Ashurst ▇▇▇▇▇▇ ▇▇▇▇▇
CONFORMED COPY
Project Apollo
$45,000,000 Mezzanine Loan Agreement
Barclays Leveraged Finance
RBS Mezzanine Limited
as Mezzanine Joint Mandated Lead Arrangers
RBS Mezzanine Limited
as Mezzanine Facility Agent
Barclays Bank PLC
as Security Agent
relating to the acquisition of Riverdeep Group Plc
18 January 2003
The rights and obligations of the parties to this agreement are subject to an
Intercreditor Deed described in this agreement.
CONTENTS
CLAUSE PAGE
1. INTERPRETATION..........................................................1
2. THE FACILITY...........................................................20
3. PARTICIPATION OF MEZZANINE LENDERS.....................................21
4. CONDITIONS PRECEDENT...................................................22
5. DRAWDOWN PROCEDURES....................................................23
6. INTEREST...............................................................25
7. SELECTION OF INTEREST PERIODS..........................................27
8. MARKET DISRUPTION......................................................27
9. REPAYMENT OF ADVANCE...................................................28
10. PREPAYMENT AND CANCELLATION............................................28
11. PAYMENTS...............................................................33
12. TAXES..................................................................36
13. CHANGE IN CIRCUMSTANCES................................................38
14. FEES, EXPENSES AND STAMP DUTIES........................................40
15. GUARANTEE AND INDEMNITY................................................41
16. CHANGES TO OBLIGORS AND SECURITY.......................................45
17. REPRESENTATIONS AND WARRANTIES.........................................46
18. UNDERTAKINGS...........................................................54
19. EVENTS OF DEFAULT......................................................81
20. THE AGENTS AND THE OTHER MEZZANINE FINANCE PARTIES.....................87
21. PRO RATA PAYMENTS......................................................93
22. SET-OFF................................................................95
23. NOTICES................................................................95
24. CONFIDENTIALITY........................................................97
25. CHANGES TO PARTIES.....................................................97
26. MEZZANINE LENDERS' DECISIONS..........................................101
27. INDEMNITIES...........................................................102
28. MISCELLANEOUS.........................................................103
29. GOVERNING LAW AND SUBMISSION TO JURISDICTION..........................104
SCHEDULE 1...................................................................106
Mezzanine Lenders............................................................106
SCHEDULE 2...................................................................107
Borrower.....................................................................107
SCHEDULE 3...................................................................108
Guarantors...................................................................108
SCHEDULE 4...................................................................109
Part 1 - Conditions Precedent to signing this agreement......................109
Part 2 - Conditions Precedent - First Drawdown...............................112
Part 3 - Conditions subsequent relating to the granting of security..........115
Part 4 - Corporate Documents in respect of each Obligor......................116
SCHEDULE 5...................................................................117
Drawdown Request.............................................................117
SCHEDULE 6...................................................................118
Transfer Certificate.........................................................118
SCHEDULE 7...................................................................123
Part 1 - Accession Document..................................................123
Part 2 - Guarantee Increase Deed.............................................127
SCHEDULE 8...................................................................129
Mandatory Cost formulae......................................................129
SCHEDULE 9...................................................................132
Part 1 - Initial Obligors....................................................132
Part 2 - Target Companies....................................................133
Part 3 - Target Companies Post Whitewash Security............................135
SCHEDULE 10..................................................................136
Dormant Companies............................................................136
THIS CREDIT AGREEMENT is made on 18 January 2003
BETWEEN:
(1) HERTAL ACQUISITIONS PLC (a company incorporated in the Republic of
Ireland with registered number 317234) (the "Parent") as the Borrower;
(2) THE COMPANIES LISTED IN SCHEDULE 3 each as Guarantors;
(3) BARCLAYS LEVERAGED FINANCE and RBS MEZZANINE LIMITED (in this
capacity, together the "Mezzanine Joint Mandated Lead Arrangers");
(4) THE FINANCIAL INSTITUTIONS LISTED IN SCHEDULE 1 as Mezzanine Lenders;
(5) RBS MEZZANINE LIMITED, in its capacity as mezzanine facility agent for
the Mezzanine Lenders under the Mezzanine Finance Documents (the
"Mezzanine Facility Agent"); and
(6) BARCLAYS BANK PLC, in its capacity as agent and trustee for the
Mezzanine Finance Parties under the Security Documents (the "Security
Agent").
THE PARTIES TO THIS AGREEMENT AGREE as follows:
1. INTERPRETATION
1.1 Definitions
In this agreement:
"Accession Document" means an agreement substantially in the form set
out in schedule 7 part 1 under which a Group Company becomes a
Guarantor and becomes a party to the Intercreditor Deed;
"Accountants' Report" means the accountants' reports in the approved
form prepared by KPMG in relation to the Target Group and covering
accounting, tax and commercial due diligence and a review of the
feasibility of the Irish financial assistance whitewash procedure
together with the KPMG Tax Structure Paper;
"Accounting Quarter" means each period of approximately 13 weeks
ending on the last day of March, June, September and December in a
Financial Year;
"Additional Cost Rate" has the meaning given to it in schedule 8
(Mandatory Cost Formulae).
"Advance" means the principal amount of the advance made or to be made
under the Facility, as reduced from time to time by repayment or
prepayment;
"Affiliate" means a Subsidiary or a Holding Company of another person
or any other Subsidiary of a Holding Company of that other person;
"Agent" means each of the Mezzanine Facility Agent and the Security
Agent;
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"Alchemy Bridge Documents" means the Alchemy Bridge Facility Agreement
and the Alchemy Undertaking;
"Alchemy Bridge Facility Agreement" means the bridge facility
agreement in the agreed form entered into on or prior to the date of
this agreement between Loan Noteco and Barclays Bank PLC;
"Alchemy Undertaking" means the undertaking in the agreed form dated
on or about the date of this agreement whereby Alchemy Partners
(Guernsey) Limited undertakes to Barclays Bank PLC to make funds
available to the Parent in the circumstances set out therein;
"Annual Accounts" means the audited annual accounts of the Group
delivered or to be delivered to the Mezzanine Facility Agent under
clause 18.10(c)(i) (Financial statements);
"Approved Accounting Principles" means Irish gaap and, subject to
those principles, the accounting principles, standards and practices
on the basis of which the Original Audited Accounts were prepared;
"Auditors" means KPMG or any other firm of accountants which the
Parent appoints in accordance with clause 18.10(b) (Books of account
and auditors);
"Availability Period" means the period starting on the date of this
agreement and ending on the expiry of the Certain Funds Period;
"Borrower" means the Parent;
"Business Day" means a day (other than a Saturday or a Sunday) on
which banks and financial markets are open in London and Dublin for
the transaction of business of the nature required by this agreement
and:
(a) in relation to a transaction involving Euros, which is also a
TARGET Day; and
(b) in relation to a transaction involving any other Optional
Currency, on which banks and foreign exchange markets are also
open in the principal financial centre of the country of that
Optional Currency;
"Capital Expenditure" means expenditure which should be treated as
capital expenditure in accordance with the Approved Accounting
Principles;
"Capitalising Rate" means 4 per cent. per annum;
"Cash Collateral Account" means an account with the Security Agent (or
any other Mezzanine Lender) opened in the name of an Obligor which is
designated by the Parent and the Mezzanine Facility Agent for the
purpose of receiving payments of cash collateral under clause 1.4
(Cash cover) and/or clause 10 (Prepayment and cancellation) and over
which the Security Agent has a first priority security interest under
the Security Documents;
"Cashflow" has the meaning given to it in clause 18.15 (Financial
definitions);
"Certain Funds Period" means the period commencing on the date hereof
and ending on the earliest of:
(a) the date which falls four months after the posting of the Offer
Document;
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(b) the date on which the Offer lapses or is withdrawn;
(c) the date which falls 15 days after the Offer has closed,
or if the Parent issues notices under Section 204 of the Irish
Companies Act 1963 before the earliest of such dates, such longer
period as is necessary to acquire the remaining shares in the Target
pursuant to Section 204 provided in any event the Certain Funds Period
shall end on the date falling six months from the date of the posting
of the Offer Document;
"Clean Up Period" means the period commencing on the Unconditional
Date and ending 60 days later;
"Code" means the Irish Takeover Panel Act, 1997, Takeover Rules 2001
and the Irish Takeover Panel Act, 1997, Substantial Acquisition Rules,
2001 in each case made by the Irish Takeover Panel pursuant to the
Irish Takeover Panel Act, 1997 (as such rules may be revised, amended
or replaced from time to time);
"Commitment" means:
(a) in relation to a Mezzanine Lender identified in schedule 1, the
amount set opposite its name under the heading " Commitment" in
schedule 1 and the amount of any other Commitment transferred to
it under this agreement; or
(b) in relation to any other Mezzanine Lender, the amount of any
Commitment transferred to it under this agreement,
to the extent not cancelled, reduced or transferred by it under this
agreement;
"Completion Date" means the Drawdown Date;
"Compliance Certificate" means any compliance certificate provided in
accordance with clause 20.10(d) (Compliance certificates);
"Constitutional Documents" means the constitutional documents of the
Parent in the agreed form;
"Creditor Accession Deed" has the meaning given to it in the
Intercreditor Deed;
"Default" means an Event of Default or a Potential Event of Default;
"Dollar Equivalent" means, in relation to an amount denominated in a
currency other than Dollars, the amount of that currency converted
into Dollars at the Spot Rate;
"Dollars" and "$" means the lawful currency of the United States of
America;
"Dormant Company" means each Group Company listed in Schedule 10
(Dormant Companies) and any other Group Company which has not traded
or has ceased trading and which the Parent demonstrates to the
Mezzanine Facility Agent's satisfaction does not own assets or have
liabilities (excluding liabilities owed to another Group Company) in
either case with an aggregate value greater than $100,000 (or its
Dollar Equivalent) or which are otherwise material to the running of
the Group's business;
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"Drawdown Date" means the date for the making of the Drawing, as
specified by the Borrower in the Drawdown Request;
"Drawdown Request" means the notice requesting the Advance in the form
set out in schedule 5;
"Drawing" means the utilisation by the Borrower of the Facility by way
of the making of the Advance;
"Drawstop Default" means any Event of Default arising under any of the
following provisions (but only so far as they affect or relate to
Parent, Loan Noteco or (in the case of clauses 19.1(e), (f), (g), (h)
and (j) only and to the extent only that such Event of Default would
constitute an event which would enable the Parent to invoke conditions
2(i)(xiii) or (xiv) of Appendix 2 of the Press Release as such
conditions are reflected in the Offer Document (regardless of whether
the Parent has so invoked such condition of the Offer)) the Target:
(a) clause 19.1(b) (Breach of other obligations) by virtue of a
breach of any of the undertakings in clause 18.3(c) (Negative
pledge), clause 18.5 (Financing Arrangements and Undertakings) or
paragraphs (b)(ii), (e) or (f) of clause 18.11 (Offer
undertakings);
(b) clause 19.1(c) (Misrepresentation) by virtue of a breach of any
of the representations in clauses 17.2 (Incorporation) to 17.5
(No contravention) (inclusive), 17.19(a) (Newly incorporated
companies) or 17.20 (Offer Document);
(c) clause 19.1(d) (Invalidity and Unlawfulness);
(d) clause 19.1(e) (Insolvency);
(e) clause 19.1(f) (Receivership and administration);
(f) clause 19.1(g) (Compositions and arrangements);
(g) clause 19.1(h) (Winding up); and
(h) clause 19.1(j) (Suspension of Payments).
"EBITA" has the meaning given to it in clause 18.15 (Financial
definitions);
"EBITDA" has the meaning given to it in clause 18.15 (Financial
definitions);
"Employee Benefit Arrangements" means the benefit schemes or
arrangements in respect of any employees or past employees operated by
any Group Company or in which any Group Company participates and which
provides benefits on retirement, ill-health or injury, death or
voluntary withdrawal from or involuntary termination of employment,
including termination indemnity payments, life assurance arrangements
and post retirement medical benefit;
"English Debenture" means a debenture governed by the laws of England
and Wales in the agreed form granting fixed and floating charges over
the assets and undertaking of the relevant company or companies in
favour of the Security Agent;
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"Environment" means all gases, air, vapours, liquids, water, land,
surface and sub-surface soils, rock, flora, fauna, wetlands and all
other natural resources or part of such resources, including
artificial or man-made buildings, structures or enclosures;
"Environmental Approval" means any consent required under or in
relation to Environmental Laws;
"Environmental Laws" means all international, European Union,
national, federal, state or local statutes, orders, regulations or
other law or subordinate legislation or common law or guidance notes
or regulatory codes of practice, circulars and equivalent controls
including judicial interpretation of any of the foregoing concerning
the Environment or health and safety which are in existence now or in
the future and are binding at any time on each Group Company in the
relevant jurisdiction in which that Group Company has been or is
operating (including by the export of its products or its waste to
that jurisdiction);
"Equity Documents" means the Constitutional Documents, the Investment
Agreement, the Investor Loan Note Instruments, the Investor Loan
Notes, the Alchemy Bridge Documents and all other documents and
agreements entered into in connection with any of those documents;
"Equity Investors" means the Original Equity Investors and, to the
extent any Investor Loan Notes are issued to Barclays Bank PLC in
accordance with the Alchemy Bridge Documents, Barclays Bank PLC in
such capacity, and any assignee or transferee of any interest in the
Group under the Investment Agreement or of any other rights under any
Equity Document;
"ERISA" means Employee Retirement Income Security Act of 1974 (as
amended) and any rule or regulation issued thereunder;
"ERISA Affiliate" shall mean each business or entity which is a member
of a "controlled group of corporations," under "common control" or an
"affiliated service group" with a Group Company within the meaning of
Sections 414(b), (c) or (m) of the IR Code, or required to be
aggregated with a Group Company under Section 414(o) of the IR Code,
or is under "common control" with a Group Company, within the meaning
of section 4001(a)(14) of ERISA;
"EURIBOR" means, in relation to the Advance or any overdue amount:
(a) the rate per annum equal to the offered quotation which appears
on Telerate Screen page 248 (or any replacement page on that
service) at or about 11.00 am (Central European Time) on the
applicable Rate Fixing Day for the currency of the Advance or
overdue amount for a period comparable to its Interest Period or,
if no Telerate service is available, on any other service which
displays an average European Banking Federation Interest
Settlement Rate for the relevant currency which the Mezzanine
Facility Agent, after consultation with the Mezzanine Lenders and
the Parent selects;
(b) if no such offered quotation appears at or about 11.00 a.m. on
the relevant Rate Fixing Day:
(i) the arithmetic mean (rounded up, if necessary, to the
nearest four decimal places) of the rates (as quoted to the
Mezzanine Facility Agent at its request) offered by the
Reference Banks to leading banks in the London interbank
market at or about 11.00 a.m. on the applicable Rate Fixing
Day for the currency of the Advance or overdue amount in an
amount equal or comparable to the Advance or overdue amount
for the duration of the relevant Interest Period; or
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(ii) subject to clause 8.1 (Market Disruption Notice), if any
Reference Bank does not provide a quotation as contemplated
by sub-paragraph (i) above, the relevant arithmetic mean
determined on the basis of the quotations supplied by the
remaining Reference Banks;
"Euro" and "e" means the single currency of Participating Member
States of the European Union;
"Event of Default" means any event specified in clause 19.1 (List of
events);
"Excess Cashflow" means Cashflow for a Financial Year less the
aggregate of Total Debt Service for that Financial Year;
"Existing Mezzanine Lender" has the meaning given to it in clause 25.2
(Transfers by Mezzanine Lender);
"Facility" means the term loan facility made available by the
Mezzanine Lenders under clause 2.1 (Facility);
"Finance Documents" means the Senior Finance Documents and the
Mezzanine Finance Documents;
"Financial Assistance Documents" means the documents in the agreed
terms relating to the financial assistance procedures to be undertaken
by members of the Target Group in accordance with this agreement
subject to such amendments thereto as the Mezzanine Facility Agent may
reasonably require in order that such documents may conform with best
practice having regard to the circumstances prevailing at the time
such documents are entered into;
"Financial Indebtedness" means (without double counting) any
indebtedness in relation to or arising under or in connection with:
(a) any money borrowed (including any overdraft);
(b) any debenture, bond (other than a performance bond issued in the
ordinary course of trading by one Group Company in relation to
the obligations of another Group Company), note or loan stock or
other similar instrument;
(c) any acceptance or documentary credit;
(d) any receivable sold or discounted (otherwise than on a
non-recourse basis);
(e) the purchase price of any asset or service to the extent payable
by a Group Company after the time of sale or delivery to a Group
Company, where the deferred payment is:
(i) arranged as a method of raising finance; or
(ii) paid more than six months after the sale or delivery date;
(f) the sale price of any asset or service to the extent paid before
the time of sale or delivery by the Group Company liable to
effect that sale or delivery, where the advance payment is
arranged as a method of raising finance;
(g) any finance lease, hire purchase, credit sale or conditional sale
agreement;
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(h) for the purpose of clause 19.1(o) (Cross default) only, Hedging
Instruments;
(i) any amount payable by any Obligor in relation to the redemption
of any share capital or other securities issued by it or any
other Obligor, other than amounts payable to another Obligor;
(j) any amount raised under any other transaction having the
commercial effect of a borrowing or treated as borrowings under
the Approved Accounting Principles; or
(k) any guarantee of indebtedness of any person of a type referred to
in paragraphs (a) to (j) (inclusive) above;
"Financial Year" means the period of 12 months ending on 30 June in
each year (or, after the Group adopts 31 December as its accounting
reference date, 31 December);
"Foothill Borrowers" means Riverdeep Interactive Learning Limited and
Riverdeep, Inc.;
"Foothill Facilities" means the facilities made available to the
Foothill Borrowers pursuant to the Foothill Facility Agreement;
"Foothill Facility Agreement" means the loan and security agreement
dated 23 August 2002 entered into between Target, Riverdeep
Interactive Learning Limited, Riverdeep, Inc. and Foothill Capital
Corporation;
"Formalities Certificate" means a certificate in the agreed form or
with such amendments thereto as the Mezzanine Facility Agent may
reasonably require having regard to the circumstances affecting any
particular Group Company;
"Group" means the Parent and its Subsidiaries from time to time;
"Group Company" means a member of the Group;
"Guarantee Increase Deed" means a deed substantially in the form set
out in Schedule 7 part 2 extending the guarantees given pursuant to
18.5(g) (Guarantees and security from Target and its Subsidiaries) to
guarantee the Advance and any other obligations under the Mezzanine
Finance Documents which have been whitewashed through execution of the
Financial Assistance Documents pursuant to clause 18.11(h)(ii) (Take
private procedure and provision of Target security);
"Guarantors" means the Group Companies listed in schedule 3 and each
other Group Company which becomes a guarantor under this agreement in
accordance with clause 16.1 (Additional Guarantors), clause 18.5(g)
(Guarantees and Security from Target and its Subsidiaries) or clause
18.11(h) (Take private procedure and provision of Target security);
"Hedging Agreements" means any instrument and/or agreement entered
into by a Group Company in accordance with clause 18.5(d) (Hedging)
for the purpose of managing or hedging currency and/or interest rate
risk in relation to the Facility and any Hedging Debenture;
"Hedging Debenture" means a guarantee and debenture governed by the
laws of the Republic of Ireland in the agreed form granting fixed and
floating charges over the assets and undertaking of the relevant
company or companies in favour of the Security Agent to secure all
obligations outstanding under the Hedging Agreements;
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"Hedging Instrument" means any forward rate agreement, option, swap,
cap, floor, any combination or hybrid of the foregoing and any other
financial derivative agreement;
"Hedging Lender" means a Senior Lender or a Mezzanine Lender (or an
Affiliate of a Senior Lender or a Mezzanine Lender) in its capacity as
provider of currency and/or interest rate hedging under any Hedging
Agreement;
"Holding Company" means a holding company as defined in section 736 of
the Companies ▇▇▇ ▇▇▇▇ but excluding any of the Original Equity
Investors;
"Individual Shareholders" means ▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
and which shall, in the case of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ include Lifetime
Learning Limited;
"Insurance Report" means the insurance report in the agreed form
prepared by AON, together with the employee benefits due diligence
report in the agreed form also prepared by AON;
"Intellectual Property" means the Intellectual Property Rights owned
or used by Group Companies throughout the world or the interests of
any Group Company in any of those Intellectual Property Rights,
together with the benefit of all agreements entered into or the
benefit of which is enjoyed by any Group Company relating to the use
or exploitation of any of those Intellectual Property Rights;
"Intellectual Property Rights" means all patents and patent
applications, trade and service marks and trade and/or service ▇▇▇▇
applications (and all goodwill associated with any such registrations
or applications), all brand and trade names, all copyrights and rights
in the nature of copyright, all design rights, all registered designs
and applications for registered designs, all trade secrets, know-how
and all other intellectual property rights throughout the world;
"Intercreditor Deed" means the intercreditor deed dated on or about
the date of this agreement and entered into between, amongst others,
each of the parties to the Mezzanine Finance Documents, the Mezzanine
Finance Documents and each of the Original Equity Investors;
"Interest Period" means a period by reference to which interest is
calculated and payable on the Advance or overdue amount;
"Investment Agreement" means the shareholders' agreement in the agreed
form dated on or before the date of this agreement between, amongst
others, the Original Equity Investors providing, amongst other things,
for the subscription of shares in the Parent;
"Investor Loan Note Instrument" means the loan note instrument in the
agreed form dated on or before the date of this agreement providing
for the issue of the Investor Loan Notes;
"Investor Loan Notes" means the subordinated unsecured guaranteed loan
notes 2009 of Loan Noteco in the agreed form;
"IR Code" means the Internal Revenue Code of 1986, as amended,
reformed or otherwise modified from time to time, including the
regulations promulgated thereunder;
"Irish Debenture" means a debenture governed by the laws of the
Republic of Ireland in the agreed form granting fixed and floating
charges over the assets and undertaking of the relevant company or
companies in favour of the Security Agent;
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"Irish gaap" means generally accepted accounting principles from time
to time in the Republic of Ireland and approved by the Accounting
Standards Board;
"Key Executive" means each of ▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇;
"Key Executive Policies" means the insurance policies effected or to
be effected by the Parent in relation to the lives of each Key
Executive, in each case for cover (for $1,500,000) for death and
critical illness for a term of 3 years, in accordance with clause
18.6(a)(ii) (Insurance);
"KPMG Tax Structure Paper" means the structure paper prepared by KPMG
in a form agreed with the Mezzanine Facility Agent dated on or about
the date of this agreement;
"Lead Equity Investors" means limited partnerships managed by Alchemy
Partners (Guernsey) Limited (and the nominee company of those limited
partnerships, being currently Alchemy Partners Nominees Limited);
"Legal Report" means the legal report in the approved form prepared by
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and White & Case LLP in relation to the
Target Group;
"Lending Office" means the office through which a Mezzanine Lender is
acting for the purposes of this agreement, which, subject to clause
3.2 (Lending Office), will be the office set opposite the name of that
Mezzanine Lender in schedule 1 (or in any relevant Transfer
Certificate);
"LIBOR" means, in relation to the Advance or any overdue amount:
(a) the rate per annum equal to the offered quotation which appears
on Telerate Screen page 3750 or (as appropriate) 3740 (or any
replacement pages on that service) at or about 11.00 am on the
applicable Rate Fixing Day for the currency of the Advance or
overdue amount for a period comparable to its Interest Period or,
if no Telerate service is available, on any other service which
displays an average British Bankers Association Interest
Settlement Rate for the relevant currency which the Mezzanine
Facility Agent, after consultation with the Mezzanine Lenders and
the Parent, selects; and
(b) if no such offered quotation appears on Telerate Page 3750 or
3740 (as the case may be) at or about 11.00 am on the relevant
Rate Fixing Day:
(i) the arithmetic mean (rounded up, if necessary, to the
nearest four decimal places) of the rates (as quoted to the
Mezzanine Facility Agent at its request) offered by the
Reference Banks to leading banks in the London interbank
market at or about 11.00 am on the applicable Rate Fixing
Day for the currency of the Advance or overdue amount in an
amount equal or comparable to the Advance or overdue amount
for the duration of the relevant Interest Period; or
(ii) subject to clause 8.1 (Market Disruption Notice), if any
Reference Bank does not provide a quotation as contemplated
by sub-paragraph (i) above, the relevant arithmetic mean
determined on the basis of the quotations supplied by the
remaining Reference Banks;
"Loan Noteco" means Hertal (Investments) Limited;
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"Majority Mezzanine Lenders" means, at any time:
(a) Mezzanine Lenders whose aggregate Commitments at that time
aggregate more than 662/3 per cent. of the Total Commitments at
that time; or
(b) if the Total Commitments have at that time been reduced to zero,
Mezzanine Lenders whose Commitments aggregated more than 662/3
per cent. of the Total Commitments immediately before the
relevant reduction;
"Management Accounting Period" means each calendar month period
adopted by the Parent for the purpose of its management accounts;
"Management Financial Model" means the financial model in the agreed
form for the Group (and incorporating financial projections and
forecasts for the business of the Target Group in the agreed form)
dated on or around the date of this agreement;
"Mandatory Cost" means the percentage rate per annum calculated by the
Mezzanine Facility Agent in accordance with schedule 8 (Mandatory Cost
Formulae) and any costs as a result of a Mezzanine Lender complying
with Regulation D of the US Board of Governors to the Federal Reserve
System;
"Margin" means 6 per cent. per annum;
"Margin Addition" means 2 per cent. per annum;
"Market Report" means the market report in the approved form prepared
by McKinsey & Company in relation to the Target Group;
"Material Adverse Effect" means any effect, event or matter:
(a) which is materially adverse to:
(i) the assets or financial condition of the Group (taken as a
whole);
(ii) the ability of the Obligors to perform their payment
obligations under any Mezzanine Finance Document or their
obligations under clause 18.14 (Financial covenants) of this
agreement; or
(b) which results in any Security Document not providing to the
Security Agent security over the assets expressed to be secured
under that Security Document;
"Material Intellectual Property" means any Intellectual Property which
is material to the business of any Group Company or to the business of
the Group as a whole from time to time;
"Material Subsidiary" means:
(a) any Obligor; or
(b) a Subsidiary of the Parent the gross assets, gross revenues or
EBITA of which (consolidated where that Subsidiary itself has
Subsidiaries) as at the date at which its latest audited
consolidated financial statements were prepared or, as the case
may be, for the financial period to which those financial
statements relate account for 5 per cent or more of the
consolidated
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gross assets, gross revenues or EBITA of the Group (all as
calculated by reference to the latest audited consolidated
financial statements of the Group); or
(c) a Subsidiary of the Parent to which has been transferred (whether
in a single transaction or a series of transactions (whether
related or not)) the whole or substantially the whole of the
assets of a Subsidiary which immediately prior to such
transactions was a Material Subsidiary.
For the purposes of this definition:
(i) if a Subsidiary of the Parent becomes a Material Subsidiary
under paragraph (c) above, then the Material Subsidiary by
which the relevant transfer was made shall, subject to
paragraph (a) and (b) above, cease to be a Material
Subsidiary; and
(ii) if a Subsidiary is acquired by the Parent after the end of
the financial period to which the latest audited
consolidated financial statements of the Group relate, those
financial statements shall be adjusted as if that Subsidiary
had been shown in them by reference to its then latest
audited financial statements (consolidated if appropriate)
until audited consolidated financial statements of the Group
for the financial period in which the acquisition is made
have been prepared;
"Mezzanine Agency Fees Letter" means the letter from the Mezzanine
Facility Agent to the Parent dated on or about the date of this
agreement setting out details of certain fees payable by the Parent in
connection with the Facility;
"Mezzanine Arrangers' Fees Letter" means the letter from the Mezzanine
Joint Mandated Lead Arrangers to the Parent dated on or about the date
of this agreement setting out details of certain fees payable by the
Parent in connection with the Facility;
"Mezzanine Fees Letters" means the Mezzanine Agency Fees Letter and
the Mezzanine Arranger's Fees Letter;
"Mezzanine Finance Documents" means this agreement, each Security
Document, the Intercreditor Deed, each Hedging Agreement, each
Accession Document, each Transfer Certificate, the Mezzanine Fees
Letters and any other document designated as a Mezzanine Finance
Document by the Parent and the Mezzanine Facility Agent;
"Mezzanine Finance Parties" means the Mezzanine Joint Mandated Lead
Arrangers, each Agent, each Mezzanine Lender, and each Hedging Lender;
"Mezzanine Lenders" means:
(a) the parties identified in schedule 1 as participating in the
Facility; and
(b) each Transferee which has become a party to this agreement in
relation to the Facility in accordance with clause 25 (Changes to
parties),
in each case until its entire participation in the Facility has been
assigned or transferred to a Transferee in accordance with clause 25
(Changes to parties) and all amounts owing to it under the Mezzanine
Finance Documents in relation to the Facility have been paid in full;
-11-
"Monthly Accounts" means the monthly consolidated management accounts
of the Group delivered or to be delivered to the Mezzanine Facility
Agent under clause 18.10(c)(ii) (Financial statements);
"Multiemployer Plan" means a Plan that is a "multiemployer plan"
within the meaning of 4001(a)(3) of ERISA;
"National Currency Unit" has the meaning given to it in council
Regulation EC No. 1103/97 of 17 June, 1997 made under Article 235 of
the Treaty on European Union;
"Net Interest" has the meaning given to it in clause 18.15 (Financial
definitions);
"Net Proceeds" means the aggregate consideration received by any Group
Company in relation to the disposal of all or any part of the assets
of any Group Company (including the amount of any inter-company debt
of any Group Company disposed of which is repaid in connection with
that disposal and any disposal (by way of grant of licence or
otherwise) of any Intellectual Property), but after deducting all
Taxes and other reasonable costs and expenses incurred by continuing
Group Companies in connection with that disposal;
"Obligors" means the Parent, Loan Noteco, the Borrower and each
Guarantor;
"Offer" means the recommended pre-conditional cash offer with a
partial share alternative proposed to be made by the Parent and
(outside the United States) Goodbody Corporate Finance and ▇▇ ▇▇▇▇▇▇
PLC on behalf of the Parent on the terms set out in the Press Release
to acquire the whole of the ordinary share capital of Target not
already owned by the Parent as such offer may from time to time be
amended, increased, revised or waived, as permitted in accordance with
the terms of this agreement;
"Offer Costs" means all costs, fees and expenses (and Taxes thereon)
and all stamp, documentary, registration or similar taxes and duties
payable by or incurred by or on behalf of the Parent and the Target
Group in connection with the Offer including, without limitation, the
preparation, negotiation and entry into of the necessary financing
documents and all other documentation in relation to the Offer;
"Offer Document" means the document (substantially in the agreed terms
subject to such amendments as the Mezzanine Facility Agent shall
approve in writing (such approval not to be unreasonably withheld or
delayed)) to be sent to shareholders of the Target containing the
formal Offer;
"Operating Budget" means a budget, in such form and content as the
Mezzanine Facility Agent shall reasonably require, comprising
projected balance sheet, projected profit and loss account and
projected cashflow statement (including details of projected Capital
Expenditure) for the Group for a Financial Year, delivered under
clause 18.10 (Information and accounting undertakings);
"Optional Currencies" means Euros, Dollars and any other currency
which the Mezzanine Facility Agent has confirmed to the Parent is
freely available in the London foreign exchange market and which all
relevant Mezzanine Lenders have confirmed they are willing to advance;
"Original Audited Accounts" means the audited consolidated annual
accounts of the Target Group for the Financial Year ending 30 June
2002;
"Original Equity Investors" means the Lead Equity Investors, MSD
Capital and the Individual Shareholders;
-12-
"Original Dollar Amount" means:
(a) if the Drawing is in Dollars, the amount of the Drawing; or
(b) if the Drawing is in an Optional Currency, the Dollar Equivalent
of the Drawing calculated two Business Days before the Drawdown
Date;
"Original Management Accounts" means the unaudited consolidated
management accounts of the Target Group for the month ending 30
November 2002;
"Panel" means the Irish Takeover Panel;
"Participating Member States" has the meaning given to it in council
Regulation EC No. 1103/97 of 17 June, 1997 made under Article 235 of
the Treaty on European Union;
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto;
"Plan" means an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the IR Code maintained by or contributed to by any
Group Company or Guarantor or any ERISA Affiliate;
"Potential Event of Default" means an event which, with the giving of
notice, the lapse of time, the making of any determination or the
fulfilment of any other condition (in each case as specified in clause
19.1 (List of events)) will, or could reasonably be expected to,
constitute an Event of Default;
"Press Release" means the press announcement in the agreed form to be
released by the Parent to announce the terms of the Offer;
"Qualifying Mezzanine Lender" means, in relation to the Borrower, a
Mezzanine Lender which is:
(a) under the domestic law of the jurisdiction in which the Borrower
is resident, entitled to receive payments of interest (or any
other payments under any Mezzanine Finance Document) arising in
that jurisdiction free of any deduction or withholding for or on
account of any Tax; or
(b) under a double tax treaty in force between the jurisdiction in
which the Borrower is resident and the jurisdiction in which that
Mezzanine Lender is resident (as the term is defined in the
relevant double tax treaty), entitled to receive payments of
interest (or any other payments under any Mezzanine Finance
Document) arising in the Borrower's jurisdiction free of any
deduction or withholding for or on account of any Tax;
"Quarterly Accounts" means the relevant Monthly Accounts for each
Accounting Quarter;
"Rate Fixing Day" means the day which market practice in the
applicable interbank market treats as the rate fixing day for
obtaining deposits in the currency in question;
"Receiving Agent" means Computershare Investor Services (Ireland)
Limited of ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇, Republic of Ireland;
"Receiving Agent Account" means the account opened by the Parent with
the Receiving Agent for the purpose of receiving monies up-streamed to
the Parent by the Loan Noteco from the proceeds of
-13-
subscriptions for loan stock in Loan Noteco and the proceeds of
subscriptions for shares in the Parent pursuant to the Investment
Agreement;
"Reference Banks" means the principal London offices of Barclays Bank
PLC and of The Royal Bank of Scotland plc and such other banks as may
be appointed by the Mezzanine Facility Agent in consultation with the
Parent.
"Repayment Date" means 15 April 2009;
"Reportable Event" means:
(a) a reportable event as defined in Section 4043 of ERISA and the
regulations issued under such Section, with respect to a Plan,
excluding, however, such events as to which the PBGC by
regulation waived the requirement of Section 4043(a) of ERISA
that it be notified within 30 days of the occurrence of such
event, provided, however, that a failure to meet the minimum
funding standard of Section 412 of the IR Code and of Section 302
of ERISA shall be a Reportable Event regardless of the issuance
of any such waiver of the notice requirement in accordance with
either Section 4043(a) of ERISA or Section 412(d) of the IR Code;
or
(b) the withdrawal of an Obligor or any ERISA Affiliate from a Plan
during a plan year in which it was a "substantial employer" as
defined in section 4001(a)(2) of ERISA;
(c) (the filing (or reasonable expectation of a filing) of a notice
of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under section 4041 of ERISA;
(d) the institution of proceedings to terminate a Plan by the PBGC;
(e) any other event or condition which constitutes grounds under
section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan; or
(f) a Group Company establishes or amends any Welfare Plan that
provides post-employment welfare benefits in a manner that would
increase the liability of a Group Company;
"Reports" means the Accountants' Report, the Legal Report, Insurance
Report and the Market Report, in each case read in conjunction with
the relevant disclosures in the disclosure letter from management
delivered pursuant to the Investment Agreement;
"Reservations" means the principle that equitable remedies are
remedies which may be granted or refused at the discretion of the
court and damages may be regarded as an adequate remedy, the
limitation of enforcement by laws relating to bankruptcy, insolvency,
court protection, liquidation, reorganisation, court schemes,
moratoria, administration and other laws generally affecting the
rights of creditors, the time-barring of claims under the Limitation
Acts (and similar legislation), the possibility that an undertaking to
assume liability for or to indemnify a person against non-payment of
stamp duty may be void, the fact that a court may refuse to give
effect to a purported contractual obligation to pay costs imposed upon
another party in respect of the costs of any unsuccessful litigation
brought against that party or may not award by way of costs all of the
expenditure incurred by a successful litigant in proceedings brought
before that court, or that a court may stay proceedings if concurrent
proceedings based on the same grounds and between the same parties
have previously been brought before another court, that a court may
not give effect to the provisions of clause 28.3 (Invalidity of any
Provision) (or any similar provision in another Mezzanine Finance
Document) and that interest at a default rate on overdue amounts may
be a penalty and not recoverable;
-14-
"Second Press Release" means the press release in agreed form
confirming the satisfaction of the pre-conditions in the Press
Release;
"Security Documents" means each of the security documents specified in
schedule 9 and all other documents creating, evidencing or granting a
Security Interest in favour of any Mezzanine Finance Party in relation
to the obligations of any Obligor under any Mezzanine Finance
Document;
"Security Interest" means any mortgage, charge (fixed or floating),
pledge, lien, hypothecation, right of set-off, security trust,
assignment by way of security, reservation of title, any other
security interest or any other agreement or arrangement (including a
sale and repurchase arrangement) having the commercial effect of
conferring security;
"Senior Credit Agreement" means the senior credit agreement in the
agreed form dated on or about the date of this agreement between the
Parent as borrower, the Parent and Loan Noteco as guarantors, Barclays
Leveraged Finance and The Royal Bank of Scotland plc as Joint Lead
Arrangers, the lenders named in that agreement and Barclays Bank PLC
as Facility Agent and Security Agent;
"Senior Discharge Date" has the meaning given to it in the
Intercreditor Deed;
"Senior Facilities" means the "Facilities" as defined in the Senior
Credit Agreement;
"Senior Finance Documents" has the meaning given to it in the Senior
Credit Agreement;
"Senior Lenders" means "Lenders" as defined in the Senior Credit
Agreement;
"Senior Term Facilities" means "Term Facilities" as defined in the
Senior Credit Agreement;
"Service Contracts" means:
(a) the contracts of employment made between Riverdeep Inc. and each
of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ each as amended by a Deed of
Variation of Employment Terms entered into by Riverdeep Inc. and
each of them on or before the Unconditional Date;
(b) the contract of employment dated 6 October 1999 made between
Silverbank Limited and ▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇ as amended by a Deed of
Variation of Employment Terms dated on or before the
Unconditional Date;
(c) agreement for the provision of services of a chief executive
officer dated 22 September 1999 made between Riverdeep
Interactive Learning Limited and Silverbank Limited as amended by
a Deed of Variation of an Agreement dated on or before the
Unconditional Date; and
(d) the restrictive covenant agreement to be entered into between
Riverdeep Interactive Learning Limited and ▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇ to
be dated on or before the Unconditional Date;
"Share Option Scheme" means the share option scheme in the agreed form
to be implemented by the Parent after the Unconditional Date;
"Share Pledge" means a pledge of shares governed by English law;
-15-
"Sonopress Contract" means the services agreement by and between
Sonopress LLC and Broderbund LLC dated 1 July 2002 and any replacement
thereof;
"Spot Rate" means the spot rate of exchange of the Mezzanine Facility
Agent (as determined by the Mezzanine Facility Agent) for the purchase
of Dollars with the appropriate amount of a currency in the London
foreign exchange market in the ordinary course of business at or about
10.00 am on the day in question for delivery two Business Days later;
"Sterling" or "(pound)" means the lawful currency of the United
Kingdom;
"Structure Document" means the document prepared by the Parent
comprising:
(a) diagrams of the Group and the Target Group as at the date of this
agreement and as they are anticipated to be immediately after the
Unconditional Date;
(b) brief corporate details as at the date of the Structure Document
indicating which members of the Target Group are Dormant
Companies and which had positive net assets at the date of their
most recent audited account;
(c) details of the anticipated movements of funds in repayment of
existing facilities of the Target Group which will take place on,
or within 30 days after, the Unconditional Date; and
(d) details of the anticipated sources of funds for the purposes of
the Offer;
"Subsidiary" means a subsidiary and (for the purposes of the financial
information to be delivered, and the financial covenants to be
complied with, under this agreement) a subsidiary undertaking as
defined in sections 736 and 258 of the Companies ▇▇▇ ▇▇▇▇
respectively;
"Syndication Date" means the earlier of:
(a) the date the Mezzanine Facility Agent notifies the Parent and the
other Mezzanine Finance Parties that primary syndication has been
completed; and
(b) the date falling four months after the Drawdown Date;
"Syndication Memorandum" shall have the meaning set out in clause 3.4
(Syndication);
"Target" means Riverdeep Group Plc (registered no 317234);
"TARGET Day" means a day on which the Trans-European Automated
Real-time Gross Settlement Express Transfer system is operating;
"Target Group" means Target and all its Subsidiaries;
"Target Shares" means shares in the Target;
"Tax" means all present and future income and other taxes, levies,
assessments, imposts, deductions, charges, duties, compulsory loans
and withholdings (wherever imposed) and any charges in the nature of
taxation together with interest thereon and penalties and fines in
relation thereto, if any, and any payments made on or in relation
thereof and "Taxation" shall be construed accordingly;
-16-
"Total Commitments" means the aggregate of all the Commitments at any
time;
"Total Debt Service" has the meaning given to it in clause 18.15
(Financial definitions);
"Transaction Documents" means the Finance Documents, the Equity
Documents, the Service Contracts, the Press Release and the Offer
Document;
"Transfer Certificate" means a certificate substantially in the form
set out in part 1 of schedule 5;
"Transferee" has the meaning given to it in clause 25.2(a)
(Assignments and transfers by Mezzanine Lenders);
"Treaty on European Union" means the Treaty of Rome signed on 25 March
1957 as amended by the Single ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and the Maastricht
Treaty signed on 7 February 1992;
"TU Agreement" means the asset purchase agreement dated 29 May 2002
between Target, TU SUB LLC and Teacher Universe Inc.;
"Unconditional Date" means the date on which the Offer is declared
unconditional in all respects;
"Underwriting Agreement" means the agreement to be entered into
between Hertal Acquisitions plc and ▇▇▇ ▇▇▇▇▇▇▇▇, in the agreed form;
"Unfunded Liabilities" means the amount (if any) by which the present
value of all nonforfeitable benefits under each of the Plans exceeds
the current value of such Plan assets allocable to such benefits, all
determined in accordance with the respective most recent valuations
for such Plan using applicable PBGC plan termination actuarial
assumptions (the terms "present value" and "current value" shall have
the same meanings specified in section 3 of ERISA);
"USA" means the United States of America;
"US Bankruptcy Code" means title 11 of the United States Code;
"US Obligor" means any Obligor that is incorporated under the laws of
any state or territory of the USA or the District of Columbia; and
"Warrant Instrument" means the warrant instrument, in the agreed
terms, constituting the warrants issued in accordance with this
agreement; and
"Welfare Plan" means a "welfare plan" as such term is defined in
section 3(1) of ERISA.
1.2 Construction
In this agreement, unless a contrary intention appears, a reference
to:
(a) a document being "in the agreed form" means in a form agreed
between the Parent and the Mezzanine Facility Agent;
(b) an "agreement" includes any legally binding arrangement,
concession, contract, deed or franchise (in each case whether
oral or written);
-17-
(c) an "amendment" includes any amendment, supplement, variation,
novation, modification, replacement or restatement and "amend",
"amending" and "amended" shall be construed accordingly;
(d) a Report being in the "approved form" means a Report the scope
and content of which has been approved by the Mezzanine Joint
Mandated Lead Arrangers, which is addressed to (and can be relied
on by) the Mezzanine Finance Parties from time to time and which
has been duly signed by its author;
(e) "assets" includes property, business, undertaking and rights of
every kind, present, future and contingent (including uncalled
share capital) and every kind of interest in an asset;
(f) a "consent" includes an authorisation, approval, exemption,
licence, order, permission or waiver;
(g) a "filing" includes any filing, registration, recording or
notice;
(h) a "guarantee" includes any indemnity or other obligation
(whatever called) of any person:
(i) to pay, purchase, provide funds (whether by the advance of
money, the purchase of or subscription for shares or other
investments, the purchase of assets or services, the making
of payments under an agreement or otherwise) for the payment
of, indemnify against the consequences of default in the
payment of, or otherwise be responsible for, any
indebtedness of any other person; or
(ii) to be responsible for the performance of any obligations by
or the solvency of any other person,
and "guaranteed" and "guarantor" shall be construed accordingly;
(i) "including" means including without limitation and "includes" and
"included" shall be construed accordingly;
(j) "indebtedness" includes any obligation (whether incurred as
principal, guarantor or as surety) for the payment or repayment
of money, whether present or future, actual or contingent;
(k) "losses" includes losses, actions, damages, claims, proceedings,
costs, demands, expenses (including fees) and liabilities and
"loss" shall be construed accordingly;
(l) a "month" means a period starting on one day in a calendar month
and ending on the numerically corresponding day in the next
calendar month, except that:
(i) if any such period would otherwise end on a day which is not
a Business Day, it shall end on the next Business Day in the
same calendar month or, if none, on the preceding Business
Day; and
(ii) if a period starts on the last Business Day in a calendar
month, or if there is no numerically corresponding day in
the month in which that period ends, that period shall end
on the last Business Day in that later month,
and references to "months" shall be construed accordingly;
-18-
(m) a "person" includes any person, individual, firm, company,
corporation, government, state or agency of a state or any
undertaking (within the meaning of section 259(1) of the
Companies Act 1985) or other association (whether or not having
separate legal personality) or any two or more of the foregoing;
(n) a "regulation" includes any regulation, rule, official directive,
request or guideline (whether or not having the force of law) of
any governmental body, agency, department or regulatory,
self-regulatory or other authority or organisation;
(o) the "winding-up" of any person includes its dissolution and/or
termination and/or any equivalent or analogous proceedings under
the law of any jurisdiction in which that person is incorporated,
registered, established or carries on business or to which that
person is subject; and
(p) an obligation to pay interest under any of the Mezzanine Finance
Documents includes, for the avoidance of doubt an obligation to
pay post-petition interest in any proceeding under the US
Bankruptcy Code or other applicable bankruptcy laws.
1.3 Other references
In this agreement, unless a contrary intention appears:
(a) a reference to any person is, where relevant, deemed to be a
reference to or to include, as appropriate, that person's
successors and permitted assignees or transferees;
(b) references to clauses and schedules are references to,
respectively, clauses of and schedules to this agreement and
references to this agreement include its schedules;
(c) a reference to (or to any specified provision of) any agreement
or document (including the Mezzanine Finance Documents) is to be
construed as a reference to that agreement or document (or that
provision) as it may be amended from time to time, but excluding
for this purpose any amendment which is contrary to any provision
of any Mezzanine Finance Document;
(d) a reference to a statute, statutory instrument or accounting
standard or any provision thereof is to be construed as a
reference to that statute, statutory instrument or accounting
standard or such provision thereof, as it may be amended or
re-enacted from time to time;
(e) a time of day is a reference to London time;
(f) the index to and the headings in this agreement are inserted for
convenience only and are to be ignored in construing this
agreement; and
(g) words importing the plural shall include the singular and vice
versa.
1.4 Cash Collateral Accounts
Any amounts standing to the credit of any Cash Collateral Account
shall bear interest at the rate normally offered to corporate
depositors on similar deposits by the Mezzanine Finance Party with
which that account is held.
-19-
1.5 Currency conversion
For the purposes of the Mezzanine Finance Documents (other than
clauses 18.14 (Financial covenants) to 18.16 (Calculation)
(inclusive)), if a Dollar amount needs to be determined, any amount
which is denominated in a currency other than Dollars will be
converted into Dollars using the Spot Rate on that date.
2. THE FACILITY
2.1 Facility
Subject to the other provisions of this agreement the Mezzanine
Lenders agree to make available to the Parent a term loan facility in
a maximum aggregate principal amount not exceeding $45,000,000 (or its
equivalent in Euro) which shall be available by way of one Advance.
2.2 Purpose
(a) The proceeds of the Advance shall be applied in or towards:
(i) payment of the cash price payable by the Parent for the
Target Shares pursuant to the Offer and pursuant to exercise
of its rights under section 204 of the Irish Companies Act,
1963; and/or
(ii) (only after the Unconditional Date) financing or refinancing
the Offer Costs up to $36,000,000.
(b) No Mezzanine Finance Party shall be obliged to enquire about, or
be responsible for, the use or application of amounts borrowed
under this agreement.
2.3 Parent as Obligors' agent
Each Obligor irrevocably appoints the Parent as its agent for the
purpose of:
(a) executing and delivering on its behalf any Accession Document and
any other agreement or document capable of being entered into by
that Obligor under or in connection with the Mezzanine Finance
Documents;
(b) giving and receiving any notice or instruction under or in
connection with any Mezzanine Finance Document (including the
Drawdown Request); and
(c) agreeing and executing all consents, agreements and amendments
(however fundamental and notwithstanding any increase in
obligations of or other effect on an Obligor) entered into in
connection with the Mezzanine Finance Documents (including
confirmation of continuation of guarantee obligations in
connection with any amendment or consent in relation to the
Facility).
-20-
3. PARTICIPATION OF MEZZANINE LENDERS
3.1 Basis of participation
Subject to the other provisions of this agreement each Mezzanine
Lender will participate in the Drawing in the proportion which its
Commitment in relation to the Facility bears to the total Commitments
in relation to the Facility as at the Drawdown Date;
3.2 Lending Office
(a) Each Mezzanine Lender will participate in each Drawing through
its Lending Office.
(b) If any Mezzanine Lender changes its Lending Office for the
purpose of the Facility, that Mezzanine Lender will, as soon as
reasonably practicable after that change, notify it to the
Mezzanine Facility Agent and the Parent and, until it does so,
the Agents and the Parent will be entitled to assume that no such
change has taken place.
3.3 Rights and obligations of Mezzanine Finance Parties
(a) The rights and obligations of each of the Mezzanine Finance
Parties under the Mezzanine Finance Documents are several. The
failure by a Mezzanine Finance Party to comply with its
obligations under any Mezzanine Finance Document shall not:
(i) result in any other Mezzanine Finance Party incurring any
liability; or
(ii) relieve any Obligor or any other Mezzanine Finance Party
from its obligations under the Mezzanine Finance Documents.
(b) Subject to the other provisions of the Mezzanine Finance
Documents, each Mezzanine Finance Party has the right to protect
and enforce its rights arising out of the Mezzanine Finance
Documents and it will not be necessary for any other Mezzanine
Finance Party to be joined as an additional party in any
proceedings brought for the purpose of protecting or enforcing
those rights.
3.4 Syndication
(a) The Facility is being made available by the Mezzanine Lenders
with the intention (but not the obligation) that the Mezzanine
Joint Mandated Lead Arrangers should co-ordinate primary
syndication. Each Obligor undertakes to assist and co-operate
with the Mezzanine Joint Mandated Lead Arrangers in syndication
in such a manner and to such an extent as the Mezzanine Joint
Mandated Lead Arrangers may reasonably request, including by:
(i) the preparation, review and approval of a syndication
information memorandum (the "Syndication Memorandum") in
relation to the Group and the business, trading, prospects,
financial condition, assets and liabilities of the Group as
a whole and of each Group Company;
(ii) participating in presentations to potential Mezzanine
Lenders concerning the activities of the Group as a whole
and of each Group Company; and
-21-
(iii)selecting Interest Periods in relation to the Advance no
longer than one month until the date falling four months
after the Drawdown Date.
(b) Before the Syndication Date, no Mezzanine Lender may assign,
transfer, sub-participate, sub-contract or deliver a Transfer
Certificate in relation to all or any part of its rights or
obligations under any Mezzanine Finance Document without the
prior consent of the Mezzanine Facility Agent.
4. CONDITIONS PRECEDENT
4.1 Initial conditions precedent
The Mezzanine Lenders shall not be under any obligation to make the
Drawing available to any Borrower unless:
(a) on or before the date of this agreement, the Mezzanine Facility
Agent has received each of the documents, information and/or
other items specified in part 1 of schedule 4 in form and
substance satisfactory to the Mezzanine Facility Agent (acting
reasonably); and
(b) on or before the Drawdown Date, the Mezzanine Facility Agent has
received each of the documents, information and/or other items
specified in part 2 of schedule 4 (or the Mezzanine Facility
Agent is satisfied that, subject only to the making of the
Advance it will receive such documents, information and/or other
items) in form and substance satisfactory to the Mezzanine
Facility Agent (acting reasonably); and
(c) subject to clause 4.4 (Certain Funds Period), the conditions set
out in clause 4.3 (Additional conditions precedent) have been
fulfilled.
The Mezzanine Facility Agent will promptly notify the Parent and the
Mezzanine Lenders when the conditions in clause 4.1(a) or clause
4.1(b), as the case may be, are satisfied.
4.2 Failure to satisfy conditions precedent
Except as the Mezzanine Facility Agent (acting on the instructions of
all the Mezzanine Lenders) agrees otherwise, if the conditions
referred to in clause 4.1 (Initial conditions precedent) have not been
fulfilled or waived in writing on or before the last day of the
Availability Period:
(a) all the Commitments will automatically be cancelled; and
(b) the Mezzanine Lenders will cease to have any obligation to make
the Drawing available.
4.3 Additional conditions precedent
Subject to clause 4.4 (Certain Funds Period), the obligations of the
Mezzanine Lenders to make the Drawing available are subject to the
further conditions precedent that, on both the date of the Drawdown
Request and the Drawdown Date:
(a) no Default has occurred and is continuing or will occur as a
result of making the Drawing; and
(b) the representations and warranties set out in clause 17
(Representations and warranties) which are made or repeated on
those dates are true and accurate by reference to the facts and
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circumstances then subsisting and will remain true and accurate
immediately after the Drawing is made.
4.4 Certain Funds Period
During the Certain Funds Period neither the Mezzanine Facility Agent
nor any of the Mezzanine Lenders will:
(a) invoke any conditions set out in clause 4.3 (Additional
conditions precedent) or otherwise as a ground for refusing to
make the Advance during the Certain Funds Period to the extent it
is to be applied solely for the purpose specified in clause
2.2(a)(i) or (ii) (an "Offer Utilisation");
(b) exercise any right, power or discretion to terminate or cancel
the obligation to make any Offer Utilisation (other than under
clause 13.2 (Illegality));
(c) exercise any right of rescission which it or they may have in
respect of this agreement or in respect of any Offer Utilisation;
or
(d) exercise any rights conferred on them by any Mezzanine Finance
Document to take any action to recover monies advanced to the
Parent solely for the purpose specified in clause 2.2(a)(i) or
(ii) and not yet applied for such purpose,
unless a Drawstop Default has occurred.
5. DRAWDOWN PROCEDURES
5.1 Delivery of Drawdown Request
In order to utilise the Facility, the Borrower must deliver to the
Mezzanine Facility Agent the duly completed Drawdown Request not later
than 10.00 am three Business Days before the proposed Drawdown Date.
5.2 Content of Drawdown Request
The Drawdown Request delivered to the Mezzanine Facility Agent must be
in the applicable form set out in schedule 5 and must specify (or
attach, as appropriate) the following:
(a) which Facility is to be utilised;
(b) the identity of the Borrower;
(c) the proposed Drawdown Date, which must be a Business Day during
the relevant Availability Period;
(d) the amount and currency of the Advance, which must, in the case
of the Advance being in Dollars, be equal to or less than the
undrawn Commitments for the Facility or if the Drawing is in
Euros under the Facility the Dollar Equivalent of the Drawing
must be equal to or less than the undrawn Commitments for the
Facility and in each case if less, a minimum of $750,000 and an
integral multiple of $250,000;
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(e) the first Interest Period applicable to the Advance, which must
comply with clause 7 (Selection of Interest Periods);
(f) details of the payee and the account to which the proceeds of the
Drawing are to be paid;
5.3 Requests irrevocable
The Drawdown Request once given may not be withdrawn or revoked.
5.4 Notice to the Mezzanine Lenders of the proposed Drawing
The Mezzanine Facility Agent will promptly give each Mezzanine Lender
details of the Drawdown Request received and of the amount of that
Mezzanine Lender's participation in the Drawing referred to in the
Drawdown Request.
5.5 Making of the Advance
Subject to the provisions of this agreement, each Mezzanine Lender
will make available to the Mezzanine Facility Agent its participation
in the Advance on the Drawdown Date.
5.6 Automatic cancellation
Any part of the Commitments undrawn by 2.30pm on the last day of the
relevant Availability Period will be automatically cancelled.
5.7 Optional Currency availability
If the Borrower requests the Drawing denominated in an Optional
Currency under the Facility and, before 10.00 am on the Rate Fixing
Day for the Drawing, the Mezzanine Facility Agent receives notice from
a Mezzanine Lender (an "Affected Mezzanine Lender") that:
(a) the Optional Currency requested is not readily available to it in
the amount required; or
(b) compliance with its obligation to participate in the Drawing in
the Optional Currency requested would contravene a law or
regulation applicable to that Affected Mezzanine Lender, then:
(i) the Mezzanine Facility Agent will notify the Borrower to
that effect by 12.00 am (noon) on that Rate Fixing Day;
(ii) following any such notification the Borrower may notify the
Mezzanine Facility Agent by 2.00pm on that Rate Fixing Day
that it no longer requires the Drawing to be made;
(iii)if the Mezzanine Facility Agent does not receive
notification under clause 5.7(b)(ii), the Borrower and the
Mezzanine Facility Agent shall agree to adjust the amount of
the Drawing to exclude the participation of the Affected
Mezzanine Lender; and
(iv) the Affected Mezzanine Lender shall make a separate advance
in Dollars in an amount equal to the Dollar Equivalent of
the Affected Mezzanine Lender's proposed participation in
the Advance.
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5.8 Optional Currency fluctuations
(a) The Mezzanine Facility Agent shall, if so requested by the
Majority Mezzanine Lenders:
(i) calculate the aggregate Dollar Equivalent of all outstanding
amounts under the Facility as at the end of the Accounting
Quarter in which that request was made (or on any other date
reasonably requested by the Majority Mezzanine Lenders); and
(ii) if the amount calculated under clause 5.8(a)(i) exceeds the
aggregate Commitments by more than five per cent., notify
the Parent to that effect.
(b) Within five Business Days of any notification under clause
5.8(a)(ii), the Parent shall prepay (or procure the prepayment
of) the Drawing under the Facility so as to reduce the aggregate
Dollar Equivalent of all outstandings under each the Facility to
an amount not exceeding the aggregate Commitments.
6. INTEREST
6.1 Rate
Subject to clause 6.2 (Capitalising Interest), the Advance will bear
interest (the "Current Pay Interest") for each of its Interest Periods
is the rate per annum determined by the Mezzanine Facility Agent to be
the aggregate of:
(a) the Margin for the Advance;
(b) EURIBOR (in the case of the Advance being denominated in Euro or
National Currency Units) or LIBOR (in the case of the Advance
being denominated in any other currency) for the Advance during
that Interest Period; and
(c) the Mandatory Cost (if any) for the Advance during that Interest
Period; and
(d) to the extent clause 6.8 (Margin Increase) is applicable, the
Margin Addition.
6.2 Capitalising Interest
In addition to the interest referred to above, the Advance shall also
bear interest at the Capitalising Rate ("Capitalising Interest"), and
an amount equal to the Capitalising Interest shall be capitalised on
the last day of each Interest Period, and on any date of repayment or
prepayment so as to form part of the Advance, and shall thereafter
bear interest together with the rest of the Advance in accordance with
this clause 6.
6.3 Calculation
Interest will accrue daily from and including the first day of an
Interest Period and be calculated on the basis of a 365 day year in
relation to the Advance if it is in Sterling (or any other currency
where market practice so requires) and a 360 day year in any other
case.
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6.4 Payment
The Borrower will pay the Cash Pay Interest accrued on the Advance to
the Mezzanine Facility Agent (for the account of the Mezzanine
Lenders) in arrear on the last day of each Interest Period for the
Advance and also, where that Interest Period is longer than six
months, on the last day of each consecutive period of six months from
(and including) the first day of that Interest Period.
6.5 Default interest
If an Obligor fails to pay any amount under any Mezzanine Finance
Document on its due date (including any amount payable under this
clause 6.5) (an "overdue amount"), that Obligor will pay default
interest on that overdue amount from its due date to the date of
actual payment (both before and after judgment) at a rate (the
"Default Rate") determined by the Mezzanine Facility Agent to be one
per cent. per annum above:
(a) where the overdue amount is principal which has become due and
payable before the expiry of the relevant Interest Period, the
rate applicable to that principal immediately before the date it
fell due (but only for the period from that due date to the end
of the relevant Interest Period); or
(b) in any other case (including principal falling within clause
6.5(a) once the relevant Interest Period has expired), the rate
which would be payable if the overdue amount was the Advance made
for a period equal to the period of non-payment divided into
successive Interest Periods of a duration selected by the
Mezzanine Facility Agent (each a "Default Interest Period").
6.6 Compounding
Default interest will be payable on demand by the Mezzanine Facility
Agent and will be compounded at the end of each Default Interest
Period.
6.7 Notification
The Mezzanine Facility Agent will notify the Parent and the Mezzanine
Lenders of each determination of an interest rate (including a default
rate) and each selection of a Default Interest Period under this
clause 6 as soon as reasonably practicable after any such
determination or selection is made.
6.8 Margin Increase
If, on the date falling 180 days after the Unconditional Date any
member of the Target Group incorporated in the Republic of Ireland and
named in schedule 9 has failed to execute a Guarantee Increase Deed or
any Security Document set out in schedule 9 to be executed by such
member of the Target Group or has failed to enter into the Financial
Assistance Documents or otherwise comply with the provisions of
section 60 of the Irish Companies Act, 1963 in all respects in
relation to such Security Documents, the rate of interest applicable
to the Facility shall increase by the rate equal to the Margin
Addition as set out in clause 6.1(d)(Rate).
-26-
7. SELECTION OF INTEREST PERIODS
7.1 Interest Periods
(a) Subject to the provisions of this agreement, each Interest Period
for the Advance shall be one, three or six months as notified by
the Borrower to the Mezzanine Facility Agent no later than 10.00
am three Business Days before the start of that Interest Period
(or any other period which the Mezzanine Facility Agent may
agree).
(b) The first Interest Period for the Advance will start on the
Drawdown Date and each subsequent Interest Period for the Advance
will start on the last day of the immediately preceding Interest
Period for the Advance.
(c) If the Borrower fails to select an Interest Period then, save as
provided in this clause 7, it will be deemed to have selected a
period of three months.
7.2 Non-Business Days
If any Interest Period would, but for this clause 7.2, end on a day
which is not a Business Day, that Interest Period shall be extended to
the immediately following Business Day, unless the result of that
extension would be to carry that Interest Period into another calendar
month, in which case that Interest Period shall end on the immediately
preceding Business Day.
8. MARKET DISRUPTION
8.1 Market Disruption Notice
If, in relation to the Advance (an "Affected Advance"):
(a) the Mezzanine Facility Agent determines that, by reason of
circumstances affecting the applicable interbank market
generally, adequate and fair means do not or will not exist for
ascertaining LIBOR or EURIBOR (as the case may be) applicable to
that Affected Advance for an Interest Period; or
(b) Mezzanine Lenders whose participations in that Affected Advance
exceed 33 per cent. of the amount of that Affected Advance notify
the Mezzanine Facility Agent that deposits will not be available
to them in the London Interbank Market in order to fund their
participations in that Affected Advance for an Interest Period or
that (other than due to the credit rating of the relevant
Mezzanine Lender or Mezzanine Lenders) their cost of obtaining
deposits in order to fund their participations in that Affected
Advance for an Interest Period would exceed LIBOR or EURIBOR (as
the case may be),
the Mezzanine Facility Agent will give notice of that event to the
Parent and the Mezzanine Lenders (a "Market Disruption Notice").
8.2 Substitute basis
During the 30 days following the giving of a Market Disruption Notice,
the Mezzanine Facility Agent and the Parent will negotiate in good
faith in order to agree on a mutually acceptable substitute basis for
calculating the interest payable on the relevant Affected Advance. If
a substitute basis is agreed within that period, then it shall apply
in accordance with its terms (and may be retrospective to the
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beginning of the relevant Interest Period). The Mezzanine Facility
Agent will not agree a substitute basis under this clause 8.2 without
first obtaining the approval of the Mezzanine Lenders.
8.3 Cost of funds
Unless and until a substitute basis is agreed under clause 8.2
(Substitute basis), the interest payable on each Mezzanine Lender's
participation in the relevant Affected Advance for the relevant
Interest Period will be the rate certified by that Mezzanine Lender to
be its cost of funds (from any source which it may reasonably select)
plus the applicable Mandatory Cost plus the applicable Margin.
8.4 Unavailability of Dollars
If Mezzanine Lenders whose participations in the Advance exceed 33 per
cent. of the amount of the Advance notify the Mezzanine Facility Agent
that deposits in Dollars will not be readily available to them in the
London interbank market in order to enable them to fund their
participations in the Advance, the Mezzanine Lenders will not be
obliged to participate in the proposed Drawing and the Drawdown
Request which has been served by the Borrower will be deemed
withdrawn.
9. REPAYMENT OF ADVANCE
The Borrower shall pay the Advance in full on the Repayment Date. No
amount of the Advance which is repaid may be redrawn.
10. PREPAYMENT AND CANCELLATION
10.1 Voluntary prepayment:
The Borrower may prepay all or any part of the Advance at any time,
provided that:
(a) the Mezzanine Facility Agent has received no less than ten
Business Days' irrevocable notice from the Parent of the proposed
date and amount of the prepayment;
(b) any partial prepayment is in a minimum amount of $500,000 and, if
greater, an integral multiple of $250,000; and
(c) if paid other than on the last day of the Interest Period for the
Advance, the Borrower indemnifies the Mezzanine Lenders under
clause 27.1 (General indemnity and breakage costs).
10.2 Additional right of prepayment
If:
(a) the Borrower is required to pay any additional amount to a
Mezzanine Finance Party under clause 12.1 (Gross up) or clause
12.3 (Indemnity); or
(b) the Parent is required to pay any amount to a Mezzanine Lender
under clause 13.1 (Increased costs),
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then, without prejudice to the obligations of any Obligor under those
clauses, the Parent may, whilst the circumstances continue, serve a
notice of prepayment and cancellation on that Mezzanine Lender through
the Mezzanine Facility Agent. If the Parent serves any such notice:
(i) on the date which is ten Business Days after the date of
service of the notice, each Borrower shall prepay that
Mezzanine Lender's participation in the Advance drawn by it
together with accrued interest on the Advance and all other
amounts payable to that Mezzanine Lender under the Mezzanine
Finance Documents; and
(ii) all that Mezzanine Lender's Commitments shall be cancelled
and reduced to zero as at the date of service of the notice.
10.3 Sale, Change of Control and Listing
(a) If a Change of Control, Listing or Sale occurs then (unless the
Majority Mezzanine Lenders otherwise agree in writing):
(i) all of the Mezzanine Lenders' Commitments will immediately
be cancelled and reduced to zero; and
(ii) each Borrower will immediately prepay the Advance.
(b) For the purposes of this agreement:
(i) a "Change of Control" will occur:
(A) if the Lead Equity Investors and ▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ together:
(x) cease after the date of this agreement to be the
legal and beneficial owners of equity share
capital of the Parent having the right to cast
more than 50 per cent. of the votes capable of
being cast in general meetings of the Parent; or
(y) cease after the date of this agreement to have the
right to determine the composition of a majority
of the board of directors (or like body) of the
Parent; or
(z) cease after the date of this agreement to have
"control" (as defined in section 839 Income and
Corporation Taxes Act 1988) of the Parent; or
(B) if the Lead Equity Investors cease to hold 50 per cent.
of the equity share capital of the Parent held by them
as at the Completion Date or of the equity share
capital having the right to cast more than 50 per cent.
of the votes capable of being cast in general meetings
of the Parent held by them as at the Completion Date;
or
(C) if ▇▇▇▇▇ ▇'▇▇▇▇▇▇▇▇▇ ceases to hold 50 per cent. of the
equity share capital of the Parent held by him as at
the Completion Date or of the equity share capital
having the right to cast more than 50 per cent. of the
votes capable of being
-29-
cast in general meetings of the Parent held by him as
at the Completion Date; or
(D) if ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and Lifetime Learning Limited
together cease to hold 50 per cent. of the equity share
capital of the Parent held by them as at the Completion
Date or of the equity share capital having the right to
cast more than 50 per cent. of the votes capable of
being cast in general meetings of the Parent held by
them as at the Completion Date;
(ii) "Listing" means
(A) admission to trading of all or any part of the share
capital of any Group Company or any Holding Company of
the Parent on any recognised investment exchange (as
defined in the Financial Services and Markets Act 2000)
or any other sale or issue by way of flotation or
public offering or any equivalent circumstances in
relation to any Group Company or any Holding Company of
the Parent in any jurisdiction or country;
(B) the raising of funds by any Group Company or any
Holding Company of the Parent (excluding the Original
Equity Investors) in the national or international
equity markets (by way of IPO, private placement of new
shares, public offering or otherwise); and
(iii) "Sale" means a disposal (whether in a single transaction or
a series of related transactions) of all or substantially
all of the assets of the Group or any Holding Company of the
Parent.
10.4 Asset disposals
(a) The Parent shall procure that an amount equal to the Net Proceeds
of a disposal of any asset by a Group Company (including for the
avoidance of doubt any licence of any Intellectual Property)
(other than a disposal permitted by clause 18.3(a)(i) and (iii)
to (v) (inclusive) (Disposals)) is applied in prepayment of the
Facility (subject to clause 10.4(b) and (c)).
(b) Subject to clause 10.4(c) below, Net Proceeds need not be so
applied if:
(i) such Net Proceeds are received in consideration for the
grant of any licence of any Intellectual Property, provided
the requirements of clause 10.4(c) are satisfied; or
(ii) within 180 days after receipt they are reinvested in assets
of a similar type and value required for the business of the
disposing Group Company and following receipt and pending
that reinvestment they are held in a Cash Collateral
Account.
(c) Net Proceeds received by any member of the Group in consideration
for the grant of any licence of Intellectual Property shall be
applied in prepayment of the Facility unless either:
(i) the aggregate amount of Net Proceeds received in respect of
the grant of licences of Intellectual Property in the
relevant Financial Year does not exceed the budgeted Net
Proceeds from such granting of licences set out in the
Management Financial Model or in the Operating Budget (as
applicable) in respect of the relevant Financial Year; or
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(ii) the adult consumer business, children's consumer business
and the school supplemental business of the Group are each,
in the reasonable opinion of the Mezzanine Joint Mandated
Lead Arrangers, operating in accordance with, or better
than, the projections set out in the Accountant's Report by
reference to the Monthly Accounts most recently delivered in
accordance with clause 18.10(c) (Financial statements)
provided that for the avoidance of doubt, any Net Proceeds
retained by the Group prior to the date of the relevant
disposal shall be excluded from such comparison to the
extent included in the Monthly Accounts) and provided
further that the aggregate amount of Net Disposal Proceeds
retained by the Group in accordance with this clause
10.4(c)(ii) shall not exceed $35,000,000 (or its equivalent)
in any Financial Year,
and, in any event, no Default has occurred and is continuing.
10.5 Insurance claims
(a) Subject to clause 10.5(b), if a Group Company receives any
proceeds as a result of making a claim under an insurance policy
(other than proceeds compensating for loss of profit under
business interruption or similar insurance or compensating for
loss of life), the Parent shall procure that an amount equal to
those proceeds (net of any Tax) must be applied in prepayment of
the Facility.
(b) Any amount received or recovered as a result of making a claim
under an insurance policy need not be so applied if:
(i) within 180 days after receipt it is applied in reinstating,
replacing, repairing or otherwise investing in assets in
relation to which that amount was received or meeting a
liability in relation to which that amount was received; and
(ii) following receipt and pending that application any
cumulative amount in excess of $75,000 is held in a Cash
Collateral Account.
10.6 Excess Cashflow
Within ten Business Days after delivery of the Annual Accounts in
relation to each Financial Year the Parent shall procure that an
amount equal to (i) 66 2/3 per cent. of the amount of Excess Cashflow
for that Financial Year minus (ii) (without double counting) the
aggregate amount of prepayments made in accordance with clause 10.1
(Voluntary prepayments), 10.4 (Asset Disposals), 10.5 (Insurance
claims) and 10.7 (Report claims) and any amount permitted to be
retained by the Group in accordance with those clauses during (or
referable to) that Financial Year, to the extent that the relevant
amounts or proceeds giving rise to the relevant prepayments have been
included in calculating Cashflow is applied in prepayment of the
Facility provided that:
(a) in relation to the Financial Year ending in 2003 the reference to
66 2/3 per cent. in (i) above shall be deemed to be a reference
to 100 per cent. until an aggregate amount of (pound)6,000,000
has been prepaid in accordance with this clause 10.6 (Excess
Cashflow) and thereafter shall revert to 66 2/3 per cent. in
respect of any remaining Excess Cashflow; and
(b) in relation to any Financial Year ending in 2004, the reference
to 66 2/3 per cent. in (i) above shall be deemed to be a
reference to 100 per cent. until an aggregate amount of
(pound)11,000,000
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has been prepaid in accordance with this clause 10.6 (Excess
Cashflow) and thereafter shall revert to 66 2/3 per cent. in
respect of any remaining Excess Cashflow; and
(c) in relation to any Financial Year ending after 2004, the
reference to 66 2/3 per cent. in (i) above shall be deemed to be
a reference to 100 per cent. until an aggregate amount of
(pound)11,000,000 has been prepaid in accordance with this clause
12.6 (Excess Cashflow) and thereafter shall be deemed to be a
reference to 50 per cent. in respect of any remaining Excess
Cashflow.
10.7 Report Claims
(a) Subject to clause 10.7(b), if a Group Company receives or
recovers any amount in respect of any liability claim against any
professional adviser who prepared any Report, the Parent shall
procure that an amount equal to that amount (net of any Tax) is
applied in prepayment of the Facility.
(b) Any amount received or recovered in relation to a liability claim
under a Report need not be so applied if:
(i) Within 180 days after receipt it is applied in replacing,
repairing or otherwise investing in assets or meeting
liabilities in relation to which the relevant liability
claim was made; and
(ii) Promptly following receipt and pending that application it
is held in a Cash Collateral Account.
10.8 Order of application of prepayments
(a) Any amount to be applied in prepayment of the Facility under
clause 10.1 (Voluntary prepayments), clause 10.4 (Asset
disposals), clause 10.5 (Insurance claims), clause 10.6 (Excess
Cash Flow) or 10.7 (Report claims) shall be applied in permanent
prepayment of the Advance.
(b) Any Mezzanine Lender may, in its absolute discretion, elect not
to receive any prepayment to be made in accordance with clause
10.1 (Voluntary prepayments), clause 10.4 (Asset disposals),
clause 10.5 (Insurance claims), clause 10.6 (Excess Cash Flow) or
10.7 (Report claims) in which case such prepayment shall be
applied in prepayment of the Commitments of each other Mezzanine
Lender which has not made such an election.
10.9 Prepayments during Interest Periods
Subject to the other provisions of this agreement, any amount required
to be applied in prepayment of the Facility under clauses 10.4 (Asset
disposals), 10.5 (Insurance claims), 10.6 (Excess Cashflow) or 10.7
(Report claims) during an Interest Period for the Advance will be paid
by the Borrower into a Cash Collateral Account and applied (together
with any relevant accrued interest) against the Advance on the expiry
of that Interest Period.
10.10 Restrictions on Prepayment
(a) No prepayment of the Advance may be made except at the times and
in the manner expressly provided by this agreement and the
Intercreditor Deed.
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(b) To the extent that any amount prepaid or required to be prepaid
under this agreement is, by the terms of this agreement, required
to be applied against the Advance or any other sum outstanding
under the Mezzanine Finance Documents, such amount shall only be
so applied, and shall only be required to be so applied
(notwithstanding the relevant provision of this agreement) if and
to the extent that such application is not required to be applied
in making payments to the Senior Lenders under the Senior Credit
Agreement and is in any event permitted under the Intercreditor
Deed.
10.11 Prepayment Premium
If all or any part of the Advance is prepaid at any time on or before
the third anniversary of the Unconditional Date then such prepayment
may only be made if, in addition to all other sums required to be paid
hereunder in connection with such prepayment, the Borrower pays to the
Mezzanine Facility Agent (for the account of the Mezzanine Lenders) on
or before the date of such prepayment set out in column (1) a
prepayment premium calculated by applying to the amount to be prepaid
the applicable percentage set out in column (2) below:
(1) (2)
On or before the second anniversary of 2.00 per cent.
the Unconditional Date
After the second, but on or before the 1.00 per cent.
third anniversary of the Unconditional
Date
10.12 Miscellaneous
(a) Any repayment or prepayment under this agreement must be
accompanied by accrued interest on the amount repaid or prepaid
and any other amount then due under this agreement.
(b) No amount prepaid or cancelled under this clause 10 may be
redrawn or reinstated.
(c) Any notice of prepayment or cancellation given under this
agreement shall be irrevocable and, in the case of notice of
prepayment, the Parent or the Borrower named in that notice shall
be obliged to prepay (or, in the case of the Parent, to procure
prepayment) in accordance with that notice.
(d) No prepayment of the Drawing or cancellation of any Commitment
may be made except in accordance with this agreement.
11. PAYMENTS
11.1 By Mezzanine Lenders
(a) On the date on which the Advance is to be made, each Mezzanine
Lender shall make its participation in the Advance available to
the Mezzanine Facility Agent on that date by payment in the
currency in which the Advance is denominated and in immediately
available cleared funds to the account specified by the Mezzanine
Facility Agent for that purpose.
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(b) The Mezzanine Facility Agent shall make the amounts paid to it
available to the Borrower on the date of receipt by payment in
the same currency as received by the Mezzanine Facility Agent to
the account specified by the Borrower in the notice requesting
the Advance. If any Mezzanine Lender makes its share of the
Advance available to the Mezzanine Facility Agent later than
required by clause 11.1(a), the Mezzanine Facility Agent shall
make that share available to the Borrower as soon as practicable
after receipt.
11.2 By Obligors
(a) On each date on which any amount is due from any Obligor under
the Mezzanine Finance Documents, that Obligor shall pay that
amount on that date to the Mezzanine Facility Agent in
immediately available cleared funds to the account specified by
the Mezzanine Facility Agent for that purpose.
(b) Each payment under this agreement from an Obligor is to be made
in Dollars, except that:
(i) each repayment or prepayment of the Advance shall be in the
currency in which it was drawn;
(ii) each payment of interest shall be in the same currency as
the amount in relation to which that interest is payable;
(iii)each payment in respect of losses shall be made in the
currency in which the losses were incurred;
(iv) each payment under clause 12.1 (Gross up) or clause 13.1
(Increased costs) shall be made in the currency specified by
the claiming Mezzanine Finance Party; and
(v) any amount expressed to be payable in a currency other than
Dollars shall be paid in that other currency.
(c) The Mezzanine Facility Agent shall, on the date of receipt, pay
to the Mezzanine Finance Party to which the relevant amount is
due its pro rata share (if any) of any amounts so paid to the
Mezzanine Facility Agent in the same currency as received by the
Mezzanine Facility Agent to the account specified by that party
to the Mezzanine Facility Agent. If any amount is paid to the
Mezzanine Facility Agent later than required by clause 11.2(a),
the Mezzanine Facility Agent shall make that party's share
available to it as soon as practicable following receipt.
11.3 Assumed receipt
Where an amount is to be paid under any Mezzanine Finance Document for
the account of another person, the Mezzanine Facility Agent will not
be obliged to pay that amount to that person until it is satisfied
that it has actually received that amount. If the Mezzanine Facility
Agent nonetheless pays that amount to that person and the Mezzanine
Facility Agent had not in fact received that amount, then that person
will on request refund that amount to the Mezzanine Facility Agent.
That person will be liable:
(a) to pay to the Mezzanine Facility Agent on demand interest on that
amount at the rate determined by the Mezzanine Facility Agent to
be equal to the cost to the Mezzanine Facility
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Agent of funding that amount for the period from payment by the
Mezzanine Facility Agent until refund to the Mezzanine Facility
Agent of that amount; and
(b) to indemnify the Mezzanine Facility Agent on demand against any
additional loss it may have incurred by reason of it having paid
that amount before having received it.
11.4 No set-off or deductions
All payments made by an Obligor under the Mezzanine Finance Documents
must be paid in full without set-off or counterclaim and not subject
to any condition and free and clear of and without any deduction or
withholding for or on account of any Taxes (except as provided in
clause 12 (Taxes)).
11.5 Business Days
Subject to clause 7.2 (Non-Business Days), if any amount would
otherwise become due for payment under any Mezzanine Finance Document
on a day which is not a Business Day, that amount shall become due on
the immediately following Business Day and all amounts payable under
any Mezzanine Finance Document calculated by reference to any period
of time shall be recalculated on the basis of that extension of time.
11.6 Change in currency
(a) If more than one currency or currency unit are at the same time
recognised by the central bank of any country as the lawful
currency of that country:
(i) any reference in any Mezzanine Finance Document to, and any
obligations arising under any Mezzanine Finance Document in,
the currency of that country shall be translated into, and
paid in, the currency or currency unit designated by the
Mezzanine Facility Agent (after consultation with the Parent
and the Mezzanine Lenders); and
(ii) any translation from one currency or currency unit to
another shall be at the official rate of exchange recognised
by the central bank of that country for the conversion of
that currency or currency unit into the other, rounded up or
down by the Mezzanine Facility Agent (acting reasonably).
(b) If a change in any currency of a country occurs, the Mezzanine
Finance Documents will, to the extent the Mezzanine Facility
Agent specifies is necessary, be amended to comply with any
generally accepted conventions and market practice in any
relevant interbank market and otherwise to reflect the change in
currency. The Mezzanine Facility Agent will notify the other
parties to the relevant Mezzanine Finance Documents of any such
amendment, which shall be binding on all the parties to that
Mezzanine Finance Document.
11.7 Application of moneys
If any amount paid or recovered in relation to the liabilities of an
Obligor under any Mezzanine Finance Document is less than the amount
then due, the Mezzanine Facility Agent shall apply that amount against
amounts outstanding under the Mezzanine Finance Documents in the
following order:
(a) first, to any unpaid fees and reimbursement of unpaid expenses of
the Agents;
(b) second, to any unpaid fees and reimbursement of unpaid expenses
of the Mezzanine Lenders;
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(c) third, to unpaid interest;
(d) fourth, to unpaid principal (including provision of cash cover in
relation to Contingent Liabilities not already cash
collateralised); and
(e) fifth, to other amounts due under the Mezzanine Finance Documents
(other than the Hedging Agreements)
in each case (other than (a)), pro rata to the outstanding amounts
owing to the relevant Mezzanine Finance Parties (other than the
Hedging Lenders) under the Mezzanine Finance Documents taking into
account any applications under this clause 11.7. Any such application
by the Mezzanine Facility Agent will override any appropriation made
by an Obligor.
12. TAXES
12.1 Gross up
If any deduction or withholding for or on account of Taxes or any
other deduction from any payment made or to be made by an Obligor to
any Mezzanine Finance Party or by the Mezzanine Facility Agent to any
other Mezzanine Finance Party under any Mezzanine Finance Document is
required by law, then that Obligor will:
(a) ensure that the deduction or withholding does not exceed the
minimum amount legally required;
(b) pay to the relevant Taxation or other authorities within the
period for payment permitted by the applicable law, the amount
which is required to be paid in consequence of the deduction
(including the full amount of any deduction from any additional
amount paid under this clause 12.1);
(c) promptly pay to the relevant Mezzanine Finance Party an
additional amount equal to the amount required to procure that
the aggregate net amount received by that Mezzanine Finance Party
will equal the full amount which would have been received by it
if no such deduction or withholding had been made; and
(d) indemnify each Mezzanine Finance Party against any losses
incurred by it by reason of:
(i) any failure by the relevant Obligor to make any deduction or
withholding; or
(ii) any such additional amount not being paid on the due date
for payment of that amount.
12.2 Exemptions from gross-up
No additional amount will be payable to a Mezzanine Finance Party
under clause 12.1 (Gross up) to the extent that the relevant deduction
or withholding would not have arisen if that Mezzanine Finance Party
had been a Qualifying Mezzanine Lender at the time the relevant
payment fell due (unless the reason it is not a Qualifying Mezzanine
Lender is the introduction of, or a change in, any law or regulation,
or a change in the interpretation or application of any law or
regulation or in any practice or concession of the Inland Revenue, in
each case occurring after the date of this agreement).
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12.3 Indemnity
Without prejudice to clause 12.1 (Gross up), if, as a result of a
change in Tax law or regulation (or an equivalent change having
mandatory effect) occurring after the date of this agreement any
Mezzanine Finance Party (or any person on its behalf) is required to
make any payment in relation to Tax (other than Tax on its overall net
income) on or calculated by reference to the amount of any payment
received or receivable by that Mezzanine Finance Party (or any person
on its behalf) under any Mezzanine Finance Document (including under
clause 12.1 (Gross up)) or any liability in relation to any such
payment is assessed, levied, imposed or claimed against any Mezzanine
Finance Party (or any person on its behalf), the Parent shall, on
demand by the Mezzanine Facility Agent, forthwith indemnify that
Mezzanine Finance Party (or relevant other person) against that
payment or liability and any losses incurred in connection with that
payment or liability.
12.4 Filings
(a) If an Obligor is required (or would in the absence of any
appropriate filing be required) to make a deduction or
withholding for or on account of Taxes or any other deduction
contemplated by this clause 12, that Obligor and each relevant
Mezzanine Finance Party shall promptly file all forms and
documents which the appropriate Tax authority may reasonably
require in order to enable that Obligor to make relevant payments
under the Mezzanine Finance Documents without having to make that
deduction or withholding.
(b) Each Mezzanine Finance Party which is a Qualifying Mezzanine
Lender by reason of paragraph (b) of the definition of
"Qualifying Mezzanine Lender" in clause 1.1 (Definitions) shall,
as soon as reasonably practicable after request from the Parent,
file with any relevant Tax authority, or provide to the Parent,
any Tax form, declaration or other document which the Parent has
reasonably requested from that Mezzanine Finance Party for the
purpose of enabling payments to be made by the relevant Obligor
to that Mezzanine Finance Party under the Mezzanine Finance
Documents without deduction or withholding.
12.5 Tax credits
If an Obligor pays an additional amount under clause 12.1 (Gross up)
and a Mezzanine Lender, in its sole opinion, receives an off-setting
Tax credit or other similar Tax benefit arising out of that payment,
that Mezzanine Lender shall reimburse to the relevant Obligor the
amount which that Mezzanine Lender determines, in its sole opinion, is
attributable to the relevant deduction, withholding or payment and
will leave it in no better or worse position in relation to its
worldwide Tax liabilities than it would have been in if the payment of
that additional amount had not been required, to the extent that that
Mezzanine Lender, in its sole opinion, can do so without prejudice to
the retention of the amount of that credit or benefit and without any
other adverse Tax consequences for it. Any such reimbursement shall be
conclusive evidence of the amount due to that Obligor and shall be
accepted by that Obligor in full and final settlement of any claim for
reimbursement under this clause 12.5.
12.6 Tax credit recovery
If, following any reimbursement by a Mezzanine Lender under clause
12.5 (Tax credits), that Mezzanine Lender is required to relinquish or
surrender any credit or benefit or suffers an adverse Tax consequence
as a result of that reimbursement and that relinquishment, surrender
or that adverse Tax consequence was not (or was not fully) taken into
account in determining that reimbursement, the relevant Obligor shall,
on demand, return to that Mezzanine Lender the proportion of the
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reimbursement which will compensate the Mezzanine Lender for that
relinquishment, surrender or adverse Tax consequence.
12.7 Tax affairs
Nothing in this clause 12 shall oblige any Mezzanine Lender to
disclose any information to any person regarding its Tax affairs or
Tax computations or interfere with the right of any Mezzanine Lender
to arrange its Tax affairs in whatever manner it thinks fit.
12.8 Notification to Parent and Mezzanine Facility Agent
Each Mezzanine Lender will notify the Parent and the Mezzanine
Facility Agent if it is not or ceases to be a Qualifying Mezzanine
Lender.
13. CHANGE IN CIRCUMSTANCES
13.1 Increased costs
(a) If the effect of the introduction of, or a change in, or a change
in the interpretation or application of, any law or regulation
(including any law or regulation relating to Taxation, reserve
asset, special deposit, cash ratio, liquidity or capital adequacy
requirements or any other form of banking or monetary controls)
applicable to any Mezzanine Lender (an "Affected Mezzanine
Lender") occurring after the date of this agreement or compliance
by any Mezzanine Lender with any such law or regulation is to:
(i) impose an additional cost on the Affected Mezzanine Lender
as a result of it having entered into any Mezzanine Finance
Document or making or maintaining its participation in the
Advance or of it performing its obligations under any
Mezzanine Finance Document;
(ii) reduce any amount payable to the Affected Mezzanine Lender
under any Mezzanine Finance Document or reduce the effective
return on its capital or any class of its capital; or
(iii) result in the Affected Mezzanine Lender making any payment
or forgoing any interest or other return on or calculated by
reference to any amount received or receivable by the
Affected Mezzanine Lender from any other party under any
Mezzanine Finance Document,
(each such increased cost, reduction, payment, forgone interest
or other return being referred to in this clause 13.1 as an
"increased cost"), then:
(A) the Affected Mezzanine Lender will notify the Parent and the
Mezzanine Facility Agent of that event as soon as reasonably
practicable after becoming aware of it; and
(B) on demand from time to time by the Affected Mezzanine
Lender, the Parent will pay to the Affected Mezzanine Lender
the amount which the Affected Mezzanine Lender determines is
necessary to compensate the Affected Mezzanine Lender for
that increased cost (or the portion of that increased cost
which is, in the opinion of the Affected Mezzanine Lender,
attributable to it entering into the Mezzanine Finance
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Documents, making or maintaining its participation in the
Drawing, or maintaining its Commitment).
(b) The certificate of an Affected Mezzanine Lender specifying the
amount of compensation payable under clause 13.1(a) and the basis
for the calculation of that amount is, in the absence of manifest
error, conclusive.
(c) The Parent will not be obliged to compensate any Affected
Mezzanine Lender under clause 13.1(a) in relation to any
increased cost:
(i) compensated for by payment of the Mandatory Cost or by
clause 12 (Taxes); or
(ii) attributable to a change in Tax on the overall net income of
the Affected Mezzanine Lender.
(d) If any Holding Company of a Mezzanine Lender suffers a cost which
would have been recoverable by that Mezzanine Lender under this
clause 13.1 if that cost had been imposed on that Mezzanine
Lender, that Mezzanine Lender shall be entitled to recover the
amount of that cost under this clause 13.1 on behalf of the
relevant Holding Company.
13.2 Illegality
If it is or becomes contrary to any law or regulation for any
Mezzanine Lender to make the Facility available or to maintain its
participation in the Advance or any of its Commitments, then that
Mezzanine Lender may give notice to that effect to the Mezzanine
Facility Agent and the Parent, whereupon:
(a) the Borrower will in good time before the latest date permitted
by the relevant law or regulation prepay that Mezzanine Lender's
participation in the Advance, together with all interest accrued
on the Advance and pay all other amounts due to that Mezzanine
Lender under the Mezzanine Finance Documents (including under
clause 27.1 (General indemnity and breakage costs)); and
(b) that Mezzanine Lender's undrawn Commitments (if any) will
immediately be cancelled and that Mezzanine Lender will have no
further obligation to make the Facility available.
13.3 Mitigation
If circumstances arise in relation to a Mezzanine Lender which would
or may result in:
(a) the Advance becoming an Affected Advance under clause 8 (Market
Disruption); or
(b) an obligation to pay an additional amount to it under clause 12.1
(Gross up) or clause 12.3 (Indemnity); or
(c) a demand for compensation by it under clause 13.1 (Increased
Costs); or
(d) an obligation to prepay any amount to it under clause 13.2
(Illegality),
then, without in any way limiting, reducing or otherwise qualifying
the obligations of the Obligors under the clauses referred to above,
that Mezzanine Lender will notify the Mezzanine Facility Agent
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and the Parent as soon as reasonably practicable after becoming aware
of those circumstances and, in consultation with the Mezzanine
Facility Agent and the Parent, take such reasonable steps as may be
open to it to mitigate the effects of those circumstances, including:
(i) changing its Lending Office for the purposes of this
agreement; or
(ii) transferring its rights and obligations under this agreement
in accordance with clause 25 (Changes to parties),
but the Mezzanine Lender concerned will not be obliged to take any
action if to do so might have a material adverse effect on its
business, operations or financial condition or cause it to incur
liabilities or obligations (including Taxation) which (in its opinion)
are material or would reduce its return in relation to its
participation in the Facility.
14. FEES, EXPENSES AND STAMP DUTIES
14.1 Mezzanine Arrangement fee
Subject to the occurrence of the Unconditional Date, the Parent will
pay to the Mezzanine Joint Mandated Lead Arrangers the arrangement fee
in accordance with the terms of the Mezzanine Arrangers' Fees Letter.
14.2 Mezzanine Agency fee
Subject to the occurrence of the Unconditional Date, the Parent will
pay to the Mezzanine Facility Agent for its own account an annual
agency fee in accordance with the terms of the Mezzanine Agency Fees
Letter.
14.3 Commitment fee
The Parent will pay to the Mezzanine Facility Agent for the account of
the Mezzanine Lenders a commitment fee which shall accrue from (and
including) the date of this agreement which will:
(a) be calculated at the rate of 1.5 per cent. per annum on the
aggregate of the daily undrawn Commitments; and
(b) be payable on the Completion Date, thereafter quarterly in arrear
and on the last day of the Availability Period (or, if earlier,
the date on which the Facility is fully drawn down),
and such fee shall be conditional on the occurrence of the
Unconditional Date.
14.4 VAT
All fees payable under the Mezzanine Finance Documents are exclusive
of any value added tax or other similar tax chargeable on or in
connection with those fees. If any such value added tax or other
similar tax is or becomes chargeable, that tax will be added to the
relevant fee at the appropriate rate and will be paid by the relevant
Obligor at the same time as the relevant fee itself is paid.
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14.5 Initial expenses
The Parent will on demand pay to the Agents and the Mezzanine Joint
Mandated Lead Arrangers the amount of all costs and expenses
(including legal fees and other out-of-pocket expenses and any value
added tax or other similar tax thereon) reasonably incurred by either
Agent or the Mezzanine Joint Mandated Lead Arrangers in connection
with:
(a) the negotiation, preparation, execution and completion of the
Mezzanine Finance Documents, and all documents, matters and
things referred to in, or incidental to, any Mezzanine Finance
Document;
(b) any amendment, consent or suspension of rights (or any proposal
for any of the same) relating to any Mezzanine Finance Document
(and documents, matters or things referred to in any Mezzanine
Finance Document);
(c) the investigation of any Default; and
(d) primary syndication (including the costs of preparing the
Syndication Memorandum and all matters incidental to primary
syndication not exceeding $150,000 (or its equivalent) in
aggregate).
14.6 Enforcement expenses
The Parent will on demand pay to each Mezzanine Finance Party the
amount of all costs and expenses (including legal fees and other out
of pocket expenses and any value added tax or other similar tax
thereon) incurred by that Mezzanine Finance Party in connection with
the preservation, enforcement or attempted preservation or enforcement
of any of that Mezzanine Finance Party's rights under any Mezzanine
Finance Document (and any documents referred to in any Mezzanine
Finance Document).
14.7 Stamp duties, etc.
The Parent will on demand indemnify each Mezzanine Finance Party from
and against any liability for any stamp, documentary, filing and other
duties and Taxes (if any) which are or may become payable in
connection with any Mezzanine Finance Document.
14.8 Calculation
All fees under this agreement which accrue and are payable in arrear
will accrue on a daily basis and will be calculated by reference to a
360 day year and the actual number of days elapsed (or on any other
basis required by market practice).
15. GUARANTEE AND INDEMNITY
15.1 Guarantee
Each Guarantor irrevocably and unconditionally and jointly and
severally:
(a) guarantees to each Mezzanine Finance Party punctual performance
by each Obligor of all that Obligor's obligations under the
Mezzanine Finance Documents including without limitation the
payment in full of all amounts that would become due but for the
operation of the automatic stay within section 362(a) of the US
Bankruptcy Code;
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(b) undertakes with each Mezzanine Finance Party that whenever an
Obligor does not pay any amount when due under or in connection
with any Mezzanine Finance Document, that Guarantor shall
immediately on demand pay that amount as if it was the principal
obligor; and
(c) indemnifies each Mezzanine Finance Party immediately on demand
against any cost, loss or liability suffered by that Mezzanine
Finance Party if the guarantee given under clause 15.1(a) or any
obligation guaranteed by it is or becomes unenforceable, invalid
or illegal;
subject, in each case, to any limitation on the amount guaranteed
required by applicable law which is contained in the Accession
Document by which that Guarantor becomes a Guarantor or as set out in
clause 15.10 (Guarantee Limitation).
15.2 Further guarantee provisions
The obligations of each Guarantor under clause 15.1 (Guarantee and
indemnity) (the "Guarantee Obligations"):
(a) will not extend to cover any indebtedness which, if they did so
extend would cause the infringement of section 151 of the
Companies Act 1985 (in the case of an Obligor incorporated in the
United Kingdom), section 60 of the Irish Companies Act, 1963 (in
the case of an Obligor incorporated in Ireland) or any similar
enactments or provisions in any other jurisdiction (in the case
of an Obligor incorporated outside the United Kingdom or the
Republic of Ireland).
(b) are a continuing security and will extend to the ultimate balance
of all amounts payable by each Obligor under any Mezzanine
Finance Document, regardless of any intermediate payment or
discharge in whole or in part; and
(c) are in addition to and are not in any way prejudiced by any other
security now or subsequently held by any Mezzanine Finance Party.
15.3 No discharge
The Guarantee Obligations shall not be discharged, diminished or in
any way adversely affected as a result of any of the following
(whether or not known to any Obligor or Mezzanine Finance Party):
(a) any time, consent or waiver given to, or composition made with,
any Obligor or any other person;
(b) any amendment to, or replacement of, any Mezzanine Finance
Document (however fundamental) or any other agreement or
security;
(c) the taking, variation, compromise, renewal, release or refusal or
neglect to perfect or enforce any right, remedies or security
against any Obligor or any other person;
(d) any purported obligation of any Obligor or any other person to
any Mezzanine Finance Party (or any security for that obligation)
becoming wholly or partly void, invalid, illegal or unenforceable
for any reason;
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(e) any incapacity, lack of power, authority or legal personality or
any change in the constitution of, or any amalgamation or
reconstruction of, any Obligor, Mezzanine Finance Party or other
person;
(f) any Obligor or other person becoming insolvent going into
receivership or liquidation, having an administrator appointed or
becoming subject to any other procedure for the suspension of
payments to or protection of creditors or similar proceedings;
(g) any change in the constitution of any Mezzanine Finance Party or
as a result of the amalgamation or consolidation by a Mezzanine
Finance Party with any other person; or
(h) any other act, omission, circumstance, matter or thing which, but
for this provision, might operate to release, reduce or otherwise
exonerate the relevant Guarantor from any of its obligations
under clause 15.1 (Guarantee).
15.4 Determination of Guarantee Obligations
If, notwithstanding clause 15.2(b) (Further guarantee provisions), the
Guarantee Obligations cease to be continuing obligations:
(a) each Mezzanine Finance Party may continue any account or open one
or more new accounts with any Obligor and the liability of each
Guarantor shall not be reduced or affected in any way by any
subsequent transactions or receipts or payments into or out of
any such account; and
(b) each Guarantor will remain liable in relation to all indebtedness
referred to in clause 15.1(a) (Guarantee) as at the date of
determination (whether demanded or not) and whether or not any
other Obligor is then in default under the Mezzanine Finance
Documents.
15.5 Immediate recourse
Each Guarantor waives any right it may have of first requiring any
Mezzanine Finance Party (or any trustee or agent on its behalf) to
proceed against or enforce any other rights or security or claim
payment from any person before claiming from that Guarantor under this
clause 15. This waiver applies irrespective of any law or any
provision of a Mezzanine Finance Document to the contrary.
15.6 No subrogation
Subject to clause 15.7 (Exercise of subrogation), until all amounts
which may be or become payable by any Obligor under or in connection
with any Mezzanine Finance Document have been irrevocably paid in full
each Guarantor undertakes not to exercise any rights which it may
have:
(a) to be subrogated to or otherwise share in any security or monies
held, received or receivable by any Mezzanine Finance Party or to
claim any right of contribution in relation to any payment made
by any Guarantor under this agreement;
(b) to enforce any of its rights of subrogation and indemnity against
any Obligor or any co-surety;
(c) following a claim being made on any Guarantor under clause 15.1
(Guarantee), to demand or accept repayment of any monies due from
any other Obligor to any Guarantor or claim any set-off or
counterclaim against any other Obligor; or
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(d) to claim or prove in a liquidation or other insolvency proceeding
of any Obligor or any co-surety in competition with any Mezzanine
Finance Party; and
provided that in addition to the foregoing, each Guarantor that is a
US Obligor (each a "US Guarantor") hereby waives any and all rights
which it may have at any time:
(i) to be subrogated to or otherwise share in any security or
monies held, received or receivable by any Mezzanine Finance
Party or to claim any right of contribution in relation to
any payment made by such US Guarantor under this agreement;
and
(ii) to enforce any of its rights of subrogation or indemnity or
reimbursement against any Obligor or any co-surety in
relation to any payment made by such US Guarantor under this
agreement.
15.7 Exercise of subrogation
Following the making of a demand on any Guarantor under clause 15.1
(Guarantee), that Guarantor will (at its own cost) promptly take such
of the steps or action as are referred to in clause 15.6 (No
subrogation) as the Mezzanine Facility Agent may from time to time
stipulate.
15.8 Turnover
Each Guarantor shall promptly pay to the Mezzanine Facility Agent an
amount equal to any set-off, proof or counterclaim exercised by it
against another Obligor or any co-surety and shall hold in trust for,
and promptly pay or transfer to, the Mezzanine Facility Agent any
payment, distribution or benefit of security received by it, whether
arising as a result of a breach of clause 15.6 (No subrogation) or
compliance with directions given under clause 15.7 (Exercise of
subrogation).
15.9 Suspense accounts
Until all amounts which may be or become payable by any Obligor under
or in connection with any Mezzanine Finance Document have been
irrevocably paid in full, any amount received or recovered by any
Mezzanine Finance Party from a Guarantor in relation to any amount due
and payable by any Obligor under any Mezzanine Finance Document may be
held by the recipient in a suspense account. Amounts deposited in any
such account shall accrue interest at the Mezzanine Facility Agent's
usual rate for deposits of a similar amount and nature from time to
time and interest accrued shall be credited to that account.
15.10 Guarantee limitations
Anything contained in this clause 15 to the contrary notwithstanding,
the obligations of each US Obligor under this clause 15 shall be
limited to a maximum aggregate amount equal to the greatest amount
that would not render such US Obligor's obligations under this clause
15 subject to avoidance as a fraudulent transfer or conveyance under
Section 548 of the US Bankruptcy Code or any applicable provisions of
comparable law of one or more of the states comprising the United
States of America (collectively, the "Fraudulent Transfer Laws"), in
each case after giving effect to all other liabilities of such US
Obligor, contingent or otherwise, that are relevant under the
Fraudulent Transfer Laws (specifically excluding, however, any
liabilities of such US Obligor (a) in respect of intercompany
indebtedness to any Group Company to the extent that such indebtedness
would be discharged in an amount equal to the amount paid by such US
Obligor hereunder and (b) under any
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guarantee of senior unsecured indebtedness or indebtedness
subordinated in right of payment to obligations of the Obligors
outstanding under this agreement, which guarantee contains a
limitation as to maximum amount similar to that set forth in this
paragraph, pursuant to which the liability of such US 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 subrogation, contribution,
reimbursement, indemnity or similar right of such US Obligor pursuant
to (i) applicable law or (ii) any agreement providing for an equitable
allocation among such US Obligor and other affiliates of the Borrower
of obligations arising under this clause 15 by such parties.
16. CHANGES TO OBLIGORS AND SECURITY
16.1 Additional Guarantors
(a) The Parent shall procure that any Group Company, which is or
becomes a Material Subsidiary which is not a Guarantor on the
date of this agreement nor required to become a Guarantor
pursuant to clause 18.11(h) (Take private procedure and provision
of Target security) shall (unless prohibited by law) become a
Guarantor by executing an Accession Document within 10 Business
Days of it so becoming a Material Subsidiary.
(b) When an Accession Document is entered into under clause 16.1(a),
the Parent shall deliver to the Mezzanine Facility Agent:
(i) the original Accession Document executed by the relevant new
Obligor and the Parent (for itself and as agent for the
existing Obligors); and
(ii) the documents listed in parts 3 and 4 of schedule 4, each in
relation to the acceding Guarantor; and
(iii) a legal opinion,
each satisfactory to the Mezzanine Facility Agent.
(c) If it is unlawful for a Group Company to become a Guarantor under
this clause 16.1 or to provide security under clause 16.2
(Further security), then each Obligor will use all reasonable
endeavours to overcome the prohibition (and, in the case of a
financial assistance or similar prohibition, will procure that
the relevant Group Company will undertake all whitewash or
similar procedures which are possible) to enable the relevant
guarantee and/or security to be given as soon as is reasonably
practicable.
(d) The Parent shall procure that at all times the aggregate gross
assets, gross revenues and EBITDA of the Guarantors exceeds 80
per cent. of each of the gross assets, gross revenues and EBITDA
of the Group, and to the extent necessary shall procure that
Group Companies which are not Material Subsidiaries become
Guarantors in accordance with clauses 16.1(a), (b) and (c) to
ensure compliance with this clause 16.1(d).
16.2 Further security
(a) The Parent shall procure that any Material Subsidiary or
Guarantor which has not entered into a Security Document over all
or substantially all of its assets (the "Relevant Assets"), shall
(unless prohibited by law) within 10 Business Days of it becoming
a Material Subsidiary or
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upon becoming a Guarantor execute a Security Document over the
Relevant Assets in favour of the Security Agent (and in form and
substance satisfactory to the Security Agent) as security for all
indebtedness (or such part for which it is lawful) under the
Mezzanine Finance Documents.
(b) When a Security Document is entered into under clause 16.2(a),
the Parent shall deliver to the Mezzanine Facility Agent:
(i) the original Security Document executed by the relevant
Group Company; and
(ii) the documents listed in parts 3 and 4 of schedule 4, each in
relation to the relevant Group Company; and
(iii) a legal opinion,
each satisfactory to the Mezzanine Facility Agent.
16.3 Release of Guarantors
If no Default is continuing and all the shares in a Guarantor which is
not the Borrower are disposed of in accordance with this agreement,
the Mezzanine Facility Agent and the Security Agent shall, on request
of the Parent as soon as reasonably practicable after completion of
such disposal, execute any documents which are necessary to release
that Guarantor from all liabilities under the Mezzanine Finance
Documents.
16.4 Release of security
If no Default is continuing and a Group Company disposes of any asset
(including shares in any other Group Company which is not the Borrower
or shares in the Borrower and the Borrower has repaid all obligations
due and owing by it under the Mezzanine Finance Documents) in
accordance with this agreement, the Security Agent shall, on request
of the Parent as soon as reasonably practicable after completion of
that disposal, execute any documents necessary to release that asset
from the security created in favour of the Security Agent by a
Security Document.
17. REPRESENTATIONS AND WARRANTIES
17.1 Reliance
Each Obligor represents and warrants as set out in the following
provisions of this clause 17 and acknowledges that each Mezzanine
Finance Party has entered into the Mezzanine Finance Documents and has
agreed to provide the Facility in full reliance on those
representations and warranties
17.2 Incorporation
It, and each of its Subsidiaries, is duly incorporated and validly
existing with limited liability under the laws of the place of its
incorporation and has the power to own its assets and carry on its
business. To the extent such Group Company is incorporated under the
laws of the United States of America or any of the states thereof,
such Group Company is in good standing under the laws of its
jurisdiction of incorporation.
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17.3 Power and capacity
It has the power and capacity to enter into and comply with its
obligations under each Transaction Document to which it is party.
17.4 Authorisation
It has taken all necessary action:
(a) to authorise the entry into and the compliance with its
obligations under each Transaction Document to which it is party;
(b) to ensure that its obligations under each Transaction Document
are valid, legally binding and enforceable in accordance with
their terms;
(c) to make each Transaction Document to which it is party admissible
in evidence in the courts of the jurisdiction to which it has
submitted in that Transaction Document; and
(d) to create the security constituted by each Security Document to
which it is party and to ensure that that security has the
ranking specified in that Security Document.
17.5 No contravention
Its entry into, the exercise of its rights under and the compliance
with its obligations under each Transaction Document to which it is
party and the carrying out of the transactions contemplated by the
Transaction Documents do not:
(a) contravene any law, regulation, judgment or order to which any
Group Company is subject;
(b) conflict with its constitutional documents;
(c) breach any agreement or the terms of any consent binding upon any
Group Company or any assets of any Group Company; or
(d) oblige any Group Company to create any security or result in the
creation of any security over any assets of any Group Company,
other than under the Security Documents.
17.6 Obligations binding
The obligations expressed to be assumed by it under each Transaction
Document to which it is a party constitute its valid and legally
binding obligations and, subject to the Reservations, are enforceable
in accordance with their terms.
17.7 Consents
(a) All consents and filings required for the conduct of its business
as presently conducted have been obtained and are in full force
and effect except to the extent that the absence of any such
consent or filing does not and is not reasonably likely to have a
Material Adverse Effect.
(b) Each US Obligor and each of its Subsidiaries is qualified to do
business and in good standing in every jurisdiction where its
assets are located and wherever necessary to carry out its
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business and operations, except in jurisdictions where the
failure to be so qualified or in good standing has not had and is
likely to not have a Material Adverse Effect.
17.8 No Defaults
(a) No Default has occurred and is continuing.
(b) No event is continuing which constitutes a default or which with
the giving of notice or the lapse of time or making of any
determination or fulfilment of any condition could reasonably be
expected to constitute a default under any agreement or document
to which any Group Company is party and which default could have
a Material Adverse Effect.
17.9 Litigation
No dispute, litigation, arbitration or administrative proceeding is
current or pending or, so far as it is aware, threatened against any
Group Company which is reasonably likely to be adversely determined
against a Group Company and which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
17.10 Environment
Save as disclosed in the Legal Report, to the best of its knowledge
and belief (having made all due and careful enquiries):
(a) Each Group Company is and has at all times been in compliance in
all material respects with all Environmental Laws and all
Environmental Approvals necessary in connection with the
ownership and operation of its business are in full force and
effect.
(b) There are no circumstances which could reasonably be expected to
prevent any Group Company from complying with any Environmental
Law.
(c) No material unbudgeted investment is necessary to obtain or renew
any Environmental Approval.
(d) There has been no act or omission by it, and no event or
circumstance has arisen, in each case which has resulted in (or
could result in) any third party taking any legal proceedings
against any Group Company under any Environmental Law or in the
revocation, suspension, variation or non-renewal of any
Environmental Approval.
(e) No Group Company has received any notice of any complaints,
demands, civil claims, liens, enforcement proceedings, requests
for information, or of any action required by any regulatory
authority and there are no investigations pending or, as far as
it is aware, threatened in relation to the failure of any Group
Company to obtain any Environmental Approval or comply with
Environmental Law.
17.11 Ownership of assets
(a) The shares in Target acquired by the Parent pursuant to the
Offer, from the time they are acquired, will be beneficially
owned by the Parent which will be entitled to and will forthwith
upon registration in the register of members become the legal and
beneficial (and, where applicable, registered) owner of such
shares in Target except for such number of shares in
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Target required to be held by nominees to comply with the
requirements of the Irish Companies Act, 1963 for so long as
Target is a public limited company provided that Parent is the
beneficial owner of all of the shares in Target acquired by it
and no more than six shares in Target are held by nominees.
(b) Each Group Company has good title to all assets necessary to
conduct its business.
17.12 Original accounts
To the best of the Parent's knowledge and belief, having made all due
and careful enquiries, the Original Audited Accounts and the Original
Management Accounts were prepared in accordance with Irish gaap and
save as disclosed in the Accountant's Report, in the case of:
(a) the Original Audited Accounts, give a true and fair view of the
consolidated financial position as at the date to which they were
prepared and the results of the operations of the Target Group
for the period to which they relate and the state of the affairs
of the Target Group at the end of such period and, in particular,
disclose or reserve against all liabilities (actual or
contingent) to the extent required by Irish gaap; and
(b) the Original Management Accounts, show with reasonable accuracy,
the consolidated financial position as at the date to which they
were prepared and the results of the operations of the Target
Group for the period to which they relate and the state of the
affairs of the Target Group at the end of such period, and, in
particular, disclose or reserve against all liabilities (actual
or contingent) to the extent required by Irish gaap.
17.13 Management Financial Model
To the best of the Parent's knowledge and belief, having made all due
and careful enquiries:
(a) the Management Financial Model was prepared honestly and was
arrived at after careful consideration and is based on reasonable
grounds.
(b) the projections and forecasts contained in the Management
Financial Model are based upon assumptions (including assumptions
as to the future performance of the Target Group, inflation,
price increases, interest rates and efficiency gains) which have
been carefully considered by the directors of the Parent and are
considered by them to be fair and reasonable.
(c) the Management Financial Model is not misleading in any material
respect and does not omit to disclose any matter where failure to
disclose such matter would result in the Management Financial
Model (or any information contained therein) being misleading in
any material respect.
(d) nothing has occurred or come to the attention of the Parent since
the date as at which the Management Financial Model was prepared
which renders the Management Financial Model inaccurate or
misleading or which makes any of the projections or forecasts
contained in the Management Financial Model unfair or
unreasonable or renders any of the assumptions on which the
projections are based unfair or unreasonable.
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17.14 Reports
(a) All information supplied by or on behalf of any Group Company (or
to the best of the Parent's knowledge and belief, having made all
due and careful enquiry by or on behalf of any member of the
Target Group) in connection with the preparation of the Reports
was true, complete and accurate in all material respects at the
dates supplied.
(b) To the best of the Parent's knowledge and belief, having made all
due and careful enquiries, all statements of fact recorded in the
Reports are true and accurate in all material respects.
(c) To the best of the Parent's knowledge and belief, having made all
due and careful enquiries, no Report is misleading in any
material respect and there is no expression of opinion, forecast
or projection contained in, or any conclusion reached in any
Report which is not fair and reasonable.
(d) To the best of the Parent's knowledge and belief, having made all
due and careful enquiries, nothing has occurred or come to light
since the date of any Report which renders any material facts
contained in that Report inaccurate or misleading or which makes
any of the opinions, projections, forecasts or conclusions
contained in the relevant Report unfair or unreasonable.
17.15 Transaction Documents
(a) The Offer Documents as furnished to the Mezzanine Facility Agent
under this agreement will contain all the material terms of the
Offer.
(b) The Equity Documents and the Senior Finance Documents as provided
to the Mezzanine Facility Agent under this agreement contain all
the material terms of the agreements and arrangements between any
Group Company and the Original Equity Investors and the Senior
Lenders respectively.
17.16 Structure Document
To the best of the Parent's knowledge and belief, having made all due
and careful enquiries all information recorded in the Structure
Document is accurate in all material respects and each of the
companies identified in the Structure Document as being dormant is a
Dormant Company.
17.17 Material adverse change
To the best of its knowledge and belief (having made all due and
careful enquiries) there has been no material adverse change in the
business, assets, financial condition, prospects or operations of the
Target Group since the date to which the Original Audited Accounts
were prepared.
17.18 Material disclosures
It has fully disclosed in writing to the Mezzanine Facility Agent all
facts known to it relating to the Offer and the Target Group which it
knows could reasonably be expected to influence the decision of the
Mezzanine Lenders to make the Facility available.
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17.19 Newly incorporated companies and dormant companies
(a) The Parent is a holding company and neither the Parent nor Loan
Noteco have carried on any business or incurred any liabilities
other than by entering into or under the Transaction Documents
and in relation to payment of legal fees, auditors fees and
expenses.
(b) None of the Dormant Companies are trading.
17.20 Offer Document
The Press Announcement and the Offer Document do not contain any
untrue statement by the Parent or omit any information which makes any
statement for which the Parent or its directors are responsible
misleading in any material respect and expressions of expectation,
intention, belief and opinion contained therein were honestly made on
reasonable grounds after due and careful consideration by the Parent
and its directors.
17.21 Intellectual Property
(a) The Material Intellectual Property required for each Group
Company to conduct its business as presently conducted:
(i) is, save as disclosed in the Legal Report, legally and
beneficially owned by it or licensed to a Group Company (and
where registered or the subject of an application it is the
registered proprietor) and is free from any licences or
obligation to assign to third parties and Security Interests
which are materially prejudicial to the use of that Material
Intellectual Property and will not be adversely affected by
the transactions contemplated by the Transaction Documents;
and
(ii) has not lapsed or been cancelled and all steps have been
taken to protect and maintain that Material Intellectual
Property, including paying renewal fees.
(b) Where the Material Intellectual Property required for each Group
Company to conduct its business as presently conducted is subject
to any right, permission to use or licence granted to or by any
Group Company, that agreement has not been breached in any
material respect or terminated by any party.
(c) So far as it is aware, after due and careful review and enquiry,
no Group Company is infringing any Intellectual Property Rights
of any third party and the Material Intellectual Property is not
being infringed by any third party.
17.22 Pensions
(a) Save as disclosed in the Legal Report, no Group Company
incorporated in the USA has any Employee Benefit Arrangements
other than the 401(k) plan that has been established by the US
Companies.
(b) The Parent will:
(i) if requested by the Mezzanine Facility Agent as soon as
reasonably practicable deliver to the Mezzanine Facility
Agent any actuarial reports in relation to the pension
schemes for the time being operated by Group Companies
("actuarial reports")
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which are prepared in order to comply with then current
statutory or auditing requirements; and
(ii) if requested by the Mezzanine Facility Agent, (acting
reasonably) as soon as reasonably practicable prepare
actuarial reports and deliver those to the Mezzanine
Facility Agent, if the Mezzanine Facility Agent (acting
reasonably) believes that any relevant material statutory or
auditing requirement concerning funding levels is not being
complied with.
(c) The Parent will ensure that all such pension schemes are funded
to the extent required by law based on reasonable actuarial
assumptions applicable in the jurisdiction in which the relevant
pension scheme is maintained.
(d) There are no circumstances which may give rise to a liability in
relation to Employee Benefits Arrangements which would be
reasonably likely to result in a Material Adverse Effect.
17.23 ERISA
(a) No Group Company incorporated in the USA has any Unfunded
Liabilities.
(b) Each Plan complies in all material respects with the applicable
requirements of ERISA and the IR Code, except to the extent that
the failure to comply therewith does not have a Material Adverse
Effect.
(c) No Reportable Event has occurred with respect to any Plan, except
to the extent that such Reportable Event does not have a Material
Adverse Effect.
(d) No Group Company incorporated in the USA nor any ERISA Affiliate
has incurred, or is reasonably expected to incur, any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the IR Code relating to employee benefit plans (as
defined in section 3 of ERISA), and no event, transaction or
condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by a
Group Company incorporated in the USA or any ERISA Affiliate, or
in the imposition of any lien on any of the rights, properties or
assets of a Group Company incorporated in the USA or any ERISA
Affiliate, in either case pursuant to Title I or IV of ERISA or
to such penalty or excise tax provisions of the IR Code or to
section 401(a)(29) or 412 of the IR Code which would have a
Material Adverse Effect.
(e) No Group Company incorporated in the USA:
(i) is a party to any Multiemployer Plan; or
(ii) has withdrawn from any Multiemployer Plan, except to the
extent such actions do not have a Material Adverse Effect.
(f) The execution and delivery of this agreement and the consummation
of the transactions contemplated hereunder will not involve any
transaction that is subject to the prohibitions of section 406 of
ERISA or in connection with which taxes could be imposed pursuant
to section 4975(c)(1)(A)-(D) of the IR Code.
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(g) No Group Company incorporated or doing business in the USA has
any contingent liability with respect to any post-retirement
benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA and
except where such liability is not reasonably likely to result in
a Material Adverse Effect.
17.24 Investment Companies
No US Obligor is (a) a "holding company" or a "subsidiary company" of
a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended; (b) an "investment company" or a
company "controlled" by a person required to be registered as an
"investment company", within the meaning of the Investment Company Act
of 1940, as amended or (c) subject to regulation under any United
States federal or state statute or regulation (other than Regulations
X of the Board of Governors of the Federal Reserve System of the USA)
limiting its ability to incur indebtedness.
17.25 Compliance with laws
The Offer complies with all applicable U.S. federal, state and local
laws.
17.26 Syndication Memorandum
(a) Any factual information provided by any member of the Group for
the purposes of the Syndication Memorandum was true and accurate
in all material respects as at the date it was provided or as at
the date (if any) at which it is stated.
(b) The financial projections contained in the Syndication Memorandum
have been prepared on the basis of recent historical information
and on the basis of reasonable assumptions.
(c) Nothing has occurred since the date of the Syndication Memorandum
or been omitted from the Syndication Memorandum and no
information has been given or withheld by any member of the Group
to any Mezzanine Finance Party that results in the information
contained in the Syndication Memorandum being untrue or
misleading in any material respect.
17.27 Repetition
The representations and warranties in this clause 17 are made on the
date of this agreement and shall be deemed repeated on the date of the
Drawdown Request, on the Drawdown Date and on the first day of each
Interest Period, in each case by reference to the facts and
circumstances existing on that date, except that:
(a) the representations and warranties set out in clauses 17.8(a) (No
Defaults), 17.9 (Litigation), 17.13 (Management Financial Model),
17.14 (Reports), 17.16 (Structure Document) 17.17 (Material
adverse change), 17.18 (Material disclosures), 17.19 (Newly
incorporated Companies), 17.20 (Offer Document), 17.22 (Pensions)
and 17.23 (ERISA) shall not be repeated after the date of the
first Drawdown;
(b) in clause 17.12 (Original accounts), (a) the references to
Original Audited Accounts shall be construed after the
Unconditional Date as references to the then latest Annual
Accounts, (b) the references to Original Management Accounts
shall be construed after the Unconditional Date as references to
the then latest Monthly Accounts, (c) after the Unconditional
Date the references to Target Group shall be construed as
references to the
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Group, and (d) after the Unconditional Date, the words "to the
best of the Parent's knowledge and belief, having made all due
and careful enquiries" shall be deemed deleted from that clause;
and
(c) the representation and warranty set out in clause 17.26
(Syndication Memorandum) shall only be made on the date the
Syndication Memorandum is approved by the Parent.
17.28 Enquiries
References in this clause 17 to the Parent having made all due and
careful enquiries shall be deemed to refer to the Parent having
obtained and read (a) the Reports and (b) the warranties given by the
Key Executives in the Investment Agreement (and any related disclosure
letter), and (c) in the case of clause 17.16 (Structure Document) to
the Parent having reviewed company searches in respect of the Target
Group, such searches having been updated as at the date of the
Structure Document.
18. UNDERTAKINGS
18.1 Duration of undertakings
Each Obligor undertakes to each Mezzanine Finance Party in the terms
of this clause 18 from the date of this agreement until all amounts
outstanding under the Mezzanine Finance Documents have been discharged
and no Mezzanine Finance Party has any further Commitment or
obligations under the Mezzanine Finance Documents.
18.2 Authorisations and status undertakings
(a) Consents
Each Obligor will obtain and maintain in full force and effect
all consents and filings required under any applicable law or
regulation:
(i) to enable it to perform its obligations under each
Transaction Document to which it is a party; and
(ii) for the validity, enforceability or admissibility in
evidence of each such Transaction Document.
(b) Maintenance of status and authorisation
Each Obligor will, and will procure that each of its Subsidiaries
will:
(i) do all things necessary to maintain its corporate existence;
(ii) obtain and maintain in full force and effect all consents
and filings required for the conduct of its business; and
(iii) comply with all laws and regulations applicable to it.
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(c) Amalgamations
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, amalgamate, merge or consolidate with or into
any other person or be the subject of any reconstruction.
(d) Change of business
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, make a material change to the nature of its
business (other than pursuant to a disposal permitted under
clause 18.3(a) (Disposals)).
(e) Constitutional documents
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, agree to any amendment of its constitutional
documents which may adversely affect the interests of any
Mezzanine Finance Party under the Mezzanine Finance Documents and
will supply the Mezzanine Facility Agent with written details of
any proposed change before the members' resolution approving such
change is passed.
(f) Holding company status
(i) The Parent shall not carry on any business (other than the
holding of shares in and the provision of administrative
services to other Group Companies) or acquire any assets
(other than under the Offer Documents).
(ii) Loan Noteco shall not carry on any business or own any
assets other than the benefit of loans made to the Parent.
(g) Pari passu ranking
Each Obligor shall ensure that the claims of the Mezzanine
Finance Parties under the Mezzanine Finance Documents will at all
times rank at least pari passu in right and priority of payment
with the claims of all its other present and future unsecured and
unsubordinated indebtedness (actual or contingent) except those
whose claims are preferred solely by operation of law.
(h) Dormant Companies
None of the Dormant Companies will commence trading or acquire
any assets.
18.3 Disposals and security undertakings
(a) Disposals
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, (whether by a single transaction or a series
of related or unrelated transactions and whether at the same time
or over a period of time) sell, transfer, lease out or otherwise
dispose (each a "disposal") of any of its assets or agree to do
so, other than:
(i) any disposal on arm's length terms in the ordinary course of
trading (excluding the granting of a licence of any
Intellectual Property);
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(ii) disposals of redundant or obsolete assets;
(iii)disposals of assets in exchange for other assets which are
comparable or better as to type and quality;
(iv) disposals from any Obligor to any other Obligor or from any
Group Company which is not an Obligor to any other Group
Company;
(v) disposals of cash not prohibited by this agreement; and
(vi) the granting of a licence of Intellectual Property on arm's
length terms in the ordinary course of trading.
(b) Disposals for full consideration
The Parent will ensure that any disposal permitted by clause
18.3(a) (other than clause 18.3(a)(iv) or (v)) is:
(i) for at least market value payable in cash (except in the
case of a disposal permitted by clause 18.3(a)(iii)) on or
before completion of that disposal; and
(ii) as part of an arm's length transaction on terms that the
purchaser of the relevant asset does not obtain title to or
possession of that asset before completion of that disposal.
(c) Negative pledge
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, create or agree to create or permit to subsist
any Security Interest over any part of its assets, other than:
(i) any Security Interest granted by the Senior Finance
Documents;
(ii) liens securing obligations no more than 30 days overdue,
arising by operation of law and in the ordinary course of
trading;
(iii) Security Interests arising out of title retention
provisions in a supplier's standard conditions of supply of
goods where the goods in question are supplied on credit and
are acquired by relevant Group Company in the ordinary
course of trading;
(iv) set-off rights arising or created in favour of banks in
respect of accounts or deposits maintained in the ordinary
course of the Group's business;
(v) rights over cash deposits granted in favour of (i) a
landlord for the purposes of securing performance of rent
and service charge obligations under licences, subleases or
leases of real property permitted under this agreement or
(ii) a bank to secure the obligations to reimburse or repay
such bank where it pays sums under guarantees or similar
instruments issued in respect of any such licences,
subleases or leases of real property;
(vi) Security Interests granted by the Target Group prior to the
Unconditional Date in relation to the Foothill Facilities or
otherwise until 21 days after the Unconditional
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Date and provided that the relevant Group companies are at
all times in compliance with the Foothill Facility
Agreement; and
(vii) Security Interests arising over assets financed or acquired
by any finance lease provided that the aggregate capitalised
amount of such leases (determined in accordance with the
Applicable Accounting Principles and excluding any accruing
interest element under such leases) with respect to
equipment so leased shall not any time exceed in aggregate
$3,000,000 (or its equivalent at any time),
provided further that notwithstanding clause 18.3(c)(ii)-(v)
inclusive and (vi), at any time that any member of the Target
Group incorporated in the Republic of Ireland and named in
schedule 9 has failed to execute a Guarantee Increase Deed or any
Security Document set out in schedule 9 to be executed by such
member of the Target Group or has failed to enter into the
Financial Assistance Documents or otherwise comply with the
provisions of section 60 of the Irish Companies Act, 1963 in all
respects in relation to such Security Documents, no Obligor
incorporated in the Republic of Ireland will create or agree to
create or permit to subsist any Security Interest over any
Intellectual Property Rights owned by it or (any part thereof) or
any shares owned by it.
(d) Sale and leaseback transactions
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, sell or otherwise dispose of any asset on
terms whereby such asset is or may be leased or re-acquired by it
or any other Group Company, where the higher of the book value or
market value of the assets thereby disposed of (whether by a
single transaction or by a series of transactions) does not
exceed in aggregate $500,000 (or its equivalent at any time).
(e) Factoring receivables
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, sell or otherwise dispose of any receivable
other than in the ordinary course of trade.
18.4 Acquisition and investment undertakings
(a) Acquisitions
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, acquire any assets or shares, other than:
(i) in the ordinary course of its trading activity;
(ii) shares in the Target; and
(iii) Capital Expenditure required for the business of the
relevant Group Company, subject to compliance with clause
18.14(d) (Capital Expenditure).
(b) Joint ventures
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, enter into any joint venture, partnership or
similar arrangement with any person other than co-operation
agreements entered into in the ordinary course of business and
not involving the creation of
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any company or partnership provided that the aggregate amount
which Group is required to invest under such co-operation
agreements shall not exceed in aggregate $1,000,000 (or its
equivalent) in any Financial Year.
18.5 Financing arrangement undertakings
(a) Borrowings
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, incur or permit to be outstanding any
Financial Indebtedness, other than:
(i) amounts due under any Finance Document or any Equity
Document;
(ii) Financial Indebtedness permitted by clauses 18.5(b)
(Guarantees) and 18.5(c) (Loans);
(iii) unsecured overdraft or working capital facilities in
relation to which a Bank Guarantee (as defined in the Senior
Credit Agreement) in an amount equal to the maximum
principal amount of those facilities has been issued;
(iv) finance leases and hire purchase contracts not exceeding
$3,000,000 (or such other figure as is agreed with the
Mezzanine Lenders) in aggregate capital value at any time;
(v) the Foothill Facilities and any other facilities of the
Target Group until 21 days after the Unconditional Date and
provided that the relevant Group companies are at all times
in compliance with the Foothill Facility Agreement or such
other agreement relating to such facilities;
(vi) Financial Indebtedness owed between members of the Target
Group at the Unconditional Date;
(vii) spot and forward foreign exchange facilities not exceeding
an aggregate risk weighted amount of $2,000,000 provided
that following the date which is 60 days after the
Unconditional Date all new foreign exchange contracts shall
be entered into with the Mezzanine Lenders;
(viii) unsecured working capital facilities in an aggregate
amount not exceeding $5,000,000 (or equivalent) at any time;
and
(ix) Financial Indebtedness outstanding under Allied Irish Bank's
Subsidised Loan Scheme dated 9 December 1996 between Allied
Irish Bank and Lifetime Learning Limited in a maximum
aggregate amount not exceeding IR(pound)200,000 (or its
equivalent) at any time.
(b) Guarantees
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will grant or make available any guarantee, other
than:
(i) any guarantee contained in any Finance Document; and
(ii) any guarantee given by an Obligor or any of its Subsidiaries
in respect of the indebtedness or other obligations of a
Group Company provided that such
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indebtedness is permitted under clauses 18.5(a) (Borrowings)
(i), (iii) or (iv) or such other obligations have been
incurred without breach of this agreement.
(c) Loans
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, make any loans or grant any credit to any
person other than:
(i) normal trade credit;
(ii) loans by an Obligor to another Obligor;
(iii) loans by any Group Company which is not an Obligor to any
other Group Company;
(iv) loans by Obligors to Group Companies which are not Obligors
not exceeding $250,000 in aggregate; and
(v) loans to employees not exceeding $50,000 outstanding at any
time.
(d) Hedging
(i) No Obligor will, and each Obligor will procure that none of
its Subsidiaries will, enter into any Hedging Instrument
other than (A) the Hedging Agreements referred to in (ii)
below and (B) Hedging Instruments entered into in the
ordinary course of its business for the purpose of managing
or hedging its exposure to interest rates, exchange rates or
commodity prices and (c) Hedging Instruments in a form
approved by the Mezzanine Joint Mandated Lead Arrangers
entered into for the purpose of ensuring the Parent has
sufficient monies to meet all obligations under the Offer.
(ii) The Obligors will, by no later than 30 days after the
Unconditional Date, enter into Hedging Agreements so as to
ensure that, for a period of at least three years from the
Drawdown Date, the Group has hedging of interest rate
exposure on terms satisfactory to the Mezzanine Facility
Agent in relation to at least 65 per cent. of the aggregate
amount capable of being drawn under the Senior Term
Facilities and the Facility. All Hedging Agreements will be
entered into with Hedging Lenders unless, the Senior Lenders
and the Mezzanine Lenders having been given the opportunity
to offer terms for providing Hedging Agreements, the Senior
Lenders and the Mezzanine Lenders have not offered terms
which are reasonably competitive with those offered by
another reputable bank or financial institution in which
case the Hedging Agreement shall be provided by such bank or
institution. If any Hedging Agreement is entered into with a
person other than a Hedging Lender, the relevant Group
Company shall assign its rights thereunder to the Security
Agent as security for all obligations under the Mezzanine
Finance Documents and the relevant counterparty shall not be
secured.
(e) Banking business
(i) Prior to the Senior Discharge Date, each Obligor will and
will procure that each Group Company will comply with its
obligations under clause 20.5(e) (Banking Business) of the
Senior Credit Agreement.
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(ii) After the Senior Discharge Date, each Obligor will and will
procure that each Group Company will:
(A) maintain bank accounts outside the UK only with banks
approved by the Mezzanine Facility Agent (acting
reasonably); and
(B) maintain bank accounts in the UK only with the
Mezzanine Facility Agent provided that if the Mezzanine
Facility Agent does not provide facilities to the
relevant Group Companies on normal commercial terms no
worse than those offered by other banks in the relevant
market, the relevant Group Companies may maintain such
bank accounts with any Mezzanine Lender and if no other
Mezzanine Lender provides facilities to the relevant
Group Companies on normal commercial terms no worse
than those offered by other banks in the relevant
market, the relevant Group Companies may maintain such
bank accounts with any bank provided such bank has
acknowledged the Security Interest over the relevant
accounts in accordance with the applicable Security
Documents (if any); and
(C) save for facilities provided under the terms of the
Finance Documents, only carry on banking business with
and obtain unsecured overdraft and working capital
facilities from banks approved by the Mezzanine
Facility Agent (acting reasonably).
(f) Repatriation of cash
Within 30 days of the end of each Management Accounting Period,
to the extent permitted by the laws of the relevant jurisdiction,
the Parent will procure that all cash balances in aggregate
exceeding the equivalent of $1,000,000 located outside of the
Republic of Ireland, the United States of America, England or the
Cayman Islands and that all cash balances of each Group Company
which is not an Obligor exceeding in aggregate $1,000,000 (or the
equivalent thereof) in respect of that Group Company are in each
case, transferred to a bank account of an Obligor in the Republic
of Ireland, the United States of America or England with any bank
permitted under this agreement, provided that this clause shall
not apply where such excess cash balances are reasonably required
in the relevant jurisdiction for the business (including working
capital and Capital Expenditure) of the relevant operation or
where such repatriation would involve significant cost to the
Group provided further that no such transfer will be required in
respect of any amount if the transfer would breach any applicable
law (including, without limitation, any exchange controls
operating in the relevant jurisdiction).
(g) Guarantees and Security from Target and its Subsidiaries
The Parent will procure the delivery to the Security Agent within
21 days of the Unconditional Date of the following documents in
the agreed form duly executed and delivered by all parties
thereto:
(i) an Accession Document in respect of Target and its
Subsidiaries listed in part 2 of Schedule 9 pursuant to
which each such company in the Target Group listed shall
become a Guarantor (to the extent it can do so pending
satisfaction of the requirements of s60 of the Irish
Companies Act, 1963);
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(ii) each Security Document listed against the name of such
company in part 2 of Schedule 9; and
(iii) an accession document to the Intercreditor Deed executed
and delivered by each company in the Target Group listed in
part 2 of Schedule 9,
together with, in respect of each Company listed in part 2 of
Schedule 9, those documents set out in paragraphs 1, 2, 4, 5 and
6 of part 4 of schedule 4 (save to the extent already provided).
18.6 Conduct of business undertakings
(a) Insurance
(i) Each Obligor will, and will procure that each of its
Subsidiaries will, effect and maintain insurances at its own
expense in relation to all its assets and risks of an
insurable nature with insurers approved by the Mezzanine
Facility Agent which:
(A) provide cover against all risks which are normally
insured against by other companies owning or possessing
similar assets or carrying on similar businesses (and
the Parent will, within 14 days of the Unconditional
Date, provide the Mezzanine Facility Agent with
evidence that such insurances have been taken out and
are in full force and effect);
(B) be in amounts which would in the circumstances be
prudent for those companies; and
(C) have the interest of the Security Agent as mortgagee
noted on the policies (and the Parent will provide the
Mezzanine Facility Agent with evidence to this effect
within 14 days of the Unconditional Date),
and each Obligor will, and will procure that each of its
Subsidiaries will, use all reasonable endeavours to prevent
any acts, omissions or events of default occurring which
render or might render any material policies of insurance
taken out by it void or voidable.
(ii) The Parent will within 21 days after the Unconditional Date
effect and maintain Key Executive Policies for the benefit
of the Parent in relation to the death and disability of
each Key Executive to expire no earlier than 3 years after
the date of this agreement.
(iii) The Parent will:
(A) supply to the Mezzanine Facility Agent on request
copies of each policy for insurance required to be
maintained in accordance with clause 18.6(a)(i) or (ii)
(the "policies"), together with the current premium
receipts relating to the policies;
(B) promptly notify the Mezzanine Facility Agent of any
material change to the insurance cover of each Obligor
and each Obligor's subsidiaries; and
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(C) promptly notify the Mezzanine Facility Agent of any
claim under any policy which is for, or is reasonably
likely to result in a claim under that policy for, an
amount in excess of $150,000 (or its equivalent in
other currencies).
(b) Intellectual Property
Each Obligor will, and will procure that each of its Subsidiaries
will:
(i) ensure that it beneficially owns or has all necessary
consents to use and, where applicable, is accorded as the
registered proprietor of all the Intellectual Property
Rights that it requires in order to conduct its business;
(ii) observe and comply with all obligations and laws applicable
to it in relation to the Intellectual Property;
(iii) maintain and protect all Material Intellectual Property;
(iv) notify the Mezzanine Facility Agent as soon as it becomes
aware of any new Material Intellectual Property, or any
Intellectual Property has ceased to be Material Intellectual
Property; and
(v) notify the Mezzanine Facility Agent as soon as it becomes
aware of any infringement, alleged infringement, claims or
proceedings relating to the Material Intellectual Property.
(c) Taxes
Each Obligor will, and will procure that each of its Subsidiaries
will, pay when due (or within any applicable time limit), all
Taxes imposed upon it or any of its assets, income or profits on
any transactions undertaken or entered into by it except in
relation to any bona fide tax dispute for which proper provision
has been made in its accounts.
(d) Pension schemes
(i) The Parent will:
(A) if requested by the Mezzanine Facility Agent, as soon
as reasonably practicable deliver to the Mezzanine
Facility Agent any actuarial reports in relation to the
pension schemes for the time being operated by Group
Companies ("actuarial reports") which are prepared in
order to comply with then current statutory or auditing
requirements; and
(B) if requested by the Mezzanine Facility Agent, (acting
reasonably) as soon as reasonably practicable prepare
actuarial reports and deliver those to the Mezzanine
Facility Agent, if the Mezzanine Facility Agent (acting
reasonably) believes that any relevant material
statutory or auditing requirement concerning funding
levels is not being complied with.
(ii) The Parent will ensure that all such pension schemes are
funded to the extent required by law based on reasonable
actuarial assumptions applicable in the jurisdiction in
which the relevant pension scheme is maintained.
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(e) Arm's length transactions
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, enter into any agreement or arrangement
(except with another Obligor) other than on an arm's length basis
and (except as permitted under this agreement) in the normal
course of trading.
(f) Change of Control
Each member of the Group shall take all such steps as necessary
to ensure that all formalities relating to the change of control
of Target which occurs on the Unconditional Date are carried out,
(including without limitation) as set out in the agreements set
out in each of paragraphs set out below of Section 5 (Material
Contracts) of the Legal Due Diligence Report:
Paragraph Agreement
2. (License and Distribution Agreement for
Destination Math between Riverdeep Interactive
Learning Limited and Research Machines plc dated
13 June 2000); and
4. (International Licence and Distribution Agreement
by and between Riverdeep Inc. and Test University
Inc. dated 5 September 2002);
provided that, in relation to the Sonopress Contract, the
relevant member of the Group shall not be required to request
consent to the change of control.
(g) Indemnity Claims
Each member of the Group will take all steps considered by the
relevant member of the Group to be prudent and cost effective to
maximise the recovery under any warranties granted for the
benefit of such member of the Group.
18.7 Environmental undertakings
Each Obligor will, and each Obligor will procure that each of its
Subsidiaries will:
(a) comply with all Environmental Approvals and Environmental Laws
applicable to it where failure to do so is reasonably likely to
have a Material Adverse Effect;
(b) obtain and maintain all Environmental Approvals applicable to it
where failure to do so is reasonably likely to have a Material
Adverse Effect; and
(c) promptly upon receipt of the same notify the Mezzanine Facility
Agent of any claim, notice or other communication served on it in
relation to:
(i) any Environmental Law or Environmental Approval applicable
to it or if it becomes aware of any actual or prospective
material variation to any Environmental Law or Environmental
Approval; and
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(ii) any material investment required to be made by any Group
Company to maintain, acquire or renew any Environmental
Approval or if it otherwise becomes aware of such a
requirement.
18.8 Transaction Documents
(a) Changes to Transaction Documents
The Parent will not, and will procure that none of its
Subsidiaries will, agree to any amendment of any term of any
Transaction Document which would adversely affect the interests
of any Mezzanine Finance Party under the Mezzanine Finance
Documents.
(b) Changes to Senior Finance Documents
It will not agree to any amendment of any Senior Finance Document
save as permitted by and in accordance with the Intercreditor
Deed.
(c) Service Contracts
The Parent shall procure that the Target executes any Service
Contract not executed as at the date of this agreement no later
than the Unconditional Date.
18.9 Share capital, dividend and other junior financing arrangement
undertakings
(a) Share issues
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, allot or issue any equity securities (as
defined in section 23 of the Irish Companies (Amendment) Act
1983) other than (a) issues of shares by the Parent and (b)
issues of shares by Subsidiaries of the Parent to their direct
Holding Company with security granted over such securities in
favour of the Security Agent equivalent to that (if any) existing
in respect of relevant securities already issued by such Company
and (c) any issue of Shares by Target which shares (i) are issued
after the date falling 18 months after the Unconditional Date and
(ii) are issued to satisfy the obligations of Target under the TU
Agreement provided that the Parent and the Target have used all
reasonable efforts to cash settle such obligations.
(b) Redemption and acquisition of own shares
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, directly or indirectly, redeem, purchase,
retire or otherwise acquire any shares or warrants issued by it
or otherwise reduce its capital other than (i) in favour of an
Obligor or (ii) the conversion of any A Ordinary Shares of
US$0.01 in issue at the date of this agreement into Deferred
Redeemable Ordinary Shares of US$0.01 following the transfer of
all shares owned or held by the Individual Shareholders in Target
immediately prior to the date of this agreement and the
subsequent redemption of up to 3,810,000 of such Deferred
Redeemable Ordinary Shares of US$0.01 from the proceeds of the
Lead Equity Investors subscribing for shares in the capital of
the Parent.
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(c) Restriction on payment of dividends
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, declare or pay, directly or indirectly, any
dividend or make any other distribution or pay any interest or
other amounts, whether in cash or otherwise, on or in respect of
its share capital or any class of its share capital or set apart
any sum for any such purpose, other than:
(i) by a Group Company to another Group Company which is its
immediate holding company; or
(ii) as permitted under the Intercreditor Deed.
(d) Shareholder payments
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, make any repayment of principal of, or payment
of interest on, or any other payment with respect to any Investor
Loan Notes, or any other Equity Document, or any other
shareholder loans to the Parent, other than as permitted under
the Intercreditor Deed.
(e) Payments to members
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, make any payment to its members by way of
management, royalty or similar fee unless, subject to the
Intercreditor Deed, that payment is provided under the original
terms of the Equity Documents or is in relation to services
actually provided on arm's length commercial terms or is
otherwise permitted under the Mezzanine Finance Documents.
(f) Cash movement
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, be a party to any contractual or similar
restriction (except as set out in any Mezzanine Finance Document)
by which any Group Company is prohibited from making loans,
transferring assets or making any payment of dividends,
distributions of income or other amounts to another Group Company
or to the Mezzanine Finance Parties.
(g) Senior Lenders
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, make any repayment of principal or payment of
interest or of any other amount under any Senior Finance
Document, other than as permitted under the Intercreditor Deed.
(h) Alchemy Bridge Documents
No Obligor will, and each Obligor will procure that none of its
Subsidiaries will, make any repayment of principal or payment of
interest or of any other amount under any Alchemy Bridge
Document, other than as permitted under the Intercreditor Deed.
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18.10 Information and accounting undertakings
(a) Defaults
Each Obligor will notify the Mezzanine Facility Agent forthwith
upon becoming aware of the occurrence of a Default and will from
time to time on request supply the Mezzanine Facility Agent with
a certificate signed by any two of its directors certifying that
no Default has occurred and is continuing or, if that is not the
case, setting out details of any Default which is outstanding and
the action taken or proposed to be taken to remedy it.
(b) Books of account and auditors
Each Obligor will, and will procure that each of its Subsidiaries
will:
(i) keep proper books of account relating to its business; and
(ii) have as its auditors any one of Deloitte & Touche, Ernst &
Young, KPMG or PricewaterhouseCoopers (or such other firm as
the Mezzanine Facility Agent shall approve (such approval
not to be unreasonably withheld or delayed)).
(c) Financial statements
The Parent will deliver to the Mezzanine Facility Agent (with
sufficient copies for each of the Mezzanine Lenders):
(i) as soon as available, and in any event within 120 days after
the end of each Financial Year, copies of:
(A) the audited consolidated accounts of the Group as at
the end of and for that Financial Year, including a
profit and loss account, balance sheet, cash flow
statement and directors and auditors' report on those
accounts; and
(B) the audited accounts of each Obligor for that Financial
Year;
(ii) as soon as available and in any event within 30 days from
the end of each Management Accounting Period after the
Unconditional Date:
(A) copies of the unaudited consolidated management
accounts of the Group (including information relating
to each business unit including, to the extent
available, data by reference to the top ten titles and
by reference to sales channel (provided that the Parent
shall ensure such information is available in respect
of each Management Accounting Period ending after the
date falling 360 days after the Unconditional Date)) as
at the end of and for that Management Accounting
Period, including a profit and loss account, balance
sheet, cash flow statement (both on a monthly and
cumulative basis) and comparing actual performance to
forecasted performance as set out in the Operating
Budget, together with a management commentary for the
Group (including as to the reasons for any significant
adverse variance from the Operating Budget) and
management commentary on ongoing litigation of the
Group; and
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(B) an update of the projections contained in the most
recent Operating Budget delivered under clause
18.10(c)(iii),
in such form as the Parent and the Mezzanine Facility Agent
shall agree; and
(iii) no less than one month before the beginning of each
Financial Year, the Operating Budget for that Financial
Year, in such form as the Parent and the Mezzanine Facility
Agent shall agree; and
(iv) within seven days of the Unconditional Date, a copy of the
latest unaudited consolidated monthly management accounts
for the Target Group,
which accounts (other than those delivered pursuant to paragraph
(iv)), Operating Budget and update to the Operating Budget shall,
in each case, have been approved by the finance director of the
Parent.
(d) Compliance certificates
(i) Each of the Annual Accounts and Monthly Accounts as at the
end of each Accounting Quarter must be accompanied by a
certificate signed by the finance director and one other
director of the Parent, which shall:
(A) certify whether or not, as at the date of the relevant
accounts, the Parent was in compliance with the
financial covenants contained in clause 18.14
(Financial covenants) and contain reasonably detailed
calculations acceptable to the Mezzanine Facility
Agent; and
(B) confirm that, as at the date of that certificate, no
Default is outstanding or, if that is not the case, set
out details of any Default which is outstanding and the
action taken or proposed to be taken to remedy it.
(ii) Each of the Annual Accounts must be accompanied by a
certificate from the Auditors which shall:
(A) be in a form acceptable to the Mezzanine Facility
Agent; and
(B) demonstrate whether or not, as at the date of the
relevant Annual Accounts, the Parent was in compliance
with the financial covenants contained in clause 18.14
(Financial covenants); and
(C) confirm the amount of Excess Cashflow (together with a
calculation of how that amount has been calculated) for
the purpose of clause 10.6 (Excess Cashflow).
(e) Approved Accounting Principles
All accounts of any Group Company delivered to the Mezzanine
Facility Agent under this agreement shall be prepared in
accordance with the Approved Accounting Principles and, in the
case of Annual Accounts, in compliance with the Irish Companies
Acts 1963 to 2001. If there is a change in the Approved
Accounting Principles after the date of this agreement:
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(i) the Parent shall promptly advise the Mezzanine Facility
Agent;
(ii) following request by the Mezzanine Facility Agent, the
Parent and the Mezzanine Facility Agent shall negotiate in
good faith with a view to agreeing any amendments to clauses
18.14 (Financial covenants) and 18.15 (Financial
definitions) which are necessary to give the Mezzanine
Lenders comparable protection to that contemplated by those
clauses at the date of this agreement;
(iii) if amendments satisfactory to the Majority Mezzanine
Lenders are agreed by the Parent and the Mezzanine Facility
Agent, those amendments shall take effect in accordance with
the terms of that agreement; and
(iv) if amendments satisfactory to the Majority Mezzanine Lenders
are not so agreed then upon delivering any accounts pursuant
to paragraph (c) (i) or (ii) above the Parent shall either:
(A) deliver to the Mezzanine Facility Agent, in reasonable
detail and in a form satisfactory to the Mezzanine
Facility Agent, details of any adjustments which need
to be made to the relevant accounts in order to bring
them into line with the Approved Accounting Principles
as at the date of this agreement; or
(B) ensure that the relevant accounts are prepared in
accordance with the Approved Accounting Principles as
at the date of this agreement.
(f) Management meetings
The Mezzanine Facility Agent shall be entitled to call for
meetings with the senior management of the Parent twice in each
Financial Year to discuss financial information delivered under
clause 18.10(c) (Financial statements) on reasonable prior notice
and at times reasonably convenient to the senior management of
the Parent.
(g) Accounting reference date
(i) Except pursuant to (iii) below, the Parent shall not change
its Financial Year end without the prior consent of the
Mezzanine Facility Agent.
(ii) To the extent permitted by applicable law in any
jurisdiction outside the UK in which each relevant
Subsidiary is incorporated, the Parent shall procure that
the financial year end of each of its Subsidiaries is the
same as the Financial Year end.
(iii) The Parent shall, and shall procure that each Subsidiary
shall, change its Financial Year end to 31 December within
30 days of the Unconditional Date.
(h) Investigations
(i) If the Majority Mezzanine Lenders have reasonable grounds
for believing that either:
(A) any accounts or calculations provided under this
agreement are inaccurate or incomplete in any material
respect; or
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(B) the Parent is, in breach of any of its obligations
under clause 18.14 (Financial covenants),
then the Parent will at its own expense, if so required by
the Mezzanine Facility Agent, instruct the Auditors (or
other firm of accountants selected by the Mezzanine Facility
Agent) to discuss the financial position of the Group with
the Mezzanine Facility Agent and to disclose to the
Mezzanine Facility Agent and the Mezzanine Lenders (and
provide copies of) such information as the Mezzanine
Facility Agent may reasonably request regarding the
financial condition and business of the Group.
(ii) If, having taken the steps in (i) above, the Majority
Mezzanine Lenders request, the Mezzanine Facility Agent may
instruct the Auditors (or other firm of accountants selected
by the Mezzanine Facility Agent) to carry out an
investigation at the Parent's expense into the affairs, the
financial performance and/or the accounting and other
reporting procedures and standards of the Group, and the
Parent will procure that full co-operation is given to the
Auditors or other firm of accountants so selected. If in any
one calendar year more than one such investigation is
carried out and each reveals no such inaccuracy or breach
then the Parent shall only be liable for the costs of the
first such investigation
(i) Other information
The Parent will promptly deliver to the Mezzanine Facility Agent
for distribution to the Mezzanine Lenders:
(i) details of any litigation, arbitration, administrative or
regulatory proceedings relating to it or any of its
Subsidiaries involving a potential liability for the Group
of at least $500,000;
(ii) details of any material labour dispute affecting it or any
of its Subsidiaries;
(iii) at the same time as it is sent to its creditors, any other
document or information sent to any class of its creditors
generally (excluding for this purpose creditors which are
Group Companies);
(iv) any other information relating to the financial condition or
operation of any Group Company which the Mezzanine Facility
Agent may from time to time reasonably request;
(v) details of any breach of the provisions of any Transaction
Document of which it is aware;
(vi) notice of the receipt of any notice to terminate the
Sonopress Contract from the counterparty thereto or notice
served to terminate the Sonopress Contract; and
(vii) copies of any notice given or received under the
Transaction Documents.
(j) Access
Upon reasonable notice being given by the Mezzanine Facility
Agent, if there are reasonable grounds for believing a Default
has occurred or is imminent, the Parent will procure that any
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one or more representatives of the Mezzanine Facility Agent or
other professional advisers appointed by the Mezzanine Facility
Agent are allowed to have access during normal business hours to
the assets, books and records of each member of the Group, and
are able to inspect and copy the same.
18.11 Offer undertakings
The Parent will
(a) Press release:
(i) issue the Press Release within two Business Days of the date
of this agreement and the Second Press Release by the close
of business on the Business Day following the day on which
the pre-conditions in Appendix 1 of the Press Release have
been satisfied; and
(ii) not waive or amend any pre-condition to the offer contained
in the Press Release (or exercise any discretion or give any
consent under any pre-condition to the Offer);
(b) Offer document:
(i) despatch the Offer Document as soon as practicable and in
any event within 28 days of issuing the Press Release; and
(ii) despatch the Offer Document containing substantially similar
terms and subject to the same conditions as set out in the
Press Release (save to the extent then satisfied).
(c) Progress of Offer: keep the Mezzanine Facility Agent informed as
to the progress of the Offer and any material developments in
relation to the Offer and promptly on request provide the
Mezzanine Facility Agent with any information or advice received
in relation to the Offer.
(d) Announcements:
(i) promptly deliver to the Mezzanine Facility Agent, copies of
all press and other announcements made by the Parent or by
the Target in connection with or in relation to the Offer
and any documents or statements issued by the Panel, the
Minister for Enterprise, Trade and Employment, the
Competition Commission, the Competition Authority or the
U.S. Department of Justice, the U.S. Federal Trade
Commission or, the U.S. Securities and Exchange Commission
or any other regulatory authority in relation to the Offer;
(ii) where any announcement, press release or publicity material
refers to the Group or the Mezzanine Facility Agent or any
other Mezzanine Finance Party or the Facility, not release
or permit such announcement, press release or publicity
material to be released until the Parent and the Mezzanine
Facility Agent has each given its consent to such release
(such approval not to be unreasonably withheld and to be
given or refused within 24 hours of receipt by the Parent or
the Mezzanine Facility Agent (as the case may be) of the
relevant material) provided that no such consent or approval
will be required for the Mezzanine Facility Agent or the
Mezzanine Lenders or the Parent to make an announcement
required to be made to comply with any relevant laws or
regulation or requirements of the Panel or the Irish Stock
Exchange Limited, the Irish
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Companies Registration Office or the U.S. Securities and
Exchange Commission or any other applicable regulatory or
other authority (subject to these parties using all
reasonable endeavours to consult with each other prior to
making the announcement).
(e) Conduct of Offer:
Ensure that the Press Release, the Second Press Release, the
Offer Documents, all other documents issued by it or on its
behalf in connection with the Offer and its conduct of the Offer
comply in all material respects with all applicable laws and
regulations (including the requirements of the Code, the Irish
Companies Act, 1963 and the Listing Rules of the Irish Stock
Exchange Limited) and that as and when necessary all material
consents from all governmental and other regulatory authorities
required in connection with the Offer are obtained, maintained
and/or renewed as appropriate and that all its obligations in
connection with the Offer are performed in all material respects.
(f) Offer Terms:
(i) not increase the amount payable by it in respect of the
Target Shares pursuant to the Offer or otherwise vary the
consideration payable pursuant to the Offer without the
prior written consent of the Mezzanine Lenders;
(ii) not extend the Offer beyond 60 days from the date on which
the Offer Document is posted;
(iii) not take any action (and procure to the extent it is able
that no person acting in concert with it takes any action)
which will result in it becoming obliged to make an offer to
shareholders in the Target under Rule 9 of the Code;
(iv) not waive or amend any condition of the Offer (or exercise
any discretion or give any consent under any Offer Document)
except:
(A) if required by the Panel, the Code, the Listing Rules
of the Irish Stock Exchange Limited or any other
applicable law or regulation with binding effect;
(B) where the Panel will not allow the relevant condition
to be invoked; or
(C) with the prior written consent of the Mezzanine
Facility Agent;
(v) notwithstanding (iv) above, unless the Mezzanine Lenders
otherwise agree, not declare the Offer unconditional as to
acceptances until valid acceptances by shareholders of the
Target have been received (and not, where permitted,
withdrawn) in respect of an aggregate amount of not less
than 80% of the shares to which the Offer relates;
(vi) notwithstanding (iv) above, unless the Mezzanine Lenders
otherwise agree, not declare the Offer unconditional in all
respects until valid acceptances have been received (and
not, where permitted, withdrawn) from not less than 75 per
cent. of the holders of the shares to which the Offer
relates calculated by reference to each of the following
dates:
(A) the date of despatch of the Offer Document to holders
of the Shares in the Target to which the Offer relates;
and
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(B) the date on which the condition requiring valid
acceptances by shareholders of Target in respect of an
aggregate amount of not less than 80 per cent. of the
Shares to which the Offer relates is satisfied; and
(C) the date on which the Offer ceases to be open for
acceptance.
(g) Purchase of remaining Target Shares: Promptly following the
Unconditional Date use its best endeavours (which shall not
include an obligation to purchase Target Shares at a price higher
than in the Offer) to acquire all the issued share capital of the
Target as soon as reasonably practicable. Without limiting the
foregoing, the Parent will promptly after becoming entitled to do
so, exercise its rights under section 204(1) of the Irish
Companies Act, 1963 and ensure that notices under that section
are despatched within 7 Business Days of the Parent being
entitled to despatch such notices.
(h) Take private procedure and provision of Target security: Use its
best endeavours to re-register the Target as a private company
pursuant to section 14 of the Irish Companies (Amendment) ▇▇▇
▇▇▇▇ as soon as practicable after the Unconditional Date, to
de-list its shares and to procure that the Target Group Companies
identified in part 2 of Schedule 9 and incorporated in the
Republic of Ireland (provided that such action is not prohibited
by law or if prohibited by law, in the reasonable opinion of the
Mezzanine Facility Agent such prohibition is not capable of being
lawfully overcome) enter into the Guarantee Increase Deed as soon
as practicable thereafter and to ensure that:
(i) the Guarantee Increase Deed to be provided by the relevant
Target Companies listed in part 2 of schedule 9 and
incorporated in the Republic of Ireland is provided no later
than 90 days from the Unconditional Date;
(ii) prior thereto, the relevant Target Companies enter into the
Financial Assistance Documents and otherwise comply with the
provisions of section 60 of the Irish Companies Act, 1963 in
all respects; and
(iii) the Hedging Guarantee and Debenture to be provided by the
relevant Target Companies listed in part 3 of schedule 9 is
provided no later than 90 days from the Unconditional Date.
Notwithstanding any other rights of the Mezzanine Finance
Parties, if the Guarantee Increase Deed is not entered into by
any relevant Target Company within the period specified in clause
18.11(h)(i) above, the Mezzanine Facility Agent (acting on the
instructions of the Majority Mezzanine Lenders) shall be entitled
to require the Parent to take such action as the Mezzanine
Facility Agent may reasonably require to mitigate the effects of
such failure, including, without limitation, switching all or any
part of the Facility into Target and/or its Subsidiaries by
requiring upstream dividends to be paid by Target (and/or its
Subsidiaries) to the Parent (provided in each case that such
action is not prohibited by law). By executing each relevant
Security Document, each Group Company shall be deemed to have
irrevocably appointed the Mezzanine Facility Agent as its
attorney for such purposes.
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18.12 US
(a) ERISA
(i) No Group Company will, and each Group Company will procure
that none of its Subsidiaries will, have any Unfunded
Liabilities for any and all Plans maintained for or covering
employees of any Group Company or its Subsidiaries which
would have a Material Adverse Effect.
(ii) As soon as possible, and in any event within thirty (30)
days, after any Group Company knows or has reason to know
that any Group Company will or has become party to any
Multiemployer Plan, such Group Company will deliver to the
Mezzanine Facility Agent a statement setting forth the full
details as to such occurrence.
(b) Margin Stock
No Obligor will use any proceeds of the Advance for the purpose,
whether immediate, incidental or ultimate, of purchasing or
carrying any "Margin Stock" (within the meaning of Regulation T,
U or X of the Board of Governors of the Federal Reserve System of
the United States of America).
18.13 Board representation
(a) Representation
For so long as there are sums outstanding under the Mezzanine
Finance Documents, a Mezzanine Facility Agent shall be entitled
either (i) to appoint its representative as a director of the
Parent and such other member or members of the Group as the
Mezzanine Facility Agent shall elect, or (ii) to nominate a
representative to attend meetings of the boards of directors of
the Parent and such other member or members of the Group as the
Mezzanine Facility Agent shall elect in the capacity of observer
(the "Observer");
(b) Information
The Parent will ensure and procure that at all times whilst the
Mezzanine Facility Agent is entitled to exercise its rights under
clause 18.13(a) (Representation):
(i) the Mezzanine Facility Agent is given at least as much
notice of the date, time and place of, and agenda for, all
board meetings as is given to every member of the relevant
board and, in any event, no less notice than is required to
be given under the Investment Agreement and the relevant
Group Company's constitutional documents; and
(ii) the Mezzanine Facility Agent is supplied with copies of all
such notices, reports, written presentations, board papers
and other written information (collectively, "Board Papers")
as is supplied or distributed to other members of the
relevant boards at the same time such notices, reports,
written presentations, board papers and other written
information are supplied to such other members;
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(c) Observer
If the Mezzanine Facility Agent's representative is appointed as
an Observer it will attend meetings as an observer only (in this
capacity, an "Observer"), and shall have no rights or liabilities
with regard to the direction and/or conduct of the management of
the relevant Group Company by virtue of its being entitled to
attend, and attending, board meetings as an Observer. In its
capacity as Observer, the Mezzanine Facility Agent will, however,
be entitled to speak at, and to be heard at, board meetings but
will not have a vote at board meetings, and will not be, or be
entitled to be, counted in the quorum for any board meeting;
(d) Expenses
The reasonable expenses of the Mezzanine Facility Agent's
director or Observer attending board meetings shall be for the
account of the Parent and shall be discharged by the Parent
promptly upon demand being made therefor;
(e) Frequency
Notwithstanding any other provision of this agreement, the Parent
shall procure that members of the board of the directors of the
relevant Group Company shall meet with the Mezzanine Facility
Agent at any time upon the reasonable request of the Mezzanine
Facility Agent for so long as there are sums outstanding under
the Mezzanine Finance Documents but not more than once in any
three month period.
18.14 Financial covenants
The Parent undertakes that it will procure that:
(a) Interest cover
The ratio of EBITA to Total Interest Payable for each Testing
Period ending on a Testing Date set out in the table below shall
not be less than the ratio set out in the table below opposite
that Testing Date:
Date Ratio
30 June 2003 2.30:1
30 September 2003 3.55:1
31 December 2003 4.15:1
31 March 2004 4.25:1
30 June 2004 4.55:1
30 September 2004 4.75:1
31 December 2004 4.90:1
31 March 2005 5.00:1
30 June 2005 5:10:1
30 September 2005 5.25:1
31 December 2005 5.45:1
31 March 2006 5.65:1
30 June 2006 5.90:1
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Date Ratio
30 September 2006 6.20:1
31 December, 31 March, 30 June and 6.50:1
30 September in each year thereafter
(b) Leverage Ratio
At any time, the ratio of Total Debt, as tested as at each
Testing Date set out in the table below to EBITA for the Testing
Period ending on that Testing Date shall not exceed the ratio set
out in the table below opposite that Testing Date:
Date Ratio
30 June 2003 3.80:1
30 September 2003 4.10:1
31 December 2003 3.90:1
31 March 2004 3.75:1
30 June 2004 3.40:1
30 September 2004 3.35:1
31 December 2004 3.15:1
31 March 2005 3.15:1
30 June 2005 2.95:1
30 September 2005 2.95:1
31 December 2005 2.70:1
31 March 2006 2.70:1
30 June 2006 2.45:1
30 September 2006 2.45:1
31 December 2006 2.15:1
31 March, 30 June, 30 September and 2.00:1
31 December in each year thereafter
(c) Cashflow Cover
The ratio of Cashflow to Total Debt Service for each Testing
Period ending on a Testing Date set out in the table below shall
not be less than the ratio set out in the table below opposite
that Testing Date:
Date Ratio
30 June 2003 1.00:1
30 September, 31 December, 31 March and
30 June in each year thereafter 1.00:1
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(d) Capital Expenditure
(i) Subject to paragraph (ii) below, the Group shall not, in any
Financial Year incur Capital Expenditure in excess of 115
per cent of the budgeted Capital Expenditure for that
Financial Year set out in the Operating Budget in respect of
that Financial Year.
(ii) If the Capital Expenditure incurred in any Financial Year is
less than 115 per cent of the budgeted Capital Expenditure
for that Financial Year set out in the Operating Budget in
respect of that Financial Year then the shortfall (up to 10
per cent. of the applicable limit) may be carried forward to
the subsequent Financial Year but no further.
18.15 Financial definitions
For the purposes of clause 18.14 (Financial covenants);
"Cash" means cash at bank credited to an account in the name of a
Group Company with a Senior Lender (or, after the Senior Discharge
Date, a Mezzanine Lender) or an Eligible Lender and to which that
Group Company is beneficially entitled which is repayable on demand
(or within 30 days of demand) without condition;
"Cash Equivalents" means marketable debt securities with a maturity of
three months or less and with a short term debt rating of at least A1
+ granted by Standard and Poors Corporation or Pl granted by ▇▇▇▇▇'▇
Investors Services, Inc. to which a Group Company is beneficially
entitled, and which can be promptly realised by that Group Company
without condition;
"Cashflow" means EBITDA for the relevant Testing Period:
(a) plus the amount of any decrease or minus the amount of any
increase in Working Capital during that Testing Period;
(b) plus any Tax rebate received in cash, or minus any Tax paid in
cash, during that Testing Period;
(c) minus all Capital Expenditure paid during that Testing Period
(and for the avoidance of doubt excluding Capital Expenditure in
respect of finance leases and hire purchase contracts);
(d) [intentionally left blank];
(e) including any exceptional item within the meaning of FRS3 paid or
received in cash during that Testing Period, which shall include
for the avoidance of doubt:
(i) any restructuring provisions on the consolidated balance
sheet of Target as at 30 September 2002 (to the extent
included in the Accountants' Report) to the extent released
during such Testing Period;
(ii) any cash payment by Target to Teachers Universe Inc. and/or
TU SUB LLC during that Testing Period in settlement of
obligations of Target arising under the TU Agreement; and
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(iii) all reasonable costs incurred in connection with any
litigation, arbitration or administrative proceedings
commenced by or against any Obligor or Material Subsidiary
to the extent paid during that Testing Period,
in each case to extent not already taken account of in EBITDA;
(f) plus the amount of any dividends or other profit distributions
(net of Tax) received in cash by any Group Company during that
Testing Period from companies which are not Group Companies;
(g) minus the amount of any dividends or other profit distributions
paid by the Parent during that Testing Period; and
(h) minus the amount of any profit of any Subsidiary of the Parent
taken into account in EBITA for that Testing Period which,
whether by law or for any other reason, cannot be distributed by
way of dividend, loan or other means to the Parent; and
(i) minus, to the extent included, any Offer Costs in excess of
$33,000,000.
"EBITA" means the consolidated profit of the Group for the relevant
Testing Period:
(a) before any deduction of corporation tax or other Taxes on income
or gains;
(b) before any deduction for Interest Payable;
(c) after deducting (to the extent otherwise included) Interest
Receivable;
(d) after adding back or deducting, as the case may be, the amount of
any loss or gain against book value arising on a disposal of any
fixed asset (other than stock disposed of in the ordinary course
of trading) during that Testing Period, to the extent included in
arriving at EBITA for that Testing Period;
(e) before deducting amortisation of any goodwill or impairment of
any intangible assets;
(f) after deducting any depreciation on fixed assets;
(g) after deducting the regular pension service cost;
(h) including items which would be regarded as exceptional items
within the meaning of FRS3 during the period to which such
accounts relate;
(i) excluding any non-cash costs incurred in connection with the
issuing options pursuant to the Share Option Scheme;
(j) excluding any amount amortised against, or charged to, the
Group's profit and loss account during such Testing Period in
respect of Offer Costs in an aggregate amount not exceeding
$33,000,000; and
(k) excluding all extraordinary items.
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"EBITDA" means EBITA for the relevant Testing Period, after adding
back depreciation during that Testing Period, to the extent deducted
in calculating EBITA;
"Eligible Lender" means any bank or financial institution with a short
term rating of at least A1 granted by Standard and Poors Corporation
or P1 granted by ▇▇▇▇▇'▇ Investors Services, Inc.;
"Interest" means interest and amounts in the nature of interest paid
or payable in relation to any Financial Indebtedness including:
(a) the interest element of finance leases;
(b) discount and acceptance fees payable (or deducted) in relation to
any Financial Indebtedness;
(c) fees payable in connection with the issue or maintenance of any
bond, letter of credit, guarantee or other assurance against
financial loss which constitutes Financial Indebtedness and is
issued by a third party on behalf of a Group Company;
(d) repayment and prepayment premiums payable or incurred in repaying
or prepaying any Financial Indebtedness; and
(e) commitment, utilisation and non-utilisation fees payable or
incurred in relation to Financial Indebtedness (but excluding
commitment fees payable pursuant to clause 14.3 and arrangement
fees payable pursuant to clause 14.1);
"Testing Date" means the date specified in the relevant table as the
date as at (or to) which a particular financial ratio is being tested;
"Testing Period" means subject to clause 18.16(a) (Calculation
adjustments) each period which corresponds to the annual accounting
reference period of the Parent or four consecutive Accounting Quarters
and ending on or about a Testing Date;
"Total Debt" means, at any time, the aggregate outstanding principal
or capital amount of all Financial Indebtedness of the Group
(excluding any Financial Indebtedness outstanding under the Investor
Loan Notes at such time) calculated on a consolidated basis less Cash
and Cash Equivalents owned by the Group which can be applied to
discharge the obligations of Companies in relation to Total Debt
Service without restriction and without breaching any law or exchange
control regulation and without incurring any Tax or other costs and
which is or are held in an account of a Senior Lender (or, after the
Senior Discharge Date, a Mezzanine Lender) and/or which is or are
charged in favour of the Security Agent pursuant to a Security
Document in an aggregate amount no greater than the aggregate
Revolving Facility (as defined in the Senior Credit Agreement)
outstanding at such time, except that:
(a) in the case of any finance lease only the capitalised value of
that finance lease (as determined in accordance with the Approved
Accounting Principles) shall be included; and
(b) in the case of any guarantee referred to in the definition of
Financial Indebtedness in clause 1.1 (Definitions), the amount of
that guarantee shall not be included, to the extent it relates to
indebtedness of another Group Company already included in the
calculation of Total Debt;
"Total Debt Service" means the aggregate of:
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(a) Total Interest Payable for the relevant Testing Period; and
(b) all scheduled repayments of principal under the terms of any
Financial Indebtedness of any Group Company (excluding any
Financial Indebtedness between any Group Company and any other
Group Company) falling due during that Testing Period:
(i) including all capital payments falling due in relation to
any finance leases and other Financial Indebtedness falling
within paragraph (g) of the definition of Financial
Indebtedness in clause 1.1 (Definitions); and
(ii) excluding any repayment or prepayment of any overdraft or
revolving credit facility falling due during that period and
capable of being simultaneously redrawn under the terms of
the relevant facility; and
(iii) excluding all performance bonds and guarantees;
"Total Interest Payable" means the total of:
(a) Interest accrued (whether or not paid or capitalised) during the
relevant Testing Period; and
(b) the amount of the discount element of any Financial Indebtedness
amortised during that Testing Period;
as an obligation of any Group Company during that period and adjusted
for amounts payable and receivable under Hedging Instruments and
excluding interest accruing on the Investor Loan Notes and the
Facility to the extent not paid in cash but capitalised; and
"Working Capital" means trade and other debtors in relation to
operating items of any Group Company, plus prepayment and stock, less
trade and other creditors in relation to operating items of any Group
Company (but not in relation to Financial Indebtedness or Taxation)
and less accrued expenses and accrued costs of any Group Company.
18.16 Calculation
(a) The covenants contained in clause 18.14 (Financial covenants)
will be tested by reference to the Quarterly Accounts for the
relevant Accounting Quarters, unless the Annual Accounts for all
or any part of the relevant period are available on the relevant
date on which any such covenant is tested, in which case those
Annual Accounts shall be used instead.
(b) If the Annual Accounts are not available when any covenant
referred to in clause 18.16(a) is tested, but when those Annual
Accounts become available, they show that the figures in any
relevant Quarterly Accounts utilised for any such calculation
cannot have been substantially accurate, the Mezzanine Facility
Agent may require such adjustments to the calculations made or to
be made which it, in its sole discretion, considers appropriate
to rectify that inaccuracy and compliance with the covenants in
clause 18.14 (Financial covenants) will be determined by
reference to those adjusted figures.
(c) The components of each definition used in clause 18.14 (Financial
covenants) will be calculated in accordance with the Approved
Accounting Principles, as varied by this agreement.
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18.17 Calculation adjustments
(a) For the purpose of determining compliance with the financial
covenants in clause 18.14(a) (Interest cover), 18.14(b) (Leverage
Ratio) and 18.14(c) (Cashflow Cover) if the Group acquires a
company or companies (having obtained any necessary consent under
this agreement to do so), until the first Testing Date which
falls more than 12 months after the relevant company or companies
became Subsidiaries of the Parent, the results of such company or
companies will be deemed included with those of the rest of the
Group for the full duration of the relevant Testing Period as if
such company or companies had become a Group Company at the
commencement of the Testing Period. Any necessary aggregation of
their results will (if required by the Mezzanine Facility Agent
(acting reasonably)) be confirmed by the Auditors and will not
include any synergy benefits expected to be achieved as a result
of the acquisition of such company or companies.
(b) For the purpose of the financial covenants in clauses 18.14(a)
(Interest Cover) and 18.14(c) (Cashflow Cover), the Testing
Periods ending less than 12 months after the Unconditional Date
shall be deemed to commence on the Unconditional Date and end on
the relevant Testing Date.
(c) For the purpose of determining compliance with the financial
covenants in clause 18.14(b) (Leverage Ratio), EBITA for the
Testing Period ending on each Testing Date set out below shall be
calculated as follows:
(i) in respect of the Testing Period ending on 30 June 2003,
EBITA for such Testing Period shall be the aggregate of
EBITA for the three month period ended 30 June 2003 plus
$36,541,000;
(ii) in respect of the Testing Period ending on 30 September 2003
EBITA for such Testing Period shall be the aggregate of
EBITA for the six month period ended 30 September 2003 plus
$21,741,000; and
(iii) in respect of the Testing Period ending on 31 December 2003
EBITA for such Testing Period shall be the aggregate of
EBITA for the nine month period ended 31 December 2003 plus
$9,241,000.
provided that for this purpose EBITA in respect of any period
prior to the Unconditional Date shall be calculated as if the
reference to Group in the definition of EBITA was a reference to
the Target Group.
(d) For the purpose of determining compliance with the financial
covenants in clauses 18.14 (a) (Interest cover) and 18.14(b)
(Leverage ratio), EBITA for the relevant Testing Period shall be
adjusted to include any reasonable costs incurred in connection
with any litigation, arbitration or administrative proceedings
commenced by or against any Obligor or Material Subsidiary to the
extent included in EBITA during such Testing Period provided that
the maximum aggregate amount added back in accordance with this
clause 18.17(d) shall be $1,400,000 less the aggregate amount of
all such costs added back in all previous Testing Periods
counting the same only once.
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19. EVENTS OF DEFAULT
19.1 List of events
Each of the events set out in this clause 19.1 constitutes an Event of
Default, whether or not the occurrence of the event concerned is
outside the control of any Group Company.
(a) Payment default
Any Obligor fails to pay on the due date any amount payable by it
under any Mezzanine Finance Document at the place at which and in
the currency in which it is expressed to be payable, unless the
Mezzanine Facility Agent is satisfied that non-payment is due
solely to administrative or technical delays in the transmission
of funds and payment is made within three Business Days of its
due date.
(b) Breach of other obligations
(i) Any Obligor fails to comply with any of its obligations
under clauses 18.3 (Disposals and Security Undertakings) to
18.5 (Financing arrangement undertakings) (inclusive),
sub-clauses (a), (b), (e), (f), (g) or (h) of clause 18.11
(Offer Undertakings) or clause 18.14 (Financial covenants).
(ii) Any Obligor fails to comply with any of its obligations
under any Mezzanine Finance Document, other than those
specified in clause 19.1(a) (Payment default) or clause
19.1(b)(i) and, if that failure is capable of remedy, it is
not remedied within 10 Business Days of the earlier of:
(A) the Mezzanine Facility Agent notifying the Parent of
that default; and
(B) that Obligor becoming aware of the relevant matter.
(c) Misrepresentation
Any representation, warranty or statement which is made by any
Obligor in any Mezzanine Finance Document or is contained in any
certificate, statement or notice provided under or in connection
with any Mezzanine Finance Document is incorrect in any respect
when made (or when deemed to be made or repeated) and, if the
circumstances giving rise to that default are in the opinion of
the Mezzanine Facility Agent capable of remedy, they are not
remedied within 10 Business Days of the earlier of:
(i) the Mezzanine Facility Agent notifying the Parent of that
default; and
(ii) that Obligor becoming aware of the relevant matter.
(d) Invalidity and unlawfulness
(i) Any provision of any Mezzanine Finance Document is or
becomes invalid or unenforceable for any reason or is
repudiated or the validity or enforceability of any
provision of any Mezzanine Finance Document is contested by
any person (other than a Mezzanine Finance Party) or any
party to any Mezzanine Finance Document other
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than a Mezzanine Finance Party denies the existence of any
liability or obligation on its part under any Mezzanine
Finance Document.
(ii) It is or becomes unlawful under any applicable jurisdiction
for any Obligor to perform any of its obligations under any
Mezzanine Finance Document in circumstances or to an extent
which could reasonably be expected to have a Material
Adverse Effect.
(iii) Any act, condition or thing required to be done, fulfilled
or performed in order to:
(A) enable any Obligor lawfully to enter into, exercise its
rights under and perform the obligations expressed to
be assumed by it under any Mezzanine Finance Document
to which it is party;
(B) ensure that the obligations expressed to be assumed by
any Obligor under any Mezzanine Finance Document to
which it is party are legal, valid and binding;
(C) make each Mezzanine Finance Document admissible in
evidence in the courts of England; and
(D) create the security constituted by the Security
Documents to which any Obligor is party,
is not done, fulfilled or performed.
(e) Insolvency
(i) Any Obligor or Material Subsidiary stops or suspends or
threatens, or announces an intention to stop or suspend,
payment of its debts.
(ii) Any Obligor or Material Subsidiary is, for the purpose of or
any other applicable law, deemed to be unable, or admits its
inability, to pay its debts as they fall due or becomes
insolvent or a moratorium is declared in relation to any
indebtedness of any Obligor or Material Subsidiary.
(f) Receivership, examination and administration
(i) Any encumbrancer takes possession of, or a receiver,
examiner or administrator or similar officer is appointed
over or in relation to, all or any part of the assets of any
Obligor or Material Subsidiary.
(ii) A petition is presented, a meeting is convened, an
application is made or any other step is taken for the
purpose of appointing an administrator, examiner or receiver
or other similar officer of, or for the making of an
administration order or an examination order in relation to
any Obligor or Material Subsidiary and:
(A) (other than in the case of a petition to appoint an
administrator or examiner) such petition or application
is not discharged within 10 days; or
(B) in the case of a petition to appoint an administrator
or examiner, the Mezzanine Facility Agent is not
satisfied that it will be discharged before it is
heard.
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(iii) Any US Obligor shall:
(A) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian,
trustee, examiner or liquidator of itself or of all or
a substantial part of its property;
(B) make a general assignment for the benefit of its
creditors;
(C) commence a voluntary case under the US Bankruptcy Code
(or any successor thereof), as amended;
(D) file a petition with respect to itself seeking to take
advantage of any other law relating to bankruptcy,
insolvency, reorganisation, liquidation, dissolution,
arrangement or winding-up, or composition or
readjustment of debts; or
(E) take any corporate action for the purpose of effecting
any of the foregoing with respect to itself.
(g) Compositions and arrangements
(i) Any Obligor or Material Subsidiary convenes a meeting of its
creditors generally or proposes or makes any arrangement or
composition with, or any assignment for the benefit of, its
creditors generally.
(ii) Any Obligor or Material Subsidiary proposes or enters into
any negotiations for or in connection with the rescheduling,
restructuring or re-adjustment of any Financial Indebtedness
by reason of, or with a view to avoiding, financial
difficulties.
(h) Winding up
(i) Any meeting of an Obligor or a Material Subsidiary is
convened for the purpose of considering any resolution for
(or to petition for) its winding up or any Obligor or
Material Subsidiary passes such a resolution.
(ii) A petition is presented for the winding up of an Obligor or
Material Subsidiary (other than a frivolous or vexatious
petition discharged within 10 days of being presented) or an
order is made for the winding up of any Obligor or Material
Subsidiary.
(iii) In respect of any US Obligor, a proceeding or case shall be
commenced, without the application or consent of such US
Obligor, in any court of competent jurisdiction, seeking:
(A) (other than in connection with a solvent reorganisation
or dissolution, the terms of which have been approved
by the Majority Mezzanine Lenders) its reorganisation,
dissolution, liquidation, dissolution, arrangement or
winding-up, or the composition or readjustment of its
or his debts;
(B) the appointment of a receiver, custodian, trustee,
examiner, liquidator or the like of the US Obligor or
of all or any substantial part of its property; or
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(C) similar relief in respect of the US Obligor under any
law relating to the bankruptcy, insolvency,
reorganisation, winding-up, or composition or
adjustment of debts and any such proceeding or case
referred to in clauses (A), (B) or (C) above shall
continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a
period of 14 or more days, or an order for relief
against the US Obligor shall be entered in an
involuntary case under Title 11 of the US Bankruptcy
Code (or any successor thereto), as amended.
(i) Attachment or process
A creditor attaches or takes possession of, or a distress,
execution, sequestration or other process is levied or enforced
upon or sued out against all or any part of the assets of any
Obligor or Material Subsidiary and such process is not discharged
within 10 Business Days.
(j) Suspension of payments
Any order is made, any resolution is passed or any other action
is taken for the suspension of payments, protection from
creditors or bankruptcy of any Obligor or Material Subsidiary.
(k) Similar events elsewhere
There occurs in relation to any Obligor or Material Subsidiary or
any of its assets in any country or territory in which it is
incorporated or carries on business or to the jurisdiction of
whose courts it or any of its assets is subject any event which
appears to the Mezzanine Facility Agent (acting reasonably) to
correspond in that country or territory with any of those
mentioned in clauses 19.1(e) (Insolvency) to 19.1(j) (Suspension
of payments) (inclusive).
(l) Cessation of business
Any Obligor or Material Subsidiary ceases, or threatens or
proposes to cease, to carry on all or a substantial part of its
business.
(m) Compulsory acquisition
All or any part of the assets of any Obligor or Material
Subsidiary are seized, nationalised, expropriated or compulsorily
acquired by, or by the order of, any central or local
governmental authority in a way which, in the reasonable opinion
of the Majority Mezzanine Lenders, is reasonably likely to lead
to a Material Adverse Effect.
(n) Security Interests
Any Security Interest affecting the business, undertaking or any
of the assets of a Group Company and securing indebtedness
exceeding $100,000 (or its equivalent in other currencies) in
aggregate becomes enforceable, whether or not steps are taken to
enforce the same.
(o) Cross default
Any Financial Indebtedness of any Group Company exceeding
$100,000 (or its equivalent in other currencies) in aggregate:
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(i) is not paid when due or within any originally applicable
grace period in any agreement relating to that Financial
Indebtedness; or
(ii) becomes due and payable (or capable of being declared due
and payable) before its normal maturity or is placed on
demand (or any commitment for any such indebtedness is
cancelled or suspended) by reason of a default or event of
default (however described).
(p) Senior Loan Default
Any Event of Default (as defined in the Senior Credit Agreement)
occurs under the Senior Credit Agreement.
(q) Litigation
Any litigation, arbitration or administrative proceeding is
commenced by or against any Obligor or Material Subsidiary which
is reasonably likely to be adversely determined against the
relevant Group Company and if so resolved could reasonably be
expected, individually or when considered together with any other
litigation, arbitration or administrative proceeding which is
reasonably likely to be adversely determined, to result in a
liability to the Group in excess of $10,000,000 (or its
equivalent) (in aggregate) unless the Mezzanine Facility Agent
(acting on the instructions of the Majority Mezzanine Lenders)
confirms that the Majority Mezzanine Lenders agree that such
litigation, arbitration or administrative proceedings taken as a
whole if so adversely determined could not reasonably be expected
to have a Material Adverse Effect.
(r) Intercreditor breach
Any party to the Intercreditor Deed (other than any of the
Mezzanine Finance Parties) fails to comply with its obligations
under the Intercreditor Deed or the Intercreditor Deed ceases to
be binding upon any such party for whatever reason.
(s) Regulatory proceedings
Any regulatory or other proceedings are instigated by any
competition or similar authority (including the Minister for
Enterprise, Trade and Employment, the Competition Authority, The
Office of Fair Trading, the Competition Commission, or the
European Commission, the U.S. Department of Justice and the U.S.
Federal Trade Commission) as a result of the Transaction
Documents having been entered into or implemented and the same
has, or is reasonably likely to have, a Material Adverse Effect.
(t) Auditors' qualification
The Auditors qualify their report on any Annual Accounts in any
manner which, in the reasonable opinion of the Majority Mezzanine
Lenders, is material and adverse in the context of the Mezzanine
Finance Documents.
(u) Key Executive
Any Key Executive:
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(i) ceases to be a full-time employee and director of the Parent
devoting the time and attention to the affairs of the Group
required by the terms of the applicable service contract;
(ii) dies; or
(iii) becomes unable (for whatever reason) adequately to carry
out the functions required to be performed by that Key
Executive by the terms of the applicable service contract,
and in any such event a replacement for that Key Executive has
not been appointed (following consultation with the Mezzanine
Lenders) within six months of such event or, having been so
appointed within six months, has not taken up employment within
six months of appointment but no later than nine months from the
date of such event (or such other period as may be agreed with
the Majority Mezzanine Lenders (acting reasonably)).
(v) ERISA
The occurrence of one or more of the following events which would
individually or in the aggregate have a Material Adverse Effect:
(i) a Reportable Event;
(ii) any Plan has Unfunded Liabilities; and
(iii) a Group Company or any ERISA Affiliate shall have incurred
or is reasonably expected to incur any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax
provisions of the IR Code relating to employee benefit plans
as defined in Section 3 of ERISA.
(w) Material adverse change
At any time there occurs any event or omission which has a
Material Adverse Effect.
(x) Sonopress Contract
The Sonopress Contract is terminated or otherwise ceases to be in
full force and effect unless the Parent certifies on or prior to
the date which is 30 days prior to such termination or expiry
becoming effective that it has been replaced by one or more
contracts and the terms of such replacement contract or contracts
will not have a material adverse effect on the business, assets,
financial condition prospects or operations of the Group (taken
as a whole) (such certification to include supporting evidence).
(y) Security
On the date falling 365 days after the Unconditional Date any
member of the Target Group incorporated in the Republic of
Ireland and named in schedule 9 has failed to execute a Guarantee
Increase Deed or any Security Document set out in schedule 9 to
be executed by such member of the Target Group or has failed to
enter into the Financial Assistance Documents or otherwise comply
with the provisions of section 60 of the Irish Companies Act,
1963 in all respects in relation to such Security Documents.
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19.2 Cancellation and repayment
At any time after the occurrence of an Event of Default which is
continuing, the Mezzanine Facility Agent may, and will if so directed
by the Majority Mezzanine Lenders, by notice to the Parent do all or
any of the following, in addition and without prejudice to any other
rights or remedies which it or any other Mezzanine Finance Party may
have under any other Mezzanine Finance Document:
(a) terminate the availability of the Facility, whereupon the
Facility shall cease to be available for drawing, the undrawn
portion of the Commitments of each of the Mezzanine Lenders shall
be cancelled and no Mezzanine Lender shall be under any further
obligation to make the Advance; and/or
(b) declare the Advance, accrued interest on the Advance and any
other amounts then payable under any Mezzanine Finance Document
to be immediately due and payable, whereupon those amounts shall
become so due and payable; and/or
(c) declare the Advance to be payable on demand, whereupon the
Advance shall become payable on demand.
19.3 Clean Up Period: If during the Clean Up Period a matter or
circumstance exists in respect of the Target and/or any of its
subsidiaries which would constitute a breach of a representation or
warranty made in clause 17 (Representations and Warranties) or a
breach of any covenant set out in clause 18 (Undertakings) or a
Default, such matter or circumstance will not constitute a Default
provided that reasonable steps (in the opinion of the Mezzanine
Facility Agent) are being taken to cure such matter or circumstance
unless such matter or circumstance (1) in the reasonable opinion of
the Majority Banks, is reasonably likely to have a Material Adverse
Effect, or (2) has been procured by, or approved by, the Parent or (3)
has not been cured by the expiry of the Clean Up Period.
20. THE AGENTS AND THE OTHER MEZZANINE FINANCE PARTIES
20.1 Agents' appointment
(a) Each Mezzanine Lender:
(i) appoints RBS Mezzanine Limited as Mezzanine Facility Agent
to act as its agent under and in connection with the
Mezzanine Finance Documents and as Security Agent to act as
its security agent for the purposes of the Security
Documents; and
(ii) irrevocably authorises each Agent for and on its behalf to
exercise the rights, powers and discretions which are
specifically delegated to it by the terms of the Mezzanine
Finance Documents, together with all rights, powers and
discretions which are incidental thereto and to give a good
discharge for any monies payable under the Mezzanine Finance
Documents.
(b) Each Agent will act solely as agent for the Mezzanine Lenders in
carrying out its functions as agent under the Mezzanine Finance
Documents and will exercise the same care as it would in dealing
with a credit for its own account.
(c) The relationship between the Mezzanine Lenders and each Agent is
that of principal and agent only. No Agent shall have, nor be
deemed to have, assumed any obligations to, or trust or
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fiduciary relationship with, the other Mezzanine Finance Parties
or any Obligor, other than those for which specific provision is
made by the Mezzanine Finance Documents.
20.2 Agents' duties
Each Agent shall:
(a) send to each Mezzanine Lender details of each communication
delivered to the Agent by an Obligor for that Mezzanine Lender
under any Mezzanine Finance Document as soon as reasonably
practicable after receipt;
(b) subject to those provisions of this agreement which require the
consent of all the Mezzanine Lenders, act in accordance with any
instructions from the Majority Mezzanine Lenders or, if so
instructed by the Majority Mezzanine Lenders, refrain from
exercising a right, power or discretion vested in it under any
Mezzanine Finance Document;
(c) have only those duties, obligations and responsibilities
expressly specified in the Mezzanine Finance Documents; and
(d) without prejudice to clause 20.6(c) (Communications and
information), promptly notify each Mezzanine Lender:
(i) of any Default which occurs under clause 19.1(a) (Payment
default); and
(ii) if the Agent receives notice from an Obligor referring to
this agreement, describing a Default and stating that the
circumstance described is a Default.
20.3 Agents' rights
Each Agent may:
(a) perform any of its duties, obligations and responsibilities under
the Mezzanine Finance Documents by or through its personnel,
delegates or agents (on the basis that each Agent may extend the
benefit of any indemnity received by it under this agreement to
its personnel, delegates or agents);
(b) except as expressly provided to the contrary in any Mezzanine
Finance Document, refrain from exercising any right, power or
discretion vested in it under the Mezzanine Finance Documents
until it has received instructions from the Majority Mezzanine
Lenders or, where relevant, all the Mezzanine Lenders;
(c) unless it has received notice to the contrary, treat the
Mezzanine Lender which makes available any portion of the Drawing
as the person entitled to repayment of that portion;
(d) refrain from doing anything which would or might in its opinion
be contrary to any law, regulation or judgment of any court of
any jurisdiction or otherwise render it liable to any person and
may do anything which is in its opinion necessary to comply with
any such law, regulation or judgment;
(e) assume that no Default has occurred, unless an officer of that
Agent while active on the account of the Parent acquires actual
knowledge to the contrary;
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(f) refrain from taking any step (or further step) to protect or
enforce the rights of any Mezzanine Lender under any Mezzanine
Finance Document until it has been indemnified and/or secured to
its satisfaction against all losses, (including legal fees) which
it would or might sustain or incur as a result;
(g) rely on any communication or document believed by it to be
genuine and correct and to have been communicated or signed by
the person to whom it purports to be communicated or by whom it
purports to be signed;
(h) rely as to any matter of fact which might reasonably be expected
to be within the knowledge of any Group Company in a statement by
or on behalf of that Group Company;
(i) obtain and pay for any legal or other expert advice or services
which may seem necessary or desirable to it and rely on any such
advice;
(j) accept without enquiry any title which an Obligor may have to any
asset intended to be the subject of the security created by the
Security Documents; and
(k) hold or deposit any title deeds, Security Documents or any other
documents in connection with any of the assets charged by the
Security Documents with any banker or banking company or any
company whose business includes undertaking the safe custody of
deeds or documents or with any lawyer or firm of lawyers and it
shall not be responsible for or be required to insure against any
loss incurred in connection with any such holding or deposit and
it may pay all amounts required to be paid on account or in
relation to any such deposit.
20.4 Exoneration of the Mezzanine Joint Mandated Lead Arrangers and the
Agents
None of the Mezzanine Joint Mandated Lead Arrangers, the Agents or any
of their respective personnel or agents shall be:
(a) responsible for the adequacy, accuracy or completeness of any
representation, warranty, statement or information in the
Syndication Memorandum, any Mezzanine Finance Document or any
notice or other document delivered under any Mezzanine Finance
Document;
(b) responsible for the execution, delivery, validity, legality,
adequacy, enforceability or admissibility in evidence of any
Mezzanine Finance Document;
(c) obliged to enquire as to the occurrence or continuation of a
Default or as to the accuracy or completeness of any
representation or warranty made by any Obligor under any
Mezzanine Finance Document;
(d) responsible for any failure of any Obligor or any of the
Mezzanine Lenders duly and punctually to observe and perform
their respective obligations under any Mezzanine Finance
Document;
(e) responsible for the consequences of relying on the advice of any
professional advisers selected by any of them in connection with
any Mezzanine Finance Document;
(f) liable for acting (or refraining from acting) in what it believes
to be in the best interests of the Mezzanine Lenders in
circumstances where it has been unable, or it is not practicable,
to
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obtain the instructions of the Mezzanine Lenders or the Majority
Mezzanine Lenders (as the case may be); or
(g) liable for anything done or not done by it under or in connection
with any Mezzanine Finance Document, save in the case of its own
gross negligence or wilful misconduct.
20.5 The Mezzanine Joint Mandated Lead Arrangers and the Agents
individually
(a) If it is a Mezzanine Lender, each of the Mezzanine Joint Mandated
Lead Arrangers and the Agents shall have the same rights and
powers under the Mezzanine Finance Documents as any other
Mezzanine Lender and may exercise those rights and powers as if
it were not also acting as a Mezzanine Joint Mandated Lead
Arranger or an Agent.
(b) Each of the Mezzanine Joint Mandated Lead Arrangers and the
Agents may:
(i) retain for its own benefit and without liability to account
any fee or other amount receivable by it for its own
account; and
(ii) accept deposits from, lend money to, provide any advisory,
trust or other services to or engage in any kind of banking
or other business with any party to this agreement or any
subsidiary of any party (and, in each case, may do so
without liability to account).
(c) Each Mezzanine Lender shall supply the Mezzanine Facility Agent
with any information required by the Mezzanine Facility Agent in
order to calculate the Mandatory Cost in accordance with Schedule
4 (Mandatory Cost Formulae).
20.6 Communications and information
(a) All communications to an Obligor in connection with the Mezzanine
Finance Documents are to be made by or through the Mezzanine
Facility Agent. Each Mezzanine Finance Party will notify the
Mezzanine Facility Agent of, and provide the Mezzanine Facility
Agent with a copy of, any communication between that Mezzanine
Finance Party, an Obligor or any other Mezzanine Finance Party on
any matter concerning the Facility or the Mezzanine Finance
Documents.
(b) No Agent will be obliged to transmit to any other Mezzanine
Finance Party any information relating to any party to any
Mezzanine Finance Document which that Agent may have acquired
otherwise than in connection with the Facility or the Mezzanine
Finance Documents. Notwithstanding anything to the contrary
expressed or implied in any Mezzanine Finance Document, no Agent
shall, as between itself and the other Mezzanine Finance Parties,
be bound to disclose to any other Mezzanine Finance Party or
other person any information, disclosure of which might in the
opinion of that Agent result in a breach of any law or regulation
or be otherwise actionable at the suit of any person.
(c) In acting as agent for the Mezzanine Lenders, each Agent's
banking division will be treated as a separate entity from any
other of its divisions (or similar unit of that Agent in any
subsequent re-organisation) or subsidiaries (the "Other
Divisions") and, if the relevant Agent acts for any Group Company
in a corporate finance or other advisory capacity ("Advisory
Capacity"), any information given by any Group Company to one of
the Other Divisions is to be treated as confidential and will not
be available to the Mezzanine Finance Parties without the consent
of the Parent, except that:
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(i) the consent of the Parent will not be required in relation
to any information which the relevant Agent in its
discretion determines relates to a Default or in relation to
which the Mezzanine Lenders have given a confidentiality
undertaking in a form satisfactory to that Agent and the
relevant Group Company (acting reasonably); and
(ii) if representatives or employees of the relevant Agent
receive information in relation to a Default whilst acting
in an Advisory Capacity, they will not be obliged to
disclose that information to representatives or employees of
that Agent in their capacity as agent bank or security agent
under this agreement or to any Mezzanine Lender, if to do so
would breach any rule or regulation or fiduciary duty
imposed upon those persons.
20.7 Non-reliance on the Mezzanine Joint Mandated Lead Arrangers and the
Agents
Each Mezzanine Lender confirms that it is (and will at all times
continue to be) solely responsible for making its own independent
investigation and appraisal of the business, operations, financial
condition, creditworthiness, status and affairs of each Group Company
and has not relied, and will not at any time rely, on any Mezzanine
Joint Mandated Lead Arranger or any Agent:
(a) to provide it with any information relating to the business,
operations, financial condition, creditworthiness, status and
affairs of any Group Company, whether coming into its possession
before or after the making of the Advance, except as specifically
provided otherwise in this agreement; or
(b) to check or enquire into the adequacy, accuracy or completeness
of any information provided by any Group Company under or in
connection with any Mezzanine Finance Document (whether or not
that information has been or is at any time circulated to it by a
Mezzanine Joint Mandated Lead Arranger or an Agent), including
that contained in the Syndication Memorandum; or
(c) to assess or keep under review the business, operations,
financial condition, creditworthiness, status or affairs of any
Group Company.
20.8 Agents' indemnity
(a) Each Mezzanine Lender shall on demand indemnify each Agent (in
proportion to that Mezzanine Lender's participation in the
Drawing (or the Total Commitments if the Drawing is not
outstanding) at the relevant time) against any loss incurred by
the relevant Agent in complying with any instructions from the
Mezzanine Lenders or the Majority Mezzanine Lenders (as the case
may be) or otherwise sustained or incurred in connection with the
Mezzanine Finance Documents or its duties, obligations and
responsibilities under the Mezzanine Finance Documents, except to
the extent that it is incurred as a result of the gross
negligence or wilful misconduct of the relevant Agent or any of
its personnel.
(b) The provisions of clause 20.8(a) are without prejudice to any
obligations of the Obligors to indemnify the Agents under the
Mezzanine Finance Documents.
20.9 Termination and resignation of agency
(a) An Agent (a "Retiring Agent") may resign its appointment at any
time by giving notice to the Mezzanine Lenders and the Parent.
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(b) A successor Agent (a "Successor Agent") shall be selected:
(i) by the Retiring Agent nominating one of its Affiliates
following consultation with the Parent as Successor Agent in
its notice of resignation; or
(ii) if the Retiring Agent makes no such nomination, by the
Majority Mezzanine Lenders nominating a Mezzanine Lender
acting through an office in the United Kingdom as Successor
Agent (following consultation with the Parent); or
(iii) if the Majority Mezzanine Lenders have failed to nominate a
Successor Agent within 30 days of the date of the Retiring
Agent's notice of resignation, by the Retiring Agent and the
Parent by mutual agreement nominating a financial
institution of good standing acting through an office in the
United Kingdom to be the Successor Agent.
(c) The Majority Mezzanine Lenders may at any time with the prior
written consent of the Parent, such consent not to be
unreasonably withheld or delayed, by 30 days' prior notice to the
relevant Agent and the Parent terminate the appointment of an
Agent and appoint a Successor Agent.
(d) The resignation of the Retiring Agent and the appointment of the
Successor Agent will become effective only upon the Successor
Agent accepting its appointment as Agent (and, in the case of the
Security Agent's resignation, upon the execution of all deeds and
documents necessary to substitute its successor as holder of the
security comprised in the Security Documents), at which time:
(i) the Successor Agent will become bound by all the obligations
of the Mezzanine Facility Agent Security Agent (as the case
may be) and become entitled to all the rights, privileges,
powers, authorities and discretions of such Agent under the
Mezzanine Finance Documents;
(ii) the agency of the Retiring Agent will terminate (but without
prejudice to any liabilities which the Retiring Agent may
have incurred prior to the termination of its agency); and
(iii) the Retiring Agent will be discharged from any further
liability or obligation under or in connection with the
Mezzanine Finance Documents (except that the Retiring Agent
shall pay to the Successor Agent a pro rata proportion of
the agency fee referred to in clause 14.2 (Mezzanine Agency
fee) for the 12 month period in relation to which that
agency fee was most recently paid).
(e) The Retiring Agent will co-operate with the Successor Agent in
order to ensure that its functions are transferred to the
Successor Agent without disruption to the service provided to the
Parent and the Mezzanine Lenders and will as soon as practicable
following the Successor Agent's appointment, make available to
the Successor Agent the documents and records which have been
maintained in connection with the Mezzanine Finance Documents in
order that the Successor Agent is able to discharge its
functions.
(f) The provisions of this agreement will continue in effect for the
benefit of any Retiring Agent in relation to any actions taken or
omitted to be taken by it or any event occurring before the
termination of its agency.
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(g) The Parent will execute and procure that each Group Company
executes such agreements as the Retiring Agent shall require in
order to effect the appointment of a Successor Agent for all
purposes (including security related) under the Mezzanine Finance
Documents.
20.10 Role of the Security Agent
The Security Agent shall hold the benefit of the Security Documents on
trust for itself and the other Mezzanine Finance Parties and will
apply all payments and other benefits received by it under the
Security Documents in accordance with the provisions of the
Intercreditor Deed.
20.11 Payments to Mezzanine Finance Parties
(a) Each Agent will account to each other Mezzanine Finance Party for
its due proportions of all amounts received by that Agent for
that Mezzanine Finance Party, whether by way of repayment of
principal or payment of interest, commitment commission, fees or
otherwise.
(b) Each Agent may retain for its own use and benefit, and will not
be liable to account to any other Mezzanine Finance Party for all
or any part of, any amounts received by way of agency or
arrangement fee or by way of reimbursement of expenses incurred
by it.
20.12 Mezzanine Lender tax status
Each Mezzanine Lender will notify each Agent on the date it becomes a
party to this agreement, whether or not it is:
(a) either (i) not resident in the United Kingdom for United Kingdom
Tax purposes, or (ii) a bank as defined in section 840A of the
Income and Corporation Taxes Act 1988 and resident in the United
Kingdom; and
(b) beneficially entitled to the principal and interest payable by
the Mezzanine Facility Agent to it under this agreement.
20.13 Change of office of Agent
An Agent may at any time in its sole discretion by notice to the
Parent and each other Mezzanine Finance Party designate a different
office in the United Kingdom from which its duties as the relevant
Agent will be performed from the date of notification.
21. PRO RATA PAYMENTS
21.1 Recoveries
If any amount owing by any Obligor under any Mezzanine Finance
Document to a Mezzanine Lender (the "Recovering Mezzanine Lender") is
discharged by payment, set-off or any other manner other than through
the Mezzanine Facility Agent in accordance with clause 11 (Payments)
(that amount being referred to in this clause 21.1 as a "Recovery")
then:
(a) within two Business Days of receipt of the Recovery, the
Recovering Mezzanine Lender shall pay to the Mezzanine Facility
Agent an amount equal (or equivalent) to that Recovery;
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(b) the Mezzanine Facility Agent shall treat that payment as if it
was part of the payment to be made by the relevant Obligor to the
Mezzanine Lenders rateably in accordance with their respective
Commitments; and
(c) (except for any receipt by the Recovering Mezzanine Lender as a
result of the operation of clause 21.1(b)) as between the
relevant Obligor and the Recovering Mezzanine Lender, the
Recovery shall be treated as not having been paid.
21.2 Notification of recovery
Each Mezzanine Lender will notify the Mezzanine Facility Agent as soon
as reasonably practicable of any Recovery by that Mezzanine Lender,
other than by payment through the Mezzanine Facility Agent. If any
Recovery subsequently has to be wholly or partly refunded by the
Recovering Mezzanine Lender which paid an amount equal to that
Recovery to the Mezzanine Facility Agent under clause 21.1(a)
(Recoveries), each Mezzanine Lender to which any part of that amount
was distributed will, on request from the Recovering Mezzanine Lender,
repay to the Recovering Mezzanine Lender that Mezzanine Lender's pro
rata share of the amount which has to be refunded by the Recovering
Mezzanine Lender.
21.3 Information
Each Mezzanine Lender will on request supply to the Mezzanine Facility
Agent any information which the Mezzanine Facility Agent may from time
to time request for the purpose of this clause 21.
21.4 Exceptions to sharing of Recoveries
Notwithstanding the foregoing provisions of this clause 21, no
Recovering Mezzanine Lender will be obliged to share any Recovery
which it receives as a result of legal proceedings taken by it to
recover any amounts owing to it under the Mezzanine Finance Documents
with any other party which has a legal right to, but does not, either
join in those proceedings or commence and diligently pursue separate
proceedings to enforce its rights in the same or another court (unless
the proceedings instituted by the Recovering Mezzanine Lender are
instituted by it without prior notice having been given to that other
party through the Mezzanine Facility Agent).
21.5 Several obligations
Failure by any Recovering Mezzanine Lender to comply with any of the
provisions of this clause 21 will not release any other Recovering
Mezzanine Lender from any of its obligations or liabilities under this
clause 21.
21.6 Obtaining consents
Each party to this agreement shall take all steps required of it under
clause 21.1 (Recoveries) and use its reasonable endeavours to obtain
any consents or authorisations which may be required in relation to
any payment to be made by it under this clause 21.
21.7 No security
The provisions of this clause 21 shall not, and shall not be construed
so as to, constitute a charge by any Mezzanine Lender over all or any
part of any amount received or recovered by it under any of the
circumstances mentioned in this clause 21.
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21.8 Hedging Lenders
This clause 21 shall not apply to any Recovery by a Mezzanine Lender
in its capacity as a Hedging Lender.
22. SET-OFF
22.1 Set-off rights
Any Mezzanine Finance Party may at any time (upon notice to the
relevant Obligor):
(a) set-off or otherwise apply amounts standing to the credit of any
Obligor's accounts with that Mezzanine Finance Party
(irrespective of the terms applicable to those accounts and
whether or not those amounts are then due for repayment to that
Obligor); and
(b) set-off any other obligations (whether or not then due for
performance) owed by that Mezzanine Finance Party to the relevant
Obligor,
against any matured liability (or after an Event of Default has
occurred which is continuing, against any liability) of the relevant
Obligor to the relevant Mezzanine Finance Party under the Mezzanine
Finance Documents.
22.2 Different currencies
A Mezzanine Finance Party may exercise its rights under clause 22.1
(Set-off rights) notwithstanding that the amounts concerned may be
expressed in different currencies and each Mezzanine Finance Party is
authorised to effect any necessary conversions at a market rate of
exchange selected by it.
22.3 Unliquidated claims
If the relevant obligation or liability is unliquidated or
unascertained, the Mezzanine Finance Party may set-off the amount
which it estimates (in good faith) will be the final amount of that
obligation or liability once it becomes liquidated or ascertained.
23. NOTICES
23.1 Mode of service
(a) Except as specifically provided otherwise in this agreement, any
notice, demand, consent, agreement or other communication (a
"Notice") to be served under or in connection with any Mezzanine
Finance Document will be in writing and will be made by letter or
by facsimile transmission to the party to be served.
(b) The address and facsimile number of each party to this agreement
for the purposes of clause 23.1(a) are:
(i) the address and facsimile number shown immediately after its
name on the signature pages of this agreement (in the case
of any person who is a party as at the date of this
agreement);
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(ii) the address and facsimile number notified by that party for
this purpose to the Mezzanine Facility Agent on or before
the date it becomes a party to this agreement (in the case
of any person who becomes a party after the date of this
agreement); or
(iii) any other address and facsimile number notified by that
party for this purpose to the Mezzanine Facility Agent by
not less than five Business Days' notice.
(c) Any Notice to be served by any Obligor on a Mezzanine Finance
Party will be effective only if it is expressly marked for the
attention of the department or officer (if any) specified in
conjunction with the relevant address and facsimile number
referred to in clause 23.1(b).
23.2 Deemed service
(a) Subject to clause 23.2(b), a Notice will be deemed to be given as
follows:
(i) if by letter, when delivered personally or on actual
receipt; and
(ii) if by facsimile, when delivered.
(b) A Notice given in accordance with clause 23.2(a) but received on
a non-working day or after business hours in the place of receipt
will only be deemed to be given on the next working day in that
place.
23.3 Electronic communication
(a) Any communication to be made between any Agent and a Mezzanine
Lender under or in connection with the Mezzanine Finance
Documents may be made by electronic mail or other electronic
means, if the relevant Agent and the relevant Mezzanine Lender:
(i) agree that, unless and until notified to the contrary, this
is to be an accepted form of communication;
(ii) notify each other in writing of their electronic mail
address and/or any other information required to enable the
sending and receipt of information by that means; and
(iii) notify each other of any change to their address or any
other such information supplied by them.
(b) Any electronic communication made between any Agent and a
Mezzanine Lender will be effective only when actually received in
readable form and in the case of any electronic communication
made by a Mezzanine Lender to the relevant Agent only if it is
addressed in such a manner as that Agent shall specify for this
purpose.
23.4 Language
(a) Any Notice must be in English.
(b) All other documents provided under or in connection with any
Mezzanine Finance Document must be:
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(i) in English; or
(ii) if not in English, accompanied by a certified English
translation in which case, the English translation will
prevail unless the document is a constitutional, statutory
or other official document.
24. CONFIDENTIALITY
Subject to clause 25.9 (Disclosure of information), the parties will
keep the Mezzanine Finance Documents, the Syndication Memorandum and
their subject matter (including all details relating to the structure
and financing of the Offer) confidential, except to the extent that
they are required by law or regulation or the Panel or the Irish Stock
Exchange Limited to disclose the same. Each Mezzanine Finance Party
agrees with each Obligor to hold confidential all information which it
acquires under or in connection with the Mezzanine Finance Documents,
except to the extent it is required by law or regulation or the Panel
or the Irish Stock Exchange Limited to disclose it or it comes into
the public domain (otherwise than as a result of a breach of this
clause 24). A Mezzanine Finance Party may, however, disclose any such
information to its auditors, legal advisers or other professional
advisers (the "Advisers") for any purpose connected with the Mezzanine
Finance Documents, provided that the relevant Mezzanine Finance Party
takes reasonable steps to procure that each Adviser maintains the
confidentiality of that information and may publicise the transaction
following the issue of the Press Release with the consent of the
Parent (such consent not to be unreasonably withheld or delayed).
25. CHANGES TO PARTIES
25.1 Assignment by the Obligors
No Obligor may assign or transfer all or any part of its rights,
benefits or obligations under any Mezzanine Finance Document.
25.2 Assignments and transfers by Mezzanine Lenders
(a) A Mezzanine Lender (in this capacity the "Transferor") may at any
time assign any of its rights under any Mezzanine Finance
Document or transfer any of its rights and obligations under any
Mezzanine Finance Document to any person (a "Transferee"),
provided that:
(i) the Transferor has first consulted with the Parent;
(ii) the Transferee has executed a Creditor Accession Deed;
(iii) in the case of a transfer of rights only the procedure in
clause 25.3 (Assignments by Mezzanine Lenders) is followed;
and
(iv) in the case of a transfer of rights and obligations the
procedure in clause 25.4 (Transfers by Mezzanine Lenders) is
followed.
(b) The Parent (for itself and as agent for the Obligors) will
execute or procure that there are executed such documents and
take such other actions as are necessary to effect or perfect a
transfer of rights or obligations to a Transferee under the
Mezzanine Finance Documents. Such action will include (i)
promptly countersigning Transfer Certificates (although any delay
or failure by the Parent to so countersign a Transfer Certificate
will not invalidate its operation) and (ii) taking such steps as
the Mezzanine Facility Agent or the Security Agent
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may request (including re-execution of Security Documents) for
the purpose of ensuring that the New Mezzanine Lender has (and
the other Mezzanine Finance Parties continue to have) the benefit
of the same security interests under the Security Documents as
existed immediately before the relevant transfer.
(c) Nothing in this agreement will restrict the ability of a
Mezzanine Lender to sub-participate or sub-contract any of its
obligations under any Mezzanine Finance Document if that
Mezzanine Lender remains liable under that Mezzanine Finance
Document in relation to those obligations. A Mezzanine Lender
shall notify the Parent of any such sub-participation or
sub-contracting by it.
25.3 Assignments by Mezzanine Lenders
(a) Subject to clause 25.2(a) (Assignments and transfers by Mezzanine
Lenders), a Transferor may transfer all or any of its rights
under the Mezzanine Finance Documents by:
(i) the Transferor and the Transferee entering into an
assignment of rights in a form agreed between them (which
may be a modified version of a Transfer Certificate); and
(ii) the Transferee delivering to the Mezzanine Facility Agent a
copy of the executed assignment instrument together with (or
incorporating) a legally binding undertaking (in a form
approved by the Mezzanine Facility Agent) confirming to the
Mezzanine Facility Agent (on behalf of the Mezzanine Finance
Parties) that it assumes the same obligations towards the
Mezzanine Finance Parties (to the extent referable to the
rights transferred to it) as from the Assignment Date (as
defined below) as it would have been under if it had been an
original party to the Mezzanine Finance Documents as a
Mezzanine Lender.
(b) Subject to also having complied with clause 25.2 (Assignments and
transfers by Mezzanine Lenders), the Transferee will be deemed to
become a party to the Mezzanine Finance Documents as a Mezzanine
Lender on the date specified in the assignment instrument (which
must be no earlier than the date it delivers the documents
required by clause 25.3(a)(ii) (the "Assignment Date")).
25.4 Transfers by Mezzanine Lenders
(a) A Transferor may, subject to clause 25.2 (Assignments and
transfers by Mezzanine Lenders), transfer all or any of its
rights and obligations under the Mezzanine Finance Documents to a
Transferee by the Mezzanine Facility Agent executing a Transfer
Certificate which has been duly completed and signed by both the
Transferee and the Transferor.
(b) On the date (the "Transfer Date") which is the later of (A) the
date specified in the Transfer Certificate as being the date on
or as from which the transfer under this clause 25.4 is to take
effect and (B) the date on which the Mezzanine Facility Agent
executes the Transfer Certificate, to the extent that, in the
Transfer Certificate, the Transferor seeks to transfer its right
and obligations under the Mezzanine Finance Documents:
(i) to the extent the Transfer Certificate records a transfer of
the Advance which are outstanding on the Transfer Date, the
transfer will take effect in relation to the Advance and all
related rights under the Credit Agreement by way of
assignment;
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(ii) to the extent the Transfer Certificate records a transfer of
rights and obligations under the Mezzanine Finance Documents
in the case of rights to the extent not assigned as
contemplated by paragraph (i) above), each of the Obligors
and the Existing Mezzanine Lender shall be released from
further obligations towards one another under the Mezzanine
Finance Documents and their respective rights against each
other will be cancelled (such rights and obligations being
referred to in this clause 25.4 as "Discharged Rights and
Obligations");
(iii) each of the Obligors and the New Mezzanine Lender shall
assume obligations towards one another and/or acquire rights
against one another which differ from the Discharged Rights
and Obligations only insofar as that Obligor and the New
Mezzanine Lender have assumed and/or acquired the same in
place of that Obligor and the Existing Mezzanine Lender;
(iv) the Mezzanine Facility Agent, the Security Agent, the
Mezzanine Joint Mandated Lead Arrangers, the New Mezzanine
Lender and the other Mezzanine Lenders shall acquire the
same rights and assume the same obligations between
themselves as they would have acquired and assumed had the
New Mezzanine Lender been a Mezzanine Lender on the date of
this agreement with the rights and/or obligations acquired
or assumed by it as a result of the transfer and to that
extent the Mezzanine Facility Agent, the Security Agent, the
Mezzanine Joint Mandated Lead Arrangers and the Existing
Mezzanine Lender shall each be released from further
obligations to each other under this agreement; and
(v) the New Mezzanine Lender will become a party to this
agreement as a Mezzanine Lender.
(vi) the Transferee 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 Transferee instead of the Transferor;
(vii) the rights of the Transferor and the Existing Parties
against each other under those Mezzanine Finance Documents
(the "Discharged Rights") will be cancelled;
(viii) the Transferee 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 Transferee instead of the Transferor; and
(ix) the Transferee will become a party to this agreement as a
Mezzanine Lender in relation to the Facility.
(c) Each of the parties to this agreement (other than the relevant
Transferor and the relevant Transferee) irrevocably authorises
the Mezzanine Facility Agent to execute on its behalf any
Transfer Certificate which has been duly completed in accordance
with this clause 25.4 and executed by each of the Transferor and
the Transferee.
(d) The Mezzanine Facility Agent will notify the other parties to
this agreement of the receipt and execution by it on their behalf
of any Transfer Certificate as soon as reasonably practicable
following execution.
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25.5 Notification
The Mezzanine Facility Agent will promptly notify the Parent (as agent
for the Obligors) and the other Mezzanine Finance Parties of:
(a) receipt of assignment documents under clause 25.3(a)(ii)
(Assignments by Mezzanine Lenders ); and
(b) the receipt and execution by it of any Transfer Certificate under
clause 25.4 (Transfers by Mezzanine Lenders).
25.6 Fee
On the date on which any transfer takes effect in accordance with this
clause 25, the Transferee will pay to the Mezzanine Facility Agent for
its own account a transfer fee of $1,500.
25.7 Limitation of Responsibility of Transferor
(a) Unless expressly agreed to the contrary, a Transferor makes no
representation or warranty and assumes no responsibility to a
Transferee for:
(i) the legality, validity, effectiveness, adequacy or
enforceability of the Mezzanine Finance Documents or any
other documents;
(ii) the financial condition of any Obligor;
(iii) the performance and observance by any Obligor of its
obligations under the Mezzanine Finance Documents or any
other documents; or
(iv) the accuracy of any statements (whether written or oral)
made in or in connection with any Mezzanine Finance Document
or any other document,
and any representations or warranties implied by law are
excluded.
(b) Each Transferor confirms to the Transferee and the other
Mezzanine Finance Parties that:
(i) it has made (and shall continue to make) its own independent
investigation and assessment of the financial condition and
affairs of each Obligor and its related entities in
connection with its participation in this agreement and has
not relied exclusively on any information provided to it by
the Transferor in connection with any Mezzanine Finance
Document;
(ii) it will continue to make its own independent appraisal of
the creditworthiness of each Obligor and its related
entities whilst any amount is or may be outstanding under
the Mezzanine Finance Documents or any Commitment is in
force; and
(iii) if the Advance or other rights transferred are rescheduled
or renegotiated, the Transferee and not the Transferor will
be subject to the rescheduled or renegotiated terms.
(c) Nothing in any Mezzanine Finance Document obliges an Transferor
to:
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(i) accept a re-transfer from a Transferee of any of the rights
and obligations transferred under this clause 25; or
(ii) support any losses directly or indirectly incurred by the
New Mezzanine Lender by reason of the non-performance by any
Obligor of its obligations under the Mezzanine Finance
Documents or otherwise.
25.8 Benefit of agreement
This agreement will be binding on, and enure for the benefit of, each
party to it and its or any subsequent successors or assigns.
25.9 Disclosure of information
Each Mezzanine Lender may disclose to a proposed assignee or
transferee or any sub-participant, risk participant or other
participant proposing to enter or having entered into a contract with
that Mezzanine Lender regarding the Mezzanine Finance Documents any
information in the possession of that Mezzanine Lender relating to any
Group Company.
26. MEZZANINE LENDERS' DECISIONS
26.1 Procedures
(a) Subject to clauses 26.2 (Exceptions) and 26.3 (Express
provisions), any provision of any Mezzanine Finance Document may
be amended or waived (each a "Modification") with the agreement
of the Majority Mezzanine Lenders and the Parent. A Modification
so agreed may be effected by the Mezzanine Facility Agent
executing any documents which may be required for that purpose on
behalf of itself and all the other Mezzanine Finance Parties and
the Parent executing those documents on behalf of itself and all
the other Obligors.
(b) The Mezzanine Facility Agent will as soon as practicable after
any Modification is made in accordance with clause 26.1(a) notify
the other parties to the Mezzanine Finance Documents. Any such
Modification will take effect from the date on which that
notification is given (or any later date which the Mezzanine
Facility Agent may specify in that notification) and will be
binding on all parties to the Mezzanine Finance Documents.
26.2 Exceptions
The following matters will require the unanimous agreement of all of
the Mezzanine Lenders:
(a) any increase in the Commitment of any Mezzanine Lender;
(b) any reduction of the Margin or any reduction of (or change in the
currency of) the amount of any payment of principal, interest,
guarantee fee or commission payable by any party under any
Mezzanine Finance Document;
(c) any extension of the Availability Period, the Repayment Date or
any other date for payment of any amount due, owing or payable to
any Mezzanine Lender under any Mezzanine Finance Document;
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(d) any change to the Borrower or Guarantors or any release of
security, other than in accordance with clause 16 (Changes to
Obligors and Security); or
(e) any amendment of the definition of "Majority Mezzanine Lenders"
in clause 1.1 (Definitions) or any amendment of clause 3.3
(Rights and obligations of Mezzanine Finance Parties), clause 21
(Pro rata payments), clause 25 (Changes to Parties) or this
clause 26.
26.3 Express provisions
Any consent or other matter which, by the express terms of any
Mezzanine Finance Document, is to be given by all the Mezzanine
Lenders will not be effective unless all the Mezzanine Lenders have
agreed to it but, subject to the agreement of all the Mezzanine
Lenders having been obtained, may be given by the Mezzanine Facility
Agent on behalf of all the Mezzanine Lenders.
26.4 Hedging Lenders
Subject to the terms of the Intercreditor Deed, any Hedging Agreement
may be amended or waived by agreement between the parties to that
Hedging Agreement.
27. INDEMNITIES
27.1 General indemnity and breakage costs
The Parent will indemnify each Mezzanine Finance Party on demand
against any loss (including loss of profit) which it incurs as a
result of:
(a) the occurrence of any Default;
(b) any failure by an Obligor to pay any amount due under a Mezzanine
Finance Document on its due date;
(c) the Drawing not being made for any reason (other than as a result
of a default by a Mezzanine Finance Party) on the Drawdown Date
specified in the Drawdown Request; or
(d) the Advance or any overdue amount under a Mezzanine Finance
Document being repaid or prepaid otherwise than on the last day
of an Interest Period relating to the Advance or overdue amount.
27.2 Currency indemnity
Without prejudice to clause 27.1 (General indemnity and breakage
costs), if:
(a) any amount payable by any Obligor under or in connection with any
Mezzanine Finance Document is received by any Mezzanine Finance
Party (or by an Agent on behalf of any Mezzanine Finance Party)
in a currency (the "Payment Currency") other than that agreed in
the relevant Mezzanine Finance Document (the "Agreed Currency"),
whether as a result of any judgement or order, the enforcement of
any judgement or order, the liquidation of the relevant Obligor
or otherwise, and the amount produced by converting the Payment
Currency so received into the Agreed Currency is less than the
relevant amount of the Agreed Currency; or
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(b) any amount payable by any Obligor under or in connection with any
Mezzanine Finance Document has to be converted from the Agreed
Currency into another currency for the purpose of (i) making or
filing a claim or proof against any Obligor, (ii) obtaining an
order or judgment in any court or other tribunal or (iii)
enforcing any order or judgment given or made in relation to any
Mezzanine Finance Document,
then that Obligor will, as an independent obligation, on demand
indemnify the relevant Mezzanine Finance Party for the deficiency and
any loss sustained as a result. Any conversion required will be made
at the prevailing rate of exchange on the date and in the market
determined by the relevant Mezzanine Finance Party as being most
appropriate for the conversion. That Obligor will also pay the costs
of the conversion.
27.3 Waiver
The Parent waives any right it may have in any jurisdiction to pay any
amount under any Mezzanine Finance Document in a currency other than
that in which it is expressed to be payable in that Mezzanine Finance
Document.
27.4 Offer Indemnity
The Parent and Loan Noteco will jointly and severally on demand
indemnify each Mezzanine Finance Party and each of their respective
Affiliates, directors, officers, employees or agents (each an
"Indemnified Party") from and against any and all losses, liabilities,
claims, costs and expenses (including legal fees) which the relevant
Indemnified Party may suffer or incur (unless caused by the gross
negligence or wilful misconduct of the Indemnified Party) arising out
of or in connection with any actual or potential legal action or other
proceedings arising out of or relating to the Offer, the financing of
the Offer or any purchase of shares in the Target
28. MISCELLANEOUS
28.1 Certificates conclusive
Save as expressly provided otherwise in any Mezzanine Finance
Document, a certificate, determination, notification or opinion of any
Mezzanine Finance Party stipulated for in any Mezzanine Finance
Document or as to any rate of interest or any other amount payable
under any Mezzanine Finance Document will be conclusive and binding on
each Obligor, except in the case of manifest error.
28.2 No implied waivers
(a) No failure or delay by any Mezzanine Finance Party in exercising
any right, power or privilege under any Mezzanine Finance
Document will operate as a waiver of that right, power or
privilege, nor will any single or partial exercise of any right,
power or privilege preclude any other or further exercise of that
right, power or privilege, or the exercise of any other right,
power or privilege.
(b) The rights and remedies provided in the Mezzanine Finance
Documents are cumulative and not exclusive of any rights and
remedies provided by law and all those rights and remedies will,
except where expressly provided otherwise in any Mezzanine
Finance Document, be available to the Mezzanine Finance Parties
severally and any Mezzanine Finance Party shall
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be entitled to commence proceedings in connection with those
rights and remedies in its own name.
(c) A waiver given or other consent granted by any Mezzanine Finance
Party under any Mezzanine Finance Document will be effective only
if given in writing and then only in the instance and for the
purpose for which it is given.
28.3 Invalidity of any provision
If any provision of this agreement is or becomes invalid, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions shall not be affected or
impaired in any way.
28.4 Counterparts
This agreement may be executed in any number of counterparts and all
of those counterparts taken together shall be deemed to constitute one
and the same instrument.
28.5 Perpetuity Period
The perpetuity period applicable to the trusts created by this
agreement is 80 years.
28.6 Third party rights
(a) The Contracts (Rights of Third Parties) ▇▇▇ ▇▇▇▇ shall apply to
this agreement only in respect of the benefit of the Agents'
indemnity extended to the Agent's respective personnel, delegates
or agents ("Relevant Third Parties") under clause 20.3(a)
(Agents' rights) and no other third party shall have any rights
under this agreement.
(b) A Relevant Third Party may not veto or restrict in any way any
amendment or termination of this agreement which is agreed by the
parties.
29. GOVERNING LAW AND SUBMISSION TO JURISDICTION
29.1 This agreement (and any dispute, controversy, proceedings or claim of
whatever nature arising out of or in any way relating to this
agreement) shall be governed by, and construed in accordance with,
English law.
29.2 Submission to Jurisdiction
For the benefit of each Mezzanine Finance Party, each Obligor
irrevocably submits to the jurisdiction of the courts in England for
the purpose of hearing and determining any dispute arising out of this
agreement and for the purpose of enforcement of any judgment against
its assets.
29.3 Freedom of Choice
The submission to the jurisdiction of the courts referred to in clause
29.2 (Submission to Jurisdiction) shall not (and shall not be
construed so as to) limit the right of any Mezzanine Finance Party to
take proceedings against any Obligor in any other court of competent
jurisdiction nor shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other
jurisdiction (whether concurrently or not) if and to the extent
permitted by applicable law.
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29.4 Service of Process
Without prejudice to any other permitted mode of service, each Obligor
(incorporated outside England and Wales) agrees that service of any
claim form, notice or other document for the purpose of any
proceedings in such courts shall be duly served upon it if delivered
or sent by registered post to Loan Noteco at ▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ marked for the attention of ▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other
address in England or Wales as the Parent may notify from time to time
to the Mezzanine Facility Agent. Loan Noteco agrees to act as such
agent.
IN WITNESS whereof this agreement has been duly executed on the date first above
written.
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SCHEDULE 1
Mezzanine Lenders
Commitment
($)
BARCLAYS BANK PLC 22,500,000
Lending Office:
▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Facsimile:
020 7699 2770
Attention:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
RBS MEZZANINE LIMITED 22,500,000
Lending Office:
Loans Administration Dept
▇-▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Facsimile:
020 7220 7370
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------
$45,000,000
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SCHEDULE 2
Borrower
Company Place of Incorporation Registered Number
Parent The Republic of Ireland 317234
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SCHEDULE 3
Guarantors
Company Place of Incorporation Registered Number
Parent The Republic of Ireland 317234
Loan Noteco England and Wales 4619876
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SCHEDULE 4
Part 1 - Conditions Precedent to signing this agreement
1. Formalities Documents: the documents referred to in paragraphs 1 to 6
(inclusive) of part 4 of this schedule in respect of the Parent and Loan
Noteco.
2. Mezzanine Finance Documents: the following documents in the agreed form
(other than in respect of (f)) duly executed and delivered by all parties
thereto:
(a) this agreement;
(b) the Irish Debenture, the Hedging Debenture and a Share Pledge relating
to the shares in Loan Noteco, each executed by the Parent;
(c) the English Debenture executed by Loan Noteco;
(d) the Intercreditor Deed;
(e) the Mezzanine Fees Letters; and
(f) the Warrant Instrument and warrants.
3. Senior Finance Documents: the following documents in the agreed form duly
executed and delivered by all parties thereto:
(a) the Senior Credit Agreement; and
(b) fees letters referred to in the Senior Credit Agreement.
4. Equity Documents: certified copies of the following documents documents
(other than in respect of (b), (c) and (g)) duly executed and delivered by
all parties thereto:
(a) the Investment Agreement and any disclosure letter and management
rights agreement in respect thereof;
(b) the agreed form Investor Loan Note Instrument;
(c) any intra-group loan documentation in the agreed form between the
Parent and Loan Noteco in relation to the intra-group loan of
$17,127,707 to be made by Loan Noteco to the Parent on or before the
date 5 days after the Unconditional Date;
(d) the Constitutional Documents;
(e) the Alchemy Bridge Facility Agreement and any fee letter relating
hereto;
(f) the Alchemy Undertaking; and
(g) the agreed form documentation relating to the transfer of the shares
owned or held by the Individual Shareholders in Target.
5. Reports: originals of each of the Reports (duly addressed to the
satisfaction of the Mezzanine Facility Agent to the Mezzanine Finance
Parties, or with a written confirmation addressed to the satisfaction of
the Mezzanine Facility Agent to the Mezzanine Finance Parties from the
person that has produced the relevant report that the same may be relied
upon by the Mezzanine Finance Parties).
6. Legal Opinions:
(a) a legal opinion of Ashurst ▇▇▇▇▇▇ ▇▇▇▇▇ as regards English law in form
and substance satisfactory to the Mezzanine Facility Agent;
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(b) a legal opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ as regards the laws of the
Republic of Ireland in form and substance satisfactory to the
Mezzanine Facility Agent; and
(c) a legal opinion of White & Case LLP as regards the laws of New York in
form and substance satisfactory to the Mezzanine Facility Agent.
7. Structure Document: the Structure Document.
8. Receiving Agent instruction: an instruction letter in the agreed form given
to the Receiving Agent to hold the Target Shares acquired by the Parent
pursuant to the Offer to the order of the Security Agent.
9. Financial Assistance:
(a) the Financial Assistance Documents in the agreed form; and
(b) the upstream intra-group loan agreements between (i) members of the
Target Group incorporated in Ireland and in the United States of
America and (ii) the Parent, each in the agreed form.
10. Preliminary Announcement: the final form of the Press Release and the
Second Press Release and a certified copy of the Board Minutes approving
the release of the Press Release and the Second Press Release.
11. Offer Document: the latest draft of the Offer Document.
12. Recommended Offer: a certificate from the Parent to the Mezzanine Lender
dated the date of this agreement confirming that the Offer has been
recommended by the board of directors of the Target.
13. Agreed Form Security Documents:
(a) copies of the agreed form of each Security Document referred to in
part 2 of Schedule 9 together with the agreed form opinion of:
(i) White & Case LLP;
(ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇;
(iii) ▇▇▇▇▇▇ and Calder; and
(iv) ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ LLP
(b) receipt of Uniform Commercial Code filing reports in all jurisdictions
where a Uniform Commercial Code filing would perfect a security
interest.
14. Financial and Related Information: a copy of:
(a) the Management Financial Model;
(b) the Original Audited Accounts; and
(c) the Original Management Accounts relating to November 2002.
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15. Service Contracts: a certified copy of the agreed form Service Contracts.
16. Target Comfort: a certified copy of the commitment given by the Target
relating to the issue of shares in the Target, in the agreed form.
17. Termination of ▇▇▇▇ arrangements: a certified copy of the termination deed
entered into between Riverdeep Group plc, ▇▇▇▇ Elsevier Information
Holdings Inc. and ▇▇▇▇ Elsevier Inc., duly executed by all parties thereto.
18. Underwriting Arrangement: a certified copy of the Underwriting Agreement in
the agreed form.
19. Agreed Form Share Option Scheme: a certified copy of the agreed form terms
relating to the Share Option Scheme to be implemented in accordance with
the terms of the Investment Agreement.
20. Tier One Certificate: a certificate in the agreed form of the Target
setting out comfort in relation to the Tier One exemption.
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Part 2 - Conditions Precedent - First Drawdown
Conditions precedent to be satisfied on or before the Drawdown Date
1. Offer Document: a certified copy of the Press Release and the Offer
Document.
2. Acceptances: evidence that the Offer has not lapsed and has been declared
unconditional in all respects following receipt of acceptances of the Offer
(which have not been withdrawn) in respect of (i) not less than 80% of the
Target Shares the subject of the Offer and (ii) valid acceptances have been
received (and not, where permitted, withdrawn) from not less than 75 per
cent. of the holders of the shares to which the Offer relates calculated by
reference to each of the following dates:
(i) the date of despatch of the Offer Document to holders of the
Shares in the Target to which the Offer relates; and
(ii) the date on which the condition requiring valid acceptances by
shareholders of Target in respect of an aggregate amount of not
less than 80 per cent. of the Shares to which the Offer relates
is satisfied; and
(iii) the date on which the Offer ceases to be open for acceptance.
3. Equity:
(a) evidence that an amount of not less than $38,100 (or equivalent) has
been advanced and/or invested in the Parent by the Individual
Shareholders subscribing for shares in the capital of the Parent prior
to the date of this agreement;
(b) evidence that an amount of not less than $404,000 has been advanced
and/or invested in the Parent by (i) the Lead Equity Investors
subscribing for shares in the capital of the Parent in an amount of
not less than $328,970 and (ii) MSD Capital subscribing for shares in
the capital of the Parent in an amount of not less than $75,030;
(c) evidence that all shares owned or held by Individual Shareholders in
Target immediately prior to the date of this agreement have been
transferred to the Parent and that prior to the despatch of the Offer
Document to the holders of shares in the Target to which the Offer
relates the Parent is the absolute legal (subject only to registration
of stock transfers being delayed on account of stamping of stock
transfers not being completed) and beneficial owner thereof;
(d) evidence that:
(i) ▇▇▇ ▇▇▇▇▇▇▇▇ has complied with his obligations to advance monies
to the Parent in accordance with the agreed form Underwriting
Agreement; and/or
(ii) certain of the shareholders of Target as at the date of this
agreement have accepted the partial share alternative in
accordance with the terms of the Offer,
provided that the aggregate of the amount received by the Parent
pursuant to (i) and the subscription price of the shares issued
pursuant to the partial share alternative shall be not less than
$32,465,000 in aggregate;
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(e) evidence that either:
(i) the Lead Equity Investors have subscribed for the Investor Loan
Notes (excluding any subscription counted for the purpose of the
satisfaction of the condition referred to in paragraph (f) below)
in an amount not less than $31,375,500; or
(ii) the lender of the Alchemy Bridge Facility Agreement has advanced
to Loan Noteco $31,375,500 under the Alchemy Bridge Facility
Agreement; and
(f) evidence that an amount of not less than $75,911,000 has been advanced
to Loan Noteco by (i) the Lead Equity Investors subscribing for
Initial Investor Loan Notes in an amount of not less than $55,986,030
(excluding any subscription counted for the purpose of the
satisfaction of the condition set out at paragraph (e) above) and (ii)
MSD Capital subscribing for Initial Investor Loan Notes in an amount
of not less than $19,924,970 together with evidence that such proceeds
have been advanced to the Parent pursuant to the intra-group loan
agreement in the agreed form.
4. Approvals: a certified copy of board resolutions of the Parent approving
the terms of the Offer as set out in the Offer Document.
5. Fees: Instructions to the Mezzanine Lenders that, upon first Drawdown, all
fees payable in accordance with the Mezzanine Fees Letters and this
agreement will be deducted from such Drawdown.
6. Investor Loan Note Instrument: A certified copy of each Investor Loan Note
Instrument duly executed and delivered by all persons thereto.
7. Senior: Evidence that the Senior Lenders have advanced, or will
simultaneously with the first Advance under this agreement advance, to the
Borrowers (as defined in the Senior Credit Agreement) all amounts to be
drawn down under the Senior Credit Agreement on the Completion Date.
8. Warrant Instrument:
(a) A certified copy of the Warrant Instrument and each warrant
certificate issued in accordance with such Warrant Instrument.
(b) A legal opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ as regards the laws of the
Republic of Ireland in form and substance satisfactory to the
Mezzanine Facility Agent in respect of the Warrant Intrument and
warrant certificates issued in accordance with such Warrant
Instrument.
9. Formalities Certificate:
(a) A Formalities Certificate of the Parent (i) attaching the memorandum
and articles of association in the agreed form to be adopted by the
Parent prior to the Unconditional Date, (ii) attaching a certified
copy of a resolution of the directors of the Parent appointing each
member of the board as a director and (iii) confirming there has been
no change to the documents delivered pursuant to paragraph 1 of
schedule 4 (except as referred to in (i) above) and that such
documents remain true and complete and are in full force and effect as
at the date of such Formalities Certificate (which date shall be no
earlier than the date of execution of the Warrant Instrument); and
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(b) A Formalities Certificate of Loan Noteco (i) attaching a certified
copy of a resolution of the directors of the Parent appointing each
member of the board as a director and (ii) confirming there has been
no change to the documents delivered pursuant to paragraph 1 of
schedule 4 in respect of Loan Noteco and that such documents remain
true and complete and are in full force and effect as at the date of
such Formalities Certificate.
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Part 3 - Conditions subsequent relating to the granting of security
1. Formalities Documents: the documents referred to in part 4 of this schedule
in respect of the Security Documents and Accession Documents to be executed
by the relevant Obligor.
2. Financial Assistance: evidence in form and substance satisfactory to the
Mezzanine Facility Agent that (if applicable) the requirements of section
60 or the Irish Companies Act, 1963 have been complied with so far as they
relate to the Mezzanine Finance Documents and otherwise the relevant
financial assistance documentation is in substantially the same form as the
Financial Assistance Documents in the agreed form.
3. Legal opinion: a legal opinion in a form satisfactory to the Mezzanine
Facility Agent in respect of any security not governed by English law.
4. Security Notices, Releases and Consents:
(a) the original notices of assignment or charge to be given under the
Security Documents duly signed on behalf of the relevant Obligor;
(b) evidence that all Security Interests (other than Security Interests
permitted under clause 18.3(b)) in favour of third parties granted by
the relevant Obligor or any of its Subsidiaries have been released;
(c) all third party consents required for the creation of any Security
Interest contained in any Security Document.
5. Share Security: if the Security Document to be executed by the relevant
Obligor creates a Security Interest over shares in a Subsidiary of that
Obligor:
(a) where such Subsidiary is not itself an Obligor, a certified copy of
the memorandum and articles of association (or other constitutional
documents) of such Subsidiary in a form acceptable to the Mezzanine
Facility Agent; and
(b) stamped executed but undated stock transfer forms in respect of such
shares.
6. Riverdeep Group Finance Limited: a certificate from Riverdeep Group Finance
Limited in the agreed form certifying certain matters for the purpose of
the opinion to be issued by ▇▇▇▇▇▇ and Calder.
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Part 4 - Corporate Documents in respect of each Obligor
1. Formalities certificate: a Formalities Certificate or, for US Obligors, an
incumbency certificate.
2. Constitutional Documents: a certified copy of the memorandum and articles
of association (or other constitutional documents) of the Obligor in form
acceptable to the Mezzanine Facility Agent.
3. Certificate of Incorporation: a certified copy of the certificate of
incorporation (or equivalent), and the certificates of incorporation on
change of name (if any), relating to the Obligor.
4. Board Resolutions: a certified copy of a resolution of the directors (or
equivalent) of the Obligor approving the transactions and matters
contemplated by this agreement, the other Mezzanine Finance Documents and
the Transaction Documents and approving the execution, delivery and
performance hereof and thereof and authorising named persons to sign this
agreement, the other Mezzanine Finance Documents and the Transaction
Documents to which it is or is to be a party and any documents to be
delivered by such Obligor pursuant hereto or thereto.
5. Shareholders Resolutions: if required under its constitutional or governing
documents, a certified copy of a resolution of the shareholders of the
Obligor approving the transactions and matters contemplated by this
agreement, the other Mezzanine Finance Documents and the Transaction
Documents to which (in each case) such Obligor is or is to be a party.
6. Approvals: evidence that all approvals, authorisations, consents, licences,
exemptions, filings, notarisations and registrations necessary for any of
the transactions contemplated by the Mezzanine Finance Documents so far as
they relate to the Obligor and their validity and/or enforceability have
been obtained and are in full force and effect.
7. Process Agent: if the Obligor is incorporated outside England and Wales, an
appointment of a process agent in England for acceptance of service of
process.
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SCHEDULE 5
Drawdown Request
To: o as Mezzanine Facility Agent
Attention: o
From: [Borrower]
Date: o
Dear Sirs,
Re: $45,000,000 credit agreement dated o (the "Credit Agreement")
We request the Drawing of the Facility as follows:
(a) Amount: o
(b) Currency: o
(c) Drawdown Date: o
(d) Interest Period: o
(e) Payment should be made to: o
(f) The Borrower is: o
We confirm that no Drawstop Default has occurred.
Terms defined in the Credit Agreement have the same meanings when used in this
request.
...........................
[Authorised Signatory]
for and on behalf of
[Borrower]
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SCHEDULE 6
Transfer Certificate
To: RBS Mezzanine Limited as Mezzanine Facility Agent
for and on behalf of the Obligors and the Mezzanine Finance Parties
(each as defined in the Credit Agreement referred to below).
This transfer certificate (this "Certificate") relates to a credit agreement
dated o between, o (together the "Obligors"), the banks and financial
institutions named in that agreement as Mezzanine Lenders, RBS Mezzanine Limited
as Mezzanine Facility Agent and Barclays Bank as Security Agent (as from time to
time amended the "Mezzanine Loan Agreement"). Terms defined in the Mezzanine
Loan Agreement shall, unless otherwise defined in this Certificate, have the
same meanings when used in this Certificate.
1. Transferor confirmation and request
[name of Transferor] (the "Transferor") by its execution of this
Certificate:
(a) requests [name of Transferee] (the "Transferee") to accept
and procure, in accordance with clause 25.4 (Transfers by
Mezzanine Lenders), the transfer to the Transferee of the
portion of the Transferor's participation in the Facility
(and in the Advance made by it) as specified in schedule 1
to this Certificate (the "Transfer Rights") by
counter-signing this Certificate and delivering it to the
Mezzanine Facility Agent at its address for notices under
the Mezzanine Loan Agreement, so as to take effect on the
date specified in schedule 2 to this Certificate (the
"Transfer Date"); and
(b) confirms that the details which appear in schedule 1 to this
Certificate accurately record, the amount of the
Transferor's Commitments and the principal amount of the
Transfer Rights at the date of this Certificate.
2. Transferee request
The Transferee, by its execution of this Certificate, requests each
Obligor and each Mezzanine Finance Party to accept this Certificate as
being delivered under and for the purposes of clause 25.4 (Transfers
by Mezzanine Lenders), so as to take effect in accordance with the
terms of that clause on the Transfer Date.
3. Transfer fee
The Transferee shall pay to the Mezzanine Facility Agent for the
Mezzanine Facility Agent's own account a transfer fee of (pound)o, as
specified in 27.5 (Fee).
4. Transferee representations
The Transferee:
(a) confirms that it has received from the Transferor a copy of
the Mezzanine Loan Agreement, together with all other
documents and information which it has requested in
connection with the Credit Agreement;
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(b) confirms that it has not relied, and will not after the date
of this Certificate rely, on the Transferor or any other
Mezzanine Finance Party to check or enquire on its behalf
into the legality, validity, effectiveness, adequacy,
accuracy or completeness of any of those documents or that
information;
(c) agrees that it has not relied, and will not after the date
of this Certificate rely, on the Transferor or any other
Mezzanine Finance Party to assess or keep under review on
its behalf the financial condition, creditworthiness,
condition, affairs, status or nature of the Parent or any
other party to the Mezzanine Loan Agreement;
(d) represents and warrants to the Transferor and each other
Mezzanine Finance Party that it has the power to become a
party to the Credit Agreement as a Mezzanine Lender on the
terms set out in the Mezzanine Loan Agreement and this
Certificate and has taken all necessary steps to authorise
execution and delivery of this Certificate;
(e) acknowledges the limitations on the Transferor's obligations
set out in clause 25.7 (Limitation of Responsibility of
Transferor);
(f) agrees that if any Transfer Rights are rescheduled or
renegotiated, the Transferee and not the Transferor will be
subject to the rescheduled or renegotiated terms; and
(g) confirms that it has duly executed and delivered to the
Mezzanine Facility Agent a Creditor Accession Deed.
5. Transferee covenants
The Transferee undertakes with the Transferor and each other party to
the Mezzanine Loan Agreement that it will perform in accordance with
its terms all those obligations which, by the terms of the Mezzanine
Loan Agreement, will be assumed by it following delivery of this
Certificate to the Mezzanine Facility Agent.
6. Exclusion of Transferor's liabilities
Neither the Transferor nor any other Mezzanine Finance Party makes any
representation or warranty nor assumes any responsibility in relation
to the legality, validity, effectiveness, adequacy or enforceability
of the Mezzanine Finance Documents and assumes no responsibility for
the financial condition of the Parent or any other party to the
Mezzanine Finance Documents or for the performance and observance by
the Parent or any other Obligor of any of its obligations under the
Mezzanine Finance Documents and all of those conditions and
warranties, whether express or implied by law or otherwise, are hereby
excluded.
7. Novation
On execution of this Certificate by the Mezzanine Facility Agent (on
behalf of each of the parties to this agreement other than the
Transferor and the Transferee), the Transferee will become a party to
the Mezzanine Loan Agreement on and with effect from the Transfer Date
in substitution for the Transferor in relation to those rights and
obligations which, by the terms of the Mezzanine Loan Agreement and
this Certificate, are assumed by the Transferee.
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8. Law
This Certificate (and any dispute, controversy, proceedings or claim
of whatever nature arising out of or in any way relating to this
Certificate) shall be governed by and construed in accordance with
English Law.
IN WITNESS of which the parties to this Certificate have duly executed this
Certificate on the date which appears at the end of this Certificate.
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Schedule 1 to Transfer Certificate
Transferor's existing Commitment: $o
Portion of Transferor's existing Commitment to be transferred: $o
Accrued rolled up interest to be transferred $o
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Schedule 2 to Transfer Certificate
Particulars relating to the Transferee
Transfer Date:
Lending Office:
Contact Name:
Account for Payments:
Address for Notices:
Telephone:
Facsimile:
Signatories to Transfer Certificate
[Transferor] [Transferee]
By: .................... By: ....................
Date: o Date: o
[Mezzanine Facility Agent]
By: ....................
Date: o
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SCHEDULE 7
Part 1 - Accession Document
THIS DEED is made on o
BETWEEN:
(1) o (a company incorporated in o [with registered number o]) (the "New
Obligor");
(2) o (a company incorporated in o [with registered number o]) (the
"Parent") for itself and as agent for the existing Obligors;
(3) o in its capacity as Mezzanine Facility Agent under the Credit
Agreement; and
(4) o in its capacity as Security Agent under the Credit Agreement.
WHEREAS:
(A) This deed is entered into in connection with a $45,000,000 credit
agreement (the "Mezzanine Loan Agreement") between, amongst others,
(1) the Parent, (2) Loan Noteco, (3) the companies named in the Credit
Agreement as Guarantors and (4) Barclays Bank plc and RBS Mezzanine
Limited as Mezzanine Joint Mandated Lead Arrangers, (5) the financial
institutions defined therein as Mezzanine Lenders (6) RBS Mezzanine
Limited as Mezzanine Facility Agent and (7) Barclays Bank PLC as
Security Agent.
(B) This deed has been entered into to record the admission of the New
Obligor as a Guarantor under the Mezzanine Loan Agreement and as an
Obligor under the Intercreditor Deed.
IT IS AGREED as follows:
1. DEFINITIONS
Words and expressions defined in the Mezzanine Loan Agreement have the
same meanings when used in this deed.
2. ADMISSION OF NEW OBLIGOR
2.1 The New Obligor agrees to become:
(a) a Guarantor under the Mezzanine Loan Agreement and agrees to
be bound by the terms of the Mezzanine Loan Agreement as a
Guarantor; and
(b) an Obligor under the Intercreditor Deed and agrees to be
bound by the terms of the Intercreditor Deed as an Obligor.
2.2 The New Obligor confirms the appointment of the Parent as its agent on
the terms of clause o of the Mezzanine Loan Agreement and clause o of
the Intercreditor Deed and as its process agent for the purposes of
clause o of the Mezzanine Loan Agreement.
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2.3 The New Obligor confirms that its address details for notices in
relation to clause 23 (Notices) are as follows:
Address: o
Facsimile: o
Attention of: o
2.4 The parties to this deed other than the New Obligor confirm their
acceptance of the New Obligor as a Guarantor for the purpose of the
Mezzanine Loan Agreement and as an Obligor for the purpose of the
Intercreditor Deed.
3. GUARANTEE LIMITED
3.1 The New Obligor's obligations under clause 15 of the Mezzanine Loan
Agreement will not extend to any sum due owing or incurred in relation
to the Facility to the extent utilised for a purpose specified in
clause 2.2(a)(i) to (ii) of the Mezzanine Loan Agreement (the "Offer
Obligations") until such time as the New Obligor has executed and
delivers a Guarantee Increase Deed having first completed the
necessary financial assistance procedures.
3.2 In circumstances where clause 3.1 applies, following the completion of
the necessary financial assistance procedures the New Guarantor will
promptly execute and deliver a Guarantee Increase Deed.
3.3 Until all necessary financial assistance procedures have been
completed, nothing in this deed will require the New Obligor to take
or refrain from taking any action, or exercising any powers which
would otherwise constitute unlawful financial assistance pursuant to
Section 60 of the Irish Companies Act, 1963.
4. REPRESENTATIONS
The New Obligor represents and warrants in the terms set out in 17.2
(Incorporation) to 17.5 (No contravention) inclusive and acknowledges
that the Mezzanine Facility Agent and the Security Agent enter into
this Accession Document in full reliance on those representations and
warranties.
5. LAW AND JURISDICTION
5.1 This deed (and any dispute, controversy, proceedings or claim of
whatever nature arising out of or in any way relating to this deed)
shall be governed by and construed in accordance with English law.
5.2 [The New Obligor and Mezzanine Facility Agent hereby irrevocably waive
all right to a trial by jury in any action, proceeding or counterclaim
arising out of or relating to this Accession Document or any Mezzanine
Finance Document or the transactions contemplated thereby.]1
6. COUNTERPARTS
This Accession Document may be executed in two or more counterparts,
each of which shall constitute an original, but all of which, when
taken together shall constitute one instrument.
IN WITNESS whereof this deed has been executed on the date first above written.
-------------------------------------------------------------------------------
1 Only relevant ot US Obligors
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Signatories to Accession Document
Signed as a deed by [NEW OBLIGOR] acting by a )
director and its secretary/two directors )
)
Director
Secretary/Director
OR:
The Common Seal of )
[NEW OBLIGOR] )
was affixed hereunto in the presence of: )
Director
Secretary/Director
The Parent
[Name]
By: ..........................
for itself and as agent
for and on behalf of
the Borrower and the
Existing Guarantors
The Mezzanine Facility Agent
[Name]
By: ..........................
for itself and as Mezzanine Facility Agent
on behalf of the Mezzanine Lenders
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The Security Agent
[Name]
By: ..........................
for itself and as Security Agent
on behalf of the Mezzanine Lenders
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Part 2 - Guarantee Increase Deed
To: The Governor and Company of the Bank of Scotland, as Mezzanine
Facility Agent
From: [Guarantor] (the "Guarantor")
Dated: o
Dear Sirs,
We refer to an agreement (the "Mezzanine Loan Agreement") dated o 2003 and made,
amongst others, between (1) Parent, (2) Loan Noteco, (3) the companies named in
the Credit Agreement as Guarantors (4) Barclays Bank PLC and RBS Mezzanine
Limited as Mezzanine Joint Mandated Lead Arrangers, (5) the financial
institutions defined therein as Mezzanine Lenders (6) RBS Mezzanine Limited as
Mezzanine Facility Agent and (7) Barclays Bank PLC as Security Agent.
1. Terms defined in the Mezzanine Loan Agreement shall bear the same
meaning herein.
2. By executing an Accession Document, the Guarantor guaranteed
performance of obligations under the Mezzanine Finance Documents on
the terms set out in clause 15 (Guarantee and Indemnity) of the
Mezzanine Loan Agreement. By the terms of clause 3 of the Accession
Document, the Guarantor's obligations did not extend to any of the
Offer Obligations (as defined therein).
3. The Guarantor has now complied with the procedures in section 60 of
the Irish Companies Act, 1963 and as a result may lawfully guarantee
the Offer Obligations.
4. Accordingly, by executing this Deed, the Guarantor confirms and
acknowledges that the guarantee and indemnity obligations undertaken
by it under the Mezzanine Loan Agreement are extended to include,
without limitation, the Offer Obligations with effect from the date of
this Deed.
5. Nothing in this Deed will prejudice the Guarantor's existing
obligations under the Mezzanine Finance Documents which will continue
in full force and effect. In particular, but without limitation, all
security interests granted by the Guarantor in favour of the Security
Agent will additionally operate to secure the Guarantor's obligations
in respect of the Offer Obligations.
6. It is intended that this document takes effect as a deed
notwithstanding the fact that a party may only execute this document
under hand.
7. This Deed constitutes a Mezzanine Finance Document and shall be
governed by English law.
Executed as a deed by )
[GUARANTOR] )
acting by )
Director
Director/Secretary
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The Common Seal of )
[GUARANTOR] )
was affixed hereunto in the presence of: )
Director
Secretary/Director
SCHEDULE 8
Mandatory Cost formulae
1. The Mandatory Cost is an addition to the interest rate to compensate
Mezzanine Lenders for the cost of compliance with (a) the requirements
of the Bank of England and/or the Financial Services Authority (or, in
either case, any other authority which replaces all or any of its
functions) or (b) the requirements of the European Central Bank.
2. On the first day of each Interest Period (or as soon as possible
thereafter) the Mezzanine Facility Agent shall calculate, as a
percentage rate, a rate (the "Additional Cost Rate") for each
Mezzanine Lender, in accordance with the paragraphs set out below. The
Mandatory Cost will be calculated by the Mezzanine Facility Agent as a
weighted average of the Mezzanine Lenders' Additional Cost Rates
(weighted in proportion to the percentage participation of each
Mezzanine Lender in the Advance) and will be expressed as a percentage
rate per annum.
3. The Additional Cost Rate for any Mezzanine Lender lending from a
Lending Office in a Participating Member State will be the percentage
notified by that Mezzanine Lender to the Mezzanine Facility Agent.
This percentage will be certified by that Mezzanine Lender in its
notice to the Mezzanine Facility Agent to be its reasonable
determination of the cost (expressed as a percentage of that Mezzanine
Lender's participation in the Advance made from that Lending Office)
of complying with the minimum reserve requirements of the European
Central Bank in respect of loans made from that Lending Office.
4. The Additional Cost Rate for any Mezzanine Lender lending from a
Lending Office in the United Kingdom will be calculated by the
Mezzanine Facility Agent as follows:
in relation to a Sterling Advance:
AB+C(B-D)+E x 0.01 per cent. per annum
------------------
100-(A+C)
in relation to the Advance if in any currency other than Sterling:
E x 0.01 per cent. per annum.
--------
300
Where:
A is the percentage of Eligible Liabilities (assuming these to
be in excess of any stated minimum) which that Mezzanine
Lender 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 of interest (excluding the Margin and
the Mandatory Cost and, if the Advance is an overdue amount
(as defined in clause 6.5 (Default interest), the additional
rate of interest specified in paragraph (a) of clause 6.5
(Default interest)) payable for the relevant Interest Period
on the Advance.
C is the percentage (if any) of Eligible Liabilities which
that Mezzanine Lender 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 Mezzanine Facility Agent on interest bearing
Special Deposits.
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E is designed to compensate Mezzanine Lenders for amounts
payable under the Fees Rules and is calculated by the
Mezzanine Facility Agent as being the average of the most
recent rates of charge supplied by the Reference Banks to
the Mezzanine Facility Agent pursuant to paragraph 7 below
and expressed in pounds per (pound)1,000,000.
5. For the purposes of this Schedule:
"Eligible Liabilities" and "Special Deposits" have the
meanings given to them from time to time under or pursuant
to the Bank of England Act 1998 or (as may be appropriate)
by the Bank of England;
"Fees Rules" means the rules on periodic fees contained in
the FSA Supervision Manual or such other law or regulation
as may be in force from time to time in respect of the
payment of fees for the acceptance of deposits;
"Fee Tariffs" means the fee tariffs specified in the Fees
Rules under the activity group A.1 Deposit acceptors
(ignoring any minimum fee or zero rated fee required
pursuant to the Fees Rules but taking into account any
applicable discount rate); and
"Tariff Base" has the meaning given to it in, and will be
calculated in accordance with, the Fees Rules.
6. In application of the above formulae, A, B, C and D will be included
in the formulae as percentages (i.e. 5 per cent. will be included in
the formula as 5 and not as 0.05). A negative result obtained by
subtracting D from B shall be taken as zero. The resulting figures
shall be rounded to four decimal places.
7. If requested by the Mezzanine Facility Agent, each Reference Bank
shall, as soon as practicable after publication by the Financial
Services Authority, supply to the Mezzanine Facility Agent, the rate
of charge payable by that Reference Bank to the Financial Services
Authority pursuant to the Fees Rules in respect of the relevant
financial year of the Financial Services Authority (calculated for
this purpose by that Reference Bank as being the average of the Fee
Tariffs applicable to that Reference Bank for that financial year) and
expressed in pounds per (pound)1,000,000 of the Tariff Base of that
Reference Bank.
8. Each Mezzanine Lender shall supply any information required by the
Mezzanine Facility Agent for the purpose of calculating its Additional
Cost Rate. In particular, but without limitation, each Mezzanine
Lender shall supply the following information on or prior to the date
on which it becomes a Mezzanine Lender:
(a) the jurisdiction of its Lending Office; and
(b) any other information that the Mezzanine Facility Agent may
reasonably require for such purpose.
Each Mezzanine Lender shall promptly notify the Mezzanine Facility
Agent of any change to the information provided by it pursuant to this
paragraph.
9. The percentages of each Mezzanine Lender for the purpose of A and C
above and the rates of charge of each Reference Bank for the purpose
of E above shall be determined by the Mezzanine Facility Agent based
upon the information supplied to it pursuant to paragraphs 7 and 8
above and on the assumption that, unless a Mezzanine Lender notifies
the Mezzanine Facility Agent to the contrary,
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each Mezzanine Lender's obligations in relation to cash ratio deposits
and Special Deposits are the same as those of a typical bank from its
jurisdiction of incorporation with a Lending Office in the same
jurisdiction as its Lending Office.
10. The Mezzanine Facility Agent shall have no liability to any person if
such determination results in an Additional Cost Rate which over or
under compensates any Mezzanine Lender and shall be entitled to assume
that the information provided by any Mezzanine Lender or Reference
Bank pursuant to paragraphs 3, 7 and 8 above is true and correct in
all respects.
11. The Mezzanine Facility Agent shall distribute the additional amounts
received as a result of the Mandatory Cost to the Mezzanine Lenders on
the basis of the Additional Cost Rate for each Mezzanine Lender based
on the information provided by each Mezzanine Lender and each
Reference Bank pursuant to paragraphs 3, 7 and 8 above.
12. Any determination by the Mezzanine Facility Agent pursuant to this
Schedule in relation to a formula, the Mandatory Cost, an Additional
Cost Rate or any amount payable to a Mezzanine Lender shall, in the
absence of manifest error, be conclusive and binding on all parties.
13. The Mezzanine Facility Agent may from time to time, after consultation
with the Parent and the Mezzanine Lenders, determine and notify to all
Parties any amendments which are required to be made to this schedule
in order to comply with any change in law, regulation or any
requirements from time to time imposed by the Bank of England, the
Financial Services Authority or the European Central Bank (or, in any
case, any other authority which replaces all or any of its functions)
and any such determination shall, in the absence of manifest error, be
conclusive and binding on all parties.
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SCHEDULE 9
Obligors
Part 1 - Initial Obligors
The Parent will execute, on the date of this agreement:
(a) an Irish Debenture;
(b) a Hedging Debenture; and
(c) the Share Pledge.
Loan Noteco will execute an English Debenture on the date of this agreement.
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Part 2 - Target Companies
1. Target will execute within 21 days of the Unconditional Date:
(a) an Accession Document pursuant to which it will become a
Guarantor and an Obligor under the Intercreditor Deed;
(b) an Irish Debenture (including an equitable mortgage over any
properties owned by it and a charge over shares in any
direct subsidiary);
(c) a Security Document in respect of its shares in Edvantage
Software, Inc.;
(d) a charge over the shares held by it in Riverdeep Group
Finance Limited;
2. Riverdeep Interactive Learning Limited will execute within 21 days of
the Unconditional Date:
(a) an Accession Document pursuant to which it will become a
Guarantor and an Obligor under the Intercreditor Deed;
(b) an Irish Debenture (including an equitable mortgage over any
properties owned by it and a charge over any shares in any
direct Subsidiary);
(c) a Security Document in respect of its shares in Riverdeep,
Inc.;
(d) a NY Security Agreement;
3. Riverdeep, Inc. will execute within 21 days of the Unconditional Date:
(a) an Accession Document pursuant to which it will become a
Guarantor and an Obligor under the Intercreditor Deed;
(b) a Stock Pledge Agreement over any shares in any direct
Subsidiary;
(c) a NY Security Agreement;
4. Broderbund (Properties) LLC will execute within 21 days of the
Unconditional Date:
(a) an Accession Document pursuant to which it will become a
Guarantor and an Obligor under the Intercreditor Deed;
(b) a NY Security Agreement;
5. Broderbund LLC will execute within 21 days of the Unconditional Date:
(a) an Accession Document pursuant to which it will become a
Guarantor and an Obligor under the Intercreditor Deed;
(b) a NY Security Agreement.
6. Riverdeep Group Finance Limited will execute within 21 days of the
Unconditional Date an English Debenture.
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7. Edvantage Software, Inc. will execute within 21 days of the
Unconditional Date a NY Security Agreement.
8. Edvantage Software, Inc. will execute upon the later of (i) 21 days of
the Unconditional Date and (ii) the date of the transfer of the shares
in Riverdeep, Inc. by Riverdeep Interactive Learning Limited referred
to in the KPMG Tax Structure Paper, a Stock Pledge Agreement over any
shares in a direct Subsidiary.
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Part 3 - Target Companies Post Whitewash Security
Each of the companies set out below will execute a Hedging Debenture and a
Guarantee Increase Deed within 90 days from the Unconditional Date:
Target
Riverdeep Interactive Learning Limited
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SCHEDULE 10
Dormant Companies
Fastbreak Limited
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Signatories to the Credit Agreement
The Parent
HERTAL ACQUISITIONS PLC
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Notice Details
Address: 3rd ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇
Facsimile: 353 1 670 7626
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Guarantors
The Parent
HERTAL ACQUISITIONS PLC
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Notice Details as above
Loan Noteco
HERTAL (INVESTMENTS) LIMITED
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Notice Details as above
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The Mezzanine Joint Mandated Lead Arrangers
BARCLAYS LEVERAGED FINANCE
(a division of Barclays Bank PLC)
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Notice Details
Address: ▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Facsimile: 020 7699 2770
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
RBS MEZZANINE LIMITED
By: ▇▇▇▇▇ TSOROMOCOS
Notice Details
Address: Leveraged Finance
▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Facsimile: 020 7375 5265
Attention: ▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇ ▇▇▇▇▇
Original Mezzanine Lenders
BARCLAYS BANK PLC
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Notice Details
Address: ▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Facsimile: 020 7699 2770
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-138-
RBS MEZZANINE LIMITED
By: ▇▇▇▇▇ TSOROMOCOS
Notice Details as above
The Mezzanine Facility Agent
RBS MEZZANINE LIMITED
By: ▇▇▇▇▇ TSOROMOCOS
Notice Details as above
Security Agent
BARCLAYS BANK PLC
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Notice Details
Address: 7th Floor
5 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Facsimile: 020 7773 4893
Attention: ▇▇▇▇▇▇ ▇▇▇▇
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