EXHIBIT 10.17
CONFORMED COPY
DATED 15 NOVEMBER 2001
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DDI EUROPE LIMITED
(formerly known as MCM ELECTRONICS LIMITED)
- and -
THE ADDITIONAL BORROWERS NAMED HEREIN
- and -
THE OTHER CHARGING COMPANIES NAMED HEREIN
- and -
THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
(in its various capacities as the Arranger, the Agent, the Security Trustee,
the Bank and the Working Capital Bank)
----------------------------------------------------
AMENDMENT AND RESTATEMENT DEED
relating to a Facilities Agreement dated 27 May
1999
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CONTENTS
1. INTERPRETATION........................................................................................2
2. EFFECTIVE DATE........................................................................................2
3. AMENDMENT AND RESTATEMENT OF FACILITIES AGREEMENT AND CANCELLATION OF ORIGINAL
WORKING CAPITAL FACILITY.............................................................................2
4. CONFIRMATION..........................................................................................2
5. REPRESENTATIONS AND WARRANTIES........................................................................2
6. EXPENSES..............................................................................................2
7. MISCELLANEOUS.........................................................................................3
SCHEDULE 1.................................................................................................4
Amended and Restated Facilities Agreement.............................................................4
SCHEDULE 2...............................................................................................104
Conditions Precedent................................................................................104
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THIS DEED is made on 15 November 2001
BETWEEN
(1) DDI EUROPE LIMITED (formerly known as MCM ELECTRONICS LIMITED) (registered
in England and Wales under company number 3731403) ("Principal Borrower");
(2) DDI GROUP LIMITED (Registered No.:445250), CLASSICAL CIRCUITS LIMITED
(Registered No.:1034995), DDI TECHNOLOGIES LIMITED (Registered No.:
1336602), PRETAN ENGINEERING LIMITED (Registered No.: 2407995), INTEGRATED
DESIGNS & SYSTEMS LIMITED (Registered No.: 2624416), DYNAMIC DETAILS
LIMITED (Registered No.: 3232495), ZLIN ELECTRONICS LIMITED (Registered
No.: 1338479), DDI PRECISION LIMITED (Registered No.:2900127), DDI
INTERNATIONAL LIMITED (Registered No.: 3328896), DDI SALES LIMITED
(Registered No.: 3292688) and ▇▇▇▇▇▇ ▇▇▇▇▇▇ LIMITED (Registered No.:
1415705) (the "Additional Borrowers" and together with the Principal
Borrower, the "Borrowers");
(3) DDI GROUP LIMITED, CLASSICAL CIRCUITS LIMITED, DDI TECHNOLOGIES LIMITED,
PRETAN ENGINEERING LIMITED, INTEGRATED DESIGNS & SYSTEMS LIMITED, DYNAMIC
DETAILS LIMITED, ZLIN ELECTRONICS LIMITED, DDI PRECISION LIMITED, DDI
INTERNATIONAL LIMITED, DDI SALES LIMITED, BWMP (HOLDINGS) LIMITED, REDLAB
LIMITED, KRIZANTEM LIMITED and ▇▇▇▇▇▇ ▇▇▇▇▇▇ LIMITED (the "Other Charging
Companies" and, together with the Principal Borrower, the "Charging
Companies");
(4) THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as arranger (the
"Arranger");
(5) THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as agent for the Senior
Lenders (the "Agent");
(6) THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as Security Trustee for
the Security Beneficiaries (the "Security Trustee");
(7) THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND and any other bank which
has a Participation in the Term Loan Facility (the "Banks"); and
(8) THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as provider of the Working
Capital Facility (the "Working Capital Bank").
WHEREAS:
A. By a facilities agreement dated 27 May 1999 made between the Principal
Borrower and The Governor and Company of the Bank of Scotland (in its
various capacities) (the "Facilities Agreement"), it agreed to make
available certain term loan facilities on the terms and conditions of the
Facilities Agreement.
B. The Additional Borrowers subsequently acceded to the Facilities Agreement
and each became a Borrower (as defined in the Facilities Agreement).
C. The parties to the Facilities Agreement have agreed to amend and restate
the terms of the Facilities Agreement upon the terms set out below, to
repay the Original Working Capital Facility and cancel the Original Working
Capital Facility Letter and to enter into the 2001 Working Capital Facility
Letter.
IT IS AGREED as follows:
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1. INTERPRETATION
1.1. In this Deed (including the recitals) words and expressions defined in
the Facilities Agreement (as amended and restated by this Deed) shall
(unless otherwise defined) have the same meanings when used in this
Deed; and
"2001 Debenture" means the composite guarantee and debenture in the
agreed terms to be entered into by all the Charging Companies in
favour of the Security Trustee as trustee for the Security
Beneficiaries on or before the date first written above; and
"Effective Date" means the date upon which all of the conditions in
referred to in the first sentence of Clause 2 have been satisfied or
waived by the Agent.
1.2. The interpretation section of Clause 1.2 of the Facilities Agreement
(as amended and restated by this Deed) shall be included in this Deed,
subject to necessary changes.
2. EFFECTIVE DATE
Notwithstanding any other provisions of this Deed, this Deed (other than
Clause 6) shall have no effect unless the Agent shall have received (or
waived the receipt of) each of the documents referred to in Schedule 2 in
form and substance satisfactory to it.
3. AMENDMENT AND RESTATEMENT OF FACILITIES AGREEMENT AND CANCELLATION OF
ORIGINAL WORKING CAPITAL FACILITY
3.1 With effect from the Effective Date the Facilities Agreement shall be
amended and restated so as to take effect in the form set out in
Schedule 1 to this Deed.
3.2 The Borrowers agree that the Original Working Capital Facility has
been cancelled and that amounts may not be redrawn thereunder.
4. CONFIRMATION
4.1. The parties confirm that the Facilities Agreement remains in full
force and effect save as amended by this Deed.
4.2. Each Charging Company confirms that the Security Documents to which it
is a party remain and will remain in full force and effect
notwithstanding the amendments effected by this Deed and that they
shall continue to guarantee or, as the case may be, act as security
for liabilities incurred in connection, inter alia, with the
Facilities.
5. REPRESENTATIONS AND WARRANTIES
5.1. On the Effective Date each Obligor that is a party to this Agreement
shall make the representations and warranties set out in Clauses
22.1.1 to Clause 22.1.12 as provided for in the Facilities Agreement
(as amended and restated hereby) to each of the Senior Lenders.
5.2. Each Borrower acknowledges that each of the Senior Lenders is relying
on the accuracy of such representations and warranties for the
purposes of determining to enter into this Deed.
6. EXPENSES
6.1. The Principal Borrower shall discharge, by payment direct to the
Agent's solicitors DLA, all costs and expenses (including, without
limitation, legal fees, registration costs and VAT)
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reasonably incurred by the Agent in connection with the negotiation,
preparation and execution of this Deed and any documents negotiated,
prepared or executed in connection with this Deed (including, without
limitation and for the avoidance of doubt, documentation necessary in
order to register the security interests created in connection with
the transactions referred to in this Deed).
7. MISCELLANEOUS
7.1. This Deed may be signed in any number of counterparts and this shall
have the same effect as though the signatures thereon were on a single
copy of this Deed.
7.2. The parties do not intend that any provision of this Deed should be
enforceable pursuant to the Contracts (Rights of Third Parties) ▇▇▇
▇▇▇▇.
7.3. Nothing in this Deed shall require any party to it to do any act that
would be in breach of s.151 Companies ▇▇▇ ▇▇▇▇.
7.4. For the avoidance of doubt, the effect of this Deed shall be to reduce
the Margin to 1.5 per cent. per annum from 15 October 2001 and
interest that accrued (including, interest accrued but unpaid as at 15
October 2001) prior to 15 October 2001 shall be paid at the rate
stated in the Facilities Agreement prior to its amendment and
restatement pursuant to this Deed.
IN WITNESS WHEREOF the parties have caused this Deed to be duly executed on the
date first written above.
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SCHEDULE 1
Amended and Restated Facilities Agreement
DATED As of 27 May 1999
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MCM ELECTRONICS LIMITED
(subsequently called DDI Europe Limited)
- and -
THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND
(in its various capacities as the Arranger, the Agent, the
Security Trustee,
the Bank, and the Working Capital Bank)
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FACILITIES AGREEMENT
relating to the provision of Term Loan Facilities and
a Working Capital Facility to MCM Electronics
Limited (subsequently called DDI Europe
Limited) and its Subsidiaries
-----------------------------------------------------
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CONTENTS
1. DEFINITIONS AND INTERPRETATION........................................................................9
2. THE FACILITIES.......................................................................................31
3. PURPOSE..............................................................................................32
4. MAXIMUM AMOUNTS......................................................................................33
5. CONDITIONS PRECEDENT.................................................................................33
6. CONDITIONS SUBSEQUENT................................................................................35
7. AVAILABILITY OF THE TERM LOAN FACILITIES.............................................................37
8. AVAILABILITY OF THE WORKING CAPITAL FACILITY.........................................................38
9. INTEREST PERIODS.....................................................................................38
10. INTEREST.............................................................................................38
11. BREAK COSTS..........................................................................................41
12. REPAYMENT............................................................................................41
13. PREPAYMENT...........................................................................................43
14. PREPAYMENT AND/OR CANCELLATION OF THE FACILITIES.....................................................44
15. PAYMENTS.............................................................................................44
16. TAXES................................................................................................46
17. INCREASED COST.......................................................................................47
18. CHANGE IN LAW OR REGULATIONS.........................................................................49
19. MITIGATION...........................................................................................49
20. FINANCIAL RATIOS.....................................................................................49
21. COVENANTS............................................................................................51
22. REPRESENTATIONS AND WARRANTIES.......................................................................67
23. DEFAULT..............................................................................................70
24. FEES.................................................................................................76
25. COSTS AND EXPENSES...................................................................................76
26. STAMP DUTY...........................................................................................77
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27. ASSIGNMENTS AND TRANSFERS............................................................................77
28. AGENCY PROVISIONS....................................................................................79
29. DECISIONS............................................................................................82
30. SET-OFF..............................................................................................83
31. CALCULATIONS AND EVIDENCE OF DEBT....................................................................84
32. REDISTRIBUTION OF PAYMENTS...........................................................................84
33. NOTICES..............................................................................................85
34. INVALIDITY OF PROVISIONS.............................................................................85
35. WAIVER...............................................................................................86
36. COUNTERPARTS.........................................................................................86
37. GOVERNING LAW AND JURISDICTION.......................................................................86
38. EURO.................................................................................................86
SCHEDULE 1................................................................................................87
The Banks and their Commitments...........................................................................87
SCHEDULE 2................................................................................................88
Financial Definitions.....................................................................................88
SCHEDULE 3................................................................................................92
Form of Notice of Drawdown................................................................................92
SCHEDULE 4................................................................................................94
Conditions Precedent......................................................................................94
Part I - Conditions Precedent to be satisfied before the issue of Press Release...........................94
Part II - Conditions Precedent to be satisfied on or before first Drawdown................................96
Part III - Conditions Precedent for the Granting of Security..............................................96
SCHEDULE 5................................................................................................98
Deed of Accession.........................................................................................98
SCHEDULE 6................................................................................................99
Form of Transfer Certificate for a Bank...................................................................99
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SCHEDULE 7...............................................................................................101
The Group Companies......................................................................................101
Part I - Initial Charging Companies......................................................................101
Part II - Dormant Companies..............................................................................102
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DOCUMENTS IN THE AGREED TERMS
Accountants Report
Articles
Board Resolutions
Business Plan
Directors and Secretary's Certificate
Environmental Reports
Existing Lender Comfort Letters
Financial Model
First Debenture
Flow of Funds Statement
Insurance Report
Intercreditor Agreement
Intra Group Loan Agreement
Investment Agreement
Keyman Insurance Assignment
Legal Charge
Legal Due Diligence Report
Managers References
Market Report
New Issuance Instrument
Offer Document
Offer Expenses Estimate
Opening Consolidated Balance Sheet
Pensions Report
Pre Press Release Letter
Press Release
Pro Forma Financial Assistance Documents
Property Valuation
Receiving Bank Instruction Letter
Report on Title
Second Debenture
Security Trust Deed
Service Agreements
Summary of Existing Borrowings Being Refinanced
Third Debenture
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THIS AGREEMENT is dated 27 May 1999 and is made
BETWEEN
(1) MCM ELECTRONICS LIMITED (subsequently called DDI Europe Limited) a company
registered in England and Wales under number 3731403 ("the Principal
Borrower");
(2) THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as arranger ("the
Arranger");
(3) THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as agent for the Senior
Lenders ("the Agent");
(4) THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as Security Trustee for
the Security Beneficiaries ("the Security Trustee");
(5) THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND and any other bank which
has a Participation in the Term Loan Facility ("the Banks");
(6) THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND as provider of the Working
Capital Facility ("the Working Capital Bank")
NOW IT IS HEREBY AGREED as follows:-
1 DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement:
"Accountants Report" means the accountants report prepared by Deloitte
& Touche dated on or about the date hereof relating to the Target
Group addressed (inter alios) to the Agent (for itself and on behalf
of the Senior Lenders);
"Accounting Period" shall have the same meaning given to the term
"Accounting Reference Period" by Section 224 of the Companies ▇▇▇
▇▇▇▇;
"Adjusted Net Worth" is defined in Schedule 2 (Financial Definitions);
"Advance" means the principal amount of each loan made or to be made
to the Borrowers under the Term Loan Facilities. The expressions "Term
Loan Advance" and "Advances" shall be construed accordingly;"All
Outstanding Amounts" means all amounts from time to time outstanding
to the Senior Lenders or any of them under the Banking Documents;
"Amendment and Restatement Deed" means the amendment and restatement
agreement made between, inter alios, the Principal Borrower and the
Agent dated on or about 15 November 2001;
"Amendment and Restatement Effective Date" has the meaning given to
"Effective Date" in the Amendment and Restatement Deed;
"Annual Budget" means the annual budget to be provided to the Agent in
accordance with Clause 21.4 (Annual Budget);
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"A Ordinary Shares" means the A ordinary shares of 1p each in the
capital of the Principal Borrower;
"Applicable Taxes" means all Taxes (whether or not collectable by
deduction or withholding) imposed by or in the jurisdiction in which
the relevant Charging Company is resident or any other country through
or out of which the relevant payment is made on any payment by any
Charging Company, or by any Agent to any Bank, under any Banking
Document, other than:
(i) Taxes (not being withholding Taxes) imposed on the overall net
income or gains of a Bank by the jurisdiction in which its
principal office is located or on the overall net income or gains
of a Bank's Facility Office by the jurisdiction in which that
Facility Office is located; and
(ii) Taxes imposed on that payment which would not have been imposed
on that payment if the Bank to which or for whose account that
payment was made had been at the date of payment a Qualifying
Lender;
"Articles" means the articles of association of the Principal Borrower
as the same are amended from time to time in the agreed terms;
"Assumed Senior Interest" is defined in Schedule 2 (Financial
Definitions);
"Audited Accounts" means, in relation to any member of the Group, the
latest available audited consolidated accounts of that company;
"Auditors" means KPMG or such other firm of accountants as shall be
appointed from time to time in accordance with Clause 21.11.10
(Appointment of Auditors) of this Agreement;
"Available Share Purchase Facility" means the aggregate amount of the
Tranche A Term Loan Facility and the Tranche B Term Loan Facility less
the aggregate of (but without double counting):-
(i) any cancellation or reduction of the aggregate Tranche A and
Tranche B Term Loan Facilities pursuant to this Agreement;
(ii) the balance on the Payments Account Overdraft;
(iii)the Tranche A and Tranche B Term Loans; and
(iv) any Tranche A or Tranche B Term Loan Advance which has been
requested by the Principal Borrower in accordance with the terms
of this Agreement but not yet advanced by the Banks (except where
such Term Loan Advance is being made available to repay all or
part of the balance on the Payments Account Overdraft);
"Available Term Loan Facility" means the aggregate amount of the
Tranche A Term Loan Facility, the Tranche B Term Loan Facility less
the aggregate of (but without double counting):-
(i) any cancellation or reduction of the aggregate Term Loan
Facilities pursuant to this Agreement;
(ii) the balance on the Payments Account Overdraft;
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(iii)the Term Loans; and
(iv) any Term Loan Advance which has been requested by the Principal
Borrower in accordance with the terms of this Agreement but not
yet advanced by the Banks (except where such Term Loan Advance is
being made available to repay all or part of the balance on the
Payments Account Overdraft);
"Banking Documents" means this Agreement, the Working Capital Facility
Letter, the Security Documents, the Intercreditor Agreement, the
Hedging Documents, any Deed of Accession, any Transfer Certificate,
the New Issuance Certificate and any other document for the time being
between any Obligor and any Senior Lender expressed to be supplemental
thereto (except that the Hedging Documents will only be deemed to be a
Banking Document for the purposes of this Agreement after they have
been executed and delivered to the Agent in accordance with Clause 6
(Conditions Subsequent) of this Agreement);
"Bank of Scotland" means The Governor and Company of the Bank of
Scotland;
"Banks" means Bank of Scotland and any other bank which has a
Participation in the Term Loan Facility or, where the context admits,
in the Working Capital Facility, or any person who has an interest in
any warrant issued pursuant to the New Issuance Instrument;
"Base Rate" means the base rate for the time being in force of Bank of
Scotland;
"Borrower" means the Principal Borrower and any other Group Company
which has for the time being been approved in writing by the Banks and
which has executed and delivered a deed of accession substantially in
the form of Schedule 5 (Deed of Accession) and "Borrowers" means all
or any of them from time to time;
"Borrowers' Solicitors" means edge ▇▇▇▇▇▇▇;
"Borrowings" has the meaning specified in Schedule 2 (Financial
Definitions);
"Business Day" means a day on which the relevant London interbank
markets are open for business in London;
"Business Plan" means the business plan in the agreed terms;
"Capex Budget" means the capital expenditure budget which has been
approved by the Agent for each Accounting Period of the Principal
Borrower and which has been delivered to the Agent in accordance with
Clause 21.5 (Capex Budget) except that for the period to 31 March 2000
the Capex Budget shall be in accordance with the Business Plan;
"Cash Collateral Account" means any interest bearing account with the
Agent or any of the Banks (bearing interest at the best rate available
from the Agent or the relevant Bank (as the case may be) in respect of
such amount for the relevant period) in accordance with the provisions
of this Agreement into which certain sums are to be paid to be held as
security for the obligations of the Borrowers and/or any of them under
the Banking Documents;
"Cash Collateral Charge" means a charge in a form reasonably required
by the Agent and granted or to be granted to the Security Trustee by
the Borrowers or any of them (as the Agent may require) in relation to
a Cash Collateral Account;
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"Certain Funds Period" means the period commencing on the date hereof
and ending on the earlier of:
(i) the date which falls four months after the date of posting of the
Offer Document if the Principal Borrower is not then entitled to
purchase all outstanding shares in Target pursuant to Sections
428-430(F) of the Companies ▇▇▇ ▇▇▇▇;
(ii) the date on which the Offer lapses or is withdrawn;
(iii)the date which falls 77 days after the date on which the
Principal Borrower is first entitled to exercise any of its
rights under Sections 428-430(F) Companies ▇▇▇ ▇▇▇▇;
(iv) the date which falls 21 days after the Offer has closed (unless
at that time the period in (iii) above is still running);
"Change of Control" means a change such that:-
(i) any single person, or group of persons acting in concert,
acquires Control of the Principal Borrower (excluding the Initial
Investors); or
(ii) the Initial Investors cease to have Control of the Principal
Borrower;
"Charging Company" means each of the Initial Charging Companies
together with any Group Company which is for the time being a party to
any Security Document by reason of Clause 21.13.9 (Security from
Non-Charging Companies);
"Charging Group" means all the Charging Companies together with any
other Group Company for the time being which are required to provide
security for the benefit of the Security Beneficiaries pursuant to
Clause 21.13.9 (Security from Non-Charging Companies);
"Code" means The City Code on Takeovers and Mergers;
"Collection Account Letters" means the letters in the agreed terms
relating to the operation of the Group's bank accounts with the Banks;
"Commitment" means the commitment of the Arranger as set out in
Schedule 1 (The Banks and the Commitments) to provide:-
(i) up to(pound)17,250,000 in respect of the Tranche A Term Loan
Facility including the Payments Account Overdraft;
(ii) prior to the Amendment and Restatement Effective Date up to
(pound)2,500,000 in respect of the Tranche B Term Loan Facility
including the Payments Account Overdraft and thereafter,
(pound)750,000; and
(iii) prior to the Amendment and Restatement Effective Date up to
(pound)4,000,000 in respect of the Original Working Capital
Facility and thereafter, in respect of the 2001 Working Capital
Facility (pound)10,000,000;
and after syndication the amount of the Term Loan Facilities which the
Banks are committed from time to time to provide in each case as the
same may be transferred cancelled reduced varied or terminated in
accordance with this Agreement and "Term Loan Commitment" shall
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be construed accordingly. "Total Commitments" means the aggregate of
all such commitments;
"Commitment Period" means, in relation to:-
(i) the Tranche A and Tranche B Term Loan Facilities, the period
beginning on the date of this Agreement and ending on the last
day of the Certain Funds Period or such earlier date upon which
the relevant Facility has been cancelled or finally repaid and
discharged in accordance with this Agreement; and
(ii) not restated;
(iii)the Original Working Capital Facility, the period of three years
commencing on the Completion Date;
(iv) the 2001 Working Capital Facility, the period of one year
commencing on the Amendment and Restatement Effective Date;
"Completion Date" means the date of the first Advance under a Term
Loan Facility;
"Control" in relation to a body corporate, means the right, by virtue
of holding shares in such body corporate, or by virtue of any contract
or other arrangement with any holder of shares in such body corporate,
to exercise or control the exercise of more than 50 per cent of the
total voting rights conferred upon the holders of the entire issued
share capital for the time being of that body corporate and
"Controlled" shall be construed accordingly;
"Deed of Intercreditor Accession" means deeds by which the Initial
Charging Companies accede to the Intercreditor Deed;
"Deed of Accession" means a deed substantially in the form set out in
Schedule 5 (Deed of Accession);
"Deed of Adherence" means a deed in the agreed terms by which the
Initial Charging Companies accede to the Security Trust Deed;
"Disclosure Letter" means the disclosure letter to the Investment
Agreement (if any);
"Disposal" means any sale, lease, transfer or other disposal of all or
any part of the assets of any Group Company;
"Dividends" means any dividends payable in respect of any of the
Shares of the Principal Borrower;
"Dormant Company" means together (i) each Group Company identified as
a Dormant Company in Schedule 7 Part II (Dormant Companies) and (ii)
each other Group Company which is not a Charging Company, does not
trade, is not required to make entries into its accounting records in
accordance with Section 221 Companies Act 1985 and does not hold or
own any material assets or property (including intellectual property
and/or tax losses);
"Drawdown" means the making of a Term Loan Advance and/or the issue of
a Loan Note Guarantee;
"Drawdown Date" means the date of a Drawdown;
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"EBIT" has the meaning specified in Schedule 2 (Financial
Definitions);
"EBITDA" has the meaning specified in Schedule 2 (Financial
Definitions);
"Environmental Claims" means any claim arising as a result of:
(i) any breach of Environmental Laws; or
(ii) any circumstances giving rise to any remedy or penalty that may
be enforced either by public or private law or imposed against
any Group Company as a result of Environmental Contamination; or
(iii)any application for any judicial or administrative order or
proceeding in respect of Environmental Contamination; or
(iv) any other remedial action that any Group Company is obliged to
undertake pursuant to Environmental Laws in respect of
Environmental Contamination;
"Environmental Consents" means all licences, authorisations, consents
or permits of any kind required by any Group Company to operate its
business under Environmental Laws to which such Group Company is
subject;
"Environmental Contamination" means any release, leakage or spillage
of any toxic, poisonous, noxious or polluting matter or hazardous or
dangerous substance or thing at or from any site owned or occupied by
any Group Company and the consequences thereof;
"Environmental Laws" means all legislation, regulations or orders
concerning protection of the environment for the time being in force
which are capable of enforcement in relation to any Group Company in
the jurisdiction of incorporation of such Group Company;
"Environmental Reports" means the environmental report in respect of
the Properties in the agreed terms prepared by ▇▇▇▇▇▇▇▇▇ & Co
addressed (inter alia) to the Agent (for itself and on behalf of the
Senior Lenders);
"Event of Default" means any of the events specified in Clause 23
(Default);
"Existing Borrowings being Refinanced" has the meaning set out in
Clause 21.11.1 (Borrowings);
"Existing Lender Comfort Letters" means the letters in agreed terms
between the Target and each of the Existing Lenders;
"Existing Lenders" means National Westminster Bank Plc;
"Facilities" means any or all of the Term Loan Facilities and the
Working Capital Facility and any other facilities from time to time
granted by the Banks or the Working Capital Bank;
"Facility Office" in relation to each Senior Lender means the office
in the United Kingdom through which it is acting and through which it
will participate in the Facilities for the purpose of this Agreement;
"Final Repayment Date" means in relation to:-
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(i) the Tranche A Term Loan Facility, 30th September 2007;
(ii) the Tranche B Term Loan Facility, 30th December 2007; and
(iii) not restated;
(iv) the Working Capital Facility, the first anniversary of the
Amendment and Restatement Effective Date;
or such earlier date or dates by which the Term Loans are required to
be repaid in full pursuant to this Agreement;
"Financial Assistance Auditors" means KPMG;
"Financial Event of Default" means any of the following:-
(i) an Event of Default arising under any of Clauses 23.1.1, 23.1.2,
23.1.10, 23.1.11, 23.1.12, 23.1.13, 23.1.14, 23.1.15, , 23.1.17,
23.1.18 or 23.1.24 (but not if the Event of Default arises only
under head (iv) of the definition of Material Adverse Effect); or
(ii) the Borrower failing to comply with the provisions of any of
Clauses 21.1, 21.2, 21.3 or 21.4; or
(iii)the Borrower being in breach of any of the Financial Ratios;
"Financial Model" means the financial model in the agreed terms;
"Financial Ratios" means the ratios and covenants set out in Clause
20;
"First Debenture" means the debenture in the agreed terms to be issued
by the Principal Borrower in favour of the Security Trustee to secure
the obligations of the Principal Borrower to the Security
Beneficiaries;
"Flotation" means the admission of any part of the share capital of
the Principal Borrower to the Official List of the London Stock
Exchange or to trading on NASDAQ or EASDAQ or any other recognised
investment exchange;
"Flow of Funds Statement" means the Flow of Funds Statement in the
agreed terms;
"Full Drawdown Date" means the earlier of (a) the date on which the
Share Purchase Term Loan Facilities are fully drawn and (b) 1 July
1999;
"GAAP" is defined in Schedule 2 (Financial Definitions);
"Gross Asset Cover Percentage" is defined in Schedule 2 (Financial
Definitions);
"Group" means at any time the Principal Borrower and its Subsidiaries
for the time being and "Group Company" means any of them;
"Hedging Arrangements" means the interest rate cap, struck at a rate
of 6 1/2% with the Hedging Counterparty in respect of the Term Loans
which the Agent shall reasonably require in respect of at least one
half of the Facilities ((pound)13,375,000) for a period of 3 years,
such arrangements being on commercial terms which are substantially in
line with those generally
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available to companies of a standing similar to the Principal Borrower
in the market at the time of quotation for arrangements of such type;
"Hedging Counterparty" means Bank of Scotland Treasury Services plc
but if a cap is purchased then it shall mean Bank of Scotland Treasury
Services plc or such other bank of reasonable standing acceptable to
the Agent (acting reasonably) which provides the cap but only if Bank
of Scotland Treasury Services plc shall have been unwilling to match
the terms quoted by such other bank;
"Hedging Documents" means the documents executed in pursuance of the
Hedging Arrangements;
"Indebtedness" shall be construed to include any obligation (whether
incurred as principal or surety) for the payment or repayment of
money, whether present or future, actual or contingent;
"Information Documents" means the Accountants Report, Business Plan,
the Financial Model, the Summary of Existing Borrowings being
Refinanced, the Legal Due Diligence Report, the Report on Title, the
Market Report, the Property Valuation, the Environmental Reports and
the Pensions Report;
"Initial Charging Companies" means the Principal Borrower and the
Companies listed in Part I of Schedule 7 (The Initial Charging
Companies):
"Initial Investors" means:
(i) each of the Investors as defined in the Investment Agreement so
long as it remains a party to the Investment Agreement; and
(ii) any transferee who is a Qualifying Investor;
"in the agreed terms" means in the terms of the relevant documents
initialled by or on behalf of the Agent and by or on behalf of the
Principal Borrower;
"Insurance Brokers" means such brokers as shall be agreed by the
Agent, such agreement not to be unreasonably withheld;
"Insurance Report" means the insurance report in the agreed terms
prepared by the Insurance Brokers addressed (inter alia) to the Agent
(for itself and on behalf of the Senior Lenders) confirming the
adequacy and details of the insurance in place at the Completion Date
and that all premiums have been paid;
"Intellectual Property Rights" means all and any inventions patents
applications for patents registered designs applications for
registered designs trade and service marks whether registered or
unregistered applications for trade and service marks trade names
design rights licences copyrights of all descriptions (and rights by
whatever name called affording equivalent or similar protection)
confidential information know-how trade secrets research and
development information design standards specifications computer
software tables of data bills of material calculations formulae
product codings and designations and rights under the International
Convention for the Protection of Industrial Property 1983 (and
licences and permissions granted in respect of any of the aforesaid)
(in each case wherever the same may be located) and any other property
in the nature of intellectual property;
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16
"Intercreditor Agreement" means the deed in the agreed terms between,
inter alios, the Bank of Scotland as Senior Agent, the Security
Trustee, a Bank, the Working Capital Bank and Hedging Counterparty
(1-5) the Managers (6) the Initial Investors (7) and the Charging
Companies (8) which regulates the respective rights and obligations of
the parties thereto with respect to the Facilities;
"Interest on the Subordinated Loans" means interest payable in respect
of the Subordinated Loans in accordance with the terms of the
Investment Agreement;
"Interest Payment Date" means in respect of any Advance the last day
of the Interest Period applicable thereto;
"Interest Period" means, for the purpose of determining the rate of
interest applicable to any Advance a period of one, three, or six
months or such other periods as the Agent may permit as determined
from time to time in accordance with Clause 9 (Interest Periods);
"Intra-Group Loan Agreement" means the loan agreement in the agreed
terms to be entered into between the Principal Borrower and the Target
Group;
"Investment" in relation to any Joint Venture (each an "Investee")
means the aggregate of the following:
(i) all monies subscribed or invested by a UK Company for shares,
bonds, loan notes, debentures or other shareholder or financial
instruments of an Investee;
(ii) all expenditure incurred in relation to loans, gifts, or capital
contributions to an Investee by a UK Company (including the
amount by which any transfer of assets or assumption of
liabilities represents an undervalue for the UK Company);
(iii)all liabilities of an Investee for which a UK Company is liable
as guarantor, surety or indemnifier;
"Investment Agreement" means the investment agreement of even date
herewith made between the Principal Borrower (1) M ▇▇▇▇▇▇, M ▇▇▇▇▇▇▇▇▇
and J ▇▇▇▇▇▇▇ (2) NatWest Equity Partners (3) and The European Private
Equity Fund, The European Private Equity Fund 'B; T he European
Private Equity Fund 'C', T he European Private Equity Fund 'D; NatWest
Equity Partners No. 4 Fund and the NatWest Equity Partners Partnership
together with all other documents to be executed or delivered in
accordance with the terms thereof;
"Investors" means (i) each of the Investors as defined in the
Investment Agreement so long as it remains a party to the Investment
Agreement and (ii) any transferee of it who is for the time being a
party to the Investment Agreement or who is for the time being bound
by the terms thereof;
"Joint Venture" means any joint venture entity whether in the form of
a company, incorporated firm, partnership, joint venture, association,
partnership or other joint enterprise in which in any such case one or
more Group Companies have an interest of less than 100%;
"Keymen" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇;
"Keyman Insurance Assignment" means the keyman assurance assignment in
the agreed terms entered into between the Target and the Security
Trustee relating to the assignment of
--------------------------------------------------------------------------------
17
the insurance policies ("Keyman Policies") to be taken out in respect
of the death and critical illness of the Keymen upon the following
terms:
Keyman Amount Term
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (pound)2,000,000 5 years
▇▇▇▇▇▇ ▇▇▇▇▇▇ (pound)3,000,000 5 years
▇▇▇▇ ▇▇▇▇▇▇▇ (pound)1,000,000 5 years
"Keystone Events of Default" has the meaning given in Clause 5.1
(Conditions to the Obligations of the Senior Lenders);
"Legal Due Diligence Report" means the legal due diligence report
dated on or around the date of this agreement prepared by the
Borrower's Solicitors and addressed (inter alia) to the Agent (for
itself and on behalf of the Senior Lenders);
"Legal Charge" means a first legal charge in the agreed terms to be
given by Zlin Electronics Limited in respect of its Freehold property
shortly known as land on the east side of Alexandra Way, Ashchurch
Road, Tewkesbury, Gloucestershire (Title No GR 117211);
"LIBOR" means, in respect of any Advance or unpaid sum for a
particular period:-
(i) the rate per annum for sterling deposits for a period comparable
to the relevant period which appears on page 3750 of the Telerate
Service (or any page replacing page 3750) (or, in the absence
thereof, the relevant page of the Reuters screen applicable
thereto) at or about 11:00am on the first day of that period; or
(ii) if no such rate appears on the relevant page, the rate (rounded
upwards to the nearest four decimal places) certified by the
Agent as the average of rates at which sterling deposits in an
amount comparable to the Advance or unpaid sum quoted to the
Agent are being offered by the Banks on the London Interbank
Sterling Market at or about 11.00 a.m. on the first day of the
relevant Interest Period for a period comparable to the relevant
Interest Period and for delivery on the first day thereof;
"Majority Banks" means one or more of the Banks the aggregate of whose
Participation Amounts equals or at that time exceeds 66 2/3% of the
aggregate of the Participation Amounts of all of the Banks;
"Managers References" means references in the agreed form in respect
of the Managers;
"Management Accounts" means the management accounts of the Group and
each of the Group Companies (in a format agreed with the Agent) which
the Principal Borrower is required to produce pursuant to Clause 21.1
(Financial Information) and which shall include without limitation:
(i) a profit and loss statement including numbers showing performance
in the relevant Monthly Accounting Period, performance in the
year to date, and a comparison of actual performance against
budgeted performance as set out in the Annual Budget;
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18
(ii) a balance sheet including numbers showing performance in the
relevant Monthly Accounting Period, performance in the year to
date, and a comparison of actual performance against budgeted
performance as set out in the Annual Budget;
(iii)a cash flow statement including numbers showing performance in
the relevant Monthly Accounting Period, performance in the year
to date, and a comparison of actual performance against budgeted
performance as set out in the Annual Budget;
(iv) a cashflow forecast (prepared on a basis acceptable to the Agent)
as at the end of each Quarterly Period for the 6 months
thereafter;
(v) in the Management Accounts referable to the relevant period of
testing only, a schedule demonstrating in reasonable detail
(together with appropriate workings and calculations) whether or
not the financial covenants set out in Clause 20.1 (Financial
Covenants) have been complied with in relation to the relevant
period;
"Managers" means each of the Managers as defined in the Investment
Agreement;
"Margin" means:-
(i) in relation to the Tranche A Term Loan Facility, 2% per annum
prior to 15 October 2001, and thereafter, 1.5% per annum; and
(ii) in relation to the Tranche B Term Loan Facility, 3.5% per annum
prior to 15 October 2001, and thereafter, 1.5% per annum;
or such other percentage as may be established from time to time in
accordance with this Agreement;
"Market Report" means the market report in the agreed terms prepared
by ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇ Limited addressed (inter alia) to the Agent (for
itself and on behalf of the Senior Lenders);
"Material Adverse Effect" means any event or circumstance which has or
could reasonably be expected to:
(i) have a material adverse effect on the ability of any Obligor to
perform its payment obligations under any of the Banking
Documents; or
(ii) have a material adverse effect on the ability of the Borrowers to
comply with the financial covenants contained in clause 20
(Financial Ratios); or
(iii)have a material adverse effect on the business, assets or
financial condition of the Group or any substantial part of the
Group; or
(iv) result in any Banking Document not being legal, valid and binding
on, and enforceable substantially in accordance with its material
terms against any party to that Banking Document and/or, in the
case of Security Documents not providing to the Security Trustee
(or other holder of the security interest(s) created by that
Security Document) for itself and on behalf of the Security
Beneficiaries, perfected and enforceable security over the assets
purported to be covered by that Security Document;
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19
in each case in a manner and to an extent reasonably considered by the
Majority Banks to be materially adverse to the interests of the Senior
Lenders under the Banking Documents;
"Material Company" means the Principal Borrower and any other Charging
Company and any Material Subsidiary (if not a Charging Company);
"Material Subsidiary" means:-
(i) any Group Company whose sales, assets, net worth or earnings is
not less than 5% of the aggregate sales, assets, net worth or
earnings of the Group; or
(ii) a company (being itself a subsidiary of the Principal Borrower)
which is a holding company of such a member or which is a holding
company of members of the Group and which on a consolidated basis
has sales, assets, net worth or earnings of not less than 5% of
the aggregate sales, assets, net worth or earnings of the Group;
"Millennium Compliance" means the ability of the Target Group to
procure that its systems are Millennium Compliant in all material
respects by 31st December 1999;
"Millennium Compliant" means that when correctly operated without
being connected to a system which is not Millennium Compliant (i) the
date change at the end of 1999 will not cause the computer and
information technology system of any member of the Target Group to
malfunction, end abruptly, provide invalid results or adversely affect
the business of any member of the Target Group, (ii) neither the
performance nor functionality of the computer and information
technology systems of any member of the Group is or will be affected
by dates before, during or after the year 2000, and (iii) in
particular (but without limitation) in respect of the computer and
information technology systems of any member of the Target Group:-
(a) no value for current date causes or will cause any interruption
in operation;
(b) date-based functionality behaves and will behave consistently for
dates before, during and after the year 2000;
(c) in all interfaces and data storage, the century in any date is
and will be specified either explicitly or by unambiguous
algorithms or inferencing rules; and
(d) the year 2000 is and will be recognised as a leap year;
"Minimum Transfer Amount" means in relation to the Tranche A Term Loan
(pound)1,000,000, and in relation to the Tranche B Term Loan,
(pound)250,000;
"MLA Rate" in relation to each Advance or overdue amount denominated
in Sterling means, for the Interest Period relating to that Advance or
overdue amount, the cost imputed to each Bank participating in such
Advance or overdue amount through a facility office in the United
Kingdom of compliance with the requirements of the Bank of England as
to special deposits or cash ratio deposits or any charge imposed by
the Financial Services Authority (or other authority which replaces
it) in respect of eligible liabilities (as defined by the Bank of
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ or by the Bank of England) during that Interest
Period, expressed as a percentage rate per annum and determined by
such Bank in accordance with usual market practice;
"month" means unless otherwise agreed between the Principal Borrower
and the Agent a period starting on one day in a calendar month and
ending on the nearest preceding Business
--------------------------------------------------------------------------------
20
Day in the next calendar month save that where a period starts on the
last Business Day in a calendar month that period shall end on the
last Business Day in the next calendar month;
"Monthly Accounting Period" means in each Accounting Period each
successive calendar month (or, if altered, each period of four or five
successive weeks), the first of which commences on the first day of
such Accounting Period and the last of which ends on the last day of
such Accounting Period except that the first Monthly Accounting Period
shall be the period beginning on the Completion Date and ending on or
about the last day of the month in which the Relevant Date falls or if
this is less than four (or five as the case may be) weeks on or about
the last day of the immediately following month;
"Net Borrowings" is defined in Schedule 2 (Financial Definitions);
"Net Security Value of Stock" is defined in Schedule 2 (Financial
Definitions);
"Notice of Drawdown" means a notice substantially in the form set out
in Schedule 3 (Notice of Drawdown) duly completed and signed by the
relevant Borrower;
"Obligor" means each of the Principal Borrower, Target and any Group
Company which is expressed (or required by this Agreement) to be a
party to any Banking Document;
"Offer" means the recommended offer proposed to be made by
PriceWaterhouseCoopers on behalf of the Principal Borrower
substantially on the terms set out in the Press Release, to acquire
the whole of the ordinary share capital (whether in issue or falling
to be allotted) of Target not already owned by the Principal Borrower,
as such offer may, subject to the prior written consent of the Agent
(such consent not to be unreasonably withheld or delayed), be amended,
added to, revised, renewed or waived from time to time;
"Offer Costs" means all costs, fees and expenses (and Taxes thereon)
and all stamp, documentary, registration or similar Tax incurred by or
on behalf of the Principal Borrower and Target in connection with the
Offer including the preparation, negotiation and entry into of this
Agreement and all other documentation in relation to the Offer up to a
maximum of (pound)2,434,000;
"Offer Document" means the document substantially in the agreed terms
to be despatched to shareholders of Target in connection with the
Offer;
"Opening Cash Statement" is defined in clause 6.6;
"Ordinary Shares" means the ordinary shares in the capital of the
Principal Borrower;
"Original Working Capital Facility" means the overdraft and ancillary
facilities of up to (pound)4,000,000 made or to be made available in
accordance with the terms of this Agreement and the Original Working
Capital Facility Letter or as the case may be or as the context
requires the principal amount thereof from time to time outstanding;
"Original Working Capital Facility Letter" means the letter dated
today between Bank of Scotland and the Principal Borrower setting out
the terms and conditions upon and subject to which Bank of Scotland
has agreed to make available to the Principal Borrower and other
Borrowers the Original Working Capital Facility (as amended from time
to time);
"Participation" means, in relation to a Bank, its right, title,
interest and obligations in relation to the Term Loan Facilities
including without limitation (i) its right to receive its
Participation
--------------------------------------------------------------------------------
21
Proportion of principal and interest in respect of the Term Loans; and
(ii) its obligation to participate in its Participation Proportion in
any amounts to be advanced or paid by the Banks under or pursuant to
or in connection with this Agreement;
"Participation Amount" means in relation to a Bank its Participation
Proportion of the Term Loan Advances for the time being outstanding,
or if no Term Loan Advance shall then be outstanding under the Term
Loan Facility, its Term Loan Commitment;
"Participation Proportion" means, in relation to a Bank, at any time,
in respect of any Facility, the proportion which that Bank's
Commitment in respect of that Facility bears to the aggregate amount
of all the Commitments in respect of that Facility at that time;
"Payments Account Overdraft" means an on demand overdraft facility to
be provided by the Bank of Scotland in an amount equal to the Tranche
A and Tranche B Term Loan Facilities made available to the Principal
Borrower pursuant to Clause 2 (Facilities) hereof;
"Pensions Report" means the pensions report in the agreed terms
prepared by KPMG addressed (inter alia) to the Agent (for itself and
on behalf of the Senior Lenders)
"Permitted Borrowings" means:-
(i) Borrowings under this Agreement (including, for the avoidance of
doubt, any outstandings under the BACS Facility);
(ii) the Subordinated Loans;
(iii)Borrowings between Charging Companies and, from the Amendment
and Restatement Effective Date, unsecured Borrowings of up to
(pound)5,000,000 from DDI Corp.;
(iv) Borrowings in any Accounting Period in respect of finance leases
or contracts for hire purchase where the aggregate capital amount
outstanding at any time does not in aggregate exceed
(pound)2,000,000 for the Group;
(v) Borrowings under the Hedging Documents;
(vi) any other Borrowings to which the Majority Banks have given their
prior written consent;
(vii)any other Borrowings not exceeding in any Accounting Period in
aggregate(pound)100,000; and
(viii)any Borrowings existing at the Relevant Date pending the
repayment or discharge thereof pursuant to Clause 21.11.1
(Borrowings) of this Agreement up to a maximum of
(pound)2,900,000;
(ix) the Variable Rate Loan Notes 2003 (series 3);
(x) the Variable Rate Guaranteed Loan Notes 2004 (series 1);
(xi) (until the date falling two months after the Relevant Dates) any
counter indemnity given in respect of the guarantee of the
Variable Rate Guaranteed Loan Notes 2004 (series 1);
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22
(xii)guarantees, indemnities (including counter indemnities) or bonds
given in the ordinary course of and for the purposes of the
business;
"Permitted Disposals" means:-
(i) Disposals by any Group Company of assets (including cash) in the
ordinary course of the trading or business activities of that
Group Company on arm's length terms and for full consideration;
or
(ii) Disposals by one Charging Company to another Charging Company; or
(iii)provided no Event of Default or Potential Event of Default has
occurred which has not been waived by the Agent or remedied
Disposals (other than of any shares in Group Companies and those
falling in any other category of this definition) on arm's length
terms by Group Companies, in respect of which the disposal value
of any single item does not exceed (pound)50,000 and provided
that the aggregate value in respect of all such disposals by all
Group Companies in any Accounting Period does not exceed
(pound)250,000; or
(iv) provided no Event of Default or Potential Event of Default has
occurred which has not been waived by the Agent or remedied
Disposals of assets (other than Intellectual Property Rights and
any real or heritable property or any interest in real property)
in exchange for other assets, in the reasonable opinion of the
person effecting the disposal comparable or superior as to type,
value and quality; or
(v) provided no Event of Default or Potential Event of Default has
occurred which has not been waived by the Agent or remedied
Disposals on arm's length terms of surplus obsolete or redundant
plant equipment or other assets not required for the efficient
operation of its business; or
(vi) provided no Event of Default or Potential Event of Default has
occurred which has not been waived by the Agent or remedied
Disposals of capital assets (other than Intellectual Property
Rights and any interest in shares) when the proceeds of the
disposal are reinvested in other capital assets which are in the
reasonable opinion of the person effecting the Disposal
comparable or superior as to type, value and quality or in such
other assets as the Majority Banks may agree within 9 months of
the disposal occurring provided that forthwith upon receipt of
such disposal proceeds, such proceeds shall be paid over to and
be held by the Security Trustee in a Cash Collateral Account
pending such reinvestment and (in the absence of such
reinvestment the disposal proceeds shall be applied to prepay the
Term Loan in accordance with Clause 13.3 (Proceeds of Disposals);
or
(vii)Disposals to which the Agent (acting on the instructions of the
Majority Banks unless otherwise provided for in this Agreement)
has given its prior written consent; or
(viii) Disposals contracted or committed for prior to the Relevant
Date provided they are in the ordinary course of business or were
fully disclosed in the Business Plan; or
(ix) Disposals of cash for any purpose not restricted by this
Agreement; or
(x) Disposals by any Group Company by the temporary application of
funds, not immediately required in the disposing entity's
business, in the purchase or making of short term investments, or
the realisation of such investments; or
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23
(xi) Disposals by any Group Company by the application of the proceeds
of any insurance recovery in or towards the reinstatement or
replacement of the asset in respect of which the same were paid;
or
(xii)The Disposal of Finishing Technologies Limited and/or ▇▇▇▇▇▇▇
Electronic Limited (limited to assets in those companies at the
date of this agreement or acquired in the ordinary course of
business hereafter) on terms set out in the Business Plan or such
other terms approved by the Agent;
Permitted Investment" means:
(i) Investments in any Charging Company;
(ii) any other Investment to the extent that the amounts of
Investments made after the date of this Agreement do not exceed
in any Accounting Period (pound)25,000 individually or
(pound)50,000 in aggregate while the Term Loans or any part
thereof shall be outstanding, provided that the maximum aggregate
investment in any single Joint Venture, company, partnership,
firm, business, consortium or other enterprise or entity shall
not exceed at any time (pound)50,000;
"Permitted Security Interest" means:-
(i) a lien or right of set-off arising between Charging Companies or
in the ordinary course of business solely by operation of law (or
by contractual provisions having a substantially similar effect);
(ii) any Security Interest arising by operation of law with respect to
Taxes;
(iii)any Security Interest over goods and documents of title to goods
arising in the ordinary course of letter of credit and other
documentary credit transactions entered into in the ordinary
course of trading;
(iv) any Security Interest arising by virtue of any bankers lien,
right of set-off or netting arrangements relating to balances on
bank accounts which bank accounts are permitted by this
Agreement;
(v) any Security Interest which the Agent (acting on the instructions
of the Majority Banks) has at any time in writing agreed shall be
a Permitted Security Interest;
(vi) any Security Interest arising under the Banking Documents;
(vii)any Security Interest over any asset arising in the ordinary
course of business as a result of a title-retention or title
transfer provision in the contract relating to the acquisition of
that asset;
(viii)any Security Interest existing at the Relevant Date provided
that within 42 days after the Relevant Date all indebtedness
secured by any such Security Interest (except for any Security
Interests falling within any other category in this definition of
Permitted Security Interests) shall be repaid by the relevant
borrower and all such Security Interests shall be fully and
effectively discharged;
(ix) hire purchase, leases (including finance leases), deferred
purchase arrangements and like arrangements if, and insofar as,
they are not prohibited by this Agreement;
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24
"Potential Event of Default" means any event which, with the giving of
notice and/or the lapse of time would constitute an Event of Default;
"Potential Financial Event of Default" means an event which, with the
giving of notice under this Agreement and/or lapse of time, would
constitute a Financial Event of Default;
"Prepayment Fee Percentage" means:-
(i) in respect of any prepayment of the Tranche A Term Loan Facility
within 2 years of the date of first Drawdown of that Facility, 1%
of the amount prepaid;
(ii) in respect of any prepayment of the Tranche B Term Loan Facility
within 2 years of the date of first Drawdown of the Tranche B
Term Loan Facility, 3% of the amount prepaid; and
(iii)in respect of any prepayment of the Tranche B Term Loan Facility
on or after the second anniversary but before the third
anniversary of the date of first Drawdown of the Tranche B Term
Loan Facility, 1.5% of the amount prepaid;
"Prepayment Notice" means an irrevocable written notice served by a
Borrower on the Agent giving not less than 10 days (in the case of a
prepayment of the Tranche A Term Loan Facility) or 30 days (in the
case of a prepayment of the Tranche B Term Loan Facility) notice that
a Borrower wishes to prepay the whole or any permitted part of the
relevant Term Loan;
" Pre Press Release Letter" means the letter from the Financial
Assistance Auditors in the agreed terms;
"Press Release" means a press announcement to be released by the
Principal Borrower announcing the terms of the Offer;
"Pro Forma Financial Assistance Documents" means the documents
relating to financial assistance substantially in the agreed form or
with such amendments thereto as the Agent may reasonably require in
accordance with best practice having regard to the circumstances
prevailing at the time of the intended execution of such documents;
"Projected EBITD" means for any relevant period the projected EBITD as
shown by, or reasonably determined by the Agent from the information
contained in, the Business Plan;
"Properties" means all interests of the Group Companies in any
property;
"Property Report" means a report on the Properties in the agreed terms
prepared by Messrs Chestertons;
"Qualifying Investor" means
(a) a subsidiary of an Initial Investor; or
(b) a member of the British Venture Capital Association; or
(c) an investment fund managed by a member of the British Venture
Capital Association; or
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25
(d) in the case of a transfer by an investment fund managed by a
member of the British Venture Capital Association, a member of
that investment fund; or
(e) a Qualifying Bank; or
(f) a financial institution specialising in the provision of
mezzanine loan funding or a Subsidiary thereof or an investment
fund managed thereby; or
(g) an individual approved by the Agent, such approval not to be
unreasonably withheld
who has previously or simultaneously agrees with the then parties
thereto to be bound by the provisions of the Intercreditor Agreement
as an Investor by entering into a suitable deed of accession;
"Qualifying Lender" means a bank as defined in ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇
▇▇▇▇ for the purposes of Section 349 of that Act which is within the
charge to UK corporation tax as respects any interest payable or paid
to it pursuant to any Banking Document and to which it is beneficially
entitled at the time that such interest is paid;
"Quarter ▇▇▇" ▇▇ ▇▇▇▇▇, ▇▇ June, 30 September and 31 December;
"Quarterly Period" means in each Accounting Period each period of
three successive Monthly Accounting Periods, the first of which
commences on the first day of such Accounting Period and the last of
which ends on the last day of such Accounting Period except that the
first Quarterly Period shall be the period beginning on the Completion
Date and ending on the next Quarter Day unless such Quarter Day is
less than 90 days after the Completion Date in which case the
immediately following Quarter Day;
"Receiving Bank" means the Bank of Scotland as receiving bank in
connection with the Offer;
"Receiving Bank Account" means an account with the Receiving Bank in
the name of the Principal Borrower to receive the proceeds of
subscriptions for shares of the Principal Borrower and the
Subordinated Loans;
"Receiving Bank Instruction Letter" means the instruction letter in
the agreed terms between the Principal Borrower and the Receiving
Bank;
"Relevant Date" means the date on which the Offer is declared or
becomes unconditional in all respects following acceptances of the
Offer having been received and not withdrawn in respect of, and/or the
Principal Borrower having otherwise acquired or agreed to acquire in
the open market or by private treaty, 90% or more of the Target Shares
to which the Offer relates (or such lower percentage in excess of 50%
as the Agent may otherwise agree with the Principal Borrower) PROVIDED
THAT an acquisition of Target Shares otherwise than pursuant to the
Offer must be treated as an acceptance of the Offer for the purposes
of Section 429(8) of the Companies ▇▇▇ ▇▇▇▇ and in any event must have
been acquired in accordance with the Code;
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26
"Repayment Dates" means in relation to each Tranche A and Tranche B
Term Advance, each date referred to in Clauses 12.1, 12.2, and 12.3
respectively;
"Report on Title" means the report on title in the agreed terms
prepared by the Principal Borrower's solicitors in respect of the
Properties and addressed (inter alia) to the Agent (for itself and on
behalf of the Senior Lenders);
"Reservations" means the principle that equitable remedies are
remedies which may be granted or refused at the discretion of the
court, the limitation of enforcement by laws relating to bankruptcy,
insolvency, liquidation, reorganisation, court schemes, moratoria,
administration and other laws generally affecting the rights of
creditors, the time barring of claims under the Limitation Acts, the
possibility that an undertaking to assume liability for or to
indemnify against non-payment of UK stamp duty may be void, defences
of set-off or counterclaim and similar principles and similar matters
arising under the laws of any foreign jurisdictions in which the
relevant obligations may have to be performed;
"Second Debenture" means the guarantee and debenture in the agreed
terms to be issued by each of the Initial Charging Companies (other
than the Principal Borrower) in favour of the Security Trustee to
secure their respective obligations to the Security Beneficiaries;
"Security Beneficiaries" means the Agent, the Banks, the Working
Capital Bank, the Hedging Counterparty (provided the Hedging
Counterparty is Bank of Scotland or Bank of Scotland Treasury Services
plc );
"Security Documents" means the First Debenture, the Second Debenture
and the Third Debenture, the Keyman Insurance Assignment, the Legal
Charge, the Security Trust Deed and any other documents entered into
from time to time by any Group Company to secure for the benefit of
the Security Beneficiaries or any of them any liabilities owed by any
Group Company under or in connection with the Banking Documents to
some or all of the Senior Lenders;
"Security Interest" includes any mortgage, pledge, lien, charge,
assignment by way of security, hypothecation, security interest,
standard security, assignation in security, bond and floating charge
or any other security agreement or arrangement entered into for the
purpose and having the effect of providing security (excluding
retention of title clauses) whether relating to existing or future
assets (including, without limitation the deposit of monies or
property with a person with the primary intention of affording such
person a right of set-off or lien);
"Security Trust Deed" means the security trust deed in the agreed
terms to be entered into between the Security Beneficiaries, the
Security Trustee, the Principal Borrower and the Charging Companies;
"Security Trustee" means the person described as such in the Security
Trust Deed;
"Senior Interest" is defined in Schedule 2 (Financial Definitions);
"Senior Lenders" means the Banks, the Working Capital Bank and the
Hedging Counterparty (provided the Hedging Counterparty is Bank of
Scotland or Bank of Scotland Treasury Services plc);
"Service Agreements" means service agreements in the agreed form in
respect of the Keymen;
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"Share Purchase Term Loan Facilities" means the Tranche A Term Loan
Facility and the Tranche B Term Loan Facility;
"Shares of the Principal Borrower" means any of the shares of the
Principal Borrower, including without limitation the Ordinary Shares
and the A Ordinary Shares;
"Six Monthly Period" means in each Accounting Period, each of the two
periods of six successive Monthly Accounting Periods, the first of
which commences on the first day of such Accounting Period and the
second of which ends on the last day of such Accounting Period, except
that the first Six Monthly Period shall be the Six Monthly Accounting
Period beginning on the Completion Date and ending on the second
Quarter Day following the Completion Date;
"Sterling" and "(pound)" means the lawful currency for the time being
of the United Kingdom;
"Stock" is defined in Schedule 2 (Financial Definitions);
"Strategic Sale" means a sale of the whole or a substantial part
(being more than 90% of the consolidated gross assets)of the business
assets and undertaking of the Group (taken as a whole);
"Subordinated Investors Loan" means the loan made by the Investors to
the Principal Borrower pursuant to the terms of the Investment
Agreement;
"Subordinated Lenders" means the Investors and the Managers;
"Subordinated Loans" means the Subordinated Investors Loan and the
Subordinated Managers Loan;
"Subordinated Managers Loan" means the loan made by the Managers to
the Principal Borrower pursuant to the terms of the Investment
Agreement;
"Subsidiary" means:-
(i) a subsidiary as defined in Section 736 of the Companies Act,
1985; and
(ii) for the purposes of Clause 20 (Financial Ratios) only a
subsidiary undertaking as defined in Section 258 of the Companies
▇▇▇ ▇▇▇▇;
"Summary of Borrowings being Refinanced" means the summary of the
existing banking facilities used by and available to the Target Group
as at the Completion Date in the agreed terms prepared by the Target
Group's existing bankers or such other party as Bank of Scotland shall
agree and including confirmation that no events of default are
outstanding or have been waived;
"Target" means ▇▇▇▇▇▇▇ Plc, a company incorporated in England and
Wales with registered number 445250;
"Target Group" means, at any time, Target and its Subsidiaries at that
time;
"Target Group Share Schemes" means the Approved Executive Share Option
Scheme of Target;
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"Target Shares" means the existing unconditionally allotted or issued
and fully paid shares of (pound)1 each in Target and any further such
shares which are unconditionally allotted or issued fully paid or
credited as fully paid whilst the Offer remains open for acceptance
whether pursuant to the exercise of options granted under the Target
Group Share Schemes or otherwise;
"Taxes" means all present and future taxes, levies, duties,
withholdings or similar charges of whatever nature and wherever levied
or assessed, together with interest thereon and any penalties in
respect thereof and "Taxation" shall be construed accordingly;
"Term Loan Facilities" means prior to the Amendment and Restatement
Effective Date, the Tranche A Term Loan Facility, the Tranche B Term
Loan Facility and the Tranche C Term Loan Facility and thereafter, the
Tranche A Term Loan Facility and the Tranche B Term Loan Facility, and
"Term Loan Facility" means any of them;
"Term Loans" means prior to the Amendment and Restatement Effective
Date the Tranche A Term Loan, the Tranche B Term Loan and the Tranche
C Term Loan and thereafter, the Tranche A Term Loan and the Tranche B
Term Loan, and "Term Loan" means any of them as the context requires;
"Third Debenture" means the composite guarantee and debenture in the
agreed terms to be entered into by all the Charging Companies (other
than the Principal Borrower) in favour of the Security Trustee as
trustee for the Security Beneficiaries and the expression "the
Debenture" shall where appropriate include any further guarantee and
debenture or other security executed or to be executed by one or more
Charging Companies in favour of the Security Trustee as trustee for
the Security Beneficiaries securing any liabilities incurred by any
Group Company from time to time;
"Third Debenture Date" means the date the Third Debenture is delivered
to the Security Trustee;
"Total Assets" is defined in Schedule 2 (Financial Definitions);
"Total Debt" has the meaning specified in Schedule 2 (Financial
Definitions);
"Total Debt Service" has the meaning specified in Schedule 2
(Financial Definitions);
"Total Interest" has the meaning specified in Schedule 2 (Financial
Definitions);
"Trade Debtors" has the meaning specified in Schedule 2 (Financial
Definitions);
"Tranche A Term Loan" means the principal amount of each advance made
or to be made under the Tranche A Term Loan Facility as from time to
time reduced by repayment or prepayment;
"Tranche A Term Loan Facility" means the term loan facility in the
maximum principal amount of (pound)17,250,000 made available to the
Borrowers pursuant to Clause 2 (The Facilities);
"Tranche B Term Loan" means the principal amount of each advance made
or to be made under the Tranche B Term Loan Facility as from time to
time reduced by repayment or prepayment;
"Tranche B Term Loan Facility" means the term loan facility in the
maximum principal amount of (pound)2,500,000 made available to the
Borrowers pursuant to Clause 2 (The Facilities);
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"Transaction Documents" means together the Offer Document, the
Investment Agreement, the Articles, and the Banking Documents;
"Transfer Certificate" means a certificate substantially in the form
set out in Schedule 6 (Form of Transfer Certificate for a Bank);
"Transferee" means a bank or other financial institution to which a
Bank seeks to transfer all or part of its rights and obligations
hereunder in accordance with Clause 27 (Assignments and Transfers);
"TUPE Payment" means the aggregate of all costs due to ▇▇▇▇▇▇▇
Electronic Limited employees and ex-employees arising out of the
termination of their employment prior to the date of this Agreement
and paid pursuant to TUPE legislation;
"2001 Working Capital Facility" means the overdraft and ancillary
facilities of up to (pound)10,000,000 made or to be made available in
accordance with the terms of this Agreement and the 2001 Working
Capital Facility Letter or as the case may be or as the context
requires the principal amount thereof from time to time outstanding;
"2001 Working Capital Facility Letter" means the letter dated on or
about the date of the Amendment and Restatement Agreement between,
amongst others, Bank of Scotland and the Principal Borrower setting
out the terms and conditions upon and subject to which Bank of
Scotland has agreed to make available to the Principal Borrower and
other Borrowers the 2001 Working Capital Facility (as amended from
time to time);
"UK Company" means any Group Company which is incorporated in England
and Wales or Scotland and "UK Companies" means all or any of them;
"Whitewashability Certificate" is defined in Schedule 4, Part I,
clause 4.3;
"Whitewash Directors" means the directors of the Principal Borrower at
the date of the issue of the Press Release and all those who are
intended to be or may be directors of the Principal Borrower and/or
the Initial Charging Companies at the time of intended execution of
the Pro Forma Financial Assistance Documents;
"Working Capital" has the meaning specified in Schedule 2 (Financial
Definitions);
"Working Capital Facility" means the 2001 Working Capital Facility or
the Original Working Capital Facility, as the context requires;
"Working Capital Facility Letter" means the 2001 Working Capital
Facility Letter or the Original Working Capital Facility Letter, as
the context requires (as amended from time to time);
1.2. Interpretation
1.2.1. Save where the contrary is indicated, any reference in this
Agreement to:-
(i) this Agreement or any document include references to
this Agreement or such other document as varied,
supplemented, novated and/or replaced in any manner
from time to time;
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30
(ii) any statutory provision shall be deemed to include
references to such statutory provision as from time to
time re-enacted, amended, extended or replaced;
(iii) the Principal Borrower, any Group Company, any
Borrower, any Charging Company, the Agent, any Bank,
the Senior Lenders, the Security Trustee, the
Investors, the Subordinated Lenders or any Security
Beneficiary shall, where relevant, be deemed to include
their respective successors or assignees;
(iv) the singular shall include the plural and vice versa.
1.2.2. Headings in this Agreement are for convenience only and shall
not affect its interpretation.
1.2.3. The words "including" or "in particular" are to be construed as
being by way of illustration or emphasis only and are not to be
construed as, nor shall they take effect as, limiting the
generality of any preceding words.
1.2.4. Where the expression "such consent not to be unreasonably
withheld or delayed" or similar is used in this Agreement in
relation to any consent or other approval from the Agent or any
of the Senior Lenders such expression shall be construed on the
basis of what is reasonable in relation to the interests of the
Senior Lenders applying usual lending criteria.
2. THE FACILITIES
2.1. Commitments: Subject to the terms of this Agreement:-
(i) Bank of Scotland agrees to make the Payments Accounts Overdraft
and the Banks agree to make the Share Purchase Term Loan
Facilities available to the Principal Borrower;
(ii) not restated;
(iii) the Working Capital Bank agrees to make the Working Capital
Facility available to the Borrowers.
2.2. Proportionate Participation: Each of the Banks agrees to participate
in Advances made pursuant to the Term Loan Facilities in each case in
its Participation Proportion for that Facility, up to an aggregate
maximum principal amount not exceeding its Commitment in respect of
that Facility.
2.3. Obligations Several: The obligations of each Senior Lender under this
Agreement shall be several. Failure of a Senior Lender to carry out
its obligations hereunder shall not relieve any other party hereto of
any of its obligations hereunder. Neither the Agent nor any Senior
Lender shall be responsible for the obligations of any other Senior
Lender. The Agent shall, however, promptly after becoming aware of the
same give the Principal Borrower notice of any failure by a Senior
Lender to carry out any payment obligation.
2.4. Rights Several: After the Final Repayment Date for the Facilities or
after the Agent shall have made any declaration referred to in Clause
23.2 (Rights on a Default) each Senior Lender shall
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have a separate cause of action against the Borrowers in respect of
any sums due to the Senior Lender in respect of the Facilities which
shall not have been repaid.
2.5. Separate Rights of Protection: Subject to the terms and conditions of
this Agreement and the Intercreditor Agreement, each Senior Lender may
separately protect and enforce its rights hereunder, and it shall not
be necessary for any other Senior Lender or the Agent to be joined as
an additional party in any proceedings for such purpose.
3. PURPOSE
3.1. The Payment Accounts Overdraft: The Payment Accounts Overdraft may be
used as and when required by the Principal Borrower to fund any cash
consideration payable by the Principal Borrower to shareholders of
Target after the Relevant Date. The Payment Accounts Overdraft shall
at all times, and notwithstanding any other provision of this
Agreement, be repayable on demand. The Payment Accounts Overdraft
shall be reduced to zero on each occasion it reaches(pound)250,000 or
more by a drawing under first the Tranche B Term Loan Facility and
thereafter the Tranche A Term Loan Facility and it shall in any event
be reduced to zero by the end of the Commitment Period for the Share
Purchase Term Loan Facilities. No drawing under the Payment Accounts
Overdraft shall be permitted if the amount of such drawdown would
exceed the Available Share Purchase Facility.
3.2. The Share Purchase Term Loan Facilities: Each Advance under the Share
Purchase Term Loan Facilities will be applied in or towards:
(i) financing or refinancing the consideration payable by the
Principal Borrower for the Target Shares being acquired by the
Principal Borrower either pursuant to the Offer or in the open
market or by private treaty, PROVIDED THAT an acquisition of
Target Shares otherwise than pursuant to the Offer must be
treated as an acceptance of the Offer for the purposes of
s.429(8) of the Companies ▇▇▇ ▇▇▇▇ and in any event must be made
in accordance with the Code (and after the Relevant Date, in the
open market or by private treaty); and/or
(ii) financing or refinancing the Offer Costs; and/or
(iii) financing or refinancing the consideration payable by the
Principal Borrower (including the discharge of the Payments
Account Overdraft referred to in Clause 3.1) pursuant to the
implementation of the procedures contained in Sections
428-430F of the Companies ▇▇▇ ▇▇▇▇; and/or
(iv) financing or refinancing the consideration payable to
participants in the Target Group Share Scheme pursuant to
any relevant offer on terms approved by the Agent (acting on
the instructions of the Banks); and/or
(v) repaying the Existing Borrowings being Refinanced.
3.3. Not restated;
3.4. The Working Capital Facility: The Working Capital Facility shall be
used for:-
(i) the general corporate purposes of the Borrowers; and/or
(ii) for such other purposes as the Working Capital Bank may from time
to time agree in writing;
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subject always to any restrictions in the Working Capital Facility Letter.
3.5. Unlawful Financial Assistance: None of the Facilities shall be used
for any purpose which would be contrary to the provisions of s151
Companies ▇▇▇ ▇▇▇▇, unless the provisions of s155 to s158 of that Act
are actually complied with.
3.6. Application: Without prejudice to the respective obligations of the
Principal Borrower and the Borrowers under this Clause 3 (Purpose),
neither the Agent, the Arranger, the Banks nor the Working Capital
Bank nor any of them shall be obliged nor be under any duty to concern
themselves as to the application of amounts drawndown hereunder.
4. MAXIMUM AMOUNTS
4.1. Maximum Amounts: Notwithstanding any other provision of this
Agreement:-
4.1.1. the Tranche A Term Loan shall in aggregate not
exceed(pound)17,250,000;
4.1.2. the Tranche B Term Loan shall in aggregate not
exceed(pound)2,500,000 prior to the Amendment and Restatement
Effective Date and thereafter(pound)750,000; and
4.1.3. not restated;
5. CONDITIONS PRECEDENT
5.1. Conditions to the Obligations of the Senior Lenders: The Senior
Lenders will not be obliged to advance monies under the Facilities:
(i) until the Offer shall have become or is declared unconditional in
all respects following acceptances of the Offer having been
received and not withdrawn in respect of and/or the Principal
Borrower having otherwise acquired or agreed to acquire in the
open market or by private treaty, 90% or more of the Target
Shares to which the Offer relates (or such lower percentage in
excess of 50% as the Agent may otherwise agree with the Principal
Borrower) PROVIDED THAT an acquisition of Target Shares otherwise
than pursuant to the Offer must be treated as an acceptance of
the Offer for the purposes of s.429(8) of the Companies ▇▇▇ ▇▇▇▇
and in any event must be made in accordance with the Code;
(ii) unless prior to the issue of the Press Release the Agent has
received (or waived its requirements to receive) all of the
documents and evidence listed in Part I of Schedule 4 (Conditions
Precedent) each in a form and substance satisfactory to the Agent
and the Agent upon being requested to do so shall provide written
confirmation to the Principal Borrower that the same have been
satisfied; and
(iii) unless on or prior to the first Drawdown or other utilisation of
the Facilities, the Agent has received (or waived its
requirements to receive) all of the documents and evidence listed
in Part II of Schedule 4 (Conditions Precedent) each in a form
and substance satisfactory to the Agent;
(iv) unless the Offer is posted within 28 days of the date of this
Agreement;
(v) if an Event of Default has occurred and is continuing either
under or in respect of any of the following Clauses or (whether
or not under such Clauses) arising from a wilful act or omission
of the Principal Borrower and which has not been remedied within
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33
any applicable grace period but relating only to the Principal
Borrower (and for the avoidance of doubt not to any member of the
Target Group) and which, in any case, would have a Material
Adverse Effect ("the Keystone Events of Default"):
21.11.7 (Variation or Extension of the Offer)
23.1.10 (Enforcement Proceedings) (but only if the Principal
Borrower can as a result of the default invoke Condition 8(g) of
the Offer
23.1.11 (Inability to Pay Debts)
23.1.12 (Insolvency Proceedings)
23.1.13 (Appointment of Insolvency Practitioner)
23.1.14 (Administration Order);
For the avoidance of doubt, throughout the Certain Funds Period,
the Principal Borrower shall be entitled to drawdown Advances
under the Term Loan Facilities and amounts by way of overdraft
under the Payment Accounts Overdraft and the Banks shall be
obliged to make Advances available in accordance with this
Agreement notwithstanding the occurrence of any Event of Default
or Potential Event of Default or any breach of any of the other
Banking Documents, save for the Keystone Events of Default.
5.2. Conditions for Drawdowns:
5.2.1. The obligations of the Banks to permit any Drawdown of the
Tranche A Term Loan Facility is subject to the further condition
precedent that the Tranche B Term Loan Commitment shall have been
fully drawn prior to or contemporaneously with such Drawdown.
5.2.2. The obligation of the Working Capital Bank to permit any
utilisation of the Working Capital Facility by any Borrower
(other than the Principal Borrower) is subject to the further
condition precedent that at the time of first utilisation, the
Borrowers (other than the Principal Borrower) have (save as
otherwise permitted by the Agent in writing) complied with their
obligations under (i) Clause 6.2 (Security) to deliver to the
Agent the executed Second Debenture, Keyman Insurance Assignment
and Deeds of Accession and (ii) under Clause 21.11.1 (Borrowings)
to refinance the Existing Borrowings being Refinanced and any
Security Interests relating thereto.
5.2.3. The obligation of the Working Capital Bank to permit any
utilisation of the Working Capital Facility by the Principal
Borrower is subject to the further condition precedent that the
Borrowers' obligations under clauses 21.13.7 (Re-registration as
a Private Company) and 21.13.8 (Security from the Target Group)
shall first have been complied with in full.
5.2.4. The obligations of the Banks to permit any Drawdown of any Term
Loan Facility by any Borrower other than the Principal Borrower
are subject to the further conditions precedent that the
Borrowers' obligations under clauses 21.13.7 (Re-registration as
a Private Company) and 21.13.8 (Security from the Target Group)
and in particular the obligation to deliver the Third Debenture
to the Agent pursuant to clause 21.13.8 (iii) shall first have
been complied with in full.
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5.2.5. Subject to the provisions of clause 23.3 (The Certain Funds
Period) the obligations of the Banks and the Working Capital Bank
(as the case may be) to permit any Drawdown of a Term Loan
Facility or utilisation of the Working Capital Facility are
subject to the further conditions precedent that:-
(i) at the time of the Drawdown the representations and
warranties deemed to be repeated by virtue of Clause 22.2
(Deemed Repetition of Representations and Warranties) are
true and correct in all material respects; and
(ii) at the time of any utilisation and/or the giving of any
Notice of Drawdown and on each Drawdown Date no Event of
Default or Potential Event of Default is outstanding or
would result from the making of the relevant Advances or
utilisation.
5.2.6. Not restated.
5.3. Undertakings pending Completion: the Principal Borrower undertakes to
the Senior Lenders to use all reasonable endeavours to procure the
satisfaction of the conditions precedent to this Agreement as soon as
reasonably practicable following the execution of this Agreement.
Prior to the Completion Date, the Principal Borrower undertakes:
(i) to inform the Agent forthwith of all matters of which it becomes
aware concerning the Target Group which would give rise to a
Material Adverse Effect and to consult fully with the Agent
concerning all material matters reasonably raised by the Agent
concerning the Target Group;
(ii) not to waive, agree or accept any waiver of the conditions of the
Offer which would give rise to a Material Adverse Effect without
the previous written consent of the Agent (acting on the
instructions of all of the Banks). In giving or withholding its
consent to any waiver or amendment of any conditions of the Offer
the Agent will treat itself as being bound by Rule 13 of the City
Code of Takeovers and Mergers as if it were the Principal
Borrower and subject to the jurisdiction of the Takeover Panel;
(iii) to notify the Agent immediately upon becoming aware of any
matters which are reasonably likely to result in any of the
conditions of the Offer not being satisfied or the Offer not
proceeding.
5.4. Lapse:
5.4.1. The Principal Borrower shall procure that the Press Release is
not issued until the conditions precedent set out in Part I of
Schedule 4 (Conditions Precedent) have been satisfied or duly
waived by the Agent. If the Press Release has not been issued by
the date 14 days after the signing of this Agreement, then this
Agreement shall lapse and be of no further force and effect and
the parties shall be under no further obligation to each other in
respect of this Agreement.
5.4.2. Any lapse or withdrawal of the Offer for any reason will result
in the automatic cancellation and reduction to zero of the
Commitments.
6. CONDITIONS SUBSEQUENT
6.1. Not Restated.
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35
6.2. Security: The Principal Borrower shall within 28 days after the
Relevant Date procure that each of the Initial Charging Companies
(other than the Principal Borrower) shall execute and deliver to the
Security Trustee the Second Debenture and the Initial Charging
Companies (other than the Principal Borrower) shall execute and
deliver to the Agent, Deeds of Accession, Deeds of Intercreditor
Accession and Deeds of Adherence together with each of the documents
listed in Part III of Schedule 4 (Conditions Precedent for the
Granting of Security) duly completed and executed. For the avoidance
of doubt the provisions of the Second Debenture to be delivered
pursuant to this provision shall not take effect to the extent that to
do so would constitute financial assistance for the purposes of s.151
Companies Act 1985 unless and until the requirements of s.155-158
Companies ▇▇▇ ▇▇▇▇ are complied with, as envisaged by Clause 21.13.8
(Security from the Target Group).
6.3. Shares in Target: The Principal Borrower shall:-
(i) procure that within 21 days after the Relevant Date share
certificates and stock transfer forms executed in blank (or such
other equivalent documentary evidence of title as may be
necessitated by the application of the Crest settlement system)
in respect of the shares of Target acquired by the Principal
Borrower (whether acquired pursuant to the Offer or otherwise)
are delivered to the Security Trustee by way of security except
that if the Principal Borrower has not paid for any shares
because the share certificates or letters of indemnity were not
available, then the share certificates and blank stock transfer
forms (or such other documentation) in respect of those shares
shall be delivered to the Security Trustee within six weeks of
the Principal Borrower having received the relevant certificates
or letters of indemnity; and
(ii) procure that as soon as possible after the Principal Borrower
acquires other shares in Target share certificates and stock
transfer forms executed in blank in respect of those shares of
Target (or such other equivalent documentary evidence as may be
necessitated by the application of the Crest settlement system)
are delivered by way of security to the Security Trustee to be
held by the Security Trustee in accordance with the Security
Documents.
6.4. New Articles of Target: The Principal Borrower shall deliver to the
Agent as soon as practicable after the same are adopted a certified
copy of the new subsidiary articles of association (if any) (in a form
satisfactory to the Agent) adopted by Target.
6.5. Investment Agreement: The Principal Borrower shall promptly enforce
its rights to require any party to the Investment Agreement to
subscribe for shares in the Principal Borrower as soon as such person
is required to do so by the Investment Agreement.
6.6. Statement of Opening Cash Position: The Principal Borrower shall by 1
August 1999, deliver to the Agent a detailed Statement ("Opening Cash
Statement") showing the cash position of the Target Group as at 30
June 1999 reconciled against the projected cash position as stated in
the Business Plan and calculated on the same basis. For the avoidance
of doubt the Opening Cash Statement shall exclude any monies provided
directly or indirectly by any of the Banks (save, on a pound for pound
basis, any monies drawn under the Share Purchase Term Facilities and
actually used to repay in whole or part the Existing Borrowings being
Refinanced), the Working Capital Bank, the Investors or (on or after
the date hereof) the Managers.
6.7. Opening Consolidated Balance Sheet: The Principal Borrower shall
provide to the Agent an opening consolidated balance sheet within 30
days of receipt of all the Subordinated Loans or (if earlier) by 1
August 1999.
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7. AVAILABILITY OF THE TERM LOAN FACILITIES
7.1. Availability during Commitment Period: Subject to the restrictions
contained in Clause 3.1 (Purpose: Payments Account Overdraft), Clause
3.2 (Purpose: The Share Purchase Term Loan Facilities) and Clause 3.5
(Unlawful Financial Assistance) and subject to Clause 5.1 (Conditions
Precedent) the Payments Account Overdraft and Share Purchase Term Loan
Facilities shall be made available to the Principal Borrower during
the Commitment Period for the Share Purchase Term Loan Facilities. At
the end of the Commitment Period for the Share Purchase Term Loan
Facilities, any balance on the Payments Account Overdraft shall be
cleared by a final Drawdown on the Share Purchase Term Loan Facilities
and any undrawn amount of the Share Purchase Term Loan Facilities
and/or the Payments Account Overdraft undrawn thereafter shall be
cancelled, and the limit of the Share Purchase Term Loan Facilities
shall be reduced accordingly. In the event that the Bank of Scotland
shall demand repayment of the Payments Account Overdraft there shall
be an automatic drawdown of the Share Purchase Term Loan Facilities of
such amount as may be required to clear Payment Accounts Overdraft.
The Tranche B Term Loan shall be drawndown in full before the Tranche
A Term Loan is drawn.
7.2. Available Term Loan Facility: No Notice of Drawdown under the Term
Loan Facilities shall be served if;
7.2.1. the amount of the proposed Advance is in excess of the
Available Term Loan Facility; or
7.2.2. the amount of the proposed Advance (or where Advances are
requested under more than one Term Loan Facility, the aggregate
of such Advances) is less than (pound)1,000,000 or is not a
multiple of (pound)1,000,000 or is not to clear the final balance
on the Payments Account Overdraft or for such other amount as the
Agent (acting reasonably) shall permit; or
7.2.3. the number of Advances for the time being outstanding under
each of the Term Loan Facilities after the making of the proposed
Advance would exceed four provided that there shall be permitted
in addition to such number of Advances as many other Advances as
may be required to clear the Payments Account Overdraft.
7.2.4. the number of different dates on which Interest Periods for
Advances are due to expire shall not at any time exceed 4.
7.3. Not restated.
7.4. Notice of Drawdown Required: A Drawdown under any of the Term Loan
Facilities may not be made unless a Notice of Drawdown has been
delivered to the Agent not later than noon one Business Day before the
proposed Drawdown Date or such other time as the Agent shall agree.
The first Notice of Drawdown under the Term Loan Facilities shall
confirm that:
(i) the Subordinated Loans have been (or will simultaneously with
Drawdown be) paid to the Principal Borrower in an amount
of(pound)14,205,000;
(ii) the following proceeds of subscription for shares in the
Principal Borrower have been (or will simultaneously with
Drawdown be) received in cash by the Principal Borrower or in
respect of certain of the Ordinary Shares to be subscribed by the
Managers, the Receiving Bank has received irrevocable letters of
instruction
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37
authorising an equivalent amount of the proceeds to be received
in respect of such Managers' Target Shares to be used to
subscribe for the relevant Ordinary Shares:-
Ordinary Shares (pound)1,240,000
-----------
TOTAL (pound)1,240,000
================
8. AVAILABILITY OF THE WORKING CAPITAL FACILITY
The Working Capital Facility shall be made available on the terms of the
Working Capital Facility Letter.
9. INTEREST PERIODS
9.1. Interest Periods: Except as stipulated in Clause 10.7 (Market
Disruption) and subject to Clause 10.8 (Default Interest), the
Interest Periods for each Advance shall where all or part of the Term
Loans are the subject of the Hedging Arrangements be periods of such
duration as shall equate to the interest periods (if any) applicable
to the Hedging Arrangements at least as regards the amount of the Term
Loans so hedged or in the absence of any Hedging Arrangements
applicable to the Term Loans, periods of one, three or six months'
duration as the relevant Borrower shall select or such other periods
as the Agent (acting reasonably) shall permit (in each case as
selected by such Borrower by giving not less than one Business Day
prior notice to the Agent), except in relation to the Drawdown of the
Advances on the Completion Date in respect of which notice must be
given to the Agent before noon on the Completion Date PROVIDED THAT:
9.1.1. if the relevant Borrower fails to give a notice of selection in
accordance with the above, the duration of the relevant Interest
Period shall be one month;
9.1.2. if the relevant Borrower so elects, but subject always to the
other provisions of this Agreement, it may divide an Advance into
two or more parts and designate different Interest Periods for
such parts and each part of an Advance so divided shall
thereafter constitute a separate Advance;
9.1.3. any Interest Period that would otherwise end at any time after
the Final Repayment Date shall end on that date; and
9.1.4. the relevant Borrower shall select the duration of Interest
Periods so as to ensure that each Repayment Date is also the last
day of an Interest Period for an Advance or Advances in an
aggregate principal amount at least equal to that part of the
Term Loan Facilities repayable on such Repayment Date and, to the
extent that the relevant Borrower does not do so, the Agent is
authorised to shorten an Interest Period for an Advance in order
to comply with this provision.
10. INTEREST
10.1. Rate of Interest:
10.1.1. Payments Account Overdraft: The rate of interest on the
Payments Account Overdraft shall be the Margin applicable to the
Tranche B Term Loan Facility (until
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38
the Tranche B Term Loan Facility has been drawndown in full in
which case the Margin shall thereafter be the Margin applicable
to the Tranche A Term Loan) plus Bank of Scotland's base rate
applicable from time to time.
10.1.2. Term Loans: The rate of interest on each Advance in any
Interest Period shall be a rate per annum equal to the aggregate
of:
(i) the applicable Margin;
(ii) LIBOR; and
(iii) the MLA Rate (if any).
10.2. Basis of Calculation: Interest shall be calculated by reference to
the number of days elapsed and on the basis of a 365 day year.
10.3. Payment: The Borrowers shall pay interest in arrears on each Advance
and such interest shall be paid to the Agent for the account of the
Banks on each Interest Payment Date relating to such Advance and on
the Final Repayment Date for the relevant Facility (except that if an
Interest Period is longer than six months then accrued interest shall
be paid on the first Business Day falling six months after the first
day of the Interest Period and also on the last day of such period).
10.4. Margin Reduction: Subject to Clause 10.6 (Increase of Margin), the
Margin for the Term Loans (the "Relevant Margin") after the Amendment
and Restatement Effective Date shall be 1.5% unless Total Debt
calculated as at any Quarter Day in respect of the preceding 12 month
period is less than 200 per cent. of EBITDA. In the event that it is,
then the Relevant Margin in respect of each day of the Quarterly
Period commencing on such Quarter Day shall be deemed to be 1.25 per
cent., if the Total Debt so calculated was less than 200 per cent. of
EBITDA but greater than or equal to 150 per cent. of EBITDA, and 1 per
cent, if Total Debt was calculated to be less than 150 per cent. of
EBITDA, provided that: [AK and MW to discuss]
10.4.1. the Relevant Margin shall never be reduced below 1% (one per
cent);
10.4.2. there shall be no reduction in Relevant Margin and any
existing reduction shall cease to be applicable if an Event of
Default or Potential Event of Default has occurred and is
continuing unwaived PROVIDED THAT if the only reason for the
Principal Borrower not receiving a reduction in the Margin is the
subsistence of a Potential Event of Default, the Principal
Borrower shall receive the benefit of such reduction in the
Margin as soon as it has demonstrated to the Agent that the
relevant Potential Event of Default has been remedied such that
no Event of Default actually occurs and at the relevant time no
other Event of Default has occurred and is continuing unwaived;
and
10.4.3.
if the Audited Accounts indicate that the Relevant Margin
reduction should not have been made at any time then an
additional charge for the relevant period of the reduced Relevant
Margin shall be payable by the Borrowers within 5 Business Days
of the delivery of such Audited Accounts, in an amount equal to
the interest payments that would have been paid at the relevant
higher Relevant Margin less an amount
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39
equal to the interest payment actually paid for the relevant
period.
10.5. Temporary Restitution of Relevant Margin:
The Relevant Margin shall be 1.5% (if not already such rate) if and
for so long as:
(i) the Principal Borrower fails to produce the Audited Accounts or
the Management Accounts in accordance with Clause 21.1 (Financial
Information); and/or
(ii) any other Event of Default has occurred which has not been waived
by the Agent or remedied.
The date on which such increase (if any) shall take effect shall be
the date on which the Principal Borrower was due to deliver the
Audited Accounts or the Management Accounts in accordance with Clause
21.1 (Financial Information) whether or not an Event of Default has
been declared, or the date upon which the Agent notifies the Principal
Borrower that an Event of Default has occurred which has not at the
date of such notification been waived by the Agent or remedied. In
either event such temporary increase in the Relevant Margin shall
cease to take effect when any such breach or Event of Default is
waived or remedied and the Relevant Margin shall revert to the level
that would have been applicable had the failure or other Event of
Default not occurred.
10.6. Increase of Margin: If within 90 days after the Relevant Date, the
Principal Borrower has failed to procure the satisfaction by Target
and the Initial Charging Companies (other than the Principal Borrower)
of the requirements of s.151-158 Companies ▇▇▇ ▇▇▇▇ in relation to the
Third Debenture required to be given by Target and the Initial
Charging Companies (other than the Principal Borrower) or has
otherwise failed to provide in favour of the Security Trustee the
Third Debenture duly executed by each of Target and the Charging Group
and which is fully perfected and enforceable (subject to the
Reservations) the Margin shall, notwithstanding any other provisions
of this Agreement, be increased to 3% (three per cent) for the Tranche
A Term Loan Facility and the Tranche B Term Loan Facility for so long
as such failure continues.
10.7. Market Disruption: If by reason of circumstances affecting the London
Interbank Market generally, adequate and fair means do not exist for
ascertaining LIBOR, a substitute rate shall be adopted by each Bank
which fairly expresses the cost to such Bank of funding an Advance
from whatever sources it may reasonably select after consultation with
the Principal Borrower.
10.8. Default Interest:
10.8.1. If any Borrower fails to pay any sum due under this Agreement
on its due date for payment the relevant Borrower shall on demand
by the Agent pay interest on that sum from the due date to the
date of actual payment (as well after as before judgement) at a
rate per annum determined by the Agent to be the aggregate of:
10.8.1.1. LIBOR determined on a basis the Agent may reasonably
select;
10.8.1.2. the highest Margin applicable to the Facilities on the
date of such demand;
10.8.1.3. the MLA Rate (if any); and
10.8.1.4. 2% (two per cent).
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40
10.8.2. If by reason of a Financial Event of Default the Agent becomes
entitled to exercise its rights under Clause 23.2 (Rights on a
Default) then, whether or not the Agent exercises any such rights
the rate of interest on each Advance shall thenceforth (until
remedied to the satisfaction of the Agent or waived) be a rate
per annum equal to the aggregate of the following (in lieu of the
rate prescribed by Clause 10.1.2):-
10.8.2.1. the applicable Margin;
10.8.2.2. LIBOR;
10.8.2.3. the MLA Rate (if any); and
10.8.2.4. 2% (two percent)
11. BREAK COSTS
11.1. Amount Payable: If any Bank or the Agent on its behalf receives or
recovers (including without limitation after an Event of Default), all
or part of that Bank's share of an Advance otherwise than on the last
day of the applicable Interest Period and otherwise than as a result
of the operation of Clause 18 (Change in Law or Regulations), the
Borrowers shall pay to the Agent on demand for the account of that
Bank such additional amount, certified by that Bank, (together with a
brief calculation thereof) as is necessary to compensate it for losses
(other than loss of Margin) (if any) and reasonable expenses sustained
or incurred in liquidating or re-deploying funds acquired or committed
to make, fund or maintain its Participation in such Advance for such
Interest Period.
11.2. Funding Indemnity: The Borrowers jointly and severally undertake to
indemnify each Senior Lender against any loss it may suffer as a
result of its funding an Advance or other utilisation of the
Facilities requested by any Borrower but not made by reason of the
operation of the provisions of this Agreement (and, for the avoidance
of doubt, not because of any act or omission of any Senior Lender or
the Agent).
12. REPAYMENT
12.1. Repayment of the Tranche A Term Loan:
12.1.1. The Principal Borrower shall make the following repayments of
the Tranche A Term Loan on the dates referred to below:-
Repayment Date Amount of Repayment
(last Business Day of the following
months)
06.2000 (pound) 500,000
09.2000 (pound) 500,000
12.2000 (pound) 500,000
03.2001 (pound) 500,000
06.2001 (pound) 500,000
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41
09.2001 (pound) 500,000
12.2001 (pound) 0
03.2002 (pound) 0
06.2002 (pound) 0
09.2002 (pound) 0
12.2002 (pound) 0
03.2003 (pound) 750,000
06.2003 (pound) 750,000
09.2003 (pound) 750,000
12.2003 (pound) 750,000
03.2004 (pound) 750,000
06.2004 (pound) 750,000
09.2004 (pound) 750,000
12.2004 (pound) 750,000
03.2005 (pound) 750,000
06.2005 (pound) 750,000
09.2005 (pound) 750,000
12.2005 (pound) 750,000
03.2006 (pound) 750,000
06.2006 (pound) 750,000
09.2006 (pound) 750,000
12.2006 (pound) 750,000
03.2007 (pound) 750,000
06.2007 (pound) 750,000
09.2007 (pound) 750,000
-----------------
(pound)17,250,000
12.1.2. The Principal Borrower shall not be entitled to reborrow any
amount repaid in accordance with this Clause 12.1.
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42
12.2. Repayment of the Tranche B Term Loan
12.2.1. The Borrowers shall make the following repayment of the
Tranche B Term Loan on the date referred to below:
Repayment Date Amount of Repayment
The last Business Day in December (pound)750,000
2007
12.2.2. The Principal Borrower shall not be entitled to reborrow any
amount repaid in accordance with Clause 12.2.
12.3. Repayment of the Tranche C Term Loan
Not Restated.
12.4. Mandatory Repayment: Notwithstanding any other provision of this
Agreement, if there is:-
12.4.1.1.1.1. a Change of Control; or
12.4.1.1.1.2. a Flotation; or
12.4.1.1.1.3. a Strategic Sale;
then the Agent shall (but subject always to the provisions of clauses
5.1(v) and 23.3), at the request of the Majority Banks, by notice in
writing to the Principal Borrower, demand the repayment of all amounts
for the time being outstanding in respect of the Facilities
If such demand is made the Facilities shall be cancelled and All
Outstanding Amounts shall become immediately due and payable by the
relevant Borrowers together with all interest, fees and other amounts
payable hereunder in respect thereof.
For the purposes of this Clause 12.4, a Change of Control shall be
deemed to have occurred if the Principal Borrower becomes a direct
subsidiary of any company (other than in consequence of a
reorganisation or amalgamation which is not materially prejudicial to
the interests of the Banks) which does not, if so requested by the
Agent in writing, become a guarantor of the obligations of the
Principal Borrower and its Subsidiaries as if Clause 21.13.9 had been
applicable.
13. PREPAYMENT
13.1. Voluntary Prepayment: The Principal Borrower may at any time (but
subject always to Clause 11 (Break Costs)) elect to prepay any Term
Loan by giving the Agent an appropriate Prepayment Notice PROVIDED
THAT the Principal Borrower shall not make any prepayment of the
Tranche B Term Loan until all other Facilities have been repaid (if
drawn) or cancelled (if undrawn). If the prepayment is of part only of
the Term Loans it must be in an amount of not less than (pound)250,000
and be a multiple of (pound)250,000. The relevant Borrower shall be
obliged to make such prepayment on the date specified in the relevant
Prepayment Notice.
13.2. Accrued Interest on Prepayments: All prepayments under this Agreement
shall be made together with accrued interest thereon and all other
amounts due and payable hereunder in relation thereto.
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43
13.3. Proceeds of Disposals: The proceeds of Permitted Disposals by any
Group Company may be retained by that Company except where the Agent's
consent (or that of the relevant Senior Lenders) to any such disposal
otherwise requires. Where any such proceeds are to be applied to
reduce the Facilities the net proceeds (after taking into account any
Taxes or reasonable expenses relating to such Disposal) shall (to the
extent in each case such reduction shall not be in breach of any
applicable law prohibiting financial assistance PROVIDED THAT the
Principal Borrower shall be under an obligation to use its best
endeavours to procure the compliance by the relevant Group Company
with such applicable laws or regulations relating thereto which would
permit such financial assistance to be given) be applied (unless the
Agent acting on the instructions of the Majority Banks otherwise
agrees) to reduce the Facilities in the following order:-
13.3.1.1.1.1. the Tranche A Term Loan;
13.3.1.1.1.2. the Tranche B Term Loan; and
13.3.1.1.1.3. the Working Capital Facility;
in each case against such Advances as the Borrowers may select and
advise the Agent, subject always to the order specified above. Any
amount repaid pursuant to this Clause 13.3 will reduce the relevant
Facility by the amount repaid. For the avoidance of doubt, no
prepayment fee shall be payable in respect of a prepayment made under
this Clause 13.3. With the consent of the Agent, such consent not to
be unreasonably withheld or delayed, such proceeds may, instead of
being applied immediately to reduce the Facilities, be so applied on
the next Interest Payment Date or Dates. When the Term Loans have been
repaid in full any surplus arising from Disposals shall be held in a
Cash Collateral Account to secure the Working Capital Facility until
the Working Capital Facility is demanded or cancelled and thereafter
shall be freely available to the depositing Borrower.
13.4. When any prepayment of the Term Loans is made the amount so prepaid
shall if it is compulsory be applied to reduce the remaining scheduled
repayments the Term Loans.
13.5. Not restated.
14. PREPAYMENT AND/OR CANCELLATION OF THE FACILITIES
14.1. Not restated.
14.2. Effect of Cancellation: Any cancellation of the Facility in part
shall reduce the Commitment of each Bank in relation to the Facility
pro rata to its then existing Commitment in respect of that Facility.
No amounts cancelled shall be reinstated or be available for
re-drawing. The Principal Borrower may not cancel the whole or any
part of the Facilities except in accordance with this Clause 14.
14.3. Not Restated.
15. PAYMENTS
15.1. Payments to be made without Deduction: Subject to Clause 16.1
(Grossing Up of Payments) all payments to be made by the Borrowers in
respect of the Facilities (whether of principal, interest, fees or
otherwise) shall be made free and clear of and without any deduction
for or on account of any set-off or counterclaim or (except to the
extent compelled by law) any deduction on account of any Applicable
Taxes.
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44
15.2. Payments by the Borrowers: Each payment due to the Senior Lenders
and/or the Agent from the Borrowers or any of them under this
Agreement (whether of principal interest fees or otherwise) shall be
made in Sterling to the Agent (for the account of the Senior Lenders
or the Agent as the case may be) in immediately available freely
transferable cleared funds not later than 11.00 a.m. on the due date
to such account at such branch in the United Kingdom as the Agent
shall have notified to the Principal Borrower.
15.3. Payments by the Agent: Where any sum is to be paid under this
Agreement to the Agent for the account of the Senior Lenders, the
Agent shall not be obliged to pay the same to the Senior Lenders until
it is satisfied that it has actually received such sum. It may,
however, assume that it has received such sum and, if it does make
such a payment when in fact it had not actually received the relevant
sum, the Senior Lender to which such payment has been made shall
forthwith on demand refund the amount of such payment to the Agent
together with interest thereon at the rate determined by the Agent as
being the cost to the Agent of funding such amount for the period
until receipt by the Agent thereof.
15.4. Distribution of Payments: Unless otherwise provided in this
Agreement, all payments made to the Agent by the Borrowers (or any of
them) for the account of the Banks shall be promptly distributed by
the Agent among the Banks in the same proportions as their respective
Participations in the relevant Advance and in like funds as they are
received by the Agent.
15.5. Partial Payments: In the case of a partial payment by the Borrowers
in respect of any sums due to the Banks hereunder, the Agent may
appropriate such payment towards such of the obligations of the
Borrowers under this Agreement as the Agent may decide or the Banks
shall direct but in either case always pro-rata to the respective
Participations of the Banks. The Borrowers waive any right to make an
appropriation in respect of a partial payment. Any appropriation by
the Agent or the Banks shall apply to the exclusion of any actual or
purported appropriation by any Borrower.
15.6. Business Days: If any date for payment of any sum due is not a
Business Day then such payment shall be made on the next following
Business Day or, if that Business Day would fall in the following
month, such payment shall be made on the preceding Business Day.
15.7. Advances under the Term Loan Facilities: All amounts to be advanced
to the Principal Borrower under the Term Loan Facilities, other than
amounts in relation to:
(i) Offer Costs, which shall be made to the account of the Principal
Borrower notified to the Agent in writing within 10 days from the
date of this Agreement;
(ii) amounts due to shareholders of Target pursuant to the provisions
of Sections 428-430F of the Companies ▇▇▇ ▇▇▇▇, which shall be
paid to Target to be held in accordance with Section 430 of the
Companies ▇▇▇ ▇▇▇▇;
(iii) payments to reduce the Payments Account Overdraft;
(iv) share scheme payments contemplated by Clause 3.2(iv); or
(v) payments to repay Existing Borrowings being Refinanced;
shall, save as the Principal Borrower and the Agent may otherwise
agree, be transferred to the Receiving Bank Account against receipt of
forms of acceptance and share certificates or documents of title or an
acceptable indemnity in lieu thereof relating to the Target Shares in
respect of which payment is to be made pursuant to the Offer.
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45
15.8. Cash Collateral Accounts:
15.8.1. Whenever any Borrower is required under the terms of this
Agreement to provide an amount by way of cash cover or cash
collateral or elects so to do it shall do so by paying such
amount as the Agent may direct for the credit of a Cash
Collateral Account;
15.8.2. Amounts standing to the credit of a Cash Collateral Account
shall bear interest at 0.25% below Base Rate. Such interest
shall:-
15.8.2.1.1.1. be added to the balance on the Cash Collateral
Account unless the Agent holding such deposit otherwise
allows;
15.8.2.1.1.2. if an Event of Default or a Potential Event of
Default shall have occurred and is continuing, at the
discretion of the Agent, either accrue to the Cash
Collateral Account or be applied by the Agent in discharge
of interest or other amounts then due hereunder;
15.8.3. The Agent may direct the Borrowers or any of them to subdivide
the Cash Collateral Account, whether by opening associated
accounts which shall also be Cash Collateral Accounts, for the
purpose of segregating amounts of cash cover;
15.8.4. Whenever a Cash Collateral Account is established or further
monies placed in a Cash Collateral Account, each Borrower shall,
if so required by the Agent, forthwith either:-
(i) enter into a Cash Collateral Charge in respect of such Cash
Collateral Account; and/or
(ii) enter into a letter of agreement in relation to such Cash
Collateral Account conferring set-off and similar rights in
favour of the Agent on behalf of the Senior Lenders. Without
prejudice to the provisions of this Clause 15.8 if a Cash
Collateral Account is established with the Agent then:-
(a) following the occurrence of an Event of Default the
Agent shall be entitled to set-off the credit balance
on any Cash Collateral Account against the relevant
Group Company's obligations to the Senior Lenders under
the Banking Documents;
(b) the amounts standing to the credit of the Cash
Collateral Account shall not be repayable to the
relevant Group Company (save as otherwise provided
herein or in any of the other Banking Documents) unless
and until all outstanding payments and liabilities
under this Agreement have been repaid and discharged in
full; and
(c) the relevant Group Company shall not be entitled to
assign, charge or otherwise deal with the Cash
Collateral Account or any credit balances thereon
except to the extent necessary to comply with this
Clause 15.8.4
16. TAXES
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46
16.1. Grossing Up of Payments: If any Borrower is compelled by law to
withhold or deduct any applicable Taxes from any sum payable hereunder
otherwise than as a result of a Bank not being or ceasing to be a
Qualifying Lender:
16.1.1. the sum so payable by the relevant Borrower shall be increased
("the Increased Amount") so as to result in the receipt by the
Agent and/or each Senior Lender (as the case may be) to whom such
sum is due of a net amount equal to the full amount expressed to
be payable hereunder;
16.1.2. the relevant Borrower shall deliver to the Agent as soon as
reasonably practicable, evidence reasonably satisfactory to the
Agent evidencing the payment by the relevant Borrower to the
appropriate authority of all amounts so required to be withheld
or deducted; and
16.1.3. if as a result of any additional payment by any Borrower under
Clause 16.1.1 the Agent and/or any Senior Lender obtains any tax
credit (not otherwise taken into account in determining the
amount necessary to compensate the Agent or Senior Lender
pursuant to Clause 16.1.1) then the Agent or that Senior Lender
(as the case may be) shall pay to the Borrower an amount equal to
such tax credit;
provided that Increased Amounts shall only be payable by any
Borrower to any person under this Clause if and so long as such
person is and continues to be a Qualifying Lender.
16.2. Exemptions from Gross Up: No Increased Amount will be payable to a
Bank under Clause 16.1 in respect of Applicable Taxes to the extent
that (i) such Bank fails to take all reasonable steps to comply with
any certification, identification, information, documentation or other
reporting requirement if such compliance is required by law,
regulation, administrative practice or an applicable treaty as a
precondition to exemption from or reduction in the rate of deduction
or withholding of any taxes for which the relevant Borrower is
required to pay Increased Amounts pursuant to Clause 16.1 as soon as
practicable after the relevant Borrower shall have notified the
relevant Bank in writing that it would be required to comply with such
requirement or (ii) such Applicable Tax constitutes fines or penalties
imposed solely as a result of a Bank's act or omission.
17. INCREASED COST
17.1. Compensation for Increased Cost: If as a result of:-
(i) the enactment of or change in any applicable law, regulation, or
directive or in the interpretation thereof, in each case, after
the date hereof; or
(ii) compliance by any Senior Lender with any request (whether or not
having the force of law but if not having the force of law, being
a regulation, treaty, official directive, official request or
rule with which it is the practice of banks to comply) of any
central fiscal monetary or regulatory authority issued after the
date hereof; or
(iii) the imposition or modification after the date hereof of any
capital adequacy requirements applicable to any Senior Lender and
affecting banks generally; or
(iv) any Senior Lender becoming subject to any Tax in respect of its
participation in the Facilities or any change in the basis of
Taxation of any payment made or to be made to any Senior Lender
under the Banking Documents, in each case, occurring after the
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47
date hereof (except in each case for Tax on the overall net
income or profits of that Senior Lender) any of the following
consequences follow:-
(a) a Senior Lender incurs an increased cost as a result of its
having entered into any of the Banking Documents or
performing its obligations thereunder or as a result of
assuming or maintaining its Commitment or Participation in
the Facilities; or
(b) any sum received or receivable by a Senior Lender under any
of the Banking Documents or the effective return to it
thereunder is reduced (except on account of Tax on its
overall net income or profit);
(c) a Senior Lender having by law to make any payment (except on
account of Tax on its overall net income) or forego any
interest or return calculated by reference to any amount
received or receivable by it under the Banking Documents;
the Borrowers shall indemnify each Senior Lender against such
increased cost, reduction, payment or foregone interest or other
return (except to the extent the Borrowers have compensated the
Senior Lender by virtue of any other provisions of this Agreement
or would have compensated the Senior Lender but for the operation
of the proviso to Clause 16.1) and, accordingly, the Borrowers
shall, from time to time on demand (whenever made) pay to the
Agent for the account of the relevant Senior Lender the amount
certified by such Senior Lender to be necessary to indemnify it
on such a basis in a certificate setting out the calculation of
the amount in reasonable detail but so that the Borrowers will
not be liable to pay any sum under this Clause to a Senior Lender
which is not or ceases to be a Qualifying Lender in excess of the
amount they would have paid hereunder if the Senior Lender had at
all times been a Qualifying Lender.
17.2. Limitations on Increased Costs Claims: No Borrower shall be obliged
to compensate any Bank under Clause 17.1 (Compensation for Increased
Cost) in respect of any increased cost which is:
(i) compensated for by payment of the MLA Rate;
(ii) attributable to any change in the rate of tax on the overall net
income of any Bank;
(iii) attributable to any Bank incurring after the date of this
Agreement, a commitment to lend (or lending pursuant to any such
commitment) in breach of any requirement in force at that time of
any central bank or other fiscal, monetary or other authority
having jurisdiction over the Bank;
(iv) incurred by the Bank where that Bank fails to notify the relevant
Borrower of the increased costs within six months of it becoming
aware of the same; or
(v) (for the avoidance of doubt) arising as a result of the
implementation of the paper entitled "International Convergence
of Capital Measurement and Capital Standards" dated July 1988 and
prepared by the Basle Committee on Banking Regulations and
Supervision, as amended in November 1991, in the manner in which
it is required or proposed to be and/or is being implemented at
the date hereof.
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48
18. CHANGE IN LAW OR REGULATIONS
Illegality: If, as the result of the introduction of, or any change in, any
applicable law, regulation directive or regulatory requirement or any
change in the interpretation or application thereof, in each case after the
date hereof it becomes unlawful for a Senior Lender to maintain or give
effect to its obligations as contemplated by any of the Banking Documents,
then the Senior Lender shall as soon as reasonably practicable thereafter,
inform the Agent and the Principal Borrower to that effect whereupon its
obligation to permit the Facilities to remain outstanding shall forthwith
terminate and the Borrowers shall prepay, on the latest available date
permitted by the relevant law, regulation or directive or requirement to
the Senior Lender all sums as shall be outstanding to that Senior Lender
together with accrued interest thereon.
19. MITIGATION
19.1. Mitigation: If any of the Borrowers becomes obliged to pay any
additional amounts (or in the case of Clause 18 (Change in Law or
Regulations) to prepay) to the Agent or any Senior Lender pursuant to
Clauses 10.7 (Market Disruption), 16 (Taxes), 17 (Increased Cost) or
18 (Change in Law or Regulations), each Senior Lender to whom such
additional amounts or prepayment (as the case may be) are payable
shall, without prejudice to the provisions of those Clauses take such
steps after consultation with the relevant Borrower in relation to the
Borrowers and/or the provision of the Facilities as may be reasonable
to avoid or mitigate the payment of such additional amounts or
prepayment (as the case may be).
19.2. Right to Prepay: If any of the Borrowers becomes obliged pursuant to
Clause 10.7 (Market Disruption), Clause 16 (Taxes), Clause 17
(Increased Cost) or Clause 18 (Change in Law or Regulations) to make
any additional payments(or in the case of Clause 18 (Change in Law or
Regulations) to prepay), then, for so long as the circumstances giving
rise to such payment continue, the Borrowers may prepay in accordance
with Clause 13.1 (Voluntary Prepayment) the whole but not part of the
Participation in the Facilities of any Senior Lender to whom such
additional payments are payable or illegality relates, together with
all accrued interest and all other sums payable hereunder for the
account of such Senior Lender.
20. FINANCIAL RATIOS
20.1. Financial Covenants: The Principal Borrower shall procure that:-
20.1.1. During the term of the Facilities and so long as any part of
the Term Loans remain outstanding:
The Adjusted Net Worth: the Adjusted Net Worth, to be
measured by reference to the relevant Audited Accounts and
Management Accounts (as appropriate) at the end of each
Quarterly Period, will be greater than the amount set out
opposite such period:
Period (pound)
At all times after the Amendment and Restatement (pound)25,000,000
Effective Date
--------------------------------------------------------------------------------
49
20.1.2. During the term of the Facilities and so long as the Term
Loans remain outstanding:-
20.1.2.1. Assumed Senior Interest Cover: the EBIT to Assumed
Senior Interest at the end of each period referred to below
shall equal or exceed the ratio set out opposite such period
such ratio to be measured by reference to the Management
Accounts and calculated on a rolling 12 month basis by
reference to the twelve months ending on the last day of the
relevant period except that the first occasion on which this
covenant shall be tested shall be 31 March 2000 by reference
to the Management Accounts in respect of the period from the
Full Drawdown Date to 31 March 2000;
Period Ratio
the Full Drawdown Date to 31 March 2000 2.5:1
1 July 1999 to 30 June 2000 2. 5:1
1 October 1999 to 30 September 2000 2.75:1
1 January 2000 to 31 December 2000 2.9:1
1 April 2000 to 31 March 2001 3:1
1 July 2000 to 30 June 2001 3.3:1
1 October 2000 to 30 September 2001 3.75:1
1 January 2001 to 31 December 2001 4:1
1 April 2001 to 31 March 2002 and 4:1
thereafter, each period of twelve
consecutive Monthly Accounting Periods
ending on 30 June, 30 September, 31
December or 31 March
20.1.2.2. Total Debt to EBITDA: the ratio of Total Debt to EBITDA
at the end of each period referred to below shall be less
than the ratio set out opposite such period such ratio to be
measured by reference to the relevant Management Accounts
and where applicable, the Audited Accounts and calculated on
a rolling 12 month basis by reference to the twelve months
ending on the last day of the relevant period;
Period Ratio
Each period of twelve
consecutive 3:1
Monthly Accounting Periodsending
on 30 September, 31 December, 31
--------------------------------------------------------------------------------
50
Period Ratio
March or 30 June
20.2. Verification:
20.2.1. The Principal Borrower shall, unless the Agent agrees to the
contrary, each year instruct the Auditors, at the same time that
the Principal Borrower delivers the Audited Accounts to the
Senior Lenders, to deliver to the Agent a certificate addressed
to the Agent (for itself and as agent for the Senior Lenders)
certifying whether or not the financial covenants in Clause 20.1
(Financial Covenants) have been complied with at the end of the
Accounting Period covered by the Audited Accounts and such
certificate shall have annexed to it brief particulars of the
supporting numbers and ratios and may contain such qualifications
and assumptions as the Auditors shall reasonably consider
appropriate.
20.2.2. The Agent may (and only if it has reasonable grounds believing
that the covenants contained in Clause 20.1 have not been
complied with.) require the Auditors to verify compliance with
the same or the Agent may (and only if after consultation with
the Investors it has reasonable grounds for forming that belief)
require the Auditors or, as the Agent shall determine, an
independent firm of accountants acceptable to the Agent to carry
out an appropriate investigation into the financial affairs of
the Group and give a certificate in a form and content
satisfactory to the Agent certifying such matters as the Agent
may reasonably request for the relevant period. The costs of
compliance with such requirements shall be borne by the Principal
Borrower only once in any Accounting Period so that any
additional third party costs shall be borne by the Banks.
20.2.3. At the same time that the Principal Borrower delivers the
Management Accounts to the Agent for those periods by reference
to which the financial covenants are to be tested, the Principal
Borrower shall deliver to the Agent a certificate (addressed to
the Agent, for itself and as agent for the Senior Lenders)
certifying whether or not the financial covenants in Clause 20.1
(Financial Covenants) have been complied with at the end of the
relevant testing period and such certificate shall have annexed
to it brief particulars of the supporting numbers and ratios.
21. COVENANTS
During the term of the Facilities and for so long as the Term Loans or any
other monies under this Agreement remain outstanding:
21.1. Financial Information: The Principal Borrower shall unless the Agent
(acting on the instructions of all the Banks) otherwise agrees in
writing:-
21.1.1. deliver to the Agent for distribution to the Senior Lenders copies
in sufficient numbers for all of them of:-
(i) Audited Accounts of the Principal Borrower: the audited
-------------------------------------------
consolidated profit and loss account, balance sheet and cashflow
statements of the Principal Borrower for each Accounting Period
ending after the date hereof as soon as the same are available
but in any event not later than 120 days, from the end of the
Accounting Period to which the accounts relate;
--------------------------------------------------------------------------------
51
(ii) Audited Accounts of Group Companies: the audited profit and loss
------------------------------------
accounts, balance sheets and cashflow statements of any Group
Company for each Accounting Period ending after the date hereof
as soon as the same are available but in any event not later than
120 days, from the end of the Accounting Period to which they
relate;
(iii) Management Accounts:
--------------------
(aa) Management Accounts for the Group on a consolidated basis
within 30 days after the end of each Monthly Accounting
Period, except that the first such consolidated Management
Accounts shall be produced in respect of the Monthly
Accounting Period commencing immediately after the Relevant
Date PROVIDED THAT in relation to the Monthly Accounting
Period in which the Relevant Date occurs, the Principal
Borrower shall also deliver to the Agent Management Accounts
for each prior Monthly Accounting Period in the then current
Accounting Period incorporating a comparison of actual
EBITDA against budgeted EBITDA for that period;
(bb) Management Accounts for each Group Company within 45 days
after the end of each Six Monthly Period, except that the
first such Management Accounts shall be produced in respect
of the period commencing at the start of the then current
Accounting Period;
such Management Accounts to be approved (without personal
liability on their part) by two directors for and on behalf of
the Principal Borrower as being a fair and reasonable view of the
financial condition and trading performance of the Group within
the normal constraints of management information;
(iv) Commercial Briefing: at the same time as the delivery of the
--------------------
Management Accounts, a written report by the managing director
(or in his absence the finance director) of the Principal
Borrower commenting on the performance of each operating Group
Company (including the numbers relating to the key performance
indicators) the main operational and financial issues arising in
or applicable to the period and explaining any material variances
against the Budget for the Accounting Period to date detailing
any off-balance sheet financing arrangements together with such
other reports information and statistics as the Agent may from
time to time reasonably require;
(v) Other Information: any other information material to the business
------------------
or financial condition of any Group Company which the Agent or
the Majority Banks may, after consultation with the Investors,
reasonably request from time to time.
21.2. Preparation of Financial Information: The Principal Borrower shall
(unless the Agent otherwise consents in writing):-
21.2.1. Consistent Basis of Preparation: ensure that subject to Clause
21.3 (Variations in Accounting Treatment), all accounts and other
financial information submitted to the Agent are prepared using
accounting bases, policies, practices and procedures
--------------------------------------------------------------------------------
52
("accounting principles") consistent (so far as applicable) in
all material respects and in accordance with generally accepted
United Kingdom accounting principles or, to the extent they are
not, that the differences are highlighted and explained;
21.2.2. Restriction on Changing Accounting Reference Date: ensure that
no Group Company shall alter its Accounting Period without first
notifying the Agent (in which event the Agent and the Principal
Borrower shall seek to agree, and thereafter implement, such
changes to the financial covenants contained in this Agreement as
may be necessary to reflect such change but in the absence of
such agreement as the Auditors after consultation with the Agent
shall consider appropriate and notify to the Agent and the
Principal Borrower) and the Principal Borrower shall procure that
the accounting reference dates of each Group Company shall be the
same.
21.3. Variations in Accounting Treatment: If:
(i) any accounts (so far as is applicable) delivered to the Agent
hereunder have not been prepared in accordance with generally
accepted United Kingdom accounting principles in force as at the
date hereof ("Present UK GAAP"); or
(ii) any accounts delivered to the Agent hereunder have not been
prepared in accordance with the accounting principles which were
applied in the immediately preceding equivalent accounts,
(including without limitation any change in depreciation policy);
the Principal Borrower shall promptly so advise the Agent and
provide reasonable details of the differences and the reasons
therefor and, for the purpose of the covenants contained in
Clause 20 (Financial Ratios) the Agent and the Principal Borrower
shall seek to agree such changes (if any) to such financial
covenants as will reflect fairly and reasonably the changes which
have been made but in the absence of such agreement:-
(a) the Principal Borrower may provide the Agent as soon as
reasonably practicable with revised accounts prepared by the
Principal Borrower showing what the position would have been
had the accounts in question been prepared in accordance
with Present UK GAAP. The Agent may consult with the
Auditors (subject to the agreement of satisfactory terms of
engagement between the Auditors the Principal Borrower and
the Agent) in respect of such changes in accounting
principles and require the Auditors to confirm that the
revised accounts properly reflect the adjustments that need
to be made to restate the accounts on a basis consistent
with the immediately preceding accounts; and/or
(b) either the Agent or the Principal Borrower may instruct the
Auditors (subject to the agreement of satisfactory terms of
engagement between the Auditors the Principal Borrower and
the Agent) to make such changes to the financial covenants
as they consider appropriate to reflect fairly and
reasonably the changes which have been made.
21.4. Annual Budget: The Principal Borrower shall not later than four weeks
before the beginning of (a) the Accounting Period commencing on 1
April 2000 and (b) each Accounting Period thereafter submit to the
Agent itemised company and consolidated capital and revenue budgets
and cashflow and balance sheet forecasts for the Group in a format
acceptable to the Agent acting reasonably and shall discuss with the
Agent the calculations and workings relating to such budgets provided
that, in respect of the Accounting Period beginning on 1 January 2002,
--------------------------------------------------------------------------------
53
such budgets and forecasts need not be delivered by the Principal
Borrower to the Agent until 31 January 2002. The Principal Borrower
shall make a presentation to the Banks in relation to such Annual
Budget at such time as the Agent may reasonably require. For the
period to 31 March 2000 , the Annual Budget shall be the Financial
Model to the extent that it relates to such period.
21.5. Capex Budget
21.5.1. The Principal Borrower shall each year submit to the Agent for
approval (not to be unreasonably withheld or delayed) at the same
time as the Principal Borrower submits the Annual Budget, a Capex
Budget in a format and content acceptable to the Agent, acting
reasonably, showing, inter alia:-
(i) the maximum aggregate amount of capital expenditure to be
incurred by each Group Company during the relevant
Accounting Period and the class or classes of assets to be
acquired;
(ii) the amount and nature of any capital expenditure approved in
the immediately preceding Capex Budget which has not been
incurred in the Accounting Period to which that Capex Budget
relates but which a Group Company is committed to incur in
the next Accounting Period; and
21.5.2. The overall amount of the Capex Budget once approved by the
Agent shall not be amended by the Principal Borrower without the
prior written consent of the Agent, such consent not to be
unreasonably withheld or delayed.
21.6. Capital Expenditure: The Principal Borrower shall procure that the
aggregate capital expenditure of the Group shall not, without the
prior written consent of the Agent, (such consent not to be
unreasonably withheld or delayed) exceed by more than 10% the
projected aggregate capital expenditure for all Group Companies for
that Accounting Period contained in the Capex Budget.
21.7. Other Asset Acquisitions: The Principal Borrower shall procure that
no Group Company shall without the consent of the Agent acting on the
instructions of the Majority Banks (such consent not to be
unreasonably withheld or delayed) incur or agree to incur any
expenditure in excess of (pound)50,000 in any Accounting Period on the
acquisition of assets or businesses other than:-
(i) expenditure incurred in the normal course of trading;
(ii) expenditure permitted pursuant to Clause 21.6 (Capital
Expenditure)or Clause 21.11.3 (Joint Enterprises and other
Investments);
(iii) expenditure incurred in connection with the acquisition of the
Target;
(iv) expenditure in connection with any permitted short term
investments referred to in sub-clause (xi) of the definition of
Permitted Disposals.
21.8. Disposals: The Principal Borrower shall not (and shall procure that
no other Group Company shall) without the prior written consent of the
Agent acting on the instructions of the Majority Banks make or agree
to make a Disposal other than a Permitted Disposal.
--------------------------------------------------------------------------------
54
No Charging Company shall be entitled to dispose of any assets which
are subject to a fixed charge or other fixed security without giving
prior notice to and receiving consent from the Agent acting on the
instructions of the Majority Banks, but the Agent shall be obliged to
promptly give such consent and execute any relevant release (of
security or otherwise) in relation to Permitted Disposals (without any
requirement that such proceeds of such Disposal be applied to reduce
the Facilities save in relation to a Permitted Disposal arising under
paragraph (vii) of the definition of Permitted Disposals) without
reference to the Senior Lenders unless it is actually aware of the
occurrence of an Event of Default or a Potential Event of Default
which, in either case, has not been waived by the Agent or remedied;
21.9. Not Restated
21.10. Reduction of Capital: The Principal Borrower shall not (without the
prior written consent of the Agent acting on the instructions of the
Majority Banks):
(i) make any distribution of capital (whether in cash or in specie)
to its members; or
(ii) redeem or purchase any of its shares other than in connection
with syndication to a Syndicate (as defined in the Investment
Agreement and Articles); or
(iii) otherwise reduce its capital with the exception of the
application of transaction costs and/or goodwill to share premium
account.
unless and until there has occurred or will contemporaneously
occur the permanent repayment of All Outstanding Amounts and the
cancellation of the Facilities;
21.11. Other Restrictions subject to Majority Banks' Consent: The Principal
Borrower shall not (and shall procure that no other Group Company
shall) without the prior written consent of the Agent (acting on the
instructions of the Majority Banks save for Clause 21.11.7 (Variation
or Extension of the Offer) which shall require the instructions of all
of the Banks):
21.11.1. Borrowings: incur Borrowings other than Permitted Borrowings.
----------
The Principal Borrower shall procure that as soon as reasonably
practical and in any event within 42 days after the Relevant Date
all Borrowings falling under sub-clause (viii) of the definition
of "Permitted Borrowings" but not covered by any other sub-clause
of Permitted Borrowings shall be repaid or discharged ("the
Existing Borrowings being Refinanced"). Where the Existing
Borrowing being Refinanced include any guarantees or other
contingent liabilities and the Banks or Working Capital Bank
agree to provide replacement guarantees or counter indemnities
(or other similar instruments entailing the Banks or Working
Capital Bank incurring contingent liabilities) ("Replacement
Instruments") the relevant Borrowers whose obligations are being
guaranteed or counter indemnified shall, as a precondition to
such Replacement Instruments being issued, drawdown from the Term
Loan Facilities or the Working Capital Facility as appropriate, a
sum equal to the maximum potential liability under the
Replacement Instruments and place it with the Agent in a separate
nominated deposit account. That account shall be treated as if it
were a Cash Collateral Account. The fee for each Replacement
Instrument shall be equal to the Margin for the Facility from
which the cash-backing is drawn;
21.11.2. Security Interests: create or permit to subsist any Security
------------------
Interest(other than Permitted Security Interests) over any of its
assets from time to time;
--------------------------------------------------------------------------------
55
21.11.3. Joint Enterprises, Other Investments and Change of Business:
-----------------------------------------------------------
merge or consolidate with any other entity or enter into or
voluntarily terminate any Joint Venture and not make any
Investment of any type (including by paying purchase
consideration of any type or assuming any liability) in any
corporate entity, Joint Venture, partnership or other entity
other than Permitted Investments, or materially change the nature
of its business;
21.11.4. Loans and Guarantees: make any loans or grant any credit or
--------------------
give or permit to subsist any guarantee of any of the
indebtedness of any person or make any repayments in relation to
any existing loans, indebtedness or guarantees other than:-
(i) normal trade credit;
(ii) loans and the granting of credit to Charging Companies
(including for the avoidance of doubt the repayment of such
loans or indebtedness);
(iii) guarantees given to a third party by one Charging Company
in respect of the performance obligations of another Group
Company or Group Companies;
(iv) loans and the granting of credit or the giving of guarantees
which have been approved in writing by the Majority Banks;
(v) loans and guarantees to or for the benefit of employees of
UK Companies not exceeding in aggregate at any
time(pound)50,000;
(vi) loans and guarantees made or given by the Target Group prior
to the Relevant Date, provided that:
(a) the Principal Borrower shall use its reasonable
endeavours to procure the prompt repayment or release
of such loans or guarantees;
(b) the terms and conditions are not amended to the
material prejudice of the Target Group, and the
principal amount of such loans and guarantees is not
voluntarily increased after the Relevant Date;
(vii) any other loans and/or guarantees to UK Companies not
exceeding in aggregate(pound)100,000 in any Accounting
Period;
(viii) repayment of Existing Borrowings being Refinanced;
(ix) repayment of the loan notes described in paragraphs (ix) and
(x) of the definition of "Permitted Borrowings"
21.11.5. Factoring and Invoice Discounting: enter into any factoring
---------------------------------
or invoice discounting arrangements or any other arrangements to
sell or dispose of, or whereby any person shall otherwise acquire
or gain the right to acquire, any right, title or interest in any
of the trade debts of the Group;
--------------------------------------------------------------------------------
56
21.11.6. Shares and Interests in Shares:
-------------------------------
(i)
(a) issue in the case of any Group Company other
than the Principal Borrower any shares after
the Relevant Date other than shares to a
Charging Company; or
(b) in the case of the Principal Borrower issue
any shares other than the ordinary shares
having the same rights as the Ordinary Shares
under the Articles or shares which carry the
same rights to receive payment of any
dividends, distributions or redemption
premiums as those shares in issue on the
Relevant Date or issued pursuant to the
Investment Agreement.
(ii) incorporate any company as a subsidiary other than a
new company which is a wholly owned subsidiary and
becomes a Charging Company upon becoming a Subsidiary
other than any Dormant Company; or
(iii) acquire after the Relevant Date or dispose of any
interest in any shares or securities of any company
other than (a) the disposal of shares in a company
whose only asset is an asset which may be disposed of
as a Permitted Disposal (b) any shares in Target;
21.11.7. Variation or Extension of the Offer: (i) waive, vary or agree
-----------------------------------
to the waiver or variation of any material terms and conditions
of the Offer in any manner which would give rise to a Material
Adverse Effect which shall, in any event, and without limitation
be deemed to be the case in relation to any proposed increase in
the price of the Offer or any alteration to the level of
acceptances at which the Offer may be declared unconditional as
to acceptances or the triggering of an obligation to effect a
cash offer pursuant to the provisions of Rule 9 of the City Code
on Takeovers and Mergers; or (ii) prior to the Offer becoming
unconditional extend the Offer beyond 81 days from the date on
which the Offer Document is posted or such later date as the
Agent and the Panel On Takeovers and Mergers shall agree. In
giving or withholding its consent to any waiver or amendment of
any conditions of the Offer the Agent will treat itself as being
bound by Rule 13 of the City Code of Takeovers and Mergers as if
it were the Principal Borrower and subject to the jurisdiction of
the Takeover Panel/
21.11.8. Amendments to Principal Contracts: make any amendment to,
---------------------------------
waive, supplement or vary the terms of the Investment Agreement
in any material respect if such amendment would increase the
amount or affect the timing of entitlement to or receipt of any
dividend or payment (whether of interest or capital) or any other
benefit accruing or due to the Investors or Managers which can be
calculated in monetary terms.
21.11.9. Amendment of Memorandum and Articles:
------------------------------------
(i) make any material amendment to, waive, supplement or vary in
any material respect the memorandum of association or other
constitutional documents of any Group Company in a manner
which would increase the amount or affect the timing of
entitlement or receipt of any dividend or payment (whether
of interest or to, capital) or any other benefit accruing or
--------------------------------------------------------------------------------
57
due to the Investors or Managers which can be calculated in
monetary terms; or
(ii) make any material amendment to the Articles of Association
or other constitutional documents of any Group Company so as
to confer any right to receive dividends or distributions or
any redemption of capital or any other redemption of the
subscription price or premium thereon which is not
restricted by reference to this Agreement;
21.11.10. Appointment of Auditors: change the Auditors of the
-----------------------
Principal Borrower or any other Group Company unless the proposed
new Auditors are a firm of international standing;
21.11.11. Other Bank Accounts: open or maintain any account with any
-------------------
recognised bank or building society other than:
(i) an account with the Bank of Scotland or any of its
subsidiaries; or
(ii) any account existing at the Relevant Date in the name of or
for the benefit of any company in the Target Group, provided
that such accounts are closed within two months after the
Relevant Date or as soon as practicable thereafter;
21.11.12. Announcements: except to the extent, if any, required by
-------------
law, or by the Code or by the Takeover Panel or The Stock
Exchange make or authorise the making of any announcement or
issue or authorise the issue of any publicity material concerning
the transactions contemplated by the Banking Documents (other
than general announcements where the only details of such
transactions disclosed are the identity of the Senior Lenders and
the type and, amount of the Facilities) without the prior written
approval of the Agent (such approval not to be unreasonably
withheld or delayed);
21.12. Ring-fencing Arrangements: The Principal Borrower will:-
(i) ensure that the business of the Charging Companies is carried on
independently from and at arm's length to the businesses carried
on by the other Group Companies and, in particular, that:
(a) any material services or material assets provided to a
non-Charging Company by a Charging Company (other than the
making available of management time and management services
by individuals who have a group head office function and
other than Permitted Investments) are only provided to the
extent required for the proper operation of the business of
such non-Charging Company and are provided on arm's length
terms for full market consideration payable in cash by such
non-Charging Company or on terms which would apply to any
transactions on arm's length terms in the market generally;
(b) no Charging Company acquires any assets or receives any
services from a non-Charging Company except to the extent
that they are required for the proper operation of that
Charging Company's business and are not acquired at greater
than a fair value;
--------------------------------------------------------------------------------
58
PROVIDED THAT this sub-clause shall not operate to affect
commercial arrangements and/or licensing and/or technology
sharing arrangement in place at the date hereof;
(ii) ensure that no Charging Company shall (without the prior written
consent of the Agent) and save for any Permitted Investment and
as permitted pursuant to Clause 21.11.4(iii), (v), (vi), (vii),
(viii) and (x):-
(a) make any loan (except loans needed to enable the Group
Companies to give financial assistance to each other which
is properly legalised as contemplated herein), grant any
credit or give or permit to subsist any security, guarantee,
indemnity or financial accommodation to or for the benefit
of any Group Company which is not a Charging Company, other
than amounts of credit incurred in the normal course of
trading activities;
(b) make any cash payments (save as otherwise permitted by any
other provision of this Clause) to any Group Company which
is not a Charging Company in excess of (pound)50,000 in
aggregate for all such Group Companies in any Accounting
Period;
(c) subscribe for any shares, loan notes, debentures, commercial
paper or other financial instrument issued or proposed to be
issued by any Group Company which is not a Charging Company.
21.13. Positive Obligations: The Principal Borrower shall (unless the Agent
otherwise consents in writing):
21.13.1. Binding Obligations: subject to the Reservations ensure that
-------------------
all of the obligations of any Group Company under the Banking
Documents will at all times constitute direct, enforceable and
binding obligations of such Group Company;
21.13.2. Priority of Facilities: take all reasonable steps requested
----------------------
by the Agent to ensure that the claims of the Security
Beneficiaries under the Security Documents will at all times
(save to the extent that such security constitutes financial
assistance for the purpose of Section 151 Companies Act 1985 in
which case immediately after the requirements of Sections 155-158
Companies Act 1985 are complied with as envisaged by Clause
21.13.8 (Security from the Target Group)) rank in priority to all
present and future indebtedness of any Charging Company (except
for such indebtedness as is entitled to priority by operation of
law or any Permitted Security Interests);
21.13.3. Compliance with Laws: procure that each Group Company shall
--------------------
use its reasonable endeavours:-
(i) at all times to comply with all laws and regulations
applicable to it and which are necessary in relation to the
conduct of its business where failure to do so would have a
Material Adverse Effect;
(ii) to make or obtain, keep in full force and effect and comply
with all governmental and other regulatory consents,
licences, exemptions, clearances, filings, registrations and
authorisations required for the conduct of its business and
the validity, enforceability and admissibility in evidence
of each of the Banking Documents where, in each case,
failure to do so would have a Material Adverse Effect:
--------------------------------------------------------------------------------
59
(iii)promptly and in any event within any relative period laid
down in any applicable statute, law or regulation to make
all necessary declarations and deliver all necessary forms
and documents required to be delivered to, filed or
registered in connection with the Transaction Documents and
any of the transactions contemplated thereunder where, in
each case, failure to do so would have a Material Adverse
Effect;
21.13.4. Taxes: procure that each Group Company will, pay all material
-----
Taxes due and payable by it or that Group Company within a
reasonable time of the relevant due date (save to the extent that
payment of the same is being contested in good faith and adequate
reserves are being maintained for those Taxes) where failure to
do so would have a Material Adverse Effect;
21.13.5. Notification of Events of Default: notify the Agent of any
---------------------------------
Event of Default or Potential Event of Default as soon as
reasonably practicable after becoming aware of the occurrence
thereof, and of the steps being taken to remedy the same;
21.13.6. Insurance: procure that each Group Company shall effect and
---------
maintain adequate insurances (on terms commonly available in the
relevant insurance markets provided always such insurance is
available at commercially reasonable premiums) in relation to its
business and assets with reputable underwriters or insurers
against such risks as are usual for companies carrying on a
business such as that carried on by any Group Company whose
practice is not to self insure and in an amount equal to the full
replacement cost of such assets. The Principal Borrower shall
procure that the interest of the Security Trustee on behalf of
the Security Beneficiaries is noted thereon as soon as
practicable after such request. The Principal Borrower shall from
time to time upon request supply the Agent with copies of all
such insurance policies or certificates of insurance or premium
receipts in respect thereof or such other evidence of the
existence of such policies as may be reasonably acceptable to the
Agent;
21.13.7. Re-Registration as a Private Company: procure that within 77
------------------------------------
days of the date of the Relevant Date a special resolution of
Target is passed to entitle Target to be re-registered as a
private company pursuant to s.53 Companies ▇▇▇ ▇▇▇▇ and the
Principal Borrower shall procure that such resolution is duly
passed, and undertakes to take all such action as may be
reasonably necessary to ensure that the requirements of s.53
Companies ▇▇▇ ▇▇▇▇ are complied with promptly, and to use its
best endeavours to procure that the Registrar of Companies is
able to issue Target with a certificate of re-registration as a
private company ("the Certificate of Re-Registration");
21.13.8. Security from the Target Group: procure that:
------------------------------
(i) as soon as reasonably practicable but within any event
within 28 days of the issue by the Registrar of Companies of
the Certificate of Re-Registration of Target, each of the
Initial Charging Companies shall duly pass any such special
resolutions as shall be required to comply with s.155
Companies ▇▇▇ ▇▇▇▇ in relation to the Third Debenture , the
Legal Charge, the Keyman Insurance Assignment and the
Intra-Group Loan Agreement ("the Financial Assistance")
provided that this limit shall be extended to 40 days if the
meeting to pass such special resolutions cannot practicably
be held on short notice;
--------------------------------------------------------------------------------
60
(ii) as soon as practicable after the requirements of s.151-158
Companies Act 1985 can be satisfied (but in any event within
7 days of the expiry of the 4 week period during which any
shareholder may apply for the cancellation of any special
resolution pursuant to s.158 Companies ▇▇▇ ▇▇▇▇ provided no
such shareholder application is made) each of the Initial
Charging Companies (other than the Principal Borrower) shall
take whatever steps may be necessary (including the
elimination of any net asset deficiency in any Charging
Company) to put themselves in a position to comply with the
requirements of s151-158 Companies ▇▇▇ ▇▇▇▇ and enter into
such documents as the Agent may reasonably require for such
Initial Charging Companies (other than the Principal
Borrower) to guarantee and secure any monies due to the
Security Beneficiaries under the Banking Documents,
including without limitation the execution and delivery of
the Third Debenture (in addition to the Second Debenture
each may already have executed and delivered pursuant to
Clause 6.2 (Security) hereof, the Legal Charge, the Keyman
Insurance Assignment and the Intra-Group Loan Agreement;
(iii) the requirements of s.151-158 Companies ▇▇▇ ▇▇▇▇ are
satisfied in relation to the giving of the Financial
Assistance;
(iv) each Initial Charging Company (other than the Principal
Borrower) (and where applicable each of their directors)
shall as soon as practicable after they are legally in a
position to do so (but in any event within 7 days of the
expiry of the 4 week period during which any shareholder may
apply for the cancellation of any special resolution
pursuant to s.158 Companies ▇▇▇ ▇▇▇▇ provided no such
shareholder application is made) duly execute all such
documents and make or obtain all such declarations,
approvals, consents, filings and registrations as the Agent
may reasonably require for the efficacy, validity or
enforceability of the Financial Assistance, including
without limitation duly completed, executed and/or sworn Pro
Forma Financial Assistance Documents adapted to meet the
circumstances;
(v) as soon as practicable after the Relevant Date (but in any
event within 7 days of the expiry of the 4 week period
during which any shareholder may apply for the cancellation
of a special resolution pursuant to s.158 Companies ▇▇▇ ▇▇▇▇
provided no such shareholder application is made) each
Initial Charging Company shall take such other steps as the
Agent may reasonably require (including, without limitation,
ensuring that each relevant Group Company has positive net
assets and appropriate commitments of financial support) to
ensure that all relevant legal requirements are satisfied in
relation to the giving of the Financial Assistance;
(vi) notwithstanding the requirements of sub-clauses (i) to (v)
above the Third Debenture , the Legal Charge and the Keyman
Insurance Assignment duly executed by the Initial Charging
Companies as first ranking securities and the Intra Group
Loan Agreement are delivered to the Agent within both 150
days of the Offer being posted, and within 90 days of the
Relevant Date or, if the Principal Borrower has been unable
to implement the procedures in Sections 428-430F of the
Companies ▇▇▇ ▇▇▇▇, within both 180 days of the Offer being
posted, and 120 days of the Relevant Date.
--------------------------------------------------------------------------------
61
21.13.9. Security from Non-Charging Companies: subject to Clause
------------------------------------
21.13.8 (Security from the Target Group) procure that any Group
Company (other than a Dormant Company) which is not for the time
being a Charging Company shall as soon as reasonably practicable
and in any event within 28 days of being so required by the Agent
(but only if and to the extent permitted by law):
(i) enter into such documents as the Agent may reasonably
require for such Group Company to guarantee and secure any
monies due to the Security Beneficiaries under the Banking
Documents;
(ii) obtain or make all such approvals, declarations, consents,
filings and registrations as are necessary for the efficacy,
validity or enforceability of such guarantee and/or
security; and
(iii) take such other steps as the Agent may reasonably require
to ensure that all relevant legal requirements are satisfied
such that the action referred to in paragraphs (i) and (ii)
above is lawful;
21.13.10. Dormant Companies: procure that, save with the prior written
-----------------
consent of the Agent, or unless a Dormant Company becomes a
Charging Company and a party to the Debenture, no Dormant Company
shall commence trading (whether for its own account or for that
of another) after the Relevant Date or the date it becomes a
member of the Group (if later) or incur any further material
liabilities or hold or acquire (whether legally or beneficially)
any material assets or property after such date;
21.13.11. Compliance with Environmental Laws
----------------------------------
(i) comply and shall ensure that each Group Company will comply
with all Environmental Laws applicable to the operations or
premises of any Group Company and obtain from the
appropriate authorities all Environmental Consents required
in respect thereto where failure to comply or to obtain such
consent would have a Material Adverse Effect;
(ii) procure that each Group Company shall carry out any
environmental audit or site investigation at the Properties
required by Environmental Laws or if required to do so by
the Agent where the Agent reasonably believes that:
(a) a breach of any of the Environmental Laws which would
give rise to a Material Adverse Effect has or is likely
to occur; or
(b) the value of the Properties is likely to be materially
and adversely affected by any matter or thing on, under
or adjacent to the Properties which is likely to result
in an Environmental Contamination or constitute a
material environmental risk (whether or not that matter
or thing constitutes an immediate breach of any
Environmental Laws); or
(c) an Event of Default is subsisting and the Agent or the
Senior Lenders are contemplating the enforcement of any
of the Security Documents affecting the Properties;
--------------------------------------------------------------------------------
62
(iii) notify the Agent in writing to the extent that the same
would have a Material Adverse Effect if:
(a) any Group Company receives any written notice that it
is not in compliance with any applicable Environmental
Laws; or
(b) any Group Company becomes aware that there exists any
Environmental Claim pending or threatened against it;
or
(c) there occurs any release, emission, discharge or
disposal of any substance which could reasonably be
expected to form the basis of any material
Environmental Claim against any Group Company;
and the Principal Borrower shall promptly thereafter provide
to the Agent a report specifying in detail the nature of
such event and the actions which the relevant Group Company
intends to take in response thereto. Upon a reasonable
request from the Agent the Principal Borrower shall submit
to the Agent at reasonable intervals thereafter an updated
report providing any update of the situation resulting from
such event;
21.13.12. Valuations: at any time while an Event of Default is
----------
subsisting if so requested by the Agent acting reasonably obtain
a valuation of the assets and properties of the Charging
Companies from an independent valuer acceptable to the Agent. The
cost of such valuation shall be borne by the Principal Borrower;
21.13.13. Details of Litigation: promptly upon becoming aware thereof
---------------------
advise the Agent of the details of any litigation or
administrative proceeding which is pending or threatened against
any Group Company and which or which would involve liability or
potential liability or alleged liability of(pound)100,000 or its
equivalent in Sterling (at the Agent's spot rate of exchange);
21.13.14. Funding of Pension Schemes: procure that all the
--------------------------
occupational pension schemes of the Group are at all times
maintained properly funded (or to the extent not fully funded
contribution rates are adjusted appropriately) in accordance with
the advice given from time to time by the actuaries of such
schemes and to the extent that failure to do so would have a
Material Adverse Effect;
21.13.15. Intellectual Property Rights: procure that each member of
----------------------------
the Group will:-
(i) make such registrations and pay such fees, registration
taxes and similar amounts as are necessary to keep those
registered Intellectual Property Rights owned by the Group
which are material to the business of a member of the Group
("the Material Rights") in force and to record its interest
in those Intellectual Property Rights;
(ii) to the extent it is within its control take such steps as
are necessary and commercially reasonable (including,
without limitation, the institution of legal proceedings) to
prevent third parties infringing the Material Rights and
(without prejudice to paragraph (i) above) take such other
--------------------------------------------------------------------------------
63
steps as are reasonably practicable to maintain and preserve
its interests in those Material Rights;
(iii) promptly upon being required to do so by the Agent, comply
with all reasonable instructions of the Agent which the
Agent is entitled to give under the Security Documents in
respect of its Material Rights;
(iv) not sell, transfer, lease, licence or otherwise dispose of
all or any part of its interest in the Material Rights
save:-
(a) as effected pursuant to any of the Security Documents;
or
(b) as permitted with the prior written consent of the
Agent; or
(c) for any licence arrangements in respect of those rights
entered into with members of the Group for so long as
they remain members of the Group; or
(d) in the ordinary course of business;
(v) not permit any registration of any of the Intellectual
Property Rights to be abandoned, cancelled or lapsed or to
be liable to any claim of abandonment for non-use or
otherwise if to do so would have a Material Adverse Effect.
21.13.16. The Offer:
---------
(i) ensure that the terms and conditions of the Press Release
and the Offer Document comply in all material respects with
all applicable laws and regulations and the Code and that
the terms and conditions of the Offer Document are
consistent in all material respects with the terms of the
Press Release;
(ii) not to issue the Press Release or any press announcements
relating to the Offer save as required by the Panel or
London Stock Exchange Limited without the approval of the
Agent (such approval not to be unreasonably withheld or
delayed) and to keep the Agent advised of the progress of
the Offer and of all material matters affecting or
reasonably likely to affect the interests of the Banks
arising in connection with the Offer and the Principal
Borrower shall provide the Agent with any information and
copies of professional advice received, as the Agent may
reasonably request;
(iii)disclose to the Agent all information which has come to its
attention which is relevant to any decision whether or not
to waive (or to consent to the waiver of) any condition of
the Offer;
(iv) promptly deliver to the Agent copies of the Offer Document
and press announcements made by or on behalf of the
Principal Borrower in relation to the Offer, all written
public statements made by or on behalf of Target in response
to or otherwise commenting on the Offer, and other public
documents issued by the Panel on Takeovers and Mergers, the
Office of Fair Trading or the Competition Commission or any
other regulatory authority in
--------------------------------------------------------------------------------
64
relation to the Offer, the Offer Document or the
transactions contemplated herein or therein;
(v) ensure that it shall not and shall use its best endeavours
to procure that no person acting in concert with it (as
defined in the Code) shall become obliged to make an offer
to the shareholders of Target under Rule 9 of the Code, and
ensure that neither it nor persons acting in concert with it
acquire any shares in Target at a price above the Offer
price which may result in an obligation to increase the
Offer price;
(vi) ensure that at all times all laws and directives applicable
in relation the Offer or any documents connected thereto are
complied with and that, as and when necessary all consents
from all governmental and other regulatory authorities
required in connection therewith (including (without
limitation), the Financial Services ▇▇▇ ▇▇▇▇, applicable
rules of any self-regulatory organisation deriving authority
from the Securities and Investments Board or the Financial
Services Authority and the rules of London Stock Exchange)
are obtained, maintained and/or renewed
(vii) subject to compliance by the Banks with their obligations
pursuant to the terms of this Agreement ensure that all its
obligations pursuant to the Offer are complied with and
performed, use all reasonable endeavours to ensure that the
conditions attached to the Offer (save for those that are
waived with the consent of the Agent) are satisfied as soon
as reasonably practicable and declare the Offer
unconditional in all respects immediately such conditions
are satisfied (or, with the consent of the Agent, waived as
aforesaid);
(viii) after the Relevant Date use its best endeavours to acquire
all of the issued share capital of Target as soon as
reasonably practicable either pursuant to or otherwise on
the same terms as the terms of the Offer;
(ix) promptly and in any event no later than 20 Business Days
after unconditionally acquiring 90% of the Target Shares the
subject of the Offer serve notices under Section 429(2) of
the Companies Act 1985 (in respect of acquiring minority
shareholdings). Without prejudice to the Principal
Borrower's obligations under this covenant, if the Principal
Borrower (or the Receiving Bank on its behalf) shall not
have sent out notices under Section 429(2) of the Companies
▇▇▇ ▇▇▇▇ within 20 Business Days of being entitled to do so,
the Agent shall be entitled to do so on the Principal
Borrower's behalf and the Principal Borrower hereby
irrevocably appoints the Agent as its agent to take all
necessary action to do so;
(x) within seven days of the date on which acceptances of the
Offer are received from holders of not less than 90% of the
Target shares to which the offer relates, or if earlier, 120
days after the date on which the Offer Document is posted
give notice to close the Offer in accordance with the Code
PROVIDED THAT the Offer may be kept open during the period
required to acquire shares in Target under Section 430
Companies Act 1985 following the service of valid notices
under Section 429(2) of the Companies ▇▇▇ ▇▇▇▇.
(xi) immediately on acquisition by it of any of the Target Shares
(whether or not pursuant to the Offer) procure the delivery
to the Security Trustee of all
--------------------------------------------------------------------------------
65
copies of receipts and acknowledgements (whether or not
documents of title) and all documents of title in respect of
such Target Shares and give to the Receiving Bank
irrevocable instructions accordingly;
(xii) ensure that, without the prior written consent of the
Agent, the Principal Borrower shall not make any acquisition
of Target Shares prior to the Offer Document being posted;
and
(xiii) not without the consent of the Agent (acting on the
instructions of the Banks) waive or amend any conditions of
the Offer or (unless the Offer shall have become
unconditional) extend (prior to the Offer becoming
unconditional) the Offer beyond 81 days from the date when
the Offer is posted. In giving or withholding its consent to
any waiver or amendment of any conditions of the Offer the
Agent will treat itself as being bound by Rule 13 of the
City Code of Takeovers and Mergers as if it were the
Principal Borrower and subject to the jurisdiction of the
Takeover Panel.
21.14. Stamp Duty: The Principal Borrower shall pay or procure the payment
of stamp duty in respect of any Target Shares acquired within 30 days
of payment of the purchase price in respect thereof.
21.15. Performance of Obligations: Each of the Borrowers shall give written
notice to the Agent (as soon as reasonably practicable upon becoming
aware of the same) of any occurrence (including without limitation any
material third party claim or liability or any dispute involving any
major customer) which would or would have a Material Adverse Effect.
21.16. Service Agreements: The Principal Borrower shall use its best
endeavours to procure the completion of the Service Agreements as soon
as reasonably practicable after the Relevant Date.
21.17. Further Assurance: The Principal Borrower shall do all such things
(and shall procure that the Obligors shall do all such things within
its or their control) as the Agent (or any receiver or similar
insolvency official in the relevant jurisdiction) may reasonably
request from time to time to perfect or remedy any defects in the
Transaction Documents as has rendered any of the same ineffective
invalid or unenforceable or otherwise to make the Transaction
Documents effective valid and enforceable and the Principal Borrower
and/or the Obligors concerned shall meet all reasonable costs incurred
in connection with the same save insofar as such costs have been
necessitated solely by reason of the negligence of any of the Agent,
the Security Trustee or any of the Senior Lenders or their respective
advisers.
21.18. Receiving Bank Account: The Principal Borrower shall procure that
all proceeds of subscription for shares in the Principal Borrower and
the Subordinated Loan Notes shall be paid into the Receiving Bank
Account and shall not be paid out of such Receiving Bank Account
without the consent of the Agent which consent shall be given so long
as the purpose for which any request to withdraw funds from such
account is made is one of those set out in Clause 3.2 (Purpose: The
Share Purchase Term Facilities).
21.19. Reports on Title: The Principal Borrower shall after the Relevant
Date procure that as soon as reasonably practicable following a
written request made at any time and from time to time by the Agent
reports on title prepared by the Principal Borrower's solicitors on
any Properties being charged to the Security Trustee under the
relevant Security Document which the Agent (acting reasonably)
considers of material value shall be delivered to the Agent.
--------------------------------------------------------------------------------
66
21.20. Not Restated
21.21. Millennium Compliance: The Principal Borrower shall procure that (so
far as it has not already done so) as soon as practicable after the
Relevant Date the Target Group develops and implements a comprehensive
detailed programme which will ensure that its computer and technology
systems are Millennium Compliant.
22. REPRESENTATIONS AND WARRANTIES
22.1. Representations and Warranties: The Borrowers acknowledge that each
of the Senior Lenders has or will have entered into the Banking
Documents to which it is a party and participated in the Facilities in
full reliance on the representations and warranties by the Borrowers,
but subject to any matters expressly disclosed in the Information
Documents (but for the avoidance of doubt the directors of the
Borrowers shall not incur any personal liability in respect of any
breach of any of the representations and warranties) set out below:-
22.1.1. Valid Incorporation: each Obligor is a limited company duly
-------------------
organised, validly existing and registered under the laws of the
jurisdiction in which it is incorporated;
22.1.2. Powers and Approvals to carry on Business: each Obligor has
-----------------------------------------
the power and authorities and all necessary governmental and
other consents, approvals, licences to own its property and
assets and carry on its business;
22.1.3. Authority to Perform Transaction Documents: each Obligor when
------------------------------------------
executing the same is empowered to enter into and perform its
respective obligations under the Transaction Documents to which
it is a party and has taken all necessary action to authorise the
execution, delivery and performance of the Transaction Documents
to which it is a party;
22.1.4. Borrowing Powers: no limit on the powers of any Obligor
----------------
contained in any of its constitutional documents will be exceeded
as a result of the borrowings, grant of security and giving of
guarantees contemplated by the Banking Documents to which it is a
party;
22.1.5. Validity of Obligations: subject to all applicable insolvency
-----------------------
laws and the Reservations, the Transaction Documents will when
executed constitute legal, valid and binding obligations of those
Obligors which are expressed to be parties to the Transaction
Documents;
22.1.6. No resulting breach of other Documents: neither the execution
--------------------------------------
nor the performance of the Banking Documents by any Obligor which
is a party thereto will result in any breach by any of them of
any provision of any deed, agreement or obligation of such
Obligor would have a Material Adverse Effect;
22.1.7. No Material Litigation: except as notified in writing to the
----------------------
Agent from time to time, no Obligor is involved in or engaged in
any material litigation, arbitration or other legal proceedings
nor, so far as the Borrowers are aware, are there any
circumstances likely to give rise to any such litigation,
arbitration or proceedings which have not been notified to the
Agent which, if adversely determined, would have a Material
Adverse Effect;
22.1.8. Borrowings and Security Interests: no Security Interest other
---------------------------------
than a Permitted Security Interest, exists over any material part
of the undertakings or assets of any Group
--------------------------------------------------------------------------------
67
Company and no Group Company has any Borrowings other than
Permitted Borrowings;
22.1.9. Accounts: the latest Audited Accounts prepared after the
--------
Relevant Date have been prepared in accordance with generally
accepted accounting principles which have been consistently
applied (or if not consistently applied, such inconsistency has
been notified to the Agent) and such Audited Accounts represent a
true and fair view of the financial position of the companies in
the Group for the Accounting Period for which such Accounts were
prepared;
22.1.10. Management Accounts: the Management Accounts:-
-------------------
(i) fairly represent the financial condition and operations of
the Group as at the date up to which they have been prepared
and for the period for which such Management Accounts
relate; and
(ii) were or will when the same are produced be prepared on a
basis substantially in accordance with the accounting
principles used in the latest available Audited Accounts
(other than in the event of any change notified to the
Agent);
in each case within the reasonable parameters which may be
expected of management accounts not the subject of audit
procedures;
22.1.11. Environmental Matters
---------------------
(i) each Group Company is and has been in full compliance with
all material applicable Environmental Laws where failure to
do so would have a Material Adverse Effect. There are no
circumstances known to any Group Company that may prevent or
interfere with such compliance in the future where failure
to do so would have a Material Adverse Effect;
(ii) each Group Company has been and is in compliance with the
terms of all Environmental Consents necessary for the
ownership and operation of its facilities and businesses as
presently owned and operated to the extent required so as
not to have a Material Adverse Effect;
(iii) there is no Environmental Claim pending nor to the
knowledge of any Group Company, after due inquiry,
threatened, which is material to such Group Company and
there are to the knowledge of any Group Company no past or
present acts, omissions, events or circumstances that could
form the basis of any Environmental Claim, against any Group
Company in each case which would have a Material Adverse
Effect;
22.1.12. Tax Liabilities: each Group Company is in compliance in all
---------------
material respects with all Taxation laws in all jurisdictions in
which any of them is subject to Taxation; no claims are being
asserted against any Group Company with respect to non-compliance
with Taxation laws which would, if adversely determined, have a
Material Adverse Effect;
--------------------------------------------------------------------------------
68
22.1.13. Subsidiaries:
------------
(i) as at the date hereof, the Principal Borrower has no
Subsidiaries;
(ii) so far as the Principal Borrower is aware, the Subsidiaries
of Target as at the date hereof are those companies listed
in Schedule 7 (The Group Companies) other than the Target;
22.1.14. Information Documents:
---------------------
(i) all information provided by the Principal Borrower or its
advisers (as updated, if applicable, prior to the date
hereof), in the Information Documents:-
(a) is true and accurate in all material respects insofar
as it relates to factual information concerning the
Principal Borrower;
(b) insofar as it relates to factual information concerning
the Target Group, is information which the Principal
Borrower has no reason to believe provides a view or
assessment of the Target Group which is materially
inaccurate or misleading in the context of the Target
Group taken as a whole; and
(c) in respect of the projections and assumptions of the
Target Group fairly represents (consistently with the
assumptions stated therein) the views and expectations
of the Principal Borrower formed in good faith (after
such proper investigation and consideration as was
practicable in the circumstances) in as far as they
consist of statements of opinion and financial
projections relating to the Target Group after the
Relevant Date;
(ii) so far as the Principal Borrower is aware there is nothing
contained in any of the Information Documents which would
materially prevent, inhibit, restrict or delay any Group
Company from putting into effect or pursuing any of the
proposals or plans contained in the Financial Model in any
material respect or from carrying on business in a
materially different manner to that contemplated in those
documents;
(iii) there is nothing contained in any of the Information
Documents which is reasonably likely to cause the Financial
Model to be materially inaccurate in any material respect or
the assumptions on which they have been based to be other
than fair and reasonable;
22.1.15. Disclosures: there is no disclosure made in respect of the
-----------
Investment Agreement which the Principal Borrower believes is
reasonably likely to have a material detrimental effect on any of
the information, projections, prospects, forecasts and estimates
contained in the Financial Model;
22.1.16. New Company: prior to the date hereof, the Principal Borrower
-----------
has not traded or undertaken any commercial activities of any
kind and save as contemplated by, or otherwise in connection with
this Agreement and the other Transaction Documents
--------------------------------------------------------------------------------
69
and the transactions contemplated thereby including the Offer,
the Principal Borrower has no liabilities or obligations, actual
or contingent;
22.1.17. Service Agreements: all relevant parties have confirmed their
------------------
willingness to enter into the Service Agreements;
22.1.18. Millennium Compliance: to the best of the Principal Borrowers
---------------------
knowledge information and belief the Target Group has developed
and implemented a comprehensive detailed programme which will
ensure that its computer and technology systems are Millennium
Compliant.
22.2. Deemed Repetition of the Representations: The representations and
warranties shall be made on the date of this Agreement and (if
different) on the Completion Date and all the representations and
warranties contained in Clause 22.1 shall survive the completion of
this Agreement and the Drawdown of the Term Loans and, except for
those representations in sub-clauses 22.1.13 (Subsidiaries) to 22.1.16
(New Company) inclusive which shall not be repeated shall be deemed to
be repeated at the time of:-
22.2.1. the first day of each Interest Period; and
22.2.2. the last day of each Quarterly Period;
in each case with reference to the facts and circumstances subsisting
at the time at which they are repeated.
22.3. Reliance on the Representations and Warranties: The parties
acknowledge that the Senior Lenders are relying on the representations
and warranties contained in Clause 22.1 and the documentation they
have examined in relation to the conditions precedent set out in
Schedule 4 and are not relying on any other information of which the
Senior Lenders or any of them or their respective agents or advisers
may have actual or constructive knowledge.
23. DEFAULT
23.1. Default: Each of the events set out below is an Event of Default:-
23.1.1. Non-Payment: the failure by any Borrower to pay within three
-----------
days of the due date for payment any amount payable under the
terms of the Banking Documents;
23.1.2. Breach of Financial Covenant: if the Principal Borrower is in
----------------------------
breach of the covenants contained in Clause 20.1 (Financial
Covenants);
23.1.3. Breach of Provisions relating to the Offer: if there is a
------------------------------------------
breach in any material respect of Clause 21.11.7 (Variation of
the Offer) of this Agreement;
23.1.4. Breach of Other Obligations: if there is a breach in any
---------------------------
material respect of any of the following provisions of this
Agreement:
Clause 21.1.1 (i) - (iii) (Audited Accounts and Management
Accounts);
Clause 21.8 (Disposals);
Clause 21.9 (Interest, Dividends and Distributions);
--------------------------------------------------------------------------------
70
Clause 21.10 (Reduction of Capital);
Clause 21.11.2 (Security Interests); and
Clause 21.13.9 (Security from Non-Charging Companies);
23.1.5. Other Provisions of this Agreement: if any Obligor fails to
----------------------------------
comply in any material respect with any other provisions of this
Agreement to which it is a party and if such breach is capable of
remedy, such failure is not remedied to the reasonable
satisfaction of the Agent within 10 Business Days of notice to
the Principal Borrower from the Agent requiring such breach to be
remedied;
23.1.6. Banking Documents: if any Obligor fails to comply in any
-----------------
material respect with any material provisions of any Banking
Document to which it is a party other than this Agreement and if
such breach is capable of remedy, such failure is not remedied to
the reasonable satisfaction of the Agent within 10 Business Days
of notice to the Principal Borrower from the Agent requiring such
breach to be remedied;
23.1.7. Misrepresentation: if any representation, warranty or
-----------------
statement made by any Obligor in any Banking Document to which it
is a party or in any document delivered under any of them proves
to be incorrect in any material respect (in the reasonable
opinion of the Agent) when made or repeated by reference to the
facts and circumstances then subsisting and, if the circumstances
causing such misrepresentation are, in the reasonable opinion of
the Agent, capable of remedy within such period, after receipt by
the relevant Obligor of written notice from the Agent to such
Obligor requiring the circumstances causing such
misrepresentation to be remedied, such Obligor shall have failed
to remedy such circumstances within 10 Business Days of receipt
of such notice;
23.1.8. Unlawfulness
------------
(i) if it becomes unlawful for any Obligor to perform all or any
of its obligations under any Banking Document to which it is
a party and the result thereof would have a Material Adverse
Effect; or
(ii) any Banking Document is not or ceases to be legal, valid and
binding in any material respect on any Obligor which is a
party to it; or
(iii) any Obligor shall initiate any action with a view to any of
the Security Documents to which it is a party being declared
void by any competent judicial authority; or
(iv) the admissibility, validity or enforceability of any of the
Banking Documents shall be contested or repudiated by any
Obligor thereto.
23.1.9. Cross Default: if any Borrowings (other than under the
-------------
Subordinated Loan Notes) of any Material Company in excess
of(pound)100,000:
(i) are not paid when due or within any contractual grace
period; or
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71
(ii) are declared to be or otherwise become due and payable prior
to their specified maturity by reason of a default on the
part of the Material Company; or
(iii) are placed on demand by reason of a default or event of
default;
unless the obligation to pay such Borrowings is being
disputed on bona fide grounds by the relevant Material
Company.
23.1.10. Enforcement Proceedings: if a creditor attaches or takes
-----------------------
possession of, or a distress, execution, diligence, sequestration
or other process is levied or enforced upon or sued out against,
any material part of the undertakings, assets, rights or revenues
of any Material Company in respect of a claim or claims which
aggregate more than (pound)100,000 and is not discharged within
28 days or is not being contested in good faith to the
satisfaction of the Agent (acting reasonably).
23.1.11. Inability to Pay Debts: if any Material Company:-
----------------------
(i) suspends payment of its debts or threatens to stop payment
of its debts generally or is unable to pay its debts or is
deemed unable to pay its debts (within the meaning of
Section 123(1) of the Insolvency Act 1986) (other than
Section 123(1)(a));
(ii) proposes a voluntary arrangement under Part I of the
Insolvency ▇▇▇ ▇▇▇▇; or
(iii) enters into any composition or other arrangement for the
benefit of its creditors generally.
23.1.12. Insolvency Proceedings: if any Material Company (save with
----------------------
the prior written consent of the Agent) takes any action or any
legal proceedings are initiated or are consented to by any member
of such Material Company or any petition is presented for:
(i) a general reconstruction or rescheduling of its debts or for
any process giving protection against creditors generally;
(ii) its winding-up or dissolution other than:-
(a) in the course of a dispute being contested on
reasonable grounds and in good faith by the Material
Company and where applicable the advertisement of any
petition is prevented within 14 days of date of
presentation; or
(b) a solvent reconstruction on terms previously approved
by the Agent (such approval not to be unreasonably
withheld or delayed);
23.1.13. Appointment of Insolvency Practitioner: if a liquidator,
--------------------------------------
provisional liquidator, trustee, receiver, administrative
receiver or similar officer is appointed over the whole or any
part of the undertakings, assets, rights or revenues of any
Material Company;
23.1.14. Administration Order: if a petition is presented for the
--------------------
granting of an administration order in respect of any Material
Company unless the Agent is of the opinion (acting
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72
reasonably) that the petition is frivolous or vexatious or such
petition is discharged or stayed within 14 days of presentation;
23.1.15. Analogous Proceedings: if there occurs in any country or
---------------------
territory in relation to any Material Company or any material
part of its assets or business, any event which, in the
reasonable opinion of the Majority Banks, reasonably appears to
correspond in that country or territory with any of the events
referred to in sub-clause 23.1.10 (Enforcement Proceedings) to
23.1.14 (Administration Order) inclusive;
23.1.16. Security becoming Enforceable: if the security created by any
-----------------------------
Security Interest created by any Obligor and securing an amount
equal to or exceeding(pound)50,000 becomes enforceable;
23.1.17. Cessation of Business: if any Material Company ceases (except
---------------------
with the prior written consent of the Agent or other than by way
of a disposal on arm's length terms for cash consideration which
is then applied in accordance with Clause 13.3 (Proceeds of
Disposals) (if required)) to carry on a material part of its
business or shall suspend all or a substantial part of its
operations except where such businesses or operations are
transferred to a Charging Company;
23.1.18. Rescission of Investment Agreement: if any party to the
----------------------------------
Investment Agreement rescinds or purports to rescind any such
Agreement if such rescission is reasonably likely to have a
Material Adverse Effect;
23.1.19. Warranty Claim against the Principal Borrower under the
-------------------------------------------------------
Investment Agreement: if any Investor brings a claim against the
--------------------
Principal Borrower in respect of any breach of any of the
representations and warranties provided to the Investors under
the Investment Agreement;
23.1.20. Intercreditor Agreement: if:
-----------------------
(i) any Obligor or any Investor fails to comply with its
material obligations under the Intercreditor Agreement; or
(ii) the Intercreditor Agreement is not or ceases to be binding
on or enforceable (subject to the Reservations) against any
Obligor which is a party to it or on any Investor or shall
otherwise not be effective;
and in each case in the reasonable opinion of the Majority
Banks, the interests of the Banks under the Banking
Documents or any of them shall be materially prejudiced
thereby;
23.1.21. Material Litigation: if any Material Company is or becomes
-------------------
involved in or engages in any litigation, arbitration or legal
proceedings including any Environmental Claims where such
proceedings have a reasonable likelihood of being adversely
determined against such Material Company and which would, if so
adversely determined, be reasonably likely to have a Material
Adverse Effect;
23.1.22. Auditors' Qualification: if the Auditors qualify their report
-----------------------
on the Audited Accounts unless in the reasonable opinion of the
Agent such qualification is not material in the context of the
Banking Documents;
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73
23.1.23. Seizure of Assets: if the whole or a substantial part of the
-----------------
assets of any Material Company shall be seized or sequestrated by
any governmental or other authority or if any Material Company
shall be legally restrained from using the whole or a substantial
part of its assets in its business and it is reasonably likely to
have a Material Adverse Effect; or
23.1.24. Material Adverse Change: any event occurs or circumstances
-----------------------
arise which would have a Material Adverse Effect.
23.1.25. Change of Control: if there is a Change of Control after the
-----------------
Relevant Date.
23.1.26. Change of Ownership: if after the Relevant Date:
-------------------
23.1.26.1. save for any Permitted Disposal any member of Target
Group ceases to be a wholly owned subsidiary of the Target
(as that term is defined in Section 736 of the Companies Act
1985);
23.1.26.2. the Principal Borrower disposes of any of its shares
in Target.
23.1.27. Not restated.
------------
23.2. Rights on a Default
23.2.1. Rights of the Agent and the Majority Banks: Subject to Clause
------------------------------------------
23.3, the Agent may, in its sole discretion, and if so instructed
by the Majority Banks shall (without prejudice to any rights of
the Agent or any Senior Lender) upon and at any time after the
happening of an Event of Default, so long as the same is
continuing by notice in writing to the Principal Borrower:-
(i) cancel any unutilised amount of the Facilities and any
obligation of the Senior Lenders to make any Advance provide
any Loan Note Guarantee or provide any other Facility shall
be terminated whereupon the Commitments of the Senior
Lenders in respect of the Facilities shall be reduced to
zero; and/or
(ii) declare the Term Loans and/or the Working Capital Facility
to be immediately due and payable whereupon the Borrowers
shall forthwith repay the same together with all interest,
fees and other amounts payable hereunder (including without
limitation any amount payable pursuant to Clause 11 (Break
Costs)); and/or
(iii) declare the Term Loans and/or the Working Capital Facility
to be due and payable on demand, whereupon the Term Loans
and all interest and other sums payable under this Agreement
shall at all times after such declaration be due and payable
forthwith on demand by the Agent; and/or
(iv) suspend the right of the Borrowers to make any utilisation
of the Facilities; and/or
(v) declare that the Security Documents (or any of them) shall
have become enforceable; and/or
(vi) call for cash cover from any Borrower in respect of any
contingent or future liability assumed by the Senior Lenders
in respect of the Facilities
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74
whereupon the amount of such call shall become immediately
due and payable;
(vii) require the Borrowers to charge by way of first fixed
charge any cash cover called for to secure to the Agent on
behalf of the Senior Lenders the repayment of any sums which
the Senior Lenders are, or may become liable to pay in
connection with the Facilities; and/or
(viii) require the Principal Borrower to close the Offer at the
first available opportunity.
23.2.2. Call for Cash Cover: "call for cash cover" means:-
-------------------
in relation to any call made by the Agent in respect of the
Senior Lenders' contingent liability under the Facilities, that
the Borrowers or any of them shall be obliged to pay to the Agent
for the credit of a blocked deposit account with the Agent a sum
which is equal to the total amount of the liabilities (including
contingent and future liabilities) assumed by the Senior Lenders
in respect of the Facilities which sum shall become immediately
due and payable upon such call being made and such sum shall be
available for application (and in respect of which the Agent
and/or the Senior Lenders are authorised to make applications) in
respect of claims made upon the Senior Lenders in respect of any
liabilities (including contingent and future liabilities) under
the Facilities;
and "cash cover" means the payment of sums to the credit of the
blocked deposit account(s) aforesaid from time to time in respect
of the relevant liabilities assumed by the Senior Lenders.
23.3. The Certain Funds Period: Prior to the end of the Certain Funds
Period, unless a Keystone Event of Default has occurred which is
continuing, the Banks shall not be entitled:-
(i) to exercise any rights of rescission or
(ii) to terminate, suspend or cancel the Facilities or
(iii) to refuse to make any Advance or
(iv) to require repayment of the Term Loan Facilities
in consequence of:-
(a) any of the representations and warranties of the Obligors in any
Banking Document being or being proved to have been incorrect in
any respect or
(b) any Obligor having failed to perform, observe or comply with any
of its covenants or other obligations or agreements in any
Banking Documents or
(c) the occurrence of any Event of Default or Potential Event of
Defaults
(d) the fact that an Event of Default (other than a Keystone Event of
Default) would occur as a result of the making of an Advance.
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75
23.4. Indemnity for Default: Without prejudice to the foregoing provisions
of this Clause, the Borrowers indemnify each Senior Lender and the
Agent against any loss or expense which such Senior Lender and the
Agent may sustain or incur as a consequence of the occurrence of any
Event of Default or any event specified in Clause 12.4 (Mandatory
Repayment) including any break costs payable pursuant to Clause 11
(Break Costs).
23.5. Investigations and Reports: Without prejudice to any other rights and
remedies of the Senior Lenders, at any time after the occurrence of a
breach of any of the financial covenants contained in Clause 20.1
(Financial Covenants) (which breach will be deemed cured for the
purposes of this Clause if the Principal Borrower proves compliance
with such covenants on a subsequent testing date), the Majority Banks
may while such breach is continuing commission any accounting, legal,
property valuation, actuarial, environmental, insurance or other
report or investigation as they consider necessary or appropriate to
assist with the evaluation of their position or their exposure in
relation to the Facilities or the Group or any assets of the Group,
and the Borrowers jointly and severally undertake to pay on demand on
a full indemnity basis, all actual costs and expenses including out of
pocket expenses, fees and value added tax thereon incurred by the
Agent and/or the Senior Lenders in connection with the preparation of
such reports or the carrying out of such investigations and any advice
given to the Agent and/or Senior Lenders with respect thereto;
24. FEES
The following fees shall be paid:
24.1. Underwriting Fee: The Principal Borrower shall on the earlier of the
Completion Date and 21 days after the Relevant Date pay to the Agent
for its own account an underwriting fee in accordance with the letter
agreed between us. For the avoidance of doubt the underwriting fee
shall be payable by the Principal Borrower if the offer is declared
unconditional in all respects, irrespective of whether or not drawdown
of the Facilities takes place.
24.2. Agency Fee: If at any time the Banks are two or more in number, the
Principal Borrower shall pay to the Agent for its own account an
agency fee of (pound)15,000 per annum exclusive of value added tax,
such fee to accrue on a day to day basis and shall be payable annually
in advance from the date of notification of syndication for so long as
any of the Term Loans remain outstanding.
24.3. Non-Utilisation Fees: The Principal Borrower shall pay to the Agent
for the account of each Bank (pro rata to their Commitments in respect
of the relevant Facility) a non-utilisation fee on the amount of the
Available Term Loan Facility from day to day during the period
beginning on the date hereof and ending on the last date of the
relevant Commitment Period for the Term Loan Facility at a rate per
annum equal to 75 basis points on the Available Tranche A Term Loan
Facility and on the Available Tranche B Term Loan Facility. Such
non-utilisation fee shall be calculated on the actual number of days
elapsed and a 365 day year. The non-utilisation fee shall be payable
in arrears on the last business day of each successive Quarterly
Period and on the relevant Final Repayment Date. The non-utilisation
fee shall not be payable if the Offer does not become unconditional in
all respects.
25. COSTS AND EXPENSES
25.1. Expenses in connection with the Amendment of the Banking Documents:
The Principal Borrower shall pay on demand and on a full indemnity
basis in connection with any actual or reasonably proposed amendment
or extension of or waiver or consent under the Banking Documents.
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76
25.2. Expenses of Enforcement or Preservation of the Banking Documents: The
Borrowers severally undertake to pay on demand at any time and from
time to time after the date 21 days after the Relevant Date and on a
full indemnity basis, all actual costs and expenses including out of
pocket expenses, legal fees (and any value added or similar tax
thereon), incurred by the Agent, the Security Trustee and/or the
Senior Lenders in contemplation of or otherwise in connection with the
enforcement (or attempted enforcement) or preservation (or attempted
preservation) of any of their respective rights under the Banking
Documents or otherwise in respect of any sum from time to time owing
under the Banking Documents.
25.3. Payment by Deduction: The Agent shall be entitled to settle (to the
extent not already discharged) all fees, expenses and other sums due
and payable by any Borrower under Clause 24 (Fees) and Clause 25
(Costs and Expenses) the amount of which have been agreed by the
Principal Borrower) out of and by deduction from the relevant
Borrowers' account.
25.4. Indemnity for the Agent: If any of the Borrowers fails to perform any
of its obligations under Clause 23.4 (Indemnity for Default), Clause
25 (Costs and Expenses) or Clause 26 (Stamp Duty), each Bank shall, in
the proportion borne by its share of the Total Commitments (if no
Advances have been made) (or, if the Term Loans have been repaid in
full, its share of the Term Loans immediately prior to the final
repayment thereof), indemnify the Agent against any loss incurred by
it as a result of such failure and the Borrowers shall forthwith
reimburse each Bank for any payment made by it pursuant to this
Clause.
26. STAMP DUTY
The Borrowers shall pay on the Relevant Date all present and thereafter all
future stamp, registration and similar taxes or charges which are payable
or determined to be payable in connection with the execution, delivery,
performance or enforcement of any Banking Document (other than stamp duty
on any assignment or transfer pursuant to Clause 27.3) or any judgement
given in connection therewith and shall indemnify the Agent and the Senior
Lenders against any and all liabilities including penalties with respect to
or resulting from its delay or omission to pay any such stamp, registration
and similar taxes or charges.
27. ASSIGNMENTS AND TRANSFERS
27.1. Benefit of Agreement: This Agreement shall be binding upon and enure
to the benefit of each party hereto and its successors and permitted
assigns.
27.2. Assignments and Transfers by the Borrowers: The Borrowers shall not
be entitled to assign or transfer all or any of their rights, benefits
and obligations hereunder.
27.3. Assignments and Transfers by Banks
27.3.1. Any Bank may after consultation with the Principal Borrower
and the Agent at any time assign all or any of its rights and
benefits hereunder or transfer in accordance with Clause 27.3.2
all or any of its rights, benefits and obligations hereunder to a
Qualifying Lender PROVIDED that:
(i) at the same time it assigns or transfers an equivalent
proportion of its rights, benefits and obligations under the
Banking Documents including, without limitation, the
Intercreditor Agreement to the assignee or transferee and
the assignee or transferee undertakes to be bound by the
terms of the Banking Documents as a Bank (or, as the case
may be, Senior Lender) under these documents; and
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77
(ii) any such transfer shall be in respect of the same proportion
of that Bank's obligations in respect of the Term Loan
Facilities as it is of its Participation in the relevant
Facility; and
(iii) the transfers are in minimum amounts of the Minimum
Transfer Amount or higher amounts being multiples of the
Minimum Transfer Amount or all of its Participation.
27.3.2. If any Bank assigns all or any of its rights and benefits
hereunder and under the Banking Documents in accordance with
Clause 27.3.1, then, unless and until the assignee has agreed
with the Principal Borrower, the Agent and the other Senior
Lenders that it shall be under the same obligations towards each
of them as it would have been under if it had been a party hereto
and to the Banking Documents as a Bank, the Borrowers, the Agent
and the other Senior Lenders shall not be obliged to recognise
such assignee as having the rights against each of them which it
would have had if it had been such a party hereto.
27.3.3. If any Bank wishes to transfer all or any of its rights,
benefits and/or obligations hereunder and under the Banking
Documents as contemplated in Clause 27.3.1, then, subject as
provided therein, such transfer may be effected by the delivery
to the Agent of a duly completed and duly executed Transfer
Certificate in which event, on the later of the Transfer Date
specified in the Transfer Certificate and the fifth business day
following the date of the delivery thereof to the Agent (unless
the Agent agrees a shorter period):
(i) to the extent that in such Transfer Certificate the Bank
party thereto seeks to transfer its rights and/or its
obligations hereunder and thereunder, the Borrowers and such
Bank shall each be discharged from further obligations to
the other hereunder and their respective rights against each
other shall be cancelled (such rights and obligations being
referred to in this Clause as "discharged rights and
obligations");
(ii) the Borrowers and the Transferee party thereto shall each
assume obligations towards each other and/or acquire rights
against each other which differ from the discharged rights
and obligations only insofar as the Borrowers and such
Transferee have assumed and/or acquired the same in place of
the Borrowers and such Bank; and
(iii) the Agent, the Security Trustee, such Transferee and the
other Senior Lenders shall acquire the same rights and
assume the same obligations between themselves as they would
have acquired and assumed had such Transferee been an
original party hereto and thereto as a Bank with the rights
and/or obligations acquired or assumed by it as a result of
such transfer.
27.4. Notwithstanding the above, Bank of Scotland as the original Bank
agrees with the Principal Borrower that it will retain a Participation
of at least sixty six and two thirds per cent of the Term Loans.
27.5. Disclosure of Information: Subject to first notifying the Principal
Borrower in writing of the person to whom the information is to be
disclosed, the Agent or any Bank may disclose to any actual or
potential assignee or Transferee or to any person who may otherwise
enter into contractual relations with the Agent or such Bank provided
that it is a permitted assignee or
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78
transferee in relation to this Agreement such information about the
Borrowers and their Subsidiaries as the Agent or such Bank shall
consider appropriate PROVIDED that it shall require the actual or
potential assignee or Transferee to keep such information confidential
save as required by statute or court of law or as may be required to
be disclosed to the Bank of England or similar monetary or regulatory
authority in accordance with whose instructions such bank, assignee or
transferee is accustomed to acting or as may be required by the
Takeover Panel or The Stock Exchange or to its professional advisers
on a confidential basis or where such information has come into the
public domain.
27.6. Secondary Sell Down: If a Transferee wishes to assign or transfer or
grant any subparticipations in respect of any rights benefits and
obligations hereunder to a Bank which is not an original Transferee
from the Arranger it shall do so only after the prior approval of the
Agent after consultation with the Principal Borrower.
28. AGENCY PROVISIONS
28.1. The Agent and the Senior Lenders
28.1.1. Each Senior Lender hereby appoints the Agent to act as its
agent in connection with this Agreement and the other Banking
Documents and authorises the Agent to exercise such rights,
powers and discretions as are specifically delegated to it by the
terms of the Banking Documents together with all such rights,
powers and discretions as are reasonably incidental thereto and
each Senior Lender expressly authorises the Agent to enter into
the Intercreditor Agreement on its behalf and the Banks authorise
the Agent to enter into such amendments and variations thereto as
may be agreed by the Majority Banks;
28.1.2. In acting as Agent or Security Trustee for the Banks, the
relevant division of the Agent or, as the case may be, the
Security Trustee, shall be treated as a separate entity from any
other of its divisions or departments and despite the provisions
of this Clause , if the Agent or Security Trustee acts for or
transacts business with any Obligor in any capacity in relation
to any other matter (including as a Bank under this Agreement)
any information given by any Obligor to the Agent or Security
Trustee in such other capacity may be treated as confidential by
the Agent or the Security Trustee;
28.1.3. The Agent may:
(i) assume that:
(a) any representation made by any Obligor in connection
with any Banking Document is true;
(b) no Event of Default or Potential Event of Default has
occurred; and
(c) no Obligor is in breach of or default under its
obligations under any Banking Document;
unless it has actual knowledge or actual notice to the
contrary;
(ii) assume that the Facility Office of each Senior Lender is
that specified in this Agreement (or, in the case of a
Transferee, at the end of the Transfer Certificate to which
it is a party as Transferee) until it has received from
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79
such Senior Lender a notice designating some other office of
such Senior Lender to replace its Facility Office and the
Agent may act upon any such notice until the same is
superseded by a further such notice;
(iii) engage and pay for the advice or services of any lawyers,
accountants, surveyors or other experts whose advice or
services may to it seem necessary, expedient or desirable
and rely upon any advice so obtained;
(iv) rely as to any matters of fact which might reasonably be
expected to be within the knowledge of any Obligor upon a
certificate signed by or on behalf of the Obligor;
(v) rely upon any communication or document believed by it to be
genuine;
(vi) refrain from exercising any right, power or discretion
vested in it as agent or trustee under any Banking Document
unless and until instructed by the Banks and the Majority
Banks (as the case may be) as to whether or not such right,
power or discretion is to be exercised and, if it is to be
exercised, as to the manner in which it should be exercised;
and
(vii) refrain from acting in accordance with any instructions of
the Senior Lenders or any of them to begin any legal action
or proceeding arising out of or in connection with any
Banking Document until it shall have received such security
as it may require (whether by way of payment in advance or
otherwise) for all costs, claims, expenses (including legal
fees) and liabilities which it will or may expend or incur
in complying with such instructions;
28.1.4. The Agent shall:
(i) promptly inform each Senior Lender of the contents of any
notice or document received by it under any Banking
Document;
(ii) promptly notify each Senior Lender of the occurrence of any
Event of Default or any default by any Obligor in the due
performance of or compliance with its obligations under any
Banking Document of which the Agent has actual knowledge or
actual notice;
(iii) save as otherwise provided herein, act as agent and trustee
respectively under the Banking Documents in accordance with
any instructions given to it by the Banks or the Majority
Banks (as this Agreement may require), which instructions
shall be binding on the Banks; and
(iv) without prejudice to any liability of the Senior Lenders or
the Agent to any Obligor arising out of any breach of any
requirement of any Banking Document that any consent or
approval shall not be unreasonably withheld or delayed, if
so instructed by the Banks or the Majority Banks (as this
Agreement may require), refrain from exercising any right,
power or discretion vested in it as agent hereunder or as
trustee under any Banking Document;
28.1.5. Notwithstanding anything to the contrary expressed or implied
herein, the Agent shall not:
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80
(i) be bound to enquire as to:
(a) whether or not any representation made by any Obligor
in connection with any Banking Document is true;
(b) the occurrence or otherwise of any event which is an
Event of Default or Potential Default;
(c) the performance by any Obligor of its obligations under
any Banking Document to which it is expressed to be a
party;
(d) any breach of or default by any Obligor of or under its
obligations under any Banking Document to which it is
expressed to be a party;
(ii) be bound to account to any Senior Lender for any sum or the
profit element of any sum received by it for its own
account;
(iii) be bound to disclose to any other person any information
relating to any member of the Group if such disclosure would
or might in its opinion constitute a breach of any law or
regulation or be otherwise actionable at the suit of any
person; or
(iv) be under any obligations other than those for which express
provision is made herein or in English law generally;
28.1.6. Each Bank shall, from time to time on demand by the Agent,
indemnify the Agent in the proportion borne by its share of the
Facilities or, if no Advances have been made, its Commitment to
the Term Loan Facilities or, if the Term Loans have then been
repaid or cash collateralised in full, its share of the Term
Loans immediately prior to the final repayment thereof against
any and all costs, claims, expenses (including legal fees) and
liabilities which the Agent may incur, otherwise than by reason
of its own negligence or wilful misconduct, in acting in its
capacity as Agent under the Banking Documents;
28.1.7. The Agent accepts no responsibility for the accuracy and/or
completeness of any information supplied by any member of the
Group in connection herewith or for the legality, validity,
effectiveness, adequacy or enforceability of any Banking Document
and the Agent shall be under no liability as a result of taking
or omitting to take any action in relation to any Banking
Document, save in the case of negligence or wilful misconduct;
28.1.8. Each of the Senior Lenders agrees that it will not assert or
seek to assert against any director, officer or employee of the
Agent any claim it might have against any of them in respect of
the matters referred to in Clause 28.1.7;
28.1.9. The Agent may accept deposits from, lend money to and
generally engage in any kind of banking or other business with
any member of the Group;
28.1.10. The Agent shall not be treated for any purposes as having
actual knowledge of any matter of which the corporate finance or
any other division outside the corporate lending or loan
administration departments of the entity for the time being
acting as the Agent may become aware in the context of corporate
finance or advisory activities from time to time undertaken by
such entity for any Group Company;
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81
28.1.11. The Agent may following consultation with the Principal
Borrower resign its appointment hereunder at any time without
assigning any reason therefor by giving not less than 30 days'
prior written notice to that effect to each of the other parties
hereto PROVIDED that no such resignation shall be effective until
a successor for the Agent is appointed in accordance with the
succeeding provisions of this Clause 28;
28.1.12. If the Agent gives notice of its resignation pursuant to
Clause 28.1.1, then following consultation by the Senior Lenders
with the Principal Borrower another Senior Lender (acceptable to
the Principal Borrower acting reasonably) failing which any
reputable and experienced bank or other financial institution may
be appointed as a successor to the Agent by the Senior Lenders
during the period of such notice but, if no such successor is so
appointed and the Agent (by reason of conflict of interest or
duty, or principles of law) is obliged to retire as Agent, the
Agent may appoint such a successor itself after further
consultation with the Principal Borrower whose representations
the Agent will take into account;
28.1.13. If a successor to the Agent is appointed under the provisions
of Clause 28.1.12, then (i) the retiring Agent shall be
discharged from any further obligation hereunder but shall remain
entitled to the benefit of the provisions of this Clause 28.1.13
and (ii) its successor and each of the other parties hereto shall
have the same rights and obligations amongst themselves as they
would have had if such successor had been a party hereto;
28.1.14. It is understood and agreed by each Senior Lender that it has
itself been, and will continue to be, solely responsible for
making its own independent appraisal of and investigations into
the financial condition, creditworthiness, condition, affairs,
status and nature of the Borrowers and the Group and,
accordingly, each Senior Lender warrants to the Agent that it has
not relied and will not hereafter rely on the Agent:
(i) to check or enquire on its behalf into the adequacy,
accuracy or completeness of any information provided by or
in relation to any member of the Group in connection with
any Banking Document or the transactions therein
contemplated (whether or not such information has been or is
hereafter circulated to such Senior Lender by the Agent); or
(ii) to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or
nature of the Borrowers or any other member of the Group.
29. DECISIONS
29.1. Matters requiring Unanimous Agreement of the Banks:
29.1.1. Any question which would:-
29.1.1.1.1.1. increase or extend the period of any Participation
of any Bank;
29.1.1.1.1.2. reduce the Margin other than in accordance with
this Agreement;
29.1.1.1.1.3. extend the Commitment Period or the Final Repayment
Date for the Term Loan Facilities;
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82
29.1.1.1.1.4. reduce the amount of or extend the time for payment
of principal, interest, fee or any other sum payable
hereunder in respect of the Term Loan Facilities;
29.1.1.1.1.5. vary the provisions of Clause 23 (Default);
29.1.1.1.1.6. materially vary the Intercreditor Agreement or any
of the Security Documents, (provided always that whether
such variation is material shall be determined by the Agent
solely acting reasonably);
29.1.1.1.1.7. change the definition of Majority Banks or change
this Clause 29;
29.1.1.1.1.8. prior to the Offer becoming unconditional, extend
the Offer beyond 81 days from the date on which the Offer
Document is posted (or to such later date as the Agent and
the Panel on Takeovers and Mergers shall agree), or waive or
amend any condition of the Offer;
shall be determined only with the unanimous agreement of all of
the Banks;
29.1.2. Any consent or approval to be given by the Agent for the
purposes of Clause 3.2 (iv) (The Term Loan Facility), Clause 5.3
(Undertakings pending Completion) or Clause 21.9 (Interest,
Dividends and Distributions) shall be given by the Agent acting
on the instructions of all of the Banks.
29.2. Matters to be decided by the Majority Banks: Any question as to the
exercise of the Agent's discretion which is not expressed in the
Agreement to be determinable by all the Banks shall be resolved by the
Majority Banks.
29.3. Matters to be decided by the Senior Lenders: Save for any variations
or releases necessary to complete any Permitted Disposals any question
which relates to the release or material variation of any security
held by the Security Trustee on behalf of the Senior Lenders shall be
decided by the unanimous consent of the Banks, failing which no such
release or variation may be effected.
30. SET-OFF
30.1. Right of Set-Off: The Agent, the Security Trustee and each Senior
Lender shall have the right at any time or times after demand has been
made under Clause 23 (Default):-
(i) to combine or consolidate all or any sums of money now or
hereafter standing to the credit of the then existing accounts of
the Borrowers with the Agent, the Security Trustee and/or that
Senior Lender with the liabilities of the Borrowers or any of
them to the Agent, the Security Trustee and/or that Senior
Lender; and/or
(ii) to set-off or transfer any sum or sums standing to the credit of
any one or more of such accounts in or towards satisfaction of
any of the liabilities of any of the Borrowers to the Agent, the
Security Trustee and/or that Senior Lender on any other account
or in any other respect;
whether in either case such liabilities be actual, contingent,
primary, collateral, several or joint and shall promptly notify
the relevant Borrower of such application.
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83
30.2. Authority in favour of the Agent, the Security Trustee and each
Senior Lender: Each of the Borrowers irrevocably authorises the Agent,
the Security Trustee and each Senior Lender in its name and at its
expense to perform such acts and sign such documents as may be
required to give effect to any set-off or transfer pursuant to Clause.
30.3. Rights Cumulative: The provisions of this Clause 30 (Set-Off) shall
be in addition to and without prejudice to such rights of set-off,
combination, consolidation, lien and other rights whatsoever conferred
on the Agent, the Security Trustee and/or the Senior Lenders by law.
Notwithstanding anything else contained in this Clause 30 no
proprietary interest or charge or other security shall be created by
this Clause.
31. CALCULATIONS AND EVIDENCE OF DEBT
31.1. Agent to maintain Accounts: The Agent will maintain and keep accounts
showing the aggregate amount of all sums advanced from time to time by
the Banks hereunder and all payments made from time to time by the
Borrowers in respect thereof. The accounts kept by the Agent shall
constitute prima facie evidence of the Advances made by the Banks
pursuant to this Agreement.
31.2. Certificates:
31.2.1. a certificate of the Agent as to any interest rate for the
purposes of this Agreement or the MLA Rate ; or
31.2.2. a certificate of a Senior Lender as to (i) any amount by which
a sum is to be increased under Clause 16.1 (Grossing Up of
Payments); (ii) any increased cost claimed under Clause 17.1
(Compensation for Increased Cost); or (iii) any broken Interest
Period costs payable under Clause 11 (Break Costs);
shall constitute prima facie evidence thereof.
32. REDISTRIBUTION OF PAYMENTS
32.1. Procedure for Redistribution: If at any time prior to the enforcement
by the Agent or the Security Trustee of any of the Security Documents
a Bank ("a Receiving Bank") receives or recovers any amount or is
deemed to receive and recover any amount (whether by exercising a
right of set-off or banker's lien, voluntary payment or otherwise in
respect of its share of any sum ("the relevant sum") due from any of
the Borrowers hereunder for the account of the Receiving Bank and one
or more other Banks an in a greater proportion than that received or
recovered by any of such other Banks:-
32.1.1. the Receiving Bank shall forthwith inform the Agent and pay to
the Agent, within five Business Days after receipt of the amount
so received or recovered, an amount equal thereto;
32.1.2. there shall then fall due from the Borrowers to the Receiving
Bank an amount equal to the amount so paid by the Receiving Bank,
which shall be treated for the purposes of Clause 32.1.1 as if it
were an unpaid part of the Receiving Bank's share of the relevant
sum; and
32.1.3. the Agent shall on behalf of the Borrowers pay to each Bank to
whom the relevant sum was due that part of the amount so received
or recovered as would have been
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84
payable to such Bank if such amount had been paid by the
Borrowers to the Agent for account of those Banks.
32.2. Repayments compelled by law: If any Bank is compelled by law to repay
to any of the Borrowers any amount corresponding to an amount
distributed to it pursuant to Clause 32, the Banks shall make such
payments and take such other steps as the Agent shall determine to be
just and equitable to restore them to the position they would have
been in if such amount had not been so distributed.
32.3. Provisions not applicable to the Hedging Counterparty: For the
avoidance of doubt, the provisions of this Clause 32 shall not apply
to amounts received by or on behalf of the Hedging Counterparty under
the Hedging Documents.
33. NOTICES
33.1. Communications to be in writing: All communications to be made
hereunder shall be made in writing.
33.2. Address for service of the Borrowers: Any notices, proceedings or
other documents to be served on any of the Borrowers pursuant to this
Agreement shall be addressed to it care of the Principal Borrower at
its registered office for the time being marked for the attention of
the Managing Director or at such other address as the Principal
Borrower may hereafter advise the Agent in writing.
33.3. Address for service of the Banks, the Agent and the Security Trustee:
Any notice to the Senior Lenders and/or the Agent shall be sent to the
Agent. The address for service of The Governor and Company of the Bank
of Scotland in its various capacities under this Agreement shall be
its address set out in Schedule 1 (The Banks and their Commitments) or
such other address as it may advise the other parties in writing from
time to time.
33.4. Time Notices deemed to be given to the Borrowers: Any notice to the
Borrowers shall be deemed to have been given:-
33.4.1. if posted, on the second Business Day following the day on
which it has been properly despatched by first class mail (on the
fourth Business Day in the case of airmail, if appropriate)
postage prepaid; and
33.4.2. if sent by facsimile (subject to evidence of effective
transmission) on the Business Day on which transmitted; or
33.4.3. if lodged by hand, at the time of actual delivery thereof at
the address referred to above if delivered on a Business Day.
33.5. Time Notices deemed to be given to the Agent, the Security Trustee,
Hedging Counterparty and the Banks: Any notice to the Agent, the
Security Trustee, the Hedging Counterparty or the Banks shall be
deemed to have been given only on actual receipt by the intended
recipient who will promptly acknowledge receipt of any such notice.
34. INVALIDITY OF PROVISIONS
If at any time any provision hereof is or becomes illegal, invalid or
unenforceable in any respect neither the legality, validity nor
enforceability of the remaining provisions hereof shall in any way be
affected or impaired thereby.
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85
35. WAIVER
No failure to exercise and no delay in exercising on the part of the Agent,
or the Security Trustee or any Senior Lender any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other power or right. The
rights and remedies herein provided are cumulative and not exclusive of any
rights or remedies provided by law.
36. COUNTERPARTS
This Agreement may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed and delivered to the Agent shall be an original, but all the
counterparts shall together constitute one and the same instrument. Upon
receipt by the Agent of counterparts executed by all the parties hereto,
the Agent shall forthwith date each such counterpart and give notice in
writing of such delivery and dating to all the other parties hereto.
37. GOVERNING LAW AND JURISDICTION
37.1. English Law: This Agreement shall be governed by and construed in
accordance with the laws of England.
37.2. Non-exclusive Jurisdiction of the English Courts: Each of the
Borrowers agrees for the benefit of the Agent and the Senior Lenders
that the courts of England shall have jurisdiction to hear and
determine any suit, action or proceeding and to settle any disputes
which may arise out of or in connection with this Agreement and each
of the Banking Documents to which it is expressed to be a party and,
for such purposes, irrevocably submits to the non-exclusive
jurisdiction of such courts.
38. EURO
If the United Kingdom moves to the third stage of EMU, the Agent shall
after consultation with the Principal Borrower be entitled to make such
changes to this Agreement as it reasonably considers are necessary to
reflect the changeover to the euro (including, without limitation, the
rounding (up or down) of fixed monetary amounts to convenient fixed amounts
in the euro and amending any provisions to reflect the market conventions
for a euro facility of the kind contemplated in this Agreement).
AS WITNESS the hands of the authorised signatories of the parties hereto the day
and year first above written.
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86
SCHEDULE 1
The Banks and their Commitments
Bank Facility Commitment
The Governor and Company of the Bank of Tranche A Term Loan Facility (pound)17,250,000
Scotland
▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇ Term Loan Facility (pound)2,500,000
Birmingham (prior to the Amendment and
▇▇ ▇▇▇ Restatement Effective Date)
Tranche B Term Loan Facility (pound)750,000
(after the Amendment and
Restatement Effective Date)
Original Working Capital (pound)4,000,000
Facility
2001 Working Capital (pound)10,000,000
Facility
The address of The Governor and Company of the Bank of Scotland for service of
notices on it in its capacities as Arranger, Agent and Security Trustee shall be
▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇.
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SCHEDULE 2
Financial Definitions
"Adjusted Net Worth" means:
------------------
the aggregate of:
(i) the amount paid up or credited as paid up on the issued share capital of
the Principal Borrower including any amount credited to its share premium
account; and
(ii) the credit or debit balance in respect of consolidated Group accumulated
profit and loss reserves or other capital and revenue reserves, after
accruing for any dividend or other distributions declared or made by any
member of the Group (other than to another member of the Group) for the
relevant period and after accounting for tax on the profits for the
relevant period, as reported in the latest Audited Accounts or monthly
Management Accounts as applicable;
but excluding any reserves derived from any revaluation or write-up of book
values in respect of any property or assets since the date hereof.
"Assumed Senior Interest" in respect of any testing period means the higher of
(a) the actual Senior Interest for that period, or (b) the Senior Interest that
would have arisen during that period if the Share Acquisition Terms Facilities
had been fully drawn on the 1 July 1999.
"Borrowings" means in relation to any person at any time (and without double
counting) the principal amount (including capitalised interest) of any
indebtedness incurred in respect of:-
(i) monies borrowed or raised by reference to the amount repayable (other than
intra Group borrowings); and
(ii) the capital element of conditional purchase agreements, hire purchase
agreements and finance lease commitments computed in accordance with
statement of standard accounting practice No. 21 of The Institute of
Chartered Accountants in England and Wales; and
(iii) any debenture, loan stock, notes or bonds (not being performance bonds),
commercial paper or similar instrument or acceptance credit, ▇▇▇▇
discounting or note purchase facility including the Subordinated Loans; and
(iv) the acquisition cost of assets or services to the extent payable more than
six months after the time of acquisition or possession thereof by the party
liable where the primary purpose of deferment of payment is agreed in order
to enable a Group Company to finance the acquisition cost; and
(v) any guarantee (other than guarantees of the obligations of other Group
Companies), counter-indemnity obligation letter of credit, standby letter
of credit or other assurance against financial loss in respect of
indebtedness falling within this definition: and
(vi) receivables sold, assigned or discounted to the extent that any Group
Company is under any obligation to repurchase or make good any loss
relating to such receivables; and
(vii) any net liability incurred and due or to become due under any interest
rate management agreement; and
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88
(viii) for the purposes of Clause 23.1.9 (Cross Default) only any forward
foreign exchange contracts entered into with indebtedness calculated at the
rate of 10% of the contract value for contracts of up to twelve months
duration and 20% of the contract value for contracts in excess of twelve
months; and
(ix) any other transaction having substantially the same commercial effect as
any of the foregoing.
"EBIT" in respect of any period means the consolidated profits of the Group for
that period, before the deduction or addition of all interest payable or
receivable and corporation tax on the overall income of the Group payable in
respect of the financial period to which the relevant profit and loss accounts
relate, and after:
(i) adding back an amount equal to any amortisation charged during such period;
(ii) adding back any and all costs (including issue costs) and fees incurred in
respect of acquisitions and charged to the profit and loss account for the
relevant period, in accordance with FRS4 or otherwise;
(iii) excluding any profit or loss arising on any disposal write down or
revaluation of assets; and
(iv) the deduction of extraordinary and exceptional items;
"EBITDA" in respect of any period means the consolidated profits of the Group
for that period, before the deduction or addition of all interest payable or
receivable and corporation tax on the overall income of the Group payable in
respect of the financial period to which the relevant profit and loss accounts
relate, and after:
(i) adding back an amount equal to any depreciation and any amortisation
charged during such period;
(ii) adding back any and all costs (including issue costs) and fees incurred in
respect of acquisitions and charged to the profit and loss account for the
relevant period, in accordance with FRS4 or otherwise; and
(iii) excluding any profit or loss arising on any disposal write down or
revaluation of assets;
"Excluded Sums" means sums standing to the credit of a Group Company, whether in
the Cash Collateral Account or elsewhere, which are held by the Banks, the
Working Capital Bank or National Westminster Bank plc as cash-backing for any
contingent liability.
"GAAP" means generally accepted accounting principals and practices in the UK;
"Gross Asset Cover Percentage" means at any time the Total Assets of the Group
expressed as a percentage of the Net Borrowings of the Group.
"Net Borrowings" means total Borrowings of the Borrowers under the Facilities
Agreement and the Working Capital Facility Letter, less sums, other than
Excluded Sums, standing at credit of all accounts of the Group with the Banks
and the Working Capital Bank from time to time in respect of which they have
valid and enforceable rights of set-off.
"Net Security Value of Stock" means all Stock valued in accordance with GAAP;
"Senior Debt" means at any time the aggregate at that time of:-
-----------
(i) the Term Loans;
(ii) the amount outstanding under the Working Capital Facility;
"Senior Financing Costs" means the aggregate of:-
----------------------
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89
(i) Senior Interest; and
(ii) scheduled repayments of the Term Loans;
"Senior Interest" means, in relation to any specified period, the aggregate
---------------
amount of interest, commission and other recurrent financial expenses
attributable to the total Borrowings of the Group from the Banks and the Working
Capital Bank and interest in respect of hire purchase and/or finance leasing
charged for such period less interest received on sums standing to credit of all
accounts of the Group with the Banks and the Working Capital Bank from time to
time, but excluding interest received on Excluded Sums;
"Stock" means all marketable stock in trade and all raw materials, working in
-----
progress, goods in progress, finished goods, materials and supplies of every
nature and description (less provision for obsolete or slow moving Stock) of
each Group Company, all as may be properly included as "stock" in accordance
with GAAP (but excluding any of the above held in trust);
"Total Assets" means from time to time the aggregate value (adjusted by the
------------
Agent to accord with GAAP) and applied in regard to the Borrowers Management
Accounts and Audited Accounts, and to reflect any material adverse change in the
financial or trading position of any Group Company of all Trade Debtors and the
Net Security Value of Stock and all of the investments and other assets of each
Group Company properly included as "tangible fixed assets" net of hire purchase
and finance lease balances in accordance with GAAP but excluding any tangible
assets held on trust;
"Total Debt" means, at any time, the principal amount of all Borrowings of the
-----------
Group;
"Total Debt Service" means in relation to any specified period the aggregate of
------------------
Total Interest, scheduled repayments due on the total Borrowings of the Group,
loan note/loan stock repayments (but excluding repayments made under the
Variable Rate Guarantee Loan Notes 2004 series 1 and the Variable Rate Loan
Notes 2003 series 3 up to a maximum of (pound)802,000), and sums due or payable
under the Investment Agreement from time to time;
"Total Interest" means, in relation to any specified period, the aggregate
--------------
amount of interest, commission and other recurrent financial expenses
attributable to the Borrowings of the Group (including Dividends) paid or due to
be paid in such period less interest received on sums standing to the credit of
all accounts of the Group with the Banks and the Working Capital Bank;
"Trade Debtors" means debts due to each Group Company in the ordinary course of
business outstanding for not more than 90 days from the date of invoice (or such
other period agreed with the Agent) and which are not bad or doubtful (or
determined by the Agent to be bad or doubtful) but excluding:
(i) any debt owed by another Group Company;
(ii) any debt owed by any person who is also a creditor of a Group Company to
the extent of the amount owed by that Group Company to the creditor;
(iii) any debt which has been assigned or charged to or is held in trust for any
third party or is subject to any fracturing or invoiced discounting or
similar letter; and subject to
(iv) any adjustments the Agent may from time to time consider to be appropriate
in the context of the business of each Group Company and the Facilities.
"Working Capital" means:-
---------------
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90
(i) the aggregate amount receivable by any Group Company from good trade
debtors, other debtors and prepayments; plus
(ii) stock and work-in-progress; less
(iii) any amounts due to trade creditors and other creditors (not including
amounts accrued but unpaid in respect of Dividends and/or the Subordinated
Loan Notes or to the Senior Lenders) within one year (to include for the
avoidance of doubt accruals, deferred income and PAYE, and VAT); and
excluding
(iv) corporation tax (including any advance corporation tax) dividends,
interest, and any amounts accounted for as a provision for liabilities and
charges in accordance with generally accepted accounting principles
(including deferred tax).
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SCHEDULE 3
Form of Notice of Drawdown
To : [ ]
----
Dated : [ ] 1999
----
Dear Sirs,
We refer to the Facilities Agreement ("the Facilities Agreement") dated
--------
1999 between (1) the Principal Borrower, (2)-(7) The Governor and Company of the
Bank of Scotland. Terms defined in the Facilities Agreement shall have the same
meaning in this notice.
We hereby confirm that we have received confirmation from the Receiving Bank
that payment for [number] of [ ] Shares acquired pursuant to the Offer is to be
made on [date]. Payment is to be effected by a cash payment of (pound)[ ]
----
("the Cash Amount"). A [Receiving Bank Certificate is attached] and we hereby
irrevocably instruct you to pay the Cash Amount of this Advance on our behalf to
the Receiving Bank.
We hereby request a Drawdown of an Advance under the Tranche [A/B/C] Term Loan
Facility in the Amount of (pound)[ ] ([ ] sterling).
----- ------
For the purposes of Clause 9 of the Facilities Agreement the Interest Period in
respect thereof shall be of [ ] duration. Please make such Advance available
-----
as soon as possible after satisfaction of all conditions governing the
availability thereof [by way of a banker's draft in favour of "[ ]"] [by
-----
crediting the following account:-
Account Name:
Bank:
Sort Code:
Account No: ]
We confirm that:
(i) of the amount of(pound)[ ] being drawn down under the Tranche [A/B]
--------
Term Loan Facility:-
(a)(pound)[ ] is in respect of the consideration payable for [ ]
------- ------
[ ] Shares as referred to above;
-------
(b)(pound)[ ] is in respect of Offer Costs payable to [details];
-------
(c) [other - specify];
[*(ii) at the date hereof:-
(a) no Keystone Events of Default have occurred and are continuing;]
**(iii) each of the representations and warranties/contained in Clause 22.1
deemed repeated by virtue of Clause 22.2 are true and correct in all
material respects on the date hereof and will be true and correct in all
material respects on the date on which the Advance is made; and
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92
**(iv) on the date on which the requested Advance is made and immediately after
the making of that Advance there will exist no Event of Default and no
Potential Event of Default.
Yours faithfully,
for and on behalf of
[the Principal Borrower]
* include for drawings during the Certain Funds Period
** include for drawings after the Certain Funds Period
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SCHEDULE 4
Conditions Precedent
Part I - Conditions Precedent to be satisfied before the issue of Press Release
1. The following documents duly executed by each of the relevant parties
thereto:-
(i) this Agreement;
(ii) the First Debenture;
(iii) the Intercreditor Agreement; and
(iv) the Security Trust Deed;
2. A certified copy of the following documents duly executed by the relevant
parties thereto:
(i) the Investment Agreement;
3. A certified copy of the following documents in the agreed form:-
(i) the Press Release substantially in the form in which it is to be
issued;
(ii) the latest draft of the Offer Document;
(iii) the Pro Forma Financial Assistance Documents;
(iv) a provisional estimate of Expenses of the Offer;
(v) the Second Debenture, Third Debenture, Legal Charge, Keyman Insurance
Assignment and Intra-Group Loan Agreement;
(vi) Receiving Bank Instruction Letter;
(vii) the Flow of Funds Statement; and
(viii) the Service Agreements.
4. In respect of the Principal Borrower:-
4.1 a certified copy of its Certificate of Incorporation and Memorandum
and Articles of Association;
4.2 a certificate (without personal liability) of a director and the
secretary of the Principal Borrower to the effect that the requisite
board resolutions in the agreed terms have been duly and properly
passed at a duly convened and constituted meeting of the Principal
Borrower:-
(i) authorising the execution, delivery and performance on behalf of
the Principal Borrower of those of the Banking Documents to which
the Principal Borrower is a party; and
(ii) authorising a named person or persons specified therein to sign
on behalf of the Principal Borrower those of the Banking
Documents to which the Principal Borrower is a party and to give
any notices or certificates required in connection therewith and
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94
confirming that such resolutions are still in effect and have not
been varied or rescinded;
(iii) such certificate having annexed thereto a certified copy of the
relevant resolution of the board of directors.
In addition, such certificate shall confirm that on the date of the issue
of the Press Release:-
(a) the aggregate of the Borrowings of the Principal Borrower
(including borrowings under any of the Banking Documents) do not
or, as the case may be, would not, if fully drawn, exceed any
borrowing limit contained in the Principal Borrower's
constitutional documents;
(b) the execution of the Banking Documents by the Principal Borrower
is lawful and complies with its constitution;
(c) the matters represented and warranted by the Principal Borrower
in Clause 22 (Representations and Warranties) are true and
correct in all material respects and will be true and correct in
all material respects immediately after the issue of the Press
Release and no Event of Default or Potential Event of Default is
outstanding or would result from the issue of the Press Release;
4.3 a certificate ("the Whitewashability Certificate") of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇▇ confirming that:-
(i) as at the date of the Press Release each of the Initial Charging
Companies (excluding ▇▇▇▇▇▇▇ Precision Engineering Limited) has
net assets;
(ii) those net assets would not be materially reduced by the giving of
the financial assistance contemplated by the Pro Forma Financial
Assistance Documents (or to the extent that they would be
reduced, the financial assistance could be provided out of
distributable profits);
(iii) they know of no reason, whether disclosed in the Information
Documents or not, and including issues relating to Millennium
Compliance, why they, the Principal Borrower and the Initial
Charging Companies should not be able to enter into the Pro Forma
Financial Assistance Documents on the re-registration of Target
as a private company, following the Relevant Date.
5. Written instructions from the Principal Borrower to the Agent (conditional
upon the occurrence of the Relevant Date) authorising and instructing the
Agent to debit the account of the Principal Borrower with the Agent with
the underwriting fee and agency fee payable to the Agent in accordance with
Clauses 24.1 and 24.2;
6. A certified copy of each of the Information Documents;
7. Pre Press Release Letter;
8. Summary of Existing Borrowings being Refinanced;
9. Management Accounts for the Target Group in respect of the period ending 30
April 1999;
10. The New Issuance Instrument and a supporting board minute in the agreed
terms to effect the issue of the necessary warrants and register Uberior
Trading Limited as the holder thereof;
11. Forecast opening consolidated balance sheet of the Principal Borrower in
the agreed terms;
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95
12. Evidence acceptable to Bank of Scotland that the operating profit of the
Target Group or the Accounting Period which ended on 31st March 1999
exceeded(pound)3,900,000;
13. The Managers References.
Part II - Conditions Precedent to be satisfied on or before first Drawdown
1. A certificate from the Principal Borrower confirming that the conditions
precedent to the Investment Agreement have been, or will, simultaneously
with the initial Drawdown be satisfied, that no material conditions or
obligations contained therein have been waived or modified except with the
consent of the Agent and that none of the parties thereto has, at the
relevant Drawdown Date, any right to rescind any such agreements;
2. Receipt by the Principal Borrower into the Receiving Bank Account of
(pound)15,444,700 by way of subscription for Ordinary Shares and/or the
Subordinated Loans PROVIDED THAT irrevocable letters of instruction are
received by the Receiving Bank from certain of the Managers for the amount
of (pound)373,033 representing the amount which they shall subscribe in the
Principal Borrower following receipt of such funds in respect of their
acceptance of the Offer for the Target Shares, authorising the Receiving
Bank to apply such proceeds for the purposes of a deemed subscription for
shares in the Principal Borrower;
3. A certificate from the Principal Borrower confirming that save for such
increase as has been made with the prior written consent of the Agent
(acting on the instructions of all of the Banks), there has been no
increase in the amount of the Offer;
4. A certified copy of:-
(i) the press announcement confirming that the Offer has become or been
declared unconditional in all respects following acceptances of the
Offer having been received and not withdrawn in respect of more than
such percentage of the Target Shares as is required by Clause 5.1(i)
hereof;
(ii) the Offer Document.
5. Bank Mandates duly completed by the relevant Borrowers.
6. Executed Receiving Bank Instruction Letter.
7. The Insurance Report.
8. The Existing Lender Comfort Letter showing an aggregate amount owing to
Existing Lenders below (pound)2,900,000 as at the Relevant Date.
9. Bank Mandates for the Principal Borrower;
10. A Collection Account Letter executed by each Charging Company.
11. An ISDA Master Agreement incorporating Bank of Scotland's standard terms
and amendments duly executed by the Principal Borrower;
Part III - Conditions Precedent for the Granting of Security
1. In respect of each Charging Company:-
1.1 a certified copy of its Certificate of Incorporation and Memorandum,
Articles of Association or other constitutional documents;
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1.2 a certificate (without personal liability) of a director and the
secretary of each Charging Company to the effect that the requisite
board resolutions in the agreed terms have been duly and properly
passed at a duly convened and constituted meeting of that Charging
Company;
(i) authorising the execution, delivery and performance on behalf of
that Charging Company of those of the Banking Documents to which
that Charging Company is a party; and
(ii) authorising a named person or persons specified therein to sign
on behalf of that Charging Company those of the Banking Documents
to which that Charging Company is a party and to give any notices
or certificates required in connection therewith and confirming
that such resolutions are still in effect and have not been
varied or rescinded;
such certificate having annexed thereto a certified copy of the
relevant resolution of the board of directors.
In addition, such certificate shall confirm that on the date of
execution of the relevant Security Document
(a) the aggregate of the Borrowings of that Charging Company
(including borrowings under any of the Banking Documents) do not
or, as the case may be, would not, if fully drawn, exceed any
borrowing limit contained in that Charging Company's
constitutional documents;
(b) the execution of the Banking Documents by that Charging Company
is lawful and complies with its constitution.
1.3 evidence satisfactory to the Agent that (to the extent necessary) all
the requirements of s151-158 Companies ▇▇▇ ▇▇▇▇ (or comparable
restrictions in the relevant jurisdiction) have been satisfied in
respect of the Banking Documents to which that Charging Company is (or
is to be) a party.
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SCHEDULE 5
Deed of Accession
THIS DEED is made on 19
(1) [ ] ("the new Borrower")
---------------------------
(2) [ ] ("the Principal Borrower") on behalf of
---------------------------
itself and the Borrowers for the time being under the Facilities Agreement;
and
(3) [ ] as agent ("the Agent") on behalf of itself
---------------------------
and the Senior Lenders (as defined in the Facilities Agreement referred to
below).
WHEREAS this Deed is supplemental to the Facilities Agreement dated 1999
------
and made between the Principal Borrower and The Governor and Company of the Bank
of Scotland in its various capacities ("the Facilities Agreement").
NOW THIS DEED WITNESSES:-
1. Accession of New Borrower
In consideration of the Senior Lenders through the Agent agreeing to the
new Borrower becoming an additional borrower under the Facilities Agreement
and by the execution of this Deed the new Borrower agrees to observe and be
bound by the terms and provisions of the Facilities Agreement insofar as
they apply to the new Borrower as if it were an original party to the
Facilities Agreement as a Borrower PROVIDED THAT the new Borrower shall not
be required to enter into any guarantee or give any security to secure any
liabilities under the Facilities Agreement other than in respect of any
monies actually borrowed by it and interest and charges payable by it in
respect thereof and shall only have several obligations in respect of its
own borrowings, and interest and charges thereon, and the Senior Lenders
shall not be entitled to set off any liabilities of any of the other
Borrowers against any sum outstanding to the credit of the new Borrower's
accounts unless and until the requirements of s151-158 Companies ▇▇▇ ▇▇▇▇
have been complied with to the extent applicable (if at all) so as to make
the entering into of any guarantee or additional security or acceptance of
joint obligations or set off lawful.
2. Interpretation
This Deed shall be read as one with the Facilities Agreement so that any
reference therein to "this Agreement" "hereunder" and similar expressions
shall include and be deemed to include this Deed.
3. Conditions Precedent
The obligations of the Agent and each Senior Lender hereunder are subject
to the condition that the Agent is satisfied that all appropriate
conditions precedent have been fulfilled by the new Borrower and that the
new Borrower has executed security documentation acceptable to the Agent.
4. Notices
The new Borrower's address for notices and demands under the Facilities
Agreement is care of the Principal Borrower (marked for the attention of
[X]).
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SCHEDULE 6
Form of Transfer Certificate for a Bank
TO: The Governor and Company of the Bank of Scotland for itself and on behalf
of the other
parties to the Facilities Agreement mentioned below
Transfer Certificate
--------------------
relating to the Facilities Agreement ("the Facilities Agreement") dated
----------
1999 whereby inter alia Term Loan Facilities were made available to inter alia
the Principal Borrower and certain Group Companies.
Terms defined in the Facilities Agreement shall (unless otherwise defined
herein) have the same meaning in this Transfer Certificate.
1. [Transferor Bank] ("the Bank"):-
(i) confirms that the details appearing in the Schedule hereto under the
heading "Participation" accurately summarise the amount of the Term
Loans and the Commitment in relation to the Term Loan Facility which
is to be transferred and novated hereunder;
(ii) requests [Transferee Bank] ("the Transferee") to accept and procure
the transfer to and novation by the Transferee of the amount of the
Term Loans, the Commitment in relation to the Term Loan Facilities
specified in the Schedule hereto by duly executing and delivering this
Transfer Certificate to the Agent at its address for the service of
notices specified in the Facilities Agreement.
2. The Transferee hereby requests the Agent to accept this Transfer
Certificate as being delivered to the Agent pursuant to and for the
purposes of Clause 27 of the Facilities Agreement so as to take effect in
accordance with the terms thereof on [date of transfer] [subject only to
there having been credited to the account of the Bank (details below) the
sum of (pound)[ ]:-
---
[Details of Account]
3. The Transferee confirms that it has received a copy of the Facilities
Agreement and the Banking Documents together with such other documents and
information as it has required in connection with this transaction and that
it has not relied and will not hereafter rely on the Bank to check or
enquire on its behalf into the legality, validity, effectiveness, adequacy,
accuracy or completeness of any such documents or information and further
agrees that it has not relied and will not rely on the Bank or to assess or
keep under review on its behalf the financial condition, creditworthiness,
condition, affairs, status or nature of any Group Company or of any other
party to the Banking Documents.
4. The Transferee hereby undertakes with the Agent, the Banks and each of the
other parties to the Facilities Agreement that it will perform in
accordance with their terms all those obligations which by the terms of the
Facilities Agreement will be assumed by it after delivery of this Transfer
Certificate to the Agent and satisfaction of the conditions (if any)
subject to which this Transfer Certificate is expressed to take effect.
5. The Bank makes no representation or warranty and assumes no responsibility
for the legality, validity, effectiveness, adequacy or enforceability of
any Banking Document or any document relating thereto or for the financial
condition of any Group Company or for the performance and observance by any
Group Company of any of its obligations under any Banking Document or any
documents relating thereto and any and all such conditions and warranties,
whether express or implied by law or otherwise, are hereby excluded.
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6. This Transfer Certificate and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with English
law.
Schedule
--------
Details of the Participation being transferred
----------------------------------------------
Amount of the Tranche A Term Loan and the Tranche B Term Loan including the Term
Loan Commitment being transferred and novated to the Transferee:
Lending office address of the Transferee and address for service of notices on
the Transferee:
Sort Code:
Account No:
IN WITNESS whereof the parties hereto have caused this Deed to be duly executed
on the date first written above.
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SCHEDULE 7
The Group Companies
Part I - Initial Charging Companies
Company Registration Number
▇▇▇▇▇▇▇ PLC (subsequently called DDI Group Limited) 445250
Classical Circuits Limited 1034995
Calne Electronics Limited (subsequently called DDI Technologies 1336602
Limited)
Pretan Engineering Limited 2407995
Integrated Designs & Systems Limited 2624416
▇▇▇▇▇▇▇ Group Holdings Limited (subsequently called Dynamic 3232495
Details Limited)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Circuits Limited (subsequently called 2641343
Taylate Limited)
▇▇▇▇▇▇▇ Electronics Limited (unless the subject of a 2725420
prior close-down such that it becomes a Dormant Company) (subsequently
called DDI Electronics Limited)
▇▇▇▇▇▇▇ Precision SheetMetal Limited 2746716
Zlin Electronics Limited 1338479
▇▇▇▇▇▇▇ Engineering (Precision) Limited 2900127
(subsequently called DDI Precision Limited)
▇▇▇▇▇▇▇ Electronics International Limited (subsequently called DDI 3328896
International Limited)
Finishing Technology Limited (unless the subject of a prior Permitted 2859128
Disposal)
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101
Part II - Dormant Companies
BEMS Limited
▇▇▇▇▇▇▇ Electronics Limited (if the subject of a close-
down such that it becomesa Dormant Company)
▇▇▇▇▇▇▇ SMT Limited
HBH Group Limited
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102
THIS DOCUMENT has been executed as an Agreement by each of the parties to it.
The Principal Borrower
----------------------
SIGNED for and on behalf of ) ▇▇▇▇ ▇▇▇▇▇▇▇
MCM ELECTRONICS LIMITED )
(subsequently called DDI Europe Limited)
Director ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
As Arranger, Agent, Bank, Guaranteeing Bank and Security Trustee
----------------------------------------------------------------
SIGNED for and on behalf of ) ▇▇▇▇▇ ▇▇▇▇▇▇
THE GOVERNOR )
AND COMPANY OF THE BANK )
OF SCOTLAND by its duly )
authorised attorney
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103
SCHEDULE 2
Conditions Precedent
1. The duplicate of this Deed signed on behalf of the Borrowers and the
Charging Companies;
2. A certified copy of the resolution of the board of directors of the
Borrowers and the Charging Companies approving the entering into this Deed,
the 2001 Working Capital Facility Letter, the 2001 Debenture and any
document to be entered into pursuant to paragraph 7 below and authorising a
specified person or persons to sign this Deed and any documents required
under this Deed on its behalf;
3. Confirmation to the Agent's satisfaction that no Event of Default or
Potential Event of Default has occurred and is continuing.
4. The representations and warranties in Clauses 22.1.1 to 22.1.12 (inclusive)
of the Facilities Agreement (as amended and restated hereby) are true with
respect to the facts and circumstances then existing.
5. Repayment of the Original Working Capital Facility.
6. Execution of the 2001 Working Capital Facility Letter and the 2001
Debenture.
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EXECUTED as a DEED (but not )
delivered until the date hereof) by DDI )
EUROPE ) LIMITED acting by: )
Director M ▇▇▇▇▇▇
Director/Secretary M Glanfield
EXECUTED as a Deed (but not )
delivered until the date hereof) )
by DDI GROUP LIMITED )
acting by: )
Director M ▇▇▇▇▇▇
Director/Secretary P ▇▇▇▇▇▇
EXECUTED as a Deed (but not )
delivered until the date hereof) )
by CLASSICAL CIRCUITS LIMITED )
acting by: )
Director M ▇▇▇▇▇▇
Director/Secretary P ▇▇▇▇▇▇
EXECUTED as a Deed (but not )
delivered until the date hereof) )
by DDI TECHNOLOGIES LIMITED )
acting by: )
Director M ▇▇▇▇▇▇
Director/Secretary P ▇▇▇▇▇▇
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105
EXECUTED as a Deed (but not )
delivered until the date hereof) )
by PRETAN ENGINEERING LIMITED )
acting by: )
Director M ▇▇▇▇▇▇
Director/Secretary P ▇▇▇▇▇▇
EXECUTED as a Deed (but not )
delivered until the date hereof) )
by INTEGRATED DESIGNS & SYSTEMS )
LIMITED acting by: )
Director M ▇▇▇▇▇▇
Director/Secretary P ▇▇▇▇▇▇
EXECUTED as a Deed (but not )
delivered until the date hereof) )
by DYNAMIC DETAILS LIMITED acting by: )
Director M ▇▇▇▇▇▇
Director/Secretary P ▇▇▇▇▇▇
EXECUTED as a Deed (but not )
delivered until the date hereof) )
by ZLIN ELECTRONICS LIMITED )
acting by: )
Director M ▇▇▇▇▇▇
Director/Secretary P ▇▇▇▇▇▇
EXECUTED as a Deed (but not )
delivered until the date hereof) )
by DDI PRECISION LIMITED acting by: )
)
Director M ▇▇▇▇▇▇
Director/Secretary P ▇▇▇▇▇▇
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106
EXECUTED as a Deed (but not )
delivered until the date hereof) )
by DDI INTERNATIONAL LIMITED )
acting by: )
Director M ▇▇▇▇▇▇
Director/Secretary P ▇▇▇▇▇▇
EXECUTED as a Deed (but not )
delivered until the date hereof) )
by DDI SALES LIMITED )
acting by: )
Director M ▇▇▇▇▇▇
Director/Secretary P ▇▇▇▇▇▇
EXECUTED as a Deed (but not )
delivered until the date hereof) )
by ▇▇▇▇▇▇ ▇▇▇▇▇▇ LIMITED )
acting by: )
Director M ▇▇▇▇▇▇
Director/Secretary M Glanfield
SIGNED as a deed by ▇▇▇▇▇▇ ▇▇▇▇▇▇ )
as duly appointed attorney of )
The Governor and Company of the Bank of Scotland ) A ▇▇▇▇▇▇
in the presence of: )
)
▇▇▇▇▇▇▇ I Winning
Victoria ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇
Solicitor
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107