Exhibit 10.1
DATED 12TH AUGUST, 1997
LOAN AGREEMENT
for a
U.S. $16,000,000 LOAN FACILITY
to
DERMEQUIP, L.L.C.
PROVIDED BY
THE CHASE MANHATTAN BANK
▇▇▇▇▇▇ ▇▇▇▇
London
CONTENTS
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CLAUSE HEADING PAGE
1 Purpose and definitions 3
2 The Facility 9
3 Conditions 10
4 Advances 10
5 Interest and Interest Periods; alternative interest rates 11
6 Repayment, prepayment and cancellation 13
7 Fees and expenses 14
8 Payments and Taxes; accounts and calculations 15
9 Representations and warranties 18
10 Undertakings 20
11 Events of Default 22
12 Indemnities 27
13 Unlawfulness and increased costs; mitigation 28
14 Setoff 31
15 Assignment, transfer and lending offices 31
16 Notices and other matters 32
17 Governing law and jurisdiction 34
THIS AGREEMENT is dated 12th August, 1997 and made BETWEEN:
(1) DERMEQUIP, L.L.C. as Borrower; and
(2) THE CHASE MANHATTAN BANK as Bank.
IT IS AGREED as follows:
1 PURPOSE AND DEFINITIONS
-----------------------
1.1 Purpose
-------
This Agreement sets out the terms and conditions upon and subject to
which the Bank agrees to make available to the Borrower, under the
guarantees of the Guarantors, a loan facility of up to U.S.$16,000,000
to be used for its general corporate purposes.
1.2 Definitions
-----------
In this Agreement, unless the context otherwise requires:
"ADVANCE" means each borrowing of a portion of the Commitment by the
Borrower or (as the context may require) the principal amount of such
borrowing;
"BANKING DAY" means a day (other than Saturday or Sunday) on which banks
are open for business in London and in New York City;
"BANK" means The Chase Manhattan Bank of ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
and includes its successors in title and transferees;
"BORROWED MONEY" means Indebtedness in respect of (i) money borrowed or
raised and debit balances at banks, (ii) any bond, note, loan stock,
debenture or similar debt instrument, (iii) acceptance or documentary
credit facilities, (iv) receivables sold or discounted (otherwise than
on a non-recourse basis), (v) deferred payments for assets or services
acquired, (vi) finance leases and hire purchase contracts, (vii) swaps,
forward foreign exchange contracts, futures and other derivatives,
(viii) any other transaction (including without limitation forward sale
or purchase agreements) having the commercial effect of a borrowing or
raising of money or of any of (ii) to (vii) above and (ix) guarantees
in respect of Indebtedness of any person falling within any of (i) to
(viii) above;
"BORROWER" means DermEquip, L.L.C. of Corporation Trust Center, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇;
"COMMITMENT" means at any relevant time $16,000,000 as reduced by any
relevant term of this Agreement and so that, if at such time the
Commitment has been reduced
to zero, references to the Bank's Commitment shall be construed as a
reference to the Bank's Commitment immediately prior to such reduction
to zero;
"CONTRIBUTION" means the principal amount of the Loan owing to the Bank
at any relevant time;
"DEFAULT" means any Event of Default or any event or circumstance which
would, upon the giving of a notice by the Bank and/or the expiry of the
relevant period and/or the fulfilment of any other condition (in each
case as specified in clause 11.1), constitute an Event of Default;
"DOLLARS" and "$" mean the lawful currency of the United States of
America and in respect of all payments to be made under this Agreement
in Dollars mean funds which are for same day settlement in the New York
Clearing House Interbank Payments System (or such other U.S. dollar
funds as may at the relevant time be customary for the settlement of
international banking transactions denominated in U.S. dollars);
"DRAWDOWN DATE" means each date being (in each case) a single date in
each of August 1997, September 1997, December 1997 and March 1998, on
which the relevant Advances set out in schedule 1 are, or are to be
drawn down by the Borrower;
"DRAWDOWN NOTICE" means a notice in the form or substantially in the
form of schedule 2, duly completed with particulars of the relevant
Advance;
"DRAWDOWN PERIOD" means the period from the date of this Agreement and
ending on whichever is the earlier of (i) 31st March 1998 or (ii) the
date on which (a) the Loan is equal to the Commitment or (b) the
Borrower cancels the whole of the undrawn Commitment under clause 6.5 or
(c) the Commitment is reduced to zero pursuant to clause 11.2 or;
"ENCUMBRANCE" means any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment by way of security, trust
arrangement for the purpose of providing security or other security
interest of any kind securing any obligation of any person or any other
arrangement having the effect of conferring rights of retention or
set-off or other disposal rights over an asset (including without
limitation title transfer and/or retention arrangements having a
similar effect) and includes any agreement to create any of the
foregoing but does not include liens arising in the ordinary course of
trading by operation of law and not by way of contract;
"ENVIRONMENTAL LAW" includes all or any law, statute, rule, regulation,
treaty, by-law, code of practice, order, notice, demand or decision of
the courts or of any governmental authority or agency or any other
regulatory or other body in any jurisdiction relating to Environmental
Matters;
4
"ENVIRONMENTAL MATTERS" includes (a) the generation, deposit, disposal,
keeping, treatment, transportation, transmission, handling, importation,
exportation, processing, collection, sorting, presence or manufacture
of any waste (as defined in the Environmental Protection Act 1990) of
any Relevant Substance; (b) nuisance, noise, defective premises, health
and safety at work or elsewhere; and (c) the pollution, conservation or
protection of the environment (both natural and built) or of man or any
living organisms supported by the environment or any other matter
whatsoever affecting the environment or any part of it;
"EVENT OF DEFAULT" means any of the events or circumstances described in
clause 11.1;
"EXISTING LIABILITIES" means liabilities incurred by the Borrower in the
course of its ordinary business operations (i) under an agreement to
lease property to the US Guarantor, (ii) from equipment purchases or
(iii) for professionals' fees;
"FINAL REPAYMENT DATE" means 30 June 2004;
"FIRST REPAYMENT DATE" means 30 June 1998;
"GROUP" means ▇▇▇▇▇ & Nephew plc and each of its Subsidiaries;
"GUARANTEES" means the UK Guarantee and the US Guarantee;
"GUARANTORS" means the UK Guarantor and the US Guarantor;
"INDEBTEDNESS" means any obligation for the payment or repayment of
money, whether as principal or as surety and whether present or future,
actual or contingent;
"INTEREST PAYMENT DATE" means the last day of an Interest Period;
"INTEREST PERIOD" means in relation to any Advance or the Loan each
period for the calculation of interest in respect of such Advance or
the Loan ascertained in accordance with clauses 5.2 and 5.3;
"LIBOR" means, in relation to a particular period, the cost of funds to
the Bank of providing Dollar funding for a period equal to such period;
"LOAN" means the aggregate principal amount owing to the Bank under this
Agreement at any relevant time;
"MARGIN" means 0.25 per cent per annum;
5
"MATERIAL SUBSIDIARY" means at any time a Subsidiary of the UK Guarantor:
(a) whose profit before interest (receivable and payable) and
taxation (consolidated in the case of a Subsidiary which itself
has Subsidiaries) or whose gross assets (consolidated in the
case of a Subsidiary which itself has Subsidiaries) represent
in each case not less than 15 per cent of the consolidated
profit before interest (receivable and payable) and taxation or,
as the case may be, consolidated gross assets of the Group taken
as a whole in each case attributable to the shareholders of the
UK Guarantor, all as calculated respectively by reference to the
then latest accounts (consolidated or unconsolidated, as the
case may be) of such Subsidiary and the then latest consolidated
balance sheet of the Group provided that (i) in the case of a
Subsidiary acquired after the end of the financial period to
which the then latest consolidated balance sheet relates, the
reference to the then latest consolidated balance sheet for the
purposes of the calculation above shall, until consolidated
accounts for the financial period in which the acquisition is
made have been prepared as aforesaid, be deemed to be a
reference to a consolidation of the then latest consolidated
balance sheet and such Subsidiary's latest relevant accounts,
adjusted as deemed appropriate by the auditors of the UK
Guarantor; and (ii) if, in the case of a Subsidiary which itself
has Subsidiaries, no consolidated accounts are prepared, its
consolidated profit before interest (receivable and payable) and
taxation and consolidated gross assets shall be determined on
the basis of pro forma consolidated accounts of the relevant
Subsidiary and its Subsidiaries prepared for this purpose; or
(b) to which is transferred the whole or substantially the whole of
the assets and undertaking of a Subsidiary which immediately
prior to such transfer is a Material Subsidiary.
A report by the auditors of the UK Guarantor that in their opinion a
Subsidiary is or is not or was not at any particular time or throughout
any specified period a Material Subsidiary shall, in the absence of
manifest error, be conclusive and binding on all parties;
"MONTH" or "MONTHS" means a period beginning in one calendar month and
ending in the relevant later calendar month on the day numerically
corresponding to the day of the calendar month in which it started,
provided that (i) if the period started on the last Banking Day in a
calendar month or if there is no such numerically corresponding day,
it shall end on the last Banking Day in such later calendar month and
(ii) if such numerically corresponding day is not a Banking Day, the
period shall end on the next following Banking Day in such later
calendar month but if there is no such Banking Day it shall end on the
preceding Banking Day and "MONTHLY" shall be construed accordingly;
6
"PERMITTED LEASES" means finance leases entered into by the Borrower as
lessor in the course of its ordinary business operations;
"QUOTATION DATE" means, in relation to an Interest Period or other
period for which LIBOR is to be determined, the date on which
quotations would customarily be provided by leading banks in the London
Interbank Market for deposits in the relevant currency for delivery on
the first day of that Interest Period or other period;
"RELEVANT SUBSTANCE" means any substance whatsoever (whether in a solid
or liquid form or in the form of a gas or vapour and whether alone or
in combination with any other substance) or waste (as defined in the
Environmental Protection Act 1990) which is capable of causing harm to
man or any other living organism supported by the environment, or
damaging the environment or public health or welfare;
"REPAYMENT DATES" means, subject to clause 8.3, (i) the First Repayment
Date, (ii) each of the twenty-three (23) dates falling at three (3)
monthly intervals after the First Repayment Date and (iii) the Final
Repayment Date;
"SECURITY AGREEMENTS" means the security agreements (in the agreed form
as evidenced by their initialling by ▇▇▇▇▇▇ ▇▇▇▇ on behalf of the Bank
and by the UK Guarantor) entered into or, as the case may be, to be
entered into by the Borrower in favour of the UK Guarantor and the US
Guarantor;
"SUBSIDIARY" of a person means any company or entity directly or
indirectly controlled by such person, for which purpose "CONTROL"
means either ownership of more than 50 per cent of the voting share
capital (or equivalent right of ownership) of such company or entity
or power to direct its policies and management whether by contract or
otherwise;
"TAXES" includes all present and future taxes, levies, imposts, duties,
fees or charges of whatever nature together with interest thereon and
penalties in respect thereof and "TAXATION" shall be construed
accordingly;
"TOTAL CONSOLIDATED GROSS ASSETS OF THE GROUP" means the total
consolidated gross assets of the Group taken as a whole, as calculated
by reference to the then latest consolidated balance sheet of the Group
provided that (i) in the case of a Subsidiary acquired after the end of
the financial period to which the then latest consolidated balance
sheet of the Group relates, the reference to the then latest
consolidated balance sheet of the Group for the purposes of the
calculation above shall, until consolidated accounts of the Group for
the financial period in which the acquisition is made have been
prepared as aforesaid, be deemed to be a reference to a consolidation
of the then latest consolidated balance sheet and such Subsidiary's
latest relevant accounts, adjusted as deemed appropriate by the
auditors of the UK Guarantor; and (ii) if, in the case of a Subsidiary
which itself has Subsidiaries, no consolidated accounts are prepared,
its consolidated gross assets shall be determined
7
on the basis of pro forma consolidated accounts of the relevant
Subsidiary and its Subsidiaries prepared for this purpose;
"UK GUARANTEE" means the guarantee of the UK Guarantor in the form of
schedule 4;
"US GUARANTEE" means the guarantee of the US Guarantor in the form of
schedule 5;
"UK GUARANTOR" means ▇▇▇▇▇ & Nephew plc (Company registration number
324357) of ▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇; and
"US GUARANTOR" means Advanced Tissue Sciences, Inc. of ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇.
1.3 Headings
--------
Clause headings and the table of contents are inserted for convenience
of reference only and shall be ignored in the interpretation of this
Agreement.
1.4 Construction of certain terms
-----------------------------
In this Agreement, unless the context otherwise requires:
(a) references to clauses and schedules are to be construed as
references to the clauses of, and schedules to, this Agreement
and references to this Agreement include its schedules;
(b) references to (or to any specified provision of) this Agreement
or any other document shall be construed as references to this
Agreement, that provision or that document as in force for the
time being and as from time to time amended in accordance with
its terms, or, as the case may be, with the agreement of the
relevant parties and (where such consent is, by the terms of
this Agreement or the relevant document, required to be obtained
as a condition to such amendment being permitted) the prior
written consent of the Bank;
(c) references to a "REGULATION" include any present or future
regulation, rule, directive, requirement, request or guideline
(whether or not having the force of law) of any agency,
authority, central bank or government department or any self-
regulatory or other national or supra-national authority;
(d) words importing the plural shall include the singular and vice
versa;
(e) references to a time of day are to London time;
8
(f) references to a "PERSON" shall be construed as including
references to an individual, firm, company, corporation,
unincorporated body of persons or any State or any of its
agencies;
(g) references to "ASSETS" include all or part of any business,
undertaking, real property, personal property, uncalled capital
and any rights (whether actual or contingent, present or future)
to receive, or require delivery of, any of the foregoing;
(h) references to a "GUARANTEE" include references to an indemnity
or other assurance against financial loss including, without
limitation, an obligation to purchase assets or services as a
consequence of a default by any other person to pay any
Indebtedness and "GUARANTEED" shall be construed accordingly;
(i) a reference to any event or circumstance having a "MATERIAL
ADVERSE EFFECT" means in relation to any event or circumstance
that the occurrence or existence of the same, taken alone or in
combination with other events or circumstances which have
occurred, is likely in the reasonable opinion of the Bank
directly or indirectly to have a material adverse effect on the
ability of the Borrower to perform its present and future
obligations under this Agreement and/or on the ability of the
UK Guarantor to perform its present and future obligations under
the UK Guarantee;
(j) references to the "EQUIVALENT" of an amount specified in a
particular currency (the "SPECIFIED CURRENCY AMOUNT") shall be
construed as a reference to the amount of the other relevant
currency which can be purchased with the specified currency
amount in the London foreign exchange market at or about 11 a.m.
on the day on which the calculation falls to be made for spot
delivery as determined by the Bank; and
(k) references to any enactment shall be deemed to include
references to such enactment as re-enacted, amended or extended.
2 THE FACILITY
------------
2.1 Amount
------
The Bank, relying upon each of the representations and warranties in
clause 9, agrees to lend to the Borrower upon and subject to the terms
of this Agreement the principal sum of up to $16,000,000.
9
3 CONDITIONS
----------
3.1 Documents and evidence
----------------------
The obligation of the Bank to make its Commitment available shall be
subject to the condition that the Bank shall have received, not later
than two Banking Days before the day on which the Drawdown Notice in
respect of the first Advance is given, the documents and evidence
specified in schedule 3 in form and substance satisfactory to the Bank.
3.2 General conditions precedent
----------------------------
The obligation of the Bank to make available each Advance is subject to
the further conditions that:
(a) at the date of the first Drawdown Notice and on the first
Drawdown Date the representations and warranties set out in
clause 9.1, the representations and warranties set out in
clause 4.1 of the UK Guarantee and the representations and
warranties set out in clause 3 of the US Guarantee are true and
correct on and as of each such date as if each were made with
respect to the facts and circumstances existing at such date; and
(b) at the date of each Drawdown Notice and on each Drawdown Date,
no Default shall have occurred and be continuing or would result
from the making of such Advance.
3.3 Waiver of conditions precedent
------------------------------
The conditions specified in this clause 3 are inserted solely for the
benefit of the Bank and may be waived in whole or in part and with or
without conditions by the Bank in respect of the first or any other
Advance without prejudicing the right of the Bank to require fulfilment
of such conditions in whole or in part in respect of any other Advance.
4 ADVANCES
--------
4.1 Drawdown
--------
Subject to the terms and conditions of this Agreement an Advance shall
be made available to the Borrower following receipt by the Bank from
the Borrower of a Drawdown Notice not later than 10 a.m. on the third
Banking Day before the proposed Drawdown Date. A Drawdown Notice shall
be effective on actual receipt by the Bank and, once given, shall,
subject as provided in clause 5.5(a), be irrevocable. Subject to
clause 5.5, Advances may only be drawn down on Banking Days within the
relevant monthly period during the Drawdown Period as set out in
schedule 1, only one
10
Advance may be drawn down in each such relevant period and the Drawdown
Date for such Advance must be the first day of an Interest Period.
4.2 Amount
------
Each Advance shall be of the relevant amount set out in schedule 1.
4.3 Termination of Commitment
-------------------------
Any part of the Commitment which remains undrawn and uncancelled at the
end of the Drawdown Period shall thereupon be automatically reduced
to zero. If any Advance is not drawn down within the relevant monthly
period set out in schedule 1, that Advance will be cancelled and the
Commitment shall be reduced by the amount of the undrawn Advance.
4.4 Application of proceeds
-----------------------
Without prejudice to the Borrower's obligations under clause 10.1(c),
the Bank shall have no responsibility for the application of the
proceeds of any Advance by the Borrower.
5 INTEREST AND INTEREST PERIODS; ALTERNATIVE INTEREST RATES
---------------------------------------------------------
5.1 Normal interest rate
--------------------
The Borrower shall pay interest on each Advance or, as the case may be,
the Loan in respect of each Interest Period on the relevant Interest
Payment Date at the rate per annum determined by the Bank to be the
aggregate of (a) the Margin and (b) LIBOR.
5.2 Selection of Interest Periods
-----------------------------
From and including the date of the first Drawdown Date, each Interest
Period shall be of the duration of three (3) months.
5.3 Determination of Interest Periods
---------------------------------
Each Interest Period shall be of the duration specified in clause 5.2
but so that:
(a) the initial Interest Period in respect of each Advance shall
commence on the relevant Drawdown Date and each subsequent
Interest Period in respect of such Advance shall commence on the
expiry of the previous Interest Period; and
(b) the initial Interest Period in respect of each Advance after the
first Advance shall end on the same day as the then current
Interest Period for the previous Advance or, as the case may be,
the Loan and, on the last day of such
11
Interest Period, such Advances shall be consolidated into, and
shall thereafter constitute, the Loan.
5.4 Interest for late payment
-------------------------
If the Borrower fails to pay any sum (including, without limitation, any
sum payable pursuant to this clause 5.4) on its due date for payment
under this Agreement the Borrower shall pay interest on such sum from
the due date up to the date of actual payment (as well after as before
judgment) at a rate determined by the Bank pursuant to this clause.
The period beginning on such due date and ending on such date of
payment shall be divided into successive periods of not more than three
months as selected by the Bank each of which (other than the first,
which shall commence on such due date) shall commence on the last day
of the preceding such period. The rate of interest applicable to each
such period shall be the aggregate (as determined by the Bank) of (c)
one per cent per annum, (d) the Margin and (c) LIBOR, unless such
unpaid sum is an amount of principal which shall have become due and
payable, by reason of a declaration by the Bank under clause 11.2(b)
or a prepayment pursuant to clause 13.1, prior to the next succeeding
Interest Payment Date relating thereto, in which case the first such
period selected by the Bank shall end on such Interest Payment Date and
interest shall be payable on such unpaid sum during such period at a
rate one per cent above the rate applicable thereto immediately before
it shall have become so due and payable. Interest under this clause
5.4 shall be due and payable on the last day of each period determined
by the Bank pursuant to this clause 5.4 or, if earlier, on the date
on which the sum in respect of which such interest is accruing shall
actually be paid. If, for the reasons specified in clause 5.5(a), the
Bank is unable to determine a rate in accordance with the foregoing
provisions of this clause 5.4, interest on any sum not paid on its due
date for payment shall be calculated at a rate determined by the Bank
to be one per cent per annum above the aggregate of the Margin and the
cost of funds to the Bank. The Bank will notify the Borrower of the
interest rate and interest periods determined under this clause 5.4.
5.5 Market disruption; non-availability
-----------------------------------
(a) If and whenever, at any time prior to the commencement of any
Interest Period deposits in Dollars are not available to the
Bank in the London Interbank Market in the ordinary course of
business in sufficient amounts to fund the Advance for such
Interest Period the Bank shall forthwith give notice (a
"DETERMINATION NOTICE") to the Borrower. A Determination Notice
shall contain particulars of the relevant circumstances giving
rise to its issue. After the giving of any Determination Notice
the undrawn amount of the Commitment shall not be borrowed from
the Bank until notice to the contrary is given to the Borrower
by the Bank. No commitment commission, as calculated in
accordance with clause 7.1(b), shall be payable in respect of
such period when the Commitment cannot be borrowed.
12
(b) During the period of 10 days after any Determination Notice
has been given by the Bank under clause 5.5(a), the Bank shall
certify an alternative basis (the "SUBSTITUTE BASIS") for making
available or, as the case may be, maintaining the relevant
Advance. The Substitute Basis may (without limitation) include
alternative interest periods, alternative currencies or
alternative rates of interest but shall include a margin above
the cost of funds to the Bank equivalent to the Margin. Each
Substitute Basis so certified shall be binding upon the Borrower
and shall take effect in accordance with its terms from the date
specified in the Determination Notice until such time as the
Bank notifies the Borrower that none of the circumstances
specified in clause 5.5(a) continues to exist whereupon the
normal interest rate fixing provisions of this Agreement shall
apply, but so that the Borrower shall always have the right to
prepay the Loan in full rather than accepting the terms of the
Substitute Basis or carry forward any Advance that remains
undrawn in accordance with clause 5.5(c).
(c) In relation to the Advances available for drawdown pursuant to
clause 4.1 in the periods August 1997, September 1997 and
December 1997 only, upon the occurrence of the circumstances
set out in clause 5.5(a) the Borrower shall have the additional
right to direct the Bank to carry forward any such Advance
that the Borrower is unable to draw down during the relevant
period because of the restrictions in clause 5.5(a) and add the
amount of such Advance to the amount of the Advance for the next
following period.
6 REPAYMENT, PREPAYMENT AND CANCELLATION
--------------------------------------
6.1 Repayment
---------
The Borrower shall, subject to clause 6.2, repay the Loan by equal
instalments, one such instalment to be repaid on the First Repayment
Date and on each of the Repayment Dates with the final instalment (and
any balance of the Loan) to be repaid on the Final Repayment Date.
The schedule of repayments is set out in schedule 1. If the Commitment
is not drawn in full or is cancelled in part pursuant to clause 6.5 the
amount of each repayment instalment shall be reduced proportionately.
6.2 Voluntary prepayment
--------------------
The Borrower may prepay the Loan in whole or part (being $1,000,000 or
any larger sum which is an integral multiple of $1,000,000 or the
balance of the Loan) on any Interest Payment Date without premium or
penalty. Upon any notice of such prepayment being given, the
Commitment shall be reduced by an amount equal to the amount of such
prepayment.
13
6.3 Amounts payable on prepayment
-----------------------------
Any prepayment under this Agreement shall be made together with: (a)
accrued interest to the date of prepayment; (b) any additional amount
payable under clause 8.4 or 13.2; and (c) all other sums payable by the
Borrower to the Bank under this Agreement including, without
limitation, any accrued commitment commission payable under clause
7.1(b) and any amounts payable under clause 12.1.
6.4 Notice of prepayment
--------------------
No prepayment may be effected under this clause 6 unless the Borrower
shall have given the Bank at least 30 Banking Days' notice of its
intention to make such prepayment. Every notice of prepayment shall
be effective only on actual receipt by the Bank, shall be irrevocable
and shall oblige the Borrower to make such prepayment on the date
specified. No amount prepaid may be reborrowed and any amount prepaid
shall be applied in reducing the repayment instalments under clause 6
in inverse order of their due dates for payment. The Borrower may not
prepay the Loan or any part thereof save as expressly provided in this
Agreement.
6.5 Cancellation of Commitments
---------------------------
The Borrower may at any time during the Drawdown Period by notice to the
Bank (effective only on actual receipt) cancel with effect from a date
not less than 30 Banking Days after the receipt by the Bank of such
notice the whole or any part (being $1,000,000 or any larger sum which
is an integral multiple of $1,000,000 or the balance of the undrawn
Commitment) of the Commitment which has not then been borrowed or
requested in a Drawdown Notice. Any such notice of cancellation, once
given, shall be irrevocable and upon such cancellation taking effect
the Commitment of the Bank shall be reduced accordingly.
7 FEES AND EXPENSES
-----------------
7.1 Fees
----
The Borrower shall pay to the Bank whether or not any part of the
Commitment is ever advanced:
(a) on the date of this Agreement, for the account of the Bank, an
arrangement fee of $25,000;
(b) subject to clause 5.5(a), on the dates falling at quarterly
intervals after the date of this Agreement and on the last day
of the Drawdown Period for the account of the Bank, commitment
commission computed from the date of this Agreement at the rate
of 0.10 per cent per annum on the daily undrawn and uncancelled
amount of the Bank's Commitment.
14
7.2 Expenses
--------
The Borrower shall pay to the Bank on demand:
(a) all reasonable expenses (including legal, printing and out-of-
pocket expenses) incurred by the Bank in connection with the
negotiation, preparation and execution of this Agreement and of
any amendment or extension of, or the granting of any waiver or
consent under, this Agreement or either of the Guarantees; and
(b) all reasonable expenses (including legal and out-of-pocket
expenses) incurred by the Bank in contemplation of, or otherwise
in connection with, the enforcement or attempted enforcement of,
or preservation or attempted preservation of any rights under,
this Agreement or either of the Guarantees, including, without
limitation, the fees and expenses of accountants or other
experts incurred in relation to any investigation into the
affairs of the Borrower or either of the Guarantors, or
otherwise in respect of the moneys owing under this Agreement
or either of the Guarantees, together with interest at the rate
referred to in clause 5.4 from the date on which such expenses
were incurred to the date of payment (as well after as before
judgment).
7.3 Value Added Tax
---------------
All fees and expenses payable pursuant to this clause 7.3 shall be paid
by the Borrower together with an amount equal to any value added tax
payable by the Bank in respect of such fees and expenses (if applicable).
7.4 Stamp and other duties
----------------------
The Borrower shall pay all stamp, documentary, registration or other
duties or Taxes (including any duties or Taxes payable by, or assessed
on, the Bank but excluding Taxes on the overall net income, profits or
gains of the Bank) imposed on or in connection with this Agreement or
either of the Guarantees or the Loan and shall indemnify the Bank
against any liability arising by reason of any delay or omission by the
Borrower to pay such duties or Taxes.
8 PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS
---------------------------------------------
8.1 No set-off or counterclaim
--------------------------
All payments to be made by the Borrower under this Agreement shall be
made in full, without any set-off or counterclaim whatsoever and,
subject as provided in clause 8.4, free and clear of any deductions or
withholdings, in Dollars (except for costs, charges or expenses which
shall be payable in the currency in which they are incurred) on the
15
due date to the account of the Bank at such bank as the Bank may from
time to time specify for this purpose.
8.2 Payments by the Bank
--------------------
All sums to be advanced by the Bank to the Borrower under this Agreement
shall be remitted in Dollars on the relevant Drawdown Date and shall
be paid by the Bank to the account of the Borrower specified in the
relevant Drawdown Notice.
8.3 Non-Banking Days
----------------
When any payment under this Agreement would otherwise be due on a day
which is not a Banking Day, the due date for payment shall be postponed
to the next following Banking Day unless such Banking Day falls in the
next calendar month in which case payment shall be made on the
immediately preceding Banking Day.
8.4 Grossing-up for Taxes
---------------------
If at any time the Borrower is required to make any deduction or
withholding in respect of Taxes from any payment due under this
Agreement for the account of the Bank, the sum due from the Borrower
in respect of such payment shall be increased to the extent necessary
to ensure that, after the making of such deduction or withholding,
the Bank receives on the due date for such payment (and retains, free
from any liability in respect of such deduction or withholding) a net
sum equal to the sum which it would have received had no such deduction
or withholding been required to be made and the Borrower shall
indemnify the Bank against any losses or costs incurred by the Bank by
reason of any failure of the Borrower to make any such deduction or
withholding or by reason of any increased payment not being made on
the due date for such payment. The Borrower shall promptly deliver to
the Bank any receipts, certificates or other proof evidencing the
amounts (if any) paid or payable in respect of any such deduction or
withholding.
8.5 Bank accounts
-------------
The Bank shall maintain, in accordance with its usual practices, an
account or accounts evidencing the amounts from time to time lent by,
owing to and paid to it under this Agreement. Such accounts shall,
in the absence of manifest error, be conclusive as to the amount from
time to time owing by the Borrower under this Agreement.
8.6 Calculations
------------
All interest and other payments of an annual nature under this Agreement
shall accrue from day to day and be calculated on the basis of actual
days elapsed and a 360 day year. In calculating the actual number of
days elapsed in a period which is one of a
16
series of consecutive periods with no interval between them or a period
on the last day of which any payment falls to be made in respect of
such period, the first day of such period shall be included but the
last day excluded.
8.7 Certificates conclusive
-----------------------
Any certificate or determination of the Bank as to any rate of interest
or any amount payable under this Agreement shall, in the absence of
manifest error, be conclusive and binding on the Borrower.
8.8 Clawback of Tax benefit
-----------------------
If following any increase in any sum payable under this Agreement as is
referred to in clause 8.4, the Bank shall receive or be granted a credit
against or remission for any Taxes payable by it, the Bank shall,
subject to the Borrower having made any increased payment in accordance
with clause 8.4 and to the extent that the Bank can do so in its sole
opinion without prejudicing the retention of the amount of such credit
or remission and without prejudice to the right of the Bank to obtain
any other relief or allowance which may be available to it and to
conduct its own tax affairs as it thinks fit, reimburse the Borrower
with such amount as the Bank shall in its absolute discretion certify
to be the proportion of such credit or remission as will leave the
Bank (after such reimbursement) in no better and no worse position
than it would have been in had there been no such deduction or
withholding from the payment by the Borrower. Such reimbursement shall
be made promptly upon the Bank certifying (which it shall do if
reasonably requested by the Borrower) that the amount of such credit or
remission has been received by it. Nothing contained in this Agreement
shall oblige the Bank to rearrange its tax affairs or to disclose any
information regarding its tax affairs and computations. Without
prejudice to the generality of the foregoing the Borrower, by virtue
of this clause 8.8, is not entitled to enquire about the Bank's tax
affairs.
8.9 Certification to secure a Tax benefit
-------------------------------------
If, in order to make any payment due under this Agreement to the Bank
without deduction or withholding for or on account of Tax or to secure
the benefit of any reduced rate of such deduction or withholding, the
Borrower requires a direction from or the consent of a government or
taxing authority:
(a) the Borrower agrees to use its reasonable endeavours to complete
(accurately and in the manner reasonably acceptable to the Bank)
execute, arrange for any required certification of, and deliver
to the Bank or such government or taxing authority as the Bank
directs, any form or document reasonably required of it, and to
provide such information as the Bank or such government or
taxing authority may reasonably require or request in order to
assist or enable the Bank to secure that such a direction or
consent is given
17
to the Borrower in respect of any payment. The Borrower shall
perform its obligations under this clause 8.9(a) promptly upon
the earlier of:
(i) being notified that the form document or information is
required or requested; and
(ii) demand being made by the Bank or the relevant government
or taxing authority, as the case may be;
(b) the Bank agrees to use its reasonable endeavours to complete,
execute and arrange for delivery to the Borrower, or such
government or taxing authority as the Borrower may reasonably
direct, any form or document that may be required or reasonably
requested in order to enable the Borrower to be given such
direction or consent.
9 REPRESENTATIONS AND WARRANTIES
------------------------------
9.1 The Borrower represents and warrants to the Bank that:
(a) Due incorporation: the Borrower is a limited liability company
duly incorporated and validly existing under the laws of the
State of Delaware and has power to carry on its business as it
is now being conducted and to own its property and other assets;
(b) Corporate power to borrow: the Borrower has power to execute,
deliver and perform its obligations under this Agreement and to
borrow the Commitment; all necessary corporate, shareholder and
other action has been taken to authorise the execution, delivery
and performance of the same and no limitation on the powers of
the Borrower to borrow will be exceeded as a result of
borrowings under this Agreement;
(c) Binding obligations: this Agreement constitutes valid and
legally binding obligations of the Borrower enforceable in
accordance with its terms and such obligations rank at least
pari passu with all other unsecured and unsubordinated
Indebtedness of the Borrower;
(d) No conflict with other obligations: the execution and delivery
of, the borrowing of the Commitment and the performance of its
obligations under, and compliance with the provisions of, this
Agreement by the Borrower will not (i) materially contravene
any existing applicable law, statute, rule or regulation
or any judgment, decree or permit to which the Borrower is
subject, (ii) materially conflict with, or result in any breach
of any of the terms of, or constitute a default under, any
agreement or other instrument to which the Borrower is a party
or is subject or by which it or any of its property is bound,
(iii) materially contravene or conflict with any provision
18
of the Borrower's Certificate of Formation, Articles of
Organisation or Limited Liability Company Operating Agreement or
(iv) result in the creation or imposition of or oblige the
Borrower to create any Encumbrance on any of the Borrower's
undertakings, assets, rights or revenues;
(e) Consents obtained: every consent, authorisation, licence or
approval of, or registration with or declaration to,
governmental or public bodies or authorities or courts required
by the Borrower to authorise, or required by the Borrower in
connection with, the execution, delivery, validity,
enforceability or admissibility in evidence of this Agreement
or the performance by the Borrower of its obligations under this
Agreement has been obtained or made and is in full force and
effect and there has been no default in the observance of the
conditions or restrictions (if any) imposed in, or in
connection with, any of the same;
(f) No filings required: it is not necessary to ensure the legality,
validity, enforceability or admissibility in evidence of this
Agreement that it or any other instrument be notarised, filed,
recorded, registered or enrolled in any court, public office or
elsewhere in the States of Delaware or California or under
federal laws of the United States of America, or that any
stamp, registration or similar tax or charge be paid in the
States of Delaware or California or under federal laws on or in
relation to this Agreement and this Agreement is in proper form
for its enforcement in the courts of the States of Delaware and
California and under federal law;
(g) No litigation: no litigation, arbitration or administrative
proceeding is taking place, pending or, to the knowledge of the
officers of the Borrower, threatened against the Borrower which
could have a material adverse effect on the business, assets or
financial condition of the Borrower;
(h) No defaults: the Borrower is not (nor would with the giving of
notice or lapse of time or the satisfaction of any other
condition or any combination thereof be) in breach of or in
default under any agreement relating to Indebtedness to which
it is a party or by which it may be bound where the amount, or
aggregate amount at any one time, of the Indebtedness in relation
to which there is a breach or default is greater than $500,000
or its equivalent in the currency in which the same is
denominated and payable and no other Default has occurred and
is continuing;
(i) Choice of law: the choice by the Borrower of English law to
govern this Agreement and the submission by the Borrower to the
non-exclusive jurisdiction of the High Court of Justice in
England are valid and binding;
19
(j) No immunity: neither the Borrower nor any of its assets is
entitled to immunity on the grounds of sovereignty or otherwise
from any legal action or proceeding (which shall include, without
limitation, suit, attachment prior to judgment, execution or
other enforcement);
(k) No withholding Taxes: no Taxes are imposed by withholding,
deduction or similar means on any payment to be made by the
Borrower under this Agreement or are imposed on or by virtue of
the execution or delivery by the Borrower of this Agreement or
any document or instrument to be executed or delivered under
this Agreement;
(l) Compliance with consents and licences: every consent,
authorisation, licence or approval required by the Borrower in
connection with the conduct of its business and the ownership,
use, exploitation or occupation of its property and assets has
been obtained and is in full force and effect and there has
been no material default in the observance of the conditions and
restrictions (if any) imposed in, or in connection with, any of
the same and, to the knowledge of the officers of the Borrower,
no circumstances have arisen whereby any material remedial
action is likely to be required to be taken by, or at the
expense of, the Borrower under or pursuant to any law or
regulation applicable to the business, property or assets of
the Borrower; and
(m) Clean company: prior to the date of this Agreement the Borrower
has not undertaken any trading or incurred any material
liabilities of any nature whatsoever (actual or contingent) other
than the Existing Liabilities and there are no Encumbrances over
any of the Borrower's assets or undertakings.
9.2 Repetition
----------
The representations and warranties in clause 9.1 (other than 9.1(m))
shall be deemed to be repeated by the Borrower on and as of each
Drawdown Date and each Interest Payment Date as if made with reference
to the facts and circumstances existing on each such day.
10 UNDERTAKINGS
------------
The Borrower undertakes with the Bank that, from the date of this
Agreement and so long as any moneys are owing under this Agreement or
remain available for drawing by the Borrower, it will:
(a) Notice of Default: promptly upon becoming aware of the same
inform the Bank of any occurrence which materially adversely
affects its ability to perform its obligations under this
Agreement and of any Default and from time to time, if so
requested by the Bank, confirm to the Bank in writing
20
that, save as otherwise stated in such confirmation, no Default
has occurred and is continuing;
(b) Consents and licences: without prejudice to clauses 3 and 9.1,
obtain or cause to be obtained, maintain in full force and effect
and comply in all material respects with the conditions and
restrictions (if any) imposed in, or in connection with, every
consent, authorisation, licence or approval of governmental or
public bodies or authorities or courts and do, or cause to be
done, all other acts and things which may from time to time be
necessary under applicable law except where the failure to
maintain or comply would not have a material adverse effect on
the Borrower's ability to comply with this Agreement;
(c) Use of proceeds: use the proceeds of drawings under this
Agreement exclusively for the purpose specified in clause 1.1;
(d) Pari passu: ensure that its obligations under this Agreement
shall, without prejudice to the provisions of clause 10.2, at
all times rank at least pari passu with all its other present
and future unsecured and unsubordinated Indebtedness;
(e) Provision of information: provide the Bank with such confidential
financial and other information concerning the Borrower and its
affairs as the Bank may from time to time reasonably require and
which the Bank undertakes to keep confidential;
(f) Insurance: insure and keep insured all its properties and assets
with underwriters or insurance companies of repute to such extent
and against such risks as prudent companies engaged in businesses
similar to those of the Borrower and located in a similar
location to the Borrower normally insure;
(g) Compliance with laws and regulations: comply in all material
respects with the terms and conditions of all laws, regulations,
agreements, licences and concessions material to the carrying on
of its business; and
(h) Notice of litigation: it will, upon becoming aware that the same
is threatened or pending and in any case promptly after the
commencement thereof, give to the Bank notice in writing of any
material litigation, alternative dispute resolution, arbitration
or administrative proceedings or any dispute affecting the
Borrower or any of its assets, rights or revenues which is
reasonably likely to be determined against the Borrower and which,
if so determined, is reasonably likely to have a material adverse
effect.
21
10.2 The Borrower undertakes with the Bank that, from the date of this
Agreement and so long as any moneys are owing under this Agreement or
remain available for drawing by the Borrower:
(a) Negative pledge: it will not permit:
(i) any Encumbrance by the Borrower to subsist, arise or
be created or extended over all or any part of its
present or future undertaking, assets, rights or
revenues to secure or prefer any present or future
Indebtedness of the Borrower or any other person; or
(ii) any Indebtedness of the Borrower to be guaranteed by any
person (other than the Guarantors) unless the benefit of
such guarantee, or such other guarantee as the Bank
considers equivalent thereto, is at the same time
extended equally and rateably to the obligations of the
Borrower under this Agreement to the satisfaction of the
Bank,
(b) Disposals: it will not sell, transfer, lend or otherwise dispose
of or cease to exercise direct control over any part (being either
alone or when aggregated with all other disposals falling to be
taken into account pursuant to this clause 10.2(b) material in
the opinion of the Bank in relation to the undertaking, assets,
rights and revenues of the Borrower) of its present or future
undertaking, assets, rights or revenues (otherwise than by
transfers, sales or disposals for full consideration in the
ordinary course of day-to-day trading) whether by one or a
series of transactions related or not; and
(c) Loans and guarantees: it will not make any loans, grant any credit
(save for normal trade credit in the ordinary course of day-to-
day trading) or give any guarantee to or for the benefit of any
person;
provided that notwithstanding the prohibitions in clause 10.2(a) and (b)
the Borrower may enter into and permit to subsist the Permitted Leases
and the Security Agreements to secure or prefer the obligations
specified in them.
11 EVENTS OF DEFAULT
-----------------
11.1 Each of the events and circumstances set out below is an Event of
Default (whether or not caused by any reason outside the control of
the Borrower or either Guarantor):
(a) Non-payment: the Borrower fails to pay any sum due from it under
this Agreement in the currency, at the time (or within five
Banking Days thereafter where the failure to pay is due solely
to an administrative or systems error arising in the
transmission of funds) and in the manner stipulated in this
Agreement; or
22
(b) Breach of certain obligations: the Borrower commits any breach
of or omits to observe any of the obligations or undertakings
expressed to be assumed by it under clause 10.2 or the UK
Guarantor commits any breach of or omits to observe or perform
any of the obligations or undertakings expressed to be assumed
by it under clause 5.2 of the UK Guarantee; or
(c) Breach of other obligations: the Borrower or the UK Guarantor
commits any breach of or omits to observe any of the obligations
or undertakings expressed to be assumed by it under this
Agreement or, as the case may be, the UK Guarantee other than
(in the case of the Borrower) failure to pay any sum when due or
any breach of the provisions referred to in clause 11.1(b) and,
in respect of any such breach or omission which in the opinion
of the Bank is capable of remedy, such action as the Bank may
require shall not have been taken within 14 days of the Bank
notifying the Borrower, the UK Guarantor and the US Guarantor of
such default and of such required action; or
(d) Misrepresentation: any representation or warranty made or
deemed to be made or repeated by or in respect of the Borrower
in or pursuant to this Agreement or by the UK Guarantor in or
pursuant to the UK Guarantee or in any notice, certificate or
statement referred to in or delivered under this Agreement or
the UK Guarantee is or proves to have been incorrect or
misleading in any material respect; or
(e) Cross-default: any Borrowed Money of the Borrower or of the UK
Guarantor or any of its Material Subsidiaries:
(i) is not paid when due; or
(ii) becomes (whether by declaration or automatically in
accordance with the relevant agreement or instrument
constituting the same) due and payable prior to the
date when it would otherwise have become due; or
(iii) any creditor of the Borrower, the UK Guarantor or any
of its Material Subsidiaries becomes entitled to
declare any Borrowed Money of the Borrower or the UK
Guarantor or any of its Material Subsidiaries so due and
payable or to require cash collateralisation or
security for any such Borrowed Money or any facility or
commitment available to the Borrower, or the UK
Guarantor or any of its Material Subsidiaries relating
to Borrowed Money is withdrawn, suspended or cancelled,
in the case of sub-paragraphs (ii) and (iii), by
reason of any default (however described) of the company
concerned;
and provided such default has not been cured or remedied within
14 days of its occurrence (or, if the terms of the relevant
agreement or instrument
23
require notification to the Borrower, UK Guarantor or Material
Subsidiary (as the case may be), then within 14 days from such
notification) and the amount, or aggregate amount at any one
time, of all Borrowed Money of the UK Guarantor or any of its
Material Subsidiaries in relation to which any of the foregoing
events shall have occurred and be continuing is equal to or
greater than 10,000,000 or its equivalent in the currency in
which the same is denominated and payable; or
(f) Legal process: any judgment or order made against the Borrower,
the UK Guarantor or any of its Material Subsidiaries is not
stayed or complied with within seven days or a creditor so
entitled attaches or takes possession of, or a distress,
execution, sequestration or other process is levied or enforced
upon or sued out against, any material part of the undertakings,
assets, rights or revenues of the Borrower, the UK Guarantor or
any of its Material Subsidiaries and is not discharged within
14 days; or
(g) Insolvency: the Borrower, the UK Guarantor or any of its
Material Subsidiaries is deemed unable to pay its debts within
the meaning of section 123 of the Insolvency ▇▇▇ ▇▇▇▇ or
otherwise becomes insolvent or stops or suspends making payments
(whether of principal or interest) with respect to all or any
class of its debts or announces an intention to do so, provided
however that an internal restructuring, rearrangement or
reconstruction of the Group that may otherwise breach this clause
may be permitted by the Bank giving its prior written approval;
or
(h) Other insolvency events:
(i) any petition is presented or other step is taken for
the purpose of winding up the Borrower, the UK Guarantor
or any of its Material Subsidiaries, save for such
petition or step which the UK Guarantor demonstrates to
the satisfaction of the Bank to be frivolous, vexatious
or an abuse of the process of the court (or which is
dealt with or discharged or otherwise withdrawn within
30 days) or an order is made or resolution passed for
the winding up of the Borrower, the UK Guarantor or any
of its Material Subsidiaries or a notice is issued
convening a meeting for the purpose of passing any such
resolution,
(ii) any petition is presented or other step is taken for the
purpose of the appointment of an administrator of the
Borrower, the UK Guarantor or any of its Material
Subsidiaries, save for such petition or step which is
taken by a creditor of the Borrower, the UK Guarantor
or any of its Material Subsidiaries and which the UK
Guarantor demonstrates to the satisfaction of the Bank
to be frivolous, vexatious or an abuse of the process
of the court (or which is dealt
24
with or discharged or otherwise withdrawn within 30
days), or the Bank believes that any such petition or
other step is imminent or an administration order is
made in relation to the Borrower, the UK Guarantor or
any of its Material Subsidiaries, or
(iii) any administrative or other receiver is appointed of the
Borrower, the UK Guarantor or any of its Material
Subsidiaries or any part of their respective assets
and/or undertakings or any other steps are taken to
enforce any Encumbrance over all or any part of the
assets of the Borrower, the UK Guarantor or any of its
Material Subsidiaries and such appointment or step is
not dealt with or discharged or otherwise withdrawn
within 30 days; or
(i) Compositions: any steps are taken, or negotiations commenced,
by the Borrower, the UK Guarantor or any of its Material
Subsidiaries or by any of their respective creditors with a
view to proposing any kind of composition, compromise,
arrangement, reconstruction or re-adjustment involving such
company and any of its creditors, such step or negotiation
arising from such company's inability or likely future inability
to pay its debts as they fall due, provided however that an
internal restructuring, rearrangement or reconstruction of the
Group that may otherwise breach this clause may be permitted by
the Bank giving its prior written approval; or
(j) Analogous proceedings: there occurs, in relation to the
Borrower, the UK Guarantor or any of its Material Subsidiaries,
in any country or territory in which any of them carries on
business (including, without limitation, the United States of
America) or to the jurisdiction of whose courts any part of
their respective assets is subject, any event which, in the
reasonable opinion of the Bank, appears in that country or
territory to correspond with, or have an effect equivalent or
similar to, any of those mentioned in clauses 11.1(f) to 11.1(i)
inclusive (other than proceedings that can be demonstrated to
the reasonable satisfaction of the Bank to be frivolous,
vexatious or an abuse of court processes or which is dealt with
or discharged or otherwise withdrawn within 30 days) or the
Borrower, the UK Guarantor or any of its Material Subsidiaries
otherwise becomes subject, in any such country or territory, to
the operation of any law relating to insolvency, bankruptcy or
liquidation; or
(k) Change of Control: control (as defined in section 435 of the
Insolvency Act 1986) of the UK Guarantor is acquired without the
prior written consent of the Bank by any person and/or his
associates (as defined in that section) not having control of
the UK Guarantor at the date of this Agreement (but so that
the occurrence of such an event shall only be an Event of
Default on and from the date falling 10 Banking Days from the
occurrence of such event); or
25
(l) Unlawfulness: it becomes unlawful at any time for the Borrower
or the UK Guarantor to perform all or any of its obligations
under this Agreement or the UK Guarantee or any obligation of
the Borrower under this Agreement or of the UK Guarantor under
the UK Guarantee becomes invalid, ineffective or unenforceable
for any reason or the Borrower or the UK Guarantor becomes
unable, for any reason, to perform the same; or
(m) Repudiation: the Borrower or the UK Guarantor repudiates this
Agreement or the UK Guarantee or does or causes or permits to
be done any act or thing evidencing an intention to repudiate
this Agreement or the UK Guarantee; or
(n) Ownership of Borrower: the membership interests of the Borrower
ceases to be wholly-owned by the Guarantors; or
(o) Environmental matters: the Bank becomes subject to any actual or
potential liability in relation to any Relevant Substance on or
from any property owned, occupied or leased by the Borrower, the
UK Guarantor or any of its Subsidiaries or, in consequence of
the application of any Environmental Law, the claims of the Bank
are subordinated to the claims of any governmental authority or
agency.
11.2 Acceleration
------------
The Bank may at any time after the happening of an Event of Default and
so long as the same is continuing by notice to the Borrower declare
that:
(a) the obligation of the Bank to make its Commitment available
shall be terminated, whereupon the Commitment shall be reduced
to zero forthwith; and/or
(b) the Loan and all interest and commitment commission accrued and
all other sums payable under this Agreement have become
immediately due and payable or have become due and payable on
demand, whereupon the same shall, immediately or in accordance
with the terms of such notice, become so due and payable.
On, and on each day after, the making of any such declaration, the Bank
shall be entitled, to the exclusion of the Borrower, to select the
duration of Interest Periods having regard to its expectations for the
period during which such Event of Default will continue and to the
amount of additional costs that may be incurred should the Borrower
prepay the Loan during the Interest Period selected; but, for the
avoidance of doubt, without limiting in any way the Borrower's
obligations under clause 12.1.
26
11.3 Demand basis
------------
If, pursuant to clause 11.2(b), the Bank declares the Loan to be due
and payable on demand then the Bank may at any time by written notice
to the Borrower (a) call for repayment of the Loan on such date as may
be specified in such notice whereupon the Loan shall become due and
payable on the date so specified together with all interest and
commitment commission accrued and all other sums payable under this
Agreement or (b) withdraw such declaration with effect from the date
specified in such notice.
12 INDEMNITIES
-----------
12.1 Miscellaneous indemnities
-------------------------
The Borrower shall on demand indemnify the Bank, without prejudice to
any of its other rights under this Agreement, against any loss (including
loss of Margin) or expense reasonably incurred which the Bank shall
certify as sustained or incurred by it as a consequence of:
(a) any default in payment by the Borrower of any sum under this
Agreement when due;
(b) the occurrence of any other Event of Default;
(c) any prepayment of all or part of the Loan being made under
clause 13.1 otherwise than on an Interest Payment Date relating
to the part of the Loan prepaid; or
(d) any Advance not being made for any reason (excluding any
default by the Bank) after a Drawdown Notice has been given;
including, in any such case, but not limited to, any loss or expense
sustained or incurred by the Bank in maintaining or funding all or any
part of its Contribution or in liquidating or re-employing deposits
from third parties acquired or contracted for to fund all or any part
of its Contribution or any other amount owing to the Bank.
12.2 Currency of account; currency indemnity
---------------------------------------
No payment by the Borrower under this Agreement which is made in a
currency other than the currency ("CONTRACTUAL CURRENCY") in which such
payment is required to be made pursuant to this Agreement shall discharge
the obligation in respect of which it is made except to the extent of
the net proceeds in the Contractual Currency received by the Bank upon
the sale of the currency so received, after taking into account any
premium and costs of exchange in connection with such sale. For the
avoidance of doubt the Bank shall not be obliged to accept any such
payment in a currency other than the Contractual Currency nor shall
the Bank be liable to the Borrower for any
27
loss or alleged loss arising from fluctuations in exchange rates between
the date on which such payment is so received by the Bank and the date
on which the Bank effects such sale, as to which the Bank shall have an
absolute discretion. If any sum due from the Borrower under this
Agreement or any order or judgment given or made in relation hereto is
required to be converted from the Contractual Currency or the currency
in which the same is payable under such order or judgment (the "FIRST
CURRENCY") into another currency (the "SECOND CURRENCY") for the
purpose of (a) making or filing a claim or proof against the Borrower,
(b) obtaining an order or judgment in any court or other tribunal or
(c) enforcing any order or judgment given or made in relation to this
Agreement, the Borrower shall indemnify and hold harmless the Bank from
and against any loss suffered as a result of any difference between
(i) the rate of exchange used for such purpose to convert the sum in
question from the first currency into the second currency and (ii) the
rate or rates of exchange at which the Bank may in the ordinary course
of business purchase the first currency with the second currency upon
receipt of a sum paid to it in satisfaction, in whole or in part, of
any such order, judgment, claim or proof. Any amount due from the
Borrower under the indemnity contained in this clause shall be due as
a separate debt and shall not be affected by judgment being obtained
for any other sums due under or in respect of this Agreement and the
term "RATE OF EXCHANGE" includes any premium and costs of exchange
payable in connection with the purchase of the first currency with
the second currency.
13 UNLAWFULNESS AND INCREASED COSTS; MITIGATION
--------------------------------------------
13.1 Unlawfulness
------------
If it is or becomes contrary to any law or regulation for the Bank to
contribute to Advances or the Loan or to maintain its Commitment or
fund its Contribution, the Bank shall promptly notify the Borrower
whereupon (a) the Bank's Commitment shall be reduced to zero and (b)
the Borrower shall be obliged to prepay the Contribution of the Bank
either (i) forthwith or (ii) on a future specified date not being
earlier than the latest date permitted by the relevant law or
regulation. Any prepayment pursuant to this clause 13.1 shall be
made together with all amounts referred to in clause 6.3.
13.2 Increased costs
---------------
If the result of any change in, or in the interpretation or application
of, or the introduction of, any law or any regulation, request or
requirement (whether or not having the force of law, but, if not having
the force of law, with which the Bank or, as the case may be, its
holding company habitually complies), including (without limitation)
those relating to Taxation, capital adequacy, liquidity, reserve
assets, cash ratio deposits and special deposits, is to:
(a) subject the Bank to Taxes or change the basis of Taxation of the
Bank with respect to any payment under this Agreement (other than
Taxes or Taxation
28
on the overall net income, profits or gains of the Bank imposed
in the jurisdiction in which its principal or lending office
under this Agreement is located); and/or
(b) increase the cost to, or impose an additional cost on, the Bank
or its holding company in making or keeping available all or
part of the Bank's Commitment or maintaining or funding all or
part of the Bank's Contribution; and/or
(c) reduce the amount payable or the effective return to the Bank
under this Agreement; and/or
(d) reduce the Bank's or its holding company's rate of return on
its overall capital by reason of a change in the manner in which
it is required to allocate capital resources to the Bank's
obligations under this Agreement; and/or
(e) require the Bank or its holding company to make a payment or
forgo a return calculated by reference to or on any amount
received or receivable by the Bank under this Agreement; and/or
(f) require the Bank or its holding company to incur or sustain a
loss (including a loss of future potential profits) by reason
of being obliged to deduct all or part of the Bank's Commitment
or Contribution from its capital for regulatory purposes,
then and in each such case (but subject to clause 13.3):
(i) the Bank shall notify the Borrower in writing of such event
promptly upon its becoming aware of the same; and
(ii) the Borrower shall on demand, made at any time whether or not
the Bank's Contribution has been repaid, pay to the Bank the
amount which the Bank specifies (in a certificate setting forth
the basis of the computation of such amount but not including
any matters which the Bank or its holding company reasonably
regards as confidential) is required to compensate the Bank
and/or its holding company for such liability to Taxes, increased
or additional cost, reduction, payment, forgone return or loss
(and the Bank agrees that such amount will be calculated in a
reasonable fashion).
For the purposes of this clause 13.2 and clause 13.4 "HOLDING COMPANY"
means, in relation to the Bank, the company or entity (if any) within
the consolidated supervision of which the Bank is included.
29
13.3 Exceptions
----------
Nothing in clause 13.2 shall entitle the Bank to receive any amount in
respect of compensation for any such liability to Taxes, increased or
additional cost, reduction, payment, forgone return or loss to the
extent that the same:
(a) is the subject of an additional payment under clause 8.4;
(b) arises as a consequence of (or of any law or regulation
implementing) (i) the proposals for international convergence
of capital measurement and capital standards published by the
Basle Committee on Banking Regulations and Supervisory Practices
in July 1988 and/or (ii) any applicable directive of the
European Union (in each case) unless it results from any change
in, or in the interpretation or application of, such proposals
or any such applicable directive (or any law or regulation
implementing the same) occurring after the date hereof; or
(c) arises from a change in the basis of Taxation on the overall net
income, profits or gains of the Bank imposed in the jurisdiction
in which its principal or lending office under this Agreement is
located.
For the purposes of clause 13.3(b) the term "APPLICABLE DIRECTIVE" means
(exclusively) each of the Own Funds Directive (89/299/EEC of 17th
April 1989) and the Solvency Ratio Directive (89/647/EEC of 18th
December 1989).
13.4 Mitigation
----------
If circumstances arise which would, or would upon the giving of notice,
result in:
(a) the Borrower being required to make an increased payment to the
Bank pursuant to clause 8.4;
(b) the reduction of the Bank's Commitment to zero or the Borrower
being required to prepay the Bank's Contribution pursuant to
clause 13.1; or
(c) the Borrower being required to make a payment to the Bank to
compensate the Bank or its holding company for a liability to
Taxes, increased or additional cost, reduction, payment, forgone
return or loss pursuant to clause 13.2(ii);
then, without in any way limiting, reducing or otherwise qualifying the
obligations of the Borrower under clause 8 and this clause 13, the
Bank shall endeavour to take such reasonable steps (and/or, in the case
of clause 13.2(ii) and where the increased or additional cost, reduction,
payment, forgone return or loss is that of its holding company, endeavour
to procure that its holding company takes such reasonable steps) as are
open to it (or, as the case may be, its holding company) to mitigate
or remove
30
such circumstances including the transfer of its rights and obligations
under this Agreement to another bank or financial institution unless
the taking of such steps might (in the opinion of the Bank) be unduly
prejudicial to the Bank (or, as the case may be, its holding company)
or be in conflict with the Bank's (or, as the case may be, its holding
company's) general banking policies or involve the Bank (or, as the
case may be, its holding company) in unreasonable expense or an
unreasonable increased administrative burden.
14 SETOFF
------
14.1 Set-off
-------
The Borrower authorises the Bank to apply any credit balance to which
the Borrower is then entitled on any account of the Borrower with the
Bank at any of its branches in or towards satisfaction of any sum then
due and payable from the Borrower to the Bank under this Agreement. For
this purpose the Bank is authorised to purchase with the moneys
standing to the credit of such account such other currencies as may be
necessary to effect such application. The Bank shall not be obliged to
exercise any right given to it by this clause 14.1. The Bank shall
notify the Borrower (giving full details) forthwith upon the exercise
or purported exercise of any right of set-off.
15 ASSIGNMENT, TRANSFER AND LENDING OFFICES
----------------------------------------
15.1 Benefit and burden
------------------
This Agreement shall be binding upon, and enure for the benefit of, the
Bank and the Borrower and their respective successors.
15.2 No assignment by Borrower
-------------------------
The Borrower may not assign or otherwise transfer any of its rights or
obligations under this Agreement without the prior written consent of
the Bank, such consent not to be unreasonably withheld or delayed,
save that it shall be reasonable for the Bank to withhold such consent
if the Borrower proposes to assign or otherwise transfer any of its
rights or obligations under this Agreement to:
(a) any person other than a wholly-owned Subsidiary of the UK
Guarantor; or
(b) any person incorporated in a jurisdiction other than the United
States of America or the United Kingdom,
or if the Bank is of the opinion that, upon such assignment, either of
the Guarantees will cease to continue in full force and effect.
31
15.3 Transfer
--------
The Bank may not assign or transfer all or any part of its rights,
benefits and/or obligations under this Agreement without the prior
written consent of the UK Guarantor, such consent not to be
unreasonably withheld or delayed.
15.4 Disclosure of information
-------------------------
The Bank may disclose to a prospective transferee (with the consent of
the UK Guarantor, such consent not to be unreasonably withheld or
delayed) such information about the Borrower as the Bank shall
consider appropriate in relation to this Agreement to the extent
necessary and for the sole purpose of effecting a transfer of an
interest in the Loan.
16 NOTICES AND OTHER MATTERS
-------------------------
16.1 Notices
-------
Every notice, request, demand or other communication under this
Agreement shall:
(a) be in writing delivered personally or by first-class prepaid
letter (airmail if available) or telefax;
(b) be deemed to have been received, subject as otherwise provided
in this Agreement, in the case of a letter when delivered and,
in the case of a telefax, when a complete and legible copy is
received by the addressee (unless the date of despatch is not
a business day in the country of the addressee or the time of
despatch of any telefax is after the close of business in the
country of the addressee in which case it shall be deemed to
have been received at the opening of business on the next such
business day); and
(c) be sent:
(i) to the Borrower at:
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Attention: ▇▇▇ ▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇▇▇
Telefax: (01482) 673127 (01904) 451031
and
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telefax: (▇▇▇) ▇▇▇ ▇▇▇▇
32
(ii) to the Bank at:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telefax: 0171 777 4783
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
(iii) to the UK Guarantor at:
▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telefax: 0171 240 7088
Attention: Company Secretary
(iv) to the US Guarantor at:
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Telefax: (▇▇▇) ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
or to such other address or telefax number as is notified by the
relevant party to the other party to this Agreement.
16.2 No implied waivers, remedies cumulative
---------------------------------------
No failure or delay on the part of the Bank or the Borrower to exercise
any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise by the Bank
or the Borrower of any power, right or remedy preclude any other or
further exercise thereof or the exercise of any other power, right or
remedy. The remedies provided in this Agreement are cumulative and are
not exclusive of any remedies provided by law.
16.3 Counterparts
------------
This Agreement may be executed in any number of counterparts and by the
different parties on separate counterparts, each of which when so
executed and delivered shall be an original, but all counterparts shall
together constitute one and the same instrument.
33
17 GOVERNING LAW AND JURISDICTION
------------------------------
17.1 Law
---
This Agreement shall be governed by English law.
17.2 Submission to jurisdiction
--------------------------
The Borrower agrees for the benefit of the Bank that:
(a) if either party has any claim against any other arising out of
or in connection with this Agreement such claim shall (subject
to clause 17.2(c) be referred to the High Court of Justice in
England, to the jurisdiction of which both of the parties
irrevocably submits;
(b) the jurisdiction of the High Court of Justice in England over
any such claim against the Bank shall be an exclusive
jurisdiction and no courts outside England shall have
jurisdiction to hear or determine any such claim; and
(c) nothing in this clause shall limit the right of the Bank to
refer any such claim against the Borrower to any other court of
competent jurisdiction outside England, to the jurisdiction of
which the Borrower hereby irrevocably agrees to submit, nor
shall the taking of proceedings by the Bank before the courts
in one or more jurisdictions preclude the taking of proceedings
in any other jurisdiction whether concurrently or not.
17.3 Agent for service of process
----------------------------
The Borrower irrevocably designates, appoints and empowers the UK
Guarantor at present of ▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ to receive for it and on its behalf service of process issued
out of the High Court of Justice in England in relation to any claim
arising out of or in connection with this Agreement.
34
IN WITNESS whereof the parties to this Agreement have caused this Agreement to
be duly executed on the date first above written.
THE BORROWER
------------
SIGNED for and on behalf )
of DERMEQUIP, L.L.C. ) ▇▇▇▇▇ ▇ ▇▇▇▇
Manager
THE BANK
--------
SIGNED for and on behalf )
of THE CHASE MANHATTAN BANK ) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
35