Exhibit 10.1
(euro)200,000,000
FACILITY AGREEMENT
dated 26 July 2006
for
SOLUTIA SERVICES INTERNATIONAL S.C.A./COMM. V.A.
arranged by
CITIGROUP GLOBAL MARKETS LIMITED
as Arranger
with
CITIBANK INTERNATIONAL PLC
acting as Agent
and
CITIBANK, N.A.
acting as Security Agent
LINKLATERS
Ref: SBL/CIXT/ALW
CONTENTS
CLAUSE PAGE
SECTION 1
INTERPRETATION
1. Definitions and interpretation..........................................1
SECTION 2
THE FACILITIES
2. The Facilities.........................................................28
3. Purpose................................................................29
4. Conditions of Utilisation..............................................29
SECTION 3
UTILISATION
5. Utilisation............................................................31
SECTION 4
REPAYMENT, PREPAYMENT AND CANCELLATION
6. Repayment..............................................................32
7. Prepayment and cancellation............................................32
SECTION 5
COSTS OF UTILISATION
8. Interest...............................................................40
9. Interest Periods.......................................................42
10. Changes to the calculation of interest.................................43
11. Fees...................................................................44
SECTION 6
ADDITIONAL PAYMENT OBLIGATIONS
12. Tax gross-up and indemnities...........................................45
13. Increased costs........................................................48
14. Other indemnities......................................................49
15. Mitigation by the Lenders..............................................50
16. Costs and expenses.....................................................51
SECTION 7
GUARANTEE AND SECURITY
17. Guarantee and indemnity................................................52
SECTION 8
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
18. Representations........................................................57
19. Information undertakings...............................................63
20. Financial covenants....................................................71
21. General undertakings...................................................77
22. Events of Default......................................................84
SECTION 9
CHANGES TO PARTIES
23. Changes to the Lenders.................................................89
24. Changes to the Obligors................................................93
26 Jul 2006 - i -
SECTION 10
THE FINANCE PARTIES
25. Role of the Agent and the Arranger.....................................95
26. Conduct of business by the Finance Parties............................100
27. Sharing among the Finance Parties.....................................100
SECTION 11
ADMINISTRATION
28. Payment mechanics.....................................................102
29. Set-off...............................................................104
30. Notices...............................................................104
31. Calculations and certificates.........................................106
32. Partial invalidity....................................................106
33. Remedies and waivers..................................................106
34. Amendments and waivers................................................107
35. Counterparts..........................................................108
SECTION 12
GOVERNING LAW AND ENFORCEMENT
36. Governing law.........................................................109
37. Enforcement...........................................................109
26 Jul 2006 - ii -
THIS AGREEMENT is dated 26 July 2006 and made between:
(1) SOLUTIA EUROPE SA/NV (the "COMPANY");
(2) SOLUTIA SERVICES INTERNATIONAL S.C.A./COMM V.A. (the "BORROWER");
(3) THE COMPANIES listed in Part I of Schedule 1 as original guarantors (the
"ORIGINAL GUARANTORS");
(4) CITIGROUP GLOBAL MARKETS LIMITED as mandated lead arranger (the
"ARRANGER");
(5) THE FINANCIAL INSTITUTIONS listed in Part II of Schedule 1 as lenders (the
"ORIGINAL LENDERS");
(6) CITIBANK INTERNATIONAL PLC as agent of the other Finance Parties (the
"AGENT"); and
(7) CITIBANK. N.A. as security agent for the Secured Parties (the "SECURITY
AGENT").
IT IS AGREED as follows:
SECTION 1
INTERPRETATION
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement:
"ACCESSION LETTER" means a document substantially in the form set out in
Schedule 6 (Form of Accession Letter).
"ACCOUNTANTS REPORT" means the report by PricewaterhouseCoopers in the
Agreed Form.
"ACCOUNTING MONTH" means each period of approximately thirty days ending
on the last day of each calendar month in any financial year of the
Company.
"ACCOUNTING QUARTER" means each period of three Accounting Months ending
on or about 31 March, 30 June, 30 September and 31 December in any
financial year of the Company.
"ADDITIONAL COST RATE" has the meaning given to it in Schedule 4
(Mandatory Cost formulae).
"ADDITIONAL DEBT" means, in relation to any Intercompany Debt, any money,
debt or liability due, owing or incurred under or in connection with:
(a) any refinancing, deferral or extension of that Intercompany Debt;
(b) any further advance which may be made under any document, agreement
or instrument supplemental to any relevant Finance Document together
with any related interest, fees and costs;
(c) any claim for damages or restitution in the event of rescission of
the Intercompany Debt or otherwise in connection with any relevant
Finance Document;
(d) any claim against any Obligor flowing from any recovery by an
Obligor or any liquidator, receiver, administrator, administrative
receiver, compulsory manager or other similar
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officer of a payment or discharge in respect of that Intercompany
Debt on the grounds of preference or otherwise; and
(e) any amount (such as post insolvency interest) which would be
included in any of the above but for any discharge, non provability,
unenforceability or non allowability of the same in any insolvency
or other proceedings.
"ADDITIONAL GUARANTOR" means a company which becomes an Additional
Guarantor in accordance with Clause 24 (Changes to the Obligors)
(excluding for the avoidance of doubt any Original Guarantor).
"AFFILIATE" means, in relation to any person, a Subsidiary of that person
or a Holding Company of that person or any other Subsidiary of that
Holding Company.
"AGREED FORM" means, in relation to a document, that:
(a) it is in a form initialled by or on behalf of the Company and the
Agent on or before the signing of this Agreement for the purposes of
identification; or
(b) if not falling within paragraph (a) above, it is in form and
substance satisfactory to the Agent (acting reasonably) and, in
relation to any document which is not a documentary condition
precedent falling within Clause 4.1, initialled by or on behalf of
the Agent for the purposes of identification, or in relation to a
documentary condition precedent falling within Clause 4.1, notice
has been given by the Agent thereunder.
"AMCIS" means Carbogen Amcis AG (formerly Amcis AG), incorporated in
Switzerland with registered number CH-280.3.916.120-1 and whose registered
office is at ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ as such company
exists at the date of this Agreement.
"APPLICABLE ACCOUNTING PRINCIPLES" means GAAP and practices and financial
reference periods used in the Original Financial Statements.
"AUTHORISATION" means an authorisation, consent, approval, resolution,
licence, exemption, filing, notarisation or registration.
"AVAILABLE COMMITMENT" means, in relation to a Facility, a Lender's
Commitment under that Facility minus:
(a) the amount of its participation in any outstanding Utilisations
under that Facility; and
(b) in relation to any proposed Utilisation, the amount of its
participation in any Utilisations that are due to be made under that
Facility on or before the proposed Utilisation Date.
"AVAILABLE FACILITY" means, in relation to a Facility, the aggregate for
the time being of each Lender's Available Commitment in respect of that
Facility.
"AVAILABILITY PERIOD" means the period from and including the date of this
Agreement to and including 31 August 2006.
"BANKRUPTCY EMERGENCE" means the time at which any direct or indirect
shareholders of the Company who are or become subject to proceedings
pursuant to Title 11 of the United States Code (the "Bankruptcy Code")
emerge from such proceedings (whether by the occurrence of the effective
date of a chapter 11 plan of reorganisation, the dismissal of a case under
chapter 7 or
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chapter 11 of the Bankruptcy Code, or otherwise) and are no longer
required to seek bankruptcy court approval for actions taken outside the
ordinary course of business.
"BREAK COSTS" means the amount (if any) by which:
(a) the interest (excluding the Margin and Mandatory Costs (if any))
which a Lender should have received for the period from the date of
receipt of all or any part of its participation in a Loan or Unpaid
Sum to the last day of the current Interest Period in respect of
that Loan or Unpaid Sum, had the principal amount or Unpaid Sum
received been paid on the last day of that Interest Period;
exceeds:
(b) the amount which that Lender would be able to obtain by placing an
amount equal to the principal amount or Unpaid Sum received by it on
deposit with a leading bank in the Relevant Interbank Market for a
period starting on the Business Day following receipt or recovery
and ending on the last day of the current Interest Period.
"BUDGET" means the Business Plan and each budget supplied under and
complying with Clause 19.6 (Annual Budget).
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
banks are open for general business in London, Brussels and which is a
TARGET Day.
"BUSINESS PLAN" means the business plan in relation to the Group prepared
by the Company and in the Agreed Form.
"CAPITAL EXPENDITURE" means any expenditure which should in accordance
with the Applicable Accounting Principles be treated as capital
expenditure in the audited consolidated financial statements of the Group.
"CASH" means any credit balance on any deposit, savings, current or other
account, and any cash in hand, which is:
(a) freely withdrawable on demand;
(b) not subject to any Security (other than pursuant to any Security
Document);
(c) denominated and payable in any freely transferable and freely
convertible currency; and
(d) capable of being remitted to an Obligor.
"CASH EQUIVALENT INVESTMENTS" means:
(a) securities with a maturity of less than 12 Months from the date of
acquisition issued or fully guaranteed or fully insured by the
Government of the United States or any member state of the European
Union;
(b) commercial paper or other debt securities issued by an issuer rated
at least A-1 by Standard & Poor's Ratings Group or P-1 by ▇▇▇▇▇'▇
Investors Service, Inc. or a comparable rating from an
internationally recognised rating agency and with a maturity of less
than 12 Months; and
(c) any other instrument, security or investment approved by the
Majority Lenders; or
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(d) certificates of deposit or time deposits of any commercial bank
(which has outstanding debt securities rated as referred to in
paragraph (b) above) and with a maturity of less than 12 Months,
(e) repurchase agreements having maturities of not more than 90 days
from the date of acquisition which are entered into with major money
centre banks which are members of the Federal Reserve System;
(f) money market accounts maintained with mutual funds having assets in
excess of USD$2,500,000,000;
(g) tax exempt securities rated A or better by Moody's or A+ or better
by Standard & Poor's; or
(h) readily marketable direct obligations issued by any state of the
United States of America or any political subdivision thereof having
one of the two highest rating categories obtainable from either
Moody's or Standard & Poor's,
in each case not subject to any Security or Quasi Security (other than
pursuant to any Security Document), denominated and payable in any freely
transferable and freely convertible currency and the proceeds of which are
capable of being remitted to an Obligor.
"CASH FLOW" has the meaning given to it in Clause 20 (Financial
covenants).
"CHANGE OF CONTROL" has the meaning given to it in Clause 8.5 (Adjustment
of Margin).
"CHARGED ASSETS" means the assets over which Security is expressed to be
created pursuant to any Security Document.
"CHARGOR" means any person expressed to create Security pursuant to any
Security Document.
"CLOSING DATE" means the date falling one Business Day immediately after
the first Utilisation.
"COMMITMENT" means a Facility B1 Commitment or a Facility B2 Commitment.
"COMMITMENT LETTER" means the commitment letter attaching the term sheet
dated on or about 8 June 2006 between the Borrower, the Company, the
Arranger and the Agent.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form set
out in Schedule 7 (Form of Compliance Certificate).
"CONFIDENTIALITY UNDERTAKING" means a confidentiality undertaking
substantially in the form agreed between the Company and the Arranger on
or prior to the date of this Agreement or in any other form agreed between
the Company and the Agent.
"CURE AMOUNT" has the meaning given to it in Clause 20.3(e) (Financial
covenant calculations).
"DEBT SERVICE" has the meaning given to it in Clause 20 (Financial
covenants).
"DEFAULT" means an Event of Default or any event or circumstance specified
in Clause 22 (Events of Default) which would (with the lapse of time, the
giving of notice, the making of any determination under the Finance
Documents or any combination of any of the foregoing) be an Event of
Default.
"DISRUPTION EVENT" means either or both of:
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(a) a material disruption to those payment or communications systems or
to those financial markets which are, in each case, required to
operate in order for payments to be made in connection with the
Facilities (or otherwise in order for the transactions contemplated
by the Finance Documents to be carried out) which disruption is not
caused by, and is beyond the control of, any of the Parties; or
(b) the occurrence of any other event which results in a disruption (of
a technical or systems-related nature) to the treasury or payments
operations of a Party preventing that, or any other Party:
(i) from performing its payment obligations under the Finance
Documents; or
(ii) from communicating with other Parties in accordance with the
terms of the Finance Documents,
and which (in either such case) is not caused by, and is beyond the
control of, the Party whose operations are disrupted.
"DIP FINANCING" means the facility agreement dated 16 January 2004 between
Solutia Inc., Solutia Business Enterprises, Inc., each Guarantor (as
defined therein), the DIP Lenders and Citicorp USA, Inc. as collateral
agent, administrative agent and documentation agent as amended from time
to time.
"DIP LENDER" means a lender under the DIP Financing.
"DUE DILIGENCE REPORT" means the legal due diligence report by ▇▇▇▇▇ &
Overy LLP in the Agreed Form.
"EBITDA" has the meaning given to it in Clause 20 (Financial covenants).
"ENVIRONMENT" means living organisms including the ecological systems of
which they form part and the following media:
(a) air (including air within natural or man-made structures, whether
above or below ground);
(b) water (including territorial, coastal and inland waters, water under
or within land and water in drains and sewers); and
(c) land (including land under water).
"ENVIRONMENTAL LAW" means all laws and regulations of any relevant
jurisdiction which:
(a) have as a purpose or effect the protection of, and/or prevention of
harm or damage to, the Environment;
(b) provide remedies or compensation for harm or damage to the
Environment; or
(c) relate to Hazardous Substances or health and safety matters.
"ENVIRONMENTAL LICENCE" means any Authorisation required at any time under
Environmental Law.
"ENVIRONMENTAL REPORT" means the report by Environment Resources
Management in the Agreed Form.
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"ESCROW AGREEMENT" means the escrow agreement dated on or about the date
of this Agreement between, among others, KBC Bank NV/SA, Citibank
International plc, Citibank N.A., the Borrower, the Company, Carbogen
Amcis AG and CP Films Vertriebs GmBH.
"EURIBOR" means:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the Interest Period of that
Loan), the rate quoted by the Reference Bank or the arithmetic mean
of the rates rounded upwards to four decimal places if there is more
than one Reference Bank as supplied to the Agent at its request
quoted by the Reference Bank(s) to leading banks in the European
interbank market,
as of the Specified Time on the Quotation Day for the offering of deposits
in euro for a period comparable to the Interest Period of the relevant
Loan.
"EURO NOTES" means the (euro)200,000,000 10% senior secured notes due 2008
issued by the Company.
"EVENT OF DEFAULT" means any event or circumstance specified as such in
Clause 22 (Events of Default).
"EXCESS CASH FLOW" means, for any financial year of the Company, Cash Flow
for that financial year, less:
(a) Debt Service for that financial year;
(b) prepayments of any Loans in that financial year under Clause 7.11
(Voluntary prepayment of Loans);
(c) any amount included in Cash Flow for the Relevant Period which the
Company is permitted to retain under Clause 7.5 (Mandatory
prepayment - Net Sale Proceeds); and
(d) the amount of unspent Capital Expenditure during the current
financial year which is permitted to be carried forward to the
following financial year under Clause 20.2 (Capital Expenditure).
"EXCLUDED COMPANY" means:
(a) subject to paragraph (b) below, Flexsys and Amcis;
(b) Amcis will, from the date falling 65 days after the Closing Date, be
included as a member of the Group for all purposes (and excluded
from this definition) if it has not been sold to a third party buyer
by way of share sale on arms' length terms on or before such date.
"FACILITY" means Facility B1 or Facility B2.
"FACILITY B1" means the term loan facility made available under this
Agreement as described in paragraph (a) of Clause 2.1 (The Facilities).
"FACILITY B1 COMMITMENT" means:
(a) in relation to an Original Lender, the amount in euro set opposite
its name under the heading "Facility B1 Commitment" in Part II of
Schedule 1 (The Original Lenders) and the amount of any other
Facility B1 Commitment transferred to it under this Agreement;
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and
(b) in relation to any other Lender, the amount in euro of any Facility
B1 Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY B1 LENDER" means:
(a) any Original Facility B1 Lender; and
(b) any bank, financial institution, trust, fund or other entity which
has become a Facility B1 Lender in accordance with Clause 23
(Changes to the Lenders),
which in each case has not ceased to be a Facility B1 Lender in accordance
with this Agreement.
"FACILITY B1 LOAN" means a loan made or to be made under Facility B1 or
the principal amount outstanding for the time being of that loan.
"FACILITY B2" means the term loan facility made available under this
Agreement as described in paragraph (b) of Clause 2.1 (The Facilities).
"FACILITY B2 COMMITMENT" means:
(a) in relation to an Original Lender, the amount in euro set opposite
its name under the heading "Facility B2 Commitment" in Part II of
Schedule 1 (The Original Lenders) and the amount of any other
Facility B2 Commitment transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount in euro of any Facility
B2 Commitment transferred to it under this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY B2 LENDER" means:
(a) any Original Facility B2 Lender; and
(b) any bank, financial institution, trust, fund or other entity which
has become a Facility B2 Lender in accordance with Clause 23
(Changes to the Lenders),
which in each case has not ceased to be a Facility B2 Lender in accordance
with the terms of this Agreement.
"FACILITY B2 LOAN" means a loan made or to be made under Facility B2 or
the principal amount outstanding for the time being of that loan.
"FACILITY OFFICE" means the office or offices notified by a Lender to the
Agent in writing on or before the date it becomes a Lender (or, following
that date, by not less than five Business Days' written notice) as the
office or offices through which it will perform its obligations under this
Agreement.
"FEE LETTER" means any letter or letters dated on or about the date of
this Agreement between, as the case may be, the Arranger and the Company
and/or the Borrower; or the Agent and the
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Company and/or the Borrower; or the Security Agent and the Company and/or
the Borrower; setting out any of the fees referred to in Clause 11 (Fees).
"FINANCE DOCUMENT" means this Agreement, each Accession Letter, the
Commitment Letter, each Fee Letter, any Hedging Document, the Hedging
Letter, the Intercreditor Agreement, each Security Document, the Escrow
Agreement and any other document designated as such by the Agent and the
Company.
"FINANCE PARTY" means the Agent, the Arranger, a Lender or the Security
Agent.
"FINANCIAL INDEBTEDNESS" means any indebtedness for or in respect of:
(a) moneys borrowed;
(b) any amount raised by acceptance under any acceptance credit facility
or dematerialised equivalent;
(c) any amount raised pursuant to any note purchase facility or the
issue of bonds, notes, debentures, loan stock or any similar debt
instrument;
(d) the amount of any liability in respect of any lease or hire purchase
contract which would, in accordance with the Applicable Accounting
Principles, be treated as a finance or capital lease;
(e) receivables sold or discounted (other than any receivables to the
extent they are sold on a non-recourse basis and for these purposes,
recourse will not include contractual damages for breach of warranty
relating to the condition of the receivables sold);
(f) any amount raised under any other transaction (including any forward
sale or purchase agreement) having the commercial effect of a
borrowing;
(g) any derivative transaction entered into in connection with
protection against or benefit from fluctuation in any rate or price
(and, when calculating the value of any derivative transaction, only
the marked to market value shall be taken into account) for all
purposes other than for the purposes of Clause 22.5 (Cross default)
where only the relevant unpaid amount (if any) shall be taken into
account;
(h) any counter-indemnity obligation in respect of a guarantee,
indemnity, bond, standby or documentary letter of credit or any
other instrument issued by a bank or financial institution;
(i) the amount of any liability in respect of any credit for goods and
services supplied to the Group raised in the ordinary course of
trade outstanding for more than 150 days after its customary date of
payment; and
(j) the amount of any liability in respect of any guarantee for any of
the items referred to in paragraphs (a) to (i) above.
"FLEXSYS" means Flexsys Holding BV whose address is 51010 Zutphenseweg,
NL-7418 ▇▇ ▇▇▇▇▇▇▇▇, The Netherlands, and whose company number at the
Commercial Register is 38023104.
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"FUNDS FLOW MEMORANDUM" means the funds flow memorandum in the Agreed Form
containing details of the flow of funds on the Closing Date.
"GAAP" means principles, standards and practices in the United States.
"GERMAN OBLIGOR" means an Obligor incorporated in the Federal Republic of
Germany.
"GROUP" means the Company and its Subsidiaries other than any Excluded
Company or Non-Recourse Subsidiary for the time being. For the avoidance
of doubt, Flexsys does not fall with this definition.
"GROUP STRUCTURE CHART" means the group structure chart in the Agreed
Form.
"GUARANTOR" means an Original Guarantor or an Additional Guarantor.
"HAZARDOUS SUBSTANCE" means any waste, pollutant, contaminant or other
substance (including any liquid, solid, gas, ion, living organism or
noise) that may be harmful to human health or other life or the
Environment or a nuisance to any person or that may make the use or
ownership of any affected land or property more costly.
"HEDGING BANK" means a Lender (or an Affiliate of a Lender) which has
become a party to the Intercreditor Agreement as a Hedging Bank in
accordance with the Intercreditor Agreement.
"HEDGING DOCUMENTS" means the documents entered into between a member of
the Group and a Hedging Bank for the purpose of implementing the hedging
strategy required by the Hedging Letter.
"HEDGING LETTER" means a letter dated on or about the date of this
Agreement between the Arranger and the Company setting out the hedging
strategy agreed in relation to the Facilities.
"HOLDING ACCOUNT" means the interest bearing account of the Borrower with
Citibank N.A. with number ▇▇▇▇▇▇▇▇.
"HOLDING COMPANY" means, in relation to a company, corporation or other
legal entity, any other company, corporation or other legal entity in
respect of which it is a Subsidiary.
"INCREASED COSTS" has the meaning given to it in Clause 13.1 (Increased
Costs).
"INFORMATION MEMORANDUM" means the document in the form approved by the
Company concerning the Group which, at the Company's request and on its
behalf, will be prepared in relation to Syndication and distributed by the
Arranger to selected financial institutions.
"INFORMATION PACKAGE" means the Budget, the Business Plan, the Reports and
the Information Memorandum.
"INSURANCE PROCEEDS" has the meaning given to it in Clause 7.6 (Mandatory
prepayment - Insurance Proceeds).
"INTELLECTUAL PROPERTY" means all trade marks, service marks, trade names,
domain names, logos, get-up, patents, inventions, registered and
unregistered design rights, copyrights, topography rights, database
rights, rights in confidential information and know-how, and any
associated or similar rights anywhere in the world, which it now or in the
future owns or (to the extent of its interest) in which it now or in the
future has an interest (in each case whether
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registered or unregistered and including any related licences and
sub-licences of the same granted by it or to it, applications and rights
to apply for the same).
"INTERCOMPANY DEBT" means all present and future moneys, debts and
liabilities due, owing or incurred by any Intercompany Borrower (as
defined in the Intercreditor Agreement) to any Intercompany Lender (as
defined in the Intercreditor Agreement) (in each case, whether alone or
jointly, or jointly and severally, with any other person, whether actually
or contingently and whether as principal, surety or otherwise) together
with any related Additional Debt.
"INTERCREDITOR AGREEMENT" means the intercreditor agreement entered into
or to be entered into between the Agent, the Security Agent, the Hedging
Banks and the Obligors in the Agreed Form.
"INTEREST PERIOD" means, in relation to a Loan, each period determined in
accordance with Clause 9 (Interest Periods) and, in relation to an Unpaid
Sum, each period determined in accordance with Clause 8.3 (Default
interest).
"JOINT VENTURE" means any joint venture entity, whether a company,
unincorporated firm, undertaking, joint venture, association, partnership
or any other entity.
"LENDER" means a Facility B1 Lender or a Facility B2 Lender.
"LIABILITIES" of a Chargor means all present and future moneys, debts and
liabilities due, owing or incurred by it to any Secured Party under or in
connection with any Secured Document (in each case, whether alone or
jointly, or jointly and severally, with any other person, whether actually
or contingently and whether as principal, surety or otherwise).
"LOAN" means a Facility B1 Loan or a Facility B2 Loan.
"MAJORITY LENDERS" means, at any time, a Lender or Lenders:
(a) whose share in the outstanding Loans and whose undrawn Commitments
then aggregate more than 66.67 per cent. of the aggregate of all the
outstanding Loans and the undrawn Commitments of all the Lenders;
(b) if there is no Loan then outstanding, whose undrawn Commitments then
aggregate more than 66.67 per cent. of the Total Commitments; or
(c) if there is no Loan then outstanding and the Total Commitments have
been reduced to zero, whose Commitments aggregated more than 66.67
per cent. of the Total Commitments immediately before the reduction.
"MANDATORY COST" means the percentage rate per annum calculated by the
Agent in accordance with Schedule 4 (Mandatory Cost formulae).
"MARGIN" means 2.75 per cent. per annum subject to adjustment in
accordance with Clause 8.5 (Adjustment of Margin).
"MARGIN ADJUSTMENT DATE" has the meaning given to it in Clause 8.5
(Adjustment of Margin).
"MARKET REPORT" means the report by CRA International Inc. in the Agreed
Form.
"MASTER OPERATING AGREEMENT" means the master operating agreement entered
into between Monsanto Company and Solutia, Inc. dated 1 September 1997 as
amended from time to time as described in further detail in the Due
Diligence Report.
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"MATERIAL ADVERSE EFFECT" means a material adverse effect on or material
adverse change in:
(a) ability of the Obligors, taken as a whole to perform and comply with
their payment obligations under any Finance Document; or
(b) the ability of any Obligor to perform and comply with the financial
covenants under the Facility Agreement; or
(c) the validity, legality or enforceability of any Finance Document.
"MATERIAL SUBSIDIARY" means:
(a) a Subsidiary of the Company listed in the lists of Material
Subsidiaries provided to the Agent under Clause 4.1 (Initial
conditions precedent);
(b) a Subsidiary of the Company, the total assets, EBITDA or total
revenues of which (unconsolidated where that Subsidiary itself has
Subsidiaries) as at the date at which its latest audited financial
statements were prepared or, as the case may be, for the financial
period to which those financial statements relate account for 5 per
cent. or more of the consolidated total assets, EBITDA or total
revenues of the Group (including for these purposes any Excluded
Company) (all as calculated by reference to the latest audited
consolidated financial statements of the Group);
(c) a Subsidiary of the Company which is a Holding Company of any
Subsidiary in paragraph (b) above; or
(d) a Subsidiary of the Company to which it has been transferred
(whether in a single transaction or a series of transactions
(whether related or not)) the whole or substantially the whole of
the assets of a Subsidiary which immediately prior to such
transaction(s) was a Material Subsidiary.
For the purposes of this definition:
(i) if a Subsidiary becomes a Material Subsidiary under paragraph (c)
above, the Material Subsidiary by which the relevant transfer was
made shall, subject to paragraph (b) above, cease to be a Material
Subsidiary; and
(ii) if a Subsidiary is acquired by the Company after the end of the
financial period to which the latest audited consolidated financial
statements of the Group relate, those financial statements shall be
adjusted as if that Subsidiary had been shown in them by reference
to its then latest audited financial statements until audited
consolidated financial statements of the Group for the financial
period in which the acquisition is made have been prepared.
"MONTH" means a period starting on one day in a calendar month and ending
on the numerically corresponding day in the next calendar month, except
that:
(a) if the numerically corresponding day is not a Business Day, that
period shall end on the next Business Day in that calendar month in
which that period is to end if there is one, or if there is not, on
the immediately preceding Business Day; and
- 11 -
(b) if there is no numerically corresponding day in the calendar month
in which that period is to end, that period shall end on the last
Business Day in that calendar month.
The above rules will only apply to the last Month of any period.
"NON-CONSENTING LENDER" has the meaning given to it in Clause 7.13
(Replacement of a Non-Consenting Lender or Non-Funding Lender).
"NON-FUNDING LENDER" has the meaning given to it in Clause 7.13
(Replacement of a Non-Consenting Lender or Non-Funding Lender).
"NON-RECOURSE SUBSIDIARY" means a Subsidiary of the Company which is
designated in writing by the Company to the Facility Agent as a
Non-Recourse Subsidiary and:
(a) is a single purpose company whose sole business comprises the
ownership, creation, development or exploitation of certain of its
assets; and
(b) the share capital or other ownership interests of which are
organised such that liability for all financial and other
obligations of that subsidiary are limited to that subsidiary and
its assets and without any further recourse (including the absence
of financial support, comfort or other assistance obligations),
whether as a matter of law, regulation, contract or otherwise, to
any other member of the Group other than (i) recourse falling within
paragraph (q) of the definition of Permitted Security (ii) recourse
falling within paragraph (n) of the definition of Permitted
Guarantee or any (iii) obligations arising under a commercial
contract otherwise permitted by the terms of this Agreement.
"OBLIGOR" means the Company, the Borrower or a Guarantor.
"ORIGINAL FACILITY B1 LENDER" means a Lender listed in Part II of Schedule
1 (The Original Lenders) as having a Facility B1 Commitment.
"ORIGINAL FACILITY B2 LENDER" means a Lender listed in Part II of Schedule
1 (The Original Lenders) as having a Facility B2 Commitment.
"ORIGINAL FINANCIAL STATEMENTS" means the unaudited consolidated financial
statements of the Group for the financial year ended December 2005 filed
by Solutia Inc. with the United States Securities and Exchange Commission
on a Form 8-K on 19 April 2006, together with such statements for the
period January to March 2006 filed by Solutia Inc. with the United States
Securities and Exchange Commission on a Form 8-K on 30 May 2006.
"ORIGINAL OBLIGOR" means the Borrower or an Original Guarantor.
"PARTICIPATING MEMBER STATE" means any member state of the European
Communities that adopts or has adopted the euro as its lawful currency in
accordance with legislation of the European Community relating to Economic
and Monetary Union.
"PARTY" means a party to this Agreement.
"PERFECTION REQUIREMENTS" means the making of the appropriate
registrations, filings or notifications of the Security Documents as
specifically contemplated by the Security Principles.
"PERFECTION REQUIREMENTS LIST" means the list of Perfection Requirements
set out in paragraph 2(e) of part 1 of Schedule 2 of this Agreement.
- 12 -
"PERMITTED ACQUISITION" means:
(a) the acquisition of, or investment in, any share or interest in any
Permitted Non-Recourse Subsidiary;
(b) the acquisition by a member of the Group of any share or asset sold,
leased, transferred or otherwise disposed of by another member of
the Group in circumstances constituting a Permitted Disposal
provided that the Security Agent, acting reasonably, is satisfied
that the Finance Parties will enjoy the same or equivalent Security
following completion of that acquisition;
(c) an acquisition by way of merger on a solvent basis of any Obligor
with any other Obligor provided that the Security Agent, acting
reasonably, is satisfied that the Finance parties will enjoy the
same or equivalent Security following completion of that
acquisition; or
(d) acquisitions or investments where the consideration (when aggregated
with the consideration for each other acquisition or investment not
otherwise permitted under paragraph (a) to (c) above) does not
exceed (euro)5,000,000 in any financial year of the Group.
"PERMITTED DISPOSAL" means the sale, lease, transfer or other disposal(s)
in each case on arms' length terms, and, in the case of paragraphs (n) to
(p), provided that the Facility Agent has received in writing a
certification of the directors of the disposing company that any
apportionment of disposal proceeds has been carried out on a fair value
basis:
(a) by any member of the Group in the ordinary course of business of the
disposing entity;
(b) as a result of any Permitted Security;
(c) of assets to a Permitted Non-Recourse Subsidiary at a price not less
than full market value;
(d) of obsolete or redundant vehicles, plant and equipment and which, in
the reasonable opinion of the member of the Group making the sale,
transfer or disposal, are not required for the efficient operation
of its business;
(e) of assets in exchange for other assets comparable or superior as to
type, value and quality;
(f) of assets by a Obligor to another member of the Group provided that
the Secured Parties will enjoy the same or equivalent Security over
those assets;
(g) of assets by a member of the Group which is not an Obligor to
another member of the Group which is not an Obligor;
(h) to another member of the Group as part of a Permitted Merger;
(i) made with the prior written consent of the Majority Lenders;
(j) of Cash for purposes not otherwise prohibited by this Agreement;
(k) pursuant to a Permitted Sale and Leaseback;
- 13 -
(l) of all or any part of the shares in or assets of CP Films Vertriebs
GmbH, provided that the Agent has received in writing a
certification of the directors of Solutia Europe S.A./N.V. that all
or any part of the shares in or assets of CP Films Vertriebs GmbH
have been disposed of at fair market value at the time of conclusion
of a legally binding contract in respect of the disposal of CP Films
Vertriebs GmbH;
(m) of Amcis;
(n) of the company referred to in paragraph (a) of Schedule 8
(Disposals);
(o) of the assets referred to in paragraph (b) of Schedule 8
(Disposals);
(p) of the assets referred to in paragraph (c) of Schedule 8
(Disposals); or
(q) of Cash Equivalent Investments:
(i) for Cash; or
(ii) in exchange for other Cash Equivalent Investments;
(r) pursuant to any Permitted Merger;
(w) where the higher of the market value and consideration receivable
(when aggregated with the higher of the market value and/or
consideration (as the case may be) receivable for any other sale,
lease, transfer or other disposal, other than any permitted under
paragraphs (a) to (r) above, does not exceed (euro)15,000,000 (or
its equivalent in another currency or currencies).
"PERMITTED FINANCIAL INDEBTEDNESS" means:
(a) any Financial Indebtedness arising under any Finance Document;
(b) any Financial Indebtedness arising under a Permitted Loan or a
Permitted Guarantee;
(c) any Financial Indebtedness arising under a Permitted Hedging
Transaction;
(d) any Financial Indebtedness incurred by a Permitted Non-Recourse
Subsidiary; and
(e) any Financial Indebtedness under finance or capital leases of
vehicles, plant, equipment or computers, where the aggregate capital
value of all the items so leased by members of the Group does not
exceed (euro)2,500,000 or its equivalent at any time;
(f) any Financial Indebtedness expressly permitted by the Majority
Lenders;
(g) any Financial Indebtedness arising under a Permitted Sale and
Leaseback;
(h) any Financial Indebtedness arising from factoring receivables on a
recourse basis the aggregate amount of which does not exceed
(euro)5,000,000 or its equivalent at any time;
(i) any Financial Indebtedness arising under the Permitted Revolving
Credit Facility;
(j) any Financial Indebtedness under the intra-group loans set out in
Schedule 7 of the Due Diligence Report on the terms as at the date
of this Agreement or any refinancing of those loans where the
principal amount of such loans cannot be increased and the terms of
such loans cannot be on terms more onerous than the existing loans;
- 14 -
(k) any Financial Indebtedness arising from the honouring by a bank or
other financial institution of a cheque, draft or similar instrument
inadvertently (except in the case of daylight overdrafts) drawn
against insufficient funds in the ordinary course of business
provided that such Financial Indebtedness is discharged within 3
Business Days of occurrence; or
(l) any Financial Indebtedness not falling within paragraphs (a) to (k)
above where the aggregate outstanding principal amount of which
across the Group does not at any time exceed (euro)5,000,000 (or its
equivalent in another currency or currencies).
"PERMITTED GUARANTEE" means:
(a) any guarantee arising under the Finance Documents;
(b) any guarantee issued by an Obligor in respect of the Financial
Indebtedness of another Obligor;
(c) any guarantee issued by a member of the Group which is not an
Obligor in respect of the Financial Indebtedness of another member
of the Group which is not an Obligor;
(d) any guarantee issued by a member of the Group which is not an
Obligor in respect of the Financial Indebtedness of an Obligor;
(e) any guarantee issued by a member of the Group in respect of the
liabilities or obligations of a Permitted Non-Recourse Subsidiary;
(f) any guarantee issued by a member of the Group on arm's length terms
(including any counter-indemnity obligation) and in the ordinary
course of its trading, not in respect of Financial Indebtedness;
(g) any customary indemnity in relation to a Permitted Hedging
Transaction;
(h) in respect of a netting or set-off arrangement entered into by a
member of the Group in the ordinary course of its banking
arrangements for the purpose of netting debit and credit balances
for members of the Group, provided that the arrangement does not
permit credit balances of Obligors to be netted or set off against
debit balances of members of the Group which are not Obligors and
the arrangement does not give rise to Security or Quasi Security
over the assets of Obligors in support of liabilities of members of
the Group which are not Obligors; or
(i) guarantees by Obligors in respect of Permitted Financial
Indebtedness of other Obligors;
(j) the endorsement of negotiable instruments in the ordinary course of
trade;
(k) the (euro)590,904 guarantee issued by the Company in favour of OVAM
and any amendment or increase to the amount guaranteed as required
by Belgian law;
(l) any guarantee issued by an Obligor in relation to the Financial
Indebtedness of a member of the Group which is not an Obligor
provided that the aggregate principal amount guaranteed at any time
does not, when aggregated with:
(i) the amount of any loans outstanding at that time which are
permitted under paragraph (g) of the definition of Permitted
Loans; and
- 15 -
(ii) the amount of any shares issued at that time which are
permitted under paragraph (b) of the definition of Permitted
Share Transaction, (when aggregated with all amounts
previously paid in respect of any such share issues),
exceed (euro)5,000,000 (or its equivalent in another currency or
currencies);
(m) any guarantee not falling within paragraphs (a) to (l) above where
that guarantee is an existing guarantee as set out in Part B of
Schedule 7 of the Due Diligence Report on the terms as at the date
of this Agreement or the replacement or amendment of such guarantee
where (A) the principal amount of such guarantees (as amended or
replaced) cannot be increased and (B) the terms of such guarantees
cannot be on more onerous terms than the existing guarantees;
(n) any guarantee not falling within paragraphs (a) to (m) above where
the aggregate liability (whether actual or contingent) of members of
the Group under all such guarantees does not, when aggregated with
the aggregate principal amount of any loans outstanding at that time
which are permitted under paragraph (j) of the definition of
Permitted Loan, at any time exceed (euro)5,000,000 (or its
equivalent in another currency or currencies); or
(o) any guarantee given in respect of the obligations of a Non-Recourse
Subsidiary given by its direct Holding Company provided that the
recourse of the beneficiary in respect of that guarantee (by
contract, law or otherwise) is limited to the shares in that
Non-Recourse Subsidiary.
"PERMITTED HEDGING TRANSACTION" means:
(a) any derivative transaction required by the Hedging Letter and
documented by a Hedging Document and any replacement or extension
(on similar terms and up to the maximum amount of the Financial
Indebtedness under the Finance Documents);
(b) any unsecured derivative transaction to hedge actual or projected
interest or forward exposures arising in the ordinary course of
business of a member of the Group and not for speculative purposes;
or
(c) existing unsecured currency hedging on the terms as at, and entered
into prior to, the date hereof.
"PERMITTED LOAN" means:
(a) any trade credit extended by any member of the Group to its
customers in the ordinary course of its trading activities requiring
payment within 150 days;
(b) a loan to a Restricted Person provided that:
(i) at the time such loan is made the aggregate of:
(A) the principal available amount of the Permitted
Revolving Credit Facility (if any) at the date it was
made available; and
(B) the daily average Cash on the Company's balance sheet
over the past 30 days prior to the date of making such
loan,
is equal to or greater than (euro)25,000,000;
- 16 -
(ii) the principal amount of all such loans does not exceed, when
aggregated with all aggregate dividends referred to in
paragraph (b)(i) of the definition of Permitted Payment an
amount equal to the aggregate of (A) the principal available
amount of the Permitted Revolving Credit Facility (if any) at
the date it was made available, (B) (euro)10,000,000 (or its
equivalent in another currency or currencies) and (C) Retained
Cash (to the extent it has not been applied or committed to be
applied in accordance with this Agreement for another purpose)
provided that:
(iii) any loan funded to the extent set out in paragraph (b)(ii)(B)
above is made to a Restricted Person to which the
circumstances contemplated in Clauses 22.6 (Insolvency) - 22.8
(Creditors' process) do not apply.
(c) a loan made by an Obligor to another Obligor;
(d) a loan made by a member of the Group which is not an Obligor to
another member of the Group which is not an Obligor;
(e) a loan made by a member of the Group which is not an Obligor to an
Obligor;
(f) a loan made to a Permitted Non-Recourse Subsidiary;
(g) a loan made by an Obligor to another member of the Group which is
not an Obligor provided that the aggregate principal amount of all
such loans outstanding at any time does not, when aggregated with:
(i) the amount of any guarantees outstanding at that time which
are permitted under paragraph (i) of the definition of
Permitted Guarantees; and
(ii) the amount of any shares issued at that time which are
permitted under paragraph (b) of the definition of Permitted
Share Transaction (when aggregated with all amounts previously
paid in respect of any such share issues),
exceed (euro)5,000,000 (or its equivalent in another currency or
currencies); or
(h) any loan as set out in Part A of Schedule 7 of the Due Diligence
Report in the form as at the date of this Agreement and any
amendment or refinancing of such loan, provided that the principal
amount of such loan is not increased and any amendment to the terms
of the loan is no less favourable to the creditor.
(i) a loan from a member of the Group to its employees provided that the
aggregate amount of loans to directors or employees of members of
the Group does not exceed (euro)10,000 at any time;
(j) any loan not falling within paragraphs (a) to (i) above the
aggregate principal amount of which at any time does not, when
aggregated with the aggregate principal amount of the Financial
Indebtedness under any such loans and the aggregate liability
(whether actual or contingent) of any guarantees at that time which
are permitted under paragraph (m)(ii) of the definition of Permitted
Guarantee, exceed (euro) 5,000,000 (or its equivalent in another
currency or currencies).
- 17 -
"PERMITTED MERGER" means:
(a) an acquisition by way of merger provided that the acquisition is a
Permitted Acquisition; or
(b) an amalgamation, demerger, merger, consolidation or corporate
reconstruction on a solvent basis of a member of the Group (not
involving the Company or the Borrower) where all of the business and
assets of that member remain within the Group and, if that member of
the Group was an Obligor immediately prior to that amalgamation,
demerger, merger, consolidation or corporate reconstruction, all of
the business and assets of that member are retained by one or more
other Obligors,
and:
(A) at that time no Event of Default has occurred and is
continuing or will arise as a result of such amalgamation,
demerger, merger, consolidation or corporate reconstruction;
(B) the surviving entity of that amalgamation, demerger, merger,
consolidation or corporate reconstruction is liable for the
obligations of the member of the Group is has merged with;
(C) the surviving entity of that amalgamation, demerger, merger,
consolidation or corporate reconstruction is incorporated in
the same jurisdiction as that member of the Group; and
(D) the Agent and the Security Agent are given 30 Business Days'
notice by the Company of that proposed amalgamation, demerger,
merger, consolidation or corporate reconstruction and the
Security Agent, acting reasonably, is satisfied that the
Finance Parties will enjoy the same or equivalent Security
over the same assets and over that member of the Group and the
shares in it (or the shares of the surviving entity).
(c) Any other amalgamation, demerger, merger, consolidation or corporate
reconstruction approved by the Majority Lenders.
"PERMITTED NON-RECOURSE SUBSIDIARY" means a Non-Recourse Subsidiary:
(a) which is incorporated or established after the date of this
Agreement;
(b) where no Default is continuing on the date of the acquisition of, or
investment in, or transfer or loan to, or guarantee, Security or
Quasi Security for the obligations of, the Non-Recourse Subsidiary
or would occur as a result of the acquisition of or investment in,
or transfer or loan to, or guarantee, Security or Quasi Security for
the obligations of, a Non- Recourse Subsidiary; and
(c) the amount invested in or paid to acquire any share or interest in,
or value of assets transferred to, or lent to or the actual or
contingent liability under any guarantee, Security or Quasi
Security, does not exceed in aggregate (euro)2,500,000 (or its
equivalent in another currency or currencies).
- 18 -
"PERMITTED PAYMENT" means:
(a) approximately $9,000,000 (or its equivalent in another currency or
currencies) payment of an intercompany receivable by the Company to
Solutia Inc. immediately after the Closing Date; or
(b) any dividend:
(i) by the Company to its shareholders as at the date of this
Agreement in an amount not exceeding, when aggregated with any
loans referred to in paragraph (b) of the definition of
Permitted Loan, the maximum amount set out in that paragraph
and subject to the conditions set out in paragraph (b)(i) and
(iii) of the definition of Permitted Loan;
(ii) to Solutia Inc. in its capacity as a minority shareholder in
certain Subsidiaries of the Company to permit conformity with
Belgian law in an amount not exceeding, when aggregated with
all other such dividends, (euro)500,000 (or its equivalent in
another currency or currencies) in any financial year of the
Company;
(c) any payment, investment, dividend or distribution of any kind
expressly permitted by the Majority Lenders;
(d) any payment in the ordinary course of trading in relation to licence
fees for the use of Intellectual Property.
"PERMITTED REVOLVING CREDIT FACILITY" means a revolving credit facility to
be made available to the Borrower under the Finance Documents which
satisfies all of the following terms and has been approved by the DIP
Lenders or any other creditors in respect of Financial Indebtedness of any
Restricted Person (to the extent required by the terms of any financing in
relation thereto):
(a) it is provided to the Obligors by a Finance Party or a bank or
financial institution which has a rating for its long term unsecured
and non-credit enhanced debt obligations of BBB or higher by
Standard & Poor's or Fitch or Baa or higher by ▇▇▇▇▇'▇ or a
comparable rating from an internationally recognised credit rating
agency (the "RCF LENDER");
(b) the aggregate principal amount of the commitments of that facility
do not at any time exceed (euro)20,000,000, although the facility
may be drawn in other currencies as agreed between the Company and
the RCF Lender;
(c) the termination date of the facility is no earlier than the
Termination Date;
(d) the margin is no greater than 2.25 per cent. per annum;
(e) the commitment fees shall not exceed an annual rate equal to 50 per
cent. of the margin of the facility;
(f) the facility ranks pari passu as to payments and security with the
Facility;
(g) the facility must be paid down to zero (net of any Cash and Cash
Equivalent Investments held by a member of the Group) for a period
of 5 Business Days once in each financial year of the Company; and
- 19 -
(h) the facility is documented within this Agreement in accordance with
usual market practice.
"PERMITTED SALE AND LEASEBACK" means the sale and leaseback of the real
estate assets at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇-▇▇▇▇▇,
▇▇▇▇▇▇▇.
"PERMITTED SECURITY" means:
(a) any Security or Quasi Security created pursuant to any Finance
Document;
(b) any netting or set-off arrangement entered into under a Permitted
Hedging Transaction where the obligations of the parties are
calculated by reference to net exposure under that Permitted Hedging
Transaction;
(c) any Security or Quasi Security over or affecting any asset acquired
by a member of the Group after the date of this Agreement, if:
(i) the Security or Quasi Security was not created in
contemplation of the acquisition of that asset by a member of
the Group;
(ii) the principal amount secured has not been increased in
contemplation of or since the acquisition of that asset by a
member of the Group; and
(iii) the Security or Quasi Security is removed or discharged within
six Months of the date of acquisition of such asset;
(d) any netting or set-off arrangement entered into by a member of the
Group in the ordinary course of its banking arrangements for the
purpose of netting debit and credit balances of members of the
Group, provided that the arrangement does not permit credit balances
of Obligors to be netted or set off against debit balances of
members of the Group which are not Obligors and the arrangement does
not give rise to other Security or Quasi Security over the assets of
Obligors in support of liabilities of members of the Group which are
not Obligors;
(e) any Quasi Security arising as a result of a sale, transfer or other
disposal which is a Permitted Disposal;
(f) any lien (or in relation to standard terms and conditions of any
bank in Belgium or Germany, pledge) arising by operation of law or
any lien or retention of title arrangement arising by a contract
having an equivalent effect (including those arising under the
standard terms and conditions of any bank with which any member of
the Group is permitted to have accounts under this Agreement) and in
the ordinary course of business and not as a result of any default
or omission by any member of the Group unless being contested in
good faith and adequate reserves have been set aside for payment
thereof in accordance with GAAP;
(g) any Security or Quasi Security entered into in connection with the
Euro Notes provided such Security or Quasi Security is removed or
discharged on the Closing Date;
(h) any Security or Quasi Security:
- 20 -
(i) created after the commencement of legal proceedings with a
view to preserving the status quo between the litigants
pending the outcome of those proceedings, provided that such
Security or Quasi Security does not secure Financial
Indebtedness exceeding in aggregate (euro)1,000,000 (or its
equivalent in another currency or currencies) at any time and
is released forthwith upon final determination of such
litigation; or
(ii) arising pursuant to an order of attachment, distraint,
garnishee or injunction restraining disposal of assets or
similar legal process arising in connection with court
proceedings being contested by the relevant member of the
Group in good faith,
provided that, in the case of both sub-paragraphs (i)(i) and
(i)(ii), such Security or Quasi Security shall be created or arise
solely pursuant to a legal obligation or requirement;
(i) any Security or Quasi Security created with the prior written
consent of the Majority Lenders;
(j) any Security or Quasi Security over goods, documents of title to
goods and related documents and insurances and their proceeds to
secure liabilities of any member of the Group in respect of a letter
of credit or other similar instrument issued for all or part of the
purchase price and costs of shipment, insurance and storage of goods
acquired by any member of the Group in the ordinary course of
trading or business;
(k) any Security or Quasi Security securing the permitted refinancing of
any Financial Indebtedness allowed to be secured in accordance with
paragraphs (a) and (c) above where the principal amount secured has
not been increased above the then outstanding amount of Financial
Indebtedness refinanced;
(l) any lien for taxes, assessments and governmental charges with
respect of which adequate reserves have been set aside for the
payment thereof in accordance with GAAP and with respect to which
(i) such lien for taxes is not more than 30 days overdue, or (ii) if
such lien is more than 30 days overdue, it is being contested in
good faith and adequate reserves have been set aside for the payment
thereof in accordance with GAAP;
(m) easements, zoning restrictions and similar encumbrances on real
property and minor irregularities in the title thereto that do not
(i) secure obligations for the payment of money or (ii) materially
impair the value of such property or its use by any member of the
Group in the ordinary course of business;
(n) any Security or Quasi Security arising under any retention of title,
hire purchase or conditional sale arrangement or arrangements having
similar effect in respect of goods supplied to a member of the Group
in the ordinary course of business and not as a result of any
default or omission by any member of the Group;
(o) any Quasi Security arising as a result of any factoring of
receivables permitted under paragraph (h) of the definition of
Permitted Financial Indebtedness;
- 21 -
(p) any Security or Quasi Security created or subsisting to secure any
obligations incurred in order to comply with the requirements of
Section 8a of the German Partial Retirement Act
(Altersteilzeitgesetz) and/or Section 7d of the German
Sozialgesetzbuch IV;
(q) any Security created over the shares in a Non-Recourse Subsidiary;
and
(r) any Security or Quasi Security securing indebtedness the principal
amount of which (when aggregated with the principal amount of any
other indebtedness which has the benefit of Security or Quasi
Security given by any member of the Group other than any permitted
under paragraphs (a) to (q) above) does not at any time exceed
(euro)1,500,000 (or its equivalent in another currency or
currencies).
"PERMITTED SHARE TRANSACTION" means:
(a) the reduction by the Company or any of its Subsidiaries of its share
capital by way of incorporating previous losses or any capital
increase by the Company or any of its subsidiaries by way of an
incorporation of reserves with or without the issuance of new shares
provided that in each case (i) there is no impact on cash available
to such person as a result thereof, (ii) such reduction does not
have a prejudicial effect on the Security granted pursuant to the
Security Documents, (iii) prior written notice is given to the
Agent; and (ii) there is no resulting or outstanding Event of
Default; or
(b) the issue of ordinary and fully paid up shares, provided (in the
case of a Subsidiary of the Company) those shares are:
(i) the subject of Security in favour of the Secured Parties on
terms pursuant to the Security Documents; and
(ii) where such shares are issued by a member of the Group which is
not an Obligor to an Obligor, the aggregate principal amount
paid in respect of such shares, does not when aggregated with:
(A) all amounts previously paid in respect of any such share
issues; and
(B) the amount of any loans outstanding at that time which
are permitted under paragraph (g) of the definition of
Permitted Loans; and
(C) the amount of any guarantees outstanding at that time
which are permitted under paragraph (i) of the
definition of Permitted Guarantees
exceed (euro)2,500,000 (or its equivalent in another currency
or currencies);
(c) any issue of Shares authorised by the Majority Lenders in writing.
"PHARMA BUSINESS" means Solutia, Inc.'s pharmaceutical services business,
owned and operated primarily by Amcis, which provides leading
pharmaceutical companies with pharmaceutical development expertise,
including process research and manufacturing services, which allows
pharmaceutical companies to bridge the gap from discovery of new drugs to
the manufacturing of those drugs.
"PREPAYMENT ACCOUNT" means the interest bearing account of the Borrower
with Citibank N.A. with account number ▇▇▇▇▇▇▇▇.
- 22 -
"PREPAYMENT DATE" has the meaning given to it in Clause 7.9 (Prepayment
Account).
"QUALIFYING LENDER" has the meaning given to it in Clause 12 (Tax gross-up
and indemnities).
"QUASI SECURITY" means a transaction under which any member of the Group
will:
(a) sell, transfer or otherwise dispose of any of its assets on terms
whereby they are or may be leased to or re-acquired by any other
member of the Group;
(b) sell, transfer or otherwise dispose of any of its receivables on
recourse terms;
(c) enter into any arrangement under which money or the benefit of a
bank or other account may be applied, set-off or made subject to a
combination of accounts; or
(d) enter into any other preferential arrangement having a similar
effect,
in circumstances where the arrangement or transaction is entered into
primarily as a method of raising Financial Indebtedness or of financing
the acquisition of an asset.
"QUOTATION DAY" means, in relation to any period for which an interest
rate is to be determined two TARGET Days before the first day of that
period unless market practice differs in the Relevant Interbank Market for
a currency, in which case the Quotation Day for that currency will be
determined by the Agent in accordance with market practice in the Relevant
Interbank Market (and if quotations for that currency and period would
normally be given by leading banks in the Relevant Interbank Market on
more than one day, the Quotation Day will be the last of those days).
"RECEIPT DATE" has the meaning given to it in Clause 7.9 (Prepayment
Account).
"REFERENCE BANKS" means the principal office of Citibank, N.A., or such
other banks as may be appointed by the Agent in consultation with the
Company.
"REINVESTMENT PREPAYMENT DATE" has the meaning given to it in Clause 7.8
(Holding Account).
"REINVESTMENT RECEIPT DATE" has the meaning given to it in Clause 7.8
(Holding Account).
"RELATED FUND" means, in relation to a trust, fund or other entity,
another trust, fund or other entity which is:
(a) regularly engaged in or established for the purpose of making,
purchasing or investing in loans, securities or other financial
assets; and
(b) has the same fund manager or asset manager or is owned by the same
person as the first trust, fund or other entity.
"RELEVANT INTERBANK MARKET" means the European interbank market.
"RELEVANT JURISDICTION" means, in relation to an Obligor:
(a) its jurisdiction of incorporation; and
(b) the jurisdiction whose laws govern any of the Security Documents
entered into by it.
"RELEVANT PERIOD" has the meaning given to it in Clause 20.4
(Definitions).
"REPEATING REPRESENTATIONS" means each of the representations set out in
Clause 18.1 (Status), Clause 18.2 (Binding obligations), Clause 18.4
(Power and authority) to Clause 18.6
- 23 -
(Governing law and enforcement), Clause 18.12 (Financial statements) to
Clause 18.18 (Group structure), Clause 18.20 (Shares) and Clause 18.21(a)
and (b) (Intellectual property).
"REPORTS" means the documents listed in paragraph 5 of Part 1 of Schedule
2 (Conditions Precedent).
"RESERVATIONS" means any general principles of law limiting the
obligations of any Obligor which are specifically referred to in any legal
opinion delivered pursuant to Clause 4 (Conditions of Utilisation) or
Clause 24 (Changes to the Obligors).
"RESTRICTED PERSON" means Solutia Inc. and any Subsidiary of Solutia Inc.
which is not a member of the Group.
"RETAINED CASH" means any Excess Cash Flow that the Company is not
required to prepay under Clause 7.7 (Mandatory Prepayment - Excess Cash
Flow) in relation to any financial year of the Company until it has been
applied or committed to be applied in any of the way contemplated in
paragraphs (a) to (f) below:
(a) in satisfaction of the purchase price of a Permitted Acquisition;
(b) in payment of Capital Expenditure under Clause 20.2 (Capital
Expenditure);
(c) in or towards a Permitted Payment;
(d) in or towards a Permitted Non-Recourse Subsidiary;
(e) in making a loan falling within paragraph (b) of the definition of
Permitted Loan; or
(f) any other payment permitted to be made under this Agreement from
Retained Cash.
"SALE" has the meaning given to it in Clause 7.2 (Sale).
"SCREEN RATE" means the percentage rate per annum determined by the
Banking Federation of the European Union for the relevant period,
displayed on the appropriate page of the Telerate screen. If the agreed
page is replaced or service ceases to be available, the Agent may specify
another page or service displaying the appropriate rate after consultation
with the Company and the Lenders.
"SECURED DOCUMENTS" means the Finance Documents and the Hedging Documents.
"SECURED PARTY" means a Finance Party or a Hedging Bank.
"SECURITY" means a mortgage, charge, pledge, lien or other security
interest securing any obligation of any person or any other security
interest.
"SECURITY DOCUMENTS" means:
(a) the documents listed in paragraph 2 of Part I and paragraph 13 of
Part II of Schedule 2 (Conditions precedent); and
(b) any other security document that may at any time be given as
security for any of the Liabilities pursuant to or in connection
with any Secured Document.
"SECURITY PRINCIPLES" means the principles in the Agreed Form set out in
Schedule 9 (Security Principles).
- 24 -
"SECURITY PROPERTY" has the meaning given to it in the Intercreditor
Agreement.
"SELECTION NOTICE" means a notice substantially in the form set out in
Part II of Schedule 3 (Requests) given in accordance with Clause 9
(Interest Periods) in relation to a Facility.
"SOLUTIA INC." means Solutia Inc. incorporated in Delaware with Federal
Employer ID Number ▇▇-▇▇▇▇▇▇▇ and whose registered office is at 575
Maryville Centre Drive, P.O. Box 66760, ▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, ▇▇▇ as
such company exists at the date of this Agreement.
"SPECIFIED TIME" means a time determined in accordance with Schedule 9
(Timetables).
"SUBSIDIARY" means in relation to any company, corporation or other legal
entity, (a "HOLDING COMPANY"), a company, corporation or other legal
entity:
(a) which is controlled, directly or indirectly, by the holding company;
(b) more than half the issued share capital of which is beneficially
owned, directly or indirectly, by the holding company; or
(c) which is a subsidiary of another Subsidiary of the holding company,
and, for this purpose, a company or corporation shall be treated as being
controlled by another if that other company or corporation is able to
determine the composition of the majority of its board of directors or
equivalent body. For the avoidance of doubt Flexsys does not fall within
this definition.
"SYNDICATION" means general syndication of the Facilities.
"SYNDICATION DATE" means the earlier of:
(a) the date 3 months after the later of the date of the Facility
Agreement and the date of commencement of syndication which will be
commenced as soon as possible and no later than the Closing Date;
and
(b) the date (as determined by the Arranger and notified to the Company)
on which Syndication has been completed and the additional syndicate
members have become bound by this Agreement.
"TARGET" means Trans-European Automated Real-time Gross Settlement Express
Transfer payment system.
"TARGET DAY" means any day on which TARGET is open for the settlement of
payments in euro.
"TAX" means any tax, levy, impost, duty or other charge or withholding of
a similar nature (including any penalty or interest payable in connection
with any failure to pay or any delay in paying any of the same).
"TAXES ACT" means the Income and Corporation Taxes ▇▇▇ ▇▇▇▇.
"TAX PAYMENT" has the meaning given to it in Clause 12.1 (Definitions).
"TAX STATUS CERTIFICATE" means a certificate substantially in the form set
out in Schedule 5 Part II (Form of Tax Status Certificate).
- 25 -
"TERMINATION DATE" means the date which is 5 years after the Closing Date.
"TOTAL COMMITMENTS" means the aggregate of the Total Facility B1
Commitments and the Total Facility B2 Commitments, being (euro)200,000,000
at the date of this Agreement.
"TOTAL FACILITY B1 COMMITMENTS" means the aggregate of the Facility B1
Commitments, being (euro)160,000,000 at the date of this Agreement.
"TOTAL FACILITY B2 COMMITMENTS" means the aggregate of the Facility B2
Commitments, being (euro)40,000,000 at the date of this Agreement.
"TRANSFER CERTIFICATE" means a certificate substantially in the form set
out in Schedule 5 Part I (Form of Transfer Certificate) or any other form
agreed between the Agent and the Company.
"TRANSFER DATE" means, in relation to a transfer, the later of:
(a) the proposed Transfer Date specified in the Transfer Certificate;
and
(b) the date on which the Agent executes the Transfer Certificate.
"UNPAID SUM" means any sum due and payable but unpaid by an Obligor under
the Finance Documents.
"UTILISATION" means a Loan.
"UTILISATION DATE" means the date on which a Utilisation is, or is to be,
made.
"UTILISATION REQUEST" means a notice substantially in the form set out in
Part I of Schedule 3 (Requests).
"VAT" means value added tax as provided for in the Value Added Tax ▇▇▇
▇▇▇▇ and any other tax of a similar nature.
1.2 CONSTRUCTION
(a) Unless a contrary indication appears, any reference in this Agreement to:
(i) the "AGENT", the "ARRANGER", any "FINANCE PARTY", the "HEDGING
BANK", any "LENDER", any "OBLIGOR", any "PARTY" or the "SECURITY
AGENT" shall be construed so as to include its successors in
title, permitted assigns and permitted transferees;
(ii) "ASSETS" includes present and future properties, revenues and
rights of every description;
(iii) "DOLLARS" means the lawful currency for the time being of the
United States of America.
(iv) "GUARANTEE" means any guarantee, letter of credit, bond, indemnity
or similar assurance against loss, or any obligation, direct or
indirect, actual or contingent, to purchase or assume any
indebtedness of any person or to make an investment in or loan to
any person or to purchase assets of any person where, in each
case, such obligation is assumed in order to maintain or assist
the ability of such person to meet its indebtedness;
(v) a "SECURED DOCUMENT" or any other agreement or instrument is a
reference to that Secured Document or other agreement or
instrument as amended, novated, supplemented, extended, restated
(however fundamentally and whether or not more
- 26 -
onerous) or replaced and includes any change in the purpose of,
any extension of or any increase in any facility or the addition
of any new facility under that Secured Document or other agreement
or instrument;
(vi) "INDEBTEDNESS" includes any obligation (whether incurred as
principal or as surety) for the payment or repayment of money,
whether present or future, actual or contingent;
(vii) a "PERSON" includes any person, firm, company, corporation,
government, state or agency of a state or any association, trust
or partnership (whether or not having separate legal personality)
or two or more of the foregoing;
(viii) a "REGULATION" includes any regulation, rule, official directive,
request or guideline (whether or not having the force of law but,
if not having force of law, one that is customarily complied with
in the relevant jurisdiction of any governmental,
intergovernmental or supranational body, agency, department or
regulatory, self-regulatory or other authority or organisation;
(ix) "SHARES" or "SHARE CAPITAL" includes equivalent ownership
interests (and "SHAREHOLDER" and similar expressions shall be
construed accordingly);
(x) a provision of law is a reference to that provision as amended or
re-enacted; and
(xi) a time of day is a reference to London time.
(b) Section, Clause and Schedule headings are for ease of reference only.
(c) Unless a contrary indication appears, a term used in any other Finance
Document or in any notice given under or in connection with any Finance
Document has the same meaning in that Finance Document or notice as in
this Agreement.
(d) A Default or an Event of Default is "CONTINUING" if it has not been
remedied or waived.
1.3 THIRD PARTY RIGHTS
A person who is not a Party has no right under the Contracts (Rights of
Third Parties) ▇▇▇ ▇▇▇▇ to enforce or to enjoy the benefit of any term of
this Agreement.
1.4 INTERCREDITOR AGREEMENT
This Agreement is subject to the Intercreditor Agreement. In the event of
any inconsistency between this Agreement and the Intercreditor Agreement,
the Intercreditor Agreement shall prevail.
- 27 -
SECTION 2
THE FACILITIES
2. THE FACILITIES
2.1 THE FACILITIES
Subject to the terms of this Agreement:
(a) the Lenders make available to the Borrower a term loan facility in
an aggregate amount equal to the Facility B1 Commitments; and
(b) the Lenders make available to the Borrower a term loan facility in
an aggregate amount equal to the Facility B2 Commitments.
2.2 FINANCE PARTIES' RIGHTS AND OBLIGATIONS
(a) The obligations of each Finance Party under the Finance Documents are
several. Failure by a Finance Party to perform its obligations under the
Finance Documents does not affect the obligations of any other Party under
the Finance Documents. No Finance Party is responsible for the obligations
of any other Finance Party under the Finance Documents.
(b) The rights of each Finance Party under or in connection with the Finance
Documents are separate and independent rights and any debt arising under
the Finance Documents to a Finance Party from an Obligor shall be a
separate and independent debt.
(c) A Finance Party may, except as otherwise stated in the Finance Documents,
separately enforce its rights under the Finance Documents.
2.3 OBLIGORS' AGENT
(a) Each Obligor (other than the Company) irrevocably appoints the Company to
act on its behalf as its agent in relation to the Finance Documents and
irrevocably authorises:
(i) the Company on its behalf to supply all information concerning
itself contemplated by this Agreement to the Finance Parties and to
give and receive all notices, consents and instructions (including
Utilisation Requests), to agree, accept and execute on its behalf
all documents in connection with the Finance Documents (including
amendments and variations of and consents under any Finance
Document) and to execute any new Finance Document and to take such
other action as may be necessary or desirable under or in connection
with the Finance Documents; and
(ii) each Finance Party and each Hedging Bank to give any notice, demand
or other communication to that Obligor pursuant to the Finance
Documents to the Company.
(b) Each Obligor (other than the Company) confirms that:
(i) it will be bound by any action taken by the Company under or in
connection with the Finance Document; and
(ii) each Finance Party and each Hedging Bank may rely on any action
purported to be taken by the Company on behalf of that Obligor.
- 28 -
2.4 ACTS OF THE COMPANY
(a) The respective liabilities of each of the Obligors under the Finance
Documents shall not be in any way affected by:
(i) any actual or purported irregularity in any act done, or failure to
act, by the Company;
(ii) the Company acting (or purporting to act) in any respect outside any
authority conferred upon it by any Obligor; or
(iii) any actual or purported failure by, or inability of, the Company to
inform any Obligor of receipt by it of any notification under the
Finance Documents.
(b) In the event of any conflict between any notices or other communications
of the Company and any other Obligor, those of the Company shall prevail.
3. PURPOSE
3.1 PURPOSE
(a) All amounts borrowed under the Facilities shall be applied (directly or
indirectly) towards refinancing the Euro Notes together with any related
costs and fees, in each case in accordance with the Funds Flow Memorandum
(and the Borrower irrevocably authorises and directs the Agent to make the
payments to the relevant recipients on its behalf as described in the
Funds Flow Memorandum).
(b) No amount borrowed under the Facilities shall be applied in any manner
that may be illegal or contravene any applicable law or regulation in any
jurisdiction concerning financial assistance by a company for the
acquisition of or subscription for shares or concerning the protection of
shareholders' capital.
3.2 MONITORING
No Finance Party is bound to monitor or verify the application of any
amount borrowed pursuant to this Agreement.
4. CONDITIONS OF UTILISATION
4.1 INITIAL CONDITIONS PRECEDENT
The obligations of each Finance Party to the Borrower under the Finance
Documents are subject to the condition precedent that the Agent has
received all of the documents and other evidence listed in Part I of
Schedule 2 (Conditions precedent) in the Agreed Form no later than midday
one Business Day prior to the first proposed Utilisation Date. The Agent
shall notify the Company and the Lenders promptly upon being so satisfied.
4.2 FURTHER CONDITIONS PRECEDENT
The Lenders will only be obliged to comply with Clause 5.4 (Lenders'
participation) if on the date of the Utilisation Request and on the
proposed Utilisation Date:
(a) no Default is continuing or would result from the proposed Loan; and
(b) the representations and warranties set out in Clause 18
(Representations) which are made or deemed to be made in accordance
with Clause 18.27 (Times when representations made) are true.
- 29 -
4.3 MAXIMUM NUMBER OF UTILISATIONS
The Borrower may not deliver a Utilisation Request if as a result of the
proposed Loan more than 1 Facility B1 Loan and 1 Facility B2 Loan would be
outstanding.
- 30 -
SECTION 3
UTILISATION
5. UTILISATION
5.1 DELIVERY OF A UTILISATION REQUEST
The Borrower may utilise a Facility by delivery to the Agent of a duly
completed Utilisation Request not later than the Specified Time.
5.2 COMPLETION OF A UTILISATION REQUEST
(a) Each Utilisation Request for a Loan is irrevocable and will not be
regarded as having been duly completed unless:
(i) it specifies that it is for a Loan;
(ii) it identifies the Facility to be utilised;
(iii) the proposed Utilisation Date is a Business Day within the
Availability Period;
(iv) the currency and amount of the Loan comply with Clause 5.3 (Currency
and amount);
(v) the proposed Interest Period complies with Clause 9 (Interest
Periods); and
(vi) it specifies the account and bank (which must be in the principal
financial centre of the country of the currency of the Utilisation
or, in the case of euro, the principal financial centre of a
Participating Member State in which banks are open for general
business on that day or London) to which the proceeds of the Loan
are to be credited.
(b) Only one Loan may be requested in each Utilisation Request.
5.3 CURRENCY AND AMOUNT
(a) The currency specified in a Utilisation Request must be euro.
5.4 LENDERS' PARTICIPATION
(a) If the conditions set out in this Agreement have been met, each Lender
participating in a Facility shall make its participation in each Loan
under that Facility available by the Utilisation Date through its Facility
Office.
(b) The amount of each Lender's participation in each Loan will be equal to
the proportion borne by its Available Commitment to the Available Facility
immediately prior to making the Loan.
- 31 -
SECTION 4
REPAYMENT, PREPAYMENT AND CANCELLATION
6. REPAYMENT
(a) The Borrower shall repay each Loan on the Termination Date.
(b) The Borrower may not reborrow any part of the Facility which is repaid.
7. PREPAYMENT AND CANCELLATION
7.1 ILLEGALITY
If it becomes unlawful in any applicable jurisdiction for a Lender to
perform any of its obligations as contemplated by this Agreement or to
fund or maintain its participation in any Loan:
(a) that Lender shall promptly notify the Agent upon becoming aware of
that event;
(b) upon the Agent notifying the Borrower the Commitment of that Lender
will be immediately cancelled; and
(c) the Borrower shall repay that Lender's participation in the Loans on
the last day of the Interest Period for each Utilisation occurring
after the Agent has notified the Borrower or, if earlier, the date
specified by the Lender in the notice delivered to the Agent (being
no earlier than the last day of any applicable grace period
permitted by law).
7.2 SALE
(a) In this Clause 7.2 "SALE" means a disposal of all or substantially all of
the assets of the Group (whether in a single transaction or a series of
related transactions).
(b) If a Sale occurs:
(i) the Borrower shall promptly notify the Agent upon becoming aware of
that event;
(ii) a Lender shall not be obliged to fund a Loan; and
(iii) the Facilities shall immediately be cancelled and all outstanding
Loans, together with accrued interest, and all other amounts accrued
under the Finance Documents shall become immediately due and
payable.
7.3 MANDATORY CANCELLATION
Any Commitment which is not utilised on the earlier of:
(i) the final day of the Availability Period;
(ii) the close of business on the date of the first Utilisation;
will be immediately and automatically cancelled.
7.4 VOLUNTARY CANCELLATION
(a) The Borrower may, if it gives the Agent not less than 5 Business Days' (or
such shorter period as the Majority Lenders may agree) prior notice,
cancel the whole or any part (being a minimum amount of (pound)5,000,000)
of an Available Facility. Any cancellation under this Clause 7.4 shall
reduce the Commitment of each Lender rateably under that Facility.
- 32 -
7.5 MANDATORY PREPAYMENT - NET SALE PROCEEDS
(a) In this Clause 7.5:
"NET SALE PROCEEDS" means the cash or cash equivalent proceeds (including
but not limited to, when received, the cash or cash equivalent proceeds of
any deferred consideration, whether by way of adjustment to the purchase
price or otherwise and any amount received in consideration of the
assumption of any debt) received by a member of the Group in connection
with the sale, transfer or other disposal by any member of the Group of an
asset after deducting:
(i) fees, transaction costs and any reserves and other sums in each case
required to be set aside under the contractual terms of the
applicable sale and purchase agreement by way of escrow or
segregation or otherwise for the sole purpose to cover the warranty
claims properly incurred in connection with that sale, transfer or
disposal (provided that to the extent such reserves and other sums
are no longer required to be set aside, such amounts shall at such
time be designated Net Sales Proceeds); and
(ii) taxes paid or reasonably estimated by the Borrower to be payable (as
certified by the Borrower to the Agent) as a result of that sale,
transfer or disposal.
In the event of any sale, transfer or other disposal by any member of the
Group of an asset where such asset is not wholly owned, legally and
beneficially, by such member of the Group, the apportionment of Net Sale
Proceeds between the legal and beneficial owners of such asset shall be
determined by the directors of the Borrower on a fair value basis and the
Borrower shall provide a certificate signed by two directors to the Agent
confirming its determination of such apportionment.
"IMMEDIATE PREPAYMENT PROCEEDS" means Net Sale Proceeds which relate to
disposals referred to in paragraphs (l), (m), (n), (o) and (p) of the
definition of Permitted Disposal to the extent not excluded by virtue of
paragraph (c) of Clause 7.5 (Mandatory Prepayment - Net Sale Proceeds).
"PERMITTED DISPOSAL PROCEEDS" means any Net Sale Proceeds which relate to
the disposals referred to in paragraphs (a), (b), (e), (f), (g), (h), (j),
(q) and (r) of the definition of Permitted Disposals.
"RELEVANT PROCEEDS" means Net Sale Proceeds other than Immediate
Prepayment Proceeds and Permitted Disposal Proceeds.
(b) The Company shall ensure that any Net Sale Proceeds are paid into the
Prepayment Account for application in accordance with Clause 7.9
(Prepayment Account) and Clause 7.10 (Application of Proceeds).
(c) Paragraph (b) above does not apply to any:
(i) Net Sale Proceeds to the extent that, in the case of any Net Sale
Proceeds which relate to the disposals referred to in paragraphs (m)
of the definition of "Permitted Disposal", the amount by which such
Net Sale Proceeds exceed (euro)40,000,000;
(ii) Permitted Disposal Proceeds;
- 33 -
(iii) Net Sale Proceeds to the extent such Net Sale Proceeds are received
by a member of the Group in connection with the sale, transfer or
other disposal by any member of the Group of an asset in the
ordinary course of business (including, without limitation, a
disposal under paragraph (a) of the definition of Permitted
Disposal);
(iv) Net Sale Proceeds in an amount equal to 50 per cent. of the Net Sale
Proceeds of the disposal referred to in paragraph (n) of the
definition of "Permitted Disposal";
(v) Net Sale Proceeds in an amount equal to 50 per cent. of the Net Sale
Proceeds of the disposals referred to in paragraphs (o) and (p) of
the definition of "Permitted Disposal"; and
(vi) Relevant Proceeds to the extent such Relevant Proceeds are paid into
the Holding Account and have within six months of receipt been
contractually committed to be applied and have within eighteen
months of receipt have been applied towards the purchase of other
similar assets for use in the Group's business and no part of those
Relevant Proceeds is withdrawn from the Holding Account except for
that purpose within that eighteen month period.
7.6 MANDATORY PREPAYMENT - INSURANCE PROCEEDS
(a) In this Clause 7.6:
"INSURANCE PROCEEDS" means any proceeds (other than in relation to third
party liabilities that are actually applied to meet such liabilities or in
relation to consequential loss policies that are actually applied to cover
operating losses, loss of profits or business interruption) exceeding
(euro)3,000,000 (or its equivalent in another currency or currencies)
received by any member of the Group under or pursuant to any insurance
policy (or equivalent) after the date of this Agreement.
(b) The Company shall ensure that any Insurance Proceeds are paid into the
Prepayment Account for application in accordance with Clause 7.9
(Prepayment Account) and Clause 7.10 (Application of Proceeds).
(c) Paragraph (b) above does not apply to any Insurance Proceeds to the extent
that such Insurance Proceeds are paid into the Holding Account and have
within six Months of receipt been contractually committed to be applied
and have within eighteen Months of receipt been applied to replace, repair
or reinstate the asset(s) to which those Insurance Proceeds relate and no
part of those Insurance Proceeds is withdrawn from the Holding Account
except for that purpose within that eighteen Month period.
7.7 MANDATORY PREPAYMENT - EXCESS CASH FLOW
(a) Within five Business Days of delivery to the Agent of the Company's
audited consolidated financial statements for any financial year,
commencing with such financial statements for the financial year ending on
31 December 2006, the Company shall ensure that an amount equal to 50 per
cent. of the Excess Cash Flow for that financial year (or, in the case of
the financial year ending on 31 December 2006, an amount equal to 50 per
cent. of the Excess Cash Flow multiplied by the fraction equal to the
number of days for the period from the date of this Agreement to 31
December 2006 (inclusive) divided by 365) is paid into the Prepayment
Account.
- 34 -
(b) All amounts paid into the Prepayment Account under paragraph (a) above
will be applied in prepayment of the Loans as described in Clause 7.9
(Prepayment Account) and Clause 7.10 (Application of Proceeds), as if
those amounts were "Proceeds" and the date of payment into the Prepayment
Account were the "Receipt Date".
7.8 HOLDING ACCOUNT
(a) In this Clause 7.8, Clause 7.9 (Prepayment Account) and Clause 7.10
(Application of Proceeds):
"PROCEEDS" means, Insurance Proceeds, Net Sale Proceeds (other than
Immediate Prepayment Proceeds) and amounts paid into the Prepayment
Account under Clause 7.7 (Mandatory Prepayment - Excess Cash Flow).
(b) The Company shall ensure that any Insurance Proceeds which are to be
applied to replace, repair or reinstate asset(s) in accordance with
paragraph (c) of Clause 7.6 (Mandatory prepayment - Insurance Proceeds)
(or an equal amount), are paid directly into (or as soon as practicable
after receipt are transferred into) the Holding Account.
(c) The Company shall ensure that any Relevant Proceeds which are to be
applied towards the purchase of other similar assets for use in the
Group's business in accordance with paragraph (c)(vi) of Clause 7.5
(Mandatory Prepayment - Net Sale Proceeds) (or an equal amount), are paid
directly into (or as soon as practicable after receipt are transferred
into) the Holding Account.
(d) Within five Business Days after the date (the "REINVESTMENT RECEIPT DATE")
on which any such Proceeds have been received by any member of the Group
(or have become Proceeds), the Borrower shall notify the Agent of the
Reinvestment Receipt Date and the amount in euro of those Proceeds.
(e) No amount may be withdrawn or transferred from the Holding Account except:
(i) to purchase other similar assets for use in the Group's business
under paragraph (c)(iv) of Clause 7.5 (Mandatory Prepayment Net Sale
Proceeds);
(ii) to replace, repair or reinstate assets under paragraph (c) of Clause
7.6 (Mandatory prepayment - Insurance Proceeds);
(iii) to make the prepayments required Clause 7.10 (Application of
Proceeds); or
(iv) with the prior consent of the Majority Lenders,
provided that, upon an Event of Default, all amounts standing to the
credit of the Holding Account shall be transferred to the Prepayment
Account.
(f) To the extent that any amount in respect of any Proceeds falling within
sub-paragraph of paragraph (d) above is not withdrawn from the Holding
Account in accordance with paragraph (c)(vi) of Clause 7.5 (Mandatory
Prepayment - Net Sale Proceeds) and paragraph (c) of Clause 7.6 (Mandatory
prepayment - Insurance Proceeds) and under sub-paragraph (i) above, the
Borrower shall notify the Agent of the proposed date of prepayment of
those Proceeds (the "REINVESTMENT PREPAYMENT DATE") which must be at least
five Business Days after the date of that notice.
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(g) The Borrower irrevocably authorises the Agent to withdraw any amounts
credited to the Holding Account which have not been withdrawn from the
Holding Account under sub-paragraphs (i) and (ii) of paragraph (e) above
and apply such amounts against cancellations and prepayments which are due
under this Agreement in accordance with Clause 7.10 (Application of
Proceeds).
(h) Interest which has accrued on the Holding Account may be withdrawn by the
Borrower in accordance with the mandate relating to the Holding Account,
provided that no such withdrawal may be made while an Event of Default is
outstanding in respect of which notice has been served on the Borrower by
the Agent.
7.9 PREPAYMENT ACCOUNT
(a) The Borrower shall ensure that all Proceeds (or an equal amount)
including, for the avoidance of doubt Immediate Prepayment Proceeds (other
than, subject to Clause 7.8(e), any proceeds paid into the Holding
Account) are paid directly into (or as soon as practicable after receipt
are transferred into) the Prepayment Account.
(b) Within five Business Days after the date (the "RECEIPT DATE") on which any
such Proceeds have been received by any member of the Group (or have
become Proceeds), the Company shall notify the Agent of the Receipt Date,
the amount in euro of those Proceeds and the proposed date of prepayment
of those Proceeds (the "PREPAYMENT DATE") (which must be at least five
Business Days after the date of that notice or as otherwise agreed between
the Borrower and the Agent only in respect of such Proceeds which relate
to the disposals referred to in paragraph (m) of the definition of
Permitted Disposal).
(c) No amount may be withdrawn or transferred from the Prepayment Account
except:
(i) to make the prepayments required under Clause 7.10 (Application of
Proceeds); or
(ii) with the prior consent of the Majority Lenders.
(d) The Borrower irrevocably authorises the Agent to withdraw amounts credited
to the Prepayment Account and apply such amounts against cancellations and
prepayments which are due under this Agreement in accordance with Clause
7.10 (Application of Proceeds).
(e) Interest which has accrued on the Prepayment Account may be withdrawn by
the Borrower in accordance with the mandate relating to the Prepayment
Account, provided that no such withdrawal may be made while an Event of
Default is outstanding in respect of which notice has been served on the
Borrower by the Agent.
7.10 APPLICATION OF PROCEEDS
(a) Any Proceeds in respect of which the Borrower has delivered a notice under
paragraph (e) of Clause 7.8 (Holding Account) or paragraph (b) of Clause
7.9 (Prepayment Account) shall be applied in the following order, in each
case until the relevant Loans or other liabilities have been satisfied in
full:
(i) in the case of any Net Sale Proceeds which relate to any disposal
referred to in paragraph (m) of the definition of "Permitted
Disposal", in prepayment of the outstanding Facility B2 Loan only;
and
(ii) in the case of any other Proceeds:
- 36 -
(A) subject to paragraph (B) below, FIRST in prepayment of amounts
outstanding under Facility B1 and SECOND in prepayment of
amounts outstanding under Facility B2; or
(B) from the earlier of the date of any disposal referred to in
paragraphs (m) and (n) of the definition of "Permitted
Disposal" and the date which is 65 days after the Closing
Date, in prepayment pro rata of amounts outstanding under
Facility B1 and Facility B2.
(b) Any Proceeds to be applied in prepayment of any Loan under paragraph (a)
above shall be applied on the earlier of the Reinvestment Prepayment Date
or, as the case may be, the Prepayment Date and the last day of the
Interest Period relating to that Loan.
7.11 VOLUNTARY PREPAYMENT OF LOANS
(a) The Borrower may, if it gives the Agent not less than five Business Days'
(or such shorter period as the Majority Lenders may agree) prior notice,
prepay the whole or any part of any Loan but if in part by an aggregate
amount that reduces the relevant Loan by a minimum amount of
(euro)5,000,000.
(b) Any Loan may only be voluntarily prepaid after 31 August 2006 (or, if
earlier, the day on which the Available Facility for the relevant Facility
is zero).
7.12 RIGHT OF REPLACEMENT OF A SINGLE LENDER
If:
(a) any sum payable to any Lender by an Obligor is required to be
increased under paragraph (c) of Clause 12.2 (Tax gross-up); or
(b) any Lender claims indemnification from the Company under Clause 12.3
(Tax indemnity) or Clause 13.1 (Increased costs),
(c) an Obligor is, or will be, required to pay to a Lender any amount
under Schedule 4 (Mandatory Cost Formulae),
the Borrower may, whilst the circumstance giving rise to the requirement
or indemnification continues (and by not less than 15 Business Days' prior
written notice):
(i) arrange for the transfer of the whole (but not part only) of that
Lender's Commitment and participations in the Loans to a new or
existing Lender or financial institution which is not a Restricted
Person, a member of the Group or an Affiliate of either of the
foregoing willing to accept that transfer and acceptable to the
Borrower; or
(ii) with the prior consent of the Majority Lenders, give the Agent
notice of cancellation of the Commitment of that Lender and its
intention to procure the repayment of that Lender's participation in
the Utilisations granted by that Lender, whereupon the Commitment of
that Lender shall immediately be reduced to zero.
On the last day of each Interest Period which ends after the
Borrower has given notice under this paragraph (ii) (or, if earlier,
the date specified by the Borrower in that notice), the Borrower
shall repay that Lender's participation in that Utilisation.
- 37 -
7.13 REPLACEMENT OF A NON-CONSENTING LENDER OR NON-FUNDING LENDER
(a) In this Clause 7.13 and in Clause 7.14 (Replacement of a Lender):
(i) "NON-CONSENTING LENDER" means any Lender which does not agree to a
consent, waiver or amendment directly or by virtue of Clause 34.2(d)
(Exceptions) if:
(A) the Borrower or the Agent has requested a consent under or
waiver or amendment of any provision of any Finance Document;
(B) that consent, waiver or amendment requires the agreement of
all the Lenders; and
(C) a Lender or Lenders:
1. whose share in the outstanding Loans and whose undrawn
Commitments then aggregate 80 per cent. or more of the
aggregate of all the outstanding Loans and undrawn
Commitments of all the Lenders;
2. if there is no Loan then outstanding, whose undrawn
Commitments then aggregate 80 per cent. or more of the
Total Commitments; or
3. if there is a Loan then outstanding and the Total
Commitments have been reduced to zero, whose Commitments
aggregated 80 per cent. or more of the Total Commitments
immediately before the reduction.
(ii) "NON-FUNDING LENDER" means:
(A) any Lender which has failed to make or participate in any
Utilisation as required by this Agreement and the Agent has
determined that the Lender is not likely to advance that
amount; or
(B) any Lender which has given notice to the Borrower or the Agent
that it does not intend to make or participate in any
Utilisation as required by this Agreement or has repudiated
its obligation to do so.
(b) If:
(i) any Lender becomes a Non-Consenting Lender; or
(ii) any Lender becomes a Non-Funding Lender,
the Borrower may, if it gives the Agent and that Lender not less than 15
Business Days' prior notice, arrange for the transfer of the whole (but
not part only) of that Lender's Commitment and participations in the Loans
to a new or existing Lender or financial institution which is not a
Restricted Person, a member of the Group or an Affiliate of either of the
foregoing willing to accept that transfer and acceptable to the Borrower.
7.14 REPLACEMENT OF A LENDER
(a) The replacement of a Lender pursuant to Clause 7.12 (Right of replacement
of a single Lender) or Clause 7.13 (Replacement of a Non-Consenting Lender
or Non-Funding Lender) shall be subject to the following conditions:
(i) no Finance Party shall have any obligation to find a replacement
Lender;
- 38 -
(ii) any replacement of a Non-Consenting Lender must take place no later
than 60 days after the earlier of (A) the date the Non-Consenting
Lender notified the Agent of its refusal to agree to the relevant
consent, waiver or amendment and (B) the deadline (being not less
than 15 Business Days after the Lender received the request for the
relevant consent, waiver or amendment) by which the Non-Consenting
Lender failed to reply to that request;
(iii) any Lender replaced pursuant to Clause 7.12 (Right of replacement of
a single Lender) or Clause 7.13 (Replacement of a Non-Consenting
Lender or Non-Funding Lender) shall not be required to refund, or to
pay or surrender to any other Lender, any of the fees or other
amounts received by that Lender under any Finance Document; and
(iv) any replacement pursuant to Clause 7.12 (Right of replacement of a
single Lender) or Clause 7.13 (Replacement of a Non-Consenting
Lender or Non-Funding Lender) of a Lender which is the Agent shall
not affect its role as the Agent.
(b) The Borrower's right to replace a Non-Funding Lender is in addition
to all other rights and remedies available to the Borrower against
the Non-Funding Lender.
7.15 RESTRICTIONS
(a) Any notice of cancellation or prepayment given by any Party under this
Clause 7 shall be irrevocable and, unless a contrary indication appears in
this Agreement, specify the date or dates upon which the relevant
cancellation or prepayment is to be made and the amount of that
cancellation or prepayment.
(b) Any prepayment under this Agreement shall be made together with accrued
interest on the amount prepaid and, subject to any Break Costs, without
premium or penalty.
(c) The Borrower may not reborrow any part of a Facility which is prepaid.
(d) The Borrower shall not repay or prepay all or any part of the Utilisations
or cancel all or any part of the Commitments except at the times and in
the manner expressly provided for in this Agreement.
(e) Unless a contrary indication appears in this Agreement, no amount of the
Total Commitments cancelled under this Agreement may be subsequently
reinstated.
(f) If the Agent receives a notice under this Clause 7 it shall promptly
forward a copy of that notice to either the Borrower or the affected
Lender, as appropriate.
- 39 -
SECTION 5
COSTS OF UTILISATION
8. INTEREST
8.1 CALCULATION OF INTEREST
The rate of interest on each Loan for each Interest Period is the
percentage rate per annum which is the aggregate of the applicable:
(a) Margin;
(b) EURIBOR; and
(c) Mandatory Cost, if any.
8.2 PAYMENT OF INTEREST
The Borrower shall pay accrued interest on each Loan on the last day of
each Interest Period (and, if the Interest Period is longer than six
Months, on the dates falling at six monthly intervals after the first day
of the Interest Period).
8.3 DEFAULT INTEREST
(a) If an Obligor fails to pay any amount payable by it under a Finance
Document on its due date, interest shall accrue on the overdue amount from
the due date up to the date of actual payment (both before and after
judgment) at a rate which, subject to paragraph (b) below, is the sum of
one per cent. and the rate which would have been payable if the overdue
amount had, during the period of non-payment, constituted a Loan in the
currency of the overdue amount for successive Interest Periods, each of a
duration selected by the Agent (acting reasonably) of up to three Months.
Any interest accruing under this Clause 8.3 shall be immediately payable
by the Obligor on demand by the Agent.
(b) If any overdue amount consists of all or part of a Loan which became due
on a day which was not the last day of an Interest Period relating to that
Loan:
(i) the first Interest Period for that overdue amount shall have a
duration equal to the unexpired portion of the current Interest
Period relating to that Loan; and
(ii) the rate of interest applying to the overdue amount during that
first Interest Period shall be the sum of one per cent. and the rate
which would have applied if the overdue amount had not become due.
(c) Default interest (if unpaid) arising on an overdue amount will be
compounded with the overdue amount at the end of each Interest Period
applicable to that overdue amount but will remain immediately due and
payable.
8.4 NOTIFICATION OF RATES OF INTEREST
The Agent shall promptly notify the relevant Lenders and the Borrower of
the determination of a rate of interest under this Agreement.
8.5 ADJUSTMENT OF MARGIN
This Clause 8.5 sets out the mechanics of adjustment of the Margin, each
provision of this Clause 8.5 operating cumulatively.
- 40 -
(a) Subject to this Clause 8.5, in respect of each Interest Period commencing
on or after the date which is 6 Months from the Closing Date the Margin
applicable to each Utilisation shall be the rate per annum specified in
the definition of Margin set out in Clause 1.1 (Definitions) adjusted, by
reference to the ratio of Net Borrowings to EBITDA as shown in the then
most recent Compliance Certificate (and the financial statements with
which it is required by this Agreement to be delivered) received by the
Agent, to equal the rate per annum specified opposite the relevant range
set out in the following table in which the ratio of Net Borrowings to
EBITDA falls:
-------------------------------------------------------------------------
RATIO MARGIN (% P.A.)
-------------------------------------------------------------------------
Higher than 3:1 2.75
-------------------------------------------------------------------------
Equal to or lower than
3:1 but higher than
2.5:1 2.50
-------------------------------------------------------------------------
Equal to or lower than 2.5:1 2.25
-------------------------------------------------------------------------
(b) Any adjustment to the Margin under paragraph (a) above shall take effect
on the date (the "Margin Adjustment Date") falling five Business Days
after receipt by the Agent of a Compliance Certificate (and the financial
statements with which it is required by this Agreement to be delivered) in
accordance with Clause 19.4 (Compliance Certificate).
(c) Until such a resolution as referred to in paragraph (d)(i) below is
actually passed, if at any time, the Collateral Agent for the DIP Lenders
declares by notice to the Administrative Borrower (as defined in the DIP
Financing) all or any portion of the Loans (as defined in the DIP
Financing) to be due and payable pursuant to section 10.01(i) of the DIP
Financing, the Margin shall be the sum of one per cent. per annum and the
Margin which would otherwise have been applicable in accordance with this
Clause 8.5.
(d) If at any time it is no longer necessary to obtain a court approval to
pass a shareholder resolution of the Company by virtue of Bankruptcy
Emergence:
(i) the Company shall procure that such a shareholder resolution of the
Company is promptly passed which shall approve the adjustment to the
Margin applicable on a Change of Control as set out in paragraph
(ii) below; and
(ii) following such resolution being passed, if a Change of Control
occurs the Margin shall be the sum of one per cent. and the Margin
which would otherwise have been applicable in accordance with this
Clause 8.5.
In this paragraph (d):
(i) a "CHANGE OF CONTROL" will occur if:
(A) any person or group of persons acting in concert acquires:
(A) more than 50 per cent. of the issued share capital of
Solutia Inc.;
(B) issued share capital having the right to cast more than
50 per cent. of the votes capable of being cast in
general meetings of Solutia Inc.; or
- 41 -
(C) the right to determine the composition of the majority
of the board of directors or equivalent body of Solutia
Inc.,
but excluding any such acquisition made pursuant to the terms
of the plan of reorganization of Solutia Inc.; or
(B) Solutia Inc. ceases to own, directly or indirectly, 100% of
the issued share capital of the Company, or ceases to have the
right to determine the composition of the majority of the
board of directors or equivalent body of the Company.
(ii) "ACTING IN CONCERT" has the meaning given to it in the City Code on
Takeovers and Mergers.
(e) If any Security is created over the share capital of the Company (except
for Security over such share capital as set out under paragraph 2.2(a)(v)
of the Due Diligence Report as in existence at the date of this Agreement)
the Margin shall be the sum of one per cent. per annum and the Margin
which would otherwise have been applicable in accordance with this Clause
8.5
(f) If the Margin for a Loan is reduced for any period under this Clause 8.5
but the annual audited financial statements of the Group (and the
Compliance Certificate with which they are required by this Agreement to
be delivered) subsequently received by the Agent do not confirm the basis
for that reduction, that reduction shall be reversed with retrospective
effect. In the event the Margin for that Loan shall be the rate per annum
specified opposite the relevant range set out in the table above and the
revised ratio of Net Borrowings to EBITDA calculated using the figures in
that Compliance Certificate. The Company shall promptly pay to the Agent
any amount necessary to put the Agent and Lenders in the position they
would have been in had the appropriate rate of the Margin applied during
that period.
(g) While an Event of Default is continuing, the Margin applicable to each
Utilisation shall, subject to paragraphs (c) to (e) above, revert to the
rate specified in the definition of Margin in Clause 1.1 (Definitions).
9. INTEREST PERIODS
9.1 SELECTION OF INTEREST PERIODS
(a) The Borrower (or the Company on behalf of the Borrower) may select an
Interest Period for a Loan in the Utilisation Request for that Loan or (if
the Loan has already been borrowed) in a Selection Notice.
(b) Each Selection Notice for a Loan is irrevocable and must be delivered to
the Agent by the Borrower (or the Company on behalf of the Borrower) to
which that Loan was made not later than the Specified Time.
(c) If the Borrower (or the Company) fails to deliver a Selection Notice to
the Agent in accordance with paragraph (b) above, the relevant Interest
Period will be one Month.
(d) Subject to this Clause 9, the Borrower (or the Company) may select an
Interest Period of 1, 2, 3 or 6 Months or any other period agreed between
the Company and the Agent (acting on the instructions of all the Lenders
participating in the relevant Loan).
- 42 -
(e) Until the Syndication Date, each Interest Period shall be a maximum
duration of one Month or such shorter duration as the Company and the
Agent may agree.
(f) An Interest Period for a Loan shall not extend beyond the Termination
Date.
(g) Each Interest Period for a Loan shall start on the Utilisation Date or (if
already made) on the last day of its preceding Interest Period.
9.2 NON-BUSINESS DAYS
If an Interest Period would otherwise end on a day which is not a Business
Day, that Interest Period will instead end on the next Business Day in
that calendar month (if there is one) or the preceding Business Day (if
there is not).
10. CHANGES TO THE CALCULATION OF INTEREST
10.1 ABSENCE OF QUOTATIONS
Subject to Clause 10.2 (Market disruption), if EURIBOR is to be determined
by reference to the Reference Banks but a Reference Bank does not supply a
quotation by the Specified Time on the Quotation Day, the applicable
EURIBOR shall be determined on the basis of the quotations of the
remaining Reference Banks.
10.2 MARKET DISRUPTION
(a) The Agent will notify the Company if a Market Disruption Event occurs in
relation to a Loan for any Interest Period. After such notification the
rate of interest on each Lender's share of that Loan for the Interest
Period shall be the percentage rate per annum which is the sum of:
(i) the Margin;
(ii) the rate notified to the Agent by that Lender as soon as practicable
and in any event before interest is due to be paid in respect of
that Interest Period, to be that which expresses as a percentage
rate per annum the cost to that Lender of funding its participation
in that Loan from whatever source it may reasonably select; and
(iii) the Mandatory Cost, if any, applicable to that Lender's
participation in the Loan.
(b) In this Agreement "MARKET DISRUPTION EVENT" means:
(i) at or about noon on the Quotation Day for the relevant Interest
Period the Screen Rate is not available and none or only one of the
Reference Banks supplies a rate to the Agent to determine EURIBOR
for the relevant currency and Interest Period; or
(ii) before close of business in London on the Quotation Day for the
relevant Interest Period, the Agent receives notifications from a
Lender or Lenders (whose participations in a Loan exceed 35 per
cent. of that Loan) that the cost to it of obtaining matching
deposits in the Relevant Interbank Market would be in excess of
EURIBOR for euro and the relevant Interest Period.
10.3 ALTERNATIVE BASIS OF INTEREST OR FUNDING
(a) If a Market Disruption Event occurs and the Agent or the Company so
requires, the Agent and the Company shall enter into negotiations
(for a period of not more than thirty days) with a view to agreeing
a substitute basis for determining the rate of interest.
- 43 -
(b) Any alternative basis agreed pursuant to paragraph (a) above shall, with
the prior consent of all the Lenders and the Company, be binding on all
Parties.
10.4 BREAK COSTS
(a) The Borrower shall, within three Business Days of demand by a Finance
Party, pay to that Finance Party its Break Costs attributable to all or
any part of a Loan or Unpaid Sum being paid by the Borrower on a day other
than the last day of an Interest Period for that Loan or Unpaid Sum.
(b) Each Lender shall, as soon as reasonably practicable after a demand by the
Agent, provide a certificate confirming the amount of its Break Costs for
any Interest Period in which they accrue.
11. FEES
11.1 ARRANGEMENT FEE
The Company or the Borrower shall pay to the Arranger an arrangement fee
in the amount and at the times agreed in a Fee Letter.
11.2 AGENCY FEE
The Company or the Borrower shall pay to the Agent (for its own account)
an agency fee in the amount and at the times agreed in a Fee Letter.
11.3 SECURITY AGENCY FEE
The Company or the Borrower shall pay to the Security Agent (for its own
account) a security agency fee in the amount and at the times agreed in a
Fee Letter.
- 44 -
SECTION 6
ADDITIONAL PAYMENT OBLIGATIONS
12. TAX GROSS-UP AND INDEMNITIES
12.1 DEFINITIONS
(a) In this Agreement:
"PROTECTED PARTY" means a Finance Party which is or will be subject to any
liability, or required to make any payment, for or on account of Tax in
relation to a sum received or receivable (or any sum deemed for the
purposes of Tax to be received or receivable) under a Finance Document.
"QUALIFYING LENDER" means a Lender which is beneficially entitled to
interest payments under this Agreement and which is (i) a Belgian legal
entity subject to Belgian corporate income tax, (ii) a non-Belgian legal
entity or (iii) a non-Belgian entity having a legal form similar to the
legal form of a Belgian company.
"TAX CREDIT" means a credit against, relief or remission for, or repayment
of any Tax.
"TAX DEDUCTION" means a deduction or withholding for or on account of Tax
from a payment under a Finance Document.
"TAX PAYMENT" means either the increase in a payment made by an Obligor to
a Finance Party under Clause 12.2 (Tax gross-up) or a payment under Clause
12.3 (Tax indemnity).
(b) Unless a contrary indication appears, in this Clause 12 a reference to
"determines" or "determined" means a determination made in the absolute
discretion of the person making the determination.
12.2 TAX GROSS-UP
(a) Each Obligor shall make all payments to be made by it without any Tax
Deduction, unless a Tax Deduction is required by law.
(b) The Company shall promptly upon becoming aware that an Obligor must make a
Tax Deduction (or that there is any change in the rate or the basis of a
Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall
notify the Agent on becoming so aware in respect of a payment payable to
that Lender. If the Agent receives such notification from a Lender it
shall notify the Company and that Obligor.
(c) If a Tax Deduction is required by law to be made by an Obligor, the amount
of the payment due from that Obligor shall be increased to an amount which
(after making any Tax Deduction) leaves an amount equal to the payment
which would have been due if no Tax Deduction had been required.
(d) An Obligor is not required to make an increased payment to a Lender under
paragraph (c) above for a Tax Deduction in respect of Tax imposed on a
payment of interest on a Loan if:
(i)
(A) at any point in time between the date of the Agreement and the
date on which the payment falls due or on the date on which
the payment falls due such Lender is
- 45 -
not or has ceased to be a Qualifying Lender other than as a
result of any change after the date he became a Lender under
this Agreement in (or in the interpretation, administration,
or application of) any law, or any published practice or
concession of any relevant taxing authority; or
(B) such Lender has not complied with its obligations under
paragraph (g) below or its representation (if any) under
paragraph (g) below is untrue; or
(ii) unless Qualifying Lender status of a Lender is not required in order
to enable the Borrower to make all payments made by it to the
Lenders without a Tax Deduction.
(e) If an Obligor is required to make a Tax Deduction, that Obligor shall make
that Tax Deduction and any payment required in connection with that Tax
Deduction within the time allowed and in the minimum amount required by
law.
(f) Within thirty days of making either a Tax Deduction or any payment
required in connection with that Tax Deduction, the Obligor making that
Tax Deduction shall deliver to the Agent for the Finance Party entitled to
the payment an original receipt (or certified copy thereof) reasonably
satisfactory to that Finance Party that the Tax Deduction has been made or
(as applicable) any appropriate payment paid to the relevant taxing
authority.
(g) Each Original Lender shall deliver to the Borrower on or before the
Closing Date a Tax Status Certificate duly executed by it with a copy sent
to the Agent and represents to the other parties hereto as at the date of
the Tax Status Certificate that it is a Qualifying Lender. Each other
Lender shall comply with its obligation to deliver a Tax Status
Certificate to the extent required under Clause 23.2(f) and where such
obligation applies, it represents to the other parties hereto that as at
the date of the Tax Status Certificate that it is a Qualifying Lender.
(h) Each Lender shall co-operate directly with the Borrower in completing any
procedural formalities or requirements necessary for that Obligor to
obtain authorisation to make that payment without a Tax Deduction
(including delivering additional Tax Status Certificates if the Belgian
tax authorities inform the Obligor that such additional Tax Status
Certificates are required).
12.3 TAX INDEMNITY
(a) The Company shall (within three Business Days of demand by the Agent) pay
to a Protected Party an amount equal to the loss, liability or cost which
that Protected Party determines will be or has been (directly or
indirectly) suffered for or on account of Tax by that Protected Party in
respect of a Finance Document.
(b) Paragraph (a) above shall not apply:
(i) with respect to any Tax assessed on a Finance Party:
(A) under the law of the jurisdiction in which that Finance Party
is incorporated or, if different, the jurisdiction (or
jurisdictions) in which that Finance Party is treated as
resident for tax purposes; or
(B) under the law of the jurisdiction in which that Finance
Party's Facility Office is located in respect of amounts
received or receivable in that jurisdiction,
- 46 -
if that Tax is imposed on or calculated by reference to the
net income received or receivable (but not any sum deemed to
be received or receivable) by that Finance Party; or
(ii) to the extent a loss, liability or cost:
(A) is compensated for by an increased payment under Clause 12.2
(Tax gross-up); or
(B) would have been compensated for by an increased payment under
Clause 12.2 (Tax gross-up) but was not so compensated solely
because one of the exclusions in paragraph (d) of Clause 12.2
(Tax gross-up) applied.
(c) A Protected Party making, or intending to make, a claim under paragraph
(a) above shall promptly notify the Agent of the event which will give, or
has given, rise to the claim, following which the Agent shall notify the
Company.
(d) A Protected Party shall, on receiving a payment from an Obligor under this
Clause 12.3, notify the Agent.
12.4 TAX CREDIT
If an Obligor makes a Tax Payment and the relevant Finance Party
determines that:
(a) a Tax Credit is attributable either to an increased payment of which
that Tax Payment forms part, or to that Tax Payment; and
(b) that Finance Party has obtained, utilised and fully retained that
Tax Credit on an affiliated group basis,
the Finance Party shall pay an amount to the Obligor which that Finance
Party determines will leave it (after that payment) in the same after-Tax
position as it would have been in had the Tax Payment not been required to
be made by the Obligor.
12.5 STAMP TAXES
The Company shall pay and, within three Business Days of demand, indemnify
each Finance Party against any cost, loss or liability that Finance Party
incurs in relation to all stamp duty, stamp duty land tax, registration
and other similar Taxes payable in respect of any Finance Document.
12.6 VALUE ADDED TAX
(a) All amounts set out, or expressed to be payable under a Finance Document
by any Party to a Finance Party which (in whole or in part) constitute the
consideration for VAT purposes shall be deemed to be exclusive of any VAT
which is chargeable on such supply, and accordingly, subject to paragraph
(c) below, if VAT is chargeable on any supply made by any Finance Party to
any Party under a Finance Document, that Party shall pay to the Finance
Party (in addition to and at the same time as paying the consideration) an
amount equal to the amount of the VAT (and such Finance Party shall
promptly provide an appropriate VAT invoice to such Party).
(b) If VAT is chargeable on any supply made by any Finance Party (the
"SUPPLIER") to any other Finance Party (the "Recipient") under a Finance
Document, and any Party (the "RELEVANT PARTY") is required by the terms of
any Finance Document to pay an amount equal to the
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consideration for such supply to the Supplier (rather than being required
to reimburse the Recipient in respect of that consideration), such Party
shall also pay to the Supplier (in addition to and at the same time as
paying such amount) an amount equal to the amount of such VAT. The
Recipient will promptly pay to the Relevant Party an amount equal to any
credit or repayment from the relevant tax authority which it reasonably
determines relates to the VAT chargeable on that supply.
(c) Where a Finance Document requires any Party to reimburse a Finance Party
for any costs or expenses, that Party shall also at the same time pay and
indemnify the Finance Party against all VAT incurred by the Finance Party
in respect of the costs or expenses to the extent that the Finance Party
reasonably determines that neither it nor any other member of any group of
which it is a member for VAT purposes is entitled to credit or repayment
from the relevant tax authority in respect of the VAT.
13. INCREASED COSTS
13.1 INCREASED COSTS
(a) Subject to Clause 13.3 (Exceptions) the Company shall, within three
Business Days of a demand by the Agent, pay for the account of a Finance
Party the amount of any Increased Costs incurred by that Finance Party or
any of its Affiliates as a result of (i) the introduction of or any change
in (or in the interpretation, administration or application of) any law or
regulation made after the date of this Agreement or (ii) compliance with
any law or regulation made after the date of this Agreement.
(b) In this Agreement "INCREASED COSTS" means:
(i) a reduction in the rate of return from a Facility or on a Finance
Party's (or its Affiliate's) overall capital;
(ii) an additional or increased cost; or
(iii) a reduction of any amount due and payable under any Finance
Document,
which is incurred or suffered by a Finance Party or any of its Affiliates
to the extent that it is attributable to that Finance Party having entered
into its Commitment or funding or performing its obligations under any
Finance Document.
13.2 INCREASED COST CLAIMS
(a) A Finance Party intending to make a claim pursuant to Clause 13.1
(Increased Costs) shall notify the Agent of the event giving rise to the
claim, following which the Agent shall promptly notify the Company.
(b) Each Finance Party shall, as soon as practicable after a demand by the
Agent, provide a certificate confirming the amount of its Increased Costs.
13.3 EXCEPTIONS
(a) Clause 13.1 (Increased Costs) does not apply to the extent any Increased
Cost is:
(i) attributable to a Tax Deduction required by law to be made by an
Obligor;
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(ii) compensated for by Clause 12.3 (Tax indemnity) (or would have been
compensated for under Clause 12.3 (Tax indemnity) but was not so
compensated solely because any of the exclusions in paragraph (b) of
Clause 12.3 (Tax indemnity) applied);
(iii) compensated for by the payment of the Mandatory Cost; or
(iv) attributable to the wilful breach by the relevant Finance Party or
its Affiliates of any law or regulation.
(b) In this Clause 13.3, a reference to a "TAX DEDUCTION" has the same meaning
given to the term in Clause 12.1 (Definitions).
14. OTHER INDEMNITIES
14.1 CURRENCY INDEMNITY
(a) If any sum due from an Obligor under the Finance Documents (a "SUM"), or
any order, judgment or award given or made in relation to a Sum, has to be
converted from the currency (the "FIRST CURRENCY") in which that Sum is
payable into another currency (the "SECOND CURRENCY") for the purpose of:
(i) making or filing a claim or proof against that Obligor; or
(ii) obtaining or enforcing an order, judgment or award in relation to
any litigation or arbitration proceedings,
that Obligor shall as an independent obligation, within three Business
Days of demand, indemnify each Finance Party to whom that Sum is due
against any cost, loss or liability arising out of or as a result of the
conversion including any discrepancy between (A) the rate of exchange used
to convert that Sum from the First Currency into the Second Currency and
(B) the rate or rates of exchange available to that person at the time of
its receipt of that Sum.
(b) Each Obligor waives any right it may have in any jurisdiction to pay any
amount under the Finance Documents in a currency or currency unit other
than that in which it is expressed to be payable.
14.2 OTHER INDEMNITIES
The Company shall (or shall procure that an Obligor will), within three
Business Days of demand, indemnify each Finance Party against any cost,
loss or liability incurred by that Finance Party as a result of:
(a) the occurrence of any Event of Default;
(b) a failure by an Obligor to pay any amount due under a Finance
Document on its due date, including without limitation, any cost,
loss or liability arising as a result of Clause 27 (Sharing among
the Finance Parties);
(c) funding, or making arrangements to fund, its participation in a
Utilisation requested by the Borrower in a Utilisation Request but
not made by reason of the operation of any one or more of the
provisions of this Agreement (other than by reason of default or
negligence by that Finance Party alone); or
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(d) a Utilisation (or part of a Utilisation) not being prepaid in
accordance with a notice of prepayment given by the Borrower or the
Company or as required by this Agreement.
14.3 INDEMNITY TO THE AGENT
The Company shall promptly indemnify the Agent against any cost, loss or
liability incurred by the Agent (acting reasonably) as a result of:
(a) investigating any event which it reasonably believes is a Default;
or
(b) acting or relying on any notice, request or instruction which it
reasonably believes to be genuine, correct and appropriately
authorised.
14.4 THIRD PARTY INDEMNITY
(a) The Company hereby indemnifies and agrees to hold harmless each of the
Finance Parties and in each case each of its and their affiliates and each
of their respective officers, directors, employees, agents, advisors and
representatives (each an "INDEMNIFIED PARTY") from and against any and all
claims, damages, losses, liabilities, costs, legal expenses and expenses
(altogether "LOSSES") that may be incurred by or awarded against any
Indemnified Party, in each case arising out of or in connection with any
claim, investigation, litigation or proceeding (or the preparation of any
defence with respect thereto) commenced or threatened in relation to the
Finance Documents (or the transactions contemplated thereby) or any use of
the proceeds of the Facility whether or not such claim investigation,
litigation or proceeding is brought by the Company, any of its
shareholders or creditors or Indemnified Party or any other person, or an
Indemnified Party is otherwise a party thereto, except to the extent that
such Losses are found in a final non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party's
gross negligence, wilful misconduct or breach of the Finance Documents by
an Indemnified Party.
(b) The company further agrees that no Indemnified Party shall have any
liability (whether direct or indirect, in contract, tort or otherwise) to
it or any of its shareholders or creditors for or in connection with the
transactions referred to above, except for direct (as opposed to indirect
or consequential) damages or losses to the extent such liability is found
in a final non-appealable judgment by a court of competent jurisdiction to
have resulted from such Indemnified Party's gross negligence, wilful
misconduct or breach of the Finance Documents.
15. MITIGATION BY THE LENDERS
15.1 MITIGATION
(a) Each Finance Party shall, in consultation with the Company, take all
reasonable steps to mitigate any circumstances which arise and which would
result in any amount becoming payable under or pursuant to, or cancelled
pursuant to, any of Clause 7.1 (Illegality), Clause 12 (Tax gross-up and
indemnities) or Clause 13 (Increased Costs) including (but not limited to)
transferring its rights and obligations under the Finance Documents to
another Affiliate or Facility Office.
(b) Paragraph (a) above does not in any way limit the obligations of any
Obligor under the Finance Documents.
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15.2 LIMITATION OF LIABILITY
(a) The Company shall indemnify each Finance Party for all costs and expenses
reasonably incurred by that Finance Party as a result of steps taken by it
under Clause 15.1 (Mitigation).
(b) A Finance Party is not obliged to take any steps under Clause 15.1
(Mitigation) if, in the opinion of that Finance Party (acting reasonably),
to do so might be prejudicial to it.
16. COSTS AND EXPENSES
16.1 TRANSACTION EXPENSES
The Company shall promptly on demand pay the Agent, the Security Agent and
the Arranger the amount of all reasonable costs and expenses (including
legal fees and subject to any agreed caps) incurred by any of them in
connection with the negotiation, preparation, printing, execution and
syndication of:
(a) this Agreement and any other documents referred to in this
Agreement; and
(b) any other Finance Document (other than a Transfer Certificate)
executed after the date of this Agreement.
16.2 AMENDMENT COSTS
If (a) an Obligor requests an amendment, waiver or consent or (b) an
amendment is required pursuant to Clause 28.9 (Change of currency), the
Company shall, within three Business Days of demand, reimburse the Agent
and the Security Agent for the amount of all costs and expenses (including
legal fees) reasonably incurred by the Agent or the Security Agent in
responding to, evaluating, negotiating or complying with that request or
requirement.
16.3 ENFORCEMENT COSTS
The Company shall, within three Business Days of demand, pay to each
Finance Party the amount of all costs and expenses (including legal fees)
properly incurred by that Finance Party in connection with the enforcement
of, or the preservation of any rights under, any Finance Document.
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SECTION 7
GUARANTEE AND SECURITY
17. GUARANTEE AND INDEMNITY
17.1 GUARANTEE AND INDEMNITY
Each Guarantor irrevocably and unconditionally jointly and severally:
(a) guarantees to each Finance Party and Hedging Bank punctual
performance by each other Obligor of all that Obligor's obligations
under the Finance Documents;
(b) undertakes with each Finance Party and Hedging Bank that whenever an
Obligor does not pay any amount when due under or in connection with
any Finance Document, that Guarantor shall immediately on demand pay
that amount as if it was the principal obligor; and
(c) indemnifies each Finance Party and Hedging Bank immediately on
demand against any cost, loss or liability suffered by that Finance
Party or Hedging Bank (i) if any obligation guaranteed by it is or
becomes unenforceable, invalid or illegal; or (ii) by operation of
law the amount of the cost, loss or liability shall be equal to the
amount which that Finance Party or Hedging Bank would otherwise have
been entitled to recover.
17.2 CONTINUING GUARANTEE
This guarantee is a continuing guarantee and will extend to the ultimate
balance of sums payable by any Obligor under the Finance Documents,
regardless of any intermediate payment or discharge in whole or in part.
17.3 REINSTATEMENT
If any payment by an Obligor or any discharge given by a Finance Party or
Hedging Bank (whether in respect of the obligations of any Obligor or any
security for those obligations or otherwise) is avoided or reduced as a
result of insolvency or any similar event:
(a) the liability of each Obligor shall continue as if the payment,
discharge, avoidance or reduction had not occurred; and
(b) each Finance Party and Hedging Bank (as applicable) shall be
entitled to recover the value or amount of that security or payment
from each Obligor, as if the payment, discharge, avoidance or
reduction had not occurred.
17.4 WAIVER OF DEFENCES
The obligations of each Guarantor under this Clause 17 will not be
affected by an act, omission, matter or thing which, but for this Clause
17, would reduce, release or prejudice any of its obligations under this
Clause 17 (without limitation and whether or not known to it or any
Secured Party) including:
(a) any time, waiver or consent granted to, or composition with, any
Obligor or other person;
(b) the release of any other Obligor or any other person under the terms
of any composition or arrangement with any creditor of any member of
the Group or any other person;
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(c) the taking, variation, compromise, exchange, renewal or release of,
or refusal or neglect to perfect, take up or enforce, any rights
against, or security over assets of, any Obligor or other person or
any non-presentation or non-observance of any formality or other
requirement in respect of any instrument or any failure to realise
the full value of any security;
(d) any incapacity or lack of power, authority or legal personality of
or dissolution or change in the members or status of an Obligor or
any other person;
(e) any amendment, novation, supplement, extension, restatement (however
fundamental and whether or not more onerous) or replacement of any
Finance Document or any other document or security including any
change in the purpose of, any extension of or any increase in any
facility or the addition of any new facility under any Finance
Document or other document or security;
(f) any unenforceability, illegality or invalidity of any obligation of
any person under any Finance Document or any other document or
security; or
(g) any insolvency or similar proceedings.
17.5 IMMEDIATE RECOURSE
Each Guarantor waives any right it may have of first requiring any Finance
Party or Hedging Bank (or any trustee or agent on its behalf) to proceed
against or enforce any other rights or security or claim payment from any
person before claiming from that Guarantor under this Clause 17. This
waiver applies irrespective of any law or any provision of a Finance
Document to the contrary.
17.6 APPROPRIATIONS
Until all amounts which may be or become payable by the Obligors under or
in connection with the Finance Documents have been irrevocably paid in
full, each Finance Party and Hedging Bank (or any trustee or agent on its
behalf) may:
(a) refrain from applying or enforcing any other moneys, security or
rights held or received by that Finance Party or Hedging Bank (or
any trustee or agent on its behalf) in respect of those amounts, or
apply and enforce the same in such manner and order as it sees fit
(whether against those amounts or otherwise) and no Guarantor shall
be entitled to the benefit of the same; and
(b) hold in an interest-bearing suspense account any moneys received
from any Guarantor or on account of any Guarantor's liability under
this Clause 17.
17.7 DEFERRAL OF GUARANTORS' RIGHTS
Until all amounts which may be or become payable by the Obligors under or
in connection with the Finance Documents have been irrevocably paid in
full and unless the Agent (or, as the case may be, the Security Agent)
otherwise directs, no Guarantor will exercise any rights which it may have
by reason of performance by it of its obligations under the Finance
Documents:
(a) to be indemnified by an Obligor;
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(b) to claim any contribution from any other guarantor of any Obligor's
obligations under the Finance Documents; and/or
(c) to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Finance Parties or
Hedging Banks under the Finance Documents or of any other guarantee
or security taken pursuant to, or in connection with, the Finance
Documents by any Finance Party or Hedging Bank.
17.8 RELEASE OF GUARANTORS' RIGHT OF CONTRIBUTION
If any Guarantor (a "RETIRING GUARANTOR") ceases to be a Guarantor in
accordance with the terms of the Finance Documents for the purpose of any
sale or other disposal of that Retiring Guarantor then on the date such
Retiring Guarantor ceases to be a Guarantor:
(a) that Retiring Guarantor is released by each other Guarantor from any
liability (whether past, present or future and whether actual or
contingent) to make a contribution to any other Guarantor arising by
reason of the performance by any other Guarantor of its obligations
under the Finance Documents; and
(b) each other Guarantor waives any rights it may have by reason of the
performance of its obligations under the Finance Documents to take
the benefit (in whole or in part and whether by way of subrogation
or otherwise) of any rights of the Finance Parties under any Finance
Document or of any other security taken pursuant to, or in
connection with, any Finance Document where such rights or security
are granted by or in relation to the assets of the Retiring
Guarantor.
17.9 ADDITIONAL SECURITY
This guarantee is in addition to and is not in any way prejudiced by any
other guarantee or security now or subsequently held by any Finance Party
or Hedging Bank.
17.10 LIMITATIONS
In relation to any Guarantor incorporated or established in Germany the
following shall apply:
(a) The enforcement of the guarantee and indemnity granted under this Clause
17 (the "GUARANTEE") shall be, at the date hereof and at any time
thereafter, limited to an amount equal to the net assets of the Guarantor,
which are calculated as such Guarantor's total assets (the calculation of
which shall take into account the captions reflected in sections 266 (2)
A, B and C of the German Commercial Code (Handelsgesetzbuch)) less its
reserves for own shares (sections 266 (3) A III.2. of the German
Commercial Code) less its liabilities (the calculation of which shall take
into account the captions reflected in sections 266 (3) B, C, D of the
German Commercial Code) less its registered share capital (Stammkapital)
(the Net Assets).
(b) For the purposes of calculating Net Assets the balance sheet shall be
adjusted in a way that (i) any amounts which the Guarantor has received
from any Loan which has been on-lent by the Borrower to the Guarantor and
is still outstanding at the time of the enforcement of the Guarantee shall
be disregarded or (ii) the amount of any increase of the Guarantor's
registered share capital out of retained earnings (Kapitalerhohung aus
Gesellschaftsmittein) after the date of the Guarantee that has been
effected without the prior written consent of the Agent shall be deducted
from the Guarantor's registered share capital.
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(c) Furthermore, the Guarantor shall, in a situation where
(i) it does not have sufficient assets to maintain its registered share
capital; and
(ii) the Agent would (but for this Clause) be entitled and is seeking to
enforce the security granted under this Guarantee,
(A) realise any and all of its assets that are shown in the
balance sheet with a book value (Buchwert) which is
significantly lower than the market value of such assets,
provided such asset is not necessary for the Guarantor's
business (betriebsnotwendig).
(d) For the purpose of the calculation of the Net Assets and thus the
enforceable amount, the Guarantor will deliver within 30 Business Days
after his notification by the Agent of an Event of Default, to the Agent
an up to date balance sheet drawn-up by its auditors or any other
reputable firm of auditors together with a determination of the Net Assets
by the respective auditors. The balance sheet and determination of Net
Assets shall be prepared in accordance with accounting principles pursuant
to the German Commercial Code (Handelsgesetzbuch) and be based on the same
principles that were applied when establishing the previous year's balance
sheet.
(e) Should the Guarantor fail to deliver such balance sheet and/or
determination of the Net Assets within the 30 Business Day period referred
to above or if the Guarantor has generally ceased to make payments or upon
filing of an application for insolvency proceedings by the Guarantor, the
Agent shall be entitled to enforce the Guarantee, without the enforcement
limitations provided for above applying at the time of such enforcement,
but is obliged to retransfer proceeds from such enforcement to the extent
that the Guarantor demonstrates in reasonable detail that the enforcement
of this Guarantee violated the rules on preservation of the stated share
capital under sections 30,31 GmbH-Act as set out in paragraph (a)-(c)
above by resulting or enhancing negative assets (Unterblilanz) of the
Guarantor.
(f) This Guarantee shall further not be enforced to the extent that the
Guarantor demonstrates in reasonable detail that such enforcement would
lead to a breach of the Gebot der Rucksichtnahme auf die Eigenbelange der
Gesellschaft (duty of care owing by the relevant shareholders vis-a-vis
the respective company) and of the Verbot des existenzvernichtenden
Eingriffs (prohibition of insolvency-causing intervention), as developed
by the recent jurisdiction (in particular BGH II ZR ▇▇▇/▇▇ "▇▇▇▇▇▇
▇▇▇▇▇▇", ▇▇▇ II ZR 196/00 and BGH II ZR 300/00 "KBV"), of the Federal
Supreme Court (Bundesgerichtshof), caused for example, as far as this
would be within the scope of the cited court ruling, if the entering into
the Guarantee and its enforcement results in the illiquidity
(Zahlungsunfahigkeit) of the Guarantor. The Agent shall be obliged to
retransfer proceeds from such enforcement to the extent that the Guarantor
demonstrates in reasonable detail that the enforcement of the Guarantee
violated the rules of the cited Federal Supreme Court rulings. Otherwise,
any claim for damages to the Agent (excluding, for the avoidance of doubt,
any claim relating to unjust enrichment) by the Guarantor, any
shareholders of the Guarantor or its managing directors shall be excluded.
(g) The guarantee of any Additional Guarantor is subject to any limitations
relating to that Additional Guarantor set out in any relevant Accession
Letter and in the case of each Additional Guarantor incorporated in
Belgium (an "ADDITIONAL BELGIAN GUARANTOR") paragraph (c) will apply.
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(h) With respect to the obligations of any Obligor, the Additional Belgian
Guarantor's liability under this Clause 17 (Guarantee and Indemnity) shall
be limited, at any time, to a maximum aggregate amount equal to the
greater of:
(i) an amount equal to 90% of such Additional Belgian Guarantor's net
assets (as determined in accordance with the Belgian Companies Code
and accounting principles generally accepted in Belgium, but not
taking intra-groups debts into account as debts) as shown by its
then most recent audited annual financial statements; and
(ii) the aggregate of (a) the principal amount borrowed by such
Additional Belgian Guarantor pursuant to this Agreement and (b) any
intra-group loans or facilities made to it by any other member of
the Group (whether or not such intra-group loan is retained by the
relevant Guarantor for its own purposes or on-lent to another Group
company) it being understood that the amount of each loan will only
be counted once when calculating the aggregate amount of all loans.
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SECTION 8
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
18. REPRESENTATIONS
Each Obligor or (if it so states) the Company makes the representations
and warranties set out in this Clause 18 to each Finance Party on the
dates set out in Clause 18.27 (Times when representations made) (in the
case of any Obligor other than the Company, only in relation to itself
and, to the extent expressed to be applicable to them, its Material
Subsidiaries and/or other Subsidiaries (if any)).
18.1 STATUS
(a) It is a limited liability company or corporation, duly incorporated and
validly existing under the law of its jurisdiction of incorporation.
(b) It has the power to own its assets and carry on its business as it is
being, and is proposed to be, conducted.
18.2 BINDING OBLIGATIONS
The obligations expressed to be assumed by it in each Finance Document to
which it is or will be a party are legal, valid, binding and enforceable,
subject to:
(a) any applicable Reservations; or
(b) in the case of any Security Document, any applicable Perfection
Requirements.
18.3 NON-CONFLICT WITH OTHER OBLIGATIONS
The entry into and performance by it of, and the transactions contemplated
by, the Finance Document do not conflict with:
(a) any material law or regulation applicable to it;
(b) its or any of its Subsidiaries' constitutional documents; or
(c) any agreement or instrument binding upon it or any of its
Subsidiaries or any of its or any of its Subsidiaries' assets or
constitute a default or termination event (however described), in
each case to the extent that it would reasonably be expected to have
a Material Adverse Effect.
18.4 POWER AND AUTHORITY
It has the power to enter into, perform and deliver, and has taken all
necessary action to authorise its entry into, performance and delivery of,
the Finance Documents to which it is or will be a party and the
transactions contemplated by the Finance Documents.
18.5 VALIDITY AND ADMISSIBILITY IN EVIDENCE
All necessary Authorisations required:
(a) to enable it lawfully to enter into, exercise its rights and comply
with its obligations in the Finance Documents to which it is a party
and the transactions contemplated by the Finance Documents;
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(b) to make the Finance Documents to which it or any of its Subsidiaries
is a party admissible in evidence in its Relevant Jurisdiction,
subject to any applicable Reservations; and
(c) to enable it to create the Security purported to be created by it or
any of its Subsidiaries pursuant to any Security Document and,
subject to any applicable Reservations, to ensure that such Security
has the priority and ranking it is expressed to have,
have been obtained or effected and are in full force and effect, save for
complying with any applicable Perfection Requirements.
18.6 GOVERNING LAW AND ENFORCEMENT
Subject to any applicable Reservations:
(a) the choice of law specified in each Finance Document as the
governing law of that Finance Document will be recognised and
enforced in its Relevant Jurisdiction; and
(b) any judgment obtained in England in relation to a Finance Document
(or in the jurisdiction of the governing law of that Finance
Document) will be recognised and enforced in its Relevant
Jurisdiction and, in relation to a Finance Document governed by a
law other than English law, in the jurisdiction of the governing law
of that Finance Document.
18.7 DEDUCTION OF TAX
Provided that each Lender is a Qualifying Lender it is not required to
make any deduction for or on account of Tax from any payment it may make
under any Finance Document.
18.8 NO FILING OR STAMP TAXES
Under the law of its Relevant Jurisdiction it is not necessary that the
Finance Documents be filed, recorded or enrolled with any court or other
authority in that jurisdiction or that any stamp, registration, notarial
or similar taxes or fees be paid on or in relation to the Finance
Documents or the transactions contemplated by the Finance Documents except
for:
(a) in each case for complying with any applicable Perfection
Requirements;
(b) Belgian stamp duties of EUR 0.15 payable on any loan or credit
agreement and any pledge agreement drafted and executed in Belgium,
subject to the conditions of the Belgian Stamp Duties Code (Code des
droits de timbre/Wetboek Zegelrechten) of 26 June 1947, as amended;
and
(c) notarial fees payable in connection with the notarisation of certain
Security Documents governed by German law.
18.9 NO DEFAULT
(a) No Event of Default is continuing or would reasonably be expected to
result from the making of any Utilisation or the entry into, performance
of, or any transaction contemplated by, any Finance Document.
(b) No other event or circumstance is outstanding which constitutes (or which
would, with the lapse of time, the giving of notice, the making of any
determination under the relevant document or any combination of the
foregoing, constitute) a default or termination event (however described)
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under any other agreement or instrument which is binding on it or any of
its Subsidiaries or to which its (or any of its Subsidiaries') assets are
subject which would reasonably be expected to have a Material Adverse
Effect.
18.10 NO BREACH OF LAW
It has not (and none of its Subsidiaries has) breached any law or
regulation which breach has, or would reasonably be expected to have, a
Material Adverse Effect.
18.11 INFORMATION PACKAGE
In the case of the Company and the Borrower only:
(i) Any written factual information in the Information Package was true
and accurate in all material respects as at the date it was provided
or as at the date (if any) at which it is stated.
(ii) Any financial projections in the Information Package have been
prepared on the basis of recent historical information and on the
basis of assumptions believed by the Company to be fair and
reasonable at the time of such preparation.
(iii) Any expressions of opinion or intention provided by or on behalf of
any member of the Group in connection with the Information Package,
were made after due and careful consideration and based on
reasonable grounds.
(iv) As at the date of this Agreement, nothing has occurred or been
omitted from the Information Package and no information has been
given or withheld that, if disclosed, would result in:
(A) any factual information in the Information Package being
untrue or misleading in any material respect; or
(B) any assumption or ground on which any financial projection or
expression of opinion or intention in the Information Package
is based being unreasonable.
18.12 FINANCIAL STATEMENTS
(a) Its Original Financial Statements were prepared in accordance with the
Applicable Accounting Principles except as disclosed in any notes to the
Original Financial Statements.
(b) Its Original Financial Statements fairly represent its financial condition
and operations as at the end of and for the relevant financial year except
as disclosed in any notes to the Original Financial Statements.
(c) As at the date of this Agreement, there has been no material adverse
change in its assets, business or financial condition (or, in the case of
the Company, the assets, business or financial condition of the Group)
since 31 March 2006.
(d) The financial year end of each member of the Group is 31 December.
(e) The Business Plan was prepared in accordance with Applicable Accounting
Principles except as otherwise agreed between the Company and the Agent
and financial reference periods of the Company consistently applied as at
the date of this Agreement.
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18.13 PARI PASSU RANKING
Subject to any applicable Reservations, without limiting Clause 18.15
(Security) below, its payment obligations under the Finance Documents rank
at least pari passu with the claims of all its other unsecured and
unsubordinated creditors, except for obligations mandatorily preferred by
law applying to companies generally.
18.14 NO PROCEEDINGS PENDING OR THREATENED
(a) No litigation, arbitration or administrative proceedings of or before any
court, arbitral body or agency including, but not limited to,
investigative proceedings (including any arising from or relating to
Environmental Law) which could reasonably be expected to be adversely
determined and, if so determined, would reasonably be expected to have a
Material Adverse Effect have been started or (to the best of its knowledge
and belief) threatened in writing against it or any of its Subsidiaries.
18.15 SECURITY
(a) Subject to any applicable Perfection Requirements and any applicable
Reservations, each Security Document creates (or, once entered into, will
create) in favour of the Security Agent, the Security which it is
expressed to create fully perfected and with the ranking and priority it
is expressed to have.
(b) Subject to Clause 21.27 (Amendment to articles of association of CP Films)
the constitutional documents of any member of the Group do not and would
not restrict or inhibit in any manner any transfer of any shares of any
member of the Group which are expressed to be (or are required by this
Agreement to be or become) subject to any Security under any Security
Document.
18.16 ASSETS
It and each of its Subsidiaries has good and marketable title to, or valid
leases or licences of, or is otherwise entitled to use (in each case, on
arm's length terms), all material assets necessary for the conduct of its
business as it is being, and is proposed to be, conducted.
18.17 ENVIRONMENTAL LAWS AND LICENCES
It and each of its Subsidiaries has:
(a) complied with all Environmental Laws to which it may be subject;
(b) all Environmental Licences required in connection with its business;
and
(c) complied with the terms of those Environmental Licences,
in each case where failure to do so would reasonably be expected to have a
Material Adverse Effect.
18.18 GROUP STRUCTURE
(a) The Group Structure Chart shows:
(i) each member of the Group and any person in whose shares any member
of the Group has an interest (and the percentage of the issued share
capital held, and whether legally or beneficially, by that member)
as at the date of this Agreement;
(ii) the jurisdiction of incorporation or establishment of each person
shown in it; and
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(iii) the status of each person shown in it which is not a limited
liability company or corporation.
(b) Each Obligor other than the Company is directly or indirectly a
wholly-owned Subsidiary of the Company.
(c) The Company does not own any of the shares in Flexsys other than 50% of
the preference shares nor holds voting rights which would mean Flexsys
would fall within the definition of being a subsidiary of the Company.
18.19 NO FINANCIAL INDEBTEDNESS, GUARANTEES OR SECURITY
(a) No member of the Group has any Financial Indebtedness other than Permitted
Financial Indebtedness.
(b) No member of the Group has issued any guarantee other than a Permitted
Guarantee.
(c) No Security or Quasi Security exists over all or any of its (or any of its
Subsidiaries') assets other than Permitted Security.
18.20 SHARES
(a) The shares of any member of the Group which are expressed to be (or are
required by this Agreement to be or become) subject to any Security under
any Security Document are issued, fully paid, freely transferable other
than as provided in the articles of association of the Borrower as
delivered pursuant to Clause 4.1 (Initial conditions precedent) and
subject to Clause 21.27 (Amendment to articles of association of CP Films)
and constitute shares in the capital of limited liability companies, and
there are no moneys or liabilities outstanding or payable in respect of
any such share.
(b) No person has or is entitled to any conditional or unconditional option,
warrant or other right to call for the issue or allotment of, subscribe
for (other than pursuant to the existing security over the shares in the
Company expressly disclosed in paragraphs 2.2(a)(v), 2.2(b)(i) and
2.2(b)(ii) of the Due Diligence Report, purchase or otherwise acquire any
share capital of any member of the Group (including any right of
pre-emption, conversion or exchange).
(c) Except in connection with any Permitted Share Transaction, there are no
agreements in force or corporate resolutions passed which require or are
reasonably expected to require the present or future issue or allotment of
any share capital of any Obligor (including any option or right of
pre-emption, conversion or exchange).
(d) The shares of any member of the Group which are expressed to be (or are
required by this Agreement to be or become) subject to any Security under
any Security Document constitute all the share capital of the relevant
member of the Group except for one share in the Borrower which is owned by
Solutia, Inc..
18.21 INTELLECTUAL PROPERTY
(a) Each member of the Group owns or has valid license to all material
Intellectual Property necessary for the conduct of its business as it is
being, and is proposed to be, conducted.
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(b) Each member of the Group has paid all necessary fees and is in compliance
with all material terms of any such licence to the extent necessary to
preserve its ability to use and enforce all such Intellectual Property.
(c) No member of the Group has infringed any material Intellectual Property of
any third party in any material respect.
(d) To the best of the Company's knowledge and belief, there has been no
material infringement or threatened or suspected infringement of or
challenge to the validity of any Intellectual Property owned by or
licensed to any member of the Group.
18.22 SOLVENCY
No Event of Default set out in Clause 22.6 (Insolvency), Clause 22.7
(Insolvency proceedings) or Clause 22.8 (Creditors process) has occurred
and is continuing.
18.23 TAXES
(a) Each member of the Group has paid all Taxes required to be paid by it
within the time period allowed for payment without incurring any penalties
for non payment other than any Taxes:
(i) being contested by it in good faith and in accordance with the
relevant procedures;
(ii) which have been disclosed to the Arranger and for which adequate
reserves are being maintained in accordance with GAAP; and
(iii) where payment can be lawfully withheld and will not result in the
imposition of any penalty nor in any Security (other than paragraph
(l) of the definition of Permitted Security) ranking in priority to
the claims of any Finance Party under any Finance Document or to any
Security created under any Security Document.
For the avoidance of doubt, this does not include any payment or penalties
incurred prior to the date of this Agreement to the extent those
liabilities have been discharged and there is no longer a dispute with the
relevant taxation authority.
(b) No Finance Party is or will be deemed to be resident, domiciled or
carrying on business in its Relevant Jurisdiction by reason only of the
execution, performance and/or enforcement of any Finance Document or
Hedging Document.
18.24 PENSIONS
(a) No member of the Group has any material liability in respect of any
pension scheme and there are no circumstances which would give rise to
such a liability which would reasonably be expected to have a Material
Adverse Effect.
(b) No member of the Group is in breach of any applicable material laws
relating to and the governing provisions of the pension schemes maintained
by or for the benefit of any member of the Group and/or any of its
employees which would reasonably be expected to have a Material Adverse
Effect.
18.25 INSURANCES
(a) The insurances required by Clause 21.22 (Insurance) are in full force and
effect as required by this Agreement.
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(b) To the best of the Company's knowledge and belief (following all
reasonable enquiries), no event or circumstance has occurred, and there
has been no failure to disclose a fact, which would entitle any insurer to
reduce or avoid its liability under any such insurance where such event,
circumstance or failure would reasonably be expected to have a Material
Adverse Effect.
18.26 MASTER OPERATING AGREEMENT
The Security created pursuant to any Security Document does not violate
the terms and conditions of the Master Operating Agreement it being
understood that the Belgian floating charge agreement and any floating
charge granted upon exercise of the Belgian floating charge mandate shall
not include a pledge of the Company's rights under the Master Operating
Agreement, to the extent such pledge would violate the Master Operating
Agreement.
18.27 TIMES WHEN REPRESENTATIONS MADE
(a) The representations and warranties set out in this Clause 18 (except for
Clause 18.11 (Information Package) are:
(i) made by each Original Obligor on the date of this Agreement;
(ii) deemed to be made by each Obligor on the Closing Date by reference
to the facts and circumstances then existing (unless otherwise
stated).
(b) The representations and warranties set out in Clause 18.11 (Information
Package) are deemed to be made by each Obligor:
(i) with respect to the Information Memorandum, on the date on which the
Information Memorandum is approved by the Company and the
Syndication Date;
(ii) with respect to the Reports, on the Closing Date and the Syndication
Date;
(iii) with respect to the Business Plan, the date of this Agreement, the
Closing Date and the Syndication Date; and
(iv) with respect to each Budget (other than the Business Plan), the date
on which it is approved by the Company,
in each case by reference to the facts and circumstances then existing.
(c) The Repeating Representations (and, in the case of sub-paragraph (ii)
below, the representations and warranties set out in Clause 18.8 (Validity
and admissibility in evidence) and Clause 18.7 (No filing or stamp taxes))
are deemed to be made by each Obligor on:
(i) the date of each Utilisation Request and the first day of each
Interest Period; and
(ii) in the case of an Additional Guarantor, the day on which the company
becomes (or it is proposed that the company becomes) an Additional
Guarantor,
in each case by reference to the facts and circumstances then existing.
19. INFORMATION UNDERTAKINGS
The undertakings in this Clause 19 remain in force from the date of this
Agreement for so long as any amount is outstanding under the Finance
Documents or any Commitment is in force.
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19.1 ANNUAL FINANCIAL STATEMENTS
The Company shall supply to the Agent in sufficient copies for all the
Lenders as soon as the same become available, but in any event:
(a) within 120 days after the end of its financial years, its audited
consolidated financial statements for that financial year
(commencing with the financial year ended 31 December 2006); and
(b) within 150 days after the end of each of its financial years, the
audited financial statements of each Obligor for that financial year
if requested by the Agent (acting on the instructions of any
Lender).
19.2 QUARTERLY FINANCIAL STATEMENTS
(a) The Company shall supply to the Agent in sufficient copies for all the
Lenders as soon as the same become available its consolidated financial
statements:
(i) within 45 days of the end of the Accounting Quarters ending on or
about 31 March, 30 June and 30 September in any financial year; and
(ii) within 60 days of the end of the Accounting Quarter ending on or
about 31 December in any financial year.
(b) Each set of quarterly financial statements delivered pursuant to paragraph
(a) above shall include:
(i) a consolidated cash flow statement and profit and loss account for
the relevant Accounting Quarter and for the financial year to date;
(ii) a consolidated balance sheet as at the end of the relevant
Accounting Quarter;
(iii) a comparison with the corresponding Accounting Quarter, and the year
to date performance, in the previous year; and
(iv) management commentary on the Group's performance during the relevant
Accounting Quarter and any material developments or proposals
affecting the Group or its business.
19.3 MONTHLY FINANCIAL STATEMENTS
(a) Commencing from and including the third Month after the Closing Date and
for so long as and at any time that, the Company delivers a Compliance
Certificate in accordance with the terms of this Agreement which shows the
ratio of Net Borrowings to EBITDA to be greater than or equal to 2.5:1,
the Company shall supply to the Agent in sufficient copies for all the
Lenders as soon as the same become available, but in any event within 30
days after the end of each Accounting Month its monthly internal
management information for that Accounting Month.
(b) Each set of monthly internal management information delivered pursuant to
paragraph (a) above shall be in a format agreed with the Facility Agent
prior to the Closing Date.
19.4 COMPLIANCE CERTIFICATE
(a) The Company shall supply to the Agent, with each set of financial
statements delivered pursuant to paragraph (a) of Clause 19.1 (Annual
financial statements) or Clause 19.2 (Quarterly financial statements) a
Compliance Certificate which shall:
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(i) set out (in reasonable detail) computations as to compliance with
Clause 20 (Financial covenants) and Clause 21.20 (Security and
guarantees) as at, or, as the case may be, in respect of the
Relevant Period ending on the date as at which those financial
statements were drawn up; and
(ii) confirm that no Default is continuing (or if a Default is
continuing, specify the Default and the steps being taken to remedy
it).
(b) If required to be delivered with the financial statements delivered
pursuant to paragraph (a) of Clause 19.1 (Annual financial statements),
the Compliance Certificate shall also:
(i) set out (in reasonable detail) the computation of Excess Cash Flow
and Retained Cash (noting to the extent it has been applied or
committed to be applied in accordance with this Agreement for a
specific purpose) for that financial year;
(ii) set out (in reasonable detail) computations as to compliance with
Clause 20.2 (Capital Expenditure) during that financial year;
(iii) include a reconciliation of the audited financial statements of the
Group for that financial year and the management accounts of the
Group as at the end of that financial year; and
(iv) set out the Material Subsidiaries and (in reasonable detail)
computations for the determination of which members of the Group are
Material Subsidiaries.
(c) Each Compliance Certificate shall be signed by two directors of the
Company and, if required to be delivered with the financial statements
delivered pursuant to paragraph (a) of Clause 19.1 (Annual financial
statements), shall be reported on by the Company's auditors in the Agreed
Form.
19.5 REQUIREMENTS AS TO FINANCIAL STATEMENTS
(a) Each set of financial statements delivered by the Company pursuant to
Clause 19.1 (Annual financial statements), Clause 19.2 (Quarterly
financial statements) or Clause 19.3 (Monthly financial statements) shall
be certified by a director of the relevant company as fairly representing
its (or, as the case may be, its consolidated) financial condition and
operations as at the end of and for the period in relation to which those
financial statements were drawn up.
(b) The Company shall procure that each set of financial statements of an
Obligor delivered pursuant to Clause 19.1 (Annual financial statements),
Clause 19.2 (Quarterly financial statements) or Clause 19.3 (Monthly
financial statements) is prepared deconsolidating Permitted Non-Recourse
Subsidiaries.
(c) The Company shall procure that each set of financial statements of an
Obligor delivered pursuant to Clause 19.1 (Annual financial statements),
Clause 19.2 (Quarterly financial statements) or Clause 19.3 (Monthly
financial statements) is prepared using GAAP, accounting practices and
financial reference periods in each case consistent with the Applicable
Accounting Principles unless, in relation to any set of financial
statements, it notifies the Agent that there has been a change in GAAP,
the accounting practices or reference periods or its auditors (or, if
appropriate, the auditors of the Obligor) deliver to the Agent:
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(i) a description of any change necessary for the relevant financial
statements to reflect the Applicable Accounting Principles; and
(ii) sufficient information, in form and substance as may be reasonably
required by the Agent, to enable the Lenders to determine whether
Clause 20 (Financial covenants) has been complied with, to calculate
the Excess Cash Flow, to determine any other relevant matter and/or
to make an accurate comparison between the financial position
indicated in those financial statements and that Obligor's Original
Financial Statements.
Any reference in this Agreement to those financial statements shall be
construed as a reference to those financial statements as adjusted to
reflect the Applicable Accounting Principles.
(d) If the Company notifies the Agent of a change in accordance with paragraph
(b) of this Clause 19.6 the Company and the Agent shall enter into
negotiations in good faith with a view to agreeing any amendments to this
Agreement which are necessary as a result of the change. To the extent
practicable these amendments will be such as to ensure that the change
does not result in any material alteration in the commercial effect of the
obligations in this Agreement. If any amendments are agreed they shall
take effect and be binding on each of the Parties in accordance with their
terms.
19.6 ANNUAL BUDGET
(a) The Company shall supply to the Agent in sufficient copies for all the
Lenders as soon as the same becomes available, but in any event no later
than the start of each of its financial years, a Budget in respect of that
next financial year in the Agreed Form.
(b) Each Budget shall include:
(i) a projected consolidated cash flow statement and profit and loss
account of the Group for that financial year; and;
(ii) a management commentary on:
(A) the proposed activities of the Group during that year
(including material Capital Expenditure investments,
acquisitions and disposals proposed during that year);
(B) the principal assumptions underlying the projections in that
Budget; and
(C) any material variations to the Base Case during that year.
(c) The Company shall supply to the Agent in sufficient copies for all the
Lenders an updated Budget promptly upon becoming aware of any material
change to the projections in the then most recent Budget.
19.7 PRESENTATIONS
(a) If requested by the Agent (acting on the instructions of the Majority
Lenders), the directors of the Company shall give a presentation to the
Lenders, at such time and place as the Agent may reasonably request, about
the business, financial performance and prospects of the Group, and such
other matters as any Finance Party (through the Agent) may reasonably
request. The Agent (acting on the instructions of the Majority Lenders)
may not request more than one presentation in any financial year, unless
an Event of Default is continuing.
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19.8 INFORMATION: MISCELLANEOUS
The Company shall supply to the Agent (in sufficient copies for all the
Lenders, if the Agent so requests):
(a) at the same time as they are dispatched, copies of all documents
dispatched by the Company to its shareholders, in their capacity as
shareholders generally (or any class of them) or its creditors
generally (or any class of them);
(b) promptly upon becoming aware of them, the details of any litigation,
arbitrations or administrative proceedings which are current,
threatened in writing or pending against any member of the Group or
any Restricted Person, which could reasonably be expected to be
adversely determined and which, if so determined, would reasonably
be expected to have a Material Adverse Effect;
(c) promptly upon becoming aware of them, the details of any litigation,
arbitration or administrative proceedings which are current, pending
or threatened, and any claim, notice or other communication received
by it in respect of any actual or alleged breach or liability or any
notice of acceleration, enforcement or similar steps, which relates
to the Security in Belgium granted in respect of the Euro Notes.
(d) promptly upon becoming aware of them, the details of any litigation,
arbitration or administrative proceedings which are current, pending
or threatened in writing, and any claim, notice or other
communication in respect of any actual or alleged breach or
liability, relating to the DIP Financing (or any replacement to the
DIP Financing);
(e) promptly upon becoming aware of them, the details of any material
labour dispute affecting any member of the Group which could
reasonably be expected to be adversely determined and which, if so
determined, would reasonably be expected to have a Material Adverse
Effect;
(f) promptly upon becoming aware of them, the details of any claim,
notice or other written communication received by it in respect of
any actual or alleged breach of or liability under Environmental
Law, or any event or circumstance which is likely to result in any
such claim or notice, which could reasonably be expected to be
substantiated and which, if substantiated, would reasonably be
expected to have a Material Adverse Effect;
(g) promptly upon becoming aware of them, any change in the structure of
the Group from that set out in the Group Structure Chart which is or
would reasonably be expected to be adverse to the interests of the
Finance Parties;
(h) promptly upon becoming aware of them, the details of any claim
and/or potential claim for an amount in excess of (euro)3,000,000
(or its equivalent in another currency or currencies) in aggregate
made by or on behalf of any member of the Group under any insurance
policy;
(i) promptly such further information regarding the financial condition
or the business of any member of the Group as any Finance Party
(through the Agent) may reasonably request.
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19.9 NOTIFICATION OF EVENT OF DEFAULT
(a) Each Obligor shall notify the Agent of any Event of Default (and the
steps, if any, being taken to remedy it) promptly upon becoming aware of
its occurrence (unless that Obligor is aware that a notification has
already been provided by another Obligor).
(b) Promptly upon a request by the Agent, the Company shall supply to the
Agent a certificate signed by two of its directors on its behalf
certifying that no Event of Default is continuing (or if an Event of
Default is continuing, specifying the Event of Default and the steps, if
any, being taken to remedy it).
19.10 INSPECTION OF BOOKS AND RECORDS
(a) Each Obligor shall (and the Company shall ensure that each member of the
Group will):
(i) keep books and records which accurately reflect in all material
respects all of its business, affairs and transactions; and
(ii) following the occurrence of an Event of Default and upon reasonable
notice, permit any Finance Party to visit any of its offices during
normal working hours, to inspect any of its books and records and to
discuss its financial matters with its officers and auditors. The
cost and expense of each such visit shall be borne by the Company.
(b) If requested by the Agent, each Obligor shall authorise and/or (as the
case may be) engage its auditors and/or any of the firms which prepared
the Reports to discuss any matter with any of the Finance Parties on terms
and conditions acceptable to the Agent (acting reasonably).
19.11 AUDITORS
(a) Subject to paragraph (b), the Company shall ensure that the same
internationally recognised "big four" firm of accountants is appointed as
its auditors and the auditors of each other member of the Group, with the
exception of CPFilms Vertriebs GmbH which may continue to use its existing
firm of accountants as auditors.
(b) No Obligor shall (and the Company shall ensure that no other member of the
Group will) change its auditors without the consent of the Majority
Lenders.
(c) The Company shall ensure that the financial year end of the Group and each
member of the Group is 31 December.
(d) No Obligor shall (and the Company shall ensure that no other member of the
Group will) change its financial year end or the end of its Accounting
Quarter or Accounting Month without the consent of the Majority Lenders.
19.12 INVESTIGATIONS
(a) The Agent (acting reasonably) may (no more than once in any calendar year
or at any time following the occurrence of an Event of Default which is
continuing) require the Company to instruct the auditors of the Company
(or such other internationally recognised "big four" firm of accountants
as the Agent selects) to investigate the affairs, financial performance or
accounting and other reporting procedures and standards of the Group.
The cost and expense of each such investigation or report shall be borne
by the Company.
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(b) Each Obligor shall (and the Company shall ensure that each other member of
the Group will) co-operate fully with any person carrying out an
investigation or preparing a report pursuant to paragraph (a) above.
19.13 USE OF WEBSITES
(a) The Company may satisfy its obligation under this Agreement to deliver any
information in relation to those Lenders (the "WEBSITE LENDERS") who
accept this method of communication by posting this information onto an
electronic website designated by the Company and the Agent (the
"DESIGNATED WEBSITE") if:
(i) the Agent expressly agrees (after consultation with each of the
Lenders) that it will accept communication of the information by
this method;
(ii) both the Company and the Agent are aware of the address of and any
relevant password specifications for the Designated Website; and
(iii) the information is in a format previously agreed between the Company
and the Agent.
If any Lender (a "PAPER FORM LENDER") does not agree to the delivery of
information electronically then the Agent shall notify the Company
accordingly and the Company shall supply the information to the Agent (in
sufficient copies for each Paper Form Lender) in paper form. In any event
the Company shall supply the Agent with at least one copy in paper form of
any information required to be provided by it.
(b) The Agent shall supply each Website Lender with the address of and any
relevant password specifications for the Designated Website following
designation of that website by the Company and the Agent.
(c) The Company shall promptly upon becoming aware of its occurrence notify
the Agent if:
(i) the Designated Website cannot be accessed due to technical failure;
(ii) the password specifications for the Designated Website change;
(iii) any new information which is required to be provided under this
Agreement is posted onto the Designated Website;
(iv) any existing information which has been provided under this
Agreement and posted onto the Designated Website is amended; or
(v) the Company becomes aware that the Designated Website or any
information posted onto the Designated Website is or has been
infected by any electronic virus or similar software.
If the Company notifies the Agent under sub-paragraph (i) or sub-paragraph
(v) above, all information to be provided by the Company under this
Agreement after the date of that notice shall be supplied in paper form
unless and until the Agent and each Website Lender is satisfied that the
circumstances giving rise to the notification are no longer continuing.
(d) Any Website Lender may request, through the Agent, one paper copy of any
information required to be provided under this Agreement which is posted
onto the Designated Website. The Company shall comply with any such
request within ten Business Days.
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19.14 "KNOW YOUR CUSTOMER" CHECKS
(a) If:
(i) the introduction of or any change in (or in the interpretation,
administration or application of) any law or regulation made after
the date of this Agreement;
(ii) any change in the status of an Obligor after the date of this
Agreement; or
(iii) a proposed assignment or transfer by a Lender of any of its rights
and obligations under this Agreement to a party that is not a Lender
prior to such assignment or transfer,
obliges the Agent or any Lender (or, in the case of sub-paragraph (iii)
above, any prospective new Lender) to comply with "know your customer" or
similar identification procedures in circumstances where the necessary
information is not already available to it, each Obligor shall promptly
upon the request of the Agent or any Lender supply, or procure the supply
of, such documentation and other evidence as is reasonably requested by
the Agent (for itself or on behalf of any Lender) or any Lender (for
itself or, in the case of the event described in sub-paragraph (iii)
above, on behalf of any prospective new Lender) in order for the Agent,
such Lender or, in the case of the event described in sub-paragraph (iii)
above, any prospective new Lender to carry out and be satisfied it has
complied with all necessary "know your customer" or other similar checks
under all applicable laws and regulations pursuant to the transactions
contemplated in the Finance Documents.
(b) Each Lender shall promptly upon the request of the Agent supply, or
procure the supply of, such documentation and other evidence as is
reasonably requested by the Agent (for itself) in order for the Agent to
carry out and be satisfied it has complied with all necessary "know your
customer" or other similar checks under all applicable laws and
regulations pursuant to the transactions contemplated in the Finance
Documents.
(c) The Company shall, by not less than 10 Business Days' prior written notice
to the Agent, notify the Agent (which shall promptly notify the Lenders)
of its intention to request that one of its Subsidiaries becomes an
Additional Obligor pursuant to Clause 24 (Changes to the Obligors).
(d) Following the giving of any notice pursuant to paragraph (c) above, if the
accession of such Additional Obligor obliges the Agent or any Lender to
comply with "know your customer" or similar identification procedures in
circumstances where the necessary information is not already available to
it, the Company shall promptly upon the request of the Agent or any Lender
supply, or procure the supply of, such documentation and other evidence as
is reasonably requested by the Agent (for itself or on behalf of any
Lender) or any Lender (for itself or on behalf of any prospective new
Lender) in order for the Agent or such Lender or any prospective new
Lender to carry out and be satisfied it has complied with all necessary
"know your customer" or other similar checks under all applicable laws and
regulations pursuant to the accession of such Subsidiary to this Agreement
as an Additional Obligor.
19.15 NO PERSONAL LIABILITY
No director, officer or employee of the Company or any other member of the
Group shall be personally liable for any statement made by it in any
certificate or other document as required to be delivered pursuant to any
Finance Party pursuant to the Finance Documents.
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20. FINANCIAL COVENANTS
20.1 FINANCIAL CONDITION
Commencing in and including the Relevant Period to 31 December 2006, the
Company shall ensure that:
(a) the ratio of EBITDA to Net Interest Expense for each Relevant Period
ending on a Relevant Date set out in the table below will not be
less than the ratio set out in the relevant column in the table
below opposite that Relevant Date;
(b) the ratio of Net Borrowings on each Relevant Date set out in the
table below to EBITDA for the Relevant Period ending on that
Relevant Date will not exceed the ratio set out in the relevant
column in the table below opposite that Relevant Date;
(c) the ratio of Cash Flow to Debt Service for each Relevant Period
ending on a Relevant Date set out in the table below will not be
less than 1:1.
---------------------------------------------------------------------------------
RELEVANT DATE NET BORROWINGS / EBITDA EBITDA / NET INTEREST EXPENSE
---------------------------------------------------------------------------------
31 December 2006 3.10 : 1 3.90 : 1
31 March 2007 3.10 : 1 3.90 : 1
30 June 2007 3.10 : 1 3.90 : 1
30 September 2007 3.10 : 1 3.90 : 1
31 December 2007 2.65 : 1 3.95 : 1
31 March 2008 2.65 : 1 3.95 : 1
30 June 2008 2.65 : 1 3.95 : 1
30 September 2008 2.65 : 1 3.95 : 1
31 December 2008 2.00 : 1 4.30 : 1
31 March 2009 2.00 : 1 4.30 : 1
30 June 2009 2.00 : 1 4.30 : 1
30 September 2009 2.00 : 1 4.30 : 1
31 December 2009 2.00 : 1 4.95 : 1
31 March 2010 2.00 : 1 4.95 : 1
30 June 2010 2.00 : 1 4.95 : 1
30 September 2010 2.00 : 1 4.95 : 1
31 December 2010 2.00 : 1 5.00 : 1
31 March 2011 2.00 : 1 5.00 : 1
30 June 2011 2.00 : 1 5.00 : 1
30 September 2011 2.00 : 1 5.00 : 1
31 December 2011 2.00 : 1 5.00 : 1
---------------------------------------------------------------------------------
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20.2 CAPITAL EXPENDITURE
(a) No Obligor shall (and the Company shall ensure that no other member of the
Group will) in any financial year of the Company set out in column (1)
below incur Capital Expenditure if as a result the aggregate amount of
Capital Expenditure of the Group in that financial year would exceed the
aggregate of (i) the amount set out in column (2) below opposite that
financial year and (ii) any Retained Cash (to the extent it has not
already been applied or committed to be applied in accordance with this
Agreement for another purpose) for that financial year.
(1) (2)
FINANCIAL YEAR TO AMOUNT IN (EURO)
31 December 2007 13,300,000
31 December 2008 7,500,000
31 December 2009 6,000,000
31 December 2010 24,900,000
31 December 2011 12,500,000
(b) If the Capital Expenditure incurred in any financial year of the Company
set out in column (1) in paragraph (a) above is less than the amount set
out in column (2) in paragraph (a) above opposite that financial year, to
the extent that the shortfall could have been incurred in that financial
year without breaching any term of this Agreement then 50 per cent. of
that shortfall may be carried forward to the subsequent financial year of
the Company only and added to the maximum Capital Expenditure set out in
column (2) in paragraph (a) above for that subsequent financial year.
(c) If any shortfall is carried forward to any subsequent financial year under
paragraph (b) above, in that subsequent financial year any Capital
Expenditure incurred up to the amount set out in column (2) in paragraph
(a) above opposite that financial year shall be treated as incurred before
any Capital Expenditure incurred up to the amount of any such shortfall.
(d) If any shortfall carried forward to any subsequent financial year under
paragraph (c) above is not spent in that subsequent financial year it
shall cease to be available.
20.3 FINANCIAL COVENANT CALCULATIONS
(a) Capital Expenditure, Cash Flow, Debt Service, EBITDA, Interest Expense,
Net Borrowings, Net Interest Expense, Total Borrowings and Working Capital
shall be calculated and interpreted on a consolidated basis in accordance
with the Applicable Accounting Principles and shall be expressed in euro.
(b) Subject to paragraph (c) below, Capital Expenditure, Cash Flow, EBITDA,
Interest Expense, Net Interest Expense and Working Capital shall be
determined (except as needed to reflect the
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terms of this Clause 20) from the financial statements of the Group and
Compliance Certificates delivered under Clause 19.1 (Annual financial
statements), Clause 19.2 (Quarterly financial statements), and Clause 19.4
(Compliance Certificate).
(c) In respect of the Relevant Periods ending on each of 31 December 2006, 31
March 2007 and 30 June 2007, Interest Expense and Net Interest Expense
shall each be calculated on a pro forma basis to the extent applicable as
if the Facilities had been utilised in full on the date of commencement of
each such Relevant Period with the exception that Interest Expense and Net
Interest Expense shall not be calculated on a pro forma basis for the
purpose of calculating Excess Cash Flow.
(d) For the purpose of this Clause 20, no item shall be included or excluded
more than once in any calculation.
(e) If any requirement set out in paragraphs (a) to (c) Clause 20.1 (Financial
condition) is not, or may not be, complied with at any time the Company
may, no later than the date of delivering to the Agent the Compliance
Certificate setting out that non-compliance, procure that Monchem
International Inc. or Solutia Investments LLC provides further investment
in the shares of the Company, or makes a capital contribution to the
Company or makes a shareholder loan to the Company (which shall be
subordinated to the Facilities on terms satisfactory to the Agent) which
does not exceed on any occasion (euro)10,000,000 (the "CURE AMOUNT"), in
an amount sufficient to ensure compliance with the relevant requirement
immediately after that investment or capital contribution or shareholder
loan and any applicable breach or default of the requirements of
paragraphs (a) to (c) of Clause 20.1 (Financial condition) referred to in
this paragraph shall be deemed cured for all purposes of the Finance
Documents.
This right may only be exercised once in any period of four consecutive
Accounting Quarters and no more than twice in the period from the date of
the Facility Agreement to the Termination Date.
If any such investment or capital contribution or shareholder loan is made
in any Relevant Period to ensure compliance with the relevant requirement
in the immediately preceding Relevant Period, that investment or capital
contribution or shareholder loan shall be deemed to have been made on the
last day of that immediately preceding Relevant Period and to be added to
EBITDA for that Relevant Period (and all subsequent Relevant Periods) for
the purpose of this Clause 20.
20.4 DEFINITIONS
In this Clause 20:
"CASH FLOW" means, in relation to any Relevant Period, EBITDA for that
Relevant Period adjusted (without double-counting):
(a) by deducting any increase or adding any decrease in Working Capital
during that Relevant Period;
(b) by deducting amounts paid during the Relevant Period by the Group in
respect of Capital Expenditure other than Capital Expenditure to the
extent funded from Net Sale Proceeds or Insurance Proceeds, other
than the proceeds of any insurance policy in relation to business
interruption loss which are added back to the total consolidated
operating profit
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of the Group in accordance with the Applicable Accounting
Principles, permitted to be applied for that purpose under this
Agreement;
(c) by deducting amounts paid during the Relevant Period by the Group in
cash in respect of Tax;
(d) by excluding any other non-cash items taken into account in
calculating EBITDA (other than to the extent already taken into
account in movements in Working Capital);
(e) for the cash effect of extraordinary and exceptional items, to the
extent that cash was actually received or expended during the
Relevant Period;
(f) by deducting any fees, expenses or charges paid in cash in relation
to any equity offering, investment, acquisition or indebtedness
permitted to be incurred under this Agreement (whether or not
successful) to the extent not deducted from EBITDA;
(g) by deducting the aggregate amount of any payments made as permitted
under paragraph (c) of the definition of Permitted Non-Recourse
Subsidiary or paragraph (f) of the definition of Permitted Loan;
(h) by adding the aggregate amount received during the Relevant Period
by the Group in cash in respect of any rebate of Tax;
(i) by deducting the cost of acquisition of any shares or businesses to
the extent not included in EBITDA;
(j) by adding the net proceeds of any sale, lease, transfer or other
disposal of assets received during that Relevant Period (other than
any such proceeds received in relation to a sale, lease, transfer or
other disposal permitted under paragraph (a) of the definition of
Permitted Disposal) after deducting the amount of any such proceeds
required to be applied in prepayment under Clause 7.5 (Mandatory
prepayment - Net Sale Proceeds);
(k) by adding the amount of any dividends or other profit distributions
(net of Tax) received by any member of the Group from any person
which is not a member of the Group during that Relevant Period;
(l) by deducting the amount of any dividends or other profit
distributions paid in cash by the Company during that Relevant
Period;
(m) by deducting the amount of any prepayment premium arising under the
Euro Notes incurred as a result of early redemption;
(n) to the extent not taken into account in any other paragraph in this
definition, by adding all cash credits and release provisions, and
deducting all cash debits and other cash charges and provisions not
included in establishing EBITDA for such period; and
(o) to the extent not taken into account in any other paragraph in this
definition, by deducting all non-cash credits and release of
provisions and adding all non-cash debits and other non-cash charges
and provisions included in establishing EBITDA for such period.
"DEBT SERVICE" means, in relation to any Relevant Period, the aggregate
of:
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(a) Net Interest Expense for that Relevant Period; and
(b) scheduled repayments, and any other scheduled payments in the nature
of principal, payable by the Group in that Relevant Period in
respect of Financial Indebtedness:
(i) including all capital payments falling due in relation to any
lease that would be treated as a capital lease under the
Applicable Accounting Principles; and
(ii) excluding any amounts falling due under the Permitted
Revolving Credit Facility which were available for
simultaneous redrawing and any Financial Indebtedness between
any members of the Group,
in each case adjusted to reflect the assumption or repayment of debt
relating to any member of the Group or business or assets acquired
or sold during the Relevant Period.
"EBITDA" means, in relation to any Relevant Period, the total consolidated
operating profit of the Group on continuing operations for that Relevant
Period:
(a) including the net pre-taxation profits of a member of the Group or
business or assets acquired during that Relevant Period for the part
of that Relevant period when it was not a member of the Group and/or
the business or assets were not owned by a member of the Group; but
(b) excluding the net pre-taxation profits attributable to any member of
the Group or to any business or assets sold during that Relevant
Period.
but:
(i) before taking into account:
(A) Net Interest Expense;
(B) Tax;
(C) Non-operational profits (or losses) and profits (or losses)
attributable to minority interests in any member of the Group;
(D) any share of the profit of any associated company or
undertaking, except for dividends or other profit
distributions (net of Tax) received in cash by any member of
the Group;
(E) all extraordinary and exceptional items;
(F) exchange rate gains (or losses) arising due to the
re-translation of balance sheet items and ▇▇▇▇-to-market
adjustments on currency swaps; and
(G) excluding non-operating gains or losses;
(ii) after excluding (to the extent included) any gains or losses on the
disposal or revaluation of assets (other than in the ordinary course
of trading);
(iii) after adding any business interruption loss incurred which is
covered by insurance and which is not added back to the total
consolidated operating profit of the Group in accordance with the
Applicable Accounting Principles; and
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(iv) after adding back all amounts provided for depreciation and
amortisation (including acquisition goodwill) and any Cure Amount
provided that the right to provide any such Cure Amount may only be
exercised once in any period of four consecutive Accounting Quarters
and no more than twice in the period from the date of the Facility
Agreement to the Termination Date.
"INTEREST EXPENSE" means, in relation to any Relevant Period, the
aggregate amount of interest and any other finance charges (whether or not
paid or payable) accrued by the Group in that Relevant Period in respect
of Total Borrowings including:
(a) the interest element of leasing and hire purchase payments;
(b) commitment fees, regular periodic finance charges, arrangement fees
and guarantee fees; and
(c) prepayment fees,
with each of (a), (b) and (c) above adjusted by:
(i) adding back the net amount payable (or deducting the net
amount receivable) by members of the Group in respect of that
Relevant Period under any interest or (so far as they relate
to interest) currency hedging arrangements;
(ii) excluding any arrangement fees in respect of the Facility; and
(iii) excluding non-operational items.
"NET BORROWINGS" means, as at any particular time, Total Borrowings less
Cash and Cash Equivalent Investments at that time.
"NET INTEREST EXPENSE" means, in relation to any Relevant Period, Interest
Expense for that Relevant Period less interest income of the Group in
respect of that Relevant Period to the extent received by an Obligor in
cash in each case adjusted to reflect the assumption or repayment of debt
relating to any member of the Group or business or assets acquired or sold
during the Relevant Period.
"RELEVANT DATE" means the last date of each Accounting Quarter.
"RELEVANT PERIOD" means each period of four consecutive Accounting
Quarters ending on a Relevant Date.
"TOTAL BORROWINGS" means, as at any particular time, the aggregate
outstanding principal, capital or nominal amount (and any fixed or minimum
premium payable on prepayment or redemption) of the Financial Indebtedness
of members of the Group excluding paragraph (g) of the definition of
Financial Indebtedness.
For this purpose, any amount outstanding or repayable in a currency other
than euro shall on that day be taken into account in its euro equivalent
at the rate of exchange that would have been used had an audited
consolidated balance sheet of the Group been prepared as at that day in
accordance with the Applicable Accounting Principles.
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"WORKING CAPITAL" means, at any time, the current assets of the Group
being realisable within one year (other than Cash and Cash Equivalent
Investments) less current liabilities due within one year (other than
Financial Indebtedness).
21. GENERAL UNDERTAKINGS
The undertakings in this Clause 21 remain in force from the date of this
Agreement for so long as any amount is outstanding under the Finance
Documents or any Commitment is in force.
AUTHORISATIONS AND COMPLIANCE WITH LAWS
21.1 AUTHORISATIONS
(a) Each Obligor shall (and the Company shall ensure that each other member of
the Group will) promptly obtain, comply with and do all that is necessary
to maintain in full force and effect (and supply certified copies to the
Agent of) any necessary Authorisation required under any applicable law or
regulation of its Relevant Jurisdiction to:
(i) enable it to perform its obligations under the Finance Documents;
(ii) subject to the Reservations and any Perfection Requirements, ensure
the legality, validity, enforceability or admissibility in evidence
in the Relevant Jurisdiction of any Finance Documents; and
(iii) enable it to carry on its business as it is being conducted from
time to time if failure to obtain, comply with or maintain any such
Authorisation would reasonably be expected to have a Material
Adverse Effect.
(b) The Company shall ensure that the Perfection Requirements are complied
with promptly and in any event before the final date on which it is
necessary to carry out any such Perfection Requirement in order to achieve
the relevant perfection, protection or priority of any Security Document.
21.2 COMPLIANCE WITH LAWS
Each Obligor shall (and the Company shall ensure that each other member of
the Group will) comply in all respects with all laws to which it may be
subject, if failure so to comply would reasonably be expected to have a
Material Adverse Effect.
21.3 ENVIRONMENTAL LAWS AND LICENCES
(a) Each Obligor shall (and the Company shall ensure that each other member of
the Group will):
(i) comply with all Environmental Laws to which it may be subject;
(ii) obtain all Environmental Licences required in connection with its
business; and
(iii) comply with the terms of those Environmental Licences,
in each case where failure to do so would reasonably be expected to have a
Material Adverse Effect.
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21.4 TAXES
(a) Each Obligor shall (and the Company shall ensure that each other member of
the Group will) pay all Taxes required to be paid by it within the time
period allowed for payment without incurring any penalties for non
payment.
(b) Paragraph (a) above does not apply to any Taxes:
(i) being contested by the relevant member of the Group in good faith
and in accordance with the relevant procedures;
(ii) which have been disclosed in its financial statements and for which
adequate reserves are being maintained in accordance with GAAP; and
(iii) where payment can be lawfully withheld and will not result in the
imposition of any penalty nor in any Security (other than paragraph
(l) of the definition of Permitted Security) ranking in priority to
the claims of any Finance Party under any Finance Document or to any
Security created under any Security Document.
(c) No member of the Group may change its residence for Tax purposes.
RESTRICTIONS ON BUSINESS FOCUS
21.5 MERGER
(a) No Obligor shall (and the Company shall ensure that no other member of the
Group will) enter into any amalgamation, demerger, merger, sale or
contribution of all assets and liabilities of a company
("universalite/algemeenheid") or of a branch of activities, consolidation
or corporate reconstruction.
(b) Paragraph (a) above does not apply to any amalgamation, demerger, merger,
sale or contribution of all assets and liabilities of a company
("universalite/algemeenheid") or of a branch of activities, consolidation
or corporate reconstruction which is a Permitted Merger.
21.6 CHANGE OF BUSINESS
The Company shall ensure that no substantial change is made to the general
nature of the business of the Company or the Group or the Obligors taken
as a whole from that carried on at the date of this Agreement.
21.7 JOINT VENTURES
(a) Without the prior consent of the Majority Banks no Obligor shall (and the
Company shall ensure that no member of the Group will):
(i) invest in or acquire (or agree to invest in or acquire) any share
in, or any security issued by, any Joint Venture or any interest
therein; or
(ii) transfer any assets or lend to or give a guarantee, or Security or
Quasi Security (other than Permitted Security), for the obligations
of a Joint Venture (or agree to do any of the foregoing).
(b) Paragraph (a) above does not apply to any investment in, or transfer or
loan to, or guarantee for the obligations of the company referred to in
paragraph (a) of Schedule 8 (Disposals) other than prior to the date
hereof.
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21.8 ACQUISITIONS AND INVESTMENTS
(a) No Obligor shall (and the Company shall ensure that no other member of the
Group will):
(i) invest in or acquire any share in, or any security issued by, any
person, or any interest therein or in the capital of any person, or
make any capital contribution to any person (or agree to do any of
the foregoing); or
(ii) invest in or acquire any business or going concern, or the whole or
substantially the whole of the assets or business of any person, or
any assets that constitute a division or operating unit of the
business of any person (or agree to do any of the foregoing).
(b) Paragraph (a) above does not apply to any acquisition or investment which
is a Permitted Acquisition.
21.9 NON-RECOURSE SUBSIDIARIES
(a) No Obligors shall (and the Company shall ensure that no member of the
Group will ) without the consent of the Majority Lenders:
(i) invest in or acquire (or agree to invest in or acquire) any share
in, or any security issued by, any Non-Recourse Subsidiary or any
interest therein; or
(ii) transfer any assets or lend to or give a guarantee, or Security or
Quasi Security, other than for the obligations of a Non-Recourse
Subsidiary (or agree to do any of the foregoing).
(b) Paragraph (a) above does not apply to any acquisition of or investment in,
or transfer or loan to, or guarantee, Security or Quasi Security other
than for the obligations of, a Permitted Non-Recourse Subsidiary.
RESTRICTIONS ON DEALING WITH ASSETS AND SECURITY
21.10 ASSETS
Each Obligor shall (and the Company shall ensure that each other member of
the Group will) maintain to a standard of repair consistent with that
maintained by companies carrying on businesses similar to that carried on
by the Group (ordinary wear and tear excepted) all its physical assets
necessary for the conduct of its business as conducted from time to time
except where failure to so maintain could not reasonably be expected to
have a Material Adverse Effect.
21.11 PARI PASSU
Each Obligor shall ensure that its obligations under the Finance Documents
rank at all times at least pari passu in right of priority and payment
with the claims of all its other unsecured and unsubordinated creditors,
except for obligations mandatorily preferred by law applying to companies
generally.
21.12 NEGATIVE PLEDGE
(a) No Obligor shall (and the Company shall ensure that no other member of the
Group will) create or permit to subsist any Security or Quasi Security
over any of its assets.
(b) Paragraph (a) above does not apply to any Security or Quasi Security which
is Permitted Security.
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21.13 DISPOSALS
(a) No Obligor shall (and the Company shall ensure that no other member of the
Group will) enter into a single transaction or a series of transactions
(whether related or not and whether voluntary or involuntary) to sell,
lease, transfer or otherwise dispose of any asset.
(b) Paragraph (a) above does not apply to any sale, lease, transfer or other
disposal which is a Permitted Disposal.
21.14 ARM'S LENGTH TERMS
No Obligor shall (and the Company shall ensure that no other member of the
Group will) enter into any material contract or arrangement with or for
the benefit of any Restricted Person (including any disposal to that
person) other than:
(a) in the case of a transaction other than in the ordinary course of
business, for full market value and on arm's length terms; or
(b) in the case of a transaction in the ordinary course of business, on
arm's length terms to the extent consistent with previous practice.
21.15 LOANS OR CREDIT
(a) No Obligor shall (and the Company shall ensure that no other member of the
Group will) be a creditor in respect of any Financial Indebtedness.
(b) Paragraph (a) above does not apply to a Permitted Loan.
21.16 GUARANTEES
(a) No Obligor shall (and the Company shall ensure that no other member of the
Group will) issue or allow to remain outstanding any guarantee in respect
of any liability or obligation of any person.
(b) Paragraph (a) above does not apply to a Permitted Guarantee.
21.17 RESTRICTED PAYMENTS
(a) No Obligor shall (and the Company shall ensure that no other member of the
Group will):
(i) pay, repay or prepay any principal, interest or other amount on or
in respect of, or redeem, purchase or defease, any Financial
Indebtedness owing to any Restricted Person; or
(ii) make any investment in, or pay any fee or make any advance or other
kind of payment to any Restricted Person other than in the ordinary
course of business, on arm's length terms and at full market value.
(b) The Company shall not:
(i) declare, pay or make any dividend or other payment or distribution
of any kind on or in respect of any of its shares; and
(ii) reduce, return, purchase, repay, cancel or redeem any of its shares.
(c) Paragraphs (a) and (b) above do not apply to a payment which is a
Permitted Payment.
MOVEMENT OF CASH - CASH IN
- 80 -
21.18 FINANCIAL INDEBTEDNESS
(a) No Obligor shall (and the Company shall ensure that no other member of the
Group will) incur (or agree to incur) or allow to remain outstanding any
Financial Indebtedness.
(b) Paragraph (a) above does not apply to Financial Indebtedness that is
Permitted Financial Indebtedness.
21.19 ISSUE OF SHARES
(a) No Obligor shall (and the Company shall ensure that no other member of the
Group will):
(i) issue any share to any person; or
(ii) grant to any person any conditional or unconditional option, warrant
or other right to call for the issue or allotment of, subscribe for,
purchase or otherwise acquire any share of any member of the Group
(including any right of pre-emption, conversion or exchange), or
alter any right attaching to any share capital of any member of the
Group.
(b) Paragraph (a) above does not apply to a Permitted Share Transaction.
MISCELLANEOUS
21.20 SECURITY AND GUARANTEES
(a) The Company shall:
(i) promptly notify the Agent if:
(A) any new member of the Group is incorporated;
(B) any member of the Group becomes a Material Subsidiary; or
(C) any business or asset that is material in the context of the
business of the member of the Group that acquires that
business or asset is acquired; and
(ii) at any time within 30 days of request by the Agent, ensure, subject
to the Security Principles, that the relevant member of the Group
will:
(A) become an Additional Guarantor; and
(B) provide Security in form and substance satisfactory to the
Security Agent, in favour of the Secured Parties to secure all
of the obligations of the Obligors under the Secured
Documents.
(b) The Company shall ensure that members of the Group shall at all times
grant security in accordance with the Security Principles.
(c) The Company shall ensure that all perfection requirements set out in the
Perfection Requirements List are satisfied within the time period set out
in that list to the extent these are required to be satisfied by such
specified time following the Closing Date.
(d) Each Obligor shall (and the Company shall ensure that each other member of
the Group will), at its own expense, promptly take all such action as the
Agent or the Security Agent may require acting in accordance with the
Security Principles:
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(i) for the purpose of perfecting or protecting any of the Secured
Parties' rights under, and preserving the Security intended to be
created or evidenced by, any of the Finance Documents; and
(ii) for the purpose of facilitating the realisation of any of that
Security,
including the execution of any transfer, conveyance, assignment or
assurance of any asset and the giving of any notice, order or direction
and the making of any registration which the Agent or the Security Agent
may reasonably require.
(e) No Obligor shall (and the Company shall ensure that no other member of the
Group will) do, or consent to the doing of, anything which might prejudice
the validity, enforceability or priority of any of the Security created
pursuant to the Security Documents.
(f) The Company shall ensure that at all times after the date of this
Agreement:
(i) the aggregate of the unconsolidated total assets (excluding any
intragroup loans) of the Guarantors (without double counting and
excluding any interests in any Subsidiaries which are Guarantors)
exceeds 80 per cent. of the consolidated total assets of the Group;
and
(ii) the aggregate of the unconsolidated revenues and EBITDA of the
Guarantors (without double counting and excluding any dividends or
other distributions from Subsidiaries which are Guarantors) exceeds
80 per cent. of the consolidated revenues and EBITDA of the Group,
in each case calculated by reference to the then most recent
unconsolidated financial statements of each Guarantor and the then most
recent consolidated financial statements of the Group.
21.21 INTERCOMPANY DEBT
The Company shall ensure that (i) each Obligor and (ii) members of the
Group (other than Obligors) which are or become creditors in respect of
Financial Indebtedness of Obligors to the extent such aggregate amount
exceeds (euro)5,000,000 (or its equivalent in another currency or
currencies) accedes to the Intercreditor Agreement as an Intercompany
Borrower (as defined in the Intercreditor Agreement) and, as the case may
be, an Intercompany Lender (as defined in the Intercreditor Agreement), in
accordance with the Intercreditor Agreement.
21.22 INSURANCE
(a) Each Obligor shall (and the Company shall ensure that each other member of
the Group will) maintain insurances (including as to self insurance) on
and in relation to its business and assets with reputable independent
underwriters or insurance companies:
(i) against those risks, and to the extent, usually insured against by
prudent companies located in the same or a similar location and
carrying on a similar business; and
(ii) against those risks, and to the extent, required by applicable law
or by contract.
(b) Without limiting paragraph (a) above, each Obligor shall (and the Company
shall ensure that each other member of the Group will) maintain insurance
on all of its assets of an insurable nature against loss or damage by fire
and other risks normally insured against by persons
- 82 -
carrying on a similar business in a sum or sums at least equal to their
replacement value (meaning the total cost of entirely rebuilding,
reinstating or replacing those assets if completely destroyed, together
with architects', surveyors' and other professional fees).
(c) Each Obligor shall (and the Company shall ensure that each other member of
the Group will) promptly pay premiums and do all things necessary to
maintain insurances required of it by paragraphs (a) and (b) above.
21.23 PENSIONS
The Company shall ensure that all pension schemes maintained or operated
by or for the benefit of any member of the Group and/or any of its
employees:
(a) are maintained and operated in all material respects in accordance
with all applicable laws and contracts and their governing
provisions; and
(b) are funded substantially in accordance with the governing provisions
of the scheme with any funding shortfall advised by actuaries of
recognised standing being rectified in accordance with those
governing provisions
except where failure to maintain or fund could not reasonably be expected
to have a Material Adverse Effect.
The Company shall promptly notify the Agent of any material change in the
rate of contributions to any pension schemes referred to in paragraph (a)
above paid or recommended to be paid (whether by the scheme actuary or
otherwise) or required (by law or otherwise).
21.24 INTELLECTUAL PROPERTY
Each Obligor shall (and the Company shall ensure that each other member of
the Group will):
(a) take all reasonable action to obtain, safeguard, maintain in full
force and effect and preserve its ability to enforce all
Intellectual Property necessary for the conduct of its business as
conducted from time to time, and not discontinue the use of any such
Intellectual Property, including:
(i) paying all applicable renewal fees, licence fees and other
outgoings; and
(ii) performing and complying with all material laws and material
obligations to which it is subject as registered proprietor,
beneficial owner, user, licensor or licensee of any such
necessary Intellectual Property; and
(b) promptly notify the Agent of any material infringement or threatened
or suspected material infringement of or any challenge to the
validity of any such necessary Intellectual Property owned by or
licensed to it which may come to its notice, supply the Agent (if
requested) with all information in its possession relating thereto;
(c) take all necessary steps permitted under the relevant licence to the
extent consistent with normal business practice to ensure that the
licensor of the Intellectual Property prevents third parties
infringing any such necessary Intellectual Property; and
(d) take all necessary steps permitted under the relevant licence to the
extent consistent with normal business practice to ensure that the
licensor of the Intellectual Property
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enforces the confidentiality of and prevents any improper use of any
trade secret which is Intellectual Property.
21.25 HEDGING
(a) The Company shall ensure that the hedging required by the Hedging Letter
is effected within 6 Months after the Closing Date (and is maintained in
effect) in accordance with the terms of the Hedging Letter.
(b) At or before the time that any member of the Group enters into any Hedging
Document with a Hedging Bank, the Company shall ensure that the
counterparty accedes as a Hedging Bank to the Intercreditor Agreement.
(c) No Obligor shall (and the Company shall ensure that no other member of the
Group will) enter (or agree to enter) into any derivative transaction.
(d) Paragraph (c) above does not apply to any derivative transaction which is
a Permitted Hedging Transaction.
21.26 BANK ACCOUNTS
(a) No Obligor shall (and the Company shall ensure that no other member of the
Group will) open or maintain any account with any bank or other financial
institution unless if the account is subject to any Permitted Security
under paragraph (f) of that definition, provided that such member of the
Group uses its reasonable commercial endeavours to have such Permitted
Security released, subordinated or waived, in form and substance
satisfactory to the Security Agent, in favour of the Secured Parties to
secure all of the obligations of the Obligors under the Secured Documents.
(b) Each Obligor shall (and the Company shall ensure that each other member of
the Group will) pay all sums received by it into a bank account permitted
by paragraph (f) above.
21.27 AMENDMENT TO ARTICLES OF ASSOCIATION OF CPFILMS
The Company shall ensure that within 90 days of the date of this
Agreement, CPFilms Vertriebs GmbH delivers to the Agent a certified copy
of its articles of association (Gesellschaftsvertrag) together with a
certified extract from the commercial register (Handelsregister) of the
local court (Amtsgericht) of Bielefeld evidencing that the restrictions on
transferring and encumbering the Shares (formerly No. 8 (Transfer of
shares encumbrances) of the articles of association) have been removed.
22. EVENTS OF DEFAULT
Each of the events or circumstances set out in this Clause 22 is an Event
of Default.
22.1 NON-PAYMENT
An Obligor does not pay on the due date any amount payable pursuant to a
Finance Document at the place at and in the currency in which it is
expressed to be payable unless:
(a) its failure to pay is caused by administrative or technical error;
and
(b) payment is made within 3 Business Days of its due date.
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22.2 FINANCIAL COVENANTS
Any requirement of Clause 20 (Financial covenants) is not satisfied.
22.3 OTHER OBLIGATIONS
(a) Any Obligor does not comply with any provision of the Finance Documents
(other than those referred to in Clause 22.1 (Non-payment), Clause 22.2
(Financial covenants) above) unless the failure to comply is capable of
remedy and is remedied within 15 Business Days of the Agent giving notice
to the Company or the Company becoming aware of the failure to comply.
22.4 MISREPRESENTATION
Any representation or statement made or deemed to be made by an Obligor in
the Finance Documents or any other document delivered by or on behalf of
any Obligor under any Finance Document is or proves to have been incorrect
or misleading in any material respect when made or deemed to be made
unless the facts or circumstances underlying the misrepresentation are
capable of remedy and are remedied within 15 Business Days of the Agent
giving notice to the Company or the Company becoming aware of the
misrepresentation.
22.5 CROSS DEFAULT
(a) Any Financial Indebtedness of any member of the Group is not paid when due
nor within any originally applicable grace period.
(b) Any Financial Indebtedness of any member of the Group is declared to be or
otherwise becomes due and payable prior to its specified maturity as a
result of an event of default (however described).
(c) Any commitment for any Financial Indebtedness of any member of the Group
is cancelled or suspended by a creditor of any member of the Group as a
result of an event of default (however described).
(d) Any creditor of any member of the Group becomes entitled to declare any
Financial Indebtedness of any member of the Group due and payable prior to
its specified maturity as a result of an event of default (however
described).
(e) No Event of Default will occur under this Clause 22.5 if:
(i) the aggregate amount of Financial Indebtedness or commitment for
Financial Indebtedness falling within paragraphs (a) to (d) above is
less than (euro)10,000,000 (or its equivalent in another currency or
currencies); and
(ii) where the Financial Indebtedness falling within paragraphs (a) to
(d) above comprises an overdraft or other uncommitted or on demand
facility, such event is remedied within 5 Business Days of the Agent
giving notice to the Company or the Company becoming aware of the
relevant event.
22.6 INSOLVENCY
(a) Any Obligor or Material Subsidiary is unable on a persistent basis (op
duurzame wiize/de maniere persistante) (in relation to any Belgian
Obligors and Material Subsidiaries) or admits inability to pay its debts
as they fall due, suspends, or threatens to suspend, making payments on
any of its debts (or any class of them) including cessation de
paiements/stakring van
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betalingen, or, by reason of actual or anticipated financial difficulties,
commences negotiations with one or more of its creditors (or any class of
them) (other than the Lenders) with a view to rescheduling any of its
indebtedness.
(b) The value of the assets of any Obligor or Material Subsidiary is less than
its liabilities (taking into account contingent and prospective
liabilities).
(c) A moratorium is declared in respect of any indebtedness of any Obligor or
Material Subsidiary.
(d) Any procedure or step is taken in any jurisdiction of an Obligor which is
analogous to those provisions in (a) to (c) above.
22.7 INSOLVENCY PROCEEDINGS
(a) Any corporate action, legal proceedings or other procedure or step is
taken in relation to:
(i) the suspension of payments, a moratorium of any indebtedness
(including concordat judiciaire/gerechtelijk akkoord) winding-up,
dissolution, administration, bankruptcy (including
faillite/faillissement), or reorganisation (by way of voluntary
arrangement, scheme of arrangement or otherwise) of any Obligor or
Material Subsidiary;
(ii) a composition, compromise, assignment or arrangement with any
creditor of any Obligor or Material Subsidiary. In relation to an
Obligor incorporated in Belgium, these concepts shall mean a
"minnelijk akkoord met alle schuldeisers" /'accord amiable avec tous
les creanciers";
(iii) the appointment of a liquidator, receiver, administrative receiver,
administrator, an administrateur judiciaire/gerechtelijk bestuurder,
a commissaire special/speciaal commissaris, administrateur
provisoire/voorlopige bewindvoerder, compulsory manager or other
similar officer in respect of any Obligor or Material Subsidiary or
any of its assets; or
(iv) the enforcement of any Security over any assets of any Obligor or
Material Subsidiary where such Security secures Financial
Indebtedness in excess of (euro)2,500,000 (or its equivalent in
another currency or currencies),
or any analogous procedure or step is taken in any jurisdiction, in
particular (in relation to a German Obligor or a Material Subsidiary
incorporated in Germany):
(i) a petition for insolvency proceedings in respect of its assets
(Antrag auf Eroffnung eines Insolvenzverfahrens) is filed or any
event occurs which constitutes a mandatory cause for the initiation
of insolvency proceedings (Eroffnungsgrund) as set out in sections
17 and 19 of the German Insolvency Code (Insolvenzordnung) or;
(ii) actions are taken pursuant to section 21 of the German Insolvency
Code by the competent court.
Paragraph (a) above shall not apply to:
(iii) any corporate action, legal proceedings or other procedure or step
which is part of a solvent reorganisation of any Obligor or Material
Subsidiary permitted under this Agreement; or
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(iv) any winding-up petition which is frivolous or vexatious and is
discharged, stayed or dismissed within 30 days of commencement and
prior to its advertisement.
22.8 CREDITORS' PROCESS
Any expropriation, conservatory or executory seizure, attachment,
sequestration, distress or execution or any analogous process in any
jurisdiction affects any asset or assets of a Obligor or Material
Subsidiary and is not discharged within 90 days.
22.9 OWNERSHIP
Any Obligor or Material Subsidiary (other than the Company) is not or
ceases to be a wholly-owned Subsidiary of the Company unless expressly
permitted under the terms of this Agreement.
22.10 UNLAWFULNESS
It is or becomes unlawful for any Obligor to perform any of its
obligations under the Finance Documents.
22.11 REPUDIATION
Any Obligor repudiates a Finance Document or evidences an intention to
repudiate a Finance Document.
22.12 CONSTITUTIONAL DOCUMENTS
Any constitutional document of any member of the Group is terminated, or
is amended in a way, or any consent or waiver is given in respect of any
such document, which would be materially detrimental in the interests of
the Secured Parties under the Security Documents.
22.13 CESSATION OF BUSINESS
Any Obligor or Material Subsidiary suspends or ceases (or threatens to
suspend or cease) to carry on all or a material part of its business as a
going concern except as part of a Permitted Merger or a Permitted
Disposal.
22.14 NATIONALISATION
Any step is taken by any person with a view to the seizure, compulsory
acquisition, expropriation or nationalisation of all or any of the shares,
or all or any substantial part of the assets of any Obligor or Material
Subsidiary.
22.15 MATERIAL ADVERSE CHANGE
Any event or series of events occurs which the Majority Lenders determine
is reasonably likely to have a Material Adverse Effect.
22.16 ACCELERATION
(a) On and at any time after the occurrence of an Event of Default the Agent
may, and shall if so directed by the Majority Lenders, by notice to the
Company:
(i) cancel the Total Commitments whereupon they shall immediately be
cancelled;
(ii) declare that all or part of the Utilisations, together with accrued
interest, and all other amounts accrued or outstanding under the
Finance Documents be immediately due and payable, whereupon they
shall become immediately due and payable; and/or
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(iii) declare that all or part of the Utilisations be payable on demand,
whereupon they shall immediately become payable on demand by the
Agent on the instructions of the Majority Lenders.
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SECTION 9
CHANGES TO PARTIES
23. CHANGES TO THE LENDERS
23.1 ASSIGNMENTS AND TRANSFERS BY THE LENDERS
Subject to this Clause 23, a Lender (the "EXISTING LENDER") may:
(a) assign any of its rights; or
(b) transfer by novation any of its rights and obligations,
to another bank or financial institution or to a trust, fund or other
entity which is regularly engaged in or established for the purpose of
making, purchasing or investing in loans, securities or other financial
assets (the "NEW LENDER").
23.2 CONDITIONS OF ASSIGNMENT OR TRANSFER
(a) The consent of neither the Company nor any other Obligor is required for
an assignment or transfer by an Existing Lender.
(b) An assignment will only be effective on:
(i) receipt by the Agent of written confirmation from the New Lender (in
form and substance satisfactory to the Agent) that the New Lender
will assume the same obligations to the other Finance Parties as it
would have been under if it was an Original Lender;
(ii) the New Lender acceding to the Intercreditor Agreement in accordance
with the Intercreditor Agreement; and
(iii) the performance by the Agent of all necessary "know your customer"
or other similar checks under all applicable laws and regulations in
relation to such assignment to a New Lender, the completion of which
the Agent shall promptly notify to the Existing Lender and the New
Lender.
(c) A transfer will only be effective if the New Lender accedes to the
Intercreditor Agreement in accordance with the Intercreditor Agreement and
the procedure set out in Clause 23.5 (Procedure for transfer) is complied
with.
(d) If:
(i) a Lender assigns or transfers any of its rights or obligations under
the Finance Documents or changes its Facility Office; and
(ii) as a result of circumstances existing at the date the assignment,
transfer or change occurs, an Obligor would be obliged to make a
payment to the New Lender or Lender acting through its new Facility
Office under Clause 12 (Tax gross-up and indemnities) or Clause 13
(Increased Costs),
then the New Lender or Lender acting through its new Facility Office is
only entitled to receive payment under those Clauses to the same extent as
the Existing Lender or Lender acting through its previous Facility Office
would have been if the assignment, transfer or change had not occurred.
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(e) If a Lender assigns or transfers part but not all of its share in the
Facilities to a person other than one of its Affiliates, another Lender or
a Related Fund, the amount of such assignment or transfer must be a
minimum of (euro)1,000,000 and in integral multiples of (euro)1,000,000.
(f) A transfer or assignment will only be effective if the New Lender has
delivered to the Company and copied to the Agent a Tax Status Certificate
duly completed and executed by it:
(i) in the case of an assignment, together with or prior to its written
confirmation as required by Clause 23.2(b)(i); or
(ii) in the case of a transfer, together with or prior to the delivery of
the Transfer Certificate to the Agent contemplated in Clause
23.5(a),
but only if (A) such Tax Status Certificate is required at such time in
order to enable the Borrower to make all payments made by it to the
Lenders without a Tax Deduction; and (B) such New Lender is not a Belgian
legal entity subject to Belgian corporate income tax.
23.3 ASSIGNMENT OR TRANSFER FEE
The New Lender shall, on the date upon which an assignment or transfer
takes effect, pay to the Agent (for its own account) a fee of (euro)2,000.
23.4 LIMITATION OF RESPONSIBILITY OF EXISTING LENDERS
(a) Unless expressly agreed to the contrary, an Existing Lender makes no
representation or warranty and assumes no responsibility to a New Lender
for:
(i) the legality, validity, effectiveness, adequacy or enforceability of
the Finance Documents or any other documents;
(ii) the financial condition of any Obligor or other person;
(iii) the performance and observance by any Obligor or other person of its
obligations under the Finance Documents or any other documents; or
(iv) the accuracy of any statements (whether written or oral) made in or
in connection with any Finance Document or any other document,
and any representations or warranties implied by law are excluded.
(b) Each New Lender confirms to the Existing Lender and the other Finance
Parties that it:
(i) has made (and shall continue to make) its own independent
investigation and assessment of the financial condition and affairs
of each Obligor and its related entities in connection with its
participation in this Agreement and has not relied exclusively on
any information provided to it by the Existing Lender or any other
Finance Party in connection with any Secured Document; and
(ii) will continue to make its own independent appraisal of the
creditworthiness of each Obligor and its related entities and any
other person whilst any amount is or may be outstanding under the
Finance Documents or any Commitment is in force.
(c) Nothing in any Finance Document obliges an Existing Lender to:
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(i) accept a re-transfer from a New Lender of any of the rights and
obligations assigned or transferred under this Clause 23; or
(ii) support any losses directly or indirectly incurred by the New Lender
by reason of the non-performance by any Obligor or other person of
its obligations under the Finance Documents or otherwise.
23.5 PROCEDURE FOR TRANSFER
(a) Subject to the conditions set out in this Clause 23 a transfer is effected
in accordance with paragraph (c) below when the Agent executes an
otherwise duly completed Transfer Certificate delivered to it by the
Existing Lender and the New Lender and a duly completed Tax Status
Certificate. The Agent shall, subject to paragraph (b) below, as soon as
reasonably practicable after receipt by it of a duly completed Transfer
Certificate appearing on its face to comply with the terms of this
Agreement and delivered in accordance with the terms of this Agreement,
execute that Transfer Certificate.
(b) The Agent shall only be obliged to execute a Transfer Certificate
delivered to it by the Existing Lender and the New Lender once it is
satisfied it has complied with all necessary "know your customer" or other
similar checks under all applicable laws and regulations in relation to
the transfer to such New Lender.
(c) On the Transfer Date:
(i) to the extent that in the Transfer Certificate the Existing Lender
seeks to transfer by novation its rights and obligations under the
Finance Documents each of the Obligors and the Existing Lender shall
be released from further obligations towards one another under the
Finance Documents and their respective rights against one another
under the Finance Documents shall be cancelled (being the
"DISCHARGED RIGHTS AND OBLIGATIONS");
(ii) each of the Obligors and the New Lender shall assume obligations
towards one another and/or acquire rights against one another which
differ from the Discharged Rights and Obligations only insofar as
that Obligor and the New Lender have assumed and/or acquired the
same in place of that Obligor and the Existing Lender;
(iii) the Agent, the Arranger, the Security Agent, the New Lender and the
other Lenders shall acquire the same rights and assume the same
obligations between themselves as they would have acquired and
assumed had the New Lender been an Original Lender with the rights
and/or obligations acquired or assumed by it as a result of the
transfer and to that extent the Agent, the Arranger, the Security
Agent and the Existing Lender shall each be released from further
obligations to each other under the Finance Documents; and
(iv) the New Lender shall become a Party as a "Lender".
(d) For the avoidance of doubt, the Parties agree that in case of a transfer
effected in accordance with this Clause 23 (whether by way of novation or
otherwise), with respect to Security Documents governed by Belgian law,
all rights (including in relation to Security) of the Finance
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Parties shall be maintained and preserved, including for the purposes of
Article 1278 of the Belgian Civil Code.
23.6 COPY OF TRANSFER CERTIFICATE TO COMPANY
The Agent shall, as soon as reasonably practicable after it has executed a
Transfer Certificate, send to the Company a copy of that Transfer
Certificate.
23.7 DISCLOSURE OF INFORMATION
Any Lender may disclose to any of its Affiliates and:
(a) any other person to (or through) whom that Lender assigns or
transfers (or may potentially assign or transfer) all or any of its
rights and obligations under this Agreement;
(b) any other person with (or through) whom that Lender enters into (or
may potentially enter into) any sub-participation in relation to, or
any other transaction under which payments are to be made by
reference to, this Agreement or any Obligor;
(c) any other person to whom, and to the extent that, information is
required to be disclosed by any applicable law or regulation; or
(d) any rating agency or, with the prior written consent of the Company,
any other person,
any information about any Obligor, the Group, any other person and the
Finance Documents as that Lender shall consider appropriate if, in
relation to paragraphs (a) and (b) above, the person to whom the
information is to be given has entered into a Confidentiality Undertaking.
This Clause 23.7 supersedes any previous agreement relating to the
confidentiality of this information.
23.8 HEDGING BANKS
(a) A Lender (or an Affiliate of a Lender) which becomes a Hedging Bank shall
accede to this Agreement and to the Intercreditor Agreement by delivery to
the Security Agent of a duly completed and signed accession deed in the
form required under the Intercreditor Agreement and by the Security Agent
executing that accession deed.
(b) Where this Agreement or any other Finance Document imposes an obligation
on a Hedging Bank and the relevant Hedging Bank is an Affiliate of a
Lender and is not a party to that document, the relevant Lender shall
ensure that the obligation is performed by its Affiliate.
23.9 ASSIGNMENT BY WAY OF SECURITY
In addition to the other rights provided in this Clause 23, each Lender
may, without the consent of any Obligor, at any time charge, assign or
otherwise create Security in or over (whether by way of collateral or
otherwise) all or any of its rights under any Finance Document to secure
the obligations of that Lender, including:
(a) any charge, assignment or other Security to secure obligations to a
federal reserve or central bank; and
(b) in the case of any Lender which is a fund, any charge, assignment or
other Security granted to any holders (or trustee or representatives
of holders) of obligations owed, or securities issued, by that
Lender as Security for those obligations or securities,
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except that no such charge, assignment or Security shall:
(i) release a Lender from any of its obligations under the Finance
Documents or substitute the beneficiary of the relevant charge,
assignment or Security for the Lender as a party to any of the
Finance Documents; or
(ii) require any payments to be made by an Obligor or grant to any person
any more extensive rights than those required to be made or granted
to the relevant Lender under the Finance Documents.
23.10 SUB-PARTICIPATIONS
Any Lender may, without the consent of any Obligor, at any time
sub-participate or sub-contract any of its rights or obligations under the
Finance Documents.
24. CHANGES TO THE OBLIGORS
24.1 ASSIGNMENTS AND TRANSFER BY OBLIGORS
No Obligor may assign any of its rights or transfer any of its rights or
obligations under the Finance Documents.
24.2 ADDITIONAL GUARANTORS
(a) Subject to compliance with the provisions of paragraphs (c) and (d) of
Clause 19.14 ("Know your customer" checks), the Company may request that
any of its wholly owned Subsidiaries becomes an Additional Guarantor. That
Subsidiary, and/or any Subsidiary which is required by this Agreement to
become an Additional Guarantor, shall become an Additional Guarantor if:
(i) the Company delivers to the Agent a duly completed and executed
Accession Letter; and
(ii) the Agent has received all of the documents and other evidence
listed in Part II of Schedule 2 (Conditions precedent) in relation
to that Additional Guarantor, each in form and substance
satisfactory to the Agent.
(b) The Agent shall notify the Company and the Lenders promptly upon being
satisfied that it has received (in form and substance satisfactory to it)
all the documents and other evidence listed in Part II of Schedule 2
(Conditions precedent).
24.3 REPETITION OF REPRESENTATIONS
Delivery of an Accession Letter constitutes confirmation by the relevant
Subsidiary that the representations and warranties referred to in
paragraph (c) of Clause 18.27 (Times when representations made) are true
and correct in relation to it as at the date of delivery as if made by
reference to the facts and circumstances then existing.
24.4 RELEASE OF GUARANTORS
(a) If a Guarantor ceases to be a member of the Group in accordance with this
Agreement, that Guarantor shall cease to be a Guarantor and shall be
released from its rights and obligations under the Finance Documents and
the Hedging Documents.
(b) The Security Agent shall, at the request and cost of the Company, execute
such documents as may be required to release that Guarantor pursuant to
paragraph (a) above.
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24.5 RESIGNATION OF GUARANTOR AND RELEASE OF SECURITY ON DISPOSAL
If a Guarantor is or is proposed to be the subject of a Permitted Disposal
then:
(a) where that Guarantor created Security over any of its assets or
business in favour of the Security Agent, or Security in favour of
the Security Agent was created over the shares (or equivalent) of
that Guarantor, the Security Agent shall promptly, at the cost and
request of the Company release those assets, business or shares (or
equivalent) and issue certificates of non-crystallisation;
(b) the resignation of that Guarantor and related release of Security
referred to in paragraph (a) above shall not become effective until
the date of that disposal; and
(c) if the disposal of that Guarantor is not made, the resignation
letter of that Guarantor and the related release of Security
referred to in paragraph (a) above shall have no effect and the
obligations of the Guarantor and the Security created or intended to
be created by or over that Guarantor shall continue in full force
and effect.
24.6 RELEASE OF SECURITY ON DISPOSAL
If an Obligor makes a Permitted Disposal then:
(a) where Security has been taken over the assets or business (the
subject of the Permitted Disposal) in favour of the Security Agent,
the Security Agent shall promptly, at the cost and request of the
Company release those assets or business and issue certificates of
non-crystallisation; and
(b) the release of Security referred to in paragraph (a) above shall not
become effective until the date of that disposal.
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SECTION 10
THE FINANCE PARTIES
25. ROLE OF THE AGENT AND THE ARRANGER
25.1 APPOINTMENT OF THE AGENT
(a) Each other Finance Party appoints the Agent to act as its agent under and
in connection with the Finance Documents.
(b) Each other Finance Party authorises the Agent to exercise the rights,
powers, authorities and discretions specifically given to the Agent under
or in connection with the Finance Documents together with any other
incidental rights, powers, authorities and discretions.
(c) Each other Finance Party authorises each of the Agent and the Arranger to
agree, accept and sign on its behalf the terms of any reliance or
engagement letter in relation to any Report or any other report or letter
provided by any person in connection with the Finance Documents or the
transactions contemplated in them.
25.2 DUTIES OF THE AGENT
(a) The Agent shall promptly forward to a Party the original or a copy of any
document which is delivered to the Agent for that Party by any other
Party.
(b) Except where a Finance Document specifically provides otherwise, the Agent
is not obliged to review or check the adequacy, accuracy or completeness
of any document it forwards to another Party.
(c) If the Agent receives notice from a Party referring to this Agreement,
describing a Default and stating that the circumstance described is a
Default, it shall promptly notify the Finance Parties.
(d) If the Agent is aware of the non-payment of any principal, interest,
commitment fee or other fee payable to a Finance Party (other than the
Agent or the Arranger) under this Agreement, it shall promptly notify the
other Finance Parties.
(e) The Agent's duties under the Finance Documents are solely mechanical and
administrative in nature.
25.3 ROLE OF THE ARRANGER
Except as specifically provided in the Finance Documents, the Arranger has
no obligations of any kind to any other Party under or in connection with
any Finance Document.
25.4 NO FIDUCIARY DUTIES
(a) Nothing in this Agreement constitutes the Agent, or the Arranger as a
trustee or fiduciary of any other person.
(b) Neither the Agent, nor the Arranger shall be bound to account to any
Lender for any sum or the profit element of any sum received by it for its
own account.
25.5 BUSINESS WITH THE GROUP
The Agent and the Arranger may accept deposits from, lend money to and
generally engage in any kind of banking or other business with any member
of the Group or any other person.
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25.6 RIGHTS AND DISCRETIONS OF THE AGENT
(a) The Agent may rely on:
(i) any representation, notice or document believed by it to be genuine,
correct and appropriately authorised; and
(ii) any statement made by a director, authorised signatory or employee
of any person regarding any matters which may reasonably be assumed
to be within his knowledge or within his power to verify.
(b) The Agent may assume, unless it has received notice to the contrary in its
capacity as agent for the Lenders, that:
(i) no Default has occurred (unless it has actual knowledge of a Default
arising under Clause 22.1 (Non-payment));
(ii) any right, power, authority or discretion vested in any Party or any
group of Lenders has not been exercised; and
(iii) any notice or request made by the Company (other than a Utilisation
Request or Selection Notice) is made on behalf of and with the
consent and knowledge of all the Obligors.
(c) The Agent may engage, pay for and rely on the advice or services of any
lawyers, accountants, surveyors or other experts.
(d) The Agent may act in relation to the Finance Documents through its
personnel and agents.
(e) The Agent may disclose to any other Party any information it reasonably
believes it has received as agent under this Agreement.
(f) Notwithstanding any other provision of any Finance Document to the
contrary, neither the Agent, nor the Arranger is obliged to do or omit to
do anything if it would or might in its reasonable opinion constitute a
breach of any law or regulation or a breach of a fiduciary duty or duty of
confidentiality.
25.7 MAJORITY LENDERS' INSTRUCTIONS
(a) Unless a contrary indication appears in a Finance Document, the Agent
shall (i) exercise any right, power, authority or discretion vested in it
as Agent in accordance with any instructions given to it by the Majority
Lenders (or, if so instructed by the Majority Lenders, refrain from
exercising any right, power, authority or discretion vested in it as
Agent) and (ii) not be liable for any act (or omission) if it acts (or
refrains from taking any action) in accordance with an instruction of the
Majority Lenders.
(b) Unless a contrary indication appears in a Finance Document, any
instructions given by the Majority Lenders will be binding on all the
Finance Parties.
(c) The Agent may refrain from acting in accordance with the instructions of
the Majority Lenders (or, if appropriate, the Lenders) until it has
received such security as it may require for any cost, loss or liability
(together with any associated VAT) which it may incur in complying with
the instructions.
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(d) In the absence of instructions from the Majority Lenders (or, if
appropriate, the Lenders), the Agent may act (or refrain from taking
action) as it considers to be in the best interest of the Lenders.
(e) The Agent is not authorised to act on behalf of a Lender (without first
obtaining that Lender's consent) in any legal or arbitration proceedings
relating to any Finance Document.
25.8 RESPONSIBILITY FOR DOCUMENTATION
Neither the Agent, nor the Arranger:
(a) is responsible for the adequacy, accuracy and/or completeness of any
information (whether oral or written) supplied by the Agent, the
Arranger, an Obligor or any other person given in or in connection
with any Finance Document or any of the Information Package; or
(b) is responsible for the legality, validity, effectiveness, adequacy
or enforceability of any Finance Document or any other agreement,
arrangement or document entered into, made or executed in
anticipation of or in connection with any Finance Document.
25.9 EXCLUSION OF LIABILITY
(a) Without limiting paragraph (b) below (and without prejudice to the
provisions of paragraph (e) of Clause 28.10 (Disruption to Payment Systems
etc)), the Agent will not be liable including without limitation for
negligence or any other category of liability whatsoever for any action
taken by it under or in connection with any Finance Document, unless
directly caused by its gross negligence or wilful misconduct.
(b) No Party (other than the Agent) may take any proceedings against any
officer, employee or agent of the Agent in respect of any claim it might
have against the Agent or in respect of any act or omission of any kind by
that officer, employee or agent in relation to any Finance Document and
any officer, employee or agent of the Agent may rely on this Clause 25.9.
(c) The Agent will not be liable for any delay (or any related consequences)
in crediting an account with an amount required under the Finance
Documents to be paid by the Agent if the Agent has taken all necessary
steps as soon as reasonably practicable to comply with the regulations or
operating procedures of any recognised clearing or settlement system used
by the Agent for that purpose.
(d) Nothing in this Agreement shall oblige the Agent or the Arranger to carry
out any "know your customer" or other checks in relation to any person on
behalf of any Lender and each Lender confirms to the Agent and the
Arranger that it is solely responsible for any such checks it is required
to carry out and that it may not rely on any statement in relation to such
checks made by the Agent or the Arranger.
25.10 LENDERS' INDEMNITY TO THE AGENT
(a) Subject to paragraph (b) below, each Lender shall (in proportion to its
Available Commitments and participations in the Loans then outstanding to
the Available Facilities and all the Loans) indemnify the Agent, within
three Business Days of demand, against any cost, loss or liability
including without limitation for negligence or any other category of
liability whatsoever incurred by the Agent (otherwise than by reason of
its gross negligence or wilful misconduct) (or in the
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case of any cost, loss or liability pursuant to Clause 28.10 (Disruption
to Payment Systems etc) notwithstanding the Agent's negligence, gross
negligence or any other category of liability whatsoever but not including
any claim based on the fraud of the Agent) in acting as Agent under the
Finance Documents (unless it has been reimbursed by an Obligor pursuant to
a Finance Document).
(b) If the Available Facilities are then zero, each Lender's indemnity under
paragraph (a) above shall be in proportion to its Available Commitments to
the Available Facilities immediately prior to their reduction to zero,
unless there are then any Utilisations outstanding, in which case it shall
be in proportion to its participations in the Utilisations then
outstanding to all the Utilisations.
25.11 RESIGNATION OF THE AGENT
(a) The Agent may resign and appoint one of its Affiliates acting through an
office in the United Kingdom as successor by giving notice to the other
Finance Parties and the Company.
(b) Alternatively the Agent may resign by giving notice to the other Finance
Parties and the Company, in which case the Majority Lenders (after
consultation with the Company) may appoint a successor Agent.
(c) If the Majority Lenders have not appointed a successor Agent in accordance
with paragraph (b) above within 30 days after notice of resignation was
given, the Agent (after consultation with the Company) may appoint a
successor Agent (acting through an office in the United Kingdom).
(d) The retiring Agent shall, at its own cost, make available to the successor
Agent such documents and records and provide such assistance as the
successor Agent may reasonably request for the purposes of performing its
functions as Agent under the Finance Documents.
(e) The Agent's resignation notice shall only take effect upon the appointment
of a successor.
(f) Upon the appointment of a successor, the retiring Agent shall be
discharged from any further obligation in respect of the Finance Documents
but shall remain entitled to the benefit of this Clause 25. Its successor
and each of the other Parties shall have the same rights and obligations
amongst themselves as they would have had if such successor had been an
original Party.
(g) After consultation with the Company, the Majority Lenders may, by notice
to the Agent, require it to resign in accordance with paragraph (b) above.
In this event, the Agent shall resign in accordance with paragraph (b)
above.
25.12 CO-SECURITY AGENT
(a) The Facility Agent may appoint or delegate to a separate security agent,
delegate security agent or a co-security agent in any jurisdiction outside
England and Wales:
(i) if the Facility Agent considers that without the appointment the
interests of the Lenders under the Finance Documents might be
materially and adversely affected;
(ii) for the purpose of complying with any law, regulation or other
condition in any jurisdiction; or
(iii) for the purpose of obtaining or enforcing a judgment or enforcing
any Finance Document in any jurisdiction.
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(b) Any appointment or delegation under this Subclause will only be effective
if the security agent, delegate security agent or co-security agent
confirms to the Facility Agent and the Company in form and substance
satisfactory to the Facility Agent that it is bound by the terms of this
Agreement as if it were the Facility Agent.
(c) The Facility Agent may remove any security agent or co-security agent
appointed by it and may appoint a new security agent or co-security agent
in its place.
25.13 CONFIDENTIALITY
(a) In acting as agent for the Finance Parties, the Agent shall be regarded as
acting through its agency division which shall be treated as a separate
entity from any other of its divisions or departments.
(b) If information is received by another division or department of the Agent,
it may be treated as confidential to that division or department and the
Agent shall not be deemed to have notice of it.
25.14 RELATIONSHIP WITH THE LENDERS
(a) The Agent may treat each Lender as a Lender, entitled to payments under
this Agreement and acting through its Facility Office unless it has
received not less than five Business Days' prior notice from that Lender
to the contrary in accordance with the terms of this Agreement.
(b) Each Lender shall supply the Agent with any information required by the
Agent in order to calculate the Mandatory Cost in accordance with Schedule
4 (Mandatory Cost formulae).
25.15 CREDIT APPRAISAL BY THE LENDERS
Without affecting the responsibility of any Obligor for information
supplied by it or on its behalf in connection with any Finance Document,
each Lender confirms to the Agent and the Arranger that it has been, and
will continue to be, solely responsible for making its own independent
appraisal and investigation of all risks arising under or in connection
with any Finance Document including but not limited to:
(a) the financial condition, status and nature of each member of the
Group;
(b) the legality, validity, effectiveness, adequacy or enforceability of
any Finance Document and any other agreement, Security, arrangement
or document entered into, made or executed in anticipation of, under
or in connection with any Finance Document;
(c) whether that Lender has recourse, and the nature and extent of that
recourse, against any Party or any of its respective assets under or
in connection with any Finance Document, the transactions
contemplated by the Finance Documents or any other agreement,
Security, arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance Document;
and
(d) the adequacy, accuracy and/or completeness of the Information
Package and any other information provided by the Agent, any Party
or by any other person under or in connection with any Finance
Document, the transactions contemplated by the Finance Documents or
any other agreement, Security, arrangement or document entered into,
made or executed in anticipation of, under or in connection with any
Finance Document.
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25.16 REFERENCE BANKS
If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender
of which it is an Affiliate) ceases to be a Lender, the Agent shall (in
consultation with the Company) appoint another Lender or an Affiliate of a
Lender to replace that Reference Bank.
25.17 MANAGEMENT TIME OF THE AGENT
On the occurrence of an Event of Default which is continuing, any amount
payable to the Agent under Clause 14.3 (Indemnity to the Agent), Clause 16
(Costs and expenses) and Clause 25.10 (Lenders' indemnity to the Agent)
shall include the cost of utilising the Agent's management time or other
resources and will be calculated on the basis of such reasonable daily or
hourly rates as may be agreed between the Agent and the Company (each
acting reasonably) and notified to the Lenders and is in addition to any
fee paid or payable to the Agent under Clause 11 (Fees).
25.18 DEDUCTION FROM AMOUNTS PAYABLE BY THE AGENT
If any Party owes an amount to the Agent under the Finance Documents, the
Agent may, after giving notice to that Party, deduct an amount not
exceeding that amount from any payment to that Party which the Agent would
otherwise be obliged to make under the Finance Documents and apply the
amount deducted in or towards satisfaction of the amount owed. For the
purposes of the Finance Documents that Party shall be regarded as having
received any amount so deducted.
26. CONDUCT OF BUSINESS BY THE FINANCE PARTIES
No provision of this Agreement will:
(a) interfere with the right of any Finance Party to arrange its affairs
(tax or otherwise) in whatever manner it thinks fit;
(b) oblige any Finance Party to investigate or claim any credit, relief,
remission or repayment available to it or the extent, order and
manner of any claim; or
(c) oblige any Finance Party to disclose any information relating to its
affairs (tax or otherwise) or any computations in respect of Tax.
27. SHARING AMONG THE FINANCE PARTIES
27.1 PAYMENTS TO FINANCE PARTIES
If a Finance Party (a "RECOVERING FINANCE PARTY") receives or recovers any
amount from an Obligor other than in accordance with Clause 28 (Payment
mechanics) and applies that amount to a payment due under the Finance
Documents then:
(a) the Recovering Finance Party shall, within three Business Days,
notify details of the receipt or recovery to the Agent;
(b) the Agent shall determine whether the receipt or recovery is in
excess of the amount the Recovering Finance Party would have been
paid had the receipt or recovery been received or made by the Agent
and distributed in accordance with Clause 28 (Payment mechanics),
without taking account of any Tax which would be imposed on the
Agent in relation to the receipt, recovery or distribution; and
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(c) the Recovering Finance Party shall, within three Business Days of
demand by the Agent, pay to the Agent an amount (the "SHARING
PAYMENT") equal to such receipt or recovery less any amount which
the Agent determines may be retained by the Recovering Finance Party
as its share of any payment to be made, in accordance with Clause
28.5 (Partial payments).
27.2 REDISTRIBUTION OF PAYMENTS
The Agent shall treat the Sharing Payment as if it had been paid by the
relevant Obligor and distribute it between the Finance Parties (other than
the Recovering Finance Party) in accordance with Clause 28.5 (Partial
payments).
27.3 RECOVERING FINANCE PARTY'S RIGHTS
(a) On a distribution by the Agent under Clause 27.2 (Redistribution of
payments), the Recovering Finance Party will be subrogated to the rights
of the Finance Parties which have shared in the redistribution.
(b) If and to the extent that the Recovering Finance Party is not able to rely
on its rights under paragraph (a) above, the relevant Obligor shall be
liable to the Recovering Finance Party for a debt equal to the Sharing
Payment which is immediately due and payable.
27.4 REVERSAL OF REDISTRIBUTION
If any part of the Sharing Payment received or recovered by a Recovering
Finance Party becomes repayable and is repaid by that Recovering Finance
Party, then:
(a) each Finance Party which has received a share of the relevant
Sharing Payment pursuant to Clause 27.2 (Redistribution of payments)
shall, upon request of the Agent, pay to the Agent for account of
that Recovering Finance Party an amount equal to the appropriate
part of its share of the Sharing Payment (together with an amount as
is necessary to reimburse that Recovering Finance Party for its
proportion of any interest on the Sharing Payment which that
Recovering Finance Party is required to pay); and
(b) that Recovering Finance Party's rights of subrogation in respect of
any reimbursement shall be cancelled and the relevant Obligor will
be liable to the reimbursing Finance Party for the amount so
reimbursed.
27.5 EXCEPTIONS
(a) This Clause 27 shall not apply to the extent that the Recovering Finance
Party would not, after making any payment pursuant to this Clause 27, have
a valid and enforceable claim against the relevant Obligor.
(b) A Recovering Finance Party is not obliged to share with any other Finance
Party any amount which the Recovering Finance Party has received or
recovered as a result of taking legal or arbitration proceedings, if:
(i) it notified that other Finance Party of the legal or arbitration
proceedings; and
(ii) that other Finance Party had an opportunity to participate in those
legal or arbitration proceedings but did not do so as soon as
reasonably practicable having received notice and did not take
separate legal or arbitration proceedings.
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SECTION 11
ADMINISTRATION
28. PAYMENT MECHANICS
28.1 PAYMENTS TO THE AGENT
(a) On each date on which an Obligor or a Lender is required to make a payment
under a Finance Document, that Obligor or Lender shall make the same
available to the Agent (unless a contrary indication appears in a Finance
Document) for value on the due date at the time and in such funds
specified by the Agent as being customary at the time for settlement of
transactions in the relevant currency in the place of payment.
(b) Payment shall be made to such account in the principal financial centre of
the country of that currency (or, in relation to euro, in the principal
financial centre in a Participating Member State or London) with such bank
as the Agent specifies.
28.2 DISTRIBUTIONS BY THE AGENT
Each payment received by the Agent under the Finance Documents for another
Party shall, subject to Clause 28.3 (Distributions to an Obligor) and
Clause 28.4 (Clawback), be made available by the Agent as soon as
practicable after receipt to the Party entitled to receive payment in
accordance with this Agreement (in the case of a Lender, for the account
of its Facility Office), to such account as that Party may notify to the
Agent by not less than five Business Days' notice with a bank in the
principal financial centre of the country of that currency (or, in
relation to euro, in the principal financial centre of a Participating
Member State or London).
28.3 DISTRIBUTIONS TO AN OBLIGOR
The Agent may (with the consent of the Obligor or in accordance with
Clause 29 (Set-off)) apply any amount received by it for that Obligor in
or towards payment (on the date and in the currency and funds of receipt)
of any amount due from that Obligor under the Finance Documents or in or
towards the purchase of any amount of any currency to be so applied.
28.4 CLAWBACK
(a) Where a sum is to be paid to the Agent under the Finance Documents for
another Party, the Agent is not obliged to pay that sum to that other
Party (or to enter into or perform any related exchange contract) until it
has been able to establish to its satisfaction that it has actually
received that sum.
(b) If the Agent pays an amount to another Party and it proves to be the case
that it had not actually received that amount, then the Party to whom that
amount (or the proceeds of any related exchange contract) was paid by the
Agent shall on demand refund the same to the Agent together with interest
on that amount from the date of payment to the date of receipt by the
Agent, calculated by it to reflect its cost of funds.
28.5 PARTIAL PAYMENTS
(a) If the Agent receives a payment that is insufficient to discharge all the
amounts then due and payable by an Obligor under the Finance Documents,
the Agent shall apply that payment towards the obligations of that Obligor
under the Finance Documents in the following order:
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(i) FIRST, in or towards payment pro rata of any unpaid fees, costs and
expenses of the Agent, the Security Agent, or the Arranger under the
Finance Documents;
(ii) SECONDLY, in or towards payment pro rata of any accrued interest,
fee or commission due but unpaid under this Agreement;
(iii) THIRDLY, in or towards payment pro rata of any principal due but
unpaid under this Agreement; and
(iv) FOURTHLY, in or towards payment pro rata of any other sum due but
unpaid under the Finance Documents.
(b) The Agent shall, if so directed by the Majority Lenders vary the order set
out in paragraphs (a)(ii) to (iii) above.
(c) Paragraphs (a) and (b) above will override any appropriation made by an
Obligor.
28.6 NO SET-OFF BY OBLIGORS
All payments to be made by an Obligor under the Finance Documents shall be
calculated and be made without (and free and clear of any deduction for)
set-off or counterclaim.
28.7 BUSINESS DAYS
(a) Any payment which is due to be made on a day that is not a Business Day
shall be made on the next Business Day in the same calendar Month (if
there is one) or the preceding Business Day (if there is not).
(b) During any extension of the due date for payment of any principal or an
Unpaid Sum under this Agreement interest is payable on the principal or
Unpaid Sum at the rate payable on the original due date.
28.8 CURRENCY OF ACCOUNT
(a) Subject to paragraph (b) below, euro is the currency of account and
payment for any sum due from an Obligor under any Finance Document.
(b) Each payment in respect of costs, expenses or Taxes shall be made in the
currency in which the costs, expenses or Taxes are incurred.
28.9 CHANGE OF CURRENCY
(a) Unless otherwise prohibited by law, if more than one currency or currency
unit are at the same time recognised by the central bank of any country as
the lawful currency of that country, then:
(i) any reference in the Finance Documents to, and any obligations
arising under the Finance Documents in, the currency of that country
shall be translated into, or paid in, the currency or currency unit
of that country designated by the Agent (after consultation with the
Company); and
(ii) any translation from one currency or currency unit to another shall
be at the official rate of exchange recognised by the central bank
for the conversion of that currency or currency unit into the other,
rounded up or down by the Agent (acting reasonably).
(b) If a change in any currency of a country occurs, this Agreement will, to
the extent the Agent (acting reasonably and after consultation with the
Company) specifies to be necessary, be
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amended to comply with any generally accepted conventions and market
practice in the Relevant Interbank Market and otherwise to reflect the
change in currency.
28.10 DISRUPTION TO PAYMENT SYSTEMS ETC.
If either the Agent determines (in its discretion) that a Disruption Event
has occurred or the Agent is notified by the Company that a Disruption
Event has occurred:
(a) Agent may, and shall if requested to do so by the Company, consult
with the Company with a view to agreeing with the Company such
changes to the operation or administration of the Facilities as the
Agent may deem necessary in the circumstances;
(b) the Agent shall not be obliged to consult with the Company in
relation to any changes mentioned in paragraph (a) above if, in its
opinion, it is not practicable to do so in the circumstances and, in
any event, shall have no obligation to agree to such changes;
(c) the Agent may consult with the Finance Parties in relation to any
changes mentioned in paragraph (a) above but shall not be obliged to
do so if, in its opinion, it is not practicable to do so in the
circumstances;
(d) any such changes agreed upon by the Agent and the Company shall
(whether or not it is finally determined that a Disruption Event has
occurred) be binding upon the Parties as an amendment to (or, as the
case may be, waiver of) the terms of the Finance Documents
notwithstanding the provisions of Clause 34 (Amendments and
Waivers);
(e) the Agent shall not be liable for any damages, costs or losses
whatsoever (including, without limitation for negligence, gross
negligence or any other category of liability whatsoever but not
including any claim based on the fraud of the Agent) arising as a
result of its taking, or failing to take, any actions pursuant to or
in connection with this Clause 28.10; and
(f) the Agent shall notify the Finance Parties of all changes agreed
pursuant to paragraph (d) above.
29. SET-OFF
A Finance Party may set off any matured obligation due from an Obligor
under the Finance Documents (to the extent beneficially owned by that
Finance Party) against any matured obligation owed by that Finance Party
to that Obligor, regardless of the place of payment, booking branch or
currency of either obligation. If the obligations are in different
currencies, the Finance Party may convert either obligation at a market
rate of exchange in its usual course of business for the purpose of the
set-off.
30. NOTICES
30.1 COMMUNICATIONS IN WRITING
Any communication to be made under or in connection with the Finance
Documents shall be made in writing and, unless otherwise stated, may be
made by fax or letter.
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30.2 ADDRESSES
The address and fax number (and the department or officer, if any, for
whose attention the communication is to be made) of each Party for any
communication or document to be made or delivered under or in connection
with the Finance Documents is:
(a) in the case of the Company, that identified with its name below;
(b) in the case of each Lender or any other Original Obligor, that
notified in writing to the Agent on or prior to the date on which it
becomes a Party; and
(c) in the case of the Agent or the Security Agent, that identified with
its name below,
or any substitute address, fax number or department or officer as the
Party may notify to the Agent (or the Agent may notify to the other
Parties, if a change is made by the Agent) by not less than five Business
Days' notice.
30.3 DELIVERY
(a) Any communication or document made or delivered by one person to another
under or in connection with the Finance Documents will only be effective:
(i) if by way of fax, when received in legible form; or
(ii) if by way of letter, when it has been left at the relevant address
or five Business Days after being deposited in the post postage
prepaid in an envelope addressed to it at that address,
and, if a particular department or officer is specified as part of its
address details provided under Clause 30.2 (Addresses), if addressed to
that department or officer.
(b) Any communication or document to be made or delivered to the Agent or the
Security Agent will be effective only when actually received by it and
then only if it is expressly marked for the attention of the department or
officer identified with its signature below (or any substitute department
or officer as it shall specify for this purpose).
(c) All notices from or to an Obligor shall be sent through the Agent.
(d) Any communication or document made or delivered to the Company in
accordance with this Clause 30.3 will be deemed to have been made or
delivered to each of the Obligors.
30.4 NOTIFICATION OF ADDRESS AND FAX NUMBER
Promptly upon receipt of notification of an address and fax number or
change of address or fax number pursuant to Clause 30.2 (Addresses) or
changing its own address or fax number, the Agent shall notify the other
Parties.
30.5 ELECTRONIC COMMUNICATION
(a) Any communication to be made between the Agent and a Lender under or in
connection with the Finance Documents may be made by electronic mail or
other electronic means, if the Agent and the relevant Lender:
(i) agree that, unless and until notified to the contrary, this is to be
an accepted form of communication;
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(ii) notify each other in writing of their electronic mail address and/or
any other information required to enable the sending and receipt of
information by that means; and
(iii) notify each other of any change to their address or any other such
information supplied by them.
(b) Any electronic communication made between the Agent and a Lender will be
effective only when actually received in readable form and in the case of
any electronic communication made by a Lender to the Agent only if it is
addressed in such a manner as the Agent shall specify for this purpose.
30.6 ENGLISH LANGUAGE
(a) Any notice given under or in connection with any Finance Document must be
in English.
(b) All other documents provided under or in connection with any Finance
Document must be:
(i) in English; or
(ii) if not in English, and if so required by the Agent, accompanied by a
certified English translation and, in this case, the English
translation will prevail unless the document is a constitutional,
statutory or other official document or a Security Document.
31. CALCULATIONS AND CERTIFICATES
31.1 ACCOUNTS
In any litigation or arbitration proceedings arising out of or in
connection with a Finance Document, the entries made in the accounts
maintained by a Finance Party are prima facie evidence of the matters to
which they relate.
31.2 CERTIFICATES AND DETERMINATIONS
Any certification or determination by a Finance Party of a rate or amount
under any Finance Document is, in the absence of manifest error,
conclusive evidence of the matters to which it relates.
31.3 DAY COUNT CONVENTION
Any interest, commission or fee accruing under a Finance Document will
accrue from day to day and is calculated on the basis of the actual number
of days elapsed and a year of 360 days or, in any case where the practice
in the Relevant Interbank Market differs, in accordance with that market
practice.
32. PARTIAL INVALIDITY
If, at any time, any provision of the Finance Documents is or becomes
illegal, invalid or unenforceable in any respect under any law of any
jurisdiction, neither the legality, validity or enforceability of the
remaining provisions nor the legality, validity or enforceability of such
provision under the law of any other jurisdiction will in any way be
affected or impaired.
33. REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of any
Finance Party, any right or remedy under the Finance Documents shall
operate as a waiver, nor shall any single or partial
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exercise of any right or remedy prevent any further or other exercise or
the exercise of any other right or remedy. The rights and remedies
provided in this Agreement are cumulative and not exclusive of any rights
or remedies provided by law.
34. AMENDMENTS AND WAIVERS
34.1 REQUIRED CONSENTS
(a) Subject to Clause 34.2 (Exceptions) any term of the Finance Documents may
be amended or waived only with the consent of the Majority Lenders and the
Company and any such amendment or waiver will be binding on all Parties.
(b) The Agent may effect, on behalf of any Finance Party, any amendment or
waiver permitted by this Clause 34.
(c) Each Obligor acknowledges that its consent is not required for any
amendment or waiver permitted by this Clause 34 which is agreed to by the
Company.
34.2 EXCEPTIONS
(a) An amendment or waiver that has the effect of changing or which relates
to:
(i) the definition of "Majority Lenders" in Clause 1.1 (Definitions);
(ii) an extension to the date of payment of any amount under the
Finance Documents;
(iii) a reduction in the Margin or a reduction in the amount of any
payment of principal, interest, fees or commission payable;
(iv) an increase in or an extension of any Commitment;
(v) a change to the Borrowers or Guarantors other than in accordance
with Clause 24 (Changes to the Obligors);
(vi) any provision which expressly requires the consent of all the
Lenders;
(vii) Clause 2.2 (Finance Parties' rights and obligations), Clause 7.2
(Sale), Clause 7.3 (Mandatory cancellation), Clause 7.5 (Mandatory
prepayment - Net Sale Proceeds) to Clause 7.10 (Application of
Proceeds), Clause 23 (Changes to the Lenders), Clause 27 (Sharing
among the Finance Parties) or this Clause 34;
(viii) the release of any Security created pursuant to any Security
Document; or
(ix) the ranking or subordination under the Intercreditor Agreement.
shall not be made without the prior consent of all the Lenders.
(b) An amendment or waiver which relates to the rights or obligations of the
Agent, the Security Agent or the Arranger may not be effected without its
consent.
(c) An amendment or waiver which relates to Clause 17 (Guarantee and
indemnity) may not be effected without the consent of the Guarantors.
(d) If any Lender has failed to respond to any consent, waiver or amendment of
any provision of any Finance Document within 15 Business Days of delivery
of the request for such consent, waiver or amendment by the Company or the
Agent in accordance with the terms of this Agreement, the
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Available Commitments and participations in the Utilisations of such
Lender shall be excluded for the purposes of determining whether the
consent of the Majority Lenders or all Lenders has been obtained in
respect of such consent, waiver or amendment.
(e) No further consent is required from any Finance Party in respect of the
Permitted Revolving Credit Facility (documented within this Agreement
following amendments hereto). Each Finance Party agrees to execute
amendments to the Finance Documents, including without limitation, any
Security Documents, as required by the Agent to provide for the Permitted
Revolving Credit Facility to be made available, and secured, under such
documents so long as the RCF Lender accedes to the terms of the
Intercreditor Agreement. The existing terms hereof shall apply the
Permitted Revolving Credit Facility and shall be amended only to the
extent they relate to the mechanics and economics of the Permitted
Revolving Credit Facility.
(f) Notwithstanding paragraph (e) above, the terms of the Permitted Revolving
Credit Facility shall be approved and agreed by the Agent (acting
reasonably).
35. COUNTERPARTS
Each Finance Document may be executed in any number of counterparts, and
this has the same effect as if the signatures on the counterparts were on
a single copy of the Finance Document.
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SECTION 12
GOVERNING LAW AND ENFORCEMENT
36. GOVERNING LAW
This Agreement is governed by English law.
37. ENFORCEMENT
37.1 JURISDICTION
(a) The courts of England have exclusive jurisdiction to settle any dispute
arising out of or in connection with this Agreement (including a dispute
regarding the existence, validity or termination of this Agreement) (a
"DISPUTE").
(b) The Parties agree that the courts of England are the most appropriate and
convenient courts to settle Disputes and accordingly no Party will argue
to the contrary.
(c) This Clause 37.1 is for the benefit of the Finance Parties only. As a
result, no Finance Party shall be prevented from taking proceedings
relating to a Dispute in any other courts with jurisdiction. To the extent
allowed by law, the Finance Parties may take concurrent proceedings in any
number of jurisdictions.
37.2 SERVICE OF PROCESS
Without prejudice to any other mode of service allowed under any relevant
law, each Obligor (other than an Obligor incorporated in England and
Wales):
(a) irrevocably appoints Solutia UK Limited as its agent for service of
process in relation to any proceedings before the English courts in
connection with any Finance Document; and
(b) agrees that failure by a process agent to notify the relevant
Obligor of the process will not invalidate the proceedings
concerned.
37.3 WAIVER OF CONSEQUENTIAL DAMAGES
In no event shall any Finance Party be liable on any theory of liability
for any special, indirect, consequential or punitive damages and the
Company hereby waives, releases and agrees (for itself and on behalf of
its Subsidiaries) not to ▇▇▇ upon any such claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in
its favour.
THIS AGREEMENT HAS BEEN ENTERED INTO ON THE DATE STATED AT THE BEGINNING OF THIS
AGREEMENT.
- 109 -
THE COMPANY
SOLUTIA EUROPE SA/NV
Address: Parc Scientifique
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇▇▇-▇▇-▇▇▇▇▇, ▇▇▇▇▇▇▇
Fax No: ▇▇ ▇▇ ▇▇ ▇▇ ▇▇
Attention: Legal Counsel
By: /s/ VEERLE HENDRICKX
Managing Director
- 137 -
THE BORROWER
SOLUTIA SERVICES INTERNATIONAL SCA/COMM V.A.
Address: Parc Scientifique
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇▇▇-▇▇-▇▇▇▇▇, ▇▇▇▇▇▇▇
Fax No: ▇▇ ▇▇ ▇▇ ▇▇ ▇▇
Attention: Legal Counsel
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Ad-hoc proxy-holder
By:
By:
- 138 -
THE ORIGINAL GUARANTORS
SOLUTIA EUROPE SA/NV
Address: Parc Scientifique
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇▇▇▇-▇▇-▇▇▇▇▇, ▇▇▇▇▇▇▇
Fax No: ▇▇ ▇▇ ▇▇ ▇▇ ▇▇
Attention: Legal Counsel
By: /s/ VEERLE HENDRICKX
Managing Director
CPFILMS VERTRIEBS GMBH
Address: ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇-▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Fax No: ▇▇ ▇▇▇ ▇▇ ▇▇ ▇▇▇
Attention: Managing Director
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Managing Director
- 139 -
THE ARRANGER
CITIGROUP GLOBAL MARKETS LIMITED
Address:
Fax No:
Attention:
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
- 140 -
THE ORIGINAL LENDERS
CITIBANK, N.A.
Address: Citigroup Centre
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇
Fax No: ▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
Attention: Agency and Trust
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
- 141 -
THE AGENT
CITIBANK INTERNATIONAL PLC
Address: Citigroup Centre
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇
Fax No: ▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
Attention:
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
- 142 -
THE SECURITY AGENT
CITIBANK, N.A.
Address: Citigroup Centre
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇
Fax No: ▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇
Attention: Agency and Trust
By: /s/ ▇▇▇▇▇ JAPAUL
Director
- 143 -