CREDIT AGREEMENT

EXHIBIT 10.2  

 

 

TABLE OF CONTENTS

                 

 

 

 

 

The parties hereto agree as follows:

ARTICLE I

 

DEFINITIONS

“ ABR Borrowing ” means a Borrowing comprised of ABR Loans.

“ ABR Loan ” means any Loan bearing interest at a rate determined by reference to the Alternate Base Rate in accordance with the provisions of Article II.

“ Activities ” has the meaning assigned to such term in Section 8.02(b).

“ Adjusted LIBO Rate ” means, with respect to any Interest Period for any Eurodollar Borrowing, an interest rate per annum equal to the rate per annum obtained by dividing (a) the LIBO Rate by (b)(i) a percentage equal to 100% minus (ii) the reserve percentage applicable two Business Days before the first day of such Interest Period under regulations issued from time to time by the Board of Governors for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) for a member bank of the Federal Reserve System in New York City with respect to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to any other category of liabilities that includes deposits by reference to which the LIBO Rate is determined) having a term equal to such Interest Period.

“ Administrative Agent ” has the meaning assigned to such term in the preamble hereto.

“ Administrative Questionnaire ” means an Administrative Questionnaire in the form of Exhibit A or otherwise in the form supplied by the Administrative Agent.

“ Affiliate ” of any Person means any other Person which, directly or indirectly through one or more intermediaries, Controls, is Controlled by or is under common Control with such Person (excluding any trustee under, or any committee with responsibility for administering, any Pension Plan); provided , however , that for purposes of Section 6.08, the term “Affiliate” shall also include (i) any Person that directly or indirectly owns more than 10% of Equity Interests having ordinary voting power for the election of directors (or Persons performing similar functions) of the Person specified or (ii) any Person that is an executive officer or director of the Person specified.

“ Agent Fees ” has the meaning assigned to such term in Section 2.08(a).

“ Agents’ Groups ” has the meaning assigned to such term in Section 8.02(b).

“ Agreement ” has the meaning assigned to such term in the preamble hereto.

“ Alternate Base Rate ” means, with respect to any day, a fluctuating interest rate per annum as shall be in effect from time to time, which rate per annum shall be equal at all times to the highest of the following:

(a)           the “U.S. Prime Lending Rate” as most recently published in the Wall Street Journal;

(b)           the sum of (i) the Federal Funds Rate as in effect on such day plus (ii) 0.50%;

(c)           the sum of (i) the Adjusted LIBO Rate for such day as if the Interest Period then in effect was one day plus (ii) 1.00%; and

(d)           4.50% per annum.

“ Anti-Terrorism Laws ” has the meaning assigned to such term in Section 3.20(a).

“ Applicable Margin ” means, for any day, (a) 7.50% per annum, in the case of ABR Loans, and (b) 8.50% per annum, in the case of Eurodollar Loans.

“ Approved Electronic Communications ” means each Communication that any Loan Party is obligated to, or otherwise chooses to, provide to the Administrative Agent pursuant to any Loan Document or the transactions contemplated therein, including any financial statement, financial and other report, notice, request, certificate and other information material; provided , however , that, solely with respect to delivery of any such Communication by any Loan Party to the Administrative Agent and without limiting or otherwise affecting either the Administrative Agent’s right to effect delivery of such Communication by posting such Communication to the Approved Electronic Platform or the protections afforded hereby to the Administrative Agent in connection with any such posting, “Approved Electronic Communication” shall exclude (i) any notice of borrowing, notice of conversion or continuation, and any other notice, demand, communication, information, document and other material relating to a request for a new, or a conversion of an existing, Borrowing, (ii) any notice pursuant to Section 2.04 and any other notice relating to the payment of any principal or other amount due under any Loan Document prior to the scheduled date therefor, (iii) all notices of any Default or Event of Default and (iv) any notice, demand, communication, information, document and other material required to be delivered to satisfy any of the conditions set forth in Article IV or any other condition to any Borrowing hereunder or any condition precedent to the effectiveness of this Agreement.

“ Approved Electronic Platform ” has the meaning assigned to such term in Section 9.17(a).

“ Arranger ” has the meaning assigned to such term in the preamble hereto.

“ Asset Sale ” means any direct or indirect sale, transfer, lease (as lessor), conveyance or other disposition (including by way of merger or consolidation) by the Borrower or any of its Subsidiaries of any of its Property (other than dispositions of cash and cash equivalents in the ordinary course of its business), including any sale or issuance of any Equity Interests of any Subsidiary.

“ Asset Sale Prepayment Event ” means any Asset Sale, except (a) Asset Sales permitted by Section 6.05 (other than Section 6.05(vii) thereof) and (b) any such transaction or series of transactions which, if otherwise constituting an Asset Sale Prepayment Event, do not generate Net Proceeds in excess of $500,000 (or, when taken together with all other such transactions (and any Destructions and Takings in such Fiscal Year), do not generate Net Proceeds in excess of $500,000 in the aggregate in such Fiscal Year).

“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04(b)), and accepted by the Administrative Agent in accordance with Section 9.04(b), in the form of Exhibit C or such other form as shall be approved by the Administrative Agent.

“ Authorized Officer ” means, with respect to the Borrower, those of its managing directors and/or procurists whose signature and incumbency has been certified to the Administrative Agent and the Lenders by the Borrower in a certificate dated the Effective Date, or any successor certificate thereto.

“ Base Amount ” has the meaning assigned to such term in Section 6.14(a).

“ Board of Governors ” means the Board of Governors of the Federal Reserve System of the United States, or any successor thereto.

“ Bookrunner ” has the meaning assigned to such term in the preamble hereto.

“ Borrower ” has the meaning assigned to such term in the preamble to this Agreement.

“ Borrowing ” means a Loan or group of Loans to the Borrower of the same Type made (including through a conversion or continuation) by the applicable Lenders on a single date and as to which a single Interest Period is in effect.

“ Borrowing Date ” means any Business Day specified in a notice pursuant to Section 2.02 as a date on which the Borrower requests Loans to be made hereunder.

“ Borrowing Request ” has the meaning assigned to such term in Section 2.02(a).

“ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York or Frankfurt am Main, Germany are authorized or required by law to close.

“ Capital Expenditures ” means, for any period, any and all expenditures made by the Borrower or any of its Subsidiaries in such period for assets added to or reflected in its property, plant and equipment accounts or other similar capital asset accounts or comparable items or any other capital expenditures that are, or should be, set forth as “additions to plant, property and equipment” on the financial statements of the Borrower and its Subsidiaries prepared in accordance with GAAP, whether such asset is purchased for cash or by the incurrence of Indebtedness, accrued as a liability or otherwise.  Notwithstanding the foregoing, Capital Expenditures shall not include capital expenditures funded with Net Proceeds which represent the repair, replacement, substitution, restoration of or reinvestment in property in accordance with Section 2.04(b).

“ Capital Lease Obligations ” means all monetary obligations of the Borrower and its Subsidiaries under any leasing or similar arrangement conveying the right to use real or personal property, or a combination thereof, which, in accordance with GAAP, is required to be classified and accounted for as capital leases, and the amount of such monetary obligations shall be the capitalized amount thereof determined in accordance with GAAP and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease or other arrangement prior to the first date on which such lease may be terminated by the lessee without payment of a penalty.

“ Cash Equivalents ” means Permitted Investments.

“ Cash Interest Expense ” means, for any period, Consolidated Interest Expense for such period, excluding any such Consolidated Interest Expense not payable in cash (such as, for example, amortization of discount and amortization of debt issuance costs).

“ Change of Control ” means any one or more of the following events shall occur and be continuing:

 

      (i) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause such person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of Voting Stock representing 35% or more (or 40% or more in the case of any such “person” or “group” that is, on the Effective Date, the beneficial owner (as defined above) of 25% or more of such Voting Stock) of the voting power of the total outstanding Voting Stock of the Parent;

 

     (ii) since the Effective Date, individuals who on such date constituted the board of directors of the Parent (together with any new directors whose election to the Board of Directors or whose nomination for election by the shareholders of the Parent was approved by a vote of the majority of the directors of the Parent then still in office who were either directors on such date or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the board of directors of the Parent then in office;

 

      (iii)   at any time a “Change of Control” (or any other defined term having a similar purpose) occurs under any Material Indebtedness or any Holdings Material Indebtedness;

 

     (iv) Parent at any time ceases to own, directly or indirectly, 100% of the Equity Interests of the Holdings Guarantor or ceases to have the power to vote, or direct the voting of, any such Equity Interests of Parent;

 

     (v) Parent, at any time prior to the occurrence of the Permitted Transfer, ceases to own, directly or indirectly, 100% of the Equity Interests of Flexsys AG or ceases to have the power to vote, or direct the voting of, any such Equity Interests;

 

     (vi) the Holdings Guarantor at any time ceases to own directly 76.09% of the Equity Interests of the Borrower or ceases to have the power to vote, or direct the voting of, any such Equity Interests;

 

     (vii)   Flexsys AG at any time ceases to own directly, prior to the occurrence of the Permitted Transfer, 23.91% of the Equity Interests of the Borrower or ceases to have the power to vote, or direct the voting of, any such Equity Interests; or

 

     (viii)   after the Permitted Transfer, Flexsys Holdings B.V. ceases to own directly 23.91% of the Equity Interests of the Borrower or ceases to have the power to vote, or direct the voting of, any such Equity Interests.

 

For purposes of this definition, a Person shall not be deemed to have beneficial ownership of Voting Stock subject to a stock purchase agreement, merger agreement or similar agreement until the consummation of the transactions contemplated by such agreement.

“ Charges ” has the meaning assigned to such term in Section 9.09.

“ Closing Certificate ” means a certificate substantially in the form of Exhibit G .

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Commitment ” means, with respect to each Lender, the commitment, if any, of such Lender to make a Loan hereunder on the Effective Date.  The amount of each Lender’s Commitment is set forth on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable.  The aggregate amount of the Lenders’ Commitments is $74.0 million.

“ Communications ” means each notice, demand, communication, information, document and other material provided for hereunder or under any other Loan Document or otherwise transmitted between the parties hereto relating to this Agreement, the other Loan Documents, any Loan Party or its Affiliates, or the transactions contemplated by this Agreement or the other Loan Documents, including all Approved Electronic Communications.

“ Compliance Certificate ” has the meaning assigned to such term in Section 5.01(a) and shall be substantially in the form of Exhibit D .

“ Consolidated EBITDA ” means, for any period, the sum of Consolidated Net Income for such period, plus , without duplication, the following to the extent deducted in calculating such Consolidated Net Income:  (a) Consolidated Interest Expense for such period, (b) income tax expense determined on a consolidated basis in accordance with GAAP (it being understood and agreed that notwithstanding anything to the contrary herein or as may be required under GAAP, Permitted Tax Distributions actually made in cash during such period shall be deemed to constitute income tax expense paid in cash during such period), (c) depreciation expense determined on a consolidated basis in accordance with GAAP, (d) amortization expense determined on a consolidated basis in accordance with GAAP, (e) any unusual or non-recurring non-cash charges (including any impairment charge or asset write-off pursuant to GAAP) (provided that if any such non-cash charge represents an accrual or reserve for potential cash items in any future period, the cash payment in respect thereof in such future period shall be subtracted from Consolidated EBITDA to such extent, and excluding amortization of a prepaid cash item that was paid in a prior period), (f) non-cash stock compensation expenses, including any such non-cash expenses arising from stock options, stock grants or other equity-incentive programs, the granting of stock appreciation rights and similar arrangements, (g) to the extent the related loss is not added back in calculating such Consolidated Net Income, proceeds of business interruption insurance policies to the extent of such related loss and (h) costs and expenses arising from the Transactions not otherwise capitalized not to exceed $1.0 million, which were incurred on or prior to the date that is six months after the Effective Date; and minus , without duplication, (i) all non-cash items increasing such Consolidated Net Income (excluding (x) any non-cash item to the extent that it represents an accrual of cash receipts to be received in a subsequent period and (y) the amount attributable to minority interests) and (ii) any unusual or non-recurring gains.

Consolidated EBITDA shall be calculated on a Pro Forma Basis to give effect any Asset Sales consummated at any time on or after the first day of the Test Period thereof as if each such Asset Sale had been effected on the first day of such Test Period.

Notwithstanding the foregoing (i) Consolidated EBITDA for the Fiscal Quarter of the Borrower and its Subsidiaries ended September 30, 2008 shall be deemed to be $9,596,468, (ii) Consolidated EBITDA for the Fiscal Quarter of the Borrower and its Subsidiaries ended December 31, 2008 shall be deemed to be $10,179,931 and (iii) Consolidated EBITDA for the Fiscal Quarter of the Borrower and its Subsidiaries ended March 31, 2009 shall be deemed to be $5,161,000.

“ Consolidated Fixed Charges ” means, for any period, the sum, without duplication, of:

Notwithstanding the foregoing, solely for purposes of calculating the Fixed Charge Coverage Ratio, (i) Cash Interest Expense shall be deemed to be $2,220,000 for each of the Fiscal Quarters of the Borrower and its Subsidiaries ended September 30, 2008, December 31, 2008 and March 31, 2009 and (ii) cash payments in respect of income taxes shall be deemed to be $2,606,344 for the Fiscal Quarter of the Borrower and its Subsidiaries ended September 30, 2008, $2,911,096 for the Fiscal Quarter of the Borrower and its Subsidiaries ended December 31, 2008 and $1,409,360 for the Fiscal Quarter of the Borrower and its Subsidiaries ended March 31, 2009.

“ Consolidated Indebtedness ” means, at a particular date, the aggregate stated balance sheet amount of all Indebtedness of the Borrower and its Subsidiaries determined on a consolidated basis in accordance with GAAP at such date (excluding PLPA Indebtedness), plus, without duplication, the principal amount of Indebtedness of the Borrower and its Subsidiaries constituting original issue discount.

“ Consolidated Interest Expense ” means, for any period, the sum, without duplication, of:

(c)           all interest capitalized during such period.

Consolidated Interest Expense and Cash Interest Expense shall be calculated on a Pro Forma Basis to give effect to any Indebtedness incurred, assumed or permanently repaid or extinguished during the relevant Test Period in connection with the Transactions and Asset Sales as if such incurrence, assumption, repayment or extinguishing had been effected on the first day of such Test Period.

“ Consolidated Net Income ” means, for any period, the net income (or loss) of the Borrower and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP consistently applied; provided that (i) notwithstanding anything to the contrary herein or as may be required under GAAP, the aggregate amount of Permitted Tax Distributions actually made in cash during such period shall be deemed to constitute income tax expense paid in cash during such period and (ii) there shall not be included in such Consolidated Net Income:

“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person whether by ownership of voting securities, by contract or otherwise, and the terms “ Controlling ” and “ Controlled ” shall have meanings correlative thereto.

“ CPA ” means the ACMS-Agreement ( Vereinbarung über ein Automatisches Cash-Management System ( ACMS )) made between, inter alia, the Holdings Guarantor, the Borrower and Commerzbank AG, which was signed by Commerzbank AG on June 6, 1998, as amended.

“ Debt Incurrence ” has the meaning assigned to such term in Section 2.04(b)(i).

“ Default ” means any Event of Default and any event or condition which upon notice, lapse of time or both would constitute an Event of Default.

“ Defaulting Lender ” has the meaning assigned to such term in Section 2.11(b).

“ Destruction ” means any and all damage to, or loss or destruction of, or loss of title to, all or any portion of the Property of the Borrower or any of its Subsidiaries.

“ Dollar Equivalent ” means, as to any amount denominated in any currency other than Dollars as of any date of determination, the amount of Dollars that would be required to purchase the amount of such currency based upon the Spot Selling Rate as of such date, and as to any amount denominated in Dollars, such amount in Dollars.

“ Dollars ” or “ $ ” means lawful money of the United States of America.

“ Effective Date ” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.08).

“ Environment ” means ambient and indoor air, surface water and groundwater (including potable water, navigable water and wetlands), the land surface or subsurface strata, natural resources such as flora and fauna, or as otherwise defined in any Environmental Law.

“ Environmental Claim ” means any accusation, allegation, notice of violation, claim, demand, order, directive, proceeding, cost recovery action or other cause of action by, or on behalf of, any Governmental Authority or any other Person for damages, injunctive or equitable relief, personal injury (including sickness, disease or death), Remedial Action costs, tangible or intangible property damage, natural resource damages, nuisance, pollution, any adverse effect on the Environment caused by any Hazardous Material, or for fines, penalties or restrictions, resulting from or based upon:  (a) the existence, or the continuation of the existence, of a Release or threatened Release (including sudden or non-sudden, accidental or non-accidental Releases); (b) exposure to any Hazardous Material; (c) the presence, generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Material; or (d) the violation or alleged violation of, or any other potential liability arising under, any Environmental Law or Environmental Permit.

“ Environmental Laws ” means any and all applicable treaties, laws (including common law), statutes, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions or binding agreements or other Requirements of Law issued, promulgated or entered into by any Governmental Authority, relating in any way to the protection of public health from environmental hazards, protection of the Environment, preservation or reclamation of natural resources, natural resource damages, occupational safety or health, the management, Release or threatened Release of, or exposure to, any Hazardous Material, and any and all Environmental Permits.

“ Environmental Liability ” means any liability, contingent or otherwise (including, but not limited to, any liability for damages, natural resource damage, costs of environmental investigation, remediation and other response costs, administrative oversight costs, fines, penalties or indemnities), of the Borrower or any of its Subsidiaries directly or indirectly resulting from or based upon (a) the existence, or the continuation of the existence, of a Release or threatened Release (including sudden or non-sudden, accidental or non-accidental Releases); (b) exposure to any Hazardous Material; (c) the presence, generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Material; or (d) the violation or alleged violation of any Environmental Law or Environmental Permit.

“ Environmental Permit ” means any permit, approval, authorization, certificate, license, registration, notification, exemption, variance, filing or permission required by or from any Governmental Authority pursuant to any Environmental Law.

“ Equity Interests ” means shares of capital stock, partnership interests, membership interests or shareholdings in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person.

“ Equity Rights ” means all securities convertible or exchangeable for Equity Interests and all warrants, options or other rights to purchase or subscribe for any Equity Interests, whether or not presently convertible, exchangeable or exercisable.

“ Eurocurrency Liabilities ” has the meaning assigned to that term in Regulation D.

“ Eurodollar Borrowing ” means a Borrowing comprised of Eurodollar Loans.

“ Eurodollar Loan ” means any Loan bearing interest at a rate determined by reference to the Adjusted LIBO Rate in accordance with the provisions of Article II.

“ Exchange Act ” means the Securities Exchange Act of 1934.

“ Executive Order ” has the meaning assigned to such term in Section 3.20(a).

“ Federal Funds Rate ” means, for any day, a fluctuating interest rate per annum equal for such day to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.

“ Fee Letter ” means the confidential Fee Letter, dated May 5, 2009, between the Borrower and Jefferies Finance LLC.

“ Financial Covenants ” means those covenants and agreements of the Loan Parties set forth in Sections 6.12 through 6.15, inclusive.

“ Financial Officer ” of any corporation, partnership or other entity means, the financial manager, the managing director, the chief financial officer, the chief executive officer, the principal accounting officer, treasurer, assistant treasurer or controller of such corporation, partnership or other entity.

“ Fiscal Quarter ” means any quarter of a Fiscal Year.

“ Fiscal Year ” means any period of twelve consecutive calendar months ending December 31; references to a Fiscal Year with a number corresponding to any calendar year ( e.g ., the “2009 Fiscal Year”) refer to the Fiscal Year ending December 31 occurring during such calendar year.

“ Flexsys AG ” means a stock corporation incorporated under the laws of Switzerland and registered with the Trade Registry under the registration no. CH-170.3.017.176-6-Zug, having its registered address at Bahnhofstrasse 23, CH-6301 Zug, Switzerland‪.

“ Fixed Charge Coverage Ratio ” means, for any Test Period, the ratio of (a) (i) Consolidated EBITDA for such Test Period minus (ii) the aggregate amount of Capital Expenditures for such Test Period to (b) Consolidated Fixed Charges for such Test Period.

“ GAAP ” means generally accepted accounting principles in the United States applied on a consistent basis.

“ Governmental Authority ” means the government of the United States or any other nation, or of any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof (including pursuant to a “synthetic lease”), (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation, and the term “Guaranteed” shall have a meaning correlative thereto; provided that the term “Guarantee” shall not include endorsements for collection or deposit in the ordinary course of business of the Borrower and its Subsidiaries.  The amount of the obligation under any Guarantee shall be deemed to be the lower of (a) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee is made (including principal, interest and fees) and (b) the maximum amount for which such guarantor may be liable pursuant to the terms of the instrument embodying such Guarantee, unless such primary obligation and the maximum amount for which such guarantor may be liable are not stated or determinable, in which case the amount of the obligation under such Guarantee shall be such guarantor’s maximum reasonably anticipated liability in respect thereof as determined by the guarantor in good faith; irrespective, in any such case, of any amount thereof that would, in accordance with GAAP, be required to be reflected on a balance sheet of such Person.

“ Guarantee Agreements ” means, collectively, the Holdings Guarantee Agreement and the Subsidiary Guarantee Agreement.

“ Guarantors ” means, collectively, the Holdings Guarantor and the Subsidiary Guarantors, if any.

“ Hazardous Materials ” means all pollutants, contaminants, wastes, substances, chemicals, materials and constituents, including crude oil, petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls (“ PCBs ”) or PCB-containing equipment, radon or any other radioactive materials including any source, special nuclear or by-product material, mold, fungi, or other biological materials of any nature, which could reasonably be expected to have an adverse effect on human health or the environment, or which can give rise to liability under, or are subject to regulation pursuant to, any Environmental Law.

“ Hedging Agreement ” means any interest rate protection agreement, foreign currency exchange agreement, commodity price protection agreement or other interest or currency exchange rate or commodity price hedging arrangement and any swap, forward, future or derivative transaction or option and all other similar agreements or arrangements designed to alter the risks of any Person arising from fluctuations in interest rate, currency values or commodity prices.

“ Hedging Obligations ” means obligations under or with respect to Hedging Agreements.

“ Holdings Guarantee Agreement ” means the Holdings Guarantee Agreement, substantially in the form of Exhibit H , made on the Effective Date by the Holdings Guarantor.

“ Holdings Guarantor ” has the meaning assigned to such term in the preamble hereto.

“ Holdings Intercompany Loan ” means the Intercompany Loan to be made by the Borrower to the Holdings Guarantor on the Effective Date in an aggregate principal amount not exceeding the Net Proceeds of the Loans (but in any event in an aggregate principal amount equal to at least $62.0 million).

“ Holdings Material Indebtedness ” means Indebtedness (other than (i) any intercompany Indebtedness among the Holdings Guarantor and Parent and their Subsidiaries and (ii) the Guarantee under the Holdings Guarantee Agreement) and Hedging Obligations of the Holdings Guarantor, individually or in an aggregate principal amount exceeding $5.0 million.  For purposes of determining Holdings Material Indebtedness, the “principal amount” of any Hedging Obligations of the Holdings Guarantor at any time shall be the Termination Value thereof at such time.

“ Increased Cost Lender ” has the meaning assigned to such term in Section 2.18.

“ Indebtedness ” of any Person means, without duplication, (i) obligations of such Person for borrowed money or evidenced by bonds, debentures, notes and similar instruments; (ii) all Capital Lease Obligations of such Person; (iii) all Indebtedness of others secured by any Lien on any Property of such Person, whether or not the obligations secured thereby have been assumed; provided that if such Indebtedness shall not have been assumed by such Person and is otherwise non-recourse to such Person, the amount of such obligation treated as Indebtedness shall not exceed the fair market value of such Property; (iv) all indebtedness of such Person representing the deferred purchase price of Property or services (excluding (A) trade payables and accrued expenses incurred in the ordinary course of business of the Borrower and its Subsidiaries and (B) any earn-out obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and if not paid after becoming due and payable); (v) all obligations of such Person for the reimbursement of any obligor in respect of letters of credit (whether drawn or undrawn), letters of guaranty (whether drawn or undrawn), bankers’ acceptances and similar credit transactions; (vi) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person; (vii) all net Hedging Obligations; and (viii) all Guarantees by such Person in respect of liabilities, obligations or indebtedness of the kind described in clauses (i) through (vii).  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except (other than in the case of general partner liability) to the extent that terms of such Indebtedness expressly provide that such Person is not liable therefor.  The amount of any net Hedging Obligations on any date shall be deemed to be the Termination Value.

“ Indemnified Taxes ” has the meaning assigned to such term in Section 2.14(a).

“ Information ” has the meaning assigned to such term in Section 9.16.

“ Information Memorandum ” means the confidential information memorandum dated April 2009 in the form approved by the Borrower concerning the Holdings Guarantor and the Borrower which, at the Borrower’s request and on its behalf, was prepared in relation to this transaction and distributed by the Arranger and the Bookrunner to selected financial institutions before the date of this Agreement.

“ Interest Payment Date ” means, with respect to any Loan, (a) the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and (b) the date of any refinancing of such Borrowing with a Borrowing of a different Type.

“ Interest Period ” means (a) as to any Eurodollar Borrowing, the period commencing on the date of such Borrowing (including any date on which such Borrowing shall have been converted from a Borrowing of a different Type) or on the last day of the immediately preceding Interest Period applicable to such Borrowing, as the case may be, and ending on the numerically corresponding day (or, if there is no numerically corresponding day, on the last day) in the calendar month that is 1, 2 or 3 months thereafter, as the Borrower may elect; or (b) as to any ABR Borrowing, the period commencing on the date of such Borrowing (including any date on which such Borrowing shall have been converted from a Borrowing of a different Type) or on the last day of the immediately preceding Interest Period applicable to such Borrowing, as the case may be, and ending on the earliest of (i) the next succeeding March 31, June 30, September 30 or December 31, (ii) the Maturity Date and (iii) the date such Borrowing is prepaid in accordance with Section 2.04 or converted in accordance with Section 2.03; provided , however , that if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day.  Interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period.

“ Investment ” has the meaning assigned to such term in Section 6.04.

“ Judgment Currency ” shall have the meaning assigned to such term in Section 9.21.

“ Judgment Currency Conversion Date ” shall have the meaning assigned to such term in Section 9.21.

“ Leased Real Property ” means each parcel of Real Property leased, subleased or otherwise occupied or utilized by any Loan Party, as lessee, where the aggregate annual rent, as of the Effective Date, with respect to such Property is in excess of $100,000.

“ Lender Affiliate ” means (a) with respect to any Lender, (i) an Affiliate of such Lender or (ii) any entity (whether a corporation, partnership, trust or otherwise) that is engaged in making, purchasing, holding or otherwise investing in bank loans and similar extensions of credit in the ordinary course and is administered or managed by a Lender or an Affiliate of such Lender and (b) with respect to any Lender that is a fund which invests in bank loans and similar extensions of credit, any other fund that invests in bank loans and similar extensions of credit and is managed by the same investment advisor as such Lender or by an Affiliate of such investment advisor.

“ Lender Appointment Period ” has the meaning assigned to such term in Section 8.06.

“ Lender Parties ” has the meaning assigned to such term in Section 9.20.

“ Lenders ” means the banks, financial institutions and other institutional lenders listed on the signature pages hereof as the initial Lenders and each Person that shall become a Lender hereunder pursuant to Section 9.04 for so long as such initial Lender or Person, as the case may be, shall be a party to this Agreement as a Lender.

“ LIBO Rate ” means, as with respect to any Interest Period for any Eurodollar Borrowing, the greater of (x) the rate determined by the Administrative Agent to be the offered rate for deposits in Dollars for the applicable Interest Period appearing on the Reuters LIBOR01 Screen as of 11:00 a.m., London time, on the second full Business Day next preceding the first day of each Interest Period.  In the event that such rate does not appear on the Reuters LIBOR01 Screen (or otherwise on the Reuters screen), the LIBO Rate for the purposes of this definition shall be determined by reference to such other comparable publicly available service for displaying eurodollar rates as may be selected by the Administrative Agent or, in the absence of such availability, the LIBO Rate shall be the rate of interest determined by the Administrative Agent to be the rate per annum at which the Administrative Agent is offered deposits in Dollars in immediately available funds in the London interbank market at 11:00 a.m. (London time) two Business Days before the first day of such Interest Period in an amount substantially equal to its portion of the amount of such Eurodollar Borrowing for a period equal to such Interest Period and (y) 3.50% per annum.

“ Lien ” means, with respect to any Property, (a) any mortgage, deed of trust, deed to secure debt, lien, pledge, encumbrance, charge, assignment, hypothecation or security interest in or on such Property, or any arrangement to provide priority or preference or any filing of any notice of lien under any applicable notice or recording statute of any Governmental Authority, including any easement, right-of-way or other encumbrance on title to Real Property, in each of the foregoing cases whether voluntary or imposed by law, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such Property, (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities and (d) any other agreement intended to give or create any of the foregoing.

“ Loan Documents ” means this Agreement, any Guarantee Agreement, and, solely for purposes of Section 7.01(a), the Fee Letter.

 

" Loan Parties " means the Borrower and the Subsidiary Guarantors.

“ Loans ” means the Loans made pursuant to Section 2.01(a).

“ Material Adverse Effect ” means (a) a material adverse effect on the business, assets, operations, properties, prospects or financial condition of the Borrower and its Subsidiaries, taken as a whole, or (b) material impairment of the ability of the Holdings Guarantor or any of the Loan Parties to perform their obligations under any Loan Document or (c) material impairment of the rights of or benefits available to the Lenders or the Administrative Agent under any Loan Document.

“ Material Indebtedness ” means Indebtedness (other than (i) any intercompany Indebtedness among the Borrower and Parent and their respective Subsidiaries and (ii) the Loans, and in the case of the Subsidiary Guarantors, the Guarantees under the Subsidiary Guarantee Agreement) and Hedging Obligations of any one or more of the Loan Parties and their respective Subsidiaries, individually or in an aggregate principal amount exceeding $1.0 million.  For purposes of determining Material Indebtedness, the “principal amount” of any Hedging Obligations of such Loan Party or Subsidiary at any time shall be the Termination Value thereof at such time.

“ Maturity Date ” means the second anniversary of the Effective Date.

“ Maximum Rate ” has the meaning assigned to such term in Section 9.09.

“ Maximum Trade Payables ” means, with respect to any date of determination, the aggregate amount of trade payables of the Loan Parties and their respective Subsidiaries that are outstanding on such date as determined on a consolidated basis in accordance with GAAP.

“ Moody’s ” means Moody’s Investors Service, Inc., and any successor thereto.

“ Net Proceeds ” means, with respect to any Debt Incurrence, Asset Sale, Destruction or Taking, (a) the cash proceeds actually received in respect of such event, including (i) any cash received in respect of any non-cash proceeds, but only as and when received, and (ii) in the case of a Destruction or a Taking, insurance proceeds, condemnation awards and similar payments, only to the extent in excess of $500,000 in the aggregate for all such events in any Fiscal Year, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid by the Borrower and its Subsidiaries in connection with such event, (ii) the amount of all taxes paid (or reasonably and in good faith estimated to be payable) by the Borrower and its Subsidiaries in connection with such event, including any withholding taxes imposed on the repatriation of proceeds, (iii) in the case of an Asset Sale, Destruction or Taking, the principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness for borrowed money which is secured by a Lien on the properties subject to such Asset Sale, Destruction or Taking (so long as such Lien was permitted to encumber such properties under the Loan Documents at the time of such Asset Sale, Destruction or Taking) and which is repaid with such proceeds (other than any such Indebtedness assumed by the purchaser of such properties), and (iv) the amount of any reasonable reserves established by, and reflected on the financial statements of, the Borrower and its Subsidiaries in accordance with GAAP (other than any taxes deducted pursuant to clause (ii) above) (x) associated with the assets that are the subject of such event and (y) retained by the Borrower or any of its Subsidiaries to fund contingent liabilities that are directly attributable to such event and that are reasonably estimated to be payable by the Borrower or any of its Subsidiaries within six months following the date that such event occurred (other than in the case of contingent tax liabilities, which shall be reasonably estimated to be payable within the current or immediately succeeding tax year); provided that any amount by which such reserves are reduced for reasons other than payment of any such contingent liabilities shall be considered “Net Proceeds” on the date of such reduction.

“ Non-Consenting Lender ” has the meaning assigned to such term in Section 2.18.

“ Note ” means a note substantially in the form of Exhibit F .

“ Obligations ” means, collectively, the Loans and all other amounts, obligations, covenants and duties owing by the Holdings Guarantor or any Loan Party to the Administrative Agent, any Lender, any Affiliate of any of them or any Indemnitee, of every type and description (whether by reason of an extension of credit, loan, guaranty, indemnification or otherwise), present or future, arising under this Agreement or any other Loan Document, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired and whether or not evidenced by any note, guaranty or other instrument or for the payment of money, including all fees, interest (including interest accruing after the maturity of the Loans made to the Borrower and interest accruing (or that would accrue but for the commencement of any bankruptcy, insolvency, reorganization or like proceeding) after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), premiums, charges, expenses, attorneys’ fees and disbursements and other sums chargeable to the Holdings Guarantor or any Loan Party under this Agreement or any other Loan Document.

“ Organizational Document ” means (i) relative to each Person that is a corporation, its charter and its by-laws (or similar documents) and all shareholder agreements, voting trusts and similar arrangements applicable to any of its authorized Equity Interests, (ii) relative to each Person that is a limited liability company, its articles of association (or similar documents) and any other similar arrangements applicable to any membership interests or other Equity Interests in such Person, (iii) relative to each Person that is a limited partnership, its partnership agreement (or similar documents) and any other similar arrangements applicable to any partnership interests or other Equity Interests in such Person, (iv) relative to each Person that is a general partnership, its partnership agreement (or similar document) and any other similar arrangements applicable to any partnership interests or other Equity Interests in such Person and (v) relative to any Person that is any other type of legal entity, such documents as shall be the functional legal equivalent of the foregoing.

“ Other Taxes ” has the meaning assigned to such term in Section 2.14(b).

“ Overnight Rate ” means, for any day, the greater of (a) the Federal Funds Rate and (b) an overnight rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

“ Parent ” means Solutia Inc., a Delaware corporation.

“ Parent Entity ” means Parent and any Subsidiary of Parent (other than the Holdings Guarantor and its Subsidiaries).

“ Parent Material Indebtedness ” means Indebtedness and Hedging Obligations of any one or more of the Parent Entities, individually or in an aggregate principal amount exceeding $25.0 million.  For purposes of determining Parent Material Indebtedness, the “principal amount” of any Hedging Obligations of such Parent Entity at any time shall be the Termination Value thereof at such time.

“ Participant ” has the meaning assigned to such term in Section 9.04(f).

“ PATRIOT Act ” has the meaning assigned to such term in Section 9.19.

“ Pension Plan ” means any employee benefit plan, program, policy, arrangement or agreement maintained or contributed to by any Loan Party.

“ Permitted Investments ” means:

“ Permitted Lien ” has the meaning assigned to such term in Section 6.02.

“ Permitted Refinancing ” means, with respect to any Indebtedness, any refinancing, refunding, extension or renewal thereof; provided , however , that any such refinanced, refunded, extended or renewed Indebtedness shall (a) not have a final maturity date or Weighted Average Life to Maturity, respectively, that is shorter than the final maturity date or Weighted Average Life to Maturity, respectively, of the Indebtedness being refinanced, refunded, extended or renewed, (b) be at least as subordinate to the Loans and other Obligations as the Indebtedness being refinanced, refunded, extended or renewed (and unsecured if the refinanced, refunded, extended or renewed Indebtedness is unsecured), and the covenants, events of default and other provisions thereof (including any guarantees thereof) shall be, in the aggregate, no less favorable to the Lenders than those contained in the Indebtedness being refinanced, refunded, extended or renewed and (c) be in an aggregate principal amount (or accreted value, if applicable) that does not exceed the aggregate principal amount (or accreted value, if applicable) of the Indebtedness so refinanced, refunded, extended or renewed, plus an amount equal to all accrued and unpaid interest thereon, plus the stated amount of any premium and other reasonable amounts required to be paid in connection with such refinancing, refunding, extension or renewal pursuant to the terms of the Indebtedness being refinanced, refunded, extended or renewed, plus the amount of reasonable expenses of the Borrower or any of its Subsidiaries incurred in connection with such refinancing, refunding, extension or renewal.

“ Permitted Tax Distributions ” has the meaning assigned to such term in clause (iv) of Section 6.07.

“ Permitted Transfer ” means the sale, transfer or other disposition by Flexsys AG of all of the Equity Interests in the Borrower that are held by it ( i.e. , the 23.91% of the Equity Interests of the Borrower) to Flexsys Holdings B.V. (including a transaction involving the dissolution, liquidation (or otherwise) or merger of Flexsys AG into Flexsys Holdings B.V.).

“ Person ” or “ person ” means any natural person, corporation, trust, joint venture, association, company, partnership, limited liability company, Governmental Authority or other entity.

“ PLPA ” means the profit and loss pooling agreement ( Beherrschungs- und Gewinnabführungsvertrag ) between the Borrower and the Holdings Guarantor dated December 12, 2008, as amended on April 23, 2009.

“ PLPA Indebtedness ” means the Indebtedness permitted under Section 6.01(xii).

“ Preferred Equity Interests ” means, with respect to any Person, any and all preferred or preference Equity Interests (however designated) of such Person, whether or not outstanding or issued on the Effective Date.

“ Pro Forma Basis ” means (i) on a pro forma basis in accordance with Regulation S-X under the Exchange Act; and (ii) for purposes of calculating Consolidated EBITDA in connection with an Investment or an Asset Sale and with respect to compliance with any test or covenant hereunder, the following transactions in connection therewith shall be deemed to have occurred as of the first day of the applicable period of measurement in such covenant: (a) income statement items (whether positive or negative) attributable to the Property or Person subject to such transaction, (i) in the case of an Investment shall be included and (ii) in the case of an Asset Sale of all or substantially all of the assets of or all of the Equity Interests of any Subsidiary of the Borrower or any division or project line of the Borrower or any of its Subsidiaries, shall be excluded, (b) any retirement of Indebtedness, and (c) any Indebtedness incurred or assumed by the Borrower or any of its Subsidiaries in connection therewith and if such Indebtedness has a floating or formula rate, shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination; provided that the foregoing pro forma adjustments may be applied solely to the extent such adjustments are consistent with the definition of Consolidated EBITDA and give effect to events that are (x) directly attributable to such transaction, (y) expected to have a continuing impact on the Borrower and its Subsidiaries and (z) factually supportable.

“ Process Agent ” has the meaning assigned to such term in Section 9.15(c).

“ Projected Financial Statements ” has the meaning assigned to such term in Section 3.15(c).

“ Property ” or “ property ” means any right, title or interest in or to property or assets of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible and including any ownership interests of any Person.

“ Qualifying Lender ” means a Lender which is beneficially entitled to interest payable to that Lender in respect of an advance under a Loan Document and is (i) acting through a lending office qualifying as a permanent establishment or permanent representative in Germany provided that the Lender’s part of the Loans is effectively connected with such permanent establishment or permanent agent or (ii) a Treaty Lender.

“ Real Property ” means all right, title and interest of any Subsidiary in and to a parcel of real property owned or leased by any Subsidiary together with, in each case, all improvements and appurtenant fixtures, easements and other property and rights incidental to the ownership, lease or operation thereof.

“ Register ” has the meaning assigned to such term in Section 9.04(d).

“ Regulation D ” means Regulation D of the Board of Governors as from time to time in effect.

“ Regulation U ” means Regulation U of the Board of Governors as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“ Regulation X ” means Regulation X of the Board of Governors as from time to time in effect and all official rulings and interpretations thereunder or thereof.

“ Related Parties ” means, with respect to any Person, such Person’s Affiliates and such Person’s and such Person’s Affiliates respective managers, administrators, trustees, partners, directors, officers, employees, agents, fund managers and advisors.

“ Release ” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, emanating or migrating of any Hazardous Material in, into, onto or through the Environment.

“ Requirement of Law ” means, as to any Person, collectively, any and all requirements of an arbitrator or a court or other Governmental Authority, including any and all laws, judgments, orders, decrees, ordinances, rules, regulations or statutes, in each case applicable to or binding upon such Person or any of its property or assets or to which such Person or any of its property or assets is subject.

“ Requisite Lenders ” means, at any time, Lenders having more than 50% of the aggregate outstanding amount of all Loans at such time.

“ Restricted Payment ” means any direct or indirect dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests or Equity Rights in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Equity Interests or Equity Rights in the Borrower or any Subsidiary.  Without limiting the foregoing, “Restricted Payments” with respect to any Person shall also include all payments made or required to be made by such Person with respect to any stock appreciation rights, plans, equity incentive or achievement plans or any similar plans or setting aside of any funds for the foregoing purposes.

“ Restricting Information ” has the meaning assigned to such term in Section 9.18(a).

“ RP Basket Amount ” means:

“ S&P ” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

“ Small Asset Sale ” means any sale or other disposition by the Borrower or any of its Subsidiaries, of Property, that, when taken together with the fair market value of any other Property sold or otherwise disposed of by the Borrower or any of its Subsidiaries in any related sales or dispositions, has an aggregate fair market value of not more than $100,000.

“ Specified Investments ” has the meaning assigned to such term in clause (xiv) of Section 6.04.

“ Specified Restricted Payments ” has the meaning assigned to such term in clause (iii) of Section 6.07.

“ Spot Selling Rate ” means, on any date of determination, the spot selling rate determined by the Administrative Agent which shall be the spot selling rate posted by Reuters on its website for the sale of the applicable currency for Dollars at approximately 5:00 p.m., New York City time, on the prior Business Day; provided that if such rate is not available, such rate shall be the spot selling rate posted by the Federal Reserve Bank of New York on its website for the sale of the applicable currency for Dollars at approximately 5:00 p.m., New York City time, on the prior Business Day.

“ Subordinated Debt ” means Indebtedness of the Borrower or any Subsidiary, that is by its terms expressly subordinated in right of payment to the Obligations of the Borrower or such Subsidiary, as applicable, but excluding intercompany Indebtedness.

“ Subsidiary ” means, with respect to any Person (“ parent ”), (i) any corporation, limited liability company, association or other business entity of which more than 50% of the outstanding Equity Interests having ordinary voting power to elect a majority of the board of directors of such corporation, limited liability company, association or other business entity (irrespective of whether at the time any other class or classes of Equity Interests of such corporation, limited liability company, association or other business entity shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned by the parent, by the parent and one or more other Subsidiaries of the parent, or by one or more other Subsidiaries of the parent; (ii) any partnership of which more than 50% of the outstanding partnership interests having the power to act as a general partner of such partnership (irrespective of whether at the time any partnership interests other than general partnership interests of such partnership shall or might have voting power upon the occurrence of any contingency) are at the time directly or indirectly owned by the parent, by the parent and one or more other Subsidiaries of the parent, or by one or more other Subsidiaries of the parent; or (iii) any other Person that is otherwise Controlled by the parent, by the parent and one or more other Subsidiaries of the parent, or by one or more other Subsidiaries of the parent.  Unless otherwise indicated, when used in this Agreement, the term “Subsidiary” shall refer to a Subsidiary of the Borrower.

“ Subsidiary Guarantee Agreement ” means each Subsidiary Guarantee Agreement, made after the Effective Date by one or more Subsidiary Guarantors, if any, in form and substance to be reasonably agreed upon by each of the Borrower and the Administrative Agent pursuant to the penultimate paragraph of Section 6.04.

“ Subsidiary Guarantor ” means each of the Borrower’s Subsidiaries that Guarantees the Obligations pursuant to the Subsidiary Guarantee Agreement and has not been released from such guarantee.

“ Taking ” means any taking of any Property of the Borrower or any Subsidiary or any portion thereof, in or by condemnation or other eminent domain proceedings pursuant to any law, general or special, or by reason of the temporary requisition or use of any Property of the Borrower or any other Loan Party or any portion thereof, by any Governmental Authority.

“ Tax Deduction ” means a deduction or withholding for or on account of Tax from a payment under a Loan Document.

“ Tax Return ” means all returns, statements, filings, attachments and other documents or certifications required to be filed in respect of Taxes.

“ Taxes ” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“ Terminated Lender ” has the meaning assigned to such term in Section 2.18.

“ Termination Value ” means, on any date in respect of any Hedging Agreement, after taking into account the effect of any netting agreement relating to such Hedging Agreement, (a) if such Hedging Agreement has been terminated as of such date, an amount equal to the termination value determined in accordance with such Hedging Agreement and (b) if such Hedging Agreement has not been terminated as of such date, an amount equal to the mark-to-market value for such Hedging Agreement, which mark-to-market value shall be determined by the Administrative Agent by reference to one or more mid-market or other readily available quotations provided by any recognized dealer (including any Lender or an Affiliate of any Lender or the Administrative Agent) of such Hedging Agreements.

“ Test Period ” means (i) for the covenants contained in Sections 6.12 and 6.13, the four consecutive complete Fiscal Quarters then last ended as of the date closest to each date listed under the heading “Date” therein and (ii) for all other provisions in this Agreement, the four consecutive complete Fiscal Quarters then last ended as of the time indicated.  Except as otherwise set forth herein, compliance with such covenants shall be tested, as of the end of each Test Period, on the date on which the financial statements pursuant to Sections 5.01(a) or 5.01(b) have been, or should have been, delivered for the applicable fiscal period.  For the avoidance of doubt, it is expressly understood and agreed that where the permissibility of a transaction or designation hereunder depends upon compliance with (i) the covenant contained in Section 6.12 at any date of determination prior to the completion of the second full Fiscal Quarter following the Effective Date, the term “Test Period” means the period of four consecutive complete Fiscal Quarters then last ended as of such date of determination, and for purposes of compliance with the covenant set forth in Section 6.12, the applicable ratio specified in Section 6.12, for such Test Period shall be the ratio set forth opposite the first date listed under the heading “Date” in Section 6.12; and (ii) the covenant contained in Section 6.13 at any date of determination prior to the completion of the first full Fiscal Quarter following the Effective Date, the term “Test Period” means the period of four consecutive complete Fiscal Quarters then last ended as of such date of determination, and for purposes of compliance with the covenant set forth in Section 6.13, the applicable ratio specified in Section 6.13 for such Test Period shall be the ratio set forth opposite the first date listed under the heading “Date” in Section 6.13.

“ Total Leverage Ratio ” means, at any date, the ratio of (a) Consolidated Indebtedness as of such date to (b) Consolidated EBITDA for the Test Period most recently ended.

“ Trade Days Payables ” means, with respect to any date of determination, for the Loan Parties and their respective Subsidiaries the product of (A) trade payables that are outstanding on the last day of the Borrower’s most recent Fiscal Quarter  as determined on a consolidated basis in accordance with GAAP; and (B) 365 days; divided by (C) the costs of goods sold in the ordinary course of business for the four consecutive complete Fiscal Quarters then last ended as determined on a consolidated basis in accordance with GAAP.

“ Transactions ” means, collectively, the transactions to occur on or prior to the Effective Date pursuant to the Loan Documents, including (a) the execution, delivery and performance of the Loan Documents and the Borrowings hereunder on the Effective Date; (b) the extension of the Holdings Intercompany Loan, and (c) the payment of all fees and expenses to be paid on or prior to the Effective Date and owing in connection with the foregoing.

“ Treasury Services Agreements ” means, with respect to the Borrower or any of its Subsidiaries, any direct or indirect liability, contingent or otherwise, of such Person in respect of cash pooling services, cash management services (including treasury, depository, overdraft (daylight and temporary), credit or debit card, electronic funds transfer and other cash management arrangements), including obligations for the payment of fees, interest, charges, expenses, attorneys’ fees and disbursements in connection therewith to the extent provided for in the documents evidencing such cash management services.

“ Treaty Lender ” means a Lender which (a) is treated as a resident of a Treaty State for the purposes of the Treaty; (b) does not carry on a business in Germany through a permanent establishment with which that Lender’s participation in the Loan is effectively connected, and (c) is entitled under the provisions of an applicable double taxation agreement with Germany (subject to the completion of any necessary procedural formalities) to receive any and all payments under a Loan Document without a Tax Deduction or to be able to receive a full tax refund.

“ Treaty State ” means a jurisdiction having a double taxation agreement (a “ Treaty ”) with Germany which makes provision for full exemption from tax imposed by Germany on interest.

“ Type ”, when used in respect of any Loan or Borrowing, refers to the Rate by reference to which interest on such Loan or on the Loans comprising such Borrowing is determined.  For purposes hereof, “ Rate ” means the Adjusted LIBO Rate or the Alternate Base Rate, as applicable.

“ Voting Stock ” of a Person means all classes of Equity Interests of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof.

“ Weighted Average Life to Maturity ” means, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the original aggregate principal amount of such Indebtedness into (b) the sum of the total of the products obtained by multiplying (i) the amount of each scheduled installment, sinking fund, serial maturity or other required payment of principal including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) which will elapse between such date and the making of such payment.

“ Wholly Owned Subsidiary ” means, with respect to any Person, any corporation, partnership or other entity of which all of the Equity Interests (other than, in the case of a corporation, directors’ qualifying shares) are directly or indirectly owned or controlled by such Person or one or more Wholly Owned Subsidiaries of such Person or by such Person and one or more Wholly Owned Subsidiaries of such Person.

ARTICLE II

 

THE LOANS

then the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the Lenders by 12:00 noon, New York City time, on the same day.  The Administrative Agent shall give telecopy or telephonic notice to the Borrower and the Lenders as soon as practicable after the circumstances giving rise to such notice no longer exist, and until such notice has been given, any affected Eurodollar Loans shall not be (x) converted or continued pursuant to Section 2.03 or (y) made pursuant to a Borrowing Request, and shall be continued or made as ABR Loans, as the case may be.

As soon as practical after the date of any payment of Indemnified Taxes or Other Taxes by the Holdings Guarantor or any Loan Party pursuant to this Section 2.14, the Holdings Guarantor or the Borrower (as applicable) will, or will cause the relevant Loan Party to, furnish to the Administrative Agent, at its address referred to in Section 9.01, evidence of such payment reasonably satisfactory to the Administrative Agent.  If the Holdings Guarantor or the relevant Loan Party fails to remit to the Administrative Agent, for the account of the respective Lenders and the Administrative Agent, such documentary evidence, the Borrower shall indemnify the Lenders and the Administrative Agent for any incremental taxes, interest, penalties or other costs (including reasonable attorneys’ fees and expenses) that may become payable by any Lender or the Administrative Agent as a result of any such failure.

For the avoidance of doubt, any amount payable by the Holdings Guarantor or any relevant Loan Party pursuant to this Section 2.14(c) shall not be duplicative of any amounts otherwise payable by the Holdings Guarantor or such relevant Loan Party pursuant to Section 2.14(a) or 2.14(b).