MARGIN RATCHET Clause Samples

MARGIN RATCHET. 7.6.1 If EBITDA to Cash Outflow exceeds a ratio of 1.00:1 for the Financial Quarter ending 31 December 2003, the Applicable Margin shall, with effect from 1st February 2004, be reduced to two and one quarter of one per cent (2.25%) per annum. In addition, the Agent and the Lenders agree with the Borrowers that the level of the Applicable Margin will be reviewed by the Agent on the date upon which the Agent receives all of the signed, audited, consolidated Financial Statements of every IHL Group Company for the Financial Year ended 31 December 2004, required to be delivered pursuant to clause 15.1 (such date being, the "REVIEW DATE"). Each Borrower acknowledges and agrees that notwithstanding any extension(s) of the Termination Date which may be agreed to pursuant to clause 9.5, the Agent will not review the Applicable Margin and the Applicable Margin may not be reduced on more than one occasion. The Agent and the Lenders agree with Ideal and each other Borrower that, provided that the conditions set out in clause 7.6.2 are satisfied on the Review Date, the Applicable Margin shall be adjusted in accordance with this clause 7.6 with effect from the date determined in accordance with clause 7.6.5. 7.6.2 If on the Review Date, the Agent's review of the financial performance of the IHL Group during the immediately preceding Financial Year indicates that actual EBITDA achieved in such Financial Year exceeded the projected EBITDA for such Financial Year (as set out in the projections delivered to the Agent prior to the Effective Date) by an amount equal to or greater than twenty per cent. (20%) of such projected EBITDA, then the Applicable Margin shall be reduced by 0.125 per cent per annum.

MARGIN RATCHET. (a) The “Base Margin” will be based upon the Existing Bonds’ credit rating and calculated in accordance with Clauses 8.3(b) and (c) (Margin Ratchet). (b) The Base Margin will, on each date on which a credit rating is assigned to the Existing Bonds by either M▇▇▇▇’▇ or Standard & Poor’s after the date of this Agreement, be equal to the percentage rate specified in the table below and set opposite the relevant credit rating assigned to the Existing Bonds at that time. BB- or higher Ba3 or higher 4.25 B+ B1 5.25 B B2 5.75 B- or lower B3 or lower 6.25 (c) If at any time there is a difference in the long term credit rating assigned to the Borrower by each of M▇▇▇▇’▇ and Standard & Poor’s (or only one such agency assigns a credit rating to the Existing Bonds) the Margin will be determined on the basis of the lower (or the only) such rating unless, in the case of a difference in ratings, such ratings are more than one notch apart in which case the Margin will be determined on the basis of the rating which is one notch above the lower of those ratings. (d) If at any time neither M▇▇▇▇’▇ nor Standard & Poor’s assigns a credit rating to the Existing Bonds the Base Margin will, in the absence of agreement to the contrary pursuant to paragraph (h) below, be six point two five per cent. (6.25%) per annum. (e) Any adjustment to the Base Margin (whether upwards or downwards) in accordance with paragraphs (b), (c) or (d) above will apply for each Loan with effect from: (i) the date of announcement of any relevant change to the credit rating assigned to the Existing Bonds in the case of a rating downgrade; (ii) the date of published confirmation of any relevant change to the credit rating assigned to the Existing Bonds in the case of a rating upgrade; and/or (iii) the date on which a credit rating ceases to be assigned to the Existing Bonds by either M▇▇▇▇’▇ or Standard & Poor’s. (f) Promptly upon the directors of the Borrower becoming aware of the same the Borrower shall inform the Agent in writing if any change in the credit rating assigned by either M▇▇▇▇’▇ or Standard & Poor’s to the Existing Bonds are published, confirmed or announced or if a credit rating ceases to be assigned to the Existing Bonds by either M▇▇▇▇’▇ or Standard & Poor’s. (g) The Borrower will use its reasonable endeavours to ensure that both M▇▇▇▇’▇ and Standard & Poor’s assign a credit rating to the Existing Bonds. (h) If save as a result of a neglect or breach of this Agreement by the Borrower neit...

MARGIN RATCHET. (a) If at any time, the then current Compliance Certificate (and the financial statements with which it is required by this Agreement to be delivered) received by the Facility Agent discloses that the ratio (the “Ratio”) of Consolidated Net Financial Indebtedness to Consolidated EBITDA for the Measurement Period to which that Compliance Certificate relates is within the ranges set out in the table below the Margin in respect of any outstanding Utilisation shall be adjusted (upwards or downwards) from the date on which the relevant Compliance Certificate has been received by the Facility Agent to the level set opposite the applicable Ratio in the table: Greater than or equal to 2.25:1 2.25 Less than 2.25:1 but greater than or equal to 1.50:1 2.00 Less than 1.50:1 1.75 Upon delivery of the next set of Quarterly Consolidated Accounts, the margin shall revert to its original level or such other level as is determined in accordance with this Clause 13.4. (b) If the Obligors' Agent fails to deliver any Quarterly Consolidated Accounts by the latest date provided for in Clause 22.2(a)(i), (ii) or (iii) (Financial Information) the Margin applicable to the Utilisations shall be the highest Margin in relation thereto appearing in the above table until such Quarterly Consolidated Accounts (and any related certificate) are delivered to the Facility Agent. (c) Upon the occurrence of an Event of Default and the Facility Agent giving notice to the Obligors' Agent under this Clause 13.4(c), the Margin applicable to the Utilisations shall be the highest Margin in relation thereto appearing in the above table until such time as no Event of Default is continuing, whereupon the Margin shall be determined in accordance with the provisions set out in this Clause 13.4 on the basis of the most recently delivered Quarterly Consolidated Accounts.

MARGIN RATCHET. The initial Margin is the percentage rate per annum specified as such in the Reference Rate Terms.

MARGIN RATCHET. 7.6.1 On the first business day of each Management Accounting Period, the Agent shall calculate the average daily Available Revolving Facility Amount during the previous Management Accounting Period. Subject to the provisions of this Clause 7.6, if the average daily Available Revolving Facility Amount during the previous Management Accounting Period was within a range set out below then the Applicable Margin for that Management Accounting Period will (subject to any adjustment pursuant to Clause 7.6.3 below) be deemed to have been the percentage per annum set out below in the column opposite that range: AVERAGE DAILY AVAILABLE REVOLVING FACILITY AMOUNT APPLICABLE MARGIN (%) PER ANNUM --------------------------------- ------------------------------- Less than L10,000,000 2.00 Equal to or greater than L10,000,000 but less than L15,000,000 1.75 Equal to or greater than L15,000,000 1.50 7.6.2 Any increase or decrease (as applicable) in the Applicable Margin as a result of the operation of Clauses 7.6.1 shall be deemed to have taken effect on the first business day of the previous Management Accounting Period.

MARGIN RATCHET. 11.3.1 Subject to sub-clauses 11.

MARGIN RATCHET. (a) Subject to paragraph (b) below and Clause 12.4 (Default Margin), if the ratio of Consolidated Total Net Debt to Consolidated Adjusted EBITDA in respect of the most recent Relevant Period (as defined in Clause 24 (Financial Covenants)) falls within one of the ranges set out in column 1 of the margin grid table set out below then the Margin in respect of Facility A1, Facility A2 and the Revolving Facility shall be the percentage per annum set opposite the range into which that Relevant Ratio falls. Column 1 Column 2 Relevant Ratio Margin % per annum for Facility A1, A2 and Revolving Facility (b) From the date falling 12 months after the Closing Date any revised Margin provided for in this Clause 12.3 in relation to each Loan will become effective on the date on which the relevant Compliance Certificate is delivered to the Facility Agent. (c) If the annual audited financial statements of the Group and related Compliance Certificate received by the Facility Agent show that a Margin or Commitment Fee reduction should not have occurred during a certain period, the relevant Borrowers shall promptly pay to the Facility Agent any amounts necessary to put the Facility Agent and the Lenders in the position they would have been in had the Margin or Commitment Fee reduction not occurred. (d) If the annual audited financial statements of the Group and related Compliance Certificate received by the Facility Agent show that a Margin or Commitment Fee reduction should have occurred during a certain period the Margin or Commitment Fee for future Interest Periods, shall be reduced by any amounts necessary to put the relevant Borrower in the position they would have been in had the Margin and Commitment Fee reduction occurred.

MARGIN RATCHET. (a) The initial Margin is the percentage rate per annum specified as such in the Reference Rate Terms. (b) The Margin shall subsequently be determined by reference to Group Leverage for each Relevant Period as shown in the Compliance Certificate for that Relevant Period delivered to the Agent pursuant to Clause 23.4 (Provision and contents of Compliance Certificates), and in the manner set out below in this Clause 12.3. (c) Subject to paragraphs (d) to (f) below, the Margin will be the percentage rate per annum set out below opposite the applicable range for Group Leverage for the Relevant Period: Group Leverage Margin % p.a. Greater than or equal to 3.0: 1 6.5 % Less than 3.0: 1 but greater than or equal to 2.5: 1 6.0 % Less than 2.5: 1 but greater than or equal to 1.5: 1 5.75 % Less than 1.5: 1 5.25 % (d) Any change in the Margin for a Loan shall take effect on the date (the reset date) which is the first day of the next Interest Period for that Loan following receipt by the Agent of the Compliance Certificate for the applicable Relevant Period pursuant to Clause 23.4 (Provision and contents of Compliance Certificate). (e) If, following receipt by the Agent of the Compliance Certificate related to the relevant Annual Financial Statements, that Compliance Certificate does not confirm the basis for a reduced Margin, then the provisions of paragraph (b) of Clause 12.2 (Payment of interest) shall apply and the Margin for each Loan during the period when such reduced Margin was applied shall be the percentage per annum determined using the table above and the revised Group Leverage calculated using the figures in that Compliance Certificate. (f) While an Event of Default is continuing, the Margin will be the highest percentage per annum set out above.

MARGIN RATCHET. 6.2.1 In respect of each Financial Year of Dynea beginning after 31 December 2001, the Margin in relation to the Term A Loan Facility and the Revolving Credit Facility shall reduce or increase in accordance with the other provisions of this Clause 6.2, PROVIDED THAT the Margin in relation to the Term A Loan Facility and the Revolving Credit Facility shall at no time be greater than 2.00 per cent. per annum or less than 1.25 per cent. per annum. 6.2.2 In this Clause 6.2, "RELEVANT FINANCIAL YEAR" means, in relation to a Financial Year of Dynea, the immediately preceding Financial Year of Dynea.