohio corporation (the "Depositor").
WHEREAS, this Agreement is being entered into in connection with the
Purchase Agreement, dated April 30, 2003, among the Depositor and the Initial
Purchasers (as defined below), pursuant to which, among other things, the
Depositor is issuing and selling to Citigroup Global Markets Inc., McDonald
Investments Inc., NatCity Investments, Inc. and SBK Investment Corp., on the
date hereof, $300,000,000 aggregate principal amount of the Depositor's 10 5/8%
Senior Notes due 2010 (the "Senior Notes");
WHEREAS, the Depositor intends to use a portion of the proceeds from the
offering of the Senior Notes to repay, from time to time, all of the Depositor's
outstanding 9.375% Senior Notes due 2003 (the "September Notes"), which mature
on September 15, 2003; and
WHEREAS, the Depositor and Escrow Agent have entered into this Agreement
in order to set forth the conditions upon which, and the manner in which, funds
will be disbursed from the Escrow Account (as defined below) so that the
Depositor may use such funds to repay the September Notes.
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, the Depositor appoints Citibank, N.A. as the escrow agent for
the Escrow Property (as defined below) and directs Citibank, N.A. as the escrow
agent to maintain the Escrow Account upon the terms and conditions set forth in
this Agreement. Citibank, N.A. hereby accepts such appointment as the escrow
agent for the Escrow Property and agrees to maintain the Escrow Account and to
act as the escrow agent for the Escrow Property, in each case in accordance with
and subject to the following Instructions and Terms and Conditions:
I. INSTRUCTIONS:
1. ESCROW PROPERTY
The property and/or funds deposited or to be deposited with Escrow Agent
by the Depositor shall be as follows:
Cash in the amount of $87,775,000.
The foregoing property and/or funds, plus all interest, dividends and
other distributions and payments thereon (collectively the
"Distributions") received by Escrow Agent, less any property and/or funds
distributed or paid in accordance with this Agreement, are collectively
referred to herein as "Escrow Property".
Escrow Agent shall establish an escrow account (the "Escrow Account") and
shall maintain the Escrow Property in the Escrow Account.
2. INVESTMENT OF ESCROW PROPERTY
Escrow Agent shall invest or reinvest Escrow Property, without distinction
between principal and income, in accordance with written instructions
delivered to Escrow Agent specifying any one or more of the following
investments from the Depositor designated herein. Initially, until
otherwise directed in writing the Escrow Property shall be invested in
[provide money market fund].
(1) Any U.S. Government or U.S. Government security;
(2) Any commercial paper rated A1/P1 or better having the best yield or
price available at the time the trade is executed. Be advised that due to
the potential conflict of interest, Escrow Agent will not purchase
Citigroup or any affiliate commercial paper (collectively "Citigroup
Paper") unless the Depositor specifically authorizes Escrow Agent, in
writing, that it is authorized to purchase Citigroup Paper. Authorization
for the purchase of Citigroup Paper must be given by the Depositor(s) on a
transaction by transaction basis;
(3) Money market funds having a rating in the highest investment category
granted thereby by a recognized credit rating agency at the time of
acquisition, including any fund for which Escrow Agent or an Affiliate of
Escrow Agent serves as an investment advisor, administrator, shareholder
servicing agent, custodian or sub-custodian, notwithstanding that (A)
Escrow Agent or an Affiliate of Escrow Agent charges and collects fees and
expenses from such funds for services rendered (provided that such
charges, fees and expenses are on terms consistent with terms negotiates
at arm's length) and (B) Escrow Agent charges and collects fees and
expenses for services rendered, pursuant to this Agreement.
Escrow Agent shall have no obligation to invest or reinvest
the Escrow Property if all or a portion of the Escrow Property is
deposited with Escrow Agent after 11:00 a.m. (E.S.T.) on the day of
deposit. Instructions to invest or reinvest that
are received after 11:00 a.m. (E.S.T.) will be treated as if received on
the following business day in New York.
Escrow Agent shall have the power to sell or liquidate the
foregoing investments whenever Escrow Agent shall be required to release
the Escrow Property pursuant to the terms hereof. Escrow Agent shall have
no responsibility for any investment losses resulting from the investment,
reinvestment or liquidation of the Escrow Property. Any interest or other
income received on such investment and reinvestment of the Escrow Property
shall become part of the Escrow Property.
If a selection is not made, the Escrow Property shall remain
uninvested with no liability for interest therein. It is agreed and
understood that Escrow Agent may earn fees associated with the investments
outlined above.
Any investment direction contained herein may be executed through an
affiliated broker dealer of Escrow Agent and shall be entitled to such
usual and customary fee. Neither Citigroup nor any of its affiliates
assume any duty or liability for monitoring the investment rating.
Escrow Agent shall have no liability for any loss arising from or related
to any such investment other than in accordance with paragraph 5 of the
Terms and Conditions.
3. WRITTEN INSTRUCTION
All instructions, approvals or certificates required under this Agreement
will be delivered to Escrow Agent in writing, in either original or
facsimile form, executed by an officer of the Depositor authorized to give
such instructions, approvals or certificates under this Agreement (an
"Authorized Person"). The identity of the Authorized Persons, as well as
their specimen signatures, will be delivered to Escrow Agent in the form
of an Incumbency Certificate in the form of Exhibit A attached hereto and
will remain in effect until the Depositor notifies Escrow Agent of any
change. In its capacity as Escrow Agent, Escrow Agent will accept all
instructions and documents complying with the above under the indemnities
provided in this Agreement, and reserves the right to refuse to accept any
instructions or documents which fail, or appear to fail, to comply.
Further to this procedure, Escrow Agent reserves the right to telephone an
Authorized Person to confirm the details of such instructions or documents
if they are not already on file with us as standing instructions. Escrow
Agent and the Depositor agree that the above constitutes a commercially
reasonable security procedure.
4. DISTRIBUTION OF ESCROW PROPERTY
Escrow Agent is directed to hold and distribute the Escrow Property in the
following manner:
Escrow Agent shall release all or any portion of the Escrow Property to
the Depositor as soon as practicable upon receipt by Escrow Agent of an
Officer's Certificate of the Depositor signed by an Authorized Person
substantially in the form of Exhibit B attached hereto (an "Officer's
Certificate"). If the Depositor requests that less than all of the Escrow
Property be released, than the Officer's Certificate relating to such
request shall indicate the amount of the Escrow Property to be released.
In the event that all or any portion of the Escrow Property has not been
released to the Depositor in accordance with the preceding paragraph by
5:00 p.m. (New York City time) on September 15, 2003, Escrow Agent shall,
as soon as practicable, release any and all remaining Escrow Property to
the Depositor.
Any release of the Escrow Property to the Depositor shall be made pursuant
to the bank wiring instructions provided in paragraph 5 of Part I below
unless otherwise instructed in writing by an Authorized Person.
5. ADDRESSES AND ACCOUNT INFORMATION
Notices, instructions and other communications shall be sent to Escrow
Agent, Citibank Agency & Trust, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, (telephone number: (▇▇▇) ▇▇▇-▇▇▇▇, facsimile number: (212)
657-2762 and to the Depositor as follows:
PolyOne Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Treasurer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
PolyOne Corporation
PolyOne Center
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▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Legal Officer
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Bank Wiring Instructions:
6. COMPENSATION
(a) At the time of execution of this Agreement, the Depositor shall pay
Escrow Agent a fee of $15,000.00. The Depositor agrees to reimburse
Escrow Agent for all reasonable expenses, disbursements and advances
incurred or made by Escrow Agent in performance of its duties
hereunder (including reasonable fees, expenses and disbursements of
its counsel). In addition, the Depositor shall pay Escrow Agent a
fee of $2,500.00 for each amendment to this Agreement. It is
understood that Escrow Agent's fees may be adjusted from time to
time to conform to its then current guidelines.
(b) The Depositor shall be responsible for and shall reimburse Escrow
Agent upon demand for all fees, expenses and disbursements incurred
or made by Escrow Agent in connection with this Agreement.
II. TERMS AND CONDITIONS
1. Escrow Property shall be held by Escrow Agent either directly or through
the Federal Reserve/Treasury Book-Entry System for United States and
federal agency securities (the "Book-Entry System"), The Depository Trust
Company, a clearing agency registered with the Securities and Exchange
Commission ("DTC"), or through any other clearing agency or similar
depository (a "Clearing Agency"). Escrow Agent shall have no
responsibility and shall not be liable for ascertaining or acting upon any
calls, conversions, exchange offers, tenders, interest rates changes, or
similar matters relating to securities held at DTC or with any Clearing
Agency unless Escrow Agent shall have received actual and timely notice of
the same, nor shall Escrow Agent have any responsibility or liability for
the actions or omissions to act of the Book-Entry System, DTC or any
Clearing Agency.
2. The duties, responsibilities and obligations of Escrow Agent shall be
limited to those expressly set forth herein and no duties,
responsibilities or obligations shall be inferred or implied. Escrow Agent
shall not be subject to, nor required to comply with, any other agreement
to which the Depositor is a party, even though reference thereto may be
made herein, or to comply with any direction or instruction (other than
those contained herein or delivered in accordance with this Agreement)
from the Depositor or an entity acting on its behalf. Escrow Agent shall
not be required to expend or risk any of its own funds or otherwise incur
any financial or other liability in the performance of any of its duties
hereunder.
3. This Agreement is for the exclusive benefit of the parties hereto and
their respective permitted successors hereunder, and shall not be deemed
to give, either express or implied, any legal or equitable right, remedy,
or claim to any other entity or person whatsoever except as provided in
paragraph 14 hereof with respect to the resignation of Escrow Agent
4. If at any time Escrow Agent is served with any judicial or administrative
order, judgment, decree, writ or other form of judicial or administrative
process which in any way affects the Escrow Property (including but not
limited to orders of attachment or garnishment or other forms of levies or
injunctions or stays relating to the transfer of the Escrow Property),
Escrow Agent is authorized to comply therewith in any manner it or legal
counsel of its own choosing deems appropriate; and if Escrow Agent
complies with any such judicial or administrative order, judgment, decree,
writ or other form of judicial or administrative process, Escrow Agent
shall not be liable to any of the parties hereto or to any other person or
entity even though such order, judgment, decree, writ or process may be
subsequently modified or vacated or otherwise determined to have been
without legal force or effect.
5. (a) Escrow Agent shall not be liable for any action taken or omitted or
for any loss or injury resulting from its actions or its performance or
lack of performance of its duties hereunder in the absence of gross
negligence or willful misconduct on its part. In no event shall Escrow
Agent be liable (i) for acting in accordance with or relying upon any
instruction, notice, demand, certificate or document from the Depositor or
any entity acting on behalf of the Depositor, (ii) for any indirect,
consequential, punitive or special damages, regardless of the form of
action and whether or not any such damages were foreseeable or
contemplated, (iii) for the acts or omissions of its nominees,
correspondents, designees, agents, subagents or subcustodians, (iv) for
the investment or reinvestment of any cash held by it hereunder, in each
case in good faith, in accordance with the terms hereof, including without
limitation any liability for any delays (not resulting from its gross
negligence or willful misconduct) in the investment or reinvestment of the
Escrow Property, or any loss of interest incident to any such delays, or
(v) for an amount in excess of the value of the Escrow Property, valued as
of the date of deposit, but only to the extent of direct money damages.
(b) If any fees, expenses or costs incurred by, or any obligations owed
to, Escrow Agent or its counsel hereunder are not promptly paid when due,
Escrow Agent may reimburse itself therefore from the Escrow Property and
may sell, convey or otherwise dispose of any Escrow Property for such
purpose. Escrow Agent may in its sole discretion withhold from any
distribution of Escrow Property an amount of Escrow Property it believes
would, upon sale or liquidation, produce proceeds equal to any unpaid
amounts to which Escrow Agent is entitled to hereunder.
(c) As security for the due and punctual performance of any and all of the
Depositor's obligations to Escrow Agent hereunder, now or hereafter
arising, the Depositor hereby pledges, assigns and grants to Escrow Agent
a continuing security interest in, and a lien on, the Escrow Property and
all Distributions thereon or additions thereto (whether such additions are
the result of deposits by the Depositor or the investment of Escrow
Property). The security interest of Escrow Agent shall at all times be
valid, perfected and enforceable by Escrow Agent against the Depositor and
all third parties in accordance with the terms of this Agreement.
(d) Escrow Agent may reasonably consult with legal counsel of its own
choosing at the expense of the Depositor as to any matter relating to this
Agreement, and Escrow Agent shall not incur any liability in acting in
good faith in accordance with any advice from such counsel.
(e) Escrow Agent shall not incur any liability for not performing any act
or fulfilling any duty, obligation or responsibility hereunder by reason
of any occurrence beyond the control of Escrow Agent (including but not
limited to any act or provision
of any present or future law or regulation or governmental authority, any
act of God or war, or the unavailability of the Federal Reserve Bank wire
or facsimile or other wire or communication facility).
(f) Escrow Agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, instrument or other writing delivered to it
hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity or the
service thereof. Escrow Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that any person
purporting to give receipt or advice to make any statement or execute any
document in connection with the provisions hereof has been duly authorized
to do so.
6. Unless otherwise specifically set forth herein, Escrow Agent shall proceed
as soon as practicable to collect any checks or other collection items at
any time deposited hereunder. Should Escrow Agent in its sole discretion
or otherwise credit Distributions before the same are finally collected,
such credits shall be provisional and may be reversed by Escrow Agent
without notice until such time as the same shall be finally collected. All
such collections shall be subject to Escrow Agent's usual collections
practices or terms regarding items received by Escrow Agent for deposit or
collection. Escrow Agent shall not be required, or have any duty, to
notify anyone of any payment or maturity under the terms of any instrument
deposited hereunder, nor to take any legal action to enforce payment of
any check, note or security deposited hereunder or to exercise any right
or privilege which may be afforded to the holder of any such security.
7. Escrow Agent shall provide to the Depositor monthly statements identifying
transactions, transfers or holdings of Escrow Property, and each such
statement shall be deemed to be correct and final upon receipt thereof by
the Depositor unless the Depositor notifies Escrow Agent in writing to the
contrary within thirty (30) business days of the date of such statement.
8. Escrow Agent shall not be responsible in any respect for the form,
execution, validity, value or genuineness of documents or securities
deposited hereunder, or for any description therein, or for the identity,
authority or rights of persons executing or delivering or purporting to
execute or deliver any such document, security or endorsement. Escrow
Agent shall not be called upon to advise any party as to the wisdom in
selling or retaining or taking or refraining from any action with respect
to any securities or other property deposited hereunder.
9. Escrow Agent shall not be under any duty to give the Escrowed Property
held by it hereunder any greater degree of care than it gives its own
similar property and shall
not be required to invest any funds held hereunder except as directed in
this Agreement. Uninvested funds held hereunder shall not earn or accrue
interest.
10. When Escrow Agent is instructed in writing to deliver securities against
payment, or to effect payment against delivery, delivery and receipt of
payment may not be completed simultaneously, and the Depositor agrees that
Escrow Agent shall incur no liability for any credit risk involved, and
that Escrow Agent may deliver and receive securities, and arrange for
payments to be made and received, in accordance with customs prevailing
from time to time among brokers or dealers in such securities.
11. At any time, Escrow Agent may request an instruction in writing in English
from the Depositor and may, at its own option, include in such request the
course of action it proposes to take and the date on which it proposes to
act, regarding any matter arising in connection with its duties and
obligations hereunder. Escrow Agent shall not be liable for acting in
accordance with such a proposal on or after the date specified therein,
provided that the specified date shall be at least one business day after
the Depositor receives Escrow Agent's request for instructions and its
proposed course of action, and provided further that, prior to so acting,
Escrow Agent has not received the written instructions requested.
12. Notices, instructions or other communications shall be in writing in
English and shall be given to the address set forth in the "Addresses"
provision herein (or to such other address as may be substituted therefore
by written notification to Escrow Agent or the Depositor). Notices to
Escrow Agent shall be deemed to have been given when actually received by
Escrow Administration (Global Agency Trust). Escrow Agent is authorized to
comply with and rely upon any notices, instructions or other
communications believed by it to have been sent or given by the Depositor
or by a person or persons authorized by the Depositor. Whenever under the
terms hereof the time for giving a notice or performing an act falls upon
a Saturday, Sunday, or a banking holiday in New York, such time shall be
extended to the next day on which Escrow Agent is open for business.
13. The Depositor shall be liable for and shall reimburse and indemnify Escrow
Agent (and any predecessor Escrow Agent) and hold Escrow Agent harmless
from and against any and all claims, losses, actions. liabilities, costs,
damages or expenses (including reasonable attorneys' fees and expenses)
(collectively "Losses") arising from or in connection with its
administration of this Agreement, provided, however, that nothing
contained herein shall require Escrow Agent to be indemnified for Losses
caused by its own gross negligence or own willful misconduct for which
Escrow Agent has assumed liability pursuant to preceding subparagraph (a)
of paragraph 5 hereof. In addition, when Escrow Agent acts on any
information, instructions, communications, (including, but not limited to,
communications with respect to the
delivery of securities or the wire transfer of funds) sent by telephone,
telex or facsimile, Escrow Agent, absent gross negligence, shall not be
responsible or liable in the event such communication is not an authorized
or authentic communication of the Depositor or is not in the form the
Depositor sent or intended to send (whether due to fraud, distortion or
otherwise). The Depositor shall indemnify Escrow Agent against any loss,
liability, claim or expense (including reasonable legal fees and expenses)
it may incur with its acting in accordance with any such communication.
This paragraph shall survive the termination of this Agreement or the
removal of Escrow Agent.
14. (a) The Depositor may remove Escrow Agent at any time by giving to Escrow
Agent thirty (30) calendar days' prior notice in writing signed by the
Depositor. Escrow Agent may resign at any time by giving the Depositor
thirty (30) calendar days' prior written notice thereof.
(b) Within ten (10) calendar days after giving the foregoing notice of
removal to Escrow Agent or receiving the foregoing notice of resignation
from Escrow Agent, the Depositor shall appoint a successor Escrow Agent.
If a successor Escrow Agent has not accepted such appointment by the end
of such 10-day period, Escrow Agent may, in its sole discretion, deliver
the Escrow Property to PolyOne Corporation at the address provided herein
or may apply to a court of competent jurisdiction for the appointment of a
successor Escrow Agent or for other appropriate relief. The costs and
expenses (including reasonable attorneys' fees and expenses) incurred by
Escrow Agent in connection with such proceeding shall be paid by the
Depositor. In the event of any such resignation or removal, Escrow Agent
shall have no further obligation with respect to Escrow Property.
(c) Upon receipt of the identity of the successor Escrow Agent, Escrow
Agent shall either deliver the Escrow Property then held hereunder to the
successor Escrow Agent, less Escrow Agent's fees, costs and expenses or
other obligations owed to Escrow Agent, or hold such Escrow Property (or
any portion thereof), pending distribution, until all such fees, costs and
conclusively expenses or other obligations are paid.
(d) Upon delivery of the Escrow Property to the success or Escrow Agent,
Escrow Agent shall have no further duties, responsibilities or obligations
hereunder.
15. (a) In the event of any ambiguity or uncertainty hereunder or in any
notice, instruction or other communication received by Escrow Agent
hereunder, Escrow Agent may, in its sole discretion, refrain from taking
any action other than retain possession of the Escrow Property, unless
Escrow Agent receives written instructions, signed by the Depositor, which
eliminates such ambiguity or uncertainty.
(b) In the event of any dispute between or conflicting claims among the
Depositor and/or any other person or entity with respect to any Escrow
Property, Escrow Agent shall be entitled, in its sole discretion, to
refuse to comply with any and all claims, demands or instructions with
respect to such Escrow Property so long as such dispute or conflict shall
continue, and Escrow Agent shall not be or become liable in any way to the
Depositor for failure or refusal to comply with such conflicting claims,
demands or instructions. Escrow Agent shall be entitled to refuse to act
until, in its sole discretion, either (i) such conflicting or adverse
claims or demands shall have been determined by a final order, judgment or
decree of a court of competent jurisdiction, which order, judgment or
decree is not subject to appeal, or settled by agreement between the
conflicting parties as evidenced in a writing satisfactory to Escrow Agent
or (ii) Escrow Agent shall have received security or an indemnity
satisfactory to it sufficient to hold it harmless from and against any and
all Losses which it may incur by reason of so acting. Any court order,
judgment or decree shall be accompanied by a legal opinion by counsel for
the presenting party, satisfactory to Escrow Agent, to the effect that
said order, judgment or decree represents a final adjudication of the
rights of the parties by a court of competent jurisdiction, and that the
time for appeal from such order, judgment or decree has expired without an
appeal having been perfected. Escrow Agent shall act on such court order
and legal opinions without further question. Escrow Agent may, in
addition, elect, in its sole discretion, to commence an interpleader
action or seek other judicial relief or orders as it may deem, in its sole
discretion, necessary. The costs and expenses (including reasonable
attorneys' fees and expenses) incurred in connection with such proceeding
shall be paid by the Depositor.
(c) Escrow Agent shall have no responsibility for the contents of any
writing of the arbitrators or any third party contemplated herein as a
means to resolve disputes and may conclusively rely without any liability
upon the contents thereof.
16. This Agreement shall be interpreted, construed, enforced and administered
in accordance with the internal substantive laws (and not the choice of
law rules) of the State of New York. The Depositor hereby submits to the
personal jurisdiction of, and agrees that all proceedings relating hereto
shall be brought in, courts located within the City and State of New York.
The Depositor hereby waives the right to trial by jury and to assert
counterclaims in any such proceedings. To the extent that in any
jurisdiction the Depositor may be entitled to claim, for itself or its
assets, immunity from suit, execution, attachment (whether before or after
judgment) or other legal process, each hereby irrevocably agrees not to
claim, and hereby waives, such immunity. The Depositor waives personal
service of process and consents to service of process by certified or
registered mail, return receipt requested, directed to it at the address
last specified for notices hereunder, and such service shall be deemed
completed ten (10) calendar days after the same is so mailed. Any court
order shall be accompanied by a legal opinion by counsel for the
presenting party satisfactory to Escrow Agent to the
effect that said opinion is final and non-appealable. Escrow Agent shall
act on such court order and legal opinions without further question.
17. Escrow Agent does not have any interest in the Escrowed Property deposited
hereunder but is serving as escrow holder only and having only possession
thereof. The Depositor shall pay or reimburse Escrow Agent upon request
for any transfer taxes or other taxes relating to the Escrowed Property
incurred in connection herewith and shall indemnify and hold harmless
Escrow Agent from any amounts that it is obligated to pay in the way of
such taxes. Any payments of income from this Escrow Account shall be
subject to withholding regulations then in force with respect to United
States taxes. The Depositor will provide Escrow Agent with appropriate W-9
forms for tax I.D., number certifications, or W-8 forms for non-resident
alien certifications. This paragraph shall survive notwithstanding any
termination of this Agreement or the resignation or removal of Escrow
Agent.
18. Except as otherwise permitted herein, this Agreement may be modified only
by a written amendment signed by all the parties hereto, and no waiver of
any provision hereof shall be effective unless expressed in a writing
signed by the party to be charged.
19. The rights and remedies conferred upon the parties hereto shall be
cumulative, and the exercise or waiver of any such right or remedy shall
not preclude or inhibit the exercise of any additional rights or remedies.
The waiver of any right or remedy hereunder shall not preclude the
subsequent exercise of such right or remedy.
20. The Depositor hereby represents and warrants (a) that this Agreement has
been duly authorized, executed and delivered on its behalf and constitutes
its legal, valid and binding obligation and (b) that the execution,
delivery and performance of this Agreement by the Depositor does not and
will not violate any applicable law or regulation.
21. Escrow Agent hereby represents and warrants (a) that this Agreement has
been duly authorized, executed and delivered on its behalf and constitutes
its legal, valid and binding obligation and (b) that the execution,
delivery and performance of this Agreement by Escrow Agent does not and
will not violate any applicable law or regulation.
22. The invalidity, illegality or unenforceability of any provision of this
Agreement shall in no way effect the validity, legality or enforceability
of any other provision; and if any provision is held to be enforceable as
a matter of law, the other provisions shall not be affected thereby and
shall remain in full force and effect.
23. This Agreement shall constitute the entire agreement of the parties with
respect to the subject matter and supersedes all prior oral or written
agreements in regard thereto.
24. This Agreement shall terminate upon the distribution of all Escrow
Property from the account established hereunder. The provisions of these
Terms and Conditions shall survive termination of this Agreement and/or
the resignation or removal of Escrow Agent.
25. No printed or other material in any language, including prospectuses,
notices, reports, and promotional material which mentions "Citibank, N.A."
by name or the rights, powers, or duties of Escrow Agent under this
Agreement shall be issued by any other parties hereto, or on such party's
behalf, without the prior written consent of Escrow Agent.
26. The headings contained in this Agreement are for convenience of reference
only and shall have no effect on the interpretation or operation hereof.
27. This Agreement may be executed by each of the parties hereto in any number
of counterparts, each of which counterpart, when so executed and
delivered, shall be deemed to be an original and all such counterparts
shall together constitute one and the same agreement.
28. No party may assign any of its rights or obligations under this Agreement
without the written consent of the other parties.
29. Any corporation into which Escrow Agent may be merged or converted or with
which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which Escrow Agent shall be a
party, or any corporation succeeding to the business of Escrow Agent shall
be the successor of Escrow Agent hereunder without the execution or filing
of any paper with any party hereto or any further act on the part of any
of the parties hereto except where an instrument of transfer or assignment
is required by law to effect such succession, anything herein to the
contrary notwithstanding.
IN WITNESS WHEREOF, each of the parties have caused this Agreement to be
executed by a duly authorized officer as of the day and year first written
above.
POLYONE CORPORATION
By:___________________________
Name:
Title:
CITIBANK, N.A.,
AS ESCROW AGENT
By:___________________________
Name:
Title:
EXHIBIT A
FORM OF INCUMBENCY CERTIFICATE
The undersigned hereby certifies that she/he is the [INSERT
TITLE] of PolyOne Corporation, an Ohio corporation (the "Company"), and as such
she/he is authorized to execute this Certificate and further certifies that the
following persons have been elected or appointed, are qualified, and are now
acting as officers of the Company in the capacity or capacities indicated below,
and that the signatures set forth opposite their respective names are their true
and genuine signatures. She/he further certifies that any of the persons listed
below [is/are] authorized [please choose one] [individually or jointly] to sign
agreements and give written instructions with regard to any matters pertaining
to the Escrow Agreement, dated as of May __, 2003, and the appointment of
Citibank, N.A., as escrow agent:
Name Title Phone Signature
---- ----- ----- ---------
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the corporate seal of the Company this __ day of , 2003.
[SIGNED BY SOMEONE WHOSE NAME IS
NOT INCLUDED IN THE ABOVE LIST]
By:_____________________________
Name:
Title:
EXHIBIT B
OFFICER'S CERTIFICATE OF POLYONE CORPORATION
This certificate is being delivered pursuant to paragraph 4 of
part I of the Escrow Agreement, dated as of May __, 2003 (the "Escrow
Agreement"), between PolyOne Corporation (the "Company"), and Citibank, N.A., as
escrow agent (the "Escrow Agent"). Capitalized terms used herein but not defined
herein shall have the meanings given to such terms in the Escrow Agreement.
1. The Company hereby requests through the undersigned Authorized
Person that [$__________ of the Escrow Property / all of the Escrow
Property] be released to the Company.
2. The Company hereby certifies through the undersigned Authorized
Person that:
(a) the Company will use all or a portion of the Escrow
Property released pursuant to this Certificate to repay, redeem,
purchase, defease or otherwise satisfy its obligations under any of
its outstanding 9.375% Senior Notes due 2003 (the "Senior Notes");
and
(b) the Company will use all or a portion of the Escrow
Property released pursuant to this Certificate for general corporate
purposes after the Company has repaid, redeemed, purchased, defeased
or otherwise satisfied its obligations under all of the Senior
Notes.
IN WITNESS WHEREOF, the Company, through the undersigned
officer, has signed this Certificate this [ ] day of [ ], 2003.
POLYONE CORPORATION
By:________________________________
Name:
Title: