EXHIBIT 10.32
DATED FEBRUARY 1997
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▇▇▇▇ LTD
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▇▇▇▇ HOLDINGS LTD AND CERTAIN OF ITS UK SUBSIDIARIES
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▇▇▇▇ AFRICA INTERNATIONAL LTD
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LAW COMPANIES GROUP, INC.
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BARCLAYS BANK PLC
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BARCLAYS BANK PLC AS THE AGENT
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BARCLAYS BANK PLC AS THE INTERNATIONAL COLLATERAL AGENT
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FACILITY AGREEMENT
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▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
A1/MJL/DS 001BB.37624
INDEX
1. DEFINITIONS.......................................................... 2
2. PURPOSE OF THE FACILITIES............................................ 15
3. NATURE OF THE LOAN FACILITY AND UTILISATION OF THE LOAN FACILITY TO
REFINANCE EXISTING BORROWINGS........................................ 15
4. PROVISION OF LOCAL FACILITIES AND EFFECT ON LOAN FACILITY
AVAILABILITY......................................................... 16
5. DURATION OF LOAN FACILITY............................................ 16
6. SFET FACILITIES...................................................... 16
7. GUARANTEE FACILITY................................................... 17
8. DRAWDOWN............................................................. 19
9. INTEREST............................................................. 19
10. CHANGE OF CIRCUMSTANCES AND SALE EVENT............................... 21
11. FEES................................................................. 22
12. LEGAL, VALUATION AND OTHER EXPENSES.................................. 23
13. REPAYMENT............................................................ 23
14. PREPAYMENT AND CANCELLATION.......................................... 24
15. INTERNATIONAL SECURITY AND US SECURITY............................... 24
16. DISPOSAL OF CHARGED ASSETS AND PERMANENT REDUCTION OF FACILITY....... 26
17. DISTRIBUTION OF DISPOSAL PROCEEDS.................................... 27
19. POSITIVE COVENANTS................................................... 34
20. NEGATIVE COVENANTS................................................... 39
21. INFORMATION ABOUT THE INTERNATIONAL GROUP............................ 49
22. PAYMENTS AND GROSS-UP................................................ 50
23. EVENTS OF DEFAULT.................................................... 50
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24. INTEREST ON AN OVERDUE AMOUNT......................................... 53
25. ASSIGNMENT AND TRANSFER............................................... 54
26. THE AGENT AND THE BANKS............................................... 54
27. RETIREMENT OF AGENT................................................... 59
28. CONDITIONS PRECEDENT.................................................. 59
29. MISCELLANEOUS......................................................... 63
31. AUTHORITY OF THE PARENT COMPANY....................................... 66
32. GOVERNING LAW AND JURISDICTION........................................ 66
33. NOTICES............................................................... 66
34. PARTNERSHIP........................................................... 67
35. ENTIRE AGREEMENT...................................................... 67
36. COUNTERPARTS.......................................................... 67
SCHEDULE 1
UK QUALIFYING SUBSIDIARIES.................................................. 68
SCHEDULE 2
SPECIFIED SUBSIDIARIES...................................................... 69
SCHEDULE 3
LIST OF CHARGORS............................................................ 70
SCHEDULE 4
LIST OF PLEDGORS............................................................ 71
SCHEDULE 5
LIST OF GROUP COMPANIES AND ASSOCIATED COMPANIES............................ 73
SCHEDULE 6
MONEY MARKET LOAN........................................................... 75
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SCHEDULE 7
THE OVERDRAFT............................................................... 76
SCHEDULE 8
BMRF........................................................................ 77
SCHEDULE 9
SFET........................................................................ 79
SCHEDULE 10
HKS SYNTHETIC STOCK FACILITY................................................ 80
SCHEDULE 11
ASSOCIATED COSTS FORMULA.................................................... 81
SCHEDULE 12
LIST OF EXECUTIVE OFFICERS.................................................. 82
SCHEDULE 13
LIST OF THIRD PARTY SECURITY................................................ 83
SCHEDULE 14
THE BANKS................................................................... 84
SCHEDULE 15
FORM OF TRANSFER CERTIFICATE................................................ 85
SCHEDULE 16
LIST OF DORMANT GROUP COMPANIES............................................. 88
SCHEDULE 17
PART A THE GUARANTEE AND DEBENTURE.......................................... 89
PART B THE PLEDGES.......................................................... 90
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EXHIBIT
DISCLOSURE LETTER........................................................... 94
THIS FACILITY AGREEMENT is dated the day of February 1997
BETWEEN:
(1) ▇▇▇▇ LTD ("▇▇▇▇");
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(2) THE UK QUALIFYING SUBSIDIARIES named in Schedule 1;
(3) THE SPECIFIED SUBSIDIARIES named in Schedule 2;
(4) LAW COMPANIES GROUP, INC. (the "Parent Company");
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(5) THE BANKS;
(6) BARCLAYS BANK PLC (the "Agent");
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(7) BARCLAYS BANK PLC (the "International Collateral Agent").
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WHEREAS:
(A) The Banks have agreed, subject to the terms and conditions set out in this
Agreement with effect from the Effective Date, to make available to ▇▇▇▇,
and, subject to certain restrictions, the UK Qualifying Subsidiaries in
respect of paragraph (a) below, and, subject to certain restrictions, the
Specified Subsidiaries in respect of paragraph (b) below, the following
facilities:
(a) a sterling short term revolving loan facility (the "Loan Facility") of
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up to (Pounds)4,474,940;
(b) a multi-currency guarantee facility (the "Guarantee Facility") of up
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to (Pounds)5,966,587; and
(c) a spot and forward exchange transactions facility (the "SFET
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Facility") of up to (Pounds)1,000,000 gross risk.
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(B) The Banks may, at their sole discretion, make available to certain
specified subsidiaries of the Parent Company local facilities of up to
(Pounds)1,551,313 in aggregate and the committed amount of the Loan
Facility will be deemed to be reduced by an amount equivalent to the amount
of any such local facilities.
(C) In addition, a facility of up to (Pounds)596,658 (calculated in accordance
with the provisions of this Agreement) shall be made available to ▇▇▇▇ for
the acquisition of HKS Synthetic Stock and the committed amount of the Loan
Facility will be deemed to be reduced by an amount equivalent to the amount
utilised under that facility.
(D) The Banks or any Bank Affiliate may, at their option, on ▇▇▇▇ ceasing to be
a direct or indirect Subsidiary of the Parent Company make available to the
Parent Company a replacement facility in substitution for the Loan
Facility.
(E) Certain facilities (the "October Facilities") were made available by the
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Banks to the Obligors under the provisions of a facility agreement dated 11
October 1995 (as amended from time to time, the "October Agreement")
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between the same parties. The Banks have agreed to continue to provide the
October Facilities subject to the revised provisions of this Agreement.
(F) The Facilities are to be utilised to assist the Obligors with their
additional working capital, general corporate purposes and capital
expenditure requirements.
(G) Upon the Effective Date, the provisions of this Agreement shall replace the
provisions of the October Agreement.
IT IS AGREED:
1. DEFINITIONS
1.1 In this Agreement, unless the context otherwise requires:
"Additional Facility" has the meaning attributed to it in subclause
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10.3(a);
"Advance" means the principal amount of each borrowing made or to be made
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under the Loan Facility or (as the case may be) the principal amount for
the time being outstanding in respect of such borrowing;
"Affiliate" has the meaning attributed to it in the US Credit Agreement;
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"Agent" means Barclays Bank PLC acting in its capacity as agent for the
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Banks for the purposes of this Agreement (whether before or after any
transfer effected under Clause 25) and includes any successors in title as
agent of the Banks appointed under the terms of this Agreement;
"Agreement" means this agreement;
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"All Banks" means, collectively, all Banks and each other bank which is a
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party to the Intercreditor Agreement;
"Applicable Law" means (a) all applicable common law and principles of
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equity and (b) all applicable provisions of all (i) constitutions,
statutes, rules, regulations and orders of governmental bodies, (ii)
Governmental Approvals and (iii) orders, decisions, judgments and decrees
of all courts and arbitrators;
"Arrangement Fee" means the fee payable under subclause 11.2;
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"Asset Value" has the meaning attributed to it in the US Credit Agreement;
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"Associated Company" means a Person which is not a Group Company but in
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which any Group Company has a shareholding, participation or other
interest;
"Associated Costs" means in relation to any sum outstanding under this
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Agreement during any period for which an interest rate is to be calculated
in relation to such sum, the rate per annum determined in accordance with
Schedule 11;
"Authorised Signatory" means, at any time, in relation to any Group
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Company, Obligor, Chargor, Guarantor or Pledgor and any communication to be
made or any document to be executed or certified by such Group Company,
Obligor, Chargor, Guarantor or Pledgor, any person or persons who is or are
at such time duly authorised by or pursuant to the resolutions mentioned in
Clause 28 of the board of directors or other governing body of such Group
Company, Obligor, Chargor, Guarantor or Pledgor or in such other manner as
may be acceptable to the Banks to make such communication or to execute or
certify such document on behalf of such Group Company, Obligor, Chargor,
Guarantor or Pledgor;
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"Availability" means, in respect of a facility, the sum of (a) the facility
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limit of such facility less (b) any principal then outstanding under such
facility; less (c) any part of such facility which is not available for
drawing under the terms of this Agreement;
"Banks" means, before any transfer or assignment under Clause 25, Barclays
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Bank PLC and, thereafter, means Barclays Bank PLC and each Transferee and
permitted assignee (and in each case their respective successors in title)
but only in respect of each for so long as it has any rights or obligations
under the Loan Documents and the term "Bank" shall mean any one of them;
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"Bank Affiliate" means from time to time any local affiliate of any Bank
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which makes available any Local Facility to a Specified Subsidiary;
"Bank Guarantee" means (a) those guarantees detailed in subclause 7.4; and
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(b) a guarantee, bond or indemnity issued or to be issued by the Banks
under the Guarantee Facility, together with any guarantee, bond or
indemnity issued by Barclays Bank PLC under the Original Guarantee Facility
which is outstanding at the Effective Date;
"BGI Exposure" has the meaning attributed to it in the Intercreditor
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Agreement;
"BMRF" has the meaning attributed to it in subclause 3.1(c);
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"Book Equity" means the shareholders' equity of the Parent Company as
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determined in accordance with generally accepted accounting principles.
"Borrowings" means (a) Indebtedness for borrowed money or for the deferred
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purchase price of property or services (other than trade accounts payable
on customary terms in the ordinary course of business), (b) financial
obligations evidenced by bonds, debentures, notes or other similar
instruments, (c) financial obligations as lessee under leases which shall
have been or should be, in accordance with generally accepted accounting
principles, recorded as capital leases, (d) financial obligations as the
issuer of share capital redeemable in whole or in part at the option of any
person other than such issuer, at a fixed and determinable date or upon the
occurrence of an event or condition not solely within the control of such
issuer, (e) all obligations (contingent or otherwise) with respect to
interest rate and currency leasing agreements, (f) reimbursement
obligations (contingent or otherwise) with respect of amounts under letters
of credit, bankers acceptances and similar instruments, (g) obligations
under direct or indirect guarantees in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, Indebtedness or financial
obligations of any kind referred to in paragraphs (a) to (f) inclusive
above and (h) any other obligations having the commercial effect of a
borrowing;
"Branch" has the meaning attributed to it in Clause 8;
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"Business Day" means a day (excluding Saturdays) on which Barclays Bank PLC
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is ordinarily open to effect transactions of the kind contemplated in this
Agreement;
"Capital" shall mean, at any time, the sum of (a) Consolidated Net Worth
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plus (b) Funded Debt;
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"CEO Letter of Credit" shall mean a single letter of credit in a face
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amount of not more than $1,000,000 which has been issued by the Banks for
the account of ▇▇▇▇ as part of a compensation package for the chief
executive officer of the Parent Company in accordance with the information
previously disclosed to All Banks;
"Chargors" means the persons set out in Schedule 3 and any person that
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hereafter becomes a Chargor in accordance with all the terms of Clause 15
and "Chargor" means any one of them;
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"Closing Date" means the date of this Agreement;
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"Code" means the US Internal Revenue Code of 1986, as amended from time to
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time, and the regulations promulgated and the rulings issued thereunder;
"Collateral Agents" means the International Collateral Agent and the US
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Collateral Agent and "Collateral Agent" means any one of them;
"Commitment" means, in relation to any Bank, the facility limit set
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opposite its name in Schedule 14 (or, in the case of a Transferee, the
facility limit set out in the Schedule to the relevant Transfer Certificate
as being transferred to that Transferee) as the same may be transferred (in
whole or in part), reduced, varied or terminated in accordance with the
terms of this Agreement;
"Consolidated EBIT" shall mean, for any fiscal period of the Parent
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Company, an amount equal to the sum of (a) Consolidated Net Income (Loss),
plus (b) to the extent deducted in determining Consolidated Net Income
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(Loss), (i) provisions for taxes based on income of the Parent Company and
its Subsidiaries (unless otherwise noted) determined on a consolidated
basis in accordance with GAAP and (ii) Interest Expense;
"Consolidated Net Income (Loss)" shall mean, for any fiscal period of the
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Parent Company, the net income (or loss) of the Parent Company and its
Subsidiaries (unless otherwise noted) determined on a consolidated basis
for such period (taken as a single accounting period), in accordance with
GAAP;
"Consolidated Net Worth" means at any date of determination the Parent
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Company's total shareholders' equity, determined in accordance with
generally accepted accounting principles, but measured at the currency
exchange rates in effect as at 31 December of the immediately preceding
fiscal year but measured at the currency exchange rates as in effect as of
31 December 1996;
"Credit Documents" has the meaning attributed to it in the Intercreditor
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Agreement;
"Deed of Accession" means any deed of accession to the International
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Security or the US Security, as appropriate, in a form set out in the
relevant Security documents;
"Disclosure Letter" means a letter from the Parent Company to the Banks
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together with any schedules and annexures annexed thereto at the time of
receipt disclosing certain matters, received by the Banks before the
Closing Date and designated as the "Disclosure Letter" on its front sheet
and attached as an Exhibit to this Agreement;
"Disposal Proceeds" means the net proceeds of sale or disposition (before
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the Enforcement Date) of any assets which are subject to the charges
contained in the Security, less any costs, revenues or expenses associated
with such sale or disposition as previously approved by the relevant
Collateral Agent, together with any amounts which pursuant to this
Agreement or with the consent of the relevant Collateral Agent shall be
deemed to be Disposal Proceeds, but excluding proceeds derived from assets
subject only to an uncrystallised floating charge which are sold by a
Chargor in the normal course of business;
"dollar" and "$" mean the lawful currency of the United States of America;
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"Domestic Banks" mean the "Banks" as defined under the US Credit Agreement
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and comprise, as at the date of this Agreement, SunTrust and NBC;
"Domestic Interest Coverage Ratio" shall mean, for any fiscal period of the
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Parent Company, the ratio of (a) Consolidated EBIT of the Parent Company
and the US Subsidiaries for such fiscal
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period to (b) Interest Expense of the Parent Company and the US
Subsidiaries for such fiscal period;
"Domestic Senior Debt Coverage Ratio" shall mean, for any fiscal period of
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the Parent Company, the ratio of (a) Senior Funded Debt of the Parent
Company and the US Subsidiaries as of the last day of such fiscal period to
(b) EBITDA of the Parent Company and the US Subsidiaries for the rolling
four-quarter period ending on the last day of such fiscal period;
"Dormant Group Company" means any company listed in Schedule 16;
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"EBITDA" means, for any period of the Parent Company, an amount equal to
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the sum of (a) Consolidated EBIT, plus (b) depreciation and amortization
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expenses (as determined on a consolidated basis in accordance with GAAP) to
the extent deducted in determining such Consolidated EBIT;
"Effective Date", means the earliest date (being a Business Day) on which
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by 1.00 pm (London Time) all the conditions precedent in Clause 28.1 are
satisfied in form and substance satisfactory to the Agent or waived in
writing by the Required Banks; or alternatively such other date as the
Required Banks and all the Obligors agree in writing;
"Encumbrance" includes any mortgage, pledge, lien (excluding any lien
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arising automatically and solely by operation of law in the ordinary course
of business), hypothecation, charge, assignment or deposit by way of
security or any other agreement or arrangement (whether conditional or not
and whether relating to existing or to future assets), having the effect of
providing a security or preferential treatment to a creditor (including
set-off, title retention, defeasance or reciprocal fee arrangements) or any
agreement or arrangement to give any form of security or preferential
treatment to a creditor (and shall include, without limitation, any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof including any lease or
similar arrangement with a public authority executed in connection with the
issuance of industrial development revenue bonds or pollution control
revenue bonds, and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction);
"Enforcement Date" means the first date on which an Enforcement Event
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occurs;
"Enforcement Event" has the meaning attributed to it in the Intercreditor
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Agreement;
"Environment" means
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(a) any land, including surface land and subsurface strata, sea bed or
river bed under any water as defined below and any natural or man-made
structures;
(b) water, including coastal and inland waters, surface waters, ice, snow
and rain water, ground waters and water in drains and sewers;
(c) air, including air within buildings and other natural or man-made
structures above or below ground;
"Environmental Laws" means all or any applicable law (whether civil,
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criminal or administrative), common law, statute, statutory instrument,
treaty, regulation, directive, by-law, circular, code, order, notice,
demand, decree, injunction, resolution or judgment (in any such case, with
which it is mandatory to comply) of any government, quasi-government,
supranational, federal, state or local government, statutory or regulatory
body or agency, or court in any jurisdiction with regard to or entailing
liability because of the pollution or protection of the Environment or the
harm or the protection of human health or the health of animals or plants,
including laws relating to public
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and workers' health and safety, emissions, discharges, spillages or
releases or chemicals or any other pollutants or contaminants, or
industrial, radioactive, dangerous, toxic or hazardous substances or wastes
(whether in solid or liquid form or in the form of a gas or vapour and
including noise and generically modified organisms) into the Environment,
or otherwise relating to the manufacture, processing, use, treatment,
storage, distribution, disposal, transport or handling or such substances
or wastes;
"Environmental Permits" means all or any permits, licences, consents,
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approvals, certificates, qualifications, specifications, registrations and
other authorisations and the filing of all notifications, reports,
improvement programmes and assessments required under any Environmental
Laws for the operation of the business of any of the Group Companies or the
occupation or use of any Properties in which any Group Company has an
interest or which it occupies or on which it conducts any activity;
"ERISA" means the Employee Retirement Income Security Act of 1974 and all
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rules and regulations promulgated pursuant to it, as the same may from time
to time be supplemented or amended;
"ERISA Affiliate" shall mean any trade or business (whether incorporated or
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unincorporated) which together with the Parent Company is treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code;
"ESOP" has the meaning attributed to it in the US Credit Agreement;
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"Event of Default" means any event or circumstances referred to in Clause
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23;
"Executive Arrangement" has the meaning attributed to it in sub-paragraph
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(a) of the definition of "Plan" in this Agreement;
"Executive Officer" means, with respect to any Group Company, each of the
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officers of such Company listed in Schedule 12 and any Person hereafter
holding office or offices which are individually or collectively assigned
substantially similar duties;
"Facilities" means the Guarantee Facility, SFET Facility, Loan Facility,
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each Local Facility and any Additional Facility or Substitute Facility and
"Facility" shall mean any one of them;
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"First Tier Facilities" shall mean, collectively, and, without duplication,
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the US Commitments and the Facilities (excluding the SFET Facility);
"401(k) Plan" shall mean, collectively, the Law Companies Group, Inc.
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401(k) Savings Plan sponsored by and maintained by the Parent Company, as
in effect on the date hereof, together with the Law Companies Group, Inc.
Puerto Rico 401(k) Savings Plan sponsored by and maintained by the Parent
Company;
"Fixed Charge Coverage Ratio" shall mean, for any fiscal period of the
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Parent Company, the ratio (a) (1) EBITDA for the rolling four-quarter
period ending on the last day of such period, minus (2) capital
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expenditures (determined on a consolidated basis in accordance with GAAP)
made by the Parent Company and its Subsidiaries during the rolling four-
quarter period ending on the last day of such period to the extent
permitted by subclause 20.7, to (b) Fixed Charges for the rolling four-
quarter period ending on the last day of such period;
"Fixed Charges" shall mean, for any fiscal period of the Parent Company,
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(i) Interest Expense for such period plus (ii) current maturities of long-
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term indebtedness of the Parent Company and its Subsidiaries determined on
a consolidated basis in accordance with GAAP, plus (iii) taxes paid by the
Parent Company and its Subsidiaries in cash during such period, determined
on a consolidated
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basis in accordance with GAAP, plus (iv) any payments made during such
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period by the Parent Company in connection with the Georgetown Steel
Litigation;
"FLECBOA" shall mean the $3,589,000 loan and lease arrangements evidenced
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by that certain Participation Agreement dated as of November 2, 1994, among
Law Engineering and Environmental Services, Inc., formerly known as Law
Environmental, Inc., FLECBOA, Inc., the Company and South Trust Bank of
Georgia N.A. and other related documents executed in connection therewith,
as amended or modified prior to the date hereof;
"Funded Debt" shall mean all indebtedness for borrowed money of the Parent
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Company and its Subsidiaries on a consolidated basis, including, without
limitation, current maturities of indebtedness for borrowed money, but
excluding reimbursement obligations relating to the Letters of Credit and
bonds, guaranties and indemnitees issued under the Guarantee Facility;
"GAAP" shall mean generally accepted accounting principles set forth in the
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opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession, which are applicable to the circumstances as
of the date of determination.
"Georgetown Steel Litigation" shall mean the obligation of the Parent
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Company and its Subsidiaries under the judgment rendered by the United
States District Court for the District of South Carolina in Georgetown
Steel Corporation v. Union Carbide Corporation, et al;
"▇▇▇▇" means ▇▇▇▇ Ltd (Company number 2387707);
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"Governmental Approval" means any order, permission, authorization,
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consent, approval, licence, franchise, permit or validation of, exemption
by, registration or filing with, or report or notice to, any governmental
agency or unit, or any public commission, board or authority;
"Group Company" means at any time any one of the Parent Company and its
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Subsidiaries at that time;
"Group Outstandings" means the sum of (a) the Loan Outstandings; (b) the
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outstandings under any Local Facility; (c) the BGI Exposure; and (d) the
outstandings under the US Commitments (including, for the avoidance of
doubt, the Letter of Credit Exposure);
"Guarantee" means any guarantee executed and delivered to the International
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Collateral Agent pursuant to Clause 15 or otherwise;
"Guarantee and Debenture" means the guarantee and debentures and other
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security listed in Part A of Schedule 17 and each guarantee and debenture
or other security executed in favour of the International Collateral Agent
pursuant to Clause 15;
"Guarantee Facility" has the meaning attributed to it in Recital A;
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"Guarantors" means any person that hereafter becomes a Guarantor in
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accordance with all the terms of Clause 15 and "Guarantor" shall mean any
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of the Guarantors;
"HKS" means Hill ▇▇▇▇▇▇ ▇▇▇▇▇ Law ▇▇▇▇ (Pty) Limited, a South African
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company;
"HKS Synthetic Stock" shall mean the synthetic share capital issued by HKS
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Trust and remaining outstanding as of the Closing Date which tracks the
value of the share capital of the Parent Company;
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"HKS Trust" means HKS Law ▇▇▇▇ Share Trust (Pty) Limited, a South African
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trust;
"Indebtedness" means at any time any obligation (whether incurred as a
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principal or a surety) for the payment or repayment of money, whether
present or future, actual or contingent and including (i) indebtedness for
borrowed money or for the deferred purchase price of property or services
(other than trade accounts payable on customary terms in the ordinary
course of business), (ii) financial obligations evidenced by bonds,
debentures, notes or other similar instruments, (iii) financial obligations
as lessee under leases which shall have been or should be, in accordance
with generally accepted accounting principles, recorded as capital leases,
(iv) financial obligations as the issuer of share capital redeemable in
whole or in part at the option of any Person other than such issuer, at a
fixed and determinable date or upon the occurrence of an event or condition
not solely within the control of such issuer, (v) all obligations
(contingent or otherwise) with respect to interest rate and currency
leasing agreements, (vi) reimbursement obligations (contingent or
otherwise) with respect of amounts under letters of credit, bankers
acceptances and similar instruments, (vii) financial obligations under
purchase money mortgages, (viii) financial obligations under asset
securitisation vehicles, (ix) conditional sale contracts and similar title
retention instruments, and (x) obligations under direct or indirect
guarantees in respect of, and obligations (contingent or otherwise) to
purchase or otherwise acquire, or otherwise to assure a creditor against
loss in respect of, indebtedness or financial obligations of others of the
kinds referred to in clauses (i) through (ix) above;
"Indemnity" means the general indemnity to be issued or issued by ▇▇▇▇ in
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favour of Barclays Bank PLC in connection with bonds, guarantees and
indemnities issued by Barclays Bank PLC
"Intercompany Notes" has the meaning attributed to it in the US Credit
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Agreement;
"Intercreditor Agreement" means the agreement dated of even date between
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Barclays Bank PLC, SunTrust and NBC and acknowledged and agreed to by the
Parent Company and certain of the Group Companies;
"Intercreditor Agreement Agent" means the "Intercreditor Agreement Agent"
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as defined under the Intercreditor Agreement and is, at the date of this
Agreement, SunTrust;
"Interest Expense" means, for any fiscal period of the Parent Company,
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total interest expense (including, without limitation, interest expense
attributable to capitalized leases in accordance with generally accepted
accounting principles) of the Parent Company and its Subsidiaries, on a
consolidated basis, unless otherwise noted, for such period;
"Interest Period" means, for an Advance or an overdue amount, each
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successive period of a duration determined hereunder for the purpose of
calculating the interest rate from time to time applicable to that Advance;
"International Collateral Agent" has the meaning attributed to it in the
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Intercreditor Agreement and is, as of the date of this Agreement, Barclays
Bank PLC;
"International Group" has the meaning attributed to it in subclause
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21.1(a);
"International Group Company" means any Group Company not incorporated or
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otherwise organised in the United States of America;
"International Guarantees" shall mean, collectively, (a) the guarantee
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agreement in a form acceptable to the Banks executed by the Parent Company,
Law International, Inc. and ▇▇▇▇ International Holdings, Inc. in favour of
the Banks and any Bank Affiliate, and (b) the guarantee agreement in a form
acceptable to the Banks executed by certain other US Group Companies in
-8-
favour of the Banks and any Bank Affiliate, in each case as hereafter
amended, restated, renewed, extended, supplemented or otherwise modified
from time to time.
"International Security" means any security granted from time to time by
----------------------
any International Group Company to the International Collateral Agent;
"International Security Documents" means the Pledge Agreements, the
--------------------------------
Guarantee and Debentures and the Guarantees and any additional substitute
or supplemental security from time to time granted by any International
Group Company to the International Collateral Agent in favour of any Bank
or Bank Affiliate to secure the repayment of all or any part of the
Facilities made available to such Group Companies;
"Investment" means when used with respect to any Person any direct or
----------
indirect advance, loan or other extension of credit (other than the
creation of receivables in the ordinary course of business) or capital
contribution by such Person (by means of transfers of property to others or
payments for property or services for the account or use of others, or
otherwise) to any Person, or any direct or indirect purchase or other
acquisition by such Person of, or a beneficial interest in, share capital,
partnership interests, bonds, notes debentures or other securities issued
by any other Person;
"Letter of Credit Exposure" has the meaning attributed to it in the US
-------------------------
Credit Agreement;
"Letter of Credit Subfacility" has the meaning attributed to it in the US
----------------------------
Credit Agreement;
"Letters of Credit" has the meaning attributed to it in the US Credit
-----------------
Agreement;
"Letters of Credit Obligations" has the meaning attributed to it in the US
-----------------------------
Credit Agreement;
"Lex Insurance" means, collectively, Lex International Insurance Company
-------------
Limited and Carriber Insurance Company Limited, each a Bermuda corporation;
"Loan Documents" means this Agreement, the International Security
--------------
Documents, any Local Facility documents, the Intercreditor Agreement, the
International Guarantees, the US Security Documents and each document,
instrument, certificate and opinion executed and delivered to any Bank,
Domestic Bank, Agent, Collateral Agent or Intercreditor Agreement Agent in
connection with the foregoing;
"Loan Facility" has the meaning attributed to it in Recital A but to the
-------------
extent provided in subclause 10.4 shall mean any Additional Facility or
Substitute Facility which replaces the original Loan Facility for the
purposes of this Agreement;
"Loan Outstandings" means at any time the aggregate principal amount
-----------------
outstanding under the Loan Facility pursuant to the Money Market Loan and
the BMRF and the HKS Synthetic Stock Facility and the amount of the
Overdraft and Local UK Overdraft at that time;
"Local Facility" has the meaning attributed to it in subclause 4.1;
--------------
"Local UK Overdraft" has the meaning attributed to it in subclause 3.1(d);
------------------
"Majority Banks" means any Bank or group of Banks which holds at least 75
--------------
per cent of the aggregate amount of the facility limits of the Facilities;
"Material Adverse Effect" means a material adverse change in the
-----------------------
operations, business, property or assets of, or in the condition (financial
or otherwise) or prospects of, the Parent Company and its Subsidiaries,
taken as a whole;
-9-
"Money Market Loan" has the meaning attributed to it in subclause 3.1(a);
-----------------
"month" means a period starting on one day in a calendar month and ending
-----
on the corresponding day in the next calendar month or, if that is not a
business day, on the next business day unless that falls in another
calendar month in which case it shall end on the preceding business day,
save that where a period starts on the last business day in a month or
there is no corresponding day in the month in which the period ends, that
period shall end on the last business day in the later month;
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
------------------
Section 4001(a)(3) of ERISA;
"NBC" means National Bank of Canada;
---
"Net Fees" means, for the Parent Company and its Subsidiaries on a
--------
consolidated basis, gross fees less costs related to subcontracts;
"Net Fees Budgeted" means, with respect to any fiscal year of the Parent
-----------------
Company, the Net Fees reasonably budgeted by the Parent Company and its
Subsidiaries for such fiscal year, the amount of which shall be reasonably
satisfactory to the Required Banks; if no Bank, Reimbursement Agreement
Bank or Domestic Bank objects to such budgeted fees within 45 days of
receipt by it of the annual budget required to be delivered pursuant to
subclause 19.2(e), such budget shall be deemed satisfactory to the
Required Banks;
"Net Issuance Proceeds" means the net cash proceeds received by the Parent
---------------------
Company or any of its Subsidiaries upon the issue by the Parent Company of
any of its share capital to any Person;
"Obligations" has the meaning attributed to it in the Intercreditor
-----------
Agreement;
"Obligors" means the Parent Company, ▇▇▇▇, the UK Qualifying Subsidiary and
--------
the Specified Subsidiaries and "Obligor" means any one of them;
-------
"October Agreement" has the meaning given to it in Recital D;
-----------------
"Original Bank Guarantee Facility" means the bank guarantee facility
--------------------------------
contained in the October Agreement;
"Original Facility Letter" means the facility letter dated 8 October 1993
------------------------
from Barclays Bank PLC to the Parent Company and ▇▇▇▇;
"Original Reimbursement Agreement" has the meaning attributed to it in the
--------------------------------
US Credit Agreement;
"Original SFET Facility" means the "SFET Facility" as defined in the
----------------------
October Agreement;
"Outstanding Amount" means, in relation to a Bank Guarantee at any time,
------------------
the maximum actual and contingent liability of any Bank under that Bank
Guarantee at that time;
"Overdraft" has the meaning attributed to it in subclause 3.1(b);
---------
"Parent Company" means Law Companies Group, Inc;
--------------
"Partially Owned Subsidiaries" shall mean, collectively, Law/▇▇▇▇▇, Inc., a
----------------------------
California corporation, Envirosource Incorporated, a Georgia corporation
and Law/Spear, LLC, a Georgia limited liability company;
-10-
"Permitted Preferred Stock" shall mean preferred stock of the Company which
---------------------------
either (1) has a dividend rate of no more than 8% per annum and does not
require any return of capital or equity prior to May 1, 2000 or (2) is on
terms and conditions to which the Banks have otherwise given their prior
written consent;
"Person" shall mean an individual, corporation, partnership, trust or
------
unincorporated organisation, a government or any agency or political
subdivision thereof;
"Petermuller Subsidiaries" shall mean, collectively, ▇▇▇▇ Petermuller &
--------------------------
Partners (Guernsey) Limited, a Guernsey corporation, and ▇▇▇▇ Petermuller &
Partners (Cyprus) Limited, a Cypriot corporation;
"PBGC" means the Pension Benefit Guaranty Corporation and any successor to
----
it;
"Plan" means any employee benefit plan, program, arrangement, practice or
----
contract, maintained by or on behalf of the Parent Company or any ERISA
Affiliate, which provides benefits or compensation to or on behalf of
employees or former employees, whether formal or informal, whether or not
written, including but not limited to the following types of plans:
(a) Executive Arrangements - any bonus, incentive compensation, stock
----------------------
option, deferred compensation, commission, severance, "golden
parachute", "rabbi trust", or other executive compensation plan,
program, contract, arrangement or practice;
(b) ERISA Plans - any "employee benefit plan" as defined in ERISA,
-----------
including, but not limited to, any defined benefit pension plan,
profit sharing plan, money purchase pension plan, savings or thrift
plan, stock bonus plan, employee share capital ownership plan,
Multiemployer Plan, or any plan, fund, program, arrangement or
practice providing for medical (including post-retirement medical),
hospitalization, accident, sickness, disability, or life insurance
benefits;
(c) Other Employee Fringe Benefits - any stock purchase, vacation,
------------------------------
scholarship, day care, prepaid legal services, severance pay or other
fringe benefit plan, program, arrangement, contract or practice;
"Pledge Agreement" means each share pledge or charge listed in Part B of
----------------
Schedule 17 and each share pledge or charge executed by each Pledgor
pursuant to Clause 15;
"Pledgors" means the persons listed in Part A and Part B of Schedule 4 and
--------
any person that hereafter becomes a Pledgor in accordance with all the
terms of Clause 15 and "Pledgor" shall mean any one of them;
"Potential Event of Default" means any event or the existence of any
--------------------------
circumstances which, with the giving of notice or the lapse of time, or any
combination of them might, in the opinion of the Agent constitute or bring
about an Event of Default;
"Properties" means, at any time, all interests in freehold and leasehold
----------
property then owned by any Group Company;
"Prospective Transferee" means a bank or other financial institution to
----------------------
which a Bank seeks to transfer all or part of its rights and/or obligations
under the Loan Documents in accordance with Clause 25;
"Qualifying Bank" means (i) a bank as defined for the purpose of section
---------------
349 of the Income and Corporation Taxes Act 1988 which is within the charge
to United Kingdom corporation tax as respects payments of interest received
by it under this Agreement; or (ii) a person which is a bank
-11-
or financial institution (whether incorporated into the United Kingdom or
elsewhere) to which the Obligors may lawfully, and without incurring any
additional expense make payments under this Agreement without any deduction
or withholding in respect of Taxes by virtue of a double taxation treaty;
"Regulation G, T, U or X" shall mean Regulation G, T, U or X respectively
-----------------------
of the Board of Governors of the US Federal Reserve System, as in effect
from time to time, and any regulation successor to it;
"Relevant Percentage" means at any time, in relation to a Bank in respect
-------------------
of a facility:
(a) in relation to the drawdown of an Advance, the proportion (expressed
as a percentage) which that Bank's Commitment forms of the Total
Commitments; and
(b) for all other purposes, the proportion (expressed as a percentage)
which the amount of the facility limit of that Bank bears to the total
facility limit of such facility;
"Repayment Date" has the meaning attributed to it in subclause 5.4;
--------------
"Required Banks" has the meaning attributed to it in the Intercreditor
--------------
Agreement;
"Sale Event" means ▇▇▇▇ ceasing to be a direct or indirect Subsidiary of
----------
the Parent Company;
"Second Tier Facilities" shall have the meaning attributed to it in the
----------------------
Intercreditor Agreement;
"Security" means collectively the International Security and US Security
--------
together with any security from any Group Company in favour of the Banks
existing at the Closing Date and includes each or any part of it;
"Senior Funded Debt" means, at any time, (a) Funded Debt minus (b)
------------------
Subordinated Indebtedness;
"SFET Facility" has the meaning attributed to it in Recital A;
-------------
"Shareholder Notes" shall mean all promissory notes now or hereafter issued
-----------------
by the Parent Company to any shareholder in connection with the repurchase
of such shareholder's share capital of the Parent Company or issued by Law
Companies Group Ltd or HKS Trust in connection with the repurchase of any
synthetic stock issued by Law Companies Group Limited or HKS Trust;
"Specified Subsidiaries" means the companies listed in Schedule 2;
----------------------
"Sterling" and "(Pounds)" means the lawful currency of the United Kingdom;
-------- --------
"Sterling Equivalent" means, on any date, in relation to any sum
-------------------
denominated in any currency other than sterling, the amount determined by
Barclays to be the amount in sterling which would be required to purchase
that amount of that other currency at Barclays Bank PLC's spot rate of
exchange for the purchase of that other currency with sterling at or about
11 am (London time) on that date;
"stock" includes shares;
-----
"stockholders" includes shareholders;
------------
"Subordinated Indebtedness" shall mean any Indebtedness of the Parent
-------------------------
Company or an Obligor that is subordinated in certain instances in right of
payment to the prior payment in full in cash of the Obligations and any
Indebtedness of any Group Company to any Bank, Bank Affiliate, Agent
-12-
or International Collateral Agent on terms and conditions satisfactory to
the Required Banks, including, without limitation, those Intercompany Notes
executed by the Parent Company and the Shareholder Notes;
"Subsidiaries" of any Person means any corporations or other entities of
------------
which a majority of all the outstanding share capital (including director's
qualifying shares) or other securities or ownership interests having
ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions is, at the time as of which any
such determination is being made, directly or indirectly owned by such
Person, or by one or more of the Subsidiaries of such Person, and which
corporation or other Person is consolidated with such Person for financial
reporting purposes. Unless otherwise specified, "Subsidiaries" and
"Subsidiary" shall mean the Subsidiaries and a Subsidiary, respectively, of
the Parent Company;
"Substitute Facility" has the meaning attributed to it in subclause
-------------------
10.3(b);
"SunTrust" means SunTrust Bank, Atlanta (being a Georgia banking
--------
corporation);
"SunTrust Interest Rate Contracts" has the meaning attributed to it in the
--------------------------------
US Credit Agreement;
"Tax" means, with respect to any person or entity, any federal, state or
---
foreign tax, assessment, customs duties, or other governmental charge, levy
or assessment (including any withholding tax) upon such person or entity or
upon such person's or entity's assets, revenues, income or profits, other
than income taxes imposed upon any Bank by the jurisdictions (or any
political sub-division thereof) in which such Bank has its principal office
or office from which its Advances or any other outstandings are made
available, or in which such Bank is incorporated;
"Total Liabilities" includes all obligations of the Parent Company and its
-----------------
Subsidiaries, on a consolidated basis, which in accordance with generally
accepted accounting principles are classified in the consolidated balance
sheet of the Parent Company and its Subsidiaries as liabilities, and in any
event shall include all (a) obligations for borrowed money or which have
been incurred in connection with the acquisition of property or assets, (b)
obligations secured by any Encumbrances upon property or assets owned by
the Parent Company or any Subsidiary, even though such person has not
assumed or become liable for the payment of such obligations, (c)
obligations created or arising under any conditional sale or other title
retention agreement with respect to property acquired by the Parent Company
or any Subsidiary, notwithstanding that the rights and remedies of the
seller, lender or lessor under such agreement in the event of default are
limited to repossession or sale of property, and (d) capitalised lease
obligations;
"Transferee" means a bank or other financial institution to which a Bank
----------
has transferred all or part of its rights and/or obligations under the Loan
Documents in accordance with Clause 25;
"Transfer Certificate" means a certificate substantially in the form set
--------------------
out in Schedule 15 signed by a Bank and a Prospective Transferee whereby:
(a) such Bank seeks to transfer to such Prospective Transferee all or part
of such Bank's rights and/or obligations under the Loan Documents
subject to and upon the terms and conditions set out in Clause 25; and
(b) such Prospective Transferee undertakes to perform those obligations it
will assume as a result of delivery of such certificate to the Agent
as contemplated in Clause 25;
"Total Commitments" means the aggregate of the Commitments of all of the
-----------------
Banks;
"UK Qualifying Subsidiary" means any company listed in Schedule 1;
------------------------
-13-
"United Kingdom" means the United Kingdom of Great Britain and Northern
--------------
Ireland;
"United States of America" and "US" means the United States of America, its
------------------------ --
fifty States, the District of Columbia and its territories and possessions;
"US Additional Guarantor" has the meaning attributed to it in subclause
-----------------------
15.3(a)(i);
"US Collateral Agent" has the meaning attributed to it in the Intercreditor
-------------------
Agreement;
"US Commitments" means the Commitments as defined in the US Credit
--------------
Agreement;
"US Credit Agreement" means the second amended and restated revolving
-------------------
credit agreement dated of even date between the Parent Company, certain of
its Subsidiaries, certain banks and SunTrust as agent;
"US Group Company" means any Group Company incorporated or otherwise
----------------
organised in the United States of America;
"US Guarantors" means the "Guarantors" as defined in the US Credit
-------------
Agreement;
"US Security" means the Security from time to time granted by any Group
-----------
Company to the US Collateral Agent;
"US Security Documents" means the "U.S. Security Documents" as defined in
---------------------
the US Credit Agreement;
"US Subsidiary" shall mean any Subsidiary of the Parent Company that is
-------------
incorporated or otherwise organised in the United States;
"Working Capital" has the meaning attributed to it in the US Credit
---------------
Agreement.
1.2 Reference to any statutory provision includes any amended or re-enacted
version of such provision with effect from the date on which it comes into
force.
1.3 Save as otherwise expressly provided herein, references in this Agreement
to this Agreement or any other document include reference to this Agreement
or such other document as varied, supplemented and/or replaced as agreed
between the parties to it or as permitted hereby or to which such parties
shall have consented from time to time.
1.4 References to Recitals, Clauses, subclauses, paragraphs, Schedules and
annexures are to be construed as references to the recitals, clauses,
subclauses, paragraphs, schedules and annexures of this Agreement unless
otherwise stated.
1.5 Clause headings are for convenience only and shall not affect the
construction hereof.
1.6 The words "other" or "otherwise" and "whatsoever" shall not be construed
ejusdem generis or be construed as a limitation upon the generality of any
preceding words or matters specifically referred to. The words "including"
and "in particular" shall be construed as being by way of illustration or
emphasis and shall not limit the generality of any preceding words nor
exclude any words not included in any preceding words.
-14-
2. PURPOSE OF THE FACILITIES
2.1 The Facilities shall be utilised to assist with the relevant Obligor's
additional working capital requirements, capital expenditure requirements
and general corporate purposes.
2.2 Without prejudice to the obligations of the Obligors to apply amounts
borrowed in accordance with this Clause 2 or Clause 3, no Bank, Bank
Affiliate, Agent or Collateral Agent shall be under any duty to check that
the Obligors have done so.
3. NATURE OF THE LOAN FACILITY AND UTILISATION
OF THE LOAN FACILITY TO REFINANCE EXISTING BORROWINGS
3.1 The Loan Facility may, subject as stated below, be utilised in the case of
subclauses 3.1(a) to (c) and (e) below by ▇▇▇▇ and in the case of subclause
3.1(d) by all or any of UK Qualifying Subsidiaries, by way of the following
facility types and where relevant in accordance with the provisions of the
Schedules related thereto:
(a) a sterling committed money market loan ("Money Market Loan") on the
-----------------
terms set out in Schedule 6; and/or
(b) a sterling overdraft ("Overdraft") on the terms set out in Schedule 7;
---------
and/or
(c) a Banks' managed rate facility ("BMRF") on the terms set out in
----
Schedule 8; and/or
(d) a short term sterling overdraft ("Local UK Overdraft") for all or any
------------------
of the UK Qualifying Subsidiaries of up to (Pounds)298,329 (or such
other amount as All Banks may agree from time to time) in aggregate on
terms equivalent to those set out in Schedule 7; and/or
(e) a short term facility of up to an amount as calculated in accordance
with Schedule 10 on the terms set out in Schedule 10 (the "HKS
---
Synthetic Stock Facility").
------------------------
Provided that neither ▇▇▇▇, nor as regards subclause 3.1(d) above the UK
Qualifying Subsidiaries, shall be entitled to request any utilisation of
the Loan Facility if, as a result of and after such utilisation:
(i) the Loan Outstandings would exceed the sum of (aa)
(Pounds)4,474,940 less (bb) any permanent reduction of the Loan
Facility less (cc) the sum of the Sterling Equivalent of the
facility limits of any Local Facilities; or
(ii any applicable limit or sub-limit of the Loan Facility would be
breached.
4. PROVISION OF LOCAL FACILITIES AND EFFECT ON LOAN FACILITY AVAILABILITY
4.1 ▇▇▇▇ requests the Banks and/or any Bank Affiliate to make short term
revolving loan facilities of up to (Pounds)1,551,313 (or its equivalent in
other currencies) in aggregate (each a "Local Facility") available to any
--------------
Specified Subsidiary, and if any Bank and/or any Bank Affiliate does so,
the amount of the Loan Facility available for drawing by ▇▇▇▇ (and, to the
extent permitted, UK Qualifying Subsidiaries and the HKS Stock Borrowers
hereunder) shall be reduced by an amount equal to the aggregate for the
time being of the Local Facilities.
4.2 The relevant Bank and/or any Bank Affiliate shall notify ▇▇▇▇ if it makes
any such Local Facility available as contemplated under subclause 4.1 and,
on each occasion on which a Local Facility is to be utilised, may not allow
such utilisation if, as a result of and after such utilisation any of the
conditions in subclauses 3.1(i) or (ii) would occur.
-15-
4.3 ▇▇▇▇ acknowledges that the Banks have indicated that Local Facilities will
only be available at their sole discretion and on terms that the Specified
Subsidiaries provide security in the terms required by the Banks for all
liabilities of the relevant Specified Subsidiary in respect of the Local
Facility made available to it and such liabilities are guaranteed by the
Chargors in the form required by the Banks.
5. DURATION OF LOAN FACILITY
5.1 The Loan Facility shall be a committed facility available for a term
expiring on 6 February 1998 (or close of business on the date falling 364
days after the Closing Date if earlier) (such expiry date being referred to
herein as the "Initial Repayment Date").
----------------------
5.2 The Parent Company may, 90 days prior to the Initial Repayment Date,
approach the Banks and request that the Banks extend the Facilities for a
further 364 days. If the Facilities are so extended, the new expiry date
as so extended shall be referred to herein as the "Extended Repayment
------------------
Date".
----
5.3 The Parent Company may, 90 days prior to the Extended Repayment Date,
approach the Banks and request that the Facilities be extended for a
further period of 364 days. If the Facilities are so extended, the new
expiry date as so extended shall be referred to herein as the "Final
-----
Repayment Date".
--------------
5.4 The term "Repayment Date" when used in this Agreement shall mean, prior to
--------------
the Initial Repayment Date, the Initial Repayment Date; if the Facilities
are extended in accordance with subclause 5.2, it shall mean the Extended
Repayment Date; and if the Facilities are extended in accordance with
subclause 5.3, it shall mean the Final Repayment Date.
5.5 The Banks may refuse to extend the Facilities following a request from the
Parent Company under subclauses 5.2 or 5.3 above at their sole discretion.
None of the Facilities shall be extended without prior All Bank approval.
6. SFET FACILITIES
6.1 With effect from the Effective Date, the Original SFET Facilities shall
continue on the terms of the SFET Facility hereunder.
6.2 Liabilities outstanding under the Original SFET Facility as at the
Effective Date shall continue and shall, without limitation to the
generality of the foregoing, continue to be included at the amount of their
gross risk for the purpose of calculating utilisation of the SFET Facility
under Schedule 9.
6.3 From the Effective Date ▇▇▇▇ may continue to utilise the SFET Facility on
the terms and subject to the limit and conditions set out in Schedule 9.
7. GUARANTEE FACILITY
7.1 With effect from the Effective Date, the Original Bank Guarantee Facility
shall be terminated and replaced by the Guarantee Facility.
7.2 All bank guarantees issued under the Original Bank Guarantee Facility and
outstanding at the Effective Date shall from the Effective Date be treated
as if they had been issued under the
-16-
Guarantee Facility and shall, without limitation to the generality of the
foregoing, be included in the calculation of the Outstanding Amounts of the
Bank Guarantees for the purposes of this clause.
7.3 The Guarantee Facility will be available for utilisation by ▇▇▇▇ from the
Effective Date on the following terms and conditions:
(a) no Bank shall be obliged to issue any Bank Guarantee until ▇▇▇▇ has
provided the Agent with such information, evidence and other
documentation relating to that Bank Guarantee and the proposed
beneficiary under it as the Banks may require;
(b) each Bank Guarantee shall be issued on behalf of and for the account
of ▇▇▇▇ (unless otherwise agreed by the Banks at their sole
discretion) and shall be in favour of a beneficiary acceptable to the
Banks and otherwise on terms agreed by the Banks in their sole
discretion and for the avoidance of doubt such beneficiary may include
in particular any Bank Affiliate or correspondent bank to which any
Bank issues a Bank Guarantee to secure banking facilities made
available by such beneficiary to a Group Company acceptable to the
Banks;
(c) no Bank shall be obliged to issue any Bank Guarantee after the
Repayment Date;
(d) no Bank shall be obliged to issue any Bank Guarantee at any time
before the Repayment Date with a term of more than five years or with
no specified term, unless ▇▇▇▇ shall, prior to the issue of such Bank
Guarantee, deposit with such Bank and/or any of its Bank Affiliates as
cash cover an amount equal to the Outstanding Amount of that Bank
Guarantee (or, if the Banks so require, its Sterling Equivalent on
the proposed issue date) and, if any Bank so requires, execute a first
fixed charge in favour of the issuing Bank with the issuing Bank
and/or any of its Bank Affiliates over that deposit on terms
satisfactory to the Banks;
(e) each Bank Guarantee shall be denominated in sterling or in such other
currency as the Banks may from time to time agree;
(f) no Bank shall be obliged to issue any Bank Guarantee whose Sterling
Equivalent on the proposed issue date, when aggregated with the
Sterling Equivalent on that day of the Outstanding Amounts of all
other Bank Guarantees (including bank guarantees outstanding under the
Original Bank Guarantee Facility) then outstanding would exceed the
sum of (aa) (Pounds)5,966,587 less (bb) any permanent reduction of the
Guarantee Facility.
7.4 Barclays Bank PLC has issued:
(a) a guarantee in favour of British Bank of the Middle East Qatar in the
maximum amount of 142,000 Qatar Riyals on 27 September 1990 (the
"Qatar Guarantee"); and
(b) a guarantee in favour of Barclays Bank of Kenya Limited in a maximum
amount of (Pounds)250,000 in relation to overdraft facilities granted
to ▇▇▇▇ Eastern Africa Limited under a bank guarantee dated 1 March
1995 (the "Kenya Guarantee").
The Kenya Guarantee and the Qatar Guarantee shall be treated as if they had
been issued under the Guarantee Facility and shall, without limitation to
the generality of the foregoing, be included in the calculation of the
Outstanding Amounts of the Bank Guarantees for the purposes of this clause
7.
7.5 ▇▇▇▇ or the relevant Specified Subsidiary, as applicable, shall pay to the
Agent for the account of the relevant Banks guarantee commission in
Sterling during the period from the date of issue of each relevant Bank
Guarantee until the date on which no further claims may be made on the
-17-
relevant Banks thereunder, such guarantee commission to be payable in
advance on the issue date of that Bank Guarantee and on the last Business
Day of each successive 3 months ending after the issue date and calculated
on the Sterling Equivalent of the Outstanding Amount of that Bank Guarantee
on the date of payment for the next 3 months at the rate as set out below:
STERLING EQUIVALENT OF
THE OUTSTANDING AMOUNT
OF THE BANK GUARANTEES PERCENTAGE COMMISSION
up to (Pounds)50,000 2.50% per annum
up to (Pounds)250,000 2.50% on the first (Pounds)50,000 and 2.00% on
the balance
above (Pounds)250,000 2.50% on the first (Pounds)50,000
2.00% on the next (Pounds)250,000
1.75% on the balance
7.6 In consideration of the Banks making available the Guarantee Facility, ▇▇▇▇
and each Specified Subsidiary hereby agrees to pay to the Agent for the
account of the relevant Banks immediately upon demand by the Agent from
time to time an amount equal to (and, unless the Agent shall specify to the
contrary, in the same currency as) each amount demanded of or paid out by
any Bank or the Agent under or pursuant to any Bank Guarantee and to keep
each Bank and the Agent fully indemnified on demand from and against all
actions, proceedings, liabilities, claims, demands, damages, costs and
expenses in relation to or arising out of or appearing to any Bank to arise
out of any Bank Guarantee and to pay to the Agent for its account and/or
that of the relevant Banks, as appropriate, immediately upon demand by the
Agent from time to time all payments, losses, charges, damages and expenses
suffered or incurred by the Agent or any Bank in consequence of any Bank
Guarantee or arising therefrom whether directly or indirectly.
7.7 ▇▇▇▇ and each Specified Subsidiary irrevocably authorises and directs the
Agent and the Banks to make any payments and comply with any demands which
may be claimed or made or appear to the Agent or the Banks to be claimed or
made under or in connection with any Bank Guarantee without any reference
to or further authority, confirmation or verification from ▇▇▇▇ or the
Specified Subsidiary and regardless of whether or not ▇▇▇▇ or the Specified
Subsidiary shall be in any way in breach of any of its obligations under or
by virtue of the transaction for which that Bank Guarantee was issued and
without making any investigation as to the bona fide nature, validity or
genuineness of any such claim or demand and agrees that any payment which
the Agent or the Banks may from time to time make in accordance with or
appearing to the Agent or the Banks to be in accordance with its
obligations under any Bank Guarantee shall be binding upon ▇▇▇▇ or the
Specified Subsidiary (as appropriate) and shall be accepted by ▇▇▇▇ or the
Specified Subsidiary (as appropriate) as conclusive evidence that the Agent
or the Banks were liable to make such payment or comply with such demand.
The liability of ▇▇▇▇ or the Specified Subsidiary (as appropriate)
hereunder and the right and obligation of the Agent or the Banks to make
any such payment or comply with any such demand shall not be diminished or
prejudiced if it should appear that, as between ▇▇▇▇ or the Specified
Subsidiary (as appropriate) and the relevant beneficiary, that beneficiary
was not entitled for any reason to demand payment under the relevant Bank
Guarantee or that such claim or demand was not valid or genuine.
7.8 ▇▇▇▇ and each Specified Subsidiary hereby agrees that any demand made upon
the Agent or any Bank for payment of any sum under or pursuant to any Bank
Guarantee shall for all purposes be deemed to be a valid and effective
demand and the Agent or any Bank shall be entitled to treat it as such
notwithstanding any lack of authority on the part of the person making the
demand. ▇▇▇▇ and each Specified Subsidiary further agrees that its
liability hereunder shall apply to any extension, renewal or variation of
any Bank Guarantee or any indemnity including a general indemnity to
Barclays Bank PLC from ▇▇▇▇ dated 28 March 1990 and the Indemnity.
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8. DRAWDOWN
Subject to Clauses 3 and 5 above and subject to satisfaction of the
conditions precedent in subclause 28.1, ▇▇▇▇ and, to the extent permitted
under subclause 3.1(d) above, all or any the UK Qualifying Subsidiaries may
request an Advance under the Loan Facility in a minimum amount of
(Pounds)250,000 and thereafter in a multiple of (Pounds)10,000 on any
Business Day on or before, in respect of the Loan Facility, the Repayment
Date, after which date the Banks' commitment to provide the respective
Facility shall lapse and all undrawn amounts will be deemed to have been
cancelled. ▇▇▇▇ or any UK Qualifying Subsidiary shall give ▇▇▇▇▇▇ Masding
(on telephone number ▇▇▇▇ ▇▇▇ ▇▇▇▇) at the ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ branch
of Barclays Bank PLC or such Bank, branch or other person as the Agent may
designate (the "Branch") notice by telephone of its intention to draw not
later than 12.00 noon on the Business Day prior to the proposed drawing
date stating the required amount of the Advance, the Interest Period for it
and giving instructions for the payment of funds. If those instructions do
not stipulate that the funds must be credited to ▇▇▇▇'▇ current account
with the Branch, such instructions must be confirmed by letter to the Agent
at the earliest opportunity.
9. INTEREST
9.1 Interest will accrue during each Interest Period for an Advance under the
Loan Facility at the rate determined by the Agent to be the aggregate of
(i) the Banks' Margin (as defined in subclause 9.2) (ii) the cost of
sterling deposits (being the annual percentage rate at which Sterling
deposits are offered to Barclays Bank PLC in the London Interbank Market on
the first day of that Interest Period in an amount and for a period
comparable to such Advance and such Interest Period) and (iii) the
Associated Costs, calculated in accordance with Schedule 11;
9.2 For the purposes of this Agreement, the term "the Banks' Margin" shall mean
the amounts as calculated in accordance with the following:
(a) where the ratio of Senior Funded Debt to EBITDA when tested in
accordance with subclause 20.1 is greater than 1.75 to 1.00 for the
fiscal quarter preceding the fiscal quarter which immediately precedes
the start of the relevant Interest Period the Banks' Margin shall be
3.50%;
(b) where the ratio of Senior Funded Debt to EBITDA when tested in
accordance with subclause 20.1 is greater than 1.25 to 1.00 but less
than or equal to 1.75 to 1.00 for the fiscal quarter preceding the
fiscal quarter which immediately precedes the start of the relevant
Interest Period, the Banks' Margin shall be 3.00%;
(c) where the ratio of Senior Funded Debt to EBITDA when tested in
accordance with subclause 20.1 is greater than 1.00 to 1.00 but less
than or equal to 1.25 to 1.00 for the fiscal quarter preceding the
fiscal quarter which immediately precedes the start of the relevant
Interest Period, the Banks' Margin shall be 2.50%;
(d) where the ratio of Senior Funded Debt to EBITDA when tested in
accordance with subclause 20.1 is less than or equal to 1.00 to 1.00
for the fiscal quarter preceding the fiscal quarter which immediately
precedes the start of the relevant Interest Period, the Banks' Margin
shall be 2.00%.
9.3 Each Interest Period for an Advance under the Loan Facility shall be of 3
months' duration, or such other duration as may be applicable hereunder or
agreed between the Agent and ▇▇▇▇, commencing on drawdown of that Advance
or on the last day of its preceding Interest Period.
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9.4 If a rollover date for an Advance falls immediately prior to the Repayment
Date, the amount to be repaid will be rolled over for the period until the
Repayment Date.
9.5 ▇▇▇▇ may draw up to 6 Advances under the Loan Facility, provided that no
more than 6 Advances in aggregate are outstanding under the Loan Facility
at any one time. If a subsequent Advance is made in excess of the number
permitted, the first Interest Period for such Advance shall end on the
expiry of the then current Interest Period applicable to an existing
Advance under the same Facility and such Advances shall be consolidated
(unless the Agent expressly otherwise agrees).
9.6 Interest will be calculated on the basis of actual days elapsed over a 365-
day year and will be payable in arrear by ▇▇▇▇ or, as appropriate, the
relevant UK Qualifying Subsidiary on the last Business Day of each Interest
Period, except that if an Interest Period exceeds six months, interest
shall be payable six-monthly in arrear and on the last day of such Interest
Period.
9.7 Reference to the London Interbank Market shall, if such market no longer
exists in comparable form, be construed as meaning the appropriate
alternative source of funds as reasonably determined by the Agent.
9.8 Where the Banks' Margin alters during an Interest Period for an Advance,
the Banks shall calculate the revised amount of interest due from ▇▇▇▇ or
the relevant UK Qualifying Subsidiary (the "Affected Party") in respect of
--------------
that Advance and shall notify the Affected Party of the revised amount due
(the "revised amount"). If the revised amount is less than the amount paid
or to be paid on the last Business Day of the Interest Period in connection
with which the calculation is being made, the Banks shall notify the
Affected Party of the revised amount and shall either (a) if the interest
has been paid, the Bank shall credit the account of the Affected Party with
the difference between the amount paid and the revised amount; or (b) if
the interest has not been paid, the Affected Party shall pay the revised
amount on the last Business Day of the relevant Interest Period. If the
revised amount is more than the amount of interest paid or to be paid, the
Bank shall notify the Affected Party of the revised amount and either (a)
if the interest has been paid, the Affected Party shall pay to the Bank the
difference between the amount paid and the revised amount within three
Business Days of being notified by the Bank; or (b) if the interest has not
been paid, the Affected Party shall pay the revised amount on the last
Business Day of the relevant Interest Period.
10. CHANGE OF CIRCUMSTANCES AND SALE EVENT
10.1 In the event of:
(a) any change in applicable law, regulation or practice resulting in any
Bank being subjected to any new or additional tax, levy, duty, charge,
penalty, deduction or withholding of any nature (other than tax on
such Bank's overall net profits and gains), or
(b) any existing requirements of the Bank of England or any governmental,
fiscal, monetary, regulatory or other authority affecting the conduct
of any Bank's business being changed or any new requirements being
imposed (whether or not having the force of law), including, without
limitation, a request or requirement which affects the manner in which
such Bank allocates capital resources to its commitments, including
its obligations under this Agreement,
and the result is in the sole opinion of the Agent (directly or indirectly)
to increase the cost to such Bank of funding, making available or
maintaining any Facility or to reduce the amount of any payment received or
receivable by such Bank or to reduce the effective return to such Bank by
an
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amount which such Bank deems material, then the relevant Obligor shall
pay to such Bank on demand such sum as may be certified in writing by the
Agent to that Obligor as necessary to compensate such Bank for such
increased cost or such reduction.
10.2 ▇▇▇▇ or the relevant UK Qualifying Subsidiary may, at any time within six
weeks after the date of certification from the Bank under the preceding
sub-clause, prepay all (but not part) of such Facility as is attributable
to such Bank without penalty, by giving not less than five Business Days'
irrevocable notice to the Agent to that effect specifying the prepayment
date. ▇▇▇▇ or the relevant UK Qualifying Subsidiary shall be obliged to
prepay such Facility to the Agent on such date, together with all interest
accrued to the date of actual payment and all other sums due to such Bank
hereunder (including without limitation broken Interest Period costs
recoverable under subclause 29.4(c) if such repayment shall not fall at the
end of an Interest Period for any Advance being prepaid). Unless
prepayment is made within such period of six weeks, an amount equal to such
increased cost or such reduction will be payable by the relevant Obligors
to the relevant Bank under the preceding sub-clause from the date of such
certification.
10.3 In the event of a Sale Event:
(a) Where the Loan Facility granted by the Bank to ▇▇▇▇ shall, at the
option of the Bank, be continued in whole or in part after the sale,
the Bank may, at the option of the Bank in addition grant to the
Parent Company and the Parent Company shall accept additional
facilities on identical terms and conditions as to rate of interest
and date of repayment (each an "Additional Facility") with a facility
-------------------
limit equal to the facility limit applicable to the original Facility
made available to ▇▇▇▇ and the Parent Company shall immediately (i)
draw down such Additional Facility to the same extent as ▇▇▇▇ had
utilised the original Facility immediately prior to the Sale Event and
(ii) the First Tier Facilities shall be permanently and
proportionately reduced in accordance with the Intercreditor Agreement
by an amount equal to the remaining Availability under such Additional
Facility. Any money so drawn down under sub-clause 10.3(a)(i) shall be
added to the net proceeds of sale of ▇▇▇▇ and paid to and applied by
the Intercreditor Agreement Agent as if the money so borrowed were net
proceeds of sale of ▇▇▇▇.
(b) Where the Loan Facility granted to ▇▇▇▇ shall be repaid on or before
the completion of such sale, the Bank shall cancel such facility and
may, at the option of the Bank, grant to the Parent Company and the
Parent Company shall accept substitute facilities on identical terms
and conditions as to rate of interest and date of repayment (each a
"Substitute Facility") with a facility limit equivalent to the
-------------------
cancelled Facility and the Parent Company shall immediately (i) draw
down on such Substitute Facility to the same extent as the original
Facility had been utilised by ▇▇▇▇ immediately prior to its
cancellation and (ii) the First Tier Facilities shall be permanently
and proportionately reduced in accordance with the Intercreditor
Agreement by an amount equal to the remaining Availability under such
Substitute Facility. Any money so drawn down under subclause
10.3(b)(i) by the Parent Company under the Substitute Facility shall
be added to the net proceeds of sale of ▇▇▇▇ and shall be paid to and
applied by the Intercreditor Agreement Agent as if the money so
borrowed were net proceeds of sale of ▇▇▇▇.
10.4 Any Additional Facility or Substitute Facility granted pursuant to
subclause 10.3 shall be deemed to be a Facility and replace the original
Facility for the purposes of this Agreement and the Security and be a First
Tier Facility and replace the original Loan Facility for the purposes of
the Intercreditor Agreement and all Loan Documents.
10.5 For the avoidance of doubt, an Obligor shall not be required to make any
payment to the Bank under subclause 10.1 where the sum which is the subject
of such demand is fully compensated for by the operation of Schedule 11 or
is attributable to any law or regulation to the extent
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implemented in accordance with the paper entitled "International
Convergence of Capital Measurement and Capital Standards" dated July 1988
(as amended prior to the date of this Agreement) prepared by the Basle
Committee on Banking Regulation and Supervisory Practices in the terms
existing as at the date of this Agreement.
11. FEES
11.1 NON-UTILISATION FEE
▇▇▇▇ or the relevant UK Qualifying Subsidiary (as appropriate) shall pay to
the Banks a non-utilisation fee computed at a rate as set out below (the
"Non-utilisation Rate"), calculated on the basis of a 360 day year, for the
---------------------
actual number of days elapsed on the daily undrawn and uncancelled amount
of the Facility. The fee shall be payable quarterly in arrears, the first
payment to be made on the date falling ninety days after the Effective
Date, and subsequent payments to be made quarterly thereafter. The Non-
utilisation Rate shall be calculated as follows:
(a) where the ratio of Senior Funded Debt to EBITDA when tested in
accordance with subclause 20.1 is greater than 1.25 to 1.00 for the
fiscal quarter preceding the fiscal quarter which immediately precedes
the date of calculation of the Non-utilisation Rate, the Non-
utilisation Rate shall be 0.5%;
(b) where the ratio of Senior Funded Debt to EBITDA when tested in
accordance with subclause 20.1 is greater than 1.00 to 1.00 and less
than or equal to 1.25 to 1.00 for the fiscal quarter preceding the
fiscal quarter which immediately precedes the date of calculation of
the Non-utilisation Rate, the Non-utilisation Rate shall be 0.375%;
and
(c) where the ratio of Senior Funded Debt to EBITDA when tested in
accordance with subclause 20.1 is less than or equal to 1.00 to 1.00
for the fiscal quarter preceding the fiscal quarter which immediately
precedes the date of calculation of the Non-utilisation Rate, the Non-
utilisation Rate shall be 0.25%.
11.2 ARRANGEMENT FEE
An Arrangement Fee of $650,000 will be due and payable by the Parent
Company to the Intercreditor Agreement Agent in accordance with Section
2.13(a) of the US Credit Agreement to be applied in accordance with the
provisions of the Intercreditor Agreement. The Arrangement Fee will be
distributed between the Banks and the Domestic Banks.
11.3 The Parent Company and ▇▇▇▇ hereby authorise the Agent or SunTrust on
behalf of the Banks to withdraw an amount equal to any such fees which are
due and payable under this Clause 11 from any of the accounts of the Parent
Company or ▇▇▇▇ held at SunTrust or any of the Banks.
12. LEGAL, VALUATION AND OTHER EXPENSES
The Obligors shall pay and shall indemnify each Bank on the date of this
Agreement and subsequently on demand (payment to be made within 30 calendar
days of such demand) (on a full indemnity basis and whether or not any of
the Facilities are drawn down or utilised) in respect of all costs or
expenses (including without limitation legal fees, valuation, accountancy,
consultation and documentation fees, any stamp, documentary, registration
or similar tax and communication, travel and out of pocket expenses and in
each case any applicable VAT or similar tax) in any relevant jurisdiction
incurred by any Bank, Bank Affiliate, the Agent or International Collateral
Agent in connection with: (a) the Original Facility Agreement; (b) the
October Agreement; (c) the
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carrying out of due diligence procedures, negotiation, preparation,
execution, completion of the Loan Documents or the Security or any of the
documents referred to in those Loan Documents or the Security or any
variation, amendment, extension of termination thereof or the transactions
contemplated by them; (d) the perfection, registration, maintenance,
administration, attempted enforcement, enforcement or preservation of any
of its respective rights under any of the Loan Documents or the Security or
any of the documents referred to in such Loan Documents or the Security in
any jurisdiction; and (e) the ongoing monitoring or reviewing of the
Facilities or meeting with any Domestic Bank or Group Company.
13. REPAYMENT
13.1 The Loan Facility shall be repaid in full on the Repayment Date. The
amount made available under the Loan Facility shall automatically be
permanently reduced by (Pounds)59,666 on the 15th of each month, the first
payment to be made on 15 July 1997.
Provided that if the Loan Facility has previously been reduced by such
amount (disregarding for this purpose any reduction from Disposal Proceeds)
pursuant to the terms of this Agreement, no further reduction shall be
required on the relevant date.
13.2 If any date for repayment is not a Business Day, the relevant repayment
shall be made on the preceding Business Day.
13.3 Subject as otherwise provided in this Agreement, where the relevant Obligor
is required to repay an Advance, such repayment shall be made in Sterling
on the relevant date, together with all unpaid interest accrued on that
Advance.
13.4 Notwithstanding the above, no permanent reduction in the Loan Facility made
from the proceeds of asset sales which require the consent of the Banks
hereunder shall count towards the permanent reductions required pursuant to
subclause 13.1.
13.5 To the extent that the Loan Outstandings are in excess of the Commitment of
the Banks on any mandatory permanent reduction date the Parent Company
shall immediately repay such excess Loan Outstandings to the Agent for the
benefit of the Banks.
14. PREPAYMENT AND CANCELLATION
14.1 Any Advance may be prepaid in full or in part in a minimum amount of
(Pounds)250,000 and multiples of (Pounds)10,000, in each case on maturity
of its then current Interest Period, subject to the Agent receiving not
less than seven Business Days' irrevocable written notice of the relevant
Obligor's intention to prepay.
14.2 Amounts so prepaid shall be available for redrawing in accordance with the
terms of this Agreement.
14.3 When a prepayment is made voluntarily other than on the last day of any
Interest Period relating to it, the relevant Obligor will be obliged to
make payment under subclause 30.4(c) of any breakage costs incurred by the
Agent or any Bank.
14.4 Any voluntary prepayment shall be made, together with accrued interest on
the amount prepaid and any other sums then due and payable to the Banks
under this Agreement calculated up to the date of prepayment.
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14.5 ▇▇▇▇ or the relevant UK Qualifying Subsidiary, as applicable, shall
(subject to the conditions set out below) have the right at any time to
cancel its right to utilise the whole or any part (being not less than
(Pounds)100,000 or a multiple thereof) of the Facilities insofar as they
remain undrawn by giving three Business Days prior written notice to the
Agent provided that at the same time (and so that such cancellation shall
-------------
take place on the same Business Day) the whole or a percentage of (such
percentage to be equal to the percentage of the Facilities being cancelled
hereunder) of the US Commitments are also cancelled. Any amount so
cancelled may not subsequently be drawn down.
15. INTERNATIONAL SECURITY AND US SECURITY
15.1 All Indebtedness now or subsequently owing by the Obligors to the Banks or
any Bank Affiliate shall (notwithstanding that the whole or any part of it
may be owing under a facility other than one of the Facilities) be secured
by the Security.
15.2 The Obligors consent to the Security being held by the International
Collateral Agent on behalf of the Banks, any Bank Affiliate and any other
lender which accedes to the International Security pursuant to a Deed of
Accession save that the US Security shall be held by the US Collateral
Agent on behalf of the Banks, any Bank Affiliate and the Domestic Banks and
any other lender which accedes to the US Security.
15.3 Future Guarantors and Pledgors
------------------------------
From the Closing Date and subject to the prohibitions or limitations as to
power or authority imposed by law applicable to any such Group Company, the
Obligors shall procure that:
(a) (i) each Person that is or hereafter becomes a US Group Company,
which is not (aa) a US Guarantor and (bb) a party to the
International Guarantees, (a "US Additional Guarantor") shall
-----------------------
become a guarantor under the US Credit Agreement and the
International Guarantees and pledge all of its assets,
including, to the extent owned by such US Additional Guarantor,
100% of the share capital of other US Group Companies, 65% of
the share capital of any International Group Companies and all
Intercompany Notes, to the US Collateral Agent upon the
creation of such US Additional Guarantor by executing and
delivering to the US Collateral Agent the supplemental
documents required under Schedule 5.13 of the US Credit
Agreement including any opinions addressed to the Domestic
Banks (but such opinions shall also be produced and addressed
to the Banks and any Bank Affiliate addressing such issues as
they may require, in form and substance satisfactory to the
Banks and any Bank Affiliate (provided, however, that none of
the Partially-Owned Subsidiaries shall be required to become a
US Guarantor under this Agreement or pledge any of its assets
under the US Security Documents unless and until the Parent
Company shall beneficially own, directly or indirectly, 100% of
the outstanding share capital (exclusive of directors'
qualifying shares) of such Partially-Owned Subsidiary); and
(ii) each Person that owns shares in the US Additional Guarantor or
holds any Intercompany Notes executed by the US Additional
Guarantor to pledge and deliver such shares and Intercompany
Notes to the US Collateral Agent, together with a supplement to
any other US Security Document where relevant and with stock
powers or other appropriate instruments of transfer executed by
such Person in blank;
(iii) if a US Additional Guarantor is a material US Group Company the
US Additional Guarantor shall also deliver to the US Collateral
Agent and the Banks,
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simultaneously with the Supplemental Documents, (aa) Certified
Requests for Information or Copies (Form UCC-11) or equivalent
reports, showing that there are no effective financing
statements which name the US Additional Guarantor as debtor and
(bb) an opinion rendered by legal counsel to such US Additional
Guarantor and the Person required to pledge the share capital
of the US Additional Guarantor under the US Security Documents
to the US Collateral Agent, addressing such matters as the
Required Banks may reasonably request, addressed to the Agent
and the Banks;
(b) each Person that is or becomes an International Group Company which is
not then a Chargor shall within five business days of a request from
the Agent, to the extent that it is or can be made to be lawfully able
to do so, shall join in, duly execute and deliver to the International
Collateral Agent a supplemental deed in a form approved by the
International Collateral Agent in which that International Group
Company shall (a) guarantee in favour of the Banks and any Bank
Affiliate with the intent that it should (jointly and severally with
any other guarantor) guarantee all money and liabilities at any time
due, owing or incurred to the Banks and any Bank Affiliate in respect
of the Indebtedness of any Group Company and (b) charge to the
International Collateral Agent in favour of the Banks and any Bank
Affiliate all its undertaking, property and assets by way of first
priority fixed and floating charges on substantially the same terms as
the Guarantee and Debenture, and the Parent Company agrees to notify
the Agent immediately of the existence of any such new International
Group Company;
(c) each Person that is not then a Guarantor and is or hereafter becomes
an International Group Company shall within five Business Days of a
request from the Agent and to the extent that it is or can be made to
be lawfully able to do so become a Guarantor under this Agreement by
executing and delivering to the International Collateral Agent such
documents as may reasonably be required by the International
Collateral Agent;
(d) each Person (other than the Banks, any Bank Affiliate and the Domestic
Banks) that has or hereafter acquires any share capital of or other
ownership interest in an International Group Company shall within five
Business Days of a request from the Agent and to the extent that it is
or can be made to be lawfully able to do so become a Pledgor and shall
pledge (i) 35% of such International Group Company's voting shares or
other similar ownership interest to the International Collateral Agent
in favour of the Banks and any Bank Affiliate and (ii) 65% of the
voting shares or other ownership interest and 100% of any non-voting
shares or other similar ownership interest to the US Collateral Agent
in favour of the Domestic Banks, the Banks and any Bank Affiliate:
under documents duly executed and delivered to the International
Collateral Agent in respect of subclause 15.3(d)(i) and to the US
Collateral Agent in respect of subclause 15.3(d)(ii) in form and
substance acceptable to the Collateral Agents, together with an
opinion rendered by legal counsel of such Pledgor to the Collateral
Agents, addressing such issues as are requested by the Collateral
Agents in form and substance satisfactory to the Collateral Agents,
and such evidence of corporate or partnership approval as the
Collateral Agents shall require; and
(e) each International Group Company will, if and whenever the Agent shall
so require it, and within five Business Days if such request and to
the extent that it is or can be made to be lawfully able to do so
cause to be executed in favour of the Banks and any Bank Affiliate
such new or additional charges, guarantees and/or other security over
such of its assets or classes of assets available for security as the
International Collateral Agent may from time to time specify to secure
all Indebtedness (present and future) incurred to the Banks and any
Bank Affiliate by any Group Company (whether owing under the
Facilities or otherwise) and immediately thereafter will cause such
charges, guarantees and/or security
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to be delivered to the International Collateral Agent together with
any ancillary documents which the International Collateral Agent
requires.
15.4 Where a mortgage, charge, security or guarantee is requested by the Agent
from a Group Company or Associated Company which is not a wholly-owned
subsidiary of the Parent Company, the Obligors shall procure the execution
and delivery of it to the extent that they are able to do so through the
exercise of all voting rights and powers of control available to them in
relation to such Group Company or Associated Company.
15.5 The International Collateral Agent may with the prior written consent of
the Agent hold the International Security on behalf of any other banks or
financial institutions which execute a Deed of Accession on such terms as
to priorities as the Agent may agree.
16. DISPOSAL OF CHARGED ASSETS AND PERMANENT REDUCTION OF FACILITY
16.1 Each Obligor undertakes that no International Group Company shall sell or
otherwise dispose of any of its assets which are subject to the Security
(or any interest therein) without the prior written consent of All Banks
save for sales or disposals of assets subject only to a floating charge
under the International Security which has not crystallised and which is a
sale or disposal in the ordinary course of such company's business for full
value on arms length terms to a person other than a Group Company.
16.2 Each Obligor undertakes to the Banks that:
(a) an International Group Company wishing to make a sale or disposition
of assets which requires the consent of All Banks under subclause 16.1
shall give the Intercreditor Agreement Agent at least ten days'
notice in writing of its wish to do so;
(b) any notice so given shall contain details of the assets in question,
the expected amount of consideration for the proposed sale or
disposition, the book value (if available) of that asset as shown in
the last set of audited accounts of such International Group Company,
together with a request for All Banks to consent to such sale or
disposition;
(c) the International Group Company giving such notice shall, if
reasonably so requested by the Intercreditor Agreement Agent following
receipt of it, promptly provide such supplemental information as the
Intercreditor Agreement Agent may deem (at its absolute discretion) to
be necessary or desirable to enable All Banks to consider such request
and to reach a decision thereon;
(d) it is acknowledged that All Banks shall endeavour to respond to any
such notice within ten days of such notice, but failure by any such
banks to respond to such a notice shall not be deemed to constitute
consent to any such sale or disposition; and
(e) where a sale or disposition or connected sales or dispositions does
not require the consent of All Banks under subclause 16.1 but shall
involve a consideration of (Pounds)50,000 or more (or its equivalent
in other currencies), the International Group Company shall still
inform the Intercreditor Agreement Agent in reasonable detail of such
sale or disposition at the earliest reasonable opportunity.
16.3 Each Bank shall have an absolute discretion to give or refuse a consent to
any such sale or disposition or to grant a consent subject to such
conditions as it may think fit in relation to such sale or disposition,
without assigning any reason for so doing.
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17. DISTRIBUTION OF DISPOSAL PROCEEDS
17.1 If consent is given pursuant to subclause 16.1 to a sale or disposition of
any assets which are the subject of (or which ought to have been the
subject of) a notice under subclause 16.2, the Obligors shall procure that
the Group Company selling or disposing of such assets shall, except as
stated in subclause 17.3, account to the Intercreditor Agreement Agent or
relevant Collateral Agent in full for such proceeds (less any costs,
expenses or duties associated with the sale or disposition previously
approved by the Intercreditor Agreement Agent) and the Disposal Proceeds
derived from such sale or disposition shall be apportioned or held by the
Intercreditor Agreement Agent or relevant Collateral Agent in accordance
with the terms of the Intercreditor Agreement.
17.2 The Intercreditor Agreement Agent, Agent or relevant Collateral Agent shall
hold Disposal Proceeds on trust for distribution in accordance with the
provisions of the Intercreditor Agreement.
17.3 The proceeds of book or other debts generated by the Group Companies in the
ordinary course of business prior to the Enforcement Date and paid to the
International Collateral Agent in accordance with the provision of the
Guarantee and Debenture shall be deemed (but only for the purposes of this
subclause) not to constitute Disposal Proceeds, notwithstanding that such
book debts are subject to a fixed charge under the Guarantee and Debenture.
17.4 Disposal Proceeds arising from the sale or disposition of assets subject to
the International Security shall be conclusively treated as appropriated
and applied in accordance with the terms of the Intercreditor Agreement in
such manner as the International Collateral Agent may from time to time
notify to the Parent Company (on behalf of the Group Companies)
notwithstanding that the payer or any other person may have purported to
appropriate or apply such Disposal Proceeds in some other manner.
18. REPRESENTATIONS AND WARRANTIES
18.1 Each Obligor represents and warrants that with respect to itself and its
own Subsidiaries:
(a) Corporate status of Parent Company; status of Subsidiaries; the Parent
----------------------------------------------------------
Company and each Subsidiary which is a corporation are duly organised,
existing and (where relevant) in good standing under the laws of the
jurisdictions of their respective incorporation and have all requisite
power and authority to own their respective property and assets and to
transact the businesses in which they respectively are engaged or
presently propose to engage and are duly qualified and (where
relevant) in good standing as foreign corporations wherever failure to
be so qualified and (where relevant) in good standing could have a
Material Adverse Effect. Each Subsidiary which is a partnership is
duly constituted, existing and (where relevant) in good standing under
the laws of the jurisdiction of its constitution and has all requisite
power, authority and legal right to own its property and assets and to
transact the businesses in which it is engaged or presently proposes
to engage and is duly qualified and (where relevant) in good standing
as a foreign partnership wherever failure to be so qualified and in
good standing could have a Material Adverse Effect. The Parent Company
is adequately capitalised for the purpose of carrying on its business,
was not formed solely for the purpose of acting as agent for, or as an
instrumentality of, any Subsidiary, and maintains and will continue to
maintain an identity independent of and separate from ▇▇▇▇▇▇▇▇.
(b) Power and Authority: Obligors: Each of the Obligors has the power, and
-----------------------------
has taken all necessary action (including, without limitation, any
consent of shareholders required by law or by its constitutional
documents) to authorise it to execute, deliver and perform the terms
and provisions of and to incur its obligations under this Agreement
and the other Loan Documents to which it is a party and to borrow
hereunder or otherwise utilise the Facilities. This Agreement and
each of the other
-27-
Loan Documents to which it is a party has been or, when executed, will
be duly authorised, executed and delivered by each Obligor and
constitutes the legal, valid and binding obligation of that Obligor
enforceable in accordance with its terms (except in so far as
enforceability may be limited by insolvency or similar laws of general
application affecting creditors' rights and by general principles of
equity).
(c) Power and Authority: Chargors, Pledgors and Guarantors: Each Chargor,
------------------------------------------------------
Pledgor and Guarantor has all requisite power and has, as at the date
of execution of the Guarantee and Debenture, the Pledge Agreement or
the Guarantee to which the respective Chargor Pledgor or Guarantor is
a party, taken all necessary action (including, without limitation,
any consent of shareholders required by law or by its constitutional
documents) to authorise it to execute, deliver and perform the terms
and provisions of and to incur its obligations under every Guarantee
and Debenture, Pledge Agreement or Guarantee to which it is a party.
Each Guarantee and Debenture has been duly authorised, executed and
delivered by each Chargor which is to be a party to it, each Pledge
Agreement has been duly authorised, executed and delivered by the
Pledgor which is to be a party to it and each Guarantee has been duly
authorised executed and delivered by the Guarantor which is to be a
party to it and constitutes the legal, valid and binding obligation of
the respective Chargor, Pledgor or Guarantor enforceable in accordance
with its terms (except in so far as enforceability may be limited by
insolvency or similar laws of general application affecting creditors'
rights and by general principles of equity).
(d) Compliance with other Instruments: Save as disclosed in the Disclosure
---------------------------------
Letter no Group Company is in default under any material agreement to
which it is a party, and the execution, delivery and performance by
each Obligor, Chargor and Guarantor, as the case may be, of this
Agreement, the Guarantee and Debenture, the Guarantees and the other
Loan Documents, (a) will not contravene any provision of Applicable
Law, (b) will not conflict with or be inconsistent with or result in
any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or otherwise than under the
Security result in the creation or imposition of any Encumbrance on
any of the property or assets of a Group Company pursuant to the terms
of any mortgage, deed, or other material agreement or instrument to
which a Group Company is a signatory or by which it is bound or to
which it may be subject, (c) will not violate any provision of the
constitutional documents of the Parent Company or any corporate
Subsidiary or the certificate of partnership or other document
governing the constitution or conduct of affairs of any Subsidiary
which is not a corporation, (d) will not require any Governmental
Approval and (e) otherwise than under the Security will not result in
the creation or imposition of any Encumbrance on any of the property
or assets of a Group Company. No Group Company is a party to, or
otherwise subject to any provision contained in, any instrument
evidencing Indebtedness of a Group Company, any agreement relating
thereto or any other contract or agreement (including its constitution
documents) which limits the amount of, or otherwise imposes
restrictions on the incurring of Indebtedness or contains dividend or
redemption limitations on the shares in a Group Company except for
this Agreement and the US Credit Agreement.
(e) Litigation: Except as disclosed in the Disclosure Letter, there are no
----------
actions, suits, investigations or proceedings pending or, to the
knowledge of any Group Company threatened against or affecting any
Group Company or any Group Company's properties or rights before any
court, arbitrator or administrative or governmental body in which the
amount claimed or the relevant Group Company's potential liability
exceeds $500,000 per claim or $1,000,000 in the aggregate for all
Group Companies (or the equivalent in other currencies).
-28-
(f) Financial Statements of the Parent Company: The most recent
------------------------------------------
consolidated financial statements of the Parent Company and its
Subsidiaries and the related consolidated statements of income
(including the notes thereto), with the opinion of Ernst & Young,
Certified Public Accountants and the most recent unaudited
consolidated financial statements of the Parent Company and its
Subsidiaries and the related consolidated statements of income
(including the notes thereto) are all true and correct in all material
respects and present fairly the results of their operations for,
respectively, the year then ending and the quarter then ending. No
Group Company had as at such date any significant liabilities,
contingent or otherwise (including liabilities for Taxes or any
unusual forward or long-term commitments) which were not disclosed by
or reserved against in the financial statements referred to above or
in the notes to them, and there are no material unrealised or
anticipated losses from any commitments of any Group Company. All
such financial statements were prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods involved. Since 30 September 1996, there has
been no material adverse change in the operations, business, property
or assets of, or in the condition (financial or otherwise) or
prospects of, the Parent Company and its Subsidiaries, taken as a
whole.
(g) Financial Statements of ▇▇▇▇ etc: The most recent audited consolidated
--------------------------------
accounts of each of ▇▇▇▇ and ▇▇▇▇ Holdings Ltd were prepared in
accordance with accounting principles generally accepted in the United
Kingdom and consistently applied and give (in conjunction with the
notes to them) a true and fair view of their financial condition as at
that date and the results of their operations during the financial
year then ended and, since the date to which those accounts were
prepared, neither ▇▇▇▇ nor ▇▇▇▇ Holdings Ltd nor any of their
Subsidiaries has incurred (save in the ordinary course of trading) any
liability (actual or contingent) which is substantial in relation to
▇▇▇▇ or to ▇▇▇▇ and its Subsidiaries taken as a whole.
(h) Governmental Approvals and Consents: No Governmental Approval or
-----------------------------------
consent, permission, approval or authorisation of any non-governmental
authority or Person is required to authorise, or is required in
connection with the execution, delivery and performance of this
Agreement, the Guarantee and Debentures, the Pledge Agreements, the
Guarantees or any other Loan Documents.
(i) Title to Properties: Each Group Company has good and marketable title
-------------------
to its properties, including the properties and assets reflected in
the financial statements referred to in paragraph (f) above. None of
those properties is subject to any Encumbrance except as referred to
in those financial statements, those permitted under subclause 20.6
and possible title defects and Encumbrances which do not materially
interfere with the use or materially detract from the value of such
properties or the operations of the Group Company and save as
otherwise disclosed in the Disclosure Letter.
(j) Taxes: Each Group Company has filed or caused to be filed all
-----
declarations, reports and tax returns including, in the case of the
Parent Company and each Subsidiary located in the United States, all
federal and state income tax returns which it is required by law to
file, and has paid all Taxes (save as disclosed in the Disclosure
Letter) which are shown as being due and payable on such returns or on
any assessments made against it or any of its properties. The
accruals and reserves on the books of each Group Company in respect of
Taxes are adequate for all periods. No Group Company has any
knowledge of any unpaid adjustment, assessment or any penalties or
interest of significance, or any basis for it, by any taxing authority
for any period, except those being contested in good faith and by
appropriate proceedings which effectively stay the enforcement of any
Encumbrance and the attachment of a penalty.
-29-
(k) Solvency: The Parent Company acknowledges that there are reasonable
--------
grounds for concluding that the arrangements contemplated in this
Agreement will benefit each Chargor and Guarantor and each Chargor and
Guarantor (other than IAM Environmental, Inc.) represents and warrants
that, after giving effect to its obligations and taking into account
its rights of contribution against co-guarantors, the present
realisable value of the assets of each Chargor and Guarantor exceeds
its liabilities and it retains sufficient capital reasonably to
anticipate the needs and risks of its ongoing business, and no Chargor
or Guarantor has incurred (actually or contingently) debts beyond its
ability to pay such debts as they mature.
(l) Subsidiaries: Schedule 5 correctly sets out the name of each
------------
Subsidiary and Associated Company of the Parent Company at the date of
this Agreement, the Parent Company's direct or indirect interest in it
and the jurisdiction of its incorporation. All the outstanding shares
in each such Subsidiary and Associated Company have been validly
issued and are fully paid and non-assessable and all such outstanding
shares, except as noted in Schedule 5, are owned legally and
beneficially by the Parent Company or a wholly-owned Subsidiary of the
Parent Company free of any Encumbrance or claim save as disclosed in
the Disclosure Letter. Both Law/▇▇▇▇▇▇▇▇, Inc. and Law Engineering,
Inc. have merged with and into Law Environmental and Engineering
Services Inc. Neither Law/▇▇▇▇▇▇▇▇ Inc. nor Law Engineering, Inc now
exist.
(m) Outstanding Indebtedness: Except for Borrowings existing at the date
------------------------
of this Agreement and as disclosed in the Disclosure Letter and
Borrowings arising thereafter permitted under subclause 20.5, no Group
Company has any Borrowings. As at the date of this Agreement, there
exists no default under the provisions of any instrument evidencing or
securing any Borrowings of any Group Company or of any agreement
otherwise relating to them.
(n) Pollution and Other Regulations: Except as disclosed in the Disclosure
-------------------------------
Letter
(i) Each Group Company has duly and punctually performed and
observed all material covenants, conditions, restrictions,
agreements, statutory requirements, planning consents, bye-
laws, orders and regulations affecting the Properties (or any
other property which is or was at any time occupied by any
Group Company or on which any Group Company has conducted any
activity), including relating to the Environment, and no notice
of any breach of any such matter has been received and as far
as the Obligors are aware there are no grounds for any such
notice being issued.
(ii) No Group Company has any actual or potential liability relating
to the Environment in relation to waste or other substances
used, kept or disposed of at on or in the Properties and/or the
surrounding Environment or in connection with the activities of
any Group Company on the Properties (or any other property
which is or was at any time occupied by any Group Company or on
which any Group Company has conducted any activity) or in
connection with the acts or omissions of any predecessor in
title to any of the Properties or in connection with any such
activities on freehold and leasehold properties formerly owned,
used or occupied by any Group Company.
(iii) Each Group Company is, and has at all times been, in compliance
in all material respects with Environmental Laws and has not
caused or permitted any liability to arise under them and no
circumstances exist which are known or ought reasonably to be
known which may be expected to prevent or interfere with any
-30-
Group Company being in compliance with any Environmental Laws
or result in any material liability under them.
(iv) Each Group Company has obtained and is, and has at all times
been, in substantial compliance with Environmental Permits and
no circumstances exist which may reasonably be expected to
prevent or interfere with such compliance in the future.
(v) The application of any Environmental Law to the Group or to any
Group Company is not reasonably likely to have a Material
Adverse Effect.
(o) Possession of Franchises, Licenses, Etc.: Except as set out in the
----------------------------------------
Disclosure Letter, each Group Company possesses all franchises,
certificates, licenses, permits and other authorisations from
governmental political subdivisions or regulatory authorities, that
are necessary in any material respect for the ownership, maintenance
and operation of its properties and assets, and no Group Company is in
violation of any of them in any material respect.
(p) Patents, Etc.: Except as set out in the Disclosure Letter, each Group
-------------
Company owns or has the right to use all patents, trademarks, service
marks, trade names, copyrights, licenses and other rights, free from
onerous restrictions, which are necessary for the operation of its
business as presently conducted. Nothing has come to the attention of
any Group Company, or any of their respective directors and officers
to the effect that (i) any product, process, method, substance, part
or other material presently contemplated to be sold by or employed by
any Group Company in connection with its business may infringe any
patent, trademark, service ▇▇▇▇, trade name, copyright, license or
other right owned by any other Person, (ii) there is pending or
threatened any claim or litigation against or affecting any Group
Company contesting its right to sell or use any such product, process,
method, substance, part or other material or (iii) there is, or there
is pending or proposed, any patent, invention, device, application or
principle or any statute, law, rule, regulation, standard or code
which would prevent, inhibit or render obsolete the production or sale
of any products of, or substantially reduce the projected revenues of,
or otherwise materially adversely affect the business, condition or
operations of any Group Company.
(q) Insurance Coverage: Each property of any International Group Company
------------------
is insured in terms acceptable to the Banks for the benefit of the
respective International Group Company in amounts deemed adequate by
▇▇▇▇'▇ management and no less than those amounts customary in the
industry in which the International Group Companies operate against
risks usually insured against by Persons operating businesses similar
to those of the International Group Companies in the localities where
such properties are located, and the Agent has been named loss payee
or additional insured, as its interest may appear, on all such
policies.
(r) Labour Matters: Except as set out in the Disclosure Letter, no Group
--------------
Company has experienced strikes, labour disputes, slow downs or work
stoppages due to labour disagreements which have had, or would
reasonably be expected to have, a Material Adverse Effect, and, to the
best knowledge of the Parent Company's executive officers, there are
no such strikes, disputes, slow downs or work stoppages threatened
against any Group Company. The hours worked and payment made to
employees of each Group Company have not been in violation in any
material respect of any applicable law dealing with such matters. All
payments due from any Group Company, or for which any claim may be
made against any Group Company, on account of wages and employee
health and welfare insurance and other benefits have been paid or
accrued as liabilities on the books of each Group Company where the
failure to pay or accrue such liabilities would reasonably be expected
to have a Material Adverse Effect.
-31-
(s) Intercompany Loans: All intercompany Indebtedness between any Group
------------------
Companies incorporated in the USA is evidenced by an Intercompany
Note, which Intercompany Note has been duly authorised and approved by
all necessary corporate and shareholder action on the part of the
party to it, and constitutes the legal, valid and binding obligations
of the party to it, enforceable against it in accordance with the
terms of the Intercompany Note, except in so far as enforceability may
be limited by insolvency or similar laws of general application
affecting creditors' rights and by general principles of equity.
There are no restrictions on the power of the Parent Company or any of
its Subsidiaries to repay the Indebtedness evidenced by any
Intercompany Note, except restrictions on the Parent Company contained
in this Agreement and the US Credit Agreement.
(t) Disclosure: Neither this Agreement, nor any Loan Document nor any
----------
other document, certificate or statement (including the Disclosure
Letter) furnished to the Banks by or on behalf of any Obligor, Chargor
or Guarantor in connection herewith contains any untrue statement of a
material fact or omits to state a material fact necessary in order to
make the statements contained herein and therein not misleading.
There is no fact peculiar to any Group Company or any of its
Subsidiaries which materially adversely affects or may (as far as the
Parent Company can foresee) materially adversely affect the business,
property or assets, or financial condition of any Group Company which
has not been set out in this Agreement, the Loan Documents or in the
other documents, certificates and statements furnished to the Bank by
or on behalf of any Obligor, Chargor or Guarantor prior to the date of
this Agreement in connection with the transactions contemplated by
this Agreement.
(u) ERISA: Except as disclosed in the Disclosure Letter:
-----
(i) Identification of Plans: (i) Neither the Parent Company nor any
-----------------------
ERISA Affiliate maintains or contributes to, or has maintained
or contributed to, any Plan that is an ERISA Plan, and (ii)
neither the Parent Company nor any of its Subsidiaries
maintains or contributes to, or has maintained or contributed
to, any Plan that is an Executive Arrangement;
(ii) Compliance: Each Plan has at all times been maintained, by its
----------
terms and in operation, in accordance with all Applicable Laws,
except such noncompliance (when taken as a whole) that will not
have a Material Adverse Effect;
(iii) Liabilities: Neither the Parent Company nor any of its
-----------
Subsidiaries is currently nor will it become subject to any
liability (including withdrawal liability), tax or penalty
whatsoever to any Person whomsoever with respect to any Plan
including, but not limited to, any tax, penalty or liability
arising under Title I or Title IV or ERISA or Chapter 43 of the
Code, except such liabilities (when taken as a whole) as will
not have a Material Adverse Effect; and
(iv) Funding: The Parent Company and each ERISA Affiliate has made
-------
full and timely payment of all amounts (i) required to be
contributed under the terms of each Plan and Applicable Law and
(ii) required to be paid as expenses of each Plan. No Plan has
an "amount of unfunded benefit liabilities" (as defined in
Section 4001(a)(18) of ERISA).
(v) Partially Owned Subsidiaries: The Parent Company and its Subsidiaries
----------------------------
own 50% of the issued and outstanding share capital of Law/▇▇▇▇▇, Inc.
and Envirosource Incorporated. Law Engineering and Environmental
Services, Inc owns 50% of the issued and outstanding membership
interests of Law/Spear, LLC,a Georgia limited liability company. The
-32-
Parent Company and its Subsidiaries do not own or control sufficient
outstanding share capital with the power to vote to elect a majority
of the board of directors of Law/▇▇▇▇▇, Inc. and Envirosource
Incorporated. The organisational documents of Law/Spear, LLC do not
permit Law Engineering and Environmental Services, Inc without the
consent of the other persons holding membership interests of Law/Spear
LLC to cause Law/Spear LLC to guarantee the Obligations or to ▇▇▇▇▇ ▇
▇▇▇▇ in its assets in favour of the US Collateral Agent, nor do the
organisational documents of Law/Spear LLC permit Law Engineering and
Environmental Services, Inc without the consent of the other persons
holding membership interests of Law/Spear LLC to amend the
organisational documents to provide such a guarantee or provide a
lien. The fair market value of all of the assets of Law/▇▇▇▇▇, Inc. is
approximately $10,000, the fair market value of all of the assets of
Envirosource Incorporated is less than $25,000 and the fair market
value of all of the assets of Law/Spear, LLC is less than $550,000.
(w) Burdensome Restrictions: Save as disclosed in the Disclosure Letter,
-----------------------
there are no burdensome restrictions (such as collective bargaining
agreements) under any material agreement to which any Group Company is
a party.
(x) Long Term Investments: Save as disclosed in the Disclosure Letter, no
---------------------
Group Company holds any long term Investments in contravention of
subclause 20.13 save for those Investments agreed by the Banks.
(y) Regulations: Each Group Company is in compliance, where appropriate
-----------
with Regulations G, T, U and X
18.2 Each Obligor shall be deemed to repeat the representations and warranties
contained in the preceding subclause 18.1 on each occasion when an Advance
is drawn down or rolled over and on each other occasion on which there is
any utilisation of the Facilities by reference to the circumstances then
existing.
19. POSITIVE COVENANTS
Each Obligor undertakes that unless the Required Banks otherwise agree in
writing:
19.1 Use of Proceeds: The proceeds of the Facilities will be used only for the
---------------
purposes stated in this Agreement.
19.2 Financial Information for the Parent Company: The Parent Company will
--------------------------------------------
deliver to each of the Banks:
(a) as soon as available and in any event no later than 120 days after the
end of each fiscal year of the Parent Company, an audited consolidated
balance sheet of the Parent Company and its Subsidiaries at the end of
such year, and audited statements of income and cash flow of the
Parent Company and its Subsidiaries for such fiscal year, all in
reasonable detail and with (i) the unqualified opinion of Ernst &
Young (or other independent certified public accountants of recognised
standing selected by the Parent Company and satisfactory to the Agent)
and (ii) a certificate (with supporting details) from such accountants
stating whether, to such accountant's knowledge, an Event of Default
or Potential Event of Default has occurred and is continuing as a
result of the violation of any financial covenant and as soon as
available and in any event no later than 160 days after the end of
each fiscal year of the Parent Company the management letter prepared
in connection with such audited financial statements, provided that
the Parent Company may make a change in its accounting principles in
any year, so long as (i) the Required Banks consent to such
-33-
change (which consent shall not be unreasonably withheld), (ii) such
change is clearly reflected in the annual audit report, (iii) any
principle has been accepted by the Parent Company and the Parent
Company's independent certified public accountants and is in
accordance with generally accepted accounting principles, and (iv)
this Agreement has been amended to the extent necessary to reflect
such change in the financial covenants and other terms and conditions
of this Agreement;
(b) as soon as available and in any event within 30 days after the end of
each fiscal month of each fiscal year of the Parent Company, a
consolidated balance sheet, profit and loss account and cashflow
statement of the Parent Company and its Subsidiaries as at the end of
such month, consolidated statements of income for such month and the
year to date, and accounts payable, accounts receivable and work in
progress reports (together the "Reports"), together with a brief
commentary summarising the statements and Reports and with comparisons
to the forecasts and the actual performance by the Parent Company and
its Subsidiaries for equivalent periods of the previous year, all in
reasonable detail (subject to usual and customary year end audit and
adjustments and footnote disclosures);
(c) as soon as available and in any event within 30 days or, in the case
of subclause 20.2(c)(i), 60 days after the end of each month: (i) a
certificate in the agreed terms from the Chief Financial Officer of
the Parent Company setting out for such month the sum of (aa) the
outstanding principal amount of all Advances (as defined in the US
Credit Agreement), plus (bb) the Letter of Credit Exposure on the date
----
of that certificate (where those terms in each case have the meanings
given to them in and represent amounts outstanding under the US Credit
Agreement, and so that the sum of (aa) and (bb) shall be referred to
herein as "the US Outstandings") and the sum of the outstandings under
the Facilities; (ii) a backlog report indicating as of the end of such
month the amount of uncommenced work of ▇▇▇▇; (iii) accounts payable,
accounts receivable and work in process reports in a form reasonably
acceptable to the Banks, with a brief summary explaining each such
report; (iv) a report listing all employees of the Parent Company or
its Subsidiaries that are shareholders of the Parent Company and that
left (voluntarily or involuntarily) employment of the Parent Company
or any of its Subsidiaries during such month, indicating the number of
shares of the Parent Company held by each such shareholder and whether
such shareholder executed a promissory note in favour of SunTrust in
connection with the purchase of any shares in the Parent Company; (v)
a certificate in the agreed terms from the Chief Financial Officer of
the Parent Company setting out calculations required to establish
whether the covenants set out in subclauses 20.1 to 20.10 (inclusive)
have been complied with and giving details of Subordinated
Indebtedness; and (vi) a certificate delivered each fiscal quarter
from the Chief Financial Officer of the Parent Company stating that,
to the best of his knowledge, all financial information provided was
prepared in accordance with generally accepted accounting principles
save that in the case of financial information delivered other than at
the year end of the Parent Company, such financial information will
not contain footnotes, nor will it be adjusted for non-material year
end adjustments;
(d) as soon as available and in any event within 45 days after the end of
each quarter: (i) a certificate in the agreed terms from the Chief
Financial Officer of the Parent Company accompanied by Form 10-Q (with
quarterly financial statements) with respect to such quarter as filed
with the Securities and Exchange Commission; and (ii) integrated
financial forecasts for the immediately succeeding twelve-month
period, which forecasts shall be updated to reflect actual historical
performance data reported as at the most recently ended fiscal quarter
and to reflect any changes in future expected performance (iii) a
report setting out the intercompany balances of each Group Company
with any other Group Company as at the end of such quarter;
-34-
(e) as soon as available and in any event within ten days after the end of
each quarter a certificate from the Chief Financial Officer of the
Parent Company setting out for the fiscal quarter just ended the ratio
of Senior Funded Debt to EBITDA and setting out in reasonable detail
how such calculation was made;
(f) promptly upon the approval of its board of directors and in any event
within 45 days after the end of each fiscal year of the Parent
Company, a capital expenditure budget for the succeeding year, in
reasonable detail; and
(g) with reasonable promptness, such further information regarding the
business affairs and financial condition of the Parent Company or any
Subsidiary or Associated Company as the Agent acting on behalf of the
Banks may reasonably request.
19.3 Maintenance of Books; Inspection of Property and Records: Each Obligor
--------------------------------------------------------
shall and shall procure that each Group Company shall prepare or cause to
be prepared (a) its annual statements and reports in accordance with
generally accepted accounting principles and permit any person designated
by the Agent on behalf of the Banks to visit and inspect any of its
properties, corporate books and financial records, and to discuss its
accounts, affairs and finance with the principal officers of the Parent
Company and the relevant Group Company if different during reasonable
business hours, all at such times as the Agent on behalf of the Banks may
reasonably request, provided that at any time during the continuance of a
Potential Event of Default or an Event of Default no prior notice to the
Parent Company shall be required and (b) its quarterly interim statements
and reports in accordance with generally accepted accounting principles
used by such Group Company, subject to usual and customary year-end audit
adjustments and footnote disclosures.
19.4 Maintenance of Properties: Each Obligor shall and shall procure that each
-------------------------
Group Company shall maintain, preserve, protect and keep, or cause to be
maintained, preserved, protected and kept, its properties and every part of
them in good repair, working order and condition or in no worse state than
currently, and from time to time will make or cause to be made all needful
and proper repairs, renewals, replacements, extensions, additions,
betterments, and improvements of them, so that the business carried on in
connection therewith may be properly and advantageously conducted at all
times, provided that no Group Company shall be obliged to repair or replace
any such properties which have become obsolete or unsuitable or inadequate
for the purpose for which they are used.
19.5 Insurance: Each Obligor shall and shall procure that each International
---------
Group Company shall maintain in the joint names of itself and the Agent
(or, if that is not possible, with the Banks' interest noted on each
policy) such policies of insurance in relation to its business and assets
as a prudent person carrying on a similar business to that Group Company
might be expected to maintain over such assets and/or in respect of such
liabilities (including policies to cover public, product, environmental,
terrorism and third party liability) and from time to time upon request
supply the Agent with copies for each of the Banks of all such insurance
policies or certificates of insurance or such other evidence of the
existence of such policies as may be acceptable to the Banks.
19.6 Taxes: Each Obligor shall and shall procure that each Group Company shall
-----
pay and discharge (i) all Taxes prior to the date on which penalties attach
to them and (ii) all claims (including, without limitation, claims for
labour, materials, supplies or services (collectively "Other Claims")) and,
------------
will pay all Taxes which, if unpaid, might become an Encumbrance upon any
of its property, provided that no Group Company shall be required to pay
and discharge a particular Tax so long as the legality or amount of it
shall be promptly contested in good faith and by appropriate proceedings
which effectively stay the enforcement of any Encumbrance and the
attachment of a
-35-
penalty and the Group Company, as the case may be, shall have set aside
appropriate reserves for it in accordance with generally accepted
accounting principles.
19.7 Existence and Status: Except as provided in Clause 20.4, each Obligor shall
--------------------
and shall cause each Group Company which is a corporation to maintain its
corporate existence, its material rights, franchises and licenses (for
their scheduled duration), its trademarks, tradenames and service marks
necessary or desirable in the normal conduct of its business, and (where
relevant) good standing in its state of incorporation and its qualification
and (where relevant) good standing as a foreign corporation in all
jurisdictions where its ownership of property or its business activities
cause such qualification to be required and the failure to do so could have
a Material Adverse Effect. Each Obligor shall procure that each Group
Company which is not a corporation shall maintain its present form of
existence, its material rights, franchises and licenses (for their
scheduled duration), its trademarks, tradenames and service marks necessary
or desirable in the normal conduct of its business, and (where relevant)
its good standing in the jurisdiction of its constitution and its
qualification and (where relevant) good standing as a foreign entity in all
jurisdictions where its ownership of property or its business activities
cause such qualification to be required and the failure to do so could have
a Material Adverse Effect.
19.8 ERISA: It shall and shall cause each US Group Company to deliver to the
-----
Agent on behalf of the Banks (with sufficient copies for the Banks):
(i) promptly after the discovery of the occurrence of such event with
respect to any Plan or any trust established thereunder, notice of
(aa) a "reportable event" described in Section 4043 of ERISA and the
regulations issued from time to time thereunder (other than a
"reportable event" not subject to the provisions for 30-day notice
to the PBGC under such regulations), or (bb) any other event which
could subject the Parent Company or any ERISA Affiliate to any
material tax, penalty or liability under Title I or Title IV of
ERISA or Chapter 43 of the Code;
(ii) at the same time and in the same manner as such notice must be
provided to the PBGC, or to a Plan participant, beneficiary or
alternative payee, any notice required under Section 101(d),
302(f)(4), 303(e), 307(e), 4041(b)(1)(A) or 4041(c)(1)(A) of ERISA
or Section 412(f) of the Code with respect to any Plan; and
(iii) at the request of the Agent, (aa) true and complete copies of any
and all documents, government reports and determination or opinion
letters (if any) for any Plan, or (bb) a current statement of
withdrawal liability for each Multiemployer Plan.
19.9 Litigation: The Obligors shall give prompt written notice to the Agent on
----------
behalf of the Banks of (a) any judgments entered by a court, tribunal,
administrative agency or arbitration panel in which the amount of liability
is $500,000 (or its equivalent in any other currency) or more in excess of
insurance coverage or in which the aggregate amount of liability is
$1,000,000 or more in excess of insurance coverage, and (b) any dispute
between any Group Company and any governmental or regulatory body in which
the amount in controversy is $500,000 or its equivalent in any other
currency or more and (c) any dispute which may materially and adversely
affect the normal business operations of any Group Company or any of their
respective properties and assets. The Parent Company shall provide the
Agent on behalf of the Banks (with sufficient copies for the Banks) on a
quarterly basis, together with the information required under Clause
19.2(c), the Parent Company's internal litigation reports prepared in the
course of its business, which shall set forth each action, proceeding or
claim of which any Group Company has notice, which has been commenced or
asserted against any Group Company, and in which the amount claimed or the
potential liability is $500,000 (or its equivalent in any other currency)
or more.
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19.10 Notice of Events of Default: The Parent Company shall deliver to the
---------------------------
Agent on behalf of the Banks (with sufficient copies for the Banks)
within five (5) days after any Executive Officer of any Group Company
obtains any knowledge of any condition, event or act which constitutes a
Potential Event of Default or an Event of Default, a certificate signed
by an officer of such Group Company specifying its nature, the period of
its existence and what action such Group Company proposes to take with
respect to it.
19.11 Shareholder Reports, etc: Contemporaneously with the sending or filing of
------------------------
the relevant document, the Parent Company will provide to the Agent on
behalf of the Banks (with sufficient copies for the Banks) a copy of all
proxy statements, financial statements, and reports which the Parent
Company sends to its shareholders, and copies of all regular, periodic,
and special reports, and all statements which the Parent Company files
with the Securities and Exchange Commission or any governmental authority
which may be substituted for it, or with any national securities
exchange.
19.12 Compliance Certificate: Within ninety (90) days after the end of each
----------------------
fiscal year of the Parent Company, the Parent Company shall provide to
the Agent on behalf of the Banks (with sufficient copies for the Banks) a
certificate of the Chief Financial Officer of the Parent Company in the
agreed terms (a) certifying to the best of his knowledge that no
Potential Event of Default or Event of Default has occurred and is
continuing or, if any has occurred and is continuing, a statement as to
its nature and the action which is proposed to be taken with respect to
it, and (b) setting out all calculations required to establish whether or
not the Parent Company and the Guarantors are in compliance with
subclauses 20.1 to 20.8 inclusive.
19.13 Grant of security The Parent Company will advise the Agent promptly upon
-----------------
its becoming aware of any request which it or any other Group Company or
Associated Company receives to give any mortgage or charge or other
security including guarantees and indemnities.
19.14 Ownership of Chargors, Pledgors or Guarantors: The Parent Company and
---------------------------------------------
its Subsidiaries that own any Chargor, Pledgor or Guarantor shall
maintain their percentage ownership of such Chargor, Pledgor or Guarantor
existing as at the date of this Agreement and shall not decrease its
ownership percentage in any future chargor, pledgor or guarantor pursuant
to subclause 15.3 after such date, as such ownership exists at the time
such chargor, pledgor or guarantor becomes such hereunder or under any
other Credit Document or from time to time.
19.15 Compliance with Laws, Etc.: Each Obligor shall, and shall cause each of
--------------------------
its Subsidiaries or any Associated Company, to the extent that in the
case of any Associated Company it is within such Obligors' power or
control in relation to such Associated Company or its exercise of voting
rights to do so, to comply with all Applicable Law (including, without
limitation, Environmental Laws) and other obligations applicable to or
binding on any of them where the failure to comply with such Applicable
Law or obligations would have or be expected to have a Material Adverse
Effect.
19.16 401(k) Plan: to the extent that an employer share option is available
-----------
under the 401(k) Plan, the Parent Company shall designate that all
employer matching and profit-sharing contributions be made in the share
capital of the Parent Company or in cash held temporarily in trust until
converted into share capital of the Parent Company, which conversion
shall occur at least quarterly.
19.17 Law International Sales Company: No later than 30 September of each year
-------------------------------
the Obligors shall procure that Law International Sales Company, a US
Virgin Islands company shall issue and pay a dividend to Law
International, Inc in an amount equal to the intercompany indebtedness
which has accrued with any other Group Company since 30 September of the
prior year.
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19.18 Refinancing of FLECBOA. No later than April 15, 1997, the Parent Company
----------------------
shall (1) cause all agreements relating to FLECBOA to be terminated; (2)
cause ownership of fee title to the property leased by the Parent Company
or any of its Subsidiaries in connection with FLECBOA to be transferred
to the Parent Company or such Subsidiary; (3) to have all Encumbrances on
the collateral securing FLECBOA released, other than Encumbrances
permitted under this Agreement; and (4) to execute and deliver, or cause
such Subsidiary to execute and deliver, to the US Collateral Agent a
Mortgage, in form and substance reasonably satisfactory to the Required
Banks, pursuant to which such collateral shall be pledged to the U.S.
Collateral Agent for the benefit of All Banks, together with (A) fixture
filings recorded in such jurisdictions as the Required Banks reasonably
deem necessary to perfect the security interest granted thereunder, (B) a
title insurance policy with respect to such collateral showing that the
U.S. Collateral Agent has a valid first priority lien with respect to the
Mortgaged Property located in Escambia County, Florida subject to no
encumbrances other than such Mortgage and Encumbrances permitted pursuant
to this Agreement, (C) such environmental reports as the Required Banks
shall reasonably require, (D) such legal opinions addressing such issues
as the Required Banks may reasonably require addressed to the Agent and
the Banks, and (E) all other documents, instruments, and certificates
reasonably required by the Required Banks in connection therewith.
20. NEGATIVE COVENANTS
Each Obligor undertakes that without the written consent of the Required
Banks (unless otherwise provided to require the written consent of All
Banks):
20.1 Senior Funded Debt to EBITDA: The ratio of Senior Funded Debt to EBITDA,
----------------------------
measured at the end of each fiscal quarter during the periods indicated
below shall not be greater than the ratio set forth opposite the relevant
period:
PERIOD RATIO
Closing Date through June 30 1997 2.00:1.00
1 July 1997 through 31 December 1997 1.75:1.00
20.2 Fixed Charge Coverage: The ratio of EBITDA less Capital Expenditures to
---------------------
the sum of Fixed Charges as of the last day of any fiscal quarter of the
Parent Company, commencing with the fiscal quarter ending 31 March 1997
shall not be less than 0.95:1.00.
20.3 Total Senior Funded Debt to Capital: The ratio of Total Senior Funded
-----------------------------------
Debt to Capital as of the last day of any fiscal quarter of the Parent
Company, commencing with the fiscal quarter ending 31 March 1997 shall
not be greater than 70%.
20.4 Minimum Net Worth: The Parent Company shall not permit Consolidated Net
-----------------
Worth as of the last day of any fiscal quarter, commencing with the
fiscal quarter ending 31 March, 1997, to be less than the sum of (a)
$16,500,000 plus (b) 75% of Consolidated Net Income (but not loss) for
----
the period beginning 1 January, 1997 and ending on the last day of such
fiscal quarter, plus (c) the net proceeds of any equity offering made by
----
the Parent Company or its Subsidiaries, minus (d) the aggregate amount of
-----
repurchases by the Company of its common stock in excess of $250,000 but
only to the extent approved by All Banks.
20.5 Domestic Senior Debt Coverage Ratio: The Parent Company shall not permit
-----------------------------------
the Domestic Senior Debt Coverage Ratio as of the last day of any fiscal
quarter, commencing with the fiscal quarter ending March 31, 1997, to be
greater than 2.75 to 1.0.
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20.6 Domestic Interest Coverage Ratio: The Parent Company shall not permit
--------------------------------
the Domestic Interest Coverage Ratio as of the last day of (1) the fiscal
quarter ending March 31, 1997 to be less than 0.7 to 1.0, (2) the fiscal
quarter ending 30 June 1997 to be less than 1.00 to 1.00, and (3) the
fiscal quarters ending thereafter to be less than 1.15 to 1.0.
20.7 Minimum Domestic Cash Flow: The Parent Company shall not permit EBITDA
--------------------------
of the US Subsidiaries for the rolling four-quarter period ending on the
last day of each fiscal quarter of the Company to be less than
$11,000,000.
20.8 Cashflow: For each rolling four quarter period, ending on the last day
--------
of each fiscal quarter of the Parent Company, cashflow, measured as
EBITDA generated by ▇▇▇▇ together with all other International
Subsidiaries shall not be less than the Dollar Equivalent US$7,000,000.
20.9 Capital Expenditures: The Parent Company and the Guarantors shall not
--------------------
make, or permit any of their respective Subsidiaries to make, any
expenditures for capital assets in excess of $6,000,000 during any fiscal
year of the Parent Company; provided, however, that this limitation shall
------------------
not apply to (1) the refinancing of FLECBOA and any purchases of assets
made in connection therewith and (2) expenditure by ▇▇▇▇ on the
acquisition, whether by way of finance lease or outright purchase of
corporate automobiles to be used by any International Group Company in an
amount not to exceed (Pounds)500,000.
20.10 Indebtedness and Rental Obligations: The Obligors shall not and shall
-----------------------------------
procure that no Group Company shall, or permit to the extent that it is
able to withhold its permission from any joint venture to which any Group
Company is a party such joint venture to create, incur, assume or suffer
to exist, any Borrowings or any operating lease or other rental
obligations, not existing as at the date of this Agreement and disclosed
in writing to the Banks prior to such date, except:
(a) Borrowings owed to the Banks or any Bank Affiliate under or as
contemplated by this Agreement;
(b) rental obligations which involve either real or personal property,
if the aggregate of all rental payments by the Parent Company and
its Subsidiaries in any year do not exceed 8.0% of Net Fees Budgeted
for such year;
(c) Borrowings not evidenced by a promissory note or other instrument,
incurred in the normal course of business and payable on customary
terms, including, but not limited to, salaries and bonuses and
general overhead expenses;
(d) Indebtedness incurred after 24 May 1996 for the repurchase of share
capital of the Parent Company, provided that (i) the principal
amount of such Indebtedness shall not exceed the aggregate of (aa)
$250,000, less (bb) the amount of any principal of the Shareholder
----
Notes paid in cash by the Parent Company on or after the Closing
Date, plus (cc) an amount equal to the net proceeds of sales of
----
stock of the Parent Company at any one time outstanding, (ii) after
giving effect to such incurrence of Indebtedness and corresponding
share capital repurchase, the Parent Company shall be in compliance
with Clause 20.1 above, (iii) such Indebtedness (including both
principal and interest) shall be evidenced by a Shareholder Note and
all principal and interest with respect to such Indebtedness shall
be expressly subordinated to the prior payment of all Obligations,
on terms satisfactory to the Required Banks in substantially the
form of Schedule 6.01 of the US Credit Agreement, and (iv) no
principal amount of such Indebtedness shall be due and payable until
the Obligations have been repaid in full and the Facilities have
been terminated;
-39-
(e) Indebtedness incurred under the US Credit Agreement provided that
the principal amount outstanding thereunder shall not exceed
$40,000,000 less any permanent reductions in accordance with the
Intercreditor Agreement;
(f) obligations of the Parent Company and the US Guarantors under and
with respect to the SunTrust Interest Rate Contracts as set out in
Exhibit A of the Intercreditor Agreement; provided, that the maximum
secured exposure under the Interest Rate Contracts is $200,000;
(g) endorsements of negotiable instruments for deposit or collection in
the ordinary course of business;
(h) guarantees and endorsements of employee share purchase loans and
other loans to employees, financed by the Domestic Banks in
aggregate principal amount not exceeding $1,250,000;
(i) Borrowings of any US Guarantor owing to the Parent Company and
Borrowings of the Parent Company owing to any US Guarantor, which
Borrowings shall be evidenced by Intercompany Notes pledged to the
US Collateral Agent pursuant to the Company Pledge Agreement or the
Guarantor Pledge Agreement, as the case may be, (as defined in the
US Credit Agreement) provided that:-
(i) any Borrowings of the Parent Company now or hereafter owed to
any US Guarantor is subordinated in right of payment to the
payment by the Parent Company of the Obligations such that if
a default in the payment of the Obligations shall have
occurred and be continuing, any such Borrowings of the Parent
Company owed to US Guarantor, if collected or received by such
US Guarantor, shall be held in trust by such US Guarantor for
the holders of the Obligations and be paid over to the Banks
and the Agent for application against the Obligations;
(ii) any Borrowings of any US Guarantor now or hereafter owed to
the Parent Company is subordinated in right of payment to the
payment by such US Guarantor of its Guaranty Obligations (as
defined in the US Credit Agreement) such that if a default in
the payment of the Obligations shall have occurred and be
continuing, any such Borrowings of such US Guarantor owed to
the Parent Company, if collected or received by the Parent
Company, shall be held in trust by the Parent Company for the
holders of the Obligations and be paid over to the Banks and
the Agent for application against such US Guarantor's Guaranty
Obligations;
(j) any guarantee of Borrowings permitted under paragraph (a), (e), and
(f) of this subclause 20.10;
(k) Indebtedness existing on the Closing Date and evidenced by a
Shareholder Note; provided, however, that (i) such Indebtedness may
not be refinanced after the Closing Date except with the consent of
and upon terms satisfactory to All Banks, (ii) such Shareholder
Notes may not be amended or otherwise modified in any material
respect other than modifications to extend the scheduled payment of
any interest or principal or reduce the interest rate payable
thereunder and (iii) save to the extent permitted in this Agreement,
the Parent Company may not make any principal payments on any of
such Shareholder Notes until the Obligations have been repaid in
full and the Facilities have been terminated;
-40-
(l) ▇▇▇▇ will be entitled to acquire, whether by way of finance lease or
outright purchase, cars having an aggregate purchase price not
exceeding (Pounds)500,000;
(m) the HKS Synthetic Stock up to $1,000,000 maximum; and
(n) Indebtedness in the amount of $310,000 owed in respect of the
previous purchase of 20% of the share capital of Prointec SA, a
Spanish corporation, provided that such Indebtedness shall be repaid
no faster than, or in greater amounts than, in 24 equal monthly
instalments, commencing as of January 1996.
20.11 Negative Pledge: The Obligors shall not, and shall procure that none of
---------------
the Group Companies shall create, incur, assume or suffer to exist any
Encumbrance of any kind on any of its properties or assets, real or
personal wherever located, including assets hereafter acquired, except:
(a) Encumbrances existing at the date of this Agreement and disclosed in
the Disclosure Letter where the amount secured by such security and
outstanding at the date of this Agreement is not increased at any
time during the term of this Agreement;
(b) Encumbrances over assets of any Group Company for Taxes not yet
payable or being contested in good faith and by appropriate
proceedings;
(c) deposits or pledges by any Group Company to secure payments of
workmen's compensation, unemployment insurance, old age pension and
other social security obligations;
(d) mechanics', carriers', workmen's, repairmen's, landlord's, or other
liens arising in the ordinary course of business securing
obligations which are not overdue for a period longer than 60 days,
or which are being contested in good faith by appropriate
proceedings;
(e) pledges of cash or deposits of cash by a Group Company to secure
performance in connection with bids, tenders, contracts (other than
contracts for the payment of money) or leases made in the ordinary
course of the business of any Group Company provided that, (i) at
any time, the aggregate of all such amounts so pledged and deposited
made by International Group Companies is (aa) less than $50,000 (or
its equivalent in other currencies) and, (bb) in aggregate with any
other deposit, pledge or security made by International Group
Companies and permitted under subclauses 20.11(f), (g) and (h), less
than $100,000 (or its equivalent in other currencies); or (ii) such
pledges and deposits have been agreed in writing by the Banks in
their absolute discretion;
(f) deposits of cash by a Group Company to secure, or in lieu of, surety
and appeal bonds to which any Group Company is a party provided
that, (i) at any time, the aggregate of all such amounts so
deposited by International Group Companies is (aa) less than $50,000
(or its equivalent in other currencies) and, (bb) in aggregate with
any other deposit, pledge or security made by International Group
Companies and permitted under subclauses 20.11(e), (g) and (h), less
than $100,000 (or its equivalent in other currencies); or (ii) such
deposits have been agreed in writing by the Banks in their absolute
discretion;
(g) deposits of cash in connection with the prosecution or defence of
any claim in any court or before any administrative commission or
agency, provided that, (i) at any time, the aggregate of all such
amounts so pledged and deposited by International Group Companies is
(aa) less than $50,000 (or its equivalent in other currencies) and,
(bb) in aggregate with any other deposit, pledge or security made by
International Group Companies and permitted under subclauses
20.11(e), (f) and (h), less than $100,000 (or its equivalent in
-41-
other currencies); or (ii) such deposits have been agreed in writing
by the Banks in their absolute discretion;
(h) purchase money security interests (and leases in the nature thereof)
for equipment or machinery or mortgages over real property, in each
case where such equipment machinery or real property is purchased in
the ordinary course of business and to be used in the conduct of its
business, provided that any such Encumbrance secures only the
repayment of the purchase price of such machinery, equipment or real
property and any such lease obligations do not exceed the purchase
price of such machinery or equipment; provided that, (i) at any
time, the aggregate of all amounts secured by such security
interests created by International Group Companies is (aa) less than
$50,000 (or its equivalent in other currencies) and, (bb) in
aggregate with any other deposit, pledge or security made by
International Group Companies and permitted under subclauses 20.9
(e), (f) and (g), less than $100,000 (or its equivalent in other
currencies); or (ii) the creation of such security interests has
been agreed in writing by the Banks in their absolute discretion;
(i) Encumbrances arising out of judgements or awards with respect to
which any Group Company at the time shall in good faith be
diligently prosecuting an appeal or proceedings for review and with
respect to which it shall have secured a stay of execution pending
such appeal or proceedings for review; provided that, such
Encumbrance is notified in writing to the Banks forthwith if the
Encumbrance secures more than $50,000 (or its equivalent in other
currencies) and such Encumbrance is not disapproved in writing by
the Banks;
(j) Encumbrances in favour of the Intercreditor Agreement Agent or any
of the Collateral Agents;
(k) Liens granted in any Intercompany Note in the forms specified in the
US Credit Agreement, provided that such Intercompany Notes are
pledged to the US Collateral Agent and all related UCC-1 financing
statements are assigned to the US Collateral Agent and such Lien is
subordinated to the first priority Lien granted to the US Collateral
Agent in the Security documents; and
(l) Liens with respect to cash collateral securing the CEO Letter of
Credit and, to the extent permitted under Section 6.5 of the
Intercreditor Agreement, any Bank Guarantee and any other cash
collateral securing any of the Letters of Credit and any Bank
Guarantee obtained in accordance with the Intercreditor Agreement.
20.12 Dividends: Other Restricted Payments:
------------------------------------
(a) The Parent Company shall not pay or declare any dividends on any of
its share capital other than dividends on Permitted Preferred Stock;
(b) In any fiscal year of the Parent Company, the Parent Company shall
not (i) redeem, repurchase, retire or make similar payments with
respect to any of its shares in cash or cash equivalents, or (ii)
pay any principal of, premium, if any, or interest on, or redeem,
purchase, retire or make any similar payment with respect to, any
Subordinated Indebtedness;
provided that:
(aa) the Parent Company may pay principal of the Shareholder Notes
in an aggregate amount not to exceed (1) $250,000, less (2) the
----
stated principal amount of any Shareholder Notes issued by the
Parent Company after the Closing Date in connection with a
repurchase of its common stock; and
-42-
(bb) the Parent Company may pay interest on the Shareholder Notes;
and
(cc) the Parent Company may redeem outstanding Shareholder Notes
from Persons holding such Shareholder Notes on the Closing Date
to the extent it issues Permitted Preferred Stock in exchange
therefor; and
(dd) the Parent Company may repurchase shares of its common stock to
the extent permitted by 20.10(d) and (5) HKS or HKS Trust may
repurchase shares of HKS Synthetic Stock when required with
proceeds of the HKS Synthetic Stock Facility;
(c) Save where such amendment extends the maturity of such Shareholder
Notes, no Shareholder Notes shall be amended, restated or otherwise
modified without the prior written consent of All Banks.
20.12 Merger; Joint Ventures; Sale of Assets; Acquisitions: The Parent Company
----------------------------------------------------
shall not, and shall procure that no Group Company shall:
(a) merge or consolidate with any other entity, except for (i) any
merger or consolidation of an Obligor, Chargor, Pledgor or US
Guarantor with another Group Company provided that such Obligor,
Chargor, Pledgor or US Guarantor shall be the continuing entity, and
(ii) any merger or consolidation of any Subsidiary (other than an
Obligor, Chargor, Pledgor or Guarantor) with any other Subsidiary
(other than an Obligor, Chargor, Pledgor or Guarantor) if, after
giving effect to such merger or consolidation, the continuing entity
is a wholly-owned Subsidiary of the Parent Company;
(b) enter into a partnership or joint venture with any other entity;
provided, however, that so long as no Event of Default or Potential
-----------------
Event of Default has occurred, the Parent Company or any of its
Subsidiaries may request that the Banks consent to its entering into
a partnership or joint venture for the purposes of carrying on its
business and the Banks agree to consider any such request in
conjunction with the consideration of such request by the Domestic
Banks under the US Credit Agreement; or
(c) purchase, lease or otherwise acquire for cash, share capital or
other consideration, the share capital of any Person or any
substantial portion of the assets of any Person where such share
capital, assets or other consideration have an aggregate fair market
value of more than $1,000,000, except that this subclause 20.13(c)
shall not apply to repurchases of share capital permitted pursuant
to the proviso in subclause 20.12(b)(aa).
20.13 Sale and Leaseback: No Group Company shall enter into any transaction
------------------
with any other entity whereby such other entity leases assets sold or
otherwise transferred to it by the Parent Company or such Group Company
and all proceeds obtained from such transaction are immediately paid to
the Intercreditor Agreement Agent to be applied in accordance with the
Intercreditor Agreement, except:
(i) Parent Company and its Subsidiaries may sell and lease back
computer equipment to the extent that the aggregate value of
such equipment sold and leased back does not exceed $500,000
in aggregate and the net proceeds of such sale are used to
repay indebtedness outstanding under and to permanently
reduce the First Tier Facilities in accordance with the
provisions of the Intercreditor Agreement; and
(ii) in respect of any cars ▇▇▇▇ is entitled to acquire, whether
by way of lease finance or outright purchase, cars having an
aggregate purchase price not exceeding (Pounds)500,000
pursuant to subclause 20.8(l) and notwithstanding such cars
are subject to fixed charges under the Guarantee and
Debenture, nevertheless ▇▇▇▇ will be
-43-
entitled to dispose of any such car at any time without
obtaining the prior consent of the Agent or the Banks
provided that (i) the proceeds from the disposal of such cars
will not as a result of such disposal exceed (Pounds)500,000
in aggregate and (ii) any such proceeds received upon
disposal of such cars will constitute Disposal Proceeds for
the purposes of this Agreement and the Loan Documents.
20.15 Investments, Loans, Etc.: No Group Company shall, or shall be permitted
------------------------
to, make, permit or hold any Investments (whether by way of capital
contribution, loan or other means) in any Person, or otherwise acquire or
hold any Subsidiaries, except:
(a) Investments in Subsidiaries or Associated Companies existing on the
Closing Date;
(b) direct obligations of the federal government of the United States of
America or any agency of it, or obligations guaranteed by the
federal government of the United States of America or any agency of
it, in each case supported by the full faith and credit of the
federal government of the United States of America and maturing
within one year from the date of its creation;
(c) commercial paper maturing within one year from the date of its
creation rated in the highest grade by a nationally recognised
credit rating agency;
(d) time deposits maturing within one year from the date of their
creation with, including certificates of deposit issued by, any Bank
and any office located in the United States or England of any bank
or trust company which is organised under the laws of the United
States of America or England or any state thereof and has total
assets aggregating at least $500,000,000, including without
limitation, any such deposits in Eurodollars issued by a foreign
branch of any such bank or trust company;
(e) Investments made by Plans; and
(f) Loans between Group Companies which are Chargors or US Group
Companies (excluding HKS, Law/▇▇▇▇▇ Inc. Envirosource Incorporated,
Law International Sales Company or any of their respective
Subsidiaries) to the extent that such loans are evidenced by
Intercompany Notes, pledged to a Collateral Agent, subordinated to
the extent required in subclause 20.10(i), and otherwise on terms
and conditions acceptable to the Required Banks.
(g) Employee share purchase loans, and other loans to employees,
acquired by the Parent Company in connection with honouring its
guarantee of such loans to the extent permitted under subclause
20.10(h).
20.16 Nature of Business: The Obligors shall not themselves, and shall procure
------------------
that no Group Company shall, engage in any type of business or businesses
other than those engaged in by the Parent Company or such Group Company
at the date of this Agreement, provided that nothing herein shall prevent
any Group Company (i) with the consent of the Agent from expanding the
location of its business or businesses in (aa) the United States of
America or (bb) those foreign countries in which the Parent Company or
such Group Company has engaged in business on or before the date of this
Agreement or (cc) in any other foreign country if the Parent Company (1)
gives the Agent prompt notice thereof and (2) if the aggregate amount of
assets moved or to be moved to such new country equals or exceeds five
percent (5%) of the Consolidated Net Worth of the Parent Company,
executes such additional security documents and delivers such legal
opinions as the Banks and Domestic Banks may require and (ii) from
ceasing or omitting to exercise any rights, licences, permits or
franchises which in good faith in the judgment of the Parent Company or
such Group Company can no longer be profitably exercised.
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20.17 Sale of Subsidiaries: The Obligors shall not and shall procure that none
--------------------
of their respective Subsidiaries shall sell or otherwise dispose of any
share capital of or other ownership interest in any Subsidiary (except in
connection with a merger or consolidation permitted by paragraphs (a)(i)
and (ii) of subclause 20.11 or the dissolution of any Subsidiary or the
sale of any US Subsidiaries for Sale prior to the date set forth in
subclause 18.1(v)) or permit any Subsidiary to issue any additional share
capital or other incidents of ownership, except on a pro rata basis to
all its shareholders, partners or owners, as the case may be and provided
that any such additional share capital or other incidents of ownership
issued to the Parent Company, Pledgor or any US Guarantor are pledged to
the US Collateral Agent; provided, however, that if the issuer is an
International Group Company (other than those Subsidiaries noted on
Schedule [ ] hereto), 100% of such additional non-voting share
capital or other similar incidents of ownership and 65% of such
additional voting share capital or other similar incidents of ownership
shall be pledged to the US Collateral Agent and 35% of such additional
voting share capital or other similar incidents of ownership shall be
pledged to the International Collateral Agent.
20.18 Restriction on Negative Pledges: The Obligors shall not and shall procure
-------------------------------
that no Group Company shall agree or covenant with any person to restrict
in any way its ability to grant any Encumbrance on its assets, except for
any such covenants or agreements:
(i) contained in this Agreement or the US Credit Agreement;
(ii) contained in the US Security Documents or Loan Documents; and
(iii) made in connection with Encumbrances described in subclause
20.11(h) but only if such covenant or agreement applies solely to
the specific machinery, equipment or real property to which such
Encumbrance relates.
20.19 Transactions with Affiliates: The Obligors shall not themselves, and
----------------------------
shall not permit any Group Company to:
(a) enter into any material transaction or series of related
transactions which in the aggregate would be material, whether or
not in the ordinary course of business, with any Affiliate or the
Parent Company or any of its Subsidiaries (but excluding any
Affiliate which is the Parent Company or any of its Subsidiaries),
except on terms and conditions substantially as favourable to the
Parent Company or such Subsidiary as would be obtained by the Parent
Company or such Subsidiary at the time in a comparable arm's-length
transaction with a Person other than an Affiliate.
(b) convey or transfer to any other Person (including the Parent Company
or any of its Subsidiaries) any real property, buildings, or
fixtures used in the manufacturing or production operations of the
Parent Company or any of its Subsidiaries, or convey or transfer to
the Parent Company or any of its Subsidiaries any other assets
(excluding conveyances or transfers in the ordinary course of
business) if at the time of such conveyance or transfer any
Potential Event of Default or Event of Default exists or would exist
as a result of such conveyance or transfer.
20.20 Limitations on Payment Restrictions: The Obligors shall not themselves,
-----------------------------------
and shall not permit any of their respective Subsidiaries to, create or
otherwise cause or suffer to exist or become effective, any consensual
encumbrance or restriction on the ability of the Parent Company or any of
its Subsidiaries to (i) pay dividends or make any other distributions on
share capital of the Parent Company or any of its Subsidiaries, (ii) pay
any Indebtedness owed to the Parent Company or any of its Subsidiaries,
or (iii) transfer any of its property or assets to the Parent Company or
any of
-45-
its Subsidiaries except any consensual encumbrance or restriction
existing under any Credit Documents or any other Loan Document.
20.21 Actions Under Certain Documents: The Obligors shall not themselves, and
-------------------------------
shall not permit any of their respective Subsidiaries to, modify, amend,
cancel, refinance or rescind the US Credit Agreement, the Intercompany
Notes, any Shareholder Note or any other agreements or documents
evidencing or governing Subordinated Indebtedness without the prior
written consent of All Banks.
20.22 Law Companies Group, Ltd: The Obligors shall not permit Law Companies
------------------------
Group, Ltd. to issue any additional shares subject to a call or put or
honour any call on any shares except with the prior written consent of
the Required Banks with respect to the $50,000 worth of share capital
already issued by Law Companies Group, Ltd.
20.23 Lex: The Obligors shall procure that Lex International Insurance Co.
---
Ltd a Bermudan corporation ("Lex Insurance"), issues dividends at least
-------------
annually to the Parent Company in amounts (if any) such that Lex
Insurance maintains only the minimum capital level required by law and
regulation and by Lex Insurance's underwriters, and shall not permit Lex
Insurance to create an Encumbrance or permit any Encumbrance to exist on
the real property and other assets owned by Lex Insurance.
20.24 Ring-fence provisions: Save as permitted by this Agreement, the Obligors
---------------------
shall not themselves, and shall not permit any of their Subsidiaries or
any Associated Company, to the extent that in the case of any Associated
Company it is within their power to do so, to:
(a) enter into any arrangement whereby any Group Company or Associated
Company (other than one of the Chargors) shall either (i) otherwise
than in the ordinary course of business (and then only for market
value or such other value as the Agent may agree) acquire or gain
the right to acquire possession of any right, title or interest in
any of the assets of any Group Company or Associated Company; or
(ii) acquire and/or carry on the whole or any part of the trade or
business presently being carried on by any Group Company or
Associated Company and, for the avoidance of doubt, nothing in this
Clause shall prevent arms' length trading between any Group
Companies in the ordinary course of business on a commercial basis
and on payment terms of no more than 60 days;
(b) enter into any contract, transaction or arrangement, or modify or
discharge any existing contract, transaction or arrangement, with
any person, firm or company (including but not limited to the Parent
Company or any Group Company), except on arms' length terms in the
ordinary course of business for good reasons;
(c) conduct any banking business otherwise than with the Banks, any Bank
Affiliate or the Domestic Banks, except if and in so far as it is
already conducting such business with a bank or financial
institution with which it has an existing relationship at the date
of this Agreement and has disclosed such relationship to All Banks
in writing prior to the date of this Agreement;
(d) use any of the First Tier Facilities to repay any principal
indebtedness of any Group Company or any Associated Company to any
third party save for the Domestic Banks, the Banks and any Bank
Affiliate;
(e) provide any new loans or financial accommodation (other than normal
trade credit) to any Person which is not a Chargor;
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(f) purchase or repay any amount of any outstanding loan stock issued by
any Group Company or Associated Company or make any investment in
shares, loan stock or other securities (whether secured or
unsecured) of any company (other than a Chargor);
(g) make any Investment in a business (other than that of a Chargor);
(h) incorporate or acquire or permit any Group Company or Associated
Company to acquire or incorporate or acquire any subsidiary or
purchase, subscribe for or otherwise acquire any shares, debentures
or other securities whatsoever of or in any person or acquire the
business of any person or enter into any joint venture or
partnership agreements with persons who are not Chargors;
(i) make any payment of Indebtedness of any nature whatsoever to any
Group Company or Associated Company save to a Chargor or the Parent
Company;
provided that ▇▇▇▇ Holdings Ltd may repay in accordance with subclause
20.8(n) the Indebtedness of $310,000 owed in respect of its previous
purchase of share capital in Prointec SA, a Spanish corporation.
20.25 Financial Assistance: No Obligor shall use any part of the Facilities
--------------------
for any purpose which would cause the execution of any of the Loan
Documents by any Obligor or the performance by any Obligor of its
obligations under any Loan Document or such utilisation to constitute, or
would otherwise result in the provision of, unlawful financial assistance
for the purposes of Part V, Chapter VI of the Companies ▇▇▇ ▇▇▇▇ or any
other applicable legislation, or for any other unlawful purpose.
20.26 Compliance with ERISA: The Parent Company and the US Guarantors shall
---------------------
not take or fail to take, or permit any of their Subsidiaries or ERISA
Affiliates to take or fail to take, any action with respect to a Plan
including, but not limited to, (i) establishing any Plan, (ii) amending
any Plan, (iii) terminating or withdrawing from any Plan, or (iv)
incurring an "amount of unfunded benefit liabilities", as defined in s
4001(a)(18) of ERISA, or any withdrawal liability under Title IV of
ERISA, where such action or failure could have a Material Adverse Effect,
result in an Encumbrance on the property of the Parent Company or any of
its Subsidiaries or require the Parent Company or any of its Subsidiaries
to provide any security except to the extent permitted under subclause
20.11.
20.27 Disposal of assets: The Parent Company shall not, and shall procure that
------------------
no US Group Company shall sell, lease, transfer or otherwise dispose of
any assets, except for any disposition of (a) assets in the ordinary
course of business, provided that on the date of a proposed asset sale
the Asset Value of all asset sales after the date of this Agreement,
taking into account the proposed asset sale would not exceed 5% of the
Consolidated Net Worth of all Group Companies on the Closing Date
(excluding the Asset Value of the property permitted to be sold in the
proviso below), or (b) any obsolete or retired property not used or
useful in its business.
20.28 Stock of Parent Company: The Parent Company shall not, and shall procure
-----------------------
that no Subsidiary shall purchase or otherwise acquire further stock in
the Parent Company save in accordance with the terms of this Agreement.
20.29 HKS. The Parent Company, the US Guarantors and all other Subsidiaries of
---
the Company, including the International Subsidiaries, but excluding HKS,
shall not make or permit to exist investments (whether by capital
contribution, loan or otherwise) into HKS, HKS Trust or any of their
respective Subsidiaries.
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20.30 Additional Classes of Shares. The Parent Company shall not issue any
----------------------------
new classes of capital stock (including any class of preferred stock)
other than those classes outstanding on the Closing Date and Permitted
Preferred Stock to the extent issued to Persons holding Shareholder Notes
on the Closing Date in exchange for all or a portion of such Shareholder
Notes.
21. INFORMATION ABOUT THE INTERNATIONAL GROUP
21.1 ▇▇▇▇ undertakes to provide to the Agent with sufficient copies for each
of the Banks:
(a) copies of the audited consolidated accounts (including profit and
loss account and balance sheet) of each of ▇▇▇▇ and ▇▇▇▇ Holdings
Ltd and the audited consolidated accounts of Law International, Inc.
and its Subsidiaries (the "International Group") as soon as they are
-------------------
available and not later than 160 days from the end of each
accounting reference period, together with unaudited interim
financial statements of each of ▇▇▇▇, ▇▇▇▇ Holdings Ltd, ▇▇▇▇
International Holdings, Inc and Law International, Inc. and each of
its Subsidiaries as soon as they are available after the end of each
half-year;
(b) copies of monthly management accounts for the International Group to
include the consolidated profit and loss account and balance sheet
and a cashflow statement as soon as they are available but not later
than 21 days from the end of each month;
(c) copies of any circular issued to shareholders or holders of loan
capital; and
(d) any other information which the Agent acting on behalf of the Banks
may reasonably request from time to time.
21.2 If the basis on which the audited consolidated accounts of the
International Group are prepared alters for any reason, then ▇▇▇▇ shall,
if requested by the Agent promptly cause its auditors to provide such
report and information as the Agent may require to enable the Agent to
determine the financial position of the International Group as if the
previous accounts had been prepared on the new basis.
21.3 Any Bank, Bank Affiliate, Agent or International Collateral Agent may
disclose to any prospective assignee, transferee or sub-participant of
all or any of its rights and benefits hereunder such information about
the Obligors, the Guarantors and their respective Subsidiaries as shall
have been made available to such Bank, Bank Affiliate or agent generally
provided that the prospective party signs a confidentiality undertaking
in an agreed form (such agreement not to be unreasonably withheld or
delayed) in favour of the Banks and ▇▇▇▇.
21.4 The Banks agree to use all reasonable efforts to maintain the
confidentiality of any confidential information obtained by such Bank or
Bank Affiliate or its agents hereunder except where such Bank or Bank
Affiliate or any agent is required to disclose such information: (i) for
regulatory purposes; (ii) pursuant to legal process; (iii) to its
attorneys, solicitors, accountants or auditors; (iv) for the purpose of
selling participations or interests in the Facilities (but subject as
provided in subclause 21.3 above); (v) as necessary for the enforcement
of its rights under this Agreement; or (vi) to the Domestic Banks.
22. PAYMENTS AND GROSS-UP
22.1 All payments by an Obligor, whether of principal, interest or otherwise,
shall be made in Sterling to the Agent or International Collateral Agent
for the account of the Banks not later than 12 noon (London time) on the
due date in same day funds (or as otherwise expressly directed by the
Agent),
-48-
without set-off or counterclaim and free of any deduction or withholding
whatsoever, including without prejudice to the generality of the
foregoing, for or on account of Taxes, unless that Obligor is required by
law to make any such payments subject to deduction or withholding on
account of Taxes, in which case the sum payable by that Obligor 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, the Agent or International
Collateral Agent 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.
22.2 Without prejudice to the provisions of subclause 22.1, if the Agent,
International Collateral Agent, any Bank or Bank Affiliate is required by
law to make any payment on account of Taxes (other than Taxes on its
overall net income) or otherwise on or in relation to any sum received or
receivable by such agent, Bank or Bank Affiliate hereunder, or any
liability in respect of any such payment is imposed, levied or assessed
against such Bank or Bank Affiliate the relevant Obligor shall, on demand
by such agent, Bank or Bank Affiliate, indemnify such agent, Bank or Bank
Affiliate against such payment or liability together with any interest,
penalties and expenses payable or incurred in connection therewith
(except to the extent that such interest penalties and expenses results
from the late settlement of such payment or liability by such agent, Bank
or Bank Affiliate).
22.3 If the Agent, International Collateral Agent, any Bank or Bank Affiliate
intends to make a claim pursuant to subclause 22.2, it shall notify the
relevant Obligor of the event by reason of which it is entitled to do so
and provide to that Obligor in reasonable detail a calculation of the
amount claimed, provided that nothing herein shall require such agent,
Bank or Bank Affiliate to disclose any information relating to the
organisation of its affairs which such agent, Bank or Bank Affiliate
shall, in its sole opinion, consider to be confidential.
22.4 The obligations of each Obligor under subclauses 22.1 and 22.2 to pay
additional amounts to any Bank shall not arise where such Bank is not or
ceases to be a Qualifying Bank. If such Bank ceases to be a Qualifying
Bank as aforesaid, it shall give notice thereof to the Parent Company
promptly upon becoming aware of the same.
23. EVENTS OF DEFAULT
23.1 Any one or more of the following shall constitute an Event of Default:
(a) any Obligor fails to pay any principal amount owing pursuant to this
Agreement (which shall include any amount payable to any Bank to
collateralise any contingent obligations of such Bank incurred under
the Guarantee Facility) on its due date; or
(b) any Obligor fails to pay interest or any other sum owing pursuant to
this Agreement five calendar days after notice by the Agent of the
amount due; or
(c) any representation or warranty made by or on behalf of any Group
Company to the Banks, Agent or International Collateral Agent
(whether made in this Agreement, any other Loan Documents or in any
financial statement, report or certificate furnished pursuant to
this Agreement, or for the purpose of obtaining any of the
Facilities) shall be incorrect or misleading in any respect as at
the time at which such representation or warranty was made or
repeated; or
(d) any Obligor fails to perform or observe any covenant or agreement
contained in subclauses 19.2, 19.10, 19.12, clause 20 (excluding
subclause 20.16) and subclause 21.1; or
-49-
(e) any Obligor fails to perform or observe any of its other covenants
or agreements set out in this Agreement, other than those referred
to in subclauses 23.1(a) to (d) and (f) and (to the extent such
failure can be remedied) such failure shall not be remedied within
ten calendar days after the earlier of the date on which: (i) any
Executive Officer of a Group Company has actual knowledge of the
facts creating or causing such failure to perform or observe such
covenant or agreement or (ii) the Agent delivers notice of such
failure to ▇▇▇▇; or
(f) any approval, authorisation, consent or clearance which is required
either to ensure that this Agreement and the Security and the Loan
Documents are valid, binding and enforceable or to enable the
obligations thereby created to be duly performed, ceases to be in
full force and effect or it becomes unlawful for each Obligor or any
other person to perform all or any of its obligations hereunder or
under any Security or Loan Document, or any such document is not or
ceases to be legal, valid and binding on it; or
(g) a petition is presented, an order is made or a meeting is convened
or an effective resolution is passed, for winding up any Group
Company (except for the purpose of a reconstruction or amalgamation
while solvent on terms previously approved in writing by the
Required Banks), or a petition is presented or an order is made for
the administration of any Group Company; or
(h) an encumbrancer takes possession or an administrator, liquidator,
provisional liquidator, receiver, manager, trustee, sequestrator or
similar officer is appointed over all or any of the assets of any
Group Company; or
(i) a distress, execution, attachment or other legal process is levied,
enforced or sued out against any of the assets of any Group Company
and is not discharged or paid in full within five Business Days; or
(j) any Group Company suspends payment of its debts or is or becomes
unable to pay its debts as they fall due, or is deemed, under
Section 123 of the Insolvency ▇▇▇ ▇▇▇▇, to be unable to pay its
debts; or
(k) any Group Company proposes or enters into a voluntary arrangement
(within the meaning of Section 1 of the Insolvency Act 1986) or
takes or is subjected to any proceedings under any law, or commences
negotiations with one or more of its creditors, for the
readjustment, rescheduling or deferment of all or any of its debts,
or proposes or enters into any general assignment or composition
with or for the benefit of its creditors; or
(l) save as otherwise expressly permitted in this Agreement, any Group
Company ceases or threatens to cease to carry on its business or
operations, or sells, transfers or otherwise disposes of the whole
or a substantial part of its undertaking or assets, whether by a
single transaction or a number of transactions, without the prior
written consent of All Banks; or
(m) any Indebtedness of any Group Company of more than $100,000 (or its
equivalent in other currencies) becomes immediately due and payable,
or capable of being declared so due and payable, prior to its stated
maturity, by reason of default, or any Group Company fails to
discharge any Indebtedness of more than $100,000 (or its equivalent
in other currencies) on its due date or within any applicable
original grace period (other than a liability which the relevant
Group Company is then contesting in good faith on the basis of
favourable legal advice); or
-50-
(n) there occurs an adverse change in the financial or trading position
or prospects of ▇▇▇▇ Ltd, ▇▇▇▇ Holdings Ltd or the Parent Company
which, in the Agent's opinion, is likely materially to affect the
ability of any Person to perform or comply with its obligations
hereunder or under any Loan Document; or
(o) any consent, authorisation, licence and/or exemption which is
required to enable any Group Company to carry on all or part of its
business ceases for any reason, or any governmental, regulatory or
other authority of any action is taken in relation to any Group
Company (whether or not having the force of law) which could in the
Agent's sole opinion, have a material adverse effect on all or part
of such business; or
(p) any Guarantor, Pledgor or Chargor gives or purports to give notice
to determine its liability under any International Security Document
or any event occurs in relation to any Guarantor Pledgor or Chargor
in any applicable jurisdiction which has an effect substantially
similar to any of the foregoing events specified in this Clause; or
(q) the Parent Company ceases to be the legal owner (save where the US
Collateral Agent or International Collateral Agent is the legal
owner under the Security) and beneficial owner, directly or
indirectly, of a minimum of 100% of the authorised and issued share
capital of ▇▇▇▇, any UK Qualifying Subsidiary or any Specified
Subsidiary without the prior written consent of the Required Banks;
or
(r) any event occurs which, in the reasonable opinion of the Agent,
under the Applicable Law of any relevant jurisdiction is analogous
to or has an effect substantially similar to any of the events
referred to in this Clause 23; or
(s) control of any Obligors passes or has passed, whether by virtue of
any agreement, offer, scheme or otherwise, to any person or persons
(including institutions or companies), either acting individually or
in concert, without the prior written consent of the Required Banks
("control" having the meaning ascribed to it in relation to a body
-------
corporate by Section 840 of the Income and Corporation Taxes Act
1988); or
(t) control of the Parent Company passes or has passed, whether by
virtue of any agreement, offer, scheme or otherwise to any person or
persons (including institutions or companies) either acting
individually or in concert without the prior written consent of the
Required Banks, the passing of such control occurring, for the
purposes of this subclause, by any entity or related group of
entities obtaining the beneficial ownership or power to vote
securities of more than 25% of the outstanding securities of the
Parent Company with the ability to vote for the election of the
board of directors of the Parent Company; or
(u) there occurs any change in the management of the Parent Company. For
the purposes of this subclause, a change of management shall occur
upon the departure for any reason of one of the officers forming the
Executive Officers of the Parent Company (the "Departed Officer")
where such Departed Officer is not replaced within 90 days of giving
up such office by a person having equal or better qualifications,
financial acumen, management skills and standing in the industry as
the Departed Officer; or
(v) the occurrence of any liability or potential liability under any
Plan that would have a Material Adverse Effect on the Parent Company
or its Subsidiaries; or
(w) any event occurs which constitutes an "Event of Default" as defined
----------------
in any of the Loan Documents, the US Credit Agreement or the
SunTrust Interest Rate Contracts;
-51-
(x) Law Companies Group Limited makes any call on ▇▇▇▇ or any of its
Subsidiaries for the payment of all or any part of the money unpaid
on any of their shares in Law Companies Group Limited in
circumstances where the Required Banks have not given its prior
written consent to the payment of any such call; or
(y) any Obligor does not use all reasonable endeavours to satisfy, or
procure the satisfaction or waiver of, the conditions precedent in
subclause 28.1 by 7 February 1997 or such later date as the Banks
may agree;
then each Bank and Bank Affiliate's commitment to make available the
Facilities (or any undrawn balance of the Facilities) shall cease and
such Bank or Bank Affiliate may by notice to each relevant Obligor
require that Obligor (i) to repay all sums then outstanding from that
Obligor to such Bank or Bank Affiliate together with all accrued interest
and other amounts of any Facility owing hereunder, and/or (ii) to pay
full cash cover for the full amount of all Outstanding Amounts under Bank
Guarantees and/or for all actual or contingent liabilities under the
SFET, all of which shall become repayable forthwith on demand in writing
made by such Bank or Bank Affiliate at any time. In addition, the Bank
may close out all or any outstanding contracts effected pursuant to the
SFET. In addition, the Bank may convert all or any part of the sums
outstanding into any currency at the Bank's spot rate.
24. INTEREST ON AN OVERDUE AMOUNT
24.1 Any money payable under this Agreement or due and payable by any
obligation under any judgement of any court in connection with this
Agreement which is not paid when due by an Obligor shall bear interest on
a daily basis from the due date or, as the case may be, date of such
judgement to the date of actual payment. Such interest shall be
calculated by reference to such successive default Interest Periods as
the Bank may from time to time select.
24.2 Interest shall be charged pursuant to this Clause 24 at the rate per
annum determined by the Banks to be equal to the aggregate of:
(a) 2%; plus
(b) the rate of interest payable on such sum in accordance with Clause
9.
24.3 Interest so accrued pursuant to this Clause 24 shall be due on demand or
(in the absence of demand) on the last day of the default Interest Period
in which it accrued and, if unpaid, shall be compounded on the last day
of that and each successive Interest Period. Interest shall be charged
and compounded on this basis both before and after any judgement obtained
hereunder.
25. ASSIGNMENT AND TRANSFER
25.1 Any Bank may, at any time during the continuance of this Agreement and
subject to the proposed assignee or Transferee paying (a) a fee of $3,000
to SunTrust, and (b) a fee of (Pounds)1,000 to the Agent, assign,
transfer or novate all or any part of its rights, benefits and/or
obligations under this Agreement and any of the other Loan Documents to a
Qualifying Bank and acting through a lending office in the United
Kingdom, provided that no such assignment, transfer or novation may be
made without the prior written consent of the Parent Company (such
consent not to be unreasonably withheld or delayed) and provided also
that no such assignment, transfer or novation shall become effective
unless and until the assignment and transfer provisions in the Loan
Documents have been complied with in full.
-52-
25.2 Each Obligor acknowledges that any person to which the rights, benefits
and/or obligations of the Banks may be so assigned, transferred or
novated, shall be entitled to share the benefit of this Agreement and
such other Loan Documents to the same extent as if such person had
constituted an original lender under this Agreement and such other Loan
Documents had been entered into by the Banks as trustee for the bank(s)
and financial institution(s) for the time being participating in the
Facilities provided that before a party can benefit from the
International Security such party must execute a Deed of Accession.
25.3 Each Obligor agrees at the expense of the assignee or transferee to
execute and deliver such document(s) and/or to accept such amendments to
this Agreement and the other Loan Documents as may be reasonably
requested by the Banks to give effect to such assignment, transfer or
novation.
25.4 Any bank or financial institution to which any Bank transfers or novates
its obligations hereunder shall, prior to such transfer or novation
taking effect, confirm to the relevant Obligor that it agrees to be bound
in all respects by the terms of this Agreement in respect of such
obligations.
25.5 No Obligor shall be entitled to assign or transfer any of its rights or
obligations under this Agreement.
26. THE AGENT AND THE BANKS
26.1 Each Bank hereby appoints the Agent to act as its agent in connection
with this Agreement and hereby acknowledges that the Intercreditor
Agreement Agent, the International Collateral Agent and the US Collateral
Agent will act as its trustee or, as the case may be, its agent in
connection with the Security including pursuant to the Intercreditor
Agreement, and authorises the Agent to exercise such rights, powers and
discretions as are specifically delegated to it by the terms of this
Agreement and the other Loan Documents together with all such rights,
powers and discretions as are reasonably incidental thereto. Each Obligor
shall be entitled to assume that the Agent and International Collateral
Agent represent the Banks or the Majority Banks (as the case may be), and
that all consents and notices given by such agent on their behalf are
validly given.
26. Each of the Agent and International Collateral Agent may:
(a) assume that:
(i) any representation or warranty made by any Obligor or any
other party to any of the Loan Documents in or in connection
with this Agreement and/or the other Loan Documents is true;
(ii) no Event of Default or Potential Event of Default has
occurred; and
(iii) neither any Obligor nor any other party to any of the Loan
Documents is in breach of or default under its obligations
under this Agreement and/or the other Loan Documents,
unless it has in its capacity as agent for the Banks and/or Domestic
Banks received actual notice to the contrary from any other party
hereto;
(b) assume that each Transferee's lending office is that identified in
the Transfer Certificate pursuant to which it became a party hereto
until it has received from such Transferee a notice designating some
other office of such Transferee as its lending office and act upon
any such notice until the same is superseded by a further such
notice;
-53-
(c) engage and pay for the advice or services of any lawyers,
accountants or other professional advisers whose advice or services
may to it seem necessary, expedient or desirable and rely upon any
advice so obtained;
(d) rely as to matters of fact which might reasonably be expected to be
within the knowledge of any Obligor upon a certificate or statement
signed by or on behalf of such Obligor;
(e) rely upon any communication or document believed by it to be genuine
and correct and to have been communicated or signed by the person by
whom it purports to be communicated or signed;
(f) refrain from exercising any right, power or discretion vested in it
under this Agreement and/or the Loan Documents unless and until
instructed by the Majority Banks whether or not such right, power or
discretion is to be exercised and, if it is to be exercised, the
manner in which it should be exercised and shall not be liable for
acting or refraining from acting in accordance with or in the
absence of instructions from the Majority Banks;
(g) refrain from taking any step to protect or enforce the rights of any
Bank under this Agreement and/or the other Loan Documents, or
beginning any legal action or proceeding arising out of or in
connection with this Agreement and/or the other Loan Documents,
until it shall have been indemnified and/or secured as it may
require (whether by way of payment in advance or otherwise) against
all costs, claims, expenses (including legal fees) and liabilities
which it will or may expend or incur in complying with such
instructions;
(h) refrain from doing anything which would or might in its opinion be
contrary to any applicable law or any requirements (whether or not
having the force of law) of any governmental, judicial or regulatory
body or otherwise render it liable to any person and may do anything
which is in its opinion necessary to comply with any such applicable
law or requirement;
(i) do any act or thing in the exercise of any of its powers and duties
hereunder which may lawfully be done and which in its absolute
discretion it deems advisable for the protection and benefit of the
Banks collectively;
(j) perform any of its duties, obligations and responsibilities
hereunder by or through its personnel or agents;
(k) accept deposits from, lend money to and generally engage in any kind
of banking or other business with any Obligor, or governmental
authority, without any liability to account.
26.3 Each of the Agent and International Collateral Agent shall:
(a) except as regards purely administrative acts, consult whenever
reasonably practicable with the Banks or in the case of the
International Collateral Agent, the Required Banks, before doing or
refraining from doing any act or thing in the exercise of its powers
as agent;
(b) promptly upon receipt thereof, inform each Bank of the contents of
any notice or document or other information received by it from any
Obligor;
(c) promptly notify each Bank of the occurrence of any Event of Default
or any material breach by any Obligor in the due performance of its
obligations under this Agreement or any of the other Loan Documents
of which such agent has received notice from any other party hereto;
-54-
(d) subject to the foregoing provisions of this subclause 26.3, in the
case of the Agent act in accordance with any instructions given to
it by the Majority Banks or otherwise in accordance with the
instructions of the Required Banks or All Banks as set out in the
Intercreditor Agreement; and
(e) in the case of the Agent if so instructed by the Majority Banks,
refrain from exercising any right, power or discretion vested in it
under this Agreement and in the case of the International Collateral
Agent, if so instructed by the Required Banks or All Banks as set
out in the Intercreditor Agreement, refrain from exercising any
right, power or discretion vested in it under the relevant Loan
Document.
26.4 Notwithstanding anything to the contrary expressed or implied herein,
neither the Agent nor the International Collateral Agent shall:
(a) be bound to enquire as to:
(i) whether or not any representation or warranty made by any
Obligor under or in connection with this Agreement or any of
the other Loan Documents is true;
(ii) the occurrence or otherwise of any Potential Event of Default
or Event of Default;
(iii) the performance by any Obligor or any other party to any of
the Loan Documents of its obligations under this Agreement or
any of the other Loan Documents;
(iv) any breach of or default by any Obligor or any other party to
any of the Loan Documents under this Agreement or any of the
other Loan Documents;
(b) be bound to account to any Bank for any fee or other sum or the
profit element of any sum received by it for its own account;
(c) be bound to disclose to any other person any information relating to
any Obligor or governmental authority of any kind if such disclosure
would or might in its opinion constitute a breach of any law or
regulation or be otherwise actionable at the suit of any person; or
(d) be under any fiduciary duty towards any Bank or under any
obligations other than those expressly provided for in this
Agreement; or
(e) be liable (in the absence of its own gross negligence or wilful
default):
(i) for any failure, omission, or defect in the due execution,
delivery, validity, legality, adequacy, performance,
enforceability, or admissibility in evidence of this
Agreement or any of the other Loan Documents or any
communication, report or other document delivered hereunder
or thereunder; or
(ii) in respect of its exercise or failure to exercise any of its
powers and duties hereunder or thereunder; or
(f) be under any obligations other than those expressly provided for
herein and shall have no liability or responsibility of whatever
kind to:
-55-
(i) any Obligor arising out of or in relation to any failure or
delay in the performance or breach by any Bank or Domestic
Bank of any of its obligations under this Agreement or any of
the other Loan Documents; or
(ii) any Bank or Domestic Bank arising out of or in relation to
any failure or delay in the performance or breach by any
Obligor of any of its obligations under this Agreement or any
of the other Loan Documents.
26.5 Each Bank shall, on demand by the Agent or International Collateral Agent
indemnify such agent against any and all fees (to the extent properly
chargeable by such agent hereunder but not promptly recovered from the
Obligors) costs, claims and expenses and liabilities which such agent may
pay or incur (otherwise than by reason of its own gross negligence or
wilful misconduct) in acting in its capacity as agent for the Banks. The
cost of indemnifying such agent shall be borne by the Banks in the
proportion of their respective Relevant Percentage. If a Bank (a
"defaulting Bank") fails to pay its due contribution under this
---------------
indemnity, then such agent may (without prejudice to its other rights and
remedies) deduct the amount due from the defaulting Bank from any sums
then or thereafter in its possession which would otherwise be payable to
the defaulting Bank.
26.6 Neither the Agent nor the International Collateral Agent accepts
responsibility to any Bank for the accuracy and/or completeness of any
information supplied in connection herewith or for the legality,
validity, effectiveness, adequacy or enforceability of this Agreement or
any of the other Loan Documents and such agent shall be under no
liability to any Bank as a result of taking or omitting to take any
action in relation to this Agreement or any of the other Loan Documents
(save in the case of the gross negligence or wilful misconduct of such
agent).
26.7 Each of the Banks agrees that it will not assert or seek to assert
against any director, officer or employee of the Agent or International
Collateral Agent any claim it may have against any of them in respect of
the matters referred to in this Clause 26.
26.8 It is agreed by each Bank that it has itself been, and will continue to
be, solely responsible for making its own independent appraisal of and
investigations into the financial condition, creditworthiness, condition,
affairs, status and nature of each Obligor and the other parties to the
Loan Documents and, accordingly, each Bank confirms to the Agent and
International Collateral Agent that it has not relied and will not
hereafter rely on such agent or any other Bank:
(a) to check or enquire on its behalf into the adequacy, accuracy or
completeness of any information provided by or on behalf of any
Obligor or any of the other parties to any of the Loan Documents in
connection with this Agreement and/or the transactions contemplated
herein (whether or not such information has been or is hereafter
circulated to such Bank by such agent); or
(b) to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or nature of
any Obligor or any of the other parties to any of the Loan
Documents.
26.9 As between the Banks any question which would increase the Commitment or
facility limit of any of the Banks under this Agreement, reduce the
margin, extend the term of any Facility or defer any Repayment Date,
reduce or defer the amount of any payment of principal, interest or other
amounts payable to any Bank under this Agreement, or change the
provisions of this subclause 26.9 shall be determined only with the
agreement of all the Banks.
26.10 Subject to subclause 26.11, as between the Banks, any question which
falls to be determined under this Agreement including, without
limitation, the exercise by the Agent of any power or discretion
-56-
vested in it hereunder, including discretions to permit the drawing of
the Advance and questions as to waiver of an Event of Default and which
is not expressed by Clause 27.9 to be determinable only with the
agreement of all the Banks or expressed elsewhere in this Agreement to be
determinable solely by the Agent shall be resolved by the Majority Banks.
No particular decision which has once been determined by the Majority
Banks pursuant to this subclause 26.10 may subsequently be determined
differently by the Majority Banks if such change would be effected only
by reason of a change in the composition or calculation of the Majority
Banks. Any action against any of the professional advisers whose advice
has been made available to the Agent as agent for the Banks generally may
be authorised and directed only by the Majority Banks and shall be
pursued only by the Agent; no individual Bank shall be entitled to bring
such an action in its own right whether before or after the Repayment
Date.
26.11 The Agent and International Collateral Agent shall be entitled to
determine purely administrative matters.
26.12 Where this Agreement provides for any matter to be determined by
reference to the opinion of the Majority Banks or to be subject to the
consent or request of the Majority Banks or for any action to be taken on
the instructions of the Majority Banks, such opinion, consent, request or
instructions shall only be regarded as having been validly given or
issued by the Majority Banks if all the Banks shall have received prior
notice of the matter on which such opinion, consent, request or
instructions is sought but so that the Obligors shall be entitled (and
bound) if so informed by the Agent to assume that such notice shall have
been duly received by each Bank and that the relevant majority shall have
been obtained to constitute Majority Banks whether or not this is the
case.
26.13 The Agent shall be entitled to appoint any associate of its as a sub-
agent in respect of any Local Facility.
26.14 It is understood and agreed by each Bank and Obligor that the US
Collateral Agent, International Collateral Agent and Intercreditor
Agreement Agent hold such security as may be granted by each Group
Company pursuant to the Loan Documents as trustee upon and subject to the
terms of the Intercreditor Agreement and each Bank and Obligor
acknowledge and agree to be bound by those terms.
26.15 Each of the Banks hereby authorises the Agent or International Collateral
Agent to execute any Deed of Accession entered into pursuant to subclause
25.2 on its behalf.
27. RETIREMENT OF AGENT
27.1 If the Agent wishes at any time to retire, it shall notify the Parent
Company and the Banks of its intention to do so whereupon the Majority
Banks after consultation with the Parent Company may in writing appoint a
successor Agent which shall in any event be a Bank with an office in
London. If such a successor has not been appointed and accepted office in
writing within thirty days after the Agent's notice of proposed
retirement, the Agent may within a further fourteen days give to the
Parent Company and the Banks fourteen days' prior written notice
nominating an alternative successor Agent which shall in any event be a
Bank with an office in London.
27.2 Unless the Majority Banks shall have appointed a successor which has
accepted office within such notice period of fourteen days, then, upon
the expiry of such fourteen day period and upon the written acceptance in
such form as the Banks may unanimously approve (such approval not to be
unreasonably withheld or delayed) of its nomination by the Agent's
nominee as successor Agent, such nominee shall be deemed to have been
appointed to the office of Agent.
-57-
27.3 With effect from the date that a successor is appointed and accepts the
office of Agent and executes such necessary documentation in accordance
with the foregoing provisions:
(a) as regards the Banks, such successor shall become bound by all the
obligations of the Agent and become entitled to all the rights,
privileges, powers, authorities and discretions of the Agent under
this Agreement;
(b) the agency of the retiring Agent shall terminate and the retiring
Agent shall be discharged from any further liability or obligation
under this Agreement, but without prejudice to any liabilities which
the retiring Agent may have incurred prior to the termination of its
agency;
(c) the costs, charges and expenses of the retiring Agent shall be
discharged if recoverable under the provisions hereof; and
(d) the provisions of this Agreement and the Loan Documents shall
continue in effect for the benefit of any retiring Agent in respect
of any actions taken or omitted to be taken by it or any event
occurring before the termination of its agency.
28. CONDITIONS PRECEDENT
28.1 The Loan Facility will become available for drawing only upon receipt by
the Agent not later than the close of business on 7 February 1997 (or
such later date as the Required Banks may agree) of each of the following
in form and substance satisfactory to the Agent or International
Collateral Agent:
(a) This Agreement
--------------
This Agreement duly executed by all Obligors;
(b) Constitutional Documents
------------------------
(i) a certificate of an Authorised Signatory of each of ▇▇▇▇ Ltd,
the Parent Company, ▇▇▇▇ Africa International Limited and ▇▇▇▇
Holdings Ltd, certifying that there has been no change since a
specified date to:
(aa) the certificate of incorporation or other similar
documents of incorporation of each such Group Company or
such Associated Company; and
(bb) the memorandum and articles of association, by-laws or
other similar constituent documents of each such Group
Company or such Associated Company;
(ii) copies certified as true, complete and up to date by an
Authorised Signatory of each Chargor, Pledgor and Guarantor
(but excluding those companies detailed in (i) above) of;
(aa) the certificate of incorporation or other similar
documents of incorporation of each such Group Company or
such Associated Company; and
-58-
(bb) the memorandum and articles of association, by-laws or
other similar constituent documents of each such Group
Company or such Associated Company;
(c) Resolutions of Obligors and copy of minutes of board meetings
-------------------------------------------------------------
(i) in relation to each Obligor, a certificate of an Authorised
Signatory of such Obligor to the effect that the requisite
resolutions have been duly and properly passed by way of
written resolution signed by all the members of the board of
directors authorising:
(aa) the execution, delivery and performance of and, where
relevant, the affixing of the common seal of such
respective Obligor to this Agreement, the Indemnity and
other Loan Documents to which it is a party; and
(bb) a named Person or Persons specified therein to execute
and deliver on behalf of such Obligor this Agreement,
the Indemnity and other Loan Documents and whose
instructions (jointly or alone) the Agent is authorised
to accept in all matters concerning the Facilities and
this Agreement and to give all other notices and
communications required or permitted to be given by or
on behalf of such Obligor under or for the purposes of
this Agreement, the Indemnity and other Loan Documents
and confirming that such resolutions are still in effect
and have not been varied or rescinded;
(ii) copies, certified by an Authorised Signatory of each Obligor
referred to in paragraph 30.1(c)(i) above as being true,
complete and up-to-date copies of the minutes of the meeting
of the board of directors of such Obligor;
(d) Letter of Confirmation
----------------------
A letter, signed by an Authorised Signatory, from each Pledgor,
Chargor and Guarantor confirming that each such Group Company is
aware of the terms of this Agreement and that the documents forming
the Security to which it is a party remain in full force and effect
and unaffected by the terms hereof;
(e) Certificate of no Event of Default
----------------------------------
a certificate, signed by an Authorised Signatory of each Obligor,
confirming that there is no Event of Default or Potential Event of
Default in existence as at the date of the certificate;
(f) Certificate as to borrowing limits
----------------------------------
a certificate, signed by an Authorised Signatory of each Obligor,
confirming that the aggregate of the Facilities made available to
such Obligor, does not or, as the case may be, would not, if fully
drawn, exceed any borrowing limit contained in documents
constituting the Obligor or in any trust deed or other agreement or
instrument to which the Obligor is a party;
(g) Certificate as to solvency
--------------------------
-59-
a certificate signed by the chief executive officer or the chief
financial officer of each Obligor and each Guarantor, Chargor and
Pledgor as to the solvency of such Group Company;
(h) Documents to perfect security
-----------------------------
certified copy of each such consent, licence, approval, registration
or declaration as is, in the opinion of counsel to the International
Collateral Agent, necessary to render the relevant guarantee and/or
security documents legal, valid, binding and enforceable against
each Pledgor, Guarantor or Chargor to make the relevant guarantee
and/or security documents admissible in evidence in the jurisdiction
of the incorporation of such Group Company and to enable it to
perform its obligations thereunder;
(i) ▇▇▇▇ as Process Agent
---------------------
evidence in respect of each Obligor, Pledgor and Chargor that,
unless it is incorporated in the UK, ▇▇▇▇ has irrevocably agreed to
act as the agent of such person for service of process in England.
(j) US Credit Agreement
-------------------
a certified true copy of the US Credit Agreement as executed by all
parties to it;
(k) Intercreditor Agreement
-----------------------
the Intercreditor Agreement duly executed by each of the parties to
it;
(l) Satisfaction or waiver of conditions precedent
----------------------------------------------
such evidence as the Banks may require that all conditions precedent
to the effectiveness of the Intercreditor Agreement and the US
Credit Agreement (other than any condition precedent equivalent to
this one) have been satisfied or waived; and
(m) Legal opinions
--------------
formal legal opinions as required by the Required Banks and in a
form approved by them rendered by legal counsel to each Pledgor,
Guarantor or Chargor or such of them as required by the Required
Banks that the obligations of such Group Company remain unaffected
by the provisions of this Agreement and in full force and effect;
(n) Certificate of dormancy
-----------------------
a certificate of dormancy (or, if not dormant, as the Agent may
require) in a form acceptable to the Banks signed by an Executive
Officer or the auditors of such Group Company (as the Agent may
require) in respect of each Group Company which is a Dormant Group
Company;
(o) Certificate of Insurance
------------------------
a certificate, signed by an Authorised Signatory of each Obligor,
confirming that all Property has been insured in an amount deemed
adequate by the Parent Company and the Agent against risks
customarily insured against by similar businesses in similar
localities
-60-
and that such insurance is either in the joint names of the Agent
and the relevant Group Company, or the interest of the Agent is
noted on the policy;
(p) Indemnity
---------
The Indemnity duly executed by ▇▇▇▇.
28.2 Notwithstanding any other provision of this Agreement, no Bank or Bank
Affiliate shall be obliged to make any Advance under the Loan Facility or
issue a Bank Guarantee or permit any other utilisation of any of the
Facilities if, as at the date of drawdown, issue or other utilisation,
there would be a breach of any of the representations and warranties in
Clause 18 or a breach of any of the Covenants in Clauses 19 to 23
inclusive and Clause 24 or there exists an Event of Default or a
Potential Event of Default, or any Event of Default or Potential Event of
Default will arise following such drawdown, issue or other utilisation,
or if such drawdown, issue or other utilisation would violate any
Applicable Law.
28.3 Each Obligor undertakes to, and to procure that its Subsidiaries shall,
use all reasonable endeavours to satisfy the conditions precedent in
subclause 29.1 to this Agreement as soon as possible on or after the
Closing Date but in any event each Obligor undertakes that all such
conditions precedent shall be satisfied in full no later than 7 February
1997 or such later date as the Required Banks shall agree.
28.4 It shall be a condition subsequent to the making by the Banks of any
Advance under the Loan Facility, the issuing of a Bank Guarantee or the
permitting of any other utilisation of any of the Facilities at any time
thirty days after the Closing Date that (a) the Parent Company have
repaid or caused to have been repaid all loans to shareholders or former
shareholders of the Parent Company made by SunTrust for which any payment
of principal or interest is past due by 60 days or more, which shall be
in an amount of no more than $60,000; and (b) Law Engineering and
Environmental Services, Inc. shall have delivered to the US Collateral
Agent a certificate certifying that the pledge of all of all of its
uncertified membership interests in Law/Spear, LLC has been registered to
the US Collateral Agent, which certificate shall be acknowledged and
agreed to by the Person in whose possession the books and records of
Law/Spear are kept.
29. MISCELLANEOUS
29.1 All notifications or determinations given or made by the Banks, Agent or
International Collateral Agent under this Agreement or any other Loan
Document shall be conclusive and binding on each Obligor, except in any
case of manifest error.
29.2 Any waiver of a breach of any of the terms of this Agreement or of any
default hereunder shall not be deemed a waiver of any subsequent breach
or default and shall in no way affect the other terms of this Agreement.
29.3 No failure to exercise and no delay on the part of any party in
exercising any right, remedy, power or privilege of that party under this
Agreement and no course of dealing between the parties shall be construed
or operate as a waiver thereof, nor shall any single or partial exercise
of any right, remedy, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights and remedies provided by this Agreement are
cumulative and are not exclusive of any rights or remedies provided by
law.
29.4 The Obligors shall jointly and severally indemnify the Agent, the
International Collateral Agent and each Bank on demand (without prejudice
to the Agent, the International Collateral Agent and the Bank's other
rights) for any expense, loss or liability incurred by such Agent,
Collateral Agent
-61-
or Bank in consequence of (a) any default or delay by an Obligor in the
payment of any amount when due under this Agreement, or (b) the
occurrence or continuance of any Potential Event of Default or Event of
Default or (c) all or part of an Advance being prepaid or becoming
repayable otherwise than on the maturity of the then current Interest
Period applicable to such Advance, including, without limitation, any
loss (including loss of margin), expense or liability sustained or
incurred by the Agent, the International Collateral Agent or any Bank in
any such event in liquidating or re-deploying funds acquired or committed
to fund, make available or maintain that Advance (or any part of it).
29.5 Any sum of money at any time standing to the credit of an Obligor with
the Agent, International Collateral Agent or any Bank in any currency
upon any account or otherwise may be applied by the Agent, International
Collateral Agent or any Bank at any time (without notice to that
Obligor), in or towards the payment or discharge of any Indebtedness now
or subsequently owing to the Agent, International Collateral Agent or any
Bank by that Obligor and the Agent, International Collateral Agent or
Bank may use any such money to purchase any currency or currencies
required to effect such application.
29.6 If, for any reason, any amount payable under this Agreement is paid or is
recovered in a currency (the "other currency") other than that in which
--------------
it is required to be paid (the "contractual currency"), then, to the
extent that the payment to the Agent, Collateral Agent or any Bank (when
converted at the then applicable rate of exchange) falls short of the
amount unpaid under this Agreement, the relevant Obligor shall, as a
separate and independent obligation, fully indemnify the Agent,
Collateral Agent or such Bank on demand against the amount of the
shortfall. For the purposes of this Clause the expression "rate of
exchange" means the rate at which the Agent, Collateral Agent or such
Bank is able as soon as practicable after receipt to purchase the
contractual currency in London with the other currency.
29.7 For the purpose of this Clause 30 the "Bank" shall be construed to mean
----
the Bank and/or any Bank Affiliate (as the case may require).
29.8 Nothing done by any Group Company in compliance with its obligations or
the obligations of an Obligor under this Agreement or the Security shall
be regarded as a breach of any existing agreement between the Banks and
any of the Group Companies.
29.9 Each Obligor is a party to this Agreement, inter alia, for the purpose of
giving the covenants, warranties and representations on the part of or
relating to the Group Companies contained in this Agreement for the
benefit of each Bank, the Agent and International Collateral Agent and to
procure certain matters in relation to certain other Group Companies or
companies in which any Obligor is a direct or indirect shareholder.
29.10 If any provision of this Agreement is held to be illegal, invalid or
unenforceable in whole or in part in any jurisdiction this Agreement
shall, as to such jurisdiction, continue to be valid as to its other
provisions and the remainder of the affected provision; and the legality,
validity and enforceability of such provision in any other jurisdiction
shall be unaffected.
29.11 Each Obligor agrees at its own cost to execute and deliver all such
instruments and other documents and to take all such actions as the Agent
may from time to time request in order to give full effect to the
purposes of this Agreement.
29.12 It is acknowledged that at the date of this Agreement the Facilities are
being made available by Barclays Bank PLC and reference to the "Banks" or
-----
"Majority Banks" shall, before the first Transfer Date, be construed as a
--------------
reference solely to Barclays Bank PLC and all grammatical and other
changes necessary to give effect to such construction for the time being
shall be deemed to have been made and this Agreement shall be construed
accordingly.
-62-
30. CONSENTS
30.1 The Parent Company requests that the Banks consent to the creation by
▇▇▇▇ of a wholly owned Subsidiary organized in Portugal and the transfer
of all assets of ▇▇▇▇ located in Portugal as of the Closing Date to such
new Subsidiary, for the purpose of permitting the new Subsidiary to
obtain national certificates of quality which are mandatory for carrying
out certain projects in Portugal and thus enable such Subsidiary to
increase the market share of the Parent Company and its Subsidiaries in
Portugal and in other Portuguese-speaking countries such as Mozambique
and Angola. Based upon the foregoing, the Banks hereby consent to ▇▇▇▇
creating a wholly owned Subsidiary incorporated in Portugal and
transferring all of its assets located in Portugal as of the Closing Date
into such Subsidiary, notwithstanding anything contained in this
Agreement or the Intercreditor Agreement to the contrary; provided that
--------
(1) promptly upon the formation of such Subsidiary, ▇▇▇▇ delivers to the
U.S. Collateral Agent a share certificate evidencing sixty-five percent
(65%) of the issued and outstanding shares of such Subsidiary, together
with such share charge, pledge agreement or similar instrument as the
Banks shall reasonably require pursuant to which ▇▇▇▇ shall pledge such
share certificate to the U.S. Collateral Agent, (2) promptly upon the
formation of such Subsidiary, ▇▇▇▇ delivers to the International
Collateral Agent a share certificate evidencing thirty-five per cent
(35%) of the issued and outstanding shares of such Subsidiary, together
with such share charge, pledge agreement or similar instrument as the
Banks shall reasonably require pursuant to which ▇▇▇▇ shall pledge such
share certificate to the International Collateral Agent, (3) such
Subsidiary gives the International Collateral Agent a written pledge not
to grant or permit any Encumbrance to exist on its assets other than
Encumbrances in favour of the International Collateral Agent, (4) such
Subsidiary gives the International Collateral Agent a limited guarantee,
such guarantee to be in a form as reasonably required by the
International Collateral Agent, (5) the Parent Company delivers an
opinion of Portuguese counsel to such Subsidiary and ▇▇▇▇, addressed to
the Banks, addressing such issues as the Banks shall reasonably require,
in form and substance reasonably satisfactory to the Banks, together with
such other certificates, documents, instruments, stock powers and
corporate documents as the Banks shall reasonably require and (6) each
other bank party to the Intercreditor Agreement also consents to the
foregoing.
30.2 The Parent Company requests that the Banks consent to the transfer of 51%
of the issued and outstanding shares of ▇▇▇▇ (Eastern Africa) Ltd., a
Kenyan corporation, now owned by ▇▇▇▇ Africa International Ltd., a
Cypriot corporation, to PBM Nominees, Ltd., a wholly owned subsidiary of
Ernst & Young, as the trustee for ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, a Kenyan national
and employee of ▇▇▇▇ (Eastern Africa) Ltd., for the purpose of permitting
▇▇▇▇ (Eastern Africa) Ltd. to be eligible to register with the World
Bank, the African Development Bank and other funding agencies in Africa
and, therefore, to increase the likelihood that ▇▇▇▇ (Eastern Africa)
Ltd. will be short-listed for donor-funded projects in Africa. Based upon
the foregoing, the Banks consent to the transfer of fifty-one percent
(51%) of the issued and outstanding shares of ▇▇▇▇ (Eastern Africa) Ltd.
by ▇▇▇▇ Africa International Ltd. to PBM Nominees Ltd., as trustee for
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, a Kenyan national and employee of ▇▇▇▇ (Eastern
Africa) Ltd., and instruct the International Collateral Agent to release
the share certificates of ▇▇▇▇ (Eastern Africa) Ltd. to a representative
of ▇▇▇▇, on behalf of ▇▇▇▇ Africa International Ltd. notwithstanding
anything in this Agreement or the Intercreditor Agreement to the
contrary; provided, however, that (1) no later than 15 days after such
-------- -------
share certificates are released to a representative of ▇▇▇▇, ▇▇▇▇
delivers, or causes its Subsidiary to deliver, to the U.S. Collateral
Agent (A) a share certificate evidencing 65% of the issued and
outstanding shares of ▇▇▇▇ (Eastern Africa) Ltd. still held by ▇▇▇▇
Africa International Ltd., (B) a share certificate evidencing 65% of the
issued and outstanding shares of ▇▇▇▇ (Eastern Africa) Ltd. then held by
PBM Nominees, as trustee for ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, and (C) share charges,
pledge agreements or similar instruments in form and substance reasonably
acceptable to the Banks, one executed by ▇▇▇▇ Africa International Ltd.
and one executed by PBM
-63-
Nominees, Ltd. and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, pursuant to which such share
certificates shall be pledged to the U.S. Collateral Agent, (2) no later
than 15 days after such share certificates are released to a
representative of ▇▇▇▇, ▇▇▇▇ delivers, or causes its Subsidiary to
deliver, to the International Collateral Agent (A) a share certificate
evidencing 35% of the issued and outstanding shares of ▇▇▇▇ (Eastern
Africa) Ltd. still held by ▇▇▇▇ Africa International Ltd., (B) a share
certificate evidencing 35% of the issued and outstanding shares of ▇▇▇▇
(Eastern Africa) Ltd. then held by PBM Nominees, as trustee for ▇▇. ▇▇▇▇
▇▇▇▇▇▇▇▇, and (C) share charges, pledge agreements or similar instruments
in form and substance reasonably acceptable to the Banks, one executed by
▇▇▇▇ Africa International Ltd. and one executed by PBM Nominees, Ltd. and
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, pursuant to which such share certificates shall be
pledged to the International Collateral Agent, (3) the Parent Company
delivers an opinion of Kenyan counsel to such Subsidiary, ▇▇▇▇ Africa
International Ltd, PBM Nominees, Ltd. and ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, addressed to
the Banks, addressing such issues as the Banks shall reasonably require,
in form and substance reasonably satisfactory to the Banks, together with
such other certificates, documents, instruments, stock powers, corporate
documents as the Banks shall reasonably require and (4) the other banks
party to the Intercreditor Agreement also consent to the foregoing.
30.3 The Parent Company hereby represents and warrants to the Banks that the
Petermuller Subsidiaries are inactive corporations with assets of not
more than $10,000 in the aggregate. The Parent Company requests that the
Banks consent to the dissolution of the Petermuller Subsidiaries and the
transfer of all remaining assets of the Petermuller Subsidiaries to ▇▇▇▇.
Based upon the Parent Company's foregoing representation and warranty,
the Banks hereby consent to the dissolution of the Petermuller
Subsidiaries notwithstanding anything set forth in this Agreement or the
Intercreditor Agreement to the contrary; provided, however, that the
-------- -------
other banks party to the Intercreditor Agreement also consent to the
foregoing.
31. AUTHORITY OF THE PARENT COMPANY
Each Obligor hereby irrevocably authorises the Parent Company to agree,
negotiate and sign on behalf of each of them any document varying,
amending, extending or supplementing the terms and conditions contained
in or replacing in whole or in part this Agreement or any documents
ancillary thereto including the Security.
32. GOVERNING LAW AND JURISDICTION
32.1 This Agreement shall be governed by and construed in accordance with
English law.
32.2 Each Obligor hereby irrevocably submits, for the exclusive benefit of
each of the Banks, the Agent and the International Collateral Agent to
the jurisdiction of the High Court of Justice in England (but without
prejudice to the right of each of the Agent, International Collateral
Agent and the Banks to commence proceedings against such Obligor in any
other jurisdiction) and irrevocably waives any objections on the ground
of venue or forum non conveniens or any similar grounds.
32.3 Each Obligor (including the Parent Company) hereby irrevocably appoints
▇▇▇▇ to act as its agent for the service of process in England and ▇▇▇▇
hereby accepts each such appointment. Notwithstanding Clause 33, any
writ, judgment or other notice of legal process shall be sufficiently
served on any Obligor if delivered to ▇▇▇▇ at its registered office for
the time being.
-64-
33. NOTICES
Every notice, request or other communication shall:
(a) be in writing delivered personally or by prepaid first class letter
or facsimile/telex transmission;
(b) be deemed to have been received, in the case of a letter when
delivered personally or 48 hours after it has been sent by first
class post or 5 business days after it has been sent by airmail (as
the case may be) or, in the case of facsimile/telex transmission, at
the time of transmission with the answerback of the addressee
appearing at the beginning and end of the telex with a facsimile
transmission report (or other appropriate evidence), provided that
if the date of transmission is not a Business Day it shall be deemed
to have been received at the opening of business on the next
Business Day; and
(c) be sent (i) to the Parent Company at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (telephone ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ /facsimile no. 001
▇▇▇ ▇▇▇ ▇▇▇▇) (marked for the attention of the Chief Financial
Officer and Treasurer) and to ▇▇▇▇ and each other Obligor at ▇▇▇▇
House, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ (telex no.
/facsimile no. + 44 1734 491054) (marked for the attention of the
finance director) and (ii) to the Banks, Agent and International
Collateral Agent at the address or fax/telex number stated in
Schedule 14 in respect of Barclays Bank PLC or in the schedule to
the relevant Transfer Certificate, or to such other address or
addresses in England as may be notified in writing by the relevant
party to the other party.
All notices of drawdown, rollover or prepayment given by an Obligor shall
be effective only on actual receipt by the Agent.
34. PARTNERSHIP
Nothing in this Agreement shall constitute a partnership between the
Banks.
35. ENTIRE AGREEMENT
35.1 This Agreement and the other Loan Documents and the Security, together
with any schedules or exhibits attached hereto and thereto, and the
Disclosure Letter constitute the entire understanding of the parties with
respect to the subject matter hereof, and any other prior or
contemporaneous agreements, understandings or arrangements, whether
written or oral, with respect thereto, including without limitation, the
Original Facility Letter, the October Agreement and the Commitment Letter
dated 24 December 1996, among the Parent Company, the Banks and the
Domestic Banks (the "Commitment Letter"), are expressly superseded by
-----------------
this Agreement; provided, however, that the indemnities of the Parent
Company in favour of the Banks, Domestic Banks and SunTrust Securities,
Inc. contained in the Commitment Letter shall survive the execution and
delivery of this Agreement and provided, however, that the October
Agreement shall survive the execution and delivery of this Agreement
until but only until the Effective Date.
35.2 The execution of this Agreement and the other Loan Documents by the
Parent Company and certain of its Subsidiaries was not based upon any
facts or materials provided by the Agent, either Collateral Agent or any
Bank, nor was the Parent Company and certain of its Subsidiaries induced
to execute this Agreement or any other Loan Document by any
representation, statement or analysis (whether innocent or negligent but
not fraudulent) made by the Agent, either Collateral Agent or any Bank.
-65-
36. COUNTERPARTS
This Agreement may be executed and countersigned in any number of
counterparts, all of which when taken together shall constitute a single
instrument.
AS WITNESS the hands of the authorised signatories of the parties to this
Agreement the day and year first above written.
-66-
SCHEDULE 1
----------
UK QUALIFYING SUBSIDIARIES
NAME REGISTERED NUMBER REGISTERED OFFICE
▇▇▇▇ Holdings Ltd 2387714 ▇▇▇▇ House
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
-67-
SCHEDULE 2
----------
SPECIFIED SUBSIDIARIES
NAME REGISTERED NUMBER COUNTRY OF INCORPORATION
▇▇▇▇ Africa International Limited ▇▇▇▇▇ ▇▇▇▇▇▇
[▇▇▇▇ (Botswana)]?
-68-
SCHEDULE 3
----------
LIST OF CHARGORS
NAME REGISTERED NUMBER REGISTERED OFFICE
▇▇▇▇ Africa Consulting Engineers Limited ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ Overseas Limited 2005717 England
▇▇▇▇ Holdings Ltd 2387714 England
▇▇▇▇ Ltd 2387707 England
▇▇▇▇ Africa International Limited ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ Eastern Africa Ltd C44849 ▇▇▇▇▇
▇▇▇▇ (Mauritius) Ltd 9307 Mauritius
Law Companies Group, Limited 56085 Jersey
▇▇▇▇ Overseas (Jersey) Limited 44811 Jersey
-69-
SCHEDULE 4
----------
LIST OF PLEDGORS
PART A - SECURITY TO INTERNATIONAL COLLATERAL AGENT
PLEDGOR GROUP COMPANY OF WHICH 35% OF SHARES JURISDICTION
PLEDGED OF
GROUP
COMPANY
▇▇▇▇ International ▇▇▇▇ Africa Consulting Engineers Ltd Cyprus
Holdings, Inc
▇▇▇▇ International ▇▇▇▇ Overseas (Jersey) Ltd Jersey
Holdings, Inc
▇▇▇▇ International ▇▇▇▇ Holdings Ltd England
Holdings, Inc
▇▇▇▇ Africa Consulting Hill ▇▇▇▇▇▇ ▇▇▇▇▇ Law ▇▇▇▇ (Pty) Ltd S. Africa
Engineers Ltd
▇▇▇▇ Africa International ▇▇▇▇ (Eastern Africa) Ltd Kenya
Limited
▇▇▇▇ Africa International ▇▇▇▇ (Mauritius) Limited Mauritius
Limited
▇▇▇▇ Africa International ▇▇▇▇ (Botswana) (Proprietary) Limited Botswana
Limited
▇▇▇▇ Ltd Law Companies Group, Ltd Jersey
PART B - SECURITY TO US COLLATERAL AGENT
PLEDGOR GROUP COMPANY OF WHICH JURISDICTION
65% OF SHARES PLEDGED OF
GROUP COMPANY
▇▇▇▇ International ▇▇▇▇ Africa Consulting Engineers Ltd Cyprus
Holdings, Inc
▇▇▇▇ International ▇▇▇▇ Overseas (Jersey) Ltd Jersey
Holdings, Inc
▇▇▇▇ International ▇▇▇▇ Holdings Ltd England
Holdings, Inc
▇▇▇▇ Holdings Ltd ▇▇▇▇ Ltd England
-70-
PLEDGOR GROUP COMPANY OF WHICH JURISDICTION OF
65% OF SHARES PLEDGED GROUP COMPANY
▇▇▇▇ Holdings Ltd Westminster & ▇▇▇▇▇▇ Services Ltd England
▇▇▇▇ Holdings Ltd ▇▇▇▇ Tanacsadasi Kft Hungary
▇▇▇▇ Holdings Ltd Prointec S.A. Spain
▇▇▇▇ Holdings Ltd ▇▇▇▇ Holdings Ltd England
▇▇▇▇ Holdings Ltd ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Design England
Associates Ltd
▇▇▇▇ Ltd Law Companies Group Ltd Jersey
▇▇▇▇ Africa Consulting Hill ▇▇▇▇▇▇ ▇▇▇▇▇ Law ▇▇▇▇ (Pty) Ltd S. African
Engineers Ltd
▇▇▇▇ Africa Consulting ▇▇▇▇ Africa International Ltd South Africa
Engineers Ltd
▇▇▇▇ Overseas (Jersey) Ltd ▇▇▇▇ Africa International Ltd South Africa
▇▇▇▇ Overseas (Jersey) Ltd ▇▇▇▇ Overseas Ltd England
▇▇▇▇ Overseas Ltd ▇▇▇▇ Gulf EC Bahrain
▇▇▇▇ Africa International ▇▇▇▇ (Namibia) Pty Ltd Namibia
Ltd
▇▇▇▇ Africa International ▇▇▇▇ Swaziland (Pty) Ltd Swaziland
Ltd
▇▇▇▇ Africa International ▇▇▇▇ (Lesotho) Pty Limited Lesotho
Ltd
▇▇▇▇ Africa International ▇▇▇▇ (Botswana) (Pty) Ltd Botswana
Ltd
▇▇▇▇ Africa International ▇▇▇▇ Eastern Africa Ltd Kenya
Ltd
▇▇▇▇ Africa International ▇▇▇▇ (Malawi) Ltd Malawi
Ltd
▇▇▇▇ Africa International ▇▇▇▇ (Mauritius) Ltd Mauritius
Ltd
▇▇▇▇ Africa International ▇▇▇▇ Africa Services (Pty) Ltd South Africa
Ltd
▇▇▇▇ Africa International ▇▇▇▇ (Zimbabwe) (Pty) Ltd Zimbabwe
Ltd
-71-
SCHEDULE 5
----------
LIST OF GROUP COMPANIES AND ASSOCIATED COMPANIES
(see Clause 18.1(l))
Law Companies Group, Inc
------------------------
- 100% Law International, Inc
- 100% Law International Sales Company (US Virgin Islands)
- 100% ▇▇▇▇ USA, Inc
- 100% Law International Thai Ltd
- 100% held in trust for ▇▇▇▇ International Holdings, Inc
- 100% ▇▇▇▇ Africa Consulting Engineers Ltd
- 100% ▇▇▇▇ Africa International Ltd.
- 100% ▇▇▇▇ (Namibia) (Pty) Ltd
- 100% ▇▇▇▇ Swaziland (Pty) Ltd
- 100% ▇▇▇▇ (Lesotho) Pty Ltd
- 100% ▇▇▇▇ (Botswana) (Pty) Ltd
- 100% ▇▇▇▇ Eastern Africa Ltd
- 100% ▇▇▇▇ (Malawi) Ltd
- 100% ▇▇▇▇ (Mauritius) Ltd
- 100% ▇▇▇▇ Africa Services (Pty) Ltd
- 100% ▇▇▇▇ & Partners (Zimbabwe) (Pvt) Ltd
- 100% Hill ▇▇▇▇▇▇ ▇▇▇▇▇ Law ▇▇▇▇ (Pty) Ltd
- 50% HKS-Law ▇▇▇▇ Share Trust (Pty) Ltd
- 100% Geoscience Laboratories (Pty) Ltd
- 100% Hill ▇▇▇▇▇▇ ▇▇▇▇▇ (Ciskei) Inc
- 51% HKS Agriland (Pty) Ltd
- 100% Hill ▇▇▇▇▇▇ ▇▇▇▇▇ (Transkei) Inc
- 100% Hill ▇▇▇▇▇▇ ▇▇▇▇▇ (Venda) Inc
- 100% ▇▇▇▇ Petermuller & Partners (Cyprus) Ltd
- 100% ▇▇▇▇ Petermuller & Partners (Guernsey) Ltd
- 50% ▇▇▇▇ Architects Ltd
- 50% Giban Danismanlik ve Muhendislik Ltd Sirketi
- 100% ▇▇▇▇ (Polska) Sp.z o.o.
- 100% ▇▇▇▇ Petermuller & Partners (Europe) Ltd
- 50% ▇▇▇▇ Petermuller & Partners, O.E.
- 100% ▇▇▇▇ Petermuller & Partners (Middle East) Ltd
- 50% ▇▇▇▇ Petermuller & Partners, O.E.
- 24% ▇▇▇▇▇▇-▇▇▇▇
- 100% ▇▇▇▇ Holdings Ltd
- 100% ▇▇▇▇ Ltd
- 50% Law Companies Group, Ltd
- 50% ▇▇▇▇-Anglian Ltd
- 100% Westminster and ▇▇▇▇▇▇ Services Ltd
- 25% WCML Development Company Ltd
- 20% Prointec, S.A.
- 100% ▇▇▇▇ GmbH
- 39% IHT ▇▇▇▇▇▇ GmbH
- 25% ▇▇▇▇▇▇-▇▇▇▇
- 100% ▇▇▇▇ Holdings Ltd
- 100% ▇▇▇▇▇▇▇ ▇▇▇▇ Architectural Design Studio Ltd
-72-
- 100% ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Design Associates Ltd
- 100% ▇▇▇▇ Overseas (Jersey) Ltd
- 100% ▇▇▇▇ (Hong Kong) Ltd
- 100% ▇▇▇▇ Overseas Ltd
-100% ▇▇▇▇ Gulf E.C.
- 47% ▇▇▇▇ Australia Pty. Ltd
- 100% LEX International Insurance Co. Ltd. (Bermuda)
- 100% Carriber Insurance Co., Ltd. (Bermuda)
- 100% Law Engineering and Environmental Services, Inc. (GA)
- 90% Law Mexico, S.A. de C.V. (D.F.Mex)
- 49% Drexxa Law, S.A. de C.V. (D.F.Mex)
- 10% Law Mexico S.A. de C.V. (D.F. Mex)
- 100% Law Associates, Inc. (GA)* * Renamed "Law Environmental
- 100% Ensite, Inc. (KY) Consultants, Inc." on 5.1.95
- 100% On Site Technology, Inc. (GA)
- 100% Law Environmental N.C., Inc. (NC)
- 49% Envirosource Incorporated (GA)
- [0%] Law Environmental - Cariba (PR General Partnership)**
- [0%] Law Environmental (OH General Partnership)**
- [0%] Law Environmental P.E.P.C. (NY)** ** Contract affiliates of Law
- [0%] Law Engineering, P.C. (GA)** Engineering and
- [0%] Law Engineering, Inc. (an Ohio P.C.)** Environmental Services, Inc
- 100% Law Engineering, Inc. (GA) but no Law ownership
- 100% ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Associates (CA)
- 100% Law ▇▇▇▇▇▇▇▇, Inc. (CA)
- 50% Law/▇▇▇▇▇, Inc (CA)
- [79.5%] # IAM/Environmental, Inc (TEXAS) # Law Companies Group, Inc owns
47,667 shares of Class B Common
Stock; Ensite, Inc, owns 23,833
shares of Class B Common Stock;
total Class B Common Stock is
71,500 shares. The Class B
Common Stock is entitled to 79.5
% of the voting rights of all
capital stock.
-73-
SCHEDULE 6
----------
MONEY MARKET LOAN
The Sterling Money Market Loan may be drawn in one or more amounts, each drawing
to be a minimum amount of (Pounds)500,000 and multiples of (Pounds)100,000
thereafter for periods up to a maximum of 6 months at the Borrower's option or
other mutually agreed period but no drawing shall be made for an interest period
with a maturity date of more than three months beyond the expiry date detailed
in clause 2 of the letter.
When wishing to draw under the Sterling Money Market Loan, the Borrower should
telephone the Bank's dealers at the Global Treasury Services of the Bank in
London ("GTS") on the following number - 0171 696 2496 on or shortly before the
day on which funds are required, stating the amount of the drawing, the period
required and giving instructions for payments of the funds. In the event these
instructions do not stipulate that the funds must be credited to the Borrower's
current account with the Branch, such instructions must be confirmed by letter
to the Branch at the earliest opportunity.
The rate of interest on each drawing will be subject to negotiation with GTS and
such rate will include the Bank's Margin added to the cost of funds to the Bank
(such cost of funds to be conclusively determined by the Bank and shall include
any associated costs resulting from requirements of the Bank of England or other
governmental authorities or agencies, whether having the force of law or
otherwise, affecting the conduct of the Bank's business) for the period of the
drawing. Interest will be payable without deduction at six monthly intervals, if
appropriate and at the maturity of each drawing, and calculated on the basis of
actual days elapsed over a 365 day year.
Each drawing, together with interest thereon, will be repaid on its maturity on
its maturity date by debit to the Borrower's current account at the Branch.
-74-
SCHEDULE 7
----------
THE OVERDRAFT
Subject to the terms and conditions on which the Loan Facility is made available
the Overdraft will be available on ▇▇▇▇'▇ current account with Barclays Bank PLC
at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ or such other Bank, branch or account as
the Agent may designate with interest charged at the rate equal to the Bank's
Margin as set out in Clause 9 and the Bank's base rate current from time to
time.
Interest together with other charges as previously notified to ▇▇▇▇ will be
debited to ▇▇▇▇'▇ current account at the Branch quarterly in arrear in March,
June, September and December each year or at such other times as may be
determined by the Bank, and such interest will be calculated on the basis of
actual days elapsed over a 365 day year.
Notwithstanding any provision of any Loan Document, the Overdraft is repayable
on demand by the Bank and, if not demanded or otherwise prepaid earlier, shall
be repayable on the Repayment Date. Interest will be charged on overdue amounts
in accordance with Clause 25. The Overdraft may be prepaid at any time and
shall have no minimum drawing or repayment requirement.
-75-
SCHEDULE 8
----------
BMRF
The BMRF will be available for drawing during the term of the Loan Facility and
on its terms and conditions save that the BMRF will in addition be subject to
the following terms and conditions:
(a) Drawing
-------
(i) When wishing to draw under the BMRF, ▇▇▇▇ should telephone
Barclays Bank PLC at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ or such
other Bank or branch as the Agent may designate by no later than
11.30 am on the Business Day on which funds are required, stating
the amount of the drawing (being a minimum amount of
(Pounds)250,000 and a multiple of (Pounds)1,000). The amount of
the drawing will be credited to the ▇▇▇▇'▇ current account at the
relevant branch.
(ii) A drawing may not be requested on a day upon which a repayment is
to be made in accordance with paragraph (c) below.
(b) Interest
--------
Interest will be charged at the rate set out in Clause 9 assuming an
Interest Period of one month and will be calculated on the basis of
actual days elapsed over a 365 day year up to and including the 15th of
each month, except that where the next following day is not a Business
Day interest will be calculated up to and including the day falling
immediately prior to the next following Business Day. Interest will be
debited to ▇▇▇▇'▇ current account at the relevant branch on the Business
Day falling immediately after the 15th of each month.
(c) Repayment
---------
(i) Each drawing under the BMRF must remain outstanding for a minimum
period of three Business Days and may not be repaid until such
period has expired. Thereafter drawings under the BMRF in respect
of a particular Facility will be consolidated and may be repaid in
whole or in part in minimum amounts of (Pounds)250,000. In the
event that the BMRF is repaid only in part, the residual balance
shall not be less than (Pounds)250,000.
(ii) When wishing to make a repayment under the BMRF, ▇▇▇▇ should
telephone the Branch no later than 11.30 am on the day of
repayment stating the amount to be repaid. The amount to be repaid
will be debited to ▇▇▇▇'▇ account at the Branch.
(iii) A repayment may not be made on a day upon which a drawing is to be
made in accordance with paragraph (a) above.
(iv) If the BMRF is repaid only in part, the residual balance shall not
be less than (Pounds)250,000.
(v) The BMRF will be repayable in full on the Repayment Date in any
event.
(d) Confirmations
-------------
All payment and delivery instructions must be confirmed in writing to the
Branch at the earliest opportunity.
-76-
SCHEDULE 9
----------
SFET
The maximum aggregate gross risk under the SFET Facility shall be limited to and
shall not at any time exceed (Pounds)1,000,000. The SFET Facility covers the
maximum liability of ▇▇▇▇ to the Banks outstanding at any time under contracts
of not more than 12 months duration for the forward purchase or sale of foreign
currency for delivery at a future date and the spot purchase or sale of foreign
currencies. The SFET Facility consists of one figure which represents the total
aggregate value of all deals and/or contracts, whether spot or forward and
whether sales or purchases which may be outstanding with the Banks at any one
time. The Banks will never be required irrevocably to pay away funds prior to
receiving firm confirmation of incoming cover acceptable to the Banks. The
Banks' decision in such matters is final.
When wishing to utilise the SFET Facility, ▇▇▇▇ should telephone the Branch on
telephone number ▇▇▇▇-▇▇▇ ▇▇▇▇/5 (unless otherwise advised by the Agent). All
payment and delivery instructions are to be advised to and processed by the
Branch and confirmed by letter at the earliest opportunity.
-77-
SCHEDULE 10
-----------
HKS SYNTHETIC STOCK FACILITY
To enable it to acquire HKS Synthetic Stock, ▇▇▇▇ may borrow up to the amount
which is equivalent to (Pounds)596,658 less the aggregate of all amounts spent
by ▇▇▇▇ or HKS Trust in purchasing HKS Synthetic Stock since 1 June 1995
provided that the aggregate of all such amounts so spent since 1 June 1995 does
not exceed (Pounds)596,658.
-78-
SCHEDULE 11
-----------
ASSOCIATED COSTS FORMULA
Associated Costs are the additional costs to the Banks (as determined by the
Banks) of maintaining an Advance resulting from the imposition from time to time
by the Bank of England (or other governmental authorities or agencies) of
monetary control ratios, the payment of special deposits, liquidity costs and/or
other similar requirements. Until further notice, the formula for arriving at
such costs will be:-
XL + B(L-C) + S(▇-▇)
--------------------
100 - (X+S)
Where:
"X" is the amount required to be maintained by the Banks as non-interest
bearing balances with the Bank of England expressed as a percentage of
eligible liabilities fixed by the Bank of England (or other governmental
authorities or agencies).
"L" is the offered quotation for sterling deposits for three months in the
London Interbank Market on the day of quotation.
"B" is the average level of secured deposits expressed as a percentage of
eligible liabilities which the Bank is required by the Bank of England to
maintain with members of the London Discount Market Association ("LDMA")
and/or with money brokers and/or with gilt edged market makers.
"C" is the rate at which members of the LDMA bid for sterling deposits from
the Bank on the day of quotation.
"S" is the amount of special deposits required to be maintained by the Banks
expressed as a percentage of eligible liabilities fixed by the Bank of
England (or other governmental authorities or agencies).
"D" is the rate of interest paid by the Bank of England on special deposits.
In the application of the above formula X, L, B, C, S and D will be included in
the formula as figures and not as percentages.
The Associated Costs shall be the percentage calculated by the Banks in
accordance with the foregoing formula on the date of drawing or rollover and
will be rounded up to the next 1/16th%.
In the event of a change in circumstances which renders the above or any
substitute formula inapplicable, the Banks shall notify the Parent Company of
the manner in which the Associated Costs shall thereafter be determined and, if
appropriate, substitute a new formula for that set out above.
-79-
SCHEDULE 12
-----------
LIST OF EXECUTIVE OFFICERS
NAME TITLE
▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇ Chairman of ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇ Director of Europe of ▇▇▇▇
▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ Managing Director of ▇▇▇▇
Director for Asia of ▇▇▇▇
Director for Middle East of ▇▇▇▇
Director for Africa of ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇ Finance Director of ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ Company secretary of ▇▇▇▇
▇▇▇▇▇▇ Kavthankar Treasurer of ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ Chief Executive Officer of Parent Company
W ▇▇▇▇▇ ▇▇▇▇▇▇ Assistant Treasurer of Parent Company
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Executive Vice President of Parent Company
Secretary of Parent Company
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Treasurer of Parent Company
Chief Financial Officer of Parent Company
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Corporate Controller
-80-
SCHEDULE 13
------------
LIST OF THIRD PARTY SECURITY
Chargee Type of Security Date Registered Amount
------- ---------------- --------------- ------
T C Ziraat Bankasi Cash deposit to secure 20 March 1995 $107,500
guarantee to KCIC
-81-
SCHEDULE 14
-----------
THE BANKS
NAME REGISTERED OFFICE FACILITY LIMIT
LOAN FACILITY
-------------
Barclays Bank PLC ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇▇▇)▇,▇▇▇,▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
BGI FACILITY
------------
Barclays Bank PLC ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇▇▇)▇,▇▇▇,▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
SFET FACILITY
-------------
Barclays Bank PLC ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇▇▇)▇,▇▇▇,▇▇▇ (▇▇▇▇▇)
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
-82-
SCHEDULE 15
-----------
FORM OF TRANSFER CERTIFICATE
To: Barclays Bank PLC as Agent for and on behalf of itself and the Banks
(as defined in the Facility Agreement referred to below)
TRANSFER CERTIFICATE
--------------------
relating to the agreement (as from time to time amended, varied, novated or
supplemented, the "Facility Agreement") dated [ ] 1997 originally
------------------
made between ▇▇▇▇ Ltd (1), ▇▇▇▇ Holdings Ltd (2), ▇▇▇▇ Africa International Ltd
and certain of its Subsidiaries (3) Law Companies Group, Inc. (4) Barclays Bank
PLC as the Banks (5) Barclays Bank as Agent (6) Barclays Bank PLC as
International Collateral Agent (7).
1. Terms defined in the Facility Agreement shall, subject to any contrary
indication, have the same meanings herein. The terms Bank and Transferee
are defined in the schedule hereto.
2. The Bank (i) confirms that the details in the schedule hereto under the
heading "Commitment" and/or "Advance(s)" and/or "Guarantee(s)" accurately
summarise its Commitment under the Loan Facility and New Money Facility
and/or, as the case may be, its participation in, and the Interest Period
of, one or more existing Advances and/or Guarantees under one or more
Facilities and (ii) requests the Prospective Transferee to accept and
procure the assignment and transfer to the Prospective Transferee of the
portion specified in the schedule hereto of, as the case may be, such
commitment and/or its participation in such Advance(s) and/or Guarantees
under each such Facility by counter-signing and delivering this Transfer
Certificate to the Agent at its address for the service of notices
specified in the Facility Agreement.
3. The Prospective Transferee hereby requests the Agent to accept this
Transfer Certificate as being delivered to the Agent pursuant to and for
the purposes of Clause 26 of the Facility Agreement and hereby seeks to
assign its rights under the Loan Documents and to transfer its obligations
thereunder to the extent set out in the schedule hereto so as to take
effect in accordance with the terms thereof on the Transfer Date or on such
later date as may be determined in accordance with the terms thereof.
4. The Prospective Transferee warrants that it has received a copy of each of
the Loan Documents together with such other information as it has required
in connection with this transaction and that it has not relied and will not
hereafter rely on the Bank to check or enquire on its behalf into the
legality, validity, effectiveness, adequacy, accuracy or completeness of
any such information and further agrees that it has not relied and will not
rely on the Bank to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or nature of any
Obligor.
5. The Prospective Transferee hereby undertakes with the Bank and each of the
other parties to the Loan Documents that it will perform in accordance with
their terms all those obligations which by the terms of the Loan Documents
will be assumed by it after delivery of this Transfer Certificate to the
Agent and satisfaction of the condition (if any) subject to which this
Transfer Certificate is expressed to take effect.
6. The Prospective Transferee hereby undertakes with the Bank that it shall
pay an administrative fee of $3,000 to SunTrust, as directed by the Agent,
upon the date hereof.
7. The Prospective Transferee hereby undertakes with the Bank that it shall
pay an administrative fee of (Pounds)1,000 to the Agent for its own
account, as directed by the Agent, upon the date hereof.
-83-
8. The Bank makes no representation or warranty and assumes no responsibility
with respect to the legality, validity, effectiveness, adequacy or
enforceability of any of the Loan Documents or any document relating
thereto and assumes no responsibility for the financial condition of any of
the Obligors or for the performance and observation by any of the Obligors
of any of its obligations under any of the Loan 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.
9. The Bank hereby gives notice that nothing herein or in the Loan Documents
(or any document relating thereto) shall oblige the Bank to (i) accept a
re-assignment or re-transfer from the Prospective Transferee of the whole
or any part of its rights, benefits and/or obligations under the Loan
Documents assigned and transferred pursuant hereto or (ii) support any
losses directly or indirectly sustained or incurred by the Prospective
Transferee for any reason whatsoever including, without limitation, the
non-performance by any of the Obligors or any other party to any of the
Loan Documents (or any document relating thereto) of its obligations under
any such document. The Prospective Transferee hereby acknowledges the
absence of any such obligation as is referred to in (i) and (ii) above.
10. This Transfer Certificate and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with English
law.
THE SCHEDULE
------------
1. Bank:
2. Prospective Transferee:
3. Transfer Date:
4. Commitment:
4.1 Commitment at the date hereof:
(a) Bank's Loan Facility Commitment:
(b) [Local Facility/ies]
4.2 Portion Transferred:
(a) Loan Facility:
(b) [Local Facility/ies]
5. Advance(s):
(a) Loan Facility:
Currency and Amount of Bank's Participation:
Current Interest Period(s):
Portion Transferred:
-84-
[ (b) [Local Facility/ies
Currency and Amount of Bank's Participation:
Current Interest Period:
Portion Transferred:]]
6. Guarantee(s)
Currency and Amount of Bank's Participation
Current Guarantees Outstanding
Tenors
[Transferor Bank] [Transferee Bank]
By: By:
Date: Date:
(Address, telex and facsimile numbers and
main offices and each other Facility Office)
[Agent]
By:
Date:
-85-
SCHEDULE 16
-----------
LIST OF DORMANT GROUP COMPANIES
Dormant International Subsidiaries
----------------------------------
1. Lex Insurance
2. Law Mexico, S.A. de C.V. (d.f. Mex)
3. Drexxa Law, S.A. de D.V. (d.f. Mex)
4. Law International Sales Company
5. ▇▇▇▇ Petermueller & Partners (Europe) Limited
6. ▇▇▇▇ Petermueller & Partners (Middle East) Limited
7. ▇▇▇▇ Petermueller & Partners, O.E. Limited
8. ▇▇▇▇ Petermueller & Partners (Cyprus) Limited
9. ▇▇▇▇ Petermueller & Partners (Guernsey) Limited
10. ▇▇▇▇▇▇-▇▇▇▇
11. ▇▇▇▇-Anglian Limited
12. WCML Development Company Limited
13. ▇▇▇▇-▇▇▇▇ Building Management Limited
14. SIT.E.E.
15. ▇▇▇▇ Australia Pty. Ltd.
16. Subsidiaries of Hill ▇▇▇▇▇▇ ▇▇▇▇▇ Law Gib (Pty) Limited
17. ▇▇▇▇ (Hong Kong) Limited
18. ▇▇▇▇ (Polska) Sp z.oo
19. Giban Danismanlik ve Muhendislik Ltd Sirketi
20. ▇▇▇▇ Architects Ltd
-86-
SCHEDULE 17
-----------
PART A
THE GUARANTEE AND DEBENTURES
1. Guarantee and Debenture dated 11 October 1995 between ▇▇▇▇ Ltd, ▇▇▇▇
Holdings Ltd and ▇▇▇▇ Overseas Limited and Barclays Bank PLC.
2. Assignment of debts dated 11 October 1995 between ▇▇▇▇ Ltd and Barclays
Bank PLC.
3. Security agreement dated 9 February 1996 between Barclays Bank PLC and ▇▇▇▇
Ltd and ▇▇▇▇ International Holdings, Inc.
4. Security agreement dated 9 February 1996 between Suntrust Bank, Atlanta and
▇▇▇▇ International Holdings, Inc.
5. Guarantee and Debenture dated 1 November 1995 between ▇▇▇▇ Africa
Consulting Engineers Limited and Barclays Bank PLC.
6. Guarantee and Debenture dated 26 October 1995 between ▇▇▇▇ Africa
International Limited and Barclays Bank PLC (as Agent).
7. Guarantee and Debenture executed by ▇▇▇▇ Overseas (Jersey) Limited in
favour of Barclays Bank PLC dated 9 February 1996.
8. Guarantee and debenture executed by Law Companies Group, Ltd in favour of
Barclays Bank PLC dated 4 April 1996.
9. Guarantee and Debenture dated 16 February 1996 executed by ▇▇▇▇ Eastern
Africa Limited in favour of Barclays Bank PLC.
10. Fixed charge dated 29 March 1996 executed by ▇▇▇▇ (Mauritius) Limited in
favour of Barclays Bank PLC.
11. Floating charge dated 29 March 1996 executed by ▇▇▇▇ (Mauritius) Limited in
favour of Barclays Bank PLC.
-87-
PART B
THE PLEDGES
1. Charge over shares (re shares in ▇▇▇▇ Ltd and others) dated 11 October 1995
between ▇▇▇▇ Holdings and SunTrust Bank Atlanta.
2. Deed of Rectification and Supplemental Charge dated 3 November 1995 between
▇▇▇▇ Holdings and SunTrust Bank Atlanta.
3. Charge over shares (re: ▇▇▇▇ Gulf E.C. shares) dated 11 October 1995 and
made between ▇▇▇▇ Overseas Limited and SunTrust Bank, Atlanta.
4. Charge over shares (re: shares in ▇▇▇▇ Holdings Ltd) dated 11 October 1995
between ▇▇▇▇ International Holdings Inc. and SunTrust Bank, Atlanta.
5. Charge over shares (re: shares in ▇▇▇▇ Holdings Ltd) dated 11 October 1995
between ▇▇▇▇ International Holdings Inc. and Barclays Bank PLC.
6. Security agreement dated 9 February 1996 between inter alia Barclays Bank
PLC and ▇▇▇▇ International Holdings, Inc.
7. Security agreement dated 9 February 1996 between inter alia Suntrust Bank,
Atlanta and ▇▇▇▇ International Holdings, Inc.
8. Charge over shares (re: shares in ▇▇▇▇ Africa International Limited) dated
1 November 1995 between ▇▇▇▇ Africa Consulting Engineers Limited and
SunTrust Bank, Atlanta.
9. Pledge of shares dated 1 November 1995 between ▇▇▇▇ Africa Consulting
Engineers Limited and Barclays Bank PLC.
10. Pledge of shares dated 1 November 1995 between ▇▇▇▇ Africa Consulting
Engineers Limited and SunTrust Bank, Atlanta.
11. Charge over shares dated 26 October 1995 between ▇▇▇▇ Africa International
Limited and Barclays Bank PLC.
12. Charge over shares (re: shares in ▇▇▇▇ Eastern Africa International
Limited) dated 26 October 1995 between ▇▇▇▇ Africa International Limited
and SunTrust Bank, Atlanta.
13. Charge over shares (re: ▇▇▇▇ (Lesotho) Limited and others) dated 26 October
1995 between ▇▇▇▇ Africa International Limited and SunTrust Bank, Atlanta.
14. Pledge of shares in ▇▇▇▇ (Botswana) (Pty) Limited dated 26 October 1995
between ▇▇▇▇ Africa International Limited and Barclays Bank PLC.
15. Pledge of shares in ▇▇▇▇ (Botswana) (Pty) Limited dated 26 October 1995
between ▇▇▇▇ Africa International Limited and SunTrust Bank, Atlanta.
16. Pledge agreement dated 9 April 1996 in respect of shares in ▇▇▇▇
(Mauritius) Limited between ▇▇▇▇ Africa International Limited, Barclays
Bank PLC and others.
-88-
17. Pledge agreement dated 9 April 1996 in respect of shares in ▇▇▇▇
(Mauritius) Limited between ▇▇▇▇ Africa International Limited, SunTrust
Bank, Atlanta and others.
18. Charge over shares (re: shares in ▇▇▇▇ Africa International Ltd and ▇▇▇▇
Overseas Ltd) executed by ▇▇▇▇ Overseas (Jersey) Limited in favour of
SunTrust Bank, Atlanta dated 9 February 1996.
-89-
For and on behalf of
▇▇▇▇ LTD
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
.....................................
Date 2/7/97
...................................
For and on behalf of
▇▇▇▇ HOLDINGS LTD
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
.....................................
Date 2/7/97
...................................
For and on behalf of
▇▇▇▇ AFRICA INTERNATIONAL LIMITED
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
.....................................
Date 2/7/97
...................................
For and on behalf of
LAW COMPANIES GROUP, INC.
by /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
.....................................
Date 2/7/97
...................................
For and on behalf of
BARCLAYS BANK PLC
as the Bank
by /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
.....................................
Date 2/7/97
...................................
-90-
For and on behalf of
BARCLAYS BANK PLC
as Agent
by /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
.....................................
Date 2/7/97
...................................
For and on behalf of
BARCLAYS BANK PLC
as International Collateral Agent
by /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
.....................................
Date 2/7/97
...................................
-91-
EXHIBIT
-------
DISCLOSURE LETTER
-92-