-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, Y+BRy0HNYuUN1J5A+QG+PCjWWFXjLjQDSpStVfK7R3zYbA2vxtX/lctKB5oARgKY SyYLqOjFvpgWD7C8+hz6aQ== 0000805264-95-000008.txt : 19950516 0000805264-95-000008.hdr.sgml : 19950516 ACCESSION NUMBER: 0000805264-95-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GEORGIA GULF CORP /DE/ CENTRAL INDEX KEY: 0000805264 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL INORGANIC CHEMICALS [2810] IRS NUMBER: 581563799 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09753 FILM NUMBER: 95539031 BUSINESS ADDRESS: STREET 1: 400 PERIMETER CTR TERRACE STREET 2: STE 595 CITY: ATLANTA STATE: GA ZIP: 30346 BUSINESS PHONE: 4043954500 10-Q 1 GEORGIA GULF CORP 1ST QUARTER 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-9753 GEORGIA GULF CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 58-1563799 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 400 Perimeter Center Terrace, Suite 595 Atlanta, Georgia 30346 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code:(404) 395-4500 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Outstanding as of Class May 1, 1995 Common Stock, $0.01 par value................38,548,381 shares GEORGIA GULF CORPORATION FORM 10-Q QUARTERLY PERIOD ENDED MARCH 31, 1995 INDEX Page Numbers PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets as of March 31, 1995 and December 31, 1994 2 Condensed Consolidated Statements of Income for the three months ended March 31, 1995 and 1994 3 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 1995 and 1994 4 Notes to Condensed Consolidated Financial Statements as of March 31, 1995 5-6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-8 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 9 SIGNATURES 10 PART I. FINANCIAL INFORMATION Item 1. Financial Statements
GEORGIA GULF CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) March 31, December 31, 1995 1994 ASSETS Current assets Cash and cash equivalents $ 2,669 $ 1,216 Receivables 160,492 157,085 Inventories 74,672 70,667 Prepaid expenses 13,213 13,882 Deferred income taxes 7,069 7,069 Total current assets 258,115 249,919 Property, plant and equipment, at cost 465,450 447,986 Less accumulated depreciation 199,272 192,378 Property, plant and equipment, net 266,178 255,608 Other assets 3,232 2,920 Total assets $527,525 $508,447 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 83,743 $ 73,771 Interest payable 13,292 6,424 Accrued income taxes 38,550 21,537 Other accrued liabilities 20,213 21,519 Total current liabilities 155,798 123,251 Long-term debt 320,481 314,081 Deferred income taxes 39,977 39,977 Stockholders' equity Common stock - $0.01 par value 395 420 Additional paid-in capital 109,221 185,984 Retained earnings (98,347) (155,266) Total stockholders' equity 11,269 31,138 Total liabilities and stockholders' equity $527,525 $508,447 Common shares outstanding 39,489,816 42,013,116
See notes to condensed consolidated financial statements.
GEORGIA GULF CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In thousands, except share data) Three Months Ended March 31, 1995 1994 Net sales $314,026 $192,906 Operating costs and expenses Cost of sales 195,839 153,720 Selling and administrative 11,583 9,887 Total operating costs and expenses 207,422 163,607 Operating income 106,604 29,299 Other income (expense) Interest, net (8,712) (9,782) Income before income taxes 97,892 19,517 Provision for income taxes 37,735 6,787 Net income $ 60,157 $ 12,730 Net income per common share $ 1.44 $ 0.30 Weighted average common shares and equivalents outstanding 41,856,291 42,169,692
See notes to condensed consolidated financial statements.
GEORGIA GULF CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Three Months Ended March 31, 1995 1994 Cash flows from operating activities: Net income $ 60,157 $ 12,730 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 8,179 7,375 Change in assets, liabilities and other 25,124 1,225 Net cash provided by operating activities 93,460 21,330 Cash flows from financing activities: Net change in revolving credit loan 6,400 (10,700) Principal payments on long-term debt -- (3,512) Proceeds from issuance of common stock 609 1,943 Purchase and retirement of common stock (78,314) -- Dividends on common stock (3,238) -- Net cash used in financing activities (74,543) (12,269) Cash flows from investing activities: Capital expenditures (17,464) (9,083) Net cash used in investing activities (17,464) (9,083) Net change in cash and cash equivalents 1,453 (22) Cash and cash equivalents at beginning of period 1,216 3,099 Cash and cash equivalents at end of period $ 2,669 $ 3,077
See notes to condensed consolidated financial statements. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended March 31, 1995, are not necessarily indicative of the results that may be expected for the year ending December 31, 1995. For further information, refer to the consolidated financial statements and footnotes thereto included in Georgia Gulf Corporation and its subsidiaries' ("the Company") annual report for the year ended December 31, 1994. NOTE 2: INVENTORIES The major classes of inventories were as follows (in thousands): March 31, December 31, 1995 1994 Raw materials and supplies $ 32,580 $ 25,019 Finished goods 42,092 45,648 $ 74,672 $ 70,667 NOTE 3: LONG-TERM DEBT The Company refinanced its senior debt on March 30, 1995, replacing an existing revolving credit facility with an unsecured revolving credit facility permitting borrowings of up to $350,000,000 (the "New Credit Agreement"). The terms and conditions of the New Credit Agreement provide for reduced interest rates, less restrictive covenants and increased financial flexibility. The New Credit Agreement matures in March 2000, at which time any amounts outstanding thereunder are payable in full. The costs incurred in connection with the refinancing, including both the unamortized debt issuance costs associated with the terminated credit agreement and the costs related to the New Credit Agreement, were not material. As of March 31, 1995, the Company had availability of up to $225,000,000 under the terms of the New Credit Agreement. NOTE 4: STOCKHOLDERS' EQUITY The Company purchased 2,597,200 shares of common stock for $78,314,000 during the three months ended March 31, 1995. As of March 31, 1995, the Company is authorized to purchase an additional 1,572,800 shares under the common stock repurchase program. NOTE 5: SUBSEQUENT EVENT - EARLY REDEMPTION OF SUBORDINATED NOTES On April 15, 1995, the Company redeemed, at par, the $191,081,000 15% Senior Subordinated Notes ("Notes") which would have been due April 2000. The redemption of the Notes was funded using availability under the New Credit Agreement. The write-off of the remaining unamortized debt issuance costs related to the Notes was not material. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS First Quarter of 1995 Compared with the First Quarter of 1994: For the first quarter ended March 31, 1995, net income per common share was $1.44 on net income of $60.2 million and net sales of $314.0 million. This compares to net income per common share of $0.30, net income of $12.7 million and net sales of $192.9 million for the first quarter of 1994. Operating income for the first quarter of 1995 was $106.6 million, an increase of 264 percent from $29.3 million for the same period in 1994. Unexpected production outages in the chlorine/caustic soda and methanol units during the first quarter of 1995 resulted in lower sales volume as compared to the first quarter of 1994. However, the reduction in sales volume was more than offset by a 68 percent increase in the average sales price of the Company's products. The increase in sales prices outpaced higher raw material costs, which in turn resulted in improved gross margins for the quarter-to-quarter comparison. Selling and administrative expenses were $11.6 million for the first quarter of 1995, compared to $9.9 million for the same period in 1994. The increase resulted primarily from charges relating to the Company's profit sharing programs. Interest expense declined $1.1 million when comparing the first quarter of 1995 to the same period in 1994. This decline was attributable to $44.5 million of debt repayments over the past twelve months and reduced interest rates in connection with a debt refinancing early in the second quarter of 1994. The effective income tax rate for the first quarter of 1995 was 38.5%, up from 34.8% in the first quarter of 1994. The effective income tax rate increased in 1995 primarily as a result of higher taxable income, which minimized the effect of permanent tax differences. LIQUIDITY AND CAPITAL RESOURCES During the three months ended March 31, 1995, $93.5 million of cash was generated by operating activities as compared to $21.3 million for three months ended March 31, 1994. Cash flow increased due to higher net income in 1995, along with working capital fluctuations. The majority of the change in working capital was related to a $17.0 million increase in accrued income taxes in 1995. Debt increased by $6.4 million during the three months ended March 31, 1995, to a level of $320.5 million, which consisted of senior debt of $129.4 million and $191.1 million in principal amount of the Company's 15% Senior Subordinated Notes. The Company's $250 million revolving credit facility was replaced by a new $350 million revolving credit facility during the first quarter of 1995. The new revolving credit facility contains more favorable terms, including reduced interest rates, and fewer financial covenants and restrictions. On April 15, 1995, the Company used availability under this new revolving credit facility to redeem, at par, the $191.1 million 15% Senior Subordinated Notes which would have been due April 2000. Capital expenditures for the three months ended March 31, 1995, were $17.5 million as compared to $9.1 million for the same 1994 period. Construction of the vinyl compound expansion in Gallman, Mississippi is scheduled for completion in early 1996. Detailed engineering work is proceeding for the modernization and expansion of both the Pasadena, Texas cumene and the Plaquemine, Louisiana vinyl chloride monomer plants, which are scheduled for completion in mid- and late 1996, respectively. Capital expenditures will continue to increase over the next three quarters to an annual level for 1995 of approximately $85 million. The Company declared a dividend of $0.08 per share or $3.2 million during the first quarter of 1995. The Company also purchased 2.6 million shares of common stock for a cost of $78.3 million under the Company's current stock repurchase program. As of March 31, 1995, the Company is authorized to purchase an additional 1.6 million shares of common stock. Management believes that cash provided by operations and the availability under the Company's current debt agreements will provide sufficient funds to support planned capital expenditures, dividends, stock repurchases, working capital fluctuations and debt service requirements. OUTLOOK The Company had record financial results for the first quarter of 1995. With the exception of methanol, the demand for the Company's products appears to be closely tracking available supply, which is supporting a stable pricing environment. For methanol, the sharp price escalation brought on by a supply shortfall created by MTBE demand has subsided, and the selling price has returned to a more historical level. Management anticipates earnings will continue to be strong for the second quarter, but lower than the first quarter as a result of the decline in methanol pricing. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K a) The following exhibit is filed as part of this Form 10-Q Quarterly Report. EXHIBIT NO. DESCRIPTION 10 Credit Agreement dated March 30, 1995 between the Company and The Chase Manhattan Bank (National Association) as Administrative Agent b) No reports on Form 8-K were filed with the Securities and Exchange Commission during the first quarter of 1995. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GEORGIA GULF CORPORATION (Registrant) Date May 15, 1995 /s/ Jerry R. Satrum Jerry R. Satrum President and Chief Executive Officer (Principal Executive Officer) Date May 15, 1995 /s/ Richard B. Marchese Richard B. Marchese Vice President - Finance and Chief Financial Officer (Principal Financial Officer) EXHIBIT 10 [CONFORMED COPY] ************************************************************ GEORGIA GULF CORPORATION CREDIT AGREEMENT Dated as of March 30, 1995 $350,000,000 THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) as Administrative Agent ************************************************************ TABLE OF CONTENTS Page RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Section 1. Definitions and Accounting Matters . . . . . . . . . . . . .-1- 1.01 Certain Defined Terms. . . . . . . . . . . . . . . . . .-1- 1.02 Accounting Terms and Determinations. . . . . . . . . . -13- 1.03 Classes and Types of Loans . . . . . . . . . . . . . . -14- Section 2. Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . -14- 2.01 Loans. . . . . . . . . . . . . . . . . . . . . . . . . -14- 2.02 Use of Proceeds. . . . . . . . . . . . . . . . . . . . -15- 2.03 Reductions of Commitments. . . . . . . . . . . . . . . -15- 2.04 Fees . . . . . . . . . . . . . . . . . . . . . . . . . -15- 2.05 Lending Offices. . . . . . . . . . . . . . . . . . . . -16- 2.06 Several Obligations. . . . . . . . . . . . . . . . . . -16- 2.07 Notes. . . . . . . . . . . . . . . . . . . . . . . . . -16- Section 3. Borrowings, Conversions and Prepayments. . . . . . . . . . -17- 3.01 Borrowings . . . . . . . . . . . . . . . . . . . . . . -17- 3.02 Prepayments and Conversions. . . . . . . . . . . . . . -18- 3.03 Money Market Loans . . . . . . . . . . . . . . . . . . -18- Section 4. Payments of Principal and Interest . . . . . . . . . . . . -22- 4.01 Repayment of Loans . . . . . . . . . . . . . . . . . . -22- 4.02 Interest . . . . . . . . . . . . . . . . . . . . . . . -23- Section 5. Payments; Pro Rata Treatment; Computations; Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . -25- 5.01 Payments . . . . . . . . . . . . . . . . . . . . . . . -25- 5.02 Pro Rata Treatment . . . . . . . . . . . . . . . . . . -25- 5.03 Computations . . . . . . . . . . . . . . . . . . . . . -26- 5.04 Minimum and Maximum Amounts; Types . . . . . . . . . . -26- 5.05 Certain Notices. . . . . . . . . . . . . . . . . . . . -26- 5.06 Non-Receipt of Funds by the Administrative Agent . . . . . . . . . . . . . . . . -27- 5.07 Sharing of Payments, Etc.. . . . . . . . . . . . . . . -28- Section 6. Yield Protection and Illegality. . . . . . . . . . . . . . -29- 6.01 Additional Costs . . . . . . . . . . . . . . . . . . . -29- 6.02 Limitation on Types of Loans . . . . . . . . . . . . . -31- 6.03 Illegality . . . . . . . . . . . . . . . . . . . . . . -31- 6.04 Substitute Base Rate Loans . . . . . . . . . . . . . . -32- 6.05 Compensation . . . . . . . . . . . . . . . . . . . . . -32- 6.06 Capital Adequacy . . . . . . . . . . . . . . . . . . . -32- 6.07 Substitution of Lender . . . . . . . . . . . . . . . . -33- Section 7. Conditions Precedent . . . . . . . . . . . . . . . . . . . -33- 7.01 Initial Loans. . . . . . . . . . . . . . . . . . . . . -33- 7.02 Initial and Subsequent Loans . . . . . . . . . . . . . -35- Section 8. Representations and Warranties . . . . . . . . . . . . . . -35- 8.01 Corporate Existence. . . . . . . . . . . . . . . . . . -35- 8.02 Information. . . . . . . . . . . . . . . . . . . . . . -36- 8.03 Litigation . . . . . . . . . . . . . . . . . . . . . . -37- 8.04 No Breach. . . . . . . . . . . . . . . . . . . . . . . -37- 8.05 Corporate Action . . . . . . . . . . . . . . . . . . . -38- 8.06 Approvals. . . . . . . . . . . . . . . . . . . . . . . -38- 8.07 Regulations U and X. . . . . . . . . . . . . . . . . . -38- 8.08 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . -38- 8.09 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . -38- 8.10 Subsidiaries . . . . . . . . . . . . . . . . . . . . . -39- 8.11 Investment Company Act . . . . . . . . . . . . . . . . -39- 8.12 Public Utility Holding Company Act . . . . . . . . . . -39- 8.13 Ownership and Use of Properties. . . . . . . . . . . . -39- 8.14 Environmental Matters. . . . . . . . . . . . . . . . . -39- Section 9. Covenants. . . . . . . . . . . . . . . . . . . . . . . . . -40- 9.01 Reports. . . . . . . . . . . . . . . . . . . . . . . . -40- 9.02 Taxes and Claims . . . . . . . . . . . . . . . . . . . -42- 9.03 Insurance. . . . . . . . . . . . . . . . . . . . . . . -43- 9.04 Maintenance of Existence; Conduct of Business . . . . . . . . . . . . . . . . . . . . . . -43- 9.05 Maintenance of and Access to Properties . . . . . . . . . . . . . . . . . . . . . -43- 9.06 Compliance with Applicable Laws. . . . . . . . . . . . -43- 9.07 Litigation . . . . . . . . . . . . . . . . . . . . . . -44- 9.08 Leverage Ratio . . . . . . . . . . . . . . . . . . . . -44- 9.09 Interest Coverage Ratio. . . . . . . . . . . . . . . . -44- 9.10 Mergers, Asset Dispositions and Acquisitions, Etc. . . . . . . . . . . . . . . . . . -44- 9.11 Liens. . . . . . . . . . . . . . . . . . . . . . . . . -46- 9.12 Investments. . . . . . . . . . . . . . . . . . . . . . -46- 9.13 Restricted Payments. . . . . . . . . . . . . . . . . . -46- 9.14 Transactions with Affiliates . . . . . . . . . . . . . -47- 9.15 Lines of Businesses. . . . . . . . . . . . . . . . . . -47- 9.16 Environmental Matters. . . . . . . . . . . . . . . . . -48- Section 10. Defaults. . . . . . . . . . . . . . . . . . . . . . . . . -48- 10.01 Events of Default . . . . . . . . . . . . . . . . . . -48- Section 11. The Administrative Agent. . . . . . . . . . . . . . . . . -51- 11.01 Appointment, Powers and Immunities. . . . . . . . . . -51- 11.02 Reliance by Administrative Agent. . . . . . . . . . . -52- 11.03 Defaults. . . . . . . . . . . . . . . . . . . . . . . -52- 11.04 Rights as a Lender. . . . . . . . . . . . . . . . . . -53- 11.05 Indemnification . . . . . . . . . . . . . . . . . . . -53- 11.06 Non-Reliance on Administrative Agent and Other Lenders. . . . . . . . . . . . . . . . . . -54- 11.07 Failure to Act. . . . . . . . . . . . . . . . . . . . -54- 11.08 Resignation or Removal of Administrative Agent . . . . . . . . . . . . . . . . -54- 11.09 Consents under Basic Documents. . . . . . . . . . . . -55- Section 12. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . -55- 12.01 Waiver. . . . . . . . . . . . . . . . . . . . . . . . -55- 12.02 Notices . . . . . . . . . . . . . . . . . . . . . . . -56- 12.03 Expenses, Etc.. . . . . . . . . . . . . . . . . . . . -56- 12.04 Indemnification . . . . . . . . . . . . . . . . . . . -56- 12.05 Amendments, Etc.. . . . . . . . . . . . . . . . . . . -57- 12.06 Successors and Assigns. . . . . . . . . . . . . . . . -57- 12.07 Confidentiality . . . . . . . . . . . . . . . . . . . -59- 12.08 Survival. . . . . . . . . . . . . . . . . . . . . . . -59- 12.09 Captions. . . . . . . . . . . . . . . . . . . . . . . -59- 12.10 Counterparts; Integration; Severability . . . . . . . . . . . . . . . . . . . . -60- 12.11 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL . . . . . . . . . -60- Schedules SCHEDULE I - Subsidiaries SCHEDULE II - Information Package Exhibits EXHIBIT A - Form of Working Capital Loan Note EXHIBIT B - Form of Money Market Loan Note EXHIBIT C - Form of Money Market Quote Request EXHIBIT D - Form of Money Market Quote EXHIBIT E - Form of Closing Date Opinion of Counsel to Company EXHIBIT F - Form of Closing Date Opinion of Special New York Counsel to the Administrative Agent CREDIT AGREEMENT CREDIT AGREEMENT dated as of March 30, 1995 among: GEORGIA GULF CORPORATION, a corporation duly organized and validly existing under the laws of the State of Delaware (together with its successors, the "Company"); each of the lenders that is a signatory hereto (individually a "Lender" and, collectively, the "Lenders"); and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the "Administrative Agent"). The parties hereto agree as follows: Section 1. Definitions and Accounting Matters. 1.01 Certain Defined Terms. As used herein, the following terms shall have the following meanings (all terms defined in this Section 1.01 or in other provisions of this Agreement in the singular to have the same meanings when used in the plural and vice versa): "Additional Costs" shall have the meaning assigned to such term in Section 6.01(a). "Affiliate" shall mean, as to any Person, any other Person which directly or indirectly controls, or is under common control with, or is controlled by, such Person and, if such Person is an individual, any member of the immediate family (including parents, siblings, spouse, children, stepchildren, nephews, nieces and grandchildren) of such individual and any trust whose principal beneficiary is such individual or one or more members of such immediate family and any Person who is controlled by any such member or trust. As used in this definition, "control" (including, with correlative meanings, "controlled by" and "under common control with") shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise), provided that, in any event, any Person which owns directly or indirectly more than 10% of the securities having ordinary voting power for the election of directors or other governing body of a corporation or more than 10% of the partnership or other ownership interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person. Notwithstanding the foregoing, no individual shall be deemed to be an Affiliate of a corporation solely by reason of his or her being an officer or director of such corporation, and no Subsidiary of the Company shall be deemed to be an Affiliate of the Company or any other Subsidiary of the Company. "Agreement" shall mean this Credit Agreement, as amended from time to time in accordance with the terms hereof. "Applicable Lending Office" shall mean, for each Lender and for each Type of Loan, the Lending Office of such Lender (or of an affiliate of such Lender) designated for such Type of Loan below its name on the signature pages hereof or such other office of such Lender (or of an affiliate of such Lender) as such Lender may from time to time specify to the Administrative Agent and the Company as the office by which its Loans of such Type are to be made and maintained. "Applicable Margin" shall mean, with respect to any Working Capital Loan and during any Performance Period (or portion thereof), the percentage indicated below opposite the Applicable Pricing Ratio for such Performance Period (or portion thereof) (determined as a function of the Type of such Loan): Applicable Pricing Ratio Base Rate Loans Eurodollar Loans Greater than 2.00:1.00 0.0% 0.375% Greater than 0.75:1 but less than or equal to 2.00:1.00 0.0% 0.275% Less than or equal to 0.75:1.00 0.0% 0.250% "Applicable Pricing Ratio" shall mean, for any Performance Period the ratio of (x) Indebtedness of the Company and its consolidated subsidiaries, determined on a consolidated basis as at the end of the fiscal quarter (the "statement quarter") to which the financial statements received by the Administrative Agent on the first day of such Performance Period (or in the case of the first Performance Period, most recently received prior to the Closing Date) relate, to (y) Cash Flow for the period of four fiscal quarters ending at the end of the statement quarter, as set forth in a certificate of the chief financial officer or corporate controller of the Company delivered to the Administrative Agent on the first day of such Performance Period, provided that the Applicable Pricing Ratio for any portion of any Performance Period that occurs on or after the 45th day following the end of the fiscal quarter of the Company during which such Performance Period commenced shall be deemed to be greater than 2.00:1.00. "Bankruptcy Code" shall mean the United States Bankruptcy Code, as now or hereafter in effect, or any successor statute. "Base Rate" shall mean, with respect to any Base Rate Loan for any day, the rate per annum equal to the higher as of such day of (i) the Federal Funds Rate plus 1/2 of 1% or (ii) the Prime Rate. "Base Rate Loans" shall mean Loans which bear interest at a rate based upon the Base Rate. "Basic Documents" shall mean this Agreement and the Notes. "Business Day" shall mean any day other than a day on which commercial banks are authorized or required to close in New York City and, where such term is used in the definition of "Quarterly Date" in this Section 1.01 or if such day relates to the giving of notices or quotes in connection with a LIBOR Auction, a borrowing of, a payment or prepayment of principal of or interest on, a conversion of or into, or an Interest Period for, a Eurodollar Loan or a LIBOR Market Loan or a notice by the Company with respect to any such borrowing, payment, prepayment, conversion or Interest Period, which is also a day on which dealings in Dollar deposits are carried out in the London interbank market. "Capital Lease Obligations" shall mean, as to any Person, the obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) real and/or personal property which obliga- tions are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP (including Statement of Financial Accounting Standards No. 13 of the Financial Accounting Standards Board) and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP (including such Statement No. 13). "Cash Flow" shall mean, for any period, the sum (without duplication), determined on a consolidated basis for the Company and its Subsidiaries, of (i) net operating income of the Company and its Subsidiaries (calculated before provision for income taxes, interest expense, extraordinary items and income attributable to equity in Affiliates) for such period plus (ii) depreciation, amortization and other non-cash items (to the extent deducted in determining operating income) for such period plus (iii) accrued interest income (to the extent not included in determining operating income) for such period. "Chase" shall mean The Chase Manhattan Bank (National Association) and its successors. "Closing Date" shall mean the date of the initial Loans made hereunder. "Code" shall mean the Internal Revenue Code of 1986, as amended, or any successor statute. "Controlled Group" shall mean 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, are treated as a single employer under Section 414 of the Code. "Default" shall mean an Event of Default or an event which with notice or lapse of time or both would, unless cured or waived, become an Event of Default. "Dollars" and "$" shall mean lawful money of the United States of America. "Environmental Laws" shall mean any and all federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, codes, plans, injunctions, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or the release of any materials into the environment. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. "Eurodollar Base Rate" shall mean, with respect to any Eurodollar Loans and LIBOR Market Loans, the rate per annum determined on the basis of the offered rate for deposits in Dollars offered for a period comparable to the Interest Period for such Loans, which appears on the display page designated as "LIBO Page" on the Reuter Monitor Money Rates Service (or such other page as may replace LIBO Page on that service) as of 11:00 A.M., London time, two Business Days prior to the first day of such Interest Period, provided that (i) if more than one such offered rate appears on such page, the "Eurodollar Base Rate" will be the arithmetic mean (rounded upward, if necessary, to the next higher 1/100th of 1%) of such offered rates; and (ii) if no such offered rates appear on such page, the "Eurodollar Base Rate" for such Interest Period will be the arithmetic mean (rounded upward, if necessary, to the next higher 1/100th of 1%) of rates quoted by not less than two major banks in New York City, selected by the Administrative Agent, at approximately 10:00 A.M., New York City time, two Business Days prior to the first day of such Interest Period, for deposits in Dollars offered to leading European banks for a period comparable to such Interest Period in an amount comparable to, in the case of Eurodollar Loans, the principal amount of the Eurodollar Loan of Chase having such Interest Period or, in the case of LIBOR Market Loans, Chase's Working Capital Commitment Percentage of the LIBOR Market Loans having such Interest Period. "Eurodollar Loans" shall mean Working Capital Loans the interest on which is determined on the basis of rates referred to in the definition of "Eurodollar Base Rate" in this Section 1.01. "Eurodollar Rate" shall mean, for any Eurodollar Loans and any LIBOR Market Loans, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) deter- mined by the Administrative Agent to be equal to (i) the Eurodollar Base Rate for such Loans for the Interest Period for such Loans divided by (ii) 1 minus the Eurodollar Reserve Requirement for such Loans for such Interest Period. "Eurodollar Reserve Requirement" shall mean, for any Eurodollar Loans and any LIBOR Market Loans for any Interest Period therefor, the average maximum rate at which reserves (including any marginal, supplemental or emergency reserves) are required to be maintained during such Interest Period under Regulation D by member banks of the Federal Reserve System in New York City with deposits exceeding one billion Dollars against "Eurocurrency liabilities" (as such term is used in Regulation D). Without limiting the effect of the foregoing, the Eurodollar Reserve Requirement shall reflect any other reserves required to be maintained by such member banks by reason of any Regulatory Change against (i) any category of liabilities which includes deposits by reference to which the Eurodollar Rate is to be determined as provided in the definition of "Eurodollar Base Rate" in this Section 1.01 or (ii) any category of extensions of credit or other assets which include Eurodollar Loans or LIBOR Market Loans. "Event of Default" shall have the meaning assigned to such term in Section 10.01 hereof. "Existing Credit Agreement" shall mean the Credit Agreement dated as of April 27, 1994 among the Company, the lenders listed on the signature pages thereof and The Chase Manhattan Bank (National Association), as administrative agent for such lenders. "Federal Funds Rate" shall mean, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) 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 by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate charged to Chase on such day on such transactions as determined by the Administrative Agent. "Fixed Rate Loans" shall mean Eurodollar Loans and, for the purposes of Section 6 hereof only, LIBOR Market Loans. "GAAP" shall mean generally accepted accounting principles as in effect from time to time consistently applied. "Gallman Indebtedness" shall mean all liabilities and obligations of the Company in respect of $17,000,000 in aggregate principal amount of industrial development revenue bonds issued or to be issued by the Mississippi Business Finance Corporation, the proceeds of which are to be used to finance the planned expansion and improvements at the Company's Gallman, Mississippi facility, including, without limitation, reimbursement obligations and obligations in respect of letters of credit issued in connection therewith, which liabilities and obligations of the Company will be secured only by the Company's existing and future real and personal property located at its Gallman, Mississippi facility. "Guaranty" by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Indebtedness of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise, of such Person (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness (whether arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securi- ties or services, to take-or-pay, or to maintain financial statement conditions or otherwise, other than agreements to purchase goods at an arm's length price in the ordinary course of business) or (ii) entered into for the purpose of assuring in any other manner the holder of such Indebtedness of the payment thereof or to protect such holder against loss in respect thereof (in whole or in part), provided that the term Guaranty shall not include endorsements for collection or deposit in the ordinary course of business. The term "Guarantee" used as a verb has a corresponding meaning. "Hazardous Substances" shall have the meaning set forth in 42 U.S.C. Section 9601(14). "Incentive Equity Plan" means the Company's 1990 Incentive Equity Plan, as the same shall be modified and supplemented and in effect from time to time. "Indebtedness" shall mean, as to any Person (determined without duplication): (i) indebtedness of such Person for borrowed money (whether by loan or the issuance and sale of debt securities) or for the deferred purchase or acquisition price of property or services, other than accounts payable (other than for borrowed money) incurred in the ordinary course of business; (ii) obligations of such Person in respect of letters of credit or similar instru- ments issued or accepted by banks and other financial insti- tutions for the account of such Person; (iii) Capital Lease Obligations of such Person; (iv) obligations of such Person to redeem or otherwise retire shares of capital stock of such Person or, in the case of the Company, any such obliga- tion to redeem or retire shares of capital stock of the Com- pany prior to November 15, 2000 (other than any such obli- gation the payment of which would constitute a Restricted Payment permitted by Section 9.13); (v) indebtedness of others of the type described in clause (i), (ii), (iii) or (iv) above secured by a Lien on the property of such Person, whether or not the respective obligation so secured has been assumed by such Person; (vi) indebtedness of others of the type described in clause (i), (ii), (iii) or (iv) above Guaranteed by such Person and (vii) deferred insurance premiums. "Interest Expense" shall mean, for any period, the sum (determined without duplication) of the aggregate amount of interest accruing during such period on Indebtedness of the Company and its Subsidiaries (on a consolidated basis), plus the interest portion of payments under Capital Lease Obligations and any capitalized interest, and minus amortization of debt discount and expense. "Interest Period" shall mean, (1) with respect to any Eurodollar Loans, the period commencing on the date such Loans are made or converted from other Types of Loans or the last day of the next preceding Interest Period with respect to such Loans and ending on the numerically corresponding day in the first, third or sixth (or, subject to the availability of deposits of the corresponding maturity to each of the Lenders in the London interbank market, second or twelfth) calendar month thereafter, as the Company may select as provided in Section 5.05 hereof, except that each such Interest Period which commences on the last Business Day of a calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Business Day of the appropriate subsequent calendar month; (2) with respect to any Set Rate Loan, the period commencing on the date such Set Rate Loan is made and ending on any Business Day up to 360 days, but at least 7 days, thereafter, as the Company may select as provided in Section 3.03(a) hereof; and (3) with respect to any LIBOR Market Loan, the period commencing on the date such LIBOR Market Loan is made and ending on the numerically corresponding day in the first, second, third, sixth or twelfth calendar month thereafter, as the Company may select as provided in Section 3.03(a) hereof, except that each Interest Period which commences on the last Business Day of a calendar month (or any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Business Day of the appropriate subsequent calendar month. Notwithstanding the foregoing: (i) each Interest Period which would otherwise end on a day which is not a Business Day shall end on the next succeeding Business Day (or, in the case of an Interest Period for Eurodollar Loans or LIBOR Market Loans, if such next succeeding Business Day falls in the next succeeding calendar month, on the next preceding Business Day); and (ii) no Interest Period for any Eurodollar Rate Loans or LIBOR Market Loans shall have a duration of less than one month and, if the Interest Period for any such Loans would otherwise be a shorter period, such Loans shall not be available hereunder. "Investments" shall have the meaning assigned to such term in Section 9.12 hereof. "Lender" and "Lenders" shall each have the meaning assigned to such terms in the preamble hereto. "LIBOR Auction" shall mean a solicitation of Money Market Quotes setting forth Money Market Margins based on the Eurodollar Rate pursuant to Section 3.03 hereof. "LIBOR Market Loans" shall mean Money Market Loans, the interest rates on which are determined on the basis of Eurodollar Rates pursuant to a LIBOR Auction. "Lien" shall mean, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encum- brance of any kind in respect of such asset. For the pur- poses of this Agreement, the Company and each of its Subsi- diaries shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such asset. "Liquid Investments" shall mean (i) time deposits (including certificates of deposit) maturing within 90 days of the acquisition thereof denominated in Dollars and issued by (X) a Lender or (Y) a bank or trust company having combined capital and surplus of at least $500,000,000 and which has (or which is a Subsidiary of a bank holding company which has) publicly traded debt securities rated AA or higher by Standard & Poor's Corporation or Aa-2 or higher by Moody's Investors Service, Inc.; (ii) obligations issued or guaranteed by the United States of America, with maturities not more than one year after the date of issue; and (iii) commercial paper with maturities of not more than 90 days and a published rating of not less than A-2 and P-2 (or the equivalent rating). "Loans" shall mean Money Market Loans and Working Capital Loans. "Majority Lenders" shall mean, at any time while no Working Capital Loans are outstanding, Lenders having at least 51% of the aggregate amount of the Working Capital Commitments and, at any time while Working Capital Loans are outstanding, Lenders holding at least 51% of the outstanding aggregate principal amount of Working Capital Loans. "Money Market Loan Notes" shall mean the promissory notes of the Company evidencing the Money Market Loans, substantially in the form of Exhibit B hereto. "Money Market Loans" shall mean the loans provided for by Section 3.03 hereof. "Money Market Margin" shall have the meaning assigned to such term in Section 3.03(b)(ii)(C) hereof. "Money Market Quote" shall mean an offer in accordance with Section 3.03(b) hereof by a Lender to make a Money Market Loan with one single specified interest rate. "Money Market Quote Request" shall have the meaning assigned to such term in Section 3.03(a) hereof. "Money Market Rate" shall have the meaning assigned to such term in Section 3.03(b)(ii)(D) hereof. "Notes" shall mean the Working Capital Loan Notes and the Money Market Loan Notes. "PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA. "Performance Period" shall mean each of the periods commencing on a day that a complete set of all financial statements required to be delivered to the Administrative Agent under Section 9.01(b) is received by it and ending on a day immediately preceding the day on which the next subsequent complete set of all the financial statements required to be delivered to the Administrative Agent under Section 9.01(b) is received by it; provided that the first Performance Period shall commence on the Closing Date and be based on the financial statements for December 31, 1994. "Person" shall mean an individual, a corporation, a company, a voluntary association, a partnership, a trust, an unincorporated organization or a government or any agency, instrumentality or political subdivision thereof. "Plan" shall mean 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 Code and is either (a) maintained by the Company or any member of the Controlled Group for employees of the Company or any member of the Controlled Group or (b) maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which the Company or any member of the Controlled Group is then making or accruing an obligation to make contribu- tions or has within the preceding five plan years made contributions. "Post-Default Rate" shall mean, in respect of any principal of any Loan or any other amount payable by the Company under this Agreement which is not paid when due (whether at stated maturity, by acceleration or otherwise), a rate per annum during the period commencing on the due date until such amount is paid in full equal to the sum of 2% plus the Base Rate as in effect from time to time plus the Applicable Margin for Base Rate Loans. "Prime Rate" shall mean the rate of interest from time to time announced by Chase at the Principal Office as its prime commercial lending rate. Each change in the interest rate provided for herein resulting from a change in the Prime Rate shall take effect at the time of such change in the Prime Rate. "Principal Office" shall mean the principal office of Chase, presently located at 1 Chase Manhattan Plaza, New York, New York 10081. "Quarterly Dates" shall mean the last Business Day of each January, April, July and October. "Regulation D" shall mean Regulation D of the Board of Governors of the Federal Reserve System as the same may be amended or supplemented from time to time. "Regulatory Change" shall mean, with respect to any Lender, any change on or after the date of this Agreement in United States federal, state or foreign laws or regulations (including Regulation D) or the adoption or making on or after such date of any interpretations, directives or requests applying to a class of lenders including such Lender of or under any United States federal or state, or any foreign, laws or regulations (whether or not having the force of law) by any court or governmental or monetary authority charged with the interpretation or administration thereof. "Release" shall have the meaning set forth in 42 U.S.C. Section 9601(22), but shall not include any "federally permitted release" as defined in 42 U.S.C. Section 9601(10). The term "Released" shall have a corresponding meaning. "Restricted Payment" shall mean dividends (in cash, property or obligations) on, or other payments or distributions on account of, or the setting apart of money for a sinking or other analogous fund for the purchase, redemption, retirement or other acquisition of, any shares of any class of capital stock of the Company, or the exchange or conversion of any shares of any class of capital stock of the Company for or into any obligations of or shares of any other class of capital stock of the Company or any other property, but excluding dividends payable solely in, or exchanges or conversions for or into, shares of common stock of the Company. "Set Rate Auction" shall mean a solicitation of Money Market Quotes setting forth Money Market Rates pursuant to Section 3.03 hereof. "Set Rate Loans" shall mean Money Market Loans the interest rates on which are determined on the basis of Money Market Rates pursuant to a Set Rate Auction. "Subsidiary" shall mean, with respect to any Person, any corporation of which at least a majority of the outstanding shares of stock having by the terms thereof 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 of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more of the Subsidiaries of such Person or by such Person and one or more of the Subsidiaries of such Person; provided that Systronics, Inc. shall not be deemed to be a Subsidiary of the Company for purposes hereof. "Type" shall have the meaning assigned to such term in Section 1.03 hereof. "Unfunded Liabilities" shall mean, with respect to any Plan, at any time, the amount (if any) by which (a) the present value of all benefits under such Plan exceeds (b) 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, but only to the extent that such excess represents a potential liability of the Company or any member of the Controlled Group to the PBGC or such Plan under Title IV of ERISA. "Wholly-Owned Subsidiary" shall mean a Subsidiary of the Company all of whose outstanding shares of capital stock (except directors' qualifying shares) are directly or indirectly owned by the Company. "Working Capital Availability Period" shall mean the period from and including the date hereof to but not including March 30, 2000. "Working Capital Commitment" shall mean, as to any Lender, the obligation of such Lender to make Working Capital Loans in an aggregate principal amount at any one time outstanding up to but not exceeding the amount set forth opposite such Lender's name on the signature pages hereto under the caption "Working Capital Commitment" (as the same may be reduced from time to time pursuant to Section 2.03 hereof). "Working Capital Commitment Percentage" shall mean, as to any Lender, the percentage equivalent of a fraction the numerator of which is the Working Capital Commitment of such Lender and the denominator of which is the aggregate amount of the Working Capital Commitments of all Lenders. "Working Capital Loan" shall mean, as to any Lender, any loan made by such Lender pursuant to Section 2.01(a) hereof. "Working Capital Loan Notes" shall mean the promissory notes of the Company evidencing the Working Capital Loans, substantially in the form of Exhibit A hereto. "Working Capital Obligations" shall mean, as at any date of determination thereof, the sum of the following (determined without duplication): (i) the aggregate principal amount of Working Capital Loans outstanding hereunder plus (ii) the aggregate principal amount of Money Market Loans outstanding hereunder. 1.02 Accounting Terms and Determinations. Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all determinations with respect to accounting matters hereunder shall be made, and all financial statements and certificates and reports as to financial matters required to be delivered hereunder shall be prepared, in accordance with GAAP; provided that if any change in GAAP in itself materially affects the calculation of any financial covenant in Section 9, the Company may by notice to the Administrative Agent, or the Administrative Agent (at the request of the Majority Lenders) may by notice to the Company, require that such covenant thereafter be calculated in accordance with GAAP as in effect, and applied by the Company, immediately before such change in GAAP occurs. If such notice is given, the compliance certificates delivered pursuant to Section 9.01 after such change occurs shall be accompanied by reconciliations of the difference between the calculation set forth therein and a calculation made in accordance with GAAP as in effect from time to time after such change occurs. To enable the ready determination of compliance with the covenants set forth in Section 9 hereof, the Company will not change from December 31 in each year the date on which its fiscal year ends, nor from March 31, June 30 and September 30 the dates on which the first three fiscal quarters in each fiscal year end. 1.03 Classes and Types of Loans. Loans hereunder are classified as either Working Capital Loans or Money Market Loans by reference to the provisions hereof under which participation in the related borrowings are determined (i.e., a "Working Capital Loan" is included in a borrowing in which all Lenders participate and a "Money Market Loan" is included in a borrowing in which the Lender participants are determined on the basis of their bids in accordance with Section 3.03). Working Capital Loans and Money Market Loans are divided into "Types". The "Type" of a Working Capital Loan refers to the determination whether such Loan is a Eurodollar Loan or a Base Rate Loan. The "Type" of Money Market Loan refers to the determination whether such Loan is a Set Rate Loan or a LIBOR Market Loan. Working Capital Loans and Money Market Loans are sometimes identified by Type (e.g., a "Eurodollar Working Capital Loan" indicates that such Loan is both a Eurodollar Loan and a Working Capital Loan). Section 2. Loans. 2.01 Loans. (a) Working Capital Loans. Each Lender severally agrees that, from time to time during the Working Capital Availability Period, it shall make, subject to the terms of this Agreement, loans to the Company in an aggregate principal amount at any one time outstanding which, together with an amount equal to the product of (x) its Working Capital Commitment Percentage times (y) all Money Market Loans shall not exceed its Working Capital Commitment, as reduced from time to time pursuant to Section 2.03 hereof; provided that the aggregate amount of all Working Capital Obligations shall not at any time exceed the aggregate of the Working Capital Commitments as reduced from time to time pursuant to Section 2.03 hereof. (b) Money Market Loans. In addition to Working Capital Loans, the Company may from time to time during the Working Capital Availability Period request the Lenders to make offers to make Money Market Loans to the Company as set forth in Section 3.03. The Lenders may, but shall have no obligation to, make such offers and the Company may, but shall have no obligation to, accept any such offers; provided that the aggregate principal amount of all Working Capital Obligations shall not at any time exceed the aggregate amount of the Working Capital Commitments as reduced from time to time pursuant to Section 2.03 hereof. 2.02 Use of Proceeds. Proceeds of the Loans shall be used by the Company for working capital purposes and any other corporate purposes not prohibited by this Agreement, including the repayment of amounts outstanding under the Existing Credit Agreement and the repayment of the Company's 15% Senior Subordinated Notes due April 15, 2000. None of such proceeds shall be used, directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of buying or carrying any margin stock (within the meaning of Regulation U or X of the Board of Governors of the Federal Reserve System). 2.03 Reductions of Commitments. (a) Mandatory. The Working Capital Commitments shall terminate on the last day of the Working Capital Availability Period. (b) Optional. The Company shall have the right to terminate or reduce the Working Capital Commitments at any time or from time to time, provided that: (i) the Company shall give notice of each such termination or reduction to the Administrative Agent as provided in Section 5.05 hereof and (ii) each partial reduction shall be in an aggregate amount at least equal to $5,000,000 (or in larger multiples of $1,000,000). (c) No Reinstatement. Commitments once terminated or reduced may not be reinstated. 2.04 Fees. (a) Facility Fee. The Company shall pay to the Administrative Agent for the account of the Lenders ratably a facility fee for each day at a per annum rate equal to the Facility Fee Rate for such day. Such facility fee shall accrue from and including the Closing Date to but excluding the date on which the Working Capital Commitments are terminated in their entirety, on the aggregate amount of the Working Capital Commitments (whether used or unused) in effect on each day during such period. Accrued facility fees shall be payable on the Quarterly Dates and on the date on which the Working Capital Commitments are terminated in their entirety. The "Facility Fee Rate" shall mean for any day during any Performance Period, (i) 0.25% if the Applicable Pricing Ratio for such Performance Period is greater than 2.00 to 1.00, (ii) 0.125% if the Applicable Pricing Ratio for such Performance Period is greater than 0.75 to 1.00 but less than or equal to 2.00 to 1.00 or (iii) 0.10% if the Applicable Pricing Ratio for such Performance Period is less than or equal to 0.75 to 1.00. (b) Administration Fee. The Company shall pay to the Administrative Agent on each anniversary of the Closing Date, so long as any of the Working Capital Commitments are in effect and until payment in full of all Loans hereunder and payment in full of all interest thereon and all other amounts payable hereunder, an annual administration fee in the amount set forth in the letter agreement (the "Fee Letter") dated as of March 21, 1995 between the Company and the Administrative Agent or as otherwise from time to time agreed between the Company and the Administrative Agent. The Company shall also pay to the Administrative Agent fees in connection with each Money Market Quote Request at the time and in the amount set forth in the Fee Letter or as otherwise from time to time agreed between the Company and the Administrative Agent. 2.05 Lending Offices. The Loans of each Type made by each Lender shall be made and maintained at such Lender's Applicable Lending Office for Loans of such Type. 2.06 Several Obligations. The failure of any Lender to make any Loan to be made by it on the date specified therefor shall not relieve any other Lender of its obligation to make its Loan on such date, but neither the Administrative Agent nor any Lender shall be responsible for the failure of any other Lender to make a Loan to be made by such other Lender. 2.07 Notes. (a) Working Capital Loans. The Working Capital Loans made by each Lender shall be evidenced by a single Working Capital Loan Note of the Company in substantially the form of Exhibit A hereto, dated the date of this Agreement, payable to the order of such Lender and otherwise duly completed. (b) Money Market Loans. The Money Market Loans made by any Lender shall be evidenced by a single promissory note of the Company in substantially the form of Exhibit B hereto, dated the date of the delivery of such Note to the Administrative Agent under this Agreement, payable to the order of such Lender and otherwise duly completed. (c) Note Schedules. Each Lender is hereby authorized by the Company to endorse on the schedule (or a continuation thereof) attached to each Note of such Lender, to the extent applicable, the date, amount, interest rate, Type of and the Interest Period (if any) for each Loan made by such Lender to the Company hereunder and evidenced by such Note, and the date and amount of each payment or prepayment of principal of such Loan received by such Lender; provided that any failure by such Lender to make any such endorsement shall not affect the obligations of the Company under such Note or hereunder in respect of such Loan. Section 3. Borrowings, Conversions and Prepayments. 3.01 Borrowings. (a) Working Capital Loans. The Company shall give the Administrative Agent notice of each borrowing of Working Capital Loans to be made hereunder as provided in Section 5.05 hereof. Not later than 11:00 a.m. New York time on the date specified for each such borrowing here- under, each Lender shall make available the amount of the Loan to be made by it on such date to the Administrative Agent, at the Principal Office, in immediately available funds, for the account of the Company. The amount so received by the Administrative Agent shall, subject to the terms and conditions of this Agreement, be made available to the Company by depositing the same, in immediately available funds, in an account designated by the Company maintained with the Administrative Agent at the Principal Office. (b) Money Market Loans. Requests by the Company of offers to make Money Market Loans shall be made as provided in Section 3.03. 3.02 Prepayments and Conversions. (a) Optional Prepayments and Conversions. The Company shall have the right to prepay Working Capital Loans and to convert Working Capital Loans of one Type into Working Capital Loans of a different Type, at any time or from time to time, provided that the Company shall give the Administrative Agent notice of each such prepayment as provided in Section 5.05 hereof. The Company may not prepay Money Market Loans or convert Money Market Loans from one Type to a different Type, except that the Company may prepay Money Market Loans to the extent required pursuant to Section 3.02(b) hereof. (b) Mandatory Prepayments. On the date of each reduction of Working Capital Commitments pursuant to Section 2.03(b), the Company shall prepay Loans, together with accrued interest on the principal amount prepaid, to the extent (if any) required so that the aggregate principal amount of Loans outstanding immediately after such prepayment will not exceed the aggregate amount of the Working Capital Commitments after giving effect to such reduction. Any prepayment pursuant to this subsection (b) shall be applied, first, to Working Capital Loans and second, to Money Market Loans, pro rata. 3.03 Money Market Loans. (a) When, pursuant to Section 2.01(b), the Company wishes to request offers to make Money Market Loans, it shall give the Administrative Agent (which shall promptly notify the Lenders) notice (a "Money Market Quote Request") no later than 11:00 a.m. New York time on (x) the fourth Business Day prior to the date of borrowing proposed therein, in the case of a LIBOR Auction or (y) the Business Day next preceding the date of borrowing proposed therein, in the case of a Set Rate Auction (or, in any such case, such other time and date as the Company and the Administrative Agent, with the consent of Majority Lenders, may agree). The Company may request offers to make Money Market Loans for up to three different Interest Periods in a single notice (for which purpose Interest Periods in different numbered clauses of the definition of the term "Interest Period" shall be deemed to be different Interest Periods even if they are coterminous); provided that the request for each separate Interest Period shall be deemed to be a separate Money Market Quote Request for a separate borrowing (but for purposes of determining any administrative agency fees payable to the Administrative Agent in respect of same, such a request shall be deemed to be a request for only one Money Market borrowing). Each such notice shall be substantially in the form of Exhibit C hereto and shall specify as to each Money Market borrowing: (i) the proposed date of such borrowing, which shall be a Business Day; (ii) the aggregate amount of such borrowing, which shall be at least $5,000,000 (or in larger multiples of $1,000,000) but shall not cause the limits specified in Section 2.01(b) hereof to be violated; (iii) the duration of the Interest Period applicable thereto; (iv) whether the Money Market Quotes requested are to set forth a Money Market Margin or a Money Market Rate; and (v) if the Money Market Quotes requested are to set forth a Money Market Rate, the date on which the Money Market Quotes are to be submitted if it is before the proposed date of borrowing (the date on which such Money Market Quotes are to be submitted is called the "Quotation Date"). Except as otherwise provided in this Section 3.03(a), no Money Market Quote Request shall be given within five Business Days (or such other number of days as the Company and the Administrative Agent, with the consent of the Majority Lenders, may agree) of any other Money Market Quote Request. (b) (i) Each Lender may submit one or more Money Market Quotes, each containing an offer to make a Money Market Loan in response to any Money Market Quote Request; provided that, if the Company's request under Section 3.03(a) hereof specifies more than one Interest Period, such Lender may make a single submission containing one or more Money Market Quotes for each such Interest Period. Each Money Market Quote must be submitted to the Administrative Agent not later than (x) 2:00 p.m. New York time on the fourth Business Day prior to the proposed date of borrowing, in the case of a LIBOR Auction or (y) 10:00 a.m. New York time on the Quotation Date, in the case of a Set Rate Auction (or, in any such case, such other time and date as the Company and the Administrative Agent, with the consent of the Majority Lenders, may agree); provided that any Money Market Quote submitted by Chase (or its Applicable Lending Office) may be submitted, and may only be submitted, if Chase (or such Applicable Lending Office) notifies the Company of the terms of the offer contained therein not later than (x) 1:00 p.m. New York time on the fourth Business Day prior to the proposed date of borrowing, in the case of a LIBOR Auction or (y) 9:45 a.m. New York time on the Quotation Date, in the case of a Set Rate Auction. Subject to Sections 6.02(b), 6.03, 7 and 10 hereof, any Money Market Quote so made shall be irrevocable except with the written consent of the Administrative Agent given on the written instructions of the Company. (ii) Each Money Market Quote shall be substantially in the form of Exhibit D hereto and shall specify: (A) the proposed date of borrowing and the Interest Period therefor; (B) the principal amount of the Money Market Loan for which each such offer is being made, which principal amount shall be at least $5,000,000 or a larger multiple of $1,000,000; provided that the aggregate principal amount of all Money Market Loans for which a Lender submits Money Market Quotes (x) may be greater or less than the Working Capital Commitment of such Lender but (y) may not exceed the principal amount of the borrowing for which offers were requested; (C) in the case of a LIBOR Auction, the margin above or below the applicable Eurodollar Rate (the "Money Market Margin") offered for each such Money Market Loan, expressed as a percentage (rounded upwards, if necessary, to the nearest 1/10,000th of 1%) to be added to or subtracted from the applicable Eurodollar Rate; (D) in the case of a Set Rate Auction, the rate of interest per annum (rounded upwards, if necessary, to the nearest 1/10,000th of 1%) offered for each such Money Market Loan (the "Money Market Rate"); and (E) the identity of the quoting Lender. Unless otherwise agreed by the Administrative Agent and the Company, no Money Market Quote shall contain qualifying, conditional or similar language or propose terms other than or in addition to those set forth in the applicable Money Market Quote Request and, in particular, no Money Market Quote may be conditioned upon acceptance by the Company of all (or some specified minimum) of the principal amount of the Money Market Loan for which such Money Market Quote is being made. (c) The Administrative Agent shall (x) in the case of a Set Rate Auction, as promptly as practicable after the Money Market Quote is submitted (but in any event not later than 10:15 a.m. New York time) or (y) in the case of a LIBOR Auction, by 4:00 p.m. New York time on the day a Money Market Quote is submitted, notify the Company of the terms (i) of any Money Market Quote submitted by a Lender that is in accordance with Section 3.03(b) hereof and (ii) of any Money Market Quote that amends, modifies or is otherwise inconsistent with a previous Money Market Quote submitted by such Lender with respect to the same Money Market Quote Request. Any such subsequent Money Market Quote shall be disregarded by the Administrative Agent unless such subsequent Money Market Quote is submitted solely to correct a manifest error in such former Money Market Quote. The Administrative Agent's notice to the Company shall specify (A) the aggregate principal amount and Interest Period of each Money Market borrowing for which offers have been received and (B) the respective principal amounts and Money Market Margins or Money Market Rates, as the case may be, so offered by each Lender (identifying the Lender that made each Money Market Quote). (d) Not later than 11:00 a.m. New York time on (x) the third Business Day prior to the proposed date of borrowing, in the case of a LIBOR Auction or (y) the Quotation Date, in the case of a Set Rate Auction (or, in any such case, such other time and date as the Company and the Administrative Agent, with the consent of the Majority Lenders, may agree), the Company shall notify the Administrative Agent of its acceptance or nonacceptance of the offers so notified to it pursuant to Section 3.03(c) hereof (and the failure of the Company to give such notice by such time shall constitute nonacceptance) and the Administrative Agent shall promptly notify each affected Lender. In the case of acceptance, such notice shall specify the aggregate principal amount of offers for each Interest Period that are accepted. The Company may accept any Money Market Quote in whole or in part; provided that: (i) the aggregate principal amount of Money Market Loans borrowed may not exceed the applicable amount set forth in the related Money Market Quote Request; (ii) the aggregate principal amount of each Money Market borrowing shall be at least $5,000,000 (or in larger multiples of $1,000,000) but shall not cause the limits specified in Section 2.01(b) hereof to be violated; (iii) acceptance of offers may be made only in ascending order of Money Market Margins or Money Market Rates, as the case may be; (iv) the Company may not accept any offer where the Administrative Agent has advised the Company that such offer fails to comply with Section 3.03(b)(ii) hereof or otherwise fails to comply with the requirements of this Agreement (including, without limitation, Section 2.01(b) hereof); and (v) any Money Market Quote accepted in part shall be at least $5,000,000 or in larger multi- ples of $1,000,000, except that if offers are made by two or more Lenders with the same Money Market Margins or Money Market Rates, as the case may be, for a greater aggregate principal amount than the amount in respect of which offers are accepted for the related Interest Period, the principal amount of Money Market Loans in respect of which such offers are accepted shall be allocated by the Company among such Lenders as nearly as possible (in multiples of $1,000,000) in proportion to the aggregate principal amount of such offers. Determinations by the Company of the amounts of Money Market Loans shall be conclusive in the absence of manifest error. (e) Any Lender whose offer to make any Money Market Loan has been accepted shall, not later than 1:00 p.m. New York time on the date specified for the making of such Loan, make the amount of such Loan available to the Administrative Agent at the Principal Office in immediately available funds, for account of the Company. The amount so received by the Administrative Agent shall, subject to the terms and conditions of this Agreement, be made available to the Company on such date by depositing the same, in immediately available funds, in an account of the Company maintained with Chase at the Principal Office designated by the Company. Section 4. Payments of Principal and Interest. 4.01 Repayment of Loans. (a) The Working Capital Loans shall mature on the last day of the Working Capital Availability Period. (b) The Money Market Loans shall mature on the last day of the Interest Period applicable thereto. 4.02 Interest. The Company will pay to the Administrative Agent for the account of each Lender interest on the unpaid principal amount of each Loan made by such Lender for the period commencing on the date of such Loan to but excluding the date such Loan shall be paid in full, at the following rates per annum: (a) if such Loan is a Base Rate Loan, the Base Rate plus the Applicable Margin; (b) if such Loan is a Eurodollar Loan, the Eurodollar Rate plus the Applicable Margin; (c) if such Loan is a LIBOR Market Loan, the Eurodollar Rate plus (or minus) the Money Market Margin quoted by the Lender making such Loan in accordance with Section 3.03 hereof; and (d) if such Loan is a Set Rate Loan, the Money Market Rate for such Loan for the Interest Period therefor quoted by the Lender making such Loan in accordance with Section 3.03 hereof. Notwithstanding any of the foregoing, the Company will pay to the Administrative Agent for the account of each Lender interest at the applicable Post-Default Rate on any principal of any Loan made by such Lender and on any other amount payable by the Company hereunder to or for the account of such Lender (but, if such amount is interest, only to the extent legally enforceable), which shall not be paid in full when due (whether at stated maturity, by acceleration or otherwise), for the period commencing on the due date thereof until the same is paid in full. Accrued interest on each Loan shall be payable (i) if such Loan is a Base Rate Loan, on each Quarterly Date, (ii) if such Loan is a Eurodollar Loan or Money Market Loan, on the last day of the Interest Period for such Loan (and, if such Interest Period exceeds 90 days (in the case of a Set Rate Loan) or three months' duration (in the case of a Eurodollar or LIBOR Market Loan), quarterly, commencing on the first quarterly anniversary of the first day of such Interest Period), and (iii) in any event, upon the payment, prepayment or conversion thereof, but only on the principal so paid or prepaid or converted; provided that interest payable at the Post-Default Rate shall be payable from time to time on demand of the Administrative Agent or the Majority Lenders. Promptly after the determination of any interest rate provided for herein or any change therein, the Administrative Agent shall notify the Lenders and the Company thereof. Notwithstanding the foregoing provisions of this Section 4.02, if at any time the rate of interest set forth above on any Loan of any Lender (the "Stated Rate" for such Loan) exceeds the maximum non-usurious interest rate permissible for such Lender to charge commercial borrowers under applicable law (the "Maximum Rate" for such Lender), the rate of interest charged on such Loan of such Lender hereunder shall be limited to the Maximum Rate for such Lender. In the event the Stated Rate for any Loan of a Lender that has theretofore been subject to the preceding paragraph at any time is less than the Maximum Rate for such Lender, the principal amount of such Loan shall bear interest at the Maximum Rate for such Lender until the total amount of interest paid to such Lender or accrued on its Loans hereunder equals the amount of interest which would have been paid to such Lender or accrued on such Lender's Loans hereunder if the Stated Rate had at all times been in effect. In the event, upon payment in full of all amounts payable hereunder, the total amount of interest paid to any Lender or accrued on such Lender's Loans under the terms of this Agreement is less than the total amount of interest which would have been paid to such Lender or accrued on such Lender's Loans if the Stated Rate had, at all times, been in effect, then the Company shall, to the extent permitted by applicable law, pay to the Administrative Agent for the account of such Lender an amount equal to the difference between (a) the lesser of (i) the amount of interest which would have accrued on such Lender's Loans if the Maximum Rate for such Lender had at all times been in effect or (ii) the amount of interest which would have accrued on such Lender's Loans if the Stated Rate had at all times been in effect and (b) the amount of interest actually paid to such Lender or accrued on its Loans under this Agreement. In the event any Lender ever receives, collects or applies as interest any sum in excess of the Maximum Rate for such Lender, such excess amount shall be applied to the reduction of the principal balance of its Loans or to other amounts (other than interest) payable hereunder, and if no such principal is then outstanding, such excess or part thereof remaining shall be paid to the Company. Section 5. Payments; Pro Rata Treatment; Computations; Etc. 5.01 Payments. Except to the extent otherwise provided herein, all payments of principal, interest and other amounts to be made by the Company hereunder and under the Notes shall be made in Dollars, in immediately available funds, to the Administrative Agent at the Principal Office, not later than 11:00 a.m. New York time on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day). The Administrative Agent, or any Lender for whose account any such payment is made, may (but shall not be obligated to) debit the amount of any such payment which is not made by such time to any ordinary deposit account of the Company with the Administrative Agent or such Lender, as the case may be. The Company shall, at the time of making each payment hereunder or under any Note, specify to the Administrative Agent the Loans or other amounts payable by the Company hereunder to which such payment is to be applied (and in the event that it fails to so specify, or if an Event of Default has occurred and is continuing, the Administrative Agent may apply such payment as it may elect in its sole discretion, but subject to the other terms and conditions of this Agreement, including without limitation, Section 5.02 hereof). Each payment received by the Administrative Agent hereunder or under any Note for the account of a Lender shall be paid promptly to such Lender, in immediately available funds, for the account of such Lender's Applicable Lending Office. If the due date of any payment hereunder or under any Note would otherwise fall on a day which is not a Business Day such date shall be extended to the next succeeding Business Day and interest shall be payable for any principal so extended for the period of such extension. 5.02 Pro Rata Treatment. Except to the extent otherwise provided herein: (a) each borrowing from the Lenders under Section 2.01(a) hereof shall be made from the Lenders, each payment of facility fees under Section 2.04 hereof shall be made for the account of the Lenders, and each termination or reduction of the Working Capital Commitments under Section 2.03 hereof shall be applied to the Working Capital Commitments of the Lenders, pro rata according to the Lenders' respective percentages of the Working Capital Commitments; (b) each payment by the Company of principal of or interest on Working Capital Loans of a particular Type (other than payments in respect of Working Capital Loans of individual Lenders provided for by Section 6 hereof) shall be made to the Administrative Agent for the account of the Lenders pro rata in accordance with the respective unpaid principal amounts of such Working Capital Loans held by the Lenders; and (c) each conversion of Working Capital Loans of a particular Type (other than conversions of Working Capital Loans of individual Lenders pursuant to Section 6.04 hereof) shall be made pro rata among the Lenders in accordance with the respective principal amounts of such Working Capital Loans held by the Lenders. 5.03 Computations. Interest on Money Market Loans and Eurodollar Loans and fees shall be computed on the basis of a year of 360 days and actual days elapsed (including the first day but excluding the last day) occurring in the period for which payable and interest on Base Rate Loans shall be computed on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed (including the first day but excluding the last day) occurring in the period for which payable. 5.04 Minimum and Maximum Amounts; Types. Each borrowing, conversion and prepayment of principal of Working Capital Loans shall be in an aggregate principal amount equal to $1,000,000 (or a larger multiple of $1,000,000 in the case of Eurodollar Loans or $500,000 in the case of Base Rate Loans, except that any borrowing of Working Capital Loans may be in the aggregate amount of the unused portion of the Working Capital Commitments provided that such unused portion exceeds $1,000,000). Borrowings, conversions or prepayments of Working Capital Loans of different Types or, in the case of Eurodollar Loans, having different Interest Periods, made at the same time hereunder shall be deemed separate borrowings, conversions and prepayments for purposes of the foregoing, one for each Type or Interest Period. Notwithstanding anything to the contrary contained in this Agreement there shall not be, at any one time, more than six Interest Periods in effect with respect to Eurodollar Loans. 5.05 Certain Notices. Except as specified in Section 3.03 with respect to Money Market Loans, notices to the Administrative Agent of terminations or reductions of Working Capital Commitments, of borrowings, conversions and prepayments of Loans and of the duration of Interest Periods shall be irrevocable and shall be effective only if received by the Administrative Agent not later than 11:00 a.m. New York time on the number of Business Days prior to the date of the relevant termination, reduction, borrowing, conversion and/or prepayment specified below: Number of Business Notice Days Prior Termination or reduction of Commitments 1 Borrowing or prepayment of Base Rate Loans same day Borrowing or prepayment of, conversion of or into, or duration of Interest Period for, Eurodollar Loans 3 Prepayments required pursuant to Section 3.02(b) 1 Each such notice of termination or reduction shall specify the amount of the Working Capital Commitments to be terminated or reduced. Each such notice of borrowing, conversion or prepayment shall specify the amount and Type of the Loans to be borrowed, converted or prepaid (subject to Sections 3.02(a) and 5.04 hereof), the date of borrowing, conversion or prepayment (which shall be a Business Day) and, in the case of Eurodollar Loans, the duration of the Interest Period therefor (subject to the definition of Interest Period). Each such notice of duration of an Interest Period shall specify the Loans to which such Interest Period is to relate. The Administrative Agent shall promptly notify the affected Lenders of the contents of each such notice. In the event that the Company fails to select the duration of any Interest Period for any Eurodollar Loans within the time period and otherwise as provided in this Section 5.05, such Loans (if outstanding as Eurodollar Loans) will be automatically converted into Base Rate Loans on the last day of the then current Interest Period for such Loans or (if outstanding as Base Rate Loans) will remain as, or (if not then outstanding) will be made as, Base Rate Loans. 5.06 Non-Receipt of Funds by the Administrative Agent. Unless the Administrative Agent shall have been notified by a Lender or the Company (the "Payor") prior to the date on which such Lender is to make payment to the Administrative Agent of the proceeds of a Loan to be made by it hereunder or the Company is to make a payment to the Administrative Agent for the account of one or more of the Lenders, as the case may be (such payment being herein called the "Required Payment"), which notice shall be effective upon receipt, that the Payor does not intend to make the Required Payment to the Administrative Agent, the Administrative Agent may assume that the Required Payment has been made and may, in reliance upon such assumption (but shall not be required to), make the amount thereof available to the intended recipient on such date and, if the Payor has not in fact made the Required Payment to the Administrative Agent, the recipient of such payment shall, on demand, pay to the Administrative Agent the amount made available to it together with interest thereon in respect of the period commencing on the date such amount was so made available by the Administrative Agent until the date the Administrative Agent recovers such amount at a rate per annum equal to the Federal Funds Rate for such period. 5.07 Sharing of Payments, Etc. The Company agrees that, in addition to (and without limitation of) any right of set-off, bankers' lien or counterclaim a Lender (or any bank controlled by such Lender) may otherwise have, each Lender (or any bank controlled by such Lender) shall be entitled, at its option, to offset balances held by it for the account of the Company at any of its offices, in Dollars or in any other currency, against any principal of or interest on any of such Lender's Loans to the Company hereunder or other obligation of the Company hereunder, which is not paid when due (regardless of whether such balances are then due to the Company), in which case it shall promptly notify the Company and the Administrative Agent thereof, provided that such Lender's failure to give such notice shall not affect the validity thereof. If a Lender (or any bank controlled by such Lender) shall obtain payment of any principal of or interest on any Working Capital Loans made by it under this Agreement or other obligation then due to such Lender hereunder, through the exercise of any right of set-off, banker's lien, counterclaim or similar right, or otherwise, such Lender shall promptly purchase from the other Lenders participations in the Working Capital Loans made or other obligations held, by the other Lenders in such amounts, and make such other adjustments from time to time as shall be equitable to the end that all the Lenders shall share the benefit of such payment (net of any expenses which may be incurred by such Lender in obtaining or preserving such benefit) pro rata in accordance with the unpaid principal and interest on the Working Capital Loans or other obligations then due to each of them. To such end all the Lenders shall make appropriate adjustments among themselves (by the resale of participations sold or otherwise) if such payment is rescinded or must otherwise be restored. The Company agrees, to the fullest extent it may effectively do so under applicable law, that any Person purchasing a participation in the Working Capital Loans made or other obligations held, by another Person, whether or not acquired pursuant to the foregoing arrangements, may exercise all rights of set-off, bankers' lien, counterclaim or similar rights with respect to such participation as fully as if such Lender were a direct holder of Loans or other obligations in the amount of such participation. Nothing contained herein shall require any Lender to exercise any such right or shall affect the right of any Lender to exercise, and retain the benefits of exercising, any such right with respect to any other indebtedness or obligation of the Company. Section 6. Yield Protection and Illegality. 6.01 Additional Costs. (a) The Company shall pay to the Administrative Agent for the account of each Lender from time to time such amounts as such Lender may determine to be necessary to compensate it for any costs incurred by such Lender which such Lender determines are attributable to its making or maintaining of any Fixed Rate Loans hereunder or its obligation to make any of such Loans hereunder, or any reduction in any amount receivable by such Lender hereunder in respect of any of such Loans or such obligation (such increases in costs and reductions in amounts receivable being herein called "Additional Costs"), in each case resulting from any Regulatory Change which: (i) changes the basis of taxation of any amounts payable to such Lender under this Agreement or its Notes in respect of any of such Loans (other than changes which affect taxes measured by or imposed on the overall net income of such Lender or of its Applicable Lending Office for any of such Loans by the jurisdiction in which such Lender has its principal office or such Applicable Lending Office); or (ii) imposes or modifies any reserve, special deposit, insurance assessment or similar requirements relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, such Lender (including any of such Loans or any deposits referred to in the definition of "Eurodollar Base Rate" in Section 1.01 hereof); or (iii) imposes any other condition affecting this Agreement (or any of such extensions of credit or liabilities). Each Lender will notify the Company through the Administra- tive Agent of any event occurring after the date of this Agreement which will entitle such Lender to compensation pursuant to this Section 6.01(a) as promptly as practicable after it obtains knowledge thereof and determines to request such compensation, and (if so requested by the Company through the Administrative Agent) will designate a different Applicable Lending Office for the relevant Type of Fixed Rate Loans of such Lender if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the sole opinion of such Lender, be disadvantageous to such Lender (provided that such Lender shall have no obligation to so designate an Applicable Lending Office located in the United States of America). Each Lender will furnish the Company with a statement setting forth the basis and amount of each request by such Lender for compensation under this Section 6.01(a). If any Lender requests compensation from the Company under this Section 6.01(a), the Company may, by notice to such Lender through the Administrative Agent, suspend the obligation of such Lender to make additional Fixed Rate Loans of the relevant Type to the Company until the Regulatory Change giving rise to such request ceases to be in effect (in which case the provisions of Section 6.04 hereof shall be applicable). If the Company shall be required to pay Additional Costs to any Lender pursuant to 6.01(a)(i) in respect of taxes deducted from any payment to such Lender, the Company shall furnish to such Lender the original or a certified copy of a receipt evidencing payment of such taxes. (b) Without limiting the effect of the foregoing provisions of this Section 6.01, in the event that, by reason of any Regulatory Change, any Lender either (i) incurs Additional Costs based on or measured by the excess above a specified level of the amount of a category of deposits or other liabilities of such Lender which includes deposits by reference to which the interest rate on any Type of Fixed Rate Loans is determined as provided in this Agreement or a category of extensions of credit or other assets of such Lender which includes any Type of Fixed Rate Loans or (ii) becomes subject to restrictions on the amount of such a category of liabilities or assets which it may hold, then, if such Lender so elects by notice to the Company (with a copy to the Administrative Agent), the obligation of such Lender to make Fixed Rate Loans of the relevant Type hereunder shall be suspended until the date such Regulatory Change ceases to be in effect (in which case the provisions of Section 6.04 hereof shall be applicable). (c) Determinations and allocations by any Lender for purposes of this Section 6.01 of the effect of any Regulatory Change on its costs of maintaining its obligations to make Loans or of making or maintaining Loans or on amounts receivable by it in respect of Loans, and of the additional amounts required to compensate such Lender in respect of any Additional Costs, shall be conclusive absent manifest error, provided that such determinations and allocations are made on a reasonable basis. 6.02 Limitation on Types of Loans. Anything herein to the contrary notwithstanding, if, with respect to any Fixed Rate Loans: (a) the Administrative Agent determines (which determination shall be conclusive) that quotations of interest rates for the relevant deposits referred to in the definition of "Eurodollar Base Rate" in Section 1.01 hereof are not being provided for the relevant maturities for purposes of determining the rate of interest for such Loans for Interest Periods therefor as provided in this Agreement; or (b) the Majority Lenders determine (which determination shall be conclusive) and notify the Administrative Agent that the relevant rates of interest referred to in the definition of "Eurodollar Base Rate" in Section 1.01 hereof upon the basis of which the rates of interest for such Loans are to be determined do not accurately reflect the cost to such Lenders of making or maintaining such Loans for Interest Periods therefor; then the Administrative Agent shall promptly notify the Company and each Lender thereof, and so long as such condition remains in effect, the Lenders shall be under no obligation to make Fixed Rate Loans of the relevant Type or to convert Base Rate Loans into Fixed Rate Loans of the relevant Type and the Company shall, on the last day(s) of the then current Interest Period(s) for the outstanding Fixed Rate Loans of the relevant Type, either prepay such Loans or convert such Loans into Base Rate Loans in accordance with Section 3.02 hereof. 6.03 Illegality. Notwithstanding any other provision of this Agreement to the contrary, in the event that it becomes unlawful for any Lender or its Applicable Lending Office to (a) honor its obligation to make Fixed Rate Loans of any Type hereunder, or (b) maintain Fixed Rate Loans of any Type hereunder, then such Lender shall promptly notify the Company thereof through the Administrative Agent and such Lender's obligation to make Fixed Rate Loans of such Type hereunder shall be suspended until such time as such Lender may again make and maintain Fixed Rate Loans of such Type (in which case the provisions of Section 6.04 hereof shall be applicable). 6.04 Substitute Base Rate Loans. If the obligation of any Lender to make Fixed Rate Loans of any Type shall be suspended pursuant to Section 6.01, 6.02 or 6.03 hereof, all Loans which would otherwise be made by such Lender as Fixed Rate Loans of such Type shall be made instead as Base Rate Loans (and, if an event referred to in Section 6.01(b) or 6.03 hereof has occurred and such Lender so requests by notice to the Company with a copy to the Administrative Agent, each Fixed Rate Loan of such Lender then outstanding shall be automatically converted into a Base Rate Loan on the date specified by such Lender in such notice) and, to the extent that Fixed Rate Loans of such Type are so made as (or converted into) Base Rate Loans, all payments of principal which would otherwise be applied to such Fixed Rate Loans shall be applied instead to such Base Rate Loans. 6.05 Compensation. The Company shall pay to the Administrative Agent for the account of each Lender, upon the request of such Lender through the Administrative Agent, such amount or amounts as shall be sufficient (in the reasonable opinion of such Lender) to compensate it for any loss, cost or expense incurred by it as a result of: (a) any payment, prepayment or conversion of a Fixed Rate Loan or a Set Rate Loan made by such Lender on a date other than the last day of an Interest Period for such Loan; or (b) any failure by the Company to borrow a Fixed Rate Loan or a Set Rate Loan to be made by such Lender on the date for such borrowing specified in the relevant notice of borrowing under Section 5.05 or 3.03 hereof. 6.06 Capital Adequacy. If any Lender shall determine that the adoption or implementation of any applicable law, rule, regulation or treaty regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Lender (or its Applicable Lending Office) with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on capital of such Lender or any Person controlling such Lender (a "Parent") as a consequence of its obligations hereunder to a level below that which such Lender (or its Parent) could have achieved but for such adoption, change or compliance (taking into consideration its policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, within 15 days after demand by such Lender (with a copy to the Administrative Agent), the Company shall pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction. A statement of any Lender claiming compensation under this Section and setting forth the additional amount or amounts to be paid to it hereunder shall be conclusive absent manifest error, provided that the determination thereof is made on a reasonable basis. In determining such amount, such Lender may use any reasonable averaging and attribution methods. 6.07 Substitution of Lender. If (i) the obligation of any Lender to make Fixed Rate Loans has been suspended pursuant to Section 6.01(b) or 6.03 or (ii) any Lender has demanded compensation under Section 6.01(a) or 6.06, the Company shall have the right, with the assistance of the Administrative Agent, to seek a mutually satisfactory substitute lender or lenders (which may be one or more of the Lenders) to purchase the Working Capital Loan Note and assume the Working Capital Commitment of such Lender. Section 7. Conditions Precedent. 7.01 Initial Loans. The obligation of each Lender to make the initial Loans to be made by it hereunder is subject to the following conditions precedent, each of which shall have been fulfilled to the satisfaction of the Administrative Agent: (a) Corporate Action. The Administrative Agent shall have received certified copies of the certificate of incorporation and by-laws of the Company and of all corporate action taken by the Company authorizing the execution, delivery and performance of this Agreement and the Notes (including, without limitation, a certificate of the Company setting forth the resolutions of its Board of Directors authorizing the transactions contemplated thereby). (b) Incumbency. The Company shall have delivered to the Administrative Agent a certificate in respect of the name and signature of each of the officers or other employees of the Company (i) who is authorized to sign on its behalf of this Agreement and the Notes and (ii) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the Notes. The Administrative Agent and each Lender may conclusively rely on such certificates until it receives notice in writing from the Company to the contrary. (c) Notes. The Administrative Agent shall have received Working Capital Notes and Money Market Notes for each Lender, duly completed and executed. (d) Fees and Expenses. The Company shall have paid to the Administrative Agent, for its account and for the account of the Lenders, the fees required by Section 2.04 to be paid on the Closing Date and shall have in addition paid to the Administrative Agent all amounts payable under Section 12.03 hereof or otherwise on or before the Closing Date. (e) Opinion of Counsel to the Company. The Administrative Agent shall have received an opinion of Jones, Day, Reavis & Pogue, special New York and Delaware corporate counsel to the Company, substantially in the form of Exhibit E hereto covering such other matters relating to the transactions contemplated hereby as the Majority Lenders may reasonably request. (f) Opinions of Special Counsel to the Administrative Agent. The Administrative Agent shall have received an opinion of Davis Polk & Wardwell, substantially in the form of Exhibit F hereto. (g) Officer's Certificate. The Administrative Agent shall have received a certificate signed by the chief financial officer of the Company to the effect that (i) no Default shall have occurred and be continuing and (ii) each of the representations and warranties made by the Company or any Subsidiary in or pursuant to the Basic Documents are true and correct in all material respects on and as of the Closing Date. (h) Counterparts. The Administrative Agent shall have received counterparts of each of this Agreement executed and delivered by or on behalf of each of the parties thereto (or, in the case of any Lender as to which the Administrative Agent shall not have received such a counterpart, the Administrative Agent shall have received evidence satisfactory to it of the execution and delivery by such Lender of a counterpart hereof). (i) Existing Credit Agreement. The Administrative Agent shall have received evidence that, after giving effect to the application of the proceeds of the initial Loans to be made hereunder, (i) all amounts outstanding under the Existing Credit Agreement have been paid in full, (ii) all commitments thereunder have been terminated and (iii) all notes and letters of credit issued pursuant thereto have been cancelled. (j) Other Documents. The Administrative Agent shall have received such other documents relating to the transactions contemplated hereby as the Administrative Agent may reasonably request. 7.02 Initial and Subsequent Loans. The obligation of each Lender to make any Loan to be made by it hereunder is subject to the conditions precedent that, as of the date of such Loan, and before and after giving effect thereto: (a) no Default shall have occurred and be continuing; and (b) the representations and warranties made by the Company in this Agreement shall be true on and as of the date of the making of such Loan, with the same force and effect as if made on and as of such date (except that any representation or warranty which is stated to have been made only as of a specific date shall speak only as of such date). Each notice of borrowing by the Company hereunder or Money Market Quote Request shall constitute a certification by the Company to the effect set forth in the preceding sentence (both as of the date of such notice or request and, unless the Company otherwise notifies the Administrative Agent prior to the date of such borrowing, as of the date of such borrowing). Section 8. Representations and Warranties. The Company represents and warrants to the Lenders and the Administrative Agent as follows: 8.01 Corporate Existence. Each of the Company and its Subsidiaries: (a) is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation; (b) has all requisite corporate power, and has all governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted, except in the case of such licenses, authorizations, consents and approvals, where the failure to obtain them would not have a material adverse effect on the condition (financial or otherwise), assets, nature of assets, liabilities (including without limitation, tax, ERISA and environmental liabilities) or prospects of the Company and its Subsidiaries taken as a whole; and (c) is qualified to do business in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure so to qualify would have a material adverse effect on the condition, (financial or otherwise), assets, nature of assets, liabilities (including, without limitation, tax, ERISA and environmental liabilities) or prospects of the Company and its Subsidiaries taken as a whole. 8.02 Information. (a) The information furnished by the Company to the Administrative Agent or any Lender for purposes of or in connection with this Agreement and identified on Schedule II did not as of the date thereof and will not as of the Closing Date contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not misleading; provided that although the management of the Company believes that the projections presented therein are reasonable, the Company makes no representation as to their attainability. (b) Without limiting the generality of paragraph (a): (i) The audited consolidated and consolidating balance sheet of the Company and its Subsidiaries as of December 31, 1994 and the audited consolidated statements of income, changes in stockholders' equity and cash flow for the fiscal year ended December 31, 1994 (collectively, the "Financial Statements"), have been prepared in accordance with generally accepted accounting principles consistently applied. The Financial Statements fairly present the financial position of the Company and its Subsidiaries as of December 31, 1994 and the results of their operations and their cash flows for the fiscal year ended December 31, 1994, in conformity with generally accepted accounting principles. (ii) The Company and its Subsidiaries did not on the date of the balance sheet referred to in clause (i) above, and will not on the Closing Date, have any material contingent liabilities, material liabilities for taxes, unusual and material forward or long-term commitments or material unrealized or anticipated losses from any unfavorable commitments, except as referred to or reflected or provided for in said balance sheet (including the footnotes thereto). (c) The Company has disclosed to the Lenders in writing any and all facts (other than general economic and industry conditions) which materially and adversely affect or may affect (to the extent it can reasonably foresee) the condition (financial or otherwise), assets, nature of assets, liabilities (including, without limitation, tax, ERISA and environmental liabilities) or prospects of the Company and its Subsidiaries, taken as a whole, or the ability of the Company to perform its obligations under each Basic Document. (d) Since December 31, 1994 there has been no material adverse change in the condition (financial or otherwise), assets, nature of assets, liabilities (including, without limitation, tax, ERISA and environmental liabilities) or prospects of the Company or in the ability of the Company to perform its obligations under each Basic Document. 8.03 Litigation. There are no legal or arbitral proceedings or any proceedings by or before any governmental or regulatory authority or agency, now pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries in which there is a reasonable possibility of an adverse decision which could have a material adverse effect on the condition (financial or otherwise), assets, nature of assets, liabilities (including, without limitation, tax, ERISA and environmental liabilities) or prospects of the Company and its Subsidiaries, taken as a whole, or on the ability of the Company to perform its obligations under each Basic Document. 8.04 No Breach. None of the execution and delivery of the Basic Documents, the consummation of the transactions therein contemplated or compliance with the terms and provisions thereof will conflict with or result in a breach of, or require any consent under, the certificate of incorporation or by-laws of the Company or any of its Subsidiaries, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any Basic Document or other material agreement or instrument to which the Company or any of its Subsidiaries is a party or by which it is bound or to which it is subject, or constitute a default under any such agreement or instrument, or (except for the Liens permitted by this Agreement) result in the creation or imposition of any Lien upon any of the revenues or assets of the Company or any of its Subsidiaries pursuant to the terms of any such agreement or instrument. 8.05 Corporate Action. The Company has all necessary corporate power and authority to execute, deliver and perform its obligations under this Agreement and the Notes; the execution, delivery and performance by the Company of this Agreement and the Notes have been duly authorized by all necessary corporate action; and this Agreement has been duly and validly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company and, on the Closing Date, each of the Notes will constitute its legal, valid and binding obligation, in each case enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or moratorium or other similar laws relating to the enforcement of creditors' rights generally and by general equitable principles. 8.06 Approvals. The Company has obtained all authorizations, approvals and consents of, and has made all filings and registrations with, any governmental or regulatory authority or agency necessary for the execution, delivery or performance by it of this Agreement and the Notes, or for the validity or enforceability thereof. 8.07 Regulations U and X. Neither the Company nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U or X of the Board of Governors of the Federal Reserve System) and no part of the proceeds of any Loan hereunder will be used to purchase or carry any such margin stock. 8.08 ERISA. The Company and each member of the Controlled Group have fulfilled their obligations under the minimum funding standards of ERISA and the Code with respect to each Plan and are in compliance in all material respects with the presently applicable provisions of ERISA and the Code, and have not incurred any liability to the PBGC or a Plan under Title IV of ERISA (other than to make contributions or premium payments in the ordinary course). 8.09 Taxes. Each of the Company and its Subsidiaries has filed all United States Federal income tax returns and all other material tax returns which are required (after giving effect to all valid extensions in effect) to be filed by it and has paid all taxes due pursuant to such returns or pursuant to any assessment received by it, except to the extent the same may be contested as permitted by Section 9.02 hereof. The charges, accruals and reserves on the books of the Company and its Subsidiaries in respect of taxes and other governmental charges are, in the opinion of the Company, adequate in all material respects. 8.10 Subsidiaries. Schedule I hereto is a complete and correct list, as of the Closing Date, of all Subsidiaries of the Company. The Company owns, free and clear of Liens, all outstanding shares of its Subsidiaries and all such shares are validly issued, fully paid and non-assessable and the Company (or the respective Subsidiary of the Company) also owns, free and clear of Liens, all such Investments. 8.11 Investment Company Act. Neither the Company nor any of its Subsidiaries is an investment company within the meaning of the Investment Company Act of 1940, as amended, or, directly or indirectly, controlled by or acting on behalf of any Person which is an investment company, within the meaning of said Act. 8.12 Public Utility Holding Company Act. Neither the Company nor any of its Subsidiaries is a "holding company", or an "affiliate" of a "holding company" or a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. 8.13 Ownership and Use of Properties. Each of the Company and its Subsidiaries will have on the Closing Date and at all times thereafter, legal title or ownership of, or the right to use pursuant to enforceable and valid agreements or arrangements, all tangible property, both real and personal and all franchises, licenses, copyrights, patents and know-how used as of the date hereof in the operation of its business, except to the extent that failure to have any such title, ownership or right would not result in a material adverse change in the condition (financial or otherwise), assets, nature of assets, liabilities (includ- ing, without limitation, environmental liabilities), or prospects of the Company and its Subsidiaries, taken as a whole. 8.14 Environmental Matters. The Company and each of its Subsidiaries have obtained all permits, certificates, licenses, approvals, registrations and other authorizations which are required under all applicable Environmental Laws, except to the extent failure to have any such permit, certificate, license, approval, registration or authorization would not result in a material adverse change in the condition (financial or otherwise), assets, nature of assets, liabilities (including, without limitation, environmental liabilities) or prospects of the Company and its Subsidiaries taken as a whole. The Company and each of its Subsidiaries are in compliance with the terms and conditions of all such permits, certificates, licenses, approvals, registrations and authorizations, and are also in compliance with all other limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules and timetables contained in any applicable Environmental Law or in any notice or demand letter from any regulatory authority issued, entered, promulgated or approved thereunder, other than any notices or demand letters which the Company or such Subsidiary is contesting in good faith, except to the extent failure to comply would not result in a material adverse change in the condition (financial or otherwise), assets, nature of assets, liabilities (including, without limitation, environmental liabilities) or prospects of the Company and its Subsidiaries, taken as a whole. The Company and each of its Subsidiaries is and has been conducting its business so as to comply in all respects with applicable Environmental Laws, except to the extent any such failure to so comply would not result in a material adverse change in the condition (financial or otherwise), assets, nature of assets, liabilities (including, without limitation, environmental liabilities), or prospects of the Company and its Subsidiaries, taken as a whole. Section 9. Covenants. The Company agrees that, so long as any of the Working Capital Commitments are in effect and until payment in full of all Loans hereunder all interest thereon and all other amounts payable hereunder, unless the Majority Lenders shall agree otherwise as contemplated by Section 12.05 hereof: 9.01 Reports. The Company shall deliver to each of the Lenders: (a) as soon as available and in any event within 90 days after the end of each fiscal year of the Company, consolidated statements of income, retained earnings and cash flow of the Company and its Subsidiaries for such year and the related consolidated balance sheet as at the end of such year, setting forth in each case in comparative form the corresponding figures for the preceding fiscal year, and accompanied, in the case of said consolidated financial statements, by an opinion thereon of Arthur Andersen & Co. or other independent certified public accountants of recognized national standing, which opinion shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of the Company and its Subsidiaries as at the end of, and for, such fiscal year and stating that, in making the examination necessary for their above-described opinion (but without any special or additional procedures for that purpose), they obtained no knowledge, except as specifically stated, of any Default; (b) as soon as available and in any event within 45 days after the end of each fiscal quarter of the Company, consolidated statements of income and cash flow of the Company and its Subsidiaries and other reports, at the reasonable request of the Administrative Agent or any Lender, in each case in a form satisfactory to the Administrative Agent, for such fiscal quarter and for the portion of the fiscal year ended at the end of such fiscal quarter, and the related consolidated balance sheet as at the end of such fiscal quarter, accompanied, in each case, by a certificate of the chief financial officer or corporate controller of the Company, which certificate shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of the Company in accordance with GAAP (except for abbreviated footnotes of the type required by the Securities and Exchange Commission to be included in quarterly reports on Form 10-Q), consistently applied, as at the end of, and for, such period (subject to normal year-end audit adjustments); (c) promptly upon the mailing thereof to the shareholders of the Company generally, copies of all financial statements, reports and proxy statements so mailed; (d) promptly upon the filing thereof, copies of all registration statements (other than any registration statements on Form S-8 or its equivalent) and any reports which the Company shall have filed with the Securities and Exchange Commission; (e) if and when the Company or any member of the Controlled Group (i) gives or is required to give notice to the PBGC of any "reportable event" (as defined in Section 4043 of ERISA) with respect to any Plan which might constitute grounds for a termination of such Plan under Title IV of ERISA, or knows that the plan administrator of any Plan has given or is required to give notice of any such reportable event, a copy of the notice of such reportable event given or required to be given to the PBGC, (ii) receives notice of complete or partial withdrawal liability under Title IV of ERISA, a copy of such notice; or (iii) receives notice from the PBGC under Title IV of ERISA of an intent to terminate or appoint a trustee to administer the Plan, a copy of such notice; (f) promptly following the delivery thereof to the Company or to the Board of Directors or management of the Company, a copy of any management letter or written report by independent public accountants with respect to the financial condition, operations, business or prospects of the Company; (g) promptly after management of the Company knows that any Default has occurred and is continuing, a notice of such Default, describing the same in reasonable detail; and (h) from time to time such other information regarding the financial condition, operations, prospects or business of the Company as the Administrative Agent or any Lender through the Administrative Agent may reasonably request. The Company will furnish to each Lender, at the time it furnishes each set of financial statements pursuant to paragraph (a) or (b) above, a certificate of its chief executive officer, chief financial officer or corporate controller (i) to the effect that, to the best of his knowledge after due inquiry, no Default has occurred and is continuing (or, if any Default has occurred and is continuing, describing the same in reasonable detail) and (ii) setting forth in reasonable detail the computations necessary to determine whether it was in compliance with Sections 9.08 to 9.10, inclusive, and 9.13 hereof as of the end of the respective fiscal quarter or fiscal year. 9.02 Taxes and Claims. The Company will pay and discharge, and will cause each of its Subsidiaries to pay and discharge, all material taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits, or upon any property belonging to it, prior to the date on which penalties attach thereto, and all lawful claims which, if unpaid, might become a Lien upon the property of the Company or such Subsidiary, provided that neither the Company nor such Subsidiary shall be required to pay any such tax, assessment, charge, levy or claim the payment of which is being contested in good faith and by proper proceedings if it maintains reserves with respect thereto in accordance with GAAP. 9.03 Insurance. The Company will maintain, and will cause each of its Subsidiaries to maintain such insurance in such amounts and against such risks as is usually carried by companies of established repute engaged in the same or similar business, owning similar properties, and located in the same general areas as the Company and its Subsidiaries. All such insurance shall be written by financially responsible companies of established repute selected by the Company that customarily write insurance for the risks covered thereby in the amounts contemplated thereby. 9.04 Maintenance of Existence; Conduct of Business. The Company will preserve and maintain, and will cause each of its Subsidiaries to preserve and maintain, its corporate existence and all of its rights, privileges and franchises necessary or desirable in the normal conduct of its business, and will conduct its business in a regular manner; provided that nothing herein shall prevent the merger and dissolution of any Subsidiary of the Company into the Company so long as the Company is the surviving corporation or the sale of a Subsidiary not prohibited by Section 9.10. 9.05 Maintenance of and Access to Properties. The Company will keep, and will cause each of its Subsidiaries to keep, all of its properties necessary in its business in good working order and condition (having regard to the condition of such properties at the time such properties were acquired by the Company or such Subsidiary), ordinary wear and tear excepted, and will permit representatives of the Lenders to inspect such properties and, upon reasonable notice and at reasonable times, to examine and make extracts and copies from the books and records of the Company and any such Subsidiary; provided that if and for so long as no Default shall have occurred and be continuing, the Company shall not be required to permit more than one such examination or inspection by each Lender during any fiscal year of the Company. 9.06 Compliance with Applicable Laws. The Company will comply, and will cause each of its Subsidiaries to comply, with the requirements of all applicable laws, rules, regulations and orders of any governmental body or regulatory authority (including, without limitation, all Environmental Laws), a breach of which would have a material adverse effect on the condition (financial or otherwise), assets, nature of assets, liabilities (including, without limitation, tax, ERISA and environmental liabilities) or prospects of the Company and its Subsidiaries, taken as a whole, except where contested in good faith and by proper proceedings. 9.07 Litigation. The Company will promptly give to the Administrative Agent (which shall promptly notify each Lender) notice in writing of (i) all judgments against it or any of its Subsidiaries which individually exceed $1,000,000 or in the aggregate exceed $5,000,000 and (ii) all litigation and of all proceedings of which it is aware before any courts, arbitrators or governmental or regulatory agencies affecting the Company or any of its Subsidiaries except litigation or proceedings which, if adversely determined, would not in the reasonable opinion of the Company materially and adversely affect the condition (financial or otherwise), assets, nature of assets, liabilities (including, without limitation, tax, ERISA and environmental liabilities) or prospects of the Company and its Subsidiaries, taken as a whole. 9.08 Leverage Ratio. The Company will not permit the ratio, calculated as at the end of each fiscal quarter for the four fiscal quarters then ended, of (i) the principal amount of Indebtedness of the Company and its Subsidiaries, determined on a consolidated basis at such date, to (ii) Cash Flow for such period to exceed 3.50 to 1.00. 9.09 Interest Coverage Ratio. The Company will not permit the ratio, calculated as at the end of each fiscal quarter for the four fiscal quarters then ended, of Cash Flow for such period to Interest Expense for such period to be less than 2.50 to 1.00. 9.10 Mergers, Asset Dispositions and Acquisitions, Etc. (a) The Company will not, and will not permit any of its Subsidiaries to, sell, lease, assign, transfer or otherwise dispose of any assets, or acquire assets from any Person, except: (i) dispositions and acquisitions of inventory in the ordinary course of business; (ii) expenditures in respect of fixed or capital assets; (iii) acquisitions of Investments permitted under Section 9.12 hereof; (iv) dispositions of bonds issued in connection with the Gallman Indebtedness; (v) sales of accounts receivable from time to time; provided that (x) the aggregate amount that third-party transferees are entitled at any time to recover from collections on such accounts receivable shall not exceed $50,000,000 and (y) the aggregate outstanding balance of accounts receivable sold to third-party transferees shall not at any time exceed 115% of the aggregate amount of the proceeds received by the Company and its Subsidiaries from the sale of such accounts receivable; (vi) Permitted Acquisitions; and (vii) other dispositions of assets not permitted by clauses (i) through (vi) above which, together with all assets disposed of pursuant to this clause (vii) from and after the Closing Date have, after giving effect to any such disposition, an aggregate fair market value not exceeding $50,000,000. For purposes of this Section 9.10, a "Permitted Acquisition" shall mean any acquisition of any asset or Investment by the Company or any Subsidiary (including any such acquisition by way of merger); provided that (x) after giving pro forma effect to such acquisition, the Company would have been in compliance with Sections 9.08, and 9.09 hereof on the last day of the four fiscal quarters most recently ended prior to the date of such acquisition (calculated on the assumption that such acquisition occurred at the beginning of such four fiscal quarter period) and (y) no Default or Event of Default has occurred and is continuing or would result therefrom. (b) The Company will not, nor will it permit any of its Subsidiaries to, consolidate or merge with or into any other Person; provided that (i) the Company or any Subsidiary may merge with another Person if (x) such Person is organized under the laws of the United States of America or one of its states, (y) the Company or any of its Subsidiaries (except that the Company shall be the remaining corporation upon a merger of a Subsidiary of the Company with the Company) is the corporation surviving such merger and (z) immediately after giving effect to such merger, no Default shall have occurred and be continuing and (ii) any Subsidiary of the Company may merge with any other Person in connection with a Permitted Acquisition or a disposition of such Subsidiary not prohibited by Section 9.10(a). 9.11 Liens. The Company will not, and will not permit any of its Subsidiaries to, create or suffer to exist any Lien upon any property or assets, now owned or hereafter acquired, securing any Indebtedness or other obligation, except: (i) Liens securing the Gallman Indebtedness in accordance with the definition thereof; (ii) Liens existing on other assets at the date of acquisition thereof or which attach to such assets concurrently with or within 90 days after the acquisition thereof, securing Indebtedness incurred to finance the acquisition thereof; and (iii) other Liens arising in the ordinary course of the business of the Company or such Subsidiary which are not incurred in connection with the borrowing of money or the obtaining of advances or credit and which do not materially detract from the value of its property or assets or materially impair the use thereof in the operation of its business. For the avoidance of doubt, the filing of UCC financing statements in connection with any sale by the Company or any of its Subsidiaries of accounts receivable permitted by Section 9.10 shall not constitute a Lien prohibited by this Section 9.11. 9.12 Investments. The Company will not, and will not permit any of its Subsidiaries to, make or permit to remain outstanding any advances, loans or other extensions of credit or capital contributions (other than prepaid expenses in the ordinary course of business) to (by means of transfers of property or assets or otherwise), or purchase or own any stocks, bonds, notes, debentures or other securities of, any Person (all such transactions being herein called "Investments"), except: (i) operating deposit accounts; (ii) Liquid Investments; (iii) subject to Section 9.14 hereof, Investments in accounts and chattel paper (as defined in the Uniform Commercial Code), and notes receivable acquired in the ordinary course of business as presently conducted; (iv) Investments existing on the Closing Date in Wholly-Owned Subsidiaries and in Systronics, Inc. and Great River Oil & Gas Corporation, and (v) Investments that constitute Permitted Acquisitions. 9.13 Restricted Payments. The Company will not, and will not permit any of its Subsidiaries to, declare or make any Restricted Payment, except that the Company may (i) purchase shares of Restricted Stock (as defined in the Incentive Equity Plan) from employees of the Company or its Subsidiaries upon termination of such employees' employment, in accordance with the Incentive Equity Plan in amounts not to exceed $1,000,000 during any fiscal year and $5,000,000 in the aggregate during the term of this Agreement and (ii) make Restricted Payments in addition to the Restricted Payments permitted to be made pursuant to clause (i) above if (a) no Default shall have occurred and be continuing and (b) after giving effect to any such payment, the cumulative amount of all payments made in reliance on this clause (ii) does not exceed the sum of $50,000,000 plus 50% of Cumulative Net Income on the date of such payment. "Cumulative Net Income" shall mean, on any date, the cumulative amount of the net income, if any (less the cumulative amount of the net loss, if any) of the Company and its Subsidiaries, determined on a consolidated basis, for each fiscal quarter of the Company from (and including) the fiscal quarter ending on March 31, 1994 to (and including) the fiscal quarter of the Company most recently ended prior to such date. 9.14 Transactions with Affiliates. Except as expressly permitted by this Agreement, the Company will not, and will not permit any of its Subsidiaries to, directly or indirectly: (i) except to the extent not prohibited by Section 9.12, make any Investment in an Affiliate of the Company; (ii) transfer, sell, lease, assign or otherwise dispose of any assets to an Affiliate of the Company; (iii) merge into or consolidate with or purchase or acquire assets from an Affiliate of the Company; or (iv) enter into any other transaction directly or indirectly with or for the benefit of an Affiliate of the Company (including, without limitation, guarantees and assumptions of obligations of an Affiliate of the Company); provided that (a) any Affiliate of the Company who is an individual may serve as a director, officer or employee of the Company and receive reasonable compensation or indemnification in connection with his or her services in such capacity; (b) the Company or a Subsidiary of the Company may enter into any transaction with an Affiliate of the Company providing for the leasing of property, the rendering or receipt of services or the purchase or sale of inventory and other assets in the ordinary course of business if the monetary or business consideration arising therefrom would be substantially as advantageous to the Company or such Subsidiary as the monetary or business consideration which would be obtained in a comparable arm's length transaction with a Person not an Affiliate of the Company; and (c) the Company may pay commissions to Georgia Gulf Export Corporation on sales of qualified "Export Property" (as defined in Section 927 of the Code) in accordance with Section 925 of the Code and the rules and regulations thereunder. 9.15 Lines of Businesses. Neither the Company nor any of its Subsidiaries shall engage to any substantial extent in any line or lines of business activity other than present or related product lines. 9.16 Environmental Matters. The Company will promptly give to the Lenders notice in writing of any complaint, order, citation, notice or other written communication from any Person with respect to, or if the Company becomes aware after due inquiry of, (i) the existence or alleged existence of a violation of any applicable Environmental Law or legal liability resulting from any air emission, water discharge, noise emission, asbestos, Hazardous Substance or any other environmental, health or safety matter at, upon, under or within any property now or previously owned, leased, operated or used by the Company or any of its Subsidiaries or any part thereof, or due to the operations or activities of the Company, any Subsidiary or any other Person on or in connection with such property or any part thereof (including receipt by the Company or any Subsidiary of any notice of the happening of any event involving the Release or cleanup of any Hazardous Substance), (ii) any Release on such property or any part thereof in a quantity that is reportable under any applicable Environmental Law, (iii) the commencement of any cleanup pursuant to or in accordance with any applicable Environmental Law of any Hazardous Substances on or about such property or any part thereof and (iv) any pending or threatened proceeding for the termination, suspension or non-renewal of any permit required under any applicable Environmental Law, in each of cases (i), (ii), (iii) and (iv), which individually or in the aggregate could have a material adverse effect on the condition (financial or otherwise), assets, nature of assets, liabilities (including, without limitation, environmental liabilities) or prospects, taken as a whole, of the Company and its Subsidiaries. Section 10. Defaults. 10.01 Events of Default. If one or more of the following events (herein called "Events of Default") shall occur and be continuing: (a) default in the payment of (i) any principal of any Loan when due, (ii) any interest on any Loan within one Business Day of the due date thereof or (iii) any other amount payable hereunder within three Business Days after the due date thereof; or (b) the Company or any of its Subsidiaries shall default in the payment when due of any principal of or interest on any Indebtedness having an outstanding principal amount of at least $5,000,000 (other than the Loans); or any event or condition shall occur which results in the acceleration of the maturity of any such Indebtedness or enables the holder of any such Indebtedness or any Person acting on such holder's behalf to accelerate the maturity thereof; or (c) any representation or warranty made by the Company herein or in any certificate furnished to any Lender or the Administrative Agent pursuant to the provisions hereof, shall prove to have been false or misleading in any material respect as of the time made; or (d) (i) the Company shall default in the performance of any of its obligations in Sections 9.08 through 9.16 hereof; or (ii) the Company shall default in the performance of any of its other obligations in any Basic Document, and such default described in this subclause (ii) shall continue unremedied for a period of 30 days after notice thereof to the Company by the Administrative Agent or the Majority Lenders (through the Administrative Agent); or (e) the Company or any of its Subsidiaries shall admit in writing its inability to, or be generally unable to, pay its debts as such debts become due; or (f) the Company or any of its Subsidiaries shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the Bankruptcy Code, (iv) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or readjustment of debts, (v) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the Bankruptcy Code, or (vi) take any corporate or partnership action for the purpose of effecting any of the foregoing; or (g) a proceeding or case shall be commenced, without the application or consent of the Company or any of its Subsidiaries in any court of competent jurisdiction, seeking (i) its liquidation, reorganization, dissolution or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of such Person or of all or any substantial part of its assets, or (iii) similar relief in respect of such Person under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 days; or an order for relief against such Person shall be entered in an involuntary case under the Bankruptcy Code; or (h) a final judgment or judgments for the payment of money shall be rendered by a court or courts against the Company or any of its Subsidiaries in excess of $4,000,000 in the aggregate, and (i) the same shall not be discharged (or provision shall not be made for such discharge), or a stay of execution thereof shall not be procured, within 30 days from the date of entry thereof, or (ii) the Company or such Subsidiary shall not, within said period of 30 days, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal, or (iii) such judgment or judgments shall not be discharged (or provisions shall not be made for such discharge) within 30 days after a decision has been reached with respect to such appeal and the related stay has been lifted; or (i) the Company or any member of the Controlled Group shall fail to pay when due an amount or amounts aggregating in excess of $2,000,000 which it shall have become liable to pay to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to terminate a Plan or Plans having aggregate Unfunded Liabilities in excess of $2,000,000 shall be filed under Title IV of ERISA by the Company or any member of the Controlled Group, any plan administrator or any combination of the foregoing; or the PBGC shall institute proceedings under Title IV of ERISA to terminate or to cause a trustee to be appointed to administer any such Plan or Plans or a proceeding shall be instituted by a fiduciary of any such Plan or Plans against the Company or any member of the Controlled Group to enforce Section 515 or 4219(c)(5) of ERISA; or a condition shall exist by reason of which the PBGC would be entitled to obtain a decree adjudicating that any such Plan or Plans must be terminated; or (j) (i) as a result of one or more transactions after the date of this Agreement, any "person" or "group" of persons shall have "beneficial ownership" (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended, and the applicable rules and regulations thereunder) of 30% or more of the outstanding common stock of the Company; or (ii) without limiting the generality of the foregoing, during any period of 12 consecutive months, commencing after the date of this Agreement, individuals who at the beginning of such 12-month period were directors of the Company shall cease for any reason to constitute a majority of the board of directors of the Company, provided that the relationships among the respective shareholders of the Company on the Closing Date shall not be deemed to constitute all or any combination of them as a "group" for purposes of clause (j)(i); THEREUPON: the Administrative Agent may (and, if directed by the Majority Lenders, shall) (a) declare the Working Capital Commitments terminated (whereupon the Working Capital Commitments shall be terminated) and/or (b) declare the principal amount then outstanding of and the accrued interest on the Loans and commitment fees and all other amounts payable hereunder and under the Notes to be forthwith due and payable, whereupon such amounts shall be and become immediately due and payable, without notice (including, without limitation, notice of intent to accelerate), presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by the Company; provided that in the case of the occurrence of an Event of Default with respect to the Company referred to in clause (f) or (g) of this Section 10.01, the Working Capital Commitments shall be automatically terminated and the principal amount then outstanding of and the accrued interest on the Loans and commitment fees and all other amounts payable hereunder and under the Notes shall be and become automatically and immediately due and payable, without notice (including, without limitation, notice of intent to accelerate), presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by the Company. Section 11. The Administrative Agent. 11.01 Appointment, Powers and Immunities. Each Lender hereby irrevocably appoints and authorizes the Administrative Agent to act as its agent hereunder and the other Basic Documents with such powers as are specifically delegated to the Administrative Agent by the terms hereof and thereof, together with such other powers as are reasonably incidental thereto. The Administrative Agent (which term as used in this Section 11 shall include reference to its affiliates and its own and its respective affiliates' officers, directors, employees and agents): (a) shall have no duties or responsibilities except those expressly set forth in this Agreement and the other Basic Documents, and shall not by reason of this Agreement or any other Basic Document be a trustee for any Lender; (b) shall not be responsible to the Lenders for any recitals, statements, representations or warranties contained in this Agreement or any other Basic Document, or in any certificate or other document referred to or provided for in, or received by any of them under, this Agreement or any other Basic Document, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Basic Document or any other document referred to or provided for herein or therein or for any failure by any Person to perform any of its obligations hereunder or thereunder; (c) shall not be required to initiate or conduct any litigation or collection proceedings hereunder or under any other Basic Document except to the extent requested by the Majority Lenders, and (d) shall not be responsible for any action taken or omitted to be taken by it hereunder, any other Basic Document or any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, except for its own gross negligence or willful misconduct. The Administrative Agent may employ agents and attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it with reasonable care. 11.02 Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon any certification, notice or other communication (including any thereof by telephone, telex, telegram or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the Administrative Agent. As to any matters not expressly provided for by this Agreement or any other Basic Document, the Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder and thereunder in accordance with instructions signed by the Majority Lenders, and such instructions of the Majority Lenders, and any action taken or failure to act pursuant thereto shall be binding on all of the Lenders. 11.03 Defaults. The Administrative Agent shall not be deemed to have knowledge of the occurrence of a Default (other than the non-payment of principal of or interest on Loans) unless the Administrative Agent has received notice from a Lender or the Company specifying such Default and stating that such notice is a "Notice of Default". In the event that the Administrative Agent receives such a notice of the occurrence of a Default, the Administrative Agent shall give prompt notice thereof to the Lenders (and shall give each Lender prompt notice of each such non-payment). The Administrative Agent shall (subject to Section 11.07 hereof) take such action with respect to such Default as shall be directed by the Majority Lenders, provided that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable in the best interests of the Lenders. 11.04 Rights as a Lender. With respect to its Working Capital Commitments and the Loans made by it, Chase in its capacity as a Lender hereunder shall have the same rights and powers hereunder as any other Lender and may exercise the same as though it were not acting as the Administrative Agent and the term "Lender" or "Lenders" shall, unless the context otherwise indicates, include the Administrative Agent in its individual capacity. The Administrative Agent may (without having to account therefor to any Lender) accept deposits from, lend money to and generally engage in any kind of banking, trust or other business with the Company (and any of its Affiliates) as if it were not acting as the Administrative Agent and the Administrative Agent may accept fees and other consideration from the Company (in addition to the fees heretofore agreed to between the Company and the Administrative Agent) for services in connection with this Agreement or otherwise without having to account for the same to the Lenders. 11.05 Indemnification. The Lenders agree to indemnify the Administrative Agent (to the extent not reimbursed under Section 12.03 or 12.04 hereof, but without limiting the obligations of the Company under said Sections 12.03 and 12.04), ratably in accordance with their respective Working Capital Commitments, for any and all 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 Administrative Agent in any way relating to or arising out of this Agreement or any other Basic Document or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby (including, without limitation, the costs and expenses which the Company is obligated to pay under Sections 12.03 and 12.04 hereof but excluding, unless a Default has occurred and is continuing, normal administrative costs and expenses incident to the performance of its agency duties hereunder) or the enforcement of any of the terms hereof or thereof or of any such other documents, provided that no Lender shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the party to be indemnified. 11.06 Non-Reliance on Administrative Agent and Other Lenders. Each Lender agrees that it has, independently and without reliance on the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the Company and decision to enter into this Agreement and that it will, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement or any of the other Basic Documents. The Administrative Agent shall not be required to keep itself informed as to the performance or observance by the Company of this Agreement or any of the other Basic Documents or any other document referred to or provided for herein or therein or to inspect the properties or books of the Company. Except for notices, reports and other documents and information expressly required to be furnished to the Lenders by the Administrative Agent hereunder or the other Basic Documents, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the affairs, financial condition or business of the Company (or any of its affiliates) which may come into the possession of the Administrative Agent. 11.07 Failure to Act. Except for action expressly required of the Administrative Agent hereunder and under the other Basic Documents, the Administrative Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction by the Lenders of their indemnification obligations under Section 11.05 hereof against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. 11.08 Resignation or Removal of Administrative Agent. Subject to the appointment and acceptance of a successor Administrative Agent as provided below, the Administrative Agent may resign at any time by giving notice thereof to the Lenders and the Company and the Administrative Agent may be removed at any time with or without cause by the Majority Lenders. Upon any such resignation or removal, the Majority Lenders shall have the right to appoint a successor Administrative Agent reasonably acceptable to the Company. If no successor Administrative Agent shall have been so appointed by the Majority Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent's giving of notice of resignation or the Majority Lenders' removal of the retiring Administrative Agent (the "Notice Date"), then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent reasonably acceptable to the Company. Any successor Administrative Agent shall be (i) a Lender or (ii) if no Lender has accepted such appointment within 40 days after the Notice Date, a bank which has an office in New York, New York with a combined capital and surplus of at least $250,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. After any retiring Administrative Agent's resignation or removal hereunder as Administrative Agent, the provisions of this Section 11 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Administrative Agent. 11.09 Consents under Basic Documents. Without the prior written consent of the Majority Lenders, the Administrative Agent will not consent to any modification, supplement or waiver under any of the Basic Documents. Section 12. Miscellaneous. 12.01 Waiver. No failure on the part of the Administrative Agent or any Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under any Basic Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege thereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided in the Basic Documents are cumulative and not exclusive of any remedies provided by law. 12.02 Notices. All notices and other communications provided for herein (including, without limitation, any modifications of, or waivers or consents under, this Agreement) shall be given or made by telex, telegraph, telecopy, cable or other writing and telexed, telecopied, telegraphed, cabled, mailed or delivered to the intended recipient at the "Address for Notices" specified below its name on the signature pages hereof; or, as to any party, at such other address as shall be designated by such party in a notice to the Company and the Administrative Agent given in accordance with this Section 12.02. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by telex or telecopier, delivered to the telegraph or cable office or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. 12.03 Expenses, Etc. The Company agrees to pay or reimburse each of the Lenders and the Administrative Agent for paying: (a) the reasonable fees and expenses of Davis Polk & Wardwell, special counsel to the Administrative Agent in connection with (i) the preparation, execution and delivery of this Agreement (including the Exhibits hereto) and the making of the Loans hereunder and (ii) any modification, supplement or waiver of any of the terms of this Agreement or any other Basic Document; (b) if an Event of Default occurs, all reasonable costs and expenses of the Lenders and the Administrative Agent (including reasonable counsels' fees) incurred as a result of such Event of Default and collection, enforcement, bankruptcy, insolvency and other proceedings resulting therefrom; (c) all transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any other Basic Document or any other document referred to herein or therein; and (d) all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated by this Agreement or any document referred to herein or therein. 12.04 Indemnification. The Company shall indemnify the Administrative Agent, the Lenders and each affiliate thereof and their respective directors, officers, employees and agents from, and hold each of them harmless against, any and all losses, liabilities, claims or damages to which any of them may become subject, insofar as such losses, liabilities, claims or damages arise out of or result from any actual or proposed use by the Company of the proceeds of any extension of credit by any Lender hereunder or breach by the Company of this Agreement or any other Basic Document or from any investigation, litigation or other proceeding (including any threatened investigation or proceeding) relating to the foregoing, and the Company shall reimburse the Administrative Agent and each Lender, and each affiliate thereof and their respective directors, officers, employees and agents, upon demand for any expenses (including legal fees) incurred in connection with any such investigation or proceeding; but excluding any such losses, liabilities, claims, damages or expenses incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified. 12.05 Amendments, Etc. No amendment or waiver of any provision of this Agreement or the Notes, nor any consent to any departure by the Company therefrom, shall in any event be effective unless the same shall be agreed or consented to by the Majority Lenders and the Company, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, that (a) no amendment, waiver or consent shall, unless in writing and signed by all the Lenders, do any of the following: (i) increase any Working Capital Commitment of any of the Lenders or subject the Lenders to any additional obligations; (ii) reduce the principal of, or interest on, any Loan or fees hereunder; (iii) postpone any date fixed for any payment of principal of, or interest on, any Loan or fee hereunder pursuant to Sections 2.04, 4.01(a), 4.01(b) or 4.02 hereof; (iv) change the percentage of any of the Working Capital Commitments or of the aggregate unpaid principal amount of any of the Loans, or the number of Lenders, which shall be required for the Lenders or any of them to take any action under this Agreement; or (v) change any provision contained in Sections 2.02, 6, 12.03 or 12.04 hereof or this Section 12.05 or Section 12.08 hereof. Notwithstanding anything in this Section 12.05 to the contrary, no amendment, waiver or consent shall be made with respect to Section 11 without the consent of the Administrative Agent. 12.06 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns except that the Company may not assign its rights or obligations hereunder or under the Notes without the prior written consent of all of the Lenders. Each Lender may assign any Loan or Loans or all or any part of its Loans or Working Capital Commitments (i) to any affiliate thereof, (ii) to any other Lender, or (iii) with the consent of the Company and, in the case of any assignment of Working Capital Commitments or Working Capital Loans, the Administrative Agent, which consents shall not be unreasonably withheld, to any other bank or financial institution (including a closed-end or other fund) (provided that (a) any assignment pursuant to clause (i) or (ii) above shall not be less than $1,000,000 and (b) any assignment or, if substantially simultaneous, the aggregate amount of any assignments by one or more Lenders pursuant to clause (iii) above to any one bank or financial institution shall not be less than $20,000,000, unless, in each case, such assignment constitutes an assignment of all of such Lender's Working Capital Commitments and Working Capital Loans). Upon execution by the assignor and the assignee of an instrument pursuant to which the assignee assumes such rights and obligations, payment by such assignee to such assignor of an amount equal to the purchase price agreed between such assignor and such assignee and delivery to the Administrative Agent and the Company of an executed copy of such instrument together with payment by such assignee to the Administrative Agent of a processing fee of $2,500, such assignee shall have, to the extent of such assignment (unless otherwise provided therein), the same rights and benefits as it would have if it were a Lender hereunder and the assignor shall be, to the extent of such assignment (unless otherwise provided therein) released from its obligations under this Agreement. Each Lender may (without the consent of any other party to this Agreement) sell participations in all or any part of any Loan or Loans made by it to another bank or other entity, in which event the participant shall not have any rights under this Agreement (except as provided in the next succeeding sentence hereof), or in the case of a Loan, such Lender's Note (the participant's rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the participant relating thereto, which agreement shall not give the participant the right to consent to any modification, amendment or waiver other than one described in clause (i), (ii) or (iii) of Section 12.05 hereof). The Company agrees that each participant shall be entitled to the benefits of Sections 5.07 and 6 with respect to its participation; provided that no participant shall be entitled to receive any greater amount pursuant to such Sections than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred by such transferor Lender to such participant had no such transfer occurred. Each Lender may furnish any information concerning the Company and its Subsidiaries in the possession of such Lender from time to time to assignees and participants (including prospective assignees and participants) which have agreed in writing to be bound by the provisions of Section 12.07 hereof. The Administrative Agent and the Company may, for all purposes of this Agreement, treat any Lender as the holder of any Note drawn to its order (and owner of the Loans evidenced thereby) until written notice of assignment, participation or other transfer shall have been received by them from such Lender. Any Lender may at any time assign all or any portion of its rights under this Agreement and its Notes to a Federal Reserve Bank without the consent of the Company or the Administrative Agent. No such assignment shall release the transferor Lender from its obligations hereunder. 12.07 Confidentiality. Each Lender agrees to exercise all reasonable efforts to keep any information delivered or made available by the Company to it which is clearly indicated to be confidential information, confidential from anyone other than persons employed or retained by such Lender who are or are expected to become engaged in evaluating, approving, structuring or administering the Loans; provided that nothing herein shall prevent any Lender from disclosing such information (i) to any other Lender, (ii) to its officers, directors, employees, agents, attorneys and accountants who have a need to know such information in accordance with customary banking practices and who receive such information having been made aware of the restrictions set forth in this Section, (iii) upon the order of any court or administrative agency, (iv) upon the request or demand of any regulatory agency or authority having jurisdiction over such Lender, (v) which has been publicly disclosed, (vi) to the extent reasonably required in connection with any litigation to which the Administrative Agent, any Lender or their respective affiliates may be a party, (vii) to the extent reasonably required in connection with the exercise of any remedy hereunder, (viii) to such Lender's legal counsel and independent auditors, and (ix) to any actual or proposed participant or assignee of all or part of its rights hereunder which has agreed in writing to be bound by the provisions of this Section 12.07. 12.08 Survival. The obligations of the Company under Sections 6.01, 6.05, 6.06, 6.07, 12.03 and 12.04 hereof and the obligations of the Lenders under Section 11.05 shall survive the repayment of the Loans and the termination of the Working Capital Commitments. 12.09 Captions. Captions and section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement. 12.10 Counterparts; Integration; Severability. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement constitutes the entire agreement and understanding among the parties hereto and supersedes any and all prior agreements and understandings, oral and written, relating to the subject matter hereof (except to the extent specific reference is made to any such agreement in Section 2.04 hereof). In case any provision of or obligation under this Agreement or the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. 12.11 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. THE COMPANY HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE COMPANY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE COMPANY, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written. COMPANY GEORGIA GULF CORPORATION By /s/ Richard B. Marchese Title: Vice President - Finance Address for Notices: Georgia Gulf Corporation 400 Perimeter Center Terrace Suite 595 Atlanta, Georgia 30346 Attention: Chief Financial Officer Copy to: General Counsel Georgia Gulf Corporation 400 Perimeter Center Terrace Suite 595 Atlanta, Georgia 30346 Telex Number: 8107510027 Telecopy Number: (404) 390-9673 LENDERS Working Capital Commitment: $ 40,000,000 THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) By /s/ Michael J. McGovern Title: Vice President Address for Notices: The Chase Manhattan Bank (National Association) 4 Chase Metrotech Center 13th Floor Brooklyn, New York 11245 Attention: NY Agency Lenord Selanikio Tel. Number: (718) 242-7974 Telex Number: 6720516 CMB NYA Telecopy Number: (718) 242-6900 Lending Office for Base Rate Loans: The Chase Manhattan Bank (National Association) 4 Chase Metrotech Center 13th Floor Brooklyn, New York 11245 Attention: NY Agency Lenord Selanikio Lending Office for Eurodollar Loans: Cayman Islands, B.W.I. Branch c/o The Chase Manhattan Bank (National Association) 4 Chase Metrotech Center 13th Floor Brooklyn, New York 11245 Attention: NY Agency Lenord Selanikio Working Capital Commitment: $ 25,000,000 THE BANK OF TOKYO TRUST COMPANY By /s/ Victor F. Bulzacchelli Title: Vice President Address for Notices: The Bank of Tokyo Trust Company 1251 Avenue of the Americas New York, NY 10116-3138 Attention: Deborah L. Flohr Tel. No.: (212) 782-4326 Telecopy Number: (212) 782-6440 Lending Office for Base Rate Loans: The Bank of Tokyo Trust Company 1251 Avenue of the Americas New York, NY 10116-3138 Attention: Deborah L. Flohr Lending Office for Eurodollar Loans: The Bank of Tokyo Trust Company 1251 Avenue of the Americas New York, NY 10116-3138 Attention: Deborah L. Flohr Working Capital Commitment: $ 35,000,000 THE INDUSTRIAL BANK OF JAPAN, LIMITED, NEW YORK BRANCH By /s/ Junri Oda Title: Senior Vice President and Senior Manager The Industrial Bank of Japan, Limited, New York Branch 245 Park Avenue New York, NY 10167-0037 Attention: Mr. Miki Katsumata/ Mr. Peter Kelly Tel. No.: (212) 309-6452 Telex Number: 420802 (420802 KIGIUI) Telecopy Number: (212) 692-2870 Lending Office for Base Rate Loans: The Industrial Bank of Japan, Limited, New York Branch 245 Park Avenue New York, NY 10167-0037 Attention: Mr. Masaaki Tahara Lending Office for Eurodollar Loans: The Industrial Bank of Japan, Limited, New York Branch 245 Park Avenue New York, NY 10167-0037 Attention: Mr. Masaaki Tahara Working Capital Commitment: $ 25,000,000 LTCB TRUST COMPANY By /s/ John J. Sullivan Title: Executive Vice President Address for Notices: LTCB Trust Company 165 Broadway New York, NY 10006 Attention: Kathy Dorsch Tel. No.: (212) 335-4578 Telex Number: 425722 LTCBUI Telecopy Number: (212) 608-2371 Lending Office for Base Rate Loans: LTCB Trust Company 165 Broadway New York, NY 10006 Attention: Winston Brown Lending Office for Eurodollar Loans: LTCB Trust Company 165 Broadway New York, NY 10006 Attention: Winston Brown With Copies of Notices to: LTCB Trust Company Marquis One Tower 245 Peachtree Center Avenue, N.E. Suite 2801 Atlanta, GA 30303 Attention: Rebecca J. Silbert Working Capital Commitment: $ 25,000,000 THE SAKURA BANK, LTD. By /s/ Hiroyasu Imanishi Title: Vice President and Senior Manager Address for Notices: 245 Peachtree Center Avenue, N.E. Suite 2703 Atlanta, Georgia 30303 Attention: Charles Zimmerman Tel. No.: (404) 521-3111 Telex Number: WU 125435 Telecopy Number: (404) 521-1133 Lending Office for Base Rate Loans: 245 Peachtree Center Avenue, N.E. Suite 2703 Atlanta, Georgia 30303 Attention: Charles Zimmerman Tel. No.: (404) 521-3111 Lending Office for Eurodollar Loans: 245 Peachtree Center Avenue, N.E. Suite 2703 Atlanta, Georgia 30303 Attention: Charles Zimmerman Tel. No.: (404) 521-3111 Working Capital Commitment: $ 40,000,000 BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By /s/ Glenn F. Edwards Title: Vice President Address for Notices: The Bank of America NT & SA 1230 Peachtree Street Suite 3600 Atlanta, Georgia 30309 Attention: Bill Tucker Tel. No.: (404) 249-6927 Telecopy Number: (404) 364-3303 Lending Office for Base Rate Loans: The Bank of America NT & SA 1850 Gateway Blvd. Concord, California 94520 Attention: Account Administrator Tel. No.: (510) 675-7335 Telecopy: (510) 675-7531 Lending Office for Eurodollar Loans: The Bank of America NT & SA 1850 Gateway Blvd. Concord, California 94520 Attention: Account Administrator Tel. No.: (510) 675-7335 Telecopy: (510) 675-7531 Working Capital Commitment: $ 35,000,000 FUJI BANK, LTD. By /s/ T. Mitsui Title: Vice President and Manager Address for Notices: 245 Peachtree Center Avenue, N.E. Suite 2100 Atlanta, Georgia 30303-1208 Attention: Scott Keller Tel. No.: (404) 653-2113 Telex Number: 9102507122 Telecopy Number: (404) 653-2119 Lending Office for Base Rate Loans: 245 Peachtree Center Avenue, N.E. Suite 2100 Atlanta, Georgia 30303-1208 Attention: Scott Keller Tel. No.: (404) 653-2113 Lending Office for Eurodollar Loans: 245 Peachtree Center Avenue, N.E. Suite 2100 Atlanta, Georgia 30303-1208 Attention: Scott Keller Tel. No.: (404) 653-2113 Working Capital Commitment: $ 40,000,000 NATIONSBANK OF GEORGIA, N.A. By /s/ Catherine S. Rhodes Title: Assistant Vice President Address for Notices: 600 Peachtree Street, N.E. 21st Floor Atlanta, Georgia 30308-2213 Attention: Catherine S. Rhodes Tel. No.: (404) 607-5531 Telecopy Number: (404) 607-6467 Lending Office for Base Rate Loans: 100 N. Tryon Charlotte, NC 28255 Attention: Edna Benson Fax. No.: (704) 386-4198 Lending Office for Eurodollar Loans: 100 N. Tryon Charlotte, NC 28255 Attention: Edna Benson Fax. No.: (704) 386-4198 Working Capital Commitment: $ 35,000,000 WACHOVIA BANK OF GEORGIA, N.A. By /s/ Michael G. Mountcastle Title: Assistant Vice President 191 Peachtree Street, N.E. Mail Code 3940 Atlanta, Georgia 30303-1757 Attention: Mike G. Mountcastle Tel. No.: (404) 332-5317 Telecopy Number: (404) 332-5016 Lending Office for Base Rate Loans: 191 Peachtree Street, N.E. Mail Code 3940 Atlanta, Georgia 30303-1757 Attention: Mike G. Mountcastle Lending Office for Eurodollar Loans: 191 Peachtree Street, N.E. Mail Code 3940 Atlanta, Georgia 30303-1757 Attention: Mike G. Mountcastle Working Capital Commitment: $ 25,000,000 WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK AND CAYMAN ISLANDS BRANCHES By /s/ S. Battinelli Title: Vice President By /s/ Cynthia M. Niesen Title: Vice President Address for Notices: Westdeutsche Landesbank Girozentrale, New York Branch 1211 Avenue of the Americas New York, NY 10036 Attention: Nandini R. Ray Copy to: Cynthia Niesen Tel. No.: (212) 852-6294 Telecopy Number: (212) 302-7946 Lending Office for Base Rate Loans: Westdeutsche Landesbank Girozentrale, New York Branch 1211 Avenue of the Americas New York, NY 10036 Attention: Nandini R. Ray Lending Office for Eurodollar Loans: Westdeutsche Landesbank Girozentrale, Cayman Islands Branch c/o New York Branch 1211 Avenue of the Americas New York, NY 10036 Attention: Nandini R. Ray Working Capital Commitment: $ 25,000,000 BANQUE PARIBAS By /s/ Richard G. Burrows Title: Vice President By /s/ Duane P. Helkowski Title: Assistant Vice President 787 Seventh Avenue New York, New York 10019 Attention: Richard G. Burrows Tel. No.: (212) 841-2299 Telex Number: FTC 82982 Telecopy Number: (212) 841-2333 Lending Office for Base Rate Loans: 787 Seventh Avenue New York, New York 10019 Attention: Dick O'Leary Lending Office for Eurodollar Loans: 787 Seventh Avenue New York, New York 10019 Attention: Dick O'Leary ADMINISTRATIVE AGENT THE CHASE MANHATTAN BANK (National Association), as Administrative Agent By /s/ Michael J. McGovern Title: Vice President Address for Notices: The Chase Manhattan Bank (National Association) 4 Metrotech Center, 13th Floor Brooklyn, New York 11245 Attention: New York Agency Lenord Selanikio Telex Number: 6720516 CMB NYA UW Telecopy Number: (718) 242-6900 Copy to: The Chase Manhattan Bank (National Association) 1 Chase Manhattan Plaza New York, New York 10081 Attention: Primary Industries Michael McGovern Telex Number: 125563 Telecopy Number: (212) 552-7175 SCHEDULE I Subsidiaries Great River Oil & Gas Corporation GG Terminal Management Corporation Georgia Gulf Export Corporation SCHEDULE II INFORMATION PACKAGE 1. Annual Report on Form 10-K (including audited financial statements of the Company and its Subsidiaries as at and for the year ended December 31, 1994). 2. Projected Financial Results, March 1995 (including management's discussion and analysis thereof) delivered under cover of the Company's letter dated March 6, 1995. EXHIBIT A [Form of Working Capital Loan Note] PROMISSORY NOTE $_______________ ____________, 199_ New York, New York FOR VALUE RECEIVED, Georgia Gulf Corporation, a Delaware corporation (the "Company"), hereby promises to pay to ___________________ (the "Lender"), or order, at the principal office of The Chase Manhattan Bank (National Association) at 1 Chase Manhattan Plaza, New York, New York 10081, the principal sum of _______________ Dollars (or such lesser amount as shall equal the aggregate unpaid principal amount of the Working Capital Loans made by the Lender to the Company under the Credit Agreement referred to below), in lawful money of the United States of America and in immediately available funds, on the dates and in the principal amounts provided in the Credit Agreement, and to pay interest on the unpaid principal amount of each such Working Capital Loan, at such office, in like money and funds, for the period commencing on the date of such Working Capital Loan until such Working Capital Loan shall be paid in full, at the rates per annum and on the dates provided in the Credit Agreement. This Note is one of the Working Capital Loan Notes referred to in the Credit Agreement. The Lender is hereby authorized by the Company to endorse on the schedule (or a continuation thereof) attached to this Note, the date, amount, Type of and Interest Period (if any) for each Working Capital Loan made by the Lender to the Company under the Credit Agreement, and the date and amount of each payment or prepayment of principal of such Working Capital Loan received by the Lender, provided that any failure by the Lender to make any such endorsement shall not affect the obligations of the Company under the Credit Agreement or under this Note in respect of such Working Capital Loans. This Note is one of the Notes referred to in the Credit Agreement (as modified and supplemented and in effect from time to time, the "Credit Agreement") dated as of March 30, 1995 among the Company, the lenders named therein (including the Lender), and The Chase Manhattan Bank (National Association), as Administrative Agent, and evidences Working Capital Loans made by the Lender thereunder. Capitalized terms used in this Note have the respective meanings assigned to them in the Credit Agreement. The Credit Agreement provides for the acceleration of the maturity of this Note upon the occurrence of certain events and for prepayments of Working Capital Loans upon the terms and conditions specified therein. This Note shall be governed by and construed in accordance with the laws of the State of New York. GEORGIA GULF CORPORATION By______________________ Title: SCHEDULE This Note evidences Working Capital Loans made under the within-described Credit Agreement to the Company, on the dates, in the principal amounts, of the types and maturing on the dates set forth below, subject to the payments and prepayments of principal set forth below: Type Principal of Amount of Working Date of Amount Balance Date Working Capital Interest Payment or Paid or Out- Made Capital Loan Loan Period Prepayment Prepaid standing EXHIBIT B [Form of Money Market Loan Note] PROMISSORY NOTE ____________, 199_ New York, New York FOR VALUE RECEIVED, GEORGIA GULF CORPORATION, a Delaware corporation (the "Company"), hereby promises to pay to ______________________ (the "Lender"), or order, at the principal office of The Chase Manhattan Bank (National Association) at 1 Chase Manhattan Plaza, New York, New York 10081, the aggregate unpaid principal amount of the Money Market Loans made by the Lender to the Company under the Credit Agreement, in lawful money of the United States of America and in immediately available funds, on the dates and in the principal amounts provided in the Credit Agreement, and to pay interest on the unpaid principal amount of each such Money Market Loan, at such office, in like money and funds, for the period commencing on the date of such Money Market Loan until such Money Market Loan shall be paid in full, at the rates per annum and on the dates provided in the Credit Agreement. This Note is one of the Money Market Loan Notes referred to in the Credit Agreement. The Lender is hereby authorized by the Company to endorse on the schedule (or a continuation thereof) attached to this Note, the date, amount, Type of, interest rate on and Interest Period for the Money Market Loans (if any) made by the Lender to the Company under the Credit Agreement, and the date and amount of each payment or prepayment of principal of each such Money Market Loan received by the Lender, provided that any failure by the Lender to make any such endorsement shall not affect the obligations of the Company under the Credit Agreement or under this Note in respect of any such Money Market Loan. This Note is one of the Notes referred to in the Credit Agreement (as modified and supplemented and in effect from time to time, the "Credit Agreement") dated as of March 30, 1995 among the Company, the lenders named therein (including the Lender) and The Chase Manhattan Bank (National Association), as Administrative Agent, and evidences Money Market Loans made by the Lender thereunder. Capitalized terms used in this Note have the respective meanings assigned to them in the Credit Agreement. The Credit Agreement provides for the acceleration of the maturity of this Note upon the occurrence of certain events and for prepayments of Loans upon the terms and conditions specified therein. This Note shall be governed by, and construed in accordance with, the law of the State of New York. GEORGIA GULF CORPORATION By_________________________ Title: SCHEDULE This Note evidences Money Market Loans made under the within-described Credit Agreement to the Company, on the dates, in the principal amounts, of the types, bearing interest at the rates and maturing on the dates set forth below, subject to the payments and prepayments of principal set forth below: Principal Date Amount Type Amount Unpaid of of of Interest Interest Paid or Principal Notation Loan Loan Loan Rate Period Prepaid Amount Made By EXHIBIT C [Form of Money Market Quote Request] [Date] To: The Chase Manhattan Bank, N.A., as Administrative Agent From: Georgia Gulf Corporation Re: Money Market Quote Request Pursuant to Section 3.03 of the Credit Agreement (the "Credit Agreement") dated as of March 30, 1995 among Georgia Gulf Corporation, the Lenders named therein and The Chase Manhattan Bank, N.A., as Administrative Agent, we hereby give notice that we request Money Market Quotes for the following proposed Money Market Borrowing(s): Borrowing Quotation Interest Date Date 1/ Amount 2/ Type 3/ Period 4/ Terms used herein have the meanings assigned to them in the Credit Agreement. Please respond to this invitation by no later than [2:00 P.M.] [10:00 A.M.] (New York City time) on [date]. Georgia Gulf Corporation By______________________ Title: _____________ * All numbered footnotes appear on the last page of this Exhibit. __________ 1/ For use if a Money Market Rate in a Set Rate Auction is requested to be submitted before the Borrowing Date. 2/ Each amount must be $5,000,000 or a larger multiple of $1,000,000. 3/ Insert either "Margin" (in the case of LIBOR Market Loans) or "Rate" (in the case of Set Rate Loans). 4/ One, two, three, six or twelve calendar months, in the case of a LIBOR Market Loan or, in the case of a Set Rate Loan, a period of up to 360 (but not less than 7) days after the making of such Set Rate Loan and ending on a Business Day. The Company may request offers to make Money Market Loans for up to three different Interest Periods in a single notice. EXHIBIT D [Form of Money Market Quote] The Chase Manhattan Bank, N.A., as Administrative Agent Attention: New York Agency Re: Money Market Quote to Georgia Gulf Corporation (the "Company") This Money Market Quote is given in accordance with Section 3.03(b) of the Credit Agreement (the "Credit Agreement") dated as of March 30, 1995, among Georgia Gulf Corporation, the Lenders named therein and The Chase Manhattan Bank, N.A., as Administrative Agent. Terms defined in the Credit Agreement are used herein as defined therein. In response to the Company's invitation dated __________, 19__, we hereby make the following Money Market Quote(s) on the following terms: 1. Quoting Bank. 2. Person to contact and telephone number at Quoting Bank. We hereby offer to make Money Market Loan(s) in the following principal amounts for the following Interest Periods and at the following rates: Borrowing Quotation Interest Date Date 1/ Amount 2/ Type 3/ Period 4/ Rate 5/ _____________ * All numbered footnotes appear on the last page of this Exhibit. We understand and agree that the offer(s) set forth above, subject to the satisfaction of the applicable conditions set forth in the Credit Agreement, irrevocably obligate(s) us to make the Money Market Loan(s) for which any offer(s) [is] [are] accepted, in whole or in part (subject to the third sentence of Section 3.03(c) of the Credit Agreement). Very truly yours, [Name of Bank] By:_______________________ Dated: Authorized Officer __________ 1/ As specified in related Money Market Quote Request. 2/ The principal amount bid for each Interest Period may not exceed the principal amount requested but must be at least $5,000,000 or a larger multiple of $1,000,000. Specify aggregate limitation if the sum of individual offers exceeds the amount the Lender is willing to lend. 3/ Indicate "Margin" (in the case of LIBOR Market Loans) or "Rate" (in the case of Set Rate Loans). 4/ Up to 360 (but not less than 7) days for Set Rate Loans; one, two, three, six or twelve calendar months for LIBOR Market Loans. The Company may request offers to make Money Market Loans for up to three different Interest Periods in a single invitation. 5/ Margin above or below the applicable Eurodollar Rate in case of LIBOR Market Loans (specify "PLUS" or "MINUS") or rate of interest per annum (in case of Set Rate Loans) (rounded upwards in either case, if necessary, to nearest 1/10,000th of 1%). EXHIBIT E FORM OF OPINION OF COUNSEL TO THE COMPANY [Dated the Closing Date] To each of the Lenders and the Administrative Agent referred to below: Re: Georgia Gulf Corporation Gentlemen: We have acted as special counsel to Georgia Gulf Corporation, a Delaware corporation (the "Company"), in connection with the transactions contemplated by that certain Credit Agreement dated as of March 30, 1995 (the "Credit Agreement") among the Company, each of the Lenders referred to therein and The Chase Manhattan Bank (National Association), as Administrative Agent. This opinion is delivered pursuant to Section 7.01(e) of the Credit Agreement. Capitalized terms contained but not otherwise defined herein shall have the meanings ascribed to them in the Credit Agreement whether directly or by reference therein to definitions contained in other documents. In connection with this opinion we have examined and relied upon originals, or copies certified or otherwise identified to our satisfaction, of such corporate documents and records of the Company and certificates of public officials and other documents, and have received such information from officers and representatives of the Company, as we have deemed necessary to enable us to express the opinions below. We have also relied on certificates of officers of the Company as to certain factual matters. In rendering our opinion we have assumed, without independent investigation, (i) the genuineness of all signatures, (ii) the authenticity of all documents submitted to us as originals, (iii) the conformity to authentic original documents of all documents submitted to us as certified, conformed or photostatic copies, (iv) the due authorization, execution and delivery of all documents referred to herein by the parties thereto other than the Company, and the binding effect of such documents on such parties other than the Company, and (v) that each of the Basic Documents has been duly executed and delivered by each of the parties thereto substantially in the form thereof submitted to us. Based on the foregoing, and subject to the further assumptions, qualifications and limitations hereinafter set forth, we are of the opinion that: 1. The Company has been duly incorporated, and is validly existing and in good standing as a corporation, under the laws of the State of Delaware with all requisite corporate power and authority to conduct its business as now being conducted or as proposed to be conducted in the Basic Documents, and to enter into the Basic Documents and perform the Basic Documents. 2. Each of the Basic Documents has been duly authorized, executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable against it in accordance with its terms, except as any enforceability thereof may be (a) limited by the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally, and (b) subject to the effect of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 3. No authorization, consent or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for (i) the due execution, delivery, recordation or performance by the Company of any Basic Document, except for (a) filings or other actions that may be required after the date hereof to maintain corporate good standing, (b) the exercise of rights and remedies by the Administrative Agent or one of the Lenders requiring notice to or filing with any court or any prior court approval, and (c) authorizations, consents and approvals that have already been obtained and filings and recordations that have already been made. 4. To our knowledge, after due inquiry, neither the Company nor any of its Subsidiaries is an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, 15 U.S.C. Section 80a-1 et seq. 5. To our knowledge, after due inquiry, neither the Company nor any of its Subsidiaries is a "holding company" or an "affiliate" of a "holding company" or a "subsidiary company" of a "holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended, 15 U.S.C. Section 79 et seq. 6. The choice of New York law to govern the Credit Agreement is a valid and effective choice of law under the laws of the States of Georgia and Delaware, and adherence to existing judicial precedents generally would require a court sitting in the States of Georgia or Delaware to abide by such choice by law, unless a fundamental policy of the State in which such court is sitting would be violated. 7. Neither the execution, delivery or performance by the Company of any of the Basic Documents, nor the consummation of the transactions therein contemplated in compliance with the terms and provisions therein (i) conflicts with or results in any breach of or requires any consent or constitutes a default under, or results in the creation or imposition of any Lien on any of the property or assets of any of the Company or any of its Subsidiaries under, any existing indenture, mortgage, deed or trust, loan agreement or other agreement or instrument known to us after due inquiry to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound or to which any of the property or assets of the Company or any of its Subsidiaries is subject, or (ii) contravenes the provisions of the existing certificate of incorporation or by-laws of the Company or any of its Subsidiaries, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency known to us after due inquiry to be applicable to the Company or any of its Subsidiaries or their respective businesses or properties. 8. We are not acting as counsel for the Company in any pending litigation in which the Company is a party, and we have not had referred to us by the Company for legal advice or legal representation any matter that we believe might be deemed to be overtly threatened litigation in which the Company may become a party, except those matters listed on Schedule I attached hereto. The statement set forth in the preceding sentence is limited to those matters that the Company has referred to us for legal representation or about which the Company has consulted us as counsel and with respect to which we have given substantive attention. We have identified those matters by making inquiry of lawyers presently in our firm who, according to our records, have been engaged in legal services on behalf of the Company since January 1, 1994, and by examining certain current records that we maintain for our internal operations. In that process we have not undertaken any independent review of documents or records concerning the Company that are in our possession. We disclaim any undertaking to advise you of changes brought to our attention subsequent to the date of this letter. 9. Neither the Company nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business or extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U or X of the Board of Governors of the Federal Reserve System). The foregoing opinion is predicated upon and qualified in its entirety by the following: (a) The foregoing opinion is based upon and is limited exclusively to the laws of the States of New York and Georgia, the General Corporation Law of the State of Delaware and the relevant law of the United States of America, and we render no opinion with respect to the law of any other jurisdiction. (b) As used in this opinion, the term "to our knowledge" or other term or phrase to such effect refers to the actual knowledge on the date hereof solely of the lawyers of the firm who are presently representing the Company and its Subsidiaries and representations made to such lawyers by the Company and its Subsidiaries in connection with the matters expressly set forth or described herein. (c) In rendering the foregoing opinions, we have relied upon certificates of officers (after the discussion of the contents thereof with such officers) of the Company or its Subsidiaries or certificates of others as to the existence or nonexistence of the circumstances upon which such opinion is predicated. We have no reason to believe, however, that any such certificate or representation or warranty is untrue or inaccurate in any material respect. Whenever our opinion is based on circumstances "known to us after due inquiry," or "to our knowledge after due inquiry" we have relied exclusively upon such certificates and representations and warranties. (d) We express no opinion as to (i) any provision of the Credit Agreement or any Note purporting to provide for the payment of interest on overdue interest; (ii) the second sentence of Section 12.11 of the Credit Agreement, insofar as such sentence relates to the subject matter jurisdiction of the United States District Court for the Southern District of New York to adjudicate any controversy relating to the Credit Agreement; or (iii) the effect of the laws of any jurisdiction (other than the State of New York) wherein any Lender may be located that limit rates of interest that may be charged or collected by such Lender. Further, we express no opinion as to the effect of the compliance or noncompliance of the Administrative Agent or any of the Lenders with any state or federal laws or regulations applicable to the Administrative Agent or any of the Lenders by reason of the legal or regulatory status or the nature of the business of the Administrative Agent or any of the Lenders. (e) The opinions expressed herein shall be effective only as of the date of this letter. We do not assume responsibility for updating this opinion as of any date subsequent to the date of this letter, and assume no responsibility for advising you of any changes with respect to any matters described in this letter that may occur subsequent to the date of this letter, whether such changes result from events occurring subsequent to the date of this letter or from the discovery subsequent to the date of this letter of information not previously known to us pertaining to events occurring prior to the date of this letter. This opinion is furnished to you by us, as special counsel for the Company, solely for your benefit and the benefit of your successors as Lenders or as Administrative Agent based upon the understanding, as we have advised you, that we are not hereby assuming any professional responsibility to any other person whatsoever. Very truly yours, SCHEDULE I Litigation EXHIBIT F FORM OF OPINION OF SPECIAL NEW YORK COUNSEL TO THE ADMINISTRATIVE AGENT [Dated the Closing Date] To the Lenders and the Administrative Agent Referred to Below c/o The Chase Manhattan Bank (National Association) 1 Chase Manhattan Plaza New York, New York 10081 Dear Sirs: We have participated in the preparation of the Credit Agreement (the "Credit Agreement") dated as of March 30, 1995 among Georgia Gulf Corporation, a Delaware corporation (the "Company"), the Lenders referred to therein (the "Lenders") and The Chase Manhattan Bank (National Association), as Administrative Agent (the "Administrative Agent"), and have acted as special counsel for the Administrative Agent for the purpose of rendering this opinion pursuant to Section 7.01(f) of the Credit Agreement. Terms defined in the Credit Agreement are used herein as therein defined. We have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments and have conducted such other investigations of fact and law as we have deemed necessary or advisable for purposes of this opinion. Upon the basis of the foregoing, we are of the opinion that: 1. The execution, delivery and performance by the Company of the Credit Agreement and the Notes delivered on the date hereof are within the Company's corporate powers and have been duly authorized by all necessary corporate action. 2. The Credit Agreement constitutes a valid and binding agreement of the Company and such Notes constitute valid and binding obligations of the Company. In giving the foregoing opinion, we express no opinion as to (1) the effect (if any) of any law of any jurisdiction (except the State of New York) in which any Lender is located which limits the rate of interest that such Lender may charge or collect; (2) whether provisions of the Basic Documents which permit the Administrative Agent, the Majority Lenders, or any Lender to take action or make determinations or to require payments under indemnity and similar provisions may be subject to a requirement that such action be taken or such determinations be made on a reasonable basis and in good faith and that any action or omission to act in respect of which any such payment is so required be reasonable and in good faith; or (3) whether a holder of any Note may, under certain circumstances, be called upon to prove the outstanding amount of the Loans evidenced thereby. We are members of the bar of the State of New York and we do not herein express any opinion as to any matters governed by any laws other than the laws of the State of New York and the General Corporation Law of the State of Delaware. Very truly yours, EX-27 2 FDS FOR 1ST QUARTER 10-Q
5 This schedule contains summary financial information extracted from Georgia Gulf Corporation's Form 10-Q for the quarter ended March 31, 1995 and is qualified in its entirety by reference to such financial statements. 1000 3-MOS DEC-31-1994 JAN-1-1995 MAR-31-1995 2,669 0 163,614 3,122 74,672 258,115 465,450 199,272 527,525 155,798 320,481 395 0 0 10,874 527,525 314,026 314,026 195,839 195,839 0 0 8,712 97,892 37,735 60,157 0 0 0 60,157 1.44 1.44
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