CREDIT AGREEMENT

Exhibit 10.1

CREDIT AGREEMENT

among

ALLIANCE ONE INTERNATIONAL, INC.,

as the Company and a Borrower,

INTABEX NETHERLANDS B.V.,

as the Dutch Borrower

THE MATERIAL DOMESTIC SUBSIDIARIES OF THE COMPANY

FROM TIME TO TIME PARTIES HERETO,

as Domestic Guarantors,

ALLIANCE ONE INTERNATIONAL AG, as a Guarantor,

THE LENDERS FROM TIME TO TIME PARTIES HERETO,

DEUTSCHE BANK TRUST COMPANY AMERICAS,

as Administrative Agent,

ING BANK N.V. AMSTERDAM,

as Syndication Agent,

COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A. “RABOBANK

NEDERLAND”, NEW YORK BRANCH,

NATIXIS,

CREDIT SUISSE SECURITIES (USA) LLC,

FORTIS BANK, SA/NV, NEW YORK BRANCH,

as Documentation Agents

DEUTSCHE BANK SECURITIES INC.,

as Sole Lead Arranger and Sole Book Manager,

and

AGFIRST FARM CREDIT BANK,

CREDIT SUISSE SECURITIES (USA) LLC,

FORTIS BANK, SA/NV, NEW YORK BRANCH,

ING BANK N.V.,

COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A. “RABOBANK

NEDERLAND”, NEW YORK BRANCH,

as Co-Arrangers

Dated as of July 2, 2009

TABLE OF CONTENTS

 

 

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Schedules

 

 

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CREDIT AGREEMENT

CREDIT AGREEMENT , dated as of July 2, 2009, among ALLIANCE ONE INTERNATIONAL, INC. , a Virginia corporation (the “ Company ”), INTABEX NETHERLANDS B.V. , a company formed under the laws of The Netherlands and a Subsidiary of the Company (the “ Dutch Borrower ”; together with the Company, collectively the “ Borrowers ,” and individually, a “ Borrower ”), those Material Domestic Subsidiaries of the Company identified as a “ Domestic Guarantor ” on the signature pages hereto and such other Domestic Subsidiaries of the Company as may from time to time become a party hereto (collectively the “ Domestic Guarantors ”), ALLIANCE ONE INTERNATIONAL AG , a Swiss corporation (“ Alliance AG ”; together with the Company and the Domestic Guarantors, collectively the “ Guarantors ” and individually, a “ Guarantor ”), the several banks and other financial institutions from time to time party hereto (collectively the “ Lenders ,” and individually, a “ Lender ”), and DEUTSCHE BANK TRUST COMPANY AMERICAS , as administrative agent for the Lenders hereunder (in such capacity, the “ Administrative Agent ”) and as the Swingline Lender and as an Issuing Lender.

W I T N E S S E T H :

WHEREAS , the Borrowers, the Guarantors, the lenders party thereto from time to time and Wachovia Bank, National Association, as administrative agent, are parties to that certain Amended and Restated Credit Agreement dated as of March 30, 2007 (as amended, supplemented or otherwise modified from time to time prior to the date hereof, the “ Existing Credit Agreement ”); and

WHEREAS , the Borrowers have requested that the Lenders make loans and other financial accommodations to the Borrowers from time to time in an aggregate outstanding amount not to exceed the aggregate amount of Revolving Commitments as in effect from time to time (initially being in an aggregate amount of $270,000,000, with increases thereto in an aggregate amount not to exceed $55,000,000 permitted in accordance with the provisions of Section 2.23 herein) as more particularly described herein, including for the purpose of refinancing in full the Existing Credit Agreement; and

WHEREAS , the Lenders have agreed to make such loans and other financial accommodations to the Borrowers on the terms and conditions contained herein.

NOW, THEREFORE , in consideration of the premises and the mutual covenants contained herein, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1 Defined Terms. As used in this Agreement, terms defined in the preamble to this Agreement have the meanings therein indicated, and the following terms have the following meanings:

“ Account Designation Letter ” shall mean the Account Designation Letter dated as of the Effective Date from the Administrative Borrower to the Administrative Agent substantially in the form attached hereto as Schedule 1.1(a) .

“ Acquisition ” shall mean any transaction, or any series of related transactions, by which the Company and/or any of its Subsidiaries directly or indirectly (a) acquires any ongoing business or all or substantially all of the assets of any Person or division thereof, whether through purchase of assets, merger or otherwise, (b) acquires (in one transaction or as the most recent transaction in a series of transactions) control of at least a majority in ordinary voting power of the securities of a Person which have ordinary voting power for the election of directors or (c) otherwise acquires control of a 50% or more ownership interest in any such Person.

“ Additional Credit Party ” shall mean each Person that becomes a Guarantor by execution of a Joinder Agreement in accordance with Section 5.10 .

“ Administrative Agent ” shall have the meaning set forth in the first paragraph of this Agreement and any successors in such capacity.

“ Administrative Borrower ” shall mean the Company.

“ Administrative Questionnaire ” shall mean an administrative questionnaire in a form supplied by the Administrative Agent.

“ Advances on Tobacco ” shall mean loans, advances and extensions of credit made by the Company or any of its Subsidiaries to growers and other suppliers of tobacco (including Affiliates) and tobacco growers’ cooperatives, whether short-term or long-term, in the ordinary course of business to finance the growing or processing of tobacco.

“ Affiliate ” shall mean, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“ Agents ” shall mean the Administrative Agent and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. “Rabobank Nederland”, New York Branch, ING Bank N.V. Amsterdam, as Syndication Agent, and Credit Suisse Securities (USA) LLC, Fortis Bank, SA/NV, New York Branch and Natixis, as Documentation Agents.

“ Agreement ” or “ Credit Agreement ” shall mean this Credit Agreement, as amended, modified or supplemented from time to time in accordance with its terms.

“ Alliance AG ” shall have the meaning set forth in the preamble of this Agreement.

“ Alliance AG Guaranty ” shall have the meaning set forth in Section 11.9 .

“ Alliance AG Guaranty Payments ” shall have the meaning set forth in Section 11.9(b) .

“ Alternate Base Rate ” shall mean, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus  ¹ / 2 of 1%. For purposes hereof: “ Prime Rate ” shall mean, at any

 

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time, the rate of interest per annum publicly announced from time to time by the Administrative Agent, as its prime lending rate. Each change in the Prime Rate shall be effective as of the opening of business on the day such change in the Prime Rate occurs. The parties hereto acknowledge that the rate announced publicly by the Administrative Agent as its Prime Rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks; and “ Federal Funds Effective Rate ” shall mean, for any day, 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 on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published on the next succeeding Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three (3) federal funds brokers of recognized standing selected by it. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive in the absence of manifest error) that it is unable to ascertain the Federal Funds Effective Rate, for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms thereof, the Alternate Base Rate shall be determined without regard to clause (b) of the first sentence of this definition, as appropriate, until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the opening of business on the date of such change.

“ Alternate Base Rate Loans ” shall mean Loans that bear interest at an interest rate based on the Alternate Base Rate.

“ Applicable Borrower ” shall mean, (a) with respect to any Revolving Loan or Swingline Loan, the Borrower that has borrowed such Revolving Loan or Swingline Loan and (b) with respect to any Letter of Credit, the Borrower for whose account the Administrative Borrower has requested such Letter of Credit be issued.

“ Applicable Lending Office ” shall mean, with respect to each Lender, such Lender’s Domestic Lending Office in the case of an Alternate Base Rate Loan and such Lender’s LIBOR Lending Office in the case of LIBOR Rate Loans.

“ Applicable Percentage ” shall mean, at any time, the rate set forth below opposite the applicable Level then in effect, and based on the Consolidated Interest Coverage Ratio as follows:

 

 

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The initial Applicable Percentages for Revolving Loans, Letter of Credit Fees and the Commitment Fee shall be those set forth in Level III until the Interest Determination Date occurring after the delivery of the officer’s compliance certificate pursuant to Section 5.2(b) for the first fiscal quarter ending at least six (6) months after the Effective Date. The Applicable Percentage shall, in each case, be determined and adjusted quarterly on the date five (5) Business Days after the date on which the Administrative Agent has received from the Company the annual or quarterly financial information and certifications required to be delivered to the Administrative Agent and the Lenders in accordance with the provisions of Sections 5.1(a) and (b)  and Section 5.2(b) , in each case with respect to a fiscal quarter or fiscal year ending at least six (6) months after the Effective Date (each an “ Interest Determination Date ”). Such Applicable Percentage shall be effective from such Interest Determination Date until the next such Interest Determination Date. After the Effective Date, if the Company shall fail to provide the annual or quarterly financial information and certifications in accordance with the provisions of Sections 5.1(a) and (b)  and Section 5.2(b) , the Applicable Percentage from the date five (5) Business Days after the date by which the Company was so required to provide such financial information and certifications to the Administrative Agent and the Lenders, shall be based on Level I until such time as such information and certifications are provided, whereupon the Level shall be determined by the then current Consolidated Interest Coverage Ratio (it being understood that, in the case of any late delivery of the financial statements and officer’s certificate as so required, any reduction in the Applicable Percentage shall apply only from and after the date of the delivery of the complying financial statements and officer’s certificate). In the event that any financial statement or certification delivered pursuant to Section 5.1 or 5.2(b) is shown to be inaccurate (regardless of whether this Agreement or the Revolving Commitments are in effect when such inaccuracy is discovered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Percentage for any period (an “ Applicable Period ”) than the Applicable Percentage applied for such Applicable Period, and only in such case, then the Company shall immediately (i) deliver to the Administrative Agent a corrected compliance certificate for such Applicable Period, and (ii) determine the Applicable Percentage for such Applicable Period based upon the corrected compliance certificate, and (iii) then for all purposes of this Agreement, the “ Applicable Percentage ” for any day occurring within the Applicable Period shall retroactively be deemed to be the relevant percentage as based upon the accurately determined Consolidated Interest Coverage Ratio for such Applicable Period; and any shortfall in the interest or fees theretofore paid by the Applicable Borrower for the relevant Applicable Period pursuant to Sections 2.1(d) , 2.2(c) , 2.4(a) and 2.4(b) as a result of the miscalculation of the Consolidated Interest Coverage Ratio shall be deemed to be (and shall be) due and payable under the relevant provisions of Sections 2.1(d) , 2.2(c) , 2.4(a) or 2.4(b) , as applicable, at the time the interest or fees for such Applicable Period were required to be paid pursuant to said Section (and shall remain due and payable until paid in full, together with all amounts owing under Section 2.7 , in accordance with the terms of this Agreement).

 

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“ Approved Accounting Firm ” shall mean Deloitte & Touche or any other independent public accountants selected by the Company and reasonably satisfactory to the Administrative Agent.

“ Approved Fund ” shall mean any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“ Arrangers ” shall mean the Sole Lead Arranger and the Co-Arrangers.

“ Asset Disposition ” shall mean the disposition of any or all of the assets (including, without limitation, the Capital Stock of a Subsidiary or any ownership interest in a joint venture) of any Credit Party or any of its Subsidiaries, whether by sale, lease, transfer or otherwise, in a single transaction or in a series of related transactions. The term “ Asset Disposition ” shall not include (a) the sale, lease, transfer or other disposition of assets permitted by Section 6.4(a)(i), (ii), (iii), (iv), (v), (vi) or (vii) or (b) any Equity Issuance.

“ Assignment and Assumption ” shall mean an assignment and assumption entered into by a Lender and an Eligible Assignee and accepted by the Administrative Agent, in substantially the form of Schedule 9.6 or any other form approved by the Administrative Agent.

“ Back-Stop Arrangements ” shall mean, collectively, Letter of Credit Back-Stop Arrangements and Swingline Back-Stop Arrangements.

“ Bankruptcy Code ” shall mean the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time.

“ Bankruptcy Event ” shall mean the occurrence of an Event of Default under Section 7.1(e) .

“ Borrower ” shall have the meaning set forth in the preamble of this Agreement.

“ Borrowing Date ” shall mean, in respect of any Loan, the date such Loan is made.

“ Business Day ” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close; provided , however , that when used in connection with a rate determination, borrowing or payment in respect of a LIBOR Rate Loan, the term “ Business Day ” shall also exclude any day on which banks in London, England are not open for dealings in Dollar deposits in the London interbank market.

“ Calculation Period ” shall mean as of the last day of any fiscal quarter the four (4) fiscal quarter period of the Company ending on such date.

“ Capital Expenditure ” shall mean all expenditures for the acquisition or leasing of any fixed assets or improvements, or for replacements, substitutions or additions thereto, which are or should be reflected on the Company’s consolidated statement of cash flows for such period as capital expenditures in accordance with GAAP.

 

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“ Capital Lease ” shall mean any lease of property, real or personal, the obligations with respect to which are required to be capitalized on a balance sheet of the lessee in accordance with GAAP.

“ Capital Stock ” shall mean (a) in the case of a corporation, capital stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (c) in the case of a partnership, partnership interests (whether general or limited), (d) in the case of a limited liability company, shares or membership interests, as the case may be, and (e) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

“ Cash Equivalents ” shall mean (a) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof ( provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than twelve (12) months from the date of acquisition (“ Government Obligations ”), (b) Investments in deposits in (including money market funds of), or certificates of deposits or bankers’ acceptances of, (i) any bank or trust company organized under the laws of the United States or any state thereof having capital and surplus in excess of $100,000,000, (ii) any international bank organized under the laws of any country which is a member of the OECD or a political subdivision of any such country, and having a combined capital and surplus of at least $100,000,000, or (iii) leading banks in a country where the Company or the Subsidiary making such Investment does business; provided , that all such Investments mature within 270 days of the date of such Investment; and provided , further , that all Investments pursuant to clause (iii) above are (A) solely of funds generated in the ordinary course of business by operations of the relevant investor in the country where such Investment is made, and (B) denominated in the currency of the country in which such Investment is made or in Dollars, (c) commercial paper maturing within 270 days and having one of the two highest ratings of either S&P, Moody’s or Fitch Investors’ Service, Inc., (d) money market funds (other than those referred to in clause (c) above) that have assets in excess of $2,000,000,000, are managed by recognized and responsible institutions and invest solely in obligations of the types referred to in clauses (a), (b)(i) and (ii) and (c) above, (e) repurchase agreements with a bank or trust company (including a Lender) or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or directly and fully guaranteed by the United States of America, and (f) obligations of any state of the United States or any political subdivision thereof for the payment of the principal and redemption price of and interest on which there shall have been irrevocably deposited Government Obligations maturing as to principal and interest at times and in amounts sufficient to provide such payment.

“ Change of Control ” shall mean such time as:

(a) any Person or group (within the meaning of Section l3(d) or 14(d) of the Securities Exchange Act) has become, directly or indirectly, the beneficial owner, by way of merger, consolidation or otherwise, of 35% or more of the voting power of the Voting Stock of the Company on a fully-diluted basis, after giving effect to the conversion and exercise of all outstanding warrants, options and other securities of the Company convertible into or exercisable for Voting Stock of the Company (whether or not such securities are then currently convertible or exercisable); or

 

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(b) the sale, lease or transfer of all or substantially all of the consolidated assets of the Company to any Person or group; or

(c) during any period of two (2) consecutive calendar years, individuals who at the beginning of such period constituted the Board of Directors of the Company, together with any new members of such Board of Directors whose election by such Board of Directors or whose nomination for election by the stockholders of the Company was approved by a vote of a majority of the members of such Board of Directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the directors of the Company then in office; or

(d) the Company consolidates with or merges with or into another Person or any Person consolidates with, or merges with or into, the Company (in each case, whether or not in compliance with the terms of this Agreement), in any such event pursuant to a transaction in which immediately after the consummation thereof Persons owning a majority of the Voting Stock of the Company immediately prior to such consummation shall cease to own a majority of the Voting Stock of the Company; or

(e) the Company shall fail to own and control, directly or indirectly, 100% of the outstanding Capital Stock of the Dutch Borrower.

“ Co-Arrangers ” shall mean AgFirst Farm Credit Bank , Credit Suisse Securities (USA) LLC, Fortis Bank, SA/NV, New York Branch, ING Bank N.V., and Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A. “Rabobank Nederland”, New York Branch as Co-Arrangers.

“ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time.

“ Collateral ” shall mean a collective reference to the collateral that is identified in, and at any time will be covered by, the Security Documents and any other collateral that may from time to time secure the Credit Party Obligations.

“ Commitment Fee ” shall have the meaning set forth in Section 2.4(a) .

“ Commitment Period ” shall mean the period from and including the Effective Date to but not including the Maturity Date.

“ Committed Inventories ” shall mean tobacco inventories for which the Company or any of its Subsidiaries has received a Confirmed Order, which such inventories have been reflected on the books and records of the Company or any of its Subsidiaries as committed inventories in accordance with GAAP.

“ Commonly Controlled Entity ” shall mean an entity, whether or not incorporated, which is under common control of any Credit Party or any Subsidiary of a Credit Party within the meaning of Section 4001 of ERISA or is part of a group which includes the any Credit Party or any Subsidiary of a Credit Party and which is treated as a single employer under Section 414 of the Code.

 

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“ Company ” shall have the meaning set forth in the preamble hereof.

“ Company LOC Obligations ” shall mean the LOC Obligations in respect of Letters of Credit issued for the account of the Company.

“ Compliance Certificate ” shall have the meaning set forth in Section 5.2(b) .

“ Confirmed Order ” shall mean an order or other indication of interest, in accordance with industry standards, by a customer not an Affiliate of the Company or any of its Subsidiaries which has been accepted in the ordinary course of business by representatives of the Company or any of its Subsidiaries.

“ Consolidated Capital Expenditures ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, all Capital Expenditures by the Company and its Subsidiaries.

“ Consolidated EBIT ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, the sum (without duplication) of (a) Consolidated Net Income plus (b) to the extent included in the determination of such Consolidated Net Income, (i) Consolidated Income Tax Expense plus (ii) Consolidated Interest Expense minus (iii) any extraordinary items of gain minus (iv) any items of gain attributable to Financial Accounting Standards Board Statements No. 121, 123R, 133 (solely with respect to any interest rate swap, cap or collar agreement), 142 and 144) plus (v) any items of loss attributable to Financial Accounting Standards Board Statements No. 121, 123R, 133 (solely with respect to any interest rate swap, cap or collar agreement), 142 and 144) plus (vi) costs and expenses incurred in connection with exit and disposal activities associated with discontinued foreign operations, in each case determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP, provided that (I) the amounts as set forth in the immediately succeeding sentence may be added back pursuant to this clause (vi), and (II) not more than $5,000,000 in the aggregate for all fiscal quarters from and including the fiscal year ended June 30, 2009, may be added back pursuant to this clause (vi)  plus (vii) the Permitted Allowance, provided that (I) the amounts as set forth in the immediately succeeding sentence may be added back pursuant to this clause (vii), and (II) not more than $25,000,000 in the aggregate for all fiscal quarters from and including the fiscal quarter ended June 30, 2009 (but also not more than $12,500,000 of such aggregate amount in any fiscal quarter from and including the fiscal quarter ended June 30, 2009) may be added back pursuant to this clause (vii)  plus (viii) out-of-pocket costs and expenses paid in cash relating to Permitted Acquisitions and Investments, in each case, which would have been capitalized under GAAP prior to the application of Financial Accounting Standards Board Statement No. 141(R) minus (ix) write-ups of the Permitted Allowance minus (x) write downs of the Permitted Allowance.

For the purposes of determining Consolidated EBIT of the Company, (x) the amount that may be added back pursuant to clause (vi) above, (i) for the quarter ended June 30, 2008 shall be $0, (ii) for the quarter ended September 30, 2008 shall be $45,000, (iii) for the quarter ended December 31, 2008 shall be $41,000 and (iv) for the quarter ended March 31, 2009 shall be $16,000 and (y) the

 

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amount that may be added back pursuant to clause (vii) above, (i) for the quarter ended June 30, 2008 shall be $0, (ii) for the quarter ended September 30, 2008 shall be $1,251,000, (iii) for the quarter ended December 31, 2008 shall be $0 and (iv) for the quarter ended March 31, 2009 shall be $0.

“ Consolidated EBITDA ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, the sum of (a) Consolidated EBIT, plus (b) the aggregate amount of the depreciation expense and amortization expense of the Company and its Subsidiaries to the extent deducted in determining Consolidated Net Income, in each case determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

“ Consolidated Income Tax Expense ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, the income tax expense of the Company and its Subsidiaries, determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

“ Consolidated Interest Coverage Ratio ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, the ratio of (a) Consolidated EBITDA minus Consolidated Interest Income to (b) Consolidated Net Interest Expense, in each case determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

“ Consolidated Interest Expense ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, the cash interest expense of the Company and its Subsidiaries (including, without limitation, the cash interest component of payments under Capital Leases and interest expense related to sales of receivables), determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

“ Consolidated Interest Income ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, the cash interest income of the Company and its Subsidiaries, determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

“ Consolidated Leverage Ratio ” shall mean, as of the last day of any fiscal quarter of the Company, the ratio of (i) Consolidated Total Debt as of such date minus cash and Cash Equivalents of the Company and its Subsidiaries on such date to the extent such cash and Cash Equivalents exceed $25,000,000, to (ii) Consolidated EBITDA for the Calculation Period ending on such date.

“ Consolidated Net Income ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, the sum (without duplication) of (a) the net income (or net loss) of the Company and its Subsidiaries, as determined on a consolidated basis in accordance with GAAP, plus (b) to the extent deducted in determining such net income (or net loss), (i) any non-cash charge related to the write-off of deferred financing cost, plus (ii) to the extent deducted in determining such net income (or net loss), the Transaction Costs.

 

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“ Consolidated Net Interest Expense ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, Consolidated Interest Expense minus Consolidated Interest Income, determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

“ Consolidated Net Worth ” shall mean, at any date, the Company’s total stockholders’ equity at such date, without giving effect to (a) foreign currency translation adjustments under Financial Accounting Standards Board Statement No. 52, “Foreign Currency Translation”, (b) adjustments to the value of the investments of the Company and its Subsidiaries in debt and equity securities under Financial Accounting Standards Board Statement No. 115, “Accounting For Certain Investments In Debt And Equity Securities”, (c) the cost of postretirement benefits to employees of the Company and its Subsidiaries under Financial Accounting Standards Board Statement No. 106, “Employer’s Accounting for Postretirement Benefits Other Than Pensions”, and (c) derivative transactions adjustments under Financial Accounting Standards Board Statement No. 133, determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

“ Consolidated Tangible Net Worth ” shall mean, at any date, the sum of (a) Consolidated Net Worth, minus (b) the amount of the intangible assets of the Company and its Subsidiaries at such date, including, without limitation, goodwill (whether representing the excess of cost over book value of assets acquired, or otherwise), capitalized expenses, patents, trademarks, tradenames, copyrights, franchises, licenses and deferred charges (such as, without limitation, unamortized costs and costs of research and development), all determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

“ Consolidated Total Assets ” shall mean, at any date, the total assets of the Company and its Subsidiaries on such date, as determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

“ Consolidated Total Debt ” shall mean, at any date, and without duplication, the sum of (a) the outstanding principal amount of Loans on such date, (b) the outstanding principal amount of local revolving credit facility borrowings in jurisdictions outside the United States and other outstanding revolving Indebtedness for borrowed money of Foreign Subsidiaries on such date, (c) the outstanding principal amount of the Existing Senior Notes 2007, the Senior Notes and Convertible Notes on such date and, (d) the outstanding amount of all other Indebtedness (other than Indebtedness as describe in clauses (a), (b), and (c) above) of the Company and its Subsidiaries as same would be shown on a consolidated balance sheet of the Company in accordance with GAAP on such date.

“ Consolidated Total Senior Debt ” shall mean, at any date, and without duplication, the aggregate principal amount of (a) outstanding Loans on such date, (b) outstanding local credit facility borrowings in jurisdictions outside the United States on such date and other outstanding Indebtedness for borrowed money of Foreign Subsidiaries on such date, (c) customer advances on such date, in each case as determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP and (d) other outstanding Indebtedness (excluding the Subordinated Indebtedness, the Existing Senior Notes 2007, and the Senior Notes) of the Company and its Subsidiaries as same would be shown on a consolidated balance sheet of the Company in accordance with GAAP on such date.

 

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“ Consolidated Total Senior Debt to Working Capital Amount Ratio ” shall mean, at any date, the ratio of (a) Consolidated Total Senior Debt on such date minus cash and Cash Equivalents on such date to (b) the Working Capital Amount on such date.

“ Constructive Profit Distribution ” shall have the meaning set forth in Section 11.9(a) .

“ Contractual Obligation ” shall mean, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or undertaking to which such Person is a party or by which it or any of its property is bound.

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

“ Convertible Notes ” shall mean the Company’s convertible senior subordinated Notes due 2014, in an original principal amount of up to $100,000,000 (or up to $115,000,000 if one or more initial purchasers of the Convertible Notes on the date of the initial issuance of the Convertible Notes exercise all or a portion of their overallotment option in respect of its Convertible Notes) issued by the Company pursuant to the subordinated Convertible Notes Indenture, as in effect on the date of the initial issuance of the Convertible Notes and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms hereof and thereof.

“ Convertible Notes Documents ” shall mean the Convertible Notes, the Convertible Notes Indenture and all other documents executed and delivered with respect to the Convertible Notes or Convertible Notes Indenture, in each case on the terms set forth in the Preliminary Offering Circular in respect of the Convertible Notes dated June 22, 2009 issued by the Company, or no less favorable in any material respect, or with respect to any subordination terms, in any respect, to the Lenders, as in effect on the date of the initial issuance of the Convertible Notes and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms hereof and thereof.

“ Convertible Notes Indenture ” shall mean the Indenture, on the terms set forth in the Preliminary Offering Circular in respect of the Convertible Notes dated June 22, 2009 issued by the Company, or no less favorable in any material respect, or with respect to any subordination terms, in any respect, to the Lenders, among the Company, Deutsche Bank Trust Company Americas, as registrar, conversion agent and paying agent, and Law Debenture Trust Company of New York, as trustee, as in effect on the date of the initial issuance of the Convertible Notes and as thereafter amended, modified and/or supplemented from time to time in accordance with the terms hereof and thereof.

“ Corresponding Debt ” shall have the meaning set forth in Section 2.21(b) .

 

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“ Credit Documents ” shall mean a collective reference to this Agreement, the Notes, the Security Documents, the Fee Letter, each Incremental Revolving Commitment Agreement, any Joinder Agreement, each Notice of Borrowing, each Letter of Credit Request, each Notice of Conversion and all other documents delivered by any Credit Party to the Administrative Agent or any Lender in connection herewith or therewith, excluding any Hedging Agreement.

“ Credit Party ” shall mean any of (i) the Borrowers, (ii) the Guarantors and (iii) the pledgors of the Pledged Foreign Subsidiaries in their capacity as such.

“ Credit Party Obligations ” shall mean, without duplication, (a) all of the obligations of the Credit Parties to any Lender, the Swingline Lender, any Issuing Lender and any Agent, whenever arising, under this Agreement, the Notes or any of the other Credit Documents (including, but not limited to, any interest accruing after the occurrence of a filing of a petition of bankruptcy under the Bankruptcy Code with respect to any Credit Party, regardless of whether such interest is an allowed claim under the Bankruptcy Code) and (b) all liabilities and obligations, whenever arising, owing from any Borrower or any Guarantor to any Hedging Agreement Provider arising under any Secured Hedging Agreement.

“ Debt Issuance ” shall mean the issuance of any Indebtedness for borrowed money by any Credit Party or any of its Subsidiaries (excluding, for purposes hereof, any Equity Issuance or any Indebtedness of any Credit Party and its Subsidiaries permitted to be incurred pursuant to Section 6.1).

“ Debt Rating ” shall mean the debt rating for the Company’s senior, unsecured, non credit enhanced long term Indebtedness for money borrowed as determined by Moody’s and S&P.

“ Debtor Relief Law ” means the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

“ Decree ” shall mean the Besluit definitiebepalingen Wft , dated 12 October 2006, as amended from time to time.

“ Default ” shall mean any of the events specified in Section 7.1 , whether or not any requirement for the giving of notice or the lapse of time, or both, or any other condition, has been satisfied.

“ Defaulting Lender ” shall mean any Lender that (i) has failed (which failure has not been cured) to fund any Loan or any participation interest in Letters of Credit or Swingline Loans requested and permitted to be made hereunder in accordance with the terms hereof, (ii) has notified the Borrower, the Administrative Agent, any Issuing Lender or the Swingline Lender that it does not intend to comply with any of its funding obligations under this Agreement or has made a public statement to the effect that it does not intend to comply with its funding obligations under this Agreement or generally under other agreements in which it commits to extend credit, (iii) has failed, within five Business Days after written request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund prospective Loans or participations in Letters of Credit and

 

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Swingline Loans, (iv) has failed to pay to the Administrative Agent or any Lender when due an amount owed by such Lender pursuant to the terms of this Agreement, or (v) has become the subject of a proceeding under any Debtor Relief Law, or has had a receiver, conservator, trustee or custodian appointed for it; provided that for purposes of Section 2.2 and Section 2.3 only and any documentation extended into pursuant to Back-Stop Arrangements/and the term “ Defaulting Lender ” as used therein, the term “ Defaulting Lender ” shall also include (a) any Lender with an Affiliate that (x) either (A) Controls such Lender or (B) at the election of the Administrative Agent, is under common Control with such Lender and (y) has become the subject of a proceeding under any Debtor Relief Law, or has had a receiver, conservator, trustee or custodian appointed for it or is subject to a takeover by a Governmental Authority or does not meet a capital adequacy or liquidity requirement applicable to such Affiliate as determined by the relevant Governmental Authority, (b) any Lender that previously constituted a “ Defaulting Lender ” under this Agreement, unless such Lender has ceased to constitute a “ Defaulting Lender ” for a period of at least 90 consecutive days, and (c) any Lender that the Swingline Lender, any Issuing Lender or Administrative Agent believes in good faith has defaulted in its obligations under any other credit facility to which such Lender is a party.

“ Deutsche Bank ” shall mean Deutsche Bank Trust Company Americas, together with its successors and assigns.

“ Disqualified Stock ” shall mean any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case, at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the date on which the Senior Notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require the Company to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption is permitted under Section 6.9.

“ Dollars ” and “ $ ” shall mean dollars in lawful currency of the United States of America.

“ Domestic Guaranteed Party ” shall mean the Company and each Subsidiary of the Company party to any Secured Hedging Agreements.

“ Domestic Guarantor ” shall have the meaning set forth in the preamble of this Agreement.

“ Domestic Guaranty ” shall mean the guaranty of the Domestic Guarantors set forth in ARTICLE X.

“ Domestic Lending Office ” shall mean, initially, the office of each Lender designated as such Lender’s Domestic Lending Office shown on such Lender’s Administrative Questionnaire; and thereafter, such other office of such Lender as such Lender may from time to time specify to the Administrative Agent and the Administrative Borrower as the office of such Lender at which Alternate Base Rate Loans of such Lender are to be made.

 

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“ Domestic Subsidiary ” shall mean any Subsidiary that is organized and existing under the laws of the United States or any state or commonwealth thereof or under the laws of the District of Columbia.

“ Dutch Banking Act ” shall mean the Act on the Supervision of the Financial Markets of 28 September 2006 ( Wet op het financieel toezicht ), as amended from time to time, including any regulations pursuant to it.

“ Dutch Borrower ” shall have the meaning set forth in the preamble hereof.

“ Effective Date ” shall mean the date of this Agreement.

“ Eligible Assignee ” shall mean (a) a Lender, and (b) (i) an Affiliate of a Lender, (ii) an Approved Fund, and (iii) any other Person (other than a natural person), in each case, approved by (I) the Administrative Agent, (II) each Issuing Lender, (III) the Swingline Lender and (IV) unless an Event of Default has occurred and is continuing and so long as the primary syndication of the Loans has been completed, the Administrative Borrower (each such approval not to be unreasonably withheld or delayed); provided that notwithstanding the foregoing, “ Eligible Assignee ” shall not include the Borrowers or any of the Borrowers’ Affiliates or Subsidiaries.

“ Eligible Inventory ” shall mean, as of any date of determination and without duplication, the lower of the aggregate book value (based on an average cost valuation, consistently applied in accordance with GAAP principles) or fair market value of all raw materials and finished goods inventory owned by the Company or any of its Subsidiaries less appropriate reserves determined in accordance with GAAP but excluding in any event (i) inventory subject to a Lien that is not a Permitted Lien, (ii) inventory which is not in good condition or fails to meet standards for sale or use imposed by governmental agencies, departments or divisions having regulatory authority over such goods, (iii) inventory which is not useable or salable and (iv) inventory which fails to meet such other specifications and requirements as may from time to time be established by the Administrative Agent in its reasonable discretion.

“ Eligible Receivables ” shall mean, as of any date of determination and without duplication, the aggregate book value of all accounts receivable, receivables, and obligations for payment created or arising from the sale of inventory or the rendering of services in the ordinary course of business (collectively, the “ Receivables ”), owned by or owing to the Company or any of its Subsidiaries, net of allowances and reserves for doubtful or uncollectible accounts and sales adjustments consistent with such Person’s internal policies and in any event in accordance with GAAP, but excluding in any event (i) any Receivable which is subject to a Lien that is not a Permitted Lien, (ii) Receivables which are more than ninety (90) days past due (net of reserves for bad debts in connection with any such Receivables), (iii) Receivables owing by an account debtor which is not solvent or is subject to any bankruptcy or insolvency proceeding of any kind, (iv) Receivables which are contingent or subject to offset, deduction, counterclaim, dispute or other defense

 

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to payment, in each case to the extent of such offset, deduction, counterclaim, dispute or other defense, (v) Receivables for which any direct or indirect Subsidiary or any Affiliate of the Company or any of its Subsidiaries is the account debtor and (vi) Receivables which fail to meet such other specifications and requirements as may from time to time be established by the Administrative Agent in its reasonable discretion.

“ Environmental Claim ” shall mean any claim, however asserted, by any Governmental Authority or other Person alleging potential liability or responsibility for violation of any Environmental Law or for release into or injury to the environment or threat to public health, personal injury (including sickness, disease or death), property damage, natural resources damage, or otherwise alleging liability or responsibility for damages (punitive or otherwise), cleanup, investigation, removal, remedial or response costs, litigation costs, restitution, civil or criminal penalties, injunctive relief, or other type of relief, resulting from or based upon (a) the presence, placement, discharge, emission or release (including intentional and unintentional, negligent and non-negligent, sudden or non-sudden, accidental or non-accidental placement, spills, leaks, discharges, emissions, releases or threatened releases) of any Hazardous Material at, in, or from property, whether or not owned by the Company or any of its Subsidiaries, or (b) any other circumstances forming the basis of any violation, or alleged violation, of any Environmental Law.

“ Environmental Law ” shall mean any federal, state or local law, statute, ordinance, code, rule, regulation, decree, order, judgment, or principles of common law relating to (i) releases or threatened releases of Hazardous Materials or materials containing Hazardous Materials; (ii) the manufacture, handling, transport, use, treatment, storage or disposal of Hazardous Materials or materials containing Hazardous Materials; or (iii) otherwise relating to the environment or to the protection of human health.

“ Environmental Permits ” shall have the meaning set forth in Section 3.10(b) .

“ Equity Interests ” of any Person shall mean any and all shares, interests, rights to purchase, warrants, options, participation or other equivalents of or interest in (however designated) equity of such Person, including any common stock, preferred stock, any limited or general partnership interest and any limited liability company membership interest.

“ Equity Issuance ” shall mean any issuance by any Credit Party or any of its Subsidiaries to any Person which is not a Credit Party of (a) shares of or interests in its Capital Stock, (b) any shares of or interests in its Capital Stock pursuant to the exercise of options or warrants or other similar rights, (c) any shares of or interests in its Capital Stock pursuant to the conversion of any debt securities to equity or (d) warrants or options or other similar rights which are exercisable for or convertible into shares of or interests in its Capital Stock. Notwithstanding the foregoing, the term “ Equity Issuance ” shall not include (i) any Asset Disposition, (ii) any Debt Issuance, (iii) any equity issuance to officers or employees of any Credit Party, (iv) the issuance or the conversion of the Convertible Notes, or (v) the sale of the Permitted Warrants or delivery of the Company’s common stock in any settlement thereof.

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

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“ Eurodollar Reserve Percentage ” shall mean for any day, the percentage (expressed as a decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in effect for such day as prescribed by the Federal Reserve Board (or any successor) for determining the maximum reserve requirement (including, without limitation, any basic, supplemental or emergency reserves) in respect of Eurocurrency liabilities, as defined in Regulation D of such Board as in effect from time to time, or any similar category of liabilities for a member bank of the Federal Reserve System in New York City.

“ Event of Default ” shall mean any of the events specified in Section 7.1 ; provided , however , that any requirement contained in said Section 7.1 for the giving of notice or the lapse of time, or both, or any other condition, has been satisfied.

“ Excluded Inventory ” shall mean (a) tobacco inventories for which title has passed to a customer and (b) Committed Inventories to the extent a customer is providing financing to the Company or any of its Subsidiaries for such Committed Inventories.

“ Existing Credit Agreement ” shall have the meaning set forth in the recitals hereto.

“ Existing Indebtedness ” shall have the meaning provided in Section 4.1(e).

“ Existing Notes ” shall mean the Existing Senior Notes 2005, Existing Senior Notes 2007 and the Existing Senior Subordinated Notes.

“ Existing Senior Indenture 2005 ” shall mean that certain Indenture, dated as of May 13, 2005, by and among the Company, as issuer, and Deutsche Bank Trust Company Americas, as trustee with respect to the Existing Senior Notes 2005 as supplemented, amended, restated, extended, renewed, replaced or otherwise modified from time to time prior to the date hereof.

“ Existing Senior Indenture 2007 ” shall mean that certain Indenture, dated as of March 7, 2007, by and among the Company, as issuer, Law Debenture Trust Company of New York, as trustee and Deutsche Bank Trust Company Americas, as paying agent and registrar, with respect to the Existing Senior Notes 2007 as supplemented, amended, restated, extended, renewed, replaced or otherwise modified from time to time prior to the date hereof.

“ Existing Senior Notes 2005 ” shall mean the 11% Senior Notes due 2012 in an original principal amount of $315,000,000, issued by the Company pursuant to the Existing Senior Indenture 2005 or pursuant to one or more similar indentures comprising the same economic and other material terms and conditions (except for the stated and effective interest rates), as such Senior Notes 2005 may be supplemented, amended, restated, extended, renewed, replaced or otherwise modified from time to time prior to the date hereof.

“ Existing Senior Notes 2007 ” shall mean the 8.5% Senior Notes due 2012 in an original principal amount of $150,000,000, issued by the Company pursuant to the Existing Senior Indenture 2007 or pursuant to one or more similar indentures comprising the same economic and other material terms and conditions (except for the stated and effective interest rates), as such Senior Notes 2007 may be supplemented, amended, restated, extended, renewed, replaced or otherwise modified from time to time prior to the date hereof.

 

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“ Existing Senior Notes Documents 2007 ” shall mean the Senior Notes 2007, the Senior Indenture 2007 and all other documents executed and delivered with respect to the Senior Notes 2007 or Senior Notes Indenture 2007, as in effect on the Effective Date and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms hereof and thereof.

“ Existing Senior Subordinated Indenture ” shall mean that certain Indenture, dated as of May 13, 2005, by and among the Company, as issuer, Law Debenture Trust Company of New York, as trustee, and Deutsche Bank Trust Company Americas, as paying agent and registrar, with respect to the Existing Senior Subordinated Notes as supplemented, amended, restated, extended, renewed, replaced or otherwise modified from time to time prior to the date hereof.

“ Existing Senior Subordinated Notes ” shall mean the 12   ³ / 4 % Senior Subordinated Notes due 2012 in an aggregate principal amount of $100,000,000, issued by the Company pursuant to the Existing Senior Subordinated Indenture, as such Senior Subordinated Notes may be supplemented, amended, restated, extended, renewed, replaced or otherwise modified from time to time prior to the date hereof.

“ Extension of Credit ” shall mean, as to any Lender, the making of a Loan by such Lender, the participation by such Lender in a Swingline Loan or the issuance of, or participation in, a Letter of Credit by such Lender.

“ Federal Funds Effective Rate ” shall have the meaning set forth in the definition of “ Alternate Base Rate ”.

“ Fee Letter ” shall mean that certain Fee Letter dated July 2, 2009 among the Company, Deutsche Bank and Deutsche Bank Securities Inc.

“ Fees ” shall mean all amounts payable pursuant to or referred to in Section 2.4.

“ Foreign Guaranteed Party ” shall mean the Dutch Borrower and each Foreign Subsidiary party to any Secured Hedging Agreements.

“ Foreign Guaranty ” shall mean the guaranty of the Guarantors set forth in ARTICLE XI.

“ Foreign Pledge Agreements ” shall mean (a) those pledge agreements and charges listed on Schedule 1.1(c) , (as amended, restated, supplemented or modified from time to time), executed by certain Subsidiaries of the Company in favor of the Administrative Agent and (b) any other Pledge Agreement, Memorandum of Charge Over Shares or similar document or instrument entered into by the Company or any of its Subsidiaries with respect to the Pledged Foreign Subsidiaries.

“ Foreign Subsidiary ” shall mean any Subsidiary of the Company that is not a Domestic Subsidiary.

“ Fronting Fee ” shall have the meaning set forth in Section 2.4(b) .

 

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“ Fund ” shall mean any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

“ GAAP ” shall mean generally accepted accounting principles in effect in the United States of America applied on a consistent basis, subject to the provisions of Section 1.3 .

“ Governmental Authority ” shall mean the government of the United States of America or any other nation, or of any political subdivision thereof, whether state 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).

“ Guarantor ” shall have the meaning set forth in the preamble of this Agreement.

“ Guaranty ” shall mean, collectively, the Domestic Guaranty and the Foreign Guaranty.

“ Guaranty Obligations ” shall mean, with respect to any Person, without duplication, any obligations of such Person (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) guaranteeing or intended to guarantee any Indebtedness of any other Person in any manner, whether direct or indirect, and including, without limitation, any obligation, whether or not contingent, (i) to purchase any such Indebtedness or any property constituting security therefor, (ii) to advance or provide funds or other support for the payment or purchase of any such Indebtedness or to maintain working capital, solvency or other balance sheet condition of such other Person (including, without limitation, keep well agreements, maintenance agreements, comfort letters or similar agreements or arrangements) for the benefit of any holder of Indebtedness of such other Person, (iii) to lease or purchase property, securities or services primarily for the purpose of assuring the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless the holder of such Indebtedness against loss in respect thereof. The amount of any Guaranty Obligation hereunder shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the Indebtedness in respect of which such Guaranty Obligation is made.

“ Hazardous Materials ” shall mean (i) those substances defined in or regulated as toxic or hazardous under the following federal statutes and their state counterparts, as well as the statutes’ implementing regulations, as amended from time to time: the Hazardous Materials Transportation Act; the Resource Conservation and Recovery Act; the Comprehensive Environmental Response, Compensation and Liability Act; the Clean Water Act; the Safe Drinking Water Act; the Toxic Substances Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Federal Food, Drug, and Cosmetic Act; and the Clean Air Act; and (ii) any pollutant, contaminant or other substance with respect to which a Governmental Authority requires environmental investigation, monitoring, reporting or remediation.

“ Hedging Agreement ” shall mean, with respect to any Person, any agreement entered into to protect such Person against fluctuations in interest rates, or currency or raw materials values, including, without limitation, any interest rate swap, cap or collar

 

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agreement, or similar arrangement between such Person and one or more counterparties, any foreign currency exchange agreement, currency protection agreements, commodity purchase or option agreements, or other interest or exchange rate or commodity price hedging agreements. Notwithstanding the foregoing, the term “ Hedging Agreement ” shall not include any Permitted Bond Hedges or any other hedging agreements (or substantively equivalent derivative transactions) with respect to the Company’s Equity Interests.

“ Hedging Agreement Provider ” shall mean any Person that enters into a Hedging Agreement with any Borrower or any Guarantor that is permitted by Section 6.1(e) to the extent such Person is (a) a Lender, (b) an Affiliate of a Lender, (c) a Person (or an Affiliate of such Person) that becomes a Lender subsequent to entering into the Hedging Agreement or (d) a Person that was a Lender (or an Affiliate of a Lender) at the time it entered into such Hedging Agreement but has ceased to be a Lender (or whose Affiliate has ceased to be a Lender) under the Credit Agreement.

“ Hostile Acquisition ” shall mean any Acquisition involving a tender offer or proxy contest that has not been recommended or approved by the board of directors of the Person that is the subject of the Acquisition prior to the first public announcement or disclosure relating to such Acquisition.

“ Immaterial Subsidiary ” shall mean, at any date of determination, any Subsidiary (other than a Credit Party) that (i) contributed, (x) together with its Subsidiaries, less than 4.0% of Consolidated EBITDA or (y) together with its Subsidiaries and each other Subsidiary which the Company is treating as an “ Immaterial Subsidiary ” for purposes of one or more of the Subject Provisions and their respective Subsidiaries (without duplication), less than 8.0% of Consolidated EBITDA, in each case, for the Calculation Period most recently ended for which the Company has delivered financial statements to the Administrative Agent prior to the date of determination, (ii) contributed, (x) together with its Subsidiaries, less than 4.0% of Consolidated Net Income or (y) together with its Subsidiaries and each other Subsidiary which the Company is treating as an “ Immaterial Subsidiary ” for purposes of one or more of the Subject Provisions and their respective Subsidiaries (without duplication), less than 8.0% of Consolidated Net Income, in each case, for the Calculation Period most recently ended for which the Company has delivered financial statements to the Administrative Agent prior to the date of determination, or (iii) had, (x) together with its Subsidiaries, total assets (as determined in accordance with GAAP) representing less than 4.0% of Consolidated Total Assets or (y) together with its Subsidiaries and each other Subsidiary which the Company is treating as an “ Immaterial Subsidiary ” for purposes of one or more of the Subject Provisions and their respective Subsidiaries (without duplication), total assets (as determined in accordance with GAAP) representing less than 8.0% of Consolidated Total Assets, in each case, as of the last day of the calculation period most recently ended for which the Company has delivered financial statements to the Administrative Agent prior to the date of determination.

“ Incremental Lender ” shall have the meaning provided in Section 2.23(b).

“ Incremental Revolving Commitment ” shall mean, for any Lender, any Revolving Commitment provided by such Lender after the Effective Date in an Incremental Revolving Commitment Agreement delivered pursuant to Section 2.23; it being understood,

 

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however, that on each date upon which an Incremental Revolving Commitment of any Lender becomes effective, such Incremental Revolving Commitment of such Lender shall be added to (and thereafter become a part of) the Revolving Commitment of such Lender for all purposes of this Agreement as contemplated by Section 2.23.

“ Incremental Revolving Commitment Agreement ” shall mean each Incremental Revolving Commitment Agreement in substantially the form of Schedule 2.23 (appropriately completed, and with such modifications as may be reasonably satisfactory to the Administrative Agent) executed and delivered in accordance with Section 2.23.

“ Incremental Revolving Commitment Date ” shall mean each date upon which an Incremental Revolving Commitment under an Incremental Revolving Commitment Agreement becomes effective as provided in Section 2.23(b).

“ Incremental Revolving Commitment Requirements ” shall mean, with respect to any provision of an Incremental Revolving Commitment on a given Incremental Revolving Commitment Date, the satisfaction of each of the following conditions on the Incremental Revolving Commitment Date of the respective Incremental Revolving Commitment Agreement: (i) no Default or Event of Default exists or would exist after giving effect thereto; (ii) all of the representations and warranties contained in the Credit Documents shall be true and correct in all material respects at such time (unless stated to relate to a specific earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of such earlier date); (iii) the delivery by the Company to the Administrative Agent of an acknowledgment, in form and substance reasonably satisfactory to the Administrative Agent and executed by each Credit Party, acknowledging that such Incremental Revolving Commitment and/or Revolving Loans subsequently incurred, and Letters of Credit issued, as applicable, pursuant to such Incremental Revolving Commitment shall constitute Credit Party Obligations under the Credit Documents and secured on a pari passu basis with the Credit Party Obligations under the Security Documents; (iv) the delivery by the Company to the Administrative Agent of an opinion or opinions, in form and substance reasonably satisfactory to the Administrative Agent, from counsel to the Credit Parties reasonably satisfactory to the Administrative Agent and dated such date, covering such matters incident to the transactions contemplated thereby as the Administrative Agent may reasonably request; (v) the delivery by each Credit Party to the Administrative Agent of such other officers’ certificates, board of director (or equivalent governing body) resolutions and evidence of good standing (to the extent available under applicable law) as the Administrative Agent shall reasonably request; (vi) the Company shall have delivered a certificate executed by an Responsible Officer of the Company, certifying to the knowledge of the Company, compliance with the requirements of preceding clauses (i) and (ii); and (vii) the completion by each Credit Party of such other actions as the Administrative Agent may reasonably request in connection with such Incremental Revolving Commitment in order to create, continue or maintain the security interests of the Administrative Agent in the Collateral and the perfection thereof (including such other documents reasonably requested by the Administrative Agent to be delivered in connection therewith).

“ Indebtedness ” of any Person shall mean, at any date, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of

 

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such Person to pay the deferred purchase price of property or services (except trade accounts payable arising in the ordinary course of business), (d) all obligations of such Person as lessee under Capital Leases, (e) all obligations of such Person to purchase securities or other property which arise out of or in connection with the sale of the same or substantially similar securities or property, (f) all non-contingent obligations of such Person to reimburse any other Person in respect of amounts paid under letters of credit, surety and appeal bonds and performance bonds or similar instruments assuring any other Person of the performance of any act or acts or the payment of any obligation, (g) all obligations of others secured by a Lien on any asset of such Person, whether or not such obligation is assumed by such Person, (h) the principal portion of all obligations of such Person under any synthetic lease or other similar off-balance sheet financing product and (i) all obligations owing under Secured Hedging Agreements and other Hedging Agreements.

“ Insolvency ” shall mean, with respect to any Multiemployer Plan, the condition that such Plan is insolvent within the meaning of such term as used in Section 4245 of ERISA.

“ Insolvent ” shall mean being in a condition of Insolvency.

“ Intercompany Note ” shall mean the intercompany note substantially in the form of Schedule 6.1(d) .

“ Interest Payment Date ” shall mean (a) as to any Alternate Base Rate Loan, the last day of each March, June, September and December and on the Maturity Date, (b) as to any LIBOR Rate Loan having an Interest Period of three months or less, the last day of such Interest Period, and (c) as to any LIBOR Rate Loan having an Interest Period longer than three (3) months, each day which is three (3) months after the first day of such Interest Period and the last day of such Interest Period.

“ Interest Period ” shall mean, with respect to any LIBOR Rate Loan,

(a) initially, the period commencing on the Borrowing Date or conversion date, as the case may be, with respect to such LIBOR Rate Loan and ending one, two, three or six months thereafter, as selected by the Administrative Borrower in the Notice of Borrowing or Notice of Conversion given with respect thereto; and

(b) thereafter, each period commencing on the last day of the immediately preceding Interest Period applicable to such LIBOR Rate Loan and ending (x) one or two weeks thereafter to the extent agreed to by each Lender, or (y) one, two, three or six months thereafter, in each case, as selected by the Administrative Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto;

provided that the foregoing provisions are subject to the following:

(i) if any Interest Period pertaining to a LIBOR Rate Loan would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day;

 

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(ii) any Interest Period pertaining to a LIBOR Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the relevant calendar month;

(iii) if the Administrative Borrower shall fail to give notice as provided above, the Administrative Borrower shall be deemed to have selected an Alternate Base Rate Loan to replace the affected LIBOR Rate Loan;

(iv) any Interest Period in respect of any Loan that would otherwise extend beyond the Maturity Date with respect to such Loan shall end on such Maturity Date; and

(v) no more than ten (10) LIBOR Rate Loans may be in effect at any one time. For purposes hereof, LIBOR Rate Loans with different Interest Periods shall be considered as separate LIBOR Rate Loans, even if they shall begin on the same date and have the same duration, although borrowings, extensions and conversions may, in accordance with the provisions hereof, be combined at the end of existing Interest Periods to constitute a new LIBOR Rate Loan.

“ Investment ” shall mean all investments, in cash or by delivery of property made, directly or indirectly in, to or from any Person, whether by acquisition of shares of Capital Stock, property, assets, indebtedness or other obligations or securities or by loan, advance, capital contribution or otherwise.

“ Investment Grade Status ” exists as to any Person at any date if all senior long-term unsecured debt securities of such Person outstanding at such date which had been rated by S&P or Moody’s are rated BBB- or higher by S&P or Baa3 or higher by Moody’s, as the case may be, or if such Person does not have a rating of its long-term unsecured debt securities, then if the corporate credit rating of such Person, if any exists, from S&P is BBB- or higher or the issuer rating of such Person, if any exists, from Moody’s is Baa3 or higher.

“ Issuing Lender ” shall mean Deutsche Bank (or an affiliate thereof) and any such other Lender as agreed to by the Administrative Agent and the Administrative Borrower.

“ Joinder Agreement ” shall mean a Joinder Agreement substantially in the form of Schedule 5.10 , executed and delivered by an Additional Credit Party in accordance with the provisions of Section 5.10 .

“ Judgment Currency ” shall have the meaning set forth in Section 9.17 .

“ Lender ” shall have the meaning set forth in the first paragraph of this Agreement.

“ Letter of Credit Back-Stop Arrangements ” shall have the meaning provided in Section 2.3(a) .

 

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“ Letter of Credit Fee ” shall have the meaning set forth in Section 2.4(b) .

“ Letters of Credit ” shall mean any letter of credit issued by any Issuing Lender pursuant to the terms hereof, as such letter of credit may be amended, modified, extended, renewed or replaced from time to time.

“ Letter of Credit Request ” shall mean a request for the issuance of a Letter of Credit, in substantially the form of the letter of credit request attached hereto as Schedule 2.3(b) .

“ LIBOR ” shall mean, for any LIBOR Rate Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Page LIBOR 01 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, the term “ LIBOR ” shall mean, for any LIBOR Rate Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two (2) Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period; provided , however , if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%). If, for any reason, neither of such rates is available, then “ LIBOR ” shall mean the rate per annum at which, as determined by the Administrative Agent, Dollars in an amount comparable to the Loans then requested are being offered to leading banks at approximately 11:00 AM. London time, two (2) Business Days prior to the commencement of the applicable Interest Period for settlement in immediately available funds by leading banks in the London interbank market for a period equal to the Interest Period selected.

“ LIBOR Lending Office ” shall mean, initially, the office of each Lender designated as such Lender’s LIBOR Lending Office shown on such Lender’s Administrative Questionnaire; and thereafter, such other office of such Lender as such Lender may from time to time specify to the Administrative Agent and the Administrative Borrower as the office of such Lender at which the LIBOR Rate Loans of such Lender are to be made.

“ LIBOR Rate ” shall mean a rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%) determined by the Administrative Agent pursuant to the following formula:

 

“ LIBOR Rate Loan ” shall mean Loans the rate of interest applicable to which is based on the LIBOR Rate.

“ Lien ” shall mean any deed of trust, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Capital Lease having substantially the same economic effect as any of the foregoing).

 

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“ Loan ” shall mean each Revolving Loan and each Swingline Loan, as appropriate.

“ LOC Committed Amount ” shall have the meaning set forth in Section 2.3(a) .

“ LOC Obligations ” shall mean, at any time, the sum of (a) the maximum amount that is, or at any time thereafter may become, available to be drawn under Letters of Credit then outstanding, assuming compliance with all requirements for drawings referred to in such Letters of Credit plus (b) the aggregate amount of all drawings under Letters of Credit honored by the Issuing Lender but not theretofore reimbursed.

“ Mandatory LOC Borrowing ” shall have the meaning set forth in Section 2.3(e) .

“ Mandatory Swingline Borrowing ” shall have the meaning set forth in Section 2.2(b)(ii) .

“ Material Adverse Effect ” shall mean a material adverse effect on (a) the business, operations, property or condition (financial or otherwise) of the Credit Parties and their Subsidiaries taken as a whole, (b) the ability of any Credit Party to perform its obligations, when such obligations are required to be performed, under this Agreement, any of the Notes or any other Credit Document or (c) the validity or enforceability of this Agreement, any of the Notes or any of the other Credit Documents or the material rights or remedies of the Administrative Agent or the Lenders hereunder or thereunder.

“ Material Domestic Subsidiary ” shall mean any Domestic Subsidiary of the Company (or, for purposes of Sections 5.10 and 5.11 and Article X, but not for purposes of Article VI, any Foreign Subsidiary of the Company that guarantees or otherwise provides direct credit support for any Indebtedness of the Company), in each case that would constitute a “significant subsidiary” of the Company as defined in Rule 1.02 of Regulation S-X promulgated by the Securities and Exchange Commission except that for purposes of this definition all references in such Rule 1.02 to “ten percent (10%)” shall be deemed to be references to “five percent (5%)”.

“ Material Foreign Subsidiary ” shall mean any Foreign Subsidiary of the Company that would constitute a “significant subsidiary” of the Company as defined in Rule 1.02 of Regulation S-X promulgated by the Securities and Exchange Commission.

“ Material Local Credit Facilities ” shall mean those local credit facilities of any of the Company’s Subsidiaries with an outstanding principal balance at any time after the Effective Date of more than $15,000,000.

“ Maturity Date ” shall mean September 30, 2012.

“ Moody’s ” shall mean Moody’s Investors Service, Inc.

“ Multiemployer Plan ” shall mean a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which the Credit Party, any Subsidiary of a Credit Party or any Commonly Controlled Entity is making or accruing an obligation to make contributions, or has within any of the immediately preceding five (5) plans years made or accrued an obligation to make contributions.

 

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“ Net Cash Proceeds ” shall mean the aggregate cash proceeds received by the Credit Parties and their Subsidiaries in respect of any Asset Disposition, or Recovery Event, net of (a) direct costs paid or payable as a result thereof (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and (b) taxes paid or payable as a result thereof; it being understood that “ Net Cash Proceeds ” shall include, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received by the Credit Parties and their Subsidiaries in respect of any Asset Disposition, or Recovery Event and any cash released from escrow as part of the purchase price in connection with any Asset Disposition.

“ Non-U.S. Plan ” shall mean any plan, fund (including, without limitation, any superannuation fund) or other similar program established, contributed to (regardless of whether through direct contributions or through employee withholding) or maintained outside the United States by any Credit Party, any Subsidiary of a Credit Party or any Commonly Controlled Entity primarily for the benefit of its employees residing outside the United States, which plan, fund or other similar program provides, or results in, retirement income, a deferral or income in contemplation or retirement or payments to be made upon termination or employment, and which plan is not subject to ERISA or the Code.

“ Note ” or “ Notes ” shall mean the Revolving Notes and/or the Swingline Note, collectively, separately or individually, as appropriate.

“ Notice of Borrowing ” shall mean (a) a request for a Revolving Loan borrowing pursuant to Section 2.1(b)(i) , or (b) a request for a Swingline Loan borrowing pursuant to Section 2.2(b)(i) , as appropriate, in substantially the form of the notice of borrowing attached hereto as Schedule 2.1(b)(i) .

“ Notice of Conversion ” shall mean the written notice of extension or conversion as referenced in Section 2.8 .

“ Notice Office ” shall mean (i) for credit notices, the office of the Administrative Agent located at 60 Wall Street, NYC60-0208, 2nd Floor, New York, New York 10005-2858, Attention Scottye Lindsey, Telephone No.: (212) 250-6115, Telecopier No.: (646) 736-7095, and email: scottye.d.lindsey@db.com and (ii) for operational notices, the office of the Administrative Agent located at 5022 Gate Parkway, Suite 400, Jacksonville, Florida 32256, Attention Francisco Lam, Telephone No.: (904) 527 6868, email: francisco.lam@db.com, or (in either case) such office or person as the Administrative Agent may hereafter designate in writing as such to the other parties hereto.

“ OECD ” shall mean the Organization for Economic Cooperation and Development and any successor thereto.

“ OFAC ” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets Control.

 

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“ Parallel Debt ” shall have the meaning set forth in Section 2.21(b) .

“ Participant ” shall have the meaning assigned to such term in clause (d) of Section 9.6 .

“ Participation Interest ” shall mean a participation interest purchased by a Revolving Lender in LOC Obligations as provided in Section 2.3 and in Swingline Loans as provided in Section 2.2 .

“ Patriot Act ” shall mean the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001.

“ PBGC ” shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA.

“ Permitted Acquisition ” shall mean an Acquisition permitted pursuant to the terms of Section 6.5(a) .

“ Permitted Allowance ” shall mean, an allowance offsetting long-term advances to tobacco farmers guaranteed by Foreign Subsidiaries that were brought onto the balance sheet on March 31, 2008 or from time to time thereafter excluding any adjustments for foreign currency changes.

“ Permitted Bond Hedges ” shall mean the call or capped call options (or substantively equivalent derivative transactions) on the Company’s common stock purchased by the Company (i) on or prior to the date of the initial issuance of the Convertible Notes in connection with an issuance of Convertible Notes and (ii) on or prior to the 13th day after the date of the initial issuance of the Convertible Notes, in connection with an issuance of Convertible Notes following the exercise by initial purchasers of all or a portion of their overallotment option with respect to the Convertible Notes.

“ Permitted Investments ” shall have the meaning set forth in Section 6.5 .

“ Permitted Liens ” shall have the meaning set forth in Section 6.2 .

“ Permitted Warrants ” shall mean the call options or warrants (or substantively equivalent derivative transactions) on the Company’s common stock sold by the Company substantially concurrently with the Permitted Bond Hedges.

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

“ Plan ” shall mean, at any particular time, any employee benefit plan which is covered by Title IV of ERISA and in respect of which any Credit Party, any Subsidiary of a Credit Party or any Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“ Pledge Agreement ” shall mean (a) the Pledge and Security Agreement, (b) the Foreign Pledge Agreements, and (c) any other pledge agreement or security agreement entered into by a Credit Party or a Subsidiary thereof pursuant to the terms of this Agreement and/or the Credit Documents, in each case as amended, modified, restated or supplemented from time to time.

 

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“ Pledge and Security Agreement ” shall mean the Pledge and Security Agreement dated as of the Effective Date entered into by the Company and the Domestic Guarantors in favor of the Administrative Agent, for the benefit of the Lenders, as amended, modified, restated or supplemented from time to time.

“ Pledged Foreign Subsidiaries ” shall mean the Foreign Subsidiaries set forth on Schedule 1.1(b) and any other Material Foreign Subsidiaries the Capital Stock of which are pledged pursuant to the Foreign Pledge Agreements.

“ PMP ” shall mean a professional market party, as defined in the Dutch Banking Act, being (a) a qualified investor, including, but not limited to, a legal person or a company that holds a license or is otherwise regulated to be active in the financial markets; (b) a subsidiary of a qualified investor that is included in the supervision of the qualified investor on a consolidated basis; or (c) any other person or company designated by the Decree as a professional market party.

“ Prime Rate ” shall have the meaning set forth in the definition of Alternate Base Rate.

“ Pro Forma Basis ” shall mean, with respect to any transaction, that such transaction (together with each other transaction that occurred after the first day of the four (4) fiscal-quarter period referenced below to the extent previously given effect (or tested) on a Pro Forma Basis for the purposes of (or pursuant to the requirements of this Agreement) shall be deemed to have occurred as of the first day of the four (4) fiscal-quarter period ending as of the last day of the most recent fiscal quarter preceding the date of such transaction with respect to which the Administrative Agent and the Lenders shall have received the financial statements referred to in Section 5.1(a) or (b) , as applicable.

“ Qualifying Equity Interests ” shall mean Equity Interests of the Company other than Disqualified Stock.

“ Recovery Event ” shall mean the receipt by the Company or any of its Subsidiaries of any cash insurance proceeds or condemnation award payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any of their respective property or assets.

“ Refinancing ” shall mean the refinancing transactions described in Section 4.1(e) .

“ Refinancing Documents ” shall mean all pay-off letters, guaranty releases, Lien releases (including, without limitation, UCC termination statements) and other documents and agreements entered into in connection with the Refinancing.

“ Register ” shall have the meaning set forth in Section 9.6(c) .

“ Reimbursement Obligation ” shall mean, with respect to a Letter of Credit issued for the account of a Borrower, the obligation of such Borrower to reimburse the Issuing Lender of such Letter of Credit for a drawing under such Letter of Credit plus accrued (but unpaid) interest on the amount so paid or disbursed by such Issuing Lender.

 

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“ Related Parties ” shall mean, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

“ Removed Lender ” shall have the meaning provided in Section 2.22(a)(B) .

“ Reorganization ” shall mean, with respect to any Multiemployer Plan, the condition that such Plan is in reorganization within the meaning of such term as used in Section 4241 of ERISA.

“ Replaced Lender ” shall have the meaning provided in Section 2.22(a) .

“ Replacement Lender ” shall have the meaning provided in Section 2.22(a) .

“ Reportable Event ” shall mean any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the thirty-day notice period is waived under PBGC Reg. § 4043.22, .23, .25, .27 or .28.

“ Required Lenders ” shall mean, as of any date of determination, Lenders holding in the aggregate greater than 50% of the sum of (i) the Revolving Commitments or (ii) if the Revolving Commitments have been terminated, the outstanding Revolving Loans and Participation Interests (including the Participation Interests of Deutsche Bank, in its capacity as a Lender, in any Letters of Credit and Swingline Loans); provided , however , that if any Lender shall be a Defaulting Lender at such time, then there shall be excluded from the determination of Required Lenders, such Defaulting Lender’s Revolving Commitment or, after termination of the Revolving Commitments, the principal balance of the Revolving Loans owing to such Defaulting Lender and such Defaulting Lender’s Participation Interests.

“ Requirement of Law ” shall mean, as to any Person, the Certificate of Incorporation and Bylaws or other organizational or governing documents of such Person, and each law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“ Responsible Officer ” shall mean, as to (a) a Borrower, the President, the Chief Executive Officer, the Chief Financial Officer or the Treasurer or (b) any other Credit Party, any duly authorized officer thereof.

“ Restricted Payment ” shall mean (a) any dividend or other distribution, direct or indirect, on account of any shares of any class of Capital Stock of the Company or any of its Subsidiaries, now or hereafter outstanding, (b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of Capital Stock of the Company or any of its Subsidiaries, now or hereafter outstanding, or (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Capital Stock of the Company or any of its Subsidiaries,

 

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now or hereafter outstanding, (d) any payment or prepayment of principal of, premium, if any, or interest on, redemption, purchase, retirement, defeasance, sinking fund or similar payment with respect to, any Senior Notes, any Subordinated Indebtedness (excluding, in each case, any payments made as part of the Refinancing on the Effective Date or after the Effective Date with respect to the Existing Notes), or any permitted refinancings pursuant to Section 6.1(h), or (e) any cash payments by the Company or any of its Subsidiaries with respect to any Permitted Bond Hedge (other than (i) on the date of the initial issuance of the Convertible Notes in connection with an issuance of Convertible Notes and (ii) on or prior to the 13th day after the date of the initial issuance of the Convertible Notes, in connection with an issuance of Convertible Notes following the exercise by one or more initial purchasers of all or a portion of their overallotment option with respect to the Convertible Notes) and any Permitted Warrant.

“ Revolving Commitment ” shall mean, with respect to each Revolving Lender, the commitment of such Revolving Lender to make Revolving Loans in an aggregate principal amount at any time outstanding up to an amount equal to such Lender’s Revolving Commitment Percentage of the Revolving Committed Amount.

“ Revolving Commitment Percentage ” shall mean, for each Revolving Lender, the percentage identified as its Revolving Commitment Percentage in the Revolving Commitment Schedule attached hereto as Schedule 1.1(d) or in the Assignment and Assumption or Incremental Revolving Commitment Agreement pursuant to which such Revolving Lender became a Revolving Lender hereunder, in each case as such percentage may be (i) modified in connection with any assignment made in accordance with the provisions of Section 9.6 or (ii) increased from time to time in accordance with the provisions of Section 2.23.

“ Revolving Committed Amount ” shall have the meaning set forth in Section 2.1(a) .

“ Revolving Lender ” shall mean, as of any date of determination, a Lender holding a Revolving Commitment and/or a portion of the outstanding Revolving Loans on such date.

“ Revolving Loan ” shall have the meaning set forth in Section 2.1 .

“ Revolving Note ” or “ Revolving Notes ” shall mean each of the promissory notes of the Borrowers in favor of each of the Revolving Lenders evidencing the Revolving Loans provided pursuant to Section 2.1(e) , individually or collectively, as appropriate, as such promissory notes may be amended, modified, supplemented, extended, renewed or replaced from time to time.

“ S&P ” shall mean Standard & Poor’s Ratings Group, a division of The McGraw Hill, Inc.

“ Sanctioned Country ” shall mean a country subject to a sanctions program identified on the list maintained by OFAC and made publicly available from time to time.

“ Sanctioned Person ” shall mean (a) a Person named on the list of “Specially Designated Nationals and Blocked Persons” maintained by OFAC and made publicly available from time to time, or (b) (i) an agency of the government of a Sanctioned Country, (ii) an organization controlled by a Sanctioned Country, or (iii) a person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC.

 

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“ Secured Hedging Agreement ” shall mean any Hedging Agreement between any Borrower or any Guarantor and any Hedging Agreement Provider; provided , in the case of a Secured Hedging Agreement with a Hedging Agreement Provider who is no longer a Lender, such Secured Hedging Agreement shall cease to be a Secured Hedging Agreement hereunder after the stated maturity date (without extension or renewal) of such Secured Hedging Agreement (unless there are and remain uncured defaults in payment thereunder).

“ Secured Parties ” shall mean the Administrative Agent, the Issuing Lenders, the Swingline Lenders, the Lenders and the Hedging Agreement Providers.

“ Security Documents ” shall mean the Pledge Agreements and such other documents executed and delivered and/or filed in connection with the attachment and perfection of the Administrative Agent’s security interests and liens arising thereunder, including, without limitation, UCC financing statements; provided , that any cash collateral or other agreements entered into pursuant to the Back-Stop Arrangements shall constitute “ Credit Documents ” solely for purpose of Sections 3.4, 3.18, 4.1(e), 6.1(a), 6.2(a) and 9.5.

“ Senior Indenture ” shall mean that certain Indenture, dated as of July 2 2009, by and among the Company, as issuer, Deutsche Bank Trust Company Americas, as registrar and paying agent, and Law Debenture Trust Company of New York, as trustee with respect to the Senior Notes as in effect on the Effective Date, as supplemented, amended, restated, extended, renewed, replaced or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ Senior Notes ” shall mean the 10.00% Senior Notes due 2016 in an original principal amount of $570,000,000, issued by the Company pursuant to the Senior Indenture, as such Senior Notes as in effect on the Effective Date may be supplemented, amended, restated, extended, renewed, replaced or otherwise modified from time to time in accordance with the terms hereof and thereof.

“ Senior Notes Documents ” shall mean the Senior Notes, the Senior Indenture and all other documents executed and delivered with respect to the Senior Notes or Senior Notes Indenture, as in effect on the Effective Date and as the same may be amended, modified and/or supplemented from time to time in accordance with the terms hereof and thereof.

“ Shortfall on Enforcement ” shall have the meaning set forth in Section 11.9(e) .

“ Single Employer Plan ” shall mean any Plan which is not a Multiemployer Plan.

“ Sole Lead Arranger ” shall mean Deutsche Bank Securities, Inc. as Sole Lead Arranger.

“ Solvent ” shall mean, with respect to any Person, that (a) the fair saleable value of each such Person’s assets, measured on a going concern basis, exceeds all debts of such Person (including any liabilities to be incurred pursuant to this Agreement), (b) such Person does not have unreasonably small capital in relation to the business in which it is or proposes to be engaged and (c) such Person has not incurred debts beyond its ability to pay such debts as such debts mature.

 

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“ Specified Sales ” shall mean (a) the sale, transfer, lease or other disposition of inventory and materials in the ordinary course of business and (b) the conversion of cash into Cash Equivalents or Cash Equivalents into cash.

“ Subject Provisions ” shall mean and include each of Sections 6.9(vi), 6.13(e), 7.1(e), and 7.1(f).

“ Subordinated Indebtedness ” shall mean any Indebtedness incurred by any Credit Party which by its terms is subordinated in right of payment to the prior payment of the Credit Party Obligations (for purposes of the definition of “ Consolidated Total Senior Debt ”, on terms acceptable to the Administrative Agent), including, without limitation, the Convertible Notes.

“ Subsidiary ” shall mean, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership, limited liability company or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise qualified, all references to a “ Subsidiary ” or to “ Subsidiaries ” in this Agreement shall refer to a Subsidiary or Subsidiaries of the Company.

“ Swingline Back-Stop Arrangements ” shall have the meaning provided in Section 2.2(a) .

“ Swingline Committed Amount ” shall have the meaning set forth in Section 2.2(a) .

“ Swingline Lender ” shall mean Deutsche Bank, in its capacity as such, or any successor swingline lender hereunder.

“ Swingline Loan ” or “ Swingline Loans ” shall have the meaning set forth in Section 2.2(a) .

“ Swingline Note ” shall mean the promissory notes of the Borrowers in favor of the Swingline Lender evidencing the Swingline Loans provided pursuant to Section 2.2(d) , as such promissory note may be amended, modified, supplemented, extended, renewed or replaced from time to time.

“ Taxes ” shall have the meaning set forth in Section 2.17 .

“ Transaction Costs ” shall mean the costs, fees, expenses and premiums associated with the Refinancing, including, without limitation, the issuance of the Senior Notes and the Convertible Notes, the purchase by the Company of the Permitted Bond Hedges, the sale by the Company of the Permitted Warrants, the cash tender process with respect of the Existing Notes, the entry into and initial funding under the Credit Documents, and the other transactions in connection with the foregoing.

“ Unasserted Obligations ” shall mean, at any time, Credit Party Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities (except for (i) the principal of and interest on, and fees relating to, any Loan and (ii) contingent

 

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reimbursement obligations in respect of amounts that may be drawn under, and fees relating to, Letters of Credit) in respect of which no claim or demand for payment has been made (or, in the case of Credit Party Obligations for indemnification, no notice for indemnification has been issued by the indemnitee) at such time.

“ Uncommitted Inventories ” shall mean tobacco inventories for which the Company or any of its Subsidiaries has not received a Confirmed Order, which such inventories are reflected on the books and records of the Company or any of its Subsidiaries as uncommitted inventories in accordance with GAAP.

“ Unutilized Revolving Loan Commitment Amount ” shall mean, with respect to any Revolving Lender at any time, such Revolving Lender’s portion of Revolving Commitment Amount at such time less the sum of (i) the aggregate outstanding principal amount of all Revolving Loans made by such Revolving Lender at such time, (ii) such Revolving Lender’s Revolving Commitment Percentage of the LOC Obligations outstanding at such time and (iii) solely in the case the Revolving Lender that is the Swingline Lender, its Revolving Commitment Percentage of the aggregate outstanding principal amount of Swingline Loans at such time.

“ Voting Stock ” shall mean, with respect to any Person, Capital Stock issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even though the right so to vote has been suspended by the happening of such a contingency.

“ Working Capital Amount ” shall mean, as of any day, the sum of (a) 80% of Eligible Receivables, plus (b) 80% of total Advances on Tobacco, plus (c) 90% of Committed Inventories constituting Eligible Inventory, plus (d) 60% of Uncommitted Inventories constituting Eligible Inventory, in each case as set forth in the most recent Working Capital Amount Certificate delivered to the Administrative Agent and the Lenders in accordance with the terms of Section 5.2(c) .

“ Working Capital Amount Certificate ” shall have the meaning set forth in Section 5.2(c) .

“ Zimbabwe Subsidiaries ” shall mean any Subsidiaries (so long as they remain Subsidiaries) that (x) are organized in Zimbabwe and (y) have been, and for so long as they continue to be, deconsolidated from the Company’s consolidated financial statements for the purposes of (and in accordance with) GAAP.

Section 1.2 Other Definitional Provisions . The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be

 

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construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time and (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

Section 1.3 Accounting Terms . Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP applied on a basis consistent with the most recent audited consolidated financial statements of the Company delivered to the Lenders prior to the Effective Date; provided that, for the purposes of calculating the financial covenants set forth in Section 5.9 and the Applicable Percentages, each Zimbabwe Subsidiary shall be treated as if it was a consolidated Subsidiary of the Company in accordance with GAAP (notwithstanding the fact that it is actually deconsolidated for purposes of GAAP); provided further that, if the Administrative Borrower notifies the Administrative Agent that it wishes to amend any covenant in Section 5.9 or any financial term as used in the definition of Applicable Percentages to eliminate the effect of any change in GAAP on the operation of such covenant or financial term (or if the Administrative Agent notifies the Administrative Borrower that the Required Lenders wish to amend Section 5.9 for such purpose), then the Borrowers’ compliance with such covenant or financial term shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrowers and the Required Lenders.

The Administrative Borrower shall deliver to the Administrative Agent and each Lender at the same time as the delivery of any annual or quarterly financial statements given in accordance with the provisions of Section 5.1 , (i) a description in reasonable detail of any material change in the application of accounting principles employed in the preparation of such financial statements from those applied in the most recently preceding quarterly or annual financial statements as to which no objection shall have been made in accordance with the provisions above and (ii) a reasonable estimate of the effect on the financial statements on account of such changes in application.

Section 1.4 Time References . Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

Section 1.5 Execution of Documents . Unless otherwise specified, all Credit Documents and all other certificates executed in connection therewith must be signed by a Responsible Officer; provided that the Assistant Treasurer of the Company may execute Notices of Borrowing and/or Notices of Conversion in conjunction with a Responsible Officer’s execution of the same.

 

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Section 1.6 Dutch Terms . In this Agreement, where it relates to an entity organized under the laws of the Netherlands, a reference to:

 

(a)

a winding-up, administration or dissolution includes an entity organized under the laws of the Netherlands being:

 

(i)

declared bankrupt ( failliet verklaard );

 

(ii)

dissolved ( ontbonden );

 

(b)

a moratorium includes surseance van betaling and granted a moratorium includes surseance verleend ;

 

(c)

a trustee in bankruptcy includes a curator ;

 

(d)

an administrator (or similar person) includes a bewindvoerder ;

 

(e)

a receiver or an administrative receiver does not include a curator or bewindvoerder ; and

 

(f)

an attachment includes a beslag .

ARTICLE II

THE LOANS; AMOUNT AND TERMS

Section 2.1 Revolving Loans .

 

(a)

Revolving Commitment . During the Commitment Period, subject to the terms and conditions hereof, each Revolving Lender severally agrees to make revolving credit loans (“ Revolving Loans ”) to the Borrowers from time to time for the purposes hereinafter set forth; provided , however , that (i) the aggregate principal amount of outstanding Revolving Loans and Swingline Loans made to the Company plus the outstanding Company LOC Obligations shall not exceed $200,000,000 at any time outstanding, (ii) no Revolving Loans shall be made if after incurrence of such Revolving Loans (but after giving effect to the expected uses of the proceeds thereof within 2 Business Days of the respective Revolving Loans for purposes other than investing in Cash Equivalents) there will be more than $150,000,000 of unrestricted cash and Cash Equivalents in the aggregate on the consolidated balance sheet of the Company and its Subsidiaries; provided that in making calculations pursuant to this clause (ii), the Company may disregard changes in the consolidated balances of cash and Cash Equivalents of the Company and its Subsidiaries to the extent the Company is not actually aware of a material increase in such balances during the period beginning 24 hours before the time the respective Notice of Borrowing for such respective Revolving Loans is required to be delivered and ending on (but including) the date on which such respective Revolving Loans are

 

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to be made, (iii) with regard to each Revolving Lender individually, the sum of such Revolving Lender’s Revolving Commitment Percentage of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall not exceed such Revolving Lender’s Revolving Commitment and (iv) with regard to the Revolving Lenders collectively, the sum of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loan plus outstanding LOC Obligations shall not exceed the lesser of (A) the Revolving Committed Amount and (B) the Working Capital Amount. For purposes hereof, the aggregate amount of Revolving Loans available hereunder shall be TWO HUNDRED AND SEVENTY MILLION DOLLARS ($270,000,000) (as reduced from time to time in accordance with the terms of Section 2.5 or increased from time to time in accordance with the terms of Section 2.23, the “ Revolving Committed Amount ”). Revolving Loans may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Administrative Borrower may request, and may be repaid and reborrowed in accordance with the provisions hereof. LIBOR Rate Loans shall be made by each Lender at its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending Office.

 

(b)

Revolving Loan Borrowings .

(i) Notice of Borrowing . The Administrative Borrower shall request a Revolving Loan borrowing by delivering to the Administrative Agent a Notice of Borrowing (or telephone notice promptly confirmed in writing by delivering to the Administrative Agent a Notice of Borrowing, which delivery may be by fax) not later than 11:00 A.M. (New York City time) on the Business Day prior to the date of the requested borrowing in the case of Alternate Base Rate Loans, and on the third Business Day prior to the date of the requested borrowing in the case of LIBOR Rate Loans. Each such Notice of Borrowing shall be irrevocable and shall specify (A) that a Revolving Loan is requested, (B) the date of the requested borrowing (which shall be a Business Day), (C) the aggregate principal amount to be borrowed, (D) whether the borrowing shall be comprised of Alternate Base Rate Loans, LIBOR Rate Loans or a combination thereof, and if LIBOR Rate Loans are requested, the Interest Period(s) therefor and (E) the Borrower requesting such borrowing. If the Administrative Borrower shall fail to specify in any such Notice of Borrowing (I) an applicable Interest Period in the case of a LIBOR Rate Loan, then such notice shall be deemed to be a request for an Interest Period of one month, or (II) the type of Revolving Loan requested, then such notice shall be deemed to be a request for an Alternate Base Rate Loan hereunder. The Administrative Agent shall give notice to each Revolving Lender promptly upon receipt of each Notice of Borrowing, the contents thereof and each such Revolving Lender’s share thereof.

 

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(ii) Minimum Amounts . Each Revolving Loan borrowing shall be in a minimum aggregate principal amount of (A) with respect to LIBOR Rate Loans, $3,000,000 and integral multiples of $1,000,000 in excess thereof (or the remaining amount of the Revolving Committed Amount, if less) or (B) with respect to Alternate Base Rate Loans, $1,000,000 and integral multiples of $500,000 in excess thereof (or the remaining amount of the Revolving Committed Amount, if less). More than one borrowing may occur on the same date, but at no time shall there be outstanding more than ten borrowings of LIBOR Rate Loans in the aggregate for all Loans.

(iii) Advances . Each Revolving Lender will make its Revolving Commitment Percentage of each Revolving Loan borrowing available to the Administrative Agent for the account of the Applicable Borrower at the office of the Administrative Agent specified in Section 9.2 , or at such other office as the Administrative Agent may designate in writing, by 1:00 P.M. (New York City time) on the date specified in the applicable Notice of Borrowing in Dollars and in funds immediately available to the Administrative Agent. Such borrowing will then be made available in Dollars to the Applicable Borrower by the Administrative Agent by crediting the account of such Borrower on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Revolving Lenders and in like funds as received by the Administrative Agent; provided that, if, on the date of a borrowing of Revolving Loans (other than a Mandatory Swingline Borrowing), there are outstanding Reimbursement Obligations or Swingline Loans then outstanding with respect to such Borrower, then the proceeds of such borrowing shall be applied, first , to the payment in full of any such outstanding Reimbursement Obligations with respect to Letters of Credit, second , to the payment in full of any such Swingline Loans, and third , to such Borrower as otherwise provided above.

 

(c)

Repayment . The principal amount of all Revolving Loans shall be due and payable in full on the Maturity Date.

 

(d)

Interest . Subject to the provisions of Section 2.7 , Revolving Loans shall bear interest as follows:

(i) Alternate Base Rate Loans . During such periods as Revolving Loans shall be comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan shall bear interest at a per annum rate equal to the sum of the Alternate Base Rate plus the Applicable Percentage; and

 

36

(ii) LIBOR Rate Loans . During such periods as Revolving Loans shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a per annum rate equal to the sum of the LIBOR Rate plus the Applicable Percentage.

(iii) Interest on Revolving Loans shall be payable in arrears on each Interest Payment Date.

 

(e)

Revolving Notes . Each Revolving Lender’s Revolving Commitment shall, if requested by such Revolving Lender, be evidenced by duly executed promissory notes of the Borrowers to such Revolving Lender in substantially the form of Schedule 2.1(e) .

Section 2.2 Swingline Loan Subfacility .

 

(a)

Swingline Commitment . During the Commitment Period, subject to the terms and conditions hereof, the Swingline Lender, in its individual capacity, agrees to make certain revolving credit loans to the Borrowers (each a “ Swingline Loan ” and, collectively, the “ Swingline Loans ”) from time to time for the purposes hereinafter set forth; provided , however , (i) the aggregate amount of Swingline Loans outstanding at any time shall not exceed FORTY MILLION DOLLARS ($40,000,000) (the “ Swingline Committed Amount ”), (ii) the aggregate principal amount of outstanding Revolving Loans and Swingline Loans made to the Company plus the outstanding Company LOC Obligations shall not exceed $200,000,000 at any time outstanding, and (iii) the sum of the aggregate amount of outstanding Revolving Loans plus Swingline Loans plus LOC Obligations shall not exceed the lesser of (A) the Revolving Committed Amount and (B) the Working Capital Amount and (iv) no Swingline Loans shall be made if after incurrence of such Swingline Loans (but after giving effect to the expected uses of the proceeds thereof within 2 Business Days of the respective Swingline Loans for purposes other than investing in Cash Equivalents) there will be more than $150,000,000 of unrestricted cash and Cash Equivalents in the aggregate on the consolidated balance sheet of the Company and its Subsidiaries; provided that in making calculations pursuant to this clause (iv), the Company may disregard changes in the consolidated balances of cash and Cash Equivalents of the Company and its Subsidiaries to the extent the Company is not actually aware of a material increase in such balances during the period beginning 24 hours before the time the respective Notice of Borrowing for such respective Swingline Loans is required to be delivered and ending on (but including) the date on which such respective Swingline Loans are to be made. Notwithstanding anything to the contrary contained in this Section 2.2 , (i) the Swingline Lender shall not be obligated to make any Swingline Loans at a time when a Lender is a Defaulting Lender unless the Swingline Lender has entered into arrangements with one or more Borrowers satisfactory to it and the Administrative Borrower to eliminate the Swingline Lender’s risk with respect to each Defaulting Lender’s participation in such Swingline Loans (which arrangements are hereby consented to by the Lenders), including by a Borrower cash collateralizing such Defaulting Lender’s Revolving Commitment Percentage of the outstanding Swingline Loans (such arrangements, the “ Swingline Back-Stop Arrangements ”), and (ii) the Swingline Lender shall not make any Swingline Loan after it has received written notice from the Administrative Borrower, or the Required Lenders stating that a Default or an Event of Default exists and is continuing until such time as the Swingline Lender shall have received written notice (A) of rescission of all such notices from the party or parties originally delivering such notice or notices or (B) of the waiver of such Default or Event of Default by the Required Lenders.

 

37

(b)

Swingline Loan Borrowings .

(i) Notice of Borrowing and Disbursement . The Administrative Borrower shall request a Swingline Loan borrowing by delivering to the Administrative Agent a Notice of Borrowing (or telephone notice promptly confirmed in writing by delivering to the Administrative Agent a Notice of Borrowing, which delivery may be by fax) not later than 12:00 Noon (New York City time) on the date of the requested borrowing. Each such Notice of Borrowing shall be irrevocable and shall specify (A) that a Swingline Loan is requested, (B) the date of the requested borrowing (which shall be a Business Day), (C) the aggregate principal amount to be borrowed and (D) the Borrower requesting such borrowing. The Administrative Agent shall give notice to the Swingline Lender promptly upon receipt of each Notice of Borrowing and the contents thereof. Swingline Loan borrowings hereunder shall be made in minimum amounts of $100,000 and in integral amounts of $100,000 in excess thereof.

(ii) Repayment of Swingline Loans . The principal amount of all Swingline Loans shall be due and payable in full on the Maturity Date. The Swingline Lender may, at any time, in its sole discretion, by written notice to the Administrative Borrower and the Administrative Agent, demand repayment of its Swingline Loans by way of a Revolving Loan borrowing, in which case the Applicable Borrower or Applicable Borrowers shall be deemed to have requested a Revolving Loan borrowing comprised entirely of Alternate Base Rate Loans in the amount of such Swingline Loans; provided , however , that any such demand shall also be deemed to have been

 

38

given one (1) Business Day prior to each of the following: (i) the Maturity Date, (ii) the occurrence of any Event of Default described in Section 7.1(e) , (iii) the acceleration of the Credit Party Obligations hereunder, whether on account of an Event of Default described in Section 7.1(e) or any other Event of Default and (iv) the exercise of remedies in accordance with the provisions of Section 7.2 hereof (each such Revolving Loan borrowing made on account of any such deemed request therefor as provided herein being hereinafter referred to as a “ Mandatory Swingline Borrowing ”). The Administrative Agent shall give notice to each Revolving Lender promptly upon receipt from the Swingline Lender of demand for repayment of its Swingline Loans and upon any deemed request for repayment through a Mandatory Swingline Borrowing. Each Revolving Lender hereby irrevocably agrees to fund its Revolving Commitment Percentage of each such Revolving Loan on the date such notification is received if such notification is received by such Revolving Lender at or before 12:00 Noon (New York City time), otherwise such payment shall be made at or before 12:00 Noon (New York City time) on the next succeeding Business Day, in each case notwithstanding (I) the amount of such Revolving Loan may not comply with the minimum amount for borrowings of Revolving Loans otherwise required hereunder, (II) whether any conditions specified in Section 4.2 are then satisfied, (III) whether a Default or an Event of Default then exists, (IV) failure of any such request or deemed request for a Revolving Loan to be made by the time otherwise required in Section 2.1(b)(i) , (V) the date of such Revolving Loan borrowing, or (VI) any reduction in the Revolving Committed Amount or termination of the Revolving Commitments immediately prior to such Revolving Loan borrowing or contemporaneously therewith. In the event that any Mandatory Swingline Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code with respect to a Borrower), then each Revolving Lender hereby agrees that it shall forthwith purchase (as of the date the Mandatory Swingline Borrowing would otherwise have occurred, but adjusted for any payments received from the Applicable Borrower on or after such date and prior to such purchase) from the Swingline Lender such Participation Interest in the outstanding Swingline Loans as shall be necessary to cause each such Revolving Lender to share in such Swingline Loans ratably based upon its respective Revolving Commitment Percentage (determined before giving effect to any termination of the

 

39

Revolving Commitments pursuant to Section 7.2 ); provided that (A) all interest payable on the Swingline Loans shall be for the account of the Swingline Lender until the date as of which the respective Participation Interest is purchased, and (B) at the time any purchase of a Participation Interest pursuant to this sentence is actually made, the purchasing Revolving Lender shall be required to pay to the Swingline Lender interest on the principal amount of such Participation Interest purchased for each day from and including the day upon which the Mandatory Swingline Borrowing would otherwise have occurred to but excluding the date of payment for such Participation Interest, at the rate equal to, if paid within two (2) Business Days of the date of the Mandatory Swingline Borrowing, the Federal Funds Effective Rate, and thereafter at a rate equal to the Alternate Base Rate.

 

(c)

Interest on Swingline Loans . Subject to the provisions of Section 2.7 , Swingline Loans shall bear interest at a per annum rate equal to the Alternate Base Rate plus the Applicable Percentage for Revolving Loans that are Alternate Base Rate Loans. Interest on Swingline Loans shall be payable in arrears on each Interest Payment Date or as may be mutually agreed upon by the Borrowers and the Swingline Lender.

 

(d)

Swingline Note . The Swingline Loans shall be evidenced by duly executed promissory notes of the Borrowers to the Swingline Lender in the original amount of the Swingline Committed Amount and substantially in the form of Schedule 2.2(d) .

Section 2.3 Letter of Credit Subfacility .

 

(a)

Issuance . Subject to the terms and conditions hereof and any other terms and conditions which an Issuing Lender may reasonably require, during the Commitment Period such Issuing Lender shall issue (in the case of trade Letters of Credit, subject to the Issuing Lender of such respective Letter of Credit and the Applicable Borrower agreeing on Trade Fronting Fees to be payable with respect thereto), and the Revolving Lenders shall participate in, trade or standby Letters of Credit for the account of the Applicable Borrower from time to time upon request by the Administrative Borrower in a form acceptable to such Issuing Lender; provided , however , that (i) the aggregate amount of LOC Obligations shall not at any time exceed FORTY MILLION DOLLARS ($40,000,000) (the “ LOC Committed Amount ”), (ii) the aggregate principal amount of outstanding Revolving Loans and Swingline Loans made to the Company plus the outstanding Company LOC Obligations shall not exceed $200,000,000 at any time outstanding, (iii) the sum of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall not at any time exceed the lesser of (A) the Revolving Committed Amount and (B) the Working Capital Amount, (iv) all Letters of Credit shall be denominated in Dollars

 

40

and shall be issued on a sight basis only and (v) Letters of Credit shall be issued for any lawful corporate purposes of the Applicable Borrower and its Subsidiaries and may be issued as standby letters of credit, including in connection with workers’ compensation and other insurance programs, and trade letters of credit. Except as otherwise agreed upon by all the Revolving Lenders, no Letter of Credit shall have an original expiry date more than twelve (12) months from the date of issuance; provided , however , so long as no Default or Event of Default has occurred and is continuing and subject to the other terms and conditions of the issuance of Letters of Credit hereunder, the expiry dates of Letters of Credit may be extended annually or periodically from time to time on the request of the Administrative Borrower or by operation of the terms of the applicable Letter of Credit to a date not more than twelve (12) months from the date of extension; provided , further , that no Letter of Credit, as originally issued or as extended, shall have an expiry date extending beyond the date which is five (5) Business Days prior to the Maturity Date. The issuance and expiry date of each Letter of Credit shall be a Business Day. Notwithstanding anything to the contrary contained in this Agreement, in the event that a Lender is a Defaulting Lender, no Issuing Lender shall be required to issue, renew, extend or amend any Letter of Credit, unless such Issuing Lender has entered into arrangements with one or more Borrowers satisfactory to it and the Administrative Borrower to eliminate such Issuing Lender’s risk with respect to each Defaulting Lender’s participation in Letters of Credit issued by such Issuing Lender (which arrangements are hereby consented to by the Lenders), including by a Borrower cash collateralizing each Defaulting Lender’s Revolving Commitment Percentage of the LOC Obligations with respect to such Letters of Credit (such arrangements, the “ Letter of Credit Back-Stop Arrangements ”). Unless otherwise agreed, Deutsche Bank shall be the Issuing Lender on all Letters of Credit issued on or after the Effective Date; provided , however , to the extent Deutsche Bank (or an affiliate therof) shall be unable to provide any Letter of Credit requested by a Borrower, any other Issuing Lender may serve as the Issuing Lender for such Letter of Credit.

 

(b)

Notice and Reports . The request for the issuance of a Letter of Credit shall be submitted by the Administrative Borrower to an Issuing Lender at least five (5) Business Days prior to the requested date of issuance pursuant to a Letter of Credit Request or other form of request acceptable to such Issuing Lender. The initial face amount of each Letter of Credit shall not be less than $100,000 or such lesser amount as is acceptable to the respective Issuing Lender. Each Issuing Lender will provide on a quarterly basis, and otherwise will promptly upon request provide, to the Administrative Agent for dissemination to the Revolving Lenders a detailed report specifying the Letters of Credit which are then issued by such Issuing Lender and outstanding and any activity with respect thereto which

 

41

may have occurred since the date of any prior report, and including therein, among other things, the account party, the beneficiary, the face amount, expiry date as well as any payments or expirations which may have occurred. Each Issuing Lender will further provide to the Administrative Agent promptly upon request copies of the Letters of Credit issued by such Issuing Lender. Each Issuing Lender will provide to the Administrative Agent promptly upon request a summary report of the nature and extent of LOC Obligations with respect to the Letters of Credit issued by such Issuing Lender then outstanding.

 

(c)

Participations . Each Revolving Lender upon issuance of any Letter of Credit by an Issuing Lender, shall be deemed to have purchased without recourse a risk participation from such Issuing Lender in such Letter of Credit and the amount available to be drawn thereunder and any collateral relating thereto, in each case in an amount equal to its Revolving Commitment Percentage of the amount available to be drawn under such Letter of Credit and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to such Issuing Lender therefor and discharge when due, its Revolving Commitment Percentage of the amounts drawn under such Letter of Credit; provided that any Person that becomes a Revolving Lender after the Effective Date shall be deemed to have purchased a risk participation in all outstanding Letters of Credit on the date it becomes a Revolving Lender hereunder and any Letter of Credit issued on or after such date, in each case in accordance with the foregoing terms. Without limiting the scope and nature of each Revolving Lender’s participation in any Letter of Credit, to the extent that an Issuing Lender has not been reimbursed as required hereunder, each such Revolving Lender shall pay to such Issuing Lender its Revolving Commitment Percentage of such unreimbursed drawing in same day funds on the day of notification by such Issuing Lender of an unreimbursed drawing pursuant to the provisions of subsection (d) hereof if such notification is received by such Revolving Lender at or before 12:00 Noon (New York City time), otherwise such payment shall be made at or before 12:00 Noon (New York City time) on the next succeeding Business Day. The obligation of each Revolving Lender to so reimburse each Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of a Default, an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of the Applicable Borrower to reimburse each Issuing Lender under any Letter of Credit issued by such Issuing Lender, together with interest as hereinafter provided.

 

(d)

Reimbursement . In the event of any drawing under any Letter of Credit, the Issuing Lender of such Letter of Credit will promptly notify the Administrative Borrower and the Administrative Agent, provided that the failure to give any such notice shall in no way affect, impair or diminish the Applicable Borrower’s obligations hereunder. The

 

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Applicable Borrower shall reimburse each Issuing Lender not later than one Business Day following receipt by the Applicable Borrower of notice of such payment or disbursement (with the proceeds of a Revolving Loan obtained hereunder or otherwise) in same day funds as provided herein ( provided that no such notice shall be required to be given if a Default or an Event of Default under Section 7.1(e) shall have occurred and be continuing, in which case the Reimbursement Obligations shall be due and payable immediately without presentment, demand, protest or notice of any kind (all of which are hereby waived by the Applicable Borrower)), with interest on the amount so paid or disbursed by such Issuing Lender, to the extent not reimbursed prior to 12:00 Noon (New York City time) on the date of such payment or disbursement, from and including the date paid or disbursed to but excluding the date such Issuing Lender was reimbursed by the Applicable Borrower therefor at a rate per annum equal to, subject to the immediately succeeding sentence the Alternate Base Rate as in effect from time to time plus the Applicable Percentage as in effect from time to time for Revolving Loans that are maintained as Alternate Base Rate Loans. If the Applicable Borrower shall fail to reimburse the Issuing Lender prior 12:00 Noon (New York City time) on or before the second Business Day following the receipt by the Applicable Borrower of notice of such payment or disbursement or following the occurrence of a Default or an Event of Default under Section 7.1(e) , the unreimbursed amount of such drawing shall bear interest at a per annum rate equal to the Default Rate for Alternate Base Rate Loans set forth in Section 2.7 . Any such Reimbursement Obligation shall be deemed satisfied (but nevertheless subject to the payment of interest thereon as provided herein below) if paid in full with proceeds from a Mandatory LOC Borrowing. Unless the Administrative Borrower shall immediately notify the respective Issuing Lender and the Administrative Agent of the Applicable Borrower’s intent to otherwise reimburse such Issuing Lender, the Applicable Borrower shall be deemed to have requested a Mandatory LOC Borrowing in the amount of the drawing as provided in subsection (e) hereof, the proceeds of which will be used to satisfy the Reimbursement Obligations. The Applicable Borrower’s Reimbursement Obligations hereunder shall be absolute and unconditional under all circumstances irrespective of any rights of set-off, counterclaim or defense to payment the Applicable Borrower may claim or have against the applicable Issuing Lender, the Administrative Agent, the Revolving Lenders, the beneficiary of the Letter of Credit issued by such Issuing Lender drawn upon or any other Person, including, without limitation, any defense based on any failure of the Applicable Borrower to receive consideration or the legality, validity, regularity or unenforceability of the Letter of Credit issued by such Issuing Lender. Each Issuing Lender will promptly notify the other Revolving Lenders of the amount of any unreimbursed drawing not paid by the Applicable Borrower when due and each Revolving Lender shall promptly pay to the Administrative

 

43

Agent for the account of such Issuing Lender in Dollars and in immediately available funds, the amount of such Revolving Lender’s Revolving Commitment Percentage of such unreimbursed drawing. Such payment shall be made on the day such notice is received by such Revolving Lender from the applicable Issuing Lender if such notice is received at or before 12:00 Noon (New York City time), otherwise such payment shall be made at or before 12:00 Noon (New York City time) on the Business Day next succeeding the day such notice is received. If such Revolving Lender does not pay such amount to the applicable Issuing Lender in full upon such request, such Revolving Lender shall, on demand, pay to the Administrative Agent for the account of such Issuing Lender interest on the unpaid amount during the period from the date of such drawing until such Revolving Lender pays such amount to such Issuing Lender in full at a rate per annum equal to, if paid within two (2) Business Days of the date of drawing, the Federal Funds Effective Rate and thereafter at a rate equal to the Alternate Base Rate. Each Revolving Lender’s obligation to make such payment to the applicable Issuing Lender, and the right of such Issuing Lender to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and without regard to the termination of this Credit Agreement or the Revolving Commitments hereunder, the existence of a Default or Event of Default or the acceleration of the Credit Party Obligations hereunder and shall be made without any offset, abatement, withholding or reduction whatsoever.

 

(e)

Repayment with Revolving Loans . On any day on which a Borrower shall have requested, or been deemed to have requested, a Revolving Loan to reimburse a drawing under a Letter of Credit, the Administrative Agent shall give notice to the Revolving Lenders that a Revolving Loan has been requested or deemed requested in connection with a drawing under a Letter of Credit, in which case a Revolving Loan borrowing comprised entirely of Alternate Base Rate Loans (each such borrowing, a “ Mandatory LOC Borrowing ”) shall be immediately made (without giving effect to any termination of the Revolving Commitments pursuant to Section 7.2 ) pro rata based on each Revolving Lender’s respective Revolving Commitment Percentage (determined before giving effect to any termination of the Revolving Commitments pursuant to Section 7.2 ) and the proceeds of such Mandatory LOC Borrowing shall be paid directly to the Issuing Lender of such drawn Letter of Credit for application to the respective LOC Obligations. Each Revolving Lender hereby irrevocably agrees to make such Revolving Loans on the day such notice is received by the Revolving Lenders from the Administrative Agent if such notice is received at or before 12:00 Noon (New York City time), otherwise such payment shall be made at or before 12:00 Noon (New York City time) on the Business Day next succeeding the day such notice is received, in each case notwithstanding (i) the amount of Mandatory LOC Borrowing may not comply with the minimum amount (or integral amount in excess thereof) for

 

44

borrowings of Revolving Loans otherwise required hereunder, (ii) whether any conditions specified in Section 4.2 are then satisfied, (iii) whether a Default or an Event of Default then exists, (iv) failure of any such request or deemed request for Revolving Loan to be made by the time otherwise required in Section 2.1(b)(i) , (v) the date of such Mandatory LOC Borrowing, or (vi) any reduction in the Revolving Committed Amount after any such Letter of Credit may have been drawn upon. In the event that any Mandatory LOC Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Event), then, in satisfaction of its obligations under Section 2.3(c) , each such Revolving Lender hereby agrees that it shall forthwith fund (on the Business Day notice to fund is received by such Revolving Lender from the Issuing Lender of such drawn Letter of Credit if such notice is received at or before 12:00 Noon (New York City time), otherwise such payment shall be made at or before 12:00 Noon (New York City time) on the Business Day next succeeding the Business Day such notice is received) its Participation Interests in the outstanding LOC Obligations; provided , further , that in the event any Revolving Lender shall fail to fund its Participation Interest on the day the Mandatory LOC Borrowing would otherwise have occurred, then the amount of such Revolving Lender’s unfunded Participation Interest therein shall bear interest payable by such Revolving Lender to such Issuing Lender upon demand, at the rate equal to, if paid within two (2) Business Days of such date, the Federal Funds Effective Rate, and thereafter at a rate equal to the Alternate Base Rate.

 

(f)

Modification, Extension . The issuance of any supplement, modification, amendment, renewal, or extension to any Letter of Credit shall, for purposes hereof, be treated in all respects the same as the issuance of a new Letter of Credit hereunder.

 

(g)

Uniform Customs and Practices . Each Issuing Lender shall have the right to require that the Letters of Credit issued by such Issuing Lender be subject to The Uniform Customs and Practice for Documentary Credits, as published as of the date of issue by the International Chamber of Commerce (the “ UCP ”), in which case the UCP may be incorporated therein and deemed in all respects to be a part thereof.

Section 2.4 Fees .

 

(a)

Commitment Fee . The Borrowers agree to pay to the Administrative Agent for the ratable benefit of each Revolving Lender (other than any Revolving Lender which is a Defaulting Lender for the period it is a Defaulting Lender), a commitment fee (it being understood that 50% of such commitment fees shall be severally owing by each Borrower, with the amounts owing by each Borrower to be guaranteed as, and to the extent, otherwise provided herein) for the

 

45

period from and including the Effective Date to and including the Maturity Date (or such earlier date on which the entire Revolving Commitment has been terminated) (the “ Commitment Fee ”) in an aggregate amount equal to the Applicable Percentage per annum of the Unutilized Revolving Loan Commitment Amount of such Revolving Lender as in effect from time to time. The Commitment Fee shall be payable quarterly in arrears on the 15th day following the last day of each calendar quarter for the prior calendar quarter.

 

(b)

Letter of Credit Fees . The Applicable Borrower agrees to pay to the Administrative Agent, for the ratable benefit of each Revolving Lender (based on each such Revolving Lender’s respective Revolving Commitment Percentage) in respect of each Letter of Credit issued for the account of such Applicable Borrower, a fee (the “ Letter of Credit Fee ”) for the period from and including the date of issuance of such Letter of Credit to and including the date of termination or expiration of such Letter of Credit, computed at a rate per annum equal to the Applicable Percentage as in effect from time to time during such period with respect to Revolving Loans that are maintained as LIBOR Rate Loans on the daily LOC Obligations of each such Letter of Credit. In addition to such Letter of Credit Fee, the Applicable Borrower agrees to pay to each Issuing Lender, for its own account without sharing by the other Lenders, (x) in respect of each standby Letter of Credit issued by it for the account of such Applicable Borrower, an additional fronting fee (the “ Standby Fronting Fee ”) for the period from and including the date of issuance of such standby Letter of Credit to and including the date of termination or expiration of such standby Letter of Credit, computed at a rate per annum equal to  1 / 4 of 1% (0.25%) per annum on the daily LOC Obligations of such Letter of Credit, provided that in any event the minimum amount of Standby Fronting Fees payable in any twelve-month period for each Letter of Credit shall be not less than $500, it being agreed that, on the day of issuance of any Letter of Credit and on each anniversary thereof prior to the termination or expiration of such Letter of Credit, if $500 will exceed the amount of Standby Fronting Fees that will accrue with respect to such Letter of Credit for the immediately succeeding twelve-month period, the full $500 shall be payable on the date of issuance of such Letter of Credit and on each such anniversary thereof and (y) in respect of each trade Letter of Credit issued by it for the account of such Applicable Borrower, an additional fronting fee (the “ Trade Fronting Fee ” and together with the Standby Fronting Fee, the “ Fronting Fees ”) as shall be agreed to in writing from time to time by the Applicable Borrowers and such Issuing Lender. The Letter of Credit Fee and the Fronting Fees shall each be payable quarterly in arrears on the last Business Day of each calendar quarter.

 

(c)

Issuing Lender Fees . In addition to the Letter of Credit Fees and Fronting Fees payable pursuant to subsection (b) hereof, the Applicable Borrower shall pay to each Issuing Lender, for its own account without sharing by the

 

46

other Lenders, the reasonable and customary charges from time to time of such Issuing Lender with respect to the amendment, transfer, administration, cancellation and conversion of, and drawings under, the Letters of Credit issued by such Issuing Lender for the account of such Borrower (collectively, the “ Issuing Lender Fees ”).

 

(d)

Administrative Fee . Each Borrower agrees to pay to the Administrative Agent 50% of the annual administrative fee as described in the Fee Letter.

 

(e)

Each Borrower agrees to pay to the Administrative Agent such other fees as may be agreed to in writing from time to time by the Company or any of its Subsidiaries and the Administrative Agent.

Section 2.5 Commitment Reductions .

 

(a)

Voluntary Reductions . The Administrative Borrower shall have the right to terminate or permanently reduce the unused portion of the Revolving Committed Amount at any time or from time to time upon not less than five (5) Business Days’ prior notice to the Administrative Agent (which shall notify the Lenders thereof as soon as practicable) of each such termination or reduction, which notice shall specify the effective date thereof and the amount of any such reduction which shall be in a minimum amount of $10,000,000 or a whole multiple of $1,000,000 in excess thereof and shall be irrevocable and effective upon receipt by the Administrative Agent; provided that no such reduction or termination shall be permitted if after giving effect thereto, and to any prepayments of the Revolving Loans made on the effective date thereof, the sum of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding LOC Obligations would exceed the lesser of (i) the Revolving Committed Amount or (ii) the Working Capital Amount.

 

(b)

Maturity Date . The Revolving Commitment shall automatically terminate on the Maturity Date.

 

(c)

Senior Notes and Permitted Refinancings thereof . In addition to any Revolving Commitment reductions described above and any mandatory repayments required pursuant to Section 2.6(b), if at any time, because of an Asset Sale, Recovery Event or similar occurrence, the Company would become required to make a mandatory offer to purchase all or any portion of the Senior Notes or any permitted refinancing thereof pursuant to Section 6.1(h) and at such time the Company is not permitted to repurchase or redeem Senior Notes pursuant to Section 6.10 in the aggregate amount required to finance the repurchase or redemption of Senior Notes as a result of such occurrence (assuming for such purposes 100% acceptance of such mandatory offer by the holders of the Senior Notes), then before such

 

47

obligation to make any mandatory offer to purchase arises, the Company shall reduce the Revolving Commitment in such amounts, and make corresponding repayments of outstanding Loans as may be required, in each case so that no such mandatory offer to repurchase is required to be made.

Section 2.6 Prepayments .

 

(a)

Optional Prepayments . Each Borrower shall have the right to prepay Loans made to it in whole or in part from time to time; provided , however , that (i) each partial prepayment of Revolving Loans shall be in a minimum principal amount of $1,000,000 and integral multiples of $500,000 in excess thereof and (ii) each prepayment of Swingline Loans shall be in a minimum principal amount of $100,000 and integral multiples of $100,000 in excess thereof. The Administrative Borrower shall give three (3) Business Days’ irrevocable notice in the case of LIBOR Rate Loans and one (1) Business Day’s irrevocable notice in the case of Alternate Base Rate Loans, to the Administrative Agent (which shall notify the Lenders thereof as soon as practicable). All prepayments under this Section 2.6(a) shall be subject to Section 2.16 , but otherwise without premium or penalty. Interest accrued through the date of prepayment on the principal amount prepaid shall be payable (A) with respect to any LIBOR Rate Loan, on such date of prepayment and (B) with respect to any Alternate Base Rate Loan, on the next occurring Interest Payment Date that would have occurred had such Loan not been prepaid or, at the request of the Administrative Agent or if there is a corresponding permanent reduction of the Revolving Commitment, such interest shall be payable on such date of prepayment. Amounts prepaid on the Revolving Loans and Swingline Loans may be reborrowed in accordance with the terms hereof. All amounts prepaid pursuant to this Section 2.6(a) shall be applied first to Alternate Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period maturities; provided that at such Borrower’s election in connection with any prepayment of Revolving Loans pursuant to this Section 2.6(a) , such prepayment shall not, so long as no Default and no Event of Default then exists, be applied to any Revolving Loan of a Defaulting Lender.

 

(b)

Mandatory Prepayments .

(i) Revolving Committed Amount . (A) If at any time after the Effective Date, the sum of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus LOC Obligations shall exceed the lesser of (I) the Revolving Committed Amount or (II) the Working Capital Amount, each Borrower, immediately shall prepay its Revolving Loans and the Swingline Loans in an amount sufficient to eliminate such excess or (B) if the amount of unrestricted cash and Cash Equivalents in the aggregate on the

 

48

consolidated balance sheet of the Company and its Subsidiaries exceeds $150,000,000 for a period of 7 consecutive Business Days, each Borrower immediately shall prepay on such day (x) first, its outstanding Swingline Loans and, (y) second, after all of its Swingline Loans have been repaid in full or if none of its Swingline Loans are outstanding, its outstanding Revolving Loans, in an amount sufficient to eliminate such excess. Each Revolving Lender shall receive its pro rata share of any such prepayment based on its Revolving Commitment Percentage; provided that at such Borrower’s election in connection with any prepayment of Revolving Loans pursuant to this Section 2.6(b)(i) (other than a prepayment pursuant to Section 2.6(b)(i)(A) to the extent clause (I) thereof would require such prepayment), such prepayment shall not, so long as no Default and no Event of Default then exists, be applied to any Revolving Loan of a Defaulting Lender.

(ii) Asset Dispositions . Promptly following the receipt by a Credit Party or any of its Subsidiaries of the proceeds of any Asset Disposition, the Loans shall be prepaid in an aggregate amount equal to one hundred percent (100%) of the Net Cash Proceeds derived from such Asset Disposition (such prepayment to be applied as set forth in clause (v) below); provided that the Net Cash Proceeds from Asset Dispositions in any fiscal year shall not be required to be so applied until the aggregate amount of such Net Cash Proceeds exceeds $10,000,000 for such fiscal year and only such excess amounts shall be required to be applied.

(iii) Recovery Event . Promptly following any Recovery Event, the Loans shall be prepaid in an aggregate amount equal to one-hundred percent (100%) of the Net Cash Proceeds derived from such Recovery Event (such prepayment to be applied as set forth in clause (v) below); provided that the Net Cash Proceeds from Recovery Events in any fiscal year shall not be required to be so applied until the aggregate amount of such Net Cash Proceeds exceeds $10,000,000 for such fiscal year and only such excess amounts shall be required to be applied.

(iv) Certain Additional Required Repayments . In addition to the mandatory repayments required above, mandatory prepayments of Loans shall be required on the dates, and in the amounts, provided in Section 2.5(c) (such prepayment to be applied as set forth in clause (v) below).

(v) Application of Mandatory Prepayments . All amounts required to be paid pursuant to Section 2.6(b)(ii), Section 2.6(b)(iii) and Section 2.6(b)(iv) shall be applied on such day (x) first, to the outstanding Swingline

 

49

Loans and, (y) second, after all of the Swingline Loans have been repaid in full or if none of the Swingline Loans are outstanding, the outstanding Revolving Loans, in each case (except as otherwise required pursuant to Section 2.5(c) in the circumstances described therein), without a corresponding reduction in the Revolving Commitments or the Revolving Committed Amount. Within the parameters of the applications set forth above, prepayments shall be applied first to Alternate Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period maturities. Each Lender shall receive its pro rata share of any such prepayment based on its applicable Revolving Commitment Percentage; provided that at such Borrower’s election in connection with any prepayment of Revolving Loans pursuant to Section 2.6(b)(ii) or Section 2.6(b)(iii), such prepayment shall not, so long as no Default and no Event of Default then exists, be applied to any Revolving Loan of a Defaulting Lender. All prepayments under this Section 2.6(b) shall be subject to Section 2.16.

(c) If any Revolving Lender becomes a Defaulting Lender at any time that any Letter of Credit issued by any Issuing Lender is outstanding, the Applicable Borrower on which account such Letters of Credit are issued shall enter into the applicable Letter of Credit Back-Stop Arrangements with such Issuing Lender no later than 10 Business Days after the date such Revolving Lender becomes a Defaulting Lender.

Section 2.7 Default Rate and Payment Dates . Upon the occurrence, and during the continuance, of an Event of Default, the Required Lenders may elect that the principal of and, to the extent permitted by law, interest on the Loans and any other amounts owing hereunder or under the other Credit Documents shall bear interest, payable on demand, at a per annum rate 2% greater than the rate which would otherwise be applicable (or if no rate is applicable, whether in respect of interest, fees or other amounts, then the Alternate Base Rate plus the highest Applicable Percentage (Level I) plus 2%) (the “ Default Rate ”); provided , however , that the Default Rate shall apply to the Loans and other amounts owing hereunder and under the other Credit Documents to the extent that either Borrower shall fail to pay any principal, reimbursement obligation, interest, fee or other amount upon the same becoming due and payable (whether at the stated maturity, by acceleration or otherwise).

Section 2.8 Conversion Options .

 

(a)

The Administrative Borrower may, in the case of Revolving Loans, elect from time to time to convert Alternate Base Rate Loans to LIBOR Rate Loans, by giving the Administrative Agent irrevocable written notice of such election not later than 11:00 A.M. (New York City time) on the date which is three Business Days prior to the requested date of conversion. A form of Notice of Conversion/Extension is attached as Schedule 2.8 . If the date upon which an Alternate Base Rate Loan is to be converted to a LIBOR Rate Loan is not a Business Day, then such conversion shall be made on the next succeeding Business Day and during the period from such last day of an

 

50

Interest Period to such succeeding Business Day such Loan shall bear interest as if it were an Alternate Base Rate Loan. All or any part of outstanding Alternate Base Rate Loans may be converted as provided herein, provided that (i) no Loan may be converted into a LIBOR Rate Loan when any Default or Event of Default has occurred and is continuing and (ii) partial conversions shall be in an aggregate principal amount of $3,000,000 or a whole multiple of $1,000,000 in excess thereof.

 

(b)

Any LIBOR Rate Loans may be continued as such upon the expiration of an Interest Period with respect thereto by the Administrative Borrower giving the Administrative Agent irrevocable written notice of such election not later than 11:00 A.M. (New York City time) on the date which is three Business Days prior to the requested date of continuation; provided , that no LIBOR Rate Loan may be continued as such when any Default or Event of Default has occurred and is continuing, in which case such Loan shall be automatically converted to an Alternate Base Rate Loan at the end of the applicable Interest Period with respect thereto. If the Administrative Borrower shall fail to give timely notice of an election to continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not permitted hereunder, such LIBOR Rate Loans shall be automatically converted to Alternate Base Rate Loans at the end of the applicable Interest Period with respect thereto.

Section 2.9 Computation of Interest and Fees .

 

(a)

Interest payable hereunder with respect to Alternate Base Rate Loans based on the Prime Rate shall be calculated on the basis of a year of 365 days (or 366 days, as applicable) for the actual days elapsed. All other fees, interest and all other amounts payable hereunder shall be calculated on the basis of a 360 day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Administrative Borrower and the Lenders of each determination of a LIBOR Rate on the Business Day of the determination thereof. Any change in the interest rate on a Loan resulting from a change in the Alternate Base Rate shall become effective as of the opening of business on the day on which such change in the Alternate Base Rate shall become effective. The Administrative Agent shall as soon as practicable notify the Administrative Borrower and the Lenders of the effective date and the amount of each such change.

 

(b)

Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrowers and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of a Borrower, deliver to such Borrower a statement showing the computations used by the Administrative Agent in determining any interest rate.

 

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Section 2.10 Pro Rata Treatment and Payments .

 

(a)

Each borrowing of Loans and any reduction of the Revolving Commitments shall be made pro rata according to the respective Revolving Commitment Percentages of the Lenders. Each payment under this Agreement or any Note made by an Applicable Borrower shall be applied, first , to any fees then due and owing by such Borrower pursuant to Section 2.4 , second , to interest then due and owing in respect of its Loans and, third , to principal then due and owing in respect of its Loans. Each payment made by an Applicable Borrower on account of any fees pursuant to Section 2.4 shall be made pro rata in accordance with the respective amounts due and owing by such Borrower. Each payment made by an Applicable Borrower on the principal amount of and interest on its Revolving Loans shall be made pro rata according to the respective amounts due and owing (to be applied pro rata among the Lenders entitled to receive such payment). Each optional prepayment made by an Applicable Borrower on the principal amount of its Loans shall be applied in accordance with the terms of Section 2.6(a) . Each mandatory prepayment made by an Applicable Borrower on the principal amount of its Loans shall be applied in accordance with Section 2.6(b) ; provided , that prepayments made pursuant to Section 2.14 shall be applied in accordance with such Section. All payments (including prepayments) to be made by the Borrowers on account of principal, interest and fees shall be made without defense, set-off or counterclaim and shall be made to the Administrative Agent for the account of the Lenders at the Administrative Agent’s office specified in Section 9.2 in Dollars and in immediately available funds not later than 1:00 P.M. (New York City time) on the date when due. The Administrative Agent shall distribute such payments to the Lenders entitled thereto promptly upon receipt in like funds as received. If any payment hereunder (other than payments on the LIBOR Rate Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and, with respect to payments of principal, interest thereon shall be payable at the then applicable rate during such extension. If any payment on a LIBOR Rate Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. Notwithstanding anything to the contrary contained herein, the provisions of this Section 2.10(a) shall be subject to the express provisions of this Agreement which (i) require, or permit, differing payments to be made to Lenders which are not Defaulting Lenders as opposed to Defaulting Lenders and (ii) permit different payments to be made to Removed Lenders pursuant to Section 2.22(b)(B) .

 

52

(b)

Allocation of Payments After Exercise of Remedies . Notwithstanding any other provisions of this Credit Agreement to the contrary (except Section 2.20 ), after the exercise of remedies (other than the invocation of default interest pursuant to Section 2.7 ) by the Administrative Agent or the Lenders pursuant to Section 7.2 (or after the Revolving Commitments shall automatically terminate and the Loans (with accrued interest thereon) and all other amounts under the Credit Documents shall automatically become due and payable in accordance with the terms of such Section), all amounts collected or received by the Administrative Agent or any Lender on account of the Credit Party Obligations or any other amounts outstanding under any of the Credit Documents or in respect of the Collateral shall be paid over or delivered as follows (irrespective of whether the following costs, expenses, fees, interest, premiums, scheduled periodic payments or Credit Party Obligations are allowed, permitted or recognized as a claim in any proceeding resulting from the occurrence of a Bankruptcy Event):

FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including, without limitation, reasonable attorneys’ fees) of the Administrative Agent in connection with enforcing the rights of the Lenders under the Credit Documents and any protective advances made by the Administrative Agent with respect to the Collateral under or pursuant to the terms of the Security Documents;

SECOND, to payment of any fees owed to the Administrative Agent and the Issuing Lenders;

THIRD, to the payment of all reasonable out-of-pocket costs and expenses (including, without limitation, reasonable attorneys’ fees) of each of the Lenders in connection with enforcing its rights under the Credit Documents or otherwise with respect to the Credit Party Obligations owing to such Lender;

FOURTH, to the payment of all of the Credit Party Obligations consisting of accrued fees and interest, including, with respect to any Secured Hedging Agreement, any fees, premiums and scheduled periodic payments due under such Secured Hedging Agreement and any interest accrued thereon;

FIFTH, to the payment of the outstanding principal amount of the Credit Party Obligations, including the payment or cash collateralization of the outstanding LOC Obligations and, with respect to any Secured Hedging Agreement, any breakage, termination or other payments due under such Secured Hedging Agreement and any interest accrued thereon;

SIXTH, to all other Credit Party Obligations and other obligations which shall have become due and payable under the Credit Documents or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH” above; and

 

53

SEVENTH, to the payment of the surplus, if any, to whomever may be lawfully entitled to receive such surplus.

In carrying out the foregoing, (i) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category; (ii) each of the Lenders and Hedging Agreement Providers shall receive an amount equal to its pro rata share (based on the proportion that the then outstanding Loans and LOC Obligations held by such Lender or the outstanding obligations payable to such Hedging Agreement Provider bears to the aggregate then outstanding Loans, LOC Obligations and obligations payable under all Secured Hedging Agreements) of amounts available to be applied pursuant to clauses “THIRD”, “FOURTH”, “FIFTH” and “SIXTH” above; and (iii) to the extent that any amounts available for distribution pursuant to clause “FIFTH” above are attributable to the issued but undrawn amount of outstanding Letters of Credit, such amounts shall be held by the Administrative Agent in a cash collateral account and applied (A) first, to reimburse the Issuing Lender which issued such Letter of Credit from time to time for any drawings under such Letters of Credit and (B) then, following the expiration of all Letters of Credit, to all other obligations of the types described in clauses “FIFTH” and “SIXTH” above in the manner provided in this Section 2.10(b) . Notwithstanding the foregoing terms of this Section 2.10 , (1) the Administrative Agent shall direct the application of the Collateral proceeds in respect of Collateral of the Company and the Domestic Guarantors and payments by the Company or Domestic Guarantors, as same are applied pursuant to any clauses “FIRST” through “SIXTH” above, same shall be applied within the respective such clause (I) first, to outstanding obligations of Company and its Domestic Subsidiaries (other than in their capacities as guarantors of obligations of the Dutch Borrower or any other Foreign Subsidiary) and (II) second, after all obligations pursuant to the respective clause as described in preceding clause (I) have been repaid in full, ratably among all other obligations of the type otherwise described in the respective such clause, and (2) neither the Dutch Borrower nor Alliance AG shall be required to repay or prepay, or to guarantee, nor shall any amount paid by the Dutch Borrower, Alliance AG or any other Foreign Subsidiary be applied to, direct obligations (excluding obligations as guarantor of the Dutch Borrower or Alliance AG or any other Foreign Subsidiary) of the Company or any of its Domestic Subsidiaries.

Section 2.11 Non-Receipt of Funds by the Administrative Agent .

 

(a)

Funding by Lenders; Presumption by Administrative Agent . Unless the Administrative Agent shall have received written notice from a Lender prior to the proposed date of any Extension of Credit that such Lender will not make available to the Administrative Agent such Lender’s share of such Extension of Credit, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with this Agreement and may, in reliance upon such assumption, make available to the Applicable Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Extension of Credit available to the Administrative Agent, then the applicable Lender and the Applicable Borrower agree to pay to the Administrative Agent forthwith

 

54

on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Applicable Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (ii) in the case of a payment to be made by the Applicable Borrower, the interest rate applicable to Alternate Base Rate Loans. If the Applicable Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Applicable Borrower the amount of such interest paid by the Applicable Borrower for such period. If such Lender pays its share of the applicable Extension of Credit to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Extension of Credit. Any payment by the Applicable Borrower shall be without prejudice to any claim the Applicable Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

 

(b)

Payments by Borrowers; Presumptions by Administrative Agent . Unless the Administrative Agent shall have received notice from the Applicable Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Lenders hereunder that the Applicable Borrower will not make such payment, the Administrative Agent may assume that the Applicable Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Lenders, as the case may be, the amount due. In such event, if the Applicable Borrower has not in fact made such payment, then each of the Lenders or the Issuing Lenders, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or such Issuing Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

A notice of the Administrative Agent to any Lender or the Applicable Borrower with respect to any amount owing under subsections (a) and (b) of this Section shall be conclusive, absent manifest error.

Section 2.12 Failure to Satisfy Conditions Precedent . If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this ARTICLE II, and such funds are not made available to the Applicable Borrower by the Administrative Agent because the conditions to the applicable Extension of Credit set forth in ARTICLE IV are not satisfied or waived in accordance with the terms thereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender.

 

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(a)

Obligations of Lenders Several . The obligations of the Lenders hereunder to make Revolving Loans, to fund participations in Letters of Credit and Swingline Loans and to make payments pursuant to Section 9.7 are several and not joint. The failure of any Lender to make any Loan, to fund any such participation or to make any such payment under Section 9.7 on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 9.7 .

 

(b)

Funding Source . Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

Section 2.13 Inability to Determine Interest Rate . Notwithstanding any other provision of this Agreement, if (i) the Administrative Agent shall reasonably determine (which determination shall be conclusive and binding absent manifest error) that, by reason of circumstances affecting the relevant market, reasonable and adequate means do not exist for ascertaining LIBOR for such Interest Period, or (ii) the Required Lenders shall reasonably determine that the LIBOR Rate does not adequately and fairly reflect the cost to such Lenders of funding LIBOR Rate Loans that the Administrative Borrower has requested be outstanding as a LIBOR Rate Loan during such Interest Period, the Administrative Agent shall forthwith give telephone notice of such determination, confirmed in writing, to the Applicable Borrower and the Lenders at least two (2) Business Days prior to the first day of such Interest Period. Unless the Administrative Borrower shall have notified the Administrative Agent upon receipt of such telephone notice that it wishes to rescind or modify its request regarding such LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate Loans shall be made as Alternate Base Rate Loans and any Loans that were requested to be converted into or continued as LIBOR Rate Loans shall be converted into Alternate Base Rate Loans. Until any such notice has been withdrawn by the Administrative Agent, no further Loans shall be made as, continued as, or converted into, LIBOR Rate Loans for the Interest Periods so affected.

Section 2.14 Illegality . Notwithstanding any other provision of this Agreement, if the adoption of or any change after the date hereof in any Requirement of Law or in the interpretation or application thereof by the relevant Governmental Authority to any Lender shall make it unlawful for such Lender or its LIBOR Lending Office to make or maintain LIBOR Rate Loans as contemplated by this Agreement or to obtain in the interbank eurodollar market through its LIBOR Lending Office the funds with which to make such Loans, (a) such Lender shall promptly notify the Administrative Agent and the Administrative Borrower thereof, (b) the commitment of such Lender hereunder to make LIBOR Rate Loans or continue LIBOR Rate Loans as such shall forthwith be suspended until the Administrative Agent shall give notice that the condition or situation which gave rise to the suspension shall no longer exist, and (c) such Lender’s Loans then outstanding as LIBOR Rate Loans, if any, shall be converted on the last day of the

 

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Interest Period for such Loans or within such earlier period as required by law as Alternate Base Rate Loans. The Applicable Borrower hereby agrees promptly to pay any Lender, upon its demand, any additional amounts necessary to compensate such Lender for actual and direct costs (but not including anticipated profits) reasonably incurred by such Lender in making any repayment in accordance with this Section including, but not limited to, any interest or fees payable by such Lender to lenders of funds obtained by it in order to make or maintain its LIBOR Rate Loans hereunder. A certificate as to any additional amounts payable pursuant to this Section submitted by such Lender, through the Administrative Agent, to the Administrative Borrower shall be conclusive in the absence of manifest error. Each Lender agrees to use reasonable efforts (including reasonable efforts to change its LIBOR Lending Office) to avoid or to minimize any amounts which may otherwise be payable pursuant to this Section; provided , however , that such efforts shall not cause the imposition on such Lender of any additional costs or legal or regulatory burdens reasonably deemed by such Lender to be material.

Section 2.15 Requirements of Law .

 

(a)

If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:

(i) shall subject such Lender to any tax of any kind whatsoever with respect to any Letter of Credit, any Participation Interest therein or any application relating thereto, any LIBOR Rate Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for changes in the rate of tax on the net income of such Lender);

(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender which is not otherwise included in the determination of the LIBOR Rate hereunder; or

(iii) shall impose on such Lender any other condition;

and the result of any of the foregoing is to increase the cost to such Lender of making or maintaining LIBOR Rate Loans or the Letters of Credit (or the Participation Interests therein) or to reduce any amount receivable hereunder or under any Note in respect thereof, then, in any such case, the Applicable Borrower shall promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such additional cost or reduced amount receivable which such Lender reasonably deems to be material as determined by such Lender with respect to its LIBOR Rate Loans or Letters of Credit; provided that no such amount shall be payable to the extent incurred more than 90 days prior to the date such Lender (or the Administrative Agent) first notifies the Applicable Borrower of its intention to demand compensation therefor under this Section 2.15(a) ; provided further that, if the change,

 

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interpretation or introduction giving rise to such increased costs, reductions or other amounts is retroactive, then the 90 day period referred to above shall be extended to include the period of retroactive effect thereof. A certificate as to any additional amounts payable pursuant to this Section submitted by such Lender, through the Administrative Agent, to the Administrative Borrower shall be conclusive in the absence of manifest error. Each Lender agrees to use reasonable efforts (including reasonable efforts to change its Domestic Lending Office or LIBOR Lending Office, as the case may be) to avoid or to minimize any amounts which might otherwise be payable pursuant to this paragraph of this Section; provided , however , that such efforts shall not cause the imposition on such Lender of any additional costs or legal or regulatory burdens reasonably deemed by such Lender to be material.

 

(b)

If any Lender shall have reasonably determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any central bank or Governmental Authority made subsequent to the date hereof does or shall have the effect of reducing the rate of return on such Lender’s or such corporation’s capital as a consequence of its Loans, Participation Interests and other obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or such corporation’s policies with respect to capital adequacy) by an amount reasonably deemed by such Lender to be material, then from time to time, within fifteen (15) days after demand by such Lender, the Applicable Borrower shall pay to such Lender such additional amount as shall be certified by such Lender as being required to compensate it for such reduction; provided that no such amount shall be payable to the extent incurred more than 90 days prior to the date such Lender (or the Administrative Agent) first notifies the Applicable Borrower of its intention to demand compensation under this Section 2.15(b) ; provided further that, if the change, interpretation or introduction giving rise to such increased costs, reductions or other amounts is retroactive, then the 90 day period referred to above shall be extended to include the period of retroactive effect thereof. Such a certificate as to any additional amounts payable under this Section submitted by a Lender (which certificate shall include a description of the basis for the computation), through the Administrative Agent, to the Administrative Borrower shall be conclusive absent manifest error.

Section 2.16 Indemnity .

 

(a)

The Company hereby agrees to indemnify each Lender and to hold such Lender harmless from any funding loss or expense which such Lender may sustain or incur as a consequence of (i) default by the Company in payment of the principal amount of or interest on any Loan by such Lender in accordance with the terms hereof, (ii) default by the

 

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Company in accepting a borrowing after the Company has given a Notice of Borrowing in accordance with the terms hereof, (iii) default by the Company in making any prepayment after the Company has given a notice therefor in accordance with the terms hereof, (iv) the making by the Company of a prepayment of a Loan, or the conversion thereof, on a day which is not the last day of the Interest Period with respect thereto, in each case including, but not limited to, any such loss or expense arising from interest or fees payable by such Lender to lenders of funds obtained by it in order to maintain its Loans hereunder and/or (v) the replacement or removal of any Lender in accordance with Section 2.22. A certificate as to any additional amounts payable pursuant to this Section submitted by any Lender, through the Administrative Agent, to the Administrative Borrower (which certificate must be delivered to the Administrative Agent within sixty (60) days following such default, prepayment or conversion) shall be conclusive in the absence of manifest error. The agreements in this Section shall survive termination of this Agreement and payment of the Notes and all other amounts payable hereunder.

 

(b)

The Dutch Borrower hereby agrees to indemnify each Lender and to hold such Lender harmless from any funding loss or expense which such Lender may sustain or incur as a consequence of (i) default by the Dutch Borrower in payment of the principal amount of or interest on any Loan by such Lender in accordance with the terms hereof, (ii) default by the Dutch Borrower in accepting a borrowing after the Dutch Borrower (or the Administrative Borrower on behalf of the Dutch Borrower) has given a Notice of Borrowing in accordance with the terms hereof, (iii) default by the Dutch Borrower in making any prepayment after the Dutch Borrower (or the Administrative Borrower on behalf of the Dutch Borrower) has given a notice therefor in accordance with the terms hereof, (iv) the making by the Dutch Borrower of a prepayment of a Loan, or the conversion thereof, on a day which is not the last day of the Interest Period with respect thereto, in each case including, but not limited to, any such loss or expense arising from interest or fees payable by such Lender to lenders of funds obtained by it in order to maintain its Loans hereunder and/or (v) the replacement or removal of any Lender in accordance with Section 2.22. A certificate as to any additional amounts payable pursuant to this Section submitted by any Lender, through the Administrative Agent, to the Administrative Borrower (which certificate must be delivered to the Administrative Agent within sixty (60) days following such default, prepayment or conversion) shall be conclusive in the absence of manifest error. The agreements in this Section shall survive termination of this Agreement and payment of the Notes and all other amounts payable hereunder.

 

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Section 2.17 Taxes .

 

(a)

Any and all payments by the Credit Parties hereunder or under the Notes shall be made, except as provided in Section 2.17(g) , free and clear of and without deduction for any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto (all such present or future taxes levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto being hereinafter referred to as “ Taxes ”), excluding in the case of each Lender and the Administrative Agent, backup withholding taxes imposed by the United States (other than backup withholding taxes imposed as a result of a change in law after the Effective Date) and taxes imposed on or measured by all or part of its net income, branch profits taxes, and franchise taxes imposed on it, by the jurisdiction under the laws of which such Lender or the Administrative Agent (as the case may be) is organized or any political subdivision thereof or, in the case of each Lender, by the jurisdiction of such Lender’s Applicable Lending Office or any political subdivision thereof (all such excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities being hereinafter referred to as “ Excluded Taxes ”). If a Credit Party shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder or under any Note to any Lender or the Administrative Agent, (i) if such Taxes are not Excluded Taxes, the sum payable shall be increased as may be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 2.17 ) such Lender or the Administrative Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Credit Party shall make such deductions and (iii) such Credit Party shall pay the full amount deducted to the relevant taxation authority or other authority in accordance with applicable law.

 

(b)

In addition, notwithstanding anything in this Agreement or any other Credit Document to the contrary, each of the Borrowers agrees to pay (i) any present or future stamp, documentary or intangibles taxes or any other similar taxes, charges or levies which arise from any payment made hereunder or under the Notes or from the execution, delivery or registration of, or otherwise similarly with respect to, this Agreement, the Notes or any of the other Credit Documents and (ii) any present or future stamp, documentary or intangibles taxes, withholding taxes (to the extent not recovered or recoverable by the Administrative Agent and the Lenders through applicable tax treaties) or any other similar taxes, charges or levies which arise from the enforcement of the rights and remedies of the Administrative Agent and the Lenders under this Agreement or any other Credit Document (such taxes, charges and levies referred to in clauses (i) and (ii), hereinafter referred to as “ Other Taxes ”), in each case with respect to such Borrower’s Loans.

 

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(c)

Each of the Credit Parties will indemnify each Lender and the Administrative Agent for the full amount of Taxes (other than Excluded Taxes) or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 2.17 ) paid by such Lender or the Administrative Agent (as the case may be) and any liability (including penalties, interest and expenses, but excluding any liability resulting from the gross negligence or willful misconduct of such Lender or the Administrative Agent, as applicable) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be made within sixty (60) days from the date such Lender or the Administrative Agent (as