Exhibit 10.2
AMENDMENT AND RESTATEMENT AGREEMENT
Dated 15 September 2006
for
SOLUTIA SERVICES INTERNATIONAL S.C.A./COMM. V.A.
arranged by
CITIGROUP GLOBAL MARKETS LIMITED
with
CITIBANK INTERNATIONAL PLC
acting as Agent
and
CITIBANK, N.A.
acting as Security Agent
RELATING TO A FACILITY AGREEMENT DATED
26 July 2006
Linklaters
Ref: SBL/SLG
CONTENTS
CLAUSE PAGE
1. Definitions and interpretation...................................1
2. Representations..................................................2
3. Amendment........................................................2
4. Transaction expenses.............................................2
5. Miscellaneous....................................................2
6. Governing law....................................................2
THE SCHEDULES
SCHEDULE PAGE
SCHEDULE 1 The Parties....................................................
SCHEDULE 2 Form of Amended Agreement......................................
THIS AGREEMENT is dated 15 September 2006 and made between:
(1) SOLUTIA EUROPE SA/NA (the "COMPANY");
(2) SOLUTIA SERVICES INTERNATIONAL S.C.A./COMM. V.A. (the "BORROWER");
(3) THE COMPANIES listed in Part I of Schedule 1 as guarantors (the
"ORIGINAL GUARANTORS");
(4) CITIGROUP GLOBAL MARKETS LIMITED as mandated lead arranged (the
"ARRANGER");
(5) THE FINANCIAL INSTITUTIONS listed in Part II of Schedule 1 as Lenders
(the "ORIGINAL LENDERS");
(6) CITIBANK INTERNATIONAL PLC as agent of the other Finance Parties (the
"AGENT"); and
(7) CITIBANK N.A., as security agent for the Secured Parties (the "SECURITY
AGENT").
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement:
"AMENDED AGREEMENT" means the Original Facility Agreement, as
amended and restated in the form set out in Schedule 2 (Form of
Amended Agreement).
"EFFECTIVE DATE" means the date of this Agreement.
"ORIGINAL FACILITY AGREEMENT" means the (euro)200,000,000 Facility
Agreement dated 26 July 2006 between the Company, the Borrower, the
Original Guarantors, the Agent, the Arranger, the Security Agent and
the Original Lenders.
1.2 INCORPORATION OF DEFINED TERMS
(a) Unless a contrary indication appears, a term defined in the Original
Facility Agreement has the same meaning in this Agreement.
(b) The principles of construction set out in the Original Facility
Agreement shall have effect as if set out in this Agreement.
1.3 CLAUSES
In this Agreement any reference to a "Clause" or a "Schedule" is,
unless the context otherwise requires, a reference to a Clause of or
a Schedule to this Agreement.
1.4 THIRD PARTY RIGHTS
A person who is not a party to this Agreement has no right under the
Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy
the benefit of any term of this Agreement.
1.5 DESIGNATION
In accordance with the Original Facility Agreement, each of the
Company and the Agent designate this Agreement as a Finance
Document.
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2. REPRESENTATIONS
Each Obligor makes the Repeating Representations to each Finance
Party but as if references in Clause 18 (Representations) of the
Original Facility Agreement were instead to this Agreement and, on
the Effective Date, to the Amended Agreement.
3. AMENDMENT
3.1 AMENDMENT
With effect from the Effective Date the Original Facility Agreement
shall be amended and restated in the form set out in Schedule 2
(Form of Amended Agreement).
3.2 CONTINUING OBLIGATIONS
The provisions of the Original Facility Agreement and the other
Finance Documents shall, save as amended by this Agreement, continue
in full force and effect.
4. TRANSACTION EXPENSES
The Company shall within three Business Days of demand reimburse the
Agent for the amount of all costs and expenses (including legal
fees) reasonably incurred by the Agent in connection with the
negotiation, preparation, printing and execution of this Agreement
and any other documents referred to in this Agreement.
5. MISCELLANEOUS
5.1 INCORPORATION OF TERMS
The provisions of Clause 30 (Notices) and Clause 37 (Enforcement) of
the Original Facility Agreement shall be incorporated into this
Agreement as if set out in full in this Agreement and as if
references in those clauses to "this Agreement" are references to
this Agreement.
5.2 COUNTERPARTS
This Agreement may be executed in any number of counterparts, and
this has the same effect as if the signatures on the counterparts
were on a single copy of this Agreement.
6. GOVERNING LAW
This Agreement is governed by English law.
This Agreement has been entered into on the date stated at the beginning of
this Agreement.
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SIGNATURES
THE COMPANY
SOLUTIA SERVICES INTERNATIONAL S.C.A./COMM. V. A.
By: KRISTEL DEROOVER
Ad-hoc proxy-holder
ORIGINAL GUARANTORS
SOLUTIA EUROPE SA/NV
By: VEERLE HENDRICKX
Managing Director
CP FILMS VERTRIEBS GmbH
By: ARTHUR BOWYER
Managing Director
ORIGINAL LENDER
CITIBANK, N.A.
By: DEVEN STHANKIYA
THE AGENT
CITIBANK INTERNATIONAL PLC
By: DEVEN STHANKIYA
THE SECURITY AGENT
CITIBANK, N.A.
By: NIALL CAMPBELL
Vice President
THE ARRANGER
CITIGROUP GLOBAL MARKETS LIMITED
By: DEVEN STHANKIYA
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(euro)200,000,000
FACILITY AGREEMENT
dated 26 July 2006
(as amended and restated on 15 September 2006)
for
SOLUTIA SERVICES INTERNATIONAL S.C.A./COMM. V.A.
arranged by
CITIGROUP GLOBAL MARKETS LIMITED
as Arranger
with
CITIBANK INTERNATIONAL PLC
acting as Facility Agent
and
CITIBANK, N.A.
acting as Security Agent
Linklaters
Ref: SBL/CIXT/ALW
CONTENTS
CLAUSE PAGE
SECTION 1
INTERPRETATION
1. Definitions and interpretation..................................1
SECTION 2
THE FACILITIES
2. The Facilities.................................................30
3. Purpose........................................................31
4. Conditions of Utilisation......................................31
SECTION 3
UTILISATION
5. Utilisation....................................................33
SECTION 4
REPAYMENT, PREPAYMENT AND CANCELLATION
6. Repayment......................................................34
7. Prepayment and cancellation....................................34
SECTION 5
COSTS OF UTILISATION
8. Interest.......................................................43
9. Interest Periods...............................................45
10. Changes to the calculation of interest.........................46
11. Fees...........................................................47
SECTION 6
ADDITIONAL PAYMENT OBLIGATIONS
12. Tax gross-up and indemnities...................................48
13. Increased costs................................................51
14. Other indemnities..............................................52
15. Mitigation by the Lenders......................................54
16. Costs and expenses.............................................54
SECTION 7
GUARANTEE AND SECURITY
17. Guarantee and indemnity........................................55
SECTION 8
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
18. Representations................................................60
19. Information undertakings.......................................67
20. Financial covenants............................................74
21. General undertakings...........................................81
22. Events of Default..............................................89
SECTION 9
CHANGES TO PARTIES
23. Changes to the Lenders.........................................93
24. Changes to the Obligors........................................97
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SECTION 10
THE FINANCE PARTIES
25. Role of the Facility Agent and the Arranger....................99
26. Conduct of business by the Finance Parties....................105
27. Sharing among the Finance Parties.............................105
SECTION 11
ADMINISTRATION
28. Payment mechanics.............................................107
29. Set-off.......................................................109
30. Notices.......................................................110
31. Calculations and certificates.................................111
32. Partial invalidity............................................112
33. Remedies and waivers..........................................112
34. Amendments and waivers........................................112
35. Counterparts..................................................113
SECTION 12
GOVERNING LAW AND ENFORCEMENT
36. Governing law.................................................114
37. Enforcement...................................................114
THE SCHEDULES
SCHEDULE PAGE
SCHEDULE 1 The Original Parties...........................................
SCHEDULE 2 Conditions precedent...........................................
SCHEDULE 3 Requests.......................................................
SCHEDULE 4 Mandatory Cost formulae........................................
SCHEDULE 5 Certificates...................................................
SCHEDULE 6 Form of Accession Letter.......................................
SCHEDULE 7 Form of Compliance Certificate.................................
SCHEDULE 8 Disposals......................................................
SCHEDULE 9 Timetables.....................................................
SCHEDULE 10 Security Principles...........................................
SCHEDULE 11 List of Security Documents....................................
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THIS AGREEMENT is dated 26 July 2006 and made between:
(1) SOLUTIA EUROPE SA/NV (the "COMPANY");
(2) SOLUTIA SERVICES INTERNATIONAL S.C.A./COMM V.A. (the "BORROWER");
(3) THE COMPANIES listed in Part I of Schedule 1 as original guarantors (the
"ORIGINAL GUARANTORS");
(4) CITIGROUP GLOBAL MARKETS LIMITED as mandated lead arranger (the
"ARRANGER");
(5) THE FINANCIAL INSTITUTIONS listed in Part II of Schedule 1 as lenders
(the "ORIGINAL LENDERS");
(6) CITIBANK INTERNATIONAL PLC as facility agent of the other Finance
Parties (the "FACILITY AGENT"); and
(7) CITIBANK. N.A. as security agent for the Secured Parties (the "SECURITY
AGENT").
IT IS AGREED as follows:
SECTION 1
INTERPRETATION
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement:
"ACCESSION LETTER" means a document substantially in the form set
out in Schedule 6 (Form of Accession Letter).
"ACCOUNTANTS REPORT" means the report by PricewaterhouseCoopers in
the Agreed Form.
"ACCOUNTING MONTH" means each period of approximately thirty days
ending on the last day of each calendar month in any financial year
of the Company.
"ACCOUNTING QUARTER" means each period of three Accounting Months
ending on or about 31 March, 30 June, 30 September and 31 December
in any financial year of the Company.
"ADDITIONAL COST RATE" has the meaning given to it in Schedule 4
(Mandatory Cost formulae).
"ADDITIONAL DEBT" means, in relation to any Intercompany Debt, any
money, debt or liability due, owing or incurred under or in
connection with:
(a) any refinancing, deferral or extension of that Intercompany
Debt;
(b) any further advance which may be made under any document,
agreement or instrument supplemental to any relevant Finance
Document together with any related interest, fees and costs;
(c) any claim for damages or restitution in the event of
rescission of the Intercompany Debt or otherwise in
connection with any relevant Finance Document;
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(d) any claim against any Obligor flowing from any recovery by
an Obligor or any liquidator, receiver, administrator,
administrative receiver, compulsory manager or other similar
officer of a payment or discharge in respect of that
Intercompany Debt on the grounds of preference or otherwise;
and
(e) any amount (such as post insolvency interest) which would be
included in any of the above but for any discharge, non
provability, unenforceability or non allowability of the
same in any insolvency or other proceedings.
"ADDITIONAL GUARANTOR" means a company which becomes an Additional
Guarantor in accordance with Clause 24 (Changes to the Obligors)
(excluding for the avoidance of doubt any Original Guarantor).
"AFFILIATE" means, in relation to any person, a Subsidiary of that
person or a Holding Company of that person or any other Subsidiary
of that Holding Company.
"AGREED FORM" means, in relation to a document, that:
(a) it is in a form initialled by or on behalf of the Company
and the Facility Agent on or before the signing of this
Agreement for the purposes of identification; or
(b) if not falling within paragraph (a) above, it is in form and
substance satisfactory to the Facility Agent (acting
reasonably) and, in relation to any document which is not a
documentary condition precedent falling within Clause 4.1,
initialled by or on behalf of the Facility Agent for the
purposes of identification, or in relation to a documentary
condition precedent falling within Clause 4.1, notice has
been given by the Facility Agent thereunder.
"AMCIS" means Carbogen Amcis AG (formerly Amcis AG), incorporated in
Switzerland with registered number CH-280.3.916.120-1 and whose
registered office is at Hauptstrasse 159, 4416 Bubendorf,
Switzerland as such company exists at the date of this Agreement.
"APPLICABLE ACCOUNTING PRINCIPLES" means GAAP and practices and
financial reference periods used in the Original Financial
Statements.
"AUTHORISATION" means an authorisation, consent, approval,
resolution, licence, exemption, filing, notarisation or
registration.
"AVAILABLE COMMITMENT" means, in relation to a Facility, a Lender's
Commitment under that Facility minus:
(a) the amount of its participation in any outstanding
Utilisations under that Facility; and
(b) in relation to any proposed Utilisation, the amount of its
participation in any Utilisations that are due to be made
under that Facility on or before the proposed Utilisation
Date.
"AVAILABLE FACILITY" means, in relation to a Facility, the aggregate
for the time being of each Lender's Available Commitment in respect
of that Facility.
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"AVAILABILITY PERIOD" means the period from and including the date
of this Agreement to and including 31 August 2006.
"BANKRUPTCY EMERGENCE" means the time at which any direct or
indirect shareholders of the Company who are or become subject to
proceedings pursuant to Title 11 of the United States Code (the
"Bankruptcy Code") emerge from such proceedings (whether by the
occurrence of the effective date of a chapter 11 plan of
reorganisation, the dismissal of a case under chapter 7 or chapter
11 of the Bankruptcy Code, or otherwise) and are no longer required
to seek bankruptcy court approval for actions taken outside the
ordinary course of business.
"BREAK COSTS" means the amount (if any) by which:
(a) the interest (excluding the Margin and Mandatory Costs (if
any)) which a Lender should have received for the period
from the date of receipt of all or any part of its
participation in a Loan or Unpaid Sum to the last day of the
current Interest Period in respect of that Loan or Unpaid
Sum, had the principal amount or Unpaid Sum received been
paid on the last day of that Interest Period;
exceeds:
(b) the amount which that Lender would be able to obtain by
placing an amount equal to the principal amount or Unpaid
Sum received by it on deposit with a leading bank in the
Relevant Interbank Market for a period starting on the
Business Day following receipt or recovery and ending on the
last day of the current Interest Period.
"BUDGET" means the Business Plan and each budget supplied under and
complying with Clause 19.6 (Annual Budget).
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on
which banks are open for general business in London, Brussels and
which is a TARGET Day.
"BUSINESS PLAN" means the business plan in relation to the Group
prepared by the Company and in the Agreed Form.
"CAPITAL EXPENDITURE" means any expenditure which should in
accordance with the Applicable Accounting Principles be treated as
capital expenditure in the audited consolidated financial statements
of the Group.
"CASH" means any credit balance on any deposit, savings, current or
other account, and any cash in hand, which is:
(a) freely withdrawable on demand;
(b) not subject to any Security (other than pursuant to any
Security Document);
(c) denominated and payable in any freely transferable and
freely convertible currency; and
(d) capable of being remitted to an Obligor.
"CASH EQUIVALENT INVESTMENTS" means:
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(a) securities with a maturity of less than 12 Months from the
date of acquisition issued or fully guaranteed or fully
insured by the Government of the United States or any member
state of the European Union;
(b) commercial paper or other debt securities issued by an
issuer rated at least A-1 by Standard & Poor's Ratings Group
or P-1 by Moody's Investors Service, Inc. or a comparable
rating from an internationally recognised rating agency and
with a maturity of less than 12 Months; and
(c) any other instrument, security or investment approved by the
Majority Lenders; or
(d) certificates of deposit or time deposits of any commercial
bank (which has outstanding debt securities rated as
referred to in paragraph (b) above) and with a maturity of
less than 12 Months,
(e) repurchase agreements having maturities of not more than 90
days from the date of acquisition which are entered into
with major money centre banks which are members of the
Federal Reserve System;
(f) money market accounts maintained with mutual funds having
assets in excess of USD$2,500,000,000;
(g) tax exempt securities rated A or better by Moody's or A+ or
better by Standard & Poor's; or
(h) readily marketable direct obligations issued by any state of
the United States of America or any political subdivision
thereof having one of the two highest rating categories
obtainable from either Moody's or Standard & Poor's,
in each case not subject to any Security or Quasi Security (other
than pursuant to any Security Document), denominated and payable in
any freely transferable and freely convertible currency and the
proceeds of which are capable of being remitted to an Obligor.
"CASH FLOW" has the meaning given to it in Clause 20 (Financial
covenants).
"CHANGE OF CONTROL" has the meaning given to it in Clause 8.5
(Adjustment of Margin).
"CHARGED ASSETS" means the assets over which Security is expressed
to be created pursuant to any Security Document.
"CHARGOR" means any person expressed to create Security pursuant to
any Security Document.
"CLOSING DATE" means the date falling two Business Days immediately
after the first Utilisation.
"COMMITMENT" means a Facility B1 Commitment or a Facility B2
Commitment.
"COMMITMENT LETTER" means the commitment letter attaching the term
sheet dated on or about 8 June 2006 between the Borrower, the
Company, the Arranger and the Facility Agent.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the
form set out in Schedule 7 (Form of Compliance Certificate).
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"CONFIDENTIALITY UNDERTAKING" means a confidentiality undertaking
substantially in the form agreed between the Company and the
Arranger on or prior to the date of this Agreement or in any other
form agreed between the Company and the Facility Agent.
"CURE AMOUNT" has the meaning given to it in Clause 20.3(e)
(Financial covenant calculations).
"DEBT SERVICE" has the meaning given to it in Clause 20 (Financial
covenants).
"DEFAULT" means an Event of Default or any event or circumstance
specified in Clause 22 (Events of Default) which would (with the
lapse of time, the giving of notice, the making of any determination
under the Finance Documents or any combination of any of the
foregoing) be an Event of Default.
"DISRUPTION EVENT" means either or both of:
(a) a material disruption to those payment or communications
systems or to those financial markets which are, in each
case, required to operate in order for payments to be made
in connection with the Facilities (or otherwise in order for
the transactions contemplated by the Finance Documents to be
carried out) which disruption is not caused by, and is
beyond the control of, any of the Parties; or
(b) the occurrence of any other event which results in a
disruption (of a technical or systems-related nature) to the
treasury or payments operations of a Party preventing that,
or any other Party:
(i) from performing its payment obligations under the
Finance Documents; or
(ii) from communicating with other Parties in accordance
with the terms of the Finance Documents,
and which (in either such case) is not caused by, and is beyond the
control of, the Party whose operations are disrupted.
"DIP FINANCING" means the facility agreement dated 16 January 2004
between Solutia Inc., Solutia Business Enterprises, Inc., each
Guarantor (as defined therein), the DIP Lenders and Citicorp USA,
Inc. as collateral agent, administrative agent and documentation
agent as amended from time to time.
"DIP LENDER" means a lender under the DIP Financing.
"DUE DILIGENCE REPORT" means the legal due diligence report by Allen
& Overy LLP in the Agreed Form.
"EBITDA" has the meaning given to it in Clause 20 (Financial
covenants).
"ENVIRONMENT" means living organisms including the ecological
systems of which they form part and the following media:
(a) air (including air within natural or man-made structures,
whether above or below ground);
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(b) water (including territorial, coastal and inland waters,
water under or within land and water in drains and sewers);
and
(c) land (including land under water).
"ENVIRONMENTAL LAW" means all laws and regulations of any relevant
jurisdiction which:
(a) have as a purpose or effect the protection of, and/or
prevention of harm or damage to, the Environment;
(b) provide remedies or compensation for harm or damage to the
Environment; or
(c) relate to Hazardous Substances or health and safety matters.
"ENVIRONMENTAL LICENCE" means any Authorisation required at any time
under Environmental Law.
"ENVIRONMENTAL REPORT" means the report by Environment Resources
Management in the Agreed Form.
"ESCROW AGREEMENT" means the escrow agreement dated on or about the
date of this Agreement between, among others, KBC Bank NV/SA,
Citibank International plc, Citibank N.A., the Borrower, the
Company, Carbogen Amcis AG and CP Films Vertriebs GmBH.
"EURIBOR" means:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the Interest Period of
that Loan), the rate quoted by the Reference Bank or the
arithmetic mean of the rates rounded upwards to four decimal
places if there is more than one Reference Bank as supplied
to the Facility Agent at its request quoted by the Reference
Bank(s) to leading banks in the European interbank market,
as of the Specified Time on the Quotation Day for the offering of
deposits in euro for a period comparable to the Interest Period of
the relevant Loan.
"EURO NOTES" means the (euro)200,000,000 10% senior secured notes
due 2008 issued by the Company.
"EVENT OF DEFAULT" means any event or circumstance specified as such
in Clause 22 (Events of Default).
"EXCESS CASH FLOW" means, for any financial year of the Company,
Cash Flow for that financial year, less:
(a) Debt Service for that financial year;
(b) prepayments of any Loans in that financial year under Clause
7.11 (Voluntary prepayment of Loans);
(c) any amount included in Cash Flow for the Relevant Period
which the Company is permitted to retain under Clause 7.5
(Mandatory prepayment - Net Sale Proceeds); and
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(d) the amount of unspent Capital Expenditure during the current
financial year which is permitted to be carried forward to
the following financial year under Clause 20.2 (Capital
Expenditure).
"EXCLUDED COMPANY" means:
(a) subject to paragraph (b) below, Flexsys and Amcis;
(b) Amcis will, from the date falling 65 days after the Closing
Date, be included as a member of the Group for all purposes
(and excluded from this definition) if it has not been sold
to a third party buyer by way of share sale on arms' length
terms on or before such date.
"FACILITY" means Facility B1 or Facility B2.
"FACILITY B1" means the term loan facility made available under this
Agreement as described in paragraph (a) of Clause 2.1 (The
Facilities).
"FACILITY B1 COMMITMENT" means:
(a) in relation to an Original Lender, the amount in euro set
opposite its name under the heading "Facility B1 Commitment"
in Part II of Schedule 1 (The Original Lenders) and the
amount of any other Facility B1 Commitment transferred to it
under this Agreement; and
(b) in relation to any other Lender, the amount in euro of any
Facility B1 Commitment transferred to it under this
Agreement,
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY B1 LENDER" means:
(a) any Original Facility B1 Lender; and
(b) any bank, financial institution, trust, fund or other entity
which has become a Facility B1 Lender in accordance with
Clause 23 (Changes to the Lenders),
which in each case has not ceased to be a Facility B1 Lender in
accordance with this Agreement.
"FACILITY B1 LOAN" means a loan made or to be made under Facility B1
or the principal amount outstanding for the time being of that loan.
"FACILITY B2" means the term loan facility made available under this
Agreement as described in paragraph (b) of Clause 2.1 (The
Facilities).
"FACILITY B2 COMMITMENT" means:
(a) in relation to an Original Lender, the amount in euro set
opposite its name under the heading "Facility B2 Commitment"
in Part II of Schedule 1 (The Original Lenders) and the
amount of any other Facility B2 Commitment transferred to it
under this Agreement; and
(b) in relation to any other Lender, the amount in euro of any
Facility B2 Commitment transferred to it under this
Agreement,
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to the extent not cancelled, reduced or transferred by it under this
Agreement.
"FACILITY B2 LENDER" means:
(a) any Original Facility B2 Lender; and
(b) any bank, financial institution, trust, fund or other entity
which has become a Facility B2 Lender in accordance with
Clause 23 (Changes to the Lenders),
which in each case has not ceased to be a Facility B2 Lender in
accordance with the terms of this Agreement.
"FACILITY B2 LOAN" means a loan made or to be made under Facility B2
or the principal amount outstanding for the time being of that loan.
"FACILITY OFFICE" means the office or offices notified by a Lender
to the Facility Agent in writing on or before the date it becomes a
Lender (or, following that date, by not less than five Business
Days' written notice) as the office or offices through which it will
perform its obligations under this Agreement.
"FEE LETTER" means any letter or letters dated on or about the date
of this Agreement between, as the case may be, the Arranger and the
Company and/or the Borrower; or the Facility Agent and the Company
and/or the Borrower; or the Security Agent and the Company and/or
the Borrower; setting out any of the fees referred to in Clause 11
(Fees).
"FINANCE DOCUMENT" means this Agreement, each Accession Letter, the
Commitment Letter, each Fee Letter, any Hedging Document, the
Hedging Letter, the Intercreditor Agreement, each Security Document,
the Escrow Agreement and any other document designated as such by
the Facility Agent and the Company.
"FINANCE PARTY" means the Facility Agent, the Arranger, a Lender or
the Security Agent.
"FINANCIAL INDEBTEDNESS" means any indebtedness for or in respect
of:
(a) moneys borrowed;
(b) any amount raised by acceptance under any acceptance credit
facility or dematerialised equivalent;
(c) any amount raised pursuant to any note purchase facility or
the issue of bonds, notes, debentures, loan stock or any
similar debt instrument;
(d) the amount of any liability in respect of any lease or hire
purchase contract which would, in accordance with the
Applicable Accounting Principles, be treated as a finance or
capital lease;
(e) receivables sold or discounted (other than any receivables
to the extent they are sold on a non-recourse basis and for
these purposes, recourse will not include contractual
damages for breach of warranty relating to the condition of
the receivables sold);
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(f) any amount raised under any other transaction (including any
forward sale or purchase agreement) having the commercial
effect of a borrowing;
(g) any derivative transaction entered into in connection with
protection against or benefit from fluctuation in any rate
or price (and, when calculating the value of any derivative
transaction, only the marked to market value shall be taken
into account) for all purposes other than for the purposes
of Clause 22.5 (Cross default) where only the relevant
unpaid amount (if any) shall be taken into account;
(h) any counter-indemnity obligation in respect of a guarantee,
indemnity, bond, standby or documentary letter of credit or
any other instrument issued by a bank or financial
institution;
(i) the amount of any liability in respect of any credit for
goods and services supplied to the Group raised in the
ordinary course of trade outstanding for more than 150 days
after its customary date of payment; and
(j) the amount of any liability in respect of any guarantee for
any of the items referred to in paragraphs (a) to (i) above.
"FLEXSYS" means Flexsys Holding BV whose address is 51010
Zutphenseweg, NL-7418 AJ Deventer, The Netherlands, and whose
company number at the Commercial Register is 38023104.
"FUNDS FLOW MEMORANDUM" means the funds flow memorandum in the
Agreed Form containing details of the flow of funds on the Closing
Date.
"GAAP" means principles, standards and practices in the United
States.
"GERMAN OBLIGOR" means an Obligor incorporated in the Federal
Republic of Germany.
"GROUP" means the Company and its Subsidiaries other than any
Excluded Company or Non-Recourse Subsidiary for the time being. For
the avoidance of doubt, Flexsys does not fall with this definition.
"GROUP STRUCTURE CHART" means the group structure chart in the
Agreed Form.
"GUARANTOR" means an Original Guarantor or an Additional Guarantor.
"HAZARDOUS SUBSTANCE" means any waste, pollutant, contaminant or
other substance (including any liquid, solid, gas, ion, living
organism or noise) that may be harmful to human health or other life
or the Environment or a nuisance to any person or that may make the
use or ownership of any affected land or property more costly.
"HEDGING BANK" means a Lender (or an Affiliate of a Lender) which
has become a party to the Intercreditor Agreement as a Hedging Bank
in accordance with the Intercreditor Agreement.
"HEDGING DOCUMENTS" means the documents entered into between a
member of the Group and a Hedging Bank for the purpose of
implementing the hedging strategy required by the Hedging Letter.
"HEDGING LETTER" means a letter dated on or about the date of this
Agreement between the Arranger and the Company setting out the
hedging strategy agreed in relation to the Facilities.
-9-
"HOLDING ACCOUNT" means the interest bearing account of the Borrower
with Citibank N.A. with number 11648292.
"HOLDING COMPANY" means, in relation to a company, corporation or
other legal entity, any other company, corporation or other legal
entity in respect of which it is a Subsidiary.
"INCREASED COSTS" has the meaning given to it in Clause 13.1
(Increased Costs).
"INFORMATION MEMORANDUM" means the document in the form approved by
the Company concerning the Group which, at the Company's request and
on its behalf, will be prepared in relation to Syndication and
distributed by the Arranger to selected financial institutions.
"INFORMATION PACKAGE" means the Budget, the Business Plan, the
Reports and the Information Memorandum.
"INSURANCE PROCEEDS" has the meaning given to it in Clause 7.6
(Mandatory prepayment - Insurance Proceeds).
"INTELLECTUAL PROPERTY" means all trade marks, service marks, trade
names, domain names, logos, get-up, patents, inventions, registered
and unregistered design rights, copyrights, topography rights,
database rights, rights in confidential information and know-how,
and any associated or similar rights anywhere in the world, which it
now or in the future owns or (to the extent of its interest) in
which it now or in the future has an interest (in each case whether
registered or unregistered and including any related licences and
sub-licences of the same granted by it or to it, applications and
rights to apply for the same).
"INTERCOMPANY DEBT" means all present and future moneys, debts and
liabilities due, owing or incurred by any Intercompany Borrower (as
defined in the Intercreditor Agreement) to any Intercompany Lender
(as defined in the Intercreditor Agreement) (in each case, whether
alone or jointly, or jointly and severally, with any other person,
whether actually or contingently and whether as principal, surety or
otherwise) together with any related Additional Debt.
"INTERCREDITOR AGREEMENT" means the intercreditor agreement entered
into or to be entered into between the Facility Agent, the Security
Agent, the Hedging Banks and the Obligors in the Agreed Form.
"INTEREST PERIOD" means, in relation to a Loan, each period
determined in accordance with Clause 9 (Interest Periods) and, in
relation to an Unpaid Sum, each period determined in accordance with
Clause 8.3 (Default interest).
"JOINT VENTURE" means any joint venture entity, whether a company,
unincorporated firm, undertaking, joint venture, association,
partnership or any other entity.
"LENDER" means a Facility B1 Lender or a Facility B2 Lender.
"LIABILITIES" of a Chargor means all present and future moneys,
debts and liabilities due, owing or incurred by it to any Secured
Party under or in connection with any Secured Document (in each
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case, whether alone or jointly, or jointly and severally, with any
other person, whether actually or contingently and whether as
principal, surety or otherwise).
"LOAN" means a Facility B1 Loan or a Facility B2 Loan.
"MAJORITY LENDERS" means, at any time, a Lender or Lenders:
(a) whose share in the outstanding Loans and whose undrawn
Commitments then aggregate more than 66.67 per cent. of the
aggregate of all the outstanding Loans and the undrawn
Commitments of all the Lenders;
(b) if there is no Loan then outstanding, whose undrawn
Commitments then aggregate more than 66.67 per cent. of the
Total Commitments; or
(c) if there is no Loan then outstanding and the Total
Commitments have been reduced to zero, whose Commitments
aggregated more than 66.67 per cent. of the Total
Commitments immediately before the reduction.
"MANDATORY COST" means the percentage rate per annum calculated by
the Facility Agent in accordance with Schedule 4 (Mandatory Cost
formulae).
"MARGIN" means 2.75 per cent. per annum subject to adjustment in
accordance with Clause 8.5 (Adjustment of Margin).
"MARGIN ADJUSTMENT DATE" has the meaning given to it in Clause 8.5
(Adjustment of Margin).
"MARKET REPORT" means the report by CRA International Inc. in the
Agreed Form.
"MASTER OPERATING AGREEMENT" means the master operating agreement
entered into between Monsanto Company and Solutia, Inc. dated 1
September 1997 as amended from time to time as described in further
detail in the Due Diligence Report.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on or
material adverse change in:
(a) ability of the Obligors, taken as a whole to perform and
comply with their payment obligations under any Finance
Document; or
(b) the ability of any Obligor to perform and comply with the
financial covenants under the Facility Agreement; or
(c) the validity, legality or enforceability of any Finance
Document.
"MATERIAL SUBSIDIARY" means:
(a) a Subsidiary of the Company listed in the lists of Material
Subsidiaries provided to the Facility Agent under Clause 4.1
(Initial conditions precedent);
(b) a Subsidiary of the Company, the total assets, EBITDA or
total revenues of which (unconsolidated where that
Subsidiary itself has Subsidiaries) as at the date at which
its latest audited financial statements were prepared or, as
the case may be, for the financial period to which those
financial statements relate account for 5 per cent. or more
of the
-11-
consolidated total assets, EBITDA or total revenues
of the Group (including for these purposes any Excluded
Company) (all as calculated by reference to the latest
audited consolidated financial statements of the Group);
(c) a Subsidiary of the Company which is a Holding Company of
any Subsidiary in paragraph (b) above; or
(d) a Subsidiary of the Company to which it has been transferred
(whether in a single transaction or a series of transactions
(whether related or not)) the whole or substantially the
whole of the assets of a Subsidiary which immediately prior
to such transaction(s) was a Material Subsidiary.
For the purposes of this definition:
(i) if a Subsidiary becomes a Material Subsidiary under
paragraph (c) above, the Material Subsidiary by which the
relevant transfer was made shall, subject to paragraph (b)
above, cease to be a Material Subsidiary; and
(ii) if a Subsidiary is acquired by the Company after the end of
the financial period to which the latest audited
consolidated financial statements of the Group relate, those
financial statements shall be adjusted as if that Subsidiary
had been shown in them by reference to its then latest
audited financial statements until audited consolidated
financial statements of the Group for the financial period
in which the acquisition is made have been prepared.
"MONTH" means a period starting on one day in a calendar month and
ending on the numerically corresponding day in the next calendar
month, except that:
(a) if the numerically corresponding day is not a Business Day,
that period shall end on the next Business Day in that
calendar month in which that period is to end if there is
one, or if there is not, on the immediately preceding
Business Day; and
(b) if there is no numerically corresponding day in the calendar
month in which that period is to end, that period shall end
on the last Business Day in that calendar month.
The above rules will only apply to the last Month of any period.
"NON-CONSENTING LENDER" has the meaning given to it in Clause 7.13
(Replacement of a Non-Consenting Lender or Non-Funding Lender).
"NON-FUNDING LENDER" has the meaning given to it in Clause 7.13
(Replacement of a Non-Consenting Lender or Non-Funding Lender).
"NON-RECOURSE SUBSIDIARY" means a Subsidiary of the Company which is
designated in writing by the Company to the Facility Agent as a
Non-Recourse Subsidiary and:
(a) is a single purpose company whose sole business comprises
the ownership, creation, development or exploitation of
certain of its assets; and
-12-
(b) the share capital or other ownership interests of which are
organised such that liability for all financial and other
obligations of that subsidiary are limited to that
subsidiary and its assets and without any further recourse
(including the absence of financial support, comfort or
other assistance obligations), whether as a matter of law,
regulation, contract or otherwise, to any other member of
the Group other than (i) recourse falling within paragraph
(q) of the definition of Permitted Security (ii) recourse
falling within paragraph (n) of the definition of Permitted
Guarantee or any (iii) obligations arising under a
commercial contract otherwise permitted by the terms of this
Agreement.
"OBLIGOR" means the Company, the Borrower or a Guarantor.
"ORIGINAL FACILITY B1 LENDER" means a Lender listed in Part II of
Schedule 1 (The Original Lenders) as having a Facility B1
Commitment.
"ORIGINAL FACILITY B2 LENDER" means a Lender listed in Part II of
Schedule 1 (The Original Lenders) as having a Facility B2
Commitment.
"ORIGINAL FINANCIAL STATEMENTS" means the unaudited consolidated
financial statements of the Group for the financial year ended
December 2005 filed by Solutia Inc. with the United States
Securities and Exchange Commission on a Form 8-K on 19 April 2006,
together with such statements for the period January to March 2006
filed by Solutia Inc. with the United States Securities and Exchange
Commission on a Form 8-K on 30 May 2006.
"ORIGINAL OBLIGOR" means the Borrower or an Original Guarantor.
"PARTICIPATING MEMBER STATE" means any member state of the European
Communities that adopts or has adopted the euro as its lawful
currency in accordance with legislation of the European Community
relating to Economic and Monetary Union.
"PARTY" means a party to this Agreement.
"PERFECTION REQUIREMENTS" means the making of the appropriate
registrations, filings or notifications of the Security Documents as
specifically contemplated by the Security Principles.
"PERFECTION REQUIREMENTS LIST" means the list of Perfection
Requirements set out in paragraph 2(e) of part 1 of Schedule 2 of
this Agreement.
"PERMITTED ACQUISITION" means:
(a) the acquisition of, or investment in, any share or interest
in any Permitted Non-Recourse Subsidiary;
(b) the acquisition by a member of the Group of any share or
asset sold, leased, transferred or otherwise disposed of by
another member of the Group in circumstances constituting a
Permitted Disposal provided that the Security Agent, acting
reasonably, is satisfied that the Finance Parties will enjoy
the same or equivalent Security following completion of that
acquisition;
-13-
(c) an acquisition by way of merger on a solvent basis of any
Obligor with any other Obligor provided that the Security
Agent, acting reasonably, is satisfied that the Finance
parties will enjoy the same or equivalent Security following
completion of that acquisition; or
(d) acquisitions or investments where the consideration (when
aggregated with the consideration for each other acquisition
or investment not otherwise permitted under paragraph (a) to
(c) above) does not exceed (euro)5,000,000 in any financial
year of the Group.
"PERMITTED DISPOSAL" means the sale, lease, transfer or other
disposal(s) in each case on arms' length terms, and, in the case of
paragraphs (n) to (p), provided that the Facility Agent has received
in writing a certification of the directors of the disposing company
that any apportionment of disposal proceeds has been carried out on
a fair value basis:
(a) by any member of the Group in the ordinary course of
business of the disposing entity;
(b) as a result of any Permitted Security;
(c) of assets to a Permitted Non-Recourse Subsidiary at a price
not less than full market value;
(d) of obsolete or redundant vehicles, plant and equipment and
which, in the reasonable opinion of the member of the Group
making the sale, transfer or disposal, are not required for
the efficient operation of its business;
(e) of assets in exchange for other assets comparable or
superior as to type, value and quality;
(f) of assets by a Obligor to another member of the Group
provided that the Secured Parties will enjoy the same or
equivalent Security over those assets;
(g) of assets by a member of the Group which is not an Obligor
to another member of the Group which is not an Obligor;
(h) to another member of the Group as part of a Permitted
Merger;
(i) made with the prior written consent of the Majority Lenders;
(j) of Cash for purposes not otherwise prohibited by this
Agreement;
(k) pursuant to a Permitted Sale and Leaseback;
(l) of all or any part of the shares in or assets of CP Films
Vertriebs GmbH, provided that the Facility Agent has
received in writing a certification of the directors of
Solutia Europe S.A./N.V. that all or any part of the shares
in or assets of CP Films Vertriebs GmbH have been disposed
of at fair market value at the time of conclusion of a
legally binding contract in respect of the disposal of CP
Films Vertriebs GmbH;
(m) of Amcis;
(n) of the company referred to in paragraph (a) of Schedule 8
(Disposals);
(o) of the assets referred to in paragraph (b) of Schedule 8
(Disposals);
(p) of the assets referred to in paragraph (c) of Schedule 8
(Disposals); or
-14-
(q) of Cash Equivalent Investments:
(i) for Cash; or
(ii) in exchange for other Cash Equivalent Investments;
(r) pursuant to any Permitted Merger;
(s) where the higher of the market value and consideration
receivable (when aggregated with the higher of the market
value and/or consideration (as the case may be) receivable
for any other sale, lease, transfer or other disposal, other
than any permitted under paragraphs (a) to (r) above, does
not exceed (euro)15,000,000 (or its equivalent in another
currency or currencies).
"PERMITTED FINANCIAL INDEBTEDNESS" means:
(a) any Financial Indebtedness arising under any Finance
Document;
(b) any Financial Indebtedness arising under a Permitted Loan or
a Permitted Guarantee;
(c) any Financial Indebtedness arising under a Permitted Hedging
Transaction;
(d) any Financial Indebtedness incurred by a Permitted
Non-Recourse Subsidiary; and
(e) any Financial Indebtedness under finance or capital leases
of vehicles, plant, equipment or computers, where the
aggregate capital value of all the items so leased by
members of the Group does not exceed (euro)2,500,000 or its
equivalent at any time;
(f) any Financial Indebtedness expressly permitted by the
Majority Lenders;
(g) any Financial Indebtedness arising under a Permitted Sale
and Leaseback;
(h) any Financial Indebtedness arising from factoring
receivables on a recourse basis the aggregate amount of
which does not exceed (euro)5,000,000 or its equivalent at
any time;
(i) any Financial Indebtedness arising under the Permitted
Revolving Credit Facility;
(j) any Financial Indebtedness under the intra-group loans set
out in Schedule 7 of the Due Diligence Report on the terms
as at the date of this Agreement or any refinancing of those
loans where the principal amount of such loans cannot be
increased and the terms of such loans cannot be on terms
more onerous than the existing loans;
(k) any Financial Indebtedness arising from the honouring by a
bank or other financial institution of a cheque, draft or
similar instrument inadvertently (except in the case of
daylight overdrafts) drawn against insufficient funds in the
ordinary course of business provided that such Financial
Indebtedness is discharged within 3 Business Days of
occurrence; or
(l) any Financial Indebtedness not falling within paragraphs (a)
to (k) above where the aggregate outstanding principal
amount of which across the Group does not at any time exceed
(euro)5,000,000 (or its equivalent in another currency or
currencies).
-15-
"PERMITTED GUARANTEE" means:
(a) any guarantee arising under the Finance Documents;
(b) any guarantee issued by an Obligor in respect of the
Financial Indebtedness of another Obligor;
(c) any guarantee issued by a member of the Group which is not
an Obligor in respect of the Financial Indebtedness of
another member of the Group which is not an Obligor;
(d) any guarantee issued by a member of the Group which is not
an Obligor in respect of the Financial Indebtedness of an
Obligor;
(e) any guarantee issued by a member of the Group in respect of
the liabilities or obligations of a Permitted Non-Recourse
Subsidiary;
(f) any guarantee issued by a member of the Group on arm's
length terms (including any counter-indemnity obligation)
and in the ordinary course of its trading, not in respect of
Financial Indebtedness;
(g) any customary indemnity in relation to a Permitted Hedging
Transaction;
(h) in respect of a netting or set-off arrangement entered into
by a member of the Group in the ordinary course of its
banking arrangements for the purpose of netting debit and
credit balances for members of the Group, provided that the
arrangement does not permit credit balances of Obligors to
be netted or set off against debit balances of members of
the Group which are not Obligors and the arrangement does
not give rise to Security or Quasi Security over the assets
of Obligors in support of liabilities of members of the
Group which are not Obligors; or
(i) guarantees by Obligors in respect of Permitted Financial
Indebtedness of other Obligors;
(j) the endorsement of negotiable instruments in the ordinary
course of trade;
(k) the (euro)590,904 guarantee issued by the Company in favour
of OVAM and any amendment or increase to the amount
guaranteed as required by Belgian law;
(l) any guarantee issued by an Obligor in relation to the
Financial Indebtedness of a member of the Group which is not
an Obligor provided that the aggregate principal amount
guaranteed at any time does not, when aggregated with:
(i) the amount of any loans outstanding at that time
which are permitted under paragraph (g) of the
definition of Permitted Loans; and
(ii) the amount of any shares issued at that time which
are permitted under paragraph (b) of the definition
of Permitted Share Transaction, (when aggregated
with all amounts previously paid in respect of any
such share issues),
exceed (euro)5,000,000 (or its equivalent in another currency
or currencies);
-16-
(m) any guarantee not falling within paragraphs (a) to (l) above
where that guarantee is an existing guarantee as set out in
Part B of Schedule 7 of the Due Diligence Report on the
terms as at the date of this Agreement or the replacement or
amendment of such guarantee where (A) the principal amount
of such guarantees (as amended or replaced) cannot be
increased and (B) the terms of such guarantees cannot be on
more onerous terms than the existing guarantees;
(n) any guarantee not falling within paragraphs (a) to (m) above
where the aggregate liability (whether actual or contingent)
of members of the Group under all such guarantees does not,
when aggregated with the aggregate principal amount of any
loans outstanding at that time which are permitted under
paragraph (j) of the definition of Permitted Loan, at any
time exceed (euro)5,000,000 (or its equivalent in another
currency or currencies); or
(o) any guarantee given in respect of the obligations of a
Non-Recourse Subsidiary given by its direct Holding Company
provided that the recourse of the beneficiary in respect of
that guarantee (by contract, law or otherwise) is limited to
the shares in that Non-Recourse Subsidiary.
"PERMITTED HEDGING TRANSACTION" means:
(a) any derivative transaction required by the Hedging Letter
and documented by a Hedging Document and any replacement or
extension (on similar terms and up to the maximum amount of
the Financial Indebtedness under the Finance Documents);
(b) any unsecured derivative transaction to hedge actual or
projected interest or forward exposures arising in the
ordinary course of business of a member of the Group and not
for speculative purposes; or
(c) existing unsecured currency hedging on the terms as at, and
entered into prior to, the date hereof.
"PERMITTED LOAN" means:
(a) any trade credit extended by any member of the Group to its
customers in the ordinary course of its trading activities
requiring payment within 150 days;
(b) a loan to a Restricted Person provided that:
(i) at the time such loan is made the aggregate of:
(A) the principal available amount of the
Permitted Revolving Credit Facility (if any)
at the date it was made available; and
(B) the daily average Cash on the Company's
balance sheet over the past 30 days prior to
the date of making such loan,
is equal to or greater than (euro)25,000,000;
-17-
(ii) the principal amount of all such loans does not
exceed, when aggregated with all aggregate dividends
referred to in paragraph (b)(i) of the definition of
Permitted Payment an amount equal to the aggregate
of (A) the principal available amount of the
Permitted Revolving Credit Facility (if any) at the
date it was made available, (B) (euro)10,000,000 (or
its equivalent in another currency or currencies)
and (C) Retained Cash (to the extent it has not been
applied or committed to be applied in accordance
with this Agreement for another purpose) provided
that:
(iii) any loan funded to the extent set out in paragraph
(b)(ii)(B) above is made to a Restricted Person to
which the circumstances contemplated in Clauses 22.6
(Insolvency) - 22.8 (Creditors' process) do not
apply.
(c) a loan made by an Obligor to another Obligor;
(d) a loan made by a member of the Group which is not an Obligor
to another member of the Group which is not an Obligor;
(e) a loan made by a member of the Group which is not an Obligor
to an Obligor;
(f) a loan made to a Permitted Non-Recourse Subsidiary;
(g) a loan made by an Obligor to another member of the Group
which is not an Obligor provided that the aggregate
principal amount of all such loans outstanding at any time
does not, when aggregated with:
(i) the amount of any guarantees outstanding at that
time which are permitted under paragraph (i) of the
definition of Permitted Guarantees; and
(ii) the amount of any shares issued at that time which
are permitted under paragraph (b) of the definition
of Permitted Share Transaction (when aggregated with
all amounts previously paid in respect of any such
share issues),
exceed (euro)5,000,000 (or its equivalent in another
currency or currencies; or
(h) any loan as set out in Part A of Schedule 7 of the Due
Diligence Report in the form as at the date of this
Agreement and any amendment or refinancing of such loan,
provided that the principal amount of such loan is not
increased and any amendment to the terms of the loan is no
less favourable to the creditor.
(i) a loan from a member of the Group to its employees provided
that the aggregate amount of loans to directors or employees
of members of the Group does not exceed (euro)10,000 at any
time;
(j) any loan not falling within paragraphs (a) to (i) above the
aggregate principal amount of which at any time does not,
when aggregated with the aggregate principal amount of the
Financial Indebtedness under any such loans and the
aggregate liability (whether actual or contingent) of any
guarantees at that time which are permitted under paragraph
(m)(ii) of the
-18-
definition of Permitted Guarantee, exceed (euro)5,000,000
(or its equivalent in another currency or currencies).
"PERMITTED MERGER" means:
(a) an acquisition by way of merger provided that the
acquisition is a Permitted Acquisition; or
(b) an amalgamation, demerger, merger, consolidation or
corporate reconstruction on a solvent basis of a member of
the Group (not involving the Company or the Borrower) where
all of the business and assets of that member remain within
the Group and, if that member of the Group was an Obligor
immediately prior to that amalgamation, demerger, merger,
consolidation or corporate reconstruction, all of the
business and assets of that member are retained by one or
more other Obligors,
and:
(A) at that time no Event of Default has occurred and is
continuing or will arise as a result of such
amalgamation, demerger, merger, consolidation or
corporate reconstruction;
(B) the surviving entity of that amalgamation, demerger,
merger, consolidation or corporate reconstruction is
liable for the obligations of the member of the
Group is has merged with;
(C) the surviving entity of that amalgamation, demerger,
merger, consolidation or corporate reconstruction is
incorporated in the same jurisdiction as that member
of the Group; and
(D) the Facility Agent and the Security Agent are given
30 Business Days' notice by the Company of that
proposed amalgamation, demerger, merger,
consolidation or corporate reconstruction and the
Security Agent, acting reasonably, is satisfied that
the Finance Parties will enjoy the same or
equivalent Security over the same assets and over
that member of the Group and the shares in it (or
the shares of the surviving entity).
(c) Any other amalgamation, demerger, merger, consolidation or
corporate reconstruction approved by the Majority Lenders.
"PERMITTED NON-RECOURSE SUBSIDIARY" means a Non-Recourse Subsidiary:
(a) which is incorporated or established after the date of this
Agreement;
(b) where no Default is continuing on the date of the
acquisition of, or investment in, or transfer or loan to, or
guarantee, Security or Quasi Security for the obligations
of, the Non-Recourse Subsidiary or would occur as a result
of the acquisition of or investment in, or transfer or loan
to, or guarantee, Security or Quasi Security for the
obligations of, a Non-Recourse Subsidiary; and
-19-
(c) the amount invested in or paid to acquire any share or
interest in, or value of assets transferred to, or lent to
or the actual or contingent liability under any guarantee,
Security or Quasi Security, does not exceed in aggregate
(euro)2,500,000 (or its equivalent in another currency or
currencies).
"PERMITTED PAYMENT" means:
(a) approximately $9,000,000 (or its equivalent in another
currency or currencies) payment of an intercompany
receivable by the Company to Solutia Inc. immediately after
the Closing Date; or
(b) any dividend:
(i) by the Company to its shareholders as at the date of
this Agreement in an amount not exceeding, when
aggregated with any loans referred to in paragraph
(b) of the definition of Permitted Loan, the maximum
amount set out in that paragraph and subject to the
conditions set out in paragraph (b)(i) and (iii) of
the definition of Permitted Loan;
(ii) to Solutia Inc. in its capacity as a minority
shareholder in certain Subsidiaries of the Company
to permit conformity with Belgian law in an amount
not exceeding, when aggregated with all other such
dividends, (euro)500,000 (or its equivalent in
another currency or currencies) in any financial
year of the Company;
(c) any payment, investment, dividend or distribution of any
kind expressly permitted by the Majority Lenders;
(d) any payment in the ordinary course of trading in relation to
licence fees for the use of Intellectual Property.
"PERMITTED REVOLVING CREDIT FACILITY" means a revolving credit
facility to be made available to the Borrower under the Finance
Documents which satisfies all of the following terms and has been
approved by the DIP Lenders or any other creditors in respect of
Financial Indebtedness of any Restricted Person (to the extent
required by the terms of any financing in relation thereto):
(a) it is provided to the Obligors by a Finance Party or a bank
or financial institution which has a rating for its long
term unsecured and non-credit enhanced debt obligations of
BBB or higher by Standard & Poor's or Fitch or Baa or higher
by Moody's or a comparable rating from an internationally
recognised credit rating agency (the "RCF LENDER");
(b) the aggregate principal amount of the commitments of that
facility do not at any time exceed (euro)20,000,000,
although the facility may be drawn in other currencies as
agreed between the Company and the RCF Lender;
(c) the termination date of the facility is no earlier than the
Termination Date;
(d) the margin is no greater than 2.25 per cent. per annum;
-20-
(e) the commitment fees shall not exceed an annual rate equal to
50 per cent. of the margin of the facility;
(f) the facility ranks pari passu as to payments and security
with the Facility;
(g) the facility must be paid down to zero (net of any Cash and
Cash Equivalent Investments held by a member of the Group)
for a period of 5 Business Days once in each financial year
of the Company; and
(h) the facility is documented within this Agreement in
accordance with usual market practice.
"PERMITTED SALE AND LEASEBACK" means the sale and leaseback of the
real estate assets at Rue Laid Burniat 3, 1348, Ottignies,
Louvain-la-Neuve, Belgium.
"PERMITTED SECURITY" means:
(a) any Security or Quasi Security created pursuant to any
Finance Document;
(b) any netting or set-off arrangement entered into under a
Permitted Hedging Transaction where the obligations of the
parties are calculated by reference to net exposure under
that Permitted Hedging Transaction;
(c) any Security or Quasi Security over or affecting any asset
acquired by a member of the Group after the date of this
Agreement, if:
(i) the Security or Quasi Security was not created in
contemplation of the acquisition of that asset by a
member of the Group;
(ii) the principal amount secured has not been increased
in contemplation of or since the acquisition of that
asset by a member of the Group; and
(iii) the Security or Quasi Security is removed or
discharged within six Months of the date of
acquisition of such asset;
(d) any netting or set-off arrangement entered into by a member
of the Group in the ordinary course of its banking
arrangements for the purpose of netting debit and credit
balances of members of the Group, provided that the
arrangement does not permit credit balances of Obligors to
be netted or set off against debit balances of members of
the Group which are not Obligors and the arrangement does
not give rise to other Security or Quasi Security over the
assets of Obligors in support of liabilities of members of
the Group which are not Obligors;
(e) any Quasi Security arising as a result of a sale, transfer
or other disposal which is a Permitted Disposal;
(f) any lien (or in relation to standard terms and conditions of
any bank in Belgium or Germany, pledge) arising by operation
of law or any lien or retention of title arrangement arising
by a contract having an equivalent effect (including those
arising under the standard terms and conditions of any bank
with which any member of the Group is permitted to have
accounts
-21-
under this Agreement) and in the ordinary course of business
and not as a result of any default or omission by any member
of the Group unless being contested in good faith and
adequate reserves have been set aside for payment thereof in
accordance with GAAP;
(g) any Security or Quasi Security entered into in connection
with the Euro Notes provided such Security or Quasi Security
is removed or discharged on the Closing Date;
(h) any Security or Quasi Security:
(i) created after the commencement of legal proceedings
with a view to preserving the status quo between the
litigants pending the outcome of those proceedings,
provided that such Security or Quasi Security does
not secure Financial Indebtedness exceeding in
aggregate (euro)1,000,000 (or its equivalent in
another currency or currencies) at any time and is
released forthwith upon final determination of such
litigation; or
(ii) arising pursuant to an order of attachment,
distraint, garnishee or injunction restraining
disposal of assets or similar legal process arising
in connection with court proceedings being contested
by the relevant member of the Group in good faith,
provided that, in the case of both sub-paragraphs (i)(i)
and (i)(ii), such Security or Quasi Security shall be
created or arise solely pursuant to a legal obligation or
requirement;
(i) any Security or Quasi Security created with the prior written
consent of the Majority Lenders;
(j) any Security or Quasi Security over goods, documents of title to
goods and related documents and insurances and their proceeds to
secure liabilities of any member of the Group in respect of a letter
of credit or other similar instrument issued for all or part of the
purchase price and costs of shipment, insurance and storage of goods
acquired by any member of the Group in the ordinary course of
trading or business;
(k) any Security or Quasi Security securing the permitted refinancing of
any Financial Indebtedness allowed to be secured in accordance with
paragraphs (a) and (c) above where the principal amount secured has
not been increased above the then outstanding amount of Financial
Indebtedness refinanced;
(l) any lien (including for the avoidance of doubt, any legal mortgage
("wettelijke hypotheek")) for taxes, assessments and governmental
charges with respect of which adequate reserves have been set aside
for the payment thereof in accordance with GAAP and with respect to
which (i) such lien for taxes is not more than 30 days overdue, or
(ii) if such lien is more than 30 days overdue, it is being
contested in good faith and adequate reserves have been set aside
for the payment thereof in accordance with GAAP;
(m) easements, zoning restrictions and similar encumbrances on real
property and minor irregularities in the title thereto that do not
(i) secure obligations for the payment of money or (ii) materially
impair the value of such property or its use by any member of the
Group in the ordinary course of business;
-22-
(n) any Security or Quasi Security arising under any retention of title,
hire purchase or conditional sale arrangement or arrangements having
similar effect in respect of goods supplied to a member of the Group
in the ordinary course of business and not as a result of any
default or omission by any member of the Group;
(o) any Quasi Security arising as a result of any factoring of
receivables permitted under paragraph (h) of the definition of
Permitted Financial Indebtedness;
(p) any Security or Quasi Security created or subsisting to secure any
obligations incurred in order to comply with the requirements of
Section 8a of the German Partial Retirement Act
(Altersteilzeitgesetz) and/or Section 7d of the German
Sozialgesetzbuch IV;
(q) any Security created over the shares in a Non-Recourse Subsidiary;
and
(r) any Security or Quasi Security securing indebtedness the principal
amount of which (when aggregated with the principal amount of any
other indebtedness which has the benefit of Security or Quasi
Security given by any member of the Group other than any permitted
under paragraphs (a) to (q) above) does not at any time exceed
(euro)1,500,000 (or its equivalent in another currency or
currencies).
"PERMITTED SHARE TRANSACTION" means:
(a) the reduction by the Company or any of its Subsidiaries of its share
capital by way of incorporating previous losses or any capital
increase by the Company or any of its subsidiaries by way of an
incorporation of reserves with or without the issuance of new shares
provided that in each case (i) there is no impact on cash available
to such person as a result thereof, (ii) such reduction does not
have a prejudicial effect on the Security granted pursuant to the
Security Documents, (iii) prior written notice is given to the
Facility Agent; and (ii) there is no resulting or outstanding Event
of Default; or
(b) the issue of ordinary and fully paid up shares, provided (in the
case of a Subsidiary of the Company) those shares are:
(i) the subject of Security in favour of the Secured Parties on
terms pursuant to the Security Documents; and
(ii) where such shares are issued by a member of the Group which
is not an Obligor to an Obligor, the aggregate principal
amount paid in respect of such shares, does not when
aggregated with:
(A) all amounts previously paid in respect of any such
share issues; and
(B) the amount of any loans outstanding at that time
which are permitted under paragraph (g) of the
definition of Permitted Loans; and
(C) the amount of any guarantees outstanding at that
time which are permitted under paragraph (i) of the
definition of Permitted Guarantees
exceed (euro)2,500,000 (or its equivalent in another
currency or currencies);
-23-
(c) any issue of Shares authorised by the Majority Lenders in
writing.
"PHARMA BUSINESS" means Solutia, Inc.'s pharmaceutical services
business, owned and operated primarily by Amcis, which provides
leading pharmaceutical companies with pharmaceutical development
expertise, including process research and manufacturing services,
which allows pharmaceutical companies to bridge the gap from
discovery of new drugs to the manufacturing of those drugs.
"PREPAYMENT ACCOUNT" means the interest bearing account of the
Borrower with Citibank N.A. with account number 11648306.
"PREPAYMENT DATE" has the meaning given to it in Clause 7.9
(Prepayment Account).
"QUALIFYING LENDER" has the meaning given to it in Clause 12 (Tax
gross-up and indemnities).
"QUASI SECURITY" means a transaction under which any member of the
Group will:
(a) sell, transfer or otherwise dispose of any of its assets on
terms whereby they are or may be leased to or re-acquired by
any other member of the Group;
(b) sell, transfer or otherwise dispose of any of its
receivables on recourse terms;
(c) enter into any arrangement under which money or the benefit
of a bank or other account may be applied, set-off or made
subject to a combination of accounts; or
(d) enter into any other preferential arrangement having a
similar effect,
in circumstances where the arrangement or transaction is entered
into primarily as a method of raising Financial Indebtedness or of
financing the acquisition of an asset.
"QUOTATION DAY" means, in relation to any period for which an
interest rate is to be determined two TARGET Days before the first
day of that period unless market practice differs in the Relevant
Interbank Market for a currency, in which case the Quotation Day for
that currency will be determined by the Facility Agent in accordance
with market practice in the Relevant Interbank Market (and if
quotations for that currency and period would normally be given by
leading banks in the Relevant Interbank Market on more than one day,
the Quotation Day will be the last of those days).
"RECEIPT DATE" has the meaning given to it in Clause 7.9 (Prepayment
Account).
"REFERENCE BANKS" means the principal office of Citibank, N.A., or
such other banks as may be appointed by the Facility Agent in
consultation with the Company.
"REINVESTMENT PREPAYMENT DATE" has the meaning given to it in Clause
7.8 (Holding Account).
"REINVESTMENT RECEIPT DATE" has the meaning given to it in Clause
7.8 (Holding Account).
"RELATED FUND" means, in relation to a trust, fund or other entity,
another trust, fund or other entity which is:
-24-
(a) regularly engaged in or established for the purpose of
making, purchasing or investing in loans, securities or
other financial assets; and
(b) has the same fund manager or asset manager or is owned by
the same person as the first trust, fund or other entity.
"RELEVANT INTERBANK MARKET" means the European interbank market.
"RELEVANT JURISDICTION" means, in relation to an Obligor:
(a) its jurisdiction of incorporation; and
(b) the jurisdiction whose laws govern any of the Security
Documents entered into by it.
"RELEVANT PERIOD" has the meaning given to it in Clause 20.4
(Definitions).
"REPEATING REPRESENTATIONS" means each of the representations set
out in Clause 18.1 (Status), Clause 18.2 (Binding obligations),
Clause 18.4 (Power and authority) to Clause 18.6 (Governing law and
enforcement), Clause 18.12 (Financial statements) to Clause 18.18
(Group structure), Clause 18.20 (Shares) and Clause 18.21(a) and (b)
(Intellectual property).
"REPORTS" means the documents listed in paragraph 5 of Part 1 of
Schedule 2 (Conditions Precedent).
"RESERVATIONS" means any general principles of law limiting the
obligations of any Obligor which are specifically referred to in any
legal opinion delivered pursuant to Clause 4 (Conditions of
Utilisation) or Clause 24 (Changes to the Obligors).
"RESTRICTED PERSON" means Solutia Inc. and any Subsidiary of Solutia
Inc. which is not a member of the Group.
"RETAINED CASH" means any Excess Cash Flow that the Company is not
required to prepay under Clause 7.7 (Mandatory Prepayment - Excess
Cash Flow) in relation to any financial year of the Company until it
has been applied or committed to be applied in any of the way
contemplated in paragraphs (a) to (f) below:
(a) in satisfaction of the purchase price of a Permitted
Acquisition;
(b) in payment of Capital Expenditure under Clause 20.2 (Capital
Expenditure);
(c) in or towards a Permitted Payment;
(d) in or towards a Permitted Non-Recourse Subsidiary;
(e) in making a loan falling within paragraph (b) of the
definition of Permitted Loan; or
(f) any other payment permitted to be made under this Agreement
from Retained Cash;
"SALE" has the meaning given to it in Clause 7.2 (Sale).
"SCREEN RATE" means the percentage rate per annum determined by the
Banking Federation of the European Union for the relevant period,
displayed on the appropriate page of the Telerate screen. If
-25-
the agreed page is replaced or service ceases to be available, the
Facility Agent may specify another page or service displaying the
appropriate rate after consultation with the Company and the
Lenders.
"SECURED DOCUMENTS" means the Finance Documents and the Hedging
Documents.
"SECURED PARTY" means a Finance Party or a Hedging Bank.
"SECURITY" means a mortgage, charge, pledge, lien or other security
interest securing any obligation of any person or any other security
interest.
"SECURITY DOCUMENTS" means:
(a) the documents listed in paragraph 2 of Part I and paragraph
13 of Part II of Schedule 2 (Conditions precedent); and
(b) any other security document that may at any time be given as
security for any of the Liabilities pursuant to or in
connection with any Secured Document.
"SECURITY PRINCIPLES" means the principles in the Agreed Form set
out in Schedule 9 (Security Principles).
"SECURITY PROPERTY" has the meaning given to it in the Intercreditor
Agreement.
"SELECTION NOTICE" means a notice substantially in the form set out
in Part II of Schedule 3 (Requests) given in accordance with Clause
9 (Interest Periods) in relation to a Facility.
"SOLUTIA INC." means Solutia Inc. incorporated in Delaware with
Federal Employer ID Number 43-1891797 and whose registered office is
at 575 Maryville Centre Drive, P.O. Box 66760, St. Louis, MO
63166-7670, USA as such company exists at the date of this
Agreement.
"SPECIFIED TIME" means a time determined in accordance with Schedule 9
(Timetables).
"SUBSIDIARY" means in relation to any company, corporation or other
legal entity, (a "HOLDING COMPANY"), a company, corporation or other
legal entity:
(a) which is controlled, directly or indirectly, by the holding
company;
(b) more than half the issued share capital of which is
beneficially owned, directly or indirectly, by the holding
company; or
(c) which is a subsidiary of another Subsidiary of the holding
company,
and, for this purpose, a company or corporation shall be treated as
being controlled by another if that other company or corporation is
able to determine the composition of the majority of its board of
directors or equivalent body. For the avoidance of doubt Flexsys
does not fall within this definition.
"SYNDICATION" means general syndication of the Facilities.
"SYNDICATION DATE" means the earlier of:
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(a) the date 3 months after the later of the date of the
Facility Agreement and the date of commencement of
syndication which will be commenced as soon as possible and
no later than the Closing Date; and
(b) the date (as determined by the Arranger and notified to the
Company) on which Syndication has been completed and the
additional syndicate members have become bound by this
Agreement.
"TARGET" means Trans-European Automated Real-time Gross Settlement
Express Transfer payment system.
"TARGET DAY" means any day on which TARGET is open for the
settlement of payments in euro.
"TAX" means any tax, levy, impost, duty or other charge or
withholding of a similar nature (including any penalty or interest
payable in connection with any failure to pay or any delay in paying
any of the same).
"TAXES ACT" means the Income and Corporation Taxes Act 1988.
"TAX PAYMENT" has the meaning given to it in Clause 12.1
(Definitions).
"TAX STATUS CERTIFICATE" means a certificate substantially in the
form set out in Schedule 5 Part II (Form of Tax Status Certificate).
"TERMINATION DATE" means the date which is 5 years after the Closing
Date.
"TOTAL COMMITMENTS" means the aggregate of the Total Facility B1
Commitments and the Total Facility B2 Commitments, being
(euro)200,000,000 at the date of this Agreement.
"TOTAL FACILITY B1 COMMITMENTS" means the aggregate of the Facility
B1 Commitments, being (euro)160,000,000 at the date of this
Agreement.
"TOTAL FACILITY B2 COMMITMENTS" means the aggregate of the Facility
B2 Commitments, being (euro)40,000,000 at the date of this
Agreement.
"TRANSFER CERTIFICATE" means a certificate substantially in the form
set out in Schedule 5 Part I (Form of Transfer Certificate) or any
other form agreed between the Facility Agent and the Company.
"TRANSFER DATE" means, in relation to a transfer, the later of:
(a) the proposed Transfer Date specified in the Transfer
Certificate; and
(b) the date on which the Facility Agent executes the Transfer
Certificate.
"UNPAID SUM" means any sum due and payable but unpaid by an Obligor
under the Finance Documents.
"UTILISATION" means a Loan.
"UTILISATION DATE" means the date on which a Utilisation is, or is
to be, made.
-27-
"UTILISATION REQUEST" means a notice substantially in the form set
out in Part I of Schedule 3 (Requests).
"VAT" means value added tax as provided for in the Value Added Tax
Act 1994 and any other tax of a similar nature.
1.2 CONSTRUCTION
(a) Unless a contrary indication appears, any reference in this
Agreement to:
(i) the "FACILITY AGENT", the "ARRANGER", any "FINANCE PARTY",
the "HEDGING BANK", any "LENDER", any "OBLIGOR", any "PARTY"
or the "SECURITY AGENT" shall be construed so as to include
its successors in title, permitted assigns and permitted
transferees;
(ii) "ASSETS" includes present and future properties, revenues
and rights of every description;
(iii) "DOLLARS" means the lawful currency for the time being of
the United States of America.
(iv) "GUARANTEE" means any guarantee, letter of credit, bond,
indemnity or similar assurance against loss, or any
obligation, direct or indirect, actual or contingent, to
purchase or assume any indebtedness of any person or to make
an investment in or loan to any person or to purchase assets
of any person where, in each case, such obligation is
assumed in order to maintain or assist the ability of such
person to meet its indebtedness;
(v) a "SECURED DOCUMENT" or any other agreement or instrument is
a reference to that Secured Document or other agreement or
instrument as amended, novated, supplemented, extended,
restated (however fundamentally and whether or not more
onerous) or replaced and includes any change in the purpose
of, any extension of or any increase in any facility or the
addition of any new facility under that Secured Document or
other agreement or instrument;
(vi) "INDEBTEDNESS" includes any obligation (whether incurred as
principal or as surety) for the payment or repayment of
money, whether present or future, actual or contingent;
(vii) a "PERSON" includes any person, firm, company, corporation,
government, state or agency of a state or any association,
trust or partnership (whether or not having separate legal
personality) or two or more of the foregoing;
(viii) a "REGULATION" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law but, if not having force of law, one that is
customarily complied with in the relevant jurisdiction of
any governmental, intergovernmental or supranational body,
agency, department or regulatory, self-regulatory or other
authority or organisation;
(ix) "SHARES" or "SHARE CAPITAL" includes equivalent ownership
interests (and "SHAREHOLDER" and similar expressions shall
be construed accordingly);
(x) a provision of law is a reference to that provision as
amended or re-enacted; and
(xi) a time of day is a reference to London time.
-28-
(b) Section, Clause and Schedule headings are for ease of reference
only.
(c) Unless a contrary indication appears, a term used in any other
Finance Document or in any notice given under or in connection with
any Finance Document has the same meaning in that Finance Document
or notice as in this Agreement.
(d) A Default or an Event of Default is "CONTINUING" if it has not been
remedied or waived.
1.3 THIRD PARTY RIGHTS
A person who is not a Party has no right under the Contracts (Rights
of Third Parties) Act 1999 to enforce or to enjoy the benefit of any
term of this Agreement.
1.4 INTERCREDITOR AGREEMENT
This Agreement is subject to the Intercreditor Agreement. In the
event of any inconsistency between this Agreement and the
Intercreditor Agreement, the Intercreditor Agreement shall prevail.
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SECTION 2
THE FACILITIES
2. THE FACILITIES
2.1 THE FACILITIES
Subject to the terms of this Agreement:
(a) the Lenders make available to the Borrower a term loan
facility in an aggregate amount equal to the Facility B1
Commitments; and
(b) the Lenders make available to the Borrower a term loan
facility in an aggregate amount equal to the Facility B2
Commitments.
2.2 FINANCE PARTIES' RIGHTS AND OBLIGATIONS
(a) The obligations of each Finance Party under the Finance Documents
are several. Failure by a Finance Party to perform its obligations
under the Finance Documents does not affect the obligations of any
other Party under the Finance Documents. No Finance Party is
responsible for the obligations of any other Finance Party under the
Finance Documents.
(b) The rights of each Finance Party under or in connection with the
Finance Documents are separate and independent rights and any debt
arising under the Finance Documents to a Finance Party from an
Obligor shall be a separate and independent debt.
(c) A Finance Party may, except as otherwise stated in the Finance
Documents, separately enforce its rights under the Finance
Documents.
2.3 OBLIGORS' AGENT
(a) Each Obligor (other than the Company) irrevocably appoints the
Company to act on its behalf as its agent in relation to the Finance
Documents and irrevocably authorises:
(i) the Company on its behalf to supply all information
concerning itself contemplated by this Agreement to the
Finance Parties and to give and receive all notices,
consents and instructions (including Utilisation Requests),
to agree, accept and execute on its behalf all documents in
connection with the Finance Documents (including amendments
and variations of and consents under any Finance Document)
and to execute any new Finance Document and to take such
other action as may be necessary or desirable under or in
connection with the Finance Documents; and
(ii) each Finance Party and each Hedging Bank to give any notice,
demand or other communication to that Obligor pursuant to
the Finance Documents to the Company.
(b) Each Obligor (other than the Company) confirms that:
(i) it will be bound by any action taken by the Company under or
in connection with the Finance Document; and
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(ii) each Finance Party and each Hedging Bank may rely on any
action purported to be taken by the Company on behalf of
that Obligor.
2.4 ACTS OF THE COMPANY
(a) The respective liabilities of each of the Obligors under the Finance
Documents shall not be in any way affected by:
(i) any actual or purported irregularity in any act done, or
failure to act, by the Company;
(ii) the Company acting (or purporting to act) in any respect
outside any authority conferred upon it by any Obligor; or
(iii) any actual or purported failure by, or inability of, the
Company to inform any Obligor of receipt by it of any
notification under the Finance Documents.
(b) In the event of any conflict between any notices or other
communications of the Company and any other Obligor, those of the
Company shall prevail.
3. PURPOSE
3.1 PURPOSE
(a) All amounts borrowed under the Facilities shall be applied (directly
or indirectly) towards refinancing the Euro Notes together with any
related costs and fees, in each case in accordance with the Funds
Flow Memorandum (and the Borrower irrevocably authorises and directs
the Facility Agent to make the payments to the relevant recipients
on its behalf as described in the Funds Flow Memorandum).
(b) No amount borrowed under the Facilities shall be applied in any
manner that may be illegal or contravene any applicable law or
regulation in any jurisdiction concerning financial assistance by a
company for the acquisition of or subscription for shares or
concerning the protection of shareholders' capital.
3.2 MONITORING
No Finance Party is bound to monitor or verify the application of
any amount borrowed pursuant to this Agreement.
4. CONDITIONS OF UTILISATION
4.1 INITIAL CONDITIONS PRECEDENT
The obligations of each Finance Party to the Borrower under the
Finance Documents are subject to the condition precedent that the
Facility Agent has received all of the documents and other evidence
listed in Part I of Schedule 2 (Conditions precedent) in the Agreed
Form no later than midday one Business Day prior to the first
proposed Utilisation Date. The Facility Agent shall notify the
Company and the Lenders promptly upon being so satisfied.
4.2 FURTHER CONDITIONS PRECEDENT
The Lenders will only be obliged to comply with Clause 5.4 (Lenders'
participation) if on the date of the Utilisation Request and on the
proposed Utilisation Date:
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(a) no Default is continuing or would result from the proposed
Loan; and
(b) the representations and warranties set out in Clause 18
(Representations) which are made or deemed to be made in
accordance with Clause 18.27 (Times when representations
made) are true.
4.3 MAXIMUM NUMBER OF UTILISATIONS
The Borrower may not deliver a Utilisation Request if as a result of
the proposed Loan more than 1 Facility B1 Loan and 1 Facility B2
Loan would be outstanding.
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SECTION 3
UTILISATION
5. UTILISATION
5.1 DELIVERY OF A UTILISATION REQUEST
The Borrower may utilise a Facility by delivery to the Facility
Agent of a duly completed Utilisation Request not later than the
Specified Time.
5.2 COMPLETION OF A UTILISATION REQUEST
(a) Each Utilisation Request for a Loan is irrevocable and will not be
regarded as having been duly completed unless:
(i) it specifies that it is for a Loan;
(ii) it identifies the Facility to be utilised;
(iii) the proposed Utilisation Date is a Business Day within the
Availability Period;
(iv) the currency and amount of the Loan comply with Clause 5.3
(Currency and amount);
(v) the proposed Interest Period complies with Clause 9
(Interest Periods); and
(vi) it specifies the account and bank (which must be in the
principal financial centre of the country of the currency of
the Utilisation or, in the case of euro, the principal
financial centre of a Participating Member State in which
banks are open for general business on that day or London)
to which the proceeds of the Loan are to be credited.
(b) Only one Loan may be requested in each Utilisation Request.
5.3 CURRENCY AND AMOUNT
(a) The currency specified in a Utilisation Request must be euro.
5.4 LENDERS' PARTICIPATION
(a) If the conditions set out in this Agreement have been met, each
Lender participating in a Facility shall make its participation in
each Loan under that Facility available by the Utilisation Date
through its Facility Office.
(b) The amount of each Lender's participation in each Loan will be equal
to the proportion borne by its Available Commitment to the Available
Facility immediately prior to making the Loan.
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SECTION 4
REPAYMENT, PREPAYMENT AND CANCELLATION
6. REPAYMENT
(a) The Borrower shall repay each Loan on the Termination Date.
(b) The Borrower may not reborrow any part of the Facility which is repaid.
7. PREPAYMENT AND CANCELLATION
7.1 ILLEGALITY
If it becomes unlawful in any applicable jurisdiction for a Lender
to perform any of its obligations as contemplated by this Agreement
or to fund or maintain its participation in any Loan:
(a) that Lender shall promptly notify the Facility Agent upon
becoming aware of that event;
(b) upon the Facility Agent notifying the Borrower the
Commitment of that Lender will be immediately cancelled; and
(c) the Borrower shall repay that Lender's participation in the
Loans on the last day of the Interest Period for each
Utilisation occurring after the Facility Agent has notified
the Borrower or, if earlier, the date specified by the
Lender in the notice delivered to the Facility Agent (being
no earlier than the last day of any applicable grace period
permitted by law).
7.2 SALE
(a) In this Clause 7.2 "SALE" means a disposal of all or
substantially all of the assets of the Group (whether in a
single transaction or a series of related transactions).
(b) If a Sale occurs:
(i) the Borrower shall promptly notify the Facility
Agent upon becoming aware of that event;
(ii) a Lender shall not be obliged to fund a Loan; and
(iii) the Facilities shall immediately be cancelled and
all outstanding Loans, together with accrued
interest, and all other amounts accrued under the
Finance Documents shall become immediately due and
payable.
7.3 MANDATORY CANCELLATION
Any Commitment which is not utilised on the earlier of:
(i) the final day of the Availability Period;
(ii) the close of business on the date of the first Utilisation;
will be immediately and automatically cancelled.
7.4 VOLUNTARY CANCELLATION
(a) The Borrower may, if it gives the Facility Agent not less than 5
Business Days' (or such shorter period as the Majority Lenders may
agree) prior notice, cancel the whole or any part (being a
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minimum amount of (pound)5,000,000) of an Available Facility. Any
cancellation under this Clause 7.4 shall reduce the Commitment of
each Lender rateably under that Facility.
7.5 MANDATORY PREPAYMENT - NET SALE PROCEEDS
(a) In this Clause 7.5:
"NET SALE PROCEEDS" means the cash or cash equivalent proceeds
(including but not limited to, when received, the cash or cash
equivalent proceeds of any deferred consideration, whether by way of
adjustment to the purchase price or otherwise and any amount
received in consideration of the assumption of any debt) received by
a member of the Group in connection with the sale, transfer or other
disposal by any member of the Group of an asset after deducting:
(i) fees, transaction costs and any reserves and other sums in
each case required to be set aside under the contractual
terms of the applicable sale and purchase agreement by way
of escrow or segregation or otherwise for the sole purpose
to cover the warranty claims properly incurred in connection
with that sale, transfer or disposal (provided that to the
extent such reserves and other sums are no longer required
to be set aside, such amounts shall at such time be
designated Net Sales Proceeds); and
(ii) taxes paid or reasonably estimated by the Borrower to be
payable (as certified by the Borrower to the Facility Agent)
as a result of that sale, transfer or disposal.
In the event of any sale, transfer or other disposal by any member
of the Group of an asset where such asset is not wholly owned,
legally and beneficially, by such member of the Group, the
apportionment of Net Sale Proceeds between the legal and beneficial
owners of such asset shall be determined by the permanent
representative of the statutory manager of the Borrower on a fair
value basis and the Borrower shall provide a certificate signed by
such permanent representative of the statutory manager to the
Facility Agent confirming its determination of such apportionment.
"IMMEDIATE PREPAYMENT PROCEEDS" means Net Sale Proceeds which relate
to disposals referred to in paragraphs (l), (m), (n), (o) and (p) of
the definition of Permitted Disposal to the extent not excluded by
virtue of paragraph (c) of Clause 7.5 (Mandatory Prepayment - Net
Sale Proceeds).
"PERMITTED DISPOSAL PROCEEDS" means any Net Sale Proceeds which
relate to the disposals referred to in paragraphs (a), (b), (e),
(f), (g), (h), (j), (q) and (r) of the definition of Permitted
Disposals.
"RELEVANT PROCEEDS" means Net Sale Proceeds other than Immediate
Prepayment Proceeds and Permitted Disposal Proceeds.
(b) The Company shall ensure that any Net Sale Proceeds are paid into
the Prepayment Account for application in accordance with Clause 7.9
(Prepayment Account) and Clause 7.10 (Application of Proceeds).
(c) Paragraph (b) above does not apply to any:
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(i) Net Sale Proceeds to the extent that, in the case of any Net
Sale Proceeds which relate to the disposals referred to in
paragraphs (m) of the definition of "Permitted Disposal",
the amount by which such Net Sale Proceeds exceed
(euro)40,000,000;
(ii) Permitted Disposal Proceeds;
(iii) Net Sale Proceeds to the extent such Net Sale Proceeds are
received by a member of the Group in connection with the
sale, transfer or other disposal by any member of the Group
of an asset in the ordinary course of business (including,
without limitation, a disposal under paragraph (a) of the
definition of Permitted Disposal);
(iv) Net Sale Proceeds in an amount equal to 50 per cent. of the
Net Sale Proceeds of the disposal referred to in paragraph
(n) of the definition of "Permitted Disposal";
(v) Net Sale Proceeds in an amount equal to 50 per cent. of the
Net Sale Proceeds of the disposals referred to in paragraphs
(o) and (p) of the definition of "Permitted Disposal"; and
(vi) Relevant Proceeds to the extent such Relevant Proceeds are
paid into the Holding Account and have within six months of
receipt been contractually committed to be applied and have
within eighteen months of receipt have been applied towards
the purchase of other similar assets for use in the Group's
business and no part of those Relevant Proceeds is withdrawn
from the Holding Account except for that purpose within that
eighteen month period.
7.6 MANDATORY PREPAYMENT - INSURANCE PROCEEDS
(a) In this Clause 7.6:
"INSURANCE PROCEEDS" means any proceeds (other than in relation to
third party liabilities that are actually applied to meet such
liabilities or in relation to consequential loss policies that are
actually applied to cover operating losses, loss of profits or
business interruption) exceeding (euro)3,000,000 (or its equivalent
in another currency or currencies) received by any member of the
Group under or pursuant to any insurance policy (or equivalent)
after the date of this Agreement.
(b) The Company shall ensure that any Insurance Proceeds are paid into
the Prepayment Account for application in accordance with Clause 7.9
(Prepayment Account) and Clause 7.10 (Application of Proceeds).
(c) Paragraph (b) above does not apply to any Insurance Proceeds to the
extent that such Insurance Proceeds are paid into the Holding
Account and have within six Months of receipt been contractually
committed to be applied and have within eighteen Months of receipt
been applied to replace, repair or reinstate the asset(s) to which
those Insurance Proceeds relate and no part of those Insurance
Proceeds is withdrawn from the Holding Account except for that
purpose within that eighteen Month period.
7.7 MANDATORY PREPAYMENT - EXCESS CASH FLOW
(a) Within five Business Days of delivery to the Facility Agent of the
Company's audited consolidated financial statements for any
financial year, commencing with such financial statements for the
financial year ending on 31 December 2006, the Company shall ensure
that an amount equal to 50
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per cent. of the Excess Cash Flow for that financial year (or, in the
case of the financial year ending on 31 December 2006, an amount
equal to 50 per cent. of the Excess Cash Flow multiplied by the
fraction equal to the number of days for the period from the date of
this Agreement to 31 December 2006 (inclusive) divided by 365) is
paid into the Prepayment Account.
(b) All amounts paid into the Prepayment Account under paragraph (a)
above will be applied in prepayment of the Loans as described in
Clause 7.9 (Prepayment Account) and Clause 7.10 (Application of
Proceeds), as if those amounts were "Proceeds" and the date of
payment into the Prepayment Account were the "Receipt Date".
7.8 HOLDING ACCOUNT
(a) In this Clause 7.8, Clause 7.9 (Prepayment Account) and Clause 7.10
(Application of Proceeds):
"PROCEEDS" means, Insurance Proceeds, Net Sale Proceeds (other than
Immediate Prepayment Proceeds) and amounts paid into the Prepayment
Account under Clause 7.7 (Mandatory Prepayment - Excess Cash Flow).
(b) The Company shall ensure that any Insurance Proceeds which are to be
applied to replace, repair or reinstate asset(s) in accordance with
paragraph (c) of Clause 7.6 (Mandatory prepayment - Insurance
Proceeds) (or an equal amount), are paid directly into (or as soon
as practicable after receipt are transferred into) the Holding
Account.
(c) The Company shall ensure that any Relevant Proceeds which are to be
applied towards the purchase of other similar assets for use in the
Group's business in accordance with paragraph (c)(vi) of Clause 7.5
(Mandatory Prepayment - Net Sale Proceeds) (or an equal amount), are
paid directly into (or as soon as practicable after receipt are
transferred into) the Holding Account.
(d) Within five Business Days after the date (the "REINVESTMENT RECEIPT
DATE") on which any such Proceeds have been received by any member
of the Group (or have become Proceeds), the Borrower shall notify
the Facility Agent of the Reinvestment Receipt Date and the amount
in euro of those Proceeds.
(e) No amount may be withdrawn or transferred from the Holding Account
except:
(i) to purchase other similar assets for use in the Group's
business under paragraph (c)(iv) of Clause 7.5 (Mandatory
Prepayment Net Sale Proceeds);
(ii) to replace, repair or reinstate assets under paragraph (c)
of Clause 7.6 (Mandatory prepayment-Insurance Proceeds);
(iii) to make the prepayments required Clause 7.10 (Application of
Proceeds); or
(iv) with the prior consent of the Majority Lenders,
provided that, upon an Event of Default, all amounts standing to the
credit of the Holding Account shall be transferred to the Prepayment
Account.
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(f) To the extent that any amount in respect of any Proceeds falling
within sub-paragraph of paragraph (d) above is not withdrawn from
the Holding Account in accordance with paragraph (c(vi) of Clause
7.5 (Mandatory Prepayment - Net Sale Proceeds) and paragraph (c) of
Clause 7.6 (Mandatory prepayment - Insurance Proceeds) and under
sub-paragraph (i) above, the Borrower shall notify the Facility
Agent of the proposed date of prepayment of those Proceeds (the
"REINVESTMENT PREPAYMENT DATE") which must be at least five Business
Days after the date of that notice.
(g) The Borrower irrevocably authorises the Facility Agent to withdraw
any amounts credited to the Holding Account which have not been
withdrawn from the Holding Account under sub-paragraphs (i) and (ii)
of paragraph (e) above and apply such amounts against cancellations
and prepayments which are due under this Agreement in accordance
with Clause 7.10 (Application of Proceeds).
(h) Interest which has accrued on the Holding Account may be withdrawn
by the Borrower in accordance with the mandate relating to the
Holding Account, provided that no such withdrawal may be made while
an Event of Default is outstanding in respect of which notice has
been served on the Borrower by the Facility Agent.
7.9 PREPAYMENT ACCOUNT
(a) The Borrower shall ensure that all Proceeds (or an equal amount)
including, for the avoidance of doubt Immediate Prepayment Proceeds
(other than, subject to Clause 7.8(e), any proceeds paid into the
Holding Account) are paid directly into (or as soon as practicable
after receipt are transferred into) the Prepayment Account.
(b) Within five Business Days after the date (the "RECEIPT DATE") on
which any such Proceeds have been received by any member of the
Group (or have become Proceeds), the Company shall notify the
Facility Agent of the Receipt Date, the amount in euro of those
Proceeds and the proposed date of prepayment of those Proceeds (the
"PREPAYMENT DATE") (which must be at least five Business Days after
the date of that notice or as otherwise agreed between the Borrower
and the Facility Agent only in respect of such Proceeds which relate
to the disposals referred to in paragraph (m) of the definition of
Permitted Disposal).
(c) No amount may be withdrawn or transferred from the Prepayment
Account except:
(i) to make the prepayments required under Clause 7.10
(Application of Proceeds); or
(ii) with the prior consent of the Majority Lenders.
(d) The Borrower irrevocably authorises the Facility Agent to withdraw
amounts credited to the Prepayment Account and apply such amounts
against cancellations and prepayments which are due under this
Agreement in accordance with Clause 7.10 (Application of Proceeds).
(e) Interest which has accrued on the Prepayment Account may be
withdrawn by the Borrower in accordance with the mandate relating to
the Prepayment Account, provided that no such withdrawal may be made
while an Event of Default is outstanding in respect of which notice
has been served on the Borrower by the Facility Agent.
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7.10 APPLICATION OF PROCEEDS
(a) Any Proceeds in respect of which the Borrower has delivered a notice
under paragraph (e) of Clause 7.8 (Holding Account) or paragraph (b)
of Clause 7.9 (Prepayment Account) shall be applied in the following
order, in each case until the relevant Loans or other liabilities
have been satisfied in full:
(i) in the case of any Net Sale Proceeds which relate to any
disposal referred to in paragraph (m) of the definition of
"Permitted Disposal", in prepayment of the outstanding
Facility B2 Loan only; and
(ii) in the case of any other Proceeds:
(A) subject to paragraph (B) below, FIRST in prepayment
of amounts outstanding under Facility B1 and SECOND
in prepayment of amounts outstanding under Facility
B2; or
(B) from the earlier of the date of any disposal
referred to in paragraphs (m) and (n) of the
definition of "Permitted Disposal" and the date
which is 65 days after the Closing Date, in
prepayment pro rata of amounts outstanding under
Facility B1 and Facility B2.
(b) Any Proceeds to be applied in prepayment of any Loan under paragraph
(a) above shall be applied on the earlier of the Reinvestment
Prepayment Date or, as the case may be, the Prepayment Date and the
last day of the Interest Period relating to that Loan.
7.11 VOLUNTARY PREPAYMENT OF LOANS
(a) The Borrower may, if it gives the Facility Agent not less than five
Business Days' (or such shorter period as the Majority Lenders may
agree) prior notice, prepay the whole or any part of any Loan but if
in part by an aggregate amount that reduces the relevant Loan by a
minimum amount of (euro)5,000,000.
(b) Any Loan may only be voluntarily prepaid after 31 August 2006 (or,
if earlier, the day on which the Available Facility for the relevant
Facility is zero).
7.12 RIGHT OF REPLACEMENT OF A SINGLE LENDER
If:
(a) any sum payable to any Lender by an Obligor is required to
be increased under paragraph (c) of Clause 12.2 (Tax
gross-up); or
(b) any Lender claims indemnification from the Company under
Clause 12.3 (Tax indemnity) or Clause 13.1 (Increased
costs),
(c) an Obligor is, or will be, required to pay to a Lender any
amount under Schedule 4 (Mandatory Cost Formulae),
the Borrower may, whilst the circumstance giving rise to the
requirement or indemnification continues (and by not less than 15
Business Days' prior written notice):
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(i) arrange for the transfer of the whole (but not part only) of
that Lender's Commitment and participations in the Loans to
a new or existing Lender or financial institution which is
not a Restricted Person, a member of the Group or an
Affiliate of either of the foregoing willing to accept that
transfer and acceptable to the Borrower; or
(ii) with the prior consent of the Majority Lenders, give the
Facility Agent notice of cancellation of the Commitment of
that Lender and its intention to procure the repayment of
that Lender's participation in the Utilisations granted by
that Lender, whereupon the Commitment of that Lender shall
immediately be reduced to zero.
On the last day of each Interest Period which ends after
the Borrower has given notice under this paragraph (ii)
(or, if earlier, the date specified by the Borrower in that
notice), the Borrower shall repay that Lender's
participation in that Utilisation.
7.13 REPLACEMENT OF A NON-CONSENTING LENDER OR NON-FUNDING LENDER
(a) In this Clause 7.13 and in Clause 7.14 (Replacement of a Lender):
(i) "NON-CONSENTING LENDER" means any Lender which does not
agree to a consent, waiver or amendment directly or by
virtue of Clause 34.2(d) (Exceptions) if:
(A) the Borrower or the Facility Agent has requested a
consent under or waiver or amendment of any
provision of any Finance Document;
(B) that consent, waiver or amendment requires the
agreement of all the Lenders; and
(C) a Lender or Lenders:
1. whose share in the outstanding Loans and
whose undrawn Commitments then aggregate 80
per cent. or more of the aggregate of all
the outstanding Loans and undrawn
Commitments of all the Lenders;
2. if there is no Loan then outstanding, whose
undrawn Commitments then aggregate 80 per
cent. or more of the Total Commitments; or
3. if there is a Loan then outstanding and the
Total Commitments have been reduced to zero,
whose Commitments aggregated 80 per cent. or
more of the Total Commitments immediately
before the reduction.
(ii) "NON-FUNDING LENDER" means:
(A) any Lender which has failed to make or participate
in any Utilisation as required by this Agreement and
the Facility Agent has determined that the Lender is
not likely to advance that amount; or
(B) any Lender which has given notice to the Borrower or
the Facility Agent that it does not intend to make
or participate in any Utilisation as required by
this Agreement or has repudiated its obligation to
do so.
(b) If:
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(i) any Lender becomes a Non-Consenting Lender; or
(ii) any Lender becomes a Non-Funding Lender,
the Borrower may, if it gives the Facility Agent and that Lender not
less than 15 Business Days' prior notice, arrange for the transfer
of the whole (but not part only) of that Lender's Commitment and
participations in the Loans to a new or existing Lender or financial
institution which is not a Restricted Person, a member of the Group
or an Affiliate of either of the foregoing willing to accept that
transfer and acceptable to the Borrower.
7.14 REPLACEMENT OF A LENDER
(a) The replacement of a Lender pursuant to Clause 7.12 (Right of
replacement of a single Lender) or Clause 7.13 (Replacement of a
Non-Consenting Lender or Non-Funding Lender) shall be subject to the
following conditions:
(i) no Finance Party shall have any obligation to find a
replacement Lender;
(ii) any replacement of a Non-Consenting Lender must take place
no later than 60 days after the earlier of (A) the date the
Non-Consenting Lender notified the Facility Agent of its
refusal to agree to the relevant consent, waiver or
amendment and (B) the deadline (being not less than 15
Business Days after the Lender received the request for the
relevant consent, waiver or amendment) by which the
Non-Consenting Lender failed to reply to that request;
(iii) any Lender replaced pursuant to Clause 7.12 (Right of
replacement of a single Lender) or Clause 7.13 (Replacement
of a Non-Consenting Lender or Non-Funding Lender) shall not
be required to refund, or to pay or surrender to any other
Lender, any of the fees or other amounts received by that
Lender under any Finance Document; and
(iv) any replacement pursuant to Clause 7.12 (Right of
replacement of a single Lender) or Clause 7.13 (Replacement
of a Non-Consenting Lender or Non-Funding Lender) of a
Lender which is the Facility Agent shall not affect its role
as the Facility Agent.
(b) The Borrower's right to replace a Non-Funding Lender is in addition
to all other rights and remedies available to the Borrower against
the Non-Funding Lender.
7.15 RESTRICTIONS
(a) Any notice of cancellation or prepayment given by any Party under
this Clause 7 shall be irrevocable and, unless a contrary indication
appears in this Agreement, specify the date or dates upon which the
relevant cancellation or prepayment is to be made and the amount of
that cancellation or prepayment.
(b) Any prepayment under this Agreement shall be made together with
accrued interest on the amount prepaid and, subject to any Break
Costs, without premium or penalty.
(c) The Borrower may not reborrow any part of a Facility which is
prepaid.
(d) The Borrower shall not repay or prepay all or any part of the
Utilisations or cancel all or any part of the Commitments except at
the times and in the manner expressly provided for in this
Agreement.
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(e) Unless a contrary indication appears in this Agreement, no amount of
the Total Commitments cancelled under this Agreement may be
subsequently reinstated.
(f) If the Facility Agent receives a notice under this Clause 7 it shall
promptly forward a copy of that notice to either the Borrower or the
affected Lender, as appropriate.
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SECTION 5
COSTS OF UTILISATION
8. INTEREST
8.1 CALCULATION OF INTEREST
The rate of interest on each Loan for each Interest Period is the
percentage rate per annum which is the aggregate of the applicable:
(a) Margin;
(b) EURIBOR; and
(c) Mandatory Cost, if any.
8.2 PAYMENT OF INTEREST
The Borrower shall pay accrued interest on each Loan on the last day
of each Interest Period (and, if the Interest Period is longer than
six Months, on the dates falling at six monthly intervals after the
first day of the Interest Period).
8.3 DEFAULT INTEREST
(a) If an Obligor fails to pay any amount payable by it under a Finance
Document on its due date, interest shall accrue on the overdue
amount from the due date up to the date of actual payment (both
before and after judgment) at a rate which, subject to paragraph (b)
below, is the sum of one per cent. and the rate which would have
been payable if the overdue amount had, during the period of
non-payment, constituted a Loan in the currency of the overdue
amount for successive Interest Periods, each of a duration selected
by the Facility Agent (acting reasonably) of up to three Months. Any
interest accruing under this Clause 8.3 shall be immediately payable
by the Obligor on demand by the Facility Agent.
(b) If any overdue amount consists of all or part of a Loan which became
due on a day which was not the last day of an Interest Period
relating to that Loan:
(i) the first Interest Period for that overdue amount shall have
a duration equal to the unexpired portion of the current
Interest Period relating to that Loan; and
(ii) the rate of interest applying to the overdue amount during
that first Interest Period shall be the sum of one per cent.
and the rate which would have applied if the overdue amount
had not become due.
(c) Default interest (if unpaid) arising on an overdue amount will be
compounded with the overdue amount at the end of each Interest
Period applicable to that overdue amount but will remain immediately
due and payable.
8.4 NOTIFICATION OF RATES OF INTEREST
The Facility Agent shall promptly notify the relevant Lenders and
the Borrower of the determination of a rate of interest under this
Agreement.
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8.5 ADJUSTMENT OF MARGIN
This Clause 8.5 sets out the mechanics of adjustment of the Margin,
each provision of this Clause 8.5 operating cumulatively.
(a) Subject to this Clause 8.5, in respect of each Interest Period
commencing on or after the date which is 6 Months from the Closing
Date the Margin applicable to each Utilisation shall be the rate per
annum specified in the definition of Margin set out in Clause 1.1
(Definitions) adjusted, by reference to the ratio of Net Borrowings
to EBITDA as shown in the then most recent Compliance Certificate
(and the financial statements with which it is required by this
Agreement to be delivered) received by the Facility Agent, to equal
the rate per annum specified opposite the relevant range set out in
the following table in which the ratio of Net Borrowings to EBITDA
falls:
----------------------------------------------------------------------
RATIO MARGIN (% P.A.)
----------------------------------------------------------------------
Higher than 2:5 2.75
----------------------------------------------------------------------
Equal to or lower than 2.50
2:5 but higher than
2.0:1
----------------------------------------------------------------------
Equal to or lower than 2.0:1 2.25
----------------------------------------------------------------------
(b) Any adjustment to the Margin under paragraph (a) above shall take
effect on the date (the "Margin Adjustment Date") falling five
Business Days after receipt by the Facility Agent of a Compliance
Certificate (and the financial statements with which it is required
by this Agreement to be delivered) in accordance with Clause 19.4
(Compliance Certificate).
(c) Until such a resolution as referred to in paragraph (d)(i) below is
actually passed, if at any time, the Collateral Agent for the DIP
Lenders declares by notice to the Administrative Borrower (as
defined in the DIP Financing) all or any portion of the Loans (as
defined in the DIP Financing) to be due and payable pursuant to
section 10.01(i) of the DIP Financing, the Margin shall be the sum
of one per cent. per annum and the Margin which would otherwise have
been applicable in accordance with this Clause 8.5.
(d) If at any time it is no longer necessary to obtain a court approval
to pass a shareholder resolution of the Company by virtue of
Bankruptcy Emergence:
(i) the Company shall procure that such a shareholder resolution
of the Company is promptly passed which shall approve the
adjustment to the Margin applicable on a Change of Control
as set out in paragraph (ii) below; and
(ii) following such resolution being passed, if a Change of
Control occurs the Margin shall be the sum of one per cent.
and the Margin which would otherwise have been applicable in
accordance with this Clause 8.5.
In this paragraph (d):
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(i) a "CHANGE OF CONTROL" will occur if:
(A) any person or group of persons acting in concert
acquires:
(A) more than 50 per cent. of the issued share
capital of Solutia Inc.;
(B) issued share capital having the right to
cast more than 50 per cent. of the votes
capable of being cast in general meetings of
Solutia Inc.; or
(C) the right to determine the composition of
the majority of the board of directors or
equivalent body of Solutia Inc.,
but excluding any such acquisition made pursuant to
the terms of the plan of reorganization of Solutia
Inc.; or
(B) Solutia Inc. ceases to own, directly or indirectly,
100% of the issued share capital of the Company, or
ceases to have the right to determine the
composition of the majority of the board of
directors or equivalent body of the Company.
(ii) "ACTING IN CONCERT" has the meaning given to it in the City
Code on Takeovers and Mergers.
(e) If any Security is created over the share capital of the Company
(except for Security over such share capital as set out under
paragraph 2.2(a)(v) of the Due Diligence Report as in existence at
the date of this Agreement) the Margin shall be the sum of one per
cent. per annum and the Margin which would otherwise have been
applicable in accordance with this Clause 8.5
(f) If the Margin for a Loan is reduced for any period under this Clause
8.5 but the annual audited financial statements of the Group (and
the Compliance Certificate with which they are required by this
Agreement to be delivered) subsequently received by the Facility
Agent do not confirm the basis for that reduction, that reduction
shall be reversed with retrospective effect. In the event the Margin
for that Loan shall be the rate per annum specified opposite the
relevant range set out in the table above and the revised ratio of
Net Borrowings to EBITDA calculated using the figures in that
Compliance Certificate. The Company shall promptly pay to the
Facility Agent any amount necessary to put the Facility Agent and
Lenders in the position they would have been in had the appropriate
rate of the Margin applied during that period.
(g) While an Event of Default is continuing, the Margin applicable to
each Utilisation shall, subject to paragraphs (c) to (e) above,
revert to the rate specified in the definition of Margin in Clause
1.1 (Definitions).
9. INTEREST PERIODS
9.1 SELECTION OF INTEREST PERIODS
(a) The Borrower (or the Company on behalf of the Borrower) may select
an Interest Period for a Loan in the Utilisation Request for that
Loan or (if the Loan has already been borrowed) in a Selection
Notice.
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(b) Each Selection Notice for a Loan is irrevocable and must be
delivered to the Facility Agent by the Borrower (or the Company on
behalf of the Borrower) to which that Loan was made not later than
the Specified Time.
(c) If the Borrower (or the Company) fails to deliver a Selection Notice
to the Facility Agent in accordance with paragraph (b) above, the
relevant Interest Period will be one Month.
(d) Subject to this Clause 9, the Borrower (or the Company) may select
an Interest Period of 1, 2, 3 or 6 Months or any other period agreed
between the Company and the Facility Agent (acting on the
instructions of all the Lenders participating in the relevant Loan).
(e) Until the Syndication Date, each Interest Period shall be a maximum
duration of one Month or such shorter duration as the Company and
the Facility Agent may agree.
(f) An Interest Period for a Loan shall not extend beyond the
Termination Date.
(g) Each Interest Period for a Loan shall start on the Utilisation Date
or (if already made) on the last day of its preceding Interest
Period.
9.2 NON-BUSINESS DAYS
If an Interest Period would otherwise end on a day which is not a
Business Day, that Interest Period will instead end on the next
Business Day in that calendar month (if there is one) or the
preceding Business Day (if there is not).
10. CHANGES TO THE CALCULATION OF INTEREST
10.1 ABSENCE OF QUOTATIONS
Subject to Clause 10.2 (Market disruption), if EURIBOR is to be
determined by reference to the Reference Banks but a Reference Bank
does not supply a quotation by the Specified Time on the Quotation
Day, the applicable EURIBOR shall be determined on the basis of the
quotations of the remaining Reference Banks.
10.2 MARKET DISRUPTION
(a) The Facility Agent will notify the Company if a Market Disruption
Event occurs in relation to a Loan for any Interest Period. After
such notification the rate of interest on each Lender's share of
that Loan for the Interest Period shall be the percentage rate per
annum which is the sum of:
(i) the Margin;
(ii) the rate notified to the Facility Agent by that Lender as
soon as practicable and in any event before interest is due
to be paid in respect of that Interest Period, to be that
which expresses as a percentage rate per annum the cost to
that Lender of funding its participation in that Loan from
whatever source it may reasonably select; and
(iii) the Mandatory Cost, if any, applicable to that Lender's
participation in the Loan.
(b) In this Agreement "MARKET DISRUPTION EVENT" means:
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(i) at or about noon on the Quotation Day for the relevant
Interest Period the Screen Rate is not available and none or
only one of the Reference Banks supplies a rate to the
Facility Agent to determine EURIBOR for the relevant
currency and Interest Period; or
(ii) before close of business in London on the Quotation Day for
the relevant Interest Period, the Facility Agent receives
notifications from a Lender or Lenders (whose participations
in a Loan exceed 35 per cent. of that Loan) that the cost to
it of obtaining matching deposits in the Relevant Interbank
Market would be in excess of EURIBOR for euro and the
relevant Interest Period.
10.3 ALTERNATIVE BASIS OF INTEREST OR FUNDING
(a) If a Market Disruption Event occurs and the Facility Agent or the
Company so requires, the Facility Agent and the Company shall enter
into negotiations (for a period of not more than thirty days) with a
view to agreeing a substitute basis for determining the rate of
interest.
(b) Any alternative basis agreed pursuant to paragraph (a) above shall,
with the prior consent of all the Lenders and the Company, be
binding on all Parties.
10.4 BREAK COSTS
(a) The Borrower shall, within three Business Days of demand by a
Finance Party, pay to that Finance Party its Break Costs
attributable to all or any part of a Loan or Unpaid Sum being paid
by the Borrower on a day other than the last day of an Interest
Period for that Loan or Unpaid Sum.
(b) Each Lender shall, as soon as reasonably practicable after a demand
by the Facility Agent, provide a certificate confirming the amount
of its Break Costs for any Interest Period in which they accrue.
11. FEES
11.1 ARRANGEMENT FEE
The Company or the Borrower shall pay to the Arranger an arrangement
fee in the amount and at the times agreed in a Fee Letter.
11.2 AGENCY FEE
The Company or the Borrower shall pay to the Facility Agent (for its
own account) an agency fee in the amount and at the times agreed in
a Fee Letter.
11.3 SECURITY AGENCY FEE
The Company or the Borrower shall pay to the Security Agent (for its
own account) a security agency fee in the amount and at the times
agreed in a Fee Letter.
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SECTION 6
ADDITIONAL PAYMENT OBLIGATIONS
12. TAX GROSS-UP AND INDEMNITIES
12.1 DEFINITIONS
(a) In this Agreement:
"PROTECTED PARTY" means a Finance Party which is or will be subject
to any liability, or required to make any payment, for or on account
of Tax in relation to a sum received or receivable (or any sum
deemed for the purposes of Tax to be received or receivable) under a
Finance Document.
"QUALIFYING LENDER" means a Lender which is beneficially entitled to
interest payments under this Agreement and which is (i) a Belgian
legal entity subject to Belgian corporate income tax, (ii) a
non-Belgian legal entity or (iii) a non-Belgian entity having a
legal form similar to the legal form of a Belgian company.
"TAX CREDIT" means a credit against, relief or remission for, or
repayment of any Tax.
"TAX DEDUCTION" means a deduction or withholding for or on account
of Tax from a payment under a Finance Document.
"TAX PAYMENT" means either the increase in a payment made by an
Obligor to a Finance Party under Clause 12.2 (Tax gross-up) or a
payment under Clause 12.3 (Tax indemnity).
(b) Unless a contrary indication appears, in this Clause 12 a reference
to "determines" or "determined" means a determination made in the
absolute discretion of the person making the determination.
12.2 TAX GROSS-UP
(a) Each Obligor shall make all payments to be made by it without any
Tax Deduction, unless a Tax Deduction is required by law.
(b) The Company shall promptly upon becoming aware that an Obligor must
make a Tax Deduction (or that there is any change in the rate or the
basis of a Tax Deduction) notify the Facility Agent accordingly.
Similarly, a Lender shall notify the Facility Agent on becoming so
aware in respect of a payment payable to that Lender. If the
Facility Agent receives such notification from a Lender it shall
notify the Company and that Obligor.
(c) If a Tax Deduction is required by law to be made by an Obligor, the
amount of the payment due from that Obligor shall be increased to an
amount which (after making any Tax Deduction) leaves an amount equal
to the payment which would have been due if no Tax Deduction had
been required.
(d) An Obligor is not required to make an increased payment to a Lender
under paragraph (c) above for a Tax Deduction in respect of Tax
imposed on a payment of interest on a Loan if:
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(i)
(A) at any point in time between the date of the
Agreement and the date on which the payment falls
due or on the date on which the payment falls due
such Lender is not or has ceased to be a Qualifying
Lender other than as a result of any change after
the date he became a Lender under this Agreement in
(or in the interpretation, administration, or
application or) any law, or any published practice
or concession of any relevant taxing authority; or
(B) such Lender has not complied with its obligations
under paragraph (g) below or its representation (if
any) under paragraph (g) below is untrue; or
(ii) unless Qualifying Lender status of a Lender is not required
in order to enable the Borrower to make all payments made by
it to the Lenders without a Tax Deduction.
(e) If an Obligor is required to make a Tax Deduction, that Obligor
shall make that Tax Deduction and any payment required in connection
with that Tax Deduction within the time allowed and in the minimum
amount required by law.
(f) Within thirty days of making either a Tax Deduction or any payment
required in connection with that Tax Deduction, the Obligor making
that Tax Deduction shall deliver to the Facility Agent for the
Finance Party entitled to the payment an original receipt (or
certified copy thereof) reasonably satisfactory to that Finance
Party that the Tax Deduction has been made or (as applicable) any
appropriate payment paid to the relevant taxing authority.
(g) Each Original Lender shall deliver to the Borrower on or before the
Closing Date a Tax Status Certificate duly executed by it with a
copy sent to the Facility Agent and represents to the other parties
hereto as at the date of the Tax Status Certificate that it is a
Qualifying Lender. Each other Lender shall comply with its
obligation to deliver a Tax Status Certificate to the extent
required under Clause 23.2(f) and where such obligation applies, it
represents to the other parties hereto that as at the date of the
Tax Status Certificate that it is a Qualifying Lender.
(h) Each Lender shall co-operate directly with the Borrower in
completing any procedural formalities or requirements necessary for
that Obligor to obtain authorisation to make that payment without a
Tax Deduction (including delivering additional Tax Status
Certificates if the Belgian tax authorities inform the Obligor that
such additional Tax Status Certificates are required).
12.3 TAX INDEMNITY
(a) The Company shall (within three Business Days of demand by the
Facility Agent) pay to a Protected Party an amount equal to the
loss, liability or cost which that Protected Party determines will
be or has been (directly or indirectly) suffered for or on account
of Tax by that Protected Party in respect of a Finance Document.
(b) Paragraph (a) above shall not apply:
(i) with respect to any Tax assessed on a Finance Party:
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(A) under the law of the jurisdiction in which that
Finance Party is incorporated or, if different, the
jurisdiction (or jurisdictions) in which that
Finance Party is treated as resident for tax
purposes; or
(B) under the law of the jurisdiction in which that
Finance Party's Facility Office is located in
respect of amounts received or receivable in that
jurisdiction,
if that Tax is imposed on or calculated by reference to the
net income received or receivable (but not any sum deemed
to be received or receivable) by that Finance Party; or
(ii) to the extent a loss, liability or cost:
(A) is compensated for by an increased payment under
Clause 12.2 (Tax gross-up); or
(B) would have been compensated for by an increased
payment under Clause 12.2 (Tax gross-up) but was not
so compensated solely because one of the exclusions
in paragraph (d) of Clause 12.2 (Tax gross-up)
applied.
(c) A Protected Party making, or intending to make, a claim under
paragraph (a) above shall promptly notify the Facility Agent of the
event which will give, or has given, rise to the claim, following
which the Facility Agent shall notify the Company.
(d) A Protected Party shall, on receiving a payment from an Obligor
under this Clause 12.3, notify the Facility Agent.
12.4 TAX CREDIT
If an Obligor makes a Tax Payment and the relevant Finance Party
determines that:
(a) a Tax Credit is attributable either to an increased payment
of which that Tax Payment forms part, or to that Tax
Payment; and
(b) that Finance Party has obtained, utilised and fully retained
that Tax Credit on an affiliated group basis,
the Finance Party shall pay an amount to the Obligor which that
Finance Party determines will leave it (after that payment) in the
same after-Tax position as it would have been in had the Tax Payment
not been required to be made by the Obligor.
12.5 STAMP TAXES
The Company shall pay and, within three Business Days of demand,
indemnify each Finance Party against any cost, loss or liability
that Finance Party incurs in relation to all stamp duty, stamp duty
land tax, registration and other similar Taxes payable in respect of
any Finance Document.
12.6 VALUE ADDED TAX
(a) All amounts set out, or expressed to be payable under a Finance
Document by any Party to a Finance Party which (in whole or in part)
constitute the consideration for VAT purposes shall be deemed to be
exclusive of any VAT which is chargeable on such supply, and
accordingly, subject to paragraph (c) below, if VAT is chargeable on
any supply made by any Finance Party to any Party
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under a Finance Document, that Party shall pay to the Finance Party
(in addition to and at the same time as paying the consideration) an
amount equal to the amount of the VAT (and such Finance Party shall
promptly provide an appropriate VAT invoice to such Party).
(b) If VAT is chargeable on any supply made by any Finance Party (the
"SUPPLIER") to any other Finance Party (the "RECIPIENT") under a
Finance Document, and any Party (the "RELEVANT PARTY") is required
by the terms of any Finance Document to pay an amount equal to the
consideration for such supply to the Supplier (rather than being
required to reimburse the Recipient in respect of that
consideration), such Party shall also pay to the Supplier (in
addition to and at the same time as paying such amount) an amount
equal to the amount of such VAT. The Recipient will promptly pay to
the Relevant Party an amount equal to any credit or repayment from
the relevant tax authority which it reasonably determines relates to
the VAT chargeable on that supply.
(c) Where a Finance Document requires any Party to reimburse a Finance
Party for any costs or expenses, that Party shall also at the same
time pay and indemnify the Finance Party against all VAT incurred by
the Finance Party in respect of the costs or expenses to the extent
that the Finance Party reasonably determines that neither it nor any
other member of any group of which it is a member for VAT purposes
is entitled to credit or repayment from the relevant tax authority
in respect of the VAT.
13. INCREASED COSTS
13.1 INCREASED COSTS
(a) Subject to Clause 13.3 (Exceptions) the Company shall, within three
Business Days of a demand by the Facility Agent, pay for the account
of a Finance Party the amount of any Increased Costs incurred by
that Finance Party or any of its Affiliates as a result of (i) the
introduction of or any change in (or in the interpretation,
administration or application of) any law or regulation made after
the date of this Agreement or (ii) compliance with any law or
regulation made after the date of this Agreement.
(b) In this Agreement "INCREASED COSTS" means:
(i) a reduction in the rate of return from a Facility or on a
Finance Party's (or its Affiliate's) overall capital;
(ii) an additional or increased cost; or
(iii) a reduction of any amount due and payable under any Finance
Document,
which is incurred or suffered by a Finance Party or any of its
Affiliates to the extent that it is attributable to that Finance
Party having entered into its Commitment or funding or performing
its obligations under any Finance Document.
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13.2 INCREASED COST CLAIMS
(a) A Finance Party intending to make a claim pursuant to Clause 13.1
(Increased Costs) shall notify the Facility Agent of the event
giving rise to the claim, following which the Facility Agent shall
promptly notify the Company.
(b) Each Finance Party shall, as soon as practicable after a demand by
the Facility Agent, provide a certificate confirming the amount of
its Increased Costs.
13.3 EXCEPTIONS
(a) Clause 13.1 (Increased Costs) does not apply to the extent any
Increased Cost is:
(i) attributable to a Tax Deduction required by law to be made
by an Obligor;
(ii) compensated for by Clause 12.3 (Tax indemnity) (or would
have been compensated for under Clause 12.3 (Tax indemnity)
but was not so compensated solely because any of the
exclusions in paragraph (b) of Clause 12.3 (Tax indemnity)
applied);
(iii) compensated for by the payment of the Mandatory Cost; or
(iv) attributable to the wilful breach by the relevant Finance
Party or its Affiliates of any law or regulation.
(b) In this Clause 13.3, a reference to a "TAX DEDUCTION" has the same
meaning given to the term in Clause 12.1 (Definitions).
14. OTHER INDEMNITIES
14.1 CURRENCY INDEMNITY
(a) If any sum due from an Obligor under the Finance Documents (a
"SUM"), or any order, judgment or award given or made in relation to
a Sum, has to be converted from the currency (the "FIRST CURRENCY")
in which that Sum is payable into another currency (the "SECOND
CURRENCY") for the purpose of:
(i) making or filing a claim or proof against that Obligor; or
(ii) obtaining or enforcing an order, judgment or award in relation to
any litigation or arbitration proceedings,
that Obligor shall as an independent obligation, within three
Business Days of demand, indemnify each Finance Party to whom that
Sum is due against any cost, loss or liability arising out of or as
a result of the conversion including any discrepancy between (A) the
rate of exchange used to convert that Sum from the First Currency
into the Second Currency and (B) the rate or rates of exchange
available to that person at the time of its receipt of that Sum.
(b) Each Obligor waives any right it may have in any jurisdiction to pay
any amount under the Finance Documents in a currency or currency
unit other than that in which it is expressed to be payable.
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14.2 OTHER INDEMNITIES
The Company shall (or shall procure that an Obligor will), within
three Business Days of demand, indemnify each Finance Party against
any cost, loss or liability incurred by that Finance Party as a
result of:
(a) the occurrence of any Event of Default;
(b) a failure by an Obligor to pay any amount due under a
Finance Document on its due date, including without
limitation, any cost, loss or liability arising as a result
of Clause 27 (Sharing among the Finance Parties);
(c) funding, or making arrangements to fund, its participation
in a Utilisation requested by the Borrower in a Utilisation
Request but not made by reason of the operation of any one
or more of the provisions of this Agreement (other than by
reason of default or negligence by that Finance Party
alone); or
(d) a Utilisation (or part of a Utilisation) not being prepaid
in accordance with a notice of prepayment given by the
Borrower or the Company or as required by this Agreement.
14.3 INDEMNITY TO THE FACILITY AGENT
The Company shall promptly indemnify the Facility Agent against any
cost, loss or liability incurred by the Facility Agent (acting
reasonably) as a result of:
(a) investigating any event which it reasonably believes is a
Default; or
(b) acting or relying on any notice, request or instruction
which it reasonably believes to be genuine, correct and
appropriately authorised.
14.4 THIRD PARTY INDEMNITY
(a) The Company hereby indemnifies and agrees to hold harmless each of
the Finance Parties and in each case each of its and their
affiliates and each of their respective officers, directors,
employees, agents, advisors and representatives (each an
"INDEMNIFIED PARTY") from and against any and all claims, damages,
losses, liabilities, costs, legal expenses and expenses (altogether
"LOSSES") that may be incurred by or awarded against any Indemnified
Party, in each case arising out of or in connection with any claim,
investigation, litigation or proceeding (or the preparation of any
defence with respect thereto) commenced or threatened in relation to
the Finance Documents (or the transactions contemplated thereby) or
any use of the proceeds of the Facility whether or not such claim
investigation, litigation or proceeding is brought by the Company,
any of its shareholders or creditors or Indemnified Party or any
other person, or an Indemnified Party is otherwise a party thereto,
except to the extent that such Losses are found in a final
non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence, wilful
misconduct or breach of the Finance Documents by an Indemnified
Party.
(b) The company further agrees that no Indemnified Party shall have any
liability (whether direct or indirect, in contract, tort or
otherwise) to it or any of its shareholders or creditors for or in
connection with the transactions referred to above, except for
direct (as opposed to indirect or consequential)
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damages or losses to the extent such liability is found in a final
non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence, wilful
misconduct or breach of the Finance Documents.
15. MITIGATION BY THE LENDERS
15.1 MITIGATION
(a) Each Finance Party shall, in consultation with the Company, take all
reasonable steps to mitigate any circumstances which arise and which
would result in any amount becoming payable under or pursuant to, or
cancelled pursuant to, any of Clause 7.1 (Illegality), Clause 12
(Tax gross-up and indemnities) or Clause 13 (Increased Costs)
including (but not limited to) transferring its rights and
obligations under the Finance Documents to another Affiliate or
Facility Office.
(b) Paragraph (a) above does not in any way limit the obligations of any
Obligor under the Finance Documents.
15.2 LIMITATION OF LIABILITY
(a) The Company shall indemnify each Finance Party for all costs and
expenses reasonably incurred by that Finance Party as a result of
steps taken by it under Clause 15.1 (Mitigation).
(b) A Finance Party is not obliged to take any steps under Clause 15.1
(Mitigation) if, in the opinion of that Finance Party (acting
reasonably), to do so might be prejudicial to it.
16. COSTS AND EXPENSES
16.1 TRANSACTION EXPENSES
The Company shall promptly on demand pay the Facility Agent, the
Security Agent and the Arranger the amount of all reasonable costs
and expenses (including legal fees and subject to any agreed caps)
incurred by any of them in connection with the negotiation,
preparation, printing, execution and syndication of:
(a) this Agreement and any other documents referred to in this
Agreement; and
(b) any other Finance Document (other than a Transfer
Certificate) executed after the date of this Agreement.
16.2 AMENDMENT COSTS
If (a) an Obligor requests an amendment, waiver or consent or (b) an
amendment is required pursuant to Clause 28.9 (Change of currency),
the Company shall, within three Business Days of demand, reimburse
the Facility Agent and the Security Agent for the amount of all
costs and expenses (including legal fees) reasonably incurred by the
Facility Agent or the Security Agent in responding to, evaluating,
negotiating or complying with that request or requirement.
16.3 ENFORCEMENT COSTS
The Company shall, within three Business Days of demand, pay to each
Finance Party the amount of all costs and expenses (including legal
fees) properly incurred by that Finance Party in connection with the
enforcement of, or the preservation of any rights under, any Finance
Document.
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SECTION 7
GUARANTEE AND SECURITY
17. GUARANTEE AND INDEMNITY
17.1 GUARANTEE AND INDEMNITY
Each Guarantor irrevocably and unconditionally jointly and
severally:
(a) guarantees to each Finance Party and Hedging Bank punctual
performance by each other Obligor of all that Obligor's
obligations under the Finance Documents;
(b) undertakes with each Finance Party and Hedging Bank that
whenever an Obligor does not pay any amount when due under
or in connection with any Finance Document, that Guarantor
shall immediately on demand pay that amount as if it was the
principal obligor; and
(c) indemnifies each Finance Party and Hedging Bank immediately
on demand against any cost, loss or liability suffered by
that Finance Party or Hedging Bank (i) if any obligation
guaranteed by it is or becomes unenforceable, invalid or
illegal; or (ii) by operation of law the amount of the cost,
loss or liability shall be equal to the amount which that
Finance Party or Hedging Bank would otherwise have been
entitled to recover.
17.2 CONTINUING GUARANTEE
This guarantee is a continuing guarantee and will extend to the
ultimate balance of sums payable by any Obligor under the Finance
Documents, regardless of any intermediate payment or discharge in
whole or in part.
17.3 REINSTATEMENT
If any payment by an Obligor or any discharge given by a Finance
Party or Hedging Bank (whether in respect of the obligations of any
Obligor or any security for those obligations or otherwise) is
avoided or reduced as a result of insolvency or any similar event:
(a) the liability of each Obligor shall continue as if the
payment, discharge, avoidance or reduction had not occurred;
and
(b) each Finance Party and Hedging Bank (as applicable) shall be
entitled to recover the value or amount of that security or
payment from each Obligor, as if the payment, discharge,
avoidance or reduction had not occurred.
17.4 WAIVER OF DEFENCES
The obligations of each Guarantor under this Clause 17 will not be
affected by an act, omission, matter or thing which, but for this
Clause 17, would reduce, release or prejudice any of its obligations
under this Clause 17 (without limitation and whether or not known to
it or any Secured Party) including:
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(a) any time, waiver or consent granted to, or composition with,
any Obligor or other person;
(b) the release of any other Obligor or any other person under
the terms of any composition or arrangement with any
creditor of any member of the Group or any other person;
(c) the taking, variation, compromise, exchange, renewal or
release of, or refusal or neglect to perfect, take up or
enforce, any rights against, or security over assets of, any
Obligor or other person or any non-presentation or
non-observance of any formality or other requirement in
respect of any instrument or any failure to realise the full
value of any security;
(d) any incapacity or lack of power, authority or legal
personality of or dissolution or change in the members or
status of an Obligor or any other person;
(e) any amendment, novation, supplement, extension, restatement
(however fundamental and whether or not more onerous) or
replacement of any Finance Document or any other document or
security including any change in the purpose of, any
extension of or any increase in any facility or the addition
of any new facility under any Finance Document or other
document or security;
(f) any unenforceability, illegality or invalidity of any
obligation of any person under any Finance Document or any
other document or security; or
(g) any insolvency or similar proceedings.
17.5 IMMEDIATE RECOURSE
Each Guarantor waives any right it may have of first requiring any
Finance Party or Hedging Bank (or any trustee or agent on its
behalf) to proceed against or enforce any other rights or security
or claim payment from any person before claiming from that Guarantor
under this Clause 17. This waiver applies irrespective of any law or
any provision of a Finance Document to the contrary.
17.6 APPROPRIATIONS
Until all amounts which may be or become payable by the Obligors
under or in connection with the Finance Documents have been
irrevocably paid in full, each Finance Party and Hedging Bank (or
any trustee or agent on its behalf) may:
(a) refrain from applying or enforcing any other moneys,
security or rights held or received by that Finance Party or
Hedging Bank (or any trustee or agent on its behalf) in
respect of those amounts, or apply and enforce the same in
such manner and order as it sees fit (whether against those
amounts or otherwise) and no Guarantor shall be entitled to
the benefit of the same; and
(b) hold in an interest-bearing suspense account any moneys
received from any Guarantor or on account of any Guarantor's
liability under this Clause 17.
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17.7 DEFERRAL OF GUARANTORS' RIGHTS
Until all amounts which may be or become payable by the Obligors
under or in connection with the Finance Documents have been
irrevocably paid in full and unless the Facility Agent (or, as the
case may be, the Security Agent) otherwise directs, no Guarantor
will exercise any rights which it may have by reason of performance
by it of its obligations under the Finance Documents:
(a) to be indemnified by an Obligor;
(b) to claim any contribution from any other guarantor of any
Obligor's obligations under the Finance Documents; and/or
(c) to take the benefit (in whole or in part and whether by way
of subrogation or otherwise) of any rights of the Finance
Parties or Hedging Banks under the Finance Documents or of
any other guarantee or security taken pursuant to, or in
connection with, the Finance Documents by any Finance Party
or Hedging Bank.
17.8 RELEASE OF GUARANTORS' RIGHT OF CONTRIBUTION
If any Guarantor (a "RETIRING GUARANTOR") ceases to be a Guarantor
in accordance with the terms of the Finance Documents for the
purpose of any sale or other disposal of that Retiring Guarantor
then on the date such Retiring Guarantor ceases to be a Guarantor:
(a) that Retiring Guarantor is released by each other Guarantor
from any liability (whether past, present or future and
whether actual or contingent) to make a contribution to any
other Guarantor arising by reason of the performance by any
other Guarantor of its obligations under the Finance
Documents; and
(b) each other Guarantor waives any rights it may have by reason
of the performance of its obligations under the Finance
Documents to take the benefit (in whole or in part and
whether by way of subrogation or otherwise) of any rights of
the Finance Parties under any Finance Document or of any
other security taken pursuant to, or in connection with, any
Finance Document where such rights or security are granted
by or in relation to the assets of the Retiring Guarantor.
17.9 ADDITIONAL SECURITY
This guarantee is in addition to and is not in any way prejudiced by
any other guarantee or security now or subsequently held by any
Finance Party or Hedging Bank.
17.10 LIMITATIONS
In relation to any Guarantor incorporated or established in Germany
the following shall apply:
(a) The enforcement of the guarantee and indemnity granted under
this Clause 17 (the "GUARANTEE") shall be, at the date
hereof and at any time thereafter, limited to an amount
equal to the net assets of the Guarantor, which are
calculated as such Guarantor's total assets (the calculation
of which shall take into account the captions reflected in
Section 266 (2) A, B and C of the German Commercial Code
(Handelsgesetzbuch)) less its reserves for own shares
(Section 266 (3) A III.2. of the German Commercial Code)
less its liabilities (the calculation of which shall take
into account the captions reflected in
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Section 266 (3) B, C, D of the German Commercial Code) less
its registered share capital (Stammkapital) (the Net
Assets).
(b) For the purposes of calculating Net Assets the balance sheet
shall be adjusted in a way that (i) any amounts which the
Guarantor has received from any Loan which has been on-lent
by the Borrower to the Guarantor and is still outstanding at
the time of the enforcement of the Guarantee shall be
disregarded or (ii) the amount of any increase of the
Guarantor's registered share capital out of retained
earnings (Kapitalerhohung aus Gesellschaftsmittein) after
the date of the Guarantee that has been effected without the
prior written consent of the Facility Agent shall be
deducted from the Guarantor's registered share capital.
(c) Furthermore, the Guarantor shall, in a situation where
(i) it does not have sufficient assets to maintain its
registered share capital; and
(ii) the Facility Agent would (but for this Clause) be
entitled and is seeking to enforce the security
granted under this Guarantee,
(A) realise any and all of its assets that are
shown in the balance sheet with a book value
(Buchwert) which is significantly lower than
the market value of such assets, provided
such asset is not necessary for the
Guarantor's business (betriebsnotwendig).
(d) For the purpose of the calculation of the Net Assets and
thus the enforceable amount, the Guarantor will deliver
within 30 Business Days after his notification by the
Facility Agent of an Event of Default, to the Facility Agent
an up to date balance sheet drawn-up by its auditors or any
other reputable firm of auditors together with a
determination of the Net Assets by the respective auditors.
The balance sheet and determination of Net Assets shall be
prepared in accordance with accounting principles pursuant
to the German Commercial Code (Handelsgesetzbuch) and be
based on the same principles that were applied when
establishing the previous year's balance sheet.
(e) Should the Guarantor fail to deliver such balance sheet
and/or determination of the Net Assets within the 30
Business Day period referred to above or if the Guarantor
has generally ceased to make payments or upon filing of an
application for insolvency proceedings by the Guarantor, the
Facility Agent shall be entitled to enforce the Guarantee,
without the enforcement limitations provided for above
applying at the time of such enforcement, but is obliged to
retransfer proceeds from such enforcement to the extent that
the Guarantor demonstrates in reasonable detail that the
enforcement of this Guarantee violated the rules on
preservation of the stated share capital under
SectionSection SS 30,31 GmbH-Act as set out in paragraph
(a)-(c) above by resulting or enhancing negative assets
(Unterblilanz) of the Guarantor.
(f) This Guarantee shall further not be enforced to the extent
that the Guarantor demonstrates in reasonable detail that
such enforcement would lead to a breach of the Gebot der
Rucksichtnahme auf die Eigenbelange der Gesellschaft (duty
of care owing by the relevant shareholders vis-a-vis the
respective company) and of the Verbot des
existenzvernichtenden Eingriffs (prohibition of
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insolvency-causing intervention), as developed by the recent
jurisdiction (in particular BGH II ZR 178/99 "BREMER
VULKAN", BGH II ZR 196/00 and BGH II ZR 300/00 "KBV"), of
the Federal Supreme Court (Bundesgerichtshof), caused for
example, as far as this would be within the scope of the
cited court ruling, if the entering into the Guarantee and
its enforcement results in the illiquidity
(Zahlungsunfahigkeit) of the Guarantor. The Facility Agent
shall be obliged to retransfer proceeds from such
enforcement to the extent that the Guarantor demonstrates in
reasonable detail that the enforcement of the Guarantee
violated the rules of the cited Federal Supreme Court
rulings. Otherwise, any claim for damages to the Facility
Agent (excluding, for the avoidance of doubt, any claim
relating to unjust enrichment) by the Guarantor, any
shareholders of the Guarantor or its managing directors
shall be excluded.
(g) The guarantee of any Additional Guarantor is subject to any
limitations relating to that Additional Guarantor set out in
any relevant Accession Letter and in the case of each
Additional Guarantor incorporated in Belgium (an "ADDITIONAL
BELGIAN GUARANTOR") paragraph (c) will apply.
(h) With respect to the obligations of any Obligor, the
Additional Belgian Guarantor's liability under this Clause
17 (Guarantee and Indemnity) shall be limited, at any time,
to a maximum aggregate amount equal to the greater of:
(i) an amount equal to 90% of such Additional Belgian
Guarantor's net assets (as determined in accordance
with the Belgian Companies Code and accounting
principles generally accepted in Belgium, but not
taking intra-groups debts into account as debts) as
shown by its then most recent audited annual
financial statements; and
(ii) the aggregate of (a) the principal amount borrowed
by such Additional Belgian Guarantor pursuant to
this Agreement and (b) any intra-group loans or
facilities made to it by any other member of the
Group (whether or not such intra-group loan is
retained by the relevant Guarantor for its own
purposes or on-lent to another Group company) it
being understood that the amount of each loan will
only be counted once when calculating the aggregate
amount of all loans.
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SECTION 8
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
18. REPRESENTATIONS
Each Obligor or (if it so states) the Company makes the
representations and warranties set out in this Clause 18 to each
Finance Party on the dates set out in Clause 18.27 (Times when
representations made) (in the case of any Obligor other than the
Company, only in relation to itself and, to the extent expressed to
be applicable to them, its Material Subsidiaries and/or other
Subsidiaries (if any)).
18.1 STATUS
(a) It is a limited liability company or corporation, duly incorporated
and validly existing under the law of its jurisdiction of
incorporation.
(b) It has the power to own its assets and carry on its business as it
is being, and is proposed to be, conducted.
18.2 BINDING OBLIGATIONS
The obligations expressed to be assumed by it in each Finance
Document to which it is or will be a party are legal, valid, binding
and enforceable, subject to:
(a) any applicable Reservations; or
(b) in the case of any Security Document, any applicable
Perfection Requirements.
18.3 NON-CONFLICT WITH OTHER OBLIGATIONS
The entry into and performance by it of, and the transactions
contemplated by, the Finance Document do not conflict with:
(a) any material law or regulation applicable to it;
(b) its or any of its Subsidiaries' constitutional documents; or
(c) any agreement or instrument binding upon it or any of its
Subsidiaries or any of its or any of its Subsidiaries'
assets or constitute a default or termination event (however
described), in each case to the extent that it would
reasonably be expected to have a Material Adverse Effect.
18.4 POWER AND AUTHORITY
It has the power to enter into, perform and deliver, and has taken
all necessary action to authorise its entry into, performance and
delivery of, the Finance Documents to which it is or will be a party
and the transactions contemplated by the Finance Documents.
18.5 VALIDITY AND ADMISSIBILITY IN EVIDENCE
All necessary Authorisations required:
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(a) to enable it lawfully to enter into, exercise its rights and
comply with its obligations in the Finance Documents to
which it is a party and the transactions contemplated by the
Finance Documents;
(b) to make the Finance Documents to which it or any of its
Subsidiaries is a party admissible in evidence in its
Relevant Jurisdiction, subject to any applicable
Reservations; and
(c) to enable it to create the Security purported to be created
by it or any of its Subsidiaries pursuant to any Security
Document and, subject to any applicable Reservations, to
ensure that such Security has the priority and ranking it is
expressed to have,
have been obtained or effected and are in full force and effect,
save for complying with any applicable Perfection Requirements.
18.6 GOVERNING LAW AND ENFORCEMENT
Subject to any applicable Reservations:
(a) the choice of law specified in each Finance Document as the
governing law of that Finance Document will be recognised
and enforced in its Relevant Jurisdiction; and
(b) any judgment obtained in England in relation to a Finance
Document (or in the jurisdiction of the governing law of
that Finance Document) will be recognised and enforced in
its Relevant Jurisdiction and, in relation to a Finance
Document governed by a law other than English law, in the
jurisdiction of the governing law of that Finance Document.
18.7 DEDUCTION OF TAX
Provided that each Lender is a Qualifying Lender it is not required
to make any deduction for or on account of Tax from any payment it
may make under any Finance Document.
18.8 NO FILING OR STAMP TAXES
Under the law of its Relevant Jurisdiction it is not necessary that
the Finance Documents be filed, recorded or enrolled with any court
or other authority in that jurisdiction or that any stamp,
registration, notarial or similar taxes or fees be paid on or in
relation to the Finance Documents or the transactions contemplated
by the Finance Documents except for:
(a) in each case for complying with any applicable Perfection
Requirements;
(b) Belgian stamp duties of EUR 0.15 payable on any loan or
credit agreement and any pledge agreement drafted and
executed in Belgium, subject to the conditions of the
Belgian Stamp Duties Code (Code des droits de timbre/Wetboek
Zegelrechten) of 26 June 1947, as amended; and
(c) notarial fees payable in connection with the notarisation of
certain Security Documents governed by German law.
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18.9 NO DEFAULT
(a) No Event of Default is continuing or would reasonably be expected to
result from the making of any Utilisation or the entry into,
performance of, or any transaction contemplated by, any Finance
Document.
(b) No other event or circumstance is outstanding which constitutes (or
which would, with the lapse of time, the giving of notice, the
making of any determination under the relevant document or any
combination of the foregoing, constitute) a default or termination
event (however described) under any other agreement or instrument
which is binding on it or any of its Subsidiaries or to which its
(or any of its Subsidiaries') assets are subject which would
reasonably be expected to have a Material Adverse Effect.
18.10 NO BREACH OF LAW
It has not (and none of its Subsidiaries has) breached any law or
regulation which breach has, or would reasonably be expected to
have, a Material Adverse Effect.
18.11 INFORMATION PACKAGE
In the case of the Company and the Borrower only:
(i) Any written factual information in the Information Package
was true and accurate in all material respects as at the
date it was provided or as at the date (if any) at which it
is stated.
(ii) Any financial projections in the Information Package have
been prepared on the basis of recent historical information
and on the basis of assumptions believed by the Company to
be fair and reasonable at the time of such preparation.
(iii) Any expressions of opinion or intention provided by or on
behalf of any member of the Group in connection with the
Information Package, were made after due and careful
consideration and based on reasonable grounds.
(iv) As at the date of this Agreement, nothing has occurred or
been omitted from the Information Package and no information
has been given or withheld that, if disclosed, would result
in:
(A) any factual information in the Information Package
being untrue or misleading in any material respect;
or
(B) any assumption or ground on which any financial
projection or expression of opinion or intention in
the Information Package is based being unreasonable.
18.12 FINANCIAL STATEMENTS
(a) Its Original Financial Statements were prepared in accordance with
the Applicable Accounting Principles except as disclosed in any
notes to the Original Financial Statements.
(b) Its Original Financial Statements fairly represent its financial
condition and operations as at the end of and for the relevant
financial year except as disclosed in any notes to the Original
Financial Statements.
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(c) As at the date of this Agreement, there has been no material adverse
change in its assets, business or financial condition (or, in the
case of the Company, the assets, business or financial condition of
the Group) since 31 March 2006.
(d) The financial year end of each member of the Group is 31 December.
(e) The Business Plan was prepared in accordance with Applicable
Accounting Principles except as otherwise agreed between the Company
and the Facility Agent and financial reference periods of the
Company consistently applied as at the date of this Agreement.
18.13 PARI PASSU RANKING
Subject to any applicable Reservations, without limiting Clause
18.15 (Security) below, its payment obligations under the Finance
Documents rank at least pari passu with the claims of all its other
unsecured and unsubordinated creditors, except for obligations
mandatorily preferred by law applying to companies generally.
18.14 NO PROCEEDINGS PENDING OR THREATENED
(a) No litigation, arbitration or administrative proceedings of or
before any court, arbitral body or agency including, but not limited
to, investigative proceedings (including any arising from or
relating to Environmental Law) which could reasonably be expected to
be adversely determined and, if so determined, would reasonably be
expected to have a Material Adverse Effect have been started or (to
the best of its knowledge and belief) threatened in writing against
it or any of its Subsidiaries.
18.15 SECURITY
(a) Subject to any applicable Perfection Requirements and any applicable
Reservations, each Security Document creates (or, once entered into,
will create) in favour of the Security Agent, the Security which it
is expressed to create fully perfected and with the ranking and
priority it is expressed to have.
(b) Subject to Clause 21.27 (Amendment to articles of association of CP
Films) the constitutional documents of any member of the Group do
not and would not restrict or inhibit in any manner any transfer of
any shares of any member of the Group which are expressed to be (or
are required by this Agreement to be or become) subject to any
Security under any Security Document.
18.16 ASSETS
It and each of its Subsidiaries has good and marketable title to, or
valid leases or licences of, or is otherwise entitled to use (in
each case, on arm's length terms), all material assets necessary for
the conduct of its business as it is being, and is proposed to be,
conducted.
18.17 ENVIRONMENTAL LAWS AND LICENCES
It and each of its Subsidiaries has:
(a) complied with all Environmental Laws to which it may be
subject;
(b) all Environmental Licences required in connection with its
business; and
(c) complied with the terms of those Environmental Licences,
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in each case where failure to do so would reasonably be expected to
have a Material Adverse Effect.
18.18 GROUP STRUCTURE
(a) The Group Structure Chart shows:
(i) each member of the Group and any person in whose shares any
member of the Group has an interest (and the percentage of
the issued share capital held, and whether legally or
beneficially, by that member) as at the date of this
Agreement;
(ii) the jurisdiction of incorporation or establishment of each
person shown in it; and
(iii) the status of each person shown in it which is not a limited
liability company or corporation.
(b) Each Obligor other than the Company is directly or indirectly a
wholly-owned Subsidiary of the Company.
(c) The Company does not own any of the shares in Flexsys other than 50%
of the preference shares nor holds voting rights which would mean
Flexsys would fall within the definition of being a subsidiary of
the Company.
18.19 NO FINANCIAL INDEBTEDNESS, GUARANTEES OR SECURITY
(a) No member of the Group has any Financial Indebtedness other than
Permitted Financial Indebtedness.
(b) No member of the Group has issued any guarantee other than a
Permitted Guarantee.
(c) No Security or Quasi Security exists over all or any of its (or any
of its Subsidiaries') assets other than Permitted Security.
18.20 SHARES
(a) The shares of any member of the Group which are expressed to be (or
are required by this Agreement to be or become) subject to any
Security under any Security Document are issued, fully paid, freely
transferable other than as provided in the articles of association
of the Borrower as delivered pursuant to Clause 4.1 (Initial
conditions precedent) and subject to Clause 21.27 (Amendment to
articles of association of CP Films) and constitute shares in the
capital of limited liability companies, and there are no moneys or
liabilities outstanding or payable in respect of any such share.
(b) No person has or is entitled to any conditional or unconditional
option, warrant or other right to call for the issue or allotment
of, subscribe for (other than pursuant to the existing security over
the shares in the Company expressly disclosed in paragraphs
2.2(a)(v), 2.2(b)(i) and 2.2(b)(ii) of the Due Diligence Report,
purchase or otherwise acquire any share capital of any member of the
Group (including any right of pre-emption, conversion or exchange).
(c) Except in connection with any Permitted Share Transaction, there are
no agreements in force or corporate resolutions passed which require
or are reasonably expected to require the present or
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future issue or allotment of any share capital of any Obligor
(including any option or right of pre-emption, conversion or
exchange).
(d) The shares of any member of the Group which are expressed to be (or
are required by this Agreement to be or become) subject to any
Security under any Security Document constitute all the share
capital of the relevant member of the Group except for one share in
the Borrower which is owned by Solutia, Inc..
18.21 INTELLECTUAL PROPERTY
(a) Each member of the Group owns or has validly licensed to all
material Intellectual Property necessary for the conduct of its
business as it is being, and is proposed to be, conducted.
(b) Each member of the Group has paid all necessary fees and is in
compliance with all material terms of any such licence to the extent
necessary to preserve its ability to use and enforce all such
Intellectual Property.
(c) No member of the Group has infringed any material Intellectual
Property of any third party in any material respect.
(d) To the best of the Company's knowledge and belief, there has been no
material infringement or threatened or suspected infringement of or
challenge to the validity of any Intellectual Property owned by or
licensed to any member of the Group.
18.22 SOLVENCY
No Event of Default set out in Clause 22.6 (Insolvency), Clause 22.7
(Insolvency proceedings) or Clause 22.8 (Creditors process) has
occurred and is continuing.
18.23 TAXES
(a) Each member of the Group has paid all Taxes required to be paid by
it within the time period allowed for payment without incurring any
penalties for non payment other than any Taxes:
(i) being contested by it in good faith and in accordance with
the relevant procedures;
(ii) which have been disclosed to the Arranger and for which
adequate reserves are being maintained in accordance with
GAAP; and
(iii) where payment can be lawfully withheld and will not result
in the imposition of any penalty nor in any Security (other
than paragraph (l) of the definition of Permitted Security)
ranking in priority to the claims of any Finance Party under
any Finance Document or to any Security created under any
Security Document.
For the avoidance of doubt, this does not include any payment or
penalties incurred prior to the date of this Agreement to the extent
those liabilities have been discharged and there is no longer a
dispute with the relevant taxation authority.
(b) No Finance Party is or will be deemed to be resident, domiciled or
carrying on business in its Relevant Jurisdiction by reason only of
the execution, performance and/or enforcement of any Finance
Document or Hedging Document.
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18.24 PENSIONS
(a) No member of the Group has any material liability in respect of any
pension scheme and there are no circumstances which would give rise
to such a liability which would reasonably be expected to have a
Material Adverse Effect.
(b) No member of the Group is in breach of any applicable material laws
relating to and the governing provisions of the pension schemes
maintained by or for the benefit of any member of the Group and/or
any of its employees which would reasonably be expected to have a
Material Adverse Effect.
18.25 INSURANCES
(a) The insurances required by Clause 21.22 (Insurance) are in full
force and effect as required by this Agreement.
(b) To the best of the Company's knowledge and belief (following all
reasonable enquiries), no event or circumstance has occurred, and
there has been no failure to disclose a fact, which would entitle
any insurer to reduce or avoid its liability under any such
insurance where such event, circumstance or failure would reasonably
be expected to have a Material Adverse Effect.
18.26 MASTER OPERATING AGREEMENT
The Security created pursuant to any Security Document does not
violate the terms and conditions of the Master Operating Agreement
it being understood that the Belgian floating charge agreement and
any floating charge granted upon exercise of the Belgian floating
charge mandate shall not include a pledge of the Company's rights
under the Master Operating Agreement, to the extent such pledge
would violate the Master Operating Agreement.
18.27 TIMES WHEN REPRESENTATIONS MADE
(a) The representations and warranties set out in this Clause 18 (except
for Clause 18.11 (Information Package) are:
(i) made by each Original Obligor on the date of this Agreement;
(ii) deemed to be made by each Obligor on the Closing Date by
reference to the facts and circumstances then existing
(unless otherwise stated).
(b) The representations and warranties set out in Clause 18.11
(Information Package) are deemed to be made by each Obligor:
(i) with respect to the Information Memorandum, on the date on
which the Information Memorandum is approved by the Company
and the Syndication Date;
(ii) with respect to the Reports, on the Closing Date and the
Syndication Date;
(iii) with respect to the Business Plan, the date of this
Agreement, the Closing Date and the Syndication Date; and
(iv) with respect to each Budget (other than the Business Plan),
the date on which it is approved by the Company,
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in each case by reference to the facts and circumstances then
existing.
(c) The Repeating Representations (and, in the case of sub-paragraph
(ii) below, the representations and warranties set out in Clause
18.8 (Validity and admissibility in evidence) and Clause 18.7 (No
filing or stamp taxes)) are deemed to be made by each Obligor on:
(i) the date of each Utilisation Request and the first day of
each Interest Period; and
(ii) in the case of an Additional Guarantor, the day on which the
company becomes (or it is proposed that the company becomes)
an Additional Guarantor,
in each case by reference to the facts and circumstances then existing.
19. INFORMATION UNDERTAKINGS
The undertakings in this Clause 19 remain in force from the date of
this Agreement for so long as any amount is outstanding under the
Finance Documents or any Commitment is in force.
19.1 ANNUAL FINANCIAL STATEMENTS
The Company shall supply to the Facility Agent in sufficient copies
for all the Lenders as soon as the same become available, but in any
event:
(a) within 120 days after the end of its financial years, its
audited consolidated financial statements for that financial
year (commencing with the financial year ended 31 December
2006); and
(b) within 150 days after the end of each of its financial
years, the audited financial statements of each Obligor for
that financial year if requested by the Facility Agent
(acting on the instructions of any Lender).
19.2 QUARTERLY FINANCIAL STATEMENTS
(a) The Company shall supply to the Facility Agent in sufficient copies
for all the Lenders as soon as the same become available its
consolidated financial statements:
(i) within 45 days of the end of the Accounting Quarters ending
on or about 31 March, 30 June and 30 September in any
financial year; and
(ii) within 60 days of the end of the Accounting Quarter ending
on or about 31 December in any financial year.
(b) Each set of quarterly financial statements delivered pursuant to
paragraph (a) above shall include:
(i) a consolidated cash flow statement and profit and loss
account for the relevant Accounting Quarter and for the
financial year to date;
(ii) a consolidated balance sheet as at the end of the relevant
Accounting Quarter;
(iii) a comparison with the corresponding Accounting Quarter, and
the year to date performance, in the previous year; and
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(iv) management commentary on the Group's performance during the
relevant Accounting Quarter and any material developments or
proposals affecting the Group or its business.
19.3 MONTHLY FINANCIAL STATEMENTS
(a) Commencing from and including the third Month after the Closing Date
and for so long as and at any time that, the Company delivers a
Compliance Certificate in accordance with the terms of this
Agreement which shows the ratio of Net Borrowings to EBITDA to be
greater than or equal to 2.5:1, the Company shall supply to the
Facility Agent in sufficient copies for all the Lenders as soon as
the same become available, but in any event within 30 days after the
end of each Accounting Month its monthly internal management
information for that Accounting Month.
(b) Each set of monthly internal management information delivered
pursuant to paragraph (a) above shall be in a format agreed with the
Facility Agent prior to the Closing Date.
19.4 COMPLIANCE CERTIFICATE
(a) The Company shall supply to the Facility Agent, with each set of
financial statements delivered pursuant to paragraph (a) of Clause
19.1 (Annual financial statements) or Clause 19.2 (Quarterly
financial statements) a Compliance Certificate which shall:
(i) set out (in reasonable detail) computations as to compliance
with Clause 20 (Financial covenants) and Clause 21.20
(Security and guarantees) as at, or, as the case may be, in
respect of the Relevant Period ending on the date as at
which those financial statements were drawn up; and
(ii) confirm that no Default is continuing (or if a Default is
continuing, specify the Default and the steps being taken to
remedy it).
(b) If required to be delivered with the financial statements delivered
pursuant to paragraph (a) of Clause 19.1 (Annual financial
statements), the Compliance Certificate shall also:
(i) set out (in reasonable detail) the computation of Excess
Cash Flow and Retained Cash (noting to the extent it has
been applied or committed to be applied in accordance with
this Agreement for a specific purpose) for that financial
year;
(ii) set out (in reasonable detail) computations as to compliance
with Clause 20.2 (Capital Expenditure) during that financial
year;
(iii) include a reconciliation of the audited financial statements
of the Group for that financial year and the management
accounts of the Group as at the end of that financial year;
and
(iv) set out the Material Subsidiaries and (in reasonable detail)
computations for the determination of which members of the
Group are Material Subsidiaries.
(c) Each Compliance Certificate shall be signed by two directors of the
Company and, if required to be delivered with the financial
statements delivered pursuant to paragraph (a) of Clause 19.1
(Annual financial statements), shall be reported on by the Company's
auditors in the Agreed Form.
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19.5 REQUIREMENTS AS TO FINANCIAL STATEMENTS
(a) Each set of financial statements delivered by the Company pursuant
to Clause 19.1 (Annual financial statements), Clause 19.2 (Quarterly
financial statements) or Clause 19.3 (Monthly financial statements)
shall be certified by a director of the relevant company as fairly
representing its (or, as the case may be, its consolidated)
financial condition and operations as at the end of and for the
period in relation to which those financial statements were drawn up.
(b) The Company shall procure that each set of financial statements of
an Obligor delivered pursuant to Clause 19.1 (Annual financial
statements), Clause 19.2 (Quarterly financial statements) or Clause
19.3 (Monthly financial statements) is prepared deconsolidating
Permitted Non-Recourse Subsidiaries.
(c) The Company shall procure that each set of financial statements of
an Obligor delivered pursuant to Clause 19.1 (Annual financial
statements), Clause 19.2 (Quarterly financial statements) or Clause
19.3 (Monthly financial statements) is prepared using GAAP,
accounting practices and financial reference periods in each case
consistent with the Applicable Accounting Principles unless, in
relation to any set of financial statements, it notifies the
Facility Agent that there has been a change in GAAP, the accounting
practices or reference periods or its auditors (or, if appropriate,
the auditors of the Obligor) deliver to the Facility Agent:
(i) a description of any change necessary for the relevant
financial statements to reflect the Applicable Accounting
Principles; and
(ii) sufficient information, in form and substance as may be
reasonably required by the Facility Agent, to enable the
Lenders to determine whether Clause 20 (Financial covenants)
has been complied with, to calculate the Excess Cash Flow,
to determine any other relevant matter and/or to make an
accurate comparison between the financial position indicated
in those financial statements and that Obligor's Original
Financial Statements.
Any reference in this Agreement to those financial statements shall
be construed as a reference to those financial statements as
adjusted to reflect the Applicable Accounting Principles.
(d) If the Company notifies the Facility Agent of a change in accordance
with paragraph (b) of this Clause 19.6 the Company and the Facility
Agent shall enter into negotiations in good faith with a view to
agreeing any amendments to this Agreement which are necessary as a
result of the change. To the extent practicable these amendments
will be such as to ensure that the change does not result in any
material alteration in the commercial effect of the obligations in
this Agreement. If any amendments are agreed they shall take effect
and be binding on each of the Parties in accordance with their
terms.
19.6 ANNUAL BUDGET
(a) The Company shall supply to the Facility Agent in sufficient copies
for all the Lenders as soon as the same becomes available, but in
any event no later than the start of each of its financial years, a
Budget in respect of that next financial year in the Agreed Form.
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(b) Each Budget shall include:
(i) a projected consolidated cash flow statement and profit and
loss account of the Group for that financial year; and;
(ii) a management commentary on:
(A) the proposed activities of the Group during that
year (including material Capital Expenditure
investments, acquisitions and disposals proposed
during that year);
(B) the principal assumptions underlying the projections
in that Budget; and
(C) any material variations to the Base Case during that
year.
(c) The Company shall supply to the Facility Agent in sufficient copies
for all the Lenders an updated Budget promptly upon becoming aware
of any material change to the projections in the then most recent
Budget.
19.7 PRESENTATIONS
(a) If requested by the Facility Agent (acting on the instructions of
the Majority Lenders), the directors of the Company shall give a
presentation to the Lenders, at such time and place as the Facility
Agent may reasonably request, about the business, financial
performance and prospects of the Group, and such other matters as
any Finance Party (through the Facility Agent) may reasonably
request. The Facility Agent (acting on the instructions of the
Majority Lenders) may not request more than one presentation in any
financial year, unless an Event of Default is continuing.
19.8 INFORMATION: MISCELLANEOUS
The Company shall supply to the Facility Agent (in sufficient copies
for all the Lenders, if the Facility Agent so requests):
(a) at the same time as they are dispatched, copies of all
documents dispatched by the Company to its shareholders, in
their capacity as shareholders generally (or any class of
them) or its creditors generally (or any class of them);
(b) promptly upon becoming aware of them, the details of any
litigation, arbitrations or administrative proceedings which
are current, threatened in writing or pending against any
member of the Group or any Restricted Person, which could
reasonably be expected to be adversely determined and which,
if so determined, would reasonably be expected to have a
Material Adverse Effect;
(c) promptly upon becoming aware of them, the details of any
litigation, arbitration or administrative proceedings which
are current, pending or threatened, and any claim, notice or
other communication received by it in respect of any actual
or alleged breach or liability or any notice of
acceleration, enforcement or similar steps, which relates to
the Security in Belgium granted in respect of the Euro
Notes.
(d) promptly upon becoming aware of them, the details of any
litigation, arbitration or administrative proceedings which
are current, pending or threatened in writing, and any
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claim, notice or other communication in respect of any
actual or alleged breach or liability, relating to the DIP
Financing (or any replacement to the DIP Financing);
(e) promptly upon becoming aware of them, the details of any
material labour dispute affecting any member of the Group
which could reasonably be expected to be adversely
determined and which, if so determined, would reasonably be
expected to have a Material Adverse Effect;
(f) promptly upon becoming aware of them, the details of any
claim, notice or other written communication received by it
in respect of any actual or alleged breach of or liability
under Environmental Law, or any event or circumstance which
is likely to result in any such claim or notice, which could
reasonably be expected to be substantiated and which, if
substantiated, would reasonably be expected to have a
Material Adverse Effect;
(g) promptly upon becoming aware of them, any change in the
structure of the Group from that set out in the Group
Structure Chart which is or would reasonably be expected to
be adverse to the interests of the Finance Parties;
(h) promptly upon becoming aware of them, the details of any
claim and/or potential claim for an amount in excess of
(euro)3,000,000 (or its equivalent in another currency or
currencies) in aggregate made by or on behalf of any member
of the Group under any insurance policy;
(i) promptly such further information regarding the financial
condition or the business of any member of the Group as any
Finance Party (through the Facility Agent) may reasonably
request.
19.9 NOTIFICATION OF EVENT OF DEFAULT
(a) Each Obligor shall notify the Facility Agent of any Event of Default
(and the steps, if any, being taken to remedy it) promptly upon
becoming aware of its occurrence (unless that Obligor is aware that
a notification has already been provided by another Obligor).
(b) Promptly upon a request by the Facility Agent, the Company shall
supply to the Facility Agent a certificate signed by two of its
directors on its behalf certifying that no Event of Default is
continuing (or if an Event of Default is continuing, specifying the
Event of Default and the steps, if any, being taken to remedy it).
19.10 INSPECTION OF BOOKS AND RECORDS
(a) Each Obligor shall (and the Company shall ensure that each member of
the Group will):
(i) keep books and records which accurately reflect in all
material respects all of its business, affairs and
transactions; and
(ii) following the occurrence of an Event of Default and upon
reasonable notice, permit any Finance Party to visit any of
its offices during normal working hours, to inspect any of
its books and records and to discuss its financial matters
with its officers and auditors. The cost and expense of each
such visit shall be borne by the Company.
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(b) If requested by the Facility Agent, each Obligor shall authorise
and/or (as the case may be) engage its auditors and/or any of the
firms which prepared the Reports to discuss any matter with any of
the Finance Parties on terms and conditions acceptable to the
Facility Agent (acting reasonably).
19.11 AUDITORS
(a) Subject to paragraph (b), the Company shall ensure that the same
internationally recognised "big four" firm of accountants is
appointed as its auditors and the auditors of each other member of
the Group, with the exception of CP Films Vertriebs GmbH which may
continue to use its existing firm of accountants as auditors.
(b) No Obligor shall (and the Company shall ensure that no other member
of the Group will) change its auditors without the consent of the
Majority Lenders.
(c) The Company shall ensure that the financial year end of the Group
and each member of the Group is 31 December.
(d) No Obligor shall (and the Company shall ensure that no other member
of the Group will) change its financial year end or the end of its
Accounting Quarter or Accounting Month without the consent of the
Majority Lenders.
19.12 INVESTIGATIONS
(a) The Facility Agent (acting reasonably) may (no more than once in any
calendar year or at any time following the occurrence of an Event of
Default which is continuing) require the Company to instruct the
auditors of the Company (or such other internationally recognised
"big four" firm of accountants as the Facility Agent selects) to
investigate the affairs, financial performance or accounting and
other reporting procedures and standards of the Group.
The cost and expense of each such investigation or report shall be
borne by the Company.
(b) Each Obligor shall (and the Company shall ensure that each other
member of the Group will) co-operate fully with any person carrying
out an investigation or preparing a report pursuant to paragraph (a)
above.
19.13 USE OF WEBSITES
(a) The Company may satisfy its obligation under this Agreement to
deliver any information in relation to those Lenders (the "WEBSITE
LENDERS") who accept this method of communication by posting this
information onto an electronic website designated by the Company and
the Facility Agent (the "DESIGNATED WEBSITE") if:
(i) the Facility Agent expressly agrees (after consultation with
each of the Lenders) that it will accept communication of
the information by this method;
(ii) both the Company and the Facility Agent are aware of the
address of and any relevant password specifications for the
Designated Website; and
(iii) the information is in a format previously agreed between the
Company and the Facility Agent.
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If any Lender (a "PAPER FORM LENDER") does not agree to the delivery
of information electronically then the Facility Agent shall notify
the Company accordingly and the Company shall supply the information
to the Facility Agent (in sufficient copies for each Paper Form
Lender) in paper form. In any event the Company shall supply the
Facility Agent with at least one copy in paper form of any
information required to be provided by it.
(b) The Facility Agent shall supply each Website Lender with the address
of and any relevant password specifications for the Designated
Website following designation of that website by the Company and the
Facility Agent.
(c) The Company shall promptly upon becoming aware of its occurrence
notify the Facility Agent if:
(i) the Designated Website cannot be accessed due to technical
failure;
(ii) the password specifications for the Designated Website
change;
(iii) any new information which is required to be provided under
this Agreement is posted onto the Designated Website;
(iv) any existing information which has been provided under this
Agreement and posted onto the Designated Website is amended;
or
(v) the Company becomes aware that the Designated Website or any
information posted onto the Designated Website is or has
been infected by any electronic virus or similar software.
If the Company notifies the Facility Agent under sub-paragraph (i)
or sub-paragraph (v) above, all information to be provided by the
Company under this Agreement after the date of that notice shall be
supplied in paper form unless and until the Facility Agent and each
Website Lender is satisfied that the circumstances giving rise to
the notification are no longer continuing.
(d) Any Website Lender may request, through the Facility Agent, one
paper copy of any information required to be provided under this
Agreement which is posted onto the Designated Website. The Company
shall comply with any such request within ten Business Days.
19.14 "KNOW YOUR CUSTOMER" CHECKS
(a) If:
(i) the introduction of or any change in (or in the
interpretation, administration or application of) any law or
regulation made after the date of this Agreement;
(ii) any change in the status of an Obligor after the date of
this Agreement; or
(iii) a proposed assignment or transfer by a Lender of any of its
rights and obligations under this Agreement to a party that
is not a Lender prior to such assignment or transfer,
obliges the Facility Agent or any Lender (or, in the case of
sub-paragraph (iii) above, any prospective new Lender) to comply
with "know your customer" or similar identification procedures in
circumstances where the necessary information is not already
available to it, each Obligor shall promptly upon the request of the
Facility Agent or any Lender supply, or procure the supply of, such
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documentation and other evidence as is reasonably requested by the
Facility Agent (for itself or on behalf of any Lender) or any Lender
(for itself or, in the case of the event described in sub-paragraph
(iii) above, on behalf of any prospective new Lender) in order for
the Facility Agent, such Lender or, in the case of the event
described in sub-paragraph (iii) above, any prospective new Lender
to carry out and be satisfied it has complied with all necessary
"know your customer" or other similar checks under all applicable
laws and regulations pursuant to the transactions contemplated in
the Finance Documents.
(b) Each Lender shall promptly upon the request of the Facility Agent
supply, or procure the supply of, such documentation and other
evidence as is reasonably requested by the Facility Agent (for
itself) in order for the Facility Agent to carry out and be
satisfied it has complied with all necessary "know your customer" or
other similar checks under all applicable laws and regulations
pursuant to the transactions contemplated in the Finance Documents.
(c) The Company shall, by not less than 10 Business Days' prior written
notice to the Facility Agent, notify the Facility Agent (which shall
promptly notify the Lenders) of its intention to request that one of
its Subsidiaries becomes an Additional Obligor pursuant to Clause 24
(Changes to the Obligors).
(d) Following the giving of any notice pursuant to paragraph (c) above,
if the accession of such Additional Obligor obliges the Facility
Agent or any Lender to comply with "know your customer" or similar
identification procedures in circumstances where the necessary
information is not already available to it, the Company shall
promptly upon the request of the Facility Agent or any Lender
supply, or procure the supply of, such documentation and other
evidence as is reasonably requested by the Facility Agent (for
itself or on behalf of any Lender) or any Lender (for itself or on
behalf of any prospective new Lender) in order for the Facility
Agent or such Lender or any prospective new Lender to carry out and
be satisfied it has complied with all necessary "know your customer"
or other similar checks under all applicable laws and regulations
pursuant to the accession of such Subsidiary to this Agreement as an
Additional Obligor.
19.15 NO PERSONAL LIABILITY
No director, officer or employee of the Company or any other member
of the Group shall be personally liable for any statement made by it
in any certificate or other document as required to be delivered
pursuant to any Finance Party pursuant to the Finance Documents.
20. FINANCIAL COVENANTS
20.1 FINANCIAL CONDITION
Commencing in and including the Relevant Period to 31 December 2006,
the Company shall ensure that:
(a) the ratio of EBITDA to Net Interest Expense for each
Relevant Period ending on a Relevant Date set out in the
table below will not be less than the ratio set out in the
relevant column in the table below opposite that Relevant
Date;
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(b) the ratio of Net Borrowings on each Relevant Date set out in
the table below to EBITDA for the Relevant Period ending on
that Relevant Date will not exceed the ratio set out in the
relevant column in the table below opposite that Relevant
Date;
(c) the ratio of Cash Flow to Debt Service for each Relevant
Period ending on a Relevant Date set out in the table below
will not be less than 1:1.
------------------------------------------------------------------------------------------------
RELEVANT DATE NET BORROWINGS / EBITDA EBITDA / NET INTEREST EXPENSE
------------------------------------------------------------------------------------------------
31 December 2006 3.10 : 1 3.90 : 1
31 March 2007 3.10 : 1 3.90 : 1
30 June 2007 3.10 : 1 3.90 : 1
30 September 2007 3.10 : 1 3.90 : 1
31 December 2007 2.65 : 1 3.95 : 1
31 March 2008 2.65 : 1 3.95 : 1
30 June 2008 2.65 : 1 3.95 : 1
30 September 2008 2.65 : 1 3.95 : 1
31 December 2008 2.00 : 1 4.30 : 1
31 March 2009 2.00 : 1 4.30 : 1
30 June 2009 2.00 : 1 4.30 : 1
30 September 2009 2.00 : 1 4.30 : 1
31 December 2009 2.00 : 1 4.95 : 1
31 March 2010 2.00 : 1 4.95 : 1
30 June 2010 2.00 : 1 4.95 : 1
30 September 2010 2.00 : 1 4.95 : 1
31 December 2010 2.00 : 1 5.00 : 1
31 March 2011 2.00 : 1 5.00 : 1
30 June 2011 2.00 : 1 5.00 : 1
30 September 2011 2.00 : 1 5.00 : 1
31 December 2011 2.00 : 1 5.00 : 1
------------------------------------------------------------------------------------------------
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20.2 CAPITAL EXPENDITURE
(a) No Obligor shall (and the Company shall ensure that no other member
of the Group will) in any financial year of the Company set out in
column (1) below incur Capital Expenditure if as a result the
aggregate amount of Capital Expenditure of the Group in that
financial year would exceed the aggregate of (i) the amount set out
in column (2) below opposite that financial year and (ii) any
Retained Cash (to the extent it has not already been applied or
committed to be applied in accordance with this Agreement for
another purpose) for that financial year.
(1) (2)
FINANCIAL YEAR TO AMOUNT IN (EURO)
31 December 2007 13,300,000
31 December 2008 7,500,000
31 December 2009 6,000,000
31 December 2010 24,900,000
31 December 2011 12,500,000
(b) If the Capital Expenditure incurred in any financial year of the
Company set out in column (1) in paragraph (a) above is less than
the amount set out in column (2) in paragraph (a) above opposite
that financial year, to the extent that the shortfall could have
been incurred in that financial year without breaching any term of
this Agreement then 50 per cent. of that shortfall may be carried
forward to the subsequent financial year of the Company only and
added to the maximum Capital Expenditure set out in column (2) in
paragraph (a) above for that subsequent financial year.
(c) If any shortfall is carried forward to any subsequent financial year
under paragraph (b) above, in that subsequent financial year any
Capital Expenditure incurred up to the amount set out in column (2)
in paragraph (a) above opposite that financial year shall be treated
as incurred before any Capital Expenditure incurred up to the amount
of any such shortfall.
(d) If any shortfall carried forward to any subsequent financial year
under paragraph (c) above is not spent in that subsequent financial
year it shall cease to be available.
20.3 FINANCIAL COVENANT CALCULATIONS
(a) Capital Expenditure, Cash Flow, Debt Service, EBITDA, Interest
Expense, Net Borrowings, Net Interest Expense, Total Borrowings and
Working Capital shall be calculated and interpreted on a
consolidated basis in accordance with the Applicable Accounting
Principles and shall be expressed in euro.
(b) Subject to paragraph (c) below, Capital Expenditure, Cash Flow,
EBITDA, Interest Expense, Net Interest Expense and Working Capital
shall be determined (except as needed to reflect the terms of this
Clause 20) from the financial statements of the Group and Compliance
Certificates delivered under Clause 19.1 (Annual financial
statements), Clause 19.2 (Quarterly financial statements), and
Clause 19.4 (Compliance Certificate).
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(c) In respect of the Relevant Periods ending on each of 31 December
2006, 31 March 2007 and 30 June 2007, Interest Expense and Net
Interest Expense shall each be calculated on a pro forma basis to
the extent applicable as if the Facilities had been utilised in full
on the date of commencement of each such Relevant Period with the
exception that Interest Expense and Net Interest Expense shall not
be calculated on a pro forma basis for the purpose of calculating
Excess Cash Flow.
(d) For the purpose of this Clause 20, no item shall be included or
excluded more than once in any calculation.
(e) If any requirement set out in paragraphs (a) to (c) Clause 20.1
(Financial condition) is not, or may not be, complied with at any
time the Company may, no later than the date of delivering to the
Facility Agent the Compliance Certificate setting out that
non-compliance, procure that Monchem International Inc. or Solutia
Investments LLC provides further investment in the shares of the
Company, or makes a capital contribution to the Company or makes a
shareholder loan to the Company (which shall be subordinated to the
Facilities on terms satisfactory to the Facility Agent) which does
not exceed on any occasion (euro)10,000,000 (the "CURE AMOUNT"), in
an amount sufficient to ensure compliance with the relevant
requirement immediately after that investment or capital
contribution or shareholder loan and any applicable breach or
default of the requirements of paragraphs (a) to (c) of Clause 20.1
(Financial condition) referred to in this paragraph shall be deemed
cured for all purposes of the Finance Documents.
This right may only be exercised once in any period of four
consecutive Accounting Quarters and no more than twice in the period
from the date of the Facility Agreement to the Termination Date.
If any such investment or capital contribution or shareholder loan
is made in any Relevant Period to ensure compliance with the
relevant requirement in the immediately preceding Relevant Period,
that investment or capital contribution or shareholder loan shall be
deemed to have been made on the last day of that immediately
preceding Relevant Period and to be added to EBITDA for that
Relevant Period (and all subsequent Relevant Periods) for the
purpose of this Clause 20.
20.4 DEFINITIONS
In this Clause 20:
"CASH FLOW" means, in relation to any Relevant Period, EBITDA for
that Relevant Period adjusted (without double-counting):
(a) by deducting any increase or adding any decrease in Working
Capital during that Relevant Period;
(b) by deducting amounts paid during the Relevant Period by the
Group in respect of Capital Expenditure other than Capital
Expenditure to the extent funded from Net Sale Proceeds or
Insurance Proceeds, other than the proceeds of any insurance
policy in relation to business interruption loss which are
added back to the total consolidated operating profit of the
Group
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in accordance with the Applicable Accounting Principles,
permitted to be applied for that purpose under this
Agreement;
(c) by deducting amounts paid during the Relevant Period by the
Group in cash in respect of Tax;
(d) by excluding any other non-cash items taken into account in
calculating EBITDA (other than to the extent already taken
into account in movements in Working Capital);
(e) for the cash effect of extraordinary and exceptional items,
to the extent that cash was actually received or expended
during the Relevant Period;
(f) by deducting any fees, expenses or charges paid in cash in
relation to any equity offering, investment, acquisition or
indebtedness permitted to be incurred under this Agreement
(whether or not successful) to the extent not deducted from
EBITDA;
(g) by deducting the aggregate amount of any payments made as
permitted under paragraph (c) of the definition of Permitted
Non-Recourse Subsidiary or paragraph (f) of the definition
of Permitted Loan;
(h) by adding the aggregate amount received during the Relevant
Period by the Group in cash in respect of any rebate of Tax;
(i) by deducting the cost of acquisition of any shares or
businesses to the extent not included in EBITDA;
(j) by adding the net proceeds of any sale, lease, transfer or
other disposal of assets received during that Relevant
Period (other than any such proceeds received in relation to
a sale, lease, transfer or other disposal permitted under
paragraph (a) of the definition of Permitted Disposal) after
deducting the amount of any such proceeds required to be
applied in prepayment under Clause 7.5 (Mandatory prepayment
- Net Sale Proceeds);
(k) by adding the amount of any dividends or other profit
distributions (net of Tax) received by any member of the
Group from any person which is not a member of the Group
during that Relevant Period;
(l) by deducting the amount of any dividends or other profit
distributions paid in cash by the Company during that
Relevant Period;
(m) by deducting the amount of any prepayment premium arising
under the Euro Notes incurred as a result of early
redemption;
(n) to the extent not taken into account in any other paragraph
in this definition, by adding all cash credits and release
provisions, and deducting all cash debits and other cash
charges and provisions not included in establishing EBITDA
for such period; and
(o) to the extent not taken into account in any other paragraph
in this definition, by deducting all non-cash credits and
release of provisions and adding all non-cash debits and
other non-cash charges and provisions included in
establishing EBITDA for such period.
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"DEBT SERVICE" means, in relation to any Relevant Period, the
aggregate of:
(a) Net Interest Expense for that Relevant Period; and
(b) scheduled repayments, and any other scheduled payments in
the nature of principal, payable by the Group in that
Relevant Period in respect of Financial Indebtedness:
(i) including all capital payments falling due in
relation to any lease that would be treated as a
capital lease under the Applicable Accounting
Principles; and
(ii) excluding any amounts falling due under the
Permitted Revolving Credit Facility which were
available for simultaneous redrawing and any
Financial Indebtedness between any members of the
Group,
in each case adjusted to reflect the assumption or repayment
of debt relating to any member of the Group or business or
assets acquired or sold during the Relevant Period.
"EBITDA" means, in relation to any Relevant Period, the total
consolidated operating profit of the Group on continuing operations
for that Relevant Period:
(a) including the net pre-taxation profits of a member of the
Group or business or assets acquired during that Relevant
Period for the part of that Relevant period when it was not
a member of the Group and/or the business or assets were not
owned by a member of the Group; but
(b) excluding the net pre-taxation profits attributable to any
member of the Group or to any business or assets sold during
that Relevant Period.
but:
(i) before taking into account:
(A) Net Interest Expense;
(B) Tax;
(C) Non-operational profits (or losses) and profits (or
losses) attributable to minority interests in any
member of the Group;
(D) any share of the profit of any associated company or
undertaking, except for dividends or other profit
distributions (net of Tax) received in cash by any
member of the Group;
(E) all extraordinary and exceptional items;
(F) exchange rate gains (or losses) arising due to the
re-translation of balance sheet items and
mark-to-market adjustments on currency swaps; and
(G) excluding non-operating gains or losses;
(ii) after excluding (to the extent included) any gains or losses
on the disposal or revaluation of assets (other than in the
ordinary course of trading);
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(iii) after adding any business interruption loss incurred which
is covered by insurance and which is not added back to the
total consolidated operating profit of the Group in
accordance with the Applicable Accounting Principles; and
(iv) after adding back all amounts provided for depreciation and
amortisation (including acquisition goodwill) and any Cure
Amount provided that the right to provide any such Cure
Amount may only be exercised once in any period of four
consecutive Accounting Quarters and no more than twice in
the period from the date of the Facility Agreement to the
Termination Date.
"INTEREST EXPENSE" means, in relation to any Relevant Period, the
aggregate amount of interest and any other finance charges (whether
or not paid or payable) accrued by the Group in that Relevant Period
in respect of Total Borrowings including:
(a) the interest element of leasing and hire purchase payments;
(b) commitment fees, regular periodic finance charges,
arrangement fees and guarantee fees; and
(c) prepayment fees,
with each of (a), (b) and (c) above adjusted by:
(i) adding back the net amount payable (or deducting the
net amount receivable) by members of the Group in
respect of that Relevant Period under any interest
or (so far as they relate to interest) currency
hedging arrangements;
(ii) excluding any arrangement fees in respect of the
Facility; and
(iii) excluding non-operational items.
"NET BORROWINGS" means, as at any particular time, Total Borrowings
less Cash and Cash Equivalent Investments at that time.
"NET INTEREST EXPENSE" means, in relation to any Relevant Period,
Interest Expense for that Relevant Period less interest income of
the Group in respect of that Relevant Period to the extent received
by an Obligor in cash in each case adjusted to reflect the
assumption or repayment of debt relating to any member of the Group
or business or assets acquired or sold during the Relevant Period.
"RELEVANT DATE" means the last date of each Accounting Quarter.
"RELEVANT PERIOD" means each period of four consecutive Accounting
Quarters ending on a Relevant Date.
"TOTAL BORROWINGS" means, as at any particular time, the aggregate
outstanding principal, capital or nominal amount (and any fixed or
minimum premium payable on prepayment or redemption) of the
Financial Indebtedness of members of the Group excluding paragraph
(g) of the definition of Financial Indebtedness.
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For this purpose, any amount outstanding or repayable in a currency
other than euro shall on that day be taken into account in its euro
equivalent at the rate of exchange that would have been used had an
audited consolidated balance sheet of the Group been prepared as at
that day in accordance with the Applicable Accounting Principles.
"WORKING CAPITAL" means, at any time, the current assets of the
Group being realisable within one year (other than Cash and Cash
Equivalent Investments) less current liabilities due within one year
(other than Financial Indebtedness).
21. GENERAL UNDERTAKINGS
The undertakings in this Clause 21 remain in force from the date of
this Agreement for so long as any amount is outstanding under the
Finance Documents or any Commitment is in force.
AUTHORISATIONS AND COMPLIANCE WITH LAWS
21.1 AUTHORISATIONS
(a) Each Obligor shall (and the Company shall ensure that each other
member of the Group will) promptly obtain, comply with and do all
that is necessary to maintain in full force and effect (and supply
certified copies to the Facility Agent of) any necessary
Authorisation required under any applicable law or regulation of its
Relevant Jurisdiction to:
(i) enable it to perform its obligations under the Finance
Documents;
(ii) subject to the Reservations and any Perfection Requirements,
ensure the legality, validity, enforceability or
admissibility in evidence in the Relevant Jurisdiction of
any Finance Documents; and
(iii) enable it to carry on its business as it is being conducted
from time to time if failure to obtain, comply with or
maintain any such Authorisation would reasonably be expected
to have a Material Adverse Effect.
(b) The Company shall ensure that the Perfection Requirements are
complied with promptly and in any event before the final date on
which it is necessary to carry out any such Perfection Requirement
in order to achieve the relevant perfection, protection or priority
of any Security Document.
21.2 COMPLIANCE WITH LAWS
Each Obligor shall (and the Company shall ensure that each other
member of the Group will) comply in all respects with all laws to
which it may be subject, if failure so to comply would reasonably be
expected to have a Material Adverse Effect.
21.3 ENVIRONMENTAL LAWS AND LICENCES
(a) Each Obligor shall (and the Company shall ensure that each other
member of the Group will):
(i) comply with all Environmental Laws to which it may be
subject;
(ii) obtain all Environmental Licences required in connection
with its business; and
(iii) comply with the terms of those Environmental Licences,
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in each case where failure to do so would reasonably be expected to
have a Material Adverse Effect.
21.4 TAXES
(a) Each Obligor shall (and the Company shall ensure that each other
member of the Group will) pay all Taxes required to be paid by it
within the time period allowed for payment without incurring any
penalties for non payment.
(b) Paragraph (a) above does not apply to any Taxes:
(i) being contested by the relevant member of the Group in good
faith and in accordance with the relevant procedures;
(ii) which have been disclosed in its financial statements and
for which adequate reserves are being maintained in
accordance with GAAP; and
(iii) where payment can be lawfully withheld and will not result
in the imposition of any penalty nor in any Security (other
than paragraph (l) of the definition of Permitted Security)
ranking in priority to the claims of any Finance Party under
any Finance Document or to any Security created under any
Security Document.
(c) No member of the Group may change its residence for Tax purposes.
RESTRICTIONS ON BUSINESS FOCUS
21.5 MERGER
(a) No Obligor shall (and the Company shall ensure that no other member
of the Group will) enter into any amalgamation, demerger, merger,
sale or contribution of all assets and liabilities of a company
("universalite/algemeenheid") or of a branch of activities,
consolidation or corporate reconstruction.
(b) Paragraph (a) above does not apply to any amalgamation, demerger,
merger, sale or contribution of all assets and liabilities of a
company ("universalite/algemeenheid") or of a branch of activities,
consolidation or corporate reconstruction which is a Permitted
Merger.
21.6 CHANGE OF BUSINESS
The Company shall ensure that no substantial change is made to the
general nature of the business of the Company or the Group or the
Obligors taken as a whole from that carried on at the date of this
Agreement.
21.7 JOINT VENTURES
(a) Without the prior consent of the Majority Banks no Obligor shall
(and the Company shall ensure that no member of the Group will):
(i) invest in or acquire (or agree to invest in or acquire) any
share in, or any security issued by, any Joint Venture or
any interest therein; or
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(ii) transfer any assets or lend to or give a guarantee, or
Security or Quasi Security (other than Permitted Security),
for the obligations of a Joint Venture (or agree to do any
of the foregoing).
(b) Paragraph (a) above does not apply to any investment in, or transfer
or loan to, or guarantee for the obligations of the company referred
to in paragraph (a) of Schedule 8 (Disposals) other than prior to
the date hereof.
21.8 ACQUISITIONS AND INVESTMENTS
(a) No Obligor shall (and the Company shall ensure that no other member
of the Group will):
(i) invest in or acquire any share in, or any security issued
by, any person, or any interest therein or in the capital of
any person, or make any capital contribution to any person
(or agree to do any of the foregoing); or
(ii) invest in or acquire any business or going concern, or the
whole or substantially the whole of the assets or business
of any person, or any assets that constitute a division or
operating unit of the business of any person (or agree to do
any of the foregoing).
(b) Paragraph (a) above does not apply to any acquisition or investment
which is a Permitted Acquisition.
21.9 NON-RECOURSE SUBSIDIARIES
(a) No Obligors shall (and the Company shall ensure that no member of
the Group will ) without the consent of the Majority Lenders:
(i) invest in or acquire (or agree to invest in or acquire) any
share in, or any security issued by, any Non-Recourse
Subsidiary or any interest therein; or
(ii) transfer any assets or lend to or give a guarantee, or
Security or Quasi Security, other than for the obligations
of a Non-Recourse Subsidiary (or agree to do any of the
foregoing.
(b) Paragraph (a) above does not apply to any acquisition of or
investment in, or transfer or loan to, or guarantee, Security or
Quasi Security other than for the obligations of, a Permitted
Non-Recourse Subsidiary.
RESTRICTIONS ON DEALING WITH ASSETS AND SECURITY
21.10 ASSETS
Each Obligor shall (and the Company shall ensure that each other
member of the Group will) maintain to a standard of repair
consistent with that maintained by companies carrying on businesses
similar to that carried on by the Group (ordinary wear and tear
excepted) all its physical assets necessary for the conduct of its
business as conducted from time to time except where failure to so
maintain could not reasonably be expected to have a Material Adverse
Effect.
21.11 PARI PASSU
Each Obligor shall ensure that its obligations under the Finance
Documents rank at all times at least pari passu in right of priority
and payment with the claims of all its other unsecured and
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unsubordinated creditors, except for obligations mandatorily
preferred by law applying to companies generally.
21.12 NEGATIVE PLEDGE
(a) No Obligor shall (and the Company shall ensure that no other member
of the Group will) create or permit to subsist any Security or Quasi
Security over any of its assets.
(b) Paragraph (a) above does not apply to any Security or Quasi Security
which is Permitted Security.
21.13 DISPOSALS
(a) No Obligor shall (and the Company shall ensure that no other member
of the Group will) enter into a single transaction or a series of
transactions (whether related or not and whether voluntary or
involuntary) to sell, lease, transfer or otherwise dispose of any
asset.
(b) Paragraph (a) above does not apply to any sale, lease, transfer or
other disposal which is a Permitted Disposal.
21.14 ARM'S LENGTH TERMS
No Obligor shall (and the Company shall ensure that no other member
of the Group will) enter into any material contract or arrangement
with or for the benefit of any Restricted Person (including any
disposal to that person) other than:
(a) in the case of a transaction other than in the ordinary
course of business, for full market value and on arm's
length terms; or
(b) in the case of a transaction in the ordinary course of
business, on arm's length terms to the extent consistent
with previous practice.
21.15 LOANS OR CREDIT
(a) No Obligor shall (and the Company shall ensure that no other member
of the Group will) be a creditor in respect of any Financial
Indebtedness.
(b) Paragraph (a) above does not apply to a Permitted Loan.
21.16 GUARANTEES
(a) No Obligor shall (and the Company shall ensure that no other member
of the Group will) issue or allow to remain outstanding any
guarantee in respect of any liability or obligation of any person.
(b) Paragraph (a) above does not apply to a Permitted Guarantee.
21.17 RESTRICTED PAYMENTS
(a) No Obligor shall (and the Company shall ensure that no other member
of the Group will):
(i) pay, repay or prepay any principal, interest or other amount
on or in respect of, or redeem, purchase or defease, any
Financial Indebtedness owing to any Restricted Person; or
(ii) make any investment in, or pay any fee or make any advance
or other kind of payment to any Restricted Person other than
in the ordinary course of business, on arm's length terms
and at full market value.
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(b) The Company shall not:
(i) declare, pay or make any dividend or other payment or
distribution of any kind on or in respect of any of its
shares; and
(ii) reduce, return, purchase, repay, cancel or redeem any of its
shares.
(c) Paragraphs (a) and (b) above do not apply to a payment which is a
Permitted Payment.
MOVEMENT OF CASH - CASH IN
21.18 FINANCIAL INDEBTEDNESS
(a) No Obligor shall (and the Company shall ensure that no other member
of the Group will) incur (or agree to incur) or allow to remain
outstanding any Financial Indebtedness.
(b) Paragraph (a) above does not apply to Financial Indebtedness that is
Permitted Financial Indebtedness.
21.19 ISSUE OF SHARES
(a) No Obligor shall (and the Company shall ensure that no other member
of the Group will):
(i) issue any share to any person; or
(ii) grant to any person any conditional or unconditional option,
warrant or other right to call for the issue or allotment
of, subscribe for, purchase or otherwise acquire any share
of any member of the Group (including any right of
pre-emption, conversion or exchange), or alter any right
attaching to any share capital of any member of the Group.
(b) Paragraph (a) above does not apply to a Permitted Share Transaction.
MISCELLANEOUS
21.20 SECURITY AND GUARANTEES
(a) The Company shall:
(i) promptly notify the Facility Agent if:
(A) any new member of the Group is incorporated;
(B) any member of the Group becomes a Material
Subsidiary; or
(C) any business or asset that is material in the
context of the business of the member of the Group
that acquires that business or asset is acquired;
and
(ii) at any time within 30 days of request by the Facility Agent,
ensure, subject to the Security Principles, that the
relevant member of the Group will:
(A) become an Additional Guarantor; and
(B) provide Security in form and substance satisfactory
to the Security Agent, in favour of the Secured
Parties to secure all of the obligations of the
Obligors under the Secured Documents.
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(b) The Company shall ensure that members of the Group shall at all
times grant security in accordance with the Security Principles.
(c) The Company shall ensure that all perfection requirements set out in
the Perfection Requirements List are satisfied within the time
period set out in that list to the extent these are required to be
satisfied by such specified time following the Closing Date.
(d) Each Obligor shall (and the Company shall ensure that each other
member of the Group will), at its own expense, promptly take all
such action as the Facility Agent or the Security Agent may require
acting in accordance with the Security Principles:
(i) for the purpose of perfecting or protecting any of the
Secured Parties' rights under, and preserving the Security
intended to be created or evidenced by, any of the Finance
Documents; and
(ii) for the purpose of facilitating the realisation of any of
that Security,
including the execution of any transfer, conveyance, assignment or
assurance of any asset and the giving of any notice, order or
direction and the making of any registration which the Facility
Agent or the Security Agent may reasonably require.
(e) No Obligor shall (and the Company shall ensure that no other member
of the Group will) do, or consent to the doing of, anything which
might prejudice the validity, enforceability or priority of any of
the Security created pursuant to the Security Documents.
(f) The Company shall ensure that at all times after the date of this
Agreement:
(i) the aggregate of the unconsolidated total assets (excluding
any intragroup loans) of the Guarantors (without double
counting and excluding any interests in any Subsidiaries
which are Guarantors) exceeds 80 per cent. of the
consolidated total assets of the Group; and
(ii) the aggregate of the unconsolidated revenues and EBITDA of
the Guarantors (without double counting and excluding any
dividends or other distributions from Subsidiaries which are
Guarantors) exceeds 80 per cent. of the consolidated
revenues and EBITDA of the Group,
in each case calculated by reference to the then most recent
unconsolidated financial statements of each Guarantor and the then
most recent consolidated financial statements of the Group.
21.21 INTERCOMPANY DEBT
The Company shall ensure that (i) each Obligor and (ii) members of
the Group (other than Obligors) which are or become creditors in
respect of Financial Indebtedness of Obligors to the extent such
aggregate amount exceeds (euro)5,000,000 (or its equivalent in
another currency or currencies) accedes to the Intercreditor
Agreement as an Intercompany Borrower (as defined in the
Intercreditor Agreement) and, as the case may be, an Intercompany
Lender (as defined in the Intercreditor Agreement), in accordance
with the Intercreditor Agreement.
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21.22 INSURANCE
(a) Each Obligor shall (and the Company shall ensure that each other
member of the Group will) maintain insurances (including as to self
insurance) on and in relation to its business and assets with
reputable independent underwriters or insurance companies:
(i) against those risks, and to the extent, usually insured
against by prudent companies located in the same or a
similar location and carrying on a similar business; and
(ii) against those risks, and to the extent, required by
applicable law or by contract.
(b) Without limiting paragraph (a) above, each Obligor shall (and the
Company shall ensure that each other member of the Group will)
maintain insurance on all of its assets of an insurable nature
against loss or damage by fire and other risks normally insured
against by persons carrying on a similar business in a sum or sums
at least equal to their replacement value (meaning the total cost of
entirely rebuilding, reinstating or replacing those assets if
completely destroyed, together with architects', surveyors' and
other professional fees).
(c) Each Obligor shall (and the Company shall ensure that each other
member of the Group will) promptly pay premiums and do all things
necessary to maintain insurances required of it by paragraphs (a)
and (b) above.
21.23 PENSIONS
The Company shall ensure that all pension schemes maintained or
operated by or for the benefit of any member of the Group and/or any
of its employees:
(a) are maintained and operated in all material respects in
accordance with all applicable laws and contracts and their
governing provisions; and
(b) are funded substantially in accordance with the governing
provisions of the scheme with any funding shortfall advised
by actuaries of recognised standing being rectified in
accordance with those governing provisions
except where failure to maintain or fund could not reasonably be
expected to have a Material Adverse Effect.
The Company shall promptly notify the Facility Agent of any material
change in the rate of contributions to any pension schemes referred
to in paragraph (a) above paid or recommended to be paid (whether by
the scheme actuary or otherwise) or required (by law or otherwise).
21.24 INTELLECTUAL PROPERTY
Each Obligor shall (and the Company shall ensure that each other
member of the Group will):
(a) take all reasonable action to obtain, safeguard, maintain in
full force and effect and preserve its ability to enforce
all Intellectual Property necessary for the conduct of its
business as conducted from time to time, and not discontinue
the use of any such Intellectual Property, including:
(i) paying all applicable renewal fees, licence fees and
other outgoings; and
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(ii) performing and complying with all material laws and
material obligations to which it is subject as
registered proprietor, beneficial owner, user,
licensor or licensee of any such necessary
Intellectual Property; and
(b) promptly notify the Facility Agent of any material
infringement or threatened or suspected material
infringement of or any challenge to the validity of any such
necessary Intellectual Property owned by or licensed to it
which may come to its notice, supply the Facility Agent (if
requested) with all information in its possession relating
thereto;
(c) take all necessary steps permitted under the relevant
licence to the extent consistent with normal business
practice to ensure that the licensor of the Intellectual
Property prevents third parties infringing any such
necessary Intellectual Property; and
(d) take all necessary steps permitted under the relevant
licence to the extent consistent with normal business
practice to ensure that the licensor of the Intellectual
Property enforces the confidentiality of and prevents any
improper use of any trade secret which is Intellectual
Property.
21.25 HEDGING
(a) The Company shall ensure that the hedging required by the Hedging
Letter is effected within 6 Months after the Closing Date (and is
maintained in effect) in accordance with the terms of the Hedging
Letter.
(b) At or before the time that any member of the Group enters into any
Hedging Document with a Hedging Bank, the Company shall ensure that
the counterparty accedes as a Hedging Bank to the Intercreditor
Agreement.
(c) No Obligor shall (and the Company shall ensure that no other member
of the Group will) enter (or agree to enter) into any derivative
transaction.
(d) Paragraph (c) above does not apply to any derivative transaction
which is a Permitted Hedging Transaction.
21.26 BANK ACCOUNTS
(a) No Obligor shall (and the Company shall ensure that no other member
of the Group will) open or maintain any account with any bank or
other financial institution unless if the account is subject to any
Permitted Security under paragraph (f) of that definition, provided
that such member of the Group uses its reasonable commercial
endeavours to have such Permitted Security released, subordinated or
waived, in form and substance satisfactory to the Security Agent, in
favour of the Secured Parties to secure all of the obligations of
the Obligors under the Secured Documents.
(b) Each Obligor shall (and the Company shall ensure that each other
member of the Group will) pay all sums received by it into a bank
account permitted by paragraph (f) above.
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21.27 AMENDMENT TO ARTICLES OF ASSOCIATION OF CP FILMS
The Company shall ensure that within 90 days of the date of this
Agreement, CP Films Vertriebs GmbH delivers to the Facility Agent a
certified copy of its articles of association (Gesellschaftsvertrag)
together with a certified extract from the commercial register
(Handelsregister) of the local court (Amtsgericht) of Bielefeld
evidencing that the restrictions on transferring and encumbering the
Shares (formerly No. 8 (Transfer of shares encumbrances) of the
articles of association) have been removed.
22. EVENTS OF DEFAULT
Each of the events or circumstances set out in this Clause 22 is an
Event of Default.
22.1 NON-PAYMENT
An Obligor does not pay on the due date any amount payable pursuant
to a Finance Document at the place at and in the currency in which
it is expressed to be payable unless:
(a) its failure to pay is caused by administrative or technical
error; and
(b) payment is made within 3 Business Days of its due date.
22.2 FINANCIAL COVENANTS
Any requirement of Clause 20 (Financial covenants) is not satisfied.
22.3 OTHER OBLIGATIONS
(a) Any Obligor does not comply with any provision of the Finance
Documents (other than those referred to in Clause 22.1
(Non-payment), Clause 22.2 (Financial covenants) above) unless the
failure to comply is capable of remedy and is remedied within 15
Business Days of the Facility Agent giving notice to the Company or
the Company becoming aware of the failure to comply.
22.4 MISREPRESENTATION
Any representation or statement made or deemed to be made by an
Obligor in the Finance Documents or any other document delivered by
or on behalf of any Obligor under any Finance Document is or proves
to have been incorrect or misleading in any material respect when
made or deemed to be made unless the facts or circumstances
underlying the misrepresentation are capable of remedy and are
remedied within 15 Business Days of the Facility Agent giving notice
to the Company or the Company becoming aware of the
misrepresentation.
22.5 CROSS DEFAULT
(a) Any Financial Indebtedness of any member of the Group is not paid
when due nor within any originally applicable grace period.
(b) Any Financial Indebtedness of any member of the Group is declared to
be or otherwise becomes due and payable prior to its specified
maturity as a result of an event of default (however described).
(c) Any commitment for any Financial Indebtedness of any member of the
Group is cancelled or suspended by a creditor of any member of the
Group as a result of an event of default (however described).
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(d) Any creditor of any member of the Group becomes entitled to declare
any Financial Indebtedness of any member of the Group due and
payable prior to its specified maturity as a result of an event of
default (however described).
(e) No Event of Default will occur under this Clause 22.5 if:
(i) the aggregate amount of Financial Indebtedness or commitment
for Financial Indebtedness falling within paragraphs (a) to
(d) above is less than (euro)10,000,000 (or its equivalent
in another currency or currencies); and
(ii) where the Financial Indebtedness falling within paragraphs
(a) to (d) above comprises an overdraft or other uncommitted
or on demand facility, such event is remedied within 5
Business Days of the Facility Agent giving notice to the
Company or the Company becoming aware of the relevant event.
22.6 INSOLVENCY
(a) Any Obligor or Material Subsidiary is unable on a persistent basis
(op duurzame wiize/de maniere persistante) (in relation to any
Belgian Obligors and Material Subsidiaries) or admits inability to
pay its debts as they fall due, suspends, or threatens to suspend,
making payments on any of its debts (or any class of them) including
cessation de paiements/stakring van betalingen, or, by reason of
actual or anticipated financial difficulties, commences negotiations
with one or more of its creditors (or any class of them) (other than
the Lenders) with a view to rescheduling any of its indebtedness.
(b) The value of the assets of any Obligor or Material Subsidiary is
less than its liabilities (taking into account contingent and
prospective liabilities).
(c) A moratorium is declared in respect of any indebtedness of any
Obligor or Material Subsidiary.
(d) Any procedure or step is taken in any jurisdiction of an Obligor
which is analogous to those provisions in (a) to (c) above.
22.7 INSOLVENCY PROCEEDINGS
(a) Any corporate action, legal proceedings or other procedure or step
is taken in relation to:
(i) the suspension of payments, a moratorium of any indebtedness
(including concordat judiciaire/gerechtelijk akkoord)
winding-up, dissolution, administration, bankruptcy
(including faillite/faillissement), or reorganisation (by
way of voluntary arrangement, scheme of arrangement or
otherwise) of any Obligor or Material Subsidiary;
(ii) a composition, compromise, assignment or arrangement with
any creditor of any Obligor or Material Subsidiary. In
relation to an Obligor incorporated in Belgium, these
concepts shall mean a "minnelijk akkoord met alle
schuldeisers" /'accord amiable avec tous les creanciers";
(iii) the appointment of a liquidator, receiver, administrative
receiver, administrator, an administrateur
judiciaire/gerechtelijk bestuurder, a commissaire
special/speciaal commissaris, administrateur
provisoire/voorlopige bewindvoerder, compulsory manager or
other similar officer in respect of any Obligor or Material
Subsidiary or any of its assets; or
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(iv) the enforcement of any Security over any assets of any
Obligor or Material Subsidiary where such Security secures
Financial Indebtedness in excess of (euro)2,500,000 (or its
equivalent in another currency or currencies),
or any analogous procedure or step is taken in any jurisdiction, in
particular (in relation to a German Obligor or a Material Subsidiary
incorporated in Germany):
(i) a petition for insolvency proceedings in respect of its
assets (Antrag auf Eroffnung eines Insolvenzverfahrens) is
filed or any event occurs which constitutes a mandatory
cause for the initiation of insolvency proceedings
(Eroffnungsgrund) as set out in sections 17 and 19 of the
German Insolvency Code (Insolvenzordnung) or;
(ii) actions are taken pursuant to section 21 of the German
Insolvency Code by the competent court.
Paragraph (a) above shall not apply to:
(iii) any corporate action, legal proceedings or other procedure
or step which is part of a solvent reorganisation of any
Obligor or Material Subsidiary permitted under this
Agreement; or
(iv) any winding-up petition which is frivolous or vexatious and
is discharged, stayed or dismissed within 30 days of
commencement and prior to its advertisement.
22.8 CREDITORS' PROCESS
Any expropriation, conservatory or executory seizure, attachment,
sequestration, distress or execution or any analogous process in any
jurisdiction affects any asset or assets of a Obligor or Material
Subsidiary and is not discharged within 90 days.
22.9 OWNERSHIP
Any Obligor or Material Subsidiary (other than the Company) is not
or ceases to be a wholly-owned Subsidiary of the Company unless
expressly permitted under the terms of this Agreement.
22.10 UNLAWFULNESS
It is or becomes unlawful for any Obligor to perform any of its
obligations under the Finance Documents.
22.11 REPUDIATION
Any Obligor repudiates a Finance Document or evidences an intention
to repudiate a Finance Document.
22.12 CONSTITUTIONAL DOCUMENTS
Any constitutional document of any member of the Group is
terminated, or is amended in a way, or any consent or waiver is
given in respect of any such document, which would be materially
detrimental in the interests of the Secured Parties under the
Security Documents.
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22.13 CESSATION OF BUSINESS
Any Obligor or Material Subsidiary suspends or ceases (or threatens
to suspend or cease) to carry on all or a material part of its
business as a going concern except as part of a Permitted Merger or
a Permitted Disposal.
22.14 NATIONALISATION
Any step is taken by any person with a view to the seizure,
compulsory acquisition, expropriation or nationalisation of all or
any of the shares, or all or any substantial part of the assets of
any Obligor or Material Subsidiary.
22.15 MATERIAL ADVERSE CHANGE
Any event or series of events occurs which the Majority Lenders
determine is reasonably likely to have a Material Adverse Effect.
22.16 ACCELERATION
(a) On and at any time after the occurrence of an Event of Default the
Facility Agent may, and shall if so directed by the Majority
Lenders, by notice to the Company:
(i) cancel the Total Commitments whereupon they shall
immediately be cancelled;
(ii) declare that all or part of the Utilisations, together with
accrued interest, and all other amounts accrued or
outstanding under the Finance Documents be immediately due
and payable, whereupon they shall become immediately due and
payable; and/or
(iii) declare that all or part of the Utilisations be payable on
demand, whereupon they shall immediately become payable on
demand by the Facility Agent on the instructions of the
Majority Lenders.
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SECTION 9
CHANGES TO PARTIES
23. CHANGES TO THE LENDERS
23.1 ASSIGNMENTS AND TRANSFERS BY THE LENDERS
Subject to this Clause 23, a Lender (the "EXISTING LENDER") may:
(a) assign any of its rights; or
(b) transfer by novation any of its rights and obligations,
to another bank or financial institution or to a trust, fund or
other entity which is regularly engaged in or established for the
purpose of making, purchasing or investing in loans, securities or
other financial assets (the "NEW LENDER").
23.2 CONDITIONS OF ASSIGNMENT OR TRANSFER
(a) The consent of neither the Company nor any other Obligor is required
for an assignment or transfer by an Existing Lender.
(b) An assignment will only be effective on:
(i) receipt by the Facility Agent of written confirmation from
the New Lender (in form and substance satisfactory to the
Facility Agent) that the New Lender will assume the same
obligations to the other Finance Parties as it would have
been under if it was an Original Lender;
(ii) the New Lender acceding to the Intercreditor Agreement in
accordance with the Intercreditor Agreement; and
(iii) the performance by the Facility Agent of all necessary "know
your customer" or other similar checks under all applicable
laws and regulations in relation to such assignment to a New
Lender, the completion of which the Facility Agent shall
promptly notify to the Existing Lender and the New Lender.
(c) A transfer will only be effective if the New Lender accedes to the
Intercreditor Agreement in accordance with the Intercreditor
Agreement and the procedure set out in Clause 23.5 (Procedure for
transfer) is complied with.
(d) If:
(i) a Lender assigns or transfers any of its rights or
obligations under the Finance Documents or changes its
Facility Office; and
(ii) as a result of circumstances existing at the date the
assignment, transfer or change occurs, an Obligor would be
obliged to make a payment to the New Lender or Lender acting
through its new Facility Office under Clause 12 (Tax
gross-up and indemnities) or Clause 13 (Increased Costs),
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then the New Lender or Lender acting through its new Facility Office
is only entitled to receive payment under those Clauses to the same
extent as the Existing Lender or Lender acting through its previous
Facility Office would have been if the assignment, transfer or
change had not occurred.
(e) If a Lender assigns or transfers part but not all of its share in
the Facilities to a person other than one of its Affiliates, another
Lender or a Related Fund, the amount of such assignment or transfer
must be a minimum of (euro)1,000,000 and in integral multiples of
(euro)1,000,000.
(f) A transfer or assignment will only be effective if the New Lender
has delivered to the Company and copied to the Facility Agent a Tax
Status Certificate duly completed and executed by it:
(i) in the case of an assignment, together with or prior to its
written confirmation as required by Clause 23.2(b)(i); or
(ii) in the case of a transfer, together with or prior to the
delivery of the Transfer Certificate to the Facility Agent
contemplated in Clause 23.5(a),
but only if (A) such Tax Status Certificate is required at such time
in order to enable the Borrower to make all payments made by it to
the Lenders without a Tax Deduction; and (B) such New Lender is not
a Belgian legal entity subject to Belgian corporate income tax.
23.3 ASSIGNMENT OR TRANSFER FEE
The New Lender shall, on the date upon which an assignment or
transfer takes effect, pay to the Facility Agent (for its own
account) a fee of (euro)2,000.
23.4 LIMITATION OF RESPONSIBILITY OF EXISTING LENDERS
(a) Unless expressly agreed to the contrary, an Existing Lender makes no
representation or warranty and assumes no responsibility to a New
Lender for:
(i) the legality, validity, effectiveness, adequacy or
enforceability of the Finance Documents or any other
documents;
(ii) the financial condition of any Obligor or other person;
(iii) the performance and observance by any Obligor or other
person of its obligations under the Finance Documents or any
other documents; or
(iv) the accuracy of any statements (whether written or oral)
made in or in connection with any Finance Document or any
other document,
and any representations or warranties implied by law are excluded.
(b) Each New Lender confirms to the Existing Lender and the other
Finance Parties that it:
(i) has made (and shall continue to make) its own independent
investigation and assessment of the financial condition and
affairs of each Obligor and its related entities in
connection with its participation in this Agreement and has
not relied exclusively on any information provided to it by
the Existing Lender or any other Finance Party in connection
with any Secured Document; and
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(ii) will continue to make its own independent appraisal of the
creditworthiness of each Obligor and its related entities
and any other person whilst any amount is or may be
outstanding under the Finance Documents or any Commitment is
in force.
(c) Nothing in any Finance Document obliges an Existing Lender to:
(i) accept a re-transfer from a New Lender of any of the rights
and obligations assigned or transferred under this Clause
23; or
(ii) support any losses directly or indirectly incurred by the
New Lender by reason of the non-performance by any Obligor
or other person of its obligations under the Finance
Documents or otherwise.
23.5 PROCEDURE FOR TRANSFER
(a) Subject to the conditions set out in this Clause 23 a transfer is
effected in accordance with paragraph (c) below when the Facility
Agent executes an otherwise duly completed Transfer Certificate
delivered to it by the Existing Lender and the New Lender and a duly
completed Tax Status Certificate. The Facility Agent shall, subject
to paragraph (b) below, as soon as reasonably practicable after
receipt by it of a duly completed Transfer Certificate appearing on
its face to comply with the terms of this Agreement and delivered in
accordance with the terms of this Agreement, execute that Transfer
Certificate.
(b) The Facility Agent shall only be obliged to execute a Transfer
Certificate delivered to it by the Existing Lender and the New
Lender once it is satisfied it has complied with all necessary "know
your customer" or other similar checks under all applicable laws and
regulations in relation to the transfer to such New Lender.
(c) On the Transfer Date:
(i) to the extent that in the Transfer Certificate the Existing
Lender seeks to transfer by novation its rights and
obligations under the Finance Documents each of the Obligors
and the Existing Lender shall be released from further
obligations towards one another under the Finance Documents
and their respective rights against one another under the
Finance Documents shall be cancelled (being the "DISCHARGED
RIGHTS AND OBLIGATIONS");
(ii) each of the Obligors and the New Lender shall assume
obligations towards one another and/or acquire rights
against one another which differ from the Discharged Rights
and Obligations only insofar as that Obligor and the New
Lender have assumed and/or acquired the same in place of
that Obligor and the Existing Lender;
(iii) the Facility Agent, the Arranger, the Security Agent, the
New Lender and the other Lenders shall acquire the same
rights and assume the same obligations between themselves as
they would have acquired and assumed had the New Lender been
an Original Lender with the rights and/or obligations
acquired or assumed by it as a result of the transfer and to
that extent the Facility Agent, the Arranger, the Security
Agent and the Existing Lender shall each be released from
further obligations to each other under the Finance
Documents; and
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(iv) the New Lender shall become a Party as a "Lender".
(d) For the avoidance of doubt, the Parties agree that in case of a
transfer effected in accordance with this Clause 23 (whether by way
of novation or otherwise), with respect to Security Documents
governed by Belgian law, all rights (including in relation to
Security) of the Finance Parties shall be maintained and preserved,
including for the purposes of Article 1278 of the Belgian Civil
Code.
23.6 COPY OF TRANSFER CERTIFICATE TO COMPANY
The Facility Agent shall, as soon as reasonably practicable after it
has executed a Transfer Certificate, send to the Company a copy of
that Transfer Certificate.
23.7 DISCLOSURE OF INFORMATION
Any Lender may disclose to any of its Affiliates and:
(a) any other person to (or through) whom that Lender assigns or
transfers (or may potentially assign or transfer) all or any
of its rights and obligations under this Agreement;
(b) any other person with (or through) whom that Lender enters
into (or may potentially enter into) any sub-participation
in relation to, or any other transaction under which
payments are to be made by reference to, this Agreement or
any Obligor;
(c) any other person to whom, and to the extent that,
information is required to be disclosed by any applicable
law or regulation; or
(d) any rating agency or, with the prior written consent of the
Company, any other person,
any information about any Obligor, the Group, any other person and
the Finance Documents as that Lender shall consider appropriate if,
in relation to paragraphs (a) and (b) above, the person to whom the
information is to be given has entered into a Confidentiality
Undertaking. This Clause 23.7 supersedes any previous agreement
relating to the confidentiality of this information.
23.8 HEDGING BANKS
(a) A Lender (or an Affiliate of a Lender) which becomes a Hedging Bank
shall accede to this Agreement and to the Intercreditor Agreement by
delivery to the Security Agent of a duly completed and signed
accession deed in the form required under the Intercreditor
Agreement and by the Security Agent executing that accession deed.
(b) Where this Agreement or any other Finance Document imposes an
obligation on a Hedging Bank and the relevant Hedging Bank is an
Affiliate of a Lender and is not a party to that document, the
relevant Lender shall ensure that the obligation is performed by its
Affiliate.
23.9 ASSIGNMENT BY WAY OF SECURITY
In addition to the other rights provided in this Clause 23, each
Lender may, without the consent of any Obligor, at any time charge,
assign or otherwise create Security in or over (whether by way of
collateral or otherwise) all or any of its rights under any Finance
Document to secure the obligations of that Lender, including:
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(a) any charge, assignment or other Security to secure
obligations to a federal reserve or central bank; and
(b) in the case of any Lender which is a fund, any charge,
assignment or other Security granted to any holders (or
trustee or representatives of holders) of obligations owed,
or securities issued, by that Lender as Security for those
obligations or securities,
except that no such charge, assignment or Security shall:
(i) release a Lender from any of its obligations under the
Finance Documents or substitute the beneficiary of the
relevant charge, assignment or Security for the Lender as a
party to any of the Finance Documents; or
(ii) require any payments to be made by an Obligor or grant to
any person any more extensive rights than those required to
be made or granted to the relevant Lender under the Finance
Documents.
23.10 SUB-PARTICIPATIONS
Any Lender may, without the consent of any Obligor, at any time
sub-participate or sub-contract any of its rights or obligations
under the Finance Documents.
24. CHANGES TO THE OBLIGORS
24.1 ASSIGNMENTS AND TRANSFER BY OBLIGORS
No Obligor may assign any of its rights or transfer any of its
rights or obligations under the Finance Documents.
24.2 ADDITIONAL GUARANTORS
(a) Subject to compliance with the provisions of paragraphs (c) and (d)
of Clause 19.14 ("Know your customer" checks), the Company may
request that any of its wholly owned Subsidiaries becomes an
Additional Guarantor. That Subsidiary, and/or any Subsidiary which
is required by this Agreement to become an Additional Guarantor,
shall become an Additional Guarantor if:
(i) the Company delivers to the Facility Agent a duly completed
and executed Accession Letter; and
(ii) the Facility Agent has received all of the documents and
other evidence listed in Part II of Schedule 2 (Conditions
precedent) in relation to that Additional Guarantor, each in
form and substance satisfactory to the Facility Agent.
(b) The Facility Agent shall notify the Company and the Lenders promptly
upon being satisfied that it has received (in form and substance
satisfactory to it) all the documents and other evidence listed in
Part II of Schedule 2 (Conditions precedent).
24.3 REPETITION OF REPRESENTATIONS
Delivery of an Accession Letter constitutes confirmation by the
relevant Subsidiary that the representations and warranties referred
to in paragraph (c) of Clause 18.27 (Times when
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representations made) are true and correct in relation to it as at
the date of delivery as if made by reference to the facts and
circumstances then existing.
24.4 RELEASE OF GUARANTORS
(a) If a Guarantor ceases to be a member of the Group in accordance with
this Agreement, that Guarantor shall cease to be a Guarantor and
shall be released from its rights and obligations under the Finance
Documents and the Hedging Documents.
(b) The Security Agent shall, at the request and cost of the Company,
execute such documents as may be required to release that Guarantor
pursuant to paragraph (a) above.
24.5 RESIGNATION OF GUARANTOR AND RELEASE OF SECURITY ON DISPOSAL
If a Guarantor is or is proposed to be the subject of a Permitted
Disposal then:
(a) where that Guarantor created Security over any of its assets
or business in favour of the Security Agent, or Security in
favour of the Security Agent was created over the shares (or
equivalent) of that Guarantor, the Security Agent shall
promptly, at the cost and request of the Company release
those assets, business or shares (or equivalent) and issue
certificates of non-crystallisation;
(b) the resignation of that Guarantor and related release of
Security referred to in paragraph (a) above shall not become
effective until the date of that disposal; and
(c) if the disposal of that Guarantor is not made, the
resignation letter of that Guarantor and the related release
of Security referred to in paragraph (a) above shall have no
effect and the obligations of the Guarantor and the Security
created or intended to be created by or over that Guarantor
shall continue in full force and effect.
24.6 RELEASE OF SECURITY ON DISPOSAL
If an Obligor makes a Permitted Disposal then:
(a) where Security has been taken over the assets or business
(the subject of the Permitted Disposal) in favour of the
Security Agent, the Security Agent shall promptly, at the
cost and request of the Company release those assets or
business and issue certificates of non-crystallisation; and
(b) the release of Security referred to in paragraph (a) above
shall not become effective until the date of that disposal.
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SECTION 10
THE FINANCE PARTIES
25. ROLE OF THE FACILITY AGENT AND THE ARRANGER
25.1 APPOINTMENT OF THE FACILITY AGENT
(a) Each other Finance Party appoints the Facility Agent to act as its
agent under and in connection with the Finance Documents.
(b) Each other Finance Party authorises the Facility Agent to exercise
the rights, powers, authorities and discretions specifically given
to the Facility Agent under or in connection with the Finance
Documents together with any other incidental rights, powers,
authorities and discretions.
(c) Each other Finance Party authorises each of the Facility Agent and
the Arranger to agree, accept and sign on its behalf the terms of
any reliance or engagement letter in relation to any Report or any
other report or letter provided by any person in connection with the
Finance Documents or the transactions contemplated in them.
25.2 DUTIES OF THE FACILITY AGENT
(a) The Facility Agent shall promptly forward to a Party the original or
a copy of any document which is delivered to the Facility Agent for
that Party by any other Party.
(b) Except where a Finance Document specifically provides otherwise, the
Facility Agent is not obliged to review or check the adequacy,
accuracy or completeness of any document it forwards to another
Party.
(c) If the Facility Agent receives notice from a Party referring to this
Agreement, describing a Default and stating that the circumstance
described is a Default, it shall promptly notify the Finance
Parties.
(d) If the Facility Agent is aware of the non-payment of any principal,
interest, commitment fee or other fee payable to a Finance Party
(other than the Facility Agent or the Arranger) under this
Agreement, it shall promptly notify the other Finance Parties.
(e) The Facility Agent's duties under the Finance Documents are solely
mechanical and administrative in nature.
25.3 ROLE OF THE ARRANGER
Except as specifically provided in the Finance Documents, the
Arranger has no obligations of any kind to any other Party under or
in connection with any Finance Document.
25.4 NO FIDUCIARY DUTIES
(a) Nothing in this Agreement constitutes the Facility Agent, or the
Arranger as a trustee or fiduciary of any other person.
(b) Neither the Facility Agent, nor the Arranger shall be bound to
account to any Lender for any sum or the profit element of any sum
received by it for its own account.
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25.5 BUSINESS WITH THE GROUP
The Facility Agent and the Arranger may accept deposits from, lend
money to and generally engage in any kind of banking or other
business with any member of the Group or any other person.
25.6 RIGHTS AND DISCRETIONS OF THE FACILITY AGENT
(a) The Facility Agent may rely on:
(i) any representation, notice or document believed by it to be
genuine, correct and appropriately authorised; and
(ii) any statement made by a director, authorised signatory or
employee of any person regarding any matters which may
reasonably be assumed to be within his knowledge or within
his power to verify.
(b) The Facility Agent may assume, unless it has received notice to the
contrary in its capacity as agent for the Lenders, that:
(i) no Default has occurred (unless it has actual knowledge of a
Default arising under Clause 22.1 (Non-payment));
(ii) any right, power, authority or discretion vested in any
Party or any group of Lenders has not been exercised; and
(iii) any notice or request made by the Company (other than a
Utilisation Request or Selection Notice) is made on behalf
of and with the consent and knowledge of all the Obligors.
(c) The Facility Agent may engage, pay for and rely on the advice or
services of any lawyers, accountants, surveyors or other experts.
(d) The Facility Agent may act in relation to the Finance Documents
through its personnel and agents.
(e) The Facility Agent may disclose to any other Party any information
it reasonably believes it has received as agent under this
Agreement.
(f) Notwithstanding any other provision of any Finance Document to the
contrary, neither the Facility Agent, nor the Arranger is obliged to
do or omit to do anything if it would or might in its reasonable
opinion constitute a breach of any law or regulation or a breach of
a fiduciary duty or duty of confidentiality.
25.7 MAJORITY LENDERS' INSTRUCTIONS
(a) Unless a contrary indication appears in a Finance Document, the
Facility Agent shall (i) exercise any right, power, authority or
discretion vested in it as Facility Agent in accordance with any
instructions given to it by the Majority Lenders (or, if so
instructed by the Majority Lenders, refrain from exercising any
right, power, authority or discretion vested in it as Facility
Agent) and (ii) not be liable for any act (or omission) if it acts
(or refrains from taking any action) in accordance with an
instruction of the Majority Lenders.
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(b) Unless a contrary indication appears in a Finance Document, any
instructions given by the Majority Lenders will be binding on all
the Finance Parties.
(c) The Facility Agent may refrain from acting in accordance with the
instructions of the Majority Lenders (or, if appropriate, the
Lenders) until it has received such security as it may require for
any cost, loss or liability (together with any associated VAT) which
it may incur in complying with the instructions.
(d) In the absence of instructions from the Majority Lenders (or, if
appropriate, the Lenders), the Facility Agent may act (or refrain
from taking action) as it considers to be in the best interest of
the Lenders.
(e) The Facility Agent is not authorised to act on behalf of a Lender
(without first obtaining that Lender's consent) in any legal or
arbitration proceedings relating to any Finance Document.
25.8 RESPONSIBILITY FOR DOCUMENTATION
Neither the Facility Agent, nor the Arranger:
(a) is responsible for the adequacy, accuracy and/or
completeness of any information (whether oral or written)
supplied by the Facility Agent, the Arranger, an Obligor or
any other person given in or in connection with any Finance
Document or any of the Information Package; or
(b) is responsible for the legality, validity, effectiveness,
adequacy or enforceability of any Finance Document or any
other agreement, arrangement or document entered into, made
or executed in anticipation of or in connection with any
Finance Document.
25.9 EXCLUSION OF LIABILITY
(a) Without limiting paragraph (b) below (and without prejudice to the
provisions of paragraph (e) of Clause 28.10 (Disruption to Payment
Systems etc)), the Facility Agent will not be liable including
without limitation for negligence or any other category of liability
whatsoever for any action taken by it under or in connection with
any Finance Document, unless directly caused by its gross negligence
or wilful misconduct.
(b) No Party (other than the Facility Agent) may take any proceedings
against any officer, employee or agent of the Facility Agent in
respect of any claim it might have against the Facility Agent or in
respect of any act or omission of any kind by that officer, employee
or agent in relation to any Finance Document and any officer,
employee or agent of the Facility Agent may rely on this Clause
25.9.
(c) The Facility Agent will not be liable for any delay (or any related
consequences) in crediting an account with an amount required under
the Finance Documents to be paid by the Facility Agent if the
Facility Agent has taken all necessary steps as soon as reasonably
practicable to comply with the regulations or operating procedures
of any recognised clearing or settlement system used by the Facility
Agent for that purpose.
(d) Nothing in this Agreement shall oblige the Facility Agent or the
Arranger to carry out any "know your customer" or other checks in
relation to any person on behalf of any Lender and each Lender
confirms to the Facility Agent and the Arranger that it is solely
responsible for any such checks it is
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required to carry out and that it may not rely on any statement in
relation to such checks made by the Facility Agent or the Arranger.
25.10 LENDERS' INDEMNITY TO THE FACILITY AGENT
(a) Subject to paragraph (b) below, each Lender shall (in proportion to
its Available Commitments and participations in the Loans then
outstanding to the Available Facilities and all the Loans) indemnify
the Facility Agent, within three Business Days of demand, against
any cost, loss or liability including without limitation for
negligence or any other category of liability whatsoever incurred by
the Facility Agent (otherwise than by reason of its gross negligence
or wilful misconduct) (or in the case of any cost, loss or liability
pursuant to Clause 28.10 (Disruption to Payment Systems etc)
notwithstanding the Facility Agent's negligence, gross negligence or
any other category of liability whatsoever but not including any
claim based on the fraud of the Facility Agent) in acting as
Facility Agent under the Finance Documents (unless it has been
reimbursed by an Obligor pursuant to a Finance Document).
(b) If the Available Facilities are then zero, each Lender's indemnity
under paragraph (a) above shall be in proportion to its Available
Commitments to the Available Facilities immediately prior to their
reduction to zero, unless there are then any Utilisations
outstanding, in which case it shall be in proportion to its
participations in the Utilisations then outstanding to all the
Utilisations.
25.11 RESIGNATION OF THE FACILITY AGENT
(a) The Facility Agent may resign and appoint one of its Affiliates
acting through an office in the United Kingdom or Belgium as
successor by giving notice to the other Finance Parties and the
Company.
(b) Alternatively the Facility Agent may resign and appoint a successor
Facility Agent, provided the successor Facility Agent is (i) a
Finance Party or an Affiliate of a Finance Party (after consultation
with the Company); or (ii) a successor Facility Agent (which is not
a Finance Party or an Affiliate of a Finance Party) acceptable to
the Majority Lenders (after consultation with the Company), by
giving notice to the other Finance Parties and the Company.
(c) If the Facility Agent gives notice of its resignation to the Finance
Parties and the Company without appointing a successor Facility
Agent, the Majority Lenders (after consultation with the Company)
may appoint a successor Facility Agent.
(d) If the Majority Lenders have not appointed a successor Facility
Agent in accordance with paragraph (c) above within 30 days after
notice of resignation was given, the Facility Agent (after
consultation with the Company) may appoint a successor Facility
Agent (acting through an office in the United Kingdom or Belgium).
(e) The retiring Facility Agent shall, at its own cost, make available
to the successor Facility Agent such documents and records and
provide such assistance as the successor Facility Agent may
reasonably request for the purposes of performing its functions as
Facility Agent under the Finance Documents.
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(f) The appointment of the successor Facility Agent shall take effect
upon the successor Facility Agent accepting the appointment and the
resigning Facility Agent giving notice of his resignation and of the
subsequent appointment to the Finance Parties and the Company.
(g) The Facility Agent's resignation notice shall only take effect upon
the appointment of a successor.
(h) Upon the appointment of a successor, the retiring Facility Agent
shall be discharged from any further obligation in respect of the
Finance Documents but shall remain entitled to the benefit of this
Clause 25. Its successor and each of the other Parties shall have
the same rights and obligations amongst themselves as they would
have had if such successor had been an original Party.
(i) After consultation with the Company, the Majority Lenders may, by
notice to the Facility Agent, require it to resign in accordance
with paragraph (c) above. In this event, the Facility Agent shall
resign in accordance with paragraph (c) above.
25.12 CO-SECURITY FACILITY AGENT
(a) The Facility Agent may appoint or delegate to a separate security
agent, delegate security agent or a co-security agent in any
jurisdiction outside England and Wales:
(i) if the Facility Agent considers that without the appointment
the interests of the Lenders under the Finance Documents
might be materially and adversely affected;
(ii) for the purpose of complying with any law, regulation or
other condition in any jurisdiction; or
(iii) for the purpose of obtaining or enforcing a judgment or
enforcing any Finance Document in any jurisdiction.
(b) Any appointment or delegation under this Subclause will only be
effective if the security agent, delegate security agent or
co-security agent confirms to the Facility Agent and the Company in
form and substance satisfactory to the Facility Agent that it is
bound by the terms of this Agreement as if it were the Facility
Agent.
(c) The Facility Agent may remove any security agent or co-security
agent appointed by it and may appoint a new security agent or
co-security agent in its place.
25.13 CONFIDENTIALITY
(a) In acting as agent for the Finance Parties, the Facility Agent shall
be regarded as acting through its agency division which shall be
treated as a separate entity from any other of its divisions or
departments.
(b) If information is received by another division or department of the
Facility Agent, it may be treated as confidential to that division
or department and the Facility Agent shall not be deemed to have
notice of it.
25.14 RELATIONSHIP WITH THE LENDERS
(a) The Facility Agent may treat each Lender as a Lender, entitled to
payments under this Agreement and acting through its Facility Office
unless it has received not less than five Business Days' prior
notice from that Lender to the contrary in accordance with the terms
of this Agreement.
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(b) Each Lender shall supply the Facility Agent with any information
required by the Facility Agent in order to calculate the Mandatory
Cost in accordance with Schedule 4 (Mandatory Cost formulae).
25.15 CREDIT APPRAISAL BY THE LENDERS
Without affecting the responsibility of any Obligor for information
supplied by it or on its behalf in connection with any Finance
Document, each Lender confirms to the Facility Agent and the
Arranger that it has been, and will continue to be, solely
responsible for making its own independent appraisal and
investigation of all risks arising under or in connection with any
Finance Document including but not limited to:
(a) the financial condition, status and nature of each member of
the Group;
(b) the legality, validity, effectiveness, adequacy or
enforceability of any Finance Document and any other
agreement, Security, arrangement or document entered into,
made or executed in anticipation of, under or in connection
with any Finance Document;
(c) whether that Lender has recourse, and the nature and extent
of that recourse, against any Party or any of its respective
assets under or in connection with any Finance Document, the
transactions contemplated by the Finance Documents or any
other agreement, Security, arrangement or document entered
into, made or executed in anticipation of, under or in
connection with any Finance Document; and
(d) the adequacy, accuracy and/or completeness of the
Information Package and any other information provided by
the Facility Agent, any Party or by any other person under
or in connection with any Finance Document, the transactions
contemplated by the Finance Documents or any other
agreement, Security, arrangement or document entered into,
made or executed in anticipation of, under or in connection
with any Finance Document.
25.16 REFERENCE BANKS
If a Reference Bank (or, if a Reference Bank is not a Lender, the
Lender of which it is an Affiliate) ceases to be a Lender, the
Facility Agent shall (in consultation with the Company) appoint
another Lender or an Affiliate of a Lender to replace that Reference
Bank.
25.17 MANAGEMENT TIME OF THE FACILITY AGENT
On the occurrence of an Event of Default which is continuing, any
amount payable to the Facility Agent under Clause 14.3 (Indemnity to
the Facility Agent), Clause 16 (Costs and expenses) and Clause 25.10
(Lenders' indemnity to the Facility Agent) shall include the cost of
utilising the Facility Agent's management time or other resources
and will be calculated on the basis of such reasonable daily or
hourly rates as may be agreed between the Facility Agent and the
Company (each acting reasonably) and notified to the Lenders and is
in addition to any fee paid or payable to the Facility Agent under
Clause 11 (Fees).
25.18 DEDUCTION FROM AMOUNTS PAYABLE BY THE FACILITY AGENT
If any Party owes an amount to the Facility Agent under the Finance
Documents, the Facility Agent may, after giving notice to that
Party, deduct an amount not exceeding that amount from any
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payment to that Party which the Facility Agent would otherwise be
obliged to make under the Finance Documents and apply the amount
deducted in or towards satisfaction of the amount owed. For the
purposes of the Finance Documents that Party shall be regarded as
having received any amount so deducted.
26. CONDUCT OF BUSINESS BY THE FINANCE PARTIES
No provision of this Agreement will:
(a) interfere with the right of any Finance Party to arrange its
affairs (tax or otherwise) in whatever manner it thinks fit;
(b) oblige any Finance Party to investigate or claim any credit,
relief, remission or repayment available to it or the
extent, order and manner of any claim; or
(c) oblige any Finance Party to disclose any information
relating to its affairs (tax or otherwise) or any
computations in respect of Tax.
27. SHARING AMONG THE FINANCE PARTIES
27.1 PAYMENTS TO FINANCE PARTIES
If a Finance Party (a "RECOVERING FINANCE PARTY") receives or
recovers any amount from an Obligor other than in accordance with
Clause 28 (Payment mechanics) and applies that amount to a payment
due under the Finance Documents then:
(a) the Recovering Finance Party shall, within three Business
Days, notify details of the receipt or recovery to the
Facility Agent;
(b) the Facility Agent shall determine whether the receipt or
recovery is in excess of the amount the Recovering Finance
Party would have been paid had the receipt or recovery been
received or made by the Facility Agent and distributed in
accordance with Clause 28 (Payment mechanics), without
taking account of any Tax which would be imposed on the
Facility Agent in relation to the receipt, recovery or
distribution; and
(c) the Recovering Finance Party shall, within three Business
Days of demand by the Facility Agent, pay to the Facility
Agent an amount (the "SHARING PAYMENT") equal to such
receipt or recovery less any amount which the Facility Agent
determines may be retained by the Recovering Finance Party
as its share of any payment to be made, in accordance with
Clause 28.5 (Partial payments).
27.2 REDISTRIBUTION OF PAYMENTS
The Facility Agent shall treat the Sharing Payment as if it had been
paid by the relevant Obligor and distribute it between the Finance
Parties (other than the Recovering Finance Party) in accordance with
Clause 28.5 (Partial payments).
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27.3 RECOVERING FINANCE PARTY'S RIGHTS
(a) On a distribution by the Facility Agent under Clause 27.2
(Redistribution of payments), the Recovering Finance Party will be
subrogated to the rights of the Finance Parties which have shared in
the redistribution.
(b) If and to the extent that the Recovering Finance Party is not able
to rely on its rights under paragraph (a) above, the relevant
Obligor shall be liable to the Recovering Finance Party for a debt
equal to the Sharing Payment which is immediately due and payable.
27.4 REVERSAL OF REDISTRIBUTION
If any part of the Sharing Payment received or recovered by a
Recovering Finance Party becomes repayable and is repaid by that
Recovering Finance Party, then:
(a) each Finance Party which has received a share of the
relevant Sharing Payment pursuant to Clause 27.2
(Redistribution of payments) shall, upon request of the
Facility Agent, pay to the Facility Agent for account of
that Recovering Finance Party an amount equal to the
appropriate part of its share of the Sharing Payment
(together with an amount as is necessary to reimburse that
Recovering Finance Party for its proportion of any interest
on the Sharing Payment which that Recovering Finance Party
is required to pay); and
(b) that Recovering Finance Party's rights of subrogation in
respect of any reimbursement shall be cancelled and the
relevant Obligor will be liable to the reimbursing Finance
Party for the amount so reimbursed.
27.5 EXCEPTIONS
(a) This Clause 27 shall not apply to the extent that the Recovering
Finance Party would not, after making any payment pursuant to this
Clause 27, have a valid and enforceable claim against the relevant
Obligor.
(b) A Recovering Finance Party is not obliged to share with any other
Finance Party any amount which the Recovering Finance Party has
received or recovered as a result of taking legal or arbitration
proceedings, if:
(i) it notified that other Finance Party of the legal or
arbitration proceedings; and
(ii) that other Finance Party had an opportunity to participate
in those legal or arbitration proceedings but did not do so
as soon as reasonably practicable having received notice and
did not take separate legal or arbitration proceedings.
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SECTION 11
ADMINISTRATION
28. PAYMENT MECHANICS
28.1 PAYMENTS TO THE FACILITY AGENT
(a) On each date on which an Obligor or a Lender is required to make a
payment under a Finance Document, that Obligor or Lender shall make
the same available to the Facility Agent (unless a contrary
indication appears in a Finance Document) for value on the due date
at the time and in such funds specified by the Facility Agent as
being customary at the time for settlement of transactions in the
relevant currency in the place of payment.
(b) Payment shall be made to such account in the principal financial
centre of the country of that currency (or, in relation to euro, in
the principal financial centre in a Participating Member State or
London) with such bank as the Facility Agent specifies.
28.2 DISTRIBUTIONS BY THE FACILITY AGENT
Each payment received by the Facility Agent under the Finance
Documents for another Party shall, subject to Clause 28.3
(Distributions to an Obligor) and Clause 28.4 (Clawback), be made
available by the Facility Agent as soon as practicable after receipt
to the Party entitled to receive payment in accordance with this
Agreement (in the case of a Lender, for the account of its Facility
Office), to such account as that Party may notify to the Facility
Agent by not less than five Business Days' notice with a bank in the
principal financial centre of the country of that currency (or, in
relation to euro, in the principal financial centre of a
Participating Member State or London).
28.3 DISTRIBUTIONS TO AN OBLIGOR
The Facility Agent may (with the consent of the Obligor or in
accordance with Clause 29 (Set-off)) apply any amount received by it
for that Obligor in or towards payment (on the date and in the
currency and funds of receipt) of any amount due from that Obligor
under the Finance Documents or in or towards the purchase of any
amount of any currency to be so applied.
28.4 CLAWBACK
(a) Where a sum is to be paid to the Facility Agent under the Finance
Documents for another Party, the Facility Agent is not obliged to
pay that sum to that other Party (or to enter into or perform any
related exchange contract) until it has been able to establish to
its satisfaction that it has actually received that sum.
(b) If the Facility Agent pays an amount to another Party and it proves
to be the case that it had not actually received that amount, then
the Party to whom that amount (or the proceeds of any related
exchange contract) was paid by the Facility Agent shall on demand
refund the same to the Facility Agent together with interest on that
amount from the date of payment to the date of receipt by the
Facility Agent, calculated by it to reflect its cost of funds.
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28.5 PARTIAL PAYMENTS
(a) If the Facility Agent receives a payment that is insufficient to
discharge all the amounts then due and payable by an Obligor under
the Finance Documents, the Facility Agent shall apply that payment
towards the obligations of that Obligor under the Finance Documents
in the following order:
(i) FIRST, in or towards payment pro rata of any unpaid fees,
costs and expenses of the Facility Agent, the Security
Agent, or the Arranger under the Finance Documents;
(ii) SECONDLY, in or towards payment pro rata of any accrued
interest, fee or commission due but unpaid under this
Agreement;
(iii) THIRDLY, in or towards payment pro rata of any principal due
but unpaid under this Agreement; and
(iv) FOURTHLY, in or towards payment pro rata of any other sum
due but unpaid under the Finance Documents.
(b) The Facility Agent shall, if so directed by the Majority Lenders
vary the order set out in paragraphs (a)(ii) to (iii) above.
(c) Paragraphs (a) and (b) above will override any appropriation made by
an Obligor.
28.6 NO SET-OFF BY OBLIGORS
All payments to be made by an Obligor under the Finance Documents
shall be calculated and be made without (and free and clear of any
deduction for) set-off or counterclaim.
28.7 BUSINESS DAYS
(a) Any payment which is due to be made on a day that is not a Business
Day shall be made on the next Business Day in the same calendar
Month (if there is one) or the preceding Business Day (if there is
not).
(b) During any extension of the due date for payment of any principal or
an Unpaid Sum under this Agreement interest is payable on the
principal or Unpaid Sum at the rate payable on the original due
date.
28.8 CURRENCY OF ACCOUNT
(a) Subject to paragraph (b) below, euro is the currency of account and
payment for any sum due from an Obligor under any Finance Document.
(b) Each payment in respect of costs, expenses or Taxes shall be made in
the currency in which the costs, expenses or Taxes are incurred.
28.9 CHANGE OF CURRENCY
(a) Unless otherwise prohibited by law, if more than one currency or
currency unit are at the same time recognised by the central bank of
any country as the lawful currency of that country, then:
(i) any reference in the Finance Documents to, and any obligations
arising under the Finance Documents in, the currency of that
country shall be translated into, or paid in, the currency
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or currency unit of that country designated by the Facility
Agent (after consultation with the Company); and
(ii) any translation from one currency or currency unit to
another shall be at the official rate of exchange recognised
by the central bank for the conversion of that currency or
currency unit into the other, rounded up or down by the
Facility Agent (acting reasonably).
(b) If a change in any currency of a country occurs, this Agreement
will, to the extent the Facility Agent (acting reasonably and after
consultation with the Company) specifies to be necessary, be amended
to comply with any generally accepted conventions and market
practice in the Relevant Interbank Market and otherwise to reflect
the change in currency.
28.10 DISRUPTION TO PAYMENT SYSTEMS ETC.
If either the Facility Agent determines (in its discretion) that a
Disruption Event has occurred or the Facility Agent is notified by
the Company that a Disruption Event has occurred:
(a) Facility Agent may, and shall if requested to do so by the
Company, consult with the Company with a view to agreeing
with the Company such changes to the operation or
administration of the Facilities as the Facility Agent may
deem necessary in the circumstances;
(b) the Facility Agent shall not be obliged to consult with the
Company in relation to any changes mentioned in paragraph
(a) above if, in its opinion, it is not practicable to do so
in the circumstances and, in any event, shall have no
obligation to agree to such changes;
(c) the Facility Agent may consult with the Finance Parties in
relation to any changes mentioned in paragraph (a) above but
shall not be obliged to do so if, in its opinion, it is not
practicable to do so in the circumstances;
(d) any such changes agreed upon by the Facility Agent and the
Company shall (whether or not it is finally determined that
a Disruption Event has occurred) be binding upon the Parties
as an amendment to (or, as the case may be, waiver of) the
terms of the Finance Documents notwithstanding the
provisions of Clause 34 (Amendments and Waivers);
(e) the Facility Agent shall not be liable for any damages,
costs or losses whatsoever (including, without limitation
for negligence, gross negligence or any other category of
liability whatsoever but not including any claim based on
the fraud of the Facility Agent) arising as a result of its
taking, or failing to take, any actions pursuant to or in
connection with this Clause 28.10; and
(f) the Facility Agent shall notify the Finance Parties of all
changes agreed pursuant to paragraph (d) above.
29. SET-OFF
A Finance Party may set off any matured obligation due from an
Obligor under the Finance Documents (to the extent beneficially
owned by that Finance Party) against any matured obligation
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owed by that Finance Party to that Obligor, regardless of the place
of payment, booking branch or currency of either obligation. If the
obligations are in different currencies, the Finance Party may
convert either obligation at a market rate of exchange in its usual
course of business for the purpose of the set-off.
30. NOTICES
30.1 COMMUNICATIONS IN WRITING
Any communication to be made under or in connection with the Finance
Documents shall be made in writing and, unless otherwise stated, may
be made by fax or letter.
30.2 ADDRESSES
The address and fax number (and the department or officer, if any,
for whose attention the communication is to be made) of each Party
for any communication or document to be made or delivered under or
in connection with the Finance Documents is:
(a) in the case of the Company, that identified with its name
below;
(b) in the case of each Lender or any other Original Obligor,
that notified in writing to the Facility Agent on or prior
to the date on which it becomes a Party; and
(c) in the case of the Facility Agent or the Security Agent,
that identified with its name below,
or any substitute address, fax number or department or officer as
the Party may notify to the Facility Agent (or the Facility Agent
may notify to the other Parties, if a change is made by the Facility
Agent) by not less than five Business Days' notice.
30.3 DELIVERY
(a) Any communication or document made or delivered by one person to
another under or in connection with the Finance Documents will only
be effective:
(i) if by way of fax, when received in legible form; or
(ii) if by way of letter, when it has been left at the relevant
address or five Business Days after being deposited in the
post postage prepaid in an envelope addressed to it at that
address,
and, if a particular department or officer is specified as part of
its address details provided under Clause 30.2 (Addresses), if
addressed to that department or officer.
(b) Any communication or document to be made or delivered to the
Facility Agent or the Security Agent will be effective only when
actually received by it and then only if it is expressly marked for
the attention of the department or officer identified with its
signature below (or any substitute department or officer as it shall
specify for this purpose).
(c) All notices from or to an Obligor shall be sent through the Facility
Agent.
(d) Any communication or document made or delivered to the Company in
accordance with this Clause 30.3 will be deemed to have been made or
delivered to each of the Obligors.
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30.4 NOTIFICATION OF ADDRESS AND FAX NUMBER
Promptly upon receipt of notification of an address and fax number
or change of address or fax number pursuant to Clause 30.2
(Addresses) or changing its own address or fax number, the Facility
Agent shall notify the other Parties.
30.5 ELECTRONIC COMMUNICATION
(a) Any communication to be made between the Facility Agent and a Lender
under or in connection with the Finance Documents may be made by
electronic mail or other electronic means, if the Facility Agent and
the relevant Lender:
(i) agree that, unless and until notified to the contrary, this
is to be an accepted form of communication;
(ii) notify each other in writing of their electronic mail
address and/or any other information required to enable the
sending and receipt of information by that means; and
(iii) notify each other of any change to their address or any
other such information supplied by them.
(b) Any electronic communication made between the Facility Agent and a
Lender will be effective only when actually received in readable
form and in the case of any electronic communication made by a
Lender to the Facility Agent only if it is addressed in such a
manner as the Facility Agent shall specify for this purpose.
30.6 ENGLISH LANGUAGE
(a) Any notice given under or in connection with any Finance Document
must be in English.
(b) All other documents provided under or in connection with any Finance
Document must be:
(i) in English; or
(ii) if not in English, and if so required by the Facility Agent,
accompanied by a certified English translation and, in this
case, the English translation will prevail unless the
document is a constitutional, statutory or other official
document or a Security Document.
31. CALCULATIONS AND CERTIFICATES
31.1 ACCOUNTS
In any litigation or arbitration proceedings arising out of or in
connection with a Finance Document, the entries made in the accounts
maintained by a Finance Party are prima facie evidence of the
matters to which they relate.
31.2 CERTIFICATES AND DETERMINATIONS
Any certification or determination by a Finance Party of a rate or
amount under any Finance Document is, in the absence of manifest
error, conclusive evidence of the matters to which it relates.
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31.3 DAY COUNT CONVENTION
Any interest, commission or fee accruing under a Finance Document
will accrue from day to day and is calculated on the basis of the
actual number of days elapsed and a year of 360 days or, in any case
where the practice in the Relevant Interbank Market differs, in
accordance with that market practice.
32. PARTIAL INVALIDITY
If, at any time, any provision of the Finance Documents is or
becomes illegal, invalid or unenforceable in any respect under any
law of any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions nor the legality,
validity or enforceability of such provision under the law of any
other jurisdiction will in any way be affected or impaired.
33. REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of
any Finance Party, any right or remedy under the Finance Documents
shall operate as a waiver, nor shall any single or partial exercise
of any right or remedy prevent any further or other exercise or the
exercise of any other right or remedy. The rights and remedies
provided in this Agreement are cumulative and not exclusive of any
rights or remedies provided by law.
34. AMENDMENTS AND WAIVERS
34.1 REQUIRED CONSENTS
(a) Subject to Clause 34.2 (Exceptions) any term of the Finance
Documents may be amended or waived only with the consent of the
Majority Lenders and the Company and any such amendment or waiver
will be binding on all Parties.
(b) The Facility Agent may effect, on behalf of any Finance Party, any
amendment or waiver permitted by this Clause 34.
(c) Each Obligor acknowledges that its consent is not required for any
amendment or waiver permitted by this Clause 34 which is agreed to
by the Company.
34.2 EXCEPTIONS
(a) An amendment or waiver that has the effect of changing or which
relates to:
(i) the definition of "Majority Lenders" in Clause 1.1
(Definitions);
(ii) an extension to the date of payment of any amount under the
Finance Documents;
(iii) a reduction in the Margin or a reduction in the amount of
any payment of principal, interest, fees or commission
payable;
(iv) an increase in or an extension of any Commitment;
(v) a change to the Borrowers or Guarantors other than in
accordance with Clause 24 (Changes to the Obligors);
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(vi) any provision which expressly requires the consent of all
the Lenders;
(vii) Clause 2.2 (Finance Parties' rights and obligations), Clause
7.2 (Sale), Clause 7.3 (Mandatory cancellation), Clause 7.5
(Mandatory prepayment - Net Sale Proceeds) to Clause 7.10
(Application of Proceeds), Clause 23 (Changes to the
Lenders), Clause 27 (Sharing among the Finance Parties) or
this Clause 34;
(viii) the release of any Security created pursuant to any Security
Document; or
(ix) the ranking or subordination under the Intercreditor
Agreement.
shall not be made without the prior consent of all the Lenders.
(b) An amendment or waiver which relates to the rights or obligations of
the Facility Agent, the Security Agent or the Arranger may not be
effected without its consent.
(c) An amendment or waiver which relates to Clause 17 (Guarantee and
indemnity) may not be effected without the consent of the
Guarantors.
(d) If any Lender has failed to respond to any consent, waiver or
amendment of any provision of any Finance Document within 15
Business Days of delivery of the request for such consent, waiver or
amendment by the Company or the Facility Agent in accordance with
the terms of this Agreement, the Available Commitments and
participations in the Utilisations of such Lender shall be excluded
for the purposes of determining whether the consent of the Majority
Lenders or all Lenders has been obtained in respect of such consent,
waiver or amendment.
(e) No further consent is required from any Finance Party in respect of
the Permitted Revolving Credit Facility (documented within this
Agreement following amendments hereto). Each Finance Party agrees to
execute amendments to the Finance Documents, including without
limitation, any Security Documents, as required by the Facility
Agent to provide for the Permitted Revolving Credit Facility to be
made available, and secured, under such documents so long as the RCF
Lender accedes to the terms of the Intercreditor Agreement. The
existing terms hereof shall apply the Permitted Revolving Credit
Facility and shall be amended only to the extent they relate to the
mechanics and economics of the Permitted Revolving Credit Facility.
(f) Notwithstanding paragraph (e) above, the terms of the Permitted
Revolving Credit Facility shall be approved and agreed by the
Facility Agent (acting reasonably).
35. COUNTERPARTS
Each Finance Document may be executed in any number of counterparts,
and this has the same effect as if the signatures on the
counterparts were on a single copy of the Finance Document.
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SECTION 12
GOVERNING LAW AND ENFORCEMENT
36. GOVERNING LAW
This Agreement is governed by English law.
37. ENFORCEMENT
37.1 JURISDICTION
(a) The courts of England have exclusive jurisdiction to settle any
dispute arising out of or in connection with this Agreement
(including a dispute regarding the existence, validity or
termination of this Agreement) (a "DISPUTE").
(b) The Parties agree that the courts of England are the most
appropriate and convenient courts to settle Disputes and accordingly
no Party will argue to the contrary.
(c) This Clause 37.1 is for the benefit of the Finance Parties only. As
a result, no Finance Party shall be prevented from taking
proceedings relating to a Dispute in any other courts with
jurisdiction. To the extent allowed by law, the Finance Parties may
take concurrent proceedings in any number of jurisdictions.
37.2 SERVICE OF PROCESS
Without prejudice to any other mode of service allowed under any
relevant law, each Obligor (other than an Obligor incorporated in
England and Wales):
(a) irrevocably appoints Solutia UK Limited as its agent for
service of process in relation to any proceedings before the
English courts in connection with any Finance Document; and
(b) agrees that failure by a process agent to notify the
relevant Obligor of the process will not invalidate the
proceedings concerned.
37.3 WAIVER OF CONSEQUENTIAL DAMAGES
In no event shall any Finance Party be liable on any theory of
liability for any special, indirect, consequential or punitive
damages and the Company hereby waives, releases and agrees (for
itself and on behalf of its Subsidiaries) not to sue upon any such
claim for any such damages, whether or not accrued and whether or
not known or suspected to exist in its favour.
THIS AGREEMENT HAS BEEN ENTERED INTO ON THE DATE STATED AT THE BEGINNING OF
THIS AGREEMENT.
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