EXHIBIT 10.20
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RANKING AGREEMENT
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between
VERTICAL INVESTMENTS LIMITED
And
INVU SERVICES LIMITED
And
BANK OF SCOTLAND
CLAUSES PAGE
1. Ranking of Securities 1
2. Security to be Continuing 3
3. Agreement 3
4. Preferential Payments 3
5. Negative Pledge 3
6. Enforcement 3
7 Authority to Release Information 3
8, Consent 4
9. Variation 4
10. Transfers 4
11. Miscellaneous 4
12. Notices 4
13. Definitions 5
14. Other Security 7
Is, Separate Provisions 7
16. Governing Law 9
17. Contract (Rights of Third Parties) Act 8
This RANKING AGREEMENT is made the 24th day of October, 2001 amongst:
(1) The Governor and Company of the Bank of Scotland ("BoS");
(2) Vertical Investments Limited a company registered in Jersey (Company
Number 71185) whose registered office is at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ (the "Postponed Creditor"); and
(3) INVU Services limited a company registered in England (Company Number
03319922) of The Beren, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇ (the "Company").
Definitions are given in Clause 13.
WHEREAS
(A) The Company has granted in favor of BoS a Debenture dated 13 July 2000
and registered on 19 July 2000;
(B) The Company, has granted in favor of the Postponed Creditor a Debenture
dated 17 September 2001 which is to be registered at Companies House
immediately after this Agreement has been executed;
(C) BoS and the Postponed Creditor wish to regulate the ranking of the
Securities;
(D) The Company has agreed to acknowledge the terms of this Agreement.
IT IS AGREED AS FOLLOWS:
1. Ranking of Securities
1.1 BoS, the Postponed Creditor and the Company agree that the
sums secured by the BoS Securities and the Postponed
Securities shall rank in the following order of priority:
1.1.1 the BoS Securities to the extent of the BoS Priority
Debt; then
1.1.2 the Postponed Securities to the extent of the
Postponed Priority Debt.
1.2 The ranking and priority set out in Clause 1.1 shall take
effect notwithstanding any of the following;
1.2.1 the nature, of the Securities created by the BoS
Securities and the Postponed Securities and the dates
of execution and registration of them;
1.2.2 any provision contained in any of the Securities;
1.2.3 the date or dates on which moneys have been or may be
advanced or become due, owing or payable under the
BoS Securities and the Postponed Securities,
respectively;
1.2.4 any fluctuation from time to time in the amounts
secured by the BoS Securities or the Postponed
Securities including any reduction of those amounts
to nil;
1.2.5 the existence of any credit balance on any current or
other account of the Company with BoS;
1.2.6 the appointment of a liquidator, administrative
receiver, receiver, administrative or other similar
officer in respect of the Company or over all or any
part of the Assets;
1.2.7 the granting of time or any other indulgence to the
Company or any other person or the release,
compounding or otherwise dealing with the Company or
any other person or the receipt of moneys whether
arising from a voluntary sale of any Assets subject
to any of the Securities or in respect of any
security or guarantee held by either BoS in respect
of the BoS Debt or the Postponed creditor in respect
of the Postponed Debt or otherwise prior to
enforcement;
1.2.8 the taking, variation, compromise, renewal or release
of, or refusal or neglect to perfect or enforce any
rights or remedies against the Company or any other
person by either BoS or the Postponed Creditor,
1.2.9 the sale or other disposal of any land or buildings
or any interest in any land or buildings prior to
enforcement;
1.2.10 any present or future mortgage or other charge
granted by the Company to either BoS or the Postponed
Creditor (other than the Securities) (unless
otherwise agreed in writing by BoS or the Postponed
Creditor);
1.2.11 the provisions of Sections 464 and 466 of the
Companies ▇▇▇ ▇▇▇▇ or any other rule of law which
might operate contrary to the terms of this
Agreement.
2. Security to be Continuing
The Securities shall rank as provided in this Agreement as continuing
securities for repayment of the amounts owing to each of BoS and the
Postponed Creditor from time to time by the Company or by any person or
company whose obligations to BoS or the Postponed Creditor are
guaranteed by the Company.
3. Agreement
If a receiver or liquidator or administrator of the Company regards
this Agreement as failing to bind him in the distribution of the
proceeds of sale of the assets of the Company (and in as far as the
refusal of the receiver or liquidator or administrator to be bound by
this Agreement causes prejudice to BoS or the Postponed Creditor), BoS
and the Postponed Creditor will compensate each other to the extent to
which it has benefited as a result of this refusal.
4. Preferential Payments
The ranking provisions in this Agreement shall not prejudice the right
of BoS to receive Preferential Payments provided that any Preferential
Payments payable shall not be counted towards repayment of BoS Debt for
the purposes of calculating the extent of any priority to which BoS is
entitled under Clause 1.
5. Negative Pledge
The Company shall not grant any further fixed or floating charges over
all or any of its Assets including its heritable, real or leasehold
property without the written consent of BoS.
6. Enforcement
If either BoS or the Postponed Creditor wishes to exercise its power of
sale over the Assets or to appoint a receiver of the Assets, BoS and the
Postponed Creditor shall consult together with a view to agreeing upon
either the terms of such sale or upon a suitable person to be appointed
as receiver, provided always that this Agreement to consult will not
prejudice the right of BoS to take action to sell the asset under its
powers of Sale or to appoint a receiver under the BoS Security without
prior consultation in case of need. If BoS or the Postponed Creditor
takes any such action or appoints a receiver without consultation it
shall immediately advise the other that it has done so.
7. Authority to Release Information
During the continuance of each of the BoS Securities and the Postponed
Securities, BoS and the Postponed Creditor may disclose to each other
information concerning the Company and its affairs in such manner and
to such extent as BoS and the Postponed Creditor may wish and the
Company consents to such disclosure.
8. Consent
BoS and the Postponed Creditor consent to the grant by the Company of
the Securities and each acknowledge the right of the other to
production and delivery of copies of the Securities.
9. Variation
The BoS Securities and the Postponed Securities are varied to the
extent specified in this Agreement and this Agreement shall be
construed and receive effect as an instrument of Alteration within the
meaning of Section 466 of the Companies ▇▇▇ ▇▇▇▇.
10. Transfers
BoS shall not assign or transfer the benefit of any of the BoS
Securities and the Postponed Creditor shall not assign or transfer the
benefit of any of the Postponed Securities unless the assignee or
transferee first agrees in writing with BoS and/or the Postponed
Creditor, as the case may be, to be bound by the provisions of this
Agreement.
11. Miscellaneous
Unless and until the BoS Securities are discharged, the Postponed
Creditor:
11.1 agrees that any obligation under the Postponed Securities to
deposit deeds and documents of title, stocks, shares and other
securities and all policies of insurance or assurance with the
Postponed Creditor shall be deemed satisfied and complied with
if those are deposited with BoS; and
11.2 agrees that the proceeds of any insurance policy in respect of
any Assets shall, notwithstanding any endorsement or notation
on any such policy to the contrary, prior to enforcement by
BoS be used by the Company in repair and reinstatement or
replacement of such Assets. The Company acknowledges by its
execution of this Agreement that it has no right, title or
interest to enforce this sub-clause for its own benefit.
12. Notices
12.1 All notices or other communications to be made or given under
this Agreement shall be in writing and shall be by first-class
prepaid post or by fax.
12.2 Receipt shall be deemed to have occurred forty eight hours
after posting (unless hand delivered and then at the time of
delivery) and if by fax when sent provided a transmission
report is received.
12.3 Any notice to BoS shall be addressed to:
The Manager
Birmingham Business Centre Bank of Scotland
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12.4 Any notice to the Postponed Creditor shall be addressed to:
Mr P. Willing
Vertical Investments Limited
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Channel Islands
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12.5 Any notice to the Company shall be addressed to:
The Secretary
Invu Sevices Limited
The Beren
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13. Definitions
In the interpretation of this Agreement:
13.1 "Assets" means the whole of the property, (including uncalled
capital) which is or may be from time to time comprised in the
property and undertaking of the Company;
13.2 "BoS Debt" means all or any monies and liabilities which shall
from time to time (and whether on or at any time after demand)
be due, owing or incurred in whatsoever manner to BoS by the
Company, whether actually or contingently, solely or jointly
and whether as principal or surety and whether or not BoS
shall have been an original party to the relevant transaction,
and including interest, discount, commission and other lawful
charges or expenses which BoS may in the course of its
business charge or incur in respect of any of those matters or
for keeping the Company's account, and so that interest shall
be computed and compounded according to the usual BoS rates
and practice as well after as before any demand made or decree
obtained;
13.4 "BoS Priority Debt" means the BoS Debt not exceeding (pound)
800,000 (or such greater amount, if any, as shall be agreed in
writing between BoS and the Postponed Creditor) plus interest
on that amount and all commission, charges, fees, costs and
expenses arising or incurred in connection with it;
13.5 "BoS Securities" means the Debenture granted by the Company in
favour of BoS over the Assets dated 13 July 2001 and
registered with the Registrar of Companies on 19 July 2001 in
security for the BoS Debt;
13.6 "Postponed Debt" means all sums due: and to become due to the
Postponed Creditor by the Company whether as principal debtor,
co-obligant, guarantor, surety or otherwise (including all
present, future or contingent obligations owed to the
Postponed Creditor, whether such obligations exist now or
arise in the future) together with interest and charges,
interest on them and all commissions, charges, fees, costs and
expenses arising or incurred in connection with those sums;
13.7 "Postponed Priority Debt" means Postponed Debt not exceeding
US$500,000 (or such greater amount if any, as shall be agreed
in writing between BoS and the Postponed Creditor) together
with interest on that amount and all commissions, charges,
fees, costs and expenses arising or incurred in connection
with it;
13.8 "Postponed Securities" means the Debenture granted by the
Company in favour of the Postponed Creditor over the Assets
dated 17 September 2001 and due to be registered with the
Registrar of Companies immediately after execution of this
Agreement in security for the Postponed Debt;
13.9 "Preferential Payments" means payments to which a preference
attaches in terms of Sections 175 and 386 of the Insolvency
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13.10 "Securities" means the BoS Securities and the Postponed
Securities;
13.11 "Enforce" (and all derivations from it) means the taking of
any of the following actions:
(1) the appointing a receiver pursuant to or in respect
of any of the Securities;
(2) the exercising a power of sale or otherwise utilising
the rights given to a creditor under any of the
Securities;
(3) the suing for payment of any BoS Debt or the
Postponed Debt;
(4) the petitioning for an administration order; or
(5) the exercising of any rights of setoff, retention
combination of accounts or similar right in respect
of the BoS Debt or the Postponed Debt;
13.12 References to this Agreement and to any provisions of it shall
be construed as references to it in force for the time being
and as amended, varied, supplemented, substituted or novated
from time to time;
13.13 References to:
13.13.1 statutes, statutory provisions and other leglislation
shall include all amendments, substitutions,
modifications and re-enactments for the time being in
force;
13.13.2 "control" of any company shall be interpreted in
accordance with Section 840 of the income and
Corporation Taxes ▇▇▇ ▇▇▇▇;
13.13.3 "including" shall not be construed as limiting the
generality of the words preceding it;
13.13.4 any term or phrase defined in the Companies ▇▇▇ ▇▇▇▇
(as amended from time to time) shall bear the same
meaning in this Agreement unless the context requires
otherwise;
13.13.5 words importing the singular shall include the plural
and vice versa, and words denoting any gender shall
include all genders;
13.13.6 this Agreement and to any provisions of it or to any
other document referred to in this Agreement shall be
construed as references to it in force for the time
being as amended, varied, supplemented, restated,
substituted or novated from time to time;
13.13.7 "person" is to be construed to include references to
a corporation, firm, company, partnership, joint
venture, unincorporated body of persons, individual
or any state or agency of a state, whether or not a
separate legal entity;
13.13.8 "person" is to be construed to include that person's
assignees or transferees or successors in title,
whether direct or indirect;
13.13.9 clause headings are for ease of reference only and
are not to affect the interpretation of this
Agreement.
13.14 For the avoidance of doubt, this Agreement supersedes any
previous agreement, whether written or oral, express or
implied, between the parties to it (or any of them) in
relation to the subject matter of this Agreement.
14. Other Security
BoS shall be entitled at any time at its discretion and without
consulting the Company or the Postponed Creditor to transact and deal
with any other securities or guarantees of any kind that may be held by
it in respect of the Company's obligations to it and may sell, dispose
of or realise such other securities in any order which it may determine
and this Agreement shall remain in full force and effect
notwithstanding such transactions or dealings.
15. Separate Provisions
If any provision of this Agreement is or becomes invalid, illegal or
unenforceable that shall not affect the validity, legality or
enforceability of any other provision.
16. Governing Law
This Agreement shall be governed by and construed according to English
law and each of the parties submits to the nonexclusive Jurisdiction of
the English courts.
17. Contract (Rights of Third Parties) ▇▇▇ ▇▇▇▇
For the purposes of the Contracts (rights of Third Parties) ▇▇▇ ▇▇▇▇,
the parties hereto agree that they do not intend any of the terms of
this Agreement to be enforceable by any third party.
IN WITNESS WHEREOF this Agreement consisting of this and the seven preceding
pages are executed as a Deed as follows:
SUBSCRIBED for and on behalf of
The Governor and Company
of the Bank of Scotland
by its duly authorised signatory at
.........................(Signature)
on the day of 2001 .........................(Full Name)
in the presence of:
...............................Witness (Signature)
...............................Full Name
...............................Address
...............................
...............................Occupation
SUBSCRIBED for and on behalf of SUBSCRIBED for and an behalf of
the said INVU Services Limited the said Vertical Investments Limited
by by
..........................Director ............................Director
..........................Director/Secretary ..................Director/Secretary
at at
on the day of 2001 on the day of 2001