Exhibit 10.1
DATE: 3rd August, 1999
POLAROID (U.K.) LIMITED
as borrower
POLAROID CORPORATION
as guarantor
THE LENDERS listed in Schedule 1
DEUTSCHE BANK SECURITIES INC. and ABN AMRO BANK N.V.
as Co-arrangers
DEUTSCHE BANK AG, AMSTERDAM
as agent
ABN AMRO BANK N.V.
as documentation agent
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Euros 72,500,000 Multi-currency Revolving Loan Facility
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▇▇▇▇▇▇▇▇▇ and May
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
RS/HZM
CONTENTS
Clause Page
------ ----
PART I : INTERPRETATION 2
1. Interpretation and calculations 2
PART II : THE FACILITY 13
2. The Facility 13
3. The Lenders 13
4. Fees and Expenses 15
5. Cancellation 16
PART III : DRAWING, INTEREST AND REPAYMENT 17
6. Advance of Funds 17
7. Currency Option 19
8. Interest 20
9. Repayment 20
10. Prepayment 21
PART IV: CHANGES OF CIRCUMSTANCES AND PAYMENTS 22
11. Changes of Circumstances 22
12. Payments 27
13. Late Payment 29
14. Sharing among Lenders 29
PART V: THE GUARANTEE 31
15. Guarantee 31
16. Guarantor's Indemnity 33
PART VI: REPRESENTATIONS, COVENANTS AND TERMINATION EVENTS 34
17. Representations 34
18. Delivery of Information 37
19. General Covenants 38
20. Termination Events 39
PART VII: MISCELLANEOUS 42
21. The Agent and the ▇▇-▇▇▇▇▇▇▇▇▇ ▇▇
▇▇. Evidence, certificates and determinations 47
23. Notices 47
24. Assignment and Novation 48
25. Waivers and Amendments 50
26. Miscellaneous 50
27. Law and Jurisdiction 53
SCHEDULE 1 : LENDERS AND COMMITMENTS 54
SCHEDULE 2 : CONDITIONS PRECEDENT 55
SCHEDULE 3 : FORM OF NOTICE FOR AN ADVANCE 58
SCHEDULE 4: FORM OF SUBSTITUTION CERTIFICATE 59
SCHEDULE 5: PRICING SCHEDULE 61
SCHEDULE 6: FORM OF ADDITIONAL LENDER ACCESSION AGREEMENT 63
LOAN AGREEMENT
DATE: 3rd August, 1999
PARTIES
1. POLAROID (U.K.) LIMITED, a company incorporated in England (number
00732757), of ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, as borrower
2. POLAROID CORPORATION, a company incorporated in the United States of
America, of ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇, as guarantor
3. THE LENDERS listed in Schedule 1, as lenders
4. DEUTSCHE BANK SECURITIES INC. and ABN AMRO BANK N.V., as co-arrangers
5. DEUTSCHE BANK AG, AMSTERDAM, as agent
6. ABN AMRO BANK N.V., as documentation agent
BACKGROUND
At the request of the Borrower the Lenders are willing to provide a
euros 72,500,000 multi-currency revolving loan facility to the Borrower
on the terms of this Agreement. The facility is to be guaranteed by the
Guarantor and secured by the Charges.
The parties agree as follows:
2
PART I : INTERPRETATION
1. INTERPRETATION AND CALCULATIONS
1.1 DEFINITIONS
In this Agreement:
"Additional Guarantee" has the meaning set out in Clause 26.3(C)
"Additional Lender" has the meaning set out in Clause 3.4.
"Additional Lender Accession Agreement" means an agreement
substantially in the form set out in Schedule 6.
"Advance" means an advance made, or to be made, under Clause 6.
"Advance Date" means the date, or proposed date, of an Advance.
"Affiliate", in relation to a person, means a Subsidiary of that
person, a Holding Company of that person or another Subsidiary of that
Holding Company.
"Agent" means Deutsche Bank AG, Amsterdam, in its capacity as agent for
the Lenders hereunder (and in its capacity as trustee or in any other
capacity under the Charges), acting through its office at ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇, ▇▇▇▇ CA Amsterdam or any other office which it may notify to the
Borrower and the Lenders. If there is a change of Agent in accordance
with Clause 21.12, "Agent" will instead mean the new Agent appointed
under that Clause.
"Applicable Margin" means a rate per annum determined for each day in
accordance with Schedule 5.
"Assignment of German Receivables" means the security assignment
agreement dated on or around the date of this Agreement and entered
into by Polaroid GmbH in favour of Deutsche Bank AG, Amsterdam as agent
and trustee of the lenders in relation to certain receivables owed to
Polaroid GmbH by third party purchasers.
"Authorised Person" means a person authorised to sign documents on
behalf of the Borrower or, as the case may be, the Guarantor, under
this Agreement. This authority must be given by a resolution of the
directors of the Borrower or, as the case may be, a resolution of the
directors or a committee of the directors of the Guarantor, and a
certified copy must be delivered to the Agent. A person will cease to
be an "Authorised Person" upon notice by the Borrower or, as the case
may be, the Guarantor, to the Agent.
"Available Commitment" means the amount of a Lender's Commitment which
is available to the Borrower. On any day it is the Lender's Commitment
on that day less that Lender's participation in all outstanding
Advances. Participations in Advances in an Optional Currency will be
taken at their Original Euro Amount.
"Available Facility" means the aggregate amount which is available to
the Borrower under the Facility. On any day it is the Total Commitments
on that day less the Loan.
"Beneficiaries" means each of the Lenders, the Agent and the
Co-arrangers.
"Borrowed Monies Indebtedness" of any person means at any date, without
duplication:
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(A) all obligations of such person for borrowed money;
(B) all obligation of such person evidenced by bonds, debentures,
notes or other similar instruments;
(C) all obligations of such person to pay the deferred purchase
price of property or services, except trade accounts payable
arising in the ordinary course of business;
(D) all obligations of such person as lessee which are capitalised
in accordance with Generally Accepted Accounting Principles;
(E) all non-contingent obligations of such person to reimburse or
repay any bank or other person in respect of amounts paid
under a letter of credit, banker's acceptance or similar
instrument (excluding any such obligations which do not arise
from a repayment of Borrowed Monies Indebtedness and are
repaid within three Business Days after the date incurred);
(F) all Borrowed Monies Indebtedness of others secured on any
asset of such person, whether or not such Borrowed Monies
Indebtedness is assumed by such person (but excluding any such
Borrowed Monies Indebtedness in excess of the book value of
such asset, unless such Borrowed Monies Indebtedness is
assumed by such person); and
(G) all guarantees by such person of Borrowed Monies Indebtedness
of another person (each such guarantee to constitute Borrowed
Monies Indebtedness in any amount equal to the amount of such
other person's Borrowed Monies Indebtedness guaranteed
thereby).
For the purpose of this definition, "guarantee" means any obligation,
contingent or otherwise, of such person directly or indirectly
guaranteeing any Borrowed Monies Indebtedness of any other person and
including any obligation, direct or indirect, contingent or otherwise,
of such person (i) to purchase or pay (or advance or supply funds for
the purpose of payment of) that Borrowed Monies Indebtedness (whether
arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or
otherwise) or (ii) entered into for the purpose of assuring in any
other manner the obligee of that Borrowed Monies Indebtedness of the
payment thereof or to protect that obligee against loss in respect
thereof (in whole or in part). However, the term "guarantee" shall not
include endorsements for collection or deposit in the ordinary course
of business.
"Borrower" means Polaroid (U.K.) Limited, the first party to this
Agreement.
"Borrower's Group" means the Borrower and its Subsidiaries.
"Borrowing Base Amount" has the meaning set out in Clause 6.2((A)).
"Business Day" means a day on which banks are open for international
inter-bank payments in both London and Amsterdam. Where "Business Day"
is used in the context of:
(A) a payment in euros, this must also be a day on which TARGET is
open; and
(B) a non-euro payment, banks must also be open for international
inter-bank payments in the principal financial centre of the
4
currency of that payment. For the purpose of this Agreement,
the principal financial centre for sterling and euros is
Paris.
"Charges" means:
(A) the Floating Charge;
(B) the Pledge of Inventory;
(C) the Pledge of Inter-company Receivables;
(D) the Pledge of Polaroid Nederland Receivables;
(E) when executed, the Pledge of Polaroid Trading Receivables;
(F) the Assignment of German Receivables;
(G) the Massachusetts Security Agreement;
(H) any other document executed in accordance with the terms of a
"Charge" or this Agreement and expressed to be, or to be
supplemental to, a Charge.
"Co-arrangers" means each of Deutsche Bank Securities Inc. and ABN AMRO
BANK N.V., in their capacities as arrangers of the Facility.
"Commitment" means the amount which a Lender has committed to the
Facility. Each Lender's initial "Commitment" is set out next to its
name in Schedule 1 (or any replacement of Schedule 1 which takes effect
in accordance with Clause 3.4). This may be reduced in accordance with
this Agreement. In addition, the amount of a Lender's "Commitment" may
be adjusted by novation in accordance with Clause 24.
"Documentation Agent" means ABN AMRO BANK N.V. in its capacity as
documentation agent for the Lenders.
"Double Taxation Treaty" means any convention between the government of
the United Kingdom and any other government for the avoidance of double
taxation and the prevention of fiscal evasion with respect to taxes on
income and capital gains.
"Double Taxation Treaty Lender" means a person who is resident (as such
term is defined in the appropriate Double Taxation Treaty) in a country
with which the United Kingdom has an appropriate Double Taxation Treaty
giving residents of that country full exemption from United Kingdom
taxation on interest and who does not carry on business in the United
Kingdom through a permanent establishment with which the indebtedness
under this Agreement in respect of which the interest is paid is
effectively connected and in respect of whom the Borrower has received
a direction (other than of a provisional nature) which is in full force
and effect from the United Kingdom Inland Revenue that all such
payments to or for the account of such person may be made without
deduction or withholding for or on account of taxation in the United
Kingdom.
"EMU legislation" means the legislative measures of the Council of the
European Union providing for the introduction of, changeover to, or
operation of, the euro.
"Equivalent Amount" means the amount in an Optional Currency equivalent
to a specified amount in euros. The "Equivalent Amount"
5
will be calculated using the Exchange Rate applicable on the date on
which the amount in the Optional Currency is to be or was advanced.
"EURIBOR" means a rate per annum determined by the Agent and notified
to the Borrower. This rate will be applied to an outstanding amount in
euros for a particular period. It will be determined as follows:
(A) "EURIBOR" will be the Screen Rate for deposits in euro for
that period. This rate will be determined at or about 11.00
a.m. (Amsterdam time) on the Rate Fixing Date relating to the
first day of that period.
(B) If there is no Screen Rate for euro for that period, "EURIBOR"
will be calculated using the rate at which deposits in euro
are offered to the Reference Banks for that period by leading
banks in the European inter-bank market. Each Reference Bank
will notify the Agent of this rate when requested by the
Agent. The rate notified will be the rate as at 11.00 a.m.
(Amsterdam time) on the Rate Fixing Date relating to the first
day of that period. The Agent will calculate the arithmetic
mean of these rates, rounded upwards to five decimal places.
This will be "EURIBOR" for the period. If fewer than two
Reference Banks provide the Agent with notifications for a
particular period, this method of determining "EURIBOR" will
not be used for that period and Clause 11.3 will apply
instead.
"euro" or "E" means the single currency of the participating member
states in the Third Stage.
"European Subsidiary" means:
(A) the Borrower;
(B) Polaroid Nederland B.V.;
(C) with effect from the date of execution by it of the Pledge of
Polaroid Trading Receivables, Polaroid Trading B.V.;
(D) Polaroid GmbH;
(E) Polaroid (France) S.A.;
(F) Polaroid (Italia) S.p.A.;
(G) Polaroid Espana S.A.;
(H) Polaroid Gesellschaft m.b.h.;
(I) Polaroid (Belgium) S.A.;
(J) Polaroid A/S;
(K) Polaroid (Norge) A/S;
(L) Polaroid Aktiebolag;
(M) Polaroid AG; and
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(N) any other of the Guarantor's Consolidated Subsidiaries located
in Europe to whom the Borrower sells products under the terms
of a commissionaire agreement or arrangement,
and any successor in title to any of these entities.
"Exchange Rate" means a rate of exchange for converting an amount in
euros into an amount in an Optional Currency or vice versa. The
"Exchange Rate" applicable on any date will be the mean of the Agent's
spot buying and selling rates for the exchange of these currencies at
or around 11.00 a.m. on the third Business Day before that date.
"Facility" means the loan facility provided by this Agreement.
"Facility Fee Rate" means a rate per annum determined for each day in
accordance with Schedule 5.
"Finance Document" means each of this Agreement, each Charge and each
Additional Guarantee.
"Floating Charge" means the deed dated on or around the date of this
Agreement creating a floating charge over certain inventory and a
charge over certain receivables of the Borrower as specified by its
terms.
"Generally Accepted Accounting Principles" means:
(A) in relation to the Borrower and (taken together with it) its
Subsidiaries, accounting principles generally accepted and
adopted in the United Kingdom; or
(B) in relation to the Guarantor and (taken together with it) the
Guarantor's Consolidated Subsidiaries, accounting principles
generally accepted and adopted in the United States.
"Guarantee" means the guarantee of amounts due under this Agreement
contained in Clause 15 and the indemnity in Clause 16.
"Guarantor" means Polaroid Corporation, the second party to this
Agreement.
"Guarantor's Consolidated Subsidiaries" means any corporation or other
entity (except an Unconsolidated Joint Venture) of which securities or
other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by the
Guarantor.
"Guarantor's Group" means the Guarantor and the Guarantor's
Consolidated Subsidiaries.
"Guarantor's Revolving Credit Agreement" means the $350,000,000 credit
agreement entered into between the Guarantor, ▇▇▇▇▇▇ Guaranty Trust
Company of New York, Bank Boston, N.A., ▇.▇. ▇▇▇▇▇▇ Securities Inc. and
the lenders listed therein on 19th March, 1997 and as amended on 11th
December, 1998 and as may be further amended from time to time.
"Holding Company" has the meaning described in section 736 of the
Companies ▇▇▇ ▇▇▇▇.
7
"Instructing Group" means:
(A) at any time when Deutsche Bank AG and ABN AMRO BANK N.V. are
the only Lenders, both Deutsche Bank AG and ABN AMRO BANK N.V.
(except for the purpose of Clause 20.2, where an "Instructing
Group" may comprise either Deutsche Bank AG or ABN AMRO BANK
N.V. acting alone or both acting together); or
(B) at any other time, Lenders whose Commitments in aggregate
exceed 60% of the Total Commitments. If, however, an Advance
has been made and not repaid, "Instructing Group" means
Lenders whose participations in the Loan in aggregate exceed
60% of the Loan. The amount of participations in Advances in
an Optional Currency will be taken at their Original Euro
Amount.
"Inventory" means, at the relevant time, all inventory (including all
raw materials, work in progress, stock in trade (to the extent these
are movable property), proceeds of sale, insurance, warranty claims,
contractual and other such rights in relation to such items of the
Borrower and Polaroid Contracting C.V.
"Lender" means a lender listed in Schedule 1 (or any replacement of
Schedule 1 which takes effect in accordance with Clause 3.4) acting
through the office appearing under its name on the signature pages or
any other office which it may notify to the Agent. A lender which
acquires an interest in this Facility by way of assignment or novation
will become a "Lender" and will act through its office notified to the
Agent. The expression also includes a successor in title to a Lender. A
Lender will cease to be a "Lender" if it novates its entire interest in
this Facility.
"Lender Group Company" means a Lender or any Holding Company of a
Lender.
"LIBOR" means a rate per annum determined by the Agent and notified to
the Borrower. This rate will be applied to an outstanding amount for a
particular period. It will be determined as follows:
(A) "LIBOR" will be the Screen Rate for deposits in the relevant
currency for that period. This rate will be determined at or
about 11.00 a.m. (London time) on the Rate Fixing Date
relating to the first day of the period. If, however, the
amount is in sterling, the rate will instead be determined in
accordance with paragraph (B) below.
(B) If either:
(i) there is no Screen Rate for deposits in the relevant
currency for the necessary period; or
(ii) the amount is an amount in sterling,
"LIBOR" will be based on the rates at which deposits in the
currency of that amount are offered by the Reference Banks for
that period to prime banks in the London inter-bank market or,
in the case of an amount in sterling, the Paris inter-bank
market. Each Reference Bank will notify the Agent of the rate
offered by it when requested by the Agent. This rate will be
determined at or about 11.00 a.m. (London time) on the Rate
Fixing Date relating to the first day of the period. If,
however, the amount is in sterling, the rate will be
8
determined at or about 11.00 a.m. (Paris time) on the Rate
Fixing Date relating to the first day of the period. The Agent
will calculate the arithmetic mean of the rates quoted by the
Reference Banks rounded upwards to five decimal places. This
will be "LIBOR" for the period. If fewer than two Reference
Banks provide the Agent with quotations for a particular
period, this method of determining "LIBOR" will not be used
for that period and Clause 11.3 applies.
"Loan" means the principal amount borrowed and not repaid under the
Facility.
"London Business Day" means a day on which banks in London are open for
dealing in inter-bank deposits.
"Massachusetts Security Agreement" means the security agreement dated
on or around the date of this Agreement and made by the Borrower in
favour of Deutsche Bank AG, Amsterdam as agent and trustee for the
Lenders in relation to certain inventory located in the Commonwealth of
Massachusetts.
"Material Adverse Effect" means:
(A) any material adverse effect on the business, financial
position or results of operations of the Guarantor's Group,
considered as a whole;
(B) any material adverse effect on the validity, binding effect or
enforceability of any Finance Document; or
(C) any material adverse effect on the validity, perfection or
priority of any Security created or purportedly created under
the Charges.
"Maturity Date" means 31st December, 2001 or, if earlier, the date the
Facility is cancelled in full.
"Optional Currency" means a currency:
(A) which is freely transferable;
(B) which is freely convertible into euros;
(C) deposits of which are readily available and freely dealt in on
the London inter-bank market or, in the case of sterling,
Paris inter-bank market; and
(D) which is not euros nor domestic sterling.
"Original Euro Amount" means the euro equivalent of an amount in an
Optional Currency. The "Original Euro Amount" will be calculated using
the Exchange Rate applicable on the date on which the amount in the
Optional Currency was advanced.
"Paris Business Day" means a day on which banks in Paris are open for
dealing in inter-bank deposits.
"Permitted Reorganisation" means any solvent reconstruction,
amalgamation or reorganisation of the Guarantor, the Borrower or any
Subsidiary of the Borrower which will not have, or is (in the opinion
of the Borrower acting reasonably) unlikely to have, a Material Adverse
Effect.
9
"Pledge of Inter-company Receivables" means the pledge of receivables
dated on or around the date of this Agreement and made by the Borrower
in favour of Deutsche Bank AG, Amsterdam in relation to certain
inter-company receivables.
"Pledge of Inventory" means the pledge of inventory dated on or around
the date of this Agreement and made by Polaroid Contracting C.V. and
each of PRD Management Limited and PRD Overseas Limited in favour of
Deutsche Bank AG, Amsterdam.
"Pledge of Polaroid Nederland Receivables" means the pledge of
receivables dated on or around the date of this Agreement and made by
Polaroid Nederland B.V. in favour of Deutsche Bank AG, Amsterdam in
relation to certain receivables owed to Polaroid Nederland B.V. by
third party purchasers.
"Pledge of Polaroid Trading Receivables" means the pledge of
receivables dated after the date of this Agreement and made by Polaroid
Trading B.V. in favour of Deutsche Bank AG, Amsterdam in relation to
certain receivables owed to Polaroid Trading B.V. by third party
purchasers.
"Potential Termination Event" means an event or state of affairs which
is mentioned in Clause 20.1 but which has not become a Termination
Event because a period has not elapsed, a notice has not been given or
a determination has not been made.
"Principal Obligations" means all monies which now or at any time
hereafter may be or become due, owing or incurred by the Borrower
and/or the Guarantor to any of the Beneficiaries from time to time,
whether due and payable or not, whether contingent or not and whether
alone or jointly with others, as principal, guarantor, surety or
otherwise and in whatever name or style, under, in connection with or
pursuant to any and all of the Finance Documents and/or the
transactions contemplated thereby.
"Qualifying Bank" means:
(A) a UK Bank; or
(B) a Double Taxation Treaty Lender.
"Rate Fixing Date" means the day on which quotes are customarily taken
for the relevant period:
(A) in the case of EURIBOR, for deposits in euros in the European
inter-bank market; or
(B) in the case of LIBOR, for deposits in the currency of the
amount concerned in the London inter-bank market or, in the
case of an amount in sterling, for deposits in sterling in the
Paris inter-bank market;
in either case for delivery on the Advance Date (which, in relation to
euro, means a day on which TARGET is open).
"Receivables" means, at the relevant time, all receivables (including
all book and other debts and calculated as to avoid double counting)
owing to any European Subsidiary in relation to the sale of Polaroid
branded and other authorised products by those European Subsidiaries
(whether or not such Polaroid branded and other authorised products
have been supplied under the terms of a commissionaire agreement or a
transitional commissionaire agreement or otherwise).
10
"Reference Banks" means, initially, the principal London offices of
Deutsche Bank AG and ABN AMRO BANK N.V.. If there are more than two
Lenders at any time, the Agent may, with the agreement of the Borrower
select up to two additional Reference Banks. The Agent, following
consultation with the Borrower and the Lenders, may replace a
"Reference Bank" with anothe Lender or an Affiliate of a Lender. This
replacement will take effect when notice is delivered to the Borrower
and the Lenders.
"Relevant Polaroid Subsidiary" means each of Polaroid Nederland B.V.,
PRD Management Limited, PRD Overseas Limited, Polaroid GmbH and, with
effect from the date of execution by it of the Pledge of Polaroid
Trading Receivables, Polaroid Trading B.V.
"Screen Rate" means the rate shown on:
(A) in the case of EURIBOR, Reuters page EURIBOR; or
(B) in the case of LIBOR, Reuters page LIBOR01.
If either of these pages is replaced by another which displays the
rates for inter-bank deposits offered by leading banks in Europe (in
the case of EURIBOR) or London (in the case of LIBOR) the Agent may
nominate an alternative page for the affected page.
"Security" means security of any type created or existing over any
asset. "Security" will also include retention of title arrangements,
rights to retain possession and any arrangement providing a creditor
with a prior right to an asset, or its proceeds of sale, over other
creditors in a liquidation.
"Subsidiary" has the meaning described in section 736 of the Companies
▇▇▇ ▇▇▇▇.
"Substitution Certificate" means a document substantially in the form
set out in Schedule 4.
"TARGET" means the Trans-european Automated Real time Gross settlement
Express Transfer system.
"Term" means the period for which an Advance is to be outstanding.
Subject to Clause 6.7:
(A) if the last day of this period is not a Business Day that
"Term" will instead end on the next Business Day, unless that
day is in another calendar month; and
(B) where it is in another calendar month the last day of that
"Term" will be the previous Business Day.
"Termination Event" has the meaning described in Clause 20.1.
"Third Stage" means the third stage of European economic and monetary
union pursuant to the Treaty establishing the European Community (as
amended from time to time).
"Total Commitments" means the aggregate of the Commitments of all the
Lenders.
"UK Bank" means a bank for the purposes of section 349 of the Income
and Corporation Taxes Act 1988 which is beneficially entitled to and
11
within the charge to United Kingdom corporation tax as respects payment
of interest payable to it under this Agreement.
"Unconsolidated Joint Venture" means at any time any person in which
the Guarantor or one or more of the Guarantor's Consolidated
Subsidiaries has an equity investment which, if material, would be
accounted for under the equity accounting method in the financial
statements of the Guarantor and the Guarantor's Consolidated
Subsidiaries, if such statements were prepared as of that time.
1.2 INTERPRETATION OF CERTAIN REFERENCES
Unless a contrary intention is indicated:
(A) References to Clauses and Schedules are to Clauses of, and the
Schedules to, this Agreement. References to paragraphs are to
paragraphs in the same sub-clause. References to
sub-paragraphs are to sub-paragraphs in the same paragraph.
(B) References to other documents include those documents as they
may be amended.
(C) References to times are to Amsterdam time.
(D) References to assets are to present and future assets and
include revenues.
(E) References to fees or expenses include any value added tax on
those fees or expenses.
(F) References to "sterling" are to UK pounds sterling and
references to "US$" are to United States dollars.
1.3 HEADINGS
All headings and titles are inserted for convenience only. They are to
be ignored in the interpretation of this Agreement.
1.4 CALCULATIONS
Interest and facility fee will be calculated using the following
formula:
I = D x R x A
--
Y
where:
I = interest or facility fee accrued
D = the number of days in the period for which the interest or
facility fee is to be calculated, including the first day but
excluding the last day
R = the rate of interest or facility fee, expressed as a fraction
A = the amount on which interest or facility fee is being
calculated
Y = 360. For some Optional Currencies the market practice in the
London inter-bank market is to calculate interest in that
currency on a 365-day year basis. In the case of an amount in
these currencies, Y will instead equal 365. In the case of an
amount in sterling, Y will also equal 365.
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Interest and facility fee will be treated as accruing uniformly over
each period on a daily basis. In some cases "R" or "A" may change
during a period for which interest or facility fee is to be calculated.
In this case the interest or facility fee will be calculated for
successive periods and then aggregated. These successive periods will
be the periods during which "R" and "A" were constant.
1.5 REIMBURSEMENTS
If a party wishes to claim reimbursement of any amount to which it is
entitled it will deliver a demand to the reimbursing party. This will
set out the losses, expenses or other amounts to be reimbursed. It must
also specify the currency of reimbursement. The reimbursing party
agrees to pay those amounts to the party entitled to them no later than
ten Business Days after the delivery of the certificate to the
reimbursing party. However, where the reimbursing party is the Borrower
or the Guarantor and there is a Termination Event subsisting unremedied
and unwaived, the Borrower or, as the case may be the Guarantor, agrees
to pay those amounts to the party entitled to them on demand.
1.6 IMPACT OF THE INTRODUCTION AND OPERATION OF THE EURO
Market practice relating to the inter-bank deposit market, the method
and timing of rate fixing and the calculation of interest may change
during the Third Stage. As a result, it may differ from the method of
rate fixing and the calculation of interest prescribed under the terms
of this Agreement. In this event, the Agent will consult with the
Borrower and the Lenders in relation to the amendments to this
Agreement which are required or reasonably desirable to reflect and
conform to these changes. The amendments may provide for the use of
London or, as the case may be, Paris inter-bank market offered rates or
inter-bank market offered rates from a wider European market (or, in
either case, screen rates reflecting these offered rates). They may
also change, amongst other things, the rate fixing time, the definition
of "Business Day" and "Rate Fixing Date" and any elements of the
formula set out in Clause 1.4. No such amendments may be made without
first obtaining the Borrower's consent. The amendments will not apply
to interest which is computed by reference to any period starting
before the date the amendments take effect. This clause may, in
appropriate circumstances, be invoked more than once.
1.7 GUARANTOR'S REVOLVING CREDIT AGREEMENT
In the event that the Guarantor's Revolving Credit Agreement is
terminated or otherwise ceases to exist, all references in this
Agreement to provisions of the Guarantor's Revolving Credit Agreement
will be to the provisions of the Guarantor's Revolving Credit Agreement
in effect immediately before the Guarantor's Revolving Credit Agreement
is terminated or otherwise ceases to exist.
13
PART II : THE FACILITY
2. THE FACILITY
2.1 AMOUNT AND NATURE
The Facility is a euros 72,500,000 multi-currency revolving loan
facility expiring 31st December, 2001 under which Advances may be made
by the Lenders to the Borrower.
2.2 PURPOSE
The Borrower agrees to use the proceeds of the Facility for general
corporate purposes including refinancing existing facilities.
2.3 AVAILABILITY
The Borrower may borrow under the Facility after the Agent has received
all the items listed in Schedule 2 in a form satisfactory to it.
2.4 EXPIRY OF AVAILABILITY
Without prejudice to the other provisions of this Agreements the
Borrower will ensure that the Loan will not be outstanding after the
Maturity Date.
2.5 SECURITY
All amounts due under this Agreement will be secured by the Charges.
3. THE LENDERS
3.1 RIGHTS AND OBLIGATIONS
The rights and obligations of each Lender under the Finance Documents
are separate and independent from the rights and obligations of each
other Lender. A Lender may take proceedings against the Borrower or the
Guarantor on its own without joining any other Lender to those
proceedings. If any Lender takes legal proceedings in relation to the
Finance Documents it will promptly notify the other Lenders through the
Agent and the Agent will notify the other Lenders accordingly.
3.2 FAILURE TO PERFORM
If a Lender fails to perform its obligations the Borrower will have
rights solely against that Lender. The obligations of the Borrower and
the Guarantor to the Agent, the Co-arrangers and the other Lenders will
not be affected by this failure.
3.3 PARTICIPATIONS
The participation of a Lender in an Advance will be calculated using
the following formula:
C
P = --- x A
F
where:
P = the participation of that Lender in the Advance
C = the Available Commitment of that Lender on the Advance Date
14
F = the Available Facility on the Advance Date
A = the amount of the Advance.
For this purpose any amount due to be repaid on the Advance Date will
be treated as having been repaid. The Agent may round participations
upwards or downwards to the nearest unit of currency.
3.4 INCREASE IN TOTAL COMMITMENTS
(A) ADDITIONAL LENDER: The Borrower may give the Agent a notice
informing each Lender that it wants an additional bank or
financial institution (an "Additional Lender") to become a
Lender and that, accordingly, the amount of the Total
Commitments should be increased by the commitment (the "New
Commitment") of the Additional Lender. The Agent will promptly
supply a copy of this notice to each Lender.
(B) CONSENT: The Borrower (through the Agent) must obtain the
consent of all Lenders participating in the Facility
(immediately prior to the accession of the Additional Lender)
to the accession of that Additional Lender. This consent must
not be unreasonably withheld or delayed. If a Lender does not
reply to a request for consent within 15 Business Days of the
date on which the Borrower gives a notice to the Agent under
paragraph (A) it will be treated as having given its consent.
(C) CONSENT NOTIFICATION: Once the consent of each Lender is
obtained, or treated as obtained, the Agent must notify the
Borrower and the Guarantor of this.
(D) ACCESSION: Once the Agent has notified the Borrower and the
Guarantor that the consent of each Lender has been obtained,
or has been treated as obtained, the Additional Lender and the
Guarantor may deliver to the Agent an Additional Lender
Accession Agreement. This must be signed by the Additional
Lender and the Guarantor (and for this purpose the Guarantor
is authorised to sign the Additional Lender Accession
Agreement on behalf of the Borrower) and be properly completed
and include details of:
(i) the New Commitment of the Additional Lender;
(ii) a replacement of Schedule 1 to this Agreement showing
the Commitments of all Lenders including that of the
Additional Lender; and
(iii) the amendments to be made to the Loan Agreement to
reflect the increase in the Total Commitments by the
New Commitment of the Additional Lender.
(E) AGENT'S SIGNATURE: The Agent will sign the Additional Lender
Accession Agreement no later than five Business Days after its
receipt. This signature will be made on behalf of the other
Lenders as well as itself. Each Lender irrevocably authorises
the Agent to sign in this manner.
(F) EFFECTIVE DATE: The Additional Lender Accession Agreement will
take effect on the date it specifies in accordance with its
terms or, if later, upon its execution by the Agent.
(G) APPLICATION: This Clause 3.4 may be invoked by the Borrower on
more than one occasion.
15
4. FEES AND EXPENSES
4.1 AGENCY FEE
The Borrower agrees to pay an agency fee to the Agent. The amount of
this fee and the timing of payment are described in a letter from the
Agent to the Borrower dated the same date as this Agreement.
4.2 REIMBURSEMENT OF INITIAL EXPENSES
The Co-arrangers and the Agent have incurred and will incur expenses in
connection with the arrangement of the Facility. The Borrower agrees to
reimburse each of the Co-arrangers and the Agent for the reasonable
amount of these expenses together with any amounts in respect of the
Value Added Tax thereon. They include the legal fees incurred in the
negotiation, preparation and signature of the Finance Documents.
4.3 ARRANGEMENT FEE
The Borrower agrees to pay an arrangement fee to the Co-arrangers. The
amount of this fee and the timing of payment are described in a letter
from the Co-arrangers to the Borrower dated the same date as this
Agreement.
4.4 FACILITY FEE
A facility fee will accrue on the uncancelled amount of the Commitment
(whether drawn or undrawn) of each Lender. This fee will accrue from
the date of this Agreement until the Maturity Date at the Facility Fee
Rate. The Borrower agrees to pay the fee to the Agent for the account
of each Lender in arrear starting on 30th September, 1999 and at
quarterly intervals thereafter and on the Maturity Date.
4.5 DOCUMENTARY TAXES
This sub-clause applies if any registration fee, stamp duty or other
documentary tax is required to be paid on or in connection with a
Finance Document, any document referred to in or contemplated by a
Finance Document or any judgment obtained in connection with a Finance
Document. It also applies if a fee, duty or tax is payable in order for
any of these documents to be valid, binding and enforceable or for any
of them to be admitted as evidence in court. In these circumstances the
Borrower agrees to pay the fee, duty or tax together with any interest
or penalty for late payment. Alternatively, the Agent or a Lender may
make the payment. If it does so, the Borrower agrees to reimburse the
Agent or that Lender for the amount paid and the losses and expenses
(if reasonable) incurred as a result of the payment.
4.6 PROTECTION OF RIGHTS
A Co-arranger, the Agent or a Lender may incur expenses in protecting,
preserving or enforcing its rights under a Finance Document. The
Borrower agrees to reimburse that Co-arranger, or as the case may be,
the Agent or that Lender for the amount of these expenses to the extent
that they have been properly incurred.
16
5. CANCELLATION
5.1 VOLUNTARY CANCELLATION
The Borrower may cancel the whole or part of the Total Commitments by
giving notice to the Agent. This notice will take effect 5 Business
Days after it is received by the Agent unless a later date is specified
in the notice. In that case the notice will take effect on the
specified date. The Borrower may cancel only a part of the Total
Commitments which is a minimum amount of euros 1,000,000 and an
integral multiple of euros 500,000.
5.2 EFFECT OF CANCELLATION
The Borrower may not borrow any part of the Total Commitments which has
been cancelled or which is the subject of a notice of voluntary
cancellation. The Commitments of the Lenders will be reduced by an
aggregate amount equal to the reduction of the Total Commitments. Each
Lender's Commitment will be reduced in the same proportion.
17
PART III : DRAWING, INTEREST AND REPAYMENT
6. ADVANCE OF FUNDS
6.1 NOTICE TO THE AGENT
Whenever the Borrower wishes to borrow under the Facility it will
deliver a notice to the Agent. This notice must be substantially in the
form set out in Schedule 3. The notice must specify the currency of the
Advance (which shall be in euros or an Optional Currency), the amount
to be borrowed, the Term of the Advance and the date of the borrowing.
This date must be no sooner than three Business Days after the date the
Agent receives the notice. For this purpose if the Agent receives the
notice on a day which is not a Business Day or after 2.00 p.m. on a
Business Day, it will be treated as having received the notice on the
following Business Day.
6.2 LIMITATIONS ON ADVANCES
The following limitations apply to Advances:
(A) No Advance may exceed the uncancelled and undrawn amount of
the Facility. In addition, no Advance, when aggregated with
all other Advances scheduled to be outstanding on the relevant
Advance Date, may exceed an amount (the "Borrowing Base
Amount") which is the aggregate of:
(A) 45% of the total amount of Inventory; and
(B) 75% of the total amount of Receivables,
in each case, as shown in the quarterly balance provided under
paragraph 14 of Schedule 2 or, upon becoming available, in the
latest quarterly balance delivered to the Agent under Clause
18.1(f).
These limitations will be applied as at the Advance Date. For
this purpose:
(i) any part of the Total Commitments which is subject to
a notice of voluntary cancellation will be treated as
cancelled;
(ii) any amount due to be repaid on the Advance Date will
be treated as having been repaid;
(iii) if any other requests are outstanding for Advances to
be made on or before the proposed date of the
newly-requested Advance, all Advances to which those
requests relate will be deemed to be outstanding; and
(iv) Advances in Optional Currencies will be taken at their
Original Euro Amount.
The Agent and the Lenders will be entitled to rely on the
figures for the total amount of Inventory and Receivables
shown in the quarterly balance provided under paragraph 14 of
Schedule 2 or, upon becoming available, in the latest
quarterly balance delivered to the Agent under Clause 18.1(f).
(B) An Advance in euros must be a minimum of euros 500,000 and an
integral multiple of euros 250,000 or be the uncancelled and
18
undrawn amount of the Facility. An Advance in any Optional
Currency must be either:
(i) equal to or greater than the equivalent of euros
500,000 (converted at the Exchange Rate) and a round
amount in that currency agreed with the Agent; or
(ii) the Equivalent Amount of the uncancelled and undrawn
amount of the Facility.
(C) If the Advance is not to be in euros, Clause 7 applies.
(D) The Term of the Advance must be a period of 1, 2, 3, 6 or, if
all the Lenders consent, 12 months or any other period as the
Agent (on behalf of, and with the consent of, all the Lenders)
and the Borrower may agree in writing. The Borrower will be
treated as choosing a period of 3 months if it fails to select
a period.
(E) The Advance Date must be a Business Day falling at least one
month (or such shorter period as may be agreed by all the
Lenders) before the Maturity Date.
(F) The Term of the Advance must expire on or before the Maturity
Date.
6.3 NOTICE TO THE LENDERS
The Agent agrees to provide details of the notice of borrowing to each
Lender on the day three Business Days before an Advance Date. These
details will also include the amount of the Lender's participation in
the Advance.
6.4 CONDITIONS TO BORROWING
The Lenders will be obliged to make an Advance to the Borrower only if:
(A) the Facility is available in accordance with Clause 2;
(B) a properly completed and signed notice of borrowing has been
received by the Agent;
(C) the representations in Clause 17 are true on the Advance Date;
and
(D) there is no outstanding Termination Event or Potential
Termination Event on the Advance Date.
Clause 6.8 applies to sub-paragraphs (C) and (D).
6.5 OBLIGATION TO ADVANCE FUNDS
If the requirements of this Clause are satisfied each Lender agrees to
advance its participation in the Advance to the Borrower. The Advance
will be made on the date specified in the notice of borrowing.
6.6 CONSEQUENCES OF AN ADVANCE NOT BEING MADE
If a notice of borrowing is delivered but no Advance is made the
Lenders may incur losses and expenses as a result. The losses and
expenses may include those incurred in liquidating or otherwise
utilising amounts borrowed by the Lenders to fund the Advance. They may
also include losses and expenses
19
incurred in terminating commitments relating to the funding or incurred
in hedging open positions resulting from the Advance not being made.
The Borrower agrees to reimburse each Lender for the amount of these
losses and expenses. This sub-clause does not apply if the Advance is
not made solely by reason of a default of a Lender.
6.7 ADJUSTMENT OF THE TERM
The Term will end on the last Business Day of a calendar month if it is
for a number of complete months and either:
(A) it commenced on the last Business Day of a calendar month; or
(B) it commenced on a day for which there is no corresponding day
in the month in which it is due to end.
6.8 NEW ADVANCES
This sub-clause applies where an Advance Date is the last day of the
Term of an outstanding Advance (the "Old Advances") and where
Advance(s) are due to be advanced on that Advance Date (the "New
Advances"). If the aggregate amount of those New Advances (which, in
the case of a New Advance in an Optional Currency, will be its Original
Euro Amount) is less than or equal to the aggregate amount of the Old
Advances (which, in the case of an Old Advance in an Optional Currency,
will be its Original Euro Amount) the conditions in Clauses 6.4(C)
and 6.4(D) will not apply.
7. CURRENCY OPTION
7.1 REQUEST FOR OPTIONAL CURRENCY
This Clause applies if a notice of borrowing specifies a currency other
than euros. In this case the Advance requested will be made in the
currency specified if all the following are true:
(A) The currency specified is an Optional Currency.
(B) The Advance is required to be made under the terms of this
Agreement.
7.2 NON-AVAILABILITY OF OPTIONAL CURRENCY
A Lender (an "Affected Lender") may notify the Agent that it is unable
to make its participation in an Advance available in the specified
Optional Currency for the requested Term. If a Lender makes this
notification it will set out details of the reasons why it is unable to
make its participation available in this notice. Each of the following
applies if this notice is received by the Agent by 4.00 p.m. on the
third Business Day before the day the Advance is due to be made:
(A) The Affected Lender will not be obliged to make its
participation in the Advance available in the specified
Optional Currency. Instead the Affected Lender agrees to make
the participation available in euros.
(B) The amount the Affected Lender is required to advance will be
the Original Euro Amount of the participation it would
otherwise have been required to make available in the Optional
Currency.
(C) The Agent agrees to notify the Borrower and the other Lenders
of the receipt of the notice from the Affected Lender. This
20
notification will be made by noon on the third Business Day
before the day the Advance is due to be made.
7.3 IMPRACTICALITY OF DRAWING IN OPTIONAL CURRENCY
An Advance which was to have been made in an Optional Currency will not
be required to be made if all the following are true:
(A) An event described in Clause 7.4 occurs.
(B) The Agent notifies the Borrower of this event in writing
(giving reasons) and states that, as a result, the Advance
cannot be made in the Optional Currency.
(C) The notice from the Agent is received by the Borrower by 9.00
a.m. on the date the Advance is due to be made.
The Agent agrees to deliver a notice under this sub-clause if it is
instructed by an Instructing Group to do so. For the purposes of this
sub-clause an Advance will be treated as being made in an Optional
Currency even if part of it was due to be made in euros by virtue of
Clause 7.2.
7.4 EVENTS MAKING DRAWING IN OPTIONAL CURRENCY IMPRACTICAL
An event referred to in Clause 7.3 occurs if both:
(A) there are changes in national or international financial,
political or economic conditions or in currency exchange rates
or exchange controls; and
(B) these changes would, in the opinion of the Agent, make it
impracticable for the Advance to be denominated in the
Optional Currency in question.
8. INTEREST
8.1 ACCRUAL OF INTEREST
Interest will accrue on each Advance during its Term.
8.2 RATE OF INTEREST
The rate of interest applicable during the Term of an Advance will be:
(A) in respect of an Advance in euros, a rate per annum equal to
EURIBOR for that Advance for that Term plus the Applicable
Margin; or
(B) in respect of an Advance in a currency other than euros, a
rate per annum equal to LIBOR for the currency of that Advance
for that Term plus the Applicable Margin.
8.3 PAYMENT OF INTEREST
The Borrower agrees to pay interest accrued on each Advance in arrear
on the last day of its Term. Where the Term is longer than six months
the Borrower also agrees to pay interest on the day six months after
the start of the Term.
9. REPAYMENT
(A) The Borrower agrees to repay each Advance made to it on the
last day of its Term. The Borrower shall repay that Advance
21
in the currency in which it was made unless paragraph (B)
applies.
(B) Where on any date on which an Advance is to be repaid (the
"Old Advance") the Borrower borrows a further Advance (the
"New Advance") and the New Advance and the Old Advance are
both in euros or the same Optional Currency the Agent shall,
unless the Borrower requests otherwise, apply the New Advance
in or towards repayment of the Old Advance. This will be
treated as satisfying PRO TANTO the obligations of the
Borrower to repay the Old Advance and of the Lenders to make
the New Advance. To the extent that the amount of the New
Advance differs from the Old Advance the Lenders, or as the
case may be, the Borrower shall be obliged to advance, or, in
the case of the Borrower, repay the amount of such difference.
10. PREPAYMENT
10.1 OPTIONAL PREPAYMENT
The Borrower may give notice that it will repay the whole or part of
any Advance on any day prior to the last day of its Term. This notice
must state:
(A) the date of repayment, which will be at least five Business
Days after the notice is received by the Agent; and
(B) the amount to be repaid, which will be a minimum of euros
1,000,000 and an integral multiple of euros 500,000 or the
whole of that Advance (or, in each case, its equivalent, in
any Optional Currency).
The Borrower agrees to repay the whole or part of such Advance in
accordance with its notice. Clause 11.9 applies to any repayment under
this sub-clause.
10.2 NO OTHER PREPAYMENT
The Borrower may not repay the Loan early except in the manner
permitted or required by this Agreement.
22
PART IV : CHANGES OF CIRCUMSTANCES AND PAYMENTS
11. CHANGES OF CIRCUMSTANCES
11.1 ILLEGALITY
(A) NOTICE: Each Lender agrees to notify the Borrower if it
believes that Lender is or will be acting illegally in
relation to the Facility. The illegality may relate to the
performance of the Lender's obligations, the maintenance of
the Facility or the Lender's funding arrangements. Each Lender
confirms that it is not acting illegally in relation to the
Facility on the date of this Agreement.
(B) CANCELLATION AND PREPAYMENT: If a Lender delivers a notice of
illegality the Commitment of that Lender will be cancelled on
the date of that notice. The Borrower agrees to repay the
participation of that Lender in each Advance on the last day
of the Term of that Advance during which the notice is
received, unless that Lender certifies that, because of a
legal requirement applicable to that Lender, it must be repaid
earlier. In this event the Borrower agrees to repay the
participation on the earlier date (or dates) specified by the
Lender. Clause 11.9 applies to any cancellation or repayment
under this sub-clause.
11.2 INCREASED COSTS
(A) TYPES OF INCREASED COSTS: This sub-clause applies where all of
(i), (ii) and (iii) are true:
(i) Either:
(a) there is a change in a legal or other requirement
applicable to a Lender Group Company or a change
in its interpretation or application; or
(b) a Lender Group Company complies with a direction
or request of an authority with whose directions
or requests it is accustomed to comply.
(ii) As a result, any of the following occurs:
(a) a Lender Group Company incurs an expense;
(b) a Lender Group Company's effective return from
the Facility or on its overall capital is
reduced;
(c) any amount payable to a Lender Group Company is
reduced; or
(d) a Lender Group Company does not recover an amount
which would otherwise have been paid to it.
No account will be taken of tax on the overall net
income of a Lender, or a Lender Group Company, in the
country in which it is incorporated, has its principal
office or the office through which it is acting for
the purposes of this Agreement.
(iii) The losses, reductions and expenses arising as a
result are wholly or partly attributable to the
Facility or the
23
arrangements made by a Lender in connection with the
Facility.
(B) NOTICE: Without prejudice to the Borrower's obligations under
this Clause 11, each Lender agrees to notify the Borrower
through the Agent if it becomes aware that this sub-clause
applies. This notice will contain reasonable detail of the
circumstances which have caused this sub-clause to apply.
(C) PAYMENT OF ADDITIONAL AMOUNTS: The Borrower agrees to
reimburse each Lender for the losses, reductions, expenses and
unrecovered amounts described in paragraph (A)(ii) which are
attributable to the Facility. However, the Borrower will not
be obliged to reimburse a Lender to the extent that any amount
claimed by a Lender under this Clause 11.2 has accrued or
arisen more than six months before the date the Lender
notifies the Agent of its claim under Clause 11.1.
(D) PREPAYMENT: If a Lender delivers a notice under paragraph (B):
(i) the Borrower may deliver to that Lender a notice of
prepayment. The Borrower agrees to prepay the
participation of that Lender in the Loan five Business
Days after the Lender receives this notice (or on any
later date or dates specified in the notice). Clause
11.9 applies to this prepayment; and/or
(ii) the Borrower may deliver to that Lender a notice of
cancellation. That Lender's Commitment will be reduced
to zero on the date of delivery of that notice.
(E) BASLE EXCEPTION: Paragraph (C) will not oblige the Borrower
to compensate any Lender in respect of itself or any other
Lender Group Company for any losses, reductions and expenses
described in paragraph (A)(ii) which result from the
implementation, as at the date of this Agreement, of the
matters set out in the July 1988 report of the Basle Committee
on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital
Standards" (the "Basle Report"), the Directive of the Council
of the European Communities on a Solvency Ratio for Credit
Institutions (89/647/EEC of 18th December, 1989) (the
"Solvency Directive") or the Directive of the Council of the
European Communities on Own Funds of Credit Institutions
(89/299/EEC of 17th April, 1989) (the "Own Funds Directive")
in each case as amended prior to the date of this Agreement.
This exception will not apply if the losses, reductions and
expenses described in paragraph (A)(ii) result from any
change after the date of this Agreement in, or in the
interpretation or application of, the Basle Report, the
Solvency Directive or the Own Funds Directive.
11.3 MARKET DISRUPTION
(A) NATURE OF MARKET DISRUPTION: This sub-clause applies if any of
(i), (ii) or (iii) is true:
(i) Lenders with Commitments exceeding 50% of the Total
Commitments, or with participations exceeding 50% of
the Loan, notify the Agent that they believe that
EURIBOR, or as the case may be, LIBOR would not
reflect fairly the cost to them of funding an amount
outstanding under this Agreement.
24
(ii) EURIBOR, or as the case may be, LIBOR cannot be
determined because fewer than two Reference Banks
provide quotations.
(iii) Lenders with Commitments exceeding 50% of the Total
Commitments, or with participations exceeding 50% of
the Loan, notify the Agent that they are unable to
fund their participation in the Loan in the London or,
as the case may be, Paris interbank market.
(B) NOTICE: The Agent agrees to notify the Borrower and the
Lenders if this sub-clause applies.
(C) ALTERNATIVE INTEREST RATE ARRANGEMENTS: If the Agent delivers
a notice of market disruption each of the following applies:
(i) The means of determining the rates of interest
applicable to the Advance or Advances affected (the
"Affected Advance") will be suspended. Instead the
Borrower agrees to pay interest to the Lenders on the
Affected Advance in the manner requested by the Agent.
A request by the Agent may specify periods to be used
for the computation of interest. It must also specify
the rate of interest to apply for a period. This rate
will be the rate determined by the Agent to reflect
the cost to each Lender of funding the Affected
Advance for the period plus the Applicable Margin. In
order to assist the Agent in this determination each
Lender agrees to provide to the Agent any information
which the Agent may request. If this information is
received by the Agent within any time period specified
by the Agent it will be taken into account by the
Agent in making its determination.
(ii) The Borrower and the Agent will negotiate the terms of
an alternative arrangement for determining a rate of
interest for the Affected Advance. The negotiations
will be carried on in good faith. Neither party is
bound to continue the negotiations after the date 30
days after the Borrower receives the Agent's notice.
If agreement is reached and if it is approved by all
the Lenders the rate of interest will be determined in
accordance with the agreement. Sub-paragraph (i) will
not apply to the extent that it is expressly excluded
by this agreement.
(iii) If the circumstances described in paragraph (A) cease
to apply the Agent will notify the Borrower and the
Lenders. The notice will specify the transitional
arrangements proposed by the Agent which as far as
possible will be in accordance with the normal
interest rate fixing provisions of this Agreement. The
Borrower agrees to pay interest on the Affected
Advance to the Lenders in the manner described in this
notice unless a different arrangement is agreed by the
Agent and the Borrower and approved by all the
Lenders. In this case the Borrower agrees to pay
interest to the Lenders in the manner agreed.
(D) PREPAYMENT: If this sub-clause applies, the Borrower may
deliver a notice of repayment to the Agent. The Borrower
agrees to prepay the Loan or, at the Borrower's election, the
Affected Advance or Affected Advances three Business Days
25
after the Agent receives this notice. Clause 11.9 applies to
this repayment.
11.4 WITHHOLDINGS
(A) WITHHOLDINGS AND DEDUCTIONS: This sub-clause applies if the
Borrower or the Guarantor is required by United Kingdom law to
make a payment under a Finance Document net of a withholding
or deduction or, in the case of the Guarantor, is so required
by United States law. It also applies if the Agent is required
by United Kingdom law or, if the payment is made by the
Guarantor, by United States law, to make a payment to a Lender
under a Finance Document net of a withholding or deduction.
(B) NOTICE: Each of the Borrower and the Guarantor agrees to
notify the Agent if it becomes aware that this sub-clause
applies. Without prejudice to the Borrower's obligations under
this Clause 11, the Agent agrees to notify the Borrower and
the Guarantor and the Lenders if it becomes aware that this
sub-clause applies to any payments to be made by it.
(C) GROSSING UP: The Borrower and the Guarantor each agree to
increase the amount of any payment which is subject to a
withholding or deduction by United Kingdom law or, in the case
of the Guarantor, by United States law. This applies both
where the withholding or deduction is required on the payment
by the Borrower or the Guarantor itself and where it is
required on the payment by the Agent. As a result of this
increase the person entitled to the payment will be entitled
to receive the same amount it would have received if there had
been no withholding or deduction.
(D) PAYMENT OF TAX: The Borrower and the Guarantor each agrees to
pay to the appropriate authority all amounts withheld or
deducted by it. If a receipt or other evidence of payment can
be obtained from that authority without incurring unreasonable
cost or expense, the Borrower and the Guarantor agree, as soon
as reasonably practicable, to deliver this to the Agent and
otherwise to deliver any evidence of payment, reasonably
satisfactory to the relevant Lender if so requested.
(E) PREPAYMENT: If the Borrower or the Agent delivers a notice of
withholding or deduction:
(i) the Borrower may deliver to the Agent a notice of
repayment. This notice may relate to any part of the
Loan which is subject (or the interest on which is
subject) to the withholding or deduction. The Borrower
agrees to prepay the Loan (or the part of it which is
affected) three Business Days after the Agent receives
this notice. Clause 11.9 applies to this repayment;
and/or
(ii) the Borrower may deliver to the Agent a notice of
cancellation. This notice may relate to any part of
the Total Commitments which, if drawn, would be
subject (or the interest on which would be subject) to
the withholding or deduction. That part of the Total
Commitments will be reduced to zero on the date of
delivery of that notice.
(F) REFUND OF TAX CREDITS: If the Borrower or the Guarantor makes
an increased payment under Clause 11.4(C) (a "Tax Payment")
the relevant Lender or, as the case may be, the Agent agrees
26
to notify the Borrower if it has obtained a refund of tax or
obtained and used a credit against tax on its overall net
income (a "Tax Credit") which that Lender or, as the case may
be, the Agent is able to identify as attributable to that
Tax Payment. To the extent that it can in its absolute
discretion without any adverse consequences for
it, that Lender or, as the case may be, the Agent shall
reimburse the Borrower or, as the case may be, the Guarantor
such amount as the Lender or, as the case may be, the Agent
determines to be the proportion of that Tax Credit as will
leave the Lender or, as the case may be, the Agent (after that
reimbursement) in no better or worse position in respect of
its tax liabilities than it would have been in if no Tax
Payment had been required. No Lender or, as the case may be,
Agent shall be obliged to disclose any information regarding
its tax affairs and computations, and this sub-clause does not
affect the right of any Lender or, as the case may be, Agent
to arrange its tax affairs as it thinks fit.
(G) PAYMENT BACK OF TAX CREDIT: This Clause applies if the Lender
or Agent makes any payment to the Borrower or Guarantor
pursuant to Clause 11.4(F) and the Lender or Agent as the
case may be subsequently determines, in its reasonable
opinion, that the credit or refund in respect of which such
payment was made was not available or has been withdrawn or
that it was unable to use the credit or refund in whole or
part. In this event, the Borrower, or the Guarantor as the
case may be, will reimburse the Lender or the Agent such
amount as the Lender or the Agent determines, in its
reasonable opinion is necessary to place it in the same after
tax position as it would have been in had the credit or refund
been obtained and used and retained by the Lender or Agent
provided that neither the Borrower, nor the Guarantor will be
obliged to reimburse the Lender or the Agent an amount which
is greater than the amount received by the Borrower or the
Guarantor from that Lender or the Agent pursuant to Clause
11.4(F).
11.5 INLAND REVENUE TREATMENT OF THE LENDERS
(A) Each of the Borrower and the Guarantor will not be required to
pay increased amounts under Clause 11.4 in respect of a
payment of interest to a Lender if at the time that payment is
made the Lender is not a Qualifying Bank.
(B) This sub-Clause does not apply where the Lender ceases to be a
Qualifying Bank as a result of a change of law or concession
or a change in the interpretation or application of law or
concession after the date hereof. However, this sub-paragraph
(B) does not apply if this change relates to a Lender's
status as a Double Taxation Treaty Lender. Each Lender agrees
to notify the Borrower if it ceases to be a Qualifying Bank.
(C) This sub-clause only applies so far as the relevant
withholding or deduction is due to the Lender not being or
ceasing to be a Qualifying Bank.
11.6 CONFIRMATION FROM LENDERS
Each Lender confirms that it is a Qualifying Bank and this confirmation
is repeated on each interest payment date. The Borrower or the Agent
may request a Lender to confirm its status as a Qualifying Bank. Each
Lender agrees to provide, as soon as reasonably practicable, the
confirmation requested.
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11.7 MITIGATION
This sub-clause does not affect the obligations of the Borrower under
this Clause. This sub-clause applies if Clause 11.1, 11.2 or 11.4
applies to a Lender. In this case, that Lender agrees to do what it
considers reasonable to try to mitigate the effect of that sub-clause
on the Borrower. These steps may include the transfer of the Lender's
rights and obligations under this Agreement to another branch or entity
within the Lender's group. The Lender will not however be obliged to do
anything which in its opinion would or might have an adverse effect on
it.
11.8 UK BANKS
The Lenders confirm that as at the date of this Agreement they are UK
Banks. If a UK Bank wishes to transfer its lending office to an office
outside the United Kingdom it may do so after consultation with the
Borrower if the Lender is a Double Taxation Treaty Lender at the time
of the transfer.
11.9 PREPAYMENT
This sub-clause applies if the Borrower is obliged to repay the Loan or
any part of it under this Clause, Clause 10, Clause 20.2, Clause 20.3
or Clause 26.3(D). In this event the Borrower agrees to pay on the date
repayment is due interest accrued on the Loan (or the amount to be
repaid) up to that date. If the date repayment of an Advance is due is
not the last day of its Term, the Borrower will reimburse each affected
Lender for the losses and expenses that Lender has incurred, or will
incur, as a result. These losses and expenses may include those
incurred in liquidating or otherwise utilising amounts borrowed by that
Lender to fund that Advance. They may also include losses and expenses
incurred in hedging open positions resulting from the repayment.
12. PAYMENTS
12.1 METHOD AND TIMING OF PAYMENTS
All payments under the Finance Documents must be made in immediately
available funds and freely transferable funds. Each payment must be for
value on the due date.
12.2 CURRENCY OF PAYMENT
Each Advance is to be advanced and repaid in the currency in which it
is denominated. Interest on an Advance is to be paid in the same
currency as the Advance. All payments in respect of indemnity or other
reimbursement claims are to be made in the currency of that claim. All
other payments are to be made in euros, unless this Agreement specifies
a different currency.
12.3 PAYMENTS THROUGH THE AGENT
(A) NORMAL ARRANGEMENTS: All payments by the Borrower or the
Guarantor or by a Lender under this Agreement will be made
through the Agent. Each euro payment will be made to the
account of the Agent, account number 26 54 31 212. Each
non-euro payment will be made to an account of the Agent. The
details of this account will be notified to the payer by the
Agent. The Agent will pay on an amount received as soon as the
Agent has ascertained that it has been received.
28
(B) ALTERNATIVE ARRANGEMENTS: If the Agent believes that it is, or
will be, illegal or impossible for it to pay on to a Lender in
accordance with paragraph (A), it agrees to notify the
Borrower and that Lender. In this case the Borrower and that
Lender may agree alternative arrangements for payments to be
made to that Lender. Paragraph (A) will not apply to the
extent excluded by those alternative arrangements. That Lender
agrees to provide notice of the arrangements to the Agent and
will notify the Agent of payments in accordance with Clause
14.1.
12.4 EURO PAYMENTS TO THE BORROWER
Each euro payment by the Agent to the Borrower will be made to the
account notified to the Agent by the Borrower for this purpose.
12.5 PAYMENTS TO THE LENDERS
Each euro payment by the Agent to a Lender will be made to the account
of that Lender notified to the Agent for this purpose.
12.6 OTHER PAYMENTS
Each non-euro payment to be made by the Agent will be made to an
account of the payee. The details of this account will be notified to
the Agent by the payee.
12.7 CHANGE OF ACCOUNT
The Borrower or a Lender may change any of its receiving accounts by
not less than five Business Days' notice to the Agent. The Agent may
change any of its receiving accounts by not less than five Business
Days' notice to the Borrower and the Lenders.
12.8 REFUNDING OF PAYMENTS BY THE AGENT
This sub-clause applies if the Agent makes a payment out in the
mistaken belief that it has received or will receive an incoming
payment on a particular day. In this case the person which received the
payment from the Agent agrees to return it. It will also reimburse the
Agent for all losses and expenses incurred by the Agent as a result of
the payment. This sub-clause does not affect the rights of the person
which received the payment against the person which failed to make the
payment to the Agent.
12.9 NON-BUSINESS DAYS
If a payment would be due on a non-Business Day the payment obligation
will be deferred to the next Business Day, unless that day is in
another calendar month. Where it is in another calendar month, that
payment obligation will be brought forward to the previous Business
Day.
Interest and facility fees will be adjusted accordingly.
12.10 PAYMENT IN FULL
All payments by the Borrower and the Guarantor will be made in full and
without set off or counterclaim. No payment will be made net of a
withholding or deduction, unless this is required by law. In this event
Clause 11.4 applies.
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13. LATE PAYMENT
13.1 DEFAULT INTEREST
The Borrower and the Guarantor agree to pay interest on all amounts
unpaid under a Finance Document after their due date for payment. This
interest will be computed by reference to successive periods selected
by the Agent. The first of these periods will start on the due date for
payment of the unpaid amount except in the case that such unpaid amount
is in respect of all or part of an
Advance which has become due and payable on a day other than the last
day of its Term, in which case the first such period applicable thereto
shall be of a duration equal to the unexpired portion of that Term
based on the rate of interest applicable for that period plus 1.0% and
the Applicable Margin. In all other cases the rate of interest
applicable during each of these periods will be a rate per annum equal
to 1.0% plus:
(A) in the case of an amount in euros, EURIBOR for that period; or
(B) in the case of an amount in sterling, LIBOR for that period,
plus, in either case, the Applicable Margin. This interest will be paid
in arrear on the last day of each of these periods and on the date of
payment of the unpaid amount. Interest will be due under this
sub-clause both before and after judgment.
13.2 INDEMNITY
If the Borrower or the Guarantor fails to make a payment on the due
date the Borrower and the Guarantor agree to reimburse the person
entitled to the payment for the reasonable amount of any losses and
expenses (including loss of profit) that person incurs, or will incur,
as a result. The computation of these losses and expenses will take
into account any amount received under Clause 13.1.
14. SHARING AMONG LENDERS
14.1 NOTICE
If an amount due to a Lender (the "Recipient") under a Finance Document
(other than an amount due to the account of that Lender only) is
discharged other than by payment through the Agent, the Recipient
agrees to notify the Agent. This may occur because of the exercise of a
right of set-off, by virtue of a combination of accounts or because of
a voluntary or involuntary payment by the Borrower or the Guarantor
direct to that Recipient. The notification will provide details of the
amount discharged and will be delivered no later than 10 Business Days
after the discharge.
14.2 DETERMINATION BY THE AGENT
Where a Lender has issued a notice under Clause 14.1 the Agent will
determine what payments, if any, are due under Clause 14.4. This
determination will be made on the basis of the information contained in
all the notices delivered to the Agent under Clause 14.1. The
determination will be notified to the Borrower and the Lenders.
14.3 LITIGATION
In determining the amount due under Clause 14.4 no account will be
taken of an amount due to a Lender which has declined to participate in
legal proceedings which resulted in the payment described in Clause
14.1. This only applies if that Lender could have joined in
30
the proceedings or could have instituted its own proceedings, but
failed to do so.
14.4 PAYMENT TO THE AGENT
The Recipient agrees to pay to the Agent an amount calculated as
follows:
P = D (X - Y)
where:
P = the amount payable to the Agent
D = the aggregate amount due to the Recipient out of which an
amount has been discharged
X = the fraction of D which has been discharged
Y = the fraction which has been discharged, if any, of the
aggregate amount due to the Lender which has the greatest
proportion of that amount still outstanding.
This amount will be paid no later than five Business Days after receipt
of a notice from the Agent under Clause 14.2.
14.5 OBLIGATIONS OF THE BORROWER AND THE GUARANTOR
Any amount due to the Recipient which would otherwise have been
discharged as described in Clause 14.1 will be treated as not having
been discharged to the extent of an amount which is or will be payable
under Clause 14.4 as a result. Accordingly the Borrower and the
Guarantor agree to pay this amount to the Recipient as if it had not
been discharged. This payment is required to be made whether or not the
Agent has issued a determination under Clause 14.2.
14.6 DISTRIBUTION
The Agent agrees to distribute to the Lenders (including, for the
avoidance of doubt, the Recipient) the amount received by it under
Clause 14.4 as if that amount had been received from the Borrower in
discharge of an amount due under the Agreement. The Borrower will then
be treated as having paid that amount.
14.7 RECOVERY
This sub-clause applies if an amount discharged as described in Clause
14.1 is recovered from, or is required to be repaid by, the Recipient.
In this case each Lender which received the benefit of a payment made
under Clause 14.4 agrees to repay to the Recipient the amount it
received. Each of these Lenders will also reimburse the Recipient for
any interest or other losses or expenses which the Recipient has
incurred in connection with the discharged amount or its recovery or
repayment. The rights and obligations of the parties shall be restored
to the position before any payment became due under Clause 14.4.
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PART V : THE GUARANTEE
15. GUARANTEE
15.1 GUARANTEE
The Guarantor guarantees the due and punctual performance of all
obligations of the Borrower under this Agreement. This Guarantee is
unconditional and irrevocable.
15.2 AGREEMENT TO PAY
The Guarantor agrees to pay on first demand each amount due by the
Borrower which is unpaid. The demand may be made at any time on or
after the due date for payment. Payment will be made in the same
currency as the amount due by the Borrower.
15.3 CONTINUING GUARANTEE
This Guarantee is a continuing guarantee. No payment or other
settlement will discharge the Guarantor's obligations until the
Borrower's obligations have been discharged in full.
15.4 OTHER GUARANTEES AND SECURITY
This Guarantee is in addition to, and independent of, any other
guarantee or Security.
15.5 ENFORCEMENT
This Guarantee may be enforced before any steps are taken against the
Borrower or under any other guarantee or Security.
15.6 PRESERVATION OF RIGHTS
This Guarantee will be discharged only by the receipt of payment in
full. It will not be discharged by any other action, omission or fact.
The Guarantor's obligations will, therefore, not be affected by any of
the following happening:
(A) The obligations of the Borrower are or become void, invalid,
illegal or unenforceable.
(B) There is any change, waiver or release of the Borrower's
obligations.
(C) Any concession or time is given to the Borrower.
(D) The Borrower is wound up or reorganised.
(E) There is any change in the condition, nature or status of the
Borrower.
(F) Any of the above events occur in relation to another guarantor
or provider of Security or the obligations of that guarantor
or provider.
(G) There is any failure to take, retain or enforce any other
guarantee or Security.
(H) Any circumstances affect or prevent recovery of amounts due by
the Borrower.
(I) Any other matter exists which might discharge the Guarantor.
32
Any receipt from any person other than the Guarantor will reduce the
outstanding balance only to the extent of the amount received.
15.7 REPRESENTATIONS OF THE GUARANTOR
The Guarantor confirms that it does not have the benefit of any
Security in respect of this Guarantee.
15.8 COVENANTS OF THE GUARANTOR
The Guarantor agrees as follows:
(A) SECURITY: The Guarantor agrees that it will not take or seek
to take the benefit of any Security in respect of this
Guarantee. If, in breach of this paragraph, the Guarantor at
any time has the benefit of any Security, it will hold that
Security on trust for the Agent and the Lenders.
(B) EXERCISE OF RIGHTS: The Guarantor will not:
(i) take the benefit of any right against the Borrower or
any other person in respect of amounts paid under this
Guarantee; or
(ii) claim or exercise against the Borrower any right to
any payment (whether or not in connection with this
Agreement).
(C) COMPETING PROOF: An Instructing Group may request the
Guarantor to submit a proof for amounts due to it by the
Borrower or any other guarantor. The Guarantor agrees to
submit a proof promptly in accordance with this request. All
amounts received in respect of this proof will be held by the
Guarantor on trust for the Agent and the Lenders.
The obligations in this sub-clause will cease to have effect when the
Facility has ceased to be available and there are no amounts owing,
present or future, actual or contingent under this Agreement or any
other Finance Document.
15.9 SUSPENSE ACCOUNT
Any amount received under this Guarantee or in connection with amounts
due by the Borrower may be placed on suspense account. Suspense
accounts may be held by the Agent or by a Lender. While the amounts are
in the suspense account the Agent or any Lender may claim and recover
amounts from the Borrower and any other guarantor as if the amount in
the suspense account had not been received. Amounts may be taken out of
a suspense account by the person holding that account at any time.
15.10 DISCHARGE CONDITIONAL
Any settlement with, or discharge of, the Guarantor will be subject to
a condition. This condition is that the settlement or discharge will be
set aside if any prior payment, or any other guarantee or Security, is
set aside, invalidated or reduced. In this event the Guarantor agrees
to reimburse each Lender and the Agent for the value of the payment,
guarantee or Security which is set aside, invalidated or reduced.
15.11 PRINCIPAL DEBTOR
In addition to the Guarantor's obligations as guarantor, the Guarantor
agrees to pay any amount which is not recoverable from the Guarantor as
a guarantor. Any amount due under this sub-clause will be recoverable
from the
33
Guarantor as though the obligation had been incurred by the Guarantor
as sole or principal debtor.
16. GUARANTOR'S INDEMNITY
16.1 INDEMNITY
The Guarantor agrees that if the Borrower fails to make a payment
expressed to be due under the terms of this Agreement on its due date
it will reimburse the person entitled to the payment for the losses and
expenses (including loss of profit) that person incurs, or will incur,
as a result. The Guarantor also agrees to reimburse each Lender and the
Agent for all losses and expenses arising from any obligations of the
Borrower being or becoming void, invalid, illegal or unenforceable.
16.2 AMOUNT OF LOSS
For the purposes of this Clause a Lender and the Agent will be treated
as having suffered a loss equal to the amount which is expressed as
being due to it by the Borrower and unpaid (taking into account amounts
paid under Clause 15). If this treatment is incorrect the Lender or the
Agent will produce evidence of its loss.
34
PART VI: REPRESENTATIONS, COVENANTS AND TERMINATION EVENTS
17. REPRESENTATIONS
17.1 INITIAL REPRESENTATIONS
Each of the Borrower and the Guarantor confirms that each of the
following is true:
(A) LEGAL STATUS:
(i) The Borrower is a company duly incorporated and
validly existing under the laws of England.
(ii) The Guarantor is a company duly incorporated and
validly existing under the laws of the State of
Delaware.
(iii) Polaroid Nederland B.V. and Polaroid Trading B.V. are
each companies duly incorporated and validly existing
under the laws of the Netherlands.
(iv) Polaroid Contracting C.V. is a limited partnership
duly constituted under the laws of the Netherlands.
(v) PRD Management Limited and PRD Overseas Limited are
each companies duly incorporated and validly existing
under the laws of Bermuda.
(vi) Polaroid GmbH is a limited liability company
(Gesellschaft mit beschrankter Haftung) duly
incorporated and validly existing under the laws of
the Federal Republic of Germany.
(B) CORPORATE POWERS: It and each Relevant Polaroid Subsidiary has
power to own its assets and conduct its business as it is now
being conducted. It also has power to sign and deliver this
Agreement and, in the case of the Borrower and each Relevant
Polaroid Subsidiary, the Charges to which the Borrower or such
Relevant Polaroid Subsidiary is a party and to exercise its
rights and perform its obligations under this Agreement and,
in the case of the Borrower and each Relevant Polaroid
Subsidiary, the Charges to which the Borrower or such Relevant
Polaroid Subsidiary is a party.
(C) AUTHORISATIONS:
(i) The signature and delivery of this Agreement and, in
the case of the Borrower and each Relevant Polaroid
Subsidiary, the Charges to which the Borrower or such
Relevant Polaroid Subsidiary is a party have been duly
authorised on behalf of such party.
(ii) The exercise of its rights and the performance of its
obligations under this Agreement and, in the case of
the Borrower and each Relevant Polaroid Subsidiary
each such signatory's rights and the performance of
its obligations under this Agreement and the Charges
to which the Borrower or such Relevant Polaroid
Subsidiary is a party have been duly authorised.
(D) BINDING OBLIGATIONS:
(i) This Agreement and, in the case of the Borrower and
each Relevant Polaroid Subsidiary, the Charges to
which the
35
Borrower or such Relevant Polaroid Subsidiary is a
party have been duly signed and delivered.
(ii) Its obligations described in this Agreement and, in
the case of the Borrower and each Relevant Polaroid
Subsidiary, the obligations described in the Charges
to which the Borrower or such Relevant Polaroid
Subsidiary is a party, are its or such Relevant
Polaroid Subsidiary's valid and binding obligations
(subject to (a) the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganisation, moratorium and
other similar laws relating to or affecting creditors'
rights generally, (b) general equitable principles
(whether considered in a proceeding in equity or at
law), (c) any implied covenant of good faith and fair
dealing and (d) any other matter contained in the
reservations as to matters of law contained in the
legal opinions delivered under paragraph 13 of
Schedule 2).
(E) LEGALITY AND CONTRAVENTIONS: The signature and delivery of
this Agreement and, in the case of the Borrower and each
Relevant Polaroid Subsidiary, the Charges to which the
Borrower or such Relevant Polaroid Subsidiary is a party and
the exercise of its rights and performance of its obligations
under this Agreement and the Charges to which it or such
Relevant Polaroid Subsidiary is a party:
(i) are not prohibited by law, regulation or order or by
its constitutional documents;
(ii) do not require any approval, filing, registration or
exemption (other than the perfection of the Security
constituted by the Charges at Companies House and each
of the other jurisdictions (if relevant) in which any
property or rights which are subject to the Charges is
located or in respect of which any party to a Charge
is required to obtain or make such approval, filing,
registration or exemption); and
(iii) are not prohibited by, and do not constitute an event
of default under, and do not result in an obligation
to create Security under, any document or arrangement
to which it is a party and which is material in the
context of this Agreement.
(F) RANKING OF OBLIGATIONS: Its obligations under this Agreement
are secured by the Charges.
(G) BORROWING LIMIT: The borrowing of the full amount available
under this Agreement will not cause any limitation on the
powers to borrow of the Borrower or its directors to be
exceeded.
(H) CORRECTNESS OF INFORMATION: All information supplied and to be
supplied on its behalf to any of the Co-arrangers, the Agent
or any Lender in connection with the Finance Documents is
(taken as a whole) true, accurate and complete in all material
respects at the time supplied. It is not aware of any material
facts or circumstances which have not been disclosed to any of
them which (taken as a whole) might, if disclosed, adversely
affect the decision of a person considering whether or not to
lend to the Borrower.
36
(I) NO TERMINATION EVENT: No Termination Event has occurred and
remains unremedied.
(J) ACCOUNTS: The audited profit and loss accounts of the Borrower
for the year ended 31st December, 1998 and the audited balance
sheet of the Borrower as at that date give a true and fair
view of the results of the Borrower's operations and the
financial position of the Borrower. The audited consolidated
profit and loss accounts of the Borrower's Group for the year
ended 31st December, 1998 and the audited consolidated balance
sheet of the Borrower's Group as at that date give a true and
fair view of the results of the Borrower's Group's operations
and the financial position of the Borrower's Group. These were
prepared in accordance with Generally Accepted Accounting
Principles consistently applied except to the extent that the
accompanying notes provide a description of a different
treatment.
(K) STAMP DUTY: No stamp, registration or similar tax is payable,
and no filing or registration is required, in connection with
the execution, performance or enforcement of any Finance
Document (other than registration fees in respect of the
necessary filings to be made in respect of certain Finance
Documents).
(L) LITIGATION: There is no proceeding, suit or action current or
pending or, to its knowledge, threatened before any court or
arbitrator in respect of the Borrower or the Guarantor which
could or is likely to have a Material Adverse Effect. This
representation does not apply to any litigation disclosed in
relation to the Guarantor:
(i) in a letter from the Guarantor to the Agent dated on
or before the date of this Agreement; and
(ii) in the Guarantor's 1998 Form 10-K and First Quarter
1999 Form 10-Q, both as filed with the United States
Securities and Exchange Commission.
(M) NO DEFAULT: It is not in breach of any law, regulation,
agreement or arrangement applicable to it or any of its assets
which is likely to have a Material Adverse Effect.
The Guarantor confirms that:
(N) MATERIAL ADVERSE CHANGE: There has been no material adverse
change in the business, financial position or results or
operations of the Guarantor's Group, considered as a whole.
17.2 REPETITION
The representations in Clause 17.1, except those in sub-clauses (C),
(E) and (K), will be deemed repeated by the Borrower and the Guarantor
on each Advance Date by reference to the facts and circumstances then
subsisting. The representation in Clause 17.1(I) will only be deemed
repeated under this sub-clause on the date of a notice of borrowing and
on an Advance Date when Clause 6.8 does not apply. This repetition will
be with reference to the facts on that day. If on that day audited
accounts for a period subsequent to the dates referred to in Clause
17.1(J) have been published, that sub-clause will be treated as
referring to the audited profit and loss accounts and audited balance
sheets contained in the then latest audited financial statements of the
parties referred to in that sub-clause.
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17.3 SURVIVAL OF REPRESENTATIONS
Each of the representations made under this Agreement will survive the
making of each Advance.
18. DELIVERY OF INFORMATION
18.1 PERIODIC REPORTS
The Borrower and the Guarantor each agree to deliver each of the
following to the Agent as soon as they become available and, in any
event, by the latest date indicated:
DOCUMENT/INFORMATION LATEST DATE
-------------------- -----------
(a) Annual audited accounts of the Borrower 120 days after the end of each
financial year
(b) Annual audited consolidated accounts of the Borrower's 120 days after the end of each
Group financial year
(c) Annual audited consolidated accounts of the Guarantor's 90 days after the end of each
Group financial year
(d) Half year unaudited consolidated accounts of the 90 days after the end of each
Borrower's Group half of its financial year
(e) Quarterly unaudited consolidated accounts of the 45 days after the end of each of
Guarantor's Group the first three quarters of its
financial year
(f) Quarterly balances prepared in 45 days after the end
accordance with GAAP of each quarter of its financial year
showing: (i) the total amount of Inventory and
the amount (net of any reserves) of
Receivables and, (ii) the amount of Inventory and
the amount (net of any reserves) of the Receivables
subject to the Charges.
(g) A certificate of the chief financial officer or the At the same time as the delivery
chief accounting officer of the Guarantor of each set of the Guarantor's Group's
setting out in reasonable detail accounts under paragraphs (c) and (e)
the calculations required to establish
that the Guarantor was in compliance with
Section 5.01(a) and 5.01(b) of the Guarantor's
Revolving Credit Agreement
In each case the Borrower and the Guarantor agree to deliver the number
of copies requested by the Agent (which shall be a number which enables
sufficient copies to be provided to the Agent and each Lender).
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18.2 GAAP
The Borrower and the Guarantor each confirm and agree that all accounts
and balance sheets to which Clauses 17.1(J) and 18.1 apply have been
or will be prepared in accordance with English law (or, as the case may
be, in accordance with the law of the State of Delaware) and Generally
Accepted Accounting Principles consistently applied except to the
extent that the accompanying notes provide a description of a different
treatment.
18.3 REQUESTS
The Borrower and the Guarantor agree that upon receipt of a request
from the Agent for such additional information regarding the business,
financial position or results of operations of the Borrower or the
Guarantor, or their compliance with the provisions of the Finance
Documents (which the Borrower deems it can reasonably comply with and
which allows at least 30 days for the delivery of such information) the
Borrower and/or the Guarantor will deliver such information to the
Agent. However in the event a Potential Termination Event or a
Termination Event is subsisting unremedied or unwaived, the Borrower
and/or the Guarantor agree that such information will be delivered to
the Agent as soon as reasonably possible.
18.4 TERMINATION EVENT
The Borrower and the Guarantor each agree to notify the Agent promptly
of the occurrence of a Termination Event or Potential Termination
Event.
18.5 LITIGATION
Each of the Borrower and the Guarantor agrees to notify the Agent as
soon as it becomes aware that any proceedings of the kind described in
Clause 17.1(L) are being considered by any other person.
19. GENERAL COVENANTS
19.1 COVENANTS
The Borrower agrees as follows:
(A) RANKING OF OBLIGATIONS: It will ensure that its obligations
under this Agreement are secured by the Charges.
(B) LEGALITY OF PERFORMANCE: It will exercise its rights and
perform its obligations under the Finance Documents without
contravention of applicable laws. If approvals are required,
it will obtain and maintain them and will comply with their
terms. It will also make any necessary filings. The
obligations in this paragraph only apply to the extent that
failure to comply with any of them would have a Material
Adverse Effect.
(C) GUARANTOR'S REVOLVING CREDIT AGREEMENT: It will comply with
all obligations set out in Article 5 of the Guarantor's
Revolving Credit Agreement in relation to which and to the
extent that the Guarantor undertakes, in the Guarantor's
Revolving Credit Agreement, to procure that the Borrower
complies with those obligations.
39
(D) POLAROID TRADING: It will procure that Polaroid Trading B.V.:
(i) executes the Pledge of Polaroid Trading Receivables as
soon as possible after the provisions of the
Netherlands Works Council Act have been complied with
by Polaroid Trading B.V. in relation to the Pledge of
Polaroid Trading Receivables; and
(ii) provides a certified copy of evidence of corporate
authority approving execution and delivery of the
Pledge of Polaroid Trading Receivables.
19.2 GUARANTOR'S COVENANTS
The Guarantor will comply with the obligations set out in Article 5 of
the Guarantor's Revolving Credit Agreement.
19.3 DURATION OF COVENANTS
The obligations of the Borrower and the Guarantor under Clauses 17, 18
and 19 will cease to have effect when the Facility has ceased to be
available and there are no amounts owing (actual or contingent, present
or future) under this Agreement and the other Finance Documents.
20. TERMINATION EVENTS
20.1 TERMINATION EVENTS
Each of the following is a Termination Event:
(A) NON-PAYMENT: The Borrower fails to pay an amount in respect of
principal of the Loan when due, or, the Borrower or the
Guarantor fails to pay any other amount due under this
Agreement. The Borrower or any Relevant Polaroid Subsidiary
fails to pay an amount due under the Charges to which it is a
party within three Business Days of the due date for payment.
(B) OTHER DEFAULTS: The Borrower or the Guarantor fails to perform
any of its other obligations under this Agreement. The
Borrower or any Relevant Polaroid Subsidiary fails to perform
any of its other obligations under the Charges to which it is
a party within 30 days after written notice of this failure
has been given to the Borrower and, if different, the
defaulting party by the Agent.
(C) UNTRUE REPRESENTATIONS: Any statement made, or deemed
repeated, in Clause 17, or the Charges, or in any document
delivered by the Borrower or the Guarantor in connection with
this Agreement or by the Borrower or any Relevant Polaroid
Subsidiary in connection with the Charges to which it is a
party, is untrue or misleading when that statement is made or
deemed repeated.
(D) CROSS DEFAULT: Any Borrowed Monies Indebtedness of the
Borrower or the Guarantor or any of the Guarantor's
Consolidated Subsidiaries:
(i) is not paid or repaid when due or within any
applicable grace period; or
40
(ii) becomes capable of being declared due and payable
before its stated date of payment and by reason a
termination event (however described).
This paragraph does not apply unless the total amount of the
Borrowed Monies Indebtedness equals or exceeds US$10,000,000 (or
its equivalent in any other currency).
(E) INSOLVENCY AND REORGANISATION: Any procedure is commenced with
a view to the winding-up or re-organisation of the Guarantor,
the Borrower or any Subsidiary of the Borrower, or with a view
to the appointment of an administrator, receiver,
administrative receiver, trustee in bankruptcy or similar
officer in relation to the Guarantor, the Borrower or any
Subsidiary of the Borrower or any of their assets. This
procedure may be a court procedure or any other step which
under applicable law is a possible means of achieving any of
those results. It will not be a Termination Event, however, if
any procedure is discharged within 60 days. In addition, this
paragraph (E) does not apply to a Permitted Reorganisation.
(F) ENFORCEMENT OF SECURITY: The holder of any Security over any
of the assets of the Guarantor, the Borrower or any Subsidiary
of the Borrower takes any step to enforce that Security. This
will not be a Termination Event where the relevant step is
dismissed within 30 days or if the aggregate amount secured by
the Security is US$10,000,000 (or its equivalent in any other
currency) or less.
(G) ATTACHMENT OR DISTRESS: Any asset of the Guarantor, the
Borrower or any Subsidiary of the Borrower is subject to
attachment, sequestration, execution or any similar process in
respect of Borrowed Monies Indebtedness of more than
US$10,000,000 (or its equivalent in any other currency). It
will not be a Termination Event, however, if any process is
dismissed within 30 days.
(H) INABILITY TO PAY DEBTS: Any of the following is true:
(i) The Guarantor, the Borrower or any Subsidiary of the
Borrower is unable to pay its debts as they fall due.
(ii) The Guarantor, the Borrower or any Subsidiary of the
Borrower admits its inability to pay its debts as and
when they fall due or seeks a composition or
arrangement with its creditors or any class of them.
(I) INSOLVENCY EQUIVALENCE: Anything analogous to any of the
events described in paragraphs (E) to (H) occurs in any
jurisdiction.
(J) UNLAWFULNESS OR REPUDIATION: It is unlawful for the Borrower
or the Guarantor to comply with its obligations under this
Agreement, or for the Borrower or any Relevant Polaroid
Subsidiary to comply with its obligations under the Charges to
which it is a party, or the Borrower, the Guarantor or any
Relevant Polaroid Subsidiary repudiates any of those
obligations.
(K) CHANGE OF CONTROL: The Borrower ceases to be one of the
Guarantor's Consolidated Subsidiaries.
41
20.2 CONSEQUENCES OF A TERMINATION EVENT
If a Termination Event occurs, the Agent may by notice to the Borrower:
(A) cancel the Facility; or
(B) demand immediate repayment of the Loan,
or both. The Agent agrees to deliver a notice under this sub-clause if
an Instructing Group instructs the Agent to do so. In the case of
cancellation the Lenders will be under no further obligation to make an
Advance. In the case of a demand for repayment the Borrower agrees to
pay the Lenders in accordance
with the notice together with accrued interest on the Loan and all
other amounts owing to the Lenders under the Finance Documents.
20.3 INDEMNITY
If there is a Termination Event each of the Borrower and the Guarantor
agrees to reimburse each of the Agent and the Lenders for the losses
and expenses it incurs, or will incur, as a result. Clause 11.9 also
applies.
20.4 CURRENCY INDEMNITY
This sub-clause applies where a payment due by the Borrower or the
Guarantor under or in connection with a Finance Document is made or is
required to be made in a currency other than the specified currency. To
the extent that the amount received, when converted into the specified
currency, is less than the amount due the Borrower and the Guarantor
agree to reimburse the person entitled to the payment for the
difference. For the purposes of the computation of this amount that
person will apply to the amount received a rate of exchange prevailing
on the date of receipt. If, however, that person is unable to use the
amount received to buy the specified currency on the date of receipt,
the rate of exchange prevailing on the first date on which that person
could buy the specified currency will be used instead. The obligation
in this sub-clause is a separate and independent obligation.
42
PART VII: MISCELLANEOUS
21. THE AGENT AND THE CO-ARRANGERS
21.1 APPOINTMENT
(A) AGENT AND TRUSTEE: Each Lender irrevocably appoints the Agent
to act as its agent for the purpose of the Finance Documents
and as its agent and trustee for the purpose of the Charges.
The Agent is not acting as agent or trustee of the Borrower or
the Guarantor under the Finance Documents except for the
limited purpose of signing Substitution Certificates in
accordance with Clause 24.3 and for the purpose of the Charges
and, if relevant, any Additional Guarantee.
(B) BENEFIT OF SECURITY: The Agent will hold the benefit of the
Charges as agent and trustee for the Lenders in respect of
amounts payable under this Agreement.
21.2 AUTHORITY
The Agent is authorised to exercise the rights, powers, discretions and
duties which are specified by the Finance Documents. The Agent may also
act in a manner reasonably incidental to these matters.
21.3 DUTIES
In addition to the obligations of the Agent set out elsewhere in the
Finance Documents the Agent agrees as follows:
(A) NOTICES: The Agent will as soon as reasonably practicable
notify each Lender of the contents of each notice received
from the Borrower or the Guarantor under a Finance Document.
If the notice affects only particular Lenders the Agent may
elect to notify only those Lenders, in which case it will do
so as soon as reasonably practicable.
(B) OTHER DOCUMENTS: When the Borrower or the Guarantor delivers
to the Agent any other document required to be delivered under
a Finance Document, the Agent will as soon as reasonably
practicable provide a copy to each Lender. The Borrower agrees
to reimburse the Agent for the costs of preparing any copies
required for this purpose.
(C) TERMINATION EVENTS: The Agent will notify each Lender of any
Termination Event or Potential Termination Event. This
obligation will not arise, however, until the Agent receives
express notice from any party to the Finance Documents under
and in accordance with the provisions of the Finance Documents
with reasonable supporting evidence of the Termination Event
or Potential Termination Event. Until this time the Agent is
entitled to assume that there is no Termination Event or
Potential Termination Event. The Agent is not required to make
inquiries. Information referred to in Clause 21.11 does not
have to be disclosed under this sub-clause.
(D) INFORMATION: The Agent will ask the Borrower or the Guarantor
to deliver to the Agent any information reasonably requested
by a Lender which the Agent is entitled to request under
Clause 18 but not otherwise.
43
21.4 POWERS
In addition to the powers of the Agent set out elsewhere in the Finance
Documents the Agent has the following powers:
(A) PROFESSIONAL ADVISERS: The Agent may instruct professional
advisers to provide advice in connection with the Facility.
(B) AUTHORITY FROM INSTRUCTING GROUP: The Agent may take any
action which is not inconsistent with the Finance Documents
and which is authorised by an Instructing Group.
(C) VIEWS OF INSTRUCTING GROUP: In exercising any of its rights,
powers or discretions, the Agent may seek the views of an
Instructing Group. If it exercises those rights, powers or
discretions in accordance with those views the Agent will
incur no liability.
(D) PROCEEDINGS: The Agent may institute legal proceedings against
the Borrower or the Guarantor in the name of those Lenders
which authorise it to take those proceedings but not
otherwise.
(E) COMPLIANCE WITH LAW: The Agent may take any action necessary
for it to comply with applicable laws.
The Agent is not required to exercise any of these powers and will
incur no liability if it fails to do so. In the context of legal
proceedings the Agent may decline to take any step until it has
received indemnities or Security satisfactory to it.
21.5 RELIANCE
The Agent is entitled to rely upon each of the following:
(A) Advice received from professional advisers.
(B) A certificate of fact received from the Borrower or the
Guarantor and signed by an Authorised Person.
(C) Any communication or document believed by the Agent to be
genuine.
The Agent will not be liable for the consequences of relying on any of
these items.
21.6 EXTENT OF AGENT'S DUTIES
(A) NO OTHER DUTIES: The Agent has no obligations or duties other
than those expressly set out in the Finance Documents.
(B) ILLEGALITY AND LIABILITY: The Agent is not obliged to do
anything which is illegal or which may expose it to liability
to any person.
21.7 RESPONSIBILITY OF THE LENDERS
Each Lender is responsible for its own decision to become involved in
the Facility and its decision to take or not take action under the
Facility. It should make its own credit appraisal of the Borrower and
the Guarantor and the terms of the Facility. Neither the Agent nor any
Co-arranger makes any representation that any information provided to a
Lender before or after the date of this Agreement is true. Accordingly
each Lender should take whatever
44
action it believes is necessary to verify that information. In addition
neither the Agent nor any Co-arranger is responsible for the legality,
validity or adequacy of any Finance Document. Each Lender will satisfy
itself on these issues.
21.8 LIMITATION OF LIABILITY
(A) AGENT AND CO-ARRANGERS: Neither the Agent nor the Co-arrangers
will be liable for any action or non-action under or in
connection with the Facility unless caused by its gross
negligence or wilful misconduct.
(B) DIRECTORS, EMPLOYEES AND AGENTS: No director, employee or
agent of the Agent or the Co-arrangers will be liable to a
Lender or the Borrower or the Guarantor in relation to the
Facility. Each Lender and the Borrower and the Guarantor agree
not to seek to impose this liability upon them.
21.9 BUSINESS OF THE AGENT
Despite its role as agent of the Lenders the Agent may:
(A) participate as a Lender in the Facility;
(B) carry on all types of business with the Borrower and the
Guarantor;
(C) act as agent for other groups of lenders to the Borrower and
the Guarantor and other borrowers; and
(D) receive any sum for its own account in its capacity as Agent.
21.10 INDEMNITY
Each Lender agrees to reimburse the Agent for all losses and expenses
incurred by the Agent as a result of its appointment as Agent or
arising from its activities as Agent. These losses and expenses will
take into account amounts reimbursed to the Agent by the Borrower and
the Guarantor. The liability of each Lender under this sub-clause will
be limited to the share of the total losses and expenses which
corresponds to that Lender's share of the Total Commitments or, if an
Advance has been made and is outstanding, the Loan. If the losses or
expenses are attributable to an activity of the Agent which relates to
only some of the Lenders the Agent may instead notify the Lenders of a
different sharing arrangement. In this case the limit of liability of a
Lender under this sub-clause will be determined by the Agent. The
Lenders are not liable for losses and expenses arising from the gross
negligence or willful misconduct of the Agent.
21.11 CONFIDENTIAL INFORMATION
The Agent is not required to disclose to the Lenders any information
which is not received by it in its capacity as Agent or from any other
party to the Finance Documents under and in accordance with the
provisions of the Finance Documents. In acting as Agent under the
Finance Documents, the Agent will be regarded as acting through its
agency division (which will be treated as a separate entity from any
other division of the Agent) and, notwithstanding any other provision
of this Clause 21, any information received by any other division of
the Agent may be treated as confidential and will not be regarded as
having been given to the Agent's agency division.
45
21.12 RESIGNATION AND REMOVAL
The Agent may resign by giving notice to the Borrower and the Lenders.
In that event the following apply:
(A) APPOINTMENT BY INSTRUCTING GROUP: An Instructing Group may
appoint a new Agent with the consent of the Borrower (not to
be unreasonably withheld or delayed).
(B) APPOINTMENT BY THE RESIGNING AGENT: If the Agent has resigned
and an Instructing Group has not appointed a new Agent within
30 days after the resigning Agent's notice, the resigning
Agent may appoint a new Agent.
(C) MODE OF APPOINTMENT: Subject to (A) and (B) above, a new Agent
will be appointed by notice to the Borrower and the Lenders. A
new Agent cannot be appointed without its consent.
(D) TIMING OF APPOINTMENT: If the Agent has resigned, the new
Agent will become Agent at a time agreed between the new Agent
and the resigning Agent. If no time is agreed the new Agent
will become Agent ten Business Days after the notice referred
to in paragraph (C). Any removal or resignation of the Agent
will not be effective until a new Agent has been appointed and
accepted its appointment.
(E) EFFECT OF APPOINTMENT: Upon a new Agent becoming Agent the
resigning/removed Agent will cease to be Agent. Accordingly it
will be discharged from its obligations and duties as Agent.
It will, however, continue to be able to rely on the terms of
this Clause in respect of all matters relating to the period
of its appointment. The new Agent will assume the role of
Agent. It will have all the rights, powers, discretions and
duties of the Agent provided for in the Finance Documents.
(F) TRANSITION: The resigning/removed Agent and the new Agent
agree to co-operate to ensure an orderly transition. The
resigning/removed Agent agrees to deliver or make available to
the new Agent all records, files and information held by it as
Agent. This obligation will not require the resigning/removed
Agent to disclose any confidential information.
21.13 THE CO-ARRANGERS
Without prejudice to the other provisions of this Clause 21, the
Co-arrangers have, and the Documentation Agent has, no continuing role
in connection with the Facility and are not liable in respect of any
matter concerning the Facility. Neither the Co-arrangers nor the
Documentation Agent are the agents for any Lender.
21.14 PARALLEL DEBT
(A) Without prejudice to the other provisions of this Agreement
and for the purpose of ensuring and preserving the validity
and continuity of the Dutch law security rights granted and to
be granted by the respective pledgors (the respective pledgors
hereafter jointly and individually the "Pledgor") under or
pursuant to the Pledge of Inventory, the Pledge of
Inter-Company Receivables, the Pledge of Polaroid Nederland
Receivables and the Pledge of Polaroid Trading Receivables
(and any additional pledges further to any of the foregoing
and any other Dutch Security), each of the Borrower and the
Guarantor hereby irrevocably and unconditionally undertakes to
pay to the Pledgee (as defined therein) amounts equal to and
46
in the currency of its respective Principal Obligations from
time to time due in accordance with the terms and conditions
of its Principal Obligations (such payment undertaking and
the obligations and liabilities which are the result thereof,
the "Parallel Debt").
(B) The parties hereto acknowledge (i) that the Parallel Debt
constitutes undertakings, obligations and liabilities of each
of the Borrower and the Guarantor to the Pledgee under this
Agreement which are separate and independant from, and without
prejudice to, the corresponding Principal Obligations which
each of the Borrower and the Guarantor has to the
Beneficiaries and (ii) that the Parallel Debt represents the
Pledgee's own claims (vorderingen op naam) to receive payment
of the Parallel Debt with the Pledgee as sole creditor thereof
and the same (or any Dutch Security) not being held on trust,
provided that the total amount which may become due under the
Parallel Debt shall never exceed the total amount which may
become due under the Principal Obligations.
(C) Every payment of monies made by the Borrower or the Guarantor
to the Pledgee shall (conditionally upon such payment not
subsequently being avoided or reduced by virtue of any
provisions or enactments relating to bankruptcy, insolvency,
liquidation or similar laws of general application) be in
satisfaction PRO TANTO of the covenant by the Borrower or the
Guarantor respectively contained in sub-paragraph (A) above,
provided that, if any such payment as is mentioned above is
subsequently avoided or reduced by virtue of any provisions or
enactments relating to bankruptcy, liquidation or similar laws
of general application, the Pledgee shall be entitled to
receive the amount of such payment from the Borrower or the
Guarantor, as the case may be, and the Borrower or the
Guarantor, as the case may be, shall remain liable to perform
the relevant obligation and the relevant liability shall be
deemed not to have been discharged.
(D) Subject to the proviso contained in sub-paragraph (C) above,
but notwithstanding any of the other provisions of this
paragraph (D):
(i) the total amount due and payable as Parallel Debt
under this Clause 21.14 shall be decreased to the
extent that the Borrower and/or the Guarantor shall
have paid any amounts to the Beneficiaries to reduce
the outstanding Principal Obligations or any
Beneficiary otherwise (other than as a result of the
Parallel Debt or Security granted to secure the same)
receives any amount in payment of the Principal
Obligations; and
(ii) to the extent that the Borrower and/or the Guarantor
shall have paid any amounts to the Pledgee under the
Parallel Debt or the Pledgee shall have otherwise
received monies in payment of the Parallel Debt,
subject to sub-paragraph (C) above the total amount
due and payable under the Principal Obligations shall
be decreased as if the amounts were received directly
in payment of the Principal Obligations in accordance
with Clause 21.15.
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21.15 APPLICATION OF PROCEEDS
Except to the extent otherwise provided in any Finance Document,
proceeds received by the Agent or by any other receiver pursuant to or
in connection with any Finance Document shall be applied as follows:
(A) first, in or towards payment of any sum then due and payable
under any Finance Document to the Agent for its own account;
(B) secondly, in or towards payment of any costs and expenses then
due and payable by the Borrower or the Guarantor to any of the
Lenders under any of the Finance Documents;
(C) thirdly, in or towards payment of any interest and/or facility
fee which is then due and payable;
(D) fourthly, in or towards repayment of any principal sum then
due for repayment hereunder; and
(E) fifthly, after all amounts payable under the Finance Documents
have been paid in full, in or towards payment of the surplus,
if any, to the Borrower, the Guarantor or to such other
persons entitled thereto.
22. EVIDENCE, CERTIFICATES AND DETERMINATIONS
22.1 EVIDENCE OF DEBT
The Agent will maintain in its books an account showing all liabilities
accrued and payments made in relation to the Facility. Details of
amounts outstanding recorded in this account will be evidence of the
Borrower's obligations unless there is shown to be an error.
22.2 CERTIFICATES AND DETERMINATIONS
Any certificate or determination relating to a Finance Document must
contain reasonable detail of the matter being certified or determined.
Certificates and determinations produced by a Lender or the Agent will
be conclusive unless there is an obvious error.
23. NOTICES
23.1 NATURE OF NOTICES
No notice delivered under a Finance Document may be withdrawn or
revoked. Each notice delivered by the Borrower or the Guarantor must be
unconditional. It must also be signed by an Authorised Person.
23.2 DELIVERY OF NOTICES
A notice under a Finance Document will be effective only if it is in
writing and is received. Telexes and faxes are permitted.
23.3 NOTICES THROUGH THE AGENT
Each notice from the Borrower or the Guarantor or a Lender will be
delivered to the Agent. The Agent agrees to pass on the details of
notices received by it to the appropriate recipient as soon as
reasonably practicable.
23.4 COMMUNICATION IN ENGLISH
All notices and other documents delivered under the Finance Documents
must be in English or, if not, accompanied by a
48
translation into English certified by an officer of the Borrower to be
accurate. Translation costs are for the account of the Borrower.
23.5 ADDRESS DETAILS
Notices will be delivered to the address of the intended recipient as
set out on the signature page. The Borrower or the Guarantor or a
Lender may change its address details by notice to the Agent. The Agent
may change its address details by notice to the Borrower and the
Lenders.
24. ASSIGNMENT AND NOVATION
24.1 THE BORROWER
The rights of the Borrower under this Agreement are personal to it.
Accordingly they are not capable of assignment.
24.2 ASSIGNMENT BY A LENDER
A Lender may assign its rights under this Agreement in whole or part if
it obtains the prior written consent of the Guarantor (acting on its
own behalf and on behalf of the Borrower) in advance (this consent not
to be unreasonably withheld or delayed). The principal amount to be
assigned (or, in the case of an amount in the Optional Currency, the
Original Euro Amount) must equal or exceed euros 5,000,000. The
Borrower irrevocably authorises the Guarantor to consent on its behalf.
If the Guarantor does not reply to a request for consent within 15
Business Days, it will be treated as having given its consent. Neither
the Agent nor any Lender will be obliged to treat any person to whom a
Lender makes an assignment as an assignee until that person:
(A) agrees that it will be under the same obligations as it would
have been if it had been a party to the Agreement; and
(B) agrees to pay to the Agent the fee mentioned in Clause
24.3(D).
24.3 NOVATION BY A LENDER
A Lender (the "Existing Lender") may be released from its obligations
and surrender its rights under this Agreement to the extent that
exactly corresponding obligations and rights are assumed by another
lender (the "New Lender") in accordance with the following:
(A) The principal amount to be novated (or, in the case of an
amount in an Optional Currency, the Original Euro Amount) must
equal or exceed euros 5,000,000.
(B) The Existing Lender must obtain the prior written consent of
the Guarantor (acting on its own behalf and on behalf of the
Borrower) to the proposed novation (this consent not to be
unreasonably withheld or delayed). The Borrower irrevocably
authorises the Guarantor to consent on its behalf. If the
Guarantor does not reply to a request for consent within 15
Business Days it will be treated as having given its consent.
(C) Once the Guarantor's written consent is obtained, or treated
as obtained, the Existing Lender will deliver to the Agent a
Substitution Certificate. This must be signed by both the
Existing Lender and the New Lender and be properly completed.
It must have attached to it one of the following:
49
(i) The Guarantor's consent.
(ii) The Existing Lender's request for a consent and a
certificate of an officer of the Existing Lender to
the effect that no reply was received within 15
Business Days.
(D) The Existing Lender will also arrange for the payment of a
processing fee to the Agent. The amount of this fee is euros
750 (plus any
reasonable expenses) unless the Agent has notified the Lenders
of a different amount which has been agreed with an
Instructing Group.
(E) The Agent will sign the Substitution Certificate no later than
five Business Days after its receipt and the payment of the
processing fee. This signature will be made on behalf of the
other Lenders, the Guarantor and the Borrower as well as
itself. Each Lender, the Guarantor and the Borrower
irrevocably authorise the Agent to sign in this manner.
(F) The Substitution Certificate will take effect on the date it
specifies. On this date:
(i) The Existing Lender is released from its obligations
to and surrenders its rights against any other party
to the Finance Documents in respect of the Finance
Documents to the extent described in the Certificate.
(ii) The New Lender assumes obligations to and rights
against any other party to the Finance Documents in
respect of the Finance Documents exactly corresponding
to those released and surrendered by the Existing
Lender.
The Commitment of the Existing Lender will be reduced accordingly and
the New Lender will assume a Commitment of the amount of the
corresponding reduction.
24.4 DISCLOSURE OF INFORMATION
A Lender may disclose to an assignee, sub-participant, or New Lender,
or to a proposed assignee, sub-participant or New Lender, any
information received by the Lender under or in connection with a
Finance Document, including a copy of a Finance Document. However,
where that information is not publicly available, and where the person
to whom the information is to be disclosed is not an Affiliate of the
Lender, the Lender must first obtain the consent of the Guarantor
(acting on its own behalf and on behalf of the Borrower) to the
disclosure of the information. The Guarantor may not unreasonably
withhold or delay giving its consent.
24.5 LIMITATION
If, at the time of any assignment or novation by a Lender or any change
of office through which a Lender or the Agent is acting for the purpose
of this Agreement, circumstances exist which would oblige the Borrower
or the Guarantor under Clauses 11.1, 11.2 or 11.4 to pay to the
assignee or the New Lender or, in the case of a change of office, the
Lender or the Agent any sum in excess of the sum (if any) which it
would have been obliged to pay to the Lender or the Agent under the
relevant Clause in the absence of that assignment, novation or change,
the Borrower or, as the case may be, the Guarantor shall not be obliged
to pay the excess.
50
25. WAIVERS AND AMENDMENTS
25.1 WRITING REQUIRED
A waiver or amendment of a term of a Finance Document will be effective
only if it is in writing.
25.2 AUTHORITY OF THE AGENT
If authorised by an Instructing Group, the Agent may grant waivers and
agree amendments with the Borrower. These waivers and amendments will
be granted on behalf of the Lenders and be binding on all of them,
including those which were not part of the Instructing Group, and the
Guarantor. This sub-clause does not authorise the Agent to grant any
waiver or agree any amendment affecting any of the following:
(A) The amount of the Facility or any release of the Guarantee.
(B) The amount or method of calculation of interest or facility
fee.
(C) The manner, currency, amount or timing of repayment of the
Loan or of the payment of any other amount.
(D) The end of the period during which the Facility is available.
(E) The definitions of "Borrowed Monies Indebtedness" and
"Instructing Group".
(F) The obligations of the Lenders or the Agent.
(G) Any requirement (including the one in this sub-clause) that
all the Lenders or a certain proportion of them consent to a
matter or deliver a notice.
(H) Clauses 3, 14, 15, 16, 21, 24.1, 26.3 or this Clause 25.
(I) The Charges and, without prejudice to any provision set out in
the Charges relating to releases, amendments or waivers, the
release of the Security constituted by the Charges.
Waivers or amendments affecting these matters require the consent of
all Lenders and, notwithstanding the above, any amendment or waiver
affecting the Agent's rights requires the consent of the Agent.
25.3 EXPENSES
The Borrower agrees to reimburse the Agent and each Lender for any
reasonable expenses they incur as a result of any proposal made by the
Borrower or the Guarantor to waive or amend a term of a Finance
Document.
26. MISCELLANEOUS
26.1 EXERCISE OF RIGHTS
If the Agent or a Lender does not exercise a right or power when it is
able to do so this will not prevent it exercising that right or power.
When it does exercise a right or power it may do so again in the same
or a different manner. The Agent's and the Lenders' rights and remedies
under this Agreement are in addition to any other rights and remedies
they may have. Those other rights and remedies are not affected by this
Agreement.
51
26.2 COUNTERPARTS
There may be several signed copies of this Agreement. There is intended
to be a single Agreement and each signed copy is a counterpart of that
Agreement.
26.3 RELEASE, SUPPLEMENTATION AND SUBSTITUTION OF SECURITY INTERESTS
(A) RELEASE: The Agent and the Lenders agree to take all steps
promptly to release the Security comprised by or contemplated
in the Charges after the date on which all collateral under
the Guarantor's Revolving Credit Agreement is released (in
accordance with Section 2.17(a) thereof) from the Security
created in accordance with the Guarantor's Revolving Credit
Agreement.
(B) SUPPLEMENTAL SECURITY:
(i) The Borrower may request the Agent to accept
additional collateral (in the form of rights, assets
or property of any kind) in order to secure the
obligations of the Borrower and the Guarantor under
this Agreement (whether or not such request is made in
conjunction with a request to amend Clause 6.2 of this
Agreement).
(ii) The Agent agrees it will accede to the Borrower's
request if an Instructing Group has given its consent
(not to be unreasonably withheld or delayed).
An Instructing Group may, as a condition to giving its
consent, require the Borrower to ensure that new
Security or a guarantee is given. In this event, the
Borrower agrees to ensure that:
(a) it, or any other entity nominated by it, duly
executes and delivers a document creating such
new Security (which document will be a "Charge"
for the purposes of this Agreement) or such
guarantee (which document will be "an additional
guarantee"); and
(b) there is delivered to the Agent evidence
reasonably satisfactory to the Agent that any
document referred to in sub-paragraph (a) is
valid and binding on the party or parties
executing and delivering it. This evidence may
include certified copies of the constitutional
documents and authorising resolutions of the
relevant party and a legal opinion.
(C) SUBSTITUTION:
(i) The Borrower may request the Agent to release certain
of the Charges or all or part of the rights and other
assets subject to the Security constituted by the
Charges.
(ii) The Agent agrees to release the relevant Charge or
Charges (in whole or in part) if an Instructing Group
has given its consent (not to be unreasonably withheld
or delayed). In deciding whether or not to give its
consent under this sub-paragraph (ii) each Lender will
take into account any reduction that has been, or is
due to be, made in the Total Commitments (whether
under Clause 5 or otherwise).
52
Unless the Borrower has otherwise provided evidence
satisfactory to the Agent and an Instructing Group
that a release of a Charge (or any part of the rights
and other assets thereby constituted) does not, taking
account of Clause 6.2 and the Borrower's obligations
under this Agreement, require the provision of
alternative security or a guarantee, an Instructing
Group may, as a condition of giving its consent,
require the Borrower to ensure that alternative
Security or a guarantee is created in place of any
Security it agrees to release. In this event, the
Borrower agrees to ensure that:
(a) it, or any other entity nominated by it, duly
executes and delivers a document creating such
alternative Security (which document will be a
"Charge" for the purpose of this Agreement) or
such guarantee (which document will be an
"Additional Guarantee"); and
(b) there is delivered to the Agent evidence
reasonably satisfactory to the Agent that any
document referred to in sub-paragraph (a) is
valid and binding on the party or parties
executing and delivering it. This evidence may
include certified copies of the constitutional
documents and authorising resolutions of the
relevant party and a legal opinion.
(D) RELEASE OF SECURITY AND REDUCTION OF BORROWING BASE:
(i) In addition to its rights under Clause 26.3(C), the
Borrower may notify the Agent that it requires a
Charge to be released or that it requires all or part
of the rights and other assets subject to the Security
constituted by a Charge (the "Relevant Secured
Rights") to be released from the Security so
constituted.
(ii) If sub-paragraph (i) applies, the Agent agrees
promptly (after consulting with the Borrower as to
timing) to take all steps (including executing any
instrument of release) to release the relevant Charge
or release the Relevant Secured Rights from the Charge
or Charges to which these Relevant Secured Rights are
subject. In this event, the Borrowing Base Amount for
the relevant period in which the release occurs will
be reduced by the value (calculated in accordance with
generally accepted accounting principles in the
jurisdiction concerned) of the Inventory and
Receivables which have been so released with effect
from the date of the relevant release. The Agent will
notify the Lenders of the amount by which the
Borrowing Base Amount for the relevant period has been
reduced. The Agent may rely on a certificate of an
Authorised Person of the Borrower in order to
ascertain the value of the Inventory and receivables
which are subject to the Security so released.
(iii) If as a result of the Borrower making a request under
sub-paragraph (i), the Loan will be greater than the
Borrowing Base Amount on the date of the relevant
release, the Agent will only be obliged to grant this
release if, on the same date, the Borrower makes a
prepayment or repayment of an amount which is at least
the amount by which the Loan exceeds the Borrowing
Base Amount. Clause 11.9 applies to any prepayment
under this sub-paragraph.
(iv) The Borrower agrees to reimburse the Agent for the
reasonable amount of any expenses (including any legal
fees) incurred by the Agent as a result of it
complying with its obligations under this Clause
26.3(D).
53
(v) The Borrower may make more that one request under this
Clause 26.3(D).
27. LAW AND JURISDICTION
27.1 LAW
This Agreement is to be governed by and construed in accordance with
English law.
27.2 JURISDICTION
The English courts are to have jurisdiction to settle any disputes in
connection with the Finance Documents. This submission is irrevocable
and is for the exclusive benefit of the Lenders, the Co-arrangers and
the Agent. It does not prevent proceedings being commenced by any
Lender, any Co-arranger or the Agent in the courts of any other country
or, subject to applicable law, in the courts of more than one country
at the same time. In particular, the Borrower and the Guarantor consent
to proceedings being brought in the courts of the State of New York.
The Borrower and the Guarantor irrevocably submit to the jurisdiction
of the courts of the State of New York. This consent is intended to be
irrevocable under the laws of the State of New York. The Borrower and
the Guarantor also irrevocably waive any objection to proceedings in
any court mentioned in this sub-clause on the ground of FORUM NON
CONVENIENS or any other ground. They also irrevocably agree that a
judgment in any proceedings brought in any court mentioned in this
sub-clause will be conclusive and binding on them and may be enforced
in any other court.
27.3 GUARANTOR'S AGENT FOR THE SERVICE OF PROCESS IN ENGLAND AND WALES
The Guarantor irrevocably appoints the Borrower to be its agent for the
service of process in England and Wales. The Borrower hereby accepts
this appointment. Any documentation in connection with proceedings in
England and Wales may be delivered to this agent and in that case will
be treated as delivery to the Guarantor.
54
SCHEDULE 1 : LENDERS AND COMMITMENTS
COMMITMENT
LENDER (IN EUROS)
----------------- ------------
ABN AMRO BANK N.V. 40,000,000
Deutsche Bank AG 32,500,000
----------
72,500,000
55
SCHEDULE 2 : CONDITIONS PRECEDENT
1. A copy of the Memorandum and Articles of Association of the Borrower.
This copy must be certified by a director or the secretary of the
Borrower to be complete, up-to-date and in full force and effect.
2. A copy of the constitutional documents of the Guarantor. This copy must
be certified by a director, or the secretary or assistant secretary of
the Guarantor to be complete, up-to-date and in full force and effect.
3. A copy of a resolution of the board of directors of the Borrower
approving the Facility, authorising the signature and delivery of this
Agreement and approving the borrowing of the Total Commitments and the
execution and delivery of the Charges to which it is a party. The
resolution must also appoint persons to sign notices on behalf of the
Borrower under this Agreement. The copy must be certified by a director
or the secretary of the Borrower to be a true copy of a duly passed
resolution which is in full force and effect.
4. A copy of a resolution of the executive committee of the board of
directors of the Guarantor approving the giving of the Guarantee, and
authorising the signature and delivery of this Agreement. The
resolution must also appoint persons to sign notices on behalf of the
Guarantor under this Agreement. The copy must be certified by a
director or the secretary or the assistant secretary of the Guarantor
to be a true copy of a duly passed resolution which is in full force
and effect.
5. A copy of the constitutional documents of:
(A) Polaroid Nederland B.V.;
(B) Polaroid Contracting C.V. (that is, the association
agreement);
(C) PRD Management Limited;
(D) PRD Overseas Limited; and
(E) Polaroid GmbH.
In each case, these constitutional documents must be certified by a
director, secretary, assistant secretary or other officer of the
relevant entity or (if appropriate in the jurisdiction concerned) its
shareholders to be complete, up-to-date, and in full force and effect.
6. A copy of a resolution of the directors, or other evidence of corporate
authority appropriate in the jurisdiction concerned, approving the
execution and delivery of the Charges to which it is a party in respect
of:
(A) Polaroid Nederland B.V.;
(B) PRD Management Limited;
(C) PRD Overseas Limited; and
(D) Polaroid GmbH.
7. A certificate of a director or other officer of the Borrower to the
effect that utilisation of the Facility in full will not cause the
56
Borrower or its directors to be in default of any limit on borrowing.
8. A certificate of a director or other officer of the Guarantor to the
effect that the giving of the Guarantee will not cause the Guarantor or
its directors to be in default of any limit on giving guarantees.
9. Specimen signatures of all persons authorised by the resolutions
referred to in paragraphs 3 and 4 above. These signatures must be
certified by a director, the secretary or the assistant secretary of
the appointing body to be genuine.
10. Certified copies of executed commissionaire agreements entered into
between the Borrower and each of the following:
(A) Polaroid Nederland B.V.;
(B) Polaroid Trading B.V.;
(C) Polaroid GmbH;
(D) Polaroid (France) S.A.;
(E) Polaroid Italia S.p.A.;
(F) Polaroid (Espana) S.A.;
(G) Polaroid Gesellschaft m.b.h.;
(H) Polaroid Belgium SA;
(I) Polaroid A/S;
(J) Polaroid (Norge) A/S;
(K) Polaroid Aktiebolag; and
(L) Polaroid AG.
11. Certified copies of the transitional commissionaire agreements entered
into between the Borrower and, with the exception of Polaroid GmbH and
Polaroid Italia S.p.A., the companies listed in paragraph 10 above.
12. Evidence satisfactory to the Agent that the following have been duly
executed:
(A) the Floating Charge;
(B) the Pledge of Inventory;
(C) the Pledge of Inter-company Receivables;
(D) the Pledge of Polaroid Nederland Receivables;
(E) the Assignment of German Receivables; and
(F) the Massachusetts Security Agreement.
13. Legal opinions from:
(A) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Bermudan legal advisers to the
Borrower;
(B) Hengeler ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, German legal advisers to the
Borrower;
57
(C) Loeff ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Netherlands legal advisers to the
Borrower;
(D) General counsel for Polaroid Corporation, in relation to the
obligations of the Guarantor under this Agreement;
(E) ▇▇▇▇▇▇▇ ▇▇▇▇, legal advisers to the Borrower in the State of
Massachusetts, USA;
(F) ▇▇▇▇▇▇▇▇▇ and May, English legal advisers to the Borrower; and
(G) ▇▇▇▇▇▇ ▇▇▇▇▇▇ & Spens, Scottish legal advisers to the
Borrower.
14. The quarterly balance of Inventory and Receivables for the financial
quarter ending 30th June, 1999.
15. A copy of the filing to be made under the Uniform Commercial Code in
the State of Massachusetts in respect of the Borrower's Inventory
signed by the Borrower.
16. A copy of the letter from the Guarantor to the Agent referred to in
Clause 17.1(L)(i).
58
SCHEDULE 3 : FORM OF NOTICE FOR AN ADVANCE
To: [Name of Agent]
Attention: [ ]
From: Polaroid (U.K.) Limited
Date: [ ]
Dear Sirs,
EUROS 72,500,000 CREDIT FACILITY UNDER LOAN AGREEMENT
DATED 3RD AUGUST, 1999
1. We refer to the above agreement between yourselves as Agent, us as
Borrower and various other parties (the "Agreement"). Terms defined in
the Agreement have the same meaning in this notice.
2. We would like to draw an Advance under the Agreement as follows:
(a) Currency .......................
(b) Amount .........................
(c) Advance Date ...................
(d) Term ...........................
3. Please pay the above Advance to account number [ ] with
[ ].
4. We confirm that, today and on the Advance Date:
(a) the representations in Clause 17.1 of the Agreement [(other
than paragraphs (C), (E) and (K))]* are true, and
(b) [there is and will be no outstanding Termination Event or
Potential Termination Event.]**
Yours faithfully,
for and on behalf of
POLAROID (U.K.) LIMITED
------------------------
* The representations in paragraphs (C), (E) and (K) are only given on the date
of the first Advance under this Agreement.
** This statement is not to be included in circumstances where Clause 6.8
applies.
59
SCHEDULE 4 : FORM OF SUBSTITUTION CERTIFICATE
POLAROID (U.K.) LIMITED
EUROS 72,500,000 CREDIT FACILITY UNDER LOAN AGREEMENT DATED 3RD AUGUST, 1999
SUBSTITUTION CERTIFICATE
To: [Name and address of the Agent]
This Certificate is delivered to you for the purposes of Clause 24.3 of
the above Agreement (the "Agreement") under which you are currently
Agent. Terms defined in the Agreement have the same meaning in this
Certificate.
Name of Existing Lender: ____________________________
Name of New Lender: ____________________________
Details of substitution:
[Insert details distinguishing between undrawn Commitment and
participation in the Loan and other amounts due under the Facility]
Date of effect of substitution: ____________________
The substitution described above will take effect in accordance with
Clause 24.3 of the Agreement.
The Existing Lender and the New Lender agree as follows:
1. The New Lender is responsible for its own decision to become involved
in the Facility. It should make its own credit appraisal of the
Borrower and the Guarantor and the terms of the Facility. Neither the
Existing Lender nor the Agent makes any representation that any
information provided to the New Lender before, on or after the date of
this Certificate is true. Accordingly the New Lender should take
whatever action it believes is necessary to verify that information. In
addition neither the Existing Lender nor the Agent is responsible for
the legality, validity or adequacy of the Agreement. The New Lender
will satisfy itself on these issues.
2. There is no obligation on the Existing Lender to accept any novation or
assignment back of the rights and obligations referred to in this
certificate. The Existing Lender accepts no obligation to indemnify the
New Lender for any losses incurred as a result of a failure by the
Borrower or the Guarantor to perform its obligations or for any other
losses. The New Lender acknowledges this is the case.
Attached to this Certificate is one of the following:
(i) The Guarantor's consent.
(ii) The Existing Lender's request for a consent and a certificate
of an officer of the Existing Lender to the effect that no
reply was received within 15 Business Days.
The New Lender confirms that it is a Qualifying Bank.
This Certificate is to be governed by and construed in accordance with
English law.
60
EXISTING LENDER NEW LENDER
[Name of Existing Lender] [Name of New Lender]
By: By:
AGENT (on behalf of the other Lenders, the Borrower, the Guarantor and
itself)
[Name of Agent]
By:
DATE:
Notice details for New Lender
(if it is not already a
Lender):
Address:
Fax Number:
Telex Number:
Attention:
61
SCHEDULE 5 : PRICING SCHEDULE
1. The "Applicable Margin" and "Facility Fee Rate" for any day
are the rates per annum set out below in the applicable row in
the column corresponding to the Pricing Level that applies on
such day in accordance with paragraph 2:
----------------- ------------ ----------- ----------- ----------- ----------- ----------- ------------
Level I ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇
----------------- ------------ ----------- ----------- ----------- ----------- ----------- ------------
Applicable 0.440% 0.475% 0.500% 1.475% 1.750% 2.250% 2.500%
Margin
----------------- ------------ ----------- ----------- ----------- ----------- ----------- ------------
Facility Fee 0.085% 0.100% 0.125% 0.275% 0.500% 0.500% 0.750%
Rate
----------------- ------------ ----------- ----------- ----------- ----------- ----------- ------------
2. For each day, the applicable "Pricing Level" will be
determined on the basis of the following definitions:
"Level I Pricing" will apply on any day if, on that day, the
Guarantor's Long-Term Debt Ratings are (i) A- or higher by S&P
and Baa1 or higher by ▇▇▇▇▇'▇ or (ii) BBB+ by S&P and A3 or
higher by ▇▇▇▇▇'▇.
"Level II Pricing" will apply on any day if, on that day, the
Guarantor's Long-Term Debt Ratings are BBB+ by S&P or Baa1 by
▇▇▇▇▇'▇ and "Level I Pricing" does not apply.
"Level III Pricing" will apply on any day if, on that day, the
Guarantor's Long-Term Debt Ratings are BBB by S&P or Baa2 by
▇▇▇▇▇'▇.
"Level IV Pricing" will apply on any day if, on that day, (i)
the Guarantor's Long-Term Debt Ratings are BBB- or higher by
S&P and Baa3 or higher by ▇▇▇▇▇'▇ and (ii) no lower Pricing
Level applies.
"Level V Pricing" will apply on any day if, on that day, (i)
the Guarantor's Long-Term Debt Ratings are BB+ or higher by
S&P and Ba1 or higher by ▇▇▇▇▇'▇ and (ii) no lower Pricing
Level applies.
"Level VI Pricing" will apply on any day if, on that day (i)
the Guarantor's Long-Term Debt Ratings are BB or higher by S&P
and Ba2 or higher by ▇▇▇▇▇'▇ and (ii) no lower Pricing Level
applies.
"Level VII Pricing" will apply on any day if, on that day, no
other Pricing Level applies.
3. In this Schedule:
"Long-Term Debt Rating" means at any time:
(i) with respect to ▇▇▇▇▇'▇, its company rating of the
Guarantor at such time or, if ▇▇▇▇▇'▇ does not
maintain a company rating of the Guarantor at such
time, the rating assigned by ▇▇▇▇▇'▇ at such time to
the senior unsecured long-term debt securities of the
Guarantor without third-party credit enhancement; and
62
(ii) with respect to S&P, its corporate credit rating of
the Guarantor at such time or, if S&P does not
maintain a corporate credit rating of the Guarantor at
such time, the rating assigned by S&P at such time to
the senior unsecured long-term debt securities of the
Guarantor without third-party credit enhancement.
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investors Services, Inc. and its
successors.
"Pricing Level" means any one of the seven pricing levels
represented by Level I Pricing, Level II Pricing, Level III
Pricing, Level IV Pricing, Level V Pricing, Level VI Pricing
and Level VII Pricing. For purposes of this Pricing Schedule,
Level I Pricing is the lowest Pricing Level and Level VII
Pricing is the highest Pricing Level.
"S&P" means Standard & Poor's Ratings Services, a division of
The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and its successors.
4. For purposes of this Schedule, the Long-Term Debt Ratings in
effect on any day are the Long-Term Debt Ratings in effect at
the close of business that day.
63
SCHEDULE 6:
FORM OF ADDITIONAL LENDER ACCESSION AGREEMENT
ADDITIONAL LENDER ACCESSION AGREEMENT
DATE:
PARTIES:
1. [ ], of [address] (the "Additional Lender")
2. POLAROID CORPORATION, a company incorporated in the United States of
America of ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇▇, on its own behalf and
on behalf of the Borrower (as defined in the Loan Agreement referred to
below)
3. DEUTSCHE BANK AG, AMSTERDAM (the "Agent"), on its own behalf and on
behalf of each of the Lenders (as defined in the Loan Agreement)
BACKGROUND
A Loan Agreement (the "Loan Agreement") was made on 3rd August, 1999
between (1) Polaroid (U.K.) Limited as borrower, (2) Polaroid
Corporation as guarantor, (3) the lenders named in the Loan Agreement,
(4) Deutsche Bank AG, Amsterdam as Agent, (5) Deutsche Bank Securities
Inc. and ABN AMRO BANK N.V. as co-arrangers and ABN AMRO BANK N.V. as
documentation agent. Under the terms of the Loan Agreement the Lenders
agreed to provide to the Borrower a euros 72,500,000 credit facility.
Under Clause 3.4 of the Loan Agreement the Additional Lender is able to
become a lender under the Loan Agreement.
The parties agree as follows:
1. INTERPRETATION
Unless a contrary intention is indicated, words and expressions defined
in the Loan Agreement will have the same meanings when used in this
Agreement. References to the Loan Agreement are to that agreement as
amended or supplemented.
2. CONFIRMATION FROM ADDITIONAL LENDER
The Additional Lender confirms that it is a Qualifying Bank.
3. INCORPORATION OF ADDITIONAL LENDER
With effect from [insert date] [the date of this Agreement]* :
(a) the Additional Lender will become a party to the Loan
Agreement as if it had been an original signatory as a lender;
(b) the Additional Lender will become a "Lender" within the
definition in Clause 1.1 of the Loan Agreement; and
------------------
* Delete as appropriate
64
(c) Schedule 1 to the Loan Agreement will be replaced by the form
of schedule set out as Part I of the Schedule to this
Agreement and the amendments to the Loan Agreement set out in
Part II of the Schedule to this Agreement shall take effect.
The Additional Lender, the Borrower, the Guarantor, each Lender and the
Agent agrees to be bound by the Loan Agreement on this basis.
4. CONSTRUCTION
This Agreement and the Loan Agreement will be read and construed as one
document. References in the Loan Agreement to the Loan Agreement
(however expressed) will be read and construed as references to the
Loan Agreement and this Agreement.
5. NOTICES
The notice details of the Additional Lender for the purpose of Clause
23.5 are as follows:
[ ]
Fax number: [ ]
Telex number: [ ]
Attention: [ ]
6. LAW
This Agreement is to be governed by and construed in accordance with
English law.
7. JURISDICTION
(A) The English courts are to have jurisdiction to settle any
disputes in connection with this Agreement. This submission is
irrevocable and is for the exclusive benefit of the Lenders
and the Agent. It does not prevent proceedings being commenced
by any Lender or the Agent in the courts of any other country
or, subject to applicable law, in the courts of more than one
country at the same time. In particular, the Borrower and the
Guarantor consent to proceedings being brought in the courts
of the State of New York. The Borrower and the Guarantor
irrevocably submit to the jurisdiction of the courts of the
State of New York. This consent is intended to be irrevocable
under the laws of the State of New York. The Borrower and the
Guarantor also irrevocably waive any objection to proceedings
in any court mentioned in this sub-clause on the ground of
FORUM NON CONVENIENS or any other ground. They also
irrevocably agree that a judgment in any proceedings brought
in any court mentioned in this sub-clause will be conclusive
and binding on them and may be enforced in any other court.
(B) The Guarantor irrevocably appoints the Borrower to be its
agent for the service of process in England and Wales. Any
documentation in connection with proceedings in England and
Wales may be delivered to this agent and in that case will be
treated as delivery to the Guarantor.
8. COUNTERPARTS
There may be several signed copies of this Agreement. There is intended
to be a single Agreement and each signed copy is a counterpart of that
Agreement.
65
SIGNATURES
[Name of Additional Lender]
By:
Polaroid Corporation (on behalf of
the Borrower and itself)
By:
[Name of Agent]
(on behalf of the other Lenders and itself)
By:
66
SCHEDULE TO ADDITIONAL LENDER ACCESSION AGREEMENT
PART I : REVISED FORM OF SCHEDULE 1 TO THE LOAN AGREEMENT
LENDER COMMITMENT
66
PART II : AMENDMENTS TO BE MADE TO THE LOAN AGREEMENT
The figure euros [ ]* will be replaced by the figure euros [ ]* in each
place in which it appears in the Loan Agreement, that is:
1. the front cover;
2. the background section on page 1;
3. Clause 2.1;
4. the heading of Schedule 3; and
5. the heading of Schedule 4.
------------------
* Insert relevant figures.
68
SIGNATURES
BORROWER
POLAROID (U.K.) LIMITED
Address: ▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇.▇.,
▇/▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇ ▇▇ Enschede,
▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇.
Fax Number: ▇▇▇ ▇▇ ▇ ▇▇▇ ▇▇▇
Tel. Number: ▇▇▇ ▇▇ ▇ ▇▇▇ ▇▇▇
Attention: Bart van Silfhout, Director of International Banking
WITH A COPY TO:
POLAROID CORPORATION
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇.
Fax Number: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Tel. Number: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President and Treasurer
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
DIRECTOR
GUARANTOR
POLAROID CORPORATION
Address: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇.
Fax Number: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Tel. Number: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Vice President and Treasurer
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
69
CO-ARRANGERS AND DOCUMENTATION AGENT
DEUTSCHE BANK SECURITIES INC. (as Co-arranger)
By: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
DIRECTOR MANAGING DIRECTOR
ABN AMRO BANK N.V. (as Co-arranger and Documentation Agent)
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇
GROUP VICE PRESIDENT VICE PRESIDENT
LENDERS
ABN AMRO BANK N.V., LONDON BRANCH
Address: ▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Fax Number: ▇▇▇ (▇) ▇▇▇ ▇▇▇ ▇▇▇▇
Tel. Number: ▇▇▇ (▇) ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
DEUTSCHE BANK AG, LONDON BRANCH
Address: ▇ ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Fax Number: ▇▇▇ (▇) ▇▇▇ ▇▇▇ ▇▇▇▇
Tel. Number: ▇▇▇ (▇) ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ TWINDALE
AGENT
DEUTSCHE BANK AG, AMSTERDAM BRANCH
Address: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇.
Fax Number: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Tel. Number: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇ ▇▇▇ van Zuidewijn
By: ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇