UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________
☒
Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
FORM 10-K
________________________________________
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
☐
For the fiscal year ended December 31, 2021
or
For the transition period from to
Commission file number 001-12658
ALBEMARLE CORPORATION
(Exact name of registrant as specified in its charter)
Virginia
(State or other jurisdiction of
incorporation or organization)
54-1692118
(I.R.S. Employer
Identification No.)
4250 Congress Street, Suite 900
Charlotte, North Carolina 28209
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (980) - 299-5700
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
COMMON STOCK, $.01 Par Value
Trading Symbol
ALB
Name of each exchange on which registered
New York Stock Exchange
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)
during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions
of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
Non-accelerated filer
☒
☐
Accelerated filer
Smaller reporting company
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. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section
404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the voting and non-voting common equity stock held by non-affiliates of the registrant was approximately $19.7 billion based on the last reported sale price of common
stock on June 30, 2021, the last business day of the registrant’s most recently completed second quarter.
Number of shares of common stock outstanding as of February 11, 2022: 117,036,615
Documents Incorporated by Reference
Portions of Albemarle Corporation’s definitive Proxy Statement for its 2022 Annual Meeting of Shareholders to be filed with the U.S. Securities and Exchange Commission pursuant to Regulation
14A under the Securities Exchange Act of 1934, as amended, are incorporated by reference into Part III of this Annual Report on Form 10-K.
Albemarle Corporation and Subsidiaries
Index to Form 10-K
Year Ended December 31, 2021
PART I
Page
Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Item 15.
Item 16.
Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures
Executive Officers of the Registrant
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
PART II
[Removed and Reserved]
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions That Prevent Inspections
PART III
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services
PART IV
Exhibits and Financial Statement Schedules
Form 10-K Summary
Signatures
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Albemarle Corporation and Subsidiaries
Item 1.
Business.
PART I
Albemarle Corporation was incorporated in Virginia in 1993. Our principal executive offices are located at 4250 Congress Street, Suite 900, Charlotte, North Carolina 28209. Unless the context
otherwise indicates, the terms “Albemarle,” “we,” “us,” “our” or “the Company” mean Albemarle Corporation and its consolidated subsidiaries.
We are a leading global developer, manufacturer and marketer of highly-engineered specialty chemicals that are designed to meet our customers’ needs across a diverse range of end markets. Our
corporate purpose is making the world safe and sustainable by powering the potential of people. The end markets we serve include energy storage, petroleum refining, consumer electronics, construction,
automotive, lubricants, pharmaceuticals and crop protection. We believe that our commercial and geographic diversity, technical expertise, access to high-quality resources, innovative capability, flexible,
low-cost global manufacturing base, experienced management team and strategic focus on our core base technologies will enable us to maintain leading positions in those areas of the specialty chemicals
industry in which we operate.
We and our joint ventures currently operate more than 25 production and research and development (“R&D”) facilities, as well as a number of administrative and sales offices, around the world. As
of December 31, 2021, we served approximately 2,100 customers, none of which individually represents more than 10% of net sales of the Company, in approximately 70 countries. For information
regarding our unconsolidated joint ventures see Note 10, “Investments,” to our consolidated financial statements included in Part II, Item 8 of this report.
Business Segments
During 2021, we managed and reported our operations under three reportable segments: Lithium, Bromine and Catalysts. Each segment has a dedicated team of sales, research and development,
process engineering, manufacturing and sourcing, and business strategy personnel and has full accountability for improving execution through greater asset efficiency, market focus, agility and
responsiveness. Financial results and discussion about our segments included in this report are organized according to these categories except where noted.
For financial information regarding our reportable segments and geographic area information, see Note 25, “Segment and Geographic Area Information,” to our consolidated financial statements
included in Part II, Item 8 of this report.
Lithium Segment
Our Lithium business develops lithium-based materials for a wide range of industries and end markets. We are a low-cost producer of one of the most diverse product portfolios of lithium derivatives
in the industry.
We develop and manufacture a broad range of basic lithium compounds, including lithium carbonate, lithium hydroxide, lithium chloride, and value-added lithium specialties and reagents, including
butyllithium and lithium aluminum hydride. Lithium is a key component in products and processes used in a variety of applications and industries, which include lithium batteries used in consumer
electronics and electric vehicles, high performance greases, thermoplastic elastomers for car tires, rubber soles and plastic bottles, catalysts for chemical reactions, organic synthesis processes in the areas of
steroid chemistry and vitamins, various life science applications, as well as intermediates in the pharmaceutical industry, among other applications. We also develop and manufacture cesium products for
the chemical and pharmaceutical industries, and zirconium, barium and titanium products for various pyrotechnical applications, including airbag initiators.
In addition to developing and supplying lithium compounds, we provide technical services, including the handling and use of reactive lithium products. We also offer our customers recycling services
for lithium-containing by-products resulting from synthesis with organolithium products, lithium metal and other reagents. We plan to continue to focus on the development of new products and
applications.
Competition
The global lithium market consists of producers primarily located in the Americas, Asia and Australia. Major competitors in lithium compounds include Sociedad Quimica y Minera de Chile S.A.,
Sichuan Tianqi Lithium, Jiangxi Ganfeng Lithium and Livent Corporation. In the cesium and other specialty metal business, key competitors include Sinomine and Sigma-Aldrich Corporation. Competition
in the global lithium market is largely based on product quality, product diversity, reliability of supply and customer service.
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Albemarle Corporation and Subsidiaries
Raw Materials and Significant Supply Contracts
We obtain lithium through solar evaporation of our ponds at the Salar de Atacama, in Chile, and in Silver Peak, Nevada, and by purchasing lithium concentrate from our 49%-owned joint venture,
Windfield Holdings Pty. Ltd. (“Windfield”), which directly owns 100% of the equity of Talison Lithium Pty. Ltd., a company incorporated in Australia (“Talison”). In 2019, we completed the acquisition of
a 60% interest in Mineral Resources Limited’s (“MRL”) Wodgina hard rock lithium mine project (“Wodgina Project”) in Western Australia and formed an unincorporated joint venture with MRL, named
MARBL Lithium Joint Venture (“MARBL”), for the exploration, development, mining, processing and production of lithium and other minerals (other than iron ore and tantalum) from the Wodgina Project
and for the operation of the Kemerton, Australia lithium hydroxide conversion assets. Upon acquisition, we idled MARBL’s production of spodumene until market demand supported bringing the mine
back into production. In October 2021, MARBL announced its intention to resume spodumene concentrate production at this site, with the production restart expected during the second quarter of 2022. In
addition, we hold mineral rights in defined areas of Kings Mountain, North Carolina with available lithium resources and we own undeveloped land with access to a lithium resource in Antofalla, within the
Catamarca Province of Argentina. If necessary, we can also obtain lithium from other sources. See Item 2. Properties, for additional disclosures of our lithium mineral properties.
Bromine Segment
During 2021, we changed the name of our Bromine Specialties segment to Bromine. This change simplifies the name of the reportable segment, and does not impact the operations of the business or
disclosure of the related assets. Our bromine and bromine-based business includes products used in fire safety solutions and other specialty chemicals applications. Our fire safety technology enables the
use of plastics in high performance, high heat applications by enhancing the flame resistant properties of these materials. End market products that benefit from our fire safety technology include plastic
enclosures for consumer electronics, printed circuit boards, wire and cable products, electrical connectors, textiles and foam insulation. Our bromine-based business also includes specialty chemicals
products such as elemental bromine, alkyl bromides, inorganic bromides, brominated powdered activated carbon and a number of bromine fine chemicals. These specialty products are used in chemical
synthesis, oil and gas well drilling and completion fluids, mercury control, water purification, beef and poultry processing and various other industrial applications. Other specialty chemicals that we
produce include tertiary amines for surfactants, biocides, and disinfectants and sanitizers. A number of customers of our bromine business operate in cyclical industries, including the consumer electronics
and oil field industries. As a result, demand from our customers in such industries is also cyclical.
Competition
Our bromine business serves markets in the Americas, Asia, Europe and the Middle East, each of which is highly competitive. Product performance and quality, price and contract terms are the
primary factors in determining which qualified supplier is awarded a contract. Research and development, product and process improvements, specialized customer services, the ability to attract and retain
skilled personnel and maintenance of a good safety record have also been important factors to compete effectively in the marketplace. Our most significant competitors are Lanxess AG and Israel
Chemicals Ltd.
Raw Materials and Significant Supply Contracts
The bromine we use is originally sourced from two locations: Arkansas and the Dead Sea. Our bromine production operations in Arkansas are supported by an active brine rights leasing program. In
addition, through our 50% interest in Jordan Bromine Company Limited (“JBC”), a consolidated joint venture established in 1999, with operations in Safi, Jordan, we acquire bromine that is originally
sourced from the Dead Sea. JBC processes the bromine at its facilities into a variety of end products. See Item 2. Properties, regarding additional disclosures for our mineral properties.
Catalysts Segment
Our three main product lines in this segment are (i) Clean Fuels Technologies (“CFT”), which is primarily composed of hydroprocessing catalysts (“HPC”) together with isomerization and akylation
catalysts; (ii) fluidized catalytic cracking (“FCC”) catalysts and additives; and (iii) performance catalyst solutions (“PCS”), which is primarily composed of organometallics and curatives.
We offer a wide range of HPC products, which are applied throughout the oil refining industry. Their application enables the upgrading of oil fractions to clean fuels and other usable oil feedstocks
and products by removing sulfur, nitrogen and other impurities from the feedstock. In addition, they improve product properties by adding hydrogen and in some cases improve the performance of
downstream catalysts and processes. We continuously seek to add more value to refinery operations by offering HPC products that meet our customers’ requirements for profitability and performance in the
very demanding refining market.
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Albemarle Corporation and Subsidiaries
We provide our customers with customized FCC catalyst systems, which assist in the high yield cracking of refinery petroleum streams into derivative, higher-value products such as transportation
fuels and petrochemical feedstocks like propylene. Our FCC additives are used to reduce emissions of sulfur dioxide and nitrogen oxide in FCC units and to increase liquefied petroleum gas olefins yield,
such as propylene, and to boost octane in gasoline. Albemarle offers unique refinery catalysts to crack and treat the lightest to the heaviest feedstocks while meeting refinery yield and product needs.
Within our PCS product line, we manufacture organometallic co-catalysts (e.g., aluminum, magnesium and zinc alkyls) used in the manufacture of alpha-olefins (e.g., hexene, octene, decene),
polyolefins (e.g., polyethylene and polypropylene) and electronics. Our curatives include a range of curing agents used in polyurethanes, epoxies and other engineered resins.
There were more than 600 refineries world-wide in 2021. We expect to continue to see some less profitable, typically smaller, refineries shutting down and, over the long-term, being replaced by
larger scale and more complex refineries, with growth concentrated in the Middle East and Asia. Oil refinery utilization was lower in 2021 and 2020 compared to the prior years, with most refineries cutting
throughput due to the reduction in demand resulting from global travel restrictions to contain the COVID-19 pandemic. We estimate that there are currently approximately 600 FCC units being operated
globally, each of which requires a constant supply of FCC catalysts. In addition, we estimate that there are approximately 3,000 HPC units being operated globally, each of which typically requires
replacement HPC catalysts once every one to four years.
Competition
Our Catalysts segment serves the global market including the Americas, Asia, Europe and the Middle East, each of which is highly competitive. Competition in these markets is driven by a variety
factors. Product performance and quality, price and contract terms, product and process improvements, specialized customer services, the ability to attract and retain skilled personnel, and the maintenance
of a good safety record are the primary factors to compete effectively in the catalysts marketplace. In addition, through our research and development programs, we strive to differentiate our business by
developing value-added products and products based on proprietary technologies.
Our major competitors in the CFT catalysts market include Shell Catalysts & Technologies, Advanced Refining Technologies and Haldor Topsoe. Our major competitors in the FCC catalysts market
include W.R. Grace & Co., BASF Corporation and China Petrochemical Corporation (Sinopec). In the PCS market, our major competitors include Nouryon, Lanxess AG and Arxada.
Raw Materials and Significant Supply Contracts
The major raw materials we use in our Catalysts operations include sodium silicate, sodium aluminate, kaolin, aluminum, ethylene, alpha-olefins, isobutylene, toluene and metals, such as lanthanum,
molybdenum, nickel and cobalt, most of which are readily available from numerous independent suppliers and are purchased or provided under contracts at prices we believe are competitive. The cost of
raw materials is generally based on market prices, although we may use contracts with price caps or other tools, as appropriate, to mitigate price volatility.
Human Capital
Our main human capital management objectives are to attract, retain and develop the highest quality talent and ensure they feel safe, supported and empowered to do the best work they can do. We
believe providing a diverse, equal and inclusive workplace facilitates opportunities for innovation, fosters good decision making practices, and promotes employee engagement and high productivity across
our organization.
As of December 31, 2021, we had approximately 6,000 employees, including employees of our consolidated joint ventures, of whom 2,600, or 43%, are employed in the U.S. and the Americas;
1,600, or 27%, are employed in Asia Pacific; 1,400, or 23%, are employed in Europe; and 400, or 7%, are employed in the Middle East or other areas. Approximately 46% of these employees are
represented by unions or works councils. We believe that we generally have a good relationship with our employees, and with those unions and works councils.
Health and Safety
The health and safety of our employees is a part of our core values at Albemarle and is integral to how we conduct business. Our employees, contractors, and visitors follow a comprehensive set of
written health and safety policies and procedures at both the corporate and local site levels. We routinely audit ourselves against our policies, procedures and standards, using internal and third-party
resources. We also include health and safety metrics in our annual incentive plan for all employees to incentivize our commitment to safety. In 2021, we improved our Occupational Safety and Health Act
(“OSHA”) occupational injury and illness incident rate to 0.19 for our employees and nested contractors, compared to 0.26 in 2020. In
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Albemarle Corporation and Subsidiaries
addition, we provide all employees and their dependents with access to our Employee Assistance Program which provides free mental and behavioral health resources.
In response to the COVID-19 pandemic, Albemarle’s cross-functional Global Response Team continues to meet regularly to address employee health and safety and operational challenges. Our first
priority is always the health and well-being of our employees, customers, and communities. Since the start of the pandemic, our focus has shifted from managing an immediate crisis to building in the
flexibility needed to adjust for regional differences and changing conditions. Protocols that include restricted travel, shift adjustments, increased hygiene, and social distancing for the essential workers at
our plants have been put in place at all locations. In some regions, employees are able to return to their work sites. Other regions, including most of North and South America, remain on work-from-home
protocols for non-essential personnel.
Diversity, Equity and Inclusion
In 2020, we hired a Vice President, Diversity and Inclusion, to accelerate our inclusion and diversity initiatives and deliver meaningful change in our global organization. Our primary focus in our
recruiting efforts is to drive greater diversity in our workforce, including higher representation in the professional and managerial job categories. We want to ensure that our workplace reflects the
communities in which we live and work. Our recruiting policy includes a requirement that we include individuals from gender or racial minority groups among those we interview for openings at the
manager level and above.
We seek to provide employees with a desirable workplace that will enable us to attract and retain top talent. We believe employees should be compensated through wages and benefits, based on
experience, expertise, performance, and the criticality of their roles in the Company. We also perform an annual review of our pay practices to ensure that they are fair and equitable, and not influenced by
biased opinions or discrimination. In addition, we have established employee groups, known as Connect groups, to promote an atmosphere of inclusion and encouragement in which every employee’s voice
can be heard. These Connect groups provide opportunities for employees to share their backgrounds, experiences, and beliefs, and to use them to benefit others through mentoring and volunteering in the
local community, among other activities.
Investment in Talent
Investing in talent is a critical process for Albemarle because it allows us to be proactive and anticipate key organizational needs for talent and capabilities. This enables us to efficiently and
effectively ensure that we have the right talent pipeline to drive Albemarle’s success into the future. We also provide leadership development through performance coaching, 360-degree feedback, plant
training including health, safety and environmental, and experiential development and mentoring. Our leadership development is a cornerstone to our talent management strategy.
Sales, Marketing and Distribution
We have an international strategic account program that uses cross-functional teams to serve large global customers. This program emphasizes creative strategies to improve and strengthen strategic
customer relationships with emphasis on creating value for customers and promoting post-sale service. Complementing this program are regional Albemarle sales and technical personnel around the world
who serve numerous additional customers globally. We also utilize commissioned sales representatives and specialists in specific market areas when necessary or required by law.
Research and Development
We believe that in order to generate revenue growth, maintain our margins and remain competitive, we must continually invest in research and development, product and process improvements and
specialized customer services. Our research and development efforts support each of our business segments. The objective of our research and development efforts is to develop innovative chemistries and
technologies with applications relevant within targeted key markets through both process and new product development. Through research and development, we continue to seek increased margins by
introducing value-added products and proprietary processes and innovative green chemistry technologies. Our green chemistry efforts focus on the development of products in a manner that minimizes
waste and the use of raw materials and energy, avoids the use of toxic reagents and solvents and utilizes safe, environmentally friendly manufacturing processes. Green chemistry is encouraged with our
researchers through periodic focus group discussions and special rewards and recognition for outstanding new green developments.
Intellectual Property
Our intellectual property, including our patents, licenses and trade names, is an important component of our business. As of December 31, 2021, we owned more than 2,000 active patents and more
than 450 pending patent applications in key
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Albemarle Corporation and Subsidiaries
strategic markets worldwide. We also have acquired rights under patents and inventions of others through licenses, and we license certain patents and inventions to third parties.
Regulation
Our business is subject to a broad array of employee health and safety laws and regulations, including those under the OSHA. We also are subject to similar state laws and regulations as well as local
laws and regulations for our non-U.S. operations. We devote significant resources and have developed and implemented comprehensive programs to promote the health and safety of our employees and we
maintain an active health, safety and environmental program. As noted above, we finished 2021 with an OSHA occupational injury and illness incident rate of 0.19 for Albemarle employees and nested
contractors, compared to 0.26 in 2020.
Our business and our customers are subject to significant requirements under the European Community Regulation for the Registration, Evaluation, Authorization and Restriction of Chemicals
(“REACH”). REACH imposes obligations on European Union manufacturers and importers of chemicals and other products into the European Union to compile and file comprehensive reports, including
testing data, on each chemical substance, and perform chemical safety assessments. Additionally, substances of high concern, as defined under REACH, are subject to an authorization process.
Authorization may result in restrictions in the use of products by application or even banning the product. REACH regulations impose significant additional responsibilities on chemical producers,
importers, downstream users of chemical substances and preparations, and the entire supply chain. Our significant manufacturing presence and sales activities in the European Union require significant
compliance costs and may result in increases in the costs of raw materials we purchase and the products we sell. Increases in the costs of our products could result in a decrease in their overall demand;
additionally, customers may seek products with lower regulatory compliance requirements, which could also result in a decrease in the demand of certain products subject to the REACH regulations.
The Toxic Substances Control Act (“TSCA”), as amended in June 2016, requires chemicals to be assessed against a risk-based safety standard and calling for the elimination of unreasonable risks
identified during risk evaluation. This regulation and other pending initiatives at the U.S. state level, as well as initiatives in Canada, Asia and other regions, will potentially require toxicological testing and
risk assessments of a wide variety of chemicals, including chemicals used or produced by us. These assessments may result in heightened concerns about the chemicals involved and additional requirements
being placed on the production, handling, labeling or use of the subject chemicals. Such concerns and additional requirements could also increase the cost incurred by our customers to use our chemical
products and otherwise limit the use of these products, which could lead to a decrease in demand for these products.
Historically, there has been scrutiny of certain brominated flame retardants by regulatory authorities, legislative bodies and environmental interest groups in various countries. We manufacture a
broad range of brominated flame retardant products, which are used in a variety of applications. Concern about the impact of some of our products on human health or the environment may lead to
regulation or reaction in our markets independent of regulation.
Environmental Regulation
We are subject to numerous foreign, federal, state and local environmental laws and regulations, including those governing the discharge of pollutants into the air and water, the management and
disposal of hazardous substances and wastes and the cleanup of contaminated properties. Ongoing compliance with such laws and regulations is an important consideration for us. Key aspects of our
operations are subject to these laws and regulations. In addition, we incur substantial capital and operating costs in our efforts to comply with them.
We use and generate hazardous substances and wastes in our operations and may become subject to claims for personal injury and/or property damage relating to the release of such substances into
the environment. In addition, some of our current properties are, or have been, used for industrial purposes, which could contain currently unknown contamination that could expose us to governmental
requirements or claims relating to environmental remediation, personal injury and/or property damage. Liabilities associated with the investigation and cleanup of hazardous substances, as well as personal
injury, property damages or natural resource damages arising from the release of, or exposure to, such hazardous substances, may be imposed in many situations without regard to violations of laws or
regulations or other fault, and may also be imposed jointly and severally (so that a responsible party may be held liable for more than its share of the losses involved, or even the entire loss). Such liabilities
also may be imposed on many different entities with a relationship to the hazardous substances at issue, including, for example, entities that formerly owned or operated the property affected by the
hazardous substances and entities that arranged for the disposal of the hazardous substances at the affected property, as well as entities that currently own or operate such property. We are subject to such
laws, including the federal Comprehensive Environmental Response, Compensation and Liability Act, commonly known as CERCLA or Superfund, in the U.S., and similar foreign and state laws. We may
have
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Albemarle Corporation and Subsidiaries
liability as a potentially responsible party (“PRP”) with respect to active off-site locations under CERCLA or state equivalents. We have sought to resolve our liability as a PRP at these sites through
indemnification by third parties and settlements, which would provide for payment of our allocable share of remediation costs. Because the cleanup costs are estimates and are subject to revision as more
information becomes available about the extent of remediation required, and in some cases we have asserted a defense to any liability, our estimates could change. Moreover, liability under CERCLA and
equivalent state statutes may be joint and several, which could require us to pay in excess of our pro rata share of remediation costs. Our understanding of the financial strength of other PRPs has been
considered, where appropriate, in estimating our liabilities. Accruals for these matters are included in the environmental reserve. Our management is actively involved in evaluating environmental matters
and, based on information currently available to us, we have concluded that our outstanding environmental liabilities for unresolved waste sites currently known to us should not have a material effect on
our operations.
See “Safety and Environmental Matters” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for further details.
Climate Change and Natural Resources
The growing concerns about climate change and the related increasingly stringent regulations may provide us with new or expanded business opportunities. We provide solutions to companies
pursuing alternative fuel products and technologies (such as renewable fuels), emission control technologies (including mercury emissions), alternative transportation vehicles and energy storage
technologies and other similar solutions. As demand for, and legislation mandating or incentivizing the use of, alternative fuel technologies that limit or eliminate greenhouse gas emissions increase, we
continue to monitor the market and offer solutions where we have appropriate technology and believe we are well positioned to take advantage of opportunities that may arise from such demand or
legislation.
In addition to potential business opportunities, we acknowledge our responsibility to address the impact of our operations on the environment. We are investing in technology and people to reduce
energy consumption, greenhouse gas emissions and air emissions of ozone-depleting substances. In 2021, we established greenhouse gas emission targets for each of our businesses, including achieving net
zero carbon emissions by 2050, reducing the carbon-intensity of our Bromine and Catalysts businesses by a combined 35% by 2030, and growing our Lithium business in a carbon-intensity neutral manner
through 2030.
Water is a critical input to Albemarle’s production operations. As water is a scarce resource, we understand the need to responsibly manage our water consumption not only for the preservation of the
environment, but for the viability of our local communities. We are investing in new process technologies to reduce our water footprint and expand capacity sustainably in locations with high water risk.
Our goal is to reduce our intensity of freshwater usage by 25% by 2030 in areas of high or extremely high-water risk, such as Chile and Jordan, as defined by the World Resources Institute.
Our businesses are dependent on the availability and responsible management of natural resources. We manage our natural resources to operate efficiently and preserve the environment for our local
communities and the world. Our natural resource management includes mineral resource transparency with local communities, governments, regulators and other key stakeholders, as well as partnering
with the Initiative for Responsible Mining Assurance for our lithium production for the assurance of responsible mining. We attempt to maximize the recovery of our extracted minerals and recycle or reuse
by-products where possible. In addition, we work with local communities, regulatory agencies and wildlife organizations to preserve and restore land and biodiversity before, during and after all operations
commence.
Recent Acquisitions, Joint Ventures and Divestitures
During recent years, we have devoted resources to acquisitions and joint ventures, including the subsequent integration of acquired businesses. These acquisitions and joint ventures have expanded
our base business, provided our customers with a wider array of products and presented new alternatives for discovery through additional chemistries. In addition, we have pursued opportunities to divest
businesses which do not fit our high priority business growth profile. Following is a summary of our significant acquisitions, joint ventures and divestitures over the last three years.
On September 30, 2021, the Company signed a definitive agreement to acquire all of the outstanding equity of Guangxi Tianyuan New Energy Materials Co., Ltd. (“Tianyuan”), for approximately
$200 million in cash. Tianyuan's operations include a recently constructed lithium processing plant strategically positioned near the Port of Qinzhou in Guangxi, China. The plant has designed annual
conversion capacity of up to 25,000 metric tons of lithium carbonate equivalent (“LCE”) and is capable of producing battery-grade lithium carbonate and lithium hydroxide. The plant is currently in the
commissioning stage and is expected to begin commercial production in the first half of 2022. The Company expects the transaction, which is subject to customary closing conditions, to close in the first
half of 2022.
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Albemarle Corporation and Subsidiaries
On June 1, 2021, we completed the sale of our fine chemistry services (“FCS”) business to W. R. Grace & Co. (“Grace”) for proceeds of approximately $570 million, consisting of $300 million in
cash and the issuance to Albemarle of preferred equity of a Grace subsidiary having an aggregate stated value of $270 million. As part of the transaction, Grace acquired our manufacturing facilities located
in South Haven, Michigan and Tyrone, Pennsylvania.
In the fourth quarter of 2020, we divested our ownership interest in the Saudi Organometallic Chemicals Company LLC (“SOCC”) joint venture for cash proceeds of $11.0 million. As a result of this
divestiture, the Company recorded a gain of $7.2 million in Other expenses, net during the year ended December 31, 2020.
On October 31, 2019, we completed the acquisition of a 60% interest in MRL’s Wodgina Project in Western Australia for a total purchase price of approximately $1.3 billion. As part of this
acquisition, we formed MARBL, an unincorporated joint venture with MRL, for the exploration, development, mining, processing and production of lithium and other minerals (other than iron ore and
tantalum) from the Wodgina Project and for the operation of the Kemerton assets.
These transactions reflect our commitment to investing in future growth of our high priority businesses, maintaining leverage flexibility and returning capital to our shareholders.
Available Information
Our website address is www.albemarle.com. We make available free of charge through our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K
and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (“Exchange Act”), as well as beneficial ownership reports on
Forms 3, 4 and 5 filed pursuant to Section 16 of the Exchange Act, as soon as reasonably practicable after such documents are electronically filed with, or furnished to, the Securities and Exchange
Commission (“SEC”). The information on our website is not, and shall not be deemed to be, a part of this report or incorporated into any other filings we make with the SEC. The SEC also maintains a
website at www.sec.gov that contains reports, proxy statements and other information regarding SEC registrants, including Albemarle.
Our Corporate Governance Guidelines, Code of Conduct and the charters of the Audit and Finance, Health, Safety and Environment, Executive Compensation, and Nominating and Governance
Committees of our Board of Directors are also available on our website and are available in print to any shareholder upon request by writing to Investor Relations, 4250 Congress Street, Suite 900,
Charlotte, North Carolina 28209, or by calling (980) 299-5700.
Item 1A.
Risk Factors.
You should consider carefully the following risks when reading the information, including the financial information, contained in this Annual Report on Form 10-K.
Risks Related to Our Business
Our substantial international operations subject us to risks of doing business in foreign countries, which could adversely affect our business, financial condition and results of operations.
We conduct a substantial portion of our business outside the U.S., with approximately 78% of our sales to foreign countries. We operate and/or sell our products to customers in approximately 70
countries. We currently have many production facilities, research and development and administrative facilities, as well as sales offices located outside the U.S., as detailed in Item 2. Properties.
Accordingly, our business is subject to risks related to the differing legal, political, social and regulatory requirements and economic conditions of many jurisdictions. Risks inherent in international
operations include the following:
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fluctuations in foreign currency exchange rates may affect product demand and may adversely affect the profitability in U.S. dollars of products and services we provide in international markets
where payment for our products and services is made in the local currency;
transportation and other shipping costs may increase, or transportation may be inhibited;
increased cost or decreased availability of raw materials;
increased regulations on, or reduced access to, scare resources, such as freshwater;
changes in foreign laws and tax rates or U.S. laws and tax rates with respect to foreign income may unexpectedly increase the rate at which our income is taxed, impose new and additional taxes on
remittances, repatriation or other payments by subsidiaries, or cause the loss of previously recorded tax benefits;
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Albemarle Corporation and Subsidiaries
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foreign countries in which we do business may adopt other restrictions on foreign trade or investment, including currency exchange controls;
trade sanctions by or against these countries could result in our losing access to customers and suppliers in those countries;
unexpected adverse changes in foreign laws or regulatory requirements may occur;
our agreements with counterparties in foreign countries may be difficult for us to enforce and related receivables may be difficult for us to collect;
compliance with the variety of foreign laws and regulations may be unduly burdensome;
compliance with anti-bribery and anti-corruption laws (such as the Foreign Corrupt Practices Act) as well as anti-money-laundering laws may be costly;
unexpected adverse changes in export duties, quotas and tariffs and difficulties in obtaining export licenses may occur;
general economic conditions in the countries in which we operate could have an adverse effect on our earnings from operations in those countries;
our foreign operations may experience staffing difficulties and labor disputes;
termination or substantial modification of international trade agreements may adversely affect our access to raw materials and to markets for our products outside the U.S.;
foreign governments may nationalize or expropriate private enterprises;
increased sovereign risk (such as default by or deterioration in the economies and credit worthiness of local governments) may occur; and
political or economic repercussions from terrorist activities, including the possibility of hyperinflationary conditions and political instability, may occur in certain countries in which we do business.
In addition, certain of our operations, and we have ongoing capital projects, in regions of the world such as the Middle East and South America, that are of high risk due to significant civil, political
and security instability. Unanticipated events, such as geopolitical changes, could result in a write-down of our investment in the affected joint venture or a delay or cause cancellation of those capital
projects, which could negatively impact our future growth and profitability. Our success as a global business will depend, in part, upon our ability to succeed in differing legal, regulatory, economic, social
and political conditions by developing, implementing and maintaining policies and strategies that are effective in each location where we and our joint ventures do business.
Furthermore, we are subject to rules and regulations related to anti-bribery and anti-trust prohibitions of the U.S. and other countries, as well as export controls and economic embargoes, violations of
which may carry substantial penalties. For example, export control and economic embargo regulations limit the ability of our subsidiaries to market, sell, distribute or otherwise transfer their products or
technology to prohibited countries or persons. Failure to comply with these regulations could subject our subsidiaries to fines, enforcement actions and/or have an adverse effect on our reputation and the
value of our common stock.
Our inability to secure key raw materials, or to pass through increases in costs and expenses for other raw materials and energy, on a timely basis or at all, including due to climate change, could have
an adverse effect on the margins of our products and our results of operations.
The long-term profitability of our operations will, in part, depend on our ability to continue to economically obtain resources, including energy and raw materials. For example, our lithium and
bromine businesses rely upon our continued ability to produce, or otherwise obtain, lithium and bromine of sufficient quality and in adequate amounts to meet our customers’ demand. If we fail to secure
and retain the rights to continue to access these key raw materials, we may have to restrict or suspend our operations that rely upon these key resources, which could harm our business, results of operations
and financial condition. In addition, in some cases access to these raw materials by us and our competitors is subject to decisions or actions by governmental authorities, which could adversely impact us.
Furthermore, other raw material and energy costs account for a significant percentage of our total costs of products sold, even if they can be obtained on commercially reasonable terms. Our raw material
and energy costs can be volatile and may increase significantly. Increases are primarily driven by tightening of market conditions and major increases in the pricing of key constituent materials for our
products such as crude oil, chlorine and metals (including molybdenum and rare earths which are used in the refinery catalysts business). We generally attempt to pass through changes in the prices of raw
materials and energy to our customers, but we may be unable to do so (or may be delayed in doing so). In addition, raising prices we charge to our customers in order to offset increases in the prices we pay
for raw materials could cause us to suffer a loss of sales volumes. Our inability to efficiently and effectively pass through price increases, or inventory impacts resulting from price volatility, could adversely
affect our margins.
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Albemarle Corporation and Subsidiaries
Competition within our industry may place downward pressure on the prices and margins of our products and may adversely affect our businesses and results of operations.
We compete against a number of highly competitive global specialty chemical producers. Competition is based on several key criteria, including product performance and quality, product price,
product availability and security of supply, and responsiveness of product development in cooperation with customers and customer service. Some of our competitors are larger than we are and may have
greater financial resources. These competitors may also be able to maintain significantly greater operating and financial flexibility. As a result, these competitors may be better able to withstand changes in
conditions within our industry. Competitors’ pricing decisions could compel us to decrease our prices, which could negatively affect our margins and profitability. Our ability to maintain or increase our
profitability is, and will continue to be, dependent upon our ability to offset decreases in the prices and margins of our products by improving production efficiency and volume and other productivity
enhancements, shifting to production of higher margin chemical products and improving existing products through innovation and research and development. If we are unable to do so or to otherwise
maintain our competitive position, we could lose market share to our competitors.
In addition, Albemarle’s brands, product image and trademarks represent the unique product identity of each of our products and are important symbols of the Company’s reputation. Accordingly, the
performance of our business could be adversely affected by any marketing and promotional materials used by our competitors that make adverse claims, whether with or without merit, against our
Company or its products, imply or assert immoral or improper conduct by us, or are otherwise disparaging of our Company or its products. Further, our own actions could hurt such brands, product image
and trademarks if our products underperform or we otherwise draw negative publicity.
Our research and development efforts may not succeed in addressing changes in our customers’ needs, and our competitors may develop more effective or successful products.
Our industries and the end markets into which we sell our products experience technological change and product improvement. Manufacturers periodically introduce new products or require new
technological capacity to develop customized products. Our future growth depends on our ability to gauge the direction of the commercial and technological progress in all key end markets in which we sell
our products and upon our ability to fund and successfully develop, manufacture and market products in such changing end markets. As a result, we must commit substantial resources each year to research
and development. There is no assurance that we will be able to continue to identify, develop, market and, in certain cases, secure regulatory approval for, innovative products in a timely manner or at all, as
may be required to replace or enhance existing products, and any such inability could have a material adverse effect on our profit margins and our competitive position.
In addition, our customers use our specialty chemicals for a broad range of applications. Changes in our customers’ products or processes may enable our customers to reduce consumption of the
specialty chemicals that we produce or make our specialty chemicals unnecessary. Customers may also find alternative materials or processes that do not require our products. Should a customer decide to
use a different material due to price, performance or other considerations, we may not be able to supply a product that meets the customer’s new requirements. Consequently, it is important that we develop
new products to replace the sales of products that mature and decline in use. Our business, results of operations, cash flows and margins could be materially adversely affected if we are unable to manage
successfully the maturation of our existing products and the introduction of new products.
Despite our efforts, we may not be successful in developing new products and/or technology, either alone or with third parties, or licensing intellectual property rights from third parties on a
commercially competitive basis. Our new products may not be accepted by our customers or may fail to receive regulatory approval. Moreover, new products may have lower margins than the products
they replace. Furthermore, ongoing investments in research and development for the future do not yield an immediate beneficial impact on our operating results and therefore could result in higher costs
without a proportional increase in revenues.
The development of non-lithium battery technologies could adversely affect us.
The development and adoption of new battery technologies that rely on inputs other than lithium compounds, could significantly impact our prospects and future revenues. Current and next generation
high energy density batteries for use in electric vehicles rely on lithium compounds as a critical input. Alternative materials and technologies are being researched with the goal of making batteries lighter,
more efficient, faster charging and less expensive, and some of these could be less reliant on lithium compounds. We cannot predict which new technologies may ultimately prove to be commercially viable
and on what time horizon. Commercialized battery technologies that use no, or significantly less, lithium could materially and adversely impact our prospects and future revenues.
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Albemarle Corporation and Subsidiaries
Downturns in our customers’ industries, many of which are cyclical, could adversely affect our sales and profitability.
Downturns in the businesses that use our specialty chemicals may adversely affect our sales. Many of our customers are in industries, including the electronics, building and construction, oilfield and
automotive industries, which are cyclical in nature, or which are subject to secular market downturns. Historically, cyclical or secular industry downturns have resulted in diminished demand for our
products, excess manufacturing capacity and lower average selling prices, and we may experience similar problems in the future. A decline in our customers’ industries may have a material adverse effect
on our sales and profitability.
Our results are subject to fluctuation because of irregularities in the demand for our HPC catalysts and certain of our agrichemicals.
Our HPC catalysts are used by petroleum refiners in their processing units to reduce the quantity of sulfur and other impurities in petroleum products. The effectiveness of HPC catalysts diminishes
with use, requiring the HPC catalysts to be replaced, on average, once every one to four years. The sales of our HPC catalysts, therefore, are largely dependent on the useful life cycle of the HPC catalysts
in the processing units and may vary materially by quarter. In addition, the timing and profitability of HPC catalysts sales can have a significant impact on revenue and profit in any one quarter. Sales of our
agrichemicals are also subject to fluctuation as demand varies depending on climate and other environmental conditions, which may prevent or reduce farming for extended periods. In addition, crop
pricing and the timing of when farms alternate from one crop to another crop in a particular year can also alter sales of agrichemicals.
Regulation, or the threat of regulation, of some of our products could have an adverse effect on our sales and profitability.
We manufacture or market a number of products that are or have been the subject of attention by regulatory authorities and environmental interest groups. For example, over the past decade, there has
been increasing scrutiny of certain brominated flame retardants by regulatory authorities, legislative bodies and environmental interest groups in various countries. We manufacture a broad range of
brominated flame retardant products, which are used in a variety of applications to protect people, property and the environment from injury and damage caused by fire. Concern about the impact of some
of our products on human health or the environment may lead to regulation, or reaction in our markets independent of regulation, that could reduce or eliminate markets for such products.
Agencies in the European Union (“E.U.”) continue to evaluate the risks to human health and the environment associated with certain brominated flame retardants such as tetrabromobisphenol A and
decabromodiphenylethane, both of which we manufacture. Additional government regulations, including limitations or bans on the use of brominated flame retardants, could result in a decline in our net
sales of brominated flame retardants and have an adverse effect on our sales and profitability. In addition, the threat of additional regulation or concern about the impact of brominated flame retardants on
human health or the environment could lead to a negative reaction in our markets that could reduce or eliminate our markets for these products, which could have an adverse effect on our sales and
profitability.
Our business and our customers are subject to significant requirements under REACH, which imposes obligations on E.U. manufacturers and importers of chemicals and other products into the E.U.
to compile and file comprehensive reports, including testing data, on each chemical substance, and perform chemical safety assessments. Additionally, substances of high concern, as defined under
REACH, are subject to an authorization process, which may result in restrictions in the use of products by application or even banning the product. REACH regulations impose significant additional
burdens on chemical producers, importers, downstream users of chemical substances and preparations, and the entire supply chain. See “Regulation” in Item 1. Business. Our significant manufacturing
presence and sales activities in the E.U. requires significant compliance costs and may result in increases in the costs of raw materials we purchase and the products we sell. Increases in the costs of our
products could result in a decrease in their overall demand; additionally, customers may seek products with lower regulatory compliance requirements, which could also result in a decrease in the demand
of certain products subject to the REACH regulations.
The TSCA requires chemicals to be assessed against a risk-based safety standard and calling for the elimination of unreasonable risks identified during risk evaluation. This regulation and other
pending initiatives at the U.S. state level, as well as initiatives in Canada, Asia and other regions, could potentially require toxicological testing and risk assessments of a wide variety of chemicals,
including chemicals used or produced by us. These assessments may result in heightened concerns about the chemicals involved and additional requirements being placed on the production, handling,
labeling or use of the subject chemicals. Such concerns and additional requirements could also increase the cost incurred by our customers to use our chemical products and otherwise limit the use of these
products, which could lead to a decrease in demand for these products. Such a decrease in demand could have an adverse impact on our business and results of operations.
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Albemarle Corporation and Subsidiaries
We could be subject to damages based on claims brought against us by our customers or lose customers as a result of the failure of our products to meet certain quality specifications.
Our products provide important performance attributes to our customers’ products. If a product fails to perform in a manner consistent with quality specifications or has a shorter useful life than
guaranteed, a customer of ours could seek the replacement of the product or damages for costs incurred as a result of the product failing to perform as guaranteed. These risks apply to our refinery catalysts
in particular because, in certain instances, we sell our refinery catalysts under agreements that contain limited performance and life cycle guarantees. Also, because many of our products are integrated into
our customers’ products, we may be requested to participate in, or fund in whole or in part the costs of, a product recall conducted by a customer. For example, some of our businesses supply products to
customers in the automotive industry. In the event one of these customers conducts a product recall that it believes is related to one of our products, we may be asked to participate in, or fund in whole or in
part, such a recall.
Our customers often require our subsidiaries to represent that our products conform to certain product specifications provided by our customers. Any failure to comply with such specifications could
result in claims or legal action against us.
A successful claim or series of claims against us could have a material adverse effect on our financial condition and results of operations and could result in our loss of one or more customers.
Our business is subject to hazards common to chemical and natural resource extraction businesses, any of which could injure our employees or other persons, damage our facilities or other
properties, interrupt our production and adversely affect our reputation and results of operations.
Our business is subject to hazards common to chemical manufacturing, storage, handling and transportation, as well as natural resource extraction, including explosions, fires, severe weather, natural
disasters, mechanical failure, unscheduled downtime, transportation interruptions, remediation, chemical spills, discharges or releases of toxic or hazardous substances or gases and other risks. These
hazards can cause personal injury and loss of life to our employees and other persons, severe damage to, or destruction of, property and equipment and environmental contamination. In addition, the
occurrence of disruptions, shutdowns or other material operating problems at our facilities due to any of these hazards may diminish our ability to meet our output goals. Accordingly, these hazards and
their consequences could adversely affect our reputation and have a material adverse effect on our operations as a whole, including our results of operations and cash flows, both during and after the period
of operational difficulties.
Our business could be adversely affected by environmental, health and safety laws and regulations.
The nature of our business, including historical operations at our current and former facilities, exposes us to risks of liability under environmental laws and regulations due to the production, storage,
use, transportation and sale of materials that can cause contamination or personal injury if released into the environment. In the jurisdictions in which we operate, we are subject to numerous U.S. and non-
U.S. national, federal, state and local environmental, health and safety laws and regulations, including those governing the discharge of pollutants into the air and water, the management and disposal of
hazardous substances and wastes and the cleanup of contaminated properties. We currently use, and in the past have used, hazardous substances at many of our facilities, and we have in the past been, and
may in the future be, subject to claims relating to exposure to hazardous materials. We also have generated, and continue to generate, hazardous wastes at a number of our facilities. Some of our facilities
also have lengthy histories of manufacturing or other activities that may have resulted in site contamination. Liabilities associated with the investigation and cleanup of hazardous substances, as well as
personal injury, property damages or natural resource damages arising from the release of, or exposure to, such hazardous substances, may be imposed in many situations without regard to violations of
laws or regulations or other fault, and may also be imposed jointly and severally (so that a responsible party may be held liable for more than its share of the losses involved, or even the entire loss). Such
liabilities may also be imposed on many different entities, including, for example, current and prior property owners or operators, as well as entities that arranged for the disposal of the hazardous
substances. Such liabilities may be material and can be difficult to identify or quantify.
Further, some of the raw materials we handle are subject to government regulation. These regulations affect the manufacturing processes, handling, uses and applications of our products. In addition,
our production facilities and a number of our distribution centers require numerous operating permits. Due to the nature of these requirements and changes in our operations, our operations may exceed
limits under permits or we may not have the proper permits to conduct our operations. Ongoing compliance with such laws, regulations and permits is an important consideration for us and we incur
substantial capital and operating costs in our compliance efforts.
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Albemarle Corporation and Subsidiaries
Compliance with environmental laws generally increases the costs of manufacturing, registration/approval requirements, transportation and storage of raw materials and finished products, and storage
and disposal of wastes, and could have a material adverse effect on our results of operations. We may incur substantial costs, including fines, damages, criminal or civil sanctions and remediation costs, or
experience interruptions in our operations, for violations arising under these laws or permit requirements. Additional information may arise in the future concerning the nature or extent of our liability with
respect to identified sites, and additional sites may be identified for which we are alleged to be liable, that could cause us to materially increase our environmental accrual or the upper range of the costs we
believe we could reasonably incur for such matters. Furthermore, environmental laws are subject to change and have become increasingly stringent in recent years. We expect this trend to continue and to
require materially increased capital expenditures and operating and compliance costs.
We may be subject to indemnity claims and liable for other payments relating to properties or businesses we have divested.
In connection with the sale of certain properties and businesses, we have agreed to indemnify the purchasers of such properties for certain types of matters, such as certain breaches of representations
and warranties, taxes and certain environmental matters. With respect to environmental matters, the discovery of contamination arising from properties that we have divested may expose us to indemnity
obligations under the sale agreements with the buyers of such properties or cleanup obligations and other damages under applicable environmental laws. We may not have insurance coverage for such
indemnity obligations or cash flows to make such indemnity or other payments. Further, we cannot predict the nature of and the amount of any indemnity or other obligations we may have to the applicable
purchaser. Such payments may be costly and may adversely affect our financial condition and results of operations.
At several of our properties where hazardous substances are known to exist (including some sites where hazardous substances are being investigated or remediated), we believe we are entitled to
contractual indemnification from one or more former owners or operators; however, in the event we make a claim, the indemnifier may disagree with us regarding, or not have the financial capacity to
fulfill, its indemnity obligation. If our contractual indemnity is not upheld or effective, our accrual and/or our costs for the investigation and cleanup of hazardous substances could increase materially.
We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar foreign anti-corruption laws.
The U.S. Foreign Corrupt Practices Act (the “FCPA”) and similar foreign anti-corruption laws in other jurisdictions around the world generally prohibit companies and their intermediaries from
making improper payments or providing anything of value to non-U.S. government officials for the purpose of obtaining or retaining business or securing an unfair advantage. We operate in some parts of
the world that have experienced governmental corruption to some degree, and, in certain circumstances, strict compliance with anti-bribery laws may conflict with local customs and practices. Although we
have established formal policies or procedures for prohibiting or monitoring this conduct, we cannot assure you that our employees or other agents will not engage in such conduct for which we might be
held responsible. In the event that we believe or have reason to believe that our employees, agents or distributors have or may have violated applicable anti-corruption laws, including the FCPA, we may be
required to investigate or have outside counsel investigate the relevant facts and circumstances, which can be expensive and require significant time and attention from senior management. If we are found
to be liable for violations of the FCPA or other applicable anti-corruption laws (either due to our own acts or our inadvertence, or due to the acts or inadvertence of others, including employees of our joint
ventures), we could suffer from civil and criminal penalties or other sanctions, which could have a material adverse effect on our business and results of operations.
As first reported in 2018, following receipt of information regarding potential improper payments being made by third-party sales representatives of our Refining Solutions business, within our
Catalysts segment, we promptly retained outside counsel and forensic accountants to investigate potential violations of the Company’s Code of Conduct, the FCPA, and other potentially applicable laws.
Based on this internal investigation, we have voluntarily self-reported potential issues relating to the use of third-party sales representatives in our Refining Solutions business, within our Catalysts segment,
to the U.S. Department of Justice (“DOJ”), the SEC, and the Dutch Public Prosecutor (“DPP”), and are cooperating with the DOJ, the SEC, and the DPP in their review of these matters. In connection with
our internal investigation, we have implemented, and are continuing to implement, appropriate remedial measures. We have commenced discussions with the SEC about a potential resolution.
At this time, we are unable to predict the duration, scope, result, or related costs associated with the investigations. We also are unable to predict what action may be taken by the DOJ, the SEC, or the
DPP, or what penalties or remedial actions they may ultimately seek. Any determination that our operations or activities are not, or were not, in compliance with existing laws or regulations could result in
the imposition of fines, penalties, disgorgement, equitable relief, or other losses. An adverse resolution could have a material adverse effect on our results of operations in a particular period.
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We are subject to extensive foreign government regulation that can negatively impact our business.
We are subject to government regulation in non-U.S. jurisdictions in which we conduct our business. The requirements for compliance with these laws and regulations may be unclear or
indeterminate and may involve significant costs, including additional capital expenditures or increased operating expenses, or require changes in business practice, in each case that could result in reduced
profitability for our business. Our having to comply with these foreign laws or regulations may provide a competitive advantage to competitors who are not subject to comparable restrictions or prevent us
from taking advantage of growth opportunities. Determination of noncompliance can result in penalties or sanctions that could also adversely impact our operating results and financial condition.
Our inability to protect our intellectual property rights, or being accused of infringing on intellectual property rights of third parties,, could have a material adverse effect on our business, financial
condition and results of operations.
Protection of our proprietary processes, methods and compounds and other technology is important to our business. We generally rely on patent, trade secret, trademark and copyright laws of the U.S.
and certain other countries in which our products are produced or sold, as well as licenses and nondisclosure and confidentiality agreements, to protect our intellectual property rights. The patent, trade
secret, trademark and copyright laws of some countries, or their enforcement, may not protect our intellectual property rights to the same extent as the laws of the U.S. Failure to protect our intellectual
property rights may result in the loss of valuable proprietary technologies. Additionally, some of our technologies are not covered by any patent or patent application and, even if a patent application has
been filed, it may not result in an issued patent. If patents are issued to us, those patents may not provide meaningful protection against competitors or against competitive technologies. We cannot assure
you that our intellectual property rights will not be challenged, invalidated, circumvented or rendered unenforceable.
We also conduct research and development activities with third parties and license certain intellectual property rights from third parties and we plan to continue to do so in the future. We endeavor to
license or otherwise obtain intellectual property rights on terms favorable to us. However, we may not be able to license or otherwise obtain intellectual property rights on such terms or at all. Our inability
to license or otherwise obtain such intellectual property rights could have a material adverse effect on our ability to create a competitive advantage and create innovative solutions for our customers, which
will adversely affect our net sales and our relationships with our customers.
We could face patent infringement claims from our competitors or others alleging that our processes or products infringe on their proprietary technologies. If we are found to be infringing on the
proprietary technology of others, we may be liable for damages and we may be required to change our processes, redesign our products partially or completely, pay to use the technology of others, stop
using certain technologies or stop producing the infringing product entirely. Even if we ultimately prevail in an infringement suit, the existence of the suit could prompt customers to switch to products that
are not the subject of infringement suits. We may not prevail in intellectual property litigation and such litigation may result in significant legal costs or otherwise impede our ability to produce and
distribute key products.
We also rely upon unpatented proprietary manufacturing expertise, continuing technological innovation and other trade secrets to develop and maintain our competitive position. While we generally
enter into confidentiality agreements with our employees and third parties to protect our intellectual property, we cannot assure you that our confidentiality agreements will not be breached, that they will
provide meaningful protection for our trade secrets and proprietary manufacturing expertise or that adequate remedies will be available in the event of an unauthorized use or disclosure of our trade secrets
or manufacturing expertise. In addition, our trade secrets and know-how may be improperly obtained by other means, such as a breach of our information technologies security systems or direct theft.
Our inability to acquire or develop additional reserves that are economically viable could have a material adverse effect on our future profitability.
Our lithium reserves will, without more, decline as we continue to extract these raw materials. Accordingly, our future profitability depends upon our ability to acquire additional lithium reserves that
are economically viable to replace the reserves we will extract. Exploration and development of lithium resources are highly speculative in nature. Exploration projects involve many risks, require
substantial expenditures and may not result in the discovery of sufficient additional resources that can be extracted profitably. Once a site with potential resources is discovered, it may take several years of
development until production is possible, during which time the economic viability of production may change. Substantial expenditures are required to establish recoverable proven and probable reserves
and to construct extraction and production facilities. As a result, there is no assurance that current or future exploration programs will be successful and there is a risk that depletion of reserves will not be
offset by discoveries or acquisitions.
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Albemarle Corporation and Subsidiaries
We utilize feasibility studies to estimate the anticipated economic returns of an exploration project. The actual project profitability or economic feasibility may differ from such estimates as a result of
factors such as, but not limited to, changes in volumes, grades and characteristics of resources to be mined and processed; changes in labor costs or availability of adequate and skilled labor force; the
quality of the data on which engineering assumptions were made; adverse geotechnical conditions; availability, supply and cost of water and power; fluctuations in inflation and currency exchange rates;
delays in obtaining environmental or other government permits or approvals or changes in the laws and regulations related to our operations or project development; changes in royalty agreements, laws
and/or regulations around royalties and other taxes; and weather or severe climate impacts.
For our existing operations, we utilize geological and metallurgical assumptions, financial projections and price estimates. These estimates are periodically updated to reflect changes in our
operations, including modifications to our proven and probable reserves and mineralized material, revisions to environmental obligations, changes in legislation and/or social, political or economic
environment, and other significant events associated with natural resource extraction operations. There are numerous uncertainties inherent in estimating quantities and qualities of lithium and costs to
extract recoverable reserves, including many factors beyond our control, that could cause results to differ materially from expected financial and operating results or result in future impairment charges. In
addition, it cannot be assumed that any part or all of the inferred mineral resources will ever be converted into mineral reserves, as defined by the SEC. See Item 2. Properties, for a discussion and
quantification of our current mineral resources and reserves.
There is risk to the growth of lithium markets.
Our lithium business is significantly dependent on the development and adoption of new applications for lithium batteries and the growth in demand for plug-in hybrid electric vehicles and battery
electric vehicles. To the extent that such development, adoption and growth do not occur in the volume and/or manner that we contemplate, including for reasons described under the heading “The
development of non-lithium battery technologies could adversely affect us,” above, the long-term growth in the markets for lithium products may be adversely affected, which would have a material
adverse effect on our business, financial condition and operating results.
Demand and market prices for lithium will greatly affect the value of our investment in our lithium resources and our ability to develop it successfully.
Our ability to successfully develop our lithium resources, including our 60% interest in MARBL’s Wodgina mine, and generate a return on investment will be affected by changes in the demand for
and market price of lithium-based end products, such as lithium hydroxide. The market price of these products can fluctuate and is affected by numerous factors beyond our control, primarily world supply
and demand. Such external economic factors are influenced by changes in international investment patterns, various political developments and macro-economic circumstances. In addition, the price of
lithium products is impacted by their purity and performance. We may not be able to effectively mitigate against such fluctuations.
Following the Wodgina acquisition, the Wodgina mine idled production of spodumene until market demand supported bringing the mine back into production. In October 2021, MARBL announced
its intention to resume spodumene concentrate production at the Wodgina mine, with the production restart expected during the second quarter of 2022, but there are no assurances that the mine will be put
back into production in that time frame or at all. Delays in putting the mine into production, as well as continued fluctuations in demand for and pricing of lithium and related products may affect the value
of our investment in Wodgina and our value as a whole.
If we are unable to retain key personnel or attract new skilled personnel, it could have an adverse effect on our business.
Our success depends on our ability to attract and retain key personnel including our management team. In light of the specialized and technical nature of our business, our performance is dependent
on the continued service of, and on our ability to attract and retain, qualified management, scientific, technical, marketing and support personnel. Competition for such personnel is intense, and we may be
unable to continue to attract or retain such personnel. In addition, because of our reliance on our senior management team, the unanticipated departure of any key member of our management team could
have an adverse effect on our business. Our future success depends, in part, on our ability to identify and develop or recruit talent to succeed our senior management and other key positions throughout the
organization. If we fail to identify and develop or recruit successors, we are at risk of being harmed by the departures of these key employees. Effective succession planning is also important to our long-
term success. Failure to ensure effective transfer of knowledge and smooth transitions involving key employees could hinder our strategic planning and execution.
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Albemarle Corporation and Subsidiaries
Some of our employees are unionized, represented by works councils or are employed subject to local laws that are less favorable to employers than the laws of the U.S.
As of December 31, 2021, we had approximately 6,000 employees, including employees of our consolidated joint ventures. Approximately 46% of these employees are represented by unions or
works councils. In addition, a large number of our employees are employed in countries in which employment laws provide greater bargaining or other rights to employees than the laws of the U.S. Such
employment rights require us to work collaboratively with the legal representatives of those employees to effect any changes to labor arrangements. For example, most of our employees in Europe are
represented by works councils that must approve any changes in conditions of employment, including salaries and benefits and staff changes, and may impede efforts to restructure our workforce. Although
we believe that we have a good working relationship with our employees, a strike, work stoppage, slowdown or significant dispute with our employees could result in a significant disruption of our
operations or higher labor costs.
Our joint ventures may not operate according to their business plans if our partners fail to fulfill their obligations, which may adversely affect our results of operations and may force us to dedicate
additional resources to these joint ventures.
We currently participate in a number of joint ventures and may enter into additional joint ventures in the future. The nature of a joint venture requires us to share control with unaffiliated third parties.
If our joint venture partners do not fulfill their obligations, the affected joint venture may not be able to operate according to its business plan. In that case, our results of operations may be adversely
affected and we may be required to materially change the level of our commitment to the joint venture. Also, differences in views among joint venture participants may result in delayed decisions or failures
to agree on major issues. If these differences cause the joint ventures to deviate from their business plans, our results of operations could be adversely affected.
Risks Related to Our Financial Condition
Our required capital expenditures can be complex, may experience delays or other difficulties, and the costs may exceed our estimates.
Our capital expenditures generally consist of expenditures to maintain and improve existing equipment, facilities and properties, and substantial investments in new or expanded equipment, facilities
and properties. Execution of these capital expenditures can be complex, and commencement of production requires start-up, commission and certification of product quality by our customers, which may
impact the expected output and timing of sales of product from such facilities. Construction of large chemical operations is subject to numerous risks and uncertainties, including, among others, the ability
to complete a project on a timely basis and in accordance with the estimated budget for such project and our ability to estimate future demand for our products. In addition, our returns on these capital
expenditures may not meet our expectations.
Future capital expenditures may be significantly higher, depending on the investment requirements of each of our business lines, and may also vary substantially if we are required to undertake
actions to compete with new technologies in our industry. We may not have the capital necessary to undertake these capital investments. If we are unable to do so, we may not be able to effectively compete
in some of our markets.
We will need a significant amount of cash to service our indebtedness and our ability to generate cash depends on many factors beyond our control.
Our ability to generate sufficient cash flow from operations or use existing cash balances to make scheduled payments on our debt depends on a range of economic, competitive and business factors,
many of which are outside our control. Our business may not generate sufficient cash flow from operations to service our debt obligations. If we are unable to service our debt obligations, we may need to
refinance all or a portion of our indebtedness on or before maturity, reduce or delay capital expenditures, sell assets or raise additional equity. We may not be able to refinance any of our indebtedness, sell
assets or raise additional equity on commercially reasonable terms or at all, which could cause us to default on our obligations and impair our liquidity. Our inability to generate sufficient cash flow or use
existing cash balances to satisfy our debt obligations, or to refinance our obligations on commercially reasonable terms, could have a material adverse effect on our business and financial condition.
Restrictive covenants in our debt instruments may adversely affect our business.
Our senior credit facilities and the indentures governing our senior notes contain select restrictive covenants. These covenants provide constraints on our financial flexibility. The failure to comply
with these or other covenants governing other indebtedness, including indebtedness incurred in the future, could result in an event of default, which, if not cured or waived, could have a material adverse
effect on our business, financial condition and results of operations, including cross-defaults to
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Albemarle Corporation and Subsidiaries
other debt facilities. See “Financial Condition and Liquidity—Long-Term Debt” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Changes in credit ratings issued by nationally recognized statistical rating organizations could adversely affect our cost of financing, the market price of our securities and our debt service obligations.
Credit rating agencies rate our debt securities on factors that include our operating results, actions that we take, their view of the general outlook for our industry and their view of the general outlook
for the economy. Actions taken by the rating agencies can include maintaining, upgrading or downgrading the current rating or placing us on a watch list for possible future downgrades. Downgrading the
credit rating of our debt securities or placing us on a watch list for possible future downgrades would likely increase our cost of future financing, limit our access to the capital markets and have an adverse
effect on the market price of our securities.
Borrowings under a portion of our debt facilities bear interest at floating rates, and are subject to adjustment based on the ratings of our senior unsecured long-term debt. The downgrading of any of
our ratings or an increase in any of the benchmark interest rates would result in an increase of the interest expense on our variable rate borrowings.
We are exposed to fluctuations in currency exchange rates, which may adversely affect our operating results and net income.
We conduct our business and incur costs in the local currency of most of the countries in which we operate. Changes in exchange rates between foreign currencies and the U.S. Dollar will affect the
recorded levels of our assets, liabilities, net sales, cost of goods sold and operating margins and could result in exchange losses. The primary currencies to which we have exposure are the E.U. Euro,
Japanese Yen, Chinese Renminbi, Australian Dollar and Chilean Peso. Exchange rates between these currencies and the U.S. Dollar in recent years have fluctuated significantly and may do so in the future.
With respect to our potential exposure to foreign currency fluctuations and devaluations, for the year ended December 31, 2021, approximately 27% of our net sales were denominated in currencies other
than the U.S. Dollar. Significant changes in these foreign currencies relative to the U.S. Dollar could also have an adverse effect on our ability to meet interest and principal payments on any foreign
currency-denominated debt outstanding. In addition to currency translation risks, we incur currency transaction risks whenever one of our operating subsidiaries or joint ventures enters into either a
purchase or a sales transaction using a different currency from its functional currency. Our operating results and net income may be affected by any volatility in currency exchange rates and our ability to
manage effectively our currency transaction and translation risks.
Changes in, or the interpretation of, tax legislation or rates throughout the world could materially impact our results.
Our effective tax rate and related tax balance sheet attributes could be impacted by changes in tax legislation throughout the world. Currently, the majority of our net sales are generated from
customers located outside the U.S., and a substantial portion of our assets and employees are located outside of the U.S.
We have not accrued income taxes or foreign withholding taxes on undistributed earnings for most non-U.S. subsidiaries, because those earnings are intended to be indefinitely reinvested in the
operations of those subsidiaries. Certain tax proposals with respect to such earnings could substantially increase our tax expense, which would substantially reduce our income and have a material adverse
effect on our results of operations and cash flows from operating activities.
Our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, expirations of tax holidays or rulings, changes in the assessment
regarding the realization of the valuation of deferred tax assets, or changes in tax laws and regulations or their interpretation. Recent developments, including the European Commission’s investigations on
illegal state aid, as well as the Organisation for Economic Co-operation and Development (“OECD”) project on Base Erosion and Profit Shifting may result in changes to long-standing tax principles,
which could adversely affect our effective tax rates or result in higher cash tax liabilities.
We are subject to the regular examination of our income tax returns by various tax authorities. Examinations in material jurisdictions or changes in laws, rules, regulations or interpretations by local
taxing authorities could result in impacts to tax years open under statute or to foreign operating structures currently in place. We regularly assess the likelihood of adverse outcomes resulting from these
examinations or changes in laws, rules, regulations or interpretations to determine the adequacy of our provision for taxes. It is possible the outcomes from these examinations will have a material adverse
effect on our financial condition and operating results.
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Albemarle Corporation and Subsidiaries
We may be subject to increased tax exposure resulting from Rockwood pre-acquisition periods.
Under the terms of certain purchase agreements, third party sellers have agreed to substantially indemnify us for tax liabilities pertaining to periods prior to our 2015 acquisition of Rockwood
Holdings Inc. (“Rockwood”). These indemnity obligations will continue generally until the applicable statutes of limitations expire. To the extent that such companies fail to indemnify or satisfy their
obligations, or if any amount is not covered by the terms of the indemnity, our earnings could be negatively impacted in future periods through increased tax expense.
Future events may impact our deferred tax asset position and U.S. deferred federal income taxes on undistributed earnings of international affiliates that are considered to be indefinitely reinvested.
We evaluate our ability to utilize deferred tax assets and our need for valuation allowances based on available evidence. This process involves significant management judgment about assumptions
that are subject to change from period to period based on changes in tax laws or variances between future projected operating performance and actual results. We are required to establish a valuation
allowance for deferred tax assets if we determine, based on available evidence at the time the determination is made, that it is more likely than not that some portion or all of the deferred tax assets will not
be utilized. In making this determination, we evaluate all positive and negative evidence as of the end of each reporting period. Future adjustments (either increases or decreases), to the deferred tax asset
valuation allowance are determined based upon changes in the expected realization of the net deferred tax assets. The utilization of our deferred tax assets ultimately depends on the existence of sufficient
taxable income in either the carry-back or carry-forward periods under the applicable tax law. Due to significant estimates used to establish the valuation allowance and the potential for changes in facts and
circumstances, it is reasonably possible that we will be required to record adjustments to the valuation allowance in future reporting periods. Changes to the valuation allowance or the amount of deferred
tax liabilities could have a materially adverse effect on our business, financial condition and results of operations. Further, should we change our assertion regarding the permanent reinvestment of the
undistributed earnings in foreign operations, a deferred tax liability may need to be established.
Our business and financial results may be adversely affected by various legal and regulatory proceedings.
We are involved from time to time in legal and regulatory proceedings, which may be material in the future. The outcome of proceedings, lawsuits and claims may differ from our expectations,
leading us to change estimates of liabilities and related insurance receivables.
Legal and regulatory proceedings, whether with or without merit, and associated internal investigations, may be time-consuming and expensive to prosecute, defend or conduct, may divert
management’s attention and other resources, inhibit our ability to sell our products, result in adverse judgments for damages, injunctive relief, penalties and fines, and otherwise negatively affect our
business.
Because a significant portion of our operations is conducted through our subsidiaries and joint ventures, our ability to service our debt may be dependent on our receipt of distributions or other
payments from our subsidiaries and joint ventures.
A significant portion of our operations is conducted through our subsidiaries and joint ventures. As a result, our ability to service our debt may be partially dependent on the earnings of our
subsidiaries and joint ventures and the payment of those earnings to us in the form of dividends, loans or advances and through repayment of loans or advances from us. Payments to us by our subsidiaries
and joint ventures are contingent upon our subsidiaries’ or joint ventures’ earnings and other business considerations and may be subject to statutory or contractual restrictions. In addition, there may be
significant tax and other legal restrictions on the ability of our non-U.S. subsidiaries or joint ventures to remit money to us.
Although our pension plans currently meet minimum funding requirements, events could occur that would require us to make significant contributions to the plans and reduce the cash available for
our business.
We have several defined benefit pension plans around the world, including in the U.S., U.K., Germany, Belgium and Japan. We are required to make cash contributions to our pension plans to the
extent necessary to comply with minimum funding requirements imposed by the various countries’ benefit and tax laws. The amount of any such required contributions will be determined annually based
on an actuarial valuation of the plans as performed by the plans’ actuaries.
In previous years, we have made voluntary contributions to our U.S. qualified defined benefit pension plans. We anticipate approximately $10 million of required cash contributions during 2022 for
our defined benefit pension plans. Additional voluntary pension contributions in and after 2022 may vary depending on factors such as asset returns, interest rates, and legislative changes. The amounts we
may elect or be required to contribute to our pension plans in the future may increase significantly. These contributions could be substantial and would reduce the cash available for our business.
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Albemarle Corporation and Subsidiaries
Further, an economic downturn or recession or market disruption in the capital and credit markets may adversely impact the value of our pension plan assets, our results of operations, our statement
of changes in stockholders’ equity and our liquidity. Our funding obligations could change significantly based on the investment performance of the pension plan assets and changes in actuarial assumptions
for local statutory funding valuations. Any deterioration of the capital markets or returns available in such markets may negatively impact our pension plan assets and increase our funding obligations for
one or more of these plans and negatively impact our liquidity. We cannot predict the impact of this or any further market disruption on our pension funding obligations.
We may not be able to consummate future acquisitions or integrate acquisitions into our business, which could result in unanticipated expenses and losses.
We believe that our customers are increasingly looking for strong, long-term relationships with a few key suppliers that help them improve product performance, reduce costs, and support new
product development. To satisfy these growing customer requirements, our competitors have been consolidating within product lines through mergers and acquisitions.
As part of our business growth strategy, we have acquired businesses and entered into joint ventures in the past and intend to pursue acquisitions and joint venture opportunities in the future. Our
ability to implement this component of our growth strategy will be limited by our ability to identify appropriate acquisition or joint venture candidates and our financial resources, including available cash
and borrowing capacity. The expense incurred in consummating acquisitions or entering into joint ventures, the time it takes to integrate an acquisition or our failure to integrate businesses successfully,
could result in unanticipated expenses and losses. Furthermore, we may not be able to realize any of the anticipated benefits from acquisitions or joint ventures.
The process of integrating acquired operations into our existing operations may result in unforeseen operating difficulties and may require significant financial resources that would otherwise be
available for the ongoing development or expansion of existing operations. Some of the risks associated with the integration of acquisitions include:
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potential disruption of our ongoing business and distraction of management;
unforeseen claims and liabilities, including unexpected environmental exposures;
unforeseen adjustments, charges and write-offs;
problems enforcing the indemnification obligations of sellers of businesses or joint venture partners for claims and liabilities;
unexpected losses of customers of, or suppliers to, the acquired business;
difficulty in conforming the acquired businesses’ standards, processes, procedures and controls with our operations;
in the case of foreign acquisitions, the need to integrate operations across different cultures and languages and to address the particular economic, currency, political and regulatory risks associated
with specific countries;
variability in financial information arising from the implementation of purchase price accounting;
inability to coordinate new product and process development;
loss of senior managers and other critical personnel and problems with new labor unions and cultural challenges associated with integrating employees from the acquired company into our
organization; and
challenges arising from the increased scope, geographic diversity and complexity of our operations.
We may continue to expand our business through acquisitions and we may incur additional indebtedness, including indebtedness related to acquisitions.
We have historically expanded our business primarily through acquisitions. A part of our business strategy is to continue to grow through acquisitions that complement our existing technologies and
accelerate our growth. Our credit facilities have limited financial maintenance covenants. In addition, the indenture and other agreements governing our senior notes do not limit our ability to incur
additional indebtedness in connection with acquisitions or otherwise. As a result, we may incur substantial additional indebtedness in connection with acquisitions.
Any such additional indebtedness and the related debt service obligations could have important consequences and risks for us, including:
reducing flexibility in planning for, or reacting to, changes in our businesses, the competitive environment and the industries in which we operate, and to technological and other changes;
lowering credit ratings;
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Albemarle Corporation and Subsidiaries
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reducing access to capital and increasing borrowing costs generally or for any additional indebtedness to finance future operating and capital expenses and for general corporate purposes;
reducing funds available for operations, capital expenditures, share repurchases, dividends and other activities; and
creating competitive disadvantages relative to other companies with lower debt levels.
If our goodwill, intangible assets or long-lived assets become impaired, we may be required to record a significant charge to earnings.
Under U.S. Generally Accepted Accounting Principles (“GAAP”), we review our intangible assets and long-lived assets for impairment when events or changes in circumstances indicate the carrying
value may not be recoverable. Goodwill is tested for impairment on October 31 of each year, or more frequently if required. Factors that may be considered a change in circumstances, indicating that the
carrying value of our goodwill, intangible assets or long-lived assets may not be recoverable, include, but are not limited to, a decline in our stock price and market capitalization, reduced future cash flow
estimates, and slower growth rates in our industry. We may be required to record a significant charge in our financial statements during the period in which any impairment of our goodwill, intangible assets
or long-lived assets is determined, negatively impacting our results of operations and financial condition.
General Risk Factors
Adverse conditions in the economy, and volatility and disruption of financial markets can negatively impact our customers, suppliers and other business partners and therefore have a material adverse
effect on our business and results of operations.
A global, regional or localized economic downturn may reduce customer demand or inhibit our ability to produce our products, negatively impacting our operating results. Our business and operating
results have been and will continue to be sensitive to the many challenges that can affect national, regional and global economies, including economic downturns (including credit market tightness, which
can impact our liquidity as well as that of our customers, suppliers and other business partners), declining consumer and business confidence, fluctuating commodity prices and volatile exchange rates. Our
customers may experience deterioration of their businesses, cash flow shortages and difficulty obtaining financing, leading them to delay or cancel plans to purchase products, and they may not be able to
fulfill their obligations in a timely fashion. Further, suppliers and other business partners may experience similar conditions, which could impact their ability to fulfill their obligations to us. Also, it could
be difficult to find replacements for business partners without incurring significant delays or cost increases.
Our business and operations could suffer in the event of cybersecurity breaches, information technology system failures, or network disruptions.
Attempts to gain unauthorized access to our information technology systems become more sophisticated over time. These attempts, which might be related to industrial or other espionage, include
covertly introducing malware to our computers and networks and impersonating authorized users, among others. We seek to detect and investigate all security incidents and to prevent their recurrence, but
in some cases we might be unaware of an incident or its magnitude and effects. The theft, unauthorized use or publication of our intellectual property and/or confidential business information could harm
our competitive position, reduce the value of our investment in research and development and other strategic initiatives or otherwise adversely affect our business. To the extent that any cybersecurity
breach results in inappropriate disclosure of our customers’ or licensees’ confidential information, we may incur liability as a result. The devotion of additional resources to the security of our information
technology systems in the future could significantly increase the cost of doing business or otherwise adversely impact our financial results.
In addition, risks associated with information technology systems failures or network disruptions, including risks associated with upgrading our systems or in successfully integrating information
technology and other systems in connection with the integration of businesses we acquire, could disrupt our operations by impeding our processing of transactions, financial reporting and our ability to
protect our customer or company information, which could adversely affect our business and results of operations.
The occurrence or threat of extraordinary events, including domestic and international terrorist attacks, may disrupt our operations and decrease demand for our products.
Chemical-related assets may be at greater risk of future terrorist attacks than other possible targets in the U.S. and around the world. As a result, we are subject to existing federal rules and regulations
(and may be subject to additional legislation or regulations in the future) that impose site security requirements on chemical manufacturing facilities, which increase our overhead expenses.
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Albemarle Corporation and Subsidiaries
We are also subject to federal regulations that have heightened security requirements for the transportation of hazardous chemicals in the U.S. We believe we have met these requirements but
additional federal and local regulations that limit the distribution of hazardous materials are being considered. We ship and receive materials that are classified as hazardous. Bans on movement of
hazardous materials through cities, like Washington, D.C., could affect the efficiency of our logistical operations. Broader restrictions on hazardous material movements could lead to additional investment
to produce hazardous raw materials and change where and what products we manufacture.
The Chemical Facility Anti-Terrorism Standards program (“CFATS Program”), which is administered by the Department of Homeland Security (“DHS”), identifies and regulates chemical facilities to
ensure that they have security measures in place to reduce the risks associated with potential terrorist attacks on chemical plants located in the U.S. In December 2014, the Protecting and Securing Chemical
Facilities from Terrorist Attacks Act of 2014 (“CFATS Act”) was enacted. DHS has enacted new rules under the CFATS Program that imposes comprehensive federal security regulations for high-risk
chemical facilities in possession of specified quantities of chemicals of interest. This rule establishes risk-based performance standards for the security of the U.S.'s chemical facilities. It requires covered
chemical facilities to prepare Security Vulnerability Assessments, which identify facility security vulnerabilities, and to develop and implement Site Security Plans, which include measures that satisfy the
identified risk-based performance standards. We have implemented all necessary changes to comply with the rules under the CFATS Program to date, however, we cannot determine with certainty any
future costs associated with any additional security measures that DHS may require.
The occurrence of extraordinary events, including future terrorist attacks and the outbreak or escalation of hostilities, cannot be predicted, and their occurrence can be expected to continue to
negatively affect the economy in general, and the markets for our products in particular. The resulting damage from a direct attack on our assets, or assets used by us, could include loss of life and property
damage. In addition, available insurance coverage may not be sufficient to cover all of the damage incurred or, if available, may be prohibitively expensive.
The COVID-19 pandemic could have a material adverse effect on our results of operations, financial position, and cash flows.
The COVID-19 pandemic has created significant uncertainty and economic disruption. While we have not experienced a material impact to date, the ultimate extent to which it impacts our business,
results of operations, financial position, and cash flows is difficult to predict and dependent upon many factors over which we have no control. These factors include, but are not limited to, the duration and
severity of the pandemic, including from the discovery of new strain variants; government restrictions on businesses and individuals; the health and safety of our employees and communities in which we
do business; the impact of the pandemic on our customers' businesses and the resulting demand for our products; the impact on our suppliers and supply chain network; the impact on U.S. and global
economies and the timing and rate of economic recovery; and potential adverse effects on the financial markets.
The Company has taken, and plans to continue to take, certain measures to maintain financial flexibility, including reducing debt balances with an underwritten public offering of its common stock
and implementing a cost savings initiative, while still protecting our employees and customers. However, if conditions caused by the COVID-19 pandemic worsen, the Company may not be able to
maintain compliance with its financial covenants and could be required to seek additional amendments to the Credit Agreements. If the Company were not able to obtain any such necessary additional
amendments, that would lead to an event of default and its lenders could require the Company to repay its outstanding debt. In that situation, the Company may not be able to raise sufficient debt or equity
capital, or divest assets, to refinance or repay the lenders.
Natural disasters or other unanticipated catastrophes could impact our results of operations.
The occurrence of natural disasters, such as hurricanes, floods or earthquakes; pandemics, such as COVID-19; or other unanticipated catastrophes at any of the locations in which we or our key
partners, suppliers and customers do business, could cause interruptions in our operations. Historically, major hurricanes have caused significant disruption to the operations on the U.S. Gulf Coast for
many of our customers and our suppliers of certain raw materials, which had an adverse impact on volume and cost for some of our products. Our operations in Chile could be subject to significant rain
events and earthquakes, and our operations in Asia could be subject to weather events such as typhoons. A global or regional pandemic or similar outbreak in a region of our, our customers, or our suppliers
could disrupt business. If similar or other weather events, natural disasters, or other catastrophe events occur in the future, they could negatively affect the results of operations at our sites in the affected
regions as well as have adverse impacts on the global economy.
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Albemarle Corporation and Subsidiaries
Our insurance may not fully cover all potential exposures.
We maintain property, business interruption, casualty, and other insurance, but such insurance may not cover all risks associated with the hazards of our business and is subject to limitations,
including deductibles and coverage limits. We may incur losses beyond the limits, or outside the coverage, of our insurance policies, including liabilities for environmental remediation. In addition, from
time to time, various types of insurance for companies in the specialty chemical industry have not been available on commercially acceptable terms or, in some cases, have not been available at all. We are
potentially at additional risk if one or more of our insurance carriers fail. Additionally, severe disruptions in the domestic and global financial markets could adversely impact the ratings and survival of
some insurers. Future downgrades in the ratings of enough insurers could adversely impact both the availability of appropriate insurance coverage and its cost. In the future, we may not be able to obtain
coverage at current levels, if at all, and our premiums may increase significantly on coverage that we maintain.
We may be exposed to certain regulatory and financial risks related to climate change.
Growing concerns about climate change may result in the imposition of additional regulations or restrictions to which we may become subject. Climate changes include changes in rainfall and in
storm patterns and intensities, water shortages, significantly changing sea levels and increasing atmospheric and water temperatures, among others. For example, there have been concerns regarding the
declining water level of the Dead Sea, from which our joint venture, JBC, produces bromine. A number of governments or governmental bodies have introduced or are contemplating regulatory changes in
response to climate change, including regulating greenhouse gas emissions. Potentially, additional U.S. federal regulation will be forthcoming with respect to greenhouse gas emissions (including carbon
dioxide) and/or “cap and trade” legislation that could impact our operations. In addition, we have operations in the E.U., Brazil, China, Japan, Jordan, Saudi Arabia, Singapore and the United Arab
Emirates, which have implemented, or may implement, measures to achieve objectives under the 2015 Paris Climate Agreement, an international agreement linked to the United Nations Framework
Convention on Climate Change (“UNFCC”), which set targets for reducing greenhouse gas emissions.
The outcome of new legislation or regulation in the U.S. and other jurisdictions in which we operate may result in new or additional requirements, additional charges to fund energy efficiency
activities, and fees or restrictions on certain activities. While certain climate change initiatives may result in new business opportunities for us in the area of alternative fuel technologies and emissions
control, compliance with these initiatives may also result in additional costs to us, including, among other things, increased production costs, additional taxes, reduced emission allowances or additional
restrictions on production or operations. Any adopted future climate change regulations could also negatively impact our ability to compete with companies situated in areas not subject to such limitations.
Even without such regulation, increased public awareness and adverse publicity about potential impacts on climate change emanating from us or our industry could harm us. We may not be able to recover
the cost of compliance with new or more stringent laws and regulations, which could adversely affect our business and negatively impact our growth. Furthermore, the potential impact of climate change
and related regulation on our customers is highly uncertain and there can be no assurance that it will not have an adverse effect on our financial condition and results of operations.
Item 1B.
Unresolved Staff Comments.
NONE
Item 2.
Properties.
We operate globally, with our principal executive offices located in Charlotte, North Carolina and regional shared services offices located in Budapest, Hungary and Dalian, China. Each of these
properties are leased. We and our affiliates also operate regional sales and administrative offices in various locations throughout the world, which are generally leased.
We believe that our production facilities, research and development facilities, and sales and administrative offices are generally well maintained, effectively used and are adequate to operate our
business. During 2021, the Company’s manufacturing plants operated at approximately 86% capacity, in the aggregate.
Set forth below is information regarding our production facilities operated by us and our affiliates. Additional details regarding our significant mineral properties can be found below the table.
Location
Lithium
Chengdu, China
Production of lithium carbonate and technical and battery-grade lithium hydroxide
Owned/Leased
Principal Use
Owned
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Albemarle Corporation and Subsidiaries
(a)
(a)
(a)
(a)(c)
(a)(b)
Location
Greenbushes, Australia
Kemerton, Australia
Kings Mountain, NC
La Negra, Chile
Langelsheim, Germany
New Johnsonville, TN
Salar de Atacama, Chile
Silver Peak, NV
Taichung, Taiwan
Wodgina, Australia
Xinyu, China
Bromine
Baton Rouge, LA
(a)
Magnolia, AR
(a)
Safi, Jordan
Twinsburg, OH
Catalysts
Amsterdam, the Netherlands
Bitterfeld, Germany
La Voulte, France
McAlester, OK
Mobile, AL
Niihama, Japan
(d)
Pasadena, TX
Principal Use
Production of lithium spodumene minerals and lithium concentrate
Production of lithium carbonate and technical and battery-grade lithium hydroxide
Production of technical and battery-grade lithium hydroxide, lithium salts and battery-grade lithium metal products
Production of technical and battery-grade lithium carbonate and lithium chloride
Production of butyllithium, lithium chloride, specialty products, lithium hydrides, cesium and special metals
Production of butyllithium and specialty products
Production of lithium brine and potash
Production of lithium brine, technical-grade lithium carbonate and lithium hydroxide
Production of butyllithium
Production of lithium spodumene minerals and lithium concentrate
Production of lithium carbonate and technical and battery-grade lithium hydroxide
(e)
(e)
Owned/Leased
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned
Owned and leased
Owned
(f)
(e)
Research and product development activities, and production of flame retardants
Production of flame retardants, bromine, inorganic bromides, agricultural intermediates and tertiary amines
Production of bromine and derivatives and flame retardants
Production of bromine-activated carbon
Leased
Owned
Owned and leased
Leased
(e)
Production of refinery catalysts, research and product development activities
Refinery catalyst regeneration, rejuvenation, and sulfiding
Refinery catalysts regeneration and treatment, research and development activities
Refinery catalyst regeneration, rejuvenation, pre-reclaim burn off, as well as specialty zeolites and additives marketing activities
Production of tin stabilizers
Production of refinery catalysts
Production of aluminum alkyls, orthoalkylated anilines, refinery catalysts and other specialty chemicals; refinery catalysts
regeneration services and research and development activities
Owned
Owned
Owned
Owned
Owned
Leased
Owned
(e)
(e)
(e)
(e)
(e)
Owned
Owned
(e)
(e)
Santa Cruz, Brazil
Takaishi City, Osaka, Japan
Production of catalysts, research and product development activities
Production of aluminum alkyls
(a) See below for further discussion of these significant mineral extraction facilities.
(b) Construction of Train I of the Kemerton, Australia facility was completed in the fourth quarter of 2021. Due to the ongoing labor shortages and COVID-19 pandemic travel restrictions in Western Australia, Train II
construction is expected to be completed in the second half of 2022. Commercial sales volume from Train I will begin in 2022 and Train II in 2023.
(c) Since its acquisition in 2019, the Wodgina mine idled production of spodumene until the market demand supported bringing the mine back into production. MARBL recently announced its intention to resume spodumene
concentrate production at this site, with the production restart expected during the second quarter of 2022.
(d) The Pasadena, Texas location includes three separate manufacturing plants which are owned, primarily utilized by Catalysts, including one plant that is owned by an unconsolidated joint venture.
(e) Owned or leased by joint venture.
(f) Ownership will revert to the Chilean government once we have sold all remaining amounts under our contract with the Chilean government pursuant to which we obtain lithium brine in Chile.
Mineral Properties
Set forth below are details regarding our mineral properties operated by us and our affiliates which have been prepared in accordance with the requirements of subpart 1300 of Regulation S-K, issued
by the Securities and Exchange Commission (“SEC”). As used in this Annual Report on Form 10-K, the terms “mineral resource,” “measured mineral resource,” “indicated
24
Albemarle Corporation and Subsidiaries
mineral resource,” “inferred mineral resource,” “mineral reserve,” “proven mineral reserve” and “probable mineral reserve” are defined and used in accordance with subpart 1300 of Regulation S-K. Under
subpart 1300 of Regulation S-K, mineral resources may not be classified as “mineral reserves” unless the determination has been made by a qualified person (“QP”) that the mineral resources can be the
basis of an economically viable project.
Except for that portion of mineral resources classified as mineral reserves, mineral resources do not have demonstrated economic value. Inferred mineral resources are estimates based on limited
geological evidence and sampling and have a too high of a degree of uncertainty as to their existence to apply relevant technical and economic factors likely to influence the prospects of economic
extraction in a manner useful for evaluation of economic viability. Estimates of inferred mineral resources may not be converted to a mineral reserve. It cannot be assumed that all or any part of an inferred
mineral resource will ever be upgraded to a higher category. A significant amount of exploration must be completed in order to determine whether an inferred mineral resource may be upgraded to a higher
category. Therefore, it cannot be assumed that all or any part of an inferred mineral resource exists, that it can be the basis of an economically viable project, that it will ever be upgraded to a higher
category, or that all or any part of the mineral resources will ever be converted into mineral reserves. See risk factor - “Our inability to acquire or develop additional reserves that are economically viable
could have a material adverse effect on our future profitability,” in Item 1A. Risk Factors.
Overview
At December 31, 2021, we had the following mineral extraction facilities:
Location
Australia
Greenbushes
Wodgina
Chile
Salar de Atacama
Jordan
(c)
Safi
United States
Kings Mountain, NC
Magnolia, AR
Silver Peak, NV
(c)
(c)
Business Segment
Ownership %
Extraction Type
Stage
49%
(a)
60%
100%
50%
100%
100%
100%
Hard rock
Hard rock
Brine
Brine
Hard rock
Brine
Brine
Production
(b)
Production
Production
Production
Development
Production
Production
Lithium
Lithium
Lithium
Bromine
Lithium
Bromine
Lithium
25
Albemarle Corporation and Subsidiaries
(a) Through our MARBL joint venture, we own 60% interest in the Wodgina Project. We are providing 100% of attributable value for Wodgina mineral resources based on intended marketing of 100% of the output of the
mining operation to the Kemerton lithium hydroxide processing plant.
(b) Following the Wodgina acquisition in 2019, the Wodgina mine idled production of spodumene until market demand supported bringing the mine back into production. In October 2021, our 60%-owned MARBL joint
venture announced its intention to resume spodumene concentrate production at the Wodgina mine, with the production restart expected during the second quarter of 2022.
(c) Site includes on-site, or otherwise near-by exclusive, conversion facilities. See individual property disclosure below for further details.
Aggregate annual production from our mineral extraction facilities is shown in the below table. Amounts represent Albemarle’s attributable portion based on ownership percentages noted above and
are shown in thousands of metric tons (“MT”) of lithium metal and bromine production. Lithium and bromine is extracted as brine or hard rock concentrate at the extraction facilities. These are then further
converted into various compounds and products at on-site processing facilities or other conversion facilities owned by Albemarle around the world. In addition, the brine or concentrate can be used by
tolling entities for further processing.
Lithium
Bromine
2021
Aggregate Annual Production (MT in thousands)
Year Ended December 31,
2020
483
128
301
131
2019
389
130
See individual property disclosure below for further details regarding mineral rights, titles, property size, permits and other information for our significant mineral extraction properties. The extracted
brine or hard rock is processed at facilities on location (as described below) or processed, or further processed, at other facilities throughout the world.
The following table provides a summary of our mineral resources, exclusive of reserves, at December 31, 2021. The below mineral resource amounts are rounded and shown in thousands of MT. The
amounts represent Albemarle’s attributable portion based on ownership percentages noted above. The relevant technical information supporting mineral resources for each material property is included in
the "”Material Individual Properties” section below, as well as the in the technical report summaries filed as Exhibits 96.1 to 96.6 to this report.
Measured Mineral Resources
Grade
(Li O%)
2
Amount (MT)
Indicated Mineral Resources
Grade
(Li O%)
2
Amount (MT)
Amount (MT)
Measured and Indicated Mineral Resources
Inferred Mineral Resources
Lithium - Hard Rock:
Australia
(a)
Greenbushes
Wodgina
United States
Kings Mountain, NC
Lithium - Brine:
Chile
Salar de Atacama
United States
Silver Peak, NV
—
—
—
—
16,900
22,300
1.47%
1.39%
16,900
22,300
—
Amount (MT)
—
Concentration (mg/L)
46,816
Amount (MT)
1.37%
Concentration (mg/L)
46,816
Amount (MT)
1.37%
Concentration (mg/L)
42,869
Amount (MT)
1.10%
Concentration (mg/L)
717
10
2,211
152
642
25
1,747
143
1,360
35
1,959
145
131
63
1,593
121
Grade
(Li O%)
2
1.47%
1.39%
Amount (MT)
20,000
164,000
Grade
(Li O%)
2
1.05%
1.15%
(a) Through our MARBL joint venture, we own 60% interest in the Wodgina Project. We are providing 100% of attributable value for Wodgina mineral resources based on intended marketing of 100% of the output of the
mining operation to the Kemerton lithium hydroxide processing plant.
The feedstock for the Safi, Jordan site, owned 50% by Albemarle through its JBC joint venture, is drawn from the Dead Sea, a nonconventional reservoir owned by the nations of Israel and Jordan.
As such, there are no specific resources owned by JBC, but Albemarle’s joint venture partner, Arab Potash Company (“APC”) has exclusive rights granted by the Hashemite Kingdom of Jordan to
withdraw brine from the Dead Sea and process it to extract minerals. The resource base of bromide ion
26
Albemarle Corporation and Subsidiaries
estimated to be allocated to Jordan’s share of the Dead Sea is estimated at 354.9 million MT. JBC is extracting approximately 1 percent of the bromine available. Bromide concentration in the Dead Sea is
estimated to average approximately 5,000 mg/L.
There are no mineral resource estimates at the Magnolia, AR bromine extraction site. All bromine mineral accumulations of economic interest and with reasonable prospects for eventual economic
extraction within the Magnolia production lease area are either currently on production or subject to an economically viable future development plan and are classified as mineral reserves.
The following table provides a summary of our mineral reserves at December 31, 2021. The below mineral reserve amounts are rounded and shown in thousands of MT. The amounts represent
Albemarle’s attributable portion based on ownership percentages noted above. The relevant technical information supporting mineral reserves for each material property is included in the "”Material
Individual Properties” section below, as well as the in the technical report summaries filed as Exhibits 96.1 to 96.6 to this report.
Lithium - Hard Rock
Australia
(a):
Greenbushes
Lithium - Brine:
Chile
Salar de Atacama
United States
Silver Peak, NV
Bromine:
United States
Magnolia, AR
(b)
Proven Mineral Reserves
Probable Mineral Reserves
Total Mineral Reserves
Amount (MT)
Grade
(Li O%)
2
Amount (MT)
Grade
(Li O%)
2
Amount (MT)
Grade
(Li O%)
2
—
Amount (MT)
—
Concentration (mg/L)
69,900
Amount (MT)
1.95%
Concentration (mg/L)
69,900
Amount (MT)
1.95%
Concentration (mg/L)
2,190
88
323
13
2,497
324
49
574
1,927
83
647
62
3,071
2,071
84
(a) The Wodgina mine is at an initial assessment level, and as a result, contains no mineral reserves. Mineral reserve estimates are not applicable for the Kings Mountain site.
(b) The concentration of bromine at the Magnolia site varies based on the physical location of the field and can range up to over 6,000 mg/L.
The mineral reserve estimate for the Safi, Jordan bromine site is 4.89 million MT of bromine from the Dead Sea. This estimate is based on the time available under the concession agreement with the
Hashemite Kingdom of Jordan and the processing capability of the JBC plant. As only approximately one percent of the available resource is consumed, as noted above, the reserve estimate is based on the
amount the JBC plant can produce over until the end of 2058, when the APC concession agreement ends. Bromine concentration used to calculate the reserve estimate from the Dead Sea was approximately
8,890 mg/L based on historical pumping.
Mineral resource and reserve estimates were prepared by a QP with an effective date provided in the individual technical report summaries filed as Exhibits 96.1 to 96.6 to this report. Differences
from those amounts in the technical report summaries represent depletion from the effective date of the report until December 31, 2021. Our mineral resource and reserve estimates are based on many
factors, including the area and volume covered by our mining rights, assumptions regarding our extraction rates based upon an expectation of operating the mines on a long-term basis and the quality of in-
place reserves.
Internal Controls
The modeling and analysis of our mineral resources and reserves was developed by our site personnel and reviewed by several levels of internal management, as well as the QP for each site. The
development of such resources and reserves estimates, including related assumptions, were prepared by a QP.
When determining resources and reserves, as well as the differences between resources and reserves, management developed specific criteria, each of which must be met to qualify as a resource or
reserve, respectively. These criteria, such as demonstration of economic viability, points of reference and grade, are specific and attainable. The QP and management agree
27
Albemarle Corporation and Subsidiaries
on the reasonableness of the criteria for the purposes of estimating resources and reserves. Calculations using these criteria are reviewed and validated by the QP.
Estimations and assumptions were developed independently for each significant mineral location. All estimates require a combination of historical data and key assumptions and parameters. When
possible, resources and data from public information and generally accepted industry sources, such as governmental resource agencies, were used to develop these estimations.
Each site has developed quality control and quality assurance (“QC/QA”) procedures, which were reviewed by the QP, to ensure the process for developing mineral resource and reserve estimates
were sufficiently accurate. QC/QA procedures include independent checks (duplicates) on samples by third party laboratories, blind blank/standard insertion into sample streams, duplicate sampling, among
others. In addition, the QPs reviewed the consistency of historical production at each site as part of their analysis of the QC/QA procedures. See details of the controls for each site in the technical summary
reports filed as Exhibits 96.1 to 96.6 to this report.
We recognize the risks inherent in mineral resource and reserve estimates, such as the geological complexity, the interpretation and extrapolation of field and well data, changes in operating approach,
macroeconomic conditions and new data, among others. The capital, operating and economic analysis estimates rely on a range of assumptions and forecasts that are subject to change. In addition, certain
estimates are based on mineral rights agreements with local and foreign governments. Any changes to these access rights could impact the estimates of mineral resources and reserves calculated in these
reports. Overestimated resources and reserves resulting from these risks could have a material effect on future profitability.
Material Individual Properties
Greenbushes, Australia
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Albemarle Corporation and Subsidiaries
The Greenbushes mine is a hard rock, open pit mine (latitude 33° 52´S, longitude 116° 04´ E) located approximately 250km south of Perth, Western Australia, 90km southeast of the port of Bunbury,
a major bulk-handling port in the southwest of Western Australia. The lithium mining operation is near the Greenbushes townsite located in the Shire of Bridgetown-Greenbushes. Access to the
Greenbushes Mine is via the paved South Western Highway between Bunbury and Bridgetown to Greenbushes Township and via the paved Maranup Ford Road to the Greenbushes Mine.
Lithium production from the Greenbushes Mine has been undertaken continuously for more than 20 years. Modern exploration has been undertaken on the property since the mid-1980s, first by
Greenbushes Limited, then by Lithium Australia Ltd and in turn by Sons of Gwalia prior to the acquisition of Greenbushes by Talison in 2007. Initial exploration focused largely on tantalum, with the
emphasis changing to lithium from around 2000. In 2014, Rockwood acquired a 49% ownership interest in Windfield, which owns 100% of Talison, from Sichuan Tianqi Lithium Industries Inc. This 49%
ownership in Windfield was assumed by Albemarle in 2015 as part of the acquisition of Rockwood. We purchase lithium concentrate from Windfield, and our investment in the joint venture is reported as
an unconsolidated equity investment on our balance sheet.
About 55% of the tenements held by Talison are covered by Western Australia’s State Forest, which is under the authority of the Western Australia Department of Biodiversity, Conservation and
Attractions. The majority of the remaining land is private land that covers about 40% of the surface rights. The remaining ground comprises crown land, road reserves and other miscellaneous reserves. The
tenements cover a total area of approximately 10,000 hectares and include the historic Greenbushes tin, tantalum and current lithium mining areas. See section 3 of the Greenbushes technical report
summary, filed as Exhibit 96.1 to this report, for a listing of tenements held by the Greenbushes site. Talison holds the mining rights for all lithium minerals on these tenements. The operating open pit
lithium mining and processing plant area covers approximately 2,000 hectares comprising three mining leases. All lithium mining activities, including tailings storage, processing plant operations, open pits
and waste rock dumps, are currently carried out within the boundaries of the three mining leases plus two general purpose leases. In order to keep the granted tenements in good standing, Talison is required
to maintain permits, make an annual contribution to the statutory Mining Rehabilitation Fund and pay a royalty on concentrate sales for lithium mineral production as prescribed under the Mining Act 1978
in Western Australia. There are no private royalties that apply to the Greenbushes property. Talison reviews and renews all tenements on an annual basis.
The Greenbushes deposit consists of a main, rare-metal zoned pegmatite body, with numerous smaller footwall pegmatite dykes and pods. The primary intrusion and its subsidiary dykes and pods are
concentrated within shear zones on the boundaries of granofels, ultramafic schists and amphibolites. The pegmatites are crosscut by ferrous-rich, mafic dolerite which is of paramount importance to the
currant mining methods. The pegmatite body is over 3 km long (north by northwest), up to 300 meters wide (normal to dip), strikes north to northwest and dips moderately to steeply west to southwest.
The major minerals from the Greenbushes pegmatite are quartz, spodumene, albite and K-feldspar. The main lithium-bearing minerals are spodumene (containing approximately 8% lithium oxide)
and varieties kunzite and hiddenite. Minor to trace lithium minerals include lepidolite mica, amblygonite and lithiophilite. Lithium is readily leached in the weathering environment and thus is virtually non-
existent in weathered pegmatite. Exploration drilling at Greenbushes has been ongoing for over 40 years, including drilling in 2020, using reverse circulation and diamond drill holes.
Three lithium mineral processing plants are currently operating on the Greenbushes site, two chemical grade plants and a technical grade plant. Tailings are discharged to the tailings storage facility
without the need for any neutralization process. Additional infrastructure on site includes power and water supply facilities, a laboratory, administrative offices, occupational health/safety/training offices,
dedicated mines rescue area, stores, storage sheds, workshops and engineering offices. The Greenbushes site also leases production drills, excavators, trucks and various support equipment to extract the ore
deposit by open pit methods. Talison’s power is delivered by a local distribution system and reticulated and metered within the site. Water is sourced from rainfall and stored in several process dams located
on site. We consider the condition of all of our plants, facilities and equipment to be suitable and adequate for the businesses we conduct, and we maintain them regularly. As of December 31, 2021, our
49% ownership interest of the gross asset value of the facilities at the Greenbushes site was approximately $415.6 million.
Talison ships the chemical-grade lithium concentrate in vessels to our facilities in Meishan and Xinyu, China to process into battery-grade lithium hydroxide. In addition, the output from Talison can
be used by tolling entities in China to produce both lithium carbonate and lithium hydroxide.
A summary of the Greenbushes facility’s lithium mineral resources and reserves as of December 31, 2021 are shown in the following tables. This is the first period estimated mineral resources,
exclusive of reserves, and reserves have been developed for Greenbushes since being acquired by Albemarle. SRK Consulting (U.S.) Inc. (“SRK”), a third-party firm comprising mining experts in
accordance with Item 1302(b)(1) of Regulation S-K, served as the QP and prepared the estimates
29
Albemarle Corporation and Subsidiaries
of lithium mineral resources and reserves at the Greenbushes facility, with an effective date of June 30, 2021. A copy of the QP’s technical report summary with respect to the lithium mineral resource and
reserve estimates at the Greenbushes facility, dated January 28, 2028 is filed as Exhibit 96.1 to this report. The amounts represent Albemarle’s attributable portion based on a 49% ownership percentage,
and are presented as MT in thousands.
Indicated mineral resources:
Resource Pit
Reserve Pit
Inferred mineral resources:
Resource Pit
Reserve Pit
Stockpiles
Amount
15,600
1,300
11,700
8,200
100
Grade (Li O%)
2
1.54%
0.64%
1.05%
1.05%
1.40%
• Mineral resources are reported exclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability.
Resources have been reported as in situ (hard rock within optimized pit shell) and stockpile (mined and stored on surface as blasted/crushed material).
•
Resources have been categorized subject to the opinion of a QP based on the amount/robustness of informing data for the estimate, consistency of geological/grade distribution, survey information, and have been
•
validated against long term mine reconciliation for the in-situ volumes.
Resources which are contained within the mineral reserve pit design may be excluded from reserves due to an Inferred classification or because they sit in the incremental cutoff grade range between the resource and
reserve cutoff grade. They are disclosed separately from the resources contained within the Resource Pit. There is reasonable expectation that some Inferred resources within the mineral reserve pit design may be
converted to higher confidence materials with additional drilling and exploration effort.
•
All Measured and Indicated Stockpile resources have been converted to mineral reserves.
• Mineral resources are reported considering a nominal set of assumptions for reporting purposes:
•
◦ Mass Yields (“MY”) for chemical grade material are based on Greenbushes chemical grade plant 1 (“CGP1”) life-of-mine (“LoM”) feed MY formula. For the LoM material, MY is assumed at 29.49% and is
subject to a 97% recovery limitation when the lithium oxide grade exceeds 5.5%. Mass yield varies as a function of grade, and may be reported herein at lower mass yields than the CGP1 average.
Pit optimization and economics for derivation of cutoff grade include mine gate pricing of $672/MT of 6% Li O concentrate, $4.75/MT mining cost (LoM average cost-variable by depth), $17.87/MT
processing cost, $4.91/MT G&A cost, and $2.66/MT sustaining capital cost.
Costs estimated in Australian Dollars (“AUD”) were converted to US Dollars based on an exchange rate of AUD 0.76:$1.00.
These economics define a cutoff grade of 0.573% Li O.
An overall 43% pit slope angle, 0% mining dilution, and 100% mining recovery.
Resources were reported above this 0.573% Li O cutoff grade and are constrained by an optimized break-even pit shell.
No infrastructure movement capital costs have been added to the optimization.
Resources are reported with a cutoff grade between 0.5% and 0.7% Li O.
Stockpile resources have been previously mined between nominal cutoff grades of 0.5 to 0.7% Li O.
2
2
2
2
2
◦
◦
◦
◦
◦
◦
◦
◦
• Mineral resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.
obable mineral reserves:
Reserve Pit
tockpiles
Indicated in situ resources have been converted to Probable reserves.
• Mineral reserves are reported exclusive of mineral resources.
•
• Measured and Indicated stockpile resources have been converted to Probable mineral reserves.
• Mineral reserves are reported considering a nominal set of assumptions for reporting purposes:
Amount
67,650
2,250
Grade (Li O%)
2
1.97%
1.31%
◦ Mineral reserves are based on a mine gate price of $577/MT of chemical grade concentrate (6% Li O).
◦ Mineral reserves assume 80% mining recovery for ore/waste contact areas and 100% for non-waste contact material.
◦ Mineral reserves are diluted at approximately 20% at zero grade for ore/waste contact areas in addition to internal dilution built into the resource model (2.7% with the assumed selective mining unit of 5 m x 5 m x
2
5 m).
30
Albemarle Corporation and Subsidiaries
◦
◦
◦
◦
◦
◦
◦
◦
◦
2
The MY for reserves processed through the chemical grade plants is estimated by the based on Greenbushes’ MY formula and the LoM mass yield is 29.49% subject to a 97% recovery limitation when the lithium
oxide grade exceeds 5.5%.
The MY for reserves processed through the chemical grade plant chemical grade plant 2 (“CGP2”) in the next three to four years is estimated by the based on Greenbushes’ MY formula for a LoM mass yield of
16.77%, and is subject to a 97% recovery limitation when the lithium oxide grade exceeds 5.5%. The CGP2 plant is going through a ramp up period where lower recoveries are expected until all equipment has
been optimized and additional capital is spent.
The MY for reserves processed through the technical grade plant is estimated by the based on Greenbushes’ MY formula and the LoM mass yield is 46.18%. There is approximately 3.5 million MT of technical
grade plant feed at 4% Li O
Although Greenbushes produces a technical grade product from the current operation, it is assumed that the reserves reported herein will be sold as a chemical grade product. This assumption is necessary because
feed for the technical grade plant is currently only defined at the grade control or blasting level. Therefore, it is conservatively assumed that concentrate produced by the technical grade plant will be sold at the
chemical grade product price
Pit optimization and economics for derivation of cutoff grade include mine gate pricing of $577/MT of 6% Li O concentrate, $4.75/MT mining cost (LoM average cost-variable by depth), $17.87/MT processing
cost, $4.91/MT G&A cost, and $2.66/MT sustaining capital cost. The mine gate price is based on 650/MT-concentrate cost-insurance-freight (“CIF”) less $73/MT-concentrate for government royalty and
transportation to China.
Costs estimated in AUD were converted to US Dollars based on an exchange rate of AUD 0.76:$1.00.
The price, cost and mass yield parameters, along with the internal constraints of the current operations, result in a mineral reserves cutoff grade of 0.7% Li O.
The cutoff grade of 0.7% Li O was applied to reserves that are constrained by the ultimate pit design and are detailed in a yearly mine schedule.
Stockpile reserves have been previously mined and are reported at a 0.7% Li O cutoff grade.
2
2
2
2
• Waste tonnage within the reserve pit is 459 MT at a strip ratio of 3.32:1 (waste to ore – not including reserve stockpiles).
• Mineral reserve tonnage, grade and mass yield have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.
Key assumptions and parameters relating to the lithium mineral resources and reserves at the Greenbushes facility are discussed in sections 11 and 12, respectively, of the Greenbushes technical
report summary.
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Albemarle Corporation and Subsidiaries
Wodgina, Australia
The Wodgina property, which includes a hard rock, open pit mine (latitude -21° 11' 25"S, longitude 118° 40' 25"E) is located approximately 110 km south-southeast of Port Hedland, Western Australia
between the Turner and Yule Rivers. The area includes multiple prominent greenstone ridges up to 180 m above mean sea level surrounded by granitic plains and lowlands. The property is accessible via
National Highway 1 to National highway 95 to the Wodgina camp road. All roads to site are paved. The nearest large regional airport is in Port Hedland which also hosts an international deep-water port
facility. In addition, a site dedicated all-weather airstrip is located near to site, capable of landing certain aircrafts.
The Wodgina pegmatite deposits were discovered in 1902. Since then, the pegmatite-hosted deposits have been mined for tin, tantalum, beryl, and lithium by various companies. Mining occurred
sporadically until Goldrim Mining formed a new partnership with Pan West Tantalum Pty Ltd., who opened open pit mining at the site in 1989 and progressively expanded during the 1990s. Active mining
at the Mt. Cassiterite pit has been started and stopped regularly between 2008 and the present. The mine was placed on care and maintenance in 2008, 2012, and most recently in 2019. In 2016, MRL
acquired the mine and upgraded the processing facilities and site infrastructure to 750ktpa spodumene plant producing 6% spodumene concentrate, completed in 2019. On October 31, 2019, we completed
the acquisition of a 60% interest in this hard rock lithium mine project and formed an unincorporated joint venture with MRL, named MARBL. We formed MARBL for the exploration, development,
mining, processing and production of lithium and other minerals (other than iron ore and tantalum) from the Wodgina Project. Following the acquisition, MARBL’s production of spodumene was idled until
market demand supported bringing the mine back into production. In October 2021, our 60%-owned MARBL joint venture announced its intention to resume spodumene concentrate production at the
Wodgina mine, with the production restart expected during the second quarter of 2022.
Wodgina holds mining tenements within the Karriyarra native title claim and are subject to the Land Use Agreement dated March 2001 between the Karriyarra People and Gwalia Tantalum Ltd (now
Wodgina Lithium, a 100% subsidiary of MRL, our MARBL joint venture partner). See section 3 of the Wodgina technical report summary, filed as Exhibit 96.2 to this report, for a listing of all mining and
exploration land tenements, which are in good standing and no known impediments exist. Certain
32
Albemarle Corporation and Subsidiaries
tenements are due for renewal in 2026 and another in 2030. Drilling and exploration activities have been conducted throughout the mining life of the Wodgina property.
The Wodgina mine is a pegmatite lithium deposit with spodumene the dominant mineral. The lithium mineralization occurs as 10 - 30 cm long grey-white spodumene crystals within medium grained
pegmatites comprising primarily of quartz, feldspar, spodumene, and muscovite. Typically, the spodumene crystals are oriented orthogonal to the pegmatite contacts.
The facilities at Wodgina consist of a three stage crushing plant, the spodumene concentration plant, administrative offices, an accommodation camp, a power station, gas pipeline, three mature and
reliable water bore fields, extension for future tailing storage and a fleet of owned and leased mine production equipment. The gas pipeline feeds the site power station to provide the power to the facilities.
Water is obtained from the dedicated water bore fields. We consider the condition of all of our plants, facilities and equipment to be suitable and adequate for the businesses we conduct, and we maintain
them regularly. As of December 31, 2021, our 60% ownership interest of the gross asset value of the facilities at our Wodgina site was approximately $192.2 million.
A summary of the Wodgina facility’s lithium mineral resources as of December 31, 2021 are shown in the following tables. This is the first period estimated mineral resources have been developed for
Wodgina since being acquired by Albemarle. SRK served as the QP and prepared the estimates of lithium mineral resources and reserves at the Wodgina facility, with an effective date of September 30,
2020. A copy of the QP’s technical report summary with respect to the lithium mineral resource estimates at the Wodgina facility, dated December 31, 2021, is filed as Exhibit 96.2 to this report. Through
our MARBL joint venture, we own 60% interest in the Wodgina Project. We are providing 100% of attributable value for Wodgina mineral resources based on intended marketing of 100% of the output of
the mining operation to the Kemerton lithium hydroxide processing plant. Amounts are presented as MT in thousands.
Indicated mineral resources
Measured and Indicated mineral resources
Inferred mineral resources
Amount
22,300
22,300
164,000
Grade (Li O%)
2
1.39%
1.39%
1.15%
• All significant figures are rounded to reflect the relative accuracy of the estimates.
• The Mineral Resource estimate has been classified in accordance with SEC S-K 1300 guidelines and definitions.
• The Cassiterite Deposit comprises the historically mined Mt. Cassiterite pit and undeveloped North Hill areas.
• Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. Inferred Mineral Resources have a high degree of uncertainty as to their economic and technical feasibility. It cannot be
assumed that all or any part of an Inferred Mineral Resources can be upgraded to Measured or Indicated Mineral Resources.
• Metallurgical recovery of lithium has been estimated on a block basis at a consistent 65% based on documentation from historic plant production.
• To demonstrate reasonable prospects for eventual economic extraction of Mineral Resources, a cut-off grade of 0.5% Li O based on metal recoverability assumptions, long-term lithium price assumptions of $584/MT,
2
variable mining costs averaging $3.40/MT, processing costs and G&A costs totaling $23/MT.
• There are no known legal, political, environmental, or other risks that could materially affect the potential development of the Mineral Resources based on the level of study completed for this property.
The Wodgina mine is at an initial assessment level, and as a result, contains no mineral reserves. Key assumptions and parameters relating to the lithium mineral resources at the Wodgina facility are
discussed in section 11 of the Wodgina technical report summary.
33
Albemarle Corporation and Subsidiaries
Salar de Atacama/La Negra, Chile
The Salar de Atacama is located in the commune of San Pedro de Atacama, with the operations approximately 100 kilometers to the south of this commune, in the extreme east of the Antofagasta
Region and close to the border with the republics of Argentina and Bolivia. Access to the property is on the major four-lane paved Panamericana Route 5 north from Antofagasta, Chile approximately 60
km northeast to B-385. On B-385, a two-lane paved highway, the Albemarle Salar de Atacama project (latitude 23°38'31.52"S, longitude 68°19'30.31"W) is approximately 175 km to the east. The site has a
small private airport that serves the project. A small paved runway airport is also located near San Pedro de Atacama and a large international airport is located in Antofagasta. The La Negra plant (latitude
23°45'20.31"S, longitude 70°18'36.92"W) has direct access roads and located approximately 20 km by paved four lane highway Route 28 southeast of Antofagasta turning north approximately 3 km on
Route 5.
In the early 1960s, water with high concentrations of salts was discovered in the Salar de Atacama Basin. In January 1975, one of our predecessors, Foote Mineral Company, signed a long-term
contract with the Chilean government for mineral rights with respect to the Salar de Atacama consisting exclusively of the right to access lithium brine, covering an area of approximately 16,700 hectares.
See section 3 of the Salar de Atacama technical report summary, filed as Exhibit 96.3 to this report, for a listing of mining concessions at the Salar de Atacama site. The contract originally permitted the
production and sale of up to 200,000 metric tons of lithium metal equivalent (“LME”), a calculated percentage of LCE. In 1981, the first construction of evaporation ponds in the Salar de Atacama began.
The following year, the construction of the lithium carbonate plant in La Negra began. In 1990, the facilities at the Salar de Atacama were expanded with a new well system and the capacity of the lithium
carbonate plant in the La Negra plant was expanded. In 1998, the lithium chloride plant in La Negra began operating, the same year that Chemetall purchased Foote Mineral Company. Subsequently, in
2004, Chemetall was acquired by Rockwood, and in 2015, Rockwood was acquired by Albemarle. Effective January 1, 2017, the Chilean government and Albemarle entered into an annex to the original
agreement through which its duration was modified, extending it until the balance of: (a) the original 200,000 metric tons of LME and an additional 262,132 metric tons of LME granted through this annex
have been exploited, processed, and sold, or (b) on January 1, 2044, whichever comes first. In addition, the amended
34
Albemarle Corporation and Subsidiaries
agreement provides for commission payments to the Chilean government based on sales price/metric ton on the amounts sold under the additional quota granted, our support of research and development in
Chile of lithium applications and solar energy, and our support of local communities in Northern Chile. Albemarle currently operates its extraction and production facilities in Chile under this mineral rights
agreement with the Chilean government.
The Salar de Atacama is a salt flat, the largest in Chile, located in the Atacama desert in northern Chile, which is the driest place on the planet and thus has an extremely high annual rate of
evaporation and extremely low annual rainfall. Our extraction through evaporation process works as follows: snow in the Andes Mountains melts and flows into underground pools of water containing
brine, which generally have high concentrations of lithium. We then pump the water containing brine above ground through a series of pumps and wells into a network of large evaporation ponds. Over the
course of approximately eighteen months, the desert sun evaporates the water causing other salts to precipitate and leaving behind concentrated lithium brine. If weather conditions are not favorable, the
evaporation process may be prolonged. After we obtain the lithium brine from the Salar de Atacama, we process it into lithium carbonate and lithium chloride at our manufacturing facilities in nearby La
Negra, Chile.
The filling materials of the Salar de Atacama Basin are dominated by the Vilama Formation and the more recently, in geologic time, by evaporitic and clastic materials that are currently being
deposited in the basin. These units house the basin's aquifer system and are composed of evaporitic chemical sediments that include carbonate, gypsum and halite intervals interrupted by volcanic deposits
of large sheets of ignimbrite, volcanic ash and smaller classical deposits. Lithium-rich brines are extracted from the halite aquifer that is located within the nucleus of the salt flat. The Salar de Atacama
basin contains a continental system of lithium-rich brine. These types of systems have six common (global) characteristics: arid climate; closed basin that contains a salt flat (salt crust), a salt lake, or both;
igneous and/or hydrothermal activity; tectonic subsidence; suitable sources of lithium; and sufficient time to concentrate the lithium in the brine.
In the Salar de Atacama basin, lithium-rich brines are found in a halite aquifer. Carbonate and sulfates are found near the edges of the basin. The average, minimum and maximum concentrations of
lithium in the Salar de Atacama basin are approximately 1,400, 900 and 7,000 mg/L, respectively. From 2017 through 2019, two drilling campaigns were carried out in order to obtain geological and
hydrogeological information at the Albemarle mining concession.
The facilities at the Salar de Atacama consist of extraction wells, evaporation and concentration ponds, leaching plants, a potash plant, a drying plant, services and general areas, including salt
stockpiles, as well as a fleet of owned and leased equipment. In addition, the site includes administrative offices, an operations building and a laboratory. The extracted concentrated lithium brine is sent to
the La Negra plant by truck for processing. The Salar de Atacama has its own powerhouse that generates the energy necessary for the entire operation of the facilities. We also have permanent and
continuous groundwater exploitation rights for two wells that are for industrial use and to supply the Salar de Atacama facilities. The La Negra facilities consist of a boron removal plant, a calcium and
magnesium removal plant, two lithium carbonate conversion plants, a lithium chloride plant, evaporation-sedimentation ponds, an offsite area where the raw materials are housed and the inputs that are
used in the process are prepared, a dry area where the various products are prepared, as well as a fleet of owned and leased equipment. La Negra is supplied electricity from a local company and has rights
to a well in the Peine community for its water supply. We are currently constructing a third lithium carbonate conversion plant expected to be completed mid-2021, followed by a six-month commissioning
and qualification process. We consider the condition of all of our plants, facilities and equipment to be suitable and adequate for the businesses we conduct, and we maintain them regularly. As of December
31, 2021, the combined gross asset value of our facilities at the Salar de Atacama and in La Negra, Chile (not inclusive of construction in process) was approximately $941.9 million.
A summary of the Salar de Atacama facility’s lithium mineral resources and reserves as of December 31, 2021 are shown in the following tables. This is the first period estimated mineral resources
(exclusive of reserves) and reserves have been developed for Salar de Atacama. SRK served as the QP and prepared the estimates of lithium mineral resources and reserves at the Salar de Atacama facility,
with an effective date of August 31, 2022. A copy of the QP’s technical report summary with respect to the lithium mineral resource and reserve estimates at the Salar de Atacama facility, dated January 28,
2022, is filed as Exhibit 96.3 to this report. Differences from the amounts in the technical report summary represent depletion since the effective date of the technical report summary until December 31,
2021. The amounts represent Albemarle’s attributable portion based on a 100% ownership percentage, and are presented as MT in thousands.
35
Albemarle Corporation and Subsidiaries
Measured mineral resources
Indicated mineral resources
Measured and Indicated mineral resources
Inferred mineral resources
Amount
717
642
1,360
131
Concentration (mg/L)
2,211
1,747
1,959
1,593
• Mineral resources are reported exclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability.
•
Given the dynamic reserve versus the static resource, a direct measurement of resources post-reserve extraction is not practical. Therefore, as a simplification, to calculate mineral resources, exclusive of reserves, the
quantity of lithium pumped in the life of mine plan was subtracted from the overall resource without modification to lithium concentration. Measured and indicated resource were deducted proportionate to their
contribution to the overall mineral resource.
Resources are reported on an in-situ basis.
Resources are reported between the elevations of 2,299 meters above mean sea level (“mamsl”) and 2,200 masl. Resources are reported as lithium metal.
Resources have been categorized subject to the opinion of a QP based on the amount/robustness of informing data for the estimate, consistency of geological/grade distribution, survey information.
Resources have been calculated using drainable porosity estimated from measured values in Upper Halite and volcanic, gypsum and clastic units, and bibliographical values based on the lithology and QP’s experience
in similar deposits.
The estimated economic cutoff grade utilized for resource reporting purposes is 670 mg/l lithium, based on the following assumptions:
•
•
•
•
•
◦
◦
◦
◦
◦
◦
A technical grade lithium carbonate price of $11,000/MT CIF La Negra. This is a 10% premium to the price utilized for reserve reporting purposes. The 10% premium applied to the resource versus the
reserve was selected to generate a resource larger than the reserve, ensuring the resource fully encompassed the reserve while still maintaining reasonable prospect for eventual economic extraction.
Recovery factors for the salar operation increase gradually over the span of four years, from the current 40% to the proposed Salar Yield Improvement Program (“SYIP”) 65% recovery in 2025. After that
point, evaporation pond recovery is assumed constant at 65%, considering the installation of a liming plant is assumed in 2027. An additional recovery factor of 80% lithium recovery is applied to the La
Negra lithium carbonate plant.
A fixed average annual brine pumping rate of 442 L/s is assumed, consistent with Albemarle’s permit conditions.
Operating cost estimates are based on a combination of fixed brine extraction, G&A and plant costs and variable costs associated with raw brine pumping rate or lithium production rate. Average life of mine
operating cost is calculated at approximately $3,000/MT CIF Asia.
Sustaining capital costs are included in the cutoff grade calculation and post the SYIP installation, average around $54 million per year.
Government royalties are excluded from the cutoff grade calculation as these costs are variable, depending upon price. A 3.5% community royalty is included in the cutoff grade as this royalty is fixed.
• Mineral Resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.
oven mineral reserves:
n Situ
n Process
obable mineral reserves:
n Situ
tal mineral reserves:
n Situ
n Process
Amount
Concentration (mg/L)
299
24
324
623
24
2,150
2,685
1,927
2,047
2,685
•
•
•
•
•
•
In process reserves quantify the prior 24 months of pumping data and reflect the raw brine, at the time of pumping. These reserves represent the first 24 months of feed to the lithium process plant in the economic
model.
Proven reserves have been estimated as the lithium mass pumped during Years 2020 through 2030 of the proposed LoM plan.
Probable reserves have been estimated as the lithium mass pumped from 2030 until the end of the proposed LoM plan (2041).
Reserves are reported as lithium metal
This mineral reserve estimate was derived based on a production pumping plan truncated in March 2042 (i.e., approximately 21 years). This plan was truncated to reflect the projected depletion of Albemarle’s
authorized lithium production quota.
The estimated economic cutoff grade for the Project is 783 mg/L lithium, based on the assumptions discussed below. The truncated production pumping plan remained well above the economic cutoff grade (i.e., the
economic cutoff grade did not result in a limiting factor to the estimation of the reserve).
A technical grade lithium carbonate price of $10,000/MT CIF Asia.
◦
36
Albemarle Corporation and Subsidiaries
◦
◦
◦
◦
◦
Recovery factors for the salar operation increase gradually over the span of 4 years, from the current 40% to the proposed SYIP 65% recovery in 2025. After that point, evaporation pond recovery is assumed
constant at 65%, considering the installation of a liming plant is assumed in 2027. An additional recovery factor of 80% lithium recovery is applied to the La Negra lithium carbonate plant.
A fixed average annual brine pumping rate of 442 L/s is assumed, consistent with Albemarle’s permit conditions.
Operating cost estimates are based on a combination of fixed brine extraction, G&A and plant costs and variable costs associated with raw brine pumping rate or lithium production rate. Average life of mine
operating cost is calculated at approximately $3,000/MT CIF Asia.
Sustaining capital costs are included in the cutoff grade calculation and post the SYIP installation, average around $54M per year.
Government royalties are excluded from the cutoff grade calculation as these costs are variable, depending upon price. A 3.5% community royalty is included in the cutoff grade as this royalty is fixed.
• Mineral reserve tonnage, grade and mass yield have been rounded to reflect the accuracy of the estimate and numbers may not add due to rounding.
Key assumptions and parameters relating to the lithium mineral resources and reserves at the Salar de Atacama facility are discussed in sections 11 and 12, respectively, of the Salar de Atacama
technical report summary.
Silver Peak, Nevada
The Silver Peak site (latitude 37.751773°N, longitude 117.639027°W) is located in a rural area approximately 30 miles southwest of Tonopah, in Esmeralda County, Nevada. It is located in the
Clayton Valley, an arid valley historically covered with dry lake beds (playas). The operation borders the small unincorporated town of Silver Peak, Nevada. Albemarle uses the Silver Peak site for the
production of lithium brines, which are used to make lithium carbonate and, to a lesser degree, lithium hydroxide. Access to the site is off of the paved highway SR-265 in the town of Silver Peak, Nevada.
The administrative offices are located on the south side of the road. The process facility is on the north side of the road and the brine operations are located approximately three miles east of Silver Peak on
Silver Peak Road and occupy both the north and south sides of the road. In addition, access to the site is also possible via gravel/dirt roads from Tonopah, Nevada and Goldfield, Nevada.
37
Albemarle Corporation and Subsidiaries
Lithium brine extraction in the Clayton Valley began in the mid-1960’s by one of our predecessors, the Foote Mineral Company. Since that time, lithium brine operations have been operated on a
continuous basis. In 1998, Chemetall purchased Foote Mineral Company. Subsequently, in 2004, Chemetall was acquired by Rockwood, and in 2015, Rockwood was acquired by Albemarle. Our mineral
rights in Silver Peak consist of our right to access lithium brine pursuant to our permitted and certified senior water rights, a settlement agreement with the U.S. government, originally entered into in June
1991, and our patented and unpatented land claims. Pursuant to the 1991 agreement, our water rights and our land claims, we have rights to all lithium that we can remove economically from the Clayton
Valley Basin in Nevada. See section 3 of the Silver Peak technical report summary, filed as Exhibit 96.4 to this report, for a listing of patented and unpatented claims at the Silver Peak site. We have been
operating at the Silver Peak site since 1966. Our Silver Peak site covers a surface of over 13,500 acres, more than 10,500 acres of which we own through a subsidiary. The remaining acres are owned by the
U.S. government from whom we lease the land pursuant to unpatented land claims that are renewed annually. Actual surface disturbance associated with the operations is 7,390 acres, primarily associated
with the evaporation ponds. The manufacturing and administrative activities are confined to an area approximately 20 acres in size.
We extract lithium brine from our Silver Peak site through substantially the same evaporation process we use at the Salar de Atacama. We process the lithium brine extracted from our Silver Peak site
into lithium carbonate at our plant in Silver Peak. It is hypothesized that the current levels of lithium dissolved in brine originate from relatively recent dissolution of halite by meteoric waters that have
penetrated the playa in the last 10,000 years. The halite formed in the playa during the aforementioned climatic periods of low precipitation and that the concentrated lithium was incorporated as liquid
inclusions into the halite crystals. There are no current exploration activities on the Silver Peak lithium operation. However, in January 2021, we announced that we will expand capacity in Silver Peak and
begin a program to evaluate clays and other available Nevada resources for commercial production of lithium. Beginning in 2021, we plan to invest $30 million to $50 million to double the current
production in Silver Peak by 2025, with the aim of making full use of the brine water rights.
The facilities at Silver Peak consist of extraction wells, evaporation and concentration ponds, a lithium carbonate plant, a lithium anhydrous plant, a lithium hydroxide plant, a liming plant, wellfield
and mill maintenance, a shipping and packaging facility and administrative offices, as well as a fleet of owned and leased equipment. Silver Peak is supplied electricity from a local company and we
currently have two operating fresh water wells nearby that supply water to the facilities. We consider the condition of all of our plants, facilities and equipment to be suitable and adequate for the businesses
we conduct, and we maintain them regularly. As of December 31, 2021, the gross asset value of our facilities at our Silver Peak site was approximately $60.8 million.
A summary of the Silver Peak facility’s lithium mineral resources and reserves as of December 31, 2021 are shown in the following tables. This is the first period estimated mineral resources and
reserves have been developed for Silver Peak. SRK served as the QP and prepared the estimates of lithium mineral resources (exclusive of reserves) and reserves at the Silver Peak facility, with an effective
date of June 30, 2021. A copy of the QP’s technical report summary with respect to the lithium mineral resource and reserve estimates at the Silver Peak facility, dated September 30, 2021, is filed as
Exhibit 96.4 to this report. Differences from the amounts in the technical report summary represent depletion since the effective date of the technical report summary until December 31, 2021. The amounts
represent Albemarle’s attributable portion based on a 100% ownership percentage, and are presented as MT in thousands.
Measured mineral resources
Indicated mineral resources
Measured and Indicated mineral resources
Inferred mineral resources
Amount
10
25
35
63
Concentration (mg/L)
152
143
145
121
• Mineral resources are reported exclusive of mineral reserves. Mineral resources are not mineral reserves and do not have demonstrated economic viability.
•
Given the dynamic reserve versus the static resource, a direct measurement of resources post-reserve extraction is not practical. Therefore, as a simplification, to calculate mineral resources, exclusive of reserves, the
quantity of lithium pumped in the LoM plan was subtracted from the overall resource without modification to lithium concentration. Measured and indicated resource were deducted proportionate to their contribution
to the overall mineral resource.
Resources are reported on an in situ basis.
Resources are reported as lithium metal.
Resources have been categorized subject to the opinion of a QP based on the amount/robustness of informing data for the estimate, consistency of geological/grade distribution, survey information.
•
•
•
38
Albemarle Corporation and Subsidiaries
•
•
Resources have been calculated using drainable porosity estimated from bibliographical values based on the lithology and QP’s experience in similar deposits.
The estimated economic cutoff grade utilized for resource reporting purposes is 50 mg/L lithium, based on the following assumptions:
◦
◦
◦
◦
◦
A technical grade lithium carbonate price of $11,000/metric tonne CIF North Carolina. This is a 10% premium to the price utilized for reserve reporting purposes. The 10% premium applied to the resource
versus the reserve was selected to generate a resource larger than the reserve, ensuring the resource fully encompassed the reserve while still maintaining reasonable prospect for eventual economic extraction.
Recovery factors for the wellfield are = -206.23*(Li wellfield feed) +7.1903*(wellfield Li feed)+0.4609. An additional recovery factor of 85% lithium recovery is applied to the lithium carbonate plant.
A fixed brine pumping rate of 20,000 acre feet per year (“afpy”), ramped up from current levels over a period of five years.
Operating cost estimates are based on a combination of fixed brine extraction, G&A and plant costs and variable costs associated with raw brine pumping rate or lithium production rate. Average life of mine
operating costs is calculated at approximately $4,900/MT lithium carbonate CIF North Carolina.
Sustaining capital costs are included in the cutoff grade calculation and include a fixed component at $2.5 million per year and an additional component tied to the estimated number of wells replaced per year.
2
• Mineral resources tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers may not add due to rounding.
Amount
Concentration (mg/L)
oven mineral reserves:
n Situ
n Process
obable mineral reserves:
n Situ
tal mineral reserves:
n Situ
n Process
11
1
49
60
1
87
103
83
84
103
•
•
•
•
•
•
In process reserves quantify the prior 24 months of pumping data and reflect the raw brine, at the time of pumping. These reserves represent the first 24 months of feed to the lithium process plant in the economic
model.
Proven reserves have been estimated as the lithium mass pumped during Years 2021 through 2026 of the proposed LoM plan.
Probable reserves have been estimated as the lithium mass pumped from 2026 until the end of the proposed LoM plan (2050).
Reserves are reported as lithium metal.
This mineral reserve estimate was derived based on a production pumping plan truncated at the end of year 2050 (i.e., approximately 29.5 years). This plan was truncated to reflect the QP’s opinion on uncertainty
associated with the production plan as a direct conversion of measured and indicated resource to proven and probable reserve is not possible in the same way as a typical hard-rock mining project.
The estimated economic cutoff grade for the Silver Peak project is 56 mg/L lithium, based on the assumptions discussed below. The production pumping plan was truncated due to technical uncertainty inherent in long-
term production modelling and remained well above the economic cutoff grade (i.e., the economic cutoff grade did not result in a limiting factor to the estimation of the reserve).
◦
◦
◦
◦
◦
A technical grade lithium carbonate price of $10,000/MT CIF North Carolina.
Recovery factors for the wellfield are = -206.23*(Li wellfield feed) +7.1903*(wellfield Li feed)+0.4609. An additional recovery factor of 85% lithium recovery is applied to the lithium carbonate plant.
A fixed brine pumping rate of 20,000 afpy, ramped up from current levels over a period of five years.
Operating cost estimates are based on a combination of fixed brine extraction, G&A and plant costs and variable costs associated with raw brine pumping rate or lithium production rate. Average life of mine
operating costs is calculated at approximately $5,100/MT lithium carbonate CIF North Carolina.
Sustaining capital costs are included in the cutoff grade calculation and include a fixed component at $2.5 million per year and an additional component tied to the estimated number of wells replaced per year.
2
• Mineral reserve tonnage, grade and mass yield have been rounded to reflect the accuracy of the estimate (thousand tonnes), and numbers may not add due to rounding.
Key assumptions and parameters relating to the lithium mineral resources and reserves at the Silver Peak facility are discussed in sections 11 and 12, respectively, of the Silver Peak technical report
summary.
39
Albemarle Corporation and Subsidiaries
Safi, Jordan
Our 50% interest in JBC, a consolidated joint venture established in 1999, with operations in Safi, Jordan, acquires bromine that is originally sourced from the Dead Sea. JBC processes the bromine
at its facilities into a variety of end products. The JBC operation (latitude 31°8'34.85"N , longitude 35°31'34.68"E) is located in Safi, Jordan, and is located on a 26-ha area on the southeastern edge of the
Dead Sea, about 6 kilometers north of the of the APC plant. JBC also has a 2-hectare storage facility within the free-zone industrial area at the Port of Aqaba. The Jordan Valley Highway/Route 65 is the
primary method of access for supplies and personnel to JBC. The Port of Aqaba is the main entry point for supplies and equipment for JBC, where imported shipping containers are offloaded from ships
and are transported by truck to JBC via the Jordan Valley Highway. Aqaba is approximately 205 km south of JBC via Highway 65. Major international airports can be readily accessed either at Amman or
Aqaba. Jordan’s railway transport runs north-south through Jordan and is not used to transport JBC employees and product.
In 1958, the Government of the Hashemite Kingdom of Jordan granted APC a concession for exclusive rights to exploit the minerals and salts from the Dead Sea brine until 2058; at that time, APC
factories and installations would become the property of the Government. APC was granted its exclusive mineral rights under the Concession Ratification Law No. 16 of 1958. APC produces potash from
the brine extracted from the Dead Sea. A concentrated bromide-enriched brine extracted from APC’s evaporation ponds is the feed material for the JBC plant. Following the formation of the joint venture,
the JBC bromine plant began operations in 2002. Expansion of the facilities to double its bromine production capacity went into operation in 2017.
The climate, geology and location provide a setting that makes the Dead Sea a valuable large-scale natural resource for potash and bromine. Today, the Dead Sea has a surface area of 583 km and a
2
brine volume of 110 km . The Dead Sea is the world’s saltiest natural lake, containing high concentrations of ions compared to that of regular sea water and an unusually high amount of magnesium and
bromine. There is an estimated 900 million tonnes of bromine in the Dead Sea.
3
40
Albemarle Corporation and Subsidiaries
Mining methods consist of all activities necessary to extract brine from the Dead Sea and extract Bromine. The low rainfall, low humidity and high temperatures in the Dead Sea area provide ideal
conditions for recovering potash from the brine by solar evaporation. JBC obtains its feedbrine from APC’s evaporation pond and this supply is intimately linked to the APC operation. As evaporation takes
place the specific gravity of the brine increases until its constituent salts progressively crystallize and precipitate out of solution, starting with sodium chloride (common salt) precipitating out to the bottom
of the ponds (pre-carnallite ponds). Brine is transferred to other pans in succession where its specific gravity increases further, ultimately precipitating out of the sodium chloride. Carnallite precipitation
takes place at the evaporation pond. where it is harvested from the brine and pumped as slurry to a process plant (where the potassium chloride is separated from the magnesium chloride). JBC extracts the
bromide-rich, “carnallite-free” brine through a pumping station. This brine feeds the bromine and magnesium plants. There is no exploration as typically conducted for the characterization of a mineral
deposit.
Infrastructure and facilities to support the operation of the bromine production plant at the Safi site is compact and contained in an approximately 33 ha area. JBC ships product in bulk through a
storage terminal in Aqaba. There are above ground storage tanks as well as pumps and piping for loading these products onto ships. JBC main activities at Aqaba are raw material/product storing,
importing, and exporting. An evaporation pond collects the waste streams from pipe flushing, housekeeping, and other activities. Fresh water is sources from the Mujib Reservoir, a man-made reservoir.
JBC is supplied electricity from the National Electric Power Company of Jordan. We consider the condition of all of our plants, facilities and equipment to be suitable and adequate for the businesses we
conduct, and we maintain them regularly. As of December 31, 2021, our 50% ownership interest of the gross asset value of the facilities at the Safi, Jordan site was approximately $210.6 million.
A summary of the Safi facility’s bromine mineral resources and reserves as of December 31, 2021 are provided below. This is the first period estimated mineral resources and reserves have been
developed for Safi. RPS Energy Canada Ltd (“RPS”), a third-party firm comprising mining experts in accordance with Item 1302(b)(1) of Regulation S-K, served as the QP and prepared the estimates of
bromine mineral resources and reserves at the Safi facility, with an effective date of December 31, 2021. A copy of the QP’s technical report summary with respect to the bromine mineral resource and
reserve estimates at the Safi facility, dated February 7, 2022, is filed as Exhibit 96.5 to this report.
The feedstock is drawn from the Dead Sea, a nonconventional reservoir owned by the nations of Israel and Jordan. As such, there are no specific resources owned by JBC, but Albemarle’s joint
venture partner, APC has exclusive rights granted by the Hashemite Kingdom of Jordan to withdraw brine from the Dead Sea and process it to extract minerals. The resource base of bromide ion estimated
to be allocated to Jordan’s share of the Dead Sea is estimated at 354.9 million MT. JBC is extracting approximately 1 percent of the bromine available. Bromide concentration in the Dead Sea is estimated
to average approximately 5,000 mg/L.
The mineral reserve estimate is 4.89 million MT of bromine from the Dead Sea. This estimate is based on the time available under the concession agreement with the Hashemite Kingdom of Jordan
and the processing capability of the JBC plant. As only approximately one percent of the available resource is consumed, as noted above, the reserve estimate is based on the amount the JBC plant can
produce over until the end of 2058, when the APC concession agreement ends. Revenues are based on a forecast bromine price ranging from $4,570 to $8,300 per MT. At the plant process recovery of 83.4
percent (bromine from bromide), product bromine is estimated at approximately 122,100 tonnes per year. Bromine concentration used to calculate the reserve estimate from the Dead Sea was
approximately 8,890 mg/L based on historical pumping.
Key assumptions and parameters relating to the bromine mineral resources and reserves at the Safi facility are discussed in sections 11 and 12, respectively, of the Safi technical report summary.
41
Albemarle Corporation and Subsidiaries
Magnolia, Arkansas
Magnolia is located in the southwest Arkansas, north of the center of Columbia County, approximately 50 miles east of Texarkana and 135 miles south of Little Rock. Our facilities include two
separate production plants, the South Plant and the West Plant. The South Plant (latitude 33.1775°N, longitude 93.2161°W) is accessible via U.S. Route 79 and paved local roads. The West Plant (latitude
33.2648°N, longitude 93.3151°W) is accessible by U.S. Route 371 and paved local roads. The decentralized well sites around the brine fields are accessed via paved Arkansas Highway 19, 98, 160 and 344.
In Magnolia, bromine is recovered from underground brine wells and then processed into a variety of end products at the plant on location. Albemarle has more than 50 brine production and injection
wells that are currently active on the property. Albemarle’s area of bromine operation is comprised of over 9,500 individual leases with local landowners comprising a total area of over 99,500 acres. The
leases have been acquired over time as field development extended across the field. Each lease continues for a period of 25 years or longer until after a two year period where brine is not injected or
produced from/to a well within two miles of lease land areas, as long as lease rentals are continuing to be paid. See section 3 of the Magnolia technical report summary, filed as Exhibit 96.6 to this report,
for a map of leases and burdens on those leases at the Magonlia site.
Bromine extraction began in Magnolia in 1965 as the first brine supply well was drilled, and additional wells were put into production over the next few years. In 1987, a predecessor company took
over operations of certain brine supply and injection wells, which Albemarle continues to operate to this day. In 2019, Albemarle completed, and put into production, two new brine production supply wells
in Magnolia.
In Magnolia, bromine exists as sodium bromide in the formation waters or brine of the Jurassic age Smackover Formation, a geological formation in Arkansas, in the subsurface at 7,000 to 8,500 feet
below sea level. The mineralization occurs within the highly saline Smackover Formation waters or brine where the bromide has an abnormally rich composition. The bromine concentration is more than
twice as high as that found in normal evaporated sea water. The bromine mineralization of the brine is distributed throughout the porous intervals of the upper and middle Smackover on the property. The
strong permeability and porosity of the Smackover grainstones provide excellent continuity of the bromine mineralization within the brine.
The facilities at Magnolia consist of brine production and injection wells, brine ponds, two bromine processing plants, pipelines between the plants and wells, a laboratory, storage and warehouses,
administrative offices, as well as a fleet of owned and leased equipment. Our Magnolia facilities are supplied electricity from a local company and we currently have several operating freshwater wells
nearby that supply water to the facilities. In addition, both plants have dedicated rail spurs that provide access to several rail lines to transport product throughout the country. We consider the condition of
all of our plants, facilities and equipment to be suitable and adequate for the businesses we conduct, and we maintain them regularly. As of December 31, 2021, the gross asset value of our facilities at our
Magnolia site was approximately $772.8 million.
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Albemarle Corporation and Subsidiaries
A summary of the Magnolia facility’s bromine mineral reserves as of December 31, 2021 are shown in the following table. This is the first period estimated mineral reserves have been developed for
Magnolia. RPS served as the QP and prepared the estimates of bromine mineral reserves at the Magnolia facility, with an effective date of December 31, 2021. A copy of the QP’s technical report summary
with respect to the bromine mineral resource and reserve estimates at the Magnolia facility, dated January 27, 2022, is filed as Exhibit 96.6 to this report. The amounts represent Albemarle’s attributable
portion based on a 100% ownership percentage, and are presented as MT in thousands.
There are no mineral resource estimates at the Magnolia, AR bromine extraction site. All bromine mineral accumulations of economic interest and with reasonable prospects for eventual economic
extraction within the Magnolia production lease area are either currently on production or subject to an economically viable future development plan and are classified as mineral reserves.
oven mineral reserves
obable mineral reserves
tal mineral reserves
Amount
2,497
574
3,071
•
•
•
•
Reserves are reported as bromine, on an in situ basis.
The estimated economic cutoff grade utilized for reserve reporting purposes is 250 mg/L bromine, with a bromine price ranging from $4,570 to $8,300 per MT.
Recovery factors for the Magnolia are 74% and 81% for the proven mineral reserves and total mineral reserves, respectively.
The concentration of bromine at the Magnolia site varies based on the physical location of the field and can range up to over 6,000 mg/L.
Key assumptions and parameters relating to the bromine mineral reserves at the Magnolia facility are discussed in section 12 of the Magnolia technical report summary.
Item 3.
Legal Proceedings.
We are involved in litigation incidental to our business and are a party to a number of legal actions and claims, various governmental proceedings and private civil lawsuits, including, but not limited
to, those related to environmental and hazardous material exposure matters, product liability, and breach of contract. Some of the legal proceedings include claims for compensatory as well as punitive
damages. While the final outcome of these matters cannot be predicted with certainty, considering, among other things, the legal defenses available and liabilities that have been recorded along with
applicable insurance, it is currently the opinion of management that none of these pending items will have a material adverse effect on our financial condition, results of operations or liquidity.
In addition, the information set forth under Note 17, “Commitments and Contingencies – Litigation” to the Consolidated Financial Statements of this Annual Report on Form 10-K is incorporated
herein by reference.
An unexpected adverse resolution of one or more of these items, however, could have a material adverse effect on our financial condition, results of operations or liquidity in that particular period.
Item 4.
Mine Safety Disclosures.
NONE
Executive Officers of the Registrant.
The names, ages and biographies of our executive officers, as of February 18, 2022, are set forth below. The term of office of each officer is until the meeting of the Board of Directors following the
next annual shareholders’ meeting in May 2022.
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Albemarle Corporation and Subsidiaries
Name
J. Kent Masters
Karen G. Narwold
Scott A. Tozier
Melissa Anderson
John C. Barichivich III
Raphael Crawford
Netha Johnson
Eric Norris
Age
61
62
56
57
54
46
51
55
Position
Chairman, President and Chief Executive Officer
Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary
Executive Vice President, Chief Financial Officer
Senior Vice President, Chief Human Resources Officer
Vice President, Corporate Controller, Chief Accounting Officer
President, Catalysts Global Business Unit
President, Bromine Global Business Unit
President, Lithium Global Business Unit
J. Kent Masters was elected as Chairman, President and Chief Executive Officer in April 2020. He joined the Albemarle board of directors in 2015 and served as Lead Independent Director from
2018 until April 2020. Prior to joining Albemarle, Mr. Masters served as Operating Partner of Advent International, an international private equity group. Prior to Advent, he served as Chief Executive
Officer of Foster Wheeler AG, a global engineering and construction contractor and power equipment supplier, when Foster Wheeler AG was acquired by Amec plc to form Amec Foster Wheeler plc. He is
also a former member of the executive board of Linde AG, a global leader in manufacturing and sales of industrial gases, with responsibility for the Americas, Africa, and the South Pacific.
Karen G. Narwold joined us in September of 2010 and currently serves as Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary. Ms. Narwold has over
25 years of legal, management and business experience with global industrial and chemical companies. After five years in private practice, she served as Vice President, General Counsel, Human Resources
and Secretary of GrafTech International Ltd., a global graphite and carbon manufacturer and former subsidiary of Union Carbide. She then served as Vice President and Strategic Counsel of Barzel
Industries, a North American steel processor and distributor. Prior to joining Albemarle, Ms. Narwold served as Special Counsel with Kelley Drye & Warren LLP and with Symmetry Advisors where she
worked in the areas of strategic, financial and capital structure planning and restructuring for public and private companies. Ms. Narwold was appointed as a member of the Board of Directors of Ingevity
Corporation on February 20, 2019.
Scott A. Tozier was elected as our Executive Vice President and Chief Financial Officer effective January 2011. Mr. Tozier also served as our Chief Accounting Officer from January 2013 until
February 2014. Mr. Tozier has over 25 years of diversified international financial management experience. Following four years of assurance services with the international firm Ernst & Young, LLP,
Mr. Tozier joined Honeywell International, Inc., where his 16 year career spanned senior financial positions in the U.S., Australia and Europe. His roles of increasing responsibilities included management
of financial planning, analysis and reporting, global credit and treasury services and Chief Financial Officer of Honeywell’s Transportation Systems, Turbo Technologies and Building Solutions divisions.
Most recently, Mr. Tozier served as Vice President of Finance, Operations and Transformation of Honeywell International, Inc.
Melissa Anderson joined Albemarle as Senior Vice President, Chief Human Resources Officer in January 2021. Prior to joining Albemarle, Ms. Anderson served as Executive Vice President,
Administration and Chief Human Resources Officer at Duke Energy, an American electric power holding company based in North Carolina. Previous to that role, she held the role of Senior Vice President,
Human Resources, for Domtar Corporation in South Carolina. Her previous experience also includes 17 years with IBM in progressive Human Resources leadership roles. Ms. Anderson serves on the
board of Vulcan Materials and as Chair of the Society of Human Resource Management (SHRM), the world's largest HR professional association. She is also a member of the advisory board for the Center
for Executive Succession at the University of South Carolina's Darla Moore School of Business.
John C. Barichivich III was elected Vice President, Corporate Controller and Chief Accounting Officer effective November 2019. Mr. Barichivich has worked for the Company since 2007, holding
various staff and leadership positions of increasing responsibility. Most recently, Mr. Barichivich served as Chief Financial Officer Vice President Finance, Purchasing, and S&OP Catalysts GBU since
February 2019. Between January 2016 and February 2019, Mr. Barichivich acted as Vice President - Finance, Bromine Specialties global business unit, and he previously served as Vice President of
Finance, Catalysts global business unit from September 2012 until December 2015. Mr. Barichivich was also the Director of Finance for the Albemarle shared service centers and he started his career with
Albemarle as the Operations Controller for the Polymer Solutions business. Prior to Albemarle, Mr. Barichivich held a number of positions, including Director of Finance at the Home Depot, CFO Sensors
SBE at PerkinElmer, and Manager of FP&A at General Electric. Mr. Barichivich began his career at
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Albemarle Corporation and Subsidiaries
Georgia Pacific, where he worked as an internal auditor and was a financial analyst supporting the restructuring of the Distribution Division.
Raphael Crawford was appointed President, Catalysts Global Business Unit in 2018. Mr. Crawford joined Albemarle in 2012 as Vice President of the Performance Catalysts Solutions unit, and the
additional responsibility of Managing Director for Rockwood Lithium GmbH after the Rockwood acquisition. In 2015, Mr. Crawford was appointed President of the Bromine Specialties business unit until
being named to his current role. Prior to Albemarle, Mr. Crawford served as the Director of Global Marketing and Business Development for Dow Coating Materials, a global business unit of The Dow
Chemical Company. He also served as the Global Commercial Director and Global Asset Director for Dow Water and Process Solutions, following the acquisition of Rohm and Haas Company. Previously,
Crawford held various strategic marketing and commercial roles at Rohm and Haas. Prior to Rohm and Haas, Mr. Crawford worked at Campbell Soup Company as a Marketing Manager. He began his
career at SNET Telecommunications where he served in several capacities including new ventures, finance and marketing. Mr. Crawford is a member of the board of directors of the American Fuel &
Petrochemical Manufacturers (AFPM) association, where he had served as chairman of the Petrochemical Members Committee and as a member of the Executive Committee.
Netha Johnson joined Albemarle as President, Bromine Global Business Unit in 2018. Mr. Johnson has more than 20 years of diverse leadership experience, both domestically and internationally,
including having worked extensively in Singapore, Malaysia, Taiwan, Japan and Germany. Prior to joining Albemarle, Mr. Johnson served in several progressive leadership roles with 3M Company. Most
recently, he served as Vice President and General Manager, Electrical Markets Division, where he was directly responsible for 3M’s electrical and renewable energy solutions. Prior to that, he served as
3M’s Vice President, Advanced Materials Division. In this role, he was responsible for three distinct businesses comprising the Advanced Material division, which provided world-leading, innovative
solutions in fluoropolymer chemicals, advanced ceramics and light-weighting materials. Preceding his business career, Mr. Johnson served as a U.S. Naval Officer. Mr. Johnson has served as a member of
the board of directors of Xcel Energy, Inc. since March 2020.
Eric Norris was appointed President, Lithium Global Business Unit in August 2018. Mr. Norris joined Albemarle in January 2018 as Chief Strategy Officer. In this role, he managed the company’s
strategic planning, M&A, and corporate business development programs as well as its investor relations efforts. Prior to joining Albemarle, Mr. Norris served as President of Health and Nutrition for FMC
Corporation. Following FMC’s announcement to acquire DuPont Agricultural Chemical assets, he led the divestiture of FMC Health and Nutrition to DuPont. Previously, Mr. Norris served as Vice
President and Global Business Director for FMC Health and Nutrition, and Vice President and Global Business Director for FMC Lithium. During his 16-year FMC career, he served in additional
leadership roles including Investor Relations, Corporate Development and Director of FMC Healthcare Ventures. Prior to FMC, Mr. Norris founded and led an internet-based firm offering formulation and
design tools to the chemical industry. Previously, he served in a variety of roles for Rohm and Haas Company including sales, marketing, strategic planning and investor relations. Norris is a member of the
board of directors of Communities in Schools of Charlotte-Mecklenburg and is a member of the board of advisors of The Zero Emission Transportation Association (ZETA).
Item 5.
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
PART II
Our common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “ALB.” There were 117,036,615 shares of common stock held by 2,180 shareholders of record as of
February 11, 2022. We expect to continue to declare and pay dividends to our shareholders in the future, however, dividends are declared solely at the discretion of our Board of Directors and there is no
guarantee that the Board of Directors will continue to declare dividends in the future.
Stock Performance Graph
The graph below shows the cumulative total shareholder return assuming the investment of $100 in our common stock on December 31, 2016 and the reinvestment of all dividends thereafter. The
information contained in the graph below is furnished and therefore not to be considered “filed” with the SEC, and is not incorporated by reference into any document that incorporates this Annual Report
on Form 10-K by reference.
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Albemarle Corporation and Subsidiaries
Item 6.
Item 7.
[Removed and Reserved]
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Forward-looking Statements
Some of the information presented in this Annual Report on Form 10-K, including the documents incorporated by reference, may constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on our current expectations, which are in turn based on assumptions that we believe are reasonable based on
our current knowledge of our business and operations. We have used words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “should,” “would,” “will” and variations of such
words and similar expressions to identify such forward-looking statements.
These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our
control. There can be no assurance that our actual results will not differ materially from the results and expectations expressed or implied in the forward-looking statements. Factors that could cause actual
results to differ materially from the outlook expressed or implied in any forward-looking statement include, without limitation, information related to:
•
•
•
•
•
•
•
•
•
•
•
changes in economic and business conditions;
product development;
future acquisition and divestiture transactions, including the ability to successfully execute, operate and integrate acquisitions and divestitures;
expected benefits from proposed transactions;
timing of active and proposed projects;
changes in financial and operating performance of our major customers and industries and markets served by us;
the timing of orders received from customers;
the gain or loss of significant customers;
competition from other manufacturers;
changes in the demand for our products or the end-user markets in which our products are sold;
limitations or prohibitions on the manufacture and sale of our products;
46
Albemarle Corporation and Subsidiaries
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
availability of raw materials;
increases in the cost of raw materials and energy, and our ability to pass through such increases to our customers;
changes in our markets in general;
fluctuations in foreign currencies;
changes in laws and government regulation impacting our operations or our products;
the occurrence of regulatory actions, proceedings, claims or litigation;
the effects of climate change, including any regulatory changes to which we might be subject;
the occurrence of cyber-security breaches, terrorist attacks, industrial accidents or natural disasters;
hazards associated with chemicals manufacturing;
the inability to maintain current levels of product or premises liability insurance or the denial of such coverage;
political unrest affecting the global economy, including adverse effects from terrorism or hostilities;
political instability affecting our manufacturing operations or joint ventures;
changes in accounting standards;
the inability to achieve results from our global manufacturing cost reduction initiatives as well as our ongoing continuous improvement and rationalization programs;
changes in the jurisdictional mix of our earnings and changes in tax laws and rates;
changes in monetary policies, inflation or interest rates that may impact our ability to raise capital or increase our cost of funds, impact the performance of our pension fund investments and
increase our pension expense and funding obligations;
volatility and uncertainties in the debt and equity markets;
technology or intellectual property infringement, including through cyber-security breaches, and other innovation risks;
decisions we may make in the future;
uncertainties as to the duration and impact of the COVID-19 pandemic; and
the other factors detailed from time to time in the reports we file with the U.S. SEC.
We assume no obligation to provide revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws. The following
discussion should be read together with our consolidated financial statements and related notes included in this Annual Report on Form 10-K.
The following is a discussion and analysis of our results of operations for the years ended December 31, 2021, 2020 and 2019. A discussion of our consolidated financial condition and sources of
additional capital is included under a separate heading “Financial Condition and Liquidity.”
Overview
We are a leading global developer, manufacturer and marketer of highly-engineered specialty chemicals that are designed to meet our customers’ needs across a diverse range of end markets. Our
corporate purpose is making the world safe and sustainable by powering the potential of people. The end markets we serve include energy storage, petroleum refining, consumer electronics, construction,
automotive, lubricants, pharmaceuticals and crop protection. We believe that our commercial and geographic diversity, technical expertise, access to high-quality resources, innovative capability, flexible,
low-cost global manufacturing base, experienced management team and strategic focus on our core base technologies will enable us to maintain leading positions in those areas of the specialty chemicals
industry in which we operate.
Secular trends favorably impacting demand within the end markets that we serve combined with our diverse product portfolio, broad geographic presence and customer-focused solutions will
continue to be key drivers of our future earnings growth. We continue to build upon our existing green solutions portfolio and our ongoing mission to provide innovative, yet commercially viable, clean
energy products and services to the marketplace to contribute to our sustainable revenue. For example, our Lithium business contributes to the growth of clean miles driven with electric miles and more
efficient use of renewable energy through grid storage; Bromine enables the prevention of fires starting in electronic equipment, greater fuel efficiency from rubber tires and the reduction of emissions from
coal fired power plants; and the Catalysts business creates efficiency of natural resources through more usable products from a single barrel of oil, enables safer, greener production of alkylates used to
produce more environmentally-friendly fuels, and reduced emissions through cleaner transportation fuels. We believe our disciplined cost reduction efforts and ongoing productivity improvements, among
other factors, position us well to
47
Albemarle Corporation and Subsidiaries
take advantage of strengthening economic conditions as they occur, while softening the negative impact of the current challenging global economic environment.
2021 Highlights
•
In the first quarter of 2021, we increased our quarterly dividend for the 28th consecutive year, to $0.39 per share.
• We announced the planned capacity expansion at our lithium production facility in Silver Peak, Nevada beginning in 2021. We plan to invest $30 million to $50 million to double the current
production at the Silver Peak site by 2025, making full use of the brine water rights.
• On February 8, 2021, we completed an underwritten public offering of 8,496,773 shares of our common stock, par value $0.01 per share, at a price to the public of $153.00 per share. We also
granted to the underwriters an option to purchase up to an additional 1,274,509 shares, which was exercised. The total gross proceeds from this offering were approximately $1.5 billion, before
deducting expenses, underwriting discounts and commissions.
• Using the proceeds of the underwritten public offering of shares of our common stock, we repaid the outstanding principal balances of the 1.875% senior notes due in 2021, the floating rate notes
due in 2022, the unsecured credit facility originally entered into on August 14, 2019, as amended and restated on December 15, 2020 (the “2019 Credit Facility”) and the commercial paper notes. In
addition, we repaid €123.8 million of the 1.125% notes due in 2025 and $128.4 million of the 3.45% senior notes due in 2029. As a result, we recorded a loss on early extinguishment of debt of
$29.0 million, representing the tender premiums, fees, unamortized discounts and unamortized deferred financing costs from the redemption of this debt during 2021.
• We announced that we have joined the United Nations Global Compact, a voluntary leadership platform for the development, implementation and disclosure of responsible business practices, and
the largest corporate sustainability initiative in the world.
• On June 1, 2021, we completed the sale of our FCS business to Grace for proceeds of approximately $570 million, consisting of $300 million in cash and the issuance to Albemarle of preferred
equity of a Grace subsidiary having an aggregate stated value of $270 million. The sale included our operations in Tyrone, Pennsylvania and South Haven, Michigan.
• On June 30, 2021, we announced the opening of our Battery Materials Innovation Center (“BMIC”) located at the Kings Mountain, North Carolina site. The BMIC is now fully operational and will
support our lithium hydroxide, lithium carbonate and advanced energy storage materials growth platforms.
• On September 30, 2021, we signed a definitive agreement to acquire all of the outstanding equity of Tianyuan, for approximately $200 million in cash. Tianyuan's operations include a recently
constructed lithium processing plant with a designed annual conversion capacity of up to 25,000 metric tons of LCE per year.
• On October 22, 2021, we announced that we signed two investment agreements in China in support of the expansion of our lithium conversion capacity. Following the agreements, we will move
forward with the design, engineering and permitting plans to build aoog
•
conversion plant at each site, each of which has planned production capacity initially targeting 50,000 metric tons lithium hydroxide per annum. Subject to additional studies and approvals, it is
expected these plants would start construction during 2022 and complete construction by the end of 2024.
• Our 60%-owned MARBL joint venture recently announced its intention to resume spodumene concentrate production at the Wodgina spodumene mine, with the production restart expected during
the second quarter of 2022.
• We achieved earnings of $123.7 million during 2021 as compared to $375.8 million for 2020. Earnings for 2021 included an after tax gain of $330.8 million from the sale of the FCS business, but
were negatively impact by an after tax loss of $508.5 million following an arbitration ruling related to a legal matter from a legacy Rockwood Holdings, Inc. (“Rockwood”) business sold to
Huntsman International LLC (“Huntsman”) prior to our acquisition of Rockwood. In addition, 2021 included a $132.4 million expense related to MRL’s 40% interest in cost overruns of the lithium
hydroxide conversion assets being built in Kemerton included as part of the Wodgina purchase price. Earnings for 2021 includes pension and other postretirement benefit (“OPEB”) actuarial gains
of $43.6 million after income taxes, compared to pension and OPEB actuarial losses of $40.9 million after income taxes in 2020.
•
Cash flows from operations in 2021 were $344.3 million.
Outlook
The current global business environment presents a diverse set of opportunities and challenges in the markets we serve. In particular, the market for lithium battery and energy storage, particularly
that for electric vehicles (“EVs”), remains strong,
48
Albemarle Corporation and Subsidiaries
providing the opportunity to continue to develop high quality and innovative products while managing the high cost of expanding capacity. The other markets we serve continue to present various
opportunities for value and growth as we have positioned ourselves to manage the impact on our business of changing global conditions, such as slow and uneven global growth, currency exchange
volatility, crude oil price fluctuation, a dynamic pricing environment, an ever-changing landscape in electronics, the continuous need for cutting edge catalysts and technology by our refinery customers and
increasingly stringent environmental standards. Amidst these dynamics, we believe our business fundamentals are sound and that we are strategically well-positioned as we remain focused on increasing
sales volumes, optimizing and improving the value of our portfolio primarily through pricing and product development, managing costs and delivering value to our customers and shareholders. We believe
that our businesses remain well-positioned to capitalize on new business opportunities and long-term trends driving growth within our end markets and to respond quickly to changes in economic
conditions in these markets.
While global economic conditions have been improving, the COVID-19 pandemic continues to have an impact globally. We have not seen a material impact to our operations to date, however, the
ultimate impact on our business will depend on the length and severity of the outbreak throughout the world. All of our information technology systems are running as designed and all sites are operating at
normal capacity while we continue to comply with all government and health agency recommendations and requirements, as well as protecting the safety of our employees and communities. We believe we
have sufficient inventory to continue to produce at current levels, however, government mandated shutdowns could impact our ability to acquire additional materials and disrupt our customers’ purchases.
At this time we cannot predict the expected overall financial impact of the COVID-19 pandemic on our business, but we are planning for various economic scenarios and continue to make efforts to protect
the safety of our employees and the health of our business.
Lithium: We expect results to be higher year-over-year during 2022 in Lithium, due mainly to increased volume from new capacity coming on line from La Negra, Chile, Train 1 in Kemerton,
Western Australia, and the expected acquisition of Tianyuan, which includes a lithium hydroxide conversion plant designed to produce up to 25,000 metric tons of LCE per year. We expect commercial
production from this lithium hydroxide conversion plant will begin in the first half of 2022. In addition, pricing is expected to increase reflecting tight market conditions and last year’s expiration of pricing
concessions on long-term contracts. EV sales are expected to continue to increase over the prior year as the lithium battery market remains strong.
We also announced agreements for strategic investments in China with plans to build two lithium hydroxide conversion plants, each initially targeting 50,000 metric tons per year. Subject to
additional studies and approvals, it is expected these plants would start construction during 2022 and complete construction by the end of 2024. In addition, our 60%-owned MARBL joint venture recently
announced its intention to resume spodumene concentrate production at the Wodgina spodumene mine, with the production restart expected during the second quarter of 2022. In February 2022, we
announced that we signed a non-binding letter agreement with our MARBL joint venture partner, MRL, to explore a potential expansion of the MARBL joint venture, in an effort to expand lithium
conversion capacity with increased optionality and reduced risk.
On a longer-term basis, we believe that demand for lithium will continue to grow as new lithium applications advance and the use of plug-in hybrid electric vehicles and full battery electric vehicles
increases. This demand for lithium is supported by a favorable backdrop of steadily declining lithium ion battery costs, increasing battery performance, continuing significant investments in the battery and
EV supply chain by cathode and battery producers, and automotive OEM’s, favorable global public policy toward e-mobility/renewable energy usage, and additional stimulus measures taken in Europe in
light of the COVID-19 pandemic that we expect to strengthen EV demand. Our outlook is also bolstered by long-term supply agreements with key strategic customers, reflecting our standing as a preferred
global lithium partner, highlighted by our scale, access to geographically diverse, low-cost resources and long-term track record of reliability of supply and operating execution.
Bromine: We expect both net sales and profitability to be modestly higher in 2022 due to strength in demand for flame retardants, as well as benefiting from diverse end markets. Volumes are
expected to up slightly compared to full year 2021 due to the successful execution of growth projects in 2021 assuming continued availability of raw materials like chlorine. Bromine’s ongoing cost savings
initiatives and higher pricing are expected to offset higher freight and raw material costs.
On a longer-term basis, we continue to believe that improving global standards of living, widespread digitization, increasing demand for data management capacity and the potential for increasingly
stringent fire safety regulations in developing markets are likely to drive continued demand for fire safety products. Our long-term drilling outlook is uncertain at this time and will follow a long-term
trajectory in line with oil prices. We are focused on profitably growing our globally competitive bromine and derivatives production network to serve all major bromine consuming products and markets.
The combination of our solid, long-term business fundamentals, strong cost position, product innovations and effective management of raw material costs will enable us to manage our business through
end-market challenges and to capitalize on opportunities that are expected with favorable market trends in select end markets.
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Albemarle Corporation and Subsidiaries
Catalysts: Total Catalysts results in 2022 are expected to increase year-over-year with overall refining markets and as travel lockdown conditions abate. 2021 results for both the refining catalyst and
performance catalyst solutions (“PCS”) businesses were negatively impacted by the U.S. Gulf Coast winter storm in the first half of the year. Volumes are expected to grow across each of the Catalysts
products. In addition, pricing is expected to increase to offset inflationary pressures in freight and input costs. In particular, we expect increased natural gas prices in Europe due to potential supply
restrictions. The fluidized catalytic cracking (“FCC”) market is expected to gradually recover from the COVID-19 pandemic in line with increased travel and depletion of global gasoline inventories,
however, demand may not return to normal levels until late 2022 or 2023 at the earliest. Hydroprocessing catalysts (“HPC”) demand tends to be lumpier than FCC demand and is also expected to continue
to be negatively impacted as refiners defer spending into 2022. In 2021, we initiated a strategic review of the Catalysts business to position for value creation.
On a longer-term basis, we believe increased global demand for transportation fuels, new refinery start-ups and ongoing adoption of cleaner fuels will be the primary drivers of growth in our
Catalysts business. We believe delivering superior end-use performance continues to be the most effective way to create sustainable value in the refinery catalysts industry. We also believe our technologies
continue to provide significant performance and financial benefits to refiners challenged to meet tighter regulations around the world, including those managing new contaminants present in North America
tight oil, and those in the Middle East and Asia seeking to use heavier feedstock while pushing for higher propylene yields. Longer-term, we believe that the global crude supply will get heavier and more
sour, a trend that bodes well for our catalysts portfolio. With superior technology and production capacities, and expected growth in end market demand, we believe that Catalysts remains well-positioned
for the future. In PCS, we expect growth on a longer-term basis in our organometallics business due to growing global demand for plastics driven by rising standards of living and infrastructure spending.
Corporate: We continue to focus on cash generation, working capital management and process efficiencies. We expect our global effective tax rate will vary based on the locales in which income is
actually earned and remains subject to potential volatility from changing legislation in the U.S. and other tax jurisdictions.
Actuarial gains and losses related to our defined benefit pension and OPEB plan obligations are reflected in Corporate as a component of non-operating pension and OPEB plan costs under mark-to-
market accounting. Results for the year ended December 31, 2021 include an actuarial gain of $56.9 million ($43.6 million after income taxes), as compared to a loss of $52.3 million ($40.9 million after
income taxes) for the year ended December 31, 2020.
We remain committed to evaluating the merits of any opportunities that may arise for acquisitions or other business development activities that will complement our business footprint. Additional
information regarding our products, markets and financial performance is provided at our website, www.albemarle.com. Our website is not a part of this document nor is it incorporated herein by reference.
Results of Operations
The following data and discussion provides an analysis of certain significant factors affecting our results of operations during the periods included in the accompanying consolidated statements of
income.
Discussion of our results of operations for the year ended December 31, 2020 compared to the year ended December 31, 2019 can be found in Part II, Item 7 of our Annual Report on Form 10-K for
the year ended December 31, 2020.
Comparison of 2021 to 2020
Selected Financial Data
Net Sales
In thousands
Net sales
2021
2020
$ Change
% Change
3,327,957
3,128,909
199,048
6 %
•
•
•
•
$177.1 million of higher sales volume from reportable segments, primarily in Lithium and Bromine, partially offset by Catalysts
$129.9 million of favorable pricing from reportable segments, driven by Bromine and Lithium, partially offset by Catalysts
$146.0 million decrease in net sales following the sale of the FCS business on June 1, 2021
$38.2 million of favorable currency translation resulting from the weaker U.S. Dollar against various currencies
50
Albemarle Corporation and Subsidiaries
Gross Profit
In thousands
Gross profit
Gross profit margin
2021
2020
$ Change
% Change
$
997,971
$
30.0 %
994,853
$
31.8 %
3,118
— %
• Higher sales volume and pricing in Lithium and Bromine, partially offset by Catalysts
• Decrease in net sales resulting from the disposal of the FCS business on June 1, 2021
•
•
Increased production and utility costs of approximately $22 million in Bromine and Catalysts resulting from the U.S. Gulf Coast winter storm
2021 included $8.7 million of out-of-period adjustment expense in Cost of goods sold to correct misstated inventory foreign exchange values relating to prior periods. See Note 1, “Basis of
Presentation,” for further details
Increased freight costs in Bromine and Catalysts
Favorable currency exchange impacts resulting from the weaker U.S. Dollar against various currencies
•
•
Selling, General and Administrative (“SG&A”) Expenses
2021
2020
$ Change
% Change
$
441,482
$
429,827
$
11,655
3 %
In thousands
Selling, general and administrative expenses
Percentage of Net sales
13.3 %
$20.0 million charitable contribution, using a portion of the proceeds received from the FCS divestiture, to the Albemarle Foundation, in addition to the normal annual contributions in 2021
13.7 %
•
• Higher compensation, including incentive-based, expenses across all businesses and Corporate
•
•
•
•
•
$11.5 million of legal fees related to a legacy Rockwood legal matter
$9.8 million of expenses in 2021 primarily related to non-routine labor and compensation related costs that are outside normal compensation arrangements
$4.0 million loss resulting from the sale of property, plant and equipment in 2021
Partially offset by productivity improvements and a reduction in professional fees and other administrative costs
$20.8 million decrease in restructuring and other expenses, and acquisition and integration related costs for various significant projects
Research and Development Expenses
In thousands
Research and development expenses
Percentage of Net sales
•
Lower research and development spending in each of our businesses
Gain on Sale of Business/Interest in Properties, Net
In thousands
Gain on sale of business/interest in properties, net
2021
2020
$ Change
% Change
$
54,026
$
1.6 %
59,214
$
1.9 %
(5,188)
(9)%
2021
2020
$ Change
% Change
$
(295,971)
$
—
$
(295,971)
• Gain of $428.4 million resulting from the sale of the FCS business on June 1, 2021
•
$132.4 million expense related to anticipated cost overruns for MRL’s 40% interest in lithium hydroxide conversion assets being built in Kemerton. See Note 2, “Acquisitions,” to our
consolidated financial statements included in Part II, Item 8 of this report for additional information.
Interest and Financing Expenses
In thousands
Interest and financing expenses
2021
2020
$ Change
% Change
$
(61,476)
$
(73,116)
$
11,640
(16)%
• Decreased debt balance as certain debt instruments were repaid in the first quarter of 2021
• Higher capitalized interest from continued capital expenditures in 2021
•
Partially offset by $29.0 million loss on early extinguishment of debt, representing the tender premiums, fees, unamortized discounts and unamortized deferred financing costs from the
redemption of debt during the first quarter of 2021
51
Albemarle Corporation and Subsidiaries
Other Expenses, Net
In thousands
Other expenses, net
2021
2020
$ Change
% Change
$
(603,340)
$
(59,177)
$
(544,163)
920 %
•
•
•
•
•
•
$657.4 million of additional expense recorded following an arbitration ruling related to a legal matter from a legacy Rockwood business sold to Huntsman prior to Albemarle’s acquisition of
Rockwood. See Note 17, “Commitments and Contingencies,” to our consolidated financial statements included in Part II, Item 8 of this report for further details
$29.8 million increase in indemnification expenses primarily to revise an indemnification estimate for an ongoing tax-related matter of a previously disposed business in Germany
$28.8 million increase in foreign exchange activity
$7.4 million of income in 2021 from accretion of discount in preferred equity of Grace subsidiary acquired as a portion of the proceeds of the FCS sale
$7.2 million gain related to the sale of our ownership percentage in the SOCC joint venture in 2020
$78.8 million of pension and OPEB credits (including mark-to-market actuarial gains of $56.9 million) in 2021 as compared to $40.7 million of pension and OPEB costs (including mark-to-
market actuarial losses of $52.3 million) in 2020
•
The mark-to-market actuarial gain in 2021 is primarily attributable to a higher return on pension plan assets in 2021 than was expected, as a result of overall market and investment portfolio
performance. The weighted-average actual return on our U.S. and foreign pension plan assets was 8.42% versus an expected return of 6.50%. In addition, there was an increase in the
weighted-average discount rate to 2.86% from 2.50% for our U.S. pension plans and to 1.44% from 0.86% for our foreign pension plans to reflect market conditions as of the December 31,
2021 measurement date.
The mark-to-market actuarial loss in 2020 is primarily attributable to a decrease in the weighted-average discount rate to 2.50% from 3.56% for our U.S. pension plans and to 0.86% from
1.33% for our foreign pension plans to reflect market conditions as of the December 31, 2020 measurement date. This was partially offset by a higher return on pension plan assets in 2019
than was expected, as a result of overall market and investment portfolio performance. The weighted-average actual return on our U.S. and foreign pension plan assets was 13.15% versus an
expected return of 6.52%.
•
Income Tax Expense
In thousands
Income Tax Expense
Effective income tax rate
2021
2020
$ Change
% Change
$
29,446
$
22.0 %
54,425
$
14.6 %
(24,979)
(46)%
•
•
•
•
•
2021 includes $148.9 million tax benefit resulting from an expense recorded following an arbitration ruling related to a legal matter from a legacy Rockwood business sold to Huntsman prior to
Albemarle’s acquisition of Rockwood. See Note 17, “Commitments and Contingencies,” to our consolidated financial statements included in Part II, Item 8 of this report for further details
$97.5 million one-time tax expense recorded for the gain on the sale of the FCS business in 2021
$27.9 million discrete tax benefit recorded in 2021 related to the indemnification estimate of an ongoing tax-related matter in Germany
Change in geographic mix of earnings
2021 includes a discrete tax expense due to an out-of-period adjustment for an overstated deferred tax liability recorded during the three-month period ended December 31, 2017
Equity in Net Income of Unconsolidated Investments
In thousands
Equity in net income of unconsolidated investments
2021
2020
$ Change
% Change
$
95,770
$
127,521
$
(31,751)
(25)%
•
•
Primarily lower earnings from our Lithium segment joint venture, Talison, primarily driven by unfavorable foreign exchange impacts, partially offset by higher volumes
Increased earnings from strong operating results and other income from our Catalysts segment joint ventures
Net Income Attributable to Noncontrolling Interests
In thousands
Net income attributable to noncontrolling interests
2021
2020
$ Change
% Change
$
(76,270)
$
(70,851)
$
(5,419)
8 %
▪
Increase in consolidated income related to our JBC joint venture from higher sales volume
52
Albemarle Corporation and Subsidiaries
Net Income Attributable to Albemarle Corporation
In thousands
Net income attributable to Albemarle Corporation
Percentage of Net Sales
Basic earnings per share
Diluted earnings per share
2021
2020
$ Change
% Change
$
123,672
$
3.7 %
375,764
$
(252,092)
1.07
1.06
$504.5 million, net of income taxes, of additional expense recorded following an arbitration ruling related to a legal matter from a legacy Rockwood business sold to Huntsman prior to
Albemarle’s acquisition of Rockwood
(2.46)
(2.46)
$
$
$
$
$
$
▪
Productivity improvements and a reduction in professional fees and other administrative costs
Loss of seven months of sales from FCS business following the disposition on June 1, 2021
$132.4 million expense related to anticipated cost overruns for MRL’s 40% interest in lithium hydroxide conversion assets being built in Kemerton
Increased sales volume and favorable pricing from Lithium and Bromine
▪ Gain on sale of FCS business of $330.8 million, net of tax
▪
▪
▪ Decreased recurring interest and financing expenses due to lower debt balances; 2021 included loss on early extinguishment of debt of $23.8 million, net of income taxes
▪
▪
▪ Mark-to-market actuarial gains of $45.6 million, net of income taxes, recorded in 2021 compared to mark-to-market actuarial losses of $40.9 million, net of income taxes, recorded in 2020
▪
▪
▪
▪
Increased production and utility costs in Bromine and Catalysts resulting from the winter storms in the southern U.S.
Increased SG&A expenses, primarily related to additional charitable contribution using proceeds from the sale of the FCS business
Lower equity in net income of unconsolidated investments from the Talison joint venture
Earnings per share also impacted by the underwritten public offering of our common stock in February 2021, increasing share count by 9.8 million shares
12.0 %
3.53
3.52
(67)%
(70)%
(70)%
Other Comprehensive (Loss) Income, Net of Tax
In thousands
Other comprehensive (loss) income, net of tax
Foreign currency translation
▪
•
2021
2020
$ Change
$
$
(66,478)
(74,385)
$
$
69,850
99,832
$
$
(136,328)
(174,217)
% Change
*
*
2021 included unfavorable movements in the Euro of approximately $62 million, the Japanese Yen of approximately $8 million, the Brazilian Real of approximately $5 million, the South
Korean Won of approximately $4 million and the net unfavorable variance in other currencies totaling approximately $5 million, partially offset by favorable movements in the Chinese
Renminbi of approximately $10 million
2020 included favorable movements in the Euro of approximately $84 million, the Chinese Renminbi of approximately $22 million, the Taiwanese Dollar of approximately $7 million, the
Japanese Yen of approximately $5 million and the Korean Won of approximately $4 million, partially offset by unfavorable movements in the Brazilian Real of approximately $19 million
and a net unfavorable variance in various other currencies totaling approximately $2 million
•
•
Cash flow hedge
• Net investment hedge
•
Percentage calculation is not meaningful
$
$
174
5,110
$
$
1,602
(34,185)
$
$
(1,428)
39,295
(89)%
(115)%
Segment Information Overview. We have identified three reportable segments according to the nature and economic characteristics of our products as well as the manner in which the information is
used internally by the Company’s chief operating decision maker to evaluate performance and make resource allocation decisions. Our reportable business segments consist of: (1) Lithium, (2) Bromine and
(3) Catalysts.
Summarized financial information concerning our reportable segments is shown in the following tables. The “All Other” category includes only the FCS business, the sale of which was completed on
June 1, 2021, that does not fit into any of our core businesses.
The Corporate category is not considered to be a segment and includes corporate-related items not allocated to the operating segments. Pension and OPEB service cost (which represents the benefits
earned by active employees during the period) and amortization of prior service cost or benefit are allocated to the reportable segments, All Other, and Corporate, whereas the remaining components of
pension and OPEB benefits cost or credit (“Non-operating pension and OPEB items”)
53
Albemarle Corporation and Subsidiaries
are included in Corporate. Segment data includes intersegment transfers of raw materials at cost and allocations for certain corporate costs.
Our chief operating decision maker uses adjusted EBITDA (as defined below) to assess the ongoing performance of the Company’s business segments and to allocate resources. We define adjusted
EBITDA as earnings before interest and financing expenses, income tax expense, depreciation and amortization, as adjusted on a consistent basis for certain non-operating, non-recurring or unusual items
in a balanced manner and on a segment basis. These non-operating, non-recurring or unusual items may include acquisition and integration related costs, gains or losses on sales of businesses, restructuring
charges, facility divestiture charges, certain litigation and arbitration costs and charges, non-operating pension and OPEB items and other significant non-recurring items. In addition, management uses
adjusted EBITDA for business planning purposes and as a significant component in the calculation of performance-based compensation for management and other employees. We reported adjusted
EBITDA because management believes it provides transparency to investors and enables period-to-period comparability of financial performance. Adjusted EBITDA is a financial measure that is not
required by, or presented in accordance with, the generally accepted accounting principles in the United States (“U.S. GAAP”). Adjusted EBITDA should not be considered as an alternative to Net (loss)
income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP, or any other financial measure reported in accordance
with U.S. GAAP.
Net sales:
Lithium
Bromine
Catalysts
All Other
Total net sales
Adjusted EBITDA:
Lithium
Bromine
Catalysts
All Other
Corporate
Total adjusted EBITDA
Year Ended December 31,
2021
%
2020
%
(In thousands, except percentages)
Percentage Change
2021 vs. 2020
$
$
$
$
1,363,284
1,128,343
761,235
75,095
3,327,957
479,538
360,682
106,941
29,858
(106,045)
870,974
41.0 % $
33.9 %
22.9 %
2.2 %
100.0 % $
55.1 % $
41.4 %
12.3 %
3.4 %
(12.2)%
100.0 % $
1,144,778
964,962
797,914
221,255
3,128,909
393,093
323,605
130,134
84,821
(112,915)
818,738
36.6 %
30.8 %
25.5 %
7.1 %
100.0 %
48.0 %
39.5 %
15.9 %
10.4 %
(13.8)%
100.0 %
19 %
17 %
(5)%
(66)%
6 %
22 %
11 %
(18)%
(65)%
(6)%
6 %
54
Albemarle Corporation and Subsidiaries
See below for a reconciliation of adjusted EBITDA, the non-GAAP financial measure, from Net income attributable to Albemarle Corporation, the most directly comparable financial measure
calculated and reported in accordance with U.S. GAAP, (in thousands):
Lithium
Bromine
Catalysts
Reportable
Segments Total
All Other
Corporate
Consolidated
Total
2021
Net income (loss) attributable to
Albemarle Corporation
Depreciation and amortization
Restructuring and other
Gain on sale of
(a)
business/interest in properties,
net
(b)
Acquisition and integration
related costs
(c)
Interest and financing expenses
Income tax expense
Non-operating pension and
OPEB items
Legacy Rockwood legal
(d)
matter
Albemarle Foundation
contribution
(e)
Indemnification adjustments
Other
(g)
(f)
Adjusted EBITDA
2020
Net income (loss) attributable to
Albemarle Corporation
Depreciation and amortization
Restructuring and other
Acquisition and integration
(a)
related costs
(c)
Interest and financing expenses
Income tax expense
Non-operating pension and
OPEB items
Other
(h)
Adjusted EBITDA
$
$
$
$
192,244
138,772
—
132,400
—
—
—
—
—
—
—
16,122
479,538
277,711
112,854
—
—
—
—
—
2,528
393,093
$
$
$
$
309,501
51,181
—
—
—
—
—
—
—
—
—
—
360,682
274,495
50,310
—
—
—
—
—
(1,200)
323,605
$
$
$
$
55,353
51,588
—
—
—
—
—
—
—
—
—
—
106,941
80,149
49,985
—
—
—
—
—
—
130,134
$
$
$
$
557,098
241,541
—
132,400
—
—
—
—
—
—
—
16,122
947,161
632,355
213,149
—
—
—
—
—
1,328
846,832
$
$
$
$
27,988
1,870
—
—
—
—
—
—
—
—
—
—
29,858
76,323
8,498
—
—
—
—
—
—
84,821
$
$
$
$
$
(461,414)
10,589
3,027
123,672
254,000
3,027
(428,371)
(295,971)
12,670
61,476
29,446
(78,814)
657,412
20,000
39,381
28,553
(106,045)
(332,914)
10,337
19,597
17,263
73,116
54,425
40,668
4,593
(112,915)
$
$
$
12,670
61,476
29,446
(78,814)
657,412
20,000
39,381
44,675
870,974
375,764
231,984
19,597
17,263
73,116
54,425
40,668
5,921
818,738
(a)
(b)
In 2021, we recorded facility closure related to offices in Germany, and severance expenses in Germany and Belgium, in SG&A. During the year ended December 31, 2020, we recorded severance expenses as part of
business reorganization plans, impacting each of our businesses and Corporate, primarily in the U.S., Belgium, Germany and with our Jordanian joint venture partner. We recorded expenses of $0.7 million in Cost of goods
sold, $19.2 million in SG&A and a $0.3 million gain in Net income attributable to noncontrolling interests for the portion of severance expense allocated to our Jordanian joint venture partner. The balance of unpaid
restructuring costs and severance is recorded in Accrued expenses and is expected to primarily be paid through 2022.
Includes a $428.4 million gain related to the FCS divestiture recorded during the year ended December 31, 2021. See Note 3, “Divestitures,” to our consolidated financial statements included in Part II, Item 8 of this report
for additional information on this gain. In addition, includes a $132.4 million expense related to anticipated cost overruns for MRL’s 40% interest in lithium hydroxide conversion assets being built in Kemerton. See Note 2,
“Acquisitions,” to our consolidated financial statements included in Part II, Item 8 of this report for additional information.
(c) See Note 2, “Acquisitions,” to our consolidated financial statements included in Part II, Item 8 of this report for additional information.
(d) Loss recorded in Other expenses, net for the year ended December 31, 2021 related to the settlement of an arbitration ruling for a legacy Rockwood legal matter. See Note 17, “Commitments and Contingencies,” to our
(e)
consolidated financial statements included in Part II, Item 8 of this report for further details.
Included in SG&A is a charitable contribution, using a portion of the proceeds received from the FCS divestiture, to the Albemarle Foundation, a non-profit organization that sponsors grants, health and social projects,
educational initiatives, disaster relief, matching gift programs, scholarships and other charitable initiatives in locations where our employees live and the Company operates. This contribution is in addition to the normal
annual contribution made to the Albemarle Foundation by the Company, and is significant in size and nature in that it is intended to provide more long-term benefits in these communities.
55
Albemarle Corporation and Subsidiaries
(f)
(g)
Included in Other expenses, net to revise an indemnification estimate for an ongoing tax-related matter of a previously disposed business in Germany. A corresponding discrete tax benefit of $27.9 million was recorded in
Income tax expense during the same period, netting to an expected cash obligation of approximately $11.5 million.
Included amounts for the year ended December 31, 2021 recorded in:
• Cost of goods sold - $10.5 million of expense related to a legal matter as part of a prior acquisition in our Lithium business.
• SG&A - $11.5 million of legal fees related to a legacy Rockwood legal matter noted above, $9.8 million of expenses primarily related to non-routine labor and compensation related costs that are outside normal
compensation arrangements, a $4.0 million loss resulting from the sale of property, plant and equipment and $3.8 million of charges for environmental reserves at a sites not part of our operations.
• Other expenses, net - $4.8 million of net expenses primarily related to asset retirement obligation charges to update of an estimate at a site formerly owned by Albemarle.
(h)
Included amounts for the year ended December 31, 2020 recorded in:
• Cost of goods sold - $1.3 million of expense related to a legal matter as part of a prior acquisition in our Lithium business.
• SG&A - $3.1 million of shortfall contributions for our multiemployer plan financial improvement plan and $3.8 million of a net expense primarily relating to the increase of environmental reserves at non-operating
businesses we have previously divested.
• Other expenses, net - $7.2 million gain related to the sale of our ownership percentage in the SOCC joint venture, $3.6 million of a net gain primarily relating to the sale of intangible assets in our Bromine business
and property in Germany not used as part of our operations and a $2.5 million net gain resulting from the settlement of legal matters related to a business sold or a site in the process of being sold, partially offset by
$9.6 million of losses resulting from the adjustment of indemnifications related to previously disposed businesses and $1.2 million of expenses related to other costs outside of our regular operations.
Lithium
2021
2020
$ Change
% Change
$
1,363,284
$
1,144,778
$
218,506
In thousands
Net sales
▪
▪
▪
In thousands
Net sales
•
•
•
$174.8 million of higher sales volume, driven by strength in both carbonate and hydroxide
$22.1 million of favorable pricing impacts, primarily in battery- and tech-grade carbonate and hydroxide due to higher pricing under certain contracts and mix
$21.6 million of favorable currency translation resulting from the weaker U.S. Dollar against various currencies
Adjusted EBITDA
$
479,538
$
393,093
$
86,445
• Higher sales volume and favorable pricing impacts
•
•
•
•
•
Increased SG&A expenses from higher compensation, professional fees and other administrative costs
Productivity improvements, offsetting the impact of inflation
Lower equity in net income of unconsolidated investments from the Talison joint venture
$4.4 million out-of-period adjustment expense recorded in Cost of goods sold to correct misstated inventory foreign exchange values relating to prior year periods
$4.1 million of unfavorable currency translation resulting from a stronger Chilean Peso
Bromine
$
$108.7 million of favorable pricing impacts, primarily in the flame retardants division and as a result of a favorable 2021 customer mix
$45.1 million of higher sales volume related to increased demand across all products
$9.6 million of favorable currency translation resulting from the weaker U.S. Dollar against various currencies
1,128,343
964,962
$
$
163,381
Adjusted EBITDA
$
360,682
$
323,605
$
37,077
• Higher sales volume and favorable pricing impacts as a result of a favorable 2021 customer mix
Productivity improvements and a reduction in professional fees and other administrative costs
•
Increased raw material prices, primarily due to shortage of available chlorine
•
Increased production and utility costs of approximately $6 million resulting from the U.S. Gulf Coast winter storm
•
Increased freight costs
•
$8.7 million of favorable currency translation resulting from the weaker U.S. Dollar against various currencies
•
56
2021
2020
$ Change
% Change
19 %
22 %
17 %
11 %
Albemarle Corporation and Subsidiaries
Catalysts
In thousands
Net sales
•
•
•
All Other
In thousands
Net sales
▪
(5)%
(18)%
(66)%
(65)%
2021
2020
$ Change
% Change
$
761,235
$
797,914
$
(36,679)
$42.7 million of lower sales volume, primarily from lower demand in clean fuel technologies
$0.9 million of unfavorable pricing impacts, primarily in FCC, partially offset by PCS
$6.9 million of favorable currency translation resulting from the weaker U.S. Dollar against various currencies
Adjusted EBITDA
$
Lower sales volume, primarily from lower demand in clean fuel technologies, as well as unfavorable pricing impacts, primarily in FCC
Increased production and utility costs of approximately $16 million resulting from the U.S. Gulf Coast winter storm
$3.1 million out-of-period adjustment expense recorded in Cost of goods sold to correct misstated inventory foreign exchange values relating to prior year periods
Increased raw material and freight costs
Partially offset by productivity improvements and a reduction in professional fees and other administrative costs
$19 million of government grants from the Netherlands in response to losses during the COVID-19 pandemic
106,941
130,134
(23,193)
$
$
•
•
•
•
•
•
Primarily decreased volume resulting from the sale of the FCS business in the second quarter of 2021
Adjusted EBITDA
$
29,858
▪
Primarily decreased volume resulting from the sale of the FCS business in the second quarter of 2021
$
75,095
$
$
221,255
84,821
$
$
(146,160)
(54,963)
2021
2020
$ Change
% Change
Corporate
In thousands
Adjusted EBITDA
2021
2020
$ Change
% Change
$
(106,045)
$
(112,915)
$
6,870
(6)%
▪
▪
▪
$5.3 million of favorable currency exchange impacts, including a $23.5 million decrease in foreign currency impacts from our Talison joint venture
Productivity improvements and a reduction in professional fees and other administrative costs
Increase in incentive compensation costs
Summary of Critical Accounting Policies and Estimates
Estimates, Assumptions and Reclassifications
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Listed below are the estimates and assumptions that we consider to be critical in the preparation of our
financial statements.
Property, Plant and Equipment. We assign the useful lives of our property, plant and equipment based upon our internal engineering estimates which are reviewed periodically. The estimated useful
lives of our property, plant and equipment range from two to sixty years and depreciation is recorded on the straight-line method, with the exception of our mineral rights and reserves, which are depleted
on a units-of-production method. We evaluate the recovery of our property, plant and equipment by comparing the net carrying value of the asset group to the undiscounted net cash flows expected to be
generated from the use and eventual disposition of that asset group when events or changes in circumstances indicate that its carrying amount may not be recoverable. If the carrying amount of the asset
group is not recoverable, the fair value of the asset group is measured and if the carrying amount exceeds the fair value, an impairment loss is recognized.
Acquisition Method of Accounting. We recognize the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree at their estimated fair values on the date of
acquisition for acquired businesses. Determining the fair value of these items requires management’s judgment and the utilization of independent valuation specialists and involves the use of significant
estimates and assumptions with respect to the timing and amounts of future cash flows and discount rates, among other items. When acquiring mineral reserves, the fair value is estimated using an excess
earnings approach, which requires management to estimate future cash flows, net of capital investments in the specific operation. Management’s cash flow projections involved the use of significant
estimates and assumptions with respect to the
57
Albemarle Corporation and Subsidiaries
expected production of the mine over the estimated time period, sales prices, shipment volumes, and expected profit margins. The present value of the projected net cash flows represents the preliminary
fair value assigned to mineral reserves. The discount rate is a significant assumption used in the valuation model. The judgments made in the determination of the estimated fair value assigned to the assets
acquired, the liabilities assumed and any noncontrolling interest in the investee, as well as the estimated useful life of each asset and the duration of each liability, can materially impact the financial
statements in periods after acquisition, such as through depreciation and amortization expense. For more information on our acquisitions and application of the acquisition method, see Note 2,
“Acquisitions,” to our consolidated financial statements included in Part II, Item 8 of this report.
Income Taxes. We assume the deductibility of certain costs in our income tax filings, and we estimate the future recovery of deferred tax assets, uncertain tax positions and indefinite investment
assertions.
Environmental Remediation Liabilities. We estimate and accrue the costs required to remediate a specific site depending on site-specific facts and circumstances. Cost estimates to remediate each
specific site are developed by assessing (i) the scope of our contribution to the environmental matter, (ii) the scope of the anticipated remediation and monitoring plan and (iii) the extent of other parties’
share of responsibility.
Actual results could differ materially from the estimates and assumptions that we use in the preparation of our financial statements.
Revenue Recognition
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services, and is recognized when performance obligations are satisfied under
the terms of contracts with our customers. A performance obligation is deemed to be satisfied when control of the product or service is transferred to our customer. The transaction price of a contract, or the
amount we expect to receive upon satisfaction of all performance obligations, is determined by reference to the contract’s terms and includes adjustments, if applicable, for any variable consideration, such
as customer rebates, noncash consideration or consideration payable to the customer, although these adjustments are generally not material. Where a contract contains more than one distinct performance
obligation, the transaction price is allocated to each performance obligation based on the standalone selling price of each performance obligation, although these situations do not occur frequently and are
generally not built into our contracts. Any unsatisfied performance obligations are not material. Standalone selling prices are based on prices we charge to our customers, which in some cases is based on
established market prices. Sales and other similar taxes collected from customers on behalf of third parties are excluded from revenue. Our payment terms are generally between 30 to 90 days, however,
they vary by market factors, such as customer size, creditworthiness, geography and competitive environment.
All of our revenue is derived from contracts with customers, and almost all of our contracts with customers contain one performance obligation for the transfer of goods where such performance
obligation is satisfied at a point in time. Control of a product is deemed to be transferred to the customer upon shipment or delivery. Significant portions of our sales are sold free on board shipping point or
on an equivalent basis, while delivery terms of other transactions are based upon specific contractual arrangements. Our standard terms of delivery are generally included in our contracts of sale, order
confirmation documents and invoices, while the timing between shipment and delivery generally ranges between 1 and 45 days. Costs for shipping and handling activities, whether performed before or after
the customer obtains control of the goods, are accounted for as fulfillment costs.
The Company currently utilizes the following practical expedients, as permitted by Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers:
• All sales and other pass-through taxes are excluded from contract value;
•
In utilizing the modified retrospective transition method, no adjustment was necessary for contracts that did not cross over the reporting year;
• We will not consider the possibility of a contract having a significant financing component (which would effectively attribute a portion of the sales price to interest income) unless, if at contract
inception, the expected payment terms (from time of delivery or other relevant criterion) are more than one year;
•
If our right to customer payment is directly related to the value of our completed performance, we recognize revenue consistent with the invoicing right; and
• We expense as incurred all costs of obtaining a contract incremental to any costs/compensation attributable to individual product sales/shipments for contracts where the amortization period for
such costs would otherwise be one year or less.
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Albemarle Corporation and Subsidiaries
Certain products we produce are made to our customer’s specifications where such products have no alternative use or would need significant rework costs in order to be sold to another customer. In
management’s judgment, control of these arrangements is transferred to the customer at a point in time (upon shipment or delivery) and not over the time they are produced. Therefore revenue is recognized
upon shipment or delivery of these products.
Costs incurred to obtain contracts with customers are not significant and are expensed immediately as the amortization period would be one year or less. When the Company incurs pre-production or
other fulfillment costs in connection with an existing or specific anticipated contract and such costs are recoverable through margin or explicitly reimbursable, such costs are capitalized and amortized to
Cost of goods sold on a systematic basis that is consistent with the pattern of transfer to the customer of the goods or services to which the asset relates, which is less than one year. We record bad debt
expense in specific situations when we determine the customer is unable to meet its financial obligation.
Goodwill and Other Intangible Assets
We account for goodwill and other intangibles acquired in a business combination in conformity with current accounting guidance which requires goodwill and indefinite-lived intangible assets to not
be amortized.
We test goodwill for impairment by comparing the estimated fair value of our reporting units to the related carrying value. Our reporting units are either our operating business segments or one level
below our operating business segments for which discrete financial information is available and for which operating results are regularly reviewed by the business management. In applying the goodwill
impairment test, we initially perform a qualitative test (“Step 0”), where we first assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting units is less than
its carrying value. Qualitative factors may include, but are not limited to, economic conditions, industry and market considerations, cost factors, overall financial performance of the reporting units and
other entity and reporting unit specific events. If after assessing these qualitative factors, we determine it is “more-likely-than-not” that the fair value of the reporting unit is less than the carrying value, we
perform a quantitative test (“Step 1”). During Step 1, we estimate the fair value based on present value techniques involving future cash flows. Future cash flows for all reporting units include assumptions
about revenue growth rates, adjusted EBITDA margins, discount rate as well as other economic or industry-related factors. For the Refining Solutions reporting unit, the revenue growth rates and adjusted
EBITDA margins were deemed to be significant assumptions. Significant management judgment is involved in estimating these variables and they include inherent uncertainties since they are forecasting
future events. We perform a sensitivity analysis by using a range of inputs to confirm the reasonableness of these estimates being used in the goodwill impairment analysis. We use a Weighted Average Cost
of Capital (“WACC”) approach to determine our discount rate for goodwill recoverability testing. Our WACC calculation incorporates industry-weighted average returns on debt and equity from a market
perspective. The factors in this calculation are largely external to Albemarle and, therefore, are beyond our control. We test our recorded goodwill for impairment in the fourth quarter of each year or upon
the occurrence of events or changes in circumstances that would more likely than not reduce the fair value of our reporting units below their carrying amounts. We performed our annual goodwill
impairment test as of October 31, 2021 and no evidence of impairment was noted from the analysis. As a result, we concluded there was no impairment as of that date.
We assess our indefinite-lived intangible assets, which include trade names and trademarks, for impairment annually and between annual tests if events or changes in circumstances indicate that it is
more likely than not that the asset is impaired. The indefinite-lived intangible asset impairment standard allows us to first assess qualitative factors to determine if a quantitative impairment test is necessary.
Further testing is only required if we determine, based on the qualitative assessment, that it is more likely than not that the indefinite-lived intangible asset’s fair value is less than its carrying amount. If we
determine based on the qualitative assessment that it is more likely than not that the asset is impaired, an impairment test is performed by comparing the fair value of the indefinite-lived intangible asset to
its carrying amount. During the year ended December 31, 2021, no evidence of impairment was noted from the analysis for our indefinite-lived intangible assets.
Definite-lived intangible assets, such as purchased technology, patents and customer lists, are amortized over their estimated useful lives generally for periods ranging from five to twenty-five years.
Except for customer lists and relationships associated with the majority of our Lithium business, which are amortized using the pattern of economic benefit method, definite-lived intangible assets are
amortized using the straight-line method. We evaluate the recovery of our definite-lived intangible assets by comparing the net carrying value of the asset group to the undiscounted net cash flows expected
to be generated from the use and eventual disposition of that asset group when events or changes in circumstances indicate that its carrying amount may not be recoverable. If the carrying amount of the
asset group is not recoverable, the fair value of the asset group is measured and if the carrying amount exceeds the fair value, an impairment loss is recognized. See Note 12, “Goodwill and Other
Intangibles,” to our consolidated financial statements included in Part II, Item 8 of this report.
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Albemarle Corporation and Subsidiaries
Resource Development Expenses
We incur costs in resource exploration, evaluation and development during the different phases of our resource development projects. Exploration costs incurred before the declaration of proven and
probable resources are generally expensed as incurred. After proven and probable resources are declared, exploration, evaluation and development costs necessary to bring the property to commercial
capacity or increase the capacity or useful life are capitalized. Any costs to maintain the production capacity in a property under production are expensed as incurred.
Capitalized resource costs are depleted using the units-of-production method. Our resource development assets are evaluated for impairment when events or changes in circumstances indicate that the
carrying amount may not be recoverable.
Pension Plans and Other Postretirement Benefits
Under authoritative accounting standards, assumptions are made regarding the valuation of benefit obligations and the performance of plan assets. As required, we recognize a balance sheet asset or
liability for each of our pension and OPEB plans equal to the plan’s funded status as of the measurement date. The primary assumptions are as follows:
• Discount Rate—The discount rate is used in calculating the present value of benefits, which is based on projections of benefit payments to be made in the future.
•
•
Expected Return on Plan Assets—We project the future return on plan assets based on prior performance and future expectations for the types of investments held by the plans as well as the
expected long-term allocation of plan assets for these investments. These projected returns reduce the net benefit costs recorded currently.
Rate of Compensation Increase—For salary-related plans, we project employees’ annual pay increases, which are used to project employees’ pension benefits at retirement.
• Mortality Assumptions—Assumptions about life expectancy of plan participants are used in the measurement of related plan obligations.
Actuarial gains and losses are recognized annually in our consolidated statements of income in the fourth quarter and whenever a plan is determined to qualify for a remeasurement during a fiscal
year. The remaining components of pension and OPEB plan expense, primarily service cost, interest cost and expected return on assets, are recorded on a monthly basis. The market-related value of assets
equals the actual market value as of the date of measurement.
During 2021, we made changes to assumptions related to discount rates and expected rates of return on plan assets. We consider available information that we deem relevant when selecting each of
these assumptions.
Our U.S. defined benefit plans for non-represented employees are closed to new participants, with no additional benefits accruing under these plans as participants’ accrued benefits have been frozen.
In selecting the discount rates for the U.S. plans, we consider expected benefit payments on a plan-by-plan basis. As a result, the Company uses different discount rates for each plan depending on the
demographics of participants and the expected timing of benefit payments. For 2021, the discount rates were calculated using the results from a bond matching technique developed by Milliman, which
matched the future estimated annual benefit payments of each respective plan against a portfolio of bonds of high quality to determine the discount rate. We believe our selected discount rates are
determined using preferred methodology under authoritative accounting guidance and accurately reflect market conditions as of the December 31, 2021 measurement date.
In selecting the discount rates for the foreign plans, we look at long-term yields on AA-rated corporate bonds when available. Our actuaries have developed yield curves based on the yields of
constituent bonds in the various indices as well as on other market indicators such as swap rates, particularly at the longer durations. For the Eurozone, we apply the Aon Hewitt yield curve to projected
cash flows from the relevant plans to derive the discount rate. For the U.K., the discount rate is determined by applying the Aon Hewitt yield curve for typical schemes of similar duration to projected cash
flows of Albemarle’s U.K. plan. In other countries where there is not a sufficiently deep market of high-quality corporate bonds, we set the discount rate by referencing the yield on government bonds of an
appropriate duration.
At December 31, 2021, the weighted-average discount rate for the U.S. and foreign pension plans decreased to 2.86% and 1.44%, respectively, from 2.50% and 0.86%, respectively, at December 31,
2020 to reflect market conditions as of the December 31, 2021 measurement date. The discount rate for the OPEB plans at December 31, 2021 and 2020 was 2.85% and 2.49%, respectively.
In estimating the expected return on plan assets, we consider past performance and future expectations for the types of investments held by the plan as well as the expected long-term allocations of
plan assets to these investments. For the years 2021 and 2020, the weighted-average expected rate of return on U.S. pension plan assets was 6.88%, and the weighted-average
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Albemarle Corporation and Subsidiaries
expected rate of return on foreign pension plan assets was 3.98% and 4.07%, respectively. Effective January 1, 2022, the weighted-average expected rate of return on U.S. and foreign pension plan assets is
6.89% and 3.85%, respectively.
In projecting the rate of compensation increase, we consider past experience in light of movements in inflation rates. At December 31, 2021 and 2020, the assumed weighted-average rate of
compensation increase was 3.20% and 3.82%, respectively, for our foreign pension plans.
For the purpose of measuring our U.S. pension and OPEB obligations at December 31, 2021 and 2020, we used the Pri-2012 Mortality Tables along with the MP-2021 and MP-2020 Mortality Improvement
Scale, respectively, published by the SOA.
At December 31, 2021, the assumed rate of increase in the pre-65 and post-65 per capita cost of covered health care benefits for U.S. retirees was zero as the employer-paid premium caps (pre-65 and
post-65) were met starting January 1, 2013.
A variance in the assumptions discussed above would have an impact on the projected benefit obligations, the accrued OPEB liabilities, and the annual net periodic pension and OPEB cost. The
following table reflects the sensitivities associated with a hypothetical change in certain assumptions, primarily in the U.S. (in thousands):
Actuarial Assumptions
Discount Rate:
Pension
Other postretirement benefits
Expected return on plan assets:
Pension
Other postretirement benefits
* Not applicable.
1% Increase
1% Decrease
(Favorable) Unfavorable
Increase (Decrease)
in Benefit Obligation
Increase (Decrease)
in Benefit Cost
Increase (Decrease)
in Benefit Obligation
Increase (Decrease)
in Benefit Cost
$
$
(104,285)
(4,520)
*
*
$
$
$
$
$
$
4,919
276
(6,796)
—
120,116
5,414
*
*
$
$
$
$
(6,
(3
6,
Of the $700.2 million total pension and postretirement assets at December 31, 2021, $96.3 million, or approximately 14%, are measured using the net asset value as a practical expedient. Gains or
losses attributable to these assets are recognized in the consolidated balance sheets as either an increase or decrease in plan assets. See Note 15, “Pension Plans and Other Postretirement Benefits,” to our
consolidated financial statements included in Part II, Item 8 of this report.
Income Taxes
We use the liability method for determining our income taxes, under which current and deferred tax liabilities and assets are recorded in accordance with enacted tax laws and rates. Under this
method, the amounts of deferred tax liabilities and assets at the end of each period are determined using the tax rate expected to be in effect when taxes are actually paid or recovered. Future tax benefits are
recognized to the extent that realization of such benefits is more likely than not. In order to record deferred tax assets and liabilities, we are following guidance under ASU 2015-17, which requires deferred
tax assets and liabilities to be classified as noncurrent on the balance sheet, along with any related valuation allowance. Tax effects are released from Accumulated Other Comprehensive Income using
either the specific identification approach or the portfolio approach based on the nature of the underlying item.
Deferred income taxes are provided for the estimated income tax effect of temporary differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities.
Deferred tax assets are also provided for operating losses, capital losses and certain tax credit carryovers. A valuation allowance, reducing deferred tax assets, is established when it is more likely than not
that some portion or all of the deferred tax assets will not be realized. The realization of such deferred tax assets is dependent upon the generation of sufficient future taxable income of the appropriate
character. Although realization is not assured, we do not establish a valuation allowance when we believe it is more likely than not that a net deferred tax asset will be realized.
We only recognize a tax benefit after concluding that it is more likely than not that the benefit will be sustained upon audit by the respective taxing authority based solely on the technical merits of the
associated tax position. Once the recognition threshold is met, we recognize a tax benefit measured as the largest amount of the tax benefit that, in our judgment, is greater
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Albemarle Corporation and Subsidiaries
than 50% likely to be realized. Interest and penalties related to income tax liabilities are included in Income tax expense on the consolidated statements of income.
We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Due to the statute of limitations, we are no longer subject to U.S. federal income tax audits by the Internal Revenue
Service (“IRS”) for years prior to 2017. Due to the statute of limitations, we also are no longer subject to U.S. state income tax audits prior to 2017.
With respect to jurisdictions outside the U.S., several audits are in process. We have audits ongoing for the years 2011 through 2020 related to Germany, Italy, Belgium, South Africa and Chile, some
of which are for entities that have since been divested.
While we believe we have adequately provided for all tax positions, amounts asserted by taxing authorities could be greater than our accrued position. Accordingly, additional provisions on federal
and foreign tax-related matters could be recorded in the future as revised estimates are made or the underlying matters are settled or otherwise resolved.
Since the timing of resolutions and/or closure of tax audits are uncertain, it is difficult to predict with certainty the range of reasonably possible significant increases or decreases in the liability related
to uncertain tax positions that may occur within the next twelve months. Our current view is that it is reasonably possible that we could record a decrease in the liability related to uncertain tax positions,
relating to a number of issues, up to approximately $0.3 million as a result of closure of tax statutes. As a result of the sale of the Chemetall Surface Treatment business in 2016, we agreed to indemnify
certain income and non-income tax liabilities, including uncertain tax positions, associated with the entities sold. The associated liability is recorded in Other noncurrent liabilities. See Note 16, “Other
Noncurrent Liabilities,” and Note 21, “Income Taxes,” to our consolidated financial statements included in Part II, Item 8 of this report for further details.
We have designated the undistributed earnings of a portion of our foreign operations as indefinitely reinvested and as a result we do not provide for deferred income taxes on the unremitted earnings
of these subsidiaries. Our foreign earnings are computed under U.S. federal tax earnings and profits (“E&P”) principles. In general, to the extent our financial reporting book basis over tax basis of a foreign
subsidiary exceeds these E&P amounts, deferred taxes have not been provided, as they are essentially permanent in duration. The determination of the amount of such unrecognized deferred tax liability is
not practicable. We provide for deferred income taxes on our undistributed earnings of foreign operations that are not deemed to be indefinitely invested. We will continue to evaluate our permanent
investment assertion taking into consideration all relevant and current tax laws.
Financial Condition and Liquidity
Overview
The principal uses of cash in our business generally have been capital investments and resource development costs, funding working capital, and service of debt. We also make contributions to our
defined benefit pension plans, pay dividends to our shareholders and repurchase shares of our common stock. Historically, cash to fund the needs of our business has been principally provided by cash from
operations, debt financing and equity issuances.
We are continually focused on working capital efficiency particularly in the areas of accounts receivable, payables and inventory. We anticipate that cash on hand, cash provided by operating
activities, proceeds from divestitures and borrowings will be sufficient to pay our operating expenses, satisfy debt service obligations, fund capital expenditures and other investing activities, fund pension
contributions and pay dividends for the foreseeable future.
Cash Flow
Our cash and cash equivalents were $439.3 million at December 31, 2021 as compared to $746.7 million at December 31, 2020. Cash provided by operating activities was $344.3 million, $798.9
million and $719.4 million during the years ended December 31, 2021, 2020 and 2019, respectively.
The decrease in cash provided by operating activities in 2021 versus 2020 was primarily due to the $332.5 million payment to Huntsman to settle a legacy Rockwood legal matter, lower earnings
from the FCS business sold on June 1, 2021, as well as increased inventory balances and accounts receivable due to the timing of payments. This was partially offset by increased sales in our Lithium and
Bromine segments. The increase in cash provided by operating activities in 2020 versus 2019 was primarily due to lower working capital outflow, including inventory reductions and the timing of
receivable collections, as well as the previously announced Company-wide cost savings initiative and increased dividends from unconsolidated investments, which more than offset lower revenues in each
of our reportable segments. The working capital
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Albemarle Corporation and Subsidiaries
outflow in 2020 also included the payment of $61.5 million related to stamp duties in Australia levied on the assets purchased as part of the acquisition of the Wodgina Project completed in 2019.
During 2021, cash on hand, cash provided by operations, net cash proceeds of $289.8 million from the sale of the FCS business, $388.5 million of commercial paper borrowings and the $1.5 billion
net proceeds from our underwritten public offering of common stock funded debt principal payments of approximately $1.5 billion, early extinguishment of debt fees of (24,877), $332.5 million of the legal
settlement related to the legacy Rockwood business arbitration, $953.7 million of capital expenditures for plant, machinery and equipment, dividends to shareholders of $177.9 million, and pension and
postretirement contributions of $30.3 million. During 2020, cash on hand, cash provided by operations and proceeds from borrowings of $200 million from one of our credit facilities funded $850.0 million
of capital expenditures for plant, machinery and equipment, dividends to shareholders of $161.8 million, and pension and postretirement contributions of $16.4 million. In addition, during 2020 we received
$11.0 million in proceeds from the sale of our ownership interest in the SOCC joint venture during and paid $22.6 million of agreed upon purchase price adjustments for the Wodgina Project acquisition.
During 2019, cash on hand, cash provided by operations and proceeds from borrowings of $1.60 billion funded the Wodgina Project acquisition discussed below, $851.8 million of capital expenditures for
plant, machinery and equipment, dividends to shareholders of $152.2 million, the repayment of $175.2 million of senior notes, and pension and postretirement contributions of $16.5 million. In addition,
during the years ended December 31, 2021, 2020 and 2019, our consolidated joint venture, JBC, paid dividends of approximately $247.8 million, $63.7 million and $224.9 million, respectively, which
resulted in dividends to noncontrolling interests of $96.1 million, $32.1 million and $83.2 million, respectively.
On June 1, 2021, we completed the sale of the FCS business to Grace for proceeds of approximately $570 million, consisting of $300 million in cash and the issuance to Albemarle of preferred equity
of a Grace subsidiary having an aggregate stated value of $270 million. The preferred equity can be redeemed at Grace’s option under certain conditions and will accrue payment-in-kind dividends at an
annual rate of 12% beginning on June 1, 2023, two years after issuance.
On February 8, 2021, we completed an underwritten public offering of 8,496,773 shares of our common stock at a price to the public of $153.00 per share. We also granted to the underwriters an
option to purchase up to an additional 1,274,509 shares, which was exercised. The total gross proceeds from this offering were approximately $1.5 billion, before deducting expenses, underwriting
discounts and commissions. In the first quarter of 2021, we made the following debt principal payments using the net proceeds from this underwritten public offering:
• €123.8 million of the 1.125% notes due in November 2025
• €393.0 million, the remaining balance, of the 1.875% Senior notes originally due in December 2021
• $128.4 million of the 3.45% Senior notes due in November 2029
• $200.0 million, the remaining balance, of the floating rate notes originally due in November 2022
• €183.3 million, the outstanding balance, of the unsecured credit facility originally entered into on August 14, 2019, as amended and restated on December 15, 2020 (the “2019 Credit Facility”)
• $325.0 million, the outstanding balance, of the commercial paper notes
On October 31, 2019, we completed the acquisition of a 60% interest in the Wodgina Project for a total purchase price of $1.3 billion. The purchase price is comprised of $820 million in cash and the
transfer of 40% interest in certain lithium hydroxide conversion assets being built by Albemarle in Kemerton, Western Australia, valued at approximately $480 million. In addition, during the year ended
December 31, 2020, we paid $22.6 million of agreed upon purchase price adjustments. The cash consideration was funded by the unsecured credit facility entered into on August 14, 2019.
In November 2019, we issued notes totaling $500.0 million and €1.0 billion. The net proceeds from the issuance of these notes were used to repay the $1.0 billion balance of the unsecured credit
facility entered into on August 14, 2019, a large portion of approximately $370 million of commercial paper notes, the remaining balance of $175.2 million of the senior notes issued on December 10, 2010
(“2010 Senior Notes”), and for general corporate purposes. During the year ended December 31, 2019, we recorded a loss on early extinguishment of debt of $4.8 million in Interest and financing expenses,
representing the tender premiums, fees, unamortized discounts and unamortized deferred financing costs from the redemption of the 2010 Senior Notes.
Capital expenditures were $953.7 million, $850.5 million and $851.8 million for the years ended December 31, 2021, 2020 and 2019, respectively, and were incurred mainly for plant, machinery and
equipment, and mining resource development.
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Albemarle Corporation and Subsidiaries
We expect our capital expenditures to be between $1.3 billion and $1.5 billion in 2022 primarily for Lithium growth and capacity increases, primarily in Australia, China and Silver Peak, Nevada, as well as
productivity and continuity of operations projects in all segments. Train I of our Kemerton, Western Australia plant was completed in December 2021, but due to the ongoing labor shortages and COVID-19
pandemic travel restrictions in Western Australia, Train II construction is now expected to be completed in the second half of 2022. Commercial sales volume from Train I will begin in 2022 and Train II in
2023.
During the years ended December 31, 2021, 2020 and 2019, we incurred $12.7 million, $17.3 million and $20.7 million of costs related to the acquisition, integration and potential divestitures for
various significant projects, including the acquisition of the Wodgina Project in 2019, which primarily consisted of professional services and advisory fees.
The Company is permitted to repurchase up to a maximum of 15,000,000 shares under a share repurchase program authorized by our Board of Directors. There were no shares of our common stock
repurchased during 2021, 2020 or 2019. At December 31, 2021, there were 7,396,263 remaining shares available for repurchase under the Company’s authorized share repurchase program.
Net current assets decreased to approximately $133.6 million at December 31, 2021 from $404.3 million at December 31, 2020. The decrease is primarily due to a decrease in cash and cash
equivalents to pay a portion of the legacy Rockwood legal matter and for capital expenditures, as well as the increase in accrued expenses for the remaining payment of the legacy Rockwood legal matter.
This was partially offset by the repayment of the current portion of long-term debt using proceeds from our underwritten public offering of our common stock. Additional changes in the components of net
current assets are primarily due to the timing of the sale of goods and other ordinary transactions leading up to the balance sheet dates and are not the result of any policy changes by the Company, and do
not reflect any change in either the quality of our net current assets or our expectation of success in converting net working capital to cash in the ordinary course of business.
At December 31, 2021 and 2020, our cash and cash equivalents included $374.0 million and $492.8 million, respectively, held by our foreign subsidiaries. The majority of these foreign cash balances
are associated with earnings that we have asserted are indefinitely reinvested and which we plan to use to support our continued growth plans outside the U.S. through funding of capital expenditures,
acquisitions, research, operating expenses or other similar cash needs of our foreign operations. From time to time, we repatriate cash associated with earnings from our foreign subsidiaries to the U.S. for
normal operating needs through intercompany dividends, but only from subsidiaries whose earnings we have not asserted to be indefinitely reinvested or whose earnings qualify as “previously taxed
income” as defined by the Internal Revenue Code. For the years ended December 31, 2021, 2020 and 2019, we repatriated approximately $0.9 million, $1.8 million and $351.9 million of cash, respectively,
as part of these foreign earnings cash repatriation activities.
While we continue to closely monitor our cash generation, working capital management and capital spending in light of continuing uncertainties in the global economy, we believe that we will
continue to have the financial flexibility and capability to opportunistically fund future growth initiatives. Additionally, we anticipate that future capital spending, including business acquisitions, share
repurchases and other cash outlays, should be financed primarily with cash flow provided by operations and cash on hand, with additional cash needed, if any, provided by borrowings. The amount and
timing of any additional borrowings will depend on our specific cash requirements.
Long-Term Debt
We currently have the following notes outstanding:
Issue Month/Year
November 2019
November 2019
(a)
November 2019
November 2014
November 2014
(a)
(a)
Principal (in millions)
€371.7
€500.0
$171.6
$425.0
$350.0
Interest Rate
1.125%
1.625%
3.45%
4.15%
5.45%
Interest Payment Dates
November 25
November 25
May 15 and November 15
June 1 and December 1
June 1 and December 1
Maturity Date
November 25, 2025
November 25, 2028
November 15, 2029
December 1, 2024
December 1, 2044
(a) Denotes senior notes.
Our senior notes are senior unsecured obligations and rank equally with all our other senior unsecured indebtedness from time to time outstanding. The notes are effectively subordinated to all of our
existing or future secured indebtedness and to the existing and future indebtedness of our subsidiaries. As is customary for such long-term debt instruments, each series of notes
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Albemarle Corporation and Subsidiaries
outstanding has terms that allow us to redeem the notes before maturity, in whole at any time or in part from time to time, at a redemption price equal to the greater of (i) 100% of the principal amount of
these notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to the date of redemption) discounted to
the redemption date on a semi-annual basis using the comparable government rate (as defined in the indentures governing these notes) plus between 25 and 40 basis points, depending on the series of notes,
plus, in each case, accrued interest thereon to the date of redemption. Holders may require us to purchase such notes at 101% upon a change of control triggering event, as defined in the indentures. These
notes are subject to typical events of default, including bankruptcy and insolvency events, nonpayment and the acceleration of certain subsidiary indebtedness of $40 million or more caused by a
nonpayment default.
Our Euro notes issued in 2019 are unsecured and unsubordinated obligations and rank equally in right of payment to all our other unsecured senior obligations. The Euro notes are effectively
subordinated to all of our existing or future secured indebtedness and to the existing and future indebtedness of our subsidiaries. As is customary for such long-term debt instruments, each series of notes
outstanding has terms that allow us to redeem the notes before their maturity, in whole at any time or in part from time to time, at a redemption price equal to the greater of (i) 100% of the principal amount
of the notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal thereof and interest thereon (exclusive of interest accrued to, but excluding, the date of
redemption) discounted to the redemption date on an annual basis using the bond rate (as defined in the indentures governing these notes) plus between 25 and 35 basis points, depending on the series of
notes, plus, in each case, accrued and unpaid interest on the principal amount being redeemed to, but excluding, the date of redemption. Holders may require us to purchase such notes at 101% upon a
change of control triggering event, as defined in the indentures. These notes are subject to typical events of default, including bankruptcy and insolvency events, nonpayment and the acceleration of certain
subsidiary indebtedness exceeding $100 million caused by a nonpayment default.
Our revolving, unsecured credit agreement dated as of June 21, 2018, as amended on August 14, 2019 and further amended on May 11, 2020 (the “2018 Credit Agreement”) currently provides for
borrowings of up to $1.0 billion and matures on August 9, 2024. Borrowings under the 2018 Credit Agreement bear interest at variable rates based on an average LIBOR for deposits in the relevant
currency plus an applicable margin which ranges from 0.910% to 1.500%, depending on the Company’s credit rating from Standard & Poor’s Ratings Services LLC (“S&P”), Moody’s Investors Services,
Inc. (“Moody’s”) and Fitch Ratings, Inc. (“Fitch”). The applicable margin on the facility was 1.125% as of December 31, 2021. There were no borrowings outstanding under the 2018 Credit Agreement as
of December 31, 2021.
On August 14, 2019, the Company entered into the $1.2 billion 2019 Credit Facility with several banks and other financial institutions, which was amended and restated on December 15, 2020 and
again on December 10, 2021. The lenders’ commitment to provide new loans under the amended 2019 Credit Facility permits up to four borrowings by the Company in an aggregate amount equal to $750
million. The 2019 Credit Facility terminates on December 9, 2022, with each such loan maturing 364 days after the funding of such loan. The Company can request that the maturity date of loans be
extended for a period of up to four additional years, but any such extension is subject to the approval of the lenders. At the option of the Company, the borrowings under the 2019 Credit Facility bear
interest at variable rates based on either the base rate or LIBOR for deposits in U.S. dollars, in each case plus an applicable margin which ranges from 0.000% to 0.375% for base rate borrowings or 0.875%
to 1.375% for LIBOR borrowings, depending on the Company’s credit rating from S&P, Moody’s and Fitch. The applicable margin on the 2019 Credit Facility was 1.125% as of December 31, 2021. There
were no borrowings outstanding under the 2019 Credit Agreement as of December 31, 2021.
Borrowings under the under the 2019 Credit Facility and 2018 Credit Agreement (together the “Credit Agreements”) are conditioned upon satisfaction of certain conditions precedent, including the
absence of defaults. The Company is subject to one financial covenant, as well as customary affirmative and negative covenants. The financial covenant requires that the Company’s consolidated net funded
debt to consolidated EBITDA ratio (as such terms are defined in the Credit Agreements) be less than or equal to 4.00:1 for the fiscal quarter ending December 31, 2021 and 3.50:1 for fiscal quarters
thereafter, subject to adjustments in accordance with the terms of the Credit Agreements relating to a consummation of an acquisition where the consideration includes cash proceeds from issuance of
funded debt in excess of $500 million. The Credit Agreements also contain customary default provisions, including defaults for non-payment, breach of representations and warranties, insolvency, non-
performance of covenants and cross-defaults to other material indebtedness. The occurrence of an event of default under the Credit Agreements could result in all loans and other obligations becoming
immediately due and payable and each such Credit Agreement being terminated. Certain representations, warranties and covenants under the 2018 Credit Agreement were conformed to those under the
2019 Credit Facility following the amendments to those agreements.
On May 29, 2013, we entered into agreements to initiate a commercial paper program on a private placement basis under which we may issue unsecured commercial paper notes (the “Commercial
Paper Notes”) from time-to-time up to a maximum
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Albemarle Corporation and Subsidiaries
aggregate principal amount outstanding at any time of $750.0 million. The proceeds from the issuance of the Commercial Paper Notes are expected to be used for general corporate purposes, including the
repayment of other debt of the Company. The Credit Agreements are available to repay the Commercial Paper Notes, if necessary. Aggregate borrowings outstanding under the Credit Agreements and the
Commercial Paper Notes will not exceed the $1.75 billion current maximum amount available under the Credit Agreements. The Commercial Paper Notes will be sold at a discount from par, or
alternatively, will be sold at par and bear interest at rates that will vary based upon market conditions at the time of issuance. The maturities of the Commercial Paper Notes will vary but may not exceed
397 days from the date of issue. The definitive documents relating to the commercial paper program contain customary representations, warranties, default and indemnification provisions. At December 31,
2021, we had $388.5 million of Commercial Paper Notes outstanding bearing a weighted-average interest rate of approximately 0.46% and a weighted-average maturity of 20 days. The Commercial Paper
Notes are classified as Current portion of long-term debt in our consolidated balance sheets at December 31, 2021 and 2020.
The non-current portion of our long-term debt amounted to $2.00 billion at December 31, 2021, compared to $2.77 billion at December 31, 2020. In addition, at December 31, 2021, we had the
ability to borrow $1.36 billion under our commercial paper program and the Credit Agreements, and $210.6 million under other existing lines of credit, subject to various financial covenants under our
Credit Agreements. We have the ability and intent to refinance our borrowings under our other existing credit lines with borrowings under the Credit Agreements, as applicable. Therefore, the amounts
outstanding under those credit lines, if any, are classified as long-term debt. We believe that as of December 31, 2021 we were, and currently are, in compliance with all of our debt covenants. For
additional information about our long-term debt obligations, see Note 14, “Long-Term Debt,” to our consolidated financial statements included in Part II, Item 8 of this report.
Off-Balance Sheet Arrangements
In the normal course of business with customers, vendors and others, we have entered into off-balance sheet arrangements, including bank guarantees and letters of credit, which totaled
approximately $81.2 million at December 31, 2021. None of these off-balance sheet arrangements has, or is likely to have, a material effect on our current or future financial condition, results of operations,
liquidity or capital resources.
Liquidity Outlook
We anticipate that cash on hand and cash provided by operating activities, divestitures and borrowings will be sufficient to pay our operating expenses, satisfy debt service obligations, fund any
capital expenditures and share repurchases, make acquisitions, make pension contributions and pay dividends for the foreseeable future. Our main focus during the continued uncertainty surrounding the
COVID-19 pandemic is to continue to maintain financial flexibility by continuing our cost savings initiative, while still protecting our employees and customers, committing to shareholder returns and
maintaining an investment grade rating. Over the next three years, in terms of uses of cash, we will continue to invest in growth of the businesses and return value to shareholders. Additionally, we will
continue to evaluate the merits of any opportunities that may arise for acquisitions of businesses or assets, which may require additional liquidity.
Our growth investments include the recently announced the signing of a definitive agreement to acquire all of the outstanding equity of Tianyuan for approximately $200 million in cash. Tianyuan's
operations include a recently constructed lithium processing plant that has designed annual conversion capacity of up to 25,000 metric tons of LCE and is capable of producing battery-grade lithium
carbonate and lithium hydroxide. We expect the transaction, which is subject to customary closing conditions, to close in the first half of 2022. In addition, we announced agreements for strategic
investments in China with plans to build two lithium hydroxide conversion plants, each initially targeting 50,000 metric tons per year. We expect construction of these conversion plants to begin in 2022
and be completed by the end of 2024.
Overall, with generally strong cash-generative businesses and no significant long-term debt maturities before November 2024, we believe we have, and will be able to maintain, a solid liquidity
position. Our annual maturities of long-term debt as of December 31, 2021 are as follows (in millions): 2022—$389.9; 2023—$0.0; 2024—$425.0; 2025—$426.6; 2026—$0.0; thereafter—$1,166.4.
Obligations in 2022 primarily include our outstanding Commercial Paper Notes of $388.5 million with a weighted average maturity of 20 days. In addition, we expect to make interest payments on those
long-term debt obligations as follows (in millions): 2022—$58.5; 2023—$56.6; 2024—$55.1; 2025—$38.5; 2026—$34.1; thereafter—$378.1. For variable-rate debt obligations, projected interest
payments are calculated using the December 31, 2021 weighted average interest rate of approximately 0.40%.
In addition, we expect our capital expenditures to be between $1.3 billion and $1.5 billion in 2022, primarily for Lithium growth and capacity increases, primarily in Australia, China and Silver Peak,
Nevada, as well as productivity and continuity of operations projects in all segments. Train I of our Kemerton, Western Australia plant was completed in December 2021, but due to the ongoing labor
shortages and COVID-19 pandemic travel restrictions in Western Australia, Train II construction is now
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Albemarle Corporation and Subsidiaries
expected to be completed in the second half of 2022. Commercial sales volume from Train I will begin in 2022 and Train II in 2023. As of December 31, 2021, we have also committed to approximately
$99.4 million of payments to third-party vendors in the normal course of business to secure raw materials for our production processes, with approximately $78.3 million to be paid in 2022. In order to
secure materials, sometimes for long durations, these contracts mandate a minimum amount of product to be purchased at predetermined rates over a set timeframe.
See Note 18, “Leases,” to our consolidated financial statements included in Part II, Item 8 of this report for our annual expected payments under our operating lease obligations at December 31, 2021.
In 2022, we expect to pay $23.8 million of the $258.0 million balance remaining from the transition tax on foreign earnings as a result of the Tax Cuts and Jobs Act (“TCJA”) signed into law in
December 2017. The one-time transition tax imposed by the TCJA is based on our total post-1986 earnings and profits that we previously deferred from U.S. income taxes and is payable over an eight-year
period, with the final payment made in 2026.
Contributions to our domestic and foreign qualified and nonqualified pension plans, including our supplemental executive retirement plan, are expected to approximate $12 million in 2022. We may
choose to make additional pension contributions in excess of this amount. We made contributions of approximately $27.6 million to our domestic and foreign pension plans (both qualified and
nonqualified) during the year ended December 31, 2021.
The liability related to uncertain tax positions, including interest and penalties, recorded in Other noncurrent liabilities totaled $27.7 million and $14.7 million at December 31, 2021 and 2020,
respectively. Related assets for corresponding offsetting benefits recorded in Other assets totaled $32.9 million and $24.1 million at December 31, 2021 and 2020, respectively. We cannot estimate the
amounts of any cash payments during the next twelve months associated with these liabilities and are unable to estimate the timing of any such cash payments in the future at this time.
Our cash flows from operations may be negatively affected by adverse consequences to our customers and the markets in which we compete as a result of moderating global economic conditions and
reduced capital availability. The COVID-19 pandemic has not had a material impact on our liquidity to date; however, we cannot predict the overall impact in terms of cash flow generation as that will
depend on the length and severity of the outbreak. As a result, we are planning for various economic scenarios and actively monitoring our balance sheet to maintain the financial flexibility needed.
Although we maintain business relationships with a diverse group of financial institutions as sources of financing, an adverse change in their credit standing could lead them to not honor their
contractual credit commitments to us, decline funding under our existing but uncommitted lines of credit with them, not renew their extensions of credit or not provide new financing to us. While the global
corporate bond and bank loan markets remain strong, periods of elevated uncertainty related to the COVID-19 pandemic or global economic and/or geopolitical concerns may limit efficient access to such
markets for extended periods of time. If such concerns heighten, we may incur increased borrowing costs and reduced credit capacity as our various credit facilities mature. If the U.S. Federal Reserve or
similar national reserve banks in other countries decide to tighten the monetary supply in response, for example, to improving economic conditions, we may incur increased borrowing costs (as interest
rates increase on our variable rate credit facilities, as our various credit facilities mature or as we refinance any maturing fixed rate debt obligations), although these cost increases would be partially offset
by increased income rates on portions of our cash deposits.
On February 6, 2017, Huntsman, a subsidiary of Huntsman Corporation, filed a lawsuit in New York state court against Rockwood, Rockwood Specialties, Inc., certain former executives of
Rockwood and its subsidiaries—Seifollah Ghasemi, Thomas Riordan, Andrew Ross, and Michael Valente, and Albemarle. The lawsuit arises out of Huntsman’s acquisition of certain Rockwood
subsidiaries in connection with a stock purchase agreement (the “SPA”), dated September 17, 2013. Before that transaction closed on October 1, 2014, Albemarle began discussions with Rockwood to
purchase all outstanding equity of Rockwood and did so in a transaction that closed on January 12, 2015. Huntsman’s complaint asserted that certain technology that Rockwood had developed for a
production facility in Augusta, Georgia, and which was among the assets that Huntsman acquired pursuant to the SPA, did not work, and that Rockwood and the defendant executives had intentionally
misled Huntsman about that technology in connection with the Huntsman-Rockwood transaction. The complaint asserted claims for, among other things, fraud, negligent misrepresentation, and breach of
the SPA, and sought certain costs for completing construction of the production facility.
On March 10, 2017, Albemarle moved in New York state court to compel arbitration, which was granted on January 8, 2018 (although Huntsman unsuccessfully appealed that decision). Huntsman’s
arbitration demand asserted claims substantially similar to those asserted in its state court complaint, and sought various forms of legal remedies, including cost overruns, compensatory damages,
expectation damages, punitive damages, and restitution. After a trial, the arbitration panel issued an
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Albemarle Corporation and Subsidiaries
award on October 28, 2021, awarding approximately $600 million (including interest) to be paid by Albemarle to Huntsman, in addition to the possibility of attorney’s fees, costs and expenses. Following
the arbitration panel decision, Albemarle reached a settlement with Huntsman to pay $665 million in two equal installments, with the first payment made in December 2021. As a result, the consolidated
statements of income for the year ended December 31, 2021, includes expense of $657.4 million ($508.5 million net of income tax), inclusive of legal fees incurred by Huntsman and other related
obligations, to reflect the agreed upon resolution of this legal matter.
In addition, as first reported in 2018, following receipt of information regarding potential improper payments being made by third-party sales representatives of our Refining Solutions business,
within our Catalysts segment, we promptly retained outside counsel and forensic accountants to investigate potential violations of the Company’s Code of Conduct, the Foreign Corrupt Practices Act, and
other potentially applicable laws. Based on this internal investigation, we have voluntarily self-reported potential issues relating to the use of third-party sales representatives in our Refining Solutions
business, within our Catalysts segment, to the DOJ, the SEC, and the DPP, and are cooperating with the DOJ, the SEC, and the DPP in their review of these matters. In connection with our internal
investigation, we have implemented, and are continuing to implement, appropriate remedial measures. We have commenced discussions with the SEC about a potential resolution.
At this time, we are unable to predict the duration, scope, result, or related costs associated with the investigations. We also are unable to predict what action may be taken by the DOJ, the SEC, or the
DPP, or what penalties or remedial actions they may ultimately seek. Any determination that our operations or activities are not, or were not, in compliance with existing laws or regulations could result in
the imposition of fines, penalties, disgorgement, equitable relief, or other losses. We do not believe, however, that any such fines, penalties, disgorgement, equitable relief, or other losses would have a
material adverse effect on our financial condition or liquidity. However, an adverse resolution could have a material adverse effect on our results of operations in a particular period.
We had cash and cash equivalents totaling $439.3 million as of December 31, 2021, of which $374.0 million is held by our foreign subsidiaries. This cash represents an important source of our
liquidity and is invested in bank accounts or money market investments with no limitations on access. The cash held by our foreign subsidiaries is intended for use outside of the U.S. We anticipate that any
needs for liquidity within the U.S. in excess of our cash held in the U.S. can be readily satisfied with borrowings under our existing U.S. credit facilities or our commercial paper program.
Guarantor Financial Information
Albemarle Wodgina Pty Ltd Issued Notes
Albemarle Wodgina Pty Ltd (the “Issuer”), a wholly owned subsidiary of Albemarle Corporation, issued $300.0 million aggregate principal amount of 3.45% Senior Notes due 2029 (the “3.45%
Senior Notes”) in November 2019. The 3.45% Senior Notes are fully and unconditionally guaranteed (the “Guarantee”) on a senior unsecured basis by Albemarle Corporation (the “Parent Guarantor”). No
direct or indirect subsidiaries of the Parent Guarantor guarantee the 3.45% Senior Notes (such subsidiaries are referred to as the “Non-Guarantors”).
In 2019, we completed the acquisition of a 60% interest in MRL’s Wodgina Project in Western Australia and formed an unincorporated joint venture with MRL, MARBL, for the exploration,
development, mining, processing and production of lithium and other minerals (other than iron ore and tantalum) from the Wodgina spodumene mine and for the operation of the Kemerton assets in
Western Australia. We participate in the Wodgina Project through our ownership interest in the Issuer.
The Parent Guarantor conducts its U.S. Bromine and Catalysts operations directly, and conducts its other operations (other than operations conducted through the Issuer) through the Non-Guarantors.
The 3.45% Senior Notes are the Issuer’s senior unsecured obligations and rank equally in right of payment to the senior indebtedness of the Issuer, effectively subordinated to all of the secured
indebtedness of the Issuer, to the extent of the value of the assets securing that indebtedness, and structurally subordinated to all indebtedness and other liabilities of its subsidiaries. The Guarantee is the
senior unsecured obligation of the Parent Guarantor and ranks equally in right of payment to the senior indebtedness of the Parent Guarantor, effectively subordinated to the secured debt of the Parent
Guarantor to the extent of the value of the assets securing the indebtedness and structurally subordinated to all indebtedness and other liabilities of its subsidiaries.
For cash management purposes, the Parent Guarantor transfers cash among itself, the Issuer and the Non-Guarantors through intercompany financing arrangements, contributions or declaration of
dividends between the respective parent and its subsidiaries. The transfer of cash under these activities facilitates the ability of the recipient to make specified third-party payments for principal and interest
on the Issuer and/or the Parent Guarantor’s outstanding debt, common stock dividends and
68
Albemarle Corporation and Subsidiaries
common stock repurchases. There are no significant restrictions on the ability of the Issuer or the Parent Guarantor to obtain funds from subsidiaries by dividend or loan.
The following tables present summarized financial information for the Parent Guarantor and the Issuer on a combined basis after elimination of (i) intercompany transactions and balances among the
Issuer and the Parent Guarantor and (ii) equity in earnings from and investments in any subsidiary that is a Non-Guarantor. Each entity in the combined financial information follows the same accounting
policies as described herein.
Summarized Statement of Operations
$ in thousands
(a)
Net sales
Gross profit
Loss before income taxes and equity in net income of unconsolidated investments
Net loss attributable to the Guarantor and the Issuer
(c)
(b)(c)
Year ended December 31,
2021
$
1,412,913
241,739
(607,995)
(558,342)
(a) Includes net sales to Non-Guarantors of $715.6 million for the year ended December 31, 2021.
(b) Includes intergroup expenses to Non-Guarantors of $114.3 million for the year ended December 31, 2021.
(c) Includes Parent Guarantor’s portion of the gain on sale of the FCS business on June 1, 2021 and the loss for the legacy Rockwood legal matter. In addition, includes Issuer’s loss related to anticipated cost overruns for
MRL’s 40% interest in lithium hydroxide conversion assets being built in Kemerton.
Summarized Balance Sheet
(a)
$ in thousands
Current assets
Net property, plant and equipment
Other non-current assets
(b)
Current liabilities
Long-term debt
Other non-current liabilities
(c)
$
$
At December 31,
2021
961,003
2,979,034
534,695
2,329,212
1,002,009
7,008,857
(a) Includes receivables from Non-Guarantors of $466.6 million at December 31, 2021.
(b) Includes current payables to Non-Guarantors of $1,105.2 million at December 31, 2021.
(c) Includes non-current payables to Non-Guarantors of $6.5 billion at December 31, 2021.
The 3.45% Senior Notes are structurally subordinated to the indebtedness and other liabilities of the Non-Guarantors. The Non-Guarantors are separate and distinct legal entities and have no
obligation, contingent or otherwise, to pay any amounts due pursuant to the 3.45% Senior Notes or the Indenture under which the 3.45% Senior Notes were issued, or to make any funds available therefor,
whether by dividends, loans, distributions or other payments. Any right that the Parent Guarantor has to receive any assets of any of the Non-Guarantors upon the liquidation or reorganization of any Non-
Guarantor, and the consequent rights of holders of the 3.45% Senior Notes to realize proceeds from the sale of any of a Non-Guarantor’s assets, would be effectively subordinated to the claims of such Non-
Guarantor’s creditors, including trade creditors and holders of preferred equity interests, if any, of such Non-Guarantor. Accordingly, in the event of a bankruptcy, liquidation or reorganization of any of the
Non-Guarantors, the Non-Guarantors will pay the holders of their debts, holders of preferred equity interests, if any, and their trade creditors before they will be able to distribute any of their assets to the
Parent Guarantor.
The 3.45% Senior Notes are obligations of the Issuer. The Issuer’s cash flow and ability to make payments on the 3.45% Senior Notes could be dependent upon the earnings it derives from the
production from MARBL for the Wodgina Project. Absent income received from sales of its share of production from MARBL, the Issuer’s ability to service the 3.45% Senior Notes could be dependent
upon the earnings of the Parent Guarantor’s subsidiaries and other joint ventures and the payment of those earnings to the Issuer in the form of equity, loans or advances and through repayment of loans or
advances from the Issuer.
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Albemarle Corporation and Subsidiaries
The Issuer’s obligations in respect of MARBL are guaranteed by the Parent Guarantor. Further, under MARBL pursuant to a deed of cross security between the Issuer, the joint venture partner and the
manager of the project (the “Manager”), each of the Issuer, and the joint venture partner have granted security to each other and the Manager for the obligations each of the Issuer and the joint venture
partner have to each other and to the Manager. The claims of the joint venture partner, the Manager and other secured creditors of the Issuer will have priority as to the assets of the Issuer over the claims of
holders of the 3.45% Senior Notes.
Albemarle Corporation Issued Notes
In March 2021, Albemarle New Holding GmbH (the “Subsidiary Guarantor”), a wholly owned subsidiary of Albemarle Corporation, added a full and unconditional guarantee (the “Upstream
Guarantee”) to all securities issued and outstanding by Albemarle Corporation (the “Parent Issuer”) and issuable by the Parent Issuer pursuant to the Indenture, dated as of January 20, 2005, as amended
and supplemented from time to time (the “Indenture”). No other direct or indirect subsidiaries of the Parent Issuer guarantee these securities (such subsidiaries are referred to as the “Upstream Non-
Guarantors”). See Long-term debt section above for a description of the securities issued by the Parent Issuer.
The current securities outstanding under the Indenture are the Parent Issuer’s unsecured and unsubordinated obligations and rank equally in right of payment with all other unsecured and
unsubordinated indebtedness. With respect to any series of securities issued under the Indenture, the Upstream Guarantee is, and will be, an unsecured and unsubordinated obligation of the Subsidiary
Guarantor, ranking pari passu with all other existing and future unsubordinated and unsecured indebtedness of the Subsidiary Guarantor.
For cash management purposes, the Parent Issuer transfers cash among itself, the Subsidiary Guarantor and the Upstream Non-Guarantors through intercompany financing arrangements, contributions
or declaration of dividends between the respective parent and its subsidiaries. The transfer of cash under these activities facilitates the ability of the recipient to make specified third-party payments for
principal and interest on the Parent Issuer and/or the Subsidiary Guarantor’s outstanding debt, common stock dividends and common stock repurchases. There are no significant restrictions on the ability of
the Parent Issuer or the Subsidiary Guarantor to obtain funds from subsidiaries by dividend or loan.
The following tables present summarized financial information for the Subsidiary Guarantor and the Parent Issuer on a combined basis after elimination of (i) intercompany transactions and balances
among the Parent Issuer and the Subsidiary Guarantor and (ii) equity in earnings from and investments in any subsidiary that is an Upstream Non-Guarantor.
Summarized Statement of Operations
$ in thousands
(a)
Net sales
Gross profit
Loss before income taxes and equity in net income of unconsolidated investments
Net loss attributable to the Subsidiary Guarantor and the Parent Issuer
(c)
(b)(c)
(a) Includes net sales to Non-Guarantors of $715.6 million for the year ended December 31, 2021.
(b) Includes intergroup expenses to Non-Guarantors of $17.8 million for the year ended December 31, 2021.
(c) Includes the Parent Issuer’s portion of the gain on sale of the FCS business on June 1, 2021 and the loss for the legacy Rockwood legal matter.
70
Year ended December 31,
2021
$
1,412,913
259,314
(368,737)
(320,726)
Albemarle Corporation and Subsidiaries
Summarized Balance Sheet
(a)
$ in thousands
Current assets
Net property, plant and equipment
Other non-current assets
(b)
(c)
Current liabilities
Long-term debt
Other non-current liabilities
(d)
$
$
At December 31,
2021
1,039,391
754,818
1,634,883
2,174,360
1,755,026
6,404,958
(a) Includes current receivables from Non-Guarantors of $576.1 million at December 31, 2021.
(b) Includes noncurrent receivables from Non-Guarantors of $1.1 billion at December 31, 2021.
(c) Includes current payables to Non-Guarantors of $1.1 billion at December 31, 2021.
(d) Includes non-current payables to Non-Guarantors of $5.8 billion at December 31, 2021.
These securities are structurally subordinated to the indebtedness and other liabilities of the Upstream Non-Guarantors. The Upstream Non-Guarantors are separate and distinct legal entities and have
no obligation, contingent or otherwise, to pay any amounts due pursuant to these securities or the Indenture under which these securities were issued, or to make any funds available therefor, whether by
dividends, loans, distributions or other payments. Any right that the Subsidiary Guarantor has to receive any assets of any of the Upstream Non-Guarantors upon the liquidation or reorganization of any
Upstream Non-Guarantors, and the consequent rights of holders of these securities to realize proceeds from the sale of any of an Upstream Non-Guarantor’s assets, would be effectively subordinated to the
claims of such Upstream Non-Guarantor’s creditors, including trade creditors and holders of preferred equity interests, if any, of such Upstream Non-Guarantor. Accordingly, in the event of a bankruptcy,
liquidation or reorganization of any of the Upstream Non-Guarantors, the Upstream Non-Guarantors will pay the holders of their debts, holders of preferred equity interests, if any, and their trade creditors
before they will be able to distribute any of their assets to the Subsidiary Guarantor.
Safety and Environmental Matters
We are subject to federal, state, local and foreign requirements regulating the handling, manufacture and use of materials (some of which may be classified as hazardous or toxic by one or more
regulatory agencies), the discharge of materials into the environment and the protection of the environment. To our knowledge, we are currently complying and expect to continue to comply in all material
respects with applicable environmental laws, regulations, statutes and ordinances. Compliance with existing federal, state, local and foreign environmental protection laws is not expected to have a material
effect on capital expenditures, earnings or our competitive position, but the costs associated with increased legal or regulatory requirements could have an adverse effect on our operating results.
Among other environmental requirements, we are subject to the federal Superfund law, and similar state laws, under which we may be designated as a PRP, and may be liable for a share of the costs
associated with cleaning up various hazardous waste sites. Management believes that in cases in which we may have liability as a PRP, our liability for our share of cleanup is de minimis. Further, almost all
such sites represent environmental issues that are quite mature and have been investigated, studied and in many cases settled. In de minimis situations, our policy generally is to negotiate a consent decree
and to pay any apportioned settlement, enabling us to be effectively relieved of any further liability as a PRP, except for remote contingencies. In other than de minimis PRP matters, our records indicate
that unresolved PRP exposures should be immaterial. We accrue and expense our proportionate share of PRP costs. Because management has been actively involved in evaluating environmental matters,
we are able to conclude that the outstanding environmental liabilities for unresolved PRP sites should not have a material adverse effect upon our results of operations or financial condition.
Our environmental and safety operating costs charged to expense were $43.2 million, $44.9 million and $48.0 million in 2021, 2020 and 2019, respectively, excluding depreciation of previous capital
expenditures, and are expected to be in the same range in the next few years. Costs for remediation have been accrued and payments related to sites are charged against accrued liabilities, which at
December 31, 2021 totaled approximately $46.6 million, an increase of $0.8 million from $45.8 million at December 31, 2020. See Note 17, “Commitments and Contingencies” to our consolidated
financial statements included in Part II, Item 8 of this report for a reconciliation of our environmental liabilities for the years ended December 31, 2021, 2020 and 2019.
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Albemarle Corporation and Subsidiaries
We believe that any sum we may be required to pay in connection with environmental remediation and asset retirement obligation matters in excess of the amounts recorded should occur over a
period of time and should not have a material adverse effect upon our results of operations, financial condition or cash flows on a consolidated annual basis, although any such sum could have a material
adverse impact on our results of operations, financial condition or cash flows in a particular quarterly reporting period.
Capital expenditures for pollution-abatement and safety projects, including such costs that are included in other projects, were approximately $55.4 million, $40.4 million and $44.4 million in 2021,
2020 and 2019, respectively. In the future, capital expenditures for these types of projects may increase due to more stringent environmental regulatory requirements and our efforts in reaching
sustainability goals. Management’s estimates of the effects of compliance with governmental pollution-abatement and safety regulations are subject to (a) the possibility of changes in the applicable statutes
and regulations or in judicial or administrative construction of such statutes and regulations and (b) uncertainty as to whether anticipated solutions to pollution problems will be successful, or whether
additional expenditures may prove necessary.
Recently Issued Accounting Pronouncements
See Note 1, “Summary of Significant Accounting Policies” to our consolidated financial statements included in Part II, Item 8 of this report for a discussion of our Recently Issued Accounting
Pronouncements.
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk.
The primary currencies to which we have foreign currency exchange rate exposure are the Euro, Japanese Yen, Chinese Renminbi, Australian Dollar and Chilean Peso. In response to greater
fluctuations in foreign currency exchange rates in recent periods, we have increased the degree of exposure risk management activities to minimize the potential impact on earnings.
We manage our foreign currency exposures by balancing certain assets and liabilities denominated in foreign currencies and through the use, from time to time, of foreign currency forward contracts.
The principal objective of such contracts is to minimize the financial impact of changes in foreign currency exchange rates. The counterparties to these contractual agreements are major financial
institutions with which we generally have other financial relationships. We are exposed to credit loss in the event of nonperformance by these counterparties. However, we do not anticipate nonperformance
by the counterparties. We do not utilize financial instruments for trading or other speculative purposes.
The primary method we use to reduce foreign currency exposure is to identify natural hedges, in which the operating activities denominated in respective currencies across various subsidiaries
balance in respect to timing and the underlying exposures. In the event a natural hedge is not available, we may employ a forward contract to reduce exposure, generally expiring within one year. While
these contracts are subject to fluctuations in value, such fluctuations are intended to offset the changes in the value of the underlying exposures being hedged. In the fourth quarter of 2019, we entered into a
foreign currency forward contract to hedge the cash flow exposure of non-functional currency purchases during the construction of the Kemerton plant in Australia. This contract has been designated as an
effective hedging instrument, and beginning the date of designation, gains or losses on the revaluation of this contract to our reporting currency have been and will be recorded in Accumulated other
comprehensive loss. All other gains and losses on foreign currency forward contracts not designated as an effective hedging instrument are recognized in Other expenses, net, and generally do not have a
significant impact on results of operations.
At December 31, 2021, our financial instruments subject to foreign currency exchange risk consisted of foreign currency forward contracts with an aggregate notional value of $654.6 million and
with a fair value representing a net asset position of $2.8 million. Fluctuations in the value of these contracts are intended to offset the changes in the value of the underlying exposures being hedged. We
conducted a sensitivity analysis on the fair value of our foreign currency hedge portfolio assuming an instantaneous 10% change in select foreign currency exchange rates from their levels as of
December 31, 2021, with all other variables held constant. A 10% appreciation of the U.S. Dollar against foreign currencies that we hedge would result in a decrease of approximately $33.6 million in the
fair value of our foreign currency forward contracts. A 10% depreciation of the U.S. Dollar against these foreign currencies would result in an increase of approximately $38.0 million in the fair value of
our foreign currency forward contracts. The sensitivity of the fair value of our foreign currency hedge portfolio represents changes in fair values estimated based on market conditions as of December 31,
2021, without reflecting the effects of underlying anticipated transactions. When those anticipated transactions are realized, actual effects of changing foreign currency exchange rates could have a material
impact on our earnings and cash flows in future periods.
On December 18, 2014, the carrying value of our 1.875% Euro-denominated senior notes was designated as an effective hedge of our net investment in foreign subsidiaries where the Euro serves as
the functional currency, and beginning on the date
72
Albemarle Corporation and Subsidiaries
of designation, gains or losses on the revaluation of these senior notes to our reporting currency have been were recorded in Accumulated other comprehensive loss. In the first quarter of 2021, we repaid
the outstanding balance of these senior notes, and as a result, this net investment hedge was discontinued. The balance of foreign exchange revaluation gains and losses associated with this discontinued net
investment hedge will remain within accumulated other comprehensive loss until the hedged net investment is sold or liquidated.
We are exposed to changes in interest rates that could impact our results of operations and financial condition. We manage global interest rate and foreign exchange exposure as part of our regular
operational and financing strategies. We had variable interest rate borrowings of $393.7 million and $756.6 million outstanding at December 31, 2021 and 2020, respectively. These borrowings represented
16% and 21% of total outstanding debt and bore average interest rates of 0.40% and 0.87% at December 31, 2021 and 2020, respectively. A hypothetical 100 basis point increase in the average interest rate
applicable to these borrowings would change our annualized interest expense by approximately $3.9 million as of December 31, 2021. We may enter into interest rate swaps, collars or similar instruments
with the objective of reducing interest rate volatility relating to our borrowing costs.
Our raw materials are subject to price volatility caused by weather, supply conditions, political and economic variables and other unpredictable factors. Historically, we have not used futures, options
or swap contracts to manage the volatility related to the above exposures. However, the refinery catalysts business has used financing arrangements to provide long-term protection against changes in
metals prices. We seek to limit our exposure by entering into long-term contracts when available, and we seek price increase limitations through contracts. These contracts do not have a significant impact
on our results of operations.
73
Albemarle Corporation and Subsidiaries
Item 8. Financial Statements and Supplementary Data.
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Exchange Act Rule 13a-15(f) and 15d-15(f). Our internal control over
financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
accounting principles generally accepted in the United States. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures of the Company are being made only in accordance with management’s and
our directors’ authorizations; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on
the financial statements.
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our
internal control over financial reporting as of December 31, 2021. In making this assessment, management used the criteria for effective internal control over financial reporting described in the Internal
Control—Integrated Framework 2013 set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the assessment, management concluded that, as of
December 31, 2021, our internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles in the United States. The concept of reasonable assurance is based on the recognition that there are inherent limitations in all
systems of internal control. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as
stated in their report which is included herein.
/S/ J. KENT MASTERS
J. Kent Masters
Chairman, President and Chief Executive Officer
(principal executive officer)
February 18, 2022
74
Albemarle Corporation and Subsidiaries
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Albemarle Corporation
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated balance sheets of Albemarle Corporation and its subsidiaries (the “Company”) as of December 31, 2021 and 2020, and the related consolidated
statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2021, including the related notes (collectively referred
to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results
of its operations and its cash flows for each of the three years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America. Also in
our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated
Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of
internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s
consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting
Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud,
and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our
audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our
audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating
the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe
that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.
75
Albemarle Corporation and Subsidiaries
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject
to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the
audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The
communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,
providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Goodwill Impairment Assessment – Refining Solutions Reporting Unit
As described in Notes 1 and 12 to the consolidated financial statements, the Company’s goodwill balance was $1,598 million as of December 31, 2021, and the goodwill associated with the Refining
Solutions reporting unit was $176 million. Management conducts an impairment test as of October 31 of each year, or more frequently if events or circumstances indicate that the carrying value of goodwill
may be impaired. Potential impairment is identified by comparing the fair value of a reporting unit to it’s carrying value, including goodwill. Fair value is estimated by management using present value
techniques involving future cash flows. Management’s cash flow projections for the Refining Solutions reporting unit included significant judgment and assumptions relating to revenue growth rates and
adjusted EBITDA margins.
The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the Refining Solutions reporting unit is a critical audit matter are (i)
the significant judgment by management when developing the fair value measurement of the reporting unit; and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and
evaluating management’s significant assumptions related to revenue growth rates and adjusted EBITDA margins.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures
included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the Refining Solutions reporting unit. These procedures also
included, among others (i) testing management’s process for developing the fair value estimate of the Refining Solutions reporting unit; (ii) evaluating the appropriateness of the discounted cash flow
model; (iii) testing the completeness and accuracy of underlying data used in the model; and (iv) evaluating the significant assumptions used by management related to the revenue growth rates and
adjusted EBITDA margins. Evaluating management’s assumptions related to the revenue growth rates and adjusted EBITDA margins involved evaluating whether the assumptions used by management
were reasonable considering (i) the current and past performance of the reporting unit; (ii) the consistency with external economic and industry data; and (iii) whether these assumptions were consistent
with evidence obtained in other areas of the audit.
/s/ PricewaterhouseCoopers LLP
Charlotte, North Carolina
February 18, 2022
We have served as the Company’s auditor since 1994.
76
Albemarle Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
Year Ended December 31
Net sales
Cost of goods sold
Gross profit
Selling, general and administrative expenses
Research and development expenses
Gain on sale of business/interest in properties, net
Operating profit
Interest and financing expenses
Other expenses, net
Income before income taxes and equity in net income of unconsolidated investments
Income tax expense
Income before equity in net income of unconsolidated investments
Equity in net income of unconsolidated investments (net of tax)
Net income
Net income attributable to noncontrolling interests
Net income attributable to Albemarle Corporation
Basic earnings per share
Diluted earnings per share
Weighted-average common shares outstanding—basic
Weighted-average common shares outstanding—diluted
$
$
$
$
2021
2020
2019
$
$
$
$
3,327,957
2,329,986
997,971
441,482
54,026
(295,971)
798,434
(61,476)
(603,340)
133,618
29,446
104,172
95,770
199,942
(76,270)
123,672
1.07
1.06
115,841
116,536
$
$
$
$
3,128,909
2,134,056
994,853
429,827
59,214
—
505,812
(73,116)
(59,177)
373,519
54,425
319,094
127,521
446,615
(70,851)
375,764
3.53
3.52
106,402
106,808
3,589,427
2,331,649
1,257,778
533,368
58,287
—
666,123
(57,695)
(45,478)
562,950
88,161
474,789
129,568
604,357
(71,129)
533,228
5.03
5.02
105,949
106,321
See accompanying notes to the consolidated financial statements.
77
Albemarle Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In Thousands)
Year Ended December 31
Net income
Other comprehensive (loss) income, net of tax:
Foreign currency translation and other
Net investment hedge
Cash flow hedge
Interest rate swap
Total other comprehensive (loss) income, net of tax
Comprehensive income
Comprehensive income attributable to noncontrolling interests
Comprehensive income attributable to Albemarle Corporation
$
$
2021
2020
2019
199,942
$
446,615
$
(74,385)
5,110
174
2,623
(66,478)
133,464
(76,110)
57,354
$
99,832
(34,185)
1,602
2,601
69,850
516,465
(71,098)
445,367
$
604,357
(61,399)
8,441
4,847
2,591
(45,520)
558,837
(70,662)
488,175
See accompanying notes to the consolidated financial statements.
78
Albemarle Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In Thousands)
December 31
Assets
Current assets:
Cash and cash equivalents
Trade accounts receivable, less allowance for doubtful accounts (2021—$2,559; 2020—$2,083)
Other accounts receivable
Inventories
Other current assets
Total current assets
Property, plant and equipment, at cost
Less accumulated depreciation and amortization
Net property, plant and equipment
Investments
Other assets
Goodwill
Other intangibles, net of amortization
Total assets
Liabilities and Equity
Current liabilities:
Accounts payable
Accrued expenses
Current portion of long-term debt
Dividends payable
Income taxes payable
Total current liabilities
Long-term debt
Postretirement benefits
Pension benefits
Other noncurrent liabilities
Deferred income taxes
Commitments and contingencies (Note 17)
Equity:
Albemarle Corporation shareholders’ equity:
Common stock, $.01 par value (authorized 150,000 shares), issued and outstanding — 117,015 in 2021 and 106,842 in 2020
Additional paid-in capital
Accumulated other comprehensive loss
Retained earnings
Total Albemarle Corporation shareholders’ equity
Noncontrolling interests
Total equity
Total liabilities and equity
See accompanying notes to the consolidated financial statements.
79
2021
2020
439,272
556,922
66,184
812,920
132,683
2,007,981
8,074,746
2,165,130
5,909,616
897,708
252,239
1,597,627
308,947
10,974,118
647,986
763,293
389,920
45,469
27,667
1,874,335
2,004,319
43,693
229,187
663,698
353,279
1,170
2,920,007
(392,450)
3,096,539
5,625,266
180,341
5,805,607
10,974,118
$
$
$
$
746,724
530,838
61,958
750,237
116,427
2,206,184
7,427,641
2,073,016
5,354,625
656,244
219,268
1,665,520
349,105
10,450,946
483,221
440,763
804,677
40,937
32,251
1,801,849
2,767,381
48,075
340,818
629,377
394,852
1,069
1,438,038
(326,132)
3,155,252
4,268,227
200,367
4,468,594
10,450,946
$
$
$
$
Albemarle Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In Thousands, Except Share Data)
Balance at January 1, 2019
Net income
Other comprehensive loss
Cash dividends declared, $1.47 per common share
Stock-based compensation
Exercise of stock options
Issuance of common stock, net
Increase in ownership interest of noncontrolling
interest
Shares withheld for withholding taxes associated
with common stock issuances
Balance at December 31, 2019
Net income
Other comprehensive loss
Cash dividends declared, $1.54 per common share
Stock-based compensation
Exercise of stock options
Issuance of common stock, net
Shares withheld for withholding taxes associated
with common stock issuances
Balance at December 31, 2020
Net income
Other comprehensive income
Cash dividends declared, $1.56 per common share
Stock-based compensation
Fees related to public issuance of common stock
Exercise of stock options
Issuance of common stock, net
Shares withheld for withholding taxes associated
with common stock issuances
Balance at December 31, 2021
Common Stock
Shares
Amounts
Additional Paid-in
Capital
105,616,028
$
1,056
$
1,368,897
$
Accumulated Other
Comprehensive (Loss)
Income
(350,682)
(45,053)
Retained Earnings
2,566,050
$
533,228
$
(155,800)
161,909
396,269
2
4
21,284
4,812
(4)
(513)
(133,991)
106,040,215
$
(1)
1,061
$
(11,030)
1,383,446
$
682,068
185,918
7
2
19,306
40,430
(2)
(65,832)
106,842,369
$
(1)
1,069
$
(5,142)
1,438,038
$
302,151
9,919,755
3
99
18,818
(888)
18,389
1,453,789
(395,735)
$
69,603
2,943,478
375,764
$
(163,990)
(326,132)
$
(66,318)
3,155,252
123,672
$
(182,385)
Total Albemarle
Shareholders’ Equity
Noncontrolling
Interests
Total Equity
$
$
$
173,787
71,129
(467)
(83,187)
68
161,330
70,851
247
(32,061)
200,367
76,270
(160)
(96,136)
$
$
$
3,585,321
533,228
(45,053)
(155,800)
21,284
4,814
—
(513)
(11,031)
3,932,250
375,764
69,603
(163,990)
19,306
40,437
—
(5,143)
4,268,227
123,672
(66,318)
(182,385)
18,818
(888)
18,392
1,453,888
3,759,108
604,357
(45,520)
(238,987)
21,284
4,814
—
(445)
(11,031)
4,093,580
446,615
69,850
(196,051)
19,306
40,437
—
(5,143)
4,468,594
199,942
(66,478)
(278,521)
18,818
(888)
18,392
1,453,888
(8,140)
5,805,607
(48,942)
117,015,333
$
(1)
1,170
$
(8,139)
2,920,007
$
(392,450)
$
3,096,539
$
(8,140)
5,625,266
$
180,341
$
See accompanying notes to the consolidated financial statements.
80
Albemarle Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Year Ended December 31
Cash and cash equivalents at beginning of year
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to cash flows from operating activities:
Depreciation and amortization
Gain on sale of business/interest in properties, net
Gain on sale of property
Stock-based compensation and other
Equity in net income of unconsolidated investments (net of tax)
Dividends received from unconsolidated investments and nonmarketable securities
Pension and postretirement (benefit) expense
Pension and postretirement contributions
Unrealized gain on investments in marketable securities
Loss on early extinguishment of debt
Deferred income taxes
Changes in current assets and liabilities, net of effects of acquisitions and divestitures:
(Increase) decrease in accounts receivable
(Increase) decrease in inventories
Decrease (increase) in other current assets
Increase (decrease) in accounts payable
Increase (decrease) in accrued expenses and income taxes payable
Non-cash transfer of 40% value of construction in progress of Kemerton plant to MRL
Other, net
Net cash provided by operating activities
Cash flows from investing activities:
Acquisitions, net of cash acquired
Capital expenditures
Cash proceeds from divestitures, net
Proceeds from sale of joint venture
Proceeds from sale of property and equipment
Sales of marketable securities, net
Investments in equity and other corporate investments
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from issuance of common stock
Proceeds from borrowings of other long-term debt
Repayments of long-term debt and credit agreements
Other borrowings (repayments), net
Fees related to early extinguishment of debt
Dividends paid to shareholders
Dividends paid to noncontrolling interests
Proceeds from exercise of stock options
Withholding taxes paid on stock-based compensation award distributions
Other
Net cash provided by financing activities
Net effect of foreign exchange on cash and cash equivalents
(Decrease) increase in cash and cash equivalents
Cash and cash equivalents at end of year
2021
2020
2019
$
746,724
$
613,110
$
555,320
199,942
254,000
(295,971)
—
20,120
(95,770)
78,391
(74,010)
(30,253)
(3,818)
28,955
(38,500)
(49,295)
(127,401)
17,411
143,939
127,068
135,928
53,521
344,257
—
(953,667)
289,791
—
—
3,774
(6,488)
(666,590)
1,453,888
—
(1,173,823)
60,991
(24,877)
(177,853)
(96,136)
18,392
(8,140)
(2,230)
50,212
(35,331)
(307,452)
439,272
$
$
446,615
231,984
(7,168)
—
22,837
(127,521)
88,161
45,658
(16,434)
(4,635)
—
(1,976)
100,118
51,978
7,902
(31,519)
(215,011)
179,437
28,488
798,914
(22,572)
(850,477)
—
11,000
—
903
(2,427)
(863,573)
—
452,163
(250,000)
137,635
—
(161,818)
(32,061)
40,437
(5,143)
(3,952)
177,261
21,012
133,614
746,724
$
604,357
213,484
—
(14,411)
19,680
(129,568)
71,746
31,515
(16,478)
(2,809)
4,829
14,394
(18,220)
(46,304)
(32,941)
(12,234)
(4,640)
164,496
(127,522)
719,374
(820,000)
(851,796)
—
—
10,356
384
(2,569)
(1,663,625)
—
1,597,807
(175,215)
(126,364)
(4,419)
(152,204)
(83,187)
4,814
(11,031)
(7,514)
1,042,687
(40,646)
57,790
613,110
See accompanying notes to the consolidated financial statements.
81
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1—Summary of Significant Accounting Policies:
Basis of Consolidation
The consolidated financial statements include the accounts and operations of Albemarle Corporation and our wholly owned, majority owned and controlled subsidiaries. Unless the context otherwise
indicates, the terms “Albemarle,” “we,” “us,” “our” or “the Company” mean Albemarle Corporation and its consolidated subsidiaries. For entities that we control and are the primary beneficiary, but own
less than 100%, we record the minority ownership as noncontrolling interest, except as noted below. We apply the equity method of accounting for investments in which we have an ownership interest from
20% to 50% or where we exercise significant influence over the related investee’s operations. All significant intercompany accounts and transactions are eliminated in consolidation.
As described further in Note 2, “Acquisitions,” we completed the acquisition of a 60% ownership interest in Mineral Resources Limited’s (“MRL”) Wodgina hard rock lithium mine project
(“Wodgina Project”) on October 31, 2019 creating a joint venture named MARBL Lithium Joint Venture (“MARBL”). The consolidated financial statements contained herein include our proportionate
share of the results of operations of the Wodgina Project, commencing on November 1, 2019.
Estimates, Assumptions and Reclassifications
The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”) requires management to make estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those
estimates.
Revenue Recognition
Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services, and is recognized when performance obligations are satisfied under
the terms of contracts with our customers. A performance obligation is deemed to be satisfied when control of the product or service is transferred to our customer. The transaction price of a contract, or the
amount we expect to receive upon satisfaction of all performance obligations, is determined by reference to the contract’s terms and includes adjustments, if applicable, for any variable consideration, such
as customer rebates, noncash consideration or consideration payable to the customer, although these adjustments are generally not material. Where a contract contains more than one distinct performance
obligation, the transaction price is allocated to each performance obligation based on the standalone selling price of each performance obligation, although these situations do not occur frequently and are
generally not built into our contracts. Any unsatisfied performance obligations are not material. Standalone selling prices are based on prices we charge to our customers, which in some cases is based on
established market prices. Sales and other similar taxes collected from customers on behalf of third parties are excluded from revenue. Our payment terms are generally between 30 to 90 days, however,
they vary by market factors, such as customer size, creditworthiness, geography and competitive environment.
All of our revenue is derived from contracts with customers, and almost all of our contracts with customers contain one performance obligation for the transfer of goods where such performance
obligation is satisfied at a point in time. Control of a product is deemed to be transferred to the customer upon shipment or delivery. Significant portions of our sales are sold free on board shipping point or
on an equivalent basis, while delivery terms of other transactions are based upon specific contractual arrangements. Our standard terms of delivery are generally included in our contracts of sale, order
confirmation documents and invoices, while the timing between shipment and delivery generally ranges between 1 and 45 days. Costs for shipping and handling activities, whether performed before or after
the customer obtains control of the goods, are accounted for as fulfillment costs.
The Company currently utilizes the following practical expedients, as permitted by Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers:
• All sales and other pass-through taxes are excluded from contract value;
•
In utilizing the modified retrospective transition method, no adjustment was necessary for contracts that did not cross over the reporting year;
• We will not consider the possibility of a contract having a significant financing component (which would effectively attribute a portion of the sales price to interest income) unless, if at contract
inception, the expected payment terms (from time of delivery or other relevant criterion) are more than one year;
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•
If our right to customer payment is directly related to the value of our completed performance, we recognize revenue consistent with the invoicing right; and
• We expense as incurred all costs of obtaining a contract incremental to any costs/compensation attributable to individual product sales/shipments for contracts where the amortization period for
such costs would otherwise be one year or less.
Certain products we produce are made to our customer’s specifications where such products have limited alternative use or would need significant rework costs in order to be sold to another customer.
In management’s judgment, control of these arrangements is transferred to the customer at a point in time (upon shipment or delivery) and not over the time they are produced. Therefore revenue is
recognized upon shipment or delivery of these products.
Costs incurred to obtain contracts with customers are not significant and are expensed immediately as the amortization period would be one year or less. When the Company incurs pre-production or
other fulfillment costs in connection with an existing or specific anticipated contract and such costs are recoverable through margin or explicitly reimbursable, such costs are capitalized and amortized to
Cost of goods sold on a systematic basis that is consistent with the pattern of transfer to the customer of the goods or services to which the asset relates, which is less than one year. We record bad debt
expense in specific situations when we determine the customer is unable to meet its financial obligation.
Included in Trade accounts receivable at December 31, 2021 and 2020 is approximately $544.1 million and $522.3 million, respectively, arising from contracts with customers. The remaining balance
of Trade accounts receivable at December 31, 2021 and 2020 primarily includes value-added taxes collected from customers on behalf of various taxing authorities.
Cash and Cash Equivalents
Cash and cash equivalents include cash and money market investments with insignificant interest rate risks and no limitations on access.
Inventories
Inventories are stated at lower of cost and net realizable value with cost determined primarily on the first-in, first-out basis. Cost is determined on the weighted-average basis for a small portion of our
inventories at foreign plants and our stores, supplies and other inventory. A portion of our domestic produced finished goods and raw materials are determined on the last-in, first-out basis.
Property, Plant and Equipment
Property, plant and equipment include costs of assets constructed, purchased or leased under a finance lease, related delivery and installation costs and interest incurred on significant capital projects
during their construction periods. Expenditures for renewals and betterments also are capitalized, but expenditures for normal repairs and maintenance are expensed as incurred. Costs associated with yearly
planned major maintenance are generally deferred and amortized over 12 months or until the same major maintenance activities must be repeated, whichever is shorter. The cost and accumulated
depreciation applicable to assets retired or sold are removed from the respective accounts, and gains or losses thereon are included in income.
We assign the useful lives of our property, plant and equipment based upon our internal engineering estimates which are reviewed periodically. The estimated useful lives of our property, plant and
equipment range from two to sixty years and depreciation is recorded on the straight-line method, with the exception of our mineral rights and reserves, which are depleted on a units-of-production method.
We evaluate the recovery of our property, plant and equipment by comparing the net carrying value of the asset group to the undiscounted net cash flows expected to be generated from the use and
eventual disposition of that asset group when events or changes in circumstances indicate that its carrying amount may not be recoverable. If the carrying amount of the asset group is not recoverable, the
fair value of the asset group is measured and if the carrying amount exceeds the fair value, an impairment loss is recognized.
Leases
Effective January 1, 2019, we adopted Accounting Standards Update (“ASU”) No. 2016-02, “Leases” and all related amendments using the modified retrospective method. As part of this adoption,
we have elected the practical expedient relief
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package allowed by the new standard, which does not require the reassessment of (1) whether existing contracts contain a lease, (2) the lease classification or (3) unamortized initial direct costs for existing
leases; and have elected to apply hindsight to the existing leases. Additionally, we have made accounting policy elections such as exclusion of short-term leases (leases with a term of 12 months or less and
which do not include a purchase option that we are reasonably certain to exercise) from the balance sheet presentation, use of portfolio approach in determination of discount rate and accounting for non-
lease components in a contract as part of a single lease component for all asset classes, except specific mining operation equipment.
We determine if an arrangement is a lease at inception. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to
make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As an
implicit rate for most of our leases is not determinable, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
The lease payments for the initial measurement of lease ROU assets and lease liabilities include fixed and variable payments based on an index or a rate. Variable lease payments that are not index or rate
based are recorded as expenses when incurred. Our variable lease payments typically include real estate taxes, insurance costs and common-area maintenance. The operating lease ROU asset also includes
any lease payments made, net of lease incentives. The lease term is the non-cancelable period of the lease, including any options to extend, purchase or terminate the lease when it is reasonably certain that
we will exercise that option. We amortize the operating lease ROU assets on a straight-line basis over the period of the lease and the finance lease ROU assets on a straight-line basis over the shorter of their
estimated useful lives or the lease terms. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over
the lease term.
Resource Development Expenses
We incur costs in resource exploration, evaluation and development during the different phases of our resource development projects. Exploration costs incurred before the declaration of proven and
probable resources are generally expensed as incurred. After proven and probable resources are declared, exploration, evaluation and development costs necessary to bring the property to commercial
capacity or increase the capacity or useful life are capitalized. Any costs to maintain the production capacity in a property under production are expensed as incurred.
Capitalized resource costs are depleted using the units-of-production method. Our resource development assets are evaluated for impairment when events or changes in circumstances indicate that the
carrying amount may not be recoverable.
Investments
Investments are accounted for using the equity method of accounting if the investment gives us the ability to exercise significant influence, but not control, over the investee. Significant influence is
generally deemed to exist if we have an ownership interest in the voting stock of the investee between 20% and 50%, although other factors, such as representation on the investee’s board of directors and
the impact of commercial arrangements, are considered in determining whether the equity method of accounting is appropriate. Under the equity method of accounting, we record our investments in equity-
method investees in the consolidated balance sheets as Investments and our share of investees’ earnings or losses together with other-than-temporary impairments in value as Equity in net income of
unconsolidated investments in the consolidated statements of income. We evaluate our equity method investments for impairment whenever events or changes in circumstances indicate that the carrying
amounts of such investments may be impaired. If a decline in the value of an equity method investment is determined to be other than temporary, a loss is recorded in earnings in the current period.
Certain mutual fund investments are accounted for as trading equities and are marked-to-market on a periodic basis through the consolidated statements of income. Investments in joint ventures and
nonmarketable securities of immaterial entities are estimated based upon the overall performance of the entity where financial results are not available on a timely basis.
Environmental Compliance and Remediation
Environmental compliance costs include the cost of purchasing and/or constructing assets to prevent, limit and/or control pollution or to monitor the environmental status at various locations. These
costs are capitalized and depreciated based on estimated useful lives. Environmental compliance costs also include maintenance and operating costs with respect to pollution prevention and control facilities
and other administrative costs. Such operating costs are expensed as incurred. Environmental remediation costs of facilities used in current operations are generally immaterial and are expensed as incurred.
We accrue for environmental remediation costs and post-remediation costs that relate to existing conditions caused by past operations at facilities or off-plant disposal sites in the accounting period in which
responsibility is established and when the related costs are
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estimable. In developing these cost estimates, we evaluate currently available facts regarding each site, with consideration given to existing technology, presently enacted laws and regulations, prior
experience in remediation of contaminated sites, the financial capability of other potentially responsible parties and other factors, subject to uncertainties inherent in the estimation process. If the amount
and timing of the cash payments for a site are fixed or reliably determinable, the liability is discounted, if the calculated discount is material. Additionally, these estimates are reviewed periodically, with
adjustments to the accruals recorded as necessary.
Research and Development Expenses
Our research and development expenses related to present and future products are expensed as incurred. These expenses consist primarily of personnel-related costs and other overheads, as well as
outside service and consulting costs incurred for specific programs. Our U.S. facilities in Texas and Louisiana and our global facilities in the Netherlands, Germany, Belgium and Korea form the capability
base for our contract research and custom manufacturing businesses. These business areas provide research and scale-up services primarily to innovative life science companies.
Goodwill and Other Intangible Assets
We account for goodwill and other intangibles acquired in a business combination in conformity with current accounting guidance that requires that goodwill and indefinite-lived intangible assets not
be amortized.
We test goodwill for impairment by comparing the estimated fair value of our reporting units to the related carrying value. Our reporting units are either our operating business segments or one level
below our operating business segments for which discrete financial information is available and for which operating results are regularly reviewed by the business management. In applying the goodwill
impairment test, the Company initially performs a qualitative test (“Step 0”), where it first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting units
is less than its carrying value. Qualitative factors may include, but are not limited to, economic conditions, industry and market considerations, cost factors, overall financial performance of the reporting
units and other entity and reporting unit specific events. If after assessing these qualitative factors, the Company determines it is “more-likely-than-not” that the fair value of the reporting unit is less than
the carrying value, the Company performs a quantitative test (“Step 1”). During Step 1, the Company estimates the fair value based on present value techniques involving future cash flows. Future cash
flows for all reporting units include assumptions about revenue growth rates, adjusted EBITDA margins, discount rate as well as other economic or industry-related factors. For the Refining Solutions
reporting unit, the revenue growth rates and adjusted EBITDA margins were deemed to be significant assumptions. Significant management judgment is involved in estimating these variables and they
include inherent uncertainties since they are forecasting future events. We perform a sensitivity analysis by using a range of inputs to confirm the reasonableness of these estimates being used in the
goodwill impairment analysis. We use a Weighted Average Cost of Capital (“WACC”) approach to determine our discount rate for goodwill recoverability testing. Our WACC calculation incorporates
industry-weighted average returns on debt and equity from a market perspective. The factors in this calculation are largely external to the Company and, therefore, are beyond our control. We test our
recorded goodwill for impairment in the fourth quarter of each year or upon the occurrence of events or changes in circumstances that would more likely than not reduce the fair value of our reporting units
below their carrying amounts. The Company performed its annual goodwill impairment test as of October 31, 2021 and no evidence of impairment was noted from the analysis. As a result, the Company
concluded there was no impairment as of that date.
We assess our indefinite-lived intangible assets, which include trade names and trademarks, for impairment annually and between annual tests if events or changes in circumstances indicate that it is
more likely than not that the asset is impaired. The indefinite-lived intangible asset impairment standard allows us to first assess qualitative factors to determine if a quantitative impairment test is necessary.
Further testing is only required if we determine, based on the qualitative assessment, that it is more likely than not that the indefinite-lived intangible asset’s fair value is less than its carrying amount. If we
determine based on the qualitative assessment that it is more likely than not that the asset is impaired, an impairment test is performed by comparing the fair value of the indefinite-lived intangible asset to
its carrying amount. During the year ended December 31, 2021, no evidence of impairment was noted from the analysis for our indefinite-lived intangible assets.
Definite-lived intangible assets, such as purchased technology, patents and customer lists, are amortized over their estimated useful lives generally for periods ranging from five to twenty-five years.
Except for customer lists and relationships associated with the majority of our Lithium business, which are amortized using the pattern of economic benefit method, definite-lived intangible assets are
amortized using the straight-line method. We evaluate the recovery of our definite-lived intangible assets by comparing the net carrying value of the asset group to the undiscounted net cash flows expected
to be generated from the use and eventual disposition of that asset group when events or changes in circumstances indicate that its carrying amount may not be recoverable. If the carrying amount of the
asset group is not recoverable, the fair value of the asset
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group is measured and if the carrying amount exceeds the fair value, an impairment loss is recognized. See Note 12, “Goodwill and Other Intangibles.”
Pension Plans and Other Postretirement Benefits
Under authoritative accounting standards, assumptions are made regarding the valuation of benefit obligations and the performance of plan assets. As required, we recognize a balance sheet asset or
liability for each of our pension and other postretirement benefit (“OPEB”) plans equal to the plan’s funded status as of the measurement date. The primary assumptions are as follows:
• Discount Rate—The discount rate is used in calculating the present value of benefits, which is based on projections of benefit payments to be made in the future.
•
•
Expected Return on Plan Assets—We project the future return on plan assets based on prior performance and future expectations for the types of investments held by the plans, as well as the
expected long-term allocation of plan assets for these investments. These projected returns reduce the net benefit costs recorded currently.
Rate of Compensation Increase—For salary-related plans, we project employees’ annual pay increases, which are used to project employees’ pension benefits at retirement.
• Mortality Assumptions—Assumptions about life expectancy of plan participants are used in the measurement of related plan obligations.
Actuarial gains and losses are recognized annually in our consolidated statements of income in the fourth quarter and whenever a plan is determined to qualify for a remeasurement during a fiscal
year. The remaining components of pension and OPEB plan expense, primarily service cost, interest cost and expected return on assets, are recorded on a monthly basis. The market-related value of assets
equals the actual market value as of the date of measurement.
During 2021, we made changes to assumptions related to discount rates and expected rates of return on plan assets. We consider available information that we deem relevant when selecting each of
these assumptions.
In selecting the discount rates for the U.S. plans, we consider expected benefit payments on a plan-by-plan basis. As a result, the Company uses different discount rates for each plan depending on the
demographics of participants and the expected timing of benefit payments. For 2021, the discount rates were calculated using the results from a bond matching technique developed by Milliman, which
matched the future estimated annual benefit payments of each respective plan against a portfolio of bonds of high quality to determine the discount rate. We believe our selected discount rates are
determined using preferred methodology under authoritative accounting guidance and accurately reflect market conditions as of the December 31, 2021 measurement date.
In selecting the discount rates for the foreign plans, we look at long-term yields on AA-rated corporate bonds when available. Our actuaries have developed yield curves based on the yields on the
constituent bonds in the various indices as well as on other market indicators such as swap rates, particularly at the longer durations. For the Eurozone, we apply the Aon Hewitt yield curve to projected
cash flows from the relevant plans to derive the discount rate. For the United Kingdom (“U.K.”), the discount rate is determined by applying the Aon Hewitt yield curve for typical schemes of similar
duration to projected cash flows of Albemarle’s U.K. plan. In other countries where there is not a sufficiently deep market of high-quality corporate bonds, we set the discount rate by referencing the yield
on government bonds of an appropriate duration.
In estimating the expected return on plan assets, we consider past performance and future expectations for the types of investments held by the plan as well as the expected long-term allocation of
plan assets to these investments. In projecting the rate of compensation increase, we consider past experience in light of movements in inflation rates.
For the purpose of measuring our U.S. pension and OPEB obligations at December 31, 2021 and 2020, we used the Pri-2012 Mortality Tables along with the MP-2021 and MP-2020 Mortality
Improvement Scale, respectively, published by the SOA.
Stock-based Compensation Expense
The fair value of restricted stock awards, restricted stock unit awards and performance unit awards with a service condition are determined based on the number of shares or units granted and the
quoted price of our common stock on the date of grant, and the fair value of stock options is determined using the Black-Scholes valuation model. The fair value of performance unit awards with a service
condition and a market condition are estimated on the date of grant using a Monte Carlo simulation model. The fair value of these awards is determined after giving effect to estimated forfeitures. Such
value is recognized as expense over the service period, which is generally the vesting period of the equity grant. To the extent restricted
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stock awards, restricted stock unit awards, performance unit awards and stock options are forfeited prior to vesting in excess of the estimated forfeiture rate, the corresponding previously recognized
expense is reversed as an offset to operating expenses.
Income Taxes
We use the liability method for determining our income taxes, under which current and deferred tax liabilities and assets are recorded in accordance with enacted tax laws and rates. Under this
method, the amounts of deferred tax liabilities and assets at the end of each period are determined using the tax rate expected to be in effect when taxes are actually paid or recovered. Future tax benefits are
recognized to the extent that realization of such benefits is more likely than not. In order to record deferred tax assets and liabilities, we are following guidance under Financial Accounting Standards Board
(“FASB”) ASU 2015-17, which requires deferred tax assets and liabilities to be classified as noncurrent on the balance sheet, along with any related valuation allowance. Tax effects are released from
Accumulated Other Comprehensive Income using either the specific identification approach or the portfolio approach based on the nature of the underlying item.
Deferred income taxes are provided for the estimated income tax effect of temporary differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities.
Deferred tax assets are also provided for operating losses, capital losses and certain tax credit carryovers. A valuation allowance, reducing deferred tax assets, is established when it is more likely than not
that some portion or all of the deferred tax assets will not be realized. The realization of such deferred tax assets is dependent upon the generation of sufficient future taxable income of the appropriate
character. Although realization is not assured, we do not establish a valuation allowance when we believe it is more likely than not that a net deferred tax asset will be realized.
We only recognize a tax benefit after concluding that it is more likely than not that the benefit will be sustained upon audit by the respective taxing authority based solely on the technical merits of the
associated tax position. Once the recognition threshold is met, we recognize a tax benefit measured as the largest amount of the tax benefit that, in our judgment, is greater than 50% likely to be realized.
Under current accounting guidance for uncertain tax positions, interest and penalties related to income tax liabilities are included in Income tax expense on the consolidated statements of income.
We have designated the undistributed earnings of a portion of our foreign operations as indefinitely reinvested and as a result we do not provide for deferred income taxes on the unremitted earnings
of these subsidiaries. Our foreign earnings are computed under U.S. federal tax earnings and profits, or E&P, principles. In general, to the extent our financial reporting book basis over tax basis of a foreign
subsidiary exceeds these E&P amounts, deferred taxes have not been provided as they are essentially permanent in duration. The determination of the amount of such unrecognized deferred tax liability is
not practicable. We provide for deferred income taxes on our undistributed earnings of foreign operations that are not deemed to be indefinitely invested. We will continue to evaluate our permanent
investment assertion taking into consideration all relevant and current tax laws.
Accumulated Other Comprehensive Loss
Accumulated other comprehensive loss comprises principally foreign currency translation adjustments, amounts related to the revaluation of our euro-denominated senior notes which were
designated as a hedge of our net investment in foreign operations in 2014, a realized loss on a forward starting interest rate swap entered into in 2014 which was designated as a cash flow hedge, gains or
losses on foreign currency cash flow hedges designated as effective hedging instruments, and deferred income taxes related to the aforementioned items.
Foreign Currency Translation
The assets and liabilities of all foreign subsidiaries were prepared in their respective functional currencies and translated into U.S. Dollars based on the current exchange rate in effect at the balance
sheet dates, while income and expenses were translated at average exchange rates for the periods presented. Translation adjustments are reflected as a separate component of equity.
Foreign exchange transaction and revaluation gains (losses) were $0.1 million, ($28.8) million and ($27.4) million for the years ended December 31, 2021, 2020 and 2019, respectively, and are
included in Other expenses, net, in our consolidated statements of income, with the unrealized portion included in Other, net, in our consolidated statements of cash flows.
Derivative Financial Instruments
We manage our foreign currency exposures by balancing certain assets and liabilities denominated in foreign currencies and through the use of foreign currency forward contracts from time to time,
which generally expire within one year. The
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principal objective of such contracts is to minimize the financial impact of changes in foreign currency exchange rates. While these contracts are subject to fluctuations in value, such fluctuations are
generally expected to be offset by changes in the value of the underlying foreign currency exposures being hedged. Gains or losses under foreign currency forward contracts that have been designated as an
effective hedging instrument under ASC 815, Derivatives and Hedging will be recorded in Accumulated other comprehensive loss beginning on the date of designation. All other gains and losses on
foreign currency forward contracts not designated as an effective hedging instrument are recognized currently in Other expenses, net, and generally do not have a significant impact on results of operations.
We may also enter into interest rate swaps, collars or similar instruments from time to time, with the objective of reducing interest rate volatility relating to our borrowing costs.
The counterparties to these contractual agreements are major financial institutions with which we generally have other financial relationships. We are exposed to credit loss in the event of
nonperformance by these counterparties. However, we do not anticipate nonperformance by the counterparties. We do not utilize financial instruments for trading or other speculative purposes. In the fourth
quarter of 2019, we entered into a foreign currency forward contract to hedge the cash flow exposure of non-functional currency purchases during the construction of the Kemerton plant in Australia and
designated it as an effective hedging instrument under ASC 815, Derivatives and Hedging. All other foreign currency forward contracts outstanding at December 31, 2021 and 2020 have not been
designated as hedging instruments under ASC 815, Derivatives and Hedging.
Recently Issued Accounting Pronouncements
In December 2019, the FASB issued accounting guidance that simplifies the accounting for income taxes by removing certain exceptions to the general principles in Accounting Standards
Codification (“ASC”) Topic 740. The amendments also improve consistent application of and simplify U.S. GAAP for other areas of ASC Topic 740 by clarifying and amending existing guidance. This
guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. This guidance became effective on January 1, 2021 and did not have a significant
impact on the consolidated financial statements.
In March 2020, the FASB issued accounting guidance that provides optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by
reference rate reform if certain criteria are met. The guidance applies only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be
discontinued because of reference rate reform. In January 2021, the FASB issued additional accounting guidance which clarifies that certain optional expedients and exceptions apply to derivatives that are
affected by the discounting transition. The guidance under both FASB issuances is effective March 12, 2020 through December 31, 2022. The Company currently does not expect this guidance to have a
significant impact on its consolidated financial statements.
In November 2021, the FASB issued accounting guidance that requires disclosures about government assistance in the notes to the financial statements. This guidance will require the disclosure of:
(1) the types of government assistance received; (2) the accounting for such assistance; and (3) the effect of the assistance on a business entity’s financial statements. This guidance is effective for financial
statements issued for annual periods beginning after December 15, 2021. The Company currently does not expect this guidance to have a significant impact on its annual financial statement disclosures.
NOTE 2—Acquisitions:
Guangxi Tianyuan New Energy Materials Acquisition
On September 30, 2021, the Company signed a definitive agreement to acquire all of the outstanding equity of Guangxi Tianyuan New Energy Materials Co., Ltd. (“Tianyuan”), for approximately
$200 million in cash. Tianyuan's operations include a recently constructed lithium processing plant strategically positioned near the Port of Qinzhou in Guangxi. The plant has designed annual conversion
capacity of up to 25,000 metric tons of lithium carbonate equivalent (“LCE”) and is capable of producing battery-grade lithium carbonate and lithium hydroxide. The plant is currently in the commissioning
stage and is expected to begin commercial production in the first half of 2022. The Company expects the transaction, which is subject to customary closing conditions, to close in the first half of 2022.
Wodgina Acquisition
On October 31, 2019, we completed the previously announced acquisition of a 60% interest in MRL’s Wodgina Project for a total purchase price of approximately $1.3 billion. The purchase price is
comprised of $820 million in cash and the transfer of 40% interest in certain lithium hydroxide conversion assets being built by Albemarle in Kemerton, Western Australia, originally valued at $480
million. The cash consideration was initially funded by the 2019 Credit Facility entered into
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on August 14, 2019; see Note 14, “Long-Term Debt,” for further details. During the fourth quarter of 2021, the Company revised its estimate of the obligation to construct these lithium hydroxide
conversion assets due to anticipated cost overruns from supply chain, labor and COVID-19 pandemic related issues. Consequently, a $132.4 million expense is included in Gain on sale of business/interest
in properties, net, within operating income for the year ended December 31, 2021, with a corresponding obligation recorded in Accrued liabilities.
During the year ended December 31, 2020, we paid $22.6 million of agreed upon purchase price adjustments. The stamp duty levied on the assets purchased of $61.5 million, originally recorded as an
expense based on an estimated calculation during the year ended December 31, 2019, was paid during the year ended December 31, 2020 and is included in Change in working capital on the consolidated
statement of cash flows.
In addition, we have formed an unincorporated joint venture with MRL, MARBL, for the exploration, development, mining, processing and production of lithium and other minerals from the
Wodgina Project and for the operation of the Kemerton assets. We are entitled to a pro rata portion of 60% of all minerals (other than iron ore and tantalum) recovered from the tenements and produced by
the joint venture. The joint venture is unincorporated with each investor holding an undivided interest in each asset and proportionately liable for each liability; therefore our proportionate share of assets,
liabilities, revenue and expenses are included in the appropriate classifications in the consolidated financial statements. As part of this acquisition, MARBL Lithium Operations Pty. Ltd. (the “Manager”),
an incorporated joint venture, has been formed to manage the Wodgina Project. We will consolidate our 60% ownership interest in the Manager in our consolidated financial statements.
This acquisition provides access to a high-quality hard rock lithium source, further diversifying our global lithium resource base, and strengthens our position by increasing capacity to support future
market demand. Since its acquisition in 2019, the Wodgina mine idled production of spodumene until the market demand supported bringing the mine back into production. MARBL recently announced its
intention to resume spodumene concentrate production at this site, with the production restart expected during the second quarter of 2022.
The results of our 60% ownership interest in MARBL are reported within the Lithium segment. Included in Net income attributable to Albemarle Corporation for the years ended December 31, 2021
and 2020 and the period November 1 through December 31, 2019 were losses of approximately $32.8 million, $20.1 million and $73.0 million, respectively, attributable to the joint venture. Included in the
loss recorded in 2019 was an estimated loss of $64.8 million related to the stamp duties levied on the assets purchased. The adjustment to the final amount of stamp duties levied was recorded, and the full
amount was paid, during the year ended December 31, 2020 as noted above. There were no net sales attributable to the joint venture during these periods. Pro forma financial information of the combined
entities for periods prior to the acquisition is not presented due to the immaterial impact of the Net Sales and Net Income of the Wodgina Project on our consolidated statements of income.
Acquisition and integration related costs
Acquisition and integration related costs for the years ended December 31, 2021, 2020 and 2019 of $12.7 million, $17.3 million and $20.7 million were included primarily in Selling, general and
administrative expenses, respectively, on our consolidated statements of income. These include costs for the Tianyuan and Wodgina acquisitions noted above, as well as various other completed or potential
acquisitions and divestitures.
NOTE 3—Divestitures:
On June 1, 2021, the Company completed the sale of its fine chemistry services (“FCS”) business to W. R. Grace & Co. (“Grace”) for proceeds of approximately $570 million, consisting of
$300 million in cash and the issuance to Albemarle of preferred equity of a Grace subsidiary having an aggregate stated value of $270 million. The preferred equity can be redeemed at Grace’s option under
certain conditions and will accrue payment-in-kind (“PIK”) dividends at an annual rate of 12% beginning two years after issuance.
As part of the transaction, Grace acquired our manufacturing facilities located in South Haven, Michigan and Tyrone, Pennsylvania. The sale of the FCS business reflects the Company’s commitment
to investing in its core, growth-oriented business segments. During the year ended December 31, 2021 we recorded a gain of $428.4 million ($330.9 million after taxes) related to the sale of this business.
We determined that this business met the assets held for sale criteria in accordance with ASC 360, Property, Plant and Equipment during the first quarter of 2021. The results of operations of the
business classified as held for sale are included in the consolidated statements of income through June 1, 2021. This business did not qualify for discontinued operations treatment because the Company’s
management does not consider the sale as representing a strategic shift that had or will have a major effect on the Company’s operations and financial results.
89
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4—Supplemental Cash Flow Information:
Supplemental information related to the consolidated statements of cash flows is as follows (in thousands):
Cash paid during the year for:
Income taxes (net of refunds of $32,677, $25,991 and $7,438 in 2021, 2020 and 2019,
respectively)
(a)
Interest (net of capitalization)
Supplemental non-cash disclosures related to investing activities:
Capital expenditures included in Accounts payable
Non-cash proceeds from divestitures
(b)
2021
Year Ended December 31,
2020
2019
$
$
$
$
130,840
27,734
165,677
244,530
$
$
$
$
52,103
66,379
139,120
—
$
$
$
$
170,450
45,532
199,451
—
(a) Cash paid for income tax during the year ended December 31, 2021 include a $45.0 million payment in the U.S. primarily resulting from the proceeds on the sale of the FCS business.
(b) Fair value of preferred equity of a Grace subsidiary received as part of proceeds for the sale of our FCS business. See Note 3, “Divestitures,” for further details.
As part of the purchase price paid for the acquisition of a 60% interest in MRL’s Wodgina Project, the Company transferred $135.9 million, $179.4 million and $164.7 million of its construction in
progress of the designated Kemerton assets during the years ended December 31, 2021, 2020 and 2019, respectively, representing MRL’s 40% interest in the assets. Since the acquisition, the Company has
transferred the full $480 million of construction in progress to MRL, as defined in the purchase agreement. In the fourth quarter of 2021, the Company recorded a $132.4 million expense related to
anticipated cost overruns of the designated Kemerton assets. See Note 2, “Acquisitions,” for further details. The cash outflow for these assets is recorded in Capital expenditures within Cash flows from
investing activities on the consolidated statements of cash flows. The non-cash transfer of these assets is recorded in Other, net within Cash flows from operating activities on the consolidated statements of
cash flows.
Other, net within Cash flows from operating activities on the consolidated statements of cash flows for the years ended December 31, 2021, 2020 and 2019 included $28.7 million, $30.4 million and
$14.3 million, respectively, representing the reclassification of the current portion of the one-time transition tax resulting from the enactment of the Tax Cuts and Jobs Act (“TCJA”) in 2017, from Other
noncurrent liabilities to Income taxes payable within current liabilities. For additional information, see Note 21, “Income Taxes.” In addition, included in Other, net for the years ended December 31, 2021,
2020 and 2019 is ($0.1) million, $28.8 million and $27.4 million, respectively, related to (gains) losses on fluctuations in foreign currency exchange rates.
90
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5—Earnings Per Share:
Basic and diluted earnings per share are calculated as follows (in thousands, except per share amounts):
Basic earnings per share
Numerator:
Net income attributable to Albemarle Corporation
Denominator:
Weighted-average common shares for basic earnings per share
Basic earnings per share
Diluted earnings per share
Numerator:
Net income attributable to Albemarle Corporation
Denominator:
Weighted-average common shares for basic earnings per share
Incremental shares under stock compensation plans
Weighted-average common shares for diluted earnings per share
Diluted earnings per share
2021
Year Ended December 31,
2020
2019
$
$
$
$
123,672
115,841
1.07
123,672
115,841
695
116,536
1.06
$
$
$
$
375,764
106,402
3.53
375,764
106,402
406
106,808
3.52
$
$
$
$
533,228
105,949
5.03
533,228
105,949
372
106,321
5.02
Included in the calculation of basic earnings per share are unvested restricted stock awards that contain nonforfeitable rights to dividends. At December 31, 2021, there were 3,875 unvested shares of
restricted stock awards outstanding.
We have the authority to issue 15 million shares of preferred stock in one or more classes or series. As of December 31, 2021, no shares of preferred stock have been issued.
On February 8, 2021, we completed an underwritten public offering of 8,496,773 shares of our common stock, par value $0.01 per share, at a price to the public of $153.00 per share. The Company
also granted to the Underwriters an option to purchase up to an additional 1,274,509 shares for a period of 30 days, which was exercised. The total gross proceeds from this offering were approximately
$1.5 billion, before deducting expenses, underwriting discounts and commissions.
In November 2016, our Board of Directors authorized an increase in the number of shares the Company is permitted to repurchase under our share repurchase program, pursuant to which the
Company is now permitted to repurchase up to a maximum of 15 million shares, including those previously authorized but not yet repurchased.
There were no shares of the Company’s common stock repurchased during the year ended December 31, 2021, 2020 or 2019. As of December 31, 2021, there were 7,396,263 remaining shares
available for repurchase under the Company’s authorized share repurchase program.
NOTE 6—Other Accounts Receivable:
Other accounts receivable consist of the following at December 31, 2021 and 2020 (in thousands):
Value added tax/consumption tax
Other
Total
December 31,
2021
2020
$
$
35,758
30,426
66,184
$
$
45,309
16,649
61,958
91
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7—Inventories:
The following table provides a breakdown of inventories at December 31, 2021 and 2020 (in thousands):
Finished goods
Raw materials and work in process
Stores, supplies and other
(a)
Total
December 31,
2021
2020
$
$
473,836
259,221
79,863
812,920
$
$
454,162
219,896
76,179
750,237
(a)
Included $149.4 million and $129.6 million at December 31, 2021 and 2020, respectively, of work in process in our Lithium segment.
Approximately 6% and 8% of our inventories are valued using the last-in, first-out (“LIFO”) method at December 31, 2021 and 2020, respectively. The portion of our domestic inventories stated on
the LIFO basis amounted to $51.2 million and $62.2 million at December 31, 2021 and 2020, respectively, which are below replacement cost by approximately $45.3 million and $29.7 million,
respectively.
NOTE 8—Other Current Assets:
Other current assets consist of the following at December 31, 2021 and 2020 (in thousands):
Income tax receivables
Prepaid expenses
Other
Total
NOTE 9—Property, Plant and Equipment:
Property, plant and equipment, at cost, consist of the following at December 31, 2021 and 2020 (in thousands):
Land
Land improvements
Buildings and improvements
(a)
Machinery and equipment
Mineral rights and reserves
Construction in progress
Total
December 31,
2021
2020
$
$
76,952
49,933
5,798
132,683
$
$
45,031
57,531
13,865
116,427
Useful
Lives
(Years)
—
10 – 30
10 – 50
2 – 45
7 – 60
—
December 31,
2021
2020
$
$
117,703
112,374
383,879
3,619,712
1,783,691
2,057,387
8,074,746
$
$
121,330
115,693
354,679
3,564,389
1,780,236
1,491,314
7,427,641
(a) Consists primarily of (1) short-lived production equipment components, office and building equipment and other equipment with estimated lives ranging 2 – 7 years, (2) production process equipment (intermediate
components) with estimated lives ranging 8 – 19 years, (3) production process equipment (major unit components) with estimated lives ranging 20 – 29 years, and (4) production process equipment (infrastructure and other)
with estimated lives ranging 30 – 45 years.
The cost of property, plant and equipment is depreciated generally by the straight-line method. Depletion of mineral rights is based on the units-of-production method. Depreciation expense, including
depletion, amounted to $225.6 million, $203.6 million and $183.3 million during the years ended December 31, 2021, 2020 and 2019, respectively. Interest capitalized on significant capital projects in
2021, 2020 and 2019 was $50.0 million, $30.4 million and $30.2 million, respectively.
92
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10—Investments:
Investments include our share of unconsolidated joint ventures, nonmarketable securities and marketable equity securities. The following table details our investment balances at December 31, 2021
and 2020 (in thousands):
Joint ventures
Available for sale debt securities
Nonmarketable securities
Marketable equity securities
Total
Our ownership positions in significant unconsolidated investments are shown below:
*
*
*
*
*
Windfield Holdings Pty. Ltd. - a joint venture with Sichuan Tianqi Lithium Industries, Inc., that mines lithium ore and
produces lithium concentrate
Nippon Aluminum Alkyls - a joint venture with Mitsui Chemicals, Inc. that produces aluminum alkyls
Nippon Ketjen Company Limited - a joint venture with Sumitomo Metal Mining Company Limited that produces refinery
catalysts
Eurecat S.A. - a joint venture with Axens Group for refinery catalysts regeneration services
Fábrica Carioca de Catalisadores S.A. - a joint venture with Petrobras Quimica S.A. - PETROQUISA that produces catalysts
and includes catalysts research and product development activities
December 31,
2021
2020
593,344
246,517
20,660
37,187
897,708
$
$
604,964
—
14,171
37,109
656,244
2021
December 31,
2020
2019
%
%
%
%
%
49
50
50
50
50
%
%
%
%
%
49
50
50
50
50
%
%
%
%
%
$
$
49
50
50
50
50
Our investment in the significant unconsolidated joint ventures above amounted to $575.3 million and $587.6 million as of December 31, 2021 and 2020, respectively, and the amount included in
Equity in net income of unconsolidated investments (net of tax) in the consolidated statements of income totaled $94.9 million, $126.0 million and $128.0 million for the years ended December 31, 2021,
2020 and 2019, respectively. Undistributed earnings attributable to our significant unconsolidated investments represented approximately $271.9 million and $255.4 million of our consolidated retained
earnings at December 31, 2021 and 2020, respectively. All of the unconsolidated joint ventures in which we have investments are private companies and accordingly do not have a quoted market price
available.
The following summary lists the assets, liabilities and results of operations for our significant unconsolidated joint ventures presented herein (in thousands):
Summary of Balance Sheet Information:
Current assets
Noncurrent assets
Total assets
Current liabilities
Noncurrent liabilities
Total liabilities
93
December 31,
2021
2020
$
$
$
$
485,730
1,590,958
2,076,688
209,621
739,599
949,220
$
$
$
$
449,441
1,590,204
2,039,645
116,136
769,114
885,250
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Summary of Statements of Income Information:
Net sales
Gross profit
Income before income taxes
Net income
2021
Year Ended December 31,
2020
2019
$
$
$
$
827,848
443,129
269,788
187,084
$
$
$
$
597,082
266,026
225,436
157,628
$
$
$
$
910,891
496,150
384,690
229,733
We have evaluated each of the unconsolidated investments pursuant to current accounting guidance and none qualify for consolidation. Dividends received from our significant unconsolidated
investments were $78.4 million, $87.4 million and $71.0 million in 2021, 2020 and 2019, respectively.
At December 31, 2021 and 2020, the carrying amount of our investments in unconsolidated joint ventures differed from the amount of underlying equity in net assets by approximately $30.4 million
and $32.1 million, respectively. These amounts represent the differences between the value of certain assets of the joint ventures and our related valuation on a U.S. GAAP basis.
The Company holds a 49% equity interest in Windfield Holdings Pty. Ltd. (“Windfield”), which we acquired in the Rockwood acquisition. With regards to the Company’s ownership in Windfield, the
parties share risks and benefits disproportionate to their voting interests. As a result, the Company considers Windfield to be a variable interest entity (“VIE”). However, the Company does not consolidate
Windfield as it is not the primary beneficiary. The carrying amount of our 49% equity interest in Windfield, which is our most significant VIE, was $462.3 million and $479.6 million at December 31, 2021
and December 31, 2020, respectively. The Company’s aggregate net investment in all other entities which it considers to be VIEs for which the Company is not the primary beneficiary was $8.0 million and
$8.0 million at December 31, 2021 and December 31, 2020, respectively. Our unconsolidated VIEs are reported in Investments in the consolidated balance sheets. The Company does not guarantee debt for,
or have other financial support obligations to, these entities, and its maximum exposure to loss in connection with its continuing involvement with these entities is limited to the carrying value of the
investments.
In the fourth quarter of 2020, the Company divested its ownership interest in the Saudi Organometallic Chemicals Company LLC (“SOCC”) joint venture for cash proceeds of $11.0 million. As a
result of this divestiture, the Company recorded a gain of $7.2 million in Other expenses, net during the year ended December 31, 2020.
The Company holds a 50% equity interest in Jordan Bromine Company Limited (“JBC”), reported in the Bromine segment. The Company consolidates this venture as it is considered the primary
beneficiary due to its operational and financial control.
On October 31, 2019, the Company completed the acquisition of 60% interest in MRL’s Wodgina Project and formed an unincorporated joint venture with MRL. The joint venture is unincorporated
with each investor holding an undivided interest in each asset and proportionately liable for each liability; therefore our proportionate share of assets, liabilities, revenue and expenses are included in the
appropriate classifications in the consolidated financial statements. See Note 2, “Acquisitions,” for additional information.
On June 1, 2021, the Company completed the sale of its FCS business to Grace for proceeds of approximately $570 million, consisting of $300 million in cash and the issuance to Albemarle of
preferred equity of a Grace subsidiary having an aggregate stated value of $270 million. The preferred equity can be redeemed at Grace’s option under certain conditions and will accrue PIK dividends at an
annual rate of 12% beginning June 1, 2023, two years after issuance. The fair value of this preferred equity was $246.5 million at December 31, 2021.
We maintain a Benefit Protection Trust (the “Trust”) that was created to provide a source of funds to assist in meeting the obligations of our Executive Deferred Compensation Plan (“EDCP”), subject
to the claims of our creditors in the event of our insolvency. Assets of the Trust, in conjunction with our EDCP, are accounted for as trading securities in accordance with authoritative accounting guidance.
The assets of the Trust consist primarily of mutual fund investments and are marked-to-market on a monthly basis through the consolidated statements of income. At December 31, 2021 and 2020, these
marketable securities amounted to $32.5 million and $32.4 million, respectively.
94
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11—Other Assets:
Other assets consist of the following at December 31, 2021 and 2020 (in thousands):
(a)
Deferred income taxes
Assets related to unrecognized tax benefits
Operating leases
Other
Total
(b)
(a)
December 31,
2021
2020
$
$
18,797
32,868
154,741
45,833
252,239
$
$
20,317
24,112
136,292
38,547
219,268
(a) See Note 1, “Summary of Significant Accounting Policies” and Note 21, “Income Taxes.”
(b) See Note 18, “Leases.”
NOTE 12—Goodwill and Other Intangibles:
The following table summarizes the changes in goodwill by reportable segment for the years ended December 31, 2021 and 2020 (in thousands):
Balance at December 31, 2019
(a)
Acquisitions
Foreign currency translation adjustments and other
Balance at December 31, 2020
(b)
Divestitures
Foreign currency translation adjustments and other
Balance at December 31, 2021
Lithium
Bromine
Catalysts
(c)
All Other
Total
$
$
1,370,846
4,585
66,350
1,441,781
—
(47,599)
1,394,182
$
$
20,319
—
—
20,319
—
—
20,319
$
$
181,034
—
15,800
196,834
—
(13,708)
183,126
$
$
6,586
—
—
6,586
(6,586)
—
—
$
$
1,578,785
4,585
82,150
1,665,520
(6,586)
(61,307)
1,597,627
(a) Amount recorded during the year ended December 31, 2020 represents the finalization of the purchase price adjustments for the Wodgina Project acquisition during the one-year measurement period. See Note 2,
“Acquisitions,” for additional information.
(b) Represents goodwill of the FCS business. See Note 3, “Divestitures,” for additional information.
(c) Balance at December 31, 2021 and 2020 consists of goodwill related to Refining Solutions (composed of our clean fuels technologies (“CFT”) and fluidized catalytic cracking (“FCC”) catalysts and additives businesses) of
$176.0 million and $189.8 million, respectively, and performance catalyst solutions (“PCS”) of $7.1 million and $7.0 million, respectively.
95
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Other intangibles consist of the following at December 31, 2021 and 2020 (in thousands):
Customer Lists and
Relationships
Trade Names and
(b)
Trademarks
Patents and
Technology
Other
Total
Gross Asset Value
Balance at December 31, 2019
Foreign currency translation adjustments and other
Balance at December 31, 2020
(a)
Divestitures
Foreign currency translation adjustments and other
Balance at December 31, 2021
Accumulated Amortization
Balance at December 31, 2019
Amortization
Foreign currency translation adjustments and other
Balance at December 31, 2020
Amortization
(a)
Divestitures
Foreign currency translation adjustments and other
Balance at December 31, 2021
Net Book Value at December 31, 2020
Net Book Value at December 31, 2021
$
$
$
$
$
$
422,462
26,286
448,748
—
(20,369)
428,379
(116,749)
(22,575)
(7,962)
(147,286)
(22,982)
—
6,985
(163,283)
301,462
265,096
$
$
$
$
$
$
18,087
623
18,710
—
(827)
17,883
(7,938)
—
(238)
(8,176)
—
—
193
(7,983)
10,534
9,900
$
$
$
$
$
$
55,020
3,076
58,096
—
(783)
57,313
(36,197)
(1,377)
(1,926)
(39,500)
(1,461)
—
1,165
(39,796)
18,596
17,517
$
$
$
$
$
$
41,282
(1,418)
39,864
(1,473)
(1,686)
36,705
(21,345)
(970)
964
(21,351)
(891)
1,457
514
(20,271)
18,513
16,434
$
$
$
$
$
$
536,851
28,567
565,418
(1,473)
(23,665)
540,280
(182,229)
(24,922)
(9,162)
(216,313)
(25,334)
1,457
8,857
(231,333)
349,105
308,947
(a) Represents other intangibles of the FCS business. See Note 3, “Divestitures,” for additional information.
(b) Net Book Value includes only indefinite-lived intangible assets.
Useful lives range from 13 – 25 years for customer lists and relationships; 8 – 20 years for patents and technology; and primarily 5 – 25 years for other.
Amortization of other intangibles amounted to $25.3 million, $24.9 million and $27.1 million for the years ended December 31, 2021, 2020 and 2019, respectively. Included in amortization for the
years ended December 31, 2021, 2020 and 2019 is $19.3 million, $19.1 million and $19.5 million, respectively, of amortization using the pattern of economic benefit method.
Total estimated amortization expense of other intangibles for the next five fiscal years is as follows (in thousands):
2022
2023
2024
2025
2026
Estimated Amortization
Expense
$
$
$
$
$
24,365
23,797
23,201
22,479
21,958
96
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13—Accrued Expenses:
Accrued expenses consist of the following at December 31, 2021 and 2020 (in thousands):
Employee benefits, payroll and related taxes
Settlement for legacy Rockwood legal matter
Wodgina Project acquisition consideration obligation
Other
Total
(a)
(c)
(b)
December 31,
2021
2020
$
$
100,718
332,500
132,400
197,675
763,293
$
$
102,711
—
137,092
200,960
440,763
(a) Remaining balance to be paid to Huntsman for settlement of a legacy Rockwood legal dispute prior to the acquisition of Rockwood in 2015. See Note 17, “Commitments and Contingencies,” for further details.
(b) Represents the 40% interest in the Kemerton assets, which are under construction, expected to be transferred to MRL in the next twelve months as part of the consideration paid for the Wodgina Project acquisition. See Note
2, “Acquisitions,” for further details.
(c) Other accrued expenses represent balances such as operating lease liabilities, environmental reserves, asset retirement obligations, pension obligations, interest, utilities, other taxes, among other liabilities, expected to be
paid within the next 12 months. No individual component exceeds 5% of total current liabilities.
NOTE 14—Long-Term Debt:
Long-term debt consisted of the following at December 31, 2021 and 2020 (in thousands):
1.125% notes due 2025
1.625% notes due 2028
1.875% Senior notes due 2021
3.45% Senior notes due 2029
4.15% Senior notes due 2024
5.45% Senior notes due 2044
Floating rate notes
Credit facilities
Commercial paper notes
Variable-rate foreign bank loans
Finance lease obligations
Unamortized discount and debt issuance costs
Total long-term debt
Less amounts due within one year
Long-term debt, less current portion
December 31,
2021
2020
$
$
426,571
565,550
—
171,612
425,000
350,000
—
—
388,500
5,226
75,431
(13,651)
2,394,239
389,920
2,004,319
$
$
610,800
610,800
480,007
300,000
425,000
350,000
200,000
223,900
325,000
7,702
59,181
(20,332)
3,572,058
804,677
2,767,381
Aggregate annual maturities of long-term debt as of December 31, 2021 are as follows (in millions): 2022—$389.9; 2023—$0.0; 2024—$425.0; 2025—$426.6; 2026—$0.0; thereafter—$1,166.4.
In the first quarter of 2021, the Company made the following debt principal payments using proceeds from the February 2021 underwritten public offering of common stock:
• €123.8 million of the 1.125% notes due in November 2025
• €393.0 million, the remaining balance, of the 1.875% Senior notes originally due in December 2021
• $128.4 million of the 3.45% Senior notes due in November 2029
• $200.0 million, the remaining balance, of the floating rate notes originally due in November 2022
• €183.3 million, the outstanding balance, of the unsecured credit facility originally entered into on August 14, 2019, as amended and restated on December 15, 2020
97
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
• $325.0 million, the outstanding balance, of the commercial paper notes
As a result, included in Interest and financing expenses for the year ended December 31, 2021 is a loss on early extinguishment of debt of $29.0 million representing the tender premiums, fees,
unamortized discounts and unamortized deferred financing costs from the redemption of this debt.
2019 Notes
On November 25, 2019, we issued a series of notes (collectively, the “2019 Notes”) as follows:
•
•
•
•
$200.0 million aggregate principal amount of notes, bearing interest at a floating rate, which were fully repaid in the first quarter of 2021, as noted above.
€500.0 million aggregate principal amount of notes, bearing interest at a rate of 1.125% payable annually on November 25 of each year, beginning in 2020. The effective interest rate on these
notes is approximately 1.30%. These notes mature on November 25, 2025. These notes were partially repaid in the first quarter of 2021, as noted above.
€500.0 million aggregate principal amount of notes, bearing interest at a rate of 1.625% payable annually on November 25 of each year, beginning in 2020. The effective interest rate on these
notes is approximately 1.74%. These notes mature on November 25, 2028.
$300.0 million aggregate principal amount of senior notes, bearing interest at a rate of 3.45% payable semi-annually on May 15 and November 15 of each year, beginning in 2020. The effective
interest rate on these senior notes is approximately 3.58%. These senior notes mature on November 15, 2029. These notes were partially repaid in the first quarter of 2021, as noted above.
The net proceeds from the issuance of the 2019 Notes were used to repay the $1.0 billion balance of the 2019 Credit Facility (see below for further details), a large portion of approximately $370
million of commercial paper notes, the remaining balance of $175.2 million of the senior notes issued on December 10, 2010 (“2010 Senior Notes”), and for general corporate purposes. The 2010 Senior
Notes were originally due to mature on December 15, 2020 and bore interest at a rate of 4.50%. During the year ended December 31, 2019, we recorded a loss on early extinguishment of debt of $4.8
million in Interest and financing expenses, representing the tender premiums, fees, unamortized discounts and unamortized deferred financing costs from the redemption of the 2010 Senior Notes.
2014 Senior Notes
We currently have the following senior notes outstanding, initially issued in the fourth quarter of 2014:
•
•
$425.0 million aggregate principal amount of senior notes, issued on November 24, 2014, bearing interest at a rate of 4.15% payable semi-annually on June 1 and December 1 of each year,
beginning June 1, 2015. The effective interest rate on these senior notes is approximately 5.06%. These senior notes mature on December 1, 2024.
$350.0 million aggregate principal amount of senior notes, issued on November 24, 2014, bearing interest at a rate of 5.45% payable semi-annually on June 1 and December 1 of each year,
beginning June 1, 2015. The effective interest rate on these senior notes is approximately 5.50%. These senior notes mature on December 1, 2044.
On January 22, 2014, we entered into a pay fixed, receive variable rate forward starting interest rate swap, with a notional amount of $325.0 million, with J.P. Morgan Chase Bank, N.A., to be
effective October 15, 2014. Our risk management objective and strategy for undertaking this hedge was to eliminate the variability in the interest rate and partial credit spread on the 20 future semi-annual
coupon payments that we will pay in connection with our 4.15% senior notes. On October 15, 2014, the swap was settled, resulting in a payment to the counterparty of $33.4 million. This amount was
recorded in Accumulated other comprehensive loss and is being amortized to interest expense over the life of the 4.15% senior notes. The amount to be reclassified to interest expense from Accumulated
other comprehensive loss during the next twelve months is approximately $3.3 million.
Prior to repayment in the first quarter of 2021, the carrying value of the 1.875% Euro-denominated senior notes was designated as an effective hedge of our net investment in certain foreign
subsidiaries where the Euro serves as the functional currency, and gains or losses on the revaluation of these senior notes to our reporting currency were recorded in accumulated other comprehensive loss.
Upon repayment of these notes, this net investment hedge was discontinued. The balance of foreign exchange revaluation gains and losses associated with this discontinued net investment hedge will
remain within accumulated other comprehensive loss until the hedged net investment is sold or liquidated. Prior to the net investment hedge being discontinued, we recorded a gain of $5.1 million (net of
income taxes) in 2021, and during the years ended December 31, 2020
98
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
and 2019, (losses) gains of ($34.2) million and $8.4 million (net of income taxes), respectively, were recorded in accumulated other comprehensive loss.
Credit Agreements
Our revolving, unsecured credit agreement dated as of June 21, 2018, as amended on August 14, 2019 and further amended on May 11, 2020 (the “2018 Credit Agreement”), currently provides for
borrowings of up to $1.0 billion and matures on August 9, 2024. Borrowings under the 2018 Credit Agreement bear interest at variable rates based on an average LIBOR for deposits in the relevant
currency plus an applicable margin which ranges from 0.910% to 1.500%, depending on the Company’s credit rating from Standard & Poor’s Ratings Services LLC (“S&P”), Moody’s Investors Services,
Inc. (“Moody’s”) and Fitch Ratings, Inc. (“Fitch”). The applicable margin on the facility was 1.125% as of December 31, 2021. There were no borrowings outstanding under the 2018 Credit Agreement as
of December 31, 2021.
On August 14, 2019, the Company entered into an unsecured credit facility (the “2019 Credit Facility”) with several banks and other financial institutions, which was amended and restated on
December 15, 2020 and again on December 10, 2021. The lenders’ commitment to provide new loans under the amended 2019 Credit Facility permits up to four borrowings by the Company in an
aggregate amount equal to $750 million. The 2019 Credit Facility terminates on December 9, 2022, with each such loan maturing 364 days after the funding of such loan. The Company can request that the
maturity date of loans be extended for a period of up to four additional years, but any such extension is subject to the approval of the lenders. At the option of the Company the borrowings under the 2019
Credit Facility bear interest at variable rates based on an on either the base rate or LIBOR for deposits in U.S. dollars, in each case plus an applicable margin which ranges from 0.000% to 0.375% for base
rate borrowings or 0.875% to 1.375% for LIBOR borrowings, depending on the Company’s credit rating from S&P, Moody’s and Fitch. The applicable margin on the credit facility was 1.125% as of
December 31, 2021. There were no borrowings outstanding under the 2019 Credit Facility as of December 31, 2021.
Borrowings under the under the 2019 Credit Facility and 2018 Credit Agreement (together the “Credit Agreements”) are conditioned upon satisfaction of certain conditions precedent, including the
absence of defaults. The Company is subject to one financial covenant, as well as customary affirmative and negative covenants. The financial covenant requires that the Company’s consolidated net funded
debt to consolidated EBITDA ratio (as such terms are defined in the Credit Agreements) be less than or equal to 4.00:1 for the fiscal quarter ending December 31, 2021 and 3.50:1 for fiscal quarters
thereafter, subject to adjustments in accordance with the terms of the Credit Agreements relating to a consummation of an acquisition where the consideration includes cash proceeds from issuance of
funded debt in excess of $500 million. The Credit Agreements also contain customary default provisions, including defaults for non-payment, breach of representations and warranties, insolvency, non-
performance of covenants and cross-defaults to other material indebtedness. The occurrence of an event of default under the Credit Agreements could result in all loans and other obligations becoming
immediately due and payable and each such Credit Agreement being terminated. Certain representations, warranties and covenants under the 2018 Credit Agreement were conformed to those under the
2019 Credit Facility following the amendments to those agreements.
Commercial Paper Notes
On May 29, 2013, we entered into agreements to initiate a commercial paper program on a private placement basis under which we may issue unsecured commercial paper notes (the “Commercial
Paper Notes”) from time-to-time up to a maximum aggregate principal amount outstanding at any time of $750.0 million. The proceeds from the issuance of the Commercial Paper Notes are expected to be
used for general corporate purposes, including the repayment of other debt of the Company. The Credit Agreements are available to repay the Commercial Paper Notes, if necessary. Aggregate borrowings
outstanding under the Credit Agreements and the Commercial Paper Notes will not exceed the $1.75 billion current maximum amount available under the Credit Agreements. The Commercial Paper Notes
will be sold at a discount from par, or alternatively, will be sold at par and bear interest at rates that will vary based upon market conditions at the time of issuance. The maturities of the Commercial Paper
Notes will vary but may not exceed 397 days from the date of issue. The definitive documents relating to the commercial paper program contain customary representations, warranties, default and
indemnification provisions. At December 31, 2021, we had $388.5 million of Commercial Paper Notes outstanding bearing a weighted-average interest rate of approximately 0.46% and a weighted-average
maturity of 20 days.
Other
We have additional uncommitted credit lines with various U.S. and foreign financial institutions that provide for borrowings of up to approximately $239.2 million at December 31, 2021. Outstanding
borrowings under these agreements were $5.2 million and $7.7 million at December 31, 2021 and 2020, respectively. The average interest rate on borrowings under these agreements during 2021, 2020 and
2019 was approximately 0.36%.
99
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At December 31, 2021 and 2020, we had the ability and intent to refinance our borrowings under our other existing credit lines with borrowings under the Credit Agreements. Therefore, the amounts
outstanding under those credit lines, if any, are classified as long-term debt at December 31, 2021 and 2020. At December 31, 2021, we had the ability to borrow $1.36 billion under our commercial paper
program and the Credit Agreements.
We believe that as of December 31, 2021, we were, and currently are, in compliance with all of our debt covenants.
NOTE 15—Pension Plans and Other Postretirement Benefits:
We maintain various noncontributory defined benefit pension plans covering certain employees, primarily in the U.S., the U.K., Germany and Japan. We also have a contributory defined benefit plan
covering certain Belgian employees. The benefits for these plans are based primarily on compensation and/or years of service. Our U.S. and U.K. defined benefit plans for non-represented employees are
closed to new participants, with no additional benefits accruing under these plans as participants’ accrued benefits have been frozen. The funding policy for each plan complies with the requirements of
relevant governmental laws and regulations. The pension information for all periods presented includes amounts related to salaried and hourly plans.
The following provides a reconciliation of benefit obligations, plan assets and funded status, as well as a summary of significant assumptions, for our defined benefit pension plans (in thousands):
Year Ended December 31, 2021
Year Ended December 31, 2020
U.S. Pension Plans
Foreign Pension Plans
U.S. Pension Plans
Foreign Pension Plan
Change in benefit obligations:
Benefit obligation at January 1
Service cost
Interest cost
Plan amendments
Actuarial loss
Benefits paid
Employee contributions
Foreign exchange loss (gain)
Settlements/curtailments
Other
Benefit obligation at December 31
Change in plan assets:
Fair value of plan assets at January 1
Actual return on plan assets
Employer contributions
Benefits paid
Employee contributions
Foreign exchange gain
Settlements/curtailments
Other
Fair value of plan assets at December 31
Funded status at December 31
$
$
$
$
$
$
$
$
$
$
740,951
869
18,005
—
(24,576)
(54,553)
—
—
—
—
680,696
594,228
50,256
16,060
(54,553)
—
—
—
—
605,991
(74,705)
100
290,385
3,697
2,427
—
(14,769)
(10,451)
78
(14,080)
(1,998)
(55)
255,234
89,241
7,305
11,550
(10,451)
78
(1,419)
(1,998)
(50)
94,256
(160,978)
$
$
$
$
$
678,720
849
23,402
—
79,780
(41,800)
—
—
—
—
740,951
556,683
75,715
3,630
(41,800)
—
—
—
—
594,228
(146,723)
$
$
$
$
$
258,3
4,0
3,3
5
19,5
(9,9
1
19,8
(5,8
3
290,3
81,4
8,1
9,6
(9,9
1
4,
(4,2
89,2
(201,1
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Amounts recognized in consolidated balance sheets:
Current liabilities (accrued expenses)
Noncurrent liabilities (pension benefits)
Net pension liability
Amounts recognized in accumulated other comprehensive (loss)
income:
Prior service benefit
Net amount recognized
Weighted-average assumptions used to determine benefit
obligations at December 31:
Discount rate
Rate of compensation increase
$
$
$
$
December 31, 2021
December 31, 2020
U.S. Pension Plans
Foreign Pension Plans
U.S. Pension Plans
Foreign Pension Plans
$
$
$
$
(525)
(74,180)
(74,705)
—
—
2.86 %
— %
$
$
$
$
(5,972)
(155,006)
(160,978)
(773)
(773)
1.44 %
3.20 %
$
$
$
$
(1,217)
(145,506)
(146,723)
—
—
2.50 %
— %
(5,832)
(195,312)
(201,144)
(433)
(433)
0.86 %
3.82 %
The accumulated benefit obligation for all defined benefit pension plans was $928.8 million and $1.02 billion at December 31, 2021 and 2020, respectively.
Postretirement medical benefits and life insurance is provided for certain groups of U.S. retired employees. Medical and life insurance benefit costs have been funded principally on a pay-as-you-go
basis. Although the availability of medical coverage after retirement varies for different groups of employees, the majority of employees who retire before becoming eligible for Medicare can continue
group coverage by paying a portion of the cost of a monthly premium designed to cover the claims incurred by retired employees subject to a cap on payments allowed. The availability of group coverage
for Medicare-eligible retirees also varies by employee group with coverage designed either to supplement or coordinate with Medicare. Retirees generally pay a portion of the cost of the coverage. Plan
assets for retiree life insurance are held under an insurance contract and are reserved for retiree life insurance benefits. In 2005, the postretirement medical benefit available to U.S. employees was changed
to provide that employees who are under age 50 as of December 31, 2005 would no longer be eligible for a company-paid retiree medical premium subsidy. Employees who are of age 50 and above as of
December 31, 2005 and who retire after January 1, 2006 will have their retiree medical premium subsidy capped. Effective January 1, 2008, our medical insurance for certain groups of U.S. retired
employees is now insured through a medical carrier.
101
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following provides a reconciliation of benefit obligations, plan assets and funded status, as well as a summary of significant assumptions, for our postretirement benefit plans (in thousands):
Change in benefit obligations:
Benefit obligation at January 1
Service cost
Interest cost
Actuarial (gain) loss
Benefits paid
Benefit obligation at December 31
Change in plan assets:
Fair value of plan assets at January 1
Employer contributions
Benefits paid
Fair value of plan assets at December 31
Funded status at December 31
Amounts recognized in consolidated balance sheets:
Current liabilities (accrued expenses)
Noncurrent liabilities (postretirement benefits)
Net postretirement liability
Weighted-average assumptions used to determine benefit obligations at December 31:
Discount rate
Rate of compensation increase
102
Year Ended December 31,
2021
Other Postretirement
Benefits
2020
Other Postretirement
Benefits
$
$
$
$
$
51,343
123
1,238
(2,568)
(2,643)
47,493
—
2,643
(2,643)
—
(47,493)
$
$
$
$
$
55,089
105
1,871
(2,571)
(3,151)
51,343
—
3,151
(3,151)
—
(51,343)
December 31,
2021
Other Postretirement Benefits
2020
Other Postretirement Benefits
$
$
(3,800)
(43,693)
(47,493)
$
$
2.85 %
3.50 %
(3,268)
(48,075)
(51,343)
2.49 %
3.50 %
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The components of pension benefits cost (credit) are as follows (in thousands):
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Year Ended
December 31, 2019
Service cost
Interest cost
Expected
return on assets
Actuarial
loss (gain)
Amortization
of prior service
benefit
Total net
pension benefits
cost (credit)
Weighted-
average
assumption
percentages:
Discount rate
Expected
return on plan
assets
Rate of
compensation
increase
U.S. Pension Plans
$
869
18,005
(39,972)
(34,857)
—
$
Foreign Pension Plans
3,697
2,427
$
U.S. Pension Plans
849
23,402
Foreign Pension Plans
4,000
$
3,357
$
U.S. Pension Plans
730
28,199
Foreign Pension Plans
3,680
$
4,998
(3,593)
(19,494)
115
(36,957)
40,653
—
(3,274)
14,189
36
(33,926)
7,106
—
(3,837)
16,784
37
$
(55,955)
$
(16,848)
$
27,947
$
18,308
$
2,109
$
21,662
2.50
6.88
—
%
%
%
0.86
3.98
3.26
%
%
%
3.56
6.88
—
%
%
%
1.33
4.07
3.72
%
%
%
4.59
6.89
—
%
%
%
2.15
5.51
3.63
%
%
%
Effective January 1, 2022, the weighted-average expected rate of return on plan assets for the U.S. and foreign defined benefit pension plans is 6.89% and 3.85%, respectively.
The components of postretirement benefits cost (credit) are as follows (in thousands):
Service cost
Interest cost
Actuarial (gain) loss
Total net postretirement benefits (credit) cost
Weighted-average assumption percentages:
Discount rate
Rate of compensation increase
2021
Other Postretirement Benefits
$
$
123
1,238
(2,568)
(1,207)
Year Ended December 31,
2020
Other Postretirement Benefits
$
105
1,871
(2,573)
(597)
$
$
2019
Other Postretirement Benefits
$
98
2,197
5,449
7,744
2.49
3.50
%
%
3.53
3.50
%
%
4.55
3.50
%
%
All components of net benefit cost (credit), other than service cost, are included in Other expenses, net on the consolidated statements of income.
The mark-to-market actuarial gain in 2021 is primarily attributable to a higher return on pension plan assets in 2021 than was expected, as a result of overall market and investment portfolio
performance. The weighted-average actual return on our U.S. and foreign pension plan assets was 8.42% versus an expected return of 6.50%. In addition, there was an increase in the weighted-average
discount rate to 2.86% from 2.50% for our U.S. pension plans and to 1.44% from 0.86% for our foreign pension plans to reflect market conditions as of the December 31, 2021 measurement date.
The mark-to-market actuarial loss in 2020 is primarily attributable to a decrease in the weighted-average discount rate to 2.50% from 3.56% for our U.S. pension plans and to 0.86% from 1.33% for
our foreign pension plans to reflect market conditions as of the December 31, 2020 measurement date. This was partially offset by a higher return on pension plan assets in 2019 than was expected, as a
result of overall market and investment portfolio performance. The weighted-average actual return on our U.S. and foreign pension plan assets was 13.15% versus an expected return of 6.52%.
The mark-to-market actuarial loss in 2019 is primarily attributable to a decrease in the weighted-average discount rate to 3.56% from 4.59% for our U.S. pension plans and to 1.33% from 2.15% for
our foreign pension plans to reflect market conditions as of the December 31, 2019 measurement date. This was partially offset by a higher return on pension plan assets in 2019 than was expected, as a
result of overall market and investment portfolio performance. The weighted-average actual return
103
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
on our U.S. and foreign pension plan assets was 15.82% versus an expected return of 6.72%. The mark-to-market actuarial loss in 2019 was partially offset by an increase
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The
inputs used to measure fair value are classified into the following hierarchy:
Level 1
Level 2
Unadjusted quoted prices in active markets for identical assets or liabilities
Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are
not active, or inputs other than quoted prices that are observable for the asset or liability
Level 3
Unobservable inputs for the asset or liability
We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the
fair value measurement. Investments for which market quotations are readily available are valued at the closing price on the last business day of the year. Listed securities for which no sale was reported on
such date are valued at the mean between the last reported bid and asked price. Securities traded in the over-the-counter market are valued at the closing price on the last business day of the year or at bid
price. The net asset value of shares or units is based on the quoted market value of the underlying assets. The market value of corporate bonds is based on institutional trading lots and is most often
reflective of bid price. Government securities are valued at the mean between bid and ask prices. Holdings in private equity securities are typically valued using the net asset valuations provided by the
underlying private investment companies.
The following tables set forth the assets of our pension and postretirement plans that were accounted for at fair value on a recurring basis as of December 31, 2021 and 2020 (in thousands):
(a)
Pension Assets:
Domestic Equity
International Equity
Fixed Income
Absolute Return Measured at Net Asset Value
(b)
(c)
(d)
Total Pension Assets
Pension Assets:
(a)
(b)
Domestic Equity
International Equity
Fixed Income
Absolute Return Measured at Net Asset Value
Cash
(c)
(d)
Total Pension Assets
December 31, 2021
Quoted Prices in Active
Markets for Identical Items (Level
1)
Quoted Prices in Active
Markets for Similar Items (Level
2)
Unobservable Inputs (Level
3)
$
$
129,946
128,353
345,635
96,313
700,247
$
$
129,139
103,554
290,177
—
522,870
$
$
807
24,799
55,458
—
81,064
$
$
—
—
—
—
—
December 31, 2020
Quoted Prices in Active
Markets for Identical Items
(Level 1)
Quoted Prices in Active
Markets for Similar Items
(Level 2)
Unobservable Inputs (Level
3)
$
$
142,280
139,611
319,998
78,787
2,793
683,469
$
$
140,548
113,174
270,589
—
2,793
527,104
$
$
1,732
26,437
49,409
—
—
77,578
$
$
—
—
—
—
—
—
(a) Consists primarily of U.S. stock funds that track or are actively managed and measured against the S&P 500 index.
(b) Consists primarily of international equity funds which invest in common stocks and other securities whose value is based on an international equity index or an underlying equity security or basket of equity securities.
(c) Consists primarily of debt obligations issued by governments, corporations, municipalities and other borrowers. Also includes insurance policies.
(d) Consists primarily of funds with holdings in private investment companies. See additional information about the Absolute Return investments below. Holdings in private investment companies are measured at fair value
using the net asset value per share as a practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts of $96.3 million and $78.8 million as of
104
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2021 and 2020, respectively, are included in this table to permit reconciliation to the reconciliation of plan assets table above.
The Company’s pension plan assets in the U.S. and U.K. represent approximately 98% of the total pension plan assets. The investment objective of these pension plan assets is to achieve solid returns
while preserving capital to meet current plan cash flow requirements. Assets should participate in rising markets, with defensive action in declining markets expected to an even greater degree. Depending
on market conditions, the broad asset class targets may range up or down by approximately 10%. These asset classes include but are not limited to hedge fund of funds, bonds and other fixed income
vehicles, high yield fixed income securities, equities and distressed debt. At December 31, 2021 and 2020, equity securities held by our pension and OPEB plans did not include direct ownership of
Albemarle common stock.
The weighted-average target allocations as of the measurement date are as follows:
Equity securities
Fixed income
Absolute return
Target Allocation
41
50
9
%
%
%
Our Absolute Return investments consist primarily of our investments in hedge fund of funds. These are holdings in private investment companies with fair values that are based on significant
unobservable inputs including assumptions where there is little, if any, market activity for the investment. Investment managers or fund managers associated with these investments provide valuations of the
investments on a monthly basis utilizing the net asset valuation approach for determining fair values. These valuations are reviewed by the Company for reasonableness based on applicable sector,
benchmark and company performance to validate the appropriateness of the net asset values as a fair value measurement. Where available, audited financial statements are obtained and reviewed for the
investments as support for the manager’s investment valuation. In general, the investment objective of these funds is high risk-adjusted returns with an emphasis on preservation of capital. The investment
strategies of each of the funds vary; however, the objective of our Absolute Return investments is complementary to the overall investment objective of our U.S. pension plan assets.
We made contributions to our defined benefit pension and OPEB plans of $30.3 million, $16.4 million and $16.5 million during the years ended December 31, 2021, 2020 and 2019, respectively. We
expect contributions to our domestic nonqualified and foreign qualified and nonqualified pension plans to approximate $11.9 million in 2022. Also, we expect to pay approximately $3.3 million in
premiums to our U.S. postretirement benefit plan in 2022. However, we may choose to make additional voluntary pension contributions in excess of these amounts.
The current forecast of benefit payments, which reflects expected future service, amounts to (in millions):
2022
2023
2024
2025
2026
2026-2030
U.S. Pension Plans
Foreign Pension Plans
Other Postretirement
Benefits
$
$
$
$
$
$
43.3
43.8
44.0
43.9
43.6
206.2
$
$
$
$
$
$
10.9
12.0
10.8
10.5
10.8
55.6
$
$
$
$
$
$
3.3
3.2
3.2
3.1
3.1
14.4
We have a supplemental executive retirement plan (“SERP”), which provides unfunded supplemental retirement benefits to certain management or highly compensated employees. The SERP
provides for incremental pension benefits to offset the limitations imposed on qualified plan benefits by federal income tax regulations. (Credits) costs relating to our SERP were ($0.2) million, $3.8 million
and $2.2 million for the years ended December 31, 2021, 2020 and 2019, respectively. The projected benefit obligation for the SERP recognized in the consolidated balance sheets at December 31, 2021
and 2020 was $8.7 million and $23.1 million, respectively. The benefit expenses and obligations of this SERP are included in the tables above. Benefits of $1.0 million are expected to be paid to SERP
retirees in 2022. On October 1, 2012, our Board of Directors approved amendments to the SERP, such that effective December 31, 2014, no additional benefits shall accrue under this plan and participants’
accrued benefits shall be frozen as of that date to reflect the same changes as were made under the U.S. qualified defined benefit plan.
105
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
At December 31, 2021, the assumed rate of increase in the pre-65 and post-65 per capita cost of covered health care benefits for U.S. retirees was zero as the employer-paid premium caps (pre-65 and
post-65) were met starting January 1, 2013.
Defined Contribution Plans
On March 31, 2004, a new defined contribution pension plan benefit was adopted under the qualified defined contribution plan for U.S. non-represented employees hired after March 31, 2004. On
October 1, 2012 our Board of Directors approved certain plan amendments, such that effective January 1, 2013, the defined contribution pension plan benefit is expanded to include non-represented
employees hired prior to March 31, 2004, and revised the contribution for all participants to be based on 5% of eligible employee compensation. The employer portion of contributions to our U.S. defined
contribution pension plan amounted to $16.7 million, $6.9 million, and $11.5 million in 2021, 2020 and 2019, respectively. Contributions in 2021 included amounts deferred from 2020 as a result of the
Company’s plan to maintain financial flexibility during the COVID-19 pandemic.
Certain of our employees participate in our defined contribution 401(k) employee savings plan, which is generally available to all U.S. full-time salaried and non-union hourly employees and to
employees who are covered by a collective bargaining agreement that provides for such participation. This U.S. defined contribution plan is funded with contributions made by the participants and us. Our
contributions to the 401(k) plan amounted to $17.4 million, $7.5 million and $12.6 million in 2021, 2020 and 2019, respectively. Contributions in 2021 included amounts deferred from 2020 as a result of
the Company’s plan to maintain financial flexibility during the COVID-19 pandemic.
In the Netherlands, certain employees participate in a defined contribution pension plan through a Dutch insurance company. The insurance company unconditionally undertakes the legal obligation
to provide specific benefits to specific individuals in return for a fixed amount of premiums. Our obligation under this plan is limited to a variable calculated employer match for each participant plus, as
well as risk premiums and administrative costs for the overall plan. We paid approximately $9.2 million, $9.9 million and $9.7 million in 2021, 2020 and 2019, respectively, in annual premiums and related
costs pertaining to this plan.
Multiemployer Plan
Certain current and former employees participate in a multiemployer plan in Germany, the Pensionskasse Dynamit Nobel Versicherungsverein auf Gegenseitigkeit, Troisdorf (“DN Pensionskasse”)
that provides monthly payments in the case of disability, death or retirement. The risks of participating in a multiemployer plan are different from single-employer plans in the following ways: (a) assets
contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers, and (b) if a participating employer stops contributing to the plan due
to financial inability to provide funding, the unfunded obligation of the plan may be borne by remaining participating employers.
Some participants in the plan are subject to collective bargaining arrangements, which have no fixed expiration date. The contribution and benefit levels are not negotiated or significantly influenced
by these collective bargaining arrangements. Also, the benefit levels generally are not subject to reduction. Under German insurance law, the DN Pensionskasse must be fully funded at all times. The DN
Pensionskasse was fully funded as of December 31, 2019, the date of the most recently available information for the plan. This funding level would correspond to the highest funding zone status (at least
80% funded) under U.S. pension regulation. Since the plan liabilities need to be fully funded at all times according to local funding requirements, it is unlikely that the DN Pensionskasse plan will fail to
fulfill its obligations, however, in such an event, the Company is liable for the benefits of its employees, and former employees of certain divested businesses, who participate in the plan. Additional
information of the DN Pensionskasse is available in the public domain.
The majority of the Company’s contributions are tied to employees’ contributions, which are generally calculated as a percentage of base compensation, up to a certain statutory ceiling. Our normal
contributions to this plan were approximately $1.5 million, $1.5 million and $1.4 million in 2021, 2020 and 2019, respectively. The Company’s contributions represented more than 5% of total
contributions to the DN Pensionskasse in 2021.
Effective July 1, 2016, the DN Pensionskasse is subject to a financial improvement plan which expires on December 31, 2022, with the final contribution in the second quarter of 2023. This financial
improvement plan calls for increased capital reserves to avoid future underfunding risk. During the years ended December 31, 2020, 2019 and 2018, we made contributions for our employees covered under
this plan of approximately $1.3 million, $3.1 million and $1.8 million, respectively, recorded in Selling, general and administrative expenses, as a result of this financial improvement plan. The value of the
additional funding required under the financial improvement plan each year is determined upon the completion of the annual financial
106
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
statements and are payable in the second quarter of the following year. A portion of the additional funding necessary for the year will be based on an estimate prepared on September 30 of each year and
payable in the fourth quarter of that same year.
NOTE 16—Other Noncurrent Liabilities:
Other noncurrent liabilities consist of the following at December 31, 2021 and 2020 (in thousands):
(a)
Transition tax on foreign earnings
(b)
Operating leases
Liabilities related to uncertain tax positions
Executive deferred compensation plan obligation
Environmental liabilities
Asset retirement obligations
Tax indemnification liability
Other
Total
(d)
(d)
(c)
(e)
(f)
December 31,
2021
2020
$
$
234,180
126,997
27,719
32,491
37,540
76,196
66,799
61,776
663,698
$
$
273,048
116,765
14,683
32,447
36,298
74,856
30,488
50,792
629,377
(a) Noncurrent portion of one-time transition tax on foreign earnings. See Note 21, “Income Taxes,” for additional information.
(b) See Note 18, “Leases.”
(c) See Note 21, “Income Taxes.”
(d) See Note 17, “Commitments and Contingencies.”
(e)
(f) No individual component exceeds 5% of total liabilities.
Indemnification of certain income and non-income tax liabilities primarily associated with the Chemetall Surface Treatment entities sold in 2017.
NOTE 17—Commitments and Contingencies:
In the ordinary course of business, we have commitments in connection with various activities. We believe that amounts recorded are adequate for known items which might become due in the
current year. The most significant commitments are as follows:
Environmental
We had the following activity in our recorded environmental liabilities for the years ended December 31, 2021, 2020 and 2019 (in thousands):
Balance, beginning of year
Expenditures
Accretion of discount
Additions and changes in estimates
Foreign currency translation adjustments and other
Balance, end of year
Less amounts reported in Accrued expenses
Amounts reported in Other noncurrent liabilities
2021
Year Ended December 31,
2020
2019
$
$
45,771
(2,752)
960
4,063
(1,425)
46,617
9,077
37,540
$
$
42,592
(3,290)
925
3,815
1,729
45,771
9,473
36,298
$
$
49,569
(6,037)
1,030
1,129
(3,099)
42,592
9,534
33,058
Environmental remediation liabilities included discounted liabilities of $39.7 million and $39.2 million at December 31, 2021 and 2020, respectively, discounted at rates with a weighted-average of
3.5%, with the undiscounted amount totaling $70.0 million and $73.6 million at December 31, 2021 and 2020, respectively. For certain locations where the Company is operating groundwater monitoring
and/or remediation systems, prior owners or insurers have assumed all or most of the responsibility.
The amounts recorded represent our future remediation and other anticipated environmental liabilities. These liabilities typically arise during the normal course of our operational and environmental
management activities or at the time of acquisition of the site, and are based on internal analysis as well as input from outside consultants. As evaluations proceed at each relevant site, changes in risk
assessment practices, remediation techniques and regulatory requirements can occur,
107
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
therefore such liability estimates may be adjusted accordingly. The timing and duration of remediation activities at these sites will be determined when evaluations are completed. Although it is difficult to
quantify the potential financial impact of these remediation liabilities, management estimates (based on the latest available information) that there is a reasonable possibility that future environmental
remediation costs associated with our past operations, could be an additional $10 million to $37 million before income taxes, in excess of amounts already recorded. The variability of this range is primarily
driven by possible environmental remediation activity at a formerly owned site where we indemnify the buyer through a set cutoff date in 2024.
We believe that any sum we may be required to pay in connection with environmental remediation matters in excess of the amounts recorded would likely occur over a period of time and would
likely not have a material adverse effect upon our results of operations, financial condition or cash flows on a consolidated annual basis although any such sum could have a material adverse impact on our
results of operations, financial condition or cash flows in a particular quarterly reporting period.
Asset Retirement Obligations
The following is a reconciliation of our beginning and ending asset retirement obligation balances for 2021 and 2020 (in thousands):
Balance, beginning of year
(a)
Acquisitions
Additions and changes in estimates
Accretion of discount
Liabilities settled
Foreign currency translation adjustments and other
Balance, end of year
Less amounts reported in Accrued expenses
(b)
Amounts reported in Other noncurrent liabilities
Year Ended December 31,
2021
2020
$
$
$
75,872
—
4,832
2,098
(3,605)
16
79,213
3,017
76,196
$
$
$
60,246
1,222
15,750
2,531
(3,980)
103
75,872
1,016
74,856
(a) Represents purchase price adjustments for the Wodgina Project acquisition recorded during the year ended December 31, 2020.
(b) Additions in 2021 primarily related to the updated of an estimate at a site formerly owned by Albemarle. 2020 additions related to new asset retirement obligations in Chile and Australia.
Asset retirement obligations primarily relate to post-closure reclamation of brine wells and sites involved in the surface mining and manufacturing of lithium. We are not aware of any conditional asset
retirement obligations that would require recognition in our consolidated financial statements.
Litigation
We are involved from time to time in legal proceedings of types regarded as common in our business, including administrative or judicial proceedings seeking remediation under environmental laws,
such as the federal Comprehensive Environmental Response, Compensation and Liability Act, commonly known as CERCLA or Superfund, products liability, breach of contract liability and premises
liability litigation. Where appropriate, we may establish financial reserves for such proceedings. We also maintain insurance to mitigate certain of such risks. Costs for legal services are generally expensed
as incurred.
On February 6, 2017, Huntsman International LLC (“Huntsman”), a subsidiary of Huntsman Corporation, filed a lawsuit in New York state court against Rockwood Holdings, Inc. (“Rockwood”),
Rockwood Specialties, Inc., certain former executives of Rockwood and its subsidiaries—Seifollah Ghasemi, Thomas Riordan, Andrew Ross, and Michael Valente, and Albemarle. The lawsuit arises out of
Huntsman’s acquisition of certain Rockwood subsidiaries in connection with a stock purchase agreement (the “SPA”), dated September 17, 2013. Before that transaction closed on October 1, 2014,
Albemarle began discussions with Rockwood to purchase all outstanding equity of Rockwood and did so in a transaction that closed on January 12, 2015. Huntsman’s complaint asserted that certain
technology that Rockwood had developed for a production facility in Augusta, Georgia, and which was among the assets that Huntsman acquired pursuant to the SPA, did not work, and that Rockwood and
the defendant executives had intentionally misled Huntsman about that technology in connection with the Huntsman-Rockwood transaction. The complaint asserted claims for, among other things, fraud,
negligent misrepresentation, and breach of the SPA, and sought certain costs for completing construction of the production facility.
108
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
On March 10, 2017, Albemarle moved in New York state court to compel arbitration, which was granted on January 8, 2018 (although Huntsman unsuccessfully appealed that decision). Huntsman’s
arbitration demand asserted claims substantially similar to those asserted in its state court complaint, and sought various forms of legal remedies, including cost overruns, compensatory damages,
expectation damages, punitive damages, and restitution. After a trial, the arbitration panel issued an award on October 28, 2021, awarding approximately $600 million (including interest) to be paid by
Albemarle to Huntsman, in addition to the possibility of attorney’s fees, costs and expenses. Following the arbitration panel decision, Albemarle reached a settlement with Huntsman to pay $665 million in
two equal installments, with the first payment made in December 2021. As a result, the consolidated statements of income for the year ended December 31, 2021, includes expense of $657.4 million
($508.5 million net of income tax), inclusive of legal fees incurred by Huntsman and other related obligations, to reflect the agreed upon resolution of this legal matter.
In addition, as first reported in 2018, following receipt of information regarding potential improper payments being made by third-party sales representatives of our Refining Solutions business,
within our Catalysts segment, we promptly retained outside counsel and forensic accountants to investigate potential violations of the Company’s Code of Conduct, the Foreign Corrupt Practices Act, and
other potentially applicable laws. Based on this internal investigation, we have voluntarily self-reported potential issues relating to the use of third-party sales representatives in our Refining Solutions
business, within our Catalysts segment, to the U.S. Department of Justice (“DOJ”), the SEC, and the Dutch Public Prosecutor (“DPP”), and are cooperating with the DOJ, the SEC, and the DPP in their
review of these matters. In connection with our internal investigation, we have implemented, and are continuing to implement, appropriate remedial measures. We have commenced discussions with the
SEC about a potential resolution.
At this time, we are unable to predict the duration, scope, result, or related costs associated with the investigations. We also are unable to predict what action may be taken by the DOJ, the SEC, or the
DPP, or what penalties or remedial actions they may ultimately seek. Any determination that our operations or activities are not, or were not, in compliance with existing laws or regulations could result in
the imposition of fines, penalties, disgorgement, equitable relief, or other losses. We do not believe, however, that any such fines, penalties, disgorgement, equitable relief, or other losses would have a
material adverse effect on our financial condition or liquidity. However, an adverse resolution could have a material adverse effect on our results of operations in a particular period.
Indemnities
We are indemnified by third parties in connection with certain matters related to acquired and divested businesses. Although we believe that the financial condition of those parties who may have
indemnification obligations to the Company is generally sound, in the event the Company seeks indemnity under any of these agreements or through other means, there can be no assurance that any party
who may have obligations to indemnify us will adhere to their obligations and we may have to resort to legal action to enforce our rights under the indemnities.
The Company may be subject to indemnity claims relating to properties or businesses it divested, including properties or businesses of acquired businesses that were divested prior to the completion
of the acquisition. In the opinion of management, and based upon information currently available, the ultimate resolution of any indemnification obligations owed to the Company or by the Company is not
expected to have a material effect on the Company’s financial condition, results of operations or cash flows. The Company had approximately $66.8 million and $30.5 million at December 31, 2021 and
2020, respectively, recorded in Other noncurrent liabilities primarily related to the indemnification of certain income and non-income tax liabilities associated with the Chemetall Surface Treatment entities
sold in 2017. During the year ended December 31, 2021, the Company recorded $39.4 million to revise this indemnification estimate for an ongoing tax-related matter in Germany. A corresponding discrete
tax benefit of $27.9 million was recorded in Income tax expense during the same period, netting to an expected cash obligation of approximately $11.5 million..
Other
The Company has standby letters of credit and guarantees with various financial institutions. The following table summarizes our letters of credit and guarantee agreements (in thousands):
Letters of credit and other guarantees
$
62,715
$
7,127
$
987
$
68
$
118
$
10,154
2022
2023
2024
2025
2026
Thereafter
The outstanding letters of credit are primarily related to insurance claim payment guarantees. The majority of the Company’s other guarantees have terms of one year and mainly consist of
performance and environmental guarantees, as well as guarantees to customs and port authorities. The guarantees arose during the ordinary course of business.
109
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
We do not have recorded reserves for the letters of credit and guarantees as of December 31, 2021. We are unable to estimate the maximum amount of the potential future liability under guarantees
and letters of credit. However, we accrue for any potential loss for which we believe a future payment is probable and a range of loss can be reasonably estimated. We believe our liability under such
obligations is immaterial.
We currently, and are from time to time, subject to transactional audits in various taxing jurisdictions and to customs audits globally. We do not expect the financial impact of any of these audits to
have a material adverse effect on the Company’s results of operations, financial condition or cash flows.
NOTE 18—Leases:
We lease certain office space, buildings, transportation and equipment in various countries. The initial lease terms generally range from 1 to 30 years for real estate leases, and from 2 to 15 years for
non-real estate leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term.
Many leases include options to terminate or renew, with renewal terms that can extend the lease term from 1 to 50 years or more. The exercise of lease renewal options is at our sole discretion. Certain
leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase
option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The following table provides details of our lease contracts for the years ended December 31, 2021 and 2020 (in thousands):
Operating lease cost
Finance lease cost:
Amortization of right of use assets
Interest on lease liabilities
Total finance lease cost
Short-term lease cost
Variable lease cost
Total lease cost
Year Ended December 31,
2021
2020
42,338
$
614
3,010
3,624
11,084
8,002
65,048
$
$
$
Supplemental cash flow information related to our lease contracts for the years ended December 31, 2021 and 2020 is as follows (in thousands):
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases
Operating cash flows from finance leases
Financing cash flows from finance leases
Right-of-use assets obtained in exchange for lease obligations:
Operating leases
Finance leases
Year Ended December 31,
2021
2020
$
$
33,030
1,776
687
56,814
17,096
110
33,904
585
2,681
3,266
11,663
8,691
57,524
36,245
1,568
663
29,581
—
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Supplemental balance sheet information related to our lease contracts, including the location on balance sheet, at December 31, 2021 and 2020 is as follows (in thousands, except as noted):
December 31,
2021
2020
Operating leases:
Other assets
Accrued expenses
Other noncurrent liabilities
Total operating lease liabilities
Finance leases:
Net property, plant and equipment
(a)
Current portion of long-term debt
Long-term debt
Total finance lease liabilities
Weighted average remaining lease term (in years):
Operating leases
Finance leases
Weighted average discount rate (%):
Operating leases
Finance leases
(a) Balance includes accrued interest of finance lease.
Maturities of lease liabilities as of December 31, 2021 were as follows (in thousands):
2022
2023
2024
2025
2026
Thereafter
Total lease payments
Less imputed interest
Total
NOTE 19—Stock-based Compensation Expense:
Incentive Plans
$
$
154,741
31,603
126,997
158,600
75,302
3,768
74,011
77,779
12.9
24.5
%
%
3.44
4.47
136,292
22,297
116,765
139,062
58,963
1,752
58,543
60,295
15.3
27.5
%
%
3.94
4.56
Operating Leases
Finance Leases
$
$
36,552
33,368
20,367
14,588
9,689
122,717
237,281
78,681
158,600
$
$
5,018
6,222
6,222
6,222
5,544
97,682
126,910
49,131
77,779
We have various share-based compensation plans that authorize the granting of (i) qualified and non-qualified stock options to purchase shares of our common stock, (ii) restricted stock and restricted
stock units, (iii) performance unit awards and (iv) stock appreciation rights (“SARs”) to employees and non-employee directors, at our option. Stock options granted to employees generally vest over three
years and have a term of ten years. Restricted stock and restricted stock unit awards vest in periods ranging from one to five years from the date of grant. Performance unit awards are earned at a level
ranging from 0% to 200% contingent upon the achievement of specific performance criteria over periods ranging from one to three years. Distribution of earned units occurs generally 50% upon
completion of the applicable measurement period with the remaining 50% distributed one year thereafter.
111
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
In May 2017, the Company adopted the Albemarle Corporation 2017 Incentive Plan (the “Incentive Plan”), which replaced the Albemarle Corporation 2008 Incentive Plan. The maximum number of
shares available for issuance to participants under the Incentive Plan is 4,500,000 shares. The adoption of the Incentive Plan did not affect awards already granted under the Albemarle Corporation 2008
Incentive Plan. Under the Albemarle Corporation 2013 Stock Compensation and Deferral Election Plan for Non-Employee Directors (the “Non-Employee Directors Plan”), a maximum aggregate number
of 500,000 shares of our common stock is authorized for issuance to the Company’s non-employee directors; any shares remaining available for issuance under the prior plans were canceled. The aggregate
fair market value of shares that may be issued to a director during any compensation year (as defined in the agreement, generally July 1 to June 30) shall not exceed $150,000. At December 31, 2021, there
were 3,554,425 shares available for grant under the Incentive Plan and 335,427 shares available for grant under the Non-Employee Directors Plan.
Total stock-based compensation expense associated with our incentive plans for the years ended December 31, 2021, 2020 and 2019 amounted to $18.8 million, $19.3 million and $21.3 million,
respectively, and is included in Cost of goods sold and Selling, general and administrative expenses in the consolidated statements of income. Total related recognized tax benefits for the years ended
December 31, 2021, 2020 and 2019 amounted to $2.3 million, $2.4 million and $3.2 million, respectively.
The following table summarizes information about the Company’s fixed-price stock options as of and for the year ended December 31, 2021:
Outstanding at December 31, 2020
Granted
Exercised
Outstanding at December 31, 2021
Exercisable at December 31, 2021
Shares
599,841
62,479
(302,151)
360,169
157,724
$
$
$
Weighted-Average
Exercise Price
Weighted-Average
Remaining Contractual
Term (Years)
Aggregate
Intrinsic Value
(in thousands)
73.24
157.21
60.87
98.19
85.29
5.6
6.6
4.6
$
$
$
44,554
48,833
23,419
We granted 62,479, 76,221 and 95,639 stock options during 2021, 2020 and 2019, respectively. There were no significant modifications made to any share-based grants during these periods.
The fair value of each option granted during the years ended December 31, 2021, 2020 and 2019 was estimated on the date of grant using the Black-Scholes option-pricing model with the following
weighted-average assumptions:
Dividend yield
Volatility
Average expected life (years)
Risk-free interest rate
Fair value of options granted
2021
1.43
36.19
1.44
49.42
%
%
6
%
$
$
Year Ended December 31,
2020
1.69
32.65
1.13
22.14
%
%
6
%
$
2019
1.58
32.50
2.81
27.71
%
%
6
%
Dividend yield is the average of historical yields and those estimated over the average expected life. The stock volatility is based on historical volatilities of our common stock. The average expected
life represents the weighted average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and our historical exercise patterns. The risk-free interest
rate is based on the U.S. Treasury strip rate with stripped coupon interest for the period equal to the contractual term of the share option grant in effect at the time of grant.
The intrinsic value of options exercised during the years ended December 31, 2021, 2020 and 2019 was $37.2 million, $31.3 million and $8.1 million, respectively. The intrinsic value of a stock
option is the amount by which the market value of the underlying stock exceeds the exercise price of the option.
Total compensation cost not yet recognized for nonvested stock options outstanding as of December 31, 2021 is approximately $2.9 million and is expected to be recognized over a remaining
weighted-average period of 1.9 years. Cash proceeds from stock options exercised and tax benefits related to stock options exercised were $18.4 million and $8.4 million for the year ended December 31,
2021, respectively. The Company issues new shares of common stock upon exercise of stock options and vesting of restricted common stock awards.
112
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes activity in performance unit awards as of and for the year ended December 31, 2021:
Nonvested, beginning of period
Granted
Vested
Forfeited
Nonvested, end of period
Shares
226,808
63,648
(37,783)
(27,770)
224,903
Weighted-Average
Grant Date Fair Value Per
Share
$
116.54
157.21
155.65
117.27
121.39
The weighted average grant date fair value of performance unit awards granted in 2021, 2020 and 2019 was $10.0 million, $8.7 million and $10.8 million, respectively. For all periods presented, half
of the performance unit awards granted were based on the targeted return on invested capital (“ROIC Award”), while the other half were granted based on targeted market conditions (“TSR Award”). The
fair value of each TSR Award was estimated on the date of grant using the Monte Carlo simulation model as these equity awards are tied to a service and market condition. The calculation used the
following weighted-average assumptions:
Volatility
Risk-free interest rate
2021
47.13
0.27
%
%
Year Ended December 31,
2020
33.66
0.85
%
%
2019
30.11
2.43
%
%
The weighted average fair value of performance unit awards that vested during 2021, 2020 and 2019 was $5.8 million, $3.0 million and $11.7 million, respectively, based on the closing prices of our
common stock on the dates of vesting. Total compensation cost not yet recognized for nonvested performance unit awards outstanding as of December 31, 2021 is approximately $10.8 million, calculated
based on current expectation of specific performance criteria, and is expected to be recognized over a remaining weighted-average period of approximately 1.9 years. Each performance unit represents one
share of common stock.
The following table summarizes activity in non-performance based restricted stock and restricted stock unit awards as of and for the year ended December 31, 2021:
Nonvested, beginning of period
Granted
Vested
Forfeited
Nonvested, end of period
Shares
326,744
66,432
(69,937)
(13,985)
309,254
Weighted-Average
Grant Date Fair Value Per
Share
$
79.48
159.89
93.61
101.98
92.52
The weighted average grant date fair value of restricted stock and restricted stock unit awards granted in 2021, 2020 and 2019 was $10.6 million, $13.3 million and $10.4 million, respectively. The
weighted average fair value of restricted stock and restricted stock unit awards that vested in 2021, 2020 and 2019 was $11.0 million, $9.0 million and $7.5 million, respectively, based on the closing prices
of our common stock on the dates of vesting. Total compensation cost not yet recognized for nonvested, non-performance based restricted stock and restricted stock units as of December 31, 2021 is
approximately $12.8 million and is expected to be recognized over a remaining weighted-average period of 2.2 years. The fair value of the non-performance based restricted stock and restricted stock units
was estimated on the date of grant adjusted for a dividend factor, if necessary.
113
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 20—Accumulated Other Comprehensive (Loss) Income:
The components and activity in Accumulated other comprehensive (loss) income (net of deferred income taxes) consisted of the following during the years ended December 31, 2021, 2020 and 2019
(in thousands):
Balance at December 31, 2018
Other comprehensive (loss) income before
reclassifications
Amounts reclassified from accumulated other
comprehensive loss
Other comprehensive (loss) income, net of tax
Other comprehensive loss attributable to
noncontrolling interests
Balance at December 31, 2019
Other comprehensive income (loss) income
before reclassifications
Amounts reclassified from accumulated other
comprehensive loss
Other comprehensive income (loss), net of tax
Other comprehensive income attributable to
noncontrolling interests
Balance at December 31, 2020
Other comprehensive (loss) income before
reclassifications
Amounts reclassified from accumulated other
comprehensive loss
Other comprehensive (loss) income, net of tax
Amounts reclassified within accumulated other
comprehensive income
Other comprehensive income attributable to
noncontrolling interests
Balance at December 31, 2021
$
$
$
$
Foreign
Currency Translation and
Other
Net Investment
Hedge
(407,805)
$
72,337
Cash Flow Hedge
$
(a)
—
Interest Rate Swap
$
(15,214)
(b)
(61,455)
56
(61,399)
467
(468,737)
99,809
23
99,832
(247)
(369,152)
(74,478)
93
(74,385)
51,703
160
(391,674)
$
$
$
8,441
—
8,441
—
80,778
(34,185)
—
(34,185)
—
46,593
5,110
—
5,110
(51,703)
—
—
$
$
$
4,847
—
4,847
—
4,847
1,602
—
1,602
—
6,449
174
—
174
—
—
6,623
$
$
$
—
2,591
2,591
—
(12,623)
—
2,601
2,601
—
(10,022)
—
2,623
2,623
—
—
(7,399)
Total
(350,682)
(48,167)
2,647
(45,520)
467
(395,735)
67,226
2,624
69,850
(247)
(326,132)
(69,194)
2,716
(66,478)
—
160
(392,450)
$
$
$
$
(a) We entered into a foreign currency forward contract in the fourth quarter of 2019, which was designated and accounted for as a cash flow hedge under ASC 815, Derivatives and Hedging. See Note 22, “Fair Value of
Financial Instruments,” for additional information.
(b) The pre-tax portion of amounts reclassified from accumulated other comprehensive loss is included in interest expense.
114
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The amount of income tax benefit (expense) allocated to each component of Other comprehensive income (loss) for the years ended December 31, 2021, 2020 and 2019 is provided in the following
tables (in thousands):
Foreign Currency
Translation and Other
Net Investment Hedge
Cash Flow Hedge
Interest Rate Swap
2021
Other comprehensive (loss) income, before tax
Income tax benefit (expense)
Other comprehensive (loss) income, net of tax
2020
Other comprehensive income (loss), before tax
Income tax benefit (expense)
Other comprehensive income (loss), net of tax
2019
Other comprehensive (loss) income, before tax
Income tax expense
Other comprehensive (loss) income, net of tax
NOTE 21—Income Taxes:
$
$
$
$
$
$
(76,544)
2,159
(74,385)
99,710
122
99,832
(61,397)
(2)
(61,399)
$
$
$
$
$
$
6,552
(1,442)
5,110
(43,826)
9,641
(34,185)
10,867
(2,426)
8,441
$
$
$
$
$
$
174
—
174
1,602
—
1,602
4,847
—
4,847
$
$
$
$
$
$
Income before income taxes and equity in net income of unconsolidated investments, and current and deferred income tax expense (benefit) are composed of the following (in thousands):
2021
Year Ended December 31,
2020
2019
Income before income taxes and equity in net income of unconsolidated investments:
Domestic
Foreign
Total
Current income tax expense (benefit):
Federal
State
Foreign
Total
Deferred income tax (benefit) expense:
Federal
State
Foreign
Total
Total income tax expense
(186,077)
319,695
133,618
11,722
694
55,530
67,946
(38,413)
(5,544)
5,457
(38,500)
29,446
$
$
$
$
$
$
$
41,346
332,173
373,519
(140)
(193)
56,734
56,401
4,564
(2,893)
(3,647)
(1,976)
54,425
$
$
$
$
$
$
$
$
$
$
$
$
$
$
115
3,336
(713)
2,623
3,336
(735)
2,601
3,336
(745)
2,591
190,195
372,755
562,950
21,258
5,453
47,056
73,767
13,255
(7,369)
8,508
14,394
88,161
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The reconciliation of the U.S. federal statutory rate to the effective income tax rate is as follows:
(a)
(b)(c)
Federal statutory rate
State taxes, net of federal tax benefit
Change in valuation allowance
Impact of foreign earnings, net
Global intangible low tax inclusion
Section 162(m) limitation
Subpart F income
Stock-based compensation
Depletion
U.S. federal return to provision
Revaluation of unrecognized tax benefits/reserve requirements
Other items, net
Effective income tax rate
2021
21.0
(3.5)
33.7
(40.5)
12.3
4.5
4.8
(7.2)
(2.9)
(1.7)
3.0
(1.5)
22.0
%
%
% of Income Before Income Taxes
2020
21.0
0.3
1.9
(8.4)
1.9
0.5
1.3
(1.0)
(0.9)
(0.9)
(0.4)
(0.7)
14.6
%
%
2019
21.0
(0.5)
1.9
(3.7)
1.8
0.3
0.6
(0.6)
(0.7)
(0.4)
(2.7)
(1.3)
15.7
%
%
Includes a discrete tax benefit of $27.9 million related to the revision of an indemnification estimate for an ongoing tax-related matter in Germany.
(a) The years ended December 31, 2021 and 2019 includes benefits of $6.0 million and $2.1 million, respectively, due to the release of a foreign valuation allowance due to changes in expected profitability.
(b)
(c) Our statutory rate is decreased by of our share of the income of JBC, a Free Zones company under the laws of the Hashemite Kingdom of Jordan. The applicable provisions of the Jordanian law, and applicable regulations
thereunder, do not have a termination provision and the exemption is indefinite. As a Free Zones company, JBC is not subject to income taxes on the profits of products exported from Jordan, and currently, substantially all
of the profits are from exports. This resulted in a rate benefit of 34.6%, 11.9%, and 8.0% for 2021, 2020, and 2019, respectively.
Deferred income tax assets and liabilities recorded on the consolidated balance sheets as of December 31, 2021 and 2020 consist of the following (in thousands):
(a)
Deferred tax assets:
Accrued employee benefits
Operating loss carryovers
Pensions
Tax credit carryovers
Other
Gross deferred tax assets
Valuation allowance
Deferred tax assets
Deferred tax liabilities:
Depreciation
Intangibles
Hedge of net investment of foreign subsidiary
Other
Deferred tax liabilities
(b)
Net deferred tax liabilities
Classification in the consolidated balance sheets:
Noncurrent deferred tax assets
Noncurrent deferred tax liabilities
Net deferred tax liabilities
116
December 31,
2021
2020
$
$
$
$
18,374
1,295,925
48,720
2,448
212,882
1,578,349
(1,276,305)
302,044
(411,336)
(83,182)
—
(142,008)
(636,526)
(334,482)
18,797
(353,279)
(334,482)
$
$
$
$
21,878
1,321,942
78,683
1,582
57,370
1,481,455
(1,326,204)
155,251
(348,700)
(91,645)
(13,514)
(75,927)
(529,786)
(374,535)
20,317
(394,852)
(374,535)
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(a) Increase in other primarily related to deferred tax assets for the settlement of an arbitration ruling for a legacy Rockwood legal matter and the expense related to anticipated cost overruns for MRL’s 40% interest in lithium
hydroxide conversion assets being built in Kemerton.
(b) Increase in other primarily related to deferred tax liabilities recorded for the gain on the sale of the FCS business.
Changes in the balance of our deferred tax asset valuation allowance are as follows (in thousands):
Balance at January 1
Additions
Deductions
Balance at December 31
$
$
2021
(1,326,204)
(61,470)
111,369
(1,276,305)
Year Ended December 31,
2020
$
$
(1,148,268)
(182,325)
4,389
(1,326,204)
$
$
2019
(1,213,750)
(24,986)
90,468
(1,148,268)
At December 31, 2021, we had approximately $2.4 million of domestic credits available to offset future payments of income taxes, expiring in varying amounts between 2022 and 2039. We have
established valuation allowances for $0.2 million of those domestic credits since we believe that it is more likely than not that the related deferred tax assets will not be realized. We believe that sufficient
taxable income will be generated during the carryover period in order to utilize the other remaining credit carryovers.
At December 31, 2021, we have on a pre-tax basis, domestic state net operating losses of $242.9 million, expiring between 2022 and 2041, which have pre-tax valuation allowances of $30.5 million
established. In addition, we have on a pre-tax basis $5.10 billion of foreign net operating losses, which have pre-tax valuation allowances for $4.85 billion established. $2.80 billion of these foreign net
operating losses expire in 2035 and $2.06 billion have an indefinite life. We have established valuation allowances for these deferred tax assets since we believe that it is more likely than not that the related
deferred tax assets will not be realized. For the same reason, we established pre-tax valuation allowances of $111.0 million and $173.7 million for other state and foreign deferred tax assets, respectively,
unrelated to net operating losses. The realization of the deferred tax assets is dependent on the generation of sufficient taxable income in the appropriate tax jurisdictions. Although realization is not assured,
we believe it is more likely than not that the remaining deferred tax assets will be realized. However, the amount considered realizable could be reduced if estimates of future taxable income change.
As of December 31, 2021, we have not recorded taxes on approximately $5.6 billion of cumulative undistributed earnings of our non-U.S. subsidiaries and joint ventures. The TCJA imposed a
mandatory transition tax on accumulated foreign earnings and generally eliminated U.S. taxes on foreign subsidiary distribution with the exception of foreign withholding taxes and other foreign local tax.
We generally do not provide for taxes related to our undistributed earnings because such earnings either would not be taxable when remitted or they are considered to be indefinitely reinvested. If in the
foreseeable future, we can no longer demonstrate that these earnings are indefinitely reinvested, a deferred tax liability will be recognized. A determination of the amount of the unrecognized deferred tax
liability related to these undistributed earnings is not practicable due to the complexity and variety of assumptions necessary based on the manner in which the undistributed earnings would be repatriated.
Liabilities related to uncertain tax positions were $27.7 million and $14.7 million at December 31, 2021 and 2020, respectively, inclusive of interest and penalties of $7.0 million and $3.1 million at
December 31, 2021 and 2020, respectively, and are reported in Other noncurrent liabilities as provided in Note 16, “Other Noncurrent Liabilities.” These liabilities at December 31, 2021 and 2020 were
reduced by $32.9 million and $24.1 million, respectively, for offsetting benefits from the corresponding effects of potential transfer pricing adjustments, state income taxes and rate arbitrage related to
foreign structure. These offsetting benefits are recorded in Other assets as provided in Note 11, “Other Assets.” The resulting net asset of $12.2 million as of December 31, 2021 would unfavorably affect
earnings if recognized and released, while the net asset of $12.5 million at December 31, 2020 would unfavorably affect earnings if recognized and released.
The liabilities related to uncertain tax positions, exclusive of interest, were $20.7 million and $11.6 million at December 31, 2021 and 2020, respectively. The following is a reconciliation of our total
gross liability related to uncertain tax positions for 2021, 2020 and 2019 (in thousands):
117
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Balance at January 1
Additions for tax positions related to prior years
Reductions for tax positions related to prior years
Additions for tax positions related to current year
Lapses in statutes of limitations/settlements
Foreign currency translation adjustment
Balance at December 31
2021
Year Ended December 31,
2020
2019
$
$
11,639
75
(6)
10,911
(1,931)
29
20,717
$
$
17,548
5,646
(174)
315
(12,128)
432
11,639
$
$
19,742
2,235
—
—
(4,494)
65
17,548
We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Due to the statute of limitations, we are no longer subject to U.S. federal income tax audits by the Internal Revenue
Service (“IRS”) for years prior to 2017. Due to the statute of limitations, we also are no longer subject to U.S. state income tax audits prior to 2017.
With respect to jurisdictions outside the U.S., several audits are in process. We have audits ongoing for the years 2011 through 2020 related to Germany, Italy, Belgium, South Africa and Chile, some
of which are for entities that have since been divested.
While we believe we have adequately provided for all tax positions, amounts asserted by taxing authorities could be greater than our accrued position. Accordingly, additional provisions on federal
and foreign tax-related matters could be recorded in the future as revised estimates are made or the underlying matters are settled or otherwise resolved.
Since the timing of resolutions and/or closure of tax audits is uncertain, it is difficult to predict with certainty the range of reasonably possible significant increases or decreases in the liability related
to uncertain tax positions that may occur within the next twelve months. Our current view is that it is reasonably possible that we could record a increase in the liability related to uncertain tax positions,
relating to a number of issues, up to approximately $0.3 million as a result of closure of tax statutes.
NOTE 22—Fair Value of Financial Instruments:
In assessing the fair value of financial instruments, we use methods and assumptions that are based on market conditions and other risk factors existing at the time of assessment. Fair value
information for our financial instruments is as follows:
Long-Term Debt—the fair values of our notes are estimated using Level 1 inputs and account for the difference between the recorded amount and fair value of our long-term debt. The carrying value
of our remaining long-term debt reported in the accompanying consolidated balance sheets approximates fair value as substantially all of such debt bears interest based on prevailing variable market rates
currently available in the countries in which we have borrowings.
2021
2020
December 31,
Recorded Amount
Fair Value
Recorded Amount
Fair Value
Long-term debt
$
2,405,021
$
(In thousands)
2,593,590
$
3,588,157
$
3,783,225
Foreign Currency Forward Contracts—In the fourth quarter of 2019, we entered into a foreign currency forward contract to hedge the cash flow exposure of non-functional currency purchases during
the construction of the Kemerton plant in Australia. This derivative financial instrument is used to manage risk and is not used for trading or other speculative purposes. This foreign currency forward
contract has been designated as a hedging instrument under ASC 815, Derivatives and Hedging. At December 31, 2021 and 2020, we had outstanding designated foreign currency forward contracts with
notional values totaling the equivalent of $36.5 million and $75.4 million, respectively.
We also enter into foreign currency forward contracts in connection with our risk management strategies that have not been designated as hedging instruments under ASC 815, Derivatives and
Hedging, in an attempt to minimize the financial impact of changes in foreign currency exchange rates. These derivative financial instruments are used to manage risk and are not used for trading or other
speculative purposes. The fair values of our non-designated foreign currency forward contracts are estimated based on current settlement values. At December 31, 2021 and 2020, we had outstanding non-
designated foreign currency forward contracts with notional values totaling $618.1 million and $611.1 million, respectively, hedging our exposure to various currencies including the Euro, Chinese
Renminbi, Chilean Peso and Australian Dollar.
118
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following table summarizes the fair value of our foreign currency forward contracts included in the consolidated balance sheets at December 31, 2021 and 2020 (in thousands):
Liabilities
December 31,
Assets
December 31,
Designated as hedging instruments
Not designated as hedging instruments
(b)
(a)
Total
2021
2020
2021
2020
$
$
237
2,901
3,138
$
$
7,043
6,563
13,606
$
$
57
248
305
$
$
—
4,803
4,803
(a) Included $0.2 million in Other current assets and $0.1 million in Accrued expenses at December 31, 2021, and $6.2 million in Other current assets and $0.9 million in Other assets at December 31, 2020.
(b) Included $2.9 million in Other current assets and $0.2 million in Accrued expenses at December 31, 2021 and $6.6 million in Other current assets and $4.8 million in Accrued expenses at December 31, 2020.
The following table summarizes the net gains (losses) recognized for our foreign currency forward contracts during the years ended December 31, 2021, 2020 and 2019 (in thousands):
Designated as hedging instruments:
Gain recognized in Other comprehensive income (loss)
Not designated as hedging instruments:
Losses recognized in Other expenses, net
(a)
2021
Year Ended December 31,
2020
2019
$
$
174
1,068
$
$
1,602
(7,665)
$
$
4,847
(25,765)
(a) Fluctuations in the value of our foreign currency forward contracts not designated as hedging instruments are generally expected to be offset by changes in the value of the underlying exposures being hedged, which are also
reported in Other expenses, net.
In addition, for the years ended December 31, 2021, 2020 and 2019, we recorded net cash settlements of $2.4 million, $19.4 million and $23.6 million, respectively, primarily within Changes in
current assets and liabilities, in our consolidated statements of cash flows.
As of December 31, 2021, there are no unrealized gains or losses related to the cash flow hedge expected to be reclassified to earnings in the next twelve months.
The counterparties to our foreign currency forward contracts are major financial institutions with which we generally have other financial relationships. We are exposed to credit loss in the event of
nonperformance by these counterparties. However, we do not anticipate nonperformance by the counterparties.
NOTE 23—Fair Value Measurement:
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The
inputs used to measure fair value are classified into the following hierarchy:
Level 1
Level 2
Unadjusted quoted prices in active markets for identical assets or liabilities
Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not
active, or inputs other than quoted prices that are observable for the asset or liability
Level 3
Unobservable inputs for the asset or liability
119
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the
fair value measurement. The following tables set forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2021 and 2020 (in thousands):
(a)
Assets:
Available for sale debt securities
Investments under executive deferred compensation plan
(c)(d)
Private equity securities measured at net asset value
Foreign currency forward contracts
Liabilities:
Obligations under executive deferred compensation plan
Foreign currency forward contracts
(e)
(e)
(b)
(b)
Assets:
Investments under executive deferred compensation plan
(b)(c)
Private equity securities measured at net asset value
Foreign currency forward contracts
Liabilities:
Obligations under executive deferred compensation plan
Foreign currency forward contracts
(d)
(d)
(a)
(a)
December 31, 2021
Quoted Prices in Active
Markets for Identical Items
(Level 1)
Quoted Prices in Active
Markets for Similar Items (Level 2)
Unobservable Inputs
(Level 3)
$
$
$
$
$
$
246,517
32,491
4,696
3,138
32,491
305
$
$
$
$
$
$
—
32,491
—
—
32,491
—
$
$
$
$
$
$
—
—
—
3,138
—
305
$
$
$
$
$
$
246,517
—
—
—
—
—
December 31, 2020
Quoted Prices in Active
Markets for Identical Items
(Level 1)
Quoted Prices in Active
Markets for Similar Items
(Level 2)
Unobservable Inputs (Level
3)
$
$
$
$
$
32,447
4,661
13,606
32,447
4,803
$
$
$
$
$
32,447
—
—
32,447
—
$
$
$
$
$
—
—
13,606
—
4,803
$
$
$
$
$
—
—
—
—
—
(a) Preferred equity of a Grace subsidiary acquired as a portion of the proceeds of the FCS divestiture on June 1, 2021. See Note 2, “Divestitures,” for further details on the material terms and conditions. A third-party estimate
of the fair value was prepared using expected future cash flows over the period up to when the asset is likely to be redeemed, applying a discount rate that appropriately captures a market participant's view of the risk
associated with the investment. These are considered to be Level 3 inputs.
(b) We maintain an EDCP that was adopted in 2001 and subsequently amended. The purpose of the EDCP is to provide current tax planning opportunities as well as supplemental funds upon the retirement or death of certain of
our employees. The EDCP is intended to aid in attracting and retaining employees of exceptional ability by providing them with these benefits. We also maintain a Benefit Protection Trust (the “Trust”) that was created to
provide a source of funds to assist in meeting the obligations of the EDCP, subject to the claims of our creditors in the event of our insolvency. Assets of the Trust are consolidated in accordance with authoritative guidance.
The assets of the Trust consist primarily of mutual fund investments (which are accounted for as trading securities and are marked-to-market on a monthly basis through the consolidated statements of income) and cash and
cash equivalents. As such, these assets and obligations are classified within Level 1.
(c) Primarily consists of private equity securities classified as available-for-sale and are reported in Investments in the consolidated balance sheets. The changes in fair value are reported in Other expenses, net, in our
consolidated statements of income.
(d) Holdings in private equity securities are measured at fair value using the net asset value per share (or its equivalent) practical expedient and have not been categorized in the fair value hierarchy. The fair value amounts of
$4.7 million at December 31, 2021 and 2020 are included in this table to permit reconciliation to the marketable equity securities presented in Note 10, “Investments.”
(e) As a result of our global operating and financing activities, we are exposed to market risks from changes in foreign currency exchange rates, which may adversely affect our operating results and financial position. When
deemed appropriate, we minimize our risks from foreign currency exchange rate fluctuations through the use of foreign currency forward contracts. The foreign currency forward contracts are valued using broker quotations
or market transactions in either the listed or over-the-counter markets. As such, these derivative instruments are classified within Level 2. See Note 22, “Fair Value of Financial Instruments,” for further details about our
foreign currency forward contracts.
120
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The following tables set forth the reconciliation of the beginning and ending balance for the Level 3 recurring fair value measurements (in thousands):
Beginning balance at December 31, 2020
Additions
Accretion of discount
Change in fair value
Ending balance at December 31, 2021
NOTE 24—Related Party Transactions:
Available for Sale Debt Securities
—
$
244,530
7,429
(5,441)
246,518
$
Our consolidated statements of income include sales to and purchases from unconsolidated affiliates in the ordinary course of business as follows (in thousands):
Sales to unconsolidated affiliates
Purchases from unconsolidated affiliates
(a)
2021
Year Ended December 31,
2020
$
$
19,441
213,077
$
$
22,589
168,072
$
$
2019
20,068
210,351
(a) Purchases from unconsolidated affiliates primarily relate to purchases from our Windfield joint venture.
Our consolidated balance sheets include accounts receivable due from and payable to unconsolidated affiliates in the ordinary course of business as follows (in thousands):
Receivables from related parties
Payables to related parties
NOTE 25—Segment and Geographic Area Information:
December 31,
2021
2020
$
$
2,139
47,499
$
$
4,098
30,123
Our three reportable segments include: (1) Lithium; (2) Bromine; and (3) Catalysts. During 2021, we changed the name of the Bromine Specialties segment to Bromine. This change simplifies the
name of the reportable segment, and does not impact the operations of the business or disclosure of the related assets. Each segment has a dedicated team of sales, research and development, process
engineering, manufacturing and sourcing, and business strategy personnel and has full accountability for improving execution through greater asset and market focus, agility and responsiveness. This
business structure aligns with the markets and customers we serve through each of the segments. This structure also facilitates the continued standardization of business processes across the organization,
and is consistent with the manner in which information is presently used internally by the Company’s chief operating decision maker to evaluate performance and make resource allocation decisions.
Summarized financial information concerning our reportable segments is shown in the following tables. The “All Other” category includes only the fine chemistry services business that did not fit
into any of our core businesses. On June 1, 2021, the Company completed the sale of the FCS business to Grace. See Note 3, “Divestitures,” for further details.
The Corporate category is not considered to be a segment and includes corporate-related items not allocated to the operating segments. Pension and OPEB service cost (which represents the benefits
earned by active employees during the period) and amortization of prior service cost or benefit are allocated to the reportable segments, All Other, and Corporate, whereas the remaining components of
pension and OPEB benefits cost or credit (“Non-operating pension and OPEB items”) are included in Corporate. Segment data includes intersegment transfers of raw materials at cost and allocations for
certain corporate costs.
The Company’s chief operating decision maker uses adjusted EBITDA (as defined below) to assess the ongoing performance of the Company’s business segments and to allocate resources. The
Company defines adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, as adjusted on a consistent basis for certain non-recurring or unusual items in a balanced manner and
on a segment basis. These non-recurring or unusual items may include acquisition and
121
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
integration related costs, gains or losses on sales of businesses, restructuring charges, facility divestiture charges, non-operating pension and OPEB items and other significant non-recurring items. In
addition, management uses adjusted EBITDA for business planning purposes and as a significant component in the calculation of performance-based compensation for management and other employees.
The Company has reported adjusted EBITDA because management believes it provides transparency to investors and enables period-to-period comparability of financial performance. Adjusted EBITDA is
a financial measure that is not required by, or presented in accordance with, U.S. GAAP. Adjusted EBITDA should not be considered as an alternative to Net income attributable to Albemarle Corporation,
the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP, or any other financial measure reported in accordance with U.S. GAAP.
Net sales:
Lithium
Bromine
Catalysts
All Other
Total net sales
Adjusted EBITDA:
Lithium
Bromine
Catalysts
All Other
Corporate
Total adjusted EBITDA
2021
Year Ended December 31,
2020
(In thousands)
2019
$
$
$
$
1,363,284
1,128,343
761,235
75,095
3,327,957
479,538
360,682
106,941
29,858
(106,045)
870,974
$
$
$
$
1,144,778
964,962
797,914
221,255
3,128,909
393,093
323,605
130,134
84,821
(112,915)
818,738
$
$
$
$
1,358,170
1,004,216
1,061,817
165,224
3,589,427
524,934
328,457
270,624
49,628
(136,862)
1,036,781
122
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
See below for a reconciliation of adjusted EBITDA, the non-GAAP financial measure, from Net income attributable to Albemarle Corporation, the most directly comparable financial measure
calculated and reported in accordance with U.S. GAAP (in thousands):
Lithium
Bromine
Catalysts
Reportable
Segments Total
All Other
Corporate
Consolidated Total
2021
Net income (loss) attributable
to Albemarle Corporation
$
Depreciation and amortization
Restructuring and other
Gain on sale of
(a)
business/interest in properties,
net
(b)
Acquisition and integration
related costs
(c)
Interest and financing
expenses
(d)
Income tax expense
Non-operating pension and
OPEB items
Legacy Rockwood legal
(d)
matter
Albemarle Foundation
contribution
(e)
Indemnification adjustments
Other
(g)
(f)
Adjusted EBITDA
2020
Net income (loss) attributable
to Albemarle Corporation
Depreciation and amortization
Restructuring and other
Acquisition and integration
(a)
related costs
(c)
Interest and financing expenses
Income tax expense
Non-operating pension and
OPEB items
Other
(h)
Adjusted EBITDA
2019
Net income (loss) attributable
to Albemarle Corporation
Depreciation and amortization
Restructuring and other
Gain on sale of property
Acquisition and integration
(a)
(i)
related costs
(c)
Interest and financing
expenses
(j)
Income tax expense
Non-operating pension and
OPEB items
(c)
Stamp duty
Windfield tax settlement
Other
(l)
(k)
Adjusted EBITDA
$
$
$
$
$
192,244
138,772
—
132,400
—
—
—
—
—
—
—
16,122
479,538
277,711
112,854
—
—
—
—
—
2,528
393,093
341,767
99,424
—
—
—
—
—
—
64,766
17,292
1,685
524,934
$
$
$
$
$
$
309,501
51,181
—
—
—
—
—
—
—
—
—
—
360,682
274,495
50,310
—
—
—
—
—
(1,200)
323,605
279,945
47,611
—
—
—
—
—
—
—
—
901
328,457
$
$
$
$
$
$
55,353
51,588
—
—
—
—
—
—
—
—
—
—
106,941
80,149
49,985
—
—
—
—
—
—
130,134
219,686
50,144
—
—
—
—
—
—
—
—
794
270,624
$
$
$
$
$
$
557,098
241,541
—
132,400
—
—
—
—
—
—
—
16,122
947,161
632,355
213,149
—
—
—
—
—
1,328
846,832
841,398
197,179
—
—
—
—
—
—
64,766
17,292
3,380
1,124,015
$
$
$
$
$
$
27,988
1,870
—
—
—
—
—
—
—
—
—
—
29,858
76,323
8,498
—
—
—
—
—
—
84,821
41,188
8,440
—
—
—
—
—
—
—
—
—
49,628
$
$
$
$
$
$
$
(461,414)
10,589
3,027
123,672
254,000
3,027
(428,371)
(295,971)
12,670
61,476
29,446
(78,814)
657,412
20,000
39,381
28,553
(106,045)
(332,914)
10,337
19,597
17,263
73,116
54,425
40,668
4,593
(112,915)
(349,358)
7,865
5,877
(14,411)
20,684
57,695
88,161
26,970
—
—
19,655
(136,862)
12,670
61,476
29,446
(78,814)
657,412
20,000
39,381
44,675
870,974
375,764
231,984
19,597
17,263
73,116
54,425
40,668
5,921
818,738
533,228
213,484
5,877
(14,411)
20,684
57,695
88,161
26,970
64,766
17,292
23,035
1,036,781
$
$
$
$
$
(a)
In 2021, we recorded facility closure related to offices in Germany, and severance expenses in Germany and Belgium, in SG&A. During the year ended December 31, 2020, we recorded severance expenses as part of
business reorganization plans, impacting each of our businesses and Corporate, primarily in the U.S., Belgium, Germany and with our Jordanian joint venture partner. We recorded expenses of $0.7 million in Cost of goods
sold, $19.2 million in SG&A and a $0.3 million gain in Net income attributable to noncontrolling interests for the portion of severance expense allocated to our Jordanian joint venture partner. In addition, we recorded
severance payments as part of a business reorganization plans in Selling, general and administrative expenses for the year ended December 31,
123
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(b)
2019. The balance of unpaid restructuring costs and severance is recorded in Accrued expenses and is expected to primarily be paid through 2022.
Includes a $428.4 million gain related to the FCS divestiture recorded during the year ended December 31, 2021. See Note 3, “Divestitures,” for additional information on this gain. In addition, includes a $132.4 million
expense related to anticipated cost overruns for MRL’s 40% interest in lithium hydroxide conversion assets being built in Kemerton. See Note 2, “Acquisitions,” for additional information.
(c) See Note 2, “Acquisitions,” for additional information.
(d) Loss recorded in Other expenses, net for the year ended December 31, 2021 related to the settlement of an arbitration ruling for a legacy Rockwood legal matter. See Note 17, “Commitments and Contingencies,” for further
details.
Included in SG&A is a charitable contribution, using a portion of the proceeds received from the FCS divestiture, to the Albemarle Foundation, a non-profit organization that sponsors grants, health and social projects,
educational initiatives, disaster relief, matching gift programs, scholarships and other charitable initiatives in locations where our employees live and the Company operates. This contribution is in addition to the normal
annual contribution made to the Albemarle Foundation by the Company, and is significant in size and nature in that it is intended to provide more long-term benefits in these communities.
Included in Other expenses, net to revise an indemnification estimate for an ongoing tax-related matter of a previously disposed business in Germany. A corresponding discrete tax benefit of $27.9 million was recorded in
Income tax expense during the same period, netting to an expected cash obligation of approximately $11.5 million.
Included amounts for the year ended December 31, 2021 recorded in:
(e)
(f)
(g)
• Cost of goods sold - $10.5 million of expense related to a legal matter as part of a prior acquisition in our Lithium business.
• SG&A - $11.5 million of legal fees related to a legacy Rockwood legal matter noted above, $9.8 million of expenses primarily related to non-routine labor and compensation related costs that are outside normal
compensation arrangements, a $4.0 million loss resulting from the sale of property, plant and equipment and $3.8 million of charges for environmental reserves at a sites not part of our operations.
• Other expenses, net - $4.8 million of net expenses primarily related to asset retirement obligation charges to update of an estimate at a site formerly owned by Albemarle.
(h)
Included amounts for the year ended December 31, 2020 recorded in:
• Cost of goods sold - $1.3 million of expense related to a legal matter as part of a prior acquisition in our Lithium business.
• SG&A - $3.1 million of shortfall contributions for our multiemployer plan financial improvement plan and $3.8 million of a net expense primarily relating to the increase of environmental reserves at non-operating
businesses we have previously divested.
• Other expenses, net - $7.2 million gain related to the sale of our ownership percentage in the SOCC joint venture, $3.6 million of a net gain primarily relating to the sale of intangible assets in our Bromine business
and property in Germany not used as part of our operations and a $2.5 million net gain resulting from the settlement of legal matters related to a business sold or a site in the process of being sold, partially offset by
$9.6 million of losses resulting from the adjustment of indemnifications related to previously disposed businesses and $1.2 million of expenses related to other costs outside of our regular operations.
(i) Gain of $3.3 million recorded in Selling, general and administrative expenses related to the release of liabilities as part of the sale of a property and $11.1 million gain recorded in Other expenses, net related to the sale of
land in Pasadena, Texas not used as part of our operations.
Included in Interest and financing expenses is a loss on early extinguishment of debt of $4.8 million. See Note 14, “Long-Term Debt,” for additional information.
(j)
(k) Represents our 49% share of a tax settlement between our Windfield joint venture and an Australian taxing authority, recorded in Equity in net income of unconsolidated investments (net of tax). This is offset in Income tax
expense by a discrete tax benefit related to seeking treaty relief from the competent authority to prevent double taxation.
Included amounts for the year ended December 31, 2019 recorded in:
(l)
• Cost of goods sold - $0.7 million related to non-routine labor and compensation related costs in Chile that are outside normal compensation arrangements.
• Selling, general and administrative expenses - $1.8 million of shortfall contributions for our multiemployer plan financial improvement plan, $0.9 million of a write-off of uncollectible accounts receivable from a
terminated distributor in the Bromine segment, $1.0 million related to the settlement of terminated agreements, primarily in the Catalysts segment, and $0.8 million related to the settlement of an ongoing audit in the
Lithium segment.
• Other expenses, net - $3.1 million of unrecoverable vendor costs outside the operations of the business related to the construction of the future Kemerton production facility, $9.8 million of a net loss primarily
resulting from the adjustment of indemnifications and other liabilities related to previously disposed businesses or purchase accounting, $3.6 million of asset retirement obligation charges related to the update of an
estimate at a site formerly owned by Albemarle, and $1.2 million of non-operating pension costs from our 50% interest in JBC.
124
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Identifiable assets:
(a)
Lithium
Bromine
Catalysts
All Other
Corporate
Total identifiable assets
(a)
Increase in Lithium identifiable assets each year primarily due to capital expenditures for growth and capacity increases.
Depreciation and amortization:
Lithium
Bromine
Catalysts
All Other
Corporate
Total depreciation and amortization
Capital expenditures:
Lithium
Bromine
Catalysts
All Other
Corporate
Total capital expenditures
Net Sales
(a)
:
United States
Foreign
(b)
Total
2021
December 31,
2020
(In thousands)
7,676,259
939,808
1,149,592
—
1,208,459
10,974,118
$
$
7,134,229
867,648
1,066,089
136,659
1,246,321
10,450,946
$
$
2019
6,570,791
799,456
1,163,590
146,211
1,180,815
9,860,863
2021
Year Ended December 31,
2020
(In thousands)
2019
138,772
51,181
51,588
1,870
10,589
254,000
813,128
70,711
49,312
2,339
18,177
953,667
$
$
$
$
112,854
50,310
49,985
8,498
10,337
231,984
720,563
57,486
44,448
6,792
21,188
850,477
2021
Year Ended December 31,
2020
(In thousands)
730,738
2,597,219
3,327,957
$
$
743,834
2,385,075
3,128,909
$
$
$
$
$
$
99,424
47,611
50,144
8,440
7,865
213,484
665,585
82,208
57,939
7,309
38,755
851,796
2019
858,084
2,731,343
3,589,427
$
$
$
$
$
$
$
$
(a) Net sales are attributed to countries based upon shipments to final destination.
(b)
In 2021, net sales to China, Japan and Korea represented 18%, 14% and 11%, respectively, of total net sales. In 2020, net sales to Korea, China and Japan represented 14%, 14%, and 13%, respectively, of total net sales. In
2019, net sales to Korea, China and Japan represented 17%, 13%, and 12%, respectively, of total net sales.
125
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Long-Lived Assets
(a)
:
United States
Australia
Chile
Jordan
Netherlands
China
Germany
France
Brazil
Other foreign countries
Total
(a) Long-lived assets are comprised of the Company’s Property, plant and equipment and joint ventures included in Investments.
126
2021
As of December 31,
2020
(In thousands)
2019
$
$
1,040,252
2,736,590
1,923,821
262,392
177,405
139,537
80,956
49,740
29,474
62,667
6,502,834
$
$
1,007,793
2,362,377
1,814,658
256,640
181,206
122,749
90,174
45,505
24,393
66,273
5,971,768
$
$
1,003,496
1,981,642
1,687,090
256,363
165,782
109,235
89,568
44,936
37,165
68,499
5,443,776
Albemarle Corporation and Subsidiaries
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
NONE
Item 9A.
Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the
design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act), as of the end of
the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure
controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported
within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal
financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Management’s report on internal control over financial reporting and the independent registered public accounting firm’s report are included in Item 8 under the captions entitled “Management’s
Report on Internal Control over Financial Reporting” and “Report of Independent Registered Public Accounting Firm” and are incorporated herein by reference.
Changes in Internal Control over Financial Reporting
No changes in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) occurred during the fiscal quarter ended December 31, 2021 that materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Item 9B.
Other Information.
NONE
Item 9C.
Disclosure Regarding Foreign Jurisdictions That Prevent Inspections.
NONE
Item 10.
Directors, Executive Officers and Corporate Governance.
PART III
The information required by this Item 10 will be contained in the Proxy Statement and is incorporated herein by reference. In addition, the information in “Executive Officers of the Registrant”
appearing after Item 4 in Part I of this Annual Report, is incorporated herein by reference.
Code of Conduct
We have adopted a code of conduct and ethics for directors, officers and employees, known as the Albemarle Code of Conduct. The Albemarle Code of Conduct is available on our website,
www.albemarle.com. Shareholders may also request a free copy of the Albemarle Code of Conduct from: Albemarle Corporation, Attention: Investor Relations, 4250 Congress Street, Suite 900, Charlotte,
North Carolina 28209. We will disclose any amendments to, or waivers from, a provision of our Code of Conduct that applies to the principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions that relates to any element of the Code of Conduct as defined in Item 406 of Regulation S-K by posting such information on our
website.
New York Stock Exchange Certifications
Because our common stock is listed on the New York Stock Exchange (“NYSE”), our Chief Executive Officer is required to make, and he has made, an annual certification to the NYSE stating that
he was not aware of any violation by us of the corporate governance listing standards of the NYSE. Our Chief Executive Officer made his annual certification to that effect to
127
Albemarle Corporation and Subsidiaries
the NYSE as of May 11, 2021. In addition, we have filed, as exhibits to this Annual Report on Form 10-K, the certifications of our principal executive officer and principal financial officer required under
Sections 906 and 302 of the Sarbanes-Oxley Act of 2002 to be filed with the Securities and Exchange Commission regarding the quality of our public disclosure.
Additional information will be contained in the Proxy Statement and is incorporated herein by reference.
Item 11.
Executive Compensation.
The information required by this Item 11 will be contained in the Proxy Statement and is incorporated herein by reference.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
The information required by this Item 12 will be contained in the Proxy Statement and is incorporated herein by reference.
Item 13.
Certain Relationships and Related Transactions, and Director Independence.
The information required by this Item 13 will be contained in the Proxy Statement and is incorporated herein by reference.
Item 14.
Principal Accountant Fees and Services.
The information required by this Item 14 will be contained in the Proxy Statement and is incorporated herein by reference.
Item 15.
Exhibits and Financial Statement Schedules.
PART IV
(a)(1) The following consolidated financial and informational statements of the registrant are included in Part II Item 8 on pages 74 to 126:
Management’s Report on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm (PCAOB ID 238)
Consolidated Balance Sheets as of December 31, 2021 and 2020
Consolidated Statements of Income, Comprehensive Income, Changes in Equity and Cash Flows for the years ended December 31, 2021, 2020 and 2019
Notes to the Consolidated Financial Statements
(a)(2) No Financial Statement Schedules are provided in accordance with Item 15(a)(2) as the information is either not applicable, not required or has been furnished in the Consolidated Financial
Statements or Notes thereto.
(a)(3)
Exhibits
The following documents are filed as exhibits to this Annual Report on Form 10-K pursuant to Item 601 of Regulation S-K:
2.1
2.2
Agreement and Plan of Merger, dated as of July 15, Agreement and Plan of Merger, dated as of July 15, 2014, among Albemarle Corporation, Albemarle
Holdings Corporation and Rockwood Holdings, Inc. [filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on July 18, 2014,
and incorporated herein by reference].
Share Purchase Agreement, dated as of June 17, 2016, between Albemarle Corporation and BASF SE [filed as Exhibit 2.1 to the Company’s Quarterly Report
on Form 10-Q for the quarter ended June 30, 2016 (No. 1-12658), filed on August 5, 2016, and incorporated herein by reference].
128
Albemarle Corporation and Subsidiaries
2.3
2.4
3.1
3.2
4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
4.9
First Amendment to the Share Purchase Agreement, dated December 7, 2016, between Albemarle Corporation and BASF SE [filed as Exhibit 2.3 to the
Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (No. 1-12658), and incorporated herein by reference].
Second Amendment to the Share Purchase Agreement, dated December 14, 2016, between Albemarle Corporation and BASF SE [filed as Exhibit 2.4 to the
Company’s Annual Report on Form 10-K for the year ended December 31, 2016 (No. 1-12658), and incorporated herein by reference].
Amended and Restated Articles of Incorporation of Albemarle Corporation [filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q (No. 1-
12658) filed on August 7, 2018, and incorporated herein by reference].
Amended and Restated Bylaws, effective July 23, 2019, of Albemarle Corporation [filed as Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q (No.
1-12658) filed on August 7, 2019, and incorporated herein by reference].
Indenture, dated as of January 20, 2005, between Albemarle Corporation and The Bank of New York, as trustee [filed as Exhibit 4.1 to the Company’s Current
Report on Form 8-K (No. 1-12658) filed on January 20, 2005, and incorporated herein by reference].
Second Supplemental Indenture, dated as of December 10, 2010, between Albemarle Corporation and The Bank of New York Mellon Trust Company, N.A.,
as successor trustee to The Bank of New York [filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on December 10, 2010,
and incorporated herein by reference].
Third Supplemental Indenture, dated as of November 24, 2014, among Albemarle Corporation, Albemarle Holdings Corporation (now Rockwood Holdings,
Inc.) and Albemarle Holdings II Corporation (now Rockwood Specialties Group, Inc.) and U.S. Bank National Association, as trustee [filed as Exhibit 4.1 to
the Company’s Current Report on Form 8-K (No. 1-12658) filed on November 24, 2014, and incorporated herein by reference].
Fourth Supplemental Indenture, dated as of January 29, 2015, among Albemarle Corporation, Rockwood Holdings, Inc. (as successor by merger to Albemarle
Holdings Corporation), Rockwood Specialties Group, Inc. (as successor by merger to Albemarle Holdings II Corporation), The Bank of New York Mellon
Trust Company, N.A., a national banking association, as successor to The Bank of New York, as resigning trustee, and U.S. Bank National Association, as
successor trustee [filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on January 29, 2015, and incorporated herein by
reference].
Form of Global Security for the 4.50% Senior Notes due 2020 [filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on
December 10, 2010, and incorporated herein by reference].
Form of Global Security for the 4.150% Senior Notes due 2024 [filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on
November 24, 2014, and incorporated herein by reference].
Form of Global Security for the 5.450% Senior Notes due 2044 [filed as Exhibit 4.4 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on
November 24, 2014, and incorporated herein by reference].
Form of Global Security for the 1.875% Senior Notes due 2021 [filed as Exhibit 4.8 to the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2014 (No. 1-12658), and incorporated herein by reference].
Fifth Supplemental Indenture, dated as of November 25, 2019, among Albemarle Corporation, Albemarle Wodgina Pty Ltd and U.S. Bank National
Association, as trustee [filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on November 25, 2019, and incorporated
herein by reference].
4.10
Form of Floating Rate Note due 2022 [filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on November 25, 2019, and
incorporated herein by reference].
129
Albemarle Corporation and Subsidiaries
4.11
4.12
4.13
4.14
4.15
#10.1
#10.2
#10.3
#10.4
#10.5
#10.6
#10.7
#10.8
#10.9
#10.10
#10.11
Form of 3.450% Note due 2029 [filed as Exhibit 4.3 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on November 25, 2019, and
incorporated herein by reference].
Form of 1.125% Note due 2025 [filed as Exhibit 4.4 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on November 25, 2019, and
incorporated herein by reference].
Form of 1.625% Note due 2028 [filed as Exhibit 4.5 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on November 25, 2019, and
incorporated herein by reference].
Description of Securities [filed as Exhibit 4.14 to the Company's Annual Report on Form 10-K for the year ended December 31, 2019 (No. 1-12658), and
incorporated herein by reference].
Sixth Supplemental Indenture, dated March 30, 2021, among Albemarle Corporation, Albemarle New Holding GmbH, and U.S. Bank National Association,
as trustee [filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on March 31, 2021, and incorporated herein by reference].
2013 Stock Compensation and Deferral Election Plan for Non-Employee Directors of Albemarle Corporation [filed as Annex A to the Company’s definitive
Proxy Statement on Schedule 14A (No. 1-12658) filed on March 28, 2013, and incorporated herein by reference].
First Amendment to the Albemarle Corporation Stock Compensation and Deferral Election Plan [filed as Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2016 (No. 1-12658), and incorporated herein by reference].
Compensation Arrangement with Luther C. Kissam, IV, dated August 29, 2003 [filed as Exhibit 10.10 to the Company’s Annual Report on Form 10-K for the
year ended December 31, 2005 (No. 1-12658), and incorporated herein by reference].
Form of Notice of Option Grant under the Albemarle Corporation 2008 Incentive Plan [filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K
(No. 1-12658) filed on March 2, 2016, and incorporated herein by reference].
Form of Notice of TSR Performance Unit Award [filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on March 2, 2016,
and incorporated herein by reference].
Form Notice of Restricted Stock Unit Award under the Albemarle Corporation 2008 Incentive Plan [filed as Exhibit 10.4 to the Company’s Current Report on
Form 8-K (No. 1-12658) filed on December 9, 2016, and incorporated herein by reference].
Form of Notice of TSR Performance Unit Award under the Albemarle Corporation 2008 Incentive Plan [filed as Exhibit 10.5 to the Company’s Current
Report on Form 8-K (No. 1-12658) filed on December 9, 2016, and incorporated herein by reference].
Form of Notice of TSR Performance Unit Award under the Albemarle Corporation 2017 Incentive Plan [filed as Exhibit 10.1 to the Company’s Quarterly
Report on Form 10-Q (No. 1-12658) filed on May 9, 2018, and incorporated herein by reference].
Form of Notice of Option Grant under the Albemarle Corporation 2017 Incentive Plan [filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q
(No. 1-12658) filed on May 9, 2018, and incorporated herein by reference].
Form of Notice of Restricted Stock Unit Award under the Albemarle Corporation 2017 Incentive Plan [filed as Exhibit 10.3 to the Company’s Quarterly
Report on Form 10-Q (No. 1-12658) filed on May 9, 2018, and incorporated herein by reference].
Form of Notice of ROIC Performance Unit Award under the Albemarle Corporation 2017 Incentive Plan [filed as Exhibit 10.2 to the Company’s Quarterly
Report on Form 10-Q (No. 1-12658) filed on May 8, 2019, and incorporated herein by reference].
130
Albemarle Corporation and Subsidiaries
#10.12
#10.13
#10.14
#10.15
#10.16
#10.17
#10.18
#10.19
#10.20
#10.21
#10.22
#10.23
#10.24
#10.25
Notice of 3-Year Cliff Vest Restricted Stock Unit Award under the Albemarle Corporation 2017 Incentive Plan [filed as Exhibit 10.5 to the Company’s
Quarterly Report on Form 10-Q (No. 1-12658) filed on May 8, 2019, and incorporated herein by reference].
Form of Notice of NEO Special Retention Restricted Stock Unit Award under the Albemarle Corporation 2017 Incentive Plan [filed as Exhibit 10.1 to the
Company’s Current Report on Form 8-K (No. 1-12658) filed on February 27, 2020, and incorporated herein by reference].
Form of Notice of Special Restricted Stock Unit Award under the Albemarle Corporation 2017 Incentive Plan [filed as Exhibit 10.6 to the Company’s Current
Report on Form 8-K (No. 1-12658) filed on February 27, 2020, and incorporated herein by reference].
Amended and Restated Albemarle Corporation Supplemental Executive Retirement Plan, effective as of January 1, 2005 [filed as Exhibit 10.13 to the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (No. 1-12658), and incorporated herein by reference].
First Amendment to the Albemarle Corporation Supplemental Executive Retirement Plan, dated December 1, 2010 [filed as Exhibit 10.14 to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (No. 1-12658), and incorporated herein by reference].
Second Amendment to the Albemarle Corporation Supplemental Executive Retirement Plan, dated December 18, 2011 [filed as Exhibit 10.15 to the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (No. 1-12658), and incorporated herein by reference].
Third Amendment to the Albemarle Corporation Supplemental Executive Retirement Plan, dated December 2, 2013 [filed as Exhibit 10.16 to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (No. 1-12658), and incorporated herein by reference].
Form of Severance Compensation Agreement (Pension-Eligible Employees) [filed as Exhibit 10.19 to the Company’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2015 (No. 1-12658), and incorporated herein by reference].
Form of Severance Compensation Agreement (Non-Pension-Eligible Employees) [filed as Exhibit 10.20 to the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2015 (No. 1-12658), and incorporated herein by reference].
Form of Amendment to Severance Compensation Agreement [filed as Exhibit 10.21 to the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2015 (No. 1-12658), and incorporated herein by reference].
Second Amendment to Severance Compensation Agreement between Luther C. Kissam, IV and Albemarle Corporation [filed as Exhibit 10.1 to the
Company’s Current Report on Form 8-K (No. 1-12658) filed on December 9, 2016, and incorporated herein by reference].
Form of Second Amendment to Severance Compensation Agreement between each of Karen Narwold and Scott Tozier, and Albemarle Corporation [filed as
Exhibit 10.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on December 9, 2016, and incorporated herein by reference].
Albemarle Corporation Severance Pay Plan, as revised effective as of December 13, 2006 [filed as Exhibit 10.6 to the Company’s Current Report on Form 8-
K (No. 1-12658) filed on December 18, 2006, and incorporated herein by reference].
Amended and Restated Albemarle Corporation Benefits Protection Trust, effective as of December 13, 2006 [filed as Exhibit 10.9 to the Company’s Current
Report on Form 8-K (No. 1-12658) filed on December 18, 2006, and incorporated herein by reference].
131
Albemarle Corporation and Subsidiaries
#10.26
#10.27
#10.28
#10.29
#10.30
#10.31
#10.32
#10.33
#10.34
#10.35
#10.36
#10.37
#10.38
10.39
Albemarle Corporation Employee Relocation Policy [filed as Exhibit 10.33 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30,
2008 (No. 1-12658), and incorporated herein by reference].
Albemarle Corporation 2008 Incentive Plan, as amended and restated as of April 20, 2010 [filed as Exhibit 10.1 to the Company’s Registration Statement on
Form S-8 (No. 333-166828) filed on May 14, 2010, and incorporated herein by reference].
Amended and Restated Albemarle Corporation Executive Deferred Compensation Plan, effective as of January 1, 2013 [filed as Exhibit 10.23 to the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (No. 1-12658), and incorporated herein by reference].
First Amendment to the Albemarle Corporation Executive Deferred Compensation Plan, dated as of November 14, 2014 [filed as Exhibit 10.24 to the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 (No. 1-12658), and incorporated herein by reference].
Second Amendment to the Albemarle Corporation Executive Deferred Compensation Plan, dated as of February 12, 2015 [filed as Exhibit 10.28 to the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (No. 1-12658), and incorporated herein by reference].
Third Amendment to the Albemarle Corporation Executive Deferred Compensation Plan, dated as of July 31, 2015 [filed as Exhibit 10.29 to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (No. 1-12658), and incorporated herein by reference].
Fourth Amendment to the Albemarle Corporation Executive Deferred Compensation Plan, dated as of December 17, 2015 [filed as Exhibit 10.30 to the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 (No. 1-12658), and incorporated herein by reference].
Fifth Amendment to the Albemarle Corporation Executive Deferred Compensation Plan, dated as of March 31, 2017 [filed as Exhibit 10.38 to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (No. 1-12658), and incorporated herein by reference].
Sixth Amendment to the Albemarle Corporation Executive Deferred Compensation Plan, dated as of July 5, 2017 [filed as Exhibit 10.39 to the Company’s
Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (No. 1-12658), and incorporated herein by reference].
Seventh Amendment to the Albemarle Corporation Executive Deferred Compensation Plan, dated as of November 9, 2017 [filed as Exhibit 10.40 to the
Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (No. 1-12658), and incorporated herein by reference].
Albemarle Corporation 2017 Incentive Plan, adopted May 12, 2017 [filed as Appendix A to the Company’s Definitive Proxy Statement filed on March 30,
2017, and incorporated herein by reference].
Albemarle Corporation Compensation Recoupment and Forfeiture Policy effective July 10, 2017 [filed as Exhibit 10.1 to the Company’s Quarterly Report on
Form 10-Q for the quarter ended June 30, 2017 (No. 1-12658), and incorporated herein by reference].
Form of letter agreement dated February 26, 2018 between the Company and each of Luther C. Kissam, IV, Karen Narwold, Scott Tozier and Donald J.
LaBauve, Jr. [filed as Exhibit 10.43 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 (No. 1-12658), and
incorporated herein by reference].
Credit Agreement, dated as of June 21, 2018, among Albemarle Corporation, Albemarle Global Finance Company SCA and Albemarle Europe SPRL, as
borrowers, certain of the Company’s subsidiaries that from time to time become parties thereto, the several banks and other financial institutions as may from
time to time become parties thereto, and Bank of America, N.A., as Administrative Agent and Swing Line Lender [filed as Exhibit 10.1 to the Company’s
Quarterly Report on Form 10-Q (No. 1-12658) filed on August 7, 2018, and incorporated herein by reference].
132
Albemarle Corporation and Subsidiaries
10.40
10.41
10.42
10.43
10.44
10.45
10.46
10.47
10.48
10.49
10.50
10.51
Asset Sale and Share Subscription Agreement, dated December 14, 2018, by and among Albemarle Corporation, Albemarle Wodgina Pty Ltd, a wholly-
owned subsidiary of Albemarle Corporation, Mineral Resources Limited and Wodgina Lithium Pty Ltd, a wholly-owned subsidiary of Mineral Resources
Limited [filed as Exhibit 10.41 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (No. 1-12658), and incorporated
herein by reference].
Form of Wodgina Joint Venture Agreement by and among Wodgina Lithium Pty Ltd, Albemarle Wodgina Pty Ltd and Wodgina Lithium Operations Pty Ltd
[filed as Exhibit 10.42 to the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 (No. 1-12658), and incorporated herein by
reference].
Form of Letter Agreement, dated June 13, 2019, among Wodgina Lithium Pty Ltd, Albemarle Wodgina Pty Ltd, Mineral Resources Limited and the Company
[filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (No. 1-12658) filed on August 7, 2019, and incorporated herein by reference].
Form of Amendment Deed to Asset Sale and Share Subscription Agreement, dated August 1, 2019, among Wodgina Lithium Pty Ltd, Albemarle Wodgina Pty
Ltd, Mineral Resources Limited and the Company [filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (No. 1-12658) filed on August 7,
2019, and incorporated herein by reference].
Form of MRL Kemerton Asset Sale Agreement among Wodgina Lithium Pty Ltd, Albemarle Wodgina Pty Ltd, Mineral Resources Limited, Albemarle
Lithium Pty Ltd and the Company [filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (No. 1-12658) filed on August 7, 2019, and
incorporated herein by reference].
Form of break fee letter, dated August 1, 2019, between the Company and Mineral Resources Limited [filed as Exhibit 10.4 to the Company’s Quarterly
Report on Form 10-Q (No. 1-12658) filed on August 7, 2019, and incorporated herein by reference].
Syndicated Facility Agreement, dated as of August 14, 2019, among Albemarle Corporation, Albemarle Finance Company B.V., Albemarle New Holding
GmbH, Albemarle Wodgina Pty Ltd, the Lenders Party Thereto and JPMorgan Chase Bank, N.A., as Administrative Agent [filed as Exhibit 10.1 to the
Company’s Quarterly Report on Form 10-Q (No. 1-12658) filed on November 6, 2019, and incorporated herein by reference].
First Amendment to Credit Agreement, dated as of August 14, 2019, among Albemarle Corporation, Albemarle Europe SRL, the Lenders party thereto, and
Bank of America, N.A., as Administrative Agent for the Lenders [filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q (No. 1-12658) filed
on November 6, 2019, and incorporated herein by reference].
MARBL Joint Venture Agreement, dated August 1, 2019, among Wodgina Lithium Pty Ltd, Albemarle Wodgina Pty Ltd, and MARBL Lithium Operations
[filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (No. 1-12658) filed on November 6, 2019, and incorporated herein by reference].
Amendment Deed to Asset Sale and Share Subscription Agreement and MRL Kemerton ASA, dated August 1, 2019, among Wodgina Lithium Pty Ltd,
Albemarle Wodgina Pty Ltd, Mineral Resources Limited, Albemarle Corporation, and Albemarle Lithium Pty Ltd [filed as Exhibit 10.4 to the Company’s
Quarterly Report on Form 10-Q (No. 1-12658) filed on November 6, 2019, and incorporated herein by reference].
Second Amendment to Credit Agreement, dated as of May 11, 2020, among Albemarle Corporation, Albemarle Europe SRL, the Lenders party thereto, and
Bank of America, N.A., as Administrative Agent for the Lenders [filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (No. 1-12658) filed
on May 11, 2020, and incorporated herein by reference].
First Amendment to Syndicated Facility Agreement, dated as of May 11, 2020, among Albemarle Corporation, Albemarle Finance Company B.V., Albemarle
New Holding GmbH, Albemarle Wodgina Pty Ltd, the Lenders Party Thereto and JPMorgan Chase Bank, N.A., as Administrative Agent [filed as Exhibit 10.2
to the Company’s Quarterly Report on Form 10-Q (No. 1-12658) filed on May 11, 2020, and incorporated herein by reference].
133
Albemarle Corporation and Subsidiaries
#10.52
#10.53
#10.54
#10.55
#10.56
10.57
10.58
#10.59
#10.60
*10.61
*10.62
Executive Employment Agreement with J. Kent Masters, dated April 20, 2020 [filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q (No. 1-
12658) filed on May 11, 2020, and incorporated herein by reference].
Change in Control Agreement with J. Kent Masters, dated April 20, 2020 [filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q (No. 1-
12658) filed on May 11, 2020, and incorporated herein by reference].
Notice of Restricted Stock Unit Award to J. Kent Masters, dated May 8, 2020 [filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q (No. 1-
12658) filed on May 11, 2020, and incorporated herein by reference].
Second Amendment to the Albemarle Corporation 2013 Stock Compensation and Deferral Election Plan for Non-Employee Directors [filed as Exhibit 10.1 to
the Company’s Quarterly Report on Form 10-Q (No. 1-12658) filed on August 5, 2020, and incorporated herein by reference].
Third Amendment to the Albemarle Corporation 2013 Stock Compensation and Deferral Election Plan for Non-Employee Directors [filed as Exhibit 10.56 to
the Company's Annual Report on From 10-K (No. 1-12658) filed on February 19, 2021 and incorporated herein by reference].
Second Amendment to Syndicated Facility Agreement, dated as of December 15, 2020, among Albemarle Corporation, Albemarle Finance Company B.V.,
Albemarle New Holding GmbH, Albemarle Wodgina Pty Ltd, the Lenders Party Thereto and JPMorgan Chase Bank, N.A., as Administrative Agent [filed as
Exhibit 10.57 to the Company's Annual Report on From 10-K (No. 1-12658) filed on February 19, 2021 and incorporated herein by reference].
Sale, Purchase and Contribution Agreement, dated February 25, 2021 among Albemarle Corporation, W. R. Grace & Co.-Conn and Fine Chemical
Manufacturing Services LLC [filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (No. 1-12658) filed on May 5, 2021, and incorporated
herein by reference].
Fourth Amendment to the Albemarle Corporation 2013 Stock Compensation and Deferral Election Plan for Non-Employee Directors [filed as Exhibit 10.1 to
the Company’s Quarterly Report on Form 10-Q (No. 1-12658) filed on August 4, 2021, and incorporated herein by reference].
Letter Agreement with Raphael Crawford, dated November 3, 2021 [filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q (No. 1-12658)
filed on November 4, 2021, and incorporated herein by reference].
Third Amendment to Credit Agreement, dated as of December 10, 2021, among Albemarle Corporation, Albemarle Europe SRL, the Lenders party thereto,
and Bank of America, N.A., as Administrative Agent for the Lenders.
Second Amendment and Restatement Agreement, dated as of December 10, 2021, among Albemarle Corporation, the Lenders Party hereto, and JPMorgan
Chase Bank, N.A., as Administrative Agent.
*21.1
Subsidiaries of the Company.
*23.1
Consent of PricewaterhouseCoopers LLP.
23.2
23.3
Consent of SRK Consulting (U.S), Inc. regarding the Greenbushes property [filed as Exhibit 23.1 to the Company’s Current Report on Form 8-K (No. 1-
12658) filed on February 18, 2022, and incorporated herein by reference].
Consent of SRK Consulting (U.S), Inc. regarding the Wodgina property [filed as Exhibit 23.2 to the Company’s Current Report on Form 8-K (No. 1-12658)
filed on February 18, 2022, and incorporated herein by reference].
134
Albemarle Corporation and Subsidiaries
23.4
23.5
23.6
23.7
Consent of SRK Consulting (U.S), Inc. regarding the Salar de Atacama property [filed as Exhibit 23.3 to the Company’s Current Report on Form 8-K (No. 1-
12658) filed on February 18, 2022, and incorporated herein by reference].
Consent of SRK Consulting (U.S), Inc. regarding the Silver Peak property [filed as Exhibit 23.4 to the Company’s Current Report on Form 8-K (No. 1-12658)
filed on February 18, 2022, and incorporated herein by reference].
Consent of RPS Energy Canada Ltd regarding bromine reserves and resources [filed as Exhibit 23.5 to the Company’s Current Report on Form 8-K (No. 1-
12658) filed on February 18, 2022, and incorporated herein by reference].
Consent of RESPEC regarding bromine reserves and resources [filed as Exhibit 23.6 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on
February 18, 2022, and incorporated herein by reference].
*31.1
Certification of Chief Executive Officer pursuant to Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended.
*31.2
Certification of Chief Financial Officer pursuant to Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended.
*32.1
Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*32.2
Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
96.1
96.2
96.3
96.4
96.5
96.6
*101
SEC Technical Report Summary, Pre-Feasibility Study, Greenbushes Mine, Western Australia, prepared by SRK Consulting (U.S), Inc., dated January 28,
2022 [filed as Exhibit 96.1 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 18, 2022, and incorporated herein by reference].
SEC Technical Report Summary, Initial Assessment, Wodgina, Western Australia, prepared by SRK Consulting (U.S), Inc., dated December 31, 2021 [filed as
Exhibit 96.2 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 18, 2022, and incorporated herein by reference].
SEC Technical Report Summary, Pre-Feasibility Study, Salar de Atacama Region II, Chile, prepared by SRK Consulting (U.S), Inc., dated January 28, 2022
[filed as Exhibit 96.3 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 18, 2022, and incorporated herein by reference].
SEC Technical Report Summary Pre-Feasibility Study, Silver Peak Lithium Operation, Nevada, USA, prepared by SRK Consulting (U.S), Inc., dated
September 30, 2021 [filed as Exhibit 96.4 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 18, 2022, and incorporated herein
by reference].
SEC Technical Report Summary for Jordan Bromine Operation, prepared by RPS Energy Canada Ltd and RESPEC Consulting Inc., dated February 7, 2022
[filed as Exhibit 96.5 to the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 18, 2022, and incorporated herein by reference].
SEC Technical Report Summary for Magnolia Field Bromine Reserves, prepared by RPS Energy Canada Ltd, dated February 7, 2022 [filed as Exhibit 96.6 to
the Company’s Current Report on Form 8-K (No. 1-12658) filed on February 18, 2022, and incorporated herein by reference].
Interactive Data Files (Annual Report on Form 10-K, for the fiscal year ended December 31, 2021, furnished in XBRL (eXtensible Business Reporting
Language)).
135
Albemarle Corporation and Subsidiaries
Attached as Exhibit 101 to this report are the following documents formatted in XBRL: (i) the Consolidated Statements of Income for the fiscal years ended
December 31, 2021, 2020, and 2019, (ii) the Consolidated Statements of Comprehensive Income for the fiscal years ended December 31, 2021, 2020 and
2019, (iii) the Consolidated Balance Sheets at December 31, 2021 and 2020, (iv) the Consolidated Statements of Changes in Equity for the fiscal years ended
December 31, 2021, 2020 and 2019, (v) the Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2021, 2020 and 2019 and (vi) the
Notes to Consolidated Financial Statements.
#
*
Management contract or compensatory plan or arrangement.
Included with this filing.
Item 16.
Form 10-K Summary.
NONE
136
Albemarle Corporation and Subsidiaries
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly
SIGNATURES
ALBEMARLE CORPORATION
(Registrant)
By:
authorized.
Dated: February 18, 2022
/S/ J. KENT MASTERS
(J. Kent Masters)
Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated as of
February 18, 2022.
Signature
/S/ J. KENT MASTERS
(J. Kent Masters)
/S/ SCOTT A. TOZIER
(Scott A. Tozier)
/S/ JOHN C. BARICHIVICH III
(John C. Barichivich III)
/S/ M. LAUREN BRLAS
(M. Lauren Brlas)
/S/ GLENDA J. MINOR
(Glenda J. Minor)
/S/ JAMES J. O’BRIEN
(James J. O’Brien)
/S/ DIARMUID B. O’CONNELL
(Diarmuid B. O’Connell)
/S/ DEAN L. SEAVERS
(Dean L. Seavers)
/S/ GERALD A. STEINER
(Gerald A. Steiner)
/S/ HOLLY A. VAN DEURSEN
(Holly A. Van Deursen)
/S/ ALEJANDRO D. WOLFF
(Alejandro D. Wolff)
Title
Chairman, President and Chief Executive Officer (principal executive
officer)
Executive Vice President, Chief Financial Officer (principal financial
officer)
Vice President, Corporate Controller and Chief Accounting Officer (principal accounting officer)
Director
Director
Director
Director
Director
Director
Director
Director
137
Exhibit 10.61
THIS THIRD AMENDMENT TO CREDIT AGREEMENT, dated as of December 10, 2021 (this “Amendment”), is entered into among ALBEMARLE CORPORATION, a
Virginia corporation (the “Company”), ALBEMARLE EUROPE SRL, a limited liability company organized under the laws of Belgium (“société à responsabilité limitée”) (“Albemarle
Europe”, and together with the Company and any other Subsidiary of the Company party hereto pursuant to Section 2.14, collectively, the “Borrowers”), the Lenders party hereto, and
BANK OF AMERICA, N.A., as Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”). Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed thereto in the Credit Agreement (as defined below and as amended by this Amendment).
THIRD AMENDMENT TO CREDIT AGREEMENT
WHEREAS, the Borrowers, the Lenders and the Administrative Agent are parties to that certain Credit Agreement, dated as of June 21, 2018 (as amended by that certain First
Amendment to Credit Agreement, dated as of August 14, 2019 and that certain Second Amendment to Credit Agreement dated as of May 11, 2020, the “Credit Agreement”);
RECITALS
WHEREAS, the Company has requested certain amendments to the Credit Agreement; and
WHEREAS, the parties hereto have agreed to amend the Credit Agreement as provided herein.
NOW, THEREFORE, in consideration of the agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Amendments: Effective upon satisfaction of the conditions precedent set forth in Section 2 below:
AGREEMENT
(a) The Credit Agreement (but not the schedules and exhibits thereto, except as set forth in clauses (b) and (c) below) is hereby amended and restated in its entirety as
set forth in Annex A attached hereto.
(b) Exhibit A to the Credit Agreement is hereby amended and restated in its entirety as set forth in Annex B attached hereto.
(c) Schedule 8.01 to the Credit Agreement is hereby amended and restated in its entirety as set forth in Annex C attached hereto.
2. Effectiveness; Conditions Precedent. This Amendment shall be and become effective as of date hereof when all of the conditions set forth in this Section 2 shall have been
satisfied.
(a) Execution of Counterparts of Amendment. The Administrative Agent shall have received counterparts of this Amendment, which collectively shall have been duly
executed on behalf of each of the Borrowers, the Administrative Agent and the Lenders.
1
(b) Lender/Arranger Fees. The Company shall have paid all agreed arrangement fees and consent fees to each Lender executing this Amendment and BofA Securities,
Inc., as applicable.
3. Expenses. The Borrowers agree to reimburse the Administrative Agent for all reasonable documented out-of-pocket costs and expenses of the Administrative Agent in
connection with the preparation, execution and delivery of this Amendment, including without limitation the reasonable documented fees and expenses of Moore & Van Allen PLLC.
4. Ratification. Each Borrower acknowledges and consents to the terms set forth herein and agrees that this Amendment does not impair, reduce or limit any of its obligations
under the Loan Documents, as amended hereby. This Amendment is a Loan Document.
5. Authority/Enforceability. Each Borrower represents and warrants as follows:
(a) It has taken all necessary action to authorize the execution, delivery and performance of this Amendment.
(b) This Amendment has been duly executed and delivered by such Borrower and constitutes its legal, valid and binding obligations, enforceable in accordance with its
terms, except as such enforceability may be subject to (i) applicable Debtor Relief Laws, (ii) fraudulent transfer or conveyance laws, and (iii) general principles of equity
(regardless of whether such enforceability is considered in a proceeding at law or in equity).
(c) No consent, approval, authorization or order of, or filing, registration or qualification with, any court or Governmental Authority or third party is required in
connection with the execution, delivery or performance by such Borrower of this Amendment, except for those the failure to obtain, occur or make would not reasonably be
expected to have a Material Adverse Effect.
(d) The execution and delivery of this Amendment does not (i) violate, contravene or conflict with any provision of its Organization Documents or (ii) violate,
contravene or conflict with any Laws applicable to it, except in the case of clause (ii), to the extent that it would not reasonably be expected to have a Material Adverse Effect.
6. Representations and Warranties of the Borrowers. Each Borrower represents and warrants to the Lenders that after giving effect to this Amendment (a) the representations
and warranties set forth in Article VI of the Credit Agreement are true and correct in all material respects as of the date hereof unless they specifically refer to an earlier date, in which
case they shall be true and correct in all material respects as of such earlier date, and (b) no Default exists.
7. Counterparts/Telecopy. This Amendment may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. Delivery of executed counterparts of this Amendment by telecopy or other secure electronic format (.pdf) shall be effective as an original.
8. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
2
9. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
10. Headings. The headings of the sections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this
Amendment.
11. Severability. If any provision of this Amendment is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this
Amendment shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
[signature pages follow]
3
Each of the parties hereto has caused a counterpart of this Amendment to be duly executed and delivered as of the date first above written.
BORROWERS: ALBEMARLE CORPORATION,
a Virginia corporation
By: /s/ Karen G. Narwold
Name: Karen G. Narwold
Title: Executive Vice President, Chief
Administrative Officer, General Counsel
and Corporate Secretary
ALBEMARLE EUROPE SRL,
a limited liability company organized under the laws of Belgium
By: /s/ Theo Moons
Name: Theo Moons
Title: Gérant
ALBEMARLE CORPORATION
THIRD AMENDMENT TO CREDIT AGREEMENT
ADMINISTRATIVE
AGENT: BANK OF AMERICA, N.A.,
as Administrative Agent
By: /s/ Ronaldo Naval
Name: Ronaldo Naval
Title: Vice President
ALBEMARLE CORPORATION
THIRD AMENDMENT TO CREDIT AGREEMENT
LENDERS: BANK OF AMERICA, N.A.,
as a Lender, Swing Line Lender and L/C Issuer
By: /s/ Mukesh Singh
Name: Mukesh Singh
Title: Director
JPMORGAN CHASE BANK, N.A.,
as a Lender
By: /s/ Peter S. Predun
Name: Peter S. Predun
Title: Executive Director
WELLS FARGO BANK, NATIONAL ASSOCIATION, as a Lender
By: /s/ Nathan R. Rantala
Name: Nathan R. Rantala
Title: Managing Director
MUFG Bank, Ltd., f/k/a The Bank of Tokyo-Mitsubishi UFJ, Ltd.
As a lender
By: /s/ Deborah White
Name: Deborah White
Title: Director
MIZUHO BANK, LTD., as a
Lender
By: /s/ Donna DeMagistris
Name: Donna DeMagistris
Title: Executive Director
HSBC BANK USA, NATIONAL ASSOCIATION,
as a Lender
By: /s/ Peggy Yip
Name: Peggy Yip
Title: Director
ALBEMARLE CORPORATION
THIRD AMENDMENT TO CREDIT AGREEMENT
SUMITOMO MITSUI BANKING CORPORATION,
as a Lender
By: /s/ Jun Ashley
Name: Jun Ashley
Title: Director
U.S. BANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Edward Hanson
Name: Edward Hanson
Title: Senior Vice President
THE NORTHERN TRUST COMPANY,
as a Lender
By: /s/ Andrew D. Holtz
Name: Andrew D. Holtz
Title: Senior Vice President
SANTANDER BANK, N.A.,
as a Lender
By: /s/ Andres Barbosa
Name: Andres Barbosa
Title: Managing Director
By: /s/ Zara Kamal
Name: Zara Kamal
Title: Vice President
TRUIST BANK,
as a Lender
By: /s/ Katherine Bass
Name: Katherine Bass
Title: Director
ALBEMARLE CORPORATION
THIRD AMENDMENT TO CREDIT AGREEMENT
See attached.
Annex A
Amended Credit Agreement
ANNEX A TO THIRD AMENDMENT TO CREDIT AGREEMENT
Published CUSIP: 01265LAN1
CREDIT AGREEMENT
Dated as of June 21, 2018
among
ALBEMARLE CORPORATION,
(the “Company”),
CERTAIN OTHER SUBSIDIARIES OF THE COMPANY,
THE LENDERS PARTY HERETO,
BANK OF AMERICA, N.A.,
as Administrative Agent and Swing Line Lender,
JPMORGAN CHASE BANK, N.A.,
as Syndication Agent
WELLS FARGO BANK, NATIONAL ASSOCIATION,
MUFG BANK, LTD. F/K/A THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,
MIZUHO BANK, LTD.,
HSBC BANK USA, NATIONAL ASSOCIATION,
SUMITOMO MITSUI BANKING CORPORATION
and
U.S. BANK NATIONAL ASSOCIATION,
as Co-Documentation Agents
Arranged By:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
and
JPMORGAN CHASE BANK, N.A.,
as Joint Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
Section Page
ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS
1.01 Defined Terms.
1.02 Other Interpretive Provisions.
1.03 Accounting Terms.
1.04 Rounding.
1.05 References to Agreements and Laws.
1.06 Times of Day; Rates.
1.07 Letter of Credit Amounts.
1.08 Exchange Rates; Currency Equivalents.
1.09 Additional Alternative Currencies.
1.10 Redenomination of Certain Alternative Currencies; Change of Currency.
1.11 Belgium Terms.
1.12 Dutch Terms.
1.13 Interest Rate; LIBOR Notification.
ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 Committed Loans.
2.02 Borrowings, Conversions and Continuations of Committed Loans.
2.03 Letters of Credit.
2.04 Swing Line Loans.
2.05 Prepayments.
2.06 Termination or Reduction of Commitments.
2.07 Repayment of Loans.
2.08 Interest.
2.09 Fees.
2.10 Computation of Interest and Fees.
2.11 Evidence of Debt.
2.12 Payments Generally; Administrative Agent’s Clawback.
2.13 Sharing of Payments.
2.14 Designated Borrowers.
2.15 Extension of Maturity Date.
2.16 Cash Collateral.
2.17 Defaulting Lenders.
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 Taxes.
3.02 Illegality.
3.03 Inability to Determine Rates.
3.04 Increased Cost and Reduced Return; Capital Adequacy.
3.05 Funding Losses.
3.06 Matters Applicable to all Requests for Compensation.
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3.07 Survival.
ARTICLE IV. GUARANTY
4.01 The Guaranty.
4.02 Obligations Unconditional.
4.03 Reinstatement.
4.04 Certain Additional Waivers.
4.05 Remedies.
4.06 Guarantee of Payment; Continuing Guarantee.
ARTICLE V. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
5.01 Conditions of Initial Credit Extension.
5.02 Conditions to all Credit Extensions.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES
6.01 Existence, Qualification and Power.
6.02 Authorization; No Contravention.
6.03 Governmental Authorization; Other Consents.
6.04 Binding Effect.
6.05 Financial Statements; No Material Adverse Change.
6.06 Litigation.
6.07 No Default.
6.08 Ownership of Property; Liens.
6.09 Environmental Compliance.
6.10 Insurance.
6.11 Taxes.
6.12 ERISA Compliance.
6.13 Margin Regulations; Investment Company Act.
6.14 Disclosure.
6.15 Compliance with Laws.
6.16 Intellectual Property; Licenses, Etc.
6.17 Subsidiaries.
6.18 Solvency.
6.19 Non-Domestic Borrowers.
6.20 OFAC; Anti-Corruption Laws.
6.21 Affected Financial Institutions.
ARTICLE VII. AFFIRMATIVE COVENANTS
7.01 Financial Statements.
7.02 Certificates; Other Information.
7.03 Notices.
7.04 Payment of Obligations.
7.05 Preservation of Existence, Etc.
7.06 Maintenance of Properties.
7.07 Maintenance of Insurance.
7.08 Compliance with Laws.
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7.09 Books and Records.
7.10 Inspection Rights.
7.11 Use of Proceeds.
ARTICLE VIII. NEGATIVE COVENANTS
8.01 Liens.
8.02 Mergers, Dispositions, etc.
8.03 Change in Nature of Business.
8.04 Transactions with Affiliates.
8.05 Use of Proceeds.
8.06 Financial Covenant.
8.07 Subsidiary Indebtedness.
8.08 Sanctions.
8.09 Anti-Corruption Laws.
ARTICLE IX. EVENTS OF DEFAULT AND REMEDIES
9.01 Events of Default.
9.02 Remedies Upon Event of Default.
9.03 Application of Funds.
ARTICLE X. ADMINISTRATIVE AGENT
10.01 Appointment and Authority.
10.02 Rights as a Lender.
10.03 Exculpatory Provisions.
10.04 Reliance by Administrative Agent.
10.05 Delegation of Duties.
10.06 Resignation of Administrative Agent.
10.07 Non-Reliance on Administrative Agent and Other Lenders.
10.08 No Other Duties, Etc.
10.09 Administrative Agent May File Proofs of Claim.
10.10 ERISA Matters.
10.11 Recovery of Erroneous Payments.
ARTICLE XI. MISCELLANEOUS
11.01 Amendments, Etc.
11.02 Notices; Effectiveness; Electronic Communication.
11.03 No Waiver; Cumulative Remedies; Enforcement.
11.04 Expenses; Indemnity; Damage Waiver.
11.05 Concerning Joint and Several Liability of the Domestic Borrowers.
11.06 Payments Set Aside.
11.07 Successors and Assigns.
11.08 Confidentiality.
11.09 Set-off.
11.10 Interest Rate Limitation.
11.11 Counterparts.
11.12 Integration; Effectiveness.
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11.13 Survival of Representations and Warranties.
11.14 Severability.
11.15 Tax Forms.
11.16 Replacement of Lenders.
11.17 USA PATRIOT Act Notice.
11.18 Governing Law; Jurisdiction; Etc.
11.19 Waiver of Right to Trial by Jury.
11.20 Judgment Currency.
11.21 No Advisory or Fiduciary Responsibility.
11.22 Electronic Execution; Electronic Records; Counterparts.
11.23 Appointment of Company.
11.24 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.
11.25 Acknowledgement Regarding any Supported QFCs.
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SCHEDULES
2.01 Commitments and Pro Rata Shares
6.09 Environmental Matters
6.17 Subsidiaries
6.20 Certain Anti-Corruption Laws Matters
8.01 Existing Liens
11.02 Eurocurrency and Domestic Lending Offices; Notice Addresses
EXHIBITS
A Form of Committed Loan Notice
B Form of Swing Line Loan Notice
C Form of Note
D Form of Compliance Certificate
E Form of Assignment and Assumption
F Form of Administrative Questionnaire
G Form of Designated Borrower Request and Assumption Agreement
H Form of Designated Borrower Joinder Agreement
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This CREDIT AGREEMENT is entered into as of June 21, 2018 among ALBEMARLE CORPORATION, a Virginia corporation (the “Company”), ALBEMARLE EUROPE
SRL, a limited liability company organized under the laws of Belgium (“société à responsabilité limitée”) (“Albemarle Europe” or the “Belgian Borrower” and together with the
Company and any other Subsidiary of the Company party hereto pursuant to Section 2.14, collectively, the “Borrowers”), the Lenders (defined herein), and BANK OF AMERICA, N.A.,
as Administrative Agent and Swing Line Lender.
CREDIT AGREEMENT
The Company has requested that the Lenders provide a revolving credit facility, and the Lenders are willing to do so on the terms and conditions set forth herein.
The revolving credit facility and the transactions contemplated hereunder are in the corporate interests of the Borrowers.
In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:
RECITALS
Article I.
DEFINITIONS AND ACCOUNTING TERMS
1.01
Defined Terms.
As used in this Agreement, the following terms shall have the meanings set forth below:
“Acquisition” by any Person means the acquisition by such Person, in a single transaction or in a series of related transactions, of all or substantially all of the assets of, or of a
business unit or division of, another Person or at least a majority of the securities having ordinary voting power for the election of directors, managing general partners or the equivalent
of another Person, in each case whether or not involving a merger or consolidation with such other Person and whether for cash, property, services, assumption of Indebtedness, securities
or otherwise.
“Additional Commitment Lender” has the meaning specified in Section 2.15.
“Administrative Agent” means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.
“Administrative Agent Fee Letter” means the letter agreement, dated May 18, 2018 among the Company, the Administrative Agent and BAS.
“Administrative Agent’s Office” means, with respect to any currency, the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 11.02 with respect
to such currency or such other address or account with respect to such currency as the Administrative Agent may from time to time notify the Company and the Lenders.
“Administrative Questionnaire” means an Administrative Questionnaire substantially in the form of Exhibit F or any other form approved by the Administrative Agent.
“Affected Financial Institution” means (a) any EEA Financial Institution or (b) UK Financial Institution.
“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common
Control with the Person specified. “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto. Without limiting the generality of the foregoing,
for purposes of determining Affiliates of a member of the Consolidated Group, a Person shall be deemed to be Controlled by another Person if such other Person possesses, directly or
indirectly, power to vote 35% or more of the securities having ordinary voting power for the election of directors, managing general partners or the equivalent.
“Agent Parties” has the meaning specified in Section 11.02.
“Aggregate Commitments” means the aggregate amount of Commitments of all the Lenders. The amount of the Aggregate Commitment in effect on the Closing Date is ONE
BILLION DOLLARS ($1,000,000,000).
“Agreement” means this Credit Agreement.
“Albemarle Europe” has the meaning specified in the introductory paragraph hereto.
“Alternative Currency” means each of British Pounds Sterling, Euro, Japanese Yen, Australian Dollars and Canadian Dollars and each other lawful currency (other than Dollars)
that is freely available and freely transferable and convertible into Dollars and that is approved in accordance with Section 1.09.
“Alternative Currency Daily Rate” means, for any day, with respect to any Credit Extension:
(a) denominated in British Pounds Sterling, the rate per annum equal to SONIA determined pursuant to the definition thereof plus the SONIA Adjustment;
(b) denominated in any other Alternative Currency (to the extent such Loans denominated in such currency will bear interest at a daily rate), the daily rate per annum as
designated with respect to such Alternative Currency at the time such Alternative Currency is approved by the Administrative Agent and the relevant Lenders pursuant to Section
1.09 plus the adjustment (if any) determined by the Administrative Agent and the relevant Lenders pursuant to Section 1.09;
provided, that, if any Alternative Currency Daily Rate shall be less than 0.0%, such rate shall be deemed 0.0% for purposes of this Agreement. Any change in an Alternative
Currency Daily Rate shall be effective from and including the date of such change without further notice.
“Alternative Currency Daily Rate Loan” means a Loan that bears interest at a rate based on the definition of “Alternative Currency Daily Rate.” All Alternative Currency Daily
Rate Loans must be denominated in an Alternative Currency.
“Alternative Currency Equivalent” means, at any time, with respect to any amount denominated in Dollars, the equivalent amount thereof in the applicable Alternative Currency
as determined by the Administrative Agent or the L/C Issuer, as the case may be, by reference to Bloomberg (or such other publicly available service for displaying exchange rates), to be
the exchange rate for the purchase of such Alternative Currency with Dollars at approximately 11:00 a.m. on the date two Business Days prior to the date as of which the foreign
exchange computation is made; provided, however, that if no such rate is available, the “Alternative Currency Equivalent” shall be determined by the Administrative Agent or the L/C
Issuer, as the case may be, using any reasonable method of determination it deems appropriate in its sole discretion.
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“Alternative Currency Loan” means an Alternative Currency Daily Rate Loan or an Alternative Currency Term Rate Loan, as applicable.
“Alternative Currency Term Rate” means, for any Interest Period, with respect to any Credit Extension:
(a)
denominated in Euro, the rate per annum equal to the Euro Interbank Offered Rate (“EURIBOR”), as published on the applicable Reuters screen page (or such
other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) on the day that is two TARGET Days
preceding the first day of such Interest Period with a term equivalent to such Interest Period;
(b)
denominated in Japanese Yen, the rate per annum equal to the Tokyo Interbank Offer Rate (“TIBOR”), as published on the applicable Reuters screen page (or
such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) on the Rate Determination Date with a
term equivalent to such Interest Period;
(c)
denominated in Australian Dollars, the rate per annum equal to the Bank Bill Swap Reference Bid Rate (“BBSY”), or a comparable or successor rate which rate
is approved by the Administrative Agent, as published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be
designated by the Administrative Agent from time to time) at or about 10:30 a.m. (Melbourne, Australia time) on the Rate Determination Date with a term equivalent to such
Interest Period; and
(d)
denominated in Canadian Dollars, the rate per annum equal to the Canadian Dealer Offered Rate (“CDOR”), or a comparable or successor rate which rate is
approved by the Administrative Agent, as published on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be
designated by the Administrative Agent from time to time) (in such case, the “CDOR Rate”) at or about 10:00a.m. (Toronto, Ontario time) on the Rate Determination Date with a
term equivalent to such Interest Period;
provided, that, if any Alternative Currency Term Rate shall be less than 0.0%, such rate shall be deemed 0.0% for purposes of this Agreement.
“Alternative Currency Term Rate Loan” means a Loan that bears interest at a rate based on the definition of “Alternative Currency Term Rate.” All Alternative Currency Term
Rate Loans must be denominated in an Alternative Currency.
“Applicable Authority” means with respect to any Alternative Currency, the applicable administrator for the Relevant Rate for such Alternative Currency or any Governmental
Authority having jurisdiction over the Administrative Agent or such administrator.
“Applicable Currency” means Dollars or Alternative Currency, as applicable.
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“Applicable Foreign Obligor Documents” has the meaning specified in Section 6.19.
“Applicable Rate” means, from time to time, the following percentages per annum, based upon the Debt Rating, as set forth below:
Pricing
Level
Debt Rating
S&P/Moody’s/ Fitch
Applicable Rate for
Eurocurrency Rate Loans (and
LIBOR Daily Floating Rate
Swing Line Loans), Alternative
Currency Daily Rate Loans and
Alternative Currency Term Rate
Loans
1
2
3
4
5
A-/A3/A- or better
BBB+/Baa1/BBB+
BBB/Baa2/BBB
BBB-/Baa3/BBB-
worse than or equal to
BB+/Ba1/BB+ or unrated
0.910%
1.025%
1.125%
1.325%
1.500%
Applicable Rate for Base
Rate Loans
Applicable Rate for Letter
of Credit Fee
Applicable Rate for
Facility
Fee
0.000%
0.025%
0.125%
0.325%
0.500%
0.910%
1.025%
1.125%
1.325%
1.500%
0.090%
0.100%
0.125%
0.175%
0.250%
For purposes of the foregoing, (a) if each of Moody’s, S&P and Fitch shall have a Debt Rating in effect and the Debt Ratings established by such rating agencies shall fall within
different Levels in the foregoing table, the Applicable Rate shall be based on the Level in which two of such Ratings shall fall or, if there shall be no such Level, on the Level in which the
second highest of the three Debt Ratings shall fall; (b) if only two of S&P, Moody’s and Fitch shall have Debt Ratings in effect, then the Applicable Rate shall be based on the Level in
which the higher Debt Rating shall fall unless one of such Debt Ratings is two or more Levels lower than the other, in which case the Applicable Rate shall be based on the Level next
above that of the lower of the two Debt Ratings; (c) if only one of S&P, Moody’s and Fitch shall have a Debt Rating in effect, then the Applicable Rate shall be based on the Level next
below that in which such Debt Rating shall fall; and (d) if none of Moody’s, S&P and Fitch shall have a Debt Rating in effect, then the Applicable Rate shall be based on Level 5. If the
rating system of S&P, Moody’s or Fitch shall change, the Company and the Lenders shall negotiate in good faith to amend this definition to reflect such changed rating system and,
pending the effectiveness of any such amendment, the Applicable Rate shall be determined as provided above as if the affected rating agency did not have a Debt Rating in effect. For the
avoidance of doubt, Level 1 in the table above is the “highest” Level and Level 5 is the “lowest” Level.
Initially, the Applicable Rate shall be determined based upon Pricing Level 3. Thereafter, each change in the Applicable Rate, if any, resulting from a publicly announced change
in a Debt Rating shall be effective, in the case of an upgrade, during the period commencing on the date of delivery by the Company to the Administrative Agent of notice thereof
pursuant to Section 7.03(c) and ending on the date immediately preceding the effective date of the next such change and, in the case of a downgrade, during the period commencing on
the date of the public announcement thereof and ending on the date immediately preceding the effective date of the next such change.
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Determinations by the Administrative Agent of the appropriate Pricing Level shall be conclusive absent manifest error.
“Applicable Time” means, with respect to any borrowings and payments in Alternative Currencies, the local times in the place of settlement for such Alternative Currencies as
may be determined by the Administrative Agent or the L/C Issuer, as the case may be, to be necessary for timely settlement on the relevant date in accordance with normal banking
procedures in the place of payment.
“Applicant Borrower” has the meaning specified in Section 2.14.
“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or
manages a Lender.
“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required
by Section 11.07(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form (including electronic documentation generated by use of an
electronic platform) approved by the Administrative Agent.
“Attributable Principal Amount” means (a) in the case of capital leases, the amount of capital lease obligations determined in accordance with GAAP, (b) in the case of Synthetic
Leases, an amount determined by capitalization of the remaining lease payments thereunder as if it were a capital lease determined in accordance with GAAP, (c) in the case of
Securitization Transactions, the outstanding principal amount of such financing, after taking into account reserve accounts and making appropriate adjustments, as determined by the
Administrative Agent in its reasonable judgment and (d) in the case of any Sale and Lease Back Transaction, the present value (discounted in accordance with GAAP at the debt rate
implied in the applicable lease) of the obligations of the lessee for rental payments during the term of such lease.
“Australian Dollars” means the lawful currency of the Commonwealth of Australia.
“Auto-Extension Letter of Credit” has the meaning specified in Section 2.03(b).
“Availability Period” means the period from and including the Closing Date to the earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Commitments
pursuant to Section 2.06, and (c) the date of termination of the commitment of each Lender to make Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant
to Section 9.02.
“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark (or component thereof) or
payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an Interest Period for any term rate or
otherwise for determining any frequency of making payments of interest calculated pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for
such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 3.03(c)(v).
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial
Institution.
“Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of
the European Union, the implementing Law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the
United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other Law applicable in the United Kingdom relating to the resolution of
unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
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“Bank of America” means Bank of America, N.A. and its successors.
“BAS” means BofA Securities, Inc., in its capacity as joint lead arranger and joint bookrunner, and its successors.
“Base Rate” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as
publicly announced from time to time by Bank of America as its “prime rate” and (c) the Eurocurrency Rate plus 1.0%. The “prime rate” is a rate set by Bank of America based upon
various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate. Any change in such “prime rate” announced by Bank of America shall take effect at the opening of business on the day specified in the
public announcement of such change. If the Base Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
“Base Rate Loan” means a Loan that bears interest based on the Base Rate. All Base Rate Loans shall be denominated in Dollars.
“Belgian Borrower” has the meaning specified in the introductory paragraph hereto.
“Benchmark” means, initially, LIBOR; provided that if a Benchmark Transition Event, a Term SOFR Transition Event, an Early Opt-in Election or an Other Benchmark Rate
Election, as applicable, and its related Benchmark Replacement Date have occurred with respect to LIBOR or the then-current Benchmark, then “Benchmark” means the applicable
Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 3.03(c)(i) or Section 3.03(c)(ii).
“Benchmark Replacement” means, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable
Benchmark Replacement Date; provided that, in the case of an Other Benchmark Rate Election, “Benchmark Replacement” shall mean the alternative set forth in clause (3) below:
(1) the sum of: (A) Term SOFR and (B) the related Benchmark Replacement Adjustment;
(2) the sum of: (i) Daily Simple SOFR and (ii) the related Benchmark Replacement Adjustment; or
(3) the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Company as the replacement for the then-current Benchmark
for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such
a rate by the Relevant Governmental Body and/or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current
Benchmark for Dollar-denominated syndicated credit facilities at such time in the United States and (b) the related Benchmark Replacement Adjustment
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provided that, in the case of clause (1) or (2), such Unadjusted Benchmark Replacement is displayed on a screen or other information service that publishes such rate from time to
time as selected by the Administrative Agent in its reasonable discretion; provided further that, in the case of clause (3), when such clause is used to determine the Benchmark
Replacement in connection with the occurrence of an Other Benchmark Rate Election, the alternate benchmark rate selected by the Administrative Agent and the Company shall be the
term benchmark rate that is used in lieu of a London interbank offered rate-based rate in the relevant other Dollar-denominated syndicated credit facilities; provided, further, that,
notwithstanding anything to the contrary in this Agreement or in any other Loan Document, upon the occurrence of a Term SOFR Transition Event and the delivery of a Term SOFR
Notice, on the applicable Benchmark Replacement Date the “Benchmark Replacement” shall revert to and shall be deemed to be the sum of (a) Term SOFR and (b) the related
Benchmark Replacement Adjustment, as set forth in clause (1) of this definition (subject to the first proviso above).
If the Benchmark Replacement as determined pursuant to clause (1), (2) or (3) above would be less than 0%, the Benchmark Replacement will be deemed to be 0% for the
purposes of this Agreement and the other Loan Documents.
“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable
Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement:
(1) for purposes of clauses (1) and (2) of the definition of “Benchmark Replacement”, the first alternative set forth in the order below that can be determined by the
Administrative Agent:
(a) the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) as of the
Reference Time such Benchmark Replacement is first set for such Interest Period that has been selected or recommended by the Relevant Governmental Body for the
replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for the applicable Corresponding Tenor;
(b) the spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such
Interest Period that would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective upon an index cessation event with
respect to such Benchmark for the applicable Corresponding Tenor; and
(2) for purposes of clause (3) of the definition of “Benchmark Replacement”, the spread adjustment, or method for calculating or determining such spread adjustment,
(which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Company for the applicable Corresponding Tenor giving due
consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such
Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date and/or (ii) any
evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such
Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities at such time in the United States;
7
provided that, in the case of clause (1) above, such adjustment is displayed on a screen or other information service that publishes such Benchmark Replacement Adjustment from
time to time as selected by the Administrative Agent in its reasonable discretion.
“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes (including changes to
the definition of “Base Rate,” the definition of “Business Day,” the definition of “Interest Period,” the timing and frequency of determining rates and making payments of interest, the
timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of breakage provisions, and other
technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement
and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of
any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark
Replacement exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the
other Loan Documents).
“Benchmark Replacement Date” means, with respect to any Benchmark, the earliest to occur of the following events with respect to such then-current Benchmark:
(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event”, the later of (a) the date of the public statement or publication of information
referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases
to provide all Available Tenors of such Benchmark (or such component thereof);
(2) in the case of clause (3) of the definition of “Benchmark Transition Event”, the first date on which such Benchmark (or the published component used in the
calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer
representative; provided that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (3) and even if any
Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date; or
(3) in the case of a Term SOFR Transition Event, the date that is 30 days after the date a Term SOFR Notice is provided to the Lenders and the Company pursuant to
Section 3.03(c)(ii); or
(4) in the case of an Early Opt-in Election or an Other Benchmark Rate Election, the sixth Business Day after the date notice of such Early Opt-in Election or an Other
Benchmark Rate Election, as applicable, is provided to the Lenders, so long as the Administrative Agent has not received, by 5:00 p.m. on the fifth Business Day after the date
notice of such Early Opt-in Election or Other Benchmark Rate Election, as applicable, is provided to the Lenders, written notice of objection to such Early Opt-in Election or
Other Benchmark Rate Election, as applicable, from Lenders comprising the Required Lenders.
For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any
determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be
deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-
current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
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“Benchmark Transition Event” means, with respect to any Benchmark, the occurrence of one or more of the following events with respect to such then-current Benchmark:
(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation
thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely,
provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such
component thereof);
(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the
calculation thereof), the FRB, the NYFRB, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component thereof), a resolution authority
with jurisdiction over the administrator for such Benchmark (or such component thereof) or a court or an entity with similar insolvency or resolution authority over the
administrator for such Benchmark (or such component thereof), in each case which states that the administrator of such Benchmark (or such component thereof) has ceased or
will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication,
there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the
calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be,
representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information
set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Unavailability Period” means, with respect to any Benchmark, the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to
clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan
Document in accordance with Section 3.03 and (y) ending at the time that a Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any
other Loan Document in accordance with Section 3.03.
“Beneficial Ownership Certification” means a certification regarding beneficial ownership required by the Beneficial Ownership Regulation.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of
the Internal Revenue Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Internal
Revenue Code) the assets of any such “employee benefit plan” or “plan”.
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“Blocking Law” means:
(a) any provision of Council Regulation (EC) No 2271/1996 of 22 November 1996 (or any law or regulation implementing such Regulation in any member state of the
European Union or the United Kingdom); and
(b) any similar blocking or anti-boycott law in the United Kingdom.
“Borrower Materials” has the meaning specified in Section 7.02.
“Borrowers” means the Company and the Belgian Borrower and, if the conditions of Section 2.14 are satisfied, any other Designated Borrower, and “Borrower” means any one of
the Borrowers.
“Borrowing” means a Committed Borrowing or a Swing Line Borrowing, as the context may require.
“British Pounds Sterling” means the lawful currency of the United Kingdom.
“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state
where the Administrative Agent’s Office with respect to Obligations denominated in Dollars is located and:
(a)
if such day relates to any interest rate settings as to a Eurocurrency Rate Loan, any fundings, disbursements, settlements and payments in Dollars in respect of any
such Eurocurrency Rate Loan, or any other dealings in Dollars to be carried out pursuant to this Agreement in respect of any such Eurocurrency Rate Loan, means any such day
that is also a day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market;
(b)
if such day relates to any interest rate settings as to an Alternative Currency Loan denominated in Euro, any fundings, disbursements, settlements and payments in
Euro in respect of any such Alternative Currency Loan, or any other dealings in Euro to be carried out pursuant to this Agreement in respect of any such Alternative Currency
Loan, means a Business Day that is also a TARGET Day;
(c)
if such day relates to any interest rate settings as to an Alternative Currency Loan denominated in (i) British Pounds Sterling, means a day other than a day banks
are closed for general business in London because such day is a Saturday, Sunday or a legal holiday under the laws of the United Kingdom, (ii) Japanese Yen, means a day other
than when banks are closed for general business in Japan, (iii) Australian Dollars, means a day other than when banks are closed for settlement and payments of foreign exchange
transactions in Melborne because such day is a Saturday, Sunday or a legal holiday under the laws of Australia, and (iv) Canadian Dollars, means a day other than when banks are
closed for settlement and payments of foreign exchange transactions in Toronto, Ontario because such day is a Saturday, Sunday or a legal holiday under the laws of Canada; and
(d)
if such day relates to any fundings, disbursements, settlements and payments in a currency other than Euro in respect of an Alternative Currency Loan
denominated in a currency other than Euro, or any other dealings in any currency other than Euro to be carried out pursuant to this Agreement in respect of any such Alternative
Currency Loan (other than any interest rate settings), means any such day on which banks are open for foreign exchange business in the principal financial center of the country
of such currency.
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“Canadian Dollars” means the lawful currency of Canada.
“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more of the L/C Issuer or the Lenders, as collateral for L/C
Obligations, or obligations of Lenders to fund participations in respect of L/C Obligations, cash or deposit account balances or, if the Administrative Agent and the L/C Issuer shall agree
in their sole discretion, other credit support, in each case pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and the L/C Issuer. “Cash
Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.
“Change in Law” means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any Law, (b) any change in any Law or in the
administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or
not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for
International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant
to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.
“Change of Control” means an event or series of events by which: (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934) acquires directly or indirectly, beneficially or of record, shares representing more than 35% of the aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Company or any Person directly or indirectly Controlling the Company; (b) a majority of the members of the board of directors or other equivalent governing body of
the Company cease to be composed of individuals (i) who were members of that board of directors on the Closing Date, (ii) whose election or nomination to that board of directors or
equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least two-thirds of that board of directors
or equivalent governing body or (iii) whose election or nomination to that board of directors or other equivalent governing body was approved by individuals referred to in clauses (i) and
(ii) above constituting at the time of such election or nomination at least two-thirds of that board of directors or equivalent governing body; or (c) the Company fails to directly or
indirectly own and control all of the outstanding capital stock (or other equity securities) of each Designated Borrower.
“Closing Date” means June 21, 2018.
“Commitment” means, as to each Lender, the obligation of such Lender to (a) make Committed Loans, (b) purchase participations in L/C Obligations, and (c) purchase
participations in Swing Line Loans in an aggregate principal amount at any one time outstanding not to exceed the amount set forth as such Lender’s “Commitment” as set forth on
Schedule 2.01 or in the Assignment and Assumption or other documentation delivered pursuant to Section 2.01(b) pursuant to which such Lender becomes a party hereto, as applicable,
as such amount may be adjusted from time to time in accordance with this Agreement.
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“Committed Borrowing” means a borrowing consisting of simultaneous Committed Loans of the same Type, in the same currency and, in the case of Eurocurrency Rate Loans
and Alternative Currency Term Rate Loans, having the same Interest Period made by each of the Lenders as provided herein.
“Committed Loan” has the meaning provided in Section 2.01(a).
“Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a conversion of Committed Loans from one Type to the other, or (c) a continuation of Eurocurrency
Rate Loans or Alternative Currency Term Rate Loans, in each case pursuant to Section 2.02(a), which shall be substantially in the form of Exhibit A or such other form as may be
approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately
completed and signed by a Responsible Officer of the applicable Borrower.
“Communication” means this Agreement, any Loan Document and any document, any amendment, approval, consent, information, notice, certificate, request, statement,
disclosure or authorization related to any Loan Document.
“Company” has the meaning specified in the introductory paragraph hereto.
“Compliance Certificate” means a certificate substantially in the form of Exhibit D.
“Conforming Changes” means, with respect to the use, administration of or any conventions associated with BBSY, CDOR, EURIBOR, SONIA, TIBOR, or any proposed
Successor Rate for an Alternative Currency, as applicable, any conforming changes to the definitions of “BBSY”, “CDOR”, “EURIBOR”, “SONIA”, “TIBOR”, “Interest Period”, timing
and frequency of determining rates and making payments of interest and other technical, administrative or operational matters (including, for the avoidance of doubt, the definition of
“Business Day”, timing of borrowing requests or prepayment, conversion or continuation notices and length of lookback periods) as may be appropriate, in the discretion of the
Administrative Agent, to reflect the adoption and implementation of such applicable rate(s) and to permit the administration thereof by the Administrative Agent in a manner substantially
consistent with market practice for such Alternative Currency (or, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively
feasible or that no market practice for the administration of such rate for such Alternative Currency exists, in such other manner of administration as the Administrative Agent determines
is reasonably necessary in connection with the administration of this Agreement and any other Loan Document).
“Consolidated EBITDA” means, for any period, for the Consolidated Group, an amount equal to the sum of (a) Consolidated Net Income for such period plus (b) the following, in
each case (other than in the case of clause (x) below) to the extent deducted in calculating such Consolidated Net Income, without duplication: (i) Consolidated Interest Charges for such
period, (ii) the provision for federal, state, local and foreign income taxes payable by the Consolidated Group for such period, (iii) the amount of depreciation and amortization expense
for such period, (iv) non-cash expenses for such period (excluding any non-cash expense to the extent that it represents an accrual of or reserve for cash payments in any future period),
(v) non-cash goodwill impairment charges, (vi) any non-cash loss attributable to the mark-to-market adjustments in the valuation of pension liabilities (to the extent the cash impact
resulting from such loss has not been realized) in accordance with Accounting Standards Codification 715 (ASC 715), (vii) any fees, expenses or charges (other than depreciation or
amortization expense) related to any Acquisition, Disposition, issuance of equity interests, other transactions (excluding intercompany transactions) permitted by Section 8.02, or the
incurrence of Indebtedness not prohibited by this Agreement (including any refinancing or amendment thereof) (in each case, whether or not consummated), including, but not limited to,
such fees, expenses or charges related to this Agreement and the other Loan Documents and any amendment or other modification of this Agreement or the other Loan Documents, (viii)
any expense to the extent that a corresponding amount is received during such period in cash by the Company or any of its Subsidiaries under any agreement providing for
indemnification or reimbursement of such expenses, (ix) any expense with respect to liability or casualty events or business interruption to the extent reimbursed to the Company or any
of its Subsidiaries during such period by third party insurance, and (x) the amount of dividends or distributions or other payments (including any
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ordinary course dividend, distribution or other payment) that are actually received in cash (or converted into cash) for such period by a member of the Consolidated Group from any
Person that is not a member of the Consolidated Group or otherwise in respect of any unconsolidated investment, minus (c) to the extent included in calculating such Consolidated Net
Income, (i) non-cash income during such period (excluding any non-cash income to the extent that it represents cash receipts in any future period) and (ii) any non-cash gains attributable
to the mark-to-market adjustments in the valuation of pension liabilities in accordance with Accounting Standards Codification 715 (ASC 715), all as determined in accordance with
GAAP.
“Consolidated Funded Debt” means Funded Debt of the Consolidated Group determined on a consolidated basis in accordance with GAAP.
“Consolidated Group” means the Company and its consolidated Subsidiaries as determined in accordance with GAAP.
“Consolidated Interest Charges” means, for any period, for the Consolidated Group, all interest expense, including the amortization of debt discount and premium, the interest
component under capital leases and the implied interest component under Securitization Transactions, in each case on a consolidated basis determined in accordance with GAAP.
“Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (a) the difference of (i) Consolidated Funded Debt as of such date minus (ii) Unrestricted Cash
as of such date to (b) Consolidated EBITDA for the period of the four fiscal quarters ending on such date.
“Consolidated Net Income” means, for any period, for the Consolidated Group, the sum, without duplication, of (i) net income of the Consolidated Group (excluding items
reported as nonrecurring or unusual in the consolidated financial statements of the Company and the Consolidated Group and related tax effects) for that period minus (ii) to the extent
included in the amount determined pursuant to clause (i) above, the income of any Subsidiary to the extent the payment of such income in the form of a distribution or repayment of any
Indebtedness to the Company or a Subsidiary is not permitted, whether on account of any Organization Document restriction, any agreement, instrument, deed or lease or any Law
applicable to such Subsidiary, all as determined in accordance with GAAP.
“Consolidated Net Tangible Assets” means, as of any date of determination, the Consolidated Total Assets of the Consolidated Group less goodwill and intangibles (other than
intangibles arising from, or relating to, intellectual property, licenses or permits (including, but not limited to, emissions rights) of the Consolidated Group), in each case calculated in
accordance with GAAP, provided, that in the event that the Company or any of its Subsidiaries acquires any assets in connection with the Acquisition by the Company and its Subsidiaries
of another Person subsequent to the date as of which the Consolidated Net Tangible Assets is being calculated (the “Balance Sheet Date”) but prior to the event for which the calculation
of the Consolidated Net Tangible Assets is made, then the Consolidated Net Tangible Assets shall be calculated giving pro forma effect to such Acquisition of assets, as if the same had
occurred on or prior to the Balance Sheet Date.
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“Consolidated Total Assets” means, as of any date of determination, the total consolidated assets of the Consolidated Group, without giving effect to any amortization of the
amount of intangible assets since the Closing Date, as shown on the most recent balance sheet required to be delivered pursuant to Section 7.01
“Contractual Obligation” means, as to any Person, any provision of any Security issued by such Person or of any agreement, instrument or other undertaking to which such
Person is a party or by which it or any of its property is bound.
“Control” has the meaning specified in the definition of “Affiliate.”
“Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the
same length (disregarding business day adjustment) as such Available Tenor.
“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.
“Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which may include a lookback) being established by the Administrative Agent in accordance
with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for business loans; provided that if the
Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in
its reasonable discretion.
“Debt Rating” means, as of any date of determination, the rating as determined by any of S&P, Moody’s or Fitch of the Company’s non-credit-enhanced, senior unsecured long-
term debt.
“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.
“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.
“Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any,
applicable to Base Rate Loans plus (iii) 2% per annum; provided, however, that with respect to a Eurocurrency Rate Loan or an Alternative Currency Loan, the Default Rate shall be an
interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, and (b) when used with respect to Letter of Credit Fees, a
rate equal to the Applicable Rate plus 2% per annum.
“Defaulting Lender” means, subject to Section 2.17(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans
were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Company in writing that such failure is the result of such Lender’s determination that
one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been
satisfied, or (ii) pay to the Administrative Agent, the L/C Issuer, the Swing Line Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of
its participation in Letters of Credit or Swing Line Loans) within two Business Days of the date when due, (b) has notified the Company, the Administrative Agent, the L/C Issuer or the
Swing Line Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public
statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which
condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c)has failed, within three Business Days
after written request by the Administrative Agent or the Company, to confirm in writing to
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the Administrative Agent and the Company that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender
pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Company), or (d) has, or has a direct or indirect parent company that has, (i)
become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or
similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority
acting in such a capacity or (iii) become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any
equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender
with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a
Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender
shall be deemed to be a Defaulting Lender (subject to Section 2.17(b)) as of the date established therefor by the Administrative Agent in a written notice of such determination, which
shall be delivered by the Administrative Agent to the Company, the L/C Issuer, the Swing Line Lender and each Lender.
“Designated Borrower” means any Borrower designated in accordance with the terms of Section 2.14.
“Designated Borrower Joinder Agreement” has the meaning specified in Section 2.14.
“Designated Borrower Request and Assumption Agreement” has the meaning specified in Section 2.14.
“Designated Jurisdiction” means any country or territory to the extent that such country or territory itself is the subject of any Sanction.
“Disposition” means the sale, transfer, license, lease or other disposition (including any Sale and Leaseback Transaction) of any property by any Person, including any sale,
assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.
“Dollar” and “$” mean lawful money of the United States.
“Dollar Equivalent” means, for any amount, at the time of determination thereof, (a) if such amount is expressed in Dollars, such amount, (b) if such amount is expressed in an
Alternative Currency, the equivalent of such amount in Dollars determined by using the rate of exchange for the purchase of Dollars with the Alternative Currency last provided (either by
publication or otherwise provided to the Administrative Agent or the L/C Issuer, as applicable) by the applicable Bloomberg source (or such other publicly available source for displaying
exchange rates) on the date that is two (2) Business Days immediately preceding the date of determination (or if such service ceases to be available or ceases to provide such rate of
exchange, the equivalent of such amount in Dollars as determined by the Administrative Agent or the L/C Issuer, as applicable, using any method of determination it deems appropriate in
its sole discretion) and (c) if such amount is denominated in any other currency, the equivalent of such amount in Dollars as determined by the Administrative Agent or the L/C Issuer, as
applicable, using any method of determination it deems appropriate in its sole discretion. Any determination by the Administrative Agent or the L/C Issuer pursuant to clauses (b) or (c)
above shall be conclusive absent manifest error.
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“Domestic Borrower” means any Borrower that is organized under the laws of any political subdivision of the United States.
“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States.
“Early Opt-in Election” means, if the then-current Benchmark is LIBOR, the occurrence of:
(a)
a notification by the Administrative Agent to (or the request by the Company to the Administrative Agent to notify) each of the other parties hereto that at least
five currently outstanding Dollar-denominated syndicated credit facilities at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including
SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate (and such syndicated credit facilities are identified in such notice and are publicly available for
review); and
(b)
the joint election by the Administrative Agent and the Company to trigger a fallback from LIBOR and the provision by the Administrative Agent of written notice
of such election to the Lenders.
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution
Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in
an EEA Member Country which is a Subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any
delegee) having responsibility for the resolution of any EEA Financial Institution.
“Eligible Assignee” means any Person that meets the requirements to be an assignee under Sections 11.07(b)(iii) and (v) (subject to such consents, if any, as may be required
under Section 11.07(b)(iii)).
“Environmental Laws” means any legally binding and applicable statute, law, regulation, ordinance, rule, judgment, order, decree, permit, concession, grant, franchise, license,
agreement or restriction imposed by any federal, state, local, and foreign Governmental Authority relating to human health and the natural environment.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities),
of the Company or any of its Subsidiaries resulting from or caused by (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) the release or threatened release of any Hazardous Materials into the natural environment or (d) any contract, agreement or other consensual
arrangement pursuant to which environmental liability is assumed or imposed with respect to any of the foregoing.
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“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Company within the meaning of Section 414(b) or (c) of the Internal
Revenue Code (and Sections 414(m) and (o) of the Internal Revenue Code for purposes of provisions relating to Section 412 of the Internal Revenue Code).
“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension Plan subject to Section
4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal
under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of
proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition that constitutes grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but
not delinquent under Section 4007 of ERISA, upon the Company or any ERISA Affiliate.
“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to
time.
“Euro” and “EUR” mean the single currency of the Participating Member States.
“Eurocurrency Rate” means:
(a) for any Interest Period with respect to a Eurocurrency Rate Loan, the rate per annum equal to the London Interbank Offered Rate as administered by ICE Benchmark
Administration (or any other Person that takes over the administration of such rate for Dollars for a period equal in length to such Interest Period) (“LIBOR”), as published on the
applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) at or
about 11:00 a.m. (London time) on the Rate Determination Date, for deposits in Dollars, with a term equivalent to such Interest Period, and
(b) for any interest rate calculation with respect to a Base Rate Loan on any date, the rate per annum equal to LIBOR, at about 11:00 a.m., London time determined two
Business Days prior to such date for Dollar deposits with a term of one month commencing that day;
provided that if the Eurocurrency Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
“Eurocurrency Rate Loan” means a Committed Loan that bears interest at a rate based on clause (a) of the definition of “Eurocurrency Rate.” Eurocurrency Rate Loans shall only
be denominated in Dollars.
“Event of Default” has the meaning specified in Section 9.01.
“Excluded Taxes” means (i) in the case of the Administrative Agent and each Lender, Taxes imposed on or measured by its income or gross receipts, branch profits Taxes, and
franchise Taxes imposed on it, by any jurisdiction (A) as a result of the Administrative Agent or such Lender, as the case may be, being organized under the Laws of or maintaining a
lending office in such jurisdiction, (B) that are Other Connection Taxes or (C) as a result of the Administrative Agent or such Lender, as the case may be, booking Loans made by it in
such jurisdiction, (ii) in the case of a Lender, any withholding Taxes, that are (A) imposed by the United States with respect to the Committed Loans, the Swing Line Loan and the L/C
Obligations on amounts payable to or for the account of such Lender at the time such Lender becomes a party to this Agreement (or designates a new lending office) or (B) attributable to
such Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 11.15,
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except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the
Borrowers with respect to such Taxes pursuant to this Section 3.01 and (iii) any withholding taxes imposed under FATCA.
“Existing Maturity Date” has the meaning specified in Section 2.15.
“Extending Lender” has the meaning specified in Section 2.15.
“Facility Office” means, with respect to any Lender, the office through which such Lender will perform its obligations under this Agreement.
“FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.
“FATCA” Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and
not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the
Internal Revenue Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental
Authorities and implementing such Sections of the Internal Revenue Code.
“FCA” has the meaning set forth in Section 1.13.
“Federal Funds Rate” means, for any day, the rate per annum calculated by the Federal Reserve Bank of New York based on such day’s federal funds transactions by depository
institutions (as determined in such manner as the Federal Reserve Bank of New York shall set forth on its public website from time to time) and published on the next succeeding
Business Day by the Federal Reserve Bank of New York as the federal funds effective rate; provided that if the Federal Funds Rate as so determined would be less than zero, such rate
shall be deemed to be zero for the purposes of this Agreement.
“Fitch” means Fitch Ratings, Inc., or any successor or assignee of the business of such company in the business of rating securities.
“Foreign Lender” means, with respect to any Borrower, any Lender that is resident or organized under the Laws of a jurisdiction other than that in which such Borrower is
resident for tax purposes (including such a Lender when acting in the capacity of the L/C Issuer). For purposes of this definition, the United States, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction, and a similar rule shall apply with respect to Belgium.
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“FRB” means the Board of Governors of the Federal Reserve System of the United States.
“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to any L/C Issuer, such Defaulting Lender’s Pro Rata Share of the Outstanding Amount of
all L/C Obligations in respect of Letters of Credit issued by such L/C Issuer other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated
to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to the Swing Line Lender, such Defaulting Lender’s Pro Rata Share of Swing Line Loans
other than Swing Line Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders in accordance with the terms hereof.
“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its activities.
“Funded Debt” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with
GAAP:
(a)
all obligations for borrowed money, whether current or long-term (including the Obligations hereunder), and all obligations evidenced by bonds, debentures,
notes, loan agreements or other similar instruments, including convertible debt instruments;
(b)
all purchase money indebtedness (including indebtedness and obligations in respect of conditional sales and title retention arrangements, except for customary
conditional sales and title retention arrangements with suppliers that are entered into in the ordinary course of business) and all indebtedness and obligations in respect of the
deferred purchase price of property or services (other than trade accounts payable incurred in the ordinary course of business and payable on customary trade terms);
(c)
all contingent obligations and unreimbursed drawings under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety
bonds and similar instruments;
(d)
(e)
the Attributable Principal Amount of capital leases and Synthetic Leases;
the Attributable Principal Amount of Securitization Transactions;
(f)
all preferred stock and comparable equity interests providing for mandatory redemption, sinking fund or other like payments within 91 days following the
Maturity Date then in effect;
(g)
Guarantees in respect of Funded Debt of another Person; and
(h)
Funded Debt of any partnership or joint venture or other similar entity in which such Person is a general partner or joint venturer, and, as such, has personal
liability for such obligations, but only to the extent there is recourse to such Person for payment thereof.
For purposes hereof, the amount of Funded Debt shall be determined based on the outstanding principal amount in the case of borrowed money indebtedness under clause (a) and
purchase money indebtedness and the deferred purchase obligations under clause (b), based on the maximum amount available to be drawn in the case of letter of credit obligations and
the other obligations under clause (c), and based on the outstanding principal amount of Funded Debt that is the subject of the Guarantees in the case of Guarantees under clause (g) or, if
less, the amount expressly guaranteed.
“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Financial Accounting Standards Board
Accounting Standards Codification, consistently applied and as in effect from time to time.
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“Governmental Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality, regulatory body, court,
administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government
(including any supra-national bodies such as the European Union or the European Central Bank).
“Guarantee” means, as to any Person, any (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation,
(iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of
the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness
or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person. The amount of any Guarantee shall be deemed to be an amount
equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.
“Guaranty” means the Guarantee of the Obligations provided by the Company pursuant to Article IV.
“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes regulated pursuant to any Environmental Law.
“Honor Date” has the meaning specified in Section 2.03(c).
“Immaterial Subsidiary” means any Subsidiary of the Company that neither (a) owns assets with an aggregate book value in excess of $25,000,000 nor (b) has annual revenues in
excess of $25,000,000.
“Incremental Facility Amendment” has the meaning specified in Section 2.01(b).
“Incremental Term Facility” has the meaning specified in Section 2.01(b).
“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with
GAAP:
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(a)
(b)
(c)
all Funded Debt;
net obligations under any Swap Contract;
Guarantees in respect of Indebtedness of another Person; and
(d)
Indebtedness of any partnership or joint venture or other similar entity in which such Person is a general partner or joint venturer, and, as such, has personal
liability for such obligations, but only to the extent there is recourse to such Person for payment thereof.
For purposes hereof, the amount of Indebtedness shall be determined based on Swap Termination Value in the case of net obligations under Swap Contracts under clause (c) and
based on the outstanding principal amount of Indebtedness that is the subject of the Guarantees in the case of Guarantees under clause (d) or, if less, the amount expressly guaranteed.
“Indemnified Taxes” means Taxes other than Excluded Taxes.
“Indemnitees” has the meaning specified in Section 11.04(b).
“Information” has the meaning specified in Section 11.08.
“Interest Payment Date” means (a) as to any Eurocurrency Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however, that
if any Interest Period for a Eurocurrency Rate Loan exceeds three (3) months, the respective dates that fall every three (3) months after the beginning of such Interest Period shall also be
Interest Payment Dates; (b) as to any Alternative Currency Daily Rate Loan, the last Business Day of each March, June, September and December and the Maturity Date; (c) as to any
Alternative Currency Term Rate Loan, the last day of each Interest Period applicable to such Loan; provided, however, that if any Interest Period for an Alternative Currency Term Rate
Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall be Interest Payment Dates; and (d) as to any Base Rate Loan
or any Swing Line Loan, the last Business Day of each March, June, September and December and the Maturity Date.
“Interest Period” means, (i) as to each Eurocurrency Rate Loan, the period commencing on the date such Eurocurrency Rate Loan is disbursed or converted to or continued as a
Eurocurrency Rate Loan and ending on the date one, three or six months thereafter (in each case, subject to availability), as selected by the Company in its Committed Loan Notice and
(ii) as to each Alternative Currency Term Rate Loan, the period commencing on the date such Alternative Currency Term Rate Loan is disbursed or converted to or continued as an
Alternative Currency Term Rate Loan and ending on the date one, three or six months thereafter (in each case, subject to availability for the interest rate applicable to the relevant
currency, or, solely with respect to Alternative Currency Term Rate Loans denominated in Canadian Dollars, one, two or three months), as selected by the Company in its Committed
Loan Notice; provided that:
(a)
any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day
falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;
(b)
any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and
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(c)
no Interest Period for any Loan shall extend beyond the Maturity Date of such Loan.
“Internal Revenue Code” means the United States Internal Revenue Code of 1986.
“IRS” means the United States Internal Revenue Service.
“ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or
supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association,
Inc. or such successor thereto.
“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such
later version thereof as may be in effect at the time of issuance).
“Issuer Documents” means, with respect to any Letter of Credit, the Letter of Credit Application and any other document, agreement and instrument entered into by the L/C
Issuer and the Company (or any Subsidiary) or in favor of the L/C Issuer and relating to any such Letter of Credit.
“Japanese Yen” means the lawful currency of Japan.
“JPMorgan” means JPMorgan Chase Bank, N.A., and its successors.
“Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial
precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and
all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not
having the force of law.
“L/C Advance” means, with respect to each Lender, such Lender’s funding of its participation in a L/C Borrowing. All L/C Advances shall be denominated in Dollars.
“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit that has not been reimbursed on the date when made or refinanced as a
Committed Borrowing. All L/C Borrowings shall be denominated in Dollars.
“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the renewal or increase of the amount thereof.
“L/C Issuer” means (a) Bank of America, through itself or through one of its designated Affiliates or branch offices, and/or (ii) JPMorgan, through itself or through one of its
designated Affiliates or branch offices, in each case, in its capacity as issuer of Letters of Credit hereunder, with each of their respective successors in such capacity. In the event there is
more than one L/C Issuer at any time, references herein and in the other Loan Documents to the L/C Issuer shall be deemed to refer to the L/C Issuer in respect of the applicable Letter of
Credit or to all L/C Issuers, as the context requires.
“L/C Obligations” means as of any date of determination, the aggregate undrawn amount of all outstanding Letters of Credit, plus the aggregate amount of all Unreimbursed
Amounts in respect of Letters of Credit, including L/C Borrowings. For purposes of computing the undrawn amount under any Letter of Credit, the amount of such Letter of Credit shall
be determined in accordance with Section 1.07. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be
drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
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such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.
“Lender” means each of the Persons identified as a “Lender” on the signature pages hereto, any other Person that becomes a Lender in accordance with this Agreement and their
successors and assigns and, unless the context requires otherwise, includes the Swing Line Lender.
“Lender Parties” means, collectively, the Lenders, the Swing Line Lender and the L/C Issuer.
“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as
a Lender may from time to time notify the Company and the Administrative Agent which office may include any Affiliate of such Lender or any domestic or foreign branch of such
Lender or such Affiliate. Unless the context otherwise requires each reference to a Lender shall include its applicable Lending Office.
“Letter of Credit” means any letter of credit issued hereunder. A Letter of Credit may be a commercial letter of credit or a standby letter of credit; provided, however, that any
commercial letter of credit issued hereunder shall provide solely for cash payment upon presentation of a sight draft. Notwithstanding anything to the contrary contained herein, a letter of
credit issued by an L/C Issuer other than Bank of America (or a designated Affiliate thereof) shall not be a “Letter of Credit” for purposes of the Loan Documents until such time as the
Administrative Agent has been notified of the issuance thereof by the applicable L/C Issuer and has confirmed availability under the Aggregate Commitments and the Letter of Credit
Sublimit with the applicable L/C Issuer.
“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.
“Letter of Credit Expiration Date” means the day that is seven days prior to the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business
Day).
“Letter of Credit Fee” means any of the fees described in clause (i) of Section 2.09(b).
“Letter of Credit Sublimit” means the lesser of (a) FIFTY MILLION DOLLARS ($50,000,000) and (b) the Aggregate Commitments; provided that, with respect to each of Bank
of America and JPMorgan, in its capacity as an L/C Issuer, such L/C Issuer shall not be obligated to issue Letters of Credit in an amount greater than the amount set forth as its “Letter of
Credit Commitment” on Schedule 2.01. The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.
“LIBOR” has the meaning specified in the definition of “Eurocurrency Rate”.
“LIBOR Daily Floating Rate” means a fluctuating rate of interest, which can change on each Business Day, equal to LIBOR, or a comparable or successor rate which rate is
approved by the Administrative Agent, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be
designated by the Administrative Agent from time to time) at or about 11:00 a.m., London time, two Business Days prior to the date in question, for Dollar deposits with a term equivalent
to a one month term beginning on that date, as adjusted from time to time in the Bank’s sole discretion for reserve requirements, deposit insurance assessment rates and other regulatory
costs; provided that: (i) to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied in a manner
consistent with market practice; provided, further that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied
in a manner as otherwise reasonably determined by the Administrative Agent, (ii) if the LIBOR Daily Floating Rate shall be less than zero, such rate shall be deemed zero for purposes of
this Agreement and (iii) if such rate is not available at such time for any reason, then the rate will be determined by such alternate method as reasonably selected by the Bank.
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“LIBOR Daily Floating Rate Swing Line Loans” means a Swing Line Loan that bears interest based on the LIBOR Daily Floating Rate.
“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security
interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing lease having substantially the
same economic effect as any of the foregoing).
“Loan” means an extension of credit by a Lender to a Borrower under Article II in the form of a Committed Loan or a Swing Line Loan.
“Loan Documents” means this Agreement, each Note, each Designated Borrower Request and Assumption Agreement, each Issuer Document, each Designated Borrower Joinder
Agreement, the Administrative Agent Fee Letter, any Incremental Facility Amendment and any agreement creating or perfecting rights in Cash Collateral pursuant to the provisions of
Section 2.16.
“Loan Obligations” means Committed Loans, L/C Obligations and Swing Line Loans.
“Material Adverse Effect” means a material adverse change in, or a material adverse effect upon, (a) the operations, business, properties, liabilities (actual or contingent) or
financial condition of the Consolidated Group taken as a whole; (b) the ability of any Borrower to perform its material obligations under any Loan Document to which it is a party; or (c)
the legality, validity, binding effect or enforceability against any Borrower of any Loan Document to which it is a party.
“Maturity Date” means the later of (a) August 14, 2024 and (b) if maturity is extended pursuant to Section 2.15, such extended maturity date as determined pursuant to such
Section; provided, however that, in each case, if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.
“Maximum Rate” has the meaning specified in Section 11.10.
“Minimum Collateral Amount” means, at any time, (a) with respect to Cash Collateral consisting of cash or deposit account balances provided to reduce or eliminate Fronting
Exposure during the existence of a Defaulting Lender, an amount equal to 100% of the Fronting Exposure of the L/C Issuer with respect to Letters of Credit issued and outstanding at
such time, (b) with respect to Cash Collateral consisting of cash or deposit account balances provided in accordance with the provisions of Section 2.16(a)(i), (a)(ii) or (a)(iii), an amount
equal to 100% of the Outstanding Amount of all L/C Obligations, and (c) otherwise, an amount determined by the Administrative Agent and the L/C Issuer in their sole discretion.
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
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“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes or is
obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.
“Non-Domestic Borrowers” means the Belgian Borrower and each Designated Borrower that is not a Domestic Borrower, and “Non-Domestic Borrower” means any one of the
Non-Domestic Borrowers.
“Non-Extending Lender” has the meaning specified in Section 2.15.
“Non-Extension Notice Date” has the meaning specified in Section 2.03(b).
“Note” means a promissory note made by a Borrower in favor of a Lender evidencing Loans made by such Lender, substantially in the form of Exhibit C.
“Notice Date” has the meaning specified in Section 2.15.
“NYFRB” means the Federal Reserve Bank of New York.
“Obligations” means, without duplication, (i) the Loan Obligations and (ii) all advances to, and debts, liabilities, obligations, covenants and duties of, any Borrower arising under
any Loan Document or otherwise with respect to any Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Borrower or any Affiliate thereof of any proceeding
under any Debtor Relief Laws naming a member of the Consolidated Group as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such
proceeding.
“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.
“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive
documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement;
and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and
any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its
formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.
“Other Connection Taxes” means, with respect to any Lender or Administrative Agent, Taxes imposed as a result of a present or former connection between such Lender or
Administrative Agent and the jurisdiction imposing such Tax (other than connections arising from such Lender or Administrative Agent having executed, delivered, become a party to,
performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or
sold or assigned an interest in any Loan or Loan Document).
“Other Benchmark Rate Election” means, if the then-current Benchmark is the LIBO Rate, the occurrence of:
(a) a request by the Company to the Administrative Agent to notify each of the other parties hereto that, at the determination of the Company, Dollar-denominated
syndicated credit facilities at such time contain (as a result of amendment or as originally executed), in lieu of a London interbank offered rate-based rate, a term benchmark rate
as a benchmark rate; and
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(b) the Administrative Agent, in its sole discretion, and the Company jointly elect to trigger a fallback from LIBOR and the provision, as applicable, by the
Administrative Agent of written notice of such election to the Company and the Lenders.
“Other Taxes” has the meaning specified in Section 3.01(b).
“Outstanding Amount” means (i) with respect to Committed Loans and Swing Line Loans on any date, the aggregate outstanding principal Dollar Equivalent thereof after giving
effect to any borrowings and prepayments or repayments of Committed Loans and Swing Line Loans, as the case may be, occurring on such date; and (ii) with respect to any L/C
Obligations on any date, the Dollar Equivalent of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the
maximum amount available for drawing under Letters of Credit taking effect on such date.
“Overnight Rate” means, for any day, (a) with respect to any amount denominated in Dollars, the greater of (i) the Federal Funds Rate and (ii) an overnight rate determined by the
Administrative Agent, the L/C Issuer, or the Swing Line Lender, as the case may be, in accordance with banking industry rules on interbank compensation, and (b) with respect to any
amount denominated in an Alternative Currency, an overnight rate determined by the Administrative Agent or L/C Issuer, as the case may be, in accordance with banking industry rules
on interbank compensation.
“Participant” has the meaning specified in Section 11.07(d).
“Participant Register” has the meaning specified in Section 11.07(d).
“Participating Member State” means any member state of the European Union that has the Euro as its lawful currency in accordance with the legislation of the European Union
relating to Economic and Monetary Union.
“PBGC” means the Pension Benefit Guaranty Corporation.
“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of
ERISA and is sponsored or maintained by the Company or any ERISA Affiliate or to which the Company or any ERISA Affiliate contributes or has an obligation to contribute, or in the
case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Company or, with respect to any such plan that is subject to
Section 412 of the Internal Revenue Code or Title IV of ERISA, any ERISA Affiliate.
“Platform” has the meaning specified in Section 7.02.
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“Pro Forma Basis” means, for purposes of determining compliance with the financial covenant hereunder, that the subject Acquisition or Disposition and any related incurrence or
discharge of Indebtedness shall be deemed to have occurred as of the first day of the period of four consecutive fiscal quarters ending as of the end of the most recent fiscal quarter for
which annual or quarterly financial statements shall have been delivered in accordance with the provisions hereof. Further, for purposes of making calculations on a “Pro Forma Basis”
hereunder, (a) income statement items (whether positive or negative) attributable to the property, entities or business units that are the subject of the subject Acquisition or Disposition
shall be included (or in the case of Dispositions, excluded) to the extent relating to any period prior to the date of subject transaction, and (b) Indebtedness incurred or, in the case of a
Disposition, discharged in connection with the subject Acquisition or Disposition shall be deemed to have been incurred or, in the case of a Disposition, discharged as of the first day of
the applicable period (and interest expense shall be imputed for the applicable period assuming prevailing interest rates hereunder or excluded based on actual interest accrued in
accordance with GAAP).
“Pro Rata Share” means with respect to each Lender, a fraction (expressed as percentage, carried out to the ninth decimal place), the numerator of which is the amount of the
Commitment of such Lender at such time and the denominator of which is the amount of the Aggregate Commitments at such time; provided that if the Commitments shall have expired
or shall have been terminated pursuant to Section 9.02, then the Pro Rata Share of each Lender shall be determined based on the Pro Rata Share of such Lender immediately prior to such
expiration or termination and after giving effect to any subsequent assignments made pursuant to the terms hereof. The initial Pro Rata Shares of each Lender is set forth as such on
Schedule 2.01. The Pro Rata Shares shall be subject to adjustment as provided in Section 2.17.
“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“Public Lender” has the meaning specified in Section 7.02.
“Rate Determination Date” means, with respect to an Interest Period, two Business Days prior to the commencement of such Interest Period (or such other day as is generally
treated as the rate fixing day by market practice in such interbank market, as determined by the Administrative Agent; provided that to the extent such market practice is not
administratively feasible for the Administrative Agent, such other day as otherwise reasonably determined by the Administrative Agent).
“Reference Time” with respect to any setting of the then-current Benchmark means (a) if such Benchmark is LIBOR, 11:00 a.m., London time, on the day that is two London
banking days preceding the date of such setting, and (b) if such Benchmark is not LIBOR, the time determined by the Administrative Agent in its reasonable discretion.
“Register” has the meaning specified in Section 11.07(c).
“Related Indemnitee” of an Indemnitee means (i) any controlling Person or controlled affiliate of such Indemnitee, (ii) the respective directors, officers or employees of such
Indemnitee or any of its controlling Persons or controlled affiliates and (iii) the respective agents of such Indemnitee or any of its controlling Persons or controlled affiliates, in the case of
this clause (iii), acting on behalf of, or at the express instructions of, such Indemnitee, controlling Person or such controlled affiliate; provided that each reference to a controlling Person,
controlled affiliate, director, officer or employee in this definition pertains solely to a controlling Person, controlled affiliate, director, officer or employee involved in the negotiation or
syndication of this Agreement.
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“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers,
representatives and advisors of such Person and of such Person’s Affiliates.
“Relevant Governmental Body” means the FRB and/or the NYFRB, or a committee officially endorsed or convened by the FRB and/or the NYFRB or, in each case, any
successor thereto.
“Relevant Rate” means with respect to any Credit Extension denominated in (a) Dollars, LIBOR, (b) British Pounds Sterling, SONIA, (c) Euro, EURIBOR, (d) Canadian Dollars,
the CDOR Rate, (e) Japanese Yen, TIBOR, and (f) Australian Dollars, BBSY, as applicable.
“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the thirty-day notice period has been waived.
“Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with respect to an L/C
Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.
“Required Lenders” means, as of any date of determination, Lenders holding in the aggregate more than fifty percent (50%) of (a) the Aggregate Commitments or (b) if the
commitment of each Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 9.02, Lenders holding in the
aggregate more than 50% of the Obligations (including, in each case, the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations and Swing
Line Loans). The Commitment of, and the portion of the Obligations held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of
Required Lenders; provided that, the amount of any participation in any Swing Line Loan and Unreimbursed Amounts that such Defaulting Lender has failed to fund that have not been
reallocated to and funded by another Lender shall be deemed to be held by the Lender that is the Swing Line Lender or L/C Issuer, as the case may be, in making such determination.
“Rescindable Amount” has the meaning specified in Section 2.12(b)(ii).
“Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer” means the chief executive officer, president, chief financial officer, treasurer or assistant treasurer of a Borrower and, solely for purposes of the delivery of
incumbency certificates pursuant to Section 5.01, the secretary or any assistant secretary of a Borrower and, solely for purposes of notices given pursuant to Article II, any of the
foregoing officers and any other officer of the applicable Borrower so designated by any of the foregoing officers in a notice to the Administrative Agent or any other officer or employee
of the applicable Borrower designated in or pursuant to an agreement between the applicable Borrower and the Administrative Agent. Any document delivered hereunder that is signed by
a Responsible Officer of a Borrower shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Borrower and
such Responsible Officer shall be conclusively presumed to have acted on behalf of such Borrower.
“Revaluation Date” means each of the following: (a) with respect to any Loan, each of the following (i) each date of a Borrowing of an Alternative Currency Loan, (ii) each date
of a continuation of an Alternative Currency Term Rate Loan pursuant to Section 2.02, (iii) with respect to an Alternative Currency Daily Rate Loan, each Interest Payment Date, and (iv)
such additional dates as the Administrative Agent shall reasonably determine or the Required Lenders shall reasonably require; and (b) with respect to any Letter of Credit, each of the
following: (i) each date of issuance of a Letter of Credit denominated in an Alternative Currency, (ii) each date of an amendment of any such Letter of Credit having the effect of
increasing the amount thereof (solely with respect to the increased amount), (iii) each date of any payment by the L/C Issuer under any Letter of Credit denominated in an Alternative
Currency, and (iv) such additional dates as the Administrative Agent or the L/C Issuer shall reasonably determine or the Required Lenders shall reasonably require.
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“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc. and any successor thereto.
“Sale and Leaseback Transaction” means, with respect to the Company or any Subsidiary, any arrangement, directly or indirectly, with any Person whereby the Company or such
Subsidiary shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other
property that it intends to use for substantially the same purpose or purposes as the property being sold or transferred.
“Same Day Funds” means (a) with respect to disbursements and payments in Dollars, immediately available funds, and (b) with respect to disbursements and payments in an
Alternative Currency, same day or other funds as may be determined by the Administrative Agent or the L/C Issuer, as the case may be, to be customary in the place of disbursement or
payment for the settlement of international banking transactions in the relevant Alternative Currency.
“Sanction(s)” means any international economic sanction administered or enforced by the United States Government (including without limitation, OFAC), the United Nations
Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.
“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“Securitization Transaction” means any financing or factoring transaction (or series of such transactions) that has been or may be entered into by a member of the Consolidated
Group pursuant to which such member of the Consolidated Group may sell, convey or otherwise transfer, or may grant a security interest in, any accounts receivable, payment intangibles,
notes receivable, rights to future lease payments or residuals or other similar rights to payment to a special purpose Subsidiary or Affiliate of such Person.
“Security” means all capital stock, voting trust certificates, bonds, debentures, instruments and other evidence of Indebtedness, whether or not secured, convertible or
subordinated, all certificates of interest, share or participation in, all certificates for the acquisition of, and all warrants, options and other rights to acquire, any Security.
“SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the SOFR Administrator on
the SOFR Administrator’s Website at approximately 8:00 a.m. on the immediately succeeding Business Day.
“SOFR Administrator” means the NYFRB (or a successor administrator of the secured overnight financing rate).
“SOFR Administrator’s Website” means the NYFRB’s Website or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator
from time to time.
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“Solvent” means, with respect to any Person as of a particular date, after giving full effect to rights of contribution against or reimbursement from other Persons under applicable
Law or any Contractual Obligation, that on such date (a) such Person is able to pay its debts and other liabilities, contingent obligations and other commitments as they mature in the
normal course of business, (b) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities
mature in their ordinary course, (c) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s assets
would constitute unreasonably small capital after giving due consideration to the prevailing practice in the industry in which such Person is engaged or is to engage, (d) the fair value of
the assets of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, which for this purpose shall include rights of
contribution in respect of obligations for which such Person has provided a guarantee and (e) the present fair saleable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as they become absolute and matured, which for this purpose shall include rights of contribution in respect of
obligations for which such Person has provided a guarantee. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be computed at the
amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability reduced by
the amount of any contribution or indemnity that can reasonably be expected to be received.
“SONIA” means, with respect to any applicable determination date, the Sterling Overnight Index Average Reference Rate published on the fifth (5 ) Business Day preceding such
date on the applicable Reuters screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time);
provided however that if such determination date is not a Business Day, SONIA means such rate that applied on the first Business Day immediately prior thereto.
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“SONIA Adjustment” means, with respect to SONIA, 0.1193% per annum.
“Special Notice Currency” means at any time an Alternative Currency, other than the currency of a country that is a member of the Organization for Economic Cooperation and
Development at such time located in North America or Europe.
“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares or other interests
having ordinary voting power for the election of directors or other governing body (other than shares or interests having such power only by reason of the happening of a contingency) are
at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise
specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Company.
“Successor Rate” has the meaning specified in Section 3.03(b).
“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options,
forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps, options or forward bond or forward bond price or forward bond index
transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing),
whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, that are subject to the
terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange
Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities
under any Master Agreement.
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“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such
Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s),
and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more
mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).
“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.04.
“Swing Line Lender” means Bank of America in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.
“Swing Line Loan” has the meaning specified in Section 2.04(a).
“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b), which shall be substantially in the form of Exhibit B or such other form as
approved by the Administrative Agent (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent pursuant),
appropriately completed and signed by a Responsible Officer of the applicable Domestic Borrower.
“Swing Line Sublimit” means the lesser of (a) ONE HUNDRED MILLION DOLLARS ($100,000,000) and (b) the Aggregate Commitments. The Swing Line Sublimit is a part
of, and not in addition to, the Aggregate Commitments.
“Synthetic Lease” means any synthetic, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an operating lease under GAAP.
“TARGET2” means the Trans-European Automated Real-time Gross Settlement Express Transfer payment system which utilizes a single shared platform and which was
launched on November 19, 2007.
“TARGET Day” means any day on which TARGET2 (or, if such payment system ceases to be operative, such other payment system, if any, determined by the Administrative
Agent to be a suitable replacement) is open for the settlement of payments in Euro.
“Taxes” means all present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings (including backup withholding) or similar charges imposed by any
Governmental Authority, including any interest, penalties, and liabilities with respect thereto.
“Term SOFR” means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term rate based on SOFR that has been selected or
recommended by the Relevant Governmental Body.
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“Term SOFR Notice” means a notification by the Administrative Agent to the Lenders and the Company of the occurrence of a Term SOFR Transition Event.
“Term SOFR Transition Event” means the determination by the Administrative Agent that (a) Term SOFR has been recommended for use by the Relevant Governmental Body,
(b) the administration of Term SOFR is administratively feasible for the Administrative Agent and (c) a Benchmark Transition Event or an Early Opt-in Election (and, for the avoidance
of doubt, not in the case of an Other Benchmark Rate Election), as applicable, has previously occurred resulting in a Benchmark Replacement in accordance with Section 3.03 that is not
Term SOFR.
“Third Amendment Effective Date” means December 10, 2021.
“Threshold Amount” means ONE HUNDRED MILLION DOLLARS ($100,000,000).
“Type” means, with respect to a Committed Loan, its character as a Base Rate Loan, a Eurocurrency Rate Loan, an Alternative Currency Daily Rate Loan or an Alternative
Currency Term Rate Loan.
“UCP” means, with respect to any Letter of Credit, the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce (“ICC”) Publication No.
600 (or such later version thereof as may be in effect at the time of issuance).
“UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated by the United Kingdom
Prudential Regulation Authority) or any person subject to IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct
Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
“UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
“Unfunded Pension Liability” means, the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets,
determined as of the date of the most recently completed actuarial valuation report for that Pension Plan in accordance with the assumptions used for funding the Pension Plan pursuant to
Section 412 of the Internal Revenue Code.
“United States” and “U.S.” mean the United States of America.
“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).
“Unrestricted Cash” means, at any time, cash and cash equivalents owned at such time by any member of the Consolidated Group, determined on a consolidated basis in
accordance with GAAP; provided that such cash and cash equivalents do not appear (and in accordance with GAAP would not be required to appear) as “restricted” on the consolidated
balance sheet of the Consolidated Group prepared as of such time in accordance with GAAP.
“U.S. Person” has the meaning specified in Section 11.15(a).
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“Write-Down and Conversion Powers” means (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from
time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule and
(b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any
UK Financial Institution or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any
other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the
powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
1.02 Other Interpretive Provisions.
With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:
(a)
The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.
(b)
(i) The words “herein,” “hereto,” “hereof” and “hereunder” and words of similar import when used in any Loan Document shall refer to such Loan Document
as a whole and not to any particular provision thereof.
(ii)
Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears unless otherwise expressly referenced.
(iii)
The term “including” is by way of example and not limitation.
(iv)
The term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings,
however evidenced, whether in physical or electronic form.
(c)
In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to” and “until” each
mean “to but excluding”; and the word “through” means “to and including.”
(d)
Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement
or any other Loan Document.
1.03
Accounting Terms.
(a)
All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and
other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, except as otherwise
specifically prescribed herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant)
contained herein, Funded Debt of the Company and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB
ASC 825 on financial liabilities shall be disregarded. For purposes of calculations made pursuant to the terms of this Agreement, GAAP will be deemed to treat operating leases
in a manner consistent with their current treatment under GAAP as in effect on the Closing Date, notwithstanding any modifications or interpretive changes thereto that may
occur thereafter.
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(b)
At the Company’s election, determinations of compliance with the financial covenant hereunder may be made on a Pro Forma Basis with respect to one or more
Acquisitions, Dispositions of all of the equity interests of, or all or substantially all of the assets of, a Subsidiary or any Disposition of a line of business or a division of a
Borrower or a Subsidiary, in each case, consummated after the Closing Date; provided that with respect to any such Acquisition or Disposition (i) the Company must elect to treat
such Acquisition or Disposition on a Pro Forma Basis on or before the delivery of the Compliance Certificate relating to the first fiscal quarter period ending after the date of such
Acquisition or Disposition, (ii) the Company must indicate such election on such Compliance Certificate and (iii) such election shall be irrevocable. Absent the Company’s
election to treat an Acquisition or Disposition on a Pro Forma Basis in accordance with this subsection (b), determinations of compliance with the financial covenant hereunder
shall not be made on a Pro Forma Basis with respect to such Acquisition or Disposition.
(c)
The Company will provide a written summary of material changes in GAAP affecting the financial reporting of the Company or in the consistent application
thereof by the Company with each annual and quarterly Compliance Certificate delivered in accordance with Section 7.02(b). If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan Document, and either the Company or the Required Lenders shall so request, the Administrative Agent,
the Lenders and the Company shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to
the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) the Company shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.
1.04
Rounding.
Any financial ratios required to be maintained by the Company pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component,
carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05
References to Agreements and Laws.
Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Loan Documents) and other contractual instruments shall be
deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements,
extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Law.
1.06
Times of Day; Rates.
Unless otherwise specified, all references herein to times of day shall be references to New York time (Eastern daylight or standard, as applicable). The Administrative Agent
does not warrant, nor accept responsibility, nor shall the Administrative Agent have any liability with respect to the administration, submission or any other matter related to the rates in
the definitions of “Alternative Currency Daily Rate”, “Alternative Currency Term Rate”, “Eurocurrency Rate” or with respect to any rate (including for the avoidance of doubt, the
selection of such rate and any related spread or adjustment) that is an alternative or replacement for or successor to any such rate (including, without limitation, any Successor Rate) or the
effect of any of the foregoing, or of any Conforming Changes.
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1.07
Letter of Credit Amounts.
Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the Dollar Equivalent of the stated amount of such Letter of Credit in effect
at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic
increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the Dollar Equivalent of the maximum stated amount of such Letter of Credit after giving
effect to all such increases, whether or not such maximum stated amount is in effect at such time.
1.08
Exchange Rates; Currency Equivalents.
(a)
The Administrative Agent or the L/C Issuer, as applicable, shall determine the Dollar Equivalent amounts of Credit Extensions and Outstanding Amounts
denominated in Alternative Currencies. Such Dollar Equivalent shall become effective as of such Revaluation Date and shall be the Dollar Equivalent amounts until the next
Revaluation Date to occur. Except for purposes of financial statements delivered by the Company hereunder or calculating the financial covenant hereunder or except as otherwise
provided herein, the applicable amount of any currency (other than Dollars) for purposes of the Loan Documents shall be such Dollar Equivalent amount as so determined by the
Administrative Agent or the L/C Issuer, as applicable.
(b)
Wherever in this Agreement in connection with a Borrowing, the conversion, continuation or prepayment of an Alternative Currency Loan or the issuance,
amendment or extension of a Letter of Credit, an amount, such as a required minimum or multiple amount, is expressed in Dollars, but such Borrowing, Alternative Currency
Loan or Letter of Credit is denominated in an Alternative Currency, such amount shall be the relevant Alternative Currency Equivalent of such Dollar amount (rounded to the
nearest unit of such Alternative Currency, with 0.5 of a unit being rounded upward), as determined by the Administrative Agent or the L/C Issuer, as the case may be.
1.09
Additional Alternative Currencies.
(a)
The Company may from time to time request that Alternative Currency Loans be made and/or Letters of Credit be issued in a currency other than those
specifically listed in the definition of “Alternative Currency”; provided that such requested currency is lawful currency (other than Dollars) that is readily available and freely
transferable and convertible into Dollars. In the case of any such request with respect to the making of Alternative Currency Loans, such request shall be subject to the approval of
the Administrative Agent and the Lenders obligated to make Credit Extensions in such currency; and in the case of any such request with respect to the issuance of Letters of
Credit, such request shall be subject to the approval of the Administrative Agent and the L/C Issuer.
(b)
Any such request shall be made to the Administrative Agent not later than 12:00 noon twelve Business Days prior to the date of the desired Credit Extension (or
such other time or date as may be agreed by the Administrative Agent, and in the case of any such request pertaining to Letters of Credit, the L/C Issuer, in its or their sole
discretion). In the case of any such request pertaining to Alternative Currency Loans, the Administrative Agent shall promptly notify each Lender thereof; and in the case of any
such request pertaining to Letters of Credit, the Administrative Agent shall promptly notify the L/C Issuer thereof. Each Lender (in the case of any such request pertaining to
Alternative Currency Loans) or the L/C Issuer in the case of a request pertaining to Letters of Credit) shall notify the Administrative Agent, not later than 12:00 noon ten Business
Days after receipt of such request whether it consents, in its sole discretion, to the making of Alternative Currency Loans or the issuance of Letters of Credit, as the case may be,
in such requested currency.
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(c)
Any failure by a Lender or the L/C Issuer, as the case may be, to respond to such request within the time period specified in the preceding sentence shall be
deemed to be a refusal by such Lender or the L/C Issuer, as the case may be, to permit Alternative Currency Loans to be made or Letters of Credit to be issued in such requested
currency. If the Administrative Agent and all the Lenders consent to making Alternative Currency Loans in such requested currency and the Administrative Agent and such
Lenders reasonably determine that an appropriate interest rate is available to be used for such requested currency, the Administrative Agent shall so notify the Company and (i)
the Administrative Agent and the Lenders may amend the definition Alternative Currency Daily Rate or Alternative Currency Term Rate to the extent necessary to add the
applicable rate for such currency and any applicable adjustment for such rate and (ii) to the extent the definition of Alternative Currency Daily Rate or Alternative Currency Term
Rate, as applicable, reflects the appropriate interest rate for such currency or has been amended to reflect the appropriate rate for such currency, such currency shall thereupon be
deemed for all purposes to be an Alternative Currency for purposes of any Committed Borrowings of Alternative Currency Loans. If the Administrative Agent and the L/C Issuer
consent to the issuance of Letters of Credit in such requested currency, the Administrative Agent shall so notify the Company and (x) the Administrative Agent and the L/C Issuer
may amend the definition of Alternative Currency Daily Rate or Alternative Currency Term Rate, as applicable, to the extent necessary to add the applicable rate for such
currency and any applicable adjustment for such rate and (y) to the extent the definition of Alternative Currency Daily Rate or Alternative Currency Term Rate, as applicable, has
been amended to reflect the appropriate rate for such currency, such currency shall thereupon be deemed for all purposes to be an Alternative Currency for purposes of any Letter
of Credit issuances. If the Administrative Agent shall fail to obtain consent to any request for an additional currency under this Section 1.09, the Administrative Agent shall
promptly so notify the Company. Upon any Lender’s refusal to make Committed Loans in the additional requested currency, the Company may replace such Lender in accordance
with Section 11.16.
1.10
Redenomination of Certain Alternative Currencies; Change of Currency.
(a)
Each obligation of the Borrowers to make a payment denominated in the national currency unit of any member state of the European Union that adopts the Euro
as its lawful currency after the date hereof shall be redenominated into Euro at the time of such adoption. If, in relation to the currency of any such member state, the basis of
accrual of interest expressed in this Agreement in respect of that currency shall be inconsistent with any convention or practice in the interbank market for the basis of accrual of
interest in respect of the Euro, such expressed basis shall be replaced by such convention or practice with effect from the date on which such member state adopts the Euro as its
lawful currency; provided that, if any Committed Borrowing in the currency of such member state is outstanding immediately prior to such date, such replacement shall take
effect, with respect to such Committed Borrowing, at the end of the then current Interest Period.
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(b)
Each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify to be
appropriate to reflect the adoption of the Euro by any member state of the European Union and any relevant market conventions or practices relating to the Euro.
(c)
Each provision of this Agreement also shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify to
be appropriate to reflect a change in currency of any other country and any relevant market conventions or practices relating to the change in currency.
1.11
Belgium Terms.
In this Agreement, where it relates to the Belgian Borrower, a reference to:
(a)
a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrator receiver, administrator or similar officer shall be
deemed to include any curator / curateur, vereffenaar / liquidateur, voorlopig bewindvoerder / administrateur provisoire, gerechtsmandataris / mandataire de justice and
sekwester / séquestre;
(b)
a Person being unable to pay its debts is that Person being in a state of cessation of payments (staking van betaling / cessation de paiements);
(c)
an insolvency shall be deemed to include a gerechtelijke reorganisatie / réorganisation judiciaire, faillissement / faillite and any other concurrence between
creditors (samenloop van schuldeisers / concours des créanciers);
(d)
a moratorium or composition shall be deemed to include any gerechtelijke reorganisatie / réorganisation judiciaire; winding up, administration, liquidation
or dissolution includes any vereffening / liquidation, ontbinding / dissolution, faillissement / faillite and sluiting van een onderneming / fermeture d’enterprise;
(e)
créanciers;
an assignment or similar arrangement with any creditor shall be deemed to include a minnelijk akkoord met alle schuldeisers/ accord amiable avec tous les
(f)
an attachment, sequestration, distress, execution or analogous events shall be deemed to include any uitvoerend beslag / saisie exécutoire and bewarend beslag
/ saisie conservatoire;
(g)
a security interest or security shall be deemed to include any mortgage (hypotheek / hypothèque), pledge (pand / gage), privilege (voorrecht / privilège),
retention right (eigendomsvoorbehoud / réserve de propriété), any security in rem (zakelijke zekerheid / sûreté réelle) and any transfer by way of security (overdracht ten titel van
zekerheid / transfert à titre de garantie) and, in general, any right in rem created for the purpose of granting security and any promise or mandate to create any of the security
interest mentioned above;
(h)
a company organized under the laws of Belgium shall be deemed to include any company which has its main establishment (voornaamste vestiging /
établissement principal) in Belgium;
(i)
a subsidiary shall be deemed to include a dochtervennootschap / filiale as defined in Article 6 of the Belgian Company Code.
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1.12 Dutch Terms.
In this Agreement, where it relates to a Designated Borrower organized in the Netherlands (if any), (i) a “winding-up” includes a Dutch entity being dissolved (ontbonden), (ii) a
“trustee in bankruptcy” includes a curator, (iii) an “administrator” includes a bewindvoerder, (iv) a “Lien” includes any mortgage (hypotheek), pledge (pandrecht), right of retention
(recht van retentie) and in general, any right in rem (beperkt recht), created for the purpose of granting security (goederenrechtelijk zekerheidsrecht), (v) a “bankers' lien” includes any
security of account holding banks arising under their general terms and conditions, and (vi) board of directors shall refer to the management board (bestuur) and a director shall refer to a
member of the management board (bestuurder).
1.13
Interest Rate; LIBOR Notification.
The interest rate on a Loan may be derived from an interest rate benchmark that is, or may in the future become, the subject of regulatory reform. Regulators have signaled the
need to use alternative benchmark reference rates for some of these interest rate benchmarks and, as a result, such interest rate benchmarks may cease to comply with applicable Laws and
regulations, may be permanently discontinued, and/or the basis on which they are calculated may change. The London interbank offered rate is intended to represent the rate at which
contributing banks may obtain short-term borrowings from each other in the London interbank market. On March 5, 2021, the U.K. Financial Conduct Authority (“FCA”) publicly
announced that: (a) immediately after December 31, 2021, publication of all seven Euro London interbank offered rate settings, the spot next, 1-week, 2-month and 12-month Japanese
Yen London interbank offered rate settings, the overnight, 1-week, 2-month and 12-month British Pounds Sterling London interbank offered rate settings, and the 1-week and 2-month
Dollar London interbank offered rate settings will permanently cease; (b) immediately after June 30, 2023, publication of the overnight and 12-month Dollar London interbank offered
rate settings will permanently cease; (c) immediately after December 31, 2021, the 1-month, 3-month and 6-month Japanese Yen London interbank offered rate settings and the 1-month,
3-month and 6-month British Pounds Sterling London interbank offered rate settings will cease to be provided or, subject to consultation by the FCA be provided on a changed
methodology (or “synthetic”) basis and no longer be representative of the underlying market and economic reality they are intended to measure and that representativeness will not be
restored and (d) immediately after June 30, 2023, the 1-month, 3-month and 6-month Dollar London interbank offered rate settings will cease to be provided or, subject to the FCA’s
consideration of the case, be provided on a changed methodology (or “synthetic”) basis and no longer be representative of the underlying market and economic reality they are intended to
measure and that representativeness will not be restored. There is no assurance that dates announced by the FCA will not change or that the administrator of the London interbank offered
rate and/or regulators will not take further action that could impact the availability, composition, or characteristics of the London interbank offered rate or the currencies and/or tenors for
which the London interbank offered rate is published. Each party to this Agreement should consult its own advisors to stay informed of any such developments. Public and private sector
industry initiatives are currently underway to identify new or alternative reference rates to be used in place of the London interbank offered rate. Upon the occurrence of a Benchmark
Transition Event, a Term SOFR Transition Event, an Early Opt-in Election or an Other Benchmark Rate Election or, in the case of an Alternative Currency if the circumstances described
in Section 3.03(b) have occurred, Sections 3.03(b) and 3.03(c) provide mechanisms for determining alternative rates of interest. The Administrative Agent will promptly notify the
Company, pursuant to Section 3.03, of any change to the reference rate upon which the interest rate on Eurocurrency Rate Loans or Alternative Currency Loans is based. However, the
Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration, submission, performance or any other matter
related to the London interbank offered rate, SONIA or other rates in the definition of “LIBOR”, “Alternative Currency Daily Rate” or Alternative Currency Term Rate”, as applicable, or
with respect to any alternative or successor rate thereto, or replacement rate thereof (including, without limitation, (i) any such alternative, successor or replacement rate implemented
pursuant to Section 3.03(b) or 3.03(c), whether upon the occurrence of a Benchmark Transition Event, a Term SOFR Transition Event, an Early Opt-in Election, an Other Benchmark
Rate Election or, in the case of an Alternative Currency the circumstances described in Section 3.03(b), and (ii) the implementation of any Conforming Changes or Benchmark
Replacement Conforming Changes pursuant to Section 3.03(b) or 3.03(c)(ii), as applicable), including, without limitation, whether the composition or characteristics of any such
alternative,
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successor or replacement reference rate will be similar to, or produce the same value or economic equivalence of, LIBOR, SONIA, EURIBOR, TIBOR, CDOR or BBSY, as applicable, or
have the same volume or liquidity as did the London interbank offered rate (or other applicable rate) prior to its discontinuance or unavailability. The Administrative Agent and its
Affiliates and/or other related entities may engage in transactions that affect the calculation of SONIA, any alternative, successor or alternative rate (including any Benchmark
Replacement or Successor Rate) and/or any relevant adjustments thereto, in each case, in a manner adverse to the Company. The Administrative Agent may select information sources or
services in its reasonable discretion to ascertain LIBOR, SONIA, the Alternative Currency Daily Rate, the Alterative Currency Term Rate, any component thereof or rates referenced in
the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no liability to the Company, any Lender or any other Person for damages of any kind, including
direct or indirect, special, punitive, incidental or consequential damages, costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or
calculation of any such rate (or component thereof) provided by any such information source or service.
Article II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01
Committed Loans.
(a)
Committed Loans. Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan a “Committed Loan”) to the
Borrowers in Dollars or Alternative Currencies from time to time on any Business Day; provided that after giving effect to any such Committed Loan, (i) with regard to the
Lenders collectively, the aggregate principal amount of Loan Obligations shall not exceed the Aggregate Commitments and (ii) with regard to each Lender individually, such
Lender’s Pro Rata Share of the Loan Obligations plus, without duplication and if applicable, the aggregate Outstanding Amount of all Swing Line Loans advanced by such
Lender in its capacity as Swing Line Lender, shall not exceed its Commitment. Committed Loans may consist of Base Rate Loans, Eurocurrency Rate Loans, Alternative
Currency Daily Rate Loans or Alternative Currency Term Rate Loans, or a combination thereof, as the applicable Borrower may request, and may be repaid and reborrowed in
accordance with the provisions hereof.
(b)
Increases of the Aggregate Commitments and Incremental Term Facilities. The Company shall have the right, upon at least fifteen Business Days’ prior written
notice to the Administrative Agent but without the consent of the Required Lenders, to (i) add one or more tranches of term loans (any credit facility providing for any such term
loans being referred to as an “Incremental Term Facility”) and/or (ii) increase the Aggregate Commitments, in an aggregate amount for such increases and requested term loans
not to exceed $500,000,000 in up to five (5) increases or term loans, at any time and from time to time after the Closing Date, subject, however, in any such case, to satisfaction of
the following conditions precedent:
(i)
Lenders;
the Aggregate Commitments plus the amount of any Incremental Term Facilities shall not exceed $1,500,000,000 without the consent of the Required
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(ii)
no Default shall have occurred and be continuing on the date on which such increase or requested term loan is to become effective;
(iii)
the representations and warranties set forth in Article VI shall be true and correct in all material respects on and as of the date on which such increase or
requested term loan is to become effective, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be
true and correct in all material respects as of such earlier date, and except that for purposes of this Section 2.01(b), the representations and warranties contained in
subsections (a) and (b) of Section 6.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 7.01;
(iv)
such increase or requested term loan shall be in a minimum amount of $10,000,000 (or such lesser amount as agreed upon by the Company and the
Administrative Agent) and in integral multiples of $1,000,000 in excess thereof;
(v)
the Administrative Agent shall have received (A) additional commitments in a corresponding amount of such requested increase or term loan from either
existing Lenders and/or one or more other institutions that qualify as an Eligible Assignee (it being understood and agreed that no existing Lender shall be required to
provide an additional commitment unless it agrees to do so in its sole discretion) and (B) documentation from each institution providing an additional commitment
evidencing their commitment and their obligations under this Agreement in form and substance reasonably acceptable to the Administrative Agent;
(vi)
the Administrative Agent shall have received all documents (including resolutions of the board of directors of the Borrowers) it may reasonably request
relating to the corporate or other necessary authority for and the validity of such increase in the Aggregate Commitments or requested term loans, and any other matters
relevant thereto, all in form and substance reasonably satisfactory to the Administrative Agent;
(vii)
upon the reasonable request of any Lender providing an additional commitment made at least ten days prior to the effective date thereof, the Company
shall have provided to such Lender the documentation and other information so requested in connection with applicable “know your customer” and anti-money-
laundering rules and regulations, including the PATRIOT Act, in each case at least five days prior to the effective date for such increase or requested term loan;
(viii)
at least five days prior to the effective date for such increase or requested term loan, if a Borrower qualifies as a “legal entity customer” under the
Beneficial Ownership Regulation, such Borrower shall deliver a Beneficial Ownership Certification in relation to such Borrower;
(ix)
such requested increase or term loan shall become effective on a date agreed by the Company and the Administrative Agent, and the Administrative
Agent shall promptly notify the Lenders of such effective date;
(x)
any Incremental Term Facility that constitutes additional term loans under a then existing tranche of term loans shall be made on the same terms and
provisions (other than upfront fees) as apply to such outstanding term loans, including with respect to maturity date, interest rate and prepayment provisions, and shall not
constitute a credit facility separate and apart from such term loans;
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(xi)
any Incremental Term Facility shall (A) have a maturity date that is no earlier than the Maturity Date for the Aggregate Commitments or the maturity date
for any previously incurred Incremental Term Facility and (B) have a weighted average life to maturity that is no shorter than the weighted average life to maturity of any
previously incurred Incremental Term Facility;
(xii)
after giving effect to the incurrence of any Incremental Term Facility and any related transactions, on a Pro Forma Basis, the Borrowers shall be in
compliance with the financial covenant set forth in Section 8.06; and
(xiii)
if any Committed Loans are outstanding at the time of the requested increase in the Aggregate Commitments, each Borrower shall, if applicable, prepay
one or more of such Borrower’s existing Committed Loans (such prepayment to be subject to Section 3.05) in an amount necessary such that after giving effect to the
increase in the Aggregate Commitments, each Lender will hold its pro rata share (based on its Pro Rata Share of the increased Aggregate Commitments) of outstanding
Committed Loans.
Notwithstanding any provision in Section 11.01 to the contrary, each Incremental Term Facility shall be evidenced by an amendment (an “Incremental Facility
Amendment”) to this Agreement, giving effect to the modifications permitted by this Section 2.01(b), executed by the Borrowers, the Administrative Agent and each Lender
providing a portion of the Incremental Term Facility which such amendment, when so executed, shall amend this Agreement as provided therein. Each Incremental Facility
Amendment shall also require such amendments to the Loan Documents, and such other new Loan Documents, as the Administrative Agent reasonably deems necessary or
appropriate to effect the modifications and credit extensions permitted by this Section 2.01(b) and, in each case, as agreed by the Company. Neither any Incremental Facility
Amendment, nor any such amendments to the other Loan Documents or such other new Loan Documents, shall be required to be executed or approved by any Lender, other than
the Lenders providing such Incremental Term Facility and the Borrowers and the Administrative Agent, in order to be effective. The effectiveness of any Incremental Facility
Amendment shall be subject to the satisfaction on the date thereof of each of the conditions set forth above and such other conditions as requested by the Lenders under the
Incremental Term Facility established in connection therewith.
2.02
Borrowings, Conversions and Continuations of Committed Loans.
(a)
Each Committed Borrowing, each conversion of Committed Loans from one Type to the other, and each continuation of Eurocurrency Rate Loans or Alternative
Currency Term Rate Loans shall be made upon the applicable Borrower’s irrevocable notice to the Administrative Agent, which may be given by: (A) telephone or (B) a
Committed Loan Notice; provided that any telephonic notice must be confirmed immediately by delivery to the Administrative Agent of a Committed Loan Notice. Each such
Committed Loan Notice must be received by the Administrative Agent not later than 12:00 noon (i) in the case of Eurocurrency Rate Loans, three Business Days prior to the
requested date of any Committed Borrowing of, conversion to or continuation of Eurocurrency Rate Loans or of any conversion of Eurocurrency Rate Loans to Base Rate Loans,
(ii) in the case of Alternative Currency Loans, four Business Days (or five Business Days in the case of Special Notice Currency) prior to the requested date of any Committed
Borrowing or, in the case of Alternative Currency Term Rate Loans, continuation and (iii) one Business Day prior to the requested date of any Committed Borrowing of Base
Rate Loans. Each Committed Borrowing of, conversion to or continuation of Eurocurrency Rate Loans or Alternative Currency Loans, as applicable, shall be in a principal
amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c), each Committed Borrowing of or conversion to
Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof. Each Committed Loan Notice shall specify (i) whether a
Committed Borrowing, a conversion of Committed Loans from one Type to the other, or a continuation of Loans is being requested, (ii) the requested date of the
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Committed Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Committed Loans to be borrowed, converted
or continued, (iv) the Type of Committed Loans to be borrowed or to which existing Committed Loans are to be converted, (v) if applicable, the duration of the Interest Period
with respect thereto, (vi) if applicable, the Alternative Currency requested with respect thereto and (vii) the applicable Borrower. If a Borrower fails to specify a currency in a
Committed Loan Notice requesting a Borrowing, then the Committed Loans so requested shall be made in Dollars. If a Borrower fails to specify a Type of Committed Loan in a
Committed Loan Notice or if a Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Committed Loans shall be made as, or
converted to, Base Rate Loans on the last day of the Interest Period applicable thereto; provided, however, that in the case of a failure to timely request a continuation of
Alternative Currency Term Rate Loans, such Loans shall be continued as Alternative Currency Term Rate Loans in their original currency with an Interest Period of one month. If
a Borrower requests a Borrowing of, conversion to, or continuation of Eurocurrency Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will
be deemed to have specified an Interest Period of one month. No Committed Loan may be converted into or continued as a Committed Loan denominated in a different currency,
but instead must be prepaid in the original currency of such Loan and reborrowed in the other currency.
(b)
Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount (and currency) of its Pro Rata Share of
the applicable Committed Loans, and if no timely notice of a conversion or continuation is provided by a Borrower, the Administrative Agent shall notify each Lender of the
details of any automatic conversion to Base Rate Loans or continuation of Alternative Currency Term Rate Loans, in each case as described in the preceding subsection. In the
case of a Committed Borrowing, each Lender shall make the amount of its Committed Loan available to the Administrative Agent in Same Day Funds at the Administrative
Agent’s Office for the applicable currency not later than 1:00 p.m., in the case of any Committed Loan denominated in Dollars, and not later than the Applicable Time specified
by the Administrative Agent in the case of any Committed Loan denominated in an Alternative Currency, in each case on the Business Day specified in the applicable Committed
Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 5.02 (and, if such Borrowing is the initial Credit Extension, Section 5.01), the Administrative
Agent shall make all funds so received available to the applicable Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of such
Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the applicable Borrower; provided, however, that, if, on the date any Committed Loan Notice with respect to a Committed
Borrowing denominated in Dollars is given by any Domestic Borrower there are Swing Line Loans outstanding, such Committed Borrowing shall be in an amount at least equal
to the Outstanding Amount of all Swing Line Loans, and the proceeds of such Committed Borrowing shall be applied first to the payment in full of all outstanding Swing Line
Loans, and second, shall be made available to the applicable Borrower as provided above; provided, further, that, if on such date there are also L/C Borrowings outstanding, then
the proceeds of such Committed Borrowing (to the extent not otherwise applied to the payment of Swing Line Loans pursuant to the foregoing) shall next be applied to the
payment in full of any such L/C Borrowings, and then shall be made available to the applicable Borrower as provided above.
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(c)
Except as otherwise provided herein, a Eurocurrency Rate Loan or an Alternative Currency Term Rate Loan may be continued or converted only on the last day
of the Interest Period for such Loan. During the existence of a Default or Event of Default, no Loans may be requested as, converted to or continued as Eurocurrency Rate Loans
or Alternative Currency Term Rate Loans, as applicable, without the consent of the Required Lenders, and the Required Lenders may demand that (i) any or all of the then
outstanding Eurocurrency Rate Loans be converted to Base Rate Loans on the last day of the then applicable Interest Period and (ii) any or all of the then outstanding Alternative
Currency Loans be prepaid, or redenominated into Dollars in the amount of the Dollar Equivalent thereof, on the last day of the then current Interest Period with respect thereto.
(d)
With respect to any Alternative Currency Daily Rate, the Administrative Agent will have the right to make Conforming Changes from time to time and,
notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such Conforming Changes will become effective without any
further action or consent of any other party to this Agreement or any other Loan Document; provided, that, with respect to any such amendment effected, the Administrative
Agent shall post each such amendment implementing such Conforming Changes to the Company and the Lenders reasonably promptly after such amendment becomes effective.
(e)
After giving effect to all Committed Borrowings, all conversions of Committed Loans from one Type to the other, and all continuations of Committed Loans as
the same Type, there shall not be more than ten Interest Periods in effect with respect to Committed Loans.
2.03
Letters of Credit.
(a)
The Letter of Credit Commitment.
(i)
Letter of Credit Commitment. Subject to the terms and conditions set forth herein,
(A)
the L/C Issuer agrees, in reliance upon the agreements of the other Lenders set forth herein, (1) on any Business Day during the period from the
Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit in Dollars or Alternative Currencies for the account of a Borrower or any of its
Subsidiaries, and to amend or renew Letters of Credit previously issued by it, in accordance with the provisions hereof, and (2) to honor drafts under Letters of
Credit, and
(B)
the Lenders severally agree to participate in the Letters of Credit as provided herein;
provided that (x) the aggregate principal amount of L/C Obligations shall not exceed the Letter of Credit Sublimit, (x) with regard to the Lenders collectively, the
aggregate principal amount of Loan Obligations shall not exceed the Aggregate Commitments and (y) with regard to each Lender individually, such Lender’s Pro Rata
Share of the Loan Obligations plus, without duplication and if applicable, the aggregate Outstanding Amount of all Swing Line Loans advanced by such Lender in its
capacity as Swing Line Lender shall not exceed its Commitment. Subject to the terms and conditions hereof, the Borrowers’ ability to obtain Letters of Credit shall be
fully revolving and accordingly a Borrower may obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.
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(ii)
The L/C Issuer shall be under no obligation to issue any Letter of Credit if:
(A)
any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from
issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter
of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C
Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense that
was not applicable on the Closing Date and that the L/C Issuer in good faith deems material to it;
(B)
the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;
(C)
Letter of Credit;
such Letter of Credit is in an initial amount less than $25,000, in the case of a commercial Letter of Credit, or $100,000, in the case of a standby
(D)
except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is to be denominated in a currency other than
Dollars or an Alternative Currency;
(E)
the L/C Issuer does not as of the issuance date of such requested Letter of Credit issue Letters of Credit in the requested currency;
(F)
any Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements, including the delivery of Cash Collateral,
satisfactory to the L/C Issuer (in its sole discretion) with the Company (or the applicable Borrower) or such Lender to eliminate the L/C Issuer’s actual or
potential Fronting Exposure (after giving effect to Section 2.17(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed
to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole
discretion; or
(G)
the Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder.
(iii)
The L/C Issuer shall not issue any Letter of Credit if:
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(A)
subject to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance
or last renewal, unless the Required Lenders have approved such expiry date; or
(B)
the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all of the Lenders have approved
such expiry date.
(iv)
The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter
of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.
(v)
The L/C Issuer shall not issue or amend any Letter of Credit if (A) one or more applicable conditions contained in Article V shall not then be satisfied
and the L/C Issuer shall have received written notice thereof from any Lender, the Administrative Agent or any Borrower on or prior to the Business Day prior to the
requested date of issuance or amendment of such Letter of Credit, or (B) the Commitments have been terminated pursuant to Section 9.02.
(vi)
The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C
Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article X with respect to any acts taken or omissions suffered by the L/C
Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term
“Administrative Agent” as used in Article X included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the
L/C Issuer.
(b)
Procedures for Issuance and Amendment of Letters of Credit; Auto-Renewal Letters of Credit.
(i)
Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Company or the applicable Borrower delivered to the L/C
Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the
Company or such Borrower. Such Letter of Credit Application may be sent by facsimile, by United States mail, by overnight courier, by electronic transmission using the
system provided by the L/C Issuer, by personal delivery or by any other means reasonably acceptable to the L/C Issuer. Such Letter of Credit Application must be
received by the L/C Issuer and the Administrative Agent not later than 12:00 noon at least two Business Days (or such later date and time as the Administrative Agent
and the L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a
request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount and currency thereof; (C) the expiry date thereof; (D) the name
and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as the L/C
Issuer may reasonably require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and
detail reasonably satisfactory to the L/C Issuer: (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C)
the nature of the proposed amendment; and (D) such other matters as
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the L/C Issuer may reasonably require. Additionally, the Company or the applicable Borrower shall furnish to the L/C Issuer and the Administrative Agent such other
documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or the Administrative
Agent may reasonably require.
(ii)
Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the
Administrative Agent has received a copy of such Letter of Credit Application from the Company or the applicable Borrower and, if not, the L/C Issuer will provide the
Administrative Agent with a copy thereof. Unless the L/C Issuer has received written notice from any Lender, the Administrative Agent or any Borrower, at least one
Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article V shall
not then be satisfied, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the applicable
Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer’s usual and customary business practices.
Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C
Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lender’s Pro Rata Share times the amount of such Letter of Credit.
(iii)
If the Company or the applicable Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute
discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension
Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter
of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at
the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Company or the applicable Borrower shall not be required to make a specific
request to the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not
require) the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however,
that the L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would not otherwise have an obligation, at
such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of Section 2.03(a) or otherwise), or (B) it has
received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension Notice Date (1) from the
Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Lender or the Company that one or
more of the applicable conditions specified in Section 5.02 is not then satisfied, and in each such case directing the L/C Issuer not to permit such extension.
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(iv)
Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary
thereof, the L/C Issuer will also deliver to the Company, the applicable Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or
amendment.
(c)
Drawings and Reimbursements; Funding of Participations.
(i)
Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the Company,
the applicable Borrower and the Administrative Agent thereof. In the case of a Letter of Credit denominated in an Alternative Currency, the applicable Borrower shall
reimburse the L/C Issuer in such Alternative Currency, unless (A) the L/C Issuer (at its option) shall have specified in such notice that it will require reimbursement in
Dollars, or (B) in the absence of any such requirement for reimbursement in Dollars, the Company or the applicable Borrower shall have notified the L/C Issuer promptly
following receipt of the notice of drawing that the applicable Borrower will reimburse the L/C Issuer in Dollars. In the case of any such reimbursement in Dollars of a
drawing under a Letter of Credit denominated in an Alternative Currency, the L/C Issuer shall notify the Company and the applicable Borrower of the Dollar Equivalent
of the amount of the drawing promptly following the determination thereof. If the Company and the applicable Borrower are notified prior to 11:00 a.m. on the date of
any payment by the L/C Issuer under a Letter of Credit to be reimbursed in Dollars, then no later than 1:00 p.m. on such Business Day, or the Applicable Time on the date
of any payment by the L/C Issuer under a Letter of Credit to be reimbursed in an Alternative Currency (or if notified after such time, then no later than 11:00 a.m. on the
next succeeding Business Day or the Applicable Time on the date of any payment by the L/C Issuer under a Letter of Credit to be reimbursed in an Alternative Currency)
(each such date, an “Honor Date”), the applicable Borrower shall reimburse the L/C Issuer in an amount equal to the amount of such drawing and in the applicable
currency; provided that if such reimbursement is not made on the date of drawing, the applicable Borrower shall pay interest to the L/C Issuer on such amount at the rate
applicable to Base Rate Loans (without duplication of interest payable on L/C Borrowings). In the event that (A) a drawing denominated in an Alternative Currency is to
be reimbursed in Dollars pursuant to the second sentence in this Section 2.03(c)(i) and (B) the Dollar amount paid by a Borrower, whether on or after the Honor Date,
shall not be adequate on the date of that payment to purchase in accordance with normal banking procedures a sum denominated in the Alternative Currency equal to the
drawing, such Borrower agrees, as a separate and independent obligation, to indemnify the L/C Issuer for the loss resulting from its inability on that date to purchase the
Alternative Currency in the full amount of the drawing. If a Borrower fails to so reimburse the L/C Issuer by the Honor Date, the L/C Issuer shall notify the
Administrative Agent (and the Administrative Agent shall promptly notify each Lender of) the Honor Date, the amount of the unreimbursed drawing (expressed in
Dollars in the amount of the Dollar Equivalent thereof in the case of a Letter of Credit denominated in an Alternative Currency) (the “Unreimbursed Amount”), and the
amount of such Lender’s Pro Rata Share thereof. In such event, the applicable Borrower shall be deemed to have requested a Committed Borrowing of Base Rate Loans
to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the
principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Commitments and the conditions set forth in Section 5.02
(other than the delivery of a Committed Loan Notice). Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by
telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such
notice.
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(ii)
Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available (and the Administrative Agent may apply Cash Collateral
provided for this purpose) for the account of the L/C Issuer, in Dollars, at the Administrative Agent’s Office for Dollar denominated payments in an amount equal to its
Pro Rata Share of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the
provisions of Section 2.03(c)(iii), each Lender that so makes funds available shall be deemed to have made a Committed Loan that is a Base Rate Loan to the applicable
Borrower in such amount. The Administrative Agent shall remit the funds so received to the L/C Issuer in Dollars.
(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Committed Borrowing of Base Rate Loans for any reason, the applicable
Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C
Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender’s payment to the
Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and
shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03.
(iv)
Until each Lender funds its Committed Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under
any Letter of Credit, interest in respect of such Lender’s Pro Rata Share of such amount shall be solely for the account of the L/C Issuer.
(v)
Each Lender’s obligation to make Committed Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim,
recoupment, defense or other right that such Lender may have against the L/C Issuer, the Company, any Subsidiary or any other Person for any reason whatsoever; (B) the
occurrence or continuance of a Default or Event of Default; or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided,
however, that each Lender’s obligation to make Committed Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 5.02 (other than delivery
by the Company of a Committed Loan Notice). No such making of an L/C Advance shall relieve or otherwise impair the obligation of a Borrower to reimburse the L/C
Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein.
(vi)
If any Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Lender
pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), then, without limiting the other provisions of this Agreement, the
L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the
date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the applicable Overnight Rate
from time to time in effect, plus any administrative, processing or similar fees customarily charged by the L/C Issuer in connection with the foregoing. If such Lender
pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Committed Loan included in the relevant Committed Borrowing
or L/C Advance in respect of the relevant L/C Borrowing, as the case may be. A certificate of the L/C Issuer submitted to any Lender (through the Administrative Agent)
with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.
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(d)
Repayment of Participations.
(i)
At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender’s L/C Advance in respect
of such payment in accordance with Section 2.03(c), if the Administrative Agent receives for the account of the L/C Issuer any payment in respect of the related
Unreimbursed Amount or interest thereon (whether directly from the Company or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative
Agent), the Administrative Agent will promptly distribute to such Lender its Pro Rata Share thereof (appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender’s L/C Advance was outstanding) in Dollars and in the same funds as those received by the Administrative Agent.
(ii)
If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any
of the circumstances described in Section 11.06 (including pursuant to any settlement entered into by the L/C Issuer in its discretion), each Lender shall pay to the
Administrative Agent for the account of the L/C Issuer its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such
demand to the date such amount is returned by such Lender, at a rate per annum equal to the applicable Overnight Rate from time to time in effect. The obligations of the
Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.
(e)
Obligations Absolute. The obligation of each Borrower to reimburse the L/C Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the
following:
(i)
any lack of validity or enforceability of such Letter of Credit, this Agreement, any other Loan Document or any other agreement or instrument relating
thereto;
(ii)
the existence of any claim, counterclaim, set-off, defense or other right that the Company or any Subsidiary may have at any time against any beneficiary
or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person,
whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any
unrelated transaction;
(iii)
any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make
a drawing under such Letter of Credit;
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(iv)
waiver by the L/C Issuer of any requirement that exists for the L/C Issuer’s protection and not the protection of such Borrower or any waiver by the L/C
Issuer which does not in fact materially prejudice such Borrower;
(v)
honor of a demand for payment presented electronically even if such Letter of Credit requires that demand be in the form of a draft;
(vi)
any payment made by the L/C Issuer in respect of an otherwise complying item presented after the date specified as the expiration date of, or the date by
which documents must be received under such Letter of Credit if presentation after such date is authorized by the UCC, the ISP or the UCP, as applicable;
(vii)
any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not comply with the terms of such Letter
of Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in
connection with any proceeding under any Debtor Relief Law;
(viii)
any adverse change in the relevant exchange rates or in the availability of the relevant Alternative Currency to the Company or any Subsidiary or in the
relevant currency markets generally; or
(ix)
any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, a Borrower.
The Company shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the
Company’s instructions or other irregularity, the Company will immediately notify the L/C Issuer. The Company and the applicable Borrower shall be conclusively deemed to have
waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid.
(f)
Role of L/C Issuer. Each Lender and each Borrower agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to
obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of
any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuer, the Administrative Agent, any of their respective Related
Parties nor any of the respective correspondents, participants or assignees of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith
at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct;
or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. The Company and the
applicable Borrower hereby assume all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this
assumption is not intended to, and shall not, preclude the applicable Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or
under any other agreement. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any of the respective correspondents, participants or
assignees of the L/C Issuer, shall be liable or responsible for any of the matters described in clauses (i) through (ix) of Section 2.03(e); provided, however, that anything in such
clauses to the contrary notwithstanding, the Borrowers may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrowers, to the extent, but only to the
extent, of any direct, as opposed to special, indirect, punitive, consequential or exemplary, damages suffered by the applicable Borrower that such
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Borrower proves were caused by the L/C Issuer’s willful misconduct or gross negligence. In furtherance and not in limitation of the foregoing, the L/C Issuer may accept
documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall
not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be invalid or ineffective for any reason. The L/C Issuer may send a Letter of Credit or conduct any
communication to or from the beneficiary via the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) message or overnight courier, or any other
commercially reasonable means of communicating with a beneficiary.
(g)
Applicability of ISP and UCP. Unless otherwise expressly agreed by the L/C Issuer and the Company or the applicable Borrower when a Letter of Credit is
issued, (i) the rules of the ISP shall apply to each standby Letter of Credit, and (ii) the rules of the UCP shall apply to each commercial Letter of Credit. Notwithstanding the
foregoing, the L/C Issuer shall not be responsible to any Borrower for, and the L/C Issuer’s rights and remedies against any Borrower shall not be impaired by, any action or
inaction of the L/C Issuer required or permitted under any Law, order, or practice that is required or permitted to be applied to any Letter of Credit or this Agreement, including
the Law or any order of a jurisdiction where the L/C Issuer or the beneficiary is located, the practice stated in the ISP or UCP, as applicable, or in the decisions, opinions, practice
statements, or official commentary of the ICC Banking Commission, the Bankers Association for Finance and Trade - International Financial Services Association (BAFT-IFSA),
or the Institute of International Banking Law & Practice, whether or not any Letter of Credit chooses such Law or practice.
(h)
(i)
Letter of Credit Fees. The Borrowers shall pay Letter of Credit fees as set forth in Section 2.09.
Conflict with Issuer Documents. In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.
(j)
Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the
account of, a Subsidiary, the applicable Borrower shall be obligated to reimburse the L/C Issuer hereunder for any and all drawings under such Letter of Credit. Each Borrower
hereby acknowledges that the issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of such Borrower, and that such Borrowers’ business derives
substantial benefits from the businesses of such Subsidiaries.
(k)
Monthly Reports. Each L/C Issuer shall provide to the Administrative Agent a list of outstanding Letters of Credit issued by it (together with type and amounts)
on a monthly basis and at such shorter intervals as requested by the Administrative Agent.
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2.04
Swing Line Loans.
(a)
Swing Line Loans. Subject to the terms and conditions set forth herein, the Swing Line Lender agrees, in reliance upon the agreements of the other Lenders set
forth in this Section 2.04, to make revolving loans (the “Swing Line Loans” ) to the Domestic Borrowers in Dollars on any Business Day during the Availability Period; provided
that (i) the aggregate principal amount of Swing Line Loans shall not exceed the Swing Line Sublimit, (ii) with regard to the Lenders collectively, the aggregate principal amount
of Loan Obligations shall not exceed the Aggregate Commitments, (iii) with regard to each Lender individually, such Lender’s Pro Rata Share of the Loan Obligations plus,
without duplication and if applicable, the aggregate Outstanding Amount of all Swing Line Loans advanced by such Lender in its capacity as Swing Line Lender, shall not exceed
its Commitment and (iv) the Swing Line Lender shall not be under any obligation to make any Swing Line Loan if it shall determine (which determination shall be conclusive and
binding absent manifest error) that it has, or by such Credit Extension may have, Fronting Exposure. Swing Line Loans shall bear interest based on the LIBOR Daily Floating
Rate, and may be repaid and reborrowed in accordance with the provisions hereof. Immediately upon the making of a Swing Line Loan, each Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a participation interest in such Swing Line Loan in an amount equal to its Pro Rata Share
thereof.
(b)
Borrowing Procedures. Each Swing Line Borrowing shall be made upon the Company’s or the applicable Domestic Borrower’s irrevocable notice to the Swing
Line Lender and the Administrative Agent, which may be given by: (A) telephone or (B) a Swing Line Loan Notice; provided that any telephonic notice must be confirmed
immediately by delivery to the Swing Line Lender and the Administrative Agent of a Swing Line Loan Notice. Each such Swing Line Loan Notice must be received by the Swing
Line Lender and the Administrative Agent not later than 2:00 p.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of
$100,000, and a multiple of $100,000 in excess thereof, (ii) the requested borrowing date, which shall be a Business Day and (iii) the applicable Domestic Borrower. Promptly
after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent that the Administrative
Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof.
Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Lender) prior to 12:00 noon on the
date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the first proviso to
the first sentence of Section 2.04(a), or (B) that one or more of the applicable conditions specified in Article V is not then satisfied, then, subject to the terms and conditions
hereof, the Swing Line Lender will, not later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available
to the applicable Domestic Borrower.
(c)
Refinancing of Swing Line Loans.
(i)
The Swing Line Lender at any time in its sole and absolute discretion may request, on behalf of the applicable Borrower (which hereby irrevocably
requests and authorizes the Swing Line Lender to so request on its behalf), that each Lender make a Committed Loan that is a Base Rate Loan in an amount equal to such
Lender’s Pro Rata Share of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a
Committed Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for
the principal amount of Base Rate Loans, and without regard to the unutilized portion of the Aggregate Commitments or the conditions set forth in Section 5.02. The
Swing Line Lender shall furnish the Company and the applicable Borrower with a copy of the applicable Committed Loan Notice promptly after delivering such notice to
the Administrative Agent. Each Lender shall
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make an amount equal to its Pro Rata Share of the amount specified in such Committed Loan Notice available to the Administrative Agent in immediately available funds
(and the Administrative Agent may apply Cash Collateral available with respect to the applicable Swing Line Loan) for the account of the Swing Line Lender at the
Administrative Agent’s Office for Dollar-denominated payments not later than 2:00 p.m. on the day specified in such Committed Loan Notice, whereupon, subject to
Section 2.04(c)(ii), each Lender that so makes funds available shall be deemed to have made a Committed Loan that is a Base Rate Loan to the applicable Domestic
Borrower in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender.
(ii)
If for any reason any Swing Line Loan cannot be refinanced by such a Committed Borrowing in accordance with Section 2.04(c)(i), the request for
Committed Loans that are Base Rate Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of
the Lenders fund its risk participation in the relevant Swing Line Loan and each Lender’s payment to the Administrative Agent for the account of the Swing Line Lender
pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such participation.
(iii)
If any Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such
Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to recover from
such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on
which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the applicable Overnight Rate from time to time in effect, plus any
administrative, processing or similar fees customarily charged by the Swing Line Lender in connection with the foregoing. A certificate of the Swing Line Lender
submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.
(iv)
Each Lender’s obligation to make Committed Loans or to purchase and fund risk participations in Swing Line Loans, in each case, pursuant to this
Section 2.04(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any set-off, counterclaim, recoupment, defense or other
right that such Lender may have against the Swing Line Lender, the Company or any other Person for any reason whatsoever, (B) the occurrence or continuance of a
Default or Event of Default, (C) the conditions set forth in Section 5.02, or (D) any other occurrence, event or condition, whether or not similar to any of the foregoing.
No such purchase or funding of risk participations shall relieve or otherwise impair the obligation of the applicable Domestic Borrower to repay Swing Line Loans,
together with interest as provided herein.
(d)
Repayment of Participations.
(i)
At any time after any Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on
account of such Swing Line Loan, the Swing Line Lender will distribute to such Lender its Pro Rata Share of such payment (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender’s risk participation was funded) in the same funds as those received by the Swing Line Lender.
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(ii)
If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing
Line Lender under any of the circumstances described in Section 11.06 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion),
each Lender shall pay to the Swing Line Lender its Pro Rata Share thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to
the date such amount is returned, at a rate per annum equal to the applicable Overnight Rate. The Administrative Agent will make such demand upon the request of the
Swing Line Lender. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.
(e)
Interest for Account of Swing Line Lender. The Swing Line Lender shall be responsible for invoicing the applicable Domestic Borrower for interest on the Swing
Line Loans. Until each Lender funds its Committed Loan or risk participation pursuant to this Section 2.04 to refinance such Lender’s Pro Rata Share of any Swing Line Loan,
interest in respect of such Pro Rata Share shall be solely for the account of the Swing Line Lender.
(f)
Payments Directly to Swing Line Lender. The applicable Domestic Borrower shall make all payments of principal and interest in respect of the Swing Line Loans
made to it directly to the Swing Line Lender.
2.05
Prepayments.
(a)
Each Borrower may, upon notice from the Company or such Borrower to the Administrative Agent, at any time or from time to time voluntarily prepay
Committed Loans in whole or in part without premium or penalty; provided that (i) such notice must be in a form reasonably acceptable to the Administrative Agent and be
received by the Administrative Agent not later than 12:00 noon (A) three Business Days prior to any date of prepayment of Eurocurrency Rate Loans, (B) four Business Days (or
five Business Days in the case of prepayment of Loans denominated in Special Notice Currencies) prior to any date of prepayment of Alternative Currency Loans, and (C) on the
date of prepayment of Base Rate Loans; (ii) any prepayment of Eurocurrency Rate Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof; (iii) any prepayment of Alternative Currency Loans shall be in a minimum principal amount of the Alternative Currency Equivalent of $5,000,000 or a whole multiple of
the Alternative Currency Equivalent of $1,000,000 in excess thereof and (iv) any prepayment of Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple
of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such
prepayment, and the Type(s) of Committed Loans to be prepaid (provided that (y) if the Company or such Borrower does not specify the Committed Loans to which such
prepayment is to be applied, such prepayment shall be applied pro rata to all Committed Loans outstanding on the date thereof and (z) if Eurocurrency Rate Loans or Alternative
Currency Term Rate Loans are to be prepaid, the Company or such Borrower shall specify the Interest Period(s) of such Loans). The Administrative Agent will promptly notify
each applicable Lender of its receipt of each such notice, and of the amount of such Lender’s Pro Rata Share of such prepayment. If such notice is given by the Company or a
Borrower, the applicable Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any
prepayment of a Eurocurrency Rate Loan or Alternative Currency Term Rate Loan shall be accompanied by all accrued interest thereon, together with any additional amounts
required pursuant to Section 3.05. Subject to Section 2.17, each such prepayment shall be applied to the applicable Committed Loans of the Lenders in accordance with their
respective Pro Rata Shares thereof.
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(b)
Each Domestic Borrower may, upon notice from the Company or such Domestic Borrower to the Swing Line Lender (with a copy to the Administrative Agent),
at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the
Swing Line Lender and the Administrative Agent not later than 2:00 p.m. on the date of the prepayment, and (ii) any such prepayment shall be in a minimum principal amount of
$100,000 or, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment. If such notice is given by the
Company or a Domestic Borrower, the applicable Domestic Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on
the date specified therein.
(c)
If the Administrative Agent notifies the Company that the Dollar Equivalent of the outstanding principal amount of Loan Obligations shall be in excess of the
Aggregate Commitments, each applicable Borrower shall, within two Business Days, make prepayment on or provide Cash Collateral in respect of such Borrower’s Loan
Obligations in an amount sufficient to eliminate the difference. The Administrative Agent may, at any time and from time to time after the initial deposit of such Cash Collateral,
request additional Cash Collateral be provided in order to protect against the results of further exchange rate fluctuations.
2.06
Termination or Reduction of Commitments.
The Company may, upon notice from the Company to the Administrative Agent, terminate the Aggregate Commitments or permanently reduce the Aggregate Commitments to an
amount not less than the Outstanding Amount of the Loan Obligations; provided that (i) any such notice shall be received by the Administrative Agent not later than 12:00 noon five
Business Days prior to the date of termination or reduction and (ii) any such partial reduction shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in
excess thereof. The Administrative Agent will promptly notify the Lenders of any such notice of termination or reduction of the Aggregate Commitments. Any reduction of the Aggregate
Commitments shall be applied to the Commitment of each Lender according to its Pro Rata Share thereof. All facility fees accrued until the effective date of any termination of the
Aggregate Commitments shall be paid on the effective date of such termination.
2.07
Repayment of Loans.
(a)
Each Borrower shall repay to each Lender on the Maturity Date applicable to such Lender the aggregate principal amount of Committed Loans made by such
Lender to such Borrower outstanding on such date.
(b)
Each Domestic Borrower shall repay each Swing Line Loan made to such Domestic Borrower on the applicable Maturity Date.
2.08
Interest.
(a)
Subject to the provisions of subsection (b) below, (i) each Eurocurrency Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest
Period at a rate per annum equal to the sum of (A) the Eurocurrency Rate for such Interest Period plus (B) the Applicable Rate; (ii) each Base Rate Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the sum of (A) the Base Rate plus (B) the Applicable Rate; (iii) each
Alternative Currency Daily Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the sum of
(A) the Alternative Currency Daily Rate plus (B) the Applicable Rate; (iv) each Alternative Currency Term Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the sum of (A) the Alternative Currency Term Rate for such Interest Period plus (B) the Applicable Rate and (v) each
Swing Line Loan shall bear interest on the outstanding principal amount thereof
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from the applicable borrowing date at a rate per annum equal to the sum of (A) the LIBOR Daily Floating Rate plus (B) the Applicable Rate.
(b)
(i) If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or
otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.
(ii) If any amount (other than principal of any Loan) payable by any Borrower under any Loan Document is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon request of the Required Lenders, such amount shall thereafter bear interest at
a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iii) Without duplication of clauses (i) and (ii) above, if any Event of Default under Section 9.01(f) or Section 9.01(g) arises, the outstanding Obligations shall
thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iv) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.
(c)
Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto by the applicable Borrower and at such other times as
may be specified herein. Interest hereunder shall be due and payable by the applicable Borrower in accordance with the terms hereof before and after judgment, and before and
after the commencement of any proceeding under any Debtor Relief Law.
2.09
Fees.
(a)
Facility Fees. The Company shall pay to the Administrative Agent for the account of each Lender in accordance with its Pro Rata Share, a facility fee in Dollars
equal to the Applicable Rate times the actual daily amount of the Aggregate Commitments (or, if the Aggregate Commitments have terminated, on the Outstanding Amount of all
Loan Obligations), regardless of usage, subject to adjustment as provided in Section 2.17. Such facility fee shall accrue at all times during the Availability Period (and thereafter
so long as any Loan Obligations remain outstanding), including at any time during which one or more of the conditions in Article V is not met.
The facility fees set forth in this Section 2.09(a) shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December,
commencing with the first such date to occur after the Closing Date, and on the Maturity Date (and, if applicable, thereafter on demand). The facility fees shall be calculated
quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate
separately for each period during such quarter that such Applicable Rate was in effect.
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(b)
Letter of Credit Fees.
(i)
Each Borrower shall pay to the Administrative Agent for the account of each Lender, in Dollars, in accordance with its Pro Rata Share a Letter of Credit
fee (the “Letter of Credit Fee”) for each Letter of Credit issued on behalf of such Borrower, equal to the Applicable Rate times the Dollar Equivalent of the daily
maximum amount available to be drawn under such Letter of Credit, subject to adjustment as provided in Section 2.17. For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.07. Letter of Credit Fees shall be
shall be computed on a quarterly basis in arrears and shall be due and payable on the last Business Day of each March, June, September and December (commencing with
the first such date to occur after the issuance of such Letter of Credit) and on the Letter of Credit Expiration Date. If there is any change in the Applicable Rate during any
quarter, the daily maximum amount of each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that
such Applicable Rate was in effect.
(ii)
Each Borrower shall pay directly to the L/C Issuer for its own account, in Dollars, a fronting fee (A) with respect to each commercial Letter of Credit
issued on behalf of such Borrower, at the rate per annum agreed in writing between the Company and the applicable L/C Issuer, computed on the Dollar Equivalent of the
amount of such Letter of Credit, and payable upon the issuance thereof, (B) with respect to any amendment of a commercial Letter of Credit increasing the amount of
such Letter of Credit, at the rate per annum agreed in writing between the Company and the applicable L/C Issuer, computed on the Dollar Equivalent of the amount of
such increase, and payable upon the effectiveness of such amendment, and (C) with respect to each standby Letter of Credit, at the rate per annum agreed in writing
between the Company and the applicable L/C Issuer, computed on the Dollar Equivalent of the daily amount available to be drawn under such Letter of Credit and on a
quarterly basis in arrears. Such fronting fee shall be due and payable on the tenth Business Day after the end of each March, June, September and December in respect of
the most recently-ended quarterly period (or portion thereof, in the case of the first payment), commencing with the first such date to occur after the issuance of such
Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.07. In addition, the Company shall pay directly to the L/C Issuer for its own
account, in Dollars, the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters
of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.
(c)
Other Fees.
(i)
The Company shall pay to the Administrative Agent for its own account an annual administrative fee in an amount and at the times set forth in the
Administrative Agent Fee Letter. Such fee shall be fully earned when paid and shall not be refundable for any reason whatsoever.
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(ii)
The Company shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such
fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.
2.10
Computation of Interest and Fees.
All computations of interest for Base Rate Loans shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of
fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a
365-day year) or, in the case of interest in respect of Loans denominated in Alternative Currencies as to which market practice differs from the foregoing, in accordance with such market
practice. Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is
paid; provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one day. Each determination by the Administrative Agent
of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error. With respect to all Alternative Currencies, the calculation of the applicable
interest rate shall be determined in accordance with market practice.
2.11
Evidence of Debt.
(a)
The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent
in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of
the Credit Extensions made by the Lenders to the Borrowers and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligation of any Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrowers shall execute and deliver to such Lender (through the
Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse
thereon the date, Type (if applicable), amount, currency and maturity of its Loans and payments with respect thereto.
(b)
In addition to the accounts and records referred to in subsection (a) above, each Lender and the Administrative Agent shall maintain in accordance with its usual
practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between
the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the
Administrative Agent shall control in the absence of manifest error.
2.12
Payments Generally; Administrative Agent’s Clawback.
(a)
General. All payments to be made by the Borrowers shall be made free and clear of and without condition or deduction for any counterclaim, defense,
recoupment or setoff. Except as otherwise expressly provided herein and except with respect to principal of and interest on Loans denominated in an Alternative Currency, all
payments by the Borrowers hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the applicable
Administrative Agent’s Office in Dollars and in Same Day Funds not later than 2:00 p.m. on the date specified herein. Except as otherwise expressly provided herein, all
payments by the Borrowers hereunder with respect to principal and interest on Loans denominated in an Alternative Currency shall be made to the Administrative Agent, for
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the account of the respective Lenders to which such payment is owed, at the applicable Administrative Agent’s Office in such Alternative Currency and in Same Day Funds not
later than the Applicable Time specified by the Administrative Agent on the dates specified herein. Without limiting the generality of the foregoing, the Administrative Agent
may require that any payments due under this Agreement be made in the United States. If, for any reason, any Borrower is prohibited by any Law from making any required
payment hereunder in an Alternative Currency, such Borrower shall make such payment in Dollars in the Dollar Equivalent of the Alternative Currency payment amount. The
Administrative Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as provided herein) of such payment in like funds as received by wire
transfer to such Lender’s Lending Office. All payments received by the Administrative Agent (i) after 2:00 p.m., in the case of payments in Dollars, or (ii) after the Applicable
Time specified by the Administrative Agent in the case of payments in an Alternative Currency, shall in each case be deemed received on the next succeeding Business Day and
any applicable interest or fee shall continue to accrue. If any payment to be made by any Borrower shall come due on a day other than a Business Day, payment shall be made on
the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.
(b)
(i) Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed
date of any Committed Borrowing of Eurocurrency Rate Loans or Alternative Currency Loans (or, in the case of any Committed Borrowing of Base Rate Loans, prior to 12:00
noon on the date of such Committed Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Committed Borrowing, the
Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Committed Borrowing of
Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02) and may, in reliance upon such assumption, make
available to the applicable Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Committed Borrowing available to the
Administrative Agent, then the applicable Lender and the applicable Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding
amount in Same Day Funds with interest thereon, for each day from and including the date such amount is made available to such Borrower to but excluding the date of payment
to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the Overnight Rate, plus any administrative, processing or similar fees customarily
charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by such Borrower, the interest rate applicable to Base Rate
Loans, or in the case of Alternative Currencies, in accordance with such market practice, in each case, as applicable. If such Borrower and such Lender shall pay such interest to
the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to such Borrower the amount of such interest paid by such
Borrower for such period. If such Lender pays its share of the applicable Committed Borrowing to the Administrative Agent, then the amount so paid shall constitute such
Lender’s Committed Loan included in such Committed Borrowing. Any payment by such Borrower shall be without prejudice to any claim such Borrower may have against a
Lender that shall have failed to make such payment to the Administrative Agent.
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(ii) Payments by Borrowers; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from a Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of the Lenders or the L/C Issuer hereunder that such Borrower will not make such
payment, the Administrative Agent may assume that such Borrower has made such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the amount due. With respect to any payment that the Administrative Agent makes for the
account of the Lenders or the L/C Issuer hereunder as to which the Administrative Agent determines (which determination shall be conclusive absent manifest error) that
any of the following applies (such payment referred to as the “Rescindable Amount”): (1) such Borrower has not in fact made such payment; (2) the Administrative
Agent has made a payment in excess of the amount so paid by such Borrower (whether or not then owed); or (3) the Administrative Agent has for any reason otherwise
erroneously made such payment; then each of the Lenders or the L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the Rescindable Amount so distributed to such Lender or the L/C Issuer, in immediately available funds with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the Overnight Rate.
A notice of the Administrative Agent to any Lender or Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.
(c)
Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender to any
Borrower as provided in the foregoing provisions of this Article II, and such funds are not made available to such Borrower by the Administrative Agent because the conditions to
the applicable Credit Extension set forth in Article V are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like
funds as received from such Lender) to such Lender, without interest.
(d)
Obligations of Lenders Several. The obligations of the Lenders hereunder to make Committed Loans, to fund participations in Letters of Credit and Swing Line
Loans and to make payments pursuant to Section 11.04(c) are several and not joint. The failure of any Lender to make any Committed Loan, to fund any such participation or to
make any payment under Section 11.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender
shall be responsible for the failure of any other Lender to so make its Committed Loan, to purchase its participation or to make its payment under Section 11.04(c).
(e)
Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.
2.13
Sharing of Payments.
If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the Committed Loans made
by it, or the participations in L/C Obligations or in Swing Line Loans held by it resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Committed
Loans or participations and accrued interest thereon greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the
Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Committed Loans and subparticipations in L/C Obligations and Swing Line Loans of the
other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate
amount of
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principal of and accrued interest on their respective Committed Loans and other amounts owing them; provided that:
(i)
if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or
subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and
(ii)
the provisions of this Section shall not be construed to apply to (A) any payment made by or on behalf of the Borrowers pursuant to and in accordance
with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (B) the application of Cash Collateral
provided for in Section 2.16, or (C) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Committed Loans or
subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other than an assignment to any Borrower or any Subsidiary thereof (as to which
the provisions of this Section shall apply).
Each Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against such Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such
Borrower in the amount of such participation.
2.14
Designated Borrowers.
(a)
As of the Third Amendment Effective Date, the only Designated Borrower is Albemarle Europe. Thereafter the Company may at any time, upon not less than 10
Business Days’ notice from the Company to the Administrative Agent (or such shorter period as may be agreed by the Administrative Agent in its sole discretion), designate any
one or more wholly-owned Subsidiaries (other than an Immaterial Subsidiary) of the Company (an “Applicant Borrower”) as a Designated Borrower to receive Loans and request
Letters of Credit hereunder by delivering to the Administrative Agent (which shall promptly deliver counterparts thereof to each Lender) a duly executed notice and agreement in
substantially the form of Exhibit G (a “Designated Borrower Request and Assumption Agreement”). If the Administrative Agent, the L/C Issuer and each of the Lenders
obligated to make Loans to such Applicant Borrower, agree in writing that such Applicant Borrower shall be entitled to receive Loans and request Letters of Credit hereunder,
then the Administrative Agent shall send an agreement in substantially the form of Exhibit H (a “Designated Borrower Joinder Agreement”) to the Company specifying (x) the
additional terms and conditions applicable to Loans to such Applicant Borrower due to applicable Laws and/or operational requirements with respect to the jurisdiction of
organization for such Applicant Borrower and (y) the effective date upon which the Applicant Borrower shall constitute a Designated Borrower for purposes hereof. The parties
hereto acknowledge and agree that prior to any Applicant Borrower becoming entitled to utilize the credit facilities provided for herein the Administrative Agent and the Lenders
shall have received such supporting resolutions, incumbency certificates, opinions of counsel and other documents or information, in form, content and scope reasonably
satisfactory to the Administrative Agent, as may be required by the Administrative Agent, the L/C Issuer, or the Lenders in their sole discretion, information necessary for each
Lender to comply with “know your customer” regulations and Notes signed by such new Borrowers to the extent any Lenders so require. If the Administrative Agent agrees that
such Applicant Borrower shall have satisfied all of the requirements of this Section 2.14 (including the requirement that each Lender obligated to make Loans to such Applicant
Borrower shall have approved such Applicant Borrower) such Applicant Borrower shall constitute a Designated Borrower for purposes hereof, and each of the Lenders agrees to
permit such Designated Borrower to receive Loans or request Letters of Credit hereunder, on the terms and conditions set forth herein, and each of the parties agrees that such
Designated Borrower otherwise shall be a Borrower for all purposes of this Agreement; provided that no Request for Credit Extension may be submitted by or on behalf of such
Designated Borrower until the date three Business Days after such effective date.
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(b)
The Obligations of the Domestic Borrowers shall be joint and several in nature as more specifically addressed in Section 11.05. The Obligations of the
Designated Borrowers that are not Domestic Subsidiaries shall be several in nature.
(c)
Each Designated Borrower hereby irrevocably appoints the Company as its agent for all purposes relevant to this Agreement and each of the other Loan
Documents, including (i) the giving and receipt of notices, (ii) the execution and delivery of all documents, instruments and certificates contemplated herein and all modifications
hereto, and (iii) in the case of the Domestic Borrowers only, the receipt of the proceeds of any Loans made by the Lenders, to any such Borrower hereunder. Any
acknowledgment, consent, direction, certification or other action which might otherwise be valid or effective only if given or taken by all Borrowers, or by each Borrower acting
singly, shall be valid and effective if given or taken only by the Company, whether or not any such other Borrower joins therein. Any notice, demand, consent, acknowledgement,
direction, certification or other communication delivered to the Company in accordance with the terms of this Agreement shall be deemed to have been delivered to each
Borrower. The Belgian Borrower agrees, and hereby undertakes, to ratify and to confirm each decision taken or action performed by the Company on its behalf as its agent in the
exercise or purported exercise of the powers granted pursuant to this Section 2.14(c), to the extent such ratification and confirmation is necessary under Belgian law to ensure the
validity and the binding character vis-à-vis the Belgian Borrower of the decision or action concerned.
(d)
The Company may from time to time, upon not less than 10 Business Days’ notice from the Company to the Administrative Agent (or such shorter period as may
be agreed by the Administrative Agent in its sole discretion), terminate (i) any Designated Borrower’s status as a Designated Borrower or (ii) the Belgian Borrower’s status as the
Belgian Borrower; provided that there are no outstanding Loans or L/C Obligations payable by such Designated Borrower or Belgian Borrower, as applicable, or other amounts
payable by such Designated Borrower or Belgian Borrower, as applicable, on account of any Credit Extensions made to it, as of the effective date of such termination (unless such
Loans and other Obligations have been assumed by another Borrower). The Administrative Agent will promptly notify the Lenders of any such termination of a Designated
Borrower’s or the Belgian Borrower’s status.
(e)
Notwithstanding anything to the contrary herein, (i) as of the Third Amendment Effective Date, the only Borrowers are the Company and the Belgian Borrower,
(iii) no other Persons may become a Borrower except in accordance with this Section 2.14 and (iv) only wholly-owned Subsidiaries of the Company may hereafter become
Designated Borrowers.
2.15
Extension of Maturity Date.
(a)
Requests for Extension. Not more than two times after the Closing Date, the Company may, by notice to the Administrative Agent (who shall promptly notify the
Lenders) request that each Lender extend such Lender’s Maturity Date for an additional year from the Maturity Date then in effect hereunder (the “Existing Maturity Date”).
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(b)
Lender Elections to Extend. Each Lender, acting in its sole and individual discretion, shall, by notice to the Administrative Agent given not later than 15 days
after receipt of the Company’s request pursuant to subsection (a) above (the “Notice Date”), advise the Administrative Agent whether or not such Lender agrees to such extension
(and each Lender that determines not to so extend its Maturity Date (a “Non-Extending Lender”) shall notify the Administrative Agent of such fact promptly after such
determination (but in any event no later than the Notice Date) and any Lender that does not so advise the Administrative Agent on or before the Notice Date shall be deemed to be
a Non-Extending Lender. The election of any Lender to agree to such extension shall not obligate any other Lender to so agree.
(c)
Notification by Administrative Agent. The Administrative Agent shall notify the Company of each Lender’s determination under this Section no later than the
date 10 days after the Notice Date (or, if such date is not a Business Day, on the next preceding Business Day).
(d)
Additional Commitment Lenders. The Company shall have the right to replace each Non-Extending Lender with, and add as “Lenders” under this Agreement in
place thereof, one or more Eligible Assignees (each, an “Additional Commitment Lender”) as provided in Section 11.16; provided that each of such Additional Commitment
Lenders shall enter into an Assignment and Assumption (or other agreement satisfactory to the Company and the Administrative Agent) pursuant to which such Additional
Commitment Lender shall undertake a Commitment (and, if any such Additional Commitment Lender is already a Lender, its Commitment shall be in addition to such Lender’s
Commitment hereunder on such date).
(e)
Minimum Extension Requirement. If (and only if) the total of the Commitments of the Lenders that have agreed so to extend their Maturity Date (each, an
“Extending Lender”) and the additional Commitments of the Additional Commitment Lenders shall be more than 50% of the aggregate principal amount of the Commitments in
effect immediately prior to the Existing Maturity Date, then the Maturity Date of each Extending Lender and of each Additional Commitment Lender shall be extended to the date
falling one year after the Existing Maturity Date (except that, if such date is not a Business Day, such Maturity Date as so extended shall be the next preceding Business Day) and
each Additional Commitment Lender shall thereupon become a “Lender” for all purposes of this Agreement.
(f)
Conditions to Effectiveness of Extensions. As a condition precedent to such extension, the Company shall deliver to the Administrative Agent a certificate of
each Borrower dated as of the date of such extension (in sufficient copies for each Extending Lender and each Additional Commitment Lender) signed by a Responsible Officer
of such Borrower (i) certifying and attaching the resolutions adopted by such Borrower approving or consenting to such extension and (ii) in the case of the Company, certifying
that, before and after giving effect to such extension, (A) the representations and warranties contained in Article VI and the other Loan Documents are true and correct in all
material respects on and as of the date of such extension, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are
true and correct in all material respects as of such earlier date, and except that for purposes of this Section 2.15, the representations and warranties contained in subsections (a)
and (b) of Section 6.05 shall be deemed to refer to the most recent statements furnished pursuant to subsections (a) and (b), respectively, of Section 7.01, and (B) no Default
exists. In addition, on the Maturity Date of each Non-Extending Lender, each applicable Borrower shall prepay such Borrower’s outstanding Obligations owing to the Non-
Extending Lenders on such date in full (and pay any additional amounts required pursuant to Section 3.05) and shall make such other payments to the other Lenders to the extent
necessary to keep outstanding Committed Loans and other appropriate Obligations ratable with any revised Pro Rata Shares of the respective Lenders effective as of such date
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(g)
Conflicting Provisions. This Section shall supersede any provisions in Section 2.13 or 11.01 to the contrary.
2.16
Cash Collateral.
(a)
Certain Credit Support Events. If (i) the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an
L/C Borrowing, (ii) as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, (iii) the applicable Borrower shall be required to provide
Cash Collateral pursuant to Section 9.02(c) or (iv) there shall exist a Defaulting Lender, the applicable Borrower shall immediately (in the case of clause (iii) above) or within one
Business Day (in all other cases) following any request by the Administrative Agent or the L/C Issuer provide Cash Collateral in an amount not less than the applicable Minimum
Collateral Amount (determined in the case of Cash Collateral provided pursuant to clause (iv) above, after giving effect to Section 2.17(a)(iv) and any Cash Collateral provided
by the Defaulting Lender). Additionally, if the Administrative Agent notifies the Company at any time that the Outstanding Amount of all L/C Obligations at such time exceeds
105% of the Letter of Credit Sublimit then in effect, then, within two Business Days after receipt of such notice, the applicable Borrower shall provide Cash Collateral for the
Outstanding Amount of the L/C Obligations in an amount not less than the amount by which the Outstanding Amount of all L/C Obligations exceeds the Letter of Credit
Sublimit.
(b)
Grant of Security Interest. All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked, non-interest
bearing deposit accounts at Bank of America. Each Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to (and subjects to the
control of) the Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuer and the Lenders, and agrees to maintain, a first priority security interest in all
such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the
obligations to which such Cash Collateral may be applied pursuant to Section 2.16(c). If at any time the Administrative Agent determines that Cash Collateral is subject to any
right or claim of any Person other than the Administrative Agent or the L/C Issuer as herein provided, or that the total amount of such Cash Collateral is less than the Minimum
Collateral Amount, the applicable Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in
an amount sufficient to eliminate such deficiency.
(c)
Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 2.16 or Sections 2.03,
2.04, 2.05, 2.17 or 9.02 in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein
(including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided,
prior to any other application of such property as may be provided for herein.
(d)
Release. Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or to secure other obligations shall be released promptly
following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the
applicable Lender (or, as appropriate, its assignee following compliance with Section 11.07(b)(vi))) or (ii) the good faith determination of the Administrative Agent and the L/C
Issuer that there exists excess Cash Collateral; provided, however, (x) any such release shall be without prejudice to, and any disbursement or other transfer of Cash Collateral
shall be and remain subject to, any other Lien conferred under the Loan Documents and the other applicable provisions of the Loan Documents, and (y) the Person providing
Cash Collateral and the L/C Issuer may mutually agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other
obligations.
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2.17
Defaulting Lenders.
(a)
Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that
Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:
(i)
Waivers and Amendments. That Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement
shall be restricted as set forth in the definition of “Required Lenders” and Section 11.01.
(ii)
Reallocation of Payments. Any payment of principal, interest, fees (to the extent required to be paid by the Borrowers under Section 2.17(a)(iii)) or other
amounts received by the Administrative Agent for the account of that Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article IX or otherwise
or received by the Administrative Agent from a Defaulting Lender pursuant to Section 11.09), shall be applied at such time or times as may be determined by the
Administrative Agent as follows: first, to the payment of any amounts owing by that Defaulting Lender to the Administrative Agent hereunder; second, to the payment on
a pro rata basis of any amounts owing by that Defaulting Lender to the L/C Issuer or Swing Line Lender hereunder; third, to Cash Collateralize the L/C Issuer’s Fronting
Exposure with respect to such Defaulting Lender in accordance with Section 2.16; fourth, as the Company may request (so long as no Default exists), to the funding of
any Loan in respect of which that Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth,
if so determined by the Administrative Agent and the Company, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s
potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the L/C Issuer’s future Fronting Exposure with respect to such
Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.16; sixth, to the payment of any amounts owing to
the Lenders, the L/C Issuer or Swing Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the L/C Issuer or Swing Line
Lender against that Defaulting Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default exists, to the
payment of any amounts owing to the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by the Borrowers against that Defaulting
Lender as a result of that Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to that Defaulting Lender or as otherwise directed by a court of
competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Borrowings in respect of which that Defaulting
Lender has not fully funded its appropriate share and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in
Section 5.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all non-Defaulting Lenders on a pro rata
basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, such Defaulting Lender until such time as all Loans and funded and unfunded
participations in L/C Obligations and Swing Line Loans are held by the Lenders pro rata in accordance with the Commitments hereunder without giving effect to Section
2.17(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender
or to post Cash Collateral pursuant to this Section 2.17(a)(ii) shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents
hereto.
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(iii)
Certain Fees.
(A)
Each Defaulting Lender shall be entitled to receive fees payable under Sections 2.09(a) for any period during which that Lender is a Defaulting
Lender only to extent allocable to the sum of (1) the outstanding principal amount of the Committed Loans funded by it, and (2) its Pro Rata Share of the stated
amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.16.
(B)
Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to
the extent allocable to its Pro Rata Share of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.16.
(C)
With respect to any fee payable under Section 2.09(a) or any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to
clause (A) or (B) above, the Borrowers shall (x) pay to each non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with
respect to such Defaulting Lender’s participation in L/C Obligations or Swing Line Loans that has been reallocated to such non-Defaulting Lender pursuant to
clause (a)(iv) below, (y) pay to the L/C Issuer and Swing Line Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to
the extent allocable to such L/C Issuer’s or Swing Line Lender’s Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining
amount of any such fee.
(iv)
Reallocation of Pro Rata Shares to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in L/C Obligations and Swing
Line Loans shall be reallocated among the non-Defaulting Lenders in accordance with their respective Pro Rata Shares (calculated without regard to such Defaulting
Lender’s Commitment) but only to the extent that such reallocation does not cause the aggregate Outstanding Amount of such non-Defaulting Lender’s Committed Loans
and such non-Defaulting Lender’s participation in L/C Obligations and Swing Line Loans at such time to exceed such non-Defaulting Lender’s Commitment. Subject to
Section 11.24, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender
having become a Defaulting Lender, including any claim of a non-Defaulting Lender as a result of such non-Defaulting Lender’s increased exposure following such
reallocation.
(v)
Cash Collateral, Repayment of Swing Line Loans. If the reallocation described in clause (a)(iv) above cannot, or can only partially, be effected, the
Borrowers shall, without prejudice to any right or remedy available to it hereunder or under applicable Law, (x) first, prepay Swing Line Loans in an amount equal to the
Swing Line Lenders’ Fronting Exposure and (y) second, Cash Collateralize the L/C Issuers’ Fronting Exposure in accordance with the procedures set forth in Section
2.16.
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(b)
Defaulting Lender Cure. If the Company, the Administrative Agent, the Swing Line Lender and the L/C Issuer agree in writing in their sole discretion that a
Defaulting Lender should no longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified
in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable,
purchase at par that portion of outstanding Committed Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause
the Committed Loans and funded and unfunded participations in Letters of Credit and Swing Line Loans to be held on a pro rata basis by the Lenders in accordance with their Pro
Rata Shares (without giving effect to Section 2.17(a)(iv)), whereupon that Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively
with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the extent
otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder
arising from that Lender’s having been a Defaulting Lender.
Article III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01
Taxes.
(a)
Except as required by Laws, any and all payments by or on behalf of the respective Borrowers to or for the account of the Administrative Agent or any Lender
under any Loan Document shall be made free and clear of and without deduction for Taxes. If any Borrower or the Administrative Agent shall be required by the Internal
Revenue Code to deduct any Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent or any Lender, (i) to the extent that the
deduction is made on account of Indemnified Taxes, the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable
to additional sums payable under this Section), the Administrative Agent or such Lender receives an amount equal to the sum it would have received had no such deductions for
Indemnified Taxes been made, (ii) the Administrative Agent shall make such deductions, and (iii) the Administrative Agent shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable Laws. If any Borrower or the Administrative Agent shall be required by any applicable Laws other than the Internal
Revenue Code to deduct any Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent or any Lender, then (i) such Borrower or the
Administrative Agent, as required by such Laws, shall withhold or make such deductions, (ii) such Borrower or the Administrative Agent, to the extent required by such Laws,
shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with such Laws, and (iii) to the extent that the withholding or
deduction is made on account of Indemnified Taxes, the sum payable by the applicable Borrower shall be increased as necessary so that after any required withholding or the
making of all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent or such Lender receives an amount
equal to the sum it would have received had no such withholding or deduction of Indemnified Taxes been made.
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(b)
In addition, each Borrower agrees to pay any and all present or future stamp or documentary Taxes and any other excise or property Taxes or similar levies that
arise from the execution, delivery, performance (other than payment of amounts owing under the Loan Documents), enforcement or registration of from the receipt or perfection
of a security interest under, or otherwise similarly with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an
assignment (other than an assignment made pursuant to Section 11.16) (hereinafter referred to as “Other Taxes”).
(c)
(i) Each Borrower agrees to indemnify the Administrative Agent and each Lender for (x) the full amount of Indemnified Taxes (including any Indemnified
Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent and such Lender and (y) any reasonable expenses
arising therefrom or with respect thereto, in each case whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental
Authority. Payment under this subsection (c) shall be made within sixty (60) days after the date the Lender or the Administrative Agent makes a written demand therefor;
provided, however, that notwithstanding any other provision of this Section 3.01, if the Administrative Agent or any Lender requests indemnification or reimbursement
for Indemnified Taxes pursuant to this Section 3.01 more than 120 days after the earlier of (i) the date on which the Administrative Agent or such Lender, as the case may
be, makes payment of such Indemnified Taxes, and (ii) the date on which the appropriate Governmental Authority makes written demand on the Administrative Agent or
such Lender, as the case may be, for payment of such Indemnified Taxes, then the applicable Borrower shall not be obligated to indemnify or reimburse the
Administrative Agent or such Lender, as the case may be, for such Indemnified Taxes. Each Borrower shall, and does hereby indemnify the Administrative Agent, and
shall make payment in respect thereof within 10 days after demand therefor, for any amount which a Lender for any reason fails to pay indefeasibly to the Administrative
Agent as required pursuant to Section 3.01(c)(ii) below; provided, however, that no Borrower shall have any obligation to indemnify any party hereunder for Indemnified
Taxes, Other Taxes or any other liability that arises from such party’s own gross negligence or willful misconduct. To the extent that a Borrower pays an amount to the
Administrative Agent pursuant to the preceding sentence (a “Back-Up Indemnity Payment”), then upon request of the Company, the Administrative Agent shall use
commercially reasonable efforts to exercise its set-off rights described in the last sentence of clause (c)(ii) below (on behalf of itself or the Borrowers) to collect the
applicable Back-Up Indemnity Payment amount from the applicable Lender or L/C Issuer and shall pay the amount so collected to the Company net of any reasonable
expenses incurred by the Administrative Agent in its efforts to collect (through set-off or otherwise) from such Lender or L/C Issuer with respect to clause (c)(ii), below.
(ii) Each Lender shall, and does hereby, severally indemnify, and shall make payment in respect thereof within 10 days after demand therefor, (x) the
Administrative Agent against any Indemnified Taxes attributable to such Lender (but only to the extent that any Borrower has not already indemnified the Administrative
Agent for such Indemnified Taxes and without limiting the obligation of the Borrowers to do so) and (y) the Administrative Agent and the Borrowers, as applicable,
against any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent or a Borrower in connection with any Loan
Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent
manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender, as the case may be,
under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this clause (ii).
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(d)
Upon request by a Borrower or the Administrative Agent, as the case may be, after any payment of Taxes by such Borrower or by the Administrative Agent to a
Governmental Authority as provided in this Section 3.01, the Borrower shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the Borrower, as the
case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such
payment or other evidence of such payment reasonably satisfactory to the Borrower or the Administrative Agent, as the case may be.
(e)
Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender, or have
any obligation to pay to any Lender any refund of Taxes withheld or deducted from funds paid for the account of such Lender, as the case may be. If the Administrative Agent or
a Lender determines, in good faith, that it has received a refund of any Taxes as to which it has been indemnified by a Borrower or with respect to which a Borrower has paid
additional amounts pursuant to this Section 3.01, it shall pay an amount equal to such refund to such Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by such Borrower under this Section 3.01 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or
such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided that the applicable Borrower, upon
the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to such Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent, such Lender or the L/C Issuer in the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. Notwithstanding anything to the contrary in this subsection, in no event will the Administrative Agent or any Lender be required to pay
any amount to the applicable Borrower pursuant to this subsection the payment of which would place the Administrative Agent or such Lender in a less favorable net after-Tax
position than such party would have been in if the Indemnified Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise
imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or any other information relating to its Taxes that it deems confidential) to any Borrower or any other
Person.
(f)
Each party’s obligations under this Section 3.01 and under Section 11.15 shall survive the resignation or replacement of the Administrative Agent or any
assignment of rights by, or the replacement of, a Lender or the L/C Issuer, the termination of the Commitments and the repayment, satisfaction or discharge of all other
Obligations.
(g)
For purposes of this Section and Section 11.15, the term “Lender” includes the L/C Issuer.
3.02
Illegality.
If any Lender in good faith determines that any Change in Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to perform any of its obligations hereunder or make, maintain or fund or charge interest with respect to any Credit Extension or to determine or charge interest
rates based upon a Relevant Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, any
Applicable Currency in the applicable interbank market, then, on notice thereof by such Lender to the Company through the Administrative Agent, (i) any obligation of such Lender to
issue, make maintain, fund or charge interest with respect to any such Credit Extension or to make or continue Eurocurrency Rate Loans or Alternative Currency Loans in the Applicable
Currency or, in the case of Eurocurrency Rate Loans, to convert Base Rate Loans to Eurocurrency Rate Loans shall be suspended and (ii) if such notice asserts the illegality of such
Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurocurrency Rate component of the Base Rate, the interest rate on which
Base Rate Loans of such Lender, shall, if necessary to avoid such illegality, be determined by the Administrative Agent without utilization of the Eurocurrency Rate component of the
Base Rate, in each case, until such Lender notifies the Administrative Agent and the
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Company that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice by the Company, (x) the Borrowers shall, upon demand from such Lender
(with a copy to the Administrative Agent), prepay all Eurocurrency Rate Loans or Alternative Currency Loans, as applicable in the affected currency or currencies or, if applicable in the
case of Eurocurrency Rate Loans, convert all such Eurocurrency Rate Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if
necessary to avoid such illegality, be determined by the Administrative Agent without utilization of the Eurocurrency Rate component of the Base Rate), either on the last day of the
Interest Period therefor, if such Lender may lawfully continue to maintain such Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Loans and
(y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Eurocurrency Rate, the Administrative Agent shall during the period of such
suspension compute the Base Rate applicable to such Lender without reference to the Eurocurrency Rate component thereof until the Administrative Agent is advised in writing by such
Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Eurocurrency Rate. Upon any such prepayment or conversion, the applicable
Borrowers shall also pay accrued interest on the amount so prepaid or converted. Each Lender agrees to designate a different Lending Office if such designation will avoid the need for
such notice and will not, in the good faith judgment of such Lender, otherwise be materially disadvantageous to such Lender. If such Lender does not designate a different Lending Office
to avoid the need for such notice, the Company may replace such Lender in accordance with Section 11.16.
Each Lender at its option may make any Credit Extension to any Borrower by causing any domestic or foreign branch or Affiliate of such Lender to make such Credit Extension;
provided that any exercise of such option shall not affect the obligation of such Borrower to repay such Credit Extension in accordance with the terms of this Agreement; provided,
however, if any Lender determines that any Change in Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, in each case, after the Closing Date
for any Lender or its applicable Lending Office to issue, make, maintain, fund or any interest rate with respect to any Credit Extension to any Borrower who is organized under the laws
of a jurisdiction other than the United States, a State thereof or the District of Columbia then, on notice thereof by such Lender to the Company through the Administrative Agent, and
until such notice by such Lender is revoked, any obligation of such Lender to issue, make, maintain, fund or charge interest with respect to any such Credit Extension shall be suspended.
Upon receipt of such notice, the Borrowers shall, take all reasonable actions requested by such Lender to mitigate or avoid such illegality.
3.03
Inability to Determine Rates.
(a)
If in connection with any request for a Eurocurrency Rate Loan or an Alternative Currency Loan or a conversion of Base Rate Loans to Eurocurrency Rate Loans
or a continuation of any such Loans, as applicable, (i) the Administrative Agent in good faith determines that (A) no Benchmark Replacement or Successor Rate, as applicable,
for the Relevant Rate for the Applicable Currency has been determined in accordance with Section 3.03(b) or Section 3.03(c), as applicable, and the circumstances under clause
(i) of Section 3.03(b) or the Scheduled Unavailability Date has occurred with respect to such Relevant Rate (as applicable) or (B) adequate and reasonable means do not otherwise
exist for determining the Relevant Rate for the Applicable Currency for any determination date(s) or requested Interest Period, as applicable, with respect to a proposed
Eurocurrency Rate Loan or an Alternative Currency Loan or in connection with an existing or proposed Base Rate Loan, or (ii) the Administrative Agent or the Required Lenders
in good faith determine that for any reason that the Relevant Rate with respect to a proposed Loan denominated in a currency for any requested Interest Period or determination
date(s) does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly notify the Company and each Lender.
Thereafter, (x) the obligation of the Lenders to make or maintain Loans in the affected currency or currencies, as applicable, or to convert Base Rate Loans to Eurocurrency Rate
Loans, shall be suspended in each case to the extent of the affected Loans or Interest Periods or determination date(s), as applicable, and (y) in the event of a determination
described in the preceding sentence with respect to the Eurocurrency Rate component of the Base Rate, the utilization of the Eurocurrency Rate component in determining the
Base Rate shall be suspended, in each case until the Administrative Agent (or, in the case of a determination by the Required Lenders described in clause (ii) of this Section
3.03(a), until the Administrative Agent upon instruction of the Required
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Lenders) revokes such notice. Upon receipt of such notice, (1) the Company (or the applicable Borrower) may revoke any pending request for a Borrowing of, or conversion to
Eurocurrency Rate Loans, or Borrowing of, or a continuation of Alternative Currency Loans to the extent of the affected Alternative Currency Loans or Interest Period or
determination date(s), as applicable or, failing that, will be deemed to have converted such request into a request for a Committed Borrowing of Base Rate Loans in the Dollar
Equivalent of the amount specified therein and (2) any outstanding affected Alternative Currency Loans, at the Company’s election, shall either (I) be converted into a Committed
Borrowing of Base Rate Loans in the Dollar Equivalent of the amount of such outstanding Alternative Currency Loan immediately, in the case of an Alternative Currency Daily
Rate Loan or at the end of the applicable Interest Period, in the case of an Alternative Currency Term Rate Loan, or (II) be prepaid in full immediately, in the case of an
Alternative Currency Daily Rate Loan or at the end of the applicable Interest Period, in the case of an Alternative Currency Term Rate Loan; provided that if no election is made
by the Company (x) in the case of an Alternative Currency Daily Rate Loan, by the date that is three (3) Business Days after receipt by the Company of such notice or (y) in the
case of an Alternative Currency Term Rate Loan, by the last day of the current Interest Period for the applicable Alternative Currency Term Rate Loan, the Company shall be
deemed to have elected clause (I) above.
(b)
Alternative Currencies. Notwithstanding anything to the contrary in this Agreement or any other Loan Documents, if the Administrative Agent determines (which
determination shall be conclusive absent manifest error), or the Company or Required Lenders notify the Administrative Agent (with, in the case of the Required Lenders, a copy
to the Company) that the Company or Required Lenders (as applicable) have determined, that:
(i)
adequate and reasonable means do not exist for ascertaining the Relevant Rate for an Alternative Currency because none of the tenors of such Relevant
Rate (including any forward-looking term rate thereof) is available or published on a current basis and such circumstances are unlikely to be temporary; or
(ii)
the Applicable Authority has made a public statement identifying a specific date after which all tenors of the Relevant Rate for an Alternative Currency
(including any forward-looking term rate thereof) shall or will no longer be representative or made available, or used for determining the interest rate of loans
denominated in such Alternative Currency, or shall or will otherwise cease, provided, that, in each case, at the time of such statement, there is no successor administrator
that is satisfactory to the Administrative Agent that will continue to provide such representative tenor(s) of the Relevant Rate for such Alternative Currency (the latest
date on which all tenors of the Relevant Rate for such Alternative Currency (including any forward-looking term rate thereof) are no longer representative or available
permanently or indefinitely, the “Scheduled Unavailability Date”); or
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(iii)
syndicated loans currently being executed and agented in the United States, are being executed or amended (as applicable) to incorporate or adopt a new
benchmark interest rate to replace the Relevant Rate for an Alternative Currency;
or if the events or circumstances of the type described in Section 3.03(b)(i), (ii) or (iii) have occurred with respect to the Successor Rate then in effect, then, the Administrative
Agent and the Company may amend this Agreement solely for the purpose of replacing the Relevant Rate for an Alternative Currency or any then current Successor Rate for an
Alternative Currency in accordance with this Section 3.03 with an alternative benchmark rate giving due consideration to any evolving or then existing convention for similar
credit facilities syndicated and agented in the United States and denominated in such Alternative Currency for such alternative benchmarks, and, in each case, including any
mathematical or other adjustments to such benchmark giving due consideration to any evolving or then existing convention for similar credit facilities syndicated and agented in
the United States and denominated in such Alternative Currency for such benchmarks, which adjustment or method for calculating such adjustment shall be published on an
information service as selected by the Administrative Agent from time to time in its reasonable discretion and may be periodically updated (and any such proposed rate, including
for the avoidance of doubt, any adjustment thereto, a “Successor Rate”), and any such amendment shall become effective at 5:00 p.m. on the fifth Business Day after the
Administrative Agent shall have posted such proposed amendment to all Lenders and the Company unless, prior to such time, Lenders comprising the Required Lenders have
delivered to the Administrative Agent written notice that such Required Lenders object to such amendment. The Administrative Agent will promptly (in one or more notices)
notify the Company and each Lender of the implementation of any Successor Rate. Any Successor Rate shall be applied in a manner consistent with market practice; provided
that to the extent such market practice is not administratively feasible for the Administrative Agent, such Successor Rate shall be applied in a manner as otherwise reasonably
determined by the Administrative Agent. Notwithstanding anything else herein, if at any time any Successor Rate as so determined would otherwise be less than zero percent
(0.0%), the Successor Rate will be deemed to be zero percent (0.0%) for the purposes of this Agreement and the other Loan Documents. In connection with the implementation of
a Successor Rate, the Administrative Agent will have the right to make Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any
other Loan Document, any amendments implementing such Conforming Changes will become effective without any further action or consent of any other party to this
Agreement; provided that, with respect to any such amendment effected, the Administrative Agent shall post each such amendment implementing such Conforming Changes to
the Company and the Lenders reasonably promptly after such amendment becomes effective.
(c)
Dollars.
(i)
Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event, an Early Opt-in Election or an Other
Benchmark Rate Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-
current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) or (2) of the definition of “Benchmark Replacement” for such
Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any other Loan Document in respect of
such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other
Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (3) of the definition of “Benchmark Replacement” for such Benchmark
Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any other Loan Document in respect of any
Benchmark setting at or after 5:00 p.m. on the fifth Business Day after the date notice of such Benchmark Replacement is provided to the Lenders without any
amendment to, or further action or consent of any other party to,
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this Agreement or any other Loan Document so long as the Administrative Agent has not received, by such time, written notice of objection to such Benchmark
Replacement from Lenders comprising the Required Lenders.
(ii)
Notwithstanding anything to the contrary herein or in any other Loan Document and subject to the proviso below in this paragraph, if a Term SOFR
Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark, then
the applicable Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder or under any other Loan Document in respect of such
Benchmark setting and subsequent Benchmark settings, without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan
Document; provided that this paragraph shall not be effective unless the Administrative Agent has delivered to the Lenders and the Company a Term SOFR Notice. For
the avoidance of doubt, the Administrative Agent shall not be required to deliver a Term SOFR Notice after a Term SOFR Transition Event and may do so in its sole
discretion.
(iii)
In connection with the implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark Replacement
Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such
Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this Agreement or any other Loan
Document.
(iv)
The Administrative Agent will promptly notify the Company and the Lenders of (A) any occurrence of a Benchmark Transition Event, an Early Opt-in
Election or an Other Benchmark Rate Election, as applicable, (B) the implementation of any Benchmark Replacement, (C) the effectiveness of any Benchmark
Replacement Conforming Changes, (D) the removal or reinstatement of any tenor of a Benchmark pursuant to Section 3.03(c)(v) and (E) the commencement or
conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or, if applicable, any Lender
(or group of Lenders) pursuant to this Section 3.03(c), including any determination with respect to a tenor, rate or adjustment or of the occurrence or non-occurrence of an
event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and binding absent manifest error and may be
made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan Document, except, in each case, as expressly required
pursuant to this Section 3.03(c).
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(v)
Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a
Benchmark Replacement), (A) if the then-current Benchmark is a term rate (including Term SOFR or LIBOR) and either (x) any tenor for such Benchmark is not
displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion or (y) the
regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that any tenor for such
Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of “Interest Period” for any Benchmark settings at or after
such time to remove such unavailable or non-representative tenor and (B) if a tenor that was removed pursuant to clause (A) above either (x) is subsequently displayed on
a screen or information service for a Benchmark (including a Benchmark Replacement) or (y) is not, or is no longer, subject to an announcement that it is or will no
longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may modify the definition of “Interest Period” for all
Benchmark settings at or after such time to reinstate such previously removed tenor.
(vi)
Upon the Company’s receipt of notice of the commencement of a Benchmark Unavailability Period, a Borrower may revoke any Loan Notice requesting
a borrowing of, conversion to or continuation of Eurocurrency Rate Loans to be made, converted or continued during any Benchmark Unavailability Period and, failing
that, such Borrower will be deemed to have converted any such request into a request for a borrowing of or conversion to Base Rate Loans. During any Benchmark
Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of Base Rate based upon the then-current
Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of Base Rate and such component shall be deemed to be zero.
3.04
Increased Cost and Reduced Return; Capital Adequacy.
(a)
If any Lender or the L/C Issuer determines that as a result of any Change in Law, there shall be any increase in the cost to such Lender or the L/C Issuer of
agreeing to make or making, funding or maintaining Loans the interest on which is determined by reference to the Eurocurrency Rate, Alternative Currency Loans or (as the case
may be) issuing or participating in Letters of Credit, or a reduction in the amount received or receivable by such Lender or the L/C Issuer in connection with any of the foregoing,
in an amount deemed by such Lender or the L/C Issuer to be material (excluding for purposes of this subsection (a) any such increased costs or reduction in amount resulting from
(i) Taxes (as to which Section 3.01 shall govern), (ii) changes in the basis of taxation of overall net income or overall gross income by the United States or any foreign jurisdiction
or any political subdivision of either thereof under the Laws of which such Lender or the L/C Issuer is organized or has its Lending Office, and (iii) reserve requirements utilized,
as to Eurocurrency Rate Loans and Alternative Currency Loans, as contemplated by Section 3.04(e)), then from time to time within ten Business Days after the Borrowers’
receipt of the certificate contemplated by Section 3.06(a) from such Lender or the L/C Issuer (with a copy of such certificate to the Administrative Agent), the Borrowers shall
pay to such Lender or the L/C Issuer such additional amounts as will compensate such Lender or the L/C Issuer for such increased cost or reduction; provided that the Borrowers
shall not be required to compensate a Lender or the L/C Issuer pursuant to this Section 3.04 for any additional amounts incurred more than 90 days prior to the date that such
Lender or the L/C Issuer notifies the Borrowers of the Change in Law giving rise to such additional amounts and of such Lender’s or the L/C Issuer’s intention to claim
compensation therefor; provided that, if the Change in Law giving rise to such additional amounts is retroactive, then such 90-day period referred to above shall be extended to
include the period of retroactive effect thereof.
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(b)
If any Lender or the L/C Issuer determines that any Change in Law has the effect of reducing the rate of return on the capital of such Lender or the L/C Issuer or
any corporation controlling such Lender or the L/C Issuer as a consequence of such Lender’s or the L/C Issuer’s obligations hereunder (taking into consideration its policies with
respect to capital adequacy and liquidity and such Lender’s or the L/C Issuer’s desired return on capital), in an amount deemed by such Lender or the L/C Issuer to be material,
then from time to time within ten Business Days after the Borrowers’ receipt of the certificate contemplated by Section 3.06(a) from such Lender or the L/C Issuer (with a copy of
such certificate to the Administrative Agent), the Borrowers shall pay to such Lender or the L/C Issuer such additional amounts as will compensate such Lender or the L/C Issuer
for such reduction; provided that each such Lender or the L/C Issuer shall make demand for compensation hereunder no later than ninety days after becoming aware of such
effect.
(c)
[reserved].
(d)
Notwithstanding anything to the contrary in this Section 3.04, no Borrower shall be required to pay to any Lender or the L/C Issuer additional amounts under this
Section 3.04 for Taxes (Section 3.01 shall govern the obligation of the Borrowers to pay additional amounts for Taxes).
(e)
The Company shall pay (or cause the applicable Designated Borrower to pay) to each Lender, (i) as long as such Lender shall be required to maintain reserves
with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid
principal amount of each Eurocurrency Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith,
which determination shall be conclusive absent manifest error), and (ii) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous
requirement of any other central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of the Eurocurrency Rate
Loans or Alternative Currency Loans, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to
the actual costs allocated to such Commitment or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive absent manifest
error), which in each case shall be due and payable on each date on which interest is payable on such Loan, provided the Company shall have received at least 10 days’ prior
notice (with a copy to the Administrative Agent) of such additional interest or costs from such Lender. If a Lender fails to give notice ten Business Days prior to the relevant
Interest Payment Date, such additional interest or costs shall be due and payable ten Business Days from receipt of such notice.
3.05
Funding Losses.
The Company shall compensate (or cause the applicable Borrower to compensate) such Lender for and hold such Lender harmless from any loss, cost or expense (excluding the
loss of the Applicable Rate) incurred by it as a result of:
(a)
any continuation, conversion, payment or prepayment of any Eurocurrency Rate Loan or Alternative Currency Term Rate Loan on a day other than the last day of
the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);
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(b)
any failure by any Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Eurocurrency Rate
Loan or Alternative Currency Loan on the date or in the amount notified by the Company or the applicable Borrower;
(c)
any failure by any Borrower to make payment of any Alternative Currency Loan or drawing under any Letter of Credit (or interest due thereon) denominated in
an Alternative Currency on its scheduled due date or any payment thereof in a different currency; or
(d)
any assignment of a Eurocurrency Rate Loan or an Alternative Currency Term Rate Loan on a day other than the last day of the Interest Period therefor as a result
of a request by the Company pursuant to Section 11.16;
including any foreign exchange losses and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to
terminate the deposits from which such funds were obtained or from the performance of any foreign exchange contract. The Company shall also pay (or shall cause the applicable
Borrower to pay) any reasonable customary administrative fees charged by such Lender in connection with the foregoing. The Company (or the applicable Borrower) will, within ten
Business Days after the Company’s (or the applicable Borrower’s) receipt of the certificate contemplated by Section 3.06(a), pay such Lender such additional amounts as will compensate
such Lender for such losses, costs or expenses.
For purposes of calculating amounts payable by the Borrowers to the Lenders under this Section 3.05, (i) each Lender shall be deemed to have funded each Eurocurrency Rate
Loan made by it at the Eurocurrency Rate used in determining the Eurocurrency Rate for such Loan by a matching deposit or other borrowing in the applicable offshore interbank market
for such currency for a comparable amount and for a comparable period, whether or not such Eurocurrency Rate Loan was in fact so funded and (ii) each Lender shall be deemed to have
funded each Alternative Currency Term Rate Loan made by it at the Alternative Currency Term Rate for such Loan by a matching deposit or other borrowing in the offshore interbank
market for such currency for a comparable amount and for a comparable period, whether or not such Alternative Currency Term Rate Loan was in fact so funded.
3.06 Matters Applicable to all Requests for Compensation.
(a)
Any Lender or L/C Issuer claiming compensation under this Article III shall be required to deliver a certificate (i) setting forth in reasonable detail the additional
amount or amounts to be paid to it hereunder, and (ii) setting forth in reasonable detail the manner in which such amount was determined, which certificate shall be conclusive in
the absence of manifest error. In determining such amount, the Administrative Agent or such Lender may use any reasonable averaging and attribution methods.
(b)
Upon any Lender’s making a claim for compensation under Section 3.01 or 3.04, the Company may replace such Lender in accordance with Section 11.16.
(c)
Notwithstanding anything contained herein to the contrary, a Lender shall not be entitled to any compensation pursuant to Section 3.04 or to exercise the rights
under Section 3.02 to the extent such Lender is not generally imposing such charges or requesting such compensation from, or is not generally exercising such rights against, as
applicable, other similarly situated borrowers under similar circumstances.
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3.07
Survival.
The obligations of each Borrower under this Article III shall survive termination of the Aggregate Commitments, repayment of all other Obligations hereunder and resignation of
the Administrative Agent.
Article IV.
GUARANTY
4.01
The Guaranty.
The Company hereby guarantees to each Lender, the L/C Issuer and the Administrative Agent as hereinafter provided, as primary obligor and not as surety, the prompt payment
of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) strictly in accordance with
the terms thereof. The Company hereby further agrees that if any of the Obligations are not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration,
as a mandatory cash collateralization or otherwise), the Company will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration, as a mandatory
cash collateralization or otherwise) in accordance with the terms of such extension or renewal.
4.02 Obligations Unconditional.
The obligations of the Company under Section 4.01 are absolute and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Loan
Documents or other documents relating to the Obligations, or any substitution, release, impairment or exchange of any other guarantee of or security for any of the Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor (other than payment in full of all Obligations (other than contingent indemnification obligations for which no claim has yet been made)), it being the intent of this Section 4.02
that the obligations of the Company hereunder shall be absolute and unconditional under any and all circumstances until payment in full of all Obligations (other than contingent
indemnification Obligations for which no claim has yet been made). The Company agrees that it shall have no right of subrogation, indemnity, reimbursement or contribution against any
Borrower for amounts paid under this Article IV until such time as the Obligations have been paid in full (other than contingent indemnification Obligations on which no claim has yet
been made) and the Commitments have expired or terminated. Without limiting the generality of the foregoing, it is agreed that, to the fullest extent permitted by law, the occurrence of
any one or more of the following shall not alter or impair the liability of the Company hereunder, which shall remain absolute and unconditional as described above:
(a)
at any time or from time to time, without notice to the Company, the time for any performance of or compliance with any of the Obligations shall be extended, or
such performance or compliance shall be waived;
(b)
any of the acts mentioned in any of the provisions of any of the Loan Documents or any other agreement or instrument referred to in the Loan Documents shall be
done or omitted;
(c)
the maturity of any of the Obligations shall be accelerated, or any of the Obligations shall be modified, supplemented or amended in any respect, or any right
under any of the Loan Documents or any other agreement or instrument referred to in the Loan Documents shall be waived or any other guarantee of any of the Obligations or any
security therefor shall be released, impaired or exchanged in whole or in part or otherwise dealt with;
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(d)
be perfected; or
any Lien granted to, or in favor of, the Administrative Agent, the L/C Issuer or any Lender or Lenders as security for any of the Obligations shall fail to attach or
(e)
any of the Obligations shall be determined to be void or voidable (including, without limitation, for the benefit of any creditor of the Company) or shall be
subordinated to the claims of any Person (including, without limitation, any creditor of the Company).
With respect to its obligations hereunder, the Company hereby expressly waives diligence, presentment, demand of payment, protest and all notices whatsoever, and any
requirement that the Administrative Agent, the L/C Issuer or any Lender exhaust any right, power or remedy or proceed against any Person under any of the Loan Documents or any other
agreement or instrument referred to in the Loan Documents or against any other Person under any other guarantee of, or security for, any of the Obligations.
4.03
Reinstatement.
The obligations of the Company under this Article IV shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Person in
respect of the Obligations is rescinded or must be otherwise restored by any holder of any of the Obligations, whether as a result of any Debtor Relief Law or otherwise, and the Company
agrees that it will indemnify the Administrative Agent, the L/C Issuer and each Lender on demand for all reasonable costs and expenses (including, without limitation, fees and expenses
of counsel) incurred by the Administrative Agent, the L/C Issuer or such Lender in connection with such rescission or restoration, including any such costs and expenses incurred in
defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any Debtor Relief Law.
4.04
Certain Additional Waivers.
The Company agrees that it shall have no right of recourse to security for the Obligations, except through the exercise of rights of subrogation pursuant to Section 4.02.
4.05
Remedies.
The Company agrees that, to the fullest extent permitted by law, as between the Company, on the one hand, and the Administrative Agent, the L/C Issuer and the Lenders, on the
other hand, the Obligations may be declared to be forthwith due and payable as provided in Section 9.02 (and shall be deemed to have become automatically due and payable in the
circumstances provided in said Section 9.02) for purposes of Section 4.01 notwithstanding any stay, injunction or other prohibition preventing such declaration (or preventing the
Obligations from becoming automatically due and payable) as against any other Person and that, in the event of such declaration (or the Obligations being deemed to have become
automatically due and payable), the Obligations (whether or not due and payable by any other Person) shall forthwith become due and payable by the Company for purposes of
Section 4.01.
4.06 Guarantee of Payment; Continuing Guarantee.
The guarantee in this Article IV is a guaranty of payment and not of collection, is a continuing guarantee, and shall apply to all Obligations whenever arising.
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Article V.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
5.01
Conditions of Initial Credit Extension.
The obligation of each Lender and the L/C Issuer to make its initial Credit Extension hereunder is subject to satisfaction of the following conditions precedent:
(a)
The Administrative Agent’s receipt of the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise specified,
each properly executed by a Responsible Officer of the signing Borrower, each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before
the Closing Date) and each in form and substance reasonably satisfactory to the Administrative Agent and its legal counsel:
(i)
(ii)
executed counterparts of this Agreement by the Administrative Agent, each Lender and each Borrower;
Notes executed by the Borrowers in favor of each Lender requesting a Note;
(iii)
copies of the Organization Documents of each Borrower certified to be true and complete as of a recent date by the appropriate Governmental Authority
of the state or other jurisdiction of its incorporation or organization, where applicable or unless otherwise approved by the Administrative Agent, and certified by a
secretary or assistant secretary of such Borrower to be true and correct as of the Closing Date; in respect of each Belgian Borrower, (A) copy of the deed of incorporation
(oprichtingsakte/acte de constitution), (B) copy of the latest consolidated articles of association (gecoördineerde statuten/statuts coordonnés), (C) copy of the share
register, (D) a non-bankruptcy extract (attest van niet-faling/certificat de non-faillite) issued by the clerk’s office of the relevant Commercial Court and dated not earlier
than 3 days prior to the Closing Date or, if relevant, the date of accession, (E) an extract from the Crossroad Bank for Enterprises dated not earlier than 3 days prior to the
Closing Date or, if relevant, the date of accession and (F) evidence that an extract of the resolution delivered pursuant to Section 5.01(a)(iv) has been filed with the clerk
of the relevant Commercial Court, in accordance with Article 556 of the Belgian Company Code.
(iv)
such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of each Borrower as the
Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible
Officer in connection with this Agreement and the other Loan Documents to which such Borrower is a party; in respect of each Belgian Borrower, resolutions of the
board of directors or, as the case may be, the board of managers, (A) approving the terms of, and the transactions contemplated by the Loan Documents and resolving that
it will enter into, execute and perform the Loan Documents to which it is a party, (B) authorising a specific person or persons to execute the Loan Documents to which it
is a party on its behalf, (C) authorising a specific 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 Loan Documents to which it is a party, (D) appointing and/or confirming the appointment of the Company as its agent and any process
agents required pursuant to the terms of the Loan Documents, and (E) stating that the entering into and execution of the Loan Documents is in its corporate benefit and in
conformity with its corporate purpose; in respect of each Belgian Borrower which is a “commanditaire vennootschap op aandelen (CVA) / société en commandite par
actions (SCA)”, resolutions of its
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shareholders’ meeting, or written resolutions of all its shareholders, approving the change of control provisions in the Loan Documents, to which such Belgian Borrower
is a party, including without limitation, Section 8.02;
(v)
such documents and certifications as the Administrative Agent may reasonably require to evidence that each Borrower is duly organized or formed, and
that each of the Borrowers is validly existing, in good standing and qualified to engage in business in its state of organization or formation;
(vi)
opinions of Arnold & Porter Kaye Scholer LLP, Troutman Sanders LLP, and Hunton Andrews Kurth LLP, counsel to the Borrowers, addressed to the
Administrative Agent and each Lender, dated as of the Closing Date, and in form and substance reasonably satisfactory to the Administrative Agent;
(vii)
a certificate signed by a Responsible Officer of the Company certifying (A) that the conditions specified in Sections 5.01(c) and 5.02(a) and (b) have
been satisfied and (B) the current Debt Ratings;
(b)
Any fees required to be paid on or before the Closing Date shall have been paid.
(c)
Since December 31, 2017, there shall not have occurred a material adverse change in the operations, business, properties, liabilities (actual or contingent) or
financial condition of the Company or the Consolidated Group taken as a whole.
(d)
KYC Information.
(i)
Upon the reasonable request of any Lender made at least 10 days prior to the Closing Date, the Borrowers shall have provided to such Lender the
documentation and other information so requested in connection with applicable “know your customer” and anti-money-laundering rules and regulations, including the
PATRIOT Act, in each case at least five days prior to the Closing Date.
(ii)
At least five days prior to the Closing Date, if any Borrower qualifies as a “legal entity customer” under the Beneficial Ownership Regulation, such
Borrower shall deliver a Beneficial Ownership Certification in relation to such Borrower.
(e)
The Company shall have paid all reasonable attorney’s fees of the Administrative Agent to the extent invoiced at least two Business Days prior to the Closing
Date, plus such additional amounts of fees as shall constitute its reasonable estimate of attorney’s fees incurred or to be incurred by it through the closing proceedings and as shall
be identified in the invoice provided at least two Business Days prior to the Closing Date (provided that such estimate shall not thereafter preclude a final settling of accounts
between the Company and the Administrative Agent).
Without limiting the generality of the provisions of the last paragraph of Section 10.03, for purposes of determining compliance with the conditions specified in this Section 5.01,
each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.
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5.02
Conditions to all Credit Extensions.
The obligation of each Lender to honor any Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Committed Loans to the other
Type, or a continuation of Committed Loans as the same Type) is subject to the following conditions precedent:
(a)
The representations and warranties of the Company and each other Borrower contained in Article VI (excluding the representation and warranty contained in
subsection (c) of Section 6.05) or any other Loan Document, or that are contained in any document furnished at any time under or in connection herewith or therewith, shall be
true and correct in all material respects on and as of the date of such Credit Extension, except to the extent that such representations and warranties specifically refer to an earlier
date, in which case they shall be true and correct in all material respects as of such earlier date, and except that for purposes of this Section 5.02, the representations and
warranties contained in subsections (a) and (b) of Section 6.05 shall be deemed to refer to the most recent financial statements furnished pursuant to clauses (a) and (b),
respectively, of Section 7.01.
(b)
No Default shall exist, or would result from such proposed Credit Extension.
(c)
requirements hereof.
The Administrative Agent and, if applicable, the L/C Issuer or the Swing Line Lender shall have received a Request for Credit Extension in accordance with the
(d)
If the applicable Borrower is a Designated Borrower, then the conditions of Section 2.14 to the designation of such Borrower as a Designated Borrower shall have
been met to the satisfaction of the Administrative Agent.
(e)
In the case of a Credit Extension to be denominated in an Alternative Currency, there shall not have occurred any change in national or international financial,
political or economic conditions or currency exchange rates or exchange controls which in the reasonable opinion of the Administrative Agent, the Required Lenders (in the case
of any Loans to be denominated in an Alternative Currency) or the L/C Issuer (in the case of any Letter of Credit to be denominated in an Alternative Currency) would make it
impracticable for such Credit Extension to be denominated in the relevant Alternative Currency.
Each Request for Credit Extension (other than a Committed Loan Notice requesting only a conversion of Committed Loans to the other Type or a continuation of Eurocurrency
Rate Loans or Alternative Currency Term Rate Loans) submitted by the Company shall be deemed to be a representation and warranty that the conditions specified in Sections 5.02(a)
and (b) have been satisfied on and as of the date of the applicable Credit Extension.
The Borrowers represent and warrant to the Administrative Agent and the Lenders that:
Article VI.
REPRESENTATIONS AND WARRANTIES
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6.01
Existence, Qualification and Power.
Each Borrower (a) is a corporation, partnership, limited liability company, limited liability company organized under the laws of Belgium (“société à responsabilité limitée”), or
other business entity duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and
authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own its assets and carry on its business and (ii) execute, deliver and perform its obligations
under the Loan Documents to which it is a party and (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation
of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent that failure to do so would not
reasonably be expected to have a Material Adverse Effect.
6.02
Authorization; No Contravention.
The execution, delivery and performance by each Borrower of each Loan Document to which such Person is party have been duly authorized by all necessary corporate or other
organizational action and do not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of
any Lien under, (i) any Contractual Obligation to which such Person is a party or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which
such Person or its property is subject; or (c) violate any Law, except in each case referred to in clause (b) or (c), to the extent that it would not reasonably be expected to have a Material
Adverse Effect.
6.03 Governmental Authorization; Other Consents.
No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement against, any Borrower of this Agreement or any other Loan Document, except for those the failure to obtain,
occur or make would not reasonably be expected to have a Material Adverse Effect.
6.04
Binding Effect.
This Agreement and each other Loan Document has been duly executed and delivered by each Borrower that is party thereto. This Agreement and each other Loan Document
constitutes a legal, valid and binding obligation of each Borrower that is party thereto, enforceable against each such Borrower in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
6.05
Financial Statements; No Material Adverse Change.
(a)
The audited consolidated balance sheet of the Consolidated Group for the fiscal year ended December 31, 2017, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for such fiscal year, including the notes thereto (i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present the financial condition of the Consolidated Group in all material respects as
of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Consolidated Group as of the date thereof, including
liabilities for taxes, material commitments and Indebtedness, which are required to be shown thereon in accordance with GAAP.
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(b)
The unaudited consolidated financial statements of the Consolidated Group for the fiscal quarter ended March 31, 2018, and the related consolidated statements
of income or operations and cash flows for such fiscal quarter (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present the financial condition of the Consolidated Group in all material respects as of the date thereof and their results of operations
for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments; and (iii) show all material
indebtedness and other liabilities, direct or contingent, of the Consolidated Group as of the date thereof, including liabilities for taxes, material commitments and Indebtedness,
which are required to be shown thereon in accordance with GAAP.
(c)
Since December 31, 2020, there has been no event or circumstance, either individually or in the aggregate, that has had or would be reasonably be expected to
have a Material Adverse Effect.
6.06
Litigation.
There are not any actions, suits or proceedings at law or in equity or by or before any Governmental Authority now pending or, to the knowledge of the Borrowers, threatened
(and reasonably likely to be commenced) in writing against or affecting any member of the Consolidated Group or any property or rights of the Consolidated Group as to which there is a
reasonable likelihood of an adverse determination and which, if adversely determined, would individually or in the aggregate result in a Material Adverse Effect.
6.07
No Default.
(a)
Adverse Effect.
Neither the Company nor any Subsidiary is in default under or with respect to any Contractual Obligation that would reasonably be expected to have a Material
(b)
No Default or Event of Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any
other Loan Document.
6.08 Ownership of Property; Liens.
Each member of the Consolidated Group has good record and marketable title in fee simple (or similar concept under any applicable jurisdiction) to, or valid leasehold interests
in, all real property necessary in the ordinary conduct of its business, except for such defects in title as would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. The property of the Consolidated Group is subject to no Liens, other than Liens permitted by Section 8.01.
6.09
Environmental Compliance.
Except as set forth in Schedule 6.09, (a) the Consolidated Group is in compliance in all material respects with all applicable Environmental Laws, except where the failure to do
so would not be reasonably likely, individually or in the aggregate, to result in a Material Adverse Effect; (b) no member of the Consolidated Group has received written notice of any
failure to comply with applicable Environmental Laws, which non-compliance neither has been or is being remedied, nor is being contested in good faith by such member of the
Consolidated Group, nor is the subject of such member’s good faith efforts to achieve compliance, except notices for which non-compliance would not be reasonably likely, individually
or in the aggregate, to result in a Material Adverse Effect; (c) the Consolidated Group’s facilities do not manage any Hazardous Materials in violation in any applicable Environmental
Law, except where such violation would not reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect; and (d) the Company is aware of no events,
conditions or circumstances involving environmental pollution or contamination or employee health or safety that would be reasonably likely to result in a Material Adverse Effect.
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6.10
Insurance.
The properties of the Consolidated Group are insured with financially sound and reputable insurance companies not Affiliates of the Company, in such amounts (after giving
effect to any self-insurance compatible with the following standards), with such deductibles and covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where the Company or its Subsidiaries operate.
6.11
Taxes.
Each member of the Consolidated Group has filed all federal, state and other Tax returns and reports required to be filed by such member, and has paid all federal, state and other
Taxes levied or imposed upon such member or its properties, income or assets otherwise due and payable, except (a) those that are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance with GAAP or (b) those that would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. There is no proposed Tax assessment against the Company or any Subsidiary that would, if made, have a Material Adverse Effect.
6.12
ERISA Compliance.
(a)
Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Internal Revenue Code and other federal or state Laws. Each Plan
that is intended to qualify under Section 401(a) of the Internal Revenue Code has received a favorable determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the knowledge of the Company, nothing has occurred that would prevent, or cause the loss of, such qualification.
The Company and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Internal Revenue Code, and no application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of the Internal Revenue Code has been made with respect to any Plan.
(b)
There are no pending or, to the best knowledge of the Company, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to
any Plan that would reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary responsibility rules with
respect to any Plan that has resulted or would reasonably be expected to result in a Material Adverse Effect.
(c)
Other than as would not reasonably be expected to result in a Material Adverse Effect, (i) no ERISA Event has occurred or is reasonably expected to occur, (ii)
neither the Company nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension Plan (other than
premiums due and not delinquent under Section 4007 of ERISA and other contributions payable in accordance with the terms of such Pension Plan or applicable law), and (iii)
neither the Company nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred that, with the giving of notice under Section
4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan.
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(d)
(e)
ERISA.
The Pension Plans, on a consolidated basis, do not have any Unfunded Pension Liability that would reasonably be expected to result in a Material Adverse Effect.
To the knowledge of the Borrowers, neither the Company nor any ERISA Affiliate has engaged in a transaction that is subject to Sections 4069 or 4212(c) of
(f)
Each Borrower represents and warrants as of the Closing Date that such Borrower is not and will not be using “plan assets” (within the meaning of 29 CFR §
2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the Commitments.
6.13 Margin Regulations; Investment Company Act.
(a)
No Borrower is engaged or will engage, principally or as one of its important activities, in the business of purchasing or carrying “margin stock” within the
meaning of Regulation U issued by the FRB, as in effect from time to time, or extending credit for the purpose of purchasing or carrying “margin stock,” and the Credit
Extensions hereunder will not be used to purchase or carry “margin stock” in violation of Regulation U or to extend credit to others for the purpose of purchasing or carrying
“margin stock,” or for any purpose that would violate the provisions of Regulation X issued by the FRB, as in effect from time to time.
(b)
None of the Company or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940.
6.14
Disclosure.
No report, financial statement, certificate or other written information furnished by any Borrower or by any of the Borrower’s representatives (on the Borrower’s behalf) to the
Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder (as modified or supplemented
by other information so furnished), taken as a whole, contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Company represents only that such projections were
prepared in good faith based upon reasonable assumptions and estimates as of the date of preparation (it being understood and agreed that projections are as to future events and are not to
be viewed as facts and are subject to significant uncertainties and contingencies, many of which are beyond the control of the Company and its Subsidiaries, that no assurance can be
given that any particular projection will be realized, that actual results during the period or periods covered by any such projections may differ significantly from the projected results and
such differences may be material, and that projections are not representations by the Company or its Subsidiaries that such projections will be achieved). As of the Closing Date, the
information included in the Beneficial Ownership Certification is true and correct in all respects.
6.15
Compliance with Laws.
Each of the Company and each Subsidiary is in compliance in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it
or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings or (b) the
failure to comply therewith would not reasonably be expected to have a Material Adverse Effect.
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6.16
Intellectual Property; Licenses, Etc.
To the knowledge of the Borrowers, the Consolidated Group owns, or possesses the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent
rights, franchises, licenses and other intellectual property rights that are reasonably necessary for the operation of its businesses, without conflict with the rights of any other Person that
would reasonably be expected to have a Material Adverse Effect. To the knowledge of the Borrowers, no slogan or other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by the Company or any Subsidiary infringes upon any rights held by any other Person that would reasonably be
expected to have a Material Adverse Effect. No claim or litigation regarding any of the foregoing is pending or, to the knowledge of the Borrowers, threatened (and reasonably likely to be
commenced), that would in either case reasonably be expected to have a Material Adverse Effect.
6.17
Subsidiaries.
Set forth on Schedule 6.17 is a complete and accurate list as of the Closing Date of each Subsidiary of the Company, together with (i) the jurisdiction of formation, (ii) an
indication of whether such Subsidiary is an Immaterial Subsidiary, and (iii) the ownership percentage of the Company or any Subsidiary therein.
6.18
Solvency.
The Company and its Subsidiaries, on a consolidated basis, are Solvent.
6.19
Non-Domestic Borrowers.
Each Non-Domestic Borrower represents and warrants to the Administrative Agent and the Lenders that:
(a)
Such Non-Domestic Borrower is subject to civil and commercial Laws with respect to its obligations under this Agreement and the other Loan Documents to
which it is a party (collectively as to such Non-Domestic Borrower, the “Applicable Foreign Obligor Documents”), and the execution, delivery and performance by such Non-
Domestic Borrower of the Applicable Foreign Obligor Documents constitute and will constitute private and commercial acts and not public or governmental acts. No such Non-
Domestic Borrower nor any of its property has any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) under the laws of the jurisdiction in which such Non-Domestic Borrower is organized and existing in respect of
its obligations under the Applicable Foreign Obligor Documents.
(b)
The Applicable Foreign Obligor Documents are in proper legal form under the Laws of the jurisdiction in which such Non-Domestic Borrower is organized and
existing for the enforcement thereof against such Non-Domestic Borrower under the Laws of such jurisdiction, and to ensure the legality, validity, enforceability, priority or
admissibility in evidence of the Applicable Foreign Obligor Documents. It is not necessary to ensure the legality, validity, enforceability, priority or admissibility in evidence of
the Applicable Foreign Obligor Documents that the Applicable Foreign Obligor Documents be filed, registered or recorded with, or executed or notarized before, any court or
other authority in the jurisdiction in which such Non-Domestic Borrower is organized and existing or that any registration charge or stamp or similar tax be paid on or in respect
of the Applicable Foreign Obligor Documents or any other document, except for (i) any such filing, registration, recording, execution or notarization as has been made or is not
required to be made until the Applicable Foreign Obligor Document or any other document is sought to be enforced and (ii) any charge or tax as has been timely paid.
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(c)
There is no tax, levy, impost, duty, fee, assessment or other governmental charge, or any deduction or withholding, imposed by any Governmental Authority in or
of the jurisdiction in which such Non-Domestic Borrower is organized and existing either (i) on or by virtue of the execution or delivery of the Applicable Foreign Obligor
Documents or (ii) on any payment to be made by such Non-Domestic Borrower pursuant to the Applicable Foreign Obligor Documents, except as has been disclosed to the
Lenders, through the Administrative Agent.
(d)
The execution, delivery and performance of the Applicable Foreign Obligor Documents executed by such Non-Domestic Borrower are, under applicable foreign
exchange control regulations of the jurisdiction in which such Non-Domestic Borrower is organized and existing, not subject to any notification or authorization except (i) such as
have been made or obtained or (ii) such as cannot be made or obtained until a later date (provided that any notification or authorization described in clause (ii) shall be made or
obtained as soon as is reasonably practicable).
6.20 OFAC; Anti-Corruption Laws.
(a) The Company has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrowers, their Subsidiaries and their
respective directors, officers, employees, agents, affiliates and representatives with applicable Sanctions, and the Borrowers and their Subsidiaries and, to the knowledge of the
Borrowers and their Subsidiaries, their respective directors, officers, employees, agents, affiliates and representatives, are in compliance with applicable Sanctions in all material
respects and are not knowingly engaged in any activity that would reasonably be expected to result in any Borrower being included on OFAC’s List of Specially Designated
Nationals, HMT’s Consolidated List of Financial Sanctions Targets and the Investment Ban List, or any similar list enforced by any other relevant sanctions authority. None of the
Borrowers, nor any of their Subsidiaries, nor, to the knowledge of the Borrowers and their Subsidiaries, any director, officer, employee, agent, affiliate or representative thereof, is
an individual or entity currently the subject of any Sanctions, nor is any Borrower or any Subsidiary located, organized or resident in a Designated Jurisdiction.
(b) The Borrowers and their Subsidiaries are in compliance in all material respects with applicable anti-corruption Laws (it being understood and agreed that the
foregoing representation and warranty shall not be deemed to be inaccurate on account of conduct described in Schedule 6.20 solely to the extent such conduct has occurred prior
to the Closing Date (and, for the avoidance of doubt, is not continuing on the date on which such representation and warranty is made or deemed to be made hereunder)) and have
instituted and maintain in effect policies and procedures reasonably designed to promote and achieve compliance with such Laws.
6.21
Affected Financial Institutions.
No Borrower is an Affected Financial Institution.
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Article VII.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied (other than contingent indemnification
obligations for which no claim or demand has been made), or any Letter of Credit shall remain outstanding (other than any Letter of Credit that has been Cash Collateralized or with
respect to which other arrangements satisfactory to the L/C Issuer have been made), the Borrowers shall and shall cause each of their respective Subsidiaries to:
7.01
Financial Statements.
Furnish to the Administrative Agent (who will make such documents available to each Lender), in form and detail reasonably satisfactory to the Administrative Agent and the
Required Lenders:
(a)
as soon as available, but in any event within ninety days after the end of each fiscal year of the Company, a consolidated balance sheet of the Consolidated Group
as of the end of such fiscal year, and the related consolidated statements of income or operations, changes in equity and cash flows for such fiscal year, setting forth in each case
in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and opinion of
an independent certified public accountant of nationally recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in
accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception (other than any qualification or exception
in the last year of this Agreement and due solely to the impending maturity of the Loans and Commitments hereunder) or any qualification or exception as to the scope of such
audit; and
(b)
as soon as available, but in any event within fifty days after the end of each of the first three fiscal quarters of each fiscal year of the Company, a consolidated
balance sheet of the Consolidated Group as of the end of such fiscal quarter, and the related consolidated statements of income or operations and cash flows for such fiscal quarter
and for the portion of the Company’s fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal
year and the corresponding portion of the previous fiscal year, all in reasonable detail and certified by a Responsible Officer of the Company as fairly presenting the financial
condition, results of operations and cash flows of the Consolidated Group in all material respects, in accordance with GAAP, subject only to normal year-end audit adjustments
and the absence of footnotes.
As to any information contained in materials furnished pursuant to Section 7.02(d), the Company shall not be separately required to furnish such information under clause (a) or
(b) above, but the foregoing shall not be in derogation of the obligation of the Company to furnish the information and materials described in subsections (a) and (b) above at the times
specified therein.
7.02
Certificates; Other Information.
Deliver to the Administrative Agent (who will make such documents available to each Lender), in form and detail reasonably satisfactory to the Administrative Agent and the
Required Lenders:
(a)
concurrently with the delivery of the financial statements referred to in Section 7.01(a), a certificate of its independent certified public accountants certifying such
financial statements and stating that in making the examination necessary therefor no knowledge was obtained of any Default or Event of Default under the financial covenant set
forth herein or, if any such Default or Event of Default shall exist, stating the nature and status of such event
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(which certificate, when furnished by such accountants, may be limited to accounting matters and disclaim responsibility for legal interpretations);
(b)
concurrently with the delivery of the financial statements referred to in Sections 7.01(a) and (b), a duly completed Compliance Certificate signed by a
Responsible Officer of the Company, (i) setting forth computations in reasonable detail satisfactory to the Administrative Agent demonstrating compliance with the financial
covenant contained in Section 8.06, (ii) certifying that no Default or Event of Default exists as of the date thereof (or, to the extent a Default or Event of Default exists, the nature
and extent thereof and the proposed actions of the Borrowers with respect thereto) and (iii) including a summary of all material changes in GAAP affecting the Company and in
the consistent application thereof by the Company, the effect on the financial covenant resulting therefrom, and a reconciliation between calculation of the financial covenant
before and after giving effect to such changes (which certificate may be delivered by electronic mail or by facsimile);
(c)
promptly after requested in writing by the Administrative Agent on behalf of any Lender, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Company by independent accountants in connection with the
accounts or books of the Company or any Subsidiary, or any audit of any of them;
(d)
promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the
Company, and copies of all annual, regular, periodic and special reports and registration statements that the Company may file or be required to file with the SEC under Section
13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to be delivered to the Administrative Agent pursuant hereto;
(e)
promptly following any request in writing therefor, information and documentation reasonably requested by the Administrative Agent or any Lender for purposes
of compliance with applicable “know your customer” requirements under the PATRIOT Act, the Beneficial Ownership Regulation or other applicable anti-money laundering
laws; and
(f)
promptly, such additional information regarding the business, financial or corporate affairs of the Company or any Subsidiary, or compliance with the terms of the
Loan Documents, as the Administrative Agent, on behalf of any Lender, may from time to time reasonably request in writing.
Documents required to be delivered pursuant to Section 7.01(a) or (b) or Section 7.02(d) (to the extent any such documents are included in materials otherwise filed with the
SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Company posts such documents, or provides a link thereto
on the Company’s website on the Internet at the website address listed on Schedule 11.02; or (ii) on which such documents (A) are available on the website of the SEC at
http://www.sec.gov or (B) are posted on the Company’s behalf on another Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative Agent); provided that in the case of documents that are not available on http://www.sec.gov, (i) the Company
shall deliver paper copies of such documents to the Administrative Agent or any Lender upon its request to the Company to deliver such paper copies until a written request to cease
delivering paper copies (which may include .pdf files) is given by the Administrative Agent or such Lender and (ii) the Company shall notify (which may be by facsimile or electronic
mail) the Administrative Agent and each Lender (by facsimile or electronic mail) of the posting of any such documents and provide to the Administrative Agent by electronic mail
electronic versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents
referred to above, and in any event shall have no responsibility to monitor compliance by the Company with any such request by a Lender for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such documents.
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Each Borrower hereby acknowledges that (a) the Administrative Agent and/or BAS may, but shall not be obligated to, make available to the Lenders and the L/C Issuer materials
and/or information provided by or on behalf of the Borrowers hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on Debt Domain, IntraLinks, SyndTrak
or another similar electronic system (the “Platform”) subject to procedures and confidentiality undertakings of the Platform and (b) certain of the Lenders (each a “Public Lender”) may
have personnel who do not wish to receive material non-public information with respect to any of the Borrowers or their respective Affiliates, or the respective securities of any of the
foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities. Each Borrower hereby agrees that (w) all Borrower
Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear
prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” the Borrowers shall be deemed to have authorized the Administrative Agent, BAS, the L/C Issuer
and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to the Borrowers or their respective securities for purposes of United
States federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 11.08); (y) all
Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated as “Public Side Information;” and (z) the Administrative Agent
and BAS shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated as “Public Side
Information.” Notwithstanding the foregoing, no Borrower shall be under any obligation to mark any Borrower Materials “PUBLIC.”
7.03
Notices.
Promptly notify the Administrative Agent (who will make such notice available to each Lender):
(a)
(b)
of the occurrence of any Default;
of any matter that has resulted or would reasonably be expected to result in a Material Adverse Effect; and
(c)
if unrated, any announcement by Moody’s, S&P or Fitch of any Debt Rating, or if rated, any announcement by Moody’s, S&P or Fitch of any change or possible
change in a Debt Rating.
Each notice pursuant to this Section shall be accompanied by a statement of a Responsible Officer of the Company setting forth details of the occurrence referred to therein and,
in the case of any notice pursuant to clause (a) or (b) of this Section, stating what action the Company has taken and proposes to take with respect thereto. Each notice pursuant to Section
7.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.
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7.04
Payment of Obligations.
Pay and discharge as the same shall become due and payable, (a) all material Taxes imposed upon it or its properties or assets, unless the same are being contested in good faith
by appropriate proceedings and adequate reserves in accordance with GAAP are being maintained by the Company or such Subsidiary, (b) all lawful claims that, if unpaid, would by law
become a Lien upon its property (other than a Lien permitted by Section 8.01) and (c) except where the failure to so pay or discharge would not reasonably be expected to have a Material
Adverse Effect, all other obligations and liabilities.
7.05
Preservation of Existence, Etc.
(a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction
permitted by Section 8.02; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business,
except to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which would reasonably be expected to have a Material Adverse Effect.
7.06 Maintenance of Properties.
Maintain, preserve and protect all of its material properties and material equipment necessary in the operation of its business in good working order and condition, ordinary wear
and tear and damage by casualty or condemnation excepted.
7.07 Maintenance of Insurance.
Maintain with financially sound and reputable insurance companies not Affiliates of the Company, insurance with respect to its properties and business against loss or damage of
the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts (after giving effect to any self-insurance compatible with the
following standards) as are customarily carried under similar circumstances by such other Persons.
7.08
Compliance with Laws.
(a) Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such
instances in which (i) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings; or (ii) the failure to comply therewith
would not reasonably be expected to have a Material Adverse Effect and (b) maintain in effect and enforce policies and procedures designed to ensure compliance by the Borrowers, their
Subsidiaries and their respective directors, officers, employees, agents, affiliates and representatives with applicable anti-corruption laws and applicable Sanctions.
7.09
Books and Records.
(a) Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions
and matters involving the assets and business of the Company or such Subsidiary, as the case may be, in each case as required by GAAP; and (b) maintain such books of record and
account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Company or such Subsidiary, as the case may be.
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7.10
Inspection Rights.
Upon the request of the Administrative Agent on behalf of any Lender, permit representatives and independent contractors of the Administrative Agent and each Lender to visit
and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts
with its directors, officers, and independent public accountants (provided, that a representative of any of the Borrowers or any Subsidiary shall be entitled to attend any such meetings
with such independent public accountants), all at the expense of the Lenders when no Event of Default exists, and at such reasonable times during normal business hours, upon reasonable
advance notice to the Company and no more than once per year; provided, however, that when an Event of Default exists the Administrative Agent or any Lender (or any of their
respective representatives or independent contractors) may do any of the foregoing at the expense of the Company at any time during normal business hours and without advance notice;
provided, further that notwithstanding anything to the contrary herein, none of the Borrowers or any Subsidiary shall be required to disclose, permit the inspection, examination or making
of copies of or taking abstracts from, or discuss any document, information, or other matter (A) that constitutes non-financial trade secrets or non-financial proprietary information of the
Company and its Subsidiaries and/or any of its customers and/or suppliers, (B) in respect of which disclosure to the Administrative Agent or any Lender (or any of their respective
representatives or agents) is prohibited by applicable Law, (C) that is subject to attorney-client or similar privilege or (D) in respect of which any Borrower or any Subsidiary owes
confidentiality obligations to any third party (it being understood that the Company or any of the Subsidiaries shall inform the Administrative Agent of the existence and nature of the
confidential records, documents or other information not being provided and, following a reasonable request from the Administrative Agent, use commercially reasonable efforts to
request consent from an applicable contractual counterparty to disclose such information (but shall not be required to incur any cost or expense or pay any consideration of any type to
such party in order to obtain such consent)).
7.11
Use of Proceeds.
Use the proceeds of the Credit Extensions (a) for general corporate purposes, (b) to refinance existing Indebtedness, (c) to finance acquisitions, (d) to repurchase common stock of
the Company, (e) for working capital and (f) for capital expenditures, in each case, of the Company and its Subsidiaries provided that in no event shall the proceeds of the Credit
Extensions be used in contravention of any Law or of any Loan Document.
Article VIII.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied (other than contingent indemnification
obligations for which no claim or demand has been made), or any Letter of Credit shall remain outstanding (other than any Letter of Credit that has been Cash Collateralized or with
respect to which other arrangements satisfactory to the L/C Issuer have been made), no Borrower shall nor shall it permit any of its Subsidiaries to, directly or indirectly:
8.01
Liens.
Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:
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(a)
Liens pursuant to any Loan Document;
(b)
Liens existing on the Third Amendment Effective Date and listed on Schedule 8.01 and any renewals or extensions thereof, provided that the scope of the
property covered thereby is not increased;
(c)
Liens for Taxes that are (i) not delinquent or (ii) being contested in good faith and by appropriate proceedings, if adequate reserves with respect thereto are
maintained on the books of the applicable Person in accordance with GAAP;
(d)
carriers,’ warehousemen’s, mechanics,’ materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business that are not overdue for a period
of more than thirty days or that are being contested in good faith and by appropriate proceedings, if adequate reserves with respect thereto are maintained on the books of the
applicable Person;
(e)
pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security legislation,
other than any Lien imposed by ERISA;
(f)
deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than bonds related to
judgments or litigation, which are covered in subsection (h) below), performance bonds and other obligations of a like nature incurred in the ordinary course of business;
(g)
easements, rights-of-way, restrictions and other similar encumbrances affecting real property that, in the aggregate, are not substantial in amount, and that do not
in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;
(h)
Liens securing judgments for the payment of money which do not constitute Events of Default hereunder;
(i)
Liens securing, or in respect of, Indebtedness in respect of capital leases, Synthetic Leases and purchase money obligations for fixed or capital assets (including,
but not limited to, any such Lien granted within 180 days of the acquisition of such fixed or capital asset); provided that (i) such Liens do not at any time encumber any property
other than the property financed by such Indebtedness and (ii) the Indebtedness secured thereby does not exceed the cost or fair market value, whichever is lower, of the property
being acquired on the date of acquisition;
(j)
Liens on property or assets of the Company or any Subsidiary granted in connection with Sale and Leaseback Transactions; provided that the aggregate
Attributable Principal Amount in connection with such Sale and Leaseback Transactions shall not at any time be in excess of $100,000,000;
(k)
(l)
Liens on property or assets of the Company or any Subsidiary granted in connection with Securitization Transactions;
Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;
(m)
licenses of intellectual property rights in the ordinary course of business;
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(n)
Liens on the property and assets of any Person to the extent such Liens are existing at the time such Person becomes a member of the Consolidated Group, and
any renewals, extensions or replacements thereof so long as the scope of the property covered thereby is not increased; provided such Liens are not created in contemplation
thereof and do not extend to any property or assets of any other member of the Consolidated Group;
(o)
Liens on property or assets of the Company and any Subsidiary granted in connection with environmental remediation or similar obligations with respect to such
property or assets not to exceed $100,000,000 in the aggregate;
(p)
Liens in favor of the United States or any state thereof, or any agency, instrumentality or political subdivision of any of the foregoing, to secure partial, progress,
advance or other payments or performance pursuant to the provisions of any contract or statute, to the extent not constituting Indebtedness;
(q)
precautionary filings of Uniform Commercial Code financing statements (or any applicable local law equivalent) in respect of operating leases or consignment of
goods;
(r)
with respect to any real property occupied, owned or leased by any Borrower or any of their Subsidiaries, (i) leases, subleases, tenancies, options, concession
agreements, rental agreements occupancy agreements, franchise agreements, access agreements and any other agreements, whether or not of record and whether now in existence
or hereafter entered into, of the real properties of any Borrower or any Subsidiary granted by such Person to third parties, in each case entered into in the ordinary course of such
Person’s business and so long as, to the extent such real properties are subject to Liens, such Liens do not materially interfere with the ordinary conduct of business of the
Borrowers or their Subsidiaries, taken as a whole, and do not materially impair the use of such property for its intended purposes;
(s)
Liens arising by operation of law under Article 4 of the Uniform Commercial Code (or any applicable local law equivalent) in connection with collection of items
provided for therein or under Article 2 of the Uniform Commercial Code (or such applicable local law equivalent) in favor of a reclaiming seller of goods or buyer of goods;
(t)
rights of setoff or bankers’ liens of banks or other financial institutions where Company or any of its Subsidiaries maintain deposits in the ordinary course of
business and which are within the general parameters customary in the banking industry;
(u)
Liens attaching solely to (i) cash earnest money deposits in connection with any letter of intent or purchase agreement and (ii) proceeds of an asset disposition
permitted hereunder that are held in escrow to secure obligations under the sale documentation relating to such disposition;
(v)
any leases, subleases, licenses or sublicenses granted to others in the ordinary course of business of the Company and its Subsidiaries which do not materially
interfere with the ordinary conduct of business of the Company and its Subsidiaries;
(w)
any laws, regulations or ordinances now or hereafter in effect (including, but not limited to, zoning, building and environmental protection) as to the use,
occupancy, subdivision or improvement of real property occupied, owned or leased the Company or any of its Subsidiaries adopted or imposed by any Governmental Authority;
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(x)
Liens of landlords under leases where the Company or any of its Subsidiaries is the tenant, securing performance by the tenant under the lease arising by statute
or under any lease or related contractual obligation entered into in the ordinary course of business;
(y)
(i) Liens that are customary contractual rights of setoff or netting relating to (A) the establishment of depositary relations with banks not granted in connection
with the issuance of Indebtedness, (B) pooled deposit or sweep accounts of the Company or any Subsidiary to permit satisfaction of overdraft or similar obligations or to secure
negative cash balances in local accounts of foreign Subsidiaries incurred in the ordinary course of business of the Company or any Subsidiary, (C) purchase orders and other
agreements entered into with customers of the Company or any Subsidiary in the ordinary course of business and (D) commodity trading or other brokerage accounts incurred in
the ordinary course of business, and (ii) Liens on the proceeds of any Indebtedness incurred in connection with any transaction permitted hereunder, which proceeds have been
deposited into an escrow account on customary terms to secure such Indebtedness pending the application of proceeds to finance such transaction;
(z)
Liens securing insurance premium financing arrangements; provided, that such Liens only encumber the insurance premiums, policies or dividends with respect
to the policies that were financed with the funds advanced under such arrangements;
(aa)
Liens on cash or cash equivalents arising in connection with the defeasance, discharge or redemption of Indebtedness;
(bb) Liens arising out of conditional sale, title retention, consignment, bailment or similar arrangements for the purchase, sale or shipment of goods entered into in the
ordinary course of business;
(cc) Liens (i) on cash advances or escrow deposits in favor of the seller of any property to be acquired by the Company or any Subsidiary to be applied against the
purchase price therefor or otherwise in connection with any escrow arrangements with respect thereto or in connection with any disposition permitted under Section 8.02 and (ii)
consisting of an agreement to dispose of any property in a disposition permitted under Section 8.02 solely to the extent such disposition, as the case may be, would have been
permitted on the date of the creation of such Lien; and
(dd) Liens other than those referred to in subparagraphs (a) through (cc) above, provided, however, that the aggregate principal amount of obligations secured by such
Liens plus the aggregate principal amount of unsecured Indebtedness of Subsidiaries of the Company outstanding pursuant to Section 8.07(g) does not exceed (i) as of any date
from and including May 11, 2020 through and including December 31, 2021, 24%, or (ii) as of any date thereafter, 30%, in each case, of Consolidated Net Tangible Assets as
appearing in the latest balance sheet delivered pursuant to Section 7.01.
8.02 Mergers, Dispositions, etc.
Merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction
or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) or any capital stock of any Subsidiary, except that:
(a)
Any member of the Consolidated Group may purchase and sell inventory in the ordinary course of business;
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(b)
If at the time thereof and immediately after giving effect thereto no Default or Event of Default shall have occurred and be continuing: (i) any Subsidiary or any
other Person may merge into, consolidate with or liquidate or dissolve into the Company or any of its Subsidiaries provided that, (A) if the Company is a party to such transaction,
the Company is the surviving corporation and (B) if a Borrower is a party to such transaction and is not concurrently terminated as a Borrower pursuant to Section 2.14(d), a
Borrower shall be the surviving entity, and (ii) any Subsidiary may merge into, consolidate with or liquidate or dissolve into any other Subsidiary in a transaction in which the
surviving entity is a Subsidiary and no Person other than the Company or a Subsidiary receives any consideration therefor (except in the case of a non-wholly-owned Subsidiary,
minority equity holders may receive their ratable share of consideration); provided that, if either Subsidiary is a Domestic Subsidiary, the surviving entity is a Domestic
Subsidiary and if either Subsidiary is a Borrower that is not concurrently terminated as a Borrower pursuant to Section 2.14(d), the surviving entity is a Borrower;
(c)
The Company may sell all or any portion of the capital stock of any Subsidiary for fair market value, as determined in good faith by the Company’s board of
directors; provided (i) such sale does not constitute a sale of all or substantially all of the Company’s assets, and (ii) if such sale involves the capital stock of a Borrower, the
Company or another Borrower shall agree in writing to assume the obligations of such Borrower under this Agreement; and
(d)
The Company may (i) transfer, or cause to be transferred, all or any portion of the capital stock of any wholly owned Subsidiary to another wholly owned
Subsidiary; provided, after giving effect thereto, no Domestic Borrower is a direct Subsidiary of a foreign Subsidiary, and (ii) sell any portion of the capital stock of any
Subsidiary (other than a Borrower) in connection with the establishment of a joint venture for the purpose of developing or continuing a product or business related to any of the
Company’s existing lines of business as of the date of this Agreement.
8.03
Change in Nature of Business.
Engage in any material line of business substantially different from those lines of business conducted by the Consolidated Group on the date hereof or any business similar,
complementary, ancillary, reasonably related or incidental thereto.
8.04
Transactions with Affiliates.
Enter into any transaction of any kind with any Affiliate of the Company, whether or not in the ordinary course of business, other than on fair and reasonable terms substantially
as favorable to the Company or such Subsidiary as would be obtainable by the Company or such Subsidiary at the time in a comparable arm’s length transaction with a Person other than
an Affiliate; provided that the foregoing restriction (a) shall not apply to transactions between or among Borrowers, (b) shall not restrict dividends or distributions on account of shares of
equity interests issued by Subsidiaries of the Company ratably to the holders thereof, (c) shall not apply to transactions between or among the members of the Consolidated Group and
their Affiliates that are necessary or required under applicable Law or by any Governmental Authority and (d) shall not apply to other transactions between or among any members of the
Consolidated Group that are not prohibited by this Agreement (other than this Section 8.04).
8.05
Use of Proceeds.
Use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the
meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose,
in each case in violation of, or for a purpose that violates Regulation T, U or X of the FRB.
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8.06
Financial Covenant.
Permit the Consolidated Leverage Ratio as of the end of any fiscal quarter of the Company to be greater than: (a) with respect to the fiscal quarter ending December 30, 2021,
4.00 to 1.0 and (b) with respect to the fiscal quarters ending thereafter, 3.50 to 1.0; provided, that, upon consummation of an Acquisition after March 31, 2022 where the consideration
includes cash proceeds from the issuance of Funded Debt in excess of $500,000,000, the otherwise applicable maximum Consolidated Leverage Ratio, at the election of the Company
(with prior written notice to the Administrative Agent), shall increase by 0.50:1.00 for four consecutive fiscal quarters beginning with the fiscal quarter in which such Acquisition occurs
(the “Adjustment Period”). After any such Acquisition that results in an Adjustment Period, there must be at least two fiscal quarters subsequent to the end of the Adjustment Period
before the Company shall be permitted to elect another Adjustment Period. The Company shall be permitted to request no more than two Adjustment Periods during the term of this
Agreement; provided, however, in connection with each extension of the Maturity Date pursuant to Section 2.15, the Company shall have the right to request an additional Adjustment
Period.
8.07
Subsidiary Indebtedness.
Permit any Subsidiary to create, incur, assume or suffer to exist any Indebtedness, except:
(a)
(b)
Indebtedness under the Loan Documents;
intercompany Indebtedness among the Company and its Subsidiaries or among Subsidiaries;
(c)
Indebtedness of any Person to the extent such Indebtedness is existing at the time such Person becomes a member of the Consolidated Group and, any
refinancings, replacements or extensions thereof so long as the amount of such Indebtedness, plus any accrued and unpaid interest, plus any reasonable penalty, premium or
defeasance costs and reasonable fees and expenses incurred in connection with such refinancings, replacements or extensions, is not increased at the time of such refinancing,
replacement or extension; provided such (i) Indebtedness is not created in contemplation thereof and (ii) the scope of obligors liable for such Indebtedness is not increased;
(d)
obligations (contingent or otherwise) existing or arising under any Swap Contract; provided that such obligations are (or were) entered into by such Subsidiary
for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Subsidiary, or changes
in the value of securities issued by such Person, and not for purposes of speculation or taking a “market view;”
(e)
Indebtedness in respect of capital leases, Synthetic Leases and purchase money obligations for fixed or capital assets;
(f)
to the extent constituting Indebtedness, obligations in respect of workers’ compensation claims, self-insurance obligations, performance bonds, surety, appeal or
similar bonds and completion guarantees provided in the ordinary course of business;
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(g)
other Indebtedness, provided that the aggregate outstanding principal amount of such Indebtedness shall not exceed the difference between (i)(A) as of any date
from and including May 11, 2020 through and including December 31, 2021, 24%, or (B) as of any date thereafter, 30%, in each case, of Consolidated Net Tangible Assets as
appearing in the latest balance sheet delivered pursuant to Section 7.01 minus (ii) the aggregate outstanding principal amount of Indebtedness of the Company secured by Liens
permitted by Section 8.01(dd); and
(h)
any guarantee given pursuant to section 8a of the German Act on Partial Retirement (Altersteilzeitgesetz) or section 7e of the Fourth Book of the German Social
Code (Sozialgesetzbuch IV).
8.08
Sanctions.
Directly, or knowingly indirectly, use any Credit Extension or the proceeds of any Credit Extension, or lend, contribute or otherwise make available such Credit Extension or the
proceeds of any Credit Extension to any Person, to fund any activities of or business with any Person, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of
Sanctions, or in any other manner that will result in a violation by any Person (including any Person participating in the transaction, whether as Lender, lead arranger, Administrative
Agent, L/C Issuer, Swing Line Lender, or otherwise) of Sanctions. Any provision of this Section 8.08 or Section 6.20 shall not apply to any Person if and to the extent that it would result
in a breach, by or in respect of that Person, of any applicable Blocking Law.
8.09
Anti-Corruption Laws.
Directly, or knowingly indirectly, use any Credit Extension or the proceeds of any Credit Extension for any purpose which would breach the United States Foreign Corrupt
Practices Act of 1977, the UK Bribery Act 2010 or other similar legislation in other jurisdictions that are applicable to the Company or its Subsidiaries.
9.01
Events of Default.
Any of the following shall constitute an Event of Default:
Article IX.
EVENTS OF DEFAULT AND REMEDIES
(a)
Non-Payment. Any Borrower fails to pay (i) when and as required to be paid herein, in the currency required hereunder, any amount of principal of any Loan or
any L/C Obligation, or (ii) within five Business Days after the same becomes due, any interest on any Loan or on any L/C Obligation, or any facility fee or other fee due
hereunder, or (iii) within five Business Days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or
(b)
Specific Covenants. Any Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 7.03, 7.05 or 7.11 or Article VIII; or
(c)
Other Defaults. Any Borrower fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan
Document on its part to be performed or observed and such failure continues for thirty days after the earlier to occur of notice thereof from the Administrative Agent or any
Responsible Officer of a Borrower having actual knowledge of such failure; or
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(d)
Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Company or any
other Borrower herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect
when made or deemed made; or
(e)
Cross-Default. (i) The Company or any Subsidiary (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal
amount (including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold Amount and the continuation of such failure
beyond any applicable grace or cure period, or (B) after giving effect to any applicable grace or cure period, fails to observe or perform any other agreement or condition relating
to any such Indebtedness or Guarantee or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default
or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such
Guarantee to become payable or cash collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such
Swap Contract) resulting from (A) any event of default under such Swap Contract as to which the Company or any Subsidiary is the Defaulting Party (as defined in such Swap
Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which the Company or any Subsidiary is an Affected Party (as so defined) and, in either
event, the Swap Termination Value owed by the Company or such Subsidiary as a result thereof is greater than the Threshold Amount and, in the case of any Termination Event
not arising out of a default by the Company or any Subsidiary, such Swap Termination Value has not been paid by the Company or such Subsidiary when due; or
(f)
Insolvency Proceedings, Etc. Any Borrower or any of its Subsidiaries (other than an Immaterial Subsidiary) institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or
similar officer is appointed without the application or consent of such Person and the appointment continues undismissed for sixty consecutive calendar days or an order or decree
approving or ordering such appointment shall continue unstayed for thirty consecutive calendar days; or any proceeding under any Debtor Relief Law in respect of any such
Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed for sixty consecutive calendar days, or an order or
decree approving or ordering such proceeding shall have been entered; or
(g)
Inability to Pay Debts; Attachment.
(i)
The Company or any Subsidiary (other than an Immaterial Subsidiary) becomes unable or admits in writing its inability or fails generally to pay its debts
as they become due; or
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(ii)
Any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person
and such process, if not fully bonded, continues undismissed for sixty consecutive calendar days, or an order or decree approving or ordering such process shall continue
unstayed for thirty calendar days; or
(h)
Judgments. There is entered against the Company or any Subsidiary (i) a final judgment or order for the payment of money in an aggregate amount exceeding the
Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage), or (ii) any one or more non-monetary final
judgments that have, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) there is a period of forty-five consecutive days during which a stay of enforcement of such judgment, by reason
of a pending appeal or otherwise, is not in effect; or
(i)
ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan that has resulted or would reasonably be expected to result in liability
of the Company under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) the Company
or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section
4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or
(j)
Invalidity of Loan Documents. Any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder
or as a result of the satisfaction in full of all the Obligations (other than contingent indemnification obligations for which no claim or demand has been made, ceases to be in full
force and effect; or any Borrower or any Subsidiary contests in any manner the validity or enforceability of any Loan Document; or any Borrower denies that it has any or further
liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan Document; or
(k)
Change of Control. There occurs any Change of Control.
9.02
Remedies Upon Event of Default.
If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the
following actions:
(a)
declare the Commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such
commitments and obligation shall be terminated;
(b)
declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under
any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the
Borrowers;
(c)
require that the Borrowers Cash Collateralize the L/C Obligations (in an amount equal to the Minimum Collateral Amount with respect thereto); and
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(d)
exercise on behalf of itself, the L/C Issuer and the Lenders all rights and remedies available to it, the L/C Issuer and the Lenders under the Loan Documents or
applicable law or equity;
provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to any Borrower under the Bankruptcy Code of the United States (or any other
applicable Debtor Relief Laws), the obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Company to Cash
Collateralize the L/C Obligations as aforesaid shall automatically become effective, in each case without further act of the Administrative Agent or any Lender.
9.03
Application of Funds.
After the exercise of remedies provided for in Section 9.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have
automatically been required to be Cash Collateralized as set forth in the proviso to Section 9.02), any amounts received on account of the Obligations shall, subject to the provisions of
Sections 2.16 and 2.17, be applied by the Administrative Agent in the following order:
First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to
the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to
the Lenders and the L/C Issuer (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuer and amounts payable under Article III), ratably
among them in proportion to the respective amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans and L/C Borrowings, ratably among
the Lenders and the L/C Issuer in proportion to the respective amounts described in this clause Third held by them;
Fourth, to (a) payment of that portion of the Obligations constituting unpaid principal of the Loans and L/C Borrowings and (b) Cash Collateralize that portion of L/C
Obligations comprised of the aggregate undrawn amount of Letters of Credit, ratably among the Lenders and the L/C Issuer in proportion to the respective amounts described in
this clause Fourth held by them; and
Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full (other than contingent indemnification obligations for which no claim or demand
has been made), to the Company or as otherwise required by Law.
Subject to Sections 2.03(c) and 2.16, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fourth above shall be applied to
satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such
remaining amount shall be applied to the other Obligations, if any, in the order set forth above.
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Article X.
ADMINISTRATIVE AGENT
10.01 Appointment and Authority.
Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan
Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and
the L/C Issuer, and no Borrower shall have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other
Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting
parties.
10.02 Rights as a Lender.
The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as
though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrowers or any Subsidiary or other Affiliate thereof as if such Person were not the
Administrative Agent hereunder and without any duty to account therefor to the Lenders.
10.03 Exculpatory Provisions.
The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be
administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:
(a)
shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;
(b)
shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated
hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be expressly provided for herein or in the other Loan Documents); provided that the Administrative Agent shall not be required to take any action that, in
its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance
of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a
Defaulting Lender in violation of any Debtor Relief Law; and
(c)
shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to any of the Borrowers or any of their respective Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of
its Affiliates in any capacity.
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The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.01 and
9.02) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given in writing to the Administrative Agent by the Company, a Lender or
the L/C Issuer.
The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the
performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article V or
elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
10.04 Reliance by Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the
proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, renewal
or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume that such condition is
satisfactory to such Lender or the L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or the L/C Issuer prior to the making of such
Loan or the issuance, extension, renewal or increase of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Company),
independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or
experts.
10.05 Delegation of Duties.
The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more
sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facility provided for herein as well as activities as Administrative Agent. The
Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and non-
appealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.
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10.06 Resignation of Administrative Agent.
(a)
The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuer and the Company. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with the Company, and, at all times other than during the existence of an Event of Default, with the
Company’s consent (such consent not to be unreasonably withheld), to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such
bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty days
after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the
retiring Administrative Agent may (but shall not be obligated to) on behalf of the Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting the qualifications
set forth above; provided that in no event shall any such successor Administrative Agent be a Defaulting Lender. Whether or not a successor has been appointed, such resignation
shall become effective in accordance with such notice on the Resignation Effective Date.
(b)
If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required Lenders may, to the extent
permitted by applicable Law, by notice in writing to the Company and such Person remove such Person as Administrative Agent and, in consultation with the Company and, at all
times other than during the existence of an Event of Default, with the Company’s consent (such consent not to be unreasonably withheld), appoint a successor. If no such
successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty days (or such earlier day as shall be agreed by the
Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.
(c)
With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (i) the retiring or removed Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on
behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such collateral security until such
time as a successor Administrative Agent is appointed) and (ii) except for any indemnity payments or other amounts then owed to the retiring or removed Administrative Agent,
all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the L/C Issuer
directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above in this Section. Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or
removed) Administrative Agent (other than as provided in Section 3.01(f) and other than any rights to indemnity payments or other amounts owed to the retiring or removed
Administrative Agent as of the Resignation Effective Date or the Removal Effective Date, as applicable), and the retiring or removed Administrative Agent shall be discharged
from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by
the Company to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Company and such successor. After
the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 11.04 shall
continue in effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them (i) while the retiring or removed Administrative Agent was acting as Administrative Agent and (ii) after such resignation or removal for as long as any of
them continues to act in any capacity hereunder or under the other Loan Documents, including (a)
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holding any collateral security on behalf of any of the Lenders and (b) in respect of any actions taken in connection with transferring the agency to any successor Administrative
Agent.
(d)
Any resignation or removal by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation and removal as an L/C
Issuer and Swing Line Lender. If Bank of America resigns or is removed as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of an L/C Issuer hereunder
with respect to all Letters of Credit issued by it outstanding as of the effective date of its resignation or removal as L/C Issuer and all L/C Obligations with respect thereto,
including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c). If Bank of America resigns
or is removed as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as
of the effective date of such resignation or removal, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line
Loans pursuant to Section 2.04(c). Upon the appointment by the Company of a successor L/C Issuer or Swing Line Lender hereunder (which successor shall in all cases be a
Lender other than a Defaulting Lender), and upon the acceptance of appointment by such successor, (i) such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring or removed L/C Issuer or Swing Line Lender, as applicable, (ii) the retiring or removed L/C Issuer and Swing Line Lender shall be
discharged from all of their respective duties and obligations hereunder or under the other Loan Documents and (iii) the successor L/C Issuer shall issue letters of credit in
substitution for the Letters of Credit issued by the retiring or removed L/C Issuer, if any, outstanding at the time of such succession or make other arrangements reasonably
satisfactory to the retiring or removed L/C Issuer to effectively assume the obligations of the retiring or removed L/C Issuer with respect to such Letters of Credit.
10.07 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender and the L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties
and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and the L/C Issuer also
acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan
Document or any related agreement or any document furnished hereunder or thereunder.
10.08 No Other Duties, Etc.
Anything herein to the contrary notwithstanding, none of the bookrunners, arrangers, syndication agents, documentation agents, co-agents, or book managers listed on the cover
page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent,
a Lender or the L/C Issuer hereunder.
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No bookrunner, arranger, syndication agent, documentation agent, co-agent or book manager shall have or deemed to have any fiduciary relationship with any Lender.
10.09 Administrative Agent May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any
Borrower, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether the Administrative Agent shall have made any demand on any Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:
(a)
to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuer and the Administrative
Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuer and the Administrative Agent and their
respective agents and counsel and all other amounts due the Lenders, the L/C Issuer and the Administrative Agent under Sections 2.03(h), 2.09 and 11.04) allowed in such judicial
proceeding; and
(b)
to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to
make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuer,
to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and
any other amounts due the Administrative Agent under Sections 2.09 and 11.04.
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the L/C Issuer any plan
of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or the L/C Issuer to authorize the Administrative Agent to vote in respect
of the claim of any Lender or the L/C Issuer in any such proceeding.
10.10 ERISA Matters.
(a) Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party
hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, BAS and each other lead arranger and their respective Affiliates, and not,
for the avoidance of doubt, to or for the benefit of any Borrower, that at least one of the following is and will be true:
(i) such Lender is not using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more Benefit Plans in
connection with the Loans, the Letters of Credit or the Commitments,
(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified
professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain
transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE
96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s
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entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this Agreement,
(iii) (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified
Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the
Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Commitments and this
Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of
Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the
Commitments and this Agreement, or
(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.
(b) In addition, unless subclause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has not provided another representation, warranty
and covenant as provided in subclause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party
hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative
Agent, BAS and each other lead arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of any Borrower, that:
(i) none of the Administrative Agent, BAS or any other lead arranger or any of their respective Affiliates is a fiduciary with respect to the assets of such Lender
(including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related to hereto
or thereto),
(ii) the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the
Loans, the Letters of Credit, the Commitments and this Agreement is independent (within the meaning of 29 CFR § 2510.3-21) and is a bank, an insurance carrier, an investment
adviser, a broker-dealer or other person that holds, or has under management or control, total assets of at least $50 million, in each case as described in 29 CFR § 2510.3-21(c)(1)
(i)(A)-(E),
(iii) the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the
Loans, the Letters of Credit, the Commitments and this Agreement is capable of evaluating investment risks independently, both in general and with regard to particular
transactions and investment strategies (including in respect of the Obligations),
(iv) the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the
Loans, the Letters of Credit, the Commitments and this Agreement is a fiduciary under ERISA or the Internal Revenue Code, or both, with respect to the Loans, the Letters of
Credit, the Commitments and this Agreement and is responsible for exercising independent judgment in evaluating the transactions hereunder, and
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(v) no fee or other compensation is being paid directly to the Administrative Agent, BAS or any other lead arranger or any their respective Affiliates for investment
advice (as opposed to other services) in connection with the Loans, the Letters of Credit, the Commitments or this Agreement.
(c) The Administrative Agent, BAS and each other lead arranger hereby informs the Lenders that each such Person is not undertaking to provide impartial investment advice, or
to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that
such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Commitments and this Agreement, (ii) may recognize a
gain if it extended the Loans, the Letters of Credit or the Commitments for an amount less than the amount being paid for an interest in the Loans, the Letters of Credit or the
Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including
structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees,
minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage
or other early termination fees or fees similar to the foregoing.
10.11 Recovery of Erroneous Payments.
Without limitation of any other provision in this Agreement, if at any time the Administrative Agent makes a payment hereunder in error to any Lender Party, whether or not in
respect of an Obligation due and owing by a Borrower at such time, where such payment is a Rescindable Amount, then in any such event, each Lender Party receiving a Rescindable
Amount severally agrees to repay to the Administrative Agent forthwith on demand the Rescindable Amount received by such Lender Party in Same Day Funds in the currency so
received, with interest thereon, for each day from and including the date such Rescindable Amount is received by it to but excluding the date of payment to the Administrative Agent, at
the applicable Overnight Rate from time to time in effect in the applicable currency. Each Lender Party irrevocably waives any and all defenses, including any “discharge for value”
(under which a creditor might otherwise claim a right to retain funds mistakenly paid by a third party in respect of a debt owed by another) or similar defense to its obligation to return
any Rescindable Amount. The Administrative Agent shall inform each Lender Party promptly upon determining that any payment made to such Lender Party comprised, in whole or in
part, a Rescindable Amount.
11.01 Amendments, Etc.
No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Company or any other Borrower therefrom,
shall be effective unless in writing signed by the Required Lenders and the Borrowers, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:
Article XI.
MISCELLANEOUS
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(a)
extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 9.02) without the written consent of such Lender
whose Commitment is being extended or increased (or reinstated), it being understood that a waiver of any condition precedent set forth in Section 5.02 or of an Event of Default
or a mandatory reduction in Commitments is not considered an increase in Commitments;
(b)
postpone any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to any Lender
hereunder or under any other Loan Document without the written consent of each Lender entitled to receive such payment;
(c)
reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or any fees or other amounts payable hereunder or under any other
Loan Document without the written consent of each Lender entitled to receive such amount; provided, however, that only the consent of the Required Lenders shall be necessary
to (i) amend the definition of “Default Rate” or to waive any obligation of any Borrower to pay interest at the Default Rate or (ii) to amend any financial covenant hereunder (or
any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or L/C Borrowing or to reduce any fee payable hereunder;
(d)
thereby;
change Section 9.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly affected
(e)
change any provision of this Section or the definition of “Required Lenders” without the written consent of each Lender;
(f)
amend Section 1.09 or the definition of “Alternative Currency” to add additional currencies without the consent of each Lender obligated to make Credit
Extensions in such currency;
(g)
change Section 2.14 in a manner that would alter the requirement that each of the Lenders obligated to make Credit Extensions to an Applicant Borrower approve
the addition thereof as a Designated Borrower, without the written consent of each such Lender; or
(h)
release the Company (subject to Section 8.02) from its obligations hereunder or consent to the assignment (subject to Sections 2.14(d) and 8.02) of any
Borrower’s rights and obligations hereunder without the written consent of each Lender;
and; provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights or duties
of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing
and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or
consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this
Agreement or any other Loan Document; (iv) each Lender is entitled to vote as such Lender sees fit on any bankruptcy reorganization plan that affects the Loans, and each Lender
acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code of the United States supersedes the unanimous consent provisions set forth herein; and (v) the Required
Lenders shall determine whether or not to allow a Borrower to use cash collateral in the context of a bankruptcy or insolvency proceeding and such determination shall be binding on all
of the Lenders.
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Notwithstanding anything to the contrary herein: (i) the Administrative Agent Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the
parties thereto; (ii) the Administrative Agent and the Company may make amendments contemplated by Sections 3.03(b) and 3.03(c); (iii) this Agreement may be amended with the
written consent of the Administrative Agent, the L/C Issuer, the Company and the Lenders obligated to make Credit Extensions in Alternative Currencies to amend the definition of
“Alternative Currency”, “Alternative Currency Daily Rate” or “Alternative Currency Term Rate” solely to add additional currency options and the applicable interest rate with respect
thereto, in each case solely to the extent permitted pursuant to Section 1.09; (iv) no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent
hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable
Lenders other than Defaulting Lenders), except that (A) the Commitment of such Defaulting Lender may not be increased or extended without the consent of such Lender and (B) any
waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects such Defaulting Lender disproportionately adversely relative to
other affected Lenders shall require the consent of such Defaulting Lender; (v) the Administrative Agent and the Company may amend, modify or supplement this Agreement or any
other Loan Document to cure or correct administrative errors or omissions, any ambiguity, omission, defect or inconsistency or to effect administrative changes, and such amendment
shall become effective without any further consent of any other party to such Loan Document so long as (A) such amendment, modification or supplement does not adversely affect the
rights of any Lender or other holder of Obligations in any material respect and (B) the Lenders shall have received at least five Business Days’ prior written notice thereof and the
Administrative Agent shall not have received, within five Business Days of the date of such notice to the Lenders, a written notice from the Required Lenders stating that the Required
Lenders object to such amendment; (vi) this Agreement may be amended with the written consent of the Borrowers, the Administrative Agent and the Lenders increasing their
Commitments solely to effectuate any increase in the Aggregate Commitments pursuant to Section 2.01(b) and (vii) in order to implement any Incremental Term Facility in accordance
with Section 2.01(b), this Agreement may be amended for such purpose (but solely to the extent necessary to implement such Incremental Term Facility and otherwise in accordance with
Section 2.01(b)) by the Borrowers, the Administrative Agent and each Lender providing a portion of such Incremental Term Facility.
11.02 Notices; Effectiveness; Electronic Communication.
(a)
Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b)
below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered
mail or sent by facsimile as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone
number, as follows:
(i)
if to the Borrowers, the Administrative Agent, the L/C Issuer or the Swing Line Lender, to the address, facsimile number, electronic mail address or
telephone number specified for such Person on Schedule 11.02; and
(ii)
if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified in its Administrative Questionnaire
(including, as appropriate, notices delivered solely to the Person designated by a Lender on its Administrative Questionnaire then in effect for the delivery of notices that
may contain material non-public information relating to the Borrower).
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Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and
other communications sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next Business Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided
in subsection (b) below, shall be effective as provided in such subsection (b).
(b)
Electronic Communications. Notices and other communications to the Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic
communication (including e-mail, FpML messaging and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing
shall not apply to notices to any Lender or the L/C Issuer pursuant to Article II if such Lender or the L/C Issuer, as applicable, has notified the Administrative Agent that it is
incapable of receiving notices under such Article by electronic communication. The Administrative Agent, the Swing Line Lender, the L/C Issuer or the Company each may, in its
discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such
procedures may be limited to particular notices or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement) and (ii) notices or
communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii), if such notice, email or
other communication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient.
(c)
The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT
THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY
FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING
ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM
VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no
event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to any Borrower, the L/C Issuer, any Lender or any other
Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Borrower’s or the Administrative Agent’s
transmission of Borrower Materials or any other information through the Internet, telecommunications, electronic or other information transmission systems, except to the extent
that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a judgment to have resulted from the gross negligence or willful
misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to any Borrower, any Lender or any other Person for indirect,
special, incidental, consequential or punitive damages (as opposed to direct or actual damages).
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(d)
Change of Address, Etc. Each of the Borrowers, the Administrative Agent, the L/C Issuer and the Swing Line Lender may change its address, facsimile or
telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, facsimile or telephone number
for notices and other communications hereunder by notice to the Company, the Administrative Agent, the L/C Issuer and the Swing Line Lender. In addition, each Lender agrees
to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, facsimile
number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender
agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content
declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable Law,
including United States Federal and state securities Laws, to make reference to Borrower Materials that are not made available through the “Public Side Information” portion of
the Platform and that may contain material non-public information with respect to any Borrower or its securities for purposes of United States Federal or state securities laws.
(e)
Reliance by Administrative Agent, L/C Issuer and Lenders. The Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any
notices (including telephonic notices, Committed Loan Notices, Letter of Credit Applications and Swing Line Loan Notices) purportedly given by or on behalf of any Borrower
even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation thereof. The Company shall indemnify the Administrative Agent, the L/C Issuer, each Lender and the
Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of any
Borrower, except to the extent that such losses, costs, expenses or liabilities are determined by a court of competent jurisdiction by a final and nonappealable judgment to have
resulted from the bad faith, gross negligence or willful misconduct of, or material breach of this Agreement or any other Loan Document by, the Administrative Agent, the L/C
Issuer, such Lender or such Related Party. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative
Agent, and each of the parties hereto hereby consents to such recording.
11.03 No Waiver; Cumulative Remedies; Enforcement.
No failure by any Lender, the L/C Issuer or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder
or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under any other Loan
Document (including the imposition of the Default Rate) preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan
Documents against the Borrowers or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and
maintained exclusively by, the Administrative Agent in accordance with Section 9.02 for the benefit of all the Lenders and the L/C Issuer; provided, however, that the foregoing shall not
prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and
under the other Loan Documents, (b) the L/C Issuer or the Swing Line Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as L/C Issuer or
Swing Line Lender, as the case may be) hereunder and under the other Loan Documents, (c) any Lender from
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exercising setoff rights in accordance with Section 11.09 (subject to the terms of Section 2.13), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own
behalf during the pendency of a proceeding relative to any Borrower under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative
Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 9.02 and (ii)
in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.13, any Lender may, with the consent of the Required Lenders, enforce any
rights and remedies available to it and as authorized by the Required Lenders.
11.04 Expenses; Indemnity; Damage Waiver.
(a)
Costs and Expenses. The Company shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the
reasonable fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication of the credit facility provided for herein, the preparation,
negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or
thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the L/C Issuer in
connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the
Administrative Agent, any Lender or the L/C Issuer (including the fees, charges and disbursements of any counsel for the Administrative Agent, any Lender or the L/C Issuer), in
connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in
connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in
respect of such Loans or Letters of Credit; provided that pursuant to this clause (iii), the Company shall not be required to reimburse such fees, charges and disbursements of more
than one counsel to the Administrative Agent, the L/C Issuer and all the Lenders, taken as a whole, and if necessary, one local domestic or foreign counsel in any relevant
domestic or foreign jurisdiction, to the Administrative Agent, the L/C Issuer and the Lenders, taken as a whole, unless the representation of one or more Lenders by such counsel
would be inappropriate due to the existence of an actual or potential conflict of interest, in which case, upon prior written notice to the Company, the Company shall also be
required to reimburse the reasonable fees, charges and disbursements of one additional counsel to such affected Lenders in each relevant jurisdiction.
(b)
Indemnification by the Borrowers. The Company shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the L/C Issuer, and
each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses (including the reasonable fees, charges and disbursements of one counsel to the Indemnitees, taken as a whole, and if necessary, one
local domestic or foreign counsel in any relevant domestic or foreign jurisdiction, to the Indemnitees, taken as a whole, unless the representation of one or more Indemnitees by
such counsel would be inappropriate due to the existence of an actual or potential conflict of interest, in which case, upon prior written notice to the Company, the Company shall
also be required to reimburse the reasonable fees, charges and disbursements of one additional counsel to such affected Indemnitees in each relevant jurisdiction), actually
incurred by any Indemnitee or asserted against any Indemnitee by any Person (including any Borrower) arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent
thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents, (ii) any Loan or Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand
do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on
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or from any property owned or operated by the Company or any of its Subsidiaries, or any Environmental Liability related in any way to the Company or any of its Subsidiaries,
or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought
by a third party or by the Company or any other Borrower, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by a final and
nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee or any of its Related Indemnitees, (y) result from a claim
brought by the Company or any other Borrower against an Indemnitee for material breach of such Indemnitee’s (or any of its Related Indemnitee’s) obligations hereunder or
under any other Loan Document, if the Company or such other Borrower has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction or (z) arise solely from a dispute among the Indemnitees (except when and to the extent that one of the Indemnitees party to such dispute was acting in its
capacity or in fulfilling its role as Administrative Agent, lead arranger, L/C Issuer, Swing Line Lender or any similar role under this Agreement or any other Loan Document) that
does not involve any act or omission of the Company or any of its Affiliates. The Company shall not be liable for any settlement entered into by an Indemnitee without its written
consent (such consent shall not be unreasonably withheld, delayed or conditioned), but if settled with the Company’s written consent, or if there is a final and nonappealable
judgment by a court of competent jurisdiction in any such claim, litigation, investigation or proceeding, the Company agrees to indemnify and hold harmless each Indemnitee in
the manner and to the extent set forth above; provided that the Company shall be deemed to have consented to any such settlement unless the Company shall object thereto by
written notice to the applicable Indemnitee within ten Business Days after having received written notice thereof. Without limiting the provisions of Section 3.01(c), this Section
11.04(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.
(c)
Reimbursement by Lenders. To the extent that the Company for any reason fails to indefeasibly pay any amount required under subsection (a) or (b) of this
Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the L/C Issuer, the Swing Line Lender or any Related Party of any of the foregoing, but without
affecting the Company’s obligations to make such payments, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the L/C Issuer, the Swing
Line Lender or such Related Party, as the case may be, such Lender’s Pro Rata Share (determined as of the time that the applicable unreimbursed expense or indemnity payment
is sought based on each Lender’s share of the outstanding Loans, unfunded Commitments and participation interests in Swing Line Loans and L/C Obligations of all Lenders at
such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender), such payment to be made severally among them based on
such Lenders’ Pro Rata Share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought); provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), the Swing
Line Lender or the L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), the Swing
Line Lender or L/C Issuer in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d).
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(d)
Waiver of Consequential Damages, Etc. Without limiting the Company’s indemnification obligations above, to the fullest extent permitted by applicable Law, no
party hereto shall assert, and each other party hereto hereby waives, any claim against any other party hereto (or any Indemnitee or any Related Party), on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other
Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds
thereof (other than in respect of any such damages incurred or paid by an Indemnitee to a third party and to which such Indemnitee is otherwise entitled to indemnification as
provided above). No Indemnitee shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended
recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents
or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence, bad faith or willful misconduct of such Indemnitee
(or its Related Indemnitees) as determined by a final and nonappealable judgment of a court of competent jurisdiction.
(e)
Payments. All amounts due under this Section shall be payable not later than ten Business Days after written demand therefor.
(f)
Survival. The agreements in this Section and the indemnity provisions of Section 11.02(e) shall survive the resignation of the Administrative Agent, the L/C
Issuer and the Swing Line Lender, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other
Obligations.
11.05 Concerning Joint and Several Liability of the Domestic Borrowers.
(a)
Each Domestic Borrower is accepting joint and several liability under this Section 11.05 in consideration of the financial accommodation to be provided by the
Lenders and the L/C Issuer under this Agreement, for the mutual benefit, directly and indirectly, of each Domestic Borrower and in consideration of the undertakings of each
Domestic Borrower to accept joint and several liability for the Obligations of each of the other Domestic Borrowers.
(b)
Each Domestic Borrower jointly and severally hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtor, joint and several
liability with the other Domestic Borrowers with respect to the payment and performance of all of the Obligations of the Domestic Borrowers arising under this Agreement and
the other Loan Documents, it being the intention of the parties hereto that all the Obligations of the Domestic Borrowers shall be the joint and several obligations of each of the
Domestic Borrowers without preferences or distinction among them.
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(c)
If and to the extent that a Domestic Borrower shall fail to make any payment with respect to any of the Obligations of the Domestic Borrowers hereunder as and
when due or to perform any of such Obligations in accordance with the terms thereof, then in each such event, the other Domestic Borrowers will make such payment with
respect to, or perform, such Obligation.
(d)
The obligations of each Domestic Borrower under the provisions of this Section 11.05 constitute full recourse obligations of such Domestic Borrower,
enforceable against it to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of this Agreement or any other circumstances
whatsoever.
(e)
Except as otherwise expressly provided herein, each Domestic Borrower hereby waives notice of acceptance of its joint and several liability, notice of occurrence
of any Default or Event of Default (except to the extent notice is expressly required to be given pursuant to the terms of this Agreement), or of any demand for any payment under
this Agreement, notice of any action at any time taken or omitted by the Administrative Agent, the L/C Issuer or the Lenders under or in respect of any of the Obligations
hereunder, any requirement of diligence and, generally, all demands, notices and other formalities of every kind in connection with this Agreement. Each Domestic Borrower
hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Obligations hereunder, the acceptance of any partial payment
thereon, any waiver, consent or other action or acquiescence by the Administrative Agent, the Lenders or the L/C Issuer at any time or times in respect of any default by any
Domestic Borrower in the performance or satisfaction of any term, covenant, condition or provision of this Agreement, any and all other indulgences whatsoever by the
Administrative Agent, the Lenders or the L/C Issuer in respect of any of the Obligations hereunder, and the taking, addition, substitution or release, in whole or in part, at any time
or times, of any security for any of such Obligations or the addition, substitution or release, in whole or in part, of any Domestic Borrower. Without limiting the generality of the
foregoing, each Domestic Borrower assents to any other action or delay in acting or any failure to act on the part of the Administrative Agent, the L/C Issuer or the Lenders,
including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy or to comply fully with applicable laws or regulations thereunder which
might, but for the provisions of this Section 11.05, afford grounds for terminating, discharging or relieving such Domestic Borrower, in whole or in part, from any of its
obligations under this Section 11.05, it being the intention of each Domestic Borrower that, so long as any of the Obligations hereunder remain unsatisfied (other than contingent
indemnification obligations for which no claim or demand has been made), the obligations of such Domestic Borrower under this Section 11.05 shall not be discharged except by
performance and then only to the extent of such performance. The obligations of each Domestic Borrower under this Section 11.05 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any reconstruction or similar proceeding with
respect to any Domestic Borrower, the Administrative Agent, the L/C Issuer or the Lenders. The joint and several liability of the Domestic Borrowers under this Section 11.05
shall continue in full force and effect notwithstanding any absorption, merger, amalgamation or any other change whatsoever in the name, membership, constitution or place of
formation of any Domestic Borrower, the Administrative Agent, the L/C Issuer or the Lenders.
(f)
The provisions of this Section 11.05 are made for the benefit of the Administrative Agent, the L/C Issuer and the Lenders and their respective successors and
permitted assigns, and may be enforced by any such Person from time to time against any of the Domestic Borrowers as often as occasion therefore may arise and without
requirement on the part of the Administrative Agent, the L/C Issuer any Lender first to marshal any of its claims or to exercise any of its rights against any other Domestic
Borrower or to exhaust any remedies available to it against any other Domestic Borrower or to resort to any other source or means of obtaining payment of any of the Obligations
or to elect any other remedy. The provisions of this Section 11.05 shall remain in effect until all the Obligations hereunder shall have been paid in full
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or otherwise fully satisfied. If at any time, any payment, or any part thereof, made in respect of any of the Obligations, is rescinded or must otherwise be restored or returned by
the Administrative Agent, the L/C Issuer the Lenders upon the insolvency, bankruptcy or reorganization of any of the Domestic Borrowers, or otherwise, the provisions of this
Section 11.05 will forthwith be reinstated and in effect as though such payment had not been made.
(g)
Notwithstanding any provision to the contrary contained herein or in any other of the Loan Documents, the obligations of each Domestic Borrower under this
Section 11.05 shall be limited to an aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance under Section 548 of the
Bankruptcy Code of the United States or any comparable provisions of any applicable Debtor Relief Law.
(h)
Notwithstanding any provision to the contrary contained herein or in any other of the Loan Documents, the Obligations of the Non-Domestic Borrowers are
several and not joint, and no Non-Domestic Borrower shall be deemed a guarantor or surety of any Obligation of any Domestic Borrower or the Company.
11.06 Payments Set Aside.
To the extent that any payment by or on behalf of any Borrower is made to the Administrative Agent, the L/C Issuer or any Lender, or the Administrative Agent, the L/C Issuer or
any Lender exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof (or the Dollar Equivalent amount thereof) is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, the L/C Issuer or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred,
and (b) each Lender and the L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or
paid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the applicable Overnight Rate from
time to time in effect, in the applicable currency of such recovery or payment. The obligations of the Lenders and the L/C Issuer under clause (b) of the preceding sentence shall survive
the payment in full of the Obligations and the termination of this Agreement.
11.07 Successors and Assigns.
(a)
Successors and Assigns Generally. The provisions of this Agreement and the other Loan Documents shall be binding upon and inure to the benefit of the parties
hereto and thereto and their respective successors and assigns permitted hereby, except that, subject to Section 2.14(d) and 8.02, no Borrower may assign or otherwise transfer any
of its rights or obligations hereunder or thereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer
any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance
with the provisions of subsection (d) of this Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section (and
any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the
extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim under
or by reason of this Agreement.
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(b)
Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement and the
other Loan Documents (including all or a portion of its Commitment and the Loans (including for purposes of this subsection (b), participations in L/C Obligations and in Swing
Line Loans) at the time owing to it); provided that any such assignment shall be subject to the following conditions:
(i)
Minimum Amounts.
(A)
in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and the related Loans at the time owing to it
or contemporaneous assignments to related Approved Funds that equal at least the amount specified in subsection (b)(i)(B) of this Section in the aggregate or in
the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B)
in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such
assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade
Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000 unless each of the Administrative Agent and, so
long as no Event of Default has occurred and is continuing, the Company otherwise consents (each such consent not to be unreasonably withheld or delayed).
(ii)
Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s Loans and
Commitments, and rights and obligations with respect thereto, assigned, except that this clause (ii) shall not apply to the Swing Line Lender’s rights and obligations in
respect of Swing Line Loans;
(iii)
Required Consents. No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:
(A)
the consent of the Company (such consent not to be unreasonably withheld or delayed provided that it shall be reasonable for the Company to
withhold consent if such Person does not provide to the Company the information required under Section 11.15) shall be required unless (1) an Event of Default
has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, and Affiliate of a Lender or an Approved Fund;
(B)
the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required if such assignment is to a
Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender;
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(C)
the consent of the L/C Issuer (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the
obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding); and
(D)
the consent of the Swing Line Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment.
(iv)
Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee in the amount of $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such
processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.
(v)
No Assignment to Certain Persons. No such assignment shall be made to (A) the Company or any of the Company’s Affiliates or Subsidiaries, (B) any
Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this
clause (B), or (C) a natural person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural person).
(vi)
No Assignment Resulting in Additional Indemnified Taxes, etc. Without the written consent of the Company, no such assignment shall be made to any
Person that, on the effective date of such assignment, through its Lending Offices, (A) is not capable of lending to the Borrowers without the imposition of any additional
Taxes or Mandatory Costs that would require indemnification payments by any of the Borrowers under this Agreement or (B) is not capable of lending in the Alternative
Currencies or at the applicable interest rates.
(vii)
Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall
be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the
Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of
participations or subparticipations, or other compensating actions, including funding, with the consent of the Company and the Administrative Agent, the applicable pro
rata share of Committed Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably
consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, the L/C Issuer or any Lender hereunder
(and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Committed Loans and participations in Letters of Credit and Swing
Line Loans in accordance with its Pro Rata Share. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender
hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be
a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment
and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations
of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and
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Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the
benefits of Sections 3.01, 3.04, 3.05, and 11.04 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent
otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s
having been a Defaulting Lender. Upon request, each Borrower (at its expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights
or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with subsection (d) of this Section.
(c)
Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrowers (and such agency being solely for tax purposes), shall maintain at
the Administrative Agent’s Office located in the United States a copy of each Assignment and Assumption delivered to it (or the equivalent thereof in electronic form) and a
register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans and L/C Obligations
owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrowers, the
Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by each of the Borrowers and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
(d)
Participations. Any Lender may at any time, without the consent of, or notice to, any Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural person) or the Company or any of
the Company’s Affiliates or Subsidiaries or a Defaulting Lender) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that
(i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrowers, the Administrative Agent, the L/C Issuer and the Lenders shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 11.04(c) without regard to the
existence of any participation.
Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and
to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 11.01 that affects such Participant. Each
Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section (it being understood that the documentation required under Section 11.15 shall be delivered to the Lender who sells the
participation) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section; provided that such Participant (A)
agrees to be subject to the provisions of Sections 3.06 and 11.16 as if it were an assignee under subsection (b) of this Section and (B) shall not be entitled to receive any greater
payment under Sections 3.01 or 3.04, with respect to any participation, than the Lender from whom it acquired the applicable participation would have been entitled to receive,
unless the Company consented to the applicable participation. Each Lender that sells a participation agrees, at the Company’s request and expense, to use reasonable efforts to
cooperate with the Company to effectuate the provisions of Section 3.06 with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to
the benefits of Section 11.09 as though it were a Lender;
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provided such Participant agrees to be subject to Section 2.13 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-
fiduciary agent of the Company, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each
Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit
or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or
other obligation is in registered form under Section 5f.103-1(c) of the Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and
such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any
notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant
Register.
(e)
Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note,
if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or other central banking authority in other
applicable jurisdictions; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.
(f)
Assignments to Foreign Lenders. At the time of each assignment pursuant to Section 11.07(b) to a Foreign Lender that is not already a Lender hereunder, the
assignee shall provide to the Administrative Agent and to the Company certification as to exemption (or reduction) for deduction or withholding of Taxes in accordance with
Section 11.15 and shall be subject to the provisions thereof.
(g)
Resignation as L/C Issuer or Swing Line Lender after Assignment. Notwithstanding anything to the contrary contained herein, if at any time a Lender assigns all
of its Commitment and Loans pursuant to subsection (b) above, such Lender may, (i) upon thirty days’ notice to the Company and the Lenders, resign as L/C Issuer and/or (ii)
upon thirty days’ notice to the Company, resign as Swing Line Lender. In the event of any such resignation as L/C Issuer or Swing Line Lender, the Company shall be entitled to
appoint from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided, however, that no failure by the Company to appoint any such successor shall
affect the resignation of such Lender as L/C Issuer or Swing Line Lender, as the case may be. If a Lender resigns as L/C Issuer, it shall retain all the rights, powers, privileges and
duties of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If Bank of America
resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to
Section 2.04(c). Upon the appointment of a successor L/C Issuer and/or Swing Line Lender, (a) such successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and (b) the successor L/C Issuer shall issue letters of credit in substitution for the Letters
of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to the resigning L/C Issuer to effectively assume the obligations of such
resigning L/C Issuer with respect to such Letters of Credit.
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11.08 Confidentiality.
Each of the Administrative Agent, the L/C Issuer and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be
disclosed (a) to its Affiliates, its auditors and its and its Affiliates’ respective Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information confidential); (b) to the extent required or requested by any regulatory authority; (c) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process; (d) to any other party to this Agreement; (e) in connection with the exercise of any remedies hereunder or
any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder; (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this
Agreement or to any Eligible Assignee invited to become a Lender pursuant to Section 2.01(b), (ii) any direct or indirect contractual counterparty or prospective party (or its Related
Parties) to any swap, derivative or other transaction relating to obligations of the Borrowers or (iii) any credit insurance provider relating to the Borrowers and their obligations; (g) with
the consent of the Company; (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the
Administrative Agent, the L/C Issuer or any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than the Company; (i) to the National Association
of Insurance Commissioners or any other similar organization or any nationally recognized rating agency that requires access to information about a Lender’s or its Affiliates’ investment
portfolio in connection with ratings issued with respect to such Lender or its Affiliates; or (j) on a confidential basis to (i) any rating agency in connection with rating any Borrower or its
Subsidiaries or the credit facilities provided hereunder or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers or other
market identifiers with respect to the credit facilities provided hereunder. In addition, the Administrative Agent, the L/C Issuer and the Lenders may disclose the existence of this
Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry, and service providers to the Administrative Agent, the L/C
Issuer and the Lenders in connection with the administration and management of this Agreement, the other Loan Documents, the Commitments, and the Credit Extensions. For the
purposes of this Agreement, “Information” means all information received from any Borrower or any Subsidiary relating to any Borrower, any Subsidiary or its business, other than any
such information that is available to the Administrative Agent, the L/C Issuer or any Lender on a nonconfidential basis prior to disclosure by any Borrower or any Subsidiary; provided
that, in the case of information received from a Borrower or a Subsidiary after the date hereof, such information is clearly identified in writing at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
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Each of the Administrative Agent, the L/C Issuer and the Lenders acknowledges that (a) the Information may include material non-public information concerning the Company or
a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public
information in accordance with applicable Law, including United States Federal and state securities Laws.
11.09 Set-off.
In addition to any rights and remedies of the Lenders and the L/C Issuer provided by law, upon the occurrence and during the continuance of any Event of Default, each Lender,
the L/C Issuer and any Affiliate of any Lender or the L/C Issuer is authorized at any time and from time to time, without prior notice to the Company or any other Borrower, any such
notice being waived by the Company (on its own behalf and on behalf of each Borrower) to the fullest extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held by, and other Indebtedness at any time owing by, such Lender, the L/C Issuer or such Affiliate to or for the credit or the
account of the respective Borrowers against any and all Obligations owing to such Lender, the L/C Issuer or such Affiliate hereunder or under any other Loan Document, now or hereafter
existing, irrespective of whether or not the Administrative Agent or such Lender shall have made demand under this Agreement or any other Loan Document and although such
Obligations may be contingent or unmatured or owed to a branch or office or Affiliate of such Lender or the L/C Issuer or denominated in a currency different from the branch or office or
Affiliate holding such deposit or obligated on such indebtedness; provided, that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off
shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.17 and, pending such payment, shall be segregated by
such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the L/C Issuer and the Lenders, and (y) the Defaulting Lender shall
provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.
Each Lender and the L/C Issuer agrees promptly to notify the Company and the Administrative Agent after any such set-off and application made by such Lender; provided, however, that
the failure to give such notice shall not affect the validity of such set-off and application.
11.10
Interest Rate Limitation.
Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate
of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Company. In determining whether the interest contracted for,
charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that
is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or
unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.
11.11 Counterparts.
This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken
together shall constitute a single contract, and this has the same effect as if the signature on the counterparts were on a single copy of this agreement.
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11.12
Integration; Effectiveness.
This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes
all prior agreements, written or oral, on such subject matter. In the event of any conflict between the provisions of this Agreement and those of any other Loan Document, the provisions
of this Agreement shall control; provided that the inclusion of supplemental rights or remedies in favor of the Administrative Agent, the L/C Issuer or the Lenders in any other Loan
Document shall not be deemed a conflict with this Agreement. Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be construed neither
against nor in favor of any party, but rather in accordance with the fair meaning thereof. Except as provided in Section 5.01, this Agreement shall become effective when it shall have
been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other
parties hereto.
11.13 Survival of Representations and Warranties.
All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless
of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or
knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or
unsatisfied (other than contingent indemnification obligations for which no claim or demand has been made) or any Letter of Credit shall remain outstanding.
11.14 Severability.
If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining
provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity
of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section
11.14, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by
the Administrative Agent, the L/C Issuer or the Swing Line Lender, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.
11.15 Tax Forms.
(a)
Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the
Administrative Agent and the applicable Borrower, at the time or times reasonably requested by the Administrative Agent or the applicable Borrower and at the time or times
required by applicable Law, such properly completed and executed documentation reasonably requested by the Administrative Agent or the applicable Borrower or required by
applicable Law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the
Administrative Agent or the applicable Borrower, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Administrative Agent or
the applicable Borrower as will enable the Administrative Agent or the applicable Borrower to determine whether or not such Lender is subject to backup withholding or
information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation
(other than such documentation set forth in Sections
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11.15(a)(i) through (iv) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any
material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender. Without limiting the generality of the foregoing, in the
event that the applicable Borrower is a “United States person” within the meaning of Section 7701(a)(30) of the Internal Revenue Code (“U.S. Person”), or is the Belgian
Borrower, as the case may be:
(i)
Each Lender that is a U.S. Person shall deliver to the Administrative Agent and the Company on or prior to the date on which such Lender becomes a
Lender under this Agreement (and from time to time thereafter upon reasonable request of the Administrative Agent or the Company) two duly signed completed copies
of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax.
(ii)
With respect to the Loan Obligations, each Foreign Lender (with respect to an applicable Domestic Borrower) shall, to the extent it is legally entitled to
do so, deliver to the Administrative Agent and to the Company (in such number of copies as shall be requested by the Administrative Agent or the Company), on or prior
to the date of its execution and delivery of this Agreement (or upon accepting an assignment of an interest herein) and from time to time thereafter upon the reasonable
request of the Administrative Agent or the Company, duly signed completed copies of either IRS Form W-8BEN-E (or W-8BEN, as applicable) or any successor thereto
(relating to such Foreign Lender and entitling it to an exemption from, or reduction of, withholding tax on all payments to be made to such Foreign Lender by any
Domestic Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto (relating to all payments to be made to such Foreign Lender by any
Domestic Borrower pursuant to this Agreement) or such other evidence that such Foreign Lender is entitled to an exemption from, or reduction of, U.S. withholding tax
pursuant to Sections 871(h) and 881(c) of the Internal Revenue Code. Thereafter and from time to time, each such Foreign Lender shall (A) promptly submit to the
Administrative Agent and to the Company such additional duly completed and signed copies of one of such forms (or such successor forms as shall be adopted from time
to time by the relevant United States taxing authorities) as may then be available under then current United States laws and regulations to avoid, or such evidence as is
satisfactory to the Company and the Administrative Agent of any available exemption from, United States withholding taxes in respect of all payments to be made to such
Foreign Lender by any Domestic Borrower pursuant to this Agreement, (B) promptly notify the Administrative Agent and the Company of any change in circumstances
that would modify or render invalid any claimed exemption, and (C) take such steps as shall not be materially disadvantageous to it, in the good faith judgment of such
Lender, and as may be reasonably requested in writing by the Company (including filing any certificate or document or the re-designation of its Lending Office) to avoid
any requirement of applicable Laws that the applicable Domestic Borrower make any deduction or withholding for Taxes from amounts payable to such Foreign Lender
or to reduce the amount of any such deduction or withholding to the greatest extent possible. To the extent such Foreign Lender is not the beneficial owner of any portion
of any sums paid or payable to such Lender under any of the Loan Documents, such Lender shall, to the extent it is legally entitled to do so, deliver to the Administrative
Agent and to the Company on the date when such Foreign Lender ceases to act for its own account with respect to any portion of any such sums paid or payable, and at
such other times as may be necessary in the determination of the Administrative Agent or the Company (in the reasonable exercise of their respective discretion) (in such
number of copies as shall be requested by the Administrative Agent or the Company), (A) duly signed completed copies of the forms or statements required to be
provided by such Lender as set forth above, to establish the portion of any such sums paid or payable with respect to which such Lender is the beneficial owner that is not
subject to, or subject to a reduced rate of, U.S. withholding tax, and (B) duly signed completed copies of IRS Form W-8IMY (or any successor thereto), together with IRS
Form W-8 ECI, IRS Form W-8BEN-E (or W-8BEN, as applicable), IRS Form W-9, evidence that the beneficial owner is entitled to an exemption from U.S. withholding
tax
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under Sections 871(h) and 881(c) of the Internal Revenue Code, other certification documents from each beneficial owner, as applicable, and any other certificate or
statement of exemption required under the Internal Revenue Code.
(iii) With respect to the Credit Extensions to the Belgian Borrower, each Foreign Lender (with respect to the Belgian Borrower) shall, as reasonably requested
by the Administrative Agent or the Belgian Borrower, deliver to the Administrative Agent and to the Belgian Borrower (in such number of copies as shall be requested by
the Administrative Agent or the Belgian Borrower) on or prior to the date of its making such Loan (or upon accepting an assignment of an interest therein), such forms
and other documentation which are required by any relevant taxing authorities under the Laws of Belgium duly executed and completed by such Lender, as are required
under such Laws to confirm such Lender’s entitlement to any available exemption from, or reduction of, applicable withholding taxes in respect of payments to be made
to such Lender by such Belgian Borrower, pursuant to this Agreement or otherwise to establish such Lender’s status for withholding tax purposes in Belgium. Thereafter
and from time to time, each such Foreign Lender shall (A) upon request of the Administrative Agent or the Belgian Borrower, submit to the Administrative Agent or the
Belgian Borrower such additional duly completed and signed copies of such forms or other documentation as may then be available under then current Laws and
regulations of Belgium to avoid or reduce applicable withholding taxes in respect of all payments to be made to such Foreign Lender by the Belgian Borrower pursuant to
this Agreement, (B) promptly notify the Administrative Agent and the Belgian Borrower of any change in circumstances that would modify or render invalid any claimed
exemption and (C) take such steps as shall not be materially disadvantageous to it, in the good faith judgment of such Lender, and as may be reasonably requested in
writing by the Company or the Belgian Borrower (including filing any certificate or document or the re-designation of its Lending Office) to avoid any requirement of
applicable Laws that the Belgian Borrower make any deduction or withholding for taxes from amounts payable to such Foreign Lender or to reduce the amount of any
such deduction or withholding to the greatest extent possible.
(iv)
If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding tax imposed by FATCA if such Lender were to
fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as
applicable), such Lender shall deliver to the Company and the Administrative Agent at the time or times prescribed by Law and at such time or times reasonably
requested by the Company or the Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the
Internal Revenue Code) and such additional documentation reasonably requested by the Company or the Administrative Agent as may be necessary for the Company and
the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or
to determine the amount to deduct and withhold from such payment. Solely for purposes of this paragraph, “FATCA” shall include any amendments made to FATCA after
the date of this Agreement.
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(b)
If any Lender fails to deliver such forms, then the Administrative Agent or the Borrower shall withhold amounts required to be withheld by applicable Laws from
payments under any Loan Document at the applicable statutory rate, without reduction. No Borrower shall have any liability under Section 3.01 or otherwise with respect to
amounts withheld by the Administrative Agent pursuant to this Section 11.15(b).
11.16 Replacement of Lenders.
If (i) any Lender is a Non-Extending Lender under Section 2.15, (ii) any Lender requests compensation under Section 3.04, (iii) any Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, (iv) if any Lender is a Defaulting Lender, (v) a Lender (a “Non-Consenting
Lender”) does not consent to a proposed change, waiver, discharge or termination with respect to any Loan Document that has been approved by the Required Lenders as provided in
Section 11.01 but requires unanimous consent of all Lenders or all Lenders directly affected thereby (as applicable) or (vi) under any other circumstances set forth herein providing that
the Company shall have the right to replace a Lender as a party to this Agreement, then the Company may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section
11.07), all of its interests, rights (other than its existing rights to payments pursuant to Sections 3.01 and 3.04) and obligations under this Agreement and the related Loan Documents to an
Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:
(a)
the Company shall have paid (or caused the applicable Borrower to pay) to the Administrative Agent the assignment fee specified in Section 11.07(b);
(b)
such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and L/C Advances, accrued interest thereon, accrued fees
and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Company or applicable Borrower (in the case of all other amounts);
(c)
in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such
assignment will result in a reduction in such compensation or payments thereafter;
(d)
such assignment does not conflict with applicable Laws; and
(e)
in the case of any such assignment resulting from a Non-Consenting Lender’s failure to consent to a proposed change, waiver, discharge or termination with
respect to any Loan Document, the applicable assignee consents to the proposed change, waiver, discharge or termination;
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provided, further, so long as Sections 11.16(a) through 11.16(e) have been satisfied, the failure by such Lender to execute and deliver an Assignment and Assumption shall not impair the
validity of the removal of such Lender and the mandatory assignment of such Lender’s Commitments and outstanding Loans and participations in L/C Obligations and Swing Line Loans
pursuant to this Section 11.16 shall nevertheless be effective without the execution by such Lender of an Assignment and Assumption.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the
Company to require such assignment and delegation cease to apply.
11.17 USA PATRIOT Act Notice.
Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrowers that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that
identifies the Borrowers, which information includes the name and address of each Borrower and other information that will allow such Lender or the Administrative Agent, as
applicable, to identify such Borrower in accordance with the Act. The Borrowers shall, promptly following a request by the Administrative Agent or any Lender, provide all
documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and
anti-money laundering rules and regulations, including the Act.
11.18 Governing Law; Jurisdiction; Etc.
(a)
GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK (OTHER THAN THOSE CONFLICT OF LAW RULES THAT WOULD DEFER TO THE SUBSTANTIVE LAWS OF ANOTHER JURISDICTION).
(b)
SUBMISSION TO JURISDICTION. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY
ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN CONTRACT OR IN TORT OR
OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER, THE L/C ISSUER, OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER
THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN
DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER
OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST ANY BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
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(c)
WAIVER OF VENUE. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d)
SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR
NOTICES IN SECTION 11.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY APPLICABLE LAW.
11.19 Waiver of Right to Trial by Jury.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY
HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE
OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
11.20
Judgment Currency.
If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Loan Document in one currency into another currency, the rate
of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the first currency with such other currency on the
Business Day preceding that on which final judgment is given. The obligation of each Borrower in respect of any such sum due from it to the Administrative Agent or any Lender
hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in
accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by the
Administrative Agent or such Lender, as the case may be, of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent or such Lender, as the case may be, may
in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the
sum originally due to the Administrative Agent or any Lender from such Borrower in the Agreement Currency, such Borrower agrees, as a separate obligation and notwithstanding any
such judgment, to indemnify the Administrative Agent or such Lender, as the case may be, against such loss. If the amount of the Agreement Currency so purchased is greater than the
sum originally due to the Administrative Agent or any Lender in such currency, the Administrative Agent or such Lender, as the case may be, agrees to return the amount of any excess to
such Borrower (or to any other Person who may be entitled thereto under applicable law).
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11.21 No Advisory or Fiduciary Responsibility.
In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan
Document), each Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by
the Administrative Agent, BAS, and the other lead arranger(s) are arm’s-length commercial transactions between such Borrower and its Affiliates, on the one hand, and the
Administrative Agent, BAS, and the other lead arranger(s), on the other hand, (B) each Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has
deemed appropriate, and (C) such Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other
Loan Documents; (ii) (A) the Administrative Agent, BAS, and each other lead arranger each is and has been acting solely as a principal and, except as expressly agreed in writing by the
relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for such Borrower or any of its Affiliates, or any other Person and (B) neither the
Administrative Agent, BAS nor any other lead arranger has any obligation to such Borrower or any of its Affiliates with respect to the transactions contemplated hereby except those
obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, BAS and the other lead arranger(s) and their respective Affiliates may be
engaged in a broad range of transactions that involve interests that differ from those of such Borrower and its Affiliates, and neither the Administrative Agent, BAS nor any other lead
arranger has any obligation to disclose any of such interests to the Borrower or any of its Affiliates. To the fullest extent permitted by law, each of the Borrowers hereby waives and
releases any claims that it may have against the Administrative Agent, BAS and the other lead arranger(s) with respect to any breach or alleged breach of agency or fiduciary duty in
connection with any aspect of any transaction contemplated hereby.
11.22 Electronic Execution; Electronic Records; Counterparts.
This Agreement, any Loan Document and any other Communication, including Communications required to be in writing, may be in the form of an Electronic Record and may
be executed using Electronic Signatures. Each of the Borrowers and each of the Administrative Agent and each Lender Party agrees that any Electronic Signature on or associated with
any Communication shall be valid and binding on such Person to the same extent as a manual, original signature, and that any Communication entered into by Electronic Signature, will
constitute the legal, valid and binding obligation of such Person enforceable against such Person in accordance with the terms thereof to the same extent as if a manually executed original
signature was delivered. Any Communication may be executed in as many counterparts as necessary or convenient, including both paper and electronic counterparts, but all such
counterparts are one and the same Communication. For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance of a manually
signed paper Communication which has been converted into electronic form (such as scanned into PDF format), or an electronically signed Communication converted into another
format, for transmission, delivery and/or retention. The Administrative Agent and each of the Lender Parties may, at its option, create one or more copies of any Communication in the
form of an imaged Electronic Record (“Electronic Copy”), which shall be deemed created in the ordinary course of such Person’s business, and destroy the original paper document. All
Communications in the form of an Electronic Record, including an Electronic Copy, shall be considered an original for all purposes, and shall have the same legal effect, validity and
enforceability as a paper record. Notwithstanding anything contained herein to the contrary, neither the Administrative Agent, L/C Issuer nor Swing Line Lender is under any obligation
to accept an Electronic Signature in any form or in any format unless expressly agreed to by such Person pursuant to procedures approved by it; provided, further, without limiting the
foregoing, (a) to the extent the Administrative Agent, L/C Issuer and/or Swing Line Lender has agreed to accept such Electronic Signature, the Administrative Agent and each of the
Lender Parties shall be entitled to rely on any such Electronic Signature purportedly given by or on behalf of any Borrower and/or any Lender Party without further verification and (b)
upon the request of the Administrative Agent or any Lender Party, any Electronic Signature shall be promptly followed by such manually executed counterpart. For purposes hereof,
“Electronic Record” and “Electronic Signature” shall have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended from time to time.
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Neither the Administrative Agent, L/C Issuer nor Swing Line Lender shall be responsible for or have any duty to ascertain or inquire into the sufficiency, validity, enforceability,
effectiveness or genuineness of any Loan Document or any other agreement, instrument or document (including, for the avoidance of doubt, in connection with the Administrative
Agent’s, L/C Issuer’s or Swing Line Lender’s reliance on any Electronic Signature transmitted by telecopy, emailed .pdf or any other electronic means). The Administrative Agent, L/C
Issuer and Swing Line Lender shall be entitled to rely on, and shall incur no liability under or in respect of this Agreement or any other Loan Document by acting upon, any
Communication (which writing may be a fax, any electronic message, Internet or intranet website posting or other distribution or signed using an Electronic Signature) or any statement
made to it orally or by telephone and believed by it to be genuine and signed or sent or otherwise authenticated (whether or not such Person in fact meets the requirements set forth in the
Loan Documents for being the maker thereof).
Each of the Borrowers and each Lender Party hereby waives (i) any argument, defense or right to contest the legal effect, validity or enforceability of this Agreement, any other
Loan Document based solely on the lack of paper original copies of this Agreement, such other Loan Document, and (ii) waives any claim against the Administrative Agent and each
Lender Party for any liabilities arising solely from the Administrative Agent’s and/or any Lender Party’s reliance on or use of Electronic Signatures, including any liabilities arising as a
result of the failure of the Borrowers to use any available security measures in connection with the execution, delivery or transmission of any Electronic Signature.
11.23 Appointment of Company.
Each of the Borrowers hereby appoints the Company to act as its agent for all purposes of this Agreement, the other Loan Documents and all other documents and electronic
platforms entered into in connection herewith and agrees that (a) the Company may execute such documents and provide such authorizations on behalf of such Borrowers as the Company
deems appropriate in its sole discretion and each Borrower shall be obligated by all of the terms of any such document and/or authorization executed on its behalf, (b) any notice or
communication delivered by the Administrative Agent, L/C Issuer or a Lender to the Company shall be deemed delivered to each Borrower and (c) the Administrative Agent, L/C Issuer
or the Lenders may accept, and be permitted to rely on, any document, authorization, instrument or agreement executed by the Company on behalf of each of the Borrowers.
11.24 Acknowledgement and Consent to Bail-In of EEA Financial Institutions.
Solely to the extent any Lender or L/C Issuer that is an Affected Financial Institution is a party to this Agreement and notwithstanding anything to the contrary in any Loan
Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender or L/C Issuer that is an
Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of the applicable
Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
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(a) the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which may be payable to it by
any Lender or L/C Issuer that is an Affected Financial Institution; and
(b) the effects of any Bail-In Action on any such liability, including, if applicable:
(i) a reduction in full or in part or cancellation of any such liability;
(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its parent undertaking, or a
bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with
respect to any such liability under this Agreement or any other Loan Document; or
(iii) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable Resolution Authority.
11.25 Acknowledgement Regarding any Supported QFCs.
To the extent that the Loan Documents provide support, through a guarantee or otherwise, for any Swap Contract or any other agreement or instrument that is a QFC (such
support, “QFC Credit Support”, and each such QFC, a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit
Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations
promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that
the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United
States):
(a) In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime,
the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support,
and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be
effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed
by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a
U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised
against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the
Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and
agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any
QFC Credit Support.
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(b) As used in this Section 11.25, the following terms have the following meanings:
“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
“Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a
“covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in
accordance with, 12 C.F.R. § 382.2(b).
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
[SIGNATURE PAGES FOLLOW]
133
Annex B
EXHIBIT A
FORM OF COMMITTED LOAN NOTICE
Date: , 20__
To: Bank of America, N.A., as Administrative Agent
Re: Credit Agreement dated as of June 21, 2018 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement”) among
Albemarle Corporation, a Virginia corporation (the “Company”), Albemarle Europe SRL, a limited liability company organized under the laws of Belgium (“société à
responsabilité limitée”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent and Swing Line Lender. Capitalized terms used but not
otherwise defined herein have the meanings provided in the Credit Agreement.
Ladies and Gentlemen:
The undersigned hereby requests (select one):
☐ A Borrowing of [Base Rate][Eurocurrency Rate] Loans
☐ A conversion of Eurocurrency Rate Loans
☐ A continuation of Eurocurrency Rate Loans
☐ A Borrowing of Alternative Currency Daily Rate Loans
☐ A Borrowing of Alternative Currency Term Rate Loans
☐ A continuation of Alternative Currency Term Rate Loans
On , (a Business Day).
1
Applicable Currency: .
2
In the amount of $ .
For [Eurocurrency Rate Loans][Alternative Currency Term Rate Loans]: with an Interest Period of months.
Applicable Borrower: .
1
Base Rate Loans and Eurocurrency Rate Loans are denominated in Dollars. Alternative Currency Daily Rate Loans are denominated in British Pounds Sterling. Alternative Currency Term Rate Loans may be denominated in Euro, Japanese Yen, Australian
Dollars or Canadian Dollars.
2
Each Committed Borrowing of, conversion to or continuation of Eurocurrency Rate Loans or Alternative Currency Loans shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as provided in Sections
2.03(c) and 2.04(c) of the Credit Agreement, each Committed Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof.
With respect to any Borrowing requested herein, the undersigned hereby represents and warrants that (i) such request complies with the requirements of Section 2.01(a) of the Credit
Agreement and (ii) each of the conditions set forth in Section 5.02 of the Credit Agreement has been satisfied on and as of the date of such Borrowing.
[APPLICABLE BORROWER]
By:
Name:
Title:
Liens described by the following UCC financing statements:
LOUISIANA SECRETARY OF STATE:
Annex C
SCHEDULE 8.01
Existing Liens
Debtor:
Secured Party:
File Number:
File Date:
Continuation Date:
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Collateral:
Albemarle Corporation
Key Equipment Finance Inc.
09-1182130
06/08/2012
03/15/2017
Goods and Property described in the above referenced UCC financing statement, and certain collateral related
thereto as specified in such financing statement and the applicable underlying agreement(s); 5-2012 Club Car
Carryall 232 Electric
Albemarle Corporation
Caterpillar Financial Services Corporation
26-411113
11/19/2021
Leased equipment and related property
VIRGINIA STATE CORPORATION COMMISSION:
Debtor:
Secured Party:
File Number:
File Date:
Continuation Date:
Amendment Date:
Continuation Date
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Continuation Date:
Albemarle Corporation
Vallen Distribution, Inc.
09-06-17-7194-1
06/17/2009
02/27/2014
01/16/2017
05/20/2019
All parts, items and products held by the Debtor on consignment from the Secured Party, and certain collateral
related thereto as specified in such financing statement and the applicable underlying agreement(s)
Albemarle Corporation
Wells Fargo Bank, N.A.
15-07-29-3832-1
07/29/2015
06/05/2020
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Continuation Date:
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
1 Used 2013 Rail King RK320 Rail Car Mover S/N RCM-988-5 and certain collateral related thereto as
specified in such financing statement and the applicable underlying agreement(s)
Albemarle Corporation
Caterpillar Financial Services Corporation
16-12-14-3897-9
12/14/2016
06/22/2021
1 Caterpillar 420F2ST Backhoe Loader S/N: HWC01120, 1.4 cubic yard GP Bucket, 24” HD Bucket, Thumb,
and certain collateral related thereto as specified in such financing statement and the applicable underlying
agreement(s)
Albemarle Corporation
Konica Minolta Premier Finance
17-05-18-3882-3
05/18/2017
3 – Bizhub C3350, 19 – Bizhub C458, and certain collateral related thereto as specified in such financing
statement and the applicable underlying agreement(s)
Albemarle Corporation
De Lage Landen Financial Services, Inc.
17-06-08-3830-5
06/08/2017
12 Caterpillar GP25N5-GLE forklifts with battery and charger as more particularly described in the financing
statement and certain collateral related thereto as specified in such financing statement and the applicable
underlying agreement(s)
Albemarle Corporation
DLL Finance LLC
17-07-05-3874-3
07/05/2017
Club car, CA100E, Elec Utility (QTY 33)
Albemarle Corporation
Konica Minolta Premier Finance
18-07-12-3932-4
07/12/2018
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Collateral:
Debtor:
Secured Party:
File Number:
8 BIZHUB C258, 6 BIZHUB C368 and all currently existing and future attachments, parts, accessories and add-
ons for all of the foregoing equipment, and all products and proceeds thereof
Albemarle Corporation
Konica Minolta Premier Finance
18-07-31-3903-3
07/31/2018
1-BIZHUB C368, 15-BIZHUB C258, RIGHTFAX Software and all currently existing and future attachments,
parts, accessories and add-ons for all of the foregoing equipment, and all products and proceeds thereof
Albemarle Corporation
Konica Minolta Premier Finance
19-04-25-3932-7
04/25/2019
4 BIZHUB C659 and all currently existing and future attachments, parts, accessories and add-ons for all of the
foregoing equipment, and all products and proceeds thereof
Albemarle Corporation
Motion Industries, Inc.
20-20-01-1402-1948-8
12/13/2019
Maintenance, repair, operational assets, materials, parts, equipment, supplies, inventory, products and other
tangible personal property and all other assets, including goods and merchandise, now or hereafter held for
resale, use or consumption in Debtor’s (Consignee’s) business and supplied by Secured Party (Consignor) under
consignment or other agreement
Albemarle Corporation
Wells Fargo Equipment Finance, Inc.
20-20-09-2200-8894-8
09/22/2020
1 John Deere Model 670GP Moter Grader, S/N: 1DW670GPF677538 together with all replacements,
substitutions, parts, improvements, repairs and accessories and all additions incorporated therein or affixed
thereto
Albemarle Corporation
Konica Minolta Premier Finance
20-21-07-3000-4935-6
File Date:
Collateral:
06/30/2021
Collateral includes several specific model numbers or serial numbers for items of equipment, including all
currently existing and future attachments, parts, accessories and add-ons for such listed equipment, and all
products and proceeds thereof
Exhibit 10.62
EXECUTION VERSION
SECOND AMENDMENT AND RESTATEMENT AGREEMENT, dated as of December 10, 2021 (this “Agreement”), among ALBEMARLE
CORPORATION, a Virginia corporation (the “Borrower”), ALBEMARLE NEW HOLDING GMBH, a Gesellschaft mit beschränkter Haftung incorporated
under the laws of the Federal Republic of Germany (“Albemarle Germany”), the LENDERS party hereto and JPMORGAN CHASE BANK, N.A., as
Administrative Agent.
RECITALS
among the Borrower, Albemarle Germany, the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent; and
WHEREAS, reference is made to the Syndicated Facility Agreement dated as of August 14, 2019 (as heretofore amended and restated, the “Existing Credit Agreement”),
WHEREAS, the Borrower has requested (a) the establishment on the Restatement Effective Date (as defined below) of a new term facility in an aggregate principal
amount of $750,000,000 (the “New Term Facility”) and (b) the amendment and restatement of the Existing Credit Agreement to be in the form of the Restated Credit Agreement (as
defined below), and the New Term Lenders (as defined below), which collectively constitute the Required Lenders under the Existing Credit Agreement, have agreed to provide the New
Term Facility and to effect such amendment and restatement, all on the terms and subject to the conditions set forth herein.
acknowledged, the parties hereto agree as follows:
NOW, THEREFORE, in consideration of the agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby
SECTION 1. Definitions. Capitalized terms used but not otherwise defined herein (including in the recitals hereto) have the meanings assigned to them in the Existing
Credit Agreement or the Restated Credit Agreement, as applicable. The Existing Credit Agreement and the Restated Credit Agreement are sometimes collectively referred to as the
“Credit Agreement”.
SECTION 2. Amendment and Restatement of Existing Credit Agreement.
(a)
Effective as of the Restatement Effective Date, (i) the Existing Credit Agreement (excluding, except as set forth below, the Schedules and Exhibits thereto, each
of which shall, except as set forth below, remain as in effect immediately prior to the Restatement Effective Date) is hereby amended and restated to be in the form attached as Exhibit I
hereto (the Existing Credit Agreement, as so amended and restated, being referred to as the “Restated Credit Agreement”), and (ii) Albemarle Germany shall cease to be a party to, and
shall cease to have any rights, benefits or privileges under, or to be subject to any obligations under, the Restated Credit Agreement.
Schedules 2.01 and 8.01 to the Restated Credit Agreement.
(b)
Effective as of the Restatement Effective Date, Schedules 2.01 and 8.01 to the Existing Credit Agreement are hereby amended and restated to be in the form of
of Exhibits A, B, C and D, respectively, to the Restated Credit Agreement.
(c)
Effective as of the Restatement Effective Date, each of Exhibits A, B, C and D to the Existing Credit Agreement is hereby amended and restated to be in the form
SECTION 3. New Term Commitments.
(a)
On the terms set forth herein and in the Restated Credit Agreement, and subject to the conditions set forth herein, on and as of the Restatement Effective Date,
each Person whose name is set forth on Schedule 2.01 to the Restated Credit Agreement (collectively, the “New Term Lenders”) shall have a commitment (collectively, the “New Term
Commitments”) in the amount set forth opposite such New Term Lender’s name on such Schedule. The New Term Commitments will constitute “Commitments” as defined in the
Restated Credit Agreement and any loan or borrowing made thereunder will constitute a “Loan” or “Borrowing”, as applicable, as defined in the Restated Credit Agreement.
The terms of the New Term Commitments, and the Loans made thereunder, shall be as set forth in the Restated Credit Agreement, and on and as of the
Restatement Effective Date, each Lender holding a New Term Commitment shall be referred to as a “Lender” and shall be a party to, and a “Lender” under, the Restated Credit
Agreement and shall have all the rights, benefits and privileges of, and shall be subject to all the obligations of, a “Lender” under the Restated Credit Agreement.
(b)
each of the following conditions shall have been satisfied:
SECTION 4.
Effectiveness. This Agreement shall become effective, as of the date first written above, on the first date (the “Restatement Effective Date”) on which
(a)
The Administrative Agent shall have executed a counterpart of this Agreement and shall have received from each of the Borrower, Albemarle Germany and the
New Term Lenders (which shall constitute Required Lenders under the Existing Credit Agreement) a counterpart of this Agreement signed on behalf of such Person (which,
subject to Section 11.22 of the Restated Credit Agreement, may include any Electronic Signatures transmitted by fax, emailed .pdf or any other electronic means that reproduces
an image of an actual executed signature page).
(b)
The Administrative Agent shall have received the following, each of which shall be originals or facsimiles (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the Borrower, each dated the Restatement Effective Date (or, in the case of certificates of Governmental Authorities,
a recent date before the Restatement Effective Date) and each in form and substance reasonably satisfactory to the Administrative Agent:
(i)
Notes executed by the Borrower in favor of each New Term Lender requesting a Note;
(ii)
copies of the Organization Documents of the Borrower certified to be true and complete as of a recent date by the appropriate Governmental Authority of
the state or other jurisdiction of its incorporation, where applicable or unless otherwise approved by the Administrative Agent, and certified by a director, secretary or
assistant secretary of the Borrower to be true and correct as of the Restatement Effective Date;
(iii)
such certificates of resolutions or other action, incumbency certificates and/or other certificates of Responsible Officers of the Borrower as the
Administrative Agent may reasonably require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act in connection with this
Agreement, the Restated Credit Agreement and the other Loan Documents to which the Borrower is a party;
2
(iv)
such documents and certifications as the Administrative Agent may reasonably require to evidence that the Borrower is duly incorporated, and that the
Borrower is validly existing, in good standing and qualified to engage in business in its state of incorporation; and
(v)
a certificate signed by a Responsible Officer of the Borrower certifying that (A) the representations and warranties of the Borrower contained in Section 5
hereof are true and correct in all material respects (in the case of any representation and warranty qualified by materiality or Material Adverse Effect in the text thereof, in
all respects) on and as of the Restatement Effective Date, except to the extent that such representations and warranties specifically refer to an earlier date, in which case
certifying that they are true and correct in all material respects (in the case of any representation and warranty qualified by materiality or Material Adverse Effect in the
text thereof, in all respects) as of such earlier date, and (B) no Default exists.
(c)
The Administrative Agent shall have received a written opinion (addressed to the Administrative Agent and the Lenders and dated the Restatement Effective
Date) of Squire Patton Boggs (US) LLP, counsel for the Borrower, in form and substance reasonably satisfactory to the Administrative Agent. The Borrower hereby requests such
counsel to deliver such opinion.
(d)
To the extent reasonably requested by any Lender at least 10 days prior to the Restatement Effective Date, the Borrower shall have provided to such Lender the
documentation and other information so requested in connection with applicable “know your customer” and anti-money-laundering rules and regulations, including the PATRIOT
Act, in each case at least five days prior to the Restatement Effective Date.
(e)
The Tranche 2 Commitments (as defined in the Existing Credit Agreement) shall have been, or substantially contemporaneously with the execution of this
Agreement shall be, terminated; provided that the New Term Lenders, which collectively constitute the Required Lenders under the Existing Credit Agreement, hereby waive the
requirement for advance notice of such termination pursuant to Section 2.06(d) of the Existing Credit Agreement (it being agreed that such notice may be delivered on the date
hereof).
(f)
The Borrower shall have paid all agreed fees due and payable to each Lender executing this Agreement and to JPMorgan Chase Bank, N.A., and shall have
reimbursed the Administrative Agent for all reasonable attorneys’ fees reimbursable by the Borrower pursuant to the Restated Credit Agreement to the extent invoiced at least two
Business Days prior to the Restatement Effective Date.
SECTION 5. Representations and Warranties. The Borrower represents and warrants as follows:
(a)
It has taken all necessary action to authorize the execution, delivery and performance of this Agreement.
(b)
This Agreement has been duly executed and delivered by the Borrower and Albemarle Germany and constitutes the legal, valid and binding obligations of the
Borrower and Albemarle Germany, enforceable against the Borrower and Albemarle Germany in accordance with its terms, except as such enforceability may be subject to (i)
applicable Debtor Relief Laws, (ii) fraudulent transfer or conveyance laws, and (iii) general principles of equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity).
3
(c)
No consent, approval, authorization or order of, or filing, registration or qualification with, any court or Governmental Authority or third party is required in
connection with the execution, delivery or performance by the Borrower of this Agreement, except for those the failure to obtain, occur or make would not reasonably be
expected to have a Material Adverse Effect.
(d)
The execution and delivery of this Agreement does not (i) violate, contravene or conflict with any provision of its Organization Documents or (ii) violate,
contravene or conflict with any Laws applicable to it, except in the case of clause (ii), to the extent that it would not reasonably be expected to have a Material Adverse Effect.
(e)
After giving effect to this Agreement, (i) the representations and warranties set forth in Article VI of the Restated Credit Agreement are true and correct in all
material respects (in the case of any representation and warranty qualified by materiality or Material Adverse Effect in the text thereof, in all respects), except to the extent that
such representations and warranties specifically refer to an earlier date, in which case such representations and warranties are true and correct in all material respects (in the case
of any representation and warranty qualified by materiality or Material Adverse Effect in the text thereof, in all respects) as of such earlier date, and except that for the purposes
of this clause (e), the representations and warranties contained in Sections 6.05(a) and 6.05(b) of the Restated Credit Agreement shall be deemed to refer to the most recent
financial statements furnished pursuant to Section 7.01(a) or 7.01(b), as applicable, of the Existing Credit Agreement, and (ii) no Default exists.
SECTION 6.
Effect of this Agreement. Except as expressly set forth herein, this Agreement shall not by implication or otherwise limit, impair, constitute a waiver of or
otherwise affect the rights and remedies of the Administrative Agent or any Lender under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any
way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all
respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle the Borrower to any other consent to, or any other waiver, amendment, modification or other
change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document in similar or different circumstances.
On and after the Restatement Effective Date, each reference in the Credit Agreement to “this Agreement”, “herein”, “hereunder”, “hereto”, “hereof” and words of
similar import shall, unless the context otherwise requires, refer to the Restated Credit Agreement, and each reference to the Credit Agreement in any other Loan Document shall be
deemed to be a reference to the Restated Credit Agreement. This Agreement shall constitute a “Loan Document” for all purposes of the Credit Agreement and the other Loan Documents.
(b)
SECTION 7. Counterparts. This Agreement may be executed in any number of counterparts (and by different parties hereto in different counterparts), each of which
when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement that is an
Electronic Signature transmitted by fax, emailed .pdf or any other electronic means that reproduces an image of an actual executed signature page shall be effective as delivery of a
manually executed counterpart of this Agreement.
STATE OF NEW YORK (OTHER THAN THOSE CONFLICT OF LAW RULES THAT WOULD DEFER TO THE SUBSTANTIVE LAWS OF ANOTHER JURISDICTION).
SECTION 8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
4
assigns.
SECTION 9.
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted
provision of this Agreement.
SECTION 10. Headings. The headings of the sections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any
SECTION 11. Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining
provisions of this Agreement shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable
provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a
particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
incorporated by reference as if set forth in full herein, mutatis mutandis.
SECTION 12.
Incorporation by Reference. The provisions of Sections 11.18(b), 11.18(c), 11.18(d), 11.19 and 11.22 of the Restated Credit Agreement are hereby
[remainder of page intentionally left blank]
5
Each of the parties hereto has caused a counterpart of this Agreement to be duly executed and delivered as of the date first above written.
ALBEMARLE CORPORATION
by
/s/ Karen G. Narwold
Name: Karen G. Narwold
Title: Executive Vice President,
Chief Administrative Officer,
General Counsel and
Corporate Secretary
ALBEMARLE CORPORATION
SECOND AMENDMENT AND RESTATEMENT AGREEMENT
ALBEMARLE NEW HOLDING GMBH
by
/s/ Nicolas Roessler
Name: Nicolas Roessler
Title: Managing Director
ALBEMARLE CORPORATION
SECOND AMENDMENT AND RESTATEMENT AGREEMENT
JPMORGAN CHASE BANK, N.A.,
as a New Term Lender and the Administrative
Agent
By: /s/ Peter S. Predun
Name: Peter S. Predun
Title: Executive Director
ALBEMARLE CORPORATION
SECOND AMENDMENT AND RESTATEMENT AGREEMENT
BANK OF AMERICA, N.A.:
by:
/s/ Mukesh Singh
Name:
Title:
Mukesh Singh
Director
BANCO SANTANDER, S.A., NEW YORK BRANCH:
by:
by:
/s/ Pablo Urgoiti
Name:
Title:
Pablo Urgoiti
Managing Director
/s/ Andres Barbosa
Name:
Title:
Andres Barbosa
Managing Director
Name of New Term Lender: GOLDMAN SACHS BANK USA
by:
/s/ William E. Briggs IV
Name:
Title:
William E. Briggs IV
Authorized Signatory
Name of New Term Lender: HSBC Bank USA, National Association
by:
/s/ Peggy Yip
Name:
Title:
Peggy Yip
Director
MIZUHO BANK, LTD:
by:
/s/ Donna DeMagistris
Name:
Title:
Donna DeMagistris
Executive Director
SIGNATURE PAGE TO
SECOND AMENDMENT AND RESTATEMENT AGREEMENT
OF ALBEMARLE CORPORATION
ALBEMARLE CORPORATION
SECOND AMENDMENT AND RESTATEMENT AGREEMENT
Name of New Term Lender: MUFG BANK, LTD.
by:
/s/ Jorge Georgalos
Name:
Title:
Jorge Georgalos
Authorized Signatory
For any New Term Lender requiring a second signature block:
by:
N/A
Name:
Title:
N/A
N/A
Name of New Term Lender: Sumitomo Mitsui
Banking Corporation
by:
/s/ Jun Ashley
Name:
Title:
Jun Ashley
Director
Name of New Term Lender: TRUIST BANK
by:
/s/ Katherine Bass
Name:
Title:
Katherine Bass
Director
Name of New Term Lender: U.S. BANK NATIONAL ASSOCIATION
by:
/s/ Edward B. Hanson
Name:
Title:
Edward B. Hanson
Senior Vice President
Name of New Term Lender: The Northern Trust Company
by:
/s/ Andrew D. Holz
Name:
Title:
Andrew D. Holz
Senior Vice President
ALBEMARLE CORPORATION
SECOND AMENDMENT AND RESTATEMENT AGREEMENT
EXHIBIT I
Amended and Restated Credit Agreement
[See Attached]
SYNDICATED FACILITY AGREEMENT
dated as of August 14, 2019,
as amended and restated as of December 15, 2020,
as further amended and restated as of December 10, 2021,
among
ALBEMARLE CORPORATION,
THE LENDERS PARTY HERETO
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
JPMORGAN CHASE BANK, N.A.
and
BOFA SECURITIES, INC.,
as Joint Lead Arrangers and Joint Bookrunners
BANK OF AMERICA, N.A.,
as Syndication Agent
BANCO SANTANDER, S.A., NEW YORK BRANCH,
GOLDMAN SACHS BANK USA,
HSBC BANK USA, NATIONAL ASSOCIATION,
MIZUHO BANK, LTD.,
MUFG BANK, LTD.,
SUMITOMO MITSUI BANKING CORPORATION,
TRUIST BANK,
and
U.S. BANK NATIONAL ASSOCIATION,
as Co-Documentation Agents
[CS&M Ref. No. 6702-296]
SECTION 1.01. Defined Terms 1
SECTION 1.02. Other Interpretive Provisions 29
SECTION 1.03. Accounting Terms 31
SECTION 1.04. Rounding 32
SECTION 1.05. References to Agreements and Laws 32
SECTION 1.06. Blocking Regulation 32
SECTION 1.07. Interest Rate; LIBOR Notification 32
TABLE OF CONTENTS
ARTICLE I
Definitions and Accounting Terms
ARTICLE II
The Commitments and Loans
SECTION 2.01. Loans 34
SECTION 2.02. Borrowings, Conversions and Continuations of Loans 34
SECTION 2.03. [Reserved.] 35
SECTION 2.04. [Reserved.] 35
SECTION 2.05. Optional Prepayments 35
SECTION 2.06. Termination or Reduction of Commitments 36
SECTION 2.07. Repayment of Loans 36
SECTION 2.08. Interest 37
SECTION 2.09. Fees 37
SECTION 2.10. Computation of Interest and Fees 38
SECTION 2.11. Evidence of Debt 38
SECTION 2.12. Payments Generally; Administrative Agent’s Clawback 38
SECTION 2.13. Sharing of Payments 40
SECTION 2.14. [Reserved.] 41
SECTION 2.15. Extension of Maturity Date 41
SECTION 2.16. [Reserved.] 43
SECTION 2.17. Defaulting Lenders 43
ARTICLE III
Taxes, Yield Protection and Illegality
SECTION 3.01. Taxes 43
SECTION 3.02. Illegality 46
SECTION 3.03. Alternate Rate of Interest 47
SECTION 3.04. Increased Cost and Reduced Return; Capital Adequacy and Liquidity 49
i
SECTION 3.05. Funding Losses 50
SECTION 3.06. Matters Applicable to all Requests for Compensation 51
SECTION 3.07. Survival 51
ARTICLE IV
[Reserved]
ARTICLE V
Conditions Precedent
SECTION 5.01. Conditions to the Restatement Effective Date 52
SECTION 5.02. Conditions to Each Funding Date 52
ARTICLE VI
Representations and Warranties
SECTION 6.01. Existence, Qualification and Power 53
SECTION 6.02. Authorization; No Contravention 53
SECTION 6.03. Governmental Authorization; Other Consents 53
SECTION 6.04. Binding Effect 53
SECTION 6.05. Financial Statements; No Material Adverse Change 54
SECTION 6.06. Litigation 54
SECTION 6.07. No Default 54
SECTION 6.08. Ownership of Property; Liens 55
SECTION 6.09. Environmental Compliance 55
SECTION 6.10. Insurance 55
SECTION 6.11. Taxes 55
SECTION 6.12. ERISA Compliance 56
SECTION 6.13. Margin Regulations; Investment Company Act 56
SECTION 6.14. Disclosure 57
SECTION 6.15. Compliance with Laws 57
SECTION 6.16. Intellectual Property; Licenses, Etc 57
SECTION 6.17. [Reserved] 57
SECTION 6.18. [Reserved] 57
SECTION 6.19. [Reserved] 57
SECTION 6.20. OFAC; Anti-Corruption Laws 58
ii
SECTION 7.01. Financial Statements 58
SECTION 7.02. Certificates; Other Information 59
SECTION 7.03. Notices 61
SECTION 7.04. Payment of Obligations 61
SECTION 7.05. Preservation of Existence, Etc 61
SECTION 7.06. Maintenance of Properties 62
SECTION 7.07. Maintenance of Insurance 62
SECTION 7.08. Compliance with Laws 62
SECTION 7.09. Books and Records 62
SECTION 7.10. Inspection Rights 62
SECTION 7.11. Use of Proceeds 63
SECTION 8.01. Liens 63
SECTION 8.02. Mergers, Dispositions, Etc 67
SECTION 8.03. Change in Nature of Business 67
SECTION 8.04. Transactions with Affiliates 68
SECTION 8.05. Use of Proceeds 68
SECTION 8.06. Financial Covenant 68
SECTION 8.07. Subsidiary Indebtedness 68
SECTION 8.08. Sanctions 69
SECTION 8.09. Anti-Corruption Laws 70
SECTION 9.01. Events of Default 70
SECTION 9.02. Remedies Upon Event of Default 72
SECTION 9.03. Application of Funds 73
SECTION 10.01. Appointment and Authority 73
SECTION 10.02. Rights as a Lender 74
SECTION 10.03. Exculpatory Provisions 74
ARTICLE VII
Affirmative Covenants
ARTICLE VIII
Negative Covenants
ARTICLE IX
Events of Default and Remedies
ARTICLE X
Administrative Agent
iii
SECTION 10.04. Reliance by Administrative Agent 75
SECTION 10.05. Delegation of Duties 77
SECTION 10.06. Resignation of Administrative Agent 77
SECTION 10.07. Non-Reliance on Administrative Agent and Other Lenders 78
SECTION 10.08. No Other Duties, Etc 78
SECTION 10.09. Administrative Agent May File Proofs of Claim 79
SECTION 10.10. ERISA Matters 79
ARTICLE XI
Miscellaneous
SECTION 11.01. Amendments, Etc 81
SECTION 11.02. Notices; Effectiveness; Electronic Communication 83
SECTION 11.03. No Waiver; Cumulative Remedies; Enforcement 85
SECTION 11.04. Expenses; Indemnity; Damage Waiver 86
SECTION 11.05. [Reserved] 88
SECTION 11.06. Payments Set Aside 88
SECTION 11.07. Successors and Assigns 89
SECTION 11.08. Confidentiality 93
SECTION 11.09. Set-off 94
SECTION 11.10. Interest Rate Limitation 95
SECTION 11.11. Counterparts 95
SECTION 11.12. Integration; Effectiveness 95
SECTION 11.13. Survival of Representations and Warranties 96
SECTION 11.14. Severability 96
SECTION 11.15. Tax Forms 96
SECTION 11.16. Replacement of Lenders 97
SECTION 11.17. USA PATRIOT Act Notice 98
SECTION 11.18. Governing Law; Jurisdiction; Etc 98
SECTION 11.19. Waiver of Right to Trial by Jury 99
SECTION 11.20. Judgment Currency 100
SECTION 11.21. No Advisory or Fiduciary Responsibility 100
SECTION 11.22. Electronic Execution 101
SECTION 11.23. [Reserved] 102
SECTION 11.24. [Reserved] 102
SECTION 11.25. Acknowledgment and Consent to Bail-In of Affected Financial Institutions 102
SCHEDULES
2.01 Commitments
6.09 Environmental Matters
6.20 Certain Anti-Corruption Laws Matters
8.01 Existing Liens
iv
11.02 Eurocurrency and Domestic Lending Offices; Notice Addresses
EXHIBITS
A Form of Loan Notice
B Form of Note
C Form of Compliance Certificate
D Form of Assignment and Assumption
v
SYNDICATED FACILITY AGREEMENT dated as of August 14, 2019, as amended and restated as of December 15, 2020 and as further amended and
restated as of December 10, 2021, among ALBEMARLE CORPORATION, a Virginia corporation (the “Borrower”), the LENDERS party hereto and JPMORGAN
CHASE BANK, N.A., as Administrative Agent.
RECITALS
as of August 14, 2019, as heretofore amended and restated (as so amended and restated, the “Existing Syndicated Facility Agreement”).
The Borrower, certain Subsidiaries, the lenders party thereto and the Administrative Agent are parties to that certain Syndicated Facility Agreement dated
Restatement Effective Date, in the form of this Agreement.
Pursuant to the Restatement Agreement, the parties thereto wish to amend and restate the Existing Syndicated Facility Agreement to be, effective as of the
Accordingly, the parties hereto covenant and agree as follows:
ARTICLE I
Definitions and Accounting Terms
SECTION 1.01.
Defined Terms.
As used in this Agreement, the following terms shall have the meanings set forth below:
“Acquisition” by any Person means the acquisition by such Person, in a single transaction or in a series of related transactions, of all or substantially all of
the assets of, or of a business unit or division of, another Person or at least a majority of the Securities having ordinary voting power for the election of directors,
managing general partners or the equivalent of another Person, in each case whether or not involving a merger or consolidation with such other Person and whether for
cash, property, services, assumption of Indebtedness, Securities or otherwise.
the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
“Adjusted LIBO Rate” means, with respect to any LIBOR Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to
“Administrative Agent” means JPMorgan in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.
Unless the context requires otherwise, the term “Administrative Agent” shall include any Affiliate of JPMorgan through which it shall perform any of its obligations in
such capacity hereunder.
“Administrative Questionnaire” means an Administrative Questionnaire in the form provided by the Administrative Agent.
1
“Affected Financial Institution” means (a) any EEA Financial Institution or (b) U.K. Financial Institution.
“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or
is under common Control with the Person specified. “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management
or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
Without limiting the generality of the foregoing, for purposes of determining Affiliates of a member of the Consolidated Group, a Person shall be deemed to be Controlled
by another Person if such other Person possesses, directly or indirectly, power to vote 35% or more of the Securities having ordinary voting power for the election of
directors, managing general partners or the equivalent of such Person.
“Agent Parties” has the meaning specified in Section 11.02.
“Aggregate Commitments” means, at any time, the aggregate amount of Commitments of all the Lenders in effect at such time.
“Agreement” means this Syndicated Facility Agreement.
Republic of Germany.
“Albemarle Germany” means Albemarle New Holding GmbH, a Gesellschaft mit beschränkter Haftung incorporated under the laws of the Federal
“Albemarle Wodgina” means Albemarle Wodgina PTY LTD (ACN 630 509 303), a proprietary limited company incorporated under the laws of Australia.
“Ancillary Document” has the meaning specified in Section 11.22.
“Applicable Rate” means, from time to time, the following percentages per annum, based upon the Debt Rating, as set forth below:
Pricing
Level
Debt Rating
S&P/Moody’s/ Fitch
Applicable Rate for LIBOR
Loans
Applicable Rate for Base Rate
Loans
1
2
3
4
5
A-/A3/A- or better
BBB+/Baal/BBB+
BBB/Baa2/BBB
BBB-/Baa3/BBB-
worse than or equal to
BB+/Ba1/BB+
0.875%
1.000%
1.125%
1.250%
1.375%
0.000%
0.000%
0.125%
0.250%
0.375%
For purposes of the foregoing, (a) if each of Moody’s, S&P and Fitch shall have a Debt Rating in effect and the Debt Ratings established by such rating
agencies shall fall within different Levels in the foregoing table, the Applicable Rate shall be based on the Level in which two of such Ratings shall fall or, if there shall be
no such Level, on the Level in which the second highest of the three Debt Ratings shall fall; (b) if only two of S&P, Moody’s and Fitch
2
shall have Debt Ratings in effect, then the Applicable Rate shall be based on the Level in which the higher Debt Rating shall fall unless one of such Debt Ratings is two or
more Levels lower than the other, in which case the Applicable Rate shall be based on the Level next above that of the lower of the two Debt Ratings; (c) if only one of
S&P, Moody’s and Fitch shall have a Debt Rating in effect, then the Applicable Rate shall be based on the Level next below that in which such Debt Rating shall fall; and
(d) if none of Moody’s, S&P and Fitch shall have a Debt Rating in effect, then the Applicable Rate shall be based on Level 5. If the rating system of S&P, Moody’s or
Fitch shall change, the Borrower and the Lenders shall negotiate in good faith to amend this definition to reflect such changed rating system and, pending the effectiveness
of any such amendment, the Applicable Rate shall be determined as provided above as if the affected rating agency did not have a Debt Rating in effect. For the avoidance
of doubt, Level 1 in the table above is the “highest” Level and Level 5 is the “lowest” Level.
Each change in the Applicable Rate, if any, resulting from a publicly announced change in a Debt Rating shall be effective, in the case of an upgrade,
during the period commencing on the date of delivery by the Borrower to the Administrative Agent of notice thereof pursuant to Section 7.03(c) and ending on the date
immediately preceding the effective date of the next such change and, in the case of a downgrade, during the period commencing on the date of the public announcement
thereof and ending on the date immediately preceding the effective date of the next such change.
Determinations by the Administrative Agent of the appropriate Level shall be conclusive absent manifest error.
that administers or manages a Lender.
“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity
for herein.
“Arrangers” means JPMorgan and BofA Securities, Inc., in their capacities as joint lead arrangers and joint bookrunners for the term loan facility provided
“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any Person
whose consent is required by Section 11.07(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit D or any other form (including electronic
documentation generated by use of an electronic platform) approved by the Administrative Agent.
“Attributable Principal Amount” means (a) in the case of capital leases, the amount of capital lease obligations determined in accordance with GAAP, (b) in
the case of Synthetic Leases, an amount determined by capitalization of the remaining lease payments thereunder as if it were a capital lease determined in accordance
with GAAP, (c) in the case of Securitization Transactions, the outstanding principal amount of the financing thereunder, after taking into account reserve accounts and
making appropriate adjustments, as determined by the Administrative Agent in its reasonable judgment and (d) in the case of any Sale and Leaseback Transaction, the
present value (discounted in accordance with GAAP at the debt rate implied in the applicable lease) of the obligations of the lessee for rental payments during the term of
such lease.
3
“Availability Period” means the period from and including the Restatement Effective Date to, but excluding, the Commitment Outside Date.
“Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark (or
component thereof) or payment period for interest calculated with reference to such Benchmark, as applicable, that is or may be used for determining the length of an
Interest Period for any term rate or otherwise for determining any frequency of making payments of interest calculated pursuant to this Agreement as of such date and not
including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 3.03(b)(v).
Affected Financial Institution.
“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an
“Bail-In Legislation” means (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament
and of the Council of the European Union, the implementing Law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation
Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other Law applicable in
the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation,
administration or other insolvency proceedings).
“Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such
day plus ½ of 1% per annum and (c) the Adjusted LIBO Rate on such day (or, if such day is not a Business Day, the immediately preceding Business Day) for a deposit in
Dollars with a maturity of one month plus 1% per annum. For purposes of clause (c) above, the Adjusted LIBO Rate for any day shall be based on the LIBO Screen Rate
at approximately 11:00 a.m., London time, on such day for deposits in Dollars with a maturity of one month. Any change in the Base Rate due to a change in the Prime
Rate, the NYFRB Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the
Adjusted LIBO Rate, respectively. If the Base Rate is being used as an alternate rate of interest pursuant to Section 3.03 (for the avoidance of doubt, only until the
Benchmark Replacement has been determined pursuant to Section 3.03(b)), then, for purposes of clause (c) above, the Adjusted LIBO Rate shall be deemed to be zero.
“Base Rate Borrowing” means a Borrowing comprised of Base Rate Loans.
“Base Rate Loan” means a Loan that bears interest based on the Base Rate.
“Benchmark” means, initially, the LIBO Rate; provided that if a Benchmark Transition Event, a Term SOFR Transition Event, an Early Opt-in Election or
an Other Benchmark Rate Election, as applicable, and its related Benchmark Replacement Date have occurred with respect to the LIBO Rate or the then-current
Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate
pursuant to Section 3.03(b)(i) or Section 3.03(b)(ii).
4
“Benchmark Replacement” means, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative
Agent for the applicable Benchmark Replacement Date; provided that, in the case of an Other Benchmark Rate Election, “Benchmark Replacement” shall mean the
alternative set forth in clause (3) below:
(1) the sum of: (a) Term SOFR and (b) the related Benchmark Replacement Adjustment;
(2) the sum of: (a) Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment;
(3) the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower as the replacement for the then-current
Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism
for determining such a rate by the Relevant Governmental Body and/or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a
replacement for the then-current Benchmark for Dollar-denominated syndicated credit facilities at such time in the United States and (b) the related Benchmark
Replacement Adjustment;
provided that, in the case of clause (1) or (2), such Unadjusted Benchmark Replacement is displayed on a screen or other information service that publishes
such rate from time to time as selected by the Administrative Agent in its reasonable discretion; provided further that, in the case of clause (3), when such clause is used to
determine the Benchmark Replacement in connection with the occurrence of an Other Benchmark Rate Election, the alternate benchmark rate selected by the
Administrative Agent and the Borrower shall be the term benchmark rate that is used in lieu of a London interbank offered rate-based rate in the relevant other Dollar-
denominated syndicated credit facilities; provided, further, that, notwithstanding anything to the contrary in this Agreement or in any other Loan Document, upon the
occurrence of a Term SOFR Transition Event and the delivery of a Term SOFR Notice, on the applicable Benchmark Replacement Date the “Benchmark Replacement”
shall revert to and shall be deemed to be the sum of (a) Term SOFR and (b) the related Benchmark Replacement Adjustment, as set forth in clause (1) of this definition
(subject to the first proviso above).
deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
If the Benchmark Replacement as determined pursuant to clause (1), (2) or (3) above would be less than the Floor, the Benchmark Replacement will be
Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement:
“Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark
5
determined by the Administrative Agent:
(1) for purposes of clauses (1) and (2) of the definition of “Benchmark Replacement”, the first alternative set forth in the order below that can be
(a) the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) as
of the Reference Time such Benchmark Replacement is first set for such Interest Period that has been selected or recommended by the Relevant Governmental
Body for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for the applicable Corresponding Tenor;
(b) the spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for
such Interest Period that would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective upon an index cessation event
with respect to such Benchmark for the applicable Corresponding Tenor; and
(2) for purposes of clause (3) of the definition of “Benchmark Replacement”, the spread adjustment, or method for calculating or determining such spread
adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower for the applicable Corresponding
Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the
replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement
Date and/or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment,
for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities at such time in the
United States;
Replacement Adjustment from time to time as selected by the Administrative Agent in its reasonable discretion.
provided that, in the case of clause (1) above, such adjustment is displayed on a screen or other information service that publishes such Benchmark
“Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement, any technical, administrative or operational changes
(including changes to the definition of “Base Rate”, the definition of “Business Day”, the definition of “Interest Period”, timing and frequency of determining rates and
making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, applicability and length of lookback periods, the
applicability of breakage provisions and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the
adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent
with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative
Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative
Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
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Benchmark:
“Benchmark Replacement Date” means, with respect to any Benchmark, the earliest to occur of the following events with respect to such then-current
(1) in the case of clause (1) or (2) of the definition of “Benchmark Transition Event”, the later of (a) the date of the public statement or publication of
information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or
indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof);
(2) in the case of clause (3) of the definition of “Benchmark Transition Event”, the first date on which such Benchmark (or the published component used
in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no
longer representative; provided that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (3)
and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date; or
pursuant to Section 3.03(b)(ii); or
(3) in the case of a Term SOFR Transition Event, the date that is 30 days after the date a Term SOFR Notice is provided to the Lenders and the Borrower
(4) in the case of an Early Opt-in Election or an Other Benchmark Rate Election, the sixth Business Day after the date notice of such Early Opt-in Election
or an Other Benchmark Rate Election, as applicable, is provided to the Lenders, so long as the Administrative Agent has not received, by 5:00 p.m., New York City time,
on the fifth Business Day after the date notice of such Early Opt-in Election or Other Benchmark Rate Election, as applicable, is provided to the Lenders, written notice of
objection to such Early Opt-in Election or Other Benchmark Rate Election, as applicable, from Lenders comprising the Required Lenders.
For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time
in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the
“Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable
event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
current Benchmark:
“Benchmark Transition Event” means, with respect to any Benchmark, the occurrence of one or more of the following events with respect to such then-
(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the
calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof),
permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available
Tenor of such Benchmark (or such component thereof);
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(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used
in the calculation thereof), the FRB, the NYFRB, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component thereof), a
resolution authority with jurisdiction over the administrator for such Benchmark (or such component thereof) or a court or an entity with similar insolvency or resolution
authority over the administrator for such Benchmark (or such component thereof), in each case which states that the administrator of such Benchmark (or such component
thereof) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of
such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used
in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no
longer be, representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or
publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the
calculation thereof).
“Benchmark Unavailability Period” means, with respect to any Benchmark, the period (if any) (x) beginning at the time that a Benchmark Replacement
Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced such then-current Benchmark for all purposes
hereunder and under any Loan Document in accordance with Section 3.03 and (y) ending at the time that a Benchmark Replacement has replaced such then-current
Benchmark for all purposes hereunder and under any other Loan Document in accordance with Section 3.03.
“Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
“Benefit Plan” means (a) an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in
Section 4975 of the Internal Revenue Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or
Section 4975 of the Internal Revenue Code) the assets of any such “employee benefit plan” or “plan”.
“Borrower” has the meaning specified in the preamble hereto.
“Borrower Materials” has the meaning specified in Section 7.02.
“Borrowing” means Loans of the same Type, converted or continued on the same date and, in the case of LIBOR Loans, having the same Interest Period.
“Business Day” means any day that is not a Saturday, a Sunday or any other day on which commercial banks in New York City are authorized or required
by applicable Law to remain closed; provided that when used in connection with a LIBOR Loan, the term “Business Day” shall also exclude any day on which banks are
not open for dealings in Dollar deposits in the London interbank market or any day on which banks in London are not open for general business.
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“Change in Law” means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of any Law, (b) any change in any
Law or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule,
guideline or directive (whether or not having the force of Law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the
Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all
requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar
authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the
date enacted, adopted, promulgated or issued.
“Change of Control” means an event or series of events by which: (a) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934) acquires directly or indirectly, beneficially or of record, shares representing more than 35% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of the Borrower or any Person directly or indirectly Controlling the Borrower; or (b) a majority of the members of
the board of directors or other equivalent governing body of the Borrower cease to be composed of individuals (i) who were members of that board of directors on the
Restatement Effective Date, (ii) whose election or nomination to that board of directors or equivalent governing body was approved by individuals referred to in clause (i)
above constituting at the time of such election or nomination at least two-thirds of that board of directors or equivalent governing body or (iii) whose election or
nomination to that board of directors or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of
such election or nomination at least two-thirds of that board of directors or equivalent governing body.
“Closing Date” means August 14, 2019.
“Commitment” means, as to each Lender, the obligation of such Lender to make Loans hereunder, expressed as an amount representing the maximum
aggregate principal amount of the Loans to be made by such Lender hereunder, as such amount is set forth with respect to such Lender as its “Commitment” on
Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, and as such amount may be adjusted from time
to time in accordance with this Agreement. The aggregate amount of the Commitments on the Restatement Effective Date is $750,000,000.
“Commitment Outside Date” means the date that is 364 days after the Restatement Effective Date.
“Compliance Certificate” means a certificate substantially in the form of Exhibit C.
“Consolidated EBITDA” means, for any period, for the Consolidated Group, an amount equal to the sum of (a) Consolidated Net Income for such period
plus (b) the following, in each case (other than in the case of clause (x) below) to the extent deducted in calculating such Consolidated Net Income, without duplication: (i)
Consolidated Interest Charges for such period, (ii) the provision for federal, state, local and foreign income taxes payable by the Consolidated Group for such period, (iii)
the amount of depreciation and amortization expense for such period, (iv) non-cash expenses for such period (excluding any non-cash expense to the extent that it
represents an accrual of or reserve for cash payments in any future period), (v) non-cash goodwill impairment charges for such period, (vi) any non‑cash loss for such
period attributable to the mark‑to‑market adjustments in the valuation of pension liabilities (to the extent the cash
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impact resulting from such loss has not been realized) in accordance with FASB ASC 715, (vii) any fees, expenses or charges for such period (other than depreciation or
amortization expense) related to any Acquisition, Disposition, issuance of equity interests, other transactions (excluding intercompany transactions) permitted by Section
8.02, or the incurrence of Indebtedness not prohibited by this Agreement (including any refinancing or amendment thereof) (in each case, whether or not consummated),
including, but not limited to, such fees, expenses or charges related to this Agreement and the other Loan Documents and any amendment or other modification of this
Agreement or the other Loan Documents, (viii) any expense for such period to the extent that a corresponding amount is received during such period in cash by the
Borrower or any of its Subsidiaries under any agreement providing for indemnification or reimbursement of such expenses, (ix) any expense with respect to liability or
casualty events or business interruption to the extent reimbursed to the Borrower or any of its Subsidiaries during such period by third party insurance, and (x) the amount
of dividends, distributions or other payments (including any ordinary course dividend, distribution or other payment) that are actually received in cash (or converted into
cash) for such period by a member of the Consolidated Group from any Person that is not a member of the Consolidated Group or otherwise in respect of any
unconsolidated investment, minus (c) to the extent included in calculating such Consolidated Net Income, (i) non-cash income for such period (excluding any non-cash
income to the extent that it represents cash receipts in any future period) and (ii) any non‑cash gains for such period attributable to the mark‑to‑market adjustments in the
valuation of pension liabilities in accordance with FASB ASC 715, all as determined in accordance with GAAP.
“Consolidated Funded Debt” means Funded Debt of the Consolidated Group determined on a consolidated basis in accordance with GAAP.
“Consolidated Group” means the Borrower and its consolidated Subsidiaries as determined in accordance with GAAP.
“Consolidated Interest Charges” means, for any period, for the Consolidated Group, all interest expense, including the amortization of debt discount and
premium, the interest component under capital leases and the implied interest component under Securitization Transactions, in each case on a consolidated basis
determined in accordance with GAAP.
“Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (a) the difference of (i) Consolidated Funded Debt as of such date minus
(ii) Unrestricted Cash as of such date to (b) Consolidated EBITDA for the period of the four fiscal quarters ending on such date.
“Consolidated Net Income” means, for any period, for the Consolidated Group, the sum, without duplication, of (a) net income of the Consolidated Group
(excluding items reported as nonrecurring or unusual in the consolidated financial statements of the Borrower and the Consolidated Group and related tax effects) for such
period minus (b) to the extent included in the amount determined pursuant to clause (a) above, the income of any Subsidiary to the extent the payment of such income in
the form of a distribution or repayment of any Indebtedness to the Borrower or a Subsidiary is not permitted, whether on account of any Organization Document
restriction, any Contractual Obligation or any Law applicable to such Subsidiary, all as determined in accordance with GAAP.
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“Consolidated Net Tangible Assets” means, as of any date of determination, the Consolidated Total Assets less goodwill and intangibles (other than
intangibles arising from, or relating to, intellectual property, licenses or permits (including, but not limited to, emissions rights) of the Consolidated Group), in each case
calculated in accordance with GAAP; provided, that in the event that the Borrower or any of its Subsidiaries acquires any assets in connection with the Acquisition by the
Borrower and its Subsidiaries of another Person subsequent to the date as of which the Consolidated Net Tangible Assets is being calculated (the “Balance Sheet Date”)
but prior to the event for which the calculation of the Consolidated Net Tangible Assets is made, then the Consolidated Net Tangible Assets shall be calculated giving pro
forma effect to such Acquisition of assets, as if the same had occurred on or prior to the Balance Sheet Date.
balance sheet required to be delivered pursuant to Section 7.01 (or, prior to the first such delivery, referred to in Section 6.05).
“Consolidated Total Assets” means, as of any date of determination, the total consolidated assets of the Consolidated Group, as shown on the most recent
“Contractual Obligation” means, as to any Person, any provision of any Security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its property is bound.
“Control” has the meaning specified in the definition of “Affiliate”.
“Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having
approximately the same length (disregarding business day adjustment) as such Available Tenor.
“Covenant Modification Period” means the period commencing on May 11, 2020 and ending on December 31, 2021.
“Daily Simple SOFR” means, for any day, SOFR, with the conventions for this rate (which may include a lookback) being established by the
Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple
SOFR” for business loans; provided that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then
the Administrative Agent may establish another convention in its reasonable discretion.
“Debt Rating” means, as of any date of determination, the public rating as determined by any of S&P, Moody’s or Fitch of the Borrower’s non-credit-
enhanced, senior unsecured long-term debt.
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“Debtor Relief Laws” means the Bankruptcy Code of the United States and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally.
“Deed of Cross Security” means that certain Deed of Cross Security executed on or about November 1, 2019 by the Seller, Albemarle Wodgina and
Wodgina Lithium Operations Pty Ltd, an Australian proprietary limited company, and including each other similar deed of charge executed by a new participant or joint
venturer with respect to the Wodgina Lithium Joint Venture.
“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an
Event of Default.
“Default Rate” means an interest rate equal to the sum of (a) the Base Rate plus (b) the Applicable Rate applicable to Base Rate Loans plus (c) 2% per
annum; provided, however, that with respect to any principal of or interest on a LIBOR Loan, the Default Rate shall be an interest rate equal to the interest rate (including
any Applicable Rate) otherwise applicable to such Loan plus 2% per annum.
“Defaulting Lender” means, subject to Section 2.17(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of
the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result
of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable Default, shall be
specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any other Lender any other amount required to be paid by it
hereunder within two Business Days of the date when due, (b) has notified the Borrower or the Administrative Agent in writing that it does not intend to comply with its
funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan
hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any
applicable Default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request
by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding
obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the
Administrative Agent and the Borrower) or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief
Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or
liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity or (iii)
become the subject of a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in
such Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender
with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or
such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative
Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding
absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.17(b)) as of the date
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established therefor by the Administrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to the Borrower and each
Lender.
“Designated Jurisdiction” means, at any time, any country, region or territory that itself, at such time is the subject of any Sanction.
including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.
“Disposition” means the sale, transfer, license, lease or other disposition (including any Sale and Leaseback Transaction) of any property by any Person,
“Dollar” and “$” mean lawful money of the United States.
“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States.
“Early Opt-in Election” means, if the then-current Benchmark is the LIBO Rate, the occurrence of:
(a) a notification by the Administrative Agent to (or the request by the Borrower to the Administrative Agent to notify) each of the other parties
hereto that at least five currently outstanding Dollar-denominated syndicated credit facilities at such time contain (as a result of amendment or as originally
executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate (and such syndicated credit facilities are
identified in such notice and are publicly available for review), and
(b) the joint election by the Administrative Agent and the Borrower to trigger a fallback from LIBO Rate and the provision by the Administrative
Agent of written notice of such election to the Lenders.
“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision
of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c)
any financial institution established in an EEA Member Country which is a Subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to
consolidated supervision with its parent.
“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein and Norway.
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“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member
Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
with the intent to sign, authenticate or accept such contract or record.
“Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person
if any, as may be required under Section 11.07(b)(iii)).
“Eligible Assignee” means any Person that meets the requirements to be an assignee under Sections 11.07(b)(iii) and 11.07(b)(v) (subject to such consents,
“Environmental Laws” means any legally binding and applicable statute, law, regulation, ordinance, rule, judgment, order, decree, permit, concession,
grant, franchise, license, agreement or restriction imposed by any federal, state, local, and foreign Governmental Authority relating to human health and the natural
environment.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any of its Subsidiaries resulting from or caused by (a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c) the release or threatened release of any Hazardous Materials into the natural environment or
(d) any contract, agreement or other consensual arrangement pursuant to which environmental liability is assumed or imposed with respect to any of the foregoing.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the rules and regulations promulgated thereunder.
“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section
414(b) or (c) of the Internal Revenue Code (and Sections 414(m) and (o) of the Internal Revenue Code for purposes of provisions relating to Section 412 of the Internal
Revenue Code).
“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations
that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer
Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination
under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition
that constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f)
the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any
ERISA Affiliate.
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“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in
effect from time to time.
“Event of Default” has the meaning specified in Section 9.01.
“Excluded Taxes” means (a) in the case of the Administrative Agent and each Lender, Taxes imposed on or measured by its income or gross receipts,
branch profits Taxes, and franchise Taxes imposed on it, by any jurisdiction (i) as a result of the Administrative Agent or such Lender, as the case may be, being organized
under the Laws of or maintaining a lending office in such jurisdiction or (ii) that are Other Connection Taxes, (b) in the case of a Lender, any U.S. federal withholding
Taxes with respect to the Loans on amounts payable to or for the account of such Lender under any Loan Document pursuant to a Law in effect on the date on which such
Lender becomes a party to this Agreement (other than pursuant to an assignment made under Section 11.16) or such Lender changes its Lending Office, except, in each
case, to the extent that such Lender (or its assignor, if any) was entitled, at the time of the change in its Lending Office (or of the assignment), to receive additional
amounts from the Borrower with respect to such Taxes pursuant to Section 3.01, (c) any withholding Taxes imposed under FATCA and (d) any Taxes attributable to a
failure by a Lender to comply with Section 11.15.
“Existing Maturity Date” has the meaning specified in Section 2.15(a).
“Existing Syndicated Facility Agreement” has the meaning specified in the recitals hereto.
“Extending Lender” has the meaning specified in Section 2.15(b).
“Extension Closing Date” has the meaning specified in Section 2.15(a).
“Extension Lender Response Date” has the meaning specified in Section 2.15(b).
“FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.
“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code, as of the Closing Date (or any amended or successor version that is
substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered
into pursuant to Section 1471(b)(1) of the Internal Revenue Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental
agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Internal Revenue Code.
“FCA” has the meaning specified in Section 1.07.
“Federal Funds Effective Rate” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depository
institutions, as determined in such manner as shall be set forth on the NYFRB’s Website from time to time, and published on the next succeeding Business Day by the
NYFRB as the federal funds effective rate; provided that if such rate would be less than zero, such rate shall be deemed to be zero for all purposes of this Agreement.
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“Financial Covenant” means the covenant set forth in Section 8.06.
“Fitch” means Fitch Ratings, Inc., or any successor thereto.
renewal of this Agreement or otherwise) with respect to the LIBO Rate.
“Floor” means the benchmark rate floor, if any, provided in this Agreement initially (as of the execution of this Agreement, the modification, amendment or
“FRB” means the Board of Governors of the Federal Reserve System of the United States.
“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its activities.
“Funded Debt” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities
in accordance with GAAP:
(a) all obligations for borrowed money, whether current or long-term (including the Loans), and all obligations evidenced by bonds, debentures, notes, loan
agreements or other similar instruments, including convertible debt instruments;
(b) all purchase money indebtedness (including indebtedness and obligations in respect of conditional sales and title retention arrangements, except for
customary conditional sales and title retention arrangements with suppliers that are entered into in the ordinary course of business) and all indebtedness and
obligations in respect of the deferred purchase price of property or services (other than trade accounts payable incurred in the ordinary course of business and
payable on customary trade terms);
(c) all contingent obligations and unreimbursed drawings under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties,
surety bonds and similar instruments;
(d) the Attributable Principal Amount of capital leases and Synthetic Leases;
(e) the Attributable Principal Amount of Securitization Transactions;
(f) all preferred stock and comparable equity interests providing for mandatory redemption, sinking fund or other like payments prior to 91 days after the
latest Maturity Date then in effect;
(g) Guarantees in respect of Funded Debt of another Person; and
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(h) any Funded Debt described in clauses (a) through (g) above of any partnership or joint venture or other similar entity in which such Person is a general
partner or joint venturer, and, as such, has personal liability for such obligations, but only to the extent there is recourse to such Person for payment thereof.
For purposes hereof, the amount of Funded Debt shall be determined based on the outstanding principal amount in the case of borrowed money
indebtedness under clause (a) and purchase money indebtedness and the deferred purchase obligations under clause (b), based on the maximum amount available to be
drawn in the case of letter of credit obligations and the other obligations under clause (c), and based on the outstanding principal amount of Funded Debt that is the subject
of the Guarantees in the case of Guarantees under clause (g) or, if less, the amount expressly guaranteed.
pursuant to Section 2.01.
“Funding Date” means, with respect to any Loan or any Borrowing, the date on which such Loan, or the Loans comprising such Borrowing, is or are made
Standards Board Accounting Standards Codification, consistently applied and, subject to Section 1.03(a), as in effect from time to time.
“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Financial Accounting
“Governmental Authority” means any nation or government, any state or other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).
“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other
obligation, (ii) to purchase or lease property, Securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the
payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or
level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (iv) entered into for the purpose of
assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss
in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such
Indebtedness or other obligation is assumed by such Person. The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of
the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.
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“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes regulated pursuant to any
Environmental Law.
has annual revenues in excess of $25,000,000.
“Immaterial Subsidiary” means any Subsidiary of the Borrower that neither (a) owns assets with an aggregate book value in excess of $25,000,000 nor (b)
in accordance with GAAP:
“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities
(a) all Funded Debt;
(b) net obligations under any Swap Contract;
(c) Guarantees in respect of Indebtedness of another Person; and
(d) any Indebtedness described in clauses (a) through (c) above of any partnership or joint venture or other similar entity in which such Person is a general
partner or joint venturer, and, as such, has personal liability for such obligations, but only to the extent there is recourse to such Person for payment thereof.
For purposes hereof, the amount of Indebtedness shall be determined based on Swap Termination Value in the case of net obligations under Swap Contracts
under clause (c) and based on the outstanding principal amount of Indebtedness that is the subject of the Guarantees in the case of Guarantees under clause (d) or, if less,
the amount expressly guaranteed.
“Indemnified Taxes” means (a) Taxes other than Excluded Taxes and (b) to the extent not described in clause (a) above, Other Taxes.
“Indemnitee” has the meaning specified in Section 11.04(b).
“Information” has the meaning specified in Section 11.08.
“Interest Payment Date” means (a) as to any LIBOR Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date applicable to
such Loan; provided, however, that if any Interest Period for a LIBOR Loan exceeds three months, the respective dates that fall every three months after the beginning of
such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan, the last Business Day of each March, June, September and December and the
Maturity Date applicable to such Loan.
“Interest Period” means, as to each LIBOR Loan, the period commencing on the date such LIBOR Loan is disbursed or converted to or continued as a
LIBOR Loan and ending on the numerically corresponding day in the calendar month that is one, three or six months thereafter, as selected by the Borrower in the
applicable Loan Notice; provided that:
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(a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;
(b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and
(c) no Interest Period for any Loan shall extend beyond the Maturity Date applicable to such Loan.
“Internal Revenue Code” means the United States Internal Revenue Code of 1986, as amended.
“IRS” means the United States Internal Revenue Service.
“ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as
amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and
Derivatives Association, Inc. or such successor thereto.
“JPMorgan” means JPMorgan Chase Bank, N.A., and its successors.
“Laws” means, collectively, (a) all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and (b) all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with,
any Governmental Authority, in each case under this clause (b), having the force of law.
“Lender” means each of the Persons listed on Schedule 2.01 and any other Person that becomes a Lender pursuant to an Assignment and Assumption, other
than any such Person that shall have ceased to be a party hereto pursuant to an Assignment and Assumption.
foregoing Persons.
“Lender-Related Person” means the Administrative Agent (and any sub-agent thereof), the Arrangers, the Lenders and each Related Party of any of the
“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent which office may include any Affiliate of such Lender or any
domestic or foreign branch of such Lender or such Affiliate. Unless the context otherwise requires each reference to a Lender shall include its applicable Lending Office.
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“Liabilities” means any losses, claims (including intraparty claims), demands, damages or liabilities of any kind.
“LIBO Rate” means, with respect to any LIBOR Loan for any Interest Period, the LIBO Screen Rate as of 11:00 a.m., London time, on the day that is two
Business Days prior to the first day of such Interest Period.
“LIBO Screen Rate” means, in respect of the LIBO Rate for any Interest Period, or in respect of any determination of Base Rate pursuant to clause (c) of
the definition thereof, a rate per annum equal to the London interbank offered rate as administered by the ICE Benchmark Administration (or any other Person that takes
over the administration of such rate) for deposits in Dollars (for delivery on the first day of such Interest Period) with a term equivalent to the relevant period as displayed
on the Reuters screen page that displays such rate (currently LIBOR01 or LIBOR02) (or, in the event such rate does not appear on a page of the Reuters screen, on the
appropriate page of such other information service that publishes such rate as shall be selected by the Administrative Agent from time to time in its reasonable discretion);
provided that if the LIBO Screen Rate determined as provided above, would be less than zero, the LIBO Screen Rate shall be deemed to be zero.
“LIBOR Borrowing” means a Borrowing comprised of LIBOR Loans.
“LIBOR Loan” means a Loan that bears interest based on the Adjusted LIBO Rate. All LIBOR Loans shall be denominated in Dollars.
“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority
or other security interest or preferential arrangement of any kind or nature whatsoever (including any conditional sale or other title retention agreement, and any financing
lease having substantially the same economic effect as any of the foregoing).
“Loan” means any loan made by a Lender pursuant to Section 2.01.
“Loan Documents” means this Agreement, the Restatement Agreement and each Note.
“Loan Notice” means a notice of (a) a borrowing of Loans, (b) a conversion of any Borrowing from one Type to another Type or (c) a continuation of any
LIBOR Borrowing, in each case, pursuant to Section 2.02(a), which shall be substantially in the form of Exhibit A or such other form as may be approved by the
Administrative Agent, appropriately completed and signed by a Responsible Officer of the Borrower.
“Mandatory Restrictions” has the meaning specified in Section 1.06.
“Material Adverse Effect” means a material adverse change in, or a material adverse effect upon, (a) the operations, business, properties, liabilities (actual
or contingent) or financial condition of the Consolidated Group taken as a whole; (b) the ability of the Borrower to perform its material obligations under any Loan
Document to which it is a party; or (c) the legality, validity, binding effect or enforceability against the Borrower of any Loan Document to which it is a party.
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“Maturity Date” means, with respect to any Loan, the date that is 364 days after the Funding Date with respect to such Loan; provided that if any Lender
shall have consented to the extension of the Maturity Date with respect to the Loans held by such Lender pursuant to Section 2.15, then as to such Loans the “Maturity
Date” shall be the final scheduled maturity date as determined pursuant to such Section; provided further that, in each case, if such date is not a Business Day, the Maturity
Date shall be the next preceding Business Day.
“Maximum Rate” has the meaning specified in Section 11.10.
“MNPI” has the meaning specified in Section 7.02.
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.
“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.
“Non-Extending Lender” has the meaning specified in Section 2.15(b).
“Note” means a promissory note made by the Borrower in favor of a Lender evidencing Loans made by such Lender, substantially in the form of Exhibit B.
“NYFRB” means the Federal Reserve Bank of New York.
“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in
effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if none of such rates are published for any day
that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m., New York City time, on such day received by the
Administrative Agent from a federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates as so determined be less than
zero, such rate shall be deemed to be zero for purposes of this Agreement.
“NYFRB’s Website” means the website of the NYFRB at http://www.newyorkfed.org, or any successor source.
“Obligations” means, without duplication, (a) the Loans and (b) all advances to, and debts, liabilities, obligations, covenants and duties of, the Borrower
arising under any Loan Document or otherwise with respect to any Loan, whether direct or indirect (including those acquired by assumption), absolute or contingent, due
or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against the Borrower of any proceeding
under any Debtor Relief Laws naming it as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.
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“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.
“Organization Documents” means (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or
organization and operating agreement (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); and (c) with respect to any
partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any
agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the
jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.
“Other Benchmark Rate Election” means, if the then-current Benchmark is the LIBO Rate, the occurrence of:
(a) a request by the Borrower to the Administrative Agent to notify each of the other parties hereto that, at the determination of the Borrower, Dollar-
denominated syndicated credit facilities at such time contain (as a result of amendment or as originally executed), in lieu of a London interbank offered rate-based rate, a
term benchmark rate as a benchmark rate; and
(b) the Administrative Agent, in its sole discretion, and the Borrower jointly elect to trigger a fallback from the LIBO Rate and the provision, as applicable,
by the Administrative Agent of written notice of such election to the Borrower and the Lenders.
“Other Connection Taxes” means, with respect to any Lender or the Administrative Agent, Taxes imposed as a result of a present or former connection
between such Lender or the Administrative Agent, as the case may be, and the jurisdiction imposing such Tax (other than connections arising from such Lender or the
Administrative Agent, as the case may be, having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected
a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Taxes” has the meaning specified in Section 3.01(b).
“Overnight Bank Funding Rate” means, for any day, the rate comprised of both overnight federal funds and overnight eurodollar transactions denominated
in Dollars by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB as set forth on the NYFRB’s Website
from time to time, and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.
“Participant” has the meaning specified in Section 11.07(d).
“Participant Register” has the meaning specified in Section 11.07(d).
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“PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001,
Pub. L. 107-56, signed into law October 26, 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
“Payment” has the meaning specified in Section 10.04(b)(i).
“Payment Notice” has the meaning specified in Section 10.04(b)(ii).
“PBGC” means the Pension Benefit Guaranty Corporation.
“Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has
an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five plan years.
or other entity.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority
that is subject to Section 412 of the Internal Revenue Code or Title IV of ERISA, any ERISA Affiliate.
“Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Borrower or, with respect to any such plan
“Platform” has the meaning specified in Section 7.02.
“Prime Rate” means the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the United States or, if The Wall Street Journal ceases
to quote such rate, the highest per annum interest rate published by the FRB in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime
loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the FRB (as
determined by the Administrative Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as
being effective.
“Pro Forma Basis” means, for purposes of determining compliance with the Financial Covenant, that the subject Acquisition or Disposition and any related
incurrence or discharge of Indebtedness shall be deemed to have occurred as of the first day of the period of four consecutive fiscal quarters ending with the fiscal quarter
as of the end of which such compliance is being determined. Further, for purposes of making calculations on a “Pro Forma Basis” hereunder, (a) income statement items
(whether positive or negative) attributable to the property, entities or business units that are the subject of the subject Acquisition or Disposition shall be, in the case of
Acquisitions, included or, in the case of Dispositions, excluded to the extent relating to any period prior to the date of subject transaction, and (b) Indebtedness incurred or,
in the case of a Disposition, discharged in connection with the subject Acquisition or Disposition shall be deemed to have been incurred or, in the case of a Disposition,
discharged as of the first day of the applicable period (and interest expense shall be imputed for the applicable period assuming prevailing interest rates hereunder or
excluded based on actual interest accrued in accordance with GAAP).
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“Pro Rata Share” means, with respect to any Lender at any time, (a) when used in reference to the funding of any Loans or Borrowings or other matters
relating to Commitments, including when used in reference to ticking fees, a fraction (expressed as percentage, carried out to the ninth decimal place), the numerator of
which is the aggregate amount of the Commitment of such Lender at such time and the denominator of which is the aggregate amount of the Commitments of all Lenders
at such time, (b) when used in reference to any Borrowing, including prepayments of any Borrowing, a fraction (expressed as percentage, carried out to the ninth decimal
place), the numerator of which is the principal amount of the Loan of such Lender included in such Borrowing and the denominator is the aggregate principal amount of
such Borrowing and (c) when used for other purposes, including as used in Section 11.04(c), a fraction (expressed as percentage, carried out to the ninth decimal place),
the numerator of which is the sum of (i) the amount of the Commitments of such Lender at such time plus (ii) the aggregate principal amount of the Loans of such Lender
outstanding at such time and the denominator of which is the sum of (x) the aggregate amount of the Commitments of all Lenders at such time plus (y) the aggregate
principal amount of the Loans of all Lenders outstanding at such time.
“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
“Public Lender” has the meaning specified in Section 7.02.
“Reference Time” with respect to any setting of the then-current Benchmark means (a) if such Benchmark is the LIBO Rate, 11:00 a.m., London time, on
the day that is two London banking days preceding the date of such setting, and (b) if such Benchmark is not the LIBO Rate, the time determined by the Administrative
Agent in its reasonable discretion.
“Register” has the meaning specified in Section 11.07(c).
“Related Indemnitee” of an Indemnitee means (a) any controlling Person or controlled Affiliate of such Indemnitee, (b) the respective directors, officers or
employees of such Indemnitee or any of its controlling Persons or controlled Affiliates and (c) the respective agents of such Indemnitee or any of its controlling Persons or
controlled Affiliates, in the case of this clause (c), acting on behalf of, or at the express instructions of, such Indemnitee, controlling Person or such controlled affiliate;
provided that each reference to a controlling Person, controlled affiliate, director, officer or employee in this definition pertains solely to a controlling Person, controlled
Affiliate, director, officer or employee involved in the negotiation or syndication of this Agreement.
“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees,
administrators, managers, representatives and advisors of such Person and of such Person’s Affiliates.
“Relevant Governmental Body” means the FRB and/or the NYFRB, or a committee officially endorsed or convened by the FRB and/or the NYFRB or, in
each case, any successor thereto.
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Section 11.16.
waived.
“Replacement Lender” means any Person that is an Eligible Assignee and that agrees to assume interests, rights and obligations of any Lender pursuant to
“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the thirty-day notice period has been
“Required Lenders” means, at any time, Lenders holding Commitments and Loans representing in the aggregate more than 50% of the sum of the aggregate
amount of the Commitments of all Lenders at such time and the aggregate principal amount of the Loans of all Lenders outstanding at such time; provided that the
Commitment and Loans held by any Defaulting Lender shall be disregarded for purposes of making a determination of Required Lenders.
“Resolution Authority” means an EEA Resolution Authority or, with respect to any U.K. Financial Institution, a U.K. Resolution Authority.
“Responsible Officer” means the chief executive officer, president, chief financial officer, treasurer, assistant treasurer or a director of the Borrower and,
solely for purposes of the delivery of incumbency certificates pursuant to Section 5.01, a director, the secretary or any assistant secretary of the Borrower and, solely for
purposes of notices given pursuant to Article II, any of the foregoing officers and any other officer of the Borrower so designated by any of the foregoing officers in a
notice to the Administrative Agent or any other officer or employee of the Borrower designated in or pursuant to an agreement between the Borrower and the
Administrative Agent. Any document delivered hereunder that is signed by a Responsible Officer of the Borrower shall be conclusively presumed to have been authorized
by all necessary corporate, partnership and/or other action on the part of the Borrower and such Responsible Officer shall be conclusively presumed to have acted on
behalf of the Borrower.
“Restatement Agreement” means the Second Amendment and Restatement Agreement, dated as of December 10, 2021, among the Borrower, Albemarle
Germany, the Lenders party thereto and the Administrative Agent.
“Restatement Effective Date” has the meaning specified in the Restatement Agreement.
“Restricted Lender” has the meaning specified in Section 1.06.
“Reuters” means Thomson Reuters Corporation, Refinitiv or, in each case, any successor thereto.
“Revolving Credit Agreement” means that certain Credit Agreement dated as of June 21, 2018, as amended as of August 14, 2019 and May 11, 2020,
among the Borrower, certain of its Subsidiaries party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent and swing line lender, and any
refinancing or replacement thereof.
“S&P” means Standard & Poor’s Rating Services, a Standard & Poor’s Financial Services LLC business, and any successor thereto.
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“Sale and Leaseback Transaction” means, with respect to the Borrower or any Subsidiary, any arrangement, directly or indirectly, with any Person whereby
the Borrower or such Subsidiary shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter
rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold or transferred.
“Sanctions” means any economic or financial sanctions or trade embargoes administered or enforced by the United States Government (including, without
limitation, OFAC and the U.S. Department of State), the United Nations Security Council, the European Union, Her Majesty’s Treasury of the United Kingdom or other
relevant sanctions authority.
“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.
“Securitization Transaction” means any financing or factoring transaction (or series of such transactions) that has been or may be entered into by a member
of the Consolidated Group pursuant to which such member of the Consolidated Group may sell, convey or otherwise transfer, or may grant a security interest in, any
accounts receivable, payment intangibles, notes receivable, rights to future lease payments or residuals or other similar rights to payment to a special purpose Subsidiary
or Affiliate of such Person.
“Security” means all capital stock, voting trust certificates, bonds, debentures, instruments and other evidence of Indebtedness, whether or not secured,
convertible or subordinated, all certificates of interest, share or participation in, all certificates for the acquisition of, and all warrants, options and other rights to acquire,
any of the foregoing.
“Seller” means Wodgina Lithium Pty Ltd (ACN 611 488 931), a proprietary limited company incorporated under the laws of Australia.
“SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day published by the
SOFR Administrator on the SOFR Administrator’s Website at approximately 8:00 a.m., New York City time, on the immediately succeeding Business Day.
“SOFR Administrator” means the NYFRB (or a successor administrator of the secured overnight financing rate).
SOFR Administrator from time to time.
“SOFR Administrator’s Website” means the NYFRB’s Website or any successor source for the secured overnight financing rate identified as such by the
“Solvent” means, with respect to any Person as of a particular date, after giving full effect to rights of contribution against or reimbursement from other
Persons under applicable Law or any Contractual Obligation, that on such date (a) such Person is able to pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the ordinary course, (b) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s
ability to pay as such debts and liabilities as they mature in the ordinary course, (c) such Person is not engaged in a business or a transaction, and is not about to engage in
a business or a transaction, for which such Person’s assets would constitute unreasonably small capital after giving due consideration to the prevailing practice in the
industry in which such Person is engaged or is to engage, (d) the fair value of the assets of such Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, which for this purpose shall include rights of contribution in respect of
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obligations for which such Person has provided a Guarantee, and (e) the present fair saleable value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they become absolute and matured, which for this purpose shall include rights of contribution in respect
of obligations for which such Person has provided a Guarantee. In computing the amount of contingent liabilities at any time, it is intended that such liabilities will be
computed at the amount which, in light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual
or matured liability reduced by the amount of any contribution or indemnity that can reasonably be expected to be received.
“Specified Provision” has the meaning specified in Section 1.06.
“Statutory Reserve Rate” means a fraction (expressed as a decimal, carried out to five decimal places), the numerator of which is the number one and the
denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the FRB for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the FRB). Such reserve
percentages shall include those imposed pursuant to such Regulation D. LIBOR Loans shall be deemed to constitute eurocurrency funding and to be subject to such
reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.
“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares
or other interests having ordinary voting power for the election of directors or other governing body (other than shares or interests having such power only by reason of the
happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries
of the Borrower.
“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps, options or forward bond or forward
bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions,
currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts or any other similar transactions or any combination of any of the
foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any
and all transactions of any kind, and the related confirmations, that are subject to the terms and conditions of, or governed by, any form of master agreement published by
the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.
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“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s)
for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap
Contracts (which may include a Lender or any Affiliate of a Lender).
“Synthetic Lease” means any synthetic, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product where such
transaction is considered borrowed money indebtedness for tax purposes but is classified as an operating lease under GAAP.
charges imposed by any Governmental Authority, including any interest, penalties, and liabilities with respect thereto.
“Taxes” means all present or future taxes, duties, levies, imposts, deductions, assessments, fees, withholdings (including backup withholding) or similar
“Term SOFR” means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term rate based on SOFR that has
been selected or recommended by the Relevant Governmental Body.
“Term SOFR Notice” means a notification by the Administrative Agent to the Lenders and the Borrower of the occurrence of a Term SOFR Transition
Event.
“Term SOFR Transition Event” means the determination by the Administrative Agent that (a) Term SOFR has been recommended for use by the Relevant
Governmental Body, (b) the administration of Term SOFR is administratively feasible for the Administrative Agent and (c) a Benchmark Transition Event or an Early
Opt-in Election (and, for the avoidance of doubt, not in the case of an Other Benchmark Rate Election), as applicable, has previously occurred resulting in a Benchmark
Replacement in accordance with Section 3.03 that is not Term SOFR.
“Threshold Amount” means $100,000,000.
“Ticking Fee End Date” has the meaning specified in Section 2.09(a).
“Type” means, with respect to any Loan, its character as a Base Rate Loan or a LIBOR Loan.
“Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
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“Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA over the current value of that
Pension Plan’s assets, determined as of the date of the most recently completed actuarial valuation report for that Pension Plan in accordance with the assumptions used
for funding the Pension Plan pursuant to Section 412 of the Internal Revenue Code.
“United States” and “U.S.” mean the United States of America.
“Unrestricted Cash” means, at any time, cash and cash equivalents owned at such time by any member of the Consolidated Group, determined on a
consolidated basis in accordance with GAAP; provided that such cash and cash equivalents do not appear (and in accordance with GAAP would not be required to appear)
as “restricted” on the consolidated balance sheet of the Consolidated Group prepared as of such time in accordance with GAAP.
“U.K. Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended form time to time) promulgated
by the United Kingdom Prudential Regulation Authority) or any person subject to IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the
United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or
investment firms.
“U.K. Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any U.K.
Financial Institution.
“U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30) of the Internal Revenue Code.
agreement executed between the parties on or about November 1, 2019.
“Wodgina Lithium Joint Venture” means the unincorporated joint venture established between Albemarle Wodgina and the Seller pursuant to a joint venture
“Write-Down and Conversion Powers” means (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA
Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in
the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, any powers of the applicable Resolution Authority under the Bail-In Legislation to
cancel, reduce, modify or change the form of a liability of any U.K. Financial Institution or any contract or instrument under which that liability arises, to convert all or
part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had
been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of
those powers.
SECTION 1.02.
Other Interpretive Provisions.
With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:
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(a)
(b)
The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.
(i) The words “herein”, “hereto”, “hereof” and “hereunder” and words of similar import when used in any Loan Document shall refer to such Loan
Document as a whole and not to any particular provision thereof.
(ii)
referenced.
Article, Section, Exhibit and Schedule references are to the Loan Document in which such reference appears unless otherwise expressly
(iii)
The word “including” is by way of example and not limitation.
(iv)
The word “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other
writings, however evidenced, whether in physical or electronic form.
(v)
The word “will” will be construed to have the same meaning and effect as the word “shall”.
(vi)
The words “asset” and “property” will be construed to have the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, Securities, accounts and contract rights.
(vii) Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.
(viii) Except as otherwise provided herein and unless the context requires otherwise, any reference herein to any Person shall be construed to
include such Person’s successors and assigns (subject to any restrictions on assignment set forth herein) and, in the case of any Governmental Authority,
any other Governmental Authority that shall have succeeded to any or all functions thereof.
(c)
In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including”; the words “to”
and “until” each mean “to but excluding”; and the word “through” means “to and including”.
(d)
Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.
(e)
For all purposes under the Loan Documents, in connection with any division or plan of division under Delaware law (or any comparable event
under a different jurisdiction’s laws): (i) if any asset, right, obligation or liability of any Person becomes the asset, right, obligation or liability of a different Person,
then it shall be deemed to have been transferred from the original Person to the subsequent Person, and (ii) if any new Person comes into existence, such new
Person shall be deemed to have been organized and acquired on the first date of its existence by the holders of its Securities at such time.
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SECTION 1.03.
Accounting Terms.
(a)
All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial
ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP. Notwithstanding the foregoing,
(i) for purposes of determining compliance with any covenant (including the computation of the Financial Covenant) contained herein, Funded Debt of the Borrower and
its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 on financial liabilities shall be
disregarded, and (ii) for purposes of calculations made pursuant to the terms of this Agreement, the determination of whether a lease constitutes a capital lease, and the
amount of capital lease obligations arising therefrom, shall be made on the basis of GAAP without giving effect to any change to GAAP set forth in the Accounting
Standards Update No. 2016-02, Leases (Topic 842), issued by the Financial Accounting Standards Board on February 25, 2016, or any other updates or proposals issued
by the Financial Accounting Standards Board in connection therewith.
(b)
At the Borrower’s election, determinations of compliance with the Financial Covenant hereunder may be made on a Pro Forma Basis with respect to
any Acquisition, any Disposition of all of the equity interests of, or all or substantially all of the assets of, a Subsidiary or any Disposition of a line of business or a
division of the Borrower or a Subsidiary, in each case, consummated after the Restatement Effective Date; provided that with respect to any such Acquisition or
Disposition (i) the Borrower must elect to treat such Acquisition or Disposition on a Pro Forma Basis on or before the delivery of the Compliance Certificate relating to
the first fiscal quarter period ending after the date of the consummation of such Acquisition or Disposition, (ii) the Borrower must indicate such election on such
Compliance Certificate and (iii) such election shall be irrevocable. Absent the Borrower’s election to treat an Acquisition or a Disposition on a Pro Forma Basis in
accordance with this Section 1.03(b), determinations of compliance with the Financial Covenant hereunder shall not be made on a Pro Forma Basis with respect to such
Acquisition or Disposition.
(c)
The Borrower will provide a written summary of material changes in GAAP affecting the financial reporting of the Borrower or in the consistent
application thereof by the Borrower with each Compliance Certificate delivered in accordance with Section 7.02(b). If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative
Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with
GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required
under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving
effect to such change in GAAP.
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SECTION 1.04.
Rounding.
Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by
the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the
nearest number (with a rounding-up if there is no nearest number).
SECTION 1.05.
References to Agreements and Laws.
Unless otherwise expressly provided herein, (a) references to Organization Documents, agreements (including the Loan Documents) and other Contractual
Obligations shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such
amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document, and (b) references to any Law shall include all
statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Law.
SECTION 1.06.
Blocking Regulation.
In relation to any Lender that is subject to the regulations referred to below (each, a “Restricted Lender”), any representation, warranty or covenant set forth
herein that refers to Sanctions or Designated Jurisdictions (each, a “Specified Provision”) shall only apply for the benefit of such Restricted Lender to the extent that such
Specified Provision would not result in a violation of, conflict with or liability under Council Regulation (EC) 2271/96 (or any Law implementing such regulation in any
member state of the European Union) or any similar blocking or anti-boycott Law in Germany (including, in the case of Germany, section 7 foreign trade rules
(Auβenwirtschaftsverordnung – AWV) in connection with section 4 paragraph 1 foreign trade law (Auβenwirtschaftsgesetz – AWG)) or in the United Kingdom (the
“Mandatory Restrictions”). In the case of any consent or direction by Lenders in respect of any Specified Provision of which a Restricted Lender does not have the benefit
due to a Mandatory Restriction, then, notwithstanding anything to the contrary in the definition of Required Lenders, for so long as such Restricted Lender shall be subject
to a Mandatory Restriction, the Commitment and the aggregate outstanding principal amount of any Loans of such Restricted Lender will be disregarded for the purpose
of determining whether the requisite consent of the Lenders has been obtained or direction by the requisite Lenders has been made, it being agreed, however, that, unless,
in connection with any such determination, the Administrative Agent shall have received written notice from any Lender stating that such Lender is a Restricted Lender
with respect thereto, each Lender shall be presumed, in connection with such determination, not to be a Restricted Lender.
SECTION 1.07.
Interest Rate; LIBOR Notification.
The interest rate on a Loan may be derived from an interest rate benchmark that is, or may in the future become, the subject of regulatory reform.
Regulators have signaled the need to use alternative benchmark reference rates for some of these interest rate benchmarks and, as a result, such interest rate benchmarks
may cease to comply with applicable Laws and regulations, may be permanently discontinued, and/or the basis on which they are calculated may change. The London
interbank offered rate is intended to represent the rate at which contributing banks may obtain short-term borrowings from each other in the London interbank market. On
March 5, 2021, the U.K. Financial Conduct Authority (“FCA”) publicly announced that: (a) immediately after December 31, 2021, publication of the 1-week and 2-month
Dollar London
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interbank offered rate settings will permanently cease; (b) immediately after June 30, 2023, publication of the overnight and 12-month U.S. Dollar London interbank
offered rate settings will permanently cease; and (c) immediately after June 30, 2023, the 1-month, 3-month and 6-month Dollar London interbank offered rate settings
will cease to be provided or, subject to the FCA’s consideration of the case, be provided on a changed methodology (or “synthetic”) basis and no longer be representative
of the underlying market and economic reality they are intended to measure and that representativeness will not be restored. There is no assurance that dates announced by
the FCA will not change or that the administrator of the London interbank offered rate and/or regulators will not take further action that could impact the availability,
composition, or characteristics of the London interbank offered rate or the currencies and/or tenors for which the London interbank offered rate is published. Each party to
this Agreement should consult its own advisors to stay informed of any such developments. Public and private sector industry initiatives are currently underway to identify
new or alternative reference rates to be used in place of the London interbank offered rate. Upon the occurrence of a Benchmark Transition Event, a Term SOFR
Transition Event, an Early Opt-in Election or an Other Benchmark Rate Election, Section 3.03(b) provides a mechanism for determining an alternative rate of interest. The
Administrative Agent will promptly notify the Borrower, pursuant to Section 3.03(b)(iv), of any change to the reference rate upon which the interest rate on LIBOR Loans
is based. However, the Administrative Agent does not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration,
submission, performance or any other matter related to the London interbank offered rate or other rates in the definition of “LIBO Rate” or with respect to any alternative
or successor rate thereto, or replacement rate thereof (including, without limitation, (i) any such alternative, successor or replacement rate implemented pursuant to Section
3.03(b), whether upon the occurrence of a Benchmark Transition Event, a Term SOFR Transition Event, an Early Opt-in Election or an Other Benchmark Rate Election,
and (ii) the implementation of any Benchmark Replacement Conforming Changes pursuant to Section 3.03(b)(ii)), including, without limitation, whether the composition
or characteristics of any such alternative, successor or replacement reference rate will be similar to, or produce the same value or economic equivalence of, the LIBO Rate,
or have the same volume or liquidity as did the LIBO Rate prior to its discontinuance or unavailability. The Administrative Agent and its Affiliates and/or other related
entities may engage in transactions that affect the calculation of any alternative, successor or alternative rate (including any Benchmark Replacement) and/or any relevant
adjustments thereto, in each case, in a manner adverse to the Borrower. The Administrative Agent may select information sources or services in its reasonable discretion to
ascertain the LIBO Rate, any component thereof or rates referenced in the definition thereof, in each case pursuant to the terms of this Agreement, and shall have no
liability to the Borrower, any Lender or any other Person for damages of any kind, including direct or indirect, special, punitive, incidental or consequential damages,
costs, losses or expenses (whether in tort, contract or otherwise and whether at law or in equity), for any error or calculation of any such rate (or component thereof)
provided by any such information source or service.
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SECTION 2.01. Loans.
ARTICLE II
The Commitments and Loans
Subject to the terms and conditions set forth herein, each Lender severally, but not jointly, agrees to make, from time to time during the Availability Period,
Loans to the Borrower denominated in Dollars; provided that (a) the principal amount of any Loan to be made by any Lender shall not exceed its Commitment as in effect
immediately prior to the time such Loan is made and (b) Loans shall be made on no more than four Funding Dates. Loans may consist of Base Rate Loans or LIBOR
Loans, or a combination thereof, as the Borrower may request in accordance herewith. Amounts repaid or prepaid in respect of Loans may not be reborrowed.
SECTION 2.02. Borrowings, Conversions and Continuations of Loans.
(a)
Each borrowing of Loans, each conversion of any Borrowing from one Type to another Type and each continuation of any LIBOR Borrowing shall
be made upon delivery to the Administrative Agent by the Borrower of a Loan Notice. Each Loan Notice must be received by the Administrative Agent not later than (i)
12:00 noon, New York City time, three Business Days prior to the requested date of any borrowing of, or conversion to or continuation of, LIBOR Loans and (ii) 10:00
a.m., New York City time, on the requested date of any borrowing of, or conversion to, Base Rate Loans. Each Loan Notice shall be irrevocable. At the commencement of
each Interest Period for any LIBOR Borrowing, such Borrowing shall be in a principal amount equal to $5,000,000 or a whole multiple of $1,000,000 in excess thereof;
provided that a LIBOR Borrowing that results from a continuation of an outstanding LIBOR Borrowing may be in a principal amount that is equal to such outstanding
Borrowing. On its Funding Date, each Base Rate Borrowing shall be in a principal amount equal to $5,000,000 or a whole multiple equal of $1,000,000 in excess thereof.
Each Loan Notice shall specify (A) whether a borrowing of Loans, a conversion of any Borrowing from one Type to the other or a continuation of any LIBOR Borrowing
is being requested, (B) the requested date of the borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (C) the aggregate principal
amount of Loans to be borrowed or the existing Borrowing that is to be converted or continued, (D) the Type of Loans to be borrowed or to which the existing Borrowing
is to be converted, (E) if applicable, the duration of the Interest Period with respect thereto and (F) in the case of a borrowing of Loans, the location and number of the
account of the Borrower to which funds are to be disbursed (which account shall be reasonably acceptable to the Administrative Agent). The Borrower may elect different
conversion or continuation options with respect to different portions of the affected existing Borrowing (and all references herein to conversion or continuation of a
Borrowing shall be understood to include any such election of different options with respect thereto), in which case each such portion shall be allocated ratably among the
Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. If the Borrower fails to
specify a Type of the requested Loans in a Loan Notice, then the applicable Loans will be made as Base Rate Loans. If the Borrower fails to timely deliver a Loan Notice
requesting a conversion or continuation of any LIBOR Borrowing, then, on the last day of the Interest Period applicable thereto, such Borrowing shall automatically
convert to a Base Rate Borrowing. If the Borrower requests a borrowing of LIBOR Loans or conversion to or continuation of a LIBOR Borrowing in any Loan Notice, but
fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.
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(b)
Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each Lender of the details thereof and, in the case of a Loan
Notice requesting a borrowing of Loans, of its Pro Rata Share of such Loans. If no timely Loan Notice with respect to a conversion or continuation of any LIBOR
Borrowing is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans as described in
Section 2.02(a). Each Lender shall make the amount of its Loan available to the Administrative Agent in immediately available funds by wire transfer, to the account of
the Administrative Agent most recently designated by it for such purpose by notice to the Lenders, not later than 1:00 p.m., New York City time, on the Business Day
specified in the applicable Loan Notice. Upon satisfaction (or waiver in accordance with Section 11.01) of the applicable conditions set forth in Section 5.02, the
Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent by wire transfer of such funds in
accordance with instructions set forth in the applicable Loan Notice.
Except as otherwise provided herein, a LIBOR Borrowing may be continued or converted only on the last day of the Interest Period for such LIBOR
Borrowing. During the existence of a Default or Event of Default, no Borrowing may be converted to or continued as a LIBOR Borrowing without the consent of the
Required Lenders.
(c)
The applicable Base Rate or the Adjusted LIBO Rate shall be determined by the Administrative Agent in accordance with the terms hereof. The
Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for LIBOR Loans upon determination of
such interest rate. The determination of the Base Rate or the Adjusted LIBO Rate by the Administrative Agent shall be conclusive in the absence of manifest error.
(d)
there shall not be more than 10 Interest Periods in effect with respect to Loans.
(e)
After giving effect to all Borrowings, all conversions of Borrowings from one Type to another Type and all continuations of LIBOR Borrowings,
SECTION 2.03. [Reserved.]
SECTION 2.04. [Reserved.]
SECTION 2.05. Optional Prepayments.
The Borrower may, upon notice from the Borrower to the Administrative Agent, at any time or from time to time voluntarily prepay any Borrowing in
whole or in part, without premium or penalty; provided that (a) such notice must be in a form reasonably acceptable to the Administrative Agent and be received by the
Administrative Agent not later than 12:00 noon, New York City time, (i) three Business Days prior to any date of prepayment of LIBOR Loans and (ii) on the date of
prepayment of Base Rate Loans and (b) any prepayment of any Borrowing shall be in a principal amount equal to $5,000,000 or a whole multiple of $1,000,000 in excess
thereof, or, if less, the entire principal amount of such Borrowing then outstanding. Each such notice shall specify the date and amount of such prepayment and the
Borrowing or Borrowings to be prepaid. The Administrative Agent will promptly notify each Lender of its receipt of each such notice and of the amount of such Lender’s
Pro Rata Share of such prepayment. If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice
shall be due and payable on the date specified therein; provided that, subject to Section 3.05, such notice may state that such notice is conditioned upon the occurrence of
one or more events specified therein, in which case such notice may be revoked by the Borrower by notice to the Administrative Agent on or prior to the specified date of
prepayment if such condition is not satisfied and, in the case of such revocation, the Borrower shall not be required to make such prepayment and such prepayment
amount shall cease to be
35
due and payable. Any prepayment of a Loan shall be accompanied by all accrued interest thereon and, in the case of any prepayment of LIBOR Loans on any day other
than the last day of the Interest Period applicable thereto, shall be subject to Section 3.05. Each prepayment of a Borrowing shall be applied to the applicable Loans of the
Lenders in accordance with their respective Pro Rata Shares thereof.
SECTION 2.06. Termination or Reduction of Commitments.
Unless previously terminated, the Commitments shall automatically terminate at 5:00 p.m., New York City time, on the Commitment Outside Date.
The Commitment of each Lender shall be reduced automatically and without further action upon the making by such Lender of any Loan by an amount equal to the
principal amount of such Loan.
(a)
(b)
Prior to the Commitment Outside Date, the Borrower may, upon notice from the Borrower to the Administrative Agent, terminate or permanently
reduce the Commitments; provided that (i) any such notice shall be received by the Administrative Agent not later than 12:00 noon, New York City time, one Business
Day prior to the date of termination or reduction and (ii) any such partial reduction shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in
excess thereof. Each notice delivered by the Borrower pursuant to this Section 2.06(b) shall be irrevocable; provided that any such notice may state that such notice is
conditioned upon the occurrence of one or more events specified therein, in which case such notice may be revoked by the Borrower by notice to the Administrative Agent
on or prior to the specified date of termination or reduction if such condition is not satisfied. The Administrative Agent will promptly notify the Lenders of any such notice
of termination or reduction of the Commitments.
(c)
Any reduction of the Commitments pursuant to Section 2.06(b) shall be applied to the Commitment of each Lender according to its Pro Rata Share
thereof. Any termination or reduction of the Commitments shall be permanent. All unpaid ticking fees accrued until the effective date of any termination or reduction of
the Commitments (in the case of any reduction, in respect of the aggregate amount of the Commitments subject to such reduction) shall be paid on the effective date of
such termination or reduction.
SECTION 2.07. Repayment of Loans.
The Borrower shall pay to the Administrative Agent, for the account of each Lender, the then unpaid principal amount of each Loan of such Lender on the
Maturity Date applicable to such Loan.
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SECTION 2.08. Interest.
Subject to the provisions of Section 2.08(b), (i) each LIBOR Loan shall bear interest on the outstanding principal amount thereof for each Interest
Period at a rate per annum equal to the sum of (A) the Adjusted LIBO Rate for such Interest Period plus (B) the Applicable Rate and (ii) each Base Rate Loan shall bear
interest on the outstanding principal amount thereof at a rate per annum equal to the sum of (A) the Base Rate plus (B) the Applicable Rate.
(a)
(i) If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent
permitted by applicable Laws.
(b)
(ii) If any amount (other than principal of any Loan) payable by the Borrower under any Loan Document is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders, such amount shall thereafter
bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iii) Without duplication of clauses (i) and (ii) above, if any Event of Default under Section 9.01(f) or 9.01(g) arises, the outstanding Obligations shall
thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.
(iv) Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.
Interest on each Loan shall be due and payable by the Borrower in arrears on each Interest Payment Date applicable thereto and at such other times
as may be specified herein. Interest hereunder shall be due and payable by the Borrower in accordance with the terms hereof before and after judgment, and before and
after the commencement of any proceeding under any Debtor Relief Law.
(c)
SECTION 2.09. Fees.
(a)
Ticking Fees. The Borrower shall pay to the Administrative Agent, for the account of each Lender (subject to Section 2.17 in the case of any
Defaulting Lender), a ticking fee in Dollars, which shall accrue at a rate of 0.100% per annum on the daily amount of the Commitment of such Lender during the period
(i) from and including the date that is 60 days after the Restatement Effective Date and (ii) to but excluding the date of the termination or expiration of the Commitment of
such Lender (the date in this clause (ii) being referred to as the “Ticking Fee End Date”). Accrued and unpaid ticking fees shall be due and payable (x) with respect to the
ticking fees accrued through and including the last day of March, June, September and December of each year, in arrears on the fifteenth day following such last day,
(y) on the Ticking Fee End Date and (z) at such other times as may be specified herein.
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(b)
(i)
Other Fees.
The Borrower shall pay to the Administrative Agent for its own account an annual administrative fee in an amount and at the times as separately
agreed in writing by the Borrower and the Administrative Agent. Such fee shall be fully earned when paid and shall not be refundable for any reason whatsoever.
(ii)
The Borrower shall pay to the Arrangers and the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the
times so agreed. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.
SECTION 2.10. Computation of Interest and Fees.
All computations of interest for Base Rate Loans when the Base Rate is determined by reference to the Prime Rate shall be made on the basis of a year of
365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days
elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on
which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid; provided that any Loan that is
repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one day. Each determination by the Administrative Agent of an interest rate
or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.
SECTION 2.11. Evidence of Debt.
The Loans made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the
ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of
the Loans made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and
records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to
such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts or records. Each Lender may attach
schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.
SECTION 2.12. Payments Generally; Administrative Agent’s Clawback.
(a)
General. All payments to be made by the Borrower shall be made free and clear of and without condition or deduction for any counterclaim,
defense, recoupment or set-off. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the
account of the Lenders to which such payment is owed (except that payments pursuant to Sections 3.01, 3.04, 3.05 and 11.04 shall be made directly to the Persons entitled
thereto), in Dollars by wire transfer of immediately available funds not later than 2:00 p.m., New York City time, on the date specified herein. All such payments to the
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Administrative Agent shall be made to such account as may be specified by the Administrative Agent from time to time by notice to the Borrower. The Administrative
Agent will promptly distribute to each Lender its Pro Rata Share (or other applicable share as provided herein) of such payment in like funds as received by wire transfer
to such Lender’s Lending Office. All payments received by the Administrative Agent after 2:00 p.m., New York City time, shall in each case be deemed received on the
next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrower shall come due on a day other than a
Business Day, such payment shall be made on the next following Business Day, except as otherwise set forth in the definition of “Interest Period” or “Maturity Date”, and
such extension of time shall be reflected in computing interest or fees, as the case may be.
(b)
(i) Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to
the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately
available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the
Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of (1) the NYFRB Rate and (2) a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative
Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and
such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the
amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so
paid shall constitute such Lender’s Loan included in such Borrowing. Any payment by the Borrower shall be without prejudice to any claim the Borrower may have
against a Lender that shall have failed to make such payment to the Administrative Agent.
(ii)
Payments by the Borrower; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders hereunder that the Borrower will not make such payment,
the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such Lender in immediately available funds with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, the greater of (A) the NYFRB Rate and
(B) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or
similar fees customarily charged by the Administrative Agent in connection with the foregoing.
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A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this Section 2.12(b) shall be conclusive,
absent manifest error.
(c)
Failure to Satisfy Conditions Precedent. In the event that any Lender makes available to the Administrative Agent funds for any Loan to be made by
such Lender to the Borrower as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent
because the conditions to such Loan set forth in Article V are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds
(in like funds as received from such Lender) to such Lender, without interest. Without limiting the provisions of Section 10.04, each Lender expressly acknowledges and
agrees that in releasing to the Borrower any funds made available to the Administrative Agent by any Lender, (i) the Administrative Agent shall be entitled to rely, and
shall not incur any liability for relying, upon any certificate of a Responsible Officer of the Borrower delivered pursuant to Article V and upon any representation or
deemed representation made by the Borrower in, or as a result of a delivery of, a Loan Notice and (ii) any good faith determination by the Administrative Agent that any
condition set forth in Article V has been satisfied shall be binding on each Lender.
(d)
Obligations of Lenders Several. The obligations of the Lenders hereunder to make Loans and to make payments pursuant to Section 11.04(c) or
11.06 are several and not joint. The failure of any Lender to make any Loan or to make any payment under Section 11.04(c) or 11.06 on any date required hereunder shall
not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to make its Loan
or to make its payment under Section 11.04(c) or 11.06.
constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.
(e)
Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to
SECTION 2.13. Sharing of Payments.
If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the
Loans made by it resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Loans and accrued interest thereon greater than its pro rata
share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact and (b) purchase (for cash at face
value) participations in the Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans; provided that:
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(i)
if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without interest; and
(ii)
the provisions of this Section 2.13 shall not be construed to apply to (A) any payment made by or on behalf of the Borrower pursuant to and in
accordance with the express terms of this Agreement (including payments pursuant to Sections 2.15 and 3.02) or (B) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its Loans other than an assignment to the Borrower or any Subsidiary thereof (as to which
the provisions of this Section 2.13 shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable Law, that any Lender acquiring a participation
pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender
were a direct creditor of the Borrower in the amount of such participation.
SECTION 2.14. [Reserved.]
SECTION 2.15. Extension of Maturity Date.
(a)
Requests for Extension. The Borrower may, by notice to the Administrative Agent (which shall promptly notify the Lenders), request, on a single
occasion after the initial Funding Date, that each Lender extend the Maturity Date applicable to the Loans of such Lender for an additional period (to be specified in such
notice) of up to four years from the applicable Maturity Date as in effect on the date such extension is requested (the “Existing Maturity Date”; and the date on which the
closing with respect to such extension shall occur is referred to herein as the “Extension Closing Date”).
(b)
Lender Elections to Extend. Each Lender, acting in its sole and individual discretion, shall, by notice to the Administrative Agent given not later
than 15 days after receipt of the Borrower’s request pursuant to Section 2.15(a) (the “Extension Lender Response Date”), advise the Administrative Agent whether or not
such Lender agrees to the requested extension; provided that any Lender that does not so advise the Administrative Agent on or before the Extension Lender Response
Date shall be deemed to have advised the Administrative Agent that it has declined to agree to the requested extension (each Lender that agrees to the requested extension
being referred as an “Extending Lender”, and each Lender that does not or is deemed not to agree to the requested extension being referred to as a “Non-Extending
Lender”). The election of any Lender to agree to the requested extension shall not obligate any other Lender to so agree.
no later than 10 days after the Extension Lender Response Date (or, if such date is not a Business Day, on the next succeeding Business Day).
(c)
Notification by Administrative Agent. The Administrative Agent shall notify the Borrower of each Lender’s determination under this Section 2.15
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Lenders as provided in Section 11.16.
(d)
Replacement of Non-Extending Lenders. The Borrower shall have the right to replace each Non‑Extending Lender with one or more Replacement
(e)
Minimum Extension Requirement. If (and only if) the aggregate outstanding principal amount of the Loans held by the Extending Lenders and by
the Replacement Lenders that shall have replaced any Non-Extending Lender as contemplated by Section 2.15(d) shall, in the aggregate, be more than 50% of the
aggregate outstanding principal amount of the Loans held by all the Lenders, in each case, determined immediately prior to the Extension Closing Date, then, subject to
the satisfaction of the conditions set forth in Section 2.15(f), the Maturity Date applicable to the Loans of each Extending Lender and each such Replacement Lender shall
be extended to the date requested by the Borrower pursuant to Section 2.15(a) (except that, if such date is not a Business Day, the Maturity Date as so extended shall be
the next preceding Business Day).
(f)
Conditions to Effectiveness of Extensions. As a condition precedent to the effectiveness of the requested extension, the Borrower shall (i) deliver to
the Administrative Agent a certificate of a Responsible Officer of the Borrower, dated as of the Extension Closing Date, (A) certifying and attaching the resolutions
adopted by the Borrower approving or consenting to such extension and (B) certifying that, before and after giving effect to such extension, (x) the representations and
warranties contained in Article VI and the other Loan Documents are true and correct in all material respects (in the case of any representation and warranty qualified by
materiality or Material Adverse Effect in the text thereof, in all respects) on and as of the Extension Closing Date as if made on and as of the Extension Closing Date,
except to the extent that such representations and warranties specifically refer to an earlier date, in which case certifying that they are true and correct in all material
respects (in the case of any representation and warranty qualified by materiality or Material Adverse Effect in the text thereof, in all respects) as of such earlier date, and
except that, for purposes of this Section 2.15(f), the representations and warranties contained in Sections 6.05(a) and 6.05(b) shall be deemed to refer to the most recent
financial statements furnished pursuant to Section 7.01(a) or 7.01(b), as applicable, and (y) no Default exists and (ii) pay to the Administrative Agent, for the account of
each Extending Lender and each such Replacement Lender, such fees as may be mutually agreed by the Borrower and such Lenders. The Administrative Agent shall give
prompt notice to the Borrower and the Lenders of the occurrence of the Extension Closing Date, which notice shall be conclusive and binding.
(g)
Permitted Amendments; Conflicting Provisions. In connection with effecting the extension requested pursuant to this Section 2.15, the
Administrative Agent and the Borrower may, without the consent of any Lender other than the Extending Lenders and the applicable Replacement Lenders, effect such
amendments to this Agreement as may be necessary or appropriate, in the opinion of the Administrative Agent, to give effect to the provisions of this Section 2.15. This
Section 2.15 shall supersede any provisions in Section 2.13 or 11.01 to the contrary.
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SECTION 2.16. [Reserved.]
SECTION 2.17. Defaulting Lenders.
time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:
(a)
Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such
(i)
Waivers and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this
Agreement shall be restricted as set forth in the definition of “Required Lenders” and Section 11.01.
(ii)
Ticking Fees. Ticking fees shall cease to accrue on the amount of the Commitment of such Lender pursuant to Section 2.09(a), and the Borrower
shall not be required to pay any ticking fees that otherwise would have been required to have been paid to such Defaulting Lender for any period during which
such Lender is a Defaulting Lender.
(b)
Defaulting Lender Cure. If the Borrower and the Administrative Agent agree in writing in their sole discretion that a Defaulting Lender should no
longer be deemed to be a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and
subject to any conditions set forth therein, such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees
accrued or payments made by or on behalf of the Borrower while such Lender was a Defaulting Lender; provided further that (i) all amendments, waivers or consents
effected without its consent in accordance with the provisions of Section 11.01 and this Section 2.17 during such period shall be binding on it and (ii) except to the extent
otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party
hereunder arising from that Lender’s having been a Defaulting Lender.
SECTION 3.01. Taxes.
ARTICLE III
Taxes, Yield Protection and Illegality
(a)
Except as required by Laws, any and all payments by or on behalf of the Borrower to or for the account of the Administrative Agent or any Lender
under any Loan Document shall be made free and clear of and without withholding or deduction for Taxes. If the Borrower or the Administrative Agent shall be required
by any applicable Laws to withhold or deduct any Taxes from or in respect of any sum payable under any Loan Document to the Administrative Agent or any Lender, then
(i) the Borrower or the Administrative Agent, as required by such Laws, shall withhold or make such deductions, (ii) the Borrower or the Administrative Agent, to the
extent required by such Laws, shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with such Laws, and (iii) to the
extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the Borrower shall be increased as necessary so that after any
required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 3.01) the Administrative
Agent or such Lender receives an amount equal to the sum it would have received had no such withholding or deduction of Indemnified Taxes been made.
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(b)
In addition, the Borrower agrees to pay any and all present or future stamp, court, documentary, intangible, recording, filing or similar Taxes and
any other excise or property Taxes or similar levies that arise from the execution, delivery, performance (other than payment of amounts owing under the Loan
Documents), enforcement or registration of, or otherwise similarly with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed
with respect to an assignment (other than an assignment made pursuant to Section 11.16) (hereinafter referred to as “Other Taxes”).
(c)
The Borrower agrees to indemnify the Administrative Agent and each Lender for (x) the full amount of Indemnified Taxes (including any
Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 3.01) paid by the Administrative Agent and such Lender and (y) any
reasonable expenses arising therefrom or with respect thereto, in each case whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the
applicable Governmental Authority. Payment under this Section 3.01(c)(i) shall be made within 60 days after the date the applicable Lender or the Administrative Agent
makes a written demand therefor; provided, however, that notwithstanding any other provision of this Section 3.01, if the Administrative Agent or any Lender requests
indemnification or reimbursement for Indemnified Taxes pursuant to this Section 3.01 more than 120 days after the earlier of (i) the date on which the Administrative
Agent or such Lender, as the case may be, makes payment of such Indemnified Taxes and (ii) the date on which the applicable Governmental Authority makes written
demand on the Administrative Agent or such Lender, as the case may be, for payment of such Indemnified Taxes, then the Borrower shall not be obligated to indemnify or
reimburse the Administrative Agent or such Lender, as the case may be, for such Indemnified Taxes. The Borrower shall, and does hereby indemnify the Administrative
Agent, and shall make payment in respect thereof within 10 days after demand therefor, for any amount which a Lender for any reason fails to pay indefeasibly to the
Administrative Agent as required pursuant to Section 3.01(c)(ii); provided, however, that the Borrower shall not have any obligation to indemnify any party hereunder for
Indemnified Taxes or Other Taxes that arise from such party’s own gross negligence or willful misconduct. To the extent that the Borrower pays an amount to the
Administrative Agent pursuant to the preceding sentence (a “Back-Up Indemnity Payment”), then upon request of the Borrower, the Administrative Agent shall use
commercially reasonable efforts to exercise its set-off rights described in the last sentence of Section 3.01(c)(ii) (on behalf of itself or the Borrower) to collect the
applicable Back-Up Indemnity Payment amount from the applicable Lender and shall pay the amount so collected to the Borrower net of any reasonable expenses incurred
by the Administrative Agent in its efforts to collect (through set-off or otherwise) from such Lender with respect to Section 3.01(c)(ii).
(ii)
Each Lender shall, and does hereby, severally indemnify, and shall make payment in respect thereof within 10 days after demand therefor, (x) the
Administrative Agent against any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the
Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower to do so) and (y) the Administrative Agent and the Borrower,
as applicable, against any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent or the Borrower in
connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally
imposed or asserted by the applicable Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the
Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts
at any time owing to such Lender, as the case may be, under this Agreement or any other Loan Document against any amount due to the Administrative Agent
under this Section 3.01(c)(ii).
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(d)
[Reserved.]
(e)
Upon request by the Borrower or the Administrative Agent, as the case may be, after any payment of Taxes by the Borrower or by the
Administrative Agent to a Governmental Authority as provided in this Section 3.01, the Borrower shall deliver to the Administrative Agent or the Administrative Agent
shall deliver to the Borrower, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of
any return required by Laws to report such payment or other evidence of such payment reasonably satisfactory to the Borrower or the Administrative Agent, as the case
may be.
(f)
Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a
Lender, or have any obligation to pay to any Lender any refund of Taxes withheld or deducted from funds paid for the account of such Lender, as the case may be. If the
Administrative Agent or a Lender determines, in good faith, that it has received a refund of any Taxes as to which it has been indemnified by the Borrower or with respect
to which the Borrower has paid additional amounts pursuant to this Section 3.01, it shall pay an amount equal to such refund to the Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this Section 3.01 with respect to the Taxes giving rise to such refund), net of all out-of-
pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such
refund), it being understood that any such refund received by another member of a fiscal group that such Lender forms part of shall be treated as received by such Lender
for purposes of this Section 3.01(f); provided that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the
Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the
Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this Section 3.01(f), in
no event will the Administrative Agent or any Lender be required to pay any amount to the Borrower pursuant to this Section 3.01(f) the payment of which would place
the Administrative Agent or such Lender in a less favorable net after-Tax position than such Person would have been in if the Indemnified Tax subject to indemnification
and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had
never been paid. This Section 3.01(f) shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information
relating to its Taxes that it deems confidential) to the Borrower or any other Person.
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(g)
Each party’s obligations under this Section 3.01 and under Section 11.15 shall survive the resignation or replacement of the Administrative Agent or
any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all other Obligations.
SECTION 3.02. Illegality.
If any Lender in good faith determines that any Change in Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to perform any of its obligations hereunder or make, maintain or fund or charge interest with respect to any Loan or to
determine or charge interest rates based upon the LIBO Rate, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, (a) any obligation
of such Lender to issue, make, maintain, fund or charge interest with respect to any such Loan or to convert Base Rate Loans to LIBOR Loans shall be suspended and (b)
if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to clause (c) of the
definition of Base Rate, the interest rate on the Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent
without utilization of clause (c) of the definition of Base Rate, in each case, until such Lender notifies the Administrative Agent and the Borrower that the circumstances
giving rise to such determination no longer exist. Upon receipt of such notice by the Borrower, (x) the Borrower shall, upon demand from such Lender (with a copy to the
Administrative Agent), prepay or, if applicable in the case of LIBOR Loans, convert all of such Lender’s LIBOR Loans to Base Rate Loans (the interest rate on which
Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to clause (c) of the definition of
Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain such Loans and (y) if such notice asserts the illegality of such Lender determining or charging such interest rates based upon the
LIBO Rate, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to clause (c) of the
definition of Base Rate until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates
based upon the LIBO Rate. Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted. Each Lender
agrees to designate a different Lending Office if such designation will avoid the need for such notice and will not, in the good faith judgment of such Lender, otherwise be
materially disadvantageous to such Lender. If such Lender does not designate a different Lending Office to avoid the need for such notice, the Borrower may replace such
Lender in accordance with Section 11.16.
Each Lender at its option may make any Loan to the Borrower by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement; provided,
however, if any Lender determines that any Change in Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, in each case, after
the Restatement Effective Date for any Lender or its applicable Lending Office to issue, make, maintain, fund or charge interest with respect to any Loan to the Borrower,
then, on notice thereof by such Lender to the Borrower through the Administrative Agent, and until such notice by such Lender is revoked, any obligation of such Lender
to issue, make, maintain, fund or charge interest with respect to any such Loan shall be suspended. Upon receipt of such notice, the Borrower shall take all reasonable
actions requested by such Lender to mitigate or avoid such illegality.
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SECTION 3.03. Alternate Rate of Interest.
(a)
Subject to Section 3.03(b), if prior to the commencement of any Interest Period for any LIBOR Borrowing:
(i)
the Administrative Agent in good faith determines (which determination shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for determining the Adjusted LIBO Rate for such Interest Period (including because the LIBO Screen Rate is not available or published on a
current basis); or
(ii)
the Administrative Agent is advised by the Required Lenders that the Required Lenders in good faith have determined that, for any reason, the
Adjusted LIBO Rate for such Interest Period will not adequately and fairly reflect the cost to the Required Lenders of funding or maintaining the Loans comprising
such Borrowing for such Interest Period;
then the Administrative Agent will promptly notify the Borrower and the Lenders and, if such notice is given, then until the Administrative Agent notifies the Borrower
and the Lenders that the circumstances giving rise to such notice no longer exist, (1) any Loan Notice that requests the conversion of any Borrowing to, or continuation of
any Borrowing as, an affected LIBOR Borrowing shall be ineffective, (2) any affected LIBOR Borrowing that is requested to be continued shall, at the end of the then-
current Interest Period applicable thereto, unless repaid, be converted to a Base Rate Borrowing and (3) any Loan Notice that requests the making of an affected LIBOR
Borrowing shall be deemed to be a request for a Base Rate Borrowing.
(b)
Notwithstanding anything to the contrary herein or in any other Loan Document, if a Benchmark Transition Event, an Early Opt-in Election or an
Other Benchmark Rate Election, as applicable, and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the
then-current Benchmark, then (x) if a Benchmark Replacement is determined in accordance with clause (1) or (2) of the definition of “Benchmark Replacement” for such
Benchmark Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any other Loan Document in respect of
such Benchmark setting and subsequent Benchmark settings without any amendment to, or further action or consent of any other party to, this Agreement or any other
Loan Document and (y) if a Benchmark Replacement is determined in accordance with clause (3) of the definition of “Benchmark Replacement” for such Benchmark
Replacement Date, such Benchmark Replacement will replace such Benchmark for all purposes hereunder and under any other Loan Document in respect of any
Benchmark setting at or after 5:00 p.m., New York City time, on the fifth Business Day after the date notice of such Benchmark Replacement is provided to the Lenders
without any amendment to, or further action or consent of any other party to, this Agreement or any other Loan Document so long as the Administrative Agent has not
received, by such time, written notice of objection to such Benchmark Replacement from Lenders comprising the Required Lenders.
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(ii)
Notwithstanding anything to the contrary herein or in any other Loan Document and subject to the proviso below in this paragraph, if a Term SOFR
Transition Event and its related Benchmark Replacement Date have occurred prior to the Reference Time in respect of any setting of the then-current Benchmark,
then the applicable Benchmark Replacement will replace the then-current Benchmark for all purposes hereunder or under any other Loan Document in respect of
such Benchmark setting and subsequent Benchmark settings, without any amendment to, or further action or consent of any other party to, this Agreement or any
other Loan Document; provided that this paragraph shall not be effective unless the Administrative Agent has delivered to the Lenders and the Borrower a Term
SOFR Notice. For the avoidance of doubt, the Administrative Agent shall not be required to deliver a Term SOFR Notice after a Term SOFR Transition Event and
may do so in its sole discretion.
(iii)
In connection with the implementation of a Benchmark Replacement, the Administrative Agent will have the right to make Benchmark
Replacement Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments
implementing such Benchmark Replacement Conforming Changes will become effective without any further action or consent of any other party to this
Agreement or any other Loan Document.
(iv)
The Administrative Agent will promptly notify the Borrower and the Lenders of (A) any occurrence of a Benchmark Transition Event, an Early
Opt-in Election or an Other Benchmark Rate Election, as applicable, (B) the implementation of any Benchmark Replacement, (C) the effectiveness of any
Benchmark Replacement Conforming Changes, (D) the removal or reinstatement of any tenor of a Benchmark pursuant to Section 3.03(b)(v) and (E) the
commencement or conclusion of any Benchmark Unavailability Period. Any determination, decision or election that may be made by the Administrative Agent or,
if applicable, any Lender (or group of Lenders) pursuant to this Section 3.03, including any determination with respect to a tenor, rate or adjustment or of the
occurrence or non-occurrence of an event, circumstance or date and any decision to take or refrain from taking any action or any selection, will be conclusive and
binding absent manifest error and may be made in its or their sole discretion and without consent from any other party to this Agreement or any other Loan
Document, except, in each case, as expressly required pursuant to this Section 3.03.
(v)
Notwithstanding anything to the contrary herein or in any other Loan Document, at any time (including in connection with the implementation of a
Benchmark Replacement), (A) if the then-current Benchmark is a term rate (including Term SOFR or LIBO Rate) and either (x) any tenor for such Benchmark is
not displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable
discretion or (y) the regulatory supervisor for the administrator of such Benchmark has provided a public statement or publication of information announcing that
any tenor for such Benchmark is or will be no longer representative, then the Administrative Agent may modify the definition of “Interest Period” for any
Benchmark settings at or after such time to remove such unavailable or non-representative tenor and (B) if a tenor that was removed pursuant to clause (A) above
either (x) is subsequently displayed on a screen or information service for a Benchmark (including a Benchmark Replacement) or (y) is not, or is no longer, subject
to an announcement that it is or will no longer be representative for a Benchmark (including a Benchmark Replacement), then the Administrative Agent may
modify the definition of “Interest Period” for all Benchmark settings at or after such time to reinstate such previously removed tenor.
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(vi)
Upon the Borrower’s receipt of notice of the commencement of a Benchmark Unavailability Period, the Borrower may revoke any Loan Notice
requesting a borrowing of, conversion to or continuation of LIBOR Loans to be made, converted or continued during any Benchmark Unavailability Period and,
failing that, the Borrower will be deemed to have converted any such request into a request for a borrowing of or conversion to Base Rate Loans. During any
Benchmark Unavailability Period or at any time that a tenor for the then-current Benchmark is not an Available Tenor, the component of Base Rate based upon the
then-current Benchmark or such tenor for such Benchmark, as applicable, will not be used in any determination of Base Rate and such component shall be deemed
to be zero.
SECTION 3.04. Increased Cost and Reduced Return; Capital Adequacy and Liquidity.
(a)
If any Change in Law shall:
(i)
impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate);
(ii)
impose on any Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans
made by such Lender; or
(iii)
subject the Administrative Agent or any Lender to any Taxes (other than Taxes on payments pursuant to the Loan Documents, which will be
governed by Section 3.01, Other Taxes and Excluded Taxes) on its loans, loan principal, letters of credit, commitments or other obligations, or its deposits,
reserves, other liabilities or capital attributable thereto;
and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Loan or of maintaining its
obligation to make any Loan, or to reduce the amount of any sum received or receivable by the Administrative Agent or such Lender hereunder (whether of principal,
interest or any other amount) (and the Administrative Agent or such Lender, as applicable, deems such increase or reduction to be material), then, from time to time within
10 Business Days after the Borrower’s receipt of the certificate contemplated by Section 3.06(a) from the Administrative Agent or such Lender, the Borrower will pay to
the Administrative Agent or such Lender, as the case may be, such additional amount or amounts as will compensate the Administrative Agent or such Lender, as the case
may be, for such additional costs or expenses incurred or reduction suffered.
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(b)
If any Lender determines that any Change in Law affecting such Lender or any Lending Office of such Lender or such Lender’s holding company, if
any, regarding capital or liquidity requirements has the effect of reducing, by an amount deemed by such Lender to be material, the rate of return on such Lender’s capital
or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, any Commitment of such Lender or the Loans made by such Lender to a
level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies
and the policies of such Lender’s holding company with respect to capital adequacy or liquidity), then, from time to time within 10 Business Days after the Borrower’s
receipt of the certificate contemplated by Section 3.06(a) from such Lender, the Borrower will pay to such Lender such additional amount or amounts as will compensate
such Lender or such Lender’s holding company for any such reduction suffered.
(c)
Failure or delay on the part of the Administrative Agent or any Lender to demand compensation pursuant to this Section 3.04 shall not constitute a
waiver of its right to demand such compensation; provided that the Borrower shall not be required to compensate the Administrative Agent or any Lender pursuant to this
Section 3.04 for any increased costs or expenses incurred or reductions suffered more than 90 days prior to the date that the Administrative Agent or such Lender notifies
the Borrower of the Change in Law giving rise to such increased costs or expenses or reductions and of the Administrative Agent’s or such Lender’s intention to claim
compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or expenses or reductions is retroactive, then the 90-day period
referred to above shall be extended to include the period of retroactive effect thereof.
SECTION 3.05. Funding Losses.
Lender harmless from any loss, cost or expense (excluding the loss of the Applicable Rate) incurred by it as a result of:
Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall compensate such Lender for and hold such
(a)
any continuation, conversion, payment or prepayment of any LIBOR Loan on a day other than the last day of the Interest Period for such Loan
(whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);
(b)
any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any LIBOR
Loan on the date or in the amount notified by the Borrower (whether or not such notice may be withdrawn in accordance herewith);
(c)
any failure by the Borrower to make payment of any Loan (or interest due thereon) on its scheduled due date; or
(d)
Section 11.16;
any assignment of a LIBOR Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to
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including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits
from which such funds were obtained. The Borrower shall also pay any reasonable customary administrative fees charged by such Lender in connection with the
foregoing. The Borrower will, within 10 Business Days after the Borrower’s receipt of the certificate contemplated by Section 3.06(a), pay such Lender such additional
amounts as will compensate such Lender for such losses, costs or expenses.
For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each
LIBOR Loan made by it at the Adjusted LIBO Rate by a matching deposit or other borrowing in the London interbank market for a comparable amount and for a
comparable period, whether or not such LIBOR Loan was in fact so funded.
SECTION 3.06. Matters Applicable to all Requests for Compensation.
(a)
The Administrative Agent or any Lender claiming compensation under Section 3.01 or 3.04 shall be required to deliver a certificate to the Borrower
setting forth in reasonable detail (i) the additional amount or amounts to be paid to it hereunder and (ii) the manner in which such amount was determined, which
certificate shall be conclusive in the absence of manifest error. In determining such amount, the Administrative Agent or such Lender may use any reasonable averaging
and attribution methods.
(b)
Upon any Lender’s making a claim for compensation under Section 3.01 or 3.04, the Borrower may replace such Lender in accordance with Section
11.16.
Notwithstanding anything contained herein to the contrary, a Lender shall not be entitled to any compensation pursuant to Section 3.04 or to
exercise the rights under Section 3.02 to the extent such Lender is not generally imposing such charges or requesting such compensation from, or is not generally
exercising such rights against, as applicable, other similarly situated borrowers under similar circumstances.
(c)
SECTION 3.07. Survival.
The obligations of the Borrower under this Article III shall survive termination of the Aggregate Commitments, repayment of all other Obligations
hereunder and resignation of the Administrative Agent.
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ARTICLE IV
[Reserved]
ARTICLE V
Conditions Precedent
SECTION 5.01. Conditions to the Restatement Effective Date.
The amendment and restatement of the Existing Syndicated Facility Agreement to be in the form hereof is subject to the satisfaction (or waiver in
accordance with Section 11.01 of the Existing Syndicated Facility Agreement) of the conditions precedent to the occurrence of the Restatement Effective Date set forth in
the Restatement Agreement.
SECTION 5.02. Conditions to Each Funding Date.
The obligation of each Lender to make a Loan as part of any Borrowing is subject to the occurrence of the Restatement Effective Date and the satisfaction
(or waiver in accordance with Section 11.01) of the following conditions:
(a)
After giving effect to such Borrowing, (i) the representations and warranties of the Borrower contained in Article VI or any other Loan Document
shall be true and correct in all material respects (in the case of any representation and warranty qualified by materiality or Material Adverse Effect in the text thereof, in all
respects) on and as of the Funding Date with respect to such Borrowing, except to the extent that such representations and warranties specifically refer to an earlier date, in
which case such representations and warranties shall be true and correct in all material respects (in the case of any representation and warranty qualified by materiality or
Material Adverse Effect in the text thereof, in all respects) as of such earlier date, and except that for the purposes of this Section 5.02(a), the representations and
warranties contained in Sections 6.05(a) and 6.05(b) shall be deemed to refer to the most recent financial statements furnished pursuant to Section 7.01(a) or 7.01(b), as
applicable, and (ii) no Default shall exist on and as of such Funding Date.
(b)
The Administrative Agent shall have received a Loan Notice in accordance with the requirements hereof, and such Loan Notice shall not have been
withdrawn.
(c)
Borrowing shall have been paid.
Any fees payable to the Lenders by the Borrower hereunder that are required to be paid on or before the Funding Date with respect to such
that the conditions specified in paragraph (a) of this Section 5.02 have been satisfied.
On the date of any Borrowing (other than any conversion or continuation of any Loan), the Borrower shall be deemed to have represented and warranted
Without limiting the generality of the provisions of the last paragraph of Section 10.03, for purposes of determining compliance with the conditions
specified in Section 5.01 or 5.02, each Lender will be deemed to have consented to approved or accepted, or to be satisfied with, each document or other matter referred to
in such Section unless the Administrative Agent will have received notice from such Lender prior to the proposed Restatement Effective Date or the proposed Funding
Date, as applicable, specifying its objection thereto.
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ARTICLE VI
Representations and Warranties
The Borrower represents and warrants to the Administrative Agent and the Lenders, on the Restatement Effective Date, each Funding Date and each other
date on which representations and warranties are required to be, or are deemed to be, made under the Loan Documents, that:
SECTION 6.01. Existence, Qualification and Power.
The Borrower (a) is a corporation duly organized, validly existing and in good standing under the Laws of the jurisdiction of its incorporation, (b) has all
requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own its assets and carry on its business and (ii) execute,
deliver and perform its obligations under the Loan Documents and (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except, in each case referred to in clause (b)(i) or (c), to the
extent that failure to do so would not reasonably be expected to have a Material Adverse Effect.
SECTION 6.02. Authorization; No Contravention.
The execution, delivery and performance by the Borrower of each Loan Document have been duly authorized by all necessary corporate or other
organizational action and do not (a) contravene the terms of any Organization Documents of the Borrower, (b) conflict with or result in any breach or contravention of, or
the creation of any Lien under, (i) any Contractual Obligation to which the Borrower is a party or (ii) any order, injunction, writ or decree of any Governmental Authority
or any arbitral award to which the Borrower or its property is subject or (c) violate any Law, except, in each case referred to in clause (b) or (c), to the extent that it would
not reasonably be expected to have a Material Adverse Effect.
SECTION 6.03. Governmental Authorization; Other Consents.
No approval, consent, exemption, authorization or other action by or notice to, or filing with, any Governmental Authority or any other Person is necessary
or required in connection with the execution, delivery or performance by, or enforcement against, the Borrower of this Agreement or any other Loan Document, except for
those the failure to obtain, occur or make would not reasonably be expected to have a Material Adverse Effect.
SECTION 6.04. Binding Effect.
This Agreement and each other Loan Document has been duly executed and delivered by the Borrower. This Agreement and each other Loan Document
constitutes a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent transfer or conveyance, reorganization, moratorium or other Laws affecting creditors’ rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
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SECTION 6.05. Financial Statements; No Material Adverse Change.
(a)
The audited consolidated balance sheet of the Consolidated Group as of December 31, 2020, and the related consolidated statements of income or
operations, shareholders’ equity and cash flows for the fiscal year then ended, including the notes thereto, (i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted therein, (ii) fairly present in all material respects the financial position of the Consolidated
Group as of the date thereof and its results of operations and cash flows for the period covered thereby in accordance with GAAP and (iii) show all material indebtedness
and other liabilities, direct or contingent, of the Consolidated Group as of the date thereof, including liabilities for Taxes, material commitments and Indebtedness, which
are required to be shown thereon in accordance with GAAP.
(b)
The unaudited consolidated balance sheet of the Consolidated Group as of September 30, 2021, and the related consolidated statements of income
or operations and cash flows for the fiscal quarter then ended, (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein, (ii) fairly present in all material respects the financial position of the Consolidated Group as of the date thereof and its results
of operations and cash flows for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments, and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Consolidated Group as of the date thereof, including liabilities for
Taxes, material commitments and Indebtedness, which are required to be shown thereon in accordance with GAAP.
expected to have a Material Adverse Effect.
(c)
Since December 31, 2020, there has been no event or circumstance, either individually or in the aggregate, that has had or would be reasonably be
SECTION 6.06. Litigation.
There are not any actions, suits or proceedings at law or in equity or by or before any Governmental Authority now pending or, to the knowledge of the
Borrower, threatened (and reasonably likely to be commenced) in writing against or affecting any member of the Consolidated Group or any property or rights of any
member of the Consolidated Group as to which there is a reasonable likelihood of an adverse determination and which, if adversely determined, would individually or in
the aggregate result in a Material Adverse Effect.
SECTION 6.07. No Default.
(a)
Neither the Borrower nor any Subsidiary is in default under or with respect to any Contractual Obligation that would reasonably be expected to have
a Material Adverse Effect.
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(b)
No Default or Event of Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this
Agreement or any other Loan Document.
SECTION 6.08. Ownership of Property; Liens.
Each member of the Consolidated Group has good record and marketable title in fee simple (or similar concept under any applicable jurisdiction) to, or
valid leasehold interests in, all real property necessary in the ordinary conduct of its business, except for such defects in title as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The property of the Consolidated Group is subject to no Liens, other than Liens permitted by Section 8.01.
SECTION 6.09. Environmental Compliance.
Except as set forth in Schedule 6.09, (a) the Consolidated Group is in compliance in all material respects with all applicable Environmental Laws, except
where the failure to do so would not be reasonably likely, individually or in the aggregate, to result in a Material Adverse Effect, (b) no member of the Consolidated Group
has received written notice of any failure to comply with applicable Environmental Laws, which non-compliance neither has been or is being remedied, nor is being
contested in good faith by such member of the Consolidated Group, nor is the subject of such member’s good faith efforts to achieve compliance, except notices for which
non-compliance would not be reasonably likely, individually or in the aggregate, to result in a Material Adverse Effect, (c) the Consolidated Group’s facilities do not
manage any Hazardous Materials in violation of any applicable Environmental Law, except where such violation would not reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect, and (d) the Borrower is aware of no events, conditions or circumstances involving environmental pollution or
contamination or employee health or safety that would be reasonably likely to result in a Material Adverse Effect.
SECTION 6.10. Insurance.
The properties of the Consolidated Group are insured with financially sound and reputable insurance companies not Affiliates of the Borrower, in such
amounts (after giving effect to any self-insurance compatible with the following standards), with such deductibles and covering such risks as are customarily carried by
companies engaged in similar businesses and owning similar properties in localities where the Borrower or its Subsidiaries operate.
SECTION 6.11. Taxes.
Each member of the Consolidated Group has filed all federal, state and other Tax returns and reports required to be filed by such member, and has paid all
federal, state and other Taxes levied or imposed upon such member or its properties, income or assets otherwise due and payable, except (a) those that are being contested
in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP or (b) those that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. There is no proposed Tax assessment against the Borrower or any Subsidiary that would, if made,
have a Material Adverse Effect.
55
SECTION 6.12. ERISA Compliance.
(a)
Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Internal Revenue Code and other federal or state
Laws. Each Plan that is intended to qualify under Section 401(a) of the Internal Revenue Code has received a favorable determination letter from the IRS or an application
for such a letter is currently being processed by the IRS with respect thereto and, to the knowledge of the Borrower, nothing has occurred that would prevent, or cause the
loss of, such qualification. The Borrower and each ERISA Affiliate have made all required contributions to each Plan subject to Section 412 of the Internal Revenue Code,
and no application for a funding waiver or an extension of any amortization period pursuant to Section 412 of the Internal Revenue Code has been made with respect to
any Plan.
There are no pending or, to the knowledge of the Borrower, threatened claims, actions or lawsuits, or action by any Governmental Authority, with
respect to any Plan that would reasonably be expected to have a Material Adverse Effect. There has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted or would reasonably be expected to result in a Material Adverse Effect.
(b)
(c)
Other than as would not reasonably be expected to result in a Material Adverse Effect, (i) no ERISA Event has occurred or is reasonably expected to
occur, (ii) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability under Title IV of ERISA with respect to any Pension
Plan (other than premiums due and not delinquent under Section 4007 of ERISA and other contributions payable in accordance with the terms of such Pension Plan or
applicable Law) and (iii) neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur, any liability (and no event has occurred that, with the
giving of notice under Section 4219 of ERISA, would result in such liability) under Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan.
Adverse Effect.
(d)
(e)
4212(c) of ERISA.
The Pension Plans, on a consolidated basis, do not have any Unfunded Pension Liability that would reasonably be expected to result in a Material
To the knowledge of the Borrower, neither the Borrower nor any ERISA Affiliate has engaged in a transaction that is subject to Sections 4069 or
one or more Benefit Plans in connection with the Loans or the Commitments.
(f)
The Borrower is not and will not be using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of
SECTION 6.13. Margin Regulations; Investment Company Act.
(a)
The Borrower is not engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying “margin
stock” within the meaning of Regulation U issued by the FRB, as in effect from time to time, or extending credit for the purpose of purchasing or carrying “margin stock”,
and the Loans hereunder will not be used to purchase or carry “margin stock” in violation of Regulation U or to extend credit to others for the purpose of purchasing or
carrying “margin stock”, or for any purpose that would violate the provisions of Regulation X issued by the FRB, as in effect from time to time.
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(a)
The Borrower is not and is not required to be registered as an “investment company” under the Investment Company Act of 1940.
SECTION 6.14. Disclosure.
No report, financial statement, certificate or other written information furnished by the Borrower or by any representatives of the Borrower (on the
Borrower’s behalf) to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered
hereunder (as modified or supplemented by other information so furnished), taken as a whole, contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such projections were prepared in good faith based upon reasonable assumptions and estimates as of the date of preparation
(it being understood and agreed that projections are as to future events and are not to be viewed as facts and are subject to significant uncertainties and contingencies,
many of which are beyond the control of the Borrower and its Subsidiaries, that no assurance can be given that any particular projection will be realized, that actual results
during the period or periods covered by any such projections may differ significantly from the projected results and such differences may be material, and that projections
are not representations by the Borrower or its Subsidiaries that such projections will be achieved).
SECTION 6.15. Compliance with Laws.
Each of the Borrower and each Subsidiary is in compliance in all material respects with the requirements of all Laws, except in such instances in which (a)
such requirement of Law is being contested in good faith by appropriate proceedings or (b) the failure to comply therewith would not reasonably be expected to have a
Material Adverse Effect.
SECTION 6.16. Intellectual Property; Licenses, Etc.
To the knowledge of the Borrower, the Consolidated Group owns, or possesses the right to use, all of the trademarks, service marks, trade names,
copyrights, patents, patent rights, franchises, licenses and other intellectual property rights that are reasonably necessary for the operation of its businesses, without
conflict with the rights of any other Person that would reasonably be expected to have a Material Adverse Effect. To the knowledge of the Borrower, no slogan or other
advertising device, product, process, method, substance, part or other material now employed, or now contemplated to be employed, by the Borrower or any Subsidiary
infringes upon any rights held by any other Person that would reasonably be expected to have a Material Adverse Effect. No claim or litigation regarding any of the
foregoing is pending or, to the knowledge of the Borrower, threatened (and reasonably likely to be commenced), that would in either case reasonably be expected to have a
Material Adverse Effect.
SECTION 6.17. [Reserved].
SECTION 6.18. [Reserved].
SECTION 6.19. [Reserved].
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SECTION 6.20. OFAC; Anti-Corruption Laws.
(a)
The Borrower has implemented and maintains in effect policies and procedures reasonably designed to promote and achieve compliance by the
Borrower, its Subsidiaries and their respective directors, officers and employees with applicable Sanctions, and the Borrower and its Subsidiaries and (to the knowledge of
the Borrower and its Subsidiaries) their respective directors, officers, employees, agents and Affiliates are in compliance with applicable Sanctions in all material respects
and are not knowingly engaged in any activity that would constitute a violation of applicable Sanctions. None of the Borrower or its Subsidiaries, nor (to the knowledge of
the Borrower and its Subsidiaries) any director, officer, employee, agent or Affiliate thereof, is a Person that is, currently the subject of any Sanctions. None of the
Borrower or any Subsidiary is located, organized or resident in a Designated Jurisdiction.
(b)
The Borrower and its Subsidiaries are in compliance in all material respects with applicable anti-corruption Laws (it being understood and agreed
that the foregoing representation and warranty shall not be deemed to be inaccurate on account of conduct described in Schedule 6.20 solely to the extent such conduct has
occurred prior to the Closing Date (and, for the avoidance of doubt, is not continuing on the date on which such representation and warranty is made or deemed to be made
hereunder)) and have instituted and maintain in effect policies and procedures reasonably designed to promote and achieve compliance with such Laws.
ARTICLE VII
Affirmative Covenants
So long as any Lender shall have any Commitment hereunder or any Loan or other Obligation hereunder shall remain unpaid or unsatisfied (other than
contingent indemnification obligations for which no claim or demand has been made), the Borrower shall and shall cause each of its Subsidiaries to:
SECTION 7.01. Financial Statements.
Furnish to the Administrative Agent (which will make such documents available to each Lender):
(a)
as soon as available, but in any event within 90 days after the end of each fiscal year of the Borrower, a consolidated balance sheet of the
Consolidated Group as of the end of such fiscal year, and the related consolidated statements of income or operations, changes in equity and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP,
audited and accompanied by a report and opinion of an independent registered public accounting firm of nationally recognized standing, which report and opinion
shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any
qualification or exception as to the scope of such audit; and
(b)
as soon as available, but in any event within 50 days after the end of each of the first three fiscal quarters of each fiscal year of the Borrower, a
consolidated balance sheet of the Consolidated Group as of the end of such fiscal quarter, and the related consolidated statements of income or operations and cash
flows for such fiscal quarter and for the portion of the Borrower’s fiscal year then ended, setting forth in each case in comparative form the figures for the
corresponding fiscal quarter of the previous
58
fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail and certified by a Responsible Officer of the Borrower as fairly
presenting in all material respects the financial position, results of operations and cash flows of the Consolidated Group in accordance with GAAP, subject only to
normal year-end audit adjustments and the absence of footnotes.
As to any information contained in materials furnished pursuant to Section 7.02(d), the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Borrower to furnish the information and materials described
in clauses (a) and (b) above at the times specified therein.
SECTION 7.02. Certificates; Other Information.
Deliver to the Administrative Agent (which will make such documents available to each Lender):
(a)
[reserved];
(b)
concurrently with the delivery of the financial statements referred to in Sections 7.01(a) and 7.01(b), a duly completed Compliance Certificate
signed by a Responsible Officer of the Borrower, (i) setting forth computations in reasonable detail satisfactory to the Administrative Agent demonstrating
compliance with the Financial Covenant, (ii) certifying that no Default or Event of Default exists as of the date thereof (or, to the extent a Default or Event of
Default exists, the nature and extent thereof and the proposed actions of the Borrower with respect thereto) and (iii) including a summary of all material changes in
GAAP affecting the consolidated financial statements of the Borrower and in the consistent application thereof by the Borrower, the effect on the Financial
Covenant resulting therefrom and a reconciliation between calculation of the Financial Covenant before and after giving effect to such changes (which certificate
may be delivered by electronic mail);
(c)
promptly after requested in writing by the Administrative Agent on behalf of any Lender, copies of any detailed audit reports, management letters or
recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Borrower by its independent registered public
accounting firm in connection with the accounts or books of the Borrower or any Subsidiary, or any audit of any of them;
(d)
promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the
stockholders of the Borrower, and copies of all annual, regular, periodic and special reports and registration statements that the Borrower may file or be required to
file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to be delivered to the Administrative Agent
pursuant hereto;
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(e)
promptly following any request in writing therefor, information and documentation reasonably requested by the Administrative Agent or any Lender
for purposes of compliance with applicable “know your customer” rules, including the PATRIOT Act, the Beneficial Ownership Regulation or other applicable
anti-money laundering Laws; and
(f)
promptly, such additional information regarding the business, financial or corporate affairs of the Borrower or any Subsidiary, or compliance with
the terms of the Loan Documents, as the Administrative Agent, on behalf of any Lender, may from time to time reasonably request in writing.
Documents required to be delivered pursuant to Section 7.01(a), 7.01(b) or 7.02(d) (to the extent any such documents are included in materials otherwise
filed with the SEC) may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such
documents, or provides a link thereto, on the Borrower’s website on the Internet at https://www.albemarle.com or (ii) on which such documents (A) are publicly available
on the website of the SEC at http://www.sec.gov or (B) are posted on the Borrower’s behalf on another Internet or intranet website, if any, to which each Lender and the
Administrative Agent have access (whether a commercial, third‑party website or whether sponsored by the Administrative Agent); provided that in the case of documents
that are not available on http://www.sec.gov, (i) the Borrower shall deliver paper copies of such documents to the Administrative Agent or any Lender upon its request to
the Borrower to deliver such paper copies until a written request to cease delivering paper copies (which may include .pdf files) is given by the Administrative Agent or
such Lender and (ii) the Borrower shall notify (which may be by electronic mail) the Administrative Agent and each Lender of the posting of any such documents and
provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to
request the delivery of or to maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the
Borrower with any such request by a Lender for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such
documents.
The Borrower hereby acknowledges that (a) the Administrative Agent may, but shall not be obligated to, make available to the Lenders materials and/or
information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on Debt Domain, IntraLinks,
SyndTrak or another similar electronic system (the “Platform”) subject to procedures and confidentiality undertakings of the Platform and (b) certain of the Lenders (each,
a “Public Lender”) may have personnel who do not wish to receive material non-public information (within the meaning of United States federal and state securities Laws
or the securities Laws of other applicable jurisdictions) with respect to the Borrower, its Affiliates or the respective Securities of any of the foregoing (“MNPI”), and who
may be engaged in investment and other market-related activities with respect to such Persons’ Securities. The Borrower hereby agrees that (w) all Borrower Materials
that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall
appear prominently on the first page thereof, (x) by marking Borrower Materials “PUBLIC”, the Borrower shall be deemed to have authorized the Administrative Agent
and the Lenders to treat such Borrower Materials as not containing any MNPI (provided, however, that to the extent such Borrower Materials constitute Information, they
shall be treated as set forth in Section 11.08), (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform
designated as “Public Side Information” and (z) the Administrative Agent shall be entitled to
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treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated as “Public Side Information”.
SECTION 7.03. Notices.
Promptly notify the Administrative Agent (which will make such notice available to each Lender):
(a)
(b)
(c)
of the occurrence of any Default;
of any matter that has resulted or would reasonably be expected to result in a Material Adverse Effect; and
if unrated, any announcement by Moody’s, S&P or Fitch of any Debt Rating, or if rated, any announcement by Moody’s, S&P or Fitch of any
change or possible change in a Debt Rating.
Each notice pursuant to this Section 7.03 shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and, in the case of any notice pursuant to clause (a) or (b) of this Section 7.03, stating what action the Borrower has taken and proposes to
take with respect thereto. Each notice pursuant to Section 7.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document
that have been breached or on account of which a Default otherwise arises.
SECTION 7.04. Payment of Obligations.
Pay and discharge as the same shall become due and payable, (a) all material Taxes imposed upon it or its properties or assets, unless the same are being
contested in good faith by appropriate proceedings and adequate reserves in accordance with GAAP are being maintained by the Borrower or such Subsidiary, (b) all
lawful claims that, if unpaid, would by law become a Lien upon its property (other than a Lien permitted by Section 8.01) and (c) except where the failure to so pay or
discharge would not reasonably be expected to have a Material Adverse Effect, all other obligations and liabilities.
SECTION 7.05. Preservation of Existence, Etc.
(a)
Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its incorporation or
organization except in a transaction permitted by Section 8.02, (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or
desirable in the normal conduct of its business, except to the extent that failure to do so would not reasonably be expected to have a Material Adverse Effect, and (c)
preserve or renew all of its registered patents, trademarks, trade names and service marks the non-preservation of which would reasonably be expected to have a Material
Adverse Effect.
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SECTION 7.06. Maintenance of Properties.
Maintain, preserve and protect all of its material properties and material equipment necessary in the operation of its business in good working order and
condition, ordinary wear and tear and damage by casualty or condemnation excepted.
SECTION 7.07. Maintenance of Insurance.
Maintain, with financially sound and reputable insurance companies not Affiliates of the Borrower, insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts (after giving effect
to any self-insurance compatible with the following standards) as are customarily carried under similar circumstances by such other Persons.
SECTION 7.08. Compliance with Laws.
Comply in all material respects with the requirements of all Laws applicable to it or to its business or property, except in such instances in which (a) such
requirement of Law is being contested in good faith by appropriate proceedings or (b) the failure to comply therewith would not reasonably be expected to have a Material
Adverse Effect, and maintain in effect and enforce policies and procedures reasonably designed to promote and achieve compliance by the Borrower, its Subsidiaries and
their respective directors, officers, employees and agents with applicable anti-corruption Laws and applicable Sanctions.
SECTION 7.09. Books and Records.
Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all
financial transactions and matters involving the assets and business of the Borrower or such Subsidiary, as the case may be, in each case as required by GAAP, and
maintain such books of record and account in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the
Borrower or such Subsidiary, as the case may be.
SECTION 7.10. Inspection Rights.
Upon the request of the Administrative Agent on behalf of any Lender, permit representatives and independent contractors of the Administrative Agent and
each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts with its directors, officers, and independent public accountants (provided that a representative of the Borrower or any Subsidiary
shall be entitled to attend any such meetings with such independent public accountants), all at the expense of the Lenders when no Event of Default exists, and at such
reasonable times during normal business hours, upon reasonable advance notice to the Borrower and no more than once per year; provided, however, that when an Event
of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense
of the Borrower at any time during normal business hours and without advance notice; provided, further that notwithstanding anything to the contrary herein, none of the
Borrower or any Subsidiary shall be required to disclose, permit the inspection, examination or making of copies of or taking abstracts from, or discuss, any document,
information or other matter (a) that constitutes non-financial trade secrets or non-financial proprietary information of the Borrower and its Subsidiaries and/or any of its
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customers and/or suppliers, (b) in respect of which disclosure to the Administrative Agent or any Lender (or any of their respective representatives or agents) is prohibited
by applicable Law, (c) that is subject to attorney-client or similar privilege or (d) in respect of which the Borrower or any Subsidiary owes confidentiality obligations to
any third party (it being understood that the Borrower or any of the Subsidiaries shall inform the Administrative Agent of the existence and nature of the confidential
records, documents or other information not being provided and, following a reasonable request from the Administrative Agent, use commercially reasonable efforts to
request consent from an applicable contractual counterparty to disclose such information (but shall not be required to incur any cost or expense or pay any consideration of
any type to such party in order to obtain such consent)).
SECTION 7.11. Use of Proceeds.
Use the proceeds of the Loans solely for general corporate purposes of the Borrower and its Subsidiaries.
ARTICLE VIII
Negative Covenants
So long as any Lender shall have any Commitment hereunder or any Loan or other Obligation hereunder shall remain unpaid or unsatisfied (other than
contingent indemnification obligations for which no claim or demand has been made), the Borrower shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
SECTION 8.01. Liens.
Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the
following:
(a)
(b)
Liens pursuant to any Loan Document;
Liens existing on the Restatement Effective Date and listed on Schedule 8.01 and any renewals or extensions thereof; provided that the scope of the
property covered thereby is not increased;
(c)
Liens for Taxes that are (i) not delinquent or (ii) being contested in good faith and by appropriate proceedings, if adequate reserves with respect
thereto are maintained on the books of the applicable Person in accordance with GAAP;
(d)
carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business that are not overdue
for a period of more than 30 days or that are being contested in good faith and by appropriate proceedings, if adequate reserves with respect thereto are maintained
on the books of the applicable Person;
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(e)
pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;
(f)
deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than
bonds related to judgments or litigation, which are covered in clause (h) below), performance bonds and other obligations of a like nature incurred in the ordinary
course of business;
(g)
easements, rights-of-way, restrictions and other similar encumbrances affecting real property that, in the aggregate, are not substantial in amount and
that do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the
applicable Person;
(h)
Liens securing judgments for the payment of money which do not constitute Events of Default hereunder;
(i)
Liens securing, or in respect of, Indebtedness in respect of capital leases, Synthetic Leases and purchase money obligations for fixed or capital
assets (including, but not limited to, any such Lien granted within 180 days of the acquisition of such fixed or capital asset); provided that (i) such Liens do not at
any time encumber any property other than the property financed by such Indebtedness and (ii) the Indebtedness secured thereby does not exceed the cost or fair
market value, whichever is lower, of the property being acquired on the date of acquisition;
(j)
Liens on property or assets of the Borrower or any Subsidiary granted in connection with Sale and Leaseback Transactions; provided that the
aggregate Attributable Principal Amount in connection with such Sale and Leaseback Transactions shall not at any time be in excess of $100,000,000;
(k)
Liens on property or assets of the Borrower or any Subsidiary granted in connection with Securitization Transactions;
(l)
of goods;
Liens in favor of customs and revenue authorities arising as a matter of Law to secure payment of customs duties in connection with the importation
(m)
licenses of intellectual property rights in the ordinary course of business;
(n)
Liens on the property and assets of any Person to the extent such Liens are existing at the time such Person becomes a member of the Consolidated
Group, and any renewals, extensions or replacements thereof so long as the scope of the property covered thereby is not increased; provided such Liens are not
created in contemplation thereof and do not extend to any property or assets of any other member of the Consolidated Group;
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(o)
Liens on property or assets of the Borrower and any Subsidiary granted in connection with environmental remediation or similar obligations with
respect to such property or assets not to exceed $100,000,000 in the aggregate;
(p)
Liens in favor of the United States or any state thereof, or any agency, instrumentality or political subdivision of any of the foregoing, to secure
partial, progress, advance or other payments or performance pursuant to the provisions of any contract or statute, to the extent not constituting Indebtedness;
(q)
precautionary filings of Uniform Commercial Code financing statements (or any applicable local Law equivalent) in respect of operating leases or
consignment of goods;
(r)
with respect to any real property occupied, owned or leased by the Borrower or any of its Subsidiaries, (i) leases, subleases, tenancies, options,
concession agreements, rental agreements occupancy agreements, franchise agreements, access agreements and any other agreements, whether or not of record and
whether now in existence or hereafter entered into, of the real properties of the Borrower or any Subsidiary granted by such Person to third parties, in each case
entered into in the ordinary course of such Person’s business and so long as, to the extent such real properties are subject to Liens, such Liens do not materially
interfere with the ordinary conduct of business of the Borrower and its Subsidiaries, taken as a whole, and do not materially impair the use of such property for its
intended purposes;
(s)
Liens arising by operation of Law under Article 4 of the Uniform Commercial Code (or any applicable local Law equivalent) in connection with
collection of items provided for therein or under Article 2 of the Uniform Commercial Code (or such applicable local Law equivalent) in favor of a reclaiming
seller of goods or buyer of goods;
(t)
rights of set-off or bankers’ liens of banks or other financial institutions where the Borrower or any of its Subsidiaries maintain deposits in the
ordinary course of business and which are within the general parameters customary in the banking industry, including Liens arising under article 24 or 25 of the
general terms and conditions (algemene bankvoorwaarden) of any member of the Dutch Banker’s Association (Nederlandse Vereniging van Banken) or any similar
term applied by a financial institution in the Netherlands pursuant to its general terms and conditions;
(u)
Liens attaching solely to (i) cash earnest money deposits in connection with any letter of intent or purchase agreement and (ii) proceeds of an asset
disposition permitted hereunder that are held in escrow to secure obligations under the sale documentation relating to such disposition;
(v)
any leases, subleases, licenses or sublicenses granted to others in the ordinary course of business of the Borrower and its Subsidiaries which do not
materially interfere with the ordinary conduct of business of the Borrower and its Subsidiaries;
(w)
any Laws, regulations or ordinances now or hereafter in effect (including, but not limited to, zoning, building and environmental protection) as to
the use, occupancy, subdivision or improvement of real property occupied, owned or leased by the Borrower or any of its Subsidiaries adopted or imposed by any
Governmental Authority;
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(x)
Liens of landlords under leases where the Borrower or any of its Subsidiaries is the tenant, securing performance by the tenant under the lease
arising by statute or under any lease or related contractual obligation entered into in the ordinary course of business;
(y)
(i) Liens that are customary contractual rights of set-off or netting relating to (A) the establishment of depositary relations with banks not granted in
connection with the issuance of Indebtedness, (B) pooled deposit or sweep accounts of the Borrower or any Subsidiary to permit satisfaction of overdraft or similar
obligations or to secure negative cash balances in local accounts of foreign Subsidiaries incurred in the ordinary course of business of the Borrower or any
Subsidiary, (C) purchase orders and other agreements entered into with customers of the Borrower or any Subsidiary in the ordinary course of business and (D)
commodity trading or other brokerage accounts incurred in the ordinary course of business and (ii) Liens on the proceeds of any Indebtedness incurred in
connection with any transaction permitted hereunder, which proceeds have been deposited into an escrow account on customary terms to secure such Indebtedness
pending the application of proceeds to finance such transaction;
(z)
Liens securing insurance premium financing arrangements; provided, that such Liens only encumber the insurance premiums, policies or dividends
with respect to the policies that were financed with the funds advanced under such arrangements;
(aa)
Liens on cash or cash equivalents arising in connection with the defeasance, discharge or redemption of Indebtedness;
(bb) Liens arising out of conditional sale, title retention, consignment, bailment or similar arrangements for the purchase, sale or shipment of goods
entered into in the ordinary course of business;
(cc) Liens (i) on cash advances or escrow deposits in favor of the seller of any property to be acquired by the Borrower or any Subsidiary to be applied
against the purchase price therefor or otherwise in connection with any escrow arrangements with respect thereto or in connection with any disposition permitted
under Section 8.02 and (ii) consisting of an agreement to dispose of any property in a disposition permitted under Section 8.02 solely to the extent such disposition
would have been permitted on the date of the creation of such Lien; and
(dd) in respect of Albemarle Wodgina, Liens created pursuant to the Deed of Cross Security in favor of the manager of, or the joint venture participant in,
the Wodgina Lithium Joint Venture; provided that such Liens do not secure any Indebtedness;
(ee) Liens other than those referred to in clauses (a) through (dd) above, provided, however, that the aggregate principal amount of obligations secured by
such Liens plus the aggregate principal amount of unsecured Indebtedness of Subsidiaries of the Borrower outstanding pursuant to Section 8.07(g) does not exceed
(i) during the Covenant Modification Period, 24% of Consolidated Net Tangible Assets and (ii) thereafter, 30% of Consolidated Net Tangible Assets, in each case,
as appearing in the latest balance sheet delivered pursuant to Section 7.01 (or, prior to the first such delivery, referred to in Section 6.05).
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SECTION 8.02. Mergers, Dispositions, Etc.
Merge into, amalgamate or consolidate with any other Person, or permit any other Person to merge into, amalgamate or consolidate with it, or sell, transfer,
lease or otherwise dispose of (in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) or any capital
stock of any Subsidiary, except that:
(a)
any member of the Consolidated Group may purchase and sell inventory in the ordinary course of business;
(b)
if at the time thereof and immediately after giving effect thereto no Default or Event of Default shall have occurred and be continuing, (i) any
Subsidiary or any other Person may merge into, amalgamate with, consolidate with or liquidate or dissolve into the Borrower or any of its Subsidiaries; provided
that if the Borrower is a party to such transaction, the Borrower is the surviving corporation, and (ii) any Subsidiary may merge into, amalgamate with, consolidate
with or liquidate or dissolve into any other Subsidiary in a transaction in which the surviving entity is a Subsidiary and no Person other than the Borrower or a
Subsidiary receives any consideration therefor (except in the case of a non-wholly-owned Subsidiary, minority equity holders may receive their ratable share of
consideration); provided that if any such Subsidiary is a Domestic Subsidiary, the surviving entity is a Domestic Subsidiary;
(c)
the Borrower may sell all or any portion of the capital stock of any Subsidiary for fair market value, as determined in good faith by the Borrower’s
board of directors; provided such sale does not constitute a sale of all or substantially all of the assets of the Borrower and its Subsidiaries, taken as a whole; and
(d)
the Borrower may (i) transfer, or cause to be transferred, all or any portion of the capital stock of any wholly owned Subsidiary to another wholly
owned Subsidiary and (ii) sell any portion of the capital stock of any Subsidiary in connection with the establishment of a joint venture for the purpose of
developing or continuing a product or business related to any of the Borrower’s existing lines of business as of the Restatement Effective Date.
SECTION 8.03. Change in Nature of Business.
Effective Date or any business similar, complementary, ancillary, reasonably related or incidental thereto.
Engage in any material line of business substantially different from those lines of business conducted by the Consolidated Group on the Restatement
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SECTION 8.04. Transactions with Affiliates.
Enter into any transaction of any kind with any Affiliate of the Borrower, whether or not in the ordinary course of business, other than on fair and
reasonable terms substantially as favorable to the Borrower or such Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time in a comparable
arm’s length transaction with a Person other than an Affiliate; provided that the foregoing restriction (a) shall not restrict dividends or distributions on account of shares of
equity interests issued by Subsidiaries of the Borrower ratably to the holders thereof, (b) shall not apply to transactions between or among the members of the
Consolidated Group and their Affiliates that are necessary or required under applicable Law or by any Governmental Authority and (c) shall not apply to other transactions
between or among any members of the Consolidated Group that are not prohibited by this Agreement (other than this Section 8.04).
SECTION 8.05. Use of Proceeds.
Use the proceeds of any Loan, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within
the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred
for such purpose, in each case in violation of, or for a purpose that violates, Regulation T, U or X of the FRB.
SECTION 8.06. Financial Covenant.
Permit the Consolidated Leverage Ratio as of the end of any fiscal quarter of the Borrower to be greater than: (a) with respect to the fiscal quarter ending
December 30, 2021, 4.00 to 1.0 and (b) with respect to the fiscal quarters ending thereafter, 3.50 to 1.0; provided that, upon consummation of an Acquisition after March
31, 2022 where the consideration includes cash proceeds from the issuance of Funded Debt in excess of $500,000,000, the otherwise applicable maximum Consolidated
Leverage Ratio, at the election of the Borrower (with prior written notice to the Administrative Agent), shall increase by 0.50:1.00 for four consecutive fiscal quarters
beginning with the fiscal quarter in which such Acquisition occurs (the “Adjustment Period”). After any such Acquisition that results in an Adjustment Period, there must
be at least two fiscal quarters subsequent to the end of the Adjustment Period before the Borrower shall be permitted to elect another Adjustment Period. The Borrower
shall be permitted to request no more than two Adjustment Periods during the term of this Agreement; provided, however, in connection with each extension of the
Maturity Date pursuant to Section 2.15, the Borrower shall have the right to request an additional Adjustment Period.
SECTION 8.07. Subsidiary Indebtedness.
Permit any Subsidiary to create, incur, assume or suffer to exist any Indebtedness, except:
(a)
Indebtedness under the Revolving Credit Agreement; provided that the aggregate outstanding principal amount of such Indebtedness shall not
exceed the principal amount permitted to be incurred at such time by the Subsidiaries under the Revolving Credit Agreement as in effect on the Restatement
Effective Date;
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(b)
intercompany Indebtedness among the Borrower and its Subsidiaries or among Subsidiaries;
(c)
Indebtedness of any Person to the extent such Indebtedness is existing at the time such Person becomes a member of the Consolidated Group and,
any refinancings, replacements or extensions thereof so long as the amount of such Indebtedness, plus any accrued and unpaid interest, plus any reasonable penalty,
premium or defeasance costs and reasonable fees and expenses incurred in connection with such refinancings, replacements or extensions, is not increased at the
time of such refinancing, replacement or extension; provided such (i) Indebtedness is not created in contemplation thereof and (ii) the scope of obligors liable for
such Indebtedness is not increased;
(d)
obligations (contingent or otherwise) existing or arising under any Swap Contract; provided that such obligations are (or were) entered into by such
Subsidiary for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by
such Subsidiary, or changes in the value of Securities issued by such Person, and not for purposes of speculation or taking a “market view;”
(e)
Indebtedness in respect of capital leases, Synthetic Leases and purchase money obligations for fixed or capital assets;
(f)
to the extent constituting Indebtedness, obligations in respect of workers’ compensation claims, self-insurance obligations, performance bonds,
surety, appeal or similar bonds and completion guarantees provided in the ordinary course of business;
(g)
other Indebtedness; provided that the aggregate outstanding principal amount of Indebtedness under this Section 8.07(g) shall not exceed the
difference between (A) (i) during the Covenant Modification Period, 24% of Consolidated Net Tangible Assets and (ii) thereafter, 30% of Consolidated Net
Tangible Assets, in each case, as appearing in the latest balance sheet delivered pursuant to Section 7.01 (or, prior to the first such delivery, referred to in
Section 6.05) minus (B) the aggregate outstanding principal amount of Indebtedness of the Borrower secured by Liens permitted by Section 8.01(ee); and
(h)
any guarantee given pursuant to section 8a of the German Act on Partial Retirement (Altersteilzeitgesetz) or section 7e of the Fourth Book of the
German Social Code (Sozialgesetzbuch IV).
SECTION 8.08. Sanctions.
Directly, or knowingly indirectly, use any Loan or the proceeds of any Loan, or lend, contribute or otherwise make available any Loan or the proceeds of
any Loan to any Person, to fund any activities of or business with any Person, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of
Sanctions.
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SECTION 8.09. Anti-Corruption Laws.
Directly, or knowingly indirectly, use any Loan or the proceeds of any Loan for any purpose which would breach the United States Foreign Corrupt
Practices Act of 1977, the United Kingdom Bribery Act 2010 or other similar legislation in other jurisdictions that are applicable to the Borrower or its Subsidiaries.
ARTICLE IX
Events of Default and Remedies
SECTION 9.01. Events of Default.
Any of the following shall constitute an “Event of Default”:
(a)
Non-Payment. The Borrower fails to pay (i) when and as required to be paid herein any amount of principal of any Loan, (ii) within five Business
Days after the same becomes due, any interest on any Loan or any ticking fee or other fee due hereunder or (iii) within five Business Days after the same becomes
due, any other amount payable hereunder or under any other Loan Document;
(b)
Specific Covenants. The Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 7.03, 7.05 or 7.11 or
Article VIII;
(c)
Other Defaults. The Borrower fails to perform or observe any other covenant or agreement (not specified in clause (a) or (b) above) contained in
any Loan Document on its part to be performed or observed and such failure continues for 30 days after the earlier to occur of notice thereof from the
Administrative Agent or any Responsible Officer of the Borrower having actual knowledge of such failure;
(d)
Representations and Warranties. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the
Borrower herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material
respect when made or deemed made;
(e)
Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts)
having an aggregate principal amount (including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than the Threshold
Amount and the continuation of such failure beyond any applicable grace or cure period or (B) after giving effect to any applicable grace or cure period, fails to
observe or perform any other agreement or condition relating to any such Indebtedness or Guarantee or contained in any instrument or agreement evidencing or
securing it, or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such
Indebtedness or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed
(automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded, or (ii) there occurs under any Swap Contract an Early Termination Date (as
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defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which the Borrower or any Subsidiary is the Defaulting
Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which the Borrower or any Subsidiary is an
Affected Party (as so defined) and, in either event, the Swap Termination Value owed by the Borrower or such Subsidiary as a result thereof is greater than the
Threshold Amount and, in the case of any Termination Event not arising out of a default by the Borrower or any Subsidiary, such Swap Termination Value has not
been paid by the Borrower or such Subsidiary when due;
(f)
Insolvency Proceedings, Etc. The Borrower or any Subsidiary (other than an Immaterial Subsidiary) institutes or consents to the institution of any
proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee,
custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undismissed for 60
consecutive calendar days or an order or decree approving or ordering such appointment shall continue unstayed for 30 consecutive calendar days; or any
proceeding under any Debtor Relief Law in respect of any such Person or to all or any material part of its property is instituted without the consent of such Person
and continues undismissed for 60 consecutive calendar days; or an order or decree approving or ordering such proceeding shall have been entered;
(g)
Inability to Pay Debts; Attachment.
(i)
The Borrower or any Subsidiary (other than an Immaterial Subsidiary) becomes unable or admits in writing its inability or fails generally to
pay its debts as they become due; or
(ii)
Any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any
such Person and such process, if not fully bonded, continues undismissed for 60 consecutive calendar days, or an order or decree approving or ordering
such process shall continue unstayed for 30 calendar days;
(h)
Judgments. There is entered against the Borrower or any Subsidiary (i) a final judgment or order for the payment of money in an aggregate amount
exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage) or (ii) any one
or more non-monetary final judgments that have, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in
either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order or (B) there is a period of 45 consecutive days during which
a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect;
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(i)
ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan that has resulted or would reasonably be expected to
result in liability of the Borrower under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the
Threshold Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment
with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the Threshold Amount;
(j)
Invalidity of Loan Documents. Any Loan Document, at any time after its execution and delivery and for any reason other than as expressly
permitted hereunder or as a result of the satisfaction in full of all the Obligations (other than contingent indemnification obligations for which no claim or demand
has been made), ceases to be in full force and effect; or the Borrower or any Subsidiary contests in any manner the validity or enforceability of any Loan
Document; or the Borrower denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan
Document; or
(k)
Change of Control. There occurs any Change of Control.
SECTION 9.02. Remedies Upon Event of Default.
If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take
any or all of the following actions:
(a)
declare the Commitment of each Lender to make Loans to be terminated, whereupon such commitments and obligation shall be terminated; and
(b)
declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;
provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United
States (or any other applicable Debtor Relief Laws), the obligation of each Lender to make Loans shall immediately and automatically terminate and the unpaid principal
amount of all outstanding Loans and all interest and other amounts as aforesaid shall immediately and automatically become due and payable, in each case, without
presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower, and without further act of the Administrative Agent
or any Lender.
SECTION 9.03. Application of Funds.
proviso to Section 9.02), any amounts received on account of the Obligations shall be applied by the Administrative Agent in the following order:
After the exercise of remedies provided for in Section 9.02 (or after the Loans have automatically become immediately due and payable as set forth in the
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First, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of
counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;
Second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the
Lenders (including fees, charges and disbursements of counsel to the Lenders and amounts payable under Article III), ratably among them in proportion to the
respective amounts described in this clause Second payable to them;
Third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans, ratably among the Lenders in proportion to the
respective amounts described in this clause Third held by them;
Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, ratably among the Lenders in proportion to the respective
amounts described in this clause Fourth held by them; and
Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full (other than contingent indemnification obligations for which no
claim or demand has been made), to the Borrower or as otherwise required by Law.
SECTION 10.01. Appointment and Authority.
ARTICLE X
Administrative Agent
Each of the Lenders hereby irrevocably appoints JPMorgan to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents
and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article X are, other than with respect to the Borrower’s consent
rights in Section 10.06, solely for the benefit of the Administrative Agent and the Lenders, and, except for such consent rights, the Borrower shall not have rights as a third
party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term)
with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.
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SECTION 10.02. Rights as a Lender.
The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context
otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from,
lend money to, own Securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any
Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.
SECTION 10.03. Exculpatory Provisions.
hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:
The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties
(a)
shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;
(b)
shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such
other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents or as the Administrative Agent shall in good
faith deem necessary); provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose
the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law, including, for the avoidance of doubt, any action that may be in
violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in
violation of any Debtor Relief Law; and
(c)
shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or
any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as
provided in Section 11.01) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and
nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice (stating that it is a “notice of default”)
describing such Default is given in writing to the Administrative Agent by the Borrower or a Lender. The Administrative Agent shall be deemed to have no knowledge of
any Lender being a Restricted Lender unless and until the Administrative Agent shall have received the written notice from such Lender referred to in Section 1.06, and
then only as and to the extent specified in such notice, and any determination of whether the Required Lenders or any other requisite Lenders shall have provided a
consent or direction in connection with this Agreement
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or any other Loan Document shall not be affected by any delivery to the Administrative Agent of any such written notice subsequent to such consent or direction being
provided by the Required Lenders or other requisite Lenders.
The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or
in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in
connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the
occurrence of any Default, (iv) the sufficiency, validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement,
instrument or document or (v) the satisfaction of any condition set forth in Article V or elsewhere herein, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent or satisfaction of any condition that expressly refers to the matters described therein being acceptable or satisfactory to the
Administrative Agent.
SECTION 10.04. Reliance by Administrative Agent.
(a)
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine
and to have been signed, sent or otherwise authenticated by the proper Person (whether or not such Person in fact meets the requirements set forth in the Loan Documents
for being the signatory, sender or authenticator thereof). The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to
have been made by the proper Person (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the maker thereof), and shall
not incur any liability for relying thereon. In determining compliance with any condition under Article V that by its terms must be fulfilled to the satisfaction of a Lender,
the Administrative Agent may presume that such condition is satisfactory to such Lender unless the Administrative Agent shall have received notice to the contrary from
such Lender prior to the Restatement Effective Date or the applicable Funding Date, as applicable. The Administrative Agent may consult with legal counsel (who may be
counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
(b)
Each Lender hereby agrees that (A) if the Administrative Agent notifies such Lender that the Administrative Agent has determined in its sole
discretion that any funds received by such Lender from the Administrative Agent or any of its Affiliates (whether as a payment, prepayment or repayment of principal,
interest, fees or otherwise; individually and collectively, a “Payment”) were erroneously transmitted to such Lender (whether or not known to such Lender) and demands
the return of such Payment (or a portion thereof), such Lender shall promptly, but in no event later than one Business Day thereafter, return to the Administrative Agent
the amount of any such Payment (or portion thereof) as to which such a demand was made in same day funds, together with interest thereon in respect of each day from
and including the date such Payment (or portion thereof) was received by such Lender to the date such amount is repaid to the Administrative Agent at the greater of the
NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect, and (B)
to the extent permitted by applicable Law, such Lender shall not assert, and hereby waives, as to the Administrative Agent, any claim, counterclaim, defense or right of
set-off or recoupment with respect to any demand, claim or counterclaim by the Administrative Agent for the return of any Payments received, including without
limitation any defense based on “discharge for value” or any similar doctrine. A notice of the Administrative Agent to any Lender under this Section 10.04(b) shall be
conclusive, absent manifest error.
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(ii)
Each Lender hereby further agrees that if it receives a Payment from the Administrative Agent or any of its Affiliates (A) that is in a different
amount than, or on a different date from, that specified in a notice of payment sent by the Administrative Agent (or any of its Affiliates) with respect to such
Payment (a “Payment Notice”) or (B) that was not preceded or accompanied by a Payment Notice, it shall be on notice, in each such case, that an error has been
made with respect to such Payment. Each Lender agrees that, in each such case, or if it otherwise becomes aware a Payment (or portion thereof) may have been
sent in error, such Lender shall promptly notify the Administrative Agent of such occurrence and, upon demand from the Administrative Agent, it shall promptly,
but in no event later than one Business Day thereafter, return to the Administrative Agent the amount of any such Payment (or portion thereof) as to which such a
demand was made in same day funds, together with interest thereon in respect of each day from and including the date such Payment (or portion thereof) was
received by such Lender to the date such amount is repaid to the Administrative Agent at the greater of the NYFRB Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank compensation from time to time in effect.
(iii)
The Borrower hereby agrees that (A) in the event an erroneous Payment (or portion thereof) are not recovered from any Lender that has received
such Payment (or portion thereof) for any reason, the Administrative Agent shall be subrogated to all the rights of such Lender with respect to such amount and (B)
an erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations owed by the Borrower.
(iv)
Each party’s obligations under this Section 10.04(b) shall survive the resignation or replacement of the Administrative Agent or any transfer of
rights or obligations by, or the replacement of, a Lender, the termination of the Commitments or the repayment, satisfaction or discharge of all Obligations under
any Loan Document.
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SECTION 10.05. Delegation of Duties.
The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or
through any one or more sub‑agents appointed by the Administrative Agent. The Administrative Agent and any such sub‑agent may perform any and all of its duties and
exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub‑agent and to the Related
Parties of the Administrative Agent and any such sub‑agent, and shall apply to their respective activities in connection with the syndication of the credit facility provided
for herein as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to
the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful
misconduct in the selection of such sub-agents.
SECTION 10.06. Resignation of Administrative Agent.
(a)
The Administrative Agent may at any time give notice of its resignation to the Lenders and the Borrower. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with the Borrower, and, at all times other than during the existence of an Event of Default, with the
Borrower’s consent (such consent not to be unreasonably withheld), to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any
such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within
30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective
Date”), then the retiring Administrative Agent may (but shall not be obligated to) on behalf of the Lenders, appoint a successor Administrative Agent meeting the
qualifications set forth above; provided that in no event shall any such successor Administrative Agent be a Defaulting Lender. Whether or not a successor has been
appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.
(b)
If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required Lenders may, to
the extent permitted by applicable Law, by notice in writing to the Borrower and such Person remove such Person as Administrative Agent and, in consultation with the
Borrower and, at all times other than during the existence of an Event of Default, with the Borrower’s consent (such consent not to be unreasonably withheld), appoint a
successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days (or such earlier day as
shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the
Removal Effective Date.
(c) With effect from the Resignation Effective Date or the Removal Effective Date, as applicable, (i) the retiring or removed Administrative Agent shall
be discharged from its duties and obligations hereunder and under the other Loan Documents and (ii) except for any indemnity payments or other amounts then owed to
the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall
instead be made by or to each Lender directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above in this
Section. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring or removed Administrative Agent (other than as provided in Sections 3.01(g) and 10.04(b) and other than any rights to
indemnity payments or other amounts
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owed to the retiring or removed Administrative Agent as of the Resignation Effective Date or the Removal Effective Date, as applicable), and the retiring or removed
Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as
provided above in this Section). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor. After the retiring or removed Administrative Agent’s resignation or removal hereunder and under the other
Loan Documents, the provisions of this Article X and Sections 3.01 and 11.04 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them (i) while the retiring or removed Administrative Agent
was acting as Administrative Agent and (ii) after such resignation or removal for as long as any of them continues to act in any capacity hereunder or under the other Loan
Documents, including in respect of any actions taken in connection with transferring the agency to any successor Administrative Agent.
SECTION 10.07. Non-Reliance on Administrative Agent and Other Lenders.
Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent, any Arranger or any other Lender or any of their
Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent, any Arranger or any other Lender or any of their Related Parties
and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or
based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
SECTION 10.08. No Other Duties, Etc.
Anything herein to the contrary notwithstanding, none of the bookrunners, arrangers, syndication agents, documentation agents, co-agents or book
managers listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its
capacity, as applicable, as the Administrative Agent or a Lender hereunder and its rights in respect of indemnities provided for hereunder.
No bookrunner, arranger, syndication agent, documentation agent, co-agent or book manager listed on the cover page hereof shall have or deemed to have
any fiduciary relationship with any Lender.
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SECTION 10.09. Administrative Agent May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial
proceeding relating to the Borrower, the Administrative Agent (irrespective of whether the principal of any Loan shall then be due and payable as herein expressed or by
declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise:
(a)
to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans and all other Obligations that
are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent
(including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective
agents and counsel and all other amounts due the Lenders and the Administrative Agent under Sections 2.09 and 11.04) allowed in such judicial proceeding; and
(b)
to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make
such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, to pay to
the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel,
and any other amounts due the Administrative Agent under Sections 2.09 and 11.04.
Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender to authorize the Administrative Agent to vote in
respect of the claim of any Lender in any such proceeding.
SECTION 10.10. ERISA Matters.
Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to and (y) covenants, from the date such Person
became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of the Administrative Agent and each Arranger and their
respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower, that at least one of the following is and will be true:
(a)
(i)
such Lender is not using “plan assets” (within the meaning of 29 CFR § 2510.3-101, as modified by Section 3(42) of ERISA) of one or more
Benefit Plans in connection with the Loans or the Commitments;
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(ii)
the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent
qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class
exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank
collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such
Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement;
(iii)
(A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B)
such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans,
the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Commitments and this
Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of
subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the
Commitments and this Agreement; or
(iv)
such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such
Lender.
(b)
In addition, unless subclause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has not provided another
representation, warranty and covenant as provided in subclause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date
such Person became a Lender party hereto, to and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender
party hereto, for the benefit of the Administrative Agent and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the
Borrower, that:
(i)
none of the Administrative Agent or any Arranger or any of their respective Affiliates is a fiduciary with respect to the assets of such Lender
(including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents
related to hereto or thereto);
(ii)
the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and
performance of the Loans, the Commitments and this Agreement is independent (within the meaning of 29 CFR § 2510.3-21) and is a bank, an insurance carrier,
an investment adviser, a broker-dealer or other person that holds, or has under management or control, total assets of at least $50 million, in each case as described
in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E);
(iii)
the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and
performance of the Loans, the Commitments and this Agreement is capable of evaluating investment risks independently, both in general and with regard to
particular transactions and investment strategies (including in respect of the Obligations);
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(iv)
the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and
performance of the Loans, the Commitments and this Agreement is a fiduciary under ERISA or the Internal Revenue Code, or both, with respect to the Loans, the
Commitments and this Agreement and is responsible for exercising independent judgment in evaluating the transactions hereunder; and
(v)
no fee or other compensation is being paid directly to the Administrative Agent or any Arranger or any their respective Affiliates for investment
advice (as opposed to other services) in connection with the Loans, the Commitments or this Agreement.
(c)
The Administrative Agent and each Arranger hereby informs the Lenders that each such Person is not undertaking to provide impartial investment
advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions
contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Commitments and this Agreement,
(ii) may recognize a gain if it extended the Loans or the Commitments for an amount less than the amount being paid for an interest in the Loans or the Commitments by
such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring
fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization
fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s
acceptance fees, breakage or other early termination fees or fees similar to the foregoing.
SECTION 11.01. Amendments, Etc.
ARTICLE XI
Miscellaneous
No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower therefrom,
shall be effective unless in writing signed by the Required Lenders and the Borrower and acknowledged by the Administrative Agent, and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:
(a)
extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 9.02) without the written consent of
such Lender, it being understood that a waiver of any condition precedent set forth in Section 5.02 or of an Event of Default is not considered an increase in
Commitments;
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(b)
postpone any date fixed by this Agreement or any other Loan Document for any payment of principal, interest or fees due to any Lender hereunder
or under any other Loan Document without the written consent of such Lender;
(c)
reduce the principal of, or, subject to Section 3.03, the rate of interest specified herein on, any Loan, or any fees payable hereunder or under any
other Loan Document without the written consent of each Lender entitled to receive such amount; provided, however, that only the consent of the Required
Lenders shall be necessary to amend the definition of “Default Rate” (or to waive any obligation of the Borrower to pay interest at the Default Rate);
(d)
change Section 2.13 or Section 9.03 in a manner that would alter the pro rata sharing of payments required thereby, including any such alteration
resulting from any change of the definition of “Pro Rata Share”, without the written consent of each Lender directly affected thereby;
(e)
change any provision of this Section or the percentage set forth in the definition of “Required Lenders” or any other provision hereof specifying the
number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent thereunder
without the written consent of each Lender; provided that, with the consent of the Required Lenders, the provisions of this Section and the definitions of the term
“Required Lenders” may be amended to include references to any new class of commitments or loans created under this Agreement (or to lenders extending such
commitments or loans) on substantially the same basis as the corresponding references relating to the existing Lenders;
(f)
(g)
(h)
change the currency in which any Loan is or may be denominated;
[reserved;] or
consent to the assignment of the Borrower’s rights and obligations hereunder without the written consent of each Lender;
provided further that (i) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect
the rights or duties of the Administrative Agent under this Agreement or any other Loan Document and (ii) each Lender is entitled to vote as such Lender sees fit on any
bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code of the United States
supersedes the unanimous consent provisions set forth herein.
Notwithstanding anything to the contrary herein: (i) the Administrative Agent and the Borrower may make amendments contemplated by Sections 2.15 and
3.03(b); (ii) no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent
which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders),
except that (A) the Commitment of such Defaulting Lender may not be increased or extended without the consent of such Lender and (B) any waiver, amendment or
modification requiring the consent of all Lenders or each affected Lender that by its terms affects such Defaulting Lender disproportionately adversely relative to other
affected Lenders shall require the consent of such Defaulting Lender; and (iii) the Administrative Agent and the Borrower may amend, modify or supplement this
Agreement or any other Loan
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Document to cure or correct administrative errors or omissions, any ambiguity, omission, defect or inconsistency or to effect administrative changes, and such amendment
shall become effective without any further consent of any other party to such Loan Document so long as the Lenders shall have received at least five Business Days’ prior
written notice thereof and the Administrative Agent shall not have received, within five Business Days of the date of such notice to the Lenders, a written notice from the
Required Lenders stating that the Required Lenders object to such amendment. The Administrative Agent may, but shall have no obligation to, with the written
concurrence of any Lender, execute amendments, waivers or consents on behalf of such Lender. Any amendment, waiver or consent effected in accordance with this
Section 11.01 shall be binding upon each Person that is at the time thereof a Lender and each Person that subsequently becomes a Lender.
SECTION 11.02. Notices; Effectiveness; Electronic Communication.
(a)
Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in
Section 11.02(b)), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail or sent by e-mail as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to
the applicable telephone number, as follows:
(i)
if to the Borrower or the Administrative Agent, to the address, e-mail address or telephone number specified for such Person on Schedule 11.02; and
(ii)
if to any Lender, to the address, electronic mail address or telephone number specified in its Administrative Questionnaire (including, as
appropriate, notices delivered solely to the Person designated by a Lender on its Administrative Questionnaire then in effect for the delivery of notices that may
contain MNPI).
Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given
when received. Notices and other communications delivered through electronic communications to the extent provided in Section 11.02(b) shall be effective as provided in
Section 11.02(b).
(b)
Electronic Communications. Notices and other communications to the Lenders hereunder may be delivered or furnished (in addition to e-mail) by
other electronic communication (including the Platform) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to
notices to any Lender pursuant to Article II if such Lender has notified the Administrative Agent that it is incapable of receiving notices under Article II by such electronic
communication. Each of the Administrative Agent and the Borrower may (in addition to e-mail), in its discretion, agree to accept notices and other communications to it
hereunder by other electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or
communications.
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Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written
acknowledgement) and (ii) notices or communications posted to the Platform shall be deemed received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that,
for both clauses (i) and (ii), if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or
communication shall be deemed to have been sent at the opening of business on the next Business Day.
(c)
The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENT PARTIES (AS DEFINED BELOW) DO NOT
WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY
DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY
RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER
MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the
Borrower, any Lender or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the
Borrower’s or the Administrative Agent’s transmission of Borrower Materials or any other information through the Internet, telecommunications, electronic or other
information transmission systems, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a
final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any
Agent Party have any liability to the Borrower, any Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or
actual damages).
(d)
Change of Address, Etc. The Borrower and the Administrative Agent may change its address, telephone number or e-mail address for notices and
other communications hereunder by notice to the other parties hereto. Each Lender may change its address, telephone number or e-mail address for notices and other
communications hereunder by notice to the Borrower and the Administrative Agent. In addition, each Lender agrees to notify the Administrative Agent from time to time
to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number and e-mail address to which notices and other
communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of
such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable
such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable Law, including United States Federal and state
securities Laws, to make reference to Borrower Materials that are not made available through the “Public Side Information” portion of the Platform and that may contain
MNPI.
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(e)
Reliance by Administrative Agent and Lenders. The Administrative Agent and the Lenders shall be entitled to rely and act upon any notices
(including telephonic notices and Loan Notices) purportedly given by or on behalf of the Borrower even if (i) such notices were not made in a manner specified herein,
were incomplete or were not preceded or followed by any other form of notice specified herein or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Borrower shall indemnify the Administrative Agent, each Lender and the Related Parties of each of them from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Borrower, except to the extent that such losses, costs,
expenses or liabilities are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the bad faith, gross negligence or
willful misconduct of, or material breach of this Agreement or any other Loan Document by, the Administrative Agent, such Lender or such Related Party.
All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of
the parties hereto hereby consents to such recording.
SECTION 11.03. No Waiver; Cumulative Remedies; Enforcement.
No failure by any Lender or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege
hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder
or under any other Loan Document (including the imposition of the Default Rate) preclude any other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by Law. No waiver of any provision of any Loan Document or consent to any departure by the Borrower therefrom shall
in any event be effective unless the same shall be permitted by Section 11.01, and then such waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. Without limiting the generality of the foregoing, the execution and delivery of this Agreement or the making of any Loan shall not be
construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or any Related Party of any of the foregoing may have had notice or
knowledge of such Default at the time.
Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and
under the other Loan Documents against the Borrower shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be
instituted and maintained exclusively by, the Administrative Agent in accordance with Section 9.02 for the benefit of all the Lenders; provided, however, that the
foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as
Administrative Agent) hereunder and under the other Loan Documents, (b) any Lender from exercising set-off rights in accordance with Section 11.09 (subject to the
terms of Section 2.13) or (c) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relating to the
Borrower under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan
Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 9.02 and (ii) in addition to the matters
set forth in clauses (b) and (c) of the preceding proviso and subject to Section 2.13,
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any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.
SECTION 11.04. Expenses; Indemnity; Damage Waiver.
(a)
Costs and Expenses. The Borrower shall pay (i) all reasonable out‑of‑pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication of the credit facility provided for
herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers
of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated) and (ii) all out‑of‑pocket expenses incurred by
the Administrative Agent or any Lender (including the fees, charges and disbursements of any counsel for the Administrative Agent or any Lender) in connection with the
enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection
with the Loans made hereunder, including all such out‑of‑pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans; provided
that pursuant to this clause (ii), the Borrower shall not be required to reimburse such fees, charges and disbursements of more than one counsel to the Administrative
Agent and all the Lenders, taken as a whole, and if necessary, one local counsel in any relevant jurisdiction, to the Administrative Agent and the Lenders, taken as a whole,
unless the representation of one or more Lenders by such counsel would be inappropriate due to the existence of an actual or potential conflict of interest, in which case,
upon prior written notice to the Borrower, the Borrower shall also be required to reimburse the reasonable fees, charges and disbursements of one additional counsel to
such affected Lenders in each relevant jurisdiction.
(b)
Indemnification. The Borrower shall indemnify the Administrative Agent (and any sub-agent thereof) and each Lender, and each Related Party of
any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all Liabilities and related
expenses (including the reasonable fees, charges and disbursements of one counsel to the Indemnitees, taken as a whole, and if necessary, one local counsel in any relevant
jurisdiction, to the Indemnitees, taken as a whole, unless the representation of one or more Indemnitees by such counsel would be inappropriate due to the existence of an
actual or potential conflict of interest, in which case, upon prior written notice to the Borrower, the Borrower shall also be required to reimburse the reasonable fees,
charges and disbursements of one additional counsel to such affected Indemnitees in each relevant jurisdiction), actually incurred by any Indemnitee or asserted against
any Indemnitee by any Person (including the Borrower) arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan
Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or
the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only,
the administration of this Agreement and the other Loan Documents, (ii) any Loan or the use or proposed use of the proceeds therefrom, (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or operated by the Borrower or any of its Subsidiaries, or any Environmental Liability related
in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower, and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such Liabilities or related expenses (x) are determined by a court of competent
jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of such Indemnitee or any of its Related
Indemnitees,
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(y) result from a claim brought by the Borrower against such Indemnitee for material breach of such Indemnitee’s (or any of its Related Indemnitee’s) obligations
hereunder or under any other Loan Document, if the Borrower has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction or (z) arise solely from a dispute among the Indemnitees (except when and to the extent that one of the Indemnitees party to such dispute was acting
in its capacity or in fulfilling its role as Administrative Agent, Arranger or any similar role under this Agreement or any other Loan Document) that does not involve any
act or omission of the Borrower or any of its Affiliates. The Borrower shall not be liable for any settlement entered into by an Indemnitee without the prior written consent
of the Borrower (such consent shall not be unreasonably withheld, delayed or conditioned), but if settled with the Borrower’s written consent, or if there is a final and
nonappealable judgment by a court of competent jurisdiction in any such claim, litigation, investigation or proceeding, the Borrower agrees to indemnify and hold
harmless each Indemnitee in the manner and to the extent set forth above; provided that the Borrower shall be deemed to have consented to any such settlement unless the
Borrower shall object thereto by written notice to the applicable Indemnitee within 10 Business Days after having received written notice thereof. Without limiting the
provisions of Section 3.01(c), this Section 11.04(b) shall not apply with respect to Taxes other than any Taxes that represent Liabilities arising from any non-Tax claim.
(c)
Reimbursement by Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under Section 11.04(a) or
11.04(b) to be paid by it to the Administrative Agent (or any sub-agent thereof) or any Related Party of the Administrative Agent (or any sub-agent thereof), but without
affecting the Borrower’s obligation to make such payments, each Lender severally, but not jointly, agrees to pay to the Administrative Agent (or any such sub-agent) or
such Related Party, as the case may be, such Lender’s Pro Rata Share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought
based on each Lender’s share of the outstanding Loans and unfunded Commitments) of such unpaid amount (including any such unpaid amount in respect of a claim
asserted by such Lender); provided that the unreimbursed expense or indemnified Liabilities or related expense, as the case may be, was incurred by or asserted against the
Administrative Agent (or any such sub-agent) in its capacity as such, or against any Related Party acting for the Administrative Agent (or any such sub-agent) in
connection with such capacity. The obligations of the Lenders under this Section 11.04(c) are subject to the provisions of Section 2.12(d).
(d) Waiver of Consequential Damages, Etc. Without limiting the Borrower’s indemnification obligations above, to the fullest extent permitted by
applicable Law, no party hereto shall assert, and each other party hereto hereby waives, any Liabilities against any other party hereto (or any Lender-Related Person), on
any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with or as a result of
this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of
the proceeds thereof (other than in respect of any such damages incurred or paid by an Indemnitee to a third party and to which such Indemnitee is otherwise entitled to
indemnification as provided above). The Borrower shall not assert, and the Borrower hereby waives, any claim against any Lender-Related Person for any Liabilities
arising from the use by others of any information or other materials (including any personal data) obtained through telecommunications, electronic or other information
transmission systems (including the Internet and the Platform) in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby, other than for direct or actual damages resulting from the gross negligence, bad faith or willful misconduct of such Lender-Related Person (or its Related
Indemnitees) as determined by a final and nonappealable judgment of a court of competent jurisdiction.
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(e)
(f)
Payments. All amounts due under this Section 11.04 shall be payable not later than 10 Business Days after written demand therefor.
Survival. The agreements in this Section 11.04 and the indemnity provisions of Section 11.02(e) shall survive the resignation of the Administrative
Agent, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.
SECTION 11.05. [Reserved].
SECTION 11.06. Payments Set Aside.
To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent or any Lender, or the Administrative Agent or any
Lender exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent or such Lender in its discretion) to be repaid to a trustee,
receiver or any other Person, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred and
(b) each Lender severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or paid by
the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the greater of (i) the NYFRB
Rate and (ii) a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or
similar fees customarily charged by the Administrative Agent in connection with the foregoing. The obligations of the Lenders under clause (b) of the preceding sentence
shall survive the payment in full of the Obligations and the termination of this Agreement.
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SECTION 11.07. Successors and Assigns.
(a)
Successors and Assigns Generally. The provisions of this Agreement and the other Loan Documents shall be binding upon and inure to the benefit
of the parties hereto and thereto and their respective successors and assigns permitted hereby, except that the Borrower may not assign or otherwise transfer any of its
rights or obligations hereunder or thereunder without the prior written consent of the Administrative Agent and each Lender, and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with Section 11.07(b), (ii) by way of participation in accordance with
Section 11.07(d) or (iii) by way of pledge or assignment of a security interest subject to the restrictions of Section 11.07(e) (and any other attempted assignment or transfer
by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto,
their respective successors and assigns permitted hereby, Participants to the extent provided in Section 11.07(d), the Indemnitees, Lender-Related Persons and, to the
extent expressly contemplated hereby, the sub-agents of the Administrative Agent and the Related Parties of any of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
Assignments by Lenders. Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including all or a portion of its Commitment or the Loans at the time owing to it); provided that any such assignment shall be
subject to the following conditions:
(b)
(i)
Minimum Amounts.
(A)
in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans or contemporaneous
assignments to related Approved Funds that equal at least the amount specified in subsection (b)(i)(B) of this Section in the aggregate or in the case of an
assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and
(B)
in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment or the principal outstanding
balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption (or an agreement
incorporating by reference a form of Assignment and Assumption posted on the Platform) with respect to such assignment is delivered to the
Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption (or such an agreement), as of the Trade Date, shall not be less than
$5,000,000 unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents
(each such consent not to be unreasonably withheld or delayed).
(ii)
Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement with respect to the Loans or the Commitment, it being understood that this clause (ii) shall not be construed to prohibit the
assignment of (A) a proportionate part of all the assigning Lender’s rights and obligations in respect of its Commitment without assigning a proportionate part of
the assigning Lender’s Loans and (B) a proportionate part of all the assigning Lender’s rights and obligations in respect of its Loans without assigning a
proportionate part of the assigning Lender’s Commitment.
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(iii)
Required Consents. No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in
addition:
(A)
the consent of the Borrower (such consent not to be unreasonably withheld or delayed; provided that it shall be reasonable for the Borrower
to withhold consent if such Person does not provide to the Borrower the information required under Section 11.15) shall be required unless (1) an Event of
Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund;
and
(B)
the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required if such assignment is to
a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender.
(iv)
Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption
(or an agreement incorporating by reference a form of Assignment and Assumption posted on the Platform), together with a processing and recordation fee in the
amount of $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of
any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire and deliver to the Administrative
Agent and the Borrower certification as to exemption (or reduction) for deduction or withholding of Taxes in accordance with Section 11.15 and shall be subject to
the provisions of such Section.
(v)
No Assignment to Certain Persons. No such assignment shall be made to (A) the Borrower or any of its Subsidiaries or other Affiliates, (B) any
Defaulting Lender or any of its Subsidiaries, or any Person that, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in
this clause (B) or (C) a natural person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural person).
(vi)
No Assignment Resulting in Additional Indemnified Taxes, etc. Without the written consent of the Borrower, no such assignment shall be made to
any Person that, on the effective date of such assignment, through its Lending Offices, (A) is not capable of lending to the Borrower without the imposition of any
additional Taxes that would require indemnification payments by the Borrower under this Agreement except, to the extent that such assigning Lender was entitled,
at the time of the assignment, to receive additional amounts from the Borrower with respect to such Taxes pursuant to Section 3.01 or (B) is not capable of lending
at the applicable interest rates.
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(vii) Not Less than Two Lenders. No such assignment shall be made if, immediately after giving effect thereto, there shall be fewer than two Lenders.
(viii) Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment
shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to
the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of
participations or subparticipations or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable
pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably
consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any Lender hereunder (and
interest accrued thereon) and (y) fund its full pro rata share of all Loans. Notwithstanding the foregoing, in the event that any assignment of rights and obligations
of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of
such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.
Subject to acceptance and recording thereof by the Administrative Agent pursuant to Section 11.07(c), from and after the effective date specified in each
Assignment and Assumption (or an agreement incorporating by reference a form of Assignment and Assumption posted on the Platform), the assignee thereunder shall be
a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under
this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall
cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 11.04 with respect to facts and circumstances occurring prior to
the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will
constitute a waiver or release of any claim of any party hereunder arising from such Lender’s having been a Defaulting Lender. Upon request, the Borrower (at its
expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not
comply with this Section 11.07(b) shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance
with Section 11.07(d).
(c)
Register. The Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrower (and such agency being solely for tax
purposes), shall maintain at one of its offices located in the United States a copy of each Assignment and Assumption delivered to it (or the equivalent thereof in electronic
form) and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans
owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the
Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any reasonable
time and from time to time upon reasonable prior notice.
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(ii)
Upon receipt by the Administrative Agent of an Assignment and Assumption (or an agreement incorporating by reference a form of Assignment
and Assumption posted on the Platform) executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder) and the processing and recordation fee referred to above, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register; provided that the Administrative Agent shall not be required to accept such Assignment
and Assumption or so record the information contained therein if the Administrative Agent reasonably believes that such Assignment and Assumption lacks any
written consent required by this Section 11.07 or is otherwise not in proper form. No assignment shall be effective for purposes of this Agreement unless it has
been recorded in the Register as provided in this Section 11.07(c)(ii). Each assignee, by its execution and delivery of an Assignment and Assumption, shall be
deemed to have represented to the assigning Lender and the Administrative Agent that such assignee is not a Person made ineligible under Section 11.07(b)(v).
(d)
Participations. Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to
any Person (other than a natural person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person), the
Borrower or any of its Subsidiaries or other Affiliates or a Defaulting Lender) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under
this Agreement (including all or a portion of its Commitment or Loans); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the
Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. For the avoidance of
doubt, each Lender shall be responsible for the indemnity under Section 11.04(c) without regard to the existence of any participation.
Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, waiver or consent of or under any provision of this Agreement and the other Loan Documents; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or consent described in the first proviso to
Section 11.01 that affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to Section 11.07(b) (it being understood that the documentation required under Section 11.15 shall
be delivered to the Lender that sells the participation) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to Section 11.07(b);
provided that such Participant (A) agrees to be subject to the provisions of Sections 3.06 and 11.16 as if it were an assignee under Section 11.07(b) and (B) shall not be
entitled to receive any greater payment under Sections 3.01 or 3.04, with respect to any participation, than the Lender from whom it acquired the applicable participation
would have been entitled to receive, unless the Borrower consented to the applicable participation. Each Lender that sells a participation agrees, at the Borrower’s request
and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 3.06 with respect to any Participant. To the extent permitted
by Law, each Participant also shall be entitled to the benefits of Section 11.09 as though it were a Lender; provided that such Participant agrees to be subject to Section
2.13 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on
which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in
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the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of
the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Commitment, Loan or other obligations
under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered
form under Section 5f.103-1(c) of the Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat
each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the
contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(e)
Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank or other central banking
authority in other applicable jurisdictions; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.
SECTION 11.08. Confidentiality.
Each of the Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may
be disclosed (a) to its Affiliates, its auditors and its and its Affiliates’ respective Related Parties (it being understood that the Persons to whom such disclosure is made will
be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required or requested by any regulatory
authority, (c) to the extent required by applicable Laws or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the
exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant (or its Related Parties) in,
or any prospective assignee of or Participant (or its Related Parties) in, any of its rights or obligations under this Agreement or to any Eligible Assignee (or its Related
Parties) invited to become a Lender pursuant to Section 11.07(b) (it being understood that the Related Parties to whom such disclosure is made be informed of the
confidential nature of such Information and instructed to keep such Information confidential), (ii) any direct or indirect contractual counterparty or prospective
counterparty (or its Related Parties) to any swap, derivative or other transaction relating to obligations of the Borrower or (iii) any credit insurance provider relating to the
Borrower and its obligations, (g) with the consent of the Borrower, (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent or any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than
the Borrower, (i) to the National Association of Insurance Commissioners or any other similar organization or any nationally recognized rating agency that requires access
to information about a Lender’s or its Affiliates’ investment portfolio in connection with ratings issued with respect to such Lender or its Affiliates or (j) on a confidential
basis to (i) any rating agency in connection with rating the Borrower or its Subsidiaries or the credit facility provided hereunder or (ii) the CUSIP Service Bureau or any
similar agency in connection with the issuance and monitoring of CUSIP numbers or other market identifiers with respect to the credit facilities provided hereunder. In
addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar
service providers to the lending industry and service providers to the Administrative Agent and the Lenders in connection with the administration and management of this
Agreement, the other Loan
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Documents, the Commitments and the Loans. For the purposes of this Agreement, “Information” means all information received from the Borrower or any Subsidiary
relating to the Borrower, any Subsidiary or their businesses, other than any such information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by the Borrower or any Subsidiary; provided that, in the case of information received from the Borrower or a Subsidiary after the
Restatement Effective Date, such information is clearly identified in writing at the time of delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain
the confidentiality of such Information as such Person would accord to its own confidential information.
regarding the use of MNPI and (c) it will handle MNPI in accordance with applicable Law, including United States Federal and state securities Laws.
Each of the Administrative Agent and the Lenders acknowledges that (a) the Information may include MNPI, (b) it has developed compliance procedures
SECTION 11.09. Set-off.
In addition to any rights and remedies of the Lenders provided by Law, upon the occurrence and during the continuance of any Event of Default, each
Lender and any Affiliate of any Lender is authorized at any time and from time to time, without prior notice to the Borrower, any such notice being waived by the
Borrower to the fullest extent permitted by Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at
any time held by, and other Indebtedness at any time owing by, such Lender or such Affiliate to or for the credit or the account of the Borrower against any and all
Obligations owing to such Lender or such Affiliate hereunder or under any other Loan Document, now or hereafter existing, irrespective of whether or not the
Administrative Agent or such Lender shall have made demand under this Agreement or any other Loan Document and although such Obligations may be contingent or
unmatured or owed to a branch or office or Affiliate of such Lender or denominated in a currency different from the branch or office or Affiliate holding such deposit or
obligated on such indebtedness. Each Lender agrees promptly to notify the Borrower and the Administrative Agent after any such set-off and application made by such
Lender; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application.
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SECTION 11.10. Interest Rate Limitation.
Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not
exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in
an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the
Borrower. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may,
to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof and (c) amortize, prorate, allocate and spread in equal or unequal parts the total amount of interest throughout the contemplated term
of the Obligations hereunder.
SECTION 11.11. Counterparts.
This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract, and this has the same effect as if the signature on the counterparts were on a single copy of this agreement.
SECTION 11.12. Integration; Effectiveness.
This Agreement, together with the other Loan Documents, comprises the complete and integrated agreement of the parties on the subject matter hereof and
thereof and supersedes all prior agreements, written or oral, on such subject matter, including the commitments of the Lenders and, if applicable, their Affiliates under any
commitment letter or any commitment advice entered into or provided in connection with the credit facility established hereunder (but do not supersede any other
provisions of any such commitment letter or any fee letter entered into in connection with the credit facility established hereunder that do not by the terms of such
documents terminate upon the effectiveness of this Agreement, all of which provisions shall remain in full force and effect). In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the provisions of this Agreement shall control; provided that the inclusion of supplemental rights or
remedies in favor of the Administrative Agent or the Lenders in any other Loan Document shall not be deemed a conflict with this Agreement. Each Loan Document was
drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any party, but rather in accordance with the fair
meaning thereof. Except as provided in Section 5.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto.
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SECTION 11.13. Survival of Representations and Warranties.
All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by or on behalf of the Administrative Agent, any Lender or any of their respective Affiliates
and notwithstanding that the Administrative Agent, any Lender or any of their respective Affiliates may have had notice or knowledge of any Default at the time of any
Loan, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied (other than contingent
indemnification obligations for which no claim or demand has been made).
SECTION 11.14. Severability.
If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of
the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith
negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal,
invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction. Without limiting the foregoing provisions of this Section 11.14, if and to the extent that the enforceability of any provisions in this Agreement relating to
Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent, then such provisions shall be deemed to be in effect
only to the extent not so limited.
SECTION 11.15. Tax Forms.
(a)
(i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document
shall deliver to the Administrative Agent and the Borrower, at the time or times reasonably requested by the Administrative Agent or the Borrower, and at the time or
times required by applicable Law, such properly completed and executed documentation reasonably requested by the Administrative Agent or the Borrower, or required by
applicable Law, as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the
Administrative Agent or the Borrower, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Administrative Agent or the
Borrower, as will enable the Administrative Agent or the Borrower to determine whether or not such Lender is subject to backup withholding or information reporting
requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such
documentation set forth in Sections 11.15(a)(ii) and 11.15(a)(iii)) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission
would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
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(ii) Without limiting the generality of the foregoing, a Lender shall deliver to the Administrative Agent on or prior to the date on which such Lender
becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Administrative Agent), executed copies of IRS Form
W-9 or W-8 certifying that such Lender is exempt from U.S. Federal backup withholding tax.
(iii)
If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding tax imposed by FATCA if such Lender were
to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code, as
applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by Law and at such time or times reasonably
requested by the Borrower or the Administrative Agent such documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of
the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the
Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s
obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this paragraph, “FATCA” shall include
any amendments made to FATCA after the Closing Date.
If any Lender fails to deliver such forms, then the Administrative Agent or the Borrower shall withhold amounts required to be withheld by
applicable Laws from payments under any Loan Document at the applicable statutory rate, without reduction. The Borrower shall not have any liability under Section 3.01
or otherwise with respect to amounts withheld by the Administrative Agent pursuant to this Section 11.15(b).
(b)
SECTION 11.16. Replacement of Lenders.
If (i) any Lender is a Non-Extending Lender, (ii) any Lender requests compensation under Section 3.04, (iii) the Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01, (iv) if any Lender is a Defaulting Lender, (v) any Lender (a
“Non-Consenting Lender”) does not consent to a proposed amendment, waiver or consent with respect to any Loan Document that has been approved by the Required
Lenders as provided in Section 11.01 but requires unanimous consent of all Lenders or all Lenders directly affected thereby or (vi) under any other circumstances set forth
herein providing that the Borrower shall have the right to replace a Lender as a party to this Agreement, then the Borrower may, at its sole expense and effort, upon notice
to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in,
and consents required by, Section 11.07), all of its interests, rights (other than its existing rights to payments pursuant to Sections 3.01 and 3.04) and obligations under this
Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that:
(a)
the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 11.07(b);
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(b)
such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);
(c)
in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section
3.01, such assignment will result in a reduction in such compensation or payments thereafter;
(d)
(e)
such assignment does not conflict with applicable Laws; and
in the case of any such assignment resulting from a Non-Consenting Lender’s failure to consent to a proposed amendment, waiver or consent with
respect to any Loan Document, the applicable assignee consents to the proposed amendment, waiver or consent;
provided, further, so long as Sections 11.16(a) through 11.16(e) have been satisfied, the failure by such Lender to execute and deliver an Assignment and Assumption shall
not impair the validity of the removal of such Lender and the mandatory assignment of such Lender’s Commitments and outstanding Loans pursuant to this Section 11.16
shall nevertheless be effective without the execution by such Lender of an Assignment and Assumption.
A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation cease to apply.
SECTION 11.17. USA PATRIOT Act Notice.
Each Lender that is subject to the PATRIOT Act and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower that
pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify the Borrower in accordance with the
PATRIOT Act. The Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the
Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules
and regulations, including the PATRIOT Act.
SECTION 11.18. Governing Law; Jurisdiction; Etc.
GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK (OTHER THAN THOSE CONFLICT OF LAW RULES THAT WOULD DEFER TO THE SUBSTANTIVE LAWS OF ANOTHER
JURISDICTION).
(a)
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(b)
SUBMISSION TO JURISDICTION. THE BORROWER IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT
COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER IN LAW OR EQUITY, WHETHER IN
CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER OR ANY RELATED PARTY OF THE FOREGOING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS RELATING HERETO OR
THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED
STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE
PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN
RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL
AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY
JURISDICTION.
(c) WAIVER OF VENUE. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION,
LITIGATION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS
RELATING HERETO OR THERETO, IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION, LITIGATION OR PROCEEDING IN ANY SUCH COURT.
(d)
SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED
FOR NOTICES IN SECTION 11.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.
SECTION 11.19. Waiver of Right to Trial by Jury.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF
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ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION.
SECTION 11.20. Judgment Currency.
If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Loan Document in one currency into
another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the first
currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation of the Borrower in respect of any such sum due
from it to the Administrative Agent or any Lender hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the “Judgment
Currency”) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be discharged
only to the extent that on the Business Day following receipt by the Administrative Agent or such Lender, as the case may be, of any sum adjudged to be so due in the
Judgment Currency, the Administrative Agent or such Lender, as the case may be, may in accordance with normal banking procedures purchase the Agreement Currency
with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due to the Administrative Agent or any Lender from
the Borrower in the Agreement Currency, the Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Administrative Agent or
such Lender, as the case may be, against such loss. If the amount of the Agreement Currency so purchased is greater than the sum originally due to the Administrative
Agent or any Lender in such currency, the Administrative Agent or such Lender, as the case may be, agrees to return the amount of any excess to the Borrower (or to any
other Person who may be entitled thereto under applicable Law).
SECTION 11.21. No Advisory or Fiduciary Responsibility.
In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof
or of any other Loan Document), the Borrower acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services
regarding this Agreement provided by the Administrative Agent and the Arrangers are arm’s-length commercial transactions between the Borrower and its Affiliates, on
the one hand, and the Administrative Agent and the Arrangers, on the other hand, (B) the Borrower has consulted its own legal, accounting, regulatory and tax advisors to
the extent it has deemed appropriate and (C) the Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions
contemplated hereby and by the other Loan Documents; (ii) (A) each of the Administrative Agent, the Arrangers and the Lenders is and has been acting solely as a
principal and, except as expressly agreed in writing by the relevant parties, has not been, is not and will not be acting as an advisor, agent or fiduciary for the Borrower or
any of its Affiliates or any other Person and (B) neither the Administrative Agent nor any Arranger nor any Lender has any obligation to the Borrower or any of its
Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the
Administrative Agent, the Arrangers and the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from
those of the Borrower and its Affiliates, and neither the Administrative Agent nor any Arranger has any obligation to disclose any of such interests to the Borrower and its
Affiliates. The Borrower agrees that it will not assert any claim against the Administrative Agent, any Arranger, any
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Lender or any of their respective Affiliates based on an alleged breach of fiduciary duty by the Administrative Agent, any Arranger, any Lender or any of their respective
Affiliates in connection with this Agreement and the transactions contemplated hereby.
SECTION 11.22. Electronic Execution.
Delivery of an executed counterpart of a signature page of (a) this Agreement, (b) any other Loan Document and/or (c) any document, amendment,
approval, consent, information, notice (including, for the avoidance of doubt, any notice delivered pursuant to Section 11.02), certificate, request, statement, disclosure or
authorization related to this Agreement, any other Loan Document and/or the transactions contemplated hereby and/or thereby (each an “Ancillary Document”) that is an
Electronic Signature transmitted by fax, emailed .pdf or any other electronic means that reproduces an image of an actual executed signature page shall be effective as
delivery of a manually executed counterpart of this Agreement, such other Loan Document or such Ancillary Document, as applicable. The words “execution”, “signed”,
“signature”, “delivery”, and words of like import in or relating to this Agreement, any other Loan Document and/or any Ancillary Document shall be deemed to include
Electronic Signatures, deliveries or the keeping of records in any electronic form (including deliveries by fax, emailed .pdf or any other electronic means that reproduces
an image of an actual executed signature page), each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical
delivery thereof or the use of a paper-based recordkeeping system, as the case may be; provided that nothing herein shall require the Administrative Agent to accept
Electronic Signatures in any form or format without its prior written consent and pursuant to procedures approved by it; provided, further, without limiting the foregoing,
(i) to the extent the Administrative Agent has agreed to accept any Electronic Signature, the Administrative Agent and each of the Lenders shall be entitled to rely on such
Electronic Signature purportedly given by or on behalf of the Borrower without further verification thereof and without any obligation to review the appearance or form of
any such Electronic Signature and (ii) upon the request of the Administrative Agent or any Lender, any Electronic Signature shall be promptly followed by a manually
executed counterpart. Without limiting the generality of the foregoing, the Borrower hereby (A) agrees that, for all purposes, including without limitation in connection
with any workout, restructuring, enforcement of remedies, bankruptcy proceedings or litigation among the Administrative Agent, the Lenders and the Borrower,
Electronic Signatures transmitted by fax, emailed .pdf or any other electronic means that reproduces an image of an actual executed signature page and/or any electronic
images of this Agreement, any other Loan Document and/or any Ancillary Document shall have the same legal effect, validity and enforceability as any paper original,
(B) agrees that the Administrative Agent and each of the Lenders may, at its option, create one or more copies of this Agreement, any other Loan Document and/or any
Ancillary Document in the form of an imaged electronic record in any format, which shall be deemed created in the ordinary course of such Person’s business, and destroy
the original paper document (and all such electronic records shall be considered an original for all purposes and shall have the same legal effect, validity and enforceability
as a paper record), (C) waives any argument, defense or right to contest the legal effect, validity or enforceability of this Agreement, any other Loan Document and/or any
Ancillary Document based solely on the lack of paper original copies of this Agreement, such other Loan Document and/or such Ancillary Document, respectively,
including with respect to any signature pages thereto, and (D) waives any claim against any Lender-Related Person for any Liabilities arising solely from the
Administrative Agent’s and/or any Lender’s reliance on or use of Electronic Signatures and/or transmissions by fax, emailed .pdf or any other electronic means that
reproduces an image of an actual executed signature page, including any Liabilities arising as a result of the failure of the Borrower to use any available security measures
in connection with the execution, delivery or transmission of any Electronic Signature.
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SECTION 11.23. [Reserved].
SECTION 11.24. [Reserved].
SECTION 11.25. Acknowledgment and Consent to Bail-In of Affected Financial Institutions.
Solely to the extent any Lender that is an Affected Financial Institution is a party to this Agreement and notwithstanding anything to the contrary in any Loan
Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender that is an
Affected Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the Write-Down and Conversion Powers of the
applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a)
the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising hereunder which
may be payable to it by any Lender that is an Affected Financial Institution; and
(b)
the effects of any Bail-In Action on any such liability, including, if applicable:
(i)
a reduction in full or in part or cancellation of any such liability;
(ii)
a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial Institution, its
parent undertaking or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will
be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(iii)
the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of the applicable
Resolution Authority.
102
[SIGNATURE PAGES FOLLOW]
103
010-9301-3624/4/AMERICAS
[[5756284]]
Schedules to Syndicated Facility Agreement
Lender
JPMorgan Chase Bank, N.A.
Bank of America, N.A.
Banco Santander, S.A., New York Branch
Goldman Sachs Bank USA
HSBC Bank USA, National Association
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation
Truist Bank
U.S. Bank National Association
The Northern Trust Company
Total
SCHEDULE 2.01
Commitments
Commitment
$100,000,000.00
$100,000,000.00
$65,000,000.00
$65,000,000.00
$65,000,000.00
$65,000,000.00
$65,000,000.00
$65,000,000.00
$65,000,000.00
$65,000,000.00
$30,000,000.00
$750,000,000.00
Schedules to Syndicated Facility Agreement
Liens described by the following UCC financing statements:
LOUISIANA SECRETARY OF STATE:
SCHEDULE 8.01
Existing Liens
Debtor:
Secured Party:
File Number:
File Date:
Continuation Date:
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Collateral:
Albemarle Corporation
Key Equipment Finance Inc.
09-1182130
06/08/2012
03/15/2017
Goods and Property described in the above referenced UCC financing statement, and certain collateral related
thereto as specified in such financing statement and the applicable underlying agreement(s); 5-2012 Club Car
Carryall 232 Electric
Albemarle Corporation
Caterpillar Financial Services Corporation
26-411113
11/19/2021
Leased equipment and related property
VIRGINIA STATE CORPORATION COMMISSION:
Debtor:
Secured Party:
File Number:
File Date:
Continuation Date:
Amendment Date:
Continuation Date
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Continuation Date:
Collateral:
Albemarle Corporation
Vallen Distribution, Inc.
09-06-17-7194-1
06/17/2009
02/27/2014
01/16/2017
05/20/2019
All parts, items and products held by the Debtor on consignment from the Secured Party, and certain collateral
related thereto as specified in such financing statement and the applicable underlying agreement(s)
Albemarle Corporation
Wells Fargo Bank, N.A.
15-07-29-3832-1
07/29/2015
06/05/2020
1 Used 2013 Rail King RK320 Rail Car Mover S/N RCM-988-5 and certain collateral related thereto as
specified in such financing statement and the applicable underlying agreement(s)
Schedules to Syndicated Facility Agreement
Debtor:
Secured Party:
File Number:
File Date:
Continuation Date:
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Collateral:
Debtor:
Secured Party:
File Number:
Albemarle Corporation
Caterpillar Financial Services Corporation
16-12-14-3897-9
12/14/2016
06/22/2021
1 Caterpillar 420F2ST Backhoe Loader S/N: HWC01120, 1.4 cubic yard GP Bucket, 24” HD Bucket, Thumb,
and certain collateral related thereto as specified in such financing statement and the applicable underlying
agreement(s)
Albemarle Corporation
Konica Minolta Premier Finance
17-05-18-3882-3
05/18/2017
3 – Bizhub C3350, 19 – Bizhub C458, and certain collateral related thereto as specified in such financing
statement and the applicable underlying agreement(s)
Albemarle Corporation
De Lage Landen Financial Services, Inc.
17-06-08-3830-5
06/08/2017
12 Caterpillar GP25N5-GLE forklifts with battery and charger as more particularly described in the financing
statement and certain collateral related thereto as specified in such financing statement and the applicable
underlying agreement(s)
Albemarle Corporation
DLL Finance LLC
17-07-05-3874-3
07/05/2017
Club car, CA100E, Elec Utility (QTY 33)
Albemarle Corporation
Konica Minolta Premier Finance
18-07-12-3932-4
07/12/2018
8 BIZHUB C258, 6 BIZHUB C368 and all currently existing and future attachments, parts, accessories and add-
ons for all of the foregoing equipment, and all products and proceeds thereof
Albemarle Corporation
Konica Minolta Premier Finance
18-07-31-3903-3
Schedules to Syndicated Facility Agreement
File Date:
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Collateral:
Debtor:
Secured Party:
File Number:
File Date:
Collateral:
07/31/2018
1-BIZHUB C368, 15-BIZHUB C258, RIGHTFAX Software and all currently existing and future attachments,
parts, accessories and add-ons for all of the foregoing equipment, and all products and proceeds thereof
Albemarle Corporation
Konica Minolta Premier Finance
19-04-25-3932-7
04/25/2019
4 BIZHUB C659 and all currently existing and future attachments, parts, accessories and add-ons for all of the
foregoing equipment, and all products and proceeds thereof
Albemarle Corporation
Motion Industries, Inc.
20-20-01-1402-1948-8
12/13/2019
Maintenance, repair, operational assets, materials, parts, equipment, supplies, inventory, products and other
tangible personal property and all other assets, including goods and merchandise, now or hereafter held for
resale, use or consumption in Debtor’s (Consignee’s) business and supplied by Secured Party (Consignor) under
consignment or other agreement
Albemarle Corporation
Wells Fargo Equipment Finance, Inc.
20-20-09-2200-8894-8
09/22/2020
1 John Deere Model 670GP Moter Grader, S/N: 1DW670GPF677538 together with all replacements,
substitutions, parts, improvements, repairs and accessories and all additions incorporated therein or affixed
thereto
Albemarle Corporation
Konica Minolta Premier Finance
20-21-07-3000-4935-6
06/30/2021
Collateral includes several specific model numbers or serial numbers for items of equipment, including all
currently existing and future attachments, parts, accessories and add-ons for such listed equipment, and all
products and proceeds thereof
Schedules to Syndicated Facility Agreement
FORM OF LOAN NOTICE
EXHIBIT A
___________, 20__
To: JPMorgan Chase Bank, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to the Syndicated Facility Agreement dated as of August 14, 2019 (as amended, restated, extended, supplemented or otherwise modified
in writing from time to time, the “Credit Agreement”), among Albemarle Corporation, a Virginia corporation (the “Borrower”), the Lenders from time to time party
thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. Capitalized terms used but not otherwise defined herein have the meanings provided in the Credit
Agreement.
The undersigned hereby requests (select one):
A borrowing of Loans
1.
2.
3.
4.
5.
1
The date of the Borrowing is ________.
The aggregate principal amount of the requested Loans is US$__________.
The initial Type of requested Loans is [Base Rate Loans][LIBOR Loans].
2
The initial Interest Period is ______ [month[s]] .
3
The Borrowing is to be credited to the Borrower indicated above at [ ], ABA #[ ], Account #[ ], Attention:[ ].
A conversion or continuation of a Borrowing
1.
Borrowing to which this request applies:
Principal Amount: [ ]
Type: [ ]
1
Must be a Business Day.
2
For LIBOR Loans only. To be a period permitted under the definition of “Interest Period” in the Credit Agreement.
3
Must be an account reasonably acceptable to the Administrative Agent.
Interest Period : [ ]
4
2. Effective date of this election: [ ]
5
6
3. Resulting Borrowing[s]:
7
Principal Amount : [ ]
Type: [ ]
Interest Period: [ ]
8
9
ALBEMARLE CORPORATION
by
Name:
Title:
4
In the case of a LIBOR Borrowing, specify the last day of the current Interest Period therefor.
5
Must be a Business Day.
6
If different options are being elected with respect to different portions of the Borrowing, provide the information required by this item 3 for each resulting Borrowing.
7
Indicate the principal amount of the resulting Borrowing and the percentage of the Borrowing in item 1 above.
8
Must comply with the requirements set forth in Section 2.02(a) of the Credit Agreement.
9
Applicable only if the resulting Borrowing is to be a LIBOR Borrowing. To be a period permitted under the definition of “Interest Period” in the Credit Agreement.
FORM OF NOTE
EXHIBIT B
______________, 20__
FOR VALUE RECEIVED, Albemarle Corporation, a Virginia corporation (the “Borrower”), hereby promises to pay to _____________________ (the
“Lender”) or its registered assigns, in accordance with the provisions of the Credit Agreement (as hereinafter defined), the principal amount of each Loan made by the
Lender to the Borrower under that certain Syndicated Facility Agreement, dated as of August 14, 2019 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Credit Agreement”), among the Borrower, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as
Administrative Agent. Capitalized terms used but not otherwise defined herein have the meanings provided in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount of each Loan made by the Lender to the Borrower from the date of such Loan until
such principal amount is paid in full, at such interest rates and at such times as provided in the Credit Agreement. All payments of principal and interest shall be made to
the Administrative Agent for the account of the Lender in Dollars and in immediately available funds to the account specified by the Administrative Agent. If any amount
is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) at the Default Rate set forth in the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the
terms and conditions provided therein. Upon the occurrence and continuation of one or more of the Events of Default specified in the Credit Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Credit Agreement. Loans made by the Lender
shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this
Note and endorse thereon the date, Type, amount and maturity of its Loans and payments with respect thereto.
The Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and
non-payment of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
ALBEMARLE CORPORATION
by
Name:
Title:
FORM OF COMPLIANCE CERTIFICATE
EXHIBIT C
The form of this Compliance Certificate has been prepared for convenience only, and is not to affect, or to be taken into consideration in interpreting,
the terms of the Credit Agreement referred to below. The obligations of the Borrower under the Credit Agreement are as set forth in the Credit Agreement, and
nothing in this Compliance Certificate, or the form hereof, shall modify such obligations or constitute a waiver of compliance therewith in accordance with the terms
of the Credit Agreement. In the event of any conflict between the terms of this Compliance Certificate and the terms of the Credit Agreement, the terms of the Credit
Agreement shall govern and control, and the terms of this Compliance Certificate are to be modified accordingly.
Financial Statements Date: ___________, 20__
To: JPMorgan Chase Bank, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to the Syndicated Facility Agreement dated as of August 14, 2019 (as amended, restated, extended, supplemented or otherwise modified
in writing from time to time, the “Credit Agreement”), among Albemarle Corporation, a Virginia corporation (the “Borrower”), the Lenders from time to time party
thereto and JPMorgan Chase Bank, N.A., as Administrative Agent. Capitalized terms used but not otherwise defined herein have the meanings provided in the Credit
Agreement.
The undersigned hereby certifies as of the date hereof that [he/she] is the [ ] of the Borrower, and that, in [his/her] capacity as such, [he/she] is authorized to
execute and deliver this Certificate to the Administrative Agent on the behalf of the Borrower, and that:
[Use following paragraph 1 for fiscal year-end financial statements:]
[1. The audited consolidated financial statements required by Section 7.01(a) of the Credit Agreement for the fiscal year of the Borrower ended as of the
above date, together with the report and opinion of an independent registered public accounting firm required by such Section, have been filed with the SEC and are
available on the website of the SEC at http://www.sec.gov.] [or] [Attached hereto as Schedule 1 are the audited consolidated financial statements required by Section
7.01(a) of the Credit Agreement for the fiscal year of the Borrower ended as of the above date, together with the report and opinion of an independent registered public
accounting firm required by such Section.]
[Use following paragraph 1 for fiscal quarter-end financial statements:]
[1. The unaudited consolidated financial statements required by Section 7.01(b) of the Credit Agreement for the fiscal quarter, and the portion of the fiscal
year, of the Borrower ended as of the above date have been filed with the SEC and are available on the website of the SEC at http://www.sec.gov.] [or] [Attached hereto as
Schedule 1 are the unaudited consolidated financial statements required by Section 7.01(b) of the Credit Agreement for the fiscal quarter, and the portion of the fiscal year,
of the Borrower ended as of the above date.] Such financial statements fairly present in all material respects the financial position, results of operations and cash flows of
the Consolidated Group in accordance with GAAP as of the date and for the period
[[5753921]]
covered thereby, subject only to normal year-end audit adjustments and the absence of footnotes.]
2. [To the best knowledge of the undersigned, no Default or Event of Default exists as of the date hereof.]
[or]
[The following is a list of each existing Default or Event of Default, the nature and extent thereof and the proposed actions of the Borrower with respect
thereto:]
3. The Financial Covenant analyses and information set forth on Schedule [1][2] attached hereto (i) are true and accurate on and as of the date hereof and
(ii) demonstrate compliance with Section 8.06 of the Credit Agreement.
4. Set forth below is a summary of all material changes in GAAP affecting the consolidated financial statements of the Borrower and in the consistent
application thereof by the Borrower occurring during the fiscal quarter of the Borrower ended as of the above date, the effect on the Financial Covenant resulting
therefrom and a reconciliation between calculation of the Financial Covenant before and after giving effect to such changes:
[ ]
[signature page follows]
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of __________ ___, ______.
ALBEMARLE CORPORATION
by
Name:
Title:
[Schedule 1
to Compliance Certificate]
Financial statements for the fiscal [year][quarter] of the Borrower ended as of __________, 20__
[see attached]
Schedule [1][2]
to Compliance Certificate
Computations of Financial Covenant
Financial Statements Date: ___________, 20__
1.
Consolidated Leverage Ratio
(a) Consolidated Funded Debt as of such date (without duplication) [(a)(i) + (a)(ii) + (a)(iii) + (a)(iv) + (a)(v) + (a)(vi) +
(a)(vii) + (a)(viii)] minus Unrestricted Cash [(a)(ix)]
(i)
(ii)
all obligations for borrowed money, whether current or long-term (including the Loans), and all obligations
evidenced by bonds, debentures, notes, loan agreements or other similar instruments, including convertible debt
instruments
all purchase money indebtedness (including indebtedness and obligations in respect of conditional sales and title retention
arrangements, except for customary conditional sales and title retention arrangements with suppliers that are entered into
in the ordinary course of business) and all indebtedness and obligations in respect of the deferred purchase price of
property or services (other than trade accounts payable incurred in the ordinary course of business and payable on
customary trade terms)
(iii)
all contingent obligations and unreimbursed drawings under letters of credit (including standby and commercial), bankers’
acceptances, bank guaranties, surety bonds and similar instruments
(iv)
the Attributable Principal Amount of capital leases and Synthetic Leases
(v)
the Attributable Principal Amount of Securitization Transactions
(vi)
all preferred stock and comparable equity interests providing or mandatory redemption, sinking fund or other like
payments prior to 91 days after the latest Maturity Date currently in effect
$[___,___,___]
$[___,___,___]
$[___,___,___]
$[___,___,___]
$[___,___,___]
$[___,___,___]
$[___,___,___]
(vii) Guarantees in respect of Funded Debt of another Person
(viii) any Funded Debt described in clauses (i) through (vii) above of any partnership or joint venture or other similar entity in
which any member of the Consolidated Group is a general partner or joint venturer, and, as such, has personal liability for
such obligations, but only to the extent there is recourse to such Person for payment thereof
(ix) Unrestricted Cash: cash and cash equivalents owned at such time by any member of the Consolidated Group, determined
on a consolidated basis in accordance with GAAP
10
$[___,___,___]
$[___,___,___]
$[___,___,___]
(b) Consolidated Net Income for the period of the four fiscal quarters ending on such date [(b)(i) [-/+] (b)(ii) – (b)(iii)]
$[___,___,___]
(i)
net income of the Consolidated Group for such period
(ii)
(iii)
items reported as nonrecurring or unusual in the consolidated financial statements of the Borrower and the Consolidated
Group and related tax effects
to the extent included in the amount determined pursuant to clauses (i) and (ii) above, the income of any Subsidiary to the
extent the payment of such income in the form of a distribution or repayment of any Indebtedness to the Borrower or a
Subsidiary is not permitted, whether on account of any Organization Document restriction, any Contractual Obligation or
any Law applicable to such Subsidiary
$[___,___,___]
$[___,___,___]
$[___,___,___]
(c) Consolidated EBITDA for the period of the four fiscal quarters ending on such date [(c)(i) + (c)(ii) + (c)(iii) + (c)(iv)
+ (c)(v) + (c)(vi) + (c)(vii) + (c)(viii) + (c)(ix) + (c)(x) + (c)(xi) - (c)(xii) - (c)(xiii)]
$[___,___,___]
10
To be included only if such cash and cash equivalents do not appear (and in accordance with GAAP would not be required to appear) as “restricted” on the consolidated balance sheet of the
Consolidated Group prepared as of such time in accordance with GAAP.
(i)
Consolidated Net Income for such period
11
(ii)
Consolidated Interest Charges for such period
(iii)
the provision for federal, state, local and foreign income taxes payable by the Consolidated Group for such period
(iv)
the amount of depreciation and amortization expense for such period
(v)
non-cash expenses for such period (excluding any non-cash expense to the extent that it represents an accrual of or reserve
for cash payments in any future period)
(vi)
non-cash goodwill impairment charges for such period
(vii)
any non-cash loss for such period attributable to the mark-to-market adjustments in the valuation of pension liabilities (to
the extent the cash impact resulting from such loss has not been realized) in accordance with FASB ASC 715
(viii) any fees, expenses or charges for such period (other than depreciation or amortization expense) related to any Acquisition,
Disposition, issuance of equity interests, other transactions (excluding intercompany transactions) permitted by Section
8.02 of the Credit Agreement, or the incurrence of Indebtedness not prohibited by the Credit Agreement (including any
refinancing or amendment thereof) (in each case, whether or not consummated), including, but not limited to, such fees,
expenses or charges related to the Credit Agreement and the other Loan Documents and any amendment or other
modification of the Credit Agreement or the other Loan Documents
$[___,___,___]
$[___,___,___]
$[___,___,___]
$[___,___,___]
$[___,___,___]
$[___,___,___]
$[___,___,___]
$[___,___,___]
(ix)
any expense for such period to the extent that a corresponding amount is received during such period in cash by the
Borrower or any of its Subsidiaries under any agreement providing for indemnification or reimbursement of such
expenses
$[___,___,___]
11
duplication.
Items set forth below (other than under in the case of clause (x) below) to be added or deducted, as applicable, to the extent included in Consolidated Net Income for such period and without
(x)
(xi)
any expense with respect to liability or casualty events or business interruption to the extent reimbursed to the Borrower
or any of its Subsidiaries during such period by third party insurance
the amount of dividends, distributions or other payments (including any ordinary course dividend, distribution or other
payment) that are actually received in cash (or converted into cash) for such period by a member of the Consolidated
Group from any Person that is not a member of the Consolidated Group or otherwise in respect of any unconsolidated
investment
(xii) non-cash income for such period (excluding any non-cash income to the extent that it represents cash receipts in any
future period)
(xiii) any non-cash gains for such period attributable to the mark-to-market adjustments in the valuation of pension liabilities in
accordance with FASB ASC 715
(d) Consolidated Leverage Ratio [(a)/(c)]
$[___,___,___]
$[___,___,___]
$[___,___,___]
$[___,___,___]
[ ]:1.00
FORM OF ASSIGNMENT AND ASSUMPTION
EXHIBIT D
This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between
[Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used but not defined herein shall have the meanings given to
them in the Syndicated Facility Agreement identified below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.
The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes
from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative
Agent as contemplated below (i) all of the Assignor’s rights and obligations as a Lender under the Credit Agreement and any other documents or instruments delivered
pursuant thereto to the extent related to the amount and equal to the percentage interest identified below of all of such outstanding rights and obligations of the Assignor
under the credit facility identified below and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or
instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to,
contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as, the “Assigned Interest”). Such
sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the
Assignor.
1. Assignor: ______________________________
12
[Assignor [is][is not] a Defaulting Lender. ]
2. Assignee: ______________________________
[and is [a Lender] [an Affiliate/Approved Fund of [identify Lender] ]]
13
3. Borrower: Albemarle Corporation
12
Select as applicable.
13
Select as applicable.
4. Administrative Agent: JPMorgan Chase Bank, N.A., as the Administrative Agent under the Credit Agreement
5. Credit Agreement: Syndicated Facility Agreement, dated as of August 14, 2019 (as amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the “Credit Agreement”), among Albemarle Corporation, the Lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as Administrative
Agent.
6. Assigned Interest:
Aggregate Amount of
Commitments/Loans of all Lenders
Amount of Commitment/Loans
Assigned
14
Percentage Assigned of Commitments/
Loans
15
CUSIP Number
$[ ]
$[ ]
$[ ]
$[ ]
%
%
[7. Trade Date: __________________]
16
Effective Date: __________________, 20__
[TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER
IN THE REGISTER THEREFOR.]
14
Must comply with Section 11.07 of the Credit Agreement.
15
Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders thereunder.
16
To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date.
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
by
Name:
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
by
Name:
Title:
[Consented to and] Accepted:
JPMORGAN CHASE BANK, N.A., as Administrative Agent
17
by
Name:
Title:
[Consented to:]
ALBEMARLE CORPORATION
18
by
Name:
Title:
17
To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement.
18
To be added only if the consent of the Borrower is required by the terms of the Credit Agreement.
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
ANNEX 1 TO
ASSIGNMENT AND ASSUMPTION
1.
Representations and Warranties.
1.1
Assignor. The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim, (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated hereby and (iv) it is [not] a Defaulting Lender; and (b) assumes no responsibility with
respect to (i) any statements, representations or warranties made in or in connection with the Credit Agreement or any other Loan Document, other than the
representations and warranties made by it herein, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents, (iii) the
financial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.
1.2
Assignee. The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all
requirements of an assignee under Sections 11.07(b)(iii) and 11.07(b)(v) of the Credit Agreement (subject to such consents, if any, as may be required under Section
11.07(b)(iii) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to
the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type
represented by the Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire the Assigned Interest, is experienced in acquiring
assets of such type, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 7.01 of
the Credit Agreement and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent, any Arranger or any other Lender or any
of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest and (vii) attached hereto is any documentation required to be delivered by it pursuant to the terms of
the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance upon the Administrative Agent, the
Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.
Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for
amounts which have accrued from and after the Effective Date.
2.
3.
General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by fax or electronic transmission (in .pdf or .tif format) shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of
the State of New York.
SUBSIDIARIES OF ALBEMARLE CORPORATION
Exhibit 21.1
NAME
ACI Cyprus, L.L.C.
Albemarle Argentina S.R.L.
Albemarle Brazil Holdings Ltda.
Albemarle Care Fund
Albemarle Catalysts Company B.V.
Albemarle Chemical Canada Ltd.
Albemarle Chemicals (Shanghai) Co., Ltd.
Albemarle Chemicals Ltd
Albemarle Chemicals Private Limited
Albemarle Chemicals SAS
Albemarle Chemicals South Africa (Proprietary) Limited
Albemarle de Venezuela C.A.
Albemarle Delaware Holdings 1 LLC
Albemarle Delaware Holdings 2 LLC
Albemarle Dutch Holdings B.V.
Albemarle Dutch Holdings 2 B.V.
Albemarle Europe SRL
Albemarle Finance Company B.V.
Albemarle Foundation
Albemarle Germany GmbH
Albemarle Hilfe GmbH Unterstützungskasse
Albemarle Holdings Company Limited
Albemarle Holdings Limited
Albemarle Hungary Ltd.
Albemarle Italy S.R.L.
Albemarle Japan Corporation
Albemarle Japan Holdings B.V.
Albemarle Knight Lux 1 Holdings Corporation
Albemarle Korea Corporation
Albemarle Limitada
Albemarle Lithium Holding Corporation
Albemarle Lithium Holding GmbH
Albemarle Lithium (Jiangsu) Co., Ltd.
Albemarle Lithium Pty Ltd
Albemarle Lithium UK Limited
Albemarle Malaysia Sdn Bhd.
Albemarle Management (Shanghai) Co., Ltd.
Albemarle Middle East FZE
Albemarle Netherlands B.V.
Albemarle New Holding GmbH
Albemarle Overseas Employment Corporation
Albemarle Qúimica Ltda.
Albemarle Saudi Trading Company
Albemarle Sichuan New Materials Co., Ltd.
PLACE OF FORMATION
Delaware
Argentina
Brazil
Virginia
Netherlands
Canada
China
Cyprus
India
France
South Africa
Venezuela
Delaware
Delaware
Netherlands
Netherlands
Belgium
Netherlands
Virginia
Germany
Germany
Turks & Caicos
Hong Kong
Hungary
Italy
Japan
Netherlands
Delaware
Korea
Chile
Delaware
Germany
China
Australia
United Kingdom
Malaysia
China
United Arab Emirates
Netherlands
Germany
Virginia
Brazil
Saudi Arabia
China
NAME
Albemarle Singapore Pte. Ltd.
Albemarle Spain S.L.
Albemarle (Thailand) Co., Ltd.
Albemarle Taiwan Limited
Albemarle U.S., Inc.
Albemarle Vietnam Limited Liability Company
Albemarle Wodgina Pty Ltd
Dynamit Nobel GmbH
Dynamit Nobel Unterstützungsfonds GmbH
Excalibur Realty Company
Excalibur II Realty Company
Foote Chile Holding Company
Foote Minera e Inversiones Limitada
Jiangxi Albemarle Lithium Co., Ltd.
Jordan Bromine Company Ltd.
Knight Lux 1 S.à r.l.
Knight Lux 2 S.à r.l.
MARBL Lithium Operations Pty Ltd
Metalon Environmental Management & Solutions GmbH
PT Albemarle Chemicals Indonesia
Rockwood Holdings, Inc.
Rockwood Lithium India Private Limited
Rockwood Lithium Japan K.K.
Rockwood Lithium Korea LLC
Rockwood Lithium (Shanghai) Co., Ltd.
Rockwood Lithium Taiwan Co., Ltd.
Rockwood Specialties GmbH
Rockwood Specialties Group, LLC
Rockwood Specialties LLC
Rockwood Specialties Limited
RT Lithium Limited
RSG Immobilien GmbH
Sales de Magnesio Limitada
Shandong Sinobrom Albemarle Bromine Chemicals Company Limited
Sichuan Guorun New Material Co., Ltd.
PLACE OF FORMATION
Singapore
Spain
Thailand
Taiwan
Delaware
Vietnam
Australia
Germany
Germany
Delaware
Delaware
Delaware
Chile
China
Jordan
Luxembourg
Luxembourg
Australia
Germany
Indonesia
Delaware
India
Japan
Republic of Korea
China
Taiwan
Germany
Delaware
Delaware
United Kingdom
United Kingdom
Germany
Chile
China
China
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-234547) and Form S-8 (Nos. 333-150694, 333-166828, 333-188599 and 333-223167) of
Albemarle Corporation of our report dated February 18, 2022 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Exhibit 23.1
/s/ PricewaterhouseCoopers LLP
Charlotte, North Carolina
February 18, 2022
Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
I, J. Kent Masters, certify that:
1.
I have reviewed this Annual Report on Form 10-K of Albemarle Corporation for the period ended December 31, 2021;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal
quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of
the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date:
February 18, 2022
/s/ J. KENT MASTERS
J. Kent Masters
Chairman, President and Chief Executive Officer
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, Scott A. Tozier, certify that:
1.
I have reviewed this Annual Report on Form 10-K of Albemarle Corporation for the period ended December 31, 2021;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and
internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to
the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal
quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of
the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s
ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date:
February 18, 2022
/s/ SCOTT A. TOZIER
Scott A. Tozier
Executive Vice President and Chief Financial Officer
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.1
In connection with the Annual Report on Form 10-K of Albemarle Corporation (the “Company”) for the period ended December 31, 2021 as filed with the Securities and Exchange Commission on
the date hereof (the “Report”), I, J. Kent Masters, principal executive officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/S/ J. KENT MASTERS
J. Kent Masters
Chairman, President and Chief Executive Officer
February 18, 2022
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Exhibit 32.2
In connection with the Annual Report on Form 10-K of Albemarle Corporation (the “Company”) for the period ended December 31, 2021 as filed with the Securities and Exchange Commission on
the date hereof (the “Report”), I, Scott A. Tozier, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ SCOTT A. TOZIER
Scott A. Tozier
Executive Vice President and Chief Financial Officer
February 18, 2022