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Title: |
Credit Agreement |
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Entities: |
A. Schulman Inc.; Bank One, NA; Commerzbank AG; National City Bank; Bank of New York; Keybank NA |
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Date: |
2001 |
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Size: |
Preview shows 74KB of 216KB total |
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Price: |
$48 |
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ID: |
#893293 |
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==========================================================================================================================================
==========================================================================================================================================
CREDIT AGREEMENT
among
A. SCHULMAN, INC.,
and
THE FOREIGN BORROWERS NAMED HEREIN,
as Borrowers
THE FINANCIAL INSTITUTIONS NAMED HEREIN,
as Banks
THE BANK OF NEW YORK,
and
NATIONAL CITY BANK,
as Co-Documentation Agents
and
KEYBANK NATIONAL ASSOCIATION,
as Lead Arranger and Administrative Agent
_____________________
dated as of
October 2, 2001
_____________________
==========================================================================================================================================
==========================================================================================================================================
This CREDIT AGREEMENT (as the same may from time to time be amended, restated or otherwise modified, this "Agreement") is made effective as of the 2nd day of October, 2001, among A. SCHULMAN, INC., a Delaware corporation, 3550 West Market Street, Akron, Ohio 44333 ("ASI"), each Foreign Borrower, as hereinafter defined (each such Foreign Borrower, together with ASI shall be referred to herein, collectively, as "Borrowers" and, individually, each a "Borrower"), the banking institutions named in Schedule 1 hereto (collectively, "Banks", and individually, "Bank"), KEYBANK NATIONAL ASSOCIATION, 127 Public Square, Cleveland, Ohio 44114-1306, as lead arranger and administrative agent for the Banks under this Agreement ("Agent"), NATIONAL CITY BANK, One Cascade Plaza, Akron, Ohio 44308 ("National City"), and THE BANK OF NEW YORK, One Wall Street, New York, New York 10286 ("BONY") and together with National City, collectively, the "Co-Documentation Agents", and individually, each a "Co-Documentation Agent"). As used herein, the term Agent shall not include the Co-Documentation Agents.
WITNESSETH:
WHEREAS, Borrowers and the Banks desire to contract for the establishment of credits in the aggregate principal amounts hereinafter set forth, to be made available to Borrowers upon the terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, it is mutually agreed as follows:
As used in this Agreement, the following terms shall have the following meanings:
"Acquisition" shall mean any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of any Person, or any business or division of any Person, (b) the acquisition of in excess of fifty percent (50%) of the stock (or other equity interest) of any Person, or (c) the acquisition of another Person (other than a Company) by a merger or consolidation or any other combination with such Person.
"Adjusted LIBOR Rate" shall mean a rate per annum equal to the quotient obtained (rounded upwards, if necessary, to the nearest 1/100th of 1%) by dividing (a) the applicable LIBOR Rate by (b) 1.00 minus the Reserve Percentage.
"Advantage" shall mean any payment (whether made voluntarily or involuntarily, by offset of any deposit or other indebtedness or otherwise) received by any Bank in respect of the Debt, if such payment results in that Bank having less than its pro rata share of the Debt then outstanding, than was the case immediately before such payment.
"Affiliate" shall mean any Person, directly or indirectly, controlling, controlled by or under common control with a Company and "control" (including the correlative meanings, the terms "controlling", "controlled by" and "under common control with") shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Company, whether through the ownership of voting securities, by contract or otherwise.
"Agent Fee Letter" shall mean the Agent Fee Letter between ASI and Agent, dated as of the Closing Date.
"Alternate Currency" shall mean (a) with respect to ASI, Euros, Pounds Sterling or any other currency, other than Dollars, agreed to by Agent and the Banks that shall be freely transferable and convertible into Dollars, and (b) with respect to any Foreign Borrower, Euros, Dollars, Pounds Sterling or any other currency agreed to by Agent and the Banks that shall be freely transferable and convertible into Dollars.
"Alternate Currency Exposure" shall mean, at any time, the sum of the Dollar Equivalent of (a) the aggregate principal amount of Alternate Currency Loans outstanding to ASI, and (b) the Foreign Borrower Exposure.
"Alternate Currency Loan" shall mean a Loan described in Section 2.1A hereof that shall be denominated in an Alternate Currency and on which the applicable Borrower shall pay interest at a rate based on the Adjusted LIBOR Rate applicable to such Alternate Currency.
"Alternate Currency Maximum Amount" shall mean the Dollar Equivalent of Sixty-Five Million Dollars ($65,000,000).
"Applicable Facility Fee Rate" shall mean:
(a) for the period from the Closing Date through February 28, 2002, twenty-two and one-half (22.50) basis points; and
(b) commencing with the financial statements for the fiscal quarter ending November 30, 2001, the number of basis points set forth in the following matrix, based upon the result of the computation of the Leverage Ratio, shall be used to establish the number of basis points that will go into effect on March 1, 2002 and thereafter:
| Leverage Ratio | Applicable Facility Fee Rate |
| Greater than or equal to 2.75 to 1.00 | 30.00 basis points |
| Greater than or equal to 2.50 to 1.00, but less than 2.75 to 1.00 | 25.00 basis points |
| Greater than or equal to 2.00 to 1.00, but less than 2.50 to 1.00 | 22.50 basis points |
| Greater than or equal to 1.50 to 1.00, but less than 2.00 to 1.00 | 17.50 basis points |
| Less than 1.50 to 1.00 | 15.00 basis points |
Changes to the Applicable Facility Fee Rate shall be effective on the first day of the month following the date upon which Agent received, or, if earlier, should have received, pursuant to Section 5.3 (a) and (b) hereof, the financial statements of the Companies. The above matrix does not modify or waive, in any respect, the requirements of Section 5.7 hereof, the rights of Agent and the Banks to charge the Default Rate, or the rights and remedies of Agent and the Banks pursuant to Articles VII and VIII hereof.
"Applicable Margin" shall mean:
(a) for the period from the Closing Date through February 28, 2002, eighty-seven and one-half (87.50) basis points; and
(b) commencing with the financial statements for the fiscal quarter ending November 30, 2001, the number of basis points set forth in the following matrix, based upon the result of the computation of the Leverage Ratio, shall be used to establish the number of basis points that will go into effect on March 1, 2002 and thereafter:
| Leverage Ratio | Applicable Basis Points |
| Greater than or equal to 2.75 to 1.00 | 120.00 basis points |
| Greater than or equal to 2.50 to 1.00, but less than 2.75 to 1.00 | 100.00 basis points |
| Greater than or equal to 2.00 to 1.00, but less than 2.50 to 1.00 | 87.50 basis points |
| Greater than or equal to 1.50 to 1.00, but less than 2.00 to 1.00 | 67.50 basis points |
| Less than 1.50 to 1.00 | 55.00 basis points |
Changes to the Applicable Margin shall be effective on the first day of the month following the date upon which Agent received, or, if earlier, Agent should have received, pursuant to Section 5.3 (a) and (b) hereof, the financial statements of the Companies. The above matrix does not modify or waive, in any respect, the requirements of Section 5.7 hereof, the rights of Agent and the Banks to charge the Default Rate, or the rights and remedies of Agent and the Banks pursuant to Articles VII and VIII hereof.
"Assignment Agreement" shall mean an Assignment and Acceptance Agreement in the form of the attached Exhibit H.
"Assumption Agreement" shall mean each of the Assumption Agreements executed by a Foreign Borrower after the Closing Date, in the form of the attached Exhibit G, as the same may from time to time be amended, restated or otherwise modified.
"Bank Fee Letter" shall mean the Bank Fee Letter between Agent, for the benefit of the Banks, and ASI, dated as of the Closing Date.
"Base Rate" shall mean a rate per annum equal to the greater of (a) the Prime Rate or (b) one-half of one percent (.50%) in excess of the Federal Funds Effective Rate. Any change in the Base Rate shall be effective immediately from and after such change in the Base Rate.
"Base Rate Loan" shall mean a Loan described in Section 2.1A hereof on which ASI shall pay interest at a rate based on the Base Rate.
"Business Day" shall mean a day of the year on which banks are not required or authorized to close in Cleveland, Ohio, and, if the applicable Business Day shall relate to any Eurodollar Loan, on which dealings are carried on in the London interbank Eurodollar market, and, if the applicable Business Day relates to any Alternate Currency, on which dealings are carried on in the relevant Alternate Currency market.
"Capital Distribution" shall mean a payment made, liability incurred or other consideration given for the purchase, acquisition, redemption, repurchase or retirement of any capital stock or other equity interest of any Company or as a dividend, return of capital or other distribution (other than any stock dividend, stock split or other equity distribution payable only in capital stock or other equity of the Company in question) in respect of any Company's capital stock or other equity interest.
"Capitalization Ratio" shall mean, for the most recently completed fiscal quarter of ASI, on a Consolidated basis and in accordance with GAAP, the ratio of (a) Consolidated Total Indebtedness to (b) Total Capitalization.
"Cash Equivalent" shall mean (a) a security that is the direct obligation of the United States of America, any member state of the European Union or any other sovereign nation not targeted for sanctions by the Office of Foreign Assets Control of the United States Department of the Treasury so long as the full faith of and credit of such nation is pledged in support thereof; (b) time deposits, certificates of deposit or bankers acceptances issued by any Lender or any other domestic or foreign commercial bank or United States branch of a foreign bank licensed under the laws of the United States or a State thereof having (i) capital and surplus in excess of Two Hundred Fifty Million Dollars ($250,000,000) and (ii) a Keefe Bank Watch Rating of "B" or better or, with respect to any investment or deposit in a foreign bank in excess of One Million Dollars ($1,000,000), an equivalent rating from a comparable foreign rating agency (each an "Approved Depository"); (c) commercial paper or securities that at the time of investment therein shall have been assigned one of the two highest quality ratings in accordance with the rating systems employed by any of Moody's, S&P, Fitch or Duff & Phelps or any equivalent foreign rating agency; (d) fully collateralized repurchase obligations entered into with any Lender or Approved Depository, having a term of not more than ninety (90) days and covering securities of the type describe in subpart (a) above; or (e) investments in funds of any Socit d'Investissement Capital Variable maintained by an Approved Depository that invest primarily in cash and cash equivalents.
"Change in Control" shall mean (a) the acquisition of, or, if earlier, the shareholder or director approval of the acquisition of, ownership or voting control, directly or indirectly, beneficially or of record, on or after the Closing Date, by any Person or group (within the meaning of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934, as then in effect), of shares representing more than thirty percent (30%) of the aggregate ordinary Voting Power represented by the issued and outstanding capital stock of ASI; (b) the occupation of a majority of the seats (other than vacant seats) on the board of directors of ASI by Persons who were neither (i) nominated by the board of directors of ASI nor (ii) appointed by directors so nominated; or (c) the occurrence of a change in control, or other similar provision, as defined in any Material Indebtedness Agreement.
"Closing Date" shall mean the effective date of this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended, together with the rules and regulations promulgated thereunder.
"Commitment" shall mean the obligation hereunder of the Banks, during the Commitment Period, to make Revolving Loans and Foreign Borrower Alternate Currency Loans pursuant to the Revolving Credit Commitment and to participate in the issuance of Letters of Credit up to the Total Commitment Amount.
"Commitment Percentage" shall mean, for each Bank, the percentage set forth opposite such Bank's name under the column headed "Commitment Percentage" as described in Schedule 1 hereto.
"Commitment Period" shall mean the period from the Closing Date to September 30, 2005 or such earlier date on which the Commitment shall have been terminated pursuant to Article VIII hereof.
"Company" shall mean a Borrower or Subsidiary.
"Companies" shall mean all Borrowers and Subsidiaries.
"Competitive Bid" shall mean an offer by a Bank to make a Competitive Bid Loan in accordance with Section 2.1B hereof.
"Competitive Bid Auction" shall mean a solicitation of Competitive Bids setting forth the Competitive Bid Rates for a Competitive Bid Loan pursuant to Section 2.1B hereof.
"Competitive Bid Auction Date" shall mean the first Business Day prior to the proposed date of borrowing of the Competitive Bid Loan, or such other time or date as to which ASI and Agent shall have mutually agreed and as to which Agent shall have notified the Banks not later than the date of the Competitive Bid Request for the first Competitive Bid Auction for which such change is to be effective.
"Competitive Bid Exposure" shall mean, at any time, of the aggregate principal amount of all Competitive Bid Loans then outstanding.
"Competitive Bid Loan" shall mean a Loan made by a Bank to ASI in accordance with Section 2.1B hereof.
"Competitive Bid Note" shall mean each Competitive Bid Note executed and delivered pursuant to Section 2.1B hereof.
"Competitive Bid Rate" shall have the meaning set forth in subpart (iii) of Section 2.1B(d) hereof.
"Competitive Bid Notice" shall mean a Competitive Bid Notice substantially in the form of the attached Exhibit F-3.
"Competitive Bid Request" shall mean a Competitive Bid Request substantially in the form of the attached Exhibit F-1.
"Compliance Certificate" shall mean a certificate, substantially in the form of the attached Exhibit E.
"Consideration" shall mean, in connection with an Acquisition, the aggregate consideration paid, including borrowed funds, cash, the issuance of securities or notes, the assumption or incurring of liabilities (direct or contingent), the payment, in excess of fair and reasonable amounts, of consulting fees or fees for a covenant not to compete and any other consideration paid for the purchase.
"Consolidated" shall mean the resultant consolidation of the financial statements of ASI and its Subsidiaries in accordance with GAAP, including principles of consolidation consistent with those applied in preparation of the consolidated financial statements referred to in Section 6.13 hereof.
"Consolidated Capital Expenditures" shall mean, for any period, the amount of capital expenditures of ASI, as determined on a Consolidated basis and in accordance with GAAP.
"Consolidated Depreciation and Amortization Charges" shall mean, for any period, the aggregate of all depreciation and amortization charges for fixed assets, leasehold improvements and general intangibles (specifically including goodwill, amortization and write-off) of ASI for such period, as determined on a Consolidated basis and in accordance with GAAP.
"Consolidated EBIT" shall mean, for any period, on a Consolidated basis and in accordance with GAAP, Consolidated Net Earnings for such period plus the aggregate amounts deducted in determining such Consolidated Net Earnings in respect of (a) income taxes and (b) Consolidated Interest Expense.
"Consolidated EBITDA" shall mean, for any period, on a Consolidated basis and in accordance with GAAP, Consolidated EBIT for such period plus the aggregate amounts deducted in determining Consolidated Net Earnings in respect of Consolidated Depreciation and Amortization Charges.
"Consolidated Interest Expense" shall mean, for any period, the interest expense of ASI for such period, as determined on a Consolidated basis and in accordance with GAAP.
"Consolidated Net Earnings" shall mean, for any period, the net income (loss) of ASI for such period, as determined on a Consolidated basis and in accordance with GAAP (excluding, however, non-recurring gains or losses aggregating at least One Million Dollars ($1,000,000) during any four consecutive fiscal quarters of ASI for which net income (loss) shall be determined).
"Consolidated Net Worth" shall mean, at any date, the Consolidated stockholders' equity of ASI, determined as of such date in accordance with GAAP (excluding, however, the effect of translation of foreign currencies from stockholders equity).
"Consolidated Total Indebtedness" shall mean all Indebtedness of ASI, as determined on a Consolidated basis and in accordance with GAAP; provided that in determining the amount of Indebtedness under any Hedge Agreement, such amount shall be the loss, if any, that would be incurred by the applicable Company under such Hedge Agreement, if such Hedge Agreement were marked to market in accordance with GAAP as of any applicable date.
"Controlled Group" shall mean a Company and each Person required to be aggregated with a Company under Code Sections 414(b), (c), (m) or (o).
"Credit Exposure" shall mean, at any time, the sum of the Dollar Equivalent of (a) the aggregate principal amount of all Revolving Loans outstanding, (b) the Foreign Borrower Exposure, (c) the Competitive Bid Exposure, and (d) the Letter of Credit Exposure.
"Debt" shall mean, collectively, all Indebtedness and other obligations incurred by Borrowers to the Banks pursuant to this Agreement and includes the principal of and interest on all Notes and each extension, renewal or refinancing thereof in whole or in part, the commitment fees, other fees and any prepayment fees payable hereunder.
"Default" shall mean an event or condition that constitutes, or with the lapse of any applicable grace period or the giving of notice or both would constitute, an Event of Default and that has not been waived by the Required Banks in writing.
"Default Rate" shall mean (a) with respect to any Loan, a rate per annum equal to two percent (2%) in excess of the rate otherwise applicable thereto, and (b) with respect to any other amount, if no rate is specified or available, a rate per annum equal to two percent (2%) in excess of the Base Rate from time to time in effect.
"Derived Fixed Rate" shall mean (a) with respect to a Eurodollar Loan, a rate per annum equal to the sum of the Applicable Margin (from time to time in effect) plus the Adjusted LIBOR Rate applicable to eurodollars, and (b) with respect to an Alternate Currency Loan, a rate per annum equal to the sum of the Applicable Margin (from time to time in effect) plus the Adjusted LIBOR Rate applicable to the relevant Alternate Currency.
"Dollar" or the sign "$" shall mean lawful money of the United States of America.
"Dollar Equivalent" of (a) an Alternate Currency Loan, shall mean the Dollar equivalent of the amount of such Alternate Currency Loan, determined by Agent on the basis of its spot rate at approximately 11:00 A.M. London time on the date two Business Days before the date of such Alternate Currency Loan, for the purchase of the relevant Alternate Currency with Dollars for delivery on the date of such Alternate Currency Loan, and (b) any other amount shall mean the Dollar equivalent of such amount, determined by Agent on the basis of its spot rate at approximately 11:00 A.M. London time on the date for which the Dollar equivalent amount of such amount is being determined, for the purchase of the relevant Alternate Currency with Dollars for delivery on such date; provided, however, that, in calculating the Dollar Equivalent for purposes of determining (i) any#nbsp;Borrower's obligation to prepay Loans pursuant to Section 2.8 hereof, or (ii) any Borrower's ability to request additional Loans pursuant to the Commitment (or of ASI to request Invitations for Competitive Bids), Agent may, in its discretion, on any Business Day (prior to payment in full of the Debt) selected by Agent, calculate the Dollar Equivalent of each such Loan. Agent shall notify ASI of the Dollar Equivalent of such Alternate Currency Loan or any other amount at the time that Dollar Equivalent shall have been determined.
"Domestic Guarantor of Payment" shall mean each of the Companies set forth on Schedule 3 hereto that shall have been designated a "Domestic Guarantor of Payment", that are each executing and delivering a Guaranty of Payment, or any other Domestic Subsidiary that shall deliver a Guaranty of Payment to Agent subsequent to the Closing Date.
"Domestic Subsidiary" shall mean a Subsidiary that shall not be a Foreign Subsidiary.
"Duff & Phelps" shall mean Duff & Phelps LLC.
"Environmental Laws" shall mean all provisions of law, statutes, ordinances, rules, regulations, permits, licenses, judgments, writs, injunctions, decrees, orders, awards and standards promulgated by the government of the United States of America or any foreign jurisdiction, or by any state or municipality thereof, or by any court, agency, instrumentality, regulatory authority or commission of any of the foregoing concerning health, safety and protection of, or regulation of the discharge of substances into, the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated pursuant thereto.
"ERISA Event" shall mean (a) the existence of a condition or event with respect to an ERISA Plan that presents a risk of the imposition of an excise tax or any other liability on a Company or of the imposition of a Lien on the assets of a Company; (b) the engagement by a Controlled Group member in a non-exempt "prohibited transaction" (as defined under ERISA Section 406 or Code Section 4975) or a breach of a fiduciary duty under ERISA that could result in liability to a Company; (c) the application by a Controlled Group member for a waiver from the minimum funding requirements of Code Section 412 or ERISA Section 302 or a Controlled Group member is required to provide security under Code Section 401(a)(29) or ERISA Section 307; (d) the occurrence of a Reportable Event with respect to any Pension Plan as to which notice is required to be provided to the PBGC; (e) the withdrawal by a Controlled Group member from a Multiemployer Plan in a "complete withdrawal" or a "partial withdrawal" (as such terms are defined in ERISA Sections 4203 and 4205, respectively); (f) the involvement of, or occurrence or existence of any event or condition that makes likely the involvement of, a Multiemployer Plan in any reorganization under ERISA Section 4241; (g) the failure of an ERISA Plan (and any related trust) that is intended to be qualified under Code Sections 401 and 501 to be so qualified or the failure of any "cash or deferred arrangement" under any such ERISA Plan to meet the requirements of Code Section 401(k); (h) the taking by the PBGC of any steps to terminate a Pension Plan or appoint a trustee to administer a Pension Plan, or the taking by a Controlled Group member of any steps to terminate a Pension Plan; (i) the failure by a Controlled Group member or an ERISA Plan to satisfy any requirements of law applicable to an ERISA Plan; (j) the commencement, existence or threatening of a claim, action, suit, audit or investigation with respect to an ERISA Plan, other than a routine claim for benefits; or (k) any occurrence by or any expectation of the incurrence by a Controlled Group member of any liability for post-retirement benefits under any Welfare Plan, other than as required by ERISA Section 601, et. seq. or Code Section 4980B.
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