AMENDMENT NO. 5
TO CREDIT AND GUARANTY AGREEMENT
AMENDMENT NO. 5 TO CREDIT AND
GUARANTY AGREEMENT (this “Amendment” ),
dated as of December 15, 2006, among Kraton Polymers LLC, a
Delaware limited liability company ( “Company”
), each of the Guarantors listed on the signature pages hereto, the
Lenders party hereto, and UBS AG, Stamford Branch (
“UBS” ), as administrative agent and collateral
agent ( “Agent” ).
RECITALS
WHEREAS , Company, the
Guarantors, the Lenders, Goldman Sachs Credit Partners L.P. and UBS
Securities LLC, as Lead Arrangers, and UBS, as Agent, entered into
the Credit and Guaranty Agreement dated as of December 23,
2003 (as amended pursuant to that certain Amendment No. 1 to
Credit and Guaranty Agreement dated as of March 4, 2004, that
certain Amendment No. 2 to Credit and Guaranty Agreement dated
as of October 21, 2004, that certain Amendment No. 3 to
Credit and Guaranty Agreement dated as of February 16, 2006
and that certain Amendment No. 4 to Credit and Guaranty
Agreement dated as of May 12, 2006, and as further amended,
restated supplemented or otherwise modified from time to time, the
“Credit Agreement” );
WHEREAS , Company desires to
(i) form a limited partnership organized under the laws of the
Netherlands (“ New Holding Dutch CV ”) of which
Company will own, directly and/or indirectly through one or more of
its wholly-owned Domestic Subsidiaries all of the outstanding
Capital Stock (provided that New Holding Dutch CV will in any event
have at least two partners), (ii) contribute to the undivided
community of property ( onverdeelde goederenrechtelijke
gemeenschap ) created pursuant to the formation documents for
New Holding Dutch CV, 100% of the Capital Stock of Kraton Polymers
Holdings BV, a company organized under the laws of the Netherlands
(“ KP Holdings BV ”), and (iii) cause New
Holding Dutch CV and Kraton Polymers U.S. LLC to enter into a
qualified cost sharing agreement substantially in principle in the
form attached hereto as Annex I (the actions described in
clause (i) through (iii ) above are collectively referred to
herein as the “ Restructuring ”);
WHEREAS , Company, the
Guarantors, the Requisite Lenders and Agent have agreed to amend
and waive certain provisions of the Credit Agreement, in each case,
as provided herein.
NOW, THEREFORE , in
consideration of the premises made hereunder, and for good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
Section 1. Definitions .
Unless otherwise expressly defined herein, all capitalized terms
used herein and defined in the Credit Agreement shall be used
herein as so defined.
Section 2. Amendment to
Section 1.1 . Section 1.1 of the Credit Agreement is
hereby amended as follows:
(a) The definitions of each of
the following new terms shall be inserted in alphabetical order and
shall read in their entirety as follows:
“ Cost Sharing
Agreement ” means that certain qualified cost sharing
agreement to be entered into between New Holding Dutch CV and
Kraton Polymers U.S. LLC substantially in the form of Exhibit
P.
“ Fifth Amendment Effective
Date ” means December 15, 2006.
“ KP Holdings BV
” means Kraton Polymers Holdings BV, a company organized
under the laws of the Netherlands, 100% of the Capital Stock of
which is (a) immediately prior the Restructuring, owned by
Company and (b) immediately after the Restructuring, owned for
the account of New Holding Dutch CV.
“ New Holding Dutch CV
” means a limited partnership organized under the laws of the
Netherlands of which Company will own, directly and/or indirectly
through one or more of its wholly-owned Domestic Subsidiaries all
of the outstanding Capital Stock.
“ Restructuring ”
means (i) the formation by Company, through two or more of its
wholly-owned Domestic Subsidiaries, of New Holding Dutch CV,
(ii) the contribution by Company to the undivided community of
property ( onverdeelde goederenrechtelijke gemeenschap )
created pursuant to the formation documents for New Holding Dutch
CV of 100% of the Capital Stock of KP Holdings BV and
(iii) the execution of the Cost Sharing Agreement by the
parties thereto.
Section 3. Amendment to
Section 6.9 . (i) Clause (f) of Section 6.9
of the Credit Agreement is hereby amended by deleting the word
“and” at the end of such provision and (ii) clause
(g) of Section 6.9 of the Credit Agreement is hereby
amended by deleting the period at the end of such provision and
inserting the following: “; and (h) the Restructuring,
including the transactions contemplated by, or incidental to, the
Cost Sharing Agreement.”
Section 4. Amendment to
Section 6.12 . (i) Clause (g) of
Section 6.12 of the Credit Agreement is hereby amended by
deleting the word “and” at the end of such provision
and (ii) clause (h) of Section 6.12 of the Credit
Agreement is hereby amended by deleting the period at the end of
such provision and inserting the following: “; and
(i) any transaction necessary to effect the Restructuring,
including the transactions contemplated by, or incidental to, the
Cost Sharing Agreement as in effect on the Fifth Amendment
Effective Date.”
Section 5. Amendment to
Section 6.15 . Clause (a) of Section 6.15 of the
Credit Agreement is hereby amended by inserting the words “or
the Cost Sharing Agreement after the Fifth Amendment Effective Date
(except for any amendment, restatement, supplement or other
modification to, or waiver that does not adversely affect the
interests of the Lenders in any material respect)” after the
words “Fourth Amendment Effective Date” in the fourth
line thereof.
Section 6. Amendment to
Article V . Article V of the Credit Agreement is
hereby amended by adding a new Section 5.13 as follows:
“ 5.13. Pledge of Shares of
New Holding Dutch CV. On or prior to a date that is
90 days after the Fifth Amendment Effective Date (or such
extended period of up to 60 days as agreed to by the
Administrative Agent in its reasonable discretion), Company shall
(i) take all actions and execute and deliver all such
documents, instruments, agreements and certificates necessary to
grant to (and, to the extent relevant under applicable law, to
perfect) a First Priority Lien in favor of, Collateral Agent, for
the benefit of Secured Parties, under a deed of pledge governed by
the laws of the Netherlands in form and substance reasonably
satisfactory to Collateral Agent, in the Capital Stock of New
Holding Dutch CV, in the form of a right of pledge (
pandrecht ) over 65% of each financial claim from each
holder of Capital Stock of New Holding Dutch CV under the formation
documents for New Holding Dutch CV and against all other holders of
Capital Stock of New Holding Dutch CV, including but not limited to
entitlements in the undivided community of property (
onverdeelde goederenrechtelijke gemeenschap ) of the New
Holding Dutch CV, including but not limited to its right to any
(i) payments of profits, (ii) distribution of reserves,
(iii) liquidation proceeds, and (iv) any other payments or
distributions, whether present or future, whether actual or
contingent , to the extent
permitted by applicable law.”
Section 7. Consent to the
Restructuring . Pursuant to 10.05(a) of the Credit Agreement,
upon the effectiveness of this Amendment in accordance with
Section 7 below, the Lenders hereby (i) consent to the
Restructuring and (ii) in connection with the Restructuring,
consent to the release, cancellation and termination of the pledge
of the Capital Stock of KP Holdings BV made by Company in favor of
the Collateral Agent for the benefit of the Secured Parties, which
the parties hereto agree shall be so released, cancelled and
terminated upon the effectiveness of this Amendment.
Section 8. Conditions
Precedent . This Amendment shall become effective upon
satisfaction of each of the following conditions precedent:
(a) Agent shall have received
all of the following, in form and substance satisfactory to
Agent:
(i) Amendment Documents
. This Amendment and each other instrument, document or certificate
required by Agent, duly executed and delivered by Company, the
Guarantors, the Requisite Lenders and any other Person in
connection with this Amendment;
(ii) Cost Sharing
Agreement . The Agent shall have received a fully executed or
conformed copy of the Cost Sharing Agreement; the Cost Sharing
Agreement shall be in full force and effect, shall include terms
and provisions reasonably satisfactory to Agent and no provision
thereof shall have been modified or waived in any respect
determined by Agent to be material without the consent of Agent;
and
(ii) Additional
Information. Such additional documents, instruments and
information as Agent may reasonably request to effect the
transactions contemplated hereby.
(b) After giving effect to this
Amendment, the representations and warranties contained herein and
in the Credit Documents shall be true and correct in all material
respects as of the date hereof as if made on the date hereof
(except for those which by their terms specifically refer to an
earlier date, in which case such representations and warranties
shall have been true and correct in all material respects as of
such earlier date).
(c) All corporate proceedings
taken in connection with the execution and delivery of this
Amendment and all other agreements, documents and instruments
executed and/or delivered pursuant thereto, and all legal matters
incident thereto, shall be reasonably satisfactory to Agent.
(d) No Default or Event of
Default shall have occurred and be continuing after giving effect
to this Amendment.
Section 9. Representations
and Warranties . Company hereby represents and warrants to
Agent and the Lenders that, as of the date hereof and after giving
effect to this Amendment, (a) all representations and warranties
set forth in the Credit Agreement and in any other Credit Document
are true and correct in all material respects as if made again on
and as of such date (except those, if any, which by their terms
specifically relate only to an earlier date, in which case such
representations and warranties shall have been true and correct in
all material respects as of such earlier date), (b) no Default
or Event of Default has occurred and is continuing, and
(c) the Credit Agreement (as amended by this Amendment), and
all other Credit Documents are and remain legal, valid, binding and
enforceable obligations of the Credit Parties in accordance with
the terms thereof except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors’ rights generally or by equitable
principles (regardless of whether enforcement is sought in equity
or at law).
Section 10. Survival of
Representations and Warranties . All representations and
warranties made in this Amendment or any other Credit Document
shall survive the execution and delivery of this Amendment, and no
investigation by Agent or the Lenders shall affect the
representations and warranties or the right of Agent and the
Lenders to rely upon them. If any representation or warranty made
in this Amendment is false in any material respect as of the date
made or deemed made, then such shall constitute an Event of Default
under the Credit Agreement.
Section 11. Reference to
Agreement . Each of the Credit Documents, including the Credit
Agreement, and any and all other agreements, documents or
instruments now or hereafter executed and/or delivered pursuant to
the terms hereof or pursuant to the terms of the Credit Agreement
as amended hereby, are hereby amended so that any reference in such
Credit Documents to the Credit Agreement, whether direct or
indirect, shall mean a reference to the Credit Agreement as amended
hereby. This Amendment shall constitute a Credit Document under the
Credit Agreement.
Section 12. Costs and
Expenses . Company shall pay on demand all reasonable,
documented, out-of-pocket costs and expenses of Agent and the Lead
Arrangers (including the reasonable fees, costs and expenses of
counsel to Agent) incurred in connection with the preparation,
execution and delivery of this Amendment.
Section 13. Governing
Law . THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
Section 14. Execution .
This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a
manually executed counterpart of this Amendment. This Amendment
shall be binding upon each signatory hereto, its successors and
assigns.
Section 15. Certain
Waivers . Each of Company and each Guarantor hereby agrees that
neither Agent nor any Lender shall be liable under a claim of, and
hereby waives any claim against Agent and the Lenders based on,
lender liability (including, but not limited to, liability for
breach of the implied covenant of good faith and fair dealing,
fraud, negligence, conversion, misrepresentation, duress, control
and interference, infliction of emotional distress and defamation
and breach of fiduciary duties) as a result of the consents and
amendments contained in Sections 2 through 5 above and any
discussions or actions taken or not taken by Agent or the Lenders
on or before the date hereof or the discussions conducted in
connection therewith, or any course of action taken by Agent or any
Lender in response thereto or arising therefrom; provided ,
that the foregoing waiver shall not include the waiver of any
claims which are based on the gross negligence or willful
misconduct of Agent or any Lender or any of their respective
agents. This Section 15 shall survive the execution and
delivery of this Amendment and the other Credit Documents and the
termination of the Credit Agreement.
Section 16. Limited
Effect . This Amendment relates only to the specific matters
expressly covered herein, shall not be considered to be a waiver of
any rights or remedies any Lender may have under the Credit
Agreement or under any other Credit Document, and shall not be
considered to create a course of dealing or to otherwise obligate
in any respect any Lender to execute similar or other amendments or
grant any waivers under the same or similar or other
circumstanc
