EXHIBIT 99.2
FOURTH AMENDMENT dated as of
June 20, 2003, (this "Amendment") to the FIVE-
YEAR CREDIT AGREEMENT dated as of October 28,
1999, as amended by the First Amendment dated
as of September 24, 2001, the Second
Amendment dated as of December 21, 2001 and
the Third Amendment dated as of May 8, 2002
(as it may be further amended, restated,
supplemented or otherwise modified from time
to time, the "Five-Year Credit Agreement"),
among CROMPTON CORPORATION (formerly known as
CK Witco Corporation) (the "Company"); the
Eligible Subsidiaries referred to therein;
the BANKS referred to therein; JPMORGAN CHASE
BANK (formerly known as THE CHASE MANHATTAN
BANK) ("JPMORGAN"), as Syndication Agent;
CITICORP USA, INC. (as successor to Citibank,
N.A. in its capacity as Administrative
Agent), as Administrative Agent; and BANK OF
AMERICA, N.A. and DEUTSCHE BANK SECURITIES
INC. (formerly known as DEUTSCHE BANC ALEX.
XXXXX INC.), as Co-Documentation Agents.
WHEREAS, the Company, the Eligible Subsidiaries,
the Banks, the Co-Documentation Agents, the Syndication
Agent and the Administrative Agent are parties to the Five-
Year Credit Agreement;
WHEREAS, pursuant to the Five-Year Credit
Agreement, the Banks have made and agreed to make certain
loans to the Borrowers; and
WHEREAS, the Company has requested that certain
provisions of the Five-Year Credit Agreement be modified in
the manner provided in this Amendment;
WHEREAS, the Banks whose signatures appear below,
constituting the Required Banks, hereby agree to amend the
Five-Year Credit Agreement, which amendment shall become
effective upon satisfaction of the conditions precedent set
forth herein;
NOW, THEREFORE, in consideration of the mutual
agreements herein contained and other good and valuable
consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto hereby agree as
follows:
SECTION 1. Defined Terms. Capitalized terms used
but not defined herein have the meanings assigned to them in
the Five-Year Credit Agreement.
SECTION 2. Amendment to Article 1. Section 1.01
of the Five-Year Credit Agreement is hereby amended by
adding the following defined term in the correct
alphabetical order:
"`Organosilicones Business Asset Sale' means the
sale by the Company of its organosilicones business pursuant
to and on the terms provided in the Purchase and Exchange
Agreement dated as of April 24, 2003, between the Company
and General Electric Company."
SECTION 3. Amendments to Article 4. (a) Clauses
(a) and (b) of Section 4.04 of the Five-Year Credit
Agreement are hereby amended and restated in their entirety
to read as follows
"(a) The unaudited consolidated balance sheet of
the Company and its Consolidated Subsidiaries as
of March 31, 2003, and the related consolidated
statement of operations for the three months then
ended, a copy of which has been delivered to the
Agent on behalf of each of the Banks, fairly
present, in conformity with generally accepted
accounting principles, the consolidated financial
position of the Company and its Consolidated
Subsidiaries as of such date and their
consolidated results of operations for such
periods.
(b) Since December 31, 2002, there has been no
material adverse change in the business, financial
position or results of operations of the Company
and its Consolidated Subsidiaries, considered as a
whole."
(b) Section 4.05 of the Five-Year Credit Agreement
is hereby amended and restated in its entirety to read
as follows
"SECTION 4.05. Litigation. Except as disclosed
in the Company's 10-K Report for the fiscal year
ended December 31, 2002, as supplemented by the
Company's 10-Q Report for the fiscal quarter ended
March 31, 2003, there is no action, suit or
proceeding pending against, or to the knowledge of
the Company threatened against or affecting, the
Company or any of its Subsidiaries before any
court or arbitrator or any governmental body,
agency or official in which there is a reasonable
likelihood of an adverse decision which would
materially adversely affect the business (taken as
a whole), consolidated financial position or
consolidated results of operations of the Company
and its Consolidated Subsidiaries or which in any
manner draws into question the validity or
enforceability of any Loan Document or the Notes."
(c) Section 4.07 of the Five-Year Credit
Agreement is hereby amended and restated in its
entirety to read as follows:
"SECTION 4.07. Environmental Matters. In the
ordinary course of its business, the Company
conducts an ongoing review of the effect of
Environmental Laws on the business, operations and
properties of the Company and its Subsidiaries, in
the course of which it identifies and evaluates
associated liabilities and costs (including,
without limitation, any capital or operating
expenditures required for cleanup or closure of
properties presently or previously owned, any
capital or operating expenditures required to
achieve or maintain compliance with environmental
protection standards imposed by law or as a
condition of any license, permit or contract, any
related constraints on operating activities,
including any periodic or permanent shutdown of
any facility or reduction in the level of or
change in the nature of operations conducted
thereat and any actual or potential liabilities to
third parties, including employees, and any
related costs and expenses). On the basis of this
review, the Company has reasonably concluded that,
except as disclosed in the Company 10-K Report for
the fiscal year ended December 31, 2002, as
supplemented by the Company's 10-Q Report for the
fiscal quarter ended March 31, 2003, Environmental
Laws are unlikely to have a material adverse
effect on the business, financial position or
results of operations of the Company and its
Consolidated Subsidiaries, considered as a whole."
SECTION 4. Amendments to Article 5. (a) Section
5.07(a) of the Five-Year Credit Agreement is hereby amended
and restated in its entirety to read as follows:
"(a) The Company will not permit the Leverage
Ratio at any time during any period beginning on a date
set forth below and ending on a date immediately
preceding the date listed immediately below such
beginning date (if any) to be in excess of the ratio
set forth below opposite such initial date:
Date Ratio
January 1, 2003 4.00 to 1.00
Amendment No. 4 4.65 to 1.00
Effective Date
October 1, 2003 4.50 to 1.00
January 1, 2004 3.50 to 1.00
; provided, however, that (i) if the Organosilicones
Business Asset Sale is completed prior to October 1, 2003,
the applicable Leverage Ratio for the period commencing on
the date of the completion of such sale and ending on
September 30, 2003 shall be 4.00 to 1.00 and the applicable
Leverage Ratio for the period commencing on October 1, 2003
shall be 3.50 to 1.00 and (ii) if the Organosilicones
Business Asset Sale is completed on or after October 1,
2003, the applicable Leverage Ratio for the period
commencing on the date of such sale shall be 3.50 to 1.00.
(b) Section 5.08 of the Five-Year Credit
Agreement is hereby amended by (i) replacing the period at
the end of Section 5.08(i) with a semi-colon and (ii) adding
the following provision after Section 5.08(i):
"provided, however, that with the exception
of pledges by Witco Europe Investment Partners, Witco
Investment Holdings B.V. and Witco Holdings B.V. of up
to 65% of the issued and outstanding capital stock of
Crompton B.V. to the lenders under that certain Credit
Agreement dated as of June 29, 1998, among Witco
Investment Holdings B.V. as borrower, Citibank N.A. and
Deutsche Bank Securities Inc., as Arrangers, Citibank
International PLC as Agent, and others, as amended from
time to time, in connection with the refinancing
thereof, neither the Company nor any Subsidiary shall
create, assume or suffer to exist any Lien on any asset
now owned or hereafter acquired by it in connection
with any amendment, extension, refinancing or
replacement of any existing agreement for borrowed
money without equally and ratably securing the
Obligations on terms and under documentation
satisfactory to the Administrative Agent and the
Syndication Agent."
(c) Clause C of Section 5.09 of the Five-Year
Credit Agreement is hereby amended and restated to read in
its entirety as follows:
"(C) the Company and its Subsidiaries may sell,
lease or transfer any of their assets with a market value
that does not, in the aggregate together with all other
sales, leases and transfers pursuant to this clause (C) from
and after the Amendment No. 4 Effective Date, exceed
$100,000,000."
(d) Article 5 of the Five-Year Credit Agreement is
hereby amended by adding the following sections at the end
thereof:
"SECTION 5.17. Covenant Relating to
Prepayment of 8 1/2% Senior Notes. The Company and its
Subsidiaries will not voluntarily repay, purchase,
redeem or defease any of the Company's outstanding 8
1/2% Senior Notes Due 2005 with the proceeds of any
Borrowing under this Agreement.
SECTION 5.18. Covenant Relating to Reduction
of Commitments. Not more than five Domestic Business
Days following the Company's receipt of at least four
hundred and fifty million dollars ($450,000,000.00) of
initial proceeds due to the Company in connection with
the completion of the Organosilicones Business Asset
Sale, the Company will issue a notice under Section
2.09 hereof to permanently reduce Commitments in
amounts such that the aggregate Commitments shall not
exceed $300,000,000, and will repay outstanding
Borrowings to the extent they exceed the Commitments as
so reduced."
SECTION 5. Waiver. (a) The Banks hereby waive
the previous failure, if any, of the Company to comply with
the provisions of Section 5.07(a) during the period ending
on the date immediately preceding the Amendment No. 4
Effective Date.
(b) The Banks hereby waive the provisions of
Section 5.09(ii) to the extent necessary to permit the
Organosilicones Business Asset Sale and acknowledge and
agree that such sale shall not be deemed to utilize the
basket set forth in clause (C) of Section 5.09 for sales,
leases and transfers of the assets of the Company and its
Subsidiaries from and after the Amendment No. 4 Effective
Date.
SECTION 6. Collateral Release. The Banks hereby
acknowledge and agree that, in accordance with the
provisions of the Security Agreement, upon the completion of
the Organosilicones Business Asset Sale, any security
interest held by the Collateral Agent for the benefit of the
Secured Parties in assets of the Company and its
Subsidiaries sold in such sale will terminate without
further action on the part of the Company, the Collateral
Agent or any other party.
SECTION 7. Representations and Warranties. To
induce the other parties hereto to enter into this
Amendment, the Company hereby represents and warrants that,
after giving effect to this Amendment:
(a) The representations and warranties set forth
in Article 4 of the Five-Year Credit Agreement, as
amended by this Amendment, are true and correct on and
as of the date hereof, except to the extent such
representations and warranties specifically relate to
an earlier date, with all references to "this
Agreement" being deemed to refer to the Five-Year
Credit Agreement, as amended by this Amendment;
(b) No Default or Event of Default has occurred
and is continuing; and
(c) This Amendment has been duly executed and
delivered by the Company and constitutes a legal,
valid and binding obligation of the Company
enforceable against the Company in accordance with its
terms.
SECTION 8. Conditions to Effectiveness. This
Amendment shall become effective on the date (the
"Amendment No. 4 Effective Date") on which each of the
following conditions has been satisfied:
(a) the Syndication Agent shall have received
counterparts of this Amendment that, when taken
together, bear the signatures of the Company, the
Required Banks and the Syndication Agent; and
(b) The Administrative Agent and the Syndication
Agent shall have received payment of all fees and
expenses as provided herein and in accordance with the
provisions of the Fee Letter dated as of the date
hereof among the Company, the Syndication Agent and
X.X. Xxxxxx Securities Inc.
SECTION 9. Effect of Amendment. (a) On and
after the Amendment No. 4 Effective Date, each reference in
the Five-Year Credit Agreement to "this Agreement",
"hereunder", "herein", or words of like import shall mean
and be a reference to the Five-Year Credit Agreement, as
amended hereby. Except as expressly set forth herein, this
Amendment shall not by implication or otherwise limit,
impair, constitute a waiver of or otherwise affect the
rights and remedies of the Banks under the Five-Year Credit
Agreement or any other Loan Documents, and shall not alter,
modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained
in the Five-Year Credit Agreement or any other Loan
Documents, all of which are ratified and affirmed in all
respects and shall continue in full force and effect.
Nothing herein shall be deemed to entitle the Company to a
consent to, or a waiver, amendment, modification or other
change of, any of the terms, conditions, obligations,
covenants or agreements contained in the Five-Year Credit
Agreement or any other Loan Documents in similar or
different circumstances. This Amendment shall apply and be
effective only with respect to the provisions of the Five-
Year Credit Agreement specifically referred to herein.
(b) Nothing herein will be deemed to reduce the
obligations of any Subsidiary Guarantor under the Subsidiary
Guarantee Agreement, which shall remain in full force and
effect.
SECTION 10. Counterparts. This Amendment may be
executed by one or more parties to this Amendment in any
number of separate counterparts, each of which shall
constitute an original, but all of which when taken together
shall constitute but one contract. Delivery of an executed
counterpart of a signature page of this Amendment by
facsimile transmission shall be as effective as delivery of
a manually executed counterpart hereof.
SECTION 11. APPLICABLE LAW. THIS AMENDMENT SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF
THE STATE OF NEW YORK.
SECTION 12. Headings. Section headings used
herein are for convenience of reference only, are not part
of, and are not to be taken into consideration in
interpreting, this Amendment.
SECTION 13. Expenses. The Company shall
reimburse the Syndication Agent and the Collateral Agent for
their reasonable out-of-pocket expenses in connection with
this Amendment, including the reasonable fees, charges and
disbursements of Cravath, Swaine & Xxxxx LLP.
IN WITNESS WHEREOF, the Company, the
Administrative Agent and the undersigned Banks have caused
this Amendment to be duly executed by their duly authorized
officers, all as of the date first above written.
CROMPTON CORPORATION,
By
Name:
Title:
By
Name:
Title:
Each of the Subsidiary Guarantors
hereby acknowledges receipt of, and
consents to the terms of, this
Amendment.
CROMPTON MANUFACTURING COMPANY,
INC.,
By
Name:
Title:
By
Name:
Title:
CITICORP USA, INC., individually,
as Administrative Agent and as
Collateral Agent,
By
Name:
Title:
JPMORGAN CHASE BANK (formerly known
as THE CHASE MANHATTAN BANK),
individually and or Syndication
Agent,
By
Name:
Title:
Name:
Title:
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
BANK OF AMERICA, N.A.,
By
Name:
Title:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
DEUTSCHE BANK AG NEW YORK BRANCH
a/o CAYMAN ISLANDS BRANCH,
By
Name:
Title:
Name:
Title:
00 X. 00xx Xxxxxx
Xxx Xxxx, XX 00000
MELLON BANK, N.A.,
By
Name:
Title:
Xxx Xxxxxx Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
ABN AMRO BANK N.V.,
By
Name:
Title:
By
Name:
Title:
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
COMMERZBANK AG
NEW YORK AND GRAND CAYMAN
BRANCHES,
By
Name:
Title:
By
Name:
Title:
FOUR WINDS FUNDING CORPORATION,
as Designee,
By
Name:
Title:
By
Name:
Title:
Address:
BANK HAPOALIM B.M.
By
Name:
Title:
Address:
THE BANK OF NEW YORK,
By
Name:
Title:
Address:
WACHOVIA BANK, N.A. (formerly known
as FIRST UNION NATIONAL BANK),
By
Name:
Title:
000 X. Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, XX 00000-0000
FLEET NATIONAL BANK,
By
Name:
Title:
0 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
FORTIS (USA) FINANCE LLC,
By
Name:
Title:
By
Name:
Title:
Address:
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY,
By
Name:
Title:
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
WESTDEUTSCHE LANDESBANK,
By
Name:
Title:
By
Name:
Title:
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
THE BANK OF NOVA SCOTIA,
By
Name:
Title:
Address:
BNP PARIBAS,
By
Name:
Title:
By
Name:
Title:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
BANCA NAZIONALE DEL LAVORO S.P. NEW
YORK BRANCH,
By
Name:
Title:
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
SUNTRUST BANK,
By
Name:
Title:
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
INTESABCI NEW YORK BRANCH,
By
Name:
Title:
Name:
Title:
Xxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
ING CAPITAL LLC,
By
Name:
Title:
0000 Xxxxxx xx xxx Xxxxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
THE INDUSTRIAL BANK OF JAPAN,
By
Name:
Title:
Address:
BANCA MONTE DEI PASCHI DI SIENA
S.P.,
By
Name:
Title:
By
Name:
Title:
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
PEOPLE'S BANK,
By
Name:
Title:
000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
HIBERNIA NATIONAL BANK,
By
Name:
Title:
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
