DATED 22 NOVEMBER 2000
--------------------------------------------------------------------------------
SECOND AMENDMENT AND RESTATEMENT AGREEMENT
relating to the
REVOLVING MULTICURRENCY CREDIT FACILITY
of up to DM209,355,403
DATED 12 MAY 1998
between
THE DERBY CYCLE CORPORATION AND OTHERS
as Borrowers and/or Guarantors
CHASE MANHATTAN plc
as Arranger
THE FINANCIAL INSTUTIONS NAMED HEREIN
as Original Banks
THE FINANCIAL INSTITUTION NAMED HEREIN
as Additional Banks
CHASE MANHATTAN INTERNATIONAL LIMITED
as Security Agent
CHASE MANHATTAN INTERNATIONAL LIMITED
as Facility Agent
================================================================================
CONTENTS
1. INTERPRETATION...........................................................
2. AMENDMENT AND RESTATEMENT OF THE CREDIT AGREEMENT........................
3. REPRESENTATIONS AND WARRANTIES...........................................
4. CONDITIONS PRECEDENT AND CONDITIONS SUBSEQUENT...........................
5. COUNTERPARTS.............................................................
6. ACKNOWLEDGEMENT AND CONSENT BY GUARANTORS................................
7. FEES AND COSTS...........................................................
8. JURISDICTION.............................................................
9. GOVERNING LAW............................................................
SCHEDULE 1..................................................................
The Borrowers.............................................................
SCHEDULE 2..................................................................
Guarantors................................................................
SCHEDULE 3..................................................................
Part 1....................................................................
Conditions Precedent Documentation........................................
1. RESOLUTIONS..............................................................
2. MISCELLANEOUS............................................................
3. OPINIONS.................................................................
SCHEDULE 3..................................................................
Part 2....................................................................
SCHEDULE 4..................................................................
The Original Banks........................................................
SCHEDULE 5..................................................................
The Additional Banks......................................................
SCHEDULE 6..................................................................
The Amended and Restated Credit Agreement.................................
THIS SECOND AMENDMENT AND RESTATEMENT AGREEMENT is made the 22nd day of November
2000
BETWEEN
(1) THE DERBY CYCLE CORPORATION, a company incorporated in Delaware, United
States of America, having its principal office at 300 First Stamford Place,
Stamford, CT069026765, U.S.A (the "Company");
(2) THE COMPANIES identified as Borrowers in Schedule 1;
(3) THE COMPANIES as identified as Guarantors in Schedule 2;
(4) CHASE MANHATTAN plc (the "Arranger");
(5) THE FINANCIAL INSTITUTIONS identified as banks in Schedule 4 (the Original
Banks");
(6) THE FINANCIAL INSTITUTIONS identified as banks in Schedule 5 (the
"Additional Banks)"
(7) CHASE MANHATTAN INTERNATIONAL LIMITED (the "Facility Agent");
(8) CHASE MANHATTAN INTERNATIONAL LIMITED (the "Security Agent").
WHEREAS:
(A) By a Credit Agreement dated 12 May 1998, as amended and restated pursuant
to an amendment and restatement agreement dated 3 February 1999 and as
further amended pursuant to an amendment agreement dated 30 April 1999 and
as further amended pursuant to a amendment agreement dated 31 August 1999
and as further amended pursuant to a amendment agreement dated 25 November
1999 and as further amended pursuant to an amendment agreement dated 17
December 1999 and as further amended pursuant to an amendment agreement
dated 3 February 2000 and as further amended pursuant to an amendment
agreement dated 2 March 2000, as further amended pursuant to a waiver and
amendment agreement dated 30 June 2000 and as further amended pursuant to
an amendment and waiver agreement dated 31 July 2000 (collectively the
"Credit Agreement") by and among the Company, Borrowers, Guarantors,
Arranger, the Original Banks, Facility Agent and Security Agent, the
Original Banks have agreed to make certain credit facilities available to
the Borrower.
(B) The parties to the Credit Agreement have agreed that the Credit Agreement
be amended and restated as set out in this Amendment and Restatement
Agreement.
NOW IT IS HEREBY as follows:
1. INTERPRETATION
1.1 In this Amendment and Restatement Agreement:
"Chase Manhattan Bank Collateral Review" means the report on
collateral dated on or about the Amendment Date.
"Effective Date" means the date on which the Facility Agent has
confirmed to the Company and the Banks that it has received
satisfactory evidence that all of the conditions precedent set out in
Schedule 3 Part 1 have been met, in each case in a form and substance
satisfactory to the Facility Agent.
"Hedging Strategy Letter" means the letter in agreed terms from the
Company to the Facility Agent to be entered into within 30 days from
the date of this Amendment and Restatement Agreement setting out the
proposed hedging strategy for the Company.
Terms and expressions defined in the Credit Agreement (as it is
proposed to be amended and restated as set out in and appears in
Schedule 6) shall have the same meanings herein unless the context
otherwise requires or unless otherwise defined in this Amendment and
Restatement Agreement.
2. AMENDMENT AND RESTATEMENT OF THE CREDIT AGREEMENT
On the Effective Date the Credit Agreement shall be amended and restated as
set out in the Schedule 6.
3. REPRESENTATIONS AND WARRANTIES
The Obligors hereby each represent and warrant to the Agents and the Banks
that:
3.1 after giving effect to this Amendment and Restatement Agreement there
will exist no Event of Default or Potential Event of Default under the
Credit Agreement
3.2 after giving effect to this Amendment and Restatement Agreement all
representations and warranties contained in the Credit Agreement and
the other Finance Documents are true, correct and complete in all
material respects on and as at the date hereof except to the extent
such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all
material respects on and as at such earlier date;
3.3 after giving effect to this Amendment and Restatement Agreement each
Obligor has performed all agreements to be performed on its part as
set forth in the Credit Agreement;
3.4 each Obligor is duly organised and validly existing under the laws of
the jurisdiction of its organisation and has all necessary power and
authority to execute and delivery this Amendment and Restatement
Agreement and to consummate the transactions contemplated hereby;
3.5 neither the execution and delivery of this Amendment and Restatement
Agreement, nor the consummation of the transactions contemplated
hereby, violates or will violate (i) any law, regulation, decree or
other legal restriction applicable to any Obligor; (ii) the charter,
by-laws or other constitutional documents of any Obligor; or (iii) any
instrument or agreement to which any Obligor or any of its assets is
subject or by which it is bound;
3.6 there is no legal requirement of any governmental authority (including
any requirement to make any declaration, filing or registration or to
obtain any consent, approval, licence or order) which is necessary to
be met by the Company or any other Obligor in connection with its
execution, delivery or performance of this
Amendment and Restatement Agreement save for the filing or
registration of any security documents entered into in accordance with
paragraph 1 of Schedule 3 Part 2 of this Amendment and Restatement
Agreement, all of which filings and registrations will be effected
promptly after execution;
3.7 this Amendment and Restatement Agreement has been duly authorised,
executed and delivered by each of the Obligors and this Amendment and
Restatement Agreement, the Credit Agreement and the other Finance
Documents to which any Obligor is a party, constitute the legal, valid
and binding obligations of such Obligor; and
3.8 All information provided to the Facility Agent in connection with this
Amendment and Restatement Agreement was or will be as at the time it
was given, true, in all respects (save for minor typographical errors)
(or, in the case of information provided by any Person other than the
Company or its advisors, as far as the board of directors is aware,
was true to the best of its knowledge or belief at the date supplied)
and each Obligor represents that no circumstances have arisen, or any
event has occurred between the date when such information was provided
to the Facility Agent and the date hereof which would render such
information to be untrue, inaccurate or incomplete in any respect.
4. CONDITIONS PRECEDENT AND CONDITIONS SUBSEQUENT
4.1 Without prejudice to the generality of Clause 2, the obligations of
each Finance Party to the Company and the Borrowers under this
Amendment and Restatement Agreement in relation to the Tranche A
Revolving Facility are subject to the fulfilment of all conditions
precedent set out in Schedule 3, part I hereof.
4.2 The Company and the Borrowers undertake that the conditions subsequent
set out in paragraph 1 of Schedule 3, Part 2 shall be completed within
45 days from the date of this Amendment and Restatement Agreement.
4.3 The Company and the Borrowers undertake that the conditions subsequent
set out in paragraph 2 of Schedule 3, Part 2 shall be completed within
30 days from the date of this Amendment and Restatement Agreement.
5. COUNTERPARTS
5.1 This Amendment and Restatement Agreement may be executed in any number
of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall
constitute but one and the same instrument;
5.2 Signature pages may be detached from multiple separate counterparts
and attached to a single document so that all signature pages are
physically attached to the same document.
6. ACKNOWLEDGEMENT AND CONSENT BY GUARANTORS
Each of the Guarantors hereby acknowledges that it has read this Amendment
and Restatement Agreement and consents to the terms thereof and further
hereby confirms and agrees that, notwithstanding the effectiveness of this
Amendment and Restatement Agreement, the obligations of such Guarantors
under their respective Guarantee shall not be impaired or affected and such
Guarantee is and shall continue to be in full force and effect and is
hereby confirmed and ratified in all respects.
7. FEES AND COSTS
The Company shall reimburse the Agents and the Banks for all costs and
expenses (including legal fees, fees incurred by KPMG and fees incurred in
the preparation of the Chase Manhattan Bank Collateral Review) properly
incurred by them and their professional advisers in connection with the
negotiation, preparation and execution of this Amendment and Restatement
Agreement and any related documentation, including but not limited to any
release of security and any filings, registrations or any other action
required by law or otherwise.
8. JURISDICTION
8.1 Courts of England
For the benefit of each Finance Party, each of the Obligors agree that
the courts of England have jurisdiction to hear and settle any action,
suit, proceeding or dispute in connection with this Amendment and
Restatement Agreement or any of the other Senior Finance Documents and
therefore irrevocably submits to the jurisdiction of those courts.
8.2 Non-exclusivity
The submission to the jurisdiction of the English courts does not
restrict the right of a Finance Party to take proceedings against an
Obligor in connection with this Amendment and Restatement Agreement or
any of the other Senior Finance Documents in any other court of
competent jurisdiction, whether concurrently or not.
8.3 Service of process agent
(a) In addition to any other appropriate method of service, each of
the Non-UK Obligors irrevocably agrees that any suit, action or
proceeding may be served on it by being delivered to Derby
Holding Limited at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇
or its registered office and confirms that it has appointed the
Company as its agent for such purpose.
(b) Each of the Non-UK Obligors confirms that failure by its process
agent to notify it of receipt of any process will not invalidate
the proceedings to which it relates.
(c) If the appointment of a process agent ceases to be effective, the
relevant Non-UK Obligor shall immediately appoint a further
Person in England as its process agent in respect of this
Amendment and Restatement Agreement and each of the other Senior
Finance Documents and notify the Facility Agent of such
appointment. If such a Person is not appointed within 15 days of
such notification the Facility Agent shall be entitled to appoint
such a Person.
8.4 Non-convenience of forum
Each of the Non-UK Obligors confirms that the English courts are not
an inconvenient forum and irrevocably waives any right it may have to
object to them on the grounds of inconvenience or otherwise.
9. GOVERNING LAW
This Amendment and Restatement Agreement is governed by and shall be
construed in accordance with English Law.
THIS AGREEMENT has been entered into by the Parties on the date stated at the
beginning of this Amendment and Restatement Agreement.
THE DERBY CYCLE CORPORATION
By:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
The Other Borrowers
RALEIGH INDUSTRIES LIMITED
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
THE DERBY CYCLE CORPORATION LIMITED
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
DERBY HOLDING (DEUTSCHLAND) GMBH
By:
/s/ ▇▇▇▇ ▇▇▇▇
KONINKLIJKE GAZELLE BV
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
RALEIGH INDUSTRIES OF CANADA LIMITED
By:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
RALEIGH EUROPE B.V.
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
RALEIGH B.V.
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ BIKE PARTS GMBH
By:
/s/ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇▇▇ GMBH
By:
/s/ ▇▇▇▇ ▇▇▇▇
DERBY HOLDING LIMITED
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
6
RALEIGH FAHRRADER GMBH
By:
/s/ ▇▇▇▇ ▇▇▇▇
DERBY CYCLE WERKE GMBH
By:
/s/ ▇▇▇▇ ▇▇▇▇
RALEIGH INTERNATIONAL LIMITED
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
CURRAGH FINANCE COMPANY
By:
/s/ ▇▇▇▇ ▇'▇▇▇▇▇
RALEIGH IRELAND LIMITED
By:
/s/ ▇▇▇▇ ▇'▇▇▇▇▇
DERBY HOLDINGS BV
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
The Guarantors
DERBY HOLDING LIMITED
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
RALEIGH INDUSTRIES LIMITED
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
RALEIGH INTERNATIONAL LIMITED
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
DERBY CYCLE CORPORATION LIMITED
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
7
RALEIGH INDUSTRIES OF CANADA LIMITED
By:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
THE DERBY CYCLE CORPORATION
By:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
RALEIGH BV
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
RALEIGH EUROPE BV
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
KONINKLIJKE GAZELLE BV
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
DERBY NEDERLAND BV
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
DERBY HOLDING BV
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
LYON INVESTMENTS BV
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
DERBY HOLDING (DEUTSCHLAND) GMBH
By:
/s/ ▇▇▇▇ ▇▇▇▇
RALEIGH FAHRRADER GMBH
By:
/s/ ▇▇▇▇ ▇▇▇▇
8
NW SPORTGERATE GMBH
By:
/s/ ▇▇▇▇ ▇▇▇▇
DERBY CYCLE WERKE GMBH
By:
/s/ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ BIKE PARTS GMBH
By:
/s/ ▇▇▇▇ ▇▇▇▇
UNIVEGA WORLDWIDE LICENCE GMBH
By:
/s/ ▇▇▇▇ ▇▇▇▇
UNIVEGA BETEILIGUNGEN GMBH
By:
/s/ ▇▇▇▇ ▇▇▇▇
UNIVEGA BIKES & SPORTS EUROPE GmbH
(formerly MS SPORT VERTRIEBS GMBH)
By:
/s/ ▇▇▇▇ ▇▇▇▇
DERBY FAHRRADER GMBH
By:
/s/ ▇▇▇▇ ▇▇▇▇
DERBY WS VERMOGENSWERWALTUNGS GMBH
By:
/s/ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇-▇▇▇▇▇▇▇ GMBH
By:
/s/ ▇▇▇▇ ▇▇▇▇
CURRAGH FINANCE COMPANY
By:
/s/ ▇▇▇▇ ▇'▇▇▇▇▇
RALEIGH IRELAND LIMITED
By:
/s/ ▇▇▇▇ ▇'▇▇▇▇▇
9
TRIUMPH CYCLE CO. LIMITED
By:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇.▇▇▇, INC.
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
DERBY SWEDEN AB
By:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
RALEIGH (SERVICES) LIMITED
By:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
The Arranger
THE CHASE MANHATTAN BANK
By:
/s/ ▇▇▇▇▇ ▇▇▇
The Original Banks
THE CHASE MANHATTAN BANK
By:
/s/ ▇▇▇▇▇ ▇▇▇
ABN AMRO BANK N.V.
By:
/s/ ▇▇▇▇▇ ▇▇▇
SCOTIABANK EUROPE PLC
By:
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCH
By:
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
10
By:
/s/ Ben Marzoik
BANK OF SCOTLAND
By:
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
HSBC BANK PLC
By:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
LLOYDS TSB BANK PLC
By:
/s/ ▇▇▇▇ ▇▇▇▇▇▇
THE SUMITOMO BANK, LIMITED
By:
/s/ ▇▇▇▇▇ ▇▇▇
BHF - BANK AG
By:
/s/ ▇▇▇▇▇ ▇▇▇
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By:
/s/ ▇▇▇▇▇ ▇▇▇
SAN PAOLO IMI SPA
By:
/s/ ▇▇▇▇▇ ▇▇▇
KBC BANK (NEDERLAND) N.V.
By:
/s/ ▇▇▇▇▇ ▇▇▇
BNP PARIBAS
By:
/s/ ▇▇▇▇▇ ▇▇▇
THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND
By:
/s/ ▇▇▇▇▇ ▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ AG
By:
/s/ ▇▇▇▇▇ ▇▇▇
THE BANK OF NOVA SCOTIA
By:
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
The Guarantors
THE BRITISH CYCLE CORPORATION
By:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
BSA CYCLES LIMITED
By:
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
12
The Additional Banks
THE CHASE MANHATTAN BANK
By:
/s/ ▇▇▇▇▇ ▇▇▇
LLOYDS TSB BANK PLC
By:
/s/ ▇▇▇▇ ▇▇▇▇▇▇
KBC BANK (NEDERLAND) N.V.
By:
/s/ ▇▇▇▇▇ ▇▇▇
BNP PARIBAS
By:
/s/ ▇▇▇▇▇ ▇▇▇
ABN AMRO BANK N.V.
By:
/s/ ▇▇▇▇▇ ▇▇▇
HSBC Bank PLC
By:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
The Security Agent
CHASE MANHATTAN INTERNATIONAL LIMITED
By:
/s/ ▇▇▇▇▇ ▇▇▇
The Facility Agent
CHASE MANHATTAN INTERNATIONAL LIMITED
By:
/s/ ▇▇▇▇▇ ▇▇▇
13
SCHEDULE 1
The Borrowers
Name Jurisdiction Of Incorporation
Raleigh Industries Limited England And Wales
Derby Cycle Corporation Limited (formerly England and Wales
Sturmey-▇▇▇▇▇▇ Limited)
Derby Holding (Deutschland) GmbH Germany
Koninklijke Gazelle BV Netherlands
The Derby Cycle Corporation The United States of America
Raleigh Industries of Canada Limited Canada
Raleigh Europe B.V. Netherlands
Raleigh B.V. Netherlands
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Bike Parts GmbH Germany
▇▇▇▇▇▇-▇▇▇▇▇▇▇ GmbH Germany
Derby Holding Limited England and Wales
Raleigh Fahrrader GmbH Germany
Derby Cycle Werke GmbH Germany
Raleigh International Limited England and Wales
Curragh Finance Company Ireland
Raleigh Ireland Limited Ireland
Derby Holding BV Netherlands
14
SCHEDULE 2
Guarantors
Name Jurisdiction of Incorporation
Derby Holding Limited England and Wales
Raleigh Industries Limited England and Wales
Raleigh International Limited England and Wales
Derby Cycle Corporation Limited (formerly England and Wales
Sturmey-▇▇▇▇▇▇ Limited)
Raleigh Industries of Canada Limited Canada
The Derby Cycle Corporation The United States of America
Raleigh BV Netherlands
Raleigh Europe BV Netherlands
Koninklijke Gazelle BV Netherlands
Derby Nederland BV Netherlands
Derby Holding BV Netherlands
Lyon Investments BV Netherlands
Derby Holding (Deutschland) GmbH Germany
Raleigh Fahrrader GmbH Germany
NW Sportgerte GmbH Germany
Derby Cycle Werke GmbH Germany
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Bike Parts GmbH Germany
Univega Worldwide Licence GmbH Germany
15
Name Jurisdiction of Incorporation
Univega Beteiligungen GmbH Germany
Univega Bikes & Sports Europe GmbH (formerly MS Germany
Sport Vertriebs GmbH)
Derby Fahrrader GmbH Germany
Derby WS Vermgenswerwaltungs GmbH Germany
▇▇▇▇▇▇-▇▇▇▇▇▇▇ GmbH Germany
Curragh Finance Company Ireland
Raleigh Ireland Limited Ireland
The British Cycle Corporation Limited England and Wales
Raleigh (Services) Limited England and Wales
Triumph Cycle Company Limited England and Wales
BSA Cycles Limited England and Wales
Derby Sweden AB Sweden
▇▇▇▇▇▇▇▇.▇▇▇, Inc. The United States of America
16
SCHEDULE 3
Part 1
Conditions Precedent Documentation
17
SCHEDULE 3
Part 2
Conditions subsequent documentation
18
SCHEDULE 4
The Original Banks
Name
The Chase Manhattan Bank
ABN Amro Bank N.V.
The Governor and Company of the Bank of Scotland
BHF - Bank ▇▇
▇▇▇▇▇▇▇▇ Bank AG, New York and Grand Cayman branch
Lloyds TSB Bank Plc
HSBC Bank plc
The Bank of Nova Scotia
The Sumitomo Bank, Limited
BNP Paribas
San Paolo IMI SPA
KBC Bank (Nederland) NV
Oldenburgische Landesbank AG
The Governor and Company of the Bank of Ireland
The Industrial Bank of Japan, Limited
19
SCHEDULE 5
The Additional Banks
The Chase Manhattan Bank
------------------------
Lloyds TSB Bank PLC
-------------------
KBC Bank (Nederland) N.V.
-------------------------
BNP Paribas
-----------
ABN Amro Bank N.V.
------------------
HSBC Bank PLC
-------------
20
SCHEDULE 5
The Amended and Restated Credit Agreement
21
FACILITY AGREEMENT
DATED 12 MAY 1998
MULTICURRENCY CREDIT FACILITY
up to DM 209,355,403
THE DERBY CYCLE CORPORATION AND OTHERS
as Borrowers and/or Guarantors
CHASE MANHATTAN plc
as Arranger
THE FINANCIAL INSTITUTIONS
NAMED HEREIN
as Original Banks
THE FINANCIAL INSTITUTIONS
NAMED HEREIN
as Additional Banks
CHASE MANHATTAN INTERNATIONAL LIMITED
as Facility Agent
CHASE MANHATTAN INTERNATIONAL LIMITED
as Security Agent
================================================================================
CONTENTS
1. INTERPRETATION............................................................ 1
1.1 Definitions........................................................... 1
1.2 Financial Terms....................................................... 28
1.3 Construction.......................................................... 33
1.4 Relationship with the Intercreditor Agreements........................ 34
2. THE FACILITY.............................................................. 34
2.1 The Facility.......................................................... 34
2.2 Nature of Banks' obligations and rights............................... 35
2.3 Nature of Borrowers' rights and obligations hereunder................. 36
2.4 Maximum Total Commitments............................................. 36
3. PURPOSE OF FACILITIES..................................................... 37
4. CONDITIONS PRECEDENT TO FIRST UTILISATION UNDER THE TRANCHE A REVOLVING
FACILITY.................................................................. 37
5. CONDITIONS PRECEDENT TO EACH UTILISATION BY WAY OF ADVANCES
AND STANDBY L/CS.......................................................... 37
6. UTILISATION OF THE FACILITIES............................................. 38
6.1 Delivery of a Drawdown Request........................................ 38
6.2 Completion of Drawdown Request........................................ 38
6.3 Amount of each Bank's participation in an Advance..................... 39
6.4 Delivery of a Standby L/C Request..................................... 39
6.5 Completion of Standby L/C Request..................................... 40
6.6 Issuing of Standby L/Cs............................................... 41
6.7 Facility Agent's Authority............................................ 41
6.8 Copy of Standby L/C................................................... 41
6.9 No Enquiry............................................................ 42
6.10 Definitions.......................................................... 42
6.11 Calculation.......................................................... 47
6.12 Determination........................................................ 47
6.13 Undrawn amount....................................................... 47
6.14 Deutschmarks in lieu of Optional Currency............................ 48
6.15 Dutch Borrowers...................................................... 48
7. ANCILLARY FACILITIES...................................................... 48
7.1 Ancillary Facilities.................................................. 48
7.2 Operation of Ancillary Facilities..................................... 50
7.3 Nomination............................................................ 51
7.4 Delivery of Nominee Notice............................................ 51
7.5 Date of Accession..................................................... 51
7.6 Execution of Nominee Notice........................................... 51
7.7 Rights and Obligations of the Parties................................. 51
7.8 Maximum Ancillary Commitment.......................................... 52
7.9 Calculations.......................................................... 52
7.10 Intercreditor........................................................ 52
7.11 Term of Ancillary Facility........................................... 52
8. INTEREST.................................................................. 52
8.1 Standby L/C Commission................................................ 52
8.2 Interest rate......................................................... 53
8.3 Due date.............................................................. 53
8.4 Duration.............................................................. 53
8.5 Notification of LIBOR by Facility Agent............................... 53
9. DEFAULT INTEREST.......................................................... 53
9.1 Failure to Pay........................................................ 53
9.2 Rate................................................................. 53
9.3 Default Interest Period.............................................. 53
9.4 Unexpired Portion.................................................... 54
9.5 On Demand............................................................ 54
10. MARKET DISRUPTION........................................................ 54
10.1 Disruption events................................................... 54
10.2 Effect.............................................................. 54
11. REPAYMENT, PREPAYMENT AND CANCELLATION................................... 55
11.1 Repayment of Advances............................................... 55
11.2 Facility Agent to notify Banks of demand............................ 55
11.3 L/C indemnity....................................................... 55
11.4 Banks' Discretion................................................... 56
11.5 Voluntary cancellation.............................................. 56
11.6 Mandatory Prepayment on Listing..................................... 57
11.7/ No reborrowing of cancelled amounts/............................... 58
11.8 Prepayment Fee...................................................... 58
11.9 Cancellation and Prepayment of a Bank's Tranche A Revolving
Commitment, Tranche B Revolving Commitment and Standby
L/C Commitment...................................................... 58
11.10 Notices of prepayment and cancellation............................. 58
11.11 Notification of Bank(s)............................................ 59
11.12 Only method........................................................ 59
11.13 European Economic and Monetary Union............................... 59
12. PARTIAL PAYMENTS......................................................... 61
13. PAYMENTS................................................................. 61
13.1 To Facility Agent................................................... 61
13.2 Distribution by the Agents.......................................... 62
13.3 Currency............................................................ 63
13.4 Set-off and counterclaim............................................ 63
14. TAXES.................................................................... 64
14.1 Payment of Taxes.................................................... 64
14.2 Gross-up............................................................ 64
14.3 Tax indemnity....................................................... 64
14.4 Notification of claims.............................................. 64
14.5 Tax receipts........................................................ 65
14.6 Tax Saving.......................................................... 65
14.7 U.S Taxation-delivery of forms and statements....................... 65
14.8 Double tax-treaties................................................. 66
14.9 Qualifying Bank..................................................... 67
15. INCREASED COSTS.......................................................... 67
15.1 Indemnity for increased costs....................................... 67
15.2 Exceptions.......................................................... 68
15.3 Notification by Bank................................................ 68
15.4 Regulation D Compensation........................................... 68
16. ILLEGALITY............................................................... 69
16.1 Illegality in relation to Advances.................................. 69
16.2 Illegality in relation to Standby L/Cs.............................. 69
17. MITIGATION............................................................... 69
17.1 Mitigation.......................................................... 69
17.2 Costs and Expenses of Mitigation.................................... 70
18. REPRESENTATIONS AND WARRANTIES........................................... 71
18.1 General representations and warranties.............................. 71
18.2 Repetition of representations and warranties........................ 80
19. UNDERTAKINGS............................................................. 80
19.1 Information undertakings............................................ 80
19.2 Form of financial statements........................................ 87
19.3 Variation of financial undertakings................................. 87
19.4 Positive undertakings............................................... 88
20. FINANCIAL UNDERTAKINGS................................................... 108
21. EVENTS OF DEFAULT........................................................ 112
21.1 The Events of Default............................................... 112
21.2 Acceleration........................................................ 117
22. ADDITIONAL BORROWERS..................................................... 118
23. GUARANTEES............................................................... 118
23.1 Guarantee........................................................... 118
23.2 Continuing Guarantee................................................ 120
23.3 Reinstatement....................................................... 120
23.4 Waiver of Defences.................................................. 121
23.5 Immediate Recourse.................................................. 122
23.6 Preservation of Rights.............................................. 122
23.7 Non-competition..................................................... 122
23.8 Additional Security................................................. 123
23.9 Certificate......................................................... 123
23.10 Guarantee Fees..................................................... 123
24. RELEASE OF GUARANTORS AND SECURITY....................................... 123
24.1 Guarantors.......................................................... 123
24.2 Assets.............................................................. 123
24.3 Conditions for Release.............................................. 123
24.4 Release of Group Members............................................ 124
25. INDEMNITIES.............................................................. 124
25.1 Indemnifiable events................................................ 124
25.2 Stamp duty.......................................................... 125
26. FEES..................................................................... 125
26.1 Commitment fee...................................................... 125
26.2 Agency fees......................................................... 125
26.3 Arrangement fee..................................................... 126
26.4 Participation Fee................................................... 126
26.5 Amendment Fee....................................................... 126
27. COSTS AND EXPENSES....................................................... 126
27.1 Initial Costs....................................................... 126
27.2 Amendments.......................................................... 126
27.3 Protection, enforcement, etc........................................ 126
28. THE AGENTS AND THE ARRANGER.............................................. 127
28.1 Appointment of the Agents........................................... 127
28.2 Duties of the Agents................................................ 128
28.3 Exculpatory provisions.............................................. 128
28.4 Assumptions......................................................... 129
28.5 Agents and Arranger not responsible to other Parties................ 129
28.6 Delegation and advisers............................................. 129
28.7 Indemnity........................................................... 130
28.8 Resignation of the Agents........................................... 130
28.9 Separate entity..................................................... 131
28.10 Reliance........................................................... 131
28.11 Credit approval.................................................... 131
28.12 Tax Confirmation................................................... 131
28.13 Miscellaneous provisions........................................... 131
29. TRANSFERS................................................................ 132
29.1 Obligors............................................................ 132
29.2 Banks............................................................... 133
29.3 Time of transfer.................................................... 133
29.4 Administration fee.................................................. 133
29.5 Additional amounts payable to transferee............................ 133
29.6 Disclosure of information........................................... 133
30. REDISTRIBUTION PROVISIONS................................................ 134
30.1 Redistributions..................................................... 134
30.2 Repayment of a Discharged Amount.................................... 134
30.3 Exceptions.......................................................... 134
31. CALCULATIONS AND EVIDENCE OF DEBT........................................ 135
31.1 Calculations........................................................ 135
31.2 Financial Accounts.................................................. 135
31.3 Control account..................................................... 135
31.4 Standby L/C Accounts................................................ 135
31.5 Actual amount received.............................................. 136
31.6 Prima facie evidence................................................ 136
31.7 Certificates and determinations..................................... 137
31.8 Reference Banks..................................................... 137
32. AMENDMENTS AND WAIVERS................................................... 137
32.1 Majority Banks...................................................... 137
32.2 All Banks........................................................... 137
32.3 Super Majority Banks................................................ 137
32.4 All Parties......................................................... 138
32.5 The Agents.......................................................... 138
33. NOTICES.................................................................. 138
33.1 Method of delivery.................................................. 138
33.2 Addresses........................................................... 138
33.3 Agents' details..................................................... 138
33.4 Receipt of notices.................................................. 139
33.5 Language............................................................ 139
34. PARTIAL INVALIDITY....................................................... 139
35. REMEDIES AND WAIVERS..................................................... 140
36. COUNTERPARTS............................................................. 140
37. SECURITY................................................................. 140
38. THIRD PARTY RIGHTS....................................................... 140
39. JURISDICTION............................................................. 140
39.1 Courts of England................................................... 140
39.2 Non-exclusivity..................................................... 140
39.3 Service of process agent............................................ 140
39.4 Non-convenience of forum............................................ 141
40. GOVERNING LAW............................................................ 141
SCHEDULE 1................................................................... 142
THE BORROWERS............................................................ 142
SCHEDULE 2................................................................... 143
THE GUARANTORS........................................................... 143
SCHEDULE 3................................................................... 145
THE ORIGINAL BANKS....................................................... 145
SCHEDULE 4................................................................... 146
THE ADDITIONAL BANKS..................................................... 146
SCHEDULE 5................................................................... 147
THE COMMITMENTS.......................................................... 147
SCHEDULE 6.................................................................. 148
ACCESSION AGREEMENT..................................................... 148
SCHEDULE 7.................................................................. 151
DOCUMENTS TO ACCOMPANY ADDITIONAL BORROWER/GUARANTOR ACCESSION
AGREEMENT............................................................... 151
SCHEDULE 8.................................................................. 153
Part 1.................................................................. 153
FORM OF DRAWDOWN REQUEST................................................ 153
Part 2.................................................................. 154
FORM OF STANDBY L/C REQUEST............................................. 154
Part 3.................................................................. 155
FORM OF STANDBY L/C..................................................... 155
SCHEDULE 9.................................................................. 161
FORM OF NOVATION CERTIFICATE............................................ 161
THE SCHEDULE................................................................ 163
SCHEDULE 10................................................................. 164
ADDITIONAL COSTS........................................................ 164
SCHEDULE 11................................................................. 166
COMPLIANCE CERTIFICATE.................................................. 166
MATERIAL GROUP MEMBERS.................................................. 167
SCHEDULE 13................................................................. 168
NOMINEE NOTICE.......................................................... 168
SCHEDULE 14................................................................. 170
SECURITY DOCUMENTS...................................................... 170
THIS FACILITY AGREEMENT is made the 12th day of May 1998
BETWEEN:
(1) THE DERBY CYCLE CORPORATION a company incorporated in Delaware, the United
States of America, having its principal office at 300 First Stamford Place,
Stamford, CT06902675 U.S.A (the "Company");
(2) THE COMPANIES identified as Borrowers in Schedule 1;
(3) THE COMPANIES identified as Guarantors in Schedule 2;
(4) CHASE MANHATTAN plc (the "Arranger");
(5) THE FINANCIAL INSTITUTIONS identified as Original Banks in Schedule 3;
(6) THE FINANCIAL INSTITUTIONS identified as Additional Banks in Schedule 4;
(7) CHASE MANHATTAN INTERNATIONAL LIMITED (the "Facility Agent"); and
(8) CHASE MANHATTAN INTERNATIONAL LIMITED (the "Security Agent").
WHEREAS
A. The Original Banks have agreed, subject to the terms and conditions of this
Agreement, to provide a revolving credit facility of up to DM182,885,853
(or the equivalent thereof in other currencies) of which up to DM65,000,000
may be utilised by way of Ancillary Facilities (less amounts utilised by
the issuance of Standby L/Cs under the Standby L/C Facility) and
DM15,000,000 (or the equivalent in other currencies) may be utilised by the
issuance of Standby L/Cs.
B. The Additional Banks have agreed, subject to the terms and conditions of
this Agreement to provide a revolving credit facility of up to DM26,469,550
(or the equivalent thereof in other currencies)
PART 1
1. INTERPRETATION
1.1 Definitions
In this Agreement:
"Accession Agreement" means:
(a) when designated "Borrower", an agreement substantially in the form of
Schedule 6 made pursuant to Clause 22 (together the "Borrower Accession
Agreements");
(b) when designated "Guarantor", an agreement substantially in the form of
Schedule 6 made pursuant to Clauses 19.4(d), 19.4(e), 19.4(f) or 19.4(g)
(together the "Guarantor Accession Agreements"); and
(c) without any such designation, a Borrower Accession Agreement or a Guarantor
Accession Agreement and "Accession Agreements", without any such
designation means some or all
1
(as the context requires) of the Borrower Accession Agreements and the
Guarantor Accession Agreements together.
"Accountant's Report" means each of or, as the context requires, any of
(i) the reports dated on or before Closing prepared by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ on the
Group as a result of separate letters of instruction from each of the
Company and the Arranger in relation thereto;
(ii) the reports prepared by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ dated 31 January 1998 and August
1998 and made in relation to Western State Import Inc and Bejka Trading
AB and in connection with the Diamond Back Acquisition; and
(iii) the Additional Accountant Report.
or in any such case such report as the Agent may otherwise require.
"Accounts" has the meaning given to such term in Clause 6.10.
"Accounting Date" means each 31 December regardless of which day it falls upon,
and each 31 March, 30 June, 30 September, provided that if any such date does
not fall on a Sunday, then the date which is the Sunday immediately prior to or
after such date in accordance with the Company's usual accounting practice as
notified to the Facility Agent prior to the date of this Agreement.
"Account Debtor" has the meaning given to such term in Clause 6.10.
"Accounting Period" in relation to any Person means any period of approximately
one month, three months or one year for which Financial Accounts of such Person
are required to be prepared for the purposes of this Agreement ending, in the
case of each quarterly and each one year period, on an Accounting Date.
"Acquired Assets" means the shares in the capital of the Subsidiaries of the
Company immediately following the Recapitalisation.
"Additional Accountant's Report" means any report prepared by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ on
the Group.
"Additional Banks" means each of the following:
(a) each bank listed in Schedule 4 under the heading "Additional Bank";
(b) each bank or other financial institution to which rights and/or obligations
under this Agreement as an Additional Bank are assigned or transferred
pursuant to Clause 29.2 or which assumes rights and obligations pursuant to
a Novation Certificate; and
(c) any successor or successors in title to any of the foregoing,
"Additional Borrower" means any entity which becomes party to this Agreement as
a Borrower pursuant to a Borrower Accession Agreement.
"Additional Cost" in relation to each Advance or Overdue Amount means, for the
Term relating to that Advance or, as the case may be, Default Interest Period
relating to that Overdue Amount, the cost as calculated by the Facility Agent in
accordance with Schedule 10 imputed to each Bank participating in such Advance
or Overdue Amount through a Facility Office in the United Kingdom of compliance
with the mandatory liquid assets requirements of the Bank of England during that
2
Term, or as the case may be, that Default Interest Period and/or any charge
imposed by the Financial Services Authority (or any other authority which
replaces all or any of its functions) expressed as a percentage rate per annum.
"Additional Guarantor" means any entity which becomes a party hereto as a
Guarantor pursuant to a Guarantor Accession Agreement or otherwise provides a
Guarantee.
"Adjusted Available Amount" has the meaning given to such term in Clause 6.10.
"Adjusted Borrowing Base" has the meaning given to such term in Clause 6.10.
"Advance" means a Tranche A Advance, or, as the context requires a Tranche B
Advance.
"Affiliate" means, in relation to a body corporate, any of its Holding Companies
or Subsidiaries or any other Subsidiary of any of its Holding Companies.
"Agent" means:
(a) when designated "Facility", includes any of its successors pursuant to
Clause 28.8;
(b) when designated "Security", includes any of its successors pursuant to
Clause 28.8 and any corresponding provision of any Security Document; and
(c) without any such designation, the Facility Agent or the Security Agent, as
the context requires, and "Agents" without any such designation means one
or more of the Facility Agent and the Security Agent, as the context
requires.
"Amendment Date" means 22 November 2000;
"Amendment and Restatement Agreement" means the second amendment and restatement
agreement of this Agreement relating to the provision of the Tranche A Revolving
Facility to be entered into on 22 November 2000.
"Ancillary Bank" means any Original Bank which becomes an Ancillary Bank by the
operation of Clause 7;
"Ancillary Commitment" means in relation to an Ancillary Bank, the maximum
amount (actual or contingent) from time to time of the Ancillary Facilities to
be made available by that Ancillary Bank which has been authorised as such under
Clause 7.1(a) to the extent not cancelled under this Agreement.
"Ancillary Outstanding" means, at any time, and with respect to any Ancillary
Bank, the Deutschmark Equivalent of all the following amounts outstanding at
such time under the Ancillary Facilities of that Ancillary Bank then in force:
(a) all amounts of principal then outstanding under any overdraft, BACS, cheque
drawing or other current account facilities;
(b) twenty per cent of he gross amounts payable to that Ancillary Bank under
any contracts (for a period not exceeding eighteen months) entered into for
the provision of spot or forward foreign exchange facilities or the
purchase of foreign exchange options for a period not exceeding eighteen
months (in each case in accordance with the Approved Hedging Programme) (or
such other amount as such Ancillary Bank may agree with the Facility Agent
3
and the Group Member to whom the relevant facilities are made available in
accordance with its usual practice for calculating exposure for similar
facilities);
(c) the maximum face amount (excluding amounts stated to be in respect of
interest) of all guarantees, bonds and letters of credit then outstanding
under any guarantee, bonding or letter of credit facilities; and
(d) in respect of any other facility or financial accommodation such other
amount as the relevant Ancillary Bank may (acting reasonably and in
consultation with the Facility Agent and the Obligors' Agent) determine
fairly represents the aggregate exposure at such time of the Ancillary Bank
providing the same.
"AON Insurance Report" means the insurance review of Derby Bicycle Group
prepared by AON Mergers and Acquisitions Group dated February 1998.
"AON Pensions Report" means the employee benefits due diligence report on the
Derby Bicycle Group prepared by AON Consulting dated 4 December 1997.
"Applicable Accounting Principles" means, for the purposes of the preparation
and/or audit of the Completion Accounts, Pre-Closing Accounts, the Additional
Accountant's Report and any Financial Accounts (whether combined, consolidated
or unconsolidated) of the Company and/or the Group, to be delivered under this
Agreement, the accounting principles and practices generally accepted in the
United States of America, and for Group Members other than the Company the
accounting principles and practices generally accepted in their respective
country of incorporation and in each case, approved by the relevant accounting
standards board or other applicable authority and which are the same as the
accounting principles and practices applied in the preparation of the Business
Plan and any variation of such accounting principles and practices which has
been agreed in writing by the Majority Banks.
"Approved Bank" means a Bank whose long term unsecured unsubordinated debt
rating is at least A2 (Moody's) or A (Standard & Poors) that has been given and
has acknowledged all notices reasonably required by the Facility Agent and in
substantially the agreed form and/or required by the Security Documents and
through a branch situated in Ireland, England, Germany or the Netherlands (as
applicable) or through such other branch of a Bank situated in a country not
specifically mentioned above provided that the Facility Agent has, in respect of
any such other branch, previously given its approval to such arrangement prior
thereto.
"Approved Hedging Programme" means, as at the Amendment Date, the paper so
entitled, in the agreed form provided by the Company as the same may be amended
from time to time with the prior written consent of the Facility Agent.
"Approved Provisioning Procedure" means, as at the Amendment Date the paper so
entitled in the agreed form provided by the Company as the same may be amended
from time to time with the prior written consent of the Facility Agent which,
among other matters, will include a restriction that the total amount of
provisioning for the year to 31 December 2000 shall not exceed $22,000,000.
"Articles of Association" means, in relation to any Group Member, its articles
of association or by-laws (or equivalent in the country of its incorporation) as
the same are amended from time to time.
"ATK Report" means any report prepared by ATK in relation to the Group.
"Auditors" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (or any successor through merger) and/or any
other firm of independent public accountants of international standing approved
by the Facility Agent, which is appointed to audit the consolidated annual
accounts of the Company.
4
"Authorised Signatory" in relation to any Obligor and any communication to be
made or document to be executed or certified by that Obligor means, at any time,
any Person:
(a) who is at such time duly authorised by a resolution of the board of
directors of that Obligor or by virtue of his appointment by that Obligor
to a particular office to make that communication or to execute or certify
that document on behalf of that Obligor and in respect of whom the Facility
Agent has received a certificate of a director or the secretary of that
Obligor setting out the name and signature of that Person and confirming
that Person's authority so to act; and
(b) in respect of whom no notice has been received by the Facility Agent from
that Obligor to the effect that Person is no longer an Authorised Signatory
of that Obligor.
"Availability Period" means subject to the terms of this Agreement:
(a) in respect of the Tranche A Revolving Facility, each of the periods from 1
January 2001 until 11 May 2001 and 1 January 2002 until 11 May 2002;
(b) in respect of the Tranche B Revolving Facility and the Standby L/C
Facility, the period from the opening of business in London on the date of
this Agreement to close of business in London on the day falling one month
prior to the Tranche B Final Repayment Date or such later date as all the
Banks may agree in writing on or after the date hereof; and
(c) in respect of an Ancillary Facility, as the same is determined in
accordance with Clause 7.
"Bank" means any one of the following:
(a) each Original Bank, each Additional Bank and each Ancillary Bank;
(b) any successor or successors in title to any of the foregoing,
(and "Banks" shall mean all of the Banks), provided that upon (i) termination in
full of all the Tranche A Revolving Commitment, Tranche B Revolving Commitment,
the Standby L/C Commitment and the Ancillary Commitment of any Bank, and (ii)
irrevocable payment in full of all amounts which may be or become payable to
such Bank under the Senior Finance Documents, such Bank shall not be regarded as
being a Bank for the purposes of determining whether any provision of any of the
Senior Finance Documents requiring consultation with or the consent or approval
of or instructions from the Banks or the Majority Banks has been complied with.
"Beneficiary" means, in respect of a Standby L/C, the Person in whose favour
such Standby L/C is issued provided that Person is not a Group Member
incorporated in South Africa or a financial institution providing credit to a
Group Member incorporated in South Africa.
"▇▇▇▇▇▇▇▇.▇▇▇" means ▇▇▇▇▇▇▇▇.▇▇▇, Inc.
"▇▇▇▇▇▇▇▇.▇▇▇ Licence" means the licence in an agreed form granted by the
Company to ▇▇▇▇▇▇▇▇.▇▇▇ to enable Bikeshop to utilise certain Intellectual
Property Rights as more particularly set out therein.
"▇▇▇▇▇▇▇▇.▇▇▇ Intellectual Property Rights" means all Intellectual Property
Rights in which ▇▇▇▇▇▇▇▇.▇▇▇ has legal and beneficial title or otherwise is
entitled to use in relation to its business.
5
"▇▇▇▇▇▇▇▇.▇▇▇ Security Agreement" means the general security agreement granted
by ▇▇▇▇▇▇▇▇.▇▇▇ to the Security Trustee dated 4 April 2000 together with the
domain name assignments executed in blank.
"▇▇▇▇▇▇▇▇.▇▇▇ Stock Option Plan" means the stock option plan in respect of
▇▇▇▇▇▇▇▇.▇▇▇ which was adopted by the Board on 31 March 2000;
"▇▇▇▇▇▇▇▇.▇▇▇ Information Memorandum" means the memorandum in an agreed form
prepared by ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ and dated 27 March 2000 detailing the business of
▇▇▇▇▇▇▇▇.▇▇▇ and the scope of its operations.
"Borrower" means each entity identified as a Borrower in Schedule 1 and each
Additional Borrower (together the "Borrowers").
"Borrowing Base" has the meaning given to such term in Clause 6.10.
"Borrowing Base Summary" has the meaning given to such term in Clause 6.10.
"Business Day" means:
(a) a day (excluding a Saturday and Sunday) on which banks and foreign exchange
markets are open for business in London and Frankfurt; and
(b) (in respect of a day on which a payment or other transaction in an Optional
Currency is required under this Agreement) a day (not being a Saturday or
Sunday) on which banks and foreign exchange markets are also open for
business in the principal financial centre of the country of such Optional
Currency.
"Business Plan" means the document dated on or about the Closing date in the
agreed form provided to the Facility Agent at Closing and identified by the
Company and the Facility Agent as being the Business Plan.
"Canadian Borrower" means any Borrower incorporated in Canada.
"Canadian Dollars" means the lawful currency for the time being of Canada.
"Cash" means any credit balances on any deposit, savings or current account with
a Bank and cash in hand.
"Cash Collateral Amount" has the meaning given to such term in Clause 6.10.
"Cash Equivalent Investments" means:
(a) debt securities denominated in Sterling issued by the Government of the
United Kingdom or Dollars issued by the Government of the United States of
America having not more than six months to final maturity which are not
convertible into any other form of security;
(b) debt securities (denominated in Dollars or an Optional Currency) which have
not more than 180 days to final maturity, are not convertible into any
other form of security, are rated at least P-1 (Moody's) or A-1 (Standard &
Poors) and are not issued or guaranteed by any Group Member;
(c) any cash deposits which have not more than a 90 day term denominated in
Sterling or Dollars; and
6
(d) such other securities (if any) as are approved as such in writing by the
Facility Agent,
Provided that in each case the debt securities, cash deposits, or other
securities (as referred to in paragraphs (a) to (d) inclusive above), are
beneficially owned by an Obligor and are deposited with an Approved Bank.
"Certificate of Incorporation" means the amended and restated Certificate of
Incorporation of the Company in force as at 22 November 2000.
"Certified Copy" means, in respect of any document, agreement or communication
to be delivered in connection with this Agreement, a copy thereof which has been
certified by an Authorised Signatory of the Person providing the document,
agreement or communication as being a true copy of the original or their duly
appointed solicitor or other legal counsel.
"The Chase Manhattan Bank Collateral Review" means the report on collateral
prepared by the Chase Manhattan Bank, Collateral Department dated on or around
the date hereof.
"Chief Executive Officer" means ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or in his absence his deputy
(being an Authorised Signatory of the Company) and their respective successors
from time to time.
"Chief Financial Officer" means the Group Financial Controller of the Company
or, as the case may be, the Chief Financial Officer of the Company, (being [▇▇▇
▇▇▇▇▇]at Closing) or in his absence his deputy (being an Authorised Signatory of
the Company).
"Closing" means 12 May 1998.
"Completion Accounts" means the accounts that are to be prepared by the Company
on a proforma basis in respect of the period commencing on 1 January 2000 and
ending on 1 October 2000 containing a proforma balance sheet prepared on the
assumption that the Subordinated Finance Documents are executed and in full
force and effect prior to or on 1 October 2000, a profit and loss statement and
a cash flow statement of the Group as at 1 October 2000 together with a
reconciliation of any material items to the accounts as required by the Facility
Agent.
"Compliance Certificate" means a Compliance Certificate in substantially the
same form as is set out at Schedule 11.
"Concours Group Report" means any report prepared by the Concours Group in
relation to the Group.
"Dangerous Substance" means any radioactive, radiowave, electromagnetic,
microwave emissions and any natural or artificial substance (whether in the form
of a solid, liquid, gas or vapour) the generation, transportation, storage,
treatment, use or disposal of which (whether alone or in combination with any
other substance) including (without limitation) any controlled, special
hazardous, toxic, radioactive or dangerous waste or discharge, gives rise to a
risk of causing material harm to man or any other living organism or materially
damaging the Environment or public health or welfare.
"Debentures" means each of the debentures governed by the laws of England
entered into by certain Group Members in favour of the Security Agent and
forming part of the Security Documents (each a "Debenture").
"Default" means an Event of Default or a Potential Event of Default.
"Default Interest Period" is defined at Clause 9.1.
7
"Derby International" means Derby International Corporation S.A..
"Derby L.L.C." means DC Cycle L.L.C..
"Deutschmarks" and "DM" means the lawful currency from time to time of the
Federal Republic of Germany.
"Deutschmark Amount" in relation to any Advance or Standby L/C means:
(a) (if denominated in Deutschmarks) the principal amount thereof; or
(b) (if denominated in an Optional Currency) the Deutschmark Equivalent of the
principal amount thereof calculated, in the case of an Advance not
denominated in Sterling, two Business Days prior to its Drawdown Date, in
the case of an Advance denominated in Sterling on its Drawdown Date and, in
the case of a Standby L/C, on the date that the Standby L/C Request
relating thereto was delivered to the Facility Agent under this Agreement.
"Deutschmark Equivalent" in relation to an amount expressed or denominated in a
currency other than Deutschmarks means the equivalent thereof in Deutschmarks
converted at the Facility Agent's Spot Rate of Exchange on the date of the
relevant calculation.
"DFS" means Derby Finance S.a.r.l..
"Diamond Back Acquired Assets" means the assets acquired by the Company, or as
the case may be, the Swedish Obligor pursuant to the Diamond Back Acquisition
Agreement.
"Diamond Back Acquisition" means the acquisition by the Company and Derby Sweden
AB of certain assets pursuant to the Diamond Back Acquisition Agreement.
"Diamond Back Acquisition Agreement" means the acquisition agreement dated 8
December 1998 and made between the Company and Derby Sweden AB as purchasers and
Diamond Back International Limited, Western States Import Company Inc and Bejka
Trading AB as vendors;
"Diamond Back Acquisition Legal Due Diligence Report" means each of:
(i) the report prepared by ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ dated 9 December 1998 in respect of
the Diamond Back Acquisition addressed to the Arranger, the Facility Agent
and the Security Agent; and
(ii) the report dated 17 December 1998 and prepared by ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ and
addressed to the Company and Derby Holding BV in respect of the Diamond
Back Acquisition Agreement.
"Directors" means each of ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇ ▇▇▇▇▇,
▇▇▇▇ ▇. Finden-Crofts, A. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (each a
"Director").
"Disclosure Exhibits" means the disclosure exhibits given in respect of the
Recapitalisation Agreement on or about the date of the Recapitalisation
Agreement in the agreed form together with all schedules, annexures and exhibits
thereto forming the "Disclosure Exhibits" referred to in the Recapitalisation
Agreement.
"Disclosure Letter" means the letter accompanying the Disclosure Exhibits.
"Dollars" and "$" means the lawful currency for the time being of the United
States of America.
8
"Dormant Company" means each Group Member which is not an Obligor, does not
trade (whether for its own account or for that of another), is not required to
make entries into its accounting records in accordance with Section 221 of the
Companies ▇▇▇ ▇▇▇▇ (or any equivalent legislation in the jurisdiction of
incorporation of such company) or, to the extent that there is no equivalent
legislation in the jurisdiction of incorporation of such company, would be a
Dormant Company if the principles enshrined in Section 221 of the Companies ▇▇▇
▇▇▇▇ were applied to it and does not hold or own (whether legally or
beneficially) any assets or property with a book value in excess of $10,000 (or
its equivalent in other currencies) other than amounts due from other Group
Members of no more than $50,000; or owe or have outstanding any liabilities with
a book value in excess of $10,000 (or its equivalent in other
currencies)(excluding liabilities owed to Obligors) Provided that,
notwithstanding the foregoing, a Group Member that holds any interest in any
Material Intellectual Property Right shall not be a Dormant Company.
"Drawdown Date" means, in respect of an Advance, the date such Advance is made,
or is proposed to be made, under this Agreement.
"Drawdown Request" means a request substantially in the form set out at Part 1
of Schedule 7.
"Drawdown Report" means a report by KPMG in agreed form confirming the purpose
and use of proceeds to be drawn down, addressed to the Facility Agent to be
presented with any Drawdown Request.
"Dutch Borrower" means a Borrower incorporated in the Netherlands.
"Dutch Guilders" and "DFl" means the lawful currency from time to time.of the
Kingdom of the Netherlands
"Eligible Finished Goods" has the meaning given to such term in Clause 6.10.
"Eligible Receivables" has the meaning given to such term in Clause 6.10.
"Eligible Raw Materials" has the meaning given to such term in Clause 6.10.
"Encumbrance" means any security, assignation in security, bond and floating
charge, mortgage, pledge, lien, charge, assignment for the purpose of providing
security, hypothecation, right in security, security interest or trust
arrangement for the purpose of providing security, and any other security
agreement or other arrangement having the effect of providing security
(including, without limitation, the deposit of monies or property with a Person
with the primary intention of affording such Person a right of set-off or lien).
"Engagement Letter" means the letter from KPMG to the Company dated on or about
the Amendment Date, in relation to the Phase II monitoring work in relation to
the Group the terms of which are acknowledged and accepted by the Company in a
form satisfactory to the Agent, together with a letter of reliance from KPMG,
acknowledged and accepted by the Facility Agent for and on behalf of the Banks.
"Environment" means all, or any of, the following media, the air (including,
without limitation, the air within buildings and the air within other natural or
man-made structures above or below ground), water (including, without
limitation, ground and surface water) and land (including, without limitation
surface and sub-surface soil).
"Environmental Claim" means any claim by any Person:
9
(a) in respect of any loss or liability suffered or incurred by that Person as
a result of or in connection with any violation of Environment Law; or
(b) that arises as a result of or in connection with Environmental
Contamination and that could give rise to any remedy or penalty (whether
interim or final) that may be enforced or assessed by private or public
legal action or administrative order or proceedings including, without
limitation, any such claim that arises from injury to Persons, property or
natural resources.
"Environmental Contamination" means each of the following and their
consequences:
(a) any material release, emission, leakage or spillage of any Dangerous
Substance at or from any site owned, occupied or used by any Group Member
into any part of the Environment; or
(b) any material accident, fire, explosion or sudden event at any site owned,
occupied or used by any Group Member which is directly or indirectly caused
by or attributable to any Dangerous Substance; or
(c) any other pollution of the Environment.
"Environmental Law" means all laws (including, without limitation, common law),
regulations, codes of practice, circulars, guidance notices and the like having
legal effect (whether in the United Kingdom, the United States of America or
elsewhere) concerning the protection of human health, the Environment, the
conditions of the work place or the generation, transportation, storage,
treatment or disposal of Dangerous Substances.
"Environmental Reports" means each of the environmental reports prepared by ERM
dated December 1997 or January 1998 in relation to the Group and the ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇ Memorandum dated 16 December 1997 entitled "Summary of Material
Environmental Issues" (each an "Environmental Report").
"Environmental Licence" means any permit, licence, authorisation, consent or
other approval required by any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974 of the USA as
amended from time to time or any successor statute and any regulations
promulgated thereunder.
"ERISA Affiliate" means each Person (as defined in Section 3(9) of ERISA whether
or not incorporated, which is a Subsidiary of or under common control or would
be considered a single employer with any Obligor domiciled in the United States
within the meaning of section 414(b), (c), (m) or (o) of the IRC and regulations
promulgated under those sections or within the meaning of section 4001(b) of
ERISA.
"Escrow Letter" means the letter from the Facility Agent acknowledged by the
Company dated on or about 12 May 1998 regarding the various payments made at or
about the Closing in respect of the Closing.
"Euro-Dollar Reserve Percentage" means, for any day, that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System of the USA (or any successor), for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion Dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category or
extensions of credit or other assets which includes loans by a non-United States
of America office of any bank to United States of America residents).
10
"Event of Default" means any one of the events specified in Clause 21.1.
"Exchange Agreement" means the exchange agreement executed and delivered or to
be executed and delivered (as the case may be) by Derby, L.L.C and Perseus Cycle
L.L.C pursuant to the terms of the Recapitalisation Agreement and in the form
exhibited thereto.
"Executive" means any of ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇-▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ and any
replacement for any of them (together the "Executives").
"Executive Officer" means any of the Chief Executive Officer and the Chief
Financial Officer.
"Existing Financial Indebtedness" means the Financial Indebtedness of the
Company and its Subsidiaries immediately prior to 12 May 1998 and defined as
such in the Funds Flow Memorandum and which was repaid in full, and the
commitment in respect thereof (if any) cancelled and reduced to zero on 12 May
1998.
"Expiry Date" means, in relation to a Standby L/C, the date specified as such in
the Standby L/C Request relating thereto.
"Facility" means
(a) when designated the "Tranche A Revolving", the revolving credit facility
referred to in Clause 2.1(a).
(b) when designated the "Tranche B Revolving", the revolving credit facility
referred to in Clause 2.1(b);
(c) when designated "Ancillary", one of the ancillary facilities referred to in
Clause 2.1(b);
(d) when designated "Standby L/C", the standby letter of credit facility
referred to in Clause 2.1; and
(e) without any such designation, the Tranche A Revolving Facility, Tranche B
Revolving Facility, the Ancillary Facilities or the Standby L/C Facility as
the context requires;
and the "Facilities" means the Tranche A Revolving Facility, Tranche B Revolving
Facility, the Ancillary Facility and the Standby L/C Facility taken together.
"Facility Agent's Spot Rate of Exchange" with respect to any Optional Currency
on any day means the spot rate of exchange of the Facility Agent (as determined
by the Facility Agent based on market rates then prevailing and capable of being
obtained by the Facility Agent) for the purchase of the appropriate amount of
such Optional Currency with Deutschmarks in the London Foreign Exchange Market
in the ordinary course of business at or about 10.00 a.m. on the day in question
for delivery, if the Optional Currency is Sterling, on such day and, in all
other cases, two Business Days thereafter.
"Facility Office" means, in respect of any Finance Party, the office through
which it will perform its obligations under this Agreement as notified to the
Facility Agent prior to it becoming a Finance Party or (unless otherwise agreed
by the Facility Agent) by five Business Days' notice.
"Fee Letters" means each of the letters referred to in Clause 26.6 and 26.7 in
relation to the arrangement fees, the participation fees and the amendment fees
respectively.
11
"Finance Documents" means, the Senior Finance Documents, the Note Documents, the
Recapitalisation Documents, the GSIC Note Documents, and any other document
notified by the Facility Agent (acting reasonably) to the Company as being a
"Finance Document" (any such document being a "Finance Document" from the date
of the notification being given in respect thereof by the Facility Agent) (each
a "Finance Document").
"Finance Party" means the Arranger, each Bank, the Security Agent and the
Facility Agent (together the "Finance Parties").
"Financial Accounts" means from time to time:
(a) the latest audited consolidated annual accounts of the Group;
(b) the latest unaudited consolidated quarterly accounts of the Group;
(c) the latest unaudited monthly management accounts of the Group; and
(d) any other audited or unaudited consolidated or unconsolidated accounts or
management accounts (if any) of the Group or any Group Member;
delivered or required to be delivered to the Facility Agent pursuant to this
Agreement, or such of those accounts as the context requires.
"Funds Flow Memorandum" means the flow of funds memorandum in the agreed form
prepared on behalf of the Company by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ containing details of the
flow of funds at Closing.
"Gazelle" means Koninklijke Gazelle BV.
"General Provisions" is defined in the Approved Provisioning Procedure.
"German Reorganisation" means the proposed merger without liquidation
(Verschmelzung) of:
(i) Derby Fahrr/\der GmbH into Derby Cycle Werke GmbH; and
(ii) Univega Beteilingungen GmbH, Univega Worldwide License GmbH and Derby WS
Vermoegensverwaltungsgesellschaft into Derby Holding Deutschland GmbH;
and all related transactions on terms to be provided to and approved in writing
by the Facility Agent prior to commencement of any steps by the Company or any
Group Member to put such proposed merger into effect.
"Germany" means the Federal Republic of Germany.
"Group" means the Company and its Subsidiaries from time to time.
"Group Member" means, at any time, a member of the Group at such time.
"GSIC Loan" means the senior subordinated loan agreement in the agreed form and
made between the Company and the GSIC Noteholder dated on or around 28 January
1999 pursuant to which the Company issued a series of 19% fixed rate
subordinated unsecured loan notes due 2009 (with an annual effective rate of
20.9%) in an aggregate amount of US$20,000,000.
"GSIC Noteholder" means Vencap Holdings (1992) Pte Ltd.
12
"GSIC Note Documents" means the GSIC Loan, the GSIC Notes, the Stockholders'
Agreement and the Side Letter as at the date of the completion of the Diamond
Back Acquisition.
"GSIC Note Issuer" means The Derby Cycle Corporation (in its capacity as the
issuer of the GSIC Notes).
"GSIC Notes" means the unsecured, subordinated, payment-in-kind and non-
guaranteed notes issued or to be issued by the GSIC Note Issuer to the GSIC
Noteholder, pursuant to the GSIC Loan as at the date of the completion of the
Diamond Back Acquisition.
"GSIC Side Letter" means the letter dated 17 November 2000 from the Company to,
inter alios, GSIC.
"Guarantee" means:
(a) in relation to any UK Obligor or U.S. Obligor the form of guarantee set out
in Clause 23 of this Agreement; and
(b) in relation to any other Obligor the form of guarantee set out in Clause 23
of this Agreement or such other form of guarantee as the relevant Obligor
shall be required to provide in accordance with the terms of this Agreement
so as to give either:
(i) at least the same level of support as such Obligor would have provided
had such Obligor been able to become a party to this Agreement as a
result of having executed and delivered a duly completed Guarantor
Accession Agreement if to do so would not be contrary to applicable
laws; or
(ii) the maximum level of support as such Obligor may provide having regard
to the applicable laws.
"Guarantor" means each entity identified as a Guarantor in Schedule 2 and each
Additional Guarantor (together the "Guarantors").
"Hedging Counterparty" means any Bank who enters into a Hedging Protection
Agreement as permitted by and in accordance with the terms of this Agreement and
the Approved Hedging Programme.
"Hedging Protection Agreements" means any and all interest cap and/or other
hedging agreements entered into or committed to be entered into by a Group
Member in relation to the Group's floating rate interest and/or currency
exposure under the Finance Documents as have been (and/or as may hereafter be)
agreed in writing between the Company and the Facility Agent to constitute the
Hedging Protection Agreements (each a "Hedging Protection Agreement").
"Holding Company" means, in respect of any Person, any company or corporation
(or for the purposes of Clause 19.5(aa) only) other legal entity of which such
Person is a Subsidiary.
"Indemnity Undertaking" means the indemnity undertaking in the agreed form dated
on or about the date of this Agreement pursuant to which, inter alia, Derby
L.L.C and Perseus Cycle L.L.C agreed to make claims arising in respect of
Clauses 6 and 9 of the Recapitalisation Agreement and to apply the proceeds of
any such claim in the manner detailed therein.
"Immediate Subsidiary" means each Group Member that is an immediate Subsidiary
of the Company or Lyon Investments B.V. being, as at the Amendment Date Lyon
Investments B.V., Derby
13
Cycle Corporation Limited, Raleigh Industries of Canada Limited, Derby Trading
Co. Inc and Derby Holding B.V. and Derby Sweden AB.
"Information Memoranda" means the information memorandum so entitled dated April
1998 prepared by the Arranger at the Company's request and on its behalf in
connection with this Agreement as supplemented by all relevant information
contained in the Senior Notes' Offering Memoranda dated April 1998 and May 1998
respectively.
"Information Package" means the Business Plan, the Information Memorandum, the
Reports, the Transaction Costs Letter and any other information distributed by
the Arranger at the Company's request and on its behalf in connection with this
Agreement.
"Initial Note Purchasers" means Chase Securities, Inc., Chase Manhattan Bank AG
and Chase Manhattan International Limited.
"Intellectual Property Rights" means all know-how, patents, trademarks, service
marks, designs, business names, topographical or similar rights, copyrights and
other intellectual property rights and any interests (including by way of
licence) in any of the foregoing (in each case whether registered or not and
including all applications for the same) of any Group Member.
"Intercreditor Agreements" means:
(i) the agreement entitled "Intercreditor Agreement" dated 13 May 1998 made
between, amongst others, the parties to this Agreement and each Hedging
Party pursuant to which their respective interests in the Group and
amongst themselves are regulated;
(ii) the agreement dated 5 February 1999 and made between, amongst others, the
parties to this Agreement, the Persons described therein as the
Subordinated Note Holders and the Subordinated Note Issuers and pursuant
to which the claims of the said Subordinated Note Holders against the
said Subordinated Note Issuers are subordinated to the interests and
rights of the Finance Parties under the Senior Finance Documents; and
(iii) the agreement dated 3 February 1999 and made between, amongst others, the
parties to this Agreement and the GSIC Noteholder pursuant to which the
rights of the GSIC Noteholder are subordinated to the interests and
rights of the Finance Parties under the Senior Finance Documents;
(each agreement referred to at (i), (ii), and (iii) above an "Intercreditor
Agreement").
"Intercreditor Agreement Accession Memorandum" means in respect of an
Intercreditor Agreement an Accession Memorandum as defined in and delivered
under or pursuant to such Intercreditor Agreement.
"Interest Date" means, in relation to any Advance or any Overdue Amount, the
last day of the Term or, as the case may be, the Default Interest Period
relating thereto.
"Intra-Group Loan Memorandum" means the memorandum in the agreed form detailing
all intra-group loans existing at and which were in existence immediately after
12 May 1998 prepared by the Company and delivered to the Facility Agent
hereunder.
"Inventory" has the meaning given to such term in Clause 6.10.
"Investment" is defined at Clause 19.5(n).
14
"Investors" means each of those Persons that have subscribed for Shares pursuant
to or in connection with the Recapitalisation Agreement or is a shareholder of
the Company.
"IRC" means the Internal Revenue Code of 1986 (as amended from time to time) of
the USA.
"Irish Debentures" means each of the debentures governed by the laws of Ireland
entered into by certain Group Members in favour of the Security Agent and
forming part of the Security Documents (each an "Irish Debenture").
"Issue Date" means, in relation to any Standby L/C, the date for the issue
thereof as specified in the Standby L/C Request relating thereto.
"Joint Venture" means all joint venture entities, whether a company,
unincorporated firm, undertaking, joint venture, association, partnership or
other entity in which any Group Member has an interest from time to time.
"Legal Due Diligence Report" means the report prepared by ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ dated
18 March 1998 addressed to the Facility Agent for itself and on behalf of the
Banks.
"Letter of Engagement" means, in respect of any Report, the letter of
instruction pursuant to which the Person that prepared such Report was engaged
to do so.
"LIBOR" means in relation to any Advance or Overdue Amount, on any day, the
London Interbank Offered Rate for deposits in the specified currency, being
determined by the Facility Agent to be either:
(a) the offered rate (if any) for the specified term which appears on page 3750
of the Telerate screen which displays British Bankers Association Interest
Settlement Rates for deposits in the specified currency for the period for
which such rate is to determined at 11.00am London time on the relevant
Quotation Date or, if such page or such service shall cease to be
available, such other page or service displaying the London Interbank
Offered Rates in such currency of prime banks as the Facility Agent shall,
after consultation with the Banks and with the approval of the Company,
such approval not to be unreasonably withheld or delayed, select as at
11.00am London time on the relevant Quotation Date for the specified term;
or
(b) if no such display rate is then available for such period or currency and,
at the time, the Facility Agent has not selected any alternative service as
contemplated in (a) above, the arithmetic mean (rounded upwards, if not
already such a multiple, to the nearest whole multiple of one sixteenth of
one per cent. per annum) of the respective rates notified to the Facility
Agent by each of the Reference bank as the rate at which it is offered
deposits in an amount approximately equal to the relevant Advance or unpaid
sum in the specified currency and for the specified term by prime banks in
the London Interbank Market at 11.00am London time on the relevant
Quotation Date for the specified term,
and for the purpose of this definition "specified currency" means the currency
of such Advance or, as the case may be, Overdue Amount and "specified term"
means the Term of such Advance or, as the case may be, the period in respect of
which LIBOR falls to be determined on that day in relation to such unpaid sum.
"Listing" means a listing of equity on the London Stock Exchange or any other
stock exchange as the same is determined by the Facility Agent acting reasonably
(and "Listed" shall be construed accordingly).
15
"Majority Banks" means a Bank or group of Banks whose aggregate Tranche A
Revolving Commitments and Tranche B Revolving Commitments amount to more than
sixty-six and two thirds per cent. of the Total Commitments or, if such Bank's
Tranche A Revolving Commitment and Tranche B Revolving Commitment has been
reduced to zero, would have amounted in aggregate to more than sixty-six and two
thirds per cent. of the Total Commitments, immediately prior to such reduction
to zero and, for the purposes of this definition, the provisions of Clause 7 and
any Ancillary Commitment of any Ancillary Bank shall be ignored and be treated
as if such Bank's Tranche B Revolving Commitment had not been reduced in
accordance with Clause 7.
"Management Agreement" means the management agreement (if any) in the agreed
form between ▇▇▇▇▇▇ and the Company.
"Margin" means:
(a) in relation to the Tranche A Revolving Facility three per cent (3%) per
annum; and
(b) in relation to the Tranche B Revolving Facility two and three quarters per
cent (2.75%) per annum.
"Market Reports" means the reports dated 28 January 1998 prepared by the Coba
Group entitled "Market Assessment of The Derby Bicycle Group" addressed to,
inter alios, the Company and the Facility Agent for itself and on behalf of the
Banks.
"Material Adverse Effect" means any effect which could reasonably be expected:
(a) to be materially adverse to (i) the ability of the Company or any other
Obligor to perform its obligations under any of the Finance Documents, or
(ii) the business, assets, prospects or financial condition of any Material
Group Member; and/or
(b) (where the context so admits) to result in any of the Transaction Documents
not being legal, valid and binding on, and enforceable substantially in
accordance with its material terms against any party to that Transaction
Document and/or (in the case of Security Documents) not providing to the
Security Agent for itself and on behalf of the Banks, perfected,
enforceable security over the assets expressed to be covered by that
Security Document, in a manner and to an extent reasonably considered by
the Majority Banks to be materially adverse to their interests under the
Senior Finance Documents.
"Material Group Member" means each Obligor and each other Group Member (a) whose
earnings before interest, tax, depreciation and amortisation represent five per
cent. or any greater percentage, of the Consolidated Adjusted EBITDA of the
Group, or (b) the book value of whose gross assets is five per cent. or more of
the consolidated gross assets of the Group, in either case determined in
accordance with the Applicable Accounting Principles, or (c) whose aggregate
sales to non-Group Members in any annual Accounting Period, in accordance with
the Applicable Accounting Principles and excluding VAT and/or sales tax, have
been, or are budgeted to be, at least five per cent. or more of the aggregate
sales of the Group to non-Group Members (similarly calculated), and for this
purpose:
(i) in the case of a company which itself has Subsidiaries, the calculation
shall be made by using the consolidated earnings before interest, tax,
depreciation and amortisation, gross assets or aggregate sales, as the case
may be, of it and its Subsidiaries;
(ii) the calculation of consolidated earnings before interest, tax, depreciation
and amortisation or gross assets or aggregate sales shall be made by
reference to:
16
(A) the latest Financial Accounts of the relevant company (or, as the case
may be) (a consolidation of the Financial Accounts of it and its
Subsidiaries) used for the purpose of the then latest unaudited
quarterly or audited annual consolidated Financial Accounts of the
Group delivered to the Facility Agent under Clause 19.1;
(B) those unaudited quarterly or audited annual consolidated Financial
Accounts (as the case may be) of the Group; and
(C) shall exclude any intra-Group item; and
(iii) any Subsidiary not falling within paragraphs (a), (b) or (c) above but
which, as a result of any intra-Group transfer re-organisation or
acquisition would, adopting any of the tests referred to in paragraphs
(a), (b) or (c) above and as if the Financial Accounts referred to in
such paragraphs had been drawn up immediately following such transfer,
reorganisation or acquisition, be a Material Group Member Provided that
such Subsidiary shall only become a Material Group Member upon the
completion of such transfer, reorganisation or acquisition.
"Material Insurances" means each of those insurances specified as being material
in the list provided to the Facility Agent on Closing and such other insurances
as are designated material insurances by the Facility Agent (acting reasonably)
for the purposes of this Agreement from time to time.
"Material Intellectual Property Right" means, any Intellectual Property Right
which the Facility Agent has determined to be material for the purposes of the
Senior Finance Documents whether or not such Intellectual Property Right is
actively used by any Group Member at the time of such determination or has been
used by any Group Member previously or otherwise and shall include the
Intellectual Property Rights specifically listed in the Security Documents.
"Maximum Amount" means the maximum extent of the obligations of the Swedish
Obligor under Clause 23 in accordance with the provisions of Clause 23.1(v).
"Model" means the management LE3 bottom up model for the Group as reviewed by
KPMG in an agreed form.
"Moody's" means ▇▇▇▇▇'▇ Investor Services Limited.
"MS Group Option" means the right of ▇▇▇▇▇▇ ▇▇▇▇▇▇ to purchase such number of
shares of Univega Beteiligungen GmbH as shall represent 10% of the beneficial
ownership of MS Sport Vertriebs GmbH and MS Sport Vertriebs AG. Switzerland
under Section 8(b) of Part 2 of the notarial deed No. 270/1997 of the Hamburg
notary Jonetzi dated August 8, 1997).
"month" means a period starting on one day in a calendar month and ending on the
numerically corresponding day in the following calendar month, unless such
corresponding day is not a Business Day, in which case it shall end on the next
day which is a Business Day or, if there is not a corresponding day in that
calendar month, the last Business Day in that calendar month.
"Multiemployer Plan" means a plan which is a multiemployer plan as defined in
section 4001 (a)(3) of ERISA.
"Netherlands" means the Kingdom of the Netherlands.
"New Bank" means a bank or financial institution to which a Bank seeks to
transfer all or part of such Bank's rights and obligations hereunder.
17
"Non-UK Obligor" means any Obligor that is not a UK Obligor.
"Note Documents" means (to the extent that the same are entered into by the
entities expressed to be a party thereto) the Note Indentures, the Senior Notes,
the Note Purchase Agreement and the Registration Rights Agreement, any related
engagement, fee or indemnity agreements and any ancillary agreements
contemplated by the foregoing.
"Note Indentures" means the indentures in the agreed forms dated the date of
this Agreement among the Note Issuers, and the applicable Note Trustee pursuant
to which the Senior Notes have been issued.
"Note Issuers" means collectively The Derby Cycle Corporation and Lyon
Investments B.V. (each a "Note Issuer").
"Note Purchase Agreement" means the note purchase agreement in the agreed form
dated 12 May 1998 among the Note Issuers and the Initial Purchasers in
connection with the offering of Senior Notes.
"Note Trustee" means, as of 12 May 1998, the entity described therein as Trustee
under each of the Note Indentures, and any other Person appointed to such
position from time to time, in accordance with the provisions of the applicable
Note Indenture.
"Noteholder" means a Person who is the beneficial owner of one or more Senior
Notes (together the "Noteholders").
"Novation Certificate" means a certificate substantially in the form set out at
Schedule 8.
"Obligor" means each Borrower and each Guarantor and any other Group Member
which has been required to enter into (whether or not it has yet entered into)
any Accession Agreement and/or Security Document pursuant to Clauses 19.4(d),
19.4(e), 19.4(f), 19.4(g) or 23 (together the "Obligors").
"Obligors' Agent" means the Company, appointed to act on behalf of each Obligor
in relation to the Finance Documents pursuant to Clause 2.3(c).
"Optional Currency" means any currency which is freely transferable and freely
convertible into Deutschmarks and which is available to banks in the London
Interbank Market.
"Original Bank" means each of the following:
(a) each bank set out in Schedule 3 under the heading "Original Banks";
(b) each bank or other financial institution to which rights and/or obligations
under this Agreement as an Original Bank are assigned or transferred
pursuant to Clause 29.2 or which assumes rights and obligations pursuant to
a Novation Certificate; and
(c) any successor or successors in title to any of the foregoing,
"Overdue Amount" is defined at Clause 9.
"Party" means any Person party to this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
18
"Permitted Acquisition" is defined at Clause 19.5(d)(v).
"Permitted Amount" means, in any annual Accounting Period the aggregate of
$10,000,000 (or the equivalent in other currencies) provided that the Investment
or, as the case may be, the Permitted Acquisition, is to be financed by means of
funds raised by means of the issuance of ordinary shares in the Company or
subordinated unsecured debt on terms acceptable to the Majority Banks (in
accordance with the provisions of the Senior Finance Documents) or, at any time
prior to the Amendment Date through general cashflow ; and
"Permitted Encumbrance" means:
(a) Encumbrances constituted or evidenced by the Security Documents;
(b) Encumbrances existing as at 12 May 1998, details of which were disclosed in
writing and which were acceptable to the Facility Agent prior to 12 May
1998 ;
(c) Encumbrances arising by operation of law provided that the same do not
arise as a result of default and any such unpaid fees are discharged as
soon as is reasonably practicable after the Company (or the relevant Group
Member) becomes aware thereof;
(d) a lien arising in favour of a warehouseman or shipper that arises under the
standard terms and conditions of such warehouseman or, as the case may be,
such shipper that relates to unpaid fees payable to such warehousemen or,
as the case may be, such shipper in such capacity only Provided that the
same do not arise as a result of a default and are discharged as soon as is
reasonably practicable after the Company (or the relevant Group Member)
becomes aware thereof and, in any event within 30 days of such amount
becoming payable;
(e) any Encumbrance over or affecting any assets of any company which becomes a
Group Member (that is not an Obligor) after the date hereof, where such
Encumbrance is created prior to the date on which such company becomes a
Group Member Provided that:
(i) such Encumbrance was not created at the request of any Group Member
in contemplation of such company becoming a Group Member;
(ii) the amount thereby secured (save any overdrawn amount on the current
account of any such company within the terms (in existence on the
date when such company becomes a Group Member) of an overdraft (or
other equivalent facility granted to such company prior to its
becoming a Group Member) has not been increased in contemplation of,
or since the date of, such company becoming a Group Member;
(iii) the Person in whose favour the Encumbrance was granted does not have
recourse to any Group Member (or any of their respective assets)
(other than the Group Member that granted the Encumbrance) in respect
of the indebtedness to which such Encumbrance relates; and
(iv) the Encumbrance relates only to assets of the relevant Group Member
that were in existence at the time such company became a Group
Member; and
(f) Encumbrances not referred to at paragraphs (a) - (e) above or (g) or (h)
below, provided that the aggregate book value of the asset or assets over
which all such Encumbrances have been granted by Obligors does not exceed
(in aggregate) $1,000,000 (or the equivalent in other currencies), and, in
respect of Group Members that are not Obligors, does not exceed (in
aggregate) $1,000,000 (or the equivalent in other currencies).
19
(g) Encumbrances existing as at 12 May 1998 to secure Financial Indebtedness
over the assets of a Group Member incorporated in South Africa;
(h) Encumbrances granted in favour of an Ancillary Bank arising solely out of
arrangements concerning the Ancillary Facility provided by such Ancillary
Bank to Group Members whereby outstanding debit and credit balances
thereunder may, from time to time, be netted off or consolidated; and
For the avoidance of doubt, at no time shall a Group Member grant an Encumbrance
in respect of (i) the GSIC Notes in favour of the GSIC Noteholder and the GSIC
Trustee and their permitted successors, assignees or transferees.
"Permitted Financial Indebtedness" means (without double-counting):
(a) in respect of the Company, any indebtedness:
(i) incurred under the Finance Documents;
(ii) as permitted under Clause 19.5(c) of this Agreement;
(iii) as contemplated in the definition of Permitted Amount; or
(iv) incurred under the Sponsor Facility.
(b) in respect of Lyon Investments B.V., any indebtedness (i) incurred
under the Note Documents and in respect of the Notes and (ii) as
permitted under Clause 19.5(c) of this Agreement; and
(c) in respect of a Group Member (other than the Company and Lyon
Investments B.V.) any indebtedness:
(i) incurred under the Finance Documents other than the GSIC Note
Documents;
(ii) as permitted by Clauses 19.5(c) and 19.5(d);
(iii) Financial Indebtedness owed to a Beneficiary of a Standby L/C to the
extent such Financial Indebtedness is supported by such Standby L/C;
(iv) in addition to any Financial Indebtedness able to be incurred or
permitted to subsist pursuant to paragraphs (i), (ii), (iii), (v),
(vi) or (vii) of this definition:
(A) members of the South African Group may incur Financial
Indebtedness (in aggregate) in the aggregate principal amount
of DM11,000,000 (or the equivalent thereof in other
currencies); and
(B) in respect of the Group as a whole (excluding the South African
Group) $1,000,000 (or the equivalent thereof in other
currencies);
(v) Financial Indebtedness in respect of finance leases existing as at the
date of this Agreement which have been disclosed in writing to the
Facility Agent prior to the date of this Agreement;
(vi) Financial Indebtedness incurred by a Dormant Subsidiary as at Closing
to the extent disclosed prior to the date of this Agreement;
20
(d) in respect of any Group Member, any indebtedness in relation to
sale and leaseback agreements of up to an aggregate of
$5,000,000 up to maturity where each sale and leaseback is for
no more than $2,500,000 and has been identified by KPMG in the
Engagement Letter.
"Permitted Recipient" is defined at Clause 29.6.
"Person" shall include any person, firm, company, corporation, Government, State
or agency of a State or any association or partnership (whether or not having a
separate legal personality) of two or more of the foregoing.
"Perseus" means PerseusCycle L.L.C, a merchant banking venture headquartered in
Washington DC and managed by Perseus Management L.L.C..
"Plan" means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Company or any ERISA Affiliate
is (or, if such plan were terminated, would under Section 4069 of ERISA be
deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Potential Event of Default" means:
(a) an event which, with the passage of time, the giving of notice or the
making of any determination (or any combination of those three), would, or
could reasonably be expected to, become an Event of Default; or
(b) the making of a Drawdown Request for the purpose of funding or supporting a
payment due under the Senior Notes which the Facility Agent, acting on the
instructions of the Majority Banks, reasonably considers it likely to
result in an Event of Default.
"Pre-Closing Accounts" means the combined balance sheet, income statement and
cashflow statement of the Group in the agreed form prepared in accordance with
Applicable Accounting Principles by the Company relating to the period
commencing 1 January 1997 and ending 31 December 1997.
"Proforma Financial Accounts" means a set of proforma quarterly and monthly
accounts in the agreed form detailing the type and level of information which
will be provided in each of the Accounts specified in Clauses 19.1(a)(ii) and
19.1(a)(iii) and the type of issues to be covered in any written report to be
provided by the Executive Officers as part of such Financial Accounts and
showing the heading, format and other characterisations of each of such
Financial Accounts.
"Qualifying Bank" means:
(a) in respect of a Borrower located in the United Kingdom a bank as defined in
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ for the purposes of Section 349 of that Act
which is within the charge to UK Corporation Tax in respect of any interest
payable or paid to it under this Agreement;
(b) in respect of a Borrower located in a jurisdiction other than the United
Kingdom or Canada:
(i) a bank for the time being lending through a branch, Affiliate or
agency in that other jurisdiction; or
(ii) a bank lending through any other branch, Affiliate or agency if, at
the time the bank becomes a party to this Agreement, the bank or
Affiliate (as the case may be) is resident or incorporated in a
country with which that other jurisdiction has an
21
appropriate double taxation treaty pursuant to which that bank or
Affiliate (as the case may be) is entitled to receive interest and
fees under this Agreement from the Borrower without deduction or
withholding of that other jurisdiction's income Tax, or is otherwise
entitled to receive interest and fees without such deduction or
withholding and where, at such time, there has been no public
announcement made by the relevant taxing authorities in such
jurisdiction of an intention to change the entitlement of the bank or
Affiliate to receive principal, interest and fees under this
Agreement from any such Borrower without such deduction or
withholding; or
(iii) any Bank that is a party to this Agreement as at the date hereof or
becomes a party hereto within thirty days of the date hereof; and
(c) in respect of a Borrower incorporated in Canada, any Bank.
"Quotation Date" means, in relation to any period for which an interest rate is
to be determined hereunder, the day on which quotations would ordinarily be
given by prime banks in the London Interbank Market for deposits in the currency
in relation to which such rate is to be determined for delivery on the first day
of that period Provided that, if for any such period quotations would ordinarily
be given on more than one date, the Quotation Date for that period shall be the
last of those dates.
"Recapitalisation" means the reorganisation of Derby International and its
Subsidiaries and the recapitalisation of the Company (in each case) pursuant to
the Recapitalisation Agreement.
"Recapitalisation Agreement" means the agreement dated 11 March 1998, as
amended, among Derby International, DFS, Derby L.L.C., Perseus Cycle L.L.C. and
the Company in relation to the Recapitalisation (and includes, inter alia, any
tax covenants, disclosure letters and all other documents delivered to or by any
party thereto pursuant or in relation to such agreement).
"Recapitalisation Documents" means the Recapitalisation Agreement, the Exchange
Agreement, the Disclosure Exhibits, the Recapitalisation Agreement Assignment,
the Shareholders Agreement, the Registration Agreement, the Certificate of
Incorporation together with any other agreement or document relating to, or
giving effect to, the Recapitalisation.
"Reference Banks" means the principal London office of Chase Manhattan Bank,
HSBC Bank PLC and ABN Amro N.V. and/or such other Banks as may become Reference
Banks pursuant to Clause 31.8.
"Registration Agreement" means the Agreement so entitled among the Company, DFS,
Perseus Cycle L.L.C and Derby Cycle L.L.C in relation to the Recapitalisation.
"Registration Rights Agreement" means the Exchange and Registration Rights
Agreement in the agreed form dated the date of this Agreement among the Note
Issuers and the Initial Purchasers in connection with the offering of Senior
Notes.
"Relevant Purchaser" means for the purposes of Clause 19.5(aa)(1) only any
Person, and for the purposes of Clause 19.5(aa)(2) only DC Cycle LLC or Perseus
Cycle LLC, and for the purposes of Clause 19.5(aa)(3) only, DC Cycle LLC or any
of its Affiliates (other than a Group Member) or a Person carrying on the
business of a bicycle manufacturer or/and bicycle distributor which is not an
existing investor of the Company or, with the prior consent of the Facility
Agent, any Person.
"Repayment Date" means, in relation to any Advance, the last day of the Term
thereof.
22
"Reports" means each of the Accountant's Report, the Diamond Back Acquisition
Due Diligence Report, the Legal Due Diligence Report, the Market Reports, the
AON Insurance Report, the AON Pensions Report, the Environmental Reports, the
Property Report, the ATK Report and the Concours Report.
"Request" means a Drawdown Request or a Standby L/C Request as the context may
require.
"Requested Amount" means:
(a) in respect of a Drawdown Request, the principal amount requested to be
borrowed under that Drawdown Request; and
(b) in respect of a Standby L/C Request, the amount of the Standby L/C
requested to be issued under that Standby L/C Request.
"RIC" means Raleigh Industries of Canada Limited.
"Schedule" refers, unless otherwise stated, to a schedule to this Agreement.
"Second Registration Agreement" means the registration agreement made on or
around the Amendment Date between the Company and the ▇▇▇▇▇ Investors.
"Security Documents" means the share charges and other security documents
identified in Schedule 14 in a form and substance satisfactory to the Security
Agent and such other security documents as may be required by the Security Agent
to be entered into by any Obligor including in relation to the accession of any
Obligor hereunder at the request of the Facility Agent pursuant to any of the
Senior Finance Documents.
"Sellers" means Derby International and DFS.
"Senior Finance Documents" means this Agreement, each Standby L/C, each
Intercreditor Agreement, the Security Documents, the Accession Agreements, any
Guarantee, any Novation Certificate, the Indemnity Undertaking, the Fee Letters,
any amendment and restatement agreement relating to this Agreement and any other
document determined by the Facility Agent, from time to time, as being a "Senior
Finance Document".
"Senior Liabilities" means all present and future sums, liabilities and
obligations whatsoever (actual or contingent) payable, owing, due or incurred by
an Obligor to any of the Security Agent, Facility Agent and Secured
Beneficiaries (as such term is defined in the Debentures) under the Senior
Finance Documents.
"Senior Term Sheet" means the term sheet in agreed terms relating to the
provision of the Tranche A Facility under an Amendment and Restatement Agreement
signed by the Agent and the Company and dated on or about the Amendment Date.
"Senior Unsecured Notes" means the unsecured, senior notes (including, for the
avoidance of doubt, the Initial Securities and the Exchange Securities, as
defined in each of the Note Indentures), issued by the Note Issuers (or either
of them) pursuant to each of the Note Indentures in substantially the forms
attached as exhibits to the applicable Note Indenture.
"Series D - 1 Preferred Shares" means the Preferred Stock Senior D - 1 Company
being in value an aggregate amount equal to the aggregate amount outstanding
under the Sponsor Notes as at the date of conversion, and which, as at the
Amendment Date, equates to approximately 7,404 shares (and provided in any event
equates to no more than 7,500 shares), having the rights and preferences set out
23
in the Senior D Preferred Shares Purchase Agreement, the Certificate of
Incorporation and the Shareholders' Agreement.
"Series D Preferred Shares" means the Series D preferred shares in the Company
having the rights set out in the Series D Preferred Shares Purchase Agreement
and the Certificate of Incorporation.
"Series D Preferred Shares Purchase Agreement" means the agreement dated on or
about the Amendment Date and made between the Company, the ▇▇▇▇▇ Investors,
▇▇▇▇▇▇ and Perseus whereby the parties agree to purchase Series D Preferred
Shares in an aggregate amount of US$12,000,000 and exchange the Sponsor Notes
for Senior D - 1 Preferred Shares in the Company.
"Service Contracts" means the contracts of service made between (i) each of the
Executives and a Group Member and (ii) each Director and a Group Member.
"Shareholders Agreement" means the second amended and restated shareholders
agreement dated on or about the Amendment Date between the Company, DFS, Derby
L.L.C., Perseus Cycle L.L.C. and the ▇▇▇▇▇ Investors entitled "Shareholders'
Agreement" pursuant to which, amongst other things, DFS, Derby L.L.C. and
Perseus Cycle L.L.C. agree to regulate their respective rights with respect to
the voting and transfer of shares in the Company.
"Side Letter" means the letter in the agreed form dated on or about the date of
the completion of the Diamond Back Acquisition made between the GSIC Noteholder,
the Company and DC Cycle LLC in respect of the right to grant the GSIC
Noteholder PIK C Preferred Shares in lieu of further GSIC Notes pursuant to the
terms of the GSIC Loan.
▇▇▇▇▇ Investors" means Quantum Industrial Partners LDC, a Cayman Islands limited
duration company.
"South Africa" means the Republic of South Africa.
"South African Group" means Derby Investment Holdings (Pty) Limited and each of
its Subsidiaries.
"South African Rand" means the lawful currency for the time being of South
Africa.
"Sponsor" means ▇▇▇▇▇▇, Perseus and the ▇▇▇▇▇ Investors.
"Sponsor Notes" means the junior subordinated notes in a principal aggregate
amount of $7,000,000 granted by ▇▇▇▇▇▇ and Perseus to the Company and to be
converted or on before the Amendment Date to Series D -1 Preferred Shares.
"Standard & Poor's" means Standard & Poor's Rating Services, a division of The
McGraw Hill Companies.
"Standby L/C" means a letter of credit in the form, or substantially in the
form, of that set out at Part 3 of Schedule8, (or such other form as shall be
agreed by the Facility Agent acting on the instructions of the Majority Banks)
issued or to be issued to a Beneficiary under this Agreement.
"Standby L/C Commitment" in relation to a Bank means the amount of the
commitment set opposite its name in Schedule 5 under the heading "Standby L/C
Commitment" or in the Novation Certificate or other document by which it became
a party to or acquired rights under this Agreement as reduced or increased by
substitution or transfer pursuant to Clause 29 and any Novation Certificate to
which such Bank is a party and to the extent not cancelled, reduced or
terminated under this
24
Agreement, such commitment forming a sub-set of, and not being additional to,
such Bank's Tranche B Revolving Commitment.
"Standby L/C Request" means a request substantially in the form set out at Part
2 of Schedule 8.
"Sterling" and "(Pounds)" mean the lawful currency from time to time of the
United Kingdom.
"Stockholders' Agreement" means the agreement dated on or about the date of the
completion of the Diamond Back Acquisition and made between DC Cycle LLC,
Perseus Cycle LLC and the GSIC Noteholder in relation to the GSIC Notes.
"Structure Memorandum" means the memorandum and charts provided on Closing
describing the capital and share ownership of the Group (and giving details of
any minority shareholdings in any Subsidiary), identifying all Group Members and
all interests of Group Members in other companies, partnerships, Joint Ventures
and the like, all as of and immediately after Closing, and all reorganisational
steps with respect to the Group Members to be taken at or shortly prior to
Closing or as amended post Closing, as the same has been amended to reflect the
capital and share ownership and all re-organisational steps (if any) with
respect to the Group Member to be taken at or immediately prior to the Amendment
Date and agreed and notified to the Facility Agent.
"Swedish Obligor" means Derby Sweden AB.
"Subordinated Finance Documents" means the Series D Preferred Shares Purchase
Agreement, the Registration Agreement, and the Warrant Agreement;
"Subsidiary" means (a) a subsidiary as defined in Section 736 of the Companies
▇▇▇ ▇▇▇▇ as amended, and/or (b) a subsidiary undertaking as defined in Section
258 of the Companies ▇▇▇ ▇▇▇▇ as amended, or, in either case, any statutory re-
enactment or replacement thereof and/or (c), (whether or not falling within (a)
or (b) above, in relation to any Person, any entity which is controlled directly
or indirectly by that Person and any entity (whether or not so controlled) is
treated as a subsidiary in the latest financial statements of that Person from
time to time, and "control" for this purpose means the direct or indirect
ownership of the majority of the voting share capital of such entity or the
right or ability to direct management to comply with the type of material
restrictions and obligations contemplated in this Agreement or to determine the
composition of a majority of the board of directors (or like board) of such
entity, in each case whether by virtue of ownership of share capital, contract
or otherwise.
"Tax" shall be construed so as to include all present and future taxes, charges,
imposts, duties, levies, deductions, withholdings or amounts or charges of a
similar nature, or any amount payable on account of, or as security for, any of
the foregoing, including any penalties, fines, surcharges or interest payable in
connection with such amounts, and "Taxes" and "Taxation" shall be construed
accordingly.
"Term" means, in relation to an Advance, the period for which such Advance is
requested to be borrowed, as adjusted under this Agreement.
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Equity Investors III, L.P.
"Total Commitments" means, at any time, the aggregate for the time being of the
Banks' Total Tranche A Commitments and Total Tranche B Commitments
"Total Tranche A Commitments" means, at any time, the aggregate for the time
being of the Additional Banks' Tranche A Revolving Commitments.
25
"Total Tranche B Commitments" means, at any time, the aggregate for the time
being of the Original Banks' Tranche B Revolving Commitments.
"Tranche A Advance" means the principal amount of each borrowing under the
Tranche A Revolving Facility or the principal amount of such borrowing
outstanding from time to time, as the context requires.
"Tranche B Advance" means the principal amount of each borrowing under the
Tranche B Revolving Facility or the principal amount of such borrowing
outstanding from time to time, as the context requires.
"Tranche A Final Repayment Date" means each of 11 May 2001 and 11 May 2002.
"Tranche B Final Repayment Date" means 30 June 2002;
"Tranche A Revolving Commitments" in relation to an Additional Bank means the
amount of the commitment set opposite its name in schedule 5 under the heading
"Tranche A Revolving Commitment" or in the Novation Certificate, or other
document by which it became a party to or acquired rights under this Agreement
as reduced or increased by substitution or transfer pursuant to Clause 29 and
any Novation Certificate to which such Bank is a party and to the extent not
cancelled, reduced or terminated under this Agreement.
"Tranche B Revolving Commitment" in relation to an Original Bank means the
amount of the commitment set opposite its name in Schedule 5 under the heading
"Tranche B Revolving Commitment" or in the Novation Certificate, or other
document by which it became a party to or acquired rights under this Agreement
as reduced or increased by substitution or transfer pursuant to Clause 29 and
any Novation Certificate to which such Bank is a party and to the extent not
cancelled, reduced or terminated under this Agreement.
"Tranche A Revolving Facility Available Amount" has the meaning given to such
term in Clause 6.10.
"Tranche B Revolving Facility Available Amount" has the meaning given to such
term in Clause 6.10.
"Transaction Costs" means all fees, out-of-pocket costs and expenses and stamp
duty, registration, transfer and similar taxes incurred by the Company or any
Subsidiary thereof in connection with the negotiation, preparation and execution
of the Transaction Documents or otherwise in connection with, or resulting from,
the Recapitalisation each in the aggregate amount as set out in a letter in an
agreed form from the Company to the Facility Agent entitled "Transaction Costs"
and provided to the Facility Agent at Closing (the "Transaction Costs Letter").
"Transaction Documents" means the Recapitalisation Documents, the Finance
Documents, the Service Contracts, the Escrow Letter, the Structure Memorandum
and the Diamond Back Acquisition Agreement and the Subordinated Finance
Documents.
"UK Obligors" means, at any time, each of the Obligors, at such time,
incorporated in England and Wales, Scotland and Northern Ireland.
"USA" "United States of America" means the United States of America, any of its
states or territories and the District of Columbia.
"U.S. Obligor" means, at any time, each Group Member at such time incorporated
in the United States and any other Obligor which is a U.S. Person.
26
"U.S. Patent Assignment for Security Purposes" means the assignment for security
purposes dated 13 May 1998 and granted by the Company in favour of the Security
Agent as the same has been and may be amended from time to time.
"U.S. Patent and Trademark Security Agreement" means the patent and trademark
agreement dated 13 May 1998 and granted by the Company in favour of the Security
Agent as the same has been and may be amended from time to time.
"U.S. Person" means a Person who is a citizen or resident of the USA, and any
corporation of other entity created or organised in or under the laws of the
USA.
"U.S. Pledge Agreement" means the pledge agreement dated 13 May 1998 granted by
the Company in favour of the Security Agent as the same has been or may be
amended from time to time.
"U.S. Security Agreement" means the security agreement dated 13 May 1998 and
granted by the Company in favour of the Security Agent as the same has been or
may be amended from time to time.
"Utilisation" means:
(a) when designated "Standby L/C", a utilisation under this Agreement of the
Standby L/C Facility;
(b) when designated "Tranche A" Revolving Facility, a utilisation under this
Agreement of the Tranche A Revolving Facility;
(c) when designated "Tranche B" Revolving Facility, a utilisation under this
Agreement of the Tranche B Revolving Facility;
(d) without any such designation, a utilisation of the Standby L/C Facility,
the Tranche A Revolving Facility or Tranche B Revolving Facility as the
context requires.
"Utilisation Date" means in relation to each Advance, the date specified as such
in the relevant Drawdown Request.
"VAT" means value added tax owed to the United Kingdom Customs & Excise or any
similar or analogous tax in any jurisdiction owed to an equivalent authority or
body.
"Warrant Agreement" means the warrant agreement to purchase shares of Class A
common stock dated on or about the Amendment Date between the Company, ▇▇▇▇▇▇,
Perseus and the ▇▇▇▇▇ Investors.
"Year 2000 Expenditure" means, in respect of any Person, any expenditure
incurred relating to the reprogramming required to permit the proper
functioning, in and following the Year 2000 of such Person's computer systems
and equipment containing embedded microchips (including systems and equipment
supplied by others or with which such Person's systems interface) and the
testing of all such systems and equipment, as so reprogrammed.
1.2 Financial Terms
"A Common Stock" means the voting A Common Stock of the Company authorised by
the constitutive documents of the Company as at the date hereof.
▇▇
"▇ ▇▇▇▇▇▇ ▇▇▇▇▇" means the non-voting B Common Stock of the Company authorised
by the constitutive documents of the Company as at the date hereof.
"C Common Stock" means the voting C Common Stock of the Company authorised by
the constitutive documents of the Company as at the date of the completion of
the Diamond Back Acquisition.
"Capital Expenditure" means any expenditure which should be treated as capital
expenditure in the audited consolidated Financial Accounts of the Group in
accordance with the Applicable Accounting Principles.
"Consolidated Adjusted EBITDA" means for any period comprising a three month
Accounting Period of the Company the operating income of the Group for such
period expressed in DM:
before taking into account all Extraordinary Items (whether positive or
negative) and one-off expenses not exceeding, in aggregate US$1,200,000 in the
annual Accounting Period ending 31 December 2000 which represents the total of
(i) consultancy fees payable to Concours Group and incurred by Derby Cycle Werke
GmbH and (ii) severance costs incurred by the Company in respect of the
reorganising of the sales force of Group Members incorporated in the US;
before taking into account and any one-off payments of premia or otherwise made
by any Group Member in connection with Hedging Protection Agreements entered
into in accordance with the Approved Hedging Programme within 30 days of the
date of this Agreement;
before taking into account any provisioning undertaken under the Approved
Provisioning Procedure;
before deducting income tax expense;
before deducting charges to depreciation and amortisation excluding amortisation
attributable to a prepaid cash item arising in the ordinary course of business,
the amortisation of any goodwill and amortisation of Transaction Costs in an
amount not exceeding $8,800,000 in aggregate in all Accounting Periods post
Closing;
before deducting Interest (whether accrued, paid, deferred or capitalised) as an
obligation of any Group Member or Interest accrued in favour of, or paid to, any
Group Member;
after deducting (to the extent otherwise included in operating income) any gain
over book value arising in favour of the Group on the sale, lease or other
disposal of any fixed or intangible asset during such period and any gain
arising on any revaluation of any fixed or tangible asset during such period;
after adding back (to the extent otherwise deducted from operating income) any
loss against book value incurred by the Group on the sale, lease or other
disposal of any fixed or intangible asset during such period and any loss
arising on any revaluation of any fixed or intangible assets during such period;
after deducting (to the extent otherwise included in operating income) the
amount of retained profit (or adding back the retained loss) of any Group Member
(other than the Company) which is attributable to the interest of any
shareholder of or, as the case may be, partner in such Group Member which is not
a Group Member other than the amount of retained profit or the amount of the
retained loss of RIC which is attributable to such non-Group Member's interest
in RIC Preference Shares for so long as such shares may be exchanged solely for
B Common Stock of the Company and
28
carry no rights greater than as at the date of this Agreement and RIC is
prohibited from redeeming such RIC Preference Shares pursuant to the provisions
of this Agreement;
after deducting items which have not, or are not due to be paid in cash,
including any amortisation, credit, income or provision release (where such
provision was not originally increased by reducing operating income) or other
credit where cash was received in an earlier period. For the avoidance of
doubt, any income related to the defined benefit pensions plans of the Group
recognised in accordance with FAS 87 and FAS 132 shall be deducted when
calculating Consolidated Adjusted EBITDA and any unrealised income or loss in
respect of the change in the ▇▇▇▇ to market value of foreign exchange contracts
recognised in accordance with FAS 52 and FAS 133 where such contracts are in
accordance with the Approved Hedging Programme, shall not be included when
calculating Consolidated Adjusted EBITDA;
and for the purposes of the foregoing no item shall be effectively taken into
account more than once in this calculation and all items shall be determined on
a consolidated basis and subject only as may be required in order to reflect the
express inclusion or exclusion of items as specified in this definition) in
accordance with the Applicable Accounting Principles and as determined from the
consolidated Financial Accounts of the Group for such annual Accounting Period
or for the quarterly Accounting Periods falling within such period
"Consolidated Adjusted Cash Flow" means for any period comprising a three month
Accounting Period of the Company the Net Income of the Group for such period
expressed in DM adjusted for movements in working capital, capital expenditure,
non cash items and provisions undertaken in accordance with the Approved
Provisioning Procedure and otherwise as may be required by generally accepted
accounting practices and procedures.
"Dollar Equivalent" means, in respect of any currency other than Dollars, the
amount of Dollars able to be purchased with such currency at the rate of
exchange applied by the Company or, as the case may be, the Auditors, in
compiling the financial statements to which the calculation relates.
"Excluded Share Capital" of the Group means shares in the capital including
associated share premium of any Group Member owned by a Person which is not a
Group Member which by their terms are or may become redeemable (whether or not
subject to the occurrence of any contingency) at any time whilst any Advance or
other amount remains outstanding hereunder (whether or not due and payable) or
any commitment is in force, without the unanimous prior written consent of the
Banks Provided that PIK A Preferred Shares, PIK B Preferred Shares RIC
Preference Shares, the PIK C Preferred Shares and the "C" Common Stock shall not
constitute Excluded Share Capital for the purposes of this definition Provided
further in the case of the RIC Preference Shares and PIK B Preferred Shares that
the holders of such shares do not have any greater rights than in existence at
the date of this Agreement and in the case of the RIC Preference Shares RIC is
prohibited from redeeming such Preference Shares pursuant to the provisions of
this Agreement.
"Extraordinary Items" shall be determined in accordance with Applicable
Accounting Principles.
"Financial Indebtedness" means any indebtedness expressed in DM for, or for
interest (or dividends in the case of paragraph (c)) or other charges relating
to, or otherwise in respect of or pursuant to:
(a) monies borrowed or monies raised which are in the nature of borrowings or
having the commercial effect of borrowing, including, without limitation,
monies raised by the sales of receivables, invoices, bills or notes or
other financial assets on terms that recourse may be had to the vendor in
the event of non-payment of such receivables or financial assets when due
(but only to the maximum extent, actual or contingent, of such right of
recourse) and monies raised under acceptance credit facilities and through
the issue of bonds, notes,
29
debentures, bills, loan stocks and other debt securities (including any
debt security convertible, but not at the relevant time converted, into
share capital);
(b) the acquisition cost of assets or services to the extent payable on
deferred payment terms after the time of acquisition or possession thereof
by the party liable (whether or not evidenced by any bond, note, debenture,
loan stock or other debt security), excluding (i) retentions of acquisition
consideration normal in the trade concerned, (ii) any payment relating to
construction works or the acquisition of fixed assets which will become
payable only upon completion or commissioning of certain stages in such
works or in the supply programme for such fixed assets and which has not
yet become payable by reason of the non-completion or non-commissioning (as
the case may be) of such stages, (iii) any such cost payable on deferred
payment terms which are normal in the trade concerned, and which do not
involve any deferral of payment of any sum for more than four months;
(c) any outstanding Excluded Share Capital (and notwithstanding anything to the
contrary contained in this Agreement or in any rule of law or accounting,
such Excluded Share Capital shall be deemed for the purposes of this
definition to constitute indebtedness of the issuer of it);
(d) moneys received in consideration for the supply of goods and/or services to
the extent received more than three months before the due date for such
supply (but excluding any liability in respect of bona fide progress
payments and deposits or annual subscriptions received from customers in
the ordinary course of trade);
(e) instalments under conditional sale agreements entered into primarily as a
method of raising finance;
(f) amounts payable under leases (whether in respect of land, machinery,
computers, equipment or otherwise) and amounts payable under hire purchase
agreements and similar agreements and instruments, in each case where such
leases, agreements or instruments are treated as finance leases in
accordance with the Applicable Accounting Principles;
(g) (i) any guarantee, indemnity, letter of credit or other legally binding
instrument to assure payment of, or against loss in respect of non-
payment of, any of the indebtedness specified in this definition and
any counter-indemnity in respect of any thereof; and/or
(ii) any legally binding agreement or other instrument entered into in
connection with any of the indebtedness specified in this definition
requiring, or giving any Person the right (contingently or otherwise)
to require, that any other Person invest in, make advances to,
purchase assets of or maintain the solvency or financial condition of
any other Person;
(h) any interest rate swap, currency swap, currency exchange transaction, cap,
floor, collar or option arrangement and any other hedging or treasury
transaction (or any combination of any such transactions) which is entered
into with a view to managing exposure to fluctuations in interest rates or
currency exchange rates (the amount of such Financial Indebtedness in
relation to any such transaction shall be calculated by the ▇▇▇▇-to-market
valuation of such transaction at the time such valuation is carried out);
(i) transactions which involve or have the commercial effect of the borrowing
of commodities as part of an arrangement for or in substitution for the
raising of finance, the value of indebtedness concerned for this purpose
being the sum which must be paid and/or the value
30
in money terms of the commodities which must be delivered by the "borrower"
to, or to the order of, the "lender"; and
(j) transactions involving an agreement to sell commodities and a related
agreement to purchase at a future date, the same or other commodities where
such transactions are entered into primarily as a means of raising finance.
Whenever an amount of Financial Indebtedness of any Person or Persons is to be
determined for any purpose, double counting shall be avoided.
"Forward Rolling 12 Week Basis" refers to the calculation of an amount made on
the last Business Day of a week based on the sum of the amounts by reference to
which such amount is determined over the period commencing on the first day of
that week and the immediately succeeding and consecutive eleven week period
thereafter. "Interest" means:
(a) interest and amounts in the nature of interest (including, without
limitation, the interest element of finance leases) accrued;
(b) prepayment penalties or premiums incurred in repaying or prepaying any
Financial Indebtedness;
(c) discount fees and acceptance fees payable or deducted in respect of any
Financial Indebtedness (including all fees payable in connection with any
letter of credit or guarantee);
(d) any other costs, expenses and deductions of the like effect and any net
payment or amount payable or receipt receivable (or, if appropriate in the
context, receipt) under any interest rate hedging agreement or instrument
(including without limitation under the Hedging Protection Agreements)
taking into account any premiums payable for the same and the interest
element of any net payment (plus or minus any accrued exchange gains or
losses) under any currency hedging instrument or arrangement and dividends;
and
(e) any other distribution in respect of Excluded Share Capital.
For the avoidance of doubt "Interest" includes commitment, utilisation and non-
utilisation fees (including, without limitation, those payable under this
Agreement) but excludes agent's and front-end, management, arrangement and
participation fees with respect to any Financial Indebtedness (including,
without limitation, those payable under this Agreement) and (other than in
respect of paragraph (d) above) any up-front premium or front-end fee payable
pursuant to any Hedging Protection Agreement."Net Income" means the net income
of the Group calculated in accordance with generally accepted accounting
principles.
"PIK A Preferred Shares" means the Series A Preferred Shares of the Company
authorised by the constitutive documents of the Company as at 12 May 1998.
"PIK B Preferred Shares" means the non-voting Series B Preferred Shares of the
Company authorised by the constitutive documents of the Company as at 12 May
1998.
"PIK C Preferred Shares" means the non-voting Series C Preferred Shares in the
Company authorised by the constitutive documents of the Company as at the date
of the completion of the Diamond Back Acquisition.
"RIC" means Raleigh Industries of Canada.
31
"RIC Preference Shares" means the non-voting Preference Shares of RIC authorised
by the constitutive documents of RIC that are exchangeable to A Common Stock
and/or B Common Stock pursuant to the terms of such constitutive documents as at
the date hereof.
"Rolling 4 Quarterly basis" refers to the calculation of a ratio or an amount
made on an Accounting Date based on the sum of the amounts by reference to which
such ratio or amount is determined over the quarterly Accounting Period ending
on such Accounting Date and the immediately preceding and consecutive 3
quarterly Accounting Periods.
"Total Assets" means the sum of fixed and current assets (including, for the
avoidance of doubt, Cash, Cash Equivalent Investments and amounts falling due
after more than one year) of the Group determined initially by aggregating the
fixed and current assets (including, for the avoidance of doubt, Cash and
amounts falling due after more than one year) specified in the Pre-Closing
Accounts and, following delivery to the Facility Agent pursuant to Clause 19.1
of the consolidated Financial Accounts of the Group subsequently determined by
reference to the consolidated Financial Accounts of the Group most recently
delivered to the Facility Agent in accordance with Clause 19.1 (adjusted as the
Facility Agent (after consultation with the Company) may reasonably consider
appropriate to take account of any change in circumstances which occur
thereafter).
1.3 Construction
In this Agreement, save where the context otherwise requires:
(a) references to documents being in the "agreed form" means documents in a
form previously agreed in writing by or on behalf of the Company and the
Facility Agent;
(b) references to "assets" shall include revenues and the right thereto and
property and rights of every kind, present, future and contingent and
whether tangible or intangible (including uncalled share capital),
references to "shares" shall include stock and references to "freehold
property" shall include heritable property in Scotland and other similar
interests in real property in other jurisdictions;
(c) the expressions "hereof", "herein", "hereunder" and similar expressions
shall be construed as references to this Agreement as a whole (including
all Schedules) and shall not be limited to the particular clause or
provision in which the relevant expression appears, and references to "this
Agreement" and all like indications shall include references to this
Agreement as supplemented by the Accession Agreements, the Novation
Certificates and any other agreement or instrument supplementing or
amending this Agreement;
(d) references to "indebtedness" shall be construed so as to include any
obligation or liability (whether present or future, actual or contingent)
for the payment, repayment or redemption of any obligation expressed by
reference to monetary value or quantity or value of commodities (whether
such obligation is performable by the payment of money or in some other
way);
(e) references to any of the Transaction Documents and any other agreement,
document or instrument shall be construed as a reference to the same as
amended, varied, supplemented or novated from time to time (including,
where relevant, by any Accession Agreement and/or Novation Certificate);
(f) references (by whatever term) to the Company, each Obligor, the Arranger,
each Bank, each Reference Bank, each Agent, each Executive, the Note
Trustee, each Noteholder or the parties to this Agreement shall, where
relevant and subject as otherwise provided in this Agreement, be deemed to
be references to or to include, as appropriate, their respective
32
successors, replacements and assigns, transferees and substitutes permitted
by the terms of the Senior Finance Documents;
(g) reference to a time of day is, unless otherwise stated, a reference to
London time;
(h) the contents page of, and headings in, this Agreement are for convenience
only and shall be ignored in construing this Agreement;
(i) any reference to "certificate", "certifications" (or any like term) in
relation to an amount shall be a reference to a certificate containing a
reasonable amount of detail as to how such amount was calculated;
(j) reference to a "judgment" shall include a decree;
(k) words importing the singular shall include the plural and vice versa;
(l) all references to statutes and other legislation include all re-enactments
and amendments of those statutes and that legislation; and
(m) all references to "the date of this Agreement" or "as at the date hereof"
(or terms or phrases having a similar meaning) shall, unless otherwise
specified, mean 12 May 1998.
1.4 Relationship with the Intercreditor Agreements
This Agreement is entered into subject to, and with the benefit of, the terms of
the Intercreditor Agreements.
PART 2
2. THE FACILITY
2.1 The Facility
2.1
(a) Subject to the terms and conditions of this Agreement, the Additional ▇▇▇▇▇
▇▇▇▇▇ to the Borrowers a revolving facility of up to DM26,469,550 or the
equivalent thereof in Optional Currencies (the "Tranche A Revolving
Facility") which shall not be available as Ancillary Facilities.
2.1
(b) Subject to the terms and conditions of this Agreement (and in the case of
an Ancillary Facility, the terms and conditions of the documents evidencing
the same) the Original ▇▇▇▇▇ ▇▇▇▇▇ to the Borrowers a revolving facility of
up to DM182,885,853 (or the equivalent thereof in Optional Currencies) (the
"Tranche B Revolving Facility"); of which:
(aa) up to DM170,000,000 may be utilised by the Borrowers listed below in Column
1 in the amount and currency set opposite such Borrower in Column 2 on the
Closing:
33
========================================================================================================
Column 1 Borrower Column 2 Currency
Deutschmark Amount
========================================================================================================
Derby Holding Deutschland GmbH 76,000,000 DM
--------------------------------------------------------------------------------------------------------
Gazelle 52,000,000 $
--------------------------------------------------------------------------------------------------------
Raleigh Industries of Canada Ltd. 17,000,000 Dfl
--------------------------------------------------------------------------------------------------------
Raleigh Industries of Canada Ltd. 5,000,000 C$
========================================================================================================
of which up to:
(i) DM64,000,000 (or the equivalent thereof in Optional Currencies) may
be made available by the Ancillary Banks to those Borrowers as
Ancillary Facilities less the Deutschmark Amount of any outstanding
Standby L/Cs at such time (the "Ancillary Facility"); and
(ii) up to DM15,000,000 (or its equivalent thereof in Optional Currencies)
may be utilised by those Borrowers by means of Standby L/Cs (the
"Standby Facility"); and
(bb) the Tranche A Revolving Facility shall be utilised in accordance with the
terms and conditions of this Agreement, but shall not be utilised unless
and until the Tranche B Revolving Facility Available Amount is, or will on
the proposed Drawdown Date be reduced to zero in accordance with this
Agreement. At no time shall the aggregate Deutschmark Amount of outstanding
Tranche A Advances exceed DM26,469,550;
(cc) the full amount of the Facilities (other than the Tranche A Revolving
Facility) may be utilised (in accordance with the terms and conditions of
this Agreement) by the Borrowers on the Business Day immediately following
Closing of which up to:
(iii) DM182,885,853 (or its equivalent in Optional Currencies) may be made
available by the Original Banks by way of Tranche B Advances;
(iv) DM64,000,000 or the equivalent thereof in Optional Currencies may be
made available by the Ancillary Banks to the Borrowers as Ancillary
Facilities less the Deutschmark Amount of any outstanding Standby
L/Cs at such time; and
(v) up to DM15,000,000 (or its equivalent thereof in Optional
Currencies) may be utilised by means of Standby L/Cs,
Provided that, subject to the terms and conditions of this Agreement, at no
time shall the aggregate Deutschmark Amount of outstanding Tranche B
Revolving Advances, Standby L/Cs, amounts owing and unpaid under Clause
11.3 and Ancillary Commitments exceed DM182,885,853 .
2.2 Nature of Banks' obligations and rights
(a) The obligations of each of the Banks under this Agreement are several. The
failure of a Bank to perform any of its obligations will not:
(i) increase the liability of any other Bank under this Agreement nor
impose any liability on the Facility Agent; or
(ii) relieve any other Party from their respective obligations under this
Agreement.
34
(b) The rights of a Finance Party under this Agreement are several. A Finance
Party may, except as otherwise stated in this Agreement, separately enforce
those rights.
2.3 Nature of Borrowers' rights and obligations hereunder
(a) Rights and Obligations: The obligations of the Borrowers under this
Agreement in their capacities as such shall be separate and independent and
not joint and several, provided that the Company and not the other
Borrowers (save in their capacity as Guarantors) shall be liable for:
(i) payment of all amounts becoming due under Clause 15 to the extent
that such amounts are not referable to Utilisations made by or to
monies received or receivable from or to Tranche A Revolving
Commitments, Tranche B Revolving Commitments or, as the case may be,
Standby L/C Commitments which are only available (subject to
satisfaction of conditions) for drawing by a particular Borrower or
Borrowers or are not otherwise in the reasonable opinion of the
Facility Agent referable to a particular Borrower or Borrowers; and
(ii) payment of all amounts due under Clause 25, to the extent that in
the reasonable opinion of the Facility Agent such amounts are not
referable to a particular Borrower or Borrowers.
(b) Facility Agent's determination: The written determination of the Facility
Agent with regard to any matter which is to be determined according to its
reasonable opinion shall, in the absence of manifest error, be conclusive.
No Person shall have any recourse to the Facility Agent in relation to any
such determination if it proves to be the case that its opinion was
incorrect.
(c) Company as Obligors' Agent: Each Obligor (other than the Company) by its
execution of this Agreement or an Accession Agreement irrevocably
authorises the Company to act on its behalf as its agent in relation to the
Senior Finance Documents and irrevocably authorises the Company on its
behalf to give all notices and instructions (including, in the case of a
Borrower, any Request), to execute on its behalf any Accession Agreement
and to make such agreements capable of being given or made by any Obligor
notwithstanding that they may affect such Obligor without further reference
to or the consent of such Obligor including amendments and waivers to this
Agreement and such Obligor shall be bound thereby as though such Obligor
itself had given such notices and instructions (including, without
limitation any Request) or executed or made such agreements.
(d) Company's acts binding: Every act, omission, agreement, undertaking,
settlement, waiver notice or other communication given or made by the
Company under this Agreement, or in connection with this Agreement,
(whether or not known to any other Obligor and whether occurring before or
after such other Obligor became an Obligor under this Agreement) shall be
binding for all purposes on all other Obligors as if the other Obligors had
expressly made, given or concurred with the same. In the event of any
conflict between any notices or other communications of the Company and any
other Obligor, those of the Company shall prevail. For the avoidance of
doubt, references in this Clause 2.3(d) to "Company" shall include the
Company acting in its capacity as Obligors' Agent.
2.4 Maximum Total Commitments
The Total Tranche A Commitment shall not at any time exceed DM26,469,550
(or its equivalent thereof in Optional Currencies) and the Total Tranche B
Commitment shall never exceed DM182,885,853.60 (or its equivalent thereof
in Optional Currencies).
35
3. PURPOSE OF FACILITIES
(a) The proceeds of each Tranche B Revolving and Standby Utilisation (if any)
made on the date of Closing were applied as follows:
(i) first in or towards financing repayment in full by the relevant
Borrower its portion of the Existing Financial Indebtedness or, in
the case of any Standby L/C issued on behalf of a Borrower in or
towards the support of any of its existing Permitted Financial
Indebtedness and in each case in accordance with the Funds Flow
Memorandum at Closing; and
(ii) second in or towards financing payment by the Company of the
Transaction Costs.
(b) The proceeds of each subsequent Utilisation (including for the avoidance of
doubt, a Tranche A Revolving Utilisation) shall be applied in or towards
financing the general working capital requirements and/or other corporate
purposes of the relevant Borrower and its Subsidiaries, or, in the case of
a Standby L/C, such standby L/C shall be issued to support the relevant
Borrower's Permitted Financial Indebtedness provided by the Beneficiary of
such Standby L/C to such Borrower.
(c) Without affecting the obligations of any of the Borrowers under (a) or (b)
above, no Finance Party shall be obliged to concern itself with the
application of amounts raised by any of the Borrowers under this Agreement.
(d) Each Borrower undertakes that no Advance, Standby L/C or Ancillary Facility
shall be used in any way which would be illegal under, or would cause the
invalidity or unenforceability (in whole or in part) of any Senior Finance
Document under any applicable law.
4. CONDITIONS PRECEDENT TO FIRST UTILISATION UNDER THE TRANCHE A REVOLVING
FACILITY
The obligations of each Finance Party to the Company and the Borrowers under
this Agreement in relation to the Tranche A Revolving Facility are subject to
the condition precedent that on or immediately before the start of the relevant
Availability Period all of the representations and warranties in Clause 18.1
(other than those contained in Clause 18.1(l)) are correct in all material
respects and no Default has occurred with respect to the Company or any of its
Subsidiaries and be continuing immediately before the making of an initial
Utilisation under the Tranche A Revolving Facility nor will a Default occur if
the initial Utilisation is made as contemplated in this Agreement.
5. CONDITIONS PRECEDENT TO EACH UTILISATION BY WAY OF ADVANCES AND STANDBY L/CS
The obligation of each Bank to participate in any Utilisation by way of Advances
or Standby L/Cs is subject to the condition precedent that:
(a) on both the date that the relevant Request is delivered to the Facility
Agent and the Drawdown Date for that Advance or Issue Date for that Standby
L/C (as the case may be):
(i) no Default has occurred which is either continuing or has not been
waived in writing by the Facility Agent pursuant to Clause 32;
(ii) the representations in Clause 18.1 which are to be repeated pursuant
to Clause 18.2 on those dates are true and correct; and
36
(iii) no other event is outstanding which constitutes (or with the giving
of notice, lapse of time, determination of maturity or the
fulfilment of any other applicable condition or any combination of
the foregoing, is reasonably likely to constitute) a default under
any document which is binding on any Obligor or any Material Group
Member or any asset of such Obligor or Material Group Member to an
extent or in a matter which might have a material adverse effect on
the financial condition of any Obligor or Material Group Member or
the ability of any Obligor to perform its obligations under the
Finance Documents; and
(b) if the information contained in the latest Borrowing Base Summary delivered
under this Agreement relates, in respect of Eligible Finished Goods,
Eligible Raw Materials or Trade Payables, to a date occurring 50 or more
days prior to such Request and, insofar as the information relates to
Eligible Receivables or Cash, such information relates to a date occurring
more than 5 days prior to the Request an updated Borrowing Base Summary has
been delivered to the Facility Agent such that the information contained
therein in respect of Eligible Finished Goods, Eligible Raw Materials and
Trade Payables does not relate to a date occurring more than 50 days prior
to such Request and the information contained therein in respect of
Eligible Receivables and Cash does not relate to a date occurring more than
10 days prior to such Request.
6. UTILISATION OF THE FACILITIES
6.1 Delivery of a Drawdown Request
(a) Subject to the terms and conditions of this Agreement (including, without
limitation, Clauses 2.1(b) and 6.15) the Obligors' Agent may utilise the
Tranche A Revolving Facility or, as the case may Tranche B Revolving
Facility by delivering to the Facility Agent, not later than 11.00 a.m. on
the day falling 5 Business Days before the Drawdown Date for the relevant
Advance, a duly completed Drawdown Request.
(b) Each Drawdown Request delivered to the Facility Agent shall oblige the
relevant Borrower to borrow the Requested Amount on its Drawdown Date on
the terms and on the conditions stated in this Agreement
(c) No more than 15 Advances may be outstanding at any time.
(d) Lyon Investments B.V. may not utilise or attempt to utilise the Tranche A
Revolving Facility or Tranche B Revolving Facility
(e) The South African Group may not utilise or attempt to utilise the Tranche A
Revolving Facility or Tranche B Revolving Facility.
(f) The Company may not utilise or attempt to utilise the Tranche A Revolving
Facility.
6.2 Completion of Drawdown Request
Each Drawdown Request delivered to the Facility Agent pursuant to Clause 6.1
shall be irrevocable and shall not be considered to have been duly completed
unless it specifies:
(a) the proposed Drawdown Date, which shall be a Business Day occurring during
the relevant Availability Period;
(b) the identity of the Borrower;
37
(c) the Requested Amount of the proposed Advance which shall be a Deutschmark
Amount which is less than or equal to the Adjusted Available Amount for
such Utilisation and which, if less than the Adjusted Available Amount for
such Utilisation is a minimum amount of DM5,000,000 and an integral
multiple of DM1,000,000 and, in the case of the Company, shall be an amount
which when aggregated with all its other outstandings hereunder including,
for the avoidance of doubt, any contingent obligation the Company may have
in respect of any outstanding Standby L/C (other than in its capacity as a
Guarantor) will not exceed the Deutschmark Equivalent of $7,500,000 taking
into account the Deutschmark Amount of any Tranche B Advances scheduled to
be made, repaid or prepaid and any Standby L/Cs scheduled to be issued or
to expire by assuming that the same occurs when due;
(d) the currency of the Advance (being Deutschmarks or an Optional Currency);
(e) the Term of the Advance being requested, which shall be a period of one,
two or three months (or such other duration as the Banks may have
previously agreed in writing for such Advances) which will begin on the
proposed Drawdown Date and end on a Business Day which is or precedes a
Tranche A Final Repayment Date or, as the case may be Tranche B Final
Repayment Date
(f) in the case of a Drawdown Request under Tranche A, that the Tranche B
Revolving Facility is fully drawn:
In addition each Drawdown Request shall be accompanied by a Drawdown
Report.
6.3 Amount of each Bank's participation in an Advance
(a) Subject to the terms of this Agreement, each Additional Bank, or, as the
case may be, each Original Bank shall, on the date specified in any
Drawdown Request for an Advance, make available to the Facility Agent in
the currency of the relevant Advance concerned for the account of the
relevant Borrower the amount of its participation in that Advance in the
proportion (applied to the Requested Amount) which its Tranche A Revolving
Commitment bears to the amount of the Total Tranche A Commitments or, as
the case may be, its Tranche B Revolving Commitment bears to the amount of
the Total Tranche B Commitments, the amount of a Bank's Tranche B Revolving
Commitment and the Total Tranche B Commitments being reduced to take
account of the amount of the Ancillary Commitment of any Ancillary Bank at
such time). All such amounts shall be made available to the Facility Agent
in accordance with Clause 13.1 for disbursement to or to the order of the
relevant Borrower in accordance with the provisions of this Agreement;
(b) If a Bank's Tranche A Revolving Commitment, or, as the case may be Tranche
B Revolving Commitment is reduced in accordance with this Agreement after
the Facility Agent has received a Drawdown Request, then such part of the
proposed Utilisation as is attributable to that Bank and exceeds its
portion of the Tranche A Revolving Facility Available Amount or, as the
case may be the Tranche B Revolving Facility Available Amount (as in each
case so reduced) shall not be made and the amount of such Utilisation shall
be reduced accordingly.
6.4 Delivery of a Standby L/C Request
(a) Subject to the terms and conditions of this Agreement (including, without
limitation, Clause 6.15) the Obligors' Agent may utilise the Standby L/C
Facility by delivering to the Facility Agent, not later than 11.00 a.m. on
the day falling five Business Days or, if the Standby L/C requested on
behalf of a Borrower (the "Requested Standby L/C") has an Issue Date that
coincides with the Expiry Date of an outstanding Standby L/C (the
"Outstanding Standby
38
L/C") issued on behalf of such Borrower, the Beneficiary of the Requested
Standby L/C is the same Beneficiary as the Beneficiary of the Outstanding
Standby L/C and the Requested Standby L/C is requested to be in the same
currency and for the same amount as the Outstanding Standby L/C, three
Business Days before the Issue Date for that Standby L/C, a duly completed
Standby L/C Request.
(b) Each Standby L/C Request delivered to the Facility Agent shall oblige the
relevant Borrower to incur liabilities under this Agreement equal to the
Requested Amount on its Issue Date on the terms and on the conditions
stated in this Agreement.
(c) No more than 5 Standby L/Cs may be outstanding at any time.
(d) Lyon Investments B.V. may not utilise or attempt to utilise the Standby L/C
Facility.
(e) The South African Group may not utilise or attempt to utilise the Standby
L/C Facility.
6.5 Completion of Standby L/C Request
Each Standby L/C Request delivered to the Facility Agent pursuant to Clause 6.4
shall be irrevocable and shall not be considered to have been duly completed
unless it specifies:
(a) the proposed Issue Date, which shall be a Business Day occurring during the
Availability Period;
(b) the identity of the Borrower;
(c) the Requested Amount of the proposed Utilisation which shall be a
Deutschmark Amount which is less than or equal to the lesser of (i) the
then Adjusted Available Amount and, (ii) the then Standby L/C Available
Facility Amount for such Utilisation and which, if less than the lesser of
the Adjusted Available Amount in respect of the Tranche B Revolving
Commitment and the Standby L/C Available Amount for such Utilisation is a
minimum amount of DM3,000,000 and an integral multiple of DM1,000,000,
Provided that, without prejudice to the foregoing, in the case of the
Company, the Requested Amount shall be an amount which, when aggregated
with all its other outstandings hereunder (including, for the avoidance of
doubt, any contingent obligation the Company may have in respect of any
outstanding Standby L/C (other than in its capacity as a Guarantor)), will
not exceed the Deutschmark Equivalent of $7,500,000 taking into account the
Deutschmark Amount of any Tranche B Advances scheduled to be made, repaid
or prepaid and any Standby L/Cs scheduled to be issued or to expire by
assuming that the same occurs when due;
(d) the currency of the Standby L/C (being Deutschmarks or an Optional
Currency);
(e) the Expiry Date of such Standby L/C which shall be no more than twelve
months after the Issue Date of such Standby L/C and be no later than the
Tranche B Final Repayment Date.
(f) the identity of the Beneficiary, together with such other details relating
thereto and the liabilities of the Borrower to which the Standby L/C
relates as the Facility Agent shall consider appropriate.
6.6 Issuing of Standby L/Cs
(a) If a Borrower requests the issuing of a Standby L/C in accordance with this
Agreement, then, subject to sub-paragraph (c) below and Clause 16.2, with
effect from the proposed Issue Date for such Standby L/C the Facility Agent
on behalf of each of the Banks that are to participate
39
in the issue of such Standby L/C shall issue the same to the relevant
Beneficiary, the amount of each such Bank's participation in that Standby
L/C being the proportion (applied to the Requested Amount) which its
Tranche B Revolving Commitment bears to the amount of the Total Tranche B
Commitments (the amount of an Ancillary Bank's Tranche B Revolving
Commitment and the Total Tranche B Commitments being reduced to take
account of the amount of the Ancillary Commitment of any Ancillary Bank at
such time).
(b) If a Bank's Standby L/C Commitment is reduced in accordance with this
Agreement after the Facility Agent has received a Standby L/C Request, then
such part of the proposed Utilisation as is attributable to that Bank and
exceeds its portion of the Standby L/C Available Facility Amount (as so
reduced) shall not be made and the amount of such Utilisation shall be
reduced accordingly.
(c) If at any time following delivery of a Standby L/C Request, and prior to
the issuance of the Standby L/C requested therein any Bank notifies the
Facility Agent that it does not agree, by reason of, the Beneficiary
thereof being an institution which appears in the Specially Designated
National and Blocked Persons List produced by the U.S. Government Office of
Foreign Assets Control or on any other such Governmental list or list of
any Supranational authority in any other relevant jurisdiction in which
such Bank is resident, domiciled or has its Facility Office or is an
institution which is not similarly vetoed by any Government or
Supranational entity in relation to such Bank in such jurisdiction that
such Standby L/C be issued, the Facility Agent shall, promptly upon receipt
of such notification inform each of the other Finance Parties and such
Standby L/C Request shall be treated, for all purposes, as if it had not
been delivered and be void ab initio and the Standby L/C requested therein
shall not be made.
(d) The maximum amount required to be paid by the Banks under or in respect of
a Standby L/C shall not exceed the "Maximum Amount" (as defined in such
Standby L/C) notwithstanding any payments made in respect of such Standby
L/C by any Group Member, whether pursuant to Clause 11.3 or otherwise.
6.7 Facility Agent's Authority
For the purposes of Clause 6.6 each Bank hereby authorises the Facility Agent to
complete each Standby L/C in which such Bank is to participate (which it shall
do through its Facility Office) in the manner contemplated by the relevant
Standby L/C Request and this Agreement and to sign such Standby L/C on its
behalf and to issue the same to the relevant Beneficiary.
6.8 Copy of Standby L/C
The Facility Agent shall, promptly following the issue of a Standby L/C pursuant
to Clause 6.6, forward a copy thereof to the Company, the relevant Borrower on
whose behalf such Standby L/C was issued and to each Bank participating therein.
6.9 No Enquiry
No Finance Party need, before the issue of any Standby L/C, make any enquiry or
otherwise concern itself as to whether any event has occurred which, under the
terms hereof, would relieve such Finance party from its obligations to issue or
to participate in the issue of such Standby L/C and accordingly no Borrower
shall have any right to resist any claim under Clause 11.3 or otherwise on the
ground that the relevant event had occurred before the issue of such Standby
L/C.
40
6.10 Definitions
For the purposes of determining the Adjusted Available Amount Clause 6.2(c) and
6.5(c), and the Standby L/C Available Facility Amount in Clause 6.5(c) and
otherwise in this Agreement:
"Account Debtor" in relation to any Person means any other Person who is or may
become obligated to such Person under, with respect to, or on account of, an
Account;
"Accounts" in relation to any Person means all accounts, accounts receivable,
other receivables, contract rights, instruments, documents, and notes, whether
now owned or hereafter acquired by such Person arising out of the sale, lease or
disposal of goods or provision of services by such Person in the ordinary course
of its trade which constitute a legal, valid and binding obligation of the
relevant Account Debtor (each an "Account");
"Adjusted Available Amount" in relation to an Obligor means the lesser of:
(a) in respect of the Tranche A Revolving Facility, the amount of the Tranche A
Revolving Facility Available Amount, in respect of the Tranche B Revolving
Facility, the amount of the Tranche B Revolving Facility Available Amount
and in respect of the Standby L/C Facility, the amount of the Standby L/C
Facility Available Amount; and
(b) the Deutschmark Equivalent at or about 11:00 a.m. on the Business Day
preceding the date of the relevant Request delivered to the Facility Agent
in respect of the relevant Advance or, as the case may be, the relevant
Standby L/C of the Adjusted Borrowing Base of the relevant Obligor;
"Adjusted Borrowing Base" in relation to any Obligor and any Request, means at
any time:
(a) the amount of the Borrowing Base relating to such Obligor;
(b) less the aggregate Deutschmark Amount of Ancillary Facilities (excluding
that portion of Ancillary Facilities which are solely available for foreign
exchange transactions) and Advances made to, and Standby L/Cs issued on
behalf of, such Obligor that are, at such time, outstanding and, in respect
of a Utilisation, not scheduled to be repaid or, as the case may be, expire
prior to or at the same time as such Utilisation and, taking into account
any other Utilisations requested by such Obligor that are scheduled to be
made or, as the case may be issued;
(c) less the Deutschmark Amount of such Obligor's Borrowing Base (if any) that
has been utilised at such time so as to increase the Adjusted Borrowing
Base of another Obligor under the provisions of this definition contained
in paragraph (d) below and taking into account any repayment of any Advance
scheduled to be made and the amount of any Standby L/C which is scheduled
to expire on or before the proposed Utilisation in relation to the Request
in question in respect of which such Obligor's Borrowing Base was so
utilised;
Provided that for the purposes of this definition, the sum of (a) minus (b)
minus (c) shall never be less than zero,
(d) plus (except in the case of the Company) the aggregate of the lesser of (in
respect of each Obligor (other than such Obligor itself and without double-
counting)):
(i) the Adjusted Borrowing Base at such time of each such Obligor; and
41
(ii) the Maximum Guarantee Amount of each such other Obligor at such
time, as the same is determined by the Facility Agent acting, where
it considers appropriate, on the advice of local counsel;
"Borrowing Base" means, at any time;
(a) in relation to any Obligor incorporated in Germany or such other country or
countries as the Facility Agent may, from time to time specify for this
purpose having regard to applicable laws and current trade practices
therein the aggregate of:
(i) 40% of the aggregate of:
(aa) its Eligible Raw Materials; plus
(bb) its Eligible Finished Goods; less
(cc) the DM equivalent of such Obligor's Trade Payables;
(ii) 80% of its Eligible Receivables after deducting (A) any VAT payable
thereon, (B) to the extent that such Obligor's Trade Payables
exceeds the Deutschmark Equivalent of the sum of such Obligor's
Eligible Raw Materials and its Eligible Finished Goods an amount
equal to such excess and (C) General Provisions; and
(iii) 100% of its Cash Collateral Amount,
Provided that:
(iv) such Obligor's Borrowing Base shall be determined in accordance with
the order stated above; and
(vi) if any amount, determined in accordance with the above shall be a
negative figure, it shall be deemed to be zero for the purpose of
such determination; and
(b) in relation to any Obligor not incorporated in Germany or in respect of
which the Facility Agent has not specified as subject to paragraph (a)
above, the Deutschmark Equivalent of the aggregate of:
(i) 80% of its Eligible Receivables after deducting (A) VAT payable
thereon and (B) General Provisions;
(ii) (other than in respect of the Inventory owned, from time to time, by
the Swedish Obligor which shall not be included) the sum of 40% of
the aggregate of its Eligible Raw Materials and of its Eligible
Finished Goods; and
(iii) 100% of the Cash Collateral Amount;
in each case determined by reference to the latest Borrowing Base Summary.
"Borrowing Base Summary" means the information required to be prepared by or on
behalf of each Obligor and the Company pursuant to the terms hereof in the
agreed form in respect of each Obligor's Eligible Receivables, Eligible Finished
Goods, Eligible Raw Materials, Cash Collateral Amount and, if applicable, Trade
Payables and delivered on a monthly basis in any event and more frequently if
required pursuant to the terms hereof and all schedules appendices and other
documents exhibited or attached thereto;
42
"Cash Collateral Amount" in relation to an Obligor, means the amount from time
to time standing to the credit of each account of such Obligor from time to time
subject to the terms of a Debenture or an Irish Debenture relating to such
Obligor;
"Eligible Finished Goods" in relation to any Obligor, means an amount equal to
the lower of cost and the market value of the Inventory of such Obligor which
consists only of finished goods (as determined by reference to Applicable
Accounting Principles) and which is:
(a) subject to the security granted by or pursuant to the Security Documents
and in compliance therewith and;
(b) insured in accordance with the requirements of the Senior Finance
Documents,
Provided that, in respect of any Obligor:
(i) all finished goods:
(AA) against which such Obligor has made or should have made a provision or
reserve in accordance with the Approved Provisioning Procedure shall
not be included;
(BB) all finished goods which are held by or in the possession of Person(s)
other than the relevant Obligor in relation to whom "Eligible Finished
Goods" falls to be determined (unless held by such Person to the order
of or on trust or as bailee (subject to the trustee or bailee having
no right or interest thereto or therein other than a Permitted
Encumbrance) for the relevant Obligor) shall not be included; and
Provided further that this definition may be amended, varied or supplemented by
the Facility Agent (acting on the advice of local counsel) so as to reflect any
changes to applicable laws or regulations so as to afford the Finance Parties
the same level of protection in respect of such Obligor and its "finished goods"
as at the date of this Agreement, or, in the case of an Acceding Borrower or as
the case may be, an Acceding Guarantor, as the date it became a party to this
Agreement; and
"Eligible Raw Materials" in relation to any Obligor, means an amount equal to
the lower of cost and the net realisable value of the Inventory of such Obligor
which consists of raw materials and consumables (as defined by reference to
Applicable Accounting Principles) which is:
(a) subject to the security granted by or pursuant to the Security Documents
and in compliance therewith; and
(b) insured in accordance with the requirements of the Senior Finance
Documents;
Provided that in respect of any Obligor:
(a) all Inventory which consists only of raw materials and consumables as
determined by reference to Applicable Accounting Principles against which
the Obligor has made or should have made a provision or reserve in
accordance with the Approved Provisioning Procedure shall not be included
to the extent of such provision or reserve shall not be included; and
(b) all Inventory which consists only of raw materials and consumables (as
determined in accordance with Applicable Accounting Principles) which is
held by or in the possession of Person(s) other than the relevant Obligor
in relation to whom "Eligible Raw Materials" falls to be determined (unless
held by such Person to the order of or on trust or as bailee (subject to
the trustee or bailee having no right or interest thereto or therein other
than pursuant to a Permitted Encumbrance) for such Obligor) shall not be
included; and
43
(c) this definition may be amended, varied or supplemented by the Facility
Agent (acting on the advice of legal counsel) so as to reflect any changes
to applicable laws or regulations so as to afford the Finance Parties the
same level of protection in respect of the Obligor and its Inventory which
consists only of raw materials and consumables (as determined in accordance
with Applicable Accounting Principles) as at the date of this Agreement,
or, in the case of an Acceding Obligor or, as the case may be, an Acceding
Guarantor the date it became a party to this Agreement;
"Eligible Receivables" in relation to any Obligor means the amount of the gross
outstanding balance, less all finance charges, late fees and other fees which
are unearned, of Accounts which are:
(a) subject to the security granted by or pursuant to the Security Documents
and in compliance therewith; and
(b) insured in accordance with the requirements of the Senior Finance
Documents;
Provided that in respect of any Obligor, Accounts shall not be included:
(i) if the Account Debtor has taken any corporate action or other steps
have been taken or legal proceedings have been started for its
winding-up, administration, dissolution or re-organisation or for
the appointment of a receiver, administrator, administrative
receiver, trustee or similar officer of it or of any or all of its
revenues and assets or the Account Debtor is or has been deemed
unable to pay its debts as they fall due, commenced negotiations
with any one or more of its creditors with a view to the general
readjustment or rescheduling of its indebtedness or has made a
general assignment for the benefit of or a composition with its
creditors or a moratorium in respect of all or any indebtedness has
been applied for, ordered or declared;
(ii) if such Account(s) are outstanding for a period exceeding 30 days
after the due date (provided that if the due date is not specified,
the due date shall be deemed to be 30 days after the date of the
relevant invoice) or such other period as the Facility Agent shall
in its discretion deem to be the minimum such period;
(iii) if the Account Debtor is a Group Member or an associate or employee
thereof;
(iv) if such Account(s) relate to a transaction entered into on a sale or
return or similar basis;
(v) if such Account(s) are payable more than 270 days after the date
of the relevant invoice or if less such other ageing basis as is
specified in the Borrowing Base Summary relating to such Obligor
and, in any event, such that they do not give rise to a breach of
Clause 20.2(e);
(vi) if such Account(s) have been prepaid to the extent of such
prepayment;
(vii) if such Account(s) are payable otherwise than in cash;
(viii) to the extent such Account(s) are subject to Encumbrances (other
than pursuant to the Security Documents), set off or selling
arrangements or are the subject of any legal action or dispute by
the Account Debtor;
(ix) if such Account(s) are not evidenced by an invoice or in writing;
44
(x) if such Account(s) arise under any licence and the Account Debtor is
wholly or partly owned (directly or indirectly) by any Group Member;
and
(xi) if such Account is owed by an Account Debtor to the Swedish Obligor;
and
(xii) any Account owed by an Account Debtor in respect of which the
Obligor has made a provision as a result of the Obligor's
determination of such Account Debtors' creditworthiness and such
Account is not excluded pursuant to one or more of paragraphs (i) -
(xi) above;
Provided further that this definition may be amended, varied or supplemented by
the Facility Agent (acting on the advice of legal counsel) so as to reflect any
changes to applicable laws or regulations so as to afford the Finance Parties
the same level of protection in respect of such Obligor and its "Accounts" as at
the date of this Agreement, or, in the case of an Acceding Borrower or, as the
case may be, an Acceding Guarantor the date it became a party to this Agreement;
"Inventory" in relation to an Obligor, means any and all inventory and other
stocks in all of its forms, wherever located, now or hereafter existing and
whether acquired by purchase, merger or otherwise and all raw materials and
work-in-progress, all finished goods thereof and all materials used or consumed
in the manufacture, in each case, determined in accordance with Applicable
Accounting Principles;
"Maximum Guarantee Amount" means, in respect of any Obligor and a particular
Borrower, at any time, the maximum Deutschmark Amount such Obligor would be able
to pay (net of any Tax or other amounts payable (other than to the Facility
Agent) in connection therewith) to the Facility Agent under its Guarantee if a
demand was made thereunder at such time in accordance with the terms and
conditions of its Guarantee in respect of any amounts payable by such Borrower
under the Senior Finance Documents without contravening any existing applicable
law, statute, rule or regulation or any judgment, decree, consent or permit to
which such Obligor is subject, or conflict with, or result in any breach of any
of the terms of, or constitute a default under any agreement or other instrument
to which such Obligor is expressed to be party or is subject to or by which it,
or any of its property is bound;
"Standby L/C Facility Available Amount" at any time in respect of the Standby
L/C Facility means the lesser of:
(a) the amount of the Standby L/C Commitments taking into account any reduction
in the Standby L/C Commitment of a Bank which is an Ancillary Bank, as
provided for at Clause 7 less (i) the aggregate of the undrawn portion of
all Standby L/Cs issued under this Agreement that are outstanding at such
time and (ii) any amount due and payable by any Borrower under Clause 11.3
in respect of any Standby L/C but unpaid and taking into account any
Standby L/Cs scheduled to be issued or to expire by assuming that the same
occurs when so scheduled; and
(b) the Tranche B Revolving Facility Available Amount; and
"Revolving Tranche A Facility Available Amount" means at any time the aggregate
amount of the Tranche A Revolving Commitments less the aggregate of the
Deutschmark Amount of the outstanding Tranche A Advances at such time, taking
into account, in respect of a proposed Utilisation, any Tranche A Advances
scheduled to be made, repaid or prepaid by assuming that the same occurs when
due.
"Revolving Tranche B Facility Available Amount" at any time means the aggregate
amount of the Tranche B Revolving Commitments (taking into account any reduction
in the Tranche B Revolving
45
Commitment of a Bank which is an Ancillary Bank, as provided for in Clause 7 and
the reduction in the Total Tranche B Revolving Commitments, as provided for in
Clause 11.1 less the aggregate of:
(a) the Deutschmark Amount of the outstanding Tranche B Advances at such time,
taking into account, in respect of a proposed Utilisation, any Tranche B
Advances scheduled to be made, repaid or prepaid by assuming that the same
occurs when due; and
(b) the undrawn portion of all Standby L/Cs issued under this Agreement that
are outstanding at such time plus any amounts due and payable by any
Borrower under Clause 11.3 in respect of any Standby L/C but unpaid and
taking into account any Standby L/Cs scheduled to be issued or expire by
assuming that the same occurs when so scheduled.
"Trade Payables" means, in relation to an Obligor and at any time, the amount
owed to trade creditors (other than another Group Member) in respect of the
supply of Inventory to such Obligor at such time by such Obligor.
6.11 Calculation
When calculating the Eligible Receivables, Eligible Finished Goods, the Eligible
Raw Materials or Trade Payables of any Obligor such calculation shall be made in
the Local Currency of such Obligor.
6.12 Determination
The Facility Agent shall determine from time to time the Adjusted Available
Amount by reference to each of the then latest relevant Borrowing Base Summaries
delivered to the Facility Agent pursuant to the terms hereof provided that the
Facility Agent shall not be required to have regard to any Borrowing Base
Summary which is delivered to it later than two Business Days prior to the date
of such determination.
6.13 Undrawn amount
Any part of the Facilities undrawn or unutilised at the end of their respective
Availability Periods shall be immediately cancelled (but without prejudice to
the Borrowers utilising the Tranche A Revolving Facility in respect of any
further Availability Period in accordance with the provisions of this
Agreement).
6.14 Deutschmarks in lieu of Optional Currency
Notwithstanding that any Borrower has in any Request delivered hereunder made a
request for a Utilisation in an Optional Currency any Bank may by notification
to the Facility Agent at any time up to the notification of LIBOR in respect of
such Utilisation or, in relation to a Utilisation by way of Standby L/C's issue,
confirm that it is unwilling to participate in such Utilisation in such Optional
Currency in which case it shall, if it would otherwise be required to
participate in such Utilisation in such Optional Currency, not be obliged to do
so, but instead be required to participate in such Utilisation in Deutschmarks.
6.15 Dutch Borrowers
At all times following the date falling 30 days after the date of this Agreement
the Company shall procure that no Borrower, other than the Company, shall
utilise the Tranche B Revolving Facility or the Standby L/C Facility at any time
if, at such time, the aggregate Deutschmark Amount of Advances drawn down by
Gazelle is less than the Deutschmark equivalent of 75 per cent of the sum of the
book value of the gross assets of Gazelle at such time determined in accordance
with Applicable Accounting Principles and for this purpose:
46
(a) If Gazelle has Subsidiaries, the calculation shall be made by using the
gross assets of it and its Subsidiaries; and
(b) the calculation of gross assets shall be made by reference to the latest
Financial Accounts of Gazelle or, as the case may be a consolidation of the
Financial Accounts of it and its Subsidiaries used for the purpose of the
then latest unaudited quarterly or audited annual consolidated Financial
Accounts of the Group delivered to the Facility Agent under Clause 19.1.
7. ANCILLARY FACILITIES
7.1 Ancillary Facilities
(a) Subject to the terms and conditions of this Agreement the Obligors' Agent
may from time to time by notice in writing to the Facility Agent, request
the establishment of an Ancillary Facility by an Ancillary Bank, each such
Ancillary Facility to become available with effect from the date (the
"Effective Date") (or such later date as the Obligors' Agent and the
Facility Agent may agree from time to time) specified in such notice being
a date not less than seven Business Days after the date such notice is
received by the Facility Agent. Any such notice shall specify:
(i) the proposed Borrower;
(ii) the proposed Effective Date and expiry date for the Ancillary
Facility concerned being, in the case of the expiry date, a Business
Day on or prior to the Tranche B Final Repayment Date;
(iii) the type of the proposed Ancillary Facility which may be a committed
overdraft facility, BACS, cheque drawing, letter of credit,
guarantee, foreign exchange, banking and/or such other cash
management facility as such Ancillary Bank may agree provided that no
Ancillary Facility shall be made available in respect of any currency
other than Deutschmarks or an Optional Currency or such other
currencies as are notified to the Facility Agent by the Borrower;
(iv) the proposed Ancillary Bank;
(v) the Ancillary Commitment under the proposed Ancillary Facility at any
time (which, when aggregated with the actual and contingent liability
of such Ancillary Bank under all other Facilities made available by
it, shall not exceed such Ancillary Bank's Revolving Commitment); and
(vi) the portion (if any) of the Ancillary Facility that may be utilised
by way of overdraft, advance, letter of credit or similar facilities
and the portion (if any) that may be utilised for the purpose of
foreign exchange transactions; and
(vii) such other details as to the nature, amount and operation of the
proposed Ancillary Facility as the Facility Agent may reasonably
require,
and the Facility Agent shall promptly notify each Bank upon receipt of any
such notice.
(b) Subject to the terms and conditions of this Agreement, any Bank so
nominated shall make the proposed Ancillary Facility available with effect
on and from the Effective Date subject to the approval of the Facility
Agent (acting reasonably) and the Facility Agent having
47
received notification from such Ancillary Bank that it approves of the
proposed Ancillary Facility.
(c) Any material variation in any Ancillary Facility or any proposed increase
or reduction in the amount thereof shall be effected on, and subject to the
provisions, mutatis mutandis, of this Clause 7.
(d) The maximum aggregate Ancillary Commitments under all of the Ancillary
Facilities at any time shall not exceed the lesser of (i) the Tranche B
Revolving Facility Available Amount and (ii) DM64,000,000 or (its
equivalent in Optional Currencies) less (in either case), the sum of the
Deutschmark Amount of any outstanding Standby L/Cs at such time and any
amounts due and payable by any Borrower under Clause 11.3 in respect of any
Standby L/C but unpaid and taking into account any Standby L/Cs scheduled
to be issued or expire by assuming that the same occurs when so scheduled.
(e) Without prejudice to paragraph (d) the sum of the portions of the Ancillary
Facilities that may be utilised by way of overdraft, advance, letter of
credit or similar facilities may not exceed DM43,000,000 or its equivalent
in Optional Currencies and the sum of the portions of the Ancillary
Facilities that may be utilised for the purpose of foreign exchange
transactions may not exceed DM32,000,000 or its equivalent in Optional
Currencies in each case determined by reference to the definition
"Ancillary Outstanding".
(f) Any Ancillary Facility provided by an Ancillary Bank shall terminate no
later than the Tranche B Final Repayment Date.
(g) Any amounts owing or outstanding under any Ancillary Facility and all
banking facilities provided thereunder on the Tranche B Final Repayment
Date shall be repaid and/or, as the case may be, cancelled in full by the
relevant Borrower on the Tranche B Final Repayment Date.
(h) Subject to the terms and conditions of this Agreement and without prejudice
to the proviso contained in Clause 7.2(f), the Tranche B Revolving
Commitment of an Ancillary Bank shall be reduced by an amount equal to such
Ancillary Bank's Ancillary Commitment and its Standby L/C Commitment shall
be reduced by a proportionate amount, until such time as all or part of its
Ancillary Facility is cancelled, whereupon such Bank's Tranche B Revolving
Commitment shall be increased by the amount its Ancillary Facility has been
so cancelled and its Standby L/C Commitment shall be increased by a
proportionate amount.
(i) The maximum amount outstanding under Ancillary Facilities made to the
Company shall not at any time (when aggregated with all other outstandings
hereunder (including, for the avoidance of doubt, any contingent obligation
the Company may have in respect of any outstanding Standby L/C (other than
in its capacity as a Guarantor)) exceed the Deutschmark Equivalent of
$7,500,000 (determined by reference to the definition "Ancillary
Outstanding") taking into account any Advances scheduled to be made to, or
repaid or prepaid by the Company and Standby L/Cs issued on behalf of the
Company scheduled to be issued or expire by assuming that the same occurs
when so scheduled.
(j) Lyon Investments B.V. may not utilise or attempt to utilise the Ancillary
Facilities.
(k) The South African Group may not utilise or attempt to utilise the Ancillary
Facilities.
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7.2 Operation of Ancillary Facilities
(a) The rate of interest, fees and other remuneration in respect of each
Ancillary Facility shall be determined by agreement between the Ancillary
Bank and the relevant Borrower concerned and the interest, fees and other
remuneration for all Ancillary Facilities shall be based upon the normal
market rates and terms from time to time of the Ancillary Bank and shall
not be more onerous than the corresponding provisions (if any) of this
Agreement.
(b) In the case of inconsistency between any term of an Ancillary Facility and
of this Agreement, the terms of this Agreement shall prevail.
(c) Subject to Clause 7.2(a) and (b) above, the terms governing the operation
of any Ancillary Facility (including the terms of any counter-indemnity
required in connection therewith) shall be those determined by agreement
between the Ancillary Bank and the Borrower concerned, provided that such
terms are based upon normal commercial terms, save as may be varied by this
Agreement. A copy of any such terms shall on request by the Facility Agent
be provided by the Ancillary Bank to the Facility Agent (and each Borrower
consents to such copies being provided to the Facility Agent and, if
requested, any Bank).
(d) Each Borrower and each Ancillary Bank agrees with and for the benefit of
each Bank that the Ancillary Outstandings under any Ancillary Facility
provided by that Ancillary Bank shall not exceed the Tranche B Revolving
Commitment of that Ancillary Bank or the amount of the relevant Ancillary
Facility.
(e) Each Borrower and the Ancillary Bank will, promptly upon request by the
Facility Agent, supply the Facility Agent with such information relating to
the operation of each Ancillary Facility provided by such Ancillary Bank to
such Borrower (including, without limitation, the Ancillary Outstandings
thereunder) as the Facility Agent may from time to time request. Each
Borrower consents to all such information being released to the Facility
Agent and each Bank.
(f) No Ancillary Bank may, until notice has been served under Clause 21.2,
demand repayment of any moneys made available by it or demand cash cover in
respect of any guarantees, documentary credits or similar contingent
liabilities made available by it, under its Ancillary Facility or take any
action analogous to any of the foregoing under any other type of banking
arrangements provided by it under its Ancillary Facility (i) at any time
prior to the date on which the Tranche A Revolving Commitments of each
Additional Bank are reduced to zero after the last Tranche A Final
Repayment Date in accordance with the provisions of this Agreement; and
(ii) unless there is at such time a Tranche B Advance available to be drawn
down under this Agreement in an amount equal to the amount so demanded
under the Ancillary Facility (provided that for the purposes of determining
whether or not a Tranche B Advance is then available for drawdown the
Tranche B Revolving Commitment of the relevant Ancillary Bank shall be
deemed to be increased by the amount (not exceeding the amount of its
Ancillary Commitment) so demanded) such Tranche B Advance to be used to
repay or provide cash cover in respect of the amount so demanded under the
Ancillary Facility. On and subject to the terms of this Agreement, each of
the Original Banks shall participate in any such Tranche B Advance in such
amount as will result, after the making of such Advance, in the proportion
which the aggregate amount of its participation in the Tranche B Advances
then outstanding bears to the aggregate amount of the Tranche B Advances
then outstanding, being equal to the proportion which its Tranche B
Revolving Commitment bears to the aggregate of the Tranche B Revolving
Commitments.
49
7.3 Nomination
Each of the parties hereto agrees that any Bank that has agreed, in
accordance with the terms and conditions of this Agreement, to provide an
Ancillary Facility may nominate its Affiliate (each such Affiliate being a
"Nominated Affiliate"), by giving written notice to the Facility Agent, to
discharge such Bank's obligations under this Agreement to provide such
Ancillary Facility. To the extent that a Nominated Affiliate provides an
Ancillary Facility on behalf of a Bank (the "Nominating Bank"), the
Nominating Bank shall be deemed to have discharged such obligations with
respect to such Ancillary Facility.
7.4 Delivery of Nominee Notice
Upon a Nominating Bank nominating an Affiliate in accordance with Clause
7.3, such Nominating Bank shall deliver to the Facility Agent a Nominee
Notice in the form of the document contained in Schedule 12.
7.5 Date of Accession
From the date of delivery of any executed Nominee Notice (the "Delivery
Date") by a Nominating Bank in respect of a nominated Affiliate such
Nominated Affiliate shall become an Ancillary Bank for the purposes of this
Agreement and in particular this Clause 7.
7.6 Execution of Nominee Notice
Upon receipt of each Nominee Notice duly executed by the relevant Nominated
Affiliate the Facility Agent shall execute such Nominee Notice on its own
behalf and on behalf of each other Finance Party. Each Finance Party
(other than the Facility Agent) hereby irrevocably authorises the Facility
Agent to execute such Nominee Notice on its behalf and each Obligor (other
than the Company) hereby irrevocably authorises the Company to execute such
Nominee Notice on its behalf.
7.7 Rights and Obligations of the Parties
Each of the parties hereto, upon the Delivery Date, shall acquire the same
rights and assume the same obligations, as between themselves and to the
Nominated Affiliate, under the Senior Finance Documents, as they would have
acquired and assumed had such Nominated Affiliate been an original party to
the Facility Agreement. Each Nominated Affiliate shall upon the Delivery
Date acquire such rights and assume such obligations under the Senior
Finance Documents (including without limitation to be a Secured Beneficiary
as defined therein) to and against the parties hereto as if it were an
Ancillary Bank at the date of this Agreement.
7.8 Maximum Ancillary Commitment
The Ancillary Commitment under an Ancillary Facility, proposed to be given
by a Nominated Affiliate who has become an Ancillary Bank pursuant to
Clause 7.5, shall not, when aggregated with the actual and contingent
liability (calculated without reference to Clause 7.9) of the Nominating
Bank of such Nominated Affiliate, together with any other Ancillary
Facilities provided by such Nominating Bank and/or any of its Affiliates,
exceed such Nominating Bank's Tranche B Revolving Commitment.
7.9 Calculations
For the purpose of this Agreement (including without limitation the
calculation of such Bank's Tranche B Revolving Commitment, Standby L/C
Commitment, Tranche B Revolving
50
Facility Available Amount and Standby L/C Facility Available Amount) any
Ancillary Facility provided by a Nominated Affiliate of a Nominating Bank,
shall be deemed to have been provided by such Nominating Bank.
7.10 Intercreditor
The parties hereto agree that any Nominated Affiliate that delivers a
Nominee Notice in accordance with the provisions of Clause 7.5 hereof
shall, become a party to each of the Intercreditor Agreements as a Bank.
7.11 Term of Ancillary Facility
Subject to the provisions of this Agreement, when an Ancillary Facility is
provided by a Nominated Affiliate it shall be provided on such terms and
conditions stipulated in this Agreement with respect to Ancillary
Facilities.
PART 3
8. INTEREST
8.1 Standby L/C Commission
(a) The Borrower identified as such in the Standby L/C Request relating to a
Standby L/C shall, on the expiry of each period of three months after the
Issue Date of such Standby L/C and on the Expiry Date of such Standby L/C,
pay to the Facility Agent for the account of the Banks participating in
that Standby L/C a commission, such commission calculated by the Facility
Agent at the rate of the Margin on the amount of the undrawn portion of
that Standby L/C on each day during the period beginning on the Issue Date
of that Standby L/C is issued and ending on the Expiry Date of such Standby
L/C.
(b) If a Borrower procures the release of a Bank from its obligations under a
Standby L/C pursuant to Clause 16.2 such Bank shall not be entitled to any
commission occurring thereon after the date of such release.
8.2 Interest rate
Subject to Clause 9, the rate of interest which shall accrue on each Advance
during its Term is the rate, per annum, determined by the Facility Agent to be
the aggregate of:
(a) LIBOR relative to such Advance for such Term;
(b) the applicable Margin; and
(c) in the case of an Advance denominated in Sterling, the Additional Cost
applicable thereto from time to time during such Term.
8.3 Due date
Save as otherwise provided in this Agreement, accrued interest on each Advance
during its Term is payable by the relevant Borrower in arrears on its Repayment
Date and, if any Term exceeds six months, on the expiry of each period of six
months during such Term.
51
8.4 Duration
Interest shall accrue (both before and after judgment) from (and including) the
Drawdown Date for the relevant Advance to (but excluding) the date that such
Advance is repaid in full.
8.5 Notification of LIBOR by Facility Agent
The Facility Agent shall promptly notify each of the other Parties of any
determination of LIBOR made by it under this Agreement.
9. DEFAULT INTEREST
9.1 Failure to Pay
If any Borrower fails to pay any amount payable by it under this Agreement or
under the Security Documents on the due date (the unpaid balance being an
("Overdue Amount"), such Borrower shall, pay default interest on the Overdue
Amount from (and including) the due date to (but excluding) the date such
Overdue Amount is repaid in full, both before and after judgment.
9.2 Rate
Subject to Clause 9.4, default interest shall be payable on an Overdue Amount at
a rate, per annum, determined by the Facility Agent to be equal to the aggregate
of two per cent. (2.00%) plus the applicable Margin (and, in the case of an
Overdue Amount denominated in Sterling, the Additional Cost applicable thereto
from time to time) and LIBOR.
9.3 Default Interest Period
The period during which an Overdue Amount is outstanding shall be divided into
successive periods (each a "Default Interest Period"), each of which (apart from
the first) shall start on the last day of the preceding Default Interest Period.
The duration of each Default Interest Period shall (save as provided at Clause
9.4) be selected by the Facility Agent having regard, where possible, to the
likely date that the relevant Overdue Amount will be repaid in full.
9.4 Unexpired Portion
If any Overdue Amount corresponds to the principal amount payable in respect of
an Advance which has become repayable prior to its Repayment Date, the first
Default Interest Period which shall be selected by the Facility Agent shall be
of a duration equal to the unexpired portion of the Term of such Advance. The
rate of the default interest payable in respect of such Overdue Amount during
that unexpired period shall be two per cent. (2.00%) over the rate which would
have been applicable to such Advance had it not so fallen due.
9.5 On Demand
Any interest which shall have accrued under this Clause 9 in respect of an
Overdue Amount shall be payable on demand and, if not paid, compounded at the
end of its then current Default Interest Period.
10. MARKET DISRUPTION
10.1 Disruption events
If, in relation to any Advance and its Term relative thereto:
52
(a) "LIBOR" is to be determined to pursuant to paragraph (b) of the definition
thereof and no, or where there is more than one Reference Bank only one,
Reference Bank supplies an interest rate to the Facility Agent as required
by the definition of LIBOR after the Facility Agent has requested such a
rate from the Reference Banks; or
(b) the Facility Agent shall have received notification from a Bank or Banks
whose participations in such Advance constitute at least thirty five per
cent. (35%) by value of such Advance that by reason of circumstances
affecting the London Interbank Market generally:
(i) deposits in the currency of such Advance for the same period as such
Term will not be readily available to them in the London Interbank
Market in sufficient amounts in the ordinary course of business to
fund their respective participations in such Advance for such Term; or
(ii) whilst such deposits are so available, the cost of such deposits
exceeds LIBOR as determined in relation to such Advance for such Term;
or
(c) the Facility Agent shall have received notification from any Bank (an
"Affected Bank") that by reason of applicable law or regulation it is
unable to fund its participation in such Advance during such Term by
deposit(s) in the currency of such Advance obtained in the London Interbank
Market in the ordinary course of business;
the Facility Agent shall promptly give written notice of such determination or
notification to the Obligors' Agent and each of the Banks.
10.2 Effect
After the giving of any notice by the Facility Agent following the occurrence of
any of the events referred to in Clause 10.1 if the requested Advance was to be
denominated:
(a) in an Optional Currency (other than Sterling or Dollars) such Advance shall
not be made; or
(b) in Deutschmarks, Sterling or Dollars, the requested Advance will, subject
to the terms and conditions of this Agreement, be made by the Banks, have a
Term of one month and bear interest during its Term at the rate determined
by the Facility Agent to be the aggregate of the Margin plus the rate
determined by each Bank before the Repayment Date of the Advance to be the
rate which expressed (as a percentage rate per annum) the cost of that Bank
of funding its portion of the Advance from whatever source it may select
(acting reasonably).
Within three Business Days of the Facility Agent giving a notice under Clause
10.1, the Facility Agent and the Company will enter into negotiations with a
view to agreeing a substitute basis for determining the rate of interest which
may be applicable to any future Advances. Any substitute basis that is agreed
shall be confirmed in writing, be deemed to be a term of this Agreement, take
effect in accordance with its terms and be binding on the Parties. The Facility
Agent confirms to the Banks that it will not agree to any substitute basis
without the prior consent of each Bank.
53
PART 4
11. REPAYMENT, PREPAYMENT AND CANCELLATION
11.1 Repayment of Advances
(a) Each Borrower shall repay the full amount of each Advance made to it on
the Repayment Date relating to that Advance, provided always that the full
amount of each (i) Tranche A Advance outstanding on a Tranche A Final
Repayment Date shall be repaid in full on such Tranche A Final Repayment
Date (ii) Tranche B Advance outstanding on the Tranche B Final Repayment
Date shall be repaid in full on the Tranche B Final Repayment Date,
together, in each case with all interest, costs and expenses thereon.
(b) Without prejudice to a Borrower's obligation to repay the full amount of
each Advance made to it on the due date, and without any change to the
amount of any Advance involved, subject to any contrary legal requirement,
where on the same day as such Borrower is due to repay an Advance such
Borrower also requests to draw down (and is entitled pursuant to the terms
of this Agreement to so draw down) an Advance in the same currency, the
amount to be so repaid and the payment by the Facility Agent to such
Borrower of the proceeds of the Advance being drawn shall be settled by
netting off the one against the other so that the amount actually paid in
cash shall be the net amount only.
11.2 Facility Agent to notify Banks of demand
As soon as practicable after it receives a demand for payment under a Standby
L/C, the Facility Agent shall notify the Borrower on whose behalf it was issued
and the Banks that participated in such Standby L/C of the amount of that demand
and the date on which the amount demanded is required to be paid, whereupon that
Borrower shall be obliged to pay to the Facility Agent for account of such Banks
on such date an amount equal to the amount demanded, as reduced by any sum then
standing to the credit of the Standby L/C Accounts (as defined in Clause 31.4)
relating to that Standby L/C.
11.3 L/C indemnity
Each Borrower hereby undertakes to indemnify and to hold harmless each Bank from
and against all liabilities, costs, losses, damages and expenses which such Bank
may at any time incur or sustain as a result of its participation in any Standby
L/C requested by such Borrower.
11.4 Banks' Discretion
The Banks that participated in each Standby L/C shall at all times be entitled
to make any payment under such Standby L/C for which a request, demand or other
claim has been made thereunder in accordance with the terms thereof without
further investigation or enquiry and none of them nor the Facility Agent on
their behalf need in any way concern itself with the propriety of any claim made
or purported to be made under and in the manner required by the terms of such
Standby L/C accordingly, it shall not be a defence to any demand made of any
Borrower hereunder, nor shall any of the obligations of any Borrower hereunder
be impaired by the fact (if it be the case), that any such Bank or the Facility
Agent on its behalf was or might have been justified in refusing payment, in
whole or in part, of the amounts so claimed.
11.5 Voluntary cancellation
11.5 (a) Tranche A Revolving Facility
54
The Obligors' Agent may, by giving to the Facility Agent not less
than 10 Business Days' prior notice to that effect, cancel the whole
or any part (being a minimum amount of DM1,000,000) of the Total
Tranche A Commitments whereupon the Tranche A Revolving Commitment of
each Additional Bank shall be reduced by a proportionate amount and
pro rata to their respective Tranche A Revolving Commitments at such
time
(b) Facility Tranche B
Provided that the Tranche A Revolving Commitments of each Additional
Bank have been cancelled, the Obligor's Agent may by giving to the
Facility Agent not less than 10 Business Days prior notice to that
effect, cancel the whole or any part (being a minimum amount of
DM1,000,000) of the Total Tranche B Commitments whereupon the Tranche
B Revolving Commitment of each Original Bank (including, for the
avoidance of doubt, the Tranche B Revolving Commitment of each
Ancillary Bank but disregarding, for this purpose its Ancillary
Commitment) shall be reduced by a proportionate amount and pro rata
to their respective Tranche B Revolving Commitments at such time and
the Standby L/C Commitment of each Bank shall be reduced by a
proportionate amount pro rata.
Provided that the Tranche A Revolving Facility or, as the case may be
the Tranche B Revolving Facility shall not be reduced pursuant to
this Clause 11.5 to below the Deutschmark Amount of outstanding (or
scheduled to be outstanding under this Agreement) Tranche A Advances
or, as the case may be Tranche B Advances or the Standby L/C Facility
be reduced to below the Deutschmark Amount of Standby L/Cs issued
that have not expired or, in respect of which an amount is due and
payable by any Borrower under Clause 11.3, or scheduled to be issued
(in accordance with this Agreement) on the relevant date, on the
assumption that any Tranche B Advances due to be repaid, in
accordance with the provisions of this Agreement are so repaid and
that any Standby L/Cs due to expire so expire without the Banks party
to such Standby L/Cs being required to make any (or any further)
payment thereunder.
11.6 Mandatory Prepayment on Listing
(a) If any steps are taken in or towards the Company or any Group Member being
Listed the Company shall immediately notify the Facility Agent thereof
specifying the date on which the proposed Listing is to occur.
(b) Following receipt of a notice under Clause 11.6(a) above the Facility
Agent shall consult with the Company during the period of 30 days
following such receipt and shall, if so instructed by the Banks, give a
notice of continuance notwithstanding the proposed Listing (a "Listing
Notice of Continuance") of the Facilities. During such period a Borrower
shall only be permitted to:
(i) serve a Drawdown Request hereunder which specifies that the
Repayment Date for the Advance requested in such Drawdown Request
will fall on a date not more than 30 days after the expiration of
such period;
(ii) serve a Standby L/C Request hereunder which specifies that the
Expiry Date for the Standby L/C requested in such Standby L/C
request will fall on a date not more than 30 days after the expiry
of such period; and
55
(iii) utilise an Ancillary Facility such that the obligation of the
relevant Borrower thereunder in respect of such utilisation will be
able to be fulfilled on a date not more than 30 days after the
expiry of such period.
Upon receipt of a Listing Notice of Continuance, the right of each Borrower
to serve a Drawdown Request or, as the case may be, a Standby L/C Request
and to utilise any Ancillary Facility made available to it at such time
without such limitation shall be reinstated.
(c) If at the end of the period referred to in Clause 11.6 (b), the Company has
not received a Listing Notice of Continuance then the Facility Agent may,
and shall if so instructed by the Majority Banks, declare:
(i) that any unutilised portion of the Facilities shall be cancelled
whereupon the same shall be cancelled and the Tranche A Revolving
Commitment, Tranche B Revolving Commitment Ancillary Commitment and
Standby L/C Commitment of each Bank shall be reduced to zero;
(ii) any outstanding Advances with a Repayment Date falling on a date
later than the relevant Listing, (the "Listing Date") shall be
prepaid on or before the Listing Date, together with accrued
interest thereon up to the date of payment and all other amounts
payable to the Facility Agent and each Bank hereunder (including any
amounts payable under Clause 25.1(b));
(iii) each Borrower on whose behalf a Standby L/C was issued with an
Expiry Date falling on a date later than the Listing Date shall pay
to the Facility Agent no later than the Listing Date for the credit
of each Bank that participated in such Standby L/C an amount in cash
equal to the undrawn amount of such Standby L/C less any sum then
standing to the credit of the Standby L/C Accounts (as defined at
Clause 31.4) relating to that Standby L/C or procure the release of
each such Bank from its obligations under each such Standby L/C; and
(iv) any outstanding amounts under the Ancillary Facility shall be
prepaid or repaid on or before the Listing Date or, in respect of
any contingent obligations of the relevant Borrower thereunder cash
collateralised by the relevant Borrower unless on or prior to the
Listing Date, the relevant Borrower has procured the release of the
relevant Ancillary Bank from such contingent liability.
11.7 No reborrowing of cancelled amounts/
No amounts cancelled under this Clause 11 may be reborrowed. Any amounts
so cancelled shall be applied in reducing first pro rata the Tranche A
Revolving Commitments of each Additional Bank, and secondly pro rata the
Tranche B Revolving Commitments of each Original Bank (including for the
avoidance of doubt, the Tranche B Revolving Commitment of each Ancillary
Bank (but disregarding for this purpose any Ancillary Commitment and the
Standby L/C Commitment of the Banks.)
11.8 Prepayment Fee
Any prepayment or cash collateralisation of any Utilisation made under any
provision of this Agreement may be made without any fee or penalty (but without
prejudice to any amount due pursuant to Clause 25.1(b)).
56
11.9 Cancellation and Prepayment of a Bank's Tranche A Revolving Commitment,
Tranche B Revolving Commitment and Standby L/C Commitment
(a) If a Borrower is required to make any additional payment to a Bank
pursuant to Clause 14 or a Bank claims indemnification under Clause 14 or
Clause 15, the Obligors' Agent may, provided that the relevant
circumstances are still continuing, serve a notice on such Bank through
the Facility Agent, whereupon such Bank's Tranche A Revolving Commitment,
Tranche B Revolving Commitment Ancillary Commitment (if any) and Standby
L/C Commitment shall immediately be cancelled.
(b) Five Business Days after the date of service of any such notice or on such
later date as may be agreed between the Facility Agent, the Obligors'
Agent and such Bank, each Borrower shall:
(i) repay the relevant Bank's proportion of the outstanding Advances
together with accrued interest thereon and any other amounts payable
by each Borrower to such Bank under this Agreement, including any
amount payable in respect of breakage costs on the amount prepaid
pursuant to Clause 25.1(b); and
(ii) pay to the Facility Agent for the credit to the relevant Standby L/C
Account on such Bank's books relating to each Standby L/C in which
such Bank has participated an amount equal to the amount of its
participation in that Standby L/C or alternatively procure the
release of such Bank from its obligations under such Standby L/C;
and
(iii) repay any outstanding amounts under any Ancillary Facility provided
to it by such Bank and cash collateralise any contingent obligation
thereunder or, if the contingent liability is that of the Ancillary
Bank, procure the release of the Ancillary Bank from such contingent
liability.
11.10 Notices of prepayment and cancellation
(a) Any notice of prepayment and cancellation delivered under this Agreement is
irrevocable.
(b) Subject to the provisions of this Agreement each notice shall specify the
date upon which such prepayment and cancellation is to be made and the
amount of such prepayment and cancellation.
11.11 Notification of Bank(s)
The Facility Agent shall notify the relevant Bank(s) promptly upon receipt of
any notice of prepayment and cancellation.
11.12 Only method
No payment, prepayment or cancellation is permitted other than in accordance
with the provisions of this Agreement.
11.13 European Economic and Monetary Union
(a) Definitions In this Clause 11.13 and in each other provision of this
Agreement to which reference is made in this Clause 11.13 expressly or
impliedly (including, without limitation, Clause 15), the following terms
have the meanings given to them in this Clause 11.13:
57
"EMU" means Economic and Monetary Union as contemplated in the Treaty on
European Union;
"EMU Legislation" means legislative measures of the European Council for
the introduction of, changeover to or operation of a single or unified
European currency (known as the euro), being in part the implementation of
the third stage of EMU;
"euro" means the single currency of participating member states of the
European Union;
"euro unit" means the currency unit of the euro;
"national currency unit" means the unit of currency (other than a euro
unit) of a participating member state;
"participating member state" means each state so described in any EMU
legislation; and
"Treaty on European Union" means the Treaty of Rome of 25 March 1957, as
amended by the Single ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and the Maastricht Treaty (which
was signed at Maastricht on 7 February 1992 and came into force on 1
November 1993), as amended from time to time.
(b) The provisions of Clauses 11.13(c) to 11.13(j) (inclusive) shall apply
provided that, if and to the extent that any such provision relates to any
state (or the currency of such state) which is not be a participating
member state, such provision shall come into effect in relation to such
state (and the currency of such state) on and with effect from the date on
which such state becomes a participating member state.
(c) Redenomination and Alternative Currencies: Each obligation under this
Agreement of a party to this Agreement which has been denominated in a
national currency unit shall be redenominated into the euro unit in
accordance with EMU legislation provided that, if and to the extent that
any EMU legislation provides that an amount denominated either in the euro
or in the national currency unit of a participating member state and
payable within that participating member state by crediting an account of
the creditor can be paid by the debtor either in the euro unit or in that
national currency unit, each party to this Agreement shall be entitled to
pay or repay any such amount either in the euro unit or in such national
currency unit.
(d) Utilisations: Any utilisation in the currency of a participating member
state shall be made in the euro unit.
(e) Business Days: In relation to any amount denominated or to be denominated
in the euro or a national currency unit, any reference to a business day
shall be construed as a reference to a day (other than a Saturday or
Sunday) on which banks are generally open for business in:
(a) London; and
(b) Frankfurt (or such principal financial centre or centres in such
participating member state or states as the Facility Agent may from
time to time nominate for this purpose).
(f) Payments to the Facility Agent: Clause 13.1 (Payments to the Facility
Agent) shall be construed so that, in relation to the payment of any amount
of euro units or national currency units, such amounts shall be made
available to the Facility Agent in immediately available, freely
transferable, cleared funds so such account with such bank in Frankfurt (or
such other
58
principal financial centre in such participating member state as the
Facility Agent may from time to time nominate for this purpose).
(g) Payments by the Facility Agent to the Banks: Any amount payable by the
Facility Agent to a Bank under this Agreement in the currency of a
participating member state shall be paid in the euro unit.
(h) Payments by the Facility Agent: In relation to the payment of any amount
denominated in the euro or in a national currency unit, the Facility Agent
shall not be liable to any Obligor or any Bank in any way whatsoever for
any delay, or the consequences of any delay, in the crediting to any
account of any amount required by this Agreement to be paid by the Facility
Agent if the Facility Agent shall have taken all relevant steps to achieve,
on the date required by this Agreement, the payment of such amount in
immediately available, freely transferable, cleared funds (in the euro unit
or, as the case may be, in a national currency unit) to the account in the
principal financial centre in the participating member state which the
relevant Obligor or, as the case may be, any Bank shall have specified for
such purpose. In this Clause 11.13, "all relevant steps" means all such
steps as may be prescribed from time to time by the regulations or
operating procedures of such clearing or settlement system as the Agent may
from time to time determine for the purpose of clearing or settling
payments of the euro.
(i) Basis of Accrual: If, in relation to the currency of any state which
becomes a participating member state, the basis of accrual of interest or
commitment commission expressed in this Agreement in respect of that
currency shall be inconsistent with any convention or practice in the
London Interbank Market for the basis of accrual of interest or commitment
commission in respect of the euro, such expressed basis shall be replaced
by such convention or practice with effect on the date on which such state
becomes a participating member state provided that, if any Advance in the
currency of such state is outstanding immediately prior to such date, such
replacement shall take effect, with respect to such Advance, at the end of
the then current Term.
(j) Rounding and Other Consequential Changes: Without prejudice and in
addition to any method of conversion or rounding prescribed by any EMU
legislation and without prejudice to the respective liabilities for
indebtedness of the Obligors to the Banks and the Banks to the Obligors
under or pursuant to this Agreement:
(a) each reference in this Agreement to a minimum amount (or an integral
multiple thereof) in a national currency unit to be paid to or by the
Facility Agent shall be replaced by a reference to such reasonably
comparable and convenient amount (or an integral multiple thereof) in
the euro unit as the Facility Agent may from time to time specify; and
(b) save as expressly provided in this Clause 11.13(j), each provision of
this Agreement shall be subject to such reasonable changes of
construction as the Facility Agent may from time to time specify to be
necessary or appropriate to reflect the introduction of or changeover
to the euro in participating member states.
12. PARTIAL PAYMENTS
If the Facility Agent receives a payment which is insufficient to discharge all
the amounts due and payable by an Obligor under this Agreement on the day such
payment is received, the Facility Agent shall, subject to the Intercreditor
Agreements, apply that payment in or towards the discharge of such Obligor's
obligations under this Agreement in the following order:
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(a) firstly (and at its discretion), in or towards payment of any unpaid costs
and expenses of the Agents incurred by it in connection with this
Agreement;
(b) secondly, in or towards payment (pro rata) of any unpaid fees under Clause
26;
(c) thirdly, in or towards payment (pro rata) of any unpaid interest (including
default interest) and commission on the Tranche A Revolving Facility;
(d) fourthly, in or towards repayment (pro rata) of any due but unpaid
principal under the Tranche A Revolving Facility;
(e) fifthly, in or towards payment (pro rata) of any due but unpaid interest
(including default interest) and commission on any other Facility;
(f) sixthly, in or towards repayment (pro rata) of any due but unpaid principal
on any other Facility; and
(g) seventhly, in or towards payment of any other amounts due and payable by
such Obligor under this Agreement.
13. PAYMENTS
13.1 To Facility Agent
Subject to the provisions of Clause 13.2, on each date that a Party (other than
the Facility Agent) is obliged to make a payment under any of the Senior Finance
Documents, that Party shall make the same available to the Facility Agent:
(a) if the amount is denominated in Deutschmarks by payment in Deutschmarks and
in same day funds (or in such funds as may be customary in Frankfurt for
the settlement in Frankfurt of international banking transactions in
Deutschmarks) to the Facility Agent at Chase, Frankfurt Manhattan Bank AG
Account No. 9080002101 in the name of Derby Cycle Corporation or such other
account as the Facility Agent may have stipulated for such purpose;
(b) if the amount is denominated in Dollars, by payment in Dollars and in same
day funds (or in such funds as may be customary in New York City for the
settlement in New York City of international banking transactions in
Dollars) to the Facility Agent at The Chase Manhattan Bank, New York, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇, Account No. 544-714108 in the name of
Derby Cycle Corporation or such other account as the Facility Agent may
have specified for this purpose;
(c) if the amount is denominated in Sterling, by payment in Sterling in
immediately available, freely transferable, cleared funds, by CHAPS Sort
Code 40-52-06 to the Facility Agent at The Chase Manhattan Bank, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ or such other account as the Facility Agent may have
specified for this purpose;
(d) if the amount is denominated in Dutch Guilders by payment in Dutch Guilders
and in same day funds (or in such funds as may be customary in Amsterdam
for the settlement in Amsterdam of international banking transactions in
Dutch Guilders) to the Facility Agent at ING Barings, Amsterdam Account No.
0051612607 in the name of Derby Cycle Corporation or such other account as
the Facility Agent may have stipulated for such purpose; and
(e) if the amount is denominated in an Optional Currency (other than Sterling,
Dutch Guilders or Dollars), by payment in such Optional Currency and in
immediately available, freely
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transferable, cleared funds to such account with such bank in the principal
financial centre of the country of such Optional Currency as the Facility
Agent shall have specified for this purpose.
13.2 Distribution by the Agents
(a) All payments to be made by any Obligor under any Senior Finance Document
shall be paid to or to the order of the Security Agent, provided that the
Security Agent hereby consents to all such payments being made to the
Facility Agent in accordance with the terms of this Agreement until the
Security Documents shall become enforceable and the Security Agent
withdraws such consent by notice to the Facility Agent and the Obligors.
(b) Each payment received by any Agent for the account of another Person
pursuant to Clause 13.1 shall:
(i) in the case of a payment received for the account of any Borrower,
be made available by that Agent to that Borrower by application, on
the date and in the funds of receipt:
(A) first, in or towards payment of any amounts then due and
payable (and unpaid) by that Borrower under any of the Senior
Finance Documents; and
(B) second, in payment to such account as that Borrower shall have
properly designated for the purpose in the relevant Drawdown
Request or otherwise in writing; and
(ii) in the case of any other payment, be made available by the Facility
Agent to the Person for whose account the payment was received (in
the case of a Bank, for the account of its Facility Office) on the
date and in the currency and funds of receipt to such account of the
Person with the office or bank in the country of the currency
concerned as that Person shall have previously notified to the
Facility Agent for the purposes of this Agreement.
(c) The Facility Agent or the Security Agent (as the case may be) shall
promptly distribute payments received for the account of the Banks among
the Banks in accordance with the order of priority contained in Clause 12
pro rata to their respective entitlementsand in the funds and currency of
receipt.
13.3 Currency
(a) Interest and commission accrued under this Agreement shall be payable in
the currency in which the relevant amount in respect of which it has
accrued was denominated during the period of accrual.
(b) The principal of each Advance shall be repaid or prepaid in the currency in
which it is denominated.
(c) Amounts payable to the credit of a Standby L/C Account (as defined in
Clause 31.4) relating to a Standby L/C shall be payable in the currency in
which the relevant Standby L/C is denominated.
(d) Any amount (other than of principal and/or interest) calculated on or by
reference to or payable in respect of another amount shall be payable in
the currency in which that other amount is denominated at the time of
payment.
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(e) Any other amount payable under this Agreement, unless otherwise provided,
shall be payable in Deutschmarks.
(f) If the Facility Agent receives a payment for the account of another Party
in connection with this Agreement, the Facility Agent shall make that
payment available to such Party for value the same day by transfer to such
account of such Party with such bank in the principal financial centre of
the country of the currency of such payment as that Party shall have
previously notified to the Facility Agent in writing for this purpose.
(g) If a sum is paid under this Agreement to the Facility Agent for the account
of another Party, the Facility Agent shall not be obliged to pay that
amount to that Party until the Facility Agent has established, to its
satisfaction, that it has actually received and retained that sum.
(h) The Facility Agent may, but shall not be obliged to assume that it has
received and retained all amounts payable to it under this Agreement on the
due date and, in reliance on that assumption, make available to the
relevant Party a corresponding amount. If, however, such a sum has not been
received and retained by the Facility Agent, the relevant Party shall, on
demand by the Facility Agent, promptly refund the corresponding amount to
the Facility Agent together with interest on that amount from (and
including) the date of payment by the Facility Agent to (but excluding) the
date such amount is repaid to the Facility Agent in full, at a rate
calculated by the Facility Agent so as to reflect its cost of funding such
payment.
13.4 Set-off and counterclaim
(a) All payments required to be made by the Obligors under any of the Senior
Finance Documents shall be made without reference to any set-off or
counterclaim and shall be made free and clear of and without any deduction
for or on account of any set-off or counterclaim.
(b) For so long as an Event of Default has occurred which is still continuing,
each Obligor authorises each Bank to apply any credit balance to which such
Obligor under any of the Finance Documents is entitled on any account of
such Obligor with that Bank in satisfaction of any sum due and payable from
such Obligor to that Bank under any of the Finance Documents but unpaid.
Each Bank is, accordingly, authorised to purchase with any credit balance
of any such account such other currencies as may be necessary to effect
such application. No Bank shall be obliged to exercise any right given to
it by this Clause 13.4(b).
PART 5
14. TAXES
14.1 Payment of Taxes
All payments to be made by any Obligor under or in respect of any of the Senior
Finance Documents shall be made free and clear of and without any deduction or
withholding of Tax unless (but without prejudice to this Clause 14) any such
Obligor is required by law to make such payment subject to the deduction or
withholding of Tax.
14.2 Gross-up
Subject to prompt compliance by the Finance Parties with the provisions of this
Clause 14.2 and Clauses 14.7, 14.8 and 14.9, if any Taxes or amounts in respect
thereof must be deducted from any payment by an Obligor under any Senior Finance
Document (other than in respect of any Tax imposed or a payment which would not
have been imposed on that payment, if the relevant Finance Party to which or for
whose account that payment was made, had been at the date of the payment a
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Qualifying Bank) or must be made from any amounts paid by any Obligor (or from
any corresponding payment by any Finance Party to any other Finance Party under
this Agreement), or any such payment shall otherwise be required to be made
subject to any Tax, such Obligor shall pay such additional amounts as may be
necessary to ensure that the relevant Finance Party receives a net amount equal
to the full amount which it would have received had payment not been made
subject to the relevant Tax. Each Finance Party shall notify each Obligor
through the Facility Agent of the application of this Clause 14 to any payment
then due or to become due to it under any Senior Finance Document promptly upon
its becoming aware of the same.
14.3 Tax indemnity
Without prejudice to the provisions of Clauses 14.1 and 14.2 if any Finance
Party, or any other Person through which a payment relating to this Agreement or
the Security Documents is made, is required to make any payment on account of
Tax (other than Tax on its overall net income) on or in relation to any sum
received or receivable under this Agreement or, as the case may be, the relevant
Security Document by that Finance Party, or any other Person through which such
a payment is made, the Borrower shall, upon demand by the Facility Agent,
indemnify the relevant Finance Party against such payment, together with any
interest, penalties and expenses payable or incurred in connection therewith.
14.4 Notification of claims
Without prejudice to Clauses 14.2 or 14.3 if the relevant Borrower so requests,
the relevant Finance Party shall notify such Borrower of the reason for making a
claim under Clauses 14.2 or 14.3. This Clause 14.4 shall not oblige any Finance
Party to disclose any information relating to the organisation of its business
or tax affairs or how the amount requested was calculated if it considers, in
its sole opinion, that such information is confidential.
14.5 Tax receipts
If, as a result of a payment being made by or on behalf of the Borrower under
this Agreement or the Security Documents, the Borrower is required to pay any
Tax, the Borrower shall pay such Tax in full to the relevant authority within
the time allowed for such payment under applicable law. The Borrower shall, as
soon as reasonably practicable after payment falls due to the relevant
authority, deliver to the Facility Agent any original (or a Certified Copy) of a
receipt issued by the relevant authority evidencing that payment in full has
been received by the relevant authority.
14.6 Tax Saving
(a) In the event that, following the imposition of any Tax on any payment by
any Obligor (or any corresponding payment by any Finance Party to any other
Finance Party under this Agreement) in consequence of which such Obligor is
required under Clauses 14.2 or 14.3, to pay such Tax or to pay any
additional amount in respect of it, any Finance Party shall in its sole
opinion and based on its own interpretation of any relevant laws or
regulations (but acting in good faith) receive or be granted a credit
against or remission for or deduction from or in respect of any Tax payable
by it, or shall obtain any other relief in respect of Tax on its profits or
income, which in such Finance Party's opinion in good faith is both
identifiable and quantifiable by it without requiring such Finance Party or
its professional advisers to expend a material amount of time or incur a
material cost in so identifying or quantifying or at the written request of
the Obligor and if the Finance Party is of the opinion that it will recover
the cost incurred, after incurring such cost (any of the foregoing, to the
extent so identifiable and quantifiable, being referred to as a "saving"),
such Finance Party shall, to the extent that it can do so without prejudice
to the retention of the relevant saving and subject to deduction for
reasonable costs and subject further to such Obligor's obligation to repay
the amount to
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such Finance Party if the relevant saving is subsequently disallowed or
cancelled (which repayment shall be made promptly on receipt of notice by
such Finance Party of such disallowance or cancellation), reimburse such
Obligor promptly after receipt of such saving by such Finance Party with
such amount as such Finance Party shall in its sole opinion but in good
faith have concluded to be the amount or value of the relevant saving.
(b) Nothing contained in this Agreement shall interfere with the right of any
Finance Party to arrange its Tax and other affairs in whatever manner it
thinks fit and, in particular, no Finance Party shall be under any
obligation to claim relief from Tax on its corporate profits, or from any
similar Tax liability, in respect of the Tax, or to claim relief in
priority to any other claims, reliefs, credits or deductions available to
it or to disclose details of its Tax affairs. No Finance Party shall be
required to disclose any confidential information relating to the
organisation of its affairs.
(c) Each Finance Party will notify the relevant Obligor promptly of the receipt
by such Finance Party of any saving and of such Finance Party's opinion as
to the amount or value of that saving.
14.7 U.S Taxation-delivery of forms and statements
(a) Each Finance Party which is not a U.S. Person shall (as soon as it is
reasonably practicable for it to do so after the date hereof or upon
becoming a party to this Agreement (as the case may be)) deliver (through
the Facility Agent) to each U.S. Obligor which is a Borrower duly completed
and signed, two copies of such form or forms as may be required to indicate
that such Finance Party is entitled to receive payments under this
Agreement without deduction, withholding or payment by the U.S. Obligor of
any United States federal Taxes, including without limitation, either:-
(i) two copies of Form 1001 of the Internal Revenue Service of the United
States of America (relating to an applicable double revenue tax treaty
concluded by the United States of America); or
(ii) two copies of Form 4224 of the Internal Revenue Service of the United
States of America (relating to income effectively connected with the
conduct of a trade of business in the United States of America).
Each such Finance Party, subject as otherwise provided in Clause 14.7(b),
shall deliver (through the Facility Agent) to each U.S. Obligor additional
duly completed copies of any of the above forms and/or such additional or
successor forms as shall be adopted from time to time by the Internal
Revenue Service of the U.S.A. if it is notified by the U.S. Obligor or the
Internal Revenue Service of the U.S.A. that any previous such form
delivered by it pursuant to this Clause 14.7 has expired or that Finance
Party becomes aware that any such form shall have become incomplete or
inaccurate in any respect unless prior to that delivery any event occurs
which renders the relevant form inapplicable.
(b) Each Finance Party which is a U.S. Person shall deliver (through the
Facility Agent) to each U.S. Obligor a statement signed by an authorised
signatory of the Finance Party to the effect that it is a U.S. Person and
if necessary to avoid United States backup withholding, two duly completed
and signed copies of Internal Revenue Service Form W-9 (or successor form)
establishing that such Finance Party is organised under the laws of the
United States and is not subject to United States backup withholding.
(c) Each Finance Party that is not a U.S. Person that is entitled to an
exemption from or reduction of withholding tax under the IRC with respect
to payments under this Agreement
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shall deliver to the Company (with a copy to the Facility Agent), at the
time or times prescribed by applicable laws, properly completed and
executed documentation prescribed by applicable law or reasonably requested
by the Company as will permit such payments to be made without withholding
or at a reduced rate.
(d) The Facility Agent shall have no responsibility or liability for and no
obligation to check the accuracy or appropriateness of any form or
statement delivered by any Finance Party pursuant to Clauses 14.7(a) or
14.7(b) respectively.
(e) If any Finance Party determines, as a result of any change in applicable
law, regulation or treaty, or in any official application or interpretation
thereof, that it is unable to submit to any U.S. Obligor any form or
certificate that the Finance party is obliged to submit pursuant to Clauses
14.7(a) or 14.7(b), or that such Finance Party is required to withdraw or
cancel any form or certificate previously submitted, the Finance Party
shall promptly notify the U.S. Obligor of that fact.
14.8 Double tax-treaties
Each Bank and the Facility Agent or the relevant Obligor (as the case may be)
shall as soon as reasonably practicable after the date hereof or upon becoming a
party to this Agreement or (as the case may be) after the date a Borrower not
incorporated in the United Kingdom accedes to this Agreement submit the form or
forms to the appropriate revenue authorities as may reasonably be necessary in
order to comply with the requirements of any applicable law or relevant double
taxation (if any) in relation to the payment of any interest and commitment
commission hereunder to such Bank or the Facility Agent free (or subject to any
applicable reduced rate) of deduction or withholding of or on account of any Tax
which would otherwise be applicable and, if such Bank or the Facility Agent
fails to comply with this Clause 14.8 the relevant Obligor shall not have any
obligation to pay any increased amount required by Clauses 14.2 or 14.3 if and
to the extent that it would not have been required to make any deduction or
withholding (or would only have been required to make any such deduction or
withholding at any applicable reduced rate) of or on account of any Tax had such
Bank or the Facility Agent complied with this Clause 14.8.
14.9 Qualifying Bank
Each Bank that becomes a party to this Agreement on a date occurring 30 days or
more after 12 May 1998 confirms to each of the Obligors that as at the date it
becomes a party to this Agreement it is a Qualifying Bank and agrees to notify
the Obligors' Agent (through the Facility Agent) promptly if it becomes aware
that it is not a Qualifying Bank.
15. INCREASED COSTS
15.1 Indemnity for increased costs
If any Bank determines that, as a result of:
(a) the introduction or variation of any law or any change in the
administration or interpretation of any law; and/or
(b) compliance with any request from or requirement of any central bank or
other fiscal, monetary or other authority (including any request or
requirement which affects the manner in which a Bank or any Holding Company
of such Bank is required to, or does, maintain capital resources having
regard to such Bank's obligations under this Agreement and to amounts which
are owing to it under this Agreement); and/or
65
(c) the introduction, or changeover or operation of the euro in any
participating member state;
(i) such Bank, or any Holding Company of such Bank, incurs a cost
(being a cost which it would not otherwise have incurred) as a
result of it having entered into and/or it performing its
obligations under this Agreement and/or it assuming or maintaining
its Tranche A Revolving Commitment, Tranche B Revolving Commitment
or its Standby L/C Commitment under any this Agreement and/or it
making one or more Advances under this Agreement and/or assuming or
maintaining a contingent liability under any Standby L/C; or
(ii) such Bank, or any Holding Company of such Bank, is unable to obtain
the rate of return on its overall capital which it would have been
able to obtain but for it having entered into and/or assuming or
maintaining its Tranche A Revolving Commitment, Tranche B Revolving
Commitment or its Standby L/C Commitment under this Agreement; or
(iii) there is any increase in the cost to such Bank, or any Holding
Company of such Bank, of funding or maintaining all or any of the
assets or liabilities comprised in a class of assets or liabilities
formed by, or including, those referable to this Agreement; or
(iv) such Bank, or any Holding Company of such Bank, becomes liable to
make any payment on account of Tax (other than Tax on its overall
net income) or otherwise on or calculated by reference to the
amount of Advances made or to be made by it under this Agreement
and/or any sum received or receivable by it under this Agreement,
then the relevant Obligor shall, from time to time on demand by the
Facility Agent, pay to the Facility Agent for the account of that Bank,
amounts sufficient to indemnify that Bank against, as the case may be, (i)
such costs, (ii) such reduction, (iii) such increased costs (or such
proportion of such increased costs as is, in the opinion of that Bank,
attributable to its funding, maintaining or assuming assets or liabilities
referable to this Agreement) or (iv) such liability.
15.2 Exceptions
No Bank shall be entitled to make any claim under Clause 15.1 which:
(a) is compensated for by the operation of Clause 14;
(b) is attributable to any change in the rate of Tax on the overall net income
of such Bank (or the overall net income of the Bank or its Holding
Company);
(c) arises as a result of a breach by such Bank of any regulation, guideline or
requirement of any central bank or other fiscal, monetary or other
authority (whether or not having the force of law);
(d) arises as a result of the implementation by any authority after the date of
this Agreement of any of the matters set out in the paper prepared by the
Basle Committee on Banking Regulation and Supervisory Practice dated July
1988 (as amended in November 1991) entitled "International Convergence of
Capital Measurement and Capital Standings".
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15.3 Notification by Bank
Any Bank proposing to make a claim pursuant to Clause 15.1 shall promptly upon
becoming aware of its entitlement to make such a claim notify the Obligors'
Agent (through the Facility Agent), setting out, in reasonable detail, the
calculation and cause of the amounts claimed. No Bank shall be required to
disclose any information relating to the organisation of its affairs which it
considers to be confidential.
15.4 Regulation D Compensation
Any Bank which is required by Regulation D issued by the Board of Governors of
the Federal Reserve System of the USA to maintain and does maintain any reserves
against "Eurocurrency liabilities" (as defined in such Regulation) pursuant to
such Regulation may require any U.S. Obligor to pay, contemporaneously with each
payment of interest on any Advance (in respect of which the Eurodollar Reserve
Percentage applies) made to such U.S. Obligor for any Term relative thereto,
additional interest on the participation of such Bank in that Advance at the
rate per annum determined from the formula (i) LIBOR applicable to such Advance
for that Term divided by (ii) one minus the Euro-Dollar Reserve Percentage minus
LIBOR applicable to such Advance for that Term. Any Bank requiring payment by
any U.S. Obligor of such additional interest shall notify such U.S. Obligor and
the Facility Agent at least five Business Days prior to the last day of each
Term each relevant Advance of the amount due to be paid to it with respect to
such Advance pursuant to this Clause 15.4 (certifying in that notice that the
amount claimed does not exceed such part of the cost to such Bank of maintaining
such reserves as in the opinion of that Bank should fairly and reasonably be
apportioned to such Advance), which notice shall be final and binding in the
absence of manifest error. No Bank shall be required to disclose in support of
any claim hereunder any information reasonably regarded by such Bank as being
confidential.
16. ILLEGALITY
16.1 Illegality in relation to Advances
If, as a result of the introduction, imposition or variation of any law,
regulation or regulatory requirement of any authority (including any fiscal or
monetary authority), it is unlawful for any Bank to make, maintain or fund any
Advance, or be a party to this Agreement then, unless such illegality is avoided
in accordance with Clause 17:
(a) after delivery of a notice to the Facility Agent detailing the unlawful
circumstances, the relevant Bank shall not be obliged to make any Advances
or make available any Facilities under any Ancillary Facility to which it
is a party and its Tranche A Revolving Commitment shall be cancelled and
reduced to zero and/or or its Tranche B Revolving Commitment Revolving
Commitment (including any part thereof that is, at such time, being
utilised under an Ancillary Facility) shall be cancelled and reduced to
zero, whereupon its Ancillary Commitment (if any) shall be cancelled and
reduced to zero;
(b) on the date specified in the notice delivered under Clause 16 (a) (which
shall not be earlier than the last date on which the relevant Bank
determines (acting reasonably) it may legally maintain its participation in
the Advances and/or its Tranche A Revolving Commitment or, as the case may
be Tranche B Revolving Commitment), the Borrower shall repay such Bank's
participation in each outstanding Advance, together with accrued interest
thereon and any other amounts owing to that Bank under the Senior Finance
Documents or, if the relevant Bank is party to an Ancillary Facility, cash
collateralise any contingent obligations owed to such Ancillary Bank under
such Ancillary Facility.
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16.2 Illegality in relation to Standby L/Cs
If, as a result of the introduction, imposition or variation of any law,
regulation or regulatory requirement of any authority (including any fiscal or
monetary authority), it is unlawful for any Bank to participate in or perform
its obligations in respect of all or any of the Standby L/Cs issued or to be
issued hereunder, then unless such illegality is avoided in accordance with
Clause 17:
(a) after delivering of a notice to the Facility Agent detailing the unlawful
circumstances, the relevant Bank shall cease to be obliged to participate
in such Standby L/Cs hereunder; and
(b) if the Facility Agent on behalf of such Bank so requires, the Borrower that
requested each Standby L/C in which that Bank has participated shall, on
such date (which shall not be earlier than the last date on which the
relevant bank determines (acting reasonably) it may lawfully perform its
obligations under each Standby L/C in which such Bank has participated
hereunder) pay to the Facility Agent for credit of that Bank for credit to
the appropriate Standby L/C Account on such Bank's books relating to that
Standby L/C, an amount equal to the amount of its participation in that
Standby L/C.
17. MITIGATION
17.1 Mitigation
(a) If, in respect of any Finance Party, circumstances arise which would, or on
the giving of notice would, result in:
(i) the application of Clause 10; or
(ii) an increase in the amount of any payment to be made to it under
Clause 14.1; or
(iii) any claim for indemnification being made or any obligation to
increase the amount of any payment under any of Clauses 14.2, 14.3
and Clause 15.1; or
(iv) any prepayment or cancellation under Clause 16,
then, without limiting the obligations of any Obligor under this Agreement,
and without prejudice to the terms and conditions of those Clauses, that
Finance Party will (provided that it considers that it is reasonably
practicable for it to do so), promptly upon becoming aware of the same,
notify the Facility Agent and, in consultation with the Facility Agent and
the Obligors' Agent, take steps to mitigate the effects of such
circumstances, including, if appropriate, changing its Facility Office
and/or transferring its rights and obligations under the Senior Finance
Documents to another branch or financial institution acceptable to the
Obligors' Agent.
(b) No Finance Party shall be obliged to take any steps under this Clause 17 if
it considers, in its opinion, that to do so might have an adverse effect on
its business, operation, financial condition, or its return under this
Agreement or it considers such steps to be unreasonable. This Clause 17.1
shall not oblige any Finance Party to disclose any information relating to
the organisation of its business, operations, financial condition or any
other matters if it considers, in its sole opinion, that such information
is confidential.
(c) In the circumstances where the relevant Borrower would otherwise be
entitled or required to prepay any Bank's participation in the Utilisations
or make a payment into a Bank's Standby L/C Accounts (or any of them) or
procure such Bank's release from its obligations under each Standby L/C
(other than as a result of the application of Clause 16 or Clause 21), such
Bank
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will, if requested by the Company, transfer by means of a Novation
Certificate pursuant to Clause 29.2, such participation (and the related
Tranche A Revolving Commitment or, as the case may be Tranche B Revolving
Commitment and Standby L/C Commitment) to any bank or financial institution
which is a Qualifying Bank and is specified by the Company and has
confirmed to such Bank its willingness to acquire such participation, such
Tranche A Revolving Commitment or, as the case may be Tranche B Revolving
Commitment and such Standby L/C Commitment by means of a Novation
Certificate, subject to receipt by such Bank from the proposed transferee
of an amount equal to such Bank's entitlement to all principal, accrued
interest and other sums payable by the Obligors or any of them under the
Senior Finance Documents (whether or not then due) and any amounts then
standing to the credit of its Standby L/C Accounts and provided further
that any consents required from any Beneficiary in respect thereof has been
obtained.
17.2 Costs and Expenses of Mitigation
Any costs and expenses reasonably incurred by any Finance Party pursuant to
this Clause 17 shall be paid by the Obligors' Agent within five Business
Days after receipt of a demand specifying the same in reasonable detail.
PART 6
18. REPRESENTATIONS AND WARRANTIES
18.1 General representations and warranties
The Company acknowledges that the each of the Finance Parties have entered into
the Finance Documents in full reliance on the following statements and
represents and warrants to each of the Finance Parties that:
(a) Due incorporation and status: each Obligor is a private limited company,
duly incorporated and validly existing under the place of its
incorporation, possesses the capacity to ▇▇▇ and be sued in its own name,
and has the power to carry on its business substantially as now being (or
will immediately after the Closing be) conducted and to own its property
and other assets;
(b) Corporate power: each Obligor has the power to execute, deliver and perform
its obligations under each of the Transaction Documents to which it is a
party, and any other document or instrument executed, delivered or to be
executed or delivered by it under any of the Transaction Documents; all
necessary corporate, shareholder and other action has been taken or will be
taken to authorise the execution, delivery and performance of the same and
no limitation on its powers to borrow, to guarantee and to grant security
will be exceeded as a result of the performance of the transactions
contemplated by such documents;
(c) Binding obligations: the Transaction Documents, and any other document or
instrument executed or delivered or to be executed or delivered by any
Group Member thereunder, constitute or, as the case may be, will constitute
valid and legally binding obligations of each of the Obligors which are
expressed to be a party thereto and, as far as the Company is aware, in the
case of the Recapitalisation Documents and the Note Documents of the other
parties thereto and, without limiting the generality of the foregoing (and
subject to registration under Section 395 Companies Act 1985 (as amended),
the filing of Uniform Commercial Code financing statements and filings with
the United States Patent and Trademark Office and the United States
Copyright Office, in each case as contemplated by the Security Documents,
the Filing of Forms 47 in the Companies Registry Office in Dublin in
respect of the Irish Debentures, the registration of the Debentures entered
into by those Obligors incorporated in the United Kingdom at the Land
Registry or the Land Charges
69
Registry (as appropriate), (to the extent necessary) registration in the
Land Registry in Ireland in respect of property charges to be created by
the Irish Debentures, the filing of particulars of the relevant trade marks
(if any) assigned or charged under such mortgage debenture, the
registration of the transfers of the shares which are the subject of the
relevant mortgages and other Encumbrances created by the Security Documents
and other filings and registrations necessary in connection with the
Security Documents (including any filings required to be made in connection
with Sections 155 to 158 of the Companies Act 1985), and compliance with
and registration under any analogous requirements in any other
jurisdiction) each of the Security Documents creates the security interest
which that Security Document purports to create or, as the case may be,
accurately evidences a security interest which has been validly created
(except that no warranty is given as to whether any such Encumbrance is of
a fixed or floating nature);
(d) No conflict with other obligations: the execution and delivery of each of
the Transaction Documents, and any other document or instrument executed or
delivered or to be executed or delivered thereunder by any Obligor party
thereto, and the performance of each of their respective obligations
thereunder, and compliance with their respective provisions, has not and
will not (i) contravene any existing applicable law, statute, rule or
regulation or any judgment, decree or permit to which any of them are
subject, conflict with, or result in any breach of any of the terms of, or
constitute a default under, any agreement or other instrument to which any
Group Member is expressed to be a party or is subject to or by which it, or
any of its property is bound in a manner which is reasonably likely to
result in any liability on the part of the Finance Parties (or any of them)
to any third party by reason of any such conflict, (ii) nor, so far as the
Company is aware, has it or will it result in the creation, or requirement
to create, any Encumbrance on the assets of any Obligor (save for any
Encumbrance created pursuant to the Security Documents), or (iii)
contravene or conflict with any provision of the Memorandum and Articles of
Association (or similar or analogous documents) of any Obligor;
(e) Consents: all material, authorisations, approvals, consents, licences,
exemptions, filings, registrations and other matters required by law for or
in consequence of (i) the Recapitalisation, and/or (ii) the entry into and
performance by each Obligor of and/or the validity of any of the
Transaction Documents to which it/they are expressed to be a party or the
transactions implemented or to be implemented pursuant thereto and/or (iii)
the carrying on of the business of each Obligor and each Material Group
Member in the ordinary course have been obtained or effected or will be
obtained or effected prior to the date required by law, save (in the case
of (ii)) for the filing in the United Kingdom of the prescribed particulars
of the Security Documents pursuant to Section 395 of the Companies ▇▇▇ ▇▇▇▇
(as amended), the Filing of Forms 47 in the Companies Registry Office in
Dublin in respect of the Irish Debentures, the registration of the
Debentures entered into by those Obligors incorporated in the United
Kingdom at the Land Registry or the Land Charges Registry (as appropriate),
(to the extent necessary) registration in the Land Registry in Ireland in
respect of property charges to be created by the Irish Debentures, the
filing of particulars of the relevant trade marks (if any) assigned or
charged under the Debentures, the registration of the transfers of the
shares which are the subject of the relevant mortgages and other
Encumbrances created by the Security Documents and other filings and
registrations necessary in connection with the Security Documents, all of
which filings and registrations have or will be effected promptly after
execution;
(f) No winding-up: no order has been made or petition presented (which has not
been discharged or stayed within 14 days of it being so presented) or any
corporate action taken, or any other steps been taken or legal proceedings
started or resolution passed for the winding-up of any Group Member or for
an administration order in respect of any Group Member and no distress,
execution or other process has been levied on any assets of any
70
Group Member which has not been discharged or which in the bona fide
opinion of the Facility Agent is not being contested by the relevant Group
Member in good faith;
(g) Insolvency: no order has been made or petition presented or resolution
passed for an administration order in respect of any Group Member and no
distress, execution or other process has been levied on any assets of any
Group Member which has not been discharged, no Group Member has stopped
payment and is insolvent or unable to pay its debts within the meaning of
Section 123(1) Insolvency Act 1986 (construed as if the figure stated at
section 123(1)(a) was $100,000), it has not been determined that any Group
Member is unable to pay its debts in accordance with Section 123(2)
Insolvency Act, no administrative receiver or receiver or receiver and
manager, trustee or similar officer has been appointed by any Person of any
part of the business or assets of any Group Member;
(h) No default: (i) no Event of Default has occurred and is continuing which
has not been waived; (ii) (so far as the Company is aware) save as
previously notified to the Facility Agent in accordance with Clause
19.1(e)(vii) no Potential Event of Default has occurred and is continuing
which has not been waived; and (iii) no Group Member is in breach of or
default under any agreement to which it is a party or which is binding on
it or any of its assets which could have a Material Adverse Effect;
(i) No litigation: no action, litigation, arbitration, alternative dispute
resolution, or administrative or regulatory proceeding is taking place or
pending against any Group Member, and, so far as the Company is aware, no
such action, litigation or administrative proceeding is threatened nor are
there any current labour disputes involving any Group Member which:
(i) in the case of any such action, litigation, alternative dispute
resolution, arbitration, administrative or regulatory proceedings are
reasonably likely to be determined adversely to the relevant Group
Member, and which, if so adversely determined would have a Material
Adverse Effect; or
(ii) in the case of any such labour disputes, would have a Material
Adverse Effect;
(j) Group Structure:
(i) the Structure Memorandum contains descriptions which are true,
complete and correct, of the corporate and ownership structure of
the Group;
(ii) there are no companies, partnerships, Joint Ventures, businesses or
the like having material assets or indebtedness or trading
activities (a) which are a Subsidiary of the Company or (b) in which
it or any of its Subsidiaries will have an interest which is not
shown in the Structure Memorandum; there are no re-organisational
steps affecting the Company or any of its Subsidiaries (including,
without limitation, any significant transfers of business or assets
from one Person to another and significant disposals) which are not
described in the Structure Memorandum;
(k) Accountant's Report:
(i) save as is or has been fully and fairly disclosed in the
Accountant's Report, the financial information in relation to the
Group contained in the Accountant's Report was prepared using
generally accepted accounting principles in the United Kingdom, and
or gave a true and fair view of the state of affairs of the Group as
at the date to which they were prepared and as at such date there
were no material liabilities of the
71
Group which were not disclosed by or shown as being provided for in
the Accountant's Report;
(ii) there has been no material adverse change in the business,
operations, assets, prospects, or financial condition of the Group
(taken as a whole) since the date the Model was prepared; and
(iii) the Accountant's Report includes and included or consolidates or
consolidated into such financial information the results of each
Group Member and does or did not consolidate or include the results
of any other company, limited partnership or like entity or business
other than Derby International;
(l) Initial Information:
(i) all information contained in the Information Package was true in all
material respects (or, in the case of information provided by any
Person other than the Company or its advisors as far as the board of
directors of the Company is aware, was true to the best of its
knowledge and belief in all material respects at the date (if any)
ascribed thereto in the Information Package) and, in respect of the
Group's Pre-Closing Accounts was prepared in accordance with
Applicable Accounting Principles, all expression's of opinion or
intention and all forecasts and projections contained in the
Information Package were arrived at after careful consideration,
were fair and were based on reasonable grounds, and the Information
Package as of its date was not misleading in any material respect
and did not omit to disclose any matter, failure to disclose which
would result in any information contained in the Information Package
being misleading in any material respect in the context of this
Agreement and the transactions contemplated hereby; and
(ii)
(m) All information is correct: all financial and other information provided in
writing by, or on behalf of, any Group Member to any Finance Party in
connection with this Agreement or the Finance Documents after the date of
this Agreement was true and accurate in all material respects when given
and (so far as it is aware having made due and proper enquiries) there are
no other facts or matters which were available at the time such financial
and other information was given, the omission of which would have made any
such statement or information provided misleading or a materially
inaccurate representation of the situation described therein and all
opinions, projections and forecasts given or made have been honestly made
and based upon reasonable assumptions;
(n) Financial Accounts: the Business Plan and the Financial Accounts most
recently delivered to the Facility Agent under this Agreement have been
prepared in accordance with Applicable Accounting Principles and (in the
case of audited annual Financial Accounts) give a true and fair view or (in
the case of unaudited Financial Accounts) fairly present of the state of
affairs of such Group Member (consolidated if prepared on that basis
pursuant to Applicable Accounting Principles or if required to be prepared
on that basis pursuant to the terms of this Agreement) as at the date to
which they are made up and as at such date there were no material
liabilities of any Group Member not disclosed in the Financial Accounts
which according to Applicable Accounting Principles should have been
disclosed and since the Financial Accounts most recently delivered to the
Facility Agent under this Agreement there has been no material adverse
change in the financial condition or prospects of the Group (as a whole);
72
(o) Tax liabilities: no claims in excess of $50,000 (or the equivalent in other
currencies) in aggregate are being or are reasonably likely to be asserted
against the Group (as a whole), any Group Member or Group Members with
respect to Taxes which are reasonably likely to be determined adversely to
such Group Member and no Group Member is overdue in the filing of any Tax
returns required to be filed by it and has paid all Taxes shown to be due
on Tax returns or any assessments made against it other than those
contested in good faith by appropriate proceedings and for which adequate
reserves have been established in accordance with Applicable Accounting
Principles;
(p) Ownership of assets:
(i) (save to the extent that such may be disposed of without breaching
the terms of any of the Finance Documents) each Material Group
Member has good title to or valid leases or licences of or is
otherwise entitled to use and permit other Group Members to use all
assets necessary to conduct its business substantially as conducted
by it as at 12 May 1998 or reflected in the Accountant's Report and
without limiting the generality of the foregoing, save as aforesaid
each Obligor has, with a good and valid title in its own name of its
interest in all properties specifically referred to by address or
title number in the Security Documents; and
(ii) each Obligor is the absolute legal and beneficial owner of all
rights, title and interest in and to the assets, free from any right
of set-off, counterclaim, dispute or Encumbrance (other than a
Permitted Encumbrance) comprising the Eligible Finished Goods, the
Eligible Receivables, the Eligible Raw Materials and the Cash
Collateral Amount that are taken into account when computing such
Borrower's Borrowing Base;
(q) Intellectual Property Rights:
(i) so far as it is aware (after due and careful enquiry) it (and each
Group Member) owns or has licensed to it all the Intellectual
Property Rights which are material in the context of its business
and which are required by it in order for it to carry on its
business in accordance with the Business Plan and it does not (nor
do any of its Subsidiaries), in carrying on its business, infringe
any Intellectual Property Rights of any third party in any way ;
(ii) none of the Material Intellectual Property Rights is, to its
knowledge, being infringed nor, to its knowledge, is there any
threatened infringement of the Intellectual Property Rights, by any
third party; and
(iii) all registered material Intellectual Property Rights owned by it (or
any Subsidiary of it) are subsisting and all actions (including
payment of all fees) required to maintain the same in full force and
effect have been taken;
(r) Representations and Recapitalisation Documents: it has no reason to believe
that any representation or warranty by any Person party thereto in any of
the Recapitaliation Documents was untrue or inaccurate in any material
respect;
(s) Pari passu: the obligations of the Obligors under this Agreement and of
the Group Members under the Senior Finance Documents to which they are
expressed to be a party (to the extent that any such obligations do not
acquire enhanced priority by virtue of the security created and/or
conferred by the Security Documents) rank at least pari passu with all
other present and future unsecured and unsubordinated obligations of such
Group Member with the
73
exception of any obligations which are mandatorily preferred by law or
arise by equity and not only by contract;
(t) Constitutional documents: the documents delivered to the Facility Agent at
Closing (or, in the case of the Company, on or before the Amendment Date)
or pursuant to an Accession Agreement are, if such documents relate to a
Borrower, as at the date the first Advance (if any) is made to such
Borrower and, in the case of a Guarantor, as at the date such documents are
delivered, true, up to date and complete copies in all material respects,
of originals which had not been amended, varied, supplemented or superseded
in any way which would be likely to affect the interest of the Finance
Parties under any of the Senior Finance Documents;
(u) Transaction Documents:
(i) the Recapitalisation Documents, as furnished to the Facility Agent
under this Agreement, contain all the terms of the Recapitalisation;
(ii) other than as provided in (iii), (iv) and (x) below the
Recapitalisation Documents contain all the terms of the agreements
and arrangements between the Investors and the Company (or any Group
Member);
(iii) other than as provided in (iv) below the Service Contracts and the
Articles of Association of the Company contain all the material
terms of all the agreements and arrangements between the Executives
and the Investors and Derby International and between the Executives
and the Company (or any other Group Member);
(iv) other than as provided in (ii), (iii) and (x) hereof the Management
Agreement (if any) contain all the terms and arrangements between
▇▇▇▇▇▇ and the Company;
(v) the Service Contracts of each of the Executives are in full force
and effect;
(vi) the Note Documents and any agreements or documents referred to
therein or contemplated thereby contain all the terms of the
agreements and arrangements between the Note Issuers, the Note
Trustee and the Noteholders, and each of the other Persons expressed
to be a party thereto in connection therewith;
(vii) the Diamond Back Acquisition Agreement, as furnished to the Facility
Agent under this Agreement, contain all the terms of the Diamond
Back Acquisition; and
(viii)the Diamond Back Acquisition Agreement contain all the terms of the
agreements and arrangements between the Parties thereto;
(ix) the GSIC Note Documents contain all the terms of the agreements and
arrangements between the GSIC Note Issuer, the GSIC Noteholder and
each other Persons expressed to be a party thereto in connection
therewith;
(x) other than as provided in Clauses 18.1(ii)-(iv), the Subordinated
Finance Documents and the Shareholders' Agreement, contain all the
terms of the agreements and arrangements between the Sponsors and
each other Persons being a member of the Group expressed to be a
party thereto in connection therewith;
74
(v) Encumbrances and Financial Indebtedness:
(i) no Encumbrances (save for Permitted Encumbrances (if any)) exist
over any assets of any Group Member; and
(ii) no Group Member has any Financial Indebtedness outstanding (save for
Permitted Financial Indebtedness) and no Group Member has any
Financial Indebtedness owed to it by another Group Member (other
than under the Finance Documents) that is not stated in the Intra-
Group Loan Memorandum; and
(iii) the execution of the Transaction Documents by each Obligor expressed
to be a party thereto does not create any Encumbrances except as
required by the Security Documents and such Obligor's exercise of
its rights and performance of its obligations thereunder will not
result in the existence of, nor oblige it to create, any Encumbrance
over all or any of its present of future revenues or assets except a
Permitted Encumbrance;
(w) Environmental Matters:
(i) so far as the Company is aware (after due and careful enquiry) each
Group Member has obtained all requisite Environmental Licences
required for the carrying on of its business as currently conducted
and has at all times complied in all material respects with (a) the
terms and conditions of such Environmental Licences and (b) all
other applicable Environmental Law;
(ii) so far as the Company is aware (after due and careful enquiry) no
Dangerous Substance has been used, disposed of, generated, stored,
transported, dumped, released, deposited, owned, leased, occupied or
controlled by any Group Member (including any offsite waste
management or disposal location utilised by any Group Member) in
circumstances where this would be likely to result in the imposition
of a liability on any Group Member which would have a Material
Adverse Effect;
(iii) so far as the Company is aware (after due and careful enquiry) there
is no Environmental Claim (whether in respect of any site previously
or currently owned or occupied by any Group Member or otherwise)
pending or threatened, and there are no past or present acts,
omissions, events or circumstances that would be likely to form the
basis of any Environmental Claim (whether in respect of any site
previously or currently owned or occupied by any Group Member or
otherwise), against any Group Member which in each case is
reasonably likely to be determined against that Group Member and
which if so decided would have a Material Adverse Effect;
(iv) without limiting the generality of Clause 18.1(x)(i), (ii) or (iii)
above, so far as the Company is aware (after due and careful
enquiry) as at the Closing (a) there is no Environmental Claim
(whether in respect of any site previously or threatened which is
reasonably likely to be determined against any Group Member and
which if so decided would have a Material Adverse Effect, (b) so far
as it is aware (after due enquiry) there are no past or present acts
or omissions, events or circumstances that would be likely to form
the basis of any material Environmental Claim (whether in respect of
such site or otherwise) against any Group Member (which is, or will
upon the Closing be a Group Member which, if adversely determined,
would have a Material Adverse Effect and, (c) so far as it is aware
(after due enquiry), since Closing, each Group Member has complied
in all material respects with the terms and conditions of all
requisite Environmental Licences and applicable Environmental Laws
which in each case, if not complied with, would have a Material
Adverse
75
Effect and neither it nor any Group Member has received any notice
from any third party of any breach of such Environmental Licence or
Environmental Law which would have a Material Adverse Effect;
(x) ERISA:
(i) no act, omission or transaction has occurred which will result in
imposition on any U.S. Obligor or any ERISA Affiliate (whether
directly or indirectly) of:-
(1) either a civil penalty assessed pursuant to section 502(i) of
ERISA or a tax imposed by section 4975 of the IRC; or
(2) breach of fiduciary duty liability damages under section 409 of
ERISA;
(ii) no U.S. Obligor or ERISA Affiliate has maintained or contributed to
any Plan that is or was subject to Title IV or ERISA or to the
minimum funding requirements of Section 302 of ERISA or Section 412
of the IRC;
(iii) payment has been made of all amounts which any U.S. Obligor or any
ERISA Affiliate is required under the terms of each Multiemployer
Plan or applicable law to have paid as contributions to such
Multiemployer Plan;
(iv) each U.S. Obligor and each ERISA Affiliate are in compliance with
the presently applicable provisions of ERISA and the IRC with
respect to each Multiemployer Plan;
(v) neither any U.S. Obligor nor any ERISA Affiliate (nor any trade or
business that was an ERISA Affiliate) has at any time contributed to
or been obliged to contribute to any Multiemployer Plan which, upon
the complete or partial withdrawal from such Multiemployer Plan,
could result in the imposition of complete or partial withdrawal
liability;
(y) Investment Company Status: each U.S. Obligor is either not an "investment
company" within the meaning of the United States Investment Company Act of
1940, as amended or is exempt from all provisions of such Act, as amended;
(z) Solvency of U.S. Obligors: as at the Amendment Date each U.S. Obligor is,
Solvent. No U.S. Obligor is entering into this Agreement or the
transactions contemplated hereby with actual intent to hinder, delay or
defraud either present or future creditors. As used herein, "Solvent"
means, with respect of any U.S. Obligor on a particular date, that on such
date (i) the fair saleable value of the property of such U.S. Obligor is
greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such U.S. Obligor, (ii) the amount
that will be required to pay the probable liabilities of such U.S. Obligor
on its debts as they become absolute and matured will not be greater than
the fair saleable value of the assets of such U.S. Obligor at such time,
(iii) such U.S. Obligor is able to realise upon its assets and pay its
debts and other liabilities, contingent obligations and other commitments
as they mature in the normal course of business, (iv) such U.S. Obligor
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such U.S. Obligor's ability to pay as such debts and
liabilities mature, and (v) such U.S. Obligor is not engaged in a business
or a transaction, and is not about to engage in a business or a
transaction, for which such U.S. Obligor's property would constitute
unreasonably small capital after giving due consideration to prevailing
practices in the industry in which such U.S. Obligor is engaged. In
computing the amount of any contingent liability at any time, it is
intended that such
76
liability will be computed at the amount which, in light of all the facts
and circumstances existing at such time, represents the amount that might
reasonably be expected to become an actual or matured liability. For
purposes of determining whether any U.S. Obligor is solvent such U.S.
Obligor shall take into account all rights of contribution, reimbursement,
subrogation and other similar rights that such U.S. Obligor may have from
any other Obligor by virtue of such U.S. Obligor making any payment in its
capacity as a Guarantor hereunder;
(aa) U.S. Reserve Regulations:
(i) no Group Member is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock (as defined herein);
(ii) no part of the proceeds of any Advance will be used, whether
directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of any of
Regulation G, T, U or X of the Federal Reserve Board of the U.S.A;
(bb) U.S. Security Documents:
(i) The U.S. Pledge Agreement is effective to create in favour of the
Security Agent for the rateable benefit of the Secured Beneficiaries
(as defined in such document) a legal, valid and enforceable
security interest in Collateral (as defined in such document) and
constitutes a fully perfected first priority lien on, and security
interest in all right, title and interest of the pledgors thereunder
in such Collateral, and a prior and superior right to any other
person, subject to Permitted Encumbrances that have a priority as a
matter of law;
(ii) each of the U.S. Security Agreement and each of the ▇▇▇▇▇▇▇▇.▇▇▇
Security Documents (other than those which relate to the
▇▇▇▇▇▇▇▇.▇▇▇ Intellectual Property Rights) is effective to create in
favour of the Security Agent for the rateable benefit of the Secured
Beneficiaries (as defined in each such document) and, when financing
statements in appropriate form are filed in the offices specified in
Schedule 5 to the Perfection Certificate (as defined in the US
Security Agreement) or in such other offices as are required, each
of the U.S. Security Agreement and each of the ▇▇▇▇▇▇▇▇.▇▇▇ Security
Documents (other than those which relate to the ▇▇▇▇▇▇▇▇.▇▇▇
Intellectual Property Rights) create a fully perfected lien on, and
security interest in, all right, title and interest of the grantors
thereunder in Collateral (as defined in each such document) in which
a security interest may be perfected by the filing of financing
statements, in each case prior and superior in right to any other
person, other than with respect to Permitted Encumbrances that have
a priority as a matter of law;
(iii) to the extent that the laws of the United States are applicable
thereto, the U.S. Patent and Trademark Security Agreement, the U.S.
Patent Assignment for Security Purposes and each of the ▇▇▇▇▇▇▇▇.▇▇▇
Security Documents which relate to the ▇▇▇▇▇▇▇▇.▇▇▇ Intellectual
Property Rights (the "US IP Security Documents") recorded in the
United States Patent and Trademark Office and all relevant offices,
the U.S. IP Security Documents create a fully perfected lien on, and
security interest in, all right, title and interest of the grantors
thereunder in the federally registered and applied for Patents and
Trademark Collateral (as defined in the U.S. IP Security Documents),
in each case prior and superior in right to any other Person (it
being understood that subsequent recordings in the United States
Patent and Trademark Office and the United States Copyright Office
or such other relevant office may be
77
necessary to perfect a lien on U.S. registered, trademarks,
trademark applications, U.S. patents and patent applications
copyrights and all other intellectual property rights acquired by
the grantors after the date hereof and the registration of any
copyright may be required to perfect a lien in such copyright),
subject to Permitted Encumbrances that have a priority as a matter
of law;
(cc) U.S. Obligors:
(i) no Obligor has any ownership interest in any capital stock of any
Person organised under the laws of any State of the United States,
except for such ownership interests that are Collateral under the
U.S. Pledge Agreement; and
(ii) no Obligor directly owns any assets located in the United States,
except for (x) assets constituting real property, (y) assets that
are subject to the U.S. Pledge Agreement in accordance with clause
(i) above and (z) assets that are Collateral under the U.S. Security
Agreement;
(dd) Year 2000: in relation to each Obligor which is not a Dormant Company, any
reprogramming required to permit the proper functioning, in and following
the year 2000, of (i) each such Obligor's computer systems and (ii)
equipment containing embedded microchips (including systems and equipment
supplied by others or with which each such Obligor's systems interface) and
the testing of all such systems and equipment, has been completed , The
computer and management information systems of each such Obligor are and,
with ordinary course upgrading and maintenance, will continue for the term
of this Agreement to be, sufficient to permit each Obligor to conduct its
business without Material Adverse Effect;
(ee) Disqualified Stock: none of the Company's share capital constitutes
Disqualified Stock as defined in the Senior Notes.
18.2 Repetition of representations and warranties
The representations and warranties contained in Clause 18.1:
(a) are made by the Company on the Amendment Date; and
(b) will be deemed to be repeated by the Company on each date that a Request is
delivered to the Facility Agent, on each Drawdown Date, each Issue Date,
each Interest Date and each Expiry Date as if made with reference to the
facts and circumstances existing at that time,
Provided that the representations and warranties set out in Clause 18.1 (k),
(l), (m) (to the extent that it relates to information delivered prior to 12 May
1998), and (n) to the extent it relates to the Business Plan, shall not be
repeated after 12 May 1998.
PART 6
19. UNDERTAKINGS
19.1 Information undertakings
(a) Financial Accounts
The Company undertakes it shall furnish or procure that there shall be
furnished to the Facility Agent in sufficient copies for each of the
Finance Parties:
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(i) Audited Financial Accounts:
(A) promptly upon the same being available but in any event not
later than 120 days from the end of the annual Accounting Period
to which the Financial Accounts relate the audited consolidated
Financial Accounts of the Group for such Accounting Period
ending after the date hereof (comprising at least an audited
consolidated balance sheet, profit and loss account and cash
flow statement (and the notes thereto) for such Accounting
Period);
(B) (without prejudice to (A) above) promptly after the same have
been prepared the audited Financial Accounts of any Group Member
to the extent that the same are prepared; and
(C) promptly upon the same being available but in any event prior to
the date falling 150 days from the end of the Accounting Period
to which the Financial Accounts relate or, if later, 150 days
from the date the relevant request by the Facility Agent was
made, the audited Financial Accounts of any Material Group
Member previously requested by the Facility Agent (acting
reasonably) for such Accounting Period (comprising at least an
audited consolidated (if such Group Member has a Subsidiary or
Subsidiaries) balance sheet, profit and loss account and
historic cash flow statement (and the notes thereto) for such
Accounting Period),
together, in each case, with the report of the auditors thereon, the
notes thereto and the directors' report thereon;
(ii) Quarterly Financial Accounts: as soon as practicable, and in any
event within 28 days after the end of each quarterly Accounting
Period, copies of the unaudited consolidated accounts for such
Accounting Period of the Group, such unaudited consolidated accounts
to show the detailed financial information provided for quarterly
financial reporting in the Proforma Financial Accounts (comprising
at least (A) a consolidated balance sheet and profit and loss
account for such quarter and cumulatively for the period from the
beginning of the current annual Accounting Period to the end of such
quarterly Accounting Period, (B) a year to date consolidated cash
flow statement for the period from the beginning of the current
annual Accounting Period to the end of such quarterly Accounting
Period, (C) details of Capital Expenditures in such quarterly
Accounting Period, (D) a report on the main operational, commercial
and financial issues arising during such Accounting Period and
explaining any variances against thebudget and the Model for such
quarterly Accounting Periods, (E) operating company results and
commentary (including, but not limited to, the state of the market,
the level of discounting in operation during such quarterly
Accounting Period and the status of any sourcing savings pursuant to
the ATK Report), (F) details of sales, gross margin and EBITDA
margin (including comparison with the budget and Model at Group
level and in respect of all operating companies in the Group), (G)
accounts payable and ageing creditor schedules, (H) any items which
the Group is required to report progress on in accordance with the
Phase II monitoring work carried out by KPMG pursuant to the
Engagement Letter and (I) confirmation of the amount of headroom
available at the end of such quarterly Accounting Period under the
baskets permitted under the Note Indentures);
(iii) Monthly Management Financial Accounts: as soon as practicable, and
in any event within 28 days after the end of the monthly Accounting
Period to which they relate, copies of the unaudited monthly
management accounts of the Group, such unaudited
79
monthly management accounts to be in an agreed form, split out
monthly and on a year to date basis to show the detailed information
provided for monthly financial reporting in the Proforma Financial
Accounts, and comprising at least (A) a written report by an
Executive Officer on the main operating and financial issues (if
any) arising during such Accounting Period, (B) a comparison of
actual performance for such Accounting Period relative to the latest
Budget, (C) confirmation that all premiums payable in that monthly
Accounting Period in respect of all Material Insurances maintained
by the Group (or any Group Member) have been paid by such time so as
to ensure that those Material Insurances remain in full force, (D) a
consolidated balance sheet and profit and loss account for such
month, (E) a year to date consolidated cash flow statement from the
beginning of the current annual Accounting Period to the end of such
monthly Accounting Period, (F) operating company results and
commentary for such monthly Accounting Period (including, but not
limited to, the state of the market, the level of discounting in
operation during such quarterly Accounting Period and the status of
any sourcing savings arising out of the ATK Report), (G) details of
sales, gross margin and EBITDA margin (including comparison with the
budget at Group level and operating company level), (H) accounts
payable and ageing creditor schedules and (I) any items which the
Group is required to report progress on in accordance with the Phase
II monitoring work carried out by KPMG pursuant to the Engagement
Letter, all such Financial Accounts to be approved by an Executive
Officer (or in their absence one other director of the Company) and
one other director of the Company (in each case without incurring
personal liability) as giving an accurate and reasonable view of the
financial condition and trading performance of the Group;
(iv) Borrowing Base Summary: in addition to any Borrowing Base Summary
required to accompany a Request under Clause 6, the Company shall
deliver (a) a completed Borrowing Base Summary as soon as
practicable, and in any event within 5 days after the end of each
monthly Accounting Period and (b) monthly borrowing base reports to
include information on, but not limited to, accounts receivable,
component and finished goods inventory, inventory turnover, progress
on the reduction of inventory in Germany and updates on key systems
initiatives on the same date as the Monthly Management Financial
Accounts are delivered pursuant to Clause 19.1(c)(iii);
(v) Cashflow Statements: The Company undertakes that it shall furnish to
the Facility Agent, or procure that there shall be furnished to the
Facility Agent, in sufficient copies for each of the Finance
Parties, no later than the Friday before the commencement of a week
an actual cashflow statement as at the end of the immediately
preceding week and a cashflow forecast in an agreed form for the
Group, calculated on a Forward Rolling 12 Week Basis.
(vi) Auditor's Confirmations:
(A) at the same time as the Financial Accounts for the annual
Accounting Period in each year are delivered (or, if not
delivered, required to be delivered) pursuant to Clause
19.1(a)(i); and
(B) upon the Facility Agent notifying the Company that it is of the
opinion that the process by which one or more of the Borrowing
Base Summaries is prepared requires further review and input, as
soon as practicable after any such notification, and within 30
days thereafter,
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the Company undertakes that it will procure that the Auditors
shall deliver a certificate to the Facility Agent confirming
whether or not each of the Borrowing Base Summaries most
recently delivered under this Agreement (or such other Borrowing
Base Summaries as are identified for such purpose by the
Facility Agent) were, in all material respects, true, complete
and accurate and prepared in accordance with the provisions of
this Agreement and whether or not the Company has in place
satisfactory methods and procedures for obtaining and collating
the information required in order for it to be able to compile
accurate Borrowing Base Summaries for this Agreement having
regard, where appropriate, to each of the specific requirements
of this Agreement relating thereto including, without
limitation, Clause 6.
(b) Budgets
The Company undertakes it shall furnish, or procure that there shall be
furnished to the Facility Agent in sufficient copies for each of the Finance
Parties to the Facility Agent:
(i) not later than 15 days before the commencement of each annual
Accounting Period a budgeted consolidated balance sheet, profit and
loss account, cash flow statement, rolling monthly cash forecast of
the Group and budgeted monthly Capital Expenditure of the Group, for
(or in the case of a balance sheet, as at the end of) the following
annual Accounting Period, together with details of the principal
assumptions underlying such projections and a description of the
proposed activities of the Group during such annual Accounting
Period, all as approved by the board of directors of the Company
and, in each case, the format, heading and characterisation shall be
consistent with the form of monthly management accounts delivered
pursuant to Clauses 19.1(a)(ii) and 19.1(a)(iii);
(ii) not later than the date on which the monthly Financial Accounts in
respect of January in each year are required to be delivered
pursuant to the terms Clause 19.1(a)(iii) a revision of the budgets
furnished to the Facility Agent pursuant to Clause 19.1(b)(i)
adjusted so as to reflect the actual opening balance sheet of the
annual Accounting Period to which they relate;
(iii) if, in the course of any annual Accounting Period, the Company
updates or revises any of the budgets furnished to the Facility
Agent pursuant to Clause 19.1(b)(i) or Clause 19.1(b)(ii) in any
material respect, the Borrower shall furnish, or procure that there
shall be furnished (as soon as possible and in any event within
fourteen days of such revision), to the Facility Agent, sufficient
copies for each of the Finance Parties, such updated or revised
forecasts, together with a statement, explaining the requirement for
such updating or revision;
(iv) at the same time as it is required to deliver to the Facility Agent
Financial Accounts required by Clauses 19.1(a)(ii) and 19.1(a)(iii),
a cash flow forecast in an agreed form for the Group to the end of
the current annual Accounting Period together with the basis of the
assumptions used in its preparation.
(c) Certificates
The Company undertakes it shall furnish or procure that there shall be
furnished to the Facility Agent in sufficient copies for each of the
Finance Parties:
81
(i) at the same time as the Financial Accounts for any annual Accounting
Period are delivered (or, if not delivered, required to be
delivered) pursuant to Clause 19.1(a)(i):
(A) a report of the Company in a form reasonably satisfactory to
the Facility Agent setting out in reasonable detail
computations establishing, as at the date of such Financial
Accounts, whether each of the financial undertakings set out in
Clause 20 were complied with, and setting out in reasonable
detail computations demonstrating the application of the
financial ratios set out in Clause 20 for such Accounting
Period, such report being confirmed by the Auditors as being
true and accurate; and
(B) a certificate signed by two Authorised Signatories of the
Company (one of whom shall be an Executive Officer (in each
case without incurring personal liability)), stating that at
the date of such certificate no Event of Default has occurred
and is then continuing, and that so far as the Company is aware
having made due and diligent enquiry, no Potential Event of
Default has occurred and is continuing, or providing details of
any such Defaults and of any remedial action proposed to be
taken;
(ii) at the same time as the Financial Accounts for any quarterly
Accounting Period are delivered (or, if not delivered, required to
be delivered) pursuant to Clause 19.1(a)(ii) above a Compliance
Certificate, signed by two Authorised Signatories of the Company
(one of whom shall be an Executive Officer (in each case without
incurring personal liability)):
(A) setting out in reasonable detail computations establishing, as
at the date of such Financial Accounts, whether each of the
financial conditions set out in Clause 20 was complied with;
and
(B) stating that as at the date of such certificate no Event of
Default has occurred and is then continuing and that so far as
the Company is aware having made due and diligent enquiry, or
providing details of any such Default and of any remedial
action proposed to be taken; and
(iii) at the same time as the Financial Accounts for any monthly
Accounting Period are delivered (or, if not delivered, required to
be delivered) pursuant to Clause 19.1(a)(iii):
(A) a report of the Company in a form reasonably satisfactory to
the Facility Agent setting out in reasonable detail
computations establishing, as at the date of such Financial
Accounts, whether each of the financial undertakings set out in
Clause 20 were complied with, and setting out in reasonable
detail computations demonstrating the application of the
financial ratios set out in Clause 20 for such Accounting
Period, such report being confirmed by an Executive Officer (or
in their absence one other director of the Company) and one
other director of the Company in each case without incurring
personal liability as being true and accurate; and
(B) a certificate signed by two Authorised Signatories of the
Company (one of whom shall be an Executive Officer (in each
case without incurring personal liability)), stating that at
the date of such certificate no Event of Default has occurred
and is then continuing, and that so far as the Company is aware
having made due and diligent enquiry, no Potential Event of
Default has
82
occurred and is continuing, or providing details of any such
Defaults and of any remedial action proposed to be taken;
(iv) at the same time as the Financial Accounts for the annual Accounting
Period in each year are delivered (or, if not delivered, required to
be delivered) pursuant to Clause 19.1(a)(i) above the Company shall
procure that the Auditors shall confirm (by reference to the
relevant Financial Accounts) whether or not each of the financial
conditions set out in Clause 20 was complied with.
(d) Reviews: The Majority Banks shall be entitled to request the Facility Agent
no more frequently than quarterly to conduct a review of books and
accounting records of each Borrower to examine the basis of the information
used by the Company to compile the Borrowing Base Summaries delivered to
the Facility Agent hereunder provided that:
(i) any Bank may request on reasonable notice a copy of the results of
any such review carried out by or on behalf of the Facility Agent;
(ii) neither the Facility Agent nor any of its employees, directors,
agents or advisers shall have any responsibility or liability
whatsoever for the accuracy or completeness of any such review; and
(iii) the Company shall indemnify the Facility Agent on demand for all
reasonable costs and expenses incurred in connection with any such
review.
(e) Notifications: The Company undertakes it shall furnish, or procure that
there shall be furnished to the Facility Agent, in sufficient copies for
each of the Finance Parties:
(i) promptly upon their despatch (and in any event within ten Business
Days), all notices, reports or other documents despatched by or on
behalf of any Obligor to (a) its shareholders (in their capacity as
shareholders) generally (or any class of them); (b) to its creditors
generally (in their capacity as creditors), or any class of them;
and (c) (without prejudice to (b) above) the Noteholders or, the
Note Trustee, or any SEC filings made in connection with all or any
of the Note Documents or otherwise;
(ii) promptly, and in any event within ten Business Days of the same
being instituted or, to its knowledge, threatened, details of any
litigation, arbitration or administrative proceedings involving it
or any of its Subsidiaries which, if adversely determined, might
have a Material Adverse Effect or which would involve liability or
potential liability or alleged liability in excess of $250,000 (or
its equivalent in other currencies);
(iii) at the same time as the monthly Financial Accounts in respect of the
period during which the same becomes known to the Company or any
other Group Member is delivered under Clauses 19.1(a)(ii) or
19.1(a)(iii) (or, if not delivered, the latest date by which they
are required to be delivered) reasonable details of all warranty and
indemnity claims in excess of $100,000 made by or against any Group
Member or any shareholder of the Company pursuant to, or in respect
of, the Recapitalisation Documents or which could be so made if
Clause 9(b) of the Recapitalisation Agreement was disregarded;
(iv) promptly (and in any event within ten Business Days or such other
period as the Facility Agent may require) upon being so requested,
such further information regarding its financial condition, business
and assets and that of the Group and/or any Group Member (including
any requested amplification or explanation of any
83
item in any Financial Accounts, budgets, projections or other
material provided by any Group Member under this Agreement) as the
Facility Agent or any Finance Party through the Facility Agent may
reasonably request from time to time;
(v) at the same time as the monthly Financial Accounts in respect of the
period during which the same occurs are delivered under Clause
19.1(a)(ii) or Clause 19.1(a)(iii) (or, if not delivered, the latest
date by which they are required to be delivered), details of all
transfers of shares of any Group Member (which when taken together
with any other transfer made to Persons connected with or associated
with the relevant transferee equate to 3 per cent or more of the
issued share capital of such Group Member) in the share capital of
any Group Member (including any change in the beneficial ownership
of any such shares of which any of the directors of the Company
become aware) and details of the issue and allocation of any shares
in the capital of the Company;
(vi) written details of any Default forthwith upon the Company becoming
aware of the same, and of any remedial steps being taken and
proposed to be taken in respect of that Default;
(vii) (other than to a transferee or in respect of replacement Senior
Notes) promptly (and in any event within ten Business Days) upon the
Company being aware, details of any Additional Securities (as
defined in the Note Indentures) being issued after Closing under or
pursuant to the Note Documents;
(viii)promptly (and in any event, within ten Business Days) upon the
Company being aware, details of any Group Member that is not listed
at Schedule 12 that becomes a "Material Group Member";
(ix) promptly (and in any event, within ten Business Days) upon the
Company being aware, details of any Group Member that is a Dormant
Company, ceasing to be a Dormant Company;
(x) promptly upon the Company being aware (and in any event within ten
Business Days), details of any change in any applicable
Environmental Law which is reasonably likely to have a Material
Adverse Effect; and
(xi) promptly (and in any event within ten Business Days) after receipt
or despatch thereof deliver to the Facility Agent sufficient copies
for each of the Finance Parties certified copies of all notices
given by any Group Member under any of the Transaction Documents.
(f) Listings: The Company shall promptly (and in any event within 14 days of
the relevant proposal) inform the Facility Agent of any Listing of any
Group Member proposed by the Board of Directors.
(g) Audit and Accounting Dates: The Company will ensure that:
(i) the annual Financial Accounts to be delivered to the Facility Agent
pursuant to Clause 19.1 are audited by the Auditors;
(ii) it shall at all times have duly appointed Auditors;
(iii) each Accounting Period of the Group shall end on an Accounting Date;
and
84
(iv) each annual Accounting Period of each Group Member shall, with the
exception of Derby Nederland BV and its Subsidiaries (which annual
Accounting Period shall end on 30 November or, if such annual
Accounting Period is changed at any time after the date of this
Agreement, 31 December) no later than 30 June 1998, end on 31
December, and no Group Member will change its financial year end
without prior written consent of the Facility Agent other than to
conform its financial year end to 31 December.
(h) Syndicate meetings: The Company will procure that within 15 days from the
date on which the Company delivers its Monthly Management Financial
Accounts in accordance with Clause 19.1 (iii) (or the date on which it
should have delivered those Accounts) (or such other date as the Facility
Agent (acting on the instructions of the Majority Banks) shall agree) an
Executive Officer (or in their absence one other director of the Company)
will give a presentation to the Banks and provide such further information
or assistance as the Banks shall require.
(i) GSIC Notes: If at any time the Company elects to make any issuance of GSIC
Notes (whether in respect of or in lieu of interest on any GSIC Notes then
outstanding or otherwise), the Company will, at least ten days prior to
such issuance, furnish to the Facility Agent a report: (i) stating that the
Company is permitted under the Note Indentures to incur an amount of
indebtedness not less than the aggregate principal amount of GSIC Notes
intended to be issued; (ii) setting forth the provision of the Note
Indentures under which the Company is so permitted; and (iii) setting forth
in reasonable detail calculations demonstrating that the conditions for
incurring indebtedness set forth therein have been complied with.
19.2 Form of financial statements
Each set of consolidated financial statements delivered by or on behalf of the
Company in connection with this Agreement shall, subject to Clause 19.3 and the
proviso stated below, be prepared (and if appropriate, audited) on the same
basis as the Pre-Closing Accounts and in accordance with Applicable Accounting
Principles provided that if the Auditors have confirmed in writing to the
Facility Agent that a change in the basis on which the Financial Accounts are
prepared is:
(a) necessary so as to take into account changes in applicable laws since the
date the above mentioned Financial Accounts were prepared;
(b) necessary so that the Financial Accounts to which such proposed change
relates are not qualified by the Auditors in a manner which they would
otherwise have been qualified; or
(c) in their opinion, appropriate;
and, in the case of a proposed change to which paragraph (b) or (c) above
applies, the Facility Agent, acting on the instructions of the Majority Banks,
has approved the proposed change (such approval not to be unreasonably withheld
or delayed), from such date each set of financial statements delivered by or on
behalf of any Group Member in connection with this Agreement shall be prepared
as aforesaid, but subject to such change.
19.3 Variation of financial undertakings
In the case of any change in Applicable Accounting Principles, any change to be
made in accordance with Clause 19.2 or any proposed change in accounting
reference date of the Company the Company shall, promptly upon becoming aware,
notify the Facility Agent of such change or such proposed change, and as soon as
practicable after receipt of such notice, the Company and the Facility Agent
85
shall (for a period of up to 7 days) negotiate with a view to agreeing such
varied financial undertakings as would provide the Finance Parties with no less
protection as the financial undertakings set out in Clause 20 as at the date of
the Agreement to the extent that any revised financial undertakings will, as
nearly as practicable, be based on a similar differential as that between the
financial projections in the Business Plan and the financial undertakings as at
the date of this Agreement). If, after any negotiations conducted between the
Facility Agent and the Company, an agreement is not able to be reached as to
what adjustments (if any) are required to be made to the financial undertakings
contained in this Agreement, within the said 7 day period (or such negotiations
are not commenced within 7 days of the receipt of the Facility Agent of the
relevant notice (or such longer period as the Facility Agent may agree) the
matter shall be referred to the Auditors to determine, as experts and not as
arbitrators. The costs of the Auditors shall be for the account of the Company.
For the avoidance of doubt, during any such period of consultation, the
financial undertakings set out in Clause 20 shall be calculated in accordance
with Applicable Accounting Principles prevailing before the relative
determination, introduction or implementation.
19.4 Positive undertakings
(a) Taxes: The Company shall, and shall procure that each other Group Member
shall, pay and discharge all Taxes and governmental charges prior to the
date on which the same become overdue other than in respect of Taxes and
governmental charges which, in aggregate, are less than $10,000 (or the
equivalent in other currencies) and overdue by no more than 30 days,
unless, and only to the extent that, such Taxes shall be contested in good
faith by appropriate proceedings, pending determination of which payment
may lawfully be withheld, and there shall be set aside adequate reserves
with respect to any such Taxes or charges so contested in accordance with
Applicable Accounting Principles.
(b) Insurances:
(i) The Company shall, and shall procure that each other Group Member
shall, maintain in full force and effect prudent insurances on and
in relation to its business and assets and in particular and without
limitation:
(A) maintain in full force and effect insurances covering the risks
covered by the insurances set out in Schedule 14 or
replacements therefor as the case may be, and in each case: to
the same level of sums insured as detailed in Schedule 14 and
if the Security Agent shall so stipulate in an insurance office
with underwriters approved by the Security Agent or if and to
the extent that the Security Agent does not so stipulate, in
such insurance office of repute as shall have been selected by
the Company or with Lloyd's underwriters and in the joint names
of the relevant insured Group Member or Group Members (as the
case may be) or, to the extent that the Facility Agent has
confirmed to the Company that, in its opinion (acting
reasonably) it is not practicable or possible for any such
insurance to be in the joint names of the relevant Group Member
or Group Members (as the case may be) and the Security Agent,
the Security Agent shall be named thereon as "Loss Payee";
(B) without prejudice to Clause 19.4(b)(i)(A), cause all Inventory,
Receivables, buildings, trade and other fixtures, fixed and
other plants and machinery forming part of the Secured Property
to be insured and to be kept insured:
(1) (if the Security Agent shall so stipulate) in an insurance
office with underwriters approved by the Security Agent
against loss or damage by fire, explosion, aircraft and
all such other risks as the Security Agent shall direct to
the full reinstatement value thereof adequate
86
provision also being made for the cost of clearing the
site and architects' engineers', surveyors' and other
professional fees incidental thereto and the loss of rents
or prospective rents (for a period of not less than three
years) in the joint names of the Group Member that
occupies or owns the relevant Secured Property and the
Security Agent; or
(2) (if and to the extent that the Security Agent does not so
stipulate) in such insurance office of repute as shall
have been selected by the Company or with Lloyd's
underwriters on the same basis as insurances are
maintained by prudent companies carrying on businesses
comparable with that of the relevant Group Member and on a
comparable scale as regards the property and assets
insured, the insured risks and the classes of risk to be
covered;
(C) without prejudice to Clauses 19.4(b)(i)(A) and 19.4(b)(i)(B),
maintain such other insurances (including, but without
limitation, product liability insurance with a deductible of
not more than $250,000 in respect of any one claim) as are
normally made by prudent companies carrying on similar
businesses including business interruption insurances, public
liability insurances and employers' liability insurance;
(D) promptly and in any event within 20 days following any request
to do so, provide the Facility Agent with such information in
relation to insurances maintained or previously maintained by
any Group Member as the Facility Agent may (acting reasonably)
request from time to time;
(E) duly and punctually pay all other premiums and other monies
payable under such insurances as aforesaid and promptly upon
request by the Security Agent produce the premium receipts or
other evidence of the payments thereof;
(F) (if so required by the Security Agent but subject to the
provisions of any lease of the Secured Property) deposit all
policies and other contracts of insurance relating to the
Secured Property or any part thereof with the Security Agent or
produce to the Security Agent for inspection; and
(G) if default shall be made by any Group Member in complying with
paragraphs (A), (B) (C), (D), (E) and F above it shall be
lawful for the Security Agent but not obligatory on the
Security Agent to effect or renew any such insurance as is
mentioned in that paragraph either in its own name or in its
name and that of the relevant Group Member or in the name of
the Company with an endorsement of the Security Agent's
interest, the monies expended by the Security Agent in so
effecting or renewing any such insurance shall be reimbursed by
the Company to the Security Agent on demand and shall until so
reimbursed shall carry interest at the rate (as well after as
before any judgment) as provided for in Clause 9 of this
Agreement mutatis mutandis from the date of payment to the date
of reimbursement.
(ii) The Company undertakes that:
(A) if an Event of Default has occurred and is continuing (and has
not been waived in writing by the Facility Agent on behalf of
the Banks); or
87
(B) (otherwise) to the extent not applied in repair, replacement or
reinstatement of physical loss or damage;
(and without prejudice to the provisions of any Security Document)
it will procure that the proceeds of any policy of insurance (other
than any such policy in respect of third party liabilities)
maintained by any Group Member shall:
(C) if such proceeds relate to an asset or assets which, in the
opinion of the Facility Agent were utilised by the relevant
Group Member in or towards the generation of income and are more
than $250,000 (or the equivalent in other currencies), be
applied in or towards prepayment of the whole or such part of
the Facilities as the Facility Agent (acting on the instructions
of the Majority Banks) shall direct whereupon the Total
Commitments shall be cancelled by an amount equal to such
proceeds and the Standby L/C Commitment of each Bank shall be
reduced by a proportionate amount pro rata and the Revolving
Commitment of each Bank (including, for the avoidance of doubt,
the Revolving Commitment of each Ancillary Bank disregarding,
for this purpose, its Ancillary Commitment) shall be reduced by
a proportionate amount and pro rata to their respective
Revolving Commitments at such time.
(c) Hedging Arrangements: The Company shall put or cause there to be put into
effect as soon as possible and in any event within 30 days from the
Amendment Date in form and substance satisfactory to the Facility Agent
with such counterparty as is (or counterparties as are) acceptable to the
Facility Agent (acting reasonably) and then maintain in full force and
effect, exercisable by and for its benefit, interest rate hedging or
protection arrangements and currency rate protection arrangements in
accordance with the Approved Hedging Programme.
(d) Security - UK Obligors: If requested to do so by the Facility Agent, the
Company shall procure that in respect of any Group Member incorporated in
England and Wales, Scotland or Northern Ireland (that is not a Dormant
Company) to which such request relates there is delivered to the Facility
Agent within 45 days (or such longer period as the Majority Banks may
agree) a Guarantor's Accession Agreement and/or a Guarantee together with a
notice of accession under such Intercreditor Agreements as advised by the
Facility Agent duly executed by such company and the Company and a Security
Document, together with each of the conditions precedent documents required
to be provided in connection therewith, all in a form and substance
reasonably satisfactory to the Facility Agent. Notwithstanding anything to
the contrary in this Agreement, only the Company shall be liable for its
obligations under this Agreement and nothing herein shall oblige an Obligor
to guarantee or act as a guarantor for any obligation of the Company under
this Agreement.
(e) Security - Non-UK Obligors: If requested to do so in writing by the
Facility Agent, the Company shall procure that in respect of a Group Member
not incorporated in England and Wales (that is not a Dormant Company) to
which such request relates there is delivered to the Facility Agent within
45 days (or such longer period as the Majority Banks may agree) of any such
request a Guarantor's Accession Agreement and/or a Guarantee duly executed
by such Non-UK Obligor, a Security Document together with a notice of
accession under such Intercreditor Agreements as advised by the Facility
Agent and each of the conditions precedent documents required to be
provided in connection therewith, all in a form and substance reasonably
satisfactory to the Facility Agent save that, notwithstanding the
foregoing, (x) only the Company shall be liable for its obligations under
this Agreement and nothing herein shall oblige an Obligor to guarantee or
act as a guarantor for any obligation of the Company under this Agreement
and (y) nothing herein shall oblige the Company to
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pledge (as determined by applicable law) more than 65% of its interest in
the voting share capital in any of its Immediate Subsidiaries and the
Company shall not be obliged to procure that a Non-UK Obligor (the
"Relevant Company") becomes an Obligor:
(i) if it is unlawful in the Relevant Company's jurisdiction of
incorporation for it to support the obligations of the Company under
the Finance Documents and, for the purposes of this Clause 19.4, it
shall not be unlawful if an amendment to the Relevant Company's
constitutive documents may be made which would enable it lawfully to
become an Obligor; or
(ii) if, as a result of the Relevant Company becoming an Obligor, the
directors of the Relevant Company in their capacity as directors of
an Obligor otherwise than solely as a result of any such director
failing to properly discharge all of his obligations and duties in
his capacity as a director of such Relevant Company would be liable
to criminal prosecution solely as a result of the Relevant Company
becoming an Obligor,
and, in each case, the maximum level of support provided by an Obligor
shall not exceed the maximum amount able to be provided by such Relevant
Company having regard to generally applicable laws in its country of
incorporation.
(f) Security Threshold: Without prejudice to Clauses 19.4(d), 19.4(e) and
19.4(g) the Company shall procure that if:
(i) the consolidated earnings before interest, tax depreciation and
amortisation of the Obligors calculated on a Rolling 4 Quarterly
Basis as at the last day of the three month Accounting Period of the
Group last ended is less than 85 per cent of the Consolidated
Adjusted EBITDA calculated in the same Rolling 4 Quarterly Basis as
at the end of such three month Accounting Period (as determined by
reference to the Compliance Certificate delivered pursuant to Clause
19 in respect of such Accounting Period); and
(ii) at any time the total assets of the Obligors is less than 85 per
cent of the sum of the Total Assets less the value of pre-paid
pension assets shown in the latest annual Financial Accounts of the
Company at such time,
then promptly after service of a notice to that effect on the Company by
the Facility Agent and in any event within forty five days (or such longer
period as the Facility Agent acting on the instructions of the Majority
Banks may agree) thereafter, in the event that the shortfall was with
respect to paragraph (i) above, a Group Member or Group Members whose
earnings before interest, tax depreciation and amortisation in aggregate in
respect of the financial year to which such shortfall relates was equal to
or greater than such shortfall and/or, in the event that the shortfall was
with respect to paragraph (ii) above, a Group Member or Group Members whose
total assets at such time in aggregate is equal to or greater than such
shortfall shall each execute a Guarantor's Accession Agreement or enter
into a Guarantee and in each case execute a Security Document over all of
its assets (both present and future) and an Intercreditor Agreement
Accession Notice and deliver them to the Facility Agent together with the
conditions precedent documents required to be provided in connection
therewith, all in a form and substance satisfactory to the Facility Agent,
Provided that for the purposes of this Clause 19.4(f) the terms "adjusted
earnings before interest, tax, depreciation and amortisation" and "total
assets" of a company shall be determined in accordance with the capitalised
defined terms contained in Clauses 1.1 and 1.2 (namely "Consolidated
Adjusted EBITDA" and "Total Assets" respectively), but as if
89
references therein to the Company were references to such company,
references therein to the Group were references to such company, references
to the relevant period were references to the annual Accounting Period of
such company, and references therein to the consolidated financial
statements were references to the latest audited financial statements of
such company and on the basis that all intra-Group items and investments
shall be excluded.
(g) Additional Security
(i) The Company shall procure that (a) on acquiring (and in any event
within 45 days of such acquisition) any asset of with a value of
US$75,000 or more or material to the operation of the business of
any Obligor or to the value of any other asset over which the Banks
have security, the Obligor acquiring such asset shall (if such asset
is not, in the reasonable opinion of the Security Agent, subject to
any existing Security Document giving equivalent security to that
provided by the Security Documents over similar assets held by any
Obligor at Closing and (subject to sub-paragraph (iii) below) it is
legal, practical and (in the opinion of the Facility Agent, acting
reasonably and having regard to the value of the asset or its
materiality to the operation of the business of such Obligor) cost
effective to do so) execute and deliver to the Security Agent such
further or additional Security Documents in relation to such assets
as the Majority Banks may require in substantially the same terms as
the Security Documents charging similar assets entered into at
Closing, and (b) if there has, in the reasonable opinion of the
Majority Banks, been a material and adverse change in the business,
assets or financial condition of any Obligor, such Obligor shall
execute and deliver to the Security Agent such further or additional
Security Documents in such form and in relation to such of its
assets as the Majority Banks shall require, subject in each case to
any provisions of law prohibiting such person from entering into
such Security Documents provided that notwithstanding the foregoing
(y) only the Company shall be liable for its obligations under this
Agreement and nothing herein shall oblige an Obligor to guarantee or
act as a guarantor for any obligation of the Company under this
Agreement and (z) nothing herein shall oblige the Company to pledge
(as determined by applicable law) more than 66.6% of its interest in
the voting share capital in any of its Immediate Subsidiaries.
(ii) The Company shall procure that any entity which becomes a Material
Group Member after Closing shall (within 45 days of becoming a
Material Group Member) execute and deliver to the Security Agent
such further or additional Security Documents in such form and in
relation to such of its assets as the Majority Banks shall require
subject to any provision of law prohibiting such person from
entering into such Security Documents.
(iii) Where any such prohibition as is referred to above exists, the
Obligors shall use their reasonable endeavours lawfully to overcome
the prohibition, and the Security Agent may (but shall not be
obliged to) agree with the relevant Obligor limitations on the
extent of the security granted by it to the extent that in its
opinion, based on the advice of independent legal counsel acceptable
to the Security Agent in the relevant jurisdiction, it is necessary
to do so in order to overcome the prohibition.
(iv) The Obligors shall at their own expense execute and do all such
assurances, acts and things as the Security Agent or the Majority
Banks may reasonably require for perfecting or protecting the
security intended to be afforded by the Security Documents or for
facilitating the realisation of all or any part of the assets which
are subject to the Security Documents and the exercise of all
powers, authorities and discretions vested in the Security Agent or
in any receiver of all or any part of those
90
assets and in particular shall execute all transfers, conveyances,
assignments and releases of that property whether to the Security
Agent or to its nominees and give all notices, orders and directions
which the Security Agent may reasonably think expedient.
(v) The Company shall procure that in relation to each further or
additional Security Document the relevant Borrower or Guarantor
shall do all things necessary duly to perfect in the jurisdiction of
its incorporation and in the jurisdiction wherein the assets which
are the subject of the further or additional Security Documents are
located, the security to be afforded to the Finance Parties under
such further or additional Security Documents and shall deliver to
the Security Agent such directors and shareholders' resolutions,
legal opinions, notices, certificates or documents of title or other
items as the Facility Agent shall require.
(h) New Auditors: Other than in circumstances where the outgoing auditor has
resigned the Company may appoint any one or more of Coopers ▇▇▇▇▇▇▇, ▇▇▇▇▇
& Young, KPMG, Deloitte & Touche, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, or Price Waterhouse (or
such other firm or firms as the Facility Agent may agree from time to time)
without the prior approval of the Facility Agent and in all other cases the
Company may only change its auditors with the prior approval of the
Facility Agent. If the Company wishes to change its auditors it will
notify the Facility Agent as to the reasons for any such proposed change
and, if the Facility Agent so requests, will instruct the audit partner of
each of the outgoing firm of auditors and the replacement firm of auditors
to discuss the financial position of the Group with the Facility Agent.
The Company shall procure that, within ten Business Days of the date of
their appointment as Auditors, the accountants shall deliver to the
Facility Agent a letter from such newly appointed Auditors confirming that
they are aware of the provisions of this Agreement, including Clauses 6.3,
6.10, 19.1 and 20.
(i) Pari passu ranking: The Company shall ensure that the obligations of each
Group Member under the Senior Finance Documents to which they are expressed
to be a party rank, and will at all times rank, at least pari passu in
right and priority of payment and in point of security (save by reason of
and to the extent of the security afforded thereto by the Security
Documents) with all its other present and future unsecured and
unsubordinated obligations, other than obligations applicable generally to
companies incorporated in its jurisdiction of incorporation which have
priority by operation of law (including, without prejudice to the
generality of the foregoing, in respect of employees' remuneration, Taxes
and like obligations).
(j) Compliance with laws: The Company shall, and shall procure that each
Obligor and other Material Group Member shall procure that each other Group
Member shall, comply with all applicable laws, rules, regulations and
orders of any governmental authority, whether domestic or foreign, having
jurisdiction over it or any of its assets, failure to comply with which
might have a Material Adverse Effect.
(k) Consents: The Company shall, and shall procure that each Obligor and each
Material Group Member (that is not an Obligor) shall, obtain, promptly
renew from time to time and maintain in full force and effect, and if so
requested, promptly furnish certified copies thereof to the Facility Agent,
all such material authorisations, approvals, consents, licences and
exemptions as may be required under any applicable law or regulation:
(i) to enable each Obligor to perform its respective material obligations
under the Finance Documents to which it is a party or required for
the validity or enforceability of such Finance Documents or of any
Encumbrances provided for thereby; and/or
91
(ii) to carry on its business as it is being conducted from time to time.
(l) The Payment of Existing Financial Indebtedness: The Company shall pay (or,
as the case may be, procure that each other Group Member shall pay) all
amounts payable to Derby International and any other Persons to whom the
Existing Financial Indebtedness is owed and will otherwise perform its
material obligations in accordance with the terms of each of the
Recapitalisation Documents, and the Company will ensure that appropriate
action is taken to ensure receipt by the Company (or the relevant Group
Member) of any sums payable by any Person to any Group Member under any of
the Recapitalisation Documents.
(m) Books and Records: The Company shall, and shall procure that each other
Group Member shall, keep or cause or procure to be kept proper books of
account and records relating to the business.
(n) Group Activity: The Company shall, and shall procure that each Group
Member shall, conduct any trading business it has with any other Group
Member on an arm's length basis and on terms and conditions similar to
those such Group Member offers (or, if it does not so offer, might
reasonably be expected to offer) to Persons that are not a Group Member or
consistent with practice applicable at the date hereof.
(o) Access: Upon reasonable notice being given by the Facility Agent, the
Company will procure that any one or more representatives of the Facility
Agent and/or accountants or other professional advisers appointed by the
Facility Agent shall be entitled to have access during normal business
hours (i) to the Persons involved in the management of the Group as the
Facility Agent may reasonably request), and (ii) to the assets, books and
records of each Group Member that is not a Dormant Company, and are able to
inspect and copy the same at reasonable times.
(p) Pension schemes: The Company will, if requested by the Facility Agent,
deliver to the Facility Agent (i) at such time as those reports are
prepared in order to comply with then current statutory or auditing
requirements and (ii) not more than once in any period of three years, if
the Facility Agent reasonably believes that the requirements of this Clause
19.4(p) are not being complied with, actuarial reports in relation to each
of the pension schemes with an actuarial valuation of liabilities of more
than $1,000,000 (or the equivalent thereof in other currencies) for the
time being operated by the Group Members (in sufficient copies for each of
the Finance Parties), and will, save as fully and fairly disclosed in the
Accountant's Report, ensure that all such pension schemes are fully funded
in accordance with reasonable actuarial assumptions applicable in the
jurisdiction in which the relevant pension scheme is maintained and in
accordance with Applicable Accounting Principles or, to the extent that any
such pension scheme is not fully funded, promptly upon being aware thereof,
take such action as is required to ensure that such pension scheme is fully
funded in accordance with the recommendations made or instructions given in
such respect of the relevant actuaries.
(q) Registered Office: The Company shall, and shall procure that each Obligor
(that is not a Material Group Member) and each Material Group Member shall,
promptly (and in any event within 4 days) notify the Facility Agent in
writing of any change in its name or in the address of its registered or
principal office.
(r) Executives: The Company undertakes that if (i) either the Chief Financial
Officer, or the Chief Executive Officer ceases or (ii) more than one
Executive together cease (whether by reason of death, retirement at normal
retiring age, ill health or otherwise) to perform the functions for which
he was or they were (as the case may be) employed it will within 6 months
of such Executive ceasing to perform such functions have offered to a
Person or Persons (as the case may be) having the appropriate
qualifications, background and
92
experience, the position of the relevant Executive or Executives (as the
case may be) and such Person or Persons (as the case may be) shall have
accepted such offer in writing and the Company will procure that each such
Person shall have taken up his duties as the relevant Executive of the
Company within 6 months of each such Executive ceasing to perform such
functions.
(s) Dormant Companies: Each Obligor will procure that, save as permitted by
the Facility Agent or unless it becomes an Obligor and a party to the
Debenture or such other Security Document satisfactory to the Facility
Agent and provides to the Facility Agent each of the condition precedent
documents required to be provided in connection therewith, no Dormant
Company shall commence to trade (whether for its own account or for that of
another) after Closing or the date it became a Group Member (if later) or
incur any further liabilities or hold or acquire (whether legally or
beneficially) any material assets or property after such date.
(t) ERISA: Each U.S. Obligor will not, and will procure that no ERISA Affiliate
will, engage in any transaction in connection with which any U.S. Obligor
or any ERISA Affiliate could be subjected to either a civil penalty
assessed pursuant to section 502(i) of ERISA, a tax imposed by section 4975
of the IRC or breach of fiduciary duty liability damages (whether directly
or indirectly).
(u) Compliance with Margin Stock Regulation: Each U.S. Obligor shall not, and
shall procure that its Subsidiaries shall not:
(i) (A) sell, carry, pledge or otherwise dispose of any margin stock
("Margin Stock") within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System of the U.S.A. as in
effect from time to time ("Regulation U"), now owned or acquired
after the date of this Agreement; or
(B) incur any Financial Indebtedness directly or indirectly secured
(within the meaning of Regulation U) by any Margin Stock;
if such transaction would cause any of the Advances or any part thereof to
be in violation of Regulation U or Regulation X of the Board of Governors
of the Federal Reserve System of the U.S.A., as in effect from time to time
("Regulation X");
(ii) use the proceeds of any Advance, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any Margin Stock or for the purpose of maintaining, reducing
or retiring any indebtedness which was originally incurred to
purchase or carry any stock that is currently a Margin Stock or for
any other purpose which might constitute any of the Facilities or
this Agreement a "purpose credit" within the meaning of Regulation U
or Regulation X. No Obligor and no agent acting on its behalf will
take or has taken any action which might cause this Agreement or the
Advances to violate Regulation U or Regulation X or any other
regulation of the Board of Governors of the Federal Reserve System.
(v) UCC filings: Each U.S. Obligor at its own expense will make and renew
promptly or request the Facility Agent to instruct appropriate United
States counsel to make and renew, and, in any event, in the case of renewal
such that the renewal is made before any UCC filing relating to any Senior
Finance Document expires, all UCC filings relating to any Senior Finance
Document reasonably required by the Facility Agent and will pay all
applicable fees.
93
(w) Intellectual Property Rights: The Company shall and shall procure that each
Group Member shall:
(i) make such registrations and pay such fees, registration Taxes and
similar amounts as are necessary to keep those Intellectual Property
Rights which are material in the context of the business of any
Group Member and which are required by it in order for it to carry
on its business in accordance with the Business Plan in force and to
record its interest in those Intellectual Property Rights;
(ii) take such steps as are necessary and commercially reasonable
(including, without limitation, the institution of appropriate legal
proceedings) to prevent third parties infringing the Material
Intellectual Property Rights and (without prejudice to paragraph (i)
above) take such other steps as are reasonably practicable to
maintain and preserve its interests in those rights;
(iii) promptly upon being required to so by the Security Agent, comply
with all proper instructions of the Security Agent which the
Security Agent is entitled to give under the Security Documents in
respect of the Intellectual Property Rights referred to in paragraph
(i) above; and
(iv) own or have licensed to it all Intellectual Property Rights which
are material in the context of its business and which are required
by it in order for it to carry on its business in accordance with
the Business Plan and that in carrying on its business it does not
infringe any Intellectual Property Rights of any third party in any
way.
(x) Clean Down: The Company shall ensure that for a continuous period of at
least 30 days during the period of 1 July to 31 October (inclusive) during
each annual Accounting Period the aggregate Deutschmark Equivalent of all
Financial Indebtedness of the Group (excluding any Financial Indebtedness
owed by a Group Member to another Group Member) other than under the GSIC
Notes or in respect of the Note Documents and foreign exchange
transactions (and without double-counting) outstanding at any time during
such period does not exceed DM 95,000,000 (or the equivalent thereof in
other currencies).
(y) Distributions: The Company shall ensure that:
(i) no agreement, instrument, Articles of Association or any other
arrangement (other than the Senior Finance Documents) shall restrict
or prevent any Group Member (excluding the Company) from declaring
or making payment of any dividend or make any other distributions of
capital or income profits (any such payment being a "Group Company
Distribution") to the maximum amount permitted by generally
applicable laws in the jurisdiction in which such Group Member is
incorporated provided that no Group Company Distribution shall be
paid to any Person in breach of Clause 19.5(o);
(ii) each Group Member (that is not an Obligor) makes Group Company
Distributions in each annual Accounting Period to the maximum extent
permitted by generally applicable laws in the jurisdiction in which
such Group Member is incorporated, to the extent not restricted by
the terms and conditions of any of the Senior Finance Documents
(including without limitation Clause 19.5(o)).
(z) Note Exchange: Notwithstanding any other provision of this Agreement
nothing herein shall be construed as prohibiting any Note Issuer, from
time to time, agreeing to the exchange of one type of Senior Note for
another type of Senior Note or the refinancing of a Senior Note
94
from the proceeds of the issuance of new Senior Notes in accordance with
the provisions of the Note Documents and taking such action as is required
to facilitate the same.
(aa) Recommendations: Notwithstanding any other provisions of this Agreement
the Company will and procure that each other Group Company shall comply
with all recommendations contained in The Chase Manhattan Bank Collateral
Review and the Engagement Letter.
(bb) German Reorganisation: The Company will and will procure that each other
Group Company shall promptly enter into all such replacement or
supplementary security in connection with the German Reorganisation as the
Facility Agent may from time to time require provided always that the
Facility Agent (acting on behalf of the Banks) given its prior written
consent to the terms of such reorganisation.
19.5 Negative undertakings
(a) Negative pledge: The Company shall not, and shall procure that no other
Group Member shall, create or permit to subsist any Encumbrances on the
whole or any part of its respective present or future business, assets or
undertaking (including its Intellectual Property Rights) other than
Permitted Encumbrances.
(b) Disposals: The Company shall not, and shall procure that no other Group
Member shall, sell, transfer, lease, lend or otherwise dispose of or enter
into any agreement under which it may be or become obliged to sell,
transfer, lease, lend or otherwise dispose of any of its shares in any
Group Member or undertaking and assets from time to time either in a
single transaction or a series of transactions otherwise than:
(i) (in the case of any Group Member which is a trading company)
disposals of trading assets in the ordinary course of trading on
arm's-length terms;
(ii) disposals of assets on arm's length terms not otherwise permitted
under this Clause 19.5(b) provided that the aggregate fair market
value of the assets disposed of during any annual Accounting Period
does not exceed $500,000 (or the equivalent thereof in other
currencies);
(iii) disposal of assets in exchange for other assets comparable or
superior as to type, value and quality;
(iv) disposals of surplus, obsolete or redundant plant and equipment, or
of land or buildings not required for the efficient operation of
its business, on arm's length terms and at fair market value;
(v) the expenditure of Cash in payment for assets or services acquired
at market value in the course of its business carried on in
compliance with the terms of the Senior Finance Documents;
(vi) the lending of Cash and payment or repayment of Cash lent in
compliance with the terms of the Senior Finance Documents;
(vii) the disposal of assets by one UK Obligor to another UK Obligor on
an arm's length basis on normal commercial terms;
(viii) (to the extent that paragraph (vii) does not apply) the disposal of
assets by one Obligor (the "disposing Obligor") to another Obligor
(the "recipient Obligor") on an arm's length basis on normal
commercial terms provided that the recipient
95
Obligor has received prior confirmation from the Facility Agent
that it is satisfied that the Encumbrance that the recipient
Obligor has given (or, as the case may be, will give promptly after
the proposed disposal pursuant to a Security Document) is such that
the Encumbrance granted thereby, should the proposed disposal be
permitted pursuant to this paragraph (viii), over the relevant
asset or assets is, or will be, at least as favourable to the
Finance Parties as the Encumbrance that the disposing Obligor
provided to the Finance Parties over such assets or assets
immediately before the proposed disposal;
(ix) the payment of dividends in compliance with the terms of the
Senior Finance Documents;
(x) the payment of amounts payable under or in respect of or in the
performance of obligations under the Note Documents to the extent
that such payment does not breach the provisions of Clause 19.5(p);
(xi) disposals of assets by sale and leaseback which are included in
paragraph (d) of the definition of Permitted Financial
Indebtedness; and
(xii) disposals of assets which were acquired after the date of this
Agreement in accordance with, and as permitted by, the terms of
this Agreement the future disposal of which was in the opinion of
the Facility Agent contemplated at the time of their acquisition.
All such sales, transfers, leases or other disposals shall (other than
intra-Group transfers to which the Facility Agent has previously consented
(such consent not to be unreasonably withheld)), be made only for a cash
consideration payment of which may not be deferred for more than three
months from the date of such sale, transfer, lease or other disposal.
Provided that, without prejudice to the foregoing, no Group Member (other
than the Company or a Group Member that is an Immediate Subsidiary) may
sell, transfer, lease, lend or otherwise dispose of or enter into any
agreement under which it may be or become obliged to sell, transfer, lease,
lend or otherwise dispose of any of its shares in any Group Member or
undertaking and assets, either in a single transaction or a series of
transactions to the Company or an Immediate Subsidiary other than as
specifically contemplated at Clause 19.5(c) or, as the case may be, Clause
19.5(o).
(c) Loans out: The Company shall not and shall procure that no other Group
Member shall, grant or make available to another Person any Financial
Indebtedness, save for:
(i) any Financial Indebtedness where trade credit is extended by any Group
Member on normal commercial terms and in the ordinary course of its
business on substantially the same terms (or terms more favourable to
it) and in similar circumstances as for trade credit extended prior to
the Closing;
(ii) loans made by one Group Member to another Group Member where:
(A) the loan is specified in the Intra-Group Loan Memorandum;
(B) (subject to paragraph (D) below) the recipient of the loan, if
made by a Group Member, is an Obligor that is not a Note Issuer;
(C) the recipient of the loan, if made by a Note Issuer, is an
Obligor;
96
(D) the recipient of the loan is the Company or, as the case may be,
Lyon Investments B.V. provided that:
(i) such loan is required to be made to the Company or, as the
case may be, Lyon Investments B.V. (having regard to the
available assets of the Company or, as the case may be,
Lyon Investments B.V. at such time) so as to enable the
Company or, as the case may be, Lyon Investments B.V. to
make payment of interest or liquidated damages as defined
in the Note Documents when due under the Note Documents
(provided that such payment would not be in breach of any
of the Senior Finance Documents and such loan is promptly,
and in any event within 7 days of it being made, so
applied); or
(ii) the loan is made to the Company to enable it to pay:
(AA) fees of an amount which is, in the context,
reasonable, payable to any of its non-executive
directors pursuant to the terms of the contracts or
other formal arrangements entered into by the Company
with such non-executives;
(BB) management fees payable to ▇▇▇▇▇▇ by the Company at
any time after 31 December 1998 pursuant to the
Management Agreement (if any) not exceeding $400,000
in aggregate in any Financial Year provided that
payment of the same could not reasonably be expected
to (were such payment made) result in a breach of any
provision of this Agreement;
(CC) general administrative expenses for headquarters;
(iii) the loan is made to the Company by each other Group Member
to enable the Company to pay amounts due to the Internal
Revenue Service in the United States on account of tax due
in respect of such Group Member's operations or the
Company's operations and payable by the Company on behalf
of such Group Member or by the Company;
(E) the recipient of the loan (made by an Obligor) is a Group Member
that is not an Obligor provided that the aggregate amount of any
such loans does not exceed in aggregate $1,000,000 (or the
equivalent in other currencies); and
(iii) (in addition to paragraphs (i) and (ii)) Financial Indebtedness in an
aggregate principal amount (for the Group as a whole) not exceeding
$3,750,000 (or the equivalent in other currencies) at any time where
the aggregate of all Financial Indebtedness in excess of $250,000 are
loans by the Company for the purchase by management of shares in the
Company and loans by ▇▇▇▇▇▇▇▇.▇▇▇ for the purchase by management of
shares in ▇▇▇▇▇▇▇▇.▇▇▇. For the avoidance of doubt the aggregate of
all loans in cash to any person may not exceed $250,000.
(d) Acquisitions: The Company shall not, and shall procure that no other Group
Member shall, acquire any asset otherwise than:
(i) in the ordinary course and for the purposes of its business;
(ii) Cash Equivalent Investments;
97
(iii) the acquisition of shares in a wholly-owned Subsidiary acquired or
established solely for the purpose of holding the assets of and/or
administering the pensions of employees of Group Members;
(iv) in accordance with the disposal provisions in Clause 19.5(b); or
(v) in addition to Clauses 19.5(d)(i) to (d)(iv) above, acquisitions made
pursuant to this paragraph (v) (each a "Permitted Acquisition") the
aggregate consideration (whether in cash or otherwise, and whether
actual or contingent) paid or payable by a Group Member in respect
thereof, or exposure thereto or in respect thereof (when taken
together with all other Permitted Acquisitions and Investments made
during the relevant annual Accounting Period) does not and will not,
in such annual Accounting Period, exceed the Permitted Amount for such
period and, in any event (when taken together with all other Permitted
Acquisitions and Investments made after the date of this Agreement),
does not and will not exceed $72,800,000 (or the equivalent in other
currencies) and in all cases provided that the Banks have given their
prior written consent to any Permitted Acquisition.
(e) Sales with recourse: Without prejudice to Clause 19.5(b) and Clause 19.5(h)
the Company shall not, and shall procure that no other Group Member shall:
(i) sell or otherwise dispose of any of their respective assets on terms
whereby such asset or assets are or may be leased to, or re-acquired
or acquired by, any Group Member; or
(ii) sell or dispose of any of its receivables (including, without
limitation to the Financial Accounts, as defined at Clause 6) on
recourse terms or enter into any factoring (or similar) arrangement
without respect thereto,
unless the aggregate book value of the assets and receivables so sold or
disposed does not exceed $500,000 per annum (or the equivalent in other
currencies).
(f) Change of business: The Company shall not, and shall procure that no other
Group Member shall, make or threaten to make any change in its business as
presently conducted, which would result in a change in the general nature
of business carried on by the Group as a whole (other than where this is
due to acquisitions permitted under Clause 19.5(d) above or disposals made
consistent with the Business Plan), or carry on any other business which is
substantial in relation to the business of the Group as conducted at the
date of this Agreement.
(g) Mergers: The Company shall not, and shall procure that no other Group
Member shall enter into any merger or consolidation or make any acquisition
of any other company, Person or business save as otherwise specifically
permitted pursuant to this Agreement.
(h) Financial Indebtedness: The Company shall not, and shall procure that no
other Group Member shall, incur or permit to subsist any Financial
Indebtedness other than Permitted Financial Indebtedness and, without
prejudice to the foregoing, the Company shall procure that:
(i) no Person including any Group Member, other than a Note
Issuer, shall guarantee or offer any financial
accommodation or financial assistance of any nature
whatsoever in respect of the Note Issuers' obligations
under the Note Documents or any of them or of any other
Financial Indebtedness incurred by them in any capacity and
further, no Group Member shall incur
98
any Financial Indebtedness which has the economic effect of
being Financial Indebtedness but which is an "off balance
sheet" arrangement; and
(ii) no Person including any Group Member, other than the GSIC
Note Issuer, shall guarantee or offer any financial
accommodation or financial assistance of any nature
whatsoever in respect of the GSIC Note Issuer's obligations
under the GSIC Note Documents or of any other Financial
Indebtedness incurred by it in any capacity.
(i) Third party guarantees: The Company shall not, and will procure that no
other Group Member shall, incur or permit to be outstanding, any Financial
Indebtedness falling within the provisions of paragraph (g) of the
definition of that term in Clause 1.2 other than any such Financial
Indebtedness:
(i) arising under the Senior Finance Documents;
(ii) arising out of the endorsement of negotiable instruments for the purpose
and in the ordinary course of carrying on the relevant entity's trade; or
(iii) arising out of guarantees in favour of a Bank to facilitate the operation
of bank accounts of such Group Members (other than the Note Issuers)
maintained with such Bank on a net balance basis for the purposes of cash
management.
Provided that, notwithstanding the foregoing, no Obligor may incur or
permit to be outstanding any Financial Indebtedness falling within
paragraph (g) of the definition of that term in Clause 1.2 to the extent
that it relates to any Financial Indebtedness incurred by or on behalf of
a Note Issuer (in any capacity), or a Group Member that is not an Obligor
which for the avoidance of doubt includes any Group Member incorporated in
South Africa.
(j) Options: Other than the exercise of an option entered into in accordance
with, and not prohibited by the Approved Hedging Programme or in respect
of the MS Group Option the Company shall not, and will procure that no
other Group Member shall, enter into or permit to subsist any arrangement
whereby any Person:
(i) has the right (whether or not exercisable only in a contingency) to
require any Group Member to purchase or otherwise acquire any
property or any interest in any property; or
(ii) has the right (whether or not exercisable only in a contingency) to
require any Group Member to sell or otherwise dispose of any
property or interest in any property.
(k) Treasury Transactions: The Company shall not, and will procure that no
other Group Member shall, enter into any interest rate, swap, cap,
ceiling, collar or floor or any currency swap, futures, foreign exchange
or commodity contract or option (whether over the counter or exchange
traded) or any similar treasury transaction, other than the Hedging
Protection Arrangements, spot foreign exchange contracts entered into in
the ordinary course of business and transactions entered into for the
hedging of actual or projected exposures arising in the ordinary course of
ordinary trading activities of the Group and in accordance with the
Approved Hedging Programme carried on, in each case, in compliance with
the terms of the Senior Finance Documents and which in any such case are
entered into with an Approved Bank.
(l) Investments: Save to the extent permitted by Clause 19.5(d) the Company
shall not, and will procure that no other Group Member shall acquire (by
subscription or otherwise) any
99
business or any shares or other securities (or any interest therein) or
otherwise establish other than the Acquired Assets and Cash Equivalent
Investments save as disclosed in the Structure Memorandum.
(m) Subsidiaries: Save to the extent permitted by Clause 19.5(d) the Company
shall not acquire any Subsidiaries which are not Subsidiaries immediately
following the Amendment Date or acquire any business after the Amendment
Date or enter into any agreement under which it may be or become bound to
acquire any Subsidiary or business unless such Subsidiary is incorporated
in the United Kingdom and each of the provisions of this Agreement and the
Finance Documents are complied with.
(n) Joint Ventures: The Company shall not, and will procure that no other
Group Member shall, without the consent of the Majority Banks, acquire any
shares, stock, securities or other interest in, or transfer any assets,
to, or lend to or guarantee the obligations of any Joint Venture, or
commit to any third party or enter into any Joint Venture or become party
to any joint venture agreement or arrangement where it has any obligation
(whether to such Joint Venture or to any other Person, and whether actual
or contingent) to lend to or guarantee or transfer assets to or otherwise
fund or incur any liability in respect of such Joint Venture or any other
Person (each such acquisition, transfer, loan, guarantee, commitment,
agreement and arrangement being an "Investment"), save that Group Members
may make, or agree to make any Investment, provided that as a result
thereof the aggregate consideration (whether in cash or otherwise, and
whether actual or contingent) paid or payable by a Group Member in respect
thereof, or exposure thereto or in respect thereof (when taken together
with all other Investments made during the relevant annual Accounting
Period and Permitted Acquisitions in such annual Accounting Period) does
not and will not, in such annual Accounting Period, exceed the Permitted
Amount for such period and, in any event (when taken together with all
other Investments made and Permitted Acquisitions after the date of this
Agreement), does not and will not exceed $72,800,000 (or the equivalent in
other currencies).
(o) Distributions: The Company shall not, and shall procure that Lyon
Investments B.V. and each of the Company's and Lyon Investments B.V.'s
respective immediate Subsidiaries shall not, at any time declare or make
payment of any dividend or make any other distribution of capital or
income or profits or payment of any fees, management charges or other
amounts whatsoever to any of its members, make any other redemption or
purchase of its own shares or create or issue or reissue any loan or
debenture stock (any such payment being a "Distribution") to its members
or, as the case may be, the Company or Lyon Investments B.V. other than:
(i) to the extent required (having regard to the available assets of the
Company or as the case may be, Lyon Investments B.V. at such time)
so as to enable the Company or, as the case may be, Lyon Investments
B.V. to make payment of interest (including liquidated damages (as
defined in the Note Documents) when due under the Note Documents or,
in the case of the Company only, this Agreement (provided that each
such payment would not be in breach of any of the Senior Finance
Documents);
(ii) to enable the Company to pay fees of an amount which is, in the
context, reasonable, payable to any of its non-executive directors
pursuant to the terms of the contracts or other formal arrangements
entered into by the Company with such non-executive directors;
(iii) to enable the Company to pay management fees payable to ▇▇▇▇▇▇ by
the Company pursuant to the Management Agreement (if any) not
exceeding $400,000 in aggregate in any Financial Year after 31
December 1998 provided that payment of
100
the same could not reasonably (were such payment made) result in a
breach of any provision of this Agreement;
(iv) to enable the Company to pay the Sponsors an amount equal to all
reasonable out of pocket expenses and any Value Added Tax thereon
incurred by the Sponsors or, with the prior written consent of the
Facility Agent, their Affiliates in connection with the negotiation,
preparation, execution and monitoring of the Subordinated Finance
Documents and any documents entered into in connection therewith
provided always that for the avoidance of doubt no legal fees
incurred by the Sponsors shall be included within this sub-clause
(iv).
(v) payments required to be made to the Company by each other Group
Member to enable the Company to pay amounts due to the Internal
Revenue Service in the United States on account of tax due in
respect of such Group Member's operations or the Company's
operations and payable by the Company on behalf of such Group Member
or by the Company; and
(vi) so as to enable the Company to remit monies to Group Members
incorporated in The Republic of South Africa in order to enable
those companies to purchase all of the minority shareholdings in
such Group Member as at the date of this Agreement for an amount not
exceeding $2,000,000 less any amounts loaned to Group Members
incorporated in South Africa for such purpose as contemplated by
Clause 19.5(c)(ii)(C) at Closing (or within 30 days thereof).
The Company shall procure that no Group Member may make any payment or
take any action on behalf of the Company or any other Group Member or
enter into any arrangement on behalf of the Company or any other Group
Member if the Company or any other Group Member, is restricted from making
such payment, taking such action or entering into such arrangement
pursuant to the provisions hereof.
(p) Payments - Note Documents:
(i) None of the Note Issuers shall:
(A) repay, prepay, redeem or repurchase all or any (or any part) of
the Senior Notes (other than to the extent the same is required
in order to effect an exchange or refinancing of the Senior
Notes as permitted by Clause 19.4(aa)); or
unless such variation, novation, amendment or waiver (when taken together
with any other variation, novation, amendment or waiver) is of a purely
technical or administrative nature or has previously been agreed to in
writing by the Facility Agent in respect of the Senior Finance Documents,
in accordance with the provisions of this Agreement).
(q) Administration and winding-up orders etc.: The Company shall not, and
shall procure that no other Group Member shall, make or join in making any
application to any court for an administration, winding-up, receivership
or other similar order to be made in relation to any Group Member, other
than in respect of a solvent winding-up or dissolution of a Group Member
which is not an Obligor.
(r) Arm's-length terms: The Company shall not, and shall procure that no other
Group Member shall, enter into any material transaction with any Person
otherwise than on arms-length terms and for full market value save for
inter-company loans permitted pursuant to this Clause 19.5.
101
(s) Bank Accounts: The Company shall not, and shall procure that no other
Group Member shall, open or maintain any account with any branch of any
bank or other financial institution providing like services (other than an
account maintained pursuant to the requirements of the Senior Finance
Documents) unless:-
(i) such branch and bank or financial institution shall be an Approved
Bank save that to the extent not otherwise prohibited under this
Agreement, a Group Member that is not an Obligor or a Material Group
Member may be entitled to open or maintain an account with a bank or
branch or financial institution which is not an Approved Bank (an
"Alternative Bank") provided that the Alternative Bank does not have
an Encumbrance (other than a Permitted Encumbrance) over such account
or any other assets of any Group Member in respect of such account
and any liabilities of the relevant Group Member relating thereto; or
(ii) such account was maintained by such Obligor or, as the case may be,
such Material Group Member prior to the date of this Agreement and
(within 30 days of the date of this Agreement) such Obligor or, as
the case may be, such Material Group Member has put in place
arrangements satisfactory to the Facility Agent whereby the amount
standing to the credit of such account is transferred (without any
specific instructions being given in respect thereof on a regular
basis) to an account held by an Approved Bank at the end of each
Business Day.
(t) Real Property: Save to the extent that the aggregate amount applied by the
Group for such purpose in any annual Accounting Period does not exceed
$250,000 (or the equivalent thereof in other currencies) the Company shall
not, and shall procure that no other Group Member shall develop or
redevelop all or any part of any real property owned by it or in which it
has a freehold or leasehold (or any other) interest, save for its own
occupation and use and in each case where the cost of so doing is within
the Capital Expenditure limits set out in Clause 19.5(u) above.
(u) Share Capital: The Company will not:
(i) redeem, repurchase, retire, return,repay or cancel any of its share
capital, or resolve to do so save that the Company shall be entitled
to redeem C Common Stock for an amount not exceeding
(Pounds)2,100,000 of its share capital provided by DC Cycle LLC in
connection with the Diamond Back Acquisition provided that an amount
equal to the amount of its share capital to be redeemed has been
irrevocably credited to the Company's account in cash by or on
behalf of Perseus Cycle LLC so as to enable Perseus Cycle LLC to
subscribe for an identical number of shares of C Common Stock of the
Company within 30 days of the completion of the Diamond Back
Acquisition and that no Event of Default has occurred and is
outstanding or would result from such redemption; or
(ii) redeem, repurchase, retire, return or repay any of its share
capital, or resolve to do so save that the Company shall be entitled
to redeem Class C Common Stock for an amount not exceeding
(Pounds)8,400,000 of its share capital provided by DC Cycle LLC in
connection with the Diamond Back Acquisition provided that an amount
equal to the amount of its share capital to be redeemed has been
irrevocably credited to the Company's account in cash by or on
behalf of Derby Finance Sarl so as to enable Derby Finance Sarl to
subscribe for an identical number of shares of Class C Common Stock
of the Company within 180 days of the completion of the Diamond Back
Acquisition and that no Event of Default has occurred and is
outstanding or would result from such redemption;
102
(iii) save as contemplated by the Recapitalisation Documents (as at 12 May
1998) and the Series D Preferred Shares Purchase Agreement issue any
new share capital or grant any option to any Person to subscribe for
any shares in its capital other than another Group Member (provided
that if the Security Agent already has security over the shares of
the issuer of any such new shares then the Company will procure that
the Group Member to whom such new shares are issued promptly
provides security over such shares to the Security Agent to the
reasonable satisfaction of the Security Agent).
Provided that, notwithstanding the foregoing, the Company may provided that
no Event of Default has occurred and is outstanding or would result as a
consequence of the following:
(a) issue (x) ordinary share capital of a type similar to any class of
its shares in issue as at completion of the Diamond Back Acquisition
which is subscribed for in full in cash, or as contemplated in the
GSIC Note Documents including, for the avoidance of doubt, Clause 4
of the Stockholders' Agreement (as at the date of the completion of
the Diamond Back Acquisition) provided such issuance does not give
rise to any breach of the Senior Notes and is not Disqualified Stock
as defined in the Senior Notes in respect of which no dividend or
distribution may be declared, made or paid unless to do so would not
result in a breach of this Agreement and where such issue would not
result in a breach of Clause 21.1(y) or any other provision of this
Agreement and (y) classes of shares other than ordinary shares
provided that at the time of their issue and subsequently, their
issue would not (or could not, if any rights attached thereto were to
be exercised) breach Clause 21.1(y) hereof or any other provision of
this Agreement. For the avoidance of doubt, the Company shall not
issue and shall procure that no other Group Member shall issue
Excluded Share Capital or share capital which constitutes or may be
converted into Financial Indebtedness;
(b) issue shares to employees pursuant to the employee share ownership
scheme in existence as at the date of this Agreement or, if later, as
at the date of the completion of the Diamond Back Acquisition
(details of which have been provided to the Facility Agent provided
that the exercise of any rights under such a scheme does not give
rise to an Event of Default) and any other similar or replacement
scheme to which the Facility Agent has given its prior written
approval;
(c) as contemplated in connection with the MS Group Option; and
(d) take all such actions as are permitted pursuant to 19.5(aa).
(v) Prepayment of other Financial Indebtedness: The Company will not, and will
procure that no Group Member will prepay any Financial Indebtedness earlier
than its original scheduled maturity which, in the case of the Senior
Notes' is approximately May 2008 (i) other than to the Banks under the
Senior Finance Documents in accordance with the provisions of this
Agreement; (ii) to an Obligor; or (iii) to another Group Member not
exceeding $100,000 in aggregate in any Financial Year.
(w) Surplus Cash: Neither the Company nor any of the Immediate Subsidiaries
will, at any time, hold any Cash or Cash Equivalent Investments greater
than required for its projected cashflow requirements for the next 30 days
(the amount of any such excess being the "Cash Balance") and the Company
shall, promptly upon being aware of such a situation procure that such Cash
Balance shall be lent by itself or, as the case may be, the relevant
Immediate Subsidiary to an account situated in England, Wales or Ireland,
provided that such account and any credit balance standing to the credit
thereof is subject to a Debenture or, as the case
103
may be, an Irish Debenture. save that, notwithstanding the foregoing, the
Company may hold Cash that has been remitted to it in accordance with
Clause 19.5(o) and apply the same in accordance therewith.
(x) Redemption: RIC shall not redeem or agree to redeem all or any of its
shares, including, without limitation any of the RIC Preferred Shares nor
permit the holder of any of the RIC Preferred Shares to redeem or attempt
to redeem all or any of the RIC Preferred Shares without,0 in each case,
having obtained the Facility Agent's prior approval (acting on the
instructions of each of the Banks).
(y) Payment - GSIC Notes: The Company shall not repay, redeem, cancel or
repurchase the GSIC Notes or make any other payment or distribution in cash
whatsoever in respect of the GSIC Notes and the Company shall procure that
no other Group Member shall make any payment or take any action on behalf
of the Company to or enter into any such arrangement on behalf of the
Company save that the Company shall be entitled to redeem or, as the case
may be, cancel GSIC Notes (the "Transferred GSIC Notes") purchased by a
Relevant Purchaser either;
(1) pursuant to Clause 2 of the Stockholders' Agreement (as at the date of
the completion of the Diamond Back Acquisition); or
(2) pursuant to Clause 3 of the Stockholders' Agreement (as at the date of
the completion of the Diamond Back Acquisition); and
(3) pursuant to Clause 4 of the Stockholders' Agreement (as at the date of
the completion of the Diamond Back Acquisition) to a Relevant
Purchaser.
Provided that in each case:
(A) the Transferred GSIC Notes are delivered to the Company by the
holder of the Transferred GSIC Notes for and on behalf of the
Relevant Purchaser for cancellation whereupon the Company shall
immediately cancel such Transferred GSIC Notes and issue to the
Relevant Purchaser, shares in the Company in an aggregate amount
equal to the aggregate principal amount (together with accrued
but unpaid interest thereon) of such Transferred GSIC Notes; or
(B) an amount in cash equal to the aggregate principal amount
(together with accrued but unpaid interest thereon) of the
Transferred GSIC Notes has been irrevocably credited to the
Company's account by or on behalf of the Relevant Purchaser so as
to enable the Relevant Purchaser to subscribe, simultaneously
with such redemption, for shares in the Company in an aggregate
amount equal to the aggregate principal amount (together with
accrued but unpaid interest thereon) of the Transferred GSIC
Notes;
And further provided in each case that all the following
conditions are met or fulfilled:
(i) no Event of Default has occurred which is still outstanding
or arises as a consequence of the foregoing;
(ii) the holder of the Transferred GSIC Notes has confirmed to
the Relevant Purchaser and the Company that any liability
of the GSIC Note Issuer to the holder of the GSIC Notes
under, or in respect of,
104
the GSIC Note Documents in respect of the Transferred GSIC
Notes has been extinguished;
(iii) none of the shares issued by the Company pursuant to the
foregoing shall constitute Excluded Share Capital or
Disqualification Stock (as the latter term is defined in
the Note Documents), or which constitute or may be
converted into Financial Indebtedness.
(iv) that as a consequence of the steps set out in (A) and (B)
above, the aggregate amount of subordinated debt pursuant
to the GSIC Note Documents and equity shall not be for an
aggregate amount less than the aggregate amount of
subordinated debt pursuant to the GSIC Note Documents and
equity immediately prior to the transactions referred to at
(A) and (B) above.
For the avoidance of doubt, no other payment nor distribution of any kind
or character may be made in respect of the GSIC Notes other than the
issuance of further GSIC Notes in accordance with clause 2.3.2 of the GSIC
Loan (as at the date of the completion of the Diamond Back Acquisition)
(provided that no Event of Default is outstanding or occurs as a
consequence thereof) or, as the case may be, the accrual of interest in
accordance with GSIC Side Letter (provided that such accrued interest shall
not be added to the principal amount of the GSIC Notes).
(z) GSIC Notes: the Company shall not make any issuance of GSIC Notes (whether
in respect of or in lieu of interest on any GSIC Notes then outstanding or
otherwise) that results in or would, upon the passage of time or giving of
notice, result in an Event of Default under the Note Indentures.
(aa) ▇▇▇▇▇▇▇▇.▇▇▇: Notwithstanding any other provision of this Agreement the
Company shall:
(i) not dispose of any of its shares in ▇▇▇▇▇▇▇▇.▇▇▇ without the prior
written consent of the Facility Agent (acting in accordance with the
instructions of the Super Majority Banks) and on such terms and
conditions as the Facility Agent shall require;
and the Company shall procure that:
(i) ▇▇▇▇▇▇▇▇.▇▇▇ shall not issue shares other than in accordance with the
▇▇▇▇▇▇▇▇.▇▇▇ Stock Option Plan;
(ii) ▇▇▇▇▇▇▇▇.▇▇▇ shall not redeem, repurchase, retire, return or repay
any of its share capital or resolve to do so; and
(iii) ▇▇▇▇▇▇▇▇.▇▇▇ shall not dispose of any Intellectual Property Rights
in which it has legal and beneficial title or otherwise uses or
requires in relation to its business without the prior written
consent of the Facility Agent ( acting in accordance with the
instructions of the Super Majority Banks) and on such terms and
conditions as the Facility Agent shall require. Any other assets of
▇▇▇▇▇▇▇▇.▇▇▇ may be disposed of in accordance with Clause 19.5(b).
105
PART 7
20. FINANCIAL UNDERTAKINGS
(a) the Consolidated Adjusted EBITDA for any three month Accounting Period
ending on a date specified in the table below shall not be less than the
amount set opposite such date in the table below:
-------------------------------------------------------------------
Date Amount (DM)
-------------------------------------------------------------------
31 December 2000 22,200,000
-------------------------------------------------------------------
1 April 2001 13,200,000
-------------------------------------------------------------------
1 July 2001 25,300,000
-------------------------------------------------------------------
30 September 2001 (12,000,000)
-------------------------------------------------------------------
31 December 2001 15,100,000
-------------------------------------------------------------------
31 March 2002 18,600,000
-------------------------------------------------------------------
30 June 2002 31,800,000
-------------------------------------------------------------------
(b) The aggregate amount of Financial Indebtedness of the Group (excluding, the
GSIC Notes, any amounts due under the Note Documents, and any Financial
Indebtedness described at paragraph (h) of the definition "Financial
Indebtedness" (and without double-counting)) shall not, during any period
listed in Column 1 below exceed the amount specified opposite such period
in Column 2 below and, for the purposes of any such determination, any
Financial Indebtedness not denominated in DM shall be converted to DM by
reference to the Facility Agent's spot rate of exchange for such currency
and DM at or about 10:00a.m. on the date determination is made
=========================================================================
Column 1 Column 2 (DM)
-------------------------------------------------------------------------
1 November 2000 - 3 December 2000 157,200,000
-------------------------------------------------------------------------
4-31 December 2000 174,600,000
-------------------------------------------------------------------------
1 January 2001 -4 February 2001 174,700,000
-------------------------------------------------------------------------
5 February 2001 - 4 March 2001 199,700,000
-------------------------------------------------------------------------
5 March 2001 - 1 April 2001 199,700,000
-------------------------------------------------------------------------
2 April 2001 - 6 May 2001 201,000,000
-------------------------------------------------------------------------
7 May 2001 - 3 June 2001 201,000,000
-------------------------------------------------------------------------
4 June 2001 - 1 July 2001 198,300,000
-------------------------------------------------------------------------
2 July 2001 - 5 August 2001 131,300,000
-------------------------------------------------------------------------
6 August 2001 - 2 September 2001 90,000,000
-------------------------------------------------------------------------
3 September 2001 - 30 September 2001 89,100,000
-------------------------------------------------------------------------
1 October 2001 - 4 November 2001 89,200,000
-------------------------------------------------------------------------
5 November 2001 - 2 December 2001 88,300,000
-------------------------------------------------------------------------
3 December 2001 - 31 December 2001 98,100,000
-------------------------------------------------------------------------
1 January 2002 - 3 February 2002 188,200,000
-------------------------------------------------------------------------
4 February 2002 - 3 March 2002 209,355,403
-------------------------------------------------------------------------
4 March 2002 - 31 March 2002 209,355,403
-------------------------------------------------------------------------
1 April 2002 - 5 May 2002 209,355,403
-------------------------------------------------------------------------
6 May 2002 - 2 June 2002 209,355,403
-------------------------------------------------------------------------
3 June 2002 - 30 June 2002 209,355,403
=========================================================================
106
(c) the Consolidated Adjusted Cashflow for any three month period ending on a
date specified in the table below shall not be less than the amount set
opposite such date:
=========================================================================
Column 1 Amount (DM)
-------------------------------------------------------------------------
3 December 2000 (82,800,000)
-------------------------------------------------------------------------
31 December 2000 (63,900,000)
-------------------------------------------------------------------------
4 February 2001 (62,000,000)
-------------------------------------------------------------------------
4 March 2001 (56,100,000)
-------------------------------------------------------------------------
1 April 2001 (81,300,000)
-------------------------------------------------------------------------
6 May 2001 (7,300,000)
-------------------------------------------------------------------------
3 June 2001 37,300,000
-------------------------------------------------------------------------
1 July 2001 60,700,000
-------------------------------------------------------------------------
5 August 2001 74,300,000
-------------------------------------------------------------------------
2 September 2001 67,400,000
-------------------------------------------------------------------------
30 September 2001 38,600,000
-------------------------------------------------------------------------
4 November 2001 2,700,000
-------------------------------------------------------------------------
2 December 2001 (13,100,000)
-------------------------------------------------------------------------
31 December 2001 (5,400,000)
-------------------------------------------------------------------------
3 February 2002 (79,700,000)
-------------------------------------------------------------------------
3 March 2002 (134,500,000)
-------------------------------------------------------------------------
31 March 2002 (136,000,000)
-------------------------------------------------------------------------
5 May 2002 (28,200,000)
-------------------------------------------------------------------------
2 June 2002 41,100,000
-------------------------------------------------------------------------
30 June 2002 68,000,000
=========================================================================
107
(d) the Capital Expenditure for any period specified in the table below shall
not exceed the amount set opposite such date:
=========================================================================
Column 1 Amount (DM)
-------------------------------------------------------------------------
12 months to 31 December 2000 21,100,000
-------------------------------------------------------------------------
3 months to 31 March 2001 3,600,000
-------------------------------------------------------------------------
6 months to 30 June 2001 7,900,000
-------------------------------------------------------------------------
9 months to 30 September 2001 17,300,000
-------------------------------------------------------------------------
12 months to 31 December 2001 21,400,000
-------------------------------------------------------------------------
3 months to 31 March 2002 4,300,000
-------------------------------------------------------------------------
6 months to 30 June 2002 9,500,000
=========================================================================
All numbers in brackets indicate minus numbers.
108
PART 8
21. EVENTS OF DEFAULT
21.1 The Events of Default
Each of the events listed in this Clause 21, provided the same is continuing, is
an Event of Default, irrespective of whether it occurs as a result of any action
taken, or not taken, by any Person, including the Company or any other Group
Member.
(a) Failure to pay: The Company or any other Group Member fails to pay when
due any amount payable by it under any Finance Document in the currency in
which the same is expressed to be payable (other than where such failure to
pay results solely from an error in relation to the transmission of the
relevant payment and such payment is actually received within 3 Business
Days of its due date).
(b) Breach of undertaking: The Company or any Group Member fails to comply
with any of the provisions of Clauses 19 or 20 of this Agreement or Clause
4.2 of the Amendment and Restatement Agreement.
(c) Breach of other undertakings: Other than the provisions referred to in
paragraphs (a) and (b) above, any of the Obligors fails to comply with any
provision of this Agreement and/or any provision of any other Finance
Document (irrespective of whether or not such provision is valid and
enforceable against such Person) and, (other than the provisions referred
to in paragraphs (a) and (b) above) if such failure is in the reasonable
opinion of the Majority Banks capable of remedy within such period, such
Obligor shall have failed to remedy such failure within 21 days after the
earlier of the relevant Obligor becoming aware of such default and receipt
by the relevant Obligor of written notice from the Facility Agent to the
Company requiring the failure to be remedied.
(d) Representations and warranties: Any representation or warranty or
statement made, or deemed to be made, or repeated by or on behalf of the
Company or any Group Member in, or in connection with, any Finance Document
or any notice, certificate, statement delivered by it in connection with
any Finance Document is, or proves to have been, untrue or misleading in
any material way or material respect when made or deemed to be repeated or
supplied in accordance with or in respect of any Finance Document by
reference to the facts and circumstances then subsisting and, if the
circumstances causing such misrepresentation are, in the reasonable opinion
of the Majority Banks, capable of remedy within such period, such Group
Member shall have failed to remedy such circumstances within 14 days after
the earlier of the relevant Group Member becoming aware of such
misrepresentation and receipt by the Company of written notice from the
Facility Agent to such Group Member requiring the circumstances causing
such misrepresentation to be remedied such that if the relevant
representation was repeated by each such Group Member at the end of such 14
day period, such representation would, at such time, be true and correct in
all material respects.
(e) Cross-default:
(i) Any Financial Indebtedness under any of the Senior Notes, any other
Note Document or the GSIC Notes or other GSIC Note Documents is not
paid when due, or becomes (or becomes capable of being declared) due
and payable or due for redemption before its originally scheduled
maturity date or are placed on demand, in each such case by reason
of the occurrence of an event of default (howsoever characterised)
or any event having the same effect, or any such Financial
Indebtedness which is payable on demand shall have been demanded; or
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(ii) any Financial Indebtedness of one or more Group Members (taken
together if more than one) aggregating $1,000,000 (or the equivalent
in other currencies) or more at any one time outstanding is not paid
when due, becomes (or becomes capable of being declared) due and
payable or due for redemption before its originally scheduled
maturity date or are placed on demand, in each such case by reason
of the occurrence of an event of default (howsoever characterised)
or any event having the same effect, or any such Financial
Indebtedness which is payable on demand shall have been demanded; or
(iii) any Encumbrances over assets of any one or more Group Members (taken
together if more than one) securing an aggregate of $100,000 (or its
equivalent in other currencies) or more become enforceable and steps
are taken to enforce the same.
(f) Repudiation: The Company or any Group Member rescinds or repudiates (or
purports to rescind or repudiate) any Transaction Document (excluding the
Service Contracts) to which it is expressed to be a party.
(g) Distress: Any distress, execution, attachment, registration or other
process affects any assets of the Group or any of the Group Members having
an aggregate value of $100,000 (or the equivalent thereof in other
currencies) save where (i) the relevant Group Member is, in good faith,
contesting the distress, execution, attachment, sequestration or other
process by appropriate proceedings diligently pursued and (ii) the Majority
Banks acting reasonably are satisfied that the ability of any Obligor to
comply with its obligations under the Finance Documents to which it is a
party will not be materially and adversely affected whilst such distress,
execution, attachment, diligence or other process is being so contested.
(h) Invalidity: Any of the Finance Documents shall cease to be in full force
and effect (except as a result of a specific release in writing by the
Banks) or shall cease to constitute the legal, valid and binding obligation
of any Obligor party to it or, in the case of any Security Document, fail
to provide effective perfected security in favour of the of the Security
Agent and the Banks over the assets over which the Encumbrance is intended
to be given by that Security Document, in any such case concerning the
Company or an Obligor in a manner and to an extent reasonably considered by
the Majority Banks to be materially adverse to their interests under the
Senior Finance Documents or in any such case concerning any Obligor in a
manner and to an extent reasonably considered by the Majority Banks to have
a Material Adverse Effect or it shall be unlawful for any Obligor to
perform any of its material obligations under any of the Finance Documents.
(i) Unable to pay debts: The Company or any Group Member:
(i) suspends payment of its debt or is unable or admits its inability to
pay its debts as they fall due or is deemed unable to pay its debts
within the meanings contained in Section 123(1) of the Insolvency
Act 1986 (construed as if the figure stated at Section 123(1)(a) was
$100,000 or is determined pursuant to Section 123(2) Insolvency Act
that it is unable to pay its debts (as that Section may be amended);
or
(ii) commences negotiations with its creditors generally with a view to
the general readjustment or rescheduling of all or part of its
indebtedness which it would otherwise not be able to pay as it falls
due; or
(iii) proposes or enters into any composition or other arrangement for the
benefit of its creditors generally or any class of creditors.
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(j) Insolvency: Any Group Member is declared or deemed pursuant to any
applicable legislation to be insolvent or is or is deemed pursuant to any
applicable legislation to be unable, or admits in writing its inability, to
pay its debts as they fall due or stops or threatens to stop payment of its
debts as they fall due or stops or threatens to stop payment of its debts
generally or becomes insolvent within the terms of any applicable law
Provided that, for the purposes of this paragraph (j) in determining
whether a Group Member is to be deemed to be insolvent or unable to pay its
debts as they fall due under Section 123 Insolvency Act (i) the figure
stated at Section 123(1)(a) shall be deemed to be $100,000 and (ii) Section
123(2) shall only apply if such a determination has been made in accordance
with the terms of that Section.
(k) Liquidation: Any order is made or resolution passed or any steps are
initiated or are consented to by any Group Member or otherwise commenced by
any Person or any petition shall be presented (and not, where that Person
is unconnected with that Group Member save for being a creditor of such
Group Member, discharged or stayed within fourteen days in the case of both
legal proceedings and such petition) for the suspension of payments
generally or for any process giving protection against creditors or for the
dissolution, termination of existence, liquidation, winding up, bankruptcy
or other like process of any Group Member (other than a solvent
liquidation, dissolution or winding up of a Group Member (not being an
Obligor) or a liquidation, dissolution or winding up of a Group Member
arising out of the German Reorganisation (provided that the Company and
each Group Member has complied with Clause 19.4(bb))that has in any such
case been previously approved by the Facility Agent in writing).
(l) Administration: An application is made to the Court for an administration
order under the Insolvency ▇▇▇ ▇▇▇▇ with respect of the Company or any
other Group Member or an effective resolution is passed by the directors or
shareholders of the Company or any other Group Member for such an
application to be made or an administrator or administrative receiver is
appointed in respect of any Group Member.
(m) U.S. Bankruptcy: Any Group Member shall commence a voluntary case under
the U.S. Bankruptcy Code, or an involuntary case is commenced under the
U.S. Bankruptcy Code against that Group Member and the petition is not
controverted within 10 days and is not dismissed within 30 days, after
commencement of the case, or a custodian, receiver, trustee or similar
officer is appointed for, or takes charge of, all or substantially all of
the property of that Group Member.
(n) Receiver: A liquidator or provisional liquidator (save as excepted by the
proviso to paragraph (k) above) or, trustee, receiver, administrative
receiver, manager (being a Person acting on behalf of all or any creditors)
or similar officer is appointed in respect of any Group Member or in
respect of (or takes possession of) all or any part of its assets with an
aggregate value in excess of $100,000 or more (or the equivalent in other
currencies).
(o) Analogous Acts: Any event occurs or proceeding is taken with respect to the
Company or any other Group Member in any jurisdiction to which it is
subject which has an effect equivalent or substantially similar to any of
the events mentioned in paragraphs (k) to (n) inclusive above.
(p) Unlawfulness: It becomes unlawful at any time for any Group Member to
perform all or any of its obligations under any Finance Document to which
it is a party.
(q) Qualification of Financial Accounts: The Auditors qualify their report on
the audited consolidated accounts of the Group (taken as a whole) in a
manner which is material in the context of the Finance Documents and the
transactions contemplated thereby.
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(r) Cessation: Any Group Member ceases to carry on all or any material part of
its business (save in consequence of any reorganisation, reconstruction or
amalgamation permitted under this Agreement and save as may result from any
disposal of assets permitted by the terms of this Agreement or any solvent
liquidation, dissolution or winding-up of any Group Member (not being an
Obligor)).
(s) Ownership of Obligors: Any Group Member shall cease to own, directly or
indirectly, at least the percentage ownership interest in any Group Member
owned by it immediately following the Closing or immediately following
implementation of the steps recorded in the Structure Memorandum contained
in the Reports or (if later) the date on which the relevant entity became a
Group Member unless such Group Member was a Dormant Subsidiary at the
Closing and has remained a Dormant Subsidiary until such time as it is
wound-up on a solvent basis in accordance with paragraph (k) above.
(t) Proceedings: There is current or pending at the Closing or there shall
occur thereafter any litigation, arbitration, administrative, regulatory or
other proceedings or enquiry (including, without limitation, any such by
the Office of Fair Trading, the Monopolies and Mergers Commission, the
Department of Trade and Industry, or any equivalent body in any other
jurisdiction or the European Commission or any division of any thereof or
authority deriving power from any thereof) concerning or arising in
consequence of any of the Transaction Documents and/or the implementation
of any matter or transaction provided for in the Transaction Documents
(excluding, in each case, the Service Contracts) or otherwise.
(u) Recapitalisation Warranties: Any warranty made by any Person in any of the
Recapitalisation Documents is incorrect in a material respect, any breach
by any Person of its obligations under any of the Recapitalisation
Documents occurs or any other claim is made by any Group Member against any
Person under any of the Recapitalisation Documents in each case, which (in
aggregate) results in or might reasonably be expected to result in breach
of Clause 20.
(v) Intercreditor Agreements, and Other Documents:
(i) Any Group Member, fails to comply with any of the material
provisions of, or its obligations under, the Intercreditor
Agreements; or
(ii) the Intercreditor Agreements are not, or cease to be, binding on or
enforceable against any Group Member expressed to be a party
thereto, the Note Trustee, the Noteholders, the GSIC Noteholders or
any permitted successors, transferees or assignees agreed by the
Facility Agent (as the case may be) or shall otherwise not be
effective;
(iii) any event, howsoever described, constituting default under the
Recapitalisation Documents shall occur thereunder and be continuing
unwaived; or
(iv) any event, however described, constituting default under the Diamond
Back Acquisition Agreement shall occur thereunder and be continuing.
(w) ERISA: Any U.S. Obligor or any Subsidiary or any ERISA Affiliate has
incurred or is likely to incur a material liability to or on account of a
Multiemployer Plan or employee pension benefit plan (as defined in Section
3(2) of ERISA) under Section 409, 502(i), 502(1), 4062, 4063, 4064, 4201 or
4204 of ERISA or Section 4971 or 4975 of the Code, or any U.S. Obligor or
any Subsidiary has incurred or is likely to incur material liabilities
pursuant to one or more employee welfare benefit plans (as defined in
Section 3(1) of ERISA) which provide benefits to retired employees (other
than as required by Section 601 of ERISA).
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(x) Expropriation: The authority or ability of any Material Group Member or
Obligor to conduct its business is wholly or substantially curtailed by any
seizure, expropriation, intervention or other action by or on behalf of any
governmental, regulatory or other authority.
(y) Control:
(i) Without the prior written consent of all the Banks, any single
Person or group of Persons acting in concert (as defined in the City
Code on Takeovers and Mergers) acquires control (as defined in
Section 416 of the Income and Corporation Taxes Act 1988) of the
Company; or
(ii) ▇▇▇▇▇▇ and Perseus cease collectively to hold or either or both of
them (or DC Cycle LLC and/or Perseus Cycle LLC) enters into any
arrangement or agreement, the effect of which is that ▇▇▇▇▇▇ and
Perseus will cease to hold (in aggregate) the beneficial interest in
at least 51 per cent of the voting rights of shares in the Company,
or cease collectively to hold the largest economic interest in the
Company of all the shareholders in the Company, or cease together to
be able nominate the majority of the Board of Directors of the
Company; or
(iii) ▇▇▇▇▇▇ Capital Partners ceases to be the General Partner of ▇▇▇▇▇▇
and/or to manage ▇▇▇▇▇▇ or Perseus Management L.L.C. ceases to be
the managing member of Perseus; or
(iv) the Persons holding the majority of the voting share capital of the
Company at the date of this Agreement cease to hold the majority of
its voting share capital and one or more other Persons (if more than
one acting in concert) own the majority of the voting share capital
of the Company, and for the purposes of this paragraph (iv) "acting
in concert" means acting together by agreement; or
(v) Without the prior written consent of all the Banks, there is a
Change of Control as such expression is defined in the GSIC Note
Documents and the Note Documents.
(z) Auditor's Confirmations: Any confirmation required to be delivered
pursuant to Clause 19.1(a)(v) is not delivered in accordance therewith or
it is delivered but does not confirm that the Borrower Base Summary
referred to therein is, in all material respects accurate or does not
confirm that the Company has in place satisfactory methods and procedures
for obtaining and collating the information required in order for it to be
able to compile accurate Borrowing Base Summaries for the purposes of this
Agreement having regard, where appropriate, to each of the specific
requirements of this Agreement relating thereto including, without
limitation, Clause 6.
(aa) Adjusted Borrowing Base: If at any time, the aggregate Borrowing Base of
the Borrowers is less than the aggregate Deutschmark Amount of the
Ancillary Facilities, (other than that portion of Ancillary Facilities
which are solely available for foreign exchange transactions), Advances and
Outstanding Standby L/C's at such time, and such breach is not remedied
within ten Business Days of the delivery to the Facility Agent, in
accordance with this Agreement, of the Borrowing Base Summary which
identified such breach.
(bb) Material Adverse Effect: Any event or series of events whether related or
not occurs which has a Material Adverse Effect.
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(cc) GSIC Notes. The Company makes any issuance of GSIC Notes (whether in
respect or in lieu of interest on any GSIC Notes then outstanding or
otherwise) that results in or would, upon the passage of time or giving of
notice, result in an Event of Default under the Note Indentures.
21.2 Acceleration
Upon the occurrence of an Event of Default and at any time thereafter while the
same is continuing unremedied or unwaived in accordance with this Agreement, the
Facility Agent may, and shall if so directed by the Majority Banks, by notice to
the Company:
(a) declare that an Event of Default has occurred; and/or
(b) declare that the Revolving Commitments and the Standby L/C Commitments
shall be cancelled forthwith, whereupon the same shall be so cancelled and
all fees payable in relation to the Revolving Commitments and the Standby
L/C Commitments shall become immediately due and payable; and/or
(c) declare that the Advances to some or all of the Borrowers (as specified in
such notice), together with all interest accrued on those Advances and all
other amounts payable by some or all of the Obligors (as specified in such
notice) or any of them under the Senior Finance Documents from time to
time, shall thenceforth be repayable on demand being made by the Facility
Agent (and in the event of any such demand those Advances, such interest
and such other amounts shall be immediately due and payable); and/or
(d) declare some or all of the Advances to some or all of the Borrowers (as
specified in such notice) immediately due and payable, whereupon they shall
become immediately due and payable together with all interest accrued on
those Advances and all other amounts payable by those Borrowers under the
Senior Finance Document; and/or
(e) require some or all of the Borrowers to pay in cash (whereupon each such
Borrower shall be obliged to pay) to the Facility Agent for the account of
each Bank for credit to the Standby L/C Account on its books relating to
each Standby L/C issued at the request of any such Borrower and which is
then outstanding an amount equal to the portion of that Standby L/C for
which that Bank is liable.
(f) Notwithstanding anything in this Clause 21.2 to the contrary, if an Event
of Default arising from filing by or against the Company or any proceeding
in respect of the Company under the United States Bankruptcy Code, all sums
owing under the Senior Finance Documents whether for principal, interest or
otherwise shall become immediately due without further demand, and the
Revolving Commitments, the Standby L/C Commitments and any other
obligations under the Senior Finance Documents to make credit available
shall immediately terminate, all without notice of any kind whatsoever.
PART 9
22. ADDITIONAL BORROWERS
(a) If any Subsidiary of the Company wishes to become a Borrower under this
Agreement, it and the Obligors' Agent shall each so notify the Facility
Agent (which shall in turn notify the Banks and the Security Agent).
(b) If all the Banks confirm to the Facility Agent in writing that they are
prepared to accept that Subsidiary as a Borrower hereunder (subject to such
limitations as they may advise) and an
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Obligor under the relevant Intercreditor Agreement(s) the Facility Agent
shall so notify the Banks and shall prepare and deliver to the Obligor's
Agent a Borrower Accession Agreement (appropriately completed and subject
to such limitations as are imposed).
(c) Upon receipt by the Facility Agent of the Borrower Accession Agreement,
signed on behalf of the Obligors' Agent (for itself and the existing
Borrowers, Guarantors and the Obligors) and by the proposed Additional
Borrower, the Facility Agent shall execute the same (for itself and on
behalf of the Finance Parties) and shall as promptly as practicable give
notice of such execution to all of the parties to the Borrower Accession
Agreement.
(d) Upon execution of any Borrower Accession Agreement as aforesaid, it shall
take effect in accordance with, but subject to, the terms hereof and
thereof.
(e) The obligations of each Finance Party to each Additional Borrower under
this Agreement with respect to the making of the first Utilisation by it
under this Agreement are subject to the condition precedent that the
Facility Agent shall have received in respect of the Additional Borrower
and the Borrower Accession Agreement all of the documents listed in
Schedule 5 and such other reports, opinions and documents (if any) as the
Facility Agent may reasonably require, each in form and substance
satisfactory to the Facility Agent and that the Facility Agent has
confirmed to the Obligors' Agent that it is satisfied that such Additional
Borrower has effectively become party to the relevant Intercreditor
Agreement(s) as an Obligor.
23. GUARANTEES
23.1 Guarantee
In consideration of the Finance Parties entering into this Agreement and/or
becoming party to this Agreement pursuant to a Novation Certificate and/or (in
the case of the Banks) participating in any Utilisation, each Guarantor hereby
irrevocably and unconditionally and jointly and severally but only to the extent
permitted under applicable law (which, in the case of any Guarantor incorporated
in the Netherlands shall be determined by reference to the fair market value
determined, on a going concern basis, between a willing buyer and a willing
seller, of its net assets (determined in accordance with Applicable Accounting
Principles):
(a) guarantees to each Finance Party, as principal obligor and not merely as
surety (or similar in any applicable jurisdiction), prompt performance by
each other Obligor (other than the Company and Lyon Cycle Investments B.V.)
of all its obligations under the Senior Finance Documents and the payment
of all sums payable now or in the future to each Finance Party by each
other Obligor (other than the Company and Lyon Cycle Investments B.V.)
under or in connection with the Senior Finance Documents when and as the
same shall become due;
(b) undertakes with each Finance Party that, if and whenever any other Obligor
(other than the Company and Lyon Cycle Investments B.V.) shall be in
default in the payment of any sum whatsoever due from it under or in
connection with any Senior Finance Document, such Guarantor will on demand
pay such sum as if such Guarantor instead of such other Obligor were
expressed to be the primary Obligor, together with interest on that sum at
the rate per annum from time to time payable by such other Obligor on that
sum from the date when that sum becomes payable by such Guarantor under
this Agreement until payment of that sum in full; and
(c) agrees to indemnify each Finance Party on demand against any loss or
liability suffered by it under any Senior Finance Document as a result of
any obligation guaranteed by any
115
Guarantor (other than the Company and Lyon Investments B.V.) being or
becoming unenforceable, invalid or illegal.
Provided that, in respect of the Swedish Obligor, the undertakings given by the
Swedish Obligor in this Clause 23 and any security undertaking hereunder by the
Swedish Obligor shall be conditional upon:
(i) receipt by the Swedish Obligor of a decision from the Swedish local
tax authority or from the Swedish Government which has gained legal
force (lagakraftvunnet beslut) holding that Chapter 12 Section 7 of
the Swedish Companies Act (aktiebolagslagen) is not applicable to
such undertakings; or
(ii) receipt by the Swedish Obligor of a decision from the Swedish local
tax authority or from the Swedish Government which has gained legal
force (lagakraftvunnet beslut) granting, pursuant to Chapter 12
Section 8 of the Swedish Companies Act, an exemption from Chapter 12
Section 7 of the Swedish Companies Act for such undertakings.
The Swedish Obligor shall draft the application to the Swedish tax
authority, but shall make such amendments or additions, as the Banks' local
Swedish counsel shall reasonably require. The Swedish Obligor undertakes to
file the application to the Swedish tax authority promptly following the
Diamond Back Acquisition.
If the Swedish local tax authority fails to hold that Chapter 12 Section 7
of the Swedish Companies Act (aktiebolagslagen) is not applicable to such
undertakings, or fails to grant the appropriate exemptions, the Swedish
Obligor shall lodge an appeal with the Swedish Government if in the
reasonable opinion of the Bank's Swedish counsel (and after taking into
account any representations made by the Swedish Obligor's Swedish counsel)
such appeal is likely to be successful on the balance of probabilities.
Anything contained in this Agreement to the contrary notwithstanding:
(i) the obligations of each U.S. Obligor hereunder shall be limited to a
maximum aggregate amount equal to the greatest amount that would not render
such U.S. Obligor's obligations hereunder subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of Title 11 of the
United States Bankruptcy Code or any provisions of applicable state law
(collectively, the "Fraudulent Transfer Laws"), in each case after giving
effect to all other liabilities of such U.S. Obligor, contingent or
otherwise, that are relevant under the Fraudulent Transfer Laws
(specifically excluding, however, any liabilities of such U.S. Obligor (a)
in respect of intercompany indebtedness to the extent that such
indebtedness would be discharged in an amount equal to the amount paid by
such U.S. Obligor hereunder and (b) under any guarantee of senior unsecured
indebtedness or indebtedness subordinated in right of payment to the
obligations hereunder which guarantee contains a limitation as to maximum
amount similar to that set forth in this paragraph, pursuant to which the
liability of such U.S. Obligor hereunder is included in the liabilities
taken into account in determining such maximum amount) and after giving
effect as assets to the value (as determined under the applicable
provisions of the Fraudulent Transfer Laws) of any rights to similar rights
of such U.S. Obligor pursuant to (A) applicable law or (B) any agreement
providing for an equitable allocation among such U.S. Obligor and other
Group Members of obligations arising under guarantees by such parties;
(ii) only the Company shall be liable for its obligations under this Agreement,
and in no event shall any other Obligor guarantee or act as a Guarantor for
any obligation of the Company under this Agreement;
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(iii)the Company shall pledge its assets, provided that it shall not pledge more
than or an amount equal to 66 2/3% of the voting stock in any Subsidiary;
(iv) the obligations of Raleigh Industries of Canada hereunder in its capacity
as a Guarantor shall be limited to a maximum aggregate amount of
C$13,000,000; and
(v) the obligations of the Swedish Obligors hereunder shall be limited to the
greater of:
(a) an amount equal to seven times the Consolidated EBITDA of such Swedish
Subsidiary; and
(b) the Total Assets of such Swedish Subsidiary;
and in each case, determined by reference to the Swedish Obligor's most
recently published audited financial statements and, for the purposes of
this paragraph only:
"Consolidated EBITDA" shall be determined in accordance with the definition
"Consolidated EBITDA" at Clause 1.2 but as if references therein to the
Company were references to the Swedish Obligor, references therein to the
Group were references to the Swedish Obligor and its Subsidiaries (if any)
and references therein to the audited annual financial statements were
references to the latest audited annual financial statements of such
Swedish Obligor as the same is determined in accordance with Applicable
Accounting Principles; and
"Total Assets" means, in respect of a Swedish Obligor, the sum of fixed,
intangible and current assets (including, for the avoidance of doubt,
amounts falling due after more than one year) of such Swedish Obligor and
its Subsidiaries (if any).
23.2 Continuing Guarantee
This guarantee is a continuing guarantee and shall extend to the ultimate
balance of all sums payable by the Obligors (other than the Company and Lyon
Cycle Investments B.V.) or any of them under the Senior Finance Documents.
23.3 Reinstatement
Where any discharge (whether in respect of the obligations of any Obligor, any
security for such obligations or otherwise) is made in whole or in part or any
arrangement is made on the faith of any payment, security or other disposition
which is avoided or must be repaid on insolvency, administration, liquidation or
otherwise without limitation, the liability of the Guarantors under this
guarantee shall continue as if there had been no such discharge or arrangement.
Each Finance Party shall be entitled to concede or compromise any claim that any
such payment, security or other disposition is liable to avoidance or repayment.
23.4 Waiver of Defences
Except to the extent that any Guarantor is specifically released in writing and
except to the extent that its obligations are specifically waived in writing the
obligations of each Guarantor under this Agreement shall not be affected by any
circumstance, act, omission, matter or thing which but for this provision might
operate to release or otherwise exonerate such Guarantor from its obligations
hereunder in whole or in part, including without limitation and whether or not
known to any Obligor or any Finance Party:
117
(a) any time, indulgence or waiver granted to or composition with any other
Obligor or any other Person; or
(b) the taking, variation, compromise, exchange, renewal or release of or
refusal or neglect to perfect, take up or enforce any rights or remedies
against, or any security over any assets of, any other Obligor or any other
Person or any non-presentment or non-observance of any formality or other
requirements in respect of any instruments or any failure to obtain the
full value of any security; or
(c) any legal limitation, disability, incapacity, lack of power, authority or
legal personality of, or dissolution or change in the members or status of,
or other circumstances relating to any other Obligor or any other Person
and including, without limiting the generality of the foregoing, any
limitation on the amount guaranteed by any other Guarantor hereunder or
provided for in any Guarantor Accession Agreement or any Guarantee; or
(d) any variation (however fundamental and whether or not involving any
increase in the liability of any Obligor thereunder) or replacement of any
Senior Finance Document or any other document or security (including
without limitation any substitute basis agreed pursuant to Clause 10 and
any agreement contemplated by this Agreement) so that references to such
Senior Finance Document or other document or security in this guarantee
shall include each such variation or replacement; or
(e) any unenforceability, illegality, invalidity or frustration of any
obligations of any other Obligor or any other Person under any Senior
Finance Document or any other document or security, or any failure of any
other Obligor or proposed Additional Borrower or Additional Guarantor to
become bound by the terms of any other Senior Finance Document, in each
case whether through any want of power or authority or otherwise; or
(f) any postponement, discharge, reduction, non-provability or other similar
circumstance affecting any obligation of any Obligor under a Senior Finance
Document resulting from any insolvency, liquidation or dissolution
proceedings or from any law, regulation or order,
to the intent that such Guarantor's obligations under this Agreement shall
remain in full force and this guarantee be construed accordingly as if there
were no such circumstance, act, variation, limitation, omission, matter or
thing.
23.5 Immediate Recourse
Each Guarantor waives any right it may have of first requiring any Finance Party
to proceed against or enforce any other rights or security of or claim payment
from or file any proof or claim in any insolvency, administration, winding up,
bankruptcy or liquidation proceedings relating to, any other Obligor or any
other Person before claiming from such Guarantor under this Agreement.
23.6 Preservation of Rights
Until all amounts which may be or become payable by any and all Obligors under
or in connection with the Senior Finance Documents have been irrevocably paid
and discharged in full (whether by any Borrower or by one or more Guarantors or
otherwise), after a claim has been made pursuant to this guarantee each Finance
Party may:
(a) refrain from applying or enforcing any other security, monies or rights
held or received by that Finance Party in respect of (or capable of being
applied in respect of) such amounts or apply and enforce the same in such
manner and order as that Finance Party sees fit (whether
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against such amounts or otherwise) and the Guarantors shall not be entitled
to the benefit of the same; and
(b) hold in a suspense account (with liability to pay interest on the monies
held therein at the rate payable to its corporate customers for deposits in
the same currency on like terms and in like amounts) any monies received
from any Guarantee or on account of any Guarantor's liability under this
Agreement.
23.7 Non-competition
Until all amounts which may be or become payable by any and all Obligors under
or in connection with the Senior Finance Documents have been irrevocably paid in
full (whether by any Borrower or by one or more Guarantors or otherwise), no
Guarantor shall, after a claim has been made pursuant to this guarantee:
(a) be subrogated to any rights, security or monies held, received or
receivable by any Finance Party or be entitled to any right of contribution
or indemnity in respect of any payment made or monies received on account
of any Obligor's liability under any Senior Finance Document and, to the
extent that any Guarantor is so subrogated or entitled by law, that
Guarantor hereby (to the fullest extent permitted by law) waives and agrees
not to exercise those rights or security or that right of contribution or
indemnity;
(b) be entitled or claim to rank as a creditor in the insolvency,
administration, winding-up, bankruptcy or liquidation of any other Obligor
in competition with any Finance Party unless otherwise required by the
Facility Agent or by law (in which case the proceeds, if any, of any claim
in respect of any rights, security or monies of any Finance Party to which
such Guarantor was subrogated, filed by the Guarantor with a receiver or
other similar official, will be paid by such Guarantor to the Facility
Agent to be applied in accordance with the provisions of the Senior Finance
Documents); or
(c) be entitled to receive, claim or have the benefit of any payment,
distribution or security from or on account of any other Obligor or
exercise any right of set-off as against any other Obligor (and, without
prejudice to the foregoing, each Guarantor shall forthwith pay to the
Facility Agent for the Finance Parties an amount equal to any such set-off
in fact exercised by it and forthwith pay or transfer, as the case may be,
to the Facility Agent for the Finance Parties any such payment or
distribution or benefit of security in fact received by it).
23.8 Additional Security
This guarantee shall be in addition to and shall not in any way be prejudiced by
any other security (including, without limitation, the Security Documents) now
or hereafter held by any Finance Party as security for or capable of being
applied against the obligations of any Obligor.
23.9 Certificate
A certificate of the Facility Agent as to any amount due from any Borrower under
this Agreement shall, in the absence of manifest error, be prima facie evidence
of such amount as against each Guarantor.
23.10 Guarantee Fees
(a) The Company undertakes to pay, or procure the payment of, a guarantee fee
to the Swedish Obligor. Such guarantee fee shall be payable yearly in
advance within 60 days of the end of each annual Accounting Period save
that the payment of the guarantee fee for the Accounting
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Period ending 31 December 1999 (the "First Guarantee Fee Payment") shall be
paid to the Swedish Obligor on the date on which the Swedish Obligor
executes an Accession Agreement.
(b) Each such guarantee fee shall be for an amount equal to 1.75% of the
Maximum Amount save that the First Guarantee Fee Payment shall be for an
amount equal to 1.75% of the value of assets acquired by the Swedish
Obligor pursuant to the Diamond Back Acquisition Agreement.
24. RELEASE OF GUARANTORS AND SECURITY
24.1 Guarantors
Subject to Clause 24.3, at the time of completion of any sale or other disposal
to a Person or Persons outside (and which will remain outside) the Group of all
of the shares in the capital of any Guarantor (or of all of the shares in any
other Group Member such that any Guarantor ceases as a result thereof to be a
Group Member) and in such other circumstances (if any) as all the Banks may from
time to time agree in writing, such Guarantor shall be released from all past,
present and future liabilities (both actual and contingent) hereunder and under
the Security Documents to which it is a party (other than liabilities which it
has in its capacity as a Borrower), and the security provided over its assets
under such Security Documents shall be released.
24.2 Assets
Subject to Clause 24.3, at the time of completion of any sale or other disposal
to a Person or Persons outside (and which will remain outside) the Group of any
assets owned by an Obligor over which security has been created by the Security
Documents to which that Obligor is expressed to be a party, those assets shall
be released from such Security.
24.3 Conditions for Release
The release of the guarantees and security referred to in Clause 24.1 and 24.2
above shall only occur if:
(a) either (i) such disposal will not result directly or indirectly in any
breach of any of the terms of this Agreement, or (ii) such disposal is
being effected at the request of the Majority Banks in circumstances where
any of the security created by the Security Documents has become
enforceable, or (iii) such disposal is being effected by enforcement of the
Security Documents;
(b) any assets to be transferred to another Group Member before completion of
such disposal shall have been so transferred and (if so required by the
Majority Banks) security over such assets shall have been granted to the
Security Agent to its satisfaction; and
(c) the Security Agent shall have executed such documents effecting such
release as shall be reasonably required to achieve such release as
aforesaid (and the Security Agent shall execute such documents at the
expense of the relevant Obligor promptly upon (and only upon) it being
satisfied that the conditions in (a), (b) and (c) above are satisfied).
24.4 Release of Group Members
If any Person which is a Group Member shall cease to be such a member in
consequence of the enforcement of any of the Security Documents or in
consequence of a disposal of the shares therein effected at the request of the
Majority Banks in circumstances where any of the security created by
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the Security Documents has become enforceable, any claim which any Obligor may
have against such Person or any of its Subsidiaries or which that Person or any
of its Subsidiaries may have against any Obligor in or arising out of this
Agreement or any of the Security Documents (including, without limitation, any
claim by way of subrogation to the rights of the Finance Parties against such
Person under the Senior Finance Documents and any claim by way of contribution
or indemnity) shall be released automatically and immediately upon such Person
ceasing to be a Group Member.
PART 10
25. INDEMNITIES
25.1 Indemnifiable events
Each Obligor agrees to indemnify each Finance Party on demand against any loss
or expense, including legal fees, and any applicable VAT, which any of them may
sustain or incur as a result or a consequence of any of the events referred to
in this Clause 25.1 having occurred:
(a) Advance not made: the funding of an Advance following delivery of a
Drawdown Request but not borrowed because of the application of one or more
of the provisions of this Agreement (but not, for the avoidance of doubt
because of any default by such Finance Party);
(b) Broken funding: receiving or recovering all or any part of any Advance
other than on the last day of the Term relating thereto or at the end of
any period selected by the Facility Agent under Clause 9, including any
amount required to compensate that Finance Party in respect of any loss,
premium, penalty or other compensating payment sustained or incurred by it
in liquidating, employing or redeploying deposits acquired or arranged or
entered into in order to make, fund or maintain such Advance;
(c) Occurrence of an Event of Default: the occurrence of an Event of Default or
any other breach of an Obligor's obligations expressed to be assumed by it
under this Agreement or under the Security Documents; or
(d) Currency indemnity: if any amount paid or received in respect of this
Agreement or any of the Security Documents, whether as a result of any
order, judgment or otherwise, is not received or recovered by or on behalf
of that Finance Party in the currency in which the same is expressed to be
payable hereunder or thereunder.
25.2 Stamp duty
(a) The Company will pay all stamp, documentary, registration and other similar
duties or Taxes, including any penalties, additions, surcharges or interest
relating to such amounts, which are imposed or chargeable on or in
connection with this Agreement and the Security Documents or any judgment
given in connection herewith and therewith.
(b) The Facility Agent may, but shall not be obliged to, pay any amounts which
are referred to at 25.2(a). If the Facility Agent does so, the Company
shall, on demand, indemnify the Facility Agent against any such payment,
together with any costs and expenses, including legal fees, and any
applicable VAT, incurred by or on behalf of the Facility Agent in
connection with such payment.
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26. FEES
26.1 Commitment fee
(a) The Company will pay (or will procure that there is paid) to the Facility
Agent:
(i) for distribution among the Additional Banks pro rata to the
aggregate of their respective Tranche A Revolving Commitments, a
commitment fee computed at the rate of 1% (one percent) per annum on
the daily unutilised balance of the Revolving Commitments during any
Availability Period, and for any period from the Amendment Date to
11 May 2002 and which does not fall within an Availability Period,
computed at the rate of one half of one per cent (0.5%) per annum on
the daily unutilised balance of Revolving Tranche A Commitments for
such period.
(ii) for distribution among the Original Banks pro rata to the aggregate
of their respective Tranche B Revolving Commitments, a commitment
fee computed at the rate of one half of one per cent 0.5% on the
daily unutilised balance of the Tranche B Revolving Commitments (for
the avoidance of doubt, taking into account the undrawn balance of
any Standby L/C outstanding during such period) during the period
from and including the date hereof until the expiry of the Revolving
Availability Period.
(b) Commitment fees are payable three monthly in arrears commencing on the date
falling three months from the date of this Agreement and ending on the date
on which the Total Tranche A Commitments or, as the case may be Total
Tranche B Commitments are cancelled and reduced to zero.
(c) If any Bank's Tranche A Revolving Commitment or, as the case may be Tranche
B Revolving Commitment is cancelled and reduced to zero, any commitment fee
which had accrued at such time in relation to that Bank and which has not
been paid, shall be payable by the Company on the date the cancellation is
effective.
26.2 Agency fees
The Company shall pay to the Facility Agent, for its own account and the account
of the Security Agent agency fees in the amounts and at the times specified in
the letter relating to the Agents' fees.
26.3 Arrangement fee
The Company shall pay to the Facility Agent, an arrangement fee in the amount
and at the time specified in the Fee Letter.
26.4 Participation Fee
The Company shall pay on the Amendment Date to each Additional Bank a
participation fee in an amount and at a time specified in the Fee Letter.
26.5 Amendment Fee
The Company shall pay on the Amendment Date to each Original Bank an amendment
fee in an amount and at a time specified in the Fee Letter.
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27. COSTS AND EXPENSES
27.1 Initial Costs
The Company shall pay to the Facility Agent an amount equal to all reasonable
costs and expenses, including reasonable legal fees and any applicable VAT
incurred by the Agents and/or the Arranger in connection with the negotiation,
preparation and execution of this Agreement and the Security Documents, subject
to agreed limits.
27.2 Amendments
The Company shall pay to the Facility Agent an amount equal to all costs and
expenses, including legal fees, and any VAT payable thereon, incurred by the
Agents and/or the Arranger in connection with the negotiation, preparation and
execution of any amendment, waiver, release or consent (each such event being an
"Approval") which any of the Finance Parties is requested to give in connection
with the Senior Finance Documents and the transactions contemplated by it and
them to the extent that the Facility Agent (acting reasonably) determines that
such Approval (either taken in isolation, or aggregated with any other Approval
requested in the annual Accounting Period to which such Approval relates), is in
excess of the time and resource the Facility Agent could have been expected to
expend on such matters in the ordinary course of events having regard to its
annual agency fee and, for the avoidance of doubt, the said annual agency fees
does not contemplate any work that the Facility Agent may be required to
undertake in that capacity following the occurrence of a Default or a
restructuring or refinancing of the Facilities.
27.3 Protection, enforcement, etc.
The Company shall pay, through the Facility Agent, an amount equal to all proper
costs and expenses, including, reasonable legal fees, and any applicable VAT
incurred by any Finance Party in connection with protecting, preserving or
enforcing (or attempting to do so) any of their rights under or arising out of
any of the Senior Finance Documents.
PART 11
28. THE AGENTS AND THE ARRANGER
28.1 Appointment of the Agents
(a) Each Bank and the Arranger irrevocably appoints the Facility Agent and the
Security Agent to act as its agent in connection with this Agreement and
with respect to the Senior Finance Documents and the transactions
contemplated hereby and thereby.
(b) The Agents are authorised to take such action and to exercise and carry out
all the discretions, authorisations, rights, powers and duties as are
specifically delegated to it in this Agreement and the other Senior Finance
Documents, together with such discretions, rights and powers as such
Facility Agent reasonably considers to be incidental and each of the
Finance Parties irrevocably authorises the Facility Agent and the Security
Agent on such Finance Party's behalf to enter into any Accession Agreement
or Security Document (whereupon and by which act such Finance Party shall
become bound thereby).
(c) The Agents are not, nor will they be considered to be, acting as trustee or
in a fiduciary capacity under or in connection with this Agreement or any
of the other Senior Finance Documents other than the Security Agent in its
capacity as such, under and in respect of the Security Documents. The
duties of the Agents are restricted to those expressly stated in this
Agreement.
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(d) Each Bank and the Agents agree (or shall be deemed to have agreed) that,
where Security Documents are to be granted, or have been granted, in favour
of the Security Agent, inter alia, for the benefit of the Banks, then the
Security Agent may enter into such Security Documents on behalf of the
Banks and shall hold the benefit of such Security Documents on trust for
the Banks and the Facility Agent to the extent of their respective
interests for the time being and that the terms and conditions of this
paragraph (d) shall apply to the Security Agent in its capacity as trustee
for the Banks and the Facility Agent under such Security Documents. The
Security Agent agrees with the Banks and the Facility Agent that it shall
hold on trust for each of them the assets secured by the Security
Documents. The perpetuity period applicable to the trusts created hereby
and pursuant hereto shall be eighty years.
(e) Unless expressly excluded in the Security Documents the Security Agent may
rely on, exercise and be protected by the discretions, protections, powers
and rights conferred on trustees, mortgagees or receivers under the Law of
Property ▇▇▇ ▇▇▇▇, the Trustee ▇▇▇ ▇▇▇▇, the Trustee Investments ▇▇▇ ▇▇▇▇
and the Insolvency ▇▇▇ ▇▇▇▇ and if there is any ambiguity or conflict
between the same and any of the Security Documents or where the terms of
the same are less extensive or more restricted than those of the Security
Documents, the terms of the Security Documents shall prevail to the extent
permitted by the applicable laws.
(f) The Security Agent in its capacity as trustee or otherwise shall not be
liable for any failure, omission, or defect in perfecting the security
constituted by any Security Document or any security created thereby
including, without limitation, any failure to (i) register the same in
accordance with the provisions of any of the documents of title of the
relevant Obligor to any of the property thereby charged, or (ii) effect or
procure registration of or otherwise protect the floating charge or any
other such security created or pursuant to the Security Documents under the
Land Registration Act 1925 or any other registration laws in any
jurisdiction.
(g) The Security Agent in its capacity as trustee or otherwise may accept
without enquiry such title as any Obligor may have to the property over
which security is intended to be created by any Security Document.
(h) Save where the Security Agent holds a legal mortgage over or over an
interest in, real property or shares, the Security Agent in its capacity as
trustee or otherwise shall not be under any obligation to hold any title
deeds. Security Documents or any other documents in connection with the
property charged by any Security Document or any other such security in its
own possession or to take any steps to protect or preserve the same. The
Security Agent may permit the relevant Obligor to retain all such title
deeds and other documents in its possession.
(i) Save as otherwise provided in the Security Documents, all moneys which
under the trusts herein or therein contained are received by the Security
Agent in its capacity as trustee or otherwise may be invested in the name
of or under the control of the Security Agent in any investment for the
time being authorised by English law for the investment by trustees of
trust money or in any other investments which may be selected by the
Security Agent with the consent of the Majority Banks. Additionally, the
same may be placed on deposit in the name of or under the control of the
Security Agent at such bank or institution (including any Agent) and upon
such terms as the Security Agent may think fit. Any and all such monies
and all interest thereon shall be paid over the Facility Agent forthwith
upon demand by the Facility Agent.
(j) Each Bank hereby confirms its approval of the Senior Finance Documents and
any security created or to be created pursuant thereto and hereby
authorises, empowers and directs the Security Agent (by itself or by such
Person(s) as it may nominate) to execute and enforce the same as trustee or
as otherwise provided (and whether or not expressly in the Banks' names) on
its behalf.
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28.2 Duties of the Agents
(a) The Agents will promptly forward to the relevant Party the original or a
copy of any notice or document received by it in its capacity as Facility
Agent or, as relevant, Security Agent for such Party.
(b) The Facility Agent and, where applicable, the Security Agent will promptly
notify the Banks if it receives notice from any Party of the occurrence of
a Default or any other breach of this Agreement or any of the other Senior
Finance Documents by an Obligor and that notice states the Default or
breach and makes reference to the specific Event of Default and/or the
Clause that has been breached.
(c) Except as otherwise stated in this Agreement and the Security Documents,
the Facility Agent and the Security Agent will act in accordance with any
instructions given to it by the Majority Banks, such instructions being
binding on all the Banks whether or not they form part of the Majority
Banks.
28.3 Exculpatory provisions
Except where this Agreement or the Security Documents specifically provides
otherwise, the Facility Agent or, as the case may be, the Security Agent is not
obliged:
(a) to review or check the accuracy or completeness of any document, notice or
other communication it receives or forwards to another Party;
(b) to monitor or enquire if a Default has occurred, or if the representations
made by any Obligor under or in connection with any of the Senior Finance
Documents and the Security Documents are true, correct or accurate, or
whether any Obligor has performed each of the obligations expressed to be
assumed by it under any of the Senior Finance Documents;
(c) to disclose to any Party any information (whether in a documentary form or
otherwise) if such disclosure would or might, in its opinion, constitute a
breach of law, regulation, its duty of confidentiality or otherwise be
actionable at the suit of any Person;
(d) to take any action or exercise any right, power or discretion under any of
the Senior Finance Documents, unless specifically instructed to do so by
the Majority Banks, the Banks or any other Finance Party which is entitled
to instruct it under any of the Senior Finance Documents and the manner in
which such right, power or discretion should be exercised; or
(e) to begin any legal action or proceeding under or in connection with any of
the Senior Finance Documents, unless it is satisfied that it has received
such security as it may require in respect of any costs, claims, liability
or loss, including legal fees, and any applicable VAT, which it will or may
incur in respect of, or in connection with, such actions or proceedings.
28.4 Assumptions
The Agents may assume that:
(a) no Default has occurred and that no Obligor is not in breach of its
obligations any of the Senior Finance Documents; and
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(b) each representation made by the Obligors under or in connection with any of
the Senior Finance Documents is correct,
unless it has, in its capacity as an Agent received notice to the contrary from
any Party; and
(c) that the Facility Office of any Bank is that office which has been notified
to it by that Bank for such purpose by ten Business Days' notice, until
such Bank informs the Facility Agent that it has designated another office
as its Facility Office.
28.5 Agents and Arranger not responsible to other Parties
None of the Agents nor the Arranger are responsible to any other Party for:
(a) the execution, validity or enforceability of any of the Finance Documents
or any documentation or communication delivered or made in connection
therewith;
(b) the accuracy and/or completeness of any information supplied by or on
behalf of an Obligor, including the Information Package;
(c) taking, or omitting to take, any action in connection any of the Senior
Finance Documents, unless such Party suffers loss directly as a result of
such Agent's or as the case may be, the Arranger's gross negligence or
wilful misconduct; or
(d) any breach by any other Party of this Agreement or any of the other Senior
Finance Documents.
28.6 Delegation and advisers
Each of the Agents may:
(a) engage, pay for and rely on the advice or services of any expert or
professional (whether a lawyer, accountant, surveyor or otherwise); and
(b) act through any of its, or its Affiliates', personnel and agents.
28.7 Indemnity
Upon demand by an Agent, each Bank shall, in its pro rata share, indemnify such
Agent, from and against any liabilities, costs, claims, losses and expenses,
including legal fees, and any applicable VAT which it may incur in any way
relating to or arising out of it acting in its capacity as an Agent, save to the
extent that such liability, cost, claim, loss or expense was incurred as a
result of such Agent's gross negligence or wilful misconduct.
28.8 Resignation of the Agents
(a) Each Agent may resign its appointment under this Agreement by giving not
less than thirty days' prior written notice to that effect to each of the
other Parties stating whether or not it has appointed its Affiliate as its
successor. No Agent's resignation shall become effective until a successor
has been appointed pursuant to this Clause 28.8, and in respect of the
resignation of a retiring Security Agent, shall not become effective until
the Facility Agent is satisfied that all things required to be done in
order that the Security Documents or replacements therefor shall provide
for effective and perfected security in favour of the replacement Security
Agent have been done. The Obligors shall take such action as may be
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necessary in order that the Security Documents or replacements therefor
shall provide for effective and perfected security in favour of any
replacement Security Agent.
(b) Without prejudice to the provisions of Clause 28.8(a), the Majority Banks
may require the Agents to retire from their respective appointments under
this Agreement at any time without assigning any reason therefor by giving
not less than thirty days' prior written notice to that effect to the
Facility Agent, provided that no such retirement shall become effective
until a successor for the Agents is appointed pursuant to this Clause 28.8.
(c) If the successor to the Agents or is to be:
(i) one of its Affiliates, such Affiliate shall become the Agent under
this Agreement upon notice to that effect being given by the
resigning Agent and its successor to each of the other Parties; or
(ii) other than one of its Affiliates, its successor shall be appointed by
the Majority Banks following consultation with the Company. If the
Majority Banks have not appointed a successor within 30 days of the
Agents' notice given under (a) above, the Agents may appoint their
successor, such appointment becoming effective upon notice to that
effect being given by the resigning Agents and their successor to
each of the other Parties.
(d) After a successor to the Agents has been appointed, the retiring Agents
shall continue to be entitled to the benefits of this Clause 28 but solely
in respect of any actions taken or omitted to be taken by it while it was
acting as an Agent under this Agreement and its successor and each of the
Parties shall have the same rights and obligations amongst themselves as if
the successor had been a Party to this Agreement instead of the retiring
Agents.
(e) The retiring Agents will make available to its successor any documents,
records and advice which their successor reasonably requires in order to
enable it to perform its functions as an Agent.
28.9 Separate entity
Each of the Agents' agency divisions shall be treated as a separate entity from
any of its other departments or divisions. Therefore, unless an Agent receives
any information concerning an Obligor in connection with this Agreement or the
facilities contemplated by any of the Senior Finance Documents in its capacity
as an Agent it shall be entitled to treat that information as confidential.
28.10 Reliance
Each Agent may rely on any communication or document reasonably believed by it
to be genuine and correct and, without limiting the generality of the foregoing,
may rely on any statement made by a director or employee or any Person regarding
any matters which may reasonably be assumed to be within his knowledge or within
his power to verify. Each Agent may engage, pay for and rely on legal or other
professional advisers selected by it and shall be protected in so relying.
28.11 Credit approval
Each of the Banks severally represents and warrants to the Agents and the
Arranger that it has made its own independent investigation and assessment of
the financial condition and affairs of each Obligor and their related entities
and other parties considered by it to be relevant in connection with its
participation in this Agreement and has not relied exclusively on any
information, including the Information Package, the Reports and any information
distributed on behalf of any Obligor during
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syndication, provided to such Bank by any Agent or any Arranger in connection
therewith. Each Bank represents, warrants and undertakes to each Agent and the
Arranger that it shall continue to make its own independent appraisal of the
creditworthiness of the Obligors and other parties considered by it to be
relevant in connection with the Senior Finance Documents and their related
entities while any amount is or may be outstanding under the Senior Finance
Documents.
28.12 Tax Confirmation
Each Bank confirms in favour of the Facility Agent (on the date of this
Agreement, or in the case of a Bank which becomes a party hereto pursuant to a
transfer or assignment, on the date on which the relevant transfer or assignment
becomes effective) that either:
(a) it is not resident for tax purposes in the United Kingdom and is
beneficially entitled to its share of the Advances and the interest
thereon; or
(b) it is a bank as defined for the purposes of Section 349 of the Income and
Corporation Taxes Act 1988 and is beneficially entitled to its share of the
Advances and the interest thereon,
and each Bank agrees in favour of the Facility Agent to notify the Facility
Agent if there is any change in its position from that set out above.
28.13 Miscellaneous provisions
(a) Each of the Agents, and the Arranger shall, if they are also a Bank, have
the same rights and obligations under this Agreement as if they were not an
Agent, or an Arranger and exercise those rights and perform those
obligations accordingly.
(b) Each of the Agents and the Arranger may contract any banking or other
business with any of the Obligors.
(c) None of the Banks will assert against any individual any claim which it may
have against any of the Agents or the Arranger.
(d) Each Agent may refrain from doing anything which would or might in its
reasonable opinion (a) be contrary to the law of any applicable
jurisdiction or any applicable official directive or (b) render it liable
to any Person, and may do anything which in its reasonable opinion (acting
on legal advice) is necessary to comply with any such law or directive.
29. TRANSFERS
29.1 Obligors
Save as expressly provided in this Agreement, no Obligor may without the prior
written consent of the Banks, assign, transfer, novate or dispose of all or any
of its rights or obligations under this Agreement.
29.2 Banks
(a) Subject to Clause 29.5, any Bank (the "Existing Bank") may, at any time,
assign transfer or novate all or any part of its rights, benefits and
obligations under this Agreement (including its Tranche A Revolving
Commitment, Tranche B Revolving Commitment and its Standby L/C Commitment)
in a minimum amount of DM 5,000,000 (or, if less, equal to its Tranche A
Revolving Commitment, Tranche B Revolving Commitment and its Standby L/C
Commitment) and each of the other
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Senior Finance Documents to another financial institution (the "New Bank")
with the consent of the Company, such consent not to be unreasonably
withheld or delayed and to have been deemed to have been given if not
refused within 14 days of the relevant request by delivering, or causing to
be delivered, to the Facility Agent, in the case of a transfer or a
novation, a Novation Certificate duly completed and executed by the
Existing Bank and the New Bank and to be executed upon receipt by the
Facility Agent and upon details of such transfer or novation having been
reflected in the control account referred to at Clause 31.3.
(b) Unless otherwise expressly provided in any Security Document or otherwise
expressly agreed between the Existing Bank and the New Bank and notified
by the Existing Bank to the Trustee at the time at which the relevant
transfer or novation takes effect under Clause 29.3 there shall
automatically be transferred with any transfer or novated with any novation
of the Existing Bank's rights and/or obligations under this Agreement, the
Existing Bank's rights under or in respect of each of the other Senior
Finance Documents which relate to that portion of the Existing Bank's
rights and/or obligations under this Agreement and each of the other Senior
Finance Documents which are the subject matter of such transfer or
novation.
(c) A Bank shall only be entitled to transfer or novate all or part of its
rights, benefits and obligations under this Agreement to the extent that it
transfers its rights, benefits and obligations under the Tranche B
Revolving Facility and the Standby L/C Facility in the same proportion that
the Tranche B Revolving Commitments of each of the Banks bears to the
Standby L/C Commitments of each of the Banks at such time and, for the
purposes of this paragraph (c), any Ancillary Commitment of any Ancillary
Bank shall be ignored and treated as if such Bank's Tranche B Revolving
Commitment had not been reduced in accordance with Clause 7.
29.3 Time of transfer
Upon execution of an Intercreditor Agreement, Accession Memorandum and a
Novation Certificate by the New Bank, the Existing Bank and the Facility Agent
(or if later, the date specified for this purpose in the Novation Certificate)
and to the extent that they are expressed to be subject to the transfer or
novation stated therein:
(a) the Existing Bank shall be released from its obligations to each other
Party (the "released obligations") and each other Party shall be released
from its obligations to the Existing Bank;
(b) the New Bank will assume obligations towards each other Party which differ
from the released obligations only in so far as they are owed to or assumed
by the New Bank and not the Existing Bank;
(c) the rights of the Existing Bank against the other Parties and vice versa
(the "cancelled rights") will be cancelled; and
(d) the New Bank and the other Parties will acquire rights against each other
which differ from the cancelled rights only insofar as they are exercisable
by or against the New Bank and not the Existing Bank.
Each Party (other than the Existing Bank and the New Bank) irrevocably
authorises the Facility Agent to execute each Novation Certificate on its
behalf.
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29.4 Administration fee
Not later than on the date a transfer becomes effective in accordance with
Clause 29.3, the New Bank will pay to the Facility Agent, for its own account,
an administration fee of $1,000.
29.5 Additional amounts payable to transferee
No Bank may effect a transfer pursuant to this Clause 29 if, at the time of the
transfer, or immediately after, or if a payment of interest, principal or
otherwise was to be made by an Obligor under this Agreement at such time to or
for the account of the proposed transferee, such Obligor would be liable to pay
an additional amount, including an indemnity payment (the "additional amount")
under Clause 14 and/or Clause 15 which would not have been payable to the
proposed transferor, unless the proposed transferee has confirmed to the
Facility Agent and the Obligors' Agent that it will promptly reimburse the
relevant Obligor an amount equal to the additional amount.
29.6 Disclosure of information
(a) Any Finance Party may provide to a Permitted Recipient, which has entered
into a confidentiality undertaking, (in a form reasonably satisfactory to
the Facility Agent) a copy of this Agreement; each of the Transaction
Documents and such information concerning the Group or any Group Member,
including without limitation, the Recapitalisation as it considers
appropriate.
(b) A "Permitted Recipient" means, in respect of any Finance Party:
(i) its Affiliates;
(ii) any Person with which that Finance Party is considering entering into
contractual relations in connection with this or any of the Senior
Finance Documents;
(iii) its advisers;
(iv) the courts, regulatory and other bodies in accordance with whose
orders or regulations it is required or is accustomed to comply; and
(v) any other Person who that Finance Party reasonably considers
appropriate to receive such information in order to protect or
preserve that Finance Party's position.
30. REDISTRIBUTION PROVISIONS
30.1 Redistributions
(a) Subject to Clause 30.3, if all or any part of an Obligor's obligations
under this Agreement and each of the other Senior Finance Documents owed to
any Finance Party are discharged, whether by way of set-off, payment,
combination of accounts or otherwise, other than as a result of an Agent
receiving payment and distributing such payment in accordance with Clause
13, that Finance Party (the "Recovering Party") shall promptly pay to the
Facility Agent an amount equal to the amount so discharged (the "Discharged
Amount").
(b) The Facility Agent shall treat each Discharged Amount received by it from a
Recovering Party as if it had received the Discharged Amount from the
relevant Obligor and distribute it amongst the Finance Parties (including
the Recovering Party) in accordance with Clause 13.2.
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(c) Upon a Discharged Amount being distributed by the Facility Agent, the
relevant Recovering Party shall be subrogated to the rights of each of the
other Finance Parties which received such a distribution to the extent of
such distribution and relevant Obligor will owe the Recovering Party a debt
which is equal to the amount so distributed to each of the other Finance
Parties.
30.2 Repayment of a Discharged Amount
If a Recovering Party is required to return or repay an amount which it
determines relates to a Discharged Amount made by it under Clause 30.1, it shall
promptly inform the Facility Agent. Each of the Finance Parties (other than the
Recovering Party which received a payment as a result of the Discharged Amount
being distributed) shall pay to the Facility Agent (for the account of the
Recovering Party) all that it has received of the Discharged Amount. Upon such
payment being made, the rights of subrogation provided in Clause 30.1(c) above
shall be operated in reverse to the extent of the reimbursement.
30.3 Exceptions
(a) A Recovering Party is not obliged to pay any amount under Clause 30.1 if,
in its opinion (acting reasonably), after such payment it would not have a
valid claim against the relevant Obligor by way of subrogation or otherwise
in respect of such payment.
(b) A Finance Party shall not be obliged to make any payment under Clause 30.1
if the obligations owed to that Finance Party are discharged as a result of
it receiving payment from a New Bank in respect of a Novation Certificate.
(c) A Recovering Party which has commenced or joined in an action or proceeding
in any court to recover any amount due to it under this Agreement or any of
the other Senior Finance Documents and pursuant to a judgment obtained in
such court or a settlement or compromise of that action or proceeding shall
have received any amount, shall not be obliged to share all or any
proportion of that amount with any Finance Party which has the legal right
to, but does not, join in such action or proceeding or commence and
diligently prosecute a separate action or proceeding to enforce its rights
under this Agreement or, as the case may be, such other Senior Finance
Document in the same or another court.
(d) If a notice is served under Clause 21.2 each Bank and each Ancillary Bank
shall adjust by corresponding transfers (to the extent necessary) their
claims in respect of amounts outstanding to them under the Tranche B
Revolving Facility, the Standby L/C Facility and Ancillary Facilities so
that after such transfers each such Bank shall have the same amount of
outstandings under the Tranche B Revolving Facility and Ancillary
Facilities and the same liabilities under the Standby L/C Facility pro rata
corresponding to the proportion of each Bank's Tranche B Revolving
Commitment to the aggregate Tranche B Revolving Commitments, each as at the
date the notice is served under Clause 21.2.
PART 12
31. CALCULATIONS AND EVIDENCE OF DEBT
31.1 Calculations
Interest and commitment commission shall accrue from day to day and shall be
calculated on the basis of a year of 360 days (or, if market practice differs,
in accordance with market practice) and the actual number of days elapsed.
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31.2 Financial Accounts
Each of the Banks shall, in accordance with its usual practices, maintain on its
books an account reflecting the amount which it has lent and the amount owing to
it under this Agreement and each of the other Senior Finance Documents from time
to time.
31.3 Control account
(a) The Facility Agent shall, in accordance with its usual practices, maintain
on its books a control account reflecting any amounts received or recovered
by it in connection with this Agreement and each of the other Senior
Finance Documents and any amounts which are payable by any Party in
connection with this Agreement and each of the other Senior Finance
Documents and the Parties' respective interests in such amounts.
(b) With respect to any Bank, the assignment, transfer or novation of all or a
part of such Bank's interests under the Senior Finance Documents shall not
be effective until such assignment, transfer or novation is reflected in
the control account maintained by the Facility Agent with respect to such
interests, and prior to such reflection in the control account, all amounts
owing to the transferor with respect to such interests shall remain owing
to such transferor. In addition to its capacity as agent for the Banks,
solely for purposes of this Clause 31.3, the Facility Agent's maintenance
of the control account shall also be as the Company's agent without
incurring any liability to the Company in such capacity whatsoever.
31.4 Standby L/C Accounts
(a) On the Issue Date of each Standby L/C each Bank participating in such
Standby L/C shall open its books at its Facility Office in accordance with
its usual practices an account (a "Standby L/C Account") each in the name
of the Borrower on whose behalf the same was issued and entitled "Raleigh
Standby L/C" (together with a reference to such Standby L/C) and
denominated in the currency of payment of sums payable under that Standby
L/C.
(b) The Borrowers shall make such payments to each Bank for credit to each
Standby L/C Account on the books of such Bank as are provided for in this
Agreement.
(c) The amount from time to time standing to the credit of each Standby L/C
Account on the books of a Bank shall bear interest at its overnight rate
for call deposits in the relevant currency from time to time, such interest
to be compounded daily and to be credited to such Standby L/C Account
quarterly in arrear on the last Business Day of each calendar quarter and
on the date on which such Standby L/C Account is closed.
(d) Each Bank shall be entitled to pay out of the amount standing to the credit
of the Standby L/C Account relating to any Standby L/C any amount which it
is obliged to pay out under such Standby L/C. However, subject to the
provisions of paragraph (e) below, no withdrawals may be made by any
Borrower from a Standby L/C Account (subject to the Senior Finance
Documents) until such time as all actual and contingent liabilities of such
Borrower hereunder in respect of the Standby L/C to which that Standby L/C
Account relates have been satisfied in full.
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(e) If the amount of the Standby L/C is reduced, the Bank that issued that
Standby L/C shall, if so requested by the Borrower on whose behalf that
Standby L/C was issued by not later than 12 noon on any Business Day after
such reduction, pay out of the amount standing to the credit of the Standby
L/C Account relating to such Standby L/C on such business day:
(i) a sum equal to the excess (if any) of the amount standing to the
credit of such Standby L/C Account over the amount of such Bank's
participation in the Standby L/C; and
(ii) a sum which bears to the amount (if any) standing to the credit of
such Standby L/C Account as a result of payments made to the Facility
Agent for credit thereof pursuant to Clause 16.2 the proportion borne
by the amount of the reduction in such Banks' participation in that
Standby L/C to the amount thereof immediately before that reduction.
31.5 Actual amount received
The amount owed by an Obligor to any Finance Party under this Agreement and each
of the other Senior Finance Documents shall be reduced by the amount actually
received or recovered by such Finance Party and not by reference to any rate of
exchange applied by any court or other body in calculating how much is payable
by such Obligor under any judgment or order given in connection with this
Agreement or any of the Senior Finance Documents.
31.6 Prima facie evidence
The accounts referred to in Clauses 31.2, 31.3 and 31.4 are prima facie evidence
of the amount and details recorded in those accounts.
31.7 Certificates and determinations
Any certificate delivered or determination made by a Finance Party, whether in
relation to an amount payable to it under this Agreement or the any other Senior
Finance Documents or, in respect of an indemnity given by an Obligor or
otherwise shall, in the absence of manifest error, be conclusive evidence of the
matters to which such certificate or determination relates.
31.8 Reference Banks
(a) If any Reference Bank fails to provide the Facility Agent with a quotation
when required for the purposes of this Agreement, the rate for which such
quotation was required shall (provided that, if there are, at the relevant
time, four or more Banks, there are at least two) be determined by
reference to the quotations that are received by the Facility Agent.
(b) Additional or replacement banks may, by agreement between the Obligors'
Agent and the Majority Banks, be appointed as a Reference Bank.
32. AMENDMENTS AND WAIVERS
32.1 Majority Banks
Unless prohibited by Clause 32.2, Clause 32.3 or Clause 32.4 , any provision of
this Agreement or the other Senior Finance Documents may be amended, waived or
supplemented or any consent given by written agreement made between the Company
and the Majority Banks or, if the Facility Agent has received the Majority
Banks' prior approval, the Facility Agent on their behalf.
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32.2 All Banks
The provisions contained in this Agreement and which relate to the following
shall not be amended, supplemented or modified or any consent given without the
prior consent of all Banks:
(a) the definitions of "Availability Period", "Margin", "LIBOR", "Encumbrance",
"Event of Default", "Repayment Date", "Final Repayment Date", "Financial
Indebtedness", "Majority Banks", "Potential Event of Default" and
"Reduction Date";
(b) Clauses 6 (other than Clause 6.15), 19.4(y), 19.5(a), (f), (g), (h), (i),
(o), (p), (r), (t), (u), (v), (w), (x), (y) or (z), (aa), and 30 and the
definitions contained or referred to therein;
(c) any provision of this Agreement which expressly requires the consent of
each Bank; and
(d) the amount of either of the Facilities, a Bank's Revolving Commitment,
Standby L/C Commitment, the amount (including both principal and interest)
or currency or due date for payment of any amount payable under any of the
Senior Finance Documents or the Expiry Date of a Standby L/C.
32.3 Super Majority Banks
Without the prior consent of a Super Majority:
(a) the Security Agent shall not (other than in accordance with Clause 24)
release any asset which is subject to a fixed Encumbrance granted in favour
of the Security Agent (unless such consent is given so as to facilitate a
disposal permitted to be made, or not prohibited from being made, under
this Agreement);
(b) the provisions contained in this Agreement and which relate to Clauses
19.5(b), (c), (d), (e), (j), (k), (l), (m),(n),(q) or (s) and Clause 20
shall not be amended, supplemented or modified or any consent given in
respect thereof;
(c) each of the Intercreditor Agreements shall not be amended, supplemented or
modified.
"Super Majority Banks" means a Bank or group of Banks whose aggregate Revolving
Commitments amount to more than eighty-five per cent of the Total Commitments or
if each Banks' Commitment has been reduced to zero, would have amounted in
aggregate to eighty-five per cent of the Total Commitments immediately prior to
such reduction to zero and, for the purposes of this definition, the provisions
of Clause 7 and the Ancillary Commitment of any Ancillary Bank shall be ignored
and be treated as if such Bank's Revolving Commitment had not been reduced in
accordance with Clause 7.
32.4 All Parties
Without the prior consent of all Parties, this Clause 32 may not be amended,
waived or supplemented.
32.5 The Agents
Without the prior consent of the relevant Agent, none of such Agent's rights or
obligations under any of the Senior Finance Documents may be amended, waived or
supplemented.
33. NOTICES
33.1 Method of delivery
All notices or other communications made or given in connection with this
Agreement and each of the other Senior Finance Documents shall be made in
writing by facsimile, letter or tested telex
134
(unless such notice or communication relates to the making or advice of any
payment, in which case it shall be made by tested telex only).
33.2 Addresses
Each communication or document to be made or delivered in connection with this
Agreement and each of the other Senior Finance Documents to a Party shall be
delivered or sent to the address or facsimile number that has been:
(a) notified to the Facility Agent by that Party before it became a Party; or
(b) notified to the Facility Agent by at least five Business Days' notice.
33.3 Agents' details
Unless the relevant Agent has given the other Parties five Business Days' notice
to that effect, its address and facsimile number are:
Facility Agent:
(a) Address: ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(b) Fax: ▇▇▇▇ ▇▇▇ ▇▇▇▇
(c) Officer/Department: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Agency Loans Department
Security Agent:
(a) Address: ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
(b) Fax: ▇▇▇▇ ▇▇▇ ▇▇▇▇
(c) Officer/Department: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Agency Loans Department
33.4 Receipt of notices
(a) Any notice or communication will be deemed to have been given, if sent by
post, when delivered and, if sent by facsimile, when received and, if sent
by telex, when an appropriate answer back is received by the sender.
However, if the notice or communication is for an Agent, it shall only be
effective when the same is received by the department or the officer
referred to at, Clause 33.3 or as otherwise notified by the relevant Agent
under that Clause.
(b) The Company shall forthwith on demand indemnify each Finance Party against
any direct loss or liability which that Finance Party incurs (and that
Finance Party shall not be liable to an Obligor in any respect) as a
consequence of:
(i) any Person to whom any notice or communication under or in connection
with this Agreement is sent by facsimile failing to receive that
notice or communication (unless such loss or liability is directly
caused by that Person's negligence or wilful default); or
135
(ii) any facsimile communication which appears to that Finance Party
(acting reasonably) to have been sent by an Obligor having in fact
been sent by a Person other than an Obligor.
33.5 Language
Each notice, communication and document given under or in connection with this
Agreement and each of the other Senior Finance Documents shall be in English or,
if not, accompanied by an accurate translation thereof which has been confirmed
by an Authorised Signatory of the Party giving the same as being a true and
accurate translation.
34. PARTIAL INVALIDITY
If any provision of this Agreement or any of the other Senior Finance Documents
is or becomes illegal, invalid or unenforceable in any respect under the law of
any jurisdiction, it shall not affect or impair the legality, validity or
enforceability of:
(a) any other provision of this Agreement or any of the other Senior Finance
Documents; or
(b) that provision, under the law of any other jurisdiction.
35. REMEDIES AND WAIVERS
(a) If any of the Finance Parties do not exercise, or delay in exercising, any
of their respective rights or remedies under or in connection with this
Agreement, it shall not operate as a waiver of any such right or remedy.
(b) The single or partial exercise of any right or remedy shall not prevent any
further or other exercise of that right or remedy.
(c) The rights and remedies provided in this Agreement or each of the other
Senior Finance Documents are additional to any rights or remedies provided
by law.
36. COUNTERPARTS
This Agreement may be executed in any number of counterparts and by different
Parties on separate counterparts each of which, when executed and delivered,
shall constitute an original and all the counterparts shall together constitute
but one and the same instrument.
37. SECURITY
The obligations and liabilities of the Obligors to the Security Agent under the
Security Documents shall be secured by the interests and rights granted in
favour of the Security Agent under the Security Documents.
38. THIRD PARTY RIGHTS
A person who is not party to this Agreement shall have no right under the
Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ to enforce any term of this
Agreement. This clause does not affect any right or remedy of any person which
exists or is available otherwise than pursuant to that Act.
136
39. JURISDICTION
39.1 Courts of England
For the benefit of each Finance Party, each of the Obligors agree that the
courts of England have jurisdiction to hear and settle any action, suit,
proceeding or dispute in connection with this Agreement or any of the other
Senior Finance Documents and therefore irrevocably submits to the jurisdiction
of those courts.
39.2 Non-exclusivity
The submission to the jurisdiction of the English courts does not restrict the
right of a Finance Party to take proceedings against an Obligor in connection
with this Agreement or any of the other Senior Finance Documents in any other
court of competent jurisdiction, whether concurrently or not.
39.3 Service of process agent
(a) In addition to any other appropriate method of service, Non-UK Obligors
irrevocably agrees that any suit, action or proceeding may be served on it
by being delivered to Derby Holding Limited at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ or its registered office and confirms that it has
appointed Derby Holding Limited as its agent for such purpose.
(b) Each of the Non-UK Obligors confirms that failure by its process agent to
notify it of receipt of any process will not invalidate the proceedings to
which it relates.
(c) If the appointment of a process agent ceases to be effective, the relevant
Non-UK Obligor shall immediately appoint a further Person in England as its
process agent in respect of this Agreement and each of the other Senior
Finance Documents and notify the Facility Agent of such appointment. If
such a Person is not appointed within 15 days the Facility Agent shall be
entitled to appoint such a Person.
39.4 Non-convenience of forum
Each of the Non-UK Obligors confirms that the English courts are not an
inconvenient forum and irrevocably waives any right it may have to object to
them on the grounds of inconvenience or otherwise.
40. GOVERNING LAW
This Agreement is governed by and shall be construed in accordance with English
law.
This Agreement has been entered into by the Parties on the date stated at the
beginning of this Agreement.
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SCHEDULE 1
THE BORROWERS
Name Jurisdiction of
Incorporation
Raleigh Industries Limited England and Wales
Derby Cycle Corporation Limited England and Wales
Derby Holding (Deutschland) GmbH Germany
Koninklijke Gazelle BV Netherlands
The Derby Cycle Corporation The United States of America
Raleigh Industries of Canada Limited Canada
Raleigh Europe B.V. Netherlands
Raleigh B.V. Netherlands
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Bike Parts GmbH Germany
▇▇▇▇▇▇-▇▇▇▇▇▇▇ GmbH Germany
Derby Holdings Limited England and Wales
Raleigh Fahrrder GmbH Germany
Derby Cycle Werke GmbH Germany
Raleigh International Limited England and Wales
Curragh Finance Company Ireland
Raleigh Ireland Limited Ireland
Derby Holding BV Netherlands
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SCHEDULE 2
THE GUARANTORS
Name Jurisdiction of Incorporation
Derby Holding Limited England and Wales
Raleigh Industries Limited England and Wales
Raleigh International Limited England and Wales
Derby Cycle Corporation Limited England and Wales
Raleigh Industries of Canada Limited Canada
The Derby Cycle Corporation The United States of America
Raleigh BV Netherlands
Raleigh Europe BV Netherlands
Koninklijke Gazelle BV Netherlands
Derby Nederland BV Netherlands
Derby Holding BV Netherlands
Lyon Investments BV Netherlands
Derby Holding (Deutschland) GmbH Germany
Raleigh Fahrrder GmbH Germany
NW Sportgerate GmbH Germany
Derby Cycle Werke GmbH Germany
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Bike Parts GmbH Germany
Univega Worldwide Licence GmbH Germany
Univega Beteiligungen GmbH Germany
Univega Bikes & Sports Europe GmbH Germany
(formerly MS Sport Vertriebs GmbH)
Derby Fahrrder GmbH Germany
Derby WS Vermogenswerwaltungs GmbH Germany
▇▇▇▇▇▇-▇▇▇▇▇▇▇ GmbH Germany
139
Name Jurisdiction of Incorporation
Curragh Finance Company Ireland
Raleigh Ireland Limited Ireland
The British Cycle Corporation Limited England and Wales
BSA Cycles Limited England and Wales
Triumph Cycle Co. Limited England and Wales
Raleigh (Services) Limited England and Wales
Derby Sweden AB Sweden
▇▇▇▇▇▇▇▇.▇▇▇ Inc. The United States of America
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SCHEDULE 3
THE ORIGINAL BANKS
Name
The Chase Manhattan Bank
ABN Amro Bank N.V.
Bank of Scotland
BHF - Bank ▇▇
▇▇▇▇▇▇▇▇ Bank AG, New York and Grand Cayman branch
Lloyds TSB Bank plc
HSBC Bank Plc
Scotiabank Europe Plc
The Bank of Nova Scotia
The Sumitomo Bank, Limited
BNP Paribas
San Paolo IMI SPA
KBC Bank (Nederland) N.V.
Oldenburgische Landesbank AG
The Governor and Company of the Bank of Ireland
The Industrial Bank of Japan Limited
141
SCHEDULE 4
THE ADDITIONAL BANKS
The Chase Manhattan Bank
BNP Paribas
Lloyds TSB plc
HSBC Bank Plc
KBC Bank (Nederland) N.V.
ABN Amro Bank N.V.
142
SCHEDULE 5
THE COMMITMENTS
Name Tranche A Revolving Tranche B Revolving Standby L/C
Commitments. Commitments. Commitment (DM)
The Chase Manhattan Bank 15,063,228.26 14,101,012.08 1,156,542
ABN Amro Bank N.V. 4,603,400.00 13,887,360.38 1,139,019
Bank of Scotland 13,887,360.38 1,139,019
BHF - Bank AG 13,887,360.38 1,139,019
Dresdner Bank AG, New York and Grand 13,887,360.38 1,139,019
Cayman branch
Lloyds TSB Bank plc 2,009,954.15 13,887,360.38 1,139,019
HSBC Bank Plc 2,009,954.15 13,887,360.38 1,139,019
Scotiabank Europe Plc and The Bank of 13,887,360.38 1,139,019
Nova Scotia
The Sumitomo Bank, Limited 13,887,360.38 1,139,019
BNP Paribas 1,391,506.72 9,614,326.42 788,551
San Paolo IMI SPA 9,614,326.42 788,551
KBC Bank (Nederland) N.V. 1,391,506.72 9,614,326.42 788,551
Oldenburgische Landesbank AG 9,614,326.42 788,551
The Governor and Company of the Bank of 9,614,326.42 788,551
Ireland
The Industrial Bank of Japan, Limited 9,614,326.42 788,551
DM26,469,550 DM182,885,853.64 DM15,000,000
NB: The Standby L/C Commitment of each Bank is a sub-set of the Tranche B
Revolving Commitment of such Bank and not additional to its Tranche B Revolving
Commitment.
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SCHEDULE 6
ACCESSION AGREEMENT
THIS ACCESSION AGREEMENT is dated the day of 199
and made BETWEEN [ ] (the "Additional
[Borrower/Guarantor]") (1), [ ] (the "Company" and an "Existing
Borrower" and an "Existing Guarantor") on behalf of itself and each of the other
Borrowers and Guarantors [ ] (each an "Existing
Guarantor" and together with the Company the "Existing Guarantors") (2), and
Chase Manhattan International Limited in its capacities as Facility Agent and
Security Agent under the Facility Agreement referred to in Recital (A) hereof
and on behalf of the Arranger and the Banks parties to and defined as such in
such Facility Agreement and on behalf of each of the parties to the
Intercreditor Agreement[s] dated [ ] (3).
WHEREAS:
(A) By and upon and subject to the terms of a facility agreement (the "Facility
Agreement"), which term includes any supplements and amendments thereto
which may at any time be made in relation thereto and also any Novation
Certificates and Accession Agreements) dated [
], 1998 made between, inter alios, the Company, the Borrowers and the
Guarantors as therein defined, Chase Manhattan plc as Arranger, Chase
Manhattan International Limited as Facility Agent and Security Agent and
the financial institutions named therein as banks, a multicurrency
revolving credit facility was made available to the Company and/or certain
of the Borrowers (as defined in the Facility Agreement).
(B) Each of the entities expressed to be party hereto, whether directly or
through signature hereof by the Facility Agent or the Company on its
behalf, is a party to the Facility Agreement either by having been an
original party thereto or pursuant to an Accession Agreement or a Novation
Certificate to which it is party or otherwise.
(C) The Additional [Borrower/Guarantor] wishes to become party to the Facility
Agreement as a [Borrower/Guarantor] pursuant to the procedure established
in Clause [22/19.4] of the Facility Agreement and a party to the
Intercreditor Agreement[s] dated [ ] as an Obligor pursuant
to the procedure established in Clause [9[1]] of the Intercreditor
Agreements by the execution of this Accession Agreement.
(D) It is the intention of the parties that this Accession Agreement shall take
effect as a deed.
NOW IT IS HEREBY AGREED as follows:
1. Definitions
Terms used herein (including the Recitals hereto) which are defined in or to
which a meaning or construction is assigned by or in the Facility Agreement
shall, unless otherwise defined herein, have the same meaning and
construction herein as therein.
2. Agreements, Confirmations and Representations
(a) The Additional [Borrower/Guarantor] hereby:
(i) confirms that it has received a copy of the Facility Agreement and
the Intercreditor Agreement[s], together with such other documents
and information as it has required in connection herewith and
therewith;
144
(ii) agrees to become, with effect from the date of this Accession
Agreement, a [Borrower/Guarantor] under the Facility Agreement, and
an Obligor under the Intercreditor Agreement[s], agrees to be bound
in that capacity with effect from such date by the terms of the
Facility Agreement and the Intercreditor Agreement[s] and undertakes
accordingly to perform its obligations as a [Borrower/Guarantor] (or,
as the case may be, Obligor) thereunder;
(iii) confirms the accuracy of the information set out under its name at
the end of this Accession Agreement;
(iv) represents and warrants as a [Borrower/Guarantor] to the Arranger,
the Banks and the Facility Agent in the terms of Clause 18 of the
Facility Agreement by reference to the facts and circumstances
existing at the date hereof;
(v) confirms it encloses herewith in respect of itself the documents and
evidence listed in Schedule 5;
(vi) confirms it has not relied on the Arranger, the Banks, the Facility
Agent or the Security Agent to assess or inform it as to the
legality, validity, effect or enforceability of the Facility
Agreement or the Intercreditor Agreement[s] or any other document
referred to therein or the accuracy or completeness of any such
information as is referred to in paragraph (i) above or the
creditworthiness, affairs, condition or status of any of the parties
to the Facility Agreement, the Intercreditor Agreement[s] or any such
other document.
(b) The Borrower(s), the Guarantor(s), the Arranger, the Facility Agent, the
Security Agent, the Banks and the parties to the Intercreditor Agreement[s]
hereby agree amongst themselves and with the Additional
[Borrower/Guarantor] that the Additional [Borrower/Guarantor] shall become
party to the Facility Agreement and the Intercreditor Agreement[s] with
effect from the date of this Accession Agreement.
3. Law
(a) This Accession Agreement shall be governed by and construed in accordance
with English law.
(b) [The Additional [Borrower/Guarantor] hereby irrevocably designates,
appoints and empowers the Company to receive, for and on behalf of itself,
service of process out of the English Courts in any proceedings with
respect to the Facility Agreement and/or the Intercreditor Agreement[s]
and/or this Accession Agreement or any judgment in connection therewith and
agrees that failure by such process agent to give notice of such service of
process to the Additional [Borrower/Guarantor] shall not impair or affect
the validity of such service or of any judgment based thereon.]
IN WITNESS WHEREOF the parties hereto have caused this Accession Agreement to be
duly executed on the date first written above.
SIGNATURES
Additional [Borrower/Guarantor]:
145
[ ]
Company:
[ ]
for itself and as agent for and on
behalf of the Borrowers and
Guarantors
By:
Facility Agent:
CHASE MANHATTAN INTERNATIONAL LIMITED
for itself and as Facility Agent and
Security Agent for and on behalf of the
Arranger and the Banks
By:
146
SCHEDULE 7
DOCUMENTS TO ACCOMPANY ADDITIONAL BORROWER/GUARANTOR ACCESSION AGREEMENT
1. The proposed Additional [Guarantor/Borrower] shall deliver each in a form
and substance satisfactory to the Facility Agent:
(a) A Certified Copy of its constitutive documents.
(b) A Certified Copy of its board resolution approving the execution, delivery
and performance by the proposed Additional [Borrower/Guarantor] of an
Accession Agreement in the form set out in Schedule 6 and each of the
Senior Finance Documents to which it is expressed to be a party and other
documents to be delivered pursuant thereto and the terms and conditions
thereof and authorising a Person or Persons (by name, or to the extent that
the same is permitted so as to bind the relevant Group Member by applicable
laws, by title) to sign the [Borrower's/Guarantor's] Accession Agreement,
the Senior Finance Documents and such other documents and to give any
notices on behalf of the proposed Additional [Borrower/Guarantor] in
connection with such Senior Finance Documents, or to give such notices, to
another Person or Persons;
(c) A list of its Authorised Signatories.
(d) A certificate of an Authorised Signatory of the proposed Additional
[Borrower/Guarantor] confirming that neither the execution and delivery of
the Additional [Borrower/Guarantor] Accession Agreement and the Finance
Documents to which the proposed Additional [Borrower/Guarantor] is
expressed to be a party nor the exercise of the proposed Additional
[Borrower'/Guarantor's] rights, and the performance of the proposed
Additional [Borrower/Guarantor's] obligations, under such
[Borrower/Guarantor] Accession Agreement and other Senior Finance Documents
would result in any breach of the proposed Additional [Borrower/Guarantor]
constitutive documents.
(e) An opinion of the proposed Additional [Borrower/Guarantor's] local counsel
addressed to the Facility Agent and Security Agent for themselves and for
and on behalf of the Banks and acceptable to the Banks.
(f) A Security Document and an Intercreditor Agreement Accession Memorandum.
(g) If applicable, an Exchange Control Approval.
(h) Such other documents as the Facility Agent may on the advice of local
counsel to the Banks require.
2. [In relation to any proposed Additional [Borrower/Guarantor] incorporated
in the United Kingdom certified copies of the statutory declaration made in
the prescribed form (and in the agreed form) by all the directors of such
Companies as required by Section 155 of the Companies ▇▇▇ ▇▇▇▇ together
with a Certified Copy of the statutory report by its Auditors required
under Section 156(4) of the 1985 Act and confirmation by the Auditors in a
form acceptable to the Facility Agent that such company has net assets (as
defined in Section 152(2) of the Companies Act 1985) and that the net
assets are not reduced by the giving of the financial assistance or any
reduction in net assets does not exceed distributable profits.]
147
3. In relation to any proposed Additional [Borrower/Guarantor] not
incorporated in any part of the United Kingdom evidence that Derby Holding
Limited has agreed to act as the proposed Additional [Borrower/Guarantor's]
service of process agent.
148
SCHEDULE 8
Part 1
FORM OF DRAWDOWN REQUEST
To: Chase Manhattan International Limited as Facility Agent.
From: [ ] as Obligors' Agent
Date: [ ]
Dear Sirs,
Re DM Multicurrency Credit Facility dated [ ] (the "Facility
Agreement")
1. We request that the [Additional/Existing] Banks, in accordance with the
terms of the Facility Agreement and upon the terms and conditions contained
therein, make [an] [Tranche A/Tranche B] Advance(s) as follows:
(a) Requested Amount [DM[ ]; and
(b) Currency;
(c) Drawdown Date: [ ].
(d) Term: [ ].
(e) Borrower: [ ].
2. The Advance(s) should be credited to [insert account details].
3. We confirm that, at the date hereof, the representations set out in Clause
18 that are to be repeated in accordance with Clause 18.2 are true and
correct and no Default has occurred and is continuing.
4. Terms used in this Drawdown Request and not otherwise defined shall bear
the same meaning as in the Facility Agreement.
5. This Advance is to be applied solely for the
purpose of [ ].
6. This Drawdown Request is governed by and shall be construed in accordance
with and subject to English law.
Yours faithfully
Obligors' Agent
Authorised Signatory
149
Part 2
FORM OF STANDBY L/C REQUEST
To: Chase Manhattan International Limited as Facility Agent.
From: [ ] as Obligors' Agent
On behalf of [ ] ("Account Party")
Date: [ ]
Dear Sirs,
Re DM214,000,000 Multicurrency Revolving Credit Agreement dated [
] (the "Facility Agreement")
1. We request that the Banks, in accordance with the terms of the Facility
Agreement and upon the terms and conditions contained therein, participate
in a Standby L/C in the form annexed hereto as follows:
(a) Amount of Standby L/C [eg DM ];
(b) Currency of Standby L/C;
(c) Issue Date: [ ];
(d) Expiry Date of Standby L/C: [ ];
(e) Account Party: [ ];
(f) Beneficiary: [ ];
(g) Beneficiary's Account details: [ ].
2. We confirm that, as at the date of this Standby L/C Request, no Default has
occurred and is continuing, and the representations contained in Clause 18
of the Agreement that are repeated in accordance with Clause 18.2 are true
and correct.
3. Terms used in this Standby L/C Request and not otherwise defined shall bear
the same meaning as in the Agreement.
4. This Standby L/C Request is governed by and shall be construed in
accordance with and subject to English law.
Yours faithfully
Obligors' Agent
Authorised Signatory
150
Part 3
FORM OF STANDBY L/C
TO: [ ]
For the attention of:
[Date]
Dear Sirs
IRREVOCABLE NON-TRANSFERABLE LETTER OF CREDIT NO. [ ]
The Banks (as defined below) in their several Participation Percentages (as
defined below) hereby issue this Irrevocable Non-Transferable Letter of Credit
No. [ ] (the "Credit"), details of which are as follows:-
Account Party: [Borrower under Facility Agreement]
Facility Agent: [Chase Manhattan International Limited] as Facility
Agent for the Banks or any other person notified from
time to time by the Facility Agent to the Beneficiary
as being the Facility Agent for the purposes of the
Credit.
Facility Agent's Office: [ ] or such other office from time to
time notified by the Facility Agent to the
Beneficiary.
Availability: By payment against delivery of Required Documents:
Bank: Name Participation Percentage
[ ] [ %]
[ ] [ %]
[ ] [ %]
Beneficiary: [Approved Bank details]
Charges: Any banking or other charges and commissions (other
than our own) are for the Beneficiary's account.
Maximum Amount: [ ]
Payment Currency: [ ]
Expiry Date: [ ]
151
Partial Payment: Partial payments are permitted, provided that the
Payment Amounts shall not in the aggregate exceed the
Maximum Amount.
Participation Percentage: In relation to a Bank, the percentage set out
opposite its name above, as varied by any novation
referred to below.
Payment Amount: An amount in the Payment Currency certified in a
Certificate of Beneficiary to be a Payment Amount.
Required Document: A Certificate of Beneficiary in the form set out in
Appendix A hereto (duly completed in a manner
consistent with the requirements of this credit and
signed on behalf of the Beneficiary).
Each Bank engages with the Beneficiary that within five working days in London
and the principal financial centre of the Payment Currency (each a "Business
Day") after receipt by the Facility Agent at the Agent's Office of the related
Required Document conforming to the terms of this Credit, such Bank will pay to
or to the order of the Beneficiary, in the Payment Currency in funds providing
same day value, by credit to the account specified in the related Certificate of
Beneficiary, its Participation Percentage of the lesser of:
(i) each Payment Amount, as stated in the Required Documents; and
(ii) the balance of the Maximum Amount after deducting the amount of any and all
previous payments by the Banks under this Credit.
This Credit shall be non-transferable and shall be payable only against
presentation of the Required Document. This Credit shall expire on, and no
payment shall be made pursuant hereto after, the Expiry Date.
The obligations of the Banks under this Credit are several according to their
respective participation Percentages and not joint and several and neither the
Facility Agent nor any Bank shall be liable for the failure of any other Bank to
perform its obligations hereunder. The aggregate amount payable by each Bank
hereunder shall not exceed its Participation Percentage of the Maximum Amount.
The Facility Agent shall have no liability hereunder except in its capacity as a
Bank.
A Bank (the "Existing Bank") may with the prior written consent of the
Beneficiary, such consent not to be unreasonably withheld or delayed, novate all
or part of its rights and/or obligations under this Credit to another bank or
financial institution (the "New Bank"). Such consent of the Beneficiary shall
not be withheld where an Existing Bank wishes to novate all or part of its
obligations to a New Bank which is at the time of such novation rated BBB or
above by Standard & Poor's Corporation or Baa2 by ▇▇▇▇▇'▇ Investor Services Inc.
A novation of rights and/or obligations will only be effected if the Existing
Bank and the New Bank deliver to the Facility Agent a duly completed
certificate, substantially in the form of Annex B hereto (an "LC Transfer
Certificate") duly executed by each of them and the Beneficiary (which shall be
obliged to execute the same where not entitled to withhold consent to the
transaction) and then countersigned by the Facility Agent on behalf of the other
Banks.
Upon the novation becoming effective in the manner referred to in the previous
paragraph, the Existing Bank shall be relieved of its obligations under this
Credit to the extent that they are novated to the new Bank and any reference in
this Credit to a Bank shall include the New Bank. Each Bank (other than the
Existing Bank and the New Bank) irrevocably authorises the Facility Agent to
execute a duly completed LC Transfer Certificate on its behalf.
152
Failure by the Beneficiary (within ten Business Days or receiving a written
request therefore) to give consent to any novation pursuant to and to execute an
LC Transfer Certificate, which by the terms of this Credit it is not entitled to
withhold or fail to execute will result in all obligations of the Existing Bank
which were to have been novated being cancelled at the expiry of such ten
Business Day period, such cancellation to result in non-payment by that Existing
Bank of its Participation Percentage of any further Payment Amount without
affecting the payments to be made by the other Banks in respect thereof.
On the date of execution of the Transfer Certificate by the Facility Agent and
(if the Beneficiary's consent is required but not deemed given) the Beneficiary
on, if later, the date specified in the LC Transfer Certificate:
i. the Facility Agent, the other Banks and the Beneficiary (the "Existing
Parties") and the Existing Bank will be released from their obligations to
each other under this Credit (the "Discharged Obligations");
ii. the New Bank and the Existing Parties will assume obligations towards each
other which differ from the Discharged Obligations only insofar as they are
owed to or assumed by the New Bank instead of the Existing Bank;
iii. the rights of the Existing Bank against the Existing Parties and vice
versa (the "Discharged Rights") will be cancelled; and
iv. the New Bank and the Existing Parties will acquire rights against each
other which differ from the Discharged Rights only insofar as they are
exercisable by or against the New Bank instead of the Existing Bank
in each case to the extent only that the same relate to or arise out of the
amount of the Existing Bank's Participation Percentage specified in the LC
Transfer Certificate.
Save insofar as such provisions may be inconsistent with the express terms of
this Credit, this Credit is subject to the provisions of the Uniform Customs and
Practice for Documentary Credits (1993 Revision) ICC Publication No. 500.
This Letter of Credit and the Credit established hereby shall be governed by
English law. For the avoidance of doubt, it is confirmed that demand may be
made hereunder by tested telex.
Yours faithfully
..........................................
[Facility Agent to sign
on behalf of each Bank]
153
EXHIBIT A
CERTIFICATE OF BENEFICIARY
To: [ ] as Facility Agent
Dear Sirs,
Irrevocable Non-Transferable Letter of Credit No. [ ] (the "Credit")
With reference to the above Credit, we hereby certify that:
(a) we have provided general banking facilities to [ ] [and its
subsidiaries] incorporated in [ ];
(b) an aggregate amount (the "Payment Amount") of [ ]
(comprising [ ] of principal and [ ] of
interest and/or other charges) fell due for payment in [ ]
by [ ] on [ ] and remains due and unpaid at the
date of this Certificate;
(c) save for the Credit, there is no security (whether in the nature of a
mortgage, charge, pledge, lien or other security interest), guarantee,
indemnity or other like arrangements securing payment to us of the Payment
Amount granted or provided by any other member of the Group.
Accordingly, we hereby request payment pursuant to the Credit of the Payment
Amount. Payment is to be made to our account (A/c No. [ ]) with [
] at [ ].
Yours faithfully,
........................
for and on behalf of
[ ]
154
EXHIBIT B
To: Chase Manhattan International Limited (the "Facility Agent")
for itself and on behalf of
the other parties to the Facility
Agreement and the Intercreditor Agreement
referred to below.
This Certificate ("Novation Certificate") relates to a facility agreement
(together with and as supplemented and amended by all Accession Agreements,
Novation Certificates and other agreements from time to time entered into in
relation to it, the "Facility Agreement") dated 12 May, 1998 made between,
amongst others, The Derby Cycle Corporation and various of its Subsidiaries as
Borrowers and Guarantors, Chase Manhattan plc as Arranger, the financial
institutions named therein as Banks, Chase Manhattan International Limited as
Facility Agent and as Security Agent for the Banks in respect of a revolving
credit facility of up to DM and to the Intercreditor Agreement referred to in
the Facility Agreement. Terms defined in the Facility Agreement shall unless
defined herein, have the same meanings herein as in the Facility Agreement.
1. [Existing Bank] (the "Existing Bank"):
(a) confirms that the details appearing in the Schedule hereto under the
headings "Existing Bank's Commitments (Portion Substituted)", "Existing
Bank's Participations in Advances (Portion Novated)" and "Outstanding
Standby L/Cs of Credit" are accurate; and
(b) requests [ ] (the "New Bank") to accept and procure the substitution
pursuant to Clause 29 of the Facility Agreement [and Clause [ ] of
the Intercreditor Agreement] of the Existing Bank by the New Bank in
respect of the portion of its relevant Commitment(s) specified under the
heading "Existing Bank's [Tranche A/Tranche B] Revolving Commitment
(Portion Novated)" and "Existing Bank's Standby L/C Commitment (Portion
Novated)" in the Schedule hereto and/or in respect of the Advance(s)
referred to under the heading "Existing Bank's portion of Outstanding
Advances (Portion Novated)" and/or in respect of the Standby L/Cs referred
to under the heading "Existing Bank's participation in Outstanding Standby
L/Cs (Portion Novated)" by counter-signing the copy of this Novation
Certificate executed by the Existing Bank and delivering the same to the
Facility Agent.
2. The New Bank hereby requests the Obligors, the Arranger, the Banks, and the
Agents and the other parties to the Intercreditor Agreement to accept this
duly executed Novation Certificate as being delivered pursuant to and for
the purposes of Clause 29 of the Facility Agreement and Clauses [ ], [ ]
and [ ] of each of the Intercreditor Agreements so as to take effect in
accordance with its terms under such Clauses on [date of novation].
3. The New Bank hereby (a) confirms receipt of a copy of the Finance Documents
as at the date hereof and all such other documents and information as it
has required in connection herewith, (b) accepts and confirms the
application of the provisions of Clause 29 of the Facility Agreement and
Clauses [ ], [ ] and [ ] of each of the Intercreditor Agreements as they
apply in connection herewith and the transactions and matters to occur in
consequence hereof, and (c) confirms the correctness of the details
specified in respect to it in the Schedule hereto.
4. The New Bank confirms that:
155
(a) it has received a copy of the Finance Document together with such other
documents and information as it has required in connection with this
transaction;
(b) it has not relied and will not hereafter rely on the Existing Bank to check
or enquire on its behalf into the legality, validity, effectiveness,
adequacy, accuracy or completeness of any such documents or information;
(c) it has made its own independent investigation and assessment of the
financial affairs of each Obligor and their related entities and the other
parties considered by it to be relevant in connection with this transaction
and agrees that it has not relied and will not rely on the Existing Bank,
the Arranger, the Facility Agent, the Security Agent or the Banks to assess
or keep under review on its behalf the financial condition,
creditworthiness, condition, affairs, status or nature of any member of the
Group or any other party to the Finance Documents (save as otherwise
expressly provided therein);
(d) it has power and authority to become a party to the Finance Documents and
has taken all necessary action to authorise execution of this Novation
Certificate and has obtained all necessary approvals and consents to the
assumption of its obligations under the Facility Agreement and the
Intercreditor Agreements; and
(e) it is a Qualifying Bank.
5. The New Bank hereby undertakes with the Existing Bank and each of the other
parties to the Facility Agreement and each of the Intercreditor Agreements
that it will perform in accordance with its terms all those obligations
which by the terms of the Senior Facility Agreement and the Intercreditor
Agreements will be assumed by it under the Senior Finance Documents after
delivery of the executed copies of this Novation Certificate to the Facility
Agent and countersignature thereof by the Facility Agent, and the New Bank
hereby undertakes to be bound by the provisions of the Senior Finance
Documents.
6. The Existing Bank hereby gives notice that nothing herein or any Senior
Finance Document (or any other document relating thereto) shall oblige the
Existing Bank (i) to accept a re-transfer from or novation by the New Bank
of the whole or any part of its rights, benefits and/or obligations under
the Finance Documents or (ii) to support any losses directly or indirectly
sustained or incurred by the New Bank for any reason whatsoever including,
without limitation, the non-performance by any Obligor or any other party to
the Finance Documents (or any document relating thereto) of their
obligations under any such document. The New Bank hereby acknowledges the
absence of any such obligation as is referred to in paragraphs (i) and (ii)
above.
7. This Novation Certificate shall be governed by and construed in accordance
with English law.
8. This Novation Certificate may be executed in any number of counterparts and
all of such counterparts taken together shall be deemed to constitute one
and the same instrument.
156
SCHEDULE 9
FORM OF NOVATION CERTIFICATE
To: Chase Manhattan International Limited (the "Facility Agent")
for itself and on behalf of
the other parties to the Facility
Agreement and the Intercreditor Agreements
referred to below.
This Certificate ("Novation Certificate") relates to a facility agreement
(together with and as supplemented and amended by all Accession Agreements,
Novation Certificates and other agreements from time to time entered into in
relation to it, the "Facility Agreement") dated 12 May, 1998 made between,
amongst others, The Derby Cycle Corporation and various of its Subsidiaries as
Borrowers and Guarantors, Chase Manhattan plc as Arranger, the financial
institutions named therein as Banks, Chase Manhattan International Limited as
Facility Agent and as Security Agent for the Banks in respect of a revolving
credit facility of up to DM and to the Intercreditor Agreements referred to in
the Facility Agreement. Terms defined in the Facility Agreement shall unless
defined herein, have the same meanings herein as in the Facility Agreement.
1. [Existing Bank] (the "Existing Bank"):
(a) confirms that the details appearing in the Schedule hereto under the
headings "Existing Bank's Commitments (Portion Substituted)", "Existing
Bank's Participations in Advances (Portion Novated)" and "Outstanding
Standby L/Cs of Credit" are accurate; and
(b) requests [ ] (the "New Bank") to accept and procure the substitution
pursuant to Clause 29 of the Facility Agreement [and Clause 9 of the
Intercreditor Agreement] of the Existing Bank by the New Bank in respect of
the portion of its relevant Commitment(s) specified under the heading
"Existing Bank's [Tranche A/Tranche B] Revolving Commitment (Portion
Novated)" and "Existing Bank's Standby L/C Commitment (Portion Novated)"]
in the Schedule hereto and/or in respect of the Advance(s) referred to
under the heading "Existing Bank's portion of Outstanding Advances (Portion
Novated)" and/or in respect of the Standby L/Cs referred to under the
heading "Existing Bank's participation in Outstanding Standby L/Cs (Portion
Novated)" by counter-signing the copy of this Novation Certificate executed
by the Existing Bank and delivering the same to the Facility Agent.
2. The New Bank hereby requests the Obligors, the Arranger, the Banks, and the
Agents and the other parties to the Intercreditor Agreements to accept this
duly executed Novation Certificate as being delivered pursuant to and for
the purposes of Clause 29 of the Facility Agreement and Clauses 9, [ ] and
[ ] of the Intercreditor Agreements so as to take effect in accordance with
its terms under such Clauses on [date of novation].
3. The New Bank hereby (a) confirms receipt of a copy of the Finance Documents
as at the date hereof and all such other documents and information as it has
required in connection herewith, (b) accepts and confirms the application of
the provisions of Clause 29 of the Facility Agreement and Clauses 9, [ ],
[ ] and [ ] of the Intercreditor Agreements as they apply in connection
herewith and the transactions and matters to occur in consequence hereof,
and (c) confirms the correctness of the details specified in respect to it
in the Schedule hereto.
4. The New Bank confirms that:
157
(a) it has received a copy of the Finance Document together with such other
documents and information as it has required in connection with this
transaction;
(b) it has not relied and will not hereafter rely on the Existing Bank to check
or enquire on its behalf into the legality, validity, effectiveness,
adequacy, accuracy or completeness of any such documents or information;
(c) it has made its own independent investigation and assessment of the
financial affairs of each Obligor and their related entities and the other
parties considered by it to be relevant in connection with this transaction
and agrees that it has not relied and will not rely on the Existing Bank,
the Arranger, the Facility Agent, the Security Agent or the Banks to assess
or keep under review on its behalf the financial condition,
creditworthiness, condition, affairs, status or nature of any member of the
Group or any other party to the Finance Documents (save as otherwise
expressly provided therein);
(d) it has power and authority to become a party to the Finance Documents and
has taken all necessary action to authorise execution of this Novation
Certificate and has obtained all necessary approvals and consents to the
assumption of its obligations under each of the Facility Agreement and the
Intercreditor Agreements; and
(e) it is a Qualifying Bank.
5. The New Bank hereby undertakes with the Existing Bank and each of the other
parties to the Facility Agreement and the Intercreditor Agreements that it
will perform in accordance with its terms all those obligations which by the
terms of the Senior Facility Agreement and the Intercreditor Agreements will
be assumed by it under the Senior Finance Documents after delivery of the
executed copies of this Novation Certificate to the Facility Agent and
countersignature thereof by the Facility Agent, and the New Bank hereby
undertakes to be bound by the provisions of the Senior Finance Documents .
6. The Existing Bank hereby gives notice that nothing herein or any Senior
Finance Document (or any other document relating thereto) shall oblige the
Existing Bank (i) to accept a re-transfer from or novation by the New Bank
of the whole or any part of its rights, benefits and/or obligations under
the Finance Documents or (ii) to support any losses directly or indirectly
sustained or incurred by the New Bank for any reason whatsoever including,
without limitation, the non-performance by any Obligor or any other party to
the Finance Documents (or any document relating thereto) of their
obligations under any such document. The New Bank hereby acknowledges the
absence of any such obligation as is referred to in paragraphs (i) and (ii)
above.
7. This Novation Certificate shall be governed by and construed in accordance
with English law.
8. This Novation Certificate may be executed in any number of counterparts and
all of such counterparts taken together shall be deemed to constitute one
and the same instrument.
158
THE SCHEDULE
1. Existing Bank's [Tranche A Revolving Commitment/Tranche B Revolving
Commitment]: (Portion Novated)
2. Existing Bank's portion of Outstanding Advances: (Portion Novated)]
Drawdown Date Amount Repayment Date
[ ] [ ] [ ]
3. Existing Bank's Standby L/C Commitment: (Portion Novated)
4. Existing Bank's participation in Outstanding Standby L/Cs: (Portion Novated)
Issue Date Amount Expiry Date
[ ] [ ] [ ]
NB. Please note Clause 29.2(c) regarding the proportion of Revolving Commitment
and Standby L/C Commitment that are required to be transferred.
[Name of Existing Bank] [Name of New Bank]
By: By:
Date: Date:
[Name of Facility Agent]
By:
Date:
CHASE MANHATTAN INTERNATIONAL LIMITED
for itself and as the Facility Agent, Security
Agent, and for and on behalf of the Obligors,
the Arranger, the Banks and for and on behalf
of the parties to the Intercreditor Agreements
By:
Date:
159
SCHEDULE 10
ADDITIONAL COSTS
1. For the purpose of this Agreement, the cost of compliance with existing
requirements of the Bank of England and/or the Financial Services Authority
(or any other authority which replaces all or any of their functions) in
respect of Advances will be calculated by the Facility Agent in relation to
each of the first day of each in respect of such Advance and, if the
Interest Period of such Advance exceeds three months, at three calendar
monthly intervals from the first day of such Term during its duration in
accordance with the following formula:
AB+C(B-D) + E x 0.01 per cent. per annum
----------------------
100 - (A+C)
Where:
A is the percentage of eligible liabilities (assuming these to be in
excess of any stated minimum) which the Facility Agent is from time to
time required to maintain as an interest free cash ratio deposit with
the Bank of England to comply with cash ratio requirements;
B is the percentage rate per annum at which sterling deposits are offered
by the Facility Agent in accordance with its normal practice, for a
period equal to (a) the relevant Term (or, as the case may be, remainder
of such Term in respect of the relevant Advance) or (b) three months,
whichever is the shorter, to a leading bank in the London Interbank
Market at about 11.00 a.m. in a sum approximately equal to the amount of
such Advance;
C is the percentage of eligible liabilities which the Facility Agent is
required from time to time to maintain as interest bearing special
deposits with the Bank of England;
D is the percentage rate per annum payable by the Bank of England to the
Facility Agent on interest bearing special deposits; and
E is the rate payable by the Facility Agent to the Financial Services
Authority pursuant to the Fees Regulations (but, for this purpose, the
figure at paragraph 2.03b of the Fees Regulations shall be deemed to
be zero) and expressed in pounds per (Pounds)1,000,000 of the Fee Base
of the Agent.
2. For the purpose of this Schedule:
(a) "eligible liabilities" and "special deposits" shall bear the meanings
as ascribed to them from time to time under or pursuant to the Bank of
England Act 1988 or (as appropriate) by the Bank of England;
(b) "Fee Regulations" means the Banking Supervision (Fees) Regulations
1998 or such other regulations as may be in force from time to time in
respect of the payment of fees for banking supervision; and
(c) "Fee Base" shall bear the meaning ascribed to it, and shall be
calculated in accordance with, the Fees Regulations.
160
3. The percentage used in A and C above shall be those required to be
maintained on the first day of the relevant period as determined in
accordance with B above.
4. In application of the above formula, A, B, C and D will be included in the
formula as figures and not as percentages e.g. if A is 0.5 per cent. and B
is 12 per cent., AB will be calculated as 0.5 x 12 and not as 0.5 per cent.
x 12 per cent.
5. Calculations will be made on the basis of a 365 day year (or, if market
practice differs, in accordance with market practice).
6. A negative result obtained by subtracting D from B shall be taken as zero.
7. The resulting figures shall be rounded upwards, if not already such a
multiple, to the nearest whole multiple of one-thirty-second of one per
cent. per annum.
8. Additional amounts calculated in accordance with this Schedule are payable
on the last day of the Term to which they relate.
9. The determination of the Additional Costs by the Facility Agent in relation
to any period shall, in the absence of manifest error, be conclusive and
binding on all of the parties hereto.
10. The Facility Agent may from time to time, after consultation with the
Borrower and the Banks, determine and notify to all parties any amendments
or variations which are required to be made to the formula set out above in
order to comply with any requirements from time to time imposed by the Bank
of England or the Financial Services Authority (or any other authority
which replaces all or any of their functions) in relation to Advances
(including any requirements relating to sterling primary liquidity) and,
any such determination shall, in the absence of manifest error, be
conclusive and binding on all the parties hereto.
161
SCHEDULE 11
COMPLIANCE CERTIFICATE
To: The Facility Agent and each of the Banks
(as defined in the Facility Agreement)
[Date]
The undersigned hereby certifies that to the best of their information,
knowledge and belief after all due enquiry but without personal liability:
1. This certificate is given pursuant to Clause 19.1 (Compliance Certificate)
of an agreement dated [ ] (the "Facility Agreement") made between inter
alios, The Derby Cycle Corporation and certain of its Subsidiaries as
Borrowers and Guarantors and the parties defined therein as the Facility
Agent, the Arranger, the Security Agent and the Banks. Terms defined in the
Facility Agreement shall, unless otherwise defined herein, bear the same
meaning when used herein.
2. Terms defined in the Facility Agreement shall bear the same meaning herein.
3. We confirm that as at [insert appropriate Accounting Date]:
(a) Consolidated Adjusted EBITDA was [ ];
(b) the aggregate Financial Indebtedness of the Group was [ ].]
(c) the Consolidated Adjusted Cashflow of the Company was [ . ]; and
(d) the Capital Expenditure of the Group was [ . ].
4. We set out below the computations giving rise to the above ratios and
figures, each of which has been made in accordance with the provisions of
the Facility Agreement;
5. We therefore confirm, that as at [insert relevant Accounting Date] each of
the financial conditions specified at Clause 20 of the Facility Agreement
[was/was not] satisfied.
6. No Default has occurred and is continuing as of the date hereof.
...........................
for and on behalf of
The Derby Cycle Corporation
162
SCHEDULE 12
MATERIAL GROUP MEMBERS
Derby Holding Limited
Raleigh Industries Limited
Raleigh International Limited
Derby Cycle Corporation Limited
Raleigh Industries of Canada Limited
The Derby Cycle Corporation
Raleigh BV
Raleigh Europe BV
Koninklijke Gazelle BV
Derby Nederland BV
Derby Holding BV
Lyon Investments BV
Derby Holding (Deutschland) GmbH
Raleigh Fahrrader GmbH
NW Sportgerate GmbH
Derby Cycle Werke GmbH
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Bike Parts GmbH
Univega Worldwide GmbH
Univega Beteiligungen GmbH
Univega Bikes & Sports Europe GmbH (formerly MS Sport Vertirebs GmbH)
Derby Farrader GmbH
Derby WS
Vermogenswerwaltungs GmbH
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ GmbH
Curragh Finance Company
Raleigh Ireland Limited
The British Cycle Corporation Limited
Derby Investment Holding (Pty) Limited
Pro Bike South Africa (Pty) Limited
Derby Sweden AB
▇▇▇▇▇▇▇▇.▇▇▇ Inc
163
SCHEDULE 13
NOMINEE NOTICE
To: Chase Manhattan International Limited (the "Facility Agent")
for itself and on behalf of the other parties to the
Facility Agreement and the Intercreditor Agreement
referred to below
THIS NOTICE ("Nominee Notice") relates to a facility agreement as amended by an
Amendment Agreement dated [ ] (together with and as supplemented and amended
by all Accession Agreements, Novation Certificates and other agreements from
time to time entered into in relation to it (the "Facility Agreement") dated 12
May 1998 made between, amongst others, The Derby Cycle Corporation and various
of its Subsidiaries as Borrowers and Guarantors, Chase Manhattan plc as
Arranger, the financial institutions named therein as Banks, Chase Manhattan
International Limited as Facility Agent and as Security Agent for the Banks in
respect of a revolving credit facility of up to DM214,000,000 and to the
Intercreditor Agreements referred to in the Facility Agreement. Terms defined
in the Facility Agreement shall unless defined herein, have the same meanings
herein as in the Facility Agreement.
1. The Nominated Affiliate hereby requests the Obligors, the Arranger, the
Banks and the Agents and the other parties to the Intercreditor Agreement to
accept this duly executed Nominee Notice as being delivered pursuant to
Clause 7.3 of the Facility Agreement for the purposes of permitting it to
discharge the Nominating Banks' obligations under the Facility Agreement to
provide an Ancillary Facility.
2. Agreements, Confirmations and Representations
(a) The Nominated Affiliate hereby:
(i) confirms that it has received a copy of the Facility Agreement
and the Intercreditor Agreements, together with such other
documents and information as it has required in connection
herewith and therewith;
(ii) agrees to become, with effect from the date of delivery of this
Nominee Notice, an Ancillary Bank under the Facility Agreement,
and a Bank under the Intercreditor Agreements, agrees to be bound
in that capacity with effect from such date by the terms of the
Facility Agreement and the Intercreditor Agreements and
undertakes accordingly to perform its obligations as a Bank
thereunder;
(iii) confirms the accuracy of the information set out under its name
at the end of this Nominee Notice;
(iv) confirms that it has not relied on the Arranger, the Banks, the
Facility Agent or the Security Agent to assess or inform it as to
the legality, validity, effect or enforceability of the Facility
Agreement or the Intercreditor Agreements or any other document
referred to therein or the accuracy or completeness of any such
information as is referred to in paragraph 2.1.1 above or the
creditworthiness, affairs, condition or status of any of the
parties to the
164
Facility Agreement, the Intercreditor Agreements or any such
other document.
(b) The Borrower(s), the Guarantor(s), the Arranger, the Facility Agent,
the Security Agent, the Banks and the parties to the Intercreditor
Agreements hereby agree amongst themselves and with the Ancillary Bank
that the Ancillary Bank shall become party to the Facility Agreement
and the Intercreditor Agreements with effect from the date of this
Accession Agreement.
3. Law
This Nominee Notice shall be governed by and construed in accordance with
English law.
IN WITNESS WHEREOF the parties hereto have caused this Nominee Notice to be duly
executed on the date first written above.
SIGNATURES
Nominated Affiliate:
[ ]
Facility Agent:
CHASE MANHATTAN INTERNATIONAL LIMITED for itself and )
as the Facility Agent and Security Agent for and on )
behalf of the Arranger and the Banks )
)
By:
Obligors' Agent
DERBY CYCLE CORPORATION for itself as the Company )
and for and on behalf of each of the Borrowers and )
Guarantors )
165
SCHEDULE 14
SECURITY DOCUMENTS
The Security Agent will be a party to the following Security Documents which
will be governed by and subject to the applicable laws of the countries as
indicated below:
Document Obligor Giving security
-------- -----------------------
1. NETHERLANDS
-----------
(a) First Pledge of Intellectual Property Rights Koninklijke Gazelle BV
(b) First Pledge of Receivables Lyon Investments BV
(each Obligor will enter into a separate pledge) Derby Nederland BV
Raleigh BV
Raleigh Europe BV
Derby Holding BV
Koninklijke Gazelle BV
(c) First Pledge of Tangibles Raleigh BV
(each Obligor will enter into a separate pledge) Koninklijke Gazelle BV
(d) Mortgage of Real Property Koninklijke Gazelle BV
(e) Dutch Law Share Pledges: over the following
shares:
(i) Lyon Investments BV (66 2\3%) The
Derby Cycle Corporation
(ii) Derby Holding BV (66 2\3%)
Derby Nederland BV Lyon Investments BV
Derby Nederland BV
(i) Raleigh BV
(ii) Koninklijke Gazelle BV
NV Dierense Maatschapij Tot Koninklijke Gazelle BV
Exploitatie van Woningen en Asuranien
Raleigh Europe BV Derby Holding BV
2. CANADA
------
(a) General Security Agreement Raleigh Industries of Canada Limited
(b) Charge/Mortgage of Land Raleigh Industries of Canada Limited
(c) Hypothec on Moveable Property Raleigh Industries of Canada Limited (Les
Industries Raleigh du Canada Limitee)
166
Document Obligor Giving security
-------- -----------------------
(d) Hypothec on Immoveable Property Raleigh Industries of Canada Limited (Les
Industries Raleigh du Canada Limitee)
(e) Canadian Law Pledge over shares in the following:
Century Cycle Manufacturing Corporation Raleigh Industries of Canada Limited
3. UNITED STATES OF AMERICA
------------------------
(a) Security Agreement The Derby Cycle Corporation
(b) US Law Share Pledge over shares in the following:
(i) Derby Trading Co. Inc
(ii) Lyon Investments BV (66 2/3 %) The Derby Cycle Corporation
(iii) Derby Cycle Corporation Limited (66 2/3 %)
(iv) Derby Holdings BV (66 2/3 %)
(v) Raleigh Industries of Canada Limited (66 2/3 %)
(vi) Derby Holding (Deutschland) GmbH (5%)
(c) US Patent Assignment for Security Purposes The Derby Cycle Corporation
(d) US Patent and Trademark Security Agreement The Derby Cycle Corporation
(e) US Amendment to Security Agreement The Derby Cycle Corporation
(f) US Amendment to Patent and Trademark Security The Derby Cycle Corporation
Agreement
(g) US Patent Assignment for Security Purposes The Derby Cycle Corporation
(h) Leasehold Deed of Trust The Derby Cycle Corporation
(i) The Bikeshop Share Pledge The Derby Cycle Corporation
(j) The ▇▇▇▇▇▇▇▇.▇▇▇ Security Documents
5. HONG KONG
---------
167
Document Obligor Giving security
-------- -----------------------
(a) Hong Kong Law Charge Over Shares in the
following:
Derby (HK) Trading Company Limited Derby Trading Co. Inc.
6. IRELAND
-------
(a) Debenture Raleigh Ireland Limited
(each Obligor will enter into a separate Curragh Finance Company
Debenture)
(b) Irish law pledges over the share in the
following:
Curragh Finance Company Limited N.W. Sportgerate
GmbH (49%)
(i) Raleigh Ireland Limited Derby Holding BV
(ii) Curragh Finance Company Limited (50%)
(c) Irish Supplemental Deed Raleigh Ireland Limited
Curragh Finance Company
7. GERMANY
-------
(a) Security Agreements with Follow Up Assignments Derby Cycle Werke GmbH
(each Obligor will enter into a separate ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Bike-Parts GmbH
document): Raleigh Fahrrader GmbH
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ GmbH
Univega Bikes & Sports Europe GmbH (formerly MS
Sport Vertriebs GmbH)
Derby Fahrrader GmbH
(b) Deeds of Assignment in respect of Tangible Derby Cycle Werke GmbH
Moveable Property: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Bike-Parts GmbH
(each Obligor will enter into a separate Derby Fahrrader GmbH
document): ▇▇▇▇▇▇-▇▇▇▇▇▇▇ GmbH
(c) Assignments of Owner's Land Charges: Derby Cycle Werke GmbH
(each Obligor will enter into a separate ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Bike-Parts GmbH
document)
(d) Insurance Assignment Agreements: Derby Cycle Werke GmbH
(each Obligor will enter into a separate Raleigh Fahrrader GmbH
document) ▇▇▇▇▇▇-▇▇▇▇▇▇▇ GmbH
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Bike Parts GmbH
Univega Bikes & Sports Europe GmbH (formerly MS
Sport Vertriebs GmbH)
Derby Fahrrader GmbH
(e) Intellectual Property Pledge: Derby Cycle Werke GmbH
(each Obligor will enter into a separate Univega Bikes & Sports Europe GmbH (formerly MS
document) Sport Vertriebs GmbH)
Univega Worldwide Licence GmbH
▇▇▇▇▇▇-▇▇▇▇▇▇▇ GmbH
168
Document Obligor Giving security
-------- -----------------------
(f) Assignment of Inter-Company Indebtedness: Raleigh Fahrrader GmbH
(each Obligor will enter into a separate Derby Cycle Werke GmbH
document) Univega Worldwide Licence GmbH
▇▇▇▇▇▇-▇▇▇▇▇▇▇ GmbH
Derby Holding (Deutschland) GmbH
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Bike Parts GmbH
Univega Bikes & Sports Europe GmbH (formerly MS
Sport Vertriebs GmbH)
(g) Securitisation Plan Derby Cycle Werke GmbH
Derby Holding (Deutschland) GmbH
Derby Fahrrader GmbH
Derby WS Vermogensverwaltungs GmbH
NW Sportgerate GmbH
Univega Beteiligungen GmbH
Univega Worldwide Licence GmbH
Raleigh Fahrrader GmbH
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Bike Parts GmbH
Univega Bikes & Sports Europe GmbH (formerly MS
Sport Vertriebs GmbH)
▇▇▇▇▇▇-▇▇▇▇▇▇▇ GmbH
(h) German Amendment Agreement: Univega Worldwide Licence GmbH
▇▇▇▇▇▇-▇▇▇▇▇▇▇ GmbH
Derby Holding (Deutschland) GmbH
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Bike Parts GmbH
Univega Bikes & Sports Europe GmbH (formerly MS
Sport Vertriebs GmbH)
(i) Blanket Assignments Univega Worldwide Licence GmbH
NW Sportgerate Vertriebs GmbH
(j) German Law Pledges over the following shares:
Derby Holding (Deutschland) GmbH The Derby Cycle Corporation
(i) Derby Fahrrader GmbH Derby Holding (Deutschland) GmbH
(ii) Raleigh Fahrrader GmbH
(iii) Derby WS Vermogensverwaltungs GmbH
(iv) Univega Beteilingungen GmbH
(v) Univega Worldwide Licence GmbH
Derby Cycle Werke GmbH Raleigh Fahrrader GmbH
▇▇▇▇▇▇-▇▇▇▇▇▇▇ GmbH Derby Vermogensverwaltungs
Gesellschaft GmbH
(i) Univega Bike & Sports Europe GmbH Univega Beteiligungen GmbH
(formerly MS Sport Vertriebs GmbH)
169
Document Obligor Giving security
-------- -----------------------
(ii) MS Sport AG
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Bike-Parts GmbH Lyon Investments BV
NW Sportgerate GmbH Derby Cycle Werke GmbH
NW Sportgerate GmbH Derby Cycle Werke GmbH
Curragh Finance Company (49%) NW Sportgerate GmbH
Derby Holding (Deutschland) GmbH Derby Holding BV
8. ENGLAND
-------
(a) English Debenture Derby Holding Limited
(global debenture for all English Obligors) Raleigh Industries Limited
Raleigh International Limited
Derby Cycle Corporation Limited (formerly
Sturmey-▇▇▇▇▇▇ Limited)The British Cycle
Corporation Limited
BSA Cycles Limited
The Triumph Cycle Company Corporation
(b) English Law Charge over Shares in the
following Company:
Derby Corporation Limited (formerly The Derby Cycle Corporation
Sturmey-▇▇▇▇▇▇ Limited) (66 2/3)
Various Raleigh (Services) Limited
9. SWEDEN
------
(a) Swedish Law Pledge over Shares in the
following Company:
Derby Sweden AB The Derby Cycle Corporation
(b) Derby Sweden AB Floating Charge
(c) Pledge over Trademarks Derby Sweden AB
170
THE DERBY CYCLE CORPORATION
By:
The Other Borrowers
RALEIGH INDUSTRIES LIMITED
By:
THE DERBY CYCLE CORPORATION LIMITED
By:
DERBY HOLDING (DEUTSCHLAND) GMBH
By:
KONINKLIJKE GAZELLE BV
By:
RALEIGH INDUSTRIES OF CANADA LIMITED
By:
RALEIGH EUROPE B.V.
By:
RALEIGH B.V.
By:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ BIKE PARTS GMBH
By:
171
▇▇▇▇▇▇-▇▇▇▇▇▇▇ GMBH
By:
DERBY HOLDING LIMITED
By:
RALEIGH FAHRRADER GMBH
By:
DERBY CYCLE WERKE GMBH
By:
RALEIGH INTERNATIONAL LIMITED
By:
CURRAGH FINANCE COMPANY
By:
RALEIGH IRELAND LIMITED
By:
DERBY HOLDINGS BV
The Guarantors
DERBY HOLDING LIMITED
By:
RALEIGH INDUSTRIES LIMITED
By:
172
RALEIGH INTERNATIONAL LIMITED
By:
DERBY CYCLE CORPORATION LIMITED
By:
RALEIGH INDUSTRIES OF CANADA LIMITED
By:
DERBY CYCLE CORPORATION
By:
RALEIGH BV
By:
RALEIGH EUROPE BV
By:
KONINKLIJKE GAZELLE BV
By:
DERBY NEDERLAND BV
By:
DERBY HOLDING BV
By:
▇▇▇
▇▇▇▇ INVESTMENTS BV
By:
DERBY HOLDING (DEUTSCHLAND) GMBH
By:
RALEIGH FAHRRADER GMBH
By:
NW SPORTGERATE GMBH
By:
DERBY CYCLE WERKE GMBH
By:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ BIKE PARTS GMBH
By:
UNIVEGA WORLDWIDE LICENCE GMBH
By:
UNIVEGA BETEILIGUNGEN GMBH
By:
UNIVEGA BIKER & SPORTS EUROPE GmbH
(formerly MS SPORT VERTRIEBS GMBH)
By:
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ GMBH
By:
DERBY WS VERMOGENSWERWALTUNGS GMBH
By:
▇▇▇▇▇▇-▇▇▇▇▇▇▇ GMBH
By:
CURRAGH FINANCE COMPANY
By:
RALEIGH IRELAND LIMITED
By:
INTER-DERBY GROUP FINANCE B.V.
By:
TRIUMPH CYCLE CO. LIMITED
By:
175
▇▇▇▇▇▇▇▇.▇▇▇, INC.
By:
DERBY SWEDEN AB
By:
RALEIGH (SERVICES) LIMITED
By:
The Original Banks
THE CHASE MANHATTAN BANK
By:
ABN AMRO BANK N.V.
By:
SCOTIABANK EUROPE PLC
By:
DRESDNER BANK AG, GRAND CAYMAN BRANCH
By:
BANK OF SCOTLAND
By:
176
HSBC BANK
By:
LLOYDS TSB BANK PLC
By:
THE SUMITOMO BANK, LIMITED
By:
BHF - BANK AG
By:
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By:
SAN PAOLO IMI SPA
By:
KBC BANK (NEDERLAND) N.V.
By:
BNP PARIBAS
By:
THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND
By:
177
OLDENBURGISCHE LANDESBANK AG
By:
THE BANK OF NOVA SCOTIA
By:
The Additional Banks
THE CHASE MANHATTAN BANK
By:
HSBC BANK PLC
By:
LLOYDS TSB BANK PLC
By:
KBC BANK (NEDERLAND) N.V.
By:
ABN AMRO BANK N.V.
By:
BNP PARIBAS
By:
The Facility Agent
CHASE MANHATTAN INTERNATIONAL LIMITED
By:
178
The Security Agent
CHASE MANHATTAN INTERNATIONAL LIMITED
By:
The Arranger
CHASE MANHATTAN plc
By:
179