EXHIBIT 4.4(a)
CONFORMED COPY
DATED 17 September 2001
▇▇▇▇▇▇▇▇ CASTING UK LIMITED
and others as Facility Companies
and/or Guarantors
and
BURDALE FINANCIAL LIMITED
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FACILITY AGREEMENT
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[▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LOGO]
CONTENTS
CLAUSE PAGE
1. INTERPRETATION.......................................................... 1
2. FACILITIES.............................................................. 11
3. PURPOSE................................................................. 11
4. CONDITIONS PRECEDENT.................................................... 11
5. RESTRICTIONS ON UTILISATIONS............................................ 12
6. UTILISATION OF FACILITIES............................................... 14
7. REPAYMENT AND PREPAYMENT................................................ 18
8. INTEREST AND COMMISSION................................................. 20
9. COLLECTION OF RECEIVABLES............................................... 21
10. TAX..................................................................... 22
11. INCREASED COSTS......................................................... 24
12. REPRESENTATIONS AND WARRANTIES.......................................... 25
13. GENERAL UNDERTAKINGS.................................................... 27
14. INFORMATION AND ASSET UNDERTAKINGS...................................... 33
15. GUARANTEE AND INDEMNITY................................................. 38
16. EVENTS OF DEFAULT....................................................... 40
17. COSTS, EXPENSES AND FEES................................................ 43
18. INDEMNITIES............................................................. 45
19. NOTICES................................................................. 46
20. MISCELLANEOUS PROVISIONS................................................ 47
21. GOODS AND DOCUMENTS..................................................... 48
22. CHANGES TO PARTIES...................................................... 49
23. GOVERNING LAW AND JURISDICTION.......................................... 50
SCHEDULE 1 The Obligors...................................................... 51
SCHEDULE 2 Conditions Precedent.............................................. 54
SCHEDULE 3 Forms of Request.................................................. 58
SCHEDULE 4 Forms of Report................................................... 63
SCHEDULE 5 Form of Accession Letter.......................................... 66
SIGNATORIES.................................................................. 68
THIS AGREEMENT is dated 17 September 2001
BETWEEN:
(1) ▇▇▇▇▇▇▇▇ CASTING UK LIMITED (Registered in England and Wales No. 03514183)
(the "COMPANY");
(2) THE COMPANIES (if any) identified in Part I of Schedule 1 as Facility
Companies;
(3) THE COMPANIES (if any) identified in Part II of Schedule 1 as Guarantors;
and
(4) BURDALE FINANCIAL LIMITED (Registered in England and Wales No. 2656007)
("BURDALE").
IT IS AGREED:
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement:
"ACCESSION LETTER" means a document substantially in the form set out in
Schedule 5.
"ACTUAL DAY OF PAYMENT" in relation to a Purchased Receivable means the
date on which full payment in respect of that Purchased Receivable is made
into a Blocked Account by the relevant account debtor or the relevant
Facility Company.
"ADDITIONAL FACILITY COMPANY" means each company which becomes an
Additional Facility Company in accordance with Clause 22.2.
"ADDITIONAL GUARANTOR" means each company which becomes an Additional
Guarantor in accordance with Clause 22.3.
"ADDITIONAL OBLIGOR" means each Additional Facility Company and each
Additional Guarantor.
"AFFILIATE" means, in relation to any person, a Subsidiary of that person
or a Holding Company of that person or any other Subsidiary of that Holding
Company.
"AVAILABILITY LIMITS" means the restrictions on Utilisations set out in
Clause 5.
"AVAILABILITY PERIOD" means the period from the opening of business in
London on today's date until close of business in London on the date
falling five Business Days prior to the Final Repayment Date or such later
date as Burdale may agree.
"BLOCKED ACCOUNTS" means the following account(s) of the Facility Companies
with Barclays Bank plc, Lombard Street branch, sort code 20-00-00:
(a) Sheffield Forgemasters Rolls Limited's Sterling account number
▇▇▇▇▇▇▇▇
(b) Sheffield Forgemasters Engineering Limited's Sterling account number
▇▇▇▇▇▇▇▇
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(c) any bank accounts of an Additional Facility Company specified as
Blocked Accounts in the relevant Accession Letter;
in each case, (as the same may be redesignated, renumbered or renamed from
time to time), or such other account(s) as previously approved by Burdale.
"BUSINESS DAY" means any day not being a Saturday, Sunday or Bank holiday
when banks are open for business in London.
"CASH REQUEST" means a request for Burdale to pay to a Facility Company an
amount of unpaid Purchase Price and/or the proceeds of a Loan in
substantially the form set out in Part II of Schedule 3.
"CHARGED ACCOUNTS" means the Blocked Accounts and the Other Accounts.
"DEBENTURE" means the debenture executed or to be executed by the Obligors
in favour of Burdale.
"DEFAULT" means any Event of Default and any event which with the giving of
notice and/or lapse of time and/or as a result of any Utilisation (or any
combination of the foregoing) would constitute an Event of Default.
"DEFAULT RATE" means the rate determined by Burdale to be 3% above the
Interest Rate from time to time.
"DILUTION RATE" means the monthly value of credit notes and non-cash
credits issued by a Facility Company as a percentage of the monthly value
of sales.
"DOCUMENTS" means any and all documents which represent or relate to any
Goods and/or the carriage of and/or possession of and/or ownership of
and/or title to and/or insurance of and/or warehousing of and/or any other
dealing in or with any Goods.
"DORMANT COMPANY" means (a) a company which (i) does not trade (whether for
its own account or for that of another), (ii) in the case of any company
incorporated under the Companies ▇▇▇ ▇▇▇▇, does not carry out any
transactions which would require it to make entries into its accounting
records in accordance with Section 221 of that Act and (iii) does not hold
or own (whether legally or beneficially) any material assets or property or
owe or have outstanding any material liabilities and (b) Sheffield
Forgemaster Share Trustees Limited and Sheffield Forgemaster Trustees
Limited if and for so long as they do not beneficially hold or own any
material assets or property.
"DORMANT SUBSIDIARY" means the Subsidiaries of the Company identified in
Part III of Schedule1.
"ELIGIBLE RECEIVABLES" means, at any time, any Receivables at such time
which are evidenced by an invoice rendered by a Facility Company to the
relevant account debtors and which are not Ineligible Receivables.
"ELIGIBLE STOCK" means all Stock which is not Ineligible Stock.
"END DATE" in relation to an L/C means the earlier of the expiry date of
such L/C and the date on which the L/C is drawn in full.
"EQUIPMENT" means equipment, machinery, computers and computer hardware and
software (whether owned or licensed), vehicles, tools, furniture and
fixtures and all
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attachments, accessories and property now or in future relating to them or
used in connection with them and replacements and substitutions for them.
"EQUIPMENT VALUATION" means a valuation of Equipment carried out by an
appraiser appointed by Burdale on the basis of estimated restricted
realisation price.
"EVENT OF DEFAULT" means any of the events specified in Clause 16.1.
"EXCHANGE RATE" means the prevailing spot rate of exchange of such bank as
Burdale may select for the purpose, at or around 11.00 a.m. on the date on
which any conversion of currency is to be made under this Agreement.
"FACILITIES" means the Receivables Finance Facility and the Revolving
Credit Facility.
"FACILITY COMPANY" means each company (if any) identified as a Facility
Company in Part I of Schedule 1 and each Additional Facility Company.
"FACILITY LIMIT" means L25,000,000.
"FINAL REPAYMENT DATE" means the third anniversary of today's date.
"FINANCE DOCUMENTS" means this Agreement, the Security Documents, all other
agreements, documents and instruments at any time executed in favour of
and/or delivered by any Obligor to Burdale and/or designated as a Finance
Document by Burdale and the Company.
"FINANCIAL INDEBTEDNESS" means any indebtedness for or in respect of:
(a) moneys borrowed;
(b) any amount raised by acceptance under any acceptance credit facility;
(c) any amount raised pursuant to any note purchase facility or the issue
of bonds, notes, debentures, loan stock or any similar instrument;
(d) the amount of any liability in respect of any lease or hire purchase
contract which would, in accordance with GAAP, be treated as a finance
or capital lease;
(e) receivables sold or discounted (other than any receivables to the
extent they are sold on a non-recourse basis);
(f) any amount raised under any other transaction (including any forward
sale or purchase agreement) having the commercial effect of a
borrowing;
(g) any derivative transaction entered into in connection with protection
against or benefit from fluctuation in any rate or price (and, when
calculating the value of any derivative transaction, only the marked
to market value shall be taken into account);
(h) any counter-indemnity obligation in respect of a guarantee, indemnity,
bond, standby or documentary letter of credit or any other instrument
issued by a bank or financial institution; and
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(i) the amount of any liability in respect of any guarantee or indemnity
for any of the items referred to in paragraphs (a) to (h) above.
"FOREIGN CURRENCY" means any currency other than Sterling which is freely
available and transferable.
"FOREX EXPOSURE" in relation to any unmatured Forex Transaction means the
Forex Percentage of such transaction and in relation to the Forex L/C means
the Forex Percentage of the face amount of the Forex L/C.
"FOREX FACILITY" is defined in Clause 2.
"FOREX L/C" means the L/C issued or to be issued as a Utilisation of the
Forex Facility in favour of RBS in respect of foreign exchange transactions
entered into by RBS prior to today's date on behalf of a Facility Company.
"FOREX LIMIT" means L7,500,000.
"FOREX PERCENTAGE" means:
(a) in relation to Forex Transactions with a maturity of six months or
less:
(i) 10% in relation to euros and United States Dollars; and
(ii) 15% in relation to all other currencies;
(b) in relation to Forex Transactions with a maturity of greater than six
months:
(i) 15% in relation to euros and United States Dollars; and
(ii) 20% in relation to all other currencies,
or in each case, such higher percentage determined by Burdale having regard
to the nature of the currencies involved in any Forex Transaction.
"FOREX REQUEST" means a request for a Utilisation of the Forex Facility for
the sale or purchase of a Foreign Currency substantially in the form set
out in Part IV of Schedule 3.
"FOREX TRANSACTION" means a foreign exchange transaction entered into as a
Utilisation of the Forex Facility.
"GAAP" means generally accepted accounting principles in the United
Kingdom.
"GOODS" means all Stock, produce, inventory and/or other goods which are
the subject of a purchase by a Facility Company and in respect of which any
L/C has been issued.
"GUARANTOR" means each company (if any) identified as a Guarantor in Part
II of Schedule 1 and each Additional Guarantor.
"HOLDING COMPANY" means, in relation to a company or a corporation, any
other company or corporation in respect of which it is a Subsidiary.
"INELIGIBLE RECEIVABLES" means any Receivable:
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(a) which does not arise from the actual and bona fide sale and delivery
of goods by the relevant Facility Company or rendering of services by
the relevant Facility Company in the ordinary course of its business
which transactions are completed in accordance with the terms and
provisions contained in any documents relating to such transactions;
(b) which remains fully or partly unpaid after its Maturity Date or such
longer period as may be agreed by Burdale;
(c) owing by a single account debtor if Receivables representing 50% or
more of the aggregate balance owing by such account debtor to the
Facility Companies are not Eligible Receivables by reason of the
operation of paragraph (b) above;
(d) with respect to which the account debtor is a director, officer,
employee or Affiliate of any Obligor;
(e) with respect to which the account debtor has or has asserted a
counterclaim or has a right of set off, to the extent of such
counterclaim or set off;
(f) as to which performance has not been completed by the relevant
Facility Company or as to which all goods and services in connection
with such Receivable have not been delivered to or performed for the
account debtor or which has not been invoiced or is not fully
assignable;
(g) with respect to which the account debtor is the subject of any
bankruptcy or insolvency proceeding in any jurisdiction or has made an
assignment for the benefit of creditors or whose assets have been
conveyed to a receiver, administrator, trustee or other insolvency
official;
(h) with respect to which the account debtor's obligation to pay the
Receivable is conditional upon the account debtor's approval or is
otherwise subject to any repurchase obligation or right of return, as
with sales made on a ▇▇▇▇-and-hold, guaranteed sale, sale-and-return,
sale on approval (except with respect to Receivables in connection
with which account debtors are entitled to return goods on the basis
of the quality of those goods) or consignment basis;
(i) owed by an account debtor incorporated or resident outside the United
Kingdom, unless such Receivable is subject to valid and enforceable
credit insurance payable to Burdale issued by an insurer on terms and
in an amount acceptable to Burdale as determined by it in good faith
and the aggregate invoice values owed by that relevant account debtor
are within the insured limit;
(j) owed by an account debtor whose total indebtedness to the Facility
Companies exceeds any credit limit set by Burdale from time to time
with respect to that account debtor to the extent such Receivable
breaches that credit limit provided that Burdale will act reasonably
in reducing any credit limits and provided that any reduction in the
credit limit as to a particular account debtor will not cause any
Receivables owing by that account debtor as of the date of such
reduction not to qualify as Eligible Receivables;
(k) where there are proceedings or actions which are threatened or pending
against the account debtors with respect to such Receivables which
would
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result in any material adverse change in any such account debtor's
financial condition;
(l) where there are facts, events or occurrences which would impair the
validity, enforceability or collectability of that Receivable or of
reducing the amount payable or delaying payment of that Receivable.
"INELIGIBLE STOCK" means, at any time, Stock which:
(a) is obsolete, slow-moving, not in good condition or not currently
usable or saleable in the ordinary course of a Facility Company's
business;
(b) is held at third party premises but not held subject to Warehouseman
Association standard agreement;
(c) constitutes materials over which Burdale does not have a valid first
ranking fixed or floating charge under the Security Documents;
(d) constitutes consumables used in a Facility Company's business or
constitutes packaging or shipping materials;
(e) constitutes returned, damaged or defective materials;
(f) is held by a Facility Company as consignee for a third party;
(g) is not the property of the relevant Facility Company by virtue of
retention of title or Romalpa provisions in favour of any person;
(h) is spare parts or scrap;
(i) is in transit outside property which is owned and controlled by any
Obligor except in cases where they are (i) in transit by a Facility
Company or by a courier on its behalf between such property and the
aggregate value of such Stock does not at any time exceed the sum of
L10,000 or (ii) in transit to a Facility Company and Burdale has in
its possession all originals of the bills of lading or other documents
of title with respect to such Stock and has received all such
agreements as Burdale requires in order to perfect first ranking fixed
or floating security in such Stock and to obtain possession of such
Stock from any third party having possession of the same; or
(j) is determined in good faith by Burdale as being unsuitable for forming
the basis of a lending decision as a result of any change in or
introduction of or change in the interpretation or application of any
law, regulation, treaty or official directive or official request
having the force of law.
"INTEREST RATE" means the aggregate of LIBOR, MLA Cost and the Margin.
"L/Cs" means letters of credit, merchandise purchase or other guarantees
which are from time to time either (a) issued or opened by Burdale for the
account of a Facility Company or (b) with respect to which Burdale has
agreed to indemnify the issuer or guaranteed to the issuer the performance
by a Facility Company of its obligations to such issuer.
"L/C EXPOSURE" in relation to any L/C (other than the Forex L/C) means:
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(a) if the proposed L/C is by way of a letter of credit and for the
purpose of purchasing Eligible Stock:
(i) the face amount of the L/C; LESS
(ii) the Stock Percentage TIMES the cost of such Eligible Stock for
which such L/C was drawn; PLUS
(iii) freight, taxes, duty and other amounts which Burdale estimates
must be paid in connection with such Stock upon arrival and for
delivery to one of the relevant Facility Company's locations for
Eligible Stock within the United Kingdom; and
(b) if the proposed L/C is for any other purpose an amount equal to 100%
of the face amount of such L/C and all other commitments and
obligations made or incurred by Burdale with respect to such L/C.
"L/C LIMIT" means L5,000,000.
"L/C REQUEST" means a request for a Utilisation of the Revolving Credit
Facility by way of the issue of an L/C in substantially the form set out in
Part III of Schedule 3.
"LIBOR" means:
(a) the thirty day LIBOR sterling rate quoted on the first Business Day of
each month in the Financial Times, London edition as conclusively
determined by Burdale; or
(b) (if for any reason the Financial Times, London edition ceases or fails
to quote such a rate) the one month British Banker's Association
Interest Settlement Rate at 11.00 am on the same date; or
(c) (if for any reason the Financial Times, London edition ceases or fails
to quote such a rate and the British Banker's Association Interest
Settlement Rate is not available) Burdale's cost of funds from
whatever source it may reasonably request.
"LOAN" means the principal amount of each borrowing under this Agreement
from the Revolving Credit Facility (including any deemed borrowing pursuant
to Clause 6.6) as reduced by repayment or prepayment from time to time.
"MARGIN" means 2.6% per annum.
"MATERIAL ADVERSE EFFECT" means an effect that results in or causes, or has
a reasonable likelihood of resulting in or causing, a material adverse
change in any of:
(a) the business, performance, operations or properties of the Obligors
taken as a whole; and/or
(b) the legality, validity or enforceability of any Finance Document;
and/or
(c) the perfection or priority of the Security Interests granted to
Burdale under the Finance Documents; and/or
(d) the ability of any Obligor to perform its financial obligations under
any of the Finance Documents.
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"MATURITY DATE" means in respect of any Receivable the Business Day which
is, or immediately succeeds the date which is the earlier of (i) 120 days
after the date of the invoice in respect of such Receivable and (ii) 60
days after the due date for payment in respect of such Receivable.
"MLA COST" means the cost (expressed as a rate per annum) of the London
branch of First Union National Bank (or any other bank from which Burdale
obtains funding for its provision of the Facilities) of complying with the
requirements of the Bank of England and/or the Financial Services Authority
and/or any other applicable regulatory authority in respect of monetary
control, liquidity or otherwise.
"MORTGAGED PROPERTY" means any real property which is from time to time
charged in favour of Burdale by way of a first legal mortgage.
"NET STOCK VALUE" means the net value of Stock as determined by the
relevant Facility Company in accordance with its customary practices and
procedures (as disclosed to Burdale prior to today's date and as the same
may be varied from time to time with Burdale's written consent) and advised
to Burdale from time to time.
"OBLIGORS" means the Facility Companies and the Guarantors.
"OTHER ACCOUNTS" means the bank accounts of the Obligors specified as Other
Accounts in the Debenture and/or such other bank accounts of the Obligors
as Burdale may permit.
"OUTSTANDING PURCHASE PRICE" means the aggregate from time to time of the
Purchase Prices of Receivables paid to the Facility Companies (including
any deemed payment of Purchase Price pursuant to Clause 6.6) in respect of
which Burdale has not received payment from the relevant account debtor or
the relevant Facility Company.
"PROPERTY VALUATION" means a valuation of the Mortgaged Property carried
out by a valuer appointed by Burdale on the basis of estimated restricted
realisation value as defined in the then current Statements of Asset
Valuation and Practice and Guidance Notes issued by the Royal Institution
of Chartered Surveyors.
"PURCHASE COMMISSION" is defined in Clause 8.2.
"PURCHASE DATE" in relation to a Purchased Receivable means the date of
delivery of a Purchase Request by a Facility Company with respect to such
Purchased Receivable.
"PURCHASE PRICE" means the purchase price to be paid by Burdale for
Purchased Receivables being 87% of the face value of each Eligible
Receivable to be purchased under the Receivables Finance Facility less
maximum discounts, credits and allowances of any nature which may be taken
by or granted to any account debtor or other person in connection with such
Eligible Receivable (all as determined by Burdale in accordance with Clause
6.1(c)).
"PURCHASE REQUEST" means a Request for a Utilisation of the Receivables
Finance Facility in substantially the form set out in Part I of Schedule 3.
"PURCHASED RECEIVABLE" means a Receivable purchased by Burdale from a
Facility Company in accordance with the terms of this Agreement.
"RBS" means The Royal Bank of Scotland plc.
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"RECEIVABLE" means, at any time, the aggregate present and future
obligations of an account debtor of a Facility Company for the payment of
money to such Facility Company at such time together with all connected
rights, claims, deposits and payments.
"RECEIVABLES FINANCE FACILITY" is defined in Clause 2.
"RECEIVABLES LIMIT" means L25,000,000.
"REQUEST" means a request substantially in the form set out in the relevant
Part of Schedule 3 for a Utilisation of one of the Facilities.
"RESERVES" is defined in Clause 5.5.
"REVOLVING CREDIT FACILITY" is defined in Clause 2.
"REVOLVING CREDIT LIMIT" means L10,000,000.
"SECURITY DOCUMENTS" means the Debenture, the Standard Security and any
other guarantee or security documents executed in favour of Burdale from
time to time in relation to the obligations or indebtedness of the Obligors
(or any of them).
"SECURITY INTEREST" means a mortgage, charge, pledge, lien or other
security interest securing any obligation of any person, or any other
agreement or arrangement having similar effect.
"STANDARD SECURITY" means the standard security executed or to be executed
by Sheffield Forgemasters Rolls Limited in favour of Burdale.
"STERLING" and "L" means the lawful currency for the time being of the
United Kingdom.
"STOCK" means each Facility Company's stock and inventory at any time.
"STOCK PERCENTAGE" means 65%.
"SUBSIDIARY" means a subsidiary within the meaning of Section 736 of the
Companies ▇▇▇ ▇▇▇▇.
"TAX" means any tax, levy, impost, duty or other charge or withholding of a
similar nature (including any penalty or interest payable in connection
with any failure to pay or delay in paying the same).
"TAX CREDIT" means a credit against, relief or remission for, or repayment
of any Tax.
"TAX DEDUCTION" means a deduction or withholding for or on account of Tax
from a payment under the Finance Documents.
"TAX PAYMENT" means an increased payment made by an Obligor to Burdale
under Clause 10.1(c) or 10.2(a).
"TOTAL RECEIVABLES AVAILABILITY" means, at any time, 87% of the face value
of the Eligible Receivables less maximum discounts, credits and allowances
of any nature which may be taken by or granted to any account debtor or any
other person in connection with the Eligible Receivables at such time.
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"TOTAL STOCK AVAILABILITY" means, at any time, the Stock Percentage of the
Net Stock Value of Eligible Stock at such time.
"UTILISATION" means a utilisation of a Facility under this Agreement (with
the delivery of a Purchase Request and the payment of Purchase Price by
Burdale pursuant to a Cash Request constituting separate Utilisations of
the Receivables Finance Facility).
"UTILISATION DATE" in relation to a Utilisation means the date on which
such Utilisation is made (being in relation to any Utilisation of the
Receivables Finance Facility, both the Purchase Date and the date on which
any payment of Purchase Price is made to a Facility Company pursuant to a
Cash Request).
"VAT" means value added tax as provided for in the Value Added Tax ▇▇▇ ▇▇▇▇
and any other tax of a similar nature.
1.2 CONSTRUCTION
(a) Any reference in this Agreement to:
(i) "ASSETS" includes present and future properties, revenues and
rights of every description;
(ii) an "AUTHORISATION" means an authorisation, consent, approval,
licence, resolution, filing or registration;
(iii) a "FINANCE DOCUMENT" or any other agreement or instrument is a
reference to that Finance Document or other agreement or
instrument as amended or novated;
(iv) "INDEBTEDNESS" includes any obligation (whether incurred as
principal or as surety) for the payment or repayment of money,
whether present or future, actual or contingent;
(v) a "PERSON" includes any person, firm, company, corporation,
government, state or agency of a state or any association, trust
or partnership (whether or not having separate legal personality)
or two or more of the foregoing;
(vi) a "REGULATION" includes any regulation, rule, official directive,
request or guideline (whether or not having the force of law) of
any governmental, intergovernmental or supranational body,
agency, department or regulatory, self-regulatory or other
authority or organisation;
(vii) a provision of law is a reference to that provision as amended
or re-enacted;
(viii) words importing the singular shall include the plural and vice
versa; and
(ix) unless a contrary indication appears, a time of day is a
reference to London time.
(b) Clause and Schedule headings are for ease of reference only.
(c) A Default (other than an Event of Default) is "CONTINUING" if it has
not been remedied or waived and an Event of Default is "CONTINUING" if
it has not been waived.
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(d) If at any time there are no persons who are Guarantors, the term
"OBLIGORS" shall be construed, whilst such circumstance is continuing,
as a reference solely to the Facility Companies and if at any time the
Company is the only Facility Company the references in this Agreement
to "FACILITY COMPANY" shall, whilst such circumstance is continuing,
be construed accordingly.
(e) A person who is not party to this Agreement has no right under the
Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ to enforce any term of
this Agreement but this does not affect any right or remedy of a third
party which exists or is available apart from the Contracts (Rights of
Third Parties) ▇▇▇ ▇▇▇▇.
2. FACILITIES
Subject to the terms of this Agreement Burdale agrees to make available the
following facilities to the Facility Companies:
(a) a Receivables Finance Facility pursuant to which Burdale will from
time to time during the Availability Period purchase Receivables from
the Facility Companies (the "RECEIVABLES FINANCE FACILITY");
(b) a revolving credit facility pursuant to which Burdale will during the
Availability Period (i) make Loans to the Facility Companies and (ii)
issue, or procure the issue of, L/Cs for the account of the Facility
Companies (the "REVOLVING CREDIT FACILITY");
(c) a foreign exchange facility pursuant to which Burdale will during the
Availability Period buy or sell Foreign Currency spot and/or for
delivery at a future date on behalf of the Facility Companies and/or
issue the Forex L/C in favour of RBS (the "FOREX FACILITY").
3. PURPOSE
Each Facility Company will use the Facilities only for its general
operating, working capital and other proper corporate purposes and always
in a manner which is not inconsistent with the Finance Documents including,
without limitation:
(a) a repayment of an amount not exceeding L3,540,371.94 (or its
equivalent in other currencies) of intercompany indebtedness owed by
the Obligors to certain of their Affiliates in the United States of
America (such repayment to be made out of the proceeds of the first
Utilisation of the Facilities); and
(b) the making of loans to Affiliates to the extent permitted by Clause
13.13.
Without affecting the obligations of the Facility Companies in any way,
Burdale is not obliged to monitor or verify the application of the
Facilities.
4. CONDITIONS PRECEDENT
4.1 INITIAL CONDITIONS
No Request may be delivered unless Burdale shall have received all of the
documents and evidence specified in Part I of Schedule 2 in a form and
substance satisfactory to it.
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4.2 FURTHER CONDITIONS
The obligations of Burdale in respect of any Utilisation are subject to the
further conditions precedent that both on the date of the relevant Request
and the proposed Utilisation Date:
(a) the representations and warranties set out in Clause 12 to be repeated
on such dates are true and correct; and
(b) no Default has occurred and remains outstanding or would result from
the making of such Utilisation.
5. RESTRICTIONS ON UTILISATIONS
5.1 LOANS
No Cash Request may be delivered which would involve the drawing of a Loan
unless at the time of delivery either (a) the Receivables Finance Facility
is or would be following the delivery of such Cash Request being utilised
up to the Receivables Limit or (b) the Facility Companies have no
Receivables with which to utilise the Receivables Finance Facility.
5.2 LETTERS OF CREDIT
No Request may be delivered for an L/C to be issued pursuant to the
Revolving Credit Facility unless and until the form of L/C has been
approved by Burdale, such approval not to be unreasonably withheld or
delayed, the relevant issuer and the proposed beneficiary of such L/C.
5.3 OVERALL LIMIT
The aggregate amount of:
(a) all Loans;
(b) Outstanding Purchase Price;
(c) all L/C Exposures; and
(d) all Forex Exposures,
shall not at any time exceed the Facility Limit.
5.4 SPECIFIC LIMITS
(a) RECEIVABLES FINANCE FACILITY: The Outstanding Purchase Price shall not
at any time exceed the Receivables Limit.
(b) FOREX FIXED LIMIT: The aggregate amount of all Forex Exposures shall
not at any time exceed the Forex Limit.
(c) FOREX AVAILABILITY: In the event that the aggregate amount of all
Forex Exposures at any time exceeds the lesser of
(i) L3,000,000; and
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(ii) 37.5% of the aggregate of the then most recent Property Valuation
and the then most recent Equipment Valuation,
any such excess (the "EXCESS FOREX EXPOSURE") shall be deemed to be a
Utilisation of the Revolving Credit Facility.
(d) REVOLVING CREDIT FACILITY: The aggregate amount of:
(i) all Loans;
(ii) all L/C Exposures; and
(iii) the Excess Forex Exposure,
shall not at any time exceed the Revolving Credit Limit.
(e) L/C UTILISATIONS: The aggregate amount of all L/C Exposures shall not
at any time exceed the L/C Limit.
5.5 AVAILABILITY
The aggregate amount of:
(a) Outstanding Purchase Price;
(b) all Loans;
(c) all L/C Exposures; and
(d) the Excess Forex Exposure,
shall not at any time exceed the sum of:
(i) the Total Receivables Availability; PLUS
(ii) the Total Stock Availability; LESS
(iii) the amount of Reserves,
at such time.
For the purposes of this Clause 5.5, "RESERVES" means reserves established
by Burdale:
(a) from time to time to reflect the full amount of the liabilities at
such time which have a right imposed to provide for payment ranking or
capable of ranking senior to or pari passu with the liabilities of the
Obligors under the Finance Documents and/or having the benefit of any
Security Interest over the assets of any Obligor ranking or capable of
ranking senior to or pari passu with the Security Interests granted to
Burdale under the Finance Documents;
(b) from time to time to reflect Burdale's good faith belief that any
report or financial information provided by or on behalf of any
Obligor under the Finance Documents is or may have been incomplete,
inaccurate or misleading in any material respect;
13
(c) in an amount equal to the amount by which the Dilution Rate for the
most recently ended month exceeds 2%; and
(d) in an amount equal to the amount (if any) by which the aggregate of
the then most recent Property Valuation and Equipment Valuation is
less than L8,000,000.
5.6 PROHIBITION
No Utilisation may be made which would cause the provisions of this Clause
5 to be breached.
5.7 PERCENTAGES
Burdale may from time to time, following prior consultation with the
Company:
(a) reduce the Purchase Price to the extent that the Dilution Rate has
increased;
(b) reduce the Total Stock Availability (or any component of it) to the
extent that:
(i) the number of days of the turnover of the Stock for any period
has changed in any material respect; or
(ii) the estimated restricted realisation value of the Eligible Stock,
or any category of Eligible Stock, has decreased; or
(iii) the nature and quality of the Stock has deteriorated; and
(iv) there is any change in seasonality with respect to Stock and
patterns of sales after today's date; or
(v) there is any reduction in the Facility Limit pursuant to Clause
7.6.
6. UTILISATION OF FACILITIES
6.1 AVAILABILITY OF RECEIVABLES FINANCE FACILITY
(a) Subject to the terms of this Agreement, each Facility Company shall
offer to sell its Receivables to Burdale by delivering to Burdale from
time to time duly completed Purchase Requests (together with all deeds
and documents referred to in such Purchase Request), delivery of which
shall oblige such Facility Company to sell the Receivables stated in
such Purchase Request upon the terms and subject to the conditions of
this Agreement.
(b) A Purchase Request will not be regarded as having been duly completed
unless it is in substantially the form set out in Part I of Schedule
3.
(c) As soon as reasonably practicable following delivery of a Purchase
Request, Burdale (acting reasonably) shall determine the Purchase
Price for the Receivables specified in such Purchase Request and will,
upon being requested by the relevant Facility Company, advise such
Facility Company of such determination.
6.2 CASH UTILISATIONS
(a) Subject to the terms of this Agreement, each Facility Company may from
time
14
to time request that Burdale pay sums to such Facility Company of up
to the aggregate of (i) the amount of any unpaid Purchase Price and
(ii) the amount available for drawing by way of Loan, by delivering a
duly completed Cash Request to Burdale not later than 11.00 a.m. on
the proposed Utilisation Date for such payment.
(b) A Cash Request will not be regarded as having been duly completed
unless it is in substantially the form set out in Part II of Schedule
3 and, in particular, specifies:
(i) the proposed Utilisation Date, being a Business Day falling
during the Availability Period;
(ii) the amount of the sum to be paid by Burdale which must be less
than or equal to the aggregate of the amounts specified in Clause
6.2(a); and
(iii) if not already notified to Burdale, the details of the Other
Account into which the payment is to be made on the Utilisation
Date.
(c) Payments made by Burdale pursuant to a Cash Request shall be deemed to
be first payments of any unpaid Purchase Price to the full extent of
such unpaid Purchase Price and second, to the extent of any surplus,
to be the drawing of a Loan.
(d) Burdale's obligation to pay the Purchase Price of any Receivable (or
any unpaid portion of it as the case may be) shall be terminated on
the earlier of the Actual Day of Payment and the Maturity Date of such
Receivable.
(e) To the extent that any payments made by Burdale pursuant to a Cash
Request to a Facility Company (the "DEBTOR COMPANY") represent payment
of Purchase Price in relation to the Purchased Receivables of another
Facility Company (the "CREDITOR COMPANY") then (without double
counting with the provisions of Clause 7.2(e)(ii)) the Creditor
Company shall be deemed to have made a loan to the Debtor Company in
an amount equal to the amount of such payment by Burdale (an
"INTERCOMPANY LOAN"). All Intercompany Loans shall bear interest at
such rates as the relevant Creditor Companies may agree with the
relevant Debtor Companies and all principal and interest on any
Intercompany Loan shall be payable on demand.
6.3 L/C UTILISATIONS
(a) Subject to the terms of this Agreement, a Facility Company may request
the issue of an L/C as a Utilisation of the Revolving Credit Facility
or the issue of the Forex L/C as a Utilisation of the Forex Facility
by delivering a duly completed L/C Request to Burdale not later than
11.00 a.m. on the proposed Utilisation Date for that L/C.
(b) An L/C Request will not be regarded as having been duly completed
unless it is substantially in the form attached in Part III of
Schedule 3 and, in particular, specifies:
(i) the proposed Utilisation Date, being a Business Day falling
during the Availability Period;
15
(ii) the amount of the L/C required, the L/C Exposure of which must
(save in the case of the Forex L/C) be equal to or less than the
undrawn/unutilised amount of the Revolving Credit Facility and
(in all cases) within the relevant Availability Limits as at the
proposed Utilisation Date;
(iii) if not already notified to Burdale, the details of the
beneficiary, payee or addressee of such L/C.
6.4 GENERAL PROVISIONS REGARDING L/Cs
(a) Nothing in this Agreement shall be deemed or construed to grant any
Facility Company any right or authority to pledge the credit of
Burdale in any manner. Burdale shall have no liability of any kind
with respect to any L/C provided by an issuer other than Burdale
unless Burdale has duly executed and delivered to such issuer the
application or a guarantee or indemnification in writing with respect
to such L/C. Each Facility Company shall be bound by an interpretation
made in good faith by Burdale, or any other issuer or correspondent
under or in connection with any L/C or any documents, drafts or
acceptances in relation to any L/C, notwithstanding that such
interpretation may be inconsistent with any instructions of any
Facility Company. Burdale shall have the sole and exclusive right and
authority to, and no Facility Company shall:
(i) at any time an Event of Default exists or has occurred and is
continuing:
(1) approve or resolve any questions of non-compliance of
documents;
(2) give any instructions as to acceptance or rejection of any
documents or goods; or
(3) execute any and all applications for steamship or airway
guarantees, indemnities or delivery orders and at all times;
(ii) at any time:
(1) grant any extensions of the maturity of, time of payment
for, or time of presentation of, any drafts, acceptances, or
documents; and
(2) agree to any amendments, renewals, extensions,
modifications, changes or cancellations of any of the terms
or conditions of any of the applications, L/Cs, or
documents, drafts or acceptances in relation to any L/C or
any letters of credit provided as security to Burdale.
Burdale may take such actions either in its own name or in
the relevant Facility Company's name.
(b) Any rights, remedies, duties or obligations granted or undertaken by
any Facility Company to any issuer or correspondent in any application
for any L/C, or any other agreement in favour of any issuer or
correspondence relating to any L/C, shall be deemed to have been
granted or undertaken by such Facility Company to Burdale. Any duties
or obligations undertaken by Burdale to any issuer or correspondence
in any application for any L/C, or any other agreement by Burdale in
favour of any issuer or correspondence relating to
16
any L/C, shall be deemed to have been undertaken by the relevant
Facility Company to Burdale and to apply in all respects to such
Facility Company.
(c) None of Burdale, any L/C issuer (or any of their respective
correspondents) or any advising, negotiating or paying bank with
respect to any L/C shall be responsible in any way for:
(i) the performance by any beneficiary under any L/C of that
beneficiary's obligations to the relevant Facility Company; or
(ii) the form, sufficiency, correctness, genuineness, authority of any
person signing or the legal effect of any documents called for
under any L/C if such documents appear on their face to be in
order.
6.5 FOREX UTILISATIONS
(a) Subject to the terms of this Agreement, a Facility Company may request
a Utilisation of the Forex Facility by way of the sale or purchase of
Foreign Currency by delivering a duly completed Forex Request to
Burdale not later than 11.00 a.m. on the proposed date of the contract
for the sale or purchase of Foreign Currency.
(b) A Forex Request will not be regarded as having been duly completed
unless it is in substantially the form set out in Part IV of Schedule
3 and, in particular, specifies:
(i) the proposed date of effect of the sale or purchase of Foreign
Currency being a Business Day falling during the Availability
Period; and
(ii) the value of the contract for the sale or purchase of Foreign
Currency required and the Foreign Currency required to be
purchased which must be such that the Forex Exposure with respect
to such Utilisation when aggregated with all other Forex
Exposures is equal to or less than the Forex Limit and within the
relevant Availability Limits as at the proposed Utilisation Date.
(c) Save as otherwise expressly provided in this Agreement, all of the
terms of this Agreement relating to L/Cs shall apply to the Forex L/C.
6.6 DEEMED UTILISATIONS
All payments made by Burdale:
(a) in accordance with the terms of any L/C or any guarantee or indemnity
given by Burdale to the issuer of any L/C (as the case may be); and
(b) on the maturity of any Forex Transaction,
shall be deemed to be a payment to the relevant Facility Company in an
amount equal to such payment, as if such Facility Company had lodged a Cash
Request for such amount and subject to the provisions of this Agreement
with respect to Utilisations of the Receivables Finance Facility and/or the
Revolving Credit Facility (including, without limitation, as to interest,
purchase commission and repayment).
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7. REPAYMENT AND PREPAYMENT
7.1 RECEIVABLES FINANCE FACILITY
(a) If in relation to a Purchased Receivable Burdale determines on the
Maturity Date in respect of such Purchased Receivable that it has not
received payment in accordance with Clause 9.1 of the full amount of
such Purchased Receivable, the relevant Facility Company shall, on
demand by Burdale pay to Burdale an amount equal to the Outstanding
Purchase Price of such Purchased Receivable for which payment has not
been received PROVIDED THAT this provision shall not restrict (nor
oblige) Burdale in any way in or from pursuing and obtaining payment
in respect of such Purchased Receivable from the account debtors or
otherwise (which payment shall be made into a Blocked Account) and
each Facility Company undertakes that it will do all such reasonable
acts or things necessary or desirable to help Burdale in pursuing and
obtaining such payment.
(b) Burdale shall be entitled to deduct from payments made by account
debtors and/or the Facility Companies into a Blocked Account in
respect of Purchased Receivables the then Outstanding Purchase Price
in respect of such Purchased Receivables and the balance remaining
after such deduction shall be applied in accordance with Clause 7.2.
7.2 OTHER UTILISATIONS
Subject as provided below all amounts standing to the credit of the Blocked
Accounts from time to time following the deductions referred to in Clause
7.1(b) shall be applied as follows:
(a) FIRST in repayment of the outstanding principal amount of any Loans;
(b) SECOND in payment of any fees, costs and expenses due from any Obligor
to Burdale under the Finance Documents;
(c) THIRD in payment of (i) all amounts of interest due on the Loans
(including any deemed borrowing pursuant to Clause 6.6) and (ii) all
Purchase Commission (or in making provision for Purchase Commission
which will fall due for payment on the last Business Day of the
current calendar month);
(d) FOURTH in or towards satisfaction of any other payment obligation of
any Obligor under the Finance Documents; and
(e) FIFTH to the relevant Facility Company by way of payment into such
Other Account as the relevant Facility Company may specify to Burdale
in writing from time to time.
PROVIDED THAT:
(i) notwithstanding the above, at all times whilst an Event of
Default is continuing, amounts standing to the credit of a
Blocked Account shall be applied to such of the liabilities of
the Obligors under the Finance Documents and in such order as
Burdale may in its absolute discretion determine; and
(ii) to the extent that any amount standing to the credit of one
Facility Company's Blocked Account is applied to discharge the
liabilities of
18
another Obligor pursuant to Clause 7.1(b) or this Clause 7.2 then
(without double counting) the provisions of Clause 6.2(e) shall
apply to such application mutatis mutandis.
7.3 REUTILISATION
(a) RECEIVABLES FINANCE FACILITY: Subject to the terms of this Agreement,
all amounts of Outstanding Purchase Price recovered and paid to
Burdale, may be reutilised as Utilisations of the Receivables Finance
Facility.
(b) REVOLVING CREDIT FACILITY: Subject to the terms of this Agreement, all
Loans repaid and all amounts recovered and paid to Burdale in relation
to L/Cs, may be redrawn or reutilised as Utilisations of the Revolving
Credit Facility.
7.4 PREPAYMENT
If at any time the outstanding Utilisations or any part of them cause any
Availability Limit to be exceeded then the Company will immediately repay
or procure repayment of such amount of the Loans together with cash
collateral in respect of Outstanding Purchase Price and/or any contingent
obligation of Burdale in relation to any L/C or other Utilisation together
with interest on the Loans, to the extent required to ensure compliance
with that Availability Limit and, until such time as that Availability
Limit is no longer breached, no further Utilisations may be requested
(including, for the avoidance of doubt, pursuant to a Cash Request) or
will, at Burdale's option, be made or issued.
7.5 ILLEGALITY
If it becomes unlawful in any jurisdiction for Burdale to make available or
maintain the Facilities (or any of them) or to give effect to its
obligations under the Finance Documents, Burdale may give seven Business
Days written notice to that effect to the Company whereupon the Facilities
will be cancelled and all the provisions of this Agreement will apply as if
the cancellations or terminations had been a reduction of the Facility
Limit to zero pursuant to Clause 7.6.
7.6 REDUCTION OF FACILITY LIMIT
At the request of the Company by giving not less than ten Business Day's
prior written notice to Burdale, the Facility Limit may from time to time
be reduced or extinguished provided that on or before the effective date
for such reduction the Company shall pay (or procure payment) to Burdale
of:
(a) such amount as may be necessary in prepayment of the Loans and/or as
cash collateral for Outstanding Purchase Price and/or Burdale's
contingent obligations under any issued L/C or unmatured Forex
Transaction to ensure that the Facility Companies remain in compliance
with the Availability Limits (as adjusted to take account of such
amendments pursuant to Clause 5.7); and
(b) a fee calculated by applying to the amount of the reduction the
applicable percentage set out in column (2) below:
19
(1) (2)
DATE OF REDUCTION APPLICABLE PERCENTAGE
On or before the first anniversary of the 2%
first Utilisation Date
After the first anniversary of first 1%
Utilisation Date
Any exercise by Burdale of its rights under Clause 16.2(b) and/or 16.3
and/or the operation of Clause 7.5 shall be deemed for the purposes of
paragraph (b) above to be a reduction in the Facility Limit in an amount
equal to the amount of the Facility or Facilities so cancelled.
If the Facility Limit is reduced to nil and (either at the time or later)
the Outstanding Purchase Price is nil and there is no outstanding
Utilisation of the Facilities, this Agreement shall be deemed terminated
but without prejudice to all liabilities of either party (including fees,
commission, interest and costs) existing immediately prior to such
termination.
7.7 FINAL REPAYMENT
The Company will, on the Final Repayment Date, pay (or procure payment) to
Burdale in full all outstanding and unpaid liabilities under the Finance
Documents (whether by way of principal, interest, commission, fees, costs,
expenses or otherwise) and shall pay to Burdale such amount as is necessary
to provide full cash collateral for Outstanding Purchase Price and any
contingent obligations which Burdale may have in respect of any L/C, Forex
Transaction or other outstanding Utilisation. If the amounts so paid are
received by Burdale later than 1.00 p.m. on the Final Repayment Date then
the Company will pay interest on such amounts to Burdale at the Default
Rate until payment has been made in full.
7.8 CASH COLLATERAL
If under this Agreement any Facility Company is required to provide and
does provide cash collateral for any contingent liability, such cash
collateral shall be held by Burdale in an interest bearing account for
application against such contingent liability, provided that any sum
remaining after settling such payments shall be applied first in settlement
of any other amounts then due and payable to Burdale under the Finance
Documents and any balance shall be promptly repaid to the relevant Facility
Company or other person entitled to the balance.
8. INTEREST AND COMMISSION
8.1 INTEREST
(a) Each Facility Company will pay Burdale interest on each Loan made to
it by Burdale at the Interest Rate.
(b) Except as otherwise provided in this Agreement, accrued interest on
each Loan shall be paid by the relevant Facility Company in arrear on
the last Business Day of each month and on the Final Repayment Date.
All interest accruing on or after the date of any Event of Default or
the Final Repayment Date shall be payable on demand.
20
(c) Interest will be calculated on the basis of a 365 day year and actual
days elapsed and will accrue and be calculated on a daily basis.
8.2 PURCHASE COMMISSION
Each Facility Company shall pay to Burdale commission in respect of each of
its Purchased Receivables at a rate equivalent to the Interest Rate applied
to the Outstanding Purchase Price for such Receivable from the date on
which Burdale paid such Purchase Price to a Facility Company down to the
Actual Date of Payment (the "PURCHASE COMMISSION"). Burdale shall calculate
the Purchase Commission on a daily basis and it shall be paid by the
relevant Facility Company monthly in arrears on the last Business Day of
each month.
8.3 DEFAULT INTEREST
(a) Upon the occurrence of an Event of Default and whilst the same is
continuing, all amounts outstanding under this Agreement shall bear
interest (both before and after judgment) at the Default Rate.
(b) Interest at the Default Rate will be compounded at the end of each
period designated by Burdale and will be determined by Burdale on the
first Business Day of each such period.
9. COLLECTION OF RECEIVABLES
9.1 FLOW OF FUNDS
Subject to Clause 9.2, each Facility Company undertakes that during the
period commencing on the date of this Agreement and ending when all its
liabilities under the Finance Documents have been discharged in full and
Burdale is under no further obligation under any of the Finance Documents:
(a) such Facility Company will collect as agent and trustee for Burdale
all Receivables and immediately pay (or procure that payment is made)
all amounts due in respect of each Receivable into a Blocked Account,
provided however that until payment into a Blocked Account it will
hold all money so received upon trust for Burdale and will not
commingle in any Charged Account any monies which are not Receivables
or which are not payable to Burdale;
(b) without prejudice to its obligations under Clause 13.14, in the event
that any account debtor makes a payment in respect of Receivables into
another Charged Account or other account which is not a Blocked
Account, such Facility Company will ensure that the amounts
representing such payment are promptly transferred into a Blocked
Account and will immediately direct the relevant account debtor to
make all future payments to a Blocked Account; and
(c) all the transfers and collections referred to in paragraphs (a) and
(b) above shall be carried out daily prior to the occurrence of any
Default and thereafter at such intervals as Burdale may, at its
discretion, specify to the Company.
9.2 FAILURE OF DEBENTURE
In the event that the Debenture is not, at any time, effective or is not in
full force and effect in respect of any Charged Account, each Facility
Company will (unless
21
otherwise directed by Burdale and without prejudice to Burdale's rights and
remedies under the Finance Documents), for so long as the Debenture is
ineffective or not in full force and effect and ending on the date when all
of its liabilities under the Finance Documents have been repaid or
discharged in full and Burdale is under no further obligation under any of
the Finance Documents, collect as agent and trustee for Burdale all
Receivables which would otherwise have been payable into a Blocked Account
and immediately pay (or procure the payment of) all amounts due in respect
of those Receivables directly to such bank account of Burdale as it may
specify for this purpose.
9.3 DECLARATION OF TRUST
If for any reason (including, without limitation, any prohibition or
restriction on assignment contained in any agreement between a Facility
Company and the relevant account debtor), title to any Receivable which is
purchased by Burdale under this Agreement does not pass to Burdale then the
relevant Facility Company shall hold such Receivable on trust for Burdale
and shall collect and deal with such Receivable in accordance with the
terms of Clauses 9.1 and 9.2.
9.4 REIMBURSEMENT
Each Facility Company agrees to reimburse Burdale on demand for any
liability of Burdale to any bank or other person involved in the transfer
of funds to or from any Blocked Account arising out of Burdale's payments
to or indemnification of that bank or person, and this obligation to
reimburse shall survive the termination or non-renewal of this Agreement.
9.5 APPLICATION
For the purposes of calculating the amount of the Loans available to the
Facility Companies, the Receivables Limit and the Forex Limit such payments
will be applied (conditional upon final collection) in satisfaction or
reduction of the relevant Facility Company's liabilities under the Finance
Documents on the Business Day of receipt by Burdale. For the purposes of
calculating interest in respect of the Loans and for calculating any
Purchase Commission or commission in respect of the Forex Transactions,
payments or other funds received by Burdale will be applied (conditional
upon final collection) in satisfaction or reduction of the relevant
Facility Company's liabilities under the Finance Documents one Business Day
following the date of receipt of funds by Burdale.
9.6 BUSINESS DAYS
If any payment under the Finance Documents would otherwise be due on a day
which is not a Business Day, it will be due on the next succeeding Business
Day or, if that Business Day falls in the following month, on the preceding
Business Day.
10. TAX
10.1 TAX GROSS-UP
(a) Each Obligor shall make all payments to be made by it without any Tax
Deduction, unless a Tax Deduction is required by law.
(b) The Company shall promptly upon becoming aware that an Obligor must
make a Tax Deduction (or that there is any change in the rate or the
basis of a
22
Tax Deduction) notify Burdale accordingly.
(c) If a Tax Deduction is required by law to be made by an Obligor the
amount of the payment due from that Obligor shall be increased to an
amount which (after making any Tax Deduction) leaves an amount equal
to the payment which would have been due if no Tax Deduction had been
required.
(d) If an Obligor is required to make a Tax Deduction, that Obligor shall
make that Tax Deduction and any payment required in connection with
that Tax Deduction within the time allowed and in the minimum amount
required by law.
(e) Within thirty days of making either a Tax Deduction or any payment
required in connection with that Tax Deduction, the Obligor making
that Tax Deduction shall deliver to Burdale evidence reasonably
satisfactory to Burdale that the Tax Deduction has been made or (as
applicable) any appropriate payment paid to the relevant taxing
authority.
10.2 TAX INDEMNITY
(a) The Company shall (within three Business Days of demand by Burdale)
pay to Burdale an amount equal to the loss, liability or cost which
Burdale determines will be or has been (directly or indirectly)
suffered for or on account of Tax.
(b) Paragraph (a) above shall not apply with respect to any Tax assessed
on Burdale if that Tax is imposed on or calculated by reference to the
net income received or receivable (but not any sum deemed to be
received or receivable) by Burdale.
10.3 TAX CREDIT
If an Obligor makes a Tax Payment and Burdale determines that:
(a) a Tax Credit is attributable to that Tax Payment; and
(b) it has obtained, utilised and retained that Tax Credit,
Burdale shall pay an amount to the Obligor which Burdale determines will
leave it (after that payment) in the same after-Tax position as it would
have been in had the Tax Payment not been made by the Obligor.
10.4 STAMP TAXES
The Company shall pay and, within three Business Days of demand, indemnify
Burdale against any cost, loss or liability that Burdale incurs in relation
to all stamp duty, registration and other similar Taxes payable in respect
of any Finance Document.
10.5 VALUE ADDED TAX
(a) All consideration payable under a Finance Document by an Obligor to
Burdale shall be deemed to be exclusive of any VAT. If VAT is
chargeable, the Obligor shall pay to Burdale (in addition to and at
the same time as paying the consideration) an amount equal to the
amount of the VAT.
23
(b) Where a Finance Document requires an Obligor to reimburse Burdale for
any costs or expenses, that Obligor shall also at the same time pay
and indemnify Burdale against all VAT incurred by Burdale in respect
of the costs or expenses save to the extent that Burdale is entitled
to repayment or credit in respect of the VAT.
11. INCREASED COSTS
11.1 INCREASED COSTS
(a) Subject to Clause 11.3 the Company shall, within three Business Days
of a demand by Burdale, pay to Burdale the amount of any Increased
Costs incurred by Burdale or any of its Affiliates as a result of (i)
the introduction of or any change in (or in the interpretation or
application of) any law or regulation or (ii) compliance with any law
or regulation made after the date of this Agreement.
(b) In this Agreement "INCREASED COSTS" means:
(i) a reduction in the rate of return from the Facilities (or any of
them) or on Burdale's (or its Affiliate's) overall capital;
(ii) an additional or increased cost; or
(iii) a reduction of any amount due and payable under any Finance
Document,
which is incurred or suffered by Burdale or any of its Affiliates to
the extent that it is attributable to Burdale having entered into this
Agreement or funding or performing its obligations under any Finance
Document.
11.2 INCREASED COST CLAIMS
If Burdale intends to make a claim pursuant to Clause 11.1 it shall notify
the Company of the event giving rise to the claim, and shall, as soon as
practicable after a demand by the Company, provide a certificate confirming
the amount of its Increased Costs.
11.3 EXCEPTIONS
Clause 11.1 does not apply to the extent any Increased Cost is:
(a) attributable to a Tax Deduction required by law to be made by an
Obligor;
(b) compensated for by Clause 10.2 (or would have been compensated for
under Clause 10.2 but was not so compensated solely because the
exclusion in Clause 10.2(b) applied);
(c) compensated for by the payment of MLA Cost; or
(d) attributable to the wilful breach by Burdale or its Affiliates of any
law or regulation.
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12. REPRESENTATIONS AND WARRANTIES
12.1 WARRANTIES
Each Obligor makes the representations and warranties in this Clause 12 to
Burdale on today's date and such representations and warranties will be
deemed repeated by the Obligors on each date:
(a) on which a Request is submitted;
(b) which is a Utilisation Date;
(c) on which any payment of interest or Purchase Commission is due under
the Finance Documents,
as if made with reference to the facts and circumstances existing on such
date.
12.2 STATUS
(a) It is a corporation, duly incorporated and validly existing under the
law of its jurisdiction of incorporation.
(b) It has the power to own its assets and carry on its business as it is
being conducted.
12.3 BINDING OBLIGATIONS
The obligations expressed to be assumed by it in each Finance Document are,
subject to any principles of law affecting creditors' rights generally,
legal, valid, binding and enforceable obligations.
12.4 NON-CONFLICT WITH OTHER OBLIGATIONS
The entry into and performance by it of, and the transactions contemplated
by, the Finance Documents do not and will not conflict with:
(a) any law or regulation applicable to it;
(b) its constitutional documents; or
(c) any agreement or instrument binding upon it or any of its assets.
12.5 POWER AND AUTHORITY
It has the power to enter into, perform and deliver, and has taken all
necessary action to authorise its entry into, performance and delivery of,
the Finance Documents to which it is a party and the transactions
contemplated by those Finance Documents.
12.6 VALIDITY AND ADMISSIBILITY IN EVIDENCE
All authorisations required or desirable:
(a) to enable it lawfully to enter into, exercise its rights and comply
with its obligations in the Finance Documents to which it is a party;
and
25
(b) to make the Finance Documents to which it is a party admissible in
evidence in its jurisdiction of incorporation,
have been obtained or effected and are in full force and effect.
12.7 NO FILING OR STAMP TAXES
Under the law of its jurisdiction of incorporation it is not necessary that
the Finance Documents be filed, recorded or enrolled with any court or
other authority in that jurisdiction or that any stamp, registration or
similar tax be paid on or in relation to the Finance Documents or the
transactions contemplated by the Finance Documents.
12.8 NO DEFAULT
(a) No Event of Default is continuing or might reasonably be expected to
result from the making of any Utilisation.
(b) No other event or circumstance is outstanding which constitutes a
default under any other agreement or instrument which is binding on it
or to which its assets are subject which might have a Material Adverse
Effect.
12.9 PARI PASSU RANKING
Its payment obligations under the Finance Documents rank at least pari
passu with the claims of all its other unsecured and unsubordinated
creditors, except for obligations mandatorily preferred by law applying to
companies generally.
12.10 NO PROCEEDINGS PENDING OR THREATENED
No litigation, arbitration or administrative proceedings of or before any
court, arbitral body or agency which, if adversely determined, might
reasonably be expected to have a Material Adverse Effect have (to the best
of its knowledge and belief) been started or threatened against it or any
of its Subsidiaries.
12.11 MATERIAL DISCLOSURES
All information furnished by or on behalf of any Obligor in writing to
Burdale in connection with the Finance Documents is true and correct in all
material respects as of the date such information is dated or certified and
does not omit any material information and is not misleading. No event or
circumstance has occurred which has or, to the knowledge of the Obligors,
could reasonably be expected to have a Material Adverse Effect which has
not been fully and accurately disclosed to Burdale.
12.12 FINANCIAL STATEMENTS
Its latest audited financial statements (i) have been reported upon by its
auditors without qualification, (ii) have been prepared in accordance with
GAAP and give a true and fair view of the results of its operations and its
assets and liabilities for the relevant period and of the state of its
affairs at the relevant date, and (iii) in particular, accurately disclose
or reserve against all liabilities (actual or contingent), and there has
been no change in its assets, financial condition or prospects since the
date of those financial statements such that it may reasonably be expected
to be unable to perform and comply with any one or more of its material
obligations under any of the Finance Documents.
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12.13 BANK ACCOUNTS
All the accounts maintained or used by any Obligor at any bank or financial
institution as at the date of this Agreement have been included within the
definition of Charged Accounts.
12.14 VALUATION
(a) All information provided by or on behalf of any Obligor to the valuer
for the purposes of any Equipment Valuation or any Property Valuation
is accurate in all material respects and, to the best of its knowledge
and belief after having made all due enquiries, no information has
been omitted by it which would make that information misleading in any
material respect;
(b) To the best of its knowledge and belief and after having made all due
enquiries, there has been no change to the information provided
pursuant to paragraph (a) above between the dates such information was
provided and today's date; and
(c) No information has been withheld by it from any such valuer which to
the best of its knowledge and belief after having made all due
enquiries, may be material.
12.15 DORMANT SUBSIDIARIES
Each of the Dormant Subsidiaries is, as at today's date, a Dormant Company.
13. GENERAL UNDERTAKINGS
13.1 DURATION
The undertakings in this Clause 13 and in Clause 14 remain in force from
the date of this Agreement for so long as any amount is outstanding under
the Finance Documents or Burdale is under any obligation under any Finance
Document.
13.2 AUTHORISATIONS
Each Obligor shall promptly:
(a) obtain, comply with and do all that is necessary to maintain in full
force and effect; and
(b) supply certified copies to Burdale of,
any authorisation required under any law or regulation of its jurisdiction
of incorporation to enable it to perform its obligations under the Finance
Documents and to ensure the legality, validity, enforceability or
admissibility in evidence in its jurisdiction of incorporation of any
Finance Document.
13.3 COMPLIANCE WITH LAWS
Each Obligor shall comply in all respects with all laws to which it may be
subject, if failure so to comply would materially impair its ability to
perform its obligations under the Finance Documents.
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13.4 NEGATIVE PLEDGE
(a) No Obligor shall create or permit to subsist any Security Interest
over any of its assets.
(b) No Obligor shall:
(i) sell, transfer or otherwise dispose of any of its assets on terms
whereby they are or may be leased to or re-acquired by an
Obligor;
(ii) sell, transfer or otherwise dispose of any of its receivables on
recourse terms otherwise than pursuant to the Finance Documents;
(iii) enter into any arrangement under which money or the benefit of a
bank or other account may be applied, set-off or made subject to
a combination of accounts; or
(iv) enter into any other preferential arrangement having a similar
effect,
in circumstances where the arrangement or transaction is entered into
primarily as a method of raising Financial Indebtedness or of
financing the acquisition of an asset.
(c) Paragraphs (a) and (b) above do not apply to:
(i) any lien arising by operation of law and in the ordinary course
of trading;
(ii) any Security Interest in favour of Burdale; or
(iii) any Security Interests arising solely as a result of a title
retention clause in a supply agreement entered into by any
Obligor, or arising under conditional sale or hiring agreements
in respect of goods supplied in the ordinary course of business
13.5 MERGER
No Obligor shall enter into any amalgamation, demerger, merger or corporate
reconstruction.
13.6 CHANGE OF BUSINESS
The Company shall procure that no substantial change is made to the general
nature of the business of the Company or any Obligor from that carried on
at the date of this Agreement.
13.7 DEFAULT
Each Obligor will notify Burdale forthwith upon becoming aware of the
occurrence of any Default and will provide Burdale with full details of any
steps which it is taking, or is considering taking, in order to remedy or
mitigate the effect of the Default.
13.8 DISPOSALS
No Obligor shall enter into a single transaction or series of transactions
(whether related or not) and whether voluntary or involuntary to sell,
lease, transfer or otherwise dispose of any asset save for:
28
(a) the disposal of Stock in the ordinary course of trading; or
(b) the application of cash in the purchase or acquisition of goods and
services in the ordinary course of trading or in any manner not
prohibited by any of the Finance Documents; or
(c) the disposal of obsolete assets where the proceeds of sale (if any)
are paid into a Blocked Account; or
(d) any disposal in respect of which Burdale has given its prior written
consent; or
(e) the disposal of any asset where the higher of market value or
consideration receivable (when aggregated with the higher of market
value or consideration receivable for any other sale, lease, transfer
or other disposal (other than any permitted under paragraphs (a) to
(d) above)) does not exceed L10,000 (or its equivalent in another
currency or currencies) in any financial year and the proceeds of sale
are paid into a Blocked Account.
13.9 ACQUISITIONS
No Obligor will, except in the ordinary course of its trade acquire any
business, undertaking or assets of any kind whatsoever.
13.10 INTRA-GROUP ARRANGEMENTS
No Obligor will, without obtaining Burdale's prior written consent:
(a) pay any dividend or make any other distribution of any of its assets
to its shareholders or any of them; or
(b) pay any other moneys, whether by way of interest, management fees or
otherwise howsoever, to any affiliate, subsidiary or any shareholder,
director or employee except for payments in the ordinary course of,
and pursuant to the reasonable requirements of, trading and on arms
length commercial terms or permitted by Clause 13.13; or
(c) redeem any of its ordinary or preference share capital.
13.11 AUDITS BY BURDALE
Each Obligor will permit Burdale or its appointed representatives or agents
at the relevant Obligor's expense to conduct an audit of its financial
records, systems and forecasts on a quarterly basis or, following a Default
at more frequent intervals as Burdale may stipulate and will afford all
co-operation to Burdale and its representatives or agents to enable such
audit to take place.
13.12 FINANCIAL INDEBTEDNESS
No Obligor will incur any Financial Indebtedness other than:
(a) under the Finance Documents;
(b) normal trade credit granted to it in the ordinary course of business;
(c) equipment, vehicle and operating leases and hire purchase transactions
entered into in the ordinary course of business where the total annual
29
Financial Indebtedness for such leases and transactions for the
Obligors as a whole does not exceed L1,000,000 at any one time;
(d) with respect to loans made to it by another Obligor which is a Chargor
under the Debenture;
(e) intercompany indebtedness owed by the Company to ▇▇▇▇▇▇▇▇ Casting
Corporation ("ACC") arising from a loan made by ACC to the Company to
assist with the payment of the purchase price for the shares in
Sheffield Forgemasters Group Limited; or
(f) intercompany indebtedness of an amount not exceeding L3,540,371.94 (or
its equivalent in other currencies) owed to Affiliates in the United
States of America and which is to be repaid in full from the proceeds
of the first Utilisation of the Facilities.
13.13 MAKING LOANS
No Obligor will be a creditor with respect to any Financial Indebtedness
except for:
(a) the grant of normal trade credit in the ordinary course of its trade;
(b) loans made by it to another Obligor which is a Chargor under the
Debenture; and
(c) loans to Affiliates of the Obligors in the United States of America
made prior to 30 September 2001 PROVIDED THAT:
(i) no Obligor may make any such loan unless it first demonstrates to
the satisfaction of Burdale (acting reasonably) that such loans
are to be used by such Affiliates solely for working capital
purposes and, in particular, not in any way which would cause a
breach of section 151 of the Companies ▇▇▇ ▇▇▇▇; and
(ii) the outstanding aggregate principal amount of such loans does not
exceed L6,500,000 at any time;
(d) loans to Affiliates of the Obligors in the United States of America
made after 30 September 2001 PROVIDED THAT no Obligor may make any
such loan unless:
(i) it first demonstrates to the satisfaction of Burdale (acting
reasonably) that such loans are to be used by such Affiliates
solely for working capital purposes and, in particular, not in
any way which would cause a breach of section 151 of the
Companies ▇▇▇ ▇▇▇▇;
(ii) the total amount lent by such Obligor in any quarter of the
Company's financial year is equal to or less than the
consolidated profit after tax of the Company for the preceding
quarter (as defined in accordance with GAAP but excluding any
exceptional or extraordinary profit and as demonstrated by the
accounts for such quarter delivered to Burdale pursuant to Clause
14.1(b)); and
(iii) immediately after making such loan and deducting an amount equal
to any past due payables of the Obligors at such time, the
Facility
30
Companies would have at least L4,000,000 have available to them
for Utilisation.
(e) a loan not exceeding L1,000,000 (or its equivalent in other
currencies) to Fonderie d'Autun SA (a French Affiliate of the
Obligors).
13.14 BANK ACCOUNTS
No Obligor will, open or maintain any account of any type with any bank or
financial institution providing like services other than the Charged
Accounts.
13.15 INSURANCE
Each Obligor will:
(a) as regards all its assets and property of any kind and businesses
arrange and maintain in full force and effect insurances (including
consequential loss, business interruption and public liability and
damage and other insurances usually maintained by companies carrying
on the same type of business as its own business) with such insurers
as Burdale approves and on such terms and in such amounts as Burdale
may reasonably require and is customary for an enterprise engaged in
the same or similar business and in the same or similar localities and
against such risks as Burdale shall reasonably request;
(b) procure that Burdale's interest is noted on all policies relating to
insurances so arranged in such manner as Burdale may in its absolute
discretion require and will use all reasonable endeavours to ensure
that Burdale is named as sole loss payee (but without having any
obligation for premiums);
(c) ensure that every policy of insurance contains a standard mortgagee
clause, whereby such insurance will not be invalidated, vitiated or
avoided as against a mortgagee in the event of any misrepresentation,
act, neglect or failure to disclose on the part of the insured
provided that where the insurers will not agree such terms, terms
acceptable to Burdale in Burdale's absolute discretion are agreed; and
(d) will supply to Burdale copies of all such policies of insurance and
all endorsements and renewals of such policies;
(e) duly and punctually pay all premiums in respect of its insurances and
not do or omit to do any act, matter or thing whereby any such
insurance may be or becomes void or voidable at the option of the
insurers or settle any claim in respect of those insurances without
the prior written consent of Burdale, such consent not to be
unreasonably withheld or delayed;
(f) it shall comply with, enforce and not waive, release, terminate or
vary (or agree so to do) any obligations arising under all policies of
insurance and in particular, but without limitation, it shall notify
Burdale immediately upon receiving notice from any insurer that the
details of any insurance policy are to change in any way and upon
receiving notice from any insurer terminating any insurance policies;
(g) in the event that it receives from any insurer notice that such
insurer is terminating any insurance policy, it shall use all
reasonable endeavours to enter into an agreement on substantially the
same terms as those contained in
31
the original insurance policy with such other insurer as approved by
Burdale and to the extent that the same terms or substantially the
same terms are not available from the insurer, such terms as are
acceptable to Burdale in its absolute discretion, to take effect on or
before the expiry of such notice and shall use all reasonable
endeavours to procure that such insurer gives to Burdale such
acknowledgements and undertakings in relation to this Agreement as
Burdale may in its absolute discretion require;
(h) produce to Burdale on request copies of all policies and all receipts
for the current premiums with respect to the insurance; and
(i) immediately give notice to Burdale of any occurrence which gives rise,
or might give rise, to a claim under any policy of insurance.
If any Obligor at any time fails to perform any of its obligations
contained in this Clause, Burdale may effect or renew such insurance as
Burdale thinks fit and such Obligor shall reimburse Burdale for the costs
thereby incurred on demand.
13.16 FINANCIAL YEAR END AND CHANGE OF AUDITORS
Except with the prior written consent of Burdale (not to be unreasonably
withheld or delayed), no Obligor will alter its financial year end from
that applicable at the date of this Agreement and each Obligor will procure
that it has at all times appointed as its auditors a firm of auditors which
is acceptable to Burdale.
13.17 TAXES
Each Obligor will promptly pay all Taxes as and when they fall due (other
than in circumstances where such Taxes are the subject of a dispute being
carried on properly and in good faith by the relevant Obligor where written
details of such dispute have been supplied to Burdale (if requested,
Burdale having been notified of the dispute) or, in the case of PAYE and
National Insurance contributions, within any permitted grace period or, in
the case of any other taxes, in accordance with any other arrangements
agreed with the Inland Revenue or other taxing authority.
13.18 CHANGE OF NAME
No Obligor will change its name without giving Burdale 30 days' prior
written notice of the proposed new name and will supply a copy of the
relevant certificate of incorporation on change of name to Burdale as soon
as it becomes available.
13.19 NEW LOCATIONS
No Obligor will move any of its assets to any new location without giving
Burdale 30 days' prior written notice of the new location and executing and
delivering to Burdale such access agreements, landlord waivers and other
documents as Burdale may reasonably require in order to protect its
interest in such assets.
13.20 STAMP DUTY
Each Obligor will promptly pay any liability incurred in respect of any
stamp, registration and similar Tax which is or becomes payable in
connection with the entry into, registration, performance, enforcement or
admissibility in evidence of any Finance Document and/or any amendment,
supplement or waiver of any Finance Document. In the event of any breach of
this undertaking the relevant Obligor shall immediately pay to Burdale by
way of liquidated damages the amount of any liability
32
that Burdale may incur as a result of or by reference to such Obligor's
delay in paying or omission to pay any such Tax.
13.21 ADDITIONAL REPORTS/VALUATIONS
The Company shall (at its own expense) procure that there are delivered to
Burdale within 60 days of today's date:
(a) a full appraisal of the Stock of the Obligors;
(b) a Property Valuation;
(c) a certificate of title in relation to the Mortgaged Property in form
and substance acceptable to Burdale prepared by DLA and addressed to
Burdale.
(d) an Equipment Valuation; and
(e) a Phase 1 Environmental Report in respect of the Mortgaged Property,
in each case prepared by a person acceptable to Burdale (acting reasonably)
and in a form and substance acceptable to Burdale.
13.22 DORMANT SUBSIDIARIES
The Company shall procure that each of the Dormant Subsidiaries shall
remain a Dormant Company.
13.23 RETENTION OF TITLE
Each Obligor will:
(a) within 30 days of today's date provide Burdale with a list of all of
its creditors whose standard conditions of supply include retention of
title provisions; and
(b) promptly inform Burdale in writing if any of its creditors imposes
retention of title provisions as part of its conditions of supply to
such Obligor in addition to those set out in such list.
14. INFORMATION AND ASSET UNDERTAKINGS
14.1 FINANCIAL INFORMATION
The Company shall supply to Burdale:
(a) as soon as the same become available, but in any event within 120 days
after the end of each of its financial years:
(i) its audited consolidated financial statements for that financial
year; and
(ii) the audited financial statements of each Obligor for that
financial year; and
(b) as soon as practicable and in any event within 30 days from the end of
each monthly management accounting period and in each case in a format
satisfactory to Burdale, full individual and, if applicable,
consolidated accounts in each case prepared in Sterling in respect of
that period for itself and each
33
other Obligor including Stock figures and valuations for that month, a
breakdown of the value and identity of preferential creditors for that
month and details of all input and output VAT;
(c) copies of all notices, circulars, reports and statements sent to any
Obligor's shareholders or creditors generally (or any class of them)
at the same time as they are made available to such shareholders or
creditors; and
(d) such further information relating to the financial condition or
operations of it or any Obligor which Burdale may reasonably require
at such time as Burdale may reasonably require it.
14.2 REQUIREMENTS AS TO FINANCIAL STATEMENTS
Each set of financial statements delivered by the Company pursuant to
Clause 14.1 shall be certified by a director of the relevant company
without personal liability as fairly representing its financial condition
as at the date as at which those financial statements were drawn up and the
Company shall procure that each set of financial statements delivered
pursuant to Clause 14.1 is prepared using GAAP and consistently with the
policies and practices adopted by the relevant company for the preparation
of such accounts as at today's date.
14.3 REPORTING REGARDING RECEIVABLES, STOCK AND EQUIPMENT
Each Facility Company will provide Burdale with the following documents
with all amounts expressed in Sterling and otherwise in a form satisfactory
to Burdale:
(a) on a daily basis with a schedule of Receivables, collections received
and credits issued and on a monthly basis with a stock report
substantially in the form set out in Part I of Schedule 4 and on an
annual basis with an Equipment report together with such further
information reports and copies of documents regarding Receivables,
Stock and Equipment as Burdale may from time to time reasonably
request;
(b) as soon as practicable and in any event within 15 days of the end of
each month or more frequently as Burdale may reasonably request:
(i) ageings of creditors and Receivables with details of all dated
invoices; and
(ii) full details of all Stock by category, location and supplier;
all in a format to be agreed with Burdale (acting reasonably); and
(c) on a daily basis, details of any Receivables which have become or are
purported to be, by the relevant account debtor or otherwise, subject
to any prohibitions or restriction on charge or assignment.
14.4 REPORTING REGARDING ACCOUNT DEBTORS
(a) NOTIFICATION: Each Facility Company will notify Burdale promptly of:
(i) any material delay in such Facility Company's performance of any
of its obligations to any account debtor or the assertion of any
claims, offsets, defences or counterclaims by any account debtor,
or any material
34
disputes with account debtors, or any settlement, adjustment or
compromise of any such matter;
(ii) all material adverse information known to such Facility Company
relating to the financial condition of any account debtor; and
(iii) any event or circumstance which, to such Facility Company's
knowledge, would cause Burdale to consider any then existing
Receivables as no longer constituting Eligible Receivables.
(b) DISPUTES AND SETTLEMENTS WITH ACCOUNT DEBTORS: No credit, discount,
allowance or extension or agreement for any of the foregoing will be
granted to any account debtor without Burdale's consent, except in the
ordinary course of the relevant Facility Company's business in
accordance with proper practices and policies operated by the relevant
Facility Company prior to the date of this Agreement. At any time
while an Event of Default is outstanding, Burdale will, at its option,
have the exclusive right to settle, adjust or compromise any claim,
offset, counterclaim or dispute with any account debtor and to grant
any credits, discounts or allowances in relation to such matters.
(c) RETURN OF STOCK: Each Facility Company will promptly report to Burdale
any return of Stock by an account debtor where that Stock has a value
in excess of L50,000. At any time that any Stock (irrespective of its
value) is returned, reclaimed or repossessed, the related Receivable
will be deemed an Ineligible Receivable. In the event any account
debtor returns Stock when an Event of Default has occurred and is
continuing, such Facility Company will, upon Burdale's request:
(i) hold the returned Stock on trust for Burdale;
(ii) segregate all returned Stock from all of its other property;
(iii) dispose of the returned Stock solely according to Burdale's
instructions; and
(iv) not issue any credits, discounts or allowances with respect to
such returned stock without Burdale's prior written consent.
14.5 VERIFICATION
Burdale will have the right from time to time, in the name of any nominee,
to verify the validity, amount or any other matter relating to any
Receivable or other asset of any Obligor, by mail, telephone, facsimile or
otherwise.
14.6 RIGHTS AFTER A DEFAULT
(a) DEALING WITH ASSETS: Burdale may, at any time that a Default has
occurred and is continuing and without prejudice to any of its rights
under Clause 16.2 or otherwise under this Agreement or any other
Finance Document:
(i) extend the time of payment of, compromise, settle or adjust for
cash, credit, return of merchandise or otherwise, and upon any
terms or conditions, any and all Receivables and thereby
discharge or release any account debtor or any other party or
parties in any way liable for payment of any Receivable without
affecting any of the Receivables, demand or enforce payment of
any Receivables, but without any duty to
35
do so, and Burdale will not be liable for its failure to enforce
the payment of any Receivable nor for the negligence of its
agents or attorneys with respect to any Receivable; and
(ii) take whatever other action Burdale may deem necessary for the
protection of its interests in any assets subject to a Security
Interest under the Security Documents.
(b) NOTICE TO DEBTORS: At any time that a Default is outstanding, Burdale
or its nominee may, at Burdale's discretion as the case may be do any
of the following:
(i) having given prior notification to the Company, notify any or all
account debtors that the Receivables have been assigned to
Burdale and that payments in respect of Receivables are to be
redirected to such account as is specified by Burdale;
(ii) request the relevant Facility Company to give the notification
referred to in Clause 14.6(b)(i) above and/or to ensure that all
invoices and statements in respect of Receivables issued to the
account debtors state the information referred to in Clause
14.6(b)(i); and
(iii) direct any or all relevant account debtors to make all payments
in respect of Receivables direct to Burdale at such account as
Burdale may specify.
(c) ORIGINALS: At any time that an Event of Default is outstanding, each
Facility Company will deliver to Burdale the originals of all
documents evidencing the sale and delivery of goods or the performance
of services giving rise to any Receivables as Burdale may require.
14.7 UNDERTAKINGS REGARDING STOCK
With respect to the Stock:
(a) each Facility Company will at all times maintain perpetual stock
records reasonably satisfactory to Burdale, keeping correct and
accurate records itemising and describing the kind, type, quality and
quantity of Stock, such Facility Company's cost in relation to such
Stock and daily withdrawals from and additions to the Stock;
(b) each Facility Company will conduct a physical count of the Stock at
least once each year and at any time or times as Burdale may request
while an Event of Default is outstanding, and promptly following such
physical count will supply Burdale with a report in a form and
containing such specific information as may be reasonably satisfactory
to Burdale concerning such physical count;
(c) no Facility Company will remove any Stock from property which is owned
and controlled by it or any other Obligor or to or from a public
warehouse without the prior written consent of Burdale, except for
sales of Stock in the ordinary course of the relevant Facility
Company's trade and except to move Stock directly from such property
to another location previously agreed to by Burdale;
36
(d) upon Burdale's request, each Facility Company will, at its expense,
not more than once in any twelve month period, but at any time or
times as Burdale may request while an Event of Default is outstanding,
deliver or cause to be delivered to Burdale written reports or
appraisals regarding the Stock in form and substance acceptable to
Burdale and by an appraiser acceptable to Burdale, addressed to
Burdale and upon which Burdale is expressly permitted to rely;
(e) each Facility Company will produce, use, store and maintain the Stock
with all reasonable care and caution and in accordance with applicable
standards relating to any insurance and in conformity with applicable
laws and regulations;
(f) each Facility Company assumes all responsibility and liability arising
from or relating to the production, use, sale or other disposition of
the Stock;
(g) in respect of Stock exceeding L10,000, no Facility Company will,
without prior notice to Burdale, sell such Stock to any customer on
sale or return, or on any other basis which entitles the customer to
return or may oblige such Facility Company or any other Obligor to
repurchase such Stock; and
(h) each Facility Company will keep the Stock in good and marketable
condition and will not, without the prior written consent of Burdale,
acquire or accept any consignment Stock.
14.8 BURDALE'S RIGHT TO CURE
Burdale may, at its option:
(a) after giving five days notice to the Company, cure any default by any
Facility Company under any agreement with an account debtor in respect
of a Receivable (other than bona fide disputes in the ordinary course
of the relevant Facility Company's business where no Event of Default
has occurred and is continuing) or under any other agreement with a
third party as may be required by Burdale in good faith to facilitate
the collection of the Receivables or to enable Burdale to have access
to any assets subject to a Security Interest under the Security
Documents;
(b) after giving five days notice to the Company, pay or make a bond in
respect of or appeal any judgment entered into against any Facility
Company which, upon execution, attachment or the exercise of any
similar remedy in respect of such judgment, would result in a Security
Interest being imposed on the assets of any Obligor or would impair
Burdale's ability to obtain possession of, realise or collect any
assets subject to a Security Interest under the Security Documents;
(c) discharge taxes, Security Interests or other encumbrances at any time
levied on or existing with respect to any assets of any Obligor; and
(d) pay any amount, incur any expense or perform any act including without
limitation the payment to any creditors in respect of plant and/or
machinery, which, in Burdale's judgment, is necessary or appropriate
to reserve, protect, insure or maintain the assets subject to a
Security Interest under the Security Documents and the rights of
Burdale with respect to them.
37
Any monies so expended or costs so incurred by Burdale shall be repayable
by the relevant Obligor on demand. Burdale will be under no obligation to
effect any such cure or payment or incur any such cost and will not, by
doing so, be deemed to have assumed any obligation or liability of the
Facility Company. Any payment made or other action taken by Burdale under
this Clause will be without prejudice to any right it may have to assert an
Event of Default under this Agreement and to proceed accordingly.
14.9 ACCESS TO PROPERTY
From time to time as requested by Burdale on one Business Day's notice
except in the case of emergency as determined by Burdale (but subject to
Clause 17.1(d) regarding daily charge rates), at the cost and expense of
the Company:
(a) Burdale or its nominee will have complete access to all of each
Obligor's premises during normal business hours and having given prior
notice to the Company, or at any time and without notice to the
Company if an Event of Default is continuing, for the purposes of
inspecting, verifying and auditing the Obligors' books, records and
assets;
(b) each Obligor will promptly furnish to Burdale or any such nominee such
copies of or extracts from such books and records as may be reasonably
requested from any Obligor.
15. GUARANTEE AND INDEMNITY
15.1 GUARANTEE AND INDEMNITY
Each Guarantor irrevocably and unconditionally jointly and severally:
(a) guarantees to Burdale punctual performance by each Facility Company of
all that Facility Company's obligations under the Finance Documents;
(b) undertakes with Burdale that whenever a Facility Company does not pay
any amount when due under or in connection with any Finance Document,
that Guarantor shall immediately on demand pay that amount as if it
was the principal obligor; and
(c) indemnifies Burdale immediately on demand against any cost, loss or
liability suffered by Burdale if any obligation guaranteed by it is or
becomes unenforceable, invalid or illegal. The amount of the cost,
loss or liability shall be equal to the amount which Burdale would
otherwise have been entitled to recover.
15.2 CONTINUING GUARANTEE
This guarantee is a continuing guarantee and will extend to the ultimate
balance of sums payable by any Obligor under the Finance Documents,
regardless of any intermediate payment or discharge in whole or in part.
15.3 REINSTATEMENT
If any payment by an Obligor or any discharge given by Burdale (whether in
respect of the obligations of any Obligor or any security for those
obligations or otherwise) is avoided or reduced as a result of insolvency
or any similar event:
38
(a) the liability of each Obligor shall continue as if the payment,
discharge, avoidance or reduction had not occurred; and
(b) Burdale shall be entitled to recover the value or amount of that
security or payment from each Obligor, as if the payment, discharge,
avoidance or reduction had not occurred.
15.4 WAIVER OF DEFENCES
The obligations of each Guarantor under this Clause 15 will not be affected
by an act, omission, matter or thing which, but for this Clause, would
reduce, release or prejudice any of its obligations under this Clause 15
(without limitation and whether or not known to it or Burdale) including:
(a) any time, waiver or consent granted to, or composition with, any
Obligor or other person;
(b) the release of any other Obligor or any other person under the terms
of any composition or arrangement with any creditor of any Obligor or
any other person;
(c) the taking, variation, compromise, exchange, renewal or release of, or
refusal or neglect to perfect, take up or enforce, any rights against,
or security over assets of, any Obligor or other person or any
non-presentation or non-observance of any formality or other
requirement in respect of any instrument or any failure to realise the
full value of any security;
(d) any incapacity or lack of power, authority or legal personality of or
dissolution or change in the members or status of an Obligor or any
other person;
(e) any amendment (however fundamental) or replacement of a Finance
Document or any other document or security;
(f) any unenforceability, illegality or invalidity of any obligation of
any person under any Finance Document or any other document or
security; or
(g) any insolvency or similar proceedings.
15.5 IMMEDIATE RECOURSE
Each Guarantor waives any right it may have of first requiring Burdale to
proceed against or enforce any other rights or security or claim payment
from any person before claiming from that Guarantor under this Clause 15.
This waiver applies irrespective of any law or any provision of a Finance
Document to the contrary.
15.6 APPROPRIATIONS
Until all amounts which may be or become payable by the Obligors under or
in connection with the Finance Documents have been irrevocably paid in
full, Burdale may:
(a) refrain from applying or enforcing any other moneys, security or
rights held or received by Burdale in respect of those amounts, or
apply and enforce the same in such manner and order as it sees fit
(whether against those amounts or otherwise) and no Guarantor shall be
entitled to the benefit of the same; and
39
(b) hold in an interest-bearing suspense account any moneys received from
any Guarantor or on account of any Guarantor's liability under this
Clause 15.
15.7 DEFERRAL OF GUARANTORS' RIGHTS
Until all amounts which may be or become payable by the Obligors under or
in connection with the Finance Documents have been irrevocably paid in full
and unless Burdale otherwise directs, no Guarantor will exercise any rights
which it may have by reason of performance by it of its obligations under
the Finance Documents:
(a) to be indemnified by an Obligor;
(b) to claim any contribution from any other guarantor of any Obligor's
obligations under the Finance Documents; and/or
(c) to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any of Burdale's rights under the Finance
Documents or of any other guarantee or security taken pursuant to, or
in connection with, the Finance Documents by Burdale.
15.8 ADDITIONAL SECURITY
This guarantee is in addition to and is not in any way prejudiced by any
other guarantee or security now or subsequently held by Burdale.
16. EVENTS OF DEFAULT
16.1 DEFAULT
Each of the events or circumstances specified below constitutes an Event of
Default:
(a) PAYMENT DEFAULT: Any Obligor does not pay on its due date any amount
payable by it under the Finance Documents at the place and in the
currency in which it is expressed to be payable or, where such failure
is due to a technical or administrative failure within the banking
system (which is not attributable to the relevant Obligor), within two
Business Days of such due date.
(b) BREACH OF OTHER OBLIGATIONS:
(i) Any Obligor does not comply with its obligations or undertakings
under, or there is a breach of any of Clauses 13.4, 13.8, 13.12,
13.15, 13.21 or 13.23(a).
(ii) Any Obligor does not comply with any of its obligations or
undertakings under any of the Finance Documents (other than those
referred to in Clause 16.1(a) or 16.1(b)(i)) and, where such
failure is capable of remedy, such Obligor fails to remedy the
same within twenty Business Days of the relevant Obligor becoming
aware of the failure to comply.
(c) MISREPRESENTATION: Any representation or warranty made or repeated in
connection with any Finance Document or any other document delivered
by or on behalf of any Obligor under or in connection with any Finance
Document is or proves to have been incorrect or misleading in any
material respect when made or deemed to be made.
40
(d) INVALIDITY: Any provision of any of the Finance Documents is not, or
is alleged by any Obligor not to be binding on or enforceable against
any Obligor or effective to create any security intended to be created
by it.
(e) CROSS-DEFAULT:
(i) Any Financial Indebtedness of any Obligor exceeding L50,000 (or
its equivalent in other currencies) in aggregate is not paid when
due.
(ii) An event of default howsoever described occurs under any document
relating to Financial Indebtedness of any Obligor exceeding
L50,000 (or its equivalent in other currencies).
(iii) Any Security Interest securing Financial Indebtedness over any
asset of any Obligor becomes enforceable.
(iv) An amount exceeding L50,000 in aggregate owed to trade creditors
of any Obligor remains outstanding for a period exceeding 20
Business Days following the expiry of any relevant customary
trade credit period.
(f) CREDITORS' PROCESS: Any attachment, sequestration, distress or
execution affects any asset of any Obligor and is not discharged
within 14 days.
(g) INSOLVENCY:
(i) Any Obligor is unable or admits inability to pay its debts as
they fall due, suspends making payments on any of its debts or,
by reason of actual or anticipated financial difficulties,
commences negotiations with one or more of its creditors with a
view to rescheduling any of its indebtedness.
(ii) The value of the assets of any Obligor is less than its
liabilities (taking into account contingent and prospective
liabilities).
(iii) A moratorium is declared in respect of any indebtedness of any
Obligor.
(h) INSOLVENCY PROCEEDINGS:
Any corporate action, legal proceedings or other procedure or step is
taken in relation to:
(i) the suspension of payments, a moratorium of any indebtedness,
winding-up, dissolution, administration or reorganisation (by way
of voluntary arrangement, scheme of arrangement or otherwise) of
any Obligor;
(ii) a composition, assignment or arrangement with any creditor of any
Obligor;
(iii) the appointment of a liquidator, receiver, administrator,
administrative receiver, compulsory manager or other similar
officer in respect of any Obligor or any of its assets; or
(iv) enforcement of any Security Interest over any assets of any
Obligor,
or any analogous procedure or step is taken in any jurisdiction.
41
(i) CESSATION OF BUSINESS: Any Obligor ceases, or threatens to cease, to
carry on all or a substantial part of its business.
(j) AUTHORISATIONS: Any authorisation or other requirement necessary to
enable any Obligor to comply with any of its obligations under the
Finance Documents or for Burdale to enter into this Agreement and make
available and/or maintain the Facilities or any of them is revoked or
withheld or does not remain in full force and effect or is materially
and adversely modified.
(k) UNLAWFULNESS: It is or becomes unlawful for any Obligor to perform any
of its obligations under the Finance Documents.
(l) CHANGE OF CONTROL: Any single person or group of persons acting in
concert (as defined in the City Code on Takeovers and Mergers) not
having control of the Company directly or indirectly as at today's
date, acquires or agrees to acquire control (as defined in Section 416
of the Income and Corporation Taxes Act 1988) of the Company.
(m) CHARGED ACCOUNT ARRANGEMENTS: Any bank repudiates or purports to
terminate the arrangements set out in the Debenture in relation to any
Charged Account or a cash-sweep or payment required to be made under
any Finance Document from a Charged Account is not made in the amount
and manner required unless such non-payment arises by reason of an
administrative oversight and is corrected within 5 Business Days.
(n) MATERIAL ADVERSE EFFECT: An event or series of events occurs which in
Burdale's reasonable opinion constitutes or could reasonably be
expected to constitute a Material Adverse Effect.
16.2 ACTION ON DEFAULT
Upon the occurrence of any Event of Default and whilst the same is
continuing, and without prejudice to any of Burdale's rights under this
Agreement, Burdale may, by notice to the Company:
(a) declare that an Event of Default has occurred; and/or
(b) declare that the Facilities or any of them shall be cancelled,
whereupon the Facilities or such of them (as the case may be) shall be
so cancelled and all fees (including without limitation pursuant to
Clause 7.6(b)) payable in relation to the Facilities or such of them
(as the case may be) shall become immediately due and payable; and/or
(c) declare that some or all of the Loans, together with accrued interest
and all other amounts accrued, be immediately due and payable,
whereupon they shall become immediately due and payable; and/or
(d) declare that some or all of the Loans, together with accrued interest
and all other amounts accrued, be payable on demand, whereupon they
shall immediately become payable on demand (and in the event of any
such demand those Loans, such interest and such other amounts shall be
immediately due and payable); and/or
(e) declare that the Company shall forthwith pay or procure the payment to
Burdale of a sufficient sum to cover the amount of all Outstanding
Purchase
42
Price and/or any contingent obligations of Burdale under any
outstanding L/Cs and/or any contingent obligation of Burdale under any
Forex Transaction, whereupon the same shall become immediately due and
payable.
16.3 APPOINTMENT OF INSOLVENCY OFFICER
If any liquidator, trustee in bankruptcy, judicial custodian, compulsory
manager, receiver, administrative receiver, administrator or any other
insolvency officer is appointed in respect of any Obligor or any part of
its assets (whether on the application or with the consent of Burdale or
otherwise) then Burdale may (with or without it first having exercised any
of its other rights under the Finance Documents), by notice to the Company,
declare that the fee specified in Clause 7.6(b) be immediately due and
payable or, at Burdale's option, payable upon demand as if the Facility
Limit at such time had been reduced to zero, whereupon such fee shall
become immediately due and payable or payable on demand (as the case may
be).
17. COSTS, EXPENSES AND FEES
17.1 INITIAL AND GENERAL COSTS
The Company shall pay to Burdale on demand the amount of all costs and
expenses (including legal fees) incurred by it:
(a) in the negotiation, preparation, printing and execution of the Finance
Documents (including any Finance Documents executed after today's
date);
(b) in relation to any amendment, waiver, consent or suspension of rights
requested by or on behalf of any Obligor relating to a Finance
Document;
(c) in remitting loan proceeds, collecting cheques and other items of
payment, and establishing and maintaining the Charged Accounts,
together with Burdale's associated and customary charges and fees;
(d) as out-of-pocket expenses and costs from time to time (including prior
to today's date) during the course of periodic field examinations of
the Obligors' assets and operations, plus a daily charge at the rate
of L500 for Burdale's examiners in the field and office for up to four
such periodic field examinations in any 12 month period prior to a
Default and for any other or additional field examinations on and
after the occurrence of a Default; and
(e) in respect of the reports and valuations specified in Clause 13.21.
17.2 VALUATION
(a) Immediately upon demand, the Company shall pay the costs of:
(i) the Property Valuation and the Equipment Valuation carried out
prior to first utilisation of the Facilities;
(ii) any Property Valuation and any Equipment Valuation under Clause
17.2(b) or 17.2(d).
(b) Burdale may request a Property Valuation or an Equipment Valuation:
(i) once in each period of 12 months commencing today's date; and
43
(ii) at any time if a Default is outstanding.
(c) Burdale may also call for a Property Valuation or an Equipment
Valuation at any time at its own cost.
(d) If the results of the written searches carried out after today's date
in respect of any Mortgaged Property are in any respect materially and
adversely different from the results of the personal searches in
respect of such Mortgaged Property carried out before today's date,
Burdale may refer such matters to the valuer who prepared the then
most recent Property Valuation to consider and revise (if appropriate)
the then most recent Property Valuation in respect of such Mortgaged
Property.
17.3 ENFORCEMENT COSTS
The Company shall pay to Burdale on demand the amount of all costs and
expenses (including legal fees and VAT) incurred by it in:
(a) the enforcement of, or the preservation of any rights under, any
Finance Document; or
(b) investigating any Default.
17.4 FEES
(a) FACILITY FEE: The Company will pay to Burdale today a facility fee
equal to 2% on the amount of the Facility Limit.
(b) COMMITMENT FEE: The Company will pay to Burdale a commitment fee
computed at the rate of 0.25% on the daily undrawn/unutilised balance
of the Facility Limit. Accrued Commitment Fee shall be payable monthly
in arrears from today's date and also on the date on which all the
Facilities are terminated. Commitment fee shall accrue from day to day
and be calculated on the basis of a 365 day year and for the actual
number of days elapsed.
(c) MONITORING FEE: The Company will pay to Burdale an annual monitoring
fee of L108,000. Such fee shall fall due for payment on today's date
and thereafter on each anniversary of today's date and (subject to the
operation of Clause 16.2) shall be paid by the Company in equal
quarterly instalments in advance with the first payment to be made on
today's date.
(d) L/C FEE: Each Facility Company will pay to Burdale on the first
Business Day of each month a fee equal to:
(i) in relation to any L/C which is a performance bond, 0.375% per
quarter or part quarter; and
(ii) in relation to any other L/C, 2.6% per annum,
in each case on the face amount of each L/C issued at such Facility
Company's request in respect of the period between the date of issue
of the L/C and the End Date of such L/C. The fee shall be calculated
on the basis of a 365 day year and shall be paid monthly in arrears
and on the End Date of such L/C.
44
18. INDEMNITIES
18.1 CURRENCY INDEMNITY
If any amount payable by any Obligor under or in connection with any of the
Finance Documents is received by Burdale in a currency other than that
agreed to be payable under the Finance Documents, whether as a result of
any judgment or order or other enforcement, the liquidation or bankruptcy
of any Obligor or otherwise howsoever and the amount produced by converting
the currency so received into the agreed currency is less than the relevant
amount of the agreed currency, then the relevant Obligor will as an
independent obligation indemnify Burdale for the deficiency and any loss
sustained as a result. Such conversion will be made at the Exchange Rate,
on such date and in such market as is determined by Burdale as being most
favourable for such conversion. The relevant Obligor will in addition pay
the costs of such conversion.
18.2 FOREIGN EXCHANGE INDEMNITY
Each Facility Company will indemnify and hold Burdale harmless from and
against any and all losses, claims, damages, liabilities, costs and
expenses which Burdale may suffer or incur in connection with any Forex
Transaction and any documents, drafts or financial information relating to
such Forex Transaction, including, but not limited to, any losses, claims,
damages, liabilities, costs and expenses due to any action taken by any
counterparty with respect to any Forex Transaction, except for any such
losses, claims, damages, liabilities, costs and expenses suffered or
incurred by Burdale as a result of its gross negligence or wilful
misconduct. Each Facility Company assumes all risks with respect to the
acts or omissions of any counterparty to any Forex Transaction and for such
purposes the counterparty will be deemed such Facility Company's agent.
Each Facility Company assumes all risks for, and agrees to pay, all foreign
and local taxes, duties and levies relating to any transaction pursuant to
the Forex Transactions or any documents, drafts or financial information
relating to such Forex Transaction. Each Facility Company releases and
holds Burdale harmless from and against any acts, waivers, errors, delays
or omissions, whether caused by such Facility Company, by any counterparty
or otherwise with respect to or relating to any Forex Transaction.
18.3 OTHER INDEMNITIES
The Company will (or will procure that an Obligor will) indemnify Burdale
on demand against any loss or liability which Burdale incurs as a result
of:
(a) the occurrence of any Default;
(b) any payment of principal or other amount being received from any
source otherwise than on its due date under this Agreement;
(c) any Utilisation not being effected after a Facility Company has
delivered a Request in respect of such Utilisation other than as a
result of Burdale's negligence or default;
(d) any prepayment or provision of cash collateral by any Obligor not
being made in accordance with the terms of this Agreement.
In each case the Company's liability includes (without limitation) loss or
expense on account of funds borrowed, contracted for or utilised to fund
any amount payable
45
under any Finance Document and on account of any security given by Burdale
in relation to those funds and in relation to any amount repaid or prepaid
in relation to any Finance Document.
19. NOTICES
19.1 DELIVERY AND RECEIPT
(a) Any communications to be made under or in connection with the Finance
Documents shall be made in writing, may be made by letter or facsimile
and shall be deemed to be given as follows:
(i) if by way of letter, when it has been left at the relevant
address or two Business Days after being deposited in the post
with postage prepaid in an envelope addressed to it at that
address; and
(ii) if by facsimile, when received in legible form,
save that any notice delivered or received on a non-Business Day or
after business hours shall be deemed to be given on the next Business
Day at the place of delivery or receipt.
(b) Any communication or document made or delivered to the Company in
accordance with this Clause will be deemed to have been made or
delivered to each of the Obligors.
19.2 ADDRESSES
(a) The Company's and each other Obligor's address and facsimile number
for notices are:
▇▇▇▇▇▇▇▇ Casting UK Limited
P O Box 1332
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇
Facsimile no: 0114 243 2216
For the attention of: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
or such as the Company may notify to Burdale by not less than 10 days'
notice.
(b) Burdale's address and facsimile number for notices are:
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Facsimile no: 020 7935 5445
For the attention of: Company Secretary
or such as Burdale may notify to the Company by not less than 10 days'
notice.
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20. MISCELLANEOUS PROVISIONS
20.1 REMEDIES AND WAIVERS
The rights of Burdale under the Finance Documents:
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights under the general law;
and
(c) may be waived only in writing and specifically.
Delay in exercising or non-exercise of any right shall not be deemed to be
a waiver of that right.
20.2 INVALIDITY
If, at any time, any provision of any Finance Document is or becomes
invalid, illegal or unenforceable in any respect under any law, the
validity, legality and enforceability of the remaining provisions will not
in any way be affected or impaired.
20.3 CHANGE OF CURRENCY
(a) Unless otherwise prohibited by law, if more than one currency or
currency unit are at the same time recognised by the central bank of
any country as the lawful currency of that country, then:
(i) any reference in the Finance Documents to, and any obligations
arising under the Finance Documents in, the currency of that
country shall be translated into, or paid in, the currency or
currency unit of that country designated by Burdale (after
consultation with the Facility Companies); and
(ii) any translation from one currency or currency unit to another
shall be at the official rate of exchange recognised by the
central bank for the conversion of that currency or currency unit
into the other, rounded up or down by Burdale (acting
reasonably).
(b) If a change in any currency of a country occurs, this Agreement will,
to the extent Burdale (acting reasonably and after consultation with
the Facility Companies) specifies to be necessary, be amended to
comply with any generally accepted conventions and market practice in
the London interbank market and otherwise to reflect the change in
currency.
20.4 ACCOUNTS
In any litigation or arbitration proceedings arising out of or in
connection with a Finance Document, the entries made in the accounts
maintained by Burdale are prima facie evidence of the matters to which they
relate.
20.5 CERTIFICATES AND DETERMINATIONS
Any certification or determination by Burdale of a rate or amount under any
Finance Document is, in the absence of manifest error, conclusive evidence
of the matters to which it relates.
47
20.6 DISCLOSURE OF INFORMATION
Burdale may disclose to any person with whom it is proposing to enter into
(or has entered into) any kind of assignment or transfer in relation to
this Agreement any information concerning the Obligors as Burdale may in
its discretion think fit provided such person is bound by a professional
code of confidentiality or has signed a confidentiality agreement by which
it agrees to keep all details disclosed confidential to itself and its
professional advisers, and may advertise or publicise in such publications
and to such persons as Burdale may in its discretion think fit such
particulars of this transaction as Burdale may in its absolute discretion
deem appropriate.
20.7 COUNTERPARTS
This Agreement may be executed in any number of counterparts and all of
such counterparts taken together will be deemed to constitute one and the
same instrument.
21. GOODS AND DOCUMENTS
21.1 PLEDGE
All Goods and Documents are hereby and shall upon despatch from the
supplier of any Goods be deemed to be pledged by the relevant Facility
Company to Burdale and the Goods and the proceeds of all insurances in
relation to them and all sales of them and all of the relevant Facility
Company's rights as unpaid seller of them shall be a continuing security
for the payment and discharge in full of all of the obligations of the
relevant Facility Company under the Finance Documents.
21.2 PERFECTION OF PLEDGE
Burdale shall be entitled at its option to obtain possession of the Goods
in order to perfect the pledge made by Clause 21.1 and in this regard the
relevant Facility Company assigns to Burdale its right, title and interest
in and to the Documents and all claims and rights arising from them and the
relevant Facility Company irrevocably and unconditionally authorises
Burdale to do all such things as may be necessary to clear the Goods, take
possession of them and realise the Goods in reduction of the relevant
Facility Company's indebtedness to Burdale and in this regard the relevant
Facility Company irrevocably appoints Burdale acting through any one of
Burdale's directors as the relevant Facility Company's agent to sign all
such documents and do all such things on the relevant Facility Company's
behalf as may be necessary to give effect to the provisions of this Clause
21.2.
21.3 TRUST RECEIPTS
The Goods and the Documents shall only be released to the relevant Facility
Company by Burdale against receipt by Burdale of a duly executed trust
receipt from the relevant Facility Company in Burdale's standard form (from
time to time) and if, for any reason, no such trust receipt is executed by
the relevant Facility Company in respect of any Goods or Documents, such
Goods or Documents shall be deemed to be subject to a trust receipt in such
form.
21.4 SEPARATION
Each Facility Company undertakes to keep the Documents and the Goods
separate
48
and distinct from any other bills of lading, documents of title or goods.
22. CHANGES TO PARTIES
22.1 ASSIGNMENTS AND TRANSFER BY OBLIGORS
No Obligor may assign any of its rights or transfer any of its rights or
obligations under the Finance Documents.
22.2 ADDITIONAL FACILITY COMPANIES
The Company may request that any of its Subsidiaries becomes an Additional
Facility Company. That Subsidiary shall become an Additional Facility
Company if:
(a) Burdale approves the addition of that Subsidiary as an Additional
Facility Company;
(b) the Company delivers to Burdale a duly completed and executed
Accession Letter;
(c) the Company confirms that no Default is continuing or would occur as a
result of that Subsidiary becoming an Additional Facility Company; and
(d) Burdale has received all of the documents and other evidence listed in
Part II of Schedule 2 in relation to that Additional Facility Company,
each in form and substance satisfactory to Burdale.
22.3 ADDITIONAL GUARANTORS
The Company shall procure that each of its Subsidiaries (other than any
Dormant Subsidiary for such time as it remains a Dormant Company) is a
Guarantor. With respect to any company which becomes a Subsidiary of the
Company (other than any Dormant Subsidiary for such time as it remains a
Dormant Company) after today's date, the Company shall procure that such
Subsidiary becomes an Additional Guarantor by delivering to Burdale
(promptly upon such company becoming a Subsidiary):
(a) a duly completed and executed Accession Letter; and
(b) all of the documents and other evidence listed in Part II of Schedule
2 in relation to that Additional Guarantor, each in form and substance
satisfactory to Burdale.
22.4 REPETITION OF REPRESENTATIONS
Delivery of an Accession Letter constitutes confirmation by the relevant
Subsidiary that the representations and warranties in Clause 12 are true
and correct in relation to it as at the date of delivery as if made by
reference to the facts and circumstances then existing.
22.5 TRANSFER BY BURDALE
Burdale may at any time assign, transfer, delegate or offer participations
in all or a proportion of all its rights and obligations under the Finance
Documents to any other bank or financial institution.
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23. GOVERNING LAW AND JURISDICTION
23.1 GOVERNING LAW
This Agreement is governed by English law.
23.2 JURISDICTION
(a) The courts of England have exclusive jurisdiction to settle any
dispute arising out of or in connection with this Agreement (including
a dispute regarding the existence, validity or termination of this
Agreement) (a "DISPUTE").
(b) The parties agree that the courts of England are the most appropriate
and convenient courts to settle Disputes and accordingly no party will
argue to the contrary.
(c) This Clause 23.2 is for the benefit of Burdale only. As a result,
Burdale shall not be prevented from taking proceedings relating to a
Dispute in any other courts with jurisdiction. To the extent allowed
by law, Burdale may take concurrent proceedings in any number of
jurisdictions.
23.3 SERVICE OF PROCESS
Without prejudice to any other mode of service allowed under any relevant
law, each Obligor (other than an Obligor incorporated in England and
Wales):
(a) irrevocably appoints the Company as its agent for service of process
in relation to any proceedings before the English courts in connection
with any Finance Document; and
(b) agrees that failure by a process agent to notify the relevant Obligor
of the process will not invalidate the proceedings concerned.
For the benefit of Burdale the Company expressly agrees and consents to its
irrevocable appointment as process agent pursuant to this Clause 23.3.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
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SIGNATORIES
THE COMPANY
▇▇▇▇▇▇▇▇ CASTING UK LIMITED
By: ▇. ▇▇▇▇▇▇▇▇
THE FACILITY COMPANIES
SHEFFIELD FORGEMASTERS ROLLS LIMITED
By: P. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ FORGEMASTERS ENGINEERING LIMITED
By: ▇. ▇▇▇▇▇
THE GUARANTORS
▇▇▇▇▇▇▇▇ CASTING UK LIMITED
By: ▇. ▇▇▇▇▇▇▇▇
SHEFFIELD FORGEMASTERS GROUP LIMITED
By: ▇. ▇▇▇▇▇▇▇▇
SHEFFIELD FORGEMASTERS LIMITED
By: ▇. ▇▇▇▇▇▇▇▇
SHEFFIELD FORGEMASTERS ROLLS LIMITED
By: P. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ FORGEMASTERS ENGINEERING LIMITED
By: ▇. ▇▇▇▇▇
BURDALE:
BURDALE FINANCIAL LIMITED
By: ▇. ▇▇▇▇ ▇. ▇▇▇▇▇
51