EXHIBIT 10.1
FACILITY AGREEMENT
DATED 12 MAY 1998
MULTICURRENCY CREDIT FACILITY
up to DM225,000,000
THE DERBY CYCLE CORPORATION AND OTHERS
as Borrowers and/or Guarantors
CHASE MANHATTAN PLC
as Arranger
THE FINANCIAL INSTITUTIONS
NAMED HEREIN
as Banks
CHASE MANHATTAN INTERNATIONAL LIMITED
as Facility Agent
CHASE MANHATTAN INTERNATIONAL LIMITED
as Security Agent
Dibb ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
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Tel: ▇▇▇▇ ▇▇ ▇▇ ▇▇
Fax: ▇▇▇▇ ▇▇▇ ▇▇▇▇
CONTENTS
1. INTERPRETATION..................................................... 1
1.1 Definitions................................................... 1
1.2 Financial Terms............................................... 29
1.3 Construction.................................................. 35
1.4 Relationship with the Intercreditor Agreement................. 36
2. THE FACILITY....................................................... 37
2.1 The Facility.................................................. 37
2.2 Nature of Banks' obligations and rights....................... 38
2.3 Nature of Borrowers' rights and obligations hereunder......... 38
2.4 Bank Accession Notice......................................... 39
2.5 Maximum Total Commitments..................................... 40
3. PURPOSE OF FACILITIES.............................................. 40
4. CONDITIONS PRECEDENT TO FIRST UTILISATION.......................... 40
5. CONDITIONS PRECEDENT TO EACH UTILISATION BY
WAY OF ADVANCES AND STANDBY L/CS................................... 41
6. UTILISATION OF THE FACILITIES...................................... 42
6.1 Delivery of a Drawdown Request............................... 42
6.2 Completion of Drawdown Request............................... 42
6.3 Amount of each Bank's participation in an Advance............ 43
6.4 Delivery of a Standby L/C Request............................ 43
6.5 Completion of Standby L/C Request............................ 44
6.6 Issuing of Standby L/Cs...................................... 45
6.7 Facility Agent's Authority................................... 45
6.8 Copy of Standby L/C.......................................... 46
6.9 No Enquiry................................................... 46
6.10 Definitions.................................................. 46
6.11 Calculation.................................................. 52
6.12 Determination................................................ 52
6.13 Undrawn amount............................................... 52
7. ANCILLARY FACILITIES............................................... 53
7.1 Ancillary Facilities.......................................... 53
7.2 Operation of Ancillary Facilities............................. 55
8. INTEREST........................................................... 57
8.1 Standby L/C................................................... 57
8.2 Interest rate................................................. 57
8.3 Due date...................................................... 57
8.4 Duration...................................................... 57
8.5 Notification of LIBOR by Facility Agent....................... 57
9. DEFAULT INTEREST 58
9.1 Failure to Pay.............................................. 58
9.2 Rate........................................................ 58
9.3 Default Interest Period..................................... 58
9.4 Unexpired Portion........................................... 58
10. MARKET DISRUPTION.................................................. 58
10.1 Disruption events........................................... 58
10.2 Effect...................................................... 59
11. REPAYMENT, PREPAYMENT AND CANCELLATION............................. 60
11.1 Reduction of the Facility................................... 60
11.2 Repayment of Advances....................................... 60
11.3 Facility Agent to notify Banks of demand.................... 61
11.4 L/C indemnity............................................... 61
11.5 Banks' Discretion........................................... 61
11.6 Voluntary cancellation...................................... 61
11.7 Mandatory Prepayment on Listing............................. 62
11.8 Prepayment Fee.............................................. 63
11.9 Cancellation and Prepayment of a Bank's Revolving
Commitment and Standby L/C Commitment....................... 63
11.10 Notices of prepayment and cancellation...................... 64
11.11 Notification of Bank(s)..................................... 64
11.12 Only method................................................. 64
11.13 European Economic and Monetary Union........................ 64
12. PARTIAL PAYMENTS................................................... 67
13. PAYMENTS........................................................... 67
13.1 To Facility Agent........................................... 67
13.2 Distribution by the Agents.................................. 68
13.3 Currency.................................................... 69
13.4 Set-off and counterclaim.................................... 70
14. TAXES.............................................................. 71
14.1 Payment of Taxes............................................ 71
14.2 Gross-up.................................................... 71
14.3 Tax indemnity............................................... 71
14.4 Notification of claims...................................... 71
14.5 Tax receipts................................................ 72
14.6 Tax Saving.................................................. 72
14.7 U.S Taxation-delivery of forms and statements............... 73
14.8 Double tax-treaties......................................... 74
14.9 Qualifying Bank............................................. 74
15. INCREASED COSTS.................................................... 74
15.1 Indemnity for increased costs............................... 74
15.2 Exceptions.................................................. 75
15.3 Notification by Bank........................................ 76
15.4 Regulation D Compensation................................... 76
16. ILLEGALITY......................................................... 76
16.1 Illegality in relation to Advances.......................... 76
16.2 Illegality in relation to Standby L/Cs...................... 77
17. MITIGATION......................................................... 77
17.1 Mitigation.................................................. 77
17.2 Costs and Expenses of Mitigation............................ 78
18. REPRESENTATIONS AND WARRANTIES..................................... 79
18.1 General representations and warranties...................... 79
18.2 Repetition of representations and warranties................ 90
19. UNDERTAKINGS....................................................... 91
19.1 Information undertakings.................................... 91
19.2 Form of financial statements................................ 97
19.3 Variation of financial undertakings......................... 98
19.4 Positive undertakings....................................... 98
19.5 Negative undertakings....................................... 109
20. FINANCIAL UNDERTAKINGS............................................. 122
21. EVENTS OF DEFAULT.................................................. 130
21.1 The Events of Default....................................... 130
21.2 Acceleration................................................ 136
22. ADDITIONAL BORROWERS............................................... 137
23. GUARANTEES......................................................... 137
23.1 Guarantee................................................... 137
23.2 Continuing Guarantee........................................ 139
23.3 Reinstatement............................................... 139
23.4 Waiver of Defences.......................................... 139
23.5 Immediate Recourse.......................................... 140
23.6 Preservation of Rights...................................... 140
23.7 Non-competition............................................. 141
23.8 Additional Security......................................... 141
23.9 Certificate................................................. 142
24. RELEASE OF GUARANTORS AND SECURITY................................. 142
24.1 Guarantors.................................................. 142
24.2 Assets...................................................... 142
24.3 Conditions for Release...................................... 142
24.4 Release of Group Members.................................... 143
25. INDEMNITIES........................................................ 144
25.1 Indemnifiable events........................................ 144
25.2 Stamp duty.................................................. 144
26. FEES............................................................... 145
26.1 Commitment fee.............................................. 145
26.2 Utilisation Fee............................................. 145
26.3 Applicable Rate............................................. 145
26.4 Calculation................................................. 146
26.5 Payment of Utilisation Fee.................................. 146
26.6 Agency fees................................................. 146
26.7 Arrangement fee............................................. 146
27. COSTS AND EXPENSES................................................. 146
27.1 Initial Costs............................................... 147
27.2 Amendments.................................................. 147
27.3 Protection, enforcement, etc................................ 147
28. THE AGENTS AND THE ARRANGER........................................ 148
28.1 Appointment of the Agents................................... 148
28.2 Duties of the Agents........................................ 149
28.3 Exculpatory provisions...................................... 150
28.4 Assumptions................................................. 150
28.5 Agents and Arranger not responsible to other Parties........ 151
28.6 Delegation and advisers..................................... 151
28.7 Indemnity................................................... 151
28.8 Resignation of the Agents................................... 151
28.9 Separate entity............................................. 152
28.10 Reliance.................................................... 153
28.11 Credit approval............................................. 153
28.12 Tax Confirmation............................................ 153
28.13 Miscellaneous provisions.................................... 153
29. TRANSFERS.......................................................... 154
29.1 Obligors.................................................... 154
29.2 Banks....................................................... 154
29.3 Time of transfer............................................ 155
29.4 Administration fee.......................................... 155
29.5 Additional amounts payable to transferee.................... 155
29.6 Disclosure of information................................... 156
30. REDISTRIBUTION PROVISIONS.......................................... 156
30.1 Redistributions............................................. 156
30.2 Repayment of a Discharged Amount............................ 157
30.3 Exceptions.................................................. 157
31. CALCULATIONS AND EVIDENCE OF DEBT.................................. 158
31.1 Calculations................................................ 158
31.2 Financial Accounts.......................................... 158
31.3 Control account............................................. 158
31.4 Standby L/C Accounts........................................ 158
31.5 Actual amount received...................................... 159
31.6 Prima facie evidence........................................ 159
31.7 Certificates and determinations............................. 160
31.8 Reference Banks............................................. 160
31.9 Unavailability of ECU/ecu................................... 160
32. AMENDMENTS AND WAIVERS............................................. 161
32.1 Majority Banks.............................................. 161
32.2 All Banks................................................... 161
32.3 Super Majority Banks........................................ 161
32.3 All Parties................................................. 162
32.4 The Agents.................................................. 162
33. NOTICES............................................................ 162
33.1 Method of delivery.......................................... 162
33.2 Addresses................................................... 162
33.3 Agents' details............................................. 162
33.4 Receipt of notices.......................................... 163
33.5 Language.................................................... 163
34. PARTIAL INVALIDITY................................................. 163
35. REMEDIES AND WAIVERS............................................... 164
36. COUNTERPARTS....................................................... 164
37. SECURITY........................................................... 164
38. JURISDICTION....................................................... 164
38.1 Courts of England........................................... 164
38.2 Non-exclusivity............................................. 164
38.3 Service of process agent.................................... 165
38.4 Non-convenience of forum.................................... 165
39. GOVERNING LAW...................................................... 165
SCHEDULE 1.............................................................. 166
THE BORROWERS...................................................... 166
SCHEDULE 2.............................................................. 167
THE GUARANTORS..................................................... 167
SCHEDULE 3.............................................................. 169
THE BANKS.......................................................... 169
SCHEDULE 4.............................................................. 170
ACCESSION AGREEMENT................................................ 170
SCHEDULE 5
DOCUMENTS TO ACCOMPANY ADDITIONAL
BORROWER/GUARANTOR ACCESSION AGREEMENT............................. 173
SCHEDULE 6.............................................................. 175
CONDITIONS PRECEDENT............................................... 175
SCHEDULE 7.............................................................. 183
Part 1............................................................. 183
FORM OF DRAWDOWN REQUEST........................................... 183
Part 2............................................................. 185
FORM OF STANDBY L/C REQUEST........................................ 185
Part 3............................................................. 187
FORM OF STANDBY L/C................................................ 187
SCHEDULE 8.............................................................. 195
NOVATION CERTIFICATE............................................... 195
SCHEDULE 9.............................................................. 199
ADDITIONAL COSTS................................................... 199
SCHEDULE 10............................................................. 201
COMPLIANCE CERTIFICATE............................................. 201
SCHEDULE 11............................................................. 203
MATERIAL GROUP MEMBERS............................................. 203
SCHEDULE 12............................................................. 204
DESCRIPTION OF ECU................................................. 204
SCHEDULE 13............................................................. 205
FORM OF BANK ACCESSION NOTICE...................................... 205
SCHEDULE 14............................................................. 207
SECURITY DOCUMENTS................................................. 207
THIS FACILITY AGREEMENT is made the 12th day of May 1998
BETWEEN:
(1) THE DERBY CYCLE CORPORATION a company incorporated in Delaware, the United
States of America, having its principal office at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "COMPANY");
(2) THE COMPANIES identified as Borrowers in Schedule 1;
(3) THE COMPANIES identified as Guarantors in Schedule 2;
(4) CHASE MANHATTAN PLC (the "ARRANGER");
(5) THE FINANCIAL INSTITUTIONS identified as Banks in Schedule 3;
(6) CHASE MANHATTAN INTERNATIONAL LIMITED (the "FACILITY AGENT"); and
(7) CHASE MANHATTAN INTERNATIONAL LIMITED (the "SECURITY AGENT").
WHEREAS
The Banks have agreed, subject to the terms and conditions of this Agreement, to
provide a revolving credit facility of up to DM225,000,000 (or the equivalent
thereof in other currencies) of which up to DM65,000,000 may be utilised by way
of Ancillary Facilities (less amounts utilised by the issuance of Standby L/Cs
under the Standby L/C Facility) and DM15,000,000 (or the equivalent in other
currencies) may be utilised by the issuance of Standby L/Cs.
PART 1
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement:
"ACCEDING BANK" means any financial institution that is to provide an Ancillary
Facility to one or more members of the South African Group that has executed a
Bank Accession Notice and the Company has delivered to the Facility Agent each
of the documents required to be provided therewith each in a form satisfactory
to the Facility Agent.
"ACCESSION AGREEMENT" means:
(a) when designated "BORROWER", an agreement substantially in the form of
Schedule 4 made pursuant to Clause 22 (together the "BORROWER ACCESSION
AGREEMENTS");
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(b) when designated "GUARANTOR", an agreement substantially in the form of
Schedule 4 made pursuant to Clauses 19.4(d), 19.4(e), 19.4(f) or 19.4(g)
(together the "GUARANTOR ACCESSION AGREEMENTS"); and
(c) without any such designation, a Borrower Accession Agreement or a Guarantor
Accession Agreement and "ACCESSION AGREEMENTS", without any such
designation means some or all (as the context requires) of the Borrower
Accession Agreements and the Guarantor Accession Agreements together.
"ACCOUNTANT'S REPORT" means each of the reports dated on or before Closing
prepared by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ on the Group as a result of separate letters of
instruction from each of the Company and the Arranger in relation thereto.
"ACCOUNTS" has the meaning given to such term in Clause 6.10.
"ACCOUNTING DATE" means each 31 December regardless of which day it falls upon,
and each 31 March, 30 June, 30 September, provided that if any such date does
not fall on a Sunday, then the date which is the Sunday immediately prior to or
after such date in accordance with the Company's usual accounting practice as
notified to the Facility Agent prior to the date of this Agreement.
"ACCOUNT DEBTOR" has the meaning given to such term in Clause 6.10.
"ACCOUNTING PERIOD" in relation to any Person means any period of approximately
one month, three months or one year for which Financial Accounts or, as the case
may be, Pre-Closing Proforma Accounts of such Person are required to be prepared
for the purposes of this Agreement ending, in the case of each quarterly and
each one year period, on an Accounting Date.
"ACQUIRED ASSETS" means the shares in the capital of the Subsidiaries of the
Company immediately following the Recapitalisation.
"ADDITIONAL BORROWER" means any entity which becomes party to this Agreement as
a Borrower pursuant to a Borrower Accession Agreement.
"ADDITIONAL COST" in relation to each Advance or Overdue Amount denominated in
Sterling means, for the Term relating to that Advance or, as the case may be,
Default Interest Period relating to that Overdue Amount, the cost as calculated
by the Facility Agent in accordance with Schedule 9 imputed to each Bank
participating in such Advance or Overdue Amount through a Facility Office in the
United Kingdom of compliance with the mandatory liquid assets requirements of
the Bank of England during that Term, or as the case may be, that Default
Interest Period expressed as a percentage rate per annum.
"ADDITIONAL GUARANTOR" means any entity which becomes a party hereto as a
Guarantor pursuant to a Guarantor Accession Agreement or otherwise provides a
Guarantee.
"ADDITIONAL PAYMENT" means amounts payable by the Company to the Sellers
pursuant to Clause 16.4 of the Recapitalisation Agreement.
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"ADJUSTED AVAILABLE AMOUNT" has the meaning given to such term in Clause 6.10.
"ADJUSTED BORROWING BASE" has the meaning given to such term in Clause 6.10.
"ADVANCE" means the principal amount of each borrowing under this Agreement
under the Revolving Facility or the principal amount of each such borrowing
outstanding from time to time, as the context requires.
"AFFILIATE" means, in relation to a body corporate, any of its Holding Companies
or Subsidiaries or any other Subsidiary of any of its Holding Companies.
"AGENT" means:
(a) when designated "FACILITY", includes any of its successors pursuant to
Clause 28.8;
(b) when designated "SECURITY", includes any of its successors pursuant to
Clause 28.8 and any corresponding provision of any Security Document; and
(c) without any such designation, the Facility Agent or the Security Agent, as
the context requires, and "AGENTS" without any such designation means one
or more of the Facility Agent and the Security Agent, as the context
requires.
"ANCILLARY BANK" means any Bank which becomes an Ancillary Bank by the operation
of Clause 7.
"ANCILLARY COMMITMENT" means in relation to an Ancillary Bank, the maximum
amount (actual or contingent) from time to time of the Ancillary Facilities to
be made available by that Ancillary Bank which has been authorised as such under
Clause 7.1(a) to the extent not cancelled under this Agreement.
"ANCILLARY OUTSTANDING" means, at any time, and with respect to any Ancillary
Bank, the Deutschmark Equivalent of all the following amounts outstanding at
such time under the Ancillary Facilities of that Ancillary Bank then in force:
(a) all amounts of principal then outstanding under any overdraft, BACS, cheque
drawing or other current account facilities;
(b) twenty per cent of the gross amounts payable to that Ancillary Bank under
any contracts (for a period not exceeding eighteen months) entered into for
the provision of spot or forward foreign exchange facilities or the
purchase of foreign exchange options for a period not exceeding eighteen
months (in each case in accordance with the Approved Hedging Programme) (or
such other amount as such Ancillary Bank may agree with the Facility Agent
and the Group Member to whom the relevant facilities are made available in
accordance with its usual practice for calculating exposure for similar
facilities);
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(c) the maximum face amount (excluding amounts stated to be in respect of
interest) of all guarantees, bonds and letters of credit then outstanding
under any guarantee, bonding or letter of credit facilities; and
(d) in respect of any other facility or financial accommodation such other
amount as the relevant Ancillary Bank may (acting reasonably and in
consultation with the Facility Agent and the Obligors' Agent) determine
fairly represents the aggregate exposure at such time of the Ancillary Bank
providing the same.
"AON INSURANCE REPORT" means the insurance review of Derby Bicycle Group
prepared by AON Mergers and Acquisitions Group dated February 1998.
"AON PENSIONS REPORT" means the employee benefits due diligence report on the
Derby Bicycle Group prepared by AON Consulting dated 4 December 1997.
"APPLICABLE ACCOUNTING PRINCIPLES" means, for the purposes of the preparation
and/or audit of the Pre-Closing Proforma Accounts, the Accountant's Report and
any Financial Accounts (whether combined, consolidated or unconsolidated) of the
Company and/or the Group, to be delivered under this Agreement, the accounting
principles and practices generally accepted in the United States of America, and
for Group Members other than the Company the accounting principles and practices
generally accepted in their respective country of incorporation and in each
case, approved by the relevant accounting standards board or other applicable
authority and which are the same as the accounting principles and practices
applied in the preparation of the Business Plan and any variation of such
accounting principles and practices which has been agreed in writing by the
Majority Banks.
"APPROVED BANK" means a Bank whose long term unsecured unsubordinated debt
rating is at least A2 (▇▇▇▇▇'▇) or A (Standard & Poors) that has been given and
has acknowledged all notices reasonably required by the Facility Agent and in
substantially the agreed form and/or required by the Security Documents and
through a branch situated in Ireland, England, Germany or the Netherlands (as
applicable) or through such other branch of a Bank situated in a country not
specifically mentioned above provided that the Facility Agent has, in respect of
any such other branch, previously given its approval to such arrangement prior
thereto.
"APPROVED HEDGING PROGRAMME" means, as at the date of this Agreement, the paper
so entitled, in the agreed form provided by the Company for the purposes of
satisfying paragraph 27 of Schedule 6, as the same may be amended from time to
time with the prior written consent of the Facility Agent.
"APPROVED PROVISIONING PROCEDURE" means, the paper so entitled in the agreed
form provided by the Company for the purposes of satisfying paragraph 36 of
Schedule 6, as the same may be amended from time to time with the prior written
consent of the Facility Agent.
"ARTICLES OF ASSOCIATION" means, in relation to any Group Member, its articles
of association or by-laws (or equivalent in the country of its incorporation) as
the same are amended from time to time.
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"AUDITORS" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (or any successor through merger) and/or any
other firm of independent public accountants of international standing approved
by the Facility Agent, which is appointed to audit the consolidated annual
accounts of the Company.
"AUTHORISED SIGNATORY" in relation to any Obligor and any communication to be
made or document to be executed or certified by that Obligor means, at any time,
any Person:
(a) who is at such time duly authorised by a resolution of the board of
directors of that Obligor or by virtue of his appointment by that Obligor
to a particular office to make that communication or to execute or certify
that document on behalf of that Obligor and in respect of whom the Facility
Agent has received a certificate of a director or the secretary of that
Obligor setting out the name and signature of that Person and confirming
that Person's authority so to act; and
(b) in respect of whom no notice has been received by the Facility Agent from
that Obligor to the effect that that Person is no longer an Authorised
Signatory of that Obligor.
"AVAILABILITY PERIOD" means:
(a) in respect of the Revolving Facility and the Standby L/C Facility, the
period from the opening of business in London on the date of this Agreement
to close of business in London on the day falling one month prior to the
Final Repayment Date or such later date as all the Banks may agree in
writing on or after the date hereof; and
(b) in respect of an Ancillary Facility, as the same is determined in
accordance with Clause 7.
"BANK" means each of the following:
(a) each Bank and each Ancillary Bank;
(b) each bank or other financial institution to which rights and/or obligations
under this Agreement are assigned or transferred pursuant to Clause 29.2 or
which assumes rights and obligations pursuant to a Novation Certificate;
(c) each Acceding Bank; and
(d) any successor or successors in title to any of the foregoing,
(together the "BANKS"), provided that upon (i) termination in full of all the
Revolving Commitment, the Standby L/C Commitment and the Ancillary Commitment of
any Bank, and (ii) irrevocable payment in full of all amounts which may be or
become payable to such Bank under the Senior Finance Documents, such Bank shall
not be regarded as being a Bank for the purposes of determining whether any
provision of any of the Senior Finance Documents requiring consultation with or
the consent or approval of or instructions from the Banks or the Majority Banks
has been complied with.
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"BANK ACCESSION NOTICE" means a notice to be delivered by any Acceding Bank to
the Facility Agent substantially in the form set out in part one of Schedule 13.
"BENEFICIARY" means, in respect of a Standby L/C, the Person in whose favour
such Standby L/C is issued.
"BLOCKED ACCOUNT(S)" means the account(s) denominated in Deutschmarks, Guilders,
Sterling and Dollars held at The Chase Manhattan Bank, Nos. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
22782103, 22782104 respectively in each case in the name of The Derby Bicycle
Group-Closing Account or such other account or accounts as the Arranger shall
nominate for this purpose.
"BORROWER" means each entity identified as a Borrower in Schedule 1 and each
Additional Borrower (together the "BORROWERS").
"BORROWING BASE" has the meaning given to such term in Clause 6.10.
"BORROWING BASE SUMMARY" has the meaning given to such term in Clause 6.10.
"BUSINESS DAY" means:
(a) a day (excluding a Saturday and Sunday) on which banks and foreign exchange
markets are open for business in London and Frankfurt; and
(b) (in respect of a day on which a payment or other transaction in an Optional
Currency is required under this Agreement) a day (not being a Saturday or
Sunday) on which banks and foreign exchange markets are also open for
business in the principal financial centre of the country of such Optional
Currency.
"BUSINESS PLAN" means the document dated on or about the date hereof in the
agreed form provided to the Facility Agent pursuant to paragraph 9 of Schedule 6
and identified by the Company and the Facility Agent as being the Business Plan.
"CANADIAN BORROWER" means any Borrower incorporated in Canada.
"CANADIAN DOLLARS" means the lawful currency for the time being of Canada.
"CASH" means any credit balances on any deposit, savings or current account with
a Bank and cash in hand.
"CASH COLLATERAL AMOUNT" has the meaning given to such term in Clause 6.10.
"CASH EQUIVALENT INVESTMENTS" means:
(a) debt securities denominated in Sterling issued by the Government of the
United Kingdom or Dollars issued by the Government of the United States of
America having not more than six months to final maturity which are not
convertible into any other form of security;
6
(b) debt securities (denominated in Dollars or an Optional Currency) which have
not more than 180 days to final maturity, are not convertible into any
other form of security, are rated at least P-1 (Moody's) or A-1 (Standard &
Poors) and are not issued or guaranteed by any Group Member;
(c) any cash deposits which have not more than a 90 day term denominated in
Sterling or Dollars; and
(d) such other securities (if any) as are approved as such in writing by the
Facility Agent,
Provided that in each case the debt securities, cash deposits, or other
securities (as referred to in paragraphs (a) to (d) inclusive above), are
beneficially owned by an Obligor and are deposited with an Approved Bank.
"CERTIFICATE OF INCORPORATION" means the amended and restated Certificate of
Incorporation of the Company.
"CERTIFIED COPY" means, in respect of any document, agreement or communication
to be delivered in connection with this Agreement, a copy thereof which has been
certified by an Authorised Signatory of the Person providing the document,
agreement or communication as being a true copy of the original or their duly
appointed solicitor or other legal counsel.
"CHIEF EXECUTIVE OFFICER" means the managing director of the Company from time
to time (being ▇▇▇▇ ▇. Finden-Crofts at Closing) or in his absence his deputy
(being an Authorised Signatory of the Company).
"CHIEF FINANCIAL OFFICER" means the Group Financial Controller of the Company
or, as the case may be, the Chief Financial Officer of the Company, (being ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ at Closing) or in his absence his deputy (being an Authorised
Signatory of the Company)..
"CLAUSE" refers, unless otherwise stated, to a clause of this Agreement.
"CLOSING" means the completion of the Recapitalisation.
"COMPLETION ACCOUNTS" means the accounts that are to be prepared by the Company
on a proforma basis in respect of the period commencing on 1 January 1998 and
ending on the date of such accounts containing a proforma balance sheet prepared
on the assumption that the Recapitalisation had taken effect, a profit and loss
statement and a cash flow of statement of the Group as at 3 May 1998.
"COMPLIANCE CERTIFICATE" means a Compliance Certificate in substantially the
same form as is set out at Schedule 10.
"DANGEROUS SUBSTANCE" means any radioactive, radiowave, electromagnetic,
microwave emissions and any natural or artificial substance (whether in the form
of a solid, liquid, gas or vapour) the generation, transportation, storage,
treatment, use or disposal of which (whether alone or in combination with any
other substance) including (without limitation) any controlled, special
hazardous, toxic, radioactive or dangerous waste or discharge, gives
7
rise to a risk of causing material harm to man or any other living organism or
materially damaging the Environment or public health or welfare.
"DEBENTURES" means each of the debentures governed by the laws of England
entered into by certain Group Members in favour of the Security Agent and
forming part of the Security Documents (each a "DEBENTURE").
"DEFAULT" means an Event of Default or a Potential Event of Default.
"DEFAULT INTEREST PERIOD" is defined at Clause 9.1.
"DERBY INTERNATIONAL" means Derby International Corporation S.A..
"DERBY L.L.C." means DC Cycle L.L.C..
"DEUTSCHMARKS" AND "DM" means the lawful currency for the time being of the
Federal Republic of Germany.
"DEUTSCHMARK AMOUNT" in relation to any Advance or Standby L/C means:
(a) (if denominated in Deutschmarks) the principal amount thereof; or
(b) (if denominated in an Optional Currency) the Deutschmark Equivalent of the
principal amount thereof calculated, in the case of an Advance not
denominated in Sterling, two Business Days prior to its Drawdown Date, in
the case of an Advance denominated in Sterling on its Drawdown Date and, in
the case of a Standby L/C, on the date that the Standby L/C Request
relating thereto was delivered to the Facility Agent under this Agreement.
"DEUTSCHMARK EQUIVALENT" in relation to an amount expressed or denominated in a
currency other than Deutschmarks means the equivalent thereof in Deutschmarks
converted at the Facility Agent's Spot Rate of Exchange on the date of the
relevant calculation.
"DFS" means Derby Finance S.a.r.l..
"DIRECTORS" means each of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇▇▇ ▇. Finden-Crofts, A. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (each a
"DIRECTOR").
"DISCLOSURE EXHIBITS" means the disclosure exhibits given in respect of the
Recapitalisation Agreement on or about the date of the Recapitalisation
Agreement in the agreed form together with all schedules, annexures and exhibits
thereto forming the "Disclosure Exhibits" referred to in the Recapitalisation
Agreement.
"DISCLOSURE LETTER" means the letter accompanying the Disclosure Exhibits.
"DOLLARS" and "$" means the lawful currency for the time being of the United
States of America.
8
"DORMANT COMPANY" means each Group Member which is not an Obligor, does not
trade (whether for its own account or for that of another), is not required to
make entries into its accounting records in accordance with Section 221 of the
Companies ▇▇▇ ▇▇▇▇ (or any equivalent legislation in the jurisdiction of
incorporation of such company) or, to the extent that there is no equivalent
legislation in the jurisdiction of incorporation of such company, would be a
Dormant Company if the principles enshrined in Section 221 of the Companies ▇▇▇
▇▇▇▇ were applied to it and does not hold or own (whether legally or
beneficially) any assets or property with a book value in excess of $10,000 (or
its equivalent in other currencies) other than amounts due from other Group
Members of no more than $50,000; or owe or have outstanding any liabilities with
a book value in excess of $10,000 (or its equivalent in other
currencies)(excluding liabilities owed to Obligors) Provided that,
notwithstanding the foregoing, a Group Member that holds any interest in any
Material Intellectual Property Right shall not be a Dormant Company.
"DRAWDOWN DATE" means, in respect of an Advance, the date such Advance is made,
or is proposed to be made, under this Agreement.
"DRAWDOWN REQUEST" means a request substantially in the form set out at Part 1
of Schedule 7.
"DUTCH BORROWER" means a Borrower incorporated in the Netherlands.
"DUTCH GUILDERS" AND "DFL" means the lawful currency for the time being of the
Kingdom of the Netherlands.
"ECU" is defined at Schedule 12.
"ELIGIBLE FINISHED GOODS" has the meaning given to such term in Clause 6.10.
"ELIGIBLE RECEIVABLES" has the meaning given to such term in Clause 6.10.
"ELIGIBLE RAW MATERIALS" has the meaning given to such term in Clause 6.10.
"ENCUMBRANCE" means any security, assignation in security, bond and floating
charge, mortgage, pledge, lien, charge, assignment for the purpose of providing
security, hypothecation, right in security, security interest or trust
arrangement for the purpose of providing security, and any other security
agreement or other arrangement having the effect of providing security
(including, without limitation, the deposit of monies or property with a Person
with the primary intention of affording such Person a right of set-off or lien).
"ENVIRONMENT" means all, or any of, the following media, the air (including,
without limitation, the air within buildings and the air within other natural or
man-made structures above or below ground), water (including, without
limitation, ground and surface water) and land (including, without limitation
surface and sub-surface soil).
"ENVIRONMENTAL CLAIM" means any claim by any Person:
9
(a) in respect of any loss or liability suffered or incurred by that Person as
a result of or in connection with any violation of Environment Law; or
(b) that arises as a result of or in connection with Environmental
Contamination and that could give rise to any remedy or penalty (whether
interim or final) that may be enforced or assessed by private or public
legal action or administrative order or proceedings including, without
limitation, any such claim that arises from injury to Persons, property or
natural resources.
"ENVIRONMENTAL CONTAMINATION" means each of the following and their
consequences:
(a) any material release, emission, leakage or spillage of any Dangerous
Substance at or from any site owned, occupied or used by any Group Member
into any part of the Environment; or
(b) any material accident, fire, explosion or sudden event at any site owned,
occupied or used by any Group Member which is directly or indirectly caused
by or attributable to any Dangerous Substance; or
(c) any other pollution of the Environment.
"ENVIRONMENTAL LAW" means all laws (including, without limitation, common law),
regulations, codes of practice, circulars, guidance notices and the like having
legal effect (whether in the United Kingdom, the United States of America or
elsewhere) concerning the protection of human health, the Environment, the
conditions of the work place or the generation, transportation, storage,
treatment or disposal of Dangerous Substances.
"ENVIRONMENTAL REPORTS" means each of the environmental reports prepared by ERM
dated December 1997 or January 1998 in relation to the Group and the ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇ Memorandum dated 16 December 1997 entitled "Summary of Material
Environmental Issues" (each an "ENVIRONMENTAL REPORT").
"ENVIRONMENTAL LICENCE" means any permit, licence, authorisation, consent or
other approval required by any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974 of the USA as
amended from time to time or any successor statute and any regulations
promulgated thereunder.
"ERISA AFFILIATE" means each Person (as defined in Section 3(9) of ERISA whether
or not incorporated, which is a Subsidiary of or under common control or would
be considered a single employer with any Obligor domiciled in the United States
within the meaning of section 414(b), (c), (m) or (o) of the IRC and regulations
promulgated under those sections or within the meaning of section 4001(b) of
ERISA.
"ESCROW LETTER" means the letter from the Facility Agent acknowledged by the
Company dated on or about the date hereof regarding the various payments to be
made at or about the Closing in respect of the Closing.
10
"EURO-DOLLAR RESERVE PERCENTAGE" means, for any day, that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System of the USA (or any successor), for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion Dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category or
extensions of credit or other assets which includes loans by a non-United States
of America office of any bank to United States of America residents).
"EVENT OF DEFAULT" means any one of the events specified in Clause 21.1.
"EXCHANGE AGREEMENT" means the exchange agreement executed and delivered or to
be executed and delivered (as the case may be) by Derby, L.L.C and Perseus Cycle
L.L.C pursuant to the terms of the Recapitalisation Agreement and in the form
exhibited thereto.
"EXCHANGE CONTROL APPROVAL" means in relation to any Obligor incorporated in The
Republic of South Africa a valid and current approval from the South African
Reserve Bank approving the borrowing and repayment of moneys by such Obligor
under the Senior Finance Documents to which it is expressed to be a party to be
paid in accordance therewith and the entry into guarantees by such Obligor as
contemplated in the Senior Finance Documents.
"EXECUTIVE" means any of ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇-▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ and
any replacement for any of them (together the "EXECUTIVES").
"EXECUTIVE OFFICER" means any of the Chief Executive Officer and the Chief
Financial Officer.
"EXISTING FINANCIAL INDEBTEDNESS" means the Financial Indebtedness of the
Company and its Subsidiaries immediately prior to Closing that is defined as
such in the Funds Flow Memorandum and which is identified therein as being
required to be repaid in full, and the commitment in respect thereof (if any) is
to be cancelled and reduced to zero at Closing.
"EXPIRY DATE" means, in relation to a Standby L/C, the date specified as such in
the Standby L/C Request relating thereto.
"FACILITY" means
(a) when designated "Revolving", the revolving credit facility referred to in
Clause 2.1;
(b) when designated "Ancillary", one of the ancillary facilities referred to in
Clause 2.1;
(c) when designated "Standby L/C", the standby letter of credit facility
referred to in Clause 2.1; and
(d) without any such designation, the Revolving Facility, the Ancillary
Facilities or the Standby L/C Facility as the context requires;
and the "FACILITIES" means the Revolving Facility, the Ancillary Facility and
the Standby L/C Facility taken together.
11
"FACILITY AGENT'S SPOT RATE OF EXCHANGE" with respect to any Optional Currency
on any day means the spot rate of exchange of the Facility Agent (as determined
by the Facility Agent based on market rates then prevailing and capable of being
obtained by the Facility Agent) for the purchase of the appropriate amount of
such Optional Currency with Deutschmarks in the London Foreign Exchange Market
in the ordinary course of business at or about 10.00 a.m. on the day in question
for delivery, if the Optional Currency is Sterling, on such day and, in all
other cases, two Business Days thereafter.
"FACILITY OFFICE" means, in respect of any Finance Party, the office through
which it will perform its obligations under this Agreement as notified to the
Facility Agent prior to it becoming a Finance Party or (unless otherwise agreed
by the Facility Agent) by five Business Days' notice.
"FEE LETTERS" means each of the letters referred to in Clause 26.6 and 26.7 in
relation to the agency fees and the arrangement fee respectively.
"FINAL REPAYMENT DATE" means the date falling 84 months after the date of this
Agreement.
"FINANCE DOCUMENTS" means, the Senior Finance Documents, the Note Documents, the
Recapitalisation Documents and any other document notified by the Facility Agent
(acting reasonably) to the Company as being a "Finance Document" (any such
document being a "Finance Document" from the date of the notification being
given in respect thereof by the Facility Agent) (each a "FINANCE DOCUMENT").
"FINANCE PARTY" means the Arranger, each Bank, the Security Agent and the
Facility Agent (together the "FINANCE PARTIES").
"FINANCIAL ACCOUNTS" means from time to time:
(a) the latest audited consolidated annual accounts of the Group;
(b) the latest unaudited consolidated quarterly accounts of the Group;
(c) the latest unaudited monthly management accounts of the Group;
(d) any other audited or unaudited consolidated or unconsolidated accounts or
management accounts (if any) of the Group or any Group Member; and
(e) in respect of any period prior to Closing, the Pre-Closing Proforma
Accounts of the Group for such period,
delivered or required to be delivered to the Facility Agent pursuant to this
Agreement, or such of those accounts as the context requires.
"FUNDS FLOW MEMORANDUM" means the flow of funds memorandum in the agreed form
prepared on behalf of the Company by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ containing details of the
flow of funds at Closing.
12
"GAZELLE" means Koninklijke Gazelle BV.
"GENERAL PROVISIONS" is defined in the Approved Provisioning Procedure.
"GERMANY" means the Federal Republic of Germany.
"GROUP" means the Company and its Subsidiaries from time to time.
"GROUP MEMBER" means, at any time, a member of the Group at such time.
"GUARANTEE" means:
(a) in relation to any UK Obligor or U.S. Obligor the form of guarantee set out
in Clause 23 of this Agreement; and
(b) in relation to any other Obligor the form of guarantee set out in Clause 23
of this Agreement or such other form of guarantee as the relevant Obligor
shall be required to provide in accordance with the terms of this Agreement
so as to give either:
(i) at least the same level of support as such Obligor would have provided
had such Obligor been able to become a party to this Agreement as a
result of having executed and delivered a duly completed Guarantor
Accession Agreement if to do so would not be contrary to applicable
laws; or
(ii) the maximum level of support as such Obligor may provide having regard
to the applicable laws.
"GUARANTOR" means each entity identified as a Guarantor in Schedule 2 and each
Additional Guarantor (together the "GUARANTORS").
"HEDGING COUNTERPARTY" means any Bank who enters into a Hedging Protection
Agreement as permitted by and in accordance with the terms of this Agreement and
the Approved Hedging Programme.
"HEDGING PROTECTION AGREEMENTS" means any and all interest cap and/or other
hedging agreements entered into or committed to be entered into by a Group
Member in relation to the Group's floating rate interest and/or currency
exposure under the Finance Documents as have been (and/or as may hereafter be)
agreed in writing between the Company and the Facility Agent to constitute the
Hedging Protection Agreements (each a "HEDGING PROTECTION AGREEMENT").
"HOLDING COMPANY" means, in respect of any Person, any company or corporation of
which such Person is a Subsidiary.
"INDEMNITY UNDERTAKING" means the indemnity undertaking in the agreed form dated
on or about the date of this Agreement pursuant to which, inter alia, Derby
L.L.C and Perseus Cycle L.L.C agree to make claims arising in respect of Clauses
6 and 9 of the
13
Recapitalisation Agreement and to apply the proceeds of any such
claim in the manner detailed therein.
"IMMEDIATE SUBSIDIARY" means each Group Member that is an immediate Subsidiary
of the Company or Lyon Investments B.V. being, as at the date of this Agreement
Lyon Investments B.V., Sturmey ▇▇▇▇▇▇ Limited, Raleigh Industries of Canada
Limited, Derby Trading Co. Inc and Derby Holding B.V..
"INFORMATION MEMORANDA" means the information memorandum so entitled dated April
1998 prepared by the Arranger at the Company's request and on its behalf in
connection with this Agreement as supplemented by all relevant information
contained in the Senior Notes' Offering Memoranda dated April 1998 and May 1998
respectively.
"INFORMATION PACKAGE" means the Business Plan, the Information Memorandum, the
Reports, the Transaction Costs Letter and any other information distributed by
the Arranger at the Company's request and on its behalf in connection with this
Agreement.
"INITIAL NOTE PURCHASERS" means Chase Securities, Inc., Chase Manhattan Bank AG
and Chase Manhattan International Limited.
"INTELLECTUAL PROPERTY RIGHTS" means all know-how, patents, trademarks, service
marks, designs, business names, topographical or similar rights, copyrights and
other intellectual property rights and any interests (including by way of
licence) in any of the foregoing (in each case whether registered or not and
including all applications for the same) of any Group Member.
"INTERCREDITOR AGREEMENT" means the agreement so entitled dated the date of this
Agreement and made between, amongst others, the parties to this Agreement, and
each Hedging Counterparty pursuant to which their respective interests in the
Group and amongst themselves are regulated.
"INTERCREDITOR AGREEMENT ACCESSION MEMORANDUM" means an Accession Memorandum as
defined in and delivered under or pursuant to the Intercreditor Agreement.
"INTEREST DATE" means, in relation to any Advance or any Overdue Amount, the
last day of the Term or, as the case may be, the Default Interest Period
relating thereto.
"INTRA-GROUP LOAN MEMORANDUM" means the memorandum in the agreed form detailing
all intra-group loans existing at and which will be in existence immediately
after Closing prepared by the Company and delivered to the Facility Agent
hereunder.
"INVENTORY" has the meaning given to such term in Clause 6.10.
"INVESTMENT" is defined at Clause 19.5(n).
"INVESTORS" means each of those Persons that subscribe for (or agree to
subscribe for) Shares pursuant to or in connection with the Recapitalisation
Agreement or are a shareholder of the Company.
14
"IRC" means the Internal Revenue Code of 1986 (as amended from time to time) of
the USA.
"IRISH DEBENTURES" means each of the debentures governed by the laws of Ireland
entered into by certain Group Members in favour of the Security Agent and
forming part of the Security Documents (each an "IRISH DEBENTURE").
"ISSUE DATE" means, in relation to any Standby L/C, the date for the issue
thereof as specified in the Standby L/C Request relating thereto.
"JOINT VENTURE" means all joint venture entities, whether a company,
unincorporated firm, undertaking, joint venture, association, partnership or
other entity in which any Group Member has an interest from time to time.
"LEGAL DUE DILIGENCE REPORT" means the report prepared by ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
addressed to the Facility Agent for itself and on behalf of the Banks.
"LETTER OF ENGAGEMENT" means, in respect of any Report, the letter of
instruction pursuant to which the Person that prepared such Report was engaged
to do so.
"LIBOR" means in relation to any Advance or Overdue Amount, on any day, the
London Interbank Offered Rate for deposits in the specified currency, being
determined by the Facility Agent to be either:
(a) the offered rate (if any) for the specified term which appears on page 3750
of the Telerate screen which displays British Bankers Association Interest
Settlement Rates for deposits in the specified currency for the period for
which such rate is to determined at 11.00am London time on the relevant
Quotation Date or, if such page or such service shall cease to be
available, such other page or service displaying the London Interbank
Offered Rates in such currency of prime banks as the Facility Agent shall,
after consultation with the Banks and with the approval of the Company,
such approval not to be unreasonably withheld or delayed, select as at
11.00am London time on the relevant Quotation Date for the specified term;
or
(b) if no such display rate is then available for such period or currency and,
at the time, the Facility Agent has not selected any alternative service as
contemplated in (a) above, the arithmetic mean (rounded upwards, if not
already such a multiple, to the nearest whole multiple of one sixteenth of
one per cent. per annum) of the respective rates notified to the Facility
Agent by each of the Reference bank as the rate at which it is offered
deposits in an amount approximately equal to the relevant Advance or unpaid
sum in the specified currency and for the specified term by prime banks in
the London Interbank Market at 11.00am London time on the relevant
Quotation Date for the specified term,
and for the purpose of this definition "SPECIFIED CURRENCY" means the currency
of such Advance or, as the case may be, Overdue Amount and "SPECIFIED TERM"
means the Term of such Advance or, as the case may be, the period in respect of
which LIBOR falls to be determined on that day in relation to such unpaid sum.
15
"LISTING" means a listing of equity on the London Stock Exchange or any other
stock exchange as the same is determined by the Facility Agent acting reasonably
(and "LISTED" shall be construed accordingly).
"MAJORITY BANKS" means a Bank or group of Banks whose aggregate Revolving
Commitments amount to more than sixty-six and two thirds per cent. of the Total
Commitments or, if each Bank's Commitment has been reduced to zero, would have
amounted in aggregate to more than sixty-six and two thirds per cent. of the
Total Commitments, immediately prior to such reduction to zero and, for the
purposes of this definition, the provisions of Clause 7 and any Ancillary
Commitment of any Ancillary Bank shall be ignored and be treated as if such
Bank's Revolving Commitment had not been reduced in accordance with Clause 7.
"MANAGEMENT AGREEMENT" means the management agreement (if any) in the agreed
form between ▇▇▇▇▇▇ and the Company.
"MARGIN" means two per cent. (2.00%) per annum, provided that if at any time any
consolidated Financial Accounts of the Group delivered to the Facility Agent
pursuant to Clause 19.1(a)(i) for an annual Accounting Period or Clause
19.1(a)(ii) for a quarterly Accounting Period, disclose that:
(a) Consolidated Adjusted EBITDA calculated on a Rolling 4 Quarterly basis is
more than $45,000,000 and the ratio of Consolidated Adjusted EBITDA to
Consolidated Net Interest Payable calculated on a Rolling 4 Quarterly basis
is greater than 2.35:1 the Margin shall be 1.75 per cent. per annum;
(b) Consolidated Adjusted EBITDA calculated on a Rolling 4 Quarterly basis is
more than $50,000,000 and the ratio of Consolidated Adjusted EBITDA to
Consolidated Net Interest Payable calculated on a Rolling 4 Quarterly basis
is greater than 2.75:1 the Margin shall be 1.50 per cent. per annum; and
(c) Consolidated Adjusted EBITDA calculated on a Rolling 4 Quarterly basis is
more than $55,000,000 and the ratio of Consolidated Adjusted EBITDA to
Consolidated Net Interest Payable calculated on a Rolling 4 Quarterly basis
is greater than 3.00:1 the Margin shall be 1.25 per cent per annum,
in each case during (but only during) the period from (and including) the date
on which the Facility Agent has received the relevant Financial Accounts
pursuant to Clause 19 and the report and certificate relating thereto pursuant
to Clause 19 or has received the relevant Financial Accounts for each of those
four consecutive quarterly Accounting Periods pursuant to Clause 19 and the
certificates relating thereto pursuant to Clause 19, as the case may be, until
(but excluding) the earlier of the following dates:
(i) the date on which the Facility Agent next receives the relevant
Financial Accounts for an annual Accounting Period pursuant to Clause
19 and a report and certificate relating thereto pursuant to Clause
19;
16
(ii) the date on which the Facility Agent receives the relevant Financial
Accounts for the next succeeding quarterly Accounting Period of the
Group pursuant to Clause 19 and a certificate relating thereto
pursuant to Clause 19;
(iii) the latest date (the "LATEST DATE") by which the Facility Agent
should have received any such Financial Accounts and certificates in
accordance with the terms of such Clauses where the Facility Agent
has not received the same by such date.
Provided that:
(i) until the first anniversary of Closing the Margin will be two per
cent. (2.00%) per annum;
(ii) if the Facility Agent receives any such Financial Accounts, report
and/or certificates after the Latest Date and such Financial
Accounts and certificates show that the tests in sub-paragraphs (a),
(b) or, as the case may be, (c) are met then the Margin shall be
adjusted with effect from the date of such receipt (and without
retrospective effect) to the level provided for above; and
(iii) if a Default has occurred, the Margin will be two per cent. (2.00%)
per annum until such time, if any, as no Default is continuing that
has not been waived or remedied in accordance with the provisions of
this Agreement, as a different percentage should apply in accordance
with this definition.
"MARKET REPORTS" means the reports dated 28 January 1998 prepared by the Coba
Group entitled "Market Assessment of The Derby Bicycle Group" addressed to,
inter alios, the Company and the Facility Agent for itself and on behalf of the
Banks.
"MATERIAL ADVERSE EFFECT" means any effect which could reasonably be expected:
(a) to be materially adverse to (i) the ability of the Company or any other
Obligor to perform its obligations under any of the Finance Documents, or
(ii) the business, assets, prospects or financial condition of any Material
Group Member; and/or
(b) (where the context so admits) to result in any of the Transaction Documents
not being legal, valid and binding on, and enforceable substantially in
accordance with its material terms against any party to that Transaction
Document and/or (in the case of Security Documents) not providing to the
Security Agent for itself and on behalf of the Banks, perfected,
enforceable security over the assets expressed to be covered by that
Security Document, in a manner and to an extent reasonably considered by
the Majority Banks to be materially adverse to their interests under the
Senior Finance Documents.
"MATERIAL GROUP MEMBER" means each Obligor and each other Group Member (a) whose
earnings before interest, tax, depreciation and amortisation represent five per
cent. or any greater percentage, of the Consolidated Adjusted EBITDA of the
Group, or (b) the book value of whose gross assets is five per cent. or more of
the consolidated gross assets of the
17
Group, in either case determined in accordance with the Applicable Accounting
Principles, or (c) whose aggregate sales to non-Group Members in any annual
Accounting Period, in accordance with the Applicable Accounting Principles and
excluding VAT and/or sales tax, have been, or are budgeted to be, at least five
per cent. or more of the aggregate sales of the Group to non-Group Members
(similarly calculated), and for this purpose:
(i) in the case of a company which itself has Subsidiaries, the calculation
shall be made by using the consolidated earnings before interest, tax,
depreciation and amortisation, gross assets or aggregate sales, as the case
may be, of it and its Subsidiaries;
(ii) the calculation of consolidated earnings before interest, tax, depreciation
and amortisation or gross assets or aggregate sales shall be made by
reference to:
(A) the latest Financial Accounts of the relevant company (or, as the
case may be) (a consolidation of the Financial Accounts of it and
its Subsidiaries) used for the purpose of the then latest unaudited
quarterly or audited annual consolidated Financial Accounts of the
Group delivered to the Facility Agent under Clause 19.1;
(B) those unaudited quarterly or audited annual consolidated Financial
Accounts (as the case may be) of the Group; and
(C) shall exclude any intra-Group item; and
(iii) any Subsidiary not falling within paragraphs (a), (b) or (c) above but
which, as a result of any intra-Group transfer re-organisation or
acquisition would, adopting any of the tests referred to in paragraphs
(a), (b) or (c) above and as if the Financial Accounts referred to in
such paragraphs had been drawn up immediately following such transfer,
reorganisation or acquisition, be a Material Group Member Provided that
such Subsidiary shall only become a Material Group Member upon the
completion of such transfer, reorganisation or acquisition.
"MATERIAL INSURANCES" means the each of those insurances specified as being
material in the list provided pursuant to paragraph 17 of Schedule 6 and such
other insurances as are designated material insurances by the Facility Agent
(acting reasonably) for the purposes of this Agreement from time to time.
"MATERIAL INTELLECTUAL PROPERTY RIGHT" means, any Intellectual Property Right
which the Facility Agent has determined to be material for the purposes of the
Senior Finance Documents whether or not such Intellectual Property Right is
actively used by any Group Member at the time of such determination or has been
used by any Group Member previously or otherwise and shall include the
Intellectual Property Rights specifically listed in the Security Documents.
"MODEL" means the management case financial model for the Derby Bicycle
Corporation detailed in the Information Memorandum.
"MOODY'S" means ▇▇▇▇▇'▇ Investor Services Limited.
18
"MS GROUP OPTION" means the right of ▇▇▇▇▇▇ ▇▇▇▇▇▇ to purchase such number of
shares of Univega Beteiligungen GmbH as shall represent 10% of the beneficial
ownership of MS Sport Vertriebs GmbH and MS Sport Vertriebs AG. Switzerland
under Section 8(b) of Part 2 of the notarial deed No. 270/1997 of the Hamburg
notary Jonetzi dated August 8, 1997).
"MONTH" means a period starting on one day in a calendar month and ending on the
numerically corresponding day in the following calendar month, unless such
corresponding day is not a Business Day, in which case it shall end on the next
day which is a Business Day or, if there is not a corresponding day in that
calendar month, the last Business Day in that calendar month.
"MULTIEMPLOYER PLAN" means a plan which is a multiemployer plan as defined in
section 4001 (a)(3) of ERISA.
"NETHERLANDS" means the Kingdom of the Netherlands.
"NEW BANK" means a bank or financial institution to which a Bank seeks to
transfer all or part of such Bank's rights and obligations hereunder.
"NON-UK OBLIGOR" means any Obligor that is not a UK Obligor.
"NOTE DOCUMENTS" means (to the extent that the same are entered into by the
entities expressed to be a party thereto) the Note Indentures, the Senior Notes,
the Note Purchase Agreement and the Registration Rights Agreement, any related
engagement, fee or indemnity agreements and any ancillary agreements
contemplated by the foregoing.
"NOTE INDENTURES" means the indentures in the agreed forms dated the date of
this Agreement among the Note Issuers, and the applicable Note Trustee pursuant
to which the Senior Notes will be issued.
"NOTE ISSUERS" means collectively The Derby Cycle Corporation and Lyon
Investments B.V. (each a "NOTE ISSUER").
"NOTE PURCHASE AGREEMENT" means the note purchase agreement in the agreed form
dated the date of this Agreement among the Note Issuers and the Initial
Purchasers in connection with the offering of Senior Notes.
"NOTE TRUSTEE" means, as of the date of this Agreement, the entity described
therein as Trustee under each of the Note Indentures, and any other Person
appointed to such position from time to time, in accordance with the provisions
of the applicable Note Indenture.
"NOTEHOLDER" means a Person who is the beneficial owner of one or more Senior
Notes (together "the NOTEHOLDERS").
"NOVATION CERTIFICATE" means a certificate substantially in the form set out at
Schedule 8.
"OBLIGOR" means each Borrower and each Guarantor and any other Group Member
which has been required to enter into (whether or not it has yet entered into)
any Accession
19
Agreement and/or Security Document pursuant to Clauses 19.4(d), 19.4(e),
19.4(f), 19.4(g) or 23 (together the "OBLIGORS").
"OBLIGORS' AGENT" means the Company, appointed to act on behalf of each Obligor
in relation to the Finance Documents pursuant to Clause 2.3(c).
"OPTIONAL CURRENCY" means any currency which is freely transferable and freely
convertible into Deutschmarks and which is available to banks in the London
Interbank Market.
"OVERDUE AMOUNT" is defined at Clause 9.
"PARTY" means any Person party to this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
"PERMITTED ACQUISITION" is defined at Clause 19.5(d)(v).
"PERMITTED AMOUNT" means, in any annual Accounting Period the aggregate of:
(i) to the extent that the Investment or, as the case may be, the Permitted
Acquisition, is to be financed by means of funds raised by means of the
issuance of ordinary shares in the Company or subordinated unsecured debt
on terms acceptable to the Majority Banks (in accordance with the
provisions of the Senior Finance Documents), $10,000,000 (or the equivalent
in other currencies); and
(ii) to the extent that the Investment or, as the case may be, the Permitted
Acquisition, is to be financed by means of Financial Indebtedness not
subordinated on terms satisfactory to the Majority Banks raised from third
party financial institutions;
(i) if the Margin at the beginning of the relevant annual Accounting
Period is 2.00 per cent. per annum, $5,000,000 (or its equivalent in
other currencies);
(ii) if the Margin at the beginning of the relevant annual Accounting
Period is 1.75 per cent. per annum, $7,500,000 (or its equivalent in
other currencies); and
(iii) if the Margin at the beginning of the relevant annual Accounting
Period is 1.50 per cent. per annum or less, $10,000,000 (as its
equivalent in other currencies),
Provided that, if all or any Investment or, as the case may be, the Permitted
Acquisition is to be financed (whether in whole or part) or, in the case of a
contingent liability or exposure of a Group Member in respect of an Investment,
will be financed (whether in whole or in part) by means of Financial
Indebtedness raised from third party financial institutions, the Facility Agent
shall have received at least 5 Business Days' prior notice thereof, together
with a certificate signed by both of the Executive Officers (without incurring
personal liability) confirming (i) that the Investment or, as the case may be,
the Permitted Acquisition will not, immediately thereafter, result in any Group
Member being responsible for any contingent liabilities as a result of such
Investment or, as the case may be, such Permitted Acquisition other than (if it
is the case) as a result of a guarantee given in respect thereof, the maximum
20
contingent exposure thereunder of which has been included in determining whether
the Investment or, as the case may be, the Permitted Acquisition is permitted
pursuant to the provisions of the Senior Finance Agreements; and (ii) that in
the twelve months immediately following the date of such certificate, together
with such supporting evidence as the Facility Agent may request (including,
without limitation, a report prepared by the Auditors addressed to the Facility
Agent and the Banks), no Default could reasonably be expected to occur as a
result of the proposed Investment or, as the case may be, the proposed Permitted
Acquisition and that there will be no breach of Clause 20.
"PERMITTED ENCUMBRANCE" means:
(a) Encumbrances constituted or evidenced by the Security Documents;
(b) Encumbrances existing as at the date of this Agreement, details of which
have been disclosed in writing and which are acceptable to the Facility
Agent prior to the Closing Provided that the Financial Indebtedness to
which such Encumbrance relates is not owed to a Beneficiary of a Standby
L/C that has been provided in support of such Financial Indebtedness;
(c) Encumbrances arising by operation of law provided that the same do not
arise as a result of default and any such unpaid fees are discharged as
soon as is reasonably practicable after the Company (or the relevant Group
Member) becomes aware thereof;
(d) a lien arising in favour of a warehouseman or shipper that arises under the
standard terms and conditions of such warehouseman or, as the case may be,
such shipper that relates to unpaid fees payable to such warehousemen or,
as the case may be, such shipper in such capacity only Provided that the
same do not arise as a result of a default and are discharged as soon as is
reasonably practicable after the Company (or the relevant Group Member)
becomes aware thereof and, in any event within 30 days of such amount
becoming payable;
(e) any Encumbrance over or affecting any assets of any company which becomes a
Group Member (that is not an Obligor) after the date hereof, where such
Encumbrance is created prior to the date on which such company becomes a
Group Member Provided that:
(i) such Encumbrance was not created at the request of any Group Member
in contemplation of such company becoming a Group Member;
(ii) the amount thereby secured (save any overdrawn amount on the current
account of any such company within the terms (in existence on the
date when such company becomes a Group Member) of an overdraft (or
other equivalent facility granted to such company prior to its
becoming a Group Member) has not been increased in contemplation of,
or since the date of, such company becoming a Group Member;
(iii) the Person in whose favour the Encumbrance was granted does not have
recourse to any Group Member (or any of their respective assets)
(other than
21
the Group Member that granted the Encumbrance) in respect of the
indebtedness to which such Encumbrance relates; and
(iv) the Encumbrance relates only to assets of the relevant Group Member
that were in existence at the time such company became a Group
Member; and
(f) Encumbrances not referred to at paragraphs (a) - (e) above or (g) or (h)
below, provided that the aggregate book value of the asset or assets over
which all such Encumbrances have been granted by Obligors does not exceed
(in aggregate) $1,000,000 (or the equivalent in other currencies), and, in
respect of Group Members that are not Obligors, does not exceed (in
aggregate) $1,000,000 (or the equivalent in other currencies);
(g) Encumbrances existing as at the date of this Agreement to secure Financial
Indebtedness existing at the date of this Agreement of the members of the
South African Group to the extent that the Financial Indebtedness to which
such Encumbrance relates is not owed to a Beneficiary of a Standby L/C; and
(h) Encumbrances granted in favour of an Ancillary Bank arising solely out of
arrangements concerning the Ancillary Facility provided by such Ancillary
Bank to Group Members whereby outstanding debit and credit balances
thereunder may, from time to time, be netted off or consolidated.
"PERMITTED FINANCIAL INDEBTEDNESS" means (without double-counting):
(a) in respect of the Company, any indebtedness (i) incurred under the
Finance Documents, (ii) as permitted under Clause 19.5(c) of this
Agreement or (iii) as contemplated in the definition of Permitted
Amount;
(b) in respect of Lyon Investments B.V., any indebtedness (i) incurred
under the Note Documents and in respect of the Notes and (ii) as
permitted under Clause 19.5(c) of this Agreement; and
(c) in respect of Group Member (other than the Company and Lyon
Investments B.V.), any indebtedness:
(i) incurred under the Finance Documents;
(ii) as permitted by Clauses 19.5(c) and 19.5(d);
(iii) Financial Indebtedness owed to a Beneficiary of a Standby L/C
to the extent such Financial Indebtedness is supported by such
Standby L/C;
(iv) in addition to any Financial Indebtedness able to be incurred
or permitted to subsist pursuant to paragraphs (i), (ii),
(iii), (v), (vi) or (vii) of this definition:
(A) until such time (if any) as any member of the South
African Group receives an Exchange Control Undertaking and
becomes
22
"POTENTIAL EVENT OF DEFAULT" means:
(a) an event which, with the passage of time, the giving of notice or the
making of any determination (or any combination of those three), would, or
could reasonably be expected to, become an Event of Default; or
(b) the making of a Drawdown Request for the purpose of funding or supporting a
payment due under the Senior Notes which the Facility Agent, acting on the
instructions of the Majority Banks, reasonably considers it likely to
result in an Event of Default.
"PRE-CLOSING ACCOUNTS" means the combined balance sheet, income statement and
cashflow statement of the Group in the agreed form prepared in accordance with
Applicable Accounting Principles by the Company relating to the period
commencing 1 January 1997 and ending 31 December 1997.
"PROFORMA FINANCIAL ACCOUNTS" means a set of proforma quarterly and monthly
accounts in the agreed form detailing the type and level of information which
will be provided in each of the Accounts specified in Clauses 19.1(a)(ii) and
19.1(a)(iii) and the type of issues to be covered in any written report to be
provided by the Executive Officers as part of such Financial Accounts and
showing the heading, format and other characterisations of each of such
Financial Accounts.
"QUALIFYING BANK" means:
(a) in respect of a Borrower located in the United Kingdom a bank as defined in
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ for the purposes of Section 349 of that Act
which is within the charge to UK Corporation tax in respect of any interest
payable or paid to it under this Agreement;
(b) in respect of a Borrower located in a jurisdiction other than the United
Kingdom or Canada:
(i) a bank for the time being lending through a branch, Affiliate or
agency in that other jurisdiction; or
(ii) a bank lending through any other branch, Affiliate or agency if, at
the time the bank becomes a party to this Agreement, the bank or
Affiliate (as the case may be) is resident or incorporated in a
country with which that other jurisdiction has an appropriate double
taxation treaty pursuant to which that bank or Affiliate (as the case
may be) is entitled to receive interest and fees under this Agreement
from the Borrower without deduction or withholding of that other
jurisdiction's income Tax, or is otherwise entitled to receive
interest and fees without such deduction or withholding and where, at
such time, there has been no public announcement made by the relevant
taxing authorities in such jurisdiction of an intention to change the
entitlement of the bank or Affiliate to receive principal, interest
and fees under this Agreement from any such Borrower without such
deduction or withholding; or
24
(iii) any Bank that is a party to this Agreement as at the date hereof or
becomes a party hereto within thirty days of the date hereof; and
(c) in respect of a Borrower incorporated in Canada, any Bank.
"QUOTATION DATE" means, in relation to any period for which an interest rate is
to be determined hereunder, the day on which quotations would ordinarily be
given by prime banks in the London Interbank Market for deposits in the currency
in relation to which such rate is to be determined for delivery on the first day
of that period Provided that, if for any such period quotations would ordinarily
be given on more than one date, the Quotation Date for that period shall be the
last of those dates.
"RECAPITALISATION" means the reorganisation of Derby International and its
Subsidiaries and the recapitalisation of the Company (in each case) pursuant to
the Recapitalisation Agreement.
"RECAPITALISATION AGREEMENT" means the agreement dated 11 March 1998, as
amended, among Derby International, DFS, Derby L.L.C., Perseus Cycle L.L.C. and
the Company in relation to the Recapitalisation (and includes, inter alia, any
tax covenants, disclosure letters and all other documents delivered to or by any
party thereto pursuant or in relation to such agreement).
"RECAPITALISATION DOCUMENTS" means the Recapitalisation Agreement, the Exchange
Agreement, the Disclosure Exhibits, the Recapitalisation Agreement Assignment,
the Shareholders Agreement, the Registration Agreement, the Certificate of
Incorporation together with any other agreement or document relating to, or
giving effect to, the Recapitalisation.
"REFERENCE BANKS" means the principal London office of Chase Manhattan Bank,
Midland Bank PLC and ABN Amro N.V. and/or such other Banks as may become
Reference Banks pursuant to Clause 31.8.
"REGISTRATION AGREEMENT" means the Agreement so entitled among the Company, DFS,
Perseus Cycle L.L.C and Derby Cycle L.L.C in relation to the Recapitalisation.
"REGISTRATION RIGHTS AGREEMENT" means the Exchange and Registration Rights
Agreement in the agreed form dated the date of this Agreement among the Note
Issuers and the Initial Purchasers in connection with the offering of Senior
Notes.
"REPAYMENT DATE" means, in relation to any Advance, the last day of the Term
thereof.
"REPORTS" means each of the Accountant's Report, the Legal Due Diligence Report,
the Market Reports, the AON Insurance Report, the AON Pensions Report, the
Environmental Reports and the Property Report.
"REQUEST" means a Drawdown Request or a Standby L/C Request as the context may
require.
"REQUESTED AMOUNT" means:
25
(a) in respect of a Drawdown Request, the principal amount requested to be
borrowed under that Drawdown Request; and
(b) in respect of a Standby L/C Request, the amount of the Standby L/C
requested to be issued under that Standby L/C Request.
"REVOLVING COMMITMENT" in relation to a Bank means the amount of the commitment
set opposite its name in Schedule 3 under the heading "Revolving Commitment" or
in the Novation Certificate, Bank Accession Notice or other document by which it
became a party to or acquired rights under this Agreement as reduced or
increased by substitution or transfer pursuant to Clause 29 and any Novation
Certificate to which such Bank is a party and to the extent not cancelled,
reduced or terminated under this Agreement.
"REVOLVING FACILITY AVAILABLE AMOUNT" has the meaning given to such term in
Clause 6.10.
"RIC" means Raleigh Industries of Canada Limited.
"SCHEDULE" refers, unless otherwise stated, to a schedule to this Agreement.
"SECURITY DOCUMENTS" means the share charges and other security documents
identified in Schedule 14 and such other security documents as may be required
to be entered into by any Obligor including in relation to the accession of any
Obligor hereunder at the request of the Facility Agent pursuant to any of the
Senior Finance Documents.
"SELLERS" means Derby International and DFS in their capacity as such under
thereof the Security Agent, in form and substance satisfactory to the Security
Agent a security interest Recapitalisation ▇▇▇▇▇▇▇▇▇.▇▇ all of the personal
property of RIC as continuing collateral security for the indebtedness,
liabilities and obligations of RIC under this Agreement.
"SENIOR FINANCE DOCUMENTS" means this Agreement, each Standby L/C, the
Intercreditor Agreement, the Security Documents, the Accession Agreements, any
Guarantee, any Novation Certificate, any Bank Accession Notice, the Indemnity
Undertaking, the Fee Letters and any other document determined by the Facility
Agent, from time to time, as being a "SENIOR FINANCE DOCUMENT".
"SENIOR UNSECURED NOTES" means the unsecured, senior notes (including, for the
avoidance of doubt, the Initial Securities and the Exchange Securities, as
defined in each of the Note Indentures), issued or to be issued by the Note
Issuers (or either of them) pursuant to each of the Note Indentures in
substantially the forms attached as exhibits to the applicable Note Indenture.
"SERVICE CONTRACTS" means the contracts of service made between (i) each of the
Executives and a Group Member and (ii) each Director and a Group Member.
"SHAREHOLDERS AGREEMENT" means the agreement dated on or about the date of this
Agreement between the Company, DFS, Derby L.L.C. and Perseus Cycle L.L.C.
entitled "Shareholders' Agreement" pursuant to which, amongst other things, DFS,
Derby L.L.C. and Perseus Cycle L.L.C. agree to regulate their respective rights
with respect to the voting and transfer of shares in the Company.
▇▇
"▇▇▇▇▇ ▇▇▇▇▇▇" mean the Republic of South Africa.
"SOUTH AFRICAN BORROWER" means a Borrower incorporated in South Africa.
"SOUTH AFRICAN GROUP" means Derby Investment Holdings (Pty) Limited and each of
its Subsidiaries.
"SOUTH AFRICAN RAND" and "R" means the lawful currency for the time being of
South Africa.
"STANDARD & POOR'S" means Standard & Poor's Rating Services, a division of The
McGraw Hill Companies.
"STANDBY L/C" means a letter of credit in the form, or substantially in the
form, of that set out at Part 3 of Schedule 7, (or such other form as shall be
agreed by the Facility Agent acting on the instructions of the Majority Banks)
issued or to be issued to a Beneficiary under this Agreement.
"STANDBY L/C COMMITMENT" in relation to a Bank means the amount of the
commitment set opposite its name in Schedule 3 under the heading "Standby L/C
Commitment" or in the Novation Certificate or other document by which it became
a party to or acquired rights under this Agreement as reduced or increased by
substitution or transfer pursuant to Clause 29 and any Novation Certificate to
which such Bank is a party and to the extent not cancelled, reduced or
terminated under this Agreement, such commitment forming a sub-set of, and not
being additional to, such Bank's Revolving Commitment.
"STANDBY L/C REQUEST" means a request substantially in the form set out at Part
2 of Schedule 7.
"STERLING" and "(POUNDS") mean the lawful currency for the time being of the
United Kingdom.
"STRUCTURE MEMORANDUM" means the memorandum and charts provided pursuant to
paragraph 35 of Schedule 6 describing the capital and share ownership of the
Group (and giving details of any minority shareholdings in any Subsidiary),
identifying all Group Members and all interests of Group Members in other
companies, partnerships, Joint Ventures and the like, all as of and immediately
after Closing, and all reorganisational steps with respect to the Group Members
to be taken at or shortly prior to Closing.
"SUBSIDIARY" means (a) a subsidiary as defined in Section 736 of the Companies
▇▇▇ ▇▇▇▇ as amended, and/or (b) a subsidiary undertaking as defined in Section
258 of the Companies ▇▇▇ ▇▇▇▇ as amended, or, in either case, any statutory re-
enactment or replacement thereof and/or (c), (whether or not falling within (a)
or (b) above, in relation to any Person, any entity which is controlled directly
or indirectly by that Person and any entity (whether or not so controlled)
treated as a subsidiary in the latest financial statements of that Person from
time to time, and "control" for this purpose means the direct or indirect
ownership of the majority of the voting share capital of such entity or the
right or ability to direct management to comply with the type of material
restrictions and obligations contemplated in this Agreement or to determine the
composition of a majority of the board of directors (or like board) of such
entity, in each case whether by virtue of ownership of share capital, contract
or otherwise.
27
"TAX" shall be construed so as to include all present and future taxes, charges,
imposts, duties, levies, deductions, withholdings or amounts or charges of a
similar nature, or any amount payable on account of, or as security for, any of
the foregoing, including any penalties, fines, surcharges or interest payable in
connection with such amounts, and "TAXES" and "TAXATION" shall be construed
accordingly.
"TERM" means, in relation to an Advance, the period for which such Advance is
requested to be borrowed, as adjusted under this Agreement.
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Equity Investors III, L.P. .
"TOTAL COMMITMENTS" means, at any time, the aggregate for the time being of the
Banks' Revolving Commitments.
"TRANSACTION COSTS" means all fees, out-of-pocket costs and expenses and stamp
duty, registration, transfer and similar taxes incurred by the Company or any
Subsidiary thereof in connection with the negotiation, preparation and execution
of the Transaction Documents or otherwise in connection with, or resulting from,
the Recapitalisation each in the aggregate amount as set out in a letter in an
agreed form from the Company to the Facility Agent entitled "Transaction Costs"
and provided to the Facility Agent pursuant to paragraph 14 of Schedule 6 (the
"TRANSACTION COSTS LETTER").
"TRANSACTION DOCUMENTS" means the Recapitalisation Documents, the Finance
Documents, the Service Contracts, the Escrow Letter and the Structure
Memorandum.
"UK OBLIGORS" means, at any time, each of the Obligors, at such time,
incorporated in England and Wales, Scotland and Northern Ireland.
"USA" "UNITED STATES OF AMERICA" means the United States of America, any of its
states or territories and the District of Columbia.
"U.S. OBLIGOR" means, at any time, each Group Member at such time incorporated
in the United States and any other Obligor which is a U.S. Person.
"U.S. PERSON" means a Person who is a citizen or resident of the USA, and any
corporation of other entity created or organised in or under the laws of the
USA.
"UTILISATION" means:
(a) when designated "Standby L/C", a utilisation under this Agreement of the
Standby L/C Facility;
(b) when designated "Revolving", a utilisation under this Agreement of the
Revolving Facility; and
(c) without any such designation, a utilisation of the Standby L/C Facility or
the Revolving Facility as the context requires.
28
"UTILISATION DATE" means in relation to each Advance, the date specified as such
in the relevant Drawdown Request.
"VAT" means value added tax owed to the United Kingdom Customs & Excise or any
similar or analogous tax in any jurisdiction owed to an equivalent authority or
body.
"YEAR 2000 EXPENDITURE" means, in respect of any Person, any expenditure
incurred relating to the reprogramming required to permit the proper
functioning, in and following the Year 2000 of such Person's computer systems
and equipment containing embedded microchips (including systems and equipment
supplied by others or with which such Person's systems interface) and the
testing of all such systems and equipment, as so reprogrammed.
1.2 FINANCIAL TERMS
"A COMMON STOCK" means the non-voting A Common Stock of the Company authorised
by the constitutive documents of the Company as at the date hereof.
"B COMMON STOCK" means the non-voting B Common Stock of the Company authorised
by the constitutive documents of the Company as at the date hereof.
"CAPITAL EXPENDITURE" means any expenditure which should be treated as capital
expenditure in the audited consolidated Financial Accounts of the Group in
accordance with the Applicable Accounting Principles.
"CONSOLIDATED ADJUSTED EBITDA" for any period comprising an annual Accounting
Period of the Company or four consecutive quarterly Accounting Periods of the
Company (taken together as one period) means the operating income of the Group
for such period:
BEFORE TAKING IN ACCOUNT all Extraordinary Items (whether positive or
negative) and one-off expenses not exceeding, in aggregate, $2,900,000
incurred in the annual Accounting Period ending 31 December 1997;
BEFORE TAKING INTO ACCOUNT any Transaction Costs required to be expensed
through the income statement up to a maximum of $6,200,000 whether an
Extraordinary Item or otherwise and any one-off payments of premia or
otherwise made by any Group Member in connection with Hedging Protection
Agreements entered into in accordance with the Approved Hedging Programme
within 30 days of the date of this Agreement;
BEFORE TAKING INTO ACCOUNT to the extent deducted from operating income any
amounts expended that relate solely to Year 2000 Expenditure to the extent
that such expenditure, when aggregated with any other Year 2000 Expenditure
incurred since the date of this Agreement and prior to 31 December 1999
does not exceed $2,700,000 (or the equivalent in other currencies);
BEFORE DEDUCTING income tax expense;
BEFORE DEDUCTING charges to depreciation and amortisation excluding
amortisation attributable to a prepaid cash item arising in the ordinary
course of business, the
29
amortisation of any goodwill and amortisation of
Transaction Costs in an amount not exceeding $8,800,000;
BEFORE DEDUCTING Interest (whether accrued, paid, deferred or capitalised)
as an obligation of any Group Member or Interest accrued in favour of, or
paid to, any Group Member;
AFTER DEDUCTING (to the extent otherwise included in operating income) any
gain over book value arising in favour of the Group on the sale, lease or
other disposal of any fixed or intangible asset during such period and any
gain arising on any revaluation of any fixed or tangible asset during such
period;
AFTER ADDING BACK (to the extent otherwise deducted in operating income)
any loss against book value incurred by the Group on the sale, lease or
other disposal of any fixed or intangible asset during such period and any
loss arising on any revaluation of any fixed or intangible assets during
such period;
AFTER DEDUCTING (to the extent otherwise included) the amount of retained
profit (or adding back the retained loss) of any Group Member (other than
the Company) which is attributable to the interest of any shareholder of
or, as the case may be, partner in such Group Member which is not a Group
Member other than the amount of retained profit or the amount of the
retained loss of RIC which is attributable to such non-Group Member's
interest in RIC Preference Shares for so long as such shares may be
exchanged solely for B Common Stock of the Company and carry no rights
greater than as at the date of this Agreement and RIC is prohibited from
redeeming such RIC Preference Shares pursuant to the provisions of this
Agreement;
AFTER DEDUCTING items which have not, or are not due to be paid in cash,
including any amortisation, credit, income or provision release (where such
provision was not originally increased by reducing operating income) or
other credit where cash was received in an earlier period. For the
avoidance of doubt, any income related to the defined benefit pensions
plans of the Group recognised in accordance with FAS 87 shall be deducted
when calculating Consolidated Adjusted EBITDA,
and for the purposes of the foregoing no item shall be effectively taken into
account more than once in this calculation and all items shall be determined on
a consolidated basis and (subject only as may be required in order to reflect
the express inclusion or exclusion of items as specified in this definition) in
accordance with the Applicable Accounting Principles and as determined from the
consolidated Financial Accounts of the Group for such annual Accounting Period
or for the quarterly Accounting Periods falling within such period or, to the
extent that such period, or part thereof, relates to the period prior to
Closing, from the Pre-Closing Accounts relating to such period.
"CONSOLIDATED NET WORTH" means the amount (including any additional paid in
capital) for the time being paid up or credited as paid up on the issued share
capital of the Company (other than any Excluded Share Capital):
PLUS an amount (of up to $45,000,000) in respect of the value attributable
to equity retained by on or behalf of DFS;
30
PLUS any amount standing to the credit of, or (as the case may be) MINUS
any amount standing to the debit of the consolidated income statement of
the Group before any adjustment made in respect of dividends on any class
of shares of the Company to the extent that the holder of such share(s) is
only entitled to receive, in respect thereof, payment in kind, and not cash
or other assets;;
MINUS any amount included in the above which is attributable to (a) the
aggregate of all goodwill (to the extent created or purchased after
Closing), titles, trademarks, copyrights, patents, capitalised research and
development expenditure (other than research and development expenditure
which is capitalised in accordance with the accounting policies of the
Company in force at the date of this Agreement) and other intangible
assets, and (b) any upwards revaluation of assets by any Group Member after
Closing; and
MINUS (to the extent otherwise included) the amount attributable to the
interests (if any) of outside holders of issued share capital in any Group
Member other than the Company other than RIC Preference Shares for so long
as the same are exchangeable solely for B Common Stock and carry no rights
greater than as at the date of this Agreement and RIC is prohibited from
redeeming such RIC Preference Shares pursuant to the provisions of this
Agreement.
For the avoidance of doubt, the amount of the Additional Payment (including
any accrued interest thereon) shall not be included in determining
Consolidated Net Worth.
For the purposes of the foregoing, no items shall be effectively taken into
account more than once in this calculation and all items shall be calculated on
a consolidated basis and (subject only as may be required in order to reflect
the express inclusion or exclusion of items as specified in this definition) in
accordance with the Applicable Accounting Principles and, where the calculation
is being made as at the end of any Accounting Period for which a consolidated
balance sheet of the Group has been or is required to be delivered to the
Facility Agent hereunder, shall be as determined from that balance sheet.
"CONSOLIDATED NET INTEREST PAYABLE" for any period comprising an annual
Accounting Period of the Company or four consecutive quarterly Accounting
Periods of the Company or less where such period ends on or before 28 March 1999
(taken together as one period) means, the Interest accrued during such period as
an obligation of any Group Member under of in respect of any Financial
Indebtedness (whether or not paid, capitalised or accrued during, or deferred
for payment after, such period) together with interest paid, payable,
capitalised, accrued or deferred for payment under any interest rate or currency
Hedging Protection Agreement or instruments under which the parties are in
compliance with their payment obligations or other obligations (excluding for
the avoidance of doubt any item comprised in Transaction Costs amortised in
accordance with Applicable Accounting Principles LESS Interest received in
respect of Cash and together with Cash Equivalent Investments during such period
together with Interest received or receivable by any Group Member during such
period under any interest rate and/or currency hedging agreements or instruments
(calculated on an accrual basis) under which all parties are in compliance with
their payment and other obligations all determined on a consolidated basis and
avoiding double counting and (subject only as may be required in order to
reflect the express inclusion or exclusion of items as
31
specified in this definition) in accordance with the Applicable Accounting
Principles and as shown in the consolidated Financial Accounts of the Group for
such annual Accounting Period or for the quarterly Accounting Periods falling
within such period provided that interest in respect of the Additional Payment
shall not be included in Consolidated Net Interest Payable for so long as such
interest is paid in kind.
"DOLLAR EQUIVALENT" means, in respect of any currency other than Dollars, the
amount of Dollars able to be purchased with such currency at the rate of
exchange applied by the Company or, as the case may be, the Auditors, in
compiling the financial statements to which the calculation relates.
"EXCLUDED SHARE CAPITAL" of the Group means shares in the capital including
associated share premium of any Group Member owned by a Person which is not a
Group Member which by their terms are or may become redeemable (whether or not
subject to the occurrence of any contingency) at any time whilst any Advance or
other amount remains outstanding hereunder (whether or not due and payable) or
any commitment is in force, without the unanimous prior written consent of the
Banks Provided that PIK A Preferred Shares, PIK B Preferred Shares and RIC
Preference Shares shall not constitute Excluded Share Capital for the purposes
of this definition Provided further in the case of the RIC Preference Shares and
PIK B Preferred Shares that the holders of such shares do not have any greater
rights than in existence at the date of this Agreement and in the case of the
RIC Preference Shares RIC is prohibited from redeeming such Preference Shares
pursuant to the provisions of this Agreement.
"EXTRAORDINARY ITEMS" shall be determined in accordance with Applicable
Accounting Principles.
"FINANCIAL INDEBTEDNESS" means any indebtedness for, or for interest (or
dividends in the case of paragraph (c)) or other charges relating to, or
otherwise in respect of or pursuant to:
(a) monies borrowed or monies raised which are in the nature of borrowings or
having the commercial effect of borrowing, including, without limitation,
monies raised by the sales of receivables, invoices, bills or notes or
other financial assets on terms that recourse may be had to the vendor in
the event of non-payment of such receivables or financial assets when due
(but only to the maximum extent, actual or contingent, of such right of
recourse) and monies raised under acceptance credit facilities and through
the issue of bonds, notes, debentures, bills, loan stocks and other debt
securities (including any debt security convertible, but not at the
relevant time converted, into share capital);
(b) the acquisition cost of assets or services to the extent payable on
deferred payment terms after the time of acquisition or possession thereof
by the party liable (whether or not evidenced by any bond, note, debenture,
loan stock or other debt security), excluding (i) retentions of acquisition
consideration normal in the trade concerned, (ii) any payment relating to
construction works or the acquisition of fixed assets which will become
payable only upon completion or commissioning of certain stages in such
works or in the supply programme for such fixed assets and which has not
yet become payable by reason of the non-completion or non-commissioning (as
the case may be) of such stages, (iii) any such cost payable on deferred
payment terms which are
32
normal in the trade concerned, and which do not involve any deferral of
payment of any sum for more than four months;
(c) any outstanding Excluded Share Capital (and notwithstanding anything to the
contrary contained in this Agreement or in any rule of law or accounting,
such Excluded Share Capital shall be deemed for the purposes of this
definition to constitute indebtedness of the issuer of it);
(d) moneys received in consideration for the supply of goods and/or services to
the extent received more than three months before the due date for such
supply (but excluding any liability in respect of bona fide progress
payments and deposits or annual subscriptions received from customers in
the ordinary course of trade);
(e) instalments under conditional sale agreements entered into primarily as a
method of raising finance;
(f) amounts payable under leases (whether in respect of land, machinery,
computers, equipment or otherwise) and amounts payable under hire purchase
agreements and similar agreements and instruments, in each case where such
leases, agreements or instruments are treated as finance leases in
accordance with the Applicable Accounting Principles;
(g) (i) any guarantee, indemnity, letter of credit or other legally binding
instrument to assure payment of, or against loss in respect of non-
payment of, any of the indebtedness specified in this definition and
any counter-indemnity in respect of any thereof; and/or
(ii) any legally binding agreement or other instrument entered into in
connection with any of the indebtedness specified in this definition
requiring, or giving any Person the right (contingently or otherwise)
to require, that any other Person invest in, make advances to,
purchase assets of or maintain the solvency or financial condition of
any other Person;
(h) any interest rate swap, currency swap, currency exchange transaction, cap,
floor, collar or option arrangement and any other hedging or treasury
transaction (or any combination of any such transactions) which is entered
into with a view to managing exposure to fluctuations in interest rates or
currency exchange rates (the amount of such Financial Indebtedness in
relation to any such transaction shall be calculated by the ▇▇▇▇-to-market
valuation of such transaction at the time such valuation is carried out);
(i) transactions which involve or have the commercial effect of the borrowing
of commodities as part of an arrangement for or in substitution for the
raising of finance, the value of indebtedness concerned for this purpose
being the sum which must be paid and/or the value in money terms of the
commodities which must be delivered by the "borrower" to, or to the order
of, the "lender"; and
33
(j) transactions involving an agreement to sell commodities and a related
agreement to purchase at a future date, the same or other commodities where
such transactions are entered into primarily as a means of raising finance.
Whenever an amount of Financial Indebtedness of any Person or Persons is to be
determined for any purpose, double counting shall be avoided.
"INTEREST" means:
(a) interest and amounts in the nature of interest (including, without
limitation, the interest element of finance leases) accrued;
(b) prepayment penalties or premiums incurred in repaying or prepaying any
Financial Indebtedness;
(c) discount fees and acceptance fees payable or deducted in respect of any
Financial Indebtedness (including all fees payable in connection with any
letter of credit or guarantee);
(d) any other costs, expenses and deductions of the like effect and any net
payment or amount payable or receipt receivable (or, if appropriate in the
context, receipt) under any interest rate hedging agreement or instrument
(including without limitation under the Hedging Protection Agreements)
taking into account any premiums payable for the same and the interest
element of any net payment (plus or minus any accrued exchange gains or
losses) under any currency hedging instrument or arrangement and dividends;
and
(e) any other distribution in respect of Excluded Share Capital.
For the avoidance of doubt "INTEREST" includes commitment, utilisation and non-
utilisation fees (including, without limitation, those payable under this
Agreement) but excludes agent's and front-end, management, arrangement and
participation fees with respect to any Financial Indebtedness (including,
without limitation, those payable under this Agreement) and (other than in
respect of paragraph (d) above) any up-front premium or front-end fee payable
pursuant to any Hedging Protection Agreement.
"NET AVERAGE FINANCIAL INDEBTEDNESS" means, in relation to any period, the
aggregate of the Dollar Equivalent of the Financial Indebtedness of the Group as
at the end of each of the twelve immediately preceding and consecutive monthly
Accounting Periods ending on the Accounting Date to which the calculation
relates, divided by twelve LESS:
(a) the aggregate of the Dollar Equivalent of the Cash and Cash Equivalent
Investments owned by the Group as at the end of each of the twelve
immediately preceding and consecutive monthly Accounting Periods ending on
the Accounting Date to which the calculation relates divided by twelve; and
(b) the aggregate of the Dollar Equivalent of duty deferment bonds, (including
letters of credit and guarantees of a similar nature to duty deferment
bonds, as at the end of each of the twelve immediately preceding and
consecutive monthly Accounting Periods
34
ending on the Accounting Date to which the calculation relates divided by
twelve up to a maximum aggregate amount of $7,000,000,
provided that, if the Accounting Date is less than twelve months from Closing,
the "NET AVERAGE FINANCIAL INDEBTEDNESS" shall be determined in accordance with
the foregoing save that the figure twelve shall, in each case, be replaced by
the number of monthly Accounting Periods occurring between Closing and the
Accounting Date to which the calculation relates.
"PIK A PREFERRED SHARES" means the Series A Preferred Shares of the Company
authorised by the constitutive documents of the Company as at the date hereof.
"PIK B PREFERRED SHARES" means the non-voting Series B Preferred Shares of the
Company authorised by the constitutive documents of the Company as at the date
hereof.
"RIC" means Raleigh Industries of Canada.
"RIC PREFERENCE SHARES" means the non-voting Preference Shares of RIC authorised
by the constitutive documents of RIC that are exchangeable to A Common Stock
and/or B Common Stock pursuant to the terms of such constitutive documents as at
the date hereof.
"ROLLING 4 QUARTERLY BASIS" refers to the calculation of a ratio or an amount
made on an Accounting Date based on the sum of the amounts by reference to which
such ratio or amount is determined over the quarterly Accounting Period ending
on such Accounting Date and the immediately preceding and consecutive 3
quarterly Accounting Periods.
"TOTAL ASSETS" means the sum of fixed and current assets (including, for the
avoidance of doubt, Cash, Cash Equivalent Investments and amounts falling due
after more than one year) of the Group determined initially by aggregating the
fixed and current assets (including, for the avoidance of doubt, Cash and
amounts falling due after more than one year) specified in the Pre-Closing
Accounts and, following delivery to the Facility Agent pursuant to Clause 19.1
of the consolidated Financial Accounts of the Group subsequently determined by
reference to the consolidated Financial Accounts of the Group most recently
delivered to the Facility Agent in accordance with Clause 19.1 (adjusted as the
Facility Agent (after consultation with the Company) may reasonably consider
appropriate to take account of any change in circumstances which occur
thereafter).
1.3 CONSTRUCTION
In this Agreement, save where the context otherwise requires:
(a) references to documents being in the "AGREED FORM" means documents in a
form previously agreed in writing by or on behalf of the Company and the
Facility Agent;
(b) references to "ASSETS" shall include revenues and the right thereto and
property and rights of every kind, present, future and contingent and
whether tangible or intangible (including uncalled share capital),
references to "SHARES" shall include stock and references to "FREEHOLD
PROPERTY" shall include heritable property in Scotland and other similar
interests in real property in other jurisdictions;
35
(c) the expressions "HEREOF", "HEREIN", "HEREUNDER" and similar expressions
shall be construed as references to this Agreement as a whole (including
all Schedules) and shall not be limited to the particular clause or
provision in which the relevant expression appears, and references to "THIS
AGREEMENT" and all like indications shall include references to this
Agreement as supplemented by the Accession Agreements, the Novation
Certificates and any other agreement or instrument supplementing or
amending this Agreement;
(d) references to "INDEBTEDNESS" shall be construed so as to include any
obligation or liability (whether present or future, actual or contingent)
for the payment, repayment or redemption of any obligation expressed by
reference to monetary value or quantity or value of commodities (whether
such obligation is performable by the payment of money or in some other
way);
(e) references to any of the Transaction Documents and any other agreement,
document or instrument shall be construed as a reference to the same as
amended, varied, supplemented or novated from time to time (including,
where relevant, by any Accession Agreement and/or Novation Certificate);
(f) references (by whatever term) to the Company, each Obligor, the Arranger,
each Bank, each Reference Bank, each Agent, each Executive, the Note
Trustee, each Noteholder or the parties to this Agreement shall, where
relevant and subject as otherwise provided in this Agreement, be deemed to
be references to or to include, as appropriate, their respective
successors, replacements and assigns, transferees and substitutes permitted
by the terms of the Senior Finance Documents;
(g) reference to a time of day is, unless otherwise stated, a reference to
London time;
(h) the contents page of, and headings in, this Agreement are for convenience
only and shall be ignored in construing this Agreement;
(i) any reference to "CERTIFICATE", "CERTIFICATIONS" (or any like term) in
relation to an amount shall be a reference to a certificate containing a
reasonable amount of detail as to how such amount was calculated;
(j) reference to a "JUDGMENT" shall include a decree;
(k) words importing the singular shall include the plural and vice versa; and
(l) all references to statutes and other legislation include all re-enactments
and amendments of those statutes and that legislation.
1.4 RELATIONSHIP WITH THE INTERCREDITOR AGREEMENT
This Agreement is entered into subject to, and with the benefit of, the terms of
the Intercreditor Agreement
36
PART 2
2. THE FACILITY
2.1 THE FACILITY
Subject to the terms and conditions of this Agreement (and in the case of an
Ancillary Facility, the terms and conditions of the documents evidencing the
same) the ▇▇▇▇▇ ▇▇▇▇▇ to the Borrowers facilities of up to DM225,000,000 (or the
equivalent thereof in Optional Currencies); of which:
(a) up to DM170,000,000 may be utilised by the Borrowers listed below in
Column 1 in the amount and currency set opposite such Borrower in
Column 2 on the Closing:
================================================================================
COLUMN 1 COLUMN 2 CURRENCY
BORROWER Deutschmark Amount
================================================================================
Derby Holding Deutschland GmbH 76,000,000 DM
--------------------------------------------------------------------------------
Gazelle 52,000,000 $
--------------------------------------------------------------------------------
Raleigh Industries of Canada Ltd. 17,000,000 DFl
--------------------------------------------------------------------------------
Raleigh Industries of Canada Ltd. 5,000,000 C$
================================================================================
of which up to:
(i) DM64,000,000 (or the equivalent thereof in Optional Currencies)
may be made available by the Ancillary Banks to those Borrowers
as Ancillary Facilities LESS the Deutschmark Amount of any
outstanding Standby L/Cs at such time; and
(ii) up to DM15,000,000 (or its equivalent thereof in Optional
Currencies) may be utilised by those Borrowers by means of
Standby L/Cs; and
(b) the full amount of the Facilities may be utilised (in accordance with
the terms and conditions of this Agreement) by the Borrowers on the
Business Day immediately following Closing of which up to:
(i) DM214,000,000 (or its equivalent in Optional Currencies) (or, if
a Bank has acceded to the Agreement pursuant to Clause 2.4, DM
225,000,000, (or its equivalent thereof in Optional Currencies)
may be made available by way of Advances by the Banks under the
Revolving Facility;
37
(ii) DM64,000,000 or the equivalent thereof in Optional Currencies
or, if a Bank has acceded to the Agreement pursuant to Clause
2.4, DM65,000,000 (or the equivalent thereof in Optional
Currencies) may be made available by the Ancillary Banks to the
Borrowers as Ancillary Facilities LESS the Deutschmark Amount of
any outstanding Standby L/Cs at such time; and
(iii) up to DM15,000,000 (or its equivalent thereof in Optional
Currencies) may be utilised by means of Standby L/Cs,
Provided that, subject to the terms and conditions of this Agreement, at no
time shall the aggregate Deutschmark Amount of outstanding Advances,
Standby L/Cs, amounts owing and unpaid under Clause 11.3 and Ancillary
Commitments exceed DM214,000,000 or, if a Bank has acceded to the Agreement
pursuant to Clause 2.4. DM225,000,000.
(c) Upon a Bank acceding to this Agreement as an Acceding Bank and the amount
of the Revolving Facility being increased by DM11,000,000 the Standby L/C
Commitment of each of the Banks (including the Acceding Bank) shall be
adjusted by the Facility Agent by reducing the Standby L/C Commitment of
each Bank by a factor of 214/225 such that, following such adjustment, the
aggregate of the Standby L/C Commitments equal DM15,000,000 (adjusted to
take into account any reduction or cancellation made hereunder as at such
time).
2.2 NATURE OF BANKS' OBLIGATIONS AND RIGHTS
(a) The obligations of each of the Banks under this Agreement are several. The
failure of a Bank to perform any of its obligations will not:
(i) increase the liability of any other Bank under this Agreement nor
impose any liability on the Facility Agent; or
(ii) relieve any other Party from their respective obligations under this
Agreement.
(b) The rights of a Finance Party under this Agreement are several. A Finance
Party may, except as otherwise stated in this Agreement, separately enforce
those rights.
2.3 NATURE OF BORROWERS' RIGHTS AND OBLIGATIONS HEREUNDER
(a) RIGHTS AND OBLIGATIONS: The obligations of the Borrowers under this
Agreement in their capacities as such shall be separate and independent and
not joint and several, provided that the Company and not the other
Borrowers (save in their capacity as Guarantors) shall be liable for:
(i) payment of all amounts becoming due under Clause 15 to the extent that
such amounts are not referable to Utilisations made by or to monies
received or receivable from or to Revolving Commitments or, as the
case may be, Standby L/C Commitments which are only available (subject
to satisfaction of conditions) for drawing by a particular Borrower or
Borrowers or are not
38
otherwise in the reasonable opinion of the Facility Agent referable to
a particular Borrower or Borrowers: and
(ii) payment of all amounts due under Clause 25, to the extent that in the
reasonable opinion of the Facility Agent such amounts are not
referable to a particular Borrower or Borrowers.
(b) FACILITY AGENT'S DETERMINATION: The written determination of the Facility
Agent with regard to any matter which is to be determined according to its
reasonable opinion shall, in the absence of manifest error, be conclusive.
No Person shall have any recourse to the Facility Agent in relation to any
such determination if it proves to be the case that its opinion was
incorrect.
(c) COMPANY AS OBLIGORS' AGENT: Each Obligor (other than the Company) by its
execution of this Agreement or an Accession Agreement irrevocably
authorises the Company to act on its behalf as its agent in relation to the
Senior Finance Documents and irrevocably authorises the Company on its
behalf to give all notices and instructions (including, in the case of a
Borrower, any Request), to execute on its behalf any Accession Agreement
and to make such agreements capable of being given or made by any Obligor
notwithstanding that they may affect such Obligor without further reference
to or the consent of such Obligor and such Obligor shall be bound thereby
as though such Obligor itself had given such notices and instructions
(including, without limitation any Request) or executed or made such
agreements.
(d) COMPANY'S ACTS BINDING: Every act, omission, agreement, undertaking,
settlement, waiver notice or other communication given or made by the
Company under this Agreement, or in connection with this Agreement,
(whether or not known to any other Obligor and whether occurring before or
after such other Obligor became an Obligor under this Agreement) shall be
binding for all purposes on all other Obligors as if the other Obligors had
expressly made, given or concurred with the same. In the event of any
conflict between any notices or other communications of the Company and any
other Obligor, those of the Company shall prevail. For the avoidance of
doubt, references in this Clause 2.3(d) to "Company" shall include the
Company acting in its capacity as Obligors' Agent.
2.4 BANK ACCESSION NOTICE
Subject to Clause 2.5 the Company may, at any time prior to the date of
falling 3 months of this Agreement (the "ACCESSION DATE") nominate a
reputable financial institution to become an Acceding Bank on such
Accession Date in which event:
(i) the Company shall deliver to the Facility Agent, at least 5 Business
Days prior to the Accession Date a Bank Accession Notice from such
financial institution agreeing to be bound by the provisions of this
Agreement together with each of the documents referred to therein
(each in a form acceptable to the Facility Agent); and
(ii) upon such Accession Date, such financial institution shall become an
Acceding Bank for the purposes hereof, and the Facility Agent, such
Acceding Bank and
39
each of the other parties hereto shall acquire the same rights and
assume the same obligations between themselves as they would have
acquired and assumed had such financial institution being an original
party hereto with a Revolving Commitment, a Standby L/C Commitment and
an Ancillary Commitment (which shall equal its Revolving Commitment)
equal to the amount expressed in its Bank Accession Notice.
2.5 MAXIMUM TOTAL COMMITMENTS
The Total Commitment shall not at any time exceed DM225,000,000 (or its
equivalent thereof in Optional Currencies).
3. PURPOSE OF FACILITIES
(a) The proceeds of each Utilisation (if any) made on the date of Closing shall
be applied as follows:
(i) first in or towards financing repayment in full by the relevant
Borrower its portion of the Existing Financial Indebtedness or, in the
case of any Standby L/C issued on behalf of a Borrower in or towards
the support of any of its existing Permitted Financial Indebtedness
and in each case in accordance with the Funds Flow Memorandum at
Closing; and
(ii) second in or towards financing payment by the Company of the
Transaction Costs.
(b) The proceeds of each Utilisation hereunder (other than the Utilisations (if
any) made on the date of Closing) shall be applied in or towards financing
the general working capital requirements and/or other corporate purposes of
the relevant Borrower and its Subsidiaries, or, in the case of a Standby
L/C, such standby L/C shall be issued to support the relevant Borrower's
Permitted Financial Indebtedness provided by the Beneficiary of such
Standby L/C to such Borrower.
(c) Without affecting the obligations of any of the Borrowers under (a) or (b)
above, no Finance Party shall be obliged to concern itself with the
application of amounts raised by any of the Borrowers under this Agreement.
(d) Each Borrower undertakes that no Advance,Standby L/C or Ancillary Facility
shall be used in any way which would be illegal under, or would cause the
invalidity or unenforceability (in whole or in part) of any Senior Finance
Document under any applicable law.
4. CONDITIONS PRECEDENT TO FIRST UTILISATION
The obligations of each Finance Party to the Company and the Borrowers under
this Agreement are subject to the condition precedent that on or before Closing:
(a) the Facility Agent shall have received all of the documents and evidence
listed in Schedule 6 in each case in the agreed form or, where there is no
agreed form, in form
40
and substance satisfactory to the Facility Agent. Each of the documents
referred to in Schedule 6 as being certified shall be certified by an
Authorised Signatory of the relevant Obligor as being genuine and in full
force and effect (and, if a copy, as being true and complete) as at the
date such document is required to be delivered; and
(b) all of the representations and warranties in Clause 18.1 being correct in
all material respects on Closing and no Default having occurred with
respect to the Company or any of its Subsidiaries and be continuing
immediately before the making of the Utilisations to be made on Closing and
the refinancing of the Existing Financial Indebtedness by reference to the
facts and circumstances subsisting immediately before the making of such
Utilisation nor will a Default occur if the initial Utilisations are made
as contemplated in this Agreement.
5. CONDITIONS PRECEDENT TO EACH UTILISATION BY WAY OF ADVANCES AND STANDBY
L/CS
The obligation of each Bank to participate in any Utilisation by way of
Advances or Standby L/Cs is subject to the condition precedent that:
(a) on both the date that the relevant Request is delivered to the
Facility Agent and the Drawdown Date for that Advance or Issue Date
for that Standby L/C (as the case may be):
(i) no Default has occurred which is either continuing or has not
been waived in writing by the Facility Agent pursuant to Clause
32;
(ii) the representations in Clause 18.1 which are to be repeated
pursuant to Clause 18.2 on those dates are true and correct;
and
(iii) no other event is outstanding which constitutes (or with the
giving of notice, lapse of time, determination of maturity or
the fulfilment of any other applicable condition or any
combination of the foregoing, is reasonably likely to
constitute) a default under any document which is binding on
any Obligor or any Material Group Member or any asset of such
Obligor or Material Group Member to an extent or in a matter
which might have a material adverse effect on the financial
condition of any Obligor or Material Group Member or the
ability of any Obligor to perform its obligations under the
Finance Documents; and
(b) if the information contained in the latest Borrowing Base Summary
delivered under this Agreement relates, in respect of Eligible
Finished Goods, Eligible Raw Materials or Trade Payables, to a date
occurring 50 or more days prior to such Request and, insofar as the
information relates to Eligible Receivables or Cash, such information
relates to a date occurring more than 10 days prior to the Request an
updated Borrowing Base Summary has been delivered to the Facility
Agent such that the information contained therein in respect of
Eligible Finished Goods, Eligible Raw Materials and Trade Payables
does not relate to a date occurring more than 50 days prior to such
Request and the
41
information contained therein in respect of Eligible Receivables and
Cash does not relate to a date occurring more than 10 days prior to
such Request.
6. UTILISATION OF THE FACILITIES
6.1 DELIVERY OF A DRAWDOWN REQUEST
(a) Subject to the terms and conditions of this Agreement (including, without
limitation, Clause 6.15) the Obligor's Agent may utilise the Revolving
Facility by delivering to the Facility Agent, not later than 11.00 a.m. on
the day falling three Business Days before the Drawdown Date for that
Advance, a duly completed Drawdown Request (save in respect of the
Utilisation of the Revolving Facility to be made on Closing which may be
requested by delivery of a duly completed Drawdown Request no later than
9.00 a.m. on the day falling two Business Days before the Drawdown Date for
such Advances provided that the Facility Agent has previously confirmed to
the Company that Clause 4 has been satisfied).
(b) Each Drawdown Request delivered to the Facility Agent shall oblige the
relevant Borrower to borrow the Requested Amount on its Drawdown Date on
the terms and on the conditions stated in this Agreement
(c) No more than 15 Advances may be outstanding at any time.
(d) Lyon Investments B.V. may not utilise or attempt to utilise the Revolving
Facility.
6.2 COMPLETION OF DRAWDOWN REQUEST
Each Drawdown Request delivered to the Facility Agent pursuant to Clause 6.1
shall be irrevocable and shall not be considered to have been duly completed
unless it specifies:
(a) the proposed Drawdown Date, which shall be a Business Day occurring during
the Availability Period;
(b) the identity of the Borrower;
(c) the Requested Amount of the proposed Advance which shall be a Deutschmark
Amount which is less than or equal to the Adjusted Available Amount for
such Utilisation and which, if less than the Adjusted Available Amount for
such Utilisation is a minimum amount of DM5,000,000 and an integral
multiple of DM1,000,000 and, in the case of the Company, shall be an amount
which when aggregated with all its other outstandings hereunder including,
for the avoidance of doubt, any contingent obligation the Company may have
in respect of any outstanding Standby L/C (other than in its capacity as a
Guarantor)) will not exceed the Deutschmark Equivalent of $7,500,000 taking
into account the Deutschmark Amount of any Advances scheduled to be made,
repaid or prepaid and any Standby L/Cs scheduled to be issued or to expire
by assuming that the same occurs when due.;
(d) the currency of the Advance (being Deutschmarks or an Optional Currency);
42
(e) the Term of the Advance being requested, which shall be a period of one,
two or three months (or such other duration as the Banks may have
previously agreed in writing for such Advances) which will begin on the
proposed Drawdown Date and end on a Business day which is or precedes the
Final Repayment Date save in respect of any Advance made between the date
of this Agreement and the date falling three months thereafter, each of
which shall be of such duration as the Facility Agent shall determine
(acting reasonably) having regard to the syndication process (provided that
each such Term shall be at least seven days and not exceed one month); and
(f) the account to which the proceeds of the proposed Utilisation are to be
paid (which, in the case of each of the Advances that are drawndown on the
date of Closing, shall be a Blocked Account).
6.3 AMOUNT OF EACH BANK'S PARTICIPATION IN AN ADVANCE
(a) Subject to the terms of this Agreement, each Bank shall, on the date
specified in any Drawdown Request for an Advance, make available to the
Facility Agent in the currency of the Advance concerned for the account of
the relevant Borrower the amount of its participation in that Advance in
the proportion (applied to the Requested Amount) which its Revolving
Commitment bears to the amount of the Total Commitments, the amount of a
Bank's Revolving Commitment and the Total Commitments being reduced to take
account of the amount of the Ancillary Commitment of any Ancillary Bank at
such time). All such amounts shall be made available to the Facility Agent
in accordance with Clause 13.1 for disbursement to or to the order of the
relevant Borrower in accordance with the provisions of this Agreement;
(b) If a Bank's Revolving Commitment is reduced in accordance with this
Agreement after the Facility Agent has received a Drawdown Request, then
such part of the proposed Utilisation as is attributable to that Bank and
exceeds its portion of the Revolving Facility Available Amount (as so
reduced) shall not be made and the amount of such Utilisation shall be
reduced accordingly.
6.4 DELIVERY OF A STANDBY L/C REQUEST
(a) Subject to the terms and conditions of this Agreement (including, without
limitation, Clause 6.15) the Obligors' Agent may utilise the Standby L/C
Facility by delivering to the Facility Agent, not later than 11.00 a.m. on
the day falling five Business Days or, if the Standby L/C requested on
behalf of a Borrower (the "REQUESTED STANDBY L/C") has an Issue Date that
coincides with the Expiry Date of an outstanding Standby L/C (the
"OUTSTANDING STANDBY L/C") issued on behalf of such Borrower, the
Beneficiary of the Requested Standby L/C is the same Beneficiary as the
Beneficiary of the Outstanding Standby L/C and the Requested Standby L/C is
requested to be in the same currency and for the same amount as the
Outstanding Standby L/C, three Business Days before the Issue Date for that
Standby L/C, a duly completed Standby L/C Request (save in respect of the
Utilisation of the Standby L/C Facility to be made on Closing which may be
requested by delivery of a duly completed Standby L/C Request no later than
9.00 a.m. on the day falling two Business Days before the Issue
43
Date for such Standby L/C Provided that the Facility Agent has previously
confirmed to the Company that Clause 4 has been satisfied).
(b) Each Standby L/C Request delivered to the Facility Agent shall oblige the
relevant Borrower to incur liabilities under this Agreement equal to the
Requested Amount on its Issue Date on the terms and on the conditions
stated in this Agreement.
(c) No more than 5 Standby L/Cs may be outstanding at any time.
(d) Lyon Investments B.V. may not utilise or attempt to utilise the Standby L/C
Facility.
6.5 COMPLETION OF STANDBY L/C REQUEST
Each Standby L/C Request delivered to the Facility Agent pursuant to Clause 6.4
shall be irrevocable and shall not be considered to have been duly completed
unless it specifies:
(a) the proposed Issue Date, which shall be a Business Day occurring during the
Availability Period;
(b) the identity of the Borrower;
(c) the Requested Amount of the proposed Utilisation which shall be a
Deutschmark Amount which is less than or equal to the lesser of (i) the
then Adjusted Available Amount and, (ii) the then Standby L/C Available
Facility Amount for such Utilisation and which, if less than the lesser of
the Adjusted Available Amount and the Standby L/C Available Amount for such
Utilisation is a minimum amount of DM3,000,000 and an integral multiple of
DM1,000,000, Provided that, without prejudice to the foregoing, in the case
of the Company, the Requested Amount shall be an amount which, when
aggregated with all its other outstandings hereunder (including, for the
avoidance of doubt, any contingent obligation the Company may have in
respect of any outstanding Standby L/C (other than in its capacity as a
Guarantor), will not exceed the Deutschmark Equivalent of $7,500,000 taking
into account the Deutschmark Amount of any Advances scheduled to be made,
repaid or prepaid and any Standby L/Cs scheduled to be issued or to expire
by assuming that the same occurs when due. Provided that and without
prejudice to the foregoing at no time shall the aggregate Deutschmark
Amount of Standby L/Cs issued on behalf of and Ancillary Facilities
outstanding to, the South African Borrowers exceed DM11,000,000;
(d) the currency of the Standby L/C (being Deutschmarks or an Optional
Currency);
(e) the Expiry Date of such Standby L/C which shall be no more than twelve
months after the Issue Date of such Standby L/C and be no later than the
Final Repayment Date save in respect of a Utilisation of the Standby
Facility made between the date of the Agreement and the date falling three
months thereafter, each of which shall have an Expiry Date determined by
the Facility Agent (acting reasonably) having regard to the syndication
process provided that it shall be at least seven days after its respective
Issue Date; and
44
(f) the identity of the Beneficiary, together with such other details relating
thereto and the liabilities of the Borrower to which the Standby L/C
relates as the Facility Agent shall consider appropriate.
6.6 ISSUING OF STANDBY L/CS
(a) If a Borrower requests the issuing of a Standby L/C in accordance with this
Agreement, then, subject to sub-paragraph (c) below and Clause 16.2, with
effect from the proposed Issue Date for such Standby L/C the Facility Agent
on behalf of each of the Banks that are to participate in the issue of such
Standby L/C shall issue the same to the relevant Beneficiary, the amount of
each such Banks' participation in that Standby L/C being the proportion
(applied to the Requested Amount) which its Revolving Commitment bears to
the amount of the Total Commitments (the amount of a Ancillary Banks'
Revolving Commitment and the Total Commitments being reduced to take amount
of the amount of the Ancillary Commitment of any Ancillary Bank at such
time).
(b) If a Bank's Standby L/C Commitment is reduced in accordance with this
Agreement after the Facility Agent has received a Standby L/C Request, then
such part of the proposed Utilisation as is attributable to that Bank and
exceeds its portion of the Standby L/C Available Facility Amount (as so
reduced) shall not be made and the amount of such Utilisation shall be
reduced accordingly.
(c) If at any time following delivery of a Standby L/C Request, and prior to
the issuance of the Standby L/C requested therein any Bank notifies the
Facility Agent that it does not agree, by reason of, the Beneficiary
thereof being an institution which appears in the Specially Designated
National and Blocked Persons List produced by the U.S. Government Office of
Foreign Assets Control or on any other such Governmental list or list of
any Supranational authority in any other relevant jurisdiction in which
such Bank is resident, domiciled or has its Facility Office or is an
institution which is not similarly vetoed by any Government or
Supranational entity in relation to such Bank in such jurisdiction that
such Standby L/C be issued, the Facility Agent shall, promptly upon receipt
of such notification inform each of the other Finance Parties and such
Standby L/C Request shall be treated, for all purposes, as if it had not
been delivered and be void ab initio and the Standby L/C requested therein
shall not be made.
(d) The maximum amount required to be paid by the Banks under or in respect of
a Standby L/C shall not exceed the "Maximum Amount" (as defined in such
Standby L/C) notwithstanding any payments made in respect of such Standby
L/C by any Group Member, whether pursuant to Clause 11.3 or otherwise.
6.7 FACILITY AGENT'S AUTHORITY
For the purposes of Clause 6.6 each Bank hereby authorises the Facility Agent to
complete each Standby L/C in which such Bank is to participate (which it shall
do through its Facility Office) in the manner contemplated by the relevant
Standby L/C Request and this Agreement and to sign such Standby L/C on its
behalf and to issue the same to the relevant Beneficiary.
45
6.8 COPY OF STANDBY L/C
The Facility Agent shall, promptly following the issue of a Standby L/C pursuant
to Clause 6.6, forward a copy thereof to the Company, the relevant Borrower on
whose behalf such Standby L/C was issued and to each Bank participating therein.
6.9 NO ENQUIRY
No Finance Party need, before the issue of any Standby L/C, make any enquiry or
otherwise concern itself as to whether any event has occurred which, under the
terms hereof, would relieve such Finance party from its obligations to issue or
to participate in the issue of such Standby L/C and accordingly no Borrower
shall have any right to resist any claim under Clause 11.3 or otherwise on the
ground that the relevant event had occurred before the issue of such Standby
L/C.
6.10 DEFINITIONS
For the purposes of determining the Adjusted Available Amount Clause 6.2(c) and
6.5(c), and the Standby L/C Available Facility Amount in Clause 6.5(c) and
otherwise in this Agreement:
"ACCOUNT DEBTOR" in relation to any Person means any other Person who is or may
become obligated to such Person under, with respect to, or on account of, an
Account;
"ACCOUNTS" in relation to any Person means all accounts, accounts receivable,
other receivables, contract rights, instruments, documents, and notes, whether
now owned or hereafter acquired by such Person arising out of the sale, lease or
disposal of goods or provision of services by such Person in the ordinary course
of its trade which constitute a legal, valid and binding obligation of the
relevant Account Debtor (each an "ACCOUNT");
"ADJUSTED AVAILABLE AMOUNT" in relation to an Obligor means the lesser of:
(a) in respect of the Revolving Facility, the amount of the Revolving Facility
Available Amount and in respect of the Standby L/C Facility, the amount of
the Standby L/C Facility Available Amount; and
(b) the Deutschmark Equivalent at or about 11:00 a.m. on the Business Day
preceding the date of the relevant Request delivered to the Facility Agent
in respect of the relevant Advance or, as the case may be, the relevant
Standby L/C of the Adjusted Borrowing Base of the relevant Obligor;
"ADJUSTED BORROWING BASE" in relation to any Obligor and any Request, means at
any time:
(a) the amount of the Borrowing Base relating to such Obligor;
(b) LESS the aggregate Deutschmark Amount of Ancillary Facilities (excluding
that portion of Ancillary Facilities which are solely available for foreign
exchange transactions) and Advances made to, and Standby L/Cs issued on
behalf of, such Obligor that are, at such time, outstanding and, in respect
of a Utilisation, not scheduled to be repaid or,
46
as the case may be, expire prior to or at the same time as such Utilisation
and, taking into account any other Utilisations requested by such Obligor
that are scheduled to be made or, as the case may be issued;
(c) LESS the Deutschmark Amount of such Obligor's Borrowing Base (if any) that
has been utilised at such time so as to increase the Adjusted Borrowing
Base of another Obligor under the provisions of this definition contained
in paragraph (d) below and taking into account any repayment of any Advance
scheduled to be made and the amount of any Standby L/C which is scheduled
to expire on or before the proposed Utilisation in relation to the Request
in question in respect of which such Obligor's Borrowing Base was so
utilised;
Provided that for the purposes of this definition, the sum of (a) minus (b)
minus (c) shall never be less than zero,
(d) PLUS (except in the case of the Company) the aggregate of the lesser of (in
respect of each Obligor (other than such Obligor itself and without double-
counting)):
(i) the Adjusted Borrowing Base at such time of each such Obligor; and
(ii) the Maximum Guarantee Amount of each such other Obligor at such time,
as the same is determined by the Facility Agent acting, where it
considers appropriate, on the advice of local counsel;
"BORROWING BASE" means, at any time;
(a) in relation to any Obligor incorporated in Germany or such other
country or countries as the Facility Agent may, from time to time
specify for this purpose having regard to applicable laws and current
trade practices therein the aggregate of:
(i) the sum of 50% of the aggregate of its Eligible Raw Materials
and its Eligible Finished Goods LESS the Deutschmark Equivalent
of such Obligor's Trade Payables ;
(ii) 80% of its Eligible Receivables after deducting (A) any VAT
payable thereon, (B) to the extent that such Obligor's Trade
Payables exceeds the Deutschmark Equivalent of the sum of such
Obligor's Eligible Raw Materials and its Eligible Finished Goods
an amount equal to such excess and (C) General Provisions; and
(iii) 100% of its Cash Collateral Amount,
PROVIDED THAT:
(iv) such Obligor's Borrowing Base shall be determined in accordance
with the order stated above; and
47
(vi) if any amount, determined in accordance with the above shall be
a negative figure, it shall be deemed to be zero for the purpose
of such determination; and
(b) in relation to any Obligor not incorporated in Germany or in respect
of which the Facility Agent has not specified as subject to paragraph
(a) above, the Deutschmark Equivalent of the aggregate of:
(i) 80% of its Eligible Receivables after deducting (A) VAT payable
thereon and (B) General Provisions;
(ii) the sum of 50% of the aggregate of its Eligible Raw Materials
and of its Eligible Finished Goods; and
(iii) 100% of its Cash Collateral Amount;
in each case determined by reference to the latest Borrowing Base
Summary.
"BORROWING BASE SUMMARY" means the information required to be prepared by or on
behalf of each Obligor and the Company pursuant to the terms hereof in the
agreed form in respect of each Obligor's Eligible Receivables, Eligible Finished
Goods, Eligible Raw Materials, Cash Collateral Amount and, if applicable, Trade
Payables and delivered on a monthly basis in any event and more frequently if
required pursuant to the terms hereof and all schedules appendices and other
documents exhibited or attached thereto;
CASH COLLATERAL AMOUNT" in relation to an Obligor, means the amount from time to
time standing to the credit of each account of such Obligor from time to time
subject to the terms of a Debenture or an Irish Debenture relating to such
Obligor;
"ELIGIBLE FINISHED GOODS" in relation to any Obligor, means an amount equal to
the lower of cost and the market value of the Inventory of such Obligor which
consists only of finished goods (as determined by reference to Applicable
Accounting Principles) and which is:
(a) subject to the security granted by or pursuant to the Security Documents
and in compliance therewith and;
(b) insured in accordance with the requirements of the Senior Finance
Documents,
Provided that, in respect of any Obligor:
(i) all finished goods:
(AA) against which such Obligor has made or should have made a provision or
reserve in accordance with the Approved Provisioning Procedure shall
not be included:
(BB) all finished goods which are held by or in the possession of Person(s)
other than the relevant Obligor in relation to whom "ELIGIBLE FINISHED
GOODS" falls to be determined (unless held by such Person to the order of
or on trust or as bailee (subject to the
48
trustee or bailee having no right or interest thereto or therein other than
a Permitted Encumbrance) for the relevant Obligor) shall not be included;
and
Provided further that this definition may be amended, varied or supplemented by
the Facility Agent (acting on the advice of local counsel) so as to reflect any
changes to applicable laws or regulations so as to afford the Finance Parties
the same level of protection in respect of such Obligor and its "finished goods"
as at the date of this Agreement, or, in the case of an Acceding Borrower or as
the case may be, an Acceding Guarantor, as the date it became a party to this
Agreement; and
"ELIGIBLE RAW MATERIALS" in relation to any Obligor, means an amount equal to
the lower of cost and the net realisable value of the Inventory of such Obligor
which consists of raw materials and consumables (as defined by reference to
Applicable Accounting Principles) which is:
(a) subject to the security granted by or pursuant to the Security Documents
and in compliance therewith; and
(b) insured in accordance with the requirements of the Senior Finance
Documents;
(i) Provided that in respect of any Obligor:
(a) all Inventory which consists only of raw materials and consumables as
determined by reference to Applicable Accounting Principles against
which the Obligor has made or should have made a provision or reserve
in accordance with the Approved Provisioning Procedure shall not be
included to the extent of such provision or reserve shall not be
included; and
(b) all Inventory which consists only of raw materials and consumables (as
determined in accordance with Applicable Accounting Principles) which
is held by or in the possession of Person(s) other than the relevant
Obligor in relation to whom "ELIGIBLE RAW MATERIALS" falls to be
determined (unless held by such Person to the order of or on trust or
as bailee (subject to the trustee or bailee having no right or
interest thereto or therein other than pursuant to a Permitted
Encumbrance) for such Obligor shall not be included; and
(c) this definition may be amended, varied or supplemented by the Facility
Agent (acting on the advice of legal counsel) so as to reflect any
changes to applicable laws or regulations so as to afford the Finance
Parties the same level of protection in respect of the Obligor and its
Inventory which consists only of raw materials and consumables (as
determined in accordance with Applicable Accounting Principles) as at
the date of this Agreement, or, in the case of an Acceding Obligor or,
as the case may be, an Acceding Guarantor the date it became a party
to this Agreement:
"ELIGIBLE RECEIVABLES" in relation to any Obligor means the amount of the gross
outstanding balance, less all finance charges, late fees and other fees which
are unearned, of Accounts which are:
49
(a) subject to the security granted by or pursuant to the Security Documents
and in compliance therewith and;
(b) insured in accordance with the requirements of the Senior Finance
Documents;
Provided that in respect of any Obligor, Accounts shall not be included if:
(i) the Account Debtor has taken any corporate action or other steps
have been taken or legal proceedings have been started for its
winding-up, administration, dissolution or re-organisation or for
the appointment of a receiver, administrator, administrative
receiver, trustee or similar officer of it or of any or all of its
revenues and assets or the Account Debtor is or has been deemed
unable to pay its debts as they fall due, commenced negotiations
with any one or more of its creditors with a view to the general
readjustment or rescheduling of its indebtedness or has made a
general assignment for the benefit of or a composition with its
creditors or a moratorium in respect of all or any indebtedness has
been applied for, ordered or declared;
(ii) such Account(s) are outstanding for a period exceeding 30 days after
the due date (provided that if the due date is not specified, the
due date shall be deemed to be 30 days after the date of the
relevant invoice) or such other period as the Facility Agent shall
in its discretion deem to be the minimum such period;
(iii) the Account Debtor is a Group Member or an associate or employee
thereof;
(iv) such Account(s) relate to a transaction entered into on a sale or
return or similar basis;
(v) such Account(s) are payable more than 270 days after the date of the
relevant invoice or if less such other ageing basis as is specified
in the Borrowing Base Summary relating to such Obligor and, in any
event, such that they do not give rise to a breach of Clause
20.2(e);
(vi) such Account(s) have been prepaid to the extent of such prepayment;
(vii) such Account(s) are payable otherwise than in cash;
(viii) to the extent such Account(s) are subject to Encumbrances (other
than pursuant to the Security Documents), set off or selling
arrangements or are the subject of any legal action or dispute by
the Account Debtor;
(ix) such Account(s) are not evidenced by an invoice or in writing;
(x) such Account(s) arise under any licence and the Account Debtor is
wholly or partly owned (directly or indirectly) by any Group Member;
and
(xi) any Account owed by an Account Debtor in respect of which the
Obligor has made a provision as a result of the Obligor's
determination of such Account
50
Debtors' creditworthiness and such Account is not excluded pursuant
to one or more of paragraphs (i) -(x) above; and
Provided further that this definition may be amended, varied or supplemented by
the Facility Agent (acting on the advice of legal counsel) so as to reflect any
changes to applicable laws or regulations so as to afford the Finance Parties
the same level of protection in respect of such Obligor and its "Accounts" as at
the date of this Agreement, or, in the case of an Acceding Borrower or, as the
case may be, an Acceding Guarantor the date it became a party to this Agreement;
"INVENTORY" in relation to an Obligor, means any and all inventory and other
stocks in all of its forms, wherever located, now or hereafter existing and
whether acquired by purchase, merger or otherwise and all raw materials and
work-in-progress, all finished goods thereof and all materials used or consumed
in the manufacture, in each case, determined in accordance with Applicable
Accounting Principles;
"MAXIMUM GUARANTEE AMOUNT" means, in respect of any Obligor and a particular
Borrower, at any time, the maximum Deutschmark Amount such Obligor would be able
to pay (net of any Tax or other amounts payable (other than to the Facility
Agent) in connection therewith) to the Facility Agent under its Guarantee if a
demand was made thereunder at such time in accordance with the terms and
conditions of its Guarantee in respect of any amounts payable by such Borrower
under the Senior Finance Documents without contravening any existing applicable
law, statute, rule or regulation or any judgment, decree, consent (including, in
respect of a Guarantor incorporated in South Africa, the applicable Exchange
Control Undertaking) or permit to which such Obligor is subject, or conflict
with, or result in any breach of any of the terms of, or constitute a default
under any agreement or other instrument to which such Obligor is expressed to be
party or is subject to or by which it, or any of its property is bound;
"REVOLVING FACILITY AVAILABLE AMOUNT" at any time means the aggregate amount of
the Revolving Commitments (taking into account any reduction in the Revolving
Commitment of a Bank which is an Ancillary Bank, as provided for in Clause 7 and
the reduction in the Total Commitments, as provided for in Clause 11.1) LESS the
aggregate of:
(a) the Deutschmark Amount of the outstanding Advances at such time, taking
into account, in respect of a proposed Utilisation, any Advances scheduled
to be made, repaid or prepaid by assuming that the same occurs when due;
and
(b) the undrawn portion of all Standby L/Cs issued under this Agreement that
are outstanding at such time PLUS any amounts due and payable by any
Borrower under Clause 11.3 in respect of any Standby L/C but unpaid and
taking into account any Standby L/Cs scheduled to be issued or expire by
assuming that the same occurs when so scheduled;
"STANDBY L/C FACILITY AVAILABLE AMOUNT" at any time in respect of the Standby
L/C Facility means the lesser of:
(a) the amount of the Standby L/C Commitments taking into account any reduction
in the Standby L/C Commitment of a Bank which is an Ancillary Bank, as
provided for at
51
Clause 7 LESS (i) the aggregate of the undrawn portion of all Standby L/Cs
issued under this Agreement that are outstanding at such time and (ii) any
amount due and payable by any Borrower under Clause 11.3 in respect of any
Standby L/C but unpaid and taking into account any Standby L/Cs scheduled
to be issued or to expire by assuming that the same occurs when so
scheduled; and
(b) the Revolving Facility Available Amount; and
"TRADE PAYABLES" means, in relation to an Obligor and at any time, the amount
owed to trade creditors (other than another Group Member) in respect of the
supply of Inventory to such Obligor at such time by such Obligor.
6.11 CALCULATION
When calculating the Eligible Receivables, Eligible Finished Goods, the Eligible
Raw Materials or Trade Payables of any Obligor such calculation shall be made in
the Local Currency of such Obligor.
6.12 DETERMINATION
The Facility Agent shall determine from time to time the Adjusted Available
Amount by reference to each of the then latest relevant Borrowing Base Summaries
delivered to the Facility Agent pursuant to the terms hereof provided that the
Facility Agent shall not be required to have regard to any Borrowing Base
Summary which is delivered to it later than two Business Days prior to the date
of such determination.
6.13 UNDRAWN AMOUNT
Any part of the Facilities undrawn or unutilised at the end of its respective
Availability Period shall be immediately cancelled.
6.14 DEUTSCHMARKS IN LIEU OF OPTIONAL CURRENCY
Notwithstanding that any Borrower has in any Request delivered hereunder made a
request for a Utilisation in an Optional Currency any Bank may by notification
to the Facility Agent at any time up to the notification of LIBOR in respect of
such Utilisation or, in relation to a Utilisation by way of Standby L/C's issue,
confirm that it is unwilling to participate in such Utilisation in such Optional
Currency in which case it shall, if it would otherwise be required to
participate in such Utilisation in such Optional Currency, not be obliged to do
so, but instead be required to participate in such Utilisation in Deutschmarks.
6.15 DUTCH BORROWERS
At all times following the date falling 30 days after the date of this Agreement
the Company shall procure that no Borrower, other than the Company, shall
utilise the Revolving Facility or the Standby L/C Facility at any time if, at
such time, the aggregate Deutschmark Amount of Advances drawn down by Gazelle is
less than the Deutschmark equivalent of 75 per cent of the sum of the book value
of the gross assets of Gazelle at such time determined in accordance with
Applicable Accounting Principles and for this purpose:
52
(a) If Gazelle has Subsidiaries, the calculation shall be made by using the
gross assets of it and its Subsidiaries; and
(b) the calculation of gross assets shall be made by reference to the latest
Financial Accounts of Gazelle or, as the case may be a consolidation of the
Financial Accounts of it and its Subsidiaries used for the purpose of the
then latest unaudited quarterly or audited annual consolidated Financial
Accounts of the Group delivered to the Facility Agent under Clause 19.1.
7. ANCILLARY FACILITIES
7.1 ANCILLARY FACILITIES
(a) Subject to the terms and conditions of this Agreement the Obligors' Agent
may from time to time by notice in writing to the Facility Agent, request
the establishment of an Ancillary Facility by an Ancillary Bank, each such
Ancillary Facility to become available with effect from the date (the
"EFFECTIVE DATE") (or such later date as the Obligors' Agent and the
Facility Agent may agree from time to time) specified in such notice being
a date not less than seven Business Days after the date such notice is
received by the Facility Agent. Any such notice shall specify:
(i) the proposed Borrower;
(ii) the proposed Effective Date and expiry date for the Ancillary
Facility concerned being, in the case of the expiry date, a Business
Day on or prior to the Final Repayment Date;
(iii) the type of the proposed Ancillary Facility which may be a committed
overdraft facility, BACS, cheque drawing, letter of credit,
guarantee, foreign exchange, banking and/or such other cash
management facility as such Ancillary Bank may agree provided that
no Ancillary Facility shall be made available in respect of any
currency other than Deutschmarks or an Optional Currency or such
other currencies as are notified to the Facility Agent by the
Borrower;
(iv) the proposed Ancillary Bank;
(v) the Ancillary Commitment under the proposed Ancillary Facility at
any time (which, when aggregated with the actual and contingent
liability of such Ancillary Bank under all other Facilities made
available by it, shall not exceed such Ancillary Bank's Revolving
Commitment); and
(vi) the portion (if any) of the Ancillary Facility that may be utilised
by way of overdraft, advance, letter of credit or similar facilities
and the portion (if any) that may be utilised for the purpose of
foreign exchange transactions; and
(vii) such other details as to the nature, amount and operation of the
proposed Ancillary Facility as the Facility Agent may reasonably
require,
53
and the Facility Agent shall promptly notify each Bank upon receipt of any
such notice.
(b) Subject to the terms and conditions of this Agreement, any Bank so
nominated shall make the proposed Ancillary Facility available with effect
on and from the Effective Date subject to the approval of the Facility
Agent (acting reasonably) and the Facility Agent having received
notification from such Ancillary Bank that it approves of the proposed
Ancillary Facility.
(c) Any material variation in any Ancillary Facility or any proposed increase
or reduction in the amount thereof shall be effected on, and subject to the
provisions, mutatis mutandis, of this Clause 7.
(d) The maximum aggregate Ancillary Commitments under all of the Ancillary
Facilities at any time shall not exceed the lesser of (i) the Revolving
Facility Available Amount and (ii) DM64,000,000 or (its equivalent in
Optional Currencies) (or following the accession to this Agreement by the
Acceding Bank, DM75,000,000 (or its equivalent in Optional Currencies) LESS
(in either case), the sum of the Deutschmark Amount of any outstanding
Standby L/Cs at such time and any amounts due and payable by any Borrower
under Clause 11.3 in respect of any Standby L/C but unpaid and taking into
account any Standby L/Cs scheduled to be issued or expire by assuming that
the same occurs when so scheduled.
(e) Without prejudice to paragraph (d) the sum of the portions of the Ancillary
Facilities that may be utilised by way of overdraft, advance, letter of
credit or similar facilities may not exceed DM43,000,000 or its equivalent
in Optional Currencies and the sum of the portions of the Ancillary
Facilities that may be utilised for the purpose of foreign exchange
transactions may not exceed DM32,000,000 or its equivalent in Optional
Currencies in each case determined by reference to the definition
"Ancillary Outstanding".
(f) Any Ancillary Facility provided by an Ancillary Bank shall terminate no
later than the Final Repayment Date.
(g) Any amounts owing or outstanding under any Ancillary Facility and all
banking facilities provided thereunder on the Final Repayment Date shall be
repaid and/or, as the case may be, cancelled in full by the relevant
Borrower on the Final Repayment Date.
(h) Subject to the terms and conditions of this Agreement and without prejudice
to the proviso contained in Clause 7.2(f), the Revolving Commitment of an
Ancillary Bank shall be reduced by an amount equal to such Ancillary Bank's
Ancillary Commitment and its Standby L/C Commitment shall be reduced by a
proportionate amount, until such time as all or part of its Ancillary
Facility is cancelled, whereupon such Bank's Revolving Commitment shall be
increased by the amount its Ancillary Facility has been so cancelled and
its Standby L/C Commitment shall be increased by a proportionate amount.
54
(i) The maximum amount outstanding under Ancillary Facilities made to the
Company shall not at any time (when aggregated with all other outstandings
hereunder (including, for the avoidance of doubt, any contingent obligation
the Company may have in respect of any outstanding Standby L/C (other than
in its capacity as a Guarantor)) exceed the Deutschmark Equivalent of
$7,500,000 (determined by reference to the definition "Ancillary
Outstanding") taking into account any Advances scheduled to be made to, or
repaid or prepaid by the Company and Standby L/Cs issued on behalf of the
Company scheduled to be issued or expire by assuming that the same occurs
when so scheduled.
(j) Lyon Investments B.V. may not utilise or attempt to utilise the Ancillary
Facilities.
7.2 OPERATION OF ANCILLARY FACILITIES
(a) The rate of interest, fees and other remuneration in respect of each
Ancillary Facility shall be determined by agreement between the Ancillary
Bank and the relevant Borrower concerned and the interest, fees and other
remuneration for all Ancillary Facilities shall be based upon the normal
market rates and terms from time to time of the Ancillary Bank and shall
not be more onerous than the corresponding provisions (if any) of this
Agreement.
(b) In the case of inconsistency between any term of an Ancillary Facility and
of this Agreement, the terms of this Agreement shall prevail.
(c) Subject to Clause 7.2(a) and (b) above, the terms governing the operation
of any Ancillary Facility (including the terms of any counter-indemnity
required in connection therewith) shall be those determined by agreement
between the Ancillary Bank and the Borrower concerned, provided that such
terms are based upon normal commercial terms, save as may be varied by this
Agreement. A copy of any such terms shall on request by the Facility Agent
be provided by the Ancillary Bank to the Facility Agent (and each Borrower
consents to such copies being provided to the Facility Agent and, if
requested, any Bank).
(d) Each Borrower and each Ancillary Bank agrees with and for the benefit of
each Bank that the Ancillary Outstandings under any Ancillary Facility
provided by that Ancillary Bank shall not exceed the Revolving Commitment
of that Ancillary Bank or the amount of the relevant Ancillary Facility.
(e) Each Borrower and the Ancillary Bank will, promptly upon request by the
Facility Agent, supply the Facility Agent with such information relating to
the operation of each Ancillary Facility provided by such Ancillary Bank to
such Borrower (including, without limitation, the Ancillary Outstandings
thereunder) as the Facility Agent may from time to time request. Each
Borrower consents to all such information being released to the Facility
Agent and each Bank.
(f) No Ancillary Bank may, until notice has been served under Clause 21.2,
demand repayment of any moneys made available by it or demand cash cover in
respect of any guarantees, documentary credits or similar contingent
liabilities made available by it, under its Ancillary Facility or take any
action analogous to any of the foregoing under
55
any other type of banking arrangements provided by it under its Ancillary
Facility unless there is at such time an Advance available to be drawn down
under this Agreement in an amount equal to the amount so demanded under the
Ancillary Facility (provided that for the purposes of determining whether
or not an Advance is then available for drawdown the Revolving Commitment
of the relevant Ancillary Bank shall be deemed to be increased by the
amount (not exceeding the amount of its Ancillary Commitment) so demanded)
such Advance to be used to repay or provide cash cover in respect of the
amount so demanded under the Ancillary Facility. On and subject to the
terms of this Agreement, each of the Banks shall participate in any such
Advance in such amount as will result, after the making of such Advance, in
the proportion which the aggregate amount of its participation in the
Advances then outstanding bears to the aggregate amount of the Advances
then outstanding, being equal to the proportion which its Revolving
Commitment bears to the aggregate of the Revolving Commitments.
56
PART 3
8. INTEREST
8.1 STANDBY L/C COMMISSION
(a) The Borrower identified as such in the Standby L/C Request relating to a
Standby L/C shall, on the expiry of each period of three months after the
Issue Date of such Standby L/C and on the Expiry Date of such Standby L/C,
pay to the Facility Agent for the account of the Banks participating in
that Standby L/C a commission, such commission calculated by the Facility
Agent at the rate of the Margin on the amount of the undrawn portion of
that Standby L/C on each day during the period beginning on the Issue Date
of that Standby L/C is issued and ending on the Expiry Date of such Standby
L/C.
(b) If a Borrower procures the release of a Bank from its obligations under a
Standby L/C pursuant to Clause 16.2 such Bank shall not be entitled to any
commission occurring thereon after the date of such release.
8.2 INTEREST RATE
Subject to Clause 9, the rate of interest which shall accrue on each Advance
during its Term is the rate, per annum, determined by the Facility Agent to be
the aggregate of:
(a) LIBOR relative to such Advance for such Term;
(b) the Margin; and
(c) in the case of an Advance denominated in Sterling, the Additional Cost
applicable thereto from time to time during such Term.
8.3 DUE DATE
Save as otherwise provided in this Agreement, accrued interest on each Advance
during its Term is payable by the relevant Borrower in arrears on its Repayment
Date and, if any Term exceeds six months, on the expiry of each period of six
months during such Term.
8.4 DURATION
Interest shall accrue (both before and after judgment) from (and including) the
Drawdown Date for the relevant Advance to (but excluding) the date that such
Advance is repaid in full.
8.5 NOTIFICATION OF LIBOR BY FACILITY AGENT
The Facility Agent shall promptly notify each of the other Parties of any
determination of LIBOR made by it under this Agreement.
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9. DEFAULT INTEREST
9.1 FAILURE TO PAY
If any Borrower fails to pay any amount payable by it under this Agreement
or under the Security Documents on the due date (the unpaid balance being
an "OVERDUE AMOUNT"), such Borrower shall, pay default interest on the
Overdue Amount from (and including) the due date to (but excluding) the
date such Overdue Amount is repaid in full, both before and after judgment.
9.2 RATE
Subject to Clause 9.4, default interest shall be payable on an Overdue
Amount at a rate, per annum, determined by the Facility Agent to be equal
to the aggregate of two per cent. (2.00%) plus the Margin (which shall be
two per cent. (2.00%) per annum (and, in the case of an Overdue Amount
denominated in Sterling, the Additional Cost applicable thereto from time
to time) and LIBOR.
9.3 DEFAULT INTEREST PERIOD
The period during which an Overdue Amount is outstanding shall be divided
into successive periods (each a "DEFAULT INTEREST PERIOD"), each of which
(apart from the first) shall start on the last day of the preceding Default
Interest Period. The duration of each Default Interest Period shall (save
as provided at Clause 9.4) be selected by the Facility Agent having regard,
where possible, to the likely date that the relevant Overdue Amount will be
repaid in full.
9.4 UNEXPIRED PORTION
If any Overdue Amount corresponds to the principal amount payable in
respect of an Advance which has become repayable prior to its Repayment
Date, the first Default Interest Period which shall be selected by the
Facility Agent shall be of a duration equal to the unexpired portion of the
Term of such Advance. The rate of the default interest payable in respect
of such Overdue Amount during that unexpired period shall be two per cent.
(2.00%) over the rate which would have been applicable to such Advance had
it not so fallen due provided that the Margin applicable thereto shall, in
all circumstances, be two per cent. (2.00%) per annum.
9.5 ON DEMAND
Any interest which shall have accrued under this Clause 9 in respect of an
Overdue Amount shall be payable on demand and, if not paid, compounded at
the end of its then current Default Interest Period.
10. MARKET DISRUPTION
10.1 DISRUPTION EVENTS
If, in relation to any Advance and its Term relative thereto:
58
(a) "LIBOR" is to be determined to pursuant to paragraph (b) of the definition
thereof and no, or where there is more than one Reference Bank only one,
Reference Bank supplies an interest rate to the Facility Agent as required
by the definition of LIBOR after the Facility Agent has requested such a
rate from the Reference Banks; or
(b) the Facility Agent shall have received notification from a Bank or Banks
whose participations in such Advance constitute at least thirty five per
cent. (35%) by value of such Advance that by reason of circumstances
affecting the London Interbank Market generally:
(i) deposits in the currency of such Advance for the same period as such
Term will not be readily available to them in the London Interbank
Market in sufficient amounts in the ordinary course of business to
fund their respective participations in such Advance for such Term;
or
(ii) whilst such deposits are so available, the cost of such deposits
exceeds LIBOR as determined in relation to such Advance for such
Term; or
(c) the Facility Agent shall have received notification from any Bank (an
"AFFECTED BANK") that by reason of applicable law or regulation it is
unable to fund its participation in such Advance during such Term by
deposit(s) in the currency of such Advance obtained in the London Interbank
Marketing the ordinary course of business;
the Facility Agent shall promptly give written notice of such determination or
notification to the Obligors' Agent and each of the Banks.
10.2 EFFECT
After the giving of any notice by the Facility Agent following the occurrence of
any of the events referred to in Clause 10.1 if the requested Advance was to be
denominated:
(a) in an Optional Currency (other than Sterling or Dollars) such Advance shall
not be made; or
(b) in Deutschmarks, Sterling or Dollars, the requested Advance will, subject
to the terms and conditions of this Agreement, be made by the Banks, have a
Term of one month and bear interest during its Term at the rate determined
by the Facility Agent to be the aggregate of the Margin plus the rate
determined by each Bank before the Repayment Date of the Advance to be the
rate which expressed (as a percentage rate per annum) the cost of that Bank
of funding its portion of the Advance from whatever source it may select
(acting reasonably).
Within three Business Days of the Facility Agent giving a notice under Clause
10.1, the Facility Agent and the Company will enter into negotiations with a
view to agreeing a substitute basis for determining the rate of interest which
may be applicable to any future Advances. Any substitute basis that is agreed
shall be confirmed in writing, be deemed to be a term of this Agreement, take
effect in accordance with its terms and be binding on the Parties. The Facility
Agent confirms to the Banks that it will not agree to any substitute basis
without the prior consent of each Bank.
59
PART 4
11. REPAYMENT, PREPAYMENT AND CANCELLATION
11.1 REDUCTION OF THE FACILITY
On each date specified in Column 1 below (each such date being a "REDUCTION
DATE") the Total Commitments shall be reduced such that they are equal to
the amount set opposite such Reduction Date in Column 2 below LESS the
aggregate amount of Commitments that have been previously cancelled under
this Agreement prior to that Reduction Date otherwise than solely as a
result of the operation of this Clause 11.1 or Clause 7, whereupon the
Revolving Commitment of each Bank (including, for the avoidance of doubt,
the Revolving Commitment of each Ancillary Bank disregarding, for this
purpose its Ancillary Commitment) shall be reduced by a proportionate
amount and pro rata to their respective Revolving Commitments at such time
and the Standby L/C Commitments of the Banks shall be reduced by a
proportionate amount pro rata and the Company shall procure that the
aggregate Deutschmark Amount of all outstanding Advances, Standby L/Cs
Ancillary Facilities and amounts owing under Clause 11.3 (if any) shall on
such date (and at all times thereafter) not exceed the Total Commitments on
such date.
COLUMN 1 COLUMN 2
Reduction Date Total Commitments
Fifth anniversary of the date
of this Agreement DM194,000,000 (or, if a Bank has acceded as
an Acceding Bank, DM205,000,000)
Sixth anniversary of the date
of this Agreement DM169,000,000 (or, if a Bank has acceded as
an Acceding Bank, DM180,000,000)
Final Repayment Date Zero
11.2 REPAYMENT OF ADVANCES
(a) Each Borrower shall repay the full amount of each Advance made to it on the
Repayment Date relating to that Advance, provided always that the full
amount of each Advance outstanding on the Final Repayment Date shall be
repaid in full on the Final Repayment Date.
(b) Without prejudice to a Borrower's obligation to repay the full amount of
each Advance made to it on the due date, and without any change to the
amount of any Advance involved, subject to any contrary legal requirement,
where on the same day as such Borrower is due to repay an Advance such
Borrower also requests to draw down (and is entitled pursuant to the terms
of this Agreement to so draw down) an Advance in the same currency, the
amount to be so repaid and the payment by the Facility Agent to such
Borrower of the proceeds of the Advance being drawn shall be
60
settled by netting off the one against the other so that the amount
actually paid in cash shall be the net amount only.
(c) Without prejudice to the provisions of Clauses 9 or this Clause, all
amounts outstanding under this Agreement, whether principal, interest,
costs and expenses or otherwise, shall be repayable or payable (as the case
may be) in full on the Final Repayment Date.
11.3 FACILITY AGENT TO NOTIFY BANKS OF DEMAND
As soon as practicable after it receives a demand for payment under a
Standby L/C, the Facility Agent shall notify the Borrower on whose behalf
it was issued and the Banks that participated in such Standby L/C of the
amount of that demand and the date on which the amount demanded is required
to be paid, whereupon that Borrower shall be obliged to pay to the Facility
Agent for account of such Banks on such date an amount equal to the amount
demanded, as reduced by any sum then standing to the credit of the Standby
L/C Accounts (as defined in Clause 31.4) relating to that Standby L/C.
11.4 L/C INDEMNITY
Each Borrower hereby undertakes to indemnify and to hold harmless each Bank
from and against all liabilities, costs, losses, damages and expenses which
such Bank may at any time incur or sustain as a result of its participation
in any Standby L/C requested by such Borrower.
11.5 BANKS' DISCRETION
The Banks that participated in each Standby L/C shall at all times be
entitled to make any payment under such Standby L/C for which a request,
demand or other claim has been made thereunder in accordance with the terms
thereof without further investigation or enquiry and none of them nor the
Facility Agent on their behalf need in any way concern itself with the
propriety of any claim made or purported to be made under and in the manner
required by the terms of such Standby L/C accordingly, it shall not be a
defence to any demand made of any Borrower hereunder, nor shall any of the
obligations of any Borrower hereunder be impaired by the fact (if it be the
case), that any such Bank or the Facility Agent on its behalf was or might
have been justified in refusing payment, in whole or in part, of the
amounts so claimed.
11.6 VOLUNTARY CANCELLATION
The Obligors' Agent may, by giving to the Facility Agent not less than 10
Business Days' prior notice to that effect, cancel the whole or any part (being
a minimum amount of DM1,000,000) of the Total Commitments whereupon the
Revolving Commitment of each Bank (including, for the avoidance of doubt, the
Revolving Commitment of each Ancillary Bank disregarding, for this purpose its
Ancillary Commitment) shall be reduced by a proportionate amount and pro rata to
their respective Revolving Commitments at such time and the Standby L/C
Commitment of each Bank shall be reduced by a proportionate amount
61
pro rata. Provided that the Revolving Facility shall not be reduced pursuant to
this Clause 11.6 to below the Deutschmark Amount of outstanding (or scheduled to
be outstanding under this Agreement) Advances or the Standby L/C Facility be
reduced to below the Deutschmark Amount of Standby L/Cs issued that have not
expired or, in respect of which an amount is due and payable by any Borrower
under Clause 11.3, or scheduled to be issued (in accordance with this Agreement)
on the relevant date, on the assumption that any Advances due to be repaid, in
accordance with the provisions of this Agreement are so repaid and that any
Standby L/Cs due to expire so expire without the Banks party to such Standby
L/Cs being required to make any (or any further) payment thereunder.
11.7 MANDATORY PREPAYMENT ON LISTING
(a) If any steps are taken in or towards the Company or any Group Member being
Listed the Company shall immediately notify the Facility Agent thereof
specifying the date on which the proposed Listing is to occur.
(b) Following receipt of a notice under Clause 11.7(a) above the Facility Agent
shall consult with the Company during the period of 30 days following such
receipt and shall, if so instructed by the Banks, give a notice of
continuance notwithstanding the proposed Listing (a "LISTING NOTICE OF
CONTINUANCE") of the Facilities. During such period a Borrower shall only
be permitted to:
(i) serve a Drawdown Request hereunder which specifies that the Repayment
Date for the Advance requested in such Drawdown Request will fall on
a date not more than 30 days after the expiration of such period;
(ii) serve a Standby L/C Request hereunder which specifies that the Expiry
Date for the Standby L/C requested in such Standby L/C request will
fall on a date not more than 30 days after the expiry of such period;
and
(iii) utilise an Ancillary Facility such that the obligation of the
relevant Borrower thereunder in respect of such utilisation will be
able to be fulfilled on a date not more than 30 days after the expiry
of such period.
Upon receipt of a Listing Notice of Continuance, the right of each Borrower
to serve a Drawdown Request or, as the case may be, a Standby L/C Request
and to utilise any Ancillary Facility made available to it at such time
without such limitation shall be reinstated.
(c) If at the end of the period referred to in Clause 11.7(b), the Company has
not received a Listing Notice of Continuance then the Facility Agent may,
and shall if so instructed by the Majority Banks, declare:
(i) that any unutilised portion of the Facilities shall be cancelled
whereupon the same shall be cancelled and the Revolving Commitment,
Ancillary Commitment and Standby L/C Commitment of each Bank shall be
reduced to zero;
62
(ii) any outstanding Advances with a Repayment Date falling on a date
later than the relevant Listing, (the "LISTING DATE") shall be
prepaid on or before the Listing Date, together with accrued interest
thereon up to the date of payment and all other amounts payable to
the Facility Agent and each Bank hereunder (including any amounts
payable under Clause 25.1(b));
(iii) each Borrower on whose behalf a Standby L/C was issued with an Expiry
Date falling on a date later than the Listing Date shall pay to the
Facility Agent no later than the Listing Date for the credit of each
Bank that participated in such Standby L/C an amount in cash equal to
the undrawn amount of such Standby L/C less any sum then standing to
the credit of the Standby L/C Accounts (as defined at Clause 31.4)
relating to that Standby L/C or procure the release of each such Bank
from its obligations under each such Standby L/C; and
(iv) any outstanding amounts under the Ancillary Facility shall be prepaid
or repaid on or before the Listing Date or, in respect of any
contingent obligations of the relevant Borrower thereunder cash
collateralised by the relevant Borrower unless on or prior to the
Listing Date, the relevant Borrower has procured the release of the
relevant Ancillary Bank from such contingent liability.
11.8 PREPAYMENT FEE
Any prepayment or cash collaterisation of any Utilisation made under any
provision of this Agreement may be made without any fee or penalty (but without
prejudice to any amount due pursuant to Clause 25.1(b)).
11.9 CANCELLATION AND PREPAYMENT OF A BANK'S REVOLVING COMMITMENT AND STANDBY
L/C COMMITMENT
(a) If a Borrower is required to make any additional payment to a Bank pursuant
to Clause 14 or a Bank claims indemnification under Clause 14 or Clause 15,
the Obligors' Agent may, provided that the relevant circumstances are still
continuing, serve a notice on such Bank through the Facility Agent,
whereupon such Bank's Revolving Commitment, Ancillary Commitment (if any)
and Standby L/C Commitment shall immediately be cancelled.
(b) Five Business Days after the date of service of any such notice or on such
later date as may be agreed between the Facility Agent, the Obligors' Agent
and such Bank, each Borrower shall:
(i) repay the relevant Bank's proportion of the outstanding Advances
together with accrued interest thereon and any other amounts payable
by each Borrower to such Bank under this Agreement, including any
amount payable in respect of breakage costs on the amount prepaid
pursuant to Clause 25.1(b); and
(ii) pay to the Facility Agent for the credit to the relevant Standby L/C
Account on such Bank's books relating to each Standby L/C in which
such Bank has participated an amount equal to the amount of its
participation in that Standby
63
L/C or alternatively procure the release of such Bank from its
obligations under such Standby L/C; and
(iii) repay any outstanding amounts under any Ancillary Facility provided
to it by such Bank and cash collateralise any contingent obligation
thereunder or, if the contingent liability is that of the Ancillary
Bank, procure the release of the Ancillary Bank from such contingent
liability.
11.10 NOTICES OF PREPAYMENT AND CANCELLATION
(a) Any notice of prepayment and cancellation delivered under this Agreement is
irrevocable.
(b) Subject to the provisions of this Agreement each notice shall specify the
date upon which such prepayment and cancellation is to be made and the
amount of such prepayment and cancellation.
11.11 NOTIFICATION OF BANK(S)
The Facility Agent shall notify the relevant Bank(s) promptly upon receipt of
any notice of prepayment and cancellation.
11.12 ONLY METHOD
No payment, prepayment or cancellation is permitted other than in accordance
with the provisions of this Agreement.
11.13 EUROPEAN ECONOMIC AND MONETARY UNION
(a) DEFINITIONS In this Clause 11.13 and in each other provision of this
Agreement to which reference is made in this Clause 11.13 expressly or
impliedly (including, without limitation, Clause 15), the following terms
have the meanings given to them is this Clause 11.13:
"COMMENCEMENT OF THE THIRD STAGE OF EMU" means the date of commencement of
the third stage of EMU (at the date of this Agreement expected to be 1
January 1999) or the date on which circumstances arise which (in the
opinion of the Majority Banks) have substantially the same effect and
result in substantially the same consequences as commencement of the third
stage of EMU as contemplated by the Treaty on European Union];
"EMU" means Economic and Monetary Union as contemplated in the Treaty on
European Union;
"EMU LEGISLATION" means legislative measures of the European Council for
the introduction of, changeover to or operation of a single or unified
European currency (whether known as the euro or otherwise), being in part
the implementation of the third stage of EMU;
64
"EURO" means the single currency of participating member states of the
European Union;
"EURO UNIT" means the currency unit of the euro;
"NATIONAL CURRENCY UNIT" means the unit of currency (other than a euro
unit) of a participating member state;
"PARTICIPATING MEMBER STATE" means each state so described in any EMU
legislation; and
"TREATY ON EUROPEAN UNION": means the Treaty of Rome of 25 March 1957, as
amended by the Single ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and the Maastricht Treaty (which
was signed at Maastricht on 7 February 1992 and came into force on 1
November 1993), as amended from time to time.
(b) COMING INTO EFFECT OF PROVISIONS: The provisions of Clauses 11.13(c) to
11.13(j) (inclusive) shall come into effect on and from the commencement of
the third stage of EMU, PROVIDED THAT, if and to the extent that any such
provision relates to any state (or the currency of such state) which shall
not be a participating member state on the commencement of the third stage
of EMU, such provision shall come into effect in relation to such state
(and the currency of such state) on and with effect from the date on which
such state becomes a participating member state.
(c) REDENOMINATION AND ALTERNATIVE CURRENCIES: Each obligation under this
Agreement of a party to this Agreement which has been denominated into the
euro unit in accordance with EMU legislation PROVIDED THAT, if and to the
extent that any EMU legislation provides that following the commencement of
the third stage of EMU an amount denominated either in the euro or in the
national currency unit of a participating member state and payable within
that participating member state by crediting an account of the creditor can
be paid by the debtor either in the euro unit or in that national currency
unit, each party to this Agreement shall be entitled to pay or repay any
such amount either in the euro unit or in such national currency unit.
(d) UTILISATIONS: Any utilisation in the currency of a participating member
state shall be made in the euro unit.
(e) BUSINESS DAYS: In relation to any amount denominated or to be denominated
in the euro or a national currency unit, any reference to a business day
shall be construed as a reference to a day (other than a Saturday or
Sunday) on which bank are generally open for business in:
(a) London; and
(b) Frankfurt (or such principal financial centre or centres in such
participating member state or states as the Facility Agent may from
time to time nominated for this purpose).
65
(f) PAYMENTS TO THE FACILITY AGENT: Clause 13.1 (Payments to the Facility
Agent) shall be construed so that, in relation to the payment of any amount
of euro units or national currency units, such amounts shall be made
available to the Facility Agent in immediately available, freely
transferable, cleared funds so such account with such bank in Frankfurt (or
such other principal financial centre in such participating member state as
the Facility Agent may from time to time nominate for this purpose).
(g) PAYMENTS BY THE FACILITY AGENT TO THE BANKS: Any amount payable by the
Facility Agent to a Bank under this Agreement in the currency of a
participating member state shall be paid in the euro unit.
(h) PAYMENTS BY THE FACILITY AGENT: In relation to the payment of any amount
denominated in the euro or in a national currency unit, the Facility Agent
shall not be liable to any Obligor or any Bank in any way whatsoever for
any delay, or the consequences of any delay, in the crediting to any
account of any amount required by this Agreement to be paid by the Facility
Agent if the Facility Agent shall have taken all relevant steps to achieve,
on the date required by this Agreement, the payment of such amount in
immediately available, freely transferable, cleared funds (in the euro unit
or, as the case may be, in a national currency unit) to the account in the
principal financial centre in the participating member state which the
relevant Obligor or, as the case may be, any Bank shall have specified for
such purpose. In this Clause 11.13, "all relevant steps" means all such
steps as may be prescribed from time to time by the regulations or
operating procedures of such clearing or settlement system as the Agent may
from time to time determine for the purpose of clearing or settling
payments of the euro.
(i) BASIS OF ACCRUAL: If, in relation to the currency of any state which
becomes a participating member state, the basis of accrual of interest or
commitment commission expressed in this Agreement in respect of that
currency shall be inconsistent with any convention or practice in the
London Interbank Market for the basis of accrual of interest or commitment
commission in respect of the euro, such expressed basis shall be replaced
by such convention or practice with effect on the date on which such state
becomes a participating member state PROVIDED THAT, if any Advance in the
currency of such state is outstanding immediately prior to such date, such
replacement shall take effect, with respect to such Advance, at the end of
the then current Term.
(j) ROUNDING AND OTHER CONSEQUENTIAL CHANGES: Without prejudice and in
addition to any method of conversion or rounding prescribed by any EMU
legislation and without prejudice to the respective liabilities for
indebtedness of the Obligors to the Banks and the Banks to the Obligors
under or pursuant to this Agreement:
(a) each reference in this Agreement to a minimum amount (or an integral
multiple thereof) in a national currency unit to be paid to or by the
Facility Agent shall be replaced by a reference to such reasonably
comparable and convenient amount (or an integral multiple thereof) in
the euro unit as the Facility Agent may from time to time specify; and
(b) save as expressly provided in this Clause 11.13(j), each provisions of
this Agreement shall be subject to such reasonable changes of
construction as the
66
Facility Agent may from time to time specify to be necessary or
appropriate to reflect the introduction of or changeover to the euro
in participating member states.
12. PARTIAL PAYMENTS
If the Facility Agent receives a payment which is insufficient to discharge all
the amounts due and payable by an Obligor under this Agreement on the day such
payment is received, the Facility Agent shall, subject to the Intercreditor
Agreement, apply that payment in or towards the discharge of such Obligor's
obligations under this Agreement in the following order:
(a) firstly (and at its discretion), in or towards payment of any unpaid costs
and expenses of the Agents incurred by it in connection with this
Agreement;
(b) secondly, in or towards payment (pro rata) of any unpaid fees under Clause
26;
(c) thirdly, in or towards payment (pro rata) of any unpaid interest (including
default interest) and commission;
(d) fourthly, in or towards repayment (pro rata) of any unpaid principal; and
(e) fifthly, in or towards payment of any other amounts due and payable by such
Obligor under this Agreement.
13. PAYMENTS
13.1 TO FACILITY AGENT
Subject to the provisions of Clause 13.2, on each date that a Party (other than
the Facility Agent) is obliged to make a payment under any of the Senior Finance
Documents, that Party shall make the same available to the Facility Agent:
(a) if the amount is denominated in Deutschmarks by payment in Deutschmarks and
in same day funds (or in such funds as may be customary in Frankfurt for
the settlement in Frankfurt of international banking transactions in
Deutschmarks) to the Facility Agent at Chase, Frankfurt Manhattan Bank AG
Account No. 9080002101 in the name of Derby Cycle Corporation or such other
account as the Facility Agent may have stipulated for such purpose;
(b) if the amount is denominated in Dollars, by payment in Dollars and in same
day funds (or in such funds as may be customary in New York City for the
settlement in New York City of international banking transactions in
Dollars) to the Facility Agent at The Chase Manhattan Bank, New York, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇, Account No. 544-714108 in the name of
Derby Cycle Corporation or such other account as the Facility Agent may
have specified for this purpose;
(c) if the amount is denominated in Sterling, by payment in Sterling in
immediately available, freely transferable, cleared funds, by CHAPS Sort
Code 40-52-06 to the
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Facility Agent at The Chase Manhattan Bank, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ or such other account as the Facility Agent may have specified for this
purpose;
(d) if the amount is denominated in Dutch Guilders by payment in Dutch Guilders
and in same day funds (or in such funds as may be customary in Amsterdam
for the settlement in Amsterdam of international banking transactions in
Dutch Guilders) to the Facility Agent at ING Barings, Amsterdam Account No.
0051612607 in the name of Derby Cycle Corporation or such other account as
the Facility Agent may have stipulated for such purpose; and
(e) if the amount is denominated in an Optional Currency (other than Sterling,
Dutch Guilders or Dollars), by payment in such Optional Currency and in
immediately available, freely transferable, cleared funds to such account
with such bank in the principal financial centre of the country of such
Optional Currency as the Facility Agent shall have specified for this
purpose.
13.2 DISTRIBUTION BY THE AGENTS
(a) All payments to be made by any Obligor under any Senior Finance Document
shall be paid to or to the order of the Security Agent, provided that the
Security Agent hereby consents to all such payments being made to the
Facility Agent in accordance with the terms of this Agreement until the
Security Documents shall become enforceable and the Security Agent
withdraws such consent by notice to the Facility Agent and the Obligors.
(b) Each payment received by any Agent for the account of another Person
pursuant to Clause 13.1 shall:
(i) in the case of a payment received for the account of any Borrower, be
made available by that Agent to that Borrower by application, on the
date and in the funds of receipt:
(A) first, in or towards payment of any amounts then due and payable
(and unpaid) by that Borrower under any of the Senior Finance
Documents; and
(B) second, in payment to such account as that Borrower shall have
properly designated for the purpose in the relevant Drawdown
Request or otherwise in writing; and
(ii) in the case of any other payment, be made available by the Facility
Agent to the Person for whose account the payment was received (in
the case of a Bank, for the account of its Facility Office) on the
date and in the currency and funds of receipt to such account of the
Person with the office or bank in the country of the currency
concerned as that Person shall have previously notified to the
Facility Agent for the purposes of this Agreement.
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(c) The Facility Agent or the Security Agent (as the case may be) shall
promptly distribute payments received for the account of the Banks among
the Banks pro rata to their respective entitlements and in the funds and
currency of receipt.
13.3 CURRENCY
(a) Interest and commission accrued under this Agreement shall be payable in
the currency in which the relevant amount in respect of which it has
accrued was denominated during the period of accrual.
(b) The principal of each Advance shall be repaid or prepaid in the currency in
which it is denominated.
(c) Amounts payable to the credit of a Standby L/C Account (as defined in
Clause 31.4) relating to a Standby L/C shall be payable in the currency in
which the relevant Standby L/C is denominated.
(d) Any amount (other than of principal and/or interest) calculated on or by
reference to or payable in respect of another amount shall be payable in
the currency in which that other amount is denominated at the time of
payment.
(e) Any other amount payable under this Agreement, unless otherwise provided,
shall be payable in Deutschmarks.
(f) If the Facility Agent receives a payment for the account of another Party
in connection with this Agreement, the Facility Agent shall make that
payment available to such Party for value the same day by transfer to such
account of such Party with such bank in the principal financial centre of
the country of the currency of such payment as that Party shall have
previously notified to the Facility Agent in writing for this purpose.
(g) If a sum is paid under this Agreement to the Facility Agent for the account
of another Party, the Facility Agent shall not be obliged to pay that
amount to that Party until the Facility Agent has established, to its
satisfaction, that it has actually received and retained that sum.
(h) The Facility Agent may, but shall not be obliged to assume that it has
received and retained all amounts payable to it under this Agreement on the
due date and, in reliance on that assumption, make available to the
relevant Party a corresponding amount. If, however, such a sum has not been
received and retained by the Facility Agent, the relevant Party shall, on
demand by the Facility Agent, promptly refund the corresponding amount to
the Facility Agent together with interest on that amount from (and
including) the date of payment by the Facility Agent to (but excluding) the
date such amount is repaid to the Facility Agent in full, at a rate
calculated by the Facility Agent so as to reflect its cost of funding such
payment.
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13.4 SET-OFF AND COUNTERCLAIM
(a) All payments required to be made by the Obligors' under any of the Senior
Finance Documents shall be made without reference to any set-off or
counterclaim and shall be made free and clear of and without any deduction
for or on account of any set-off or counterclaim.
(b) For so long as an Event of Default has occurred which is still continuing,
each Obligor authorises each Bank to apply any credit balance to which such
Obligor under any of the Finance Documents is entitled on any account of
such Obligor with that Bank in satisfaction of any sum due and payable from
such Obligor to that Bank under any of the Finance Documents but unpaid.
Each Bank is, accordingly, authorised to purchase with any credit balance
of any such account such other currencies as may be necessary to effect
such application. No Bank shall be obliged to exercise any right given to
it by this Clause 13.4(b).
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PART 5
14. TAXES
14.1 PAYMENT OF TAXES
All payments to be made by any Obligor under or in respect of any of the Senior
Finance Documents shall be made free and clear of and without any deduction or
withholding of Tax unless (but without prejudice to this Clause 14) any such
Obligor is required by law to make such payment subject to the deduction or
withholding of Tax.
14.2 GROSS-UP
Subject to prompt compliance by the Finance Parties with the provisions of this
Clause 14.2 and Clauses 14.7, 14.8 and 14.9, if any Taxes or amounts in respect
thereof must be deducted from any such payment by an Obligor under any Senior
Finance Document (other than in respect of any Tax imposed or a payment which
would not have been imposed on that payment if the relevant Finance Party to
which or for whose account that payment was made had been at the date of the
payment a Qualifying Bank) must be made from any amounts paid by any Obligor (or
from any corresponding payment by any Finance Party to any other Finance Party
under this Agreement), or any such payment shall otherwise be required to be
made subject to any Tax, such Obligor shall pay such additional amounts as may
be necessary to ensure that the relevant Finance Party receives a net amount
equal to the full amount which it would have received had payment not been made
subject to the relevant Tax. Each Finance Party shall notify each Obligor
through the Facility Agent of the application of this Clause 14 to any payment
then due or to become due to it under any Senior Finance Document promptly upon
its becoming aware of the same.
14.3 TAX INDEMNITY
Without prejudice to the provisions of Clauses 14.1 and 14.2 if any Finance
Party, or any other Person through which a payment relating to this Agreement or
the Security Documents is made, is required to make any payment on account of
Tax (other than Tax on its overall net income) on or in relation to any sum
received or receivable under this Agreement or, as the case may be, the relevant
Security Document by that Finance Party, or any other Person through which such
a payment is made, the Borrower shall, upon demand by the Facility Agent,
indemnify the relevant Finance Party against such payment, together with any
interest, penalties and expenses payable or incurred in connection therewith.
14.4 NOTIFICATION OF CLAIMS
Without prejudice to Clauses 14.2 or 14.3, 29.2 if the relevant Borrower so
requests, the relevant Finance Party shall notify such Borrower of the reason
for making a claim under Clauses 14.2 or 14.3, 29.2. This Clause 14.4 shall not
oblige any Finance Party to disclose any information relating to the
organisation of its business or tax affairs or how the amount requested was
calculated if it considers, in its sole opinion, that such information is
confidential.
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14.5 TAX RECEIPTS
If, as a result of a payment being made by or on behalf of the Borrower under
this Agreement or the Security Documents, the Borrower is required to pay any
Tax, the Borrower shall pay such Tax in full to the relevant authority within
the time allowed for such payment under applicable law. The Borrower shall, as
soon as reasonably practicable after payment falls due to the relevant
authority, deliver to the Facility Agent any original (or a Certified Copy) of a
receipt issued by the relevant authority evidencing that payment in full has
been received by the relevant authority.
14.6 TAX SAVING
(a) In the event that, following the imposition of any Tax on any payment by
any Obligor (or any corresponding payment by any Finance Party to any other
Finance Party under this Agreement) in consequence of which such Obligor is
required under Clauses 14.2 or 14.3, to pay such Tax or to pay any
additional amount in respect of it, any Finance Party shall in its sole
opinion and based on its own interpretation of any relevant laws or
regulations (but acting in good faith) receive or be granted a credit
against or remission for or deduction from or in respect of any Tax payable
by it, or shall obtain any other relief in respect of Tax on its profits or
income, which in such Finance Party's opinion in good faith is both
identifiable and quantifiable by it without requiring such Finance Party or
its professional advisers to expend a material amount of time or incur a
material cost in so identifying or quantifying or at the written request of
the Obligor and if the Finance Party is of the opinion that it will recover
the cost incurred, after incurring such cost (any of the foregoing, to the
extent so identifiable and quantifiable, being referred to as a "SAVING"),
such Finance Party shall, to the extent that it can do so without prejudice
to the retention of the relevant saving and subject to deduction for
reasonable costs and subject further to such Obligor's obligation to repay
the amount to such Finance Party if the relevant saving is subsequently
disallowed or cancelled (which repayment shall be made promptly on receipt
of notice by such Finance Party of such disallowance or cancellation),
reimburse such Obligor promptly after receipt of such saving by such
Finance Party with such amount as such Finance Party shall in its sole
opinion but in good faith have concluded to be the amount or value of the
relevant saving.
(b) Nothing contained in this Agreement shall interfere with the right of any
Finance Party to arrange its Tax and other affairs in whatever manner it
thinks fit and, in particular, no Finance Party shall be under any
obligation to claim relief from Tax on its corporate profits, or from any
similar Tax liability, in respect of the Tax, or to claim relief in
priority to any other claims, reliefs, credits or deductions available to
it or to disclose details of its Tax affairs. No Finance Party shall be
required to disclose any confidential information relating to the
organisation of its affairs.
(c) Each Finance Party will notify the relevant Obligor promptly of the receipt
by such Finance Party of any saving and of such Finance Party's opinion as
to the amount or value of that saving.
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14.7 U.S TAXATION-DELIVERY OF FORMS AND STATEMENTS
(a) Each Finance Party which is not a U.S. Person shall (as soon as it is
reasonably practicable for it to do so after the date hereof or upon
becoming a party to this Agreement (as the case may be)) deliver (through
the Facility Agent) to each U.S. Obligor which is a Borrower duly completed
and signed, two copies of such form or forms as may be required to indicate
that such Finance Party is entitled to receive payments under this
Agreement without deduction, withholding or payment by the U.S. Obligor of
any United States federal Taxes, including without limitation, either:-
(i) two copies of Form 1001 of the Internal Revenue Service of the United
States of America (relating to an applicable double revenue tax treaty
concluded by the United States of America); or
(ii) two copies of Form 4224 of the Internal Revenue Service of the United
States of America (relating to income effectively connected with the
conduct of a trade of business in the United States of America).
Each such Finance Party , subject as otherwise provided in Clause 14.7(b),
shall deliver (through the Facility Agent) to each U.S. Obligor additional
duly completed copies of any of the above forms and/or such additional or
successor forms as shall be adopted form time to time by the Internal
Revenue Service of the U.S.A. if it is notified by the U.S. Obligor or the
Internal Revenue Service of the U.S.A. that any previous such form
delivered by it pursuant to this Clause 14.7 has expired or that Finance
Party becomes aware that any such form shall have become incomplete or
inaccurate in any respect unless prior to that delivery any event occurs
which renders the relevant form inapplicable.
(b) Each Finance Party which is a U.S. Person shall deliver (through the
Facility Agent) to each U.S. Obligor a statement signed by an authorised
signatory of the Finance Party to the effect that it is a U.S. Person and
if necessary to avoid United States backup withholding, two a duly
completed and signed copies of Internal Revenue Service Form W-9 (or
successor form) establishing that such Finance Party is organised under the
laws of the United States and is not subject to United States backup
withholding.
(c) Each Finance Party that is not a U.S. Person that is entitled to an
exemption from or reduction of withholding tax under the IRC with respect
to payments under this Agreement shall deliver to the Company (with a copy
to the Facility Agent), at the time or times prescribed by applicable laws,
properly completed and executed documentation prescribed by applicable law
or reasonably requested by the Company as will permit such payments to be
made without withholding or at a reduced rate.
(d) The Facility Agent shall have no responsibility or liability for and no
obligation to check the accuracy or appropriateness of any form or
statement delivered by any Finance Party pursuant to Clauses 14.7(a) or
14.7(b) respectively.
(e) If any Finance Party determines, as a result of any change in applicable
law, regulation or treaty, or in any official application or interpretation
thereof, that it is unable to
73
submit to any U.S. Obligor any form or certificate that the Finance party
is obliged to submit pursuant to Clauses 14.7(a) or 14.7(b), or that such
Finance Party is required to withdraw or cancel any form or certificate
previously submitted, the Finance Party shall promptly notify the U.S.
Obligor of that fact.
14.8 DOUBLE TAX-TREATIES
Each Bank and the Facility Agent or the relevant Obligor (as the case may be)
shall as soon as reasonably practicable after the date hereof or upon becoming a
party to this Agreement or (as the case may be) after the date a Borrower not
incorporated in the United Kingdom accedes to this Agreement submit the form or
forms to the appropriate revenue authorities as may reasonably be necessary in
order to comply with the requirements of any applicable law or relevant double
taxation (if any) in relation to the payment of any interest and commitment
commission hereunder to such Bank or the Facility Agent free (or subject to any
applicable reduced rate) of deduction or withholding of or on account of any Tax
which would otherwise be applicable and, if such Bank or the Facility Agent
fails to comply with this Clause 14.8 the relevant Obligor shall not have any
obligation to pay any increased amount required by Clauses 14.2 or 14.3 if and
to the extent that it would not have been required to make any deduction or
withholding (or would only have been required to make any such deduction or
withholding at any applicable reduced rate) of or on account of any Tax had such
Bank or the Facility Agent complied with this Clause 14.8.
14.9 QUALIFYING BANK
Each Bank that becomes a party to this Agreement on a date occurring 30 days or
more after the date of this Agreement confirms to each of the Obligors that as
at the date it becomes a party to this Agreement it is a Qualifying Bank and
agrees to notify the Obligors' Agent (through the Facility Agent) promptly if it
becomes aware that it is not a Qualifying Bank.
15. INCREASED COSTS
15.1 INDEMNITY FOR INCREASED COSTS
If any Bank determines that, as a result of:
(a) the introduction or variation of any law or any change in the
administration or interpretation of any law; and/or
(b) compliance with any request from or requirement of any central bank or
other fiscal, monetary or other authority (including any request or
requirement which affects the manner in which a Bank or any Holding Company
of such Bank is required to, or does, maintain capital resources having
regard to such Bank's obligations under this Agreement and to amounts which
are owing to it under this Agreement); and/or
(c) the introduction, or changeover or operation of the euro in any
participating member state;
(i) such Bank, or any Holding Company of such Bank, incurs a cost (being
a cost which it would not otherwise have incurred) as a result of it
having entered
74
into and/or it performing its obligations under this Agreement
and/or it assuming or maintaining its Revolving Commitment or its
Standby L/C Commitment under any this Agreement and/or it making one
or more Advances under this Agreement and/or assuming or maintaining
a contingent liability under any Standby L/C; or
(ii) such Bank, or any Holding Company of such Bank, is unable to obtain
the rate of return on its overall capital which it would have been
able to obtain but for it having entered into and/or assuming or
maintaining its Revolving Commitment or its Standby L/C Commitment
under this Agreement; or
(iii) there is any increase in the cost to such Bank, or any Holding
Company of such Bank, of funding or maintaining all or any of the
assets or liabilities comprised in a class of assets or liabilities
formed by, or including, those referable to this Agreement; or
(iv) such Bank, or any Holding Company of such Bank, becomes liable to
make any payment on account of Tax (other than Tax on its overall
net income) or otherwise on or calculated by reference to the amount
of Advances made or to be made by it under this Agreement and/or any
sum received or receivable by it under this Agreement,
then the relevant Obligor shall, from time to time on demand by the
Facility Agent, pay to the Facility Agent for the account of that Bank,
amounts sufficient to indemnify that Bank against, as the case may be, (i)
such costs, (ii) such reduction, (iii) such increased costs (or such
proportion of such increased costs as is, in the opinion of that Bank,
attributable to its funding, maintaining or assuming assets or liabilities
referable to this Agreement) or (iv) such liability.
15.2 EXCEPTIONS
No Bank shall be entitled to make any claim under Clause 15.1 which:
(a) is compensated for by the operation of Clause 14;
(b) is attributable to any change in the rate of Tax on the overall net income
of such Bank (or the overall net income of the Bank or its Holding
Company);
(c) arises as a result of a breach by such Bank of any regulation, guideline
or requirement of any central bank or other fiscal, monetary or other
authority (whether or not having the force of law);
(d) arises as a result of the implementation by any authority after the date
of this Agreement of any of the matters set out in the paper prepared by
the Basle Committee on Banking Regulation and Supervisory Practice dated
July 1988 (as amended in November 1991) entitled "International
Convergence of Capital Measurement and Capital Standings".
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15.3 NOTIFICATION BY BANK
Any Bank proposing to make a claim pursuant to Clause 15.1 shall promptly upon
becoming aware of its entitlement to make such a claim notify the Obligors'
Agent (through the Facility Agent), setting out, in reasonable detail, the
calculation and cause of the amounts claimed. No Bank shall be required to
disclose any information relating to the organisation of its affairs which it
considers to be confidential.
15.4 REGULATION D COMPENSATION
Any Bank which is required by Regulation D issued by the Board of Governors of
the Federal Reserve System of the USA to maintain and does maintain any reserves
against "EUROCURRENCY LIABILITIES" (as defined in such Regulation) pursuant to
such Regulation may require any U.S. Obligor to pay, contemporaneously with each
payment of interest on any Advance (in respect of which the Eurodollar Reserve
Percentage applies) made to such U.S. Obligor for any Term relative thereto,
additional interest on the participation of such Bank in that Advance at the
rate per annum determined from the formula (i) LIBOR applicable to such Advance
for that Term divided by (ii) one minus the Euro-Dollar Reserve Percentage minus
LIBOR applicable to such Advance for that Term. Any Bank requiring payment by
any U.S. Obligor of such additional interest shall notify such U.S. Obligor and
the Facility Agent at least five Business Days prior to the last day of each
Term each relevant Advance of the amount due to be paid to it with respect to
such Advance pursuant to this Clause 15.4 (certifying in that notice that the
amount claimed does not exceed such part of the cost to such Bank of maintaining
such reserves as in the opinion of that Bank should fairly and reasonably be
apportioned to such Advance), which notice shall be final and binding in the
absence of manifest error. No Bank shall be required to disclose in support of
any claim hereunder any information reasonably regarded by such Bank as being
confidential.
16. ILLEGALITY
16.1 ILLEGALITY IN RELATION TO ADVANCES
If, as a result of the introduction, imposition or variation of any law,
regulation or regulatory requirement of any authority (including any fiscal or
monetary authority), it is unlawful for any Bank to make, maintain or fund any
Advance, or be a party to this Agreement then, unless such illegality is avoided
in accordance with Clause 17:
(a) after delivery of a notice to the Facility Agent detailing the unlawful
circumstances, the relevant Bank shall not be obliged to make any Advances
or make available any Facilities under any Ancillary Facility to which it
is a party and its Revolving Commitment (including part thereof that is,
at such time, being utilised under an Ancillary Facility) shall be
cancelled and reduced to zero, whereupon its Ancillary Commitment (if any)
shall be cancelled and reduced to zero);
(b) on the date specified in the notice delivered under Clause 16 (a) (which
shall not be earlier than the last date on which the relevant Bank
determines (acting reasonably) it may legally maintain its participation
in the Advances and/or its Revolving Commitment), the Borrower shall repay
such Bank's participation in each outstanding Advance, together with
accrued interest thereon and any other amounts owing to that
76
Bank under the Senior Finance Documents or, if the relevant Bank is party
to an Ancillary Facility, cash collateralise any contingent obligations
owed to such Ancillary Bank under such Ancillary Facility.
16.2 ILLEGALITY IN RELATION TO STANDBY L/CS
If, as a result of the introduction, imposition or variation of any law,
regulation or regulatory requirement of any authority (including any fiscal or
monetary authority), it is unlawful for any Bank to participate in or perform
its obligations in respect of all or any of the Standby L/Cs issued or to be
issued hereunder, then unless such illegality is avoided in accordance with
Clause 17:
(a) after delivering of a notice to the Facility Agent detailing the unlawful
circumstances, the relevant Bank shall cease to be obliged to participate
in such Standby L/Cs hereunder; and
(b) if the Facility Agent on behalf of such Bank so requires, the Borrower
that requested each Standby L/C in which that Bank has participated shall,
on such date (which shall not be earlier than the last date on which the
relevant bank determines (acting reasonably) it may lawfully perform its
obligations under each Standby L/C in which such Bank has participated
hereunder) pay to the Facility Agent for credit of that Bank for credit to
the appropriate Standby L/C Account on such Bank's books relating to that
Standby L/C, an amount equal to the amount of its participation in that
Standby L/C.
17. MITIGATION
17.1 MITIGATION
(a) If, in respect of any Finance Party, circumstances arise which would, or
on the giving of notice would, result in:
(i) the application of Clause 10; or
(ii) an increase in the amount of any payment to be made to it under
Clause 14.1; or
(iii) any claim for indemnification being made or any obligation to
increase the amount any payment under any of Clauses 14.2, 14.3 and
Clause 15.1; or
(iv) any prepayment or cancellation under Clause 16,
then, without limiting the obligations of any Obligor under this
Agreement, and without prejudice to the terms and conditions of those
Clauses, that Finance Party will (provided that it considers that it is
reasonably practicable for it to do so), promptly upon becoming aware of
the same, notify the Facility Agent and, in consultation with the Facility
Agent and the Obligors' Agent, take steps to mitigate the effects of such
circumstances, including, if appropriate, changing its Facility Office
and/or transferring
77
its rights and obligations under the Senior Finance Documents to another
branch or financial institution acceptable to the Obligors' Agent.
(b) No Finance Party shall be obliged to take any steps under this Clause 17
if it considers, in its opinion, that to do so might have an adverse
effect on its business, operation, financial condition, or its return
under this Agreement or it considers such steps to be unreasonable. This
Clause 17.1 shall not oblige any Finance Party to disclose any information
relating to the organisation of its business, operations, financial
condition or any other matters if it considers, in its sole opinion, that
such information is confidential.
(c) In the circumstances where the relevant Borrower would otherwise be
entitled or required to prepay any Bank's participation in the
Utilisations or make a payment into such Bank's Standby L/C Accounts (or
any of them) or procure such Bank's release from its obligations under
each Standby L/C (other than as a result of the application of Clause 16
or Clause 21), such Bank will, if requested by the Company, transfer by
means of a Novation Certificate pursuant to Clause 29.2, such
participation (and the related Revolving Commitment and Standby L/C
Commitment) to any bank or financial institution which is a Qualifying
Bank and is specified by the Company and has confirmed to such Bank its
willingness to acquire such participation, such Revolving Commitment and
such Standby L/C Commitment by means of a Novation Certificate, subject to
receipt by such Bank from the proposed transferee of an amount equal to
such Bank's entitlement to all principal, accrued interest and other sums
payable by the Obligors or any of them under the Senior Finance Documents
(whether or not then due) and any amounts then standing to the credit of
its Standby L/C Accounts and provided further that any consents required
from any Beneficiary in respect thereof has been obtained.
17.2 COSTS AND EXPENSES OF MITIGATION
Any costs and expenses reasonably incurred by any Finance Party pursuant to this
Clause 17 shall be paid by the Obligors' Agent within five Business Days after
receipt of a demand specifying the same in reasonable detail.
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PART 6
18. REPRESENTATIONS AND WARRANTIES
18.1 GENERAL REPRESENTATIONS AND WARRANTIES
The Company acknowledges that the each of the Finance Parties have entered into
the Finance Documents in full reliance on the following statements and
represents and warrants to each of the Finance Parties that :
(a) DUE INCORPORATION AND STATUS: each Obligor is a private limited company,
duly incorporated and validly existing under the place of its
incorporation, possesses the capacity to ▇▇▇ and be sued in its own name,
and has the power to carry on its business substantially as now being (or
will immediately after the Closing be) conducted and to own its property
and other assets;
(b) CORPORATE POWER: each Obligor has the power to execute, deliver and
perform its obligations under each of the Transaction Documents to which
it is a party, and any other document or instrument executed, delivered or
to be executed or delivered by it under any of the Transaction Documents;
all necessary corporate, shareholder and other action has been taken or
will be taken to authorise the execution, delivery and performance of the
same and no limitation on its powers to borrow, to guarantee and to grant
security will be exceeded as a result of the performance of the
transactions contemplated by such documents;
(c) BINDING OBLIGATIONS: the Transaction Documents, and any other document or
instrument executed or delivered or to be executed or delivered by any
Group Member thereunder, constitute or, as the case may be, will
constitute valid and legally binding obligations of each of the Obligors
which are expressed to be a party thereto and, as far as the Company is
aware, in the case of the Recapitalisation Documents and the Note
Documents of the other parties thereto and, without limiting the
generality of the foregoing (and subject to registration under Section 395
Companies Act 1985 (as amended), the filing of Uniform Commercial Code
financing statements and filings with the United States Patent and
Trademark Office and the United States Copyright Office, in each case as
contemplated by the Security Documents, the Filing of Forms 47 in the
Companies Registry Office in Dublin in respect of the Irish Debentures,
the registration of the Debentures entered into by those Obligors
incorporated in the United Kingdom at the Land Registry or the Land
Charges Registry (as appropriate), (to the extent necessary) registration
in the Land Registry in Ireland in respect of property charges to be
created by the Irish Debentures, the filing of particulars of the relevant
trade marks (if any) assigned or charged under such mortgage debenture,
the registration of the transfers of the shares which are the subject of
the relevant mortgages and other Encumbrances created by the Security
Documents and other filings and registrations necessary in connection with
the Security Documents (including any filings required to be made in
connection with Sections 155 to 158 of the Companies Act 1985), and
compliance with and registration under any analogous requirements in any
other jurisdiction) each of the Security Documents creates the security
interest which that Security Document purports to create or, as the case
may be, accurately evidences a security
79
interest which has been validly created (except that no warranty is given
as to whether any such Encumbrance is of a fixed or floating nature);
(d) NO CONFLICT WITH OTHER OBLIGATIONS: the execution and delivery of each of
the Transaction Documents, and any other document or instrument executed
or delivered or to be executed or delivered thereunder by any Obligor
party thereto, and the performance of each of their respective obligations
thereunder, and compliance with their respective provisions, will not (i)
contravene any existing applicable law, statute, rule or regulation or any
judgment, decree or permit to which any of them are subject, conflict
with, or result in any breach of any of the terms of, or constitute a
default under, any agreement or other instrument to which any Group Member
is expressed to be a party or is subject to or by which it, or any of its
property is bound in a manner which is reasonably likely to result in any
liability on the part of the Finance Parties (or any of them) to any third
party by reason of any such conflict, (ii) nor, so far as the Company is
aware, will it result in the creation, or requirement to create, any
Encumbrance on the assets of any Obligor (save for any Encumbrance created
pursuant to the Security Documents), or (iii) contravene or conflict with
any provision of the Memorandum and Articles of Association (or similar or
analogous documents) of any Obligor;
(e) CONSENTS: all material, authorisations, approvals, consents, licences,
exemptions, filings, registrations and other matters required by law for
or in consequence of (i) the Recapitalisation, and/or (ii) the entry into
and performance by each Obligor of and/or the validity of any of the
Transaction Documents to which it/they are expressed to be a party or the
transactions to be implemented pursuant thereto and/or (iii) the carrying
on of the business of each Obligor and each Material Group Member in the
ordinary course have been obtained or effected or will be obtained or
effected prior to the date required by law, save (in the case of (ii)) for
the filing in the United Kingdom of the prescribed particulars of the
Security Documents pursuant to Section 395 of the Companies ▇▇▇ ▇▇▇▇ (as
amended), the Filing of Forms 47 in the Companies Registry Office in
Dublin in respect of the Irish Debentures, the registration of the
Debentures entered into by those Obligors incorporated in the United
Kingdom at the Land Registry or the Land Charges Registry (as
appropriate), (to the extent necessary) registration in the Land Registry
in Ireland in respect of property charges to be created by the Irish
Debentures, the filing of particulars of the relevant trade marks (if any)
assigned or charged under the Debentures, the registration of the
transfers of the shares which are the subject of the relevant mortgages
and other Encumbrances created by the Security Documents and other filings
and registrations necessary in connection with the Security Documents, all
of which filings and registrations will be effected promptly after
execution;
(f) NO WINDING-UP: no order has been made or petition presented (which has not
been discharged or stayed within 14 days of it being so presented) or any
corporate action taken, or any other steps been taken or legal proceedings
started or resolution passed for the winding-up of any Group Member or for
an administration order in respect of any Group Member and no distress,
execution or other process has been levied on any assets of any Group
Member which has not been discharged or which
80
in the bona fide opinion of the Facility Agent is not being contested by
the relevant Group Member in good faith;
(g) INSOLVENCY: no order has been made or petition presented or resolution
passed for an administration order in respect of any Group Member and no
distress, execution or other process has been levied on any assets of any
Group Member which has not been discharged, no Group Member has stopped
payment and is insolvent or unable to pay its debts within the meaning of
Section 123(1) Insolvency Act 1986 (construed as if the figure stated at
section 123(1)(a) was $100,000), it has not been determined that any Group
Member is unable to pay its debts in accordance with Section 123(2)
Insolvency Act, no administrative receiver or receiver or receiver and
manager, trustee or similar officer has been appointed by any Person of
any part of the business or assets of any Group Member;
(h) NO DEFAULT: (i) no Event of Default has occurred and is continuing which
has not been waived; (ii) (so far as the Company is aware) save as
previously notified to the Facility Agent in accordance with Clause
19.1(e)(vii)no Potential Event of Default has occurred and is continuing
which has not been waived; and (iii) no Group Member is in breach of or
default under any agreement to which it is a party or which is binding on
it or any of its assets which could have a Material Adverse Effect;
(i) NO LITIGATION: no action, litigation, arbitration, alternative dispute
resolution, or administrative or regulatory proceeding is taking place or
pending against any Group Member, and, so far as the Company is aware, no
such action, litigation or administrative proceeding is threatened nor are
there any current labour disputes involving any Group Member which:
(i) in the case of any such action, litigation, alternative dispute
resolution, arbitration, administrative or regulatory proceedings are
reasonably likely to be determined adversely to the relevant Group
Member, and which, if so adversely determined would have a Material
Adverse Effect; or
(ii) in the case of any such labour disputes, would have a Material
Adverse Effect;
(j) GROUP STRUCTURE:
(i) the Structure Memorandum contains descriptions which are true,
complete and correct, of the corporate and ownership structure of the
Group and the Intra-Group Loan Memorandum contains descriptions which
are true, complete and correct of all inter-company loans as they
will be immediately after Closing;
(ii) there are no companies, partnerships, Joint Ventures, businesses or
the like having material assets or indebtedness or trading activities
(a) which are or will be a Subsidiary of the Company immediately
after the Closing whose intended ownership and corporate structure
are not shown in the Structure Memorandum or (b) in which it or any
of its Subsidiaries will have an interest immediately after the
Closing which are not shown in the Structure Memorandum;
81
(iii) there are no re-organisational steps affecting the Company or any of
its Subsidiaries (including, without limitation, any significant
transfers of business or assets from one Person to another and
significant disposals) which are not described in the Structure
Memorandum; and
(iv) immediately following Closing there will be no Material Group
Members other than those companies set out at Schedule 11;
(k) ACCOUNTANT'S REPORT:
(i) save as fully and fairly disclosed in the Accountant's Report, the
financial information in relation to the Group contained in the
Accountant's Report was prepared using generally accepted accounting
principles in the United Kingdom, and give a true and fair view of
the state of affairs of the Group as at the date to which they were
prepared and as at such date there were no material liabilities of
the Group which were not disclosed by or shown as being provided for
in the Accountant's Report;
(ii) there has been no material adverse change in the business,
operations, assets, prospects, or financial condition of the Group
(taken as a whole) since the date the Accountant's Report was
prepared; and
(iii) the Accountant's Report includes or consolidates into such financial
information the results of each Group Member and does not
consolidate or include the results of any other company, limited
partnership or like entity or business other than Derby
International;
(l) INITIAL INFORMATION:
(i) all information contained in the Information Package was true in all
material respects (or, in the case of information provided by any
Person other than the Company or its advisors as far as the board of
directors of the Company is aware, was true to the best of its
knowledge and belief in all material respects at the date (if any)
ascribed thereto in the Information Package) and, in respect of the
Group's Pre-Closing Accounts was prepared in accordance with
Applicable Accounting Principles, all expressions of opinion or
intention and all forecasts and projections contained in the
Information Package were arrived at after careful consideration,
were fair and were based on reasonable grounds, and the Information
Package as of its date was not misleading in any material respect
and did not omit to disclose any matter, failure to disclose which
would result in any information contained in the Information Package
being misleading in any material respect in the context of this
Agreement and the transactions contemplated hereby; and
(ii) there has been no material adverse change in the business,
operations, assets, prospects or financial condition of the Group
(taken as a whole) since the date of the annual consolidated
accounts referred to at paragraph (i) above.
82
(m) ALL INFORMATION IS CORRECT: all financial and other information provided
in writing by, or on behalf of, any Group Member to any Finance Party in
connection with this Agreement or the Finance Documents after the date of
this Agreement was true and accurate in all material respects when given
and (so far as it is aware having made due and proper enquiries) there are
no other facts or matters, the admission of which would have made any such
statement or information provided misleading or a materially inaccurate
representation of the situation described therein and all opinions,
projections and forecasts given or made have been honestly made and based
upon reasonable assumptions;
(n) FINANCIAL ACCOUNTS: the Business Plan and the Financial Accounts most
recently delivered to the Facility Agent under this Agreement after the
Closing have been prepared in accordance with Applicable Accounting
Principles and (in the case of audited annual Financial Accounts) give a
true and fair view or (in the case of unaudited Financial Accounts) fairly
present of the state of affairs of the such Group Member (consolidated if
prepared on that basis pursuant to Applicable Accounting Principles or if
required to be prepared on that basis pursuant to the terms of this
Agreement) as at the date to which they are made up and as at such date
there were no material liabilities of any Group Member not disclosed in
the Financial Accounts which according to Applicable Accounting Principles
should have been disclosed and since the Financial Accounts most recently
delivered to the Facility Agent under this Agreement after Closing there
has been no material adverse change in the financial condition or
prospects of the Group (as a whole);
(o) TAX LIABILITIES: no claims in excess of $50,000 (or the equivalent in
other currencies) in aggregate are being or are reasonably likely to be
asserted against the Group (as a whole), any Group Member or Group Members
with respect to Taxes which are reasonably likely to be determined
adversely to such Group Member and no Group Member is overdue in the
filing of any Tax returns required to be filed by it and has paid all
Taxes shown to be due on Tax returns or any assessments made against it
other than those contested in good faith by appropriate proceedings and
for which adequate reserves have been established in accordance with
Applicable Accounting Principles;
(p) ACQUIRED ASSETS: all of the Acquired Assets which have been acquired by
the Company pursuant to the Recapitalisation are beneficially owned by the
Company the Company is, or is entitled to become, the legal registered
owner of the Acquired Assets free from all Encumbrances, claims and
competing interests whatsoever save as expressly permitted under this
Agreement;
(q) OWNERSHIP OF ASSETS:
(i) (save to the extent that such may be disposed of without breaching the
terms of any of the Finance Documents) with effect from and after the
Closing, each Material Group Member will have good title to or valid
leases or licences of or is otherwise entitled to use and permit other
Group Members to use all assets necessary to conduct its business
substantially as conducted by it at the Closing or reflected in the
Accountant's Report and without limiting the generality of the
foregoing, save as aforesaid each Obligor has, with effect from and
after the
83
Closing a good and valid title in its own name of its interest in
all properties specifically referred to by address or title number
in the Security Documents; and
(ii) each Obligor is the absolute legal and beneficial owner of all
rights, title and interest in and to the assets, free from any right
of set-off, counterclaim, dispute or Encumbrance (other than a
Permitted Encumbrance) comprising the Eligible Finished Goods, the
Eligible Receivables, the Eligible Raw Materials and the Cash
Collateral Amount that are taken into account when computing such
Borrower's Borrowing Base;
(r) INTELLECTUAL PROPERTY RIGHTS:
(i) so far as it is aware (after due and careful enquiry) it (and each
Group Member) owns or has licensed to it all the Intellectual
Property Rights which are material in the context of its business
and which are required by it in order for it to carry on its
business in accordance with the Business Plan and it does not (nor
do any of its Subsidiaries), in carrying on its business, infringe
any Intellectual Property Rights of any third party in any way;
(ii) none of the Material Intellectual Property Rights is, to its
knowledge, being infringed nor, to its knowledge, is there any
threatened infringement of the Intellectual Property Rights, by any
third party; and
(iii) all registered material Intellectual Property Rights owned by it (or
any Subsidiary of it) are subsisting and all actions (including
payment of all fees) required to maintain the same in full force and
effect have been taken;
(s) REPRESENTATIONS UNDER RECAPITALISATION DOCUMENTS: it has no reason to
believe that any representation or warranty by any Person party thereto in
any of the Recapitalisation Documents is untrue or inaccurate in any
material respect;
(t) PARI PASSU: the obligations of the Obligors under this Agreement and of
the Group Members under the Senior Finance Documents to which they are
expressed to be a party (to the extent that any such obligations do not
acquire enhanced priority by virtue of the security created and/or
conferred by the Security Documents) rank at least pari passu with all
other present and future unsecured and unsubordinated obligations of such
Group Member with the exception of any obligations which are mandatorily
preferred by law or arise by equity and not only by contract;
(u) CONSTITUTIONAL DOCUMENTS: the documents delivered to the Facility Agent
pursuant to Clause 4 or pursuant to an Accession Agreement are, if such
documents relate to a Borrower, as at the date the first Advance (if any)
is made to such Borrower and, in the case of a Guarantor, as at the date
such documents are delivered, true, up to date and complete copies in all
material respects, of originals which had not been amended, varied,
supplemented or superseded in any way which would be likely to affect the
interest of the Finance Parties under any of the Senior Finance Documents;
84
(v) TRANSACTION DOCUMENTS:
(i) the Recapitalisation Documents, as furnished to the Facility Agent
under this Agreement, contains all the terms of the
Recapitalisation;
(ii) the Recapitalisation Documents contain all the terms of the
agreements and arrangements between the Investors and the Company
(or any Group Member);
(iii) other than as provided in (iv) below the Service Contracts and the
Articles of Association of the Company contain all the material
terms of all the agreements and arrangements between the Executives
and the Investors and Derby International and between the Executives
and the Company (or any other Group Member);
(iv) the Management Agreement (if any) contains all the terms and
arrangements between ▇▇▇▇▇▇ and the Company;
(v) the Service Contracts of each of the Executives will be in full
force and effect in the respective agreed forms at Closing; and
(vi) the Note Documents and any agreements or documents referred to
therein or contemplated thereby contain all the terms of the
agreements and arrangements between the Note Issuers, the Note
Trustee and the Noteholders, and each of the other Persons expressed
to be a party thereto in connection therewith;
(w) ENCUMBRANCES AND FINANCIAL INDEBTEDNESS:
(i) immediately following the Closing no Encumbrances (save for
Permitted Encumbrances (if any)) will exist over any assets of any
Group Member; and
(ii) immediately following the Closing no Group Member will have any
Financial Indebtedness outstanding (save for Permitted Financial
Indebtedness) and no Group Member will have any Financial
Indebtedness owed to it by another Group Member (other than under
the Finance Documents) that is not stated in the Intra-Group Loan
Memorandum; and
(iii) the execution of the Transaction Documents by each Obligor
expressed to be a party thereto will not create any Encumbrances
except as required by the Security Documents and such Obligor's
exercise of its rights and performance of its obligations
thereunder will not result in the existence of, nor oblige it to,
create, any Encumbrance over all or any of its present of future
revenues or assets except a Permitted Encumbrance;
85
(x) ENVIRONMENTAL MATTERS:
(i) so far as the Company is aware, (after due and careful enquiry)
each Group Member has obtained all requisite Environmental
Licences required for the carrying on of its business as currently
conducted and has at all times complied in all material respects
with (a) the terms and conditions of such Environmental Licences
and (b) all other applicable Environmental Law;
(ii) so far as the Company is aware (after due and careful enquiry) no
Dangerous Substance has been used, disposed of, generated, stored,
transported, dumped, released, deposited, owned, leased, occupied
or controlled by any Group Member (including any offsite waste
management or disposal location utilised by any Group Member) in
circumstances where this would be likely to result in the
imposition of a liability on any Group Member which would have a
Material Adverse Effect;
(iii) so far as the Company is aware (after due and careful enquiry)
there is no Environmental Claim (whether in respect of any site
previously or currently owned or occupied by any Group Member or
otherwise) pending or threatened, and there are no past or present
acts, omissions, events or circumstances that would be likely to
form the basis of any Environmental Claim (whether in respect of
any site previously or currently owned or occupied by any Group
Member or otherwise), against any Group Member which in each case
is reasonably likely to be determined against that Group Member
and which if so decided would have a Material Adverse Effect;
(iv) without limiting the generality of Clause 18.1(x)(i), (ii) or
(iii) above, so far as the Company is aware (after due and careful
enquiry) as at the Closing (a) there is no Environmental Claim
(whether in respect of any site previously or threatened which is
reasonably likely to be determined against any Group Member and
which if so decided would have a Material Adverse Effect, (b) so
far as it is aware (after due enquiry) there are no past or
present acts or omissions, events or circumstances that would be
likely to form the basis of any material Environmental Claim
(whether in respect of such site or otherwise) against any Group
Member (which is, or will upon the Closing be a Group Member
which, if adversely determined, would have a Material Adverse
Effect and, (c) so far as it is aware (after due enquiry), since
Closing, each Group Member has complied in all material respects
with the terms and conditions of all requisite Environmental
Licences and applicable Environmental Laws which in each case, if
not complied with, would have a Material Adverse Effect and
neither it nor any Group Member has received any notice from any
third party of any breach of such Environmental Licence or
Environmental Law which would have a Material Adverse Effect;
86
(y) ERISA:
(i) no act, omission or transaction has occurred which will result in
imposition on any U.S. Obligor or any ERISA Affiliate (whether
directly or indirectly) of:-
(1) either a civil penalty assessed pursuant to section 502(i)
of ERISA or a tax imposed by section 4975 of the IRC; or
(2) breach of fiduciary duty liability damages under section 409
of ERISA;
(ii) no U.S. Obligor or ERISA Affiliate has maintained or contributed
to any Plan that is or was subject to Title IV or ERISA or to the
minimum funding requirements of Section 302 of ERISA or Section
412 of the IRC;
(iii) payment has been made of all amounts which any U.S. Obligor or any
ERISA Affiliate is required under the terms of each Multiemployer
Plan or applicable law to have paid as contributions to such
Multiemployer Plan;
(iv) each U.S. Obligor and each ERISA Affiliate are in compliance with
the presently applicable provisions of ERISA and the IRC with
respect to each Multiemployer Plan;
(v) neither any U.S. Obligor nor any ERISA Affiliate (nor any trade or
business that was an ERISA Affiliate) has at any time contributed
to or been obliged to contribute to any Multiemployer Plan which,
upon the complete or partial withdrawal from such Multiemployer
Plan, could result in the imposition of complete or partial
withdrawal liability;
(z) INVESTMENT COMPANY STATUS: each U.S. Obligor is either not an "investment
company" within the meaning of the United States Investment Company Act of
1940, as amended or is exempt from all provisions of such Act, as amended;
(aa) SOLVENCY OF U.S. OBLIGORS: at the date of this Agreement and after giving
effect to the transactions contemplated by the Transaction Documents and
after giving effect to each Advance, each U.S. Obligor is, and after
consummation of this Agreement and after giving effect to all obligations
incurred and Encumbrances created by such U.S. Obligor in connection
herewith, will be Solvent. No U.S. Obligor is entering into this
Agreement or the transactions contemplated hereby with actual intent to
hinder, delay or defraud either present or future creditors. As used
herein, "SOLVENT" means, with respect of any U.S. Obligor on a particular
date, that on such date (i) the fair saleable value of the property of
such U.S. Obligor is greater than the total amount of liabilities,
including, without limitation, contingent liabilities, of such U.S.
Obligor, (ii) the amount that will be required to pay the probable
liabilities of such U.S. Obligor on its debts as they become absolute and
matured will not be greater than the fair saleable value of the assets of
such U.S. Obligor at such time, (iii) such U.S.
87
Obligor is able to realise upon its assets and pay its debts and other
liabilities, contingent obligations and other commitments as they mature
in the normal course of business, (iv) such U.S. Obligor does not intend
to, and does not believe that it will, incur debts or liabilities beyond
such U.S. Obligor's ability to pay as such debts and liabilities mature,
and (v) such U.S. Obligor is not engaged in a business or a transaction,
and is not about to engage in a business or a transaction, for which such
U.S. Obligor's property would constitute unreasonably small capital after
giving due consideration to prevailing practices in the industry in which
such U.S. Obligor is engaged. In computing the amount of any contingent
liability at any time, it is intended that such liability will be computed
at the amount which, in light of all the facts and circumstances existing
at such time, represents the amount that might reasonably be expected to
become an actual or matured liability. For purposes of determining whether
any U.S. Obligor is solvent such U.S. Obligor shall take place into
account all rights of contribution, reimbursement, subrogation and other
similar rights that such U.S. Obligor may have from any other Obligor by
virtue of such U.S. Obligor making any payment in its capacity as a
Guarantor hereunder.
(ab) U.S. RESERVE REGULATIONS:
(i) no Group Member is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock (as defined herein);
(ii) no part of the proceeds of any Advance will be used, whether
directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, any of
Regulation G, T, U or X of the Federal Reserve Board of the U.S.A;
(ac) U.S. SECURITY DOCUMENTS:
(i) the U.S. Pledge Agreement is, or when executed will be, effective
to create in favour of the Security Agent for the ratable benefit
of the Secured Beneficiaries (as defined in the U.S. Security
Agreement), a legal, valid and enforceable security interest in
Collateral (as defined in the U.S. Pledge Agreement) and, when
such Collateral is the Pledged delivered to the Security Agent,
the U.S. Pledge Agreement shall constitute a fully perfected first
priority lien on, and security interest in, all right, title and
interest of the pledgors thereunder in such Collateral, in each
case prior and superior in right to any other person, subject to
Permitted Encumbrances that have a priority as a matter of law;
(ii) the U.S. Security Agreement is, or when executed will be,
effective to create in favour of the Security Agent for the
ratable benefit of the Secured Beneficiaries (as defined in the
U.S. Security Agreement) and, when financing statements in
appropriate form are filed in the offices specified in Schedule 5
to the Perfection Certificate (as defined in the U.S. Security
Agreement), the U.S. Security Agreement shall create a fully
perfected lien on, and security interest in, all right, title and
interest of the grantors thereunder in such Collateral in which a
security interest
88
may be perfected by the filing of financing statements in each
case prior and superior in right to any other person, other than
with respect to Permitted Encumbrances that have a priority as a
matter of law;
(iii) to the extent that the laws of the United States are applicable
thereto, when the U.S. Patent Trademark, the U.S. Security
Agreement and the U.S. Patent Assignment for Security Purposes
(the "US IP SECURITY DOCUMENTS") are recorded in the United States
Patent and Trademark Office , the U.S. IP Security Documents shall
create a fully perfected lien on, and security interest in, all
right, title and interest of the grantors thereunder in the
federally registered and applied for Patents and Trademark
Collateral (as defined in the U.S. IP Security Documents), in each
case prior and superior in right to any other Person (it being
understood that subsequent recordings in the United States Patent
and Trademark Office and the United States Copyright Office may be
necessary to perfect a lien on U.S. registered trademarks,
trademark applications, U.S. patents and patent applications and
copyrights acquired by the grantors after the date hereof and the
registration of any copyright may be required to perfect a lien in
such copyright), subject to Permitted Encumbrances that have a
priority as a matter of law;
(ad) U.S. OBLIGORS:
(i) no Obligor has any ownership interest in any capital stock of any
Person organized under the laws of any State of the United States,
except for such ownership interests that are Collateral under the
U.S. Pledge Agreement; and
(ii) No Obligor directly owns any assets located in the United States,
except for (x) assets constituting real property, (y) assets that
are subject to the U.S. Pledge Agreement in accordance with clause
(i) above and (z) assets that are Collateral under the U.S.
Security Agreement; and
(ae) YEAR 2000: in relation to each Obligor which is not a Dormant Company, any
reprogramming required to permit the proper functioning, in and following
the year 2000, of (i) each such Obligor's computer systems and (ii)
equipment containing embedded microchips (including systems and equipment
supplied by others or with which each such Obligor's systems interface)
and the testing of all such systems and equipment, as so reprogrammed,
will be completed by March 31, 1999 in the case of (i) and 30 September
1999 in the case of (ii). The cost to each such Obligor of such
reprogramming and testing and of the reasonably foreseeable consequences
of year 2000 to each such Obligor (including, without limitation,
reprogramming errors and the failure of others' systems or equipment) will
not result in a Default or a Material Adverse Effect. Except for such of
the reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of each such
Obligor are and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, sufficient to permit each
Obligor to conduct its business without Material Adverse Effect.
89
18.2 REPETITION OF REPRESENTATIONS AND WARRANTIES
The representations and warranties contained in Clause 18.1;
(a) are made by the Company on the date of this Agreement; and
(b) will be deemed to be repeated by the Company on each date that a Request
is delivered to the Facility Agent, on each Drawdown Date, each Issue
Date, each Interest Date and each Expiry Date as if made with reference to
the facts and circumstances existing at that time,
Provided that the representations and warranties set out in Clause 18.1, (k),
(l), (m) (to the extent that it relates to information delivered prior to
Closing), (n) (to the extent it relates to the Business Plan), (p), and (s) of
Clause 18.1 shall not be repeated after Closing.
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PART 6
19. UNDERTAKINGS
19.1 INFORMATION UNDERTAKINGS
(a) FINANCIAL ACCOUNTS
The Company undertakes it shall furnish or procure that there shall be
furnished to the Facility Agent in sufficient copies for each of the
Finance Parties:
(i) AUDITED FINANCIAL ACCOUNTS:
(A) promptly upon the same being available but in any event not
later than 150 days from the end of the annual Accounting
Period to which the Financial Accounts relate the audited
consolidated Financial Accounts of the Group for such
Accounting Period ending after the date hereof (comprising at
least an audited consolidated balance sheet, profit and loss
account and historic cash flow statement (and the notes
thereto) for such Accounting Period);
(B) (without prejudice to (A) above) promptly after the same have
been prepared the audited Financial Accounts of any Group
Member to the extent that the same are prepared; and
(C) promptly upon the same being available but in any event prior
to the date falling 150 days from the end of the Accounting
Period to which the Financial Accounts relate or, if later,
150 days from the date the relevant request by the Facility
Agent was made, the audited Financial Accounts of any
Material Group Member previously requested by the Facility
Agent (acting reasonably) for such Accounting Period
(comprising at least an audited consolidated (if such Group
Member has a Subsidiary or Subsidiaries) balance sheet,
profit and loss account and historic cash flow statement (and
the notes thereto) for such Accounting Period),
together, in each case, with the report of the auditors thereon,
the notes thereto and the directors' report thereon;
(ii) QUARTERLY FINANCIAL ACCOUNTS: as soon as practicable, and in any
event within 45 days after the end of each quarterly Accounting
Period copies of the unaudited consolidated accounts for such
Accounting Period of the Group, such unaudited consolidated
accounts to show the detailed financial information provided for
quarterly financial reporting in the Proforma Financial Accounts
(comprising at least (A) a consolidated balance sheet and profit
and loss account for such quarter and cumulatively for the period
from the beginning of the current annual
91
Accounting Period to the end of such quarterly Accounting Period,
(B) a year to date consolidated cash flow statement for the period
from the beginning of the current annual Accounting Period to the
end of such quarterly Accounting Period, (C) details of each item
of Capital Expenditure which was not included in the budget for
such period delivered pursuant to Clause 19.1(b) in excess of
$100,000 (or the equivalent in other currencies) in such quarterly
Accounting Period, and (D) with a report on the main operational,
commercial and financial issues arising during such Accounting
Period and explaining any variances of more than five per cent.
(5%) against the budget for such quarterly Accounting Period ;
(iii) MONTHLY MANAGEMENT FINANCIAL ACCOUNTS: as soon as practicable, and
in any event within 30 days after the end of the monthly
Accounting Period to which they relate copies of the unaudited
monthly management accounts of the Group such unaudited monthly
management accounts split out monthly and on a year to date basis
to show the detailed information provided for monthly financial
reporting in the Proforma Financial Accounts, including a written
report by an Executive Officer on the main operating and financial
issues (if any) arising during such Accounting Period and
confirmation that all premiums payable in that monthly Accounting
Period in respect of all Material Insurances maintained by the
Group (or any Group Member) have been paid by such time so as to
ensure that those Material Insurances remain in full force, all
such Financial Accounts to be approved by an Executive Officer (or
in their absence one other director of the Company) and one other
director of the Company (in each case without incurring personal
liability) as giving an accurate and reasonable view of the
financial condition and trading performance of the Group;
(iv) BORROWING BASE SUMMARY: in addition to any Borrowing Base Summary
required to accompany a Request under Clause 6, the Company shall
deliver a completed Borrowing Base Summary as soon as practicable,
and in any event within 15 days after the end of each monthly
Accounting Period;
(v) AUDITOR'S CONFIRMATIONS:
(A) at the same time as the Financial Accounts for the annual
Accounting Period in each year are delivered (or, if not
delivered, required to be delivered) pursuant to Clause
19.1(a)(i); and
(B) upon the Facility Agent notifying the Company that it is of
the opinion that the process by which one or more of the
Borrowing Base Summaries is prepared requires further review
and input, as soon as practicable after any such
notification, and within 30 days thereafter,
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the Company undertakes that it will procure that the Auditors
shall deliver a certificate to the Facility Agent confirming
whether or not each of the Borrowing Base Summaries most recently
delivered under this Agreement (or such other Borrowing Base
Summaries as are identified for such purpose by the Facility
Agent) were, in all material respects, true, complete and accurate
and prepared in accordance with the provisions of this Agreement
and whether or not the Company has in place satisfactory methods
and procedures for obtaining and collating the information
required in order for it to be able to compile accurate Borrowing
Base Summaries for this Agreement having regard, where
appropriate, to each of the specific requirements of this
Agreement relating thereto including, without limitation, Clause
6.
(b) BUDGETS
The Company undertakes it shall furnish, or procure that there shall be
furnished, to the Facility Agent in sufficient copies for each of the Finance
Parties to the Facility Agent:
(i) not later than 15 days before the commencement of each annual
Accounting Period a budgeted consolidated balance sheet, profit
and loss account, cash flow statement, rolling monthly cash
forecast of the Group and budgeted monthly Capital Expenditure of
the Group, for (or in the case of a balance sheet, as at the end
of) the following annual Accounting Period, together with details
of the principal assumptions underlying such projections and a
description of the proposed activities of the Group during such
annual Accounting Period, all as approved by the board of
directors of the Company and in each case, the format, heading and
characterisation shall be consistent with the form of monthly
management accounts delivered pursuant to Clauses 19.1(a)(ii) and
19.1(a)(iii);
(ii) not later than the date on which the monthly Financial Accounts in
respect of January in each year are required to be delivered
pursuant to the terms Clause 19.1(a)(iii) a revision of the
budgets furnished to the Facility Agent pursuant to Clause
19.1(b)(i) adjusted so as to reflect the actual opening balance
sheet of the annual Accounting Period to which they relate;
(iii) if, in the course of any annual Accounting Period, the Company
updates or revises any of the budgets furnished to the Facility
Agent pursuant to Clause 19.1(b)(i) or Clause 19.1(b)(ii) in any
material respect, the Borrower shall furnish, or procure that
there shall be furnished (as soon as possible and in any event
within fourteen days of such revision), to the Facility Agent,
sufficient copies for each of the Finance Parties, such updated or
revised forecasts, together with a statement explaining the
requirement for such updating or revision; and
(iv) at the same time as it is required to deliver to the Facility
Agent Financial Accounts required by Clauses 19.1(a)(ii) and
19.1(a)(iii) , the
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Company shall deliver to the Facility Agent, in the agreed form,
in sufficient copies for each of the Finance Parties a cash flow
forecast for the Group to the end of the current annual Accounting
Period together with the basis of the assumptions used in its
preparation.
(c) CERTIFICATES
The Company undertakes it shall furnish or procure that there shall be
furnished to the Facility Agent in sufficient copies for each of the
Finance Parties:
(i) at the same time as the Financial Accounts for any annual
Accounting Period are delivered (or, if not delivered, required to
be delivered) pursuant to Clause 19.1(a)(i):
(A) a report of the Company in a form reasonably satisfactory to
the Facility Agent setting out in reasonable detail
computations establishing, as at the date of such Financial
Accounts, whether each of the financial undertakings set out
in Clause 20 were complied with, (B) setting out in
reasonable detail computations demonstrating the application
of the financial ratios set out in Clause 20 for such
Accounting Period such report being confirmed by the
Auditors as being true and accurate; and
(B) a certificate signed by two Authorised Signatories of the
Company (one of whom shall be an Executive Officer (in each
case without incurring personal liability)), stating that as
the date of such certificate no Event of Default has
occurred and is then continuing, and that so far as the
Company is aware having made due and diligent enquiry, no
Potential Event of Default has occurred and is continuing,
or providing details of any such Defaults and of any
remedial action proposed to be taken; and
(ii) at the same time as the Financial Accounts for any quarterly
Accounting Period are delivered (or, if not delivered, required to
be delivered) pursuant to Clause 19.1(a)(ii) above a Compliance
Certificate, signed by two Authorised Signatories of the Company
(one of which shall be an Executive Officer (in each case without
incurring personal liability)):
(A) setting out in reasonable detail computations establishing,
as at the date of such Financial Accounts, whether each of
the financial conditions set out in Clause 20 was complied
with; and
(B) stating that as at the date of such certificate no Event of
Default has occurred and is then continuing and that so far
as the Company is aware having made due and diligent
enquiry, or providing details of any such Default and of any
remedial action proposed to be taken ; and
94
(iii) at the same time as the Financial Accounts for the annual
Accounting Period in each year are delivered (or, if not
delivered, required to be delivered) pursuant to Clause 19.1(a)(i)
above the Company shall procure that the Auditors shall, confirm
(by reference to the relevant Financial Accounts) whether or not
each of the Financial conditions set out in Clause 20 was complied
with.
(d) REVIEWS: The Majority Banks shall be entitled to request the Facility
Agent no more frequently than quarterly to conduct a review of books and
accounting records of each Borrower to examine the basis of the
information used by the Company to compile the Borrowing Base Summaries
delivered to the Facility Agent hereunder provided that:
(i) such a review does not take place more than once in any annual
Accounting Period unless the Facility Agent (acting reasonably) is
of the opinion that some or all of the information contained in
any of the Borrowing Base Summaries may be inaccurate:
(ii) any Bank may request on reasonable notice a copy of the results of
any such review carried out by or on behalf of the Facility Agent;
(iii) neither the Facility Agent nor any of its employees, directors,
agents or advisers shall have any responsibility or liability
whatsoever for the accuracy or completeness of any such review;
and
(iv) the Company shall indemnify the Facility Agent on demand for all
reasonable costs and expenses incurred in connection with any such
review;
(e) NOTIFICATIONS: The Company undertakes it shall furnish, or procure that
there shall be furnished to the Facility Agent, in sufficient copies for
each of the Finance Parties:
(i) promptly upon their despatch (and in any event within ten Business
Days), all notices, reports or other documents despatched by or on
behalf of any Obligor to (a) its shareholders (in their capacity
as shareholders) generally (or any class of them); (b) to its
creditors generally (in their capacity as creditors), or any class
of them; and; (c) (without prejudice to (b) above) the Noteholders
or, the Note Trustee, or any SEC filings made in connection with
all or any of the Note Documents or otherwise;
(ii) promptly, and in any event within ten Business Days of the same
being instituted or, to its knowledge, threatened, details of any
litigation, arbitration or administrative proceedings involving it
or any of its Subsidiaries which, if adversely determined might,
have a Material Adverse Effect or which would involve liability or
potential liability or alleged liability in excess of $250,000 (or
its equivalent in other currencies);
95
(iii) at the same time as the monthly Financial Accounts in respect of
the period during which the same becomes known to the Company or
any other Group Member is delivered under Clause 19.1(a)(ii),
19.1(a)(iii) (or, if not delivered, the latest date by which they
are required to be delivered) reasonable details of all warranty
and indemnity claims in excess of $100,000 made by or against any
Group Member or any shareholder of the Company pursuant to, or in
respect of, the Recapitalisation Documents or which could be so
made if Clause 9(b) of the Recapitalisation Agreement was
disregarded ;
(iv) promptly, and in any event within ten Business Days of the same
being delivered or received, and in any event by 15 June 1998 the
Completion Accounts;
(v) promptly (and in any event within ten Business Days or such other
period as the Facility Agent may require) upon being so requested,
such further information regarding its financial condition,
business and assets and that of the Group and/or any Group Member
(including any requested amplification or explanation of any item
in any Financial Accounts, budgets, projections or other material
provided by any Group Member under this Agreement) as the Facility
Agent or any Finance Party through the Facility Agent may
reasonably request from time to time;
(vi) at the same time as the monthly Financial Accounts in respect of
the period during which the same occurs are delivered under Clause
19.1(a)(ii) or Clause 19.1(a)(iii) (or, if not delivered, the
latest date by which they are required to be delivered), details
of all transfers of shares of any Group Member (which when taken
together with any other transfer made to Persons connected with or
associated with the relevant transferee equate to 3 per cent or
more of the issued share capital of such Group Member) in the
share capital of any Group Member (including any change in the
beneficial ownership of any such shares of which any of the
directors of the Company become aware) and details of the issue
and allocation of any shares in the capital of the Company;
(vii) written details of any Default forthwith upon the Company becoming
aware of the same, and of any remedial steps being taken and
proposed to be taken in respect of that Default;
(viii) (other than to a transferee or in respect of replacement Senior
Notes) promptly (and in any event within ten Business Days) upon
the Company being aware, details of any Additional Securities (as
defined in the Note Indentures) being issued after Closing under
or pursuant to the Note Documents;
(ix) promptly (and in any event, within ten Business Days) upon the
Company being aware, details of any Group Member that is not
listed at Schedule 12 that becomes a "Material Group Member";
96
(x) promptly (and in any event, within ten Business Days) upon the
Company being aware, details of any Group Member that is a Dormant
Company, ceasing to be a Dormant Company;
(xi) promptly upon the Company being aware (and in any event within ten
Business Days), details of any change in any applicable
Environmental Law which is reasonably likely to have a Material
Adverse Effect; and
(xii) promptly (and in any event within ten Business Days) after receipt
or despatch thereof deliver to the Facility Agent sufficient
copies for each of the Finance Parties certified copies of all
notices given by any Group Member under any of the Transaction
Documents.
(f) LISTINGS: The Company shall promptly (and in any event within 14 days of
the relevant proposal) inform the Facility Agent of any Listing of any
Group Member proposed by the Board of Directors.
(g) AUDIT AND ACCOUNTING DATES: The Company will ensure that:
(i) the annual Financial Accounts to be delivered to the Facility
Agent pursuant to Clause 19.1 are audited by the Auditors;
(ii) it shall at all times have duly appointed Auditors;
(iii) each Accounting Period of the Group shall end on an Accounting
Date; and
(iv) each annual Accounting Period of each Group Member shall, with the
exception of Derby Nederland BV and its Subsidiaries (which annual
Accounting Period shall end on 30 November or, if such annual
Accounting Period is changed at any time after the date of this
Agreement, 31 December) no later than 30 June 1998, end on 31
December, and no Group Member will change its financial year end
without prior written consent of the Facility Agent other than to
conform its financial year end to 31 December.
19.2 FORM OF FINANCIAL STATEMENTS
Each set of consolidated financial statements delivered by or on behalf of the
Company in connection with this Agreement shall, subject to Clause 19.3 and the
proviso stated below be prepared (and if appropriate, audited) on the same basis
as the Pre-Closing Accounts and in accordance with Applicable Accounting
Principles provided that if the Auditors have confirmed in writing to the
Facility Agent that a change in the basis on which the Financial Accounts are
prepared is:
(a) necessary so as to take into account changes in applicable laws since the
date the above mentioned Financial Accounts were prepared;
97
(b) necessary so that the Financial Accounts to which such proposed change
relates are not qualified by the Auditors in a manner which they would
otherwise have been qualified; or
(c) in their opinion, appropriate;
and, in the case of a proposed change to which paragraph (b) or (c) above
applies the Facility Agent, acting on the instructions of the Majority Banks has
approved the proposed change (such approval not to be unreasonably withheld or
delayed), from such date each set of financial statements delivered by or on
behalf of any Group Member in connection with this Agreement shall be prepared
as aforesaid, but subject to such change.
19.3 VARIATION OF FINANCIAL UNDERTAKINGS
In the case of any change in Applicable Accounting Principles, any change to be
made in accordance with Clause 19.2 or any proposed change in accounting
reference date of the Company the Company shall, promptly upon becoming aware,
notify the Facility Agent of such change or such proposed change, and as soon as
practicable after receipt of such notice, the Company and the Facility Agent
shall (for a period of up to 7 days) negotiate with a view to agreeing such
varied financial undertakings as would provide the Finance Parties with no less
protection as the financial undertakings set out in Clause 20 as at the date of
the Agreement to the extent that any revised financial undertakings will, as
nearly as practicable, be based on a similar differential as that between the
financial projections in the Business Plan and the financial undertakings as at
the date of this Agreement). If, after any negotiations conducted between the
Facility Agent and the Company, an agreement is not able to be reached as to
what adjustments (if any) are required to be made to the financial undertakings
contained in this Agreement, within the said 7 day period (or such negotiations
are not commenced within 7 days of the receipt of the Facility Agent of the
relevant notice (or such longer period as the Facility Agent may agree)) the
matter shall be referred to the Auditors to determine, as experts and not as
arbitrators. The costs of the Auditors shall be for the account of the Company.
For the avoidance of doubt, during any such period of consultation, the
financial undertakings set out in Clause 20 shall be calculated in accordance
with Applicable Accounting Principles prevailing before the relative
determination, introduction or implementation.
19.4 POSITIVE UNDERTAKINGS
(a) TAXES: The Company shall, and shall procure that each other Group Member
shall, pay and discharge all Taxes and governmental charges prior to the
date on which the same become overdue other than in respect of Taxes and
governmental charges which, in aggregate, are less than $10,000 (or the
equivalent in other currencies) and overdue by no more than 30 days,
unless, and only to the extent that such Taxes, shall be contested in good
faith by appropriate proceedings, pending determination of which payment
may lawfully be withheld, and there shall be set aside adequate reserves
with respect to any such Taxes or charges so contested in accordance with
Applicable Accounting Principles.
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(b) INSURANCES:
(i) The Company shall, and shall procure that each other Group Member
shall, maintain in full force and effect prudent insurances on and in
relation to its business and assets and in particular and without
limitation:
(A) maintain in full force and effect insurances covering the risks
covered by the insurances set out in Schedule 15 or replacements
therefor as the case may be, and in each case: to the same level
of sums insured as detailed in Schedule 15 and if the Security
Agent shall so stipulate in an insurance office with
underwriters approved by the Security Agent or if and to the
extent that the Security Agent does not so stipulate, in such
insurance office of repute as shall have been selected by the
Company or with Lloyd's underwriters and in the joint names of
the relevant insured Group Member or Group Members (as the case
may be) or, to the extent that the Facility Agent has confirmed
to the Company that, in its opinion (acting reasonably) it is
not practicable or possible for any such insurance to be in the
joint names of the relevant Group Member or Group Members (as
the case may be) and the Security Agent, the Security Agent
shall be named thereon as "Loss Payee";
(B) without prejudice to Clause 19.4(b)(i)(A), cause all Inventory,
Receivables, buildings, trade and other fixtures, fixed and
other plants and machinery forming part of the Secured Property
to be insured and to be kept insured:
(1) (if the Security Agent shall so stipulate) in an insurance
office with underwriters approved by the Security Agent
against loss or damage by fire, explosion, aircraft and all
such other risks as the Security Agent shall direct to the
full reinstatement value thereof adequate provision also
being made for the cost of clearing the site and architects
engineers, surveyors and other professional fees incidental
thereto and the loss of rents or prospective rents (for a
period of not less than three years) in the joint names of
the Group Member that occupies or owns the relevant Secured
Property and the Security Agent; or
(2) (if and to the extent that the Security Agent does not so
stipulate) in such insurance office of repute as shall have
been selected by the Company or with Lloyd's underwriters
on the same basis as insurances are maintained by prudent
companies carrying on businesses comparable with that of
the relevant Group Member and on a comparable scale as
regards the property and assets insured the insured risks
and the classes of risk to be covered;
(C) without prejudice to Clauses 19.4(b)(i)(A) and 19.4(b)(i)(B),
maintain such other insurances (including, but without
limitation, product liability insurance with a deductible of not
more than $250,000 in respect of any
99
one claim) are as normally made by prudent companies carrying on
similar businesses including business interruption insurances,
public liability insurances and employers liability insurance;
(D) promptly and in any event within 20 days following any request
to do so, provide the Facility Agent with such information in
relation to insurances maintained or previously maintained by
any Group Member as the Facility Agent may (acting reasonably)
request from time to time;
(E) duly and punctually pay all other premiums and other monies
payable under such insurances as aforesaid and promptly upon
request by the Security Agent produce the premium receipts or
other evidence of the payments thereof;
(F) (if so required by the Security Agent but subject to the
provisions of any lease of the Secured Property) deposit all
policies and other contracts of insurance relating to the
Secured Property or any part thereof with the Security Agent or
produce to the Security Agent for inspection; and
(G) if default shall be made by any Group Member in complying with
paragraphs (A), (B), (C), (D) or (E) above it shall be lawful
for the Security Agent but not obligatory on the Security Agent
to effect or renew any such insurance as is mentioned in that
paragraph either in its own name or in its name and that of the
relevant Group Member or in the name of the Company with an
endorsement of the Security Agent's interest, the monies
expended by the Security Agent in so effecting or renewing any
such insurance shall be reimbursed by the Company to the
Security Agent on demand and shall until so reimbursed shall
carry interest at the rate (as well after as before any
judgment) as provided for in Clause 9 of this Agreement mutatis
mutandis from the date of payment to the date of reimbursement.
(ii) The Company undertakes that:
(A) if an Event of Default has occurred and is continuing (and has
not been waived in writing by the Facility Agent on behalf of
the Banks); or
(B) (otherwise) to the extent not applied in repair, replacement or
reinstatement of physical loss or damage;
(and without prejudice to the provisions of any Security Document) it
will procure that the proceeds of any policy of insurance (other than
any such policy in respect of third party liabilities) maintained by
any Group Member shall:
(C) if such proceeds relate to an asset or assets which, in the
opinion of the Facility agent were utilised by the relevant
Group Member in or towards the generation of income and are more
than $250,000 (or the equivalent in other currencies), be
applied in or towards prepayment of the whole
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or such part of the Facilities as the Facility Agent (acting on
the instructions of the Majority Banks) shall direct whereupon
the Total Commitments shall be cancelled by an amount equal to
such proceeds and the Standby L/C Commitment of each Bank shall
be reduced by a proportionate amount pro rata and the Revolving
Commitment of each Bank (including, for the avoidance of doubt,
the Revolving Commitment of each Ancillary Bank disregarding,
for this purpose, its Ancillary Commitment) shall be reduced by
a proportionate amount and pro rata to their respective
Revolving Commitments at such time.
(c) HEDGING ARRANGEMENTS: The Company shall put or cause there to be put into
effect as soon as possible and in any event within 30 days from the first
Drawdown Date in form and substance satisfactory to the Facility Agent
with such counterparty as is (or counterparties as are) acceptable to the
Facility Agent (acting reasonably) and then maintain in full force and
effect, exercisable by and for its benefit interest rate hedging or
protection arrangements and currency rate protection arrangements in
accordance with the Approved Hedging Programme.
(d) SECURITY - UK OBLIGORS If requested to do so by the Facility Agent, the
Company shall procure that in respect of any Group Member incorporated in
England and Wales, Scotland or Northern Ireland (that is not a Dormant
Company) to which such request relates there is delivered to the Facility
Agent within 45 days (or such longer period as the Majority Banks may
agree) a Guarantor's Accession Agreement and/or a Guarantee together with
a notice of accession under the Intercreditor Agreement duly executed by
such company and the Company and a Security Document, together with each
of the conditions precedent documents required to be provided in
connection therewith, all in a form and substance reasonably satisfactory
to the Facility Agent. Notwithstanding anything to the contrary in this
Agreement, only the Company shall be liable for its obligations under this
Agreement and nothing herein shall oblige an Obligor to guarantee or act
as a guarantor for any obligation of the Company under this Agreement.
(e) SECURITY - NON-UK OBLIGORS If requested to do so in writing by the
Facility Agent, the Company shall procure that in respect of a Group
Member not incorporated in England and Wales (that is not a Dormant
Company) to which such request relates there is delivered to the Facility
Agent within 45 days (or such longer period as the Majority Banks may
agree) of any such request a Guarantor's Accession Agreement and/or a
Guarantee duly executed by such Non-UK Obligor, a Security Document
together with a notice of accession under the Intercreditor Agreement and
each of the conditions precedent documents required to be provided in
connection therewith, all in a form and substance reasonably satisfactory
to the Facility Agent save that, notwithstanding the foregoing, (x) only
the Company shall be liable for its obligations under this Agreement and
nothing herein shall oblige an Obligor to guarantee or act as a guarantor
for any obligation of the Company under this Agreement and (y) nothing
herein shall oblige the Company to pledge (as determined by applicable
law) more than 65% of its interest in the voting share capital in any of
its Immediate Subsidiaries and the Company shall not be obliged to procure
that a Non-UK Obligor (the "RELEVANT COMPANY") becomes an Obligor:
101
(i) if it is unlawful in the Relevant Company's jurisdiction of
incorporation for it to support the obligations of the Company under
the Finance Documents and, for the purposes of this Clause 19.4 it
shall not be unlawful if an amendment to the Relevant Company's
constitutive documents may be made which would enable it lawfully to
become an Obligor; or
(ii) if, as a result of the Relevant Company becoming an Obligor, the
directors of the Relevant Company in their capacity as directors of
an Obligor otherwise than solely as a result of any such director
failing to properly discharge all of his obligations and duties in
his capacity as a director of such Relevant Company would be liable
to criminal prosecution solely as a result of the Relevant Company
becoming an Obligor,
and, in each case, the maximum level of support provided by an Obligor
shall not exceed the maximum amount able to be provided by such Relevant
Company having regard to generally applicable laws in its country of
incorporation.
(f) SECURITY THRESHOLD: Without prejudice to Clauses 19.4(d), 19.4(e) and
19.4(g) the Company shall procure that if:
(i) the consolidated earnings before interest, tax depreciation and
amortisation of the Obligors as at the last day of the quarterly
Accounting Period of the Group last ended is less than 85 per cent of
the Consolidated Adjusted EBITDA in respect of such quarterly
Accounting Period (as determined by reference to the Compliance
Certificate delivered pursuant to Clause 19 in respect of such
Accounting Period); and
(ii) at any time the total assets of the Obligors is less than 85 per cent
of the sum of the Total Assets less the value of pre-paid pension
assets shown in the latest annual Financial Accounts of the Company
at such time,
then promptly after service of a notice to that effect on the Company by
the Facility Agent and in any event within forty five days (or such longer
period as the Facility Agent acting on the instructions of the Majority
Banks may agree) thereafter, in the event that the shortfall was with
respect to paragraph (i) above, a Group Member or Group Members whose
earnings before interest, tax depreciation and amortisation in aggregate
in respect of the financial year to which such shortfall relates was equal
to or greater than such shortfall and/or in the event that the shortfall
was with respect to paragraph (ii) above a Group Member or Group Members
whose total assets at such time in aggregate is equal to or greater than
such shortfall shall each execute a Guarantor's Accession Agreement or
enter into a Guarantee and in each case execute a Security Document over
all of its assets (both present and future) and an Intercreditor Agreement
Accession Notice and deliver them to the Facility Agent together with the
conditions precedent documents required to be provided in connection
therewith, all in a form and substance satisfactory to the Facility Agent,
Provided that for the purposes of this Clause 19.4(f) the terms "adjusted
earnings before interest, tax, depreciation and amortisation" and "total
assets" of a company shall be determined in accordance with the
capitalised defined terms contained in
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Clauses 1.1 and 1.2 (namely "Consolidated Adjusted EBITDA" and "Total
Assets" respectively), but as if references therein to the Company were
references to such company, references therein to the Group were
references to such company, references to the relevant period were
references to the annual Accounting Period of such company, and references
therein to the consolidated financial statements were references to the
latest audited financial statements of such company and on the basis that
all intra-Group items and investments shall be excluded.
(g) ADDITIONAL SECURITY
(i) The Company shall procure that (a) on acquiring (and in any event
within 45 days of such acquisition) any asset of material value, or
material to the operation of the business of any Obligor or to the
value of any other asset over which the Banks have security, the
Obligor acquiring such asset shall (if such asset is not, in the
reasonable opinion of the Security Agent, subject to any existing
Security Document giving equivalent security to that provided by the
Security Documents over similar assets held by any Obligor at
Closing and (subject to sub-paragraph (iii) below) it is legal,
practical and (in the opinion of the Facility Agent, acting
reasonably and having regard to the value of the asset or its
materiality to the operation of the business of such Obligor) cost
effective to do so) execute and deliver to the Security Agent such
further or additional Security Documents in relation to such assets
as the Majority Banks may require in substantially the same terms as
the Security Documents charging similar assets entered into at
Closing, and (b) if there has, in the reasonable opinion of the
Majority Banks, been a material and adverse change in the business,
assets or financial condition of any Obligor, such Obligor shall
execute and deliver to the Security Agent such further or additional
Security Documents in such form and in relation to such of its
assets as the Majority Banks shall require, subject in each case to
any provisions of law prohibiting such person from entering into
such Security Documents provided that notwithstanding the foregoing
(y) only the Company shall be liable for its obligations under this
Agreement and nothing herein shall oblige an Obligor to guarantee or
act as a guarantor for any obligation of the Company under this
Agreement and (z) nothing herein shall oblige the Company to pledge
(as determined by applicable law) more than 65% of its interest in
the voting share capital in any of its Immediate Subsidiaries.
(ii) The Company shall procure that any entity which becomes a Material
Group Member after Closing shall (within 45 days of becoming a
Material Group Member) execute and deliver to the Security Agent
such further or additional Security Documents in such form and in
relation to such of its assets as the Majority Banks shall require
subject to any provision of law prohibiting such person from
entering into such Security Documents.
(iii) Where any such prohibition as is referred to above exists, the
Obligors shall use their reasonable endeavours lawfully to overcome
the prohibition, and the Security Agent may (but shall not be
obliged to) agree with the relevant Obligor limitations on the
extent of the security granted by it to the extent
103
that in its opinion, based on the advice of independent legal
counsel acceptable to the Security Agent in the relevant
jurisdiction, it is necessary to do so in order to overcome the
prohibition.
(iv) The Obligors shall at their own expense execute and do all such
assurances, acts and things as the Security Agent or the Majority
Banks may reasonably require for perfecting or protecting the
security intended to be afforded by the Security Documents or for
facilitating the realisation of all or any part of the assets which
are subject to the Security Documents and the exercise of all
powers, authorities and discretion's vested in the Security Agent or
in any receiver of all or any part of those assets and in particular
shall execute all transfers, conveyances, assignments and releases
of that property whether to the Security Agent or to its nominees
and give all notices, orders and directions which the Security Agent
may reasonably think expedient.
(v) The Company shall procure that in relation to each further or
additional Security Document the relevant Borrower or Guarantor
shall do all things necessary duly to perfect in the jurisdiction of
its incorporation and in the jurisdiction wherein the assets which
are the subject of the further or additional Security Documents are
located, the security to be afforded to the Finance Parties under
such further or additional Security Documents and shall deliver to
the Security Agent such directors and shareholders resolutions,
legal opinions, notices, certificates or documents of title or other
items as the Facility Agent shall require.
(h) NEW AUDITORS: Other than in circumstances where the outgoing auditor has
resigned the Company may appoint any one or more of Coopers ▇▇▇▇▇▇▇, ▇▇▇▇▇
& Young, KPMG, Deloitte & Touche, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or Price Waterhouse (or
such other firm or firms as the Facility Agent may agree from time to
time) without the prior approval of the Facility Agent and in all other
cases the Company may only change its auditors with the prior approval of
the Facility Agent. If the Company wishes to change its auditors it will
notify the Facility Agent as to the reasons for any such proposed change
and if the Facility Agent so requests, will instruct the audit partner of
each of the outgoing firm of auditors and the replacement firm of auditors
to discuss the financial position of the Group with the Facility Agent.
The Company shall procure that, within ten Business Days of the date of
their appointment as Auditors, the accountants shall deliver to the
Facility Agent a letter from such newly appointed Auditors confirming that
they are aware of the provisions of this Agreement, including Clauses 6.3,
6.10, 19.1 and 20.
(i) PARI PASSU RANKING: The Company shall ensure that the obligations of each
Group Member under the Senior Finance Documents to which they are
expressed to be a party rank, and will at all times rank, at least pari
passu in right and priority of payment and in point of security (save by
reason of and to the extent of the security afforded thereto by the
Security Documents) with all its other present and future unsecured and
unsubordinated obligations, other than obligations applicable generally to
companies incorporated in its jurisdiction of incorporation which have
priority by operation of law (including, without prejudice to the
generality of the foregoing, in respect of employees' remuneration, Taxes
and like obligations).
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(j) COMPLIANCE WITH LAWS: The Company shall, and shall procure that each
Obligor and other Material Group Member shall procure that each other
Group Member shall, comply with all applicable laws, rules, regulations
and orders of any governmental authority, whether domestic or foreign,
having jurisdiction over it or any of its assets, failure to comply with
which might have a Material Adverse Effect.
(k) CONSENTS: The Company shall, and shall procure that each Obligor and each
Material Group Member (that is not an Obligor) shall, obtain, promptly
renew from time to time and maintain in full force and effect, and if so,
requested promptly furnish certified copies thereof to the Facility Agent,
all such material authorisations, approvals, consents, licences and
exemptions as may be required under any applicable law or regulation:
(i) to enable each Obligor to perform its respective material obligations
under the Finance Documents to which it is a party or required for
the validity or enforceability of such Finance Documents or of any
Encumbrances provided for thereby; and/or
(ii) to carry on its business as it is being conducted from time to time.
(l) THE PAYMENT OF EXISTING FINANCIAL INDEBTEDNESS: The Company shall pay
(or, as the case may be, procure that each other Group Member shall pay)
all amounts payable to Derby International and any other Persons to whom
the Existing Financial Indebtedness is owed and will otherwise perform its
material obligations in accordance with the terms of each of the
Recapitalisation Documents, and the Company will ensure that appropriate
action is taken to ensure receipt by the Company (or the relevant Group
Member) of any sums payable by any Person to any Group Member under any of
the Recapitalisation Documents.
(m) BOOKS AND RECORDS: The Company shall, and shall procure that each other
Group Member shall, keep or cause or procure to be kept proper books of
account and records relating to the business.
(n) GROUP ACTIVITY: The Company shall, and shall procure that each Group
Member shall, conduct any trading business it has with any other Group
Member on an arm's length basis and on terms and conditions similar to
those such Group Member offers (or, if it does not so offer, might
reasonably be expected to offer) to Persons that are not a Group Member or
consistent with practice applicable at the date hereof.
(o) ACCESS: Upon reasonable notice being given by the Facility Agent , the
Company will procure that any one or more representatives of the Facility
Agent and/or accountants or other professional advisers appointed by the
Facility Agent shall be entitled to have access during normal business
hours (i) to the Persons involved in the management of the Group as the
Facility Agent may reasonably request), and (ii) to the assets, books and
records of each Group Member that is not a Dormant Company, and are able
to inspect and copy the same at reasonable times.
(p) PENSION SCHEMES: The Company will, if requested by the Facility Agent
deliver to the Facility Agent (i) at such time as those reports are
prepared in order to comply with
105
then current statutory or auditing requirements and (ii) not more than
once in any period of three years, if the Facility Agent reasonably
believes that the requirements of this Clause 19.4(p) are not being
complied with, actuarial reports in relation to each of the pension
schemes with an actuarial valuation of liabilities of more than $1,000,000
(or the equivalent thereof in other currencies) for the time being
operated by the Group Members (in sufficient copies for each of the
Finance Parties), and will, save as fully and fairly disclosed in the
Accountant's Report, ensure that all such pension schemes are fully funded
in accordance with reasonable actuarial assumptions applicable in the
jurisdiction in which the relevant pension scheme is maintained and in
accordance with Applicable Accounting Principles or, to the extent that
any such pension scheme is not fully funded, promptly upon being aware
thereof, take such action as is required to ensure that such pension
scheme is fully funded in accordance with the recommendations made or
instructions given in such respect of the relevant actuaries.
(q) SYNDICATION: The Company shall ensure that all Group Members will provide
assistance to the Facility Agent and the Arranger in the preparation of
the information memorandum for syndication of the Facilities, make the
Executives available, comply with all reasonable requests for information
from potential syndicate members and provide reasonable opportunities for
potential syndicate members to have access to their respective managers
and other personnel and to any sites operated by any Group Member.
(r) REGISTERED OFFICE: The Company shall, and shall procure that each Obligor
(that is not a Material Group Member) and each Material Group Member
shall, promptly (and in any event within 4 days) notify the Facility Agent
in writing of any change in its name or in the address of its registered
or principal office.
(s) EXECUTIVES: The Company undertakes that if (i) either the Chief Financial
Officer, or the Chief Executive Officer ceases or (ii) more than one
Executive together cease (whether by reason of death, retirement at normal
retiring age, ill health or otherwise) to perform the functions for which
he was or they were (as the case may be) employed it will within 6 months
of such Executive ceasing to perform such functions have offered to a
Person or Persons (as the case may be) having the appropriate
qualifications, background and experience, the position of the relevant
Executive or Executives (as the case may be) and such Person or Persons
(as the case may be) shall have accepted such offer in writing and the
Company will procure that each such Person shall have taken up his duties
as the relevant Executive of the Company within 6 months of each such
Executive ceasing to perform such functions.
(t) DORMANT COMPANIES: Each Obligor will procure that, save as permitted by
the Facility Agent or unless it becomes an Obligor and a party to the
Debenture or such other Security Document satisfactory to the Facility
Agent and provides to the Facility Agent each of the condition precedent
documents required to be provided in connection therewith, no Dormant
Company shall commence to trade (whether for its own account or for that
of another) after Closing or the date it became a Group Member (if later)
or incur any further liabilities or hold or acquire (whether legally or
beneficially) any material assets or property after such date.
106
(u) ERISA: Each U.S. Obligor will not, and will procure that no ERISA
Affiliate will engage in any transaction in connection with which any U.S.
Obligor or any ERISA Affiliate could be subjected to either a civil
penalty assessed pursuant to section 502(i) of ERISA, a tax imposed by
section 4975 of the IRC or breach of fiduciary duty liability damages
(whether directly or indirectly);
(v) COMPLIANCE WITH MARGIN STOCK REGULATION: Each U.S. Obligor shall not, and
shall procure that its Subsidiaries shall not:
(i) (A) sell, carry, pledge or otherwise dispose of any margin stock
("MARGIN STOCK") within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System of the U.S.A. as in
effect from time to time ("REGULATION U"), now owned or acquired
after the date of this Agreement; or
(B) incur any Financial Indebtedness directly or indirectly secured
(within the meaning of Regulation U) by any Margin Stock;
if such transaction would cause any of the Advances or any part thereof to
be in violation of Regulation U, or Regulation X of the Board of Governors
of the Federal Reserve System of the U.S.A., as in effect from time to
time ("REGULATION X");
(ii) use the proceeds of any Advance, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any Margin Stock or for the purpose of maintaining, reducing
or retiring any indebtedness which was originally incurred to
purchase or carry any stock that is currently a Margin Stock or for
any other purpose which might constitute any of the Facilities or
this Agreement a "purpose credit" within the meaning of Regulation U
or Regulation X. No Obligor and no agent acting on its behalf will
take or has taken any action which might cause this Agreement or the
Advances to violate Regulation U or Regulation X or any other
regulation of the Board of Governors of the Federal Reserve System.
(w) UCC FILINGS: Each U.S. Obligor at its own expense will make and renew
promptly or request the Facility Agent to instruct appropriate United
States counsel to make and renew, and, in any event, in the case of
renewal such that the renewal is made before any UCC filing relating to
any Senior Finance Document expires, all UCC filings relating to any
Senior Finance Document reasonably required by the Facility Agent and will
pay all applicable fees.
(x) INTELLECTUAL PROPERTY RIGHTS: The Company shall and shall procure that
each Group Member shall:
(i) make such registrations and pay such fees, registration Taxes and
similar amounts as are necessary to keep those Intellectual Property
Rights which are material in the context of the business of any Group
Member and which are required by it in order for it to carry on its
business in accordance with
107
the Business Plan in force and to record its interest in those
Intellectual Property Rights;
(ii) take such steps as are necessary and commercially reasonable
(including, without limitation, the institution of appropriate legal
proceedings) to prevent third parties infringing the Material
Intellectual Property Rights and (without prejudice to paragraph (i)
above) take such other steps as are reasonably practicable to
maintain and preserve its interests in those rights;
(iii) promptly upon being required to so by the Security Agent, comply
with all proper instructions of the Security Agent which the
Security Agent is entitled to give under the Security Documents in
respect of the Intellectual Property Rights referred to in paragraph
(i) above; and
(iv) own or have licensed to it all Intellectual Property Rights which
are material in the context of its business and which are required
by it in order for it to carry on its business in accordance with
the Business Plan and that in carrying on its business it does not
infringe any Intellectual Property Rights of any third party in any
way.
(y) CLEAN DOWN: The Company shall ensure that for a continuous period of at
least 30 days during the period of 1 July to 31 October (inclusive) during
each annual Accounting Period the aggregate Deutschmark Equivalent of all
Financial Indebtedness of the Group (excluding any Financial Indebtedness
owed by a Group Member to another Group Member) other than under the Note
Documents and foreign exchange transactions (and without double-counting)
outstanding at any time during such period does not exceed DM 80,000,000
(or the equivalent thereof in other currencies).
(z) DISTRIBUTIONS: The Company shall ensure that:
(i) no agreement, instrument, Articles of Association or any other
arrangement (other than the Senior Finance Documents) shall restrict
or prevent any Group Member (excluding the Company) from declaring
or making payment of any dividend or make any other distributions of
capital or income profits (any such payment being a "GROUP COMPANY
DISTRIBUTION") to the maximum amount permitted by generally
applicable laws in the jurisdiction in which such Group Member is
incorporated provided that no Group Company Distribution shall be
paid to any Person in breach of Clause 19.5(o); and
(ii) each Group Member (that is not an Obligor) makes Group Company
Distributions in each annual Accounting Period to the maximum extent
permitted by generally applicable laws in the jurisdiction in which
such Group Member is incorporated, to the extent not restricted by
the terms and conditions of any of the Senior Finance Documents
(including without limitation Clause 19.5(o)).
(aa) NOTE EXCHANGE: Notwithstanding any other provision of this Agreement
nothing herein shall be construed as prohibiting any Note Issuer, from
time to time, agreeing
108
to the exchange of one type of Senior Note for another type of Senior Note
or the refinancing of a Senior Note from the proceeds of the issuance of
new Senior Notes in accordance with the provisions of the Note Documents
and taking such action as is required to facilitate the same.
(ab) EXCHANGE CONTROL UNDERTAKING: The Company shall use its reasonable
endeavours to ensure that both members of the South African Group obtain
and maintain an Exchange Control Undertaking as soon as it is practicable
to do after the date of this Agreement and accede to this Agreement as
Borrowers and Guarantors.
19.5 NEGATIVE UNDERTAKINGS
(a) NEGATIVE PLEDGE: The Company shall not, and shall procure that no other
Group Member shall, create or permit to subsist any Encumbrances on the
whole or any part of its respective present or future business, assets or
undertaking (including its Intellectual Property Rights) other than
Permitted Encumbrances.
(b) DISPOSALS: The Company shall not, and shall procure that no other Group
Member shall, sell, transfer, lease, lend or otherwise dispose of or enter
into any agreement under which it may be or become obliged to sell,
transfer, lease, lend or otherwise dispose of any of its shares in any
Group Member or undertaking and assets from time to time either in a
single transaction or a series of transactions otherwise than:
(i) (in the case of any Group Member which is a trading company)
disposals of trading assets in the ordinary course of trading on
arm's-length terms;
(ii) disposals of assets on arm's length terms not otherwise permitted
under this Clause 19.5(b) provided that the aggregate fair market
value of the assets disposed of during any annual Accounting Period
does not exceed $500,000 (or the equivalent thereof in other
currencies);
(iii) disposal of assets in exchange for other assets comparable or
superior as to type, value and quality;
(iv) disposals of surplus, obsolete or redundant plant and equipment, or
of land or buildings not required for the efficient operation of its
business, on arm's length terms and at fair market value;
(v) the expenditure of Cash in payment for assets or services acquired
at market value in the course of its business carried on in
compliance with the terms of the Senior Finance Documents;
(vi) the lending of Cash and payment or repayment of Cash lent in
compliance with the terms of the Senior Finance Documents;
(vii) the disposal of assets by one UK Obligor to another UK Obligor on
an arm's length basis on normal commercial terms;
109
(viii) (to the extent that paragraph (vii) does not apply) the disposal of
assets by one Obligor (the "DISPOSING OBLIGOR") to another Obligor
(the "RECIPIENT OBLIGOR") on an arm's length basis on normal
commercial terms provided that the recipient Obligor has received
prior confirmation from the Facility Agent that it is satisfied
that the Encumbrance that the recipient Obligor has given (or, as
the case may be, will give promptly after the proposed disposal
pursuant to a Security Document) is such that the Encumbrance
granted thereby, should the proposed disposal be permitted pursuant
to this paragraph (viii), over the relevant asset or assets is, or
will be, at least as favourable to the Finance Parties as the
Encumbrance that the disposing Obligor provided to the Finance
Parties over such assets or assets immediately before the proposed
disposal;
(ix) the payment of dividends in compliance with the terms of the Senior
Finance Documents;
(x) the payment of amounts payable under or in respect of or in the
performance of obligations under the Note Documents to the extent
that such payment does not breach the provisions of Clause 19.5(p);
(xi) the transfer of the legal title to the property situated on the
west side of ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇)
by Raleigh Industries Limited (together, in respect of one part of
the said property, with Derby Holdings Limited to Sturmey-▇▇▇▇▇▇
Limited of Triumph Road, Nottingham, England and the transfer of
the legal title to the property at the corner of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ from British Cycle Limited to Sturmey-
▇▇▇▇▇▇ Limited;
(xii) the disposal of assets as contemplated by Exhibit 8.10A of the
Recapitalisation Agreement, provided that the aggregate book value
of such assets does not exceed South African rand 1,300,000; and
(xii) disposals of assets which were acquired after the date of this
Agreement in accordance with, and as permitted by, the terms of
this Agreement the future disposal of which was in the opinion of
the Facility Agent contemplated at the time of their acquisition.
All such sales, transfers, leases or other disposals shall (other than
intra-Group transfers to which the Facility Agent has previously consented
(such consent not to be unreasonably withheld), be made only for a cash
consideration payment of which may not be deferred for more than three
months from the date of such sale, transfer, lease or other disposal.
Provided that, without prejudice to the foregoing, no Group Member (other
than the Company or a Group Member that is an Immediate Subsidiary ) may
sell, transfer, lease, lend or otherwise dispose of or enter into any
agreement under which it may be or become obliged to sell, transfer,
lease, lend or otherwise dispose of any of its shares in any Group Member
or undertaking and assets, either in a single transaction
110
or a series of transactions to the Company or an Immediate Subsidiary
other than as specifically contemplated, at Clause 19.5(c) or, as the case
may be, Clause 19.5(o).
(c) LOANS OUT: The Company shall not and shall procure that no other Group
Member shall, grant or make available to another Person any Financial
Indebtedness, save for:
(i) any Financial Indebtedness where trade credit is extended by any
Group Member on normal commercial terms and in the ordinary course of
its business on substantially the same terms (or terms more
favourable to it) and in similar circumstances as for trade credit
extended prior to the Closing;
(ii) loans made by one Group Member to another Group Member where:
(A) the loan is specified in the Intra-Group Loan Memorandum;
(B) (subject to paragraph (E) below) the recipient of the loan, if
made by a Group Member is an Obligor that is not a Note Issuer;
(C) the recipient of the loan is a Group Member incorporated in
South Africa and the loan is applied by such Group Member in or
towards the purchase of all minority shareholdings in such Group
Member as at the date of this Agreement provided that the loan
does not exceed (when aggregated with any similar loans)
$2,000,000 LESS any amounts remitted to Group Members in South
Africa for such purpose pursuant to Clause 19.5(o)(vi) and such
loan is made within 30 days of the date of this Agreement;
(D) the recipient of the loan, if made by a Note Issuer, is an
Obligor;
(E) the recipient of the loan is the Company or, as the case may be,
Lyon Investments B.V. provided that:
(i) such loan is required to be made to the Company or, as the
case may be, Lyon Investments B.V. (having regard to the
available assets of the Company or, as the case may be,
Lyon Investments B.V. at such time) so as to enable the
Company or, as the case may be, Lyon Investments B.V. to
make payment of interest or liquidated damages as defined
in the Note Documents when due under the Note Documents
(provided that such payment would not be in breach of any
of the Senior Finance Documents and such loan is promptly,
and in any event within 7 days of it being made, so
applied); or
(ii) the loan is made to the Company to enable it to pay:
(AA) fees of an amount which is, in the context,
reasonable, payable to any of its non-executive
directors pursuant to
111
the terms of the contracts or other formal
arrangements entered into by the Company with such
non-executives;
(BB) management fees payable to ▇▇▇▇▇▇ by the Company at
any time after 31 December 1998 pursuant to the
Management Agreement (if any) not exceeding $400,000
in aggregate in any Financial Year provided that
payment of the same could not reasonably be expected
to (were such payment made) result in a breach of any
provision of this Agreement;
(CC) provided that the prior consent of the Banks (through
the Facility Agent) has been obtained all or any part
of the Additional Payment; and
to the Company by each other Group Member to enable the
Company to pay amounts due to the Internal Revenue Service
in the United States on account of tax due in respect of
such Group Member's operations or the Company's operations
and payable by the Company on behalf of such Group Member
or by the Company; or
(F) the recipient of the loan (made by an Obligor) is a Group
Member that is not an Obligor provided that the aggregate
amount of any such loans does not exceed in aggregate
$1,000,000 (or the equivalent in other currencies); and
(iii) (in addition to paragraphs (i) and (ii) Financial Indebtedness in an
aggregate principal amount (for the Group as a whole) not exceeding
$250,000 (or the equivalent in other currencies) at any time.
(d) ACQUISITIONS: The Company shall not, and shall procure that no other
Group Member shall acquire any asset otherwise than:
(i) in the ordinary course and for the purposes of its business;
(ii) Cash Equivalent Investments;
(iii) the acquisition of shares in a wholly-owned Subsidiary acquired or
established solely for the purpose of holding the assets of and/or
administering the pensions of employees of Group Members;
(iv) in accordance with the disposal provisions in Clause 19.5(b); or
(v) in addition to Clauses 19.5(d)(i) to (d)(iv) above, acquisitions
made pursuant to this paragraph (v) (each a "PERMITTED ACQUISITION")
the aggregate consideration (whether in cash or otherwise, and
whether actual or contingent) paid or payable by a Group Member in
respect thereof, or exposure thereto or in respect thereof (when
taken together with all other
112
Permitted Acquisitions and Investments made during the relevant
annual Accounting Period) does not and will not, in such annual
Accounting Period, exceed the Permitted Amount for such period and,
in any event (when taken together with all other Permitted
Acquisitions and Investments made after the date of this Agreement),
does not and will not exceed $30,000,000 (or the equivalent in other
currencies).
(e) SALES WITH RECOURSE: Without prejudice to Clause 19.5(b) and Clause
19.5(h) the Company shall not, and shall procure that no other Group
Member shall:
(i) sell or otherwise dispose of any of their respective assets on terms
whereby such asset or assets are or may be leased to, or re-acquired
or acquired by, any Group Member; or
(ii) sell or dispose of any of its receivables (including, without
limitation to the Financial Accounts, as defined at Clause 6) on
recourse terms or enter into any factoring (or similar) arrangement
without respect thereto,
unless the aggregate book value of the assets and receivables so sold or
disposed does not exceeds $500,000 per annum (or the equivalent in other
currencies).
(f) CHANGE OF BUSINESS: The Company shall not, and shall procure that no other
Group Member shall, make or threaten to make any change in its business as
presently conducted, which would result in a change in the general nature
of business carried on by the Group as a whole (other than where this is
due to acquisitions permitted under Clause 19.5(d) above or disposals made
consistent with the Business Plan), or carry on any other business which
is substantial in relation to the business of the Group as conducted at
the date of this Agreement.
(g) MERGERS: The Company shall not, and shall procure that no other Group
Member shall enter into any merger or consolidation or make any
acquisition of any other company, Person or business save as otherwise
specifically permitted pursuant to this Agreement.
(h) FINANCIAL INDEBTEDNESS: The Company shall not, and shall procure that no
other Group Member shall incur or permit to subsist any Financial
Indebtedness other than Permitted Financial Indebtedness and, without
prejudice to the foregoing the Company shall procure that no Person
including any Group Member, other than a Note Issuer shall guarantee or
offer any financial accommodation or financial assistance of any nature
whatsoever in respect of the Note Issuers' obligations under the Note
Documents or any of them or of any other Financial Indebtedness incurred
by them in any capacity and further, no Group Member shall incur any
Financial Indebtedness which has the economic effect of being Financial
Indebtedness but which is an "off balance sheet" arrangement.
(i) THIRD PARTY GUARANTEES: The Company shall not, and will procure that no
other Group Member shall, incur or permit to be outstanding, any Financial
Indebtedness falling within the provisions of paragraph (g) of the
definition of that term in Clause 1.2 other than any such Financial
Indebtedness:
113
(i) arising under the Senior Finance Documents;
(ii) arising out of the endorsement of negotiable instruments for the
purpose and in the ordinary course of carrying on the relevant
entity's trade; or
(iii) arising out of guarantees in favour of a Bank to facilitate the
operation of bank accounts of such Group Members (other than the
Note Issuers) maintained with such Bank on a net balance basis for
the purposes of cash management.
Provided that, notwithstanding the foregoing, no Obligor may incur or
permit to be outstanding any Financial Indebtedness falling within
paragraph (g) of the definition of that term in Clause 1.2 to the extent
that it relates to any Financial Indebtedness incurred by or on behalf of
a Note Issuer (in any capacity), or a Group Member that is not an Obligor.
(j) OPTIONS: Other than the exercise of an option entered into in accordance
with, and not prohibited by the Approved Hedging Programme or in respect
of the MS Group Option the Company shall not, and will procure that no
other Group Member shall, enter into or permit to subsist any arrangement
whereby any Person:
(i) has the right (whether or not exercisable only a contingency) to
require any Group Member to purchase or otherwise acquire any
property or any interest in any property; or
(ii) has the right (whether or not exercisable only a contingency) to
require any Group Member to sell or otherwise dispose of any
property or interest in any property.
(k) TREASURY TRANSACTIONS: The Company shall not, and will procure that no
other Group Member shall, enter into any interest rate, swap, cap,
ceiling, collar or floor or any currency swap, futures, foreign exchange
or commodity contract or option (whether over the counter or exchange
traded) or any similar treasury transaction, other than the Hedging
Protection Arrangements, spot foreign exchange contracts entered into in
the ordinary course of business and transactions entered into for the
hedging of actual or projected exposures arising in the ordinary course of
ordinary trading activities of the Group and in accordance with the
Approved Hedging Programme carried on, in each case, in compliance with
the terms of the Senior Finance Documents and which in any such case are
entered into with an Approved Bank.
(l) INVESTMENTS: Save to the extent permitted by Clause 19.5(d) the Company
shall not, and will procure that no other Group Member shall acquire (by
subscription or otherwise) any business or any shares or other securities
(or any interest therein) or otherwise establish other than the Acquired
Assets and Cash Equivalent Investments save as disclosed in the Structure
Memorandum.
114
(m) SUBSIDIARIES:
(i) Save to the extent permitted by Clause 19.5(d) the Company shall not
acquire any Subsidiaries which are not Subsidiaries immediately
following the Closing or acquire any businesses after the Closing or
enter into any agreement which it may be or become bound to acquire
any Subsidiary or business unless such Subsidiary is incorporated in
the United Kingdom and each of the other provisions of this Agreement
and the Finance Documents are complied with.
(ii) The Company shall not incorporate any Subsidiaries without the prior
consent of the Facility Agent (acting on the instructions of the
Majority Banks).
(n) JOINT VENTURES: The Company shall not, and will procure that no other
Group Member shall, without the consent of the Majority Banks, acquire any
shares, stock, securities or other interest in, or transfer any assets,
to, or lend to or guarantee the obligations of any Joint Venture, or
commit to any third party or enter into any Joint Venture or become party
to any joint venture agreement or arrangement where it has any obligation
(whether to such Joint Venture or to any other Person, and whether actual
or contingent) to lend to or guarantee or transfer assets to or otherwise
fund or incur any liability in respect of such Joint Venture or any other
Person (each such acquisition, transfer, loan, guarantee, commitment,
agreement and arrangement being an "INVESTMENT"), save that Group Members
may make, or agree to make any Investment, provided that as a result
thereof the aggregate consideration (whether in cash or otherwise, and
whether actual or contingent) paid or payable by a Group Member in respect
thereof, or exposure thereto or in respect thereof (when taken together
with all other Investments made during the relevant annual Accounting
Period and Permitted Acquisitions in such annual Accounting Period) does
not and will not, in such annual Accounting Period, exceed the Permitted
Amount for such period and, in any event (when taken together with all
other Investments made and Permitted Acquisitions after the date of this
Agreement), does not and will not exceed $30,000,000 (or the equivalent in
other currencies).
(o) DISTRIBUTIONS: the Company shall not, and shall procure that Lyon
Investments B.V. and each of the Company's and Lyon Investments B.V.'s
respective immediate Subsidiaries shall not, at any time declare or make
payment of any dividend or make any other distribution of capital or
income or profits or payment of any fees, management charges or other
amounts whatsoever to any of its members, make any other redemption or
purchase of its own shares or create or issue or reissue any loan or
debenture stock (any such payment being a "DISTRIBUTION") to the Company
or as the case may be Lyon Investments B.V. other than:
(i) to the extent required (having regard to the available assets of the
Company or as the case may be, Lyon Investments B.V. at such time) so
as to enable the Company or, as the case may be, Lyon Investments
B.V. to make payment of interest (including liquidated damages (as
defined in the Note Documents) when due under the Note Documents or,
in the case of the
115
Company only, this Agreement (provided that each such payment would
not be in breach of any of the Senior Finance Documents);
(ii) to enable the Company to pay fees of an amount which is, in the
context, reasonable, payable to any of its non-executive directors
pursuant to the terms of the contracts or other formal arrangements
entered into by the Company with such non-executive directors;
(iii) to enable the Company to pay management fees payable to ▇▇▇▇▇▇ by
the Company pursuant to the Management Agreement (if any) not
exceeding $400,000 in aggregate in any Financial Year after 31
December 1998 provided that payment of the same could not reasonably
(were such payment made) result in a breach of any provision of this
Agreement;
(iv) (with the prior written consent of the Banks) so as to enable the
Company to pay all or part of the Additional Payment;
(v) payments required to be made to the Company by each other Group
Member to enable the Company to pay amounts due to the Internal
Revenue Service in the United States on account of tax due in
respect of such Group Member's operations or the Company's
operations and payable by the Company on behalf of such Group Member
or by the Company; and
(vi) so as to enable the Company to remit monies to Group Members
incorporated in The Republic of South Africa in order to enable
those companies to purchase all of the minority shareholdings in
such Group Member as at the date of this Agreement for an amount not
exceeding $2,000,000 LESS any amounts loaned to Group Members
incorporated in South Africa for such purpose as contemplated by
Clause 19.5(c)(ii)(C) at Closing (or within 30 days thereof).
The Company shall procure that no Group Member may make any payment or
take any action on behalf of the Company or any other Group Member or
enter into any arrangement on behalf of the Company or any other Group
Member if the Company or any other Group Member, is restricted from making
such payment, taking such action or entering into such arrangement
pursuant to the provisions hereof.
(p) PAYMENTS - NOTE DOCUMENTS:
(i) None of the Note Issuers shall:
(A) repay, prepay, redeem or repurchase all or any (or any part) of
the Senior Notes (other than to the extent the same is required
in order to effect an exchange or refinancing of the Senior
Notes as permitted by Clause 19.4(aa)); or
(B) make any deposits pursuant to the "Defeasance" provisions
contained in the Note Documents.
116
(ii) Save to the extent prohibited under paragraph (i) above, the Note
Issuers shall be entitled to make payments they are obligated to
make under the Note Documents in the manner and at the time any such
payment is required to be made thereunder.
The Company shall procure that no Group Member may make any payment or
take any action on behalf of any of the Note Issuers or enter into any
arrangement on behalf of any of the Note Issuers if such Note Issuer
itself, is restricted from making such payment, taking such action or
entering into such arrangement pursuant to the provisions hereof.
(q) AMENDMENTS: The Company shall not, and shall procure that no other Group
Member shall, permit or effect any variations, novations or amendments or
waive any conditions to any of:
(i) the objects clause of the Memorandum of Association (or, if the
country of incorporation of the relevant Group Member is not England
and Wales, the applicable similar or analogous documents) of any
Obligor or Material Group Member (that is not an Obligor) (as at the
date of this Agreement);
(ii) the Articles of Association of any Group Member (or, if the country
of incorporation of the relevant Group Member is not England and
Wales, the applicable similar or analogous documents) (as at the
date of this Agreement);
(iii) the Recapitalisation Documents (as at the date of this Agreement);
(iv) the Finance Documents (as at the date of this Agreement),
unless such variation, novation, amendment or waiver (when taken together
with any other variation, novation, amendment or waiver) is of a purely
technical or administrative nature or has previously been agreed to in
writing by the Facility Agent in respect of the Senior Finance Documents,
in accordance with the provisions of this Agreement).
(r) ADMINISTRATION AND WINDING-UP ORDERS ETC.: The Company shall not, and
shall procure that no other Group Member shall, make or join in making any
application to any court for an administration, winding-up, receivership
or other similar order to be made in relation to any Group Member, other
than in respect of a solvent winding-up or dissolution of a Group Member
which is not an Obligor.
(s) ARM'S-LENGTH TERMS: The Company shall not, and shall procure that no
other Group Member shall, enter into any material transaction with any
Person otherwise than on arms-length terms and for full market value save
for inter-company loans permitted pursuant to this Clause 19.5.
(t) BANK ACCOUNTS: The Company shall not, and shall procure that no other
Group Member shall, open or maintain any account with any branch of any
bank or other
117
financial institution providing like services (other than an account
maintained pursuant to the requirements of the Senior Finance Documents)
unless:-
(i) such branch and bank or financial institution shall be an Approved
Bank save that to the extent not otherwise prohibited under this
Agreement, a Group Member that is not an Obligor or a Material Group
Member may be entitled to open or maintain an account with a bank or
branch or financial institution which is not an Approved Bank (an
"ALTERNATIVE BANK" ) provided that the Alternative Bank does not have
an Encumbrance (other than a Permitted Encumbrance) over such account
or any other assets of any Group Member in respect of such account
and any liabilities of the relevant Group Member relating thereto; or
(ii) such account was maintained by such Obligor or, as the case may be,
such Material Group Member prior to the date of this Agreement and
(within 30 days of the date of this Agreement) such Obligor or, as
the case may be, such Material Group Member has put in place
arrangements satisfactory to the Facility Agent whereby the amount
standing to the credit of such account is transferred (without any
specific instructions being given in respect thereof on a regular
basis) to an account held by an Approved Bank at the end of each
Business Day.
(u) CAPITAL EXPENDITURE: The Company may request the Facility Agent to approve
and the Facility Agent (acting on the instructions of the Majority Banks)
may approve in writing prior to the commencement of any annual Accounting
Period the figure for Capital Expenditure (the "REVISED CAPEX LEVEL")
shown in the budget for any annual Accounting Period delivered to the
Facility Agent pursuant to Clause 19.1. If the Facility Agent so approves
the Revised Capex Level for any annual Accounting Period then the Group
taken as a whole may make Capital Expenditure on assets in an amount up to
(but not in excess of) the amount of the Revised Capex Level for such
Annual Accounting Period, and the Company will procure that the Group
taken as a whole will not make Capital Expenditure on assets during such
annual Accounting Period in an amount in excess of the Revised Capex
Level. In respect of the period from the Closing to the date set out in
the first line of column (1) below and, in the absence of any such written
approval by the Facility Agent of a Revised Capex Level for any following
annual Accounting Period, the Company undertakes that in respect of each
of the annual Accounting Periods ending on the dates set out in column (1)
below, it will procure that the Group, taken as a whole, will not make
Capital Expenditure on assets in an amount for each such Accounting Period
or period in excess of the amount set out in column (2) below against the
relevant date (the Capital Expenditure in respect of any period listed
below, or, as the case may be, the Revised Capex Level relating thereto
being the "ORIGINAL CAPITAL EXPENDITURE LEVEL").
118
===================================================================
(1) (2) $ (or the equivalent thereof
in other currencies
-------------------------------------------------------------------
31 December 1998 9,000,000
31 December 1999 9,000,000
31 December 2000 8,500,000
31 December 2001 8,500,000
31 December 2002 8,500,000
31 December 2003 8,500,000
31 December 2004 8,500,000
31 December 2005 8,500,000
===================================================================
provided that:
(i) the amount of any such Original Capital Expenditure Level not
utilised in any annual Accounting Period may be carried forward for
twelve months only and added (otherwise than for the purposes of the
further application of this proviso) to the Original Capital
Expenditure Level for the next annual Accounting Period and, for the
purpose of this Clause 19.5(u), to the extent that any Capital
Expenditure limit is carried forward pursuant to the provisions
herewith, to the next annual Accounting Period, Capital Expenditure
made in such annual Accounting Period shall be deemed to relate first
to such Capital Expenditure limit so carried forward to such annual
Accounting Period;
(ii) in addition to the Original Capital Expenditure Level applicable to
any period set out in column (1) above, the Group may make additional
Capital Expenditure on assets during such period equal to 50% of the
amount by which Consolidated Adjusted EBITDA for the immediately
preceding period exceeded the amount of Consolidated Adjusted EBITDA
shown in the Model for such period LESS amounts paid by the Company
in respect of the management fee, under the Management Agreement (if
any) or otherwise in such immediately preceding period(in each case
the "EXCESS AMOUNT") having regard to the financial statements
delivered pursuant to Clause 19, Provided that the application of an
amount equal to such Excess Amount in making such additional Capital
Expenditure, ought not, on a balance of probabilities, having regard
to the relevant budget or budgets provided pursuant to Clause 19.1(b)
or any other financial information provided under Clause 19 or
otherwise give rise to the breach of any of the said financial
conditions, as the same is determined by the Facility Agent (acting
reasonably); and
119
(iii) the Original Capital Expenditure Level in respect of any period set
out in column (1) above ending on or prior to 31 December 1999,
shall be reduced by an amount equal to the amount by which Year 2000
Expenditure was expensed by the Group through its income statement
during such period.
(v) REAL PROPERTY: Save to the extent that the aggregate amount applied by the
Group for such purpose in any annual Accounting Period does not exceed
$250,000 (or the equivalent thereof in other currencies) the Company shall
not, and shall procure that no other Group Member shall develop or
redevelop all or any part of any real property owned by it or in which it
has a freehold or leasehold (or any other) interest, save for its own
occupation and use and in each case where the cost of so doing is within
the Capital Expenditure limits set out in Clause 19.5(u) above.
(w) SHARE CAPITAL: The Company will not:
(i) redeem, repurchase, retire, return or repay any of its share capital,
or resolve to do so; or
(ii) save as contemplated by the Recapitalisation Documents (as at the
date of this Agreement) issue any new share capital or grant any
option to any Person to subscribe for any shares in its capital other
than another Group Member (provided that if the Security Agent
already has security over the shares of the issuer of any such new
shares then the Company will procure that the Group Member to whom
such new shares are issued promptly provides security over such
shares to the Security Agent to the reasonable satisfaction of the
Security Agent),
Provided that, notwithstanding the foregoing, the Company may:
(a) issue (x) ordinary share capital of a type substantially similar to
any class of its shares in issue at the Closing, which is subscribed
for in full in Cash, in respect of which no dividend or distribution
may be declared, made or paid unless to do so would not result in a
breach of this Agreement and where such issue would not result in a
breach of Clause 21.1(y) or any other provision of this Agreement and
(y) classes of shares other than ordinary shares provided that at the
time of their issue and subsequently, their issue would not (or could
not, if any rights attached thereto were to be exercised) breach
Clause 21.1(y) hereof or any other provision of this Agreement;
(b) issue shares to employees pursuant to the employee share ownership
scheme in existence as at the date of this Agreement (details of
which have been provided to the Facility Agent pursuant to paragraph
15 of Schedule 6) and any other similar or replacement scheme to
which the Facility Agent has given its prior written approval; and
(c) as contemplated in connection with MS Group Option.
(x) PREPAYMENT OF OTHER FINANCIAL INDEBTEDNESS: The Company will not, and will
procure that no Group Member will prepay any Financial Indebtedness
earlier than its
120
original scheduled maturity which, in the case of the Senior Notes' is
approximately May 2008 (i) other than to the Banks under the Senior
Finance Documents in accordance with the provisions of this Agreement;
(ii) to an Obligor; or (iii) to another Group Member not exceeding
$100,000 in aggregate in any Financial Year.
(y) SURPLUS CASH: Neither the Company nor any of the Immediate Subsidiaries
will, at any time, hold any Cash or Cash Equivalent Investments greater
than required for its projected cashflow requirements for the next 30 days
(the amount of any such excess being the "CASH BALANCE") and the Company
shall, promptly upon being aware of such a situation procure that such
Cash Balance shall be lent by itself or, as the case may be, the relevant
Immediate Subsidiary to an account situated in England, Wales or Ireland,
provided that such account and any credit balance standing to the credit
thereof is subject to a Debenture or, as the case may be, an Irish
Debenture. save that, notwithstanding the foregoing, the Company may hold
Cash that has been remitted to it in accordance with Clause 19.5(p) and
apply the same in accordance therewith.
(z) ADDITIONAL PAYMENT: The Company shall pay or agree to pay all or any of
the Additional Payment (whether in cash or otherwise) nor any Person to
take any steps to enforce any rights they may have in respect of the
Additional Payment without, in each case, having obtained the Facility
Agent's prior approval (acting on the instructions of each of the Banks).
(ac) REDEMPTION: RIC shall not redeem or agree to redeem all or any of its
shares, including, without limitation any of the RIC Preferred Shares nor
permit the holder of any of the RIC Preferred Shares to redeem or attempt
to redeem all or any of the RIC Preferred Shares without, in each case,
having obtained the Facility Agent's prior approval (acting on the
instructions of each of the Banks).
121
PART 7
20. FINANCIAL UNDERTAKINGS
20.1
(a) The Company shall ensure that in calculating Consolidated Adjusted EBITDA
and Consolidated Net Interest Payable, for any Accounting Period (other
than in respect of in the case of Consolidated Net Interest Payable, to
the extent that the calculation relates to the periods ending on 27
September 1998, 31 December 1998 and 28 March 1999 respectively) an
adjustment shall be made so as to ensure that such calculations are made
on a fully annualised basis in accordance with the following formula:
A x 365
-
B
Where:
A = The amount (being Consolidated Adjusted EBITDA or, as the case may
be, Consolidated Net Interest Payable, in each case, having been
determined on a Rolling 4 Quarterly basis in accordance with Clause
20.2 (including, for the avoidance of doubt, any such amount
determined in accordance with Clause 20.2(a)(i)) to which the
calculation relates.
B = the number of actual days comprising the four consecutive quarterly
Accounting Periods to which the relevant determination relates.
20.2 The Company shall ensure that, the consolidated financial condition of the
Group shall be such that:
(a) the ratio of Consolidated Adjusted EBITDA to Consolidated Net Interest
Payable;
(i) in respect of each of the periods ending on the Accounting Dates 27
September 1998, 31 December 1998 and 28 March 1999 respectively,
where Consolidated Adjusted EBITDA is calculated on a Rolling 4
Quarterly basis and Consolidated Net Interest Payable is, for the
purposes of this sub-paragraph (i), calculated on a fully annualised
basis as per the formula:
A x 365
---
B
where:
A = the Consolidated Net Interest Payable for the period from 1 July
1998 to the Accounting Date at the end of the relevant quarterly
Accounting Period; and
122
B = the number of days elapsed from the Closing to (and including)
the last day of the relevant quarterly Accounting Period Date
relates;
and
(ii) in respect of each of the subsequent Accounting Dates, calculated on
a Rolling 4 Quarterly basis for any period ending on an Accounting
Date specified in the table below,
shall, in each case, not be less than the ratio set opposite such
Accounting Date in the table below:
================================================================================
ACCOUNTING DATE RATIO
--------------------------------------------------------------------------------
27 September 1998 1.70:1
--------------------------------------------------------------------------------
31 December 1998 1.70:1
--------------------------------------------------------------------------------
28 March 1999 1.75:1
--------------------------------------------------------------------------------
27 June 1999 1.75:1
--------------------------------------------------------------------------------
26 September 1999 1.80:1
--------------------------------------------------------------------------------
31 December 1999 1.80:1
--------------------------------------------------------------------------------
2 April 2000 1.85:1
--------------------------------------------------------------------------------
2 July 2000 1.90:1
--------------------------------------------------------------------------------
1 October 2000 1.90:1
--------------------------------------------------------------------------------
31 December 2000 2.00:1
--------------------------------------------------------------------------------
1 April 2001 2.00:1
--------------------------------------------------------------------------------
1 July 2001 2.05:1
--------------------------------------------------------------------------------
30 September 2001 2.05:1
--------------------------------------------------------------------------------
31 December 2001 2.10:1
--------------------------------------------------------------------------------
31 March 2002 2.15:1
--------------------------------------------------------------------------------
30 June 2002 2.20:1
--------------------------------------------------------------------------------
29 September 2002 2.25:1
--------------------------------------------------------------------------------
31 December 2002 2.25:1
--------------------------------------------------------------------------------
30 March 2003 2.35:1
--------------------------------------------------------------------------------
29 June 2003 2.35:1
--------------------------------------------------------------------------------
28 September 2003 2.40:1
--------------------------------------------------------------------------------
31 December 2003 2.40:1
--------------------------------------------------------------------------------
123
================================================================================
ACCOUNTING DATE RATIO
--------------------------------------------------------------------------------
28 March 2004 2.50:1
--------------------------------------------------------------------------------
27 June 2004 2.50:1
--------------------------------------------------------------------------------
26 September 2004 2.55:1
--------------------------------------------------------------------------------
31 December 2004 2.55:1
--------------------------------------------------------------------------------
3 April 2005 2.60:1
================================================================================
(b) the Consolidated Net Worth, during each of the periods specified in the
table below shall be more than the amount set opposite to such period in
the table below:
================================================================================
PERIOD CONSOLIDATED NET WORTH ($)
--------------------------------------------------------------------------------
Closing - 27 September 1998 100,000,000
--------------------------------------------------------------------------------
1 October 1998 - 31 December 1998 100,000,000
--------------------------------------------------------------------------------
1 January 1999 - 28 March 1999 105,000,000
--------------------------------------------------------------------------------
29 March 1999 - 27 June 1999 110,000,000
--------------------------------------------------------------------------------
28 June 1999 - 26 September 1999 110,000,000
--------------------------------------------------------------------------------
27 September 1999 - 31 December 1999 110,000,000
--------------------------------------------------------------------------------
1 January 2000 - 2 April 2000 110,000,000
--------------------------------------------------------------------------------
3 April 2000 - 2 July 2000 120,000,000
--------------------------------------------------------------------------------
3 July 2000 - 1 October 2000 120,000,000
--------------------------------------------------------------------------------
2 October 2000 - 31 December 2000 120,000,000
--------------------------------------------------------------------------------
1 January 2001 - 1 April 2001 120,000,000
--------------------------------------------------------------------------------
2 April 2001 - 1 July 2001 127,500,000
--------------------------------------------------------------------------------
2 July 2001 - 30 September 2001 127,500,000
--------------------------------------------------------------------------------
1 October 2001 - 31 December 2001 130,000,000
--------------------------------------------------------------------------------
1 January 2002 - 31 March 2002 130,000,000
--------------------------------------------------------------------------------
1 April 2002 - 30 June 2002 140,000,000
--------------------------------------------------------------------------------
1 July 2002 - 29 September 2002 140,000,000
--------------------------------------------------------------------------------
30 October 2002 - 31 December 2002 140,000,000
--------------------------------------------------------------------------------
124
================================================================================
PERIOD CONSOLIDATED NET WORTH ($)
--------------------------------------------------------------------------------
1 January 2003 - 30 March 2003 150,000,000
--------------------------------------------------------------------------------
31 March 2003 - 29 June 2003 150,000,000
--------------------------------------------------------------------------------
30 June 2003 - 28 September 2003 155,000,000
--------------------------------------------------------------------------------
29 September 2003 - 31 December 2003 155,000,000
--------------------------------------------------------------------------------
1 January 2004 - 28 March 2004 162,500,000
--------------------------------------------------------------------------------
29 March 2004 - 27 June 2004 162,500,000
--------------------------------------------------------------------------------
28 June 2004 - 26 September 2004 170,000,000
--------------------------------------------------------------------------------
27 September 2004 - 31 December 2004 170,000,000
--------------------------------------------------------------------------------
1 January 2005 - 3 April 2005 175,000,000
================================================================================
(c) the ratio of Net Average Financial Indebtedness (excluding, for the
avoidance of doubt, the Additional Payment) to Consolidated Adjusted
EBITDA, calculated on a Rolling 4 Quarterly basis for any period ending on
an Accounting Date specified in the table below shall be less than the
ratio set opposite such Accounting Date in the table below:
================================================================================
ACCOUNTING DATE RATIO
--------------------------------------------------------------------------------
27 September 1998 5.55:1
--------------------------------------------------------------------------------
31 December 1998 5.55:1
--------------------------------------------------------------------------------
28 March 1999 5.75:1
--------------------------------------------------------------------------------
27 June 1999 5.60:1
--------------------------------------------------------------------------------
26 September 1999 5.60:1
--------------------------------------------------------------------------------
31 December 1999 5.45:1
--------------------------------------------------------------------------------
7 April 2000 5.45:1
--------------------------------------------------------------------------------
2 July 2000 5.30:1
--------------------------------------------------------------------------------
1 October 2000 5.15:1
--------------------------------------------------------------------------------
31 December 2000 5.00:1
--------------------------------------------------------------------------------
1 April 2001 5.00:1
--------------------------------------------------------------------------------
1 July 2001 4.80:1
--------------------------------------------------------------------------------
30 September 2001 4.75:1
--------------------------------------------------------------------------------
125
================================================================================
ACCOUNTING DATE DATE
--------------------------------------------------------------------------------
31 December 2001 4.70:1
--------------------------------------------------------------------------------
31 March 2002 4.60:1
--------------------------------------------------------------------------------
30 June 2002 4.50:1
--------------------------------------------------------------------------------
29 September 2002 4.40:1
--------------------------------------------------------------------------------
31 December 2002 4.40:1
--------------------------------------------------------------------------------
30 March 2003 4.30:1
--------------------------------------------------------------------------------
29 June 2003 4.20:1
--------------------------------------------------------------------------------
28 September 2003 4.00:1
--------------------------------------------------------------------------------
31 December 2003 4.00:1
--------------------------------------------------------------------------------
28 March 2004 3.90:1
--------------------------------------------------------------------------------
27 June 2004 3.75:1
--------------------------------------------------------------------------------
26 September 2004 3.75:1
--------------------------------------------------------------------------------
31 December 2004 3.60:1
--------------------------------------------------------------------------------
3 April 2005 3.60:1
================================================================================
(d) the Consolidated Adjusted EBITDA calculated on a Rolling 4 Quarterly basis
for any period ending on an Accounting Date specified in the table below
shall not be less than the amount set opposite such Accounting Date in the
table below:
126
================================================================================
ACCOUNTING DATE AMOUNT ($)
--------------------------------------------------------------------------------
27 September 1998 35,000,000
--------------------------------------------------------------------------------
31 December 1998 35,000,000
--------------------------------------------------------------------------------
28 March 1998 36,000,000
--------------------------------------------------------------------------------
27 June 1999 37,000,000
--------------------------------------------------------------------------------
26 September 1999 37,000,000
--------------------------------------------------------------------------------
31 December 1999 38,000,000
--------------------------------------------------------------------------------
2 April 2000 38,000,000
--------------------------------------------------------------------------------
2 July 2000 39,000,000
--------------------------------------------------------------------------------
1 October 2000 40,000,000
--------------------------------------------------------------------------------
31 December 2000 41,000,000
--------------------------------------------------------------------------------
1 April 2000 41,000,000
--------------------------------------------------------------------------------
1 July 2001 42,000,000
--------------------------------------------------------------------------------
30 September 2001 42,000,000
--------------------------------------------------------------------------------
30 September 2001 42,500,000
--------------------------------------------------------------------------------
31 March 2001 43,000,000
--------------------------------------------------------------------------------
30 June 2002 44,000,000
--------------------------------------------------------------------------------
29 September 2002 44,000,000
--------------------------------------------------------------------------------
31 December 2002 44,000,000
--------------------------------------------------------------------------------
30 March 2003 44,000,000
--------------------------------------------------------------------------------
29 June 2003 44,000,000
--------------------------------------------------------------------------------
28 September 2003 45,000,000
--------------------------------------------------------------------------------
31 December 2003 45,000,000
--------------------------------------------------------------------------------
28 March 2004 46,000,000
--------------------------------------------------------------------------------
27 June 2004 46,000,000
--------------------------------------------------------------------------------
26 September 2004 47,000,000
--------------------------------------------------------------------------------
31 December 2004 47,000,000
--------------------------------------------------------------------------------
3 April 2005 48,000,000
================================================================================
(e) Debtor Days shall at all times be less than 80 days as the same is
determined, as at each Accounting Date, by reference to the relevant
127
financial statements delivered pursuant to Clauses 19.1(a)(i),
19.1(a)(ii) and 19.1(a)(iii):
Debtor Days = A x 365
-
B
A = The aggregate of the Dollar Equivalent of trade receivables
payable by non-Group Members to Group Members as at the end of
each of the twelve immediately preceding and consecutive monthly
Accounting Periods ending on the Accounting Date to which the
calculation relates, divided by 12; and
B = The Dollar Equivalent of sales in the preceding consecutive four
quarterly Accounting Periods ending on the Accounting Date to
which the calculation relates.
"Dollar Equivalent" means, in respect of any currency other than
Dollars, the amount of Dollars able to be purchased with such other
currency at the rate of exchange applied by the Company or, as the
case may be, the Auditors, in compiling the financial statements to
which the calculation relates.
(f) Inventory Days shall at all times be less than 100, as the same is
determined, as at each Accounting Date, by reference to the relevant
financial statements delivered pursuant to Clauses 19.1(a)(i),
19.1(a)(ii) and 19.1(a)(iii):
Inventory Days = A x 365
-
B
A = The aggregate of the Dollar Equivalent of the value of Inventory
held by Group Members as at the end of each of the twelve
immediately proceeding and consecutive monthly Accounting
Periods ending on the Accounting Date to which the calculation
relates, divided by 12; and
B = the Dollar Equivalent of the cost of sales for the preceding
consecutive four quarterly Accounting Periods ending on the
Accounting Date to which the calculation relates LESS
depreciation relating thereto.
"Dollar Equivalent" means, in respect of any currency other than
Dollars, the amount of Dollars able to be purchased with such other
currency at the rate of exchange applied by the Company or, as the
case may be, the Auditors, in compiling the financial statements to
which the calculation relates.
128
All calculations in this Clause 20.1 shall be made on a 365 day year
basis.
129
PART 8
21. EVENTS OF DEFAULT
21.1 THE EVENTS OF DEFAULT
Each of the events listed in this Clause 21, provided the same is continuing, is
an Event of Default, irrespective of whether it occurs as a result of any action
taken, or not taken, by any Person, including the Company or any other Group
Member.
(a) FAILURE TO PAY: The Company or any other Group Member fails to pay when
due any amount payable by it under any Finance Document in the currency in
which the same is expressed to be payable (other than where such failure to
pay results solely from an error in relation to the transmission of the
relevant payment and such payment is actually received within 3 Business
Days of its due date).
(b) BREACH OF UNDERTAKING: The Company or any Group Member fails to comply
with any of the provisions of Clauses 19 or 20.
(c) BREACH OF OTHER UNDERTAKINGS: Other than the provisions referred to in
paragraphs (a) and (b) above, any of the Obligors fails to comply with any
provision of this Agreement and/or any provision of any other Finance
Document (irrespective of whether or not such provision is valid and
enforceable against such Person) and, (other than the provisions referred
to in paragraphs (a) and (b) above) if such failure is in the reasonable
opinion of the Majority Banks capable of remedy within such period, such
Obligor shall have failed to remedy such failure within 21 days after the
earlier of the relevant Obligor becoming aware of such default and receipt
by the relevant Obligor of written notice from the Facility Agent to the
Company requiring the failure to be remedied.
(d) REPRESENTATIONS AND WARRANTIES: Any representation or warranty or
statement made, or deemed to be made, or repeated by or on behalf of the
Company or any Group Member in, or in connection with, any Finance Document
or any notice, certificate, statement delivered by it in connection with
any Finance Document is, or proves to have been, untrue or misleading in
any material way or material respect when made or deemed to be repeated or
supplied in accordance with or in respect of any Finance Document by
reference to the facts and circumstances then subsisting and, if the
circumstances causing such misrepresentation are, in the reasonable opinion
of the Majority Banks, capable of remedy within such period, such Group
Member shall have failed to remedy such circumstances within 14 days after
the earlier of the relevant Group Member becoming aware of such
misrepresentation and receipt by the Company of written notice from the
Facility Agent to such Group Member requiring the circumstances causing
such misrepresentation to be remedied such that if the relevant
representation was repeated by each such Group Member
130
at the end of such 14 day period, such representation would, at such time,
be true and correct in all material respects.
(e) CROSS-DEFAULT:
(i) Any Financial Indebtedness under any of the Senior Notes or any other
Note Document is not paid when due, or becomes (or becomes capable of
being declared) due and payable or due for redemption before its
originally scheduled maturity date or are placed on demand, in each
such case by reason of the occurrence of an event of default
(howsoever characterised) or any event having the same effect, or any
such Financial Indebtedness which is payable on demand shall have
been demanded; or
(ii) any Financial Indebtedness of one or more Group Members (taken
together if more than one) aggregating $1,000,000 (or the equivalent
in other currencies) or more at any one time outstanding is not paid
when due, becomes (or becomes capable of being declared) due and
payable or due for redemption before its originally scheduled
maturity date or are placed on demand, in each such case by reason of
the occurrence of an event of default (howsoever characterised) or
any event having the same effect, or any such Financial Indebtedness
which is payable on demand shall have been demanded; or
(iii) any Encumbrances over assets of any one or more Group Members (taken
together if more than one) securing an aggregate of $100,000 (or its
equivalent in other currencies) or more become enforceable and steps
are taken to enforce the same.
(f) REPUDIATION: The Company or any Group Member rescinds or repudiates (or
purports to rescind or repudiate) any Transaction Document (excluding the
Service Contracts) to which it is expressed to be a party.
(g) DISTRESS: Any distress, execution, attachment, registration or other
process affects any assets of the Group or any of the Group Members having
an aggregate value of $100,000 (or the equivalent thereof in other
currencies) save where (i) the relevant Group Member is, in good faith,
contesting the distress, execution, attachment, sequestration or other
process by appropriate proceedings diligently pursued and (ii) the Majority
Banks acting reasonably are satisfied that the ability of any Obligor to
comply with its obligations under the Finance Documents to which it is a
party will not be materially and adversely affected whilst such distress,
execution, attachment, diligence or other process is being so contested.
(h) INVALIDITY: Any of the Finance Documents shall cease to be in full force
and effect (except as a result of a specific release in writing by the
Banks) or shall cease to constitute the legal, valid and binding obligation
of any Obligor party to it or, in the case of any Security Document, fail
to provide effective perfected security in favour of the of the Security
Agent and the Banks over the
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assets over which the Encumbrance is intended to be given by that Security
Document, in any such case concerning the Company or an Obligor in a manner
and to an extent reasonably considered by the Majority Banks to be
materially adverse to their interests under the Senior Finance Documents or
in any such case concerning any Obligor in a manner and to an extent
reasonably considered by the Majority Banks to have a Material Adverse
Effect or it shall be unlawful for any Obligor to perform any of its
material obligations under any of the Finance Documents.
(i) UNABLE TO PAY DEBTS: The Company or any Group Member:
(i) suspends payment of its debt or is unable or admits its inability to
pay its debts as they fall due or is deemed unable to pay its debts
within the meanings contained in Section 123(1) of the Insolvency Act
1986 (construed as if the figure stated at Section 123(1)(a) was
$100,000 or is determined pursuant to Section 123(2) Insolvency Act
that it is unable to pay its debts (as that Section may be amended);
or
(ii) commences negotiations with its creditors generally with a view to
the general readjustment or rescheduling of all or part of its
indebtedness which it would otherwise not be able to pay as it falls
due; or
(iii) proposes or enters into any composition or other arrangement for the
benefit of its creditors generally or any class of creditors.
(j) INSOLVENCY: Any Group Member is declared or deemed pursuant to any
applicable legislation to be insolvent or is or is deemed pursuant to any
applicable legislation to be unable, or admits in writing its inability, to
pay its debts as they fall due or stops or threatens to stop payment of its
debts as they fall due or stops or threatens to stop payment of its debts
generally or becomes insolvent within the terms of any applicable law
Provided that, for the purposes of this paragraph (j) in determining
whether a Group Member is to be deemed to be insolvent or unable to pay its
debts as they fall due under Section 123 Insolvency Act (i) the figure
stated at Section 123(1)(a) shall be deemed to be $100,000 and (ii) Section
123(2) shall only apply if such a determination has been made in accordance
with the terms of that Section.
(k) LIQUIDATION: Any order is made or resolution passed or any steps are
initiated or are consented to by any Group Member or otherwise commenced by
any Person or any petition shall be presented (and not, where that Person
is unconnected with that Group Member save for being a creditor of such
Group Member, discharged or stayed within fourteen days in the case of both
legal proceedings and such petition) for the suspension of payments
generally or for any process giving protection against creditors or for the
dissolution, termination of existence, liquidation, winding up, bankruptcy
or other like process of any Group Member (other than a solvent
liquidation, dissolution or winding up of a Group Member (not being an
Obligor) that has been previously approved by the Facility Agent in
writing).
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(l) ADMINISTRATION: An application is made to the Court for an administration
order under the Insolvency ▇▇▇ ▇▇▇▇ with respect of the Company or any
other Group Member or an effective resolution is passed by the directors or
shareholders of the Company or any other Group Member for such an
application to be made or an administrator or administrative receiver is
appointed in respect of any Group Member.
(m) U.S. BANKRUPTCY: Any Group Member shall commence a voluntary case under
the U.S. Bankruptcy Code, or an involuntary case is commenced under the
U.S. Bankruptcy Code against that Group Member and the petition is not
controverted within 10 days and is not dismissed within 30 days, after
commencement of the case, or a custodian, receiver, trustee or similar
officer is appointed for, or takes charge of, all or substantially all of
the property of that Group Member.
(n) RECEIVER: A liquidator or provisional liquidator (save as excepted by the
proviso to paragraph (k) above) or, trustee, receiver, administrative
receiver, manager (being a Person acting on behalf of all or any creditors)
or similar officer is appointed in respect of any Group Member or in
respect of (or takes possession of) all or any part of its assets with an
aggregate value in excess of $100,000 or more (or the equivalent in other
currencies).
(o) ANALOGOUS ACTS: Any event occurs or proceeding is taken with respect to the
Company or any other Group Member in any jurisdiction to which it is
subject which has an effect equivalent or substantially similar to any of
the events mentioned in paragraphs (k) to (n) inclusive above.
(p) UNLAWFULNESS: It becomes unlawful at any time for any Group Member to
perform all or any of its obligations under any Finance Document to which
it is a party.
(q) QUALIFICATION OF FINANCIAL ACCOUNTS: The Auditors qualify their report on
the audited consolidated accounts of the Group (taken as a whole) in a
manner which is material in the context of the Finance Documents and the
transactions contemplated thereby.
(r) CESSATION: Any Group Member ceases to carry on all or any material part of
its business (save in consequence of any reorganisation, reconstruction or
amalgamation permitted under this Agreement and save as may result from any
disposal of assets permitted by the terms of this Agreement or any solvent
liquidation, dissolution or winding-up of any Group Member (not being an
Obligor)).
(s) OWNERSHIP OF OBLIGORS: Any Group Member shall cease to own, directly or
indirectly, at least the percentage ownership interest in any Group Member
owned by it immediately following the Closing or immediately following
implementation of the steps recorded in the Structure Memorandum contained
in the Reports or (if later) the date on which the relevant entity became a
Group Member unless such Group Member was a Dormant Subsidiary at the
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Closing and has remained a Dormant Subsidiary until such time as it is
wound-up on a solvent basis in accordance with paragraph (k) above.
(t) PROCEEDINGS: There is current or pending at the Closing or there shall
occur thereafter any litigation, arbitration, administrative, regulatory or
other proceedings or enquiry (including, without limitation, any such by
the Office of Fair Trading, the Monopolies and Mergers Commission, the
Department of Trade and Industry, or any equivalent body in any other
jurisdiction or the European Commission or any division of any thereof or
authority deriving power from any thereof) concerning or arising in
consequence of any of the Transaction Documents and/or the implementation
of any matter or transaction provided for in the Transaction Documents
(excluding, in each case, the Service Contracts) or otherwise.
(u) RECAPITALISATION WARRANTIES: Any warranty made by any Person in any of the
Recapitalisation Documents is incorrect in a material respect, any breach
by any Person of its obligations under any of the Recapitalisation
Documents occurs or any other claim is made by any Group Member against any
Person under any of the Recapitalisation Documents in each case, which (in
aggregate) results in or might reasonably be expected to result in breach
of Clause 20 .
(v) INTERCREDITOR AGREEMENT, AND OTHER DOCUMENTS:
(i) Any Group Member, fails to comply with any of the material provisions
of, or its obligations under, the Intercreditor Agreement; or
(ii) the Intercreditor Agreement is not, or ceases to be, binding on or
enforceable against any Group Member expressed to be a party thereto,
the Note Trustee or shall otherwise not be effective; or
(iii) any event, howsoever described, constituting default under the
Recapitalisation Documents shall occur thereunder and be continuing
unwaived,
and (in the case of paragraphs (i) and (ii) only), in the reasonable
opinion of the Majority Banks, the interest of the Banks under the Senior
Finance Documents or any of them shall be materially prejudiced thereby.
(w) ERISA: Any U.S. Obligor or any Subsidiary or any ERISA Affiliate has
incurred or is likely to incur a material liability to or on account of a
Multiemployer Plan or employee pension benefit plan (as defined in Section
3(2) of ERISA) under Section 409, 502(i), 502(1), 4062, 4063, 4064, 4201 or
4204 of ERISA or Section 4971 or 4975 of the Code, or any U.S. Obligor or
any Subsidiary has incurred or is likely to incur material liabilities
pursuant to one or more employee welfare benefit plans (as defined in
Section 3(1) of ERISA) which provide benefits to retired employees (other
than as required by Section 601 of ERISA).
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(x) EXPROPRIATION: The authority or ability of any Material Group Member or
Obligor to conduct its business is wholly or substantially curtailed by any
seizure, expropriation, intervention or other action by or on behalf of any
governmental, regulatory or other authority.
(y) CONTROL:
(i) Without the prior written consent of all the Banks, any single Person
or group of Persons acting in concert (as defined in the City Code on
Takeovers and Mergers) acquires control (as defined in Section 416 of
the Income and Corporation Taxes Act 1988) of the Company; or
(ii) ▇▇▇▇▇▇ and Perseus cease collectively to hold (in aggregate) the
beneficial interest in at least 51 per cent of the voting rights of
shares in the Company, or cease collectively to hold the largest
economic interest in the Company of all the shareholders in the
Company, or cease together to be able nominate the majority of the
Board of Directors of the Company; or
(iii) ▇▇▇▇▇▇ Capital Partners ceases to be the General Partner of ▇▇▇▇▇▇
and/or to manage ▇▇▇▇▇▇ or Perseus Management L.L.C. ceases to be the
managing member of Perseus; or
(iv) The Persons holding the majority of the voting share capital of the
Company at the date hereof cease to hold the majority of its voting
share capital and one or more other Persons (if more than one acting
in concert) own the majority of the voting share capital of the
Company, and for the purposes of this paragraph (iv) "acting in
concert" means acting together by agreement.
(z) AUDITOR'S CONFIRMATIONS: Any confirmation required to be delivered
pursuant to Clause 19.1(a)(v) is not delivered in accordance therewith or
it is delivered but does not confirm that the Borrower Base Summary
referred to therein is, in all material respects accurate or does not
confirm that the Company has in place satisfactory methods and procedures
for obtaining and collating the information required in order for it to be
able to compile accurate Borrowing Base Summaries for the purposes of this
Agreement having regard, where appropriate, to each of the specific
requirements of this Agreement relating thereto including, without
limitation, Clause 6.
(aa) ADJUSTED BORROWING BASE: If at any time, the aggregate Adjusted Borrowing
Base of the Borrowers exceeds the aggregate Deutschmark Amount of the
Ancillary Facilities, Advances and Outstanding Standby L/C's at such time
and such breach is not remedied within ten Business Days of the Borrowing
Base Summary which identified such breach being delivered hereunder.
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(ad) MATERIAL ADVERSE EFFECT: Any event or series of events whether related or
not occurs which has a Material Adverse Effect.
21.2 ACCELERATION
Upon the occurrence of an Event of Default and at any time thereafter while the
same is continuing unremedied or unwaived in accordance with this Agreement, the
Facility Agent may, and shall if so directed by the Majority Banks, by notice to
the Company:
(a) declare that an Event of Default has occurred; and/or
(b) declare that the Revolving Commitments and the Standby L/C Commitments
shall be cancelled forthwith, whereupon the same shall be so cancelled and
all fees payable in relation to the Revolving Commitments and the Standby
L/C Commitments shall become immediately due and payable; and/or
(c) declare that the Advances to some or all of the Borrowers (as specified in
such notice), together with all interest accrued on those Advances and all
other amounts payable by some or all of the Obligors (as specified in such
notice) or any of them under the Senior Finance Documents from time to
time, shall thenceforth be repayable on demand being made by the Facility
Agent (and in the event of any such demand those Advances, such interest
and such other amounts shall be immediately due and payable); and/or
(d) declare some or all of the Advances to some or all of the Borrowers (as
specified in such notice) immediately due and payable, whereupon they shall
become immediately due and payable together with all interest accrued on
those Advances and all other amounts payable by those Borrowers under the
Senior Finance Document; and/or
(e) require some or all of the Borrowers to pay in cash (whereupon each such
Borrower shall be obliged to pay) to the Facility Agent for the account of
each Bank for credit to the Standby L/C Account on its books relating to
each Standby L/C issued at the request of any such Borrower and which is
then outstanding an amount equal to the portion of that Standby L/C for
which that Bank is liable.
(f) Notwithstanding anything in this Clause 21.2 to the contrary, if an Event
of Default arising from filing by or against the Company or any proceeding
in respect of the Company under the United States Bankruptcy Code, all sums
owing under the Senior Finance Documents whether for principal, interest or
otherwise shall become immediately due without further demand, and the
Revolving Commitments, the Standby L/C Commitments and any other
obligations under the Senior Finance Documents to make credit available
shall immediately terminate, all without notice of any kind whatsoever.
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PART 9
22. ADDITIONAL BORROWERS
(a) If any Subsidiary of the Company wishes to become a Borrower under this
Agreement, it and the Obligors' Agent shall each so notify the Facility
Agent (which shall in turn notify the Banks and the Security Agent).
(b) If all the Banks confirm to the Facility Agent in writing that they are
prepared to accept that Subsidiary as a Borrower hereunder (subject to such
limitations as they may advise) and an Obligor under the Intercreditor
Agreement the Facility Agent shall so notify the Banks and shall prepare
and deliver to the Obligor's Agent a Borrower Accession Agreement
(appropriately completed and subject to such limitations as are imposed).
(c) Upon receipt by the Facility Agent of the Borrower Accession Agreement,
signed on behalf of the Obligors' Agent (for itself and the existing
Borrowers, Guarantors and the Obligors) and by the proposed Additional
Borrower, the Facility Agent shall execute the same (for itself and on
behalf of the Finance Parties) and shall as promptly as practicable give
notice of such execution to all of the parties to the Borrower Accession
Agreement.
(d) Upon execution of any Borrower Accession Agreement as aforesaid, it shall
take effect in accordance with, but subject to, the terms hereof and
thereof.
(e) The obligations of each Finance Party to each Additional Borrower under
this Agreement with respect to the making of the first Utilisation by it
under this Agreement are subject to the condition precedent that the
Facility Agent shall have received in respect of the Additional Borrower
and the Borrower Accession Agreement all of the documents listed in
Schedule 5 and such other reports, opinions and documents (if any) as the
Facility Agent may reasonably require, each in form and substance
satisfactory to the Facility Agent and that the Facility Agent has
confirmed to the Obligors' Agent that it is satisfied that such Additional
Borrower has effectively become party to the Intercreditor Agreement as an
Obligor.
23. GUARANTEES
23.1 GUARANTEE
In consideration of the Finance Parties entering into this Agreement and/or
becoming party to this Agreement pursuant to a Novation Certificate and/or (in
the case of the Banks) participating in any Utilisation, each Guarantor hereby
irrevocably and unconditionally and jointly and severally but only to the extent
permitted under applicable law (which, in the case of any Guarantor incorporated
in the Netherlands shall be determined by reference to the fair market value
determined, on a going concern basis, between a willing buyer and a willing
seller, of its net assets (determined in accordance with Applicable Accounting
Principles):
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(a) guarantees to each Finance Party, as principal obligor and not merely as
surety (or similar in any applicable jurisdiction), prompt performance by
each other Obligor (other than the Company and Lyon Cycle Investments B.V.)
of all its obligations under the Senior Finance Documents and the payment
of all sums payable now or in the future to each Finance Party by each
other Obligor (other than the Company and Lyon Cycle Investments B.V.)
under or in connection with the Senior Finance Documents when and as the
same shall become due;
(b) undertakes with each Finance Party that, if and whenever any other Obligor
(other than the Company and Lyon Cycle Investments B.V.) shall be in
default in the payment of any sum whatsoever due from it under or in
connection with any Senior Finance Document, such Guarantor will on demand
pay such sum as if such Guarantor instead of such other Obligor were
expressed to be the primary Obligor, together with interest on that sum at
the rate per annum from time to time payable by such other Obligor on that
sum from the date when that sum becomes payable by such Guarantor under
this Agreement until payment of that sum in full; and
(c) agrees to indemnify each Finance Party on demand against any loss or
liability suffered by it under any Senior Finance Document as a result of
any obligation guaranteed by any Guarantor (other than the Company and Lyon
Investments B.V.) being or becoming unenforceable, invalid or illegal.
Anything contained in this Agreement to the contrary notwithstanding:
(i) the obligations of each U.S. Obligor hereunder shall be limited to a
maximum aggregate amount equal to the greatest amount that would not
render such U.S. Obligor's obligations hereunder subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of Title 11 of the
United States Bankruptcy Code or any provisions of applicable state law
(collectively, the "FRAUDULENT TRANSFER LAWS"), in each case after giving
effect to all other liabilities of such U.S. Obligor, contingent or
otherwise, that are relevant under the Fraudulent Transfer Laws
(specifically excluding, however, any liabilities of such U.S. Obligor (a)
in respect of intercompany indebtedness to the extent that such
indebtedness would be discharged in an amount equal to the amount paid by
such U.S. Obligor hereunder and (b) under any guarantee of senior
unsecured indebtedness or indebtedness subordinated in right of payment to
the obligations hereunder which guarantee contains a limitation as to
maximum amount similar to that set forth in this paragraph, pursuant to
which the liability of such U.S. Obligor hereunder is included in the
liabilities taken into account in determining such maximum amount) and
after giving effect as assets to the value (as determined under the
applicable provisions of the Fraudulent Transfer Laws) of any rights to
similar rights of such U.S. Obligor pursuant to (A) applicable law or (B)
any agreement providing for an equitable allocation among such U.S.
Obligor and other Group Members of obligations arising under guarantees by
such parties;
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(ii) only the Company shall be liable for its obligations under this Agreement,
and in no event shall any other Obligor guarantee or act as a Guarantor
for any obligation of the Company under this Agreement; and
(iii) the Company shall pledge its assets, provided that it shall not pledge
more than or an amount equal to 66 2/3% of the voting stock in any
Subsidiary.
Notwithstanding anything contained in this Agreement to the contrary, the
obligations of Raleigh Industries of Canada hereunder in its capacity as a
Guarantor shall be limited to a maximum aggregate amount of C$13,000,000.
23.2 CONTINUING GUARANTEE
This guarantee is a continuing guarantee and shall extend to the ultimate
balance of all sums payable by the Obligors (other than the Company and Lyon
Cycle Investments B.V. or any of them under the Senior Finance Documents.
23.3 REINSTATEMENT
Where any discharge (whether in respect of the obligations of any Obligor, any
security for such obligations or otherwise) is made in whole or in part or any
arrangement is made on the faith of any payment, security or other disposition
which is avoided or must be repaid on insolvency, administration, liquidation or
otherwise without limitation, the liability of the Guarantors under this
guarantee shall continue as if there had been no such discharge or arrangement.
Each Finance Party shall be entitled to concede or compromise any claim that any
such payment, security or other disposition is liable to avoidance or repayment.
23.4 WAIVER OF DEFENCES
Except to the extent that any Guarantor is specifically released in writing and
except to the extent that its obligations are specifically waived in writing the
obligations of each Guarantor under this Agreement shall not be affected by any
circumstance, act, omission, matter or thing which but for this provision might
operate to release or otherwise exonerate such Guarantor from its obligations
hereunder in whole or in part, including without limitation and whether or not
known to any Obligor or any Finance Party:
(a) any time, indulgence or waiver granted to or composition with any other
Obligor or any other Person; or
(b) the taking, variation, compromise, exchange, renewal or release of or
refusal or neglect to perfect, take up or enforce any rights or remedies
against, or any security over any assets of, any other Obligor or any
other Person or any non-presentment or non-observance of any formality or
other requirements in respect of any instruments or any failure to obtain
the full value of any security; or
(c) any legal limitation, disability, incapacity, lack of power, authority or
legal personality of, or dissolution or change in the members or status
of, or other
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circumstances relating to any other Obligor or any other Person and
including, without limiting the generality of the foregoing, any limitation
on the amount guaranteed by any other Guarantor hereunder or provided for
in any Guarantor Accession Agreement or any Guarantee; or
(d) any variation (however fundamental and whether or not involving any
increase in the liability of any Obligor thereunder) or replacement of any
Senior Finance Document or any other document or security (including
without limitation any substitute basis agreed pursuant to Clause 10 and
any agreement contemplated by this Agreement) so that references to such
Senior Finance Document or other document or security in this guarantee
shall include each such variation or replacement; or
(e) any unenforceability, illegality, invalidity or frustration of any
obligations of any other Obligor or any other Person under any Senior
Finance Document or any other document or security, or any failure of any
other Obligor or proposed Additional Borrower or Additional Guarantor to
become bound by the terms of any other Senior Finance Document, in each
case whether through any want of power or authority or otherwise; or
(f) any postponement, discharge, reduction, non-provability or other similar
circumstance affecting any obligation of any Obligor under a Senior Finance
Document resulting from any insolvency, liquidation or dissolution
proceedings or from any law, regulation or order,
to the intent that such Guarantor's obligations under this Agreement shall
remain in full force and this guarantee be construed accordingly as if there
were no such circumstance, act, variation, limitation, omission, matter or
thing.
23.5 IMMEDIATE RECOURSE
Each Guarantor waives any right it may have of first requiring any Finance Party
to proceed against or enforce any other rights or security of or claim payment
from or file any proof or claim in any insolvency, administration, winding up,
bankruptcy or liquidation proceedings relating to, any other Obligor or any
other Person before claiming from such Guarantor under this Agreement.
23.6 PRESERVATION OF RIGHTS
Until all amounts which may be or become payable by any and all Obligors under
or in connection with the Senior Finance Documents have been irrevocably paid
and discharged in full (whether by any Borrower or by one or more Guarantors or
otherwise), after a claim has been made pursuant to this guarantee each Finance
Party may:
(a) refrain from applying or enforcing any other security, monies or rights
held or received by that Finance Party in respect of (or capable of being
applied in respect of) such amounts or apply and enforce the same in such
manner and order as that Finance Party sees fit (whether against such
amounts or
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otherwise) and the Guarantors shall not be entitled to the benefit of the
same; and
(b) hold in a suspense account (with liability to pay interest on the monies
held therein at the rate payable to its corporate customers for deposits in
the same currency on like terms and in like amounts) any monies received
from any Guarantee or on account of any Guarantor's liability under this
Agreement.
23.7 NON-COMPETITION
Until all amounts which may be or become payable by any and all Obligors under
or in connection with the Senior Finance Documents have been irrevocably paid in
full (whether by any Borrower or by one or more Guarantors or otherwise), no
Guarantor shall, after a claim has been made pursuant to this guarantee:
(a) be subrogated to any rights, security or monies held, received or
receivable by any Finance Party or be entitled to any right of contribution
or indemnity in respect of any payment made or monies received on account
of any Obligor's liability under any Senior Finance Document and, to the
extent that any Guarantor is so subrogated or entitled by law, that
Guarantor hereby (to the fullest extent permitted by law) waives and agrees
not to exercise those rights or security or that right of contribution or
indemnity;
(b) be entitled or claim to rank as a creditor in the insolvency,
administration, winding-up, bankruptcy or liquidation of any other Obligor
in competition with any Finance Party unless otherwise required by the
Facility Agent or by law (in which case the proceeds, if any, of any claim
in respect of any rights, security or monies of any Finance Party to which
such Guarantor was subrogated, filed by the Guarantor with a receiver or
other similar official, will be paid by such Guarantor to the Facility
Agent to be applied in accordance with the provisions of the Senior Finance
Documents); or
(c) be entitled to receive, claim or have the benefit of any payment,
distribution or security from or on account of any other Obligor or
exercise any right of set-off as against any other Obligor (and, without
prejudice to the foregoing, each Guarantor shall forthwith pay to the
Facility Agent for the Finance Parties an amount equal to any such set-off
in fact exercised by it and forthwith pay or transfer, as the case may be,
to the Facility Agent for the Finance Parties any such payment or
distribution or benefit of security in fact received by it).
23.8 ADDITIONAL SECURITY
This guarantee shall be in addition to and shall not in any way be prejudiced by
any other security (including, without limitation, the Security Documents) now
or hereafter held by any Finance Party as security for or capable of being
applied against the obligations of any Obligor.
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23.9 CERTIFICATE
A certificate of the Facility Agent as to any amount due from any Borrower under
this Agreement shall, in the absence of manifest error, be prima facie evidence
of such amount as against each Guarantor.
24. RELEASE OF GUARANTORS AND SECURITY
24.1 GUARANTORS
Subject to Clause 24.3, at the time of completion of any sale or other disposal
to a Person or Persons outside (and which will remain outside) the Group of all
of the shares in the capital of any Guarantor (or of all of the shares in any
other Group Member such that any Guarantor ceases as a result thereof to be a
Group Member) and in such other circumstances (if any) as all the Banks may from
time to time agree in writing, such Guarantor shall be released from all past,
present and future liabilities (both actual and contingent) hereunder and under
the Security Documents to which it is a party (other than liabilities which it
has in its capacity as a Borrower), and the security provided over its assets
under such Security Documents shall be released.
24.2 ASSETS
Subject to Clause 24.3, at the time of completion of any sale or other disposal
to a Person or Persons outside (and which will remain outside) the Group of any
assets owned by an Obligor over which security has been created by the Security
Documents to which that Obligor is expressed to be a party, those assets shall
be released from such Security.
24.3 CONDITIONS FOR RELEASE
The release of the guarantees and security referred to in Clause 24.1 and 24.2
above shall only occur if:
(a) either (i) such disposal will not result directly or indirectly in any
breach of any of the terms of this Agreement, or (ii) such disposal is
being effected at the request of the Majority Banks in circumstances where
any of the security created by the Security Documents has become
enforceable, or (iii) such disposal is being effected by enforcement of the
Security Documents;
(b) any assets to be transferred to another Group Member before completion of
such disposal shall have been so transferred and (if so required by the
Majority Banks) security over such assets shall have been granted to the
Security Agent to its satisfaction; and
(c) the Security Agent shall have executed such documents effecting such
release as shall be reasonably required to achieve such release as
aforesaid (and the Security Agent shall execute such documents at the
expense of the relevant Obligor promptly upon (and only upon) it being
satisfied that the conditions in (a), (b) and (c) above are satisfied).
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24.4 RELEASE OF GROUP MEMBERS
If any Person which is a Group Member shall cease to be such a member in
consequence of the enforcement of any of the Security Documents or in
consequence of a disposal of the shares therein effected at the request of the
Majority Banks in circumstances where any of the security created by the
Security Documents has become enforceable, any claim which any Obligor may have
against such Person or any of its Subsidiaries or which that Person or any of
its Subsidiaries may have against any Obligor in or arising out of this
Agreement or any of the Security Documents (including, without limitation, any
claim by way of subrogation to the rights of the Finance Parties against such
Person under the Senior Finance Documents and any claim by way of contribution
or indemnity) shall be released automatically and immediately upon such Person
ceasing to be a Group Member.
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PART 10
25. INDEMNITIES
25.1 INDEMNIFIABLE EVENTS
Each Obligor agrees to indemnify each Finance Party on demand against any loss
or expense, including legal fees, and any applicable VAT, which any of them may
sustain or incur as a result or a consequence of any of the events referred to
in this Clause 25.1 having occurred:
(a) ADVANCE NOT MADE: the funding of an Advance following delivery of a
Drawdown Request but not borrowed because of the application of one or more
of the provisions of this Agreement (but not, for the avoidance of doubt
because of any default by such Finance Party);
(b) BROKEN FUNDING: receiving or recovering all or any part of any Advance
other than on the last day of the Term relating thereto or at the end of
any period selected by the Facility Agent under Clause 9, including any
amount required to compensate that Finance Party in respect of any loss,
premium, penalty or other compensating payment sustained or incurred by it
in liquidating, employing or redeploying deposits acquired or arranged or
entered into in order to make, fund or maintain such Advance;
(c) OCCURRENCE OF AN EVENT OF DEFAULT: the occurrence of an Event of Default or
any other breach of an Obligor's obligations expressed to be assumed by it
under this Agreement or under the Security Documents; or
(d) CURRENCY INDEMNITY: if any amount paid or received in respect of this
Agreement or any of the Security Documents, whether as a result of any
order, judgment or otherwise, is not received or recovered by or on behalf
of that Finance Party in the currency in which the same is expressed to be
payable hereunder or thereunder.
25.2 STAMP DUTY
(a) The Company will pay all stamp, documentary, registration and other similar
duties or Taxes, including any penalties, additions, surcharges or interest
relating to such amounts, which are imposed or chargeable on or in
connection with this Agreement and the Security Documents or any judgment
given in connection herewith and therewith.
(b) The Facility Agent may, but shall not be obliged to, pay any amounts which
are referred to at 25.2(a). If the Facility Agent does so, the Company
shall, on demand, indemnify the Facility Agent against any such payment,
together with any costs and expenses, including legal fees, and any
applicable VAT, incurred by or on behalf of the Facility Agent in
connection with such payment.
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26. FEES
26.1 COMMITMENT FEE
(a) The Company will pay (or will procure that there is paid) to the Facility
Agent for distribution among the Banks pro rata to the aggregate of their
respective Revolving Commitments, a commitment fee computed at the rate of
one half of one per cent. (0.5%) per annum on the daily unutilised balance
of the Revolving Commitments (for the avoidance of doubt, taking into
account the undrawn balance of any Standby L/C outstanding during such
period) during the period from and including the date hereof until the
expiry of the Revolving Availability Period. Accrued commitment fees shall
be payable quarterly in arrears on the last day of each quarterly
Accounting Period of the Group (provided that the first such payment shall
be due on the last day of the first complete quarterly Accounting Period of
the Group after the Closing) and also on the date on which the Revolving
Commitments shall be terminated.
(b) Commitment fees are payable three monthly in arrears commencing on the date
falling three months from the date of this Agreement and ending on the date
on which the Total Commitments are cancelled and reduced to zero.
(c) If any Bank's Revolving Commitment is cancelled and reduced to zero, any
commitment fee which had accrued at such time in relation to that Bank and
which has not been paid, shall be payable by the Company on the date the
cancellation is effective.
26.2 UTILISATION FEE
The Company will pay (or will procure that there is paid) to the Facility Agent
for distribution among the Banks pro rata to the aggregate of their respective
Revolving Commitments in respect of each Utilisation Period (as defined below) a
utilisation fee calculated at the rate per annum determined pursuant to Clause
26.3 on an amount equal to the sum of the average daily Deutschmark Amount of
the Ancillary Facilities during such Utilisation Period and the average daily
utilisation of the Revolving Facility and the Standby L/C Facility during such
Utilisation Period (without double counting).
26.3 APPLICABLE RATE
The applicable rate of utilisation fee for any Utilisation Period shall be
determined by reference to the average daily Deutschmark Amount of the Ancillary
Facilities, Advances and Standby L/Cs during such Utilisation Period and in
accordance with the following scale:
(a) if the average daily Deutschmark Amount of the Ancillary Facilities,
Advances and Standby L/Cs expressed as a percentage of the average daily
Total Commitments during such Utilisation Period less than 50 per cent.,
zero per cent. per annum; and
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(b) if the average daily Deutschmark Amount of the Ancillary Facilities,
Advances and Standby L/Cs expressed as a percentage of the average daily
Total Commitments during such Utilisation Period is equal to or greater
than 50 per cent. 0.25 per cent. per annum.
26.4 CALCULATION
For the purposes of Clause 26.2:
(i) "UTILISATION PERIOD" means each successive period of three months during
the period from the date hereof and ending on the Final Repayment Date
(except that if the last such period would otherwise extend beyond the
Final Repayment Date, it shall be shortened so as to end on that date),
the first of which shall commence on the date hereof;
(ii) a year shall have 360 days; and
(iii) the average daily Total Commitments during a Utilisation Period shall
equal the aggregate of the Total Commitments (less any portion thereof
which in accordance with the provisions hereof may not be utilised at any
time after the day in question) on each day during such Utilisation Period
divided by the number of days in such Utilisation Period.
26.5 PAYMENT OF UTILISATION FEE
The Facility Agent shall promptly after the end of each Utilisation Period,
notify the Company and the Banks of the amounts payable by (or on behalf of) the
Company under Clause 26.2 in respect of such Utilisation Period and the Company
shall pay such amount to the Facility Agent for account of the Banks in
proportion to their respective participation in the Facility during the
applicable Utilisation Period within 5 Business Days of such notification.
26.6 AGENCY FEES
The Company shall pay to the Facility Agent, for its own account and the account
of the Security Agent agency fees in the amounts and at the times specified in
the letter relating to the Agents' fees.
26.7 ARRANGEMENT FEE
The Company shall pay to the Facility Agent, an arrangement fee in the amount
and at the time specified in the letter relating to the arrangement fee.
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27. COSTS AND EXPENSES
27.1 INITIAL COSTS
The Company shall pay to the Facility Agent an amount equal to all reasonable
costs and expenses, including reasonable legal fees and any applicable VAT
incurred by the Agents and/or the Arranger in connection with the negotiation,
preparation and execution of this Agreement and the Security Documents, subject
to agreed limits.
27.2 AMENDMENTS
The Company shall pay to the Facility Agent an amount equal to all reasonable
costs and expenses, including reasonable legal fees, and any VAT payable
thereon, incurred by the Agents and/or the Arranger in connection with the
negotiation, preparation and execution of any amendment, waiver, release or
consent (each such event being on "APPROVAL") which any of the Finance Parties
is requested to give in connection with the Senior Finance Documents and the
transactions contemplated by it and them to the extent that the Facility Agent
(acting reasonably) determines that such Approval (either taken in isolation, or
aggregated with any other Approval requested in the annual Accounting Period to
which such Approval relates), is in excess of the time and resource the Facility
Agent could reasonably have been expected to expend on such matters in the
ordinary course of events having regard to its annual agency fee and, for the
avoidance of doubt, the said annual agency fees does not contemplate any work
that the Facility Agent may be required to undertake in that capacity following
the occurrence of a Default or a restructuring or refinancing of the Facilities.
27.3 PROTECTION, ENFORCEMENT, ETC.
The Company shall pay, through the Facility Agent, an amount equal to all proper
costs and expenses, including, reasonable legal fees, and any applicable VAT
incurred by any Finance Party in connection with protecting, preserving or
enforcing (or attempting to do so) any of their rights under or arising out of
any of the Senior Finance Documents.
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PART 11
28. THE AGENTS AND THE ARRANGER
28.1 APPOINTMENT OF THE AGENTS
(a) Each Bank and the Arranger irrevocably appoints the Facility Agent and the
Security Agent to act as its agent in connection with this Agreement and
with respect to the Senior Finance Documents and the transactions
contemplated hereby and thereby.
(b) The Agents are authorised to take such action and to exercise and carry out
all the discretions, authorisations, rights, powers and duties as are
specifically delegated to it in this Agreement and the other Senior Finance
Documents, together with such discretions, rights and powers as such
Facility Agent reasonably considers to be incidental and each of the
Finance Parties irrevocably authorises the Facility Agent and the Security
Agent on such Finance Party's behalf to enter into any Accession Agreement
or Security Document (whereupon and by which act such Finance Party shall
become bound thereby).
(c) The Agents are not, nor will they be considered to be, acting as trustee or
in a fiduciary capacity under or in connection with this Agreement or any
of the other Senior Finance Documents other than the Security Agent in its
capacity as such, under and in respect of the Security Documents. The
duties of the Agents are restricted to those expressly stated in this
Agreement.
(d) Each Bank and the Agents agree (or shall be deemed to have agreed) that,
where Security Documents are to be granted, or have been granted, in favour
of the Security Agent, inter alia, for the benefit of the Banks, then the
Security Agent may enter into such Security Documents on behalf of the
Banks and shall hold the benefit of such Security Documents on trust for
the Banks and the Facility Agent to the extent of their respective
interests for the time being and that the terms and conditions of this
paragraph (d) shall apply to the Security Agent in its capacity as trustee
for the Banks and the Facility Agent under such Security Documents. The
Security Agent agrees with the Banks and the Facility Agent that it shall
hold on trust for each of them the assets secured by the Security
Documents. The perpetuity period applicable to the trusts created hereby
and pursuant hereto shall be eighty years.
(e) Unless expressly excluded in the Security Documents the Security Agent may
rely on, exercise and be protected by the discretions, protections, powers
and rights conferred on trustees, mortgagees or receivers under the Law of
Property ▇▇▇ ▇▇▇▇, the Trustee ▇▇▇ ▇▇▇▇, the Trustee Investments ▇▇▇ ▇▇▇▇
and the Insolvency ▇▇▇ ▇▇▇▇ and if there is any ambiguity or conflict
between the same and any of the Security Documents or where the terms of
the same are less extensive or more restricted than those of the Security
Documents, the terms
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of the Security Documents shall prevail to the extent permitted by the
applicable laws.
(f) The Security Agent in its capacity as trustee or otherwise shall not be
liable for any failure, omission, or defect in perfecting the security
constituted by any Security Document or any security created thereby
including, without limitation, any failure to (i) register the same in
accordance with the provisions of any of the documents of title of the
relevant Obligor to any of the property thereby charged, or (ii) effect or
procure registration of or otherwise protect the floating charge or any
other such security created or pursuant to the Security Documents under the
Land Registration Act 1925 or any other registration laws in any
jurisdiction.
(g) The Security Agent in its capacity as trustee or otherwise may accept
without enquiry such title as any Obligor may have to the property over
which security is intended to be created by any Security Document.
(h) Save where the Security Agent holds a legal mortgage over or over an
interest in, real property or shares, the Security Agent in its capacity as
trustee or otherwise shall not be under any obligation to hold any title
deeds. Security Documents or any other documents in connection with the
property charged by any Security Document or any other such security in its
own possession or to take any steps to protect or preserve the same. The
Security Agent may permit the relevant Obligor to retain all such title
deeds and other documents in its possession.
(i) Save as otherwise provided in the Security Documents, all moneys which
under the trusts herein or therein contained are received by the Security
Agent in its capacity as trustee or otherwise may be invested in the name
of or under the control of the Security Agent in any investment for the
time being authorised by English law for the investment by trustees of
trust money or in any other investments which may be selected by the
Security Agent with the consent of the Majority Banks. Additionally, the
same may be placed on deposit in the name of or under the control of the
Security Agent at such bank or institution (including any Agent) and upon
such terms as the Security Agent may think fit. Any and all such monies and
all interest thereon shall be paid over the Facility Agent forthwith upon
demand by the Facility Agent.
(j) Each Bank hereby confirms its approval of the Senior Finance Documents and
any security created or to be created pursuant thereto and hereby
authorises, empowers and directs the Security Agent (by itself or by such
Person(s) as it may nominate) to execute and enforce the same as trustee or
as otherwise provided (and whether or not expressly in the Banks' names) on
its behalf.
28.2 DUTIES OF THE AGENTS
(a) The Agents will promptly forward to the relevant Party the original or a
copy of any notice or document received by it in its capacity as Facility
Agent or, as relevant, Security Agent for such Party.
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(b) The Facility Agent and, where applicable, the Security Agent will promptly
notify the Banks if it receives notice from any Party of the occurrence of
a Default or any other breach of this Agreement or any of the other Senior
Finance Documents by an Obligor and that notice states the Default or
breach and makes reference to the specific Event of Default and/or the
Clause that has been breached.
(c) Except as otherwise stated in this Agreement and the Security Documents,
the Facility Agent and the Security Agent will act in accordance with any
instructions given to it by the Majority Banks, such instructions being
binding on all the Banks whether or not they form part of the Majority
Banks.
28.3 EXCULPATORY PROVISIONS
Except where this Agreement or the Security Documents specifically provides
otherwise, the Facility Agent or, as the case may be, the Security Agent is not
obliged:
(a) to review or check the accuracy or completeness of any document, notice or
other communication it receives or forwards to another Party;
(b) to monitor or enquire if a Default has occurred, or if the representations
made by any Obligor under or in connection with any of the Senior Finance
Documents and the Security Documents are true, correct or accurate, or
whether any Obligor has performed each of the obligations expressed to be
assumed by it under any of the Senior Finance Documents;
(c) to disclose to any Party any information (whether in a documentary form or
otherwise) if such disclosure would or might, in its opinion, constitute a
breach of law, regulation, its duty of confidentiality or otherwise be
actionable at the suit of any Person;
(d) to take any action or exercise any right, power or discretion under any of
the Senior Finance Documents, unless specifically instructed to do so by
the Majority Banks, the Banks or any other Finance Party which is entitled
to instruct it under any of the Senior Finance Documents and the manner in
which such right, power or discretion should be exercised; or
(e) to begin any legal action or proceeding under or in connection with any of
the Senior Finance Documents, unless it is satisfied that it has received
such security as it may require in respect of any costs, claims, liability
or loss, including legal fees, and any applicable VAT, which it will or may
incur in respect of, or in connection with, such actions or proceedings.
28.4 ASSUMPTIONS
The Agents may assume that:
(a) no Default has occurred and that no Obligor is not in breach of its
obligations any of the Senior Finance Documents; and
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(b) each representation made by the Obligors under or in connection with any of
the Senior Finance Documents is correct,
unless it has, in its capacity as an Agent received notice to the contrary from
any Party; and
(c) that the Facility Office of any Bank is that office which has been notified
to it by that Bank for such purpose by ten Business Days' notice, until
such Bank informs the Facility Agent that it has designated another office
as its Facility Office.
28.5 AGENTS AND ARRANGER NOT RESPONSIBLE TO OTHER PARTIES
None of the Agents nor the Arranger are responsible to any other Party for:
(a) the execution, validity or enforceability of any of the Finance Documents
or any documentation or communication delivered or made in connection
therewith;
(b) the accuracy and/or completeness of any information supplied by or on
behalf of an Obligor, including the Information Package;
(c) taking, or omitting to take, any action in connection any of the Senior
Finance Documents, unless such Party suffers loss directly as a result of
such Agent's or as the case may be, the Arranger's gross negligence or
wilful misconduct; or
(d) any breach by any other Party of this Agreement or any of the other Senior
Finance Documents.
28.6 DELEGATION AND ADVISERS
Each of the Agents may:
(a) engage, pay for and rely on the advice or services of any expert or
professional (whether a lawyer, accountant, surveyor or otherwise); and
(b) act through any of its, or its Affiliates', personnel and agents.
28.7 INDEMNITY
Upon demand by an Agent, each Bank shall, in its pro rata share, indemnify such
Agent, from and against any liabilities, costs, claims, losses and expenses,
including legal fees, and any applicable VAT which it may incur in any way
relating to or arising out of it acting in its capacity as an Agent, save to the
extent that such liability, cost, claim, loss or expense was incurred as a
result of such Agent's gross negligence or wilful misconduct.
28.8 RESIGNATION OF THE AGENTS
(a) Each Agent may resign its appointment under this Agreement by giving not
less than thirty days' prior written notice to that effect to each of the
other Parties
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stating whether or not it has appointed its Affiliate as its successor. No
Agent's resignation shall become effective until a successor has been
appointed pursuant to this Clause 28.8, and in respect of the resignation
of a retiring Security Agent, shall not become effective until the Facility
Agent is satisfied that all things required to be done in order that the
Security Documents or replacements therefor shall provide for effective and
perfected security in favour of the replacement Security Agent have been
done. The Obligors shall take such action as may be necessary in order that
the Security Documents or replacements therefor shall provide for effective
and perfected security in favour of any replacement Security Agent.
(b) Without prejudice to the provisions of Clause 28.8(a), the Majority Banks
may require the Agents to retire from their respective appointments under
this Agreement at any time without assigning any reason therefor by giving
not less than thirty days' prior written notice to that effect to the
Facility Agent, provided that no such retirement shall become effective
until a successor for the Agents is appointed pursuant to this Clause 28.8.
(c) If the successor to the Agents or is to be:
(i) one of its Affiliates, such Affiliate shall become the Agent under
this Agreement upon notice to that effect being given by the resigning
Agent and its successor to each of the other Parties; or
(ii) other than one of its Affiliates, its successor shall be appointed by
the Majority Banks following consultation with the Company. If the
Majority Banks have not appointed a successor within 30 days of the
Agents' notice given under (a) above, the Agents may appoint their
successor, such appointment becoming effective upon notice to that
effect being given by the resigning Agents and their successor to each
of the other Parties.
(d) After a successor to the Agents has been appointed, the retiring Agents
shall continue to be entitled to the benefits of this Clause 28 but solely
in respect of any actions taken or omitted to be taken by it while it was
acting as an Agent under this Agreement and its successor and each of the
Parties shall have the same rights and obligations amongst themselves as if
the successor had been a Party to this Agreement instead of the retiring
Agents.
(e) The retiring Agents will make available to its successor any documents,
records and advice which their successor reasonably requires in order to
enable it to perform its functions as an Agent.
28.9 SEPARATE ENTITY
Each of the Agents' agency divisions shall be treated as a separate entity from
any of its other departments or divisions. Therefore, unless an Agent receives
any information concerning an Obligor in connection with this Agreement or the
facilities contemplated
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by any of the Senior Finance Documents in its capacity as an Agent it shall be
entitled to treat that information as confidential.
28.10 RELIANCE
Each Agent may rely on any communication or document reasonably believed by it
to be genuine and correct and, without limiting the generality of the foregoing,
may rely on any statement made by a director or employee or any Person regarding
any matters which may reasonably be assumed to be within his knowledge or within
his power to verify. Each Agent may engage, pay for and rely on legal or other
professional advisers selected by it and shall be protected in so relying.
28.11 CREDIT APPROVAL
Each of the Banks severally represents and warrants to the Agents and the
Arranger that it has made its own independent investigation and assessment of
the financial condition and affairs of each Obligor and their related entities
and other parties considered by it to be relevant in connection with its
participation in this Agreement and has not relied exclusively on any
information, including the Information Package, the Reports and any information
distributed on behalf of any Obligor during syndication, provided to such Bank
by any Agent or any Arranger in connection therewith. Each Bank represents,
warrants and undertakes to each Agent and the Arranger that it shall continue to
make its own independent appraisal of the creditworthiness of the Obligors and
other parties considered by it to be relevant in connection with the Senior
Finance Documents and their related entities while any amount is or may be
outstanding under the Senior Finance Documents.
28.12 TAX CONFIRMATION
Each Bank confirms in favour of the Facility Agent (on the date of this
Agreement, or in the case of a Bank which becomes a party hereto pursuant to a
transfer or assignment, on the date on which the relevant transfer or assignment
becomes effective) that either:
(a) it is not resident for tax purposes in the United Kingdom and is
beneficially entitled to its share of the Advances and the interest
thereon; or
(b) it is a bank as defined for the purposes of Section 349 of the Income and
Corporation Taxes Act 1988 and is beneficially entitled to its share of
the Advances and the interest thereon,
and each Bank agrees in favour of the Facility Agent to notify the Facility
Agent if there is any change in its position from that set out above.
28.13 MISCELLANEOUS PROVISIONS
(a) Each of the Agents, and the Arranger shall, if they are also a Bank, have
the same rights and obligations under this Agreement as if they were not
an Agent, or an Arranger and exercise those rights and perform those
obligations accordingly.
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(b) Each of the Agents and the Arranger may contract any banking or other
business with any of the Obligors.
(c) None of the Banks will assert against any individual any claim which it may
have against any of the Agents or the Arranger.
(d) Each Agent may refrain from doing anything which would or might in its
reasonable opinion (a) be contrary to the law of any applicable
jurisdiction or any applicable official directive or (b) render it liable
to any Person, and may do anything which in its reasonable opinion (acting
on legal advice) is necessary to comply with any such law or directive.
29. TRANSFERS
29.1 OBLIGORS
Save as expressly provided in this Agreement, no Obligor may without the prior
written consent of the Banks, assign, transfer, novate or dispose of all or any
of its rights or obligations under this Agreement.
29.2 BANKS
(a) Subject to Clause 29.5, any Bank (the "EXISTING BANK") may, at any time,
assign transfer or novate all or any part of its rights, benefits and
obligations under this Agreement (including its Revolving Commitment and
its Standby L/C Commitment) in a minimum amount of DM 5,000,000 (or, if
less, equal to its Revolving Commitment and its Standby L/C Commitment) and
each of the other Senior Finance Documents to another financial institution
(the "NEW BANK") with the consent of the Company, such consent not to be
unreasonably withheld or delayed and to have been deemed to have been given
if not refused within 14 days of the relevant request by delivering, or
causing to be delivered, to the Facility Agent, in the case of a transfer
or a novation, a Novation Certificate duly completed and executed by the
Existing Bank and the New Bank and to be executed upon receipt by the
Facility Agent and upon details of such transfer or novation having been
reflected in the control account referred to at Clause 31.3.
(b) Unless otherwise expressly provided in any Security Document or otherwise
expressly agreed between the Existing Bank and the New Bank and notified by
the Existing Bank to the Trustee at the time at which the relevant transfer
or novation takes effect under Clause 29.3 there shall automatically be
transferred with any transfer or novated with any novation of the Existing
Bank's rights and/or obligations under this Agreement, the Existing Bank's
rights under or in respect of each of the other Senior Finance Documents
which relate to that portion of the Existing Bank's rights and/or
obligations under this Agreement and each of the other Senior Finance
Documents which are the subject matter of such transfer or novation.
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(c) A Bank shall only be entitled to transfer or novate all or part of its
rights, benefits and obligations under this Agreement to the extent that it
transfers its rights, benefits and obligations under the Revolving Facility
and the Standby L/C Facility in the same proportion that the Revolving
Commitments of each of the Banks bears to the Standby L/C Commitments of
each of the Banks at such time and, for the purposes of this paragraph (c),
any Ancillary Commitment of any Ancillary Bank shall be ignored and treated
as if such Bank's Revolving Commitment had not been reduced in accordance
with Clause 7.
29.3 TIME OF TRANSFER
Upon execution of an Intercreditor Agreement Accession Memorandum and a Novation
Certificate by the New Bank, the Existing Bank and the Facility Agent (or if
later, the date specified for this purpose in the Novation Certificate) and to
the extent that they are expressed to be subject to the transfer or novation
stated therein:
(a) the Existing Bank shall be released from its obligations to each other
Party (the "RELEASED OBLIGATIONS") and each other Party shall be released
from its obligations to the Existing Bank;
(b) the New Bank will assume obligations towards each other Party which differ
from the released obligations only in so far as they are owed to or assumed
by the New Bank and not the Existing Bank;
(c) the rights of the Existing Bank against the other Parties and vice versa
(the "CANCELLED RIGHTS") will be cancelled; and
(d) the New Bank and the other Parties will acquire rights against each other
which differ from the cancelled rights only insofar as they are exercisable
by or against the New Bank and not the Existing Bank.
Each Party (other than the Existing Bank and the New Bank) irrevocably
authorises the Facility Agent to execute each Novation Certificate on its
behalf.
29.4 ADMINISTRATION FEE
Not later than on the date a transfer becomes effective in accordance with
Clause 29.3, the New Bank will pay to the Facility Agent, for its own account,
an administration fee of $1,000.
29.5 ADDITIONAL AMOUNTS PAYABLE TO TRANSFEREE
No Bank may effect a transfer pursuant to this Clause 29 if, at the time of the
transfer, or immediately after, or if a payment of interest, principal or
otherwise was to be made by an Obligor under this Agreement at such time to or
for the account of the proposed transferee, such Obligor would be liable to pay
an additional amount, including an indemnity payment (the "ADDITIONAL AMOUNT")
under Clause 14 and/or Clause 15 which would not have been payable to the
proposed transferor, unless the proposed transferee
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has confirmed to the Facility Agent and the Obligors' Agent that it will
promptly reimburse the relevant Obligor an amount equal to the additional
amount.
29.6 DISCLOSURE OF INFORMATION
(a) Any Finance Party may provide to a Permitted Recipient, which has entered
into a Confidentiality Undertaking, a copy of this Agreement; each of the
Transaction Documents and such information concerning the Group or any
Group Member, including without limitation, the Recapitalisation as it
considers appropriate.
(b) A "PERMITTED RECIPIENT" means, in respect of any Finance Party:
(i) its Affiliates;
(ii) any Person with which that Finance Party is considering entering into
contractual relations in connection with this or any of the Senior
Finance Documents;
(iii) its advisers;
(iv) the courts, regulatory and other bodies in accordance with whose
orders or regulations it is required or is accustomed to comply; and
(v) any other Person who that Finance Party reasonably considers
appropriate to receive such information in order to protect or
preserve that Finance Party's position.
30. REDISTRIBUTION PROVISIONS
30.1 REDISTRIBUTIONS
(a) Subject to Clause 30.3, if all or any part of an Obligor's obligations
under this Agreement and each of the other Senior Finance Documents owed to
any Finance Party are discharged, whether by way of set-off, payment,
combination of accounts or otherwise, other than as a result of an Agent
receiving payment and distributing such payment in accordance with Clause
13, that Finance Party (the "RECOVERING PARTY") shall promptly pay to the
Facility Agent an amount equal to the amount so discharged (the "DISCHARGED
AMOUNT").
(b) The Facility Agent shall treat each Discharged Amount received by it from a
Recovering Party as if it had received the Discharged Amount from the
relevant Obligor and distribute it amongst the Finance Parties (including
the Recovering Party) in accordance with Clause 13.2 .
(c) Upon a Discharged Amount being distributed by the Facility Agent, the
relevant Recovering Party shall be subrogated to the rights of each of the
other Finance Parties which received such a distribution to the extent of
such
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distribution and relevant Obligor will owe the Recovering Party a debt
which is equal to the amount so distributed to each of the other Finance
Parties.
30.2 REPAYMENT OF A DISCHARGED AMOUNT
If a Recovering Party is required to return or repay an amount which it
determines relates to a Discharged Amount made by it under Clause 30.1, it shall
promptly inform the Facility Agent. Each of the Finance Parties (other than the
Recovering Party which received a payment as a result of the Discharged Amount
being distributed) shall pay to the Facility Agent (for the account of the
Recovering Party) all that it has received of the Discharged Amount. Upon such
payment being made, the rights of subrogation provided in Clause 30.1(c) above
shall be operated in reverse to the extent of the reimbursement.
30.3 EXCEPTIONS
(a) A Recovering Party is not obliged to pay any amount under Clause 30.1 if,
in its opinion (acting reasonably), after such payment it would not have a
valid claim against the relevant Obligor by way of subrogation or otherwise
in respect of such payment.
(b) A Finance Party shall not be obliged to make any payment under Clause 30.1
if the obligations owed to that Finance Party are discharged as a result of
it receiving payment from a New Bank in respect of a Novation Certificate.
(c) A Recovering Party which has commenced or joined in an action or proceeding
in any court to recover any amount due to it under this Agreement or any of
the other Senior Finance Documents and pursuant to a judgment obtained in
such court or a settlement or compromise of that action or proceeding shall
have received any amount, shall not be obliged to share all or any
proportion of that amount with any Finance Party which has the legal right
to, but does not, join in such action or proceeding or commence and
diligently prosecute a separate action or proceeding to enforce its rights
under this Agreement or, as the case may be, such other Senior Finance
Document in the same or another court.
(d) If a notice is served under Clause 21.2 each Bank and each Ancillary Bank
shall adjust by corresponding transfers (to the extent necessary) their
claims in respect of amounts outstanding to them under the Revolving
Facility, the Standby L/C Facility and Ancillary Facilities so that after
such transfers each such Bank shall have the same amount of outstandings
under the Revolving Facility and Ancillary Facilities and the same
liabilities under the Standby L/C Facility pro rata corresponding to the
proportion of each Bank's Revolving Commitment to the aggregate Revolving
Commitments, each as at the date the notice is served under Clause 21.2.
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PART 12
31. CALCULATIONS AND EVIDENCE OF DEBT
31.1 CALCULATIONS
Interest and commitment commission shall accrue from day to day and shall be
calculated on the basis of a year of 360 days (or, if market practice differs,
in accordance with market practice) and the actual number of days elapsed.
31.2 FINANCIAL ACCOUNTS
Each of the Banks shall, in accordance with its usual practices, maintain on its
books an account reflecting the amount which it has lent and the amount owing to
it under this Agreement and the each of the other Senior Finance Documents from
time to time.
31.3 CONTROL ACCOUNT
(a) The Facility Agent shall, in accordance with its usual practices, maintain
on its books a control account reflecting any amounts received or recovered
by it in connection with this Agreement and each of the other Senior
Finance Documents and any amounts which are payable by any Party in
connection with this Agreement and each of the other Senior Finance
Documents and the Parties' respective interests in such amounts.
(b) With respect to any Bank, the assignment, transfer or novation of all or a
part of such Bank's interests under the Senior Finance Documents shall not
be effective until such assignment, transfer or novation is reflected in
the control account maintained by the Facility Agent with respect to such
interests, and prior to such reflection in the control account, all amounts
owing to the transferor with respect to such interests shall remain owing
to such transferor. In addition to its capacity as agent for the Banks,
solely for purposes of this Clause 31.3, the Facility Agent's maintenance
of the control account shall also be as the Company's agent without
incurring any liability to the Company in such capacity whatsoever.
31.4 STANDBY L/C ACCOUNTS
(a) On the Issue Date of each Standby L/C each Bank participating in such
Standby L/C shall open its books at its Facility Office in accordance with
its usual practices an account (a "STANDBY L/C ACCOUNT") each in the name
of the Borrower on whose behalf the same was issued and entitled "RALEIGH
STANDBY L/C" (together with a reference to such Standby L/C) and
denominated in the currency of payment of sums payable under that Standby
L/C.
(b) The Borrowers shall make such payments to each Bank for credit to each
Standby L/C Account on the books of such Bank as are provided for in this
Agreement.
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(c) The amount from time to time standing to the credit of each Standby L/C
Account on the books of a Bank shall bear interest at its overnight rate
for call deposits in the relevant currency from time to time, such interest
to be compounded daily and to be credited to such Standby L/C Account
quarterly in arrear on the last Business Day of each calendar quarter and
on the date on which such Standby L/C Account is closed.
(d) Each Bank shall be entitled to pay out of the amount standing to the credit
of the Standby L/C Account relating to any Standby L/C any amount which it
is obliged to pay out under such Standby L/C. However, subject to the
provisions of paragraph (e) below, no withdrawals may be made by any
Borrower from a Standby L/C Account (subject to the Senior Finance
Documents) until such time as all actual and contingent liabilities of such
Borrower hereunder in respect of the Standby L/C to which that Standby L/C
Account relates have been satisfied in full.
(e) If the amount of the Standby L/C is reduced, the Bank that issued that
Standby L/C shall, if so requested by the Borrower on whose behalf that
Standby L/C was issued by not later than 12 noon on any Business Day after
such reduction, pay out of the amount standing to the credit of the Standby
L/C Account relating to such Standby L/C on such business day:
(i) a sum equal to the excess (if any) of the amount standing to the
credit of such Standby L/C Account over the amount of such Bank's
participation in the Standby L/C; and
(ii) a sum which bears to the amount (if any) standing to the credit of
such Standby L/C Account as a result of payments made to the Facility
Agent for credit thereof pursuant to Clause 16.2 the proportion borne
by the amount of the reduction in such Banks' participation in that
Standby L/C to the amount thereof immediately before that reduction.
31.5 ACTUAL AMOUNT RECEIVED
The amount owed by an Obligor to any Finance Party under this Agreement and each
of the other Senior Finance Documents shall be reduced by the amount actually
received or recovered by such Finance Party and not by reference to any rate of
exchange applied by any court or other body in calculating how much is payable
by such Obligor under any judgment or order given in connection with this
Agreement or any of the Senior Finance Documents.
31.6 PRIMA FACIE EVIDENCE
The accounts referred to in Clauses 31.2, 31.3 and 31.4 are prima facie evidence
of the amount and details recorded in those accounts.
159
31.7 CERTIFICATES AND DETERMINATIONS
Any certificate delivered or determination made by a Finance Party, whether in
relation to an amount payable to it under this Agreement or the any other Senior
Finance Documents or, in respect of an indemnity given by an Obligor or
otherwise shall, in the absence of manifest error, be conclusive evidence of the
matters to which such certificate or determination relates.
31.8 REFERENCE BANKS
(a) If any Reference Bank fails to provide the Facility Agent with a
quotation when required for the purposes of this Agreement, the rate for
which such quotation was required shall (provided that, if there are, at
the relevant time, four or more Banks, there are at least two) be
determined by reference to the quotations that are received by the
Facility Agent.
(b) Additional or replacement banks may, by agreement between the Obligors'
Agent and the Majority Banks, be appointed as a Reference Bank.
31.9 UNAVAILABILITY OF ECU/ECU
If the Facility Agent at any time prior to the commencement of the third stage
of EMU determines (after consultation with the Reference Banks and the Banks)
that:
(a) the ECU has ceased to be utilised as the basic accounting unit of the
European Community;
(b) for reasons affecting the market in ECU generally, ECU are not freely
traded between banks internationally; or
(c) it is illegal, impossible or impracticable for payments to be made
hereunder in ECU,
then the Facility Agent may, in its own discretion but after consultation with
the Company and the Banks, declare (such declaration to be binding on all
parties hereto) that any payment made or to be made thereafter which, but for
this provision, would have been payable in ECU shall be made in a component
currency of the ECU or dollars (as selected by the Facility Agent after
consultation with the Reference Banks and the Banks) (the "SELECTED CURRENCY").
The calculation of any amount to be paid in a Selected Currency shall be made by
the Facility Agent on the Valuation Day for value on the day that such payment
is due (or, if such day is not a Business Day in the relevant Selected Currency,
the next succeeding Business Day). The amount of the Selected Currency shall be
the equivalent on the Valuation Day of the components of the ECU when it was
most recently used in the European Monetary System, PROVIDED THAT, if the ECU is
being sued by public institutions of or within the European Communities on the
Valuation Day, the Facility Agent shall calculate the equivalent of such payment
in the Selected Currency by using the currency amounts that are components of
the ECU which are used by such public institutions on the Valuation Day.
160
32. AMENDMENTS AND WAIVERS
32.1 MAJORITY BANKS
Unless prohibited by Clause 32.2, Clause 32.3 or Clause 32.4 , any provision of
this Agreement or the other Senior Finance Documents may be amended, waived or
supplemented or any consent given by written agreement made between the Company
and the Majority Banks or, if the Facility Agent has received the Majority
Banks' prior approval, the Facility Agent on their behalf.
32.2 ALL BANKS
The provisions contained in this Agreement and which relate to the following
shall not be amended, supplemented or modified or any consent given without the
prior consent of all Banks:
(a) the definitions of "Availability Period", "Margin", "LIBOR",
"Encumbrance", "Event of Default", "Repayment Date", "Final Repayment
Date", "Financial Indebtedness", "Majority Banks", "Potential Event of
Default" and Reduction Date;
(b) Clauses 6 (other than Clause 6.15), 19.4(y), 19.5 (a), (f), (g), (h),
(i), (o), (p), (r), (t), (u), (v), (w), (x) or (y), 20 and 30 and the
definitions contained or referred to therein;
(c) any provision of this Agreement which expressly requires the consent of
each Bank; and
(d) the amount of either of the Facilities, a Bank's Revolving Commitment,
Standby L/C Commitment, the amount (including both principal and
interest) or currency or due date for payment of any amount payable under
any of the Senior Finance Documents or the Expiry Date of a Standby L/C.
32.3 SUPER MAJORITY BANKS
Without the prior consent of a Super Majority:
(a) the Security Agent shall not (other than in accordance with Clause 24)
release any asset which is subject to a fixed Encumbrance granted in
favour of the Security Agent (unless such consent is given so as to
facilitate a disposal permitted to be made, or not prohibited from being
made, under this Agreement); and
(b) the provisions contained in this Agreement and which relate to Clauses
19.5(b), (c), (d), (e), (j), (k), (l), m(i),(n),(q) or (s) shall not be
amended, supplemented or modified or any consent given in respect
thereof.
"SUPER MAJORITY BANKS" means a Bank or group of Banks whose aggregate
Revolving Commitments amount to more than eighty-five per cent of the
Total
161
Commitments or if each Banks' Commitment has been reduced to zero, would
have amounted in aggregate to eighty-five per cent of the Total
Commitments immediately prior to such reduction to zero and, for the
purposes of this definition, the provisions of Clause 7 and the Ancillary
Commitment of any Ancillary Bank shall be ignored and be treated as if
such Bank's Revolving Commitment had not been reduced in accordance with
Clause 7.
32.3 ALL PARTIES
Without the prior consent of all Parties, this Clause 32 may not be amended,
waived or supplemented.
32.4 THE AGENTS
Without the prior consent of the relevant Agent, none of such Agent's rights or
obligations under any of the Senior Finance Documents may be amended, waived or
supplemented.
33. NOTICES
33.1 METHOD OF DELIVERY
All notices or other communications made or given in connection with this
Agreement and each of the other Senior Finance Documents shall be made in
writing by facsimile, letter or tested telex (unless such notice or
communication relates to the making or advice of any payment, in which case it
shall be made by tested telex only).
33.2 ADDRESSES
Each communication or document to be made or delivered in connection with this
Agreement and each of the other Senior Finance Documents to a Party shall be
delivered or sent to the address or facsimile number that has been:
(a) notified to the Facility Agent by that Party before it became a Party; or
(b) notified to the Facility Agent by at least five Business Days' notice.
33.3 AGENTS' DETAILS
Unless the relevant Agent has given the other Parties five Business Days' notice
to that effect, its address and facsimile number are:
FACILITY AGENT:
(a) Address: ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(b) Fax: ▇▇▇▇ ▇▇▇ ▇▇▇▇
162
(c) Officer/Department: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Agency Loans Department
SECURITY AGENT:
(a) Address: ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(b) Fax: ▇▇▇▇ ▇▇▇ ▇▇▇▇
(c) Officer/Department: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Agency Loans Department
33.4 RECEIPT OF NOTICES
(a) Any notice or communication will be deemed to have been given, if sent by
post, when delivered and, if sent by facsimile, when received and, if
sent by telex, when an appropriate answer back is received by the sender.
However, if the notice or communication is for an Agent, it shall only be
effective when the same is received by the department or the officer
referred to at, Clause 33.3 or as otherwise notified by the relevant
Agent under that Clause.
(b) The Company shall forthwith on demand indemnify each Finance Party
against any direct loss or liability which that Finance Party incurs (and
that Finance Party shall not be liable to an Obligor in any respect) as a
consequence of:
(i) any Person to whom any notice or communication under or in
connection with this Agreement is sent by facsimile failing to
receive that notice or communication (unless such loss or liability
is directly caused by that Person's negligence or wilful default);
or
(ii) any facsimile communication which appears to that Finance Party
(acting reasonably) to have been sent by an Obligor having in fact
been sent by a Person other than an Obligor.
33.5 LANGUAGE
Each notice, communication and document given under or in connection with this
Agreement and each of the other Senior Finance Documents shall be in English or,
if not, accompanied by an accurate translation thereof which has been confirmed
by an Authorised Signatory of the Party giving the same as being a true and
accurate translation.
34. PARTIAL INVALIDITY
If any provision of this Agreement or any of the other Senior Finance Documents
is or becomes illegal, invalid or unenforceable in any respect under the law of
any jurisdiction, it shall not affect or impair the legality, validity or
enforceability of:
163
(a) any other provision of this Agreement or any of the other Senior Finance
Documents; or
(b) that provision, under the law of any other jurisdiction.
35. REMEDIES AND WAIVERS
(a) If any of the Finance Parties do not exercise, or delay in exercising,
any of their respective rights or remedies under or in connection with
this Agreement, it shall not operate as a waiver of any such right or
remedy.
(b) The single or partial exercise of any right or remedy shall not prevent
any further or other exercise of that right or remedy.
(c) The rights and remedies provided in this Agreement or each of the other
Senior Finance Documents are additional to any rights or remedies
provided by law.
36. COUNTERPARTS
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 constitute an original and all the counterparts shall together constitute
but one and the same instrument.
37. SECURITY
The obligations and liabilities of the Obligors to the Security Agent under the
Security Documents shall be secured by the interests and rights granted in
favour of the Security Agent under the Security Documents.
38. JURISDICTION
38.1 COURTS OF ENGLAND
For the benefit of each Finance Party, each of the Obligors agree that the
courts of England have jurisdiction to hear and settle any action, suit,
proceeding or dispute in connection with this Agreement or any of the other
Senior Finance Documents and therefore irrevocably submits to the jurisdiction
of those courts.
38.2 NON-EXCLUSIVITY
The submission to the jurisdiction of the English courts does not restrict the
right of a Finance Party to take proceedings against an Obligor in connection
with this Agreement or any of the other Senior Finance Documents in any other
court of competent jurisdiction, whether concurrently or not.
164
38.3 SERVICE OF PROCESS AGENT
(a) In addition to any other appropriate method of service, Non-UK Obligors
irrevocably agrees that any suit, action or proceeding may be served on
it by being delivered to Derby Holding Limited at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ or its registered office and confirms that
it has appointed the Company as its agent for such purpose.
(b) Each of the Non-UK Obligors confirms that failure by its process agent to
notify it of receipt of any process will not invalidate the proceedings
to which it relates.
(c) If the appointment of a process agent ceases to be effective, the
relevant Non-UK Obligor shall immediately appoint a further Person in
England as its process agent in respect of this Agreement and each of the
other Senior Finance Documents and notify the Facility Agent of such
appointment. If such a Person is not appointed within 15 days the
Facility Agent shall be entitled to appoint such a Person.
38.4 NON-CONVENIENCE OF FORUM
Each of the Non-UK Obligors confirms that the English courts are not an
inconvenient forum and irrevocably waives any right it may have to object to
them on the grounds of inconvenience or otherwise.
39. GOVERNING LAW
This Agreement is governed by and shall be construed in accordance with English
law.
This Agreement has been entered into by the Parties on the date stated at the
beginning of this Agreement.
165
SCHEDULE 1
THE BORROWERS
NAME JURISDICTION OF INCORPORATION
Raleigh Industries England and Wales
Limited
Sturmey-▇▇▇▇▇▇ Limited England and Wales
Derby Holding Germany
(Deutschland) GmbH
Koninklijke Gazelle BV Netherlands
The Derby Cycle The United States of America
Corporation
Raleigh Industries of Canada
Canada Limited
Raleigh Europe B.V. Netherlands
Raleigh B.V. Netherlands
▇. ▇▇▇▇▇▇ Bike Parts Germany
GmbH
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ GmbH Germany
Derby Holdings Limited England and Wales
Raleigh Fahrrader Germany
GmbH
Derby Cycle Werke Germany
GmbH
Raleigh International England and Wales
Limited
Curragh Finance Ireland
Company
Raleigh Ireland Limited Ireland
166
SCHEDULE 2
THE GUARANTORS
NAME JURISDICTION OF INCORPORATION
Derby Holding Limited England and Wales
Raleigh Industries England and Wales
Limited
Raleigh International England and Wales
Limited
Sturmey-▇▇▇▇▇▇ Limited England and Wales
Raleigh Industries of Canada
Canada Limited
The Derby Cycle The United States of America
Corporation
Raleigh BV Netherlands
Raleigh Europe BV Netherlands
Koninklijke Gazelle BV Netherlands
Derby Nederland BV Netherlands
Derby Holding BV Netherlands
Sturmey-▇▇▇▇▇▇ Europa Netherlands
B.V
Lyon Investments BV Netherlands
Derby Holding Germany
(Deutschland) GmbH
Raleigh Fahrrader GmbH Germany
NW Sportgerate GmbH Germany
Derby Cycle Werke Germany
GmbH
E Weiner Bike Parts Germany
GmbH
Univega Worldwide Licence Germany
GmbH
Univega Beteiligung Germany
GmbH
MS Sport Vertriebs Germany
GmbH
167
NAME JURISDICTION OF INCORPORATION
Derby Fahrrader GmbH Germany
Derby WS Germany
Vermogenswerwaltungs
GmbH
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ GmbH Germany
Curragh Finance Ireland
Company
Raleigh Ireland Limited Ireland
InterDerby Group Netherlands Antilles
Finance N.V.
The British Cycle England and Wales
Corporation Limited
BSA Cycles Limited England and Wales
Triumph Cycle Co. England and Wales
Limited
Raleigh (Services) Limited England and Wales
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SCHEDULE 3
THE BANKS
NAME REVOLVING COMMITMENT STANDBY L/C
(DM) COMMITMENT (DM)
The Chase Manhattan Bank 16,500,000 1,156,542
ABN Amro Bank N.V. 16,250,000 1,139,019
Bank of Scotland 16,250,000 1,139,019
BHF - Bank AG 16,250,000 1,139,019
Dresdner Bank AG, Grand Cayman 16,250,000 1,139,019
branch
Lloyds Bank Plc 16,250,000 1,139,019
Midland Bank Plc 16,250,000 1,139,019
Scotia Bank Europe Plc 16,250,000 1,139,019
The Sumitomo Bank, Limited 16,250,000 1,139,019
Banque Nationale de Paris 11,250,000 788,551
Istituto Bancario San Paolo di 11,250,000 788,551
Torino SPA
Kredietbank (Nederland) N.V. 11,250,000 788,551
Oldenburgische Landesbank AG 11,250,000 788,551
The Governor and Company of the 11,250,000 788,551
Bank of Ireland
The Industrial Bank of Japan, 11,250,000 788,551
Limited
DM214,000,000 DM15,000,000
NB: The Standby L/C Commitment of each Bank is a sub-set of the Revolving
Commitment of such Bank and NOT additional to its Revolving Commitment.
169
SCHEDULE 4
ACCESSION AGREEMENT
THIS ACCESSION AGREEMENT is dated the day of 199
and made BETWEEN [ ] (the "ADDITIONAL
[BORROWER/GUARANTOR]") (1), [ ] (the "COMPANY" and an "EXISTING
BORROWER" and an "EXISTING GUARANTOR") on behalf of itself and each of the other
Borrowers and Guarantors [ ] (each an "EXISTING
GUARANTOR" and together with the Company the "EXISTING GUARANTORS") (2), and
Chase Manhattan International Limited in its capacities as Facility Agent and
Security Agent under the Facility Agreement referred to in Recital (A) hereof
and on behalf of the Arranger and the Banks parties to and defined as such in
such Facility Agreement and on behalf of each of the parties to the
Intercreditor Agreement (3).
WHEREAS:
(A) By and upon and subject to the terms of a facility agreement (the
"FACILITY AGREEMENT"), which term includes any supplements and amendments
thereto which may at any time be made in relation thereto and also any
Novation Certificates and Accession Agreements) dated [ ], 1998 made
between, inter alios, the Company, the Borrowers and the Guarantors as
therein defined, Chase Manhattan plc as Arranger, Chase Manhattan
International Limited as Facility Agent and Security Agent and the
financial institutions named therein as banks, a multicurrency revolving
credit facility was made available to the Company and/or certain of the
Borrowers (as defined in the Facility Agreement).
(B) Each of the entities expressed to be party hereto, whether directly or
through signature hereof by the Facility Agent or the Company on its
behalf, is a party to the Facility Agreement either by having been an
original party thereto or pursuant to an Accession Agreement or a
Novation Certificate to which it is party or otherwise.
(C) The Additional [Borrower/Guarantor] wishes to become party to the
Facility Agreement as a [Borrower/Guarantor] pursuant to the procedure
established in Clause [22/19.4] of the Facility Agreement and a party to
the Intercreditor Agreement as an Obligor pursuant to the procedure
established in Clause 9[1] of the Intercreditor Agreement by the
execution of this Accession Agreement.
(D) It is the intention of the parties that this Accession Agreement shall
take effect as a deed.
170
NOW IT IS HEREBY AGREED as follows:
1. DEFINITIONS
Terms used herein (including the Recitals hereto) which are defined in or
to which a meaning or construction is assigned by or in the Facility
Agreement shall, unless otherwise defined herein, have the same meaning
and construction herein as therein.
2. AGREEMENTS, CONFIRMATIONS AND REPRESENTATIONS
(a) The Additional [Borrower/Guarantor] hereby:
(i) confirms that it has received a copy of the Facility Agreement and
the Intercreditor Agreement, together with such other documents
and information as it has required in connection herewith and
therewith;
(ii) agrees to become, with effect from the date of this Accession
Agreement, a [Borrower/Guarantor] under the Facility Agreement,
and an Obligor under the Intercreditor Agreement, agrees to be
bound in that capacity with effect from such date by the terms of
the Facility Agreement and the Intercreditor Agreement and
undertakes accordingly to perform its obligations as a
[Borrower/Guarantor] (or, as the case may be, Obligor) thereunder;
(iii) confirms the accuracy of the information set out under its name at
the end of this Accession Agreement;
(iv) represents and warrants as a [Borrower/Guarantor] to the Arranger,
the Banks and the Facility Agent in the terms of Clause 18 of the
Facility Agreement by reference to the facts and circumstances
existing at the date hereof;
(v) confirms it encloses herewith in respect of itself the documents
and evidence listed in Schedule 5;
(vi) confirms it has not relied on the Arranger, the Banks, the
Facility Agent or the Security Agent to assess or inform it as to
the legality, validity, effect or enforceability of the Facility
Agreement or the Intercreditor Agreement or any other document
referred to therein or the accuracy or completeness of any such
information as is referred to in paragraph (i) above or the
creditworthiness, affairs, condition or status of any of the
parties to the Facility Agreement, the Intercreditor Agreement or
any such other document.
(b) The Borrower(s), the Guarantor(s), the Arranger, the Facility Agent, the
Security Agent, the Banks and the parties to the Intercreditor Agreement
hereby agree amongst themselves and with the Additional
[Borrower/Guarantor] that the Additional [Borrower/Guarantor] shall
become
171
party to the Facility Agreement and the Intercreditor Agreement with
effect from the date of this Accession Agreement.
3. LAW
(a) This Accession Agreement shall be governed by and construed in accordance
with English law.
(b) [The Additional [Borrower/Guarantor] hereby irrevocably designates,
appoints and empowers the Company to receive, for and on behalf of
itself, service of process out of the English Courts in any proceedings
with respect to the Facility Agreement and/or the Intercreditor Agreement
and/or this Accession Agreement or any judgment in connection therewith
and agrees that failure by such process agent to give notice of such
service of process to the Additional [Borrower/Guarantor] shall not
impair or affect the validity of such service or of any judgment based
thereon.]
IN WITNESS WHEREOF the parties hereto have caused this Accession Agreement to be
duly executed on the date first written above.
SIGNATURES
ADDITIONAL [BORROWER/GUARANTOR]:
[ ]
COMPANY:
[ ]
for itself and as agent for and on
behalf of the Borrowers and
Guarantors
By:
FACILITY AGENT:
CHASE MANHATTAN INTERNATIONAL LIMITED
for itself and as Facility Agent and
Security Agent for and on behalf of the
Arranger and the Banks
By:
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SCHEDULE 5
DOCUMENTS TO ACCOMPANY ADDITIONAL
BORROWER/GUARANTOR ACCESSION AGREEMENT
1. The proposed Additional [Guarantor/Borrower] shall deliver each in a form
and substance satisfactory to the Facility Agent:
(a) A Certified Copy of its constitutive documents.
(b) A Certified Copy of its board resolution approving the execution, delivery
and performance by the proposed Additional [Borrower/Guarantor] of an
Accession Agreement in the form set out in Schedule 4 and each of the
Senior Finance Documents to which it is expressed to be a party and other
documents to be delivered pursuant thereto and the terms and conditions
thereof and authorising a Person or Persons (by name, or to the extent
that the same is permitted so as to bind the relevant Group Member by
applicable laws, by title) to sign the [Borrower's/Guarantor's] Accession
Agreement, the Senior Finance Documents and such other documents and to
give any notices on behalf of the proposed Additional [Borrower/Guarantor]
in connection with such Senior Finance Documents, or to give such notices,
to another Person or Persons;
(c) A list of its Authorised Signatories.
(d) A certificate of an Authorised Signatory of the proposed Additional
[Borrower/Guarantor] confirming that neither the execution and delivery of
the Additional [Borrower/Guarantor Accession Agreement and the Finance
Documents to which the proposed Additional [Borrower/Guarantor] is
expressed to be a party nor the exercise of the proposed Additional
[Borrower'/Guarantor's] rights, and the performance of the proposed
Additional [Borrower/Guarantor's] obligations, under such
[Borrower/Guarantor] Accession Agreement and other Senior Finance
Documents would result in any breach of the proposed Additional
[Borrower/Guarantor] constitutive documents.
(e) An opinion of the proposed Additional [Borrower/Guarantor's] local counsel
addressed to the Facility Agent and Security Agent for themselves and for
and on behalf of the Banks and acceptable to the Banks.
(f) A Security Document and an Intercreditor Agreement Accession Memorandum.
(g) If applicable, an Exchange Control Approval.
(h) Such other documents as the Facility Agent may on the advice of local
counsel to the Banks require.
[2. In relation to any proposed Additional [Borrower/Guarantor] incorporated
in the United Kingdom certified copies of the statutory declaration made
in the prescribed form (and in the agreed form) by all the directors of
such Companies as required by Section 155 of the Companies ▇▇▇ ▇▇▇▇
together with
173
a Certified Copy of the statutory report by its Auditors required under
Section 156(4) of the 1985 Act and confirmation by the Auditors in a form
acceptable to the Facility Agent that such company has net assets (as
defined in Section 152(2) of the Companies Act 1985) and that the net
assets are not reduced by the giving of the financial assistance or any
reduction in net assets does not exceed distributable profits.]
3. In relation to any proposed Additional [Borrower/Guarantor] not
incorporated in any part of the United Kingdom evidence that Derby Holding
Limited has agreed to act as the proposed Additional
[Borrower/Guarantor's] service of process agent.
174
SCHEDULE 6
CONDITIONS PRECEDENT
CONSTITUTIONAL DOCUMENTS
1. In respect of each Obligor:
(a) a Certified Copy of its Certificate of Incorporation and
Memorandum and Articles of Association or of its statutes, by-laws
or other constitutional or governing documents together with
certified copies of the minutes of the meetings of its
shareholders (if necessary) or written resolutions of its
directors or officers adopting such changes to the Memorandum and
Articles of Association or its statutes, by-laws or other
constitutional or governing documents as the Facility Agent shall
have required, and a certificate of a duly authorised officer of
each such company confirming that such resolutions were duly and
properly passed at duly convened and constituted meetings of that
Obligor;
(b) a Certified Copy of the resolutions of the board of directors of
the company certifying that such board resolutions have been duly
and properly passed at a duly convened and constituted meeting of
that company and confirming that such resolutions are still in
effect and have not been varied or rescinded;
(i) authorising the execution, delivery and performance on
behalf of that company of those of the Finance Documents to
which that company is a party; and
(ii) authorising a Person or Persons (by name, or to the extent
that the same is permitted so as to bind the relevant Group
Member by applicable laws, by title) (each an "AUTHORISED
SIGNATORY") specified therein to execute on behalf of that
company those of the Finance Documents to which that
company is expressed to be a party and to give any notices
or certificates required in connection therewith;
(c) (which is also a Guarantor incorporated in England and Wales) a
Certified Copy of a resolution of the members of that company
approving the execution delivery and performance of those Finance
Documents to which such company is a party and confirming that
such action is in the commercial interests of the company in
accordance with the terms thereof;
175
(d) a certificate of an Authorised Signatory of that company
confirming that at Closing the aggregate Financial Indebtedness of
that company (including any Financial Indebtedness which may be
incurred under any of the Finance Documents) does not or, as the
case may be, would not, if fully drawn, exceed any borrowing limit
contained in that company's constitutional documents or in any
trust deed or other agreement or instrument to which that company
is a party or which is binding on its assets; and
(e) a certificate of an Authorised Signatory of that company in the
agreed terms to the effect that the execution of the Finance
Documents by that company is lawful and complies with its
constitution.
2. A specimen of the signature of each Person (each being an Authorised
Signatory) authorised to execute any of the Finance Documents on behalf
of any Obligor and/or to sign all notices, certificates and other
documents or communications to be delivered by such Obligor thereunder.
3. If the initial Drawdown Date is not the same date as the date of receipt
by the Facility Agent of the Memorandum and Articles of Association of
the Obligors (or their equivalent constitutive documents), a certificate
from a duly authorised officer of the Obligors confirming that as at the
initial Drawdown Date the Memorandum and Articles of Association of the
Obligors (or their constitutive documents) as provided to the Facility
Agent continue in full force and effect without amendment.
CONSENTS
4. A Certified Copy of (or, to the extent that the Banks have agreed that
such documents may be delivered to the Facility Agent after the date of
this Agreement, of all applications for) such approvals, consents,
licences, exemptions and other requirements of governmental and other
authorities required, for the entering into or performance of the Finance
Documents and any other Transaction Document for.
TRANSACTION DOCUMENTS
5. Evidence that each of the Transaction Documents has been entered into by
all parties thereto, that each such agreement is in full force and
effect, that the conditions precedent to such agreements have been, or
will, simultaneously with the initial Utilisation be satisfied, that no
conditions or obligations contained therein have been waived or modified
except with the consent of the Facility Agent , that each of the
Transaction Documents is in a form satisfactory to the Facility Agent and
that no Group Member, at the Closing, has the right to rescind any such
agreements save for material breach by Derby International or, as the
case may be, DFS under any of the Recapitalisation Documents.
6. An original or a Certified Copy of each of the Transaction Documents.
176
SECURITY DOCUMENTS
7. At least three copies each of the Security Documents duly executed by all
the parties thereto other than the Facility Agent and/or the Security
Agent together with:
(i) share certificates in respect of any and all shares the subject
matter of the created by the Security Documents and (if
applicable) executed transfer forms in respect thereof and undated
letters of resignation from each of the relevant directors
together with irrevocable authority for the Facility Agent to date
the same or where shares are not evidenced by certificates that
notification of security over such shares has been entered in the
Share Register, and all title documents relating to any land or
buildings mortgaged or otherwise charged by the Security Documents
or confirmation that such documents are held to the order of the
Security Agent or are in course of being lodged with the
appropriate registration authority and will thereafter be
delivered to the order of the Security Agent;
(ii) copies of all notices required to be despatched pursuant to the
Security Documents duly completed by an Authorised Signatory.
INFORMATION
8. A Certified Copy of each of the Disclosure Exhibits.
9. A Certified Copy of the Information Package.
10. A Certified Copy of the Financial Accounts prepared by the management of
each of the Borrowers and the Guarantors in respect of the Group for the
monthly and, quarterly Accounting Periods since the latest annual audited
Financial Accounts of each Borrower and Guarantor in each case in the
form required by respectively Clause 19.1(a)iii) and Clause 19.1(a)(ii).
11. A Certified Copy of the audited consolidated Financial Accounts in
respect of the annual Accounting Period to 31st December 1997 in the form
required by Clause 19.1(a).
12. A Certified Copy of the Reports together with a Certified Copy of each
the Letters of Engagement relating thereto.
Each of such Reports which, if not addressed to the Facility Agent on
behalf of itself and the Banks, to be accompanied by written confirmation
from the company or firm which produced such Report that it can be relied
upon by the Arranger, Security Agent and Facility Agent on behalf of
itself and by the Facility Agent and Security Agent on behalf of the
Banks.
177
13. A Certified Copy of the final forms of each of the Recapitalisation
Documents.
14. A Certified Copy of the Transaction Costs Letter.
15. A Certified Copy of the, Company's employee share ownership scheme and
management incentive scheme.
16. Evidence that each Group Member will, contemporaneously with completion
of the Recapitalisation, be released from:
(a) all guarantees and indemnities and similar documents granted by
any of them in respect of the obligations of any third party other
than any other Group Member or third party providers of Financial
Indebtedness of each South African Borrower existing as at Closing
which Financial Indebtedness has been disclosed to the Facility
Agent in accordance with paragraph 18 below;
(b) all Encumbrances (other than Permitted Encumbrances) existing
immediately prior to the Closing including without limitation all
mortgages or charges appearing as undischarged in the mortgages
register of each Group Member at the Companies Registration
Office; and
(c) all the Existing Financial Indebtedness will be fully repaid upon
the making of the initial Advances under this Agreement.
17. A Certified Copy of details of all insurance policies in existence in
respect of the Group as at Closing and copies of all policies of Material
Insurance and evidence as that the Security Agent's interest has been
noted thereon in accordance with the requirements of Clause 19.1(b)
together with evidence that such policies are in full force and effect
with premiums paid to date in full.
18. A certificate of the Chief Financial Officer of the Company summarising
all Existing Financial Indebtedness and all Financial Indebtedness of
Group Members as at immediately prior to the Closing and immediately
following Closing.
19. Certified Copies of the Service Contracts of each of the Executives and
the Directors on terms satisfactory to the Facility Agent.
20. Confirmation from an Authorised Signatory of the Company that Clause
18.1(v) is complete, true and accurate.
21. Requests in relation to the Utilisations to be made at Closing.
22. Payment instructions in respect of all funds at Closing in accordance
with the Funds Flow Memorandum.
23. Evidence that:
178
(i) the Investors have subscribed or contemporaneously with the making
of the initial Advances will subscribe in full in cash an
aggregate amount of not less than $63,000,000 (the "INVESTORS'
EQUITY SUBSCRIPTION") for shares in the capital of the Company
issued to them pursuant to the Recapitalisation Agreement at
Closing;
(ii) the Note Issuers shall have received or contemporaneously with the
making of the initial Advances will receive in aggregate not less
than $160,000,000 pursuant to the Note Purchase Agreement in
respect of the issuance and sale of the Notes (the "NOTE
PROCEEDS") on terms satisfactory to the Facility Agent; and
(iii) the maximum aggregate amount payable to Derby International and
DFS in cash at Closing will not exceed US$147,000,000 (or the
equivalent in other currencies);
and that the Investors Equity Subscription and the Note Proceeds have
been or will contemporaneously with the making of the initial Advances
will be paid into and be standing to the credit of a Blocked Account;
24. The Facility Agent shall be satisfied, and shall have received such
evidence as it may reasonably require, that the aggregate monies payable
in respect of the Investors Equity Subscription the Note Proceeds and the
proceeds of each of the initial Utilisations that may be drawn down or
make on the date of Closing in accordance with the provisions of this
Agreement are at least equal to the amount required to refinance all of
the Existing Financial Indebtedness owed to third parties at Closing, and
(when considered together with any relevant Hedging Protection
Agreements) in the same currency(ies) thereof (together with accrued
interest and all other charges thereon) which are required to be repaid
and discharged in order that it may comply with Clause 18.1(w) and to pay
all of the Transaction Costs;
25. Receipt by the Facility Agent of each of the Pre-Closing Accounts.
26. Proforma Financial Accounts.
27. A Certified Copy of the Approved Hedging Programme.
28. Details of any Encumbrances existing over all or any of the Group's
assets (including, for the avoidance of doubt, any Encumbrances existing
over all or any of the Group's assets) as at Closing (other than pursuant
to the Security Documents).
29. A certified copy of the Structure Memorandum.
30. A Certified Copy of the Funds Flow Memorandum.
31. A Certified Copy of the Intra-Group Loan Memorandum.
179
32. Details of any bank accounts held by Obligors other than with any
Approved Bank together with evidence that, in respect of each such
account Clause 19.5(t)(ii) would be satisfied.
33. The bank mandates relating to the blocked accounts, duly completed.
34. A duly executed copy of each of the Fee Letters.
35. Evidence that at Closing the Company or its Subsidiaries will be the
beneficial and (subject only to the payment of the relevant stamp and
documentary Taxes in respect thereof by no later than the date on which
the same are required to be paid by applicable law or regulation and to
the making of the necessary entries in the shareholders' registers of the
relevant members of the Subsidiaries that comprise the Acquired Assets)
legal owner of all the Acquired Assets (save, in the case of legal
ownership, to the extent that the Security Agent shall be the legal owner
thereof pursuant to the Security Documents), free from all Encumbrances
other than Permitted Encumbrances and that the Obligors will be in
compliance with their obligations under Clause 19.5(a) in all other
respects immediately after Closing.
36. A Certified Copy of the Approved Provisioning Procedure.
OPINIONS
37. An opinion of Dibb ▇▇▇▇▇▇ ▇▇▇▇▇, addressed to the Facility Agent, the
Security Agent and the Banks, the English legal advisers to the Facility
Agent, the Security Facility Agent and the Banks as to such matters
relating to the Obligors and their obligations under the Senior Finance
Documents as the Facility Agent may reasonably require.
38. An opinion, addressed to the Facility Agent, the Security Agent and the
Banks of Bogel & Gates, United States of America legal advisors to the
Facility Agent and the Security Agent as to such matters relating to the
United States of America, the obligations of the Obligors under the
Senior Finance Documents to which they are a party as the Facility Agent
may reasonably require.
39. An opinion addressed to the Facility Agent, the Security Agent and the
Banks of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, United States of America legal advisors to the
Company as to such matters relating to due authorisation and execution of
Senior Finance Documents by Obligors incorporated in the United States of
America as the Facility Agent may reasonably require.
40. An opinion, addressed to the Facility Agent, the Security Agent and the
Banks of Boekel de Neree Dutch legal advisors to the Facility Agent, the
Security Agent and the Banks as to such matters relating to the
Netherlands, the Obligors and their obligations under the Senior Finance
Documents to which they are a party as the Facility Agent may reasonably
require.
180
41. An opinion, addressed to the Facility Agent, the Security Agent and the
Banks of ▇▇▇▇ & Berlis Canadian legal advisors to the Facility Agent, the
Security Agent and the Banks as to such matters relating to Canada, the
Obligors and their obligations under the Senior Finance Documents to
which they are a party as the Facility Agent may reasonably require.
42. An opinion, addressed to the Facility Agent, the Security Agent and the
Banks of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Canadian legal advisors to the Company as to
such matters relating to Canada, the Obligors and their obligations under
the Senior Finance Documents to which they are a party as the Facility
Agent may reasonably require.
43. An opinion, addressed to the Facility Agent, the Security Agent and the
Banks of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Canadian legal advisors to the Facility Agent,
the Security Agent and the Banks as to such matters relating to Canada,
the Obligors and their obligations under the Senior Finance Documents to
which they are a party as the Facility Agent may reasonably require.
44. An opinion, addressed to the Facility Agent, the Security Agent and the
Banks of ▇▇▇▇▇▇ Trente van Doorne Netherland Antilles legal advisors to
the Facility Agent, the Security Agent and the Banks as to such matters
relating to the Netherlands Antilles, the Obligors and their obligations
under the Senior Finance Documents to which they are a party as the
Facility Agent may reasonably require.
45. An opinion, addressed to the Facility Agent, the Security Agent and the
Banks of A & L Goodbody Irish legal advisors to the Facility Agent, the
Security Agent and the Banks as to such matters relating to Ireland, the
Obligors and their obligations under the Senior Finance Documents to
which they are a party as the Facility Agent may reasonably require.
46. An opinion, addressed to the Facility Agent, the Security Agent and the
Banks of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Master Hong Kong legal advisors to the Facility
Agent, the Security Agent and the Banks as to such matters relating to
Hong Kong, the Obligors and their obligations under the Senior Finance
Documents to which they are a party as the Facility Agent may reasonably
require.
47. An opinion, addressed to the Facility Agent, the Security Agent and the
Banks of Feddersen, Laule, Scherzberg & ▇▇▇▇ ▇▇▇▇▇▇ Gwerwahn German legal
advisors to the Company as to such matters relating to Germany, the
Obligors and their obligations under the Senior Finance Documents to
which they are a party as the Facility Agent may reasonably require.
48. An opinion, addressed to the Facility Agent, the Security Agent and the
Banks of Woedtke Reszel & Partner German legal advisors to the Facility
Agent, the Security Agent and the Banks, as to such matters relating to
Germany, the Obligors and their obligations under the Senior Finance
Documents to which they are a party as the Facility Agent may reasonably
require.
181
49. Memoranda of Satisfaction in respect of charges registered against each
of Sturmey-▇▇▇▇▇▇, Derby Holdings Limited, Raleigh International Limited
and The British Cycle Corporation Limited.
182
SCHEDULE 7
PART 1
FORM OF DRAWDOWN REQUEST
To: Chase Manhattan International Limited as Facility Agent.
From: [ ] as Obligors' Agent
Date: [ ]
Dear Sirs,
RE DM 214,000,000 MULTICURRENCY CREDIT FACILITY DATED [ ] (THE
"FACILITY AGREEMENT")
1. We request that the Banks, in accordance with the terms of the Facility
Agreement and upon the terms and conditions contained therein, make [an]
Advance(s) as follows:
(a) Requested Amount [DM[ ]; and
(b) Currency;
(c) Drawdown Date: [ ].
(d) Term: [ ].
(e) Borrower: [ ].
2. The Advance(s) should be credited to [insert account details].
3. We confirm that, at the date hereof, the representations set out in
Clause 18 that are to be repeated in accordance with Clause 18.2 are true
and correct and no Default has occurred and is continuing.
4. Terms used in this Drawdown Request and not otherwise defined shall bear
the same meaning as in the Facility Agreement.
5. This Advance is to be applied solely for the purpose of [ ].
183
5. This Drawdown Request is governed by and shall be construed in accordance
with and subject to English law.
Yours faithfully
OBLIGORS' AGENT
Authorised Signatory
184
PART 2
FORM OF STANDBY L/C REQUEST
To: Chase Manhattan International Limited as Facility Agent.
From: [ ] as Obligors' Agent
On behalf of [ ] ("ACCOUNT PARTY")
Date: [ ]
Dear Sirs,
RE DM214,000,000 MULTICURRENCY REVOLVING CREDIT AGREEMENT DATED [ ]
(the "FACILITY AGREEMENT")
1. We request that the Banks, in accordance with the terms of the Facility
Agreement and upon the terms and conditions contained therein,
participate in a Standby L/C in the form annexed hereto as follows:
(a) Amount of Standby L/C [eg DM ];
(b) Currency of Standby L/C;
(c) Issue Date: [ ];
(d) Expiry Date of Standby L/C: [ ];
(e) Account Party: [ ];
(f) Beneficiary: [ ];
(g) Beneficiary's Account details: [ ].
2. We confirm that, as at the date of this Standby L/C Request, no Default
has occurred and is continuing, and the representations contained in
Clause 18 of the Agreement that are repeated in accordance with Clause
18.2 are true and correct.
3. Terms used in this Standby L/C Request and not otherwise defined shall
bear the same meaning as in the Agreement.
185
4. This Standby L/C Request is governed by and shall be construed in
accordance with and subject to English law.
Yours faithfully
OBLIGORS' AGENT
Authorised Signatory
186
PART 3
FORM OF STANDBY L/C
TO: [ ]
For the attention of:
[Date]
Dear Sirs
IRREVOCABLE NON-TRANSFERABLE LETTER OF CREDIT NO. [ ]
The Banks (as defined below) in their several Participation Percentages (as
defined below) hereby issue this Irrevocable Non-Transferable Letter of Credit
No. [ ] )the "CREDIT"), details of which are as follows:-
Account Party: [Borrower under Facility Agreement]
Facility Agent: [Chase Manhattan International Limited] as Facility
Agent for the Banks or any other person notified from
time to time by the Facility Agent to the Beneficiary
as being the Facility Agent for the purposes of the
Credit.
Facility Agent's Office: [ ] or such other office from time to time
notified by the Facility Agent to the Beneficiary.
Availability: By payment against delivery of Required Documents:
Bank: NAME PARTICIPATION PERCENTAGE
[ ] [ %]
[ ] [ %]
[ ] [ %]
Beneficiary: [Approved Bank details]
187
Charges: Any banking or other charges and commissions (other
than our own) are for the Beneficiary's account.
Maximum Amount: [ ]
Payment Currency: [ ]
Expiry Date: [ ]
Partial Payment: Partial payments are permitted, provided that the
Payment Amounts shall not in the aggregate exceed the
Maximum Amount.
Participation Percentage: In relation to a Bank, the percentage set out opposite
its name above, as varied by any novation referred to
below.
Payment Amount: An amount in the Payment Currency certified in a
Certificate of Beneficiary to be a Payment Amount.
Required Document: A Certificate of Beneficiary in the form set out in
Appendix A hereto (duly completed in a manner
consistent with the requirements of this credit and
signed on behalf of the Beneficiary).
Each Bank engages with the Beneficiary that within five working days in London
and the principal financial centre of the Payment Currency (each a "BUSINESS
DAY") after receipt by the Facility Agent at the Agent's Office of the related
Required Document conforming to the terms of this Credit, such Bank will pay to
or to the order of the Beneficiary, in the Payment Currency in funds providing
same day value, by credit to the account specified in the related Certificate of
Beneficiary, its Participation Percentage of the lesser of:
(i) each Payment Amount, as stated in the Required Documents; and
(ii) the balance of the Maximum Amount after deducting the amount of any and all
previous payments by the Banks under this Credit.
This Credit shall be non-transferable and shall be payable only against
presentation of the Required Document. This Credit shall expire on, and no
payment shall be made pursuant hereto after, the Expiry Date.
The obligations of the Banks under this Credit are several according to their
respective participation Percentages and not joint and several and neither the
Facility Agent nor any Bank shall be liable for the failure of any other Bank to
perform its obligations hereunder. The aggregate amount payable by each Bank
hereunder shall not exceed its Participation Percentage of the Maximum Amount.
The Facility Agent shall have no liability hereunder except in its capacity as a
Bank.
188
A Bank (the "EXISTING BANK") may with the prior written consent of the
Beneficiary, such consent not to be unreasonably withheld or delayed, novate all
or part of its rights and/or obligations under this Credit to another bank or
financial institution (the "NEW BANK"). Such consent of the Beneficiary shall
not be withheld where an Existing Bank wishes to novate all or part of its
obligations to a New Bank which is at the time of such novation rated BBB or
above by Standard & Poor's Corporation or Baa2 by ▇▇▇▇▇'▇ Investor Services Inc.
A novation of rights and/or obligations will only be effected if the Existing
Bank and the New Bank deliver to the Facility Agent a duly completed
certificate, substantially in the form of Annex B hereto (an "LC TRANSFER
CERTIFICATE") duly executed by each of them and the Beneficiary (which shall be
obliged to execute the same where not entitled to withhold consent to the
transaction) and then countersigned by the Facility Agent on behalf of the other
Banks.
Upon the novation becoming effective in the manner referred to in the previous
paragraph, the Existing Bank shall be relieved of its obligations under this
Credit to the extent that they are novated to the new Bank and any reference in
this Credit to a Bank shall include the New Bank. Each Bank (other than the
Existing Bank and the New Bank) irrevocably authorises the Facility Agent to
execute a duly completed LC Transfer Certificate on its behalf.
Failure by the Beneficiary (within ten Business Days or receiving a written
request therefore) to give consent to any novation pursuant to and to execute an
LC Transfer Certificate, which by the terms of this Credit it is not entitled to
withhold or fail to execute will result in all obligations of the Existing Bank
which were to have been novated being cancelled at the expiry of such ten
Business Day period, such cancellation to result in non-payment by that Existing
Bank of its Participation Percentage of any further Payment Amount without
affecting the payments to be made by the other Banks in respect thereof.
On the date of execution of the Transfer Certificate by the Facility Agent and
(if the Beneficiary's consent is required but not deemed give) the Beneficiary
of, if later, the date specified in the LC Transfer Certificate:
i. the Facility Agent, the other Banks and the Beneficiary (the "EXISTING
PARTIES") and the Existing Bank will be released from their obligations to
each other under this Credit (the "DISCHARGED OBLIGATIONS");
ii. the New Bank and the Existing Parties will assume obligations towards each
other which differ from the Discharged Obligations only insofar as they
are owed to or assumed by the New Bank instead of the Existing Bank;
iii. the rights of the Existing Bank against the Existing Parties and vice
versa (the "DISCHARGED RIGHTS") will be cancelled; and
iv. the New Bank and the Existing Parties will acquire rights against each
other which differ from the Discharged Rights only insofar as they are
exercisable by or against the New Bank instead of the Existing Bank.
189
In each case to the extent only that the same relate to or arise out of the
amount of the Existing Bank's Participation Percentage specified in the LC
Transfer Certificate.
Save insofar as such provisions may be inconsistent with the express terms of
this Credit, this Credit is subject to the provisions of the Uniform Customs and
Practice for Documentary Credits (1993 Revision) ICC Publication No. 500.
This Letter of Credit and the Credit established hereby shall be governed by
English law. For the avoidance of doubt, it is confirmed that demand may be
made hereunder by tested telex.
Yours faithfully
.............................
[Facility Agent to sign
on behalf of each Bank]
190
EXHIBIT A
CERTIFICATE OF BENEFICIARY
To: [ ] as Facility Agent
Dear Sirs,
IRREVOCABLE NON-TRANSFERABLE LETTER OF CREDIT NO. [ ] (THE "CREDIT")
With reference to the above Credit, we hereby certify that:
(a) we have provided general banking facilities to [ ] [and its
subsidiaries] incorporated in [ ];
(b) an aggregate amount (the "PAYMENT AMOUNT") of [ ] (comprising
[ ] of principal and [ ] of interest and/or
other charges) fell due for payment in [ ] by [
] on [ ] and remains due and unpaid at the date of this
Certificate;
(c) save for the Credit, there is no security (whether in the nature of a
mortgage, charge, pledge, lien or other security interest), guarantee,
indemnity or other like arrangements securing payment to us of the Payment
Amount granted or provided by any other member of the Group.
Accordingly, we hereby request payment pursuant to the Credit of the Payment
Amount. Payment is to be made to our account (A/c No. [ ]) with [
] at [ ].
Yours faithfully,
........................
for and on behalf of
[ ]
191
EXHIBIT B
To: Chase Manhattan International Limited (the "FACILITY AGENT")
for itself and on behalf of
the other parties to the Facility
Agreement and the Intercreditor Agreement
referred to below.
This Certificate ("NOVATION CERTIFICATE") relates to a facility agreement
(together with and as supplemented and amended by all Accession Agreements,
Novation Certificates and other agreements from time to time entered into in
relation to it, the "FACILITY AGREEMENT") dated [ ], 1998 made between,
amongst others, The Derby Cycle Corporation and various of its Subsidiaries as
Borrowers and Guarantors, Chase Manhattan plc as Arranger, the financial
institutions named therein as Banks, Chase Manhattan International Limited as
Facility Agent and as Security Agent for the Banks in respect of a revolving
credit facility of up to DM225,000,000 and to the Intercreditor Agreement
referred to in the Facility Agreement. Terms defined in the Facility Agreement
shall unless defined herein, have the same meanings herein as in the Facility
Agreement.
1. [Existing Bank] (the "EXISTING BANK"):
(a) confirms that the details appearing in the Schedule hereto under
the headings "Existing Bank's Commitments (Portion Substituted)",
"Existing Bank's Participations in Advances (Portion Novated)" and
"Outstanding Standby L/Cs of Credit" are accurate; and
(b) requests [ ] (the "NEW BANK") to accept and procure the
substitution pursuant to Clause 29 of the Facility Agreement [and
Clause [ ] of the Intercreditor Agreement] of the Existing
Bank by the New Bank in respect of the portion of its relevant
Commitment(s) specified under the heading "Existing Bank's
Revolving Commitment (Portion Novated)" and "Existing Bank's
Standby L/C Commitment (Portion Novated)" in the Schedule hereto
and/or in respect of the Advance(s) referred to under the heading
"Existing Bank's portion of Outstanding Advances (Portion
Novated)" and/or in respect of the Standby L/Cs referred to under
the heading "Existing Bank's participation in Outstanding Standby
L/Cs (Portion Novated)" by counter-signing the copy of this
Novation Certificate executed by the Existing Bank and delivering
the same to the Facility Agent.
2. The New Bank hereby requests the Obligors, the Arranger, the Banks, and the
Agents and the other parties to the Intercreditor Agreement to accept this
duly executed Novation Certificate as being delivered pursuant to and for
the purposes of Clause 29 of the Facility Agreement and Clause [ ] of the
Intercreditor
192
Agreement so as to take effect in accordance with its terms under such
Clauses on [date of novation].
3. The New Bank hereby (a) confirms receipt of a copy of the Finance Documents
as at the date hereof and all such other documents and information as it has
required in connection herewith, (b) accepts and confirms the application of
the provisions of Clause 29 of the Facility Agreement and Clause [ ] of the
Intercreditor Agreement as they apply in connection herewith and the
transactions and matters to occur in consequence hereof, and (c) confirms
the correctness of the details specified in respect to it in the Schedule
hereto.
4. The New Bank confirms that:
(a) it has received a copy of the Finance Document together with such
other documents and information as it has required in connection
with this transaction;
(b) it has not relied and will not hereafter rely on the Existing Bank
to check or enquire on its behalf into the legality, validity,
effectiveness, adequacy, accuracy or completeness of any such
documents or information;
(c) it has made its own independent investigation and assessment of
the financial affairs of each Obligor and their related entities
and the other parties considered by it to be relevant in
connection with this transaction and agrees that it has not relied
and will not rely on the Existing Bank, the Arranger, the Facility
Agent, the Security Agent or the Banks to assess or keep under
review on its behalf the financial condition, creditworthiness,
condition, affairs, status or nature of any member of the Group or
any other party to the Finance Documents (save as otherwise
expressly provided therein);
(d) it has power and authority to become a party to the Finance
Documents and has taken all necessary action to authorise
execution of this Novation Certificate and has obtained all
necessary approvals and consents to the assumption of its
obligations under the Facility Agreement and the Intercreditor
Agreement; and
(e) it is a Qualifying Bank;
5. The New Bank hereby undertakes with the Existing Bank and each of the other
parties to the Facility Agreement and the Intercreditor Agreement that it
will perform in accordance with its terms all those obligations which by the
terms of the Senior Facility Agreement and the Intercreditor Agreement will
be assumed by it under the Senior Finance Documents after delivery of the
executed copies of this Novation Certificate to the Facility Agent and
countersignature thereof by the Facility Agent, and the New Bank hereby
undertakes to be bound by the provisions of the Senior Finance Documents.
193
6. The Existing Bank hereby gives notice that nothing herein or any Senior
Finance Document (or any other document relating thereto) shall oblige the
Existing Bank (i) to accept a re-transfer from or novation by the New Bank
of the whole or any part of its rights, benefits and/or obligations under
the Finance Documents or (ii) to support any losses directly or indirectly
sustained or incurred by the New Bank for any reason whatsoever including,
without limitation, the non-performance by any Obligor or any other party to
the Finance Documents (or any document relating thereto) of their
obligations under any such document. The New Bank hereby acknowledges the
absence of any such obligation as is referred to in paragraphs (i) and (ii)
above.
7. This Novation Certificate shall be governed by and construed in accordance
with English law.
8. This Novation Certificate may be executed in any number of counterparts and
all of such counterparts taken together shall be deemed to constitute one
and the same instrument.
194
SCHEDULE 8
FORM OF NOVATION CERTIFICATE
To: Chase Manhattan International Limited (the "FACILITY AGENT")
for itself and on behalf of
the other parties to the Facility
Agreement and the Intercreditor Agreement
referred to below.
This Certificate ("NOVATION CERTIFICATE") relates to a facility agreement
(together with and as supplemented and amended by all Accession Agreements,
Novation Certificates and other agreements from time to time entered into in
relation to it, the "FACILITY AGREEMENT") dated [ ], 1998 made between,
amongst others, The Derby Cycle Corporation and various of its Subsidiaries as
Borrowers and Guarantors, Chase Manhattan plc as Arranger, the financial
institutions named therein as Banks, Chase Manhattan International Limited as
Facility Agent and as Security Agent for the Banks in respect of a revolving
credit facility of up to DM225,000,000 and to the Intercreditor Agreement
referred to in the Facility Agreement. Terms defined in the Facility Agreement
shall unless defined herein, have the same meanings herein as in the Facility
Agreement.
1. [Existing Bank] (the "EXISTING BANK"):
(a) confirms that the details appearing in the Schedule hereto under
the headings "Existing Bank's Commitments (Portion Substituted)",
"Existing Bank's Participations in Advances (Portion Novated)" and
"Outstanding Standby L/Cs of Credit" are accurate; and
(b) requests [ ] (the "NEW BANK") to accept and procure the
substitution pursuant to Clause 29 of the Facility Agreement [and
Clause 9 of the Intercreditor Agreement] of the Existing Bank by
the New Bank in respect of the portion of its relevant
Commitment(s) specified under the heading "Existing Bank's
Revolving Commitment (Portion Novated)" and "Existing Bank's
Standby L/C Commitment (Portion Novated)" in the Schedule hereto
and/or in respect of the Advance(s) referred to under the heading
"Existing Bank's portion of Outstanding Advances (Portion
Novated)" and/or in respect of the Standby L/Cs referred to under
the heading "Existing Bank's participation in Outstanding Standby
L/Cs (Portion Novated)" by counter-signing the copy of this
Novation Certificate executed by the Existing Bank and delivering
the same to the Facility Agent.
2. The New Bank hereby requests the Obligors, the Arranger, the Banks, and the
Agents and the other parties to the Intercreditor Agreement to accept this
duly executed Novation Certificate as being delivered pursuant to and for
the purposes of Clause 29 of the Facility Agreement and Clause 9 of the
Intercreditor
195
Agreement so as to take effect in accordance with its terms under such
Clauses on [date of novation].
3. The New Bank hereby (a) confirms receipt of a copy of the Finance Documents
as at the date hereof and all such other documents and information as it has
required in connection herewith, (b) accepts and confirms the application of
the provisions of Clause 29 of the Facility Agreement and Clause 9 of the
Intercreditor Agreement as they apply in connection herewith and the
transactions and matters to occur in consequence hereof, and (c) confirms
the correctness of the details specified in respect to it in the Schedule
hereto.
4. The New Bank confirms that:
(a) it has received a copy of the Finance Document together with such
other documents and information as it has required in connection
with this transaction;
(b) it has not relied and will not hereafter rely on the Existing Bank
to check or enquire on its behalf into the legality, validity,
effectiveness, adequacy, accuracy or completeness of any such
documents or information;
(c) it has made its own independent investigation and assessment of
the financial affairs of each Obligor and their related entities
and the other parties considered by it to be relevant in
connection with this transaction and agrees that it has not relied
and will not rely on the Existing Bank, the Arranger, the Facility
Agent, the Security Agent or the Banks to assess or keep under
review on its behalf the financial condition, creditworthiness,
condition, affairs, status or nature of any member of the Group or
any other party to the Finance Documents (save as otherwise
expressly provided therein);
(d) it has power and authority to become a party to the Finance
Documents and has taken all necessary action to authorise
execution of this Novation Certificate and has obtained all
necessary approvals and consents to the assumption of its
obligations under the Facility Agreement and the Intercreditor
Agreement; and
(e) it is a Qualifying Bank;
5. The New Bank hereby undertakes with the Existing Bank and each of the other
parties to the Facility Agreement and the Intercreditor Agreement that it
will perform in accordance with its terms all those obligations which by the
terms of the Senior Facility Agreement and the Intercreditor Agreement will
be assumed by it under the Senior Finance Documents after delivery of the
executed copies of this Novation Certificate to the Facility Agent and
countersignature thereof by the Facility Agent, and the New Bank hereby
undertakes to be bound by the provisions of the Senior Finance Documents.
196
6. The Existing Bank hereby gives notice that nothing herein or any Senior
Finance Document (or any other document relating thereto) shall oblige the
Existing Bank (i) to accept a re-transfer from or novation by the New Bank
of the whole or any part of its rights, benefits and/or obligations under
the Finance Documents or (ii) to support any losses directly or indirectly
sustained or incurred by the New Bank for any reason whatsoever including,
without limitation, the non-performance by any Obligor or any other party to
the Finance Documents (or any document relating thereto) of their
obligations under any such document. The New Bank hereby acknowledges the
absence of any such obligation as is referred to in paragraphs (i) and (ii)
above.
7. This Novation Certificate shall be governed by and construed in accordance
with English law.
8. This Novation Certificate may be executed in any number of counterparts and
all of such counterparts taken together shall be deemed to constitute one
and the same instrument.
197
THE SCHEDULE
1. Existing Bank's Revolving Commitment: (Portion Novated)
2. Existing Bank's portion of Outstanding Advances: (Portion Novated)
DRAWDOWN DATE AMOUNT REPAYMENT DATE
[ ] [ ] [ ]
3. Existing Bank's Standby L/C Commitment: (Portion Novated)
4. Existing Bank's participation in Outstanding Standby L/Cs: (Portion Novated)
ISSUE DATE AMOUNT EXPIRY DATE
[ ] [ ] [ ]
NB. PLEASE NOTE CLAUSE 29.2(C) REGARDING THE PROPORTION OF REVOLVING COMMITMENT
AND STANDBY L/C COMMITMENT THAT ARE REQUIRED TO BE TRANSFERRED.
[Name of Existing Bank] [Name of New Bank]
By: By:
Date: Date:
[Name of Facility Agent]
By:
Date:
CHASE MANHATTAN INTERNATIONAL LIMITED
for itself and as the Facility Agent, Security
Agent, and for and on behalf of the Obligors,
the Arranger, the Banks and for and on behalf
of the parties to the Intercreditor Agreement
By:
Date:
198
SCHEDULE 9
ADDITIONAL COSTS
(a) The Additional Costs for each Advance or Overdue Amount whole (and to the
extent that) the Banks making such Advance are subject to the Additional
Costs requirements of the Bank of England, shall be calculated in accordance
with the following formulae:
Additional = AB+C(B-D) + E (B-F) % per annum
-------------------
Costs 100 - (A+E)
Where, on the day the formula is applied:
A is the percentage of Facility Agent's liabilities which it is
required by the Bank of England, to hold on a non-interest bearing
deposit account.
B is the rate at which the Facility Agent offers to leading banks
Sterling deposits in the London interbank market at or about 10.00
a.m. on the date for the relevant Term.
C is the percentage of eligible liabilities which the Facility Agent
is required by the Bank of England to maintain with financial
institutions (recognised for this purpose by the Bank of England).
D is the average of the rates at which financial institutions
(recognised for this purpose by the Bank of England) are bidding
for Sterling deposits at or about 11.00 a.m. on that date for the
relevant Term.
E is the percentage of the Facility Agent's eligible liabilities
which it is required by the Bank of England to place as a special
deposit.
F is the rate of interest, per annum, paid by the Bank of England on
special deposits.
(b) In this Schedule 9 "ELIGIBLE LIABILITIES" and "SPECIAL DEPOSITS" have the
meanings given to them, at the date the formula is applied, by the Bank of
England.
(c) Each of A, B, C, D, E and F are to be included in the formula as figures and
not as percentages. Therefore, if A = 0.5% and B = 10%, AB = 5 and not 5%.
199
(d) If more than one rate is provided in respect of the above formula, the
applicable rate shall be the average of the rates so provided, rounded up to
five decimal places.
(e) If the Facility Agent determines that the application of the above formula
is no longer appropriate as a result of a change occurring after the date of
this Agreement, the Facility Agent shall notify the Borrowers and the Banks
of such fact the manner in which the Additional Costs shall be determined,
and, if appropriate, shall substitute a new formula. Any determination made
by the Facility Agent shall, in the absence of manifest error, be binding on
all the Parties.
200
SCHEDULE 10
COMPLIANCE CERTIFICATE
To: The Facility Agent and each of the Banks
(as defined in the Facility Agreement)
[Date]
The undersigned hereby certifies that to the best of their information,
knowledge and belief after all due enquiry but without personal liability:
1. This certificate is given pursuant to Clause 19.1 (Compliance Certificate)
of an agreement dated [ ] (the "FACILITY AGREEMENT") made
between inter alios, The Derby Cycle Corporation and certain of its
Subsidiaries as Borrowers and Guarantors and the parties defined therein as
the Facility Agent, the Arranger, the Security Agent and the Banks. Terms
defined in the Facility Agreement shall, unless otherwise defined herein,
bear the same meaning when used herein.
2. Terms defined in the Facility Agreement shall bear the same meaning herein.
3. We confirm that as at [insert appropriate Accounting Date]:
(a) The ratio of Consolidated Adjusted EBITDA to Consolidated Net
Interest Payable, was [ ];
(b) Consolidated Net Worth was [ ];
(c) The ratio of Net Average Financial Indebtedness to Consolidated
Adjusted EBITDA was [ ];
(d) Consolidated Adjusted EBITDA was [ ];
(e) Debtor Days was [ ]; and
(f) Inventory Days was [ ].
4. We set out below the computations giving rise to the above ratios and
figures, each of which has been made in accordance with the provisions of
the Facility Agreement;
201
5. We therefore confirm, that as at [insert relevant Accounting Date] each of
the financial conditions specified at Clause 20 of the Facility Agreement
[was/was not] satisfied.
6. No Default has occurred and is continuing as of the date hereof.
....................
for and on behalf of
THE DERBY CYCLE CORPORATION
202
SCHEDULE 11
MATERIAL GROUP MEMBERS
Derby Holding Limited
Raleigh Industries Limited
Raleigh International Limited
Sturmey-▇▇▇▇▇▇ Limited
Raleigh Industries of Canada Limited
The Derby Cycle Corporation
Raleigh BV
Raleigh Europe BV
Koninklijke Gazelle BV
Derby Nederland BV
Derby Holding BV
Sturmey-▇▇▇▇▇▇ Limited B.V
Lyon Investments BV
Derby Holding (Deutschland) GmbH
Raleigh Fahrrader GmbH
NW Sportgerate GmbH
Derby Cycle Werke GmbH
E Weiner Bike Parts GmbH
Univega Worldwide GmbH
Univega Beteiligung GmbH
MS Sport Vertiebs GmbH
Derby Farrader GmbH
Derby WS
Vermogenswerwaltungs GmbH
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ GmbH
Curragh Finance Company
Raleigh Ireland Limited
InterDerby Group Finance N.V.
Derby Finance N.V.
The British Cycle Corporation Limited
Derby Investment Holding (Pty) Limited
Pro Bike South Africa (Pty) Limited
203
SCHEDULE 12
DESCRIPTION OF ECU
The ECU is from time to time used as the unit of account of the European
Communities. Changes to the ECU may be made by the European Communities, in
which event the ECU will change accordingly. However, under Article 109G of the
Treaty establishing the European Communities, as amended by the Treaty on
European Union (the "TREATY"), the currency composition of the ECU may not be
changed. The Treaty contemplates that European monetary union will occur in
three stages, the second of which began on 1 January 1994 (following the entry
into force of the Treaty on European Union). The Treaty provides that, at the
start of the third stage of European monetary union, the value of the ECU as
against the currencies of the member states participating in the third stage
(and the conversion rates at which such currencies shall be substituted by the
ECU) will be irrevocably fixed, and the ECU will become a currency in its own
right. In contemplation of that third stage, the European Council meeting in
Madrid on 16 December 1995 decided that the name of that currency will be the
euro and that, in accordance with the Treaty, substitution of the euro for the
ECU (and of references to the euro for references to the ECU) will be at the
rate of one euro for one ECU. From the start of the third stage of European
monetary union, all payments expressed to be payable in ECU, or sums to be
calculated by reference to ECU, will be payable in, or calculated by reference
to, euro at the rate then established in accordance with the Treaty.
204
SCHEDULE 13
FORM OF BANK ACCESSION NOTICE
To: CHASE MANHATTAN INTERNATIONAL LIMITED as Facility Agent
BANK ACCESSION NOTICE
1. We refer to the Agreement (the "AGREEMENT") dated [ ] and made
between inter alias, The Derby Cycle Corporation and certain of its
Subsidiaries as Borrowers and Guarantors, the parties defined therein as the
Facility Agent, the Arranger, the Security Agent and the Banks and to the
letter dated [ ] pursuant to which The Derby Cycle Corporation
nominated [INSERT NAME OF ACCEDING BANK] as an Acceding Bank with a
Revolving Commitment of DM 11,000,000, a Standby L/C Commitment of DM771,028
(as reduced pursuant to Clause 2.1(c)) and an Ancillary Commitment of
DM11,000,000.
2. This undertaking is given pursuant to Clause 2.4 of the Agreement.
3. In consideration of our being nominated as an Acceding Bank for the purposes
of the Agreement we hereby undertake and agree to be bound by all the
provisions of the Agreement as if we had originally been a party thereto.
4. We enclose the following:
(i) Ancillary Facility pursuant to which we agree to make available the
facilities detailed therein to the member(s) of the South African
Group stated therein in an aggregate amount of DM11,000,000; and
(ii) Borrower Accession Agreement(s) and Guarantor Accession Agreement(s)
in respect of [state identities of each member of the South African
Group to which the said Ancillary Facilities are to be provided]
together with each of the documents required to be provided therewith
pursuant to Schedule 5 of the Agreement.
5. For the purposes of Clause 33 of the Agreement and until further notice to
you our address, telex and telefax numbers shall be as follows:
Address:
Telex No.
Telefax No.
205
6. Terms used herein and not otherwise defined shall have the same meaning as
in the Agreement.
DATED this [ ] day of [ ], [19 ]
For and on behalf of
[Acceding Bank]
...........................
206
SCHEDULE 14
SECURITY DOCUMENTS
THE SECURITY AGENT WILL BE A PARTY TO THE FOLLOWING SECURITY DOCUMENTS WHICH
WILL BE GOVERNED BY AND SUBJECT TO THE APPLICABLE LAWS OF THE COUNTRIES AS
INDICATED BELOW:
DOCUMENT OBLIGOR GIVING SECURITY
-------- -----------------------
1. NETHERLANDS
-----------
(a) FIRST PLEDGE OF INTELLECTUAL Koninklijke Gazelle BV
PROPERTY RIGHTS
(b) FIRST PLEDGE OF RECEIVABLES Lyon Investments BV
(each Obligor will enter into a Derby Nederland BV
separate pledge) Sturmey-▇▇▇▇▇▇ Europa BV
Raleigh BV
Raleigh Europe BV
Derby Holding BV
Koninklijke Gazelle BV
(c) FIRST PLEDGE OF TANGIBLES Raleigh BV
(each Obligor will Koninklijke Gazelle BV
enter into a separate pledge)
(d) MORTGAGE OF REAL PROPERTY Koninklijke Gazelle BV
(e) DUTCH LAW SHARE PLEDGES: over the
following shares:
(i) Lyon Investments BV (66 2/3%) The Derby Cycle Corporation
(ii) Derby Holding BV (66 2/3%)
Derby Nederland BV Lyon Investments BV
(i) Sturmey-▇▇▇▇▇▇ Europa BV Derby Nederland BV
(ii) Raleigh BV
(iii) Koninklijke Gazelle BV
NV Dierense Maatschapij Tot Koninklijke Gazelle BV
Exploitatie van Woningen en Asuranien
Raleigh Europe BV Derby Holding BV
207
2. CANADA
------
(a) GENERAL SECURITY AGREEMENT Raleigh Industries of Canada Limited
(b) CHARGE/MORTGAGE OF LAND Raleigh Industries of Canada Limited
(c) HYPOTHEC ON MOVEABLE PROPERTY Raleigh Industries of Canada Limited
(Les Industries Raleigh du Canada
Limitee)
(d) HYPOTHEC ON IMMOVEABLE PROPERTY Raleigh Industries of Canada Limited
(Les Industries Raleigh du Canada
Limitee)
(e) CANADIAN LAW PLEDGE over shares
in the following:
Century Cycle Manufacturing Raleigh Industries of Canada Limited
Corporation
3. UNITED STATES OF AMERICA
------------------------
(a) SECURITY AGREEMENT The Derby Cycle Corporation
(b) US LAW SHARE PLEDGE over shares
in the following:
(i) Derby Trading Co. Inc. The Derby Cycle Corporation
(ii) Lyon Investments BV (66 2/3%)
(iii) Sturmey-▇▇▇▇▇▇ Limited (66 2/3%)
(iv) Derby Holding BV (66 2/3%)
(v) Raleigh Industries of Canada
Limited (66 2/3%)
(vi) Derby Holding (Deutschland) GmbH
(5%)
4. DUTCH ANTILLES
--------------
(a) SECURITY AGREEMENT InterDerby Group Finance NV
(b) DUTCH ANTILLES LAW PLEDGE over shares
in the following:
InterDerby Group NV Derby Holding (Deutschland) GmbH
in respect of its shares in:
5. HONG KONG
---------
(a) HONG KONG LAW CHARGE Over Shares in
208
the following:
Derby (HK) Trading Company Limited Derby Trading Co. Inc.
6. IRELAND
-------
(a) DEBENTURE
(each Obligor will enter into a Raleigh Ireland Limited
separate Debenture) Curragh Finance Company
(b) IRISH LAW PLEDGES over the share
in the following:
Curragh Finance Company Limited N.W. Sportgerate GmbH
(49%)
(i) Raleigh Ireland Limited Derby Holding BV
(ii) Curragh Finance Company Limited
(50%)
7. GERMANY
-------
(a) SECURITY AGREEMENTS WITH FOLLOW UP Derby Cycle Werke GmbH
ASSIGNMENTS E Weiner Bike-Parts GmbH
(each Obligor will enter into a Raleigh Fahrrader GmbH
separate document): ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ GmbH
MS Sport Vertriebs GmbH
Ms Sport AG
Derby WS Vermogensverwaltungs
GmbH
Univega Worldwide Licence GmbH
(80%)
Univega Beteilingungen GmbH (80%)
Derby Fahrrader GmbH
InterDerby Group Finance N.V.
(b) DEEDS OF ASSIGNMENT IN RESPECT OF Derby Cycle Werke GmbH
TANGIBLE MOVEABLE PROPERTY: E Weiner Bike-Parts GmbH
(each Obligor will enter into a Derby Fahrrader GmbH
separate document): ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ GmbH
(c) ASSIGNMENTS OF OWNER'S LAND CHARGES: Derby Cycle Werke GmbH
(each Obligor will enter into ▇ ▇ ▇▇▇▇▇▇ Bike-Parts GmbH
separate document):
(d) INSURANCE ASSIGNMENT AGREEMENTS: Derby Cycle Werke GmbH
(each Obligor will enter into a Raleigh Fahrrader GmbH
separate document): ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ GmbH
▇. ▇▇▇▇▇▇ Bike-Parts GmbH
209
MS Sport Vertriebs GmbH
Derby Fahrrader GmbH
(e) INTELLECTUAL PROPERTY PLEDGE: Derby Cycle Werke GmbH
(each Obligor will enter into a MS Sports Vertriebs GmbH
separate document): Univega Worldwide Licence GmbH
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ GmbH
(f) ASSIGNMENT OF INTER-COMPANY Raleigh Fahrrader GmbH
INDEBTEDNESS: Derby Cycle Werke GmbH
(each Obligor will enter into a Univega Worldwide Licence GmbH
separate document): ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ GmbH
Derby Holding (Deutschland) GmbH
▇. ▇▇▇▇▇▇ Bike Parts GmbH
MS Sport Vertrieb GmbH
(g) SECURITISATION PLAN Derby Cycle Werke GmbH
Derby Holding (Deutschland) GmbH
Derby Fahrrader GmbH
Derby WS Vermogensverwaltungs
GmbH
NW Sportgerate GmbH
Univega Beteiligungen GmbH
Univega Worldwide Licence GmbH
Raleigh Fahrrader GmbH
▇. ▇▇▇▇▇▇ Bike Parts GmbH
MS Sport Vertriebs GmbH
(h) GERMAN LAW PLEDGES over the following
shares:
Derby Holding (Deutschland) GmbH The Derby Cycle Corporation
(i) Derby Fahrrader GmbH Derby Holding (Deutschland) GmbH
(ii) Raleigh Fahrrader GmbH
(iii) Derby WS Vermogensverwaltungs
GmbH
(iv) Univega Beteilingungen GmbH
(v) Univega Worldwide GmbH
Derby Cycle Werke GmbH Raleigh Fahrrader GmbH
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ GmbH Derby Vermogensverwaltungs
Gesellschaft GmbH
(i) M.S. Sport Vertriebs GmbH Univega Beteiligungen GmbH
(ii) MS Sport ▇▇
▇. ▇▇▇▇▇▇ Bike-Parts GmbH Lyon Investments BV
210
NW Sportgerate GmbH Derby Cycle Werke GmbH
NW Sportgerate GmbH Derby Cycle Werke GmbH
Curragh Finance Company (49%) NW Sportgerate GmbH
Derby Holding (Deutschland) GmbH Derby Holding BV
8. ENGLAND
-------
(a) English Debenture Derby Holding Limited
(global debenture for all English Raleigh Industries Limited
Obligors) Raleigh International Limited
Sturmey-▇▇▇▇▇▇ Limited
The British Cycle Corporation
Limited
BSA Cycles Limited
The Triumph Cycle Company
Corporation
(b) English Law Charge over Shares in
the following Company:
Sturmey-▇▇▇▇▇▇ Limited (662/3) The Derby Cycle Corporation
Various Raleigh (Services) Limited
211
THE DERBY CYCLE CORPORATION
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
THE OTHER BORROWERS
RALEIGH INDUSTRIES LIMITED
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
STURMEY-▇▇▇▇▇▇ LIMITED
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
DERBY HOLDING (DEUTSCHLAND) GMBH
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
KONINKLIJKE GAZELLE BV
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
RALEIGH INDUSTRIES OF CANADA LIMITED
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
RALEIGH EUROPE B.V.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
212
RALEIGH B.V.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ BIKE PARTS GMBH
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ GMBH
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
DERBY HOLDINGS LIMITED
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
RALEIGH FAHRRADER GMBH
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
DERBY CYCLE WERKE GMBH
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
RALEIGH INTERNATIONAL LIMITED
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
CURRAGH FINANCE COMPANY
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
213
RALEIGH IRELAND LIMITED
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
THE GUARANTORS
DERBY HOLDING LIMITED
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
RALEIGH INDUSTRIES LIMITED
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RALEIGH INTERNATIONAL LIMITED
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STURMEY ▇▇▇▇▇▇ LIMITED
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
RALEIGH INDUSTRIES OF CANADA LIMITED
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
THE DERBY CYCLE CORPORATION
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
RALEIGH BV
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
214
RALEIGH EUROPE BV
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KONINKLIJKE GAZELLE BV
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DERBY NEDERLAND BV
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DERBY HOLDING BV
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
STURMEY ▇▇▇▇▇▇ EUROPA LIMITED B.V.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
LYON INVESTMENTS BV
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
DERBY HOLDING (DEUTSCHLAND) GMBH
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
RALEIGH FAHRRADER GMBH
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215
NW SPORTGERATE GMBH
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
DERBY CYCLE WERKE GMBH
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ BIKE PARTS GMBH
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
UNIVEGA WORLDWIDE LICENCE GMBH
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
UNIVEGA BETEILIGUNGEN GMBH
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
MS SPORT VERTRIEBS GMBH
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
DERBY FAHRRADER GMBH
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
DERBY WS VERMOGENSWERWALTUNGS GMBH
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
216
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ GMBH
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
CURRAGH FINANCE COMPANY
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
RALEIGH IRELAND LIMITED
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
INTER-DERBY GROUP FINANCE B.V.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
BSA CYCLES LIMITED
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
TRIUMPH CYCLE CO. LIMITED
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
217
RALEIGH (SERVICES) LIMITED
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
THE BANKS
THE CHASE MANHATTAN BANK
By: ▇▇▇▇ ▇▇▇▇▇▇
ABN AMRO BANK N.V.
By: ▇▇▇▇ ▇▇▇▇▇▇
SCOTIA BANK EUROPE PLC
By: ▇▇▇▇ ▇▇▇▇▇▇
DRESDNER BANK AG, GRAND CAYMAN BRANCH
By:
BANK OF SCOTLAND
By: ▇▇▇▇ ▇▇▇▇▇▇
MIDLAND BANK PLC
By: ▇▇▇▇ ▇▇▇▇▇▇
LLOYDS BANK PLC
By:
218
THE SUMITOMO BANK, LIMITED
By: ▇▇▇▇ ▇▇▇▇▇▇
BHF - BANK AG
By: ▇▇▇▇ ▇▇▇▇▇▇
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: ▇▇▇▇ ▇▇▇▇▇▇
ISTITUTO BANCARIO SAO PAOLO DI TORINO SPA
By: ▇▇▇▇ ▇▇▇▇▇▇
KREDIETBANK (NEDERLAND) N.V.
By: ▇▇▇▇ ▇▇▇▇▇▇
BANQUE NATIONALE DE PARIS
By: ▇▇▇▇ ▇▇▇▇▇▇
THE GOVERNOR AND COMPANY OF
THE BANK OF IRELAND
By: ▇▇▇▇ ▇▇▇▇▇▇
OLDENBURGISCHE LANDESBANK AG
By: ▇▇▇▇ ▇▇▇▇▇▇
219
The Facility Agent
CHASE MANHATTAN INTERNATIONAL LIMITED
By: ▇▇▇▇ ▇▇▇▇▇▇
THE SECURITY AGENT
CHASE MANHATTAN INTERNATIONAL LIMITED
By: ▇▇▇▇ ▇▇▇▇▇▇
THE ARRANGER
CHASE MANHATTAN PLC
By: ▇▇▇▇ ▇▇▇▇▇▇
220