EXHIBIT (b)(1)
CONFORMED COPY
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DATED 27th January 1998
____________________________________________
THE SAGE GROUP PLC
ROSE ACQUISITION CORP.
- and -
THE BANKS AND FINANCIAL INSTITUTIONS
named in Schedule 1
- and -
LLOYDS BANK PLC
CAPITAL MARKETS
as Arranger
- and -
LLOYDS BANK PLC
CAPITAL MARKETS
as Agent
_____________________________________________
FACILITIES AGREEMENT
in relation to a $218,000,000 multi-currency
Term Loan Facility
and a
$15,000,000 multi-currency Revolving Credit Facility
_____________________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Mitre House
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
T ▇▇▇(▇)▇▇▇ ▇▇▇ ▇▇▇▇
F ▇▇▇(▇)▇▇▇ ▇▇▇ ▇▇▇▇
(Ref: FMO/0X2244.08689)
CONTENTS
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CLAUSE DESCRIPTION PAGE NO
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1. Definitions and interpretation
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1.1 Definitions 1
1.2 Interpretation 18
2. The Facilities
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2.1 Amount and Purpose 19
2.2 Utilisation Procedures - Drawdown of the Advances 20
2.3 Utilisation Procedures - Tranches under the Term Loan Facility 22
2.4 Interest 24
2.5 Variation of Margin 27
2.6 Repayment and Prepayment 28
2.7 Currency Option 30
2.8 Default Interest 31
2.9 Payments 32
2.10 Reduction, Cancellation and Termination 33
2.11 Obligations and Rights of the Banks, 34
Arranger and Agent
3. Conditions precedent
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3.1 Conditions precedent to the Facilities 34
3.2 Conditions precedent to the making of
an Advance or Tranche 34
3.3 Rollover 35
3.4 Certain Funds Period 35
4. Taxes
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4.1 Grossing up 36
4.2 Bank's obligation to lodge relevant 36
declarations etc
4.3 Qualifying Bank 36
4.4 US Taxes 37
5. Tax receipts
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5.1 Notification 38
5.2 Delivery of tax receipts 38
5.3 Benefit of tax credits etc 38
6. Increased costs
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6.1 Reimbursement for increased costs 39
6.2 Exceptions 40
6.3 Notification 40
7. Illegality and Market Disruption
--------------------------------
7.1 Illegality 41
7.2 Market Disruption 41
8. Mitigation of additional costs
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8.1 Banks' obligation to mitigate 43
9. Representations and warranties
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9.1 Representations and warranties 44
9.2 Target and Subsidiaries 48
9.3 Repetition 48
10. Financial covenants and undertakings
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10.1 Financial covenants 49
10.2 Undertakings 51
10.3 Target and subsidiaries 55
11. Events of Default
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11.1 Events of Default 55
11.2 Target and Subsidiaries 60
11.3 Delay 60
11.4 Interest 60
12. Costs, Expenses and Indemnities
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12.1 Costs and expenses 60
12.2 Indemnity by the Parent 61
12.3 Indemnity by ▇▇▇▇▇ 62
13. Fees
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13.1 Agency fee 62
13.2 Underwriting Fee 62
13.3 Syndication Fee 62
13.4 Commitment fee 62
14. Notices
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14.1 Service 63
14.2 Deemed delivery 63
15. Miscellaneous
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15.1 Waiver 64
15.2 Governing law 64
15.3 Jurisdiction and Submission 64
15.4 Accounts 65
15.5 Schedules 65
15.6 Illegality 65
15.7 Currency 65
15.8 Provision of payments 66
15.9 Turnover taxes 67
15.10 Set-off 67
15.11 Excess payments 67
15.12 Redistribution of payments 68
15.13 Amendments 68
16. Assignment and Transfer and Facility Offices
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16.1 Successors, assigns and transferees 69
16.2 Restriction on assignment and transfer 69
by Borrowers
16.3 Assignment or transfer by a Bank 69
16.4 Transfer 70
16.5 Additional cost to the Borrowers 70
16.6 Facility Office 70
16.7 Confidential information 71
16.8 Fee 71
17. The Agent, the Arranger and the Reference Banks
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17.1 Appointment of Agent 71
17.2 Waiver etc 71
17.3 No fiduciary relationship 72
17.4 Agent not required to take certain action 73
17.5 Exclusion of liability 73
17.6 No reliance 73
17.7 Extent of Agent's and Arranger's responsibility 73
17.8 No liability to account 74
17.9 Indemnity 74
17.10 Retirement of Agent 74
17.11 Reference Banks 75
17.12 Agent's costs 75
17.13 Agency and syndication division 76
17.14 No requirement to disclose 76
17.15 Agent and Arranger not deemed to have actual 76
knowledge or notice of certain matters
17.16 Meetings of Banks 76
17.17 Conflict of interest 77
18. Hedging 77
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19. Releases 78
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20. Counterparts 78
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Schedules
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1 The Banks and their Commitments 79
2 Associated Costs Rate 80
3 Transfer Certificate 82
4 Utilisation Requests 86
5 Conditions Precedent 91
6 Material Subsidiaries 98
7 Permitted Encumbrances 99
Execution pages 100
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THIS FACILITIES AGREEMENT is made the_______of________1998
BETWEEN:
(1) THE SAGE GROUP PLC incorporated in England (Registration No 2231246) and
having its registered office at Sage House, Benton Park Road, Newcastle
upon Tyne NE7 7LZ (THE "PARENT");
(2) ROSE ACQUISITION CORP., a company incorporated in the State of Delaware,
United States of America (the "PURCHASER");
(3) THE BANKS AND FINANCIAL INSTITUTIONS whose names and present Facility
Offices are set forth in Schedule 1;
(4) LLOYDS BANK PLC CAPITAL MARKETS, whose address for this purpose is St
George's House, ▇/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ in its capacity as arranger
(the "ARRANGER"); and
(5) LLOYDS BANK PLC CAPITAL MARKETS, whose address for this purpose is St
George's House, ▇/▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ in its capacity as agent
of and trustee for the Banks.
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this agreement and the schedules, except where the context otherwise
requires, each of the expressions set out in the left hand column shall
bear the meaning shown opposite it in the right hand column:
"ACCEPTABLE FORM" means in relation to any document a form which is agreed
between the Parent and the Agent or, in default of agreement, in a form
which is acceptable to the Agent and which shall have been designated as
such by the Agent
"ACCOUNTING REFERENCE DATE" has the meaning given to it in Part VII of the
Companies Act 1985 (as amended by the Companies Act 1989)
"ACQUISITION" means the acquisition by way of purchase and merger of the
Target by the Purchaser according to the terms of the Offer to Purchase,
the Option Agreement, the Shareholders' Agreements and the Merger
Agreement
"ACQUISITION DOCUMENTS" means the Offer to Purchase, the Merger Agreement,
the Option Agreement, the Shareholders' Agreements and the Schedule 14D-1
"ADVANCE" means an advance (as from time to time reduced by repayment)
made or to be made by the Banks hereunder
"AGENT" means Lloyds Bank Plc acting in its capacity as agent and trustee
of the Banks and such expression shall include any successor to that
office appointed pursuant to clause 17
"AGENT'S FEES LETTER" means the letter of even date herewith addressed by
the Agent to the Parent
"ANNOUNCEMENT" means the announcement issued by the Purchaser of the
Tender Offer to acquire not less than 49.9% of the entire issued share
capital of Target
"ASSOCIATED COSTS RATE" means, in relation to any Advance or Tranche or
unpaid sum denominated in Sterling, the cost to any Bank of complying with
the requirements of the Bank of England or other regulatory authority
affecting mandatory liquid assets, special deposits or other requirements
of any regulatory authority of whatever nature in accordance with the
additional cost provisions as set out in Schedule 2
"AVAILABLE COMMITMENT" means, in relation to a Bank and a proposed Advance
or Tranche under this agreement and for the purposes of clause 13.4 of
this agreement, its Commitment less its Outstandings
"AVAILABILITY PERIOD" means:
(a) in respect of Advances under the Term Loan Facility, the period
beginning on the date of this agreement and ending on 31st July 1998
(b) in respect of Advances under the Revolving Advances Facility, the
period beginning on the date of this agreement and ending on the
Termination Date
"AVAILABLE REVOLVING FACILITY AMOUNT" means, in relation to any proposed
Utilisation under the Revolving Advances Facility, the aggregate of the
Revolving Commitments of all the Banks at the time of such Utilisation,
adjusted (as indicated below) so as to take into account:
(a) the aggregate of the Revolving Outstandings at the time of such
Utilisation (an adjustment downwards);
(b) (to the extent not already taken into account) any reduction in the
Revolving Commitment of a Bank which will occur prior to the
commencement of, or during, the Term relating to the proposed
Utilisation in question consequent upon a cancellation or reduction
of the whole or any part of the Revolving Commitment of such Bank,
pursuant to the terms hereof (an adjustment downwards);
(c) the aggregate of the Original Dollar Amounts of any Advances which
the Banks are then obliged to make under the Revolving Advances
2
Facility on, before or after the proposed Utilisation Date by virtue
of a Utilisation Request having been made (an adjustment downwards);
and
(d) the aggregate of the Original Dollar Amounts of any Advances which
have been made under the Revolving Advances Facility by the Banks
and which are due to be repaid on or before the proposed Utilisation
Date (an adjustment upwards)
"AVAILABLE TERM LOAN FACILITY AMOUNT" means, in relation to any proposed
Utilisation under the Term Loan Facility, the aggregate of the Term Loan
Commitments of all the Banks at the time of such Utilisation, adjusted (as
indicated below) so as to take into account:
(a) the aggregate of the amounts of the Term Loan Outstandings under the
Term Loan Facility at the date of or before the time of the proposed
Utilisation and whether or not still outstanding (an adjustment
downwards);
(b) (to the extent not already taken into account) any reduction in the
Term Loan Commitment of a Bank which will occur prior to or during
the term of such proposed Utilisation consequent upon a cancellation
or reduction of the whole or any part of the Term Loan Commitment of
such Bank, pursuant to the terms hereof (an adjustment downwards);
and
(c) the aggregate of the Original Dollar Amounts of any Advances (or
Tranches comprised therein) under the Term Loan Facility which the
Banks are then obliged to make on, before or after the date of the
proposed Utilisation by virtue of a Utilisation Request having been
made (an adjustment downwards).
"BANKS" means at the date hereof, the Bank whose name is set out in
Schedule 1, and thereafter such Bank to the extent that it remains with a
Commitment hereunder and those banks and financial institutions which,
from time to time, acquire a Commitment by virtue of the provisions of
this agreement and remain with such a Commitment, and the successors in
title and permitted assigns thereof
"BASE ACCOUNTS" means the unaudited consolidated profit and loss account
and balance sheet of the Group for the Financial Year ended 30th September
1997
"BASE ACCOUNTS DATE" means 30th September 1997
"BORROWERS" means the Parent and the Purchaser; and "BORROWER" means
either of them as the context may require
"BORROWINGS" means any Indebtedness incurred in respect of:
(a) money borrowed or raised of any kind (whether or not for a cash
consideration) and premiums (if any) and accrued interest in respect
thereof;
3
(b) the principal, premiums (if any) and accrued interest in respect of
any debenture, bond, note, commercial paper, loan stock or similar
debt instrument;
(c) any share capital or other amounts payable thereon, to the extent
that such share capital or amounts are redeemable or payable prior
to the Final Repayment Date pursuant to the terms of issue thereof
or the terms of any other obligation of the issuer or another person
to purchase the same or make payment thereon;
(d) any acceptance credits, documentary credits, note or bond
facilities;
(e) rental or hire payments due under hire-purchase agreements or
finance leases (whether in respect of land, machinery, equipment or
otherwise) entered into as a method of financing the acquisition of
the asset leased or hired;
(f) the deferred purchase price of assets or services where such
payments are deferred for a period of more than 90 days (if the
creditor is a person resident in the United Kingdom) or 120 days (if
the creditor is a person resident somewhere other than the United
Kingdom);
(g) any receivables sold or discounted (otherwise than on a non-recourse
basis) to the extent of any recourse to the vendor;
(h) any other transaction having the commercial effect of borrowing; and
(i) guarantees, indemnities or other suretyship obligations in respect
of any of the foregoing.
For the purposes of this definition, no item shall be counted more than
once. Where it is necessary to calculate Borrowings in Sterling then any
of the foregoing which is denominated in or calculated by reference to a
currency other than Sterling shall be converted into Sterling at such rate
as the Agent shall determine to be the spot rate at which the Agent is
able, at or about 11.00 am on the day in question, to purchase Sterling
with that amount of the currency concerned in the London foreign exchange
market
"BUSINESS DAY" means:
(a) a day (not being a Saturday or Sunday) on which banks and foreign
exchange markets are open for business (including dealing in US
Dollars) in London; and
(b) (in respect of a day on which a payment or other transaction in US
Dollars or an Optional Currency is required under this agreement in
a place other than London) a day (not being a Saturday or Sunday) on
which banks and foreign exchange markets are also open for business
in the place of the principal domestic market of the currency
concerned or
4
where there is more than one such place of principal domestic
market, the place designated by the Agent for such purpose
"CAPITAL EXPENDITURE" means expenditure which should be treated as capital
expenditure in accordance with generally accepted accounting principles,
standards and practices in the United Kingdom from time to time
"CASH EQUIVALENT INVESTMENTS" means:
(a) debt securities denominated in Deutschemarks, French Francs,
Sterling or US Dollars (or a currency readily convertible into the
aforegoing) issued by the Government of a country which is a member
of the Organisation for Economic Co-operation and Development where
there is outstanding sovereign debt issued by that country which is
rated at least BBB+ by Standard & Poor's Corporation ("S&P's") or
Baal by ▇▇▇▇▇'▇ Investor Services Inc. ("Moody's"), where such debt
securities have not more than 3 months to final maturity and are not
by their terms convertible into any other form of security
(b) debt securities denominated in Deutschemarks, French Francs,
Sterling or US Dollars (or a currency readily convertible into the
aforegoing) which have not more than 3 months to final maturity, are
not convertible into any other form of security, are rated P1 by
Moody's or A-1 by S&P's and are not issued or guaranteed by any
member of the Group
"CERTIFICATE OF COMPLIANCE" has the meaning given to it by clause
10.1(c)(vii)
"CERTIFIED COPY" means any copy certified as true, complete and up to date
by the company secretary or a director of the Parent
"CLOSE OF SYNDICATION" means the date upon which the Agent (acting
reasonably) determines that the primary syndication of the Facilities has
closed
"COMMITMENT" in relation to a Bank, means (save as otherwise provided
herein) the aggregate amount in US Dollars of its Revolving Commitment and
Term Loan Commitment set opposite its name in the First Schedule or (as
the case may be) the amounts in US Dollars of Revolving Commitment and
Term Loan Commitment specified as the portion thereof transferred pursuant
to the terms hereof to such Bank in the Transfer Certificate pursuant to
which such Bank became a party hereto, in each case to the extent not
cancelled or reduced pursuant to the provisions hereof
"COMMITMENT FEE" means the fee payable to the Agent pursuant to clause
13.4
"CONSOLIDATED EBITDA " means in respect of any period Consolidated Profit
before Interest and Tax for that period but after adding back an amount
equal to any depreciation or amortisation in respect of the Group charged
during such period
5
"CONSOLIDATED FINANCE COSTS" means, in relation to any relevant period,
the aggregate of:
(a) Consolidated Net Interest Payable;
(b) any repayments of principal required to be made during and in
respect of such period in respect of any Borrowings (including
repayments of principal required to be made pursuant to the terms of
this agreement which for the avoidance of doubt shall include any
repayments which would have been required to have been made but for
any prepayment made during such period)
"CONSOLIDATED NET INTEREST PAYABLE" the aggregate of all amounts of
interest and recurrent financial expenses or charges of the Parent and its
Subsidiaries (including, without limitation, commitment commission)
payable to persons who are not the Parent or such a Subsidiary (calculated
on a consolidated basis but after deducting any interest receivable from
persons who are not the Parent or such a Subsidiary) attributable to the
period in question, and shall include any discount, fees and any element
attributable to interest comprised in payments to lessors under finance
leases or to owners under hire-purchase agreements, and also to include
(without limitation and for the avoidance of doubt) any amounts of such
interest and expenses which may not have accrued payable in any such
period and which are payable in a later period but are attributable to
that period. In calculating Consolidated Net Interest Payable for any
period, due account shall be taken of (and a consequential adjustment,
whether positive or negative shall be made to reflect) the net benefit or
loss (as the case may be) to the Parent and its Subsidiaries for or in
respect of any payments accruing to or from them in such period pursuant
to any interest rate swaps, hedging or analogous contracts for the
mitigation of interest rate fluctuations or movements which they have
entered into with third parties (which for these purposes may include one
or more of the Banks) in respect of Indebtedness
"CONSOLIDATED PROFIT BEFORE INTEREST AND TAX" means the consolidated net
profit of the Parent and its Subsidiaries attributable to the period in
question (before taxation, minority interests, exceptional items, profits
or losses on the sale or termination of operations, costs of a fundamental
reorganisation or restructuring, results of discontinued operations,
interest payable and any element attributed to interest comprised in
payments to lessors under finance leases or to owners under hire-purchase
agreements and other matters to be taken into account in calculating
Consolidated Net Interest Payable)
"CONSOLIDATED PROFIT BEFORE TAX" means the consolidated net profit of the
Parent and its Subsidiaries attributable to the period in question before
taxation
"CONSOLIDATED TOTAL BORROWINGS" means at any time, a sum in Sterling equal
to the aggregate (calculated on a consolidated basis) of the amount of
Borrowings of the Parent and its Subsidiaries after deducting Cash
Equivalent Investments and the aggregate amounts of cash in hand and cash
at bank which can at that time immediately and readily be withdrawn by the
Parent or any such Subsidiary and remitted to the United Kingdom
6
"CONSOLIDATED TURNOVER" means the consolidated turnover of the Parent and
its Subsidiaries attributable to the period in question
"CONVERSION DATE" means in relation to any Tranche or Advance under the
Term Loan Facility denominated in an Optional Currency:
(a) if the relevant Tranche or Advance has at all times been outstanding
in that Optional Currency and has not been repaid and re-advanced
pursuant to clause 2.7(c), the date of drawing of the same; or
(b) if the relevant Tranche or Advance has been repaid and re-advanced
pursuant to clause 2.7, the date on which such Tranche or Advance
was last repaid and re-advanced;
"DEUTSCHEMARKS" means the lawful currency of Germany
"DOCUMENTS" has the meaning given to it by clause 12.1
"DOLLAR EQUIVALENT" means, in relation to any amount of Optional Currency
on any relevant date, the amount of US Dollars determined by the Agent as
being required to purchase that amount of Optional Currency at its spot
rate for the purchase of that Optional Currency with US Dollars at or
about 11.00am on the third Business Day immediately preceding that date
"DRAWDOWN UTILISATION" means a utilisation of one of the Facilities by the
drawing down of an Advance and where relevant, the division at such time
of that Advance in Tranches
"DRAWDOWN UTILISATION REQUEST" means a request by one of the Borrowers for
a Drawdown Utilisation
"EFFECTIVE DATE" has the meaning given to it by clause 3.1
"ENCUMBRANCE" means, without limitation, any mortgage, debenture, standard
security, charge (whether fixed or floating), pledge, hypothecation or
lien (other than a lien arising by operation of law), assignment,
agreement or other arrangement which is for the purpose of and has the
same commercial effect as the granting of security, or other security
interest of any kind
"ENVIRONMENTAL LAWS" means all laws (statutory common law or otherwise)
from time to time regulating the carrying on of any process or activity on
premises and any emissions from and all waste produced by such process or
activity with any chemicals or substances relating to the same whether
relating to health and safety, the workplace, the environment or the
provision of energy from time to time in force
"ENVIRONMENTAL LICENCE" means any permit, licence, authorisation, consent
or other approval required by or given pursuant to any Environmental Laws
7
"ERISA" means the Employee Retirement Income Security Act of 1974 (as
amended from time to time) and the rules and regulations promulgated
thereunder from time to time in effect
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the
Target under section 414 of the Internal Revenue Code of 1986 (as amended
from time to time)
"EQUIVALENT AMOUNT" means, in relation to any amount of US Dollars on any
relevant date, the amount of Optional Currency determined by the Agent as
being capable of being purchased with that amount of US Dollars at its
spot rate for the purchase of that Optional Currency with US Dollars at
our about 11.00am on the third Business Day immediately preceding that
date
"EVENT OF DEFAULT" means any one of the events or circumstances listed in
clause 11.1
"FACILITIES" means the Revolving Advances Facility and the Term Loan
Facility; and "FACILITY" means the relevant one of them (as the context
may require)
"FACILITY OFFICE" means in relation to a Bank, the office specified in
Schedule 1 (or, in the case of a Transferee, the office specified in the
relevant Transfer Certificate) or such other office as it may from time to
time notify in writing to the Parent and the Agent for the purposes of
this agreement in accordance with clause 16.6
"FINAL REPAYMENT DATE" means the date being five years from the date
hereof
"FINANCIAL YEAR" means any period of 12 months ending on or about 30th
September in any year
"FINANCE DOCUMENTS" means this agreement, the Security Documents and any
agreement supplemental, ancillary or collateral thereto, in each case as
the same may from time to time be amended, varied, modified or
supplemented
"FIRST QUARTERLY PERIOD" means the period of three calendar months ending
on 31st December in each Financial Year
"FRENCH FRANCS" means the lawful currency at any relevant time of The
Republic of France
"GROUP" means the Parent and all its Subsidiaries from time to time
(including, without limitation, the Guarantors) and "member of the Group"
or "Group Company" means any and each of them
"GUARANTEE" means the guarantee in Acceptable Form of even date herewith
of the obligations of the Borrowers given by the Guarantors to the Agent
and the Banks and includes, for the avoidance of doubt, any deeds of
admission executed pursuant thereto
8
"GUARANTORS" means the Parent and the Material Subsidiaries from time to
time parties to the Guarantee and "Guarantor" means any one of them and
includes any company which becomes a Guarantor pursuant to clause 10.2(d)
"HEDGING AGREEMENTS" means any interest rate or currency agreement or
other hedging transaction (including, without limitation, a "swap",
"collar", "cap", or "floor") entered into from time to time between the
Parent and Lloyds Bank Plc
"INDEBTEDNESS" means any obligation for the payment or repayment of money,
whether as principal or surety and whether present or future, actual or
contingent
"INFORMATION MEMORANDUM" means the document concerning the Parent which,
at the Parent's request and on its behalf, was or is to be prepared in
relation to the Facilities and distributed by the Arranger to selected
banks
"INTEREST PAYMENT DATE" means, in relation to an Advance or Tranches under
the Term Loan Facility, the last day of any Interest Period applicable
thereto (and, if applicable, each day falling on the expiry of each
period of six months during such an Interest Period)
"INTEREST PERIOD" means, in relation to the Term Loan Facility, a period
for the calculation of interest on an Advance under the Term Loan Facility
or (where an Advance is sub-divided into Tranches) on such a Tranche, to
be ascertained in accordance with clause 2.4 and in relation to any
overdue amount, each period determined in accordance with clause 2.8
"LATEST ACCOUNTS" means the audited financial statements of the Parent and
its Subsidiaries (including the notes thereto) most recently submitted to
the Agent pursuant to this agreement or, prior to the submission of any
such accounts, the Base Accounts
"LIBOR" means in relation to any Advance or Tranche or unpaid sum the rate
per annum determined by the Agent to be equal to the arithmetic mean
(rounded upwards, if not already such a multiple, to the nearest whole
multiple of one-sixteenth of one per cent) of the rates (as notified to
the Agent) at which each of the Reference Banks was offering to prime
banks in the London Interbank Market deposits in the currency in which
such Advance or Tranche or unpaid sum is to be denominated and for the
specified period at or about 11.00 am on the Quotation Date for such
period and, for the purposes of this definition, "specified period" means
the Interest Period of the relevant Advance or Tranche (in the case of the
Term Loan Facility) or the relevant Term (in the case of the Revolving
Advances Facility) or, as the case may be, the period in respect of which
LIBOR falls to be determined in relation to such unpaid sum
"MAJORITY BANKS" means a Bank or Banks whose Outstandings amount in
aggregate to at least sixty-six and two thirds per cent (66 2\3 %)
of the total Outstandings of all the Banks or, if there are no
Outstandings, a Bank or group of Banks whose Commitments amount (or, if
each Bank's Commitment has been reduced to zero, immediately before such
reduction to zero amounted) in aggregate to at least sixty-six and two
thirds per cent (66 2/3 %) of the total Commitments of all the
Banks; and for this purpany Advance or Tranche that
9
is outstanding otherwise than in US Dollars shall be deemed to be
outstanding in US Dollars in its Original Dollar Amount
"MARGIN" means, subject to the terms of clause 2.5 (Variation of Margin)
0.85% per annum
"MARGIN RATIO" has the meaning given to it in clause 2.5
"MARGIN REGULATIONS" means Regulations G, T, U and X of the Board of
Governors of the United States Federal Reserve System, as in effect from
time to time and any successor regulations
"MARGIN STOCK" shall have the meaning provided in Regulation U of the
Board of Governors of the United States Federal Reserve System
"MATERIAL ADVERSE EFFECT" means any effect which would be reasonably
likely to:
(a) be materially adverse to the ability of either Borrower or the other
Obligors (taken as a whole) to perform their respective obligations
under any of the Finance Documents to which they are a party; or
(b) (for the purposes only of clause 9.1(e)(ii) and clause 9.1(l)) be
materially adverse to the business, assets or financial condition of
either Borrower or of the Group taken as a whole
"MATERIAL SUBSIDIARY" means the companies whose names, registered numbers
and registered offices are set out in Schedule 6 hereto, any Subsidiary
which becomes a Guarantor pursuant to clause 10.2(d) and any Subsidiary
save for Multisoft Financial Systems Limited of which (itself or together
with its own Subsidiaries) by reference to the accounts most recently
delivered pursuant to clause 10.1(c) accounts for at least five per cent
of turnover, gross assets or Consolidated Profit before Interest and Tax
of the Group for the period or as at the last day of the period in respect
of which such accounts have been prepared
"MERGER" means the merger of the Purchaser with and into the Target
"MERGER AGREEMENT" means the agreement and plan of merger by and among the
Purchaser, the Parent and Target to be dated as of 27th January 1998
"MERGER AGREEMENT CLOSING DATE" means the earlier of (i) the date on which
the Merger is consummated or (ii) 31st July 1998
"NON-OBLIGOR" means a member of the Group which is not an Obligor
"OBLIGORS" means the Borrowers and the Guarantors and "OBLIGOR" means any
one of them
"OFFER TO PURCHASE" means the document(s) to be despatched to the
shareholders of the Target in respect of the Tender Offer
10
"OPTION AGREEMENT" has the meaning given to it in the Merger Agreement
"OPTIONAL CURRENCY" means Deutschemarks, French Francs, Sterling or any
other immediately available freely transferable and convertible currency
which is available to the Banks in sufficient amounts to fund the relevant
Advance or Tranche
"ORIGINAL DOLLAR AMOUNT" means:
(a) in relation to an Advance or Tranche denominated in US Dollars, the
actual principal amount of such Advance or Tranche; and
(b) in relation to an Advance or Tranche denominated in an Optional
Currency, the Dollar Equivalent of the principal amount of such
Advance as of the Conversion Date (in the case of any Tranche or any
Advance which is or is to be outstanding under the Term Loan
Facility) or the date on which the same was drawn or made originally
or is to be drawn or made originally (including prior to any
previous conversions) in any other case
"OUTSTANDINGS" means, in relation to a Bank at any time, the aggregate of
the Original Dollar Amount of its share of all outstanding Advances (and
Tranches comprised therein)
"PERMITTED ENCUMBRANCE" means:
(i) any lien arising automatically and solely by operation of law in the
ordinary course of business
(ii) any Encumbrance arising in the ordinary course of day to day trading
by way of retention of title to goods in favour of the supplier of
goods where such goods are supplied in such ordinary course subject
to the retention of title
(iii) any right of any bank or financial institution of set-off or
combination of accounts arising in favour of such bank or financial
institution by operation of law or pursuant to any of its written
standard terms of business as a result of day to day operation of
banking arrangements or as a result of any back to back deposit or
currency hedging operations carried out in the ordinary course of
business
(iv) any Encumbrance set out in Schedule 7 or expressly disclosed in
writing to the Agent prior to the date hereof and further provided
that the principal amount of any actual or contingent Indebtedness
from time to time secured by such Encumbrance shall not be increased
at any time thereafter
(v) any Encumbrance created with the prior written consent of the Agent
(acting on the instructions of the Majority ▇▇▇▇▇);
11
(vi) any Encumbrance over goods or documents evidencing title to goods
arising in the ordinary course of a documentary credit transaction
carried out in the ordinary course of business;
(vii) any Encumbrance on assets acquired after the date of this Agreement,
or on assets of a body corporate which becomes a Subsidiary by
acquisition after the date of this agreement, provided that:
(a) any such Encumbrance is in existence prior to such acquisition
and is not created in contemplation of such acquisition; and
(b) the amount secured by such Encumbrance does not exceed, at any
time, the maximum amount secured or agreed to be secured by it
(in accordance with the original terms on which such
Encumbrance was created and further provided that the principal
amount of any actual or contingent indebtedness from time to
time secured by such Encumbrance shall not be increased at any
time thereafter) as at the date of acquisition; and
(c) such Encumbrance is discharged within a period of 6 months
after the acquisition or (only in the case of an acquisition of
a body corporate) where the terms of such Encumbrance do not
permit repayment of the amount secured by such Encumbrance
within such period, on the earliest date or dates permitted by
the terms of such Encumbrance for such repayment; and
(d) no guarantee is given by the Parent or any other member of the
Group in respect of such Encumbrance or the amount secured by
it;
(viii) encumbrances covering assets the subject of equipment and finance
leases, hire purchase or conditional sale or similar arrangements
entered into by a Group Company, provided that:
(a) such Encumbrances in existence prior to the date of this
agreement shall be included within the definition of "PERMITTED
ENCUMBRANCE" only to the extent that the Agent has prior to the
date of this agreement confirmed to the Parent that it has
received adequate written details as to the general nature and
extent of the same (such confirmation not to be unreasonably
withheld or delayed); or
(b) the amount secured by any such Encumbrances created after the
date of this agreement covering assets other than computers or
office telecommunications equipment required for the business
of the Group does not at any time exceed (Pounds)2,500,000;
(ix) any Encumbrance arising in respect of any escrow arrangements
relating to the payment of deferred consideration (not exceeding
(Pounds)1,000,000 or its equivalent) on a disposal or acquisition by
a Group Company; and
12
(x) any other Encumbrance created in respect of Borrowings in an
aggregate principal amount not exceeding (Pounds)1,000,000 or its
equivalent
"PLAN" means an "Employee Benefit Plan" (as defined in section 3(2) of
ERISA) that is or, within the preceding 5 years has been established or
maintained, or to which contributions are or, within the preceding 5
years, have been made or required to be made, by the Target or any ERISA
Affiliate or with respect to which the Target or any ERISA Affiliate may
have any liability
"POTENTIAL EVENT OF DEFAULT" means any event or circumstance which with
the giving of notice, lapse of time, determination of materiality or
fulfilment of other conditions (or a combination of them) (in each case as
is specified in clause 11.1) would give rise to an occurrence of an Event
of Default
"QUALIFYING BANK":
(a) means a Bank which is a bank as defined for the purpose of Section
349 of the Taxes Act and which is within the charge to United
Kingdom corporation tax as respects interest payable to such Bank
under this agreement at the time when such interest is paid
(b) means a Bank which is resident in a country with which the United
Kingdom has a double taxation treaty pursuant to which a resident of
such country is exempt from liability to United Kingdom tax on
interest payable to it derived from a source within the United
Kingdom, which has the benefit of such exemption for itself in
relation to the Facilities, which takes interest payable under this
agreement into account for the purposes of taxation in that country
(notwithstanding the location of its Facility Office if in a
different country) and which does not carry on business in the
United Kingdom through a permanent establishment with which the
Indebtedness under this agreement in respect of which the interest
is paid is effectively connected
"QUARTERLY PERIOD" means the period of three calendar months following the
end of each of the Parent's financial years and every subsequent period of
three calendar months following the end of the preceding three calendar
month period
"QUOTATION DATE" means, in relation to any period for which an interest
rate is to be determined hereunder, the day on which quotations would
ordinarily be given by prime banks in the London Interbank Market for
deposits in the currency in relation to which such rate is to be
determined for delivery on the first day of that period Provided that, if,
for any such period, quotations would ordinarily be given on more than one
date, the Quotation Date for that period shall be the last of those dates
"REFERENCE BANKS" means the principal London office of Lloyds Bank Plc and
such other bank or banks as may for the time being be appointed with the
prior written consent of the Parent by the Agent (acting on the
instructions of the Majority Banks) to act as "Reference Banks" for the
purposes of this agreement
13
"RELEVANT GROUP MEMBERS" means the Obligors and the Purchaser and
"RELEVANT GROUP MEMBER" means any of them
"RELEVANT INSTRUCTING GROUP" shall have the meaning ascribed to it in
clause 17.16(d)
"REPEATED REPRESENTATIONS" means all of those representations set out in
clause 9.1 (except for those set out in clause 9.1(e)(ii), clause
9.1(k)(i) and (ii) and clause 9.1(l))
"REPAYMENT DATE" means:
(a) in relation to an Advance under the Term Loan Facility, a date on
which one of the 10 semi-annual instalments are to be paid in
accordance with the terms of clause 2.6(b); or
(b) in relation to an Advance under the Revolving Advances Facility, the
last day of the Term of such Advance
"REQUESTED AMOUNT" means, in relation to a Utilisation Request, the
aggregate of the amounts of the Original Dollar Amount of the Advances or
Tranches (as the case may be) therein requested
"REVOLVING ADVANCES FACILITY" means the multi-currency advances facility
granted by the Banks hereunder under clause 2.1(a)(ii)
"REVOLVING COMMITMENT" means, with respect to a Bank, (and subject to this
agreement) the amount thereof set opposite its name in Schedule 1 under
the heading "Revolving Commitment" or (as the case may be) specified as
the portion thereof transferred in the Transfer Certificate pursuant to
which such Bank became a party hereto, in each case to the extent not
cancelled or reduced pursuant to the provisions hereof
"REVOLVING OUTSTANDINGS" means, at any time, the aggregate of the
Outstandings attributable to the Revolving Advances Facility;
"ROUND AMOUNT" means:
(a) in the context of the Term Loan Facility:
(i) in relation to a Utilisation in US Dollars, a minimum amount
of $10,000,000 and, if more, being also an integral multiple
of $1,000,000; and
(ii) in relation to a Utilisation in an Optional Currency, a
minimum amount of the equivalent in such Optional Currency of
$10,000,000 and, if more being also an integral multiple of
the equivalent in such Optional Currency of $1,000,000; and
(b) in the context of the Revolving Advances Facility:
14
(i) in relation to a Utilisation in US Dollars, a minimum amount of
$2,000,000 and, if more, being also an integral multiple of
$1,000,000; and
(ii) in relation to a Utilisation in an Optional Currency, a minimum
amount of the equivalent in such Optional Currency of
$2,000,000 and, if more being also an integral multiple of the
equivalent in such Optional Currency of $1,000,000;
Provided always that the Agent shall have the discretion exercisable for
any relevant purpose required by this agreement to round up or down
amounts denominated in any relevant currency to the nearest sub-unit or
unit or cent (as the case may be)
"SCHEDULE 14D-1" means the Schedule 14D-1 Tender Offer Statement to be
filed by the Purchaser with the United States Securities and Exchange
Commission in connection with the Tender Offer
"SECURITY DOCUMENT" means the Guarantee and any guarantee entered into
pursuant to clause 10.2(d) and any other guarantee or security document
from time to time and for the time being entered into or created by any
Group Company in favour of the Agent as trustee for or agent of the Banks
in relation to the obligations of the Borrowers hereunder
"SHAREHOLDERS' AGREEMENTS" has the meaning given to it in the Merger
Agreement
"STERLING" and the sign "(Pounds)" means the lawful currency at any
relevant time of the United Kingdom
"SUBSIDIARIES" means:
(a) (except for the purpose of clause 10.2(d)) the companies which are
for the time being or from time to time subsidiary undertakings of
the Parent; and
(b) for the purposes of clause 10.2(d), any companies which are for the
time being or from time to time subsidiaries as defined in section
736 of the Companies Act 1985
and "SUBSIDIARY" means any one of such Subsidiaries
"SYNDICATION CONFIRMATION LETTER" means the letter of even date herewith
addressed by the Agent to the Parent
"TARGET" means State of the Art, Inc.
"TAXES" means all present and future income and other taxes levies imposts
deductions charges fees compulsory loans or withholdings of whatsoever
nature
15
together with interest ▇▇▇▇▇▇▇ and penalties in respect thereof if any and
"Taxation" and "Tax" shall be construed accordingly
"TAXES ACT" means the Income and Corporation Taxes Act 1988
"TENDER OFFER" means the offer for Target made, or to be made, by the
Purchaser (or on its behalf) or as such offer made from time to time be
amended, revised or renewed pursuant to the Merger Agreement and the Offer
to Purchase
"TENDER OFFER CLOSING DATE" means the date on which the Purchaser notifies
the transmittal agent specified in the Offer to Purchase that the Tender
Offer has closed
"TERM" means:
(a) in relation to an Advance under the Revolving Advances Facility, the
period for which such Advance is to be borrowed, as specified in the
Utilisation Request relating thereto; and
(b) in relation to an Advance under the Term Loan Facility, the period
commencing on the relevant Utilisation Date and ending on the Final
Repayment Date
"TERM LOAN COMMITMENT" means, with respect to a Bank (and subject to this
agreement) the amount thereof set opposite its name in Schedule 1 under
the heading "Term Loan Commitment" or (as the case may be) specified as
the portion thereof transferred in the Transfer Certificate pursuant to
which such Bank became a party hereto, in each case to the extent not
cancelled or reduced pursuant to the provisions hereof
"TERM LOAN FACILITY" means the multi-currency term loan facility granted
by the Banks hereunder under clause 2.1(a)(i)
"TERM LOAN OUTSTANDINGS" means, at any time, the aggregate of the
Outstandings attributable to the Term Loan Facility
"TERMINATION DATE" means the earlier of
(a) the Final Repayment Date;
(b) the date on which the Commitments are reduced to zero pursuant to
this agreement; and
(c) the date on which demand shall be made pursuant to and in accordance
with the terms of clause 11.1
"THIRD QUARTERLY PERIOD" means the period of three calendar months ending
on 30th June in each Financial Year
"TOTAL COMMITMENTS" means, in relation to the Banks, the aggregate for the
time being of their respective Commitments (being, for the avoidance of
doubt,
16
the aggregate of their respective Revolving Commitments and their
Term Loan Commitments)
"TOTAL REVOLVING COMMITMENTS" means, in relation to the Banks, the
aggregate for the time being of their respective Revolving Commitments
"TOTAL TERM LOAN COMMITMENTS" means, in relation to the Banks, the
aggregate for the time being of their respective Term Loan Commitments
"TRANCHE" means each part or parts of an Advance into which the same is
divided in accordance with clause 2.2 or 2.3 and any amount into which the
same may be subdivided, consolidated or converted in accordance with
clause 2.3 and the principal amount of each of them for the time being
outstanding
"TRANCHE UTILISATION" means the division, sub-division, consolidation or
conversion of an Advance or Tranche pursuant to clause 2.3
"TRANCHE UTILISATION REQUEST" means a request by one of the Borrowers for
a Tranche Utilisation
"TRANSACTION DOCUMENTS" means this agreement, the Offer to Purchase, the
Guarantee, the Merger Agreement, the Option Agreement, the Shareholders'
Agreements and any agreement supplemental, ancillary or collateral
thereto, in each case as the same may from time to time be amended,
varied, modified or supplemented
"TRANSFER CERTIFICATE" means an instrument entered into pursuant to clause
16.4, in the form or substantially in the form set out in schedule 3,
whereby:
(a) a Bank transfers, or seeks to procure the transfer of, inter alia,
all or part of such Bank's rights and benefits and obligations
hereunder; and
(b) a Transferee undertakes to perform the obligations it will assume as
a result of delivery of such instrument
"TRANSFER DATE" in relation to any Transfer Certificate means the date for
the making of the transfer as specified in such Transfer Certificate
"TRANSFEREE" means a Qualifying Bank to which a Bank is entitled to
transfer and assign and transfers or seeks to assign or transfer all or
part of such Bank's rights and/or obligations hereunder
"TRANSFEROR" means a Bank which assigns or transfers or seeks to assign or
transfer all or part of its rights and/or obligations hereunder
"UTILISATION" means a Drawdown Utilisation or a Tranche Utilisation
"UTILISATION DATE" means the date on which the relevant Utilisation is to
be made
17
"UTILISATION REQUEST" means a request for a Utilisation by means of a
Drawdown Utilisation Request or ( as the case may be) a Tranche
Utilisation Request
"US DOLLARS" and the sign "$" means the lawful currency of the United
States of America
"VAT" means value added tax or any similar tax substituted therefor
"VENDOR PLACING AGREEMENT" means the agreement between the Parent and ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co Limited (2) in connection with the Acquisition.
1.2 INTERPRETATION
In this agreement and in the schedules (unless the context otherwise
requires):
(a) references to persons include firms, corporations, societies and/or
associations (whether incorporated or not) states and administrative
and governmental entities, whether or not any of the foregoing is a
separate legal entity;
(b) references to the masculine gender include the feminine and neuter
genders and vice versa and references to the singular number include
the plural and vice versa;
(c) references to this agreement include its schedules and references to
schedules, clauses, sub-clauses, paragraphs and sub-paragraphs are
to the schedules to and the clauses, sub-clauses, paragraphs and
sub-paragraphs of this agreement;
(d) the index to and the headings of the clauses are inserted for ease
of reference only and shall be ignored in construing this agreement;
(e) the expressions "subsidiary", "subsidiary undertaking" and "holding
company" shall bear the meanings respectively ascribed to those
terms in Sections 258 and 736 Companies Act, 1985 (as amended by the
Companies Act 1989);
(f) references to any statute, law, decree or regulation herein shall be
deemed to be references to such statute, law, decree or regulation
as re-enacted, amended or extended from time to time;
(g) references herein to any document (including this agreement) shall
be deemed to include references to such document as varied
supplemented or replaced from time to time;
(h) references to time are to London time;
(i) the "equivalent" (save as otherwise referred to herein) on any given
date in one currency (the "first currency") of an amount denominated
in another currency (the "second currency") is a reference to the
amount of
18
the first currency which could be purchased with the amount of the
second currency at the spot rate of exchange quoted by the Agent at
or about 11.00 am on such date for the purchase of the first
currency with the second currency.
2. THE FACILITIES
2.1 AMOUNT AND PURPOSE
(a) Subject to the terms and conditions of this Agreement, the Banks
have agreed to make available:
(i) to the Borrowers a multi-currency term loan facility of
up to $218,000,000; and
(ii) to the Parent a revolving multi-currency facility in an
aggregate amount at any one time of up to $15,000,000 by
way of short term advances
denominated in US Dollars and Optional Currencies.
(b) The Term Loan Facility shall be used by the Borrowers solely for the
following purposes:
(i) as to $49,000,000 thereof by the Purchaser to fund part
of the consideration payable by it under the Offer to
Purchase, the Option Agreement, the Shareholders'
Agreements and the Merger Agreement in respect of the
acquisition of Target;
(ii) by the Parent:
(A) to on-lend or invest to or in the Purchaser
to fund the consideration payable by the
Purchaser under the Offer to Purchase, the
Option Agreement, the Shareholders'
Agreements and the Merger Agreement in
respect of the acquisition of Target and
costs and expenses in connection with the
Acquisition;
(B) to repay in full all indebtedness of the
Parent under the facilities agreement dated
25th February 1997 and made between the
Parent (1) Lloyds Bank Plc and Banque
Nationale de Paris (2) Lloyds Bank Plc (as
Arranger) (3) and Lloyds Bank Plc (as Agent)
(4).
(c) The Revolving Advances Facility shall be used by the Parent for
general working capital purposes and, to any extent necessary, for
the funding of the Acquisition.
(d) No part of the Facilities may be used for any purpose which would
cause the execution of any of the Transaction Documents by any Group
Company or the performance by any Group Company of its obligations
19
thereunder to constitute, or would otherwise result in the provision
of, unlawful financial assistance for the purposes of Part V,
Chapter VI of the Companies Act 1985 (or its equivalent in any other
relevant jurisdiction) or any other applicable legislation or for
any other unlawful purpose. Without prejudice to the obligations of
the Borrowers under this clause, none of the Agent, the Arranger or
any of the Banks shall be obliged to concern themselves with the
application of amounts drawn by the Borrowers hereunder.
(e) The obligations of each Borrower hereunder are several.
2.2 UTILISATION PROCEDURES - DRAWDOWN OF THE ADVANCES
(a) Subject to the provisions of this agreement, a Borrower may request
a Drawdown Utilisation by delivering a Drawdown Utilisation Request
to the Agent, not later than 10.30 am one Business Day before the
proposed Utilisation Date (in the case of a Drawdown Utilisation in
Sterling) and 10.30 am three Business Days before the proposed
Drawdown Utilisation (in the case of a Drawdown Utilisation in US
Dollars or an Optional Currency other than Sterling). The Drawdown
Utilisation Request shall be in the form set out in Part I of
Schedule 4 (in the case of the Term Loan Facility) and in the form
set out in Part II of Schedule 4 (in the case of the Revolving
Advances Facility).
(b) Unless otherwise agreed with the Agent, only one Drawdown
Utilisation Request under each of the Facilities may be made on any
one day and subject to clause 2.7 (Currency Option) no more than two
Drawdown Utilisations may be made under the Term Loan Facility
during the term of this agreement. However, each Advance under the
Term Loan Facility may comprise more than one and up to three
Tranches.
(c) Each Drawdown Utilisation Request made pursuant to clause 2.2(a)
shall be irrevocable and binding upon the relevant Borrower and
shall specify (inter alia):
(i) that the Drawdown Utilisation Request is for an Advance
or Advances under the Term Loan Facility or the
Revolving Advances Facility (as the case may be) and in
the case of a Drawdown Utilisation Request relating to
an Advance under the Term Loan Facility specifies (if
relevant) the number of Tranches into which such Advance
is to be split;
(ii) the proposed Utilisation Date, which shall be a Business
Day during the relevant Availability Period;
(iii) the Requested Amount of the proposed Drawdown
Utilisation (which must be a Round Amount not exceeding
the Available Term Loan Facility Amount or the Available
Revolving Facility Amount (as the case may be));
20
(iv) the currency of each Advance or (where relevant) each
Tranche comprised in an Advance requested under the
proposed Drawdown Utilisation (being either US Dollars
or an Optional Currency);
(v) (in the case of a Drawdown Utilisation under the Term
Loan Facility) the first Interest Period that is to
apply with respect to each Advance (or Tranche comprised
therein) under such Drawdown Utilisation, to be selected
in accordance with clause 2.4;
(vi) (in the case of a Drawdown Utilisation under the
Revolving Advances Facility) the Term of the proposed
Drawdown Utilisation, being a period of one, two, three
or six months (or such other period as may exceptionally
be agreed by all of the Banks), which will begin on the
proposed Utilisation Date and end on a Business Day
which is or precedes the Final Repayment Date; and
(vii) an account of the relevant Borrower to which the
proceeds of the proposed Drawdown Utilisation are to be
paid.
(d) Whenever the Banks are required to participate in a Drawdown
Utilisation under this clause 2.2, the aggregate amount of the
Advances or Tranches to be made under such Drawdown Utilisation
shall be allocated to and apportioned amongst the Banks by the Agent
rateably according to their respective Term Loan Commitments or
Revolving Commitments (as the case may be).
(e) The Agent shall, promptly after receipt by it of a Drawdown
Utilisation Request, notify each Bank of the details of such
Drawdown Utilisation Request and of the amount of that Bank's share
of the Advances or Tranches to be made to the relevant Borrower.
(f) If a Bank's Commitment is reduced, in accordance with the terms of
this agreement, after the Agent has received a Drawdown Utilisation
Request or made an allocation hereunder, then such part of the
proposed Drawdown Utilisation as is attributable to that Bank and
exceeds its Available Commitment (as so reduced) in respect of the
relevant Facility shall not be made and the amount of such Drawdown
Utilisation shall be reduced accordingly. Notwithstanding any other
provision of this agreement, no Bank shall be required to
participate in any Advance or Tranche which exceeds that Bank's
Available Commitment in respect of the relevant Facility.
(g) If any Advance or Tranche comprised in an Advance to be made by a
Bank pursuant to clause 2.2 or 2.3 is to be denominated in an
Optional Currency, each Bank shall determine whether or not in its
opinion:
(i) it is or will be impossible for it to obtain at 11.00 am
on the Quotation Date for such proposed Advance or
Tranche
21
deposits of the Optional Currency in amounts comparable
with the amount of such proposed Advance or Tranche for
a period corresponding to the Interest Period of an
Advance or Tranche (under the Term Loan Facility) or the
Term of an Advance (under the Revolving Advances
Facility); or
(ii) any law binding on it, or any request or requirement of
any applicable central bank or other governmental agency
or regulatory authority compliance with which is
customary, would be contravened if it were to
participate in such Advance or Tranche in the Optional
Currency.
(h) If any Bank determines that it is or will be impossible for it to
obtain deposits as provided for by clause 2.2(g)(i) or that any law
or request or requirement compliance with which is customary would
be contravened as provided for by clause 2.2(g)(ii), such Bank shall
give notice of such determination to the Agent prior to 5.00pm on
the Business Day immediately preceding the proposed Quotation Date
for such Advance or Tranche. Forthwith upon receipt of such notice,
the Agent shall notify the relevant Borrower which may either cancel
the Drawdown Utilisation or (as the case may be) Tranche Utilisation
in so far as it affects the Bank in question, or request that the
participation in the Advance or Tranche to be made by such Bank be
made by such Bank in US Dollars or, where US Dollars is the affected
currency, in Sterling, in either case prior to 9.00 am on the second
Business Day before the proposed Utilisation Date and the Agent
shall promptly notify the Bank in question accordingly.
(i) If a Borrower requests that participation in an Advance or Tranche
be made by a Bank in US Dollars or Sterling pursuant to clause
2.2(h) then, subject to the terms of clause 2, the Advance or
Tranche to be made by such Bank shall be made in US Dollars or (as
the case may be) in Sterling in an amount equal to the Original
Dollar Amount thereof.
(j) If any Advance or Tranche to be made by a Bank pursuant to clause
2.2 is to be denominated in an Optional Currency, then, subject to
the terms of clause 2, the Advance or Tranche to be made by such
Bank shall be made in such Optional Currency in the amount requested
or such lesser amount as is required to ensure that the Original
Dollar Amount of that Advance and all other Outstandings under the
relevant Facility does not exceed the aggregate Commitments under
that Facility.
(k) If it has not already been cancelled or otherwise reduced to zero
prior to such time, the Commitment of each Bank shall be reduced to
zero at close of business in London on the Termination Date.
2.3 UTILISATION PROCEDURES - TRANCHES UNDER TERM LOAN FACILITY (OTHER THAN ON
FIRST DRAWDOWN OF ADVANCES UNDER SUCH FACILITY)
(a) Subject to the provisions of this agreement, a Borrower may request
a Tranche Utilisation by delivering a Tranche Utilisation Request to
the
22
Agent not later than 10.30am one Business Day before the proposed
Utilisation Date (in the case of a Tranche Utilisation in Sterling)
and 10.30am three Business Days before the proposed Utilisation Date
(in the case of a Tranche Utilisation in US Dollars or an Optional
Currency other than Sterling). The Tranche Utilisation Request shall
be in the form set out in Part III of Schedule 4.
(b) A Tranche Utilisation may comprise one or more of the following:
(i) the sub-division of an Advance or existing Tranche into two or
more Tranches;
(ii) the consolidation into one Tranche or Advance of two or more
existing Tranches and/or Advances ;
(iii) the conversion of an existing Tranche or Advance , if
denominated in US Dollars, into an Optional Currency or if
denominated in an Optional Currency into another Optional
Currency or US Dollars,
Provided that:
(A) at no time shall there be more than 6 Tranches outstanding;
(B) unless otherwise agreed by the Majority Banks, the amount of
each Tranche shall at all times be in a minimum amount of
$5,000,000, or if more, an integral multiple of $1,000,000 or,
if denominated in an Optional Currency, such other comparable
and convenient amounts as may be agreed by the Agent from time
to time;
(C) Tranches in the same currency and with Interest Periods of the
same duration and commencing on the same date shall be
consolidated automatically into one Tranche;
(D) in the case of a conversion in accordance with paragraph (iii)
above, it is carried out subject to and in accordance with
clause 2.7;
(E) (subject to clause 2.7(d)), at no time shall the aggregate of
Tranches outstanding in respect of any Advance exceed the
Original Dollar Amount of that Advance (or the Tranches
comprised therein);
(F) no Tranche made available to one Borrower shall be
consolidated with a Tranche made available to the other
Borrower.
(e) Whenever the Banks are required to participate in a Tranche
Utilisation, the amount of each Tranche to be advanced shall be
allocated to and
23
apportioned amongst the Banks by the Agent rateably according to
their respective Term Loan Commitments.
(f) The Agent shall, promptly after receipt by it of a Tranche
Utilisation Request, notify each Bank of the details of such Tranche
Utilisation Request and of the amount of that Bank's share of the
Tranches to be made to the relevant Borrower.
(g) If a Bank's Commitment is reduced, in accordance with the terms of
this agreement, after the Agent has received a Tranche Utilisation
Request or made an allocation hereunder, then such part of the
proposed Tranche Utilisation as is attributable to that Bank and
exceeds its Available Commitment (as so reduced) in respect of the
Term Loan Facility shall not be made and the amount of such Tranche
Utilisation shall be reduced accordingly. Notwithstanding any other
provision of this agreement, no Bank shall be required to
participate in any Tranche Utilisation which exceeds that Bank's
Available Commitment in respect of the Term Loan Facility or which,
when added to the Original Dollar Amounts of all other Tranches
outstanding in respect of the relevant Advance exceeds or would
exceed the Original Dollar Amount of such Advance.
2.4 INTEREST
(a) The following provisions of this clause 2.4(a) shall apply with
respect to interest on an Advance made under the Revolving Advances
Facility, that is to say:
(i) on the Repayment Date (and, if applicable, on the expiry of
each period of 6 months during the Term of such Advance)
relating to such Advance, the Borrower shall pay to the Agent
accrued interest on that Advance, for the account of the Banks
which made such Advance. Each Term shall, up to and including
the earlier of (1) the date falling ninety days after the
Merger Agreement Closing Date; and (2) the Close of
Syndication have a duration of one month. Thereafter, each
Term shall have such a duration as the relevant Borrower may
request pursuant to this agreement provided that the first
such successive Term may be of such a duration as is necessary
to ensure that it terminates on 30th September 1998;
(ii) the rate of interest applicable to such Advance for the Term
thereof shall be the rate per annum determined by the Agent to
be the sum of:
(A) LIBOR for such Advance;
(B) the Margin; and
(C) the Associated Costs Rate applicable thereto (in the
case of an Advance in Sterling).
24
(iii) if any Term would otherwise end on a day which is not a
Business Day, that Term shall be extended to the next
succeeding Business Day, unless the result of such extension
would be to carry such Term over to another calendar month in
which event such Term shall end on the last preceding Business
Day;
(iv) any Term which commences on the last day of a calendar month
and any Term which commences on a day for which there is no
numerically corresponding day in the calendar month during
which such Term is to end shall end on the last Business Day
of the calendar month during which such Term is due to end;
(v) any Term which would otherwise end during the month of or at
any time after the Final Repayment Date shall end on the Final
Repayment Date.
(b) The following provisions of this clause 2.4(b) shall apply with
respect to interest on an Advance or a Tranche made under the Term
Loan Facility, that is to say:
(i) the first such Interest Period shall commence on the
Utilisation Date of the relevant Advance or Tranche and such
Interest Period and each successive Interest Period (which
shall commence immediately upon the end of the preceding
Interest Period) in relation to such Advance or Tranche shall,
up to and including the earlier of (1) the date falling 90
days after the Merger Agreement Closing Date and (2) the Close
of Syndication have a duration of one month. Thereafter, each
successive Interest Period shall have such a duration as the
relevant Borrower may request pursuant to the terms of clause
2.4(b)(ii) below, provided that the first such successive
Interest Period may be of such a duration as is necessary to
ensure that it terminates on 30th September 1998;
(ii) the relevant Borrower may by notice received by the Agent not
later than 10.30 am one Business Day (in the case of an
Advance or a Tranche in Sterling) or three Business Days (in
the case of an Advance or a Tranche in US Dollars or an
Optional Currency other than Sterling) before the first day of
an Interest Period specify (subject to clause 2.4(b)(i) above)
whether that Interest Period shall have a duration of one,
two, three or six months (or such other period as may
exceptionally be agreed to by all of the Banks);
(iii) Interest Periods shall be of the duration specified by the
relevant Borrower pursuant to (ii) above, but so that:
25
(A) (in the case of an Advance which has been sub-divided
into Tranches) Tranches are designated and Interest
Periods are selected such that, on each Repayment Date
in respect of the Term Loan Facility, there mature
Tranches the principal amount of which, in the view of
the Agent, will be at least equal to the principal
amount to be repaid on such Repayment Date or the
equivalent in any Optional Currency (where relevant);
(B) no Interest Period for an Advance or a Tranche shall
overrun the Final Repayment Date;
(C) if the relevant Borrower otherwise fails to specify the
duration of an Interest Period in accordance with the
foregoing provisions, that Interest Period shall have a
duration of three months or other period complying with
the foregoing;
(D) if any Interest Period would otherwise end on a day
which is not a Business Day, that Interest Period shall
be extended to the next succeeding Business Day, unless
the result of such extension would be to carry such
Interest Period over to another calendar month in which
event such Interest Period shall end on the last
preceding Business Day; and
(E) any Interest Period which commences on the last day of a
calendar month and any Interest Period which commences
on a day for which there is no numerically corresponding
day in the calendar month during which such Interest
Period is to end shall end on the last Business Day of
the calendar month during which such Interest Period is
due to end;
(iv) on the last day of each Interest Period relating to an Advance
or Tranche (and, if applicable, on the expiry of each period
of 6 months during such an Interest Period), the relevant
Borrower shall pay to the Agent the accrued interest on that
Advance or Tranche, for the account of the Banks which made
such Advance or Tranche;
(v) the rate of interest applicable to such an Advance or Tranche
for an Interest Period shall be the rate per annum determined
by the Agent to be the sum of:
(A) LIBOR on the Quotation Date for the relevant Advance or
Tranche;
(B) the Margin; and
26
(C) (in the case of an Advance or Tranche denominated in
Sterling) the Associated Costs Rate applicable thereto.
(c) If on the Utilisation Date of any proposed Advance or Tranche to a
Borrower under the Term Loan Facility there is an existing Advance
or Tranche outstanding under that Facility from the same Borrower,
the relevant Borrower shall be entitled to elect, by serving notice
on the Agent not later than 10.30am one Business Day before the
proposed Utilisation Date (in the case of a Utilisation in Sterling)
and 10.30am three Business Days before the proposed Utilisation Date
(in the case of Utilisation in an US Dollars or an Optional Currency
other than Sterling) that the first Interest Period relating to the
proposed Advance or Tranche shall terminate on the same day as the
Interest Period relating to the outstanding Advance or Tranche and
that on the last day of those Interests Periods the Advances or
Tranches to which they relate shall be consolidated (and thereafter
be treated in all respects) as a single Advance or Tranche (as the
case may be).
(d) The Agent shall promptly notify the Borrowers and the Banks of each
rate of interest determined by it under this clause 2.4.
(e) All interest and other payments under this agreement which are to be
calculated by reference to a rate per annum shall accrue from day to
day and be calculated on the basis of the actual days elapsed and
(in the case of amounts denominated in Sterling) a 365 day year or
(in the case of amounts denominated in US Dollars or an Optional
Currency other than Sterling) a 360 or 365 day year, as is customary
in the London Interbank Market..
(f) Each determination of a rate of interest or of other amounts
hereunder by the Agent shall, in the absence of manifest error, be
conclusive and binding upon the parties to this agreement.
2.5 VARIATION OF MARGIN
For the purposes of this agreement, Margin means the rate per annum
determined by the Agent pursuant to this Clause 2.5. The Agent shall
determine the Margin promptly following receipt of the quarterly
management accounts of the Group (as referred to in clause 10.1(c)(iv)),
together with the Certificate of Compliance (as referred to in clause
10.1(c)(vii))which the Parent is obliged to deliver to the Agent pursuant
to clause 10.1(c). Based upon the aforegoing, the Margin shall be
determined by reference to the following ratios (the "MARGIN RATIO"):
MARGIN RATIO MARGIN
------------ ------
The ratio of Consolidated Total Borrowings
to Consolidated EBITDA is greater
than 3:1 0.85%
The ratio of Consolidated Total Borrowings
to Consolidated EBITDA is equal to or
27
less than 3:1 0.75%
The ratio of Consolidated Total Borrowings
to Consolidated EBITDA is equal to or
less than 2:1 0.65%
Provided that:
(i) the first determination of the Margin by the Agent shall only be
made following the expiry of six calendar months after the earlier
of (i) the date falling 90 days after the Merger Agreement Closing
Date and (ii) the Close of Syndication (the "INITIAL MARGIN
PERIOD");
(ii) until the first determination of the Margin by the Agent, the
Margin shall be 0.85%;
(iii) for the three calendar months following the expiry of the Initial
Margin Period, the Margin shall not reduce below 0.75%;
(iv) the Margin Ratio will be calculated by reference to the twelve
month period ending on the last day of each Quarterly Period or (as
the case may be) financial year of the Parent;
(v) any determination by the Agent of a reduction or increase in the
Margin shall take effect as from 5 Business Days after receipt by
the Agent of the Certificate of Compliance for the Quarterly Period
in which compliance or non-compliance (as the case may be) with the
Margin Ratio occurs;
(vi) there shall be no decrease in the Margin if an Event of Default has
occurred which is continuing and the Margin shall revert to 0.85%
until such time as such Event of Default is no longer continuing
whereupon the Margin shall be determined as set out above.
2.6 REPAYMENT AND PREPAYMENT
(a) Subject to this agreement, the Parent shall repay in full each
Advance under the Revolving Advances Facility on its Repayment Date
in accordance with the terms of this agreement.
(b) Subject to this agreement and to each Borrower only being
responsible for the repayment of the Advances drawn down by that
▇▇▇▇▇▇▇▇, the Borrowers shall repay the Term Loan Outstandings on
the following dates and in the following amounts (or their
equivalent in an Optional Currency where the Term Loan Outstandings
to be repaid are denominated in an Optional Currency):
28
Date Instalments
---- -----------
$
6 months after the date of this agreement 21,800,000
12 months after the date of this agreement 21,800,000
18 months after the date of this agreement 21,800,000
24 months after the date of this agreement 21,800,000
30 months after the date of this agreement 21,800,000
36 months after the date of this agreement 21,800,000
42 months after the date of this agreement 21,800,000
48 months after the date of this agreement 21,800,000
54 months after the date of this agreement 21,800,000
60 months after the date of this agreement 21,800,000
(c) If the aggregate of the monies advanced under the two Advances
permitted to be drawn under the Term Loan Facility amount to less
than 18,000,000 the repayment instalments specified in clause 2.6(b)
above shall be reduced rateably and pro rata.
(d) Any prepayment of the Term Loan Outstandings shall reduce each
outstanding repayment instalment under clause 2.6(b) on a pro rata
basis between the outstanding repayment instalments, provided that
the first $49,000,000 (or the equivalent thereof in any relevant
Optional Currency, where relevant) of any prepayments shall reduce
each outstanding repayment instalment in chronological order.
(e) By giving not less than 5 Business Days' prior written notice to the
Agent, the Borrowers may prepay the whole or any part of an Advance
or Tranche under the Term Loan Facility (but, if part, then in a
minimum amount of $1,000,000 or, if more, in integral multiples of
$500,000 or the approximate equivalent thereof (as determined by the
Agent) in the relevant Optional Currency (should the relevant
Advance or Tranche be denominated in an Optional Currency) on the
last day of any Interest Period for that Advance or Tranche without
penalty or premium or on any other date subject to the Parent
indemnifying the Agent and each Bank pursuant to clause 12.2 of this
agreement in respect of any loss, cost or expense sustained or
incurred as a consequence thereof. Any amount so prepaid may not
subsequently be redrawn. Upon such prepayment, (i) the amount which
the relevant Borrower may draw under the Term Loan Facility shall be
reduced permanently by a corresponding amount, (ii) the Total Term
Loan Commitments shall be reduced permanently by a corresponding
amount and (iii) the Term Loan Commitment of each of the Banks
therein will be correspondingly reduced pro rata in proportion to
their respective Term Loan Commitments. Each notice of prepayment
given pursuant to this clause shall be irrevocable and shall specify
the date upon which such prepayment is to take effect (which must be
a Business Day).
(f) By giving not less than 5 Business Days' prior written notice to the
Agent, the Borrower may prepay the whole or any part of an Advance
under the Revolving Advances Facility (but, if part, then in a
minimum
29
amount of $1,000,000 or, if more, integral multiples of $500,000 or
the approximate equivalent thereof (as determined by the Agent) in
the relevant Optional Currency (should the relevant Advance be
denominated in an Optional Currency) on any day during its Term
without penalty or premium subject to the Parent indemnifying the
Agent and each Bank pursuant to clause 12.2 of this agreement in
respect of any loss, cost or expense including, without limitation,
breakage costs or liability sustained or incurred as a consequence
thereof. Any amounts so prepaid may subsequently be redrawn up to
the amount of the Available Revolving Facility Amount. Each notice
of prepayment given pursuant to this clause shall be irrevocable and
shall specify the date upon which such prepayment is to take effect
(which must be a Business Day).
(g) The Borrowers may not repay or prepay all or any part of any Advance
or Tranche except at the times and in the manner provided for in
this agreement.
(h) The Borrowers shall not be entitled to reborrow, in whole or in
part, any amount repaid or prepaid under the Term Loan Facility
other than pursuant to the terms of clause 2.7 (Currency Option).
2.7 CURRENCY OPTION
(a) A Borrower may elect to take, convert in accordance with clause
2.7(c) or maintain any Advance or Tranche in or into an Optional
Currency and to convert the same back into US Dollars and, unless
the Agent has determined that the circumstances referred to in
clause 2.2(g) and in clause 7.2 are applicable, that Borrower shall,
subject to the provisions of this agreement, be so entitled.
(b) If the Agent makes a determination under clauses 2.2(g) or 7.2 in
relation to the unavailability of an Optional Currency, then the
relevant Advance or Tranche shall be drawn in, maintained in or, as
appropriate, converted into US Dollars on the first day of the
relevant Interest Period.
(c) If pursuant to this agreement any Advance or Tranche under the Term
Loan Facility is to be:
(i) converted from US Dollars into an Optional Currency;
(ii) converted from an Optional Currency into US Dollars; or
(iii) converted from one Optional Currency into another Optional
Currency,
then, the relevant Borrower shall on the last day of the relevant
Interest Period and subject to clause 2.7(d) repay the relevant
Advance or Tranche in the currency in which it is then denominated
and the Bank's obligations shall (after making any repayments or
prepayments due on that date and subject as provided in this
agreement) be as follows:
30
(A) if the Advance or Tranche was, immediately prior to such
repayment, denominated in US Dollars and is to be converted
into an Optional Currency, the Banks will advance on such date
the Equivalent Amount in the relevant Optional Currency of the
relevant Advance or Tranche;
(B) if the Advance or Tranche was immediately prior to such
repayment denominated in an Optional Currency and is to be
converted into US Dollars, the Banks will advance on such date
the Original Dollar Amount of the relevant Advance or Tranche;
and
(C) if the Advance or Tranche was immediately prior to such
repayment denominated in one Optional Currency and is to be
maintained in the same Optional Currency or converted from one
Optional Currency into another Optional Currency, the Banks
will advance on such date the Equivalent Amount in the
relevant Optional Currency of the Original Dollar Amount of
the relevant Advance or Tranche.
(d) The obligation of a Borrower in sub-paragraph (c) above to repay an
Advance or Tranche in an Optional Currency (and for the Banks to re-
advance any such Advance or Tranche) shall not apply where:
(i) pursuant to the provisions of sub-paragraph (c), the Advance
or Tranche would have fallen to be repaid and re-advanced in
the same Optional Currency; and
(ii) the Dollar Equivalent of the Advance or Tranche on the last
day of the current Interest Period does not differ from the
Original Dollar Amount of the Advance or Tranche by more than
5%.
2.8 DEFAULT INTEREST
If any sum (whether of principal, interest or otherwise) is not paid in
full when due, the relevant Borrower shall pay interest on the unpaid sum
from the due date until the date of actual payment both before and after
judgment at a rate being the aggregate of:
(a) 1% per annum;
(b) the Margin;
(c) LIBOR; and
(d) (if the currency in which such unpaid sum is denominated is
Sterling) the Associated Costs Rate attributable to the unpaid sum.
For this purpose:
31
(i) LIBOR shall be determined by the Agent by reference to such
consecutive periods (including overnight deposits) as the Agent may
in its absolute discretion from time to time select;
(ii) the Associated Costs Rate shall be computed on the day on which such
unpaid amount was due and such other days as the Bank referred to in
the definition of "Associated Costs Rate" may select in accordance
with the provisions of Schedule 2 (as the same may be amended from
time to time as provided for in such definition) (a certificate of
the relevant Bank in each case as to the amount of such cost being
conclusive in the absence of manifest error); and
(iii) interest under this clause 2.8 shall be calculated on a day to day
basis and (in the case of amounts denominated in Sterling) a year of
365 days or (in the case of amounts denominated in US Dollars or an
Optional Currency other than Sterling) a year of 360 or 365 day
year, as is customary in the London Interbank Market and compounded
on the last day of each such consecutive period referred to in
paragraph (i) above but shall nevertheless be payable on demand.
2.9 PAYMENTS
All payments to be made by a Borrower under or in respect of the
Facilities shall be made on the due date:
(i) where such amount is denominated in Sterling, by payment in Sterling
in immediately available cleared funds to the Agent's Account No
▇▇▇▇▇▇▇ with Lloyds Bank Plc, Treasury Division, ▇▇▇▇▇▇▇'s House, PO
Box ▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ (Chaps Sort Code 30-15-
57), Quoting Ref: Loans Admin re Sage or such other account as the
Agent may from time to time direct;
(ii) where such amount is denominated in US Dollars, by payment in US
Dollars in immediately available cleared funds to the Agent's
Account with The Bank of New York, NY Swift Code IRVT US 3N XXX
Account Lloyds Bank Plc Loans Administration Bristol No:
8900047003 Reference: Sage or such other account as the Agent may
from time to time direct;
(iii) where such amount is denominated in an Optional Currency (other than
Sterling), by payment in the relevant Optional Currency in
immediately available funds to such account, office or bank as the
Agent may from time to time designate.
All such payments shall be made in full without any set-off or
counterclaim whatsoever and, subject to clause 4.1, free and clear of any
deductions or withholdings.
32
2.10 REDUCTION, CANCELLATION AND TERMINATION
(a) The Term Loan Commitment shall be automatically reduced and
cancelled by an amount equal to any part of the Term Loan Facility
which remains undrawn at the close of business on the last day of
the Availability Period, which amount shall be applied against the
Term Loan Commitment of each Bank pro rata.
(b) The Revolving Commitment shall be automatically reduced and
cancelled by an amount equal to any part of the Revolving Advances
Facility which remains undrawn at the close of business on the last
day of the Availability Period, which amount shall be applied
against the Revolving Commitment of each Bank pro rata.
(c) Each Borrower (in the case of the Total Term Loan Commitments) or,
as the case may be, the Parent (in the case of the Total Revolving
Commitments) may at any time, and from time to time, cancel the
whole or any part of the Total Term Loan Commitments or, as the case
may be, the Total Revolving Commitments relevant to its portion of
the Facilities by giving to the Agent not less than 5 Business Days
prior written notice to that effect, specifying the date on which
such cancellation is to take effect and the amount or amounts of the
proposed cancellation or cancellations thereof Provided that:
(i) any partial cancellation shall be in a minimum aggregate
amount of $1,000,000 and (if more) integral multiples of
$500,000; and
(ii) no such cancellation shall be effective if, as a result
thereof, the Total Term Loan Commitments or the Total
Revolving Commitments (as the case may be) would be reduced
to an amount which would be less than, respectively, the Term
Loan Outstandings or the Revolving Outstandings at the time
the cancellation is to come into effect.
Any such cancellation shall be taken to reduce the relevant
Revolving Commitments or (as the case may be) Term Loan Commitments
of each of the Banks rateably by reference to the Total Revolving
Commitments or (as the case may be) Total Term Loan Commitments.
(d) Each notice of cancellation given pursuant to this clause 2.10 shall
be irrevocable and shall specify the date upon which such
cancellation is to take effect.
(e) If at any time:
(i) the Commitment of any Bank is cancelled or reduced in
aggregate to zero; and
(ii) all obligations (actual or contingent) and all Indebtedness
due or owing to such Bank by the Borrowers hereunder has been
satisfied in full, then such Bank (other than for the
purposes of
33
clause 15.11 and 15.12) shall cease to be a Bank hereunder
and shall cease to be a party to this agreement.
2.11 OBLIGATIONS AND RIGHTS OF THE BANKS, ARRANGER AND AGENT
(a) If the Agent notifies a Bank that it is to make an Advance or
Tranche in accordance with clause 2.2 then, on the relevant
Utilisation Date but subject to this agreement, such Bank shall make
available its participation in such Advance (or Tranche) through
its Facility Office in accordance with this agreement.
(b) The obligations and rights of the Banks, the Arranger and the Agent
hereunder are several. The failure by a Bank (not acting in its
capacity of Agent) to perform its obligations hereunder shall not
affect the obligations of any other Bank, the Arranger, the Agent,
the Parent or the Purchaser to perform any of their respective
obligations under this agreement towards any other party hereto, nor
shall the Arranger, the Agent or any Bank be responsible for the
obligations of any other of them under this agreement.
(c) Notwithstanding any other provision of this agreement, the interests
of the Banks, the Arranger and the Agent are several and the amounts
from time to time due to the Agent or the Arranger (for its own
account) and to each Bank shall be separate and independent debts.
The Agent, the Arranger and each Bank shall have the right to
protect and enforce their rights arising under this agreement
separately and it shall not be necessary for the Agent, the Arranger
or any Bank (as the case may be) to be joined as an additional party
in any proceedings to that end.
3. CONDITIONS PRECEDENT
3.1 CONDITIONS PRECEDENT TO THE FACILITIES
It is a condition precedent to the obligations of the Banks to make the
Facilities available that the Agent shall first have received the various
documents and evidence referred to in Part I of Schedule 5 in form and
substance satisfactory to it (acting reasonably) prior to the termination
of the Availability Period. Once all such conditions precedent have been
satisfied or fulfilled or waived by the Majority Banks, the Agent shall on
that day give notice in writing to the Parent and the Banks (other than
itself) to that effect, which day shall be the "EFFECTIVE DATE".
3.2 CONDITIONS PRECEDENT TO THE MAKING OF AN ADVANCE OR TRANCHE
Notwithstanding any other provision of this agreement, none of the Banks
shall be obliged to make its participation in an Advance or Tranche or any
part of either thereof and no Utilisation Request may be made by a
Borrower unless the following further conditions are satisfied at the same
time as the giving of a Utilisation Request hereunder:
34
(a) no Event of Default has occurred and is continuing or will result
from the proposed Utilisation; and
(b) no Potential Event of Default has occurred and is continuing or will
result from the proposed Utilisation; and
(c) the Repeated Representations are true and will be true on and as of
the relevant Utilisation Date with reference to the facts and
circumstances then subsisting; and
(d) in the case of a Utilisation Request made immediately prior to the
Tender Offer Closing Date, receipt by the Agent of the various
documents and evidence referred to in Part II of Schedule 5 in form
and substance satisfactory to it (acting reasonably); and
(e) in the case of a Utilisation Request made immediately prior to the
Merger Agreement Closing Date, receipt by the Agent of the various
documents and evidence referred to in Part III of Schedule 5 in form
and substance satisfactory to it (acting reasonably).
3.3 ROLLOVER
(a) Without prejudice to clause 11.1, the provisions of clause 3.2(b)
shall not apply to:
(i) any Advance under the Revolving Advances Facility (the "NEW
ADVANCE") which is to be made on the Repayment Date of
another Advance under the Revolving Advances Facility the
amount of which is equal to or greater than the New Advance;
and
(ii) any Tranche under the Term Loan Facility (the "NEW TRANCHE")
which is to be made on the repayment of another Tranche or
Tranches (in respect of the same Advance) the amount or (as
the case may be) the aggregate amount of which is equal to
the New Tranche.
3.4 CERTAIN FUNDS PERIOD
To assist the Group to have sufficient funds available to fulfil its
obligations in connection with the Acquisition, the Banks shall not on or
prior to the Merger Completion Date decline to permit any Facility to be
utilised hereunder as a consequence of:
(a) the occurrence of any Potential Event of Default or Event of Default
under Clause 11.1(b), (e)(ii), (m), (p), (r) or (to the extent
referable to a representation and warranty suspended by this Clause
3.4) (d);
(b) the occurrence of any Potential Event of Default under Clause
11.1(g) or (to the extent referable to Clause 10.2(h)) (c);
35
(c) any misrepresentation under Clause 9.1(h), (i), (j), (k)(i) or (l),
provided that this clause 3.4 shall not prevent the Agent or any of the
Banks exercising any of their respective rights and remedies under this
Agreement (including, without limitation, under clause 11.1) after the
earlier of (i) 1st August 1998 and (ii) the Merger Completion Date and
notwithstanding any such utilisation.
4. TAXES
4.1 GROSSING UP
All payments to be made by a Borrower to any person hereunder shall be
made free and clear of and without deduction for or on account of Tax
unless such Borrower is required to make such a payment subject to the
deduction or withholding of Tax, in which case the sum payable by such
Borrower in respect of which such deduction or withholding is required to
be made shall be increased to the extent necessary to ensure that, after
the making of such deduction or withholding, such person receives and
retains (free from any liability in respect of any such deduction or
withholding) a net sum equal to the sum which it would have received and
so retained had no such deduction or withholding been made or required to
be made.
4.2 BANK'S OBLIGATION TO LODGE RELEVANT DECLARATION
Neither Borrower is obliged to pay any additional amount pursuant to
clause 4.1 in respect of any deduction which would not have been required
if the relevant Bank had completed and properly lodged, as soon as
practically possible after becoming a Bank hereunder a declaration, claim,
exemption or other form which it is required to complete.
4.3 QUALIFYING BANK
If:
(a) at the date of this agreement any Bank is not a Qualifying Bank; or
(b) a Bank ceases to be a Qualifying Bank other than as a result of the
introduction of, suspension, withdrawal or cancellation of, or
change in, or change in the general understanding, interpretation,
administration or application of, any law or regulation or tax
treaty compliance with which is customary or any practice or
concession of the United Kingdom Inland Revenue or any other
relevant taxing or fiscal authority in any jurisdiction with which
the relevant Bank has a connection, occurring after the date of this
agreement; or
(c) on the date of any assignment, transfer or novation under clause 16
the Transferee is not a Qualifying Bank,
then no Borrower shall be liable to pay to that Bank under clause 4.1 any
amount in respect of taxes levied or imposed by the United Kingdom or any
taxing
36
authority of or in the United Kingdom in excess of the amount it would
have been obliged to pay if that Bank had been or remained a Qualifying
Bank.
4.4 U.S. TAXES
(a) The Purchaser shall not be required to pay any additional amount
pursuant to Clause 4.1 (Gross-up) in respect of United States
federal income taxes with respect to a sum payable by it pursuant to
this agreement to a Bank if such Bank:
(i) on the date it becomes a Party to this agreement either:
(1) is not a "United States Person" (as such term is defined
in Section 7701(a)(30) of the Internal Revenue Code of
1986, as amended (the "Code")) and is not entitled to
submit either (x) an Internal Revenue Service Form 1001
(or such successor Form as shall be adopted from time to
time by the United States taxation authorities) relating
to such Bank and claiming complete exemption from
withholding on all amounts (to which such withholding
would otherwise apply) to be received by such Bank,
including fees, pursuant to this agreement in connection
with any borrowing by the Purchaser as a result of a tax
treaty concluded with the United States or (y) an
Internal Revenue Service Form 4224 (or such successor
Form as shall be adopted from time to time by the United
States taxation authorities) relating to all amounts (to
which such withholding would otherwise apply) to be
received by such Bank, including fees, pursuant to this
agreement in connection with any borrowing by the
Purchaser; or
(2) is a United States Person; or
(ii) has (unless the Purchaser failed to give the notification
referred to in paragraph (c) below) failed to submit any
form, certificate or other information with respect to such
sum payable that it was required to file pursuant to
paragraph (b) below and is entitled to file under applicable
law.
(b) If a Bank is not a United States Person it shall (if and to the
extent that it is entitled to do so under applicable law) submit as
soon as reasonably practicable after the date such Bank becomes a
party to this agreement in duplicate to the Purchaser duly completed
and signed copies of either Form 1001 of the United States Internal
Revenue Service (or such successor Form as shall be adopted from
time to time by the United States taxation authorities) (relating to
such Bank and claiming complete exemption from withholding on all
amounts (to which such withholding would otherwise apply) to be
received by such Bank, including fees, pursuant to this agreement in
connection with any borrowing by the
37
Purchaser as a result of a tax treaty concluded with the United
States) or Form 4224 of the United States Internal Revenue Service
(or such successor Form as shall be adopted from time to time by the
United States taxation authorities) (relating to all amounts (to
which such withholding would otherwise apply) to be received by such
Bank, including fees, pursuant to this agreement in connection with
any borrowing by the Purchaser). Thereafter and from time to time,
such Bank shall (if and to the extent that it is entitled to do so
under applicable law) submit to the Purchaser such additional duly
completed and signed copies of one or the other such Forms (or such
successor Forms as shall be adopted from time to time by the
relevant United States taxation authorities) or any additional
information as may be required under then current United States law
or regulations to claim the inapplicability of or exemption from
United States withholding taxes on payments in respect of all
amounts (to which such withholding would otherwise apply) to be
received by such Bank, including fees, pursuant to this agreement in
connection with any borrowing by the Purchaser.
(c) To the extent that the Purchaser becomes aware of the need for any
Form or information referred to in the second sentence of paragraph
(b) above, it will notify the relevant Banks as soon as reasonably
practicable thereafter.
5. TAX RECEIPTS
5.1 NOTIFICATION
If, at any time, a Borrower is required by law to make any deduction or
withholding from any sum payable by it hereunder (or if thereafter there
is any change in the rates at which or the manner in which such deductions
or withholdings are calculated), that Borrower shall promptly notify the
Agent of the same.
5.2 DELIVERY OF TAX RECEIPTS
If a Borrower makes any payment hereunder in respect of which it is
required to make any deduction or withholding, it shall pay the full
amount required to be deducted or withheld to the relevant taxation or
other authority within the time allowed for such payment under applicable
law and shall deliver to the Agent for each Bank affected, within 30 days
after it has made such payment to the applicable authority, an original
receipt issued by such authority evidencing the payment to such authority
of all amounts so required to be deducted or withheld in respect of that
Bank's share of such payment.
5.3 BENEFIT OF TAX CREDITS ETC
In the event that an additional payment is made by a Borrower to or for
the benefit of any Bank under clause 4 and, such Bank in its sole opinion,
determines that it has received or been granted a credit against or relief
or remission for, or repayment of tax paid or payable by it in respect of
or calculated with reference to the deduction or withholding giving rise
to such additional payment or, in the case
38
of an additional payment under clause 4 with reference to the liability,
expense or loss to which the payment giving rise to the additional payment
relates, such Bank shall, to the extent that it can do so without
prejudice to the retention of the amount of such credit, relief, remission
or repayment, pay to that Borrower such amount as it shall in its sole
opinion have concluded to be attributable to such deduction or withholding
or, as the case may be, such liability, expense or loss. Any such payment
shall be conclusive evidence (save in the case of manifest error) of the
amount due to such Borrower hereunder and shall be accepted by such
Borrower in full and final settlement of its rights of reimbursement
hereunder in respect of such deduction or withholding. Nothing herein
contained shall interfere with the right of any person to arrange its tax
affairs in whatever manner it thinks fit and, in particular, no person
shall be under any obligation to claim credit, relief, remission or
repayment from or against its corporate profits or similar tax liability
in respect of the amount of such deduction or withholding in priority to
any other claims, reliefs, credits or deductions available to it, nor
oblige any person to disclose any information relating to its tax affairs
or any calculations in respect thereof.
6. INCREASED COSTS
6.1 REIMBURSEMENT FOR INCREASED COSTS
If, by reason of (a) any change in law or in its interpretation or
administration and/or (b) compliance with any request from or requirement
of any central bank or other fiscal, monetary or other authority
(including, without limitation, a request or requirement which affects the
manner in which a Bank or any holding company of such Bank allocates
capital resources to its obligations hereunder) whether or not having the
force of law but which is commonly complied with by banks in the relevant
jurisdiction:
(i) a Bank or any holding company of such Bank incurs an additional
cost as a result of its having entered into and/or performing its
obligations under this agreement and/or assuming or maintaining a
Commitment under this agreement and/or participating in an Advance
or Tranche hereunder;
(ii) a Bank or any holding company of such Bank is unable to obtain the
rate of return on its overall capital which it would have been able
to obtain but for its having entered into and/or performing its
obligations and/or assuming or maintaining a Commitment under this
agreement and/or participating in an Advance or Tranche;
(iii) there is any increase in the cost to a Bank or any holding company
of such Bank of funding or maintaining all or any of the Advances
or Tranches;
(iv) a Bank or a holding company of such Bank becomes liable to make any
payment on account of tax or otherwise (not being a tax imposed on
the overall net income of the Bank or the net income of its
Facility Office by the jurisdiction in which it is incorporated or
in which its Facility Office is located) on or calculated by
reference to the amount of the Advances
39
or Tranches made or to be made by it hereunder and/or by reference
to any sum received or receivable by it hereunder,
then the Parent shall (unless the same is dealt with by any other
provision of this agreement), from time to time on demand of the Agent,
promptly pay to the Agent for the account of that Bank amounts sufficient
to indemnify that Bank or any such holding company of such Bank against,
as the case may be, (i) such additional cost, (ii) such reduction in such
rate of return (or such proportion of such reduction as is, in the opinion
of that Bank, attributable to its obligations hereunder), (iii) such
increased cost (or such proportion of such increased cost as is, in the
opinion of that Bank, attributable to its (or any holding company of such
Bank) funding or maintaining any Advances or Tranches hereunder) or (iv)
such liability.
6.2 EXCEPTIONS
Clause 6.1 does not apply to any amount:
(a) compensated for by the payment of the Associated Costs Rate or the
operation of clause 4.1;
(b) which is, or is attributable to, any tax on the overall net income,
profits or gains of a Bank or any of its holding companies (or the
overall net income, profits or gains of a division or branch of the
Bank or any of its holding companies);
(c) arising directly out of the implementation by the applicable
authorities having jurisdiction over such Bank and/or its Facility
Office of the matters set out in the statement of the Basle
Committee on Banking Regulations and Supervisory Practices dated
July 1988 and entitled "International Convergence of Capital
Measurement and Capital Standards" (the "Guidance") except where a
higher level of capital adequacy is imposed than that stipulated in
the Guidance at the date of this agreement;
(d) which arises directly out of a change to an applicable law or
regulation affecting a Bank which has come into effect at the time
that Bank becomes a party to this agreement or takes a transfer
under clause 16 of which that Bank is aware and compliance with
which is in accordance with the normal practice of banks and
financial institutions to which such law or regulation applies.
6.3 NOTIFICATION
A Bank intending to make a claim pursuant to clause 6.1 shall notify the
Agent of the event by reason of which it is entitled to do so as soon as
reasonably practicable after becoming aware thereof, giving reasons for
such claim, whereupon the Agent shall notify the Parent thereof.
40
7. ILLEGALITY AND MARKET DISRUPTION
7.1 ILLEGALITY
If, at any time, it is unlawful, or contrary to any official directive or
request (being a directive or request with which the relevant Bank is
accustomed to comply) of any central bank or other fiscal, monetary or
other authority, or impossible for a Bank to make, fund or allow to remain
outstanding its participation in an Advance or Tranche made or to be made
by it hereunder, then that Bank shall promptly after becoming aware of the
same, deliver to the Parent through the Agent a certificate to that effect
and:
(i) such Bank shall not thereafter be obliged to make available its
participation in any Advance or Tranche hereunder and the amount of
its Commitment shall be immediately reduced to zero; and
(ii) if the Agent on behalf of such Bank so requires, the relevant
Borrower shall on such date as the Agent shall have specified
(being a date which is not before, the earlier to occur of (a) 30
days after the date of the Agent's notice and (b) the latest date
permitted by the relevant law, official directive or request)
prepay such Bank's participation in the relevant Advance(s) or
Tranche(s) together with accrued interest thereon and all other
amounts owing to such Bank hereunder.
7.2 MARKET DISRUPTION
(a) If in relation to any Advance or Tranche and any proposed Interest
Period or Term relating thereto:
(i) the Agent determines that, at or about 11.00 a.m. on the
Quotation Date, it is not possible to determine LIBOR for the
currency in which such Advance or Tranche is denominated and
none or one only of the Reference Banks is supplying a
quotation for the purposes of determining LIBOR for the
currency in which such Advance or Tranche is denominated; or
(ii) the Agent is notified by the Banks to whom in aggregate fifty
per cent. (50%) or more of the Outstandings are (or, if that
Advance or Tranche were then made, would be) owed that (i)
they are unable to obtain matching deposits in the London
Interbank Market at or about 11.00 a.m. on the Quotation Date
in sufficient amounts to fund their respective shares of such
Advance or Tranche during that Interest Period or Term or
(ii) the cost to those Banks of obtaining such deposits is in
excess of the quotations used for determining LIBOR for the
currency in which such Advance or Tranche is denominated in
accordance with the definition of LIBOR,
then the Agent shall promptly give notice thereof to the relevant
Borrower and the Banks and, notwithstanding the provisions of clause
2, the Interest Period or Term relating to that Advance or Tranche
and the
41
amount of interest payable in respect of such Advance or Tranche
during that Interest Period or Term shall be determined in
accordance with the following provisions of this clause 7.2.
(b) If clause 7.2(a) applies in relation to an Advance or Tranche then,
subject to clause 2.4, the duration of the Interest Period or Term
relating to that Advance or Tranche shall be one month or, if less,
such that it shall end on the Final Repayment Date and the rate of
interest applicable to that Advance or Tranche during the Interest
Period or Term relating to it shall, subject to the provisions of
clause 7.2(c), be the rate per annum which is the sum of (i) the
Margin, (ii) (in the case of an Advance or Tranche denominated in
Sterling) the Associated Costs Rate applicable thereto and (iii) the
rate per annum determined by the Agent (and notified to the relevant
Borrower) to be the weighted average of the rates of each Bank (as
notified to the Agent and advised by the Agent to the relevant
Borrower(s) before the last day of such Interest Period) each of
which expresses as a percentage rate per annum the cost to each Bank
of funding from whatever sources and in whatever manner it may
reasonably select its portion of such Advance or Tranche during such
Interest Period or Term.
(c) The Agent shall, as soon as is reasonably practicable after it has
given the notice referred to in clause 7.2(a), enter into
negotiations with the relevant Borrower with a view to agreeing a
substitute basis (i) for determining the rates of interest from time
to time applicable to the Advances and/or (ii) upon which the
Advances or Tranches may be maintained thereafter and any such
substitute basis that is agreed within 20 days of the giving of such
notice (but in any event by no later than the date falling five
Business Days prior to the last day of the Interest Period referred
to in clause 7.2(b)) shall take effect in accordance with its terms
and be binding on each party hereto Provided that the Agent may not
agree any such substitute basis without the prior consent of each
Bank.
(d) If a substitute basis in respect of the Advances or Tranches is not
agreed pursuant to clause 7.2(c), the relevant Borrower shall be
entitled, by giving to any Bank not less than ten Business Days'
notice:
(i) to cancel all (but not part only) of the Bank's Commitment,
in respect of such Advances or Tranches, whereupon that
Bank's Commitment shall be reduced to zero; and
(ii) to prepay all (but not part only) of that Bank's Outstandings
in respect of such Advances or Tranches,
in each such case without premium or penalty (save as provided in
clause 12.2) together with accrued interest thereon and all other
amounts owing to such Bank under this agreement Provided that the
relevant Borrower may not elect to cancel the Commitment and/or
prepay the Outstandings of a Bank whose rate of interest as advised
to such Borrower by the Agent under clause 7.2(b) is equal to or
lower than the
42
rate as so advised to it by the Agent in relation to another Bank
unless that other Bank's Commitment in respect of such Advances or
Tranches, is also cancelled and/or, as the case may be, its
Outstandings in respect of such Advances or Tranches, are also
prepaid at the same time.
(e) Interest on an Advance or Tranche during an Interest Period relating
to it calculated at the rates specified in clauses 7.2(b) shall be
distributed by the Agent to the Banks in proportion to the amounts
which represent the cost to each Bank of funding its share of such
Advance or Tranche during such Interest Period Provided that any
such interest which is attributable to the Margin shall be
distributed by the Agent to the Banks in proportion to their
respective shares in such Advance or Tranche.
(f) So long as any alternative basis for the calculation of interest as
provided in clauses 7.2(b) or 7.2(c) is in force the Agent, in
consultation with the relevant Borrower and the Banks, shall from
time to time, but not less often than fortnightly, review whether or
not the circumstances referred to in clause 7.2(a) still prevail
with a view to returning to the normal provisions of this agreement
relating to the determination of the rates of interest applicable to
any Advance or Tranche.
8. MITIGATION OF ADDITIONAL COSTS
8.1 BANKS' OBLIGATION TO MITIGATE
(a) If, in respect of any Bank, circumstances arise which would or would
upon the giving of notice result in:
(i) the reduction of its Commitment to zero pursuant to clause
7.1(i);
(ii) a payment being made pursuant to clause 7.1(ii);
(iii) an increase in the amount of any payment to be made to it or
for its account pursuant to clause 4.1;
(iv) a claim for indemnification pursuant to clause 6.1;
then, without in any way limiting, reducing or otherwise qualifying
either Borrower's obligations under any of the clauses referred to
in sub-clauses (i) to (iv), such Bank shall promptly after its
Facility Office becomes aware of the same notify the Agent thereof
and, in consultation with the Agent and the Parent, for a period not
exceeding 30 days, take such reasonable steps as it considers may be
reasonably open to it to mitigate the effects of such circumstances
including, if it considers appropriate, the transfer of its Facility
Office for the Facilities to another jurisdiction acceptable to the
Parent and in which it has an office carrying on a similar business
or the transfer of its rights and obligations in accordance with,
and subject to the provisions of, clause 16 to another financial
institution willing to participate in the Facilities provided that
(a) such Bank shall be under no obligation to make any such transfer
if, in the
43
bona fide opinion of such Bank, such transfer would or might have an
adverse effect upon its business, operations or financial condition
or cause it to incur significant costs and (b) such Bank shall,
notwithstanding the foregoing, be under no obligation to achieve any
particular result and shall incur no liability to either Borrower by
virtue of any such steps resulting in less than complete mitigation.
(b) Nothing in clauses 5, 6, 7 and 8.1 shall oblige any Bank to disclose
to the Parent or any other person any information concerning its
financial affairs or to arrange its tax affairs in any particular
manner or at any particular time or to claim relief from tax in
respect of any particular payment in priority to any other claims,
reliefs, credits or deductions available to it.
9. REPRESENTATIONS AND WARRANTIES
9.1 REPRESENTATIONS AND WARRANTIES
To induce each of the Banks, the Arranger and the Agent to enter into this
agreement and to make available its participation in the Facilities, the
Parent represents and warrants to and for the benefit of each of the
Banks, the Agent and the Arranger that:
(a) INCORPORATION AND EXISTENCE: each Relevant Group Member is a
limited company, duly incorporated and validly existing under the
laws of the country or state of its incorporation and has the power
and the full authority and right to own its properties, assets and
revenues and to carry on its business as it is now being conducted;
(b) POWER AND AUTHORITY: each Relevant Group Member has the power to
enter into, execute, deliver and perform the Transaction Documents
to which it is a party and the transactions contemplated thereby and
all necessary corporate, shareholder or other action has been taken
to authorise the entry into, execution, delivery and performance of
each Transaction Document to which the Relevant Group Member is a
party and the other transactions contemplated thereby (and all such
authorisations are in full force and effect);
(c) OBLIGATION AND ENFORCEABILITY: this agreement constitutes and each
of the other Transaction Documents to which any Relevant Group
Member is a party (when executed) will constitute its legal, valid
and binding obligations, and, subject to laws relating to
bankruptcy, insolvency and liquidation and the existence of
equitable remedies, are enforceable against such Relevant Group
Member in accordance with their respective terms;
(d) NO CONFLICT: the entry into by each Relevant Group Member of each
Transaction Document to which such Relevant Group Member is a party
and the performance of their respective obligations thereunder, the
drawing and/or conversion of any Advance or Tranche and the use of
the proceeds thereof and the transactions contemplated by the
44
Transaction Documents to which such Relevant Group Member is a party
do not conflict with or exceed (i) any applicable law or regulation
or instrument or any official or judicial order, (ii) the Memorandum
and Articles of Association (or equivalent constitutive documents)
of such Relevant Group Member, (iii) any limits on the borrowing or
other powers of any Relevant Group Member or the exercise of such
powers by the directors or other officers of any Relevant Group
Member, (iv) any material charge, contract, instrument, undertaking
or restriction to which any Relevant Group Member is a party, or (v)
any material agreement or document to which any Relevant Group
Member is a party or which is binding upon it or any of the
undertaking, property, assets or revenues of it, nor will any such
matter result in the creation or imposition of any Encumbrance on
any of the property, assets or revenues of any Relevant Group
Member.
(e) NO DEFAULT:
(i) no event has occurred and is subsisting which constitutes an
Event of Default; and
(ii) save as and only to the extent expressly disclosed in writing
by the Parent to the Agent prior to the date hereof, no event
has occurred and is subsisting which constitutes a material
default under or in respect of any other material agreement
or document to which it or any other Group Company is a party
or by which it or any of the Group Companies is bound which
would be reasonably likely to have a Material Adverse Effect;
(f) AUTHORISATIONS AND CONSENTS: all authorisations, approvals,
consents, licences, exemptions, filings, registrations,
notarisations and other matters, official or otherwise, required in
connection with each Relevant Group Member's entry into and
performance of, and the validity and enforceability against them of
the Transaction Documents to which the relevant one of them is a
party and the transactions contemplated thereby have been obtained
or effected and are in full force and effect;
(g) ACCOUNTS: the Base Accounts and the consolidated and unconsolidated
audited and unaudited accounts of the Group for each subsequent
financial period delivered by the Parent to the Agent have been
prepared in accordance with accounting principles and practices
generally accepted in the United Kingdom consistently applied and
(when taken with the notes thereto) present a true and fair view of
(in the case of the audited accounts) or fairly present (in the case
of the unaudited accounts) the financial condition of the Group as
at the date to which they have been prepared;
(h) NO LITIGATION: no litigation, arbitration or administrative
proceedings are current or pending or, to the knowledge of its
officers, threatened against any Group Company or any part of the
undertaking assets or revenues of any Group Company which has a
reasonable likelihood of
45
success and which when resolved is likely to have a Material Adverse
Effect;
(i) TAXATION: the Parent and each other Group Company has complied in
all material respects with all Taxation laws in all jurisdictions in
which it is subject to Taxation; no material claims (which are not
being contested in good faith) are being asserted against either
Borrower or any of the Guarantors with respect to Taxes;
(j) ENVIRONMENTAL LAW: no Group Company has breached any Environmental
Law and the Group Companies are in possession of all Environmental
Licences required for the conduct of their respective businesses and
none of them has breached in any material respect any of the terms
or conditions of any such Environmental Licence which in any such
case would have a Material Adverse Effect;
(k) INFORMATION:
(i) General Information provided prior to the date of this
------------------------------------------------------
agreement:
---------
all written information provided to the Agent and/or any of
the Banks by the Parent or any other Group Company in
connection with any of the Transaction Documents prior to the
date of this agreement (and identified by the Agent and
notified in writing to the Parent prior to the date of this
agreement as being information upon which it has placed
reliance) is true and correct in all material respects and
the Parent is not aware of any material facts or
circumstances that have not been disclosed to the Agent
and/or any of the Banks prior to the date of this agreement
and which might, if disclosed, adversely affect the decision
of a person considering whether or not to provide finance to
either Borrower or to provide such finance against the
security of a guarantee issued by the Guarantors;
(ii) Information Memorandum:
----------------------
(A) the factual information in the Information Memorandum
supplied by the Group will be true and accurate in all
material respects as at the date to which it speaks;
(B) the opinions, projections and forecasts in the
Information Memorandum and the assumptions upon which
they are to be based will be arrived at after due and
careful consideration and enquiry and will generally
reflect the Parent's views as at the date of the
Information Memorandum, all assumptions made will be
reasonably made and all statements of opinion will be
genuinely and honestly held;
46
(C) to the best of the knowledge and belief of the Parent
having made all reasonable and proper enquiries, as of
the date of the Information Memorandum, there will be
no material facts or circumstances which had not been
disclosed to the Arranger or Agent, which would have
made any such information, opinions, projections,
forecasts or assumptions untrue, inaccurate or
misleading in any material respect or which, if
disclosed, might have reasonably been expected
adversely to affect the decision of a person
considering whether to provide finance to either
Borrower on the terms contained herein;
(iii) Continuing Information after the date of this agreement:
-------------------------------------------------------
(A) all financial information provided to the Agent under
clause 10.1(c)(ix) will, to the best of the Parent's
knowledge, information and belief (after due enquiry
has been made), be true and correct in all material
respects;
(B) any certificates delivered by the Parent or any other
Group Company to the Agent or any of the Banks pursuant
to the terms of this agreement will be true and correct
in all material respects;
(C) all information delivered by the Parent or any other
Group Company to the Agent or any of the Banks for the
purpose of obtaining any consents, releases or waivers
from or by the Banks or the Agent under or pursuant to
this agreement will be true and correct in all material
respects;
(D) any information supplied by any Group Company to the
Agent or any Bank pursuant to clause 10.2(k) will, to
the best of that Group Company's knowledge, information
and belief (after due enquiry has been made), be true
and correct in all material respects;
(E) any financial projections provided to the Agent have
been be prepared with due care and skill and based upon
assumptions believed by the management of the Parent to
be reasonable;
(l) NO MATERIAL ADVERSE CHANGE: there has been no material adverse
change in the Parent's financial condition since the date to which
the Base Accounts were made up, nor in the consolidated financial
condition of the Group since that date, in each case which has had
or is likely to have a Material Adverse Effect;
47
(m) NO ENCUMBRANCES: no Encumbrances (other than Permitted Encumbrances)
exist over all or any of the present or future undertaking, revenues
or assets of any Obligor or any of its Subsidiaries;
(n) MARGIN STOCK: The execution and delivery by the Purchaser of this
agreement, and the performance of its obligations hereunder and any
on-lending of the proceeds of any Advance by the Parent to the
Purchaser, do not and will not result in a breach or violation of
Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System;
(o) INVESTMENT COMPANY ACT: Neither the Purchaser nor any of its
subsidiaries is an "investment company" or a "company controlled by
an investment company" within the meaning of the United States
Investment Company Act of 1940, as amended;
(p) PUBLIC UTILITY HOLDING COMPANY ACT: Neither the Purchaser nor any
of its subsidiaries is a "holding company" or an "affiliate" of a
"holding company" within the meaning of the United States Public
Utility Holding Company Act of 1935, as amended;
(q) TENDER OFFER AND MERGER DOCUMENTS: Neither the Offer to Purchase,
the Schedule 14D-1 nor any document delivered to shareholders of the
Target in connection with the Tender Offer or the Merger will
contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not
misleading in the light of the circumstances under which they were
made;
(r) CERTIFICATE OF INCORPORATION: The certificate of incorporation of
the Target permits the Merger to occur with the consent of the
holders of a majority of the outstanding shares of common stock of
the Target.
9.2 TARGET AND SUBSIDIARIES
Until the expiry of a period of six months after completion of the
Acquisition, the representations and warranties contained in paragraphs
(h) (No litigation), (i) (Taxation), (j) (Environmental Law) and (m) (No
Encumbrances) above shall, to the extent only that they apply to any or
all of Target and its subsidiaries, be qualified by reference to the
actual knowledge, information and belief of the Parent at the time such
representation or warranty falls to be made hereunder.
9.3 REPETITION
The representations and warranties set out in clause 9.1 shall survive the
execution of this agreement and each of the Repeated Representations shall
be repeated on the last day of each Interest Period and upon the date of
delivery of each Utilisation Request hereunder by reference to the then
existing facts and circumstances. In the case of the representation and
warranty contained in paragraph 9.1(g), such repetition shall be deemed to
be made by reference to the accounts of the Group most recently delivered
hereunder as at the relevant time.
48
10. FINANCIAL COVENANTS AND UNDERTAKINGS
10.1 FINANCIAL COVENANTS
The Parent undertakes to each of the Banks and the Agent that, so long as
any amount remains unpaid in respect of principal, interest or otherwise
hereunder or any Bank is under any obligation to make or maintain its
participation in the Facilities or any part thereof (unless the Agent
acting on the instructions of the Majority Banks otherwise agrees):
(a) CONSOLIDATED TOTAL BORROWINGS: CONSOLIDATED EBITDA it will procure
that the ratio of Consolidated Total Borrowings to Consolidated
EBITDA shall not, as at the last day of each of the periods referred
to in clause 10.1(e), exceed the ratio 4:1, in the first 12 months
commencing from the date hereof. For the remainder of the term of
this agreement the ratio shall not, as at the last day of each of
the periods referred to in clause 10.1(e), exceed the ratio 3:1.
(b) CONSOLIDATED PROFIT BEFORE INTEREST AND TAX: CONSOLIDATED NET
INTEREST PAYABLE: it will procure that the ratio of Consolidated
Profit before Interest and Tax to Consolidated Net Interest Payable,
as at the last day of each of the periods referred to in clause
10.1(e), shall not be less than the ratio 4.1;
(c) INFORMATION: the Parent will provide to the Agent (with sufficient
copies for each of the Banks) the following:
(i) as soon as is practicable and in any event within 270 days
after the end of its Financial Years, the audited accounts of
the Parent and its Material Subsidiaries for that year;
(ii) as soon as is practicable and in any event within 150 days
after the end of each of its Financial Years, the
consolidated audited accounts of the Group for that year;
(iii) no later than 60 days after the end of each half year
commencing with the half year ending on 31st March 1998, the
unaudited interim accounts of the Parent and the unaudited
consolidated results of the Group, in each case in Acceptable
Form for the immediately preceding six month period
including, without limitation, a balance sheet, profit and
loss account and cashflow statement of the Group;
(iv) no later than 45 days after the end of each Quarterly Period
commencing with the Quarterly Period ending on 31st March
1998, the quarterly management accounts of the Group, in an
Acceptable Form for the immediately preceding Quarterly
Period, including a balance sheet and a profit and loss
account as at the last day of each quarter (including details
of all off balance sheet financing arrangements entered into
during such period) together with a profit and loss forecast
for the Group
49
(on a consolidated basis) for the remainder of the then
current Financial Year;
(v) by no later than 6 weeks before the end of each of its
Financial Years, the budgeted cash flow forecast for the
Group (on a consolidated basis) in an Acceptable Form;
(vi) by no later than the end of each of its Financial Years, the
budgeted cash flow forecast for the Group (on a consolidated
basis) in an Acceptable Form as ratified by the board of
directors of the Parent;
(vii) by no later than 45 days after the end of each quarter
commencing with the quarter ending on 31st March 1998 a
certificate signed by two directors of the Parent or by one
director of the Parent and by the Secretary of the Parent
advising:
(aa) that the undertakings set out in clauses 10.1(a) and
(b) have been complied with as at the end of that
quarter; and
(bb) which of the ratios (if any) set out in clause 2.5 have
been achieved;
and containing computations in form and substance reasonably
satisfactory to the Majority Banks necessary to demonstrate
such compliance or non-compliance if such is the case (the
"CERTIFICATE OF COMPLIANCE");
(viii) copies of all notices and other documents sent by any Group
Company to its shareholders (or any class thereof) and/or its
creditors generally (or any class thereof) on the date that
such documents are dispatched;
(ix) as soon as practicable, such other information as the Agent
may reasonably require in respect of the business and
financial condition of the Parent or any other Group Company;
(d) PREPARATION OF ACCOUNTS: it will procure that all accounts required
under paragraph (c) above will be prepared in accordance with
generally accepted accounting principles and practices in the United
Kingdom and consistently applied, will comply with all applicable
laws and (when taken with the notes thereto) will give a true and
fair view of (in the case of the audited accounts) and fairly
present (in the case of the unaudited accounts), as the case may be,
the financial condition of the Parent and each of its Subsidiaries
and the consolidated financial condition of the Parent and its
Subsidiaries as at the date thereof.
(e) TESTING OF COVENANTS: the covenants contained in clause 10.1(a) and
clause 10.1(b) shall be tested quarterly, first by reference to the
unaudited
50
consolidated accounts of the Group produced pursuant to
clause 10.1(c)(iii) (in respect of the 12 month period ending
on the last day of the first half-year period in each
Financial Year), by reference to the relevant consolidated
audited accounts of the Group produced pursuant to clause
10.1(c)(ii) (in respect of the relevant Financial Year) and
by reference to the relevant quarterly management accounts of
the Group produced pursuant to clause 10.1(c)(iv) (in respect
of the 12 month period ending on the last day of the First
Quarterly Period and the Third Quarterly Period in each
Financial Year).
10.2 UNDERTAKINGS
So long as any amount remains unpaid in respect of principal, interest or
otherwise hereunder or any Bank is under any obligation to make or
maintain its participation in the Facilities or any part thereof (unless
the Agent acting on the instructions of the Majority Banks otherwise
agrees), each Borrower undertakes in relation to itself and the Parent
undertakes in relation to (as relevant) each Group Company, Guarantor, and
Material Subsidiary (as referred to in sub-clauses (a) to (o) (inclusive)
below that:
(a) NEGATIVE PLEDGE: save for Permitted Encumbrances, no Group Company
will grant or permit to subsist any Encumbrance over all or any of
its property, undertaking, assets, or revenues (whether present or
future);
(b) DISPOSALS: it will not, and will procure that no Group Company
will, sell, transfer, lend, dispose of or otherwise cease to
exercise direct control over (such transactions being hereunder
referred to as "disposals") its present or future undertaking,
assets or revenues, whether by one or a series of transactions
related or not, except for:
(i) disposals of assets in the ordinary course of the relevant
company's trading on an arm's length basis;
(ii) the payment of cash in the ordinary course of the relevant
company's business on an arm's length basis;
(iii) payments made by it under this agreement or under any other
Borrowings permitted under this agreement;
(iv) disposals with the prior written consent of the Majority
Banks;
(v) disposals of assets whether by one or a series of
transactions related or not the book value or consideration
payable (whichever is the greater) in respect of which does
not exceed (Pounds)10,000,000 (or its equivalent in other
currencies) in respect of any one disposal or which when
aggregated with all other such disposals in any one calendar
year does not exceed (Pounds)20,000,000 (or its equivalent in
other currencies);
(vi) payments made by it in respect of the Acquisition;
51
(vii) disposals from any Group Company to any Obligor;
(viii) disposals from any non-Obligor to any non-Obligor;
(ix) disposals of surplus assets at market value and on an arm's
length basis;
(x) disposals of assets in exchange for other assets of a
comparable value;
(c) OWNERSHIP OF GUARANTORS: the Guarantors will at all times be and
remain Subsidiaries of the Parent and all of the issued share
capital of each of the Guarantors will at all time be and remain
beneficially owned (directly or indirectly) by the Parent;
(d) NEW SUBSIDIARIES: it will notify the Agent forthwith in writing if
any company incorporated in the United Kingdom after the date hereof
becomes a Material Subsidiary (whether or not such company was
previously a Subsidiary of the Parent or any Guarantor) and will, if
so required by the Agent, acting upon the instructions of the
Majority Banks (but subject to any applicable law), within thirty
days of being required to do so, in each case upon such terms as the
Agent may reasonably specify, procure that such company will, by
entering into a deed of admission in the form or substantially in
the form set out in the Guarantee, guarantee the obligations of the
Borrowers to the Agent and each of the Banks under this agreement
and the other Finance Documents;
(e) EVENT OF DEFAULT/POTENTIAL EVENT OF DEFAULT: it will promptly
notify the Agent in writing of any Event of Default or any event or
circumstances which with the giving of notice, lapse of time or
fulfilment of other conditions (or a combination of any of them) (in
each case as specified in clause 11.1) would constitute an Event of
Default;
(f) CERTIFICATE OF NO EVENT OF DEFAULT: it will upon request of the
Agent from time to time (but subject to no more than one such
request being made in any six month period), promptly supply the
Agent with a certificate signed by two directors certifying, as far
as it is aware due enquiry having been made, that no Event of
Default has occurred and is subsisting;
(g) BUSINESS: it will procure that no material change is made to the
general nature of the business of the Group taken as a whole;
(h) INSURANCE: it will, and will procure that all other Group Companies
will maintain insurances on or in relation to their respective
businesses and assets with underwriters and insurance companies of
repute against such risks of the kinds customarily insured against
by, and in amounts reasonably and commercially prudent for,
companies carrying on similar businesses and will comply and will
procure that all such other Group
52
Companies will comply with all requirements of the policies of such
insurance in respect of the maintenance and repair of any assets so
insured to the extent that compliance with the same are required in
order to keep such policies on foot;
(i) AUTHORISATIONS, LICENCES, ETC: it will, and will procure that all
other Group Companies will obtain and promptly renew from time to
time, and will promptly (when requested) furnish, certified copies
to the Agent of all such authorisations, approvals, consents,
licences and exemptions as may be required under any applicable law
or regulation to enable such companies to perform their respective
obligations under the Transaction Documents to which any of them is
a party or which may be required for the validity or enforceability
thereof or which any Group Company may require for carrying on its
business and it shall procure that the relevant Group Company shall
in each case comply in all material respects with the terms of the
same;
(j) RANKING: it will ensure that its obligations under this agreement
and its and each Guarantor's obligations under the Finance Documents
to which it or (as the case may be) any such Guarantor is a party do
and will rank at least pari passu with all their respective other
present and future unsecured and unsubordinated indebtedness, other
than that indebtedness mandatorily preferred by law;
(k) ACQUISITION DOCUMENTS:
(i) it will perform and will procure that the Purchaser performs
its material obligations in accordance with the Acquisition
Documents;
(ii) it will and will procure that the Purchaser will take all
reasonable steps to protect, maintain and enforce its
material rights under the Acquisition Documents and not do or
omit to do anything which might prejudice such rights;
(iii) it will notify the Agent and on request supply reasonable
information to the Agent regarding:
(1) any material breach of any representation, warranty or
other obligation under the Acquisition Documents;
(2) any other material claims arising thereunder by reason
of breach of representation, warranty or other
obligation thereunder; and
(3) any legal proceedings by or against it or any of its
Subsidiaries in connection with any claim under the
Acquisition Documents;
(iv) it will not, and it will procure that none of the other Group
Companies which is a party thereto will, without the consent
of
53
the Majority Banks (not to be unreasonably withheld) agree to
any material amendment to or variation of the Acquisition
Documents or waive any material right thereunder;
(l) ACCOUNTING REFERENCE PERIOD: it will ensure that no Group Company
alters its Accounting Reference Period except so as to be the same
as that of the Parent without the prior approval of the Agent
(acting in accordance with the instructions of the Majority Banks);
(m) ACQUISITIONS: it will not, and will procure that no Group Company
will, in any one Financial Year, purchase or otherwise acquire
whether by one or a series of transactions related or not, any
interest whatsoever in the share capital (or equivalent) or the
business or undertaking (including, but not limited to, any
franchise rights) or assets constituting a separate business, line
of business or undertaking of any company or other person for a
consideration in cash or otherwise in an amount exceeding 15% of:
(i) Consolidated Profit Before Tax; or
(ii) Consolidated Turnover,
(in each case as shown by the most recently delivered audited
accounts of the Group) during the term of this agreement (excluding
the acquisition of Target);
(n) LOANS AND CREDIT: save in the ordinary course of business it will
not and will procure that no other Group Company will make any
loans, grant any credit or give any guarantee or indemnity (except
as required hereby or in respect of the Hedging Agreements) to or
for the benefit of any person (other than another Group Company) or
otherwise voluntarily assume any liability, whether actual or
contingent, in respect of any obligation of any other person being
in an amount exceeding (Pounds)2,500,000 (or its equivalent in other
currencies) in aggregate at any one time;
(o) INTELLECTUAL PROPERTY: it will ensure that each member of the Group
has and maintains all patents, patent licences, patent rights,
service marks and licences, trademarks, trademark rights and
licences, trade names, trade name rights, copyrights and licences
under copyright and know-how rights and licences and all
applications for any of the above which are in its opinion desirable
to the running of the business of the Group.
(p) BORROWING: it will not and it will procure that for so long as
Multisoft Financial Systems Limited is a Subsidiary, it will not
incur, directly or indirectly, any Indebtedness in respect of
Borrowings or enter into any other arrangements whereby it is
entitled to incur Indebtedness in respect of Borrowings, other than:
54
(i) Indebtedness owed by Multisoft Financial Systems Limited to
Barclays Bank PLC in a principal amount not exceeding
(Pounds)925,000; and
(ii) other Indebtedness of Multisoft Financial Systems Limited
which in aggregate does not exceed an amount of
(Pounds)250,000.
10.3 TARGET AND SUBSIDIARIES
(a) To the extent that any of Target or its subsidiaries shall (prior to
31st July 1998) be contractually bound to do or cause to be done any
act by any of them which on or after 31st July 1998 would cause a
breach of the terms of clause 10.2(a) (Negative Pledge) or clause
10.2(n) (Loans and Credit) and having used all reasonable endeavours
to procure a release from such contractual obligations, such act
shall not constitute a breach of the terms of this agreement.
(b) Until the expiry of a period of six months after 31st July 1998, the
failure by Target or any of its subsidiaries to comply with the
requirements of clause 10.2(o) (Intellectual Property) (having used
reasonable endeavours so to do) shall not constitute a breach of the
terms of this agreement.
11. EVENTS OF DEFAULT
11.1 EVENTS OF DEFAULT
In the event that any of the following events shall occur (each of which
shall be an Event of Default):
(a) FAILURE TO PAY: either Borrower or any Guarantor fails to pay any
amount (whether of principal, interest or otherwise) payable under
the terms of this agreement or the Guarantee (provided that no such
failure or non-payment shall be an Event of Default if it occurs
only by reason of: (i) technical difficulties beyond the reasonable
control of the relevant Borrower affecting the transfer of funds
due from the relevant Borrower to the Agent and the Agent receives
payment within three Business Days of the due date hereunder, or
(ii) administrative error and the Agent receives payment within one
Business Day of the due date hereunder);
(b) FAILURE TO COMPLY WITH FINANCIAL COVENANTS: the Parent fails to
comply with the covenants specified in clause 10.1(a) or (b) of this
agreement;
(c) FAILURE TO COMPLY WITH OTHER COVENANTS: either Borrower or any
Guarantor fails to comply with any other provision of this agreement
or any other Finance Document and either such breach is, in the
reasonable opinion of the Agent, not capable of remedy or such
breach is, in the reasonable opinion of the Agent, capable of remedy
and is not remedied within 14 days;
55
(d) BREACH OF REPRESENTATION OR WARRANTY: any representation, warranty
or statement which is made by either Borrower or any Guarantor in
any of the Finance Documents or which is contained in any
certificate, statement or notice provided under or pursuant to any
of the Finance Documents proves to have been incorrect or misleading
in any material respect when made (or deemed repeated);
(e) CROSS-DEFAULT:
(i) any Borrowings in an amount exceeding (Pounds)500,000 or its
equivalent of a Group Company are not paid when due (or
within any originally applicable grace period); or
(ii) an event of default howsoever described relating to a Group
Company occurs (taking into account any originally applicable
grace period) under any document relating to Borrowings in an
amount exceeding (Pounds)500,000 or its equivalent of such
Group Company which renders those Borrowings capable of being
declared prematurely due and payable (save in the case of
events of default under documents evidencing the principal
debt related to Borrowings under paragraph (i) of the
definition of that term where the relevant Group Company
satisfies its obligations under the relevant guarantee,
indemnity or other suretyship obligation); or
(iii) any Borrowings of any Group Company becomes prematurely due
and payable or is placed on demand (other than where
originally on demand) as a result of an event of default
(however described) under the document relating to those
Borrowings; or
(iv) any floating charge securing Borrowings over the assets of
the Borrower or any Material Subsidiary crystallises.
(f) INABILITY TO PAY DEBTS:
(i) either Borrower or any Material Subsidiary becomes insolvent
or unable to pay its debts as they fall due or admits its
inability to pay its debts as they fall due;
(ii) any order is made or resolution passed or other action taken
for the suspension of payments, protection from creditors or
bankruptcy of either Borrower or any Material Subsidiary or
either Borrower or any Material Subsidiary announces an
intention to suspend making payments to all or any class of
its creditors;
(iii) either Borrower or any Material Subsidiary, due to reasons
which in the opinion of the Majority Banks acting reasonably
relate to financial difficulty, convenes a meeting of all or
any class of its creditors for the purpose of proposing or
proposes
56
or makes any arrangement or composition with, or any
assignment for the benefit of, all or any class of its
creditors;
(iv) either Borrower or any Material Subsidiary, due to reasons
which in the opinion of the Majority Banks acting reasonably
relate to financial difficulty, proposes or enters into any
negotiations for or in connection with, the re-scheduling,
restructuring or re-adjustment of any indebtedness or a
moratorium is declared in respect of any of its indebtedness;
(g) DISTRESS OR ATTACHMENT: any distress, execution, attachment,
sequestration or other legal process affects the whole or any part
of the assets of either Borrower or any Material Subsidiary in
respect of assets of a value exceeding (Pounds)50,000 or its
equivalent in aggregate and is not discharged within 14 days;
(h) INSOLVENCY:
(i) an administrative or other receiver or manager or similar
officer is appointed of either Borrower or any Material
Subsidiary over the whole or any part of the assets of either
Borrower or any Material Subsidiary or either Borrower or any
Material Subsidiary requests any person to appoint such a
receiver or similar officer or any other procedural steps are
taken to enforce any Encumbrance over any property of either
Borrower or a Material Subsidiary or any encumbrancer takes
possession of all or any part of the assets of either
Borrower or a Material Subsidiary;
(ii) any order is made or any resolution is passed or any petition
is presented (other than a petition for a winding up which is
not advertised or notified to any other creditor and is
disputed by the relevant Borrower or the relevant Material
Subsidiary in good faith and which is dismissed or withdrawn
within a period of 14 days) or other procedural steps
(including the convening of any shareholders' meeting but
excluding steps taken by a creditor with a view to issuing or
presenting a petition to wind up) are taken for:
(1) the receivership, winding up, dissolution or
liquidation of either Borrower or a Material Subsidiary
other than (a) for the purpose of a reconstruction or
amalgamation the terms of which have previously been
approved by the Agent in writing on the instructions of
the Majority Banks; or (b) the solvent winding-up or
dissolution of either Borrower or any Material
Subsidiary the assets of which have been previously
transferred to either Borrower or another Material
Subsidiary;
57
(2) the making of an administration order against either
Borrower or any Material Subsidiary;
(iii) any order is made or resolution passed or other action taken
for the suspension of payments, protection from creditors or
bankruptcy of either Borrower or any Material Subsidiary;
(i) SECURITY DOCUMENTS: The Guarantee or any other Security Document
for the time being or any part thereof or this agreement shall in
any respect no longer be in full force and effect or cease to be
continuing or be or purport to be determined or be or become invalid
or unenforceable or if the validity, enforceability or applicability
thereof to any obligation purported to be guaranteed or payable
shall be disputed by a member of the Group;
(j) OTHER JURISDICTIONS: there is any occurrence or situation arising
outside the jurisdiction of the High Court of Justice of England and
Wales which shall have a substantially similar effect to clauses
11.1 (e), (f) (g) or (h);
(k) UNLAWFULNESS: At any time it is or becomes unlawful for either
Borrower or any Guarantor to perform any of their respective
obligations under any of the Transaction Documents;
(l) CESSATION OF BUSINESS: any Obligor ceases, or announces an
intention to cease to carry on all or a substantial part of its
business other than by way of disposal permitted under clause
10.2(b);
(m) CHANGE OF CONTROL: at any time any person or group of connected
persons, which does not at the date hereof have (or would not be
held under section 416 Taxes Act to have at the date hereof) control
of the Parent, acquires such control (for the purposes of this
paragraph, "connected person" shall be construed in accordance with
section 839 of the Taxes Act);
(n) TERMINATION OF MERGER AGREEMENT: the Parent or the Target terminate
or purport to terminate the Merger Agreement;
(o) OWNERSHIP OF TARGET:
(i) before completion of the Merger, the Purchaser does not hold,
directly or indirectly, at least 49.9% of the issued shares
of common stock of Target following any purchase of shares in
the Target by the Purchaser after the Tender Offer Closing
Date; or
(ii) after completion of the Merger, the Purchaser ceases to be a
Subsidiary of the Parent;
(p) QUALIFICATION OF ACCOUNTS: any audited accounts or financial
statement required to be supplied to the Agent and/or the Banks
pursuant to the
58
provisions of clause 10.1(c) shall be the subject of any
qualification by the auditors of the Group or any relevant Group
Company to the effect that an Obligor is unable to continue trading
as a going concern;
(q) ERISA:
(i) Any Plan which is covered by Title IV of ERISA but which is
not a multiemployer plan (as that term is defined in section
4001(a)(3) of ERISA) shall terminate under s.4001(c) or
s.4002 of ERISA;
(ii) any Obligor or any entity whether or not incorporated, which
is under common control with any other Obligor (within the
meaning of section 4001(a)(14) of ERISA) shall, or is, in the
reasonable opinion of the Majority Banks, likely to, incur
any liability in connection with a withdrawal from, or the
insolvency or reorganisation (as those terms are defined in
section 4245 and section 4241 respectively or ERISA) of, a
multiemployer plan; or
(iii) any other event or condition shall occur or exist with
respect to a Plan,
and in each case in clauses (i), (ii) and (iii) above, such event or
condition, together with all other such events or conditions, if
any, would have a Material Adverse Effect;
(r) MATERIAL ADVERSE CHANGE: any other event or series of events and
whether related or not (including, without limitation, any material
adverse change in the business, assets or financial position of the
Group after the Base Accounts Date) occurs as a result of which
either of the Parent or (for so long as it is indebted to the Banks)
the Purchaser or the other Obligors (taken as a whole) could
reasonably be expected to be unable to meet their respective
obligations under this agreement to the Agent or any Bank,
the Agent, on behalf of the Banks, may by notice to the Borrowers given
where the Event of Default is continuing:
(i) cancel and terminate its obligations and the obligations of the
Banks in respect of the Facilities and this agreement (including
their respective Commitments); and/or
(ii) declare all or any of the Advances, Tranches and any other sums
(whether of principal, interest or otherwise and whether of a
certain or contingent nature) in respect of the Facilities then
remaining outstanding and not yet due to be immediately due and
payable; and/or
(iii) declare all or any of the Advances, Tranches and any other sums
(whether of principal, interest or otherwise and whether of a
certain or contingent nature) in respect of the Facilities then
remaining outstanding
59
and not yet due to be due and payable upon demand being made by the
Agent at any time thereafter, whereupon:
(A) (if (i) applies) such obligations shall be cancelled and
terminated;
(B) (if (ii) applies) such Advances, Tranches and other sums
shall become immediately due and payable; and
(C) (if (iii) applies) the Agent may by written notice declare
such Advances, Tranches and other sums to be due and payable
on demand being made by the Agent so that, at any time
thereafter, the Agent may (if so instructed by the Majority
Banks) by written notice to the Borrowers call for repayment
of all or any of such Advances, Tranches and other sums on
such date in such notice (whereupon the same shall become due
and payable on such date) or withdraw its declaration with
effect from such date as it may specify in such notice.
11.2 TARGET AND SUBSIDIARIES
Until the expiry of a period of three months following the Purchaser
acquiring ownership of more than 50% of the issued share capital of the
Target the Event of Default contained in paragraph 11.1(e)(ii) (cross-
default) above shall not apply to any or all of Target and its
Subsidiaries where the relevant agreements were entered into before the
completion of the Merger
11.3 DELAY
Without limiting the generality of clause 15.1, no delay of whatever
length by the Agent or any Bank in giving written notice or in exercising
its rights under clause 11.1 shall operate as a waiver.
11.4 INTEREST
Interest shall be charged on all sums due under the Facilities at the
relevant rate provided for under this agreement until such sums have been
paid in full.
12. COSTS, EXPENSES AND INDEMNITIES
12.1 COSTS AND EXPENSES
The Parent will from time to time on demand of the Agent (whether or not
it utilises the Facility available under this agreement) reimburse the
Agent and the Arranger for:
(a) all reasonable costs and expenses (including legal fees and printing
costs and other out-of-pocket expenses) together with VAT thereon
properly incurred by the Agent and the Arranger in connection with
the preparation, negotiation and documentation of this agreement,
and any other Transaction Document and any documents executed
pursuant
60
hereto or in connection herewith (all of which are together the
"DOCUMENTS") and/or any amendment, variation or novation of,
supplement to, or waiver in respect of, this agreement; and
(b) all costs and expenses (including legal fees) together with VAT
thereon incurred by the Agent, the Arranger or any Bank in
maintaining, preserving, protecting, enforcing or attempting to
enforce any rights under the Documents; and
(c) any stamp, documentary, registration or similar tax payable in
connection with the entry into, registration, performance,
enforcement or admissibility in evidence of any of the Documents,
and shall indemnify the Banks, the Arranger and the Agent against
any liability with respect to or resulting from any failure to pay
or any delay in paying any such tax except to the extent that the
failure or delay is the result of the negligence or wilful default
of the Bank, Arranger or Agent (as the case may be).
12.2 INDEMNITY BY THE PARENT
(a) The Parent shall indemnify the Agent, the Arranger and each Bank on
a full and unqualified indemnity basis, without prejudice to any of
their other rights hereunder, against any loss (excluding loss of
margin but without prejudice to the Bank's right to recover margin
against the relevant Borrower under clause 2.8) cost or expense
(including legal expenses on a full indemnity basis and loss of
profit) or liability which the Agent, the Arranger or any Bank shall
certify as sustained or incurred by it as a consequence of:
(i) the occurrence of any Event of Default;
(ii) any default in payment by a Borrower of any sum hereunder
when due;
(iii) any repayment or prepayment of any Advance, Tranche or unpaid
sum hereunder otherwise than on the Interest Payment Date
applicable thereto;
(iv) any cancellation of any part of any Facility (other than any
loss of profit sustained by the Agent, the Arranger or any
Bank as a consequence of any cancellation permitted in
accordance with the terms and conditions of this agreement);
(v) an Advance or Tranche not being made available to a Borrower
for any reason unless caused by the failure of the Agent or a
Bank to perform its obligations under this agreement after a
Utilisation Request has been given,
including in any such case but not limited to any loss or expense
sustained or incurred in making available, maintaining or funding
any amount utilised under either Facility or part thereof or in
liquidating or
61
re-employing during the relevant Interest Period deposits acquired
to make available, maintain or fund the relevant Facility or part
thereof.
(b) Each of the indemnities in clause 12.2 (and that in clause 15.7(b))
constitutes a separate and independent obligation from the other
obligations in this agreement, shall give rise to a separate and
independent cause of action, shall apply irrespective of any time or
indulgence granted by any of the Agent, the Arranger or the Banks
and shall continue in full force and effect notwithstanding any
order, judgment, claim or proof for a liquidated amount in respect
of any sum due under this agreement or any other judgment or order.
12.3 INDEMNITY BY ▇▇▇▇▇
If the Parent fails to perform any of its obligations under clause 12.1,
each Bank shall, (i) in the proportion borne by its Outstandings to the
aggregate of the Outstandings of all the Banks; or (ii) if there are no
Outstandings at the time as may be specified by the Agent in the
proportion borne by its Commitment to the Total Commitments of all Banks;
or (iii) if there are no Outstandings and the Total Commitments have been
cancelled at such time, in the proportion borne by its Commitment to the
Total Commitments of all Banks immediately before they were cancelled,
indemnify the Agent and the Arrangers against any loss incurred by any of
them as a result of such failure and the Parent shall promptly reimburse
each Bank for any payment made by it pursuant to this clause 12.3.
13. FEES
13.1 AGENCY FEES
The Parent shall pay to the Agent, for the Agent's own account, the agency
fees specified in the Agent's Fees Letter at the times and in the amounts
specified in such letter.
13.2 UNDERWRITING FEE
The Parent shall pay to the Arranger, for the Arranger's own account, the
underwriting fee specified in the Arranger's Fees Letter.
13.3 SYNDICATION FEE
The Parent shall pay to the Arranger, for the Arranger's own account, the
syndication fee specified in the Arranger's Fees Letter.
13.4 COMMITMENT FEE
The Parent shall from the Effective Date until the Termination Date pay to
the Agent for the account of the Banks in proportion to the unutilised
Commitments a commitment fee of 50% (fifty per cent) of the Margin at the
relevant time calculated on a daily basis on the aggregate of the undrawn
amounts of the Revolving Advances Facility and the Term Loan Facility
Amount. The commitment fee shall be calculated and payable quarterly in
arrears and on the Termination Date. The first such payment date shall be
the date falling 3 months
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after the date of this agreement. For the purposes of this clause, the
Dollar Equivalent of an Optional Currency shall be used in calculating the
undrawn amounts of the relevant Facilities on the relevant date.
14. NOTICES
14.1 SERVICE
Unless otherwise specified in the agreement, any notice to be served in
connection with this agreement shall be in writing and shall be delivered:
(a) In the case of the Agent and/or the Arranger to: Lloyds Bank Plc,
Bank House, Wine Street, Bristol BS1 2AN Attn: Loans Administration
Department.
(b) In the case of the Parent to: The Sage Group PLC, Sage House, Benton
Park Road, Newcastle upon Tyne NE7 7LZ Attn: Company Secretary.
(c) In the case of the Purchaser to:
C/o The Sage Group PLC
Sage House
Benton Park Road
Newcastle upon Tyne
NE7 7LZ
Attn: Company Secretary
(d) In the case of the Banks to their respective Facility Offices marked
for the attention of the bank official nominated in schedule 1 or in
the Transfer Certificate,
or to such other address, telex and/or fax number or marked for such other
attention as it may have by at least seven days' prior notice notified the
other parties hereto.
14.2 DEEMED DELIVERY
Notices under this agreement may be delivered by hand or by post or sent
by telex or facsimile transmission and if by post shall be deemed to be
delivered to the relevant party at 10.00 am London time two Business Days
next following the date of posting and if by telex or facsimile
transmission shall be deemed to be delivered on conclusion of the relevant
transmission provided (in the case of telex) the correct answerback is
received and (in the case of fax) that the transaction is effected on a
Business Day between the hours of 9.00am and 5.00pm and a copy shall be
delivered by hand or by post within 48 hours of the transmission of the
fax. In proving such service by post, it shall be sufficient to show that
the letter containing the notice was properly addressed and posted (with
postage prepaid).
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15. MISCELLANEOUS
15.1 WAIVER
No failure or delay on the part of the Agent, the Arranger or any Bank to
exercise its rights, powers or remedies provided by law or under this
agreement, shall operate as a waiver thereof nor shall any single exercise
or any partial exercise or waiver of any such right, power or remedy
exclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The rights, powers and remedies provided herein
are cumulative and not exclusive of any rights, powers and remedies
provided by law.
15.2 GOVERNING LAW
This agreement shall be governed by, and shall be construed and
interpreted in accordance with and be deemed a contract under the laws of
England and Wales.
15.3 JURISDICTION AND SUBMISSION
(a) Each Borrower hereto irrevocably agrees for the benefit of the
Agent, the Arranger and each of the Banks 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, for such purposes, irrevocably
submits to the jurisdiction of such courts.
(b) Each Borrower irrevocably waives any objection which it might now or
hereafter have to the courts referred to in Clause 15.3(a) being
nominated as the forum 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 agrees not to claim that any such
court is not a convenient or appropriate forum.
(c) The Purchaser agrees that the process by which any suit, action or
proceeding is begun in relation to this Agreement may be served on
it by being delivered to the Parent at the address of the Parent
specified from time to time for the purposes of Clause 14.1. If the
appointment of the person mentioned in this Clause 15.3(c) ceases to
be effective, the Purchaser shall immediately appoint a further
person in England to accept service of process on its behalf in
England and, failing such appointment within 15 days, the Agent
shall be entitled to appoint such a person by notice to the
Purchaser. Nothing contained herein shall affect the right to serve
process in any other manner permitted by law.
(d) The submission to the jurisdiction of the courts referred to in
Clause 15.3(a) shall not (and shall not be construed so as to) limit
the right of the Agent, the Arranger and the Banks or any of them to
take proceedings against any Borrower in any other court of
competent jurisdiction nor shall the taking of proceedings in any
one or more jurisdictions preclude the taking of proceedings in any
other jurisdiction
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(whether concurrently or not) if and to the extent permitted by
applicable law.
(e) Each Borrower hereby consents generally in respect of any legal
action or proceeding arising out of or in connection with this
Agreement to the giving of any relief or the issue of any process in
connection with such action or proceeding including, without
limitation, the making, enforcement or execution against any
property whatsoever (irrespective of its use or intended use) of any
order or judgment which may be made or given in such action or
proceeding.
(f) To the extent that any Borrower may in any jurisdiction claim for
itself or its assets immunity from suit, execution, attachment
(whether in aid of execution, before judgment or otherwise) or other
legal process and to the extent that in any such jurisdiction there
may be attributed to itself or its assets such immunity (whether or
not claimed), such Borrower hereby irrevocably agrees not to claim
and hereby irrevocably waives such immunity to the full extent
permitted by the laws of such jurisdiction.
15.4 ACCOUNTS
Accounts maintained by the Agent or any Bank in connection with this
agreement shall (in the absence of manifest error) be conclusive evidence
of the matters to which they relate. All certificates or determinations
given or made by the Agent or any Bank hereunder or in connection herewith
shall be conclusive and binding upon the Borrowers (in the absence of
manifest error).
15.5 SCHEDULES
The schedules to this agreement shall be construed as forming an integral
part of this agreement and (unless otherwise stated) words and expressions
defined herein shall bear the same respective meanings in the schedules.
15.6 ILLEGALITY
If at any time any provision hereof is or becomes illegal, invalid or
unenforceable in any respect under the laws of any jurisdiction neither
the legality, validity or enforceability of the remaining provisions
hereof nor the legality, validity or enforceability of such provision
under the laws of any other jurisdictions shall in any way be affected or
impaired thereby.
15.7 CURRENCY
(a) US Dollars is the currency of account and payment for all sums at
any time due from the Borrowers under or in connection with this
Agreement (including damages) Provided that: (i) each payment in
respect of costs and expenses shall be made in the currency in which
the same were incurred; (ii) each payment in respect of fees payable
under or pursuant to clause 13 shall be made in the currency in
which the same are expressed to be payable thereunder; (iii) each
repayment of an Advance or Tranche or a part thereof shall be made
in the currency in
65
which such Advance or Tranche is denominated at the time of that
repayment; and (iv) each payment of interest shall be made in the
currency in which the sum in respect of which such interest is
payable is denominated.
(b) Any amount received or recovered by any Bank or by the Agent or the
Arranger in respect of any sum expressed to be due to it from a
Borrower under this agreement in a currency other than the currency
(the "contractual currency") in which such sum is so expressed to be
due (whether as a result of, or as a result of the enforcement of,
any judgment or order of a court or tribunal of any jurisdiction,
the winding-up of the relevant Borrower or otherwise) shall only
constitute a discharge to that Borrower to the extent of the amount
of the contractual currency that the recipient is able, in
accordance with its usual practice, to purchase with the amount of
the currency so received or recovered on the date of receipt or
recovery (or, if later, the first date on which such purchase is
practicable). If the amount of the contractual currency so
purchased is less than the amount of the contractual currency so
expressed to be due the relevant Borrower shall indemnify the
recipient against any loss sustained by it as a result, including
the cost of making any such purchase.
15.8 PROVISION OF PAYMENTS
(a) Where a sum is to be paid hereunder to the Agent for the account of
another person, the Agent shall not be obliged (but shall be
entitled) to make the same available to that other person until it
has been able to establish to its satisfaction that it has actually
received such sum, but if it does so, or gives an undertaking to do
so, and it proves to be the case that it had not actually received
the sum it paid out, then the person to whom such sum was so made
available shall on request refund the same to the Agent together
with an amount sufficient to reimburse the Agent for any amount it
may have been required to pay out by way of interest on moneys
borrowed to fund the sum in question during the period beginning on
the due date for payment thereof and ending on the date on which it
receives the same.
(b) The Agent may assume that each Bank on the due date thereof has made
available each amount to be paid by such Bank to the Agent for the
account of or by the direction of the relevant Borrower and may (but
shall not be obliged to) pay, or give an undertaking to pay, to the
relevant Borrower or other person to whose account the payment is to
be made a corresponding amount. To the extent that such Bank does
not so make payment of the relevant amount, the Agent shall be
entitled to recover the relevant amount from such Bank or, failing
such Bank from the relevant Borrower, together with interest thereon
sufficient to compensate the Agent for the cost of funding such
amount for the period up to the date of such recovery.
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15.9 TURNOVER TAXES
The amounts (including, for the avoidance of doubt, interest) stated in
this agreement to be payable by the Borrowers are exclusive of all
turnover taxes (wherever imposed and including with respect to the UK,
without limitation, VAT). Any payment by a Borrower will be made together
with a sum in respect of VAT if such is payable.
15.10 SET-OFF
15.10 Whilst an Event of Default is subsisting, each Borrower authorises each
Bank without prior notice to such Borrower to apply any credit balance
(whether or not then due) to which such Borrower is at any time
beneficially entitled on any account of such Borrower with that Bank in or
towards satisfaction of any sum due and payable from such Borrower to such
Bank hereunder but unpaid; for this purpose, each Bank is authorised to
purchase with the moneys standing to the credit of any such account such
other currencies as may be necessary to effect such application. In
effecting such currency transaction, the applicable rate of exchange shall
be that Bank's spot rate of exchange at 11.00 a.m. on the day such
transaction was effected. No Bank shall be obliged to exercise any right
given to it by this clause 15.10 which shall be without prejudice to and
in addition to any right of set-off, combination of accounts, lien or
other right to which it is at any time otherwise entitled (whether by
operation of law, contract or otherwise).
15.11 EXCESS PAYMENTS
If, at any time, the proportion which any Bank (a "Recovering Bank") has
received or recovered (whether by payment, the exercise of a right of set-
off or combination of accounts or otherwise) in respect of its portion of
any payment (a "relevant payment") to be made under this agreement for
account of such Recovering Bank and one or more other Banks is greater
(the portion of such receipt or recovery giving rise to such excess
proportion being herein called an "excess amount") than the proportion
thereof so received or recovered by the Bank or Banks so receiving or
recovering the smallest proportion thereof, then:
(a) such Recovering Bank shall promptly pay to the Agent an amount equal
to such excess amount;
(b) there shall thereupon fall due from the relevant Borrower to the
Recovering Bank an amount equal to the amount paid out by such
Recovering Bank pursuant to paragraph (a), the amount so due being,
for the purposes hereof, treated as if it were an unpaid part of
such Recovering Bank's portion of such relevant payment; and
(c) the Agent shall treat the amount received by it from such Recovering
Bank pursuant to paragraph (a) as if such amount had been received
by it from the relevant Borrower in respect of such relevant payment
and shall pay the same to the persons entitled thereto (including
such Recovering Bank) pro rata to their respective entitlements
thereto
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Provided that, notwithstanding anything contained herein, a Recovering
Bank which shall have commenced an action or proceeding in any court to
recover sums owing to it pursuant to this Agreement and as a result
thereof, or in connection therewith, shall have received an excess amount
shall not be required to pay any proportion of such excess amount to the
Agent for the account of any Bank which has been notified in advance of
such action or proceeding and has had an opportunity to, but does not,
join in such action or proceeding or commence and diligently prosecute a
separate action or proceeding to enforce its rights in the same or another
court.
15.12 REDISTRIBUTION OF PAYMENTS
If all or a part of a sum received or recovered by a Recovering Bank
becomes repayable and is repaid by such Recovering Bank to the Borrower,
then:
(i) each Bank which has received a share of such sum by reason of the
implementation of clause 15.11 shall, if so requested by the Agent,
promptly pay to the Agent for account of such Recovering Bank an
amount equal to its share of such sum;
(ii) as between the relevant Borrower and such Bank the amount so paid
shall be treated as if it had not been received or recovered by
such Bank; and
(iii) the Agent shall determine whether, as a result of the
implementation of the foregoing provisions of this clause 15.12,
circumstances exist which necessitate the implementation of the
provisions contained in clause 15.11.
15.13 AMENDMENTS
(a) In the event that:
(i) there is introduced into the country of origin of any
currency another currency (the "new currency") on the basis
that the new currency may be used for the payment of debts in
such country in parallel with such currency, each Borrower
shall have the option, by prior written notice to the Agent,
to elect that; or
(ii) any currency ceases to be the lawful currency for the time
being of its country of origin,
any amount in respect of principal, interest or any other sum
payable pursuant to this agreement denominated in such currency
shall be converted to the new currency at the prescribed conversion
rate then prevailing and all payments in respect thereof shall
thereafter be made in such new currency.
(b) Without prejudice to clause 15.13(a), the Borrowers, the Agent, the
Arrangers and the Banks will negotiate in good faith in order to
agree any amendments to this agreement or any other document entered
into
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pursuant to this agreement in order to ensure: (a) that the terms of
this agreement or any other such document reflect market practice at
such time with regard to the introduction of monetary union within
the European Communities; and (b) in so far as it is reasonably
possible and without prejudice to market practice at such time, that
the parties to this agreement shall be left in no worse position
than they might otherwise have been had either of the events
described in clause 15.13(a) not occurred.
(c) The parties hereto agree that the occurrence of economic and
monetary union within the European Union or part(s) of it and/or any
event associated with it and/or the introduction of the new currency
into the United Kingdom will not of itself result in the discharge,
cancellation, rescission or termination in whole or in part of this
agreement, nor will it of itself give any party to this agreement
the right to discharge, cancel, rescind, terminate or vary any
Finance Document (save as provided in this clause 15.13) or give
rise to an Event of Default.
16. ASSIGNMENT AND TRANSFER AND FACILITY OFFICES
16.1 SUCCESSORS, ASSIGNS AND TRANSFEREES
This agreement shall be binding upon and enure to the benefit of each of
the parties to it, any Transferee which becomes a party to it pursuant to
a Transfer Certificate and each of their respective successors and
permitted assigns.
16.2 RESTRICTION ON ASSIGNMENT AND TRANSFER BY ▇▇▇▇▇▇▇▇
The Borrowers shall not be entitled to assign or transfer all or any of
their respective rights, benefits and obligations under this agreement.
16.3 ASSIGNMENT OR TRANSFER BY A BANK
(a) Any Bank may at any time with the prior written consent of the
Parent (such consent not to be unreasonably withheld or delayed)
assign all or any of its rights and benefits hereunder and under the
other Finance Documents, or transfer in accordance with clause 16.4
all or any of its rights, benefits and obligations hereunder, to a
Qualifying Bank. All assignments and transfers hereunder shall be
(i) in integral multiples of $2,500,000 or (ii) of the whole of the
assignor or transferor Bank's Commitment. For the purposes of this
clause 16.3, the Parent shall be deemed to have given its consent to
any such assignment or transfer if the Parent shall not have
responded in writing within 10 Business Days of receipt by it of a
request for any such consent.
(b) If any Bank assigns all or any of its rights and benefits under this
agreement in accordance with this clause 16.3 then, unless and until
the assignee has agreed with the other parties to this agreement
that it shall be under the same obligations towards each of them as
it would have been under if it had been an original party to this
agreement, the other parties shall not be obliged to recognise such
assignee as having the
69
rights against each of them which it would have had if it had been
such a party to this agreement.
(c) If any Bank wishes to assign or transfer all or any part of its
Commitment in one Facility then such Bank shall, at the same time,
assign or transfer all or part of the other Facility.
16.4 TRANSFER
If any Bank wishes to transfer all or any of its rights, benefits and
obligations hereunder as contemplated by clause 16.3 then such transfer as
shall be permitted by such clause 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 such Transfer
Certificate and the fifth Business Day following the date of delivery
thereof to the Agent:
(i) to the extent that in such Transfer Certificate the Transferor seeks
to transfer all or part of its rights, benefits and obligations
hereunder and under the Finance Documents, the Borrowers and the
Guarantors, the Arranger, the other Banks and the Transferor shall
each be released from further obligations to the other hereunder
(including the appropriate reduction in the Commitment of the
Transferor) and under the Finance Documents to that extent and their
respective rights against each other shall be cancelled (such
rights, benefits and obligations being referred to as "discharged
rights and obligations");
(ii) each of the Borrowers and the Guarantors and the Transferee party
thereto shall each assume obligations towards each other and acquire
rights against each other which (except as to the identity of the
parties thereto) are identical to the discharged rights and
obligations;
(iii) the Agent, the Arranger, such Transferee and the other Banks 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 an original beneficiary
of the Security Documents as a Bank with the rights and benefits and
obligations acquired and/or assumed by it as a result of such
transfer.
16.5 ADDITIONAL COST TO THE BORROWERS
No Borrower shall, following an assignment or transfer as provided for in
clause 16.3 or 16.4 or a change by a Bank of its Facility Office as
provided for in clause 16.6, be obliged to pay any additional amount
hereunder over what it would otherwise have been obliged to pay hereunder
had such assignment, transfer or change not occurred.
16.6 FACILITY OFFICE
Each Bank shall lend initially through the office of such Bank at the
address specified in Schedule 1 or, as the case may be, in its Transfer
Certificate, and subsequently through any other office of such Bank
selected from time to time by
70
such Bank through which such Bank wishes to make available its Commitment
for the purposes of this agreement. If the office through which a Bank is
making available its Commitment is changed pursuant to this clause 16.6,
such Bank shall notify the Borrowers and the Agent promptly of such
change.
16.7 CONFIDENTIAL INFORMATION
Any confidential information relating to the Group Companies or any of
them which is given to the Arranger and/or a Bank pursuant to this
agreement shall only be used by the Arranger and/or such Bank for the
purposes of this agreement or obtaining advice on its rights hereunder and
shall not be disclosed to any third party without the prior written
consent of the relevant Borrower (such consent not to be unreasonably
withheld), except for disclosure to any actual or prospective Transferee,
to the Bank's or the Arranger's auditors or other advisers or to the
extent required by law or by any court, governmental, administrative or
regulatory authority or organisation having jurisdiction, control or
authority over the Arranger or such Bank or to the extent that the
information is a matter of public knowledge.
16.8 FEE
Any Bank which assigns or transfers all or any part of its rights,
benefits or obligations under this agreement in accordance with this
clause 16 shall pay to the Agent for the account of the Agent alone a fee
of (Pounds)950.
17. THE AGENT, THE ARRANGER AND THE REFERENCE BANKS
17.1 APPOINTMENT OF AGENT
The Arranger and each Bank hereby irrevocably appoints the Agent to act as
its agent for the purposes of this agreement and the other Finance
Documents and authorises the Agent (whether or not by or through employees
or agents) to hold the Finance Documents and to take such action on their
behalf and to exercise such rights, remedies, powers and discretions as
are specifically delegated to the Agent or contemplated by this agreement
and the Finance Documents, together with such powers and discretions as
are reasonably incidental thereto. Subject to clauses 15.8 and 15.11, any
amounts received by the Agent on behalf of the Banks hereunder or under
the Guarantee shall promptly following receipt of the same be distributed
to each of the Banks pro rata in the proportion which each such Bank's
Commitment bears to the aggregate amount of the Commitments of all of the
Banks.
17.2 WAIVER ETC
(a) The Agent may, if previously so authorised in writing by the
Majority Banks (or as expressly authorised by the other provisions
of this agreement) and subject to clause 17.2(b), waive, modify,
vary or otherwise amend or excuse performance of any provision of
the Finance Documents with the written agreement of the Borrowers,
in the case of a modification, variation or amendment. Any such
action so authorised and effected by the Agent shall be promptly
notified to the Banks by the
71
Agent and shall be binding on all the Banks, and the Agent shall be
under no liability whatsoever in respect of such action.
(b) Except with the prior written consent of all the Banks and the
Borrowers or as otherwise contemplated in this agreement or as a
consequence thereof, the Agent shall not be entitled to:
(i) increase or reduce any Bank's Commitment;
(ii) reduce the amount of any payment of principal interest or
other amount payable under this agreement;
(iii) change the currency in which any amount is payable under this
agreement;
(iv) extend the dates for expiry of the Facilities;
(v) release any guarantees or security constituted by the
Security Documents;
(vi) amend the definition of "Majority Banks" in clause 1.1;
(vii) amend this clause 17.
17.3 NO FIDUCIARY RELATIONSHIP
(a) Apart from holding the benefit of guarantees or security constituted
by the Security Documents for the Banks, the Agent shall not by
reason of this agreement, the other Finance Documents or the
transactions referred to thereby, have a fiduciary relationship
with, or be or be deemed to be a trustee of or for, the Arranger,
any Bank or a Group Company. With respect to its own Commitment and
participation in each Advance or Tranche, the Agent shall have the
same rights and powers under this agreement and the Finance
Documents as any other Bank and may exercise the same as though it
were not performing the duties and functions delegated to it under
this agreement and the Finance Documents and the term "Banks" shall,
unless the context otherwise requires, include the Agent in its
individual capacity as a Bank.
(b) It is acknowledged by each of the other parties to this agreement
that the role of the Arranger has been confined solely to arranging
the Facilities in principle and that the Arranger does not and has
not acted as the agent of such parties. The Arranger shall not by
reason of this agreement, the other Finance Documents or the
transactions referred to thereby have a fiduciary relationship with,
or be deemed to be a trustee of or for, any Bank or a Group Company.
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17.4 AGENT NOT REQUIRED TO TAKE CERTAIN ACTION
The Agent shall not be required to request any certificate or opinion
hereunder or to make any enquiry as to the use of the proceeds or
application of any Advance or Tranche unless so required in writing by any
Bank or to make any enquiry as to any default by any Group Company in the
performance or observance of any of the provisions of the Finance
Documents or as to the existence of an Event of Default or any event or
circumstance which with the giving of notice, lapse of time or other
condition would constitute an Event of Default unless the Agent has actual
knowledge thereof or has been notified in writing thereof by a Bank.
17.5 EXCLUSION OF LIABILITY
Neither the Agent nor the Arranger nor any of their respective directors,
officers, employees or agents shall be liable to any Bank for any action
taken or omitted under or in connection with the Finance Documents unless
caused by its or their negligence or wilful misconduct.
17.6 NO RELIANCE
Each Bank acknowledges that it has not relied on any representation
whether written or oral, express or implied made by the Agent or the
Arranger to induce it to enter into this agreement and that it has made
and will continue to make, without reliance on the Agent or the Arranger
and based on such documents and investigations as it considers
appropriate, its own independent appraisal of the financial condition and
affairs of the Group Companies, the Finance Documents and the matters
provided for thereby and has made its own appraisal of the
creditworthiness of the Group Companies. Neither the Agent nor the
Arranger shall have any duty or responsibility, either initially or on a
continuing basis, to provide any Bank with any credit or other information
with respect of the Group Companies whether coming into its possession
before the making of any Advance or Tranche or at any time or times
thereafter, other than such information as is provided to the Agent
hereunder.
17.7 EXTENT OF AGENT'S AND ARRANGER'S RESPONSIBILITY
Neither the Agent nor the Arranger shall have any responsibility to any
Bank on account of the failure of any Group Company to perform its
obligations under the Finance Documents or for the financial condition of
the Group Companies or for the completeness or accuracy of any statements,
representations or warranties (whether oral or in writing) in or by
reference to this agreement or any document delivered under this agreement
or for the execution, effectiveness, genuineness, validity,
enforceability, admissibility in evidence or sufficiency of the Finance
Documents or of any certificate, report or other document executed or
delivered thereunder or otherwise in connection therewith or its
negotiation, or for the collectability of any amounts under the Finance
Documents or (in the case of the Agent) for acting (or, as the case may
be, refraining from acting) in accordance with the instructions of the
Majority Banks. The Agent and the Arranger shall be entitled to rely on
any communication, instrument or document reasonably believed by it to be
genuine and correct and to have been signed or sent by the proper person
or persons and shall be entitled to rely as to legal or other
73
professional matters on opinions and statements of any legal or
professional advisers selected or approved by it.
17.8 NO LIABILITY TO ACCOUNT
The Agent and the Arranger may, without any liability to account to the
Banks, accept deposits from, lend money to, and generally engage in any
kind of banking or trust business with, any Group Company or any of the
Banks as if it was not the Agent or the Arranger (as the case may be).
17.9 INDEMNITY
(a) Each Bank shall reimburse the Agent (rateably in accordance with its
Commitment), to the extent the Agent is not reimbursed by the
Borrowers upon demand, for all charges and expenses incurred by the
Agent and/or in contemplation of the enforcement of, or the
preservation of any rights under, or in carrying out its duties
under the Finance Documents including (in each case) the fees and
expenses of legal or other professional advisers. Each Bank shall
indemnify the Agent (rateably in accordance with its Commitment)
against all liabilities, damages, costs and claims whatsoever
incurred by the Agent in connection with the Finance Documents or
the exercise of its rights in the performance of its duties
thereunder or any action taken or omitted by the Agent under the
Finance Documents, unless such liabilities, damages, costs or claims
arise from the Agent's own negligence or wilful misconduct.
(b) A Bank's proportion of liability set out in clause 17.9(a) above
will be the proportion which the Bank's Commitment bears to the
Total Commitments at the date of demand or, if the Total Commitments
have been cancelled, bore to the Total Commitments immediately
before being cancelled.
17.10 RETIREMENT OF AGENT
(a) The Agent may retire from its appointment as Agent having given to
the Borrowers and each of the Banks not less than 30 days' notice of
its intention to do so provided that no such retirement shall take
effect unless there has been appointed as a successor agent with the
prior written consent of the Borrowers (which shall not be
unreasonably withheld) either:
(i) a Bank nominated by the Majority Banks or, failing such a
nomination,
(ii) any reputable and experienced bank or financial institution
nominated by the Agent.
(b) If no appointment of a successor agent has been made during the
period of notice given by the Agent under clause 17.10(a) or if
either Borrower withholds consent to a successor, whether nominated
by the Majority
74
Banks or by the Agent, the Agent after consultation with the Banks
will appoint as successor a Qualifying Bank.
(c) Upon any such successor as aforesaid being appointed, the retiring
Agent shall be discharged from any further obligation under this
agreement and its successor and each of the other parties to this
agreement shall have the same rights and obligations among
themselves as they would have had if such successor had been a party
to this agreement.
(d) Upon its retirement becoming effective, this clause 17 (including,
without limitation, the indemnity contained in clause 17.9) shall
continue to benefit the retiring Agent in respect of any action
taken or not taken by it under or in connection with the Finance
Documents while it was the Agent.
17.11 REFERENCE BANKS
In the event that the Commitment of any Reference Bank hereunder ceases in
accordance with this agreement and such Reference Bank no longer
participates in any Advance or Tranche or a Reference Bank assigns or
transfers the whole of its rights and obligations under this agreement, it
shall cease to be a Reference Bank and the Agent shall, if so instructed
by the Majority Banks, appoint another Bank to replace such Bank as a
Reference Bank after consulting with the Parent.
17.12 AGENT'S COSTS
The Parent shall, from time to time on demand of the Agent, reimburse the
Agent for its own account at such daily and/or hourly rates as the Agent
shall from time to time determine, acting reasonably, for the cost of
utilising its management time and/or other resources in connection with
taking all such steps or other action which the Agent may deem
appropriate, which the Majority Banks require or which either Borrower
requests in connection with:
(a) the granting or proposed granting of any waiver or consent requested
by a Borrower hereunder or under any Transaction Document;
(b) any amendment or proposed amendment hereto or to any Transaction
Document;
(c) any breach by a Borrower of its obligations hereunder or under any
Transaction Document or any investigation as to whether any such
breach may have occurred consequent upon notice given by the
relevant Borrower to the Agent where it could be reasonably
concluded from the relevant notice that the relevant Borrower may
have breached its obligations hereunder or under any Transaction
Document; and
(d) the occurrence of any event which is or may become an Event of
Default, any event or circumstance notified pursuant to clause
10.2(e) or consequent upon any event or circumstance otherwise
notified by the relevant Borrower to the Agent where it could be
reasonably concluded
75
from the relevant notice that the Borrower may have breached its
obligations hereunder or under any Transaction Document; and
(e) the release of any Guarantor from the Guarantee.
17.13 AGENCY AND SYNDICATION DIVISION
In acting as Agent and Arranger for the Banks, that division of the Agent
or the Arranger (as the case may be) which has responsibility for agency,
arranging and syndication of this agreement shall be treated as a separate
entity from any other of the divisions of the Agent or the Arranger (as
the case may be) or its subsidiaries and, without detracting from the
generality of the foregoing, in the event that any of the Agent's or the
Arranger's divisions (including the divisions which have responsibility
for agency, arranging and syndication of this agreement) or similar units
or subsidiaries should act for either Borrower in any capacity whether as
bankers or otherwise in relation to any other matter, any information
given by either Borrower to such divisions, similar units or subsidiaries
shall be treated as confidential and the Agent or (as the case may be) the
Arranger shall as between itself and the Banks not be obliged to disclose
the same to any Bank or any other person.
17.14 NO REQUIREMENT TO DISCLOSE
Notwithstanding anything to the contrary expressed or implied herein and
without prejudice to the generality of clause 17.13, the Agent shall as
between itself and the Banks not be obliged to disclose to any Bank or
other person any information supplied by a Borrower to it in its capacity
as agent for the Banks which is identified by the relevant Borrower at the
time of supply as being confidential and supplied solely for the purpose
of evaluating in consultation with the Agent whether any waiver or
amendment might be required to any of the provisions contained herein or
in the Finance Documents Provided that nothing in this clause 17.14 shall
apply to any information supplied by the Parent pursuant to clause 10.1.
17.15 AGENT AND ARRANGER NOT DEEMED TO HAVE ACTUAL KNOWLEDGE OR NOTICE OF
CERTAIN MATTERS
For the purposes of this agreement and the Security Documents, neither the
Agent nor the Arranger shall be deemed to have any actual knowledge or
actual notice of the contents of any information obtained by it or
supplied to it by or on behalf of a Borrower other than (in the case of
the Agent) the contents of information obtained by or supplied to it as
agent for the Banks under this agreement and the Security Documents and
which information the Agent is not obliged to keep confidential pursuant
to clause 17.14.
17.16 MEETINGS OF ▇▇▇▇▇
(a) The Agent may at any time in its own discretion convene a meeting of
the Banks.
76
(b) If authorised by a Relevant Instructing Group, the Agent shall at
any time convene a meeting of the Banks.
(c) Whenever the Agent is to convene any such meeting it shall forthwith
give notice in writing to the Banks of the day, time and place
thereof and the nature of the business to be transacted thereat.
(d) For the purpose of this clause 17.16 A "RELEVANT INSTRUCTING GROUP"
means:
(i) before an Advance has been made, a Bank or group of Banks
whose Commitments amount in aggregate to more than 50 per
cent. of all the Commitments;
(ii) after an Advance has been made, a Bank or group of Banks
which are participating to the extent of more than 50 per
cent of the Outstandings.
17.17 CONFLICT OF INTEREST
(a) The Agent may (without limitation to any other provision of this
clause 17) act as agent or trustee or in a fiduciary or other
capacity on behalf of any other group of banks or financial
institutions providing facilities to Group Companies or any
associated company or any such member without regard to the effect
of exercising or omitting to exercise its rights, discretions,
powers and duties in such capacity on the interests of the Banks and
to act or omit to act in such capacity as freely in all respects as
if the Agent had not been appointed to act as agent for the Banks;
(b) The Arranger may (without limitation to any other provision of this
clause 17) act as arranger or in a fiduciary or other capacity on
behalf of any other group of banks or financial institutions
providing facilities to Group Companies or any associated company or
any such member without regard to the effect of exercising or
omitting to exercise its rights, discretions, powers and duties in
such capacity on the interests of the Banks and to act or omit to
act in such capacity as freely in all respects as if the Arranger
were not acting as arranger under this agreement;
(c) Both the Agent and the Arranger may subscribe for, hold or be or
become beneficially entitled to, or dispose of, shares or
securities, or options or other rights to and interests in shares or
securities in any member or members of the Group or any associated
company of any such member (and, in each case, may do so without
liability to account).
18. HEDGING
The Banks acknowledge that the Parent may enter into Hedging Agreements
with Lloyds Bank Plc if, after discussion with Lloyds Bank Plc, the Parent
is of the view that such Hedging Agreements are necessary to reduce to a
level of risk
77
acceptable to the Parent the relevant Borrower's risk of exposure to
increases and fluctuations in the rates of interest and/or currency
payable by the relevant Borrower under this agreement. Further the Banks
acknowledge that as a condition of entering into any such Hedging
Agreements with the Parent Lloyds Bank Plc may take a guarantee from the
Guarantors in respect of all present and future sums, liabilities or
obligations which may from time to time be due, owing or incurred
(actually or contingently) by the Parent to Lloyds Bank Plc under or in
connection with any such Hedging Agreements.
19. RELEASES
If a Guarantor elects to dispense with the laying of accounts and reports
before the company in general meeting in accordance with the provisions of
section 252 of the Companies Act 1985 and the gross assets of any such
Guarantor are at the relevant time less than (Pounds)1,000, the Agent
shall upon receipt of a written request by the Borrowers (and is hereby
authorised by the Banks and the Hedging Bank to) execute a deed of release
in the form or substantially in the form set out in the Guarantee provided
always that all continuing Guarantors consent to such release and confirm
that their respective liabilities as Guarantors shall not be discharged or
otherwise affected as a consequence of such release.
20. COUNTERPARTS
This agreement may be executed in any number of counterparts, all of which
taken together and when delivered to the Agent shall constitute one and
the same instrument. Any party may enter into this agreement by executing
any such counterpart.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.
78
SCHEDULE 1
The Banks and their Commitments
-------------------------------
NAME FACILITY OFFICE REVOLVING LOAN TERM LOAN TOTAL
---- --------------- -------------- --------- -----
COMMITMENT COMMITMENT COMMITMENTS
---------- ---------- -----------
$ $ $
Lloyds PO Box 96 $15,000,000 $218,000,000 $233,000,000
Bank ▇/▇ ▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇
Tel: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇▇▇ ▇▇▇ ▇▇▇▇
Telex:
Attn: ▇. ▇▇▇▇▇▇ Esq
79
SCHEDULE 2
Associated Costs Rate
---------------------
For the purposes of this agreement, the cost of compliance with existing
requirements of the Bank of England in respect of Advances, Tranches or unpaid
sums will be calculated by the Agent in relation to each Advance or Tranche on
the basis of rates to be supplied by each of the Reference Banks by reference to
the circumstances existing on the first day of each Interest Period or (in the
case of the Revolving Advances Facility) Term in respect of such Advance,
Tranche or unpaid sum and, if any such Interest Period or Term exceeds three
months, at three calendar monthly intervals from the first day of such Interest
Period or Term during its duration in accordance with the following formula:
A B + C (B - E) + D (B - F) per cent. per annum
---------------------------
100 - (A+D)
Where:
A is the percentage of eligible liabilities which such Bank is from
time to time required to maintain as an interest free cash deposit
with the Bank of England to comply with cash ratio requirements.
B is the percentage rate per annum at which Sterling deposits are
offered by such Reference Bank, in accordance with its normal
practice, for the relevant Interest Period or Term (or remainder
thereof) or three months, whichever is the shorter, to a leading
bank in the London Interbank Market at or about 11.00 am in a sum
approximately equal to the amount of the relevant Advance, Tranche
or unpaid sum.
C is the percentage of eligible liabilities which such Bank is from
time to time required by the Bank of England to maintain as secured
money with members of the London Discount Market Association
("LDMA") and/or as secured call money with money brokers and gilt
edged market makers.
D is the percentage of eligble liabilities which such Reference Bank
is required from time to time to maintain as interest bearing
special deposits with the Bank of England.
E is the percentage rate per annum at which members of the LDMA are
offered Sterling deposits in a sum approximately equal to the amount
of the relevant Advance, Tranche or unpaid sum as a callable fixture
from such Reference Bank as determined in accordance with B above at
or about 11.00 am.
F is the percentage rate per annum payable by the Bank of England to
such Reference Bank on interest bearing special deposits.
80
For the purposes of this Schedule "eligible liabilities" and "special deposits"
shall bear the meanings ascribed to them from time to time by the Bank of
England.
1. The percentages used in A, C and D above shall be those required to be
maintained on the first day of each Interest Period or Term and, in the
case of an Interest Period or Term longer than three months, on the first
day of each three calendar monthly intervals from the date of the Advance
or Tranche.
2. In application of the above formula, A, B, C, D, E and F will be included
in the formula as figures and not as percentages, eg if A is 0.5 per cent.
and B is 12 per cent., AB will be calculated as 0.5 X 12 and not as 0.5
per cent. X 12 per cent.
3. Calculations will be made on the basis of a 365 day year.
4. A negative result obtained by subtracting E from B or F from B shall be
taken as zero.
5. The resulting figure shall be rounded, if necessary, to the nearest whole
multiple of 0.005 per cent. per annum and, if less than 0.005 per cent.
shall be disregarded.
6. Additional amounts calculated in accordance with this Schedule are payable
on the last day of each Interest Period or Term and, additionally, in the
case of a Interest Period or Term in excess of three months, at three
monthly intervals from the date of the Advance or Tranche.
7. The determination of the Associated Costs Rate in relation to any period
shall, in the absence of manifest error, be conclusive and binding on all
of the parties hereto.
8. The Agent may from time to time, after consultation with the Borrowers and
the Banks, determine and notify to all the parties hereto any amendments
or variations which are required to be made to the formula set out above
in order to comply with the existing or future requirements from time to
time imposed by the Bank of England in relation to Advances or Tranches
denominated in Sterling (including, without limitation, any requirements
relating to Sterling primary liquidity) and, any such determination shall,
in the absence of manifest error, be conclusive and binding on all the
parties hereto.
81
SCHEDULE 3
Transfer Certificate
--------------------
To: Lloyds Bank Plc
St George's House
▇/▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Attention: Capital Markets Group
TRANSFER CERTIFICATE
--------------------
relating to the agreement (as the same may have been amended or novated from
time to time the "Facilities Agreement") dated [ ] 1998 whereby a
term loan facility and a revolving advances facility were made available to The
Sage Group PLC and Rose Acquisition Corp. Terms defined in the Facilities
Agreement shall have the same meaning herein.
1. [Transferor] (the "Transferor") confirms the accuracy of the summary of
its Commitment and its participation in the Advances (and Tranches
comprised therein) set out in the Schedule below and requests [Transferee]
(the "Transferee") to accept and procure the transfer to the Transferee of
[the whole/per cent] of such Commitment and its participation in the
Advances (and Tranches comprised therein) by counter-signing 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 16.4 of the Facilities Agreement so as to take effect
in accordance with the terms thereof on [date of transfer] or on such
later date as may be determined in accordance with the terms of such
clause 16.4.
3. The Transferee warrants to the Transferor, the Agent, the Arranger and the
Banks that it has received a copy of the Facilities Agreement and the
other Finance Documents, together with such other information and
documents as it has required in connection with this transaction and that
it has not relied and will not hereafter rely on the Transferor, the
Agent, the Arranger or the Banks to check or enquire on its behalf into
the legality, validity, effectiveness, adequacy, accuracy or completeness
of any such information and further agrees that it has not relied and will
not rely on the Transferor, the Agent, the Arranger or the Banks to assess
or keep under review on its behalf the financial condition,
creditworthiness, condition, affairs, status or nature of any of the
Borrowers, the Guarantors, the other Group Companies or any other person.
82
4. The Transferee hereby undertakes with the Transferor 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. Neither the Transferor, the Agent, the Arranger nor any of the Banks has
made or makes any representation or warranty whether written or oral,
express or implied or assumes any responsibility with respect to the
legality, validity, effectiveness, adequacy or enforceability of the
Facilities Agreement or the other Finance Documents and assumes no
responsibility for the financial condition of the Borrowers, the
Guarantors, the other Group Companies or any other person or for the
performance and observance by the Borrowers, the Guarantors, the other
Group Companies or any other person of any of their obligations under the
Facilities Agreement or the Finance Documents or any document relating
thereto and any and all such conditions and warranties, whether express or
implied by law or otherwise, are hereby excluded.
6. The Transferor hereby gives notice to the Transferee that the Transferor
is under no obligation to repurchase all or any part of the rights and
obligations hereby transferred at any time nor to support any losses
directly or indirectly incurred or suffered by the Transferee for any
reason whatsoever. The Transferee hereby acknowledges the absence of any
such obligation.
7. The Transferee represents and warrants that it is a Qualifying Bank.
8. This Transfer Certificate shall be governed by and construed in accordance
with English law and the provisions of clause 15 of the Facilities
Agreement shall (as they affect or either Borrower or any Guarantor) apply
with respect to any agreement arising in consequence of this Transfer
Certificate.
Note:
----
1. No transfer of part of a Bank's Commitment shall be effective unless the
amount of the Commitment expressed to be transferred is the whole thereof
or otherwise an amount of not less than $[ ] or, if more, an
integral multiple of $[ ].
2. Banks and future Transferees are advised not to employ Transfer
Certificates or otherwise to assign or transfer interests in the
Facilities Agreement without first ensuring that the transaction complies
with all applicable laws and regulations, including the Financial Services
Act, 1986 and regulations made thereunder.
83
THE SCHEDULE
------------
(the Transferor's original commitment and participation)
--------------------------------------------------------
Term Loan Term Loan: Participation in Term Loan
--------- ---------- ---------------------------
Commitment: Total Advances/ Advances/Tranches Outstanding
----------- --------------- -----------------------------
Undrawn Portion Tranches Outstanding
--------------- --------------------
[ ] [ ] [ ]
(the Transferee's participation)
------------------------------
Percentage of Commitment transferred: [ ]%.
Transfer Date
-------------
[ ] 19
Revolving Advances Revolving Advances: Participation in
------------------ ------------------- ----------------
Commitment: Total Advances Revolving Advances
----------- -------------- ------------------
Undrawn Portion Outstanding Outstanding
--------------- ----------- -----------
[ ] [ ] [ ]
(the Transferee's participation)
--------------------------------
Percentage of Commitment transfer: [ ]%
Transfer Date
-------------
[ ] 19
In witness whereof this Transfer Certificate has been executed on behalf of the
Transferor and the Transferee.
By ............ By ................
For: [Transferor] For: [Transferee]
Date: Date:
Address:
Fax:
Telephone:
Attention:
84
Agent
-----
Agreed for and on behalf of itself as Agent and the other parties to the
Facilities Agreement.
By ......................
Date:
Arranger
--------
By ......................
Date:
85
SCHEDULE 4
PART I
------
Form of Drawdown Utilisation Request - Term Loan Facility
---------------------------------------------------------
To: Lloyds Bank Plc (as Agent)
From: [The Sage Group PLC [Rose Acquisition Corp.]
Dated:
Dear Sirs,
Facilities Agreement dated [ ] 1998
-------------------------------------------------
1. We refer to the facilities agreement dated [ ] 1998 and made
between The Sage Group PLC and [Rose Acquisition Corp.] as Borrowers (each
a "Borrower"), the banks and financial institutions parties thereto from
time to time (the "Banks"), Lloyds Bank Plc as arranger (the "Arranger")
and Lloyds Bank Plc as agent (the "Agent"), as the same has been amended
and novated from time to time (the "Facilities Agreement"). Terms defined
in the Facilities Agreement shall bear the same meaning herein.
2. We hereby give you irrevocable notice that we, as a Borrower, wish the
Banks to make an Advance pursuant to the Term Loan Facility under the
Facilities Agreement, as follows:
(i) Utilisation Date:
(ii) Requested Amount in Sterling:
(iii) Requested Amount in Optional Currency:
(iv) First Interest Period (subject to clause 2.4):
3. We request that the Advance be divided into the following Tranches each
having the Interest Period and being denominated in currencies set out
below:
Tranche Tranche Tranche
------- ------- -------
No 1 No 2 No 3
---- ---- -------
(i) Amount:
(ii) Interest Period:
(iii) Currency
4. (A) Maximum amount to be drawndown on the Tender Offer Closing Date
shall be calculated as follows:
86
(a) An amount, in sterling, being the amount outstanding under the
Facility Agreement between the Parent and, among others,
Lloyds Bank Plc dated 25th February 1997.
(b) An amount, in US dollars, being the difference between the
total consideration payable by the Purchaser under the Tender
Offer and the net proceeds received by the Parent under the
Vendor Placing Agreement converted into US dollars.
(B) The amount to be received by the Company under the Vendor Placing
must not be less than (Pounds)70,000,000.
5. The account to which the proceeds of the Utilisation are to be sent, is:
6. We confirm that, at the date hereof, the Repeated Representations are true
and correct and will remain so at the proposed Utilisation Date, that no
Event of Default has occurred and is continuing or would occur as a result
of the proposed Utilisation nor will an Event of Default occur as a result
of the proposed Utilisation.
Yours faithfully,
___________________
For and on behalf of
[name of relevant Borrower]
87
SCHEDULE 4
PART II
-------
Form of Drawdown Utilisation Request - Revolving Advances Facility
------------------------------------------------------------------
To: Lloyds Bank Plc (as Agent)
From: The Sage Group PLC
Dated:
Dear Sirs,
Facilities Agreement dated [ ] 1998
--------------------------------------------------
1. We refer to the facilities agreement dated [ ] 1998 and made
between ourselves and Rose Acquisition Corp. as Borrowers, the banks and
financial institutions parties thereto from time to time (the "Banks"),
Lloyds Bank Plc as arranger (the "Arranger") and Lloyds Bank Plc as agent
(the "Agent"), as the same has been amended and novated from time to time
(the "Facilities Agreement"). Terms defined in the Facilities Agreement
shall bear the same meaning herein.
2. We hereby give you irrevocable notice that we wish to utilise the
Revolving Advances Facility as follows:
(i) Utilisation Date:
(ii) Requested Amounts in Sterling:
(iii) Requested Amounts in Optional Currency:
(iv) Term (subject to clause 2.4):
3. The account to which the proceeds of the Utilisation are to be sent, is:
4. We confirm that, at the date hereof, the Repeated Representations are true
and correct and will remain so at the proposed Utilisation Date, that no
Event of Default has occurred and is continuing or would occur as a result
of the proposed Utilisation nor will an Event of Default occur as a result
of the proposed Utilisation.
Yours faithfully,
__________________
For and on behalf of
The Sage Group PLC
88
SCHEDULE 4
PART III
--------
Form of Tranche Utilisation Request - Term Loan Facility
To: Lloyds Bank Plc (as Agent)
From: [name of relevant Borrower]
Dated: ........January 1998
Dear Sirs
FACILITIES AGREEMENT DATED [ ] 1998
---------------------------------------------------
1. We refer to the facilities agreement dated [ ] 1997 and made
between The Sage Group PLC and Rose Acquisition Corp. as borrowers, Lloyds
Bank Capital Markets as agent (the "AGENT") and the banks and financial
institutions parties thereto from time to time (the "BANKS"), as the same
has been amended and novated from time to time (the "FACILITIES
AGREEMENT"). Terms defined in the Facilities Agreement shall bear the
same meaning herein.
2. [We advise that the following relevant Tranche(s) mature(s) on the
Utilisation Date referred to in paragraph 3 below and that we wish to
subdivide or consolidate or convert the relevant Tranche(s) in accordance
with clause 2.3 of the Facilities Agreement by making a Tranche
Utilisation as described in paragraph 3 below.
Details of Relevant Tranche(s):
-------------------------------
Relevant Relevant Relevant
Tranche No 1 Tranche No 2 Tranche No 3
(i) Amount:
(ii) Currency:]
[We advise that we wish that the Advance of [amount] made on [ ]
/Tranche(s) No(s) [ ] be divided into the Tranche(s) set out in
paragraph 3 below.]
3. We hereby give you notice that we wish to make a Tranche Utilisation as
follows:
Details of Relevant Tranche(s):
-------------------------------
(i) Utilisation Date:
Relevant Relevant Relevant
Tranche No 1 Tranche No 2 Tranche No 3
(ii) Amount:
89
(iii) Interest Period:
(iv) Currency:
4. We confirm that, at the date hereof, the Repeated Representations are true
and correct and will remain so at the proposed Utilisation Date, that no
Event of Default has occurred and is continuing or would occur as a result
of the proposed Utilisation nor will an Event of Default occur as a result
of the proposed Utilisation.
Yours faithfully
_______________________
For and on behalf of
[relevant Borrower]
90
SCHEDULE 5
Conditions Precedent
--------------------
PART I
------
1. The Facilities Agreement
------------------------
This agreement duly executed by each of the parties hereto.
2. Constitutional Documents of the Parent
--------------------------------------
Certified Copies of:
(a) the Certificate of Incorporation of the Parent and each Certificate
of Incorporation on Change of Name (if any); and
(b) the Memorandum and Articles of Association of the Parent.
3. Constitutional Documents of Guarantors
--------------------------------------
Certified Copies of:
(a) the Certificate of Incorporation of each Guarantor and each
Certificate of Incorporation on Change of Name; and
(b) the Memorandum and Articles of Association of each Guarantor.
4. Constitutional Documents of Purchaser
-------------------------------------
(a) Certified Copy of Charter and By-Laws;
(b) evidence in form satisfactory to the Agent that the Purchaser is a
wholly owned Subsidiary of the Parent.
5. Board Resolutions of Parent and the Purchaser
----------------------------------------------
Certified Copies of extracts from resolutions of the board of directors of
the Parent and the Purchaser approving the acceptance of this agreement
and the utilisation of the Facilities, the execution and delivery by the
Parent and the Purchaser of the Transaction Documents to which either of
them is to be a party (as the case may be), and the performance of the
transactions contemplated thereby, and authorising a person or persons
(specified by name or office) to execute, on behalf of the Parent and the
Purchaser (as the case may be), the Transaction Documents to which either
of them is a party and any other notices or documents to be given or
delivered by it thereunder or in connection with them.
91
6. Secretarial Certificates of Parent and the Purchaser
-----------------------------------------------------
A certificate of the secretary of the Parent and the Purchaser, setting
out the names, offices and signatures of the persons referred to in 5 and
6 above.
7. Board Resolutions of Guarantors
-------------------------------
Certified Copies of extracts from resolutions of each Guarantor's board of
directors and from resolutions of its shareholders, approving the
execution and delivery by such Guarantor of the Transaction Documents to
which it is to be a party and the performance of its obligations
thereunder and authorising a person or persons (specified by name or
office) to execute the same on behalf of such Guarantor and any other
notices or documents to be given or delivered by it thereunder.
8. Secretarial Certificates of Guarantors
--------------------------------------
A certificate of the secretary of each Guarantor, setting out the names,
offices and signatures of the persons referred to in 7 above.
9. No breach of powers
-------------------
A certificate addressed to the Agent signed by each of the secretaries of
the Parent, each Guarantor and the Purchaser, certifying (without personal
liability save where the certificate is given fraudulently or with intent
to mislead or deceive) that the entry into and performance by it of those
Transaction Documents to which it is to be party and (in the case of the
Parent and the Purchaser) the utilisation of the Facilities is within its
corporate powers and have been duly approved by all necessary corporate
action and will not infringe any limitation or restriction upon its powers
or authorities or of its respective directors or other officers under its
Memorandum and Articles of Association (or Charter and By-Laws as the case
may be).
10. Guarantee
---------
The Guarantee duly executed by each Guarantor.
11. Acquisition
-----------
(a) the Merger Agreement;
(b) a copy of the Announcement;
(c) a certificate from a duly authorised director of the Parent
certifying that the Merger Agreement and the Announcement sets out
all material terms of the Tender Offer;
(d) a certified copy of the Vendor Placing Agreement executed by both
parties.
92
12. Fees
----
Payment of the fees and expenses referred to in clause 13 of this
agreement expressed to be payable prior to or upon signing of this
agreement.
13. Encumbrances
------------
Evidence that any Encumbrances (other than Permitted Encumbrances)
affecting the property, undertaking, and assets of Group Companies have
been released.
14. Syndication Confirmation Letter
-------------------------------
The Syndication Confirmation Letter.
15. Legal Opinions
--------------
(a) A legal opinion from the solicitors to the Agent relating to the
legality, validity and enforceability of this Agreement.
(b) A legal opinion from ▇▇▇▇▇▇▇ ▇▇▇▇, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ relating to
the Facility Agreement.
93
SCHEDULE 5
PART II (Tender Offer Closing Date)
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(Section A)
1. Acquisition documents
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(a) a copy of the Offer to Purchase and all related documents delivered
to shareholders of the Target in connection with the Tender Offer.
(b) a certificate from a duly authorised director of the Borrower
containing the matters set out in Section B below.
(c) the Option Agreement duly executed by the parties.
(d) certificates from the depositary and a duly authorised director of
the Borrower confirming that valid tenders had been received and
not, where permitted, withdrawn in respect of not less than 50% of
the Target's shares (or such lesser amount as the Bank may have
previously agreed in writing); and
(e) (i) a certificate from the depositary, in form satisfactory to the
Bank, confirming that it has received and has under its sole
control (other than funds to be made available under this
Agreement) an amount in US dollars (being not less than
(Pounds)70,000,000 and that the Tender Offer has become
unconditional in accordance with its terms); and/or
(ii) an escrow letter in form satisfactory to the Agent.
2. Opinion
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An opinion from ▇▇▇▇▇▇▇ ▇▇▇▇ Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ as to certain US
securities law and regulatory matters relating to the Tender Offer.
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SCHEDULE 5
PART II
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(Section B)
(Contents of Certificate)
(a) The Tender Offer has expired and there has been validly tendered to the
Purchaser and not withdrawn and the Purchaser shall have accepted for
payment and shall purchase concurrently with the Advance hereunder, that
number of shares of common stock of the Target which when added to any
shares then owned by the Purchaser, represents not less than 49.99% of the
issued common stock of the Target. Every condition to the Tender Offer set
forth in the Offer to Purchase has been satisfied or the Agent has
consented in writing to the waiver thereof.
(b) There does not (to the best of my knowledge and belief) exist (i) any
judgment, order, injunction or other restraining order, or (ii) any
pending or threatened litigation, proceeding or investigation which, if
adversely determined, could prohibit, prevent, make unlawful or impose any
material adverse condition upon, either (A) this Agreement, the Option
Agreement, the Tender Offer, the Merger Agreement, or any transaction
contemplated hereunder or thereunder, or (B) the ability of the Parent,
the Purchaser, the Agent or any affiliate of any of the foregoing to
perform its respective obligations in connection with the Tender Offer or
the Merger or pursuant to any of the documents referred to in clause (A)
above.
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SCHEDULE 5
PART III (Merger Agreement Closing Date)
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(Section A)
1. Certificate
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A certificate from a duly authorised officer of the Parent confirming the
matters in Section B below.
2. Opinion
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An opinion from ▇▇▇▇▇▇▇ ▇▇▇▇, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ that the Merger
Agreement has been duly consummated in accordance with California law.
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SCHEDULE 5
PART III
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(Section B)
Every condition precedent to the respective obligations of each of the parties
to the Merger Agreement, including without limitation, approval by the requisite
number of votes of the shareholders of the Purchaser and the Target, has been
satisfied; there exists no impediment or unsatisfied condition precedent to the
consummation of the merger in the manner contemplated by the Merger Agreement;
and the holders of 5% (or less) of the outstanding shares of common stock of the
Target have not asserted appraisal rights in connection with the merger; and no
provision of the General Corporation Law of the State of California prevents the
consummation of the merger as contemplated in the Merger Agreement.
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SCHEDULE 6
Material Subsidiaries
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Name Registered Registered
---- ---------- ----------
Number Office
------ ------
Sagesoft Limited 1045967 Sage House
Benton Park ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇
Sage Overseas Limited ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇
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SCHEDULE 7
Permitted Encumbrances
----------------------
1. Legal Charge dated 19th October 1990, granted by Multisoft Financial
Systems Limited in favour of Barclays Bank Plc over Cross and Pillory
House, Cross and Pillory ▇▇▇▇, ▇▇▇▇▇, Hampshire GU34 1HL securing a
principal amount of (pounds)925,000.
2. Debenture dated 19th October 1990, granted by Multisoft Financial Systems
Limited to Barclays Bank Plc over all its present and future assets
securing a principal amount of (pounds)925,000.
3. Legal Charge dated 19th October 1990, granted by Multisoft Financial
Systems Limited over Unit 13, The Waters Edge Business Park, Salford
Quays, Salford, Greater Manchester, security a principal amount of
(pounds)925,000.
4. Pledge over 82,896 share of the company Sybel Informatique S.A. granted by
Sage Overseas Limited in favour of Banque Nationale de Paris securing a
facility in a principal amount of 125,000,000 French Francs.
5. Charge dated 20th August 1991, granted by Multisoft Financial Systems
Limited in favour of Close Brothers Limited over certain insurance
policies and their proceeds.
6. Charge dated 11th February 1994, granted by Multisoft Financial Systems
Limited in favour of Centre-File Ltd over certain bank accounts with
Barclays Bank Plc.
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The Parent
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SIGNED for and on behalf of
THE SAGE GROUP PLC
by: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
The Purchaser
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SIGNED for and on behalf of
ROSE ACQUISITION CORP.
by: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
The Banks
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SIGNED for and on behalf of
LLOYDS BANK PLC
by: ▇ ▇▇▇▇▇▇
The Arranger
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SIGNED for and on behalf of
LLOYDS BANK PLC
by: ▇ ▇ ▇▇▇▇▇▇▇
The Agent
---------
SIGNED for and on behalf of
LLOYDS BANK PLC
by: ▇ ▇▇▇▇▇▇▇
100