Document:

Second Amendment to Amended and Restated Credit Agreement, dated April 14, 2003

 
Exhibit 10.16

 
SECOND AMENDMENT TO AMENDED AND
RESTATED CREDIT AGREEMENT 
 
THIS SECOND
AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 14, 2003 (this “Agreement”), is by and among GEO SPECIALTY CHEMICALS, INC. (“Borrower”), certain financial institutions party to the Credit
Agreement referred to below (the “Lenders”), DEUTSCHE BANK TRUST COMPANY AMERICAS f/k/a BANKERS TRUST COMPANY, in its capacity as administrative agent (the “Administrative Agent”), and US BANK NATIONAL ASSOCIATION,
in its capacity as documentation agent (“Documentation Agent”). 
 
BACKGROUND 
 
A. Borrower, the Lenders, the Administrative Agent, and Documentation Agent are parties to that certain Amended and Restated Credit Agreement dated as of May 31, 2001, as amended by that certain First Amendment to Amended
and Restated Credit Agreement dated as of May 14, 2002 (as amended, restated, supplemented or otherwise modified and in effect from time to time, the “Credit Agreement”). 
 
B. Borrower has requested the Administrative Agent and the Lenders amend the Credit Agreement in certain
respects as set forth herein and the Administrative Agent and the Lenders are agreeable to the same, subject to the terms and conditions set forth herein. 
 
AGREEMENT 
 
NOW THEREFORE, in consideration of the premises and of the mutual covenants herein contained, the parties hereto agree as follows:

 
SECTION 1. DEFINED TERMS. Unless
otherwise defined herein, all capitalized terms used herein shall have the meanings given them in the Credit Agreement. 
 
SECTION 2. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is, as of the Second Amendment Effective Date (as defined below),
hereby amended as follows: 
 
(a) Subsection
1.01(a) of the Credit Agreement is hereby amended by adding a new paragraph (iv) thereto as follows: 
 
“(iv) Notwithstanding anything herein to the contrary, no Lender shall be obligated to make any Revolving Loans,
Swingline Loans or issue any Letter of Credit if (x) the Senior Leverage Ratio of the Borrower is greater than 2.5 to 1.0 (as evidenced by the certificate most recently delivered prior to the date of the proposed borrowing or issuance pursuant to
Section 7.01(c)) and after giving effect to such Revolving Loans, Swingline Loans or L/C Obligations, the aggregate amount of all Revolving Loans, Swingline Loans and L/C Obligations then outstanding shall exceed $15,000,000, or (y) after giving
effect to such Revolving Loans, Swingline Loans or L/C Obligations, the aggregate amount of cash and Cash Equivalents (excluding foreign cash and Foreign Cash Equivalents in an aggregate amount not to exceed $3,500,000 at any time) held by the
Borrower and its Subsidiaries shall exceed $5,000,000 (as evidenced by a certificate of an Authorized Officer of the Borrower, in form and substance satisfactory to the Administrative Agent), or (z) after giving effect to such Revolving Loans,
Swingline Loans or L/C Obligations, the aggregate amount of all Revolving Loans, Swingline 

 
Loans and L/C
Obligations then outstanding shall exceed $5,000,000 and such Obligations shall not have been secured by a letter of credit as required by the terms of the Support Agreement, provided, that this clause (z) shall be inapplicable if,
concurrently with any Borrowing or request for Letter of Credit, the Borrower shall have delivered to the Administrative Agent, a certificate of an Authorized Officer of the Borrower, in form and substance satisfactory to the Administrative Agent,
demonstrating that the Senior Leverage Ratio of the Borrower is less than 2.5 to 1.0 for each of the Test Periods ending with the immediately preceding two consecutive fiscal quarters.” 
 
(b) Subsections 1.03(a) and (d), 1.06 and
1.09(a) are hereby amended by deleting in its entirety the following parenthetical in each instance it appears therein: “(or telephonic notice promptly confirmed in writing).” 
 
(c) Subsection 4.02(d) of the Credit Agreement is
hereby amended by deleting in its entirety the number “$5,000,000” where it appears in the first proviso of such subsection and substituting therefor the number “$1,000,000.” 
 
(d) Subsection 4.02(h) of the Credit Agreement is
hereby amended by deleting in its entirety the number “$15,000,000” where it appears in clause (2) of the proviso in the first paragraph therein and where it appears in paragraph (i) therein and substituting therefor the number
“$5,000,000.” 
 
(e) Subsection
4.02(i) of the Credit Agreement is hereby amended by adding the following proviso at the end of clause (iv) therein as follows: 
 
“ ; provided, however, that prepayments of principal pursuant to Section 4.02(d) shall be applied first to any
Scheduled Term B Repayments due and owing within the twenty four month period following the date of receipt of such proceeds and thereafter pro rata to any remaining Scheduled Term B Repayments.” 
 
(f) Subsection 7.01(e) of the Credit Agreement is
hereby amended by numbering the first paragraph therein “(i)” and adding a new paragraph (ii) thereto as follows: 
 
“ (ii) Notwithstanding anything herein to the contrary, for the fiscal quarters ending June 30, 2003 and December 31,
2003, respectively, as soon as practicable and in any event no later than 25 days after the close of such fiscal quarters, a certificate of the chief financial officer, controller or other Authorized Officer of the Borrower to the effect that no
Default or Event of Default exists or, if any Default or Event of Default does exist, specifying the nature and extent thereof, which certificate shall set forth the calculations required to establish whether the Borrower and its Subsidiaries were
in compliance with the Senior Leverage Ratio as at the end of such fiscal quarters, it being understood that such calculations shall be based solely upon the Borrower’s internal, unreviewed and unaudited financial statements prepared on or
before the date of such certificate.”  
 
(g) Subsection 8.05(a) of the Credit Agreement is hereby amended by deleting the table therein in its entirety and substituting therefor the following table: 
 

	 “Fiscal Year Ending

	  	 Amount

	 December 31, 2002
	  	 $
	 10,000,000

	 December 31, 2003
	  	 $
	 7,000,000

 

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	 December 31, 2004
	  	 $
	 8,000,000

	 December 31, 2005
	  	 	 
	 and each fiscal year
	  	 	 
	 thereafter
	  	 $
	 10,000,000”

 
(h)
Section 8.10 of the Credit Agreement is hereby amended by deleting the table therein in its entirety and substituting therefor the following table: 
 

	 “Fiscal Quarter

	  	 Ratio

	 March 31, 2003
	  	 1.15:1.00

	 June 30, 2003
	  	 1.10:1.00

	 September 30, 2003
	  	 1.15:1.00

	 December 31, 2003
	  	 1.20:1.00

	 March 31, 2004
	  	 2.50:1.00

	 June 30, 2004
	  	 2.50:1.00

	 September 30, 2004
	  	 2.50:1.00

	 December 31, 2004
	  	 2.50:1.00

	 March 31, 2005
	  	 2.75:1.00

	 June 30, 2005
	  	 2.75:1.00

	 September 30, 2005
	  	 2.75:1.00

	 December 31, 2005
	  	 2.75:1.00

	 March 31, 2006
	  	 3.00:1.00

	 June 30, 2006
	  	 3.00:1.00

	 September 30, 2006
	  	 3.00:1.00

	 December 31, 2006
	  	 3.00:1.00

	 March 31, 2007
	  	 3.25:1.00

	 June 30, 2007
	  	 3.25:1.00

	 September 30, 2007
	  	 3.25:1.00

	 December 31, 2007
	  	 3.25:1.00”

 
(i)
Subsection 8.11(b) of the Credit Agreement is hereby amended by deleting the table therein in its entirety and substituting therefor the following table: 
 

	 “Fiscal Quarter

	  	 Ratio

	 March 31, 2003
	  	 4.35:1.00

	 June 30, 2003
	  	 4.30:1.00

	 September 30, 2003
	  	 4.00:1.00

	 December 31, 2003
	  	 3.85:1.00”

 
(j)
Subsection 9.03 of the Credit Agreement is hereby amended by restating in its entirety clause (a) therein as follows: 
 
“ (a) default in the due performance or observance by it of any term, covenant or agreement contained in Sections 7.01(e)(ii),
7.01(f)(x), 7.09 or 8,” 
 
(k) Section
9 of the Credit Agreement is hereby amended by adding the word “or” at the end of subsection 9.10 and adding a new subsection 9.11 thereto as follows: 
 
“9.11 Support Agreement. The Support Agreement or any provision thereof shall
cease to be in full force or effect (other than pursuant to the terms thereof), or any 
 

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Obligor (as
defined therein) or any Person acting by or on behalf of any Obligor shall deny or disaffirm such Obligor’s obligations under such Support Agreement or any Obligor shall default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to the Support Agreement.” 
 
(l) Section 10 of the Credit Agreement is hereby amended as follows: 
 
(ii) The proviso in the definition of “Base Rate Margin” is hereby deleted in its entirety and replaced as follows:

 
“; provided,
however, notwithstanding the applicable percentages set forth in the above table with respect to the Term B Loans, for the period from April 1, 2003 through and inclusive of March 31, 2004, such applicable percentages shall be deemed to be 100
basis points above the applicable percentages set forth therein; and provided, further, however, for the period from the Second Amendment Effective Date until the date of receipt by the Administrative Agent of the certificate required to be
delivered by the Borrower pursuant to Section 7.01(e) for the fiscal quarter ended March 31, 2003, the Base Rate Margin shall be 5.25% for Term B Loans.” 
 
(iii) The definition therein of “Consolidated Net Senior Indebtedness” is hereby deleted in its
entirety. 
 
(iv) The proviso in the definition
therein of “Eurocurrency Margin” is hereby deleted in its entirety and replaced as follows: 
 
“; provided, however, notwithstanding the applicable percentages set forth in the above table with respect to
the Term B Loans, for the period from April 1, 2003 through and inclusive of March 31, 2004, such applicable percentages shall be deemed to be 100 basis points above the applicable percentages set forth therein; and provided, further,
however, for the period from the Second Amendment Effective Date until the date of receipt by the Administrative Agent of the certificate required to be delivered by the Borrower pursuant to Section 7.01(e) for the fiscal quarter ended
March 31, 2003, the Eurocurrency Margin shall be 6.00% for Term B Loans.”  
 
(v) The definition therein of “Senior Leverage Ratio” is hereby amended and restated in its entirety as follows: 
 
“ ‘Senior Leverage Ratio’ shall mean, at any date of determination, the
ratio of (i) Consolidated Senior Indebtedness on such date to (ii) Consolidated EBITDA for the Test Period most recently ended (taken as one accounting period).” 
 
(vi) New definitions of “Consolidated Senior Indebtedness,” “Foreign Cash Equivalents”
and “Support Agreement” are hereby added to Section 10 in appropriate alphabetical order as follows: 
 
“ ‘Consolidated Senior Indebtedness’ shall mean, at any date of determination, an amount equal to
the amount of Consolidated Indebtedness at such time less (x) any Indebtedness evidenced by the Senior Subordinated Notes and (y) any Indebtedness evidenced by any Revolving Loans, Swingline Loans and L/C Obligations outstanding to the extent such
Obligations shall have been secured by letters of credit as required by the terms of the Support Agreement.” 
 

-4- 

 
“ ‘Foreign Cash Equivalents’ means any investment rated P-1 or A-1 or better by Moody’s or S&P, respectively, (a) in direct obligations issued by, or guaranteed by, the government of a country that is a
member of the Office for Economic Co-operation and Development or any agency or instrumentality thereof (“OECD”), provided that, such obligations mature within 180 days of the date of acquisition thereof, and (b) in time
deposits or negotiable certificates of deposit or money market securities, payable on demand or maturing within 180 days of the acquisition thereof and issued by any commercial banking institution that is a member of an applicable central bank of a
country that is a member of the OECD having surplus of at least the equivalent of $500 million in the aggregate at all times, provided that, with respect to such time deposits, negotiable certificates of deposit and money market securities,
the Required Lenders shall have at any time the right, upon notice to the Borrower, to reject any such bank as a bank in which such Foreign Cash Equivalents may be made.” 
 
“ ‘Support Agreement’ shall mean that certain Support Agreement dated
as of April 11, 2003 among the Administrative Agent, on behalf of the Revolving Lenders, Charter Oak and the Borrower, as the same may be amended from time to time.” 
 
SECTION 3. SUPPORT AGREEMENT. In the event of any Payment Default, any Support Agreement Default or
any Insolvency Event (each as defined in the Support Agreement), the Administrative Agent shall be entitled to draw on any letters of credit issued pursuant to the Support Agreement and shall apply the proceeds therefrom solely to reduce outstanding
Revolving Loans, Swingline Loans and L/C Obligations in accordance with the terms thereof. 
 
SECTION 4. AMENDMENT FEE. (a) Borrower agrees to pay a fee to the Administrative Agent on or prior to the Second Amendment Effective Date on behalf of each Lender which has executed and
delivered this Agreement on or prior to 5:00 p.m. C.S.T. on April 11, 2003 equal to 0.25% times the sum of the Total Revolving Loan Commitment and the outstanding Term B Loan of such Lender as in effect under the Credit Agreement on the Second
Amendment Effective Date. 
 
(b) Borrower also
agrees to pay all reasonable costs and expenses of the Administrative Agent in connection with the negotiation, preparation, printing, typing, reproduction, execution and delivery of this Agreement and all other documents furnished pursuant hereto
or in connection herewith, including without limitation, the reasonable fees and disbursements of Winston & Strawn, special counsel to the Administrative Agent, as well as the reasonable fees and disbursements of counsel, independent public
accountants and other outside experts retained by the Administrative Agent in connection with the administration of this Agreement. 
 
SECTION 5. CHANGES IN INTEREST RATES AND FEES. Borrower, the Lenders and the Administrative Agent acknowledge and agree that any
increases in any interest rates or fees resulting from the effectiveness of this Agreement shall be effective as of the Second Amendment Effective Date. 
 
SECTION 6. CONDITIONS PRECEDENT TO EFFECTIVENESS OF AGREEMENT. This Agreement shall become effective upon the date (the
“Second Amendment Effective Date”) each of the following conditions have been satisfied: 
 
(a) Second Amendment. Borrower, the Administrative Agent and the Required Lenders shall have executed and delivered this Agreement.

 
(b) No Defaults. No Default or Event of
Default under the Credit Agreement (as amended hereby) shall have occurred and be continuing. 
 

-5- 

 
(c)
Representations and Warranties. The representations and warranties of Borrower contained in this Agreement, the Credit Agreement (as amended hereby) and the other Credit Documents shall be true and correct in all material respects as of the
Second Amendment Effective Date, with the same effect as though made on such date, except to the extent that any such representation or warranty expressly relates to an earlier date, in which case such representation or warranty shall be true and
correct in all material respects as of such earlier date. 
 
(d) Payment of Amendment Fee. Borrower shall have paid in full to the Administrative Agent, on behalf of each Lender, the fees set forth in Section 3 hereof and any other separately agreed upon fees. 
 
(e) Support Agreement; Subordination and Intercreditor
Agreement. Borrower, the Administrative Agent and Charter Oak shall have executed and delivered a Support Agreement and a Subordination and Intercreditor Agreement, each in form and substance satisfactory to the Administrative Agent.

 
(f) Perfection Certificate. Borrower
shall have executed and delivered a duly completed perfection certificate in form and substance reasonably satisfactory to the Administrative Agent. 
 
(g) Reaffirmation of Guaranty. Each Subsidiary Guarantor shall have executed and delivered a Reaffirmation of Guaranty in the form
attached as Exhibit A hereto. 
 
(h)
Other. Such other documents, instruments and certificates as the Administrative Agent or any Lender may reasonably request. 
 
SECTION 7. REPRESENTATIONS AND WARRANTIES. 
 
(a) Borrower represents and warrants (i) that it has full corporate power and authority to enter into this
Agreement and perform its obligations hereunder in accordance with the provisions hereof, (ii) that this Agreement has been duly authorized, executed and delivered by Borrower and (iii) that this Agreement constitutes the legal, valid and binding
obligation of Borrower, enforceable against Borrower in accordance with its terms, except to the extent that such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws generally affecting
creditors’ rights and by equitable principles. 
 
(b) Borrower represents and warrants that the following statements are true and correct, in each case after giving effect to this Agreement: 
 
(i) The representations and warranties contained in the Credit Agreement and each of the other Credit Documents are and
will be true and correct in all material respects on and as of the Second Amendment Effective Date to the same extent as though made on and as of that date, except to the extent such representations and warranties expressly relate to an earlier
date, in which case they were true and correct in all material respects on and as of such earlier date. 
 
(ii) No event has occurred and is continuing or will result from the consummation of the transactions contemplated by this
Agreement that would constitute an Event of Default or a Default. 
 

-6- 

(iii) The execution, delivery and performance of this Agreement by
Borrower do not and will not violate any provision of the certificate of incorporation or by-laws, any applicable law, statute, rule, regulation, order, writ, injunction or decree of any court or Governmental Authority having jurisdiction over it or
any contractual provision to which it is a party or to which it or any of its property is subject. 
 
(iv) No material order, consent, approval, license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any foreign or domestic governmental or public body or authority, or any subdivision thereof, is required to authorize or is required in connection with its execution, delivery and performance of this Agreement and all
agreements, documents and instruments executed and delivered pursuant to this Agreement. 
 
SECTION 8. REFERENCES TO AND EFFECT ON THE CREDIT AGREEMENT. 
 
(a) On and after the Second Amendment Effective Date each reference in the Credit Agreement to “this Agreement,”
“hereunder,” “hereof,” “herein,” or words of like import, and each reference to the Credit Agreement in the Credit Documents and all other documents (the “Ancillary Documents”) delivered in connection
with the Credit Agreement shall mean and be a reference to the Credit Agreement as amended hereby. 
 
(b) Except as specifically amended above, the Credit Agreement, the Credit Documents and all other Ancillary Documents shall remain in
full force and effect and are hereby ratified and confirmed. 
 
(c) The execution, delivery and effectiveness of this Agreement shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of the Lenders or the Administrative Agent under the Credit Agreement,
the Credit Documents or the Ancillary Documents. 
 
SECTION 9. EXECUTION IN COUNTERPARTS. This Agreement may be executed in counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and
the same instrument. Delivery of an executed counterpart of a signature page of this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart of this Agreement. 
 
SECTION 10. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE INTERNAL CONFLICTS OF LAWS PROVISIONS THEREOF. 
 
SECTION 11. HEADINGS. Section headings in this Agreement are included herein for convenience of
reference only and shall not constitute a part of this Agreement for any other purposes. 
 

-7- 

 
IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the date above first written. 
 

	 GEO SPECIALTY CHEMICALS, INC.

	
	 By:
	 	  

	
	 Name:
	 	  

	
	 Tilte:
	 	  

 

	 DEUTSCHE BANK TRUST COMPANY
 AMERICAS (F/K/A BANKERS TRUST
 COMPANY), individually and as
 Administrative Agent

	
	 By:
	 	  

	
	 Name:
	 	  

	
	 Tilte:
	 	  

 

	 US BANK NATIONAL ASSOCIATION,
 individually and as Documentation Agent

	
	 By:
	 	  

	
	 Name:
	 	  

	
	 Tilte:
	 	  

 

10 

 
EXHIBIT
A 
 
REAFFIRMATION OF GUARANTY

 
The undersigned acknowledges receipt of the
Amended and Restated Credit Agreement dated as of May 31, 2001, as amended by the First Amendment to Credit Agreement dated as of May 14, 2002 and the Second Amendment to Credit Agreement dated as of April     , 2003 (as
so amended, the “Credit Agreement”), by and among GEO Specialty Chemicals, Inc. (“Borrower”), certain financial institutions party thereto, Deutsche Bank Trust Company Americas f/k/a Bankers Trust Company, in its
capacity as administrative agent, Salomon Smith Barney Inc., in its capacity as syndication agent and US Bank National Association, in its capacity as documentation agent and the undersigned consents to the Credit Agreement (as so amended) and each
of the amendments, referenced therein, and hereby reaffirms its obligations under the Subsidiary Guaranty (as such term is defined in the Credit Agreement) executed by the undersigned. 
 
Dated as of April     , 2003 
 
GEO SPECIALTY CHEMICALS LIMITED 
 
By: GEO SPECIALTY CHEMICALS, INC., 
 
its Sole Member 
 

	
	 By:
	 	  

	
	 Name:
	 	  

	
	 Title:Support Agreement, dated April 14, 2003

Exhibit 10.17 
 
SUPPORT AGREEMENT 
 
THIS SUPPORT AGREEMENT (this “Agreement”) is made as of April 14, 2003, by Charter Oak
Partners, a Connecticut partnership, and Charter Oak Capital Partners, L.P., a Delaware limited partnership (individually, an “Obligor” and collectively, the “Obligors”), for the benefit of the Revolving Lenders
(individually a “Revolving Lender” and collectively, the “Revolving Lenders”) party to the Credit Agreement (as defined below) and Deutsche Bank Trust Company Americas f/k/a Bankers Trust Company, as administrative
agent for the Revolving Lenders (the “Agent”). Capitalized terms used herein without definitions shall have the meanings given to them in the Credit Agreement. 
 
RECITALS 
 
WHEREAS, the Revolving Lenders have provided revolving credit facilities to GEO Specialty Chemicals, Inc., an
Ohio corporation (the “Borrower”), pursuant to that certain Amended and Restated Credit Agreement dated as of May 31, 2001 (as amended, restated or supplemented from time to time including by the Amendment described below, the
“Credit Agreement”). 
 
WHEREAS,
the Obligors are the legal and beneficial owners of substantially all of the issued and outstanding capital stock of the Borrower. 
 
WHEREAS, the Borrower has requested that the Agent and the Revolving Lenders enter into an amendment to the Credit Agreement of even date
herewith (the “Amendment”). 
 
WHEREAS, as a condition to the Agent and the Revolving Lenders entering into the Amendment, each Obligor has agreed to enter into this Agreement and to deliver letters of credit to the Agent as required herein. 
 
AGREEMENT 
 
NOW, THEREFORE, in consideration of the premises, and to
induce the Agent and the Revolving Lenders to enter into the Amendment, the Obligors jointly and severally agree as follows: 
 
1. Each Obligor hereby acknowledges and agrees that it will benefit from the Agent’s and the Revolving Lenders’ entering into
the Amendment and the Revolving Lenders’ continued extension of revolving credit facilities to the Borrower under the Credit Agreement, and that such benefit is sufficient consideration for it to enter into this Agreement. 
 
2. The following terms used in this Agreement shall have the
meanings set forth below: 
 
“Aggregate Revolving Credit Outstandings” means, at any time, the sum of the aggregate principal amount of all Revolving Loans and Swingline Loans outstanding at such time plus the L/C Obligations then
outstanding at such time. 
 
“Avoided Payment” has the meaning given such term in Section 5 of this Agreement. 
 
“Charter Oak Letter of Credit” means one or more irrevocable letters of credit, issued by a bank
acceptable to the Agent, for the account of either Obligor and for the benefit of the Agent on behalf of the Revolving Lenders, in form and substance satisfactory to the Agent in its sole and unlimited discretion and delivered to the Agent pursuant
to Section 3 of this Agreement. 

 
“Credit Support Obligations” means the obligations of each Obligor under Section 3 of this Agreement. 
 
“Insolvency Event” means the occurrence of an event described in Section 9.05 of the Credit Agreement.

 
“Maximum Support
Amount” means $10,000,000. 
 
“Payment Default” means the occurrence of an event described in Section 9.01 of the Credit Agreement. 
 
“Required Revolving Lenders” shall mean Non-Defaulting Lenders whose Revolving Loan Commitments (or, if
after the termination thereof, outstanding Revolving Loans and Adjusted RC Percentage of outstanding Swingline Loans and L/C Obligations then outstanding) constitute greater than 50% of the Total Revolving Commitment less the aggregate Revolving
Commitments of Defaulting Lenders (or, if after the Total Revolving Commitment has been terminated, the sum of the total outstanding Revolving Loans of Non-Defaulting Lenders and the aggregate Revolving Percentage of all Non-Defaulting Lenders of
the total outstanding Swingline Loans and L/C Obligations then outstanding at such time). 
 
“Support Agreement Default” means the occurrence of an event described in Section 9.11 of the Credit
Agreement. 
 
“Supported
Obligations” shall mean the aggregate amount by which the Aggregate Revolving Credit Outstandings would exceed $5,000,000 after giving effect to any Borrowing or the issuance of any Letter of Credit pursuant to the Credit Agreement.

 
3. (a) The Obligors hereby jointly and severally
agree to deliver to the Agent a Charter Oak Letter of Credit on or prior to any date upon which the Borrower requests a Borrowing or the issuance of a Letter of Credit which, when aggregated with the Aggregate Revolving Credit Outstandings, shall
exceed $5,000,000. Such Charter Oak Letters of Credit shall be in increments of not less than $1,000,000 and shall at all times be in an aggregate face amount equal to the Supported Obligations; provided, however, notwithstanding any other
provision in this Agreement, the aggregate amount of all (x) drawings made by the Agent under Charter Oak Letters of Credit and (y) the undrawn amount of outstanding Charter Oak Letters of Credit delivered pursuant to this Section 3 shall not
be required to exceed the Maximum Support Amount. 
 
(b) At any time that the Supported Obligations shall have been reduced such that the aggregate face amount of all Charter Oak Letters of Credit then in effect shall exceed the Supported Obligations, the Obligors may, at their option,
cancel the Charter Oak Letters of Credit in an amount sufficient to eliminate such excess and, to the extent necessary, deliver to the Agent in substitution therefor, another Charter Oak Letter of Credit dated the date of such cancellation in an
increment of not less than $1,000,000 and for an amount equal to the amount to which the Supported Obligations shall have been reduced. Upon the request of the Obligors to the extent required to effectuate the cancellation permitted by the terms
hereof and concurrently with the delivery by the Obligors of a substitute Charter Oak Letter of Credit if required pursuant to the terms hereof, the Agent agrees to surrender such Charter Oak Letters of Credit and, if required by the issuer, provide
written confirmation of its consent to such cancellation. 
 
(c) Without limiting the Agent’s absolute discretion to impose additional requirements, (i) any Charter Oak Letter of Credit delivered to the Agent pursuant to subsection (a) above must have an expiration date no earlier
than the earlier of (A) one year from the date of issuance and (B) 
 

2 

 
September 30, 2005 and (ii)
the Agent must be able to draw up to the full undrawn amount of any Charter Oak Letter of Credit (A) immediately upon the occurrence and continuance of any Payment Default, any Insolvency Event or any Support Agreement Default in an amount (when
aggregated with drawings under the other Charter Oak Letters of Credit then in effect) not to exceed the Supported Obligations then outstanding and (B) if such Charter Oak Letter of Credit is scheduled to expire within thirty (30) days and no
extension or replacement satisfactory to the Agent has been provided unless at such time the Obligors are not required to provide such Charter Oak Letter of Credit pursuant to Section 3(a). At any time after the occurrence and during the
continuation of any drawing conditions set forth in the applicable Charter Oak Letter of Credit, the Agent may, subject to clause (A) above, draw up to the entire undrawn amount of such Charter Oak Letter of Credit and apply the proceeds of such
draw as set forth in Section 4. 
 
Notwithstanding any other provision in this Agreement, to the extent that the Borrower prepays Aggregate Revolving Credit Outstandings in an amount sufficient to reduce the amount of Aggregate Revolving Credit Outstandings to not
more than $5,000,000, any Charter Oak Letters of Credit then in effect shall be required to be in place for a period of not less than ninety (90) days after the date of such prepayment. On the 91st day following such prepayment, the Agent agrees to
surrender such Charter Oak Letters of Credit for cancellation and, if required by the issuer, provide written confirmation of its consent to such cancellation. 
 
4. The Agent shall apply the proceeds of any draw against a Charter Oak Letter of Credit to reduce Aggregate Revolving Credit Outstandings
to $5,000,000. The Obligors agree that this Agreement represents a direct obligation of the Obligors to the Agent for the benefit of the Revolving Lenders and no other Person shall have any rights in the proceeds of any Charter Oak Letter of Credit.

 
5. In the event that any Person acting as
custodian, trustee, receiver or in any similar capacity seeks to recover any payment made by the Borrower to the Revolving Lenders or the Agent on the grounds that it represents a preferential transfer or is otherwise avoidable in connection with
the occurrence of an Insolvency Event, the Obligors agree that the Agent shall have the sole discretion to determine whether to disgorge to such Person all or any portion of the payments sought to be recovered (any such disgorged amount shall be
referred to herein as an “Avoided Payment”). To the extent, for any reason, a Charter Oak Letter of Credit does not exist for any Avoided Payment which constitutes a Supported Obligation, the Obligors agree to provide a Charter Oak
Letter of Credit in the amount of such Avoided Payment. 
 
6. Each Obligor and the Borrower acknowledge and agree that the Credit Support Obligations are not conditioned upon the performance of any obligations, material or otherwise, by the Borrower, and that there are no obligations on the
part of Borrower the failure of which to perform would excuse such Credit Support Obligations. The Credit Support Obligations shall be enforceable against each Obligor in accordance with their terms notwithstanding any bankruptcy or insolvency of
the Borrower or any Subsidiary. To the extent required by the terms of this Agreement, each Obligor agrees to provide the Credit Support Obligations in full to the extent provided herein: (a) without deduction by reason of any setoff, defense (other
than payment) or counterclaim of the Borrower; (b) without requiring presentment, protest or notice of nonpayment or notice of default to either Obligor, to the Borrower or to any other Person; (c) without demand for payment or proof of such demand
or filing of claims with a court in the event of receivership, bankruptcy or reorganization of the Borrower; (d) without requiring Agent or the Revolving Lenders to resort first to the Borrower or to any other guarantee or any collateral which the
Agent or the Revolving Lenders may hold; (e) without requiring notice of acceptance hereof or assent hereto by the Agent or the Revolving Lenders; and (f) without requiring notice that any of the Credit Support Obligations has been incurred,
extended or continued or of the reliance by the Agent or Revolving Lenders upon this Agreement; all of the foregoing which each Obligor hereby waives. 
 
7. The liability of each Obligor hereunder is exclusive and independent of any security for or other guaranty of the Aggregate Revolving
Credit Obligations whether executed by such Obligor, any other Obligor, any other guarantor or by any other party, and the liability of each Obligor 
 

3 

 
hereunder shall not be
affected or impaired by (a) any direction as to application of payment by the Borrower or by any other party; (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the Aggregate
Revolving Credit Obligations; (c) any payment on or in reduction of any such other guaranty or undertaking; (d) any dissolution, termination or increase, decrease or change in personnel by the Borrower; (e) any payment made to any Revolving Lender
on the Aggregate Revolving Credit Obligations which any Revolving Lender repays the Borrower or trustee pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and each Obligor waives any
right to the deferral or modification of its obligations hereunder by reason of any such proceeding; (f) any action or inaction by the Revolving Lenders; or (g) any invalidity, irregularity or unenforceability of all or part of the Aggregate
Revolving Credit Obligations or of any security therefor. The obligations of the Obligors hereunder shall be unconditional notwithstanding any waiver, modification or amendment of the Credit Agreement pursuant to the terms thereof. 
 
8. The obligations of each Obligor hereunder are independent
of the obligations of any other Obligor, any other guarantor or the Borrower, and a separate action or actions may be brought and prosecuted against each Obligor whether or not action is brought against any other Obligor, any other guarantor or the
Borrower and whether or not any other Obligor, any other guarantor of the Borrower or the Borrower be joined in any such action or actions. Each Obligor waives, to the fullest extent permitted by law, the benefit of any statute of limitations
affecting its liability hereunder or the enforcement thereof. Any payment by the Borrower or other circumstance which operates to toll any statute of limitations as to the Borrower shall operate to toll the statute of limitations as to each Obligor.

 
9. The Obligors acknowledge that the
reimbursement obligations of the Borrower in connection with this Agreement now or hereafter owing to any Obligor are subordinated to the indebtedness of the Borrower to the Lenders pursuant to that certain Intercreditor and Subordination Agreement
dated as of the date hereof among the Borrower, the Obligors and the Agent on behalf of the Lenders substantially in the form of Exhibit A hereto. Without limiting the generality of the foregoing, each Obligor hereby agrees with the Agent on
behalf of the Revolving Lenders that it will not exercise any right of subrogation which it may at any time otherwise have as a result of this Agreement (whether contractual, under Section 509 of the Bankruptcy Code or otherwise) until all
Obligations have been irrevocably paid in full in cash. 
 
10. Each Obligor represents and warrants to the Agent and the Revolving Lenders that (a) such Obligor is validly existing and in good standing under the laws of its state of formation and is duly authorized to execute and deliver,
and to perform its obligations under, this Agreement; (b) the obligations of such Obligor hereunder do not and will not (i) require any consent or approval of any governmental agency or authority (other than any consent or approval which has been
obtained and is in full force and effect) or (ii) conflict with any provision of law, the organizational documents of such Obligor or any agreement, indenture, instrument or other document, or any judgment, order or decree, which is binding upon
such Obligor or any of its properties; and (c) this Agreement constitutes a legal, valid and binding obligation of such Obligor, enforceable against such Obligor in accordance with its terms, subject to bankruptcy, insolvency and similar laws
affecting the enforceability of creditors’ rights generally and to general principles of equity. 
 
11. This Agreement shall inure to the benefit of, and shall be binding upon, the respective successors and permitted assigns of the
parties hereto. Neither Obligor shall assign any of its obligations hereunder without the prior written consent of the Agent and the Required Revolving Lenders. 
 
12. The validity, construction and enforceability of this Agreement shall be governed by the internal laws of
the State of New York, without giving effect to conflict of laws principles thereof, but giving effect to federal laws of the United States applicable to national banks. 
 

4 

 
13. This
Agreement is not, and shall not constitute, a guarantee by the Obligors of the payment of any indebtedness, liability or obligation of any kind of the Borrower. Except as expressly provided herein, the Obligors will not have any obligation or
liability in any respect as a result of any Obligations of the Borrower. 
 
14. This Agreement does not confer on any person or entity any rights as a third-party beneficiary. 
 
15. This Agreement shall terminate, and the Agent shall release the Obligors from their respective obligations under this Agreement, on
the earlier of (a) September 30, 2005 and (b) the date upon which, in conjunction with any Borrowing or request for Letter of Credit, the Borrower shall have provided the Agent with a certificate of an Authorized Officer of the Borrower, in form and
substance satisfactory to the Administrative Agent, demonstrating that the Senior Leverage Ratio of the Borrower is less than 2.5 to 1.0 for each of the Test Periods ending with the two consecutive fiscal quarters immediately preceding such request.
Each Obligor agrees that if at any time all or any part of any payment theretofore applied by the Agent or any Revolving Lender to any of the Supported Obligations is or must be rescinded or returned by the Agent or such Revolving Lender for any
reason whatsoever (including the insolvency, bankruptcy or reorganization of the Borrower), such Supported Obligations shall, for the purposes of this Agreement, to the extent that such payment is or must be rescinded or returned, be deemed to have
continued in existence, notwithstanding such application by the Agent or such Revolving Lender, and this Agreement shall continue to be effective or be reinstated, as the case may be, as to such Supported Obligations, all as though such application
by the Agent or such Revolving Lender had not been made. 
 
16. This Agreement is irrevocable, and neither Obligor may cancel, terminate, amend or otherwise modify its obligations under this Agreement without the written consent of the Agent and the Required Revolving Lenders. This document
constitutes a Credit Document as such term is defined in the Credit Agreement. 
 

5 

 
IN WITNESS
WHEREOF, this Agreement has been executed as of the day and year first above written. 
 

	 CHARTER OAK PARTNERS
 By: Fine Partners, L.P., Managing Partner

	
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

 

	 CHARTER OAK CAPITAL PARTNERS, L.P.
 By: North Fairfield, L.L.C., General Partner

	
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

 
Accepted as of the date first above written: 
 
DEUTSCHE BANK TRUST COMPANY AMERICAS 
f/k/a BANKERS TRUST
COMPANY, as Agent 
 

	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

 
GEO SPECIALTY CHEMICALS, INC. 
 

	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

 

6 

 
EXHIBIT
A 
 
FORM OF INTERCREDITOR AND
SUBORDINATION AGREEMENT 
 
See attached.

 

7

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