5 Year Revolving Credit Agreement

EXECUTION COPY


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5-YEAR REVOLVING
CREDIT AGREEMENT


Dated as of February 9, 2000


among


CORDANT TECHNOLOGIES INC.


THE INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO AS LENDERS,


BANK ONE, NA,
as Administrative Agent


ABN AMRO BANK N.V.,
as Syndication Agent


and


BANK OF AMERICA, N.A.
and
WACHOVIA BANK, N.A.,
as Co-Documentation Agents


BANC ONE CAPITAL MARKETS, INC.,
as Lead Arranger and Sole Book Manager
and
ABN AMRO BANK N.V.,
BANK OF AMERICA, N.A.
and
WACHOVIA BANK, N.A.
as Co-Arrangers


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SIDLEY & AUSTIN
Bank One Plaza
10 South Dearborn Street
Chicago, Illinois 60603


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TABLE OF CONTENTS


ARTICLE I: DEFINITIONS...................................................1


ARTICLE II: THE CREDITS.................................................18
2.1. COMMITMENT....................................................18
2.2. SWING LINE LOANS..............................................18
2.3. REQUIRED PAYMENTS; TERMINATION................................20
2.4. RATABLE LOANS.................................................20
2.5. TYPES OF ADVANCES.............................................20
2.6. FACILITY FEE; REDUCTIONS IN AGGREGATE COMMITMENT..............20
2.7. UTILIZATION FEE...............................................21
2.8. MINIMUM AMOUNT OF EACH ADVANCE................................21
2.9. OPTIONAL PRINCIPAL PAYMENTS...................................21
2.10. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW
ADVANCES.....................................................21
2.11. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES..........22
2.12. CHANGES IN INTEREST RATE, ETC................................22
2.13. RATES APPLICABLE AFTER DEFAULT...............................23
2.14. METHOD OF PAYMENT............................................23
2.15. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS.................24
2.16. TELEPHONIC NOTICES...........................................24
2.17. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS...............24
2.18. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND
COMMITMENT REDUCTION.........................................25
2.19. LENDING INSTALLATIONS........................................25
2.20. NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.............25
2.21. REPLACEMENT OF CERTAIN LENDERS...............................26


ARTICLE III: THE LETTER OF CREDIT FACILITY..............................26
3.1. OBLIGATION TO ISSUE...........................................26
3.2. TYPES AND AMOUNTS.............................................27
3.3. CONDITIONS....................................................27
3.4. PROCEDURE FOR ISSUANCE OF FACILITY LCS........................28
3.5. FACILITY LC PARTICIPATION.....................................28
3.6. REIMBURSEMENT OBLIGATION......................................29
3.7. CASH COLLATERAL...............................................29
3.8. FACILITY LC FEES..............................................29
3.9. LC ISSUER REPORTING REQUIREMENTS..............................30
3.10. INDEMNIFICATION; EXONERATION.................................30


ARTICLE IV: YIELD PROTECTION; TAXES.....................................31
4.1. YIELD PROTECTION..............................................31


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4.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS.......................32
4.3. AVAILABILITY OF TYPES OF ADVANCES.............................33
4.4. FUNDING INDEMNIFICATION.......................................33
4.5. TAXES.........................................................33
4.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY......................34


ARTICLE V: CONDITIONS PRECEDENT.........................................35
5.1. INITIAL CREDIT EXTENSIONS.....................................35
5.2. EACH CREDIT EXTENSION.........................................36


ARTICLE VI: REPRESENTATIONS AND WARRANTIES..............................37
6.1. EXISTENCE AND STANDING........................................37
6.2. AUTHORIZATION AND VALIDITY....................................37
6.3. NO CONFLICT; GOVERNMENT CONSENT...............................38
6.4. FINANCIAL STATEMENTS..........................................39
6.5. MATERIAL ADVERSE CHANGE.......................................39
6.6. TAXES.........................................................39
6.7. LITIGATION AND CONTINGENT OBLIGATIONS.........................39
6.8. SUBSIDIARIES..................................................39
6.9. ERISA; FOREIGN PENSION PLAN MATTERS...........................40
6.10. ACCURACY OF INFORMATION......................................40
6.11. SECURITIES ACTIVITIES........................................40
6.12. MATERIAL AGREEMENTS..........................................40
6.13. COMPLIANCE WITH LAWS.........................................40
6.14. OWNERSHIP OF PROPERTIES......................................41
6.15. PLAN ASSETS; PROHIBITED TRANSACTIONS.........................41
6.16. ENVIRONMENTAL MATTERS........................................41
6.17. INVESTMENT COMPANY ACT.......................................41
6.18. PUBLIC UTILITY HOLDING COMPANY ACT...........................41


ARTICLE VII: COVENANTS..................................................41
7.1. FINANCIAL REPORTING...........................................41
7.2. USE OF PROCEEDS...............................................43
7.3. NOTICE OF DEFAULT.............................................44
7.4. CONDUCT OF BUSINESS...........................................44
7.5. TAXES.........................................................44
7.6. INSURANCE.....................................................44
7.7. COMPLIANCE WITH LAWS..........................................45
7.8. MAINTENANCE OF PROPERTIES.....................................45
7.9. INSPECTION....................................................45
7.10. SUBSIDIARY INDEBTEDNESS......................................45
7.11 MERGER........................................................46
7.12. SALE OF ASSETS...............................................46


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7.13. INVESTMENTS AND ACQUISITIONS; NEW SUBSIDIARIES;
DOCUMENTATION BY HOWMET COMPANIES............................47
7.14. LIENS........................................................49
7.15. AFFILIATES...................................................52
7.16. FINANCIAL CONTRACTS..........................................52
7.17. NON-GUARANTOR OR PLEDGED SUBSIDIARIES........................52
7.18. FINANCIAL COVENANTS..........................................52
7.19. SUBSIDIARY COVENANTS.........................................53


ARTICLE VIII: DEFAULTS..................................................53


ARTICLE IX: ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES...............56
9.1. ACCELERATION..................................................56
9.2. AMENDMENTS....................................................56
9.3. PRESERVATION OF RIGHTS........................................57


ARTICLE X: GENERAL PROVISIONS...........................................58
10.1. SURVIVAL OF REPRESENTATIONS..................................58
10.2. GOVERNMENTAL REGULATION......................................58
10.3. HEADINGS.....................................................58
10.4. ENTIRE AGREEMENT.............................................58
10.5. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT..............58
10.6. EXPENSES; INDEMNIFICATION....................................58
10.7. NUMBERS OF DOCUMENTS.........................................59
10.8. ACCOUNTING...................................................60
10.9. SEVERABILITY OF PROVISIONS...................................60
10.10. NONLIABILITY OF LENDERS.....................................60
10.11. CONFIDENTIALITY.............................................61
10.12. NONRELIANCE.................................................61
10.13. SUBORDINATION OF INTERCOMPANY INDEBTEDNESS..................61


ARTICLE XI: THE ADMINISTRATIVE AGENT....................................62
11.1. APPOINTMENT; NATURE OF RELATIONSHIP..........................62
11.2. POWERS.......................................................63
11.3. GENERAL IMMUNITY.............................................63
11.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC...................63
11.5. ACTION ON INSTRUCTIONS OF LENDERS............................63
11.6. EMPLOYMENT OF ADMINISTRATIVE AGENTS AND COUNSEL..............64
11.7. RELIANCE ON DOCUMENTS; COUNSEL...............................64
11.8. ADMINISTRATIVE AGENT'S REIMBURSEMENT AND INDEMNIFICATION.....64
11.9. NOTICE OF DEFAULT............................................64
11.10. RIGHTS AS A LENDER..........................................65
11.11. LENDER CREDIT DECISION......................................65
11.12. SUCCESSOR ADMINISTRATIVE AGENT..............................65


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11.13. AGENTS' AND ARRANGERS' FEES.................................66
11.14. DELEGATION TO AFFILIATES....................................66
11.15. EXECUTION OF COLLATERAL DOCUMENTS...........................66
11.16. COLLATERAL AND GUARANTY RELEASES............................66


ARTICLE XII: SETOFF; RATABLE PAYMENTS...................................67
12.1. SETOFF.......................................................67
12.2. RATABLE PAYMENTS.............................................67


ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.........67
13.1. SUCCESSORS AND ASSIGNS.......................................67
13.2. PARTICIPATIONS...............................................68
13.3. ASSIGNMENTS..................................................69
13.4. DISSEMINATION OF INFORMATION.................................70
13.5. TAX TREATMENT................................................70


ARTICLE XIV: NOTICES....................................................70
14.1. NOTICES......................................................70
14.2. CHANGE OF ADDRESS............................................71


ARTICLE XV: COUNTERPARTS................................................71


ARTICLE XVI: CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY
TRIAL......................................................71
16.1. CHOICE OF LAW................................................71
16.2. CONSENT TO JURISDICTION......................................71
16.3. WAIVER OF JURY TRIAL.........................................72


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SCHEDULES AND EXHIBITS


PRICING SCHEDULE


COMMITMENT SCHEDULE


SCHEDULE 1 Litigation and Contingent Obligations


SCHEDULE 2 Subsidiaries


SCHEDULE 3 Indebtedness and Liens


SCHEDULE 4 Investments


SCHEDULE 5 Transactions with Affiliates


EXHIBIT A Form of Note


EXHIBIT B Form of Pledge Agreement


EXHIBIT C Form of Subsidiary Guaranty


EXHIBIT D Form of Assignment Agreement


EXHIBIT E Money Transfer Instructions


EXHIBIT F Form of Compliance Certificate


EXHIBIT G Form of Swing Line Note


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5-YEAR REVOLVING CREDIT AGREEMENT


This 5-Year Revolving Credit Agreement, dated as of February 9, 2000, is among CORDANT TECHNOLOGIES INC., a Delaware corporation, the Lenders, BANK ONE, NA, having its principal office in Chicago, Illinois, as an LC Issuer, the Swing Line Lender and the Administrative Agent, ABN AMRO BANK N.V., as Syndication Agent and BANK OF AMERICA, N.A. AND WACHOVIA BANK, N.A., as Co-Documentation Agents. The parties hereto agree as follows:


ARTICLE I: DEFINITIONS


As used in this Agreement:


"ACCOUNTING CHANGE" is defined in SECTION 10.8 hereof.


"ACQUISITION" means any transaction, or any series of related transactions, consummated on or after the date of this Agreement, by which the Borrower or any of its Subsidiaries (i) acquires any going business concern or all or substantially all of the assets of any firm, corporation or limited liability company, or division thereof, whether through purchase of assets, merger or otherwise or (ii) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the securities of a corporation which have ordinary voting power for the election of directors (other than securities having such power only by reason of the happening of a contingency) or a majority (by percentage or voting power) of the outstanding ownership interests of a partnership or limited liability company.


"ADMINISTRATIVE AGENT" means Bank One, NA, in its capacity as contractual representative of the Lenders pursuant to ARTICLE XI, and not in its individual capacity as a Lender, and any successor Administrative Agent appointed pursuant to ARTICLE XI.


"ADVANCE" means a borrowing hereunder (or conversion or continuation thereof) consisting of the aggregate amount of the several Syndicated Loans made on the same Borrowing Date (or date of conversion or continuation) by the Lenders to the Borrower of the same Type and, in the case of Eurodollar Advances, for the same Interest Period.


"AFFILIATE" of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. A Person shall be deemed to control another Person if the controlling Person owns 10% or more of any class of voting securities (or other ownership interests) of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of stock, by contract or otherwise.


"AGENTS" means the Administrative Agent, the Syndication Agent and the Co-Documentation Agents.


"AGGREGATE COMMITMENT" means the aggregate of the Commitments of all the Lenders, as reduced from time to time pursuant to the terms hereof. The initial Aggregate Commitment is Six Hundred Million and 00/100 Dollars ($600,000,000).


"AGGREGATE OUTSTANDING LC EXPOSURE" means, as of any day, the aggregate of the Outstanding LC Exposure of all the Lenders.


"AGGREGATE OUTSTANDING CREDIT EXPOSURE" means, as of any day, the aggregate of the Outstanding Credit Exposure of all the Lenders.


"AGREEMENT" means this 5-Year Revolving Credit Agreement, as it may be amended, modified, supplemented or restated and in effect from time to time.


"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting principles as in effect in the United States from time to time, applied in a manner consistent with that used in preparing the financial statements of the Borrower referred to in SECTION 6.4 hereof, PROVIDED, HOWEVER, except as provided in SECTION 10.8, with respect to the calculation of financial ratios and other financial tests required by this Agreement, "Agreement Accounting Principles" means generally accepted accounting principles as in effect in the United States as of the date of this Agreement, applied in a manner consistent with that used in preparing the financial statements of the Borrower referred to in SECTION 6.4 hereof.


"ALTERNATE BASE RATE" means, for any day, a rate of interest per annum equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the Federal Funds Effective Rate for such day plus 1/2% per annum.


"ANNUAL AUDITED FINANCIAL STATEMENTS" is defined in SECTION 7.1(I)(A).


"APPLICABLE FACILITY FEE RATE" means, at any time, the percentage rate per annum at which Facility Fees are accruing on the Aggregate Commitment (without regard to usage) at such time as set forth in the Pricing Schedule.


"APPLICABLE LC FEE PERCENTAGE" means, at any time, the percentage rate per annum equal to the Applicable Margin with respect to Eurodollar Advances in effect on such date as set forth in the Pricing Schedule.


"APPLICABLE MARGIN" means, with respect to Advances of any Type at any time, the percentage rate per annum which is applicable at such time with respect to Advances of such Type as set forth in the Pricing Schedule.


"ARRANGERS" means Banc One Capital Markets, Inc., as lead arranger and sole book manager and ABN AMRO Bank N.V., Bank of America, N.A. and Wachovia Bank, N.A., as co-arranger, and their successors.


"ARTICLE" means an article of this Agreement unless another document is specifically referenced.


"AUTHORIZED OFFICER" means any of the President, the Chief Financial Officer or the Treasurer of the Borrower, acting singly.


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"AVAILABLE AGGREGATE COMMITMENT" means, for any day, the Aggregate Commitment then in effect MINUS the sum of (i) the aggregate outstanding principal amount of the Advances; (ii) the aggregate outstanding principal amount of the Swing Line Loans; and (iii) the Aggregate Outstanding LC Exposure.


"BANK ONE" means Bank One, NA, in its individual capacity, and its successors.


"BORROWER" means Cordant Technologies Inc., a Delaware corporation, and its successors and assigns.


"BORROWING DATE" means a date on which an Advance or Swing Line Loan is made hereunder.


"BORROWING NOTICE" is defined in SECTION 2.10.


"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on which banks generally are open in Chicago and New York for the conduct of substantially all of their commercial lending activities and on which dealings in United States dollars are carried on in the London interbank market and (ii) for all other purposes, a day (other than a Saturday or Sunday) on which banks generally are open in Chicago for the conduct of substantially all of their commercial lending activities.


"CAPITALIZED LEASE" of a Person means any lease of Property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles, consistently applied.


"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with Agreement Accounting Principles, consistently applied.


"CASH EQUIVALENT INVESTMENTS" means, as to any Person, (i) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (PROVIDED that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than one year from the date of acquisition, (ii) time deposits and certificates of deposit of any investment grade commercial bank having, or which is the principal banking subsidiary of an investment grade bank holding company organized under the laws of the United States, any State thereof, the District of Columbia or any foreign jurisdiction having capital, surplus and undivided profits aggregating in excess of $500,000,000, with maturities of not more than one year from the date of acquisition by such Person, (iii) repurchase obligations with a term of not more than 90 days for underlying securities of the types described in clause (i) above entered into with any bank meeting the qualifications specified in clause (ii) above, provided that such repurchase obligations are secured by a first priority security interest in such underlying securities which have, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase obligations, (iv) commercial paper issued by any Person incorporated in the United States rated at least A-1 or the equivalent thereof by S&P or at least
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P-1 or the equivalent thereof by Moody's and in each case maturing not more than one year after the date of acquisition by such Person, (v) investments in money market funds substantially all of the assets of which are comprised of securities of the types described in clauses (i) through (iv) above and (vi) demand deposit accounts maintained in the ordinary course of business.


"CHANGE" is defined in SECTION 4.2.


"CHANGE IN CONTROL" means:


(i) any "person" or "group" (as such terms are used in SECTIONS 13(D) and 14(D) of the Securities Exchange Act of 1934), is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person shall be deemed to have "beneficial ownership" of all securities that such person has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of thirty percent (30.0%) or more of the combined voting power of the Borrower's capital stock ordinarily having the right to vote at an election of directors;


(ii) during any period of twelve consecutive calendar months, individuals (a) who were directors of the Borrower on the first day of such period, or (b) whose election or nomination for election to the board of directors of the Borrower was recommended or approved by at least a majority of the directors then still in office who were directors of the Borrower on the first day of such period, or whose election or nomination for election was so approved, shall cease to constitute a majority of the board of directors of the Borrower;


(iii) any "Change of Control" (or similar definition) under and as defined in any credit agreement, note, indenture or similar agreement or instrument where the principal amount outstanding aggregates at least $20,000,000 shall occur provided the effect of such "Change of Control" thereunder is to cause, or to permit the holder or holders of such Indebtedness to cause, such Indebtedness or any part thereof to become due prior to its stated maturity, to cause or permit the holder or holders thereof to require such Indebtedness to be prepaid or repurchased or a sinking fund established therefor or any such Indebtedness shall as a result thereof be declared to be due and payable or required to be prepaid or repurchased or a sinking fund established therefor prior to the stated maturity thereof.


"CLOSING DATE" means the date on which the initial Loans are advanced hereunder.


"CODE" means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time.


"COLLATERAL DOCUMENTS" means, collectively, each of the Pledge Agreements, together with the documents, instruments and agreements executed in connection therewith.


4


"COMBINED COMMITMENT" means the sum of (1) the Aggregate Commitment hereunder and (2) the "Aggregate Commitment" under and as defined in the 364-Day Credit Agreement.


"COMBINED UTILIZED AMOUNT" means the sum of (1) the aggregate principal amount of all Loans and LC Obligations hereunder and (2) the aggregate principal amount of all "Loans" under and as defined in the 364-Day Credit Agreement.


"COMMITMENT" means, for each Lender, the obligation of such Lender to make Syndicated Loans and participate in Facility LCs and Swing Line Loans in the aggregate not exceeding the amount set forth opposite its name on the Commitment Schedule attached hereto and made a part hereof or as set forth in any Notice of Assignment relating to any assignment that has become effective pursuant to SECTION 13.3.2, as such amount may be modified from time to time pursuant to the terms hereof.


"CONSOLIDATED ADJUSTED EBITDA" means, for any period, Consolidated EBIT plus, to the extent deducted from revenues in determining Consolidated Net Income, all amortization of intangibles and depreciation, all calculated for the Borrower and its Consolidated Subsidiaries on a consolidated basis in accordance with Agreement Accounting Principles, consistently applied, adjusted with respect to permitted Acquisitions, on a pro forma basis, using unadjusted historical financial statements with respect to the business acquired.


"CONSOLIDATED EBIT" means, for any period, Consolidated Net Income PLUS, to the extent deducted from revenues in determining Consolidated Net Income, (i) Consolidated Interest Expense and (ii) expense for income taxes paid or accrued, all calculated for the Borrower and its Consolidated Subsidiaries on a consolidated basis in accordance with Agreement Accounting Principles, consistently applied.


"CONSOLIDATED INTEREST EXPENSE" means, with ref ...