STEPAN COMPANY
REVOLVING CREDIT AGREEMENT
DATED AS OF
JANUARY 9, 1998
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS............................................... 1
ARTICLE II - THE CREDITS.............................................. 9
2.1. Commitment.................................................... 9
2.2. Ratable Loans................................................. 9
2.3. Rate Options.................................................. 9
2.4. Mandatory Principal Payments.................................. 9
2.5. Optional Principal Payments................................... 9
2.6. Commitment Fee and Reduction of Commitments................... 9
2.7. Method of Borrowing........................................... 10
2.8. Method of Selecting Rate Options and Interest Periods......... 10
2.9. Conversion and Continuation of Outstanding Advances........... 10
2.10. Minimum Amount of Each Advance................................ 11
2.11. Rate after Default............................................ 11
2.12. Method of Payment............................................. 11
2.13. Notes; Telephonic Notices..................................... 11
2.14. Interest Payment Dates; Interest Basis........................ 11
2.15. Notification of Advances, Interest Rates, Prepayments
and Commitment Reductions................................... 12
2.16. Lending Installations......................................... 12
2.17. Non-Receipt of Funds by the Agent............................. 12
ARTICLE III - CHANGE IN CIRCUMSTANCES................................. 12
3.1. Yield Protection.............................................. 12
3.2. Availability of Rate Options.................................. 13
3.3. Funding Indemnification....................................... 13
3.4. Taxes......................................................... 13
ARTICLE IV - CONDITIONS PRECEDENT..................................... 15
4.1. Initial Advance............................................... 15
4.3. Each Advance.................................................. 16
ARTICLE V - REPRESENTATIONS AND WARRANTIES............................ 16
5.1. Corporate Existence and Standing.............................. 16
5.2. Authorization and Validity.................................... 16
5.3. No Conflict; Government Consent............................... 17
5.4. Financial Statements.......................................... 17
5.5. Material Adverse Change....................................... 17
5.6. Taxes......................................................... 17
[CAPTION]
5.7. Litigation.................................................... 17
5.8. Subsidiaries.................................................. 18
5.9. ERISA......................................................... 18
5.10. Accuracy of Information....................................... 18
5.11. Regulation U.................................................. 18
5.12. Material Agreements........................................... 18
5.13. Subordinated Indebtedness..................................... 18
5.14. Compliance with Environmental Laws............................ 18
5.15. Compliance With Laws.......................................... 19
5.16. Ownership of Properties....................................... 19
5.17. Plan Assets; Prohibited Transactions.......................... 19
5.18. Investment Company Act........................................ 19
5.19. Public Utility Holding Company Act............................ 19
ARTICLE - COVENANTS................................................... 19
6.1. Financial Reporting........................................... 19
6.2. Use of Proceeds............................................... 21
6.3. Interest Coverage Ratio....................................... 21
6.4. Notice of Default............................................. 21
6.5. Conduct of Business........................................... 21
6.6. Taxes......................................................... 21
6.7. Insurance..................................................... 22
6.8. Compliance with Laws.......................................... 22
6.9. Maintenance of Properties..................................... 22
6.10. Inspection.................................................... 22
6.11. Dividends..................................................... 22
6.12. Indebtedness.................................................. 23
6.13. Mergers and Consolidations.................................... 24
6.14. Sale of Assets................................................ 24
6.15. Sale and Leaseback............................................ 25
6.16. Investments................................................... 25
6.17. Guaranties.................................................... 26
6.18. Liens......................................................... 26
6.19. Purchase of Stocks............................................ 28
6.20. Limitations on Dispositions of Stock or Indebtedness of
Restricted Subsidiaries..................................... 28
ARTICLE VII - DEFAULTS................................................ 29
ARTICLE VIII - ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES......... 30
8.1. Acceleration.................................................. 30
8.2. Amendments.................................................... 30
8.3. Preservation of Rights........................................ 31
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[CAPTION]
ARTICLE IX - GENERAL PROVISIONS........................................ 31
9.1. Survival of Representations................................... 31
9.2. Governmental Regulation....................................... 31
9.3. Taxes......................................................... 31
9.4. Choice of Law................................................. 31
9.5. Headings...................................................... 31
9.6. Entire Agreement.............................................. 31
9.7. Several Obligations........................................... 32
9.8. Expenses; Indemnification..................................... 32
9.9. Numbers of Documents.......................................... 32
9.10. Accounting.................................................... 32
9.11. Severability of Provisions.................................... 32
9.12. Nonliability of Banks......................................... 32
ARTICLE X - THE AGENT.................................................. 33
10.1. Appointment; Nature of Relationship........................... 33
10.2. Powers........................................................ 33
10.3. General Immunity.............................................. 33
10.4. No Responsibility for Loans, Recitals, etc.................... 33
10.5. Action on Instructions of Banks............................... 34
10.6. Employment of Agents and Counsel.............................. 34
10.7. Reliance on Documents; Counsel................................ 34
10.8. Agent's Reimbursement and Indemnification..................... 34
10.9. Notice of Default............................................. 35
10.10. Rights as a Bank.............................................. 35
10.11. Bank Credit Decision.......................................... 35
10.12. Successor Agent............................................... 35
10.13. Agent's Fee................................................... 36
10.14. Delegation to Affiliates...................................... 36
ARTICLE XI - SETOFF; RATABLE PAYMENTS.................................. 36
11.1. Setoff......................................................... 36
11.2. Ratable Payments............................................... 36
ARTICLE XII - NOTICES.................................................. 37
12.1. Giving Notice.................................................. 37
12.2. Change of Address.............................................. 37
ARTICLE XIII - BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS....... 37
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[CAPTION]
13.2. .............................................................. 37
13.2.3. Benefit of Setoff.................................... 38
ARTICLE XV - CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF
JURY TRIAL.......................................................... 39
15.1. CHOICE OF LAW................................................. 39
15.2. CONSENT TO JURISDICTION....................................... 39
15.3. WAIVER OF JURY TRIAL.......................................... 40
EXHIBIT "A" - NOTE.................................................... 43
EXHIBIT "B" -......................................................... 45
EXHIBIT "C" - COMPLIANCE CERTIFICATE.................................. 47
EXHIBIT "D" - ASSIGNMENT AGREEMENT.................................... 49
SCHEDULE "1" - SUBSIDIARIES AND OTHER INVESTMENTS..................... 61
SCHEDULE "2" - INDEBTEDNESS AND LIENS................................. 62
SCHEDULE "3" - LONG TERM DEBT......................................... 63
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STEPAN COMPANY
REVOLVING CREDIT AGREEMENT
DATED AS OF
JANUARY 9, 1998
This Agreement, dated as of January 9, 1998, is among Stepan Company,
the Banks and The First National Bank of Chicago, as Agent. The parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
-----------
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Company or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company.
"Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made by the Banks to the Company on the same
Borrowing Date, at the same Rate Option and, in the case of Eurodollar Advances,
for the same Interest Period.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
A Person shall be deemed to control another Person if the controlling Person
owns 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of stock, by contract, or
otherwise.
"Agent" means The First National Bank of Chicago in its capacity as
agent for the Banks pursuant to Article X, and not in its individual capacity as
a Bank, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of the
Banks hereunder.
"Agreement" means this revolving credit agreement, as it may be
amended from time to time.
"Agreement Accounting Principles" means generally accepted principles
of accounting in effect at the time of the preparation of the financial
statements referred to in Section 5.4, applied in a manner
consistent with that used in preparing such statements. If any change in
accounting principles from the principles used in preparing such statements
would have a material effect upon the results of any calculation required by or
compliance with any provision of this Agreement, then the parties hereto agree
to enter into negotiations in order to amend such provisions so as to equitably
reflect such changes with the desired result that the criteria for evaluating
Company's financial condition and operations shall be the same after such
changes as if such changes had not been made.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Corporate Base Rate for such day and (ii) the sum
of the Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Fee Rate" means, at any time, the percentage rate per
annum at which Commitment Fees are accruing on the unused portion of the
Aggregate Commitment at such time as set forth in the Pricing Schedule.
"Applicable Margin" means, with respect to Eurodollar Advances at any
time, the percentage rate per annum which is applicable at such time with
respect to Eurodollar Advances as set forth in the Pricing Schedule.
"Arranger" means First Chicago Capital Markets, Inc., a Delaware
corporation, and its successors.
"Article" means an article of this Agreement unless another document
is specifically referenced.
"Authorized Officer" means any of the President, Vice President -
Finance or the Search Corporate Controller of the Company, acting singly.
"Banks" means the banks listed on the signature pages of this
Agreement as amended from time to time and their respective successors and
assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (i) with respect to borrowing, payment or rate
selection of Eurodollar Advances, a day other than Saturday or Sunday on which
banks are open for business in Chicago and New York and on which dealings in
U.S. dollars are carried on in the London interbank market and (ii) for all
other purposes, a day other than Saturday or Sunday on which banks are open for
business in Chicago.
"Capitalized Lease" of a Person means any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person, prepared in accordance with
Agreement Accounting Principles.
2
"Commitment" means, for each Bank, the obligation of the Bank to make
Loans not exceeding the amount set forth opposite its signature below or as set
forth in any Notice of Assignment relating to any assignment that has become
effective pursuant to Section 13.3.1, as such amount may be modified from time
to time.
"Company" means Stepan Company, a Delaware corporation, and its
successors and assigns.
"Consolidated Capitalization" means the sum of (i) Consolidated Funded
Indebtedness plus (ii) Consolidated Tangible Net Worth plus (iii) deferred taxes
and investment tax credits for the Company and its Restricted Subsidiaries.
"Consolidated Current Liabilities" means, at any date as of which the
amount thereof is to be determined, the amount which would be set forth as
current liabilities on a consolidated balance sheet of the Company and the
Restricted Subsidiaries prepared as of such date in accordance with Agreement
Accounting Principles.
"Consolidated Earnings Before Interest and Taxes" means, for any
fiscal quarter, the sum of (i) earnings before income taxes for such fiscal
quarter, plus (ii) Consolidated Interest Expense for such fiscal quarter less
(iii) equity earnings of Unrestricted Subsidiaries of the Company for such
quarter determined on a consolidated basis for the Company and the Restricted
Subsidiaries in accordance with Agreement Accounting Principles.
"Consolidated Tangible Assets" means, as at any date as of which the
amount thereof is to be determined, an amount equal to the amount by which (a)
the aggregate amount at which all assets of the Company and the Restricted
Subsidiaries would be set forth on a consolidated balance sheet of the Company
and the Restricted Subsidiaries prepared as of such date in accordance with
Agreement Accounting Principles, exceeds (b) the sum of the amounts which would
be set forth on such consolidated balance sheet as (i) any surplus resulting
from any writeup of assets and (ii) the aggregate value of all patents,
licenses, trade names, trademarks, copy-rights, good will and deferred charges
(including, but not limited to, unamortized debt discount and expenses,
organizational expenses and experimental and developmental expenses, but
excluding prepaid expenses).
"Consolidated Tangible Net Worth" means, at any date as of which the
amount thereof is to be determined, (a) the sum of the amounts which would be
set forth as preferred stock, common stock, capital in excess of par value or
paid-in surplus and retained earnings on a consolidated balance sheet of the
Company and the Restricted Subsidiaries prepared as of such date in accordance
with Agreement Accounting Principles, minus (b) the sum of the amounts which
would be set forth on such consolidated balance sheet as (i) the cost of any
shares of the Company's common stock held in the treasury, (ii) any surplus
resulting from any writeup of assets and (iii) the aggregate value of all
patents, licenses, trade names, trademarks, copy-rights, good will and deferred
charges (including, but not limited to, unamortized debt discount and expenses,
organizational expenses and experimental and developmental expenses, but
excluding prepaid expenses).
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Company or any Subsidiary, are treated
as a single employer under Section 414(b) or 414(c) of the Internal Revenue
Code.
3
"Corporate Base Rate" means a rate per annum equal to the corporate
base rate of interest announced by First Chicago from time to time, changing
when and as said corporate base rate changes.
"1990 Credit Agreement" means that certain Credit Agreement dated as
of February 20, 1990, among the Company, First Chicago as agent for the banks,
and the banks party thereto, as amended through the date hereof.
"Current Indebtedness" means all Indebtedness other than Funded
Indebtedness, and, without limitation, shall include (i) all Indebtedness
maturing on demand or within one year after the date as of which such
determination is made, (ii) final maturities and prepayments of Indebtedness and
sinking fund payments and (iii) all other items (including taxes accrued as
estimated) which, in accordance with Agreement Accounting Principles, would be
included as Consolidated Current Liabilities.
"Default" means an event described in Article VII.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Eurodollar Interest Period, the rate determined by the Agent to be
the arithmetic average of the rates reported to the Agent by each Bank as the
rate at which deposits in U.S. dollars are offered by such Bank to first-class
banks in the London interbank market at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Eurodollar Interest Period, in
the approximate amount of such Bank's relevant Eurodollar Loan and having a
maturity approximately equal to such Eurodollar Interest Period.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Eurodollar Interest Period, the sum of (i) the quotient of (a) the
Eurodollar Base Rate applicable to that Eurodollar Interest Period, divided by
(b) one minus the Reserve Requirement (expressed as a decimal) applicable to
that Eurodollar Interest Period, plus (ii) the Applicable Margin. The Eurodollar
Rate shall be rounded, if necessary, to the next higher 1/16 of 1%. "Eurodollar
Advance" and "Eurodollar Loan" mean an Advance or a Loan, as the case may be,
which bears interest at a Eurodollar Rate.
"Facility Termination Date" means January 8, 2003 or any earlier date
on which the Aggregate Commitment is reduced to zero or otherwise terminated
pursuant to the terms hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate
per annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Federal Funds Funding Rate" means, with respect to any Advance
bearing interest at the Federal Funds Rate, the rate per annum equal to the
consensus (or if no consensus exists, the arithmetic average) of the rates at
which reserves are offered by first-class banks to other first-class banks (at
approximately 10:00 a.m. (Chicago time)) on such day (or if such day is not a
Business Day, on the immediately preceding Business Day) on overnight Federal
funds transactions with members of the Federal Reserve
4
System arranged by Federal funds brokers, received by the Agent from three
Federal funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Federal Funds Advance" and Federal Funds Loan" means an Advance or a
Loan, as the case may be, which bears interest at a Federal Funds Rate.
"Federal Funds Rate" means a rate per annum equal to the Federal
Funds Funding Rate plus a margin to be agreed upon between the Banks and the
Company from time to time.
"First Chicago" means The First National Bank of Chicago in its
individual capacity, and its successors and assigns.
"Floating Rate" means a rate per annum equal to the Alternate Base
Rate, changing when and as the Alternate Base Rate changes. "Floating Rate
Advance" and "Floating Rate Loan" mean an Advance or a Loan, as the case may be,
which bears interest at the Floating Rate.
"Funded Indebtedness" means any liabilities or Indebtedness secured or
unsecured with a maturity due date or expiration more than one year from any
date of determination, including Capitalized Leases, (i) minus deferred taxes
and investment tax credits and (ii) plus Guarantees and Unfunded Liabilities.
Funded Indebtedness determined on a consolidated basis for the Company and its
Restricted Subsidiaries will be referred to herein as "Consolidated Funded
Indebtedness".
"Guaranty" of a Person means any agreement by which such Person
assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes liable upon, the obligation of any
other Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person or otherwise assures any creditor of
such other Person against loss, including, without limitation, any operating
agreement or take-or-pay contract and shall include, without limitation, the
contingent liability of such Person in connection with any application for a
Letter of Credit.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
property other than accounts payable arising in the ordinary course of such
Person's business payable on terms customary in the trade, (iii) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from property now or hereafter owned or acquired by such Person, (iv)
obligations which are evidenced by notes, acceptances, or other instruments, (v)
Capitalized Lease Obligations and (vi) obligations for which such Person is
obligated pursuant to a Guaranty or pursuant to a Letter of Credit.
"Interest Expense" means with respect to any period for which the
amount thereof is to be determined, an amount equal to interest expense on
Indebtedness, as determined in accordance with Agreement Accounting Principles.
Interest Expense determined on a consolidated basis for the Company and its
Restricted Subsidiaries will be referred to herein as "Consolidated Interest
Expense."
"Interest Period" means, with respect to a Eurodollar Advance, a
period of one, two, three or six months commencing on a Business Day selected by
the Company pursuant to this Agreement. Such Interest Period shall end on the
day in the succeeding calendar month which corresponds numerically to the
beginning day of such Interest Period, provided, however, that if there is no
such numerically corresponding day in such succeeding month, such Interest
Period shall end on the last Business Day of
5
such succeeding month. If an Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next succeeding
Business Day, provided, however, that if said next succeeding Business Day falls
in a new month, such Interest Period shall end on the immediately preceding
Business Day.
"Investment" of a Person means any loan, advance, extension of credit
(excluding accounts receivable arising in the ordinary course of business on
terms customary in the trade), deposit account or contribution of capital by
such Person to any other Person or any investment in, or purchase or other
acquisition of, the stock, notes, debentures or other securities of any other
Person made by such Person.
"Lending Installation" means any office, branch, subsidiary or
affiliate of any Bank or the Agent.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Bank, such Bank's portion of any
Advance.
"Loan Documents" means this Agreement and the Notes.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Company or any member
of the Controlled Group is a party to which more than one employer is obligated
to make contributions.
"Note" means a promissory note in substantially the form of Exhibit
"A" hereto, duly executed and delivered to the Agent by the Company and payable
to the order of a Bank in the amount of its Commitment, including any amendment,
modification, renewal or replacement of such promissory note.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Notes, all accrued and unpaid commitment fees and all other
obligations of the Company to the Banks or to any Bank or the Agent arising
under the Loan Documents.
"Phthalic Anhydride Line" means any product manufactured by the
Company from Orthoxylene.
"Payment Date" means the last day of January, April, July, and
October.
"PBGC" means the Pension Benefit Guaranty Corporation and its
successors and assigns.
"Person" means any corporation, natural person, firm, joint venture,
partnership, limited liability company, trust, unincorporated organization,
enterprise, government or any department or agency of any government.
6
"Plan" means an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Internal Revenue Code as to which the Company or any Subsidiary may have
any liability.
"Pricing Schedule" means the Schedule attached hereto identified as
such.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Rate Option" means the Eurodollar Rate, the Floating Rate or the
Federal Funds Rate.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and shall include any
successor or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System from time to time in effect and shall include any
successor or other regulation or official interpretation of said Board of
Governors relating to the extension of credit by banks for the purpose of
purchasing or carrying margin stocks applicable to member banks of the Federal
Reserve System.
"Rentals" of a Person means the aggregate fixed amounts payable by
such Person under any lease of real or personal property having an original term
(including any required renewals or any renewals at the option of the lessor or
lessee) of one year or more but does not include any amounts payable under
Capitalized Leases of such Person.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such Section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided that a failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code and of Section 302
of ERISA shall be a reportable event regardless of the issuance of any such
waivers in accordance with Section 412(d) of the Internal Revenue Code.
"Required Banks" means Banks in the aggregate having at least 66-2/3%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Banks in the aggregate holding at least 66-2/3% of the aggregate unpaid
principal amount of the outstanding Advances.
"Reserve Requirement" means, with respect to a Eurodollar Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under Regulation D
on Eurocurrency liabilities as defined in Regulation D).
"Restricted Subsidiary" means any Subsidiary of the Company which (i)
is organized under the laws of any state of the United States of America or
under the laws of Canada or any province thereof, (ii) has substantially all of
its assets located within, and operates substantially within, the United States
of America or Canada, (iii) at least 50% of the outstanding voting stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether or not at the time stock of any other class
or classes shall have or might have voting power by reason of the happening
7
of any contingency) is at the time directly or indirectly owned by the Company,
by one or more of its Wholly-Owned Restricted Subsidiaries or by the Company and
one or more of its Wholly-Owned Restricted Subsidiaries, and (iv) which the
Company designates as a Restricted Subsidiary; provided, however, that the
Company may not subsequently change the description of any such Subsidiary from
Restricted Subsidiary to Unrestricted Subsidiary.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Stepan Family" means ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, F. ▇▇▇▇▇ ▇▇▇▇▇▇ and family,
▇▇▇▇ ▇. ▇▇▇▇▇▇ and family, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and family, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ and family, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III and family, ▇▇▇▇ ▇. ▇▇▇▇▇▇ and family,
Stratford ▇. ▇▇▇▇▇▇ and family and Stepan Venture I and Stepan Venture II.
"Single Employer Plan" means a Plan maintained by the Company or any
member of the Controlled Group for employees of the Company or any member of the
Controlled Group.
"Subordinated Indebtedness" means any Indebtedness the payment of
which is subordinated to payment of the Obligations to the written satisfaction
of the Banks.
"Subsidiary" means any corporation more than 50% of the outstanding
voting securities of which shall at the time be owned or controlled, directly or
indirectly, by the Company or by one or more Subsidiaries or by the Company and
one or more Subsidiaries, or any similar business organization which is so owned
or controlled.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding in the case of each Bank or applicable
Lending Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Bank or the Agent is incorporated or organized or (ii) the jurisdiction in
which the Agent's or such Bank's principal executive office or such Bank's
applicable Lending Installation is located.
"Unfriendly Acquisition" means any Acquisition unless the board of
directors (or other person exercising similar functions) of the issuer of the
securities to be acquired shall have approved such Acquisition and recommended
it to the holders of the securities to be acquired.
"Unfunded Liabilities" means, (i) in the case of Single Employer
Plans, the amount (if any) by which the present value of all vested
nonforfeitable benefits under such Plan exceeds the fair market value of all
Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, and (ii) in the case of Multiemployer
Plans, the withdrawal liability of the Company and Subsidiaries.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Unrestricted Subsidiary" means any Subsidiary other than a Restricted
Subsidiary.
8
"Wholly-Owned Subsidiary" means any Subsidiary all of the outstanding
voting securities of which shall at the time be owned or controlled, directly or
indirectly, by the Company or one or more Wholly-Owned Subsidiaries, or by the
Company and one or more Wholly-Owned Subsidiaries, or any similar business
organization which is so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
-----------
2.1. Commitment. From and including the date of this Agreement and
prior to the Facility Termination Date, each Bank severally agrees, on the terms
and conditions set forth in this Agreement, to make Loans to the Company from
time to time in amounts not to exceed in the aggregate at any one time
outstanding the amount of its Commitment. Subject to the terms of this
Agreement, the Company may borrow, repay and reborrow at any time prior to the
Facility Termination Date.
2.2. Ratable Loans. Each Advance hereunder shall consist of Loans
made from the several Banks ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment.
2.3. Rate Options. The Advances may be Floating Rate Advances,
Eurodollar Advances or, during the last 5 Business Days of each calendar
quarter, Federal Funds Advances, or a combination thereof, selected by the
Company in accordance with Section 2.8.
2.4. Mandatory Principal Payments. Any outstanding Advances and all
other unpaid Obligations shall be paid in full by the Company on the Facility
Termination Date.
2.5. Optional Principal Payments. The Company may from time to time
pay all outstanding Floating Rate Advances or Federal Funds Advances, or, in a
minimum aggregate amount of $100,000 or any integral multiple thereof, any
portion of the outstanding Floating Rate Advances or Federal Funds Advances upon
one Business Day's prior notice to the Agent without penalty or premium. The
Company may from time to time pay, subject to the payment of any fundings
indemnification amounts required by Section 3.3 but without penalty or premium,
all outstanding Eurodollar Advances, or, in a minimum aggregate amount of
$100,000 or any integral multiple of $100,000 in excess thereof, any portion of
the outstanding Eurodollar Advances upon three Business Days' prior notice to
the Agent.
2.6. Commitment Fee and Reduction of Commitments. The Company agrees
to pay to the Agent on each Payment Date for the account of each Bank a
commitment fee at a per annum rate equal to the Applicable Fee Rate multiplied
by the unused Aggregate Commitment from the date hereof through and including
the Facility Termination Date. The Company may permanently reduce the Aggregate
Commitment in whole, or in part ratably among the Banks, in integral multiples
of $1,000,000, upon at least three Business Days' written notice to the Agent,
which shall specify the amount of any such reduction, provided, however, that
the amount of the Aggregate Commitment may not be reduced below the outstanding
principal amount of the Advances. All accrued commitment fees shall be payable
on the effective date of any termination of the obligations of the Banks to make
Loans hereunder.
9
2.7. Method of Borrowing. Not later than noon Chicago time on each
Borrowing Date, each Bank shall make available its Loan or Loans in funds
immediately available in Chicago, to the Agent at its address specified pursuant
to Article XII. The Agent will make the funds so received from the Banks
available to the Company at the Agent's aforesaid address. Notwithstanding the
foregoing provisions of this Section, to the extent that a Loan made by a Bank
matures on the Borrowing Date of a requested Loan, such Bank shall apply the
proceeds of the Loan it is then making to the repayment of the maturing Loan.
2.8. Method of Selecting Rate Options and Interest Periods. The
Company shall select the Rate Option and, in the case of each Eurodollar
Advance, the Interest Period applicable thereto from time to time. The Company
shall give the Agent irrevocable notice (a "Borrowing Notice") not later than
11:00 a.m. Chicago time on the Borrowing Date of each Floating Rate Advance or
Federal Funds Advance and three Business Days before the Borrowing Date for each
Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Rate Option selected for such Advance, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Each Eurodollar Advance shall bear interest from and including the first day of
the Interest Period applicable thereto to (but not including) the last day of
such Interest Period at the interest rate determined as applicable to such
Eurodollar Advance.
2.9. Conversion and Continuation of Outstanding Advances. Floating
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into Eurodollar Advances pursuant to this
Section 2.9 or are repaid in accordance with Section 2.5. Each Federal Funds
Advance shall automatically continue as a Federal Funds Advance for another day
unless it shall have been paid or converted prior to 11:00 a.m. (Chicago time)
on any day; provided that on the last Business Day of each calendar quarter such
Federal Funds Advance shall be automatically converted into a Floating Rate
Advance. Each Eurodollar Advance shall continue as a Eurodollar Advance until
the end of the then applicable Interest Period therefor, at which time such
Eurodollar Advance shall be automatically converted into a Floating Rate Advance
unless (x) such Eurodollar Advance is or was repaid in accordance with Section
2.5 or (y) the Company shall have given the Agent a Conversion/Continuation
Notice (as defined below) requesting that, at the end of such Interest Period,
such Eurodollar Advance continue as a Eurodollar Advance for the same or another
Interest Period. Subject to the terms of Section 2.5, the Company may elect
from time to time to convert all or any part of a Floating Rate Advance or into
a Eurodollar Advance. The Company shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of a Floating Rate Advance
into a Eurodollar Advance or continuation of a Eurodollar Advance not later than
11:00 a.m. (Chicago time) at least three Business Days prior to the date of the
requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such conversion
or continuation,
(ii) the aggregate amount and Rate Option selected for the Advance which is
to be converted or continued, and
10
(iii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the Interest
Period applicable thereto.
2.10. Minimum Amount of Each Advance. Each Eurodollar Advance shall be in
the minimum amount of $2,000,000 (and in multiples of $100,000 if in excess
thereof), and each Floating Rate Advance and Federal Funds Advance shall be in
the minimum amount of $100,000 (and in multiples of $100,000 if in excess
thereof), provided, however, that any Floating Rate Advance may be in the amount
of the unused Aggregate Commitment.
2.11. Rate after Default. Notwithstanding anything to the contrary
contained in Section 2.8 or 2.9, during the continuance of a Default or
Unmatured Default the Required Banks may, at their option, by notice to the
Company, declare that no Advance may be made as, converted into or continued as
a Eurodollar Advance. During the continuance of a Default the Required Banks
may, at their option, by notice to the Company, declare that (i) each Eurodollar
Advance shall bear interest for the remainder of the applicable Interest Period
at the rate otherwise applicable to such Interest Period plus 2% per annum and
(ii) each Floating Rate Advance and Federal Funds Advance shall bear interest at
a rate per annum equal to the Floating Rate in effect from time to time plus 2%
per annum, provided that, during the continuance of a Default under Section 7.6
or 7.7, the interest rates set forth in clauses (i) and (ii) above shall be
applicable to all Advances without any election or action on the part of the
Agent or any Bank.
2.12. Method of Payment. All payments of principal, interest, and fees
hereunder shall be made in immediately available funds, by noon (local time) on
the date when due (except that payments of principal on Federal Funds Advances
shall be made by 10:00 a.m. (local time) and shall be made ratably among the
Banks, to the Agent at the Agent's address specified pursuant to Article XII or
at any other Lending Installation of the Agent specified in writing by the Agent
to the Company. Each payment delivered to the Agent for the account of any Bank
shall be delivered promptly by the Agent to such Bank in the same type of funds
which the Agent received at its address specified pursuant to Article XII or at
any Lending Installation specified in a notice received by the Agent from such
Bank. The Agent is hereby authorized to charge the account of the Company
maintained with First Chicago for each payment of principal, interest and fees
as it becomes due hereunder.
2.13. Notes; Telephonic Notices. Each Bank is hereby authorized to record
the principal amount of each of its Loans and each repayment on the schedule
attached to its Note provided, however, that the failure to so record shall not
affect the Company's obligations under such Note. The Company hereby authorizes
the Banks and the Agent to extend Advances and effect Rate Option selections
based on telephonic notices made by any person or persons the Agent or any Bank
in good faith believes to be acting on behalf of the Company. The Company
agrees to deliver promptly to the Agent a written confirmation of each
telephonic notice signed by an Authorized Officer. If the written confirmation
differs in any material respect from the action taken by the Agent and the Banks
in response to any telephonic notice, the records of the Agent and the Banks
shall govern absent manifest error.
2.14. Interest Payment Dates; Interest Basis. Interest accrued on each
Eurodollar Advance shall be payable on the last day of its applicable Interest
Period and on any date on which the Advance is prepaid, whether due to
acceleration or otherwise. Interest accrued on each Eurodollar Advance having
an Interest Period longer than three months shall also be payable on the last
day of each three-month interval during such Interest Period. Interest accrued
on each Floating Rate Advance or Federal Funds Advance shall be payable on each
Payment Date and on any date on which the Advance is prepaid,
11
whether due to acceleration or otherwise. Interest and commitment fees shall be
calculated for actual days elapsed on the basis of a 360-day year. Interest
shall be payable for the day an Advance is made but not for the day of any
payment on the amount paid if payment is received prior to noon (local time) at
the place of payment. If any payment of principal of or interest on an Advance
shall become due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day and, in the case of a principal
payment, such extension of time shall be included in computing interest in
connection with such payment.
2.15. Notification of Advances, Interest Rates, Prepayments and Commitment
Reductions. Promptly after receipt thereof, the Agent will notify each Bank of
the contents of each Aggregate Commitment reduction notice, Borrowing Notice,
conversion/continuation notice and repayment notice received by it hereunder.
The Agent will notify each Bank of the interest rate applicable to each
Eurodollar Advance promptly upon determination of such interest rate and will
give each Bank prompt notice of each change in the Corporate Base Rate.
2.16. Lending Installations. Each Bank may book its Loans at any Lending
Installation selected by such Bank and may change its Lending Installation from
time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Notes shall be deemed held by each Bank for the benefit of
such Lending Installation. Each Bank may, by written or telex notice to the
Agent and the Company, designate a Lending Installation through which Loans will
be made by it and for whose account Loan payments are to be made.
2.17. Non-Receipt of Funds by the Agent. Unless the Company or a Bank, as
the case may be, notifies the Agent prior to the date on which it is scheduled
to make payment to the Agent of (i) in the case of a Bank, the proceeds of a
Loan or (ii) in the case of the Company, a payment of principal, interest or
fees to the Agent for the account of the Banks, that it does not intend to make
such payment, the Agent may assume that such payment has been made. The Agent
may, but shall not be obligated to, make the amount of such payment available to
the intended recipient in reliance upon such assumption. If such Bank or the
Company, as the case may be, has not in fact made such payment to the Agent, the
recipient of such payment shall, on demand by the Agent, repay to the Agent the
amount so made available together with interest thereon in respect of each day
during the period commencing on the date such amount was so made available by
the Agent until the date the Agent recovers such amount at a rate per annum
equal to (i) in the case of payment by a Bank, the federal funds rate for such
day (as determined by the Agent) or (ii) in the case of payment by the Company,
the interest rate applicable to the relevant Loan.
ARTICLE III
CHANGE IN CIRCUMSTANCES
-----------------------
3.1. Yield Protection. If any law or any governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
interpretation thereof, or compliance of any Bank with such,
12
(i) subjects any Bank or any applicable Lending Installation to any
Taxes or changes the basis of taxation of payments to any Bank in respect
of its Loans or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any Bank or any
applicable Lending Installation (other than reserves and assessments taken
into account in determining the interest rate applicable to Eurodollar
Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Bank or any applicable Lending Installation of making,
funding or maintaining loans or reduces any amount receivable by any Bank
or any applicable Lending Installation in connection with loans, or
requires any Bank or any applicable Lending Installation to make any
payment calculated by reference to the amount of loans held or interest
received by it, by an amount deemed material by such Bank, except any
special charge imposed on a Bank separate from the Assessment Rate that is
imposed on such Bank as a result of its non-performing loans or
(iv) affects the amount of capital required or expected to be
maintained by any Bank or Lending Office or any corporation controlling any
Bank and such Bank determines the amount of capital required is increased
by or based upon the existence of this Agreement or its obligation to make
Loans hereunder or of commitments of this type,
then, within 15 days of demand by such Bank, the Company shall pay such Bank
that portion of such increased expense incurred (including, in the case of
Section 3.1(iv), any reduction in the rate of return on capital to an amount
below that which it could have achieved but for such change in regulation after
taking into account such Bank's policies as to capital adequacy) or reduction in
an amount received which such Bank determines is attributable to making, funding
and maintaining its Loans and its Commitment. The Company will not be liable
for any amounts incurred by the Banks more than one year prior to the receipt by
the Company of a notice from the Bank demanding payment of such amounts.
3.2. Availability of Rate Options. If any Bank determines that maintenance
of its Eurodollar Loans at a suitable Lending Installation would violate any
applicable law, rule, regulation, or directive, whether or not having the force
of law, or if any Bank determines that (i) deposits of a type and maturity
appropriate to match fund Eurodollar Advances are not available or (ii) a Rate
Option does not accurately reflect the cost of making or maintaining an Advance
at such Rate Option, then the Agent shall suspend the availability of the
affected Rate Option and require any Eurodollar Advances outstanding under an
affected Rate Option to be repaid.
3.3. Funding Indemnification. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made on the date specified by the Company for any reason other
than default by the Banks, the Company will indemnify each Bank for any loss or
cost incurred by it resulting therefrom, including, without limitation, any loss
or cost in liquidating or employing deposits acquired to fund or maintain the
Eurodollar Advance.
3.4. Taxes. (i) All payments by the Company to or for the account of any
Bank or the Agent hereunder or under any Note shall be made free and clear of
and without deduction for any and all Taxes.
13
If the Company shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder to any Bank or the Agent, (a) the sum payable shall
be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
3.5) such Bank 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, (b) the Company
shall make such deductions, (c) the Company shall pay the full amount deducted
to the relevant authority in accordance with applicable law and (d) the Company
shall furnish to the Agent the original copy of a receipt evidencing payment
thereof within 30 days after such payment is made.
(ii) In addition, the Company hereby agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any Note or
from the execution or delivery of, or otherwise with respect to, this Agreement
or any Note ("Other Taxes").
(iii) The Company hereby agrees to indemnify the Agent and each Bank for
the full amount of Taxes or Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed on amounts payable under this Section 3.5) paid by
the Agent or such Bank and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. Payments due under this
indemnification shall be made within 30 days of the date the Agent or such Bank
makes demand therefor pursuant to Section 3.5.
(iv) Each Bank that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Bank") agrees that it
will, not less than ten Business Days after the date of this Agreement, (i)
deliver to each of the Company and the Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, certifying in either case
that such Bank is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, and (ii)
deliver to each of the Company and the Agent a United States Internal Revenue
Form W-8 or W-9, as the case may be, and certify that it is entitled to an
exemption from United States backup withholding tax. Each Non-U.S. Bank further
undertakes to deliver to each of the Company and the Agent (x) renewals or
additional copies of such form (or any successor form) on or before the date
that such form expires or becomes obsolete, and (y) after the occurrence of any
event requiring a change in the most recent forms so delivered by it, such
additional forms or amendments thereto as may be reasonably requested by the
Company or the Agent. All forms or amendments described in the preceding
sentence shall certify that such Bank is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form or amendment
with respect to it and such Bank advises the Company and the Agent that it is
not capable of receiving payments without any deduction or withholding of United
States federal income tax.
(v) For any period during which a Non-U.S. Bank has failed to provide the
Company with an appropriate form pursuant to clause (iv), above (unless such
failure is due to a change in treaty, law or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Bank shall not be entitled to indemnification under
this Section 3.4 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Bank which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required
14
under clause (iv), above, the Company shall take such steps as such Non-U.S.
Bank shall reasonably request to assist such Non-U.S. Bank to recover such
Taxes.
(vi) Any Bank that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
the Company (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.
3.5. Bank Certificates; Survival of Indemnity. To the extent reasonably
possible, each Bank shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Company to such
Bank under Section 3.1 or to avoid the unavailability of a Rate Option under
Section 3.2, so long as such designation is not disadvantageous to such Bank. A
certificate of a Bank as to the amount due under Section 3.1, 3.3 and 3.4 shall
be final, conclusive and binding on the Company in the absence of manifest
error. Determination of amounts payable under such Sections in connection with
a Eurodollar Loan shall be calculated as though each Bank funded its Eurodollar
Loan through the purchase of a deposit of the type and maturity corresponding to
the deposit used as a reference in determining the Eurodollar applicable to such
Loan, whether in fact that is the case or not. Unless otherwise provided
herein, the amount specified in the certificate shall be payable on demand after
receipt by the Company of the certificate. The obligations of the Company under
Sections 3.1, 3.3 or 3.4 shall survive payment of the Obligations and
termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
4.1. Initial Advance. The Banks shall not be required to make the initial
Advance hereunder unless the Company has furnished to the Agent with sufficient
copies for the Banks:
(a) Copies of the Articles of Incorporation of the Company, together with
all amendments, and a certificate of good standing, both certified by
the appropriate governmental officer in its jurisdiction of
incorporation.
(b) Copies, certified by the Secretary or Assistant Secretary of the
Company, of its By-Laws and of its Board of Directors' resolutions
(and resolutions of other bodies, if any are deemed necessary by
counsel for any Bank) authorizing the execution of the Loan Documents.
(c) An incumbency certificate, executed by the Secretary or Assistant
Secretary of the Company, which shall identify by name and title and
bear the signature of the officers of the Company authorized to sign
the Loan Documents and to make borrowings hereunder, upon which
certificate the Banks shall be entitled to rely until informed of any
change in writing by the Company.
(d) A certificate, signed by the chief financial officer of the Company,
stating that on the initial Borrowing Date no Default or Unmatured
Default has occurred and is continuing.
15
(e) A written opinion of the Company's counsel, addressed to the Banks in
substantially the form of Exhibit "B" hereto.
(f) Notes payable to the order of each of the Banks.
(g) Evidence satisfactory to the Banks that the 1990 Credit Agreement has
been terminated and all indebtedness and obligations thereunder has
been paid in full.
(h) Such other documents as any Bank or its counsel may have reasonably
requested.
4.2. Each Advance. No Bank shall be required to make any Advance
(including the initial Advance), unless on the applicable Borrowing Date:
(a) There exists no Default or Unmatured Default.
(b) The representations and warranties (other than the representation
contained in Section 5.5) contained in Article V are true and correct
as of such Borrowing Date except for changes in the Schedules hereto
reflecting transactions permitted by this Agreement.
(c) All legal matters incident to the making of such Advance shall be
satisfactory to the Banks and their counsel.
Each Borrowing Notice with respect to each such Advance shall constitute a
representation and warranty by the Company that the conditions contained in
Sections 4.2(a) and (b) have been satisfied. Any Bank may require a duly
completed compliance certificate in substantially the form of Exhibit "C" hereto
as a condition to making an Advance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
The Company represents and warrants to the Banks that:
5.1. Corporate Existence and Standing. Each of the Company and the
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted except in those instances in which the failure to maintain
such authority does not materially adversely affect the business or condition of
the Company and the Subsidiaries taken as a whole.
5.2. Authorization and Validity. The Company has the corporate power and
authority and legal right to execute and deliver the Loan Documents and to
perform its obligations thereunder. The execution and delivery by the Company
of the Loan Documents and the performance of its obligations thereunder have
been duly authorized by proper corporate proceedings, and the Loan Documents
constitute legal, valid and binding obligations of the Company enforceable
against the Company in
16
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.
5.3. No Conflict; Government Consent. Neither the execution and delivery
by the Company of the Loan Documents, nor the consummation of the transactions
therein contemplated, nor compliance with the provisions thereof will violate
any law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Company or any Restricted Subsidiary or the Company's or any
Restricted Subsidiary's articles of incorporation or by-laws or the provisions
of any indenture, instrument or agreement to which the Company or any Restricted
Subsidiary is a party or is subject, or by which it, or its property, is bound,
or conflict with or constitute a default thereunder, or result in the creation
or imposition of any Lien in, of or on the property of the Company or a
Restricted Subsidiary pursuant to the terms of any such indenture, instrument or
agreement. No order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any governmental
or public body or authority, or any subdivision thereof, is required to
authorize, or is required in connection with the execution, delivery and
performance of, or the legality, validity, binding effect or enforceability of,
any of the Loan Documents.
5.4. Financial Statements. The December 31, 1996 audited consolidated
financial statements and the September 30, 1997 unaudited consolidated financial
statements of the Company and the Restricted Subsidiaries heretofore delivered
to the Banks were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present the consolidated financial condition and operations of the Company and
the Restricted Subsidiaries at such date and the consolidated results of their
operations for the period then ended.
5.5. Material Adverse Change. No material adverse change in the business,
financial condition, prospects or results of operations of the Company and the
Restricted Subsidiaries has occurred since the date of the financial statements
referred to in Section 5.4.
5.6. Taxes. The Company and the Restricted Subsidiaries have filed all
United States federal tax returns and all other tax returns which are required
to be filed and have paid all taxes due pursuant to said returns or pursuant to
any assessment received by the Company or any Subsidiary, except such taxes, if
any, as are being contested in good faith and as to which adequate reserves have
been provided. The United States income tax returns of the Company and the
Subsidiaries have been audited by the Internal Revenue Service through the
fiscal year ended December 31, 1993. No tax liens have been filed and no claims
are being asserted with respect to any such taxes. To the best of the Company's
knowledge and belief, the charges, accruals and reserves on the books of the
Company and the Restricted Subsidiaries in respect of any taxes or other
governmental charges are adequate.
5.7. Litigation. Except as disclosed in the Company's financial statements
referred to in Section 5.4 and the opinion of the Company's counsel referred to
in Section 4.1(e), there is no litigation or proceeding pending or, to the
knowledge of any of their officers, threatened against or affecting the Company
or any Restricted Subsidiary which might materially adversely affect the
business, financial condition or results of operations of the Company or the
ability of the Company to perform its obligations under the Loan Documents. No
material adverse change, as evidenced by the filing of a Form 8-K, in the
litigation referred to in the opinion of the Company's counsel referred to in
Section 4.1(e) has occurred since the date of this Agreement. The Company is
not, to the best of its knowledge and belief (i) in default with respect to any
order, writ, injunction or decree of any court or (ii) in default in any
material respect under any order, regulations (including but not limited to any
environmental regulation),
17
permit, license or demand of any federal, state, municipal or other governmental
agency, the consequences of which would materially and adversely affect the
business, properties or assets or the condition, financial or otherwise, of the
Company.
5.8. Subsidiaries. Schedule "1" hereto contains an accurate list of all of
the presently existing Subsidiaries of the Company, setting forth, among other
things, their respective jurisdictions of incorporation and the percentage of
their respective capital stock owned by the Company or other Subsidiaries and
whether each Subsidiary is a Restricted Subsidiary or an Unrestricted
Subsidiary. All of the issued and outstanding shares of capital stock of such
Subsidiaries have been duly authorized and issued and are fully paid and non-
assessable.
5.9. ERISA. The Unfunded Liabilities of all Plans do not in the aggregate
exceed $5,000,000. Each Plan complies in all material respects with all
applicable requirements of law and regulations and no Reportable Event has
occurred with respect to any Plan.
5.10. Accuracy of Information. No information, exhibit or report
furnished by the Company or any Subsidiary to the Agent or to any Bank in
connection with the negotiation of the Loan Documents contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein not misleading.
5.11. Regulation U. Margin stock (as defined in Regulation U) constitutes
less than 25% of those assets of the Company and its Subsidiaries which are
subject to any limitation on sale, pledge, or other restriction hereunder.
5.12. Material Agreements. Neither the Company nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction materially and adversely affecting its business,
properties or assets, operations or condition (financial or otherwise). Neither
the Company nor any Subsidiary is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in (i)
any agreement to which it is a party, which default might have a material
adverse effect on the business, properties or assets, operations, or condition
(financial or otherwise) of the Company and its Subsidiaries or (ii) any
agreement or instrument evidencing or governing Indebtedness.
5.13. Subordinated Indebtedness. The Obligations constitute senior
indebtedness which will be entitled to the benefits of the subordination
provisions of all outstanding Subordinated Indebtedness.
5.14. Compliance with Environmental Laws. Except as disclosed in the
Company's financial statements referred to in Section 5.4, the Company and its
Subsidiaries comply with all applicable Federal, state and local laws, statutes,
rules, regulations and ordinances relating to public health, safety or the
environment including, without limitation, relating to releases, discharges,
emissions or disposals to air, water, land or ground water, to the withdrawal or
use of ground water, to the use, handling or disposal of polychlorinated
biphenyls (PCBs), asbestos or urea formaldehyde, to the treatment, storage,
disposal or management of hazardous substances (including, without limitation,
petroleum, its derivatives, by-products or other hydrocarbons), to exposure to
toxic, hazardous or other controlled, prohibited or regulated substances, to the
transportation, storage, disposal, management or release of gases or liquid
substances, the failure to comply with which could have a materially adverse
effect on the Company, its Subsidiaries, their business and properties, taken as
a whole. The Company does not know of any liability of the Company or any
Subsidiary under the Comprehensive Environmental Response,
18
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986 (42 U.S.C. Section 9601 et seq.) which could
have a material adverse effect on the Company and its Subsidiaries on a
consolidated basis.
5.15. Compliance With Laws. The Company and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property, except for any failure
to comply with any of the foregoing which could not reasonably be expected to
have a material adverse effect on the Company and its Subsidiaries on a
consolidated basis.
5.16. Ownership of Properties. Except as set forth on Schedule 2, on the
date of this Agreement, the Company and its Subsidiaries will have good title,
free of all Liens other than those permitted by Section 6.14, to all of the
Property and assets reflected in the Company's most recent consolidated
financial statements provided to the Agent as owned by the Company and its
Subsidiaries.
5.17. Plan Assets; Prohibited Transactions. The Company is not an entity
deemed to hold "plan assets" within the meaning of 29 C.F.R. (S) 2510.3-101 of
an employee benefit plan (as defined in Section 3(3) of ERISA) which is subject
to Title I of ERISA or any plan (within the meaning of Section 4975 of the
Code), and neither the execution of this Agreement nor the making of Loans
hereunder gives rise to a prohibited transaction within the meaning of Section
406 of ERISA or Section 4975 of the Code.
5.18. Investment Company Act. Neither the Company nor any Subsidiary is
an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
5.19. Public Utility Holding Company Act. Neither the Company nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
ARTICLE VI
COVENANTS
---------
During the term of this Agreement, and until the Obligations are paid in
full, unless the Required Banks shall otherwise consent in writing:
6.1. Financial Reporting. The Company will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with generally accepted accounting principles ("GAAP"), and furnish to the
Banks:
(a) Annual Reports and Financial Statements. As soon as reasonably
possible, and in any event within 90 days after the close of each fiscal
year of the Company, (1) the balance sheet of the Company and the
Restricted Subsidiaries as of the end of such fiscal year, setting forth in
comparative form the corresponding figures as of the end of the preceding
fiscal year,
19
and (2) the statements of income, stockholders' equity and cash flows of
the Company and the Restricted Subsidiaries for such fiscal year, setting
forth in comparative form the corresponding figures for the preceding
fiscal year. Such balance sheet and statements shall be prepared in
reasonable detail and in accordance with Agreement Accounting Principles
and shall be prepared on a consolidated basis under the circumstances set
forth in the first paragraph following subsection (i) of this Section 6.1;
and such balance sheets and statements shall be accompanied by an opinion
of independent public accountants of recognized national standing
acceptable to the Banks, which opinion shall state that such financial
statements were prepared in accordance with GAAP. In addition, such
accountants will furnish to you a letter stating that in making their
examination of such financial statements nothing came to their attention
which caused them to believe that there was any Default by the Company in
the performance or observance of any covenant, condition or agreement of
the Company contained herein insofar as such covenants, conditions or
agreements pertain to accounting matters, provided that if in the course of
their regular auditing procedure such accountants become aware of any other
type of default, they shall disclose the same but such accountants shall
have no responsibility for ascertaining the existence of any such Default.
The Company agrees to supply you promptly with a copy of any letter,
certificate or other writing supplied by its independent public accountants
to any other person pertaining to whether such accountants have cause to
believe that there has been any default by the Company under any other
agreement or evidence of Indebtedness.
(b) Quarterly Financial Statements. As soon as reasonably possible,
and in any event within 60 days after the close of each of the first three
fiscal quarters of the Company, (1) the balance sheet of the Company and
its Restricted Subsidiaries as of the end of such quarter, setting forth in
comparative form the corresponding figures for the corresponding quarter of
the preceding fiscal year, and (2) the income and stockholders' equity and
cash flows statements of the Company and Restricted Subsidiaries for such
quarter and for the portion of the fiscal year ended with such quarter,
setting forth in comparative form the corresponding figures for the
corresponding periods of the preceding fiscal year, all in reasonable
detail (and prepared on a consolidated basis under the circumstances set
forth in the first paragraph following subsection (i) of this Section 6.1)
and certified as complete and correct by a principal financial officer of
the Company.
(c) Together with the financial statements required hereunder, a
compliance certificate in substantially the form of Exhibit "C" hereto
signed by its chief financial officer showing the calculations necessary to
determine compliance with this Agreement and stating that no Default or
Unmatured Default exists, or if any Default or Unmatured Default exists,
stating the nature and status thereof.
(d) During each fiscal year, within 30 days of receipt, a statement of
the Unfunded Liabilities of each Plan, certified as correct by an actuary
enrolled under ERISA.
(e) As soon as possible and in any event within 10 days after the
Company knows that any Reportable Event has occurred with respect to any
Plan, a statement, signed by the chief financial officer of the Company,
describing said Reportable Event and the action which the Company proposes
to take with respect thereto.
(f) Promptly upon the furnishing thereof to the shareholders of the
Company, copies of all financial statements, reports and proxy statements
so furnished.
20
(g) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which
the Company or any Restricted Subsidiary files with the Securities and
Exchange Commission.
(h) Promptly after the end of each fiscal quarter revised Schedules 1,
2 and 3 to the Agreement if there are any additions or deletions to those
Schedules.
(i) Such other information (including non-financial information) as
the Agent or any Bank may from time to time reasonably request.
If, and so long as, the Company has (i) one or more Restricted
Subsidiaries, the financial statements referred to in subsections (a) and (b) of
this Section 6.1 shall be on a consolidated basis prepared in accordance with
Agreement Accounting Principles, or (ii) one or more Unrestricted Subsidiaries,
the Company shall deliver to the Agent, promptly after receipt thereof, copies
of balance sheets and income and surplus and cash flows statements of each such
Subsidiary, prepared in accordance with Agreement Accounting Principles, which
are not included in the financial statements furnished pursuant to subsection
(a) of this Section 6.1, in the form delivered to the Company for the fiscal
year of each such Subsidiary.
6.2. Use of Proceeds. The Company will, and will cause each Restricted
Subsidiary to, use the proceeds of the Advances to finance Acquisitions, other
than Unfriendly Acquisitions, for working capital and general corporate
purposes. The Company will not, nor will it permit any Restricted Subsidiary
to, use any of the proceeds of the Loans to purchase or carry any "margin stock"
(as defined in Regulation U).
6.3. Interest Coverage Ratio. The Company and the Restricted Subsidiaries
will maintain a ratio of Consolidated Earnings Before Interest and Taxes to
Consolidated Interest Expense, as of the end of each fiscal quarter of the
Company, such that the ratio calculated for such fiscal quarter and the
preceding three fiscal quarters taken as one accounting period is at least 2.0
to 1.0.
6.4. Notice of Default. The Company will, and will cause each Restricted
Subsidiary to, give prompt notice in writing to the Banks of the occurrence of
any Default or Unmatured Default and of any other development, financial or
otherwise, which might materially adversely affect its business, properties or
affairs or the ability of the Company to repay the Obligations within five days
after the Company's senior management shall have the knowledge that an event
constituting a Default or Unmatured Default or such a development has occurred.
6.5. Conduct of Business. The Company will, and will cause each Restricted
Subsidiary to, carry on and conduct its business in the fields of manufacturing,
developing, producing and selling products which are primarily in the chemical
field and to do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its jurisdiction of
incorporation and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted except on those instances
in which the failure to maintain all such authority does not materially
adversely affect the business of the Company and the Restricted Subsidiaries
taken as a whole.
6.6. Taxes. The Company will, and will cause each Restricted Subsidiary
to, pay when due all taxes, assessments and governmental charges and levies upon
it or its income, profits or property,
21
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside.
6.7. Insurance. The Company will, and will cause each Restricted
Subsidiary to, maintain with financially sound and reputable insurance companies
insurance on all their property in such amounts and covering such risks as is
consistent with sound business practice, and the Company will furnish to any
Bank upon request full information as to the insurance carried.
6.8. Compliance with Laws. The Company will, and will cause each
Restricted Subsidiary to, comply with all laws, rules, regulations, orders,
writs, judgments, injunctions, decrees or awards to which it may be subject
except to the extent that such laws, rules, regulations, orders, writs,
judgments, decrees or awards (or the application of any thereof to the Company
or a Restricted Subsidiary thereof) are being contested by the Company by
appropriate proceedings provided that neither the Company nor any Restricted
Subsidiary shall be required to maintain all requisite authority to conduct its
business in each jurisdiction in which its business is conducted in those
instances where the failure to maintain all such authority does not materially
adversely affect the business or condition of the Company and the Restricted
Subsidiaries taken as a whole.
6.9. Maintenance of Properties. The Company will, and will cause each
Restricted Subsidiary to, do all things necessary to maintain, preserve, protect
and keep its properties in good repair, working order and condition, and make
all necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times except
to the extent that compliance with this Section 6.9 is made impossible by fire,
flood, earthquakes, storm, natural disaster, strikes, accidents, inability to
secure labor or other causes beyond the control of the Company and the
Restricted Subsidiaries.
6.10. Inspection. The Company will, and will cause each Restricted
Subsidiary to, permit the Banks, by their respective representatives and agents,
to inspect any of the properties, corporate books and financial records of the
Company and each Restricted Subsidiary, to examine and make copies of the books
of accounts and other financial records of the Company and each Restricted
Subsidiary, and to discuss the affairs, finances and accounts of the Company and
each Restricted Subsidiary with, and to be advised as to the same by, their
respective officers at such reasonable times and intervals as the Banks may
designate.
6.11. Dividends. The Company will not declare or pay, or set apart any
funds for the payment of, any dividends (other than dividends payable in common
stock of the Company) on any shares of capital stock of any class of the
Company, or apply any of its funds, property or assets to, or set apart any
funds, property or assets for, the purchase, redemption or other retirement of,
or make any other distribution, by reduction of capital or otherwise, in respect
of, any shares of capital stock of any class of the Company (collectively
referred to as "Restricted Payments"), unless, immediately after giving effect
to such action:
the sum of
(1) the amounts declared and paid or payable as, or set apart for,
dividends (other than dividends paid or payable in common stock of the
Company) on, or distributions (taken at cost to the Company or fair value
at time of distribution, whichever is higher) in respect of, all shares of
capital stock of all classes of the Company subsequent to December 31,
1996, and
22
(2) the excess, if any, of the amounts applied to, or set apart for,
the purchase, redemption or retirement of all shares of capital stock of
all classes of the Company subsequent to December 31, 1996, over the sum of
(i) such amounts as shall have been received as the net cash proceeds of
sales of shares of capital stock of all classes of the Company subsequent
to December 31, 1996, plus (ii) the aggregate principal amount of all
indebtedness of the Company and its subsidiaries converted into or
exchanged for shares of capital stock of the Company subsequent to December
31, 1996,
will not be in excess of (x) $30,000,000 plus (or minus in the case of a
deficit) (y) the consolidated net income of the Company and its Restricted
Subsidiaries accrued subsequent to December 31, 1996. The foregoing provisions
of this Section 6.11 to the contrary notwithstanding (i) the Company may pay any
dividend within 90 days of the date of its declaration if, on the date of
declaration, such dividend could properly have been paid within the limitations
of this Section 6.11 and (ii) the Company may pay regular dividends on or make
payments or purchases required to be made at the time when made by the terms of
any sinking fund, purchase fund or mandatory redemption requirement in respect
of any outstanding shares of preferred stock of the Company originally issued
for cash but all amounts so paid or applied pursuant to clauses (i) and (ii)
above shall be included in any subsequent computation of Restricted Payments
under this Section 6.11. The Company will not declare any dividend payable more
than 90 days after the date of declaration thereof. The Company will not
declare any dividend if a Default or Unmatured Default shall have occurred and
be continuing.
6.12. Indebtedness. (A) The Company will not create, incur, issue,
assume, permit to exist or become or be liable, contingently or otherwise, in
respect of any Current Indebtedness or Funded Indebtedness other than:
(1) Unsecured Current Indebtedness arising in the ordinary course of
business;
(2) Indebtedness represented by dividends declared as permitted by
Section 6.11, but not yet paid;
(3) Unsecured Current Indebtedness for borrowed money;
(4) Current Indebtedness representing amounts payable within one year
in respect of any Funded Indebtedness permitted by this Section 6.12;
(5) Funded Indebtedness, provided that Consolidated Funded
Indebtedness of the Company and the Restricted Subsidiaries at no time
exceeds an amount equal to 55% of Consolidated Capitalization, provided
further that for purposes of this Section 6.12 (A) (5) all obligations
incurred pursuant to Sections 6.18 (2), (3), and (4) shall constitute
Funded Indebtedness.
(B) Limitations on Restricted Subsidiaries. The Company will not cause,
suffer or permit any Restricted Subsidiary to:
(1) Create, incur, issue, assume or become or be liable, contingently
or otherwise, in respect of any Indebtedness except (a) indebtedness
existing at the time of becoming a Restricted Subsidiary, (b) indebtedness
to the Company or to another Restricted Subsidiary, (c) unsecured accounts
payable and other unsecured obligations (other than as a result of
borrowing)
23
incurred in the ordinary course of business of such Subsidiary, (d) secured
Funded Indebtedness incurred or assumed solely for the purpose of financing
the acquisition of property and secured only as permitted under clauses
(2), (3) and (4) of Section 6.18 and (e) indebtedness guaranteed by the
Company as permitted by Section 6.17, provided that the aggregate principal
amount of all such Indebtedness permitted by sub-clauses (a), (b), (d) and
(e) shall not at any time exceed 20% of Consolidated Tangible Net Worth
plus deferred taxes and investment tax credits of the Company and its
Restricted Subsidiaries; or
(2) Issue or sell any shares of its capital stock or securities
convertible into such capital stock except (a) issuance or sale of
directors' qualifying shares, (b) issuance or sale to the Company or to any
Wholly-Owned Restricted Subsidiary and (c) issuance or sale of additional
shares of stock of any such Subsidiary to any holders thereof entitled to
receive or purchase such additional shares through the declaration of a
stock dividend or through the exercise of preemptive rights; or
(3) Sell, assign, transfer or otherwise dispose of any shares of
capital stock of any class of any other Restricted Subsidiary, or any other
security of, or any Indebtedness owing to it by, any other Restricted
Subsidiary (except in each case to the Company or to a Wholly-Owned
Restricted Subsidiary) unless such sale, assignment, transfer or other
disposition shall meet all the conditions set forth in Section 6.20 which
would be applicable to a similar disposition made by the Company; or
(4) Consolidate with or merge into any other corporation or permit any
other corporation to merge into it, except a merger into or consolidation
with (a) the Company, (b) any Wholly-Owned Restricted Subsidiary or (c) any
other corporation if, immediately thereafter, the surviving corporation
shall be a Restricted Subsidiary and the Company shall be in full
compliance with all the terms and provisions of this Agreement; or
(5) Sell, lease, transfer or otherwise dispose of all or any
substantial part of its property and assets except (a) to the Company or
any Wholly-Owned Restricted Subsidiary or (b) in the case of a sale to any
other person, in compliance with all applicable requirements of Section
6.21 and Section 6.14; or
(6) make any Investments or commitments to make Investments except as
expressly permitted by Section 6.16.
Any corporation which becomes a Restricted Subsidiary after the date hereof
shall for all purposes of this Section 6.12(B) be deemed to have created,
assumed or incurred, at the time it becomes a Restricted Subsidiary, all
Indebtedness of such corporation existing immediately after it becomes a
Restricted Subsidiary.
6.13. Mergers and Consolidations. The Company will not consolidate with
or merge into any other corporation, or permit any other corporation to merge
into the Company, unless (a) the surviving or continuing corporation shall be
the Company, and (b) no Default or Unmatured Default shall exist at the time of,
or result from, such merger or consolidation, and (c) after giving effect to
such consolidation or merger the Company would be in compliance with Section
6.12(A)(5).
24
6.14. Sale of Assets. The Company will not, nor will it permit any
Restricted Subsidiary to, lease, sell or otherwise dispose of all, or a
substantial portion of, its property, assets or business to any other Person
except for:
(a) Sales of inventory in the ordinary course of business,
(b) In addition to sales of inventory permitted by Section 6.14 (a),
the Company and the Restricted Subsidiaries may sell, lease and otherwise
dispose of property, assets and businesses including the Phthalic Anhydride
Line provided that, after giving effect to any such sale, lease or other
disposition, the aggregate fair market value of all property, assets and
businesses (other than inventory sold in the ordinary course of business
and excluding the Phthalic Anhydride Line) sold, leased or otherwise
disposed of by the Company and the Restricted Subsidiaries during any one
fiscal year of the Company shall not exceed 15% of Consolidated Tangible
Assets as of the last day of the immediately preceding fiscal year of the
Company. Notwithstanding the above-referenced annual limitation on the fair
market value of all assets sold, leased or disposed of, excluding the
Phthalic Anhydride line, the aggregate amount of all assets, sold leased or
otherwise disposed of pursuant to this Section 6.14 after December 31, 1996
shall not exceed $50,000,000 on a cumulative basis.
The Company will not, nor will it permit any Restricted Subsidiary to, sell or
otherwise dispose of any notes receivable or accounts receivable, with or
without recourse.
6.15. Sale and Leaseback. The Company will not, nor will it permit any
Restricted Subsidiary to enter into any arrangement, directly or indirectly,
with any Person whereby the Company or any Restricted Subsidiary shall sell or
transfer any manufacturing plant or equipment owned or acquired by the Company
or any Restricted Subsidiary and then or thereafter rent or lease, as lessee,
such property or any part thereof, or other property which the Company or any
Restricted Subsidiary, as the case may be, intends to use for substantially the
same purpose or purposes as the property being sold or transferred, unless (a)
the lease covering such property shall be for a term of not less than three
years and (b) the Company could then incur Funded Indebtedness pursuant to
Section 6.12 in an amount not less than the capitalized value of the rentals
payable by the Company or any Restricted Subsidiary, as the case may be, under
such lease determined in accordance with Agreement Accounting Principles.
6.16. Investments. The Company will not, nor will it permit any
Restricted Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:
(a) Short-term obligations of, or fully guaranteed by, the United
States of America,
(b) Commercial paper rated A-l or better by Standard and Poor's
Corporation or P-l or better by ▇▇▇▇▇'▇ Investors Service, Inc.,
(c) Demand deposit accounts maintained in the ordinary course of
business,
(d) Certificates of deposit issued by and time deposits with
commercial banks (whether domestic or foreign) having capital and surplus
in excess of $50,000,000,
25
(e) Loans to officers and employees made in connection with their
relocation and purchase of housing,
(f) Loans to officers and employees in addition to those permitted by
Section 6.16(e) provided that the aggregate amount of such additional loans
shall not exceed $1,000,000 in the aggregate for the Company and the
Restricted Subsidiaries at any one time outstanding,
(g) Investments made by a Restricted Subsidiary in the Company or
another Restricted Subsidiary, and
(h) Investments of cash made by the Company or a Restricted Subsidiary
in Persons other than the Company or a Restricted Subsidiary provided,
however, that notwithstanding any of the foregoing, the Company will not,
nor will it permit any Restricted Subsidiary to make any Investment, or any
commitment to any Investment, if immediately after giving effect to any
such proposed Investment, whether made before or after the date hereof, the
aggregate amount of all of the Investments, (all such Investments to be
taken at the cost thereof at the time of making such Investment without
allowance for any subsequent write-offs or appreciation or depreciation
thereof, but less any amount repaid or recovered on account of capital or
principal), shall exceed 30% of the Consolidated Tangible Net Worth plus
deferred taxes and investment tax credits of the Company and its Restricted
Subsidiaries.
6.17. Guaranties. The Company will not, nor will it permit any Restricted
Subsidiary to, Guarantee any dividend, or Guarantee any obligation or
Indebtedness, enter into or remain liable upon any Guaranty of any other Person
other than (i) an obligation or Indebtedness of a Restricted Subsidiary which
such Subsidiary shall be authorized to incur pursuant to the provisions of this
Agreement exclusive of Indebtedness permitted by clause (iii) of this Section
6.17 and obligations or Indebtedness secured by mortgages or Liens permitted
under clauses (2), (3) and (4) of Section 6.18, (ii) Guaranties incurred in the
ordinary course of business of the Company or of a Restricted Subsidiary and
(iii) Indebtedness guaranteed by the Company to the extent permitted by Section
6.12(A)(5).
6.18. Liens. The Company will not, and will not permit any Restricted
Subsidiary to, create or incur or suffer to be created or incurred or to exist
any mortgage, Lien, security interest, charge or encumbrance of any kind on, or
pledge of, any property or assets of any kind, real or personal, tangible or
intangible, of the Company or any such Restricted Subsidiary, whether owned
before or after the date hereof, or acquire or agree to acquire any property or
assets of any kind under a conditional sale agreement or other title retention
agreement or file or permit the filing of any financing statement under the
Uniform Commercial Code or other similar notice under any other similar statute
without equally and ratably securing this Agreement; provided, however, that the
provisions of this Section 6.18 shall not prevent or restrict the creation,
incurring or existence of any of the following:
(1) Any mortgage, lien, security interest, charge or encumbrance on,
or pledge of, any property or assets of any Restricted Subsidiary to secure
Indebtedness owing by it to the Company or a Wholly-Owned Restricted
Subsidiary;
(2) Purchase money mortgages or other liens on real property
(including leaseholds) and fixtures thereon, acquired by the Company or any
Restricted Subsidiary, to secure the purchase price of such property (or to
secure Indebtedness incurred solely for the purpose of financing the
acquisition of any such property to be subject to such mortgage or other
lien), or
26
mortgages or other liens existing on any such property at the time of
acquisition of such property by the Company or by Restricted Subsidiary,
whether or not assumed, or any mortgage or Lien on real property of
Restricted Subsidiary, provided that at the time of the acquisition of the
property by the Company or a Restricted Subsidiary, or at the time of the
acquisition of the Restricted Subsidiary by the Company, as the case may
be, (a) the principal amount of the Indebtedness secured by each such
mortgage or Lien, plus the principal amount of all other indebtedness
secured by mortgages or Liens on the same property, shall not exceed 75% of
the fair value thereof (without deduction of the Indebtedness secured by
mortgages or Liens on such property) at the time of the acquisition thereof
by the Company or Restricted Subsidiary, whichever is the lesser, (b) every
mortgage or Lien shall apply only to the property originally subject
thereto and fixed improvements constructed thereon.
(3) Refundings or extensions of the mortgages or Liens permitted in
the foregoing subsection 6.18(2) for amounts not exceeding the principal
amounts of the indebtedness so refunded or extended at the time of the
refunding or extension thereof, and applying only to the same property
theretofore subject to the same and fixed improvements constructed thereon;
(4) the owning or acquiring or agreeing to acquire machinery or
equipment useful for the business of the Company or any Restricted
Subsidiary subject to or upon chattel mortgages or conditional sale
agreements or other title retention agreements;
(5) Deposits, liens or pledges to enable the Company or any Restricted
Subsidiary to exercise any privilege or license, or to secure payments of
workmen's compensation, unemployment insurance, old age pensions or other
social security, or to secure the performance of bids, tenders, contracts
(other than for the payment of money) or leases to which the Company or any
Restricted Subsidiary is a party, or to secure public or statutory
obligations of the Company or any Restricted Subsidiary, or to secure
surety, stay or appeal bonds to which the Company or any Restricted
Subsidiary is a party, but, as to all of the foregoing, only if the same
shall arise and continue in the ordinary course of business; or other
similar deposits or pledges made and continued in the ordinary course of
business;
(6) Mechanic's, workmen's, repairmen's or carriers' Liens, but only if
arising, and only so long as continuing, in the ordinary course of
business; or other similar Liens arising and continuing in the ordinary
course of business; or deposits or pledges in the ordinary course of
business to obtain the release of any such Liens;
(7) Liens arising out of judgments or awards against the Company or
any Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary shall in good faith be prosecuting an appeal or
proceedings for review; or liens incurred by the Company or any such
Restricted Subsidiary for the purpose of obtaining a stay or discharge in
the course of any legal proceeding to which the Company or such Restricted
Subsidiary is a party;
(8) Liens for taxes not yet subject to penalties for non-payment or
contested in good faith where adequate reserves have been set aside, or
minor survey exceptions, or minor encumbrances, easements or reservations
of, or rights of others for, rights of way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or
other restrictions as to the use of real properties, which encumbrances,
easements, reservations, rights and restrictions do not in the aggregate
materially detract from the value of said properties or
27
materially impair their use in the operation of the business of the Company
or of such Restricted Subsidiary owning the same;
(9) Liens in favor of the United States of America or any department
or agency thereof or in favor of a prime contractor under a United States
Government contract, and resulting from the acceptance of progress or
partial payments under United States Government contracts or subcontracts
thereunder;
(10) Inchoate liens arising under the ERISA to secure contingent
liabilities; and
(11) Any arrangement permitted by Section 6.15 of Article VI.
provided, however, that (i) the aggregate amount of all liens permitted by
Section 6.18(2) and Sections 6.18(3) and 6.18(4) shall not exceed an amount
equal to 15% of Consolidated Tangible Net Worth plus deferred taxes and
investment tax credits and (ii) the sum, without duplication of (x) the
aggregate unpaid principal amount of all Indebtedness of the Company or any
Restricted Subsidiary secured pursuant to the provisions of Section 6.18(2),
6.18(3) and 6.18(4) and (y) the aggregate unpaid principal amount of all
Indebtedness of Restricted Subsidiaries permitted by Sections 6.12(B)(1)(a),
(b), (d) and (e) shall not at any time exceed 30% of Consolidated Tangible Net
Worth plus deferred taxes and investment tax credits.
6.19. Purchase of Stocks. The Company will not, nor will it permit any
Restricted Subsidiary to extend credit to others for the purpose of purchasing
or carrying any "margin stock" (as defined in Regulation U) or use any of the
proceeds of the loans made under this Agreement (a) to purchase or carry any
"margin stock" if, after giving effect to such purchase, more that 25% of the
consolidated assets of the Company and the Restricted Subsidiaries subject to
Section 6.14 or Section 6.18 consist of "margin stock" or (b) to acquire any
security in any transaction which is subject to Sections 13 and 14 of the
Securities Exchange Act of 1934.
6.20. Limitations on Dispositions of Stock or Indebtedness of Restricted
Subsidiaries. The Company will not sell, assign, transfer or otherwise dispose
of (except to a wholly-owned Restricted Subsidiary) any shares of capital stock
of any class of any Restricted Subsidiary, or any other security of, or any
Indebtedness owing to it by, any such Restricted Subsidiary, unless (i) all of
the capital stock and other securities and the entire Indebtedness of such
Restricted Subsidiary at the time owned by the Company and by all its other
Restricted Subsidiaries shall be sold, assigned, transferred or otherwise
disposed of, at the same time, for cash, (ii) such Restricted Subsidiary shall
not, at the time of such sale, assignment, transfer or other disposition, own
either (a) any shares of capital stock of any class or any other security or any
Indebtedness of any other Restricted Subsidiary of the Company which is not
being simultaneously disposed of as permitted by this Section 6.20 or (b) any
Indebtedness of the Company, and (iii) such sales, assignment or transfer is
permitted by Section 6.13 or Section 6.14 hereof.
6.21. Affiliates. The Company will not, and will not permit any
Restricted Subsidiary to, enter into any transaction (including, without
limitation, the purchase or sale of any Property or service) with, or make any
payment or transfer to, any Affiliate except in the ordinary course of business
and pursuant to the reasonable requirements of the Company's or such Restricted
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Company or such Restricted Subsidiary than the Company or such Restricted
Subsidiary would obtain in a comparable arms-length transaction.
28
ARTICLE VII
DEFAULTS
--------
The occurrence of any one or more of the following events shall constitute
a Default:
7.1. Any representation or warranty made or deemed made by or on behalf of
the Company or any Restricted Subsidiary to the Banks or the Agent under or in
connection with this Agreement, any Loan, or any certificate or information
delivered in connection with this Agreement or any other Loan Document shall be
materially false as of the date on which made or deemed made.
7.2. Nonpayment of principal of any Note when due, or nonpayment of
interest upon any Note or of any commitment fee or other obligations under any
of the Loan Documents within five days after the same becomes due.
7.3. The breach by the Company of any of the terms or provisions of Article
VI.
7.4. The breach by the Company (other than a breach which constitutes a
Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of this
Agreement which is not remedied within five days after written notice from the
Agent or any Bank.
7.5. Failure of the Company or any Restricted Subsidiary to pay any
Indebtedness in a principal amount greater than $2,500,000 when due; or the
default by the Company or any Restricted Subsidiary in the performance of any
term, provision or condition contained in any agreement under which any
Indebtedness was created or is governed, the effect of which is to cause, or to
permit the holder or holders of such Indebtedness to cause, such Indebtedness to
become due prior to its stated maturity; or any Indebtedness shall be declared
to be due and payable or required to be prepaid (other than by a regularly
scheduled payment) prior to the stated maturity thereof.
7.6. The Company or any Restricted Subsidiary shall (a) have an order for
relief entered with respect to it under the Federal Bankruptcy Code, (b) not
pay, or admit in writing its inability to pay, its debts generally as they
become due, (c) make an assignment for the benefit of creditors, (d) apply for,
seek, consent to, or acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any substantial part
of its property, (e) institute any proceeding seeking an order for relief under
the Federal Bankruptcy Code or seeking to adjudicate it a bankrupt or insolvent,
or seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other pleading denying the material allegations of any such proceeding
filed against it, (f) take any corporate action to authorize or effect any of
the foregoing actions set forth in this Section 7.6 or (g) fail to contest in
good faith any appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Company or any
Restricted Subsidiary, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Company or any Restricted Subsidiary or any
substantial part of its property, or a proceeding described in Section 7.6(e)
shall be instituted against the Company or any Restricted Subsidiary and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of 30 consecutive days.
29
7.8. Any court, government or governmental agency shall condemn, seize or
otherwise appropriate, or take custody or control of all or any substantial
portion of the property of the Company or any Restricted Subsidiary.
7.9. The Company or any Subsidiary shall fail within 60 days to pay, bond
or otherwise discharge any judgment or order for the payment of money in excess
of $250,000, which is not stayed on appeal or otherwise being appropriately
contested in good faith.
7.10. The Unfunded Liabilities of all Plans shall exceed in the aggregate
$5,000,000 or any Reportable Event shall occur in connection with any Plan.
7.11. Any Person or Persons other than Stepan Family acting in concert
shall acquire beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934) of
thirty percent (30%) or more of the outstanding shares of voting stock of the
Company; or during any period of twelve (12) consecutive months, commencing
before or after the Closing Date, individuals who at the beginning of such
twelve-month period were directors of the Company cease for any reason to
constitute a majority of the board of directors of the Company.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
----------------------------------------------
8.1. Acceleration. If any Default described in Section 7.6 or 7.7 occurs,
the obligations of the Banks to make Loans hereunder shall automatically
terminate and the Obligations shall immediately become due and payable without
any election or action on the part of the Agent or any Bank. If any other
Default occurs, the Required Banks may terminate or suspend the obligations of
the Banks to make Loans hereunder, or declare the Obligations to be due and
payable, or both, whereupon the Obligations shall become immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which the Company hereby expressly waives.
8.2. Amendments. Subject to the provisions of this Article VIII, the
Required Banks (or the Agent with the consent in writing of the Required Banks)
and the Company may enter into agreements supplemental hereto for the purpose of
adding or modifying any provisions to the Loan Documents or changing in any
manner the rights of the Banks or the Company hereunder or waiving any Default
hereunder; provided, however, that no such supplemental agreement shall, without
the consent of all of the Banks:
(i) Extend the final maturity of any Loan or forgive all or any portion
of the principal amount thereof, or reduce the rate or extend the
time of payment of interest or fees thereon.
(ii) Reduce the percentage specified in the definition of Required Banks.
(iii) Extend or reduce the amount or extend the payment date for, the
mandatory payments required under Section 2.4, or increase the amount
of the Commitment of any Bank hereunder, or permit the Company to
assign its rights under this Agreement.
30
(iv) Amend this Section 8.2.
8.3. Preservation of Rights. No delay or omission of the Banks or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
the Company to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Banks required pursuant to Section 8.2, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Banks until the Obligations have been paid in
full.
ARTICLE IX
GENERAL PROVISIONS
------------------
9.1. Survival of Representations. All representations and warranties of
the Company contained in this Agreement shall survive delivery of the Notes and
the making of the Loans herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to the
contrary notwithstanding, no Bank shall be obligated to extend credit to the
Company in violation of any limitation or prohibition provided by any applicable
statute or regulation.
9.3. Taxes. Any taxes (excluding income taxes) payable or ruled payable by
Federal or State authority in respect of the Loan Documents shall be paid by the
Company, together with interest and penalties, if any.
9.4. Choice of Law. The Loan Documents (other than those containing a
contrary express choice of law provision) shall be construed in accordance with
the internal laws (and not the law of conflicts) of the State of Illinois, but
giving effect to federal laws applicable to national and federally insured
banks. The Company hereby irrevocably submits to the non-exclusive jurisdiction
of any United States federal or Illinois state court sitting in Chicago in any
action or proceedings arising out of or relating to any Loan Documents and the
Company hereby irrevocably agrees that all claims in respect of such action or
proceeding may be heard and determined in any such court. The Company hereby
waives any right to a jury trial in any action arising hereunder.
9.5. Headings. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
9.6. Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Company, the Agent and the Banks and supersede all prior
agreements and understandings among the Company, the Agent and the Banks
relating to the subject matter thereof other than the fee letter described in
Section 10.13.
31
9.7. Several Obligations. The respective obligations of the Banks
hereunder are several and not joint and no Bank shall be the partner or agent of
any other (except to the extent to which the Agent is authorized to act as
such). The failure of any Bank to perform any of its obligations hereunder
shall not relieve any other Bank from any of its obligations hereunder. This
Agreement shall not be construed so as to confer any right or benefit upon any
Person other than the parties to this Agreement and their respective successors
and assigns, provided, however, that the parties hereto expressly agree that the
Arranger shall enjoy the benefits of the provisions of Section 9.8, 9.12 and
10.11 to the extent specifically set forth therein and shall have the right to
enforce such provisions on its own behalf and in its own name to the same extent
as if it were a party to this Agreement.
9.8. Expenses; Indemnification. The Company shall reimburse the Agent, the
Arranger and the Banks for any costs, internal charges and out-of-pocket
expenses (including attorneys' fees and time charges of attorneys for the Agent,
the Arranger and the Banks, which attorneys may be employees of the Agent, the
Arranger or the Banks) paid or incurred by the Agent, the Arranger or any Bank
in connection with the preparation, review, execution, delivery, amendment,
modification, administration, collection and enforcement of the Loan Documents.
The Company further agrees to indemnify the Agent and each Bank, its directors,
officers and employees against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all expenses
of litigation or preparation therefor whether or not the Agent, the Arranger or
any Bank is a party thereto) which any of them may pay or incur arising out of
or relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Loan hereunder. The obligations of the
Company under this Section shall survive the termination of this Agreement.
9.9. Numbers of Documents. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Banks.
9.10. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
9.11. Severability of Provisions. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.12. Nonliability of Banks. The relationship between the Company on the
one hand and the Banks and the Agent on the other hand shall be solely that of
borrower and lender. Neither the Agent, the Arranger nor any Bank shall have
any fiduciary responsibilities to the Company. Neither the Agent, the Arranger
nor any Bank undertakes any responsibility to the Company to review or inform
the Company of any matter in connection with any phase of the Company's business
or operations. The Company agrees that neither the Agent, the Arranger nor any
Bank shall have liability to the Company (whether sounding in tort, contract or
otherwise) for losses suffered by the Company in connection with, arising out
of, or in any way related to, the transactions contemplated and the relationship
established by the Loan Documents, or any act, omission or event occurring in
connection therewith, unless it is determined in a final non-appealable judgment
by a court of competent jurisdiction that such losses
32
resulted from the gross negligence or willful misconduct of the party from which
recovery is sought. Neither the Agent, the Arranger nor any Bank shall have any
liability with respect to, and the Company hereby waives, releases and agrees
not to ▇▇▇ for, any special, indirect or consequential damages suffered by the
Company in connection with, arising out of, or in any way related to the Loan
Documents or the transactions contemplated thereby.
ARTICLE X
THE AGENT
---------
10.1. Appointment; Nature of Relationship. The First National Bank of
Chicago is hereby appointed by each of the Banks as its contractual
representative (herein referred to as the "Agent") hereunder and under each
other Loan Document, and each of the Banks irrevocably authorizes the Agent to
act as the contractual representative of such Bank with the rights and duties
expressly set forth herein and in the other Loan Documents. The Agent agrees to
act as such contractual representative upon the express conditions contained in
this Article X. Notwithstanding the use of the defined term "Agent," it is
expressly understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Bank by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Banks with only those duties as are expressly set forth in this Agreement
and the other Loan Documents. In its capacity as the Banks' contractual
representative, the Agent (i) does not hereby assume any fiduciary duties to any
of the Banks, (ii) is a "representative" of the Banks within the meaning of
Section 9-105 of the Uniform Commercial Code and (iii) is acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Banks hereby agrees to assert no claim against the Agent on any agency theory or
any other theory of liability for breach of fiduciary duty, all of which claims
each Bank hereby waives.
10.2. Powers. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties to the Banks, or any obligation to the Banks
to take any action thereunder except any action specifically provided by the
Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Company, the Banks or any
Bank for any action taken or omitted to be taken by it or them hereunder or
under any other Loan Document or in connection herewith or therewith except to
the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent nor
any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into, or verify (a) any statement, warranty
or representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Bank; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any
33
Default or Unmatured Default; (e) the validity, enforceability, effectiveness,
sufficiency or genuineness of any Loan Document or any other instrument or
writing furnished in connection therewith; or (f) the financial condition of the
Company or of any of the Company's Subsidiaries. The Agent shall have no duty to
disclose to the Banks information that is not required to be furnished by the
Company to the Agent at such time, but is voluntarily furnished by the Company
to the Agent (either in its capacity as Agent or in its individual capacity).
10.5. Action on Instructions of Banks. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Banks, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Banks. The Banks hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Banks. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Banks pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Banks, except as to money or securities received by it or its authorized agents,
for the default or misconduct of any such agents or attorneys-in-fact selected
by it with reasonable care. The Agent shall be entitled to advice of counsel
concerning the contractual arrangement between the Agent and the Banks and all
matters pertaining to the Agent's duties hereunder and under any other Loan
Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Banks agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Company for which the Agent is entitled to reimbursement by
the Company under the Loan Documents, (ii) for any other reasonable expenses
incurred by the Agent on behalf of the Banks, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents and (iii) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of the Loan Documents or
any other document delivered in connection therewith or the transactions
contemplated thereby or the enforcement of any of the terms of the Loan
Documents or of any such other documents, provided that no Bank shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the Agent. The obligations of the Banks under this
Section 10.8 shall survive payment of the Obligations and termination of this
Agreement.
34
10.9. Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Unmatured Default hereunder unless
the Agent has received written notice from a Bank or the Company referring to
this Agreement describing such Default or Unmatured Default and stating that
such notice is a "notice of default". In the event that the Agent receives such
a notice, the Agent shall give prompt notice thereof to the Banks.
10.10. Rights as a Bank. In the event the Agent is a Bank, the Agent shall
have the same rights and powers hereunder and under any other Loan Document with
respect to its Commitment and its Loans as any Bank and may exercise the same as
though it were not the Agent, and the term "Bank" or "Banks" shall, at any time
when the Agent is a Bank, unless the context otherwise indicates, include the
Agent in its individual capacity. The Agent and its Affiliates may accept
deposits from, lend money to, and generally engage in any kind of trust, debt,
equity or other transaction, in addition to those contemplated by this Agreement
or any other Loan Document, with the Company or any of its Subsidiaries in which
the Company or such Subsidiary is not restricted hereby from engaging with any
other Person.
10.11. Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Bank and based on the financial statements prepared by the Company and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Bank also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger or any other Bank 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 and the other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving written
notice thereof to the Banks and the Company, such resignation to be effective
upon the appointment of a successor Agent or, if no successor Agent has been
appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Banks, such removal to
be effective on the date specified by the Required Banks. Upon any such
resignation or removal, the Required Banks shall have the right to appoint, on
behalf of the Company and the Banks, a successor Agent. If no successor Agent
shall have been so appointed by the Required Banks within thirty days after the
resigning Agent's giving notice of its intention to resign, then the resigning
Agent may appoint, on behalf of the Company and the Banks, a successor Agent.
Notwithstanding the previous sentence, the Agent may at any time without the
consent of the Company or any Bank, appoint any of its Affiliates which is a
commercial bank as a successor Agent hereunder. If the Agent has resigned or
been removed and no successor Agent has been appointed, the Banks may perform
all the duties of the Agent hereunder and the Company shall make all payments in
respect of the Obligations to the applicable Bank and for all other purposes
shall deal directly with the Banks. No successor Agent shall be deemed to be
appointed hereunder until such successor Agent has accepted the appointment. Any
such successor Agent shall be a commercial bank having capital and retained
earnings of at least $100,000,000. 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, privileges and duties
of the resigning or removed Agent. Upon the effectiveness of the resignation or
removal of the Agent, the resigning or removed Agent shall be discharged from
its duties and obligations hereunder and under the Loan Documents. After the
effectiveness of the resignation or removal of an Agent, the provisions of this
Article X shall continue in effect for the benefit of such Agent in respect of
any actions taken or omitted to be taken by it while it was acting as the Agent
hereunder and under the other Loan Documents. In the event that there is a
successor to the Agent by merger, or the
35
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term "Corporate Base Rate" as used in this Agreement
shall mean the prime rate, base rate or other analogous rate of the new Agent.
10.13. Agent's Fee. The Company agrees to pay to the Agent, for its own
account, the fees agreed to by the Company and the Agent pursuant to that
certain letter agreement dated October 24, 1997, or as otherwise agreed from
time to time.
10.14. Delegation to Affiliates. The Company and the Banks agree that the
Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
------------------------
11.1. Setoff. In addition to, and without limitation of, any rights of
the Banks under applicable law, if the Company becomes insolvent, however
evidenced, or any Default or Unmatured Default occurs, any indebtedness from any
Bank to the Company (including all account balances, whether provisional or
final and whether or not collected or available) may be offset and applied
toward the payment of the Obligations owing to such Bank, whether or not the
Obligations, or any part hereof, shall then be due. The Company agrees that any
holder of a participation in a loan may, to the fullest extent permitted by law,
exercise all its rights of payment with respect to such participation as if such
holder were the direct creditor of the Company in the amount of the
participation.
11.2. Ratable Payments. If any Bank, whether by setoff or otherwise, has
payment made to it upon its Loans in a greater proportion than that received by
any other Bank, such Bank agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Banks so that after such purchase each Bank will
hold its ratable proportion of Loans. If any Bank, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to set off, such Bank agrees, promptly upon demand, to take such action
necessary such that all Banks share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made.
ARTICLE XII
NOTICES
-------
12.1. Giving Notice. Any notice required or permitted to be given under
this Agreement may be, and shall be deemed, given when deposited in the United
States mail (except notices given pursuant to Article II which shall not be
deemed effective until received by the Banks or the Agent), postage
36
prepaid, or by telegraph or telex when delivered to the appropriate office for
transmission, charges prepaid, addressed to the Company, the Banks or the Agent
at the addresses indicated below their signatures to this Agreement.
12.2. Change of Address. The Company, the Agent and any Bank may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XIII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
-------------------------------------------------
13.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Company and the
Banks and their respective successors and assigns, except that (i) the Company
shall not have the right to assign its rights or obligations under the Loan
Documents and (ii) any assignment by any Bank must be made in compliance with
Section 13.3.1. Notwithstanding clause (ii) of this Section, any Bank may at any
time, without the consent of the Company or the Agent, assign all or any portion
of its rights under this Agreement and any Note to a Federal Reserve Bank;
provided, however, that no such assignment to a Federal Reserve Bank shall
release the transferor Bank from its obligations hereunder. The Agent may treat
the Person which made any Loan or which holds any Note as the owner thereof for
all purposes hereof unless and until such Person complies with Section 13.3.1.
in the case of an assignment thereof or, in the case of any other transfer, a
written notice of the transfer is filed with the Agent. Any assignee or
transferee of the rights to any Loan or any Note agrees by acceptance of such
transfer or assignment to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the owner of the
rights to any Loan (whether or not a Note has been issued in evidence thereof),
shall be conclusive and binding on any subsequent holder, transferee or assignee
of the rights to such Loan.
13.2. Participations.
--------------
13.2.1. Permitted Participants; Effect. Any Bank may, in the
ordinary course of its business and in accordance with applicable law, at
any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Bank, any Note held by
such Bank, any Commitment of such Bank or any other interest of such Bank
under the Loan Documents. In the event of any such sale by a Bank of
participating interests to a Participant, such Bank's obligations under the
Loan Documents shall remain unchanged, such Bank shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Bank shall remain the owner of its Loans and the holder
of any Note issued to it in evidence thereof for all purposes under the
Loan Documents, all amounts payable by the Company under this Agreement
shall be determined as if such Bank had not sold such participating
interests, and the Company and the Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and
obligations under the Loan Documents.
13.2.2. Voting Rights. Each Bank shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which forgives
principal, interest or fees
37
or reduces the interest rate or fees payable with respect to any such Loan or
Commitment, extends the Facility Termination Date, postpones any date fixed for
any regularly-scheduled payment of principal of, or interest or fees on, any
such Loan or Commitment, releases any guarantor of any such Loan or releases all
or substantially all of the collateral, if any, securing any such Loan.
13.2.3. Benefit of Setoff. The Company agrees that each Participant
shall be deemed to have the right of setoff provided in Section 11.1 in respect
of its participating interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest were owing directly
to it as a Bank under the Loan Documents, provided that each Bank shall retain
the right of setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Banks agree to share with
each Participant, and each Participant, by exercising the right of setoff
provided in Section 11.1, agrees to share with each Bank, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with Section 11.2 as if each Participant were a Bank.
13.3. Assignments.
-----------
13.3.1. Permitted Assignments. Any Bank may, in the ordinary course of
its business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("Purchasers") all or any part of its rights and
obligations under the Loan Documents. Such assignment shall be substantially in
the form of Exhibit D or in such other form as may be agreed to by the parties
thereto. The consent of the Company and the Agent shall be required prior to an
assignment becoming effective with respect to a Purchaser which is not a Bank or
an Affiliate thereof; provided, however, that if a Default has occurred and is
continuing, the consent of the Company shall not be required. Such consent shall
not be unreasonably withheld or delayed. Each such assignment shall (unless each
of the Company and the Agent otherwise consents) be in an amount not less than
the lesser of (i) $10,000,000 or (ii) the remaining amount of the assigning
Bank's Commitment (calculated as at the date of such assignment).
13.3.2. Effect; Effective Date. Upon (i) delivery to the Agent of a
notice of assignment, substantially in the form attached as Exhibit I to Exhibit
D (a "Notice of Assignment"), together with any consents required by Section
13.3.1, and (ii) payment of a $3,000 fee to the Agent for processing such
assignment, such assignment shall become effective on the effective date
specified in such Notice of Assignment. The Notice of Assignment shall contain a
representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the Commitment and Loans under the applicable
assignment agreement are "plan assets" as defined under ERISA and that the
rights and interests of the Purchaser in and under the Loan Documents will not
be "plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Bank party to this
Agreement and any other Loan Document executed by or on behalf of the Banks and
shall have all the rights and obligations of a Bank under the Loan Documents, to
the same extent as if it were an original party hereto, and no further consent
or action by the Company, the Banks or the Agent shall be required to release
the transferor Bank with respect to the percentage of the Aggregate Commitment
and Loans assigned to such Purchaser. Upon the consummation of any assignment to
a Purchaser pursuant to this Section 9.1(f), the transferor Bank, the Agent and
the Company shall, if the transferor Bank or the Purchaser desires that its
Loans be evidenced by Notes, make appropriate arrangements so that new Notes or,
as appropriate, replacement Notes are issued to such transferor Bank and new
Notes or, as appropriate, replacement Notes, are issued to such
38
Purchaser, in each case in principal amounts reflecting their respective
Commitments, as adjusted pursuant to such assignment.
13.4. Dissemination of Information. The Company authorizes each Bank
to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "Transferee")
and any prospective Transferee any and all information in such Bank's
possession concerning the creditworthiness of the Company and its
Subsidiaries, including without limitation any information contained in any
Reports.
13.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the
transferor Bank shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of Section
3.4(iv).
ARTICLE XIV
COUNTERPARTS
------------
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Company, the Agent and the Banks and
each party has notified the Agent by telex or telephone, that it has taken such
action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
------------------------------------------------------------
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2. CONSENT TO JURISDICTION. THE COMPANY HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE COMPANY HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE AGENT OR ANY BANK TO BRING PROCEEDINGS AGAINST THE COMPANY IN
THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE COMPANY
AGAINST THE AGENT OR ANY BANK OR
39
ANY AFFILIATE OF THE AGENT OR ANY BANK INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
15.3. WAIVER OF JURY TRIAL. THE COMPANY, THE AGENT AND EACH BANK HEREBY
WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
IN WITNESS WHEREOF, the Company, the Banks and the Agent have executed this
Agreement as of the date first above written.
Commitments STEPAN COMPANY
-----------
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Title: Vice President
Finance
▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasury Department
$22,500,000 THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Title: Senior Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
40
$22,500,000 ▇▇▇▇▇▇ TRUST AND SAVINGS BANK
By: /s/ R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------
Title: Vice President
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
===========
$45,000,000
41
PRICING SCHEDULE
=======================================================================================
Applicable Level I Level II Level III
Margin Status Status Status
---------------------------------------------------------------------------------------
Eurodollar Rate .35% .40% .50%
=======================================================================================
=======================================================================================
Applicable Level I Level II Level III
Fee Rate Status Status Status
=======================================================================================
Commitment .125% .15% .175%
Fee
=======================================================================================
For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:
"Financials" means the annual or quarterly financial statements of the
Company delivered pursuant to Section 6.1(a) or (b).
"Level I Status" exists at any date if, as of the last day of the fiscal
quarter of the Company referred to in the most recent Financials, the ratio of
Consolidated Funded Indebtedness to Consolidated Capitalization is less than .40
to 1.00.
"Level II Status" exists at any date if, as of the last day of the fiscal
quarter of the Company referred to in the most recent Financials, (i) the
Company has not qualified for Level I Status and (ii) the ratio of Consolidated
Funded Indebtedness to Consolidated Capitalization is less than or equal to .50
to 1.00.
"Level III Status" exists at any date if the Company has not qualified for
Level I Status or Level II Status.
"Status" means either Level I Status, Level II Status or Level III Status.
The Applicable Margin and Applicable Fee Rate shall be determined in
accordance with the foregoing table based on the Company's Status as reflected
in the then most recent Financials. Adjustments, if any, to the Applicable
Margin or Applicable Fee Rate shall be effective five Business Days after the
Agent has received the applicable Financials. If the Company fails to deliver
the Financials to the Agent at the time required pursuant to Section 6.1, then
the Applicable Margin and Applicable Fee Rate shall be the highest Applicable
Margin and Applicable Fee Rate set forth in the foregoing table until five days
after such Financials are so delivered.
42
EXHIBIT "A"
NOTE
$____________ January 9, 1998
On the Facility Termination Date Stepan Company, a Delaware corporation
(the "Company"), promises to pay to the order of _______________________________
(the "Bank") the lesser of the principal sum of ___________________________
Dollars or the aggregate unpaid principal amount of all Loans made by the Bank
to the Company pursuant to Section 2.1 of the Revolving Credit Agreement (the
"Agreement") hereinafter referred to, in immediately available funds at the main
office of The First National Bank of Chicago in Chicago, Illinois, as Agent,
together with interest on the unpaid principal amount hereof at the rates and on
the dates set forth in the Agreement.
The Bank shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to the
benefits of, the Revolving Credit Agreement, dated as of January 9, 1998 among
the Company, The First National Bank of Chicago, individually and as Agent, and
the banks named therein, to which Agreement, as it may be amended from time to
time, reference is hereby made for a statement of the terms and conditions under
which this Note may be prepaid or its maturity date accelerated. Capitalized
terms used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
STEPAN COMPANY
By:
--------------------------
Title:
-----------------------
43
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF STEPAN COMPANY,
DATED JANUARY 9, 1998
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
---- --------- ----------- --------- -------
44
EXHIBIT "B"
January 9, 1998
The Banks who are parties to the
Credit Agreement described below.
Gentlemen:
I am counsel for Stepan Company (the "Company") and have represented the
Company in connection with its execution and delivery of a Credit Agreement
among the Company, The First National Bank of Chicago, individually and as
Agent, and the Banks named therein, providing for Advances in an aggregate
principal amount not exceeding $45,000,000 at any one time outstanding and dated
as of January 9, 1998 (the "Agreement"). All capitalized terms used in this
opinion shall have the meanings attributed to them in the Agreement.
I have examined the Company's articles of incorporation, by-laws, resolutions,
the Loan Documents and such other matters of fact and law which we deem
necessary in order to render this opinion. Based upon the foregoing, it is my
opinion that:
l. The Company and each Subsidiary are corporations duly incorporated,
validly existing and in good standing under the laws of their states of
incorporation and have all requisite authority to conduct their business in each
jurisdiction in which their business is conducted.
2. The execution and delivery of the Loan Documents by the Company and the
performance by the Company of the Obligations have been duly authorized by all
necessary corporate action and proceedings on the part of the Company and will
not:
(a) require any consent of the Company's shareholders;
(b) violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Company or any Subsidiary or the Company's or
any Subsidiary's articles of incorporation or by-laws or any indenture,
instrument or agreement binding upon the Company or any Subsidiary; or
(c) result in, or require, the creation or imposition of any Lien pursuant
to the provisions of any indenture, instrument or agreement binding upon the
Company or any Subsidiary.
3. The Loan Documents have been duly executed and delivered by the Company
and constitute legal, valid and binding obligations of the Company enforceable
in accordance with their terms except to the extent the enforcement thereof may
be limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally and subject also to the availability of equitable
remedies if equitable remedies are sought.
45
4. Except as disclosed in the Company's financial statements referred to in
Section 5.4 of the Credit Agreement,and as disclosed herein, there is no
litigation or proceeding against the Company or any Subsidiary which, if
adversely determined, would materially affect the business or condition of the
Company or any Subsidiary. On December 9th, 296 lawsuits were filed on
behalf of 484 plaintiffs from the Boroughs of Maywood, ▇▇▇▇▇▇▇▇ Park, and Lodi
New Jersey alleging cancer and fear of cancer allegedly due to exposure to
thorium and other chemical contaminants. The Company believes it has adequate
defenses to these actions; that it may have insurance coverage for part or all
of its defense costs and indemnity costs if any, and therefore at this time
cannot estimate what its liabilities, if any, will be.
5. No approval, authorization, consent, adjudication or order of any
governmental authority, which has not been obtained by the Company or any
Subsidiary, is required to be obtained by the Company or any Subsidiary in
connection with the execution and delivery of the Loan Documents, the borrowings
under the Agreement or in connection with the payment by the Company of the
Obligations.
Very truly yours,
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President, Secretary and
General Counsel
46
EXHIBIT "C"
COMPLIANCE CERTIFICATE
To: The Banks parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain Credit
Agreement dated as of January 9, 1998, among the Company, the banks party
thereto and The First National Bank of Chicago as Agent for the Banks (the
"Agreement"). Unless otherwise defined herein, the terms used in this
Compliance Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected Vice President - Finance and Administration of the
Company;
2. I have reviewed the terms of the Agreement and I have made, or have caused
to be made under my supervision, a detailed review of the transactions and
conditions of the Company and its Subsidiaries during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I have no
knowledge of, the existence of any condition or event which constitutes a
Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and computations
evidencing the Company's compliance with certain covenants of the Agreement, all
of which data and computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Company has taken, is taking, or proposes to
take with respect to each such condition or event:
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
The foregoing certifications, together with the computations set forth in
Schedule I hereto and the financial statements delivered with this Certificate
in support hereof, are made and delivered this ____ day of __________, 19_____.
-------------------
Name:______________
Vice President - Finance and
Administration
47
[SAMPLE]
SCHEDULE I TO COMPLIANCE REPORT
Calculation Test
----------------
1. Interest Coverage Ratio
a. Consolidated Earnings Before
Interest and Taxes for quarter
ended ____ plus preceding
three quarters ________
b. Consolidated Interest Expense for
quarter ended _______ plus
preceding three quarters ________
a : b __________ 2.0
2. Dividend Limitation
a. Restricted Payments
since 12/31/96 ________
b. $30,000,000 + Consolidated Net
Income - Consolidated Net Loss
since December 31, 1996 ________
a + b __________
3. Funded Indebtedness Limitation
a. Consolidated Funded Indebtedness _____
b. Guaranties ________
c. Unfunded Liabilities ________
d. Consolidated Capitalization ________
a+b+c ________ .55
-----
d
4. Sale of Assets
a. Assets sold since
December 31, 1996 ___________
$50,000,000
b. Assets sold during FY____ ______ _____ 15%
c. Consolidated Tangible Assets _______
b : c
48
EXHIBIT "D"
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
__________________________ (the "Assignor") and __________________ (the
"Assignee") is dated as of _________________, 19__. The parties hereto agree as
follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit Agreement
(which, as it may be amended, modified, renewed or extended from time to time is
herein called the "Credit Agreement") described in Item 1 of Schedule 1 attached
hereto ("Schedule 1"). Capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. 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 such that after giving effect to such assignment the Assignee shall
have purchased pursuant to this Assignment Agreement the percentage interest
specified in Item 3 of Schedule 1 of all outstanding rights and obligations
under the Credit Agreement relating to the facilities listed in Item 3 of
Schedule 1 and the other Loan Documents. The aggregate Commitment (or Loans, if
the applicable Commitment has been terminated) purchased by the Assignee
hereunder is set forth in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 or two Business Days (or such shorter period agreed to by the Agent) after a
Notice of Assignment substantially in the form of Exhibit "I" attached hereto
has been delivered to the Agent. Such Notice of Assignment must include any
consents required to be delivered to the Agent by Section 13.3.1 of the Credit
Agreement. In no event will the Effective Date occur if the payments required
to be made by the Assignee to the Assignor on the Effective Date under Sections
4 and 5 hereof are not made on the proposed Effective Date. The Assignor will
notify the Assignee of the proposed Effective Date no later than the Business
Day prior to the proposed Effective Date. As of the Effective Date, (i) the
Assignee shall have the rights and obligations of a Lender under the Loan
Documents with respect to the rights and obligations assigned to the Assignee
hereunder and (ii) the Assignor shall relinquish its rights and be released from
its corresponding obligations under the Loan Documents with respect to the
rights and obligations assigned to the Assignee hereunder.
4. PAYMENT OBLIGATIONS. On and after the Effective Date, the Assignee shall
be entitled to receive from the Agent all payments of principal, interest and
fees with respect to the interest assigned hereby. The Assignee shall advance
funds directly to the Agent with respect to all Loans and reimbursement payments
made on or after the Effective Date with respect to the interest assigned
hereby. **[In consideration for the sale and assignment of Loans hereunder, (i)
the Assignee shall pay the Assignor, on the Effective Date, an amount equal to
the principal amount of the portion of all Floating Rate Loans assigned to the
Assignee hereunder and (ii) with respect to each Eurodollar Loan made by the
Assignor and assigned to the Assignee hereunder which is outstanding on the
Effective Date, (a) on the last day of the Interest Period therefor or (b) on
such earlier date agreed to by the Assignor and the Assignee or (c) on the date
on which any such Eurodollar Loan becomes due (by acceleration or otherwise)(the
date as described in the foregoing clauses (a), (b) or (c) being hereinafter
referred to as
49
the "Payment Date"), the Assignee shall pay the Assignor an amount equal to the
principal amount of the portion of such Eurodollar Loan assigned to the Assignee
which is outstanding on the Payment Date. If the Assignor and the Assignee agree
that the Payment Date for such Eurodollar Loan shall be the Effective Date, they
shall agree to the interest rate applicable to the portion of such Loan assigned
hereunder for the period from the Effective Date to the end of the existing
Interest Period applicable to such Eurodollar Loan (the "Agreed Interest Rate")
and any interest received by the Assignee in excess of the Agreed Interest Rate
shall be remitted to the Assignor. In the event interest for the period from the
Effective Date to but not including the Payment Date is not paid by the Company
with respect to any Eurodollar Loan sold by the Assignor to the Assignee
hereunder, the Assignee shall pay to the Assignor interest for such period on
the portion of such Eurodollar Loan sold by the Assignor to the Assignee
hereunder at the applicable rate provided by the Credit Agreement. In the event
a prepayment of any Eurodollar Loan which is existing on the Payment Date and
assigned by the Assignor to the Assignee hereunder occurs after the Payment Date
but before the end of the Interest Period applicable to such Eurodollar Loan,
the Assignee shall remit to the Assignor the excess of the prepayment penalty
paid with respect to the portion of such Eurodollar Loan assigned to the
Assignee hereunder over the amount which would have been paid if such prepayment
penalty was calculated based on the Agreed Interest Rate. The Assignee will also
promptly remit to the Assignor (i) any principal payments received from the
Agent with respect to Eurodollar Loans prior to the Payment Date and (ii) any
amounts of interest on Loans and fees received from the Agent which relate to
the portion of the Loans assigned to the Assignee hereunder for periods prior to
the Effective Date, in the case of Floating Rate Loans or fees, or the Payment
Date, in the case of Eurodollar Loans, and not previously paid by the Assignee
to the Assignor.]** In the event that either party hereto receives any payment
to which the other party hereto is entitled under this Assignment Agreement,
then the party receiving such amount shall promptly remit it to the other party
hereto.
**Each Assignor may insert its standard payment provisions in lieu of
the payment terms included in this Exhibit.
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the Assignor a
fee on each day on which a payment of interest or commitment fees is made under
the Credit Agreement with respect to the amounts assigned to the Assignee
hereunder (other than a payment of interest or commitment fees for the period
prior to the Effective Date or, in the case of Eurodollar Loans, the Payment
Date, which the Assignee is obligated to deliver to the Assignor pursuant to
Section 4 hereof). The amount of such fee shall be the difference between (i)
the interest or fee, as applicable, paid with respect to the amounts assigned to
the Assignee hereunder and (ii) the interest or fee, as applicable, which would
have been paid with respect to the amounts assigned to the Assignee hereunder if
each interest rate was ___ of 1% less than the interest rate paid by the
Company or if the commitment fee was ___ of 1% less than the commitment fee paid
by the Company, as applicable. In addition, the Assignee agrees to pay ___% of
the recordation fee required to be paid to the Agent in connection with this
Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S LIABILITY.
The Assignor 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 created by the Assignor. It is understood and
agreed that the assignment and assumption hereunder are made without recourse to
the Assignor and that the Assignor makes no other representation or warranty of
any kind to the Assignee. Neither the Assignor nor any of its officers,
directors, employees, agents or attorneys shall be responsible for (i) the due
execution, legality, validity, enforceability, genuineness, sufficiency or
collectability of any Loan Document, including without limitation, documents
granting the Assignor and
50
the other Lenders a security interest in assets of the Company or any guarantor,
(ii) any representation, warranty or statement made in or in connection with any
of the Loan Documents, (iii) the financial condition or creditworthiness of the
Company or any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (v) inspecting any of the
Property, books or records of the Company, (vi) the validity, enforceability,
perfection, priority, condition, value or sufficiency of any collateral securing
or purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that it has
received a copy of the Credit Agreement, together with copies of the financial
statements requested by the Assignee and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment Agreement, (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 at it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents, (iii) appoints and authorizes the Agent to take such action
as agent on its behalf and to exercise such powers under the Loan Documents as
are delegated to the Agent by the terms thereof, together with such powers as
are reasonably incidental thereto, (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender, (v) agrees that
its payment instructions and notice instructions are as set forth in the
attachment to Schedule 1, (vi) confirms that none of the funds, monies, assets
or other consideration being used to make the purchase and assumption hereunder
are "plan assets" as defined under ERISA and that its rights, benefits and
interests in and under the Loan Documents will not be "plan assets" under ERISA,
and (vii) attaches the forms prescribed by the Internal Revenue Service of the
United States certifying that the Assignee is entitled to receive payments under
the Loan Documents without deduction or withholding of any United States federal
income taxes.
*to be inserted if required by the Credit Agreement.
**to be inserted if the Assignee is not incorporated under the laws of the
United States, or a state thereof.
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor
in connection with or arising in any manner from the Assignee's non-performance
of the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall
have the right pursuant to Section 13.3.1 of the Credit Agreement to assign the
rights which are assigned to the Assignee hereunder to any entity or person,
provided that (i) any such subsequent assignment does not violate any of the
terms and conditions of the Loan Documents or any law, rule, regulation, order,
writ, judgment, injunction or decree and that any consent required under the
terms of the Loan Documents has been obtained and (ii) unless the prior written
consent of the Assignor is obtained, the Assignee is not thereby released from
its obligations to the Assignor hereunder, if any remain unsatisfied, including,
without limitation, its obligations under Sections 4, 5 and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the Aggregate
Commitment occurs between the date of this Assignment Agreement and the
Effective Date, the percentage interest specified in Item 3 of Schedule 1 shall
remain the same, but the dollar amount purchased shall be recalculated based on
the reduced Aggregate Commitment.
51
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice of
Assignment embody the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings between the parties
hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Illinois.
13. NOTICES. Notices shall be given under this Assignment Agreement in the
manner set forth in the Credit Agreement. For the purpose hereof, the addresses
of the parties hereto (until notice of a change is delivered) shall be the
address set forth in the attachment to Schedule 1.
52
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
**[NAME OF ASSIGNOR]**
By:
-----------------
Title:
--------------
**[NAME OF ASSIGNEE]**
By:
----------------
Title:
-------------
53
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement:
2. Date of Assignment Agreement: _____________ , 19__
3. Amounts (As of Date of Item 2 above):
Facility Facility Facility Facility
1* 2* 3* 4*
-------- -------- -------- --------
a. Total of Commitments
(Loans)** under
Credit Agreement $ $ $ $
------- ------- ------- -------
b. Assignee's Percentage
of each Facility purchased
under the Assignment
Agreement*** % % % %
------- ------- ------- -------
c. Amount of Assigned Share in
each Facility purchased under
the Assignment
Agreement $ $ $ $
------- ------- ------- -------
4. Assignee's Aggregate (Loan
Amount)** Commitment Amount
Purchased Hereunder: $
-------
5. Proposed Effective Date: ----------
Accepted and Agreed:
**[NAME OF ASSIGNOR]** **[NAME OF ASSIGNEE]**
By: By:
----------------------------- -----------------------------
Title: Title:
----------------------------- -----------------------------
* Insert specific facility names per Credit Agreement
** If a Commitment has been terminated, insert outstanding Loans in place of
Commitment
*** Percentage taken to 10 decimal places
54
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
ADMINISTRATIVE INFORMATION SHEET
--------------------------------
Attach Assignor's Administrative Information Sheet, which must
include notice addresses for the Assignor and the Assignee
(Sample form shown below)
ASSIGNOR INFORMATION
--------------------
Contact:
-------
Name: Telephone No.:
-------------------------- -------------------------
Fax No.: Telex No.:
----------------------- -----------------------------
Answerback:
-----------------------------
Payment Information:
--------------------
Name & ABA # of Destination Bank:
-----------------------------------------------
----------------------------------------
Account Name & Number for Wire Transfer:
----------------------------------------
--------------------------------------
Other Instructions:
-------------------------------------------------------------
--------------------------------------------------------------------------------
Address for Notices for Assignor:
--------------------------------
-----------------------------------------------
---------------------------------------------
---------------------------------------------
ASSIGNEE INFORMATION
--------------------
Credit Contact:
--------------
Name: Telephone No.:
------------------------------ -------------------------
Fax No.: Telex No.:
--------------------------- -----------------------------
Answerback:
-----------------------------
Key Operations Contacts:
-----------------------
Booking Installation: Booking Installation:
-------------- -------------------
Name: Name:
------------------------------ -----------------------------------
Telephone No.: Telephone No.:
--------------------- --------------------------
Fax No.: Fax No.:
--------------------------- --------------------------------
Telex No.: Telex No.:
------------------------- ------------------------------
Answerback: Answerback:
------------------------ -----------------------------
55
Payment Information:
--------------------
Name & ABA # of Destination Bank:
-----------------------------------------------
--------------------------------------------
Account Name & Number for Wire Transfer:
----------------------------------------
------------------------------------
Other Instructions:
-------------------------------------------------------------
--------------------------------------------------------------------------------
Address for Notices for Assignee:
--------------------------------
-----------------------------------------------
--------------------------------------------
--------------------------------------------
56
FNBC INFORMATION
----------------
Assignee will be called promptly upon receipt of the signed agreement.
Initial Funding Contact: Subsequent Operations Contact:
----------------------- -----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇ Name:
---------------------------- -----------------------------
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone No.: (312)
------------------- -------------------
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇ Fax No.: (312)
------------------------- -------------------------
FNBC Telex No.: 190201 (Answerback: FNBC UT)
-------------------------------
Initial Funding Standards:
-------------------------
Libor - Fund 2 days after rates are set.
FNBC Wire Instructions: The First National Bank of Chicago, ABA # ▇▇▇▇▇▇▇▇▇
BNF = 7521-7653/DES, Ref.:________________
Address for Notices for FNBC: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------------- Attn: Agency/Compliance Division, Suite 0353
Fax No. (▇▇▇)▇▇▇-▇▇▇▇ or (▇▇▇)▇▇▇-▇▇▇▇
57
EXHIBIT "I"
to Assignment Agreement
NOTICE
OF ASSIGNMENT
-------------
, 19
-------------------- --
To: **[NAME OF Company]**
------------------
------------------
**[NAME OF AGENT]**
------------------
------------------
From: **[NAME OF ASSIGNOR]** (the "Assignor")
**[NAME OF ASSIGNEE]** (the "Assignee")
1. We refer to that Credit Agreement (the "Credit Agreement") described in
Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings attributed to
them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered to
**[the Company and]** the Agent pursuant to Section **[13.3.2]** of the Credit
Agreement.
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of ___________, 19__ (the "Assignment"), pursuant to which,
among other things, the Assignor has sold, assigned, delegated and transferred
to the Assignee, and the Assignee has purchased, accepted and assumed from the
Assignor the percentage interest specified in Item 3 of Schedule 1 of all
outstandings, rights and obligations under the Credit Agreement relating to the
facilities listed in Item 3 of Schedule 1. The Effective Date of the Assignment
shall be the later of the date specified in Item 5 of Schedule 1 or two Business
Days (or such shorter period as agreed to by the Agent) after this Notice of
Assignment and any consents and fees required by Sections **[13.3.1 and
13.3.2]** of the Credit Agreement have been delivered to the Agent, provided
that the Effective Date shall not occur if any condition precedent agreed to by
the Assignor and the Assignee has not been satisfied.
*To be included only if consent must be obtained from the Company pursuant to
Section 12.3.1 of the Credit Agreement.
58
4. The Assignor and the Assignee hereby give to the Company and the Agent
notice of the assignment and delegation referred to herein. The Assignor will
confer with the Agent before the date specified in Item 5 of Schedule 1 to
determine if the Assignment Agreement will become effective on such date
pursuant to Section 3 hereof, and will confer with the Agent to determine the
Effective Date pursuant to Section 3 hereof if it occurs thereafter. The
Assignor shall notify the Agent if the Assignment Agreement does not become
effective on any proposed Effective Date as a result of the failure to satisfy
the conditions precedent agreed to by the Assignor and the Assignee. At the
request of the Agent, the Assignor will give the Agent written confirmation of
the satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Agent on or before the
Effective Date the processing fee of $3,000 required by Section 12.3.2 of the
Credit Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor and the
Assignee request and direct that the Agent prepare and cause the Company to
execute and deliver new Notes or, as appropriate, replacement notes, to the
Assignor and the Assignee. The Assignor and, if applicable, the Assignee each
agree to deliver to the Agent the original Note received by it from the Company
upon its receipt of a new Note in the appropriate amount.
7. The Assignee advises the Agent that notice and payment instructions are
set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of the funds,
monies, assets or other consideration being used to make the purchase pursuant
to the Assignment are "plan assets" as defined under ERISA and that its rights,
benefits, and interests in and under the Loan Documents will not be "plan
assets" under ERISA.
9. The Assignee authorizes the Agent to act as its agent under the Loan
Documents in accordance with the terms thereof. The Assignee acknowledges that
the Agent has no duty to supply information with respect to the Company or the
Loan Documents to the Assignee until the Assignee becomes a party to the Credit
Agreement.*
*May be eliminated if Assignee is a party to the Credit Agreement prior to the
Effective Date.
NAME OF ASSIGNOR NAME OF ASSIGNEE
By: By:
------------------- -------------------
Title: Title:
---------------- ----------------
59
ACKNOWLEDGED **[AND CONSENTED TO]** ACKNOWLEDGED **[AND CONSENTED TO]**
BY **[NAME OF AGENT]** BY **[NAME OF Company]**
By: By:
----------------------- -----------------------
Title: Title:
-------------------- --------------------
**[Attach photocopy of Schedule 1 to Assignment]**
60
SCHEDULE "1"
SUBSIDIARIES AND OTHER INVESTMENTS
(See Sections 5.8 and 6.16)
Restricted Jurisdiction
Investment Owned Amount of Percent or of
In By Investment Ownership Unrestricted Organization
---------- ------ ---------- --------- ------------ ------------
Stepan Europe Stepan Company $2,741,000 100% Unrestricted France
Stepan Canada Stepan Company $ 880,000 100% Unrestricted Canada
Stepan Mexico Stepan Company $5,754,000 100% Unrestricted Mexico
Global Insurance Stepan Company $ 50,000 100% Unrestricted British West Indies
Stepan Quimica Ltda. Stepan Company $ 46,000 100% Unrestricted Brazil
Stepan Columbiana Stepan Company $2,408,000 50% Unrestricted Columbia
Stepan Phillipines Stepan Company $8,814,000 50% Unrestricted Phillipines
61
SCHEDULE "2"
INDEBTEDNESS AND LIENS
(See Sections 6.12, 6.15 and 6.18)
Maturity
Indebtedness Indebtedness Property and Amount
Incurred By Owed To Encumbered (If Any) of Indebtedness
------------ ------------ ------------------- ---------------
NONE
62
SCHEDULE "3"
LONG TERM DEBT
(See Section 6.1(h))
9.7% Promissory Note (1987)
9.7% Promissory Note (1991)
9.52% Promissory Notes
7.22% Promissory Notes, Series A and B
7.69% Promissory Notes, Series A
7.77% Promissory Notes, Series B
63