Exhibit 10.2
CONFORMED COPY
▇ ▇ ▇ ▇ ▇ ▇ ▇ ▇ ▇▇▇▇▇▇▇▇ CHANCE LLP
C H A N C E [LOGO]
USD 225,000,000
SECURED FACILITIES AGREEMENT
amended and restated as at 23 May 2007
for
FLEXSYS HOLDING B.V.
arranged by
KBC BANK N.V.
AND
CITIGROUP GLOBAL MARKETS LIMITED
with
KBC BANK N.V.
acting as Agent
and
KBC BANK N.V.
acting as Security Trustee
---------------------------------------------------------------------------
AMENDED AND RESTATED MULTICURRENCY TERM AND
REVOLVING FACILITIES AGREEMENT
---------------------------------------------------------------------------
CONFORMED COPY
CONTENTS
CLAUSE PAGE
1. Definitions And Interpretation.......................................1
2. The Facilities......................................................23
3. Purpose.............................................................24
4. Conditions Of Utilisation...........................................24
5. Utilisation.........................................................26
6. Utilisation - Letters Of Credit.....................................27
7. Letters Of Credit...................................................31
8. Optional Currencies.................................................35
9. Repayment...........................................................38
10. Prepayment And Cancellation.........................................39
11. Interest............................................................43
12. Interest Periods....................................................44
13. Changes To The Calculation Of Interest..............................45
14. Fees................................................................46
15. Tax Gross Up And Indemnities........................................47
16. Increased Costs.....................................................50
17. Other Indemnities...................................................51
18. Mitigation By The Lenders...........................................52
19. Costs And Expenses..................................................53
20. Guarantee And Indemnity.............................................55
21. Representations.....................................................62
22. Information Undertakings............................................71
23. Financial Covenants.................................................76
24. General Undertakings................................................79
25. Events Of Default...................................................98
26. Changes To The Lenders.............................................105
27. Changes To The Obligors............................................110
28. Role Of The Agent And The Arranger.................................113
29. Role Of Security Trustee...........................................118
30. Conduct Of Business By The Finance Parties.........................129
31. Sharing Among The Finance Parties..................................130
32. Payment Mechanics..................................................132
33. Set-Off............................................................135
34. Application Of Proceeds............................................135
35. Notices............................................................137
36. Calculations And Certificates......................................138
37. Partial Invalidity.................................................139
38. Remedies And Waivers...............................................139
39. Amendments And Waivers.............................................139
40. Counterparts.......................................................140
41. USA Patriot Act....................................................140
42. Governing Law......................................................141
43. Enforcement........................................................141
44. Waiver Of Jury Trial...............................................142
SCHEDULE 1 THE ORIGINAL PARTIES.......................................deleted
Part I The Original Obligors...................................deleted
Part II The Original Lenders...................................deleted
SCHEDULE 2 CONDITIONS PRECEDENT AND CONDITIONS SUBSEQUENT.............deleted
Part I Conditions Precedent To Initial Utilisation.............deleted
Part II Conditions Subsequent To Initial Utilisation...........deleted
Part III Conditions Precedent Required To Be Delivered By An
Additional Obligor...........................................deleted
SCHEDULE 3 REQUESTS...................................................deleted
Part I A Utilisation Request Loans.............................deleted
Part I B Utilisation Request Letters Of Credit.................deleted
Part II Selection Notice.......................................deleted
SCHEDULE 4 MANDATORY COST FORMULAE....................................deleted
SCHEDULE 5 FORM OF TRANSFER CERTIFICATE...............................deleted
SCHEDULE 6 FORM OF ACCESSION LETTER...................................deleted
SCHEDULE 7 FORM OF RESIGNATION LETTER.................................deleted
SCHEDULE 8 FORM OF COMPLIANCE CERTIFICATE.............................deleted
SCHEDULE 9 TIMETABLES.................................................deleted
Part I Loans...................................................deleted
Part II Letters Of Credit......................................deleted
SCHEDULE 10 FORM OF LETTER OF CREDIT..................................deleted
SCHEDULE 11 CENTRE OF MAIN INTERESTS AND ESTABLISHMENTS...............deleted
SCHEDULE 12 AGREED SECURITY PRINCIPLES................................deleted
SCHEDULE 13 SOURCES AND USES TABLE....................................deleted
CONFORMED COPY
THIS AGREEMENT is amended and restated as at 23 May 2007 and made between:
(1) FLEXSYS HOLDING B.V. a private company with limited liability
incorporated under the laws of The Netherlands having its seat in
Deventer, The Netherlands and its registered office at ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and registered with the
Chamber of Commerce under number 38023104 (the "COMPANY");
(2) THE SUBSIDIARIES of the Company listed in Part I of Schedule 1 (The
Original Parties) as original borrowers (together with the Company
the "ORIGINAL BORROWERS");
(3) THE ENTITIES listed in Part I of Schedule 1 (The Original Parties) as
original guarantors (together with the Company the "ORIGINAL
GUARANTORS");
(4) KBC BANK N.V. and CITIGROUP GLOBAL MARKETS LIMITED as mandated lead
arrangers (whether acting individually or together the "ARRANGER");
(5) THE FINANCIAL INSTITUTIONS listed in Part II of Schedule 1 (The
Original Parties) as lenders (the " ORIGINAL LENDERS");
(6) KBC BANK N.V. as agent of the other Finance Parties (the "AGENT");
and
(7) KBC BANK N.V. as security agent and/or as security trustee for the
Secured Parties (the "SECURITY TRUSTEE").
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).
"ACQUISITION COSTS" means all non-periodic fees, costs and expenses,
stamp, registration and other Taxes incurred by the Company or any
other member of the Group in connection with the Akzo Nobel Retirement
and the Crystex Acquisition.
"ACCOUNT" means any account, subject to Transaction Security, opened
or maintained by a member of the Group with the Security Trustee or
any other person (and any replacement account or subdivision or
subaccount of that account), the debt or debts represented thereby and
all Related Rights.
"ADDITIONAL BORROWER" means a member of the Group which becomes an
Additional Borrower in accordance with Clause 27 (Changes to the
Obligors).
"ADDITIONAL COST RATE" has the meaning given to it in Schedule 4
(Mandatory Cost Formulae).
1
CONFORMED COPY
"ADDITIONAL GUARANTOR" means a member of the Group which becomes an
Additional Guarantor in accordance with Clause 27 (Changes to the
Obligors).
"ADDITIONAL OBLIGOR" means an Additional Borrower or an Additional
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.
"AGENT'S SPOT RATE OF EXCHANGE" means the Agent's spot rate of
exchange for the purchase of the relevant currency with the Base
Currency in the London foreign exchange market at or about 11:00 a.m.
on a particular day.
"AGREED SECURITY PRINCIPLES" means the security and guarantee
principles set out in Schedule 12 (Agreed Security Principles).
"AKZO NOBEL RETIREMENT" means the retirement of the entire
shareholdings of Akzo Nobel Chemicals International B.V. (and its
affiliates) in the Group.
"AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT" means the Limited
Partnership Agreement dated 1 May 1995 entered into by and among
Flexsys International Co., Akzo Nobel Chemicals Inc., Akzo Nobel
Properties Inc. and Monsanto Company, under which Flexsys America L.P.
is constituted, as amended and restated on 26 April 2007 and as
further amended or supplemented from time to time.
"AMENDMENT AND RESTATEMENT AGREEMENT" means the amendment and
restatement agreement to the Intercreditor Agreement and made amongst
others, between the Company, KBC Bank N.V. as Security Trustee, KBC
Bank N.V. as agent, Solutia Inc. and Solutia Europe N.V. as the
Parent, the Senior Lenders (as defined in the Intercreditor
Agreement), the Intra-Group Lenders and the Original Obligors (each as
defined in the Intercreditor Agreement) dated on or about 23 May 2007.
"AMENDMENT LETTER" means the Amendment Letter to the Fee Letter dated
25 April 2007 between the Arranger, the Company and others.
"ANTI-TERRORISM LAW" means each of:
(a) Executive Order No. 13224 of September 23, 2001 - Blocking
Property and Prohibiting Transactions With Persons Who Commit,
Threaten To Commit, or Support Terrorism (the Executive
Order);
(b) the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of
2001, Public Law 107-56 (commonly known as the USA Patriot
Act);
(c) the Money Laundering Control Act of 1986, Public Law 99-570;
(d) the International Emergency Economic Powers Act, 50 U.S.C.
Sections 1701 et seq, the Trading with the Enemy Act, 50 U.S.C.
App. Sections 1 et seq, any Executive Order or regulation
promulgated thereunder and administered by the Office of
Foreign Assets Control ("OFAC") of the U.S. Department of the
Treasury; and
2
CONFORMED COPY
(e) any similar law enacted in the United States of America
subsequent to the date of this Agreement.
"AUTHORISATION" means an authorisation, consent, approval, resolution,
licence, exemption, filing, notarisation or registration.
"AVAILABILITY PERIOD" means:
(a) in relation to Facility A the period from and including the
date of this Agreement to and including the day falling 30
days after the date of this Agreement; and
(b) in relation to Facility B, the period from and including the
date of this Agreement to and including the day falling one
month prior to the Termination Date.
"AVAILABLE COMMITMENT" means, in relation to a Facility, a Lender's
Commitment under that Facility minus:
(a) the Base Currency Amount of its participation in any
outstanding Utilisations under that Facility; and
(b) in relation to any proposed Utilisation, the Base Currency
Amount of its participation in any Utilisations that are due
to be made under that Facility on or before the proposed
Utilisation Date,
other than, in relation to any proposed Utilisation under Facility B
only, that Lender's participation in any Facility B Utilisations that
are due to be repaid or prepaid 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.
"BASE CURRENCY" means dollars.
"BASE CURRENCY AMOUNT" means, in relation to a Utilisation, the amount
specified in the Utilisation Request delivered by a Borrower for that
Utilisation (or, if the amount requested is not denominated in the
Base Currency, that amount converted into the Base Currency at the
Agent's Spot Rate of Exchange on the date which is three Business Days
before the Utilisation Date or, if later, on the date the Agent
receives the Utilisation Request and, in the case of a Letter of
Credit, as adjusted under Clause 6.8 (Revaluation of Letters of
Credit)) adjusted to reflect any repayment (other than, in relation to
Facility A, a repayment arising from a change of currency),
prepayment, consolidation or division of the Utilisation.
"BELGIAN BORROWER" means a Borrower whose jurisdiction of organisation
is Belgium.
"BELGIAN GUARANTOR" means a Guarantor whose jurisdiction of
organisation is Belgium.
"BELGIAN OBLIGOR" means Flexsys N.V. and Flexsys Co-ordination Centre
N.V. and any other Belgian Borrower or Belgian Guarantor.
3
"BELGIAN SECURITY DOCUMENTS" means any Security Documents governed by
the laws of Belgium.
"BNM" means the Malaysian Central Bank (also known as Bank Negara
Malaysia).
"BORROWER" means an Original Borrower or an Additional Borrower unless
it has ceased to be a Borrower in accordance with Clause 27 (Changes
to the Obligors).
"BRAZILIAN GUARANTEE AGREEMENT" means the guarantee agreement dated 27
April 2007 and made between Flexsys Industria e Comercio Ltda. as
guarantor and KBC Bank N.V. as Security Trustee and ▇▇▇▇▇▇ Caratori
Paes ▇▇ ▇▇▇▇▇▇▇ and Flexsys Holding B.V. as consent parties, as
amended pursuant to the Amended and Restated Brazilian Guarantee
Agreement dated as of 23 May 2007 executed by and between Flexsys
Industria e Comercio Ltda. as guarantor, KBC Bank N.V. as Security
Trustee and ▇▇▇▇▇▇ Caratori Paes ▇▇ ▇▇▇▇▇▇▇ and Flexsys Holding B.V.
as consent parties and any amendments thereof from time to time.
"BRAZILIAN QUOTA PLEDGE AGREEMENT" means the quota pledge agreement
dated 27 April 2007 and made between the Company and ▇▇▇▇▇▇ Caratori
Paes ▇▇ ▇▇▇▇▇▇▇ as quotaholders, Flexsys Industria e Comercio Ltda and
KBC Bank N.V. as the Security Trustee, as amended pursuant to the
Amended and Restated Brazilian Quota Pledge Agreement dated as of 23
May 2007 executed by and between the Company and ▇▇▇▇▇▇ Caratori Paes
▇▇ ▇▇▇▇▇▇▇ as quotaholders, Flexsys Industria e Comercio Ltda and KBC
Bank N.V. as the Security Trustee and any amendments thereof from time
to time.
"BREAK COSTS" means the amount (if any) by which:
(a) the interest (excluding the Margin) 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.
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
banks are open for general business in London, Brussels and New York
and:
(a) (in relation to any date for payment or purchase of a currency
other than euro) the principal financial centre of the country
of that currency; or
(b) (in relation to any date for payment or purchase of euro) any
TARGET Day.
"CHARGED PORTFOLIO" means the Shares in Flexsys S.p.A and, in relation
to these Shares, all dividends, interest and other monies payable in
respect of these Shares and all rights
4
CONFORMED COPY
to receive any economic benefit and proceeds in respect of or derived
from these Shares (either by way of transfer, redemption, bonus,
preference, substitution, pre-emption, conversion, winding-up, merger
and/or de-merger or otherwise).
"CHARGED PROPERTY" means all the assets of the Obligors which from
time to time are, or are expressed to be, the subject of the
Transaction Security.
"CODE" means, at any date, the United States Internal Revenue Code of
1986 and the regulations promulgated and the judicial and
administrative decisions rendered under it, all as the same may be in
effect at such date.
"COLLATERAL RIGHTS" means all rights, powers and remedies of the
Security Trustee provided by or pursuant to a Security Document or by
law.
"COMMITMENT" means a Facility A Commitment or Facility B Commitment as
the context may require.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
set out in Schedule 8 (Form of Compliance Certificate).
"CRYSTEX ACQUISITION" means the acquisition of the Kashima Crystex
operation from Akzo Nobel Chemicals International B.V.
"DECLARED DEFAULT" has the meaning given to it in Schedule 12 (Agreed
Security Principles).
"DEFAULT" means an Event of Default or any event or circumstance
specified in Clause 25 (Events of Default) which would (with the
expiry of a grace period, 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.
"DELEGATE" means any delegate, agent, attorney or co-trustee appointed
by the Security Trustee.
"DISRUPTION EVENT" means either or both of:
(c) 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
(d) 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,
5
CONFORMED COPY
(and which (in either such case)) is not caused by, and is beyond the
control of, the Party whose operations are disrupted.
"DUTCH CIVIL CODE" means the Dutch Civil Code (Burgerlijk Wetboek).
"DUTCH OBLIGOR" means an Obligor incorporated in The Netherlands.
"DUTCH FSA" means the Financial Supervision Act (Wet op het financieel
toezicht) including any and all subordinate decrees and regulations
issued pursuant thereto.
"EMPLOYEE PLAN" means an employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of
which a U.S. Obligor or any ERISA Affiliate is (or, if such plan were
terminated, would under Section 4069 of ERISA be deemed to be) an
"employer" as defined in Section 3(5) of ERISA.
"ENVIRONMENTAL CLAIM" means any claim, proceeding or investigation by
any person in respect of any Environmental Law.
"ENVIRONMENTAL LAW" means any applicable law in any jurisdiction in
which any member of the Group conducts business which relates to the
pollution or protection of the environment or harm to or the
protection of human health or the health of animals or plants.
"ENVIRONMENTAL PERMITS" means any permit, licence, consent, approval
and other authorisation and the filing of any notification, report or
assessment required under any Environmental Law for the operation of
the business of any member of the Group conducted on or from the
properties owned or used by the relevant member of the Group.
"ERISA" means, at any date, the United States Employee Retirement
Income Security Act of 1974 and the regulations promulgated and
ratings issued thereunder, all as the same may be in effect at such
date.
"ERISA AFFILIATE" means any person that for purposes of Title I and
Title IV of ERISA and Section 412 of the Code would be deemed at any
relevant time to be a single employer with an Obligor, pursuant to
Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA.
"ERISA EVENT" means
(a) any reportable event, as defined in Section 4043 of ERISA,
with respect to an Employee Plan, as to which PBGC has not by
regulation waived the requirement of Section 4043(a) of ERISA
that it be notified of such event;
(b) the filing of a notice of intent to terminate any Employee
Plan, if such termination would require material additional
contributions in order to be considered a standard termination
within the meaning of Section 4041(b) of ERISA, the filing
under Section 4041(c) of ERISA of a notice of intent to
terminate any Employee Plan or the termination of any Employee
Plan under Section 4041(c) of ERISA;
6
CONFORMED COPY
(c) the institution of proceedings under Section 4042 of ERISA by
the PBGC for the termination of, or the appointment of a
trustee to administer, any Employee Plan;
(d) the failure to make a required contribution to any Employee
Plan that would result in the imposition of an encumbrance
under Section 412 of the Code or Section 302 of ERISA or the
filing of any request for a minimum funding waiver under
Section 412 of the Code with respect to any Employee Plan;
(e) an engagement in a non-exempt prohibited transaction within
the meaning of Section 4975 of the Code or Section 406 of
ERISA; and
(f) an Obligor or an ERISA Affiliate incurring any liability under
Title IV of ERISA with respect to any Employee Plan (other
than premiums due and not delinquent under Section 4007 of
ERISA).
"EURIBOR" means, in relation to any Loan in euro:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the Interest Period of
that Loan) the arithmetic mean of the rates (rounded upwards
to four decimal places) as supplied to the Agent at its
request quoted by the Reference Banks 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.
"EVENT OF DEFAULT" means any event or circumstance specified as such
in Clause 25 (Events of Default).
"EXISTING FACILITY" means the US$200,000,000 Multicurrency Term and
Revolving Credit Facility dated 14 February 2003 between, inter alia,
the Company, the Original Borrowers, the Original Guarantors,
Commerzbank Aktiengesellschaft, KBC Bank N.V. and others (as amended).
"EXTENSION LETTER" means the Extension Letter to the Mandate Letter
dated 16 April 2007 between the Arranger, the Company and others.
"FACILITY" means Facility A or Facility B as the context may require.
"FACILITY A" means the term loan facility made available under this
Agreement as described in Clause 2 (The Facilities).
"FACILITY A COMMITMENT" means:
(a) in relation to an Original Lender, the amount in the Base
Currency set opposite its name under the heading "Facility A
Commitment" in Part II of Schedule 1 (The Original Parties)
and the amount of any other Facility A Commitment transferred
to it under this Agreement; and
7
CONFORMED COPY
(b) in relation to any other Lender, the amount in the Base
Currency of any Facility A Commitment transferred to it under
this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY A LOAN" means a loan made or to be made under Facility A or
the principal amount outstanding for the time being of that loan.
"FACILITY A REPAYMENT DATE" means each of the dates specified in
Clause 9.1 (Repayment of Facility A Loans) as Repayment Dates, but if
any such date is not a Business Day, then that Repayment Date shall be
deemed to be the immediately succeeding Business Day.
"FACILITY B" means the revolving credit facility made available under
this Agreement as described in Clause 2 (The Facilities).
"FACILITY B COMMITMENT" means:
(a) in relation to an Original Lender, the amount in the Base
Currency set opposite its name under the heading "Facility B
Commitment" in Part II of Schedule 1 (The Original Parties)
and the amount of any other Facility B Commitment transferred
to it under this Agreement; and
(b) in relation to any other Lender, the amount in the Base
Currency of any Facility B Commitment transferred to it under
this Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY B LOAN" means a loan made or to be made under Facility B or
the principal amount outstanding for the time being of that loan.
"FACILITY B UTILISATION" means a Facility B Loan or a Letter of
Credit.
"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 28 February
2007 between the Arranger and the Company (or the Agent and the
Company or the Security Trustee and the Company) setting out any of
the fees referred to in Clause 14 (Fees), as amended by the Amendment
Letter.
"FIC" means the Foreign Investment Committee of the Economic Planning
Unit of the Malaysian Prime Minister's Department.
"FINANCIAL CLOSE" means the date on which consideration is payable
pursuant to the Akzo Nobel Retirement and the Crystex Acquisition and
completion under such retirement and acquisition has occurred.
"FINANCE DOCUMENT" means this Agreement, the Syndication and Amendment
and Restatement Agreement, the Mandate Letter (as amended by the
Extension Letter), the
8
CONFORMED COPY
Security Documents, the Intercreditor Agreement, the Amendment and
Restatement Agreement, any Fee Letter (as amended by the Amendment
Letter), any Accession Letter, any Resignation Letter, any Transfer
Certificate and any other document designated as such by the Agent and
the Company.
"FINANCE PARTY" means the Agent, the Arranger, the Security Trustee or
a Lender.
"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 instrument;
(d) the amount of any liability in respect of any lease or hire
purchase contract which would, in accordance with GAAP, 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);
(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);
(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) any amount raised by the issue of redeemable shares;
(j) any amount of any liability under an advance or deferred
purchase agreement if one of the primary reasons behind the
entry into this agreement is to raise finance; and
(k) (without double counting) the amount of any liability in
respect of any guarantee or indemnity for any of the items
referred to in paragraphs (a) to (j) above.
"FLEXSYS AMERICA CO." means Flexsys America Co., a corporation
incorporated under the laws of the State of Delaware, United States of
America, with its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America.
"FLEXSYS RUBBER CHEMICALS RETIREMENT BENEFITS SCHEME" means the
retirement benefits scheme of Flexsys Rubber Chemicals Limited formed
on 1 April 1998.
9
CONFORMED COPY
"FRENCH SECURITY DOCUMENTS" means any Security Documents governed by
the laws of France.
"GAAP" means generally accepted accounting principles in the United
States of America.
"GERMAN BORROWER" means a Borrower whose jurisdiction of organisation
is Germany.
"GERMAN DEBT PUSHDOWN" means the corporate reorganisation and debt
push down steps taken together to be carried out in accordance with
Clause 24.34 (German Debt Pushdown).
"GERMAN GUARANTOR" means a Guarantor whose jurisdiction of
organisation is Germany.
"GERMAN OBLIGOR" means Flexsys Verwaltungs-und Beteiligungs GmbH and
Flexsys Verkauf GmbH and any other German Borrower or German
Guarantor.
"GERMAN SECURITY DOCUMENTS" means any Security Documents governed by
the laws of Germany.
"GROUP" means, at any time, the Company and its then Subsidiaries,
Flexsys America L.P. and Flexsys Rubber Chemicals Limited.
"GROUP STRUCTURE CHART" means the group structure chart showing:
(a) all members of the Group, including current name and company
registration number, its jurisdiction of incorporation and/or
establishment and a list of shareholders;
(b) any person in which any member of the Group holds shares in
its issued share capital or equivalent ownership interest of
such person.
"GUARANTOR" means an Original Guarantor or an Additional Guarantor,
unless it has ceased to be a Guarantor in accordance with Clause 27
(Changes to the Obligors).
"HOLDING COMPANY" means, in relation to a company or corporation, any
other company or corporation in respect of which it is a Subsidiary.
"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, was prepared in relation to this transaction and
distributed by the Arranger to selected financial institutions before
the date of this Agreement.
"INTELLECTUAL PROPERTY" means any patents, trademarks, service marks,
designs, business names, copyrights, design rights, moral rights,
inventions, confidential information, knowhow and other intellectual
property rights and interests, whether registered or unregistered, and
the benefit of all applications and rights to use such assets of each
Obligor.
"INTERCREDITOR AGREEMENT" means the agreement dated 27 April 2007 and
made amongst others, between the Company, KBC Bank N.V. as Security
Trustee, KBC Bank
10
CONFORMED COPY
N.V. as agent, Solutia Inc. and Solutia Europe N.V. as the Parent, the
Senior Lenders (as defined in the Intercreditor Agreement), the
Intra-Group Lenders and the Original Obligors (each as defined in the
Intercreditor Agreement) as amended by the Amendment and Restatement
Agreement.
"INTEREST PERIOD" means, in relation to a Loan, each period determined
in accordance with Clause 12 (Interest Periods) and, in relation to an
Unpaid Sum, each period determined in accordance with Clause 11.3
(Default interest).
"IRS" means the United States Internal Revenue Service or any
successor thereto.
"ISSUING BANK" means, in respect of a Letter of Credit, KBC Bank N.V.
or any other Lender (or its affiliate) that has agreed to act as
Issuing Bank in respect of that Letter of Credit.
"ITALIAN CIVIL CODE" means the Italian civil code, enacted by Royal
Decree No. 262 of 16 March 1942, as subsequently amended and
supplemented.
"ITALIAN SECURITY DOCUMENTS" means any Security Documents governed by
the laws of Italy.
"ITALIAN SHARE PLEDGE" means the share pledge agreement dated on or
about 27 April 2007 and made by the Company as pledgor and the KBC
Bank N.V. as secured creditor and common representative of the other
secured creditors.
"JAPANESE SECURITY DOCUMENTS" means any Security Documents governed by
the laws of Japan.
"LEGAL OPINIONS" means the legal opinions delivered to the Agent
pursuant to Schedule 2 (Conditions Precedent and Conditions
Subsequent).
"LENDER" means:
(a) any Original Lender; and
(b) any bank, financial institution, trust, fund or other entity
which has become a Party in accordance with Clause 26 (Changes
to the Lenders),
which in each case has not ceased to be a Party in accordance with the
terms of this Agreement.
"LETTER OF CREDIT" means a letter of credit, substantially in the form
set out in Schedule 10 (Form of Letter of Credit) or in any other form
requested by a Borrower and agreed by the Agent (with the prior
consent of the Majority Lenders) and the Issuing Bank.
"LIBOR" means, in relation to any Loan:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the currency or Interest
Period of that Loan) the arithmetic mean of the rates (rounded
upwards to four decimal places) as
11
CONFORMED COPY
supplied to the Agent at its request quoted by the Reference
Banks to leading banks in the London interbank market,
as of the Specified Time on the Quotation Day for the offering of
deposits in the currency of that Loan and for a period comparable to
the Interest Period for that Loan.
"LMA" means the Loan Market Association.
"LOAN" means a Facility A Loan or a Facility B Loan as the context may
require.
"LONG TERM INCENTIVE COMPENSATION" means the management incentive plan
covering the period 2004-2006; successful achievement of the targets
set out in the plan will result in a payout of approximately
US$50,000,000, which amount is scheduled to be paid in early 2007.
"MAJORITY LENDERS" means:
(a) if there are no Utilisations then outstanding, a Lender or
Lenders whose Commitments aggregate more than 66 2/3% of the
Total Commitments (or, if the Total Commitments have been
reduced to zero, aggregated more than 66 2/3% of the Total
Commitments immediately prior to the reduction); or
(b) at any other time, a Lender or Lenders whose participations in
the Utilisations then outstanding aggregate more than 66 2/3%
of all the Utilisations then outstanding.
"MANDATE LETTER" means the letter dated 28 February 2007 between the
Arranger, the Company and others, as amended by the Extension Letter.
"MANDATORY COST" means the percentage rate per annum calculated by the
Agent in accordance with Schedule 4 (Mandatory Cost Formulae).
"MARGIN" means:
(a) in relation to Facility A, 1.25% per annum until the date
falling six months from the first Utilisation Date and
thereafter the Margin in relation to Facility A will be
adjusted on the basis of the most recently delivered Combined
Financial Statements of the Group (which must be audited if
such statements relate to the Group's financial year) by
reference to the ratio of Combined Senior Total Financial Debt
as at the last day of each Relevant Period to EBITDA for such
Relevant Period in accordance with the table set out below:
-----------------------------------------------------------
RATIO MARGIN % PER ANNUM
-----------------------------------------------------------
>2.5 1.5
-
-----------------------------------------------------------
<2.5 >2.0 1.25
-
-----------------------------------------------------------
<2.0 >1.5 1.00
-
-----------------------------------------------------------
<1.5 >1.0 0.80
-
-----------------------------------------------------------
<1.0 0.65
-----------------------------------------------------------
12
CONFORMED COPY
PROVIDED THAT whilst a Default is continuing the Margin shall
be the highest Margin specified above.
(b) in relation to Facility B, 1.00% per annum until the date
falling six months from the date of this Agreement and
thereafter the Margin in relation to Facility B will be
adjusted on the basis of the most recently delivered Combined
Financial Statements of the Group (which must be audited if
such statements relate to the Group's financial year) by
reference to the ratio of Combined Senior Total Financial Debt
as at the last day of each Relevant Period to EBITDA for such
Relevant Period, in accordance with the table set out below:
-----------------------------------------------------------
RATIO MARGIN % PER ANNUM
-----------------------------------------------------------
>2.5 1.25
-
-----------------------------------------------------------
<2.5 >2.0 1.00
-
-----------------------------------------------------------
<2.0 >1.5 0.80
-
-----------------------------------------------------------
<1.5 >1.0 0.60
-
-----------------------------------------------------------
<1.0 0.50
-----------------------------------------------------------
PROVIDED THAT whilst a Default is continuing the Margin shall
be the highest Margin specified above.
Any adjustment to the Margin shall take effect on the date falling
five Business Days after the date of receipt by the Agent of the
relevant Compliance Certificate.
For the purposes of determining the Margin, "Combined Senior Total
Financial Debt", "EBITDA", "Combined Financial Statements of the
Group" and "Relevant Period" shall be determined in accordance with
Clause 23.1 (Financial definitions).
"MARGIN STOCK" means margin stock or "margin security" within the
meaning of Regulations T, U and X.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on:
(a) the business, property or financial condition of the Group
taken as a whole;
(b) the ability of an Obligor to perform its obligations under the
Finance Documents; or
(c) the validity or enforceability of the Finance Documents or the
rights or remedies of any Finance Party under the Finance
Documents.
13
CONFORMED COPY
For the avoidance of doubt, the continuation of Solutia Inc.'s
proceedings under Title 11 of the United States of America Code
entitled Bankruptcy shall not constitute a Material Adverse Effect
PROVIDED THAT no member of the Group becomes subject to such
proceedings or those of an affiliated debtor of Solutia Inc.
"MATERIAL GROUP MEMBER" means a member of the Group (other than the
Company) which:
(a) has EBITDA representing 5 per cent. or more of the Combined
EBITDA as defined in Clause 23 (Financial Covenants); and/or
(b) has assets representing 5 per cent. or more of the aggregate
assets of the Group; and/or
(c) has revenue representing 5 per cent. or more of the aggregate
revenue of the Group,
in each case calculated on a combined basis.
Compliance with the conditions set out in paragraphs (a), (b) and (c)
shall be determined by reference to the most recent Compliance
Certificate supplied by the Company and/or the latest audited
financial statements of that member of the Group and the latest
audited Combined Financial Statements of the Group.
A report by the auditors of the Company that a member of the Group is
or is not a Material Group Member shall, in the absence of manifest
error, be conclusive and binding on all Parties.
"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) (subject to paragraph (c) below) 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;
(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; and
(c) if an Interest Period begins on the last Business Day of a
calendar month, that Interest Period shall end on the last
Business Day in the calendar month in which that Interest
Period is to end.
The above rules will only apply to the last Month of any period.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" (as defined in
Section (3)(37) of ERISA) contributed to for any employees of a U.S.
Obligor or any ERISA Affiliate.
"NEW GERMAN HOLD CO" means the new company to be established after the
date of this Agreement by the Company and whose jurisdiction of
organisation will be Germany.
14
CONFORMED COPY
"OBLIGORS" means a Borrower or a Guarantor.
"OPTIONAL CURRENCY" means a currency (other than the Base Currency)
which complies with the conditions set out in Clause 4.3 (Conditions
relating to Optional Currencies).
"ORIGINAL FINANCIAL STATEMENTS" means:
(a) in relation to the Company, the audited Combined Financial
Statements of the Group for the financial year ended 2006
prepared under GAAP; and
(b) in relation to each Original Obligor other than the Company,
its unaudited financial statements for its financial year
ended 2006.
"ORIGINAL OBLIGOR" means an Original Borrower or an Original Guarantor.
"PARALLEL OBLIGATIONS" has the meaning as that which is contained in
the German Security Documents.
"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.
"PBGC" means the U.S. Pension Benefit Guaranty Corporation, or any
entity succeeding to all or any of its functions under ERISA.
"PENSION FUND OBLIGATIONS" means any amount that the Buyer Entities
(as defined in the Share Purchase Agreement) are required to
contribute to the Flexsys UK pension plan within ten days after
closing pursuant to the Share Purchase Agreement.
"PERFECTION REQUIREMENTS" means the making of the appropriate
registrations, filings or notifications of the Security Documents.
"QUOTATION DAY" means, in relation to any period for which an interest
rate is to be determined:
(a) (if the currency is domestic sterling) the first day of that
period;
(b) (if the currency is euro) two TARGET Days before the first day
of that period; or
(c) (for any other currency) two Business 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 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).
15
CONFORMED COPY
"REAL PROPERTY" means:
(a) any freehold, leasehold or immovable property (including the
freehold and leasehold property in the Relevant Jurisdictions
specified in the relevant Security Document); and
(b) any buildings, fixtures, fittings, fixed plant or machinery
from time to time situated on or forming part of that freehold
or leasehold property,
and all Related Rights.
"RECEIVER" means a receiver or receiver and manager or administrative
receiver of the whole or any part of the Charged Property.
"REFERENCE BANKS" means, in relation to LIBOR and Mandatory Cost the
principal London offices of the Agent and Citibank N.A. and, in
relation to EURIBOR, the principal office in Brussels or London of the
Agent and Citibank N.A. or such other banks as may be appointed by the
Agent in consultation with the Company.
"REGULATIONS T, U AND X" means, respectively, Regulations T, U and X
of the Board of Governors of the Federal Reserve System of the United
States (or any successor) as now and from time to time in effect from
the date of this Agreement.
"RELATED RIGHTS" means, in relation to any asset:
(a) the proceeds of sale of any part of that asset;
(b) all rights under any licence, agreement for sale or agreement
for lease in respect of that asset;
(c) all rights, powers, benefits, claims, contracts, warranties,
remedies, security, guarantees, indemnities or covenants for
title in respect of that asset; and
(d) any monies and proceeds paid or payable in respect of that
asset.
"RELEVANT INTERBANK MARKET" means in relation to euro, the European
interbank market and, in relation to any other currency, the London
interbank market.
"RELEVANT JURISDICTION" means:
(a) the jurisdiction of incorporation of each member of the Group;
(b) the jurisdiction where any asset subject to or intended to be
subject to the Transaction Security is situated;
(c) the jurisdiction whose laws govern the perfection of any of
the Security Documents; and
(d) the jurisdiction where any member of the Group is conducting
its business.
"REPAYMENT INSTALMENT" means each instalment for repayment of the
Facility A Loans referred to in Clause 9.1 (Repayment of Facility A
Loans).
16
CONFORMED COPY
"REPEATING REPRESENTATIONS" means each of the representations set out
in Clauses 21.1 (Status) to 21.6 (Governing law and enforcement),
Clause 21.8 (No default), paragraph (e) of Clause 21.9 (No misleading
information), Clause 21.11 (Pari passu ranking), Clause 21.20
(Ranking) to Clause 21.24 (Legal and Beneficial Owner), Clause 21.30
(Centre of main interests and establishments), Clause 21.33 (Pensions)
and 21.42 (No cluster bombs or anti-personnel mines) and, for each
Additional Obligor on the date of accession to the Finance Documents,
also means each of the representations set out in Clause 21.7 (No
filing taxes), Clause 21.10 (Financial statements), Clause 21.12 (No
proceedings pending or threatened), Clauses 21.16 (Deduction of Tax)
to 21.19 (Security), Clause 21.25 (Shares), Clause 21.32 (ERISA Plans)
and Clauses 21.35 (Federal Reserve Regulations) to 21.37
(Anti-Terrorism Laws).
"RESIGNATION LETTER" means a letter substantially in the form set out
in Schedule 7 (Form of Resignation Letter).
"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 27 (Changes to the Obligors).
"RESTRICTED PARTY" means any person listed:
(a) in the Annex to the Executive Order;
(b) on the "Specially Designated Nationals and Blocked Persons"
list maintained by the OFAC; or
(c) in any successor list to either of the foregoing.
"ROLLOVER LOAN" means one or more Facility B Loans:
(a) made or to be made on the same day that (i) a maturing
Facility B Loan is due to be repaid or (ii) a Borrower is
obliged to pay to the Agent for the Issuing Bank the amount of
any claim under a Letter of Credit;
(b) the aggregate amount of which is equal to or less than (i) the
maturing Facility B Loan or (ii) the amount of the claim under
the Letter of Credit;
(c) in the same currency as (i) the maturing Facility B Loan
(unless it arose as a result of the operation of Clause 8.2
(Unavailability of a currency) or (ii) the claim under the
Letter of Credit; and
(d) made or to be made to the same Borrower for the purpose of (i)
refinancing a maturing Facility B Loan or (ii) satisfying the
obligations of the Borrower to pay the amount of a claim under
the Letter of Credit to the Agent for the Issuing Bank.
"SCREEN RATE" means:
(a) in relation to LIBOR, the British Bankers' Association
Interest Settlement Rate for the relevant currency and period;
and
17
CONFORMED COPY
(b) in relation to EURIBOR, 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 Reuters 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.
"SEC" means the United States Securities and Exchange Commission or
any successor thereto.
"SECURED CONTRACTS" has the same meaning as that which is contained in
the Italian Share Pledge.
"SECURED OBLIGATIONS" means all obligations at any time due, owing or
incurred by any Obligor to any Secured Party under the Finance
Documents, whether present or future, actual or contingent (and
whether incurred solely or jointly and whether as principal or surety
or in some other capacity).
"SECURED PARTIES" means the Security Trustee, any Receiver or
Delegate, the Agent, and each Lender from time to time party to this
Agreement.
"SECURITY" means a mortgage, charge, pledge, lien or other security
interest securing any obligation of any person or any other agreement
or arrangement having a similar effect.
"SECURITY DOCUMENTS" means each of the documents listed as being a
Security Document in paragraph 2(a) of Part I of Schedule 2
(Conditions Precedent and Conditions Subsequent), any document
required to be delivered to the Agent under paragraph 2 of Part II of
Schedule 2 (Conditions Precedent and Conditions Subsequent) and any
document required to be delivered to the Agent under paragraph 15 of
Part III of Schedule 2 (Conditions Precedent and Conditions
Subsequent) as may be amended or substituted from time to time,
together with any other document entered into by any Obligor creating
or expressed to create any Security over all or any part of its assets
in respect of the obligations of any of the Obligors under any of the
Finance Documents.
"SELECTION NOTICE" means a notice substantially in the form set out in
Part II of Schedule 3 (Requests) given in accordance with Clause 12
(Interest Periods) in relation to Facility A.
"SHAREHOLDERS" means Solutia Inc. and Solutia Europe N.V..
"SHARES" means the shares or quotas subject to the Transaction
Security.
"SHARE PURCHASE AGREEMENT" means the share purchase agreement in
relation to the Akzo Nobel Retirement between Akzo Nobel Chemicals
International B.V., Akzo Nobel Chemicals Inc., ▇▇▇▇ ▇▇▇▇▇ ▇.▇.,
Flexsys Holding B.V., Flexsys America LP, Flexsys Rubber Chemicals Ltd
and Solutia Inc. dated as of 28 March 2007.
"SOLUTIA INC." means Solutia Inc, a corporation incorporated under the
laws of the State of Delaware, United States of America, with its
principal office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America.
18
CONFORMED COPY
"SOURCES AND USES TABLE" means the table set out in Schedule 13
(Sources and Uses Table).
"SPECIFIED TIME" means a time determined in accordance with Schedule 9
(Timetables).
"SUBORDINATED LOAN" means the non-amortising loans of a minimum
aggregate amount of US$100,000,000 and a maximum aggregate amount of
US$175,000,000 to be provided by Solutia Inc. (or any of its
affiliates) to one or more members of the Group for a term of six
years at a market rate, available for corporate purposes including
(but not limited to) the Akzo Nobel Retirement and which shall be
subordinated to the Facilities pursuant to the terms of the
Intercreditor Agreement and on terms and conditions (including (but
not limited to) the determination of the interest rate) satisfactory
to the Arranger.
"SUBORDINATED LOAN AGREEMENT" means the subordinated loan agreements
dated 26 April 2007 between Solutia Inc and one or more members of the
Group.
"SUBSIDIARY" means in relation to any company or corporation, a
company or corporation:
(a) which is controlled, directly or indirectly, by the first
mentioned company or corporation;
(b) more than half the issued share capital of which is
beneficially owned, directly or indirectly by the first
mentioned company or corporation; or
(c) which is a Subsidiary of another Subsidiary of the first
mentioned company or corporation,
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 direct its affairs and/or to control the composition of its
board of directors or equivalent body.
"SYNDICATION AND AMENDMENT AND RESTATEMENT AGREEMENT" means the
syndication and amendment and restatement agreement to this Agreement
made amongst others, between the Company, the Borrowers and the
Guarantors (each as defined in the Syndication and Amendment and
Restatement Agreement), KBC Bank N.V. as Agent, KBC Bank N.V. as
Security Trustee, the Existing Lenders and the New Lenders (each as
defined in the Syndication and Amendment and Restatement Agreement)
dated on or about 23 May 2007.
"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).
19
CONFORMED COPY
"TERMINATION DATE" means:
(a) in relation to Facility A the fifth anniversary of the date of
this Agreement; and
(b) in relation to Facility B the fifth anniversary of the date of
this Agreement.
"TOTAL COMMITMENTS" means the aggregate of the Total Facility A
Commitments and the Total Facility B Commitments, being US$225,000,000
at the date of this Agreement.
"TOTAL FACILITY A COMMITMENTS" means the aggregate of the Facility A
Commitments, being US$75,000,000 at the date of this Agreement.
"TOTAL FACILITY B COMMITMENTS" means the aggregate of the Facility B
Commitments, being US$150,000,000 at the date of this Agreement.
"TRANSACTION SECURITY" means the Security created or expressed to be
created pursuant to the Security Documents.
"TRANSFER CERTIFICATE" means a certificate substantially in one of the
forms set out in Schedule 5 (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.
"UK BORROWER" means a Borrower whose jurisdiction or organisation is
England and Wales.
"UK GUARANTOR" means a Guarantor whose jurisdiction or organisation is
England and Wales.
"UK OBLIGOR" means Flexsys Rubber Chemicals Limited and any other UK
Borrower or UK Guarantor.
"UNFUNDED PENSION LIABILITY" means the excess of an Employee Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that plan's assets, determined in accordance with the
assumptions used for funding the Employee Plan pursuant to Section 412
of the Code for the applicable plan year.
"UNPAID SUM" means any sum due and payable but unpaid by an Obligor
under the Finance Documents.
"U.S." and "UNITED STATES" means the United States of America, its
territories, possessions and other areas subject to the jurisdiction
of the United States of America.
"U.S. BORROWER" means a Borrower whose jurisdiction of organisation is
a state of the United States of America or the District of Columbia.
"U.S. GUARANTOR" means a Guarantor whose jurisdiction of organisation
is a state of the United States of America or the District of
Columbia.
20
CONFORMED COPY
"U.S. OBLIGOR" means Flexsys America L.P. and any other U.S. Borrower
or U.S. Guarantor which is constituted under the laws of any state of
the United States of America or the District of Columbia.
"U.S. TAX" means any federal, state, local income, gross receipts,
license, premium, windfall profits, customs duties, capital stock,
franchise, profits, withholding, social security (or similar), real
property, personal property, sales, use, registration, value added,
alternative or add-on minimum, estimated or other tax of any kind
whatsoever, imposed by the United States, including any interest,
penalty or addition thereto, whether disputed or not.
"UTILISATION" means a Loan or a Letter of Credit.
"UTILISATION DATE" means the date on which a Utilisation is 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", the "SECURITY TRUSTEE",
any "FINANCE PARTY", any "SECURED PARTY", any
"LENDER", any "OBLIGOR" or any "PARTY" shall be
construed so as to include its successors in title,
permitted assigns and permitted transferees and, in
the case of the Security Trustee, any person for the
time being appointed as trustee or trustees in
accordance with this Agreement;
(ii) "ASSETS" includes present and future properties,
revenues and rights of every description;
(iii) a "FINANCE DOCUMENT" or any other agreement or
instrument is a reference to that Finance Document or
other agreement or instrument as amended, novated,
supplemented, extended, replaced or restated;
(iv) "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;
(v) a "PERSON" includes any individual, firm, company,
corporation, government, state or agency of a state or
any association, trust, joint venture, consortium or
partnership (whether or not having separate legal
personality);
(vi) a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having
the force of law) of any governmental,
intergovernmental or supranational body, agency,
department or regulatory, self-regulatory or other
authority or organisation;
21
CONFORMED COPY
(vii) a provision of law is a reference to that provision as
amended or re-enacted; and
(viii) 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 (other than an Event of Default) is "CONTINUING" if
it has not been remedied or waived and an Event of Default is
"CONTINUING" if it has not been waived.
1.3 CURRENCY SYMBOLS AND DEFINITIONS
"US$" and "DOLLARS" denote lawful currency of the United States of
America, "(pound)" and "sterling" denotes lawful currency of the
United Kingdom, "EUR" and "EURO" means the single currency unit of the
Participating Member States and "(yen)" and "yen" denotes lawful
currency of Japan.
1.4 DUTCH TERMS
In this Agreement, where it relates to a Dutch entity, a reference to:
(a) a necessary action to authorise, where applicable, includes
without limitation:
(i) any action required to comply with the Dutch Works
Council Act (Wet op de ondernemingsraden); and
(ii) obtaining unconditional positive advice (advies) from
each competent works council;
(b) a winding-up, administration or dissolution includes a Dutch
entity being:
(i) declared bankrupt (failliet verklaard);
(ii) dissolved (ontbonden);
(c) a moratorium includes surseance van betaling and granted a
moratorium includes surseance verleend;
(d) a trustee in bankruptcy includes a curator,
(e) an administrator includes a bewindvoerder;
(f) a receiver or an administrative receiver does not include a
curator or bewindvoerder, and
(g) an attachment includes a beslag.
22
CONFORMED COPY
1.5 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.
SECTION 2
THE FACILITIES
2. THE FACILITIES
2.1 THE FACILITIES
Subject to the terms of this Agreement, the Lenders make available to
the Borrowers:
(a) a multicurrency term loan facility in an aggregate amount
equal to the Total Facility A Commitments; and
(b) a multicurrency revolving credit facility in an aggregate
amount equal to the Total Facility B 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 DESIGNATED ENTITIES
Where a Lender (each a "DESIGNATED LENDER") has designated in the
signature pages to this Agreement an Affiliate of itself (each a
"DESIGNATED ENTITY") as its Facility Office for the purposes of
participating in or making Loans to a particular Borrower, the Parties
unconditionally and irrevocably agree that such Designated Entity
shall:
(a) not have any Commitment (which shall remain with the
Designating Lender);
(b) be entitled to all rights and benefits (other than voting
rights which shall remain with the Designating Lender) under
this Agreement relating to its participation in any Loan to
such a Borrower; and
(c) have the corresponding duties of a Lender in relation to such
Loans, and shall be a party to this Agreement for that
purpose.
Such Designating Lender shall procure, subject to the terms of this
Agreement, that the Designated Entity participates in a Loan to such a
Borrower in place of the Designating
23
CONFORMED COPY
Lender and the Parties shall be entitled to treat such Designated
Entity as a Lender accordingly.
3. PURPOSE
3.1 PURPOSE
Each Borrower shall apply all amounts borrowed by it under Facility A
and Facility B towards general corporate purposes including (but not
limited to) the Akzo Nobel Retirement (in combination with the
Subordinated Loan), the financing or refinancing of the Crystex
Acquisition, payment of the Long Term Incentive Compensation and
payment of the Pension Fund Obligations.
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
No Borrower may deliver a Utilisation Request unless the Agent has
received all of the documents and other evidence listed in Part I of
Schedule 2 (Conditions Precedent and Conditions Subsequent) in form
and substance satisfactory to the Agent. The Agent shall notify the
Company and the Lenders promptly upon being so satisfied.
4.2 FURTHER CONDITIONS PRECEDENT
(a) 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:
(i) in the case of a Rollover Loan, no Event of Default is
continuing or would result from the proposed Loan and,
in the case of any other Loan, no Default is
continuing or would result from the proposed Loan; and
(ii) the Repeating Representations to be made by each
Obligor are true in all material respects.
(b) The Lenders will only be obliged to comply with Clause 8.3
(Change of currency) if, on the first day of an Interest
Period, no Default is continuing or would result from the
change of currency and the Repeating Representations to be
made by each Obligor are true in all material respects.
(c) In the case of any Utilisation, no Crystallisation Event (as
defined in the applicable Japanese Security Document) has
occurred in respect of any Japanese Security Document given in
favour of the Finance Parties.
4.3 CONDITIONS RELATING TO OPTIONAL CURRENCIES
A currency will constitute an Optional Currency in relation to a
Utilisation if:
(a) it is readily available in the amount required and freely
convertible into the Base Currency in the Relevant Interbank
Market on the Quotation Day and the Utilisation Date for that
Utilisation; and
24
CONFORMED COPY
(b) it is euros, sterling or yen.
4.4 MAXIMUM NUMBER OF UTILISATIONS
(a) A Borrower may not deliver a Facility B Utilisation Request if
as a result of the proposed Utilisation seven or more Facility
B Utilisations would be outstanding.
(b) A Borrower may not request that a Facility A Loan be divided.
(c) Any Loan made by a single Lender under Clause 8.2
(Unavailability of a currency) shall not be taken into account
in this Clause 4.4.
25
CONFORMED COPY
SECTION 3
UTILISATION
5. UTILISATION
5.1 DELIVERY OF A UTILISATION REQUEST
A 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 is irrevocable and will not be
regarded as having been duly completed unless:
(i) it identifies the Facility to be utilised;
(ii) the proposed Utilisation Date is a Business Day within
the Availability Period applicable to that Facility;
(iii) the currency and amount of the Utilisation comply with
Clause 5.3 (Currency and amount); and
(iv) the proposed Interest Period complies with Clause 12
(Interest Periods).
(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 the
Base Currency or an Optional Currency.
(b) The amount of the proposed Loan must be:
(i) if the currency selected is the Base Currency,
US$75,000,000 for Facility A and a minimum of
US$5,000,000 for Facility B or in either case, if
less, the Available Facility; or
(ii) if the currency selected is an Optional Currency for
Facility A and Facility B the equivalent amounts to
that specified in paragraph (b)(i) above converted
into the Optional Currency or, if less, the Available
Facility; and
(iii) in any event such that its Base Currency Amount is
less than or equal to the Available Facility; and
(iv) provided that, to the extent ever utilised by a Dutch
Obligor, the minimum amount to be drawn by it shall
not be less than the equivalent of EUR 50,000.
5.4 LENDERS' PARTICIPATION
(a) If the conditions set out in this Agreement have been met,
each Lender shall make its participation in each Loan
available by the Utilisation Date through its Facility Office.
26
CONFORMED COPY
(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.
(c) The Agent shall determine the Base Currency Amount of each
Loan which is to be made in an Optional Currency and shall
notify each Lender of the amount, currency and the Base
Currency Amount of each Loan and the amount of its
participation in that Loan, in each case by the Specified
Time.
5.5 CANCELLATION OF COMMITMENT
(a) The Total Facility A Commitments shall be immediately
cancelled at the end of the Availability Period for Facility A.
(b) The Total Facility B Commitments shall be immediately
cancelled at the end of the Availability Period for Facility B.
6. UTILISATION - LETTERS OF CREDIT
6.1 GENERAL
(a) In this Clause 6 and Clause 7 (Letters of Credit):
(i) "EXPIRY DATE" means, for a Letter of Credit, the last
day of its Term;
(ii) "L/C PROPORTION" means, in relation to a Lender in
respect of any Letter of Credit, the proportion
(expressed as a percentage) borne by that Lender's
Available Commitment to the Available Facility
immediately prior to the issue of that Letter of
Credit, adjusted to reflect any assignment or transfer
under this Agreement to or by that Lender;
(iii) "RENEWAL REQUEST" means a written notice delivered to
the Agent in accordance with Clause 6.7 (Renewal of a
Letter of Credit); and
(iv) "TERM" means each period determined under this
Agreement for which the Issuing Bank is under a
liability under a Letter of Credit.
(b) Any reference in this Agreement to:
(i) a "FINANCE PARTY" includes the Issuing Bank;
(ii) the Interest Period of a Letter of Credit will be
construed as a reference to the Term of that Letter of
Credit;
(iii) an amount borrowed includes any amount utilised by way
of Letter of Credit;
(iv) a Utilisation made or to be made to a Borrower
includes a Letter of Credit issued on its behalf;
(v) a Lender funding its participation in a Utilisation
includes a Lender participating in a Letter of Credit;
27
CONFORMED COPY
(vi) amounts outstanding under this Agreement include
amounts outstanding under or in respect of any Letter
of Credit;
(vii) an outstanding amount of a Letter of Credit at any
time is the maximum amount that is or may be payable
by the Borrower that requested the issue of that
Letter of Credit at that time;
(viii) a Borrower "REPAYING" or "PREPAYING" a Letter of
Credit means:
(A) that Borrower providing cash cover for that
Letter of Credit;
(B) the maximum amount payable under the Letter of
Credit being reduced in accordance with its
terms; or
(C) the Issuing Bank being satisfied that it has
no further liability under that Letter of
Credit,
and the amount by which a Letter of Credit is repaid or
prepaid under sub-paragraphs (viii)(A) and (viii)(B) above is
the amount of the relevant cash cover or reduction; and
(ix) a Borrower providing "CASH COVER" for a Letter of
Credit means a Borrower paying an amount in the
currency of the Letter of Credit to an
interest-bearing account in the name of that Borrower
and the following conditions are met:
(A) the account is with the Agent or the Issuing
Bank (if the cash cover is to be provided for
all the Lenders) or with a Lender (if the cash
cover is to be provided for that Lender);
(B) withdrawals from the account may only be made
to pay a Finance Party amounts due and payable
to it under this Agreement in respect of that
Letter of Credit until no amount is or may be
outstanding under that Letter of Credit; and
(C) that Borrower has executed a security
document, in form and substance satisfactory
to the Agent or the Finance Party with which
that account is held, creating a first ranking
security interest over that account.
(c) Clause 5 (Utilisation) does not apply to a Utilisation by way
of Letter of Credit.
(d) In determining the amount of the Available Facility and a
Lender's L/C Proportion of a proposed Letter of Credit for the
purposes of this Agreement the Available Commitment of a
Lender will be calculated ignoring any cash over provided for
outstanding Letters of Credit.
6.2 FACILITY B
An amount of up to US$50,000,000 of Facility B may be utilised by way
of Letters of Credit.
28
CONFORMED COPY
6.3 DELIVERY OF A UTILISATION REQUEST FOR LETTERS OF CREDIT
A Borrower may request a Letter of Credit to be issued by delivery to
the Agent of a duly completed Utilisation Request in the form of Part
IB of Schedule 3 (Requests) not later than the Specified Time.
6.4 COMPLETION OF A UTILISATION REQUEST FOR LETTERS OF CREDIT
Each Utilisation Request for a Letter of Credit is irrevocable and
will not be regarded as having been duly completed unless:
(a) it specifies that it is for a Letter of Credit and identifies
the Issuing Bank;
(b) the proposed Utilisation Date is a Business Day within the
Availability Period;
(c) the currency and amount of the Letter of Credit comply with
Clause 6.5 (Currency and amount);
(d) the form of Letter of Credit is attached;
(e) the Expiry Date of the Letter of Credit falls on or before the
Termination Date;
(f) the delivery instructions for the Letter of Credit are
specified; and
(g) it identifies the domicile of the beneficiary.
6.5 CURRENCY AND AMOUNT
(a) The currency specified in a Utilisation Request must be the
Base Currency or an Optional Currency.
(b) The amount of the proposed Letter of Credit must be an amount
whose Base Currency Amount is not more than the Available
Facility and which is:
(i) if the currency selected is the Base Currency, a
minimum of US$25,000 or, if less, the Available
Facility; or
(ii) if the currency selected is an Optional Currency, the
minimum amount (and if required, integral multiple)
specified by the Agent pursuant to paragraph (b)(ii)
of Clause 4.3 (Conditions relating to Optional
Currencies) or, if less, the Available Facility.
6.6 ISSUE OF LETTERS OF CREDIT
(a) If the conditions set out in this Agreement have been met, the
Issuing Bank shall issue the Letter of Credit on the
Utilisation Date.
(b) The Issuing Bank will only be obliged to comply with paragraph
(a) above if on the date of the Utilisation Request or Renewal
Request and on the proposed Utilisation Date:
(i) in the case of a Letter of Credit renewed in
accordance with Clause 6.7 (Renewal of a Letter of
Credit), no Event of Default is continuing or would
result from the proposed Utilisation and, in the case
of any other Utilisation, no Default is continuing or
would result from the proposed Utilisation; and
29
CONFORMED COPY
(ii) the Repeating Representations to be made by each
Obligor are true in all material respects.
(c) The amount of each Lender's participation in each Letter of
Credit will be equal to the proportion borne by its Available
Commitment to the Available Facility immediately prior to the
issue of the Letter of Credit.
(d) The Agent shall determine the Base Currency Amount of each
Letter of Credit which is to be issued in an Optional Currency
and shall notify the Issuing Bank and each Lender of the
details of the requested Letter of Credit and its
participation in that Letter of Credit by the Specified Time.
6.7 RENEWAL OF A LETTER OF CREDIT
(a) A Borrower may request any Letter of Credit issued on its
behalf be renewed by delivery to the Agent of a Renewal
Request by the Specified Time.
(b) The Finance Parties shall treat any Renewal Request in the
same way as a Utilisation Request for a Letter of Credit
except that the conditions set out in paragraph (d) of Clause
6.4 (Completion of a Utilisation Request for Letters of
Credit) shall not apply.
(c) The terms of each renewed Letter of Credit shall be the same
as those of the relevant Letter of Credit immediately prior to
its renewal, except that:
(i) its amount may be less than the amount of the Letter
of Credit immediately prior to its renewal; and
(ii) its Term shall start on the date which was the Expiry
Date of the Letter of Credit immediately prior to its
renewal, and shall end on the proposed Expiry Date
specified in the Renewal Request.
(d) If the conditions set out in this Agreement have been met, the
Issuing Bank shall amend and re-issue any Letter of Credit
pursuant to a Renewal Request.
6.8 REVALUATION OF LETTERS OF CREDIT
(a) If any Letter of Credit is denominated in an Optional
Currency, the Agent shall at three monthly intervals after the
date of the Letter of Credit, recalculate the Base Currency
Amount of that Letter of Credit by notionally converting into
the Base Currency the outstanding amount of that Letter of
Credit on the basis of the Agent's Spot Rate of Exchange on
the date of calculation.
(b) A Borrower shall, if requested by the Agent within five days
of any calculation under paragraph (a) above, ensure that
within three Business Days sufficient Facility B Utilisations
are prepaid to prevent the Base Currency Amount of the
Facility B Utilisations exceeding the Total Facility B
Commitments following any adjustment to a Base Currency Amount
under paragraph (a) above.
30
CONFORMED COPY
7. LETTERS OF CREDIT
7.1 IMMEDIATELY PAYABLE
If a Letter of Credit or any amount outstanding under a Letter of
Credit becomes payable and no claim (as defined in paragraph (a) of
Clause 7.4 (Claims under a Letter of Credit) has been made in respect
of that Letter of Credit or amount outstanding under that Letter of
Credit, the Borrower that requested the issue of that Letter of Credit
shall repay or prepay that amount immediately.
7.2 ASSIGNMENTS AND TRANSFERS
(a) Notwithstanding any other provision of this Agreement, the
consent of the relevant Issuing Bank is required for any
assignment or transfer of any Lender's rights and/or
obligations under Facility B.
(b) If paragraph (a) and the conditions and procedure for transfer
specified in Clause 26 (Changes to the Lenders) are satisfied,
then on the Transfer Date the Issuing Bank and the New Lender
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 relevant Issuing Bank and the
Existing Lender shall each be released from further
obligations to each other under this Agreement.
7.3 FEE PAYABLE IN RESPECT OF LETTERS OF CREDIT
(a) Each Borrower shall pay to the relevant Issuing Bank a
fronting fee in respect of each Letter of Credit requested by
it and issued by such Issuing Bank in the amount and at the
times agreed in writing between the relevant Issuing Bank and
the Company. A reference in this Agreement to a Fee Letter
shall include any written agreement referred to in this
paragraph.
(b) Each Borrower shall pay to the Agent (for the account of each
Lender) a letter of credit fee in the Base Currency computed
at the same rate as the Margin on the outstanding amount of
each Letter of Credit requested by it for the period from the
issue of that Letter of Credit until its Expiry Date. This fee
shall be distributed according to each Lender's L/C Proportion
of that Letter of Credit.
(c) The accrued letter of credit fee on a Letter of Credit shall
be payable on the first day of each successive period of three
months (or such shorter period as shall end on the Expiry Date
for that Letter of Credit) starting on the date of issue of
that Letter of Credit.
(d) If a Borrower cash covers any part of a Letter of Credit then:
(i) the fronting fee payable to the relevant Issuing Bank
and the letter of credit fee payable for the account
of each Lender shall continue to be payable until the
expiry of the Letter of Credit;
(ii) the Borrower will be entitled to withdraw the interest
accrued on the cash cover to pay those fees.
31
CONFORMED COPY
7.4 CLAIMS UNDER A LETTER OF CREDIT
(a) Each Borrower irrevocably and unconditionally authorises the
relevant Issuing Bank to pay any claim made or purported to be
made under a Letter of Credit requested by it and which
appears on its face to be in order (a "CLAIM").
(b) Each Borrower which requested a Letter of Credit shall
immediately on demand pay to the Agent for the relevant
Issuing Bank an amount equal to the amount of any claim under
that Letter of Credit.
(c) Each Borrower acknowledges that the relevant Issuing Bank:
(i) is not obliged to carry out any investigation or seek
any confirmation from any other person before paying a
claim; and
(ii) deals in documents only and will not be concerned with
the legality of a claim or any underlying transaction
or any available set-off, counterclaim or other
defence of any person.
(d) The obligations of a Borrower under this Clause will not be
affected by:
(i) the sufficiency, accuracy or genuineness of any claim
or any other document; or
(ii) any incapacity of, or limitation on the powers of, any
person signing a claim or other document.
7.5 INDEMNITIES
(a) Each Borrower shall immediately on demand indemnify an Issuing
Bank against any cost, loss or liability incurred by such
Issuing Bank (otherwise than by reason of such Issuing Bank's
gross negligence or wilful misconduct) in acting as the
Issuing Bank under any Letter of Credit requested by that
Borrower.
(b) Each Lender shall (according to its L/C Proportion)
immediately on demand indemnify an Issuing Bank against any
cost, loss or liability incurred by such Issuing Bank
(otherwise than by reason of such Issuing Bank's gross
negligence or wilful misconduct) in acting as the Issuing Bank
under any Letter of Credit (unless such Issuing Bank has been
reimbursed by an Obligor pursuant to a Finance Document).
(c) If any Lender is not permitted (by its constitutional
documents or any applicable law) to comply with paragraph (b)
above), then that Lender will not be obliged to comply with
paragraph (b) and shall instead be deemed to have taken, on
the date the Letter of Credit is issued (or if later, on the
date the Lender's participation in the Letter of Credit is
transferred or assigned to the Lender in accordance with the
terms of this Agreement), an undivided interest and
participation in the Letter of Credit in an amount equal to
its L/C Proportion of that Letter of Credit. On receipt of
demand from the Agent, that Lender shall pay to the Agent (for
the account of the Issuing Bank) an amount equal to its L/C
Proportion of the amount demanded under paragraph (b) above.
32
CONFORMED COPY
(d) The Borrower which requested a Letter of Credit shall
immediately on demand reimburse any Lender for any payment it
makes to an Issuing Bank under this Clause 7.5 (Indemnities)
in respect of that Letter of Credit.
(e) The obligations of each Lender under this Clause are
continuing obligations and will extend to the ultimate balance
of sums payable by that Lender in respect of any Letter of
Credit, regardless of any intermediate payment or discharge in
whole or in part.
(f) The obligations of any Lender or any Borrower under this
Clause will not be affected by any act, omission, matter or
thing which, but for this Clause, would reduce, release or
prejudice any of its obligations under this Clause (without
limitation and whether or not known to it or any other person)
including:
(i) any time, waiver or consent granted to, or composition
with, any Obligor, any beneficiary under a Letter of
Credit or other person;
(ii) the release of any other Obligor or any other person
under the terms of any composition or arrangement;
(iii) 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, any beneficiary under a Letter
of Credit 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;
(iv) any incapacity or lack of power, authority or legal
personality of or dissolution or change in the members
or status of an Obligor, any beneficiary under a
Letter of Credit or any other person;
(v) any amendment (however fundamental) or replacement of
a Finance Document, any Letter of Credit or any other
document or security;
(vi) any unenforceability, illegality or invalidity of any
obligation of any person under any Finance Document,
any Letter of Credit or any other document or
security; or
(vii) any insolvency or similar proceedings.
7.6 RIGHTS OF CONTRIBUTION
No Obligor will be entitled to any right of contribution or indemnity
from any Finance Party in respect of any payment it may make under
this Clause 7.
7.7 ROLE OF THE ISSUING BANK
(a) Nothing in this Agreement constitutes an Issuing Bank as a
trustee or fiduciary of any other person.
(b) An Issuing Bank shall not be bound to account to any Lender
for any sum or the profit element of any sum received by it
for its own account.
33
CONFORMED COPY
(c) An Issuing Bank may accept deposits from, lend money to and
generally engage in any kind of banking or other business with
any member of the Group.
(d) An Issuing Bank 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.
(e) An Issuing Bank may engage, pay for and rely on the advice or
services of any lawyers, accountants, surveyors or other
experts.
(f) An Issuing Bank may act in relation to the Finance Documents
through its personnel and agents.
(g) An Issuing Bank is not responsible for:
(i) the adequacy, accuracy and/or completeness of any
information (whether oral or written) provided by the
Agent, any Party (including itself), or any other
person under or in connection with any Finance
Document, the transactions contemplated by the Finance
Documents or any other agreement, arrangement or
document entered into, made or executed in
anticipation of, under or in connection with any
Finance Document; or
(ii) 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, under or in connection
with any Finance Document.
7.8 EXCLUSION OF LIABILITY
(a) Without limiting paragraph (b) below, an Issuing Bank will not
be liable 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 an Issuing Bank) may take any proceedings
against any officer, employee or agent of an Issuing Bank in
respect of any claim it might have against the Issuing Bank or
in respect of any act or omission of any kind by that officer,
employee or agent in relation to any Finance Document.
7.9 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 relevant Issuing Bank 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, those listed in paragraphs (a) to (d) of Clause 28.14 (Credit
appraisal by the Secured Parties).
34
7.10 ADDRESS FOR NOTICES
The address and fax number (and the department or officer, if any, for
whose attention the communication is to be made) of the relevant
Issuing Bank for any communication or document to be made or delivered
under or in connection with the Finance Documents is that notified in
writing to the Agent prior to the date of this Agreement or any
substitute address, fax number, department or officer as the Issuing
Bank may notify to the Agent by not less than five Business Days'
notice.
7.11 AMENDMENTS AND WAIVERS
Notwithstanding any other provision of this Agreement, an amendment or
waiver which relates to the rights or obligations of the Issuing Bank
may not be effected without the consent of the relevant Issuing Bank.
8. OPTIONAL CURRENCIES
8.1 SELECTION OF CURRENCY
(a) A Borrower (or the Company on behalf of a Borrower) shall
select the currency of a Utilisation:
(i) (in the case of an initial Utilisation) in a
Utilisation Request; and
(ii) (afterwards in relation to a Facility A Loan made to
it) in a Selection Notice.
(b) If a Borrower (or the Company on behalf of a Borrower) fails
to issue a Selection Notice in relation to a Facility A Loan,
the Loan will remain denominated for its next Interest Period
in the same currency in which it is then outstanding.
(c) If a Borrower (or the Company on behalf of a Borrower) issues
a Selection Notice requesting a change of currency and the
first day of the requested Interest Period is not a Business
Day for the new currency, the Agent shall promptly notify the
Borrower and the Lenders and the Loan will remain in the
existing currency (with Interest Periods running from one
Business Day until the next Business Day) until the next day
which is a Business Day for both currencies, on which day the
requested Interest Period will begin.
8.2 UNAVAILABILITY OF A CURRENCY
If before the Specified Time on any Quotation Day:
(a) a Lender notifies the Agent that the Optional Currency
requested is not readily available to it in the amount
required; or
(b) a Lender notifies the Agent that compliance with its
obligation to participate in a Loan in the proposed Optional
Currency would contravene a law or regulation applicable to
it,
the Agent will give notice to the relevant Borrower to that effect by
the Specified Time on that day. In this event, any Lender that gives
notice pursuant to this Clause 8.2 will be required to participate in
the Loan in the Base Currency (in an amount equal to that Lender's
proportion of the Base Currency Amount, or in respect of a Rollover
Loan, an
35
CONFORMED COPY
amount equal to that Lender's proportion of the Base Currency Amount
of the Rollover Loan that is due to be made) and its participation
will be treated as a separate Loan denominated in the Base Currency
during that Interest Period.
8.3 CHANGE OF CURRENCY
(a) If a Facility A Loan is to be denominated in different
currencies during two successive Interest Periods:
(i) if the currency for the second Interest Period is an
Optional Currency, the amount of the Loan in that
Optional Currency will be calculated by the Agent as
the amount of that Optional Currency equal to the Base
Currency Amount of the Loan at the Agent's Spot Rate
of Exchange at the Specified Time;
(ii) if the currency for the second Interest Period is the
Base Currency, the amount of the Loan will be equal to
the Base Currency Amount;
(iii) (unless the Agent and the Borrower agree otherwise in
accordance with paragraph (b) below) the Borrower that
has borrowed the Loan shall repay it on the last day
of the first Interest Period in the currency in which
it was denominated for that Interest Period; and
(iv) (subject to Clause 4.2 (Further conditions precedent))
the Lenders shall re-advance the Loan in the new
currency in accordance with Clause 8.5 (Agent's
calculations).
(b) If the Agent and the Borrower that has borrowed the Facility A
Loan agree, the Agent shall:
(i) apply the amount paid to it by the Lenders pursuant to
paragraph (a)(iv) above (or so much of that amount as
is necessary) in or towards purchase of an amount in
the currency in which the Facility A Loan is
outstanding for the first Interest Period; and
(ii) use the amount it purchases in or towards satisfaction
of the relevant Borrower's obligations under paragraph
(a)(iii) above.
(c) If the amount purchased by the Agent pursuant to paragraph
(b)(i) above is less than the amount required to be repaid by
the relevant Borrower, the Agent shall promptly notify that
Borrower and that Borrower shall, on the last day of the first
Interest Period, pay an amount to the Agent (in the currency
of the outstanding Facility A Loan for the first Interest
Period) equal to the difference.
(d) If any part of the amount paid to the Agent by the Lenders
pursuant to paragraph (a)(iv) above is not needed to purchase
the amount required to be repaid by the relevant Borrower, the
Agent shall promptly notify that Borrower and pay that
Borrower, on the last day of the first Interest Period that
part of that amount (in the new currency).
36
CONFORMED COPY
8.4 SAME OPTIONAL CURRENCY DURING SUCCESSIVE INTEREST PERIODS
(a) If a Facility A Loan is to be denominated in the same Optional
Currency during two successive Interest Periods, the Agent
shall calculate the amount of the Facility A Loan in the
Optional Currency for the second of those Interest Periods (by
calculating the amount of Optional Currency equal to the Base
Currency Amount of that Facility A Loan at the Agent's Spot
Rate of Exchange at the Specified Time) and (subject to
paragraph (b) below):
(i) if the amount calculated is less than the existing
amount of that Facility A Loan in the Optional
Currency during the first Interest Period, promptly
notify the Borrower that has borrowed that Facility A
Loan and that Borrower shall pay, on the last day of
the first Interest Period, an amount equal to the
difference; or
(ii) if the amount calculated is more than the existing
amount of that Facility A Loan in the Optional
Currency during the first Interest Period, promptly
notify each Lender and, if no Event of Default is
continuing, each Lender shall, on the last day of the
first Interest Period, pay its participation in an
amount equal to the difference.
(b) If the calculation made by the Agent pursuant to paragraph (a)
above shows that the amount of the Facility A Loan in the
Optional Currency for the second of those Interest Periods
converted into the Base Currency at the Agent's Spot Rate of
Exchange at the Specified Time has increased or decreased by
less than 5 per cent. compared to its Base Currency Amount
(taking into account any payments made pursuant to paragraph
(a) above), no notification shall be made by the Agent and no
payment shall be required under paragraph (a) above.
8.5 AGENT'S CALCULATIONS
(a) All calculations made by the Agent pursuant to this Clause 8
will take into account any repayment, prepayment,
consolidation or division of Facility A Loans to be made on
the last day of the first Interest Period.
(b) Each Lender's participation in a Loan will, subject to
paragraph (a) above, be determined in accordance with
paragraph (b) of Clause 5.4 (Lenders' participation).
37
CONFORMED COPY
SECTION 4
REPAYMENT, PREPAYMENT AND CANCELLATION
9. REPAYMENT
9.1 REPAYMENT OF FACILITY A LOANS
(a) Each Borrower shall repay the Facility A Loans made to it in
instalments by repaying on each Repayment Date the amount set
out opposite each Repayment Date below:
REPAYMENT DATE REPAYMENT INSTALMENT
On the first anniversary of the date US$15,000,000
of this Agreement
On the second anniversary of the date US$15,000,000
of this Agreement
On the third anniversary of the date US$15,000,000
of this Agreement
On the fourth anniversary of the date US$15,000,000
of this Agreement
On the fifth anniversary of the date An amount in dollars
of this Agreement equal to the Facility
A Loan then outstanding
in relation to the
relevant Borrower shall
be repaid in full.
(b) Any repayment or prepayment of a Facility A Loan denominated
in an Optional Currency shall reduce the amount of that
Facility A Loan by the amount of that Optional Currency repaid
and shall reduce the Base Currency Amount of that Facility A
Loan proportionally.
(c) No Borrower may reborrow any part of Facility A which is
repaid.
9.2 REPAYMENT OF FACILITY B LOANS
(a) Each Borrower which has drawn a Facility B Loan shall repay
that Loan on the last day of its Interest Period and, in any
event, shall repay in full an amount in dollars equal to the
Facility B Loan then outstanding in relation to the relevant
Borrower no later than the Termination Date.
(b) Any reduction of the Total Facility B Commitments shall reduce
rateably the Commitment of each Lender.
(c) A Borrower may reborrow any part of Facility B which is
repaid.
38
CONFORMED COPY
10. PREPAYMENT AND CANCELLATION
10.1 ILLEGALITY
(a) If, at any time, it is or will become 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 Utilisation:
(i) that Lender shall promptly notify the Agent upon
becoming aware of that event;
(ii) upon the Agent notifying the Company, the Commitment
of that Lender will be immediately cancelled; and
(iii) each Borrower shall repay that Lender's participation
in the Utilisations made to that Borrower on the last
day of the Interest Period for each Utilisation
occurring after the Agent has notified the Company or,
if earlier, the date specified by the Lender in the
notice delivered to the Agent.
(b) If, at any time, it is or will become unlawful for the Issuing
Bank to issue or leave outstanding any Letter of Credit the
Issuing Bank shall promptly notify the Agent upon becoming
aware of that event and upon the Agent notifying the Company,
Facility B shall cease to be available for the issue of
Letters of Credit and each Borrower shall use its best
endeavours to procure the release of each Letter of Credit
requested by that Borrower and outstanding at such time.
10.2 CHANGE OF CONTROL
(a) As of the Akzo Nobel Retirement, if Solutia Inc. or any of its
Subsidiaries cease to control, either directly or indirectly:
(i) the Company;
(ii) Flexsys Rubber Chemicals Limited; or
(iii) the partnership interests in Flexsys America L.P.
(being a "CHANGE OF CONTROL"), the Company and the relevant
Obligor shall immediately notify the Agent.
(b) For the purposes of paragraph (a) of this Clause 10.2, the
cessation or change of ownership of the Company, Flexsys
America L.P. or Flexsys Rubber Chemicals Limited that does not
have an adverse effect (whether legal or otherwise) on the
nature of any transaction Security or any further security
granted (or that may be granted) pursuant to the Finance
Documents or on the rights or remedies of the Lenders under
any such Transaction Security or other such Security or under
the Finance Documents, shall be disregarded, PROVIDED THAT the
Group remains wholly owned by Solutia Inc, or any of its
subsidiaries.
For the purposes of paragraph (a) above "CONTROL" means:
(i) the power (whether by way of ownership of shares,
proxy, contract, agency or otherwise) to:
39
CONFORMED COPY
(A) cast, or control the casting of, more than one
half of the maximum number of votes that might
be cast at a general meeting of the relevant
Obligor; or
(B) appoint or remove all, or the majority, of the
directors or other equivalent officers of the
relevant Obligor; or
(C) give directions with respect to the operating
and financial policies of the Company which
the directors or other equivalent officers of
the relevant Obligor are obliged to comply
with; or
(D) the holding more than one half of the issued
share capital of the relevant Obligor
(excluding any part of that issued share
capital that carries no right to participate
beyond a specified amount in a distribution of
either profits or capital).
(c) If a Lender so requires and notifies the Agent within 30 days
of the Company notifying the Agent of a Change of Control, the
Agent shall, by not less than 30 days notice to the Company,
cancel the Commitment of that Lender and declare the
participation of that Lender in all outstanding Utilisations,
together with accrued interest, and all other amounts accrued
under the Finance Documents immediately due and payable,
whereupon the Commitment of that Lender will be cancelled and
all such outstanding amounts will become immediately due and
payable.
10.3 VOLUNTARY CANCELLATION
The Company may, if it gives notice to the Agent by no later than
11:00 am on the Business Day immediately preceding the day the
cancellation is to take effect, cancel the whole or any part (being a
minimum amount of US$10,000,000 and the integral multiples thereof) of
the undrawn Commitments under the Facility B Loan. Any cancellation
under this Clause 10.3 shall reduce the Commitments of the Lenders
rateably under that Facility.
10.4 VOLUNTARY PREPAYMENT OF FACILITY A LOANS
(a) A Borrower to which a Facility A Loan has been made may, if it
gives the Agent not less than 5 Business Days' (or such
shorter period as the Agent acting on instruction of the
Majority Lenders may agree) prior notice, prepay the whole or
any part of any Facility A Loan (but, if in part, being an
amount that reduces the Base Currency Amount of the Facility A
Loan by a minimum amount of US$1,000,000 and integral
multiples thereof).
(b) A Facility A Loan may only be prepaid on the last day of an
Interest Period (or, if earlier, the day on which the
applicable Available Facility is zero).
(c) Any prepayment under this Clause 10 shall satisfy the
obligations under Clause 9.1 (Repayment of Facility A Loans)
pro rata for each repayment instalment prior to the occurrence
of a Default and, thereafter, in inverse chronological order.
40
CONFORMED COPY
10.5 RIGHT OF REPAYMENT AND CANCELLATION IN RELATION TO A SINGLE LENDER
(a) If:
(i) any sum payable to any Lender by an Obligor is
required to be increased under paragraph (c) of Clause
15.2 (Tax gross-up); or
(ii) any Lender claims indemnification from the Company
under Clause 15.3 (Tax indemnity) or Clause 16.1
(Increased costs); or
(iii) any Lender notifies the Agent of its Additional Cost
Rate under paragraph 3 of Schedule 4 (Mandatory Cost
Formulae);
the Company may, whilst (in the case of paragraphs (i) and
(ii) above) the circumstance giving rise to the requirement or
indemnification continues or (in the case of paragraph (iii)
above) that Additional Cost Rate is greater than zero, 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.
(b) On receipt of a notice referred to in paragraph (a) above, the
Commitment of that Lender shall immediately be reduced to
zero.
(c) On the last day of each Interest Period which ends after the
Company has given notice under paragraph (a) above (or, if
earlier, the date specified by the Company in that notice),
each Borrower to which a Utilisation is outstanding shall
repay that Lender's participation in that Utilisation.
10.6 RESTRICTIONS
(a) Any notice of cancellation or prepayment given by any Party
under this Clause 10 shall be irrevocable and, unless a
contrary indication appears in this Agreement, shall 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) No Borrower may reborrow any part of Facility A which is
prepaid.
(d) Unless a contrary indication appears in this Agreement, any
part of Facility B which is prepaid may be reborrowed in
accordance with the terms of this Agreement.
(e) The Borrowers 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.
(f) No amount of the Total Commitments cancelled under this
Agreement may be subsequently reinstated.
41
CONFORMED COPY
(g) If the Agent receives a notice under this Clause 10 it shall
promptly forward a copy of that notice to either the Company
or the affected Lender, as appropriate.
42
CONFORMED COPY
SECTION 5
COSTS OF UTILISATION
11. INTEREST
11.1 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) LIBOR or, in relation to any Loan in euro, EURIBOR; and
(c) Mandatory Cost, if any.
11.2 PAYMENT OF INTEREST
The Borrower to which a Loan has been made shall pay accrued interest
on that 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).
11.3 DEFAULT INTEREST
(a) To the extent permitted under applicable law, 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 one per cent higher than 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). Any interest accruing under this Clause 11.3
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 one per
cent. higher than the rate which would have applied if
the overdue amount had not become due.
(c) To the extent permitted under applicable law, 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.
11.4 NOTIFICATION OF RATES OF INTEREST
The Agent shall promptly notify the Lenders and the relevant Borrower
of the determination of a rate of interest under this Agreement.
43
CONFORMED COPY
12. INTEREST PERIODS
12.1 SELECTION OF INTEREST PERIODS
(a) A Borrower (or the Company on behalf of a 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 a Borrower) to which that Loan was made not later
than the Specified Time.
(c) If a Borrower (or the Company) fails to deliver a Selection
Notice to the Agent in accordance with paragraph (b) above,
the relevant Interest Period will, subject to Clause 12.2
(Changes to Interest Periods), be one Month.
(d) Subject to this Clause 12, a Borrower (or the Company) may
select an Interest Period of one, three or six Months or any
other period agreed between the Company and the Agent (acting
on the instructions of all the Lenders). In addition, in
relation to Facility A, a Borrower (or the Company on its
behalf) may select an Interest Period of a period of less than
one Month, if necessary to ensure that there are sufficient
Facility A Loans (with an aggregate Base Currency Amount equal
to or greater than the Repayment Instalment) which have an
Interest Period ending on a Facility A Repayment Date for the
Borrowers to make the Repayment Instalment due on that date.
(e) An Interest Period for a Loan shall not extend beyond the
Termination Date applicable to its Facility.
(f) 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.
12.2 CHANGES TO INTEREST PERIODS
(a) Prior to determining the interest rate for a Facility A Loan,
the Agent may shorten an Interest Period for any Facility A
Loan to ensure there are sufficient Facility A Loans (with an
aggregate Base Currency Amount equal to or greater than the
Repayment Instalment) which have an Interest Period ending on
a Facility A Repayment Date for the Borrowers to make the
Repayment Instalment due on that date.
(b) If the Agent makes any of the changes to an Interest Period
referred to in this Clause 12.2, it shall promptly notify the
Company and the Lenders.
12.3 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).
44
CONFORMED COPY
13. CHANGES TO THE CALCULATION OF INTEREST
13.1 ABSENCE OF QUOTATIONS
Subject to Clause 13.2 (Market disruption), if LIBOR or, if
applicable, 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 LIBOR or EURIBOR
shall be determined on the basis of the quotations of the remaining
Reference Banks.
13.2 MARKET DISRUPTION
(a) If a Market Disruption Event occurs in relation to a Loan for
any Interest Period, then 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 LIBOR or, if
applicable, 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 LIBOR or, if applicable, EURIBOR.
13.3 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.
(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.
13.4 BREAK COSTS
(a) Each 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
45
CONFORMED COPY
or Unpaid Sum being paid by that 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.
14. FEES
14.1 COMMITMENT FEE
(a) The Company shall pay to the Agent (for the account of each
Lender) a fee computed at the rate of 40 per cent. per annum
of the Margin applicable to Facility B on the daily undrawn
and uncancelled Available Commitment under Facility B accruing
from the date of this Agreement until the end of the Facility
B Availability Period.
(b) The accrued commitment fee is payable quarterly in arrears, on
the last day of the Facility B Availability Period and, if
cancelled in full, on the cancelled amount of the Facility B
Commitment at the time the cancellation is effective.
14.2 UTILISATION FEE
The Company shall pay to the Agent (for the account of each Lender) a
utilisation fee at the rate of:
(a) 0.05 per cent. per annum on the Facility B Loans then
outstanding, payable quarterly in arrears whenever the
aggregate of the Facility B Loans borrowed but not yet repaid
are equal to or greater than 33.33 per cent. of the Total
Facility B Commitments.
(b) 0.15 per cent. per annum on the Facility B Loans then
outstanding, payable quarterly in arrears whenever the
aggregate of the Facility B Loans borrowed but not yet repaid
are equal to or greater than 66.67 per cent. of the Total
Facility B Commitments.
14.3 FRONT END FEE
The Company shall pay to the Arrangers a front end fee in the amount
and at the times agreed in a Fee Letter.
14.4 AGENCY/SECURITY TRUSTEE FEE
The Company shall pay to the Agent (for its own account) an
agency/security trustee fee in the amount and at the times agreed in a
Fee Letter.
46
CONFORMED COPY
SECTION 6
ADDITIONAL PAYMENT OBLIGATIONS
15. TAX GROSS UP AND INDEMNITIES
15.1 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.
"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 15.2 (Tax gross-up)
or a payment under Clause 15.3 (Tax indemnity).
(b) Unless a contrary indication appears, in this Clause 15 a
reference to "determines" or "determined" means a
determination made in the absolute discretion of the person
making the determination.
15.2 TAX GROSS-UP
(a) Each Obligor shall make all payments to be made by it under
the Finance Documents 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 obliged to pay any additional amounts
pursuant to paragraph (c) above in respect of any Tax
Deduction which would not have been required if the relevant
Finance Party had complied with its obligations under
paragraph (g) below.
(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
47
CONFORMED COPY
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 evidence
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) A Finance Party and each Obligor which makes a payment to
which that Finance Party is entitled shall co-operate promptly
in completing any procedural formalities necessary for that
Obligor to obtain authorisation to make that payment without a
Tax Deduction on time.
15.3 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 or the transactions occurring under such 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,
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 15.2 (Tax gross-up); or
(B) would have been compensated for by an
increased payment under Clause 15.2 (Tax
gross-up) but was not so compensated solely
because of the exclusion in paragraph (d) of
Clause 15.2 (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.
48
CONFORMED COPY
(d) A Protected Party shall, on receiving a payment from an
Obligor under this Clause 15.3, notify the Agent.
15.4 TAX CREDIT
If an Obligor makes a Tax Payment and the relevant Finance Party
(acting reasonably) 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 (acting reasonably) 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.
15.5 STAMP TAXES
The Company shall pay and, within three Business Days of written
demand, indemnify each Finance Party against any cost, loss or
liability that Finance Party incurs in relation to all stamp duty,
registration, excise and other similar Taxes payable in respect of any
Finance Document or the transactions occurring under any of them.
15.6 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 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
49
CONFORMED COPY
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.
16. INCREASED COSTS
16.1 INCREASED COSTS
(a) Subject to Clause 16.3 (Exceptions) the Company shall, within
three Business Days of a written 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 or (ii) compliance with any law or regulation
made, in force and enforceable or required to be complied with
or with which compliance is customary after the date of this
Agreement.
(b) In this Agreement "INCREASED COSTS" means:
(i) a reduction in the rate of return from the 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.
16.2 INCREASED COST CLAIMS
(a) A Finance Party intending to make a claim pursuant to Clause
16.1 (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.
16.3 EXCEPTIONS
(a) Clause 16.1 (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;
(ii) compensated for by Clause 15.3 (Tax indemnity) (or
would have been compensated for under Clause 15.3 (Tax
indemnity) but was not so compensated solely because
any of the exclusions in paragraph (b) of Clause 15.3
(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.
50
CONFORMED COPY
(b) In this Clause 16.3, a reference to a "TAX DEDUCTION" has the
same meaning given to the term in Clause 15.1 (Definitions).
17. OTHER INDEMNITIES
17.1 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;
(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.
17.2 OTHER INDEMNITIES
The Company shall (or shall procure that an Obligor will), within
three Business Days of written 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 31
(Sharing among the Finance Parties);
(c) funding, or making arrangements to fund, its participation in
a Utilisation requested by a 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
(d) a Utilisation (or part of a Utilisation) not being prepaid in
accordance with a notice of prepayment given by a Borrower or
the Company.
51
CONFORMED COPY
17.3 INDEMNITY TO THE AGENT
The Company shall, within three Business Days of a written demand,
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) entering into or performing any foreign exchange contract for
the purposes of paragraph (b) of Clause 8.3 (Change of
Currency); or
(c) acting or relying on any notice, request or instruction which
it reasonably believes to be genuine, correct and
appropriately authorised.
17.4 INDEMNITY TO THE SECURITY TRUSTEE
(a) Each Obligor shall, within three Business Days of a written
demand, indemnify the Security Trustee and every Receiver and
Delegate against any cost, loss or liability incurred by any
of them as a result of:
(i) the taking, holding, protection or enforcement of the
Transaction Security;
(ii) the exercise of any of the rights, powers, discretions
and remedies vested in the Security Trustee and each
Receiver and Delegate by the Finance Documents or by
law; and
(iii) any default by any Obligor in the performance of any
of the obligations expressed to be assumed by it in
the Finance Documents.
(b) The Security Trustee may, in priority to any payment to the
Secured Parties, indemnify itself out of the Charged Property
in respect of, and pay and retain, all sums necessary to give
effect to the indemnity in this Clause 17.4 and shall have a
lien on the Transaction Security and the proceeds of the
enforcement of the Transaction Security for all moneys payable
to it.
18. MITIGATION BY THE LENDERS
18.1 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 facility ceasing to be
available or any amount becoming payable under or pursuant to,
or cancelled pursuant to, any of Clause 10.1 (Illegality),
Clause 15 (Tax gross-up and indemnities), Clause 16 (Increased
costs) or paragraph 3 of Schedule 4 (Mandatory Cost Formulae)
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.
52
CONFORMED COPY
18.2 LIMITATION OF LIABILITY
(a) The Company shall, within three Business Days of written
demand, 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 18.1 (Mitigation).
(b) A Finance Party is not obliged to take any steps under Clause
18.1 (Mitigation) if, in the opinion of that Finance Party
(acting reasonably), to do so might be prejudicial to it.
19. COSTS AND EXPENSES
19.1 TRANSACTION EXPENSES
The Company shall, within three Business Days of a written demand, pay
the Agent, the Arranger and the Security Trustee the amount of all
costs and expenses (including, but not limited to, legal fees)
incurred by any of them (each acting reasonably) in connection with
the negotiation, preparation, printing, execution, syndication and
perfection of:
(a) this Agreement and any other documents referred to in this
Agreement and the Transaction Security; and
(b) any other Finance Documents executed after the date of this
Agreement.
19.2 AMENDMENT COSTS
If (a) an Obligor requests an amendment, waiver or consent or (b) an
amendment is required pursuant to Clause 32.9 (Change of currency),
the Company shall, within three Business Days of written demand,
reimburse each of the Agent and the Security Trustee for the amount of
all costs and expenses (including, but not limited to, legal fees)
reasonably incurred by the Agent and the Security Trustee (and in the
case of the Security Trustee, by any Receiver or Delegate) in
responding to, evaluating, negotiating or complying with that request
or requirement.
19.3 SECURITY TRUSTEE'S ONGOING COSTS
(a) In the event of (i) the occurrence of a Default or (ii) the
Security Trustee considering it necessary or expedient or
(iii) the Security Trustees being requested by an Obligor or
the Majority Lenders to undertake duties which the Security
Trustee and the Company agree to be of an exceptional nature
and/or outside the scope of the normal duties of the Security
Trustee under the Finance Documents, the Company shall pay to
the Security Trustee any additional remuneration that may be
agreed between them.
(b) If the Security Trustee and the Company fail to agree upon the
nature of the duties or upon any additional remuneration, that
dispute shall be determined by a investment bank (acting as an
expert and not as an arbitrator) selected by the Security
Trustee and approved by the Company or, failing approval,
nominated (on the application of the Security Trustee) by the
President for the time being of the Law Society of England and
Wales (the costs of the nomination and of the investment bank
being payable by the Company) and the determination of any
investment bank shall be final and binding upon the parties to
this Agreement.
53
CONFORMED COPY
19.4 ENFORCEMENT AND PRESERVATION COSTS
The Company shall, within three Business Days of written demand, pay
to each Finance Party the amount of all costs and expenses (including
but not limited to legal fees) incurred by it in connection with the
enforcement of, or the preservation of any rights under, any Finance
Document and the Transaction Security and any proceedings instituted
by or against the Security Trustee as a consequence of taking or
holding the Transaction Security or enforcing these rights.
19.5 For the purposes of Clauses 16.1, 17.2 to 17.4, 18.2, 19.1, 19.2 and
19.4 any written demand shall be accompanied by reasonable evidence of
the relevant amount claimed (which in the case of any cost or expense
shall be the relevant invoice together with an explanation as to why
the cost or expense was incurred).
54
CONFORMED COPY
SECTION 7
GUARANTEE
20. GUARANTEE AND INDEMNITY
20.1 GUARANTEE AND INDEMNITY
Each Guarantor irrevocably and unconditionally jointly and severally:
(a) guarantees to each Finance Party punctual performance by each
Borrower of all that Borrower's obligations under the Finance
Documents;
(b) undertakes with each Finance Party that whenever a Borrower
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 immediately on demand against
any cost, loss or liability suffered by that Finance Party if
any obligation guaranteed by it is or becomes unenforceable,
invalid or illegal. The amount of the cost, loss or liability
shall be equal to the amount which that Finance Party would
otherwise have been entitled to recover.
20.2 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.
20.3 REINSTATEMENT
If any payment by an Obligor or any discharge given by a Finance Party
(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 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.
20.4 WAIVER OF DEFENCES
The obligations of each Guarantor under this Clause 20 will not be
affected by an act, omission, matter or thing which, but for this
Clause, would reduce, release or prejudice any of its obligations
under this Clause 20 (without limitation and whether or not known to
it or any Finance 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;
55
(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 (whether of
maturity or otherwise) or restatement (in each case however
fundamental and of whatsoever nature, and whether or not more
onerous) or replacement of a Finance Document or any 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.
20.5 GUARANTOR INTENT
Without prejudice to the generality of Clause 20.4 (Waiver of
Defences), each Guarantor expressly confirms that it intends that this
guarantee shall extend from time to time to any (however fundamental
and of whatsoever nature and whether or not more onerous) variation,
increase, extension or addition of or to any of the Finance Documents
and/or any facility or amount made available under any of the Finance
Documents for the purposes of or in connection with any of the
following: acquisitions of any nature; increasing working capital;
enabling investor distributors to be made; carrying out
restructurings; refinancing existing facilities; refinancing any other
indebtedness; making facilities available to new borrowers; any other
variation or extension of the purposes for which any such facility or
amount might be made available from time to time; and any fees, costs
and/or expenses associated with any of the foregoing.
20.6 IMMEDIATE RECOURSE
Each Guarantor waives any right it may have of first requiring any
Finance Party (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 20.
This waiver applies irrespective of any law or any provision of a
Finance Document to the contrary.
20.7 APPROPRIATIONS
Until all amounts which may become payable by the Obligors under or in
connection with the Finance Documents have been irrevocably paid in
full, each Finance Party (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 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
56
CONFORMED COPY
(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 20.
20.8 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 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;
(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
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.
If a Guarantor receives any benefit, payment or distribution in
relation to such rights it shall hold that benefit, payment or
distribution to the extent necessary to enable all amounts which may
be or become payable to the Finance Parties by the Obligors under or
in connection with the Finance Documents to be repaid in full on trust
for the Finance Parties and shall promptly pay or transfer the same to
the Agent or as the Agent may direct for application in accordance
with Clause 32 (Payment mechanics) of this Agreement.
20.9 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.
20.10 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.
57
CONFORMED COPY
20.11 LIMITATIONS
(a) Any term or provision of this Clause 20.11 or any other term
in this Agreement or any Finance Document notwithstanding, the
maximum aggregate amount of the obligations for which any U.S.
Guarantor shall be liable under this Agreement shall in no
event exceed an amount equal to the largest amount that would
not render such U.S. Guarantor's obligations under this
Agreement, subject to avoidance under applicable United States
federal or state fraudulent conveyance laws.
(b) Flexsys Industria e Comercio Ltda expressly waives any right
or benefit it may have under articles 827, 835, 837 and 838 of
the Brazilian Civil Code in connection with the guarantee and
indemnity granted under this Clause 20.
(c) If the guarantee and indemnity granted in this Clause 20
(Guarantee and Indemnity) (the "GUARANTEE") is given by a
Guarantor incorporated in Germany in the legal form of (i) a
limited liability company (Gesellschaft mit beschrankter
Haftung (GmbH)) (a "GERMAN GMBH GUARANTOR") or (ii) a limited
partnership (Kommanditgesellschaft) with a limited liability
company as sole general partner (a "GERMAN GMBH & CO. KG
GUARANTOR" and together with the German GmbH Guarantor
referred to as the "GERMAN GUARANTOR"; a reference made in
this paragraph (c) to the "RELEVANT LIMITATION COMPANY" shall,
in case of a German GmbH Guarantor, refer to the relevant
German Guarantor and, in case of a German GmbH & Co. KG
Guarantor, refer to the German Guarantor's general partner),
the following shall apply:
(i) The Finance Parties shall be entitled to enforce the
Guarantee against the relevant German Guarantor
without limitation in respect of:
(A) all and any amounts which are owed under the
Finance Documents by such German Guarantor
itself or by any of its Subsidiaries; and
(B) all and any amounts which correspond to funds
that have been borrowed under this Agreement
or financial accommodation provided in
connection with a Letter of Credit, in each
case to the extent on-lent, or issued for the
benefit of, the relevant German Guarantor or
any of its Subsidiaries, or for the benefit of
any of their creditors and in each case not
repaid and outstanding from time to time.
(in aggregate, the "UNLIMITED ENFORCEMENT AMOUNT").
(ii) If the German Guarantor's liability under the
Guarantee exceeds the Unlimited Enforcement Amount
applicable to such German Guarantor, the Finance
Parties shall not be entitled to enforce the Guarantee
against such German Guarantor in excess of the
Unlimited Enforcement Amount if and to the extent
that:
(A) the Guarantee secures the obligations of an
Obligor which is (a) a shareholder of the
German Guarantor or (b) an affiliated company
58
CONFORMED COPY
(verbundenes Unternehmen) within the meaning
of section 15 of the German Stock Corporation
Act (Aktiengesetz) of a shareholder of the
German Guarantor (other than the German
Guarantor and its Subsidiaries); and
(B) the enforcement would have the effect of (a)
reducing the Relevant Limitation Company's net
assets (Reinvermogen) (the "NET ASSETS") to an
amount of less than the Relevant Limitation
Company's stated share capital (Stammkapital)
or, if the Net Assets are already an amount of
less than the Relevant Limitation Company's
stated share capital, of causing such amount
to be further reduced and (b) would thereby
affect the assets required for the obligatory
preservation of the Relevant Limitation
Company's stated share capital (Stammkapital)
according to section 30, 31 German Limited
Liability Companies Act (Gesetz betreffend die
Gesellschaften mit beschrankter Haftung)
provided that the amount of the stated share
capital to be taken into consideration shall
be the amount registered in the commercial
register at the date hereof, and any increase
of the stated share capital registered after
the date of this Agreement provided that such
increase shall only be taken into account (i)
if such increase is not subject to any consent
under the terms of this Agreement; or (ii) if
such increase is subject to any consent under
the terms of this Agreement, such consent has
been granted in writing prior to effecting the
increase of the stated share capital.
(iii) The Net Assets shall be calculated as an amount equal
to the sum of the values of the Relevant Limitation
Company's assets (consisting of all assets which
correspond to the items set forth in section 266
sub-section (2) A, B and C of the German Commercial
Code (Handelsgesetzbuch) less the aggregate amount of
the Relevant Limitation Company's liabilities
(consisting of all liabilities and liability reserves
which correspond to the items set forth in section 266
sub-section (3) B, C and D of the German Commercial
Code), save that:
(A) any asset that is shown in the balance sheet
with a book value (Buchwert) that is
significantly lower than the market value of
such asset and that is not necessary for the
Relevant Limitation Company's business (nicht
betriebsnotwendig) shall be taken into account
with its market value;
(B) obligations under loans provided to the
Relevant Limitation Company by any member of
the Group or any other affiliated company
shall not be taken into account as
liabilities; and
(C) obligations under loans or other contractual
liabilities incurred by the Relevant
Limitation Company in violation of the
provisions of the Finance Documents shall not
be taken into account as liabilities.
59
CONFORMED COPY
The Net Assets shall be determined in accordance with
the generally accepted accounting principles
applicable from time to time in Germany (Grundsatze
ordnungsmaBiger Buch-fuhrung) and be based on the same
principles that were applied by the German Guarantor
in the preparation of its most recent annual balance
sheet (Jahresbilanz).
(iv) The limitations set out in paragraph (ii) above shall
only apply if the German Guarantor delivers to the
Agent, without undue delay but not later than within 3
months after receipt of a request for payment under
the Guarantee by the Agent, an up to date balance
sheet prepared by a firm of auditors of international
standard and reputation which shows the value of the
Relevant Limitation Company's Net Assets (the "BALANCE
SHEET"). The Balance Sheet shall be prepared in
accordance with the principles set out in paragraph
(iii) above and shall contain reasonable details
relating to items to be adjusted pursuant to paragraph
(iii) above.
If the German Guarantor fails to deliver a Balance
Sheet within the aforementioned time period, the
Finance Parties shall be entitled to enforce the
Guarantee irrespective of the limitations set out in
paragraph (ii) above.
(v) If the Finance Parties disagree with the Balance
Sheet, they shall be entitled to enforce the Guarantee
up to the amount which, according to the Balance
Sheet, can be enforced in compliance with the
limitations set out in paragraph (ii) above. In
relation to any additional amounts for which the
German Guarantor is liable under the Guarantee, the
Finance Parties shall be entitled to further pursue
their claims (if any) and the relevant German
Guarantor shall be entitled to prove that this amount
is necessary for maintaining the Relevant Limitation
Company's stated share capital (calculated as of the
date the demand under the Guarantee was made).
(vi) No reduction of the amount enforceable under this
paragraph (c) of Clause 20.11 (Limitations) will
prejudice the right of the Finance Parties to continue
enforcing the Guarantee (subject always to the
operation of the limitations set out above at the time
of such enforcement) until full satisfaction to the
claims guaranteed.
(d) Notwithstanding any other provision of this Clause 20
(Guarantee and Indemnity) the guarantee, indemnity and other
obligations of any Obligor expressed to be assumed in this
Clause 20 (Guarantee and Indemnity) shall be deemed not to be
assumed by such Obligor to the extent that the same would
constitute unlawful financial assistance within the meaning of
any applicable financial assistance rules under any Relevant
Jurisdiction (the "PROHIBITION") and the provisions of this
Agreement and the other Finance Documents shall be construed
accordingly. For the avoidance of doubt it is expressly
acknowledged that the relevant Obligor will continue to
guarantee all such obligations which, if included, do not
constitute a violation of the Prohibition.
60
(e) Flexsys Industria e Comercio Ltda. acknowledges and agrees
that the lawful currency of the United States of America or
any Optional Currency under this Agreement shall be the
currency of account in any and all events, and guarantees that
the obligations will be paid in the lawful currency of the
United States of America or any Optional Currency, as
applicable, in accordance with the terms and provisions of
this Agreement and the Finance Documents, regardless of any
law, regulation or decree now or hereafter in effect in Brazil
that might in any manner affect the Secured Obligations, the
Security Documents or the rights of the Secured Parties with
respect thereto as against Flexsys Industria e Comercio Ltda.,
or cause or permit to be invoked any alteration in the time,
amount or manner of payment by Flexsys Industria e Comercio
Ltda. of any of or all the Secured Obligations. Further to and
without limiting the currency indemnities set forth in Section
17.1 of this Agreement, and any other indemnity, reimbursement
or liability set forth under the Finance Documents, Flexsys
Industria e Comercio Ltda. shall (i) at all times comply with,
and perform such acts as may be required by Brazilian law,
including all laws relating to (A) dealings with public
officials and (B) foreign exchange, Brazilian Central Bank and
Federal Revenue Office regulations (as from time to time
amended), in order to preserve and maintain the validity,
perfection and enforceability of the Security Documents to
which it is a party as well as the Secured Obligations.
(f) In relation to any member of the Group which becomes a
Guarantor after the date of this Agreement, this Guarantee is
also subject to any limitations set out in the Accession
Letter application to that Guarantor.
61
CONFORMED COPY
SECTION 8
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
21. REPRESENTATIONS
Each Obligor in respect of itself only, and the Company in respect of
itself and each other member of the Group (and, in the case of the
Company, references in this Clause 21 to "it" or "its shall be to the
Company on behalf of itself and in respect of each Obligor) makes the
representations and warranties set out in this Clause 21 to each
Finance Party on the date of this Agreement.
21.1 STATUS
(a) In the case of each Obligor other than Flexsys America L.P.,
it is a corporation, duly incorporated and validly existing
under the law of its jurisdiction of incorporation.
(b) In the case of Flexsys America L.P., it is a limited
partnership, duly formed and validly existing under the laws
of the State of Delaware, United States of America.
(c) In the case of Flexsys Industria e Comercio Ltda, it is a
limited liability company (sociedade limitada) duly
incorporated and validly existing under the laws of Brazil.
(d) It has the power to own its assets and carry on its business
as it is being conducted.
21.2 BINDING OBLIGATIONS
The obligations expressed to be assumed by it in each Finance Document
are, subject to the Reservations and to any applicable Perfection
Requirements, legal, valid, binding and enforceable obligations.
21.3 NON-CONFLICT WITH OTHER OBLIGATIONS
The entry into and performance by it of, and the transactions
contemplated by, the Finance Documents do not and will not conflict
with:
(a) any law or regulation applicable to it;
(b) its constitutional documents; or
(c) any agreement or instrument binding upon it or any of its
assets other than under the Existing Facility up to and
including the first Utilisation Date.
21.4 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 a party and the transactions
contemplated by those Finance Documents.
62
CONFORMED COPY
21.5 VALIDITY AND ADMISSIBILITY IN EVIDENCE
All 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
(b) to make the Finance Documents to which it is a party
admissible in evidence in each Relevant Jurisdiction subject
to any Reservation,
have been obtained or effected and are in full force and effect.
21.6 GOVERNING LAW AND ENFORCEMENT
(a) Subject to any applicable Reservations, the choice of
governing law of each of the Finance Documents will be
recognised and enforced in each Relevant Jurisdiction, other
than as specifically referred to in any legal opinion
delivered pursuant to Clause 4 (Conditions of Utilisation) or
Clause 27 (Changes to the Obligors).
(b) Subject to any applicable Reservations, any judgment obtained
in the jurisdiction whose laws are expressed to govern a
Finance Document will be recognised and enforced in each
Relevant Jurisdiction applicable to the governing law or
jurisdiction of incorporation of relevant parties to or assets
specifically secured by that Finance Document.
21.7 NO FILING TAXES
Under the law of each 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 registration, stamp
or similar tax be paid on or in relation to the Finance Documents or
the transactions contemplated by the Finance Documents, other than in
connection with Perfection Requirements or as specifically referred to
in any legal opinion delivered pursuant to Clause 4 (Conditions of
Utilisation) or Clause 27 (Changes to the Obligors).
21.8 NO DEFAULT
(a) No Event of Default is continuing or might be reasonably
likely to result from the making of any Utilisation.
(b) No other event or circumstance is outstanding which
constitutes a default under any other agreement or instrument
which is binding on it or any of its Subsidiaries or to which
its (or its Subsidiaries') assets are subject which might be
reasonably likely to have a Material Adverse Effect.
21.9 NO MISLEADING INFORMATION
(a) Any written factual information provided by any member of the
Group for the purposes of the Information Memorandum 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.
63
CONFORMED COPY
(b) The financial projections contained in the Information
Memorandum have been prepared on the basis of recent
historical information and on the basis of reasonable
assumptions.
(c) Nothing has occurred or been omitted from the Information
Memorandum and no information has been given or withheld that
results in the information contained in the Information
Memorandum being untrue or misleading in any material respect
and nothing has been omitted from the Information Memorandum
which, if disclosed, might adversely affect the decision of a
person considering whether to enter into this Agreement.
(d) Since the date of the Information Memorandum, no event has
occurred which has had or might reasonably be likely to have a
Material Adverse Effect.
(e) All material information (other than the Information
Memorandum) supplied by any member of the Group under or in
connection with any Finance Document is true, complete and
accurate in all material respects as at the date it was given
and is not misleading in any material respect and all
information which, if disclosed, might materially adversely
affect the decision of a person considering whether to enter
into this Agreement, has been disclosed.
21.10 FINANCIAL STATEMENTS
(a) The Original Financial Statements were prepared in accordance
with GAAP, consistently applied unless expressly disclosed to
the Agent in writing to the contrary before the date of this
Agreement.
(b) Its Original Financial Statements fairly represent its
financial condition and operations (or the financial condition
and operations of the Group, in the case of the Company)
during the relevant financial year unless expressly disclosed
to the Agent in writing to the contrary before the date of
this Agreement.
(c) There has been no material adverse change in its financial
condition (or the combined financial condition of the Group,
in the case of the Company) since the date of the Original
Financial Statements.
21.11 PARI PASSU RANKING
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.
21.12 NO PROCEEDINGS PENDING OR THREATENED
Save as disclosed in the Information Memorandum, no litigation,
arbitration or administrative proceedings (including, for the
avoidance of doubt, insolvency or similar proceedings) of or before
any court, arbitral body or agency which, if adversely determined,
might reasonably be likely to have a Material Adverse Effect have (to
the best of its knowledge and belief) been started or threatened
against it or any of its Subsidiaries, other than as specifically
referred to in any legal opinion delivered pursuant to Clause 4
(Conditions of Utilisation) or Clause 27 (Changes to the Obligors).
64
CONFORMED COPY
21.13 ENVIRONMENTAL COMPLIANCE
Save as disclosed in the Information Memorandum, each member of the
Group has performed and observed in all material respects all
Environmental Law, Environmental Permits and all other material
covenants, conditions, restrictions or agreements directly or
indirectly concerned with any contamination, pollution or waste or the
release or discharge of any toxic or hazardous substance in connection
with any real property which is or was at any time owned, leased or
occupied by any member of the Group or on which any member of the
Group has conducted any activity where failure to do so might
reasonably be likely to have a Material Adverse Effect.
21.14 ENVIRONMENTAL CLAIMS
Save as disclosed in the Information Memorandum, no Environmental
Claim has been commenced or (to the best of its knowledge and belief)
is threatened against any member of the Group where that claim might
be reasonably likely, if determined against that member of the Group
to have a Material Adverse Effect.
21.15 TAXATION
(a) It has duly and punctually paid and discharged all Taxes
imposed upon it or its assets within the time period allowed
without incurring penalties (save to the extent that (i)
payment is being contested in good faith, (ii) it has
maintained adequate reserves for those Taxes and (iii) payment
can be lawfully withheld).
(b) It is not materially overdue in the filing of any Tax returns.
(c) No claims are being or are reasonably likely to be asserted
against it with respect to Taxes.
(d) It has properly filed or caused to be filed (and, where
applicable, has been included in) all material U.S. Tax
returns, reports and statements (whether federal, state, local
or otherwise) applicable to it in all jurisdictions in which
such returns, reports and statements are required to be filed.
All such U.S. Tax returns are correct and complete in all
material respects.
(e) It has paid all material U.S. Taxes due whether or not shown
on any tax return, together with applicable interest and
penalties, except to the extent such U.S. Taxes are contested
in good faith by proper proceedings which stay the imposition
of any penalty, fine or lien resulting from the non-payment of
such U.S. Taxes and with respect to which adequate reserves
have been set aside for the payment of such U.S. Taxes.
21.16 DEDUCTION OF TAX
It is not required to make any deduction for or on account of Tax from
any payment it may make under any Finance Document.
21.17 NO IMMUNITY
In any proceedings taken in a Relevant Jurisdiction in relation to the
Finance Documents, it will not be entitled to claim for itself or any
of its assets immunity from suit, execution, attachment or other legal
process.
65
CONFORMED COPY
21.18 PRIVATE AND COMMERCIAL ACTS
Its execution of the Finance Documents constitutes, and its exercise
of its rights and performance of its obligations hereunder will
constitute, private and commercial acts done and performed for private
and commercial purposes.
21.19 SECURITY
No Security exists over all or any of the present or future assets of
any member of the Group other than any Security permitted or
contemplated under Clause 24.3 (Negative Pledge).
21.20 RANKING
Subject to the Reservations and applicable Perfection Requirements,
the Transaction Security has or will have first ranking priority and
it is not subject to any prior ranking or pari passu ranking Security
unless purported otherwise in any Security Documents.
21.21 TRANSACTION SECURITY
Subject to the Reservations and applicable Perfection Requirements,
each Security Document to which it is a party validly creates the
Security which is expressed to be created by that Security Document
and evidences the Security it is expressed to evidence.
21.22 GOOD TITLE TO ASSETS
It has good, valid and marketable title to, or valid leases or
licences of, and all appropriate Authorisations to use, the material
assets necessary to carry on its business as presently conducted.
21.23 NO DISPOSAL OF INTERESTS
It has not sold or granted (or agreed to sell or grant) any right or
pre-emption over, or any lease or tenancy of or otherwise disposed of
any of its interest in any of the Charged Property.
21.24 LEGAL AND BENEFICIAL OWNER
It is the absolute legal owner and beneficial owner or the sole
beneficial owner of the assets subject to the Transaction Security
and, in the case of assets that are subject to Security Documents
governed by the laws of Germany, may freely dispose thereof without
restrictions.
21.25 SHARES
(a) The Shares are fully paid and not subject to any option to
purchase or similar rights. The constitutional documents of
companies whose shares are subject to the Transaction Security
do not and could not restrict or inhibit any transfer of those
shares on creation or on enforcement of the Transaction
Security.
(b) The Shares in Flexsys S.p.A are free and clear of any
encumbrance, security interest, option right (diritto di
opzione), pre-emption right (diritto di prelazione) or any
other third-party lien or right, except as created by the
Italian Share Pledge and the Company represents that it has
not sold or disposed of or granted any option or pre-emption
right in respect of any of its right, title and interest in
the Charged Portfolio (other than as permitted under the
Secured Contracts).
66
CONFORMED COPY
(c) The Shares in Flexsys Industria e Comercio Ltda. have been
duly authorized and validly issued in compliance with
applicable laws and are fully paid in. There are no
outstanding warrants, options, subscriptions, reserved quotas
or other contractual arrangements for the purchase of the
Shares, and there are no outstanding arrangements, preemptive
rights, redemption rights or any other rights or claims of any
character relating to the issuance, purchase, repurchase,
redemption, transfer, voting or preemptive rights with respect
to the Shares (which are duly paid in) that restrict the
transfer of, require the issuance of, or otherwise relate to
any class of the capital stock of Flexsys Industria e Comercio
Ltda., in either case that would affect the pledge and
usufruct granted by it under the Brazilian Quota Pledge
Agreement.
(d) The Charged Portfolio is not subject to foreclosure
(pignoramento) or seizure (sequestro) and there does not exist
any restriction on the ability to transfer or realise all or
any part of the Charged Portfolio.
21.26 NO LISTED SECURITIES
None of the Belgian Obligors has issued listed securities, or is a
Subsidiary of a Belgian company that has issued listed securities.
21.27 GROUP STRUCTURE
The Group Structure Chart delivered to the Agent pursuant to Schedule
2 (Conditions Precedent) is true, complete and accurate.
21.28 OWNERSHIP OF THE OBLIGORS
Each Obligor (other than Flexsys America L.P., Flexsys Rubber
Chemicals Limited and the Company itself) is a Subsidiary of the
Company.
21.29 OWNERSHIP OF THE COMPANY
On and from the Akzo Nobel Retirement:
(a) Solutia Inc. owns 50 per cent. of the issued ordinary share
capital of the Company and Solutia Europe N.V. owns 50 per
cent. of the issued preference share capital of the Company,
with the balance of such issues ordinary shares and issued
preference shares being held by the Company itself;
(b) Flexsys America Co and Solutia Inc. own all of the partnership
interests of Flexsys America L.P.; and
(c) Solutia UK Capital Limited owns all of the issued share
capital of Flexsys Rubber Chemicals Limited.
21.30 CENTRE OF MAIN INTERESTS AND ESTABLISHMENTS
(a) Each Obligor listed in Schedule 11 (Centre of Main Interests
and Establishments) has its "centre of main interests" (as
that term is used in Article 3(1) of The Council of the
European Union Regulation No. 1346/2000 on Insolvency
Proceedings (the "REGULATION") as set out in Schedule 11
(Centre of Main Interests and Establishments).
67
CONFORMED COPY
(b) The Original Obligors listed in Schedule 11 (Centre of Main
Interests and Establishments) have an "establishment" (as
defined in Article 2(h) of the Regulation) in the countries
set out in Schedule 11 (Centre of Main Interests and
Establishments).
21.31 AKZO NOBEL RETIREMENT
The Akzo Nobel Retirement is legally valid and enforceable and is in
compliance with all laws and legal requirements in each Relevant
Jurisdiction.
21.32 ERISA PLANS
(a) Each Employee Plan is in compliance in form and operation with
ERISA and the Code and all other applicable laws and
regulations save where any failure to comply would not
reasonably be expected to have a Material Adverse Effect.
(b) Each Employee Plan which is intended to be qualified under
Section 401(a) of the Code has been determined by the IRS to
be so qualified or is in the process of being submitted to the
IRS for approval or will be so submitted during the applicable
remedial amendment period, and, nothing has occurred since the
date of such determination that would adversely affect such
determination (or, in the case of an Employee Plan with no
determination, nothing has occurred that would materially
adversely affect such qualification).
(c) There exists no Unfunded Pension Liability with respect to
Employee Plans in the aggregate, taking into account only
Employee Plans with positive Unfunded Pension Liability,
except as would not have a Material Adverse Effect.
(d) There are no actions, suits or claims pending against or
involving an Employee Plan (other than routine claims for
benefits) or, to the knowledge of the Borrowers, any U.S.
Obligor or any ERISA Affiliate, threatened, which would
reasonably be expected to be asserted successfully against any
Employee Plan and, if so asserted successfully, would
reasonably be expected either singly or in the aggregate to
have a Material Adverse Effect.
(e) Each U.S. Obligor and any ERISA Affiliate has made all
material contributions to or under each such Employee Plan
required by law within the applicable time limits prescribed
thereby, the terms of such Employee Plan, or any contract or
agreement requiring contributions to an Employee Plan save
where any failure to comply would not reasonably be expected
to have a Material Adverse Effect.
(f) Neither any U.S. Obligor nor any ERISA Affiliate has ceased
operations at a facility so as to become subject to the
provisions of Section 4068(a) of ERISA, withdrawn as a
substantial employer so as to become subject to the provisions
of Section 4063 of ERISA or ceased making contributions to any
Employee Plan subject to Section 4064(a) of ERISA to which it
made contributions.
(g) Neither any U.S. Obligor nor any ERISA Affiliate has incurred
or reasonably expects to incur any liability to PBGC save for
any liability for premiums due in the ordinary course or other
liability which would not reasonably be expected to have a
Material Adverse Effect.
68
CONFORMED COPY
21.33 PENSIONS
(a) No UK Obligor is or has at any time been an employer (for the
purpose of sections 38 to 51 of the Pensions Act 2004) of an
occupational pension scheme which is not a money purchase
scheme (both terms as defined in the Pension Schemes Act 1993)
save in respect of the Flexsys Rubber Chemicals Retirement
Benefits Scheme.
(b) No UK Obligor is or has at any time been "connected" with or
an "associate" of (as those terms are used in sections 39 and
43 of the Pensions Act 2004) such an employer.
(c) No member of the Group has any Multiemployer Plan and no
member of the Group will acquire or establish a Multiemployer
Plan.
21.34 FINANCIAL ASSISTANCE
(a) The provision of guarantees and security required under the
Finance Documents do not constitute unlawful financial
assistance or breach any similar laws in any jurisdiction.
(b) The proceeds of the Facilities have not been and will not be
used to finance or refinance the acquisition of or
subscription for shares in any member of the Group other than
in connection with the Akzo Nobel Retirement.
(c) The acquisition of shares in connection with the Akzo Nobel
Retirement will be performed in compliance with all relevant
laws.
21.35 FEDERAL RESERVE REGULATIONS
(a) No Obligor is engaged or will engage, principally or as one of
its important activities, in the business of purchasing or
carrying Margin Stock or extending credit for the purpose of
purchasing or carrying Margin Stock.
(b) None of the proceeds of the Loans or other extensions of
credit under this Agreement will be used, directly or
indirectly, for the purpose of buying or carrying any Margin
Stock, for the purpose of reducing or retiring any Financial
Indebtedness that was originally incurred to buy or carry any
Margin Stock or for any other purpose which might cause all or
any Loans or other extensions of credit under this Agreement
to be considered a "purpose credit" within the meaning of
Regulation U or Regulation X.
21.36 INVESTMENT COMPANIES
No Obligor, person controlling an Obligor or Subsidiary of an Obligor
is or is required to be registered as an "investment company" under
the U.S. Investment Company Act of 1940 (the "1940 ACT").
21.37 ANTI-TERRORISM LAWS
(a) To the best of the Obligors' knowledge, no Obligor nor any
Affiliate thereof: (i) is, or is controlled by, a Restricted
Party; (ii) has received funds or other property from a
Restricted Party; or (iii) is in breach of or is the subject
of any action or investigation under any Anti-Terrorism Law.
69
CONFORMED COPY
(b) Each Obligor and, to the best of the Obligors' knowledge, each
Affiliate thereof has taken reasonable measures to ensure
compliance with the Anti-Terrorism Laws.
21.38 GERMANY MONEY LAUNDERING
Each German Borrower is the beneficiary (within the meaning of section
8 of the German Money Laundering Act (Gesetz uber das Aufspuren von
Gewinnen aus schweren Straftaten Geldwaschegesetz) for each Loan made
or to be made available to it.
21.39 FLEXSYS CHEMICALS (M) SDN. BHD.
(a) Flexsys Chemicals (M) Sdn. Bhd. is not connected with any
director of any Borrower of which it is not a Subsidiary.
(b) No director of any Borrower of which Flexsys Chemical (M) Sdn.
Bhd. is not a Subsidiary holds 15 per cent or more of the
issued Shares in Flexsys Chemicals (M) Sdn. Bhd..
(c) Flexsys Chemicals (M) Sdn. Bhd. is not accustomed to act (nor
is it under an obligation to act) in accordance with the
directions, instructions or wishes of a director of any
Borrower of which it is not a Subsidiary.
21.40 ON-LENDING
(a) Each Obligor confirms that there is a corporate benefit in it
fulfilling its obligations under this Agreement.
(b) Flexsys Chemicals (M) Sdn. Bhd. ("FLEXSYS MALAYSIA") has no
domestic borrowings in Malaysia and as and when the need
arises and/or to comply with any condition which may be
imposed by the FIC, either a Borrower shall advance funds from
the Facilities to Flexsys Malaysia as inter-company loans or
Flexsys Malaysia shall borrow hereunder in either case to fund
its business operations in Malaysia.
21.41 INITIAL UTILISATION
The initial Utilisation will be performed in accordance with the Funds
Flow Statement provided in satisfaction of the condition precedent
contained in Part 8(d) of Schedule 2 (Conditions Precedent) of this
Agreement.
21.42 NO CLUSTER BOMBS OR ANTI-PERSONNEL MINES
None of the Borrowers and none of their Subsidiaries carries out
activities related to manufacturing, use, repair, exhibition for sale,
sale, import, export, stockpiling or transport of cluster bombs,
submunitions or anti-personnel mines.
21.43 REPETITION
The Repeating Representations are deemed to be made by the Company (on
its own behalf and on behalf of each other Obligor) (by reference to
the facts and circumstances then existing) on:
(a) the date of each Utilisation Request and the first day of each
Interest Period; and
(b) in the case of an Additional Obligor, the day on which the
company becomes (or it is proposed that the company becomes)
an Additional Obligor.
70
CONFORMED COPY
22. INFORMATION UNDERTAKINGS
The undertakings in this Clause 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.
22.1 FINANCIAL STATEMENTS
The Company shall supply to the Agent in sufficient copies for all the
Lenders:
(a) as soon as the same become available, but in any event within
120 days for sub-paragraph (i) below and 180 days for
sub-paragraph (ii) below after the end of each of its
financial years:
(i) the audited Combined Financial Statements of the Group
for that financial year; and
(ii) the audited financial statements of each Obligor for
that financial year; and
(b) as soon as the same become available, but in any event within
45 days after the end of each quarter of each of its financial
years:
(i) the Combined Financial Statements for that period; and
(ii) the financial statements of each Obligor for that
period.
22.2 COMPLIANCE CERTIFICATE
(a) The Company shall supply to the Agent, with each set of
financial statements delivered pursuant to paragraph (a)(i) or
(b)(i) of Clause 22.1 (Financial statements), a Compliance
Certificate setting out (in reasonable detail) computations as
to compliance with Clause 23 (Financial Covenants) as at the
date as at which those financial statements were drawn up.
(b) Each Compliance Certificate shall be signed by two directors
of the Company.
22.3 REQUIREMENTS AS TO FINANCIAL STATEMENTS
(a) The Company shall procure that each set of financial
statements for each Obligor and for the Group delivered
pursuant to Clause 22.1 (Financial statements) is prepared
using GAAP (or local GAAP as applicable) and that in each case
accounting practices and financial reference periods are
materially consistent with those applied in the preparation of
the Original Financial Statements for that Obligor and the
Group, as applicable, unless, in relation to any set of
financial statements, it notifies the Agent that there has
been a material change in GAAP (or Local GAAP, as applicable),
or the accounting practices or reference periods and its
auditors (or, if appropriate, the auditors of the member of
the Group) deliver to the Agent:
(i) a description of any material change necessary for
those financial statements to reflect the GAAP,
accounting practices and reference periods upon which
that Obligor's or the Group's (as applicable) Original
Financial Statements were prepared; and
71
CONFORMED COPY
(ii) sufficient information, in form and substance as may
be reasonably required by the Agent, to enable the
Lenders to determine whether Clause 23 (Financial
Covenants) has been complied with and make an accurate
comparison between the financial position indicated in
those financial statements and that Obligor's or the
Group's Original Financial Statements, as applicable.
(b) If the Company notifies the Agent of a change in accordance
with paragraph (i) above then the Company and Agent shall
enter into negotiations in good faith with a view to agreeing:
(i) whether or not the change might result in any material
alteration in the commercial effect of any of the
terms of this Agreement; and
(ii) if so, any amendments to this Agreement which may be
necessary to ensure that the change does not result in
any material alteration in the commercial effect of
those terms
and if any amendments are agreed they shall take effect and be
binding on each of the Parties in accordance with their terms.
Any reference in this Agreement to those financial statements
shall be construed as a reference to those financial
statements as adjusted to reflect the basis upon which the
Original Financial Statements were prepared.
(c) The Combined Financial Statements prepared for the purposes of
Clause 23 (Financial Covenants) and the covenant calculations
shall be prepared using GAAP and in the event of there being
any material change in GAAP or the accounting practices
applied or reference periods used or its auditors, the
provisions of paragraph (b) of this Clause 22.3 shall apply
mutatis mutandis.
22.4 ERISA-RELATED INFORMATION
The Company shall supply to the Agent (in sufficient copies for all
the Lenders, if the Agent so requests):
(a) promptly and in any event within 15 days after any U.S.
Obligor or any ERISA Affiliate files a Schedule B (or such
other schedule as contains actuarial information) to IRS Form
5500 in respect of an Employee Plan with Unfunded Pension
Liabilities, a copy of such IRS Form 5500 (including the
Schedule B);
(b) promptly and in any event within 30 days after any U.S.
Obligor or any ERISA Affiliate knows or has reason to know
that any ERISA Event which, individually or when aggregated
with any other ERISA Event, would reasonably be expected to
have a Material Adverse Effect has occurred, the written
statement of the Chief Financial Officer of such U.S. Obligor
or ERISA Affiliate, as applicable, describing such ERISA Event
and the action, if any, which it proposes to take with respect
to such ERISA Event and a copy of any notice filed with the
PBGC or the IRS pertaining to such ERISA Event; PROVIDED THAT,
in the case of ERISA Events under paragraph (d) of the
definition thereof, the 30-day period set forth above shall be
a 10-day period,
72
CONFORMED COPY
and, in the case of ERISA Events under paragraph (b) of the
definition thereof, in no event shall notice be given later
than the occurrence of the ERISA Event; and
(c) promptly, and in any event within thirty days, after becoming
aware that there has been (i) a material increase in Unfunded
Pension Liabilities, taking into account only Employee Plans
with positive Unfunded Pension Liabilities; (ii) the existence
of potential withdrawal liability under Section 4201 of ERISA,
if the Parent and its ERISA Affiliates were to completely or
partially withdraw from all Multiemployer Plans; (iii) the
adoption of, or the commencement of contributions to, any
Employee Plan subject to Section 412 of the Code by any
Obligor or any ERISA Affiliate; or (iv) the adoption of any
amendment to an Employee Plan subject to Section 412 of the
Code which results in a material increase in contribution
obligations of any Obligor, a detailed written description
thereof from the Chief Financial Officer of each affected U.S.
Obligor or ERISA Affiliate, as applicable.
22.5 INFORMATION: MISCELLANEOUS
The Company shall supply to the Agent (in sufficient copies for all
the Lenders, if the Agent so requests):
(a) all documents dispatched by the Company to its shareholders
(or any class of them) or its creditors generally at the same
time as they are dispatched;
(b) promptly upon becoming aware of them, the details of any
litigation, arbitration or administrative proceedings which
are current, threatened or pending against any member of the
Group, and which might, if adversely determined, be reasonably
likely to have a Material Adverse Effect; and
(c) promptly, such further information regarding the financial
condition, business and operations of any member of the Group
as any Finance Party (through the Agent) may reasonably
request (including, but not limited to, such information
required under sections 13, 13a and 18 of the German Banking
Act (Kreditwesengesetz)) but so that prior to a Default, no
more than one request may be made in any three month period.
22.6 NOTIFICATION OF DEFAULT
(a) Each Obligor shall notify the Agent of any 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 or
senior officers on its behalf certifying that to the best of
their knowledge after due and careful enquiry no Default is
continuing (or if a Default is continuing, specifying the
Default and the steps, if any, being taken to remedy it).
73
CONFORMED COPY
22.7 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 paragraph (c)(i) or
paragraph (c)(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.
74
CONFORMED COPY
(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.
22.8 "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 or the shareholders 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 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 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 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 27 (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
75
CONFORMED COPY
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.
23. FINANCIAL COVENANTS
23.1 FINANCIAL DEFINITIONS
In this Clause 23.1:
"ACQUISITION COSTS" means all non-periodic fees, costs and expenses,
stamp, registration and other Taxes incurred by the Company or any
other member of the Group in connection with the Akzo Nobel
Retirement.
"BORROWINGS" means, at any time, the outstanding principal, capital or
nominal amount and any fixed or minimum premium payable on prepayment
or redemption of any indebtedness for or in respect of:
(a) moneys borrowed and debit balances with financial
institutions;
(b) any amount raised by acceptance under any acceptance credit
facility;
(c) any amount raised pursuant to any note purchase facility or
the issue of bonds, notes, debentures, loan stock or any
similar instrument;
(d) the amount of any liability in respect of any lease or hire
purchase contract which would, in accordance with GAAP, 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);
(f) 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
(excluding any given in respect of trade credit arising in the
ordinary course of business);
(g) any amount raised by the issue of redeemable shares which are
redeemable before the Termination Date of each Facility;
(h) any amount of any liability under an advance or deferred
purchase agreement arranged primarily as a method of raising
finance or financing the acquisition of an asset;
(i) any amount raised under any other transaction (including any
forward sale or purchase agreement) having the commercial
effect of a borrowing; and
76
CONFORMED COPY
(j) (without double counting) the amount of any liability in
respect of any guarantee or indemnity for any of the items
referred to in paragraph (a) to (i) above.
"COMBINED EBITDA" means in respect of any Relevant Period, the
combined earnings before Combined Senior Interest Expenses, taxation,
depreciation and amortisation of the Group,
(a) excluding:
(i) (to the extent otherwise included) any gain over book
value of any member of the Group or any Affiliate of
any such member and after adding back any loss on book
value arising on the sale, lease or disposal of any
asset by any member of the Group or any Affiliate of
any such member (other than on the sale of trading
stock) during such period and any gain or loss arising
on revaluation of any asset during such period); and
(ii) realised and unrealised exchange gains and losses
which do not relate to ordinary trading activities,
(b) and adding back:
(i) the non-cash component of any restructuring charges or
asset impairments arising as a result of restructuring
incurred during the period; and
(ii) the cash component of any restructuring expenditure
incurred during the period (subject to a maximum in
any one 12 month period of US$15,000,000 and a
cumulative cap during the term of the Facilities of
US$30,000,000); and
(iii) any cash expenditures incurred during the period for
the purposes of defending the Group's Intellectual
Property rights.
"COMBINED FINANCIAL STATEMENTS" of the Group means the financial
statements reflecting the combined financial statements of Flexsys
Holding B.V. (and its Subsidiaries), Flexsys Rubber Chemicals Limited
and Flexsys America L.P. (calculated in accordance with GAAP).
"COMBINED SENIOR INTEREST EXPENSES" means, for any Relevant Period,
the aggregate amount of the accrued interest, commission, fees,
discounts, prepayment penalties or premiums and other finance payments
in respect of Borrowings whether paid, payable or capitalised by any
member of the Group in respect of that Relevant Period:
(a) EXCLUDING any such obligations to any other member of the
Group;
(b) INCLUDING the interest element of leasing and hire purchase
payments;
(c) INCLUDING any accrued commission, fees, discounts and other
finance payments payable by any member of the Group under any
interest rate hedging
77
CONFORMED COPY
arrangement (but excluding, for the avoidance of doubt, any
marked to market hedging gains or losses);
(d) DEDUCTING any accrued commission, fees, discounts and other
finance payments owing to any member of the Group under any
interest rate hedging instrument (but excluding, for the
avoidance of doubt, any marked to market hedging gains or
losses);
(e) EXCLUDING any Acquisition Costs; and
(f) EXCLUDING any interest in respect of the loan made under the
Subordinated Loan.
"COMBINED SENIOR TOTAL FINANCIAL DEBT" means, at any time, the
Combined Total Debt after deducting the aggregate amount of all
obligations of the Group for or in respect of Borrowings under the
Subordinated Loan and so that no amount shall be included or excluded
more than once.
"COMBINED TANGIBLE NET WORTH" means, at any time, the aggregate of the
amounts paid up or credited as paid up on the issued ordinary share
capital of the Company and Flexsys America L.P. and Flexsys Rubber
Chemicals Limited and the aggregate amount of the reserves of the
Group,
INCLUDING:
(a) any amount credited to the share premium account;
(b) any capital redemption reserve fund; and
(c) any balance standing to the credit of the combined profit and
loss account of the Group,
BUT DEDUCTING:
(a) any debit balance on the combined profit and loss account of
the Group;
(b) (to the extent included) any amount shown in respect of
goodwill (including goodwill arising only on consolidation) or
other intangible assets of the Group;
(c) any amount in respect of interests of non-Group members in
Group subsidiaries (other than the interests in Flexsys
America LP and Flexsys Rubber Chemicals Ltd);
(d) (to the extent included) any amounts arising from an upward
revaluation of assets made at any time after 2006; and
(e) (to the extent included) any non-cash adjustments arising from
accumulated currency adjustments made at any time after 2006,
and so that no amount shall be included or excluded more than once.
78
CONFORMED COPY
"COMBINED TOTAL DEBT" means, at any time, the aggregate amount of all
obligations of the Group for or in respect of Borrowings but:
(a) excluding any such obligations to any other member of the
Group; and
(b) including, in the case of finance leases, only the capitalised
value therefore,
and so that no amount shall be included or excluded more than once.
"EBITDA" means earnings before Combined Senior Interest Expenses,
taxation, depreciation and amortisation.
"RELEVANT PERIOD" means each period of twelve months ending on the
last day of each quarter of the Company's financial year.
23.2 FINANCIAL CONDITION
The Company shall ensure that:
(a) INTEREST COVER
The ratio of Combined EBITDA to Combined Senior Interest
Expenses in respect of any Relevant Period shall not be less
than 4:1.
(b) SENIOR LEVERAGE
The ratio of Combined Senior Total Financial Debt at any time
to Combined EBITDA (the "SENIOR LEVERAGE RATIO") in respect of
any Relevant Period shall not at any time exceed 3:1.
(c) COMBINED TANGIBLE NET WORTH
The Combined Tangible Net Worth in respect of any Relevant
Period shall not be less than US$75,000,000 plus an amount
equal to 75 per cent. of the combined net income of the Group
in respect of each complete financial year of the Company
ending after the date of this Agreement.
23.3 FINANCIAL TESTING
The financial covenants set out in Clause 23.2 (Financial condition)
shall be tested quarterly by reference to each of the Combined
Financial Statements of the Group and/or each Compliance Certificate
delivered pursuant to Clause 22.2 (Compliance Certificate).
24. GENERAL UNDERTAKINGS
The undertakings in this Clause 24 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.
24.1 AUTHORISATIONS
Each Obligor shall promptly obtain, comply with and do all that is
necessary to maintain in full force and effect any Authorisation
required under any law or regulation of the Relevant Jurisdictions to
enable it to perform its obligations under the Finance
79
CONFORMED COPY
Documents and subject to any Reservation to ensure the legality,
validity, enforceability or admissibility in evidence in each Relevant
Jurisdiction of any Finance Document.
24.2 COMPLIANCE WITH LAWS
(a) Each Obligor shall comply in all respects with all laws to
which it may be subject, if failure so to comply might be
reasonably likely to have a Material Adverse Effect subject to
any Reservations.
(b) Each Dutch Obligor shall comply in all respects with the Dutch
FSA.
24.3 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 over any of its assets.
(b) No Obligor shall (and the Company shall ensure that no other
member of the Group will):
(i) sell, transfer or otherwise dispose of any of its
assets on terms whereby they are or may be leased to
or re-acquired by an Obligor or any other member of
the Group;
(ii) sell, transfer or otherwise dispose of any of its
receivables on recourse terms;
(iii) 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
(iv) 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 (any
such matter being "QUASI-SECURITY").
(c) Subject to paragraph (d) below, paragraphs (a) and (b) above
do not apply to:
(i) any netting or set-off arrangement entered into by any
member of the Group in the ordinary course of its
banking arrangements for the purpose of netting debit
and credit balances;
(ii) any lien arising by operation of law in the ordinary
course of business and securing amounts not more than
30 days overdue;
(iii) any lien arising by operating of law in the ordinary
course of business and securing amounts more than 30
days overdue PROVIDED THAT such overdue amounts are
being contested by the relevant Obligor in good faith;
80
CONFORMED COPY
(iv) any Security over or affecting (or transaction
("QUASI-SECURITY") described in paragraph (b) above)
affecting any asset acquired by a member of the Group
after the date of this Agreement if:
(A) the Security or Quasi-Security was not created
in contemplation of the acquisition of that
asset by a member of the Group;
(B) 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
(C) the Security or Quasi-Security is removed or
discharged within three months of the date of
acquisition of such asset;
(v) any Security or Quasi-Security over or affecting any
asset of any company which becomes a member of the
Group after the date of this Agreement, where the
Security or Quasi-Security is created prior to the
date on which that company becomes a member of the
Group, if:
(A) the Security or Quasi-Security was not created
in contemplation of the acquisition of that
company;
(B) the principal amount secured has not increased
in contemplation of or since the acquisition
of that company; and
(C) the Security or Quasi-Security is removed or
discharged within three months of that company
becoming a member of the Group; or
(vi) the Transaction Security;
(vii) any netting or set-off arrangement entered into under
any hedging transaction permitted under Clause 24.14
where the obligations of the parties are calculated by
reference to net exposure under that hedging
transaction;
(viii) any Quasi-Security arising as a result of a sale,
transfer or other disposal which is a permitted under
Clause 24.4 (Disposals);
(ix) any Security or Quasi-Security 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
US$1,000,000 (or its equivalent in another currency or
currencies) at any time and is released forthwith upon
final determination of such litigation PROVIDED THAT
such Security or Quasi-Security shall be created or
arise solely pursuant to a legal obligation or
requirement;
(x) 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
81
CONFORMED COPY
costs of shipment, insurance and storage of goods
acquired by any member of the Group in the ordinary
course of trading;
(xi) 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;
(xii) 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 trading and not as a result of
any default or omission by any member of the Group;
(xiii) any Quasi Security arising as a result of any
factoring of receivables permitted under Clause 24.14;
(xiv) any Security or Quasi-Security with the consent of the
Majority Lenders;
(xv) 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;
(xvi) 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 (i) to (xv) above) does not at any time
exceed US$1,500,000 (or its equivalent in another
currency or currencies).
(d) Flexsys Industria e Comercio Ltda is not permitted to create
or permit to subsist any Security or Quasi-Security nor incur
any secured or quasi-secured obligations (howsoever described)
referred to in paragraph (c)(iv) to (c)(xv) above.
(e) No Belgian Obligor shall create any Security or Quasi-Security
(including but by no means limited to any pledge) over or
affecting any inventory of that Belgian Obligor.
24.4 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.
82
CONFORMED COPY
(b) Paragraph (a) above does not apply to any sale, lease,
transfer or other disposal:
(i) made in the ordinary course of trading and on arm's
length terms of the disposing entity;
(ii) of assets in exchange for other assets comparable or
superior as to type, value and quality;
(iii) by one Obligor to another Obligor PROVIDED THAT if the
first Obligor has granted security over any such asset
that other Obligor must be party to a legally valid
binding and enforceable Security Document which
creates a first priority Security over the assets
transferred;
(iv) for cash on arm's length terms of any obsolete assets
not required for the efficient operation of the
business of the Group by any member of the Group;
(v) of cash where that disposal is not otherwise
prohibited by the Finance Documents;
(vi) by the Company of all shares held in Flexsys America
Co. to Solutia Inc. (or any of its affiliates); or
(vii) of assets by a member of the Group which is not an
Obligor to another member of the Group which is not an
Obligor; or
(viii) of assets with the consent of the Majority Lenders; or
(ix) not otherwise permitted 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) does
not exceed US$10,000,000 (or its equivalent in another
currency or currencies).
24.5 MERGER
No Obligor shall (and the Company shall ensure that no other member of
the Group will) enter into any amalgamation, demerger, merger or
corporate reconstruction (including by way of dividend in specie),
other than:
(a) any such arrangements involving only members of the Group; or
(b) the transfer of ownership of Flexsys America Co. to Solutia
Inc..
24.6 CHANGE OF BUSINESS
Save as may be required in connection with the German Debt Pushdown,
the Company shall procure that no material adverse change is made to
the general nature of the business of the Company or the Group from
that carried on at the date of this Agreement.
24.7 INSURANCE
(a) Each Obligor shall (and the Company shall ensure that each
other member of the Group will) maintain insurances on and in
relation to its business and assets with reputable independent
underwriters or insurance companies:
83
CONFORMED COPY
(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 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
24.8 ENVIRONMENTAL COMPLIANCE
Each Obligor shall (and the Company shall ensure that each member of
the Group will) comply in all material respects with all Environmental
Law and obtain and maintain any Environmental Permits and take all
reasonable steps in anticipation of known or expected future changes
to or obligations under the same where failure to do so might be
reasonably likely to have a Material Adverse Effect.
24.9 ENVIRONMENTAL CLAIMS
The Company shall inform the Agent in writing as soon as reasonably
practicable upon becoming aware of the same:
(a) if any Environmental Claim has been commenced or (to the best
of the Company's knowledge and belief) is threatened against
any member of the Group; or
(b) of any facts or circumstances which will or are reasonably
likely to result in any Environmental Claim being commenced or
threatened against any member of the Group,
where the claim would be reasonably likely, if determined against that
member of the Group, to have a Material Adverse Effect.
24.10 TAXATION
Each Obligor shall (and the Company shall ensure that each member of
the Group will) duly and punctually pay and discharge all Taxes
imposed upon it or its assets within the time period allowed without
incurring penalties (expect to the extent that (a) such payment is
being contested in good faith, (b) adequate reserves are being
maintained for those Taxes and (c) where such payment can be lawfully
withheld).
84
CONFORMED COPY
24.11 ACQUISITIONS
(a) No Obligor shall (and the company shall ensure that no other
member of the Group will) acquire any company, business or
undertaking.
(b) Paragraph (a) above shall not apply to any acquisition by a
member of the Group of any company, business or undertaking
(including for the avoidance of doubt, any acquisition in
connection with the German Debt Pushdown) provided that:
(i) the Finance Parties will enjoy the same or equivalent
Security and recourse to such asset following
completion of that acquisition;
(ii) the Company certifies to the Agent (signed by two
directors) in form and substance substantially similar
to the certificate contained in Schedule 13 (Sources
and Uses Table) that following such acquisition, the
Group will continue to have excess liquidity (as
defined in Clause 24.18 (Subordinated Loan) of this
Agreement) of at least US$40,000,000;
(iii) the Company delivers financial projections
demonstrating compliance with the financial covenants
contained in Clause 23 (Financial Covenants) of this
Agreement for the balance of the term of the
Facilities, financial projections of which shall take
into account such acquisition and be prepared on a pro
forma basis; and
(iv) the consideration for any acquisition (when aggregated
with the consideration for any other acquisition
permitted under this paragraph (b)) does not exceed
US$30,000,000 in any financial year of the Group and
if the consideration for such acquisitions exceeds
US$30,000,000 in aggregate in any financial year the
Group must have the prior consent of the Agent (acting
on instruction of the Majority Lenders).
24.12 LOANS AND GUARANTEES
(a) No Obligor shall (and the Company shall ensure that no member
of the Group will) make any loans, grant any credit (save in
the ordinary course of business or to another member of the
Group (including for the avoidance of doubt, as may be
required in connection with the German Debt Pushdown)) or give
any guarantee or indemnity (except as required under any of
the Finance Documents) to or for the benefit of any person or
otherwise voluntarily assume any liability, whether actual or
contingent, in respect of any obligation of any person other
than:
(i) any guarantee, bond, indemnity or counter-indemnity
existing at the date of this Agreement; or
(ii) any unsecured guarantee issued by an Obligor in
respect of the Financial Indebtedness of any other
member of Group which Financial Indebtedness is
permitted under the Finance Documents;
85
CONFORMED COPY
(iii) any unsecured 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;
(iv) the endorsement of negotiable instruments in the
ordinary course of trade;
(v) a loan from a member of the Group to its directors
and/or employees PROVIDED THAT the aggregate amount of
loans to directors or employees of members of the
Group does not exceed US$10,000 at any time;
(b) No Obligor shall (and the Company shall ensure that no member
of the Group will) agree to any arrangement after the date of
this Agreement which might increase the amount which it may be
liable to pay in connection with any guarantee, bond,
indemnity or counter-indemnity permitted under paragraph
(a)(i) above, other than in respect of any guarantee, bond,
indemnity or counter-indemnity issued by an Obligor to another
member of the Group.
(c) Notwithstanding the foregoing, no loans or credit will be
provided by any member of the Group to Solutia Inc. or any of
its affiliated debtors and no member of the Group will give
any guarantee or indemnity to any person (except as required
under any of the Finance Documents) to or for the benefit of
any person or otherwise voluntarily assume any liability,
whether actual or contingent, in respect of any obligation of
Solutia Inc. or any of its Affiliates.
24.13 DIVIDENDS
(a) Subject to Clause 24.5(b) and Clause 24.18(c), no Obligor
shall (and the Company shall ensure that no member of the
Group will) pay, make or declare any dividend or other
distribution in respect of any financial year of that member
of the Group to any person or persons outside the Group unless
and until:
(i) Solutia Inc.'s proceedings under Title 11 of the
United States of America Code entitled Bankruptcy have
closed and a final decree has been entered by the
bankruptcy court in which such proceedings have been
filed; and
(ii) after giving effect to the dividend or other
distribution, the Combined Tangible Net Worth as
calculated on a pro forma basis will equal or exceed
US$200,000,000; and
(iii) after giving effect to the dividend or other
distribution, the Senior Leverage ratio (as calculated
on a pro forma basis and in accordance with paragraph
(b) of Clause 23.2 (Financial condition) will be less
than 1.75:1.
(b) Notwithstanding the foregoing, the Company may distribute in
kind its shareholding in Flexsys America Co.
24.14 INDEBTEDNESS
(a) The Company shall ensure that no member of the Group shall
incur, create or permit to subsist or have outstanding any
Financial Indebtedness for the credit
86
CONFORMED COPY
of any person (including, for the avoidance of doubt, Solutia
Inc. or any of its Affiliates) which is not a member of the
Group or enter into any agreement or arrangement whereby it is
entitled to incur, create or permit to subsist any Financial
Indebtedness.
(b) Paragraph (a) above does not apply to any Financial
Indebtedness:
(i) arising under or permitted by the Finance Documents;
(ii) arising under the Subordinated Loan as in force at the
date of this Agreement and subject always to the terms
of this Agreement and the Intercreditor Agreement;
(iii) any Financial Indebtedness arising under a loan or
guarantee permitted pursuant to Clause 24.12;
(iv) any Financial Indebtedness arising under any unsecured
derivative transaction to hedge actual or projected
interest or currency exposure arising in the ordinary
course of business of a member of the Group and not
for speculative purposes; or
(v) not falling within paragraph (b)(i) to (b)(iv) above
(including letters of credit issued pursuant to
arrangements outside of this Agreement) if the
aggregate amount drawn at any time does not exceed
US$30,000,000 (or its equivalent) and PROVIDED THAT
such Financial Indebtedness is not incurred for the
credit of Solutia Inc. or any of its Affiliates.
(c) Notwithstanding the foregoing, Flexsys Industria e Comercio
Ltda is not entitled to incur, create or permit to subsist any
Financial Indebtedness other than:
(i) Financial Indebtedness arising under or permitted by
the Finance Documents;
(ii) Financial Indebtedness incurred for the credit of
another member of the Group; and/or
(iii) Financial Indebtedness constituting trade credit
incurred in the ordinary course of trading.
(d) Notwithstanding the foregoing, Flexsys America L.P. and
Flexsys Industria e Comercio Ltda are not entitled to incur,
create or permit to subsist any Financial Indebtedness other
than:
(i) Financial Indebtedness arising under or permitted by
the Finance Documents;
(ii) Financial Indebtedness incurred for the credit of
another member of the Group;
87
CONFORMED COPY
(iii) Financial Indebtedness constituting trade credit
incurred in the ordinary course of trading;
(iv) Financial Indebtedness under the Subordinated Loan;
and/or
(v) Financial Indebtedness not exceeding US$5,000,000 in
aggregate between both Flexsys America L.P. and
Flexsys Industria e Comercio Ltda.
24.15 PRESERVATION OF ASSETS
Each Obligor shall, and the Company shall ensure that each member of
the Group shall, maintain and preserve, 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 of its assets that are necessary for the conduct of its
business, as conducted at the date of this Agreement.
24.16 ACCESS
Each Obligor shall, and the Company shall ensure that each member of
the Group whose shares are the subject of the Transaction Security
shall:
(a) subject to pre-existing duties of confidentiality, on request
of the Agent, provide the Agent and Security Trustee with any
information the Agent or Security Trustee may reasonably
require about that company's business and affairs, the Charged
Property and its compliance with the terms of the Security
Documents; and
(b) permit the Security Trustee, its representatives, delegates,
professional advisers and contractors, free access at all
reasonable times and on reasonable notice at the cost of the
Obligors, (a) subject to pre-existing duties of
confidentiality, to inspect and take copies and extracts from
the books, accounts and records of that company and (b) to
view the Charged Property (without becoming liable as
mortgagee in possession) but so that prior to the occurrence
of an Event of Default, no more than one such inspection
and/or viewings may take place in any financial year in
respect of any Obligor.
24.17 PARI PASSU RANKING
Each Obligor shall, and the Company shall ensure that each member of
the Group shall ensure that 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.
24.18 SUBORDINATED LOAN
(a) Any increase to the principal amount of the Subordinated Loan
(such increase being up to a maximum principal amount of
US$175,000,000) that may be agreed between the Company and
Solutia Inc. having regard to the liquidity and funding needs
of the Group as a whole shall be permitted, subject to prior
approval of the increase being obtained from the bankruptcy
court in which Solutia Inc.'s proceedings under Title 11 of
the United States of America Code entitled Bankruptcy have
been filed, if applicable.
88
CONFORMED COPY
(b) Interest on the Subordinated Loan shall be capitalised and
shall not be due and payable unless and until:
(i) Solutia Inc.'s proceedings under Title 11 of the
United States of America Code entitled Bankruptcy have
closed and a final decree has been entered by the
bankruptcy court in which such proceedings have been
filed; and
(ii) after giving effect to desired level of interest to be
paid, the Combined Tangible Net Worth as calculated on
a pro forma basis will equal or exceed $200,000,000;
and
(iii) after giving effect to desired level of interest to be
paid, the Senior Leverage ratio (as calculated on a
pro forma basis and in accordance with paragraph (b)
of Clause 23.2 (Financial Condition)) will be less
than 1.75:1.
(c) If the Borrower determines that there is excess liquidity in
the Group ("EXCESS LIQUIDITY" being understood by all parties
to this Agreement to be cash and availability under this
Agreement that is readily available to the Group and not
required by the Group to meet its funding requirements,
disregarding any cash that is being used for collateral or
similar purposes of the Group) as a direct result of the
Acquisition Costs being less than anticipated at Financial
Close, the Borrower shall be entitled to make a one-time
repayment towards the balance of the debt outstanding under
the Subordinated Loan (or by payment of a preferred dividend
to Solutia Europe N.V.) of an amount up to the excess of
liquidity in the Group within 30 days of Financial Close
PROVIDED THAT:
(i) the Borrower certifies that there is excess liquidity
in the Group and the amount thereof;
(ii) the Borrower certifies that the Acquisition Costs were
or will be less than anticipated at Financial Close;
(iii) the Borrower completes and certifies the Sources and
Uses Table set out in Schedule 13 (Sources and Uses
Table);
(iv) in calculating the excess liquidity of the Group the
Borrower must:
(A) take into account all cash and undrawn
availability under Facility B; and
(B) take into account the principal amount
outstanding under the Subordinated Loan at
Financial Close; and
(C) take into account the principal amount
outstanding under the Facilities at Financial
Close; and
(D) take into account any (growth) capital
expenditure in excess of the capital
expenditure either included in the financial
model or that the Group can reasonably expect
to entertain; and
89
CONFORMED COPY
(E) deduct the actual purchase price of the Akzo
Nobel Retirement; and
(F) deduct the payments made (or to be made)
pursuant to the Long Term Incentive
Compensation; and
(G) deduct the payments made (or to be made) under
the Pension Fund Obligations; and
(H) deduct the payments made (or to be made)
pursuant to the Crystex Acquisition; and
(I) deduct the repayment in full of all amounts
outstanding under the Existing Facility; and
(J) deduct US$40,000,000; and
(v) after giving effect to the one-time repayment, the
balance of the debt still outstanding under the
Subordinated Loan shall be a minimum of
US$100,000,000;
(vi) the Borrower shall continue to be in compliance with
all applicable provisions under Clause 22 (Information
Undertakings), Clause 23 (Financial covenants) and
Clause 24 (General Undertakings); and
(vii) if a portion of the payment is made by way of a
preferred dividend to Solutia Europe N.V., the
aggregate amount of such preferred dividend does not
exceed US$10,000,000.
24.19 RELATIONSHIP WITH SOLUTIA INC.
(a) The Company shall ensure that no member of the Group shall
become a debtor in a proceeding pursuant to Title 11 of the
United States Code including in connection with the Chapter 11
proceedings of Solutia Inc. and its affiliated debtors in such
proceedings from time to time (collectively, for the purposes
of this Clause 24.19 (Relationship with Solutia Inc.),
"SOLUTIA") currently pending and jointly administered before
the United States Bankruptcy Court for the Southern District
of New York 03-17949 (PCB).
(b) Ordinary corporate formalities (as construed in accordance
with accounting principles and practices generally accepted in
the Relevant Jurisdictions) shall be maintained and observed
at all times between all members of the Group and Solutia. In
connection therewith, at all times, all members of the Group
shall (i) maintain separate books, accounting records (which
includes separate financial statements (which may be
unaudited) showing assets and liabilities separate and apart
from those of any other Person), bank accounts, and other
entity documents and records separate from those of Solutia;
(ii) hold itself out to the public as a legal entity separate
from Solutia; (iii) not commingle its assets with assets of
Solutia or any other Person and not hold itself out as being
liable for the debts of another; (iv) conduct business in its
own name and through its own authorised officers and agents
and strictly comply with all organisational formalities
necessary to maintain its existence; (v) manage its
liabilities
90
CONFORMED COPY
separately from those of Solutia and pay and discharge its own
liabilities (including all administrative expenses) from its
own separate assets; (vi) maintain an arm's length
relationship with Solutia and enter into transactions with
Solutia only on a commercially reasonable basis; (vii) not
hold out its credit or assets as being available to satisfy
the obligations of others; and (viii) not pledge its assets
for the benefit of Solutia or enter into any guarantees or
otherwise become liable for the obligations of Solutia.
24.20 ADDITIONAL SECURITY
(a) Subject to compliance with the Agreed Security Principles,
each of the Company and each Material Group Member shall
accede to this Agreement as a Guarantor within 45 days of
becoming a Material Group Member and grant such security as
the Security Trustee reasonably requests within such time
period (and having regard to the type of Security Interests
created over relevant classes of assets under the Security
Documents at Financial Close).
(b) Subject to the Agreed Security Principles each of the Company
and each Material Group Member shall promptly (and in any
event within 45 days of being requested or such longer period
as the Agent (acting on instructions of the Majority Lenders)
may agree, having regard to any practical issues involved in
the granting of such additional Security)) grant to the
Security Trustee additional Security in the form of first
ranking fixed Security over all of its assets and undertakings
if so requested by the Agent (acting reasonably on its own
behalf or on instruction of the Majority Lenders) having
regard to the circumstances of the Group and the shareholders
of the Group as a whole.
24.21 COMPLIANCE WITH ERISA
No Obligor shall:
(a) allow, or permit any of its ERISA Affiliates to allow, (i) the
termination of any Employee Plan with respect to which any
Obligor or any ERISA Affiliate may have any liability, (ii)
any Obligor or ERISA Affiliates to withdraw from any Employee
Plan, (iii) any ERISA Event to occur with respect to any
Employee Plan, or (iv) any Accumulated Funding Deficiency (as
defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, to exist involving any of its Employee
Plans; to the extent that any of the events described in (i),
(ii), (iii) or (iv), singly or in the aggregate, could have a
Material Adverse Effect;
(b) allow, or permit any of its ERISA Affiliates to allow, (i) the
aggregate amount of Unfunded Pension Liability among all
Employee Plans (taking into account only Employee Plans with
positive Unfunded Pension Liability) at any time to exist
where such amount could have a Material Adverse Effect; or
(ii) the aggregate potential withdrawal liability under
Section 4201 of ERISA, if the Company and its ERISA Affiliates
were to completely or partially withdraw from all
Multiemployer Plans, to exist where such amount could have a
Material Adverse Effect; or
91
CONFORMED COPY
(c) fail, or permit any of its ERISA Affiliates to fail, to comply
in any material respect with ERISA or the related provisions
of the Code, if any such non-compliance, singly or in the
aggregate, would be reasonably likely to have a Material
Adverse Effect.
24.22 FEDERAL RESERVE REGULATIONS
Each U.S. Borrower will use the Facilities without violating
Regulations T, U and X.
24.23 COMPLIANCE WITH U.S. REGULATIONS
No Obligor shall (and the Company shall ensure that no other member of
the Group will) become an "investment company," or an "affiliated
person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the 1940 Act.
Neither the making of any Loan, or the application of the proceeds or
repayment of any Loan by any Obligor nor the consummation of the other
transactions contemplated by this agreement will violate any provision
of such act or any rule, regulation or order of the SEC under the 1940
Act.
24.24 ANTI-MONEY LAUNDERING
Each Obligor will use commercially reasonable efforts to ensure that
no funds used to pay the obligations under the Finance Documents are
derived from any unlawful activity.
24.25 FURTHER ASSURANCE
(a) Each Obligor shall (and the Company shall ensure that each
member of the Group will) promptly do all such acts or execute
all such documents (including assignments, transfers,
mortgages, charges, notices and instructions) as the Security
Trustee may reasonably specify) and in such form as the
Security Trustee may reasonably require in favour of the
Security Trustee or its nominee(s)):
(i) to perfect the Security created or intended to be
created under or evidenced by the Security Documents
(which may include the execution of a mortgage,
charge, assignment or other Security over all or any
of the assets which are, or are intended to be, the
subject of the Transaction Security) or for the
exercise of any rights powers and remedies of the
Security Trustee or the Finance Parties provided by or
pursuant to the Finance Documents or by law;
(ii) to confer on the Security Trustee or confer on the
Finance Parties Security over any property and assets
of that Obligor located in any jurisdiction equivalent
or similar to the Security intended to be conferred by
or pursuant to the Security Documents; and/or
(iii) take all such action as is available to it (including
making all filings and registrations) as may be
necessary for the purpose of the creation, perfection,
protection or maintenance of any Security conferred or
intended to be conferred on the Security Trustee or
the Finance Parties by or pursuant to the Finance
Documents.
92
CONFORMED COPY
24.26 COMPANY AND MATERIAL GROUP MEMBER PROFIT
Subject to compliance with the Agreed Security Principles, the
Obligors shall at all times represent in aggregate a minimum of:
(a) 85 per cent. of the Combined EBITDA; and/or
(b) 85 per cent. of the combined assets of the Group; and/or
(c) 85 per cent. of the combined revenue (as calculated in
accordance with GAAP) of the Group,
and to be determined by reference to the quarterly unaudited Combined
Financial Statements of the Group.
24.27 CAPITAL REDUCTION
(a) The Company, Flexsys America L.P. and Flexsys Rubber Chemicals
Limited shall not be subject to any cancellation of shares,
share buy-back or other reduction of issued share capital or
partnership interests.
(b) Paragraph (a) above does not apply to any cancellation of
shares or other capital reduction that arises as a direct
consequence of the Akzo Nobel Retirement (whensoever cancelled
or reduced).
24.28 MALAYSIAN CENTRAL BANK
Flexsys Chemicals (M) Sdn. Bhd. undertakes to submit the following
information in relation to the guarantee given by it under this
Agreement and the security created by it under the deed of debenture,
the ▇▇▇▇ ▇▇▇▇▇▇'▇ caveat and the charge of its real property held
under HS(D) 20034 PT 8004 and HS(D) 20035 PT both in the Mukim of
Sungai Karang, District of Kuantan, State of Pahang, Malaysia, to BNM
for registration and to obtain an acknowledgement of registration from
BNM prior to delivery of the first Utilisation Request and the Company
undertakes to procure that Flexsys Chemicals (M) Sdn. Bhd. complies
with its obligations under this Clause 24.28 (Malaysian Central Bank)
within such time period:
(a) its full name, as issuer of the relevant guarantee, the
debenture, the ▇▇▇▇ ▇▇▇▇▇▇'▇ caveat and the charge;
(b) the full names of all parties whose obligations are guaranteed
under such guarantee and in favour of whom the debenture and
charge are created;
(c) the amount guaranteed under such guarantee and the amount
secured under the debenture and the charge;
(d) the full name and address of the beneficiary(ies) of such
guarantee, debenture and charge; and
(e) the purpose of such guarantee, debenture, the ▇▇▇▇ ▇▇▇▇▇▇'▇
caveat and charge; and
(f) any other information required by BNM.
93
CONFORMED COPY
On and at any time after the occurrence of an Event of Default,
Flexsys Chemicals (M) Sdn. Bhd, undertakes to notify BNM that the
guarantee given by it under this Agreement and the security created by
it under the deed of debenture, the ▇▇▇▇ ▇▇▇▇▇▇'▇ caveat and the
charge of its real property held under HS(D) 20034 PT 8004 and HS(D)
20035 PT both in the Mukim of Sungai Karang, District of Kuantan,
State of Pahang, Malaysia to BNM will be called upon, failing which
the Security Trustee shall be entitled to notify BNM of the same.
Flexsys Chemicals (M) Sdn. Bhd. further undertakes to notify BNM
changes to the guarantee under this Agreement and the security created
by it under the deed of debenture, the ▇▇▇▇ ▇▇▇▇▇▇'▇ caveat and the
charge, and to provide BNM with any information they may require from
time to time.
24.29 PENSIONS
(a) 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:
(i) are maintained and operated in all material respects
in accordance with all applicable laws and contracts
and their governing provisions; and
(ii) 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 be
reasonably likely to have a Material Adverse Effect.
(b) 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).
24.30 PERFECTION
The Obligors shall complete any applicable Perfection Requirements in
accordance with the Finance Documents and, where a time limit is
imposed by law or regulation, in any event within such time limit.
24.31 LIMITATIONS OF GENERAL UNDERTAKINGS
(a) Notwithstanding the introductory provision of Clause 24
(General Undertakings) (but with-out prejudice to the
performance of any of the obligations under Clause 24 (General
Undertakings) by any Obligor whose relevant jurisdiction is
not the Federal Republic of Germany), the undertakings set out
in Clauses 24.4 (Disposals), 24.5 (Merger), 24.6 (Change of
Business), 24.11 (Acquisitions), and 24.13 (Dividends) (such
undertakings, the "RELEVANT UNDERTAKINGS") are not and shall
not be given by any German Obligor whose relevant jurisdiction
is the Federal Republic of Germany (each a "GERMAN OBLIGOR").
However:
(i) each German Obligor shall give to the Agent not less
than 20 Business Days' prior written notice if it or
any of its Subsidiaries proposes to take
94
CONFORMED COPY
or permit any action or circumstance which, if all the
Relevant Undertakings had been given by that German
Obligor on the Closing Date and had thereafter
remained in force, would constitute a breach of any of
the Relevant Undertakings by a member of the German
Group. On receipt of any such notice, the Agent shall
without undue delay send a copy to each Lender;
(ii) the Agent shall be entitled, within 10 Business Days
of receipt of a notice under sub-paragraph (a) above,
to request that the relevant German Obligor supply to
the Agent in sufficient copies for the Lenders, such
further relevant information as the Agent (acting
reasonably) may consider necessary for the purposes of
this Clause 24.31 (Limitations of General
Undertakings) and such German Obligor shall supply
such further information promptly and in any event
within 10 Business Days of the date of request
therefore;
(iii) if any Lender considers that the relevant action or
circumstance (taken alone or together with other
actions or circumstances, whether or not permitted
hereunder), may have a Material Adverse Effect or
materially and adversely affects its interests as a
Lender under the Facility Documents, it may so notify
the Agent in writing;
(iv) if, by not later than the date 10 Business Days after
receipt by the Agent of a notice pursuant to
sub-paragraph (i) above (or, if later and additional
information has been requested pursuant to
sub-paragraph (ii) above, by not later than the date
10 Business Days after receipt by the Agent of such
additional information if received within the
prescribed time or the date 10 Business Days after the
request therefore if not), the Agent has received
notices pursuant to sub-paragraph (iii) above from
Lenders which constitute the Majority Lenders, the
Agent shall promptly notify the Borrower and the
Lenders; and
(v) if the Agent gives notice to the Borrower pursuant to
sub-paragraph (iv) above or the relevant action is
undertaken or circumstance is permitted before the
date 2 Business Days after the latest time for the
receipt by the Agent of notices pursuant to
sub-paragraph (iv) above, the undertaking of the
relevant action or permitting of the relevant
circumstances shall immediately constitute an Event of
Default PROVIDED THAT, for the avoidance of doubt, no
failure of any German Obligor to duly perform or
comply with any obligation under a Relevant
Undertaking shall of itself constitute an Event of
Default.
(b) If, in the opinion of the Agent or the Majority Lenders any of
the measures referred to in the Relevant Undertaking when
implemented by a member of the Group would negatively affect
the risk assessment of the Lenders in respect of the ability
of relevant German Obligor to perform its obligations under
the Finance Documents, the Parent will ensure that the
relevant German Obligor will, to the fullest extent legally
permissible, provide additional Security to the
95
CONFORMED COPY
Finance Parties as soon as possible but in any event within 20
Business Days following request for the same by the Agent.
24.32 AMENDMENT OF CONSTITUTIONAL DOCUMENTS AND SHARES
(a) Each member of the Group granting Security over Shares (the
"PLEDGOR") in another Group company shall not without the
prior written consent of the Security Trustee (such consent
not to be unreasonably delayed or withheld) vote in favour of,
and undertakes to procure that the Group company whose Shares
it has granted Security over (the "PLEDGEE") shall not without
the prior written consent of the Security Trustee pass a
resolution whereby:
(i) the constitutional documents of the Pledgee would
otherwise be changed as regards the Pledgee's capital
structure in a way which would adversely affect the
Security Trustee's or the Secured Parties' rights
under the relevant Security Document;
(ii) subject to Clause 24.13 (Dividends), the Pledgee would
materially change its policy with respect to dividends
(unless such change is required in order to comply
with any applicable law or regulation);
(iii) where applicable, the objects clause of the Pledgee
contained in its current constitutional documents
would be amended;
(iv) the relevant Shares would be modified or altered in a
way which would adversely affect the Security
Trustee's or the Secured Parties' rights under the
relevant Security Documents; and
(v) any term of the relevant Security Document and/or this
Agreement would be violated.
(b) In the event that a Pledgee seeks to issue new shares or
quotas the Company will procure that any such new shares are
only issued to existing shareholders in such Pledgee pro-rata
to their existing shareholding as at the date of the proposed
issuance.
(c) In the event that the Pledgee changes its constitutional
documents as regards its capital structure (with the prior
written consent of the Security Trustee), the Security created
over the Shares of the Pledgee shall to the extent possible
under applicable laws automatically extend to any new shares,
quotas, participation certificates or similar right or rights
attaching thereto, created in connection with such change, and
the Pledgor granting Security over the Shares undertakes to
comply fully with all instructions received from the Security
Trustee acting in the name and on behalf of the Secured
Parties to perfect such Security granted under the Security
Document.
96
CONFORMED COPY
24.33 GENERAL PROPERTY UNDERTAKINGS
Each member of the Group that has granted Security over Real Property
shall:
(a) repair and keep in good and substantial repair and condition,
in a manner consistent with a reasonably prudent owner, all
the Real Property at any time forming part of the Transaction
Security;
(b) comply with and observe and perform (a) all applicable
requirements of all planning and environmental legislation,
regulations and by-laws relating to the Real Property, (b) any
conditions attaching to any planning permissions relating to
or affecting the Real Property and (c) any notices or other
orders made by any planning, environmental or other public
body in respect of all or any part of the Real Property as
would a prudent owner/operator of such Real Property.
24.34 GERMAN DEBT PUSHDOWN
The Company may undertake a corporate reorganisation and debt push
down in Germany as described below or substantially as described below
or as otherwise agreed to by the Agent acting on the instructions of
the Majority Lenders provided that following such corporate
reorganisation and debt push down the Finance Parties will enjoy the
same or equivalent security and recourse under the relevant Security
Documents and this Agreement as they enjoyed immediately prior
thereto.
The corporate reorganisation and debt push down referred to above is
as follows:
(a) Flexsys AG shall sell all, or substantially all, of its 50 per
cent. equity interest in Flexsys Verkauf GmbH to Flexsys
Verwaltungs- under Beteiligungs GmbH;
(b) Flexsys AG shall distribute a dividend of all proceeds from
the sale of its interest in Flexsys Verkauf GmbH to the
Company. The amount is to be equal to the net distributable
earnings as determined and confirmed by Flexsys AG statutory
auditors under the relevant balance sheet;
(c) the Company shall create New German Hold Co with nominal
capital;
(d) New German Hold Co shall accede to this Agreement as an
Additional Borrower and as an Additional Guarantor in
accordance with this Agreement and comply with all
representations and undertakings required of it in such
capacities under Section 8 (Representations, Undertakings and
Events of Default) of this Agreement;
(e) in accordance with Clause 27.4 (Additional Guarantors), New
German Hold Co shall grant Security over its shares in favour
of the Lenders;
(f) New German Hold Co shall borrow under any part of Facility B;
(g) the Company shall sell/or contribute shares held in Flexsys
Verwaltung- und Beteiligungs GmbH to New German Hold Co;
(h) the Company shall provide all funds received either as a
dividend from Flexsys AG or from the sale of shares in Flexsys
Verwaltungs- und Beteiligungs GmbH
97
CONFORMED COPY
to Flexsys Co-ordination Centre N.V. either by way of a
capital contribution or an intercompany loan;
(i) Flexsys Co-ordination Centre N.V. shall apply all funds
received from the Company in accordance with the step outlined
in paragraph (h) above towards repayment of its Utilisations
outstanding under either Facility;
(j) Flexsys Co-ordination Centre N.V. may transfer by way of
novation a portion of its borrowings under Facility A to the
New German Hold Co. This transfer will be subject to all
necessary measures to be taken by the Obligors and the Lenders
to preserve the existing Security.
24.35 CONDITIONS SUBSEQUENT
The Company will ensure that by the latest date stipulated therefor in
Part II of Schedule 2 it will deliver to the Agent all of the
documents and other evidence listed in Part II of Schedule 2 and will
complete all of the matters referred to therein.
25. EVENTS OF DEFAULT
Each of the events or circumstances set out in this Clause 25 is an
Event of Default (save for Clause 25.19 (Acceleration)) (whether or
not caused by any reason whatsoever outside the control of any Obligor
or any other person).
25.1 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:
(i) administrative or technical error; or
(ii) a Disruption Event; and
(b) payment is made within 5 Business Days of its due date.
25.2 FINANCIAL COVENANTS AND INDEBTEDNESS
Any requirement of Clause 23 (Financial covenants) is not satisfied or
any Obligor does not comply with any provision of Clause 24.14
(Indebtedness) or Clause 24.35 (Conditions Subsequent).
25.3 COMPANY AND MATERIAL GROUP MEMBER PROFIT
The requirements of Clause 24.26 (Company and Material Group Member
Profit) are not satisfied and are not remedied within 45 Business Days
(or such longer period as the Majority Lenders may agree).
25.4 OTHER OBLIGATIONS
(a) An Obligor does not comply with any provision of the Finance
Documents (other than those referred to in Clause 25.1
(Non-payment), Clause 25.2 (Financial covenants and
Indebtedness) and Clause 25.3 (Company and Material Group
Member profit)).
98
CONFORMED COPY
(b) No Event of Default under paragraph (a) above will occur if
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.
25.5 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 or in connection with any Finance
Document is or proves to have been incorrect or misleading in any
material respect when made or deemed to be made and, if capable of
remedy within the grace period referred to below, is not remedied to
the reasonably satisfaction of the Agent within 30 days from the
earlier of notice thereof to the Company and the relevant Obligor
becoming aware of it.
25.6 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 25.6 if the
aggregate amount of Financial Indebtedness or commitment for
Financial Indebtedness falling within paragraphs (a) to (d)
above is less than US$5,000,000 (or its equivalent in any
other currency or currencies).
25.7 INSOLVENCY
(a) A member of the Group is unable or admits inability to pay its
debts as they fall due, suspends making payments on any of its
debts or, by reason of actual or anticipated financial
difficulties, commences negotiations with one or more of its
creditors with a view to rescheduling any of its indebtedness
(including, without limitation, in respect of a member of the
Group incorporated in Germany it is unable to pay its debts as
they fall due (Zahlungsunfahigkeit) or is deemed unable to pay
its debts as they fall due (drohende Zahlungsunfahigkeit) in
the meaning of sections 17 and 18 of the German Insolvency
Code (Insolvenzordnung)).
(b) Save in relation to Flexsys Rubber Chemicals Limited, the
value of the assets of any material Subsidiary of the Group is
less than its liabilities (taking into account contingent and
prospective liabilities) (including, without limitation, in
respect of a member of the Group incorporated in Germany it is
over-indebted
99
CONFORMED COPY
(uberschuldet) in the meaning of section 19 of the German
Insolvency Code (Insolvenzordnung)).
(c) A moratorium is declared in respect of any indebtedness of any
member of the Group.
(d) Any member of the Group which conducts business in France is
in a state of cessation des paiements, or any member of the
Group becomes insolvent for the purpose of any insolvency law.
(e) Any Obligor shall in any U.S. jurisdiction:
(i) apply for, or consent to, the appointment of, or the
taking of possession by, a receiver, custodian,
trustee, examiner or liquidator of itself or of all or
a substantial part of its property;
(ii) make a general assignment for the benefit of its
creditors;
(iii) commence a voluntary case under Title 11 of the United
States of America Code entitled Bankruptcy (or any
successor thereof), as amended;
(iv) file a petition with respect to itself seeking to take
advantage of any other law relating to bankruptcy,
insolvency, reorganisation, liquidation, dissolution,
arrangement or winding up, or composition or
readjustment of debts; or
(v) take any corporate action for the purpose of effecting
any of the foregoing with respect to itself.
25.8 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 Group Member;
(ii) a composition, compromise, assignment or arrangement
with any creditor of any Obligor or Material Group
Member. 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 Group Member or any of its
assets; or
100
CONFORMED COPY
(iv) the enforcement of any Security over any assets of any
Obligor or Material Group Member where such Security
secures Financial Indebtedness in excess of
EUR2,500,000 (or its equivalent in another currency or
currencies),
(v) or any analogous procedure or step is taken in any
jurisdiction, in particular (in relation to a German
Obligor or a Material Group Member incorporated in
Germany and in relation to Flexsys SARL):
(A) 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;
(B) actions are taken pursuant to section 21 of
the German Insolvency Code by the competent
court.
(C) any member of the Group commences proceedings
for conciliation in accordance with article
L.611-4 to L.611-15 of the French Code de
commerce.
(D) a judgment for sauvegarde, redressement
judiciare, cession totale de l'entreprise or
liquidiation judiciaire is entered in relation
to any member of the Group under articles
L.620-1 to L.670-8 of the French Code de
commerce.
(b) Paragraph (a) above shall not apply to any winding-up petition
which is frivolous or vexatious and which is discharged,
stayed or dismissed within 21 days of commencement or, if
earlier, the date on which it is advertised.
(c) In respect of any Obligor, a proceeding or case shall be
commenced, without the application or consent of such Obligor,
in any US court of competent jurisdiction, seeking:
(i) its reorganisation, liquidation, dissolution,
arrangement or winding-up or the composition or
readjustment of its debts;
(ii) the appointment of a receiver, custodian, trustee,
examiner, liquidator or the like of the Obligor or of
all or any substantial part of its property; or
(iii) similar relief in respect of any Obligor under any law
relating to the bankruptcy insolvency, reorganisation,
winding-up or composition or adjustment of debts,
and any such proceeding or case referred to in paragraphs (i)
to (iii) above shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing
shall be entered and continue unstayed and in effect, for a
period of 21 or more days, or an order for relief against such
Obligor shall be
101
CONFORMED COPY
entered in an involuntary case under Title 11 of the United
States of America Code entitled Bankruptcy (or any successor
thereto) as amended.
25.9 CREDITORS' PROCESS
Any expropriation, attachment, sequestration, distress or execution
affects any asset or assets of a member of the Group and is not
discharged within 21 days.
25.10 UNLAWFULNESS
It is or becomes unlawful for an Obligor or any other member of the
Group that is a party to the Intercreditor Agreement to perform any of
its obligations under the Finance Documents or any Transaction
Security created or expressed to be created or evidenced by the
Security Documents ceases to be effective or any subordination created
under the Intercreditor Agreement ceases to be effective.
25.11 REPUDIATION
An Obligor repudiates a Finance Document or any of the Transaction
Security or evidences an intention to repudiate a Finance Document or
any of the Transaction Security.
25.12 GOVERNMENTAL INTERVENTION
By or under the authority of any government:
(a) the management of any member of the Group is wholly or
partially displaced or the authority of any member of the
Group in the conduct of its business is wholly or partially
curtailed; or
(b) all or a majority of the issued shares of any member of the
Group or the whole or any part (the book value of which is 20
per cent. or more of the book value of the whole) of its
revenues or assets is seized, nationalised, expropriated or
compulsorily acquired.
25.13 TRANSACTION SECURITY
(a) Any Obligor fails to perform or comply with any of the
obligations assumed by it in the Security Documents.
(b) At any time any of the Transaction Security is or becomes
unlawful or is not, or ceases to be legal, valid, binding or
enforceable or otherwise ceases to be effective, unless
otherwise permitted by the Finance Documents.
25.14 CHANGE OF OWNERSHIP
The Company ceases to own, directly or indirectly, the entire issued
share capital of its Subsidiaries as at the date hereof, other than
Flexsys America Co..
25.15 MATERIAL ADVERSE CHANGE
Any event or circumstance occurs which the Majority Lenders believe is
reasonably likely to have a Material Adverse Effect.
25.16 CESSATION OF BUSINESS
An Obligor ceases, or threatens to cease, to carry on all or a
substantial part of its business.
102
CONFORMED COPY
25.17 INTERCREDITOR AGREEMENT
(a) Any party to the Intercreditor Agreement (other than a Finance
Party or an Obligor) fails to comply with the provisions of,
or does not perform its obligations under, the Intercreditor
Agreement; or
(b) a representation or warranty given by that party in the
Intercreditor Agreement is incorrect in any material respect,
and, if the non-compliance or circumstances giving rise to the
misrepresentation are capable of remedy, it is not remedied within 15
days of the earlier of the Agent giving notice to that party or that
party becoming aware of the non-compliance or misrepresentation.
25.18 EMPLOYEE PLANS
Any ERISA Event shall have occurred, or Clause 24.21 (Compliance with
ERISA) shall be breached, and the liability of a U.S. Obligor or its
ERISA Affiliates, either individually or in the aggregate, related to
such ERISA Event or breaches, individually or when aggregated with all
other ERISA Events, and all such breaches would have or would be
reasonably expected to have a Material Adverse Effect.
25.19 ACCELERATION
(a) On and at any time after the occurrence of an Event of Default
which is continuing the Agent may, and shall if so directed by
the Majority Lenders, by notice in writing to the Company:
(i) cancel the Total Commitments whereupon they shall
immediately be cancelled; and
(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
(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; and
(iv) exercise, or direct the Security Trustee to exercise,
any or all of its rights, remedies and powers under
any of the Finance Documents; and/or
(v) declare that full cash cover in respect of each Letter
of Credit is immediately due and payable whereupon it
shall become immediately due and payable,
but, notwithstanding the foregoing, upon the occurrence of an
Event of Default specified in Clause 25.8 (Insolvency
proceedings), the Facility shall be cancelled and all
Utilisations, together with accrued interest, and all other
amounts accrued or outstanding under the Finance Documents and
full cash cover in respect of each Letter of Credit shall
become immediately due and
103
CONFORMED COPY
payable, in each case without declaration, notice or demand by
or to any persons.
(b) If an Event of Default under paragraph (e) of Clause 25.7
(Insolvency) or paragraph (a)(v)(C) or (a)(v)(D) of Clause
25.8 (Insolvency Proceedings) shall occur in respect of any
Obligor and to the extent of the imposition of any automatic
stay, then without notice to such Obligor or any other act by
the Agent or any other person, the loans to such Obligor,
interest thereon and all other amounts owed by such Obligor
under the Finance Documents shall become immediately due and
payable without presentment, demand, protest or notice of any
kind, all of which are expressly waived.
104
CONFORMED COPY
SECTION 9
CHANGES TO PARTIES
26. CHANGES TO THE LENDERS
26.1 ASSIGNMENTS AND TRANSFERS BY THE LENDERS
Subject to this Clause 26, 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").
26.2 CONDITIONS OF ASSIGNMENT OR TRANSFER
(a) In relation to Facility B only, the consent of the Company and
in respect of a Letter of Credit the consent of the relevant
Issuing Bank is required for an assignment or transfer by an
Existing Lender, unless the assignment or transfer is to
another Lender or an Affiliate of a Lender or an Event of
Default is continuing.
(b) The consent of the Company (and, if relevant, the consent of
the relevant Issuing Bank) to an assignment or transfer
referred to in paragraph (a) above must not be unreasonably
withheld or delayed. The Company will be deemed to have given
its consent five Business Days after the Existing Lender has
requested it unless consent is expressly refused by the
Company within that time.
(c) The consent of the Company (and, if relevant, the consent of
the relevant Issuing Bank) to an assignment or transfer
referred to in paragraph (a) above must not be withheld solely
because the assignment or transfer may result in an increase
to the Mandatory Cost.
(d) The minimum amount transferred to a New Lender in relation to
a Loan/Commitment made to any Borrower shall be at least the
equivalent of EUR 50,000 or if it is less, the New Lender
shall confirm in writing to the relevant Borrower that it, the
New Lender, is a professional market party within the meaning
of the Dutch FSA.
(e) 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 and the other
Secured Parties as it would have been under if it was
an Original Lender;
(ii) performance by the Agent of all necessary "know your
customer" or other similar checks under all applicable
laws and regulations relation to such
105
CONFORMED COPY
assignment to a New Lender, the completion of which
the Agent shall promptly notify to the Existing Lender
and the New Lender;
(iii) the New Lender entering into the documentation
required for it to accede as a party to the
Intercreditor Agreement; and
(iv) the New Lender entering into the documentation
required for it to accede as a party to the Security
Documents if required under the laws of the Relevant
Jurisdiction.
(f) A transfer will only be effective if the New Lender enters
into the documentation required for it to accede as a party to
the Intercreditor Agreement and the procedure set out in
Clause 26.5 (Procedure for transfer) is complied with.
(g) 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 15 (Tax gross-up and indemnities) or Clause 16
(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.
(h) Subject to the terms of this Agreement, the obligations of
each Guarantor under this Agreement will continue in full
force and effect following any novation (novation) within the
meaning of article 1271 et seq. of the French and Belgian Code
civil. In the event of an assignment, a transfer, a novation
or disposal of all part of the rights and obligations by any
Lender, each Lender expressly reserves the rights, powers,
privileges and actions that it enjoys under any Security
Documents governed by French and Belgian law in favour of its
assignees, or, as the case may be, its successors, in
accordance with the provisions of article 1278 et seq. of the
French and Belgian Code civil.
26.3 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
US$2,500.
26.4 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, the
Transaction Security or any other documents;
106
CONFORMED COPY
(ii) the financial condition of any Obligor;
(iii) the performance and observance by any Obligor 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 in connection with any Finance
Document; and
(ii) will continue to make its own independent appraisal of
the creditworthiness of each Obligor and its related
entities 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:
(i) accept a re-transfer from a New Lender of any of the
rights and obligations assigned or transferred under
this Clause 26; or
(ii) support any losses directly or indirectly incurred by
the New Lender by reason of the non-performance by any
Obligor of its obligations under the Finance Documents
or otherwise.
26.5 PROCEDURE FOR TRANSFER
(a) Subject to the conditions set out in Clause 26.2 (Conditions
of assignment or transfer) 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 the Agent makes
a corresponding entry in the Register pursuant to Clause 26.9
(The Register). 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 and make such corresponding entry in the
Register.
(b) The Agent shall only be obliged to execute a Transfer
Certificate delivered to it by the Existing Lender and the New
Lender and make a corresponding entry in the Register 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.
107
CONFORMED COPY
(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 and
in respect of the Transaction Security each of the
Obligors and the Existing Lender shall be released
from further obligations towards one another under the
Finance Documents and in respect of the Transaction
Security and their respective rights against one
another 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 Trustee, the New
Lender and other Lenders shall acquire the same rights
and assume the same obligations between themselves and
in respect of the Transaction Security 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 Trustee and the Existing Lender shall each be
released from further obligations to each other under
the Finance Documents;
(iv) the benefit of each Security Document shall be
maintained in favour of the New Lender; and
(v) the New Lender shall become a Party as a "Lender".
26.6 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.
26.7 DISCLOSURE OF INFORMATION
(a) Any Lender may disclose to any of its Affiliates and any other
person:
(i) 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;
(ii) 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; or
(iii) to whom, and to the extent that, information is
required to be disclosed by any applicable law or
regulation,
108
CONFORMED COPY
any information about any Obligor, the Group and the
Finance Documents as that Lender shall consider
appropriate if the recipient has agreed with the
relevant Lender to keep the document or information
confidential on the same terms (with consequential
changes) as are set out in paragraph (b) below.
(b) Subject to paragraph (a) above, each Finance Party shall keep
confidential and shall not, without the prior consent of the
Company, use any information (other than information which is
publicly available other than as a result of a breach by that
Finance Party of this paragraph (b)) supplied by or on behalf
of any Obligor under the Finance Documents otherwise than in
connection with the Finance Documents. However, the
restriction set out in this paragraph (b) shall not apply to,
and each Finance Party shall be entitled to disclose,
information:
(i) in connection with any legal proceedings arising out
of or in connection with a Finance Document; or
(ii) if required to do so by an order of a court of
competent jurisdiction whether under any procedure for
discovering documents or otherwise; or
(iii) pursuant to any law or regulation in accordance with
which that Lender is required or accustomed to act; or
(iv) to a governmental, banking, taxation or other
regulatory authority of any competent jurisdiction; or
(v) to its accountants or legal advisers.
Notwithstanding any of the provisions of the Finance Documents, the
Obligors and the Finance Parties hereby agree that each Party and each
employee, representative or other agent of each Party may disclose to
any and all persons, without limitation of any kind, the "TAX
STRUCTURE" and "TAX TREATMENT" (in each case within the meaning of the
U.S. Treasury Regulation Section 1.6011-4) of the Facility and any
materials of any kind (including opinions or other tax analyses) that
are provided to any of the foregoing relating to such tax structure
and tax treatment.
26.8 ASSIGNMENT TO FEDERAL RESERVE BANK
Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement, without notice to
or consent of any Party, to any U.S. Federal Reserve Bank PROVIDED
THAT (i) no Lender shall be relieved of any of its obligations under
this Agreement as a result of any such assignment and pledge and (ii)
in no event shall such U.S. Federal Reserve Bank be considered to be a
"Lender" or be entitled to require the assigning Lender to take or
omit to take any action under this Agreement.
26.9 THE REGISTER
For U.S. federal income tax purposes only, the Agent, acting solely
for this purpose as an agent of the Obligors, shall maintain at one of
its offices a copy of each Transfer Certificate delivered to it and a
register (the "REGISTER") for the recordation of the names and
addresses of each Lender and the Commitments of and obligations owing
to each Lender. Without limitation of any other provision of this
Clause 26 (Changes to the
109
CONFORMED COPY
Lenders), no transfer shall be effective until recorded in the
Register. The entries in the Register shall be conclusive absent
manifest error and each Obligor, the Agent and each Lender may treat
each person whose name is recorded in the Register as a Lender
notwithstanding any notice to the contrary. The Register shall be
available for inspection by each Obligor at any reasonable time and
from time to time upon reasonable prior notice.
27. CHANGES TO THE OBLIGORS
27.1 ASSIGNMENT AND TRANSFERS BY OBLIGORS
No Obligor may assign any of its rights or transfer any of its rights
or obligations under the Finance Documents.
27.2 ADDITIONAL BORROWERS
(a) Subject to compliance with the provisions of paragraphs (c)
and (d) of Clause 22.8 ("Know your customer" checks), the
Company may request that any of its Subsidiaries becomes an
Additional Borrower. That Subsidiary shall become an
Additional Borrower if:
(i) all the Lenders approve the addition of that
Subsidiary (such approval not to be unreasonably
withheld or delayed);
(ii) the Company delivers to the Agent a duly completed and
executed Accession Letter and duly completed and
executed documentation required for it to accede as a
party to the Intercreditor Agreement;
(iii) the Subsidiary is (or becomes) a Guarantor prior to
becoming a Borrower;
(iv) the Company confirms that no Default is continuing or
would occur as a result of that Subsidiary becoming an
Additional Borrower; and
(v) the Agent has received all of the documents and other
evidence listed in Part I of Schedule 2 (Conditions
Precedent) in relation to that Additional Borrower,
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 I of Schedule 2 (Conditions
Precedent).
27.3 RESIGNATION OF A BORROWER
(a) The Company may request that a Borrower (other than the
Company) ceases to be a Borrower by delivering to the Agent a
Resignation Letter.
(b) The Agent shall accept a Resignation Letter and notify the
Company and the Lenders of its acceptance if:
(i) no Default is continuing or would result from the
acceptance of the Resignation Letter (and the Company
has confirmed this is the case); and
110
CONFORMED COPY
(ii) the Borrower is under no actual or contingent
obligations as a Borrower under any Finance Documents,
whereupon that company shall cease to be a Borrower and shall
have no further rights or obligations under the Finance
Documents and the Security Trustee shall be instructed by the
Agent to release any Transaction Security granted by the
Borrower, in accordance with Clause 29.22 (Releases).
27.4 ADDITIONAL GUARANTORS
(a) Subject to compliance with the provisions of Clause 22.8
("Know your customer" checks), the Company may request that
any of its Subsidiaries become an Additional Guarantor.
(b) The Company shall procure that any other member of the Group
which is a Material Group Member shall as soon as possible
after becoming a Material Group Member become an Additional
Guarantor and, subject to the Agreed Security Principles,
grant Security as the Agent may require and shall accede to
the Intercreditor Agreement.
(c) A member of the Group 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 I of Schedule 2 (Conditions
Precedent) in relation to that Additional Guarantor,
each in form and substance satisfactory to the Agent.
(d) 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).
27.5 REPETITION OF REPRESENTATIONS
Delivery of an Accession Letter constitutes confirmation by the
relevant Subsidiary that the Repeating Representations 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.
27.6 RESIGNATION OF A GUARANTOR
(a) The Company may request that a Guarantor (other than the
Company) ceases to be a Guarantor by delivering to the Agent a
Resignation Letter.
(b) The Agent shall accept a Resignation Letter and notify the
Company and the Lenders of its acceptance if:
(i) no Default is continuing or would result from the
acceptance of the Resignation Letter (and the Company
has confirmed this is the case); and
(ii) all the Lenders have consented to the Company's
request.
111
CONFORMED COPY
(c) If the resignation of a Guarantor is accepted in accordance
with paragraph (b) above the Agent shall instruct the Security
Trustee to release any Transaction Security granted by that
Guarantor, in accordance with Clause 29.22 (Releases).
112
CONFORMED COPY
SECTION 10
THE FINANCE PARTIES
28. ROLE OF THE AGENT AND THE ARRANGER
28.1 APPOINTMENT OF THE AGENT
(a) Each other Finance Party (other than the Security Trustee)
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 hereby releases the Agent to the
extent permissible under each Finance Party's respective
constitutional documentation from any restrictions on
representing several persons and self-dealing under any
applicable law, and in particular from the restrictions of
Section 181 of the German Civil Code (Burgerliches
Gesetzbuch), to make use of any authorisation granted under
this Agreement and to perform its duties and obligations as
Agent hereunder.
28.2 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 other 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, the Arranger or the Security
Trustee) 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.
(f) The Agent shall promptly forward to the Security Trustee a
copy of all notices issued pursuant to Clause 25.19
(Acceleration).
28.3 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.
113
CONFORMED COPY
28.4 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.
28.5 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.
28.6 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 25.1
(Non-payment));
(ii) any right, power, authority or discretion vested in
any Party or the Majority 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.
28.7 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
114
CONFORMED COPY
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 other than the Security Trustee.
(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.
(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.
28.8 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 in or in
connection with any Finance Document or the Information
Memorandum or the transactions contemplated in the Finance
Documents; or
(b) is responsible for the legality, validity, effectiveness,
adequacy or enforceability of any Finance Document or the
Transaction Security or any other agreement, arrangement or
document entered into, made or executed in anticipation of or
in connection with any Finance Document or the Transaction
Security.
28.9 EXCLUSION OF LIABILITY
(a) Without limiting paragraph (b) below (and without prejudice to
the provisions of paragraph (e) of Clause 32.10 (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 or the
Transaction Security, 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.
115
CONFORMED COPY
(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.
28.10 LENDERS' INDEMNITY TO THE AGENT
Each Lender shall (in proportion to its share of the Total Commitments
or, if the Total Commitments are then zero, to its share of the Total
Commitments immediately prior to their reduction to zero) 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 the Agent's gross negligence or wilful
misconduct) (or, in the case of any cost, loss or liability pursuant
to Clause 32.10 (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 the
Agent has been reimbursed by an Obligor pursuant to a Finance
Document).
28.11 RESIGNATION OF THE AGENT
(a) The Agent may resign and appoint one of its Affiliates 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.
(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.
116
CONFORMED COPY
(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 28. 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.
28.12 CONFIDENTIALITY
(a) In acting as agent for the Finance Parties, the Agent shall be
regarded as acting through its agency division, or as
appropriate, trustee 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.
28.13 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).
(c) Each Secured Party shall supply the Agent with any information
that the Trustee may reasonably specify (through the Agent) as
being necessary or desirable to enable the Security Trustee to
perform its functions as security trustee. Each Lender shall
deal with the Security Trustee exclusively through the Agent
and shall not deal directly with the Security Trustee.
28.14 CREDIT APPRAISAL BY THE SECURED PARTIES
Without affecting the responsibility of any Obligor for information
supplied by it or on its behalf in connection with any Finance
Document, each Secured Party 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 the Transaction
Security and any other agreement, arrangement or document
entered into, made or executed in anticipation of, under or in
connection with any Finance Document or the Transaction
Security;
117
CONFORMED COPY
(c) whether that Secured Party 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 Transaction Security, the transactions
contemplated by the Finance Documents or any other agreement,
arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance
Document;
(d) the adequacy, accuracy and/or completeness of the Information
Memorandum and any other information provided by the Agent,
the Security Trustee, 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,
arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance
Document; and
(e) the right or title of any person in or to, or the value or
sufficiency of any part of the Charged Property, the priority
of any of the Transaction Security or the existence of any
Security affecting the Charged Property.
28.15 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.
28.16 AGENT'S MANAGEMENT TIME
Any amount payable to the Agent under Clause 17.3 (Indemnity to the
Agent), Clause 19 (Costs and expenses) and Clause 28.10 (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 the Agent may
notify to the Company and the Lenders, and is in addition to any fee
paid or payable to the Agent under Clause 14 (Fees).
28.17 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.
29. ROLE OF SECURITY TRUSTEE
29.1 TRUST
(a) The Security Trustee declares that it shall hold the
Transaction Security on trust for the Secured Parties (and
both on trust for the Secured Parties and as agent on behalf
of the other Secured Parties in respect of any Transaction
Security governed by French Law) on the terms contained in
this Agreement. Each of the parties to this Agreement agrees
that the Security Trustee shall have only those duties,
obligations and responsibilities expressly specified in this
118
CONFORMED COPY
Agreement, the Intercreditor Agreement or in the Security
Documents (and no others shall be implied).
29.2 APPOINTMENT OF THE SECURITY TRUSTEE
(a) The Security Trustee shall:
(i) hold and administer any Transaction Security governed
by German law which is security assigned
(Sicherungseigentum/Sicherungsabtretung) or otherwise
transferred under a non-accessory security right
(nicht-akzessorische Sicherheit) to it as trustee
(treuhanderisch) for the benefit of the Secured
Parties; and
(ii) administer any Transaction Security governed by German
law which is pledged (Verpfandung) or otherwise
transferred to any Secured Party under an accessory
security right (akzessorische Sicherheit) as agent.
(b) Each Secured Party hereby appoints the Security Trustee to act
as its trustee and its agent in connection herewith (with
power to sub-delegate and under exemption from any
restrictions regarding acting on behalf of several parties and
acting both on its own behalf as well as on behalf of other
parties, as may be contained in applicable local law).
(c) Each Secured Party hereby authorises the Security Trustee
(whether or not by or through employees or agents):
(i) to exercise such rights, remedies, powers and
discretions as are specifically delegated to or
conferred upon the Security Trustee by the terms
hereof and/or under the Security Documents together
with such rights, remedies, powers and discretions as
are reasonably incidental thereto or necessary to give
effect to the rights, remedies, powers and discretions
of the Security Trustee hereby created;
(ii) to enter into each Security Document for and on their
behalf as trustee and as agent;
(iii) to hold the Transaction Security on trust and as
security agent for and on their behalf in connection
herewith unless otherwise provided under any
Transaction Security;
(iv) to acknowledge the provisions of each Security
Document, including without limitation any "parallel
debt" provision contained therein;
(v) to take such action on its behalf as may from time to
time be authorised under or in accordance with the
Security Documents and this Agreement; and
(vi) to accept as its representative (Stellvertreter) any
pledge or other creation of any accessory security
right granted in favour of such Secured Party in
connection with the Finance Documents under German law
and to agree to and execute on its behalf as its
representative (Stellvertreter) any
119
CONFORMED COPY
amendments and/or alterations to any Security Document
governed by German law which creates a pledge or any
other accessory security right (akzessorische
Sicherheit) including the release or confirmation of
re-lease of such Security.
(d) Each of the Secured Parties hereby releases the Security
Trustee to the extent permissible under each Secured Party's
respective constitutional documentations from any restrictions
on representing several persons and self-dealing under any
applicable law, and in particular from the restrictions of
Section 181 of the German Civil Code (Burgerliches
Gesetzbuch), to make use of any authorisation granted under
this Agreement and to perform its duties and obligations as
Security Trustee hereunder and under the Security Documents.
(e) Each Secured Party hereby ratifies and approves all acts and
declarations previously done by the Security Trustee on such
Secured Party's behalf (including for the avoidance of doubt
the declarations made by the Security Trustee as
representative without power of attorney (Vertreter ohne
Vertretungsmacht) in relation to the creation of any pledge
(Pfandrecht) on behalf and for the benefit of any Secured
Party as future pledgee or otherwise).
29.3 ITALIAN SECURITY DOCUMENTS
Each of the Secured Parties hereby:
(a) appoints, with the express consent pursuant to article 1395 of
the Italian Civil Code, the Security Trustee to be its
mandatario con rappresentanza and common representative for
the purpose of executing in the name and on behalf of the
Secured Parties any Security Document which is expressed to be
governed by Italian law;
(b) grants the Security Trustee the power to negotiate and approve
the terms and conditions of such Security Document, execute
any other agreement or instrument, give or receive any notice
and take any other action in relation to the creation,
perfection, maintenance, enforcement and release of the
security created thereunder in the name and on behalf of the
Secured Parties; and
(c) undertakes to ratify and approve any such action taken in the
name and on behalf of the Secured Parties by the Security
Trustee acting in its appointed capacity.
29.4 JAPANESE SECURITY DOCUMENTS
(a) Each of the Secured Parties irrevocably appoints the Security
Trustee to be its attorney and in its name and on its behalf
to execute, deliver and perfect all documents and do all
things which the attorney may in its absolute discretion
consider necessary or desirable in connection with any
Japanese Security Documents.
(b) Each of the Secured Parties shall ratify and confirm all
things done and all Japanese Security Documents executed by
any attorney and further confirm that it accepts the terms of
such Japanese Security Document.
120
CONFORMED COPY
(c) The Secured Parties will procure the enforcement of the
Japanese Security Documents pursuant to clause 11 (Enforcement
of Security) of the Intercreditor Agreement only at the
request of the Agent. In relation to the manner of enforcement
(apart from the decision or right to commence an enforcement,
which shall be in accordance with the other provisions of this
Agreement) of the Japanese Security Documents, the Secured
Parties and Security Trustee will always act on the directions
of the Agent.
(d) All amounts received by a Secured Party pursuant to any
enforcement of the Japanese Security Documents shall be
immediately paid to the Security Trustee for application in
accordance with Clause 34 (Application of Proceeds) save that
any Secured Party instructed by the Security Trustee to
enforce any Japanese Security Document in accordance with this
Clause shall be entitled to deduct from the proceeds of each
enforcement its costs, charges and expenses incurred in
connection with such enforcement prior to paying the proceeds
of such enforcement to the Security Trustee in accordance with
Clause 34 (Application of Proceeds).
29.5 BRAZILIAN SECURITY DOCUMENTS
Each of the Secured Parties hereby expressly appoints the Security
Trustee to act in the name and on behalf of the Secured Parties in any
Security Document which is governed by Brazilian law, with powers to
execute, deliver and perfect all documents and enforce, collect and/or
take any and all measures as deemed necessary to create, perfect and
enforce the securities under such Security Documents (including, but
not limited to, the pledge and usufruct over the quotas issued by
Flexsys Industria e Comercio Ltda and the Brazilian Guarantee
Agreement.
29.6 PARALLEL DEBT (COVENANT TO PAY THE SECURITY TRUSTEE)
(a) Notwithstanding any other provision of this Agreement, each
Obligor hereby irrevocably and unconditionally undertakes to
pay to the Security Trustee, as creditor in its own right and
not as representative of the other Finance Parties, sums equal
to and in the currency of each amount payable by such Obligor
to each of the Finance Parties under each of the Finance
Documents as and when that amount falls due for payment under
the relevant Finance Document or would have fallen due but for
any discharge resulting from failure of another Finance Party
to take appropriate steps, in insolvency proceedings affecting
that Obligor, to preserve its entitlement to be paid that
amount.
(b) The Security Trustee shall have its own independent right to
demand payment of the amounts payable by each Obligor under
this Clause 29.6, irrespective of any discharge of such
Obligor's obligation to pay those amounts to the other Finance
Parties resulting from failure by them to take appropriate
steps, in insolvency proceedings affecting that Obligor, to
preserve their entitlement to be paid those amounts.
(c) Any amount due and payable by an Obligor to the Security
Trustee under this Clause 29.6 shall be decreased to the
extent that the other Finance Parties have received (and are
able to retain) payment in full of the corresponding amount
121
CONFORMED COPY
under the other provisions of the Finance Documents and any
amount due and payable by an Obligor to the other Finance
Parties under those provisions shall be decreased to the
extent that the Security Trustee has received (and is able to
retain) payment in full of the corresponding amount under this
Clause 29.6.
(d) The rights of the Finance Parties (other than the Security
Trustee) to receive payment of amounts payable by each Obligor
under the Finance Documents are several and are separate and
independent from, and without prejudice to, the rights of the
Security Trustee to receive payment under this Clause 29.6.
29.7 NO INDEPENDENT POWER
The Secured Parties shall not have any independent power to enforce,
or have recourse to, any of the Transaction Security or to exercise
any rights or powers arising under the Security Documents except
through the Security Trustee.
29.8 SECURITY TRUSTEE'S INSTRUCTIONS
The Security Trustee shall:
(a) unless a contrary indication appears in a Finance Document,
act in accordance with any instructions given to it by the
Agent and shall be entitled to assume that (i) any
instructions received by it from the Agent are duly given by
or on behalf of the Majority Lenders or, as the case may be,
the Lenders in accordance with the terms of the Finance
Documents and (ii) unless it has received actual notice of
revocation that any instructions or directions given by the
Agent have not been revoked;
(b) be entitled to request instructions, or clarification of any
direction, from the Agent as to whether, and in what manner,
it should exercise or refrain from exercising any rights,
powers and discretions and the Security Trustee may refrain
from acting unless and until those instructions or
clarification are received by it; and
(c) be entitled to, carry out all dealings with the Lenders
through the Agent and may give to the Agent any notice or
other communication required to be given by the Security
Trustee to the Lenders.
29.9 SECURITY TRUSTEE'S ACTIONS
Subject to the provisions of this Clause 29:
(a) the Security Trustee may, in the absence of any instructions
to the contrary, take such action in the exercise of any of
its powers and duties under the Finance Documents which in its
absolute discretion it considers to be for the protection and
benefit of all the Secured Parties; and
(b) at any time after receipt by the Security Trustee of notice
from the Agent directing the Security Trustee to exercise all
or any of its rights, remedies, powers or discretions under
any of the Finance Documents, the Security Trustee may, and
shall if so directed by the Agent, take any action as in its
sole discretion it thinks fit to enforce the Transaction
Security.
122
CONFORMED COPY
29.10 SECURITY TRUSTEE'S DISCRETIONS
The Security Trustee may:
(a) assume (unless it has received actual notice to the contrary
in its capacity as trustee for the Secured Parties) that (i)
no Default has occurred and no Obligor is in breach of or
default under its obligations under any of the Finance
Documents and (ii) any right, power, authority or discretion
vested in any person has not been exercised;
(b) if it receives any instructions or directions from the Agent
to take any action in relation to the Transaction Security,
assume that all applicable conditions under the Finance
Documents for taking that action have been satisfied;
(c) engage, pay for and rely on the advice or services of any
lawyers, accountants, surveyors or other experts (whether
obtained by the Security Trustee or by any other Secured
Party) whose advice or services may at any time seem
necessary, expedient or desirable;
(d) rely upon any communication or document believed by it to be
genuine and, as to any matters of fact which might reasonably
be expected to be within the knowledge of a Secured Party or
an Obligor, upon a certificate signed by or on behalf of that
person; and
(e) refrain from acting in accordance with the instructions of the
Agent or Lenders (including bringing any legal action or
proceeding arising out of or in connection with the Finance
Documents) until it has received any indemnification and/or
security that it may in its absolute discretion require
(whether by way of payment in advance or otherwise) for all
costs, losses and liabilities which it may incur in bringing
such action or proceedings.
29.11 SECURITY TRUSTEE'S OBLIGATIONS
The Security Trustee shall promptly inform the Agent of:
(a) the contents of any notice or document received by it in its
capacity as Security Trustee from any Obligor under any
Finance Document; and
(b) the occurrence of any Default or any default by an Obligor in
the due performance of or compliance with its obligations
under any Finance Document of which the Security Trustee has
received notice from any other party to this Agreement.
29.12 EXCLUDED OBLIGATIONS
Notwithstanding anything to the contrary expressed or implied in the
Finance Documents, the Security Trustee shall not:
(a) be bound to enquire as to (i) whether or not any Default has
occurred or (ii) the performance, default or any breach by an
Obligor of its obligations under any of the Finance Documents;
(b) be bound to account to any other Party for any sum or the
profit element of any sum received by it for its own account;
123
CONFORMED COPY
(c) be bound to disclose to any other person (including but not
limited to any Secured Party) (i) any confidential information
or (ii) any other information if disclosure would, or might in
its reasonable opinion, constitute a breach of any law or be a
breach of fiduciary duty;
(d) be under any obligations other than those which are
specifically provided for in the Finance Documents; or
(e) have or be deemed to have any duty, obligation or
responsibility to, or relationship of trust or agency with,
any Obligor.
29.13 EXCLUSION OF SECURITY TRUSTEE'S LIABILITY
The Security Trustee shall not accept responsibility or be liable for:
(a) the adequacy, accuracy and/or completeness of any information
(whether oral or written) supplied by the Security Trustee or
any other person in or in connection with any Finance Document
or the Information Memorandum or the transactions contemplated
in the Finance Documents.
(b) the legality, validity, effectiveness, adequacy or
enforceability of any Finance Document or the Transaction
Security or any other agreement, arrangement or document
entered into, made or executed in anticipation of or in
connection with any Finance Document or the Transaction
Security;
(c) any losses to any person or any liability arising as a result
of taking or refraining from taking any action in relation to
any of the Finance Documents or the Transaction Security or
otherwise, whether in accordance with an instruction from the
Agent or otherwise, unless directly caused by its gross
negligence or wilful misconduct;
(d) the exercise of, or the failure to exercise, any judgement,
discretion or power given to it by or in connection with any
of the Finance Documents, the Transaction Security or any
other agreement, arrangement or document entered into, made or
executed in anticipation of or in connection with the Finance
Documents or the Transaction Security; or
(e) any shortfall which arises on the enforcement of the
Transaction Security.
29.14 NO PROCEEDINGS
No Party (other than the Security Trustee) may take any proceedings
against any officer, employee or agent of the Security Trustee in
respect of any claim it might have against the Security Trustee or in
respect of any act or omission of any kind by that officer, employee
or agent in relation to any Finance Document or any Transaction
Security and any officer, employee or agent of the Security Trustee
may rely on this Clause.
29.15 OWN RESPONSIBILITY
Without affecting the responsibility of any Obligor for information
supplied by it or on its behalf in connection with any Finance
Document, each Secured Party confirms to the Security Trustee that it
has been, and will continue to be, solely responsible for making
124
CONFORMED COPY
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 and
enforceability of any Finance Document and the Transaction
Security and any other agreement, arrangement or document
entered into, made or executed in anticipation of, under or in
connection with any Finance Document or the Transaction
Security;
(c) whether that Secured Party 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 Transaction Security, the transactions
contemplated by the Finance Documents or any other agreement,
arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance
Document or the Transaction Security;
(d) the adequacy, accuracy and/or completeness of the Information
Memorandum and any information provided by the Security
Trustee or by any other person under or in connection with any
Finance Document, the transactions contemplated by the Finance
Documents or any other agreement, arrangement or document
entered into, made or executed in anticipation of, under or in
connection with any Finance Document; and
(e) the right or title of any person in or to, or the value or
sufficiency of any part of the Charged Property, the priority
of any of the Transaction Security or the existence of any
Security affecting the Charged Property.
29.16 NO RESPONSIBILITY TO PERFECT TRANSACTION SECURITY
The Security Trustee shall not be liable for any failure to:
(a) require the deposit with it of any deed or document
certifying, representing or constituting the title of any
Obligor to any of the Charged Property;
(b) obtain any licence, consent or other authority for the
execution, delivery, legality, validity, enforceability or
admissibility in evidence of any of the Finance Documents or
the Transaction Security;
(c) register, file or record or otherwise protect any of the
Transaction Security (or the priority of any of the
Transaction Security) under any applicable laws in any
jurisdiction or to give notice to any person of the execution
of any of the Finance Documents or of the Transaction
Security;
(d) take, or to require any of the Obligors to take, any steps to
perfect its title to any of the Charged Property or to render
the Transaction Security effective or to secure the creation
of any ancillary Security under the laws of any jurisdiction;
or
(e) require any further assurances in relation to any of the
Security Documents.
125
CONFORMED COPY
29.17 INSURANCE BY SECURITY TRUSTEE
(a) The Security Trustee shall not be under any obligation to
insure any of the Charged Property, to require any other
person to maintain any insurance or to verify any obligation
to arrange or maintain insurance contained in the Finance
Documents. The Security Trustee shall not be responsible for
any loss which may be suffered by any person as a result of
the lack of or inadequacy of any such insurance.
(b) Where the Security Trustee is named on any insurance policy as
an insured party, it shall not be responsible for any loss
which may be suffered by reason of, directly or indirectly,
its failure to notify the insurers of any material fact
relating to the risk assumed by the insurers or any other
information of any kind, unless any Secured Party has
requested it to do so in writing and the Security Trustee has
failed to do so within fourteen days after receipt of that
request.
29.18 CUSTODIANS AND NOMINEES
The Security Trustee may appoint and pay any person to act as a
custodian or nominee on any terms in relation to any assets of the
trust as the Security Trustee may determine, including for the purpose
of depositing with a custodian this Agreement or any document relating
to the trust created under this Agreement and the Security Trustee
shall not be responsible for any loss, liability, expense, demand,
cost, claim or proceedings incurred by reason of the misconduct,
omission or default on the part of any person appointed by it under
this Agreement or be bound to supervise the proceedings or acts of any
person.
29.19 ACCEPTANCE OF TITLE
The Security Trustee shall be entitled to accept without enquiry, and
shall not be obliged to investigate, any right and title that any of
the Obligors may have to any of the Charged Property and shall not be
liable for or bound to require any Obligor to remedy any defect in its
right or title.
29.20 REFRAIN FROM ILLEGALITY
The Security Trustee may refrain from doing anything which in its
opinion will or may be contrary to any relevant law, directive or
regulation of any jurisdiction which would or might otherwise render
it liable to any person, and the Security Trustee may do anything
which is, in its opinion, necessary to comply with any law, directive
or regulation.
29.21 BUSINESS WITH THE OBLIGORS
The Security Trustee may accept deposits from, lend money to, and
generally engage in any kind of banking or other business with any of
the Obligors.
29.22 RELEASES
Upon a disposal of any of the Charged Property or the resignation of
an Obligor in accordance with Clause 27 (Changes to the Obligors):
(a) pursuant to the enforcement of the Transaction Security by a
Receiver or the Security Trustee; or
(b) if that disposal is permitted under the Finance Documents; or
126
CONFORMED COPY
(c) if the Security Trustee is instructed to release the
Transaction Security granted by the resigning Obligor under
the terms of Clause 27 (Changes to the Obligors),
the Security Trustee shall (at the cost of the Obligors) release that
property from the Transaction Security or the Transaction Security
given by that Obligor and is authorised to execute, without the need
for any further authority from the Secured Parties, any release of the
Transaction Security or other claim over that asset or Obligor and to
issue any certificates of non-crystallisation of floating charges that
may be required or desirable.
29.23 WINDING UP OF TRUST
If the Security Trustee, with the approval of the Majority Lenders,
determines that (a) all of the Secured Obligations and all other
obligations secured by any of the Security Documents have been fully
and finally discharged and (b) none of the Secured Parties is under
any commitment, obligation or liability (actual or contingent) to make
advances or provide other financial accommodation to any Obligor
pursuant to the Finance Documents, the trusts set out in this
Agreement shall be wound up and the Security Trustee shall release,
without recourse or warranty, all of the Transaction Security and the
rights of the Security Trustee under each of the Security Documents.
29.24 PERPETUITY PERIOD
The perpetuity period under the rule against perpetuities, if
applicable to this Agreement, shall be the period of eighty years from
the date of this Agreement.
29.25 POWERS SUPPLEMENTAL
The rights, powers and discretions conferred upon the Security Trustee
by this Agreement shall be supplemental to the Trustee ▇▇▇ ▇▇▇▇ and
the Trustee ▇▇▇ ▇▇▇▇ and in addition to any which may be vested in the
Security Trustee by general law or otherwise.
29.26 TRUSTEE DIVISION SEPARATE
(a) In acting as trustee for the Secured Parties, the Security
Trustee shall be regarded as acting through its agency or
trustee 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 Security Trustee, it may be treated as confidential to
that division or department and the Security Trustee shall not
be deemed to have notice of it.
29.27 LENDER' INDEMNITY TO THE SECURITY TRUSTEE
Each Lender shall (in proportion to its share of the Total Commitments
or, if the Total Commitments are then zero, to its share of the Total
Commitments immediately prior to their reduction to zero) indemnify
the Security Trustee, within three Business Days of demand, against
any cost, loss or liability incurred by the Security Trustee
(otherwise than by reason of the Security Trustee's gross negligence
or wilful misconduct) in acting as Security Trustee under the Finance
Documents (unless the Security Trustee has been reimbursed by an
Obligor pursuant to a Finance Document).
127
CONFORMED COPY
29.28 DISAPPLICATION
Section 1 of the Trustee Act 2000 shall not apply to the duties of the
Security Trustee in relation to the trusts constituted by this
Agreement. Where there are any inconsistencies between the Trustee ▇▇▇
▇▇▇▇ or the Trustee ▇▇▇ ▇▇▇▇ and the provisions of this Agreement, the
provisions of this Agreement shall, to the extent allowed by law,
prevail and, in the case of any inconsistency with the Trustee ▇▇▇
▇▇▇▇, the provisions of this Agreement shall constitute a restriction
or exclusion for the purposes of that Act.
29.29 RESIGNATION OF SECURITY TRUSTEE
(a) The Security Trustee may resign and appoint one of its
Affiliates as successor by giving notice to the Company and to
the Agent on behalf of the Lenders.
(b) Alternatively the Security Trustee may resign by giving notice
to the other Parties (or to the Agent on behalf of the
Lenders) in which case the Majority Lenders may appoint a
successor Security Trustee.
(c) If the Majority Lenders have not appointed a successor
Security Trustee in accordance with paragraph (b) above within
30 days after the notice of resignation was given, the
Security Trustee (after consultation with the Agent) may
appoint a successor Security Trustee.
(d) The retiring Security Trustee shall, at its own cost, make
available to the successor Security Trustee such documents and
records and provide such assistance as the successor Security
Trustee may reasonably request for the purposes of performing
its functions as Security Trustee under the Finance Documents.
(e) The Security Trustee's resignation notice shall only take
effect upon (i) the appointment of a successor and (ii) the
transfer of all of the Transaction Security to that successor.
(f) Upon the appointment of a successor, the retiring Security
Trustee shall be discharged from any further obligation in
respect of the Finance Documents but shall remain entitled to
the benefit of Clauses 28 (Role of the Agent and the Arranger)
and 29 (Role of Security Trustee). 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) The Majority Lenders may, by notice to the Security Trustee,
require it to resign in accordance with paragraph (b) above.
In this event, the Security Trustee shall resign in accordance
with paragraph (b) above.
29.30 DELEGATION
(a) The Security Trustee may, at any time, delegate by power of
attorney or otherwise to any person for any period, all or any
of the rights, powers and discretions vested in it by any of
the Finance Documents.
(b) The delegation may be made upon any terms and conditions
(including the power to sub-delegate) and subject to any
restrictions that the Security Trustee may think fit in the
interests of the Secured Parties and it shall not be bound to
128
CONFORMED COPY
supervise, or be in any way responsible for any loss incurred
by reason of any misconduct or default on the part of any
delegate or sub-delegate.
29.31 ADDITIONAL SECURITY TRUSTEES
(a) The Security Trustee may at any time appoint (and subsequently
remove) any person to act as a separate trustee or as a
co-trustee jointly with it (i) if it considers that
appointment to be in the interests of the Secured Parties or
(ii) for the purposes of conforming to any legal requirements,
restrictions or conditions which the Security Trustee deems to
be relevant or (iii) for obtaining or enforcing any judgment
in any jurisdiction, and the Security Trustee shall give prior
notice to the Company and the Agent of that appointment.
(b) Any person so appointed shall have the rights, powers and
discretions (not exceeding those conferred on the Security
Trustee by this Agreement) and the duties and obligations that
are conferred or imposed by the instrument of appointment.
(c) The remuneration that the Security Trustee may pay to any
person, and any costs and expenses incurred by that person in
performing its functions pursuant to that appointment shall,
for the purposes of this Agreement, be treated as costs and
expenses incurred by the Security Trustee.
29.32 VOTING RIGHTS
(a) Notwithstanding any other provision of this Agreement or any
other Finance Document the Security Trustee may in its
absolute discretion and without any consent or authority from
the Secured Parties by notice in accordance with the notice
provisions of each Security Document that grants Security over
Shares (which notice shall be irrevocable) elect to give up
the right to exercise (or refrain from exercising) voting
rights in respect of those Shares conferred or to be conferred
on the Security Trustee pursuant to the relevant clauses of
that Security Document.
(b) The Secured Parties unconditionally waive any rights they may
otherwise have either to prevent the Security Trustee from
making the election referred to in paragraph (a) above or to
require the Security Trustee to indemnify or otherwise
compensate them for any losses, costs or liabilities incurred
by any of them in relation to or as a consequence of the
Security Trustee making such election.
30. 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.
129
CONFORMED COPY
31. SHARING AMONG THE FINANCE PARTIES
31.1 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 32
(Payment mechanics) or Clause 34 (Application of Proceeds) 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 32
(Payment mechanics), without taking account of any Tax which
would be imposed on the Agent in relation to the receipt,
recovery or distribution; and
(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 32.5 (Partial payments).
31.2 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
32.5 (Partial payments).
31.3 RECOVERING FINANCE PARTY'S RIGHTS
(a) On a distribution by the Agent under Clause 31.2
(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.
31.4 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 31.2 (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
130
CONFORMED COPY
(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.
31.5 EXCEPTIONS
(a) This Clause 31 shall not apply to the extent that the
Recovering Finance Party would not, after making any payment
pursuant to this Clause, 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.
131
CONFORMED COPY
SECTION 11
ADMINISTRATION
32. PAYMENT MECHANICS
32.1 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 a principal financial centre in a
Participating Member State or London) with such bank as the
Agent specifies.
32.2 DISTRIBUTIONS BY THE AGENT
Each payment received by the Agent under the Finance Documents for
another Party shall, subject to Clause 32.3 (Distributions to an
Obligor), Clause 32.4 (Clawback) and Clause 28.17 (Deduction from
amounts payable by the Agent) 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).
32.3 DISTRIBUTIONS TO AN OBLIGOR
The Agent may (with the consent of the Obligor or in accordance with
Clause 33 (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 purchase of any amount of any currency to
be so applied.
32.4 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 the Agent 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 the Agent to reflect its cost of
funds.
132
CONFORMED COPY
32.5 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:
(i) FIRST, in or towards payment pro rata of any unpaid
fees, costs and expenses of the Agent, the Issuing
Bank, the Security Trustee (including of any Receiver
or Delegate) and 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 any
amount due but unpaid under Clauses 7.4 (Claims under
a Letter of Credit) and 7.5 (Indemnities); 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 sub-paragraphs (a)(ii) to (iv) above.
(c) Paragraphs (a) and (b) above will override any appropriation
made by an Obligor.
32.6 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.
32.7 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 Unpaid Sum under this Agreement interest is
payable on the principal or Unpaid Sum at the rate payable on
the original due date.
32.8 CURRENCY OF ACCOUNT
(a) Subject to paragraphs (b) to (e) below, the Base Currency is
the currency of account and payment for any sum due from an
Obligor under any Finance Document.
(b) A repayment of a Utilisation or Unpaid Sum or a part of a
Utilisation or Unpaid Sum shall be made in the currency in
which that Utilisation or Unpaid Sum is denominated on its due
date.
133
CONFORMED COPY
(c) Each payment of interest shall be made in the currency in
which the sum in respect of which the interest is payable was
denominated when that interest accrued.
(d) Each payment in respect of costs, expenses or Taxes shall be
made in the currency in which the costs, expenses or Taxes are
incurred.
(e) Any amount expressed to be payable in a currency other than
the Base Currency shall be paid in that other currency.
32.9 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 amended to comply with any generally accepted
conventions and market practice in the Relevant Interbank
Market and otherwise to reflect the change in currency.
32.10 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) the 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;
134
CONFORMED COPY
(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 39 (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 32.10;
and
(f) the Agent shall notify the Finance Parties of all changes
agreed pursuant to paragraph (d) above.
33. SET-OFF
Following the occurrence of an Event of Default, 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.
34. APPLICATION OF PROCEEDS
34.1 ORDER OF APPLICATION
All moneys from time to time received or recovered by the Security
Trustee under Clause 29.6 (Parallel Debt (Covenant to pay the Security
Trustee)) and/or in connection with the realisation or enforcement of
all or any part of the Transaction Security shall be held by the
Security Trustee on trust to apply them at such times as the Security
Trustee sees fit, to the extent permitted by applicable law, in the
following order of priority:
(a) in discharging any sums owing to the Security Trustee (in its
capacity as trustee), any Receiver or any Delegate;
(b) in payment to the Agent, on behalf of the Secured Parties, for
application towards the discharge of all sums due and payable
by any Obligor under any of the Finance Documents in
accordance with Clause 32.5 (Partial Payments);
(c) if none of the Obligors is under any further actual or
contingent liability under any Finance Document, in payment to
any person to whom the Security Trustee is obliged to pay in
priority to any Obligor; and
(d) the balance, if any, in payment to the relevant Obligor.
34.2 INVESTMENT OF PROCEEDS
Prior to the application of the proceeds of the Transaction Security
in accordance with Clause 34.1 (Order of Application) the Security
Trustee may, at its discretion, hold all or part of those proceeds in
an interest bearing suspense or impersonal account(s) in the
135
CONFORMED COPY
name of the Security Trustee or Agent with any financial institution
(including itself) and for so long as the Security Trustee thinks fit
(the interest being credited to the relevant account) pending the
application from time to time of those monies at the Security
Trustee's discretion in accordance with the provisions of this Clause
34.
34.3 CURRENCY CONVERSION
(a) For the purpose of or pending the discharge of any of the
Secured Obligations the Security Trustee may convert any
moneys received or recovered by the Security Trustee from one
currency to another, at the spot rate at which the Security
Trustee is able to purchase the currency in which the Secured
Obligations are due with the amount received.
(b) The obligations of any Obligor to pay in the due currency
shall only be satisfied to the extent of the amount of the due
currency purchased after deducting the costs of conversion.
34.4 PERMITTED DEDUCTIONS
The Security Trustee shall be entitled (a) to set aside by way of
reserve amounts required to meet and (b) to make and pay, any
deductions and withholdings (on account of Tax or otherwise) which it
is or may be required by any applicable law to make from any
distribution or payment made by it under this Agreement, and to pay
all Tax which may be assessed against it in respect of any of the
Charged Property, or as a consequence of performing its duties, or by
virtue of its capacity as Trustee under any of the Finance Documents
or otherwise (except in connection with its remuneration for
performing its duties under this Agreement).
34.5 DISCHARGE OF SECURED OBLIGATIONS
(a) Any payment to be made in respect of the Secured Obligations
by the Security Trustee may be made to the Agent on behalf of
the Lenders and that payment shall be a good discharge to the
extent of that payment, to the Security Trustee.
(b) The Security Trustee is under no obligation to make payment to
the Agent in the same currency as that in which any Unpaid Sum
is denominated.
34.6 SUMS RECEIVED BY OBLIGORS
If any of the Obligors receives any sum which, pursuant to any of the
Finance Documents, should have been paid to the Security Trustee, that
sum shall promptly be paid to the Security Trustee for application in
accordance with this Clause.
34.7 SECURITY TRUSTEE APPLICATION OF PROCEEDS
In consideration for the covenants given to the Security Trustee by
each Obligor in Clause 29.6 (Parallel Debt (Covenant to pay the
Security Trustee)), the Security Trustee agrees with each Obligor to
apply all moneys from time to time paid by such Obligor to the
Security Trustee in accordance with the provisions of Clause 34.1
(Order of Application).
136
CONFORMED COPY
35. NOTICES
35.1 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.
35.2 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 and Security Trustee, that identified
with its name below,
or any substitute address or 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.
35.3 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 35.2
(Addresses), if addressed to that department or officer.
(b) Any communication or document to be made or delivered to the
Agent or to the Security Trustee will be effective only when
actually received by the Agent or the Security Trustee and
then only if it is expressly marked for the attention of the
department or officer identified with the Agent's or the
Security Trustee's signature below (or any substitute
department or officer as the Agent 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 will be deemed to have been
made or delivered to each of the Obligors.
(e) All notices to a Lender from the Security Trustee shall be
sent through the Agent.
137
CONFORMED COPY
35.4 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 35.2 (Addresses) or
changing its own address or fax number, the Agent shall notify the
other Parties.
35.5 ELECTRONIC COMMUNICATION
(a) Any communication to be made between the Agent or the Security
Trustee and a Lender under or in connection with the Finance
Documents may be made by electronic mail or other electronic
means, if the Agent, the Trustee and the relevant Lender:
(i) agree that, unless and until notified to the contrary,
this is to be an accepted form of communication;
(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 or the Security Trustee 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 or the
Security Trustee only if it is addressed in such a manner as
the Agent or Security Trustee shall specify for this purpose.
35.6 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.
36. CALCULATIONS AND CERTIFICATES
36.1 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.
138
CONFORMED COPY
36.2 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.
36.3 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.
37. 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.
38. REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of
any Secured Party or the Arranger, any right or remedy under the
Finance Documents shall operate as a waiver, nor shall any single or
partial 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.
39. AMENDMENTS AND WAIVERS
39.1 REQUIRED CONSENTS
(a) Subject to Clause 39.2 (Exceptions) and Clause 29.22
(Releases) any term of the Finance Documents may be amended or
waived only with the consent of the Majority Lenders and the
Obligors and any such amendment or waiver will be binding on
all Parties.
(b) The Agent, or in respect of the Security Documents the
Security Trustee, may effect, on behalf of any Finance Party,
any amendment or waiver permitted by this Clause.
39.2 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;
139
CONFORMED COPY
(v) a change to the Borrowers or Guarantors other than in
accordance with Clause 27 (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 26 (Changes to the Lenders) or this Clause 39;
(viii) the nature or scope of the Charged Property or the
manner in which the proceeds of enforcement of the
Transaction Security are distributed;
(ix) any amendment to the order of priority 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 Trustee or the Arranger
may not be effected without the consent of the Agent, the
Security Trustee or the Arranger.
39.3 AMENDMENTS REQUIRED TO SECURITY DOCUMENTS
Any amendment made to any term of this Agreement (including but not
limited to an amendment or waiver that relates to an increase in or
extension of any Commitment and the payment of principal, interest,
fees or commission payable), is not effective unless and until all
Security Documents which, in the reasonable opinion of the Secured
Trustee, require any confirmation or amendment as a result thereof in
order to preserve the security thereby created shall have been
confirmed or amended (including, without limitation, the Brazilian
Quota Pledge Agreement and the Italian Share Pledge).
40. 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.
41. USA PATRIOT ACT
Each Lender hereby notifies each Obligor that pursuant to the
requirements of the USA Patriot Act, such Lender is required to
obtain, verify and record information that identifies such Obligor,
which information includes the name and address of such Obligor and
other information that will allow such Lender to identify such Obligor
in accordance with the USA Patriot Act.
140
CONFORMED COPY
SECTION 12
GOVERNING LAW AND ENFORCEMENT
42. GOVERNING LAW
This Agreement is governed by English law.
43. ENFORCEMENT
43.1 JURISDICTION OF ENGLISH COURTS
(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 43.1 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.
43.2 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 Flexsys Rubber Chemicals 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 an agent for service of process to
notify the relevant Obligor of the process will not invalidate
the proceedings concerned.
43.3 WAIVER OF IMMUNITY
Each Obligor waives generally all immunity it or its assets or
revenues may otherwise have in any jurisdiction, including immunity in
respect of:
(a) the giving of any relief by way of injunction or order for
specific performance or for the recovery of assets or
revenues; and
(b) the issue of any process against its assets or revenues for
the enforcement of a judgment or, in an action in rem, for the
arrest, detention or sale of any of its assets and revenues.
43.4 TITULO EXECUTIVO EXTRAJUDICIAL
In accordance with Section 585, item II and Section 585, second
paragraph of the Brazilian Code of Civil Procedure (Law 5,869/73 as
amended from time to time), this Agreement shall be deemed as an
out-of-court document (titulo executivo extrajudicial) for all
purposes under Brazilian law, including but not limited to for the
purposes of execution, collection, receipt or otherwise for the taking
of any and all measures required
141
CONFORMED COPY
to perfect and enforce the Guarantee and the Security created herein
and under the Security Documents against Flexsys Industria e Comercio
Ltda., being understood and agreed that the Parties appoint Brazil as
the place for compliance by Flexsys Industria e Comercio Ltda. of its
obligations under this Agreement, the Security Documents and the
Finance Documents.
44. WAIVER OF JURY TRIAL
EACH OF THE PARTIES TO THIS AGREEMENT AGREES TO WAIVE IRREVOCABLY ITS
RIGHTS TO A JURY TRIAL OF ANY CLAIM BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OF THE DOCUMENTS REFERRED TO IN THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED IN THIS AGREEMENT. This waiver is intended to
apply to all Disputes. Each party acknowledges that (a) this waiver is
a material inducement to enter into this Agreement, (b) it has already
relied on this waiver in entering into this Agreement and (c) it will
continue to rely on this waiver in future dealings. Each party
represents that it has reviewed this waiver with its legal advisers
and that it knowingly and voluntarily waives its jury trial rights
after consultation with its legal advisers. In the event of
litigation, this Agreement may be filed as a written consent to a
trial by the court.
THIS AGREEMENT HAS BEEN ENTERED INTO ON THE DATE STATED AT THE BEGINNING OF
THIS AGREEMENT.
142