EXHIBIT 10.14.6
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CREDIT AGREEMENT
Dated as of January 31, 2002
Among
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
as Borrower and Guarantor,
SCHWEITZER-MAUDUIT FRANCE S.A.R.L.
as Borrower,
THE BANKS NAMED IN THIS CREDIT AGREEMENT
as Banks,
and
SOCIETE GENERALE
as Agent
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms......................................................................1
Section 1.02. Computation of Time Periods...............................................................16
Section 1.03. Accounting Terms; Changes in GAAP.........................................................16
Section 1.04. Classes and Types of Advances.............................................................17
Section 1.05. Miscellaneous.............................................................................17
ARTICLE II
THE ADVANCES
Section 2.01. The Advances..............................................................................17
Section 2.02. Method of Borrowing.......................................................................18
Section 2.03. Fees......................................................................................22
Section 2.04. Reduction of the Commitments..............................................................23
Section 2.05. Repayment.................................................................................23
Section 2.06. Interest..................................................................................23
Section 2.07. Prepayments...............................................................................25
Section 2.08. Funding Losses............................................................................27
Section 2.09. Increased Costs...........................................................................27
Section 2.10. Payments and Computations.................................................................29
Section 2.11. Taxes.....................................................................................29
Section 2.12. Sharing of Payments, Etc..................................................................32
Section 2.13. Bank Replacement..........................................................................32
ARTICLE III
CONDITIONS OF LENDING
Section 3.01. Conditions Precedent to Initial Advances..................................................33
Section 3.02. Conditions Precedent to Each Borrowing....................................................34
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Corporate Existence; Subsidiaries.........................................................35
Section 4.02. Corporate Power...........................................................................35
Section 4.03. Authorization and Approvals...............................................................35
Section 4.04. Enforceable Obligations...................................................................36
Section 4.05. Financial Statements......................................................................36
Section 4.06. True and Complete Disclosure..............................................................39
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Section 4.07. Litigation................................................................................39
Section 4.08. Use of Proceeds...........................................................................39
Section 4.09. Investment Company Act....................................................................39
Section 4.10. Taxes.....................................................................................39
Section 4.11. Pension Plans.............................................................................40
Section 4.12. Condition of Property; Casualties.........................................................40
Section 4.13. Insurance.................................................................................40
Section 4.14. No Burdensome Restrictions; No Defaults...................................................41
Section 4.15. Supply Agreement.........................................................................41
Section 4.16. Environmental Condition...................................................................41
Section 4.17. Liens and Encumbrances....................................................................42
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.01. Compliance with Laws, Etc.................................................................42
Section 5.02. Maintenance of Insurance..................................................................42
Section 5.03. Preservation of Corporate Existence, Etc..................................................42
Section 5.04. Payment of Taxes, Etc.....................................................................42
Section 5.05. Reporting Requirements....................................................................43
Section 5.06. Maintenance of Property...................................................................45
Section 5.07. Inspection................................................................................45
Section 5.08. Use of Proceeds...........................................................................46
Section 5.09. Status of Obligations.....................................................................46
Section 5.10. Nature of Business........................................................................46
ARTICLE VI
NEGATIVE COVENANTS
Section 6.01. Liens, Etc................................................................................46
Section 6.02. Merger or Consolidation; Asset Sales......................................................47
Section 6.03. Investments...............................................................................48
Section 6.04. Transactions With Affiliates..............................................................48
Section 6.05. Compliance with ERISA.....................................................................49
Section 6.06. Tangible Net Worth........................................................................49
Section 6.07. Net Debt to Equity Ratio..................................................................49
Section 6.08. Net Debt to Adjusted EBITDA...............................................................49
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Section 6.09. Debt......................................................................................49
Section 6.10. Special Provisions for Material Subsidiaries of SARL......................................50
Section 6.11. Stock Purchases...........................................................................50
ARTICLE VII
REMEDIES
Section 7.01. Events of Default.........................................................................50
Section 7.02. Optional Acceleration of Maturity.........................................................52
Section 7.03. Automatic Acceleration of Maturity........................................................52
Section 7.04. Non-exclusivity of Remedies...............................................................52
Section 7.05. Right of Set-off..........................................................................52
ARTICLE VIII
THE GUARANTY
Section 8.01. Guaranty..................................................................................53
Section 8.02. Guaranty Absolute.........................................................................53
Section 8.03. Waiver....................................................................................54
Section 8.04. Subrogation...............................................................................54
ARTICLE IX
THE AGENT
Section 9.01. Authorization and Action..................................................................55
Section 9.02. Agent's Reliance, Etc.....................................................................55
Section 9.03. The Agent and Its Affiliates..............................................................55
Section 9.04. Bank Credit Decision......................................................................56
Section 9.05. Indemnification...........................................................................56
Section 9.06. Successor Agent...........................................................................56
ARTICLE X
MISCELLANEOUS
Section 10.01. Amendments, Etc...........................................................................57
Section 10.02. Notices, Etc..............................................................................57
Section 10.03. No Waiver; Remedies.......................................................................57
Section 10.04. Costs and Expenses........................................................................57
Section 10.05. Binding Effect............................................................................58
Section 10.06. Bank Assignments and Participations.......................................................58
Section 10.07. Indemnification...........................................................................60
Section 10.08. Execution in Counterparts.................................................................61
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Section 10.09. Survival of Representations, etc..........................................................61
Section 10.10. Severability..............................................................................61
Section 10.11. Usury Not Intended........................................................................61
Section 10.12. Global Effective Rate.....................................................................62
Section 10.13. Judgment Currency.........................................................................62
Section 10.14. Governing Law; Consent to Jurisdiction....................................................62
Section 10.15. Confidentiality...........................................................................63
EXHIBITS:
Exhibit A - Form of Assignment and Acceptance
Exhibit B-1 - Form of Tranche A1 Note
Exhibit B-2 - Form of Tranche A2 Note
Exhibit B-3 - Form of Tranche B1 Note
Exhibit B-4 - Form of Tranche B2 Note
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Notice of Continuation
Exhibit E - Form of Compliance Certificate
Exhibit F-1 - Form of Company's General Counsel Opinion
Exhibit F-2 - Form of SARL's Outside Counsel Opinion
Exhibit F-3 - Form of Agent's Counsel Opinion
Exhibit G - Form of Confidentiality Agreement
SCHEDULES:
Schedule 1 Notice Information for Banks
Schedule 4.07 - Litigation
Schedule 4.16 - Environmental
Schedule 6.01 - Existing Liens
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CREDIT AGREEMENT
This Credit Agreement dated as of January 31, 2002 is among (a)
Schweitzer-Mauduit International, Inc., a Delaware corporation ("Company"); (b)
Schweitzer-Mauduit France S.A.R.L., a French corporation ("SARL"); (c) the Banks
(as defined below); and (d) Societe Generale, as Agent for the Banks.
The Company, SARL, the Banks, and the Agent agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms. As used in this Agreement, the
terms defined above shall have the meanings set forth therein and the following
terms shall have the following meanings (unless otherwise indicated, such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Additional Cost Rate" means (a) for any Bank lending from an
Applicable Lending Office in a Participating Member State the percentage
notified by that Bank to the Agent as the cost of complying with the minimum
reserve requirements of the European Central Bank, (b) for any Bank lending from
an Applicable Lending Office in the United Kingdom will be calculated by the
Agent as follows:
A x 0.01 per cent. per annum
--------
300
Where:
"A" is the rate of charge payable by such Bank to the Financial
Services Authority pursuant to the Fees Regulations (but, for this purpose,
ignoring any minimum fee required pursuant to the Fees Regulations) and
expressed in pounds per (pound)1,000,000 of the Fee Base of such Bank.
"Adjusted EBITDA" means, for any period, (a) Adjusted Net Income for
such period plus (b) to the extent deducted in determining Adjusted Net Income,
the Company's consolidated Interest Expense, income taxes, and depreciation and
amortization for such period less (c) amortization of Deferred Revenue (as
defined in the Financial Statements of the Company), not including any increase
in Deferred Revenues for such period. For the avoidance of doubt, when
calculated as of the end of any fiscal quarter of the Company, Adjusted EBITDA
will be calculated for the four-fiscal quarter period then ending.
"Adjusted Net Income" means, for any period, the Company's consolidated
net income for such period after taxes, as determined in accordance with GAAP,
excluding, however, extraordinary or one-time items, including (a) any net gain
or loss during such period arising from the sale, exchange, or other disposition
of capital assets (such term to include all fixed
assets and all securities) other than in the ordinary course of business and (b)
any write-up or write-down of assets.
"Adjusted U.S. Base Rate" means, for any day, the fluctuating rate per
annum of interest equal to the greater of (a) the U.S. Base Rate in effect on
such day and (b) the Federal Funds Rate in effect on such day plus 1/4 %.
"Advance" means a Tranche A1 Advance, a Tranche A2 Advance, a Tranche
B1 Advance, or a Tranche B2 Advance, as the case may be.
"Affected Bank" has the meanings set forth in Section 2.02(c)(iii) and
2.07(d), as applicable.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person. The
term "control" (including the terms "controlled by" or "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of a Control Percentage, by contract or otherwise.
"Agent" means Societe Generale in its capacity as an agent pursuant to
Article IX and any successor agent pursuant to Section 9.06.
"Agreement" means this Credit Agreement dated as of January 31, 2002
among the Company, SARL, the Banks, and the Agent, as it may be amended or
supplemented from time-to-time.
"Applicable Accounting Rules" means, in respect of a particular Person,
the body of generally accepted accounting principles which are applicable to the
preparation and presentation of such Person's financial statements.
"Applicable Lending Office" means, with respect to each Bank, such
Bank's U.S. Lending Office in the case of a U.S. Base Rate Advance, such Bank's
Eurodollar Lending Office in the case of a Eurodollar Rate Advance, and such
Bank's Eurocurrency Lending Office in the case of a Eurocurrency Rate Advance or
EONIA Rate Advance.
"Applicable Mandatory Cost" of any Bank for the Interest Period for any
Fixed Rate Advance, an addition to the Eurodollar Rate or Eurocurrency Rate to
compensate such Bank for the cost of compliance with (a) the requirements of the
Bank of England and/or the Financial Services Authority (or, in either case, any
other Governmental Authority which replaces all or any of its functions) or (b)
the requirements of the European Central Bank in an amount equal to the
Additional Cost Rate. On the first day of each Interest Period (or as soon as
possible thereafter) the Agent shall calculate, the Additional Cost Rate for
each Bank. The Applicable Mandatory Cost will be calculated by the Agent as a
weighted average of the Banks' Additional Cost Rates (weighted in proportion to
the percentage participation of each Bank in the relevant Borrowing) and will be
expressed as a percentage rate per annum.
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"Applicable Margin" means, at any time with respect to any Fixed Rate
Advance, the following percentages determined as a function of the Net Debt to
Equity Ratio on the last day of the immediately preceding fiscal quarter:
Ratio less than 0.55 Ratio greater than or equal to 0.55
-------------------- -----------------------------------
Tranche A Advances 0.65% 0.75%
Tranche B Advances 0.70% 0.80%
For purposes of calculating the Applicable Margin, the Net Debt to
Equity Ratio shall be determined from the consolidated financial statements of
the Company and its Subsidiaries most recently delivered pursuant to Section
5.05 and certified to the Agent and the Banks in the Compliance Certificate
required to be delivered by the Company in connection with such financial
statements pursuant to Section 5.05(g); provided that the initial calculation of
the Applicable Margin shall be based upon the consolidated financial statements
of the Company and its Subsidiaries for the period ended September 30, 2001 and
the related calculation of the Net Debt to Equity Ratio in the format set forth
in the applicable section of Exhibit E hereto, certified by a Responsible
Officer of the Company. If the Company fails to deliver such financial
statements and Compliance Certificate within the times specified in Section
5.05, or if the Company fails to deliver the certified calculation of the Net
Debt to Equity Ratio with respect to the period ended September 30, 2001 as set
forth above prior to the Closing Date, the Net Debt to Equity Ratio shall be
deemed to be greater than .55 until the Company delivers such financial
statements and Compliance Certificate (or certified calculation, as applicable)
to the Agent and the Banks.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Bank and an Eligible Assignee, and executed by the Agent and the
Company, in substantially the form of the attached Exhibit A.
"Banks" means the lenders listed on the signature pages of this
Agreement and each Eligible Assignee that shall become a party to this Agreement
pursuant to Section 10.06.
"Borrower" means (a) with respect to all Advances, the Company, and (b)
with respect to the Tranche A1 Advances and the Tranche B1 Advances, the Company
and SARL, and "Borrowers" shall refer to all such Persons collectively.
"Borrowing" means a Tranche A1 Borrowing, a Tranche A2 Borrowing, a
Tranche B1 Borrowing, or a Tranche B2 Borrowing.
"Business Day" means, (a) with respect to U.S. Base Rate Advances, a
day of the year on which banks are not required or authorized to close in
Atlanta, Georgia or New York, New York, and (b) with respect to Eurodollar Rate
Advances, a day of the year on which banks are not required or authorized to
close in Atlanta, Georgia, New York, New York, or London, England, and (c) with
respect to Eurocurrency Rate Advances and EONIA Rate Advances, a day of the
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year on which banks are not required or authorized to close in Paris, France and
which is also a TARGET Day.
"Capital Leases" means, as applied to any Person, any lease of any
Property by such Person as lessee which would, in accordance with Applicable
Accounting Rules, be required to be classified and accounted for as a capital
lease on the balance sheet of such Person.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, and all rules and regulations and
requirements thereunder in each case as now or hereafter in effect.
"Class" has the meaning set forth in Section 1.04.
"Closing Date" means the date on which all conditions precedent set
forth in Section 3.01 hereof have been satisfied or waived by the party entitled
to performance thereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute.
"Commitments" means, as to any Bank, its Tranche A1 Commitment, its
Tranche A2 Commitment, its Tranche B1 Commitment and its Tranche B2 Commitment.
"Compliance Certificate" means a Compliance Certificate signed by a
Responsible Officer of the Company in substantially the form of the attached
Exhibit E.
"Control Percentage" means, with respect to any Person, the percentage
of the outstanding capital stock of such Person having ordinary voting power
which gives the direct or indirect holder of such stock the power to elect a
majority of the Board of Directors of such Person.
"Controlled Group" means, all members of a controlled group of
corporations and all trades (whether or not incorporated) under common control
which, together with any Borrower, are treated as a single employer under
Section 414 of the Code.
"Continue", "Continuation", and "Continued" each refers to a
continuation of Advances for an additional Interest Period upon the expiration
of the Interest Period then in effect for such Advances.
"Convert", "Conversion", and "Converted" each refers to a conversion of
Advances of one Type into Advances of another Type as may be required or
permitted from time to time under the terms of Sections 2.02(c) and 2.07(d) of
this Agreement.
"Credit Documents" means this Agreement, the Notes, and each other
agreement, instrument or document executed by the Borrowers, any of their
Subsidiaries or any of their officers at any time in connection with this
Agreement.
"Currency" means Dollars or Euros, as applicable.
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"Debt," for any Person, means without duplication:
(a) indebtedness of such Person for borrowed money;
(b) obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(c) obligations of such Person to pay the deferred purchase price
of property or services (other than trade accounts payable);
(d) obligations of such Person as lessee under Capital Leases;
(e) obligations of such Person under direct or indirect guaranties
in respect of, and obligations (contingent or otherwise) of such Person to
purchase or otherwise acquire, or otherwise to assure a creditor against loss in
respect of, indebtedness or obligations of others of the kinds referred to in
clauses (a) through (d) above;
(f) all obligations of such Person under any Interest Hedge
Agreement or Financial Contract (excluding foreign exchange transactions not
entered into for speculative purposes); and
(g) indebtedness or obligations of others of the kinds referred to
in clauses (a) through (f) secured by any Lien on or in respect of any Property
of such Person.
"Default" means (a) an Event of Default or (b) any event or condition
which with notice or lapse of time or both would, unless cured or waived, become
an Event of Default.
"Dollar Equivalent" means the equivalent in another currency of an
amount in Dollars to be determined by reference to the rate of exchange quoted
by Societe Generale, New York Branch at 10:00 a.m. (New York City time) on the
date of determination, for the spot purchase in the foreign exchange market of
such amount of Dollars with such other currency.
"Dollars" and "$" means lawful money of the United States of America.
"Eligible Assignee" means (a) a commercial bank organized under the
laws of the United States, or any State thereof, and having primary capital
(Tier I) of not less than $500,000,000 and approved by the Agent and the
Company, which approval will not be unreasonably withheld, (b) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development and having primary capital
(or its equivalent) of not less than $500,000,000 (or its Dollar Equivalent) and
approved by the Agent and the Company, which approval by the Agent and the
Company will not be unreasonably withheld, or (c) any other Person that has been
approved by the Company in its sole discretion and the Agent, which approval by
the Agent will not be unreasonably withheld. Without limiting any other basis
upon which the Company may reasonably withhold its consent to a proposed
assignee, the Company's consent shall not be deemed to have been unreasonably
withheld if such assignment would be reasonably likely to result in (i) any
Borrower becoming liable for any payment pursuant to Sections 2.09, 2.11(a) or
2.11(c) or (ii) such assignee asserting any rights under Sections 2.02(c)(iii)
or 2.07(d).
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"Environment" or "Environmental" shall have the meanings set forth in
43 U.S.C.ss. 9601(8) (1988).
"Environmental Claim" means any third party (including governmental
agencies and employees) action, lawsuit, claim, regulatory action or proceeding,
order, decree, consent agreement or notice of potential or actual responsibility
or violation which seeks to impose liability under any Environmental Law.
"Environmental Law" means, as to a particular Borrower or its
Subsidiaries, all Legal Requirements applicable to such Borrower or its
Subsidiaries arising from, relating to, or in connection with the Environment,
including without limitation CERCLA, relating to (a) pollution, contamination,
injury, destruction, loss, protection, cleanup, reclamation or restoration of
the air, surface water, groundwater, land surface or subsurface strata, or other
natural resources; (b) solid, gaseous or liquid waste generation, treatment,
processing, recycling, reclamation, cleanup, storage, disposal or
transportation; (c) exposure to pollutants, contaminants, hazardous, medical,
infectious, or toxic substances, materials or wastes; or (d) the manufacture,
processing, handling, transportation, distribution in commerce, use, storage or
disposal of hazardous, medical, infectious, or toxic substances, materials or
wastes.
"Environmental Permit" means any permit, license, order, approval or
other authorization under Environmental Law.
"EONIA Rate" means, for each EONIA Rate Advance comprising part of the
same Borrowing, the interest rate per annum set forth on Telerate Page 247 (or
any replacement page on such service) as the Euro Overnight Index Average at or
about 7:00 a.m. (Brussels time) on the next Business Day after the date of
determination.
"EONIA Rate Advance" means an Advance which bears interest based on the
EONIA Rate.
"Equity" means, for any period (a) Total Stockholders' Equity (as
defined in the Financial Statements of the Company) plus (b) Minority Interests
(as defined in the Financial Statements of the Company).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time-to-time.
"Euro" and/or "_" means the euro referred to in Council Regulation
(EC) No. 1103/97 dated June 17, 1997 passed by the Council of the European
Union, or, if different, the then lawful currency of the member states of the
European Union that participate in the third stage of Economic and Monetary
Union.
"Eurocurrency Lending Office" means, with respect to any Bank, the
office of such Bank specified as its "Eurocurrency Lending Office" opposite its
name on Schedule 1 (or, if no such office is specified, its U.S. Lending Office)
or such other office of such Bank as such Bank may from time-to-time specify to
the Borrowers and the Agent.
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"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board (or any successor), as in effect from
time-to-time.
"Eurocurrency Rate" means, for the Interest Period for each
Eurocurrency Rate Advance comprising part of the same Borrowing, (a) the
interest rate per annum set forth on Telerate Page 248 as the Euro Interbank
Offered Rate at or about 11:00 a.m. (Brussels time) two Business Days before the
first day of such Interest Period and for a period equal to such Interest
Period; provided that, if no such quotation appears on Telerate Page 248, the
Eurocurrency Rate shall be an interest rate per annum (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum) equal to the rate per annum at
which deposits in Euros are offered by the Reference Banks to prime banks in the
European interbank market at 11:00 a.m. (Brussels time) two Business Days before
the first day of such Interest Period in an amount substantially equal to
Societe Generale's Eurocurrency Rate Advance comprising part of such Borrowing
and for a period equal to such Interest Period.
"Eurocurrency Rate Advance" means an Advance which bears interest based
on the Eurocurrency Rate.
"Eurodollar Lending Office" means, with respect to any Bank, the office
of such Bank specified as its "Eurodollar Lending Office" opposite its name on
Schedule 1 (or, if no such office is specified, its U.S. Lending Office) or such
other office of such Bank as such Bank may from time-to-time specify to the
Borrowers and the Agent.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
Rate Advance comprising part of the same Borrowing, the interest rate per annum
set forth on Telerate Page 3750 as the London Interbank Offered Rate at or about
11:00 a.m. (London time) two Business Days before the first day of such Interest
Period and for a period equal to such Interest Period; provided that, if no such
quotation appears on Telerate Page 3750, the Eurodollar Rate shall be an
interest rate per annum (rounded upward to the nearest whole multiple of 1/16 of
1% per annum) equal to the rate per annum at which deposits in Dollars are
offered by the Reference Banks to prime banks in the London interbank market at
11:00 a.m. (London time) two Business Days before the first day of such Interest
Period in an amount substantially equal to Societe Generale's Eurodollar Rate
Advance comprising part of such Borrowing and for a period equal to such
Interest Period.
"Eurodollar Rate Advance" means an Advance which bears interest based
on the Eurodollar Rate.
"Events of Default" has the meaning set forth in Section 7.01.
"Existing Credit Agreement" means the Amended and Restated Credit
Agreement dated as of January 30, 1998 among the Company, SARL, PDM Industries
S.N.C., Schweitzer-Mauduit Spain, S.L., the banks named therein and Societe
Generale, as Agent.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business
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Day) by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
any such day on such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any of its successors.
"Fees Regulations" means the Banking Supervision (Fees) Regulations
1999 or such other law or regulation as may be in force from time to time in
respect of the payment of fees for banking supervision.
"Fee Base" has the meaning given to it in, and will be calculated in
accordance with, the Fees Regulations.
"Financial Contract" of a Person means (a) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (b) any Rate Management Transaction.
"Financial Statements" means (a) the audited consolidated balance sheet
of the Company as at December 31, 2000 and the related audited consolidated
statements of income, changes in stockholders' equity and cash flows of the
Company and (b) the audited or unaudited, as applicable, combined or
consolidated, as applicable, balance sheets and income, changes in owners'
equity and cash flow statements of each of the other entities referred to in
Section 4.05, each dated as of December 31, 2000.
"Fixed Rate Advance" means any Eurodollar Rate Advance or Eurocurrency
Rate Advance.
"Fixed Rate Reserve Percentage" of any Bank for the Interest Period for
any Fixed Rate Advance means the reserve percentage applicable during such
Interest Period (or if more than one such percentage shall be so applicable, the
daily average of such percentages for those days in such Interest Period during
which any such percentage shall be so applicable) under regulations issued from
time-to-time by the Federal Reserve Board for determining the maximum reserve
requirement (including, without limitation, any emergency, supplemental or other
marginal reserve requirement) for such Bank with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term equal
to such Interest Period.
"Fund," "Trust Fund," or "Superfund" means the Hazardous Substance
Response Trust Fund, established pursuant to 42 U.S.C. ss. 9631 (1988) and the
Post-closure Liability Trust Fund, established pursuant to 42 U.S.C. ss. 9641
(1988), which statutory provisions have been amended or repealed by the
Superfunds Amendments and Reauthorization Act of 1986, and the "Fund," "Trust
Fund," or "Superfund" that are now maintained pursuant to ss. 9507 of the Code.
"GAAP" means United States generally accepted accounting principles as
in effect from time-to-time, applied on a basis consistent with the requirements
of Section 1.03.
"Governmental Authority" means, as to any Person in connection with any
subject, any foreign, national, state or provincial governmental authority, or
any political subdivision of any
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state thereof, or any agency, department, commission, board, authority or
instrumentality, bureau or court, in each case having jurisdiction over such
Person or such Person's Property in connection with such subject.
"Governmental Proceedings" means any action or proceedings by or before
any Governmental Authority, including, without limitation, the promulgation,
enactment or entry of any Legal Requirement.
"Guaranteed Obligations" means all Advances and other amounts payable
by SARL to the Agent or the Banks under the Credit Documents.
"Hazardous Substance" means the substances identified as such pursuant
to CERCLA and those regulated under any other Environmental Law, including
without limitation pollutants, contaminants, petroleum, petroleum products,
radionuclides, radioactive materials, and medical and infectious waste.
"Hazardous Waste" means the substances regulated as such pursuant to
any Environmental Law.
"Interest Hedge Agreement" means an interest hedge, rate swap, or cap,
or similar arrangement between a Borrower and a financial institution providing
for the exchange of nominal interest obligations or the cap of the interest rate
on the Advances made under this Agreement.
"Interest Period" means, for each Fixed Rate Advance comprising part of
the same Borrowing, the period commencing on the date of such Advance and ending
on the last day of the period selected by a Borrower pursuant to the provisions
below and Section 2.02 and, thereafter, each subsequent period commencing on the
last day of the immediately preceding Interest Period and ending on the last day
of the period selected by such Borrower pursuant to the provisions below and
Section 2.02. The duration of each such Interest Period shall be one, two,
three, or six months, in each case as the applicable Borrower may, upon notice
received by the Agent at the Applicable Lending Office on the day and at the
time required by Section 2.02 (and copies of which shall in any event be sent
simultaneously to the Agent's U.S. Lending Office), select; provided, however,
that:
(a) Interest Periods commencing on the same date for Advances by
each Bank comprising part of the same Borrowing shall be of the same duration;
(b) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding Business Day, provided that if
such extension would cause the last day of such Interest Period to occur in the
next following calendar month, the last day of such Interest Period shall occur
on the next preceding Business Day;
(c) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month in which it would have ended if there were a
numerically corresponding day in such calendar month; and
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(d) no Borrower may select any Interest Period for any Advance
which ends after the applicable Maturity Date for such Advance.
"Interim Financial Statements" means (a) the unaudited consolidated
balance sheet of the Company as at September 30, 2001 and the related unaudited
consolidated statements of income, changes in stockholders' equity and cash
flows of the Company and (b) the unaudited, combined or consolidated, as
applicable, balance sheets and income, changes in owners' equity and cash flow
statements of each of the other entities referred to in Section 4.05, each dated
as of September 30, 2001.
"Legal Requirement" means, as to any Person, any law, statute,
ordinance, decree, requirement, order, judgment, rule, regulation (or official
interpretation of any of the foregoing) of, and the terms of any license or
permit issued by, any Governmental Authority which is applicable to such Person.
"Lien" means any mortgage, lien, pledge, assignment, charge, deed of
trust, security interest, hypothecation, preference, deposit arrangement or
encumbrance (or any other arrangement having the practical effect of the
foregoing) to secure or provide for the payment of any obligation of any Person,
whether arising by contract, operation of law or otherwise (including, without
limitation, the interest of a vendor or lessor under any conditional sale
agreement, Capital Lease or other title retention agreement).
"Liquid Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by (i) the government of
Brazil, with respect to investments of amounts arising from or used in the
conduct of such Person's business in Brazil, (ii) the United States, (iii) the
Republic of France or (iv) the Kingdom of Spain;
(b) (i) negotiable or nonnegotiable certificates of deposit, time
deposits, or other similar banking arrangements maturing within 180 days from
the date of acquisition thereof ("bank debt securities"), issued by (A) any Bank
that is a commercial bank or commercial financial institution or (B) any other
bank or trust company which has a combined capital surplus and undivided profit
of not less than $500,000,000 or the Dollar Equivalent thereof, if at the time
of deposit or purchase, such bank debt securities are rated not less than "A"
(or the then equivalent) by the rating service of Standard & Poor's Ratings
Group or of Moody's Investors Service, and (ii) commercial paper issued by (A)
any Bank that is a commercial bank or commercial financial institution or (B)
any other Person if at the time of purchase such commercial paper is rated not
less than "A-2" (or the then equivalent) by the rating service of Standard &
Poor's Ratings Group or not less than "P-2" (or the then equivalent) by the
rating service of Moody's Investors Service, or upon the discontinuance of both
of such services, such other nationally recognized rating service or services,
as the case may be, as shall be selected by the Borrower with the consent of the
Majority Banks;
(c) repurchase agreements relating to investments described in
clauses (a) and (b) above with a market value at least equal to the
consideration paid in connection therewith, with any Person who regularly
engages in the business of entering into repurchase agreements and has
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a combined capital surplus and undivided profit of not less than $500,000,000 or
the Dollar Equivalent thereof, if at the time of entering into such agreement
the debt securities of such Person are rated not less than "A" (or the then
equivalent) by the rating service of Standard & Poor's Ratings Group or of
Moody's Investors Service; and
(d) such other instruments (within the meaning of Article 9 of the
Uniform Commercial Code as adopted in the State of New York) or money market
funds as the Borrower may request and the Agent may approve in writing, which
approval will not be unreasonably withheld.
"Majority Banks" means, at any time, Banks holding at least 66-2/3% of
the then aggregate unpaid principal amount of the Notes held by the Banks at
such time, or, if no such principal amount is then outstanding, Banks having at
least 66-2/3% of the aggregate amount of the Commitments at such time.
"Material Adverse Change" shall mean (a) a material adverse change in
the business, financial condition, or results of operations of the Company and
its Subsidiaries, taken as a whole, since the date of the Financial Statements,
or (b) a material adverse effect on any Borrower's ability to perform its
obligations under this Agreement, any Note or any other Credit Document.
"Material Subsidiaries" means any Subsidiary of any Borrower, which
Subsidiary holds or constitutes 5% or more of the consolidated assets of the
Company.
"Maturity Date" means (a) with respect to the Tranche A Commitments,
the earlier of (i) January 30, 2003 and (ii) the earlier termination in whole of
the Tranche A Commitments pursuant to Section 2.04 or Article VII and (b) with
respect to the Tranche B Commitments, the earlier of (i) January 31, 2007 and
(ii) the earlier termination in whole of the Tranche B Commitments pursuant to
Section 2.04 or Article VII.
"Maximum Rate" means the maximum nonusurious interest rate under
applicable law (determined under such laws after giving effect to any items
which are required by such laws to be construed as interest in making such
determination, including without limitation if required by such laws, certain
fees and other costs).
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which any Borrower or any member of the Controlled Group
is making or accruing an obligation to make contributions.
"Net Debt" means, for any period, the Company's consolidated (a)
current portion of long term Debt plus (b) other short term Debt plus (c) long
term Debt less (d) cash and cash equivalents (as defined in the Financial
Statements of the Company), each as determined in accordance with GAAP.
"Net Debt to Equity Ratio" means, at any time, the ratio of the
Company's (a) Net Debt to (b) Equity at such time.
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"Net Income" means, for any period, the Company's consolidated net
income for such period after taxes, as determined in accordance with GAAP.
"Note" means a Tranche A1 Note, a Tranche A2 Note, a Tranche B1 Note,
or a Tranche B2 Note.
"Notice of Borrowing" means a notice of borrowing in the form of the
attached Exhibit C signed by a Responsible Officer of the applicable Borrower.
"Notice of Continuation" means a notice of continuation in the form of
the attached Exhibit D signed by a Responsible Officer of the applicable
Borrower.
"Obligations" means all Advances and other amounts payable by the
Borrowers to the Agent or the Banks under the Credit Documents, including
without limitation, the Company's obligations under Article VIII.
"Participating Member State" means each state so described in any
legislative measures of the European Council for the introduction of, changeover
to or operation of a single or unified European currency (whether known as the
Euro or otherwise), being in part the implementation of the third stage of
Economic and Monetary Union as contemplated in the Treaty of Rome of 25 March
1957, as amended by the Single European Act 1986 and the Maastricht Treaty
(which was signed at Maastricht on 7 February 1992 and came into force on 1
November 1993).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Liens" means the Liens permitted to exist pursuant to
Section 6.01.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a government or any political subdivision or agency
thereof or any trustee, receiver, custodian or similar official.
"Philip Morris" means Philip Morris Incorporated, a Virginia
corporation.
"Plan" means an employee benefit plan (other than a Multiemployer Plan)
sponsored by the Company or any member of the Controlled Group and covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code.
"Property" of any Person means any property or assets (whether real,
personal, or mixed, tangible or intangible) of such Person.
"Pro Rata Share" means, at any time with respect to any Bank, either
(a) if the Commitments have not been canceled, the ratio (expressed as a
percentage) of such Bank's uncancelled Commitments at such time to the aggregate
uncancelled Commitments at such time, (b) if the Commitments have been
terminated but no Advances are outstanding, the ratio (expressed as a
percentage) of such Bank's Commitment immediately prior to such termination to
the aggregate amount of the Commitments immediately prior to such termination or
(c) if the
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aggregate Commitments have been terminated and there are outstanding Advances,
the ratio (expressed as a percentage) of such Bank's aggregate outstanding
Advances at such time to the aggregate outstanding Advances of all the Banks at
such time.
"Rate Management Transactions" means any transaction (including an
agreement with respect thereto) which is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures.
"Reference Banks" means Societe Generale, Natexis Banque Populaires,
and Credit Lyonnais.
"Register" has the meaning set forth in paragraph (c) of Section 10.06.
"Regulations T, U, X and D" means Regulations T, U, X, and D of the
Federal Reserve Board, as the same is from time-to-time in effect, and all
official rulings and interpretations thereunder or thereof.
"Release" shall have the meaning set forth in CERCLA or under any other
Environmental Law.
"Reportable Event" means any of the events set forth in Section 4043(b)
of ERISA.
"Response" shall have the meaning set forth in CERCLA or under any
other Environmental Law.
"Responsible Officer" means, of any Person, the Chief Executive
Officer, President, Chief Financial Officer, any Executive or Senior Vice
President, Secretary (or the French equivalent of any of the foregoing) of such
Person or any other member of senior management of such Person.
"SEC" means the Securities and Exchange Commission, and any successor
entity.
"Subsidiary" of a Person means any corporation, association,
partnership or other business entity of which 50% or more of the outstanding
shares of capital stock (or other equivalent interests) having by the terms
thereof ordinary voting power under ordinary circumstances to elect a majority
of the board of directors or Persons performing similar functions (or, if there
are no such directors or Persons, having general voting power) of such entity
(irrespective of whether at the time capital stock (or other equivalent
interests) of any other class or classes of such entity shall or might have
voting power upon the occurrence of any contingency) is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more
Subsidiaries of such Person or by one or more Subsidiaries of such Person.
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"Supply Agreement" means (a) the Amended and Restated Agreement for
Fine Paper Supply dated as of July 1, 2000 between Philip Morris and the
Company, and (b) the Amended and Restated Addendum to Amended and Restated Fine
Papers Supply Agreement dated as of July 1, 2000, as such Agreements may be
further amended or modified from time-to-time.
"Tangible Net Worth" means, as of any date for the Company on a
consolidated basis, the sum of (a) the par value (or value stated on the books
of the Company) of the capital stock of all classes of the Company, plus (b) the
additional paid-in capital of the Company, plus (c) the amount of the surplus
and retained earnings, whether capital or earned, of the Company, all determined
on a consolidated basis in accordance with GAAP, excluding, however, (i) the
value of any redeemable preferred stock or similar capital stock of the Company,
and (ii) accumulated other comprehensive income, minus (d) the absolute value of
treasury stocks, minus (e) the sum of the value indicated on the Company's
balance sheet of the following items: patents, trademarks, copyrights, deferred
charges (excluding deferred taxes), deferred credits (excluding deferred
revenues), and other intangible assets.
"TARGET" means Trans-European Automated Real-time Gross settlement
Express Transfer system.
"TARGET Day" means a day on which payments in Euros are settled in the
TARGET system.
"Tax Group" has the meaning set forth in Section 4.10.
"Termination Event" means (a) the occurrence of a Reportable Event with
respect to a Plan, as described in Section 4043 of ERISA and the regulations
issued thereunder (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC under such regulations), (b) the withdrawal of any
Borrower or any of its Affiliates from a Plan during a plan year in which it was
a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the
giving of a notice of intent to terminate a Plan under Section 4041(c) of ERISA,
(d) the institution of proceedings to terminate a Plan by the PBGC, or (e) any
other event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan.
"Tranche A Advance" means a Tranche A1 Advance or a Tranche A2 Advance.
"Tranche A Borrowing" means a Tranche A1 Borrowing or a Tranche A2
Borrowing.
"Tranche A Commitment" means the Tranche A1 Commitment and the Tranche
A2 Commitment.
"Tranche A1 Advance" means any advance by a Bank to a Borrower as part
of a Tranche A1 Borrowing and refers to an EONIA Rate Advance or a Eurocurrency
Rate Advance.
"Tranche A1 Borrowing" means a borrowing consisting of simultaneous
Tranche A1 Advances of the same Type and to the same Borrower made by each Bank
pursuant to Section 2.01(a).
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"Tranche A1 Commitment" means, for each Bank, the amount in Euros set
opposite such Bank's name on the signature pages hereof as its Tranche A1
Commitment or, if such Bank has entered into any Assignment and Acceptance after
the date hereof, set forth for such Bank as its Tranche A1 Commitment in the
Register maintained by the Agent pursuant to Section 10.06(c).
"Tranche A1 Note" means the promissory note of a Borrower payable to
the order of any Bank, in substantially the form of the attached Exhibit B-1,
evidencing indebtedness of such Borrower to such Bank resulting from Tranche A1
Advances owing to such Bank from such Borrower.
"Tranche A1 Share" means, at any time with respect to any Bank with a
Tranche A1 Commitment, the ratio (expressed as a percentage) of such Bank's
Tranche A1 Commitment at such time to the aggregate Tranche A1 Commitments at
such time.
"Tranche A2 Advance" means any advance by a Bank to the Company as part
of a Tranche A2 Borrowing and refers to a U.S. Base Rate Advance or a Eurodollar
Rate Advance.
"Tranche A2 Borrowing" means a borrowing consisting of simultaneous
Tranche A2 Advances of the same Type made by each Bank pursuant to Section
2.01(b).
"Tranche A2 Commitment" means, for each Bank, the amount in Dollars set
opposite such Bank's name on the signature pages hereof as its Tranche A2
Commitment or, if such Bank has entered into any Assignment and Acceptance after
the date hereof, set forth for such Bank as its Tranche A2 Commitment in the
Register maintained by the Agent pursuant to Section 10.06(c).
"Tranche A2 Note" means the promissory note of the Company payable to
the order of any Bank, in substantially the form of the attached Exhibit B-2,
evidencing indebtedness of the Company to such Bank resulting from Tranche A2
Advances owing to such Bank.
"Tranche A2 Share" means, at any time with respect to any Bank with a
Tranche A2 Commitment, the ratio (expressed as a percentage) of such Bank's
Tranche A2 Commitment at such time to the aggregate Tranche A2 Commitments at
such time.
"Tranche B Advance" means a Tranche B1 Advance or a Tranche B2 Advance.
"Tranche B Borrowing" means a Tranche B1 Borrowing or a Tranche B2
Borrowing.
"Tranche B Commitment" means the Tranche B1 Commitment and the Tranche
B2 Commitment.
"Tranche B1 Advance" means any advance by a Bank to a Borrower as part
of a Tranche B1 Borrowing and refers to an EONIA Rate Advance or a Eurocurrency
Rate Advance.
"Tranche B1 Borrowing" means a borrowing consisting of simultaneous
Tranche B1 Advances of the same Type and to the same Borrower made by each Bank
pursuant to Section 2.01(c).
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"Tranche B1 Commitment" means, for each Bank, the amount in Euros set
opposite such Bank's name on the signature pages hereof as its Tranche B1
Commitment or, if such Bank has entered into any Assignment and Acceptance after
the date hereof, set forth for such Bank as its Tranche B1 Commitment in the
Register maintained by the Agent pursuant to Section 10.06(c).
"Tranche B1 Note" means the promissory note of a Borrower payable to
the order of any Bank, in substantially the form of the attached Exhibit B-3,
evidencing indebtedness of such Borrower to such Bank resulting from Tranche B1
Advances owing to such Bank from such Borrower.
"Tranche B1 Share" means, at any time with respect to any Bank with a
Tranche B1 Commitment, the ratio (expressed as a percentage) of such Bank's
Tranche B1 Commitment at such time to the aggregate Tranche B1 Commitments at
such time.
"Tranche B2 Advance" means any advance by a Bank to the Company as part
of a Tranche B2 Borrowing and refers to a U.S. Base Rate Advance or a Eurodollar
Rate Advance.
"Tranche B2 Borrowing" means a borrowing consisting of simultaneous
Tranche B2 Advances of the same Type made by each Bank pursuant to Section
2.01(d).
"Tranche B2 Commitment" means, for each Bank, the amount in Dollars set
opposite such Bank's name on the signature pages hereof as its Tranche B2
Commitment or, if such Bank has entered into any Assignment and Acceptance after
the date hereof, set forth for such Bank as its Tranche B2 Commitment in the
Register maintained by the Agent pursuant to Section 10.06(c).
"Tranche B2 Note" means the promissory note of the Company payable to
the order of any Bank, in substantially the form of the attached Exhibit B-4,
evidencing indebtedness of the Company to such Bank resulting from Tranche B2
Advances owing to such Bank.
"Tranche B2 Share" means, at any time with respect to any Bank with a
Tranche B2 Commitment, the ratio (expressed as a percentage) of such Bank's
Tranche B2 Commitment at such time to the aggregate Tranche B2 Commitments at
such time.
"Type" has the meaning set forth in Section 1.04.
"U.S. Base Rate" means a fluctuating interest rate per annum as shall
be in effect from time-to-time equal to the rate of interest publicly announced
by Societe Generale, New York Branch as its prime rate, whether or not the
applicable Borrower has notice thereof.
"U.S. Base Rate Advance" means an Advance which bears interest as
provided in Section 2.06(a).
"U.S. Lending Office" means, with respect to any Bank, the office of
such Bank specified as its "U.S. Lending Office" opposite its name on Schedule 1
or such other office of such Bank as such Bank may from time-to-time specify to
the Borrowers and the Agent.
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Section 1.02 Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
Section 1.03 Accounting Terms; Changes in GAAP.
(a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered to the
Banks hereunder shall (unless otherwise disclosed to the Banks in writing at the
time of delivery thereof in the manner described in subsection (b) below) be
prepared, in accordance with GAAP applied on a basis consistent with those used
in the preparation of the latest financial statements furnished to the Banks
hereunder (which prior to the delivery of the first financial statements under
Section 5.05 hereof, shall mean the Financial Statements). All calculations made
for the purposes of determining compliance with this Agreement shall (except as
otherwise expressly provided herein) be made by application of GAAP applied on a
basis consistent with those used in the preparation of the annual or quarterly
financial statements furnished to the Banks pursuant to Section 5.05 hereof most
recently delivered prior to or concurrently with such calculations (or, prior to
the delivery of the first financial statements under Section 5.05 hereof, used
in the preparation of the Financial Statements) unless (i) either (A) the
Company shall have objected to determining such compliance on such basis at the
time of delivery of such financial statements or (B) the Majority Banks shall so
object in writing within 30 days after the delivery of such financial statements
and (ii) the Company and the Majority Banks have not agreed upon amendments to
the financial covenants contained herein to reflect any change in such basis, in
which event such calculations shall be made on a basis consistent with those
used in the preparation of the latest financial statements as to which such
objection shall not have been made (which, if objection is made in respect of
the first financial statements delivered under Section 5.05 hereof, shall mean
the Financial Statements).
(b) The Company shall deliver to the Banks at the same time as the
delivery of any annual or quarterly financial statement under Section 5.05
hereof (i) a description in reasonable detail of any material variation between
the application of accounting principles employed in the preparation of such
statement and the application of accounting principles employed in the
preparation of the most recent preceding annual or quarterly financial
statements as to which no objection has been made in accordance with the last
sentence of clause (a) of this Section 1.03 and (ii) reasonable estimates of the
difference between such statements arising as a consequence thereof.
Section 1.04 Classes and Types of Advances. Advances are
distinguished by "Class" and "Type". The "Class" of an Advance refers to the
determination of whether such Advance is a Tranche A1 Advance, a Tranche A2
Advance, a Tranche B1 Advance, or a Tranche B2 Advance, each of which
constitutes a Class. The "Type" of an Advance refers to the determination
whether such Advance is a Eurodollar Rate Advance, a Eurocurrency Rate Advance,
a U.S. Base Rate Advance, or a EONIA Rate Advance, each of which constitutes a
Type.
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Section 1.05 Miscellaneous. Article, Section, Schedule and Exhibit
references are to Articles and Sections of and Schedules and Exhibits to this
Agreement, unless otherwise specified.
ARTICLE II
THE ADVANCES
Section 2.01 The Advances.
(a) Tranche A1 Advances. Each Bank severally agrees, on the terms
and conditions set forth in this Agreement, to make Tranche A1 Advances in Euros
to each Borrower from time-to-time on any Business Day during the period from
the date of this Agreement until the relevant Maturity Date in an aggregate
principal amount not to exceed at any time outstanding such Bank's Tranche A1
Commitment; provided that the sum of the aggregate outstanding principal amounts
of all Tranche A1 Advances made by each Bank (whether to the Company or SARL)
shall not exceed such Bank's Tranche A1 Commitment. Each Tranche A1 Borrowing
shall be in an aggregate amount not less than 1,000,000 and in integral
multiples of 100,000 in excess thereof and shall consist of Tranche A1 Advances
of the same Type made on the same day to the same Borrower by the Banks ratably
according to their respective Tranche A1 Commitments. Within the limits of each
Bank's Tranche A1 Commitment, the Borrowers may from time-to-time borrow, prepay
pursuant to Section 2.07 and reborrow under this Section 2.01(a).
(b) Tranche A2 Advances. Each Bank severally agrees, on the terms
and conditions set forth in this Agreement, to make Tranche A2 Advances in
Dollars to the Company from time-to-time on any Business Day during the period
from the date of this Agreement until the relevant Maturity Date in an aggregate
principal amount not to exceed at any time outstanding such Bank's Tranche A2
Commitment. Each Tranche A2 Borrowing shall be in an aggregate amount not less
than $1,000,000 and in integral multiples of $100,000 in excess thereof and
shall consist of Tranche A2 Advances of the same Type made on the same day by
the Banks ratably according to their respective Tranche A2 Commitments. Within
the limits of each Bank's Tranche A2 Commitment, the Company may from
time-to-time borrow, prepay pursuant to Section 2.07 and reborrow under this
Section 2.01(b).
(c) Tranche B1 Advances. Each Bank severally agrees, on the terms
and conditions set forth in this Agreement, to make Tranche B1 Advances in Euros
to each Borrower from time-to-time on any Business Day during the period from
the date of this Agreement until the relevant Maturity Date in an aggregate
principal amount not to exceed at any time outstanding such Bank's Tranche B1
Commitment; provided that the sum of the aggregate outstanding principal amounts
of all Tranche B1 Advances made by each Bank (whether to the Company or SARL)
shall not exceed such Bank's Tranche B1 Commitment. Each Tranche B1 Borrowing
shall be in an aggregate amount not less than 5,000,000 and in integral
multiples of 1,000,000 in excess thereof and shall consist of Tranche B1
Advances of the same Type made on the same day to the same Borrower by the Banks
ratably according to their respective Tranche B1 Commitments. Within the limits
of each Bank's Tranche B1 Commitment, the Borrowers may from time-to-time
borrow, prepay pursuant to Section 2.07 and reborrow under this Section 2.01(c).
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(d) Tranche B2 Advances. Each Bank severally agrees, on the terms
and conditions set forth in this Agreement, to make Tranche B2 Advances in
Dollars to the Company from time-to-time on any Business Day during the period
from the date of this Agreement until the relevant Maturity Date in an aggregate
principal amount not to exceed at any time outstanding such Bank's Tranche B2
Commitment. Each Tranche B2 Borrowing shall be in an aggregate amount not less
than $5,000,000 and in integral multiples of $1,000,000 in excess thereof and
shall consist of Tranche B2 Advances of the same Type made on the same day by
the Banks ratably according to their respective Tranche B2 Commitments. Within
the limits of each Bank's Tranche B2 Commitment, the Company may from
time-to-time borrow, prepay pursuant to Section 2.07 and reborrow under this
Section 2.01(d).
Section 2.02 Method of Borrowing.
(a) Notice. Each Borrowing shall be made pursuant to a Notice of
Borrowing, given not later than (i) 10:00 a.m. (Paris time) at least three
Business Days before the date of a requested Tranche A1 Borrowing, (ii) 10:00
a.m. (New York time) at least three Business Days before the date of a requested
Tranche A2 Borrowing, (iii) 10:00 a.m. (Paris time) at least five Business Days
before the date of a requested Tranche B1 Borrowing, (iv) 10:00 a.m. (New York
time) at least five Business Days before the date of a requested Tranche B2
Borrowing, or (v) 10:00 a.m. (New York time) on the day preceding the day of a
requested Borrowing in the case of a Borrowing consisting of U.S. Base Rate
Advances, by the applicable Borrower to the Agent's Applicable Lending Office.
The Agent shall give to each Bank prompt notice on the day of receipt of a
timely Notice of Borrowing of such requested Borrowing by telecopier or telex.
Each Notice of a Borrowing shall be by telecopier, telex or telephone, confirmed
promptly the same day in writing specifying (A) the requested date of such
Borrowing (which shall be a Business Day), (B) the requested Type and Class of
Advances comprising such Borrowing, (C) the requested aggregate amount of such
Borrowing, (D) the applicable Borrower, and (E) with respect to any Borrowing
consisting of Fixed Rate Advances, the requested Interest Period therefor. The
Agent shall promptly notify each Bank of the applicable interest rate under
Sections 2.06(b) or 2.06(c), as applicable. Each Bank shall (I) in the case of
all Borrowings which are comprised of Tranche A1 Advances or Tranche B1
Advances, before 12:00 p.m. (Paris time) on the date of such Borrowing, and (II)
in the case of all Borrowings which are comprised of Tranche A2 Advances or
Tranche B2 Advances, before 12:00 p.m. (New York time) on the date of such
Borrowing, make available through its Applicable Lending Office to the Agent at
the Agent's Applicable Lending Office, or such other location as the Agent may
specify by notice to the Banks, in same day funds, such Bank's Tranche A1 Share,
Tranche A2 Share, Tranche B1 Share or Tranche B2 Share of such Borrowing. After
the Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Article III, the Agent will promptly make such funds
available to the applicable Borrower at such account as the applicable Borrower
shall specify in writing to Agent.
(b) Continuations; Repayment of U.S. Base Rate Advances. In order
to elect to Continue a Fixed Rate Advance under this Section, the Borrower
desiring a Continuation shall deliver an irrevocable Notice of Continuation to
the Agent at the Agent's office no later than (i) 10:00 a.m. (Paris time) at
least three Business Days in advance of such requested Continuation date in the
case of a Continuation of a Tranche A1 Advance, (ii) 10:00 a.m. (New York time)
at least three Business Days in advance of such requested Continuation date in
the case of a
-19-
Continuation of a Tranche A2 Advance, (iii) 10:00 a.m. (Paris time) at least
five Business Days in advance of such requested Continuation date in the case of
a Continuation of a Tranche B1 Advance or (iv) 10:00 a.m. (New York time) at
least five Business Days in advance of such requested Continuation date in the
case of a Continuation of a Tranche B2 Advance. Each such Notice of Continuation
shall be in writing or by telex, telecopier or telephone, confirmed promptly the
same day in writing specifying (A) the requested Continuation date (which shall
be a Business Day), (B) the amount, Type, and Class of the Advance to be
Continued, and (C) the requested Interest Period. Promptly after receipt of a
Notice of Continuation under this paragraph, the Agent shall provide each Bank
with a copy thereof and notify each Bank of the applicable interest rate under
Sections 2.06(b) or 2.06(c), as applicable. Notwithstanding anything in this
Agreement to the contrary, Continuations of Advances may only be made at the end
of the applicable Interest Period for such Advances. The applicable Borrower
shall pay in full each Borrowing consisting of U.S. Base Rate Advances made
pursuant to Section 2.02(a)(v) above (but excluding Borrowings or Advances
Converted to bear interest at the U.S. Base Rate pursuant to Section 2.02(c) or
2.07(d)) on or before the 10th day following the date of such Borrowing.
(c) Certain Limitations. Notwithstanding anything in paragraphs
(a) and (b) above:
(i) at no time shall there be more than five Interest
Periods for each Tranche applicable to outstanding Fixed Rate Advances;
provided that at no time shall there be more than 12 Interest Periods
applicable to outstanding Fixed Rate Advances;
(ii) except as otherwise specifically provided in Sections
2.02(c) and 2.07(d) herein, each Borrowing shall be comprised entirely
of Fixed Rate Advances;
(iii) (A) if any Bank shall, at least two Business Days
before the date of any requested Borrowing, notify the Agent that the
introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank or other
Governmental Authority asserts that it is unlawful, for such Bank or
any of its Applicable Lending Offices to perform its obligations under
this Agreement to make Fixed Rate Advances of a certain Type, or to
fund or maintain Fixed Rate Advances of a certain Type (each such Bank
an "Affected Bank"), the obligation of the Affected Bank to make or
maintain Fixed Rate Advances of the Type affected for such Borrowing or
for any subsequent Borrowing shall be suspended until the Affected Bank
shall notify the Agent that the circumstances causing such suspension
no longer exist, and the Advance of the Affected Bank comprising such
Borrowing shall be in the case of a Eurodollar Rate Advance, a U.S.
Base Rate Advance and in the case of a Eurocurrency Rate Advance, a
EONIA Rate Advance, (B) each Bank that becomes an Affected Bank agrees
to use commercially reasonable efforts (consistent with its internal
policies and legal and regulatory restrictions) to designate a
different Applicable Lending Office if the making of such designation
would avoid the effect of this paragraph and would not, in the
reasonable judgment of the Affected Bank, be otherwise economically
disadvantageous to the Affected Bank; and (C) if such condition shall
continue for such Bank for 30 days, the Affected Bank may be replaced
in accordance with the procedures in Section 2.13; provided that, if
the Affected Bank is not replaced within 60 days after such initial
30-day period, the right of the Borrowers to select the affected Type
of Fixed Rate Advances for
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any subsequent Borrowing and the obligation of the Banks to make or
maintain the affected Type of Fixed Rate Advances shall be suspended
until (I) the Affected Bank shall notify the Agent that the
circumstances causing such suspension no longer exist or (II) the
Affected Bank is replaced pursuant to Section 2.13;
(iv) if the Agent is unable to determine the Eurodollar
Rate for Eurodollar Rate Advances comprising any requested Borrowing,
the right of the Company to select Eurodollar Rate Advances for such
Borrowing or for any subsequent Borrowing and the obligation of the
Banks to make such Eurodollar Rate Advances shall be suspended until
the Agent shall notify the Company and the Banks that the circumstances
causing such suspension no longer exist, and each Advance comprising
such Borrowing shall be a U.S. Base Rate Advance until receipt of such
notification, whereupon the Company may again select Eurodollar Rate
Advances for Borrowings;
(v) if the Agent is unable to determine the Eurocurrency
Rate for Eurocurrency Rate Advances comprising any requested Borrowing,
the right of the Borrowers to select Eurocurrency Rate Advances for
such Borrowing or for any subsequent Borrowing and the obligation of
the Banks to make such Eurocurrency Rate Advances shall be suspended
until the Agent shall notify the Borrowers and the Banks that the
circumstances causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be an Advance which bears interest at a
rate determined by the Agent to reflect the cost to each Bank of
funding in Euros for the applicable Interest Period plus the Applicable
Margin plus the Additional Cost Rate;
(vi) if the Majority Banks shall (A) in the case of all
Borrowings which are comprised of Tranche A1 Advances or Tranche B1
Advances, before 12:00 p.m. (Paris time) at least two Business Days
before the date of any requested Borrowing, and (B) in the case of all
Borrowings which are comprised of Tranche A2 Advances or Tranche B2
Advances, before 12:00 p.m. (New York time) at least two Business Days
before the date of any requested Borrowing, notify the Agent that the
Eurodollar Rate or Eurocurrency Rate, as the case may be, for Fixed
Rate Advances comprising such Borrowing will not adequately reflect the
cost to such Banks of making or funding their respective Fixed Rate
Advances for such Borrowing, the right of the Borrowers to select
Eurodollar Rate Advances or Eurocurrency Rate Advances, as the case may
be, for such Borrowing or for any subsequent Borrowing and the
obligation of the Banks to make Eurodollar Rate Advances or
Eurocurrency Rate Advances, as the case may be, shall be suspended
until the Agent shall notify the Borrowers and the Banks that the
circumstances causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be a U.S. Base Rate Advance or an
Advance which bears interest at a rate determined by the Agent to
reflect the cost to each Bank of funding in Euros for the applicable
Interest Period plus the Applicable Margin plus the Additional Cost
Rate, respectively; and
(vii) if any Borrower shall fail to select the duration or
Continuation of any Interest Period for any Fixed Rate Advances in
accordance with the provisions contained in the definition of "Interest
Period" in Section 1.01 and paragraphs (a) and (b) above, the Agent
will forthwith so notify such Borrower and the Banks and such Advances
will be
-21-
made available to such Borrower on the date of such Borrowing of the
class and type designated for a one month Interest Period.
Notwithstanding the foregoing, if either U.S. Base Rate Advances or EONIA Rate
Advances are not available because of circumstances substantially similar to
those set forth in subsections (iii), (iv), (v) or (vi) with respect to Fixed
Rate Advances, then the Borrowers shall either (y) Convert the then outstanding
principal amount of the affected Advances to bear interest at a rate determined
by the Agent from time to time to reflect the cost to each Bank of funding such
Advances in Dollars or Euros, as applicable, and pay all interest accrued on the
amount so Converted or (z) repay in full the then outstanding principal amount
of the affected Advances, together with accrued interest thereon. Except as
otherwise provided in (y) above, the right of the Borrowers to select such
affected Advances for such Borrowing or for any subsequent Borrowing and the
obligation of the Banks to make such Advances shall be suspended until the Agent
shall notify the Borrowers and the Banks that the circumstances causing such
suspension no longer exist.
(d) Notices Irrevocable. Each Notice of Borrowing and Notice of
Continuation shall be irrevocable and binding on the Borrower delivering such
notice. Each Borrower shall indemnify each Bank against any loss, out-of-pocket
cost or expense actually incurred by such Bank as a result of any failure to
fulfill on or before the date specified in such Notice of Borrowing or such
Notice of Continuation for such Borrowing the applicable conditions set forth in
Article III, including, without limitation, any loss, cost or expense actually
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Bank to fund the Advance to be made by such Bank as part of
such Borrowing when such Advance, as a result of such failure, is not made on
such date.
(e) Agent Reliance. Unless the Agent shall have received notice
from a Bank before the date of any Borrowing that such Bank will not make
available to the Agent such Bank's Tranche A1 Share of any Tranche A1 Borrowing,
Tranche A2 Share of any Tranche A2 Borrowing, Tranche B1 Share of any Tranche B1
Borrowing, or Tranche B2 Share of any Tranche B2 Borrowing, the Agent may assume
that such Bank has made its Tranche A1 Share, Tranche A2 Share, Tranche B1
Share, or Tranche B2 Share, as the case may be, of such Borrowing available to
the Agent on the date of such Borrowing in accordance with paragraph (a) of this
Section 2.02 and the Agent may, in reliance upon such assumption, make available
to the applicable Borrower on such date a corresponding amount. If and to the
extent that such Bank shall not have so made its Tranche A1 Share, Tranche A2
Share, Tranche B1 Share, or Tranche B2 Share, as the case may be, of such
Borrowing available to the Agent, such Bank and the applicable Borrower
severally agree to immediately repay to the Agent on demand such corresponding
amount, together with interest on such amount, for each day from the date such
amount is made available to the applicable Borrower until the date such amount
is repaid to the Agent, at (i) in the case of the Borrower, the interest rate
applicable on such day to Advances comprising such Borrowing and (ii) in the
case of such Bank (A) for all Borrowings which are comprised of Tranche A1
Advances or Tranche B1 Advances, the EONIA Rate for such day, and (II) for all
Borrowings which are comprised of Tranche A2 Advances or Tranche B2 Advances,
the Federal Funds Rate for such day. If such Bank shall repay to the Agent such
corresponding amount and interest as provided above, such corresponding amount
so repaid shall constitute
-22-
such Bank's Advance as part of such Borrowing for purposes of this Agreement
even though not made on the same day as the other Advances comprising such
Borrowing.
(f) Bank Obligations Several. The failure of any Bank to make the
Advance to be made by it as part of any Borrowing shall not relieve any other
Bank of its obligation, if any, to make its Advance on the date of such
Borrowing. No Bank shall be responsible for the failure of any other Bank to
make the Advance to be made by such other Bank on the date of any Borrowing.
(g) Notes. The indebtedness of the Company to each Bank resulting
from Tranche A2 Advances and the Tranche B2 Advances owing to such Bank shall be
evidenced by the Tranche A2 Note and Tranche B2 Note, respectively, of the
Company payable to the order of such Bank. The indebtedness of each Borrower to
each Bank resulting from the Tranche A1 Advances and the Tranche B1 Advances of
such Borrower owing to such Bank shall be evidenced by the Tranche A1 Note and
the Tranche B1 Note, respectively, of each Borrower payable to the order of such
Bank.
Section 2.03. Fees.
(a) Tranche A1 Commitment Fees. The Company agrees to pay to the
Agent for the account of each Bank a commitment fee payable in Euros on the
average daily amount by which such Bank's Tranche A1 Commitment exceeds such
Bank's outstanding Tranche A1 Advances from the Closing Date until the Maturity
Date applicable to such Advances at the rate of .25% per annum. The fees payable
pursuant to this clause (a) are due quarterly in arrears on the last Business
Day of each March, June, September and December commencing March 31, 2002 and on
the Maturity Date applicable to such Commitments.
(b) Tranche A2 Commitment Fees. The Company agrees to pay to the
Agent for the account of each Bank a commitment fee payable in Dollars on the
average daily amount by which such Bank's Tranche A2 Commitment exceeds such
Bank's outstanding Tranche A2 Advances from the Closing Date until the Maturity
Date applicable to such Advances at the rate of .25% per annum. The fees payable
pursuant to this clause (b) are due quarterly in arrears on the last Business
Day of each March, June, September and December commencing March 31, 2002 and on
the Maturity Date applicable to such Commitments.
(c) Tranche B1 Commitment Fees. The Company agrees to pay to the
Agent for the account of each Bank a commitment fee payable in Euros on the
average daily amount by which such Bank's Tranche B1 Commitment exceeds such
Bank's outstanding Tranche B1 Advances from the Closing Date until the Maturity
Date applicable to such Advances at the rate of .35% per annum. The fees payable
pursuant to this clause (c) are due quarterly in arrears on the last Business
Day of each March, June, September and December commencing March 31, 2002 and on
the Maturity Date applicable to such Commitments.
(d) Tranche B2 Commitment Fees. The Company agrees to pay to the
Agent for the account of each Bank a commitment fee payable in Dollars on the
average daily amount by which such Bank's Tranche B2 Commitment exceeds such
Bank's outstanding Tranche B2 Advances from the Closing Date until the Maturity
Date applicable to such Advances at the rate
-23-
of .35% per annum. The fees payable pursuant to this clause (d) are due
quarterly in arrears on the last Business Day of each March, June, September and
December commencing March 31, 2002 and on the Maturity Date applicable to such
Commitments.
(e) Upfront Fees and Agent's Arrangement Fees. The Company agrees
to pay to the Agent the arrangement fees referenced in the Commitment Letter
dated October 31, 2001 from the Agent to the Borrowers. Such fees shall be fully
earned and due upon execution of this Agreement, but shall not be payable until
the Closing Date. Any fee referred to in the Commitment Letter and required to
be paid under this clause (e) shall be paid exclusive of any value added tax or
any other tax which might be chargeable in connection with that fee. If any
value added tax or other tax is so chargeable with respect to such fee, it shall
be paid by the relevant Borrower at the same time that it pays the relevant fee.
Section 2.04. Reduction of the Commitments. The Borrowers shall
have the right, upon at least fifteen Business Days' irrevocable written notice
to the Agent, to terminate in whole or reduce ratably in part the unused portion
of the Commitments without penalty or payment of any premium; provided that each
partial reduction of the Commitments shall be in the minimum aggregate amount
of 5,000,000 or an integral multiple of 1,000,000 in excess thereof or
$5,000,000 or an integral multiple of $1,000,000 in excess thereof, as the case
may be. Any reduction or termination of the Commitments pursuant to this Section
2.04 shall be permanent, with no obligation of the Banks to reinstate such
Commitments and the commitment fees provided for in Section 2.03 shall
thereafter be computed on the basis of the Commitments, as so reduced.
Section 2.05. Repayment. The Borrowers obligated thereon shall
repay the outstanding principal amount of the Advances on the Maturity Date
applicable to such Advances.
Section 2.06. Interest. Each of the Borrowers shall pay interest on
the unpaid principal amount of each Advance made by each Bank to such Borrower
from the date of such Advance until such principal amount shall be paid in full,
at the following rates per annum and in the Currency in which such Advance is
made:
(a) U.S. Base Rate Advances. If such Advance is a U.S. Base Rate
Advance, a rate per annum equal at all times to the lesser of (i) the Adjusted
U.S. Base Rate in effect from time-to-time and (ii) the Maximum Rate, payable in
arrears on the last Business Day of each calendar quarter and on the date such
U.S. Base Rate Advance shall be paid in full, provided that any amount of
principal which is not paid within five Business Days of when due (whether at
stated maturity, by acceleration or otherwise) shall bear interest from the date
on which such amount is due until such amount is paid in full, payable on
demand, at a rate per annum equal at all times to the lesser of (i) the Adjusted
U.S. Base Rate in effect from time-to-time plus 2% and (ii) the Maximum Rate.
(b) Eurodollar Rate Advances. If such Advance is a Eurodollar Rate
Advance, a rate per annum equal at all times during the Interest Period for such
Advance to the lesser of (i) the Eurodollar Rate for such Interest Period plus
the Applicable Margin and (ii) the Maximum Rate, payable on the last day of such
Interest Period, and, in the case of six-month Interest Periods, on the day
which occurs during such Interest Period three months from the first day of such
Interest
-24-
Period; provided that any amount of principal which is not paid within five
Business Days of when due (whether at stated maturity, by acceleration or
otherwise) shall bear interest from the date on which such amount is due until
such amount is paid in full, payable on demand, at a rate per annum equal at all
times to the lesser of (i) the greater of (A) the Adjusted U.S. Base Rate in
effect from time-to-time plus 2% and (B) the rate required to be paid on such
Advance immediately prior to the date on which such amount became due plus 2%
and (ii) the Maximum Rate.
(c) Eurocurrency Rate Advances. If such Advance is a Eurocurrency
Rate Advance, a rate per annum equal at all times during the Interest Period for
such Advance to the lesser of (i) the Eurocurrency Rate for such Interest Period
plus the Applicable Margin and (ii) the Maximum Rate, payable on the last day of
such Interest Period, and, in the case of six-month Interest Periods, on the day
which occurs during such Interest Period three months from the first day of such
Interest Period; provided that any amount of principal which is not paid within
five Business Days of when due (whether at stated maturity, by acceleration or
otherwise) shall bear interest from the date on which such amount is due until
such amount is paid in full, payable on demand, at a rate per annum equal at all
times to the lesser of (i) the greater of (A) the EONIA Rate in effect from
time-to-time plus 2% and (B) the rate required to be paid on such Advance
immediately prior to the date on which such amount became due plus 2% and (ii)
the Maximum Rate.
(d) EONIA Rate Advances. If such Advance is a EONIA Rate Advance,
a rate per annum equal at all times to the lesser of (i) the EONIA Rate in
effect from time-to-time and (ii) the Maximum Rate, payable in arrears on the
last Business Day of each calendar quarter and on the date such EONIA Rate
Advance shall be paid in full, provided that any amount of principal which is
not paid within five Business Days of when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest from the date on which such
amount is due until such amount is paid in full, payable on demand, at a rate
per annum equal at all times to the lesser of (i) the EONIA Rate in effect from
time-to-time plus 2% and (ii) the Maximum Rate.
(e) Usury Recapture. In the event the rate of interest chargeable
under this Agreement or the Notes at any time (calculated after giving affect to
all items charged which constitute "interest" under applicable laws, including
fees and margin amounts, if applicable) is greater than the Maximum Rate, the
unpaid principal amount of the Notes shall bear interest at the Maximum Rate
until the total amount of interest paid or accrued on the Notes equals the
amount of interest which would have been paid or accrued on the Notes if the
stated rates of interest set forth in this Agreement had at all times been in
effect.
In the event, upon payment in full of the Notes, the total amount of
interest paid or accrued under the terms of this Agreement and the Notes is less
than the total amount of interest which would have been paid or accrued if the
rates of interest set forth in this Agreement had, at all times, been in effect,
then the Borrowers shall, to the extent permitted by applicable law, pay the
Agent for the account of the Banks an amount equal to the difference between (i)
the lesser of (A) the amount of interest which would have been charged on the
Notes if the Maximum Rate had, at all times, been in effect and (B) the amount
of interest which would have accrued on the Notes if the rates of interest set
forth in this Agreement had at all times been in effect and (ii) the amount of
interest actually paid under this Agreement on the Notes.
-25-
In the event the Banks ever receive, collect or apply as interest any
sum in excess of the Maximum Rate, such excess amount shall, to the extent
permitted by law, be applied to the reduction of the principal balance of the
Notes, and if no such principal is then outstanding, such excess or part thereof
remaining shall be paid to the Borrowers.
Section 2.07. Prepayments.
(a) Right to Prepay. The Borrowers shall have no right to prepay
any principal amount of any Advance except as provided in this Section 2.07.
(b) Optional. Any Borrower may elect to prepay any of the Tranche
B Advances owing by it to the Banks, after giving prior written notice of such
election by (i) in the case of Tranche B1 Advances, before 12:00 p.m. (Paris
time), and (ii) in the case of Tranche B2 Advances, before 12:00 p.m. (New York
time) fifteen Business Days before such prepayment date to the Agent stating the
proposed date and aggregate principal amount of such prepayment. If any such
notice is given, the Borrower giving such notice shall prepay such Tranche B
Advances comprising part of the same Tranche B Borrowing in whole or ratably in
part in an aggregate principal amount equal to the amount specified in such
notice, together with accrued interest to the date of such prepayment on the
principal amount prepaid and amounts, if any, required to be paid pursuant to
Section 2.08 as a result of such prepayment being made on such date; provided,
however, that each partial prepayment shall be in an aggregate principal amount
not less than (i) in the case of Tranche B1 Advances 5,000,000 and (ii) in
the case of Tranche B2 Advances, $5,000,000.
(c) Mandatory.
(i) On the date of any reduction of the Commitments
pursuant to Section 2.04, the applicable Borrower agrees to make a
prepayment in respect of the outstanding amount of the applicable
Advances to the extent, if any, that the aggregate unpaid principal
amount of all such Advances exceeds the applicable aggregate
Commitment, as so reduced.
(ii) Each prepayment pursuant to this Section 2.07(c)
shall be accompanied by accrued interest on the amount prepaid to the
date of such prepayment and amounts, if any, required to be paid
pursuant to Section 2.08 as a result of such prepayment being made on
such date.
(d) Illegality. If any Bank shall notify the Agent and the
Borrowers that the introduction of or any change in or in the interpretation of
any law or regulation makes it unlawful, or that any central bank or other
Governmental Authority asserts that it is unlawful for such Bank, its Eurodollar
Lending Office or its Eurocurrency Lending Office to perform its obligations
under this Agreement to make or maintain a Type of Fixed Rate Advances of such
Bank then outstanding hereunder (each such Bank being an "Affected Bank"), (i)
the Borrowers shall, (A) in the case of all Borrowings which are comprised of
Tranche A1 Advances or Tranche B1 Advances, no later than 12:00 p.m. (Paris
time), and (B) in the case of all Borrowings which are comprised of Tranche A2
Advances or Tranche B2 Advances, no later than 12:00 p.m. (New York time), (I)
if not prohibited by law or regulation to maintain such
-26-
Type of Fixed Rate Advances for the duration of the Interest Period, on the last
day of the Interest Period for each outstanding Fixed Rate Advance or (II) if
prohibited by law or regulation to maintain such Type of Fixed Rate Advances for
the duration of the Interest Period, on the second Business Day following its
receipt of such notice, Convert the Fixed Rate Advances of that Type of the
Affected Bank to either (1) in the case of Eurodollar Rate Advances, a single
U.S. Base Rate Advance or (2) in the case of Eurocurrency Rate Advances, a
single EONIA Rate Advance, each in an amount equal to the aggregate principal
amount of the affected Fixed Rate Advances of such Borrowers, and (ii) the
obligation of the Affected Bank to make or maintain the affected Type of Fixed
Rate Advances shall be suspended until the Affected Bank shall notify the Agent
that the circumstances causing such suspension no longer exist. Each Bank which
becomes an Affected Bank agrees to use commercially reasonable efforts
(consistent with its internal policies and subject to legal and regulatory
restrictions) to designate a different Applicable Lending Office if the making
of such designation would avoid the effect of this paragraph and would not, in
the reasonable judgment of such Bank, be otherwise economically disadvantageous
to such Bank. If the condition requiring the Conversion under this paragraph
shall continue for the Affected Bank for 30 days, the Affected Bank may be
replaced in accordance with the procedures in Section 2.13; provided that, if
the Affected Bank is not replaced within 60 days after such initial 30-day
period, (A) all Fixed Rate Advances of the affected Type shall be Converted in
accordance with the procedures described above, and (B) the right of the
Borrowers to select the affected Type of Fixed Rate Advances for any subsequent
Borrowing and the obligation of the Banks to make or maintain the affected Type
of Fixed Rate Advances shall be suspended until (I) the Affected Bank shall
notify the Agent that the circumstances causing such suspension no longer exist
or (II) the Affected Bank is replaced pursuant to Section 2.13. Notwithstanding
the foregoing, if either U.S. Base Rate Advances or EONIA Rate Advances are not
available because of the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful, or that any central
bank or other Governmental Authority asserts that it is unlawful for such Bank
and its Applicable Lending Office to perform its obligations under this
Agreement to make or maintain such Advances, then the Borrowers shall repay in
full the then outstanding principal amount of the affected Advances, together
with accrued interest thereon, and the right of the Borrowers to select such
affected Advances for such Borrowing or for any subsequent Borrowing and the
obligation of the Banks to make such Advances shall be suspended until the Agent
shall notify the Borrowers and the Banks that the circumstances causing such
suspension no longer exist.
(e) Ratable Payments; Effect of Notice. Each payment of any
Advance pursuant to this Section 2.07 or any other provision of this Agreement
shall be made in a manner such that all Advances comprising part of the same
Borrowing are paid in whole or ratably in part. All notices given pursuant to
this Section 2.07 shall be irrevocable and binding upon the Borrowers.
Section 2.08. Funding Losses. If any payment of principal of any
Fixed Rate Advance is made other than on the last day of the Interest Period for
such Advance as a result of any payment pursuant to Section 2.07 or the
acceleration of the maturity of the Notes pursuant to Article VII, such Borrower
shall, within 10 days of any written demand sent by any Bank to such Borrower
through the Agent, pay to the Agent for the account of such Bank any amounts
(without duplication of any other amounts payable in respect of breakage costs)
required to compensate such Bank for any additional losses, out-of-pocket costs
or expenses which it may actually incur as a result of such payment or
nonpayment, including, without limitation, any loss,
-27-
cost or expense actually incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by any Bank to fund or maintain such Advance
(but excluding loss of profits).
Section 2.09. Increased Costs.
(a) Fixed Rate Advances. If, due to either (i) the introduction of
or any change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to any Bank of agreeing to make or making, funding or
maintaining Eurodollar Rate Advances or Eurocurrency Rate Advances (including,
without limitation, (A) additional interest to compensate such Bank for reserve
costs actually incurred by such Bank associated with Eurocurrency Liabilities,
such additional interest to be calculated by subtracting (1) the Eurodollar Rate
or Eurocurrency Rate, as applicable, for the relevant Advance from (2) the rate
obtained by dividing such applicable interest rate for such Advance (excluding
the Applicable Margin) by a percentage equal to one minus the applicable Fixed
Rate Reserve Percentage of such Bank for such Interest Period and (B) any
Applicable Mandatory Costs), then the applicable Borrowers shall from
time-to-time, upon demand by such Bank (with a copy of such demand to the
Agent), immediately pay to the Agent for the account of such Bank additional
amounts (without duplication of other amounts payable in respect of increased
costs) sufficient to compensate such Bank for such increased cost; provided,
however, that, before making any such demand, each Bank agrees to use
commercially reasonable efforts (consistent with its internal policy and subject
to legal and regulatory restrictions) to designate a different Applicable
Lending Office if the making of such a designation would avoid the need for, or
reduce the amount of, such increased cost and would not, in the reasonable
judgment of such Bank, be otherwise economically disadvantageous to such Bank
(except that no Bank shall be required to redesignate its Applicable Lending
Office to avoid the incurrence of increased costs associated with additional
interest required to be paid by the Borrowers to any Bank in connection with
reserve costs attributable to Eurocurrency Liabilities). A certificate shall be
submitted to the Borrowers and the Agent by such Bank (a) indicating the amount
of such increased cost and detailing the calculation of such cost, (b) stating
that such Bank is generally charging such amounts to other customers similarly
situated with the Borrowers, and (c) that all such costs are being charged
within 90 days of the date the Bank learned of such costs, such certificate to
be conclusive and binding for all purposes, absent manifest error.
(b) Capital Adequacy. If any Bank determines in good faith that
compliance with any generally applicable law or regulation or any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law) implemented or effective after the date of this
Agreement increases or would increase the amount of capital required or expected
to be maintained by such Bank or any corporation controlling such Bank and that
the amount of such capital is increased by or based upon the existence of such
Bank's commitment to lend and other commitments of this type, then, upon 30 days
prior written notice by such Bank (with a copy of any such demand to the Agent),
the Borrowers shall immediately pay to the Agent for the account of such Bank as
the case may be, from time-to-time as specified by such Bank, additional amounts
(without duplication of any other amounts payable in respect of increased costs)
sufficient to compensate such Bank, in light of such circumstances, with respect
to such Bank, to the extent that such Bank reasonably determines such increase
in capital to be
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allocable to the existence of such Bank's commitment to lend under this
Agreement. A certificate shall be submitted to the Borrowers and the Agent by
such Bank (a) indicating the amount of such capital adequacy costs and detailing
the calculation of such costs, (b) stating that such Bank is generally charging
such amounts to other customers similarly situated with the Borrowers, and (c)
certifying that all such costs are being charged within 90 days of the date the
Bank learned of such costs, such certificate to be conclusive and binding for
all purposes, absent manifest error.
(c) Special Provisions regarding Applicable Mandatory Costs. Each
Bank shall supply any information required by the Agent for the purpose of
calculating its Additional Cost Rate. In particular, but without limitation,
each Bank shall supply the following information in writing on or prior to the
date on which it becomes a Bank: (a) its jurisdiction of incorporation and the
jurisdiction of its Applicable Lending Offices; and (b) any other information
that the Agent may reasonably require for such purpose. Each Bank shall promptly
notify the Agent in writing of any change to the information provided by it
pursuant to this paragraph. The percentages or rates of charge of each Bank for
the purpose of determining "A" in the definition of "Additional Cost Rate" shall
be determined by the Agent based upon the information supplied to it pursuant
hereto and on the assumption that, unless a Bank notifies the Agent to the
contrary, each Bank's obligations in relation to the Fees Regulations are the
same as those of a typical bank from its jurisdiction of incorporation with an
Applicable Lending Office in the same jurisdiction as its Applicable Lending
Office. The Agent shall have no liability to any person if such determination
results in an Additional Cost Rate which over or under compensates any Bank and
shall be entitled to assume that the information provided by any Bank pursuant
hereto is true and correct in all respects. The Agent shall distribute the
additional amounts received as a result of the Applicable Mandatory Cost to the
Banks on the basis of the Additional Cost Rate for each Bank based on the
information provided by each Bank pursuant hereto. Any determination by the
Agent pursuant to this Agreement in relation to a formula, the Applicable
Mandatory Cost, an Additional Cost Rate or any amount payable to a Bank shall,
in the absence of manifest error, be conclusive and binding. The Agent may from
time to time, after consultation with the Borrower and the Banks, determine and
notify to all parties hereto any amendments which are required to be made to
this Agreement in order to comply with any change in law, regulation or any
requirements from time to time imposed by the Bank of England, the Financial
Services Authority or the European Central Bank (or, in any case, any other
Governmental Authority which replaces all or any of its functions) and any such
determination shall, in the absence of manifest error, be conclusive and binding
on all parties.
Section 2.10. Payments and Computations.
(a) Payment Procedures. The Borrowers shall make each payment
under this Agreement and under their respective Notes not later than 12:00 p.m.
(New York time) on the day when due in Dollars with respect to Tranche A2
Advances and Tranche B2 Advances, and (ii) not later than 12:00 p.m. (Paris,
France time) on the day when due in Euros with respect to Tranche A1 Advances
and Tranche B1 Advances, and in each case to the Agent at the location referred
to in the Notes (or such other location as the Agent shall designate in writing
to the Borrowers) in same day funds. The Agent will promptly thereafter, and in
any event prior to the close of business on the day any timely payment is made,
cause to be distributed like funds relating to the payment of principal,
interest or fees ratably (other than amounts payable solely to
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the Agent, or a specific Bank pursuant to Section 2.03(e), 2.08, 2.09, or 2.11,
but after taking into account payments effected pursuant to Section 10.04) (i)
before the acceleration of the Advances pursuant to Section 7.02 or 7.03, (A) in
the case of payments in respect of Tranche A1 Advances, Tranche A2 Advances,
Tranche B1 Advances and Tranche B2 Advances, in accordance with each Bank's
Tranche A1 Share, Tranche A2 Share, Tranche B1 Share and Tranche B2 Share, as
applicable and (ii) after the acceleration of the Advances pursuant to Section
7.02 or 7.03, in accordance with each Bank's Pro Rata Share to the Banks for the
account of their respective Applicable Lending Offices, and like funds relating
to the payment of any other amount payable to any Bank to such Bank for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement.
(b) Computations. All computations of interest based on the U.S.
Base Rate or the EONIA Rate shall be made by the Agent on the basis of a year of
365 or 366 days, as the case may be, and all computations of interest based on
the Eurodollar Rate, the Eurocurrency Rate, the Federal Funds Rate, and of fees
shall be made by the Agent, on the basis of a year of 360 days, in each case for
the actual number of days (including the first day, but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the Agent of an interest rate shall be conclusive and binding
for all purposes, absent manifest error.
(c) Non-Business Day Payments. Whenever any payment shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of payment of interest or fees, as the case
may be.
(d) Agent Reliance. Unless the Agent shall have received written
notice from a Borrower prior to the date on which any payment is due to the
Banks that such Borrower will not make such payment in full, the Agent may
assume that such Borrower has made such payment in full to the Agent on such
date and the Agent may, in reliance upon such assumption, cause to be
distributed to each Bank on such date an amount equal to the amount then due to
such Bank. If and to the extent such Borrower shall not have so made such
payment in full to the Agent, each Bank shall repay to the Agent forthwith on
demand such amount distributed to such Bank, together with interest, for each
day from the date such amount is distributed to such Bank until the date such
Bank repays such amount to the Agent, at the Federal Funds Rate for such day.
Section 2.11. Taxes.
(a) No Deduction for Certain Taxes. Any and all payments by the
Borrowers shall be made, in accordance with Section 2.10, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings and all liabilities with respect thereto,
excluding (i) in the case of each Bank and the Agent, taxes imposed on its
income, and franchise taxes imposed on it by the United States or any political
subdivision thereof, the jurisdiction under the laws of which such Bank or the
Agent (as the case may be) is organized or any political subdivision of the
jurisdiction and (ii) in the case of each Bank, taxes imposed by the
jurisdiction of such Bank's Applicable Lending Office or any political
subdivision of such jurisdiction (all such nonexcluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If any Borrower shall be
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required by law to deduct any Taxes from or in respect of any sum payable to any
Bank or the Agent, (A) the sum payable shall be increased as may be necessary so
that, after making all required deductions, such Bank or the Agent (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made; provided, however, that if such Borrower's obligation to
deduct or withhold Taxes is caused solely by such Bank's or the Agent's failure
to provide the forms described in paragraph (e) of this Section 2.11 and such
Bank or the Agent could have provided such forms, no such increase shall be
required; (B) such Borrower shall make such deductions; and (C) such Borrower
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) Other Taxes. In addition, the Borrowers agree to pay any
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the Notes, or the other Credit Documents (hereinafter referred to as
"Other Taxes").
(c) Indemnification. Each of the Borrowers indemnifies each Bank
and the Agent for the full amount of Taxes or Other Taxes paid by such Bank or
the Agent (as the case may be) and any liability (including interest and
expenses) arising therefrom or with respect thereto, in either case,
attributable to such Borrower. Each payment required to be made by the Borrowers
in respect of this indemnification shall be made to the Agent for the benefit of
any party claiming such indemnification within 30 days from the date the
Borrowers receive written demand detailing the calculation of such amounts
therefor from the Agent on behalf of itself as Agent or any such Bank. If any
Bank or the Agent receives a refund or credit in respect of any taxes paid by
any Borrower under this paragraph (c), such Bank or the Agent, as the case may
be, shall promptly pay to such Borrower such Borrower's share of such refund or
credit.
(d) Evidence of Tax Payments. Each of the Borrowers will pay prior
to delinquency all Taxes payable in respect of any payment. Upon the request of
the applicable Bank, the Borrower making such payment will furnish to the Agent,
at its address referred to in Section 10.02, the original or a certified copy of
a receipt evidencing payment of such Taxes.
(e) Foreign Bank Withholding Exemption.
(i) Each Bank that is not incorporated under the laws of
the United States of America or a state thereof agrees that it will
deliver to the Borrowers and the Agent on the date of this Agreement or
upon, and as a condition to, the effectiveness of any Assignment and
Acceptance (i) two duly completed copies of United States Internal
Revenue Service Form W-8ECI, W-8BEN, W-8EXP or W-8IMY or successor
applicable form, as the case may be, certifying in each case that such
Bank is entitled to receive payments under this Agreement and the Notes
payable to it, without deduction or withholding of any United States
federal income taxes, (ii) if applicable, an Internal Revenue Service
Form W-8ECI, W-8BEN, W-8EXP or W-9 or successor applicable form, as the
case may be, to establish an exemption from United States backup
withholding tax, and (iii) any other governmental forms which are
necessary or required under an applicable tax treaty or otherwise by
law to reduce or eliminate any withholding tax, which have been
reasonably requested by the Borrower. Each Bank which delivers
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to the Borrowers and the Agent a Form W-8ECI, W-8BEN, W-8EXP, W-8IMY or
W-9 pursuant to the next preceding sentence further undertakes to
deliver to the Borrowers and the Agent two further copies of Form
W-8ECI, W-8BEN, W-8EXP, W-8IMY or W-9, or successor applicable forms,
or other manner of certification, as the case may be, on or before the
date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrowers and the Agent, and such
extensions or renewals thereof as may reasonably be requested by the
Borrowers and the Agent certifying in the case of a Form W-8ECI,
W-8BEN, W-8EXP, or W-8IMY that such Bank is entitled to receive
payments under this Agreement without deduction or withholding of any
United States federal income taxes. If an event (including without
limitation any change in treaty, law or regulation) has occurred prior
to the date on which any delivery required by the preceding sentence
would otherwise be required which renders all such forms inapplicable
or which would prevent any Bank from duly completing and delivering any
such form with respect to it and such Bank advises the Borrowers and
the Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax, and in
the case of a Form W-8 or W-9, establishing an exemption from United
States backup withholding tax, such Bank shall not be required to
deliver such forms. The Borrowers may withhold tax at the rate and in
the manner required by the laws of the United States with respect to
payments made to a Bank failing to timely provide the requisite
Internal Revenue Service forms.
(ii) Each Bank that is not incorporated under the laws of
the Republic of France or any province thereof agrees that it will
deliver to the Borrowers and the Agent on the date of this Agreement or
upon, and as a condition to, the effectiveness of any Assignment and
Acceptance such governmental forms which may be necessary, appropriate
or required under the applicable tax treaty or otherwise by law to
reduce or eliminate any withholding tax imposed by the Republic of
France or any political subdivision thereof ("French Withholding
Taxes"). Each Bank which delivers to the Borrowers and the Agent any
such governmental form pursuant to the next preceding sentence further
undertakes to deliver to the Borrowers and the Agent two (2) further
copies of said governmental forms or successor forms, or other manner
of certification as the case may be, on or before the date that any
such form expires or becomes obsolete or after the occurrence of any
event requiring a change in the most recent form previously delivered
by it to the Borrowers and the Agent, and such extensions or renewals
thereof as may be reasonably requested by the Borrowers or the Agent
certifying that such Bank is entitled to receive payments under this
agreement without deduction or withholding of any French Withholding
Taxes. If an event (including, without limitation, any change in
treaty, law, or regulation) has occurred prior to the date on which any
delivery is required by the preceding sentence and would otherwise be
required which render any such forms inapplicable or which would
prevent any Bank from duly completing and delivering any such form with
respect to it and such Bank advises the Borrowers and the Agent that it
is not capable of receiving payments without any deduction or
withholding of French Withholding Taxes, such Bank shall not be
required to deliver such forms. The Borrowers may withhold tax at the
rate and in the matter required by the laws of the Republic of France
with respect to payments made to a Bank failing to timely provide the
requisite governmental forms. The Borrowers agree to use reasonable
efforts to notify
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any Bank upon any such Borrower becoming aware of any change in the
laws of the Republic of France or any tax treaty which would cause such
Bank to not be capable of receiving payments of interest without French
Withholding Taxes.
(f) Repayment under Certain Circumstances. If any
Borrower is required by any law or regulation to make any deduction or
withholding from any sum payable by it under this Agreement and is
prevented by law from fulfilling the related gross-up obligation, upon
written notice to the relevant Borrower from the Agent (which shall
give such notice if, and only if, so requested by any Bank) the
relevant Advances shall be repaid within 180 days of the date such
notice is received by the relevant Borrower together with accrued
interest and any amounts owing under Section 2.08.
Section 2.12. Sharing of Payments, Etc. If any Bank shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off or otherwise) on account of the Advances made by it in excess of its
Pro Rata Share, Tranche A1 Share, Tranche A2 Share, Tranche B1 Share, or Tranche
B2 Share, as applicable, of payments on account of the Advances obtained by all
the Banks, such Bank shall notify the Agent and forthwith purchase from the
other Banks such participations in the Advances made or held by them as shall be
necessary to cause such purchasing Bank to share the excess payment ratably in
accordance with the requirements of this Agreement with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Bank, such purchase from each Bank shall be
rescinded and such Bank shall repay to the purchasing Bank the purchase price to
the extent of such Bank's ratable share (according to the proportion of (a) the
amount of the participation sold by such Bank to the purchasing Bank as a result
of such excess payment to (b) the total amount of such excess payment) of such
recovery, together with an amount equal to such Bank's ratable share (according
to the proportion of (a) the amount of such Bank's required repayment to the
purchasing Bank to (b) the total amount of all such required repayments to the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. Each Borrower
agrees that any Bank so purchasing a participation from another Bank pursuant to
this Section 2.12 may, to the fullest extent permitted by law, unless and until
rescinded as provided above, exercise all its rights of payment (including the
right of set-off) with respect to such participation as fully as if such Bank
were the direct creditor of such Borrower in the amount of such participation.
Section 2.13. Bank Replacement. The Borrowers shall be permitted to
replace with an Eligible Assignee any Bank which (a) makes an assertion of the
type described in Section 2.02(c)(iii) or requests reimbursement for amounts
owing pursuant to Section 2.09 (either for its own account or for the account of
any of its participants), (b) is affected in the manner described in Section
2.07(d), (c) requires any Borrower to pay Taxes in respect of such Bank or (d)
fails to make any Advance requested by it if the Majority Banks have made the
Advances requested of them pursuant to the same Notice of Borrowing; provided
that (i) such replacement does not conflict with any Legal Requirement, (ii) no
Default or Event of Default shall have occurred and be continuing at the time of
such replacement, (iii) prior to any such replacement, such Bank being replaced
shall not have eliminated the continued need for repayment of amounts owing
pursuant to Section 2.02(c)(iii); and (iv) the Company shall repay (or cause to
be repaid) or the Eligible Assignee shall pay to the Bank being replaced, the
amount of the Obligations owing to such Bank on the date of replacement
(including any amounts owing under Section 2.02(c)(iii)).
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ARTICLE III
CONDITIONS OF LENDING
Section 3.01. Conditions Precedent to Initial Advances. The
obligation of each Bank to make its initial Advances as part of the initial
Borrowings is subject to the conditions precedent that:
(a) Documentation. On or before the day on which the initial
Borrowing is made, the Agent and the Banks shall have received the following,
each dated on or before such day, duly executed by all the parties thereto, in
form and substance satisfactory to the Agent and the Banks:
(i) this Agreement and the other Credit Documents and all
attached Exhibits and Schedules and the Notes payable to the order of
the Banks, respectively;
(ii) certificates from the appropriate Governmental
Authority certifying as to the good standing, existence and authority
of the Company in all jurisdictions where the Company is organized or
does business;
(iii) certificates from a Responsible Officer of each of
the Borrowers stating that (A) all representations and warranties of
such Borrower set forth in this Agreement are true and correct in all
material respects; (B) no Default has occurred and is continuing; and
(C) the conditions in this Section 3.01 have been met;
(iv) copies, certified as of the date of this Agreement by
a Responsible Officer of the appropriate Person of (A) the resolutions
of the Board of Directors of the Company approving this Agreement, the
Notes, and the other Credit Documents, (B) the articles or certificate
(as applicable) of incorporation and bylaws of the Company, (C) the
extrait K-bis and the statuts for SARL and any other documents
authorizing the transactions contemplated by the Credit Documents, and
(D) all other documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement, the
Notes, and the other Credit Documents;
(v) certificates of a Responsible Officer of each of the
Borrowers certifying the names and true signatures of officers of the
Borrowers authorized to sign this Agreement, the Notes, Notices of
Borrowing and the other Credit Documents;
(vi) a favorable opinion of John W. Rumely, General
Counsel to the Company, substantially in the form of the attached
Exhibit F-1;
(vii) a favorable opinion of UGGC & Associes, counsel to
SARL, substantially in the form of the attached Exhibit F-2;
(viii) a favorable opinion of Bracewell & Patterson, L.L.P.,
counsel to the Agent, substantially in the form of the attached Exhibit
F-3; and
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(ix) such other documents, governmental certificates,
agreements, lien searches as the Agent and the Banks may reasonably
request.
(b) Payment of Fees. On the Closing Date, the Borrowers shall have
paid the fees required to be paid to the Agent and the Banks and all costs and
expenses which have been invoiced and are payable pursuant to Section 10.04.
(c) Delivery of Financial Statements. The Agent and the Banks
shall have received true and correct copies of (i) the Financial Statements,
(ii) the Interim Financial Statements, (iii) the other financial statements
referred to in Section 4.05 and (iv) the Consolidated annual business and
financial plan, including without limitation, financial projections, of the
Borrower and its Subsidiaries for fiscal years 2001, 2002, and 2003, all in
reasonable detail.
(d) No Default. No Default or Event of Default shall have occurred
and be continuing or would result from such Advance or from the application of
the proceeds therefrom.
(e) Representations and Warranties. The representations and
warranties contained in Article IV hereof and in each other Credit Document
shall be true and correct in all material respects on and as of the Closing Date
before and after giving effect to the initial Advances and to the application of
the proceeds from such Advances as though made on and as of such date.
(f) No Material Adverse Change. No event or events which,
individually or in the aggregate, has had or is reasonably likely to cause a
Material Adverse Change shall have occurred.
(g) Termination of Existing Credit Agreement. The Agent and the
Banks shall have received sufficient evidence indicating that contemporaneously
with the making of the initial Advances, the obligations of the Borrowers under
the Existing Credit Agreement will be repaid with the proceeds of such Advances
and thereafter all obligations of the Borrowers and the lenders under the
Existing Credit Agreement shall be terminated (including, without limitation,
any obligations of any Subsidiary of the Borrower in respect of guaranties,
security agreements executed in connection with such Existing Credit Agreement
but excluding any obligations which expressly survive the repayment of the
amounts owing under the Existing Credit Agreement).
Section 3.02. Conditions Precedent to Each Borrowing. The
obligation of each Bank to make an Advance on the occasion of each Borrowing
(including the initial Borrowing) shall be subject to the further conditions
precedent that on the date of such Borrowing, the following statements shall be
true (and each of the giving of the applicable Notice of Borrowing or Notice of
Continuation and the acceptance by the Borrowers of the proceeds of such Advance
shall constitute a representation and warranty by the Borrowers that on the date
of such Advance such statements are true):
(a) the representations and warranties contained in Article IV
(except for the representations and warranties set forth in clauses (a) through
(h) of Section 4.05, Section 4.07, and Section 4.15, which representations and
warranties shall only apply to the initial Advance and the representation and
warranty contained in Section 4.05(i) which shall apply to all Advances except
for Advances which are made as part of a Continuation of any existing
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Advance) and in each other Credit Document are correct in all material respects
on and as of the date of such Advance before and after giving effect to such
Advance and to the application of the proceeds from such Advance as though made
on and as of such date; and
(b) no Default or Event of Default has occurred and is continuing
or would result from such Advance or from the application of the proceeds
therefrom.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrowers represent and warrant, as of the date of this Agreement,
as follows:
Section 4.01. Corporate Existence; Subsidiaries. Each of the
Borrowers is a corporation duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation and in good
standing and qualified to do business in each jurisdiction where its ownership
or lease of property or conduct of its business requires such qualification and
where a failure to be qualified could reasonably be expected to cause a Material
Adverse Change.
Section 4.02. Corporate Power. The execution, delivery, and
performance by the Borrowers of this Agreement, the Notes, and the other Credit
Documents to which each is a party and the consummation of the transactions
contemplated hereby and thereby (a) are within such Borrower's corporate powers,
(b) have been duly authorized by all necessary corporate action, (c) do not
contravene (i) such Borrower's articles or certificate of incorporation or
statuts (as applicable) or bylaws or (ii) any law or any contractual restriction
binding on or affecting such Borrower, and (d) will not result in or require the
creation or imposition of any Lien prohibited by this Agreement. At the time of
each Advance, such Advance and the use of the proceeds of such Advance will be
within such Borrower's corporate powers, will have been duly authorized by all
necessary corporate action, will not contravene (i) such Borrower's articles or
certificate of incorporation or statuts (as applicable) or bylaws or (ii) any
law or any contractual restriction binding on or affecting such Borrower and
will not result in or require the creation or imposition of any Lien prohibited
by this Agreement.
Section 4.03. Authorization and Approvals. No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority is required for the due execution, delivery and performance by the
Borrowers of this Agreement, the Notes, or the other Credit Documents to which
the Borrowers are a party or the consummation of the transactions contemplated
thereby, other than those that have been duly obtained. At the time of each
Advance, no authorization or approval or other action by, and no notice to or
filing with, any Governmental Authority will be required for such Advance or the
use of the proceeds of such Advance.
Section 4.04. Enforceable Obligations. This Agreement, the Notes,
and the other Credit Documents to which the Borrowers are a party have been duly
executed and delivered by the Borrowers. Each Credit Document to which the
Borrowers are a party is the legal, valid, and binding obligation of the
Borrowers and is enforceable against the Borrowers in accordance with
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its terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium, or similar law affecting
creditors' rights generally.
Section 4.05. Financial Statements.
(a) The audited consolidated balance sheet of the Company as at
December 31, 2000, and the related audited consolidated statements of income,
changes in owners' equity and cash flows of the Company for the fiscal year then
ended, copies of which have been furnished to the Banks, and the unaudited
consolidated balance sheet of the Company as at September 30, 2001, and the
related unaudited consolidated statements of income, changes in owners' equity
and cash flows of the Company for the nine months then ended, duly certified by
an authorized financial officer of the Company, copies of which have been
furnished to the Banks, fairly present, subject to the assumptions set forth
therein and, in the case of said balance sheet as at September 30, 2001 and said
statements of income, changes in owners' equity and cash flows for the nine
months then ended, subject to year-end audit adjustments, the consolidated
financial condition of the Company as at such dates and the consolidated result
of the operations of the Company for the periods ended on such dates, and such
balance sheet and statements of income, changes in owners' equity and cash flows
were prepared in accordance with GAAP.
(b) The unaudited, unconsolidated balance sheet of SARL as at
December 31, 2000, and the related unaudited, unconsolidated statement of income
for SARL for the fiscal year then ended, copies of which have been furnished to
the Banks, and the unaudited, unconsolidated balance sheet of SARL as at
September 30, 2001, and the related unaudited, unconsolidated statement of
income of SARL for the nine months then ended, duly certified by an authorized
financial officer of the Company, copies of which have been furnished to the
Banks, fairly present, subject to the assumptions set forth therein, the
financial condition of SARL as at such dates and the results of the operations
of SARL for the periods ended on such dates, and such balance sheet and
statements of income were prepared in accordance with GAAP.
(c) The unaudited, combined, unconsolidated balance sheet of
Papeteries de Mauduit S.A.S. and PDM Industries S.N.C. as at December 31, 2000,
and the related unaudited, combined, unconsolidated statement of income for
Papeteries de Mauduit S.A.S. and PDM Industries S.N.C. for the fiscal year then
ended, copies of which have been furnished to the Banks, and the unaudited,
combined, unconsolidated balance sheet of Papeteries de Mauduit S.A.S. and PDM
Industries S.N.C. as at September 30, 2001, and the related unaudited, combined,
unconsolidated statement of income of Papeteries de Mauduit S.A.S. and PDM
Industries S.N.C. for the nine months then ended, duly certified by an
authorized financial officer of the Company, copies of which have been furnished
to the Banks, fairly present, subject to the assumptions set forth therein, the
financial condition of Papeteries de Mauduit S.A.S. and PDM Industries S.N.C. as
at such dates and the results of the operations of Papeteries de Mauduit S.A.S.
and PDM Industries S.N.C. for the periods ended on such dates, and such balance
sheet and statements of income were prepared in accordance with GAAP.
(d) The unaudited, combined, unconsolidated balance sheet of
Papeteries de Malaucene S.A.S. and Malaucene Industries S.N.C. as at December
31, 2000, and the related unaudited, combined, unconsolidated statement of
income for Papeteries de Malaucene S.A.S. and Malaucene Industries S.N.C. for
the fiscal year then ended, copies of which have been
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furnished to the Banks, and the unaudited, combined, unconsolidated balance
sheet of Papeteries de Malaucene S.A.S. and Malaucene Industries S.N.C. as at
September 30, 2001, and the related unaudited, combined, unconsolidated
statement of income of Papeteries de Malaucene S.A.S. and Malaucene Industries
S.N.C. for the nine months then ended, duly certified by an authorized financial
officer of the Company, copies of which have been furnished to the Banks, fairly
present, subject to the assumptions set forth therein, the financial condition
of Papeteries de Malaucene S.A.S. and Malaucene Industries S.N.C. as at such
dates and the results of the operations of Papeteries de Malaucene S.A.S. and
Malaucene Industries S.N.C. for the periods ended on such dates, and such
balance sheet and statements of income were prepared in accordance with GAAP.
(e) The unaudited, unconsolidated balance sheet of LTR Industries
S.A. as at December 31, 2000, and the related unaudited, unconsolidated
statement of income for LTR Industries S.A. for the fiscal year then ended,
copies of which have been furnished to the Banks, and the unaudited,
unconsolidated balance sheet of LTR Industries S.A. as at September 30, 2001,
and the related unaudited, unconsolidated statement of income of LTR Industries
S.A. for the nine months then ended, duly certified by an authorized financial
officer of the Company, copies of which have been furnished to the Banks, fairly
present, subject to the assumptions set forth therein, the financial condition
of LTR Industries S.A. as at such dates and the results of the operations of LTR
Industries S.A. for the periods ended on such dates, and such balance sheet and
statements of income were prepared in accordance with GAAP.
(f) The unaudited, unconsolidated balance sheet of
Schweitzer-Mauduit Spain, S.L. as at December 31, 2000, and the related
unaudited, unconsolidated statement of income for Schweitzer-Mauduit Spain, S.L.
for the fiscal year then ended, copies of which have been furnished to the
Banks, and the unaudited, unconsolidated balance sheet of Schweitzer-Mauduit
Spain, S.L. as at September 30, 2001, and the related unaudited, unconsolidated
statement of income of Schweitzer-Mauduit Spain, S.L. for the nine months then
ended, duly certified by an authorized financial officer of the Company, copies
of which have been furnished to the Banks, fairly present, subject to the
assumptions set forth therein, the financial condition of Schweitzer-Mauduit
Spain, S.L. as at such dates and the results of the operations of
Schweitzer-Mauduit Spain, S.L. for the periods ended on such dates, and such
balance sheet and statements of income were prepared in accordance with GAAP.
(g) The unaudited, unconsolidated balance sheet of
Schweitzer-Mauduit do Brasil S.A. as at December 31, 2000, and the related
unaudited, unconsolidated statement of income for Schweitzer-Mauduit do Brasil
S.A. for the fiscal year then ended, copies of which have been furnished to the
Banks, and the unaudited, unconsolidated balance sheet of Schweitzer-Mauduit do
Brasil S.A. as at September 30, 2001, and the related unaudited, unconsolidated
statement of income of Schweitzer-Mauduit do Brasil S.A. for the nine months
then ended, duly certified by an authorized financial officer of the Company,
copies of which have been furnished to the Banks, fairly present, subject to the
assumptions set forth therein, the financial condition of Schweitzer-Mauduit do
Brasil S.A. as at such dates and the results of the operations of
Schweitzer-Mauduit do Brasil S.A. for the periods ended on such dates, and such
balance sheet and statements of income were prepared in accordance with GAAP.
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(h) The unaudited, combined, unconsolidated balance sheet of
Papeteries de Saint-Girons S.A.S. and Saint-Girons Industries S.N.C. as at
December 31, 2000, and the related unaudited, combined, unconsolidated statement
of income for Papeteries de Saint-Girons S.A.S. and Saint-Girons Industries
S.N.C. for the fiscal year then ended, copies of which have been furnished to
the Banks, and the unaudited, combined, unconsolidated balance sheet of
Papeteries de Saint-Girons S.A.S. and Saint-Girons Industries S.N.C. as at
September 30, 2001, and the related unaudited, combined, unconsolidated
statement of income of Papeteries de Saint-Girons S.A.S. and Saint-Girons
Industries S.N.C. for the nine months then ended, duly certified by an
authorized financial officer of the Company, copies of which have been furnished
to the Banks, fairly present, subject to the assumptions set forth therein, the
financial condition of Papeteries de Saint-Girons S.A.S. and Saint-Girons
Industries S.N.C. as at such dates and the results of the operations of
Papeteries de Saint-Girons S.A.S. and Saint-Girons Industries S.N.C. for the
periods ended on such dates, and such balance sheet and statements of income
were prepared in accordance with GAAP.
(i) Since September 30, 2001, no Material Adverse Change has
occurred.
Section 4.06. True and Complete Disclosure. (a) The Company's
annual report on Form 10-K most recently filed with the SEC and the Company's
quarterly report on Form 10-Q most recently filed with the SEC, copies of which
have been furnished by the Company to the Agent and the Banks, did not, as of
the respective dates such Form 10-K and Form 10-Q were filed with the SEC,
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading and (b) from the date of filing of the
Company's most recent quarterly or annual report on Form 10-Q or Form 10-K, no
event or condition exists or has occurred which has required or would require
the Company to file a current report on Form 8-K pursuant to the Securities
Exchange Act of 1934, as amended, except for any such event or condition which
has been disclosed in writing to the Banks by delivery to the Banks of a Form
8-K.
Section 4.07. Litigation. Except as set forth in the attached
Schedule 4.07, to the best of the knowledge of the Borrowers, there is no
pending or threatened action or proceeding affecting any of the Borrowers or any
Material Subsidiary before any court, Governmental Authority or arbitrator,
which could reasonably be expected to cause a Material Adverse Change or which
purports to affect the legality, validity, binding effect or enforceability of
this Agreement, any Note, or any other Credit Document. Additionally, to the
best knowledge of the Borrowers, there is no pending or threatened action or
proceeding instituted against any of the Borrowers or the Material Subsidiaries
which seeks to adjudicate any of the Borrowers or the Material Subsidiaries as
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or for any substantial part
of its property.
Section 4.08. Use of Proceeds. The proceeds of the Advances will be
used by the Borrowers for the purposes described in Section 5.08. None of the
Borrowers is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the
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meaning of Regulation U). No proceeds of any Advance will be used to purchase or
carry any margin stock in violation of Regulation T, U or X.
Section 4.09. Investment Company Act. None of the Borrowers is an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
Section 4.10. Taxes. All federal and all material state, local and
foreign tax returns, reports and statements required to be filed (after giving
effect to any extension granted in the time for filing) by the Borrowers or any
member of the Controlled Group (hereafter collectively called the "Tax Group")
have been filed with the appropriate governmental agencies in all jurisdictions
in which such returns, reports and statements are required to be filed, and all
taxes (which are material in amount) and other impositions due and payable have
been timely paid prior to the date on which any fine, penalty, interest, late
charge or loss may be added thereto for non-payment thereof except where
contested in good faith and by appropriate proceedings and after providing
adequate reserves therefor in accordance with GAAP.
Section 4.11. Pension Plans. No Termination Event has occurred with
respect to any Plan, and each Plan has complied with and been administered in
all material respects in accordance with applicable provisions of ERISA and the
Code. No material "accumulated funding deficiency" (as defined in Section 302 of
ERISA) has occurred and there has been no excise tax imposed under Section 4971
of the Code. To the knowledge of any Responsible Officer of each Borrower, no
Reportable Event has occurred with respect to any Multiemployer Plan, and each
Multiemployer Plan has complied with and been administered in all material
respects with applicable provisions of ERISA and the Code. The present value of
all benefits vested under each Plan (based on the assumptions used to fund such
Plan) did not, as of the last annual valuation date applicable thereto, exceed
the value of the assets of such Plan allocable to such vested benefits in any
amount that would reasonably be expected to cause a Material Adverse Change.
None of the Borrowers nor any member of the Controlled Group has had a complete
or partial withdrawal from any Multiemployer Plan for which there is any
material withdrawal liability. As of the most recent valuation date applicable
thereto, none of the Borrowers nor any member of the Controlled Group has
received notice that any Multiemployer Plan is insolvent or in reorganization.
Based upon GAAP existing as of the date of this Agreement and current factual
circumstances, none of the Borrowers has any reason to believe that the annual
cost during the term of this Agreement to such Borrower or any of its
Subsidiaries for post-retirement benefits to be provided to the current and
former employees of the Borrower or any of its Subsidiaries under welfare
benefit plans (as defined in Section 3(1) of ERISA) could, in the aggregate,
reasonably be expected to cause a Material Adverse Change.
Section 4.12. Condition of Property; Casualties. The material
Properties used or to be used in the continuing operations of the Borrowers and
each of their Subsidiaries, taken as a whole, are (a) in substantially the same
or better repair, working order, and condition as such Properties were as of
September 30, 2001, normal wear and tear excepted and (b) in such repair,
working order and condition to permit the Borrowers and their Subsidiaries to
operate such Properties in substantially the same or better manner as operated
as of December 31, 2000. Neither the business nor the material properties of the
Borrowers and each of their Subsidiaries, taken as a whole, has been affected as
a result of any fire, explosion, earthquake, flood, drought,
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windstorm, accident, strike or other labor disturbance, embargo, requisition or
taking of property or cancellation of contracts, permits or concessions by a
Governmental Authority, riot, activities of armed forces or acts of God or of
any public enemy, which affect would reasonably be expected to cause a Material
Adverse Change.
Section 4.13. Insurance. Each of the Borrowers and their
Subsidiaries carry insurance with reputable insurers in respect of such of their
respective Properties, in such amounts and against such risks as is customarily
maintained by other Persons of similar size engaged in similar businesses or,
self-insure to the extent that is customary for Persons of similar size engaged
in similar businesses.
Section 4.14. No Burdensome Restrictions; No Defaults.
(a) None of the Borrowers nor any of their Subsidiaries is a party
to any indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction or provision of
applicable law or governmental regulation which would reasonably be expected to
cause a Material Adverse Change. None of the Borrowers or their Subsidiaries is
in default under or with respect to any contract, agreement, lease or other
instrument to which such Borrower or Subsidiary is a party and which would
reasonably be expected to cause a Material Adverse Change. To the knowledge of a
Responsible Officer of the Borrowers, none of the Borrowers nor any of their
Subsidiaries has received any notice of default under any contract, agreement,
lease or other instrument to which any Borrower or its Subsidiaries is a party
which is continuing or which, if not cured, would reasonably be expected to
cause a Material Adverse Change.
(b) No Default has occurred and is continuing. Additionally, no
event of default under any financing agreement, material contract or instrument
to which any Borrower is a party has occurred and is continuing which could
reasonably be expected to result in a Material Adverse Change.
Section 4.15. Supply Agreement. Except as disclosed to the Agent, the
Supply Agreement has not been amended, modified, supplemented or terminated, and
the Supply Agreement is in full force and effect and no notice of termination or
cancellation has either been given by or delivered to either the Company or
Philip Morris thereunder.
Section 4.16. Environmental Condition.
(a) Except as set forth on Schedule 4.16, each of the Borrowers
and its Subsidiaries, taken as a whole, (i) have been and are in compliance with
all material requirements of applicable Environmental Laws of which the failure
to comply would reasonably be expected to cause a Material Adverse Change; (ii)
have not received notice of any violation or alleged violation of any
Environmental Law the violation of which would reasonably be expected to cause a
Material Adverse Change; and (iii) are not subject to any actual or contingent
Environmental Claim, which Environmental Claim would reasonably be expected to
cause a Material Adverse Change.
(b) Except as set forth on Schedule 4.16, to the best of the
Borrowers' knowledge (i) none of the Borrowers has ever caused the release of
any Hazardous Substances into the
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Environment in violation of applicable Environmental Laws which would reasonably
be expected to result in a Material Adverse Change, (ii) none of the Borrowers'
currently or previously owned Property has been subjected to the release of or
is contaminated by any Hazardous Substances which would reasonably be expected
to result in a Material Adverse Change, and (iii) none of the Borrowers has ever
received notice of and have ever been investigated for any violation or alleged
violation of any Environmental Law which has not been remedied in accordance
with applicable Environmental Laws and which is reasonably likely to cause a
Material Adverse Change.
Section 4.17. Liens and Encumbrances. None of the Property of the
Borrowers or any of the Material Subsidiaries is subject to any Lien other than
Liens permitted by Section 6.01.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as the Notes or any amount under any Credit Document shall
remain unpaid, or any Bank shall have any Commitment hereunder, the Borrowers
agree, unless the Majority Banks otherwise consent in writing, to comply with
the following covenants.
Section 5.01. Compliance with Laws, Etc. Each of the Borrowers will
comply in all material respects with all Legal Requirements except where the
failure to so comply could not reasonably be expected to cause a Material
Adverse Change. Without limiting the generality and coverage of the foregoing,
the Borrowers shall comply in all material respects with all applicable
Environmental Laws, and all laws, regulations, or directives with respect to
equal employment opportunity and employee safety in all jurisdictions in which
the Borrowers do business except where the failure to so comply could not
reasonably be expected to cause a Material Adverse Change; provided, however,
that this Section 5.01 shall not prevent the Borrowers from, in good faith and
with reasonable diligence, contesting the validity or application of any such
laws or regulations by appropriate legal proceedings.
Section 5.02. Maintenance of Insurance. Each of the Borrowers will
maintain insurance with responsible and reputable insurance companies or
associations in such amounts and covering such risks as are usually carried by
companies engaged in similar businesses and owning similar properties in the
same general areas in which the Borrowers operate; provided that, the Borrowers
may self-insure to the extent and in the manner normal for similarly situated
companies of like size, type and financial condition that are part of a group of
companies under common control.
Section 5.03. Preservation of Corporate Existence, Etc. Each of the
Borrowers will preserve and maintain its corporate existence, rights, franchises
and privileges in the jurisdiction of its incorporation, and qualify and remain
qualified as a foreign corporation in each jurisdiction in which qualification
is necessary or desirable in view of its business and operations or the
ownership of its Properties and where failure to qualify could reasonably be
expected to cause a Material Adverse Change; provided, however, that nothing
herein contained shall prevent any transaction permitted by Section 6.02.
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Section 5.04. Payment of Taxes, Etc. Each of the Borrowers will pay
and discharge before the same shall become delinquent, (a) all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or Property that are material in amount, prior to the date on
which penalties attach thereto and (b) all lawful claims that are material in
amount which, if unpaid, might by law become a Lien upon its Property; provided,
however, that the Borrowers shall not be required to pay or discharge any such
tax, assessment, charge, levy, or claim which is being contested in good faith
and by appropriate proceedings, and with respect to which reserves in conformity
with Applicable Accounting Rules have been provided.
Section 5.05. Reporting Requirements. The Borrowers will furnish to
the Agent and the Banks:
(a) Defaults. (i) As soon as possible and in any event within
three Business Days after a Responsible Officer of a Borrower becomes aware of
the occurrence of a Default known to any of the Borrowers which is continuing on
the date of such statement, a statement of an authorized officer of the Company
setting forth the details of such Default and (ii) within ten Business Days
after a Responsible Officer of a Borrower becomes aware of the occurrence of
such Default, a statement of an authorized officer of the Company setting forth
the actions which the Borrowers have taken and propose to take with respect
thereto;
(b) Quarterly Financials. As soon as available and in any event
not later than 50 days after the end of each of the first three fiscal quarters
of each fiscal year of the Company, SARL, LTR Industries S.A., PDM Industries
S.N.C. and Papeteries de Mauduit S.A.S., Papeteries de Malaucene S.A.S. and
Malaucene Industries S.N.C., Schweitzer-Mauduit Spain, S.L., Schweitzer-Mauduit
do Brasil S.A., Papeteries de Saint-Girons S.A.S. and Saint-Girons Industries
S.N.C., and their Subsidiaries, the consolidated and consolidating (and, where
applicable, combined) balance sheets of such entities as of the end of such
quarter and the consolidated and consolidating (and, where applicable, combined)
statements of income, changes in owners' equity and cash flows of such entities
for the fiscal quarter then ended and for the period commencing at the end of
the previous year and ending with the end of such fiscal quarter, all in
reasonable detail and duly certified with respect to such statements (subject to
year-end audit adjustments) by an authorized financial officer of the Company as
having been prepared in accordance with GAAP;
(c) Audited Annual Financials of the Company. As soon as available
and in any event not later than 105 days after the end of each fiscal year of
the Company, copies of the annual audit report for such year for the Company,
including therein a consolidated balance sheet of the Company and consolidated
statements of income, changes in owners' equity and cash flows for such fiscal
year, in each case certified by Deloitte & Touche L.L.P. or other independent
certified public accountants of nationally recognized standing or otherwise
reasonably acceptable to the Agent and the Majority Banks and including any
management letters delivered by such accountants to the Company in connection
with such audit together with a certificate of such accounting firm to the Agent
and the Banks stating that, in the course of the regular audit of the business
of the Company, which audit was conducted by such accounting firm in accordance
with generally accepted auditing standards, such accounting firm has obtained no
knowledge that a Default has occurred and is continuing, or if, in the opinion
of such accounting firm, a Default has occurred and is continuing, a statement
as to the nature thereof;
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(d) Unaudited Annual Financials of Certain Entities. As soon as
available and in any event not later than 105 days after the end of each fiscal
year of the Company, SARL, LTR Industries S.A., PDM Industries S.N.C. and
Papeteries de Mauduit S.A.S., Papeteries de Malaucene S.A.S. and Malaucene
Industries S.N.C., Schweitzer-Mauduit Spain, S.L., Schweitzer-Mauduit do Brasil
S.A., Papeteries de Saint-Girons S.A.S. and Saint-Girons Industries S.N.C., and
their Subsidiaries, copies of the unaudited, consolidated and consolidating
(and, where applicable, combined) balance sheets of such entities and unaudited,
consolidated and consolidating (and, where applicable, combined) statements of
income, changes in owners' equity and cash flows for such fiscal year for such
entities, together with a certificate of an authorized financial officer of each
such entity certifying that such consolidated statements having been prepared in
accordance with GAAP;
(e) Audited Annual Financials of Certain Entities. To the extent
prepared for any fiscal year of SARL, LTR Industries S.A., PDM Industries
S.N.C., Malaucene Industries S.N.C., Papeteries de Mauduit S.A.S., Papeteries de
Malaucene S.A.S., Schweitzer-Mauduit Spain, S.L. (by the July 31st following the
end of the applicable fiscal year), Schweitzer-Mauduit do Brasil S.A.,
Papeteries de Saint-Girons S.A.S., Saint-Girons Industries S.N.C., and their
Subsidiaries, as soon as available and, except as noted above, in any event not
later than 105 days after the end of such fiscal year of the applicable entity,
copies of the annual audit reports for such year for such entity, including
therein a consolidated balance sheet of such entity and consolidated statements
of income, changes in owners' equity and cash flows for such fiscal year, in
each case certified by Deloitte & Touche L.L.P. or other independent certified
public accountants of nationally recognized standing or otherwise reasonably
acceptable to the Agent and the Majority Banks and including any management
letters delivered by such accountants to the applicable entity in connection
with such audit together with a certificate of such accounting firm to the Agent
and the Banks stating that, in the course of the regular audit of the business
of the applicable entity, which audit was conducted by such accounting firm in
accordance with generally accepted auditing standards, such accounting firm has
obtained no knowledge that a Default has occurred and is continuing, or if, in
the opinion of such accounting firm, a Default has occurred and is continuing, a
statement as to the nature thereof;
(f) Certain French Financial Statements. (i) As soon as available
and in any event not later than 105 days after the end of each fiscal year of
SARL, a copy of the unaudited, consolidated balance sheet of SARL as of the end
of such fiscal year and the consolidated statements of income and owners' equity
and cash flows of SARL for the period commencing at the end of the previous
fiscal year and ending with such fiscal year end, all in reasonable detail and
duly certified with respect to such statements by an authorized financial
officer of SARL as having been prepared in accordance with French Accounting
Rules and (ii) as soon as available and in any event within 135 days after the
end of each fiscal year, the French tax returns (referred to as the "liasse
fiscale") of SARL, LTR Industries S.A., PDM Industries S.N.C., Malaucene
Industries S.N.C., Papeteries de Mauduit S.A.S., Papeteries de Malaucene S.A.S.,
Papeteries de Saint-Girons S.A.S., Saint-Girons Industries S.N.C., and their
Subsidiaries;
(g) Compliance Certificates. (i) Within 45 days of each fiscal
quarter end for the first three fiscal quarters of each fiscal year and (ii)
within 90 days of each fiscal year end, a Compliance Certificate in the form of
the attached Exhibit E for such fiscal quarter or fiscal year then ended
indicating compliance with Sections 6.06 through 6.09;
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(h) Securities Law Filings. Promptly and in any event within 15
days after the sending or filing thereof, copies of all proxy material, reports
and other information which the Borrowers or any of their Subsidiaries sends to
or files with the United States SEC or sends to any shareholder of any Borrower;
(i) Termination Events. As soon as possible and in any event (i)
within 30 days after any Responsible Officer of any Borrower knows or has reason
to know that any Termination Event described in clause (a) of the definition of
Termination Event with respect to any Plan has occurred, and (ii) within 10 days
after any Responsible Officer of any Borrower knows or has reason to know that
any other Termination Event with respect to any Plan has occurred, a statement
of the chief financial officer of such Borrower describing such Termination
Event and the action, if any, which such Borrower or such Affiliate proposes to
take with respect thereto;
(j) Termination of Plans. Promptly and in any event within ten
Business Days after the knowledge of any Responsible Officer of any Borrower of
receipt thereof by such Borrower or any member of the Controlled Group from the
PBGC, copies of each notice received by such Borrower or any such member of the
Controlled Group of the PBGC's intention to terminate any Plan or to have a
trustee appointed to administer any Plan;
(k) Other ERISA Notices. Promptly and in any event within ten
Business Days after the knowledge of any Responsible Officer of any Borrower of
receipt thereof by any Borrower or any member of the Controlled Group from a
Multiemployer Plan sponsor, a copy of each notice received by any Borrower or
any member of the Controlled Group concerning the imposition of withdrawal
liability pursuant to Section 4202 of ERISA in an amount that could reasonably
be expected to cause a Material Adverse Change;
(l) Disputes, etc. Prompt written notice of any claims,
proceedings, or disputes, or to the knowledge of any Responsible Officer of any
Borrower threatened, or affecting such Borrower, or any of its Subsidiaries in
which there is a reasonable possibility of an adverse result which could
reasonably be expected to cause a Material Adverse Change;
(m) Material Changes. Prompt written notice of any condition or
event of which a Responsible Officer of any of the Borrowers has knowledge,
which condition or event has resulted or may reasonably be expected to result in
a Material Adverse Change;
(n) Supply Agreement. Prompt written notice of (i) any nonrenewal
of the initial term or any renewal term under the Supply Agreement, (ii) any
event or condition which results in, or could be expected to result in, an early
termination or cancellation of the Supply Agreement, and (iii) any default by
the Company or, to the knowledge of the Company, Philip Morris under the Supply
Agreement; and
(o) Other Information. Such other information respecting the
business or Properties, or the condition or operations, financial or otherwise,
of the Borrowers as the Agent may from time-to-time reasonably request.
Section 5.06. Maintenance of Property. Each of the Borrowers and
their Subsidiaries shall (a) maintain their material owned, leased, or operated
property, equipment, buildings and fixtures in substantially the same or better
condition and repair as the condition and repair as of
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September 30, 2001, normal wear and tear excepted and (b) not knowingly or
willfully permit the commission of waste or other injury, or the release of
Hazardous Substances on or about the owned or operated property in violation of
applicable Environmental Laws that would reasonably be expected to cause a
Material Adverse Change.
Section 5.07. Inspection. From time-to-time upon reasonable notice,
the Borrowers shall (i) permit the Agent (at the request of any Bank) or after
an Event of Default has occurred, the Banks, to examine and copy their books and
records, (ii) permit the Agent and the Banks to visit and inspect their
Properties, and (iii) permit the Agent and Banks to discuss the business
operations and Properties of the Borrowers with their officers and directors.
Section 5.08. Use of Proceeds. The Borrowers shall use the proceeds
of Advances to refinance existing Indebtedness under the Existing Credit
Agreement and for general corporate purposes. The Borrowers will not engage in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U). No proceeds of any Advance
will be used to purchase or carry any margin stock in violation of Regulation T,
U, or X.
Section 5.09. Status of Obligations. The Company shall cause all of
its obligations under this Agreement, the Notes and the other Credit Documents
to rank at least pari passu in right of payment with all other unsecured Debt of
the Company. SARL shall cause all of its obligations under this Agreement, the
Notes and the other Credit Documents to rank at least pari passu in right of
payment with all other unsecured Debt of SARL.
Section 5.10. Nature of Business. None of the Borrowers nor any of
the Subsidiaries shall engage in any business if, as a result, the general
nature of the business, taken on a consolidated basis, which would then be
engaged in by the Company and its Subsidiaries would be substantially changed
from the general nature of the business engaged in by the Company and its
Subsidiaries on the date of this Agreement.
ARTICLE VI
NEGATIVE COVENANTS
So long as the Notes or any amount under any Credit Document shall
remain unpaid, or any Bank shall have any Commitment, the Borrowers agree,
unless the Majority Banks otherwise consent in writing, to comply with the
following covenants.
Section 6.01. Liens, Etc. None of the Borrowers nor any Material
Subsidiary will create, assume, incur or suffer to exist, any Lien on or in
respect of any of its Property whether now owned or hereafter acquired, or
assign any right to receive income, except that the Borrowers and the Material
Subsidiaries may create, incur, assume or suffer to exist:
(a) Liens securing the Obligations;
(b) Liens for taxes, assessments or governmental charges or levies
on Property of the Borrowers to the extent not required to be paid pursuant to
Sections 5.01 and 5.04;
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(c) Liens securing Debt set forth in Schedule 6.01 attached hereto
and refinancings of such Debt; provided that, the aggregate principal amount of
such Debt shall not be increased;
(d) carrier's, warehousemen's, mechanic's, materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
(whether or not statutory) which are not overdue for a period of more than 30
days or which are being contested in good faith and by appropriate proceedings,
for which a reserve or other appropriate provision, if any, as shall be required
by Applicable Accounting Rules shall have been made;
(e) Liens arising in the ordinary course of business in favor of
customs and revenue authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods;
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, easements, leases, subleases, licenses,
sublicenses, restrictions on the use of Property or minor imperfections in title
thereto which, in the aggregate, are not material in amount, and which do not in
any case materially detract from the value of the Property subject thereto or
interfere with the ordinary conduct of the business of the Company or any of its
Subsidiaries;
(g) Liens on Property of Persons which become Subsidiaries of the
Company after the date of this Agreement securing Debt permitted hereby;
provided that, such Liens are in existence at the time the respective Persons
become Subsidiaries of the Company and were not created in anticipation thereof;
(h) Liens resulting from progress payments or partial payments
under United States government contracts or subcontracts;
(i) Liens arising from legal proceedings, so long as such
proceedings are being contested in good faith by appropriate proceedings
diligently conducted and so long as execution is stayed on all judgments
resulting from any such proceedings;
(j) Liens arising in the ordinary course of business out of
pledges or deposits under workers' compensation laws, unemployment insurance,
old age pensions or other social security or retirement benefits, or similar
legislation or to secure public or statutory obligations of the Borrowers;
(k) Liens existing on Property acquired by the Borrowers in the
ordinary course of business prior to the Borrowers' acquisition of such
Property; and
(l) purchase money Liens or purchase money security interests upon
or in any fixed assets acquired or held by the Borrowers in the ordinary course
of business to secure the purchase price of such fixed assets or to secure
indebtedness incurred solely for the purpose of financing the acquisition of
such Property; provided that the aggregate principal amount of the Debt secured
by the Liens permitted by this paragraph (l) shall not, on the date such Lien is
granted and after giving effect thereto, exceed an aggregate amount equal to 30%
of the Company's Tangible Net Worth at any time.
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Section 6.02. Merger or Consolidation; Asset Sales. None of the
Borrowers nor any of the Material Subsidiaries will (a) merge or consolidate
with or into any other Person or (b) sell, lease, transfer, or otherwise dispose
of any of its Property (other than the sale of inventory in the ordinary course
of business) except that so long as after giving effect thereto no Default or
Event of Default shall exist:
(i) Any corporation may merge or consolidate with any of
the Borrowers or the Material Subsidiaries provided that such Borrower
or Material Subsidiary shall be the continuing or surviving
corporation;
(ii) Any Material Subsidiary (other than a Borrower) may
merge with any other Subsidiary of the Company;
(iii) Any Borrower or Material Subsidiary may sell, lease,
transfer or otherwise dispose of any of its assets to (A)(I) in the
case of any Borrower, any other Borrower and in the case of a Material
Subsidiary, any Borrower or any other Material Subsidiary or (II) any
other Person who guarantees the obligations hereunder of the Borrower
or Material Subsidiary making such sale, lease, transfer or disposition
or (B) with the consent of the Agent (not to be unreasonably withheld),
any other Person if such sale or disposition is in the ordinary course
of such Borrower's or Material Subsidiary's business and the net
proceeds received from such sale or other disposition equal or exceed
(in the reasonable opinion of the Board of Directors of the Company)
the fair market value of the Property transferred to such Person; and
(iv) Any Borrower or Material Subsidiary may sell, lease,
transfer or otherwise dispose of any assets which constitute fixed
assets if the net book value of the asset being sold does not exceed
$10,000,000 (or the Dollar Equivalent thereof); provided that, all such
asset sales permitted by this clause (iii) shall not exceed $45,000,000
(or the Dollar Equivalent thereof) in the aggregate; provided further
that the assets which Philip Morris has the right to recover under the
terms of the Amended and Restated Addendum to Amended and Restated Fine
Papers Supply Agreement and the Coated Tobacco Paper Development
Agreement are excluded from the limitations set forth in this Article
6.02.
Section 6.03. Investments. None of the Borrowers will make or
permit to exist any loans, advances or capital contributions to, or make any
investment in, or purchase or commit to purchase any stock or other securities
or evidences of indebtedness of or interests in any Person, except for (a)
loans, advances, capital contributions or investments in (i) any other Borrower,
(ii) Schweitzer-Mauduit Spain, S.L., (iii) any Subsidiary which is organized
under the laws of the Republic of France, or (iv) any other Subsidiary in an
aggregate outstanding amount not to exceed $10,000,000 except otherwise
permitted by 6.03(c), (b) Liquid Investments, (c) cash investments in
Subsidiaries and joint ventures and, subject to the terms of Section 6.02
hereof, non-cash investments in Subsidiaries and joint ventures, and (d) the
acquisition by the Company or any of its Subsidiaries, in a single transaction
or any series of related transactions, of any Person or the business or all or
substantially all of the assets of any Person, or any division of any Person,
whether through investment, purchase of assets, merger or otherwise, including,
but not limited to, in any transaction pursuant to which any Person that was not
theretofore a Subsidiary of the Company, becomes a Subsidiary of the Company and
is consolidated with the
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Company for financial reporting purposes; provided however, in the case of any
transaction subject to this clause (d), that, giving effect to such transaction
on a pro forma basis, there exists no Default or Event of Default.
Section 6.04. Transactions With Affiliates. None of the Borrowers
shall, directly or indirectly, enter into or permit to exist any transaction or
series of transactions (including, but not limited to, the purchase, sale, lease
or exchange of Property, the making of any investment, the giving of any
guaranty or the rendering of any service) with any of their Affiliates other
than the Company or a wholly-owned Subsidiary of the Company unless either (a)
such transaction or series of transactions is on terms no less favorable to such
Borrower than those that could be obtained in a comparable arm's length
transaction with a Person that is not such an affiliate, or (b) such transaction
has been approved by a majority of the disinterested members of the Company's
Board of Directors or (c) such transaction or series of transactions between
Schweitzer-Mauduit Spain, S.L. and Schweitzer-Mauduit do Brasil S.A. in the
ordinary course of business.
Section 6.05. Compliance with ERISA. None of the Borrowers or any
Material Subsidiary will (a) terminate, or permit any Affiliate to terminate,
any Plan so as to result in any material (in the reasonable opinion of the
Majority Banks) liability of such Borrower or Material Subsidiary or (b) permit
to exist any occurrence of any Reportable Event (as defined in Title IV of
ERISA), or any other event or condition, which presents a material (in the
reasonable opinion of the Majority Banks) risk of such a termination by the PBGC
of any Plan.
Section 6.06. Tangible Net Worth. The Company will not permit its
Tangible Net Worth as of the last day of any fiscal quarter to be less than (a)
$181,337,000 plus (b) on a cumulative basis, for each fiscal quarter of the
Company beginning with the fiscal quarter ending September 30, 2001 for which
Net Income is a positive number, 50% of Net Income for such fiscal quarter.
Section 6.07. Net Debt to Equity Ratio. The Company will not permit
its Net Debt to Equity Ratio as of the end of any fiscal quarter to be greater
than 0.80 to 1.0.
Section 6.08. Net Debt to Adjusted EBITDA. The Company will not
permit the ratio of the Company's (a) Net Debt as of the end of any fiscal
quarter to (b) Adjusted EBITDA as of the end of any fiscal quarter for the
four-fiscal quarter period then ending to be greater than 2.0 to 1.0.
Section 6.09. Debt. The Company will not permit (a) LTR Industries
S.A., (b) PDM Industries S.N.C., (c) Malaucene Industries S.N.C., (d) Papeteries
de Mauduit S.A.S., (e) Papeteries de Malaucene S.A.S., (f) Schweitzer-Mauduit
Spain, S.L., (g) Schweitzer-Mauduit do Brasil S.A., (h) Papeteries de
Saint-Girons S.A.S., (i) Saint-Girons Industries S.N.C. or (j) any of their
Subsidiaries (other than SARL) to incur any Debt except for:
(i) intercompany Debt owing by any such Person to either
its Subsidiaries or to any of the other Borrowers;
(ii) Debt arising under any employee benefit plan
sponsored by LTR Industries S.A., PDM Industries S.N.C., Papeteries de
Mauduit S.A.S., Malaucene
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Industries S.N.C., Papeteries de Mauduit S.A.S., Papeteries de
Saint-Girons S.A.S., Saint-Girons Industries S.N.C., or any of their
Subsidiaries;
(iii) Debt of LTR Industries S.A. in an aggregate principal
amount not to exceed 5,000,000.00;
(iv) Debt of PDM Industries S.N.C., Papeteries de Mauduit
S.A.S., Papeteries de Saint-Girons S.A.S, Saint-Girons Industries
S.N.C., Papeteries de Malaucene S.A.S., Malaucene Industries S.N.C.,
and their Subsidiaries in an aggregate principal amount not to
exceed 6,000,000.00;
(v) Debt of Schweitzer-Mauduit Spain S.L. and
Schweitzer-Mauduit do Brasil S.A.S. in an aggregate principal amount
not to exceed $7,500,000; and
(vi) other Debt of any such Person of the type permitted
to be secured by Section 6.01(l).
Section 6.10. Special Provisions for Material Subsidiaries of SARL.
Notwithstanding any of the provisions of this Article VI, none of the Material
Subsidiaries of SARL shall be under any obligation pursuant thereto. However,
SARL shall procure that any and all of its Material Subsidiaries shall comply
with Sections 6.01, 6.02, 6.05 and 6.09; provided, that (i) such commitment of
SARL shall have the same legal effect as a "promesse de porte-fort" as provided
for under Article 1120 of the French Civil Code and (ii) the "promesse de
porte-fort" shall be deemed to have been breached upon the occurrence of any act
or omission of any of the Material Subsidiaries of SARL or any situation
relating to such Material Subsidiaries which does not comply with any of the
provisions of this Article VI.
Section 6.11. Stock Purchases. The Company will not purchase,
redeem or otherwise acquire any shares of its capital stock except that the
Company may purchase (a) up to $20,000,000 of its capital stock in any fiscal
year, (b) its capital stock in connection with its employee 401(k) retirement
plan, and (c) its capital stock sold in connection with a cashless exercise of
stock options granted under the Company's equity participation plan.
ARTICLE VII
REMEDIES
Section 7.01. Events of Default. The occurrence of any of the
following events shall constitute an "Event of Default" under any Credit
Document:
(a) Payment. Any of the Borrowers shall fail to pay (i) any
principal of any Note when the same becomes due and payable, or (ii) any
interest on the Notes or any fee or other amount payable hereunder or under any
other Credit Document within five Business Days after the same becomes due and
payable;
(b) Representation and Warranties. Any representation or warranty
made or deemed to be made by any of the Borrowers (or any of their officers) in
this Agreement or in any other
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Credit Document shall prove to have been incorrect in any material respect when
made or deemed to be made;
(c) Covenant Breaches. Any of the Borrowers shall (i) fail to
perform or observe any covenant contained in Sections 5.05(a), 5.08 and Article
VI (other than Section 6.01) of this Agreement, (ii) fail to perform or observe
the covenant contained in Section 5.05(n) if such failure shall remain
unremedied for 30 days after written notice of such default shall have been
given to any of the Borrowers by the Agent or any Bank, or (iii) fail to perform
or observe any other term or covenant set forth in this Agreement or in any
other Credit Document which is not covered by clauses (i) or (ii) above or any
other provision of this Section 7.01 if such failure shall remain unremedied for
10 Business Days after written notice of such default shall have been given to
any of the Borrowers by the Agent or any Bank;
(d) Cross-Default. (i) Any Borrower or any Material Subsidiary
shall fail to pay any principal of or premium or interest on its Debt which is
outstanding in a principal amount of at least $5,000,000 (or the Dollar
Equivalent thereof) individually or when aggregated with all such Debt of the
Borrower and its Material Subsidiaries so in default (but excluding Debt
evidenced by the Notes) when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise),
(ii) any other event shall occur or condition shall exist under any agreement or
instrument relating to Debt which is outstanding in a principal amount of at
least $5,000,000 (or the Dollar Equivalent thereof) individually or when
aggregated with all such Debt of the Borrower and its Material Subsidiaries so
in default (but excluding Debt evidenced by the Notes), and shall continue after
the applicable grace period, if any, specified in such agreement or instrument,
if the effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Debt; or (iii) any such Debt (but
excluding Debt evidenced by the Notes) shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
(e) Insolvency. Any Borrower or Material Subsidiary shall
generally not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general assignment for
the benefit of creditors; or any proceeding shall be instituted by or against
any Borrower or Material Subsidiary seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against a Borrower
or Material Subsidiary, either such proceeding shall remain undismissed for a
period of 60 days or any of the actions sought in such proceeding shall occur;
or any Borrower or Material Subsidiary shall take any corporate action to
authorize any of the actions set forth above in this paragraph (e);
(f) Judgments. Any judgment, decree or order for the payment of
money shall be rendered against any Borrower or any Material Subsidiary in an
amount in excess of $10,000,000 (or the Dollar Equivalent thereof) if rendered
solely against the Borrowers and/or their Subsidiaries, or for which such
Borrower's or Material Subsidiary's allocated portion of which (net of any
amounts (i) as to which the applicable insurance company has acknowledged
coverage or (ii) covered by a third party indemnity from an indemnitor with a
net worth, income,
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or other financial means reasonably acceptable to the Agent under which such
indemnitor has acknowledged responsibility) exceeds $10,000,000 (or the Dollar
Equivalent thereof) and either (i) such judgment, decree or order remains
unsatisfied and in effect for a period of 60 consecutive days or more without
being vacated, discharged, satisfied or stayed or bonded pending appeal or (ii)
enforcement proceedings shall have been commenced by any creditor upon such
judgment, decree or order;
(g) Change of Control. The Company shall cease to own, either
directly or indirectly, all of the shares of common stock in SARL and the other
Material Subsidiaries necessary to maintain the ownership percentages held by
the Company in SARL and the Material Subsidiaries on the date of this Agreement;
(h) Termination Events. Any Termination Event with respect to a
Plan shall have occurred, and, 30 days after notice thereof shall have been
given to any Borrower by the Agent, (i) such Termination Event shall not have
been corrected and (ii) the then present value of such Plan's vested benefits
exceeds the then current value of assets accumulated in such Plan by an amount
that would reasonably be expected to cause or to have a Material Adverse Change
(or in the case of a Termination Event involving the withdrawal of a
"substantial employer" (as defined in Section 4001(a)(2) of ERISA), the
withdrawing employer's proportionate share of such excess shall exceed such
amount);
(i) Plan Withdrawals. Any Borrower or any member of the Controlled
Group as employer under a Multiemployer Plan shall have made a complete or
partial withdrawal from such Multiemployer Plan and the plan sponsor of such
Multiemployer Plan shall have notified such withdrawing employer that such
employer has incurred a withdrawal liability in an annual amount that could
reasonably be expected to cause or to have a Material Adverse Change;
(j) Guaranty. Any of the guaranty provisions in this Agreement
shall for any reason cease to be valid and binding on the Company or the Company
shall so state in writing;
(k) Material Adverse Change. A Material Adverse Change shall have
occurred and be continuing; or
(l) Philip Morris. During any fiscal year of the Company (i) the
total net sales recorded by the Borrowers and their Subsidiaries during such
year from Philip Morris and its Affiliates shall constitute less than 50% of the
net sales recorded by the Borrowers and their Subsidiaries during the
immediately preceding fiscal year from Philip Morris and its Affiliates, and
(ii) the total consolidated net sales of the Company for such year decline by
greater than 10% compared to the immediately preceding fiscal year, excluding
unfavorable exchange rate impacts.
Section 7.02. Optional Acceleration of Maturity. If any Event of
Default (other than an Event of Default pursuant to paragraph (e) of Section
7.01) shall have occurred and be continuing, then, and in any such event the
Agent (i) shall at the request of, or may with the consent of, the Majority
Banks, by notice to the Borrowers, declare the obligation of each Bank to make
Advances to be terminated, whereupon the same shall forthwith terminate, and
(ii) shall at the request of, or may with the consent of, the Majority Banks, by
notice to the Borrowers,
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declare the Notes, all interest thereon, and all other amounts payable under
this Agreement to be forthwith due and payable, whereupon the Notes, all such
interest, and all such amounts shall become and be forthwith due and payable in
full, without presentment, demand, protest or further notice of any kind
(including, without limitation, any notice of intent to accelerate or notice of
acceleration), all of which are hereby expressly waived by the Borrowers;
Section 7.03. Automatic Acceleration of Maturity. If any Event of
Default pursuant to paragraph (e) of Section 7.01 shall occur the obligation of
each Bank to make Advances shall immediately and automatically be terminated and
the Notes, and all other amounts payable under this Agreement shall immediately
and automatically become and be due and payable in full, without presentment,
demand, protest or any notice of any kind (including, without limitation, any
notice of intent to accelerate or notice of acceleration), all of which are
hereby expressly waived by the Borrowers.
Section 7.04. Non-exclusivity of Remedies. No remedy conferred upon
the Agent is intended to be exclusive of any other remedy, and each remedy shall
be cumulative of all other remedies existing by contract, at law, in equity, by
statute or otherwise.
Section 7.05. Right of Set-off. Upon (a) the occurrence and during
the continuance of any Event of Default and (b) the making of the request or the
granting of the consent, if any, specified by Section 7.02 to authorize the
Agent upon the consent of the Majority Banks to declare the Notes and any other
amount payable hereunder due and payable pursuant to the provisions of Section
7.02 or the automatic acceleration of the Notes and all amounts payable under
this Agreement pursuant to Section 7.03, each Bank is hereby authorized at any
time and from time-to-time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such Bank
to or for the credit or the account of the Borrowers against any and all of the
obligations of the Borrowers now or hereafter existing under this Agreement, the
Notes, and the other Credit Documents, irrespective of whether or not such Bank
shall have made any demand under this Agreement, the Notes, or such other Credit
Documents, and although such obligations may be unmatured. Each Bank agrees to
promptly notify the Borrowers after any such set-off and application made by it,
provided that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Bank under this Section are in
addition to any other rights and remedies (including, without limitation, other
rights of set-off) which such Bank may have.
ARTICLE VIII
THE GUARANTY
Section 8.01. Guaranty. The Company hereby unconditionally and
irrevocably guarantees the punctual payment of the Guaranteed Obligations when
due, whether at stated maturity, by acceleration or otherwise, and agrees to pay
any and all expenses (including reasonable counsel fees and expenses) incurred
by the Agent and the Banks in enforcing any rights under this Section 8.01.
Without limiting the generality of the foregoing, the Company's liability shall
extend to all amounts which constitute part of the Guaranteed Obligations and
are owed by the Company even if they are declared unenforceable or not allowable
due to the
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existence of a bankruptcy, reorganization or similar proceeding involving SARL.
The Company will pay to the Banks all amounts due and payable under this Section
8.01 in Euros or Dollars, as applicable, in immediately available funds one
Business Day after demand from the Agent.
Section 8.02. Guaranty Absolute. The Company guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Credit Agreement and the Notes, regardless of any law, regulation or order now
or hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Bank with respect thereto. The guaranty provided for in Section
8.01 is a guaranty of payment, not of collection and the Company's obligations
thereunder are primary, not secondary. The obligations of the Company under
Section 8.01 are independent of the Guaranteed Obligations, and a separate
action or actions may be brought and prosecuted against the Company to enforce
such obligations, irrespective of whether any action is brought against SARL or
any other Person or whether SARL or any other Person is joined in any such
action or actions. The liability of the Company under Section 8.01 shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any other provision
of the Credit Agreement, the Notes or any other Credit Document;
(b) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Guaranteed Obligations or any other
liabilities, or any other amendment or waiver of or any consent to departure
from the Credit Agreement, the Notes or any other Credit Document, including,
without limitation, any increase in the Guaranteed Obligations or any other
liabilities resulting from the extension of additional credit to SARL or
otherwise;
(c) any taking, exchange, release or non-perfection of any
collateral (if any), or any taking, release, amendment or waiver of or consent
to departure from any other guaranty for all or any of the Guaranteed
Obligations or any other liabilities;
(d) any manner of application of collateral (if any), or proceeds
thereof or of collections on account of any other guaranty to all or any of the
Guaranteed Obligations or any other liabilities, or any manner of sale or other
disposition of any collateral for all or any of the Guaranteed Obligations or
any other liabilities or any other assets of SARL;
(e) any change, restructuring or termination of the corporate
structure or existence of SARL; or
(f) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, SARL or a guarantor (other than the
defense of prior payment).
Section 8.03. Waiver. The Company hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and the guaranty provided for in Section 8.01 and any
requirement that the Agent or any Bank protect, secure, perfect or insure any
security interest or other Lien or any property subject thereto or exhaust any
right to take any action against the Company or any other Person or any
collateral.
Section 8.04. Subrogation. (a) Until such time as the Guaranteed
Obligations are paid in full, the Company irrevocably waives any and all rights
to which it may be entitled, by operation
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of law or otherwise, by making any payment hereunder or otherwise to be
subrogated to the rights of the Agent and the Banks against SARL or any other
Person with respect to such payment or otherwise to be reimbursed, indemnified
or exonerated by SARL or any other Person in respect thereof. If any amount
shall be paid to the Company on account of such subrogation in violation of the
preceding sentence, such amount shall be held in trust for the benefit of the
Agent and the Banks and shall forthwith be paid to the Agent to be credited
against and applied upon the Guaranteed Obligations, whether matured or
unmatured, in such order as may be determined by the Majority Banks.
(a) The Company agrees that, to the extent that any Borrower makes
payment to the Agent or any Bank, or the Agent or any Bank receives any proceeds
of collateral, and such payments or proceeds or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
or otherwise required to be repaid, then to the extent of such repayment the
Guaranteed Obligations shall be reinstated and continued in full force and
effect as of the date such initial payment or collection of proceeds occurred.
The Company shall defend and indemnify the Agent and the Banks from and against
any claim or loss under this subsection 8.04 (including reasonable attorneys'
fees and expenses) in the defense of any such action or suit, but excluding any
such losses, liabilities, claims, damages, or expenses incurred by reason of the
gross negligence, bad faith or willful misconduct of the Agent and the Banks.
ARTICLE IX
THE AGENT
Section 9.01. Authorization and Action. Each Bank hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Agent by the
terms hereof and of the other Credit Documents, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement or any other Credit Document (including, without limitation,
enforcement or collection of the Notes), the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Banks, and such instructions
shall be binding upon all Banks and all holders of Notes; provided, however,
that the Agent shall not be required to take any action which exposes the Agent
to personal liability or which is contrary to this Agreement, any other Credit
Document, or applicable law.
Section 9.02. Agent's Reliance, Etc. Neither the Agent nor any of
its directors, officers, agents or employees shall be liable for any action
taken or omitted to be taken (including the Agent's own negligence) by it or
them under or in connection with this Agreement or the other Credit Documents,
except for its or their own gross negligence, bad faith or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (a) may treat
the payee of any Note as the holder thereof until the Agent receives written
notice of the assignment or transfer thereof signed by such payee and in form
satisfactory to the Agent; (b) may consult with legal counsel (including counsel
for the Borrowers), independent public accountants and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or
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representation to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations made in or in connection with this
Agreement or the other Credit Documents; (d) shall not have any duty to
ascertain or to inquire as to the performance or observance of any of the terms,
covenants or conditions of this Agreement or any other Credit Document on the
part of the Borrowers or their Subsidiaries or to inspect the property
(including the books and records) of the Borrowers or their Subsidiaries; (e)
shall not be responsible to any Bank for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Credit Document; and (f) shall incur no liability under or in respect of this
Agreement or any other Credit Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopier,
telegram, cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties.
Section 9.03. The Agent and Its Affiliates. With respect to its
Commitments, the Advances made by it and the Notes issued to it, the Agent shall
have the same rights and powers under this Agreement as any other Bank and may
exercise the same as though it were not the Agent. The term "Bank" or "Banks"
shall, unless otherwise expressly indicated, include the Agent in its individual
capacity. The Agent and its Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, and generally engage in any kind of business
with, the Borrowers or any of their Subsidiaries, and any Person who may do
business with or own securities of the Borrowers or any such Subsidiaries, all
as if the Agent were not an agent hereunder and without any duty to account
therefor to the Banks.
Section 9.04. Bank Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Agent or any other Bank and
based on the financial statements referred to in Section 4.05 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also acknowledges
that it will, independently and without reliance upon the Agent or any other
Bank and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not taking
action under this Agreement.
Section 9.05. INDEMNIFICATION. THE BANKS SEVERALLY AGREE TO
INDEMNIFY THE AGENT (TO THE EXTENT NOT REIMBURSED BY THE BORROWERS), ACCORDING
TO THEIR RESPECTIVE PRO RATA SHARES FROM AND AGAINST ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES OR DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED
ON, INCURRED BY, OR ASSERTED AGAINST THE AGENT IN ANY WAY RELATING TO OR ARISING
OUT OF THIS AGREEMENT OR ANY ACTION TAKEN OR OMITTED BY THE AGENT UNDER THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT (INCLUDING THE AGENT'S OWN NEGLIGENCE),
PROVIDED THAT NO BANK SHALL BE LIABLE FOR ANY PORTION OF SUCH LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES OR DISBURSEMENTS RESULTING FROM THE AGENT'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, EACH BANK AGREES TO REIMBURSE
THE AGENT PROMPTLY UPON WRITTEN DEMAND FOR ITS RATABLE SHARE OF ANY
OUT-OF-POCKET EXPENSES (INCLUDING REASONABLE COUNSEL FEES) INCURRED BY THE AGENT
IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION,
MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL
PROCEEDINGS OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF RIGHTS OR
RESPONSIBILITIES UNDER, THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, TO THE
EXTENT THAT THE AGENT IS NOT
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REIMBURSED FOR SUCH EXPENSES BY THE BORROWERS. UPON THE REQUEST OF ANY BANK, THE
AGENT SHALL SUPPLY DOCUMENTATION REASONABLY EVIDENCING SUCH EXPENSES.
Section 9.06. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Banks and the Borrowers and may be removed
at any time with or without cause by the Majority Banks upon receipt of written
notice from the Majority Banks to such effect. Upon receipt of notice of any
such resignation or removal, the Majority Banks shall have the right to appoint
a successor Agent subject to, if an Event of Default has not occurred and is not
continuing, the consent of the Company, which consent shall not be unreasonably
withheld. If no successor Agent shall have been so appointed, and shall have
accepted such appointment, within 30 days after the retiring Agent's giving of
notice of resignation or the Majority Banks' removal of the retiring Agent then
the retiring Agent may, on behalf of the Banks and the Borrower, appoint a
successor Agent, which shall be a commercial bank meeting the financial
requirements of an Eligible Assignee. Upon the acceptance of any appointment as
Agent by a successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement and the other Credit Documents. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article IX shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement and the other Credit
Documents.
ARTICLE X
MISCELLANEOUS
Section 10.01. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, the Notes, or any other Credit Document, nor
consent to any departure by any Borrower therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Majority Banks
and the Borrowers, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Banks and the Borrower, do any of the following: (a) increase
any Commitment of the Banks, (b) reduce the principal of, or interest on, the
Notes or any fees or other amounts payable hereunder or under any other Credit
Document, (c) postpone any date fixed for any scheduled payment of principal of,
or interest on, the Notes or any fees or other amounts payable hereunder, (d)
change the number of Banks which shall be required for the Banks or any of them
to take any action hereunder or under any other Credit Document, (e) amend
Section 2.12 or this Section 10.01, (f) release the Company from its obligations
under Article VIII; or (g) amend the definition of "Majority Banks"; and
provided, further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Banks required above to take
such action, affect the rights or duties of the Agent under this Agreement or
any other Credit Document and (ii) no waiver of any of the conditions specified
in Article III shall be effective against any Bank not executing such waiver.
Section 10.02. Notices, Etc. All notices and other communications
shall be in writing (including telecopy or telex) and mailed, telecopied,
telexed, hand delivered or delivered by a nationally recognized overnight
courier, if to the Company or any other Borrower, at its address
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as set forth on Schedule 1; if to any Bank, at its U.S. Lending Office specified
opposite its name on Schedule 1; if to the Agent, at its address for notices set
forth in Schedule 1; and if a Notice of Borrowing or a Notice of Continuation to
the Agent as to Tranche A2 or Tranche B2 at the U.S. Lending Office of the Agent
and, as to Tranche A1 or Tranche B1 to the Agent at its Paris lending office or
if different, the Applicable Lending Office for the Agent specified opposite its
name on Schedule 1 or, as to each party, at such other address or
teletransmission number as shall be designated by such party in a written notice
to the other parties. All such notices and communications shall, when mailed,
telecopied, telexed or hand delivered or delivered by overnight courier be
effective: upon receipt, if mailed, when telecopy transmission is completed,
when confirmed by telex answer-back or when delivered, respectively, except that
notices and communications to the Agent pursuant to Article II or IX shall not
be effective until received by the Agent.
Section 10.03. No Waiver; Remedies. No failure on the part of any
Bank or the Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies provided in this
Agreement are cumulative and not exclusive of any remedies provided by law.
Section 10.04. Costs and Expenses. Each of the Borrowers agrees to
pay on demand all reasonable and documented out-of-pocket costs and expenses of
the Agent in connection with the preparation, execution, delivery,
administration, modification and amendment of this Agreement, the Notes and the
other Credit Documents including, without limitation, the reasonable fees and
out-of-pocket expenses of Bracewell & Patterson, L.L.P., counsel for the Agent,
and with respect to advising the Agent as to its rights and responsibilities
under this Agreement, and, after the occurrence of an Event of Default, all
reasonable out-of-pocket costs and expenses, if any, of Agent and each Bank
(including, without limitation, reasonable counsel fees and expenses of the
Agent and each Bank) in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Agreement, the Notes and
the other Credit Documents.
Section 10.05. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrowers and the Agent, and when the
Agent shall have, as to each Bank, either received a counterpart hereof executed
by such Bank or been notified by such Bank that such Bank has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrowers, the
Agent and each Bank and their respective successors and assigns, except that
none of the Borrowers shall have the right to assign its rights or delegate its
duties under this Agreement or any interest in this Agreement without the prior
written consent of each Bank.
Section 10.06. Bank Assignments and Participations.
(a) Assignments. Any Bank may assign to one or more banks or other
entities all or any portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments, the
Advances owing to it, and the Notes held by it; provided, however, that (i) each
such assignment shall be of a constant, and not a varying, percentage of all of
such Bank's rights and obligations under this Agreement, (ii) the amount of the
Commitments and Advances of such Bank being assigned in the various facilities
evidenced hereby pursuant to
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each such assignment (determined as of the date of the Assignment and Acceptance
with respect to such assignment) shall in no event be less than $5,000,000 or
5,000,000, as the case may be (or if less, the amount of such Bank's
remaining Commitments) in the aggregate, (iii) each such assignment shall be to
an Eligible Assignee, (iv) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with the Notes subject to such assignment,
(v) each Eligible Assignee (other than the Eligible Assignee of the Agent) shall
pay to the Agent a $3,500 administrative fee, and (vi) the Agent shall retain,
until the occurrence of an Event of Default, aggregate Commitments which
constitute at least 15% of the total Commitments of the Banks. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least three Business Days after the execution thereof, (A) the assignee
thereunder shall be a party hereto for all purposes and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder
and (B) such Bank thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of such Bank's rights and obligations under this Agreement, such Bank
shall cease to be a party hereto).
(b) Term of Assignments. By executing and delivering an Assignment
and Acceptance, the Bank thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such Bank makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency of
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrowers or the
performance or observance by the Borrowers of any of their obligations under
this Agreement or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Section 4.05 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such assignee will, independently and without reliance upon the Agent, such
Bank or any other Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and (vi)
such assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be
performed by it as a Bank.
(c) The Register. The Agent shall maintain at its address referred
to in Section 10.02 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Banks and the Commitments of, and principal amount of the Advances owing to,
each Bank from time-to-time (the "Register"). The entries in the Register shall
be conclusive and binding for all purposes, absent manifest error, and the
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Borrowers, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrowers or any Bank at any
reasonable time and from time-to-time upon reasonable prior notice.
(d) Procedures. Upon its receipt of an Assignment and Acceptance
executed by a Bank and an Eligible Assignee, together with the Tranche A1 Notes,
Tranche A2 Notes, Tranche B1 Notes, or Tranche B2 Notes subject to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of the attached Exhibit A, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register, and (iii) give prompt notice thereof to the Borrowers. Within five
Business Days after its receipt of such notice, the applicable Borrower, at its
own expense, shall execute and deliver to the Agent in exchange for the
surrendered Tranche A1 Note, Tranche A2 Note, Tranche B1 Note, or Tranche B2
Note, a new Tranche A1 Note, Tranche A2 Note, Tranche B1 Note, or Tranche B2
Note to the order of such Eligible Assignee in an amount equal to the Tranche A1
Commitment, Tranche A2 Commitment, Tranche B1 Commitment and Tranche B2
Commitment assumed and Tranche A1 Advances, Tranche A2 Advances, Tranche B1
Advances and Tranche B2 Advances purchased by it pursuant to such Assignment and
Acceptance and, if such Bank has retained any Commitments hereunder, a new
Tranche A1 Note, new Tranche A2 Note, new Tranche B1 Note, or new Tranche B2
Note to the order of such Bank in an amount equal to the Tranche A1 Commitment,
Tranche A2 Commitment, Tranche B1 Commitment, Tranche B2 Commitment, Tranche A1
Advances, Tranche A2 Advances, Tranche B1 Advances and Tranche B2 Advances,
respectively, retained by it hereunder. Such new Notes shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of the attached Exhibits B-1, B-2, B-3, and B-4.
(e) Participations. Each Bank may sell participations to one or
more banks or other entities in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Commitments, the Advances owing to it, and the Notes held by it);
provided, however, that (i) such Bank's obligations under this Agreement
(including, without limitation, its Commitments to the Borrowers hereunder)
shall remain unchanged, (ii) such Bank shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) such Bank
shall remain the holder of any such Notes for all purposes of this Agreement,
(iv) the Borrowers, the Agent and the other Banks shall continue to deal solely
and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement, and (v) such Bank shall not require the
participant's consent to any matter under this Agreement, except for change in
the principal amount of the Notes, reductions in fees or interest, or extending
the Maturity Date. Each of the Borrowers hereby agrees that a Bank may pass
through to any of its participants the same rights under Sections 2.08, 2.09,
2.11(c), and 10.07 to the extent of their respective participations, provided
that no participant shall be able to collect in excess of amounts payable to the
Bank selling to such participant under such Sections in respect of the interest
sold to such participant or to collect any such amounts from the Borrowers.
(f) Confidentiality. Each Bank may furnish any information
concerning the Borrowers and their Subsidiaries in the possession of such Bank
from time-to-time to assignees and participants (including prospective assignees
and participants); provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall, in order to
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preserve the confidentiality of any confidential information relating to the
Borrowers and their Subsidiaries received by it from such Bank, promptly execute
and deliver to the Agent and the Borrowers a Confidentiality Agreement in the
form of the attached Exhibit G.
(g) Compliance with Securities Laws. All transfers of any
interests in the Notes shall be in compliance with all applicable Federal and
state securities laws.
Section 10.07. INDEMNIFICATION. EACH OF THE BORROWERS SHALL
INDEMNIFY THE AGENT, THE BANKS AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE
DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS FROM, AND DISCHARGE, RELEASE, AND HOLD
EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS OR
DAMAGES TO WHICH ANY OF THEM MAY BECOME SUBJECT, INSOFAR AS SUCH LOSSES,
LIABILITIES, CLAIMS OR DAMAGES ARISE OUT OF OR RESULT FROM (I) ANY ACTUAL OR
PROPOSED USE BY THE BORROWERS OR ANY AFFILIATE OF THE BORROWERS OF THE PROCEEDS
OF ANY ADVANCE, (II) ANY BREACH BY THE BORROWERS OF ANY PROVISION OF THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT, (III) ANY INVESTIGATION, LITIGATION OR
OTHER PROCEEDING (INCLUDING ANY THREATENED INVESTIGATION OR PROCEEDING) RELATING
TO THE FOREGOING BROUGHT BY ANY PERSON OTHER THAN A BORROWER, OR (IV) ANY
ENVIRONMENTAL CLAIM OR REQUIREMENT OF ENVIRONMENTAL LAWS CONCERNING OR RELATING
TO THE PRESENT OR PREVIOUSLY-OWNED OR OPERATED PROPERTIES, OR THE OPERATIONS OR
BUSINESS, OF THE BORROWERS OR ANY OF THEIR SUBSIDIARIES, AND EACH OF THE
BORROWERS SHALL REIMBURSE THE AGENT AND EACH BANK, AND EACH AFFILIATE THEREOF
AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS, UPON DEMAND FOR
ANY REASONABLE OUT-OF-POCKET EXPENSES (INCLUDING LEGAL FEES) INCURRED IN
CONNECTION WITH ANY SUCH INVESTIGATION, LITIGATION OR OTHER PROCEEDING; AND
EXPRESSLY INCLUDING ANY SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES, OR EXPENSE
INCURRED BY REASON OF THE PERSON BEING INDEMNIFIED'S OWN NEGLIGENCE, BUT
EXCLUDING ANY SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES OR EXPENSES INCURRED BY
REASON OF THE GROSS NEGLIGENCE, BAD FAITH OR WILLFUL MISCONDUCT OF THE PERSON TO
BE INDEMNIFIED, OR IN THE CASE OF CLAUSE (IV) ABOVE, CAUSED BY THE AFFIRMATIVE
ACT OF THE AGENT OR SUCH BANK.
Section 10.08. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. This Agreement may be executed and delivered by telecopier.
Section 10.09. Survival of Representations, etc. All representations
and warranties contained in this Agreement or made in writing by or on behalf of
the Borrower in connection herewith shall survive the execution and delivery of
this Agreement and the Credit Documents, the making of the Advances and any
investigation made by or on behalf of the Banks, none of which investigations
shall diminish any Bank's right to rely on such representations and warranties.
All obligations of the Borrower provided for in Sections 2.08, 2.09, 2.11(c),
and 10.07 shall survive any termination of this Agreement and repayment in full
of the Obligations.
Section 10.10. Severability. In case one or more provisions of this
Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
not be affected or impaired thereby.
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Section 10.11. Usury Not Intended. It is the intent of the Borrowers
and each Bank in the execution and performance of this Agreement and the other
Credit Documents to contract in strict compliance with applicable usury laws,
including conflicts of law concepts, governing the Advances of each Bank
including such applicable laws of the State of New York and the United States of
America from time-to-time in effect. In furtherance thereof, the Banks and the
Borrowers stipulate and agree that none of the terms and provisions contained in
this Agreement or the other Credit Documents shall ever be construed to create a
contract to pay, as consideration for the use, forbearance or detention of
money, interest at a rate in excess of the Maximum Rate and that for purposes
hereof "interest" shall include the aggregate of all charges which constitute
interest under such laws that are contracted for, charged or received under this
Agreement; and in the event that, notwithstanding the foregoing, under any
circumstances the aggregate amounts taken, reserved, charged, received or paid
on the Advances, include amounts which by applicable law are deemed interest
which would exceed the Maximum Rate, then such excess shall be deemed to be a
mistake and each Bank receiving same shall credit the same on the principal of
its Notes (or if such Notes shall have been paid in full, refund said excess to
the Borrowers). In the event that the maturity of the Notes are accelerated by
reason of any election of the holder thereof resulting from any Event of Default
under this Agreement or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest may never include
more than the Maximum Rate and excess interest, if any, provided for in this
Agreement or otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited on the
applicable Notes (or, if the applicable Notes shall have been paid in full,
refunded to the Borrowers of such interest). In determining whether or not the
interest paid or payable under any specific contingencies exceeds the Maximum
Rate, the Borrowers and the Banks shall to the maximum extent permitted under
applicable law amortize, prorate, allocate and spread in equal parts during the
period of the full stated term of the Notes all amounts considered to be
interest under applicable law at any time contracted for, charged, received or
reserved in connection with the Obligations. The provisions of this Section
shall control over all other provisions of this Agreement or the other Credit
Documents which may be in apparent conflict herewith.
Section 10.12. Global Effective Rate. Because the interest rates
applicable to certain Types of Advances are variable, it is not possible to
calculate the "taux effectif global" of the credit facility made available to
SARL in accordance with Articles L.313-1 and L.313-2 of the French "Code de la
Consommation". SARL hereby acknowledges that the Agent has notified SARL of the
effective all-in cost of the credit facility pursuant to a "taux effectif
global" letter delivered on or before the date hereof.
Section 10.13. Judgment Currency. The obligations of the Borrowers
hereunder and under the Notes to make payments in Dollars or in Euros (the
"Obligation Currency") shall not be discharged or satisfied by any tender or
recovery pursuant to any judgment expressed in or converted into any currency
other than the Obligation Currency except to the extent to which such tender or
recovery shall result in the effective receipt by the Banks of the full amount
of the Obligation Currency expressed to be payable hereunder and under the
Notes, and accordingly such obligations of the Borrowers shall be enforceable as
an alternate or additional cause of action for the purpose of recovery in the
Obligation Currency of the amount (if any) by which such effective receipt shall
fall short of the full amount of the Obligation Currency expressed to
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be payable hereunder and under the Notes and shall not be affected by judgment
being obtained for any other sums due under this Agreement and the Notes.
Section 10.14. Governing Law; Consent to Jurisdiction.
(a) THIS AGREEMENT AND EACH OF THE OTHER CREDIT DOCUMENTS SHALL BE
GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
(b) Any litigation based hereon, or arising out of, under, or in
connection with, this Agreement or any other Credit Document, or any course of
conduct, course of dealing, statements (whether oral or written) or actions of
the Borrowers, the Agent or the Banks relating to this Agreement or any other
Credit Document may be brought and maintained in the courts of the State of New
York sitting in the County of New York or in the United States District Court
for the Southern District of New York. Each of the Borrowers, the Agent and the
Banks hereby expressly and irrevocably submits to the jurisdiction of the courts
of the State of New York sitting in the County of New York and the United States
District Court for the Southern District of New York for the purpose of any such
litigation as set forth above and irrevocably agrees to be bound by any judgment
rendered thereby in connection with such litigation. To the fullest extent
permitted by applicable Legal Requirements, each of the Borrowers, the Agent and
the Banks further irrevocably consents to the service of process, by registered
mail, postage prepaid, or by personal service within or without the State of New
York. Each of the Borrowers, the Agent and the Banks hereby expressly and
irrevocably waives, to the fullest extent permitted by Legal Requirements, any
objection which it may have or hereafter may have to the laying of venue of any
such litigation brought in any such court referred to above and any claim that
any such litigation has been brought in an inconvenient forum. To the extent
that any of the Borrowers, the Agent or the Banks has or hereafter may acquire
any immunity from jurisdiction of any court or from any legal process (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution or otherwise) with respect to itself or its property, each of the
Borrowers, the Agent and the Banks hereby irrevocably waives, to the fullest
extent permitted by applicable Legal Requirements, such immunity in respect of
its obligations under this Agreement and the other Credit Documents.
Section 10.15. Confidentiality. All information and documents
concerning the Borrowers or their respective Subsidiaries supplied by the
Borrowers to the Banks pursuant to this Agreement which are not otherwise in the
public domain shall be held in confidence by the Banks and the Banks shall not
disclose such information and documents to any other Person, except that the
Borrowers hereby authorize the Banks to disclose any information obtained
pursuant to this Agreement (i) to any independent auditors of a Bank, (ii) to
any Person who is an Eligible Assignee and executes and delivers a
confidentiality agreement to the Company and the Agents that is otherwise
consistent with this Section 10.16 (solely for the purpose of evaluating such
proposed participation or assignment) whereby such Eligible Assignee agrees, for
the benefit of the Borrowers, in writing, to be bound by the same
confidentiality obligations as those imposed on the Banks hereunder, and, in the
event that such financial institution does not enter into any proposed
participation, such financial institution agrees to return to the furnishing
Bank all information furnished to it hereunder, (iii) to an Affiliate of the
Bank making
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the disclosure and to any employees of such Bank or such Affiliate on a need to
know basis, and then only to the extent that such Affiliate and employees have
agreed for the benefit of the Borrowers to be bound to the foregoing
confidentiality provisions, and (iv) to all appropriate governmental regulatory
authorities to the extent requested or subpoenaed in accordance with all
applicable notices and procedures, but only to the extent permitted by
applicable laws and regulations, including those applying to classified
material. Upon receipt of a request, demand, or subpoena to disclose any
information to any Person other than governmental bank examiners and independent
auditors of a Bank, the affected Bank will promptly notify, to the extent not
prohibited by applicable law, regulations, or court order, the Borrowers and the
Agent of such request.
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EXECUTED as of the 31st day of January, 2002.
BORROWERS:
SCHWEITZER-MAUDUIT INTERNATIONAL, INC.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
SCHWEITZER-MAUDUIT FRANCE S.A.R.L.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
AGENT:
SOCIETE GENERALE
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
BANKS:
TRANCHE A1 COMMITMENT SOCIETE GENERALE
4,651,893.13
TRANCHE A2 COMMITMENT By:
$3,488,919.85 ------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
TRANCHE B1 COMMITMENT
11,629,732.83
TRANCHE B2 COMMITMENT
$10,456,759.54
TRANCHE A1 COMMITMENT BANQUE DE CHINE PARIS
1,158,997.36
TRANCHE A2 COMMITMENT By:
$869,248.02 ------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
TRANCHE B1 COMMITMENT
2,897,493.41
TRANCHE B2 COMMITMENT
$2,607,744.07
TRANCHE A1 COMMITMENT NATEXIS BANQUES POPULAIRES
4,340,000.00
TRANCHE A2 COMMITMENT By:
$3,255,000.00 ------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
TRANCHE B1 COMMITMENT
10,850,000.00
TRANCHE B2 COMMITMENT By:
$9,765,000.00 ------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
TRANCHE A1 COMMITMENT BNP PARIBAS
1,040,000.00
TRANCHE A2 COMMITMENT By:
$780,000.00 ------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
TRANCHE B1 COMMITMENT
2,600,000.00
TRANCHE B2 COMMITMENT By:
$2,350,000.00 ------------------------------------------
Name:
----------------------------------------
Name:
----------------------------------------
TRANCHE A1 COMMITMENT CAISSE REGIONALE DE CREDIT
1,448,746.70 AGRICOLE MUTUEL DU FINISTERE
TRANCHE A2 COMMITMENT By:
$1,086,560.03 ------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
TRANCHE B1 COMMITMENT
3,621,866.76
TRANCHE B2 COMMITMENT
$3,259,680.08
TRANCHE A1 COMMITMENT SUNTRUST BANK
4,346,240.11
TRANCHE A2 COMMITMENT By:
$3,259,680.08 ------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
TRANCHE B1 COMMITMENT
10,865,600.28
TRANCHE B2 COMMITMENT
$9,779,040.25
TRANCHE A2 COMMITMENT CREDIT LYONNAIS NEW YORK BRANCH
$1,500,000.00
TRANCHE B2 COMMITMENT By:
$4,500,000.00 ------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
TRANCHE A1 COMMITMENT CREDIT LYONNAIS
2,000,000.00
TRANCHE B1 COMMITMENT
5,000,000.00 By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
TRANCHE A1 COMMITMENT CREDIT COMMERCIAL DE FRANCE
1,014,122.69
TRANCHE A2 COMMITMENT By:
$760,592.02 ------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
TRANCHE B1 COMMITMENT
2,535,306.73
TRANCHE B2 COMMITMENT
$2,281,776.06