EXHIBIT 10.29
[*] = information redacted pursuant to a confidential treatment request. Such
omitted information has been filed separately with the Securities and Exchange
Commission.
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LOAN AGREEMENT
by and among
PALM EUROPE LIMITED
as Subsidiary Borrower,
THE LENDERS THAT ARE SIGNATORIES HERETO
as the Lenders,
FOOTHILL CAPITAL CORPORATION
as the Arranger and Administrative Agent,
▇▇▇▇▇▇ FINANCIAL, INC.
as the Syndication Agent
and
THE CIT GROUP/BUSINESS CREDIT, INC.
as the Documentation Agent
Dated as of November 30, 2001
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TABLE OF CONTENTS
1. DEFINITIONS AND CONSTRUCTION.............................................1
1.1 Definitions.......................................................1
1.2 Accounting Terms.................................................23
1.3 [Intentionally omitted]..........................................24
1.4 Construction.....................................................24
1.5 Schedules and Exhibits...........................................24
2. LOAN AND TERMS OF PAYMENT...............................................24
2.1 Revolver Advances................................................24
2.2 [Intentionally omitted]..........................................25
2.3 Borrowing Procedures and Settlements.............................25
2.4 Payments.........................................................33
2.5 Overadvances.....................................................35
2.6 Interest Rates and Letter of Credit Fee: Rates, Payments,
and Calculations.................................................36
2.7 Cash Management..................................................37
2.8 Crediting Payments...............................................38
2.9 Designated Account...............................................39
2.10 Maintenance of Loan Account; Statements of Obligations...........39
2.11 Fees.............................................................39
2.12 Letters of Credit................................................40
2.13 LIBOR Option.....................................................43
2.14 Capital Requirements.............................................46
3. CONDITIONS; TERM OF AGREEMENT...........................................47
3.1 Conditions Precedent to the Initial Extension of Credit..........47
3.2 [Intentionally omitted]..........................................49
3.3 Conditions Precedent to all Extensions of Credit.................50
3.4 Term.............................................................50
3.5 Effect of Termination............................................50
3.6 Early Termination by Subsidiary Borrower.........................51
4. PERFECTION OF SECURITY INTEREST; INSPECTION RIGHTS......................51
4.1 [Intentionally omitted]..........................................51
4.2 [Intentionally omitted]..........................................51
4.3 [Intentionally omitted]..........................................51
4.4 Delivery of Additional Documentation Required....................51
4.5 Power of Attorney................................................52
4.6 Right to Inspect.................................................52
4.7 [Intentionally omitted]..........................................52
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5. REPRESENTATIONS AND WARRANTIES..........................................52
5.1 No Encumbrances..................................................53
5.2 Eligible Accounts................................................53
5.3 [Intentionally omitted]..........................................53
5.4 Equipment; Inventory.............................................53
5.5 [Intentionally omitted]..........................................53
5.6 [Intentionally omitted]..........................................53
5.7 Location of Head Office..........................................53
5.8 Due Organization and Qualification; Subsidiaries.................53
5.9 Due Authorization; No Conflict...................................54
5.10 Litigation.......................................................55
5.11 No Material Adverse Change.......................................55
5.12 Fraudulent Transfer..............................................56
5.13 [Intentionally omitted]..........................................56
5.14 [Intentionally omitted]..........................................56
5.15 Brokerage Fees...................................................56
5.16 Intellectual Property............................................56
5.17 Leases...........................................................56
5.18 DDAs.............................................................56
5.19 Complete Disclosure..............................................56
5.20 Indebtedness.....................................................57
5.21 [Intentionally omitted]..........................................57
5.22 Review and Approval of Domestic Loan Agreement...................57
6. AFFIRMATIVE COVENANTS...................................................57
6.1 Accounting System................................................57
6.2 Collateral Reporting.............................................58
6.3 Financial Statements, Reports, Certificates......................58
6.4 [Intentionally omitted]..........................................59
6.5 Return...........................................................59
6.6 Maintenance of Properties........................................60
6.7 Taxes............................................................60
6.8 Insurance........................................................60
6.9 Location of Equipment............................................61
6.10 Compliance with Laws.............................................61
6.11 Leases...........................................................62
6.12 Brokerage Commissions............................................62
6.13 Existence........................................................62
6.14 Environmental....................................................62
6.15 Disclosure Updates...............................................62
6.16 Compliance with Covenants of Domestic Loan Agreement.............62
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7. NEGATIVE COVENANTS......................................................63
7.1 Indebtedness.....................................................63
7.2 Liens............................................................63
7.3 Restrictions on Fundamental Changes..............................64
7.4 Disposal of Assets...............................................64
7.5 Change Name......................................................64
7.6 Guarantee........................................................64
7.7 Nature of Business...............................................64
7.8 Prepayments and Amendments.......................................64
7.9 Change of Control................................................64
7.10 Consignments.....................................................65
7.11 Distributions....................................................65
7.12 Accounting Methods...............................................65
7.13 Investments......................................................65
7.14 Transactions with Affiliates.....................................65
7.15 Suspension.......................................................65
7.16 [Intentionally omitted]..........................................65
7.17 Use of Proceeds..................................................65
7.18 Change in Location of Head Office................................65
7.19 Inventory........................................................65
7.20 [Intentionally omitted]..........................................65
7.21 Issuance of Stock................................................66
7.22 Compliance with Covenants of Domestic Loan Agreement.............66
8. EVENTS OF DEFAULT.......................................................66
9. THE LENDER GROUP'S RIGHTS AND REMEDIES..................................68
9.1 Rights and Remedies..............................................68
9.2 Remedies Cumulative..............................................69
10. TAXES AND EXPENSES......................................................69
11. WAIVERS; INDEMNIFICATION................................................69
11.1 Demand; Protest; etc.............................................69
11.2 [Intentionally omitted]..........................................69
11.3 Indemnification..................................................69
12. NOTICES. ...............................................................70
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER..............................71
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS..............................72
14.1 Assignments and Participations...................................72
14.2 Successors.......................................................75
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15. AMENDMENTS; WAIVERS.....................................................75
15.1 Amendments and Waivers...........................................75
15.2 Replacement of Holdout Lender....................................76
15.3 No Waivers; Cumulative Remedies..................................77
16. AGENT; THE LENDER GROUP.................................................77
16.1 Appointment and Authorization of Agent...........................77
16.2 Delegation of Duties.............................................78
16.3 Liability of Agent...............................................78
16.4 Reliance by Agent................................................79
16.5 Notice of Default or Event of Default............................79
16.6 Credit Decision..................................................79
16.7 Costs and Expenses; Indemnification..............................80
16.8 Agent in Individual Capacity.....................................81
16.9 Successor Agent..................................................81
16.10 Lender in Individual Capacity....................................81
16.11 Withholding Taxes................................................82
16.12 Collateral Matters...............................................85
16.13 Restrictions on Actions by Lenders; Sharing of Payments..........86
16.14 [Intentionally omitted]..........................................86
16.15 Payments by Agent to the Lenders.................................86
16.16 Concerning the Collateral and Related UK Loan Documents..........87
16.17 Field Audits and Examination Reports; Confidentiality;
Disclaimers by Lenders; Other Reports and Information............87
16.18 Several Obligations; No Liability................................88
16.19 Legal Representation of Agent....................................89
17. GENERAL PROVISIONS......................................................89
17.1 Effectiveness....................................................89
17.2 Section Headings.................................................89
17.3 Interpretation...................................................89
17.4 Severability of Provisions.......................................89
17.5 Amendments in Writing............................................89
17.6 Counterparts; Telefacsimile Execution............................89
17.7 Revival and Reinstatement of Obligations.........................90
17.8 Integration......................................................90
17.9 Confidentiality..................................................90
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LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement"), is entered into as of
November 30, 2001, between and among, on the one hand, the lenders identified on
the signature pages hereof (such lenders, together with their respective
successors and assigns, are referred to hereinafter each individually as a
"Lender" and collectively as the "Lenders"), FOOTHILL CAPITAL CORPORATION, a
California corporation, as the arranger and administrative agent for the Lenders
("Agent"), ▇▇▇▇▇▇ FINANCIAL, INC., a Delaware corporation (hereinafter
"▇▇▇▇▇▇"), and THE CIT GROUP/BUSINESS CREDIT, INC., a New York corporation
(hereinafter "CITBC") and, on the other hand, PALM EUROPE LIMITED, a corporation
organized under the laws of England and Wales ("Subsidiary Borrower"), and is
the "UK Loan Agreement" as that term is used in the Domestic Loan Agreement (as
defined below).
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 Definitions. As used in this Agreement, the following terms shall have
the following definitions:
"Account Debtor" means any Person who is or who may become obligated
under, with respect to, or on account of, an Account.
"Accounts" means the accounts of the Subsidiary Borrower and any and
all supporting obligations in respect thereof.
"Acquisition" means any purchase or other acquisition by Domestic
Parent or its Subsidiaries of the Stock of any other Person.
"Additional Documents" has the meaning set forth in Section 4.4.
"Advances" has the meaning set forth in Section 2.1.
"Affiliate" means, as applied to any Person, any other Person who,
directly or indirectly, controls, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person, whether through the ownership of Stock, by contract, or
otherwise; provided, however, that, for purposes of the definition of Eligible
Accounts and Section 7.14 hereof: (a) any Person which owns directly or
indirectly 10% or more of the securities having ordinary voting power for the
election of directors or other members of the governing body of a Person or 10%
or more of the partnership or other
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ownership interests of a Person (other than as a limited partner of such Person)
shall be deemed to control such Person, (b) each director (or comparable
manager) of a Person shall be deemed to be an Affiliate of such Person, and (c)
each partnership or joint venture in which a Person is a partner or joint
venturer shall be deemed to be an Affiliate of such Person.
"Agent" means Foothill, solely in its capacity as agent for the
Lenders hereunder, and any successor thereto.
"Agents" means Agent, Documentation Agent, and Syndication Agent.
"Agent's Account" means an account at a bank designated by Agent
from time to time as the account into which Subsidiary Borrower shall make all
payments to Agent for the benefit of the Lender Group and into which the Lender
Group shall make all payments to Agent under this Agreement and the other UK
Loan Documents; unless and until Agent notifies Subsidiary Borrower and the
Lender Group to the contrary, Agent's Account shall be that certain deposit
account bearing the account number set forth on Schedule A-1 and maintained by
Agent with the bank whose name, location and ABA number are set forth on
Schedule A-1.
"Agent Advances" has the meaning set forth in Section 2.3(e)(i).
"Agent's Liens" means the charges and Liens granted by Subsidiary
Borrower to Agent for the benefit of the Lender Group under the UK Security
Documents or the other UK Loan Documents.
"Agent-Related Persons" means Agent together with its Affiliates,
officers, directors, employees, and agents.
"Agreed Currency" means (i) Dollars, (ii) so long as such currencies
remain Eligible Currencies, the lawful currency of each Specified State and the
Euro, and (iii) any other Eligible Currency which Subsidiary Borrower requests
Agent to include as an Agreed Currency hereunder and which is acceptable to
Agents. If, after the designation by Agent of any currency as an Agreed
Currency, (a) currency control or other exchange regulations are imposed in the
country in which such currency is issued with the result that different types of
such currency are introduced, (b) such currency is, in the determination of the
Agent, no longer readily available or freely traded or (c) in the determination
of the Agent, an equivalent amount of such currency valued in Dollars at the
applicable Exchange Rate is not readily calculable, Agent shall promptly notify
Subsidiary Borrower, and such currency shall no longer be an Agreed Currency
until such time, if ever, as Agent agrees to reinstate such currency as an
Agreed Currency.
"Agreement" has the meaning set forth in the preamble hereto.
"Assignee" has the meaning set forth in Section 14.1.
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"Assignment and Acceptance" means an Assignment and Acceptance in
the form of Exhibit A-1.
"Authorized Person" means any director of Subsidiary Borrower or
other Person authorised by the Board of Directors.
"Availability" means, as of any date of determination, if such date
is a Business Day, and determined at the close of business on the immediately
preceding Business Day, if such date of determination is not a Business Day, the
amount that Subsidiary Borrower is entitled to borrow as Advances under Section
2.1 (after giving effect to all then outstanding Obligations and all sublimits
and reserves applicable hereunder).
"Bankruptcy Code" means the English Insolvency Act of 1986, as in
effect from time to time in England and Wales.
"Base LIBOR Rate" means the rate per annum, determined by Agent in
accordance with its customary procedures, and utilizing such electronic or other
quotation sources as it considers appropriate (rounded upwards, if necessary, to
the next 1/16%), on the basis of the rates at which Dollar deposits are offered
to major banks in the London interbank market at 11:00 a.m. (London time) 2
Business Days prior to the commencement of the applicable Interest Period, for a
term and in amounts comparable to the Interest Period and amount of the LIBOR
Rate Loan requested by Subsidiary Borrower in accordance with this Agreement,
which determination shall be conclusive in the absence of manifest error.
"Base Rate" means the rate of interest announced within ▇▇▇▇▇ Fargo
at its principal office in San Francisco as its "prime rate", with the
understanding that the "prime rate" is one of ▇▇▇▇▇ Fargo's base rates (not
necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publication or publications as ▇▇▇▇▇ Fargo may designate.
"Base Rate Loan" means each portion of an Advance that bears
interest at a rate determined by reference to the Base Rate.
"Base Rate Margin" means, as of any date of determination, for the 3
month period ended on the day prior to the applicable interest payment date, the
percentage points determined by the following matrix:
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Average Amount of the Total Revolver Usage Base Rate Margin
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Less than $50,000,000 0.25
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$50,000,000 or greater, up to and including $125,000,000 0.75
--------------------------------------------------------------------------------
greater than $125,000,000 1.00
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"Board of Directors" means the board of directors of Subsidiary
Borrower or any committee thereof duly authorized to act on behalf of such board
of directors.
"Books" means Subsidiary Borrower's now owned or hereafter acquired
books and records indicating, summarizing, or evidencing the Collateral.
"Borrowing" means a borrowing hereunder consisting of Advances made
on the same day by the Lenders (or Agent on behalf thereof), or by Swing Lender
in the case of a Swing Loan, or by Agent in the case of an Agent Advance.
"Borrowing Base" has the meaning set forth in Section 2.1.
"Borrowing Base Certificate" means a certificate in the form of
Exhibit B-1.
"Business Day" means any day that is not a Saturday, Sunday, or
other day on which United States or United Kingdom national banks are authorized
or required to close, except that, if a determination of a Business Day shall
relate to a LIBOR Rate Loan, the term "Business Day" also shall exclude any day
on which banks are closed for dealings in Dollar deposits in the London
interbank market.
"Capital Lease" means a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means any Indebtedness represented by
obligations under a Capital Lease.
"Cash Equivalents" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within 1 year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from either S&P or ▇▇▇▇▇'▇,
(c) commercial paper maturing no more than 1 year from the date of acquisition
thereof and, at the time of acquisition, having a rating of A-1 or P-1, or
better, from S&P or ▇▇▇▇▇'▇, and (d) certificates of deposit or bankers'
acceptances maturing within 1 year from the date of acquisition thereof either
(i) issued by any bank organized under the laws of the United States or any
state thereof which bank has a rating of A or A2, or better, from S&P or
▇▇▇▇▇'▇, or (ii) certificates of deposit less than or equal to $100,000 in the
aggregate issued by any other bank insured by the Federal Deposit Insurance
Corporation.
"Change of Control" means (a) Domestic Parent ceases to directly own
100% of the outstanding shares of Irish Parent; (b) Irish Parent ceases to
directly own 100% of the outstanding shares of Subsidiary Borrower; (c) a
majority of the members of the Board of
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Directors do not constitute Continuing Directors, or (d) the occurrence of a
Change of Control (as defined in the Domestic Loan Agreement).
"CITBC" has the meaning set forth in the preamble hereto.
"Closing Date" means the date of the making of the initial Advance
(or other extension of credit) hereunder.
"Collateral" means any and all assets and rights and interests in or
to property pledged from time to time as security for the Obligations pursuant
to any pledge or security agreement that constitutes a UK Loan Document.
"Collateral Access Agreement" means a landlord waiver, bailee
letter, or acknowledgement agreement of any lessor, warehouseman, processor,
consignee, or other Person in possession of, having a Lien upon, or having
rights or interests in the Equipment, in each case, in form and substance
satisfactory to Agent.
"Collections" means all cash, cheques, drafts, and other customary
items of payment (including insurance proceeds, proceeds of cash sales, rental
proceeds, and tax refunds) of Subsidiary Borrower.
"Commitment" means, with respect to each Lender, its Commitment and,
with respect to all Lenders, their Commitments, in each case as such Dollar
amounts are set forth beside such Lender's name under the applicable heading on
Schedule C-1 or on the signature page of the Assignment and Acceptance pursuant
to which such Lender became a Lender hereunder in accordance with the provisions
of Section 14.1.
"Companies Act" means the Companies Act of 1985 of England and
Wales, as amended.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit C-1 delivered by the chief financial officer of Subsidiary
Borrower to Agent.
"Confidential Information" means written information that Subsidiary
Borrower expressly furnishes to Agent or the Lenders on a confidential basis,
information contained in the documents that Subsidiary Borrower furnishes to
Agent pursuant to subsections (a) through (j) of Section 6.2, or written
information that Subsidiary Borrower furnishes to Agent or the Lenders that
relates to Subsidiary Borrower's forecasts, projections, strategic plans, or
Intellectual Property, but does not include any such information that is or
becomes generally available to the public (other than information that is or
becomes available to the public as a result of disclosure by Agent or a Lender
in violation of Section 17.9) or that is or becomes available to Agent or a
Lender from a source other than Subsidiary Borrower or any agent of Subsidiary
Borrower unless Agent or such Lender
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knows, or reasonably should know, that such source is breaching a duty of
confidentiality to Subsidiary Borrower.
"Continuing Director" means (a) any member of the Board of Directors
who was a director of Subsidiary Borrower on the date of this Agreement, and (b)
any individual who becomes a member of the Board of Directors after the date of
this Agreement if such individual was appointed or nominated for election to the
Board of Directors by a majority of the Continuing Directors, but excluding any
such individual originally proposed for election in opposition to the Board of
Directors in office at the date of this Agreement in an actual or threatened
election contest relating to the election of the directors (or comparable
managers) of Subsidiary Borrower and whose initial assumption of office resulted
from such contest or the settlement thereof.
"Daily Balance" means, with respect to each day during the term of
this Agreement, the amount of an Obligation owed at the end of such day.
"DDA" means any cheque or other demand deposit account maintained by
Subsidiary Borrower.
"Default" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
"Defaulting Lender" means any Lender that fails to make any Advance
(or other extension of credit) that it is required to make hereunder on the date
that it is required to do so hereunder.
"Defaulting Lender Rate" means (a) the Base Rate for the first 3
days from and after the date the relevant payment is due, and (b) thereafter, at
the interest rate then applicable to Advances that are Base Rate Loans
(inclusive of the Base Rate Margin applicable thereto).
"Designated Account" means that certain deposit account of
Subsidiary Borrower bearing the account number and sort code set forth on
Schedule D-1 and maintained with Subsidiary Borrower's Designated Account Bank,
or such other deposit account of Subsidiary Borrower that has been designated as
such, in writing, by Subsidiary Borrower to Agent.
"Designated Account Bank" means the bank set forth on Schedule D-2.
"Dilution" means, as of any date of determination, a percentage,
based upon the experience of the applicable Dilution Look Back Period that is
the result of dividing the Dollar amount of (a) bad debt write-downs, discounts,
advertising allowances, credits, or other dilutive items with respect to
Accounts of Subsidiary Borrower for goods sold or services rendered during such
period, by (b) Subsidiary Borrower's Collections with respect
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to Accounts for goods sold or services rendered during such period (excluding
extraordinary items) plus the Dollar amount of clause (a).
"Dilution Look Back Period" means the immediately prior 90 days.
"Dilution Reserve" means, as of any date of determination, an amount
sufficient to reduce the advance rate against Subsidiary Borrower's Eligible
Accounts by one percentage point for each percentage point by which Dilution is
in excess of 5%.
"Documentation Agent" means CITBC in its capacity as the
documentation agent under the UK Loan Documents, and its successors in such
capacity.
"Dollars" or "$" means United States dollars.
"Domestic Eligible Accounts" means "Eligible Accounts" (as defined
in the Domestic Loan Agreement).
"Domestic Loan Agreement" means that certain Loan and Security
Agreement dated as of June 25, 2001 by and among Domestic Parent, Lenders, and
Agents.
"Domestic Loan Documents" means the "Loan Documents" (as defined in
the Domestic Loan Agreement).
"Domestic Parent" means Palm, Inc., a Delaware corporation.
"Domestic Revolver Usage" means, as of any date of determination,
the "Revolver Usage" (as defined in the Domestic Loan Agreement).
"Eligible Accounts" means those Accounts created by Subsidiary
Borrower in the ordinary course of its business, that arise out of Subsidiary
Borrower's sale of goods or rendition of services, that comply with each of the
representations and warranties respecting Eligible Accounts made by Subsidiary
Borrower in the UK Loan Documents, and that are not excluded as ineligible by
virtue of one or more of the criteria set forth below; provided, however, that
such criteria may be fixed and revised from time to time by Agent in Agent's
Permitted Discretion to address the results of any audit performed by Agent from
time to time after the Closing Date. In determining the amount to be included,
Eligible Accounts shall be calculated net of customer deposits and unapplied
cash remitted to Subsidiary Borrower. Eligible Accounts shall not include the
following:
(a) Accounts that the Account Debtor has failed to pay within
90 days of original invoice date or Accounts with selling terms of more than 60
days,
(b) Accounts owed by an Account Debtor (or its Affiliates)
where 50% or more of all Accounts owed by that Account Debtor (or its
Affiliates) are deemed ineligible under clause (a) above,
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(c) Accounts with respect to which the Account Debtor is an
employee, Affiliate, or agent of Subsidiary Borrower,
(d) Accounts arising in a transaction wherein goods are placed
on consignment or are sold pursuant to a guaranteed sale, a sale or return, a
sale on approval, a ▇▇▇▇ and hold, or any other terms by reason of which the
payment by the Account Debtor may be conditional,
(e) Accounts that are not payable in an Agreed Currency,
(f) Accounts with respect to which the Account Debtor either
(i) does not maintain its head office in a Specified State, or (ii) is not
organized under the laws of a Specified State or any political subdivision
thereof, or (iii) is the government of any country or sovereign state (other
than that of the United Kingdom; provided, however, that the aggregate amount of
such Accounts shall not exceed $2,000,000), or of any state, province,
municipality, or other political subdivision thereof, or of any department,
agency, public corporation, or other instrumentality thereof;
(g) [Intentionally omitted],
(h) Accounts with respect to which the Account Debtor is a
creditor of Subsidiary Borrower has or has asserted a right of setoff, has
disputed its liability, or has made any claim with respect to its obligation to
pay the Account, to the extent of such claim, right of setoff, or dispute,
(i) Accounts with respect to an Account Debtor whose total
obligations owing to Subsidiary Borrower exceed 10% of (i) all Eligible
Accounts, and (ii) all Eligible Accounts, Domestic Eligible Accounts and Irish
Eligible Accounts, in each case to the extent of the obligations owing by such
Account Debtor in excess of such percentage; provided, however, that Agent may,
in its Permitted Discretion, increase the foregoing percentage for any Account
Debtor up to a maximum of 20%; provided further, that in the case of ▇▇▇▇▇▇
Micro, the foregoing percentage shall be deemed increased to 17% and, in the
case of Staples and Best Buy, the foregoing percentage shall be deemed increased
to 15% for each of such entities; provided further, that Agent may, in its
Permitted Discretion, decrease the foregoing percentage for any Account Debtor
based on a determination of the credit worthiness of such Account Debtor,
(j) Accounts with respect to which the Account Debtor is
subject to an Insolvency Proceeding, is not Solvent, has gone out of business,
or as to which Subsidiary Borrower has received notice of an imminent Insolvency
Proceeding or a material impairment of the financial condition of such Account
Debtor,
(k) Accounts, the collection of which, Agent, in its Permitted
Discretion, believes to be doubtful; provided, however, that Agent agrees to
endeavor, in
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good faith, to provide Subsidiary Borrower with reasonably prompt verbal notice
of those material Account Debtors of Subsidiary Borrower that Agent deems to be
doubtful under the foregoing provision,
(l) Accounts that are not subject to a valid and perfected
first priority Agent's Lien,
(m) Accounts with respect to which (i) the goods giving rise
to such Account have not been shipped and billed to the Account Debtor, or (ii)
the services giving rise to such Account have not been performed and billed to
the Account Debtor, or
(n) Accounts that represent the right to receive progress
payments or other advance ▇▇▇▇▇▇▇▇ that are due prior to the completion of
performance by Subsidiary Borrower of the subject contract for goods or
services.
"Eligible Currency" means any currency other than Dollars (a) that
is readily available, (b) that is freely traded, (c) in which deposits are
customarily offered to banks in the London interbank market, (d) that is
convertible into Dollars in the London interbank market, (e) as to which an
equivalent amount valued in Dollars at the applicable Exchange Rate may be
readily calculated, and (f) that is otherwise acceptable to Agent in its
Permitted Discretion.
"Eligible Transferee" means (a) a commercial bank organized under
the laws of the United States, or any state thereof, and having total assets in
excess of $250,000,000, (b) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of any such country and which has total
assets in excess of $250,000,000, provided that such bank is acting through a
branch or agency located in the United States, (c) a finance company, insurance
company, or other financial institution or fund that is engaged in making,
purchasing, or otherwise investing in commercial loans in the ordinary course of
its business and having (together with its Affiliates) total assets in excess of
$250,000,000, (d) any Affiliate (other than individuals) of a Lender that was
party hereto as of the Closing Date, (e) so long as no Event of Default has
occurred and is continuing, any other Person approved by Agent and Subsidiary
Borrower, and (f) during the continuation of an Event of Default, any other
Person approved by Agent. Notwithstanding anything to the contrary in Sections
(b) and (c) hereof, an Eligible Transferee shall not include any Person who (i)
is a resident of a country that does not have an income tax treaty with the
United Kingdom providing zero withholding on interest payments and as a
condition of assignment, and (ii) does not agree to complete any procedural
formalities necessary for Subsidiary Borrower to qualify for zero withholding on
interest payments, including, but not limited to, providing or updating relevant
documentation pursuant to Section 16.11(f).
"Equipment" means equipment, machinery, machine tools, motors,
furniture, furnishings, fixtures, vehicles (including motor vehicles), tools,
parts, goods (other than
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consumer goods, farm products, or Inventory), wherever located, including all
attachments, accessories, accessions, replacements, substitutions, additions,
and improvements to any of the foregoing.
"Environmental Actions" means any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter, or other communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials from (a) any assets, properties, or
businesses of Subsidiary Borrower or any predecessor in interest, (b) from
adjoining properties or businesses, or (c) from or onto any facilities which
received Hazardous Materials generated by Subsidiary Borrower or any predecessor
in interest.
"Environmental Law" means any applicable federal, state, provincial,
foreign or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy, or rule of common
law now or hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, to the extent binding on Subsidiary Borrower,
relating to the environment, employee health and safety, or Hazardous Materials,
including Environment ▇▇▇ ▇▇▇▇; any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.
"Environmental Liabilities and Costs" means all liabilities,
monetary obligations, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, experts, or consultants,
and costs of investigation and feasibility studies), fines, penalties,
sanctions, and interest incurred as a result of any claim or demand by any
Governmental Authority or any third party, and which relate to any Environmental
Action.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"Event of Default" has the meaning set forth in Section 8.
"Excess Availability" means the amount, as of the date any
determination thereof is to be made, equal to Availability minus the aggregate
amount, if any, of all trade payables of Subsidiary Borrower aged in excess of
historical levels with respect thereto and all book overdrafts of Subsidiary
Borrower in excess of historical practices with respect thereto, in each case as
determined by Agent in its Permitted Discretion.
"Exchange Rate" means and refers to the nominal rate of exchange
(vis-a-vis Dollars) for a currency other than Dollars published in the Wall
Street Journal (Western Edition) on the date of determination (which shall be a
Business Day on which the Wall
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Street Journal (Western Edition) is published), expressed as the number of units
of such other currency per one Dollar.
"Euro" means the euro referred to in Council Regulation (EC) No.
1103/97 dated June 17, 1997, passed by the Council of the European Union, or, if
different, the then lawful currency of the member states of the European Union
that participate in the third stage of Economic and Monetary Union.
"Foothill" means Foothill Capital Corporation, a California
corporation.
"Foreign Exchange Reserve" means, as of any date of determination, a
reserve for foreign currency exchange rate risk (in relation to Dollars) with
respect to the Eligible Accounts and in such amount as shall be determined by
Agent in its Permitted Discretion from time to time.
"Funding Date" means the date on which a Borrowing occurs.
"Funding Losses" has the meaning set forth in Section 2.13(b)(ii).
"GAAP" means generally accepted accounting principles as in effect
from time to time in the United States, consistently applied.
"Governing Documents" means, with respect to any Person, the
memorandum and articles of association, certificate or articles of
incorporation, by-laws, or other organizational documents of such Person.
"Governmental Authority" means any federal, state, local, or other
governmental or administrative body, instrumentality, department, or agency or
any court, tribunal, administrative hearing body, arbitration panel, commission,
or other similar dispute-resolving panel or body.
"Gross Up Amount" has the meaning set forth in Section 16.11(e).
"Guarantors" means collectively, Domestic Parent and Irish Borrower,
and "Guarantor" means either of them.
"Hazardous Materials" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in
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any form or electrical equipment that contains any oil or dielectric fluid
containing levels of polychlorinated biphenyls in excess of 50 parts per
million.
"▇▇▇▇▇▇" has the meaning set forth in the preamble hereto.
"Indebtedness" means, with respect to any Person, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes, or other similar instruments and
all reimbursement or other obligations of such Person in respect of letters of
credit, bankers acceptances, interest rate swaps, or other financial products,
(c) all obligations of such Person under Capital Leases, (d) all obligations or
liabilities of any other Person secured by a Lien on any asset of such Person,
irrespective of whether such obligation or liability is assumed, (e) all
obligations of such Person for the deferred purchase price of assets (other than
trade debt incurred in the ordinary course of such Person's business and
repayable in accordance with customary trade practices), and (f) any obligation
of such Person guaranteeing or intended to guarantee (whether directly or
indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse to
such Person) any obligation of any other Person.
"Indemnified Liabilities" has the meaning set forth in Section 11.3.
"Indemnified Person" has the meaning set forth in Section 11.3.
"Insolvency Proceeding" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other state
or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
"Insolvent" means a Person which or who is unable to pay its debts
as defined in the Insolvency Act of 1986.
"Intellectual Property" means all of Subsidiary Borrower's patents,
patent applications, trademarks, trademark applications, tradenames, tradedress,
copyrights, copyright registrations, technology, know how and processes used in
the conduct of the business of Subsidiary Borrower and its Subsidiaries.
"Intercompany Advances" means loans or advances from Domestic Parent
or one of its Subsidiaries to Domestic Parent or one of its Subsidiaries.
"Interest Period" means, with respect to each LIBOR Rate Loan, a
period commencing on the date of the making of such LIBOR Rate Loan and ending
1, 2, or 3 months thereafter; provided, however, that (a) if any Interest Period
would end on a day that is not a Business Day, such Interest Period shall be
extended (subject to clauses (c)-(e) below) to the next succeeding Business Day,
(b) interest shall accrue at the applicable rate
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based upon the LIBOR Rate from and including the first day of each Interest
Period to, but excluding, the day on which any Interest Period expires, (c) any
Interest Period that would end on a day that is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (d) with respect to an Interest Period that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period), the Interest Period shall end on the last Business Day of the calendar
month that is 1, 2, or 3 months after the date on which the Interest Period
began, as applicable, and (e) Subsidiary Borrower may not elect an Interest
Period which will end after the Maturity Date.
"Inventory" means all goods held for sale or lease or to be
furnished under a contract of service, goods that are leased as lessor, goods
that are furnished under a contract of service, and raw materials, work in
process, or materials used or consumed in business.
"Investment" means, with respect to any Person, any investment by
such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide Accounts arising from the
sale of goods or rendition of services in the ordinary course of business
consistent with past practice), purchases or other acquisitions for
consideration of Indebtedness or Stock, and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
"IRC" means the Internal Revenue Code of 1986, as in effect from
time to time.
"Irish Borrower" means Palm Global Operations Ltd., a corporation
organized under the laws of the Republic of Ireland.
"Irish Debenture" means, collectively, those certain fixed and
floating charge debentures, executed and delivered by Irish Borrower in favor of
Agent, in form and substance satisfactory to Agent.
"Irish Eligible Accounts" means "Eligible Accounts" (as defined in
the Irish Loan Agreement").
"Irish Guaranty" means a guaranty executed and delivered by Domestic
Parent of the Indebtedness of the Irish Borrower owing under the Irish Loan
Documents, the form and substance of which is satisfactory to Agent.
"Irish Loan Agreement" means a loan agreement between and among
Agent, the Lenders, and Irish Borrower providing for the making of advances by
the Lenders to Irish
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Borrower in a maximum amount outstanding at any one time not to exceed the
Maximum Irish Loan Amount.
"Irish Loan Documents" means, collectively, such instruments,
agreements, and documents (including a pledge of the Stock of Irish Borrower and
a guaranty of the Indebtedness of UK Borrower under the UK Loan Agreement, in
each case, if doing so is permitted by applicable law and would not create a
material tax obligation) as Agent may require in order to evidence and secure
the obligations of the Irish Borrower, including the Irish Loan Agreement, the
Irish Security Documents and the Irish Guaranty.
"Irish Loan Usage" means, as of any date of determination, the then
extant amount of Indebtedness outstanding under the Irish Loan Agreement.
"Irish Parent" means Palm Ireland Investment, a corporation
organized under the laws of Ireland.
"Irish Security Documents" means, collectively, such instruments,
agreements, and documents governed by the laws of Ireland as Agent may require
in order to secure the Indebtedness of Irish Borrower under the Irish Loan
Agreement, including the Irish Debenture.
"Issuing Lender" means Foothill or any other Lender that, at the
request of Borrower and with the consent of Agent agrees, in such Lender's sole
discretion, to become an Issuing Lender for the purpose of issuing L/Cs or L/C
Undertakings pursuant to Section 2.12.
"L/C" has the meaning set forth in Section 2.12(a).
"L/C Disbursement" means a payment made by the Issuing Lender
pursuant to a Letter of Credit.
"L/C Undertaking" has the meaning set forth in Section 2.12(a).
"Lender" and "Lenders" have the respective meanings set forth in the
preamble to this Agreement, and shall include any other Person made a party to
this Agreement in accordance with the provisions of Section 14.1.
"Lender Group" means, individually and collectively, each of the
Lenders and Agent.
"Lender Group Expenses" means all (a) costs or expenses required to
be paid by Subsidiary Borrower under any of the UK Loan Documents that are paid
or incurred by the Lender Group, (b) actual fees or charges paid or incurred by
Agent in connection with the Lender Group's transactions with Subsidiary
Borrower, including, fees or charges for photocopying, notarization, couriers
and messengers, telecommunication, public record
-14-
searches (including tax lien, litigation, and UCC searches, and including
searches that are foreign equivalents thereof), filing, recording, publication,
appraisal (including periodic Collateral appraisals or business valuations to
the extent of the fees and charges (and up to the amount of any limitation)
contained in this Agreement), real estate surveys, real estate title policies
and endorsements, and environmental audits, (c) actual costs and expenses
incurred by Agent in the disbursement of funds to Subsidiary Borrower (by wire
transfer or otherwise), (d) actual charges paid or incurred by Agent resulting
from the dishonor of cheques, (e) reasonable costs and expenses paid or incurred
by the Lender Group to correct any default or enforce any provision of the UK
Loan Documents, or in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the
Collateral, or any portion thereof, irrespective of whether a sale is
consummated, (f) audit fees and expenses of Agent related to audit examinations
of the Books to the extent of the fees and charges (and up to the amount of any
limitation) contained in this Agreement, (g) reasonable costs and expenses of
third party claims or any other suit paid or incurred by the Lender Group in
enforcing or defending the UK Loan Documents or in connection with the
transactions contemplated by the UK Loan Documents or the Lender Group's
relationship with Subsidiary Borrower or any guarantor of the Obligations, (h)
Agent's reasonable fees and expenses (including attorneys fees) incurred in
advising, structuring, drafting, reviewing, administering, or amending the UK
Loan Documents, and (i) Agent's and each Lender's reasonable fees and expenses
(including attorneys fees) incurred in terminating, enforcing (including
attorneys fees and expenses incurred in connection with a "workout," a
"restructuring," or an Insolvency Proceeding concerning Subsidiary Borrower or
in exercising rights or remedies under the UK Loan Documents), or defending the
UK Loan Documents, irrespective of whether suit is brought.
"Lender-Related Person" means, with respect to any Lender, such
Lender, together with such Lender's Affiliates, and the officers, directors,
employees, and agents of such Lender.
"Letter of Credit" means an L/C or an L/C Undertaking, as the
context requires.
"Letter of Credit Usage" means, as of any date of determination, the
aggregate undrawn amount of all outstanding Letters of Credit plus 100% of the
amount of outstanding time drafts accepted by an Underlying Issuer as a result
of drawings under Underlying Letters of Credit.
"LIBOR Deadline" has the meaning set forth in Section 2.13(b)(i).
"LIBOR Notice" means a written notice in the form of Exhibit L-1.
"LIBOR Rate" means, for each Interest Period for each LIBOR Rate
Loan, the rate per annum determined by Agent (rounded upwards, if necessary, to
the next 1/16%) by dividing (a) the Base LIBOR Rate for such Interest Period, by
(b) 100% minus the Reserve
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Percentage. The LIBOR Rate shall be adjusted on and as of the effective day of
any change in the Reserve Percentage.
"LIBOR Rate Loan" means each portion of an Advance that bears interest at
a rate determined by reference to the LIBOR Rate.
"LIBOR Rate Margin" means, as of any date of determination, for the 3
month period ended on the day prior to the applicable interest payment date, the
percentage points determined by the following matrix:
--------------------------------------------------------------------------------
Average Amount of the Total Revolver Usage LIBOR Rate Margin
--------------------------------------------------------------------------------
Less than $50,000,000 2.25
--------------------------------------------------------------------------------
$50,000,000 or greater, up to and including $125,000,000 2.75
--------------------------------------------------------------------------------
greater than $125,000,000 3.00
--------------------------------------------------------------------------------
"Lien" means any interest in an asset securing an obligation owed
to, or a claim by, any Person other than the owner of the asset, whether such
interest shall be based on the common law, statute, or contract, whether such
interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also including reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
"Loan Account" has the meaning set forth in Section 2.10.
"Material Adverse Change" means (a) a material adverse change in the
business, prospects, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of Subsidiary Borrower, (b) a material
impairment of Subsidiary Borrower's ability to perform its obligations under the
UK Loan Documents to which it is a party or of the Lender Group's ability to
enforce the Obligations or realize upon the Collateral, (c) a material
impairment of the enforceability or priority of the Agent's Liens with respect
to the Collateral as a result of an action or failure to act on the part of
Subsidiary Borrower, (d) a Material Adverse Change (as defined in the Domestic
Loan Agreement), or (e) a Material Adverse Change (as defined in the Irish Loan
Agreement).
"Maturity Date" has the meaning set forth in Section 3.4.
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"Maximum Domestic Revolver Amount" means the "Maximum Revolver
Amount" (as defined in the Domestic Loan Agreement).
"Maximum Irish Loan Amount" means, as of any date of determination,
the result of (a) $10,000,000, minus (b) the amount by which the sum of the
Domestic Revolver Usage plus the Subsidiary Borrower Revolver Usage exceeds
$140,000,000.
"Maximum Subsidiary Revolver Amount" means, as of any date of
determination, the result of (a) $20,000,000, minus (b) the amount by which the
sum of the Domestic Revolver Usage plus the Irish Loan Usage exceeds
$130,000,000.
"Obligations" means all loans, Advances, debts, principal, interest
(including any interest that, but for the provisions of the Bankruptcy Code,
would have accrued), premiums, liabilities (including all amounts charged to
Subsidiary Borrower's Loan Account pursuant hereto), contingent reimbursement
obligations with respect to outstanding Letters of Credit, obligations, fees,
charges, costs, Lender Group Expenses (including any fees or expenses that, but
for the provisions of the Bankruptcy Code, would have accrued), lease payments,
guaranties, covenants, and duties of any kind and description owing by
Subsidiary Borrower to the Lender Group pursuant to or evidenced by the UK Loan
Documents and irrespective of whether for the payment of money, whether direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and including all interest not paid when due and all Lender
Group Expenses that Subsidiary Borrower is required to pay or reimburse by the
UK Loan Documents, by law, or otherwise. Any reference in this Agreement or in
the UK Loan Documents to the Obligations shall include all amendments, changes,
extensions, modifications, renewals replacements, substitutions, and
supplements, thereto and thereof, as applicable, both prior and subsequent to
any Insolvency Proceeding.
"Originating Lender" has the meaning set forth in Section 14.1(e).
"Overadvance" has the meaning set forth in Section 2.5.
"Participant" has the meaning set forth in Section 14.1(e).
"Permitted Discretion" means a determination made in good faith and
in the exercise of reasonable (from the perspective of a secured asset-based
lender) business judgment.
"Permitted Dispositions" means (a) sales or other dispositions by
Subsidiary Borrower of Equipment that is substantially worn, damaged, or
obsolete in the ordinary course of business, (b) the use or transfer of money or
Cash Equivalents by Subsidiary Borrower in a manner that is not prohibited by
the terms of this Agreement or the other UK Loan Documents, and (c) the sale,
licensing, or other disposition for fair market value by Subsidiary Borrower of
patents, trademarks, copyrights, and other intellectual property rights;
provided, however, that prior to or concurrent with any such sale, license, or
other
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disposition, Subsidiary Borrower must retain or obtain sufficient rights to use
(as determined by Agent in its Permitted Discretion) the subject intellectual
property as to enable Subsidiary Borrower to continue to conduct its business in
the ordinary course and such rights shall assignable to Agent or inure to the
benefit of Agent (as determined by Agents in their Permitted Discretion) in
order to enable Agent to dispose of the Collateral in the event of an Event of
Default.
"Permitted Intercompany Advances" means Intercompany Advances so
long as (a) no Default or Event of Default exists at the time of the making of
any Intercompany Advance or would exist after giving effect thereto, (b) after
giving effect to the making of such Intercompany Advance, the Person that is
acting as the lender with respect thereto is Solvent, (c) the Intercompany
Subordination Agreement (as defined in the Domestic Loan Agreement) is in full
force and effect with respect to the proposed Intercompany Advance, (d) after
giving effect to the making of such Intercompany Advance, the Person that is
acting as the borrower with respect thereto is Solvent, (e) if Domestic Parent,
Subsidiary Borrower or Irish Borrower is the Person acting as the lender with
respect thereto and a Subsidiary of Domestic Parent that is not the Subsidiary
Borrower or Irish Borrower is the Person acting as the borrower with respect
thereto, such Intercompany Advance is made in the ordinary course of business
and the amount of such Intercompany Advance does not exceed Subsidiary
Borrower's or Irish Borrower's, as applicable, current working capital
requirements and it does not have more than one month's worth of cash or Cash
Equivalents after giving effect thereto, (f) in cases not covered by clause (e)
above, if Domestic Parent is the Person acting as the lender with respect
thereto, it has availability under the Domestic Loan Agreement plus cash and
Cash Equivalents that have been pledged to Agent (and are subject to a control
agreement in favor of Agent) in an amount not less than $75,000,000 after giving
effect thereto, (g) in cases not covered by clause (e) above, if Irish Borrower
is the Person acting as the lender with respect thereto, it has availability
under the Irish Loan Agreement plus cash and Cash Equivalents that have been
pledged to Agent (and are subject to a control agreement in favor of Agent) of
not less than $5,000,000 after giving effect thereto, and (h) in cases not
covered by clause (e) above, if Subsidiary Borrower is the Person acting as the
lender with respect thereto, it has Availability plus cash and Cash Equivalents
that have been pledged to Agent (and are subject to a control agreement in favor
of Agent) of not less than $10,000,000 after giving effect thereto.
"Permitted Liens" means (a) Liens held by Agent for the benefit of
Agent and the Lenders, (b) Liens for unpaid taxes that either (i) are not yet
delinquent, or (ii) do not constitute an Event of Default hereunder and are the
subject of Permitted Protests, (c) Liens set forth on Schedule P-3, (d) the
interests of lessors under operating leases, (e) Liens arising by operation of
law in favor of warehousemen, landlords, carriers, mechanics, materialmen,
laborers, or suppliers, incurred in the ordinary course of business of
Subsidiary Borrower and not in connection with the borrowing of money, and which
Liens either (i) are for sums not yet delinquent, or (ii) are the subject of
Permitted Protests, (f) Liens arising from deposits made in connection with
obtaining employer's liability insurance or other unemployment insurance, (g)
Liens or deposits to secure performance of bids, tenders, or leases incurred in
-18-
the ordinary course of business of Subsidiary Borrower and not in connection
with the borrowing of money, (h) Liens granted as security for surety or appeal
bonds in connection with obtaining such bonds in the ordinary course of business
of Subsidiary Borrower, (i) Liens resulting from any judgment or award that is
not an Event of Default hereunder, and (j) with respect to any Real Property,
easements, rights of way, and zoning restrictions that do not materially
interfere with or impair the use or operation thereof by Subsidiary Borrower.
"Permitted Protest" means the right of Subsidiary Borrower to
protest any Lien (other than any such Lien that secures the Obligations), taxes
(other than payroll taxes or taxes that are the subject of an Inland Revenue tax
lien), or rental payment, provided that (a) a reserve with respect to such
obligation is established on the Books in such amount as is required under GAAP,
(b) any such protest is instituted promptly and prosecuted diligently by
Subsidiary Borrower in good faith, and (c) Agent is satisfied that, while any
such protest is pending, there will be no impairment of the enforceability or
validity of any of the Agent's Liens.
"Person" means natural persons, corporations, limited liability
companies, limited partnerships, general partnerships, limited liability
partnerships, joint ventures, trusts, land trusts, business trusts, or other
organizations, irrespective of whether they are legal entities, and governments
and agencies and political subdivisions thereof.
"Preferred Stock" means, as applied to the capital Stock of any
Person, the capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such Person,
over shares of capital Stock of any other class of such Person.
"Prohibited Indebtedness" means, with respect to any Person, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes, or other similar instruments and
all reimbursement or other obligations of such Person in respect of letters of
credit, bankers acceptances, interest rate swaps, or other financial products,
(c) all obligations or liabilities of any other Person secured by a Lien on any
asset of such Person, irrespective of whether such obligation or liability is
assumed, and (d) any obligation of such Person guaranteeing or intended to
guarantee (whether directly or indirectly guaranteed, endorsed, co-made,
discounted, or sold with recourse to such Person) any obligation of any other
Person.
"Pro Rata Share" means:
(a) with respect to a Lender's obligation to make Advances and
receive payments of principal, interest, fees, costs, and expenses with respect
thereto, the percentage obtained by dividing (i) such Lender's Commitment, by
(ii) the aggregate Commitments of all Lenders,
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(b) with respect to a Lender's obligation to participate in
Letters of Credit, to reimburse the Issuing Lender, and to receive payments of
fees with respect thereto, the percentage obtained by dividing (i) such Lender's
Commitment, by (ii) the aggregate Revolver of all Lenders, and
(c) with respect to all other matters (including the
indemnification obligations arising under Section 16.7), the percentage obtained
by dividing (i) such Lender's Commitment, by (ii) the aggregate amount of
Commitments of all Lenders; provided, however, that, in each case, in the event
all Commitments have been terminated, Pro Rata Share shall be determined
according to the Commitments in effect immediately prior to such termination.
"Qualified Cash" means, as of any date of determination, the amount
of unrestricted cash and Cash Equivalents of Subsidiary Borrower that is on
deposit with banks, or in securities accounts with securities intermediaries, or
any combination thereof, and which such deposit account or securities account is
maintained by a branch office located within the United States.
"Real Property" means any estates or interests in real property now
owned or hereafter acquired by Subsidiary Borrower and the improvements thereto.
"Real Property Collateral" means the parcel or parcels of Real
Property identified on Schedule R-1 and any Real Property hereafter acquired by
Borrower.
"Record" means information that is inscribed on a tangible medium or
which is stored in an electronic or other medium and is retrievable in
perceivable form.
"Remedial Action" means all actions taken to (a) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate, or in any way address
Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) perform any pre-remedial studies,
investigations, or post-remedial operation and maintenance activities, or (d)
conduct any other actions authorized by 42 USC ss. 9601 or any equivalent
foreign legislation.
"Report" has the meaning set forth in Section 16.17.
"Required Lenders" means, at any time, any two or more Lenders whose
Pro Rata Shares aggregate more than 50% of the Commitments, or if the
Commitments have been terminated irrevocably, more than 50% of the Obligations
then outstanding.
"Reserve Percentage" means, on any day, for any Lender, the maximum
percentage prescribed by the Board of Governors of the Federal Reserve System
(or any successor Governmental Authority) for determining the reserve
requirements (including any
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basic, supplemental, marginal, or emergency reserves) that are in effect on such
date with respect to eurocurrency funding (currently referred to as
"eurocurrency liabilities") of that Lender, but so long as such Lender is not
required or directed under applicable regulations to maintain such reserves, the
Reserve Percentage shall be zero.
"Risk Participation Liability" means, as to each Letter of Credit,
all reimbursement obligations of Borrower to the Issuing Lender with respect to
an L/C Undertaking, consisting of (a) the amount available to be drawn or which
may become available to be drawn, (b) all amounts that have been paid by the
Issuing Lender to the Underlying Issuer to the extent not reimbursed by
Borrower, whether by the making of an Advance or otherwise, and (c) all accrued
and unpaid interest, fees, and expenses payable with respect thereto.
"SEC" means the United States Securities and Exchange Commission and
any successor thereto.
"Settlement" has the meaning set forth in Section 2.3(f)(i).
"Settlement Date" has the meaning set forth in Section 2.3(f)(i).
"Solvent" means, with respect to any Person on a particular date,
that such Person is not Insolvent.
"Specified State" means England, Scotland, Wales, Ireland,
Australia, France, Germany, Italy, New Zealand, Canada, Norway, Finland,
Switzerland, Sweden, Belgium, Japan, Singapore, the Netherlands United Kingdom
and Ireland, or any other country approved by Agent in its sole discretion.
"Stock" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
Person, whether voting or nonvoting, including common stock, preferred stock, or
any other equity security.
"Subsidiary" of a Person means a corporation, partnership, limited
liability company, or other entity in which that Person directly or indirectly
owns or controls the shares of Stock having ordinary voting power to elect a
majority of the board of directors (or appoint other comparable managers) of
such corporation, partnership, limited liability company, or other entity.
"Subsidiary Borrower" has the meaning set forth in the preamble to
this Agreement.
"Subsidiary Borrower Collateral" means all of Subsidiary Borrower's
now owned or hereafter acquired right, title, and interest in and to each of the
following:
(a) Accounts,
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(b) Books,
(c) Equipment,
(d) Intercompany Advances,
(e) Inventory,
(f) Real Property Collateral, and
(g) the proceeds and products, whether tangible or intangible,
of any of the foregoing, including proceeds of insurance covering any or all of
the foregoing, and all property resulting from the sale, exchange, collection,
or other disposition of any of the foregoing, or any portion thereof or interest
therein, and the proceeds thereof.
"Subsidiary Borrower Revolver Usage" means, as of any date of
determination, the sum of (a) the then extant amount of outstanding Advances,
plus (b) the then extant amount of the Letter of Credit Usage.
"Swing Lender" means Foothill or any other Lender that, at the
request of Subsidiary Borrower and with the consent of Agent agrees, in such
Lender's sole discretion, to become the Swing Lender hereunder.
"Swing Loan" has the meaning set forth in Section 2.3(d)(i).
"Syndication Agent" means ▇▇▇▇▇▇ in its capacity as the syndication
agent under the UK Loan Documents, and its successors in such capacity.
"Taxes" has the meaning set forth in Section 16.11.
"Total Revolver Usage" means, as of any date of determination, the
sum of (a) the Domestic Revolver Usage, plus (b) the Subsidiary Borrower
Revolver Usage, plus (c) the Irish Loan Usage.
"Triggering Event" means either (a) the occurrence and continuation
of an Event of Default, or (b) the first date on which the amount of
Availability under the Domestic Loan Agreement, this Agreement and the Irish
Loan Agreement (calculated, prior to the Closing Date of any such agreement, as
if the conditions precedent in Section 3.1 of such agreement have been
satisfied) plus Qualified Cash that has been pledged to Agent under the Domestic
Loan Agreement, this Agreement and the Irish Loan Agreement and subject to a
control agreement (in form and substance satisfactory to Agent) is equal to or
less than $100,000,000, in the aggregate.
"UK Cash Management Bank" has the meaning set forth in Section
2.7(a).
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"UK Cash Management Account" has the meaning set forth in Section
2.7(a).
"UK Cash Management Agreements" means those certain cash management
service agreements, in form and substance satisfactory to Agent, each of which
is among Subsidiary Borrower, Agent and one of the UK Cash Management Banks.
"UK Debenture" means, collectively, a guarantee and those certain
fixed and floating charge debentures, executed and delivered by Subsidiary
Borrower in favor of Agent, in form and substance satisfactory to Agent.
"UK Guaranty" means a guaranty executed and delivered by Domestic
Parent of the Indebtedness of the Subsidiary Borrower owing under the UK Loan
Documents, the form and substance of which is satisfactory to Agent.
"UK Loan Documents" means this Agreement, the Letters of Credit,
the UK Debenture, the UK Guaranty, the UK Stock Pledge Agreement, the UK Cash
Management Agreements, any other UK Security Documents, any note or notes
executed by Subsidiary Borrower in connection with this Agreement and payable to
a member of the Lender Group, and any other agreement entered into, now or in
the future, by Subsidiary Borrower and the Lender Group in connection with this
Agreement.
"UK Security Documents" means, collectively, such instruments,
agreements, and documents as Agent may require in order to secure the
Indebtedness of Subsidiary Borrower under this Agreement, including the UK
Debenture.
"UK Stock Pledge Agreement" means a share charge, in form and
substance satisfactory to Agent, executed and delivered by Irish Parent with
respect to 100% of the shares of Subsidiary Borrower.
"Underlying Issuer" means a third Person which is the beneficiary of
an L/C Undertaking and which has issued a letter of credit at the request of the
Issuing Lender for the benefit of Subsidiary Borrower.
"Voidable Transfer" has the meaning set forth in Section 17.7.
"▇▇▇▇▇ Fargo" means ▇▇▇▇▇ Fargo Bank, National Association, a
national banking association.
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1.2 Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. When used herein, the term
"financial statements" shall include the notes and schedules thereto. Whenever
the term "Subsidiary Borrower" is used in respect of a financial covenant or a
related definition, it shall be understood to mean Subsidiary Borrower and its
Subsidiaries on a consolidated basis unless the context clearly requires
otherwise.
1.3 [Intentionally omitted].
1.4 Construction. Unless the context of this Agreement or any other UK
Loan Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the term "including" is
not limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and similar terms in this Agreement or any
other UK Loan Document refer to this Agreement or such other UK Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other UK Loan Document, as the case may be. Section,
subsection, clause, schedule, and exhibit references herein are to this
Agreement unless otherwise specified. Any reference in this Agreement or in the
other UK Loan Documents to any agreement, instrument, or document shall include
all alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). Any reference herein to any Person
shall be construed to include such Person's successors and assigns. Any
requirement of a writing contained herein or in the other UK Loan Documents
shall be satisfied by the transmission of a Record and any Record transmitted
shall constitute a representation and warranty as to the accuracy and
completeness of the information contained therein.
1.5 Schedules and Exhibits. All of the schedules and exhibits attached to
this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 Revolver Advances.
(a) Subject to the terms and conditions of this Agreement, and
during the term of this Agreement, each Lender agrees (severally, not jointly or
jointly and severally) to make advances ("Advances") to Subsidiary Borrower in
an amount at any one time outstanding not to exceed such Lender's Pro Rata Share
of an amount equal to the lesser of (i) the Maximum Subsidiary Revolver Amount
less the Letter of Credit Usage, or (ii) the Borrowing Base less the Letter of
Credit Usage. For purposes of this Agreement, "Borrowing Base," as of any date
of determination, shall mean the result of:
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(y) the lesser of
(i) 75% of the Dollar equivalent amount of
Subsidiary Borrower's Eligible Accounts, less the
amount, if any, of the Dilution Reserve, and
(ii) an amount equal to 83.3% of the Dollar
equivalent amount of Subsidiary Borrower's
Collections with respect to Subsidiary Borrower's
Accounts for the immediately preceding 90 day
period, minus
(z) the aggregate amount of reserves, if any,
established by Agent under Section 2.1(b).
(b) Anything to the contrary in this Section 2.1
notwithstanding, Agent shall have the right to establish reserves in such
amounts, and with respect to such matters, as Agent in its Permitted Discretion
shall deem necessary or appropriate, against the Borrowing Base, including
reserves with respect to (i) sums that Subsidiary Borrower is required to pay
(such as taxes, assessments, insurance premiums, or, in the case of leased
assets, rents or other amounts payable under such leases) and has failed to pay
under any Section of this Agreement or any other Loan Document, (ii) amounts
owing by Subsidiary Borrower to any Person to the extent secured by a Lien on,
or trust over, any of the Collateral (including any existing Permitted Lien set
forth on Schedule P-3 which Lien or trust would have a priority superior to the
Agent's Liens (under applicable law) in and to such item of the Collateral, and
(iii) the Foreign Exchange Reserve.
(c) The Lenders shall have no obligation to make additional
Advances hereunder to the extent such additional Advances would cause the
Subsidiary Borrower Revolver Usage to exceed the Maximum Subsidiary Revolver
Amount.
(d) Amounts borrowed pursuant to this Section may be repaid
and, subject to the terms and conditions of this Agreement, reborrowed at any
time during the term of this Agreement.
2.2 [Intentionally omitted].
2.3 Borrowing Procedures and Settlements.
(a) Procedure for Borrowing. Each Borrowing shall be made by an
irrevocable written request by an Authorized Person delivered to Agent (which
notice must be received by Agent no later than 10:00 a.m. (California time) on
the Business Day prior to the date that is the requested Funding Date in the
case of a request for an Advance specifying (i) the amount of such Borrowing,
and (ii) the requested Funding Date, which shall be a Business Day; provided,
however, that in the case of a request for Swing Loan in
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an amount of $10,000,000 or less, such notice will be timely received if it is
received by Agent no later than 10:00 a.m. (California time) on the Business Day
that is the requested Funding Date) specifying (i) the amount of such Borrowing,
and (ii) the requested Funding Date, which shall be a Business Day. At Agent's
election, in lieu of delivering the above-described written request, any
Authorized Person may give Agent telephonic notice of such request by the
required time, with such telephonic notice to be confirmed in writing within 24
hours of the giving of such notice.
(b) Agent's Election. Promptly after receipt of a request for
a Borrowing pursuant to Section 2.3(a), Agent shall elect, in its discretion,
(i) to have the terms of Section 2.3(c) apply to such requested Borrowing, or
(ii) if the Borrowing is for an Advance, to request Swing Lender to make a Swing
Loan pursuant to the terms of Section 2.3(d) in the amount of the requested
Borrowing; provided, however, that if Swing Lender declines in its sole
discretion to make a Swing Loan pursuant to Section 2.3(d), Agent shall elect to
have the terms of Section 2.3(c) apply to such requested Borrowing.
(c) Making of Advances.
(i) In the event that Agent shall elect to have the terms of
this Section 2.3(c) apply to a requested Borrowing as described in
Section 2.3(b), then promptly after receipt of a request for a
Borrowing pursuant to Section 2.3(a), Agent shall notify the
Lenders, not later than 1:00 p.m. (California time) on the Business
Day immediately preceding the Funding Date applicable thereto, by
telecopy, telephone, or other similar form of transmission, of the
requested Borrowing. Each Lender shall make the amount of such
Lender's Pro Rata Share of the requested Borrowing available to
Agent in Dollars and immediately available funds, to Agent's
Account, not later than 10:00 a.m. (California time) on the Funding
Date applicable thereto. After Agent's receipt of the proceeds of
such Advances, upon satisfaction of the applicable conditions
precedent set forth in Section 3 hereof, Agent shall make the
proceeds thereof available to Subsidiary Borrower on the applicable
Funding Date by transferring immediately available funds in Dollars
equal to such proceeds received by Agent to Subsidiary Borrower's
Designated Account; provided, however, that, subject to the
provisions of Section 2.3(i), Agent shall not request any Lender to
make, and no Lender shall have the obligation to make, any Advance
if Agent shall have actual knowledge that (1) one or more of the
applicable conditions precedent set forth in Section 3 will not be
satisfied on the requested Funding Date for the applicable Borrowing
unless such condition has been waived, or (2) the requested
Borrowing would exceed the Availability on such Funding Date.
(ii) Unless Agent receives notice from a Lender on or prior to
the Closing Date or, with respect to any Borrowing after the Closing
Date, at least 1 Business Day prior to the date of such Borrowing,
that such Lender will not
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make available as and when required hereunder to Agent for the
account of Subsidiary Borrower the amount of that Lender's Pro Rata
Share of the Borrowing, Agent may assume that each Lender has made
or will make such amount available to Agent in Dollars and
immediately available funds on the Funding Date and Agent may (but
shall not be so required), in reliance upon such assumption, make
available to Subsidiary Borrower on such date a corresponding
amount. If and to the extent any Lender shall not have made its full
amount available to Agent in Dollars and immediately available funds
and Agent in such circumstances has made available to Subsidiary
Borrower such amount, that Lender shall on the Business Day
following such Funding Date make such amount available to Agent,
together with interest at the Defaulting Lender Rate for each day
during such period. A notice submitted by Agent to any Lender with
respect to amounts owing under this subsection shall be conclusive,
absent manifest error. If such amount is so made available, such
payment to Agent shall constitute such Lender's Advance on the date
of Borrowing for all purposes of this Agreement. If such amount is
not made available to Agent on the Business Day following the
Funding Date, Agent will notify Subsidiary Borrower of such failure
to fund and, upon demand by Agent, Subsidiary Borrower shall pay
such amount to Agent for Agent's account, together with interest
thereon for each day elapsed since the date of such Borrowing, at a
rate per annum equal to the interest rate applicable at the time to
the Advances composing such Borrowing. The failure of any Lender to
make any Advance on any Funding Date shall not relieve any other
Lender of any obligation hereunder to make an Advance on such
Funding Date, but no Lender shall be responsible for the failure of
any other Lender to make the Advance to be made by such other Lender
on any Funding Date.
(iii) Agent shall not be obligated to transfer to a Defaulting
Lender any payments made by Subsidiary Borrower to Agent for the
Defaulting Lender's benefit, and, in the absence of such transfer to
the Defaulting Lender, Agent shall transfer any such payments to
each other non-Defaulting Lender member of the Lender Group ratably
in accordance with their Commitments (but only to the extent that
such Defaulting Lender's Advance was funded by the other members of
the Lender Group) or, if so directed by Subsidiary Borrower and if
no Default or Event of Default had occurred and is continuing (and
to the extent such Defaulting Lender's Advance was not funded by the
Lender Group), retain same to be re-advanced to Subsidiary Borrower
as if such Defaulting Lender had made Advances to Subsidiary
Borrower. Subject to the foregoing, Agent may hold and, in its
Permitted Discretion, re-lend to Subsidiary Borrower for the account
of such Defaulting Lender the amount of all such payments received
and retained by it for the account of such Defaulting Lender. Solely
for the purposes of voting or consenting to matters with respect to
the UK Loan Documents, such Defaulting Lender shall be
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deemed not to be a "Lender" and such Lender's Commitment shall be
deemed to be zero. This Section shall remain effective with respect
to such Lender until (x) the Obligations under this Agreement shall
have been declared or shall have become immediately due and payable,
(y) the non-Defaulting Lenders, Agent, and Subsidiary Borrower shall
have waived such Defaulting Lender's default in writing, or (z) the
Defaulting Lender makes its Pro Rata Share of the applicable Advance
and pays to Agent all amounts owing by Defaulting Lender in respect
thereof. The operation of this Section shall not be construed to
increase or otherwise affect the Commitment of any Lender, to
relieve or excuse the performance by such Defaulting Lender or any
other Lender of its duties and obligations hereunder, or to relieve
or excuse the performance by Subsidiary Borrower of its duties and
obligations hereunder to Agent or to the Lenders other than such
Defaulting Lender. Any such failure to fund by any Defaulting Lender
shall constitute a material breach by such Defaulting Lender of this
Agreement and shall entitle Subsidiary Borrower at its option, upon
written notice to Agent, to arrange for a substitute Lender to
assume the Commitment of such Defaulting Lender, such substitute
Lender to be acceptable to Agent. In connection with the arrangement
of such a substitute Lender, the Defaulting Lender shall have no
right to refuse to be replaced hereunder, and agrees to execute and
deliver a completed form of Assignment and Acceptance Agreement in
favor of the substitute Lender (and agrees that it shall be deemed
to have executed and delivered such document if it fails to do so)
subject only to being repaid its share of the outstanding
Obligations (including an assumption of its Pro Rata Share of the
Risk Participation Liability) without any premium or penalty of any
kind whatsoever; provided further, however, that any such assumption
of the Commitment of such Defaulting Lender shall not be deemed to
constitute a waiver of any of the Lender Groups' or Subsidiary
Borrower's rights or remedies against any such Defaulting Lender
arising out of or in relation to such failure to fund.
(d) Making of Swing Loans.
(i) In the event Agent shall elect, with the consent of Swing
Lender, as a Lender, to have the terms of this Section 2.3(d) apply
to a requested Borrowing as described in Section 2.3(b), Swing
Lender as a Lender shall make such Advance in the amount of such
Borrowing (any such Advance made solely by Swing Lender as a Lender
pursuant to this Section 2.3(d) being referred to as a "Swing Loan"
and such Advances being referred to collectively as "Swing Loans")
available to Subsidiary Borrower on the Funding Date applicable
thereto by transferring immediately available funds in Dollars to
Subsidiary Borrower's Designated Account. Each Swing Loan is an
Advance hereunder and shall be subject to all the terms and
conditions
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applicable to other Advances, except that no such Swing Loan shall
be eligible for the LIBOR Option and all payments on any Swing Loan
shall be payable to Swing Lender as a Lender solely for its own
account (and for the account of the holder of any participation
interest with respect to such Swing Loan). Subject to the provisions
of Section 2.3(i), Agent shall not request Swing Lender as a Lender
to make, and Swing Lender as a Lender shall not make, any Swing Loan
if Agent has actual knowledge that (i) one or more of the applicable
conditions precedent set forth in Section 3 will not be satisfied on
the requested Funding Date for the applicable Borrowing unless such
condition has been waived, or (ii) the requested Borrowing would
exceed the Availability on such Funding Date. Swing Lender as a
Lender shall not otherwise be required to determine whether the
applicable conditions precedent set forth in Section 3 have been
satisfied on the Funding Date applicable thereto prior to making, in
its sole discretion, any Swing Loan.
(ii) The Swing Loans shall be secured by the Agent's Liens,
shall constitute Advances and Obligations hereunder, and shall bear
interest at the rate applicable from time to time to Advances that
are Base Rate Loans.
(e) Agent Advances.
(i) Agent hereby is authorized by Subsidiary Borrower and the
Lenders, from time to time after the Closing Date, in Agent's sole
discretion, (1) after the occurrence and during the continuance of a
Default or an Event of Default, or (2) at any time that any of the
other applicable conditions precedent set forth in Section 3 have
not been satisfied, to make Advances to Subsidiary Borrower on
behalf of the Lenders that Agent, in its Permitted Discretion deems
necessary or desirable (A) to preserve or protect the Collateral, or
any portion thereof, (B) to enhance the likelihood of repayment of
the Obligations, or (C) to pay any other amount chargeable to
Subsidiary Borrower pursuant to the terms of this Agreement,
including Lender Group Expenses and the costs, fees, and expenses
described in Section 10 (any of the Advances described in this
Section 2.3(e) shall be referred to as "Agent Advances"). Each Agent
Advance is an Advance hereunder and shall be subject to all the
terms and conditions applicable to other Advances, except that no
such Agent Advance shall be eligible for the LIBOR Option and all
payments thereon shall be payable to Agent solely for its own
account (and for the account of the holder of any participation
interest with respect to such Agent Advance).
(ii) The Agent Advances shall be repayable on demand and
secured by the Agent's Liens granted to Agent under the UK Loan
Documents, shall constitute Advances and Obligations hereunder, and
shall bear interest at the rate applicable from time to time to
Advances that are Base Rate Loans.
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(f) Settlement. It is agreed that each Lender's funded portion
of the Advances is intended by the Lenders to equal, at all times, such Lender's
Pro Rata Share of the outstanding Advances. Such agreement notwithstanding,
Agent, Swing Lender, and the other Lenders agree (which agreement shall not be
for the benefit of or enforceable by Subsidiary Borrower) that in order to
facilitate the administration of this Agreement and the other UK Loan Documents,
settlement among them as to the Advances, the Swing Loans, and the Agent
Advances shall take place on a periodic basis in accordance with the following
provisions:
(i) Agent shall request settlement ("Settlement") with the
Lenders on a weekly basis (or on a more frequent basis if so
determined by Agent) or upon termination of the Loan Agreement (1)
on behalf of Swing Lender, with respect to each outstanding Swing
Loan, (2) for itself, with respect to each Agent Advance, and (3)
with respect to Collections received, as to each by notifying the
Lenders by telecopy, telephone, or other similar form of
transmission, of such requested Settlement, no later than 2:00 p.m.
(California time) on the Business Day immediately prior to the date
of such requested Settlement (the date of such requested Settlement
being the "Settlement Date"). Such notice of a Settlement Date shall
include a summary statement of the amount of outstanding Advances,
Swing Loans, and Agent Advances for the period since the prior
Settlement Date. Subject to the terms and conditions contained
herein (including Section 2.3(c)(iii)): (y) if a Lender's balance of
the Advances, Swing Loans, and Agent Advances exceeds such Lender's
Pro Rata Share of the Advances, Swing Loans, and Agent Advances as
of a Settlement Date, then Agent shall, by no later than 12:00 p.m.
(California time) on the Settlement Date, transfer in immediately
available funds to the account of such Lender as such Lender may
designate, an amount such that each such Lender shall, upon receipt
of such amount, have as of the Settlement Date, its Pro Rata Share
of the Advances, Swing Loans, and Agent Advances, and (z) if a
Lender's balance of the Advances, Swing Loans, and Agent Advances is
less than such Lender's Pro Rata Share of the Advances, Swing Loans,
and Agent Advances as of a Settlement Date, such Lender shall no
later than 12:00 p.m. (California time) on the Settlement Date
transfer in immediately available funds to the Agent's Account, an
amount such that each such Lender shall, upon transfer of such
amount, have as of the Settlement Date, its Pro Rata Share of the
Advances, Swing Loans, and Agent Advances. Such amounts made
available to Agent under clause (z) of the immediately preceding
sentence shall be applied against the amounts of the applicable
Swing Loan or Agent Advance and, together with the portion of such
Swing Loan or Agent Advance representing Swing Lender's Pro Rata
Share thereof, shall constitute Advances of such Lenders. If any
such amount is not made available to Agent by any Lender on the
Settlement Date applicable thereto to the extent required by the
terms hereof, Agent shall be entitled to recover for
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its account such amount on demand from such Lender together with
interest thereon at the Defaulting Lender Rate.
(ii) In determining whether a Lender's balance of the
Advances, Swing Loans, and Agent Advances is less than, equal to, or
greater than such Lender's Pro Rata Share of the Advances, Swing
Loans, and Agent Advances as of a Settlement Date, Agent shall, as
part of the relevant Settlement, apply to such balance the portion
of payments actually received in good funds by Agent with respect to
principal, interest, fees payable by Subsidiary Borrower and
allocable to the Lenders hereunder, and proceeds of Collateral. To
the extent that a net amount is owed to any such Lender after such
application, such net amount shall be distributed by Agent to that
Lender as part of such next Settlement.
(iii) Between Settlement Dates, Agent, to the extent no Agent
Advances or Swing Loans are outstanding, may pay over to Swing
Lender any payments received by Agent, that in accordance with the
terms of this Agreement would be applied to the reduction of the
Advances, for application to Swing Lender's Pro Rata Share of the
Advances. If, as of any Settlement Date, Collections received since
the then immediately preceding Settlement Date have been applied to
Swing Lender's Pro Rata Share of the Advances other than to Swing
Loans, as provided for in the previous sentence, Swing Lender shall
pay to Agent for the accounts of the Lenders, and Agent shall pay to
the Lenders, to be applied to the outstanding Advances of such
Lenders, an amount such that each Lender shall, upon receipt of such
amount, have, as of such Settlement Date, its Pro Rata Share of the
Advances. During the period between Settlement Dates, Swing Lender
with respect to Swing Loans, Agent with respect to Agent Advances,
and each Lender (subject to the effect of letter agreements between
Agent and individual Lenders) with respect to the Advances other
than Swing Loans and Agent Advances, shall be entitled to interest
at the applicable rate or rates payable under this Agreement on the
daily amount of funds employed by Swing Lender, Agent, or the
Lenders, as applicable.
(g) Notation. Agent shall record on its books the principal
amount of the Advances owing to each Lender, including the Swing Loans owing to
Swing Lender, and Agent Advances owing to Agent, and the interests therein of
each Lender, from time to time. In addition, each Lender is authorized, at such
Lender's option, to note the date and amount of each payment or prepayment of
principal of such Lender's Advances in its books and records, including computer
records, such books and records constituting conclusive evidence, absent
manifest error, of the accuracy of the information contained therein.
(h) Lenders' Failure to Perform. All Advances (other than
Swing Loans and Agent Advances) shall be made by the Lenders contemporaneously
and in
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accordance with their Pro Rata Shares. It is understood that (i) no Lender shall
be responsible for any failure by any other Lender to perform its obligation to
make any Advance (or other extension of credit) hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligations hereunder, and (ii) no failure by
any Lender to perform its obligations hereunder shall excuse any other Lender
from its obligations hereunder.
(i) Optional Overadvances. Any contrary provision of this
Agreement notwithstanding, the Lenders hereby authorize Agent or Swing Lender,
as applicable, and Agent or Swing Lender, as applicable, may, but is not
obligated to, knowingly and intentionally, continue to make Advances (including
Swing Loans) to Subsidiary Borrower notwithstanding that an Overadvance exists
or thereby would be created, so long as (i) after giving effect to such Advances
(including a Swing Loan), the outstanding Subsidiary Borrower Revolver Usage
does not exceed the Borrowing Base by more than $1,000,000, (ii) after giving
effect to such Advances (including a Swing Loan), the outstanding Subsidiary
Borrower Revolver Usage (except for and excluding amounts charged to the Loan
Account for interest, fees, or Lender Group Expenses) does not exceed the
Maximum Subsidiary Revolver Amount, and (iii) at the time of the making of any
such Advance (including any Swing Loan), Agent does not believe, in good faith,
that the Overadvance created by such Advance will be outstanding for more than
30 days; provided, however, that the authorization described in this Section
2.3(i) may be revoked by the Required Lenders at any time by written notice to
Agent. The foregoing provisions are for the exclusive benefit of Agent, Swing
Lender, and the Lenders and are not intended to benefit Subsidiary Borrower in
any way. The Advances and Swing Loans, as applicable, that are made pursuant to
this Section 2.3(i) shall be subject to the same terms and conditions as any
other Advance or Swing Loan, as applicable, except that they shall not be
eligible for the LIBOR Option and the rate of interest applicable thereto shall
be the rate applicable to Advances that are Base Rate Loans under Section 2.6(c)
hereof without regard to the presence or absence of a Default or Event of
Default.
(i) In the event Agent obtains actual knowledge that the
Subsidiary Borrower Revolver Usage exceeds the amounts permitted by
the preceding paragraph, regardless of the amount of, or reason for,
such excess, Agent shall notify Lenders as soon as practicable (and
prior to making any (or any additional) intentional Overadvances
(except for and excluding amounts charged to the Loan Account for
interest, fees, or Lender Group Expenses) unless Agent determines
that prior notice would result in imminent harm to the Collateral or
its value), and the Lenders with Revolver Commitments thereupon
shall, together with Agent, jointly determine the terms of
arrangements that shall be implemented with Subsidiary Borrower
intended to reduce, within a reasonable time, the outstanding
principal amount of the Advances to Subsidiary Borrower to an amount
permitted by the preceding paragraph. In the event Agent or any
Lender disagrees over the terms of
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reduction or repayment of any Overadvance, the terms of reduction or
repayment thereof shall be implemented according to the
determination of the Required Lenders.
(ii) Each Lender with a Revolver Commitment shall be obligated
to settle with Agent as provided in Section 2.3(f) for the amount of
such Lender's Pro Rata Share of any unintentional Overadvances by
Agent reported to such Lender, any intentional Overadvances made as
permitted under this Section 2.3(i), and any Overadvances resulting
from the charging to the Loan Account of interest, fees, or Lender
Group Expenses.
2.4 Payments.
(a) Payments by Subsidiary Borrower.
(i) Except as otherwise expressly provided herein, all
payments by Subsidiary Borrower shall be made to Agent's Account for
the account of the Lender Group and shall be made in Dollars and
immediately available funds, no later than 11:00 a.m. (California
time) on the date specified herein. Any payment received by Agent
later than 11:00 a.m. (California time) shall be deemed to have been
received on the following Business Day and any applicable interest
or fee shall continue to accrue until such following Business Day.
(ii) Unless Agent receives notice from Subsidiary
Borrower prior to the date on which any payment is due to the
Lenders that Subsidiary Borrower will not make such payment in full
as and when required, Agent may assume that Subsidiary Borrower has
made (or will make) such payment in full to Agent on such date in
Dollars and immediately available funds and Agent may (but shall not
be so required), in reliance upon such assumption, distribute to
each Lender on such due date an amount equal to the amount then due
such Lender. If and to the extent Subsidiary Borrower does not make
such payment in full to Agent on the date when due, each Lender
severally shall repay to Agent on demand such amount distributed to
such Lender, together with interest thereon at the Defaulting Lender
Rate for each day from the date such amount is distributed to such
Lender until the date repaid.
(b) Apportionment and Application of Payments.
(i) Except as otherwise provided with respect to Defaulting
Lenders and except as otherwise provided in the UK Loan Documents
(including letter agreements between Agent and individual Lenders),
aggregate principal and interest payments shall be apportioned ratably
among the Lenders (according to the unpaid principal balance of the
Obligations to
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which such payments relate held by each Lender) and payments of fees and
expenses (other than fees or expenses that are for Agent's separate
account, after giving effect to any letter agreements between Agent and
individual Lenders) shall be apportioned ratably among the Lenders having
a Pro Rata Share of the type of Commitment or Obligation to which a
particular fee relates. All payments shall be remitted to Agent and all
such payments (other than payments received while no Default or Event of
Default has occurred and is continuing and which relate to the payment of
principal or interest of specific Obligations or which relate to the
payment of specific fees), and all proceeds of Accounts or other
Collateral received by Agent, shall be applied as follows:
(A) first, to pay any Lender Group Expenses then due to Agent
under the UK Loan Documents, until paid in full,
(B) second, to pay any Lender Group Expenses then due to the
Lenders under the UK Loan Documents, on a ratable basis, until paid
in full,
(C) third, to pay any fees then due to Agent (for its separate
accounts, after giving effect to any letter agreements between Agent
and individual Lenders) under the UK Loan Documents until paid in
full,
(D) fourth, to pay any fees then due to any or all of the
Lenders (after giving effect to any letter agreements between Agent
and individual Lenders) under the UK Loan Documents, on a ratable
basis, until paid in full,
(E) fifth, to pay interest due in respect of all Agent
Advances, until paid in full,
(F) sixth, ratably to pay interest due in respect of the
Advances (other than Agent Advances) and the Swing Loans until paid
in full,
(G) seventh, to pay the principal of all Agent Advances until
paid in full,
(H) eighth, to pay the principal of all Swing Loans until paid
in full,
(I) ninth, to pay the principal of all Advances until paid in
full,
(J) tenth, if an Event of Default has occurred and is
continuing, to Agent, to be held by Agent, for the ratable benefit
of Issuing Lender and Lenders, as cash collateral in an amount up to
105% of the then extant Letter of Credit Usage until paid in full,
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(K) eleventh, to pay any other Obligations (including the
Obligations of Subsidiary Borrower then owing under the guarantee
contained in the UK Debenture) until paid in full, and
(L) twelfth, to Subsidiary Borrower (to be wired to the
Designated Account) or such other Person entitled thereto under
applicable law.
(ii) Agent promptly shall distribute to each Lender, pursuant to the
applicable wire instructions received from each Lender in writing, such
funds as it may be entitled to receive, subject to a Settlement delay as
provided in Section 2.3(h).
(iii) In each instance, so long as no Default or Event of Default
has occurred and is continuing, Section 2.4(b) shall not be deemed to
apply to any payment by Subsidiary Borrower specified by Subsidiary
Borrower to be for the payment of specific Obligations then due and
payable (or prepayable) under any provision of this Agreement.
(iv) For purposes of the foregoing, "paid in full" means payment of
all amounts owing under the UK Loan Documents according to the terms
thereof, including loan fees, service fees, professional fees, interest
(and specifically including interest accrued after the commencement of any
Insolvency Proceeding), default interest, interest on interest, and
expense reimbursements, whether or not the same would be or is allowed or
disallowed in whole or in part in any Insolvency Proceeding.
(v) In the event of a direct conflict between the priority
provisions of this Section 2.4 and other provisions contained in any other
UK Loan Document, it is the intention of the parties hereto that such
priority provisions in such documents shall be read together and
construed, to the fullest extent possible, to be in concert with each
other. In the event of any actual, irreconcilable conflict that cannot be
resolved as aforesaid, the terms and provisions of this Section 2.4 shall
control and govern.
2.5 Overadvances. Subject to Section 2.3(i), if, at any time or for any
reason, the amount of Obligations owed by Subsidiary Borrower to the Lender
Group pursuant to Sections 2.1 and 2.12 is greater than either the Dollar or
percentage limitations set forth in Sections 2.1 or 2.12, (an "Overadvance"),
Subsidiary Borrower immediately shall pay to
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Agent, in Dollars, the amount of such excess, which amount shall be used by
Agent to reduce the Obligations in accordance with the priorities set forth in
Section 2.4(b). In addition, Subsidiary Borrower hereby promises to pay the
Obligations (including principal, interest, fees, costs, and expenses) in
Dollars in full to the Lender Group as and when due and payable under the terms
of this Agreement and the other UK Loan Documents.
2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and
Calculations.
(a) Interest Rates. Except as provided in clause (c) below,
all Obligations (except for undrawn Letters of Credit) that have been charged to
the Loan Account pursuant to the terms hereof shall bear interest on the Daily
Balance thereof as follows (i) if the relevant Obligation is an Advance that is
a LIBOR Rate Loan, at a per annum rate equal to the LIBOR Rate plus the LIBOR
Rate Margin, and (ii) otherwise, at a per annum rate equal to the Base Rate plus
the Base Rate Margin. The foregoing notwithstanding, at no time shall any
portion of the Obligations bear interest on the Daily Balance thereof at a per
annum rate less than 6% per annum. To the extent that interest accrued hereunder
at the rate set forth herein would be less than the foregoing minimum daily
rate, the interest rate chargeable hereunder for such day automatically shall be
deemed increased to the minimum rate.
(b) Letter of Credit Fee. Borrower shall pay Agent (for the
ratable benefit of the Lenders with a Revolver Commitment, subject to any letter
agreement between Agent and individual Lenders), a Letter of Credit fee (in
addition to the charges, commissions, fees, and costs set forth in Section
2.12(e)) which shall accrue at a rate equal to 1.50% per annum times the Daily
Balance of the undrawn amount of all outstanding Letters of Credit.
(c) Default Rate. Upon the occurrence and during the
continuation of an Event of Default (and at the election of Agent or the
Required Lenders),
(i) all Obligations (except for undrawn Letters of
Credit) that have been charged to the Loan Account pursuant to
the terms hereof shall bear interest on the Daily Balance
thereof at a per annum rate equal to 3 percentage points above
the per annum rate otherwise applicable hereunder, and
(ii) the Letter of Credit Fee provided for above shall
be increased to 3 percentage points above the per annum rate
otherwise applicable hereunder.
(d) Payment. Interest and all fees payable hereunder shall be
earned monthly and (other than the Letter of Credit Fee) due and payable, in
arrears, on the first day of each month at any time that Obligations or
Commitments are outstanding. The
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Letter of Credit Fees payable hereunder shall be earned monthly and due and
payable, in arrears, on the first day of each third month (commencing with
October 1, 2001) at any time that Obligations or Commitments are outstanding.
Subsidiary Borrower hereby authorizes Agent, from time to time without prior
notice to Subsidiary Borrower, to charge such interest and fees, all Lender
Group Expenses (as and when incurred), the charges, commissions, fees, and costs
provided for in Section 2.12(e) (as and when accrued or incurred), the fees and
costs provided for in Section 2.11 (as and when accrued or incurred), and all
other payments as and when due and payable under any Loan Document to Subsidiary
Borrower's Loan Account, which amounts thereafter constitute Advances hereunder
and shall accrue interest at the rate then applicable to Advances hereunder. Any
interest not paid when due shall be compounded by being charged to Subsidiary
Borrower's Loan Account and shall thereafter constitute Advances hereunder and
shall accrue interest at the rate then applicable to Advances that are Base Rate
Loans hereunder.
(e) Computation. All interest and fees chargeable under the UK
Loan Documents shall be computed on the basis of a 360 day year for the actual
number of days elapsed. In the event the Base Rate is changed from time to time
hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.
(f) Intent to Limit Charges to Maximum Lawful Rate. In no
event shall the interest rate or rates payable under this Agreement, plus any
other amounts paid in connection herewith, exceed the highest rate permissible
under any law that a court of competent jurisdiction shall, in a final
determination, deem applicable. Subsidiary Borrower and the Lender Group, in
executing and delivering this Agreement, intend legally to agree upon the rate
or rates of interest and manner of payment stated within it; provided, however,
that, anything contained herein to the contrary notwithstanding, if said rate or
rates of interest or manner of payment exceeds the maximum allowable under
applicable law, then, ipso facto, as of the date of this Agreement, Subsidiary
Borrower is and shall be liable only for the payment of such maximum as allowed
by law, and payment received from Subsidiary Borrower in excess of such legal
maximum, whenever received, shall be applied to reduce the principal balance of
the Obligations to the extent of such excess.
2.7 Cash Management.
(a) Within 60 days of the date of this Agreement, Subsidiary
Borrower shall (i) establish and maintain cash management services of a type and
on terms satisfactory to Agent at one or more of the banks set forth on Schedule
2.7(a) (each, a "UK Cash Management Bank"), and shall request in writing and
otherwise take such reasonable steps to ensure that all of its Account Debtors
forward payment of the amounts owed by them directly to such UK Cash Management
Bank, and (ii) deposit or cause to be deposited promptly, and in any event no
later than the first Business Day after the date of receipt thereof, all
Collections (including those sent directly by Account Debtors to a UK Cash
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Management Bank) into a bank account in both Agent's name and Borrower's name (a
"UK Cash Management Account") at one of the UK Cash Management Banks.
(b) Within 60 days of the date of this Agreement, each UK Cash
Management Bank shall establish and maintain UK Cash Management Agreements with
Agent and Subsidiary Borrower, in form and substance acceptable to Agent. Each
such UK Cash Management Agreement shall provide, among other things, that (i)
all items of payment deposited in such UK Cash Management Account and proceeds
thereof are held by such UK Cash Management Bank as agent or
bailee-in-possession for Agent, (ii) the UK Cash Management Bank has no rights
of setoff or recoupment or any other claim against the applicable UK Cash
Management Account other than for payment of its service fees and other charges
directly related to the administration of such UK Cash Management Account and
for returned cheques or other items of payment, and (iii) from and after the
date that it receives written notification from Agent, it immediately will
forward by daily sweep all amounts in the applicable UK Cash Management Account
to the Agent's Account. Anything contained herein or in the UK Debenture to the
contrary notwithstanding, Agent agrees that it shall not provide the
above-described notice to the UK Cash Management Bank unless and until a
Triggering Event has occurred. Once a Triggering Event has occurred, Agent shall
be free to exercise its right to issue such notice and the subsequent
elimination of the subject Triggering Event shall not eliminate the
effectiveness of such notice.
(c) So long as no Default or Event of Default has occurred and
is continuing, Subsidiary Borrower may amend Schedule 2.7(a) to add or replace a
UK Cash Management Bank or UK Cash Management Account; provided, however, that
(i) such prospective UK Cash Management Bank shall be satisfactory to Agent and
Agent shall have consented in writing in advance to the opening of such UK Cash
Management Account with the prospective UK Cash Management Bank, and (ii) prior
to the time of the opening of such UK Cash Management Account, Subsidiary
Borrower and such prospective UK Cash Management Bank shall have executed and
delivered to Agent a UK Cash Management Agreement. Subsidiary Borrower shall
close any of its UK Cash Management Accounts (and establish replacement cash
management accounts in accordance with the foregoing sentence) promptly and in
any event within 30 days of notice from Agent that the creditworthiness of any
UK Cash Management Bank is no longer acceptable in Agent's reasonable judgment,
or as promptly as practicable and in any event within 60 days of notice from
Agent that the operating performance, funds transfer, or availability procedures
or performance of the UK Cash Management Bank with respect to UK Cash Management
Accounts or Agent's liability under any UK Cash Management Agreement with such
UK Cash Management Bank is no longer acceptable in Agent's reasonable judgment.
(d) The UK Cash Management Accounts shall be cash collateral
accounts, with all cash, cheques and similar items of payment in such accounts
securing payment of the Obligations.
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2.8 Crediting Payments. The receipt of any payment item by Agent (whether
from transfers to Agent by the UK Cash Management Banks pursuant to the UK Cash
Management Agreements or otherwise) shall not be considered a payment on account
unless such payment item is a wire transfer of immediately available federal
funds made to the Agent's Account or unless and until such payment item is
honored when presented for payment. Should any payment item not be honored when
presented for payment, then Subsidiary Borrower shall be deemed not to have made
such payment and interest shall be calculated accordingly. Anything to the
contrary contained herein notwithstanding, any payment item shall be deemed
received by Agent only if it is received into the Agent's Account on a Business
Day on or before 11:00 a.m. (California time). If any payment item is received
into the Agent's Account on a non-Business Day or after 11:00 a.m. (California
time) on a Business Day, it shall be deemed to have been received by Agent as of
the opening of business on the immediately following Business Day.
2.9 Designated Account. Agent is authorized to make the Advances, and the
Issuing Lender is authorized to issue the Letters of Credit, under this
Agreement based upon telephonic or other instructions received from anyone
purporting to be an Authorized Person, or without instructions if pursuant to
Section 2.6(d). Subsidiary Borrower agrees to establish and maintain the
Designated Account with the Designated Account Bank for the purpose of receiving
the proceeds of the Advances requested by Subsidiary Borrower and made by Agent
or the Lenders hereunder. Unless otherwise agreed by Agent and Subsidiary
Borrower, any Advance, Agent Advance, or Swing Loan requested by Subsidiary
Borrower and made by Agent or the Lenders hereunder shall be made to the
Designated Account.
2.10 Maintenance of Loan Account; Statements of Obligations. Agent shall
maintain an account on its books in the name of Subsidiary Borrower (the "Loan
Account") on which Subsidiary Borrower will be charged with all Advances
(including Agent Advances and Swing Loans) made by Agent, Swing Lender, or the
Lenders to Subsidiary Borrower or for Subsidiary Borrower's account, the Letters
of Credit issued by Issuing Lender for Subsidiary Borrower's account, and with
all other payment Obligations hereunder or under the other UK Loan Documents,
including, accrued interest, fees and expenses, and Lender Group Expenses. In
accordance with Section 2.8, the Loan Account will be credited with all payments
received by Agent from Subsidiary Borrower or for Subsidiary Borrower's account,
including all amounts received in the Agent's Account from any UK Cash
Management Bank. Agent shall render statements regarding the Loan Account to
Subsidiary Borrower, including principal, interest, fees, and including an
itemization of all charges and expenses constituting Lender Group Expenses
owing, and such statements shall be conclusively presumed to be correct and
accurate and constitute an account stated between Subsidiary Borrower and the
Lender Group unless, within 30 days after receipt thereof by Subsidiary
Borrower, Subsidiary Borrower shall deliver to Agent written objection thereto
describing the error or errors contained in any such statements.
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2.11 Fees. Subsidiary Borrower shall pay to Agent the following fees and
charges, which fees and charges shall be non-refundable when paid (irrespective
of whether this Agreement is terminated thereafter) and, in the case of clause
(a) below shall be apportioned ratably amongst the Lenders based upon their
respective Pro Rata Shares, and in the case of clause (b) below shall be
apportioned among the Lenders in accordance with the terms of letter agreements
between Agent and individual Lenders:
(a) Audit, Appraisal, and Valuation Charges. For the separate
account of Agent, audit, appraisal, and valuation fees and charges as follows
(i) a fee of $750 per day, per auditor, plus out-of-pocket expenses for each
financial audit of Subsidiary Borrower performed by personnel employed by Agent;
provided, however, that, so long as no Event of Default shall have occurred and
be continuing, Subsidiary Borrower shall not be obligated to pay such fees and
expenses in respect of more than 4 such audits in any calendar year, (ii) a fee
of $1,500 per day per appraiser, plus out-of-pocket expenses, for each appraisal
of the Collateral performed by personnel employed by Agent, and (iii) the actual
charges paid or incurred by Agent if it elects to employ the services of one or
more third Persons to perform financial audits of Subsidiary Borrower, to
appraise the Collateral, or any portion thereof, or to assess Subsidiary
Borrower's business valuation; provided, however, that, so long as no Event of
Default shall have occurred and be continuing, Subsidiary Borrower shall not be
obligated to pay such fees and expenses in respect of more than 1 such appraisal
or valuation in any calendar year.
2.12 Letters of Credit
(a) Subject to the terms and conditions of this Agreement, the
Issuing Lender agrees to issue letters of credit for the account of Subsidiary
Borrower (each, an "L/C") or to purchase participations or execute indemnities
or reimbursement obligations (each such undertaking, an "L/C Undertaking") with
respect to letters of credit issued by an Underlying Issuer (as of the Closing
Date, the prospective Underlying Issuer is to be ▇▇▇▇▇ Fargo) for the account of
Subsidiary Borrower. To request the issuance of an L/C or an L/C Undertaking (or
the amendment, renewal, or extension of an outstanding L/C or L/C Undertaking),
Subsidiary Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Lender) to the Issuing Lender and Agent (reasonably in advance of the requested
date of issuance, amendment, renewal, or extension) a notice requesting the
issuance of an L/C or L/C Undertaking, or identifying the L/C or L/C Undertaking
to be amended, renewed, or extended, the date of issuance, amendment, renewal,
or extension, the date on which such L/C or L/C Undertaking is to expire, the
amount of such L/C or L/C Undertaking, the name and address of the beneficiary
thereof (or the beneficiary of the Underlying Letter of Credit, as applicable),
and such other information as shall be necessary to prepare, amend, renew, or
extend such L/C or L/C Undertaking. If requested by the Issuing Lender,
Subsidiary Borrower also shall be an applicant under the application with
respect to any Underlying Letter of Credit that is to be the subject of an L/C
Undertaking. The Issuing Lender shall
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have no obligation to issue a Letter of Credit if any of the following would
result after giving effect to the requested Letter of Credit:
(i) the Letter of Credit Usage would exceed the Borrowing Base
less the amount of outstanding Advances, or
(ii) the Letter of Credit Usage under this Agreement, the
Domestic Loan Agreement and the Irish Loan Agreement would exceed
$10,000,000 in the aggregate, or
(iii) the Letter of Credit Usage would exceed the Maximum
Subsidiary Revolver Amount less the then extant amount of
outstanding Advances.
Each Letter of Credit (and corresponding Underlying Letter of
Credit) shall have an expiry date no later than 30 days prior to the Maturity
Date and all such Letters of Credit (and corresponding Underlying Letter of
Credit) shall be in form and substance acceptable to the Issuing Lender (in the
exercise of its Permitted Discretion), including the requirement that the
amounts payable thereunder must be payable in Dollars, Euros or English pounds.
If the amounts payable thereunder are in Euros or English pounds, Agent shall
have the right in its Permitted Discretion to establish Foreign Exchange
Reserves against the Borrowing Base. If Issuing Lender is obligated to advance
funds under a Letter of Credit, Subsidiary Borrower immediately shall reimburse
such L/C Disbursement to Issuing Lender by paying to Agent an amount equal to
such L/C Disbursement not later than 11:00 a.m., California time, on the date
that such L/C Disbursement is made, if Subsidiary Borrower shall have received
written or telephonic notice of such L/C Disbursement prior to 10:00 a.m.,
California time, on such date, or, if such notice has not been received by
Subsidiary Borrower prior to such time on such date, then not later than 11:00
a.m., California time, on the Business Day that Subsidiary Borrower receives
such notice, if such notice is received prior to 10:00 a.m., California time, on
the date of receipt, and, in the absence of such reimbursement, the L/C
Disbursement immediately and automatically shall be deemed to be an Advance
hereunder and, thereafter, shall bear interest at the rate then applicable to
Advances that are Base Rate Loans under Section 2.6. To the extent an L/C
Disbursement is deemed to be an Advance hereunder, Subsidiary Borrower's
obligation to reimburse such L/C Disbursement shall be discharged and replaced
by the resulting Advance. Promptly following receipt by Agent of any payment
from Subsidiary Borrower pursuant to this paragraph, Agent shall distribute such
payment to the Issuing Lender or, to the extent that Lenders have made payments
pursuant to Section 2.12(c) to reimburse the Issuing Lender, then to such
Lenders and the Issuing Lender as their interest may appear.
(b) Promptly following receipt of a notice of L/C Disbursement
pursuant to Section 2.12(a), each Lender with a Revolver Commitment agrees to
fund its Pro Rata Share of any Advance deemed made pursuant to the foregoing
subsection on the same terms and conditions as if Subsidiary Borrower had
requested such Advance and Agent shall
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promptly pay to Issuing Lender the amounts so received by it from the Lenders.
By the issuance of a Letter of Credit (or an amendment to a Letter of Credit
increasing the amount thereof) and without any further action on the part of the
Issuing Lender or the Lenders with Revolver Commitment, the Issuing Lender shall
be deemed to have granted to each Lender with a Revolver Commitment, and each
Lender with a Revolver Commitment shall be deemed to have purchased, a
participation in each Letter of Credit, in an amount equal to its Pro Rata Share
of the Risk Participation Liability of such Letter of Credit, and each such
Lender agrees to pay to Agent, for the account of the Issuing Lender, such
Lender's Pro Rata Share of any payments made by the Issuing Lender under such
Letter of Credit. In consideration and in furtherance of the foregoing, each
Lender with a Revolver Commitment hereby absolutely and unconditionally agrees
to pay to Agent, for the account of the Issuing Lender, such Lender's Pro Rata
Share of each L/C Disbursement made by the Issuing Lender and not reimbursed by
Subsidiary Borrower on the date due as provided in clause (a) of this Section,
or of any reimbursement payment required to be refunded to Subsidiary Borrower
for any reason. Each Lender with a Revolver Commitment acknowledges and agrees
that its obligation to deliver to Agent, for the account of the Issuing Lender,
an amount equal to its respective Pro Rata Share pursuant to this Section
2.12(b) shall be absolute and unconditional and such remittance shall be made
notwithstanding the occurrence or continuation of an Event of Default or Default
or the failure to satisfy any condition set forth in Section 3 hereof. If any
such Lender fails to make available to Agent the amount of such Lender's Pro
Rata Share of any payments made by the Issuing Lender in respect of such Letter
of Credit as provided in this Section, Agent (for the account of the Issuing
Lender) shall be entitled to recover such amount on demand from such Lender
together with interest thereon at the Defaulting Lender Rate until paid in full.
(c) Subsidiary Borrower hereby agrees to indemnify, save,
defend, and hold the Lender Group harmless from any loss, cost, expense, or
liability, and reasonable attorneys fees incurred by the Lender Group arising
out of or in connection with any Letter of Credit; provided, however, that
Subsidiary Borrower shall not be obligated hereunder to indemnify for any loss,
cost, expense, or liability that is caused by the gross negligence or wilful
misconduct of the Issuing Lender or any other member of the Lender Group.
Subsidiary Borrower agrees to be bound by the Underlying Issuer's regulations
and interpretations of any Underlying Letter of Credit or by Issuing Lender's
interpretations of any L/C issued by Issuing Lender to or for Subsidiary
Borrower's account, even though this interpretation may be different from
Subsidiary Borrower's own, and Subsidiary Borrower understands and agrees that
the Lender Group shall not be liable for any error, negligence, or mistake,
whether of omission or commission, in following Subsidiary Borrower's
instructions or those contained in the Letter of Credit or any modifications,
amendments, or supplements thereto. Subsidiary Borrower understands that the L/C
Undertakings may require Issuing Lender to indemnify the Underlying Issuer for
certain costs or liabilities arising out of claims by Subsidiary Borrower
against such Underlying Issuer. Subsidiary Borrower hereby agrees to indemnify,
save, defend, and hold the Lender Group harmless with respect to any loss, cost,
expense (including reasonable attorneys fees), or liability
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incurred by the Lender Group under any L/C Undertaking as a result of the Lender
Group's indemnification of any Underlying Issuer; provided, however, that
Subsidiary Borrower shall not be obligated hereunder to indemnify for any loss,
cost, expense, or liability that is caused by the gross negligence or wilful
misconduct of the Issuing Lender or any other member of the Lender Group.
(d) Subsidiary Borrower hereby authorizes and directs any
Underlying Issuer to deliver to the Issuing Lender all instruments, documents,
and other writings and property received by such Underlying Issuer pursuant to
such Underlying Letter of Credit and to accept and rely upon the Issuing
Lender's instructions with respect to all matters arising in connection with
such Underlying Letter of Credit and the related application.
(e) Any and all charges, commissions, fees, and costs incurred
by the Issuing Lender relating to Underlying Letters of Credit shall be Lender
Group Expenses for purposes of this Agreement and immediately shall be
reimbursable by Subsidiary Borrower to Agent for the account of the Issuing
Lender; it being acknowledged and agreed by Subsidiary Borrower that, as of the
date of this Agreement, the issuance charge imposed by the prospective
Underlying Issuer is .825% per annum times the face amount of each Underlying
Letter of Credit, that such issuance charge may be changed from time to time,
and that the Underlying Issuer also imposes a schedule of charges for
amendments, extensions, drawings, and renewals.
(f) If by reason of (i) any change in any applicable law,
treaty, rule, or regulation or any change in the interpretation or application
thereof by any Governmental Authority, or (ii) compliance by the Underlying
Issuer or the Lender Group with any direction, request, or requirement
(irrespective of whether having the force of law) of any Governmental Authority
or monetary authority including, Regulation D of the Federal Reserve Board as
from time to time in effect (and any successor thereto):
(i) any reserve, deposit, or similar requirement is or shall
be imposed or modified in respect of any Letter of Credit issued
hereunder, or
(ii) there shall be imposed on the Underlying Issuer or the
Lender Group any other condition regarding any Underlying Letter of
Credit or any Letter of Credit issued pursuant hereto,
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Subsidiary Borrower, and Subsidiary Borrower shall pay on demand such
amounts as Agent may specify to be necessary to compensate the Lender Group for
such additional cost or reduced receipt, together with interest on such amount
from
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the date of such demand until payment in full thereof at the rate then
applicable to Base Rate Loans hereunder. The determination by Agent of any
amount due pursuant to this Section, as set forth in a certificate setting forth
the calculation thereof in reasonable detail, shall, in the absence of manifest
or demonstrable error, be final and conclusive and binding on all of the parties
hereto.
2.13 LIBOR Option.
(a) Interest and Interest Payment Dates. In lieu of having
interest charged at the rate based upon the Base Rate, Subsidiary Borrower shall
have the option (the "LIBOR Option") to have interest on all or a portion of the
Advances be charged at a rate of interest based upon the LIBOR Rate. Interest on
LIBOR Rate Loans shall be payable on the earliest of (i) the last day of the
Interest Period applicable thereto, (ii) the occurrence of an Event of Default
in consequence of which the Required Lenders or Agent on behalf thereof elect to
accelerate the maturity of the Obligations, (iii) termination of this Agreement
pursuant to the terms hereof, or (iv) the first day of each month that such
LIBOR Rate Loan is outstanding. On the last day of each applicable Interest
Period, unless Subsidiary Borrower properly has exercised the LIBOR Option with
respect thereto, the interest rate applicable to such LIBOR Rate Loan
automatically shall convert to the rate of interest then applicable to Base Rate
Loans of the same type hereunder. At any time that an Event of Default has
occurred and is continuing, Subsidiary Borrower no longer shall have the option
to request that Advances bear interest at the LIBOR Rate and Agent shall have
the right to convert the interest rate on all outstanding LIBOR Rate Loans to
the rate then applicable to Base Rate Loans hereunder.
(b) LIBOR Election.
(i) Subsidiary Borrower may, at any time and from time to
time, so long as no Event of Default has occurred and is continuing,
elect to exercise the LIBOR Option by notifying Agent prior to 11:00
a.m. (California time) on the date that is at least 3 Business Days
prior to the commencement of the proposed Interest Period (the
"LIBOR Deadline"). Notice of Subsidiary Borrower's election of the
LIBOR Option for a permitted portion of the Advances and an Interest
Period pursuant to this Section shall be made by delivery to Agent
of a LIBOR Notice received by Agent before the LIBOR Deadline, or by
telephonic notice received by Agent before the LIBOR Deadline (to be
confirmed by delivery to Agent of a LIBOR Notice received by Agent
prior to 5:00 p.m. (California time) on the same day. Promptly upon
its receipt of each such LIBOR Notice, Agent shall provide a copy
thereof to each of the Lenders having a Commitment.
(ii) Each LIBOR Notice shall be irrevocable and binding on
Subsidiary Borrower. In connection with each LIBOR Rate Loan,
Subsidiary Borrower shall indemnify, defend, and hold Agent and the
Lenders harmless
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against any loss, cost, or expense incurred by Agent or any Lender
as a result of (a) the payment of any principal of any LIBOR Rate
Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (b) the
conversion of any LIBOR Rate Loan other than on the last day of the
Interest Period applicable thereto, or (c) the failure to borrow,
convert, continue or prepay any LIBOR Rate Loan on the date
specified in any LIBOR Notice delivered pursuant hereto (such
losses, costs, and expenses, collectively, "Funding Losses").
Funding Losses shall, with respect to Agent or any Lender, be deemed
to equal the amount determined by Agent or such Lender to be the
excess, if any, of (i) the amount of interest that would have
accrued on the principal amount of such LIBOR Rate Loan had such
event not occurred, at the LIBOR Rate that would have been
applicable thereto, for the period from the date of such event to
the last day of the then current Interest Period therefor (or, in
the case of a failure to borrow, convert, or continue, for the
period that would have been the Interest Period therefor), minus
(ii) the amount of interest that would accrue on such principal
amount for such period at the interest rate which Agent or such
Lender would be offered were it to be offered, at the commencement
of such period, Dollar deposits of a comparable amount and period in
the London interbank market. A certificate of Agent or a Lender
delivered to Subsidiary Borrower setting forth any amount or amounts
that Agent or such Lender is entitled to receive pursuant to this
Section shall be conclusive absent manifest error.
(iii) Subsidiary Borrower shall have not more than 5 LIBOR
Rate Loans in effect at any given time. Subsidiary Borrower only may
exercise the LIBOR Option for LIBOR Rate Loans of at least
$1,000,000 and integral multiples of $500,000 in excess thereof.
(c) Prepayments. Subsidiary Borrower may prepay LIBOR Rate
Loans at any time; provided, however, that in the event that LIBOR Rate Loans
are prepaid on any date that is not the last day of the Interest Period
applicable thereto, including as a result of any automatic prepayment through
the required application by Agent of proceeds of Collections in accordance with
Section 2.4(b) or for any other reason, including early termination of the term
of this Agreement or acceleration of the Obligations pursuant to the terms
hereof, Subsidiary Borrower shall indemnify, defend, and hold Agent and the
Lenders and their Participants harmless against any and all Funding Losses in
accordance with clause (b)(ii) above.
(d) Special Provisions Applicable to LIBOR Rate.
(i) The LIBOR Rate may be adjusted by Agent with respect to
any Lender on a prospective basis to take into account any
additional or increased costs to such Lender of maintaining or
obtaining any eurodollar deposits or increased costs due to changes
in applicable law occurring subsequent to the
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commencement of the then applicable Interest Period, including
changes in tax laws (except changes of general applicability in
corporate income tax laws) and changes in the reserve requirements
imposed by the Board of Governors of the Federal Reserve System (or
any successor), excluding the Reserve Percentage, which additional
or increased costs would increase the cost of funding loans bearing
interest at the LIBOR Rate. In any such event, the affected Lender
shall give Subsidiary Borrower and Agent notice of such a
determination and adjustment and Agent promptly shall transmit the
notice to each other Lender and, upon its receipt of the notice from
the affected Lender, Subsidiary Borrower may, by notice to such
affected Lender (y) require such Lender to furnish to Subsidiary
Borrower a statement setting forth the basis for adjusting such
LIBOR Rate and the method for determining the amount of such
adjustment, or (z) repay the LIBOR Rate Loans with respect to which
such adjustment is made (together with any amounts due under clause
(b)(ii) above).
(ii) In the event that any change in market conditions or any
law, regulation, treaty, or directive, or any change therein or in
the interpretation of application thereof, shall at any time after
the date hereof, in the reasonable opinion of any Lender, make it
unlawful or impractical for such Lender to fund or maintain LIBOR
Advances or to continue such funding or maintaining, or to determine
or charge interest rates at the LIBOR Rate, such Lender shall give
notice of such changed circumstances to Agent and Subsidiary
Borrower and Agent promptly shall transmit the notice to each other
Lender and (y) in the case of any LIBOR Rate Loans of such Lender
that are outstanding, the date specified in such Lender's notice
shall be deemed to be the last day of the Interest Period of such
LIBOR Rate Loans, and interest upon the LIBOR Rate Loans of such
Lender thereafter shall accrue interest at the rate then applicable
to Base Rate Loans, and (z) Subsidiary Borrower shall not be
entitled to elect the LIBOR Option until such Lender determines that
it would no longer be unlawful or impractical to do so.
(e) No Requirement of Matched Funding. Anything to the
contrary contained herein notwithstanding, neither Agent, nor any Lender, nor
any of their Participants, is required actually to acquire eurodollar deposits
to fund or otherwise match fund any Obligation as to which interest accrues at
the LIBOR Rate. The provisions of this Section shall apply as if each Lender or
its Participants had match funded any Obligation as to which interest is
accruing at the LIBOR Rate by acquiring eurodollar deposits for each Interest
Period in the amount of the LIBOR Rate Loans.
2.14 Capital Requirements. If, after the date hereof, any Lender
determines that (i) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies, or
any change in the interpretation or
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application thereof by any Governmental Authority charged with the
administration thereof, or (ii) compliance by such Lender or its parent bank
holding company with any guideline, request, or directive of any such entity
regarding capital adequacy (whether or not having the force of law), the effect
of reducing the return on such Lender's or such holding company's capital as a
consequence of such Lender's Commitments hereunder to a level below that which
such Lender or such holding company could have achieved but for such adoption,
change, or compliance (taking into consideration such Lender's or such holding
company's then existing policies with respect to capital adequacy and assuming
the full utilization of such entity's capital) by any amount deemed by such
Lender to be material, then such Lender may notify Subsidiary Borrower and Agent
thereof. Following receipt of such notice, Subsidiary Borrower agrees to pay
such Lender on demand the amount of such reduction of return of capital as and
when such reduction is determined, payable within 90 days after presentation by
such Lender of a statement in the amount and setting forth in reasonable detail
such Lender's calculation thereof and the assumptions upon which such
calculation was based (which statement shall be deemed true and correct absent
manifest error). In determining such amount, such Lender may use any reasonable
averaging and attribution methods.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 Conditions Precedent to the Initial Extension of Credit. The
obligation of the Lender Group (or any member thereof) to make the initial
Advance (or otherwise to extend any credit provided for hereunder), is subject
to the fulfilment, to the satisfaction of Agent or Agents, as applicable below,
of each of the conditions precedent set forth below:
(a) each of the conditions precedent set forth in this Section
3.1 shall have been satisfied on or before the date that is 150 days after the
date of the execution and delivery of the Domestic Loan Agreement by each of the
original signatories hereto (the "Conditions Precedent Deadline");
(b) Agent shall have received search results from the
registrar of Companies House in the United Kingdom indicating that no charges
have been registered against Subsidiary Borrower;
(c) Agent shall have received each of the following documents,
in form and substance satisfactory to Agent (which, in the case of items (i),
(ii), (iii), and (iv), shall have obtained the approval of the other Agents),
duly executed, and each such document shall be in full force and effect:
(i) UK Debenture together with other deeds and documents of
title required to be deposited thereunder,
(ii) UK Guaranty,
(iii) UK Stock Pledge Agreement, together with all
certificates representing the shares of Subsidiary Borrower pledged
thereunder, as well as stock powers with respect thereto endorsed in
blank, and
(iv) UK Cash Management Agreement;
(d) Agent shall have received a certificate from the
Secretary of Subsidiary Borrower attesting to the resolutions of Subsidiary
Borrower's Board of Directors
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authorizing its execution, delivery, and performance of this Agreement and the
other UK Loan Documents to which Subsidiary Borrower is a party and authorizing
specific officers of Subsidiary Borrower to execute the same;
(e) Agent shall have received copies of Subsidiary Borrower's
Governing Documents, as amended, modified, or supplemented to the Closing Date,
certified by the Secretary of Subsidiary Borrower;
(f) Agent shall have received a certificate of status with
respect to Subsidiary Borrower, dated within 10 days of the Closing Date, such
certificate to be issued by the appropriate officer of the jurisdiction of
organization of Subsidiary Borrower, which certificate shall indicate that
Subsidiary Borrower is in good standing in such jurisdiction;
(g) Agent shall have received a certificate from the Secretary
of each Guarantor attesting to the resolutions of such Guarantor's Board of
Directors authorizing its execution, delivery, and performance of the UK Loan
Documents to which it is a party and authorizing specific officers of such
Guarantor to execute the same;
(h) Agent shall have received a certificate from the Secretary
of Domestic Parent certifying that there have been no amendments, restatements,
supplements, or modifications to the Governing Documents of Domestic Parent or
Subsidiary Borrower since the "Closing Date" (as defined in the Domestic Loan
Agreement);
(i) Agent shall have received a certificate from the Secretary
of Irish Parent attesting to the resolutions of Subsidiary Borrower's Board of
Directors authorizing its execution, delivery, and performance of the UK Loan
Documents to which Irish Parent is a party and authorizing specific officers of
Irish Parent to execute the same;
(j) Agent shall have received copies of Irish Parent's
Governing Documents, as amended, modified, or supplemented to the Closing Date,
certified by the Secretary of Irish Parent;
(k) Agent shall have received a certificate of insurance,
together with the endorsements thereto, as are required by Section 6.8, the form
and substance of
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which shall be satisfactory to Agent which shall have consulted with the other
Agents prior to making such determination;
(l) Agent shall have received an opinion of Subsidiary
Borrower's counsel, and, in Agent's sole discretion, Agent's foreign counsel, in
form and substance satisfactory to Agent which shall have consulted with the
other Agents prior to making such determination;
(m) Agent shall have received evidence in form and substance
satisfactory to Agents (including a certificate of the chief financial officer
of Subsidiary Borrower) that all tax returns required to be filed by Subsidiary
Borrower have been timely filed and all taxes upon Subsidiary Borrower or its
properties, assets, income, and franchises (including Real Property taxes and
payroll taxes) have been paid prior to delinquency, except such taxes that are
the subject of a Permitted Protest or are set forth on Schedule 6.7;
(n) Domestic Parent, Subsidiary Borrower and Irish Borrower
shall, in the aggregate, have Excess Availability and Qualified Cash in an
amount of not less than $100,000,000 after giving effect to the initial
extensions of credit under the Domestic Loan Agreement, this Agreement and the
Irish Loan Agreement;
(o) Agents shall have completed their collateral due
diligence, including a collateral audit and review of Subsidiary Borrower's
books and records and verification of Subsidiary Borrower's representations and
warranties concerning Collateral to the Lender Group, the results of which shall
be satisfactory to the Agents;
(p) Agent shall have completed its business and legal due
diligence, the results of which shall be satisfactory to Agent;
(q) Agent shall have received completed reference checks with
respect to Subsidiary Borrower's senior management, the results of which are
satisfactory to Agent in its sole discretion;
(r) Subsidiary Borrower shall pay all Lender Group Expenses
incurred in connection with the transactions evidenced by this Agreement;
(s) Agent shall have received copies of each of Subsidiary
Borrower's material leases, financing agreements, supplier agreements,
transition services agreements, and Intellectual Property licenses, together
with a certificate of the Secretary of Subsidiary Borrower certifying each such
document as being a true, correct, and complete copy thereof;
(t) Subsidiary Borrower shall have received all licenses,
approvals or evidence of other actions required by any Governmental Authority in
connection with the execution and delivery by Subsidiary Borrower of this
Agreement or any other UK Loan
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Document or with the consummation of the transactions contemplated hereby and
thereby; and
(u) all other documents and legal matters in connection with
the transactions contemplated by this Agreement shall have been delivered,
executed, or recorded and shall be in form and substance satisfactory to Agent.
3.2 [Intentionally omitted].
3.3 Conditions Precedent to all Extensions of Credit. The obligation of
the Lender Group (or any member thereof) to make all Advances (or to extend any
other credit hereunder) shall be subject to the following conditions precedent:
(a) the representations and warranties contained in this
Agreement and the other UK Loan Documents shall be true and correct in all
material respects on and as of the date of such extension of credit, as though
made on and as of such date (except to the extent that such representations and
warranties relate solely to an earlier date),
(b) no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result from
the making thereof,
(c) no injunction, writ, restraining order, or other order of
any nature prohibiting, directly or indirectly, the extending of such credit
shall have been issued and remain in force by any Governmental Authority against
Subsidiary Borrower, Agent, any Lender, or any of their Affiliates, and
(d) no Material Adverse Change shall have occurred.
3.4 Term. This Agreement shall become effective upon the execution and
delivery hereof by Subsidiary Borrower, Agent, and the Lenders and shall
continue in full force and effect for a term ending on the earlier of (the
"Maturity Date") (a) June 25, 2003, (b) the Conditions Precedent Deadline (as
defined in Section 3.1(a)) if Subsidiary Borrower has failed to satisfy each of
the conditions precedent in Section 3.1 on or before the Conditions Precedent
Deadline, or (c) the date of termination of the Domestic Loan Agreement
(including termination by Domestic Parent pursuant to Section 3.6 of the
Domestic Loan Agreement). The foregoing notwithstanding, the Lender Group, upon
the election of the Required Lenders, shall have the right to terminate its
obligations under this Agreement immediately and without notice upon the
occurrence and during the continuation of an Event of Default.
3.5 Effect of Termination. On the date of termination of this Agreement,
all Obligations (including contingent reimbursement obligations of Subsidiary
Borrower with respect to outstanding Letters of Credit) immediately shall become
due and payable without
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notice or demand. No termination of this Agreement, however, shall relieve or
discharge Subsidiary Borrower of its duties, Obligations, or covenants hereunder
and the Agent's Liens in the Collateral shall remain in effect until all
Obligations have been fully and finally discharged and the Lender Group's
obligations to provide additional credit hereunder have been terminated. When
this Agreement has been terminated and all of the Obligations (other than
contingent indemnification obligations) have been fully and finally discharged
and the Lender Group's obligations to provide additional credit under the UK
Loan Documents have been terminated irrevocably, Agent will, at Subsidiary
Borrower's sole expense, execute and deliver any UCC termination statements,
lien releases, mortgage releases, re-assignments of trademarks, discharges of
security interests, and other similar discharge or release documents (and, if
applicable, in recordable form) as are reasonably necessary to release, as of
record, the Agent's Liens and all notices of security interests and liens
previously filed by Agent with respect to the Obligations.
3.6 Early Termination by Subsidiary Borrower. Subsidiary Borrower has the
option, at any time upon 90 days prior written notice to Agent, to terminate
this Agreement by paying to Agent, for the benefit of the Lender Group, in cash,
the Obligations (including either (i) providing cash collateral to be held by
Agent for the benefit of those Lenders with a Revolver Commitment in an amount
equal to 105% of the then extant Letter of Credit Usage, or (ii) causing the
original Letters of Credit to be returned to the Issuing Lender) in full (to be
allocated based upon letter agreements between Agent and individual Lenders). If
Subsidiary Borrower has sent a notice of termination pursuant to the provisions
of this Section, then the Commitments shall terminate and Subsidiary Borrower
shall be obligated to repay the Obligations (including either (i) providing cash
collateral to be held by Agent for the benefit of those Lenders with a Revolver
Commitment in an amount equal to 105% of the then extant Letter of Credit Usage,
or (ii) causing the original Letters of Credit to be returned to the Issuing
Lender) in full on the date set forth as the date of termination of this
Agreement in such notice. The foregoing to the contrary notwithstanding,
Subsidiary Borrower shall not have the right to terminate this Agreement unless
the Irish Loan Agreement concurrently is terminated and all of the Indebtedness
thereunder repaid in full.
4. PERFECTION OF SECURITY INTEREST; INSPECTION RIGHTS.
4.1 [Intentionally omitted].
4.2 [Intentionally omitted].
4.3 [Intentionally omitted].
4.4 Delivery of Additional Documentation Required. At any time upon the
request of Agent, Subsidiary Borrower shall execute and deliver to Agent, any
and all financing statements, original financing statements in lieu of
continuation statements, fixture filings, security agreements, pledges,
assignments, endorsements of certificates of title, and all other documents (the
"Additional Documents") that Agent may request in its Permitted
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Discretion, in form and substance satisfactory to Agent, to perfect and continue
perfected or better perfect the Agent's Liens in the Collateral (whether now
owned or hereafter arising or acquired), to create and perfect Liens in favor of
Agent in any Real Property acquired after the date of this Agreement, and in
order to fully consummate all of the transactions contemplated hereby and under
the other UK Loan Documents. To the maximum extent permitted by applicable law,
Subsidiary Borrower authorizes Agent to execute any such Additional Documents in
Subsidiary Borrower's name and authorizes Agent to file such executed Additional
Documents in any appropriate filing office.
4.5 Power of Attorney. Subsidiary Borrower hereby irrevocably makes,
constitutes, and appoints Agent (and any of Agent's officers, employees, or
agents designated by Agent) as Subsidiary Borrower's true and lawful attorney,
with power to (a) if Subsidiary Borrower refuses to, or fails timely to execute
and deliver any of the documents described in Section 4.4, sign the name of
Subsidiary Borrower on any of the documents described in Section 4.4, (b) at any
time that an Event of Default has occurred and is continuing, sign Subsidiary
Borrower's name on any invoice or ▇▇▇▇ of lading relating to the Collateral,
drafts against Account Debtors, or notices to Account Debtors, (c) send requests
for verification of Accounts; provided, however, that, so long as no Event of
Default has occurred and is continuing, Agent agrees to coordinate such
verification activities with Subsidiary Borrower, (d) endorse Subsidiary
Borrower's name on any Collection item that may come into the Lender Group's
possession, (e) at any time that an Event of Default has occurred and is
continuing, make, settle, and adjust all claims under Subsidiary Borrower's
policies of insurance and make all determinations and decisions with respect to
such policies of insurance, and (f) at any time that an Event of Default has
occurred and is continuing, settle and adjust disputes and claims respecting
Subsidiary Borrower's Accounts directly with Account Debtors, for amounts and
upon terms that Agent determines to be reasonable, and Agent may cause to be
executed and delivered any documents and releases that Agent determines to be
necessary. The appointment of Agent as Subsidiary Borrower's attorney, and each
and every one of its rights and powers, being coupled with an interest, is
irrevocable until all of the Obligations have been fully and finally repaid and
performed and the Lender Group's obligations to extend credit hereunder are
terminated.
4.6 Right to Inspect. Agents (through any of their respective officers,
employees, or agents) shall have the right, from time to time hereafter to
inspect the Books and to check, test, and appraise the Collateral in order to
verify Subsidiary Borrower's financial condition or the amount, quality, value,
condition of, or any other matter relating to, the Collateral; provided however,
that so long as no Event of Default has occurred which is continuing, any such
inspection, check, test or appraisal shall be conducted during normal business
hours in a manner so as not to interfere unreasonably with Subsidiary Borrower's
business operations.
4.7 [Intentionally omitted].
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5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this Agreement,
Subsidiary Borrower makes the following representations and warranties to the
Lender Group which shall be true, correct, and complete, in all material
respects, as of the date hereof, and shall be true, correct, and complete, in
all material respects, as of the Closing Date, and at and as of the date of the
making of each Advance (or other extension of credit) made thereafter, as though
made on and as of the date of such Advance (or other extension of credit)
(except to the extent that such representations and warranties relate solely to
an earlier date) and such representations and warranties shall survive the
execution and delivery of this Agreement:
5.1 No Encumbrances. Subsidiary Borrower has title to the Subsidiary
Borrower Collateral and the Real Property, free and clear of Liens except for
Permitted Liens.
5.2 Eligible Accounts. The Eligible Accounts are bona fide existing
payment obligations of Account Debtors created by the sale and delivery of
Inventory or the rendition of services to such Account Debtors in the ordinary
course of Subsidiary Borrower's business, owed to Subsidiary Borrower without
defenses, disputes, offsets, counterclaims, or rights of return or cancellation.
As to each Eligible Account, such Account is not excluded as ineligible by
virtue of one or more of the excluding criteria set forth in the definition of
Eligible Accounts.
5.3 [Intentionally omitted].
5.4 Equipment; Inventory. All of the Equipment of Subsidiary Borrower is
used or held for use in its business and is fit for such purposes. Subsidiary
Borrower's Equipment is not stored with a bailee, warehouseman, or similar party
and is located only at the locations identified on Schedule 5.4. Subsidiary
Borrower does not have any Inventory.
5.5 [Intentionally omitted].
5.6 [Intentionally omitted].
5.7 Location of Head Office. The principal place of business and
registered office of Subsidiary Borrower is located at the address indicated in
Schedule 5.7.
5.8 Due Organization and Qualification; Subsidiaries.
(a) Subsidiary Borrower is validly incorporated and existing
and in good standing under the laws of England and Wales and qualified to do
business in any state where the failure to be so qualified reasonably could be
expected to have a Material Adverse Change.
(b) Set forth on Schedule 5.8(b), is a complete and accurate
description of the authorized share capital of Subsidiary Borrower, by class,
and, as of the
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Closing Date, a description of the number of shares of each such class that are
issued and outstanding. Other than as described on Schedule 5.8(b), there are no
subscriptions, options, warrants, or calls relating to any shares of Subsidiary
Borrower and such shares are fully paid up, including any right of conversion or
exchange under any outstanding security or other instrument. Subsidiary Borrower
is not subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any of its shares or any security convertible into
or exchangeable for any of its shares.
(c) Set forth on Schedule 5.8(c), is a complete and accurate
list of Subsidiary Borrower's direct and indirect Subsidiaries, showing: (i) the
jurisdiction of their organization, (ii) the number of shares of each class of
common and preferred Stock authorized for each of such Subsidiaries, and (iii)
the number and the percentage of the outstanding shares of each such class owned
directly or indirectly by Subsidiary Borrower. All of the outstanding capital
Stock of each such Subsidiary has been validly issued and is fully paid and
non-assessable.
(d) Except as set forth on Schedule 5.8(c), there are no
subscriptions, options, warrants, or calls relating to any shares of Subsidiary
Borrower's Subsidiaries' capital Stock, including any right of conversion or
exchange under any outstanding security or other instrument. Neither Subsidiary
Borrower nor any of its Subsidiaries is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of Subsidiary
Borrower's Subsidiaries' capital Stock or any security convertible into or
exchangeable for any such capital Stock.
5.9 Due Authorization; No Conflict.
(a) The execution, delivery, and performance by Subsidiary
Borrower of this Agreement and the UK Loan Documents to which it is a party have
been duly authorized by all necessary action on the part of Subsidiary Borrower.
(b) The execution, delivery, and performance by Subsidiary
Borrower of this Agreement and the UK Loan Documents to which it is a party do
not and will not (i) violate any provision of any law including federal, state,
or local law or regulation applicable to Subsidiary Borrower, the Governing
Documents of Subsidiary Borrower, or any order, judgment, or decree of any court
or other Governmental Authority binding on Subsidiary Borrower, (ii) conflict
with, result in a breach of, or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation of Subsidiary
Borrower, (iii) result in or require the creation or imposition of any Lien of
any nature whatsoever upon any properties or assets of Subsidiary Borrower,
other than Permitted Liens, or (iv) require any approval of Subsidiary
Borrower's interest holders or any approval or consent of any Person under any
material contractual obligation of Subsidiary Borrower.
(c) Other than the filing of financing statements, fixture
filings and certain of the UK Loan Documents with the SEC and filings with the
registrar of Companies
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House in the United Kingdom, the execution, delivery, and performance by
Subsidiary Borrower of this Agreement and the UK Loan Documents to which
Subsidiary Borrower is a party do not and will not require any registration
with, consent, or approval of, or notice to, or other action with or by, any
Governmental Authority or other Person.
(d) This Agreement and the other UK Loan Documents to which
Subsidiary Borrower is a party, and all other documents contemplated hereby and
thereby, when executed and delivered by Subsidiary Borrower will be the legally
valid and binding obligations of Subsidiary Borrower, enforceable against
Subsidiary Borrower in accordance with their respective terms, except as
enforcement may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting creditors'
rights generally.
(e) The Agent's Liens are validly created and no action is
required to perfect the security except, where appropriate, for registration and
notice and the security will be a first charge ranking ahead of any other Lien.
(f) As to each Guarantor, the execution, delivery, and
performance by such Guarantor of the UK Loan Documents to which it is a party
have been duly authorized by all necessary action on the part of such Guarantor.
(g) As to each Guarantor, the execution, delivery, and
performance by such Guarantor of the UK Loan Documents to which it is a party do
not and will not (i) violate any provision of law or regulation applicable to
such Guarantor, the Governing Documents of such Guarantor, or any order
judgment, or decree of any court or other Governmental Authority binding on such
Guarantor, (ii) conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under any material contractual
obligation of such Guarantor, (iii) result in or require the creation or
imposition of any Lien of any nature whatsoever upon any properties or assets of
such Guarantor, other than Permitted Liens, or (iv) require any approval of such
Guarantor's interestholders or any approval or consent of any Person under any
material contractual obligation of such Guarantor.
(h) As to each Guarantor, the execution, delivery, and
performance by such Guarantor of the UK Loan Documents to which such Guarantor
is a party do not and will not require any registration with, consent, or
approval of, or notice to, or other action with or by, any Governmental Agency
or other Person.
(i) As to each Guarantor, the UK Loan Documents to which such
Guarantor is a party, and all other documents contemplated hereby and thereby,
when executed and delivered by such Guarantor will be legally valid and binding
obligations of such Guarantor enforceable against such guarantor in accordance
with their respective terms, except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or similar
laws relating to or omitting creditors' rights generally.
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5.10 Litigation. Other than those matters disclosed on Schedule 5.10,
there are no actions, suits, or proceedings pending or, to the knowledge of
senior officers of Subsidiary Borrower, threatened in writing against Subsidiary
Borrower, except for (a) matters that are fully covered by insurance (subject to
customary deductibles), and (b) matters arising after the Closing Date that, if
decided adversely to Subsidiary Borrower, reasonably could not be expected to
result in a Material Adverse Change.
5.11 No Material Adverse Change. All financial statements relating to
Subsidiary Borrower and its Subsidiaries that have been delivered by Subsidiary
Borrower to the Lender Group have been prepared in accordance with GAAP (except,
in the case of unaudited financial statements, for the lack of footnotes and
being subject to year-end audit adjustments) and present fairly in all material
respects, Subsidiary Borrower's financial condition as of the date thereof and
results of operations for the period then ended. There has not been a Material
Adverse Change with respect to Subsidiary Borrower and its Subsidiaries since
the date of the latest financial statements submitted to the Lender Group on or
before the Closing Date.
5.12 Fraudulent Transfer.
(a) Subsidiary Borrower is Solvent.
(b) No transfer of property is being made by Subsidiary
Borrower and no obligation is being incurred by Subsidiary Borrower in
connection with the transactions contemplated by this Agreement or the other UK
Loan Documents with the intent to hinder, delay, or defraud either present or
future creditors of Subsidiary Borrower .
5.13 [Intentionally omitted].
5.14 [Intentionally omitted].
5.15 Brokerage Fees. Subsidiary Borrower has not utilized the services of
any broker or finder in connection with Subsidiary Borrower's obtaining
financing from the Lender Group under this Agreement and no brokerage commission
or finders fee is payable by Subsidiary Borrower in connection herewith.
5.16 Intellectual Property. Subsidiary Borrower does not own, or hold
licenses in any licenses, trademarks, trade names, copyrights, patents, patent
rights, or licenses and no trademarks, trade names, copyrights, patents, patent
rights, or licenses are necessary to the conduct of Subsidiary Borrower's
business as currently conducted.
5.17 Leases. Subsidiary Borrower has possession under all leases material
to the business of Subsidiary Borrower and to which it is a party or under which
it is operating. All of such leases are valid and subsisting and no material
default by Subsidiary Borrower exists under any of them.
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5.18 DDAs. Set forth on Schedule 5.18 are all of Subsidiary Borrower's
DDAs, including, with respect to each depository (i) the name and address of
such depository, and (ii) the account numbers of the accounts maintained with
such depository.
5.19 Complete Disclosure. All factual information (taken as a whole)
furnished by or on behalf of Subsidiary Borrower in writing to Agent or any
Lender (including all information contained in the Schedules hereto or in the
other UK Loan Documents) for purposes of or in connection with this Agreement,
the other UK Loan Documents, or any transaction contemplated herein or therein
is, and all other such factual information (taken as a whole) hereafter
furnished by or on behalf of Subsidiary Borrower in writing to Agent or any
Lender will be, true and accurate, in all material respects, on the date as of
which such information is dated or certified and not incomplete by omitting to
state any fact necessary to make such information (taken as a whole) not
misleading in any material respect at such time in light of the circumstances
under which such information was provided. On the Closing Date, the Closing Date
Projections represent, and as of the date on which any other Projections are
delivered to Agent, such additional Projections represent Subsidiary Borrower's
good faith best estimate of its future performance for the periods covered
thereby. Anything in any Loan Document to the contrary notwithstanding,
Subsidiary Borrower makes no representation or warranty as to any projection or
forecast of results or other forward looking statement set forth in any document
or statement delivered to made to Agent or the Lenders other than, in the case
of any such projection, forecast or forward looking statement, that Subsidiary
Borrower had a good faith belief at the time of such delivery that such
projection, forecast or forward looking statement was reasonably supported based
on the assumptions described in connection therewith at the time of such
delivery.
5.20 Indebtedness. Set forth on Schedule 5.20 is a true and complete list
of all Indebtedness of Subsidiary Borrower outstanding immediately prior to the
Closing Date that is to remain outstanding after the Closing Date and such
Schedule accurately reflects the aggregate principal amount of such Indebtedness
and the principal terms thereof.
5.21 [Intentionally omitted].
5.22 Review and Approval of Domestic Loan Agreement. Subsidiary Borrower
has reviewed the Domestic Loan Agreement and all Exhibits and Schedules referred
to therein and has approved all terms and conditions relating to or affecting
Subsidiary Borrower contained therein. Subsidiary Borrower acknowledges and
agrees that the credit facility evidenced hereby shall terminate automatically
and be of no further force and effect in the event that the Domestic Loan
Agreement shall terminate for any reason.
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6. AFFIRMATIVE COVENANTS.
Subsidiary Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of the
Obligations, Subsidiary Borrower shall do and shall cause each of its
Subsidiaries to do all of the following:
6.1 Accounting System. Maintain a system of accounting that enables
Subsidiary Borrower to produce financial statements in accordance with GAAP and
maintain records pertaining to the Collateral that contain information as from
time to time reasonably may be requested by Agent.
6.2 Collateral Reporting. Provide Agent (and if so requested by Agent,
with copies for each Lender) with the following documents at the following times
in form satisfactory to Agent:
================================================================================
Daily (from and (a) A sales journal, collection journal, and credit
after the occurrence register since the last such schedule and a calculation
of a Triggering of the Borrowing Base as of such date, and
Event) or,
otherwise, monthly (b) notice of all returns, deductions, disputes, or
(not later than the claims including amounts in excess of $100,000.
15th day after the
end of each fiscal
month)
--------------------------------------------------------------------------------
Monthly (not later (c) A detailed calculation of the Subsidiary Borrowing
than the 15th day Base (including detail regarding those Accounts that are
after the end of not Eligible Accounts),
each fiscal month)
(d) a detailed aging, by total, of the Accounts,
together with a reconciliation to the detailed
calculation of the Subsidiary Borrowing Base previously
provided to Agent,
(e) a summary aging, by vendor, of Subsidiary Borrower's
accounts payable and any book overdraft, and
(f) a calculation of Dilution for the prior month.
--------------------------------------------------------------------------------
Quarterly (g) A report regarding Subsidiary Borrower's accrued,
but unpaid, ad valorem taxes.
--------------------------------------------------------------------------------
Upon request by (h) Copies of invoices in connection with the Accounts,
Agent credit memos, remittance advices, deposit slips,
shipping and delivery documents in connection with the
Accounts and, for Equipment acquired by Subsidiary
Borrower, invoices, and
================================================================================
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================================================================================
(i) such other reports as to the Collateral, or the
financial condition of Subsidiary Borrower or its
Subsidiaries, as Agent may request and the Subsidiary
Borrower may lawfully supply.
================================================================================
In addition, Subsidiary Borrower agrees to cooperate fully with
Agent to facilitate and implement a system of electronic collateral reporting in
order to provide electronic reporting of each of the items set forth above.
6.3 Financial Statements, Reports, Certificates.
(a) (i) prior to the occurrence of a Triggering Event, unless
the average of the sum of the Subsidiary Borrower Revolver Usage, Irish Loan
Usage and Domestic Loan Usage (taken as a whole) over the immediately preceding
30 day period does not exceed $75,000,000, as soon as possible, but in any
event, within 45 days after the end of each fiscal quarter, and (ii) if clause
(i) is not applicable, as soon as available, but in any event within 30 days (45
days in the case of a fiscal month that is the end of one of the first 3 fiscal
quarters in a fiscal year) after the end of each fiscal month during each of
Domestic Parent's fiscal years, a company prepared consolidated balance sheet,
income statement, and statement of cash flow covering Domestic Parent's and its
Subsidiaries' operations during such period,
(b) if and when filed by Subsidiary Borrower, copies of
Subsidiary Borrower's income tax returns, and any amendments thereto, filed with
the Inland Revenue Service,
(c) if and when filed by Subsidiary Borrower and as requested
by Agent, satisfactory evidence of payment of applicable excise taxes in each
jurisdictions in which (i) Subsidiary Borrower conducts business or is required
to pay any such excise tax, (ii) where Subsidiary Borrower's failure to pay any
such applicable excise tax would result in a Lien on the properties or assets of
Subsidiary Borrower, or (iii) where Subsidiary Borrower's failure to pay any
such applicable excise tax reasonably could be expected to result in a Material
Adverse Change,
(d) as soon as a senior officer of Subsidiary Borrower has
knowledge of any event or condition that constitutes a Default or an Event of
Default, notice thereof and a statement of the curative action that Subsidiary
Borrower proposes to take with respect thereto, and
(e) upon the request of Agent, any other report reasonably
requested relating to the financial condition of Subsidiary Borrower.
Subsidiary Borrower agrees that its independent certified public
accountants are authorized to communicate with Agent and to release to Agent
whatever financial information concerning Subsidiary Borrower Agent reasonably
may request. Subsidiary
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Borrower waives the right to assert a confidential relationship, if any, it may
have with any accounting firm or service bureau in connection with any
information requested by Agent pursuant to or in accordance with this Agreement,
and agrees that Agent may contact directly any such accounting firm or service
bureau in order to obtain such information.
6.4 [Intentionally omitted].
6.5 Return. Cause returns and allowances, as between Subsidiary and its
Account Debtors, to be on the same basis and in accordance with their usual
customary practices as they exist at the time of the execution and delivery of
this Agreement. If, at a time when an Event of Default has occurred and is
continuing, any Account Debtor returns any Inventory to Subsidiary Borrower,
Subsidiary Borrower promptly shall determine the reason for such return and, if
Agent consents (which consent shall not be unreasonably withheld), issue a
credit memorandum (with a copy to be sent to Agent) in the appropriate amount to
such Account Debtor.
6.6 Maintenance of Properties. Maintain and preserve all of its properties
which are necessary or useful in the proper conduct to its business in good
working order and condition, ordinary wear and tear excepted, and comply at all
times with the provisions of all leases to which it is a party as lessee so as
to prevent any loss or forfeiture thereof or thereunder.
6.7 Taxes. Except as set forth on Schedule 6.7, cause all assessments and
taxes, whether real, personal, or otherwise, due or payable by, or imposed,
levied, or assessed against Subsidiary Borrower or any of its assets to be paid
in full, before delinquency or before the expiration of any extension period,
except to the extent that the validity of such assessment or tax shall be the
subject of a Permitted Protest. Subsidiary Borrower will make timely payment or
deposit of all tax payments and withholding taxes required of it or them by
applicable laws, including those laws concerning PAYE, National Insurance and
other social security payments, VAT, and United Kingdom and foreign income and
corporation taxes, and will, upon request, furnish Agent with proof satisfactory
to Agent indicating that Subsidiary Borrower has made such payments or deposits.
Upon Agent's request, Subsidiary Borrower shall deliver satisfactory evidence of
payment of applicable excise taxes in each jurisdictions in which Subsidiary
Borrower is required to pay any such excise tax.
6.8 Insurance.
(a) At Domestic Parent's expense, maintain insurance
respecting Subsidiary Borrower's assets wherever located, covering loss or
damage by fire, theft, explosion, and all other hazards and risks as ordinarily
are insured against by other Persons engaged in the same or similar businesses.
Subsidiary Borrower also shall maintain business interruption, public liability,
and product liability insurance, as well as insurance against larceny,
embezzlement, and criminal misappropriation. All such policies of insurance
shall be in amounts maintained by companies of similar standing and shall be
with such insurance
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companies as are satisfactory to Agent in its Permitted Discretion. Subsidiary
Borrower shall deliver copies of all such policies to Agent with a satisfactory
lender's loss payable endorsement naming Agent as sole loss payee or additional
insured, as appropriate. This Section 6.8 shall not require Subsidiary Borrower
to deliver policies of insurance to Agent in addition to those policies of
insurance delivered by Domestic Parent to Agent pursuant to Section 6.8 of the
Domestic Loan Agreement. Notwithstanding the foregoing, if such policies
delivered by Domestic Parent are amended or modified so that they no longer
pertain to Subsidiary Borrower, Subsidiary Borrower must, at its expense,
maintain the insurance described in this Section 6.8(a) and deliver such
policies to Agent with a satisfactory lender's loss payable endorsement naming
Agent as sole loss payee or additional insured, as appropriate.
(b) Subsidiary Borrower shall give Agent prompt notice of any
loss covered by such insurance. Following the Closing Date, Agent shall have the
exclusive right to adjust any losses payable under any such insurance policies
in excess of $250,000, without any liability to Subsidiary Borrower whatsoever
in respect of such adjustments. Any monies received as payment for any loss
under any insurance policy mentioned above (other than liability insurance
policies) or as payment of any award or compensation for condemnation or taking
by eminent domain, shall be paid over to Agent to be applied at the option of
Required Lenders either to the prepayment of the Obligations or shall be
disbursed to Subsidiary Borrower under staged payment terms reasonably
satisfactory to the Required Lenders for application to the cost of repairs,
replacements, or restorations; provided, however, that if Agent receives such
monies in immediately available funds on a date that no Advance is outstanding,
Agent shall disburse such monies to Subsidiary Borrower on the Business Day
immediately following the date upon which Agent received such monies. Any such
repairs, replacements, or restorations shall be effected with reasonable
promptness and shall be of a value at least equal to the value of the items of
property destroyed prior to such damage or destruction.
Subsidiary Borrower will not take out separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained under this
Section 6.8, unless Agent is included thereon as named insured with the loss
payable to Agent under a lender's loss payable endorsement or its equivalent.
Subsidiary Borrower immediately shall notify Agent whenever such separate
insurance is taken out, specifying the insurer thereunder and full particulars
as to the policies evidencing the same, and copies of such policies promptly
shall be provided to Agent.
6.9 Location of Equipment. Keep Subsidiary Borrower's Equipment only at
the locations identified on Schedule 5.4; provided, however, that Subsidiary
Borrower may amend Schedule 5.4 so long as such amendment occurs by written
notice to Agent not less than 15 days prior to the date on which Equipment is
moved to such new location, so long as such new location is within the United
Kingdom and so long as, at the time of such written notification, Subsidiary
Borrower provides any filings necessary to perfect and continue
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perfected the Agent's Liens on such assets and also provides to Agent a
Collateral Access Agreement.
6.10 Compliance with Laws. Comply with the requirements of all applicable
laws, rules, regulations, and orders of any Governmental Authority, other than
laws, rules, regulations, and orders the non-compliance with which, individually
or in the aggregate, would not result in and reasonably could not be expected to
result in a Material Adverse Change.
6.11 Leases. Pay when due all rents and other amounts payable under any
leases to which they are parties or by which their properties and assets are
bound, unless such payments are the subject of a Permitted Protest.
6.12 Brokerage Commissions. Pay any and all brokerage commission or
finders fees incurred in connection with or as a result of Subsidiary Borrower's
obtaining financing from the Lender Group under this Agreement. Subsidiary
Borrower agrees and acknowledges that payment of all such brokerage commissions
or finders fees shall be the sole responsibility of Subsidiary Borrower, and
Subsidiary Borrower agrees to indemnify, defend, and hold Agent and the Lender
Group harmless from and against any claim of any broker or finder arising out of
Subsidiary Borrower's obtaining financing from the Lender Group under this
Agreement.
6.13 Existence. At all times preserve and keep in full force and effect
Subsidiary Borrower's valid existence and good standing and any rights and
franchises material to its business.
6.14 Environmental. (a) Keep any property either owned or operated by them
free of any Environmental Liens or post bonds or other financial assurances
sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens, (b) comply, in all material respects, with Environmental
Laws and provide to Agent documentation of such compliance which Agent
reasonably requests, (c) promptly notify Agent of any release of a Hazardous
Material in any reportable quantity from or onto property owned or operated by
Subsidiary Borrower and take any Remedial Actions required to ▇▇▇▇▇ said release
or otherwise to come into compliance with applicable Environmental Law, and (d)
promptly provide Agent with written notice within 10 days of the receipt of any
of the following: (i) notice that an Environmental Lien has been filed against
any of the real or personal property of Subsidiary Borrower, (ii) commencement
of any Environmental Action or notice that an Environmental Action will be filed
against Subsidiary Borrower, and (iii) notice of a violation, citation, or other
administrative order which reasonably could be expected to result in a Material
Adverse Change.
6.15 Disclosure Updates. Promptly and in no event later than 5 Business
Days after a senior officer of Subsidiary Borrower obtains knowledge thereof,
(a) notify Agent if any written information, exhibit, or report furnished to the
Lender Group contained any
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untrue statement of a material fact or omitted to state any material fact
necessary to make the statements contained therein not misleading in light of
the circumstances in which made, and (b) correct any defect or error that may be
discovered therein or in any Loan Document or in the execution, acknowledgement,
filing, or recordation thereof.
6.16 Compliance with Covenants of Domestic Loan Agreement. Promptly take
all such actions as are necessary to assure that, as a Material Subsidiary (as
defined in the Domestic Loan Agreement) of Domestic Parent, it is in compliance
with all requirements applicable to Material Subsidiaries and other Subsidiaries
of Domestic Parent pursuant to the Domestic Loan Agreement.
7. NEGATIVE COVENANTS.
Subsidiary Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of the
Obligations, Subsidiary Borrower will not and will not permit any of its
Subsidiaries to do any of the following:
7.1 Indebtedness. Create, incur, assume, permit, guarantee, or otherwise
become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the other UK
Loan Documents together with Indebtedness owed to Underlying Issuers with
respect to Underlying Letters of Credit,
(b) Indebtedness set forth on Schedule 5.20,
(c) refinancings, renewals, or extensions of Indebtedness
permitted under clauses (b) and (c) of this Section 7.1 (and continuance or
renewal of any Permitted Liens associated therewith) so long as: (i) the terms
and conditions of such refinancings, renewals, or extensions do not, in Agent's
reasonable judgment, materially impair the prospects of repayment of the
Obligations by Subsidiary Borrower or materially impair Subsidiary Borrower's
creditworthiness, (ii) such refinancings, renewals, or extensions do not result
in an increase in the principal amount of, or interest rate with respect to, the
Indebtedness so refinanced, renewed, or extended, (iii) such refinancings,
renewals, or extensions do not result in a shortening of the average weighted
maturity of the Indebtedness so refinanced, renewed, or extended, nor are they
on terms or conditions that, taken as a whole, are materially more burdensome or
restrictive to Subsidiary Borrower, and (iv) if the Indebtedness that is
refinanced, renewed, or extended was subordinated in right of payment to the
Obligations, then the terms and conditions of the refinancing, renewal, or
extension Indebtedness must include subordination terms and conditions that are
at least as favorable to the Lender Group as those that were applicable to the
refinanced, renewed, or extended Indebtedness, and
(d) Indebtedness arising as a result of Permitted Intercompany
Advances.
7.2 Liens. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens (including Liens that are replacements of Permitted
Liens to the extent that the original Indebtedness is refinanced, renewed, or
extended under Section 7.1(d) and so long as the replacement Liens only encumber
those assets that secured the refinanced, renewed, or extended Indebtedness).
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7.3 Restrictions on Fundamental Changes.
(a) Enter into any merger, consolidation, reorganization, or
recapitalization, or reclassify its Stock;
(b) Liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution).
(c) Except for Permitted Dispositions, convey, sell, lease,
license, assign, transfer, or otherwise dispose of, in one transaction or a
series of transactions, all or any substantial part of its assets.
7.4 Disposal of Assets. Other than Permitted Dispositions, convey, sell,
lease, license, assign, transfer, or otherwise dispose of any of Subsidiary
Borrower's assets.
7.5 Change Name. Change Subsidiary Borrower's name, corporate structure,
or identity, or add any new fictitious name; provided, however, that Subsidiary
Borrower may change its name upon at least 30 days prior written notice to Agent
of such change and so long as, at the time of such written notification,
Subsidiary Borrower provides any financing statements or fixture filings
necessary to perfect and continue perfected the Agent's Liens as to the
Collateral.
7.6 Guarantee. Except for (a) the guarantee contained in the UK Debenture
and (b) those guarantees set forth on Schedule 7.6, guarantee or otherwise
become in any way liable with respect to the obligations of any third Person
except by endorsement of instruments or items of payment for deposit to the
account of Subsidiary Borrower or which are transmitted or turned over to Agent.
7.7 Nature of Business. Make any change in the principal nature of its
business.
7.8 Prepayments and Amendments.
(a) Except in connection with a refinancing permitted by
Section 7.1(c), prepay, redeem, defease, purchase, or otherwise acquire any
Indebtedness of Subsidiary Borrower, other than the Obligations in accordance
with this Agreement, and
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(b) Except in connection with a refinancing permitted by
Section 7.1(c), directly or indirectly, amend, modify, alter, increase, or
change any of the terms or conditions of any agreement, instrument, document,
indenture, or other writing evidencing or concerning Indebtedness permitted
under Sections 7.1(b), (c), or (e).
7.9 Change of Control. Cause, permit, or suffer, directly or indirectly,
any Change of Control.
7.10 Consignments. Consign any of its Inventory or sell any of its
Inventory on ▇▇▇▇ and hold, sale or return, sale on approval, or other
conditional terms of sale.
7.11 Distributions. Make any distribution or declare or pay any dividends
(in cash or other property) on, or purchase, acquire, redeem, or retire any of
Subsidiary Borrower's Stock, of any class, whether now or hereafter outstanding.
7.12 Accounting Methods. Modify or change its method of accounting (other
than as may be required to conform to GAAP or which would result in an
improvement in Subsidiary Borrower's reporting abilities and practices) or enter
into, modify, or terminate any agreement currently existing, or at any time
hereafter entered into with any third party accounting firm or service bureau
for the preparation or storage of its accounting records without said accounting
firm or service bureau agreeing to provide Agent information regarding the
Collateral or Subsidiary Borrower's financial condition.
7.13 Investments. Directly or indirectly, make or acquire any Investment
or incur any liabilities (including contingent obligations) for or in connection
with any Investment.
7.14 Transactions with Affiliates. Directly or indirectly enter into or
permit to exist any transaction with any Affiliate of Subsidiary Borrower except
for transactions that are in the ordinary course of Subsidiary Borrower's
business, upon fair and reasonable terms, that are fully disclosed to Agent, and
that are no less favorable to Subsidiary Borrower than would be obtained in an
arm's length transaction with a non-Affiliate.
7.15 Suspension. Go out of all or a substantial portion of its core
business.
7.16 [Intentionally omitted].
7.17 Use of Proceeds. Use the proceeds of the Advances for any purpose
other than (a) to pay transactional fees, costs, and expenses incurred in
connection with this Agreement, the other UK Loan Documents, and the
transactions contemplated hereby and thereby, and (b) consistent with the terms
and conditions hereof, for its lawful and permitted purposes.
7.18 Change in Location of Head Office. Relocate its head office to a new
location without providing 30 days prior written notification thereof to Agent
and so long as, at the time of such written notification, Subsidiary Borrower
provides any amendments to the
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UK Security Documents or provides such other documents as may be necessary or
required to perfect and continue perfected the Agent's Liens and also provides
to Agent a Collateral Access Agreement with respect to such new location.
7.19 Inventory. Purchase or otherwise acquire any Inventory.
7.20 [Intentionally omitted].
7.21 Issuance of Stock. Issue or sell any of its Stock, of any Class.
7.22 Compliance with Covenants of Domestic Loan Agreement. Take any action
which would cause Domestic Parent to be in violation of any material term or
provision of the Domestic Loan Agreement or any other Domestic Loan Document to
which Domestic Parent is party.
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of
default (each, an "Event of Default") under this Agreement:
8.1 If Subsidiary Borrower fails to pay when due and payable, or when
declared due and payable, all or any portion of the Obligations (whether of
principal, interest (including any interest which, but for the provisions of the
Bankruptcy Code, would have accrued on such amounts), fees and charges due the
Lender Group, reimbursement of Lender Group Expenses, or other amounts
constituting Obligations);
8.2 If Subsidiary Borrower fails to (a) perform, keep, or observe any
covenant or other provision contained in Sections 6.2, 6.3, 6.7, 6.9, 6.10, and
6.11 hereof and such failure or neglect continues for a period of 5 days after
the date on which such failure or neglect first occurs, or (b) perform, keep, or
observe any covenant or other provision contained in any Section of this
Agreement (other than a Section that is expressly dealt with elsewhere in this
Section 8) or the other UK Loan Documents (other than a Section of such other UK
Loan Documents dealt with elsewhere in this Section 8) and such failure or
neglect is not cured within 15 days after the date on which such failure or
neglect first occurs, or (c) perform, keep, or observe any covenant or other
provision contained in Section 6 (other than a subsection of Section 6 that is
dealt with elsewhere in this Section 8), or Section 7 of this Agreement or any
comparable provision contained in any of the other UK Loan Documents;
8.3 If any material portion of Subsidiary Borrower's assets is attached,
seized, subjected to a writ or distress warrant, levied upon, or comes into the
possession of any third Person;
8.4 If an Insolvency Proceeding is commenced by Subsidiary Borrower or any
of its Subsidiaries;
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8.5 If an Insolvency Proceeding is commenced against Subsidiary Borrower,
or any of its Subsidiaries, and any of the following events occur: (a)
Subsidiary Borrower or the Subsidiary consents to the institution of such
Insolvency Proceeding against it, (b) the petition commencing the Insolvency
Proceeding is not timely controverted, (c) the petition commencing the
Insolvency Proceeding is not dismissed within 45 calendar days of the date of
the filing thereof; provided, however, that, during the pendency of such period,
Agent (including any successor agent) and each other member of the Lender Group
shall be relieved of their obligations to extend credit hereunder, (d) an
interim trustee is appointed to take possession of all or any substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, Subsidiary Borrower or any of its Subsidiaries, or
(e) an order for relief shall have been entered therein;
8.6 If Subsidiary Borrower is enjoined, restrained, or in any way
prevented by court order from continuing to conduct all or any material part of
its business affairs;
8.7 If a notice of Lien, levy, or assessment is filed of record with
respect to any of Subsidiary Borrower's assets by the United States, or any
department, agency, or instrumentality thereof, or by any state, county,
municipal, or governmental agency, or if any taxes or debts owing at any time
hereafter to any one or more of such entities becomes a Lien, whether ▇▇▇▇▇▇ or
otherwise, upon any of Subsidiary Borrower's assets and the same is not paid
before such payment is delinquent;
8.8 If a judgment or other claim becomes a Lien or encumbrance upon any
material portion of Subsidiary Borrower's assets;
8.9 If there is a default in any material financing agreement or lease to
which Subsidiary Borrower is a party and such default (a) occurs at the final
maturity of the obligations thereunder, or (b) results in a right by the other
party thereto, irrespective of whether exercised, to accelerate the maturity of
Subsidiary Borrower's obligations thereunder or to terminate such agreement or
lease;
8.10 If Subsidiary Borrower makes any payment on account of Indebtedness
that has been contractually subordinated in right of payment to the payment of
the Obligations, except to the extent such payment is permitted by the terms of
the subordination provisions applicable to such Indebtedness;
8.11 If any material misstatement or misrepresentation exists now or
hereafter in any warranty, representation, statement, or Record made to the
Lender Group by Subsidiary Borrower, or any officer, employee, agent, or
director of Subsidiary Borrower;
8.12 If any UK Loan Document that purports to create a Lien shall, for any
reason, fail or cease to create a valid and perfected charge, Lien or security
interest in the Collateral covered hereby and thereby;
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8.13 Any provision of any Loan Document shall at any time for any reason
be declared to be null and void, or the validity or enforceability thereof shall
be contested by Subsidiary Borrower, or a proceeding shall be commenced by
Subsidiary Borrower, or by any Governmental Authority having jurisdiction over
Subsidiary Borrower, seeking to establish the invalidity or unenforceability
thereof, or Subsidiary Borrower shall deny that Subsidiary Borrower has any
liability or obligation purported to be created under any UK Loan Document;
8.14 If there is a default in any Domestic Loan Document and such default
(a) occurs at the final maturity of the obligations thereunder, or (b) results
in a right by Agent or any Lender, irrespective of whether exercised, to
accelerate the maturity of the Domestic Parent's obligations thereunder, to
terminate such agreement, or to refuse to renew such agreement pursuant to an
automatic renewal right therein; or
8.15 If there is a default in any Irish Loan Document and such default (a)
occurs at the final maturity of the obligations thereunder, or (b) results in a
right by Agent or any Lender, irrespective of whether exercised, to accelerate
the maturity of the Irish Borrower's obligations thereunder, to terminate such
agreement, or to refuse to renew such agreement pursuant to an automatic renewal
right therein.
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 Rights and Remedies. Upon the occurrence, and during the continuation,
of an Event of Default, the Required Lenders (at their election but without
notice of their election and without demand) may authorize and instruct Agent to
do any one or more of the following on behalf of the Lender Group (and Agent,
acting upon the instructions of the Required Lenders, shall do the same on
behalf of the Lender Group), all of which are authorized by Subsidiary Borrower:
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other UK Loan Documents, or otherwise, immediately due
and payable; provided, however, that if an Event of Default occurs under Section
8.4 or Section 8.5, all such Obligations will automatically become immediately
due and payable;
(b) Cease advancing money or extending credit to or for the
benefit of Subsidiary Borrower under this Agreement, under any of the UK Loan
Documents, or under any other agreement between Subsidiary Borrower and the
Lender Group;
(c) Terminate this Agreement and any of the other UK Loan
Documents as to any future liability or obligation of the Lender Group, but
without affecting any of the Agent's Liens in the Collateral and without
affecting the Obligations;
(d) The Lender Group shall have all other rights and remedies
available at law or in equity or pursuant to any other UK Loan Document; and
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(e) Any deficiency that exists after disposition of the
Subsidiary Borrower Collateral as provided above will be paid immediately by
Subsidiary Borrower. Any excess will be returned, without interest and subject
to the rights of third Persons, by Agent to Subsidiary Borrower.
9.2 Remedies Cumulative. The rights and remedies of the Lender Group under
this Agreement, the other UK Loan Documents, and all other agreements shall be
cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided by law or in equity. No exercise by the Lender
Group of one right or remedy shall be deemed an election, and no waiver by the
Lender Group of any Event of Default shall be deemed a continuing waiver. No
delay by the Lender Group shall constitute a waiver, election, or acquiescence
by it.
10. TAXES AND EXPENSES.
If Subsidiary Borrower fails to pay any monies (whether taxes,
assessments, insurance premiums, or, in the case of leased properties or assets,
rents or other amounts payable under such leases) due to third Persons, or fails
to make any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, Agent, in its sole discretion
and without prior notice to Subsidiary Borrower, may do any or all of the
following: (a) make payment of the same or any part thereof, (b) set up such
reserves in Subsidiary Borrower's Loan Account as Agent deems necessary to
protect the Lender Group from the exposure created by such failure, or (c) in
the case of the failure to comply with Section 6.8 hereof, obtain and maintain
insurance policies of the type described in Section 6.8 and take any action with
respect to such policies as Agent deems prudent. Any such amounts paid by Agent
shall constitute Lender Group Expenses and any such payments shall not
constitute an agreement by the Lender Group to make similar payments in the
future or a waiver by the Lender Group of any Event of Default under this
Agreement. Agent need not inquire as to, or contest the validity of, any such
expense, tax, or Lien and the receipt of the usual official notice for the
payment thereof shall be conclusive evidence that the same was validly due and
owing.
11. WAIVERS; INDEMNIFICATION.
11.1 Demand; Protest; etc. Subsidiary Borrower waives demand, protest,
notice of protest, notice of default or dishonor, notice of payment and
non-payment, non-payment at maturity, release, compromise, settlement,
extension, or renewal of documents, instruments, chattel paper, and guarantees
at any time held by the Lender Group on which Subsidiary Borrower may in any way
be liable.
11.2 [Intentionally omitted].
11.3 Indemnification. Subsidiary Borrower shall pay, indemnify, defend,
and hold the Agent-Related Persons, the Lender-Related Persons with respect to
each Lender, each
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Participant, and each of their respective officers, directors, employees,
agents, and attorneys-in-fact (each, an "Indemnified Person") harmless (to the
fullest extent permitted by law) from and against any and all claims, demands,
suits, actions, investigations, proceedings, and damages, and all reasonable
attorneys fees and disbursements and other costs and expenses actually incurred
in connection therewith (as and when they are incurred and irrespective of
whether suit is brought), at any time asserted against, imposed upon, or
incurred by any of them (a) in connection with or as a result of or related to
the execution, delivery, enforcement, performance, or administration of this
Agreement, any of the other UK Loan Documents, or the transactions contemplated
hereby or thereby, and (b) with respect to any investigation, litigation, or
proceeding related to this Agreement, any other UK Loan Document, or the use of
the proceeds of the credit provided hereunder (irrespective of whether any
Indemnified Person is a party thereto), or any act, omission, event, or
circumstance in any manner related thereto (all the foregoing, collectively, the
"Indemnified Liabilities"). The foregoing to the contrary notwithstanding,
Subsidiary Borrower shall have no obligation to any Indemnified Person under
this Section 11.3 with respect to any Indemnified Liability that a court of
competent jurisdiction finally determines to have resulted from the gross
negligence or wilful misconduct of such Indemnified Person. This provision shall
survive the termination of this Agreement and the repayment of the Obligations.
If any Indemnified Person makes any payment to any other Indemnified Person with
respect to an Indemnified Liability as to which Subsidiary Borrower was required
to indemnify the Indemnified Person receiving such payment, the Indemnified
Person making such payment is entitled to be indemnified and reimbursed by
Subsidiary Borrower with respect thereto. WITHOUT LIMITATION, THE FOREGOING
INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED
LIABILITIES WHICH IN WHOLE OR IN PART CAUSED BY OR ARISE OUT OF ANY NEGLIGENT
ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY OTHER PERSON.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands
by Subsidiary Borrower or Agent to the other relating to this Agreement or any
other Loan Document shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by registered or certified mail
(postage prepaid, return receipt requested), overnight courier, electronic mail
(at such email addresses as Subsidiary Borrower or Agent, as applicable, may
designate to each other in accordance herewith), or telefacsimile to Subsidiary
Borrower or Agent, as the case may be, at its address set forth below:
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If to Subsidiary Borrower: PALM EUROPE LIMITED
c/o Palm, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
with copies to: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & FREIDENRICH, LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
If to Agent: FOOTHILL CAPITAL CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Business Finance Division Manager
Fax No.: ▇▇▇.▇▇▇.▇▇▇▇
with copies to: ▇▇▇▇▇▇▇, PHLEGER & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇ Hilson, Esq.
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
Agent and Subsidiary Borrower may change the address at which they
are to receive notices hereunder, by notice in writing in the foregoing manner
given to the other party. All notices or demands sent in accordance with this
Section 12 shall be deemed received on the earlier of the date of actual receipt
or 3 Business Days after the deposit thereof in the mail. Subsidiary Borrower
acknowledges and agrees that notices sent by the Lender Group in connection with
the exercise of enforcement rights against Collateral shall be deemed sent when
deposited in the mail or personally delivered, or, where permitted by law,
transmitted by telefacsimile or any other method set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER UK LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN
RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
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THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AGREEMENT AND THE OTHER UK LOAN DOCUMENTS SHALL BE TRIED
AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA OR THE COUNTY OF SANTA ▇▇▇▇▇, STATE OF CALIFORNIA,
OR, AT THE OPTION OF THE AGENT SOLELY, THE COURTS OF ENGLAND; PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY
BE BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT
ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE
FOUND. SUBSIDIARY BORROWER AND THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED
UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM
NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION 13(b).
(c) SUBSIDIARY BORROWER AND THE LENDER GROUP HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF ANY OF THE UK LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. SUBSIDIARY BORROWER AND
THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY
AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
14.1 Assignments and Participations.
(a) Any Lender may, with the written consent of Agent and, so
long as no Event of Default has occurred and is continuing, with the written
consent of Subsidiary Borrower (provided that no written consent of Agent or
Subsidiary Borrower shall be required in connection with any assignment and
delegation by a Lender to an Eligible Transferee), assign and delegate to one or
more assignees (each an "Assignee") all, or any ratable part of all, of the
Obligations, the Commitments and the other rights and obligations
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of such Lender hereunder and under the other UK Loan Documents, in a minimum
amount of $1,500,000; provided, however, that Subsidiary Borrower and Agent may
continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until (i) written notice of such assignment,
together with payment instructions, addresses, and related information with
respect to the Assignee, have been given to Subsidiary Borrower and Agent by
such Lender and the Assignee, (ii) such Lender and its Assignee have delivered
to Subsidiary Borrower and Agent an Assignment and Acceptance in form and
substance satisfactory to Agent, and (iii) unless the assignment occurs prior to
the date that is 90 days after the Closing Date, the assignor Lender or Assignee
has paid to Agent for Agent's separate account a processing fee in the amount of
$5,000. Anything contained herein to the contrary notwithstanding, the consent
of Agent and Subsidiary Borrower shall not be required (and payment of any fees
shall not be required) if such assignment is in connection with any merger,
consolidation, sale, transfer, or other disposition of all or any substantial
portion of the business or loan portfolio of such Lender and no Lender shall
assign or participate all or any portion of its Commitment or portion of the
Obligations to a Person which it knows is a direct competitor of Subsidiary
Borrower.
(b) From and after the date that Agent notifies the assignor
Lender (with a copy to Subsidiary Borrower) that it has received an executed
Assignment and Acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Lender
under the UK Loan Documents, and (ii) the assignor Lender shall, to the extent
that rights and obligations hereunder and under the other UK Loan Documents have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights (except with respect to Section 11.3 hereof) and be released from its
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement and the other UK Loan Documents, such
Lender shall cease to be a party hereto and thereto), and such assignment shall
affect a novation between Subsidiary Borrower and the Assignee.
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (1) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other UK Loan Document furnished
pursuant hereto, (2) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Subsidiary Borrower or the performance or observance by Subsidiary Borrower of
any of its obligations under this Agreement or any other Loan Document furnished
pursuant hereto, (3) such Assignee confirms that it has received a copy of this
Agreement, together with such other documents
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and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance, (4) such Assignee will,
independently and without reliance upon Agent, such assigning Lender or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement, (5) such Assignee appoints and
authorizes Agent to take such actions and to exercise such powers under this
Agreement as are delegated to Agent, by the terms hereof, together with such
powers as are reasonably incidental thereto, and (6) such Assignee agrees that
it will perform all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance and receipt and acknowledgment by
Agent of such fully executed Assignment and Acceptance, this Agreement shall be
deemed to be amended to the extent, but only to the extent, necessary to reflect
the addition of the Assignee and the resulting adjustment of the Commitments
arising therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender pro tanto.
(e) Any Lender may at any time, with the written consent of
Agent, sell to one or more commercial banks, financial institutions, or other
Persons not Affiliates of such Lender (a "Participant") participating interests
in its Obligations, the Commitment, and the other rights and interests of that
Lender (the "Originating Lender") hereunder and under the other UK Loan
Documents (provided that no written consent of Agent shall be required in
connection with any sale of any such participating interests by a Lender to an
Eligible Transferee); provided, however, that (i) the Originating Lender shall
remain a "Lender" for all purposes of this Agreement and the other UK Loan
Documents and the Participant receiving the participating interest in the
Obligations, the Commitments, and the other rights and interests of the
Originating Lender hereunder shall not constitute a "Lender" hereunder or under
the other UK Loan Documents and the Originating Lender's obligations under this
Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Subsidiary
Borrower, Agent, and the Lenders shall continue to deal solely and directly with
the Originating Lender in connection with the Originating Lender's rights and
obligations under this Agreement and the other UK Loan Documents, (iv) no Lender
shall transfer or grant any participating interest under which the Participant
has the right to approve any amendment to, or any consent or waiver with respect
to, this Agreement or any other UK Loan Document, except to the extent such
amendment to, or consent or waiver with respect to this Agreement or of any
other UK Loan Document would (A) extend the final maturity date of the
Obligations hereunder in which such Participant is participating, (B) reduce the
interest rate applicable to the Obligations hereunder in which such Participant
is participating, (C) release all or a material portion of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the UK
Loan Documents) supporting the Obligations hereunder in which
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such Participant is participating, (D) postpone the payment of, or reduce the
amount of, the interest or fees payable to such Participant through such Lender,
or (E) change the amount or due dates of scheduled principal repayments or
prepayments or premiums, and (v) all amounts payable by Subsidiary Borrower
hereunder shall be determined as if such Lender had not sold such participation,
except that, if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set-off in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement. The rights of any
Participant only shall be derivative through the Originating Lender with whom
such Participant participates and no Participant shall have any rights under
this Agreement or the other UK Loan Documents or any direct rights as to the
other Lenders, Agent, Subsidiary Borrower, the Collections, the Collateral, or
otherwise in respect of the Obligations. No Participant shall have the right to
participate directly in the making of decisions by the Lenders among themselves.
(f) In connection with any such assignment or participation or
proposed assignment or participation, a Lender may disclose all documents and
information which it now or hereafter may have relating to Subsidiary Borrower
or Subsidiary Borrower's business.
14.2 Successors. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; provided, however,
that Subsidiary Borrower may not assign this Agreement or any rights or duties
hereunder without the Lenders' prior written consent and any prohibited
assignment shall be absolutely void ab initio. No consent to assignment by the
Lenders shall release Subsidiary Borrower from its Obligations. A Lender may
assign this Agreement and the other UK Loan Documents and its rights and duties
hereunder and thereunder pursuant to Section 14.1 hereof and, except as
expressly required pursuant to Section 14.1 hereof, no consent or approval by
Subsidiary Borrower is required in connection with any such assignment.
15. AMENDMENTS; WAIVERS.
15.1 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other UK Loan Document, and no consent with respect to any
departure by Subsidiary Borrower therefrom, shall be effective unless the same
shall be in writing and signed by the Required Lenders (or by Agent at the
written request of the Required Lenders) and Subsidiary Borrower and then any
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no such waiver,
amendment, or consent shall, unless in writing and signed by all of the Lenders
affected thereby and Subsidiary Borrower, do any of the following:
(a) increase or extend any Commitment of any Lender,
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(b) postpone or delay any date fixed by this Agreement or any
other UK Loan Document for any payment of principal, interest, fees, or other
amounts due hereunder or under any other UK Loan Document,
(c) reduce the principal of, or the rate of interest on, any
loan or other extension of credit hereunder, or reduce any fees or other amounts
payable hereunder or under any other UK Loan Document,
(d) change the percentage of the Commitments that is required
to take any action hereunder,
(e) amend this Section or any provision of the Agreement
providing for consent or other action by all Lenders,
(f) release Collateral other than as permitted by Section
16.12,
(g) change the definition of "Required Lenders" or "Defaulting
Lender Rate",
(h) contractually subordinate any of the Agent's Liens,
(i) release Subsidiary Borrower from any obligation for the
payment of money,
(j) change the definition of Borrowing Base or the definitions
of Eligible Accounts, Maximum Subsidiary Revolver Amount, or change Section
2.1(b), or
(k) amend any of the provisions of Section 16 or Section 3.1.
and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, or Swing Lender, as applicable, affect
the rights or duties of Agent or Swing Lender, as applicable, under this
Agreement or any other UK Loan Document. The foregoing notwithstanding, any
amendment, modification, waiver, consent, termination, or release of, or with
respect to, any provision of this Agreement or any other UK Loan Document that
relates only to the relationship of the Lender Group among themselves, and that
does not affect the rights or obligations of Subsidiary Borrower, shall not
require consent by or the agreement of Subsidiary Borrower.
15.2 Replacement of Holdout Lender.
(a) If any action to be taken by the Lender Group or Agent
hereunder requires the unanimous consent, authorization, or agreement of all
Lenders, and a Lender ("Holdout Lender") fails to give its consent,
authorization, or agreement, then Agent, upon at least 5 Business Days prior
irrevocable notice to the Holdout Lender, may permanently replace the Holdout
Lender with one or more substitute Lenders (each, a
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"Replacement Lender"), and the Holdout Lender shall have no right to refuse to
be replaced hereunder. Such notice to replace the Holdout Lender shall specify
an effective date for such replacement, which date shall not be later than 15
Business Days after the date such notice is given.
(b) Prior to the effective date of such replacement, the
Holdout Lender and each Replacement Lender shall execute and deliver an
Assignment and Acceptance Agreement, subject only to the Holdout Lender being
repaid its share of the outstanding Obligations (including an assumption of its
Pro Rata Share of the Risk Participation Liability) without any premium or
penalty of any kind whatsoever. If the Holdout Lender shall refuse or fail to
execute and deliver any such Assignment and Acceptance Agreement prior to the
effective date of such replacement, the Holdout Lender shall be deemed to have
executed and delivered such Assignment and Acceptance Agreement. The replacement
of any Holdout Lender shall be made in accordance with the terms of Section
14.1. Until such time as the Replacement Lenders shall have acquired all of the
Obligations, the Commitments, and the other rights and obligations of the
Holdout Lender hereunder and under the other UK Loan Documents, the Holdout
Lender shall remain obligated to make the Holdout Lender's Pro Rata Share of
Advances, and to purchase a participation in each Letter of Credit, in an amount
equal to its Pro Rata Share of the Risk Participation Liability of such Letter
of Credit.
15.3 No Waivers; Cumulative Remedies. No failure by Agent or any Lender to
exercise any right, remedy, or option under this Agreement or any other UK Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated. No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent's and each
Lender's rights thereafter to require strict performance by Subsidiary Borrower
of any provision of this Agreement. Agent's and each Lender's rights under this
Agreement and the other UK Loan Documents will be cumulative and not exclusive
of any other right or remedy the Agent or any Lender may have.
16. AGENT; THE LENDER GROUP.
16.1 Appointment and Authorization of Agent. Each Lender hereby designates
and appoints Foothill as its representative under this Agreement and the other
UK Loan Documents and each Lender hereby irrevocably authorizes Agent to take
such action on its behalf under the provisions of this Agreement and each other
UK Loan Document and to exercise such powers and perform such duties as are
expressly delegated to Agent by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. Agent
agrees to act as such on the express conditions contained in this Section 16.
The provisions of this Section 16 are solely for the benefit of Agent, and the
Lenders, and Subsidiary Borrower shall have no rights as a third party
beneficiary of any of the provisions contained herein. Any provision to the
contrary contained elsewhere in this Agreement or in any other UK Loan Document
notwithstanding,
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Agent shall not have any duties or responsibilities, except those expressly set
forth herein, nor shall Agent have or be deemed to have any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other UK Loan Document or otherwise exist against Agent; it
being expressly understood and agreed that the use of the word "Agent" is for
convenience only, that Foothill is merely the representative of the Lenders, and
only has the contractual duties set forth herein. Except as expressly otherwise
provided in this Agreement, Agent shall have and may use its sole discretion
with respect to exercising or refraining from exercising any discretionary
rights or taking or refraining from taking any actions that Agent expressly is
entitled to take or assert under or pursuant to this Agreement and the other UK
Loan Documents. Without limiting the generality of the foregoing, or of any
other provision of the UK Loan Documents that provides rights or powers to
Agent, Lenders agree that Agent shall have the right to exercise the following
powers as long as this Agreement remains in effect: (a) maintain, in accordance
with its customary business practices, ledgers and records reflecting the status
of the Obligations, the Collateral, the Collections, and related matters, (b)
execute or file any and all financing or similar statements or notices,
amendments, renewals, supplements, documents, instruments, proofs of claim,
notices and other written agreements with respect to the UK Loan Documents, (c)
make Advances, for itself or on behalf of Lenders as provided in the UK Loan
Documents, (d) exclusively receive, apply, and distribute the Collections as
provided in the UK Loan Documents, (e) open and maintain such bank accounts and
cash management arrangements as Agent deems necessary and appropriate in
accordance with the UK Loan Documents for the foregoing purposes with respect to
the Collateral and the Collections, (f) perform, exercise, and enforce any and
all other rights and remedies of the Lender Group with respect to Subsidiary
Borrower, the Obligations, the Collateral, the Collections, or otherwise related
to any of same as provided in the UK Loan Documents, and (g) incur and pay such
Lender Group Expenses as Agent may deem necessary or appropriate for the
performance and fulfilment of its functions and powers pursuant to the UK Loan
Documents. Documentation Agent, in its capacity as Documentation Agent, shall
have no duties under the UK Loan Documents. Syndication Agent, in its capacity
as Syndication Agent, shall have no duties under the UK Loan Documents.
16.2 Delegation of Duties. Agent may execute any of its duties under this
Agreement or any other UK Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or wilful misconduct.
16.3 Liability of Agent. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other UK Loan Document or the transactions
contemplated hereby (except for its own gross negligence or wilful misconduct),
or (ii) be responsible in any manner to
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any of the Lenders for any recital, statement, representation or warranty made
by Subsidiary Borrower or Affiliate of Subsidiary Borrower, or any officer or
director thereof, contained in this Agreement or in any other UK Loan Document,
or in any certificate, report, statement or other document referred to or
provided for in, or received by Agent under or in connection with, this
Agreement or any other UK Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other UK
Loan Document, or for any failure of Subsidiary Borrower or any other party to
any UK Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other UK Loan Document, or
to inspect the Books or properties of Subsidiary Borrower or the books or
records or properties of any of Subsidiary Borrower's Subsidiaries or
Affiliates.
16.4 Reliance by Agent. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent, or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to Borrower
or counsel to any Lender), independent accountants and other experts selected by
Agent. Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other UK Loan Document unless Agent shall first
receive such advice or concurrence of the Lenders as it deems appropriate and
until such instructions are received, Agent shall act, or refrain from acting,
as it deems advisable. If Agent so requests, it shall first be indemnified to
its reasonable satisfaction by Lenders against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action. Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement or any other UK Loan Document in accordance
with a request or consent of the Lenders and such request and any action taken
or failure to act pursuant thereto shall be binding upon all of the Lenders.
16.5 Notice of Default or Event of Default. Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of the Lenders, except
with respect to Events of Default of which Agent has actual knowledge, unless
Agent shall have received written notice from a Lender or Subsidiary Borrower
referring to this Agreement, describing such Default or Event of Default, and
stating that such notice is a "notice of default." Agent promptly will notify
the Lenders of its receipt of any such notice or of any Event of Default of
which Agent has actual knowledge. If any Lender obtains actual knowledge of any
Event of Default, such Lender promptly shall notify the other Lenders and Agent
of such Event of Default. Each Lender shall be solely responsible for giving any
notices to its Participants, if any. Subject to Section 16.4, Agent shall take
such action with respect to such Default or Event of Default as may be requested
by the Required Lenders in accordance with Section 9; provided, however,
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that unless and until Agent has received any such request, Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable.
16.6 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of
Subsidiary Borrower and its Subsidiaries or Affiliates, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender. Each Lender represents to Agent that it has, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of Subsidiary Borrower and any other Person
(other than the Lender Group) party to a UK Loan Document, and all applicable
bank regulatory laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend credit to Subsidiary
Borrower. Each Lender also represents that it will, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other UK Loan Documents, and to make such investigations
as it deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and creditworthiness of
Subsidiary Borrower and any other Person (other than the Lender Group) party to
a UK Loan Document. Except for notices, reports, and other documents expressly
herein required to be furnished to the Lenders by Agent, Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of Subsidiary Borrower and any other
Person party to a UK Loan Document that may come into the possession of any of
the Agent-Related Persons.
16.7 Costs and Expenses; Indemnification. Agent may incur and pay Lender
Group Expenses to the extent Agent reasonably deems necessary or appropriate for
the performance and fulfilment of its functions, powers, and obligations
pursuant to the UK Loan Documents, including court costs, reasonable attorneys
fees and expenses, costs of collection by outside collection agencies and
auctioneer fees and costs of security guards or insurance premiums paid to
maintain the Collateral, whether or not Subsidiary Borrower is obligated to
reimburse Agent or Lenders for such expenses pursuant to the Loan Agreement or
otherwise. Agent is authorized and directed to deduct and retain sufficient
amounts from Collections received by Agent to reimburse Agent for such
out-of-pocket costs and expenses prior to the distribution of any amounts to
Lenders. In the event Agent is not reimbursed for such costs and expenses from
Collections received by Agent, each Lender hereby agrees that it is and shall be
obligated to pay to or reimburse Agent for the amount of such Lender's Pro Rata
Share thereof. Whether or not the transactions contemplated hereby are
consummated, the Lenders shall indemnify upon demand the Agent-Related Persons
(to the extent not
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reimbursed by or on behalf of Subsidiary Borrower and without limiting the
obligation of Subsidiary Borrower to do so), according to their Pro Rata Shares,
from and against any and all Indemnified Liabilities; provided, however, that no
Lender shall be liable for the payment to any Agent-Related Person of any
portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or wilful misconduct nor shall any Lender be liable for the
obligations of any Defaulting Lender in failing to make an Advance or other
extension of credit hereunder. Without limitation of the foregoing, each Lender
shall reimburse Agent upon demand for such Lender's ratable share of any costs
or out-of-pocket expenses (including attorneys fees and expenses) incurred by
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other UK Loan Document, or any
document contemplated by or referred to herein, to the extent that Agent is not
reimbursed for such expenses by or on behalf of Subsidiary Borrower. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of Agent.
16.8 Agent in Individual Capacity. Foothill and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Subsidiary Borrower and
its Subsidiaries and Affiliates and any other Person (other than the Lender
Group) party to any UK Loan Documents as though Foothill were not Agent
hereunder, and, in each case, without notice to or consent of the other members
of the Lender Group. The other members of the Lender Group acknowledge that,
pursuant to such activities, Foothill or its Affiliates may receive information
regarding Subsidiary Borrower or its Affiliates and any other Person (other than
the Lender Group) party to any UK Loan Documents that is subject to
confidentiality obligations in favor of Subsidiary Borrower or such other Person
and that prohibit the disclosure of such information to the Lenders, and the
Lenders acknowledge that, in such circumstances (and in the absence of a waiver
of such confidentiality obligations, which waiver Agent will use its reasonable
best efforts to obtain), Agent shall not be under any obligation to provide such
information to them. The terms "Lender" and "Lenders" include Foothill in its
individual capacity.
16.9 Successor Agent. Agent may resign as Agent upon 45 days notice to the
Lenders. If Agent resigns under this Agreement, the Required Lenders shall
appoint a successor Agent for the Lenders. If no successor Agent is appointed
prior to the effective date of the resignation of Agent, Agent may appoint,
after consulting with the Lenders, a successor Agent. If Agent has materially
breached or failed to perform any material provision of this Agreement or of
applicable law, the Required Lenders may agree in writing to remove and replace
Agent with a successor Agent from among the Lenders. In any such event, upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term "Agent" shall mean such successor Agent and the retiring Agent's
appointment, powers, and
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duties as Agent shall be terminated. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Section 16 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent under
this Agreement. If no successor Agent has accepted appointment as Agent by the
date which is 45 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective and
the Lenders shall perform all of the duties of Agent hereunder until such time,
if any, as the Lenders appoint a successor Agent as provided for above.
16.10 Lender in Individual Capacity. Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with
Subsidiary Borrower and its Subsidiaries and Affiliates and any other Person
(other than the Lender Group) party to any UK Loan Documents as though such
Lender were not a Lender hereunder without notice to or consent of the other
members of the Lender Group. The other members of the Lender Group acknowledge
that, pursuant to such activities, such Lender and its respective Affiliates may
receive information regarding Subsidiary Borrower or its Affiliates and any
other Person (other than the Lender Group) party to any UK Loan Documents that
is subject to confidentiality obligations in favor of Subsidiary Borrower or
such other Person and that prohibit the disclosure of such information to the
Lenders, and the Lenders acknowledge that, in such circumstances (and in the
absence of a waiver of such confidentiality obligations, which waiver such
Lender will use its reasonable best efforts to obtain), such Lender not shall be
under any obligation to provide such information to them. With respect to the
Swing Loans and Agent Advances, Swing Lender shall have the same rights and
powers under this Agreement as any other Lender and may exercise the same as
though it were not the sub-agent of Agent.
16.11 Withholding Taxes.
(a) If any Lender is a "foreign corporation, partnership or
trust" within the meaning of the IRC and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the IRC, such
Lender agrees with and in favor of Agent and Subsidiary Borrower, to deliver to
Agent and Subsidiary Borrower:
(i) if such Lender claims an exemption from withholding tax
pursuant to its portfolio interest exception, (a) a statement of the
Lender, signed under penalty of perjury, that it is not a (I) a
"bank" as described in Section 881(c)(3)(A) of the IRC, (II) a 10%
shareholder (within the meaning of Section 881(c)(3)(B) of the IRC),
or (III) a controlled foreign corporation described in Section
881(c)(3)(C) of the IRC, and (B) a properly completed IRS Form
W-8BEN, before the first payment of any interest under this
Agreement and at any other time reasonably requested by Agent or
Subsidiary Borrower;
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(ii) if such Lender claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, properly
completed IRS Form W-8BEN before the first payment of any interest
under this Agreement and at any other time reasonably requested by
Agent or Subsidiary Borrower;
(iii) if such Lender claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such
Lender, two properly completed and executed copies of IRS Form
W-8ECI before the first payment of any interest is due under this
Agreement and at any other time reasonably requested by Agent or
Subsidiary Borrower;
(iv) such other form or forms as may be required under the IRC
or other laws of the United States as a condition to exemption from,
or reduction of, United States withholding tax.
Such Lender agrees promptly to notify Agent and Subsidiary Borrower of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form W-8BEN
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of Subsidiary Borrower to such Lender,
such Lender agrees to notify Agent of the percentage amount in which it is no
longer the beneficial owner of Obligations of Subsidiary Borrower to such
Lender. To the extent of such percentage amount, Agent will treat such Lender's
IRS Form W-8BEN as no longer valid.
(c) If any Lender is entitled to a reduction in the applicable
withholding tax, Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to Agent, then Agent may withhold from any
interest payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.
(d) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Lender shall indemnify and hold Agent harmless for all amounts
paid, directly or indirectly, by Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to Agent under this Section, together with all costs and expenses
(including attorneys fees and expenses). The obligation of the Lenders under
this subsection shall survive the
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payment of all Obligations and the resignation or replacement of Agent. If any
of the Lenders fail to properly report and file taxes imposed with respect to
any payments made hereunder and as a result of such failure the IRS or any other
Governmental Authority of the United States or any political subdivision or
taxing authority thereof or therein asserts a claim that Subsidiary Borrower did
not properly withhold tax from amounts paid to Agent or Lender hereunder, Agent
shall indemnify and hold Subsidiary Borrower harmless for all amounts paid,
directly or indirectly, by Subsidiary Borrower as tax or otherwise, including
penalties, interest and related costs and expenses in connection with such
claim. The obligation of Agent to Subsidiary Borrower under this subsection
shall survive the payment of all Obligations and the resignation or replacement
of Agent.
(e) All payments made by Subsidiary Borrower hereunder or
under any note will be made without setoff, counterclaim, or other defense,
except as required by applicable law. All such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction (other than the United States) or
by any political subdivision or taxing authority thereof or therein (other than
of the United States) with respect to such payments (but excluding any tax
imposed by any jurisdiction or by any political subdivision or taxing authority
thereof or therein (i) measured by or based on the net income or net profits of
a Lender or (ii) to the extent that such tax results from a change in the
circumstances of the Lender, including a change in the residence, place of
organization, or principal place of business of the Lender, or a change in the
branch or lending office of the Lender participating in the transactions set
forth herein) and all interest, penalties or similar liabilities with respect
thereto (all such non-excluded taxes, levies, imposts, duties, fees, assessments
or other charges including, for the avoidance of doubt, UK deduction or
withholding tax, being referred to collectively as "Taxes"). If any Taxes are so
levied or imposed or required to be deducted or withheld, Subsidiary Borrower
agrees to pay the full amount of such Taxes, and such additional amounts (the
"Gross Up Amount") as may be necessary so that every payment of all amounts due
under this Agreement or under any note, including any amount paid pursuant to
this Section 16.11(e) after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein; provided, however,
that Subsidiary Borrower shall not be required to increase any such amounts
payable to Agent or any Lender (i) that is not organized under the laws of the
United States, if such Person fails to comply with the other requirements of
this Section 16.11, or (ii) if the increase in such amount payable results from
Agent's or such Lender's own wilful misconduct or gross negligence. Subsidiary
Borrower will furnish to Agent as promptly as possible after the date the
payment of any Taxes is due pursuant to applicable law certified copies of tax
receipts evidencing such payment by Subsidiary Borrower.
(f) Without prejudice to the generality of the provisions in
Section 16.11(e) above, the Lenders, the Agent and Subsidiary Borrower shall
cooperate in completing any procedural formalities necessary to make an
application for Subsidiary
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Borrower to obtain authorisation to make its payment hereunder or under any note
without deduction or withholding for or on account of applicable Taxes due on
account of the making of a payment hereunder. In the period prior to the
obtaining of such authorisation (such period not to exceed 6 months from the
date of entering into this Agreement), any interest which accrues to the Lenders
pursuant to the terms of this Agreement shall not be paid until such time as
such authorisation is obtained, but shall then be paid in full. In circumstances
where 6 months has elapsed since the date of entering into this Agreement and no
such authorisation (for whatever reason other than failure by a Lender or the
Agent to cooperate in completing any procedural formalities necessary for making
an application under this Section 16.11(f)) has been obtained, the Subsidiary
Borrower shall pay in full any interest which has accrued to the Lenders
pursuant to the terms of this Agreement together with the Gross Up Amount and
the provisions of Section 16.11(e) shall apply. Any documentation to be provided
(i) under this Section 16.11(f) in order to obtain the relevant authorisation
hereunder or (ii) pursuant to the requirements set forth in the definition of
Eligible Transferee in Section 1.1 shall be provided or updated within 60 days
of a written request by Subsidiary Borrower. If any Lender fails to provide or
update the relevant documentation within such time period, the Gross Up Amount
under Section 16.11(e) shall not be payable to the extent such Gross Up Amount
obligation arises from the failure by a Lender to provide or update such
documentation.
16.12 Collateral Matters.
(a) The Lenders hereby irrevocably authorize Agent, at its
option and in its sole discretion, to release any Lien on any Collateral (i)
upon the termination of the Commitments and payment and satisfaction in full by
Subsidiary Borrower of all Obligations, (ii) constituting property being sold or
disposed of if a release is required or desirable in connection therewith and if
Subsidiary Borrower certifies to Agent that the sale or disposition is permitted
under Section 7.4 of this Agreement or the other UK Loan Documents (and Agent
may rely conclusively on any such certificate, without further inquiry), (iii)
constituting property in which Subsidiary Borrower owned no interest at the time
the security interest was granted or at any time thereafter, or (iv)
constituting property leased to Subsidiary Borrower under a lease that has
expired or is terminated in a transaction permitted under this Agreement. Except
as provided above, Agent will not execute and deliver a release of any Lien on
any Collateral without the prior written authorization of (y) if the release is
of all or substantially all of the Collateral, all of the Lenders, or (z)
otherwise, the Required Lenders. Upon request by Agent or Subsidiary Borrower at
any time, the Lenders will confirm in writing Agent's authority to release any
such Liens on particular types or items of Collateral pursuant to this Section
16.12; provided, however, that (1) Agent shall not be required to execute any
document necessary to evidence such release on terms that, in Agent's opinion,
would expose Agent to liability or create any obligation or entail any
consequence other than the release of such Lien without recourse,
representation, or warranty, and (2) such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of
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Subsidiary Borrower in respect of) all interests retained by Subsidiary
Borrower, including, the proceeds of any sale, all of which shall continue to
constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any of the
Lenders to assure that the Collateral exists or is owned by Subsidiary Borrower
or is cared for, protected, or insured or has been encumbered, or that the
Agent's Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or to exercise at all or in any particular manner or
under any duty of care, disclosure or fidelity, or to continue exercising, any
of the rights, authorities and powers granted or available to Agent pursuant to
any of the UK Loan Documents, it being understood and agreed that in respect of
the Collateral, or any act, omission, or event related thereto, subject to the
terms and conditions contained herein, Agent may act in any manner it may deem
appropriate, in its sole discretion given Agent's own interest in the Collateral
in its capacity as one of the Lenders and that Agent shall have no other duty or
liability whatsoever to any Lender as to any of the foregoing, except as
otherwise provided herein.
16.13 Restrictions on Actions by Lenders; Sharing of Payments.
(a) Each of the Lenders agrees that it shall not, without the
express consent of Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of Agent, set off against the Obligations,
any amounts owing by such Lender to Subsidiary Borrower or any deposit accounts
of Subsidiary Borrower now or hereafter maintained with such Lender. Each of the
Lenders further agrees that it shall not, unless specifically requested to do so
by Agent, take or cause to be taken any action, including, the commencement of
any legal or equitable proceedings, to foreclose any Lien on, or otherwise
enforce any security interest in, any of the Collateral the purpose of which is,
or could be, to give such Lender any preference or priority against the other
Lenders with respect to the Collateral.
(b) If, at any time or times any Lender shall receive (i) by
payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations arising under, or relating to, this
Agreement or the other UK Loan Documents, except for any such proceeds or
payments received by such Lender from Agent pursuant to the terms of this
Agreement, or (ii) payments from Agent in excess of such Lender's ratable
portion of all such distributions by Agent, such Lender promptly shall (1) turn
the same over to Agent, in kind, and with such endorsements as may be required
to negotiate the same to Agent, or in immediately available funds, as
applicable, for the account of all of the Lenders and for application to the
Obligations in accordance with the applicable provisions of this Agreement, or
(2) purchase, without recourse or warranty, an undivided interest and
participation in the Obligations owed to the other Lenders so that such excess
payment received shall be applied ratably as among the Lenders in accordance
with their Pro Rata Shares; provided, however, that if all or part of such
excess payment received by the purchasing party is thereafter recovered from it,
those purchases of participations shall be rescinded in whole or in part, as
applicable, and the applicable portion of the purchase price
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paid therefor shall be returned to such purchasing party, but without interest
except to the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
16.14 [Intentionally omitted].
16.15 Payments by Agent to the Lenders. All payments to be made by Agent
to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds pursuant to such wire transfer instructions as each
party may designate for itself by written notice to Agent. Concurrently with
each such payment, Agent shall identify whether such payment (or any portion
thereof) represents principal, premium, or interest of the Obligations.
16.16 Concerning the Collateral and Related UK Loan Documents. Each member
of the Lender Group authorizes and directs Agent to enter into this Agreement
and the other UK Loan Documents relating to the Collateral, for the benefit of
the Lender Group. Each member of the Lender Group agrees that any action taken
by Agent in accordance with the terms of this Agreement or the other UK Loan
Documents relating to the Collateral and the exercise by Agent of its powers set
forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.
16.17 Field Audits and Examination Reports; Confidentiality; Disclaimers
by Lenders; Other Reports and Information. By becoming a party to this
Agreement, each Lender:
(a) is deemed to have requested that Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by
Agent, and Agent shall so furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that Agent does not (i)
make any representation or warranty as to the accuracy of any Report, and (ii)
shall not be liable for any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
audit or examination will inspect only specific information regarding Subsidiary
Borrower and will rely significantly upon the Books, as well as on
representations of Subsidiary Borrower's personnel,
(d) agrees to keep all Reports and other material, non-public
information regarding Subsidiary Borrower and its Subsidiaries and their
operations, assets, and existing and contemplated business plans in a
confidential manner; it being understood and agreed by Subsidiary Borrower that
in any event such Lender may make disclosures (a)
-87-
to counsel for and other advisors, accountants, and auditors to such Lender, (b)
reasonably required by any bona fide potential or actual Assignee or Participant
in connection with any contemplated or actual assignment or transfer by such
Lender of an interest herein or any participation interest in such Lender's
rights hereunder, (c) of information that has become public by disclosures made
by Persons other than such Lender, its Affiliates, assignees, transferees, or
Participants, or (d) as required or requested by any court, governmental or
administrative agency, pursuant to any subpoena or other legal process, or by
any law, statute, regulation, or court order; provided, however, that, unless
prohibited by applicable law, statute, regulation, or court order, such Lender
shall notify Subsidiary Borrower of any request by any court, governmental or
administrative agency, or pursuant to any subpoena or other legal process for
disclosure of any such non-public material information concurrent with, or where
practicable, prior to the disclosure thereof, and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold Agent
and any other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to Subsidiary Borrower, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of Subsidiary Borrower, and (ii) to pay and protect, and
indemnify, defend and hold Agent, and any such other Lender preparing a Report
harmless from and against, the claims, actions, proceedings, damages, costs,
expenses, and other amounts (including, attorneys fees and costs) incurred by
Agent and any such other Lender preparing a Report as the direct or indirect
result of any third parties who might obtain all or part of any Report through
the indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Subsidiary Borrower to Agent that has not been
contemporaneously provided by Subsidiary Borrower to such Lender, and, upon
receipt of such request, Agent promptly shall provide a copy of same to such
Lender, (y) to the extent that Agent is entitled, under any provision of the UK
Loan Documents, to request additional reports or information from Subsidiary
Borrower, any Lender may, from time to time, reasonably request Agent to
exercise such right as specified in such Lender's notice to Agent, whereupon
Agent promptly shall request of Subsidiary Borrower the additional reports or
information reasonably specified by such Lender, and, upon receipt thereof from
Subsidiary Borrower, Agent promptly shall provide a copy of same to such Lender,
and (z) any time that Agent renders to Subsidiary Borrower a statement regarding
the Loan Account, Agent shall send a copy of such statement to each Lender.
16.18 Several Obligations; No Liability. Notwithstanding that certain of
the UK Loan Documents now or hereafter may have been or will be executed only by
or in favor of Agent in its capacity as such, and not by or in favor of the
Lenders, any and all obligations
-88-
on the part of Agent (if any) to make any credit available hereunder shall
constitute the several (and not joint) obligations of the respective Lenders on
a ratable basis, according to their respective Commitments, to make an amount of
such credit not to exceed, in principal amount, at any one time outstanding, the
amount of their respective Commitments. Nothing contained herein shall confer
upon any Lender any interest in, or subject any Lender to any liability for, or
in respect of, the business, assets, profits, losses, or liabilities of any
other Lender. Each Lender shall be solely responsible for notifying its
Participants of any matters relating to the UK Loan Documents to the extent any
such notice may be required, and no Lender shall have any obligation, duty, or
liability to any Participant of any other Lender. Except as provided in Section
16.7, no member of the Lender Group shall have any liability for the acts or any
other member of the Lender Group. No Lender shall be responsible to Subsidiary
Borrower or any other Person for any failure by any other Lender to fulfill its
obligations to make credit available hereunder, nor to advance for it or on its
behalf in connection with its Commitment, nor to take any other action on its
behalf hereunder or in connection with the financing contemplated herein.
16.19 Legal Representation of Agent. In connection with the negotiation,
drafting, and execution of this Agreement and the other UK Loan Documents, or in
connection with future legal representation relating to loan administration,
amendments, modifications, waivers, or enforcement of remedies, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ LLP ("▇▇▇▇▇▇▇") only has represented and only shall represent
Foothill in its capacity as Agent and as a Lender. Each other Lender hereby
acknowledges that ▇▇▇▇▇▇▇ does not represent it in connection with any such
matters.
17. GENERAL PROVISIONS.
17.1 Effectiveness. This Agreement shall be binding and deemed effective
when executed by Subsidiary Borrower, Agent, and each Lender whose signature is
provided for on the signature pages hereof.
17.2 Section Headings. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each Section applies equally to this entire Agreement.
17.3 Interpretation. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed against the Lender Group or Subsidiary
Borrower, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
17.4 Severability of Provisions. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
-89-
17.5 Amendments in Writing. This Agreement only can be amended by a
writing signed by Agent (on behalf of the requisite Lenders) and Subsidiary
Borrower.
17.6 Counterparts; Telefacsimile Execution. This Agreement may be executed
in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other UK Loan Document mutatis
mutandis.
17.7 Revival and Reinstatement of Obligations. If the incurrence or
payment of the Obligations by Subsidiary Borrower or the transfer to the Lender
Group of any property should for any reason subsequently be declared to be void
or voidable under any law, including any state or federal law relating to
creditors' rights, including provisions of the Bankruptcy Code relating to
fraudulent conveyances, preferences, or other voidable or recoverable payments
of money or transfers of property (collectively, a "Voidable Transfer"), and if
the Lender Group is required to repay or restore, in whole or in part, any such
Voidable Transfer, or elects to do so upon the reasonable advice of its counsel,
then, as to any such Voidable Transfer, or the amount thereof that the Lender
Group is required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of the Lender Group related thereto, the liability
of Subsidiary Borrower automatically shall be revived, reinstated, and restored
and shall exist as though such Voidable Transfer had never been made.
17.8 Integration. This Agreement, together with the other UK Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
17.9 Confidentiality. Except as otherwise provided in this Agreement,
Agent and each of the Lenders shall not disclose any Confidential Information to
any Person without the consent of Subsidiary Borrower, other than (a) to Agent's
or a Lender's Affiliates and their officers, directors, employees, agents and
advisors and to actual or prospective assignees and participants, and then only
on a confidential basis; (b) as required by any law, rule, or regulation or
judicial process; and (c) as requested or required by any state, federal, or
foreign authority or examiner regulating Agent or such Lender. If Agent or a
Lender is required by any law, rule, or regulation or judicial process to
disclose any Confidential Information, to the extent permitted by applicable
law, it shall promptly give notice to Subsidiary Borrower so that Subsidiary
Borrower may seek a protective order or other appropriate remedy. If Subsidiary
Borrower does not obtain such a protective order or other
-90-
remedy, to the extent permitted by applicable law, Agent or the Lender, as
applicable, will endeavor to furnish only that portion of the Confidential
Information that it reasonably believes to be legally required.
[Signature page to follow.]
-91-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered as of the date first above written.
PALM EUROPE LIMITED,
a corporation organized under the laws of
England and Wales
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Title:
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent and as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ FINANCIAL, INC.,
a Delaware corporation, as Syndication Agent and as a
Lender
By: /s/ ▇▇▇▇▇▇ Financial, Inc.
Title: Vice President
THE CIT GROUP/BUSINESS CREDIT, INC.,
a New York corporation, as Documentation Agent and as a
Lender
By: /s/ The CIT Group/Business Credit, Inc.
Title: Vice President
-▇▇-
▇▇▇▇▇▇▇ ▇-▇
-----------
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT ("Assignment Agreement") is
entered into as of ________ between __________ ("Assignor") and ______________
("Assignee"). Reference is made to the Agreement described in Item 2 of Annex I
------ -------
annexed hereto (the "Loan Agreement"). Capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to them in the Loan
Agreement.
1. In accordance with the terms and conditions of Section 14 of the Loan
Agreement, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in and to
the Assignor's rights and obligations under the UK Loan Documents as of the date
hereof with respect to the Obligations owing to the Assignor, and Assignor's
portion of the Total Commitments, Commitments to make Advances, and the
sub-portion of Commitments to participate in Letters of Credit, all as specified
in Item 4.b and Item 4.c of Annex I. After giving effect to such sale and
-------- -------- -------
assignment, the Assignee's amount and portion of the Total Commitments,
Commitments to make Advances, and the sub-portion of Commitments to participate
in Letters of Credit will be as set forth in Item 4.d and Item 4.e of Annex I.
-------- -------- -------
2. The Assignor (a) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (b) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the UK Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the UK Loan Documents or any other instrument or
document furnished pursuant thereto; and (c) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Subsidiary Borrower or any of its Subsidiaries or the performance or observance
by Subsidiary Borrower or any of its Subsidiaries of any of its obligations
under the UK Loan Documents or any other instrument or document furnished
pursuant thereto.
3. The Assignee (a) confirms that it has received copies of the Loan
Agreement and the other UK Loan Documents, together with copies of the financial
statements referred to therein and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Assignment Agreement; (b) agrees that it will, independently and
without reliance, as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under the UK Loan Documents;
(c) confirms that it is eligible as an assignee under the terms of the Loan
Agreement; (d) appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under the UK Loan Documents as are
delegated to Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (e) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the UK Loan
Documents are
required to be performed by it as a Lender [and (f) attaches the forms
prescribed by the Internal Revenue Service of the United States certifying as to
the Assignee's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to the Assignee under
the Loan Agreement or such other documents as are necessary to indicate that all
such payments are subject to such rates at a rate reduced by an applicable tax
treaty.]
4. Following the execution of this Assignment Agreement by the Assignor and
Assignee, it will be delivered by the Assignor to the Agent for recording by the
Agent. The effective date of this Assignment Agreement (the "Settlement Date")
shall be the later of (a) the date of the execution hereof by the Assignor and
the Assignee, the payment by Assignor or Assignee to Agent for Agent's sole and
separate account a processing fee in the amount of $5,000, and the receipt of
any required consent of the Agent, and (b) the date specified in Item 5 of Annex
-----
I. Agent shall use its best efforts to provide Subsidiary Borrower written
-
notice of the sale and assignment contemplated by this Assignment Agreement
within five (5) days of the Settlement Date.
5. Upon recording by the Agent, as of the Settlement Date, (a) the Assignee
shall be a party to the Loan Agreement and, to the extent of the interest
assigned pursuant to this Assignment Agreement, have the rights and obligations
of a Lender thereunder and under the other UK Loan Documents, and (b) the
Assignor shall, to the extent of the interest assigned pursuant to this
Assignment Agreement, relinquish its rights and be released from its obligations
under the Loan Agreement and the other UK Loan Documents.
6. Upon recording by the Agent, from and after the Settlement Date, the
Agent shall make all payments under the Loan Agreement and the other UK Loan
Documents in respect of the interest assigned hereby (including, without
limitation, all payments or principal, interest and commitment fees (if
applicable) with respect thereto) to the Assignee. Upon the Settlement Date, the
Assignee shall pay to the Assignor the Assigned Share (as set forth in Item 4.b
--------
of Annex I) of the principal amount of any outstanding loans under the Loan
-------
Agreement and the other UK Loan Documents. The Assignor and Assignee shall make
all appropriate adjustments in payments under the Loan Agreement and the other
UK Loan Documents for periods prior to the Settlement Date directly between
themselves on the Settlement Date.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.
[Remainder of page left intentionally blank.]
2
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement and Annex I hereto to be executed by their respective officers
-------
thereunto duly authorized, as of the first date above written.
[NAME OF ASSIGNOR]
as Assignor
By:
------------------------------------------
Title:
---------------------------------------
[NAME OF ASSIGNEE]
as Assignee
By:
------------------------------------------
Title:
---------------------------------------
ACCEPTED THIS ____ DAY OF
-------------
FOOTHILL CAPITAL CORPORATION,
AS AGENT
By:___________________________
Title:________________________
3
ANNEX FOR ASSIGNMENT AND ACCEPTANCE
ANNEX I
1. Subsidiary Borrower: Palm Europe Limited
2. Name and Date of Loan Agreement:
Loan Agreement, dated as of November 30, 2001, among the
Subsidiary Borrower, the lenders signatory thereto as the
Lenders, Foothill Capital Corporation, a California corporation,
as the Arranger and Administrative Agent for the Lenders, ▇▇▇▇▇▇
Financial, Inc., as the Syndication Agent, and The CIT
Group/Business Credit, Inc., as the Documentation Agent.
3. Date of Assignment Agreement: ___________________
4. Amounts:
a. Assignor's Total Commitment $ ___________
i. Assignor's Commitment to make Advances $ ___________
ii. Sub-portion of Assignor's Commitment to participate
in Letters of Credit $ ___________
b. Assigned Share of Total Commitment ___________%
i. Assigned Share of Assignor's Commitment to make Advances ___________%
ii. Assigned Share of sub-portion of Assignor's Commitment
to participate in Letters of Credit ___________%
c. Assigned Amount of Total Commitment $ ___________
i. Assigned Amount of Assignor's Commitment to make
Advances $ ___________
ii. Assigned Amount of sub-portion of Assignor's Commitment
to participate in Letters of Credit $ ___________
d. Assignee's Total Commitment $ ___________
i. Assignee's Commitment to make Advances $ ___________
ii. Sub-portion of Assignee's Commitment to participate
in Letters of Credit $ ___________
e. Assignee's Share of Total Commitments ___________%
i. Assignee's Share of Commitment to make Advances ___________%
ii. Assignee's Share of Commitment to participate in
Letters of Credit ___________%
4
5. Settlement Date: ______________________
6. Notice and Payment Instructions, etc.
Assignee: Assignor:
______________________________ ________________________________
______________________________ ________________________________
______________________________ ________________________________
7. Agreed and Accepted:
[ASSIGNOR] [ASSIGNEE]
By:___________________________ By:_____________________________
Title:________________________ Title:__________________________
Accepted:
FOOTHILL CAPITAL CORPORATION, AS AGENT
By:_______________________________
Title:____________________________
5
EXHIBIT B-1
(Form of Borrowing Base Certificate)
Foothill Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The undersigned, the chief financial officer of Palm Europe
Limited, a company organized under the laws of England and Wales
("Subsidiary Borrower"), pursuant to Section 6.2 of that certain
-----------
Loan Agreement, dated as of November 30, 2001 (the "Loan
Agreement"), entered into by Subsidiary Borrower, the lenders
signatory thereto as the Lenders, Foothill Capital Corporation, a
California corporation, as arranger and administrative agent for
the Lenders ("Agent"), ▇▇▇▇▇▇ Financial, Inc., a Delaware
corporation, as the Syndication Agent, and The CIT Group/Business
Credit, Inc., a New York corporation, as the Documentation Agent,
hereby certifies to Agent that the following items, calculated in
accordance with the terms and definitions set forth in the Loan
Agreement for such items are true and correct, and that
Subsidiary Borrower is in compliance with and, after giving
effect to any currently requested Loans, will be in compliance
with the terms, conditions, and provisions of the Loan Agreement.
All initially capitalized terms used in this Borrowing Base
Certificate have the meanings set forth in the Loan Agreement
unless specifically defined herein.
Effective Date of Calculation:____________________________
A. Borrowing Base Calculation
1. Accounts:
a. (1) 75% of the amount of Eligible Accounts
(as detailed on Schedule A.1 attached hereto
------------
and incorporated herein by this reference): $_________________
(2) Dilution Reserve: $_________________
(3) Item 1(a)(1) minus Item 1(a)(2): $_________________
-----
b. 83.3% of the amount of Collections with respect
to Accounts for the immediately preceding 90 day
period: $_________________
c. The lesser of Item 1(a) and Item 1(b): $_________________
2. Reserves established by Agent under Section 2.1(b) of
--------------
the Loan Agreement: $_________________
3. Borrowing Base:
Item 1 minus Item 2= $_________________
-----
B. AVAILABILITY CALCULATION
1. Maximum Permitted Advances:
a. Maximum Subsidiary Revolver Amount:
(i) An amount equal to: $ 20,000,000
(ii) Domestic Revolver Usage: $_________________
(iii) Irish Loan Usage: $_________________
-2-
(iv) Item 1(a)(ii) plus Item 1(a)(iii): $_________________
----
(v) Item 1(a)(iv) minus $130,000,000 (if a negative
-----
number insert 0): $_________________
(vi) Item 1(a)(i) minus Item 1(a)(v): $_________________
-----
b. Letter of Credit Usage: $_________________
Item 1(a)(vi) minus Item 1(b)= $_________________
-----
2. Advances Permitted Under Borrowing Base:
a. Borrowing Base (from Section A, Item 3): $_________________
--------- ------
b. Letter of Credit Usage: $_________________
Item 2(a) minus Item 2(b)= $_________________
-----
3. Availability:
a. Permitted Advances:
(The lesser of Item 1 and Item 2) $_________________
b. Aggregate amount of outstanding Advances: $_________________
Item 3(a) minus Item 3(b)= $_________________
-----
[Signature page follows.]
- 3 -
The undersigned hereby certifies that all of the foregoing is true and
correct as of the effective date of the calculations set forth above and that
such calculations have been made in accordance with the requirements of the Loan
Agreement.
PALM EUROPE LIMITED,
a company organized under the laws of England
and Wales, as Subsidiary Borrower
By:
-----------------------------------------
Title:
--------------------------------------
Schedule A.1
------------
(Eligible Accounts)
EXHIBIT L-1
-----------
FORM OF LIBOR NOTICE
Foothill Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Business Finance Division Manager
---------------------------------
Ladies and Gentlemen:
Reference hereby is made to that certain Loan Agreement, dated as of
November 30, 2001 (the "Loan Agreement"), among Palm Europe Limited, a company
--------------
organized under the laws of England and Wales ("Subsidiary Borrower"), the
-------------------
lenders signatory thereto as the Lenders, Foothill Capital Corporation, a
California corporation, as the arranger and administrative agent for the Lenders
(the "Agent"), ▇▇▇▇▇▇ Financial, Inc., a Delaware corporation, as the
-----
Syndication Agent, and The CIT Group/Business Credit, Inc., a New York
corporation, as the Documentation Agent. Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the Loan
Agreement.
This LIBOR Notice represents Subsidiary Borrower's request to elect the
LIBOR Option with respect to outstanding Advances in the amount of $____________
(the "LIBOR Rate Advance")[, and is a written confirmation of the telephonic
notice of such election given to Agent].
Such LIBOR Rate Advance will have an Interest Period of [1, 2, or 3]
month(s) commencing on ________________.
This LIBOR Notice further confirms Subsidiary Borrower's acceptance, for
purposes of determining the rate of interest based on the LIBOR Rate under the
Loan Agreement, of the LIBOR Rate as determined pursuant to the Loan Agreement.
Subsidiary Borrower represents and warrants that (i) as of the date hereof,
each representation or warranty contained in or pursuant to any UK Loan
Document, any agreement, instrument, certificate, document or other writing
furnished at any time under or in connection with any UK Loan Document, and as
of the effective date of any advance, continuation or conversion requested above
is true and correct in all material respects (except to the extent any
representation or warranty expressly related to an earlier date), (ii) each of
the covenants and agreements contained in any UK Loan Document have been
performed (to the extent required to be performed on or before the date hereof
or each such effective date), and (iii) no Default or Event of Default has
occurred and is continuing on the date hereof, nor will any thereof occur after
giving effect to the request above.
Dated:
-------------------------------------
PALM EUROPE LIMITED,
a company organized under the laws of England
and Wales, as Subsidiary Borrower
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Acknowledged by:
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
2
SCHEDULE C-1
------------
COMMITMENTS
================================================================================
LENDER TOTAL COMMITMENT
================================================================================
FOOTHILL CAPITAL CORPORATION $ 6,666,666.67
================================================================================
▇▇▇▇▇▇ FINANCIAL, INC. $ 6,666,666.67
================================================================================
THE CIT GROUP/BUSINESS CREDIT, INC. $ 6,666,666.67
================================================================================
ALL LENDERS $20,000,000.00
================================================================================
SCHEDULES AND EXCEPTIONS FOR
PALM EUROPE LIMITED/FOOTHILL CAPITAL CORPORATION
Schedule D-1 Designated Account
Account#[*] at the Designated Account Bank
Schedule D-2 Designated Account Bank
[*]
Schedule P-3 Permitted Liens
The Eligible Inventory locations listed on Schedule E-1.
Equipment Leases - NONE
-----------------------
Schedule R-1 Real Property Collateral
None
Schedule 2.7(a) UK Cash Management Banks
Palm Europe Limited
[*]
Schedule 5.5 Locations of Inventory and Equipment
The Eligible Inventory locations listed below are owned by third parties and,
therefore, Inventory at such locations may be subject to warehousemen liens.
INVENTORY LOCATIONS
-------------------
NONE.
EQUIPMENT LOCATIONS
-------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇
[*]
Schedule 5.7 Chief Executive ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇
Schedule 5.8(b) Capitalization of Subsidiary Borrower
Palm Europe Limited is a corporation organized under the laws of England. As
of 6/1/01, authorized share capital in Pounds Sterling 100,000, divided into
100,000 ordinary shares of 1 Pound Sterling each, of which all are issued. All
issued share capital is owned by Palm Ireland Investment.
Schedule 5.8(c) Capitalization of Subsidiary Borrower's Subsidiaries
Palm Europe Limited - Branches and Subsidiaries (as of September 25, 2001)
----------------------------------------------------------------------------------------------------------------
Entity Name Country Type of Entity Authorized Capital Issued Capital
----------------------------------------------------------------------------------------------------------------
Palm Europe Limited , United Arab Branch Not applicable Not applicable
(Mid-East Branch) Emirates
----------------------------------------------------------------------------------------------------------------
Palm France SAS France Subsidiary FF 250,000 divided See authorized
into 2,500 shares with capital; entire
a par value of FF 100 capital issued to
each/1/ Palm Europe Limited
----------------------------------------------------------------------------------------------------------------
Palm Germany GmbH Germany Subsidiary EUR 25,000 EUR 25,000, issued
to Palm Europe
Limited
----------------------------------------------------------------------------------------------------------------
Palm Europe Limited Italy Branch Not applicable Not applicable
(Italy Branch)/2/
----------------------------------------------------------------------------------------------------------------
Palm Benelux B.V. The Netherlands Subsidiary EUR 100,000 EUR 20,000; issued
to Palm Europe
Limited
----------------------------------------------------------------------------------------------------------------
Palm Europe Limited Spain Branch Not applicable Assigned capital
Sucursal en Espana 2,000,000 Spanish
Pesetas/3/
----------------------------------------------------------------------------------------------------------------
Palm Nordic AB Sweden Subsidiary SEK 100,000 1,000 shares with a
nominal value of SEK
100 each
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Palm Europe Limited Switzerland Branch Not applicable Not applicable
(Zurich Branch)
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Further, Palm Europe Limited holds one share in Palm Mexico S.A. de C.V.
(49,999 shares are being held by Palm, Inc.)
_________________________
/1/ needs to be converted to EURO; will be done in Annual General Meeting
/2/ a subsidiary is currently in the process of establishment; business of
branch may be transferred to new subsidiary
/3/ please note that this is a branch, the capital is a capital contribution
of 2,000,000 Spanish Pesetas
Schedule 5.10 Litigation
NONE
Schedule 5.18 Demand Deposit Accounts
Palm Europe Limited
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[*]
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Schedule 5.20 Permitted Indebtedness
Equipment Leases
----------------
NONE
Letters of Credit
-----------------
Palm Europe Limited
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Issuer Letter of Credit # Purpose/Country Currency/Amount
-------------------------------------------------------------------------------------------------------
[*] [*] VAT/France EUR 91,469.41
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[*] [*] Car Lease/France EUR 69,188.33
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[*] [*] Car Lease/Netherlands EUR 2,949.57
-------------------------------------------------------------------------------------------------------
[*] [*] Car Lease/Germany EUR 33,233.97
-------------------------------------------------------------------------------------------------------
[*] [*] Car Lease/Germany EUR 3,834.69
-------------------------------------------------------------------------------------------------------
[*] [*] Car Lease/Germany EUR 3,834.69
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[*] [*] Customs Import/UK GBP 100,000.00
-------------------------------------------------------------------------------------------------------
[*] [*] VAT/Belgium EUR 16,261.00
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Schedule 6.7. Taxes
Palm Europe Limited
NONE
Schedule 7.6 Guarantees
.. Additional guaranties entered into prior to the date hereof in the ordinary
course of Borrower's business of obligations incurred by Subsidiaries in
the ordinary course of business, which guaranties are not, in the
aggregate, a material obligation of Borrower.