false 0000939930 0000939930 2022-06-30 2022-06-30

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 30, 2022

 

 

 

LOGO

Pyxus International, Inc.

(Exact name of Registrant, as specified in its charter)

 

 

 

Virginia   000-25734   85-2386250

(State or other jurisdiction

of incorporation)

 

(Commission

file number)

 

(I.R.S. Employer

Identification No.)

 

8001 Aerial Center Parkway
Morrisville, North Carolina 27560-8417
(Address of principal executive offices, including zip code)

(919) 379-4300

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 


Item 1.01

Entry into a Definitive Material Agreement.

On June 30, 2022, Pyxus International, Inc. (the “Company”) and certain subsidiaries of the Company, including the Company’s subsidiaries in Malawi, Tanzania and Zambia (the “African Subsidiaries”), entered into the Fourth Amendment and Restatement Agreement dated as of June 27, 2022 (the “Agreement”) with Eastern and Southern African Trade and Development Bank (“TDB”) to amend and restate the Third Amendment and Restatement Agreement dated August 12, 2021 among them. The Agreement sets forth the terms that govern the foreign seasonal lines of credit of each of the African Subsidiaries with TDB and supersedes the prior terms in effect. The Agreement provides for a lending commitment with respect to the line of credit of the Company’s Malawi subsidiary of $100.0 million, a lending commitment with respect to the line of credit of the Company’s Tanzania subsidiary of $70.0 million, and a lending commitment with respect to the line of credit of the Company’s Zambia subsidiary of $15.0 million, in each case with current borrowing availability reduced by the amount of outstanding loans borrowed under the respective existing line of credit with TDB. Existing outstanding loans under the Agreement bear interest at LIBOR plus 6% and new loans made under the Agreement will bear interest at LIBOR plus 5.5%. The Agreement terminates on June 30, 2024, unless terminated sooner at TDB’s discretion on June 30, 2023. The terms of the Agreement may also be modified at TDB’s discretion on that date. Borrowings under the Agreement are due upon the termination of the Agreement.

Pursuant to the Agreement, each of the Company and its subsidiaries, Pyxus Parent, Inc. and Pyxus Holdings, Inc., guarantee the obligations of the African Subsidiaries under the Agreement. In addition, the Agreement provides that obligations of each African Subsidiary under the Agreement are secured by a first priority pledge of:

 

   

tobacco purchased by that African Subsidiary that is financed by TDB;

 

   

intercompany receivables arising from the sale of the tobacco financed by TDB;

 

   

customer receivables arising from the sale of the tobacco financed by TDB; and

 

   

such African Subsidiary’s local collection account receiving customer payments for purchases of tobacco financed by TDB.

The Agreement also requires Alliance One International, LLC, a subsidiary of the Company, to pledge customer receivables arising from the sale of the tobacco financed by TDB and pledge its collection accounts designated for receiving customer payments for purchases of tobacco financed by TDB.

The Agreement contains affirmative and negative covenants (subject, in each case, to customary and other exceptions and qualifications), including covenants that limit the ability of the African Subsidiaries to, among other things:

 

   

Grant liens on assets;

 

   

Incur additional indebtedness (including guarantees and other contingent obligations);

 

   

Sell or otherwise dispose of property or assets;

 

   

Maintain a specified amount of pledged accounts receivable and inventory;

 

   

Make changes in the nature of its business;


   

Enter into burdensome contracts; and

 

   

Effect certain modifications or terminations of customer contracts.

The Agreement contains events of default including, but not limited to, nonpayment of principal or interest, violation of covenants, breaches of representations and warranties, cross-default to other debt, bankruptcy and other insolvency events, invalidity of loan documentation, certain changes of control of the Company and the other loan parties, termination of material licenses and material adverse changes.

 

Item 2.03.

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 hereof is incorporated herein by reference.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit No.

  

Description

10.1    Fourth Amendment and Restatement Agreement dated 27 June 2022 among Pyxus International, Inc., Pyxus Parent, Inc., Pyxus Holdings, Inc., Alliance One Tobacco (Malawi) Limited, Alliance One Tobacco (Tanzania) Limited, Alliance One Zambia Limited and Eastern and Southern African Trade and Development Bank
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

2


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:    July 6, 2022

 

PYXUS INTERNATIONAL, INC.
By:  

/s/ William L. O’Quinn, Jr.

  William L. O’Quinn, Jr.
  Senior Vice President – Chief Legal Officer and Secretary

 

3

Exhibit 10.1

EXECUTION VERSION

Originally dated 13 June 2018, as supplemented by various facility

renewal letters and as amended and amended and restated from

time to time, including by an amendment and restatement

agreement dated 27 June 2022

 

(1)

ALLIANCE ONE TOBACCO (MALAWI) LIMITED

ALLIANCE ONE TOBACCO (TANZANIA)

LIMITED and ALLIANCE ONE ZAMBIA LIMITED

as Borrowers

 

(2)

PYXUS INTERNATIONAL, INC.

PYXUS PARENT, INC. and

PYXUS HOLDINGS, INC.

as Parent Guarantors

 

(3)

EASTERN AND SOUTHERN AFRICAN TRADE

AND DEVELOPMENT BANK as Mandated Lead Arranger

 

(4)

EASTERN AND SOUTHERN AFRICAN TRADE

AND DEVELOPMENT BANK as Original Lender

 

(5)

EASTERN AND SOUTHERN AFRICAN TRADE

AND DEVELOPMENT BANK as Agent

 

(6)

EASTERN AND SOUTHERN AFRICAN TRADE

AND DEVELOPMENT BANK as Security Agent

 

 

FOURTH AMENDMENT AND RESTATEMENT AGREEMENT

relating to

a master renewal facility agreement originally dated 13 June 2018, as supplemented by various facility renewal letters and as amended and amended and restated from time to time prior to the date of this Agreement

 

 

L O N D O N


CONTENTS

 

Clause        Page  

1.

  Definitions and interpretation      2  

2.

  Conditions precedent and conditions subsequent      4  

3.

  Amendment and restatement      4  

4.

  Treatment of existing Commitments and Loans      5  

5.

  Confirmations      5  

6.

  Further assurance      6  

7.

  Representations      6  

8.

  Relationship with other Finance Documents      6  

9.

  Release      6  

10.

  Miscellaneous      7  

11.

  Law and jurisdiction      7  

12.

  Arbitration      7  
Schedules   

1.

  Existing Loans and Commitments      9  

2.

  Conditions precedent to Fourth Amendment Effective Date      12  

3.

  Conditions subsequent to Fourth Amendment Effective Date      15  

4.

  The Amended Facilities Agreement      16  

 

i


THIS AGREEMENT (this “Agreement”) is dated 27 June 2022 and made between:

 

(1)

PYXUS INTERNATIONAL, INC., a company incorporated and existing under the laws of Virginia, USA with the IRS employer identification number 85-2386250, and whose registered office is 8001 Aerial Center Parkway, Post Office Box 2009, Morrisville, NC 27560-2009, USA (“Parent”);

 

(2)

PYXUS PARENT, INC., a company incorporated and existing under the laws of Virginia, USA with the IRS employer identification number 85-2398341, and whose registered office is 8001 Aerial Center Parkway, Post Office Box 2009, Morrisville, NC 27560-2009, USA (“Pyxus Parent”);

 

(3)

PYXUS HOLDINGS, INC., a company incorporated and existing under the laws of Virginia, USA with the IRS employer identification number 85-2385176, and whose registered office is 8001 Aerial Center Parkway, Post Office Box 2009, Morrisville, NC 27560-2009, USA (“Pyxus Holdings” and, together with Parent and Pyxus Parent, the “Parent Guarantors”);

 

(4)

ALLIANCE ONE TOBACCO (MALAWI) LIMITED, a company incorporated and existing under the laws of the Republic of Malawi, with company number 1891 and whose postal address is P.O. Box 30522, Lilongwe 3, Malawi (“Alliance One Malawi”);

 

(5)

ALLIANCE ONE TOBACCO (TANZANIA) LIMITED, a company incorporated and existing under the laws of the United Republic of Tanzania, with company number 32885 and whose postal address is P.O. Box 1595, Kingolwira, Morogoro, United Republic of Tanzania (“Alliance One Tanzania”);

 

(6)

ALLIANCE ONE ZAMBIA LIMITED, a company incorporated and existing under the laws of the Republic of Zambia, with company number 40403 and whose registered address is Plot 4298 Buyatanshi Road, Industrial Area, Lusaka, Republic of Zambia and whose postal address is P.O. Box 30994, Lusaka, Zambia (“Alliance One Zambia” and together with Alliance One Malawi and Alliance One Tanzania, the “Borrowers”);

 

(7)

EASTERN AND SOUTHERN AFRICAN TRADE AND DEVELOPMENT BANK, a body corporate established by Charter pursuant to Chapter Nine of the Treaty for the Establishment of the Preferential Trade Area for Eastern and Southern African States and having an office at 197 Lenana Place, Lenana Road, Nairobi, Kenya as mandated lead arranger (the “Arranger”);

 

(8)

EASTERN AND SOUTHERN AFRICAN TRADE AND DEVELOPMENT BANK, a body corporate established by Charter pursuant to Chapter Nine of the Treaty for the Establishment of the Preferential Trade Area for Eastern and Southern African States and having an office at 197 Lenana Place, Lenana Road, Nairobi, Kenya as original lender (the “Original Lender”);

 

(9)

EASTERN AND SOUTHERN AFRICAN TRADE AND DEVELOPMENT BANK, a body corporate established by Charter pursuant to Chapter Nine of the Treaty for the Establishment of the Preferential Trade Area for Eastern and Southern African States and having an office at 197 Lenana Place, Lenana Road, Nairobi, Kenya as agent of the other Finance Parties (the “Agent”); and

 

1


(10)

EASTERN AND SOUTHERN AFRICAN TRADE AND DEVELOPMENT BANK, a body corporate established by Charter pursuant to Chapter Nine of the Treaty for the Establishment of the Preferential Trade Area for Eastern and Southern African States and having an office at 197 Lenana Place, Lenana Road, Nairobi, Kenya as security trustee for the Secured Parties (the “Security Agent”).

BACKGROUND:

 

(A)

The Original Lender has advanced various facilities to the Borrowers over many years pursuant to the terms of various facility letters and related documents. Prior to the Fourth Amendment Effective Date (as defined below), the Original Lender and the Borrowers, amongst others, agreed that the terms of all such facilities would be governed by, amongst other documents, a master renewal facility agreement dated 13 June 2018, as supplemented by various facility renewal letters, as last amended and restated by the third amendment and restatement agreement dated 12 August 2021 and last amended by the amendment agreement dated 26 May 2022 (as amended up to the date of this Agreement, and together, the “Original Facilities Agreement”).

 

(B)

This Agreement:

 

  (a)

puts into effect, by way of amendment and restatement, certain amendments to the Original Facilities Agreement, which have been agreed between the Obligors and the Finance Parties;

 

  (b)

contains confirmations in relation to the Security granted by the Borrowers pursuant to the Finance Documents (as defined in the Original Facilities Agreement) and contains certain confirmations in relation to the guarantees given by the Parent Guarantors; and

 

  (c)

deals with related matters.

THIS AGREEMENT WITNESSES that:

 

1.

DEFINITIONS AND INTERPRETATION

 

1.1

Definitions

In this Agreement:

“Amended Facilities Agreement” means the Original Facilities Agreement in the form set out in Schedule 4 (The Amended Facilities Agreement) incorporating the amendments made or proposed to be made and as restated pursuant to this Agreement.

“Charter” means the 1985 charter for the establishment of the Preferential Trade Area for Eastern and Southern African States, as the same may be amended or re-enacted from time to time.

 

2


“Facility Fee Letter” means the Fee Letter to be entered into on or about the date of this Agreement between the Obligors’ Agent and the Original Lender.

“Long-Stop Date” means 31 July 2022 or such later date as the Agent and the Obligors’ Agent may agree in writing from time to time.

“New Finance Documents” means:

 

  (a)

this Agreement;

 

  (b)

the Facility Fee Letter; and

 

  (c)

2022 AOI LLC Security Confirmation.

and any other Finance Document entered into, or to be entered into, on or about the date of this Agreement or otherwise in connection with the transactions contemplated by this Agreement and “New Finance Document” means any of them.

“Obligors” has the meaning given to it in the Amended Facilities Agreement.

“Obligors’ Agent” has the meaning given to it in the Amended Facilities Agreement.

“Original Facilities Agreement” has the meaning given to it in Recital (A).

“Original Transaction Security Documents” means each of the Transaction Security Documents, other than the 2022 AOI LLC Security Confirmation.

“Parties” means the parties to this Agreement.

“Fourth Amendment Effective Date” has the meaning given to it in Clause 2.1 (Conditions precedent to Fourth Amendment Effective Date).

 

1.2

Terms defined in the Amended Facilities Agreement

Terms defined in the Amended Facilities Agreement but not in this Agreement shall have the same meaning in this Agreement as in the Amended Facilities Agreement.

 

1.3

Construction

Clause 1.2 (Construction) of the Amended Facilities Agreement shall apply as if set out in full again here, with such changes as are appropriate to fit this context.

 

1.4

Continuing obligations

Subject to the provisions of this Agreement:

 

  (a)

except as amended or varied by this Agreement, the Original Facilities Agreement and all the other Finance Documents (as defined in the Original Facilities Agreement) shall remain in full force and effect;

 

  (b)

the Original Facilities Agreement shall be read and construed as one document with this Agreement; and

 

3


  (c)

nothing in this Agreement shall constitute or be construed as a waiver or release of any right or remedy of the Finance Parties under the Finance Documents (each as defined in the Original Facilities Agreement), nor otherwise prejudice any right or remedy of a Finance Party under the Original Facilities Agreement or any other Finance Document (as defined in the Original Facilities Agreement).

 

2.

CONDITIONS PRECEDENT AND CONDITIONS SUBSEQUENT

 

2.1

Conditions precedent to Fourth Amendment Effective Date

The provisions of this Agreement expressed to take effect from the Fourth Amendment Effective Date shall not come into effect until the date (the “Fourth Amendment Effective Date”) on which the Agent confirms that it has received, waived or deferred all of the documents and other evidence listed in Schedule 2 (Conditions precedent to Fourth Amendment Effective Date) in form and substance satisfactory to the Agent. The Agent shall notify the Obligors’ Agent and the Lenders promptly upon being so satisfied.

 

2.2

Long-Stop Date

This Agreement shall lapse and cease to have force and effect if, after the Long-Stop Date but before the Fourth Amendment Effective Date has occurred, either the Agent or the Obligors’ Agent notifies the other in writing to that effect.

 

2.3

Conditions subsequent to Fourth Amendment Effective Date

Each Obligor shall provide to the Agent, as soon as reasonably practicable and in any event within the applicable time period referred to in Schedule 3 (Conditions subsequent to Fourth Amendment Effective Date), the documents and other evidence listed in Schedule 3 (Conditions subsequent to Fourth Amendment Effective Date) in form and substance satisfactory to the Agent. The Agent shall notify the Obligors’ Agent and the Lenders promptly following its receipt of all documents and evidence referred to in Schedule 3 (Conditions subsequent to Fourth Amendment Effective Date).

 

3.

AMENDMENT AND RESTATEMENT

 

3.1

Amendment and restatement

Each Obligor and the Agent (for itself and on behalf of the other Finance Parties) agree that with effect from the Fourth Amendment Effective Date, the Original Facilities Agreement shall be amended and restated to read as set out in the Amended Facilities Agreement in Schedule 4 (The Amended Facilities Agreement).

 

3.2

Further assurance

Each Obligor shall, at the request of the Agent or Security Agent and at its own expense, do all such acts and things necessary or desirable to give effect to the amendments effected or to be affected pursuant to this Agreement.

 

4


4.

TREATMENT OF EXISTING COMMITMENTS AND LOANS

 

  (a)

All Parties agree that the currently outstanding Loans are all set out in Part I (Existing Loans) of Schedule 1 (Existing Loans and Commitments) (the “Existing Loans”).

 

  (b)

All Parties agree that, with effect from the Fourth Amendment Effective Date, the Commitments of each Lender under each Facility will be as set out in Part II (Commitments) of Schedule 1 (Existing Loans and Commitments).

 

5.

CONFIRMATIONS

 

5.1

Security Interest confirmations

Each of the Borrowers:

 

  (a)

consents to the amendment and restatement of the Original Facilities Agreement effected by Clause 3 (Amendment and restatement); and

 

  (b)

confirms to the Security Agent for the benefit of the Secured Parties that:

 

  (i)

its obligations under, and the Security Interests granted by it in and pursuant to, the Original Transaction Security Documents are not discharged or (except as set out in Clause 5.1(b)(ii)) otherwise affected by those amendments or the other provisions of this Agreement and shall accordingly remain in full force and effect; and

 

  (ii)

the Secured Obligations, including for the purposes of the Transaction Security Documents (including the Original Transaction Security Documents), shall after the Fourth Amendment Effective Date continue in full force and extend to its obligations under the Amended Facilities Agreement and under any other Finance Documents, including the New Finance Documents to which it is a party.

 

5.2

Guarantee confirmation

Each Parent Guarantor:

 

  (a)

consents to the amendment and restatement of the Original Facilities Agreement effected by Clause 3 (Amendment and restatement); and

 

  (b)

confirms to the Security Agent for the benefit of the Secured Parties that:

 

  (i)

its obligations as a Guarantor under clause 19 (Guarantee and indemnity) of the Original Facilities Agreement (the “Guaranteed Obligations”) are not discharged or (except as set out in Clause 5.2(b)(ii)) otherwise affected by those amendments or the other provisions of this Agreement and shall accordingly continue in full force and effect; and

 

5


  (ii)

the Guaranteed Obligations shall after the Fourth Amendment Effective Date continue in full force and extend to the obligations of each Obligor under the Amended Facilities Agreement and under any other Finance Documents, including the New Finance Documents.

 

6.

FURTHER ASSURANCE

Each Obligor shall at the request of the Agent or the Security Agent and at its own expense promptly execute (in such form as the Agent or Security Agent may reasonably require) and enter into any document, do any act or thing which the Agent or Security Agent considers necessary or appropriate to preserve, perfect, protect or give effect to the consents, confirmations, undertakings and Security provided for in this Agreement.

 

7.

REPRESENTATIONS

Each Obligor makes each of the warranties and representations set out in clause 21 (Representations) of the Amended Facilities Agreement on the date of this Agreement and on the Fourth Amendment Effective Date.

 

8.

RELATIONSHIP WITH OTHER FINANCE DOCUMENTS

 

8.1

Status

This Agreement is designated by the Agent and each Obligor as a Finance Document.

 

8.2

Continuing effect

Except to the extent of the amendments effected by Clause 3 (Amendment and restatement), the Original Facilities Agreement shall continue in full force and effect.

 

8.3

Immediate Event of Default

After the Fourth Amendment Effective Date, failure by any Obligor to comply with its obligations under this Agreement (including to deliver the documents and other evidence set out in Schedule 3 (Conditions subsequent to Fourth Amendment Effective Date)) shall be an immediate Event of Default with respect to that Obligor.

 

9.

RELEASE

The Obligors hereby acknowledge and agree, as of the date hereof, that: (a) neither them nor any of their affiliates have any claim or cause of action against the Original Lender (or any of its affiliates, officers, directors, employees, attorneys, consultants, or agents) and (b) the Original Lender has heretofore properly performed and satisfied in a timely manner all of its obligations to the relevant Obligors and their affiliates under the Original Facilities Agreement and all other documents executed in connection therewith or referred to or incorporated therein. Notwithstanding the foregoing, the Original Lender wishes (and the Obligors agree) to eliminate any possibility that any past conditions, acts, omissions, events, or circumstances would impair or otherwise

 

6


adversely affect any of the Original Lender’s rights, interests, security and/or remedies under the Original Facilities Agreement and all other documents executed in connection therewith or referred to or incorporated therein. Accordingly, for and in consideration of the agreements contained in this Agreement and other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, each Obligor (for itself and its affiliates and the successors, assigns, heirs and representatives of each of the foregoing) (collectively, the “Releasors”) does hereby fully, finally, unconditionally, and irrevocably release and forever discharge the Original Lender and each of its affiliates, officers, directors, employees, attorneys, consultants, and agents (collectively, the “Released Parties”) from any and all debts, claims, obligations, damages, costs, attorneys’’ fees, suits, demands, liabilities, actions, proceedings, and causes of action, in each case, whether known or unknown, contingent or fixed, direct or indirect, and of whatever nature or description, and whether in law or in equity, under contract, tort, statute, or otherwise, which any Releasor has now or heretofore had, shall or may have against any Released Party by reason of any act, omission, or thing whatsoever done or omitted to be done on or prior to the date hereof arising out of, connected with or related in any way to this Agreement, the Original Facilities Agreement or all other documents executed in connection therewith or referred to or incorporated therein, or any act, event or transaction related or attendant thereto, or the agreements of the Original Lender contained therein, or the possession, use, operation or control of any of the assets of the Obligors, or the making of any facility or other advance, or the management of such facility or advance or the collateral granted (or purported to be granted) under the security documents.

 

10.

MISCELLANEOUS

The provisions of clauses 36 (Notices), 38 (Partial invalidity), 39 (Remedies and waivers) and 43 (Counterparts) of the Amended Facilities Agreement shall apply to this Agreement as if set out in full again here, with such changes as are appropriate to fit this context.

 

11.

LAW AND JURISDICTION

 

11.1

Governing law

This Agreement and any non-contractual obligations arising out of or in connection with it are governed by, and shall be construed in accordance with, English law.

 

12.

ARBITRATION

 

12.1

Arbitration

Any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement or any non-contractual obligation arising out of in connection with this Agreement) (a “Dispute”) shall be referred to and finally resolved by arbitration under the Arbitration Rules of the London Court of International Arbitration (LCIA).

 

7


12.2

Formation of arbitral tribunal, seat and language of arbitration

 

  (a)

The arbitral tribunal shall consist of three arbitrators. The claimant(s), irrespective of number, shall nominate jointly one arbitrator; the respondent(s), irrespective of number, shall nominate jointly the second arbitrator, and a third arbitrator (who shall act as Chairman) shall be appointed by the arbitrators nominated by the claimant(s) and respondent(s) or, in the absence of agreement on the third arbitrator within 10 days of the appointment of the second arbitrator, by the LCIA Court (as defined in the Rules).

 

  (b)

The seat of arbitration shall be London, England.

 

  (c)

The language of the arbitration shall be English.

 

12.3

Recourse to courts

For the purposes of arbitration pursuant to this Clause 12 (Arbitration), the Parties waive any right of application to determine a preliminary point of law or appeal on a point of law under Sections 45 and 69 of the Arbitration Act 1996.

 

12.4

Service of process

 

  (a)

Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):

 

  (i)

irrevocably appoints Alliance One International Services Limited of Building A, Riverside Way, Camberley, Surrey, GU15 3YL as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and

 

  (ii)

agrees that failure by an agent for the service of process to notify the relevant Obligor of the process will not invalidate the proceedings concerned.

 

  (b)

If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Obligors’ Agent (on behalf of all the Obligors) must immediately (and in any event within 5 days of such event taking place) appoint another agent on terms acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose.

EXECUTION:

This Agreement has been entered into on the date stated at the beginning of this Agreement and the parties have shown their acceptance of its terms by executing it at the end of the Schedules.

 

8


SCHEDULE 1

EXISTING LOANS AND COMMITMENTS

Part I: Existing Loans

 

Disbursement

Number

   Principal amount outstanding (USD)    Repayment Date

Alliance One Malawi

CAD00012021306

   19,898,447.32    21-Aug-22

CAD00012021317

   1,000,000.00    2-Sep-22

CAD00012021325

   3,800,000.00    22-Sep-22

CAD00012021332

   2,000,000.00    26-Sep-22

CAD00012021337

   2,000,000.00    16-Oct-22

CAD00012021347

   2,120,000.00    5-Nov-22

CAD00012021350

   2,000,000.00    12-Nov-22

CAD00012021356

   3,030,000.00    19-Nov-22

CAD00012021359

   2,000,000.00    27-Nov-22

CAD00012021368

   2,300,000.00    10-Dec-22

CAD00012022385

   1,000,000.00    6-Jan-23

CAD00012022399

   2,315,000.00    15-Jan-23

CAD00012022480

   1,525,000.00    6-Mar-23

CAD00012022528

   3,500,000.00    4-May-23

CAD00012022550

   2,000,000.00    18-May-23

CAD00012022558

   3,755,000.00    26-May-23

Total principal amount outstanding: USD 54,243,447.32

Alliance One Tanzania

CAD00012022400

   1,268,408.25    15-Jan-23

CAD00012022414

   1,055,000.00    23-Jan-23

CAD00012022440

   1,000,000.00    6-Feb-23

 

9


Disbursement

Number

   Principal amount outstanding (USD)    Repayment Date

CAD00012022461

   1,000,000.00    17-Feb-23

CAD00012022478

   1,870,000.00    3-Mar-23

CAD00012022516

   1,000,000.00    9-Apr-23

CAD00012022519

   2,000,000.00    23-Apr-23

CAD00012022529

   1,500,000.00    4-May-23

CAD00012022542

   3,500,000.00    11-May-23

CAD00012022549

   3,765,000.00    14-May-23

CAD00012022555

   2,700,000.00    20-May-23

CAD00012022556

   1,500,000.00    21-May-23

CAD00012022560

   3,100,000.00    26-May-23

Total principal amount outstanding: USD 25,258,408.25

Alliance One Zambia

CAD00012021371

   668,697.13    19-Dec-22

CAD00012022462

   1,500,000.00    20-Feb-23

CAD00012022518

   1,400,000.00    23-Apr-23

CAD00012022531

   2,000,000.00    8-May-23

CAD00012022553

   4,000,000.00    19-May-23

Total principal amount outstanding: USD 9,568,697.13

 

10


Part II: Commitments

 

Name of Original Lender

 

Malawian Facility

Commitment

 

Tanzanian Facility

Commitment

 

Zambian Facility

Commitment

Eastern and Southern African Trade and Development Bank

  USD 100,000,000   USD 70,000,000   USD 15,000,000

 

11


SCHEDULE 2

CONDITIONS PRECEDENT TO FOURTH AMENDMENT EFFECTIVE DATE

 

1.

Parent Guarantors, Alliance One Malawi and AOI LLC

 

  (a)

A copy of a resolution of the board of directors of each Parent Guarantor, Alliance One Malawi and AOI LLC:

 

  (i)

approving the terms of, and the transactions contemplated by, the New Finance Documents to which it is a party and resolving that it execute, deliver and perform the New Finance Documents to which it is a party;

 

  (ii)

authorising a specified person or persons to execute the New Finance Documents to which it is a party on its behalf; and

 

  (iii)

authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under or in connection with the New Finance Documents to which it is a party.

 

  (b)

A specimen of the signature of each person authorised by the resolution referred to in paragraph 1(a) above in relation to the New Finance Documents and related documents.

 

  (c)

A certificate of each Parent Guarantor, Alliance One Malawi and AOI LLC (signed by a director or an authorised signatory) confirming that borrowing or guaranteeing or securing, as appropriate, the Total Commitments applicable to that Parent Guarantor, Alliance One Malawi or AOI LLC (as applicable) would not cause any borrowing, guarantee, security or similar limit binding on that Parent Guarantor, Alliance One Malawi or AOI LLC (as applicable) to be exceeded.

 

  (d)

A certificate of an authorised signatory of each Parent Guarantor, Alliance One Malawi and AOI LLC certifying that each document relating to it specified in schedule 2 (Conditions precedent to Amendment Agreement Effective Date) of the Fourth Amendment and Restatement Agreement remains correct, complete and in full force and effect and has not been amended or superseded as at a date no earlier than the date of this Agreement.

 

  (e)

Unless previously delivered, a certified copy of each Material Licence.

 

2.

Finance Documents

Each of the following, duly executed by each party thereto:

 

  (a)

this Agreement; and

 

  (b)

the Facility Fee Letter.

 

12


3.

Transaction Security Document

The duly executed 2022 AOI LLC Security Confirmation.

 

4.

Legal opinions

The following legal opinions, each addressed to the Agent, the Security Agent and the Original Lender:

 

  (a)

A legal opinion of Mayer Brown International LLP, legal advisers to the Agent and Arranger as to English law substantially in the form distributed to the Original Lender prior to signing this Agreement.

 

  (b)

A legal opinion of RITZ Attorneys at Law, legal advisers to the Agent and Arranger as to Malawian law substantially in the form distributed to the Original Lender prior to signing this Agreement.

 

  (c)

A legal opinion of Robinson, Bradshaw and Hinson, P.A. legal advisers to the Obligors, addressed to the Agent, the Security Agent and the Original Lender, as to Virginian law, in the form distributed to the Original Lender prior to signing this Agreement.

 

  (d)

A legal opinion of Robinson Bradshaw and Hinson, P.A. legal advisers to the Obligors, addressed to the Agent, Security Agent and the Original Lender, as to North Carolina law, in the form distributed to the Original Lender prior to signing this Agreement.

 

5.

Product documentation and evidence

Each Borrower shall deliver to the Agent the following:

 

  (a)

unless previously delivered, a certified copy of each Intermediate Sales Contract and each End Sales Contract (and Transportation Documents existing at that time in relation thereto) to which it is a party as at the Fourth Amendment Effective Date;

 

  (b)

a schedule setting out its confirmed orders and business under negotiation as at the Fourth Amendment Effective Date;

 

  (c)

a schedule setting out the estimated quantity in respect of:

 

  (i)

shipments of green leaf tobacco to be delivered to it by its suppliers; and

 

  (ii)

shipments to be delivered to Buyers under the End Sales Contracts,

in each case for each crop season from (and including) the Fourth Amendment Effective Date to (and including) the Termination Date; and

 

  (iii)

a pillar report and inventory statistics prepared in respect it.

 

13


6.

Other documents and evidence

 

  (a)

A copy of the Original Financial Statements of each Obligor.

 

  (b)

The Group Structure Chart.

 

  (c)

A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Obligors’ Agent accordingly) in connection with the entry into and performance of the transactions contemplated by any Transaction Document or for the validity and enforceability of any Transaction Document.

 

  (d)

Evidence that the fees, costs and expenses then due from the Obligors pursuant to Clause 14 (Fees), Clause 15.4 (Stamp taxes) and Clause 19 (Costs and expenses) of the Amended Facilities Agreement have been paid or will be paid by the Fourth Amendment Effective Date.

 

14


SCHEDULE 3

CONDITIONS SUBSEQUENT TO FOURTH AMENDMENT EFFECTIVE DATE

 

1.

Malawian related issues

Satisfaction of the following requirements by the date falling 30 days after the date of this Agreement, or such later date as the Agent may agree:

 

Document

  

Registration process

Fourth Amendment and Restatement Agreement    Alliance One Malawi shall notify the Reserve Bank of Malawi of the amendment to the Original Facilities Agreement and deliver a duly executed copy of this Agreement to the Reserve Bank of Malawi.
Fourth Amendment and Restatement Agreement    Malawian stamp duty of approximately Malawian Kwacha 10,000 must be affixed to the document.

 

2.

Tanzanian related issues

Satisfaction of the following requirements by the date falling 30 days after the date of this Agreement, or such later date as the Agent may agree:

 

Document

  

Registration process

Fourth Amendment and Restatement Agreement    Tanzanian stamp duty of approximately Tanzania Shillings 2,000 must be affixed to the document.

 

15


SCHEDULE 4

THE AMENDED FACILITIES AGREEMENT

 

16


EXECUTION VERSION

Originally dated 13 June 2018, as supplemented by various facility renewal letters and as amended and amended and restated from time to time, including by an amendment and restatement agreement dated 27 June 2022

 

(1)

ALLIANCE ONE TOBACCO (MALAWI) LIMITED, ALLIANCE ONE TOBACCO (TANZANIA) LIMITED and ALLIANCE ONE ZAMBIA LIMITED as Borrowers

 

(2)

PYXUS INTERNATIONAL, INC.,

PYXUS PARENT, INC. and

PYXUS HOLDINGS, INC.,

as Parent Guarantors

 

(3)

EASTERN AND SOUTHERN AFRICAN TRADE AND DEVELOPMENT BANK as Mandated Lead Arranger

 

(4)

EASTERN AND SOUTHERN AFRICAN TRADE AND DEVELOPMENT BANK as Original Lender

 

(5)

EASTERN AND SOUTHERN AFRICAN TRADE AND DEVELOPMENT BANK as Agent

 

(6)

EASTERN AND SOUTHERN AFRICAN TRADE AND DEVELOPMENT BANK as Security Agent

 

 

USD 185,000,000

SECURED PRE-SHIPMENT AND EXPORT FINANCE FACILITIES AGREEMENT

 

 

L O N D O N


CONTENTS

 

Clause        Page  
1.  

Definitions and interpretation

     2  
2.  

The Facilities

     37  
3.  

Seasonal Review

     38  
4.  

Purpose

     40  
5.  

Conditions of Utilisation

     40  
6.  

Utilisation

     42  
7.  

Repayment

     44  
8.  

Voluntary prepayment and cancellation

     44  
9.  

Mandatory prepayment and cancellation

     45  
10.  

Restrictions

     47  
11.  

Interest

     48  
12.  

Interest Periods

     49  
13.  

Changes to the Calculation of Interest

     49  
14.  

Fees

     50  
15.  

Tax Gross Up and Indemnities

     52  
16.  

Increased Costs

     55  
17.  

Other Indemnities

     56  
18.  

Mitigation by the Lenders

     58  
19.  

Costs and Expenses

     59  
20.  

Guarantee and Indemnity

     61  
21.  

Representations

     65  
22.  

Information Undertakings

     75  
23.  

Loan to Value Ratio

     82  
24.  

General Undertakings

     86  
25.  

Sales Contracts Undertakings

     94  
26.  

Accounts

     100  
27.  

Events of Default

     102  
28.  

Changes to the Lenders

     111  
29.  

Changes to the Obligors

     117  
30.  

Role of the Agent and the Arranger

     118  
31.  

The Security Agent

     128  
32.  

Conduct of Business by the Finance Parties

     143  
33.  

Sharing among the Finance Parties

     143  
34.  

Payment mechanics

     145  
35.  

Set-Off

     148  
36.  

Notices

     149  
37.  

Calculations and Certificates

     151  
38.  

Partial Invalidity

     151  

 

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CONTENTS

 

Clause        Page  
39.  

Remedies and Waivers

     152  
40.  

Amendments and Waivers

     152  
41.  

Confidentiality

     163  
42.  

Confidentiality of Funding Rates

     167  
43.  

Counterparts

     169  
44.  

Governing Law

     170  
45.  

Arbitration

     170  

Schedules

 

1.  

Revised Commitments

     172  
2.  

Form of Utilisation Request

     173  
3.  

Form of Transfer Certificate

     174  
4.  

Form of Assignment Agreement

     176  
5.  

Loan to Value Ratio Certificate

     178  
6.  

Timetables

     180  
7.  

Original End Buyers

     181  
8.  

Material Licences

     182  
9.  

Disclosed Proceedings

     183  
10.  

Original Sales Contracts

     184  

 

ii


THIS SECURED PRE-SHIPMENT AND EXPORT FINANCE AGREEMENT is originally dated 13 June 2018, as supplemented by various facility renewal letters, and as amended and amended and restated from time to time, including as amended and restated on the Fourth Amendment Effective Date (as defined below) (the “Agreement”).

BETWEEN:

 

(1)

PYXUS INTERNATIONAL, INC. (formerly known as Pyxus One, Inc.), a company incorporated and existing under the laws of Virginia, USA with the IRS employer identification number 85-2386250, and whose registered office is 8001 Aerial Center Parkway, Post Office Box 2009, Morrisville, NC 27560-2009, USA (“Parent”);

 

(2)

PYXUS PARENT, INC., a company incorporated and existing under the laws of Virginia, USA with the IRS employer identification number 85-2398341, and whose registered office is 8001 Aerial Center Parkway, Post Office Box 2009, Morrisville, NC 27560-2009, USA (“Pyxus Parent”);

 

(3)

PYXUS HOLDINGS, INC., a company incorporated and existing under the laws of Virginia, USA with the IRS employer identification number 85-2385176, and whose registered office is 8001 Aerial Center Parkway, Post Office Box 2009, Morrisville, NC 27560-2009, USA (“Pyxus Holdings” and, together with Parent and Pyxus Parent, the “Parent Guarantors”);

 

(4)

ALLIANCE ONE TOBACCO (MALAWI) LIMITED, a company incorporated and existing under the laws of the Republic of Malawi, with company number 1891 and whose postal address is P.O. Box 30522, Lilongwe 3, Malawi (“Alliance One Malawi”);

 

(5)

ALLIANCE ONE TOBACCO (TANZANIA) LIMITED, a company incorporated and existing under the laws of the United Republic of Tanzania, with company number 32885 and whose postal address is P.O. Box 1595, Kingolwira, Morogoro, United Republic of Tanzania (“Alliance One Tanzania”);

 

(6)

ALLIANCE ONE ZAMBIA LIMITED, a company incorporated and existing under the laws of the Republic of Zambia, with company number 40403 and whose registered address is Plot 4298 Buyatanshi Road, Industrial Area, Lusaka, Republic of Zambia and whose postal address is P.O. Box 30994, Lusaka, Zambia (“Alliance One Zambia” and, together with Alliance One Malawi and Alliance One Tanzania, the “Borrowers”);

 

(7)

EASTERN AND SOUTHERN AFRICAN TRADE AND DEVELOPMENT BANK, a body corporate established by Charter pursuant to Chapter Nine of the Treaty for the Establishment of the Preferential Trade Area for Eastern and Southern African States and having an office at 197 Lenana Place, Lenana Road, Nairobi, Kenya as mandated lead arranger (the “Arranger”);

 

(8)

EASTERN AND SOUTHERN AFRICAN TRADE AND DEVELOPMENT BANK, a body corporate established by Charter pursuant to Chapter Nine of the Treaty for the Establishment of the Preferential Trade Area for Eastern and Southern African States and having an office at 197 Lenana Place, Lenana Road, Nairobi, Kenya as original lender (the “Original Lender”);

 

1


(9)

EASTERN AND SOUTHERN AFRICAN TRADE AND DEVELOPMENT BANK, a body corporate established by Charter pursuant to Chapter Nine of the Treaty for the Establishment of the Preferential Trade Area for Eastern and Southern African States and having an office at 197 Lenana Place, Lenana Road, Nairobi, Kenya as agent of the other Finance Parties (the “Agent”); and

 

(10)

EASTERN AND SOUTHERN AFRICAN TRADE AND DEVELOPMENT BANK, a body corporate established by Charter pursuant to Chapter Nine of the Treaty for the Establishment of the Preferential Trade Area for Eastern and Southern African States and having an office at 197 Lenana Place, Lenana Road, Nairobi, Kenya as security trustee for the Secured Parties (the “Security Agent”).

BACKGROUND:

 

(A)

Pursuant to various offer letters, facility letters, facility renewal letters, the Master Renewal Facility Agreement (as defined below), various amendment agreements and various amendment and restatement agreements, the Original Lender has advanced various facilities to the Borrowers over many years.

 

(B)

Pursuant to the Fourth Amendment and Restatement Agreement, the Parties have agreed that, following the Fourth Amendment Effective Date, all outstanding loans will be governed by the terms of this Agreement, which will supersede the terms of any previous offer letter, facility letter or facility renewal letter, the terms of the original Master Renewal Facility Agreement, the terms of any previous amendment agreement and the terms of any previous amendment and restatement agreement.

 

(C)

The Original Lender has agreed to make available to the Borrowers the Commitments set out in Schedule 1 (Revised Commitments) on the terms of this Agreement as amended and restated by the Fourth Amendment and Restatement Agreement.

IT IS AGREED that:

SECTION 1

INTERPRETATION

 

1.

DEFINITIONS AND INTERPRETATION

 

1.1

Definitions

In this Agreement:

“2021 Amendment Agreement to the AOI LLC 2020 Collection Account Security Agreement” means the New York law governed amendment agreement dated 13 August 2021 relating to the AOI LLC 2020 Collection Account Security Agreement entered into between AOI LLC and the Security Agent.

“2021 Amendment Agreement to the AOI LLC 2020 Receivables Assignment Agreement” means the English law governed amendment agreement dated 13 August 2021 relating to the AOI LLC 2020 Receivables Assignment Agreement entered into between AOI LLC and the Security Agent.

 

2


“2021 Amendment Agreement to the Collection Account Control Agreement” means the New York law governed amendment agreement dated 11 August 2021 relating to the Collection Account Control Agreement entered into between AOI LLC, the Security Agent and the Collection Account Bank.

“2021 AOI LLC Security Confirmation” means the English law governed security confirmation deed dated 13 August 2021 between AOI LLC and the Security Agent for the benefit of the Secured Parties relating to each Transaction Security Document to which AOI LLC is a party.

“2022 AOI LLC Security Confirmation” means the English law governed security confirmation deed dated on or about the date of the Fourth Amendment and Restatement Agreement between AOI LLC and the Security Agent for the benefit of the Secured Parties relating to each Transaction Security Document to which AOI LLC is a party.

“Account Bank” means the Collection Account Bank and each Local Account Bank.

“Accounting Principles” means:

 

  (a)

with respect to the Parent Guarantors, generally accepted accounting principles in the United States; and

 

  (b)

with respect to the Borrowers, IFRS.

“Accounting Reference Date” means 31 March.

“Additional End Sales Contract” has the meaning given to that term in paragraph (b) of the definition of “End Sales Contract”.

“Additional Intermediate Sales Contract” has the meaning given to that term in paragraph (b) of the definition of “Intermediate Sales Contract”.

“Additional Sales Contract” means any Additional End Sales Contract or any Additional Intermediate Sales Contract.

“Affiliate” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.

“Affiliate End Sales Contract” means any contract for the sale and delivery of Products between AOI LLC as seller and an End Buyer that is a Subsidiary of the Parent (other than an Obligor or AOI LLC) as buyer that meets the Eligibility Criteria.

Alliance One Malawi Pledge Over Inventory” means the Mozambican law governed pledge agreement dated 17 September 2021 entered into between Alliance One Malawi and the Security Agent, pursuant to which Alliance One Malawi charges certain of its tobacco stocks located in Mozambique in favour of the Security Agent.

 

3


“Alliance One Malawi Tripartite Pledge Agreement” means the South African law governed pledge agreement dated 19 February 2021 entered into between Alliance One Malawi, the Security Agent and C. Steinweg Bridge Proprietary Limited, pursuant to which Alliance One Malawi charges certain of its tobacco stocks located in South Africa in favour of the Security Agent.

“Anti-Corruption Laws” means the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977, and any similar laws or regulations in any jurisdiction relating to bribery, corruption, money laundering or combating the financing of terrorism or any similar practices.

“AOI LLC” means Alliance One International, LLC, a limited liability company organised under the laws of the North Carolina, whose postal address is 8958 West Marlboro Road, Farmville, North Carolina, USA.

“AOI LLC 2020 Collection Account Security Agreement” means the New York law governed account security agreement originally dated 17 August 2020 (as amended from time to time, including pursuant to the 2021 Amendment Agreement to the AOI LLC 2020 Collection Account Security Agreement), pursuant to which AOI LLC grants a security interest in, inter alia, all amounts standing to the credit of the Collection Accounts, entered into between AOI LLC and the Security Agent.

“AOI LLC 2020 Receivables Assignment Agreement” means the English law governed receivables assignment agreement originally dated 18 August 2020 (as amended from time to time, including pursuant to the 2021 Amendment Agreement to the AOI LLC 2020 Receivables Assignment Agreement and the Q2 2022 Amendment Agreement) relating to the AOI LLC End Sales Contracts, entered into between AOI LLC and the Security Agent.

“AOI LLC End Sales Contract” has the meaning given to such term in the AOI LLC 2020 Receivables Assignment Agreement.

“AOI LLC Repeating Representations” has the meaning given to the term “Repeating Representations” in the AOI LLC 2020 Receivables Assignment Agreement.

“AOI LLC Security Documents” means:

 

  (a)

AOI LLC 2020 Collection Account Security Agreement;

 

  (b)

AOI LLC 2020 Receivables Assignment Agreement;

 

  (c)

the Collection Account Control Agreement;

 

  (d)

the 2021 Amendment Agreement to the AOI LLC 2020 Collection Account Security Agreement.

 

  (e)

the 2021 Amendment Agreement to the AOI LLC 2020 Receivables Assignment Agreement;

 

4


  (f)

the 2021 Amendment Agreement to the Collection Account Control Agreement;

 

  (g)

the 2021 AOI LLC Security Confirmation;

 

  (h)

the 2022 AOI LLC Security Confirmation; and

 

  (i)

the Q2 2022 Amendment Agreement.

“Assignment Agreement” means an agreement substantially in the form set out in Schedule 4 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee.

“Auditors” means Deloitte & Touche LLP or any other firm approved in advance by the Majority Lenders (such approval not to be unreasonably withheld or delayed).

“Authorisation” means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.

“Availability Period” means, in relation to a Facility, the period from and including the Q2 2021 Amendment Agreement Effective Date to and including the date falling one Month prior to the Termination Date.

“Available Commitment” means, in relation to a Facility, a Lender’s Commitment under that Facility minus:

 

  (a)

its participation in any outstanding Loans under that Facility; and

 

  (b)

in relation to any proposed Utilisation, its participation in any Loans that are due to be made under that Facility on or before the proposed Utilisation Date,

other than that Lender’s participation in any Loans under that Facility that are due to be repaid or prepaid on or before the proposed Utilisation Date.

“Available Facility” means, in relation to a Facility, the aggregate for the time being of each Lender’s Available Commitment in respect of that Facility.

“Break Costs” means the amount (if any) by which:

 

  (a)

the interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

exceeds:

 

  (b)

the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

 

5


“Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in Nairobi, London and Port Louis and, in relation to any date for payment or purchase of dollars, New York and, with respect to any matter that involves any communication with or payment by or to a particular Borrower, that Borrower’s jurisdiction of incorporation.

“Business Report” means a report from the Borrowers in form and substance satisfactory to the Agent, in each case for the period to which the Business Report relates, to include (without limitation) for each Borrower:

 

  (a)

confirmed orders and business under negotiation;

 

  (b)

shipping schedules for each crop season;

 

  (c)

sample shipping documents; and

 

  (d)

pillar reports and inventory statistics.

“Buyer” means an End Buyer or an Intermediate Buyer.

“Change of Control” means:

 

  (a)

the Parent ceases directly or indirectly to control Pyxus Parent;

 

  (b)

Pyxus Parent ceases directly or indirectly to control Pyxus Holdings; or

 

  (c)

Pyxus Holdings ceases directly or indirectly to control any Borrower.

For the purposes of this definition, “control” of a person means:

 

  (i)

the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:

 

  (A)

cast, or control the casting of, more than 50 per cent. of the maximum number of votes that might be cast at a general meeting of that person;

 

  (B)

appoint or remove all, or the majority, of the directors or other equivalent officers of that person; or

 

  (C)

give directions with respect to the operating and financial policies of that person with which the directors or other equivalent officers of that person are obliged to comply; or

 

  (ii)

the holding beneficially of 99.99 per cent. of the issued share capital of that person (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital).

“Charged Property” means all of the assets of the Borrowers and AOI LLC which from time to time are, or are expressed to be, the subject of the Transaction Security.

 

6


“Charter” means the 1985 charter for the establishment of the Preferential Trade Area for Eastern and Southern African States, as the same may be amended or re-enacted from time to time.

“Collateral Management Agreement” means each of the Malawian Collateral Management Agreements and the Tanzanian Collateral Management Agreement.

“Collateral Manager” means each of the Malawian Collateral Managers and the Tanzanian Collateral Manager.

“Collection Account” means each of the Malawian Collection Account, the Tanzanian Collection Account and the Zambian Collection Account.

“Collection Account Bank” means Bank of America, N.A..

“Collection Account Control Agreement” means the New York law governed account control agreement dated 19 August 2020 (as amended from time to time, including pursuant to the 2021 Amendment Agreement to the Collection Account Control Agreement) entered into between AOI LLC, the Security Agent and the Collection Account Bank.

“Commitment” means a Malawian Facility Commitment, a Tanzanian Facility Commitment or a Zambian Facility Commitment.

“Confidential Information” means all information relating to any Obligor, the Group, the Transaction Documents or a Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or a Facility from either:

 

  (a)

any member of the Group or any of its advisers; or

 

  (b)

another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers,

in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes:

 

  (i)

information that:

 

  (A)

is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 41.1 (Confidential Information); or

 

  (B)

is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or

 

  (C)

is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from

 

7


  a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.

 

  (ii)

any Funding Rate.

“Confidentiality Undertaking” means a confidentiality undertaking in such form as agreed between the Obligors’ Agent and the Agent.

“Contractual Rights Assignment Agreement” means each assignment agreement over any Borrowers’ rights, title and interest in and to any Intermediate Sales Contract, between that Borrower and the Security Agent, including the Malawian 2020 Security Agreement, the Tanzanian 2020 Contractual Rights Assignment Agreement and the Zambian 2020 Contractual Rights Assignment Agreement.

“Default” means an Event of Default or any event or circumstance specified in Clause 27 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

“Defaulting Lender” means any Lender:

 

  (a)

which has failed to make its participation in a Loan available (or has notified the Agent or the Obligor’s Agent (which has notified the Agent) that it will not make its participation in a Loan available) by the Utilisation Date of that Loan in accordance with Clause 6.4 (Lenders’ participation), unless:

 

  (i)

its failure to pay is caused by:

 

  (A)

an administrative or technical error; or

 

  (B)

a Disruption Event, and

payment is made within 10 Business Days of its due date; or

 

  (ii)

the Lender is disputing in good faith whether it is contractually obliged to make the payment in question;

 

  (b)

which has otherwise rescinded or repudiated a Finance Document; or

 

  (c)

with respect to which any insolvency or similar proceeding has occurred and is continuing.

“Delegate” means any delegate, agent, attorney or co-trustee appointed by the Security Agent.

“Discounting Bank” means The Standard Bank of South Africa Limited (acting through its Corporate and Investment Banking Division).

Discounting Borrower” means, in respect of Discounting Invoice Receivables owed to AOI LLC under a Discounting Invoice which are the subject of a Permitted

 

8


Receivables Disposal, the Borrower that sold to AOI LLC (as Intermediate Buyer under an Intermediate Sales Contract) the Products that were subsequently sold by AOI LLC to an End Buyer pursuant to such Discounting Invoice.

“Discounting Invoice” means an invoice or other applicable written payment instruction issued by AOI LLC to an End Buyer under an AOI LLC End Sales Contract which satisfies either of the following conditions:

 

  (a)

such invoice or written payment instruction provides for all amounts payable to AOI LLC thereunder to be paid to the Discounting Bank; or

 

  (b)

any Discounting Invoice Receivables arising under such invoice or written payment instruction have been disposed of by AOI LLC to the Discounting Bank by way of a Permitted Receivables Disposal.

Discounting Invoice Receivables” means all invoiced monies or other receivables under or arising from a Discounting Invoice owing to, payable to or for the benefit of AOI LLC now or in the future, resulting from the sale of tobacco originating in Malawi, Tanzania or Zambia.

“Disruption Event” means either or both of:

 

  (a)

a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facilities (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

 

  (b)

the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:

 

  (i)

from performing its payment obligations under the Finance Documents; or

 

  (ii)

from communicating with other Parties in accordance with the terms of the Finance Documents,

and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

“Eastern Sales” means the sale of any Product to Eastern Company S.A.E or its Affiliates.

“Eligibility Criteria” means:

 

  (a)

in relation to any Intermediate Sales Contract:

 

  (i)

the counterparty to that contract is an Intermediate Buyer;

 

9


  (ii)

it provides for all amounts payable to the Borrower that is the seller under that Intermediate Sales Contract to be:

 

  (A)

paid in USD;

 

  (B)

paid directly to that Borrower’s Local Account;

 

  (C)

paid upon demand by the relevant Borrower; and

 

  (D)

made without any withholding, counterclaim, deduction or set-off whatsoever (save to the extent expressly permitted under the terms of that contract as specifically approved by the Agent);

 

  (iii)

it complies with any payment or other conditions that were imposed by the Agent when confirming the designation of the counterparty to that contract as an Intermediate Buyer (if any);

 

  (iv)

it is capable of being freely assigned by the relevant Borrower (as seller) without any further consent of the relevant counterparty;

 

  (v)

it is expressed to be governed by English law, Swiss law, a Relevant Jurisdiction of the relevant Borrower or the law of another jurisdiction acceptable to the Agent; and

 

  (vi)

it provides for disputes to be submitted to arbitration in or to the courts of a jurisdiction acceptable to the Agent;

 

  (b)

in relation to any End Sales Contract (including any End Sales Contract made by way of purchase order):

 

  (i)

the counterparty to that contract is an End Buyer;

 

  (ii)

it (or the invoices or other applicable written payment instructions issued thereunder) provide(s) for all amounts payable to the relevant Borrower or AOI LLC (as seller) which the relevant Borrower has designated, or intends to designate, as “LTV Receivables” to be:

 

  (A)

paid in USD;

 

  (B)

in the case of amounts payable to AOI LLC, paid directly to the Collection Account maintained in the relevant Borrower’s name;

 

  (C)

in the case of amounts payable to a Borrower, paid directly to the Collection Account maintained in that Borrower’s name or (in the case of Local Sales Contracts only) paid directly to that Borrower’s Local Account; and

 

  (D)

paid within no more than 180 days from the date of delivery;

 

  (iii)

other than in respect of the terms of any Discounting Invoice issued thereunder, it complies with any payment or other conditions that were imposed by the Agent when confirming the designation of the counterparty to that contract as an End Buyer (if any);

 

10


  (iv)

other than in respect of any Discounting Invoice Receivables arising thereunder, the Borrower or AOI LLC is beneficially entitled to the receivables arising thereunder which relate to any Product;

 

  (v)

other than in respect of any Discounting Invoice Receivables arising thereunder, the receivables arising thereunder which relate to any Product are capable of being freely assigned by the relevant Borrower or AOI LLC (as seller) without any further consent of the relevant counterparty or, where such consent is required, this has been or will be obtained and presented to the Security Agent prior to such contract becoming subject to the Transaction Security constituted by the relevant Receivables Assignment Agreement.

Eligible Institution” means any Lender or other bank, financial institution, trust, fund or other entity selected by the Obligors’ Agent and which, in each case, is not a member of the Group.

“End Buyer” means:

 

  (a)

each of the persons listed as such in Schedule 7 (Original End Buyers) (an “Original End Buyer”);

 

  (b)

(without prejudice to Clause 25.11 (Local Sales Contracts)) any Subsidiary of the Parent (other than an Obligor or AOI LLC) that purchases Product from a Borrower or AOI LLC; and

 

  (c)

any other person which has become an End Buyer in accordance with Clause 25.9 (Additional End Buyers and Additional End Sales Contracts),

but excluding any such person that has ceased to be an End Buyer in accordance with Clause 25.8 (Buyer failure).

“End Sales Contract” means each of:

 

  (a)

the sales contracts listed in Part I (Original End Sales Contracts) of Schedule 10 (Original Sales Contracts) (each, an “Original End Sales Contract”); and

 

  (b)

any other contract for the sale and delivery of Products between a Borrower or AOI LLC as seller and an End Buyer as buyer that has become an End Sales Contract in accordance with Clause 25.9 (Additional End Buyers and Additional End Sales Contracts) (each, an “Additional End Sales Contract”),

but excluding any such contract that has ceased to be an End Sales Contract in accordance with Clause 25.7 (Sales Contract failure) or Clause 25.8 (Buyer failure) or otherwise ceases to be an End Sales Contract as noticed in writing to the Agent by the applicable Borrower or the Parent.

 

11


“Environment” means humans, animals, plants and all other living organisms including the ecological systems of which they form part and the following media:

 

  (a)

air (including, without limitation, air within natural or man-made structures, whether above or below ground);

 

  (b)

water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and

 

  (c)

land (including, without limitation, land under water).

“Environmental Claim” means any claim, proceeding, formal notice or investigation by any person in respect of any Environmental Law.

“Environmental Law” means any applicable law or regulation which relates to:

 

  (a)

the pollution or protection of the Environment;

 

  (b)

the conditions of the workplace; or

 

  (c)

the generation, handling, storage, use, release or spillage of any substance which, alone or in combination with any other, is capable of causing harm to the Environment, including, without limitation, any waste.

“Environmental Permits” means any permit and other Authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of any member of the Group conducted on or from the properties owned or used by any member of the Group.

“Event of Default” means any event or circumstance specified as such in Clause 27 (Events of Default).

“Excluded Activity” means each of the following:

 

  (a)

production of or trade in military weapons and ammunitions;

 

  (b)

production of or trade in any product or activity deemed or legislated as illegal under the host country regulations or international conventions and agreements including but not limited to ozone depleting substances, asbestos and certain pesticides, herbicides and chemicals;

 

  (c)

performing any trade, business or other activities in areas gazetted by host countries through national or international legislation and deemed to have a high biodiversity and/or any other activities that lead to substantial destruction of the environment;

 

  (d)

production or use of or trade in hazardous materials such as radioactive materials;

 

  (e)

trade in wildlife or wildlife products regulated under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (“CITES”);

 

12


  (f)

production or trade in chemicals, pesticides/herbicides subject to international phase-outs or bans;

 

  (g)

production of or trade in pharmaceuticals subject to international phase-outs or bans;

 

  (h)

forced labour or child labour;

 

  (i)

gambling, casinos and equivalent enterprises; and

 

  (j)

unsustainable fishing methods (including drift net fishing in the marine environment using nets in excess of 2.5 km in length).

“Existing Loan” means each of the Loans set out in part I (Existing Loans) of schedule 1 (Existing Loans and Commitments) of the Fourth Amendment and Restatement Agreement.

“Facility” means the Malawian Facility, the Tanzanian Facility or the Zambian Facility.

“Facility Office” means:

 

  (a)

in respect of a Lender, the office or offices notified by that Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement; or

 

  (b)

in respect of any other Finance Party, the office in the jurisdiction in which it is resident for tax purposes.

“Fee Letter” means:

 

  (a)

the fee letter dated 24 June 2021 entered into by the Parent and the Agent;

 

  (b)

the fee letter dated on or about the date of the Fourth Amendment and Restatement Agreement entered into by the Parent and the Agent; and

 

  (c)

any other fee letter which may be entered into between the Parent and the Agent from time to time.

“Finance Document” means this Agreement, the First Amendment and Restatement Agreement, the Second Amendment and Restatement Agreement, the Third Amendment and Restatement Agreement, the Q2 2021 Amendment Agreement, the Q2 2022 Amendment Agreement, the Fourth Amendment and Restatement Agreement, any Loan to Value Ratio Certificate, any Fee Letter, each Transaction Security Document, each Collateral Management Agreement, any Utilisation Request and any other document designated as a “Finance Document” by the Agent and the Obligors’ Agent or any Borrower.

 

13


“Finance Lease” means any lease or hire purchase contract, a liability under which would, in accordance with the Accounting Principles, be treated as a balance sheet liability.

“Finance Party” means the Agent, the Arranger, the Security Agent or a Lender.

“Financial Indebtedness” means any indebtedness for or in respect of:

 

  (a)

moneys borrowed and debit balances at banks or other financial institutions;

 

  (b)

any acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent);

 

  (c)

any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

 

  (d)

the amount of any liability in respect of Finance Leases;

 

  (e)

receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis and meet any requirement for de-recognition under the Accounting Principles);

 

  (f)

any Treasury Transaction (and, when calculating the value of that Treasury Transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that Treasury Transaction, that amount) shall be taken into account);

 

  (g)

any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of (i) an underlying liability of an entity which is not a member of the Group which liability would fall within one of the other paragraphs of this definition or (ii) any liabilities of any member of the Group relating to any post-retirement benefit scheme;

 

  (h)

any amount raised by the issue of redeemable shares which are redeemable (other than at the option of the issuer) before the Termination Date or are otherwise classified as borrowings under the Accounting Principles;

 

  (i)

any amount of any liability under an advance or deferred purchase agreement if (i) one of the primary reasons behind entering into the agreement is to raise finance or to finance the acquisition or construction of the asset or service in question or (ii) the agreement is in respect of the supply of assets or services and payment is due more than 180 days after the date of supply;

 

  (j)

any amount raised under any other transaction (including any forward sale or purchase, sale and sale back or sale and leaseback agreement) having the commercial effect of a borrowing or otherwise classified as borrowings under the Accounting Principles; and

 

  (k)

the amount of any liability in respect of any guarantee for any of the items referred to in paragraphs (a) to (j) above.

 

14


“Financial Quarter” means the period commencing on the day after one Quarter Date and ending on the next Quarter Date.

“Financial Year” means the annual accounting period of the Group ending on or about 31 March in each year.

“First Amendment and Restatement Agreement” means the amendment and restatement agreement dated 13 August 2020 entered into between (amongst others), the Borrowers, the Arranger, the Agent and the Security Agent pursuant to which this Agreement was first amended and restated.

“First Amendment Effective Date” means 19 August 2020.

“Fourth Amendment and Restatement Agreement” means the amendment and restatement agreement dated 27 June 2022 entered into between (amongst others), the Borrowers, the Arranger, the Agent and the Security Agent pursuant to which this Agreement was amended and restated for the fourth time.

“Fourth Amendment Effective Date” has the meaning given to the term “Fourth Amendment Effective Date” in the Fourth Amendment and Restatement Agreement.

“Funding Rate” means any individual rate notified by a Lender to the Agent pursuant to Clause 13.3(a)(ii) (Cost of funds).

“Group” means the Parent and each of its Subsidiaries from time to time.

“Group Structure Chart” means the group structure chart delivered to the Agent pursuant to clause 2.1 (Conditions precedent and conditions subsequent) of the Fourth Amendment and Restatement Agreement.

“Guarantor” means the Parent Guarantors.

“Holding Company” means, in relation to a person, any other person in respect of which it is a Subsidiary.

“IFRS” means international accounting standards within the meaning of IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.

“Interest Period” means, in relation to a Loan, each period determined in accordance with Clause 12 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 11.3 (Default interest).

“Intermediate Buyer” means AOI LLC, Alliance One Malawi, Alliance One Tanzania and any other Affiliate of a Borrower that the Agent has notified that Borrower in writing is acceptable to it.

“Intermediate Sales Contract” means each of:

 

  (a)

the sales contracts delivered by the Borrowers listed in Part II (Original Intermediate Sales Contracts) of Schedule 10 (Original Sales Contracts) (each, an “Original Intermediate Sales Contract”); and

 

15


  (b)

any other contract for the sale and delivery of Products between a Borrower as seller and an Intermediate Buyer as buyer that is designated as an “Intermediate Sales Contract” by the relevant Borrower and the Agent (each, an “Additional Intermediate Sales Contract”).

“Legal Reservations” means:

 

  (a)

the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;

 

  (b)

the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim; and

 

  (c)

similar principles, rights and defences under the laws of any Relevant Jurisdiction.

“Lender” means:

 

  (a)

any Original Lender; and

 

  (b)

any bank, financial institution, trust, fund or other entity which has become a Party as a “Lender” in accordance with Clause 28 (Changes to the Lenders),

which in each case has not ceased to be a Party as such in accordance with the terms of this Agreement.

“LIBOR” means, in relation to any Loan, the Screen Rate as of the Specified Time for dollars for a 12 month period commencing on the Utilisation Date of that Loan, and if that rate is less than zero, LIBOR shall be deemed to be zero.

“Limitation Acts” means the Limitation Act 1980 and the Foreign Limitation Periods Act 1984.

“LMA” means the Loan Market Association.

“Loan” means a Malawian Facility Loan, Tanzanian Facility Loan or Zambian Facility Loan.

“Loan to Value Ratio” has the meaning given to that term in Clause 23.1 (Definitions).

“Loan to Value Ratio Certificate” means a certificate substantially in the form set out in Schedule 5 (Loan to Value Ratio Certificate).

“Local Account” means each of the Malawian Local Account, the Tanzanian Local Account, the Zambian Local Account.

“Local Account Bank” means each of the Malawian Local Account Bank, the Tanzanian Local Account Bank and the Zambian Local Account Bank.

 

16


“Local Currency” means, in respect of a Borrower, the lawful currency of the jurisdiction of incorporation of that Borrower as determined by the Agent.

“Local Sales Contract” means an End Sales Contract entered into directly between a Borrower and an End Buyer that provides for all amounts payable to the Borrower under it which that Borrower has designated, or intends to designate, as “LTV Receivables” to be paid directly to the Local Account of that Borrower.    

“LTV Receivables” has the meaning given to such term in Clause 23.1 (Definitions).

“Majority Lenders” means:

 

  (a)

in relation to a specified Facility or Facilities, a Lender or Lenders whose Commitments aggregate at least 51 per cent. of the aggregate Commitments under that Facility or Facilities (or, if the Commitments under the Facility or Facilities have been reduced to zero, aggregated at least 51 per cent. of such Commitments immediately prior to that reduction); or

 

  (b)

otherwise, a Lender or Lenders whose Commitments aggregate at least 51 per cent. of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated at least 51 per cent. of the Total Commitments immediately prior to that reduction).

“Malawian 2020 Security Agreement” means the Malawian law governed security agreement dated 18 August 2020 entered between Alliance One Malawi and the Security Agent, pursuant to which Alliance One Malawi charges certain of its tobacco stocks and receivables, assigns certain of its contractual rights under Intermediate Sales Contracts, assigns certain of its receivables arising under its End Sales Contracts (in each case subject to certain exceptions) and charges the Malawian Local Account.

“Malawian Collateral Management Agreement” means each of:

 

  (a)

prior to the date of the Replacement Malawian Collateral Management Agreement only, the collateral management agreement dated 26 August 2020 between the Security Agent, Alliance One Malawi and Vallis Group Limited, relating to tobacco stocks located in Malawi;

 

  (b)

from (and including) the date of the Replacement Malawian Collateral Management Agreement onwards, the Replacement Malawian Collateral Management Agreement;

 

  (c)

the collateral management agreement dated 19 February 2021 entered into between the Security Agent, Alliance One Malawi and C. Steinweg Bridge Proprietary Limited, relating to tobacco stocks located in South Africa; and

 

  (d)

the collateral management agreement dated 13 August 2021 entered into between the Security Agent, Alliance One Malawi and Transcom Sharaf Logistica Limitada relating to tobacco stocks located in Mozambique,

and any reference to the “Malawian Collateral Management Agreement” shall mean all or any of such collateral management agreements, as applicable.

 

17


“Malawian Collateral Manager” means each of:

 

  (a)

prior to the date of the Replacement Malawian Collateral Management Agreement only, Vallis Group Limited, with respect to tobacco stocks located in Malawi;

 

  (b)

from (and including) the date of the Replacement Malawian Collateral Management Agreement onwards, Transcom Sharaf Limited, with respect to tobacco stocks located in Malawi;

 

  (c)

C Steinweg Bridge Proprietary Limited, with respect to tobacco stocks located in South Africa; and

 

  (d)

Transcom Sharaf Logistica Limitada, with respect to tobacco stocks located in Mozambique,

or such other collateral manager acceptable to the Lenders, and any reference to the “Malawian Collateral Manager” shall mean all or any of such collateral managers, as applicable.

“Malawian Collection Account” means the bank account opened and maintained in Alliance One Malawi’s name and designated the “Alliance One Malawi Collection Account” by AOI LLC with the Collection Account Bank in accordance with Clause 26.1 (Designation of Collection Accounts) and includes any interest of AOI LLC in any replacement account or any sub-division or sub-account of that account.

“Malawian Facility” means the revolving credit facility made available under this Agreement as described in Clause 2.1(a) (The Facilities).

“Malawian Facility Commitment” means:

 

  (a)

in relation to the Original Lender, the amount set opposite its name under the heading “Malawian Facility Commitment” in Schedule 1 (Revised Commitments) and the amount of any other Malawian Facility Commitment transferred to it under this Agreement; and

 

  (b)

in relation to any other Lender, the amount of any Malawian Facility Commitment transferred to it under this Agreement,

to the extent not cancelled, reduced or transferred by it under this Agreement.

“Malawian Facility Loan” means a loan made or to be made under the Malawian Facility or the principal amount outstanding for the time being of that loan.

“Malawian Local Account” means the bank account opened and maintained by Alliance One Malawi with the Malawian Local Account Bank in accordance with Clause 26.3(a) (Designation of Local Accounts) and includes any interest of Alliance One Malawi in any replacement account or any sub-division or sub-account of that account.

“Malawian Local Account Bank” means Standard Bank of Malawi.

 

18


“Malawian Secured Obligations” means all obligations at any time due, owing or incurred by Alliance One Malawi to any Secured Party under the Finance Documents to which Alliance One Malawi is a party, including the obligations set out in Clause 31.2 (Parallel debt (Covenant to pay the Security Agent)) whether present or future, actual or contingent (and whether incurred solely or jointly and whether as principal or surety or in some other capacity).

“Malawian Security Documents” means:

 

  (a)

the Malawian 2020 Security Agreement;

 

  (b)

the Alliance One Malawi Tripartite Pledge Agreement; and

 

  (c)

the Alliance One Malawi Pledge Over Inventory.

“Margin” means:

 

  (a)

subject to paragraph (b):

 

  (i)

in relation to any Existing Loan, 6.00 per cent. per annum; and

 

  (ii)

in relation to any New Loan, 5.50 per cent. per annum; or

 

  (b)

in respect of any Loans owed under a particular Facility to a Margin Change Lender, such other percentage per annum determined in accordance with Clause 3 (Seasonal Review).

“Margin Change Lender” has the meaning given to such term in paragraph (a)(iii) in Clause 3 (Seasonal Review).

“Master Renewal Facility Agreement” means the master renewal facility agreement originally dated 13 June 2018 entered into between the Borrowers, the Arranger, the Agent and the Security Agent.

“Material Adverse Effect” means a material adverse effect on:

 

  (a)

the business (including the production and export capacity), operations, property or financial condition of AOI LLC, any Borrower, the Borrowers taken as a whole or the Relevant Group taken as a whole; or

 

  (b)

the ability of an Obligor or AOI LLC to perform its obligations under the Transaction Documents; or

 

  (c)

the validity or enforceability of, or the effectiveness or ranking of any Security granted or purporting to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents.

“Material Licence” means each of the licences referred to in Schedule 8 (Material Licences), as such list may be amended in writing by the Agent and the Obligors’ Agent and as such licences may be renewed from time to time.

 

19


“Month” means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:

 

  (a)

(subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;

 

  (b)

if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and

 

  (c)

if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.

The above rules will only apply to the last Month of any period.

“New Lender” has the meaning given to that term in Clause 28 (Changes to the Lenders).

“New Loan” means any Loan utilised on or after the Fourth Amendment Effective Date.

“Obligor” means a Borrower or a Guarantor.

“Obligors’ Agent” means the Parent, appointed to act on behalf of each Obligor in relation to the Finance Documents pursuant to Clause 2.3 (Obligors’ Agent).

“Original End Buyer” has the meaning given to that term in paragraph (a) of the definition of “End Buyer”.

“Original Financial Statements” means:

 

  (a)

in relation to each Borrower, its audited consolidated financial statements for the Financial Year ended 31 March 2021; and

 

  (b)

in relation to Parent, its audited consolidated financial statements for the Financial Year ended 31 March 2021.

“Original Jurisdiction” means, in relation to an Obligor or AOI LLC, the jurisdiction under whose laws that entity is incorporated as at the date of this Agreement.

“Original Sales Contract” means:

 

  (a)

each Original End Sales Contract (which has the meaning given to that term in paragraph (a) of the definition of “End Sales Contract”); and

 

  (b)

each Original Intermediate Sales Contract (which has the meaning given to that term in paragraph (a) of the definition of “Intermediate Sales Contract”).

“Party” means a party to this Agreement.

 

20


“Permitted Disposal” means any sale, lease, licence, transfer or other disposal which is on arm’s length terms:

 

  (a)

of trading stock (including sales of inventory) or cash made by any Borrower in the ordinary course of trading of the disposing entity;

 

  (b)

of assets (other than shares or businesses) in exchange for other assets comparable or superior as to type, value and quality (other than an exchange of a non-cash asset for cash, which is permitted only if the proceeds of the disposal are used immediately to purchase an asset to replace the asset the subject of the disposal or are deposited into a Collection Account);

 

  (c)

of any Unproductive Fixed Asset; and

 

  (d)

arising as a result of any Permitted Security.

“Permitted Financial Indebtedness” means Financial Indebtedness:

 

  (a)

arising under a foreign exchange transaction for spot or forward delivery entered into by a Borrower in connection with protection against fluctuation in currency rates where that foreign exchange exposure arises in the ordinary course of trade of that Borrower, but not a foreign exchange transaction for investment or speculative purposes;

 

  (b)

arising under a Permitted Loan or a Permitted Guarantee or as permitted by Clause 24.20 (Treasury Transactions);

 

  (c)

under Finance Leases of vehicles, plant, equipment or computers entered into by a Borrower, provided that the aggregate capital value of all such items so leased under outstanding leases by the Borrowers does not exceed USD 1,000,000 (or its equivalent in other currencies) at any time; and

 

  (d)

not permitted by the preceding paragraphs and the outstanding principal amount of which does not exceed USD 7,500,000 (or its equivalent) in aggregate between the Borrowers at any time.

“Permitted Guarantee” means:

 

  (a)

the endorsement of negotiable instruments in the ordinary course of trade; or

 

  (b)

the guarantee provided by Alliance One Malawi arising under the Standard Bank Facility Agreement, provided that the aggregate principal amount guaranteed does not exceed USD 40,000,000 (or its equivalent in other currencies) at any time;

 

  (c)

the guarantees provided by Alliance One Malawi arising under the Seasonal Trade Finance Facility Agreement, provided that the aggregate principal amount guaranteed does not exceed USD 45,000,000 (or its equivalent in other currencies) at any time;

 

21


  (d)

the guarantees provided by Alliance One Malawi for the benefit of its suppliers, provided that the aggregate principal amount guaranteed does not exceed USD 3,500,000 (or its equivalent in other currencies) at any time;

 

  (e)

a guarantee provided by Alliance One Zambia for the benefit of its suppliers, provided that the aggregate principal amount guaranteed does not exceed USD 11,500,000; and

 

  (f)

any guarantee permitted under Clause 24.17 (Financial Indebtedness).

“Permitted Loan” means:

 

  (a)

any trade credit extended by any Borrower to its customers on normal commercial terms and in the ordinary course of its trading activities; and

 

  (b)

a loan made by a Borrower to an employee or director of any member of the Group if the amount of that loan when aggregated with the amount of all loans to employees and directors by members of the Group does not exceed USD 500,000 (or its equivalent) at any time.

“Permitted Receivables Disposal” means a disposal by AOI LLC to the Discounting Bank of any Discounting Invoice Receivables, provided that:

 

  (a)

the aggregate proceeds of such disposal paid or to be paid to AOI LLC (after deducting any sales commission payable in respect of such Discounting Invoice Receivables in accordance with Clause 9.4 (Proceeds from Permitted Receivables Disposal)) are not less than 85 per cent. of the book value of such Discounting Invoice Receivables;

 

  (b)

the proceeds of the disposal of such Discounting Invoice Receivables are immediately deposited into a Collection Account; and

 

  (c)

details of the Discounting Invoice Receivables and related Discounting Invoice have been, or will be, disclosed to the Agent in the Loan to Value Ratio Certificate delivered to the Agent immediately following such disposal in accordance with paragraph (c) of Clause 22.11 (Loan to Value Ratio Certificate).

“Permitted Security” means:

 

  (a)

any lien arising by operation of law and in the ordinary course of trading of a Borrower and not as a result of any default or omission by any member of the Group;

 

  (b)

any payment or close out netting or set-off arrangement pursuant to any Treasury Transaction or foreign exchange transaction entered into by a Borrower which constitutes Permitted Financial Indebtedness, excluding any Security or Quasi-Security under a credit support arrangement;

 

  (c)

any Security or Quasi-Security over or affecting any asset acquired by a Borrower after the First Amendment Effective Date if:

 

22


  (i)

the Security or Quasi-Security was not created in contemplation of the acquisition of that asset by that Borrower;

 

  (ii)

the principal amount secured has not been increased in contemplation of or since the acquisition of that asset by that Borrower; and

 

  (iii)

the Security or Quasi-Security is removed or discharged within three months of the date of acquisition of such asset;

 

  (d)

any Security or Quasi-Security arising under any retention of title, hire purchase or conditional sale arrangement or arrangements having similar effect in respect of goods supplied to a Borrower in the ordinary course of trading and on the supplier’s standard or usual terms and not arising as a result of any default or omission by any member of the Group;

 

  (e)

any Quasi-Security arising as a result of a disposal which is a Permitted Disposal;

 

  (f)

any Security or Quasi-Security arising as a consequence of any Finance Lease permitted pursuant to paragraph (c) of the definition of “Permitted Financial Indebtedness”; or

 

  (g)

any Security granted over receivables and inventory of Alliance One Malawi financed by the Standard Bank Facility Agreement, other than any assets of Alliance One Malawi which are subject to Transaction Security.

“Permitted Transaction” means any disposal required, Financial Indebtedness incurred, guarantee, indemnity or Security or Quasi-Security given, or other transaction arising, under the Finance Documents.

“Products” means green leaf tobacco and processed tobacco for export, in each case, which is purchased, processed and packaged by the Borrowers and in the case of Alliance One Malawi only, which is financed by the Finance Parties.

“Q2 2021 Amendment Agreement” means the amendment agreement dated 24 June 2021 entered into between, amongst others, the Obligors, the Arranger, the Agent and the Security Agent, pursuant to which this Agreement was amended.

“Q2 2021 Amendment Agreement Effective Date” has the meaning given to the term “Amendment Agreement Effective Date” in the Q2 2021 Amendment Agreement.

“Q2 2022 Amendment Agreement” means the amendment agreement dated 26 May 2022 entered into between, amongst others, the Obligors, the Arranger, the Agent and the Security Agent, pursuant to which this Agreement and the AOI LLC 2020 Receivables Assignment Agreement was amended.

“Quarter Date” means each of 31 March, 30 June, 30 September and 31 December.

“Quasi-Security” has the meaning given to that term in Clause 24.12 (Negative pledge).

 

23


“Quotation Day” means, in relation to any period for which an interest rate is to be determined, two Business Days before the first day of that period unless market practice differs in the Relevant Market, in which case the Quotation Day will be determined by the Agent in accordance with market practice in the Relevant Market (and if quotations would normally be given on more than one day, the Quotation Day will be the last of those days).

“Receivables Assignment Agreement” means each assignment agreement over any Borrower’s or AOI LLC’s rights, title and interest in and to receivables arising under any End Sales Contract between that Borrower or AOI LLC and the Security Agent, including the AOI LLC 2020 Receivables Assignment Agreement, the Malawian 2020 Security Agreement, the Tanzanian 2020 Receivables Assignment Agreement and the Zambian 2020 Receivables Assignment Agreement.

“Receiver” means a receiver and manager or administrative receiver of the whole or any part of the Charged Property.

“Related Fund” in relation to a fund (the “first fund”), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.

“Relevant Group” means each Obligor and AOI LLC.

“Relevant Jurisdiction” means, in relation to an Obligor:

 

  (a)

its Original Jurisdiction;

 

  (b)

any jurisdiction where any asset subject to or intended to be subject to the Transaction Security to be created by it is situated;

 

  (c)

any jurisdiction where it conducts its business; and

 

  (d)

the jurisdiction whose laws govern the perfection of any of the Transaction Security Documents entered into by it.

“Relevant Market” means the London interbank market.

“Repayment Date” means:

 

  (a)

in relation to any Existing Loan, the date set out in part I (Existing Loans) of schedule 1 (Existing Loans and Commitments) of the Fourth Amendment and Restatement Agreement opposite the disbursement number of such Existing Loan in the column titled “Repayment Date”;

 

  (b)

in relation to any New Loan, the date set out as such in the Utilisation Request for that Loan.

 

24


“Replacement Malawian Collateral Management Agreement” means the collateral management agreement entered into or to be entered into between the Security Agent, Alliance One Malawi and Transcom Sharaf Limited, relating to tobacco stocks stored in Malawi and in form and substance satisfactory to the Security Agent.

“Repeating Representations” means each of the representations set out in Clause 21.2 (Status) to Clause 21.7 (Governing law and enforcement), Clause 21.11 (No default), Clause 21.12(d) (No misleading information), Clause 21.13(d), Clause 21.13(e) and Clause 21.13(f) (Financial Statements), Clause 21.19 (Sanctions), Clause 21.21 (Ranking) to Clause 21.23 (Legal and beneficial ownership), Clause 21.27 (Sales Contracts) and Clause 21.28 (Centre of main interests and establishments).

“Representative” means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

“Sales Contract” means an End Sales Contract or an Intermediate Sale Contract.

“Sanctioned Country” means at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the date of the Fourth Amendment and Restatement Agreement, including Crimea, Cuba, Iran, North Korea and Syria).

“Sanctioned Person” means at any time:

 

  (a)

any person listed in any Sanctions-related list of designated persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the United Nations Security Council, the European Union, any European Union member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority;

 

  (b)

any person operating, organized or resident in a Sanctioned Country;

 

  (c)

any person owned or controlled by any such person or persons described in the foregoing paragraphs (a) or (b); or

 

  (d)

any person otherwise the subject of any Sanctions.

“Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by:

 

  (a)

the African Union;

 

  (b)

the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State;

 

  (c)

the United Nations Security Council;

 

  (d)

the European Union;

 

  (e)

any European Union member state;

 

  (f)

Her Majesty’s Treasury of the United Kingdom; or

 

  (g)

other relevant sanctions authorities.

 

25


“Screen Rate” means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for dollars for a 12 month period displayed (before any correction, recalculation or republication by the administrator) on page LIBOR01 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If such page or service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Obligors’ Agent.

“Seasonal Review Effective Date” means, with respect to a Seasonal Review Period in any year, 30 June of that year.

“Seasonal Review Period” means, in respect of each year, the period from and including 1 February to and including 30 April in that year.

“Seasonal Trade Finance Facility Agreement” means the secured seasonal trade finance facility agreement originally dated 26 March 2019 (as amended and restated by an amendment and restatement agreement dated 19 May 2020), as further amended, modified, supplemented and renewed from time to time, entered into between Mashonaland Tobacco Company (PVT) Limited as borrower, Alliance One Malawi and Alliance One International GmbH as guarantors and Standard Finance (Isle of Man) Limited as lender.

“Second Amendment and Restatement Agreement” means the amendment and restatement agreement dated 24 August 2020 entered into between (amongst others), the Obligors, the Arranger, the Agent and the Security Agent pursuant to which this Agreement was amended and restated for the second time.

“Secured Obligations” means the Malawian Secured Obligations, the Tanzanian Secured Obligations and the Zambian Secured Obligations.

“Secured Parties” means each Finance Party from time to time party to this Agreement and any Receiver or Delegate.

“Secured Receivables” has the meaning given to such term in Clause 23.1 (Definitions).

“Security” means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

“Shipment” means a shipment of Products that is being, has been or will be delivered under a Sales Contract.

“Specified Time” means a time determined in accordance with Schedule 6 (Timetables).

“Spot Rate of Exchange” means any publicly available spot rate of exchange selected by the Agent (acting reasonably), for the purchase of the relevant Local Currency with dollars in any foreign exchange market selected by the Agent (acting reasonably) at a time reasonably selected by the Agent (acting reasonably) on a particular day.

 

26


“Standard Bank Facility Agreement” means the secured seasonal trade finance facility agreement originally dated 21 October 2014 (as amended and restated by way of an amendment and restatement agreement dated 19 May 2020), as further amended, modified, supplemented, and renewed from time to time, entered into between Alliance One International GmbH as borrower, Alliance One Malawi and Mashonaland Tobacco Company (PVT) Limited as guarantors and The Standard Bank of South Africa Limited, Isle of Man Branch as lender.

“Subsidiary” means any person (referred to as the “first person”) in respect of which another person (referred to as the “second person”):

 

  (a)

holds a majority of the voting rights in that first person or has the right under the constitution of the first person to direct the overall policy of the first person or alter the terms of its constitution; or

 

  (b)

is a member of that first person and has the right to appoint or remove a majority of its board of directors or equivalent administration, management or supervisory body; or

 

  (c)

has the right to exercise a dominant influence (which must include the right to give directions with respect to operating and financial policies of the first person which its directors are obliged to comply with whether or not for its benefit) over the first person by virtue of provisions contained in the articles (or equivalent) of the first person or by virtue of a control contract which is in writing and is authorised by the articles (or equivalent) of the first person and is permitted by the law under which such first person is established; or

 

  (d)

is a member of that first person and controls alone, pursuant to an agreement with other shareholders or members, a majority of the voting rights in the first person or the rights under its constitution to direct the overall policy of the first person or alter the terms of its constitution; or

 

  (e)

has the power to exercise, or actually exercises dominant influence or control over the first person; or

 

  (f)

together with the first person are managed on a unified basis,

and, for the purposes of this definition, a person shall be treated as a member of another person if any of that person’s Subsidiaries is a member of that other person or if any shares in that other person are held by a person acting on behalf of it or any of its Subsidiaries.

“Tanzanian 2015 Debenture” means the Tanzanian law governed debenture deed dated 20 July 2015 and registered at the Tanzanian Companies Registry on 20 July 2015 entered into between Alliance One Tanzania and the Original Lender.

 

27


“Tanzanian 2015 Debenture Amendment Agreement” means the Tanzanian law governed deed of amendment to the Tanzanian 2015 Debenture dated 17 August 2020 entered into between Alliance One Tanzania and the Original Lender.

“Tanzanian 2015 Receivables Assignment Agreement” means the English law governed deed of assignment of receivables dated 20 July 2015 as amended by the first addendum dated 22 June 2018 entered into between Alliance One Tanzania and the Original Lender.

“Tanzanian 2020 Account Security Agreement” means the Tanzanian law governed account security agreement dated 17 August 2020 entered into between Alliance One Tanzania and the Security Agent.

“Tanzanian 2020 Contractual Rights Assignment Agreement” means the Tanzanian law governed contractual rights assignment agreement relating to Alliance One Tanzania’s Intermediate Sales Contracts dated 18 August 2020 entered into between Alliance One Tanzania and the Security Agent and which forms part of, and is included in, the Tanzanian 2020 Debenture.

“Tanzanian 2020 Debenture” means the Tanzanian law governed debenture deed dated 18 August 2020 entered into between Alliance One Tanzania and the Security Agent.

“Tanzanian 2020 Receivables Assignment Agreement” means the Tanzanian law governed receivables assignment agreement relating to Alliance One Tanzania’s End Sales Contracts dated 18 August 2020 entered into between Alliance One Tanzania and the Security Agent and which forms part of, and is included in, the Tanzanian 2020 Debenture.

“Tanzanian 2021 Deeds of Variation” means:

 

  (a)

the deed of amendment dated 22 July 2021 entered into by Alliance One Tanzania and the Security Agent relating to the Tanzanian 2020 Debenture (including the Tanzanian 2020 Receivables Assignment Agreement and Tanzanian 2020 Contractual Rights Assignment Agreement);

 

  (b)

the deed of amendment dated 22 July 2021 entered into by Alliance One Tanzania and the Security Agent relating to the Tanzanian 2015 Debenture and Tanzanian 2015 Debenture Amendment Agreement; and

 

  (c)

the deed of amendment dated 22 July 2021 entered into by Alliance One Tanzania and the Security Agent relating to the Tanzanian 2020 Account Security Agreement.

“Tanzanian Collateral Management Agreement” means the collateral management agreement dated 25 March 2022 entered into between the Security Agent, Alliance One Tanzania and the Tanzanian Collateral Manager.

“Tanzanian Collateral Manager” means C. Steinweg Bridge Tanzania Ltd., or such other collateral manager acceptable to the Lenders.

 

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“Tanzanian Collection Account” means the bank account opened and maintained in Alliance One Tanzania’s name and designated the “Alliance One Tanzania Collection Account” by AOI LLC with the Collection Account Bank in accordance with Clause 26.1 (Designation of Collection Accounts) and includes any interest of AOI LLC in any replacement account or any sub-division or sub-account of that account.

“Tanzanian Facility Commitment” means:

 

  (a)

in relation to the Original Lender, the amount set opposite its name under the heading “Tanzanian Facility Commitment” in Schedule 1 (Revised Commitments) and the amount of any other Tanzanian Facility Commitment transferred to it under this Agreement; and

 

  (b)

in relation to any other Lender, the amount of any Tanzanian Facility Commitment transferred to it under this Agreement,

to the extent not cancelled, reduced or transferred by it under this Agreement.

“Tanzanian Facility Loan” means a loan made or to be made under the Tanzanian Facility or the principal amount outstanding for the time being of that loan.

“Tanzanian Facility” means the revolving credit facility made available under this Agreement as described in Clause 2.1(b) (The Facilities).

“Tanzanian Local Account” means the bank account opened and maintained by Alliance One Tanzania with the Tanzanian Local Account Bank in accordance with Clause 26.3(b) (Designation of Local Accounts) and includes any interest of Alliance One Tanzania in any replacement account or any sub-division or sub-account of that account.

“Tanzanian Local Account Bank” means Stanbic Bank Tanzania Ltd.

“Tanzanian Secured Obligations” means all obligations at any time due, owing or incurred by Alliance One Tanzania to any Secured Party under the Finance Documents to which Alliance One Tanzania is a party, including the obligations set out in Clause 31.2 (Parallel debt (Covenant to pay the Security Agent)) whether present or future, actual or contingent (and whether incurred solely or jointly and whether as principal or surety or in some other capacity).

“Tanzanian Security Documents” means:

 

  (a)

Tanzanian 2015 Debenture;

 

  (b)

Tanzanian 2015 Debenture Amendment Agreement;

 

  (c)

Tanzanian 2015 Receivables Assignment Agreement;

 

  (d)

Tanzanian 2020 Account Security Agreement;

 

  (e)

Tanzanian 2020 Contractual Rights Assignment Agreement;

 

  (f)

Tanzanian 2020 Debenture;

 

29


  (g)

Tanzanian 2020 Receivables Assignment Agreement; and

 

  (h)

each Tanzanian 2021 Deed of Variation.

“Tax” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

“Termination Date” means, in relation to a Facility, 30 June 2024, or such earlier date as may be determined for that Facility in accordance with Clause 3 (Seasonal Review).

“Test Date” means, save as otherwise provided in this Agreement:

 

  (a)

each Utilisation Date; and

 

  (b)

the first day of each calendar month, starting with the calendar month commencing after the first Utilisation Date.

“Third Amendment and Restatement Agreement” means the amendment and restatement agreement dated 12 August 2021 entered into between (amongst others), the Borrowers, the Arranger, the Agent and the Security Agent pursuant to which this Agreement was amended and restated for the third time.

“Top Tier End Buyer” means:

 

  (a)

Philip Morris International Management, a corporation organised under the laws of Switzerland;

 

  (b)

JT International SA, a corporation organised under the laws of Switzerland;

 

  (c)

China Tobacco International Inc., a corporation organised under the laws of China;

 

  (d)

Eastern Company S.A.E., a corporation organised under the laws of Egypt;

 

  (e)

British American Tobacco (GLP) Ltd., a corporation organised under the laws of England;

 

  (f)

PT. Sumatra Tobacco Trading Company, a corporation organised under the laws of Indonesia;

 

  (g)

KT&G Corporation, a corporation organised under the laws of Korea;

 

  (h)

Imperial Tobacco Polska S.A., a corporation organised under the laws of Poland;

 

  (i)

Philip Morris USA, a corporation organised under the laws of the United States of America;

 

  (j)

BMJ Industries FZ LLC;

 

  (k)

Brasfumo del Paraguay S.A.;

 

30


  (l)

International Masis Tabak LLC;

 

  (m)

Scandinavian Tobacco Group Assens;

 

  (n)

United Tobacco Company Spa;

 

  (o)

Globe Leaf LLC;

 

  (p)

European Tobacco Sigara ve;

 

  (q)

Regie Libanaise Des Tabacs Et Tomba;

 

  (r)

Tutun-CTC S.A.; and

 

  (s)

Caspian Galaxy LLC,

and in each case, their Affiliates.

“Total Commitments” means the aggregate of the Total Malawi Facility Commitments, Total Tanzanian Facility Commitments and Total Zambian Facility Commitments, being USD 185,000,000 as at the Fourth Amendment Effective Date.

“Total Malawi Facility Commitments” means, at any time, the aggregate of the Malawi Facility Commitments at that time, being USD 100,000,000 as at the Fourth Amendment Effective Date.

“Total Tanzanian Facility Commitments” means, at any time, the aggregate of the Tanzanian Facility Commitments at that time, being USD 70,000,000 as at the Fourth Amendment Effective Date.

“Total Zambian Facility Commitments” means, at any time, the aggregate of the Zambian Facility Commitments, being USD 15,000,000 as at the Fourth Amendment Effective Date.

“Transaction Accounts” means the Collection Accounts and the Local Accounts.

“Transaction Documents” means the Finance Documents and the Sales Contracts.

“Transaction Security” means the Security created or expressed to be created in favour of the Security Agent (or the Original Lender in respect of any Security created prior to the First Amendment Effective Date) pursuant to the Transaction Security Documents.

“Transaction Security Documents” means each of:

 

  (a)

the Malawian Security Documents;

 

  (b)

the Tanzanian Security Documents;

 

  (c)

the Zambian Security Documents; and

 

  (d)

the AOI LLC Security Documents,

 

31


together with any other document entered into by any Obligor or AOI LLC creating or expressed to create any Security over all or any part of its assets in respect of any of the obligations of any of the Obligors under any of the Finance Documents.

“Transfer Certificate” means a certificate substantially in the form set out in Schedule 3 (Form of Transfer Certificate) or any other form agreed between the Agent and the Obligors’ Agent.

“Transfer Date” means, in relation to an assignment or a transfer, the later of:

 

  (a)

the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and

 

  (b)

the date on which the Agent executes the relevant Assignment Agreement or Transfer Certificate.

“Transportation Documents” means, in relation to a Shipment, bills of lading, purchase orders, commercial invoices (including any invoice or other applicable written payment instruction issued by a Borrower to an Intermediate Buyer pursuant or relating to an Intermediate Sales Contract or by a Borrower or AOI LLC to an End Buyer pursuant to or relating to an End Sales Contract) and, upon the request of the Agent, any document relating to that Shipment when in the process of transportation, including all documents to be delivered under the relevant Sales Contract.

“Treasury Transactions” means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price.

“Unpaid Sum” means any sum due and payable but unpaid by an Obligor under the Finance Documents.

“Unproductive Fixed Asset” means any fixed asset which is not used by that Borrower in the purchasing, processing or packaging of tobacco and does not otherwise contribute materially to the manufacturing operations of that Borrower.

“Utilisation” means a utilisation of a Facility.

“Utilisation Date” means the date of a Utilisation, being the date on which the relevant Loan is to be made.

“Utilisation Request” means a notice substantially in the relevant form set out in Schedule 2 (Form of Utilisation Request).

“VAT” means:

 

  (a)

any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

 

  (b)

any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.

 

32


“Zambian 2015 Receivables Assignment Agreement” means the Zambian law governed deed of assignment of receivables dated 6 February 2015 entered into between Alliance One Zambia and the Original Lender.

“Zambian 2015 Receivables Assignment Agreement Deed of Variation” means the Zambian law governed amendment agreement relating to the Zambian 2015 Receivables Assignment Agreement dated 17 August 2020 entered into between Alliance One Zambia and the Original Lender.

“Zambian 2018 Fixed and Floating Charge” means the Zambian law governed fixed and floating charge dated 25 June 2018 entered into between Alliance One Zambia and the Original Lender.

“Zambian 2020 Account Security Agreement” means the Zambian law governed account security agreement dated 18 August 2020 entered into between Alliance One Zambia and the Security Agent.

“Zambian 2020 Contractual Rights Assignment Agreement” means the Zambian law governed contractual rights assignment agreement relating to Alliance One Zambia’s Intermediate Sales Contracts dated 17 August 2020 entered into between Alliance One Zambia and the Security Agent.

“Zambian 2020 Receivables Assignment Agreement” means the Zambian law governed deed of assignment of receivables relating to Alliance One Zambia’s End Sales Contracts dated 17 August 2020 entered into between Alliance One Zambia and the Security Agent.

“Zambian Collection Account” means the bank account opened and maintained in Alliance One Zambia’s name and designated the “Alliance One Zambia Collection Account” by AOI LLC with the Collection Account Bank in accordance with Clause 26.1 (Designation of Collection Accounts) and includes any interest of AOI LLC in any replacement account or any sub-division or sub-account of that account.

“Zambian Facility” means the revolving credit facility made available under this Agreement as described in Clause 2.1(c) (The Facilities).

“Zambian Facility Commitment” means:

 

  (a)

in relation to the Original Lender, the amount set opposite its name under the heading “Zambian Facility Commitment” in Schedule 1 (Revised Commitments) and the amount of any other Zambian Facility Commitment transferred to it under this Agreement; and

 

  (b)

in relation to any other Lender, the amount of any Zambian Facility Commitment transferred to it under this Agreement,

to the extent not cancelled, reduced or transferred by it under this Agreement.

“Zambian Facility Loan” means a loan made or to be made under the Zambian Facility or the principal amount outstanding for the time being of that loan.

 

33


“Zambian June 2018 Receivables Assignment Agreement” means the Zambian law governed deed of assignment of receivables dated 25 June 2018 entered into between Alliance One Zambia and the Original Lender.

“Zambian Local Account” means the bank account opened and maintained by Alliance One Zambia with the Zambian Local Account Bank in accordance with Clause 26.3(c) (Designation of Local Accounts) and includes any interest of Alliance One Zambia in any replacement account or any sub-division or sub-account of that account.

“Zambian Local Account Bank” means ABSA Zambia Plc.

“Zambian Secured Obligations” means all obligations at any time due, owing or incurred by Alliance One Zambia to any Secured Party under the Finance Documents, to which Alliance One Zambia is a party, including the obligations set out in Clause 31.2 (Parallel debt (Covenant to pay the Security Agent)) whether present or future, actual or contingent (and whether incurred solely or jointly and whether as principal or surety or in some other capacity).

“Zambian Security Documents” means:

 

  (a)

Zambian 2015 Receivables Assignment Agreement;

 

  (b)

Zambian 2015 Receivables Assignment Agreement Deed of Variation;

 

  (c)

Zambian June 2018 Receivables Assignment Agreement;

 

  (d)

Zambian September 2018 Receivables Assignment Agreement;

 

  (e)

Zambian 2018 Fixed and Floating Charge;

 

  (f)

Zambian 2020 Account Security Agreement;

 

  (g)

Zambian 2020 Contractual Rights Assignment Agreement; and

 

  (h)

Zambian 2020 Receivables Assignment Agreement.

“Zambian September 2018 Receivables Assignment Agreement” means the Zambian law governed deed of assignment of receivables dated 13 September 2018 entered into between Alliance One Zambia and the Original Lender.

 

1.2

Construction

 

  (a)

Unless a contrary indication appears, a reference in this Agreement to:

 

  (i)

the “Agent”, the “Arranger”, any “Finance Party”, any “Lender”, any “Obligor”, any “Party”, any “Secured Party”, the “Security Agent” or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under the Finance Documents and, in the case of the Security Agent, any person for the time being appointed as Security Agent or Security Agents in accordance with the Finance Documents;

 

34


  (ii)

a document in “agreed form” is a document which is previously agreed in writing by or on behalf of the Obligors’ Agent and the Agent or, if not so agreed, is in the form specified by the Agent;

 

  (iii)

“assets” includes present and future properties, revenues and rights of every description;

 

  (iv)

a “Finance Document” or a “Transaction Document” or any other agreement or instrument is a reference to that Finance Document or Transaction Document or other agreement or instrument as amended, novated, supplemented, extended or restated;

 

  (v)

a “group of Lenders” includes all the Lenders;

 

  (vi)

“guarantee” means (other than in Clause 20 (Guarantee and Indemnity)) any guarantee, letter of credit, bond, indemnity or similar assurance against loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person where, in each case, such obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness;

 

  (vii)

“indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

 

  (viii)

a “person” includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium, partnership or other entity (whether or not having separate legal personality);

 

  (ix)

a “regulation” includes any regulation, rule, official directive or legally binding request of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation;

 

  (x)

a provision of law is a reference to that provision as amended or re-enacted from time to time; and

 

  (xi)

a time of day is a reference to London time.

 

  (b)

The determination of the extent to which a rate is “for a period equal in length” to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.

 

  (c)

Section, Clause and Schedule headings are for ease of reference only.

 

  (d)

Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

 

35


  (e)

A Default (other than an Event of Default) is “continuing” if it has not been remedied or waived and an Event of Default is “continuing” if it has not been waived.

 

1.3

Currency symbols and definitions

In any Finance Document “$”, “USD” and “dollars” denote the lawful currency of the United States of America.

 

1.4

Third party rights

 

  (a)

Unless expressly provided to the contrary in a Finance Document a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the “Third Parties Act”) to enforce or enjoy the benefit of any term of this Agreement.

 

  (b)

Notwithstanding any term of any Finance Document the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.

 

36


SECTION 2

THE FACILITIES

 

2.

THE FACILITIES

 

2.1

The Facilities

Subject to the terms of this Agreement, the Lenders make available:

 

  (a)

to Alliance One Malawi, a revolving credit facility in an aggregate amount equal to the Total Malawi Facility Commitments;

 

  (b)

to Alliance One Tanzania, a revolving credit facility in an aggregate amount equal to the Total Tanzanian Facility Commitments; and

 

  (c)

to Alliance One Zambia, a revolving credit facility in an aggregate amount equal to the Total Zambian Facility Commitments.

 

2.2

Finance Parties’ rights and obligations

 

  (a)

The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

 

  (b)

The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor is a separate and independent debt in respect of which a Finance Party shall be entitled to enforce its rights in accordance with Clause 2.2(c). The rights of each Finance Party include any debt owing to that Finance Party under the Finance Documents and, for the avoidance of doubt, any part of a Loan or any other amount owed by an Obligor which relates to a Finance Party’s participation in a Facility or its role under a Finance Document (including any such amount payable to the Agent on its behalf) is a debt owing to that Finance Party by that Obligor.

 

  (c)

A Finance Party may, except as specifically provided in the Finance Documents, separately enforce its rights under or in connection with the Finance Documents.

 

2.3

Obligors’ Agent

 

  (a)

Each Obligor by its execution of the Fourth Amendment and Restatement Agreement irrevocably appoints the Parent (acting through one or more authorised signatories) to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises:

 

  (i)

the Parent on its behalf to supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions, to make such agreements and to effect the relevant amendments, supplements and variations capable of being

 

37


  given, made or effected by any Obligor notwithstanding that they may affect the Obligor, without further reference to or the consent of that Obligor; and

 

  (ii)

each Finance Party to give any notice, demand or other communication to that Obligor pursuant to the Finance Documents to the Parent,

and in each case the Obligor shall be bound as though the Obligor itself had given the notices and instructions or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.

 

  (b)

Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Obligors’ Agent or given to the Obligors’ Agent under any Finance Document on behalf of another Obligor or in connection with any Finance Document (whether or not known to any other Obligor and whether occurring before or after such other Obligor became an Obligor under any Finance Document) shall be binding for all purposes on that Obligor as if that Obligor had expressly made, given or concurred with it. In the event of any conflict between any notices or other communications of the Obligors’ Agent and any other Obligor, those of the Obligors’ Agent shall prevail.

 

3.

SEASONAL REVIEW

 

  (a)

If, in relation to any Facility, a Lender notifies the Agent during a Seasonal Review Period that:

 

  (i)

it requires all of its Commitments under that Facility to be cancelled and all of the Loans owed to it under that Facility to be repaid on the Seasonal Review Effective Date relating to that Seasonal Review Period (any such Lender being an “Exiting Lender” and any such notice being an “Exiting Lender Notice”);

 

  (ii)

it requires part (but not all) of its Commitments under that Facility to be cancelled and/or part (but not all) of the Loans owed to it under that Facility to be repaid on the Seasonal Review Effective Date relating to that Seasonal Review Period (any such Lender being a “Decreasing Lender” and any such notice being a “Decreasing Lender Notice”);

 

  (iii)

it has agreed with the relevant Borrower that the Margin applicable to any Loans under that Facility should be increased or decreased to a specific percentage per annum following the Seasonal Review Effective Date relating to that Seasonal Review Period (any such Lender being a “Margin Change Lender” and any such notice being a “Margin Change Notice”); or

 

  (iv)

the Facility Fee applicable under that Facility (payable pursuant to Clause 14.1 (a “Facility Fee”)) should be increased or decreased to a specific percentage per annum following the Seasonal Review Effective Date relating to that Seasonal Review Period (any such Lender being a “Facility Fee Change Lender” and any such notice being a “Facility Fee Notice”),

 

38


the Agent will promptly forward such notice to the Parent and the relevant Borrower under that Facility, including any further details provided by the Exiting Lender, the Decreasing Lender, the Margin Change Lender or the Facility Fee Change Lender (as applicable).

 

  (b)

Following the delivery of:

 

  (i)

an Exiting Lender Notice by an Exiting Lender in relation to a Facility in accordance with paragraph (a) above, all of the Commitments of that Exiting Lender under that Facility will be cancelled, and the relevant Borrower must repay all of the Loans owed to that Lender, in each case on the relevant Seasonal Review Effective Date; or

 

  (ii)

a Decreasing Lender Notice by a Decreasing Lender in relation to a Facility in accordance with paragraph (a) above, the Commitments of that Decreasing Lender under that Facility that are requested to be cancelled in the Decreasing Lender Notice will be cancelled, and the relevant Borrower must repay the amount of the Loans owed to that Lender that are requested to be repaid in the Decreasing Lender Notice, in each case on the relevant Seasonal Review Effective Date.

 

  (c)

Notwithstanding anything to the contrary in this Agreement, the Agent is entitled to apply any amount received from a Borrower pursuant to paragraph (b) above against amounts owed to the relevant Exiting Lender or Decreasing Lender (as the case may be) under the relevant Facility, rather than pro rata across all Lenders under the relevant Facility.

 

  (d)

Following the cancellation of all of an Exiting Lender’s Commitments under a particular Facility in accordance with the above, it will no longer constitute a Lender under that Facility for the purpose of Clause 40 (Amendments and Waivers).

 

  (e)

Following each Seasonal Review Effective Date, the Agent will notify each Lender of the overall Commitments, Available Commitments and the outstanding Loans under each Facility.

 

  (f)

Following the delivery of a Margin Change Notice by a Margin Change Lender in accordance with paragraph (a) above, unless the relevant Borrower or Parent notifies the Agent to object to the proposed change to the Margin prior to the end of the relevant Seasonal Review Period, interest on the amount of any Loans owed to that Margin Change Lender under the relevant Facility will be calculated pursuant to Clause 11.1 (Calculation of interest) using the Margin as specified in the relevant Margin Change Notice from the relevant Seasonal Review Effective Date.

 

  (g)

Following the delivery of a Facility Fee Notice by a Facility Fee Change Lender in accordance with paragraph (a) above, unless the relevant Borrower or Parent notifies the Agent to object to the proposed change to the relevant Facility Fee

 

39


  prior to the end of the relevant Seasonal Review Period, the Parent and the Agent shall enter into a Fee Letter as soon as reasonably practicable after the Facility Fee Notice (and in any event no later than the Seasonal Review Effective Date) using the Facility Fee as specified in that Facility Fee Notice. The Facility Fee will be calculated using the Facility Fee as specified in the relevant Facility Fee Notice from the relevant Seasonal Review Effective Date and, unless agreed otherwise in the relevant Fee Letter, will be payable on the relevant Seasonal Review Effective Date.

 

  (h)

Each Lender is entitled to deliver an Exiting Lender Notice, a Decreasing Lender Notice, a Margin Change Notice or a Facility Fee Notice in relation to any Facility and any Seasonal Review Effective Date in its absolute discretion.

 

  (i)

There is no limitation on the number of Decreasing Lender Notices or Margin Change Notices that a Lender may deliver over the life of the Facilities.

 

  (j)

A Lender may deliver both a Decreasing Lender Notice and a Margin Change Notice in relation to the same Facility and the same Seasonal Review Effective Date, but cannot deliver either a Decreasing Lender Notice or a Margin Change Notice in relation to a Facility and a Seasonal Review Effective Date if it has already delivered an Exiting Lender Notice in respect of that Facility and that Seasonal Review Effective Date (and vice versa).

 

  (k)

Notwithstanding anything contained in this Clause, if a Borrower and the Parent agree with a Lender in writing to any Commitment amounts or pricing terms relating to a Facility following the end of a Seasonal Review Period but prior to the following Seasonal Review Effective Date, such terms will prevail with respect to that Facility from that Seasonal Review Effective Date.

 

4.

PURPOSE

 

4.1

Purpose

Each Borrower shall apply all amounts borrowed by it under the Facilities towards the purchasing, processing and packaging of green leaf tobacco for export.

 

4.2

Monitoring

No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

 

5.

CONDITIONS OF UTILISATION

 

5.1

Initial conditions precedent

[Intentionally left blank]

 

5.2

Further conditions precedent

The Lenders will only be obliged to comply with Clause 6.4 (Lenders’ participation) if on the date of the Utilisation Request and on the proposed Utilisation Date:

 

40


  (a)

no Default is continuing or would result from the proposed Utilisation;

 

  (b)

the Repeating Representations and the AOI LLC Repeating Representations are true in all material respects;

 

  (c)

the Agent is satisfied that:

 

  (i)

the relevant Borrower would be in compliance with Clause 23.2 (Loan to Value ratio); or

 

  (ii)

the relevant Borrower would be in compliance with Clause 23.2 (Loan to Value ratio) within fifteen (15) Business Days of the proposed Utilisation Date as a result of the Borrower prepaying Loans borrowed by it in accordance with Clause 9.4 (Proceeds from Permitted Receivables Disposal),

in each case tested as if the Loan requested was utilised at that time in full and after giving effect to any purchase of any Product to be purchased using the proceeds of such Loan;

 

  (d)

to the extent Products are to be financed by the Loan requested, the Agent has received all of the following documents and other evidence relating to such Products (including by way of documents and other evidence previously delivered), in form and substance satisfactory to it:

 

  (i)

certified copies of any agreement, invoice, other written payment instruction or other document between the relevant Borrower and any Supplier requested by the Agent; and

 

  (ii)

a certified copy of each Sales Contract (and Transportation Documents existing at that time in relation thereto), if available;

 

  (iii)

indications of the identity of the potential End Buyers of the Products, if available; and

 

  (e)

the Agent has received any other documents and other evidence as the Agent may request (in its discretion).

 

41


SECTION 3

UTILISATION

 

6.

UTILISATION

 

6.1

Delivery of a Utilisation Request

A Borrower may utilise a Facility by delivery to the Agent of a duly completed Utilisation Request not later than the Specified Time.

 

6.2

Completion of a Utilisation Request

 

  (a)

Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

 

  (i)

it identifies the Facility to be utilised (which is the Facility made available to that Borrower pursuant to Clause 2.1 (The Facilities));

 

  (ii)

it identifies what the proceeds of the Utilisation will be used for;

 

  (iii)

the proposed Utilisation Date is a Business Day within the Availability Period;

 

  (iv)

the currency and amount of the Utilisation comply with Clause 6.3 (Currency and amount); and

 

  (v)

the proposed Repayment Date is a date that is:

 

  (A)

no later than 360 days after the proposed Utilisation Date; and

 

  (B)

on or earlier than the Termination Date.

 

  (b)

Only one Loan may be requested in each Utilisation Request.

 

6.3

Currency and amount

 

  (a)

The currency specified in a Utilisation Request delivered by a Borrower must be dollars.

 

  (b)

The amount of the proposed Loan must be not more than the Available Facility and a minimum of USD 1,000,000 or, if less, the Available Facility.

 

  (c)

A Borrower may request in a Utilisation Request that a Loan be disbursed in its Local Currency, provided that the Utilisation Request must still specify a dollar amount. The Lenders may consider any such request in their sole discretion, and a Loan will only be made available in that Borrower’s Local Currency if each Lender under the relevant Facility confirms to the Agent that it consents to such request by the Specified Time. No Lender is obliged to make its participation in a Loan available in a Local Currency.

 

  (d)

If all Lenders under the relevant Facility agree to a request from a Borrower pursuant to Clause 6.3(c) by the Specified Time:

 

42


  (i)

the Agent will calculate the amount of the Loan in the relevant Local Currency using the Spot Rate of Exchange on the date which is two Business Days before the Utilisation Date;

 

  (ii)

the Agent shall notify the relevant Borrower and each relevant Lender of the Local Currency amount of such Loan and the amount in the Local Currency of its participation in that Loan by the Specified Time;

 

  (iii)

if the conditions set out in this Agreement have been met, each Lender shall make its participation in the relevant Loan available in the relevant Local Currency by the Utilisation Date through its Facility Office;

 

  (iv)

notwithstanding that the Loan has been made available in a Local Currency, the Loan shall be deemed to be a dollar denominated Loan for all other purposes, the principal amount of which is the dollar amount referred to in the Utilisation Request for that Loan (or the principal amount in dollars outstanding for the time being of that Loan); and

 

  (v)

the Borrower irrevocably acknowledges and agrees that it will be obliged to repay the relevant Loan in dollars.

 

  (e)

If a Borrower requests in a Utilisation Request that a Loan under a Facility be made available in a Local Currency but not all of the Lenders under that Facility provide their consent to such request to the Agent by the Specified Time, no Loan will be made available as a result of such Utilisation Request.

 

6.4

Lenders’ participation

 

  (a)

If the conditions set out in this Agreement have been met, each Lender shall make its participation in each Loan available by the Utilisation Date through its Facility Office.

 

  (b)

The amount of each Lender’s participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan.

 

  (c)

The Agent shall notify each Lender of the amount of each Loan and the amount of its participation in that Loan by the Specified Time.

 

6.5

Cancellation of Commitment

The Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period.

 

43


SECTION 4

REPAYMENT, PREPAYMENT AND CANCELLATION

 

7.

REPAYMENT

Subject to Clause 3 (Seasonal Review), each Borrower must repay each Loan utilised by it on the Repayment Date of such Loan. A Repayment Date must be no later than the Termination Date.

 

8.

VOLUNTARY PREPAYMENT AND CANCELLATION

 

8.1

Voluntary prepayment of Loans

A Borrower may, if it gives the Agent not less than 5 Business Days’ (or such shorter period as the Agent may agree) prior notice, prepay the whole or any part of a Loan (but, if in part, being an amount that reduces the amount of that Loan by a minimum amount of USD 1,000,000).

 

8.2

Right of replacement or repayment and cancellation in relation to a single Lender

 

  (a)

If:

 

  (i)

any sum payable to any Lender by an Obligor is required to be increased under Clause 15.2(c) (Tax gross-up); or

 

  (ii)

any Lender claims indemnification from the Obligors’ Agent (or a Borrower, as applicable) under Clause 15.3 (Tax indemnity) or Clause 16.1 (Increased Costs),

the Obligors’ Agent may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Agent notice of cancellation of the Commitment(s) of that Lender and its intention to procure the repayment of that Lender’s participation in the Loans.

 

  (b)

On receipt of a notice of cancellation referred to in Clause 8.2(a), the Commitment(s) of that Lender shall immediately be reduced to zero.

 

  (c)

On the last day of each Interest Period which ends after the Obligors’ Agent has given notice of cancellation under Clause 8.2(a) (or, if earlier, the date specified by the Obligors’ Agent in that notice), each relevant Borrower shall repay that Lender’s participation in that Loan together with all interest and other amounts accrued under the Finance Documents and that Lender’s corresponding Commitment shall be immediately cancelled in the amount of the participations repaid.

 

8.3

Right of cancellation in relation to a Defaulting Lender

 

  (a)

If any Lender (other than the Original Lender) becomes a Defaulting Lender, the Obligors’ Agent may, at any time whilst the Lender continues to be a Defaulting Lender, give the Agent 10 Business Days’ notice of cancellation of each Available Commitment of that Lender.

 

44


  (b)

On the notice referred to in paragraph (a) above becoming effective, each Available Commitment of the Defaulting Lender shall be immediately reduced to zero.

 

  (c)

The Agent shall as soon as practicable after receipt of a notice referred to in paragraph (a) above, notify all the Lenders.

 

9.

MANDATORY PREPAYMENT AND CANCELLATION

 

9.1

Illegality

If, in any applicable jurisdiction, it is or becomes unlawful for a Lender to perform any of its obligations as contemplated by this Agreement or to fund, issue or maintain its participation in any Loan:

 

  (a)

that Lender shall promptly notify the Agent upon becoming aware of that event;

 

  (b)

upon the Agent notifying each relevant Borrower, each relevant Available Commitment of that Lender will be immediately cancelled; and

 

  (c)

each Borrower shall repay that Lender’s participation in the affected Loans made to it on the last day of the Interest Period for each such Loan occurring after the Agent has delivered such notice or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law) and that Lender’s corresponding affected Commitments shall be immediately cancelled in the amount of the participations repaid.

 

9.2

Change of Control

Upon the occurrence of:

 

  (a)

a Change of Control; or

 

  (b)

the sale of all or substantially all of the assets of any Obligor whether in a single transaction or a series of related transactions,

 

  (i)

that Obligor or the Obligors’ Agent shall promptly notify the Agent upon becoming aware of that event;

 

  (ii)

a Lender shall not be obliged to fund a Utilisation for a Borrower that is such Obligor (or for any Borrower if such Obligor is a Guarantor); and

 

  (iii)

if a Lender so requires and notifies the Agent within 10 days of an Obligor or the Obligors’ Agent notifying the Agent of the event, the Agent shall, by not less than 10 days’ notice to the relevant Borrower(s), cancel all or part of the Available Commitments of that Lender and declare the participation of that Lender in such Loans as requested by that Lender, together with accrued interest on such Loans, and (if that Lender has requested all Loans owed to it be repaid) all other amounts accrued under the Finance Documents to which it is entitled

 

45


  immediately due and payable, whereupon each such Available Commitment will be immediately cancelled, such Commitments of that Lender shall immediately cease to be available for further utilisation and such Loans, such accrued interest and such other amounts shall become immediately due and payable.

 

9.3

Sale proceeds

 

  (a)

Following the sale of any Product:

 

  (i)

each Borrower shall prepay any Loans borrowed by it in an amount equal to any related sale proceeds received by that Borrower relating to the sale of such Product; and

 

  (ii)

each Borrower shall prepay (or shall procure that AOI LLC prepays) any Loans borrowed by such Borrower in an amount equal to any related sales proceeds received by AOI LLC relating to the sale of such Product,

in each case within 3 Business Days of such receipt and after deducting the relevant amount of sales commission on such sale, up to a maximum amount equal to four per cent. of such sales proceeds (or, in the case of Eastern Sales only, up to a maximum amount equal to six per cent. of such sales proceeds).

 

  (b)

A Borrower shall not be required to prepay any Loans with any sale proceeds it receives from AOI LLC pursuant to an Intermediate Sales Contract in accordance with paragraph (a)(i) above to the extent that corresponding sale proceeds received by AOI LLC pursuant to either:

 

  (i)

the sale of Product under a related End Sales Contract; or

 

  (ii)

the disposal of Discounting Invoice Receivables under a related End Sales Contract,

have already been applied in prepayment of such Loans in accordance with paragraph (a)(ii) above or Clause 9.4 (Proceeds from Permitted Receivables Disposal).

 

9.4

Proceeds from Permitted Receivables Disposal

Following a Permitted Receivables Disposal, the applicable Discounting Borrower shall prepay (or shall procure that AOI LLC prepays) any Loans borrowed by that Discounting Borrower in an amount equal to any sales proceeds received by AOI LLC relating to such Permitted Receivables Disposal within 3 Business Days of such receipt, after deducting the relevant amount of sales commission payable in relation to the Discounting Invoice Receivables sold pursuant to such Permitted Receivables Disposal, up to a maximum amount equal to four per cent. of the book value of such Discounting Invoice Receivables (or, in the case of Eastern Sales only, up to a maximum amount equal to six per cent. of the book value of such Discounting Invoice Receivables).    

 

46


10.

RESTRICTIONS

 

10.1

Notices of cancellation or prepayment

Any notice of cancellation, prepayment, authorisation or other election given by any Party under Clause 8 (Voluntary prepayment and cancellation) or Clause 9 (Mandatory prepayment and cancellation) shall (subject to the terms of those Clauses) be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

 

10.2

Interest and other amounts

Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.

 

10.3

Allocation of prepayments and cancellations

A prepayment of Loans under a Facility by a Borrower pursuant to Clause 8.1 (Voluntary prepayment of Loans), Clause 9.3 (Sale proceeds) or Clause 9.4 (Proceeds from Permitted Receivables Disposal) shall be applied on a pro rata basis as between the Loans and Lenders under that Facility.

 

10.4

Reborrowing

Unless a contrary indication appears in this Agreement, any part of a Facility which is prepaid or repaid may be reborrowed in accordance with the terms of this Agreement.

 

10.5

Prepayment in accordance with Agreement

The Borrowers shall not repay or prepay all or any part of the Loans or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.

 

10.6

No reinstatement of Commitments

No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.

 

10.7

Agent’s receipt of notices

If the Agent receives a notice under Clause 8 (Voluntary prepayment and cancellation) or Clause 9 (Mandatory prepayment and cancellation), it shall promptly forward a copy of that notice or election to either the Obligors’ Agent, the affected Borrower or the affected Lender(s), as appropriate.

 

10.8

Cancellation

If all or part of any Lender’s participation in a Loan is repaid or prepaid and is not available for redrawing (other than by operation of Clause 5.2 (Further conditions precedent)), an amount of that Lender’s Commitment (equal to the amount of the participation which is repaid or prepaid) will be deemed to be cancelled on the date of repayment or prepayment.

 

47


SECTION 5

COSTS OF UTILISATION

 

11.

INTEREST

 

11.1

Calculation of interest

The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:

 

  (a)

Margin; and

 

  (b)

LIBOR.

 

11.2

Payment of interest

The Borrower to which a Loan has been made shall pay accrued interest on that Loan on the last day of the Interest Period of that Loan.

 

11.3

Default interest

 

  (a)

If an Obligor fails to pay any amount payable by it under a Finance Document on its due date:

 

  (i)

interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is two per cent. per annum higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably); and

 

  (ii)

any interest accruing under this Clause 11.3 shall be immediately payable by that Obligor on demand by the Agent.

 

  (b)

If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan:

 

  (i)

the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and

 

  (ii)

the rate of interest applying to the overdue amount during that first Interest Period shall be two per cent. per annum higher than the rate which would have applied if the overdue amount had not become due.

 

  (c)

Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.

 

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11.4

Notification of rates of interest

 

  (a)

The Agent shall promptly notify the Lenders and the relevant Borrower (or the Obligors’ Agent) of the determination of a rate of interest under this Agreement.

 

  (b)

The Agent shall promptly notify the relevant Borrower (or the Obligors’ Agent) of each Funding Rate relating to a Loan.

 

12.

INTEREST PERIODS

 

12.1

Interest Periods

 

  (a)

Each Loan will have a single Interest Period.

 

  (b)

The Interest Period for a Loan will start on its Utilisation Date and end on its Repayment Date.

 

12.2

Non-Business Days

If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

 

13.

CHANGES TO THE CALCULATION OF INTEREST

 

13.1

Unavailability of Screen Rate

If no Screen Rate is available for LIBOR for:

 

  (a)

USD; or

 

  (b)

a 12 month period,

there shall be no LIBOR for that Loan and Clause 13.3 (Cost of funds) shall apply to that Loan for that Interest Period.

 

13.2

Market disruption

If before close of business in London on the Quotation Day for the relevant Interest Period the Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed 40 per cent. of that Loan) that the cost to it of funding its participation in that Loan from whatever source it may reasonably select would be in excess of LIBOR then Clause 13.3 (Cost of funds) shall apply to that Loan for the relevant Interest Period.

 

13.3

Cost of funds

 

  (a)

If this Clause 13.3 applies, the rate of interest on each Lender’s share of the relevant Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:

 

  (i)

the Margin; and

 

49


  (ii)

the rate notified to the Agent by that Lender as soon as practicable and in any event by close of business on the date falling 5 Business Days after the Quotation Day (or, if earlier, on the date falling 5 Business Days before the date on which interest is due to be paid in respect of that Interest Period), to be that which expresses as a percentage rate per annum the cost to the relevant Lender of funding its participation in that Loan from whatever source it may reasonably select.

 

  (b)

If this Clause 13.3 applies and the Agent or the Obligors’ Agent so requires, the Agent and the Obligors’ Agent shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest.

 

  (c)

Any alternative basis agreed pursuant to Clause 13.3(b) shall, with the prior consent of all the Lenders and the Obligors’ Agent, be binding on all Parties.

 

  (d)

If this Clause 13.3 applies pursuant to Clause 13.2 (Market disruption) and:

 

  (i)

a Lender’s Funding Rate is less than LIBOR; or

 

  (ii)

a Lender does not supply a quotation by the time specified in Clause 13.3(a)(ii),

the cost to that Lender of funding its participation in that Loan for that Interest Period shall be deemed, for the purposes of Clause 13.3(a), to be LIBOR.

 

13.4

Notification to Obligors’ Agent

If Clause 13.3 (Cost of funds) applies the Agent shall, as soon as is practicable, notify the Obligors’ Agent and/or any affected Borrowers.

 

13.5

Break Costs

 

  (a)

Each Borrower shall, within three Business Days of demand by a Lender, pay to that Lender its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by that Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.

 

  (b)

Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.

 

14.

FEES

 

14.1

Facility Fee

The Obligors shall pay to the Agent a Facility Fee in the amount and at the times agreed in a Fee Letter.

 

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14.2

Utilisation Fee

 

  (a)

Each Borrower shall pay to the Agent (for the account of each Lender pro rata) a non-refundable fee in dollars computed at the rate of 0.25 per cent of any Loan utilised by that Borrower (“Utilisation Fee”).

 

  (b)

Each Utilisation Fee is payable on or prior to the Utilisation of the Loan to which it relates.

 

51


SECTION 6

ADDITIONAL PAYMENT OBLIGATIONS

 

15.

TAX GROSS UP AND INDEMNITIES

 

15.1

Definitions

In this Agreement:

“Protected Party” means a Finance Party which is or will be subject to any liability or required to make any payment for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.

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

Unless a contrary indication appears, in this Clause 15 a reference to “determines” or “determined” means a determination made in the absolute discretion of the person making the determination.

 

15.2

Tax gross-up

 

  (a)

Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.

 

  (b)

Each Obligor shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Obligors’ Agent and that Obligor.

 

  (c)

If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

 

  (d)

If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

 

  (e)

Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

 

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15.3

Tax indemnity

 

  (a)

Each Obligor shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.

 

  (b)

Clause 15.3(a) shall not apply:

 

  (i)

with respect to any Tax assessed on a Finance Party:

 

  (A)

under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or

 

  (B)

under the law of the jurisdiction in which that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction,

if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or

 

  (ii)

to the extent a loss, liability or cost is compensated for by an increased payment under Clause 15.2 (Tax gross-up).

 

  (c)

A Protected Party making, or intending to make a claim under Clause 15.3(a) shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Obligors’ Agent.

 

  (d)

A Protected Party shall, on receiving a payment from an Obligor under this Clause 15.3, notify the Agent.

 

15.4

Stamp taxes

Each Obligor shall pay and, within three Business Days of demand, indemnify each Secured Party and Arranger against any cost, loss or liability that Secured Party or Arranger incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.

 

15.5

VAT

 

  (a)

All amounts expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to Clause 15.5(b), if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party must pay to such Finance Party

 

53


  (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that Party).

 

  (b)

If VAT is or becomes chargeable on any supply made by any Finance Party (the “VAT Supplier”) to any other Finance Party (the “ VAT Recipient”) under a Finance Document, and any Party other than the VAT Recipient (the “Relevant Party”) is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the VAT Supplier (rather than being required to reimburse or indemnify the VAT Recipient in respect of that consideration):

 

  (i)

(where the VAT Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the VAT Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The VAT Recipient must (where this Clause 15.5(b)(i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the VAT Recipient receives from the relevant tax authority which the VAT Recipient reasonably determines relates to the VAT chargeable on that supply; and

 

  (ii)

(where the VAT Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the VAT Recipient, pay to the VAT Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the VAT Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.

 

  (c)

Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.

 

  (d)

Any reference in this Clause 15.5 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term “representative member” to have the same meaning as in the Value Added Tax Act 1994).

 

  (e)

In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party’s VAT registration and such other information as is reasonably requested in connection with such Finance Party’s VAT reporting requirements in relation to such supply.

 

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16.

INCREASED COSTS

 

16.1

Increased Costs

 

  (a)

Subject to Clause 16.3 (Exceptions), each Obligor shall, within three Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation made after the First Amendment Effective Date.

 

  (b)

In this Agreement “Increased Costs” means:

 

  (i)

a reduction in the rate of return from the Facility or on a Finance Party’s (or its Affiliate’s) overall capital;

 

  (ii)

an additional or increased cost; or

 

  (iii)

a reduction of any amount due and payable under any Finance Document,

which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.

 

16.2

Increased Cost claims

 

  (a)

A Finance Party intending to make a claim pursuant to Clause 16.1 (Increased Costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Obligors’ Agent or a Borrower.

 

  (b)

Any demand or claim made by a Finance Party pursuant to Clause 16.1 (Increased Costs) must be made within 270 days of such Finance Party becoming aware of the event giving rise to that claim.

 

  (c)

Each Finance Party shall, as soon as practicable after a demand by the Agent (on its own behalf or following a request by the relevant Borrower), provide a certificate confirming the amount of its Increased Costs.

 

16.3

Exceptions

 

  (a)

Clause 16.1 (Increased Costs) does not apply to the extent any Increased Cost is:

 

  (i)

attributable to a Tax Deduction required by law to be made by an Obligor;

 

  (ii)

compensated for by Clause 15.3 (Tax indemnity) (or would have been compensated for under Clause 15.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in Clause 15.3(b) (Tax indemnity) applied); or

 

55


  (iii)

attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation.

 

  (b)

In this Clause 16.3, a reference to a “Tax Deduction” has the same meaning given to the term in Clause 15.1 (Definitions).

 

17.

OTHER INDEMNITIES

 

17.1

Currency indemnity

 

  (a)

If any sum due from an Obligor under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:

 

  (i)

making or filing a claim or proof against that Obligor; or

 

  (ii)

obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

that Obligor shall as an independent obligation, within three Business Days of demand, indemnify the Arranger and each other Secured Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

 

  (b)

Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

 

17.2

Other indemnities

 

  (a)

Each Obligor shall, within three Business Days of demand, indemnify the Arranger and each other Secured Party against any cost, loss or liability incurred by it as a result of:

 

  (i)

the occurrence of any Event of Default;

 

  (ii)

a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 33 (Sharing among the Finance Parties);

 

  (iii)

funding, or making arrangements to fund, its participation in a Loan requested by a Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); or

 

56


  (iv)

a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by a Borrower or the Obligors’ Agent.

 

  (b)

Each Obligor shall promptly indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate, against any cost, loss or liability incurred by that Finance Party or its Affiliate (or officer or employee of that Finance Party or Affiliate) in connection with or arising out of the use of proceeds under a Facility or Transaction Security being taken over the Charged Property (including but not limited to those incurred in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry concerning the use of proceeds under the Facility), unless such loss or liability is caused by the gross negligence or wilful misconduct of that Finance Party or its Affiliate (or employee or officer of that Finance Party or Affiliate). Any Affiliate or any officer or employee of a Finance Party or its Affiliate may rely on this Clause 17.2.

 

17.3

Indemnity to the Agent

Each Obligor shall promptly indemnify the Agent against:

 

  (a)

any cost, loss or liability incurred by the Agent (acting reasonably) as a result of:

 

  (i)

investigating any event which it reasonably believes is a Default after sending notice to the relevant Borrower or the Obligors’ Agent on its belief that there is a default;

 

  (ii)

acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or

 

  (iii)

instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement; and

 

  (b)

any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Agent (otherwise than by reason of the Agent’s gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 34.10 (Disruption to payment systems etc.) notwithstanding the Agent’s negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent in acting as Agent under the Finance Documents.

 

17.4

Indemnity to the Security Agent

 

  (a)

Each Obligor jointly and severally shall promptly indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them as a result of:

 

  (i)

any failure by an Obligor to comply with its obligations under Clause 19 (Costs and Expenses);

 

57


  (ii)

acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;

 

  (iii)

the taking, holding, protection or enforcement of the Transaction Security;

 

  (iv)

the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and each Receiver and Delegate by the Finance Documents or by law;

 

  (v)

any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents; or

 

  (vi)

acting as Security Agent, Receiver or Delegate under the Finance Documents or which otherwise relates to any of the Charged Property (otherwise, in each case, than by reason of the relevant Security Agent’s, Receiver’s or Delegate’s gross negligence or wilful misconduct).

 

  (b)

Each Obligor expressly acknowledges and agrees that the continuation of its indemnity obligations under this Clause 17.4 will not be prejudiced by any release under Clause 31.25 (Releases) or otherwise in accordance with the terms of this Agreement.

 

  (c)

The Security Agent and every Receiver and Delegate may, in priority to any payment to the Secured Parties, indemnify itself out of the Charged Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 17.4 and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all moneys payable to it.

 

18.

MITIGATION BY THE LENDERS

 

18.1

Mitigation

 

  (a)

Each Finance Party shall, in consultation with the Obligors’ Agent, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 9.1 (Illegality), Clause 15 (Tax Gross Up and Indemnities) or Clause 16 (Increased Costs) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.

 

  (b)

Clause 18.1(a) does not in any way limit the obligations of any Obligor under the Finance Documents.

 

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18.2

Limitation of liability

 

  (a)

Each Obligor shall promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 18.1 (Mitigation).

 

  (b)

A Finance Party is not obliged to take any steps under Clause 18.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

 

19.

COSTS AND EXPENSES

 

19.1

Transaction expenses

Each Obligor shall promptly on demand pay the Agent, the Arranger and the Security Agent the amount of all costs and expenses (including legal fees) reasonably incurred by any of them (and, in the case of the Security Agent, by any Receiver or Delegate) in connection with the negotiation, preparation, printing, execution and perfection of:

 

  (a)

the Transaction Security, this Agreement and any other documents referred to in this Agreement; and

 

  (b)

any other Finance Documents executed after the First Amendment Effective Date.

 

19.2

Amendment costs

If (a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required pursuant to Clause 34.9 (Change of currency), the Obligors shall, within three Business Days of demand, reimburse each of the Agent and the Security Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent and the Security Agent (and, in the case of the Security Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement.

 

19.3

Security Agent’s management time and additional remuneration

 

  (a)

Any amount payable to the Security Agent under Clause 17.4 (Indemnity to the Security Agent) and this Clause 19 shall include the cost of utilising the Security Agent’s management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Security Agent may notify to the Obligors’ Agent and the Lenders, and is in addition to any other fee paid or payable to the Security Agent.

 

  (b)

Without prejudice to Clause 19.3(a), in the event of:

 

  (i)

a Default;

 

  (ii)

the Security Agent being requested by an Obligor or the Majority Lenders to undertake duties which the Security Agent and the Obligors’ Agent agree to be of an exceptional nature or outside the scope of the normal duties of the Security Agent under the Finance Documents; or

 

59


  (iii)

the Security Agent and the Obligors’ Agent agreeing that it is otherwise appropriate in the circumstances,

the Obligors shall pay to the Security Agent any additional remuneration that may be agreed between them or determined pursuant to Clause 19.3(c).

 

  (c)

If the Security Agent and the Obligors’ Agent fail to agree upon the nature of the duties or upon the additional remuneration referred to in Clause 19.3(b) or whether additional remuneration is appropriate in the circumstances, any dispute shall be determined by an investment bank (acting as an expert and not as an arbitrator) selected by the Security Agent and approved by the Obligors’ Agent or, failing approval, nominated (on the application of the Security Agent) by the President for the time being of the Law Society of England and Wales (the costs of the nomination and of the investment bank being payable by the Obligors) and the determination of any investment bank shall be final and binding upon the Parties.

 

19.4

Enforcement and preservation costs

Each Obligor shall, within three Business Days of demand, pay to the Arranger and each other Secured Party the amount of all costs and expenses (including legal fees) incurred by it in connection with the enforcement of or the preservation of any rights under any Finance Document and the Transaction Security and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Transaction Security or enforcing these rights.

 

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SECTION 7

GUARANTEE

 

20.

GUARANTEE AND INDEMNITY

 

20.1

Guarantee and indemnity

Each Guarantor irrevocably and unconditionally jointly and severally:

 

  (a)

guarantees to each Finance Party punctual performance by each other Obligor of all that Obligor’s obligations under the Finance Documents;

 

  (b)

undertakes with each Finance Party that whenever another Obligor does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and

 

  (c)

agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of an Obligor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 20 if the amount claimed had been recoverable on the basis of a guarantee.

 

20.2

Continuing guarantee

This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.

 

20.3

Reinstatement

If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this Clause 20 will continue or be reinstated as if the discharge, release or arrangement had not occurred.

 

20.4

Waiver of defences

The obligations of each Guarantor under this Clause 20 will not be affected by an act, omission, matter or thing which, but for this Clause 20, would reduce, release or prejudice any of its obligations under this Clause 20 (without limitation and whether or not known to it or any Finance Party) including:

 

  (a)

any time, waiver or consent granted to, or composition with, any Obligor or other person;

 

61


  (b)

the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;

 

  (c)

the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

 

  (d)

any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;

 

  (e)

any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of a Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or increase in any facility or the addition of any new facility under any Finance Document or other document or security;

 

  (f)

any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or

 

  (g)

any insolvency or similar proceedings.

 

20.5

Guarantor intent

Without prejudice to the generality of Clause 20.4 (Waiver of defences), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.

 

20.6

Immediate recourse

Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause 20. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

 

20.7

Appropriations

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:

 

  (a)

refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and

 

62


  (b)

hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor’s liability under this Clause 20.

 

20.8

Deferral of Guarantors’ rights

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 20:

 

  (a)

to be indemnified by an Obligor;

 

  (b)

to claim any contribution from any other guarantor of any Obligor’s obligations under the Finance Documents;

 

  (c)

to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;

 

  (d)

to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under this Clause 20 any guarantee, letter of credit, bond, indemnity or similar assurance;

 

  (e)

to exercise any right of set-off against any Obligor; and/or

 

  (f)

to claim or prove as a creditor of any Obligor in competition with any Finance Party.

If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with Clause 34 (Payment mechanics).

 

20.9

Release of Guarantors’ right of contribution

If any Guarantor (a “Retiring Guarantor”) ceases to be a Guarantor in accordance with the terms of the Finance Documents then on the date such Retiring Guarantor ceases to be a Guarantor:

 

  (a)

that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and

 

63


  (b)

each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor.

 

20.10

Additional security

This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.

 

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SECTION 8

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

 

21.

REPRESENTATIONS

 

21.1

General

Each Obligor makes the representations and warranties set out in this Clause 21 to each Finance Party.

 

21.2

Status

 

  (a)

It is a limited liability corporation, duly incorporated and validly existing under the law of its Original Jurisdiction.

 

  (b)

In respect of each Obligor (other than the Parent Guarantors), it does not have any Subsidiaries.

 

  (c)

It has the power to own its assets and carry on its business as it is being conducted.

 

21.3

Binding obligations

Subject to the Legal Reservations and Perfection Requirements:

 

  (a)

the obligations expressed to be assumed by it in each Transaction Document to which it is a party are legal, valid, binding and enforceable obligations; and

 

  (b)

(without limiting the generality of Clause 21.3(a)), each Transaction Security Document to which it is a party creates the security interests which that Transaction Security Document purports to create and those security interests are valid and effective.

 

21.4

Non-conflict with other obligations

The entry into and performance by it of, and the transactions contemplated by, the Transaction Documents to which it is a party and the granting of the Transaction Security do not and will not conflict with:

 

  (a)

any law or regulation applicable to it;

 

  (b)

the constitutional documents of any member of the Relevant Group; or

 

  (c)

any agreement or instrument binding upon it or any member of the Relevant Group or any of its or any member of the Relevant Group’s assets or constitute a default or termination event (however described) under any such agreement or instrument.

 

21.5

Power and authority

 

  (a)

It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Transaction Documents to which it is or will be a party and the transactions contemplated by those Transaction Documents.

 

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  (b)

No limit on its powers will be exceeded as a result of the borrowing, granting of security or giving of guarantees or indemnities contemplated by the Transaction Documents to which it is a party.

 

21.6

Validity and admissibility in evidence

 

  (a)

All Authorisations and any other acts, conditions or things required or desirable:

 

  (i)

to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which it is a party; and

 

  (ii)

to make the Transaction Documents to which it is a party admissible in evidence in its Relevant Jurisdictions,

have been obtained, effected, done, fulfilled or performed and are in full force and effect except any Authorisation or other act, condition or thing referred to in Clause 21.9 (No filing or stamp taxes), which will be promptly obtained, effected, done, fulfilled or performed after the date of this Agreement.

 

  (b)

All Authorisations necessary for the conduct of the business, trade and ordinary activities of members of the Relevant Group have been obtained or effected and are in full force and effect.

 

  (c)

All the Material Licences have been obtained and are in full force and effect.

 

21.7

Governing law and enforcement

 

  (a)

The choice of governing law of the Transaction Documents will be recognised and enforced in its Relevant Jurisdictions.

 

  (b)

Any judgment obtained in relation to a Transaction Document in the relevant jurisdiction as specified in that Transaction Document will be recognised and enforced in its Relevant Jurisdictions.

 

  (c)

Any arbitral award obtained in relation to a Transaction Document in the relevant seat of that arbitral tribunal specified in that Transaction Document will be recognised and enforced in its Relevant Jurisdictions.

 

21.8

Insolvency

No:

 

  (a)

corporate action, legal proceeding or other procedure or step described in Clause 27.8(a) (Insolvency proceedings); or

 

  (b)

creditors’ process described in Clause 27.9 (Creditors’ process),

 

66


has been taken or, to the knowledge of any Obligor, threatened in relation to a member of the Relevant Group and none of the circumstances described in Clause 27.7 (Insolvency) applies to a member of the Relevant Group.

 

21.9

No filing or stamp taxes

Under the laws of its Relevant Jurisdictions it is not necessary that the Transaction Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation to the Transaction Documents or the transactions contemplated by the Transaction Documents except:

 

  (a)

the Reserve Bank of Malawi must be notified of the changes to the terms of Malawian Facility as soon as reasonably practicable following the execution of the Fourth Amendment and Restatement Agreement, and shall be so notified by Alliance One Malawi delivering a copy of the Fourth Amendment and Restatement Agreement to it;

 

  (b)

the Fourth Amendment and Restatement Agreement must be approved by the Reserve Bank of Malawi as soon as reasonably practicable;

 

  (c)

stamp duty of approximately Tanzania Shillings 2,000 must be affixed to the Fourth Amendment and Restatement Agreement within 30 days of execution of the Fourth Amendment and Restatement if executed in Tanzania, or if the Fourth Amendment and Restatement Agreement is not executed in Tanzania, within 30 days of its first entry into Tanzania; and

 

  (d)

stamp duty of approximately Malawian Kwacha 10,000 must be affixed to the Fourth Amendment and Restatement Agreement within 30 days of execution of the Fourth Amendment and Restatement if executed in Malawi, or if the Fourth Amendment and Restatement Agreement is not executed in Malawi, within 30 days of its first entry into Malawi,

which registrations, filings, taxes and fees will be made and paid promptly after the date of the relevant Transaction Document and in any event in accordance with the applicable time period referred to in clause 2.3 (Conditions subsequent to Fourth Amendment Effective Date) of the Fourth Amendment and Restatement Agreement.

 

21.10

Deduction of Tax

It is not required to make any deduction for or on account of Tax from any payment it may make under any Finance Document.

 

21.11

No default

 

  (a)

No Event of Default and, on the Fourth Amendment Effective Date, no Default is continuing or is reasonably likely to result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Transaction Document.

 

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  (b)

No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or termination event (however described) under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries’) assets are subject which has or is reasonably likely to have a Material Adverse Effect.

 

21.12

No misleading information

 

  (a)

Any factual information provided by any member of the Relevant Group for the purposes of the Facilities was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated.

 

  (b)

The financial projections, forecasts or opinions provided by any member of the Relevant Group for the purposes of the Facilities was prepared on the basis of recent historical information and on the basis of reasonable assumptions and were fair (as at the date on which they were provided) and arrived at after careful consideration.

 

  (c)

No event or circumstance has occurred or been omitted from the information provided by any member of the Relevant Group for the purposes of the Facilities and no information has been given or withheld that results in the information provided by any member of the Relevant Group for the purposes of the Facilities being untrue or misleading in any material respect.

 

  (d)

All other written information provided by any member of the Relevant Group (including its advisers) to a Finance Party was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any material respect.

 

21.13

Financial Statements

 

  (a)

Its Original Financial Statements were prepared in accordance with the Accounting Principles consistently applied.

 

  (b)

Its Original Financial Statements fairly present:

 

  (i)

for each Borrower, its financial condition and its results of operations (consolidated with its Subsidiaries); and

 

  (ii)

for the Parent, its financial condition and its results of operations (consolidated with its Subsidiaries),

during the relevant period.

 

  (c)

There has been no material adverse change in its assets, business or financial condition since the date of the Original Financial Statements.

 

  (d)

Its most recent financial statements delivered pursuant to Clause 22.1 (Financial Statements):

 

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  (i)

have been prepared in accordance with the Accounting Principles as applied to the Original Financial Statements; and

 

  (ii)

fairly present in all material respects its consolidated financial condition as at the end of, and consolidated results of operations for, the period to which they relate.

 

  (e)

The budgets and forecasts supplied under this Agreement were arrived at after careful consideration and have been prepared in good faith on the basis of recent historical information and on the basis of assumptions which were reasonable as at the date they were prepared and supplied.

 

  (f)

Since the date of the Original Financial Statements or, once subsequent financial statements have been delivered pursuant to Clause 22.1 (Financial Statements), the most recent financial statements delivered under that Clause, there has been no material adverse change in its assets, business or financial condition.

 

21.14

No proceedings

 

  (a)

No litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency which, if adversely determined, are reasonably likely to have a Material Adverse Effect, have (to the best of its knowledge and belief (having made due and careful enquiry)) been started or threatened against it or any of its Subsidiaries, other than (i) as disclosed to the Agent in writing from time to time which the Agent (acting on behalf of the Lenders) does not consider material (ii) as disclosed in Schedule 9 (Disclosed proceedings), for which it is maintaining adequate reserves in order to contest or settle those actions (as applicable) and (iii) in the case of the Parent Guarantors only, any litigation, arbitration or administrative proceedings or investigations described in the Parent’s most recent filing with the Securities and Exchange Commission.

 

  (b)

No judgment or order of a court, arbitral body or agency which is reasonably likely to have a Material Adverse Effect has (to the best of its knowledge and belief (having made due and careful enquiry)) been made against it or any of its Subsidiaries.

 

21.15

No breach of laws

 

  (a)

It has not (and none of its Subsidiaries has) breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.

 

  (b)

No labour disputes are current or, to the best of its knowledge and belief (having made due and careful enquiry), threatened against any member of the Group which have or are reasonably likely to have a Material Adverse Effect.

 

21.16

Environmental laws

 

  (a)

Each member of the Group is in compliance with Clause 24.3 (Environmental compliance) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect.

 

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  (b)

No Environmental Claim has been commenced or (to the best of its knowledge and belief (having made due and careful enquiry)) is threatened against any member of the Group where that claim has or is reasonably likely, if determined against that member of the Group, to have a Material Adverse Effect.

 

21.17

Taxation

 

  (a)

Except as disclosed in Schedule 9 (Disclosed proceedings) (for which it is maintaining adequate reserves for those Taxes and/or the costs required to file any Tax returns (as applicable)), it is not (and none of its Subsidiaries is) materially overdue in the filing of any Tax returns and it is not (and none of its Subsidiaries is) overdue in the payment of any amount in respect of Tax of USD 1,000,000 (or its equivalent in any other currency) or more.

 

  (b)

Except as disclosed in Schedule 9 (Disclosed proceedings) (for which it is maintaining adequate reserves for those Taxes and the costs required to contest them), no claims or investigations are being, or are reasonably likely to be, made or conducted against it (or any of its Subsidiaries) with respect to Taxes.

 

  (c)

It is resident for Tax purposes only in its Original Jurisdiction.

 

21.18

Anti-corruption law

 

  (a)

Each member of the Group has conducted its businesses in compliance with Anti-Corruption Laws and has instituted and maintains as at the date of the Fourth Amendment and Restatement Agreement policies and procedures designed to promote and achieve compliance with such laws.

 

  (b)

No Obligor nor (to the best of each Obligor’s knowledge and belief) any member of the Group that is not an Obligor (nor any agent, director, employee or officer of any member of the Group while acting on behalf of any member of the Group) has made or received, or directed or authorised any other person to make or receive, any offer, payment or promise to pay, of any money, gift or other thing of value, directly or indirectly, to or for the use or benefit of any person, where this violates or would violate, or creates or would create liability for it or any other person under, any Anti-Corruption Laws.

 

  (c)

No Obligor nor (to the best of each Obligor’s knowledge and belief) any member of the Group that is not an Obligor (nor any agent, director, employee or officer of any member of the Group acting on behalf of any member of the Group) is being investigated by any agency, or party to any proceedings, in each case in relation to any Anti-Corruption Laws.

 

21.19

Sanctions

 

  (a)

The Parent and each member of the Group has implemented and maintains in effect policies and procedures designed to promote and achieve their compliance, and compliance of their respective directors, officers, employees

 

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  and agents while acting on its behalf with applicable Sanctions and the Parent and each member of the Group and their respective officers and directors and, to the knowledge of Obligors, their employees and agents while acting on behalf of any member of the Group, are in compliance with applicable Sanctions in all material respects.

 

  (b)

Neither the Parent nor any other member of the Group (nor any of their agents, directors, employees or officers) is knowingly engaged in any activity that could reasonably be expected to result in any Obligor being designated as a Sanctioned Person.

 

  (c)

Neither the Parent nor any other member of the Group (nor any of their agents, directors, employees or officers) is a Sanctioned Person.

 

  (d)

None of the proceeds of the Loans will be used for any purpose that could result in any person (including any Finance Party) violating any Sanctions.

 

21.20

Security and Financial Indebtedness

 

  (a)

No Security or Quasi-Security exists over all or any of the present or future assets of any Borrower other than as permitted by this Agreement.

 

  (b)

No Borrower has any Financial Indebtedness outstanding other than as permitted by this Agreement.

 

21.21

Ranking

The Transaction Security has or will have the ranking in priority which it is expressed to have in the Transaction Security Documents and it is not subject to any prior ranking or pari passu ranking Security (other than any other Transaction Security).

 

21.22

Good title to assets

It and each other member of the Relevant Group has a good, valid and marketable title to, or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary to carry on its business as presently conducted.

 

21.23

Legal and beneficial ownership

It and each other member of the Relevant Group is the sole legal and beneficial owner of the respective assets over which it purports to grant Security free from any claims, third party rights or competing interests other than Permitted Security permitted under Clause 24.12 (Negative pledge).

 

21.24

Group Structure Chart

As at the Fourth Amendment Effective Date, the Group Structure Chart is true, complete and accurate in all material respects. The Group Structure Chart shows the current name, company registration number and jurisdiction of incorporation and/or jurisdiction of establishment in respect of AOI LLC and each Obligor, and indicates whether the AOI LLC or any Obligor is not a company with limited liability.

 

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21.25

Ownership of the Borrowers

 

  (a)

The Parent owns (whether directly or indirectly) legally and beneficially:

 

  (i)

100 per cent. of the issued share capital of AOI LLC and the other Parent Guarantors; and

 

  (ii)

99.99 per cent. of the issued share capital of Alliance One Malawi, Alliance One Tanzania and Alliance One Zambia.

 

  (b)

Pyxus Parent owns (whether directly or indirectly) legally and beneficially:

 

  (i)

100 per cent. of the issued share capital of AOI LLC and Pyxus Holdings; and

 

  (ii)

99.99 per cent. of the issued share capital of Alliance One Malawi, Alliance One Tanzania and Alliance One Zambia.

 

  (c)

Pyxus Holdings owns (whether directly or indirectly) legally and beneficially:

 

  (i)

100 per cent. of the issued share capital of AOI LLC; and

 

  (ii)

99.99 per cent. of the issued share capital of Alliance One Malawi, Alliance One Tanzania and Alliance One Zambia.

 

21.26

Accounting Reference Date

The Accounting Reference Date of each member of the Relevant Group is 31 March.

 

21.27

Sales Contracts

Except to the extent that any of the representations in this Clause 21.27 (Sales Contracts) cannot be made in respect of any individual Sales Contract which generates sale proceeds per annum of less than USD 2,000,000 and provided that all Sales Contracts which fail to comply with Clause 25 (Sales Contract undertakings) and/or in respect of which the representations of this Clause 21.27 (Sales Contracts) cannot be made generate aggregated sale proceeds per annum of less than USD 5,000,000, the following representations are made in respect of all Sales Contracts:

 

  (a)

Capability: Each Borrower and AOI LLC is fully capable of performing and complying with its obligations under each Sales Contract to which it is a party, and possesses all technical and financial means required for this purpose.

 

  (b)

Sales Contracts in effect: each Sales Contract is in full force and effect and any condition precedent to its coming into force was satisfied (or waived, with the prior written consent of the Agent) by the date on which such condition precedent was due to be satisfied under the terms of that Sales Contract and the payment obligations of the Buyer under the Sales Contract are legal, valid, binding and enforceable obligations and do not and will not conflict with any applicable law or regulation.

 

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  (c)

Sales Contracts meet Eligibility Criteria: each Sales Contract satisfies the Eligibility Criteria.

 

  (d)

Sales Contracts in form provided: Except as the same may be amended after the date of this Agreement in accordance with Clause 25.3 (Dealings with counterparties):

 

  (i)

each Sales Contract is in the form supplied:

 

  (A)

(in the case of the Original Sales Contracts) to the Agent prior to the execution of the Fourth Amendment and Restatement Agreement; or

 

  (B)

(in the case of any Additional Sales Contract) to the Agent prior to the date on which that contract became an Additional Sales Contract,

other than, in each case, in respect of amendments permitted to be made under this Agreement and notified in writing to the Agent in accordance with Clause 25.3 (Dealings with counterparties);

 

  (ii)

there are no contracts, agreements or other arrangements in existence (other than any Finance Document) that amend, modify, vary or otherwise relate to that Sales Contract, other than those notified by a Borrower to the Agent in writing:

 

  (A)

(in the case of the Original Sales Contracts) prior to the execution of the Fourth Amendment and Restatement Agreement; or

 

  (B)

(in the case of any Additional Sales Contract) prior to the date on which that contract became an Additional Sales Contract,

or, in each case, any amendments permitted to be made under this Agreement and notified in writing to the Agent in accordance with Clause 25.3 (Dealings with counterparties).

 

  (e)

No breach or repudiation: No party to a Sales Contract is in breach of any payment, delivery, or other material obligation thereunder or has repudiated or done or caused to be done any act or thing evidencing an intention to repudiate that Sales Contract.

 

  (f)

No notice of inability to perform: No Obligor has (and AOI LLC has not) received or given any notification (written or otherwise) of a failure or inability by any party to a Sales Contract to comply with its obligations thereunder.

 

  (g)

No force majeure or early termination event: No event or circumstance has occurred that gives rise or might reasonably be expected to give rise to a right to terminate early, suspend performance under, repudiate or cancel any Sales Contract.

 

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  (h)

No claims or liabilities: There are no claims, liabilities or obligations in existence between any Obligor or AOI LLC and a Sales Contract counterparty or any other person that are or might reasonably be expected to be materially detrimental to the rights of any Finance Party under that Sales Contract or the Finance Documents.

 

  (i)

Arm’s length terms: Each Borrower and AOI LLC has entered into each Sales Contract to which it is party on arm’s length terms.

 

21.28

Centre of main interests and establishments

For the purposes of Regulation (EU) 2015/848 of 20 May 2015 on insolvency proceedings (recast) (the “Regulation”), its centre of main interest (as that term is used in Article 3(1) of the Regulation) is situated in its Original Jurisdiction.

 

21.29

No adverse consequences

 

  (a)

It is not necessary under the laws of its Relevant Jurisdictions:

 

  (i)

in order to enable any Finance Party to enforce its rights under any Finance Document; or

 

  (ii)

by reason of the execution of any Finance Document or the performance by it of its obligations under any Finance Document,

that any Finance Party should be licensed, qualified or otherwise entitled to carry on business in any of its Relevant Jurisdictions.

 

  (b)

No Finance Party is or will be deemed to be resident, domiciled or carrying on business in its Relevant Jurisdictions by reason only of the execution, performance and/or enforcement of any Finance Document.

 

21.30

Times when representations made

 

  (a)

All the representations and warranties in this Clause 21 are made by each Obligor on the Fourth Amendment Effective Date.

 

  (b)

The Repeating Representations are deemed to be made by each Obligor on the date of each Utilisation Request, on each Utilisation Date, on the first day of each Interest Period and (with respect to the Sales Contracts) on each Test Date.

 

  (c)

Each of the representations and warranties set out in Clause 21.2 (Status) to Clause 21.11 (No default), Clause 21.12(d) (No misleading information), Clause 21.21 (Ranking) to Clause 21.23 (Legal and beneficial ownership) and Clause 21.27 (Sales Contracts) to Clause 21.29 (No adverse consequences) is deemed to be made by a Borrower on the date when a Sales Contract (or the receivables thereunder) is assigned by that Borrower under a Contractual Rights Assignment Agreement or Receivables Assignment Agreement (as applicable), but only in relation to the Contractual Rights Assignment Agreement or Receivables Assignment Agreement (as applicable) and that Sales Contract.

 

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  (d)

Each representation or warranty deemed to be made after the First Amendment Effective Date shall be deemed to be made by reference to the facts and circumstances existing at the date the representation or warranty is deemed to be made.

 

22.

INFORMATION UNDERTAKINGS

The undertakings in this Clause 22 remain in force from the First Amendment Effective Date for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

In this Clause 22:

“Annual Financial Statements” means the financial statements for a Financial Year delivered pursuant to Clause 22.1(a) (Financial Statements).

“Quarterly Financial Statements” means the financial statements delivered pursuant to Clause 22.1(c) (Financial Statements).

 

22.1

Financial statements

The Obligors shall procure the supply to the Agent in sufficient copies for all the Lenders:

 

  (a)

as soon as they are available, but in any event within 180 days after the end of each of its Financial Years:

 

  (i)

the Parent’s audited consolidated financial statements for that Financial Year; and

 

  (ii)

the audited financial statements (consolidated if appropriate) of each Borrower and AOI LLC for that Financial Year;

 

  (b)

if requested by the Agent, the audited financial statements of any other member of the Group for that Financial Year (to the extent that such audited financial statements are available); and

 

  (c)

as soon as they are available, but in any event within 60 days after the end of each Financial Quarter of each of its Financial Years:

 

  (i)

the Parent’s consolidated financial statements for that Financial Quarter; and

 

  (ii)

the financial statements of each Obligor for that Financial Quarter.

 

22.2

Requirements as to financial statements

 

  (a)

The Obligors shall procure that each set of Annual Financial Statements and Quarterly Financial Statements delivered by the Obligors pursuant to Clause 22.1 (Financial Statements) includes a balance sheet, profit and loss account and cash flow statement. In addition, the Obligors shall procure that each set of Annual Financial Statements shall be audited by the Auditors.

 

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  (b)

Each set of financial statements delivered pursuant to Clause 22.1 (Financial Statements):

 

  (i)

shall be certified by a director of the relevant company as fairly presenting its financial condition and operations as at the date as at which those financial statements were drawn up and, in the case of the Annual Financial Statements, shall be accompanied by any letter addressed to the management of the relevant company by the auditors of those Annual Financial Statements and accompanying those Annual Financial Statements; and

 

  (ii)

shall be prepared using the Accounting Principles, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements for that Obligor, unless, in relation to any set of financial statements, that Obligor notifies the Agent that there has been a change in the Accounting Principles or the accounting practices and its Auditors (or, if appropriate, the Auditors of the Obligor) deliver to the Agent:

 

  (A)

a description of any change necessary for those financial statements to reflect the Accounting Principles or accounting practices upon which that Obligor’s Original Financial Statements were prepared; and

 

  (B)

sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to make an accurate comparison between the financial position indicated in those financial statements and that Obligor’s Original Financial Statements.

Any reference in this Agreement to any financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.

 

  (c)

If the Agent wishes to discuss the financial position of any Borrower with the auditors of that Borrower, the Agent may notify that Borrower, stating the questions or issues which the Agent wishes to discuss with those auditors. In this event, the Borrower must ensure that those auditors are authorised (at the expense of the relevant Borrower):

 

  (i)

to discuss the financial position of the relevant Borrower with the Agent on request from the Agent; and

 

  (ii)

to disclose to the Agent for the Finance Parties any information which the Agent may reasonably request.

 

22.3

Year-end

The Obligors shall procure that the end of each annual accounting period of each member of the Relevant Group falls on 31 March.

 

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22.4

Anti-corruption information

Unless such disclosure would constitute a breach of any applicable law or regulation, the Obligors shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):

 

  (a)

promptly upon becoming aware of them, the details of any actual or potential violation by, or creation of liability for, any member of the Group or any agent, director, employee or officer of any member of the Group (or any counterparty of any such person in relation to any transaction contemplated by a Finance Document) of or in relation to any Anti-Corruption Laws, or of any investigation or proceedings relating to the same;

 

  (b)

copies of any correspondence delivered to, or received from, any regulatory authorities in relation to any matter referred to in paragraph (a) above at the same time as they are dispatched or promptly upon receipt (as the case may be); and

 

  (c)

promptly upon request by any Finance Party (through the Agent), such further information relating to any matter referred to in paragraphs (a) and (b) above as that Finance Party may reasonably require.

 

22.5

Information: miscellaneous

The Obligors shall procure the supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):

 

  (a)

at the same time as they are dispatched, copies of all documents regularly dispatched by the Parent to its shareholders generally (or any class of them) or dispatched by the Parent, AOI LLC or any Obligor to its creditors generally (or any class of them), unless (in the case of the Parent only, and whilst it is listed on the New York Stock Exchange only) to do so would breach any law or regulation applicable to it;

 

  (b)

promptly upon becoming aware of them, copies of any reports or other analysis prepared by any rating agency in respect of the Parent or any shares or securities of the Parent;

 

  (c)

promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any member of the Relevant Group, and which, if adversely determined, are reasonably likely to have a Material Adverse Effect;

 

  (d)

promptly upon becoming aware of them, the details of any judgment or order of a court, arbitral body or agency which is made against any member of the Relevant Group and which is reasonably likely to have a Material Adverse Effect;

 

  (e)

promptly, such information as the Security Agent may reasonably require about the Charged Property and compliance of the Obligors and AOI LLC with the terms of any Transaction Security Documents; and

 

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  (f)

promptly on request, such further information regarding the financial condition, assets and operations of the Relevant Group and/or any member of the Relevant Group (including any requested amplification or explanation of any item in the financial statements, or other material provided by any Obligor under this Agreement and an up to date copy of its shareholders’ register (or equivalent in its jurisdiction)) as any Finance Party through the Agent may reasonably request.

 

22.6

Information: seasonal review

During each Seasonal Review Period, the Obligors’ Agent and the Borrowers shall:

 

  (a)

permit the Agent free access at all reasonable times and on reasonable notice to meet and discuss matters with at least two members of the executive management of each Borrower; and

 

  (b)

provide the Agent with legal due diligence relating to the Facilities, the Transaction Documents, the Transaction Security and all such other matters relating to its business as the Agent deems necessary in form and substance satisfactory to the Agent.

 

22.7

Information: Sales Contracts

Each Borrower shall:

 

  (a)

permit each of the Agent and the Security Agent and any of its officers and agents to have access to and examine at reasonable times and on reasonable notice its minute books and other corporate records, and books of account and financial records, in relation to each Sales Contract to which it is a party, but no more than twice every calendar year unless a Default is continuing or the Agent reasonably suspects a Default is continuing or may occur;

 

  (b)

promptly supply to the Agent copies of each invoice (and each other written payment instruction) and all other documents relevant to its material obligations and rights under the Sales Contracts (including all its delivery obligations and the payment obligations of any Buyer), and notify the Agent of the price of any delivery under the Sales Contracts promptly after such price has been determined;

 

  (c)

keep the Finance Parties (via the Agent) regularly informed of all material developments and material progress under the Sales Contracts to which it is a party;

 

  (d)

notify the Agent of any default, breach, termination or suspension of any Sales Contract or of any dispute or claim in relation to a Sales Contract promptly upon receipt or dispatch thereof (including without limitation any notice of default, termination, dispute or claim made against it under any such Sales Contract together with details of any action it proposes to take in relation to the same);

 

  (e)

(without prejudice to its obligations under Clause 25.3 (Dealings with counterparties)), promptly provide the Agent with a copy of any documents that amend, waive or otherwise vary the terms of any Sales Contract to which it is a party;

 

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  (f)

from time to time on request, promptly provide the Agent with such other information relating to the Sales Contracts to which it is a party (and its ability to perform its obligations thereunder) as the Agent may reasonably require;

 

  (g)

promptly on becoming aware of them, provide the Agent with details of:

 

  (i)

any event or circumstance which is or may be a force majeure event under any Sales Contract to which it is a party; and

 

  (ii)

(without prejudice to its obligations under Clause 25.3 (Dealings with counterparties)), the invocation of indemnity provisions by it or any Buyer;

 

  (h)

promptly on becoming aware of them, provide the Agent with details of any claim made under:

 

  (i)

any cargo, warehouse or transit insurance policy relating to a Sales Contract where the claim is for a sum in excess of USD 1,000,000 (before deductibles);

 

  (ii)

any business interruption insurance policy relating to any Obligor, where the claim affects a Sales Contract;

 

  (i)

deliver to the Agent, promptly upon receipt or dispatch thereof, a copy of any notice relating to:

 

  (i)

the exercise by a Buyer of any rights it may have to reduce the quantities of Products to be delivered to it; and

 

  (ii)

the exercise by a Buyer of any rights it may have to suspend or reject deliveries;

 

  (j)

in respect of each delivery to be made under each Sales Contract, inform the Security Agent of the same within five Business Days after each Shipment has occurred under that Sales Contract and of the date of issuance of the bill of lading related thereto and shall:

 

  (i)

if the funds relating thereto are paid into the applicable Collection Account or (in the case of Local Sales Contracts only) the applicable Local Account before the Transportation Documents in respect of a Shipment are received by that Borrower, immediately inform the Security Agent of such payment and the Shipment to which such payment relates and, on receipt of the Transportation Documents relating to such Shipment, shall immediately deliver copies of such Transportation Documents to the Security Agent; or

 

  (ii)

if Transportation Documents in respect of a Shipment are received by that Borrower before funds are paid to it into the applicable Collection

 

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  Account or (in the case of Local Sales Contracts only) the applicable Local Account in relation to such Shipment, deliver, or procure the delivery, to the Security Agent of copies of all Transportation Documents in respect of each Shipment not later than three Business Days prior to the expected payment date under the Sales Contract and promptly notify the Agent once such payment has been made,

and promptly on request, such other certificates or documents required in connection with the sale or delivery of Products under that Sales Contract as the Agent may reasonably request;

 

  (k)

deliver to the Agent, no later than the first Business Day of each calendar month a schedule of planned deliveries under the Sales Contracts for that calendar month; and

 

  (l)

deliver to the Agent within five Business Days of the first day of each calendar quarter, a duly completed Business Report for the preceding calendar quarter.

 

22.8

Purchases of Product

The Borrowers must promptly notify the Agent of (a) any purchase of Product (whether processed or unprocessed) in Zambia or by Alliance One Zambia and (b) any shipment of Product (whether processed or unprocessed) to either of Malawi or Tanzania or to the order of Alliance One Malawi or Alliance One Tanzania.

 

22.9

Notification of default

 

  (a)

Each Obligor shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).

 

  (b)

Promptly upon a request by the Agent, a Borrower or the Obligors’ Agent shall supply to the Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).

 

22.10

“Know your customer” checks

 

  (a)

If:

 

  (i)

the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the First Amendment Effective Date;

 

  (ii)

any change in the status of an Obligor (or of a Holding Company of an Obligor) or the composition of the shareholders of an Obligor (or of a Holding Company of an Obligor) after the date of this Agreement; or

 

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  (iii)

a proposed assignment or transfer by a Lender of any of its rights and/or obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

obliges the Agent or any Lender (or, in the case of Clause 22.10(a)(iii), any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in Clause 22.10(a)(iii), on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in Clause 22.10(a)(iii), any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

 

  (b)

Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary “Know Your Customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

 

22.11

Loan to Value Ratio Certificate

Promptly following each Test Date applicable to a Borrower (and in any event within 15 days of such Test Date), the relevant Borrower shall supply to the Agent a Loan to Value Ratio Certificate:

 

  (a)

setting out (in reasonable detail) computations as to compliance with Clause 23.2 (Loan to Value ratio) as at that Test Date;

 

  (b)

confirming that all Sales Contracts to which it is a party as seller comply with the provisions of Clause 25 (Sales Contracts Undertakings) or if not, providing details of any such non-compliant Sales Contracts; and

 

  (c)

identifying each Discounting Invoice outstanding as at that Test Date, and confirming:

 

  (i)

the aggregate book value of the Discounting Invoice Receivables under such Discounting Invoice;

 

  (ii)

whether such Discounting Invoice Receivables have been disposed of to the Discounting Bank and if so, the aggregate proceeds of sale received or to be received in respect of such disposal as a percentage of the book value of such Discounting Invoice Receivables; and

 

  (iii)

whether the proceeds of sale received or to be received by AOI LLC in respect of the disposal of such Discounting Invoice Receivables have

 

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  been applied in prepayment of the Loans in accordance with Clause 9.4 (Proceeds from Permitted Receivables Disposal), and if so, the aggregate amount of such prepayment.

 

22.12

Cash flow report and projections

Each Borrower will deliver:

 

  (a)

a cash flow forecast setting out its projected cash flow position for the next six month period; and

 

  (b)

a projection setting out (in reasonable detail) its expected Loan to Value Ratio as at each Test Date over the next six month period,

in each case to be delivered within 15 Business Days of 31 June and 31 December in each Financial Year and in form and substance satisfactory to the Agent.

 

23.

LOAN TO VALUE RATIO

 

23.1

Definitions

“Loan to Value Ratio” means, in respect of any Borrower at any time, the ratio of:

 

  (a)

the aggregate of the value (in USD) of that Borrower’s Relevant Secured Assets at that time,

 

    

to

 

  (b)

the aggregate principal amount of all outstanding Loans of that Borrower at that time.

“LTV Receivables” means receivables arising under a Sales Contract which a Borrower has designated as “LTV Receivables” in a Loan to Value Ratio Certificate, which in no circumstances shall include Discounting Invoice Receivables.

“Perfection Requirements” means, in respect of the Transaction Security Documents and the Transaction Security, at any time:

 

  (a)

any and all registrations, filings, notices, acknowledgements and other actions and steps required to be made (including the payment of any registration, notarial or court fees, costs, expenses or Taxes) in any jurisdiction in order to perfect or ensure the validity and enforceability of security created by the Transaction Security Documents or in order to achieve the relevant priority for any Transaction Security; and

 

  (b)

all consents required for the granting of Transaction Security from third parties (including any End Buyer, if applicable) prior to the creation of such Transaction Security having to be obtained prior to the creation of such Transaction Security and being in full force and effect at that time.

“Purchased Zambian Tobacco Stocks” means tobacco stocks of Alliance One Malawi purchased from Alliance One Zambia.

 

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“Relevant Secured Assets” means, in respect of any Borrower at any time, its Secured Receivables and its Secured Inventory at that time.

“Secured Inventory” means, in respect of any Borrower at any time, the tobacco stocks of that Borrower at that time calculated by and evidenced as follows:

 

  (a)

in respect of tobacco stocks of Alliance One Tanzania, by reference to valuations provided by the applicable Collateral Manager;

 

  (b)

in respect of tobacco stocks of Alliance One Malawi (other than Purchased Zambian Tobacco Stocks), by reference to the aggregate of the valuations provided by each Malawian Collateral Manager including, in respect of Transit Inventory only, the valuation provided by Vallis Group Limited (prior to the date of the Replacement Malawian Collateral Management Agreement) or Transcom Sharaf Limited (from (and including) the date of the Replacement Malawian Collateral Management Agreement onwards), in each case upon the release of such Transit Inventory from Alliance One Malawi’s warehouse facility in Malawi; and

 

  (c)

in respect of Purchased Zambian Tobacco Stocks of Alliance One Malawi, by reference to the aggregate of the valuations provided by each Malawian Collateral Manager, such valuations to be calculated by aggregating:

 

  (i)

the value of such Purchased Zambian Tobacco Stocks, as determined by reference to receipts from auction floors specifying the value of such Purchased Zambian Tobacco Stocks; and

 

  (ii)

the landed cost of such Purchased Zambian Tobacco Stocks, up to a maximum amount of USD 0.46 per kilogram of Purchased Zambian Tobacco Stocks and to be evidenced by intercompany invoices provided to the relevant Malawian Collateral Manager;

 

  (d)

in respect of Alliance One Zambia, by reference to receipts from auction floors specifying the value of tobacco stocks that have been acquired,

in each case adjusted so that:

 

  (A)

other than tobacco stocks constituting Transit Inventory, only tobacco stocks that are subject to Transaction Security in respect of which the Perfection Requirements have been satisfied and, in the case of Alliance One Malawi and Alliance One Tanzania, are stored in a warehouse which the relevant Collateral Manager can access pursuant to the relevant Collateral Management Agreement may constitute “Secured Inventory”;

 

  (B)

obsolete, perished or otherwise unmarketable inventory may not constitute “Secured Inventory”; and

 

  (C)

any stocks of Alliance One Malawi that may not be designated as Secured Inventory pursuant to the proviso in sub-paragraph (A) of the definition of “Secured Receivables” are excluded.

 

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“Secured Receivables” means:

 

  (a)

in respect of any Borrower at any time, the invoiced LTV Receivables owing to AOI LLC under the End Sales Contracts at that time for Products purchased by AOI LLC from such Borrower (provided that the maximum amount of LTV Receivables arising under Affiliate End Sales Contracts that can constitute Secured Receivables at any time is six per cent. of the aggregate Secured Receivables of that Borrower at that time (excluding LTV Receivables arising under Affiliate End Sales Contracts));

 

  (b)

in respect of any Borrower at any time, the invoiced LTV Receivables owing to such Borrower under Local Sales Contracts at that time; and

 

  (c)

with respect to Alliance One Zambia only, the invoiced LTV Receivables owing to it under any Intermediate Sales Contract with Alliance One Malawi, so long as:

 

  (i)

such LTV Receivables have been outstanding for no more than 180 days; and

 

  (ii)

Alliance One Malawi has not previously designated the Product to which those LTV Receivables relate as Secured Inventory or any LTV Receivables owing to AOI LLC under any End Sales Contract, or to it    under any Local Sales Contract (in each case if such LTV Receivables relate to such Product) as Secured Receivables,

in each case provided that:

 

  (A)

to the extent that Alliance One Zambia has designated receivables owed to it by Alliance One Malawi for the sale of Products under an Intermediate Sales Contract as “LTV Receivables” in a Loan to Value Ratio Certificate as permitted by paragraph (c) above, any LTV Receivables owing to Alliance One Malawi or to AOI LLC in relation to such Products cannot constitute Secured Receivables and such Products cannot be designated as Secured Inventory by Alliance One Malawi, in each case until Alliance One Zambia confirms in writing to the Agent that such LTV Receivables have been paid to it and are no longer outstanding (except that Alliance One Malawi may designate such Products as Secured Inventory for a period of no longer than 15 Business Days, solely to the extent necessary to enable Alliance One Malawi to utilise the Malawian Facility in order to repay such receivables owed by it to Alliance One Zambia); and

 

  (B)

such LTV Receivables are subject to Transaction Security in respect of which the Perfection Requirements have been satisfied and the relevant Buyer has been instructed to pay into a Transaction Account.

 

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“Transit Inventory” means any tobacco stock financed by the Malawian Facility which has been released by Vallis Group Limited (prior to the date of the Replacement Malawian Collateral Management Agreement) or Transcom Sharif Limited (from (and including) the date of the Replacement Malawian Collateral Management Agreement onwards) from Alliance One Malawi’s warehouse facility in Malawi and which is in transit to Alliance One Malawi’s warehouse facility in Johannesburg, South Africa or in Beira, Mozambique, provided that such tobacco stock:

 

  (a)

is subject to warehouse to warehouse and goods in transit insurance in form and substance satisfactory to the Security Agent; and

 

  (b)

is deposited to Alliance One Malawi’s warehouse facility in Johannesburg, South Africa or Beira, Mozambique (as applicable) by no later than the date falling 21 days after the date it has been released by Vallis Group Limited (prior to the date of the Replacement Malawian Collateral Management Agreement) or Transcom Sharif Limited (from (and including) the date of the Replacement Malawian Collateral Management Agreement onwards) from Alliance One Malawi’s warehouse facility in Malawi.

 

23.2

Loan to Value ratio

 

  (a)

Each Borrower must ensure that the Loan to Value Ratio applicable to it is equal to or greater than 125 per cent. at all times.

 

  (b)

The Loan to Value Ratio Certificate for each Test Date shall include a breakdown of:

 

  (i)

the Secured Receivables as of that Test Date; and

 

  (ii)

the Secured Inventory as of that Test Date.

 

  (c)

If the Loan to Value Ratio applicable to the relevant Borrower is less than 125 per cent. on a Test Date, the relevant Borrower may, within ten (10) Business Days of that Test Date, prepay Loans borrowed by it in accordance with Clause 8.1 (Voluntary prepayment of Loans) in an amount which would have been required to ensure compliance with Clause 23.2(a) on that Test Date.

 

  (d)

If a Borrower makes a prepayment in accordance with Clause 23.2(c), that Borrower will be regarded as having complied with Clause 23.2(a) and no Default will be deemed to have occurred.

 

  (e)

If the Loan to Value Ratio applicable to the relevant Borrower is less than 125 per cent. on a Test Date, and within fifteen (15) Business Days of that Test Date, the Borrower prepays Loans borrowed by it in accordance with Clause 9.4 (Proceeds from Permitted Receivables Disposal) in an amount which would have been required to ensure compliance with Clause 23.2(a) on that Test Date, that Borrower will be regarded as having complied with Clause 23.2(a) on that Test Date and no Default will be deemed to have occurred.

 

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24.

GENERAL UNDERTAKINGS

The undertakings in this Clause 24 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

 

24.1

Authorisations

Each Obligor shall promptly:

 

  (a)

obtain, comply with and do all that is necessary to maintain in full force and effect; and

 

  (b)

supply certified copies to the Agent of,

 

  (i)

any Authorisation required under any law or regulation of a Relevant Jurisdiction to:

 

  (A)

enable it to perform its obligations under the Transaction Documents;

 

  (B)

ensure the legality, validity, enforceability or admissibility in evidence of any Transaction Document; and

 

  (C)

carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect; and

 

  (ii)

any Material Licence.

 

24.2

Compliance with laws

Each Obligor shall (and each Obligor shall ensure that each member of the Group will) comply in all respects with all laws to which it may be subject, if failure so to comply has or is reasonably likely to have a Material Adverse Effect.

 

24.3

Environmental compliance

Each Obligor shall (and each Obligor shall ensure that each member of the Group will):

 

  (a)

comply with all Environmental Law;

 

  (b)

obtain, maintain and ensure compliance with all requisite Environmental Permits;

 

  (c)

implement procedures to monitor compliance with and to prevent liability under any Environmental Law,

where failure to do so has or is reasonably likely to have a Material Adverse Effect.

 

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24.4

Environmental Claims

Each Obligor shall promptly upon becoming aware of the same, inform the Agent in writing of:

 

  (a)

any Environmental Claim against any member of the Group which is current, pending or threatened; and

 

  (b)

any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group,

where the claim, if determined against that member of the Group, has or is reasonably likely to have a Material Adverse Effect.

 

24.5

Anti-corruption law

 

  (a)

No Obligor shall (and each Obligor shall ensure that no other member of the Group will) directly or indirectly use the proceeds of a Facility for any purpose which would breach any Anti-Corruption Law.

 

  (b)

Each Obligor shall (and each Obligor shall ensure that each other member of the Group will):

 

  (i)

conduct its businesses in compliance with applicable Anti-Corruption Laws; and

 

  (ii)

maintain policies and procedures designed to promote and achieve compliance with such laws; and

 

  (iii)

take all reasonable and prudent steps to ensure that each of its agents, directors, employees and officers comply with such laws.

 

24.6

Taxation

 

  (a)

Each Obligor shall pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:

 

  (i)

such payment is being contested in good faith;

 

  (ii)

adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in accordance with the Accounting Principles in its latest financial statements delivered to the Agent under Clause 22.1 (Financial Statements); and

 

  (iii)

such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.

 

  (b)

No member of the Relevant Group may change its residence for Tax purposes.

 

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24.7

Merger

No Obligor shall enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction.

 

24.8

Change of business

The Obligors shall procure that no substantial change is made to the general nature of the business of any Obligor or the Relevant Group taken as a whole from that carried on by it at the Fourth Amendment Effective Date.

 

24.9

Acquisitions

No Borrower will:

 

  (a)

acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them); or

 

  (b)

incorporate a company.

 

24.10

Preservation of assets

Each Obligor shall maintain in good working order and condition (ordinary wear and tear excepted) all of its assets necessary in the conduct of its business.

 

24.11

Pari passu ranking

Each Obligor shall ensure that at all times any unsecured and unsubordinated claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.

 

24.12

Negative pledge

In this Clause 24.12, “Quasi-Security” means an arrangement or transaction described in Clause 24.12(b).

Except as permitted under Clause 24.12(c):

 

  (a)

No Borrower shall create or permit to subsist any Security over any of its assets.

 

  (b)

No Borrower shall:

 

  (i)

sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor or any other member of the Group;

 

  (ii)

sell, transfer or otherwise dispose of any of its receivables on recourse terms;

 

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  (iii)

enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or

 

  (iv)

enter into any other preferential arrangement having a similar effect,

in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.

 

  (c)

Clause 24.12(a) and Clause 24.12(b) do not apply to any Security or (as the case may be) Quasi-Security, which is:

 

  (i)

Permitted Security; or

 

  (ii)

a Permitted Transaction.

 

24.13

Disposals

 

  (a)

Except as permitted under Clause 24.13(b), no Borrower shall enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset.

 

  (b)

Clause 24.13(a) does not apply to any sale, lease, transfer or other disposal which is:

 

  (i)

a Permitted Disposal; or

 

  (ii)

a Permitted Transaction.

 

24.14

Arm’s length basis

 

  (a)

Except as permitted by Clause 24.14(b) below, no Borrower shall enter into any transaction with any person except on arm’s length terms and for full market value.

 

  (b)

The following transactions shall not be a breach of this Clause 24.14:

 

  (i)

fees, costs and expenses payable under the Transaction Documents in the amounts set out in the Transaction Documents delivered to the Agent under Clause 5.1 (Initial conditions precedent) or agreed by the Agent; and

 

  (ii)

any Permitted Transaction.

 

24.15

Loans or credit

 

  (a)

Except as permitted under Clause 24.15(b), no Borrower shall be a creditor in respect of any Financial Indebtedness.

 

  (b)

Clause 24.15(a) does not apply to:

 

  (i)

a Permitted Loan; or

 

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  (ii)

a Permitted Transaction.

 

24.16

No guarantees or indemnities

 

  (a)

Except as permitted under Clause 24.16(b), no Borrower shall incur or allow to remain outstanding any guarantee in respect of any obligation of any person.

 

  (b)

Clause 24.16(a) does not apply to a guarantee which is:

 

  (i)

a Permitted Guarantee; or

 

  (ii)

a Permitted Transaction.

 

24.17

Financial Indebtedness

 

  (a)

Except as permitted under Clause 24.17(b), no Borrower shall incur or allow to remain outstanding any Financial Indebtedness.

 

  (b)

Clause 24.17(a) does not apply to Financial Indebtedness which is:

 

  (i)

Permitted Financial Indebtedness; or

 

  (ii)

a Permitted Transaction.

 

24.18

Insurance

 

  (a)

Each Borrower shall maintain insurances on and in relation to its business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business.

 

  (b)

Each Borrower must maintain warehouse to warehouse and goods in transit (USD) insurance cover over its inventory and stocks, with the Security Agent being named as loss payee on such policies.

 

  (c)

All insurances must be with reputable independent insurance companies or underwriters.

 

24.19

Access

Each Obligor shall (not more than twice in every Financial Year unless the Agent reasonably suspects a Default is continuing or may occur) permit the Agent and/or the Security Agent and/or accountants or other professional advisers and contractors of the Agent or Security Agent free access at all reasonable times and on reasonable notice at the risk and cost of the Obligor to (a) the premises, assets, books, accounts and records of each Obligor and (b) meet and discuss matters with senior management of any Obligor.

 

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24.20

Treasury Transactions

No Borrower shall enter into any Treasury Transaction, other than:

 

  (a)

spot and forward delivery foreign exchange contracts entered into in the ordinary course of business of that Borrower and not for speculative purposes; and

 

  (b)

any Treasury Transaction entered into for the hedging of actual or projected real exposures arising in the ordinary course of trading activities of that Borrower and not for speculative purposes.

 

24.21

Further assurance

 

  (a)

Each Obligor shall (and each Obligor shall procure that AOI LLC will) promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Security Agent may reasonably specify (and in such form as the Security Agent may reasonably require in favour of the Security Agent or its nominee(s)):

 

  (i)

to perfect the Security created or intended to be created under or evidenced by the Transaction Security Documents or for the exercise of any rights, powers and remedies of the Security Agent or the Finance Parties provided by or pursuant to the Finance Documents or by law; and/or

 

  (ii)

to facilitate the realisation of the assets which are, or are intended to be, the subject of the Transaction Security.

 

  (b)

Each Obligor shall take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Security Agent or the Finance Parties by or pursuant to the Finance Documents.

 

24.22

Sanctions

 

  (a)

Each Obligor shall maintain (and each Obligor shall ensure that AOI LLC and each other member of the Group maintains) in effect and enforce policies and procedures designed to ensure compliance by each of them (and each of their respective directors, officers, employees and agents) with all Sanctions and shall conduct its businesses in compliance with all Sanctions.

 

  (b)

No Obligor will (and each Obligor shall ensure that no other member of the Group nor any of their respective directors, officers, employees or agents will) directly or indirectly use the proceeds of any Facility for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country (except to the extent permitted for a person required to comply with Sanctions) or in any manner that could result in the violation of any Sanctions applicable to any Party.

 

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  (c)

Each Obligor will (and each Obligor shall procure that AOI LLC will) ensure that none of the funds used to make any payment under the Finance Documents are sourced (directly or indirectly) from Sanctioned Persons or Sanctioned business.

 

24.23

Excluded Activities

No Obligor will (and each Obligor shall procure that AOI LLC):

 

  (a)

directly or indirectly use the proceeds of any Facility for the purpose of funding, financing or facilitating any Excluded Activities; and

 

  (b)

will not engage in or perform any Excluded Activity.

 

24.24

Intragroup transactions

 

  (a)

 

  (i)

Upon the maturity of any of the Secured Obligations, whether at stated maturity, by acceleration or otherwise, all such Secured Obligations shall first be paid in full in cash before any payment of any kind or character (whether in cash, property, securities or otherwise) is made on account of any Financial Indebtedness (including principal, interest or any other amount owing) owed by an Obligor (the “Intragroup Debtor”) to another Obligor (the “Intragroup Creditor”) (“Intragroup Debt”).

 

  (ii)

If any Default or Event of Default is continuing or may result from any payment of Intragroup Debt:

 

  (A)

no Intragroup Debtor shall, directly or indirectly (and no other person on behalf of an Intragroup Debtor may) make any payment of any Intragroup Debt and may not acquire all or any part of such Intragroup Debt for cash, property or securities; and

 

  (B)

no Intragroup Creditor shall ask, demand, sue for or otherwise take, accept or receive, any amounts owing in respect of any Intragroup Debt,

until all of the Secured Obligations have been paid in full in cash, unless directed to do so by the Security Agent pursuant to paragraph 24.24(b).

 

  (iii)

In the event of any payment of Intragroup Debt to an Intragroup Creditor which is not permitted by Clause 24.24(a)(ii) or by the terms of such Intragroup Debt, the relevant Intragroup Creditor shall hold such payment on trust for the Secured Parties and shall promptly pay or transfer the same to the Security Agent or as the Security Agent may direct for application in accordance with the terms of this Agreement.

 

  (iv)

Upon an Insolvency Event of any Obligor, the Finance Parties shall be entitled to receive payment in full in cash of all Secured Obligations

 

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  owed by that Obligor before any Intragroup Creditor is entitled to receive any payment of any kind in respect of Intragroup Debt owed to it by that Obligor.

 

  (v)

In the event of any payment of Intragroup Debt to an Intragroup Creditor which is not permitted pursuant to Clause 24.24(a)(iv), the relevant Intragroup Creditor shall hold such payment on trust for the Secured Parties and shall promptly pay or transfer the same to the Security Agent or as the Security Agent may direct for application in accordance with the terms of this Agreement.

 

  (b)

Without prejudice to paragraph 24.24(a) above following the occurrence of an Insolvency Event in relation to Alliance One Malawi, if any Financial Indebtedness is owed by Alliance One Malawi to Alliance One Zambia, Alliance One Zambia shall follow all instructions issued by the Security Agent to exercise or refrain from exercising any right it may otherwise have against Alliance One Malawi to:

 

  (i)

accelerate any of Alliance One Malawi’s liabilities or declare them prematurely due and payable or payable on demand;

 

  (ii)

make a demand under any guarantee, indemnity or other assurance against loss given by Alliance One Malawi;

 

  (iii)

exercise any right of set-off or take or receive any payment in respect of such Financial Indebtedness; and

 

  (iv)

claim and prove in any insolvency process of Alliance One Malawi.

 

  (c)

In this Clause:

 

  (i)

“Insolvency Event” means, in relation to any Obligor:

 

  (A)

any resolution is passed or order made for the winding up, dissolution, administration or reorganisation of that Obligor, a moratorium is declared in relation to any indebtedness of that Obligor or an administrator is appointed to that Obligor;

 

  (B)

any composition, compromise, assignment or arrangement is made with any of its creditors;

 

  (C)

the appointment of any liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of that Obligor or any of its assets; or

 

  (D)

any analogous procedure or step is taken in any jurisdiction.

 

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24.25

Conditions subsequent to each Utilisation

 

  (a)

To the extent Products are to be financed by a Utilisation, promptly following such Utilisation by a Borrower and in any event within 10 Business Days of such Utilisation, that Borrower shall deliver to the Agent:

 

  (i)

unless previously delivered, a certified copy of each Intermediate Sales Contract and each End Sales Contract (and Transportation Documents existing at that time in relation thereto) which relate to the Products financed by that Utilisation;

 

  (ii)

a schedule setting out the estimated quantity in respect of:

 

  (A)

shipments of green leaf tobacco to be delivered to it by its suppliers;

 

  (B)

to the extent known by such Borrower, shipments to be delivered to Buyers under the End Sales Contracts,

in each case which relate to such Utilisation; and

 

  (iii)

any other documents and other evidence as the Agent may request (in its discretion).

 

  (b)

As soon as reasonably practicable following each Utilisation of the Malawian Facility, and in any event within 30 days of such Utilisation, Alliance One Malawi shall register such Utilisation with the Reserve Bank of Malawi.

 

25.

SALES CONTRACTS UNDERTAKINGS

The undertakings in this Clause 25 are given in relation to each Sales Contract and remain in force from the First Amendment Effective Date for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

 

25.1

Compliance with Sales Contracts

Each Borrower shall:

 

  (a)

comply (and ensure that AOI LLC complies) in all material respects with its obligations under each Sales Contract in the manner and at the times provided for therein; and

 

  (b)

use all reasonable efforts to procure that each End Buyer duly complies in all material respects with its payment and other material obligations under that Sales Contract in the manner and at the times provided for therein and must ensure that:

 

  (i)

subject to paragraph (ii) below, such End Buyer pays amounts due under that Sales Contract to the applicable Collection Account or (in the case of Local Sales Contracts only) to the applicable Local Account; and

 

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  (ii)

in respect of amounts due to AOI LLC under a Discounting Invoice only, such End Buyer pays amounts due under that Sales Contract to the account of the Discounting Bank; and

 

  (c)

not take or omit to take any action (and must ensure that AOI LLC does not take or omit to take any action) that might result in:

 

  (i)

any default on any of its payment, delivery and other material obligations under a Sales Contract;

 

  (ii)

any right to terminate a Sales Contract becoming exercisable by the Buyer; or

 

  (iii)

any counterclaim or right of set off arising under a Sales Contract other than any set-off under a Sales Contract that occurs prior to an Event of Default that is continuing, and in the ordinary course of trading as part of the settlement of final invoices for deliveries made thereunder.

 

25.2

Pursuit of remedies

Subject to any provision of the Finance Documents to the contrary, each Borrower shall (and must ensure that AOI LLC will) diligently pursue any remedies available to it in respect of any breach or claim arising in relation to each Sales Contract.

 

25.3

Dealings with counterparties

No Borrower shall (and each Borrower shall ensure that AOI LLC does not) without the prior written consent of the Agent:

 

  (a)

in respect of any matter that varies or has the effect of varying the Sales Contract in any way which relates to the Eligibility Criteria applicable to that Sales Contract and pursuant to the terms of that Sales Contract, falls to be decided by mutual agreement of the parties thereto, negotiate or agree such matter except in accordance with the instructions of the Agent or the Security Agent and provided that the Agent or the Security Agent is notified of such matters as soon as reasonably practicable;

 

  (b)

rescind, amend, vary or waive (or agree to or permit any amendment to, or variation or waiver of) any term that would result in or have the effect of that Sales Contract not meeting the Eligibility Criteria applicable to that Sales Contract.

 

  (c)

consent to the transfer by a counterparty of any of its rights, title or interest in, or its obligations under, a Sales Contract;

 

  (d)

consent to any act or decision by a counterparty that might constitute a breach of a Sales Contract or otherwise adversely affect any rights of the Finance Parties thereunder or in relation thereto;

 

  (e)

make or agree to any claim that a Sales Contract is frustrated or permit or agree to the cancellation, suspension, rescission, repudiation or other termination of a Sales Contract or accept any material breach thereof or default thereunder as repudiatory; or

 

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  (f)

seek relief from performance of its payment, delivery or other material obligations under a Sales Contract whether under any force majeure, time limit for claims or any other provision.

 

25.4

Payments under Sales Contracts

Each Borrower shall ensure that (and will procure that AOI LLC ensures that) each payment made to it under a Sales Contract is made in USD and (unless specifically approved by the Agent on the instructions of the Majority Lenders) free and clear of any set off, deduction, counterclaim or condition.

 

25.5

Deliveries under Sales Contracts

Each Borrower shall (and shall ensure that AOI LLC will) make all deliveries under each Sales Contract directly to the place specified for such deliveries in that Sales Contract (or in directions given pursuant to that Sales Contract), and in accordance with the delivery schedule set out therein.

 

25.6

Fair market price

Each Borrower shall ensure that (and will procure that AOI LLC ensures that) the price (including any applicable discount) charged and payable for each delivery of Products under a Sales Contract pursuant to the terms thereof is on arm’s length terms and reflects and will reflect the fair market price for Products.

 

25.7

Sales Contract failure

 

  (a)

If:

 

  (i)

on any date any Sales Contract ceases to satisfy the Eligibility Criteria;

 

  (ii)

the representations set out in Clause 21 (Representations) in relation to a Sales Contract are not true; or

 

  (iii)

a Borrower is in breach of its obligations in relation to any Sales Contract under Clause 25.1 (Compliance with Sales Contracts) to (and including) Clause 25.6 (Fair market price) or otherwise under the Finance Documents,

the relevant Borrower or the Obligors’ Agent shall, immediately upon becoming aware of the same, notify the Agent.

 

  (b)

If the Agent receives notice from a Borrower or the Obligors’ Agent under Clause 25.7(a) or otherwise becomes aware that any of the matters referred to in Clause 25.7(a) has occurred in relation to a Sales Contract, the Agent may and shall, if so instructed by the Majority Lenders, notify the relevant Borrower or the Obligors’ Agent in writing that such contract has ceased to be a Sales Contract, whereupon:

 

  (i)

that contract shall immediately cease to be a Sales Contract; and

 

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  (ii)

the Loan to Value Ratio applicable to that Borrower shall be retested on the date of such notice from the Agent, treating the date of retesting as a Test Date for the purposes of testing the Loan to Value Ratio. For the purpose of such retesting, the principal amount of the Loans of that Borrower as at the most recent Test Date shall be used, but the applicable Secured Receivables shall be reduced by the amount of any receivables arising under each such contract that has ceased to be a Sales Contract.

 

25.8

Buyer failure

 

  (a)

If in relation to any Buyer:

 

  (i)

it defaults on its obligations under a Sales Contract, unless, in the case only of a Sales Contract, such default does not relate to a payment obligation, is otherwise technical in nature and is remedied within 10 Business Days;

 

  (ii)

any of the events or circumstances described in Clause 27.7 (Insolvency) or Clause 27.8 (Insolvency proceedings) occur in respect of it;

 

  (iii)

it rescinds or repudiates any Sales Contract to which it is a party or does or causes to be done any act or thing evidencing its intention to rescind or to repudiate any Sales Contract to which it is a party; or

 

  (iv)

it otherwise ceases to be sufficiently creditworthy or capable of performing its obligations under a Sales Contract, as determined by the Agent and notified to the Obligors’ Agent,

the relevant Borrower or the Obligors’ Agent shall, immediately upon becoming aware of the same, notify the Agent.

 

  (b)

If the Agent receives notice from the Buyer, the Obligors’ Agent or any Borrower under Clause 25.8(a) or otherwise becomes aware of the existence or occurrence of any of the events and circumstances described in Clause 25.8(a) in relation to a Buyer, the Agent may notify the relevant Borrower or the Obligors’ Agent in writing that such person has ceased to be a Buyer, whereupon:

 

  (i)

such person shall immediately cease to be a Buyer;

 

  (ii)

each Sales Contract to which such person is a party shall immediately cease to be a Sales Contract; and

 

  (iii)

the Loan to Value Ratio applicable to that Borrower shall be retested on the date of such notice from the Agent, treating the date of retesting as a Test Date for the purposes of testing the Loan to Value Ratio. For the purpose of such retesting, the principal amount of the Loans of that Borrower as at the most recent Test Date shall be used, but the applicable Secured Receivables shall be reduced by the amount of any receivables under each such contract that has ceased to be a Sales Contract.

 

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25.9

Additional End Buyers and Additional End Sales Contracts

 

  (a)

The Obligors’ Agent or a Borrower may request in writing that additional persons that are not an Obligor or AOI LLC (a Proposed End Buyer”) be designated as End Buyers in accordance with Clause 25.9(b).

 

  (b)

A Proposed End Buyer may be designated as an End Buyer in accordance with the following procedure:

 

  (i)

the Obligors’ Agent or the relevant Borrower shall deliver to the Agent a written request providing all relevant details of the Proposed End Buyer, including whether the Proposed End Buyer will purchase Products under documentary letters of credit issued or confirmed by a bank approved by the Agent (with any such letter of credit to be in form and substance satisfactory to the Agent) or on open account terms;

 

  (ii)

following receipt of any such request, the Agent on the instructions of the Majority Lenders (in their absolute discretion) will confirm to the Obligors’ Agent or the relevant Borrower whether or not such person is acceptable as an End Buyer, including any conditions applicable to the designation of that person as an End Buyer; and

 

  (iii)

if the Agent has confirmed under Clause 25.9(b)(ii) above that the Proposed End Buyer is acceptable as an End Buyer, with effect from the date of that confirmation, that Proposed End Buyer shall become an End Buyer for the purposes of this Agreement.

 

  (c)

The Obligors’ Agent or a Borrower may request in writing that any contract for the sale and delivery of Products between the Borrower or AOI LLC as seller and an End Buyer as buyer that meets the Eligibility Criteria (a “Proposed Additional End Sales Contract”) be designated as an Additional End Sales Contract in accordance with Clause 25.9(d).

 

  (d)

Following the receipt of any such request, the Proposed Additional End Sales Contract may be designated as an Additional End Sales Contract in writing by the Agent, following which the Proposed Additional End Sales Contract shall become an End Sales Contract for the purposes of this Agreement.

 

25.10

Suppliers

Each Borrower will use reasonable efforts to ensure that each supplier that it deals with complies with all Environmental Laws, obtains and complies with all necessary Authorisations and adheres to best practice from an environmental and social perspective as is customarily required by international offtakers of tobacco and will notify the Agent if it becomes aware that any of its suppliers is not doing so.

 

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25.11

Local Sales Contracts

 

  (a)

The Borrowers shall ensure that in each financial year, at least 80 per cent. of the aggregated Product of all Borrowers in relation to which LTV Receivables arise is sold to Top Tier End Buyers.

 

  (b)

Alliance One Malawi shall ensure that in each financial year, it does not sell more than 5 per cent. of its aggregated Product to anyone other than:

 

  (i)

AOI LLC; or

 

  (ii)

another Borrower (provided that such sale is in the ordinary course of trading and is not intended to circumvent the requirements of this Clause 25.11(b) (Local Sales Contracts)).

 

  (c)

Alliance One Tanzania shall ensure that in each financial year, it does not sell more than 15 per cent. of its aggregated Product to anyone other than:

 

  (i)

AOI LLC; or

 

  (ii)

another Borrower (provided that such sale is in the ordinary course of trading and is not intended to circumvent the requirements of this Clause 25.11(c) (Local Sales Contracts)).

 

  (d)

Alliance One Zambia shall ensure that in each financial year, it does not sell more than 5 per cent. of its aggregated Product to anyone other than:

 

  (i)

AOI LLC; or

 

  (ii)

another Borrower (provided that such sale is in the ordinary course of trading and is not intended to circumvent the requirements of this Clause 25.11(d) (Local Sales Contracts)).

 

25.12

LTV Receivables

Without prejudice to Clause 24.12 (Negative pledge), each Borrower shall ensure that any receivables arising under any Sales Contract which it has designated or intends to designate as “LTV Receivables” in a Loan to Value Ratio Certificate are:

 

  (a)

invoiced separately from any other receivables;

 

  (b)

not assigned or sold to any third party, and no Security exists over such receivables, in each case other than pursuant to the Finance Documents; and

 

  (c)

do not constitute Discounting Invoice Receivables.

 

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26.

ACCOUNTS

 

26.1

Designation of Collection Accounts

Each Borrower shall ensure that AOI LLC maintains in its name an interest-bearing deposit account in USD with the Illinois branch of the Collection Account Bank, which must be subject to Transaction Security at all times.

 

26.2

Collection Accounts

 

  (a)

The Agent shall have sole signing rights on each Collection Account.

 

  (b)

Each Borrower will instruct (and ensure that AOI LLC instructs) by way of invoice or other applicable written payment instruction each Buyer relevant to its Products to pay all proceeds under each End Sales Contract (other than any Local Sales Contracts) to which it or AOI LLC is party and which it has designated, or intends to designate, as “LTV Receivables” to the Collection Account maintained in such Borrower’s name, and shall not retract such invoice or instructions without the prior consent of the Agent.

 

  (c)

Each Borrower shall deliver (and shall ensure that AOI LLC delivers) a copy of each invoice or other applicable written instruction it issues to a Buyer in accordance with Clause 26.2(b) above to the Agent within 10 Business Days of the issuance of such invoice.

 

  (d)

Subject to paragraph (e) below, each Borrower irrevocably authorises the Agent to apply amounts credited to the Collection Account maintained in such Borrower’s name to meet any payment obligations of that Borrower under the Finance Documents (in accordance with Clause 34.1 (Payments to the Agent)).

 

  (e)

Without prejudice to Clause 24.5 (Anti-corruption law), following any withdrawal from a Collection Account maintained in a Borrower’s name by or at the direction of the Security Agent in accordance with the terms of the Collection Account Control Agreement, that Borrower may request the Agent or the Security Agent to transfer an amount not exceeding four per cent. of any sale proceeds (or, in the case of Eastern Sales only, an amount not exceeding six per cent. of any sales proceeds) under any End Sales Contract so withdrawn from that Collection Account to an unsecured account of that Borrower to enable that Borrower to pay for sales commissions payable by it on such sale to any third party that is not an Affiliate of any Obligor, provided that no Event of Default is continuing and such sales commission arrangements are (i) on arms’ length terms, (ii) in the ordinary course of that Borrower’s business and (iii) paid promptly following such amounts being so transferred by the Agent or Security Agent. The Agent will comply with any such instruction as soon as reasonably practicable for it to do so, provided such requirements are met to its satisfaction.

 

  (f)

Promptly following a Borrower irrevocably paying in full all amounts payable by such Borrower under or in connection with the Finance Documents, the Agent shall ensure that any excess amount in the Collection Account relating to such Borrower is transferred to such Borrower’s Local Account or as such Borrower otherwise directs.

 

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  (g)

Promptly following a Borrower irrevocably paying in full all amounts payable by such Borrower under or in connection with the Finance Documents and there being no Available Commitments remaining in respect of the Facility made available to such Borrower, the Agent shall transfer the sole signing rights of the Collection Account relating to such Borrower to AOI LLC.

 

26.3

Designation of Local Accounts

Each Borrower shall open and maintain in its name an interest-bearing deposit account in USD with the Local Account Bank relevant to such Borrower, which must be subject to Transaction Security at all times and have the following details:

 

  (a)

in respect of the account opened and maintained in the name of Alliance One Malawi:

 

Account Name    Alliance One Tobacco Malawi Ltd
Bank Name    [omitted]
Branch    [omitted]
Account Number    [omitted]
Correspondent Bank    [omitted]
Correspondent Bank Account Number    [omitted]
ABA Routing Number    [omitted]

 

  (b)

in respect of the account opened and maintained in the name of Alliance One Tanzania:

 

Account Name    Alliance One Tobacco Tanzania Ltd
Bank Name    [omitted]
Account Number    [omitted]
Swift Code    [omitted]
Branch    [omitted]

 

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  (c)

in respect of the account opened and maintained in the name of Alliance One Zambia:

 

Account name    Alliance One Zambia Limited
Bank Name    [omitted]
Swift Code    [omitted]
Sort Code    [omitted]
Account Number    [omitted]

 

26.4

Local Accounts

 

  (a)

Each Borrower will instruct (by way of invoice or other applicable payment instruction) each Buyer relevant to its Products to pay:

 

  (i)

all proceeds under each Local Sales Contract which it has designated, or intends to designate, as “LTV Receivables”; and

 

  (ii)

all proceeds under each Intermediate Sales Contract to which it is a party,

to its Local Account, and shall not retract such invoice or instructions without the prior consent of the Agent.

 

  (b)

Each Borrower shall deliver a copy of each invoice or other applicable written instruction it issues to a Buyer in accordance with Clause 26.4(a) to the Agent within 10 Business Days of the issuance of such invoice.

 

  (c)

On and at any time after the occurrence of an Event of Default which is continuing, each Borrower irrevocably authorises the Agent to apply amounts credited to its Local Account to meet any payment obligations of that Borrower under the Finance Documents (in accordance with Clause 34.1 (Payments to the Agent)).

 

26.5

Withdrawals from the Local Accounts

On and at any time after the occurrence of an Event of Default which is continuing, no Borrower is permitted, without the prior written consent of the Security Agent, to withdraw any amount from or allow any amount to be debited from a Local Account except in accordance with Clause 26.4(c) (Local Accounts).

 

27.

EVENTS OF DEFAULT

Each of the events or circumstances set out in this Clause 27 is an Event of Default (save for Clause 27.25 (Acceleration)), provided that any determination as to whether an Event of Default is continuing or may occur shall, if the relevant event or circumstance relates solely to a particular Borrower of a Facility or to a particular Facility, be made only by the Majority Lenders under that Facility.

 

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27.1

Non-payment

An Obligor or AOI LLC does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable, unless its failure to pay is remedied by such payment being made within five days of its due date.

 

27.2

Covenants and other obligations

 

  (a)

An Obligor does not comply with the provisions of Clause 22 (Information Undertakings) and/or Clause 24 (General Undertakings).

 

  (b)

An Obligor or AOI LLC does not comply with any provision of any Transaction Security Document.

 

  (c)

Any requirement of Clause 23.2 (Loan to Value ratio) is not satisfied.

 

27.3

Other obligations

 

  (a)

An Obligor or AOI LLC does not comply with any provision of the Finance Documents (other than those referred to in Clause 27.1 (Non-payment) and Clause 27.2 (Covenants and other obligations)).

 

  (b)

Subject to Clause 27.3(c), no Event of Default under Clause 27.3(a) will occur if the failure to comply is capable of remedy and is remedied within thirty Business Days of the earlier of (i) the Agent giving notice to the Obligors’ Agent, relevant Obligor or AOI LLC and (ii) the Obligors’ Agent, an Obligor or AOI LLC becoming aware of the failure to comply.

 

  (c)

No remedy period will apply in respect of an Event of Default relating to Clause 22.4 (Anti-corruption information), Clause 24.5 (Anti-corruption law) or Clause 24.22 (Sanctions).

 

  (d)

No Event of Default under paragraph 27.3(a) will occur with respect to any breach of Clause 25 (Sales Contracts undertakings) if the failure to comply with any of the terms of that Clause relates to:

 

  (i)

an individual Sales Contract which generates sales proceeds per annum of less than USD 2,000,000; and

 

  (ii)

when such individual Sales Contract is aggregated with all Sales Contracts which fail to comply with Clause 25 (Sales Contract undertakings) and any Sales Contract to which a misrepresentation of Clause 21.27 (Sales Contracts) has been made, such Sales Contracts generate sales proceeds per annum of less than USD 5,000,000).

 

27.4

Misrepresentation

Any representation or statement made or deemed to be made by an Obligor or AOI LLC in the Finance Documents or any other document delivered by or on behalf of any Obligor or AOI LLC under or in connection with any Finance Document is or proves to have been incorrect or misleading when made or deemed to be made.

 

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27.5

Cross default – AOI LLC or a Guarantor

 

  (a)

Any Financial Indebtedness of AOI LLC or a Guarantor is not paid when due nor within any originally applicable grace period.

 

  (b)

Any Financial Indebtedness of AOI LLC or a Guarantor is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).

 

  (c)

Any commitment for any Financial Indebtedness of AOI LLC or a Guarantor is cancelled or suspended by a creditor of any member of the Group as a result of an event of default (however described).

 

  (d)

Any creditor of AOI LLC or a Guarantor becomes entitled to declare any Financial Indebtedness of any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described).

 

  (e)

No Event of Default will occur under this Clause 27.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness of AOI LLC or a Guarantor falling within Clause 27.5(a) to Clause 27.5(d) is less than USD 40,000,000 (or its equivalent in any other currency or currencies).

 

27.6

Cross default – Borrower

 

  (a)

Any Financial Indebtedness of any Borrower is not paid when due nor within any originally applicable grace period.

 

  (b)

Any Financial Indebtedness of any Borrower is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).

 

  (c)

Any commitment for any Financial Indebtedness of any Borrower is cancelled or suspended by a creditor of any Borrower as a result of an event of default (however described).

 

  (d)

Any creditor of any Borrower becomes entitled to declare any Financial Indebtedness of any Borrower due and payable prior to its specified maturity as a result of an event of default (however described).

 

  (e)

No Event of Default will occur under this Clause 27.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness of the Borrowers falling within Clause 27.6(a) to Clause 27.6(d) is less than USD 30,000,000 (or its equivalent in any other currency or currencies).

 

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27.7

Insolvency

 

  (a)

A member of the Relevant Group:

 

  (i)

is unable or admits inability to pay its debts as they fall due;

 

  (ii)

is deemed to, or is declared to, be unable to pay its debts under applicable law;

 

  (iii)

suspends or threatens to suspend making payments on any of its debts; or

 

  (iv)

by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding any Finance Party in its capacity as such) with a view to rescheduling any of its indebtedness.