Delaware | 0-22936 | 22-3172740 | ||
(State or other jurisdiction | (Commission | (IRS Employer | ||
of incorporation) | File Number) | Identification No.) | ||
P.O. Box 613, Cheyenne, Wyoming | 82001 | |||
(Address of principal executive offices) | (Zip Code) |
1 | ||||
3 | ||||
5 |
CROWN NORTHCORP, INC. |
||||
March 15, 2007 | By: | /s/ Stephen W. Brown | ||
Stephen W. Brown | ||||
Secretary |
BDO Deutsche Warentreuhand Aktiengesellschaft Wirtschaftsprüfungsgesellschaft |
EUR | ||||
ASSETS |
||||
1 cash reserve |
||||
a) cash on hand |
3,300 | |||
b) balances with central banks |
10,265,554 | |||
10,268,854 | ||||
2 receivables from banks |
||||
a) payable on demand |
35,521,549 | |||
b) other |
||||
3 receivables from customers |
15,985,776 | |||
4 equity interests |
13,045 | |||
5 interests
in affiliated companies |
||||
6 trust fund assets |
10,829,081 | |||
7 intangible assets |
426,782 | |||
8 fixed assets |
1,220,085 | |||
9 other assets |
12,918,072 | |||
10 accrued items |
537,952 | |||
total assets |
87,721,195 | |||
LIABILITIES |
||||
1 liabilities to banks |
||||
a) payable on demand |
3,290,166 | |||
b) with an agreed term or period of notice |
330,261 | |||
2 liabilities to customers |
28,833,755 | |||
3 trust fund liabilities |
10,829,081 | |||
4 other liabilities |
13,936,069 | |||
5 accrued items |
1.958 | |||
6 provisions |
||||
a) provision for pensions and similar liabilities |
545,239 | |||
b) provision for deferred taxes |
| |||
c) other provisions |
5,628,159 | |||
6,173,398 | ||||
7 subordinated capital |
2,000,000 | |||
8 shareholders equity |
||||
a) subscribed capital |
20,000,000 | |||
b) capital reserve |
11,304,812 | |||
c) accumulated net gain |
9,861 | |||
d) net loss/ gain for the year |
-8,988,165 | |||
22,326,508 | ||||
total liabilities and shareholders equity |
87,721,195 | |||
F-1
Computer hardware
|
3 years | |
Vehicles
|
6 years | |
Office furniture and equipment
|
5 to 13 years |
F-2
F-3
F-4
2006 | ||||
Land and buildings |
| 919,960 | ||
Office equipment |
6,276,267 | |||
Vehicles |
186,655 | |||
Computer equipment |
4,127,312 | |||
Property and equipment total |
11,510,194 | |||
Less: accumulated depreciation and sales |
10,290,109 | |||
Property and equipment net |
| 1,220,085 | ||
2006 | ||||
Software |
| 25,359,547 | ||
Less: accumulated amortization |
24,932,765 | |||
Software net |
| 426,782 | ||
F-5
F-6
2006 | ||||
HVB Veiwa 5 GmbH & Co. Restrukturierung KG |
| 6,594,360 | ||
Claim
vis-à-vis Fortis due to sale of Asset Management |
2,399,579 | |||
Receivables from subsidiaries in liquidation (See note 6) |
2,332,866 | |||
Tax claims receivable |
998,876 | |||
Others assets |
592,391 | |||
Total other assets |
| 12,918,072 | ||
F-7
Promissory note, issued June 9, 2006 with interest
payable annually at a rate of 4.55%. Principal due
February 11, 2013 |
| 5,000,000 | ||
Promissory note, issued June 9, 2006 with interest
payable annually at a rate of 5.19%. Principal due
March 4, 2014 |
1,000,000 | |||
Promissory note, issued June 9, 2006 with interest
payable quarterly at a variable rate of 3 month Libor
+0.805% (3.86% at July 3, 2006). Principal due
January 16, 2013 |
5,000,000 | |||
Promissory note, issued June 9, 2006 with interest
payable annually at a rate of 5.13%. Principal due
February 4, 2014 |
7,000,000 | |||
Promissory note, issued June 9, 2006 with interest
payable annually at a rate of 4.70%. Principal due
February 4, 2014 |
1,000,000 | |||
Total debt |
19,000,000 | |||
Less: current portion |
| |||
Total long term debt |
| 19,000,000 | ||
F-8
Year ending December 31, | ||||
2006 |
| | ||
2007 |
| |||
2008 |
| |||
2009 |
| |||
2010 |
| |||
Thereafter |
19,000,000 | |||
Total |
| 19,000,000 | ||
Subordinated
promissory note, issued January 25, 2005
with interest payable annually at a rate of 6.13%. Principal due February 4, 2014 |
| 2,000,000 | ||
Total Subordinated debt |
2,000,000 | |||
Less:
current portion |
| |||
Total subordinated debt |
| 2,000,000 | ||
Year ending December 31, | ||||
2006 |
| | ||
2007 |
| |||
2008 |
| |||
2009 |
| |||
2010 |
| |||
Thereafter |
2,000,000 | |||
Total |
| 2,000,000 | ||
F-9
2006 | ||||
Other liabilities |
||||
Liabilities to creditors |
| 2,176,425 | ||
Lease
Düsseldorf building |
8,300,000 | |||
Liabilities personnel lay off |
1,829,481 | |||
Other liabilities |
1,630,163 | |||
Total other liabilities |
| 13,936,069 | ||
Other provisions |
||||
Provision
for credit business (long term) |
1,929,984 | |||
Long term
Provision |
1,080,000 | |||
Provision restructuring |
1,000,000 | |||
Other provisions |
1,618,175 | |||
Total other provisions |
| 5,628,159 | ||
F-10
Discount Rate |
45 | % | ||
Rate of inflation |
1.5 | % | ||
Rate of pension increases |
1.5 | % |
Vested benefit obligation: |
||||
Actives |
| 545,239 | ||
Vested Terminated |
| |||
Pensioners |
| |||
Total |
| 545,239 | ||
Accumulated benefit obligation |
| 545,239 | ||
Fair value of plan assets |
| |||
Underfunded benefit obligation |
545,239 | |||
Unrecognized transitional amount |
| |||
Unrecognized prior service cost |
| |||
Unrecognized net (gain) or loss |
| |||
Accrued Pension Cost |
| 545,239 | ||
F-11
F-12
Note | 2006 | |||||||
Shareholders equity in accordance with GERMAN GAAP |
| 22,326,508 | ||||||
Items in-/ decreasing net profit: |
||||||||
Impairment on non performing loan portfolio |
(a | ) | (220,000 | ) | ||||
Discount on long term provisions |
(b | ) | 243,824 | |||||
Deferred tax liability |
(c | ) | (97,530 | ) | ||||
Shareholders equity in
accordance with US GAAP |
| 22,252,802 | ||||||
F-13
In Euro | ||||||||
Carrying | Estimated | |||||||
Value | Fair Value | |||||||
Financial assets: |
||||||||
Cash and other short term
Financial instruments |
45,790,403 | 45,790,403 | ||||||
Investments |
13,045 | 13,045 | ||||||
Receivables |
15,765,776 | 15,765,776 | ||||||
Financial liabilities: |
||||||||
Long-term and subordinated debt |
21,000,000 | 20,853,000 |
F-14
(1) | CROWN NORTHCORP INC. (No. 2298568) a company incorporated in the State of Delaware, United States whose principal office is at 1251 Dublin Road, Columbus, OH, 43215, USA (the Seller); and | |
(2) | WESTFALENBANK AG (No. HRB1941) a company registered with the commercial register of the local court in Bochum (the Buyer). |
(A) | The Seller has agreed to sell and the Buyer has agreed to purchase all of the issued share capital in the Company (as hereinafter defined) on the terms set out in this agreement. |
1 | DEFINITIONS | |
In this agreement the following expressions shall bear the following meanings, unless the context otherwise requires: | ||
Company means the company owned by the Seller whose name and other details are set out in Schedule 1; | ||
Completion means the completion of this agreement in accordance with clause 3 hereof; | ||
Completion Date means the date hereof; | ||
Consideration means the sum of 16,567,218; | ||
Dividend Payment means the payment of a dividend of an amount equal to £100,000; | ||
Effective Date means 1 January 2007; | ||
Encumbrances means any mortgage, charge (fixed or floating), pledge, lien, security or other third party right or interest (legal or equitable) including any right of pre-emption, assignment by way of security, reservation of title or any other security interest of any kind however created or arising or any other agreement or arrangement (including a sale and repurchase agreement) having similar effect or restriction over or in respect of the use of the relevant security or right; | ||
Group means the Company and its subsidiary; and | ||
Shares means all the issued shares in the Company. | ||
2 | SALE |
1
2.1 | Upon the terms of this agreement the Seller shall sell and the Buyer shall purchase with effect from the Effective Date the Shares with full title guarantee free from any Encumbrances and together with all accrued benefits and rights attaching thereto but excluding sums set aside for the Dividend Payment. | |
2.2 | The profit of the fiscal year of the Company from and including 1 January 2007 including retained profits of preceding fiscal years, (excluding sums set aside for the Dividend Payment), if any, shall belong to the Buyer only. | |
2.3 | The consideration for the sale and purchase of the Shares shall be the sum of 16,567,218 be paid at Completion into an account nominated by the Seller. | |
3 | COMPLETION | |
3.1 | Completion shall take place on the Completion Date whereupon: |
(a) | the Seller shall deliver to or make available to the Buyer: (i) share transfers in the appropriate form relating to the Shares duly executed by the Seller in favour of the Buyer and share certificates relating to all the Shares; and (ii) a copy of the minutes of a meeting of the board of directors of the Seller authorizing the execution by the Seller of this agreement and all other documents ancillary to it or the transactions contemplated in this agreement and appointing the relevant signatory or signatories to execute this agreement and any such documents on its behalf; and | ||
(b) | upon compliance by the Seller with the provisions of clause 3.1(a) the Buyer shall pay the Consideration to the Seller or as the Seller shall direct. |
3.2 | On the Completion Date the Seller shall procure that the directors of the Company shall hold a board meeting at which the transfer of the Shares to the Buyer shall be approved for registration in the Companys statutory register. | |
4 | WARRANTIES | |
The Seller warrants and represents to the Buyer that the following statements are true and accurate as at the date of this Agreement and as the date upon which the transfer of the Shares becomes valid and binding: | ||
4.1 | the Shares constitute the whole of the allotted and issued share capital of the Company and are fully paid; | |
4.2 | it is the sole legal and beneficial owner of the Shares; | |
4.3 | the Shares are free from all Encumbrances and there is no agreement or commitment given to create an Encumbrance affecting the Shares; | |
4.4 | that it has obtained all corporate authorization and all other applicable governmental, statutory, regulatory or other consents, licences, waivers or exemptions required to empower it to enter into and to perform its obligations |
2
under this agreement and each document to be executed by it at or before Completion pursuant to this agreement; | ||
4.5 | The Company is a company duly incorporated and existing (in accordance with its memorandum and articles of association) under the laws of England and Wales. There are no resolutions in force with regard to any amendment of the memorandum and articles of association of the Company and there are no side arrangements that refer to the memorandum and articles of association of the Company or to the organisation of the Company; | |
4.6 | The Company does not directly or indirectly own shares in any entities, except for the shares in Crown Mortgage Management Limited and Titrisation Belge-Belgische Effectisering SA/NV (the Subsidiaries), and is under no obligation to buy any such shares; | |
4.7 | Neither the Seller nor the Company nor the Subsidiaries are subject to any insolvency proceedings and, to the knowledge of the Seller, no person has taken or threatened any step, legal proceeding or other procedure with a view to the appointment of an administrator, whether out of court or otherwise, in relation to the Seller, the Company and/or the Subsidiaries; | |
4.8 | As far as the Seller is aware the Company and the Subsidiaries have duly and timely filed all tax returns and all taxes and social security contributions owed by the Company and by the Subsidiaries have been paid by their due dates; | |
4.9 | There are no litigation or administrative proceedings pending, or, to the knowledge of the Seller, threatened, against the Seller that relate to the Shares or to the Company or the Subsidiaries which, if adversely determined would have a material effect upon the Company and/or the Subsidiary; | |
4.10 | The Company and the Subsidiaries have all material public permits required for the operation and the continuance of the current business operations. To the best of the Sellers knowledge, no person has threatened either a withdrawal or a restriction of such permits; | |
4.11 | To the best of the Sellers knowledge, all information made available to the Buyer by the Seller, the Company and the Subsidiaries prior to the date of this Agreement (with the exception of any economic forecast relating to any company within the Group) is, in relation to the Shares, the Company and the Subsidiaries or their relevant business operations which would be relevant to the information specifically provided or which the Buyer, for the purposes of its assessment, should have been aware of at the date of signature, complete, accurate and not misleading in all material respects and there are no material omissions relevant to the operations of the Company and the Subsidiaries; | |
4.12 | Neither the Company nor the Subsidiaries is the owner of any real estate; and | |
4.13 | It is specifically stated and agreed that the Seller has not made, and the Buyer has not relied on, any other expressed or implied warranties regarding the Shares, the Company and/or the Subsidiaries other than the warranties in this clause 4. |
3
5 | GENERAL | |
5.1 | Following Completion the Seller shall from time to time forthwith upon request from the Buyer at its own expense do or procure the doing of all such acts and/or execute or procure the execution of all such documents in a form reasonably satisfactory to the Buyer for the purpose of vesting in the Buyer the full legal and beneficial title to the Shares or otherwise to give the Buyer and/or its nominee the full benefit of this agreement, subject to any restriction or limitation in this agreement on the extent of any partys obligations under this agreement. | |
5.2 | The terms of this agreement (insofar as not performed at Completion and subject as specifically otherwise provided in this agreement) shall continue in force after and notwithstanding Completion. | |
5.3 | This agreement (together with any documents referred to herein) constitutes the entire agreement between the parties hereto in connection with the subject matter hereof. | |
5.4 | This agreement and all rights and benefits hereunder shall be binding upon and enure for the benefit of successors of the parties but shall not be assignable at law of in equity without the prior written consent of the other party hereto. | |
5.5 | Each of the parties shall bear its own legal, accountancy and other costs, charges and expenses connected with the sale and purchase of the Shares and any other matters contemplated by this agreement. | |
5.6 | 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 in any way affect or impaired thereby. | |
5.7 | The Contracts (Rights of Third Parties) Act 1999 shall not apply to this agreement and no rights or benefits expressly or impliedly conferred by it shall be enforceable under that act against the parties to it by any other person. | |
5.8 | This agreement (and any dispute, controversy, proceedings or claims of whatever nature arising out of or in any way relating to this agreement or its formation) shall be governed by and construed in accordance with English law and each of the parties irrevocably agrees that the courts of England shall have exclusive jurisdiction to hear and decide any suit, action or proceedings and/or settle any disputes, which may arise out of or in connection with this agreement and, for these purposes, each party irrevocably submits to the jurisdiction of the courts of England. |
4
Signed by
|
) | |||
for and on behalf of
|
) | |||
CROWN NORTHCORP
|
) | |||
INC.
|
) | |||
Signed by
|
) | |||
for and on behalf of
|
) | |||
WESTFALENBANK AG
|
) |
5
Company Name
|
Crown NorthCorp Limited | |||
Registered Number
|
03431892 | |||
Country of Incorporation
|
United Kingdom | |||
Issued Share Capital
|
500 shares of £1.00 each | |||
Authorised Share Capital
|
1,000 shares of £1.00 each |
6
November 30, 2006 | November 30, 2006 | adjustments | Combined | |||||||||||||||||||||||||
Crown | Wesfalenbank AG | dr | cr | as adjusted | ||||||||||||||||||||||||
CURRENT ASSETS: |
||||||||||||||||||||||||||||
Cash and cash equivalents |
$ | 3,336,060 | $ | 53,177,543 | $ | 56,513,603 | ||||||||||||||||||||||
Accounts receivable |
2,853,166 | 2,853,166 | ||||||||||||||||||||||||||
Prepaid expenses and other assets |
1,368,440 | | 1,368,440 | |||||||||||||||||||||||||
Total current assets |
7,557,666 | 53,177,543 | 60,735,209 | |||||||||||||||||||||||||
PROPERTY AND EQUIPMENT Net |
455,128 | 1,492,427 | 238,608 | a | 2,186,163 | |||||||||||||||||||||||
RESTRICTED CASH |
2,764,587 | | 2,764,587 | |||||||||||||||||||||||||
INTANGIBLE ASSETS |
539,994 | 3,866,850 | a | 4,406,844 | ||||||||||||||||||||||||
OTHER ASSETS |
| |||||||||||||||||||||||||||
Investment in partnerships and joint ventures |
35,033,989 | 16,814 | 34,247,133 | a | 803,670 | |||||||||||||||||||||||
Trust fund assets |
12,658,584 | 12,658,584 | ||||||||||||||||||||||||||
Mortgage loans, net of reserves |
659,434 | 13,081,914 | 286,082 | b | 13,455,266 | |||||||||||||||||||||||
Loan
servicing rights net |
4,532,137 | | 4,532,137 | |||||||||||||||||||||||||
Capitalized loan cost net |
1,629,833 | 1,858,207 | c | 3,488,040 | ||||||||||||||||||||||||
Capitalized software cost net |
415,699 | | 415,699 | |||||||||||||||||||||||||
Deposits |
41,824 | 41,824 | ||||||||||||||||||||||||||
Other |
| 4,980,998 | 4,980,998 | |||||||||||||||||||||||||
Total other assets |
42,312,916 | 30,738,310 | 40,376,218 | |||||||||||||||||||||||||
TOTAL |
$ | 53,090,297 | $ | 85,948,274 | $ | 110,469,021 | ||||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS EQUITY |
||||||||||||||||||||||||||||
CURRENT LIABILITIES |
||||||||||||||||||||||||||||
Accounts payable |
2,001,997 | 7,838,684 | 9,840,681 | |||||||||||||||||||||||||
Convertible notes payable |
400,000 | | 400,000 | |||||||||||||||||||||||||
Accrued expenses: |
| | ||||||||||||||||||||||||||
Interest |
252,923 | 252,923 | ||||||||||||||||||||||||||
Other |
4,849,123 | 402,975 | 5,252,098 | |||||||||||||||||||||||||
Total current liabilities |
7,504,043 | 8,241,659 | 15,745,702 | |||||||||||||||||||||||||
LONG-TERM OBLIGATIONS: |
||||||||||||||||||||||||||||
Allowance for loan losses & other |
243,076 | 9,135,735 | 9,378,811 | |||||||||||||||||||||||||
Notes payable |
31,750,000 | 24,182,060 | 1,983,640 | a | 53,948,420 | |||||||||||||||||||||||
Trust fund liabilities |
| 12,765,817 | 12,765,817 | |||||||||||||||||||||||||
31,993,076 | 46,083,612 | 76,093,048 | ||||||||||||||||||||||||||
Total long-term obligations |
| |||||||||||||||||||||||||||
SUBORDINATED CAPITAL |
2,577,900 | 2,577,900 | ||||||||||||||||||||||||||
SHAREHOLDERS EQUITY: |
138,328 | | 138,328 | |||||||||||||||||||||||||
Common stock |
| | | |||||||||||||||||||||||||
Additional paid-in capital |
20,206,845 | 40,350,337 | 40,350,337 | a | 1,858,207 | c | 22,065,052 | |||||||||||||||||||||
Accumulated comprehensive income |
511,429 | | 378,030 | a | 889,459 | |||||||||||||||||||||||
Accumulated deficit |
(7,086,366 | ) | (11,305,234 | ) | 286,082 | b | 11,814,272 | a | (6,863,410 | ) | ||||||||||||||||||
Treasury stock, at cost |
(177,058 | ) | | (177,058 | ) | |||||||||||||||||||||||
Total shareholders equity |
13,593,178 | 29,045,103 | 16,052,371 | |||||||||||||||||||||||||
TOTAL |
$ | 53,090,297 | $ | 85,948,274 | $ | 110,469,021 | ||||||||||||||||||||||
November 30, 2006 | November 30, 2006 | adjustments | Combined | |||||||||||||||||||||||||
Crown | Westfalenbank AG | dr | cr | as adjusted | ||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||
Management fees |
$ | 14,843,046 | $ | | $ | 14,843,046 | ||||||||||||||||||||||
Disposition fees |
3,971,399 | 329,971 | 4,301,370 | |||||||||||||||||||||||||
Servicing fees |
5,117,788 | 2,650,081 | 1,371,443 | a | 6,396,426 | |||||||||||||||||||||||
Interest income |
36,468 | 9,147,214 | 8,881,322 | a | 302,360 | |||||||||||||||||||||||
Other |
306,409 | 23,695,669 | 20,735,626 | a | 3,266,452 | |||||||||||||||||||||||
Total revenues |
24,275,110 | 35,822,935 | 30,988,391 | 29,109,654 | ||||||||||||||||||||||||
EXPENSES: |
||||||||||||||||||||||||||||
Personnel |
6,794,873 | 26,062,742 | 24,054,349 | a | 8,803,266 | |||||||||||||||||||||||
Occupancy, insurance and other |
13,174,019 | 19,865,089 | 272,941 | b | 17,641,022 | a | 15,671,027 | |||||||||||||||||||||
Interest |
501,033 | | 501,033 | |||||||||||||||||||||||||
Write-off mortgage servicing rights |
165,110 | | 165,110 | |||||||||||||||||||||||||
Depreciation and amortization |
671,628 | 1,313,698 | | 1,217,027 | a | 768,299 | ||||||||||||||||||||||
Total expenses |
21,306,663 | 47,241,529 | 272,941 | 42,912,398 | 25,908,735 | |||||||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
2,968,447 | (11,418,594 | ) | 30,715,450 | (42,912,398 | ) | 3,200,919 | |||||||||||||||||||||
INCOME TAX (BENEFIT) |
892,345 | (100,218 | ) | 109,735 | a | 901,862 | ||||||||||||||||||||||
NET INCOME (LOSS) |
$ | 2,076,102 | $ | (11,318,376 | ) | $ | 30,605,715 | $ | (42,912,398 | ) | $ | 2,299,057 | ||||||||||||||||
OTHER COMPREHENSIVE INCOME |
| |||||||||||||||||||||||||||
Foreign currency translation adjustment |
454,614 | | 378,030 | 832,644 | ||||||||||||||||||||||||
COMPREHENSIVE INCOME (LOSS) |
$ | 2,530,716 | $ | (11,318,376 | ) | $ | 30,605,715 | $ | (42,534,368 | ) | $ | 3,131,701 | ||||||||||||||||
Basic earnings (loss) per share |
$ | 0.09 | $ | 0.11 | ||||||||||||||||||||||||
Diluted earnings (loss) per share |
$ | 0.09 | $ | 0.11 | ||||||||||||||||||||||||
Basic shares used in per share computation |
29,521,098 | 29,521,098 | ||||||||||||||||||||||||||
Diluted shares used in per share computation |
29,521,098 | 29,521,098 |
b | To recognize differences between US GAAP and German GAAP due to differences in accounting for pension related costs and carrying values of non-performing loan portfolios. | |
c | $1,834,838 value assigned to 5,652 warrants issued in connection with the purchase of Westfalenbank AG by Crown Westfalen BV Valued using the Black-Scholes option valuation model using the following assumptions: fair value of stock $1,070 (841 Euro);exercise price $1,070 (841 Euro); expected life of 5 years; expected volatility of 21.99% and a risk free return of 4.63% |
Page | ||||
1. INTERPRETATION |
1 | |||
2. AMENDMENTS TO ORIGINAL FACILITY AGREEMENT |
2 | |||
3. TRANSACTION SECURITY DOCUMENTS |
3 | |||
4. REPRESENTATIONS AND WARRANTIES |
3 | |||
5. FEES, COSTS AND EXPENSES |
3 | |||
6. MISCELLANEOUS |
4 | |||
7. GOVERNING LAW |
4 | |||
8. ENFORCEMENT |
4 | |||
9. THIRD PARTIES |
5 | |||
SCHEDULE 1 ORIGINAL GUARANTORS |
6 | |||
SCHEDULE 2 CONDITIONS PRECEDENT |
7 | |||
SCHEDULE 3 FACILITY AGREEMENT |
9 |
i
(1) | CROWN WESTFALEN LLC a limited liability corporation incorporated in the State of Delaware whose principal office is at 1251 Dublin Road, Columbus, Ohio 43215, U.S.A. (the Borrower); | |
(2) | CROWN NORTHCORP INC. a company incorporated in the State of Delaware whose principal office is at 1251 Dublin Road, Columbus, Ohio 43215, U.S.A. (the Company); | |
(3) | THE SUBSIDIARIES of the Company listed in Schedule 1 (The Original Guarantors) to this Deed as guarantors (together with the Company, the Original Guarantors); | |
(4) | CREDIT SUISSE, LONDON BRANCH as mandated lead arranger (the Arranger); | |
(5) | CREDIT SUISSE, LONDON BRANCH as lender (the Original Lender); | |
(6) | CREDIT SUISSE, LONDON BRANCH as facility agent of the other Finance Parties (the Agent); | |
(7) | CREDIT SUISSE, LONDON BRANCH as issuing bank (the Issuing Bank); and | |
(8) | CREDIT SUISSE, LONDON BRANCH as security agent for the Finance Parties (the Security Agent). |
(A) | The Borrower, the Company, the Original Guarantors, the Arranger, the Original Lender, the Agent, the Issuing Bank and the Security Agent entered into a facility agreement dated 31 July, 2006 (the Original Facility Agreement). | |
(B) | The parties hereto have agreed to enter into this amendment and restatement deed (the Deed) in order to amend and restate the terms of the Original Facility Agreement (as restated and amended thereby, the A&R Facility Agreement) in the manner set out below. |
1. | INTERPRETATION | |
In this Deed:- |
(a) | words and expressions defined in the A&R Facility Agreement shall, unless otherwise defined herein, have the same meaning when used herein; | ||
(b) | the provisions of Clause 1.2 (Construction) of the A&R Facility Agreement shall also apply in the interpretation hereof as if expressly set out herein; and |
1
(c) | Effective Date means the business day on which the Agent shall have confirmed in writing that it has received all the documents listed in Schedule 2 to this Deed and that each such document is, in form and substance, satisfactory to the Agent. |
2. | AMENDMENTS TO ORIGINAL FACILITY AGREEMENT |
(a) | The parties hereto agree that with effect from the Effective Date the Original Facility Agreement shall be amended and restated to reflect the following arrangements: |
(i) | the Acquiror shall be released as a Guarantor under the Original Facility Agreement; | ||
(ii) | the Acquiror shall be released from its obligations under the Dutch Deed of Disclosed Pledge of Claims dated 16th August 2006; and | ||
(iii) | the Acquiror shall grant a new Dutch pledge over the Dividend Account, |
and such amendment and restatement shall be deemed to take effect in the form set out in Schedule 3. | |||
(b) | Subject to the terms of this Deed, the A&R Facility Agreement will remain in full force and effect and as from the Effective Date references in the A&R Facility Agreement to this Agreement hereunder, herein and like terms or to any provision of the A&R Facility Agreement shall be construed as a reference to the A&R Facility Agreement, or such provision, as amended by this Deed. | ||
(c) | Except as otherwise provided in this Deed, the Finance Documents remain in full force and effect and, in particular, without limitation each Original Guarantor (other than the Acquiror) hereby confirms that notwithstanding the release of the Acquiror from its guarantee and other obligations under the A&R Facility Agreement: |
(i) | such Original Guarantors guarantee remains in full force and effect; | ||
(ii) | the Security granted by such Original Guarantors remains in full force and effect; | ||
(iii) | the Acquiror is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and | ||
(iv) | each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or |
2
otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Acquiror. |
3. | TRANSACTION SECURITY DOCUMENTS | |
The Acquiror shall and the Company shall procure that the Acquiror shall execute and deliver to the Agent the following Transaction Security Documents: |
(a) | a Dutch deed of release to be entered into between the Acquiror and the Security Trustee pursuant to which the right of pledge and the obligations of the Acquiror under the Dutch Deed of Disclosed Registered Claims dated 16th August 2006 referred to as the Dutch Charge over Bank Accounts and the Dutch Charge over Inter-Company Receivables in paragraph 8 of Part III of Schedule 2 to the Original Facility Agreement shall be released; and | ||
(b) | a Dutch pledge over the Dividend Account to be entered into between the Acquiror and the Security Trustee pursuant to which the Acquiror shall pledge its interest in the Dividend Account in favour of the Security Trustee as referred to in paragraph 8 of Part III of Schedule 2 to the A&R Facility Agreement, |
as soon as possible and in any event within 10 Business Days after the date of this Deed, each in a form and substance satisfactory to the Agent. | ||
4. | REPRESENTATIONS AND WARRANTIES | |
Each of the Obligors hereby agrees that each of the Repeating Representations are deemed to be made on the date of this Deed and on the Effective Date with reference to the facts and circumstances existing at the date the Repeating Representations are deemed to be made (except for those contained in paragraphs (a) to (e) of Clause 20.31 (Original Financial Statement) of the A&R Facility Agreement where subsequent financial statements have been delivered under the A&R Facility Agreement). | ||
5. | FEES, COSTS AND EXPENSES |
(a) | The Borrower shall within 5 Business Days of demand of either of the Agent or the Security Agent, reimburse the Agent or the Security Agent for all costs and expenses (including legal fees and VAT) reasonably incurred by the Agent or the Security Agent in the negotiation, preparation and execution of this Deed and the completion of the transactions contemplated herein. | ||
(b) | The Borrower shall within 5 Business Days of demand of the Agent, reimburse each of the Finance Parties for all costs and expenses (including legal fees and VAT) properly incurred in or in connection with the preservation and/or enforcement of any of the rights of the Finance Parties or any of them under this Deed. |
3
6. | MISCELLANEOUS |
(a) | Clauses 31 (Notices), 33 (Partial Invalidity) and 37 (Counterparts) of the A&R Facility Agreement shall be deemed incorporated in this Deed (with such conforming amendments as the context requires) as if set out herein. | ||
(b) | The Agent and the Borrower confirm that this Deed shall be designated as a Finance Document for the purposes of the A&R Facilty Agreement. |
7. | GOVERNING LAW | |
This Agreement is governed by English law. | ||
8. | ENFORCEMENT | |
8.1 | Jurisdiction |
(a) | The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement) (a Dispute). | ||
(b) | The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary. | ||
(c) | This Clause 8.1 is for the benefit of the Finance Parties and the Secured Parties only. As a result, no Finance Party or Secured Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties and Secured Parties may take concurrent proceedings in any number of jurisdictions. |
8.2 | Service of process |
(a) | Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales) and the Acquiror: |
(i) | irrevocably appoints Crown NorthCorp Limited as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document and Crown NorthCorp Limited by its execution of this Agreement, accepts that appointment; and | ||
(ii) | agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned. |
(b) | If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Company (on behalf of all the Obligors) must immediately (and in any event within 14 days of such event taking place) appoint another agent on terms acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose. |
4
(c) | Crown Westfalen LLC, Crown NorthCorp Inc. and the Acquiror, each expressly agrees and consents to the provisions of this Clause 8 and Clause 7 (Governing law). |
9. | THIRD PARTIES | |
A person who is not a party to this Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms. |
5
Name of Original Guarantor | Registration number (or equivalent, if any) | |
Crown NorthCorp Inc. |
2298568 | |
Crown Westfalen B.V. having its corporate
seat in Amsterdam, The Netherlands |
06053940 | |
Crown Northcorp Limited |
03431892 | |
Crown Asset Management Limited |
03802849 | |
Crown Mortgage Management Limited |
00912411 | |
Regal Mortgages LLP |
OC300246 |
6
1. | A certified copy of the constitutional documents of each of the Company, the Borrower, each of the other Obligors and of each member of the Group that is not an Obligor, whose shares are charged or pledged under the Transaction Security Documents or a certificate of the Borrower confirming that the constitutional documents delivered pursuant to the Original Facility Agreement remain in effect in such form unamended. | |
2. | A copy of a resolution of the board of directors of each of the Company, the Borrower and each of the other Obligors approving the terms of and transactions contemplated by the Deed, authorising a specified person or persons to execute the Deed and any other documents required in connection with the transactions contemplated thereby or a certificate of the Borrower confirming that the resolutions delivered pursuant to the Original Facility Agreement remain valid in relation to the Deed. | |
3. | A specimen of the signature of each person authorised by the resolution referred to in paragraph 2 above or a certificate of the Borrower confirming that the specimens of the signatures delivered pursuant to the Original Facility remain in effect and have not been superseded. | |
4. | A certificate of an authorised signatory of each of the Company, the Borrower and each of the other Obligors certifying that each copy document relating to it specified in this Schedule 2 is correct, complete and in full force and effect as at the date no earlier that the date of the Deed or a certificate of the Borrower confirming that the certificates delivered pursuant to the Original Facility Agreement remain valid in relation to the Deed. | |
5. | A copy of a good standing certificate (including verification of tax status) with respect to the Company and the Borrower, issued as of a recent date of the date of the A&R Facility Agreement by the Secretary of State or other appropriate official of the jurisdiction of incorporation or organisation of the Company and the Borrower and the equivalent, if applicable, in other relevant jurisdictions. | |
6. | The following legal opinions, each addressed to the Agent, the Security Agent and any person who becomes a Lender: |
(a) | legal opinions of Shearman & Sterling (London) LLP and Shearman & Sterling LLP, legal adviser to the Agent and the Arranger as to matters of English law; | ||
(b) | a legal opinion of De Brauw Blackstone Westbroek, legal adviser to the Agent and the Arranger as to matters of Dutch law; and | ||
(c) | a legal opinion of Dechert LLP, legal advisor to the Company and the Borrower as to matters of US law. |
7. | A copy of any other governmental, shareholder and third party Authorisation or other document, opinion or assurance which the Agent considers to be necessary or |
7
desirable in connection with the entry into and performance of the transactions contemplated by the Deed or for the validity and enforceability of the Deed. | ||
8. | The Deed executed by each of the Company, the Borrower, the Acquiror and the other Obligors. | |
9. | At least two originals of the Transaction Security Documents executed by the Acquiror as specified below: |
(a) | Dutch Deed of Release (releasing the Dutch Deed of Disclosed Registered Claims dated 16 August 2006); and | ||
(b) | Dutch Pledge over Dividend Account. |
10. | A copy of all notices required to be sent under such Transaction Security Documents executed by the requisite signatory duly acknowledged by the addressees and of all third party consents required in connection with the creation, perfection or registration of such Transaction Security Documents. |
8
Page | ||||||
1. | DEFINITIONS AND INTERPRETATION |
1 | ||||
2. | THE FACILITY |
28 | ||||
3. | PURPOSE |
29 | ||||
4. | CONDITIONS OF UTILISATION |
29 | ||||
5. | UTILISATION LOANS |
30 | ||||
6. | UTILISATION THE LETTER OF CREDIT |
30 | ||||
7. | LETTER OF CREDIT |
32 | ||||
8. | REPAYMENT |
35 | ||||
9. | PREPAYMENT AND CANCELLATION |
37 | ||||
10. | INTEREST |
42 | ||||
11. | INTEREST PERIODS |
44 | ||||
12. | CHANGES TO THE CALCULATION OF INTEREST |
44 | ||||
13. | FEES |
45 | ||||
14. | TAX GROSS UP AND INDEMNITIES |
47 | ||||
15. | INCREASED COSTS |
52 | ||||
16. | OTHER INDEMNITIES |
53 | ||||
17. | MITIGATION BY THE LENDERS |
55 | ||||
18. | COSTS AND EXPENSES |
55 | ||||
19. | GUARANTEE AND INDEMNITY |
57 | ||||
20. | REPRESENTATIONS |
61 | ||||
21. | INFORMATION UNDERTAKINGS |
71 | ||||
22. | FINANCIAL COVENANTS |
79 | ||||
23. | GENERAL UNDERTAKINGS |
88 | ||||
24. | EVENTS OF DEFAULT |
103 | ||||
25. | CHANGES TO THE LENDERS AND OBLIGORS |
110 | ||||
26. | ROLE OF THE AGENT, SECURITY AGENT, THE
ARRANGER, THE ISSUING BANK AND OTHERS |
117 | ||||
27. | CONDUCT OF BUSINESS BY THE FINANCE PARTIES |
130 | ||||
28. | SHARING AMONG THE FINANCE PARTIES |
130 | ||||
29. | PAYMENT MECHANICS |
133 | ||||
30. | SET-OFF |
136 | ||||
31. | NOTICES |
136 | ||||
32. | CALCULATIONS AND CERTIFICATES |
138 | ||||
33. | PARTIAL INVALIDITY |
138 | ||||
34. | REMEDIES AND WAIVERS |
139 | ||||
35. | AMENDMENTS AND WAIVERS |
139 |
i
Page | ||||||
36. | CONFIDENTIALITY |
140 | ||||
37. | COUNTERPARTS |
140 | ||||
38. | PATRIOT ACT |
141 | ||||
39. | GOVERNING LAW |
142 | ||||
40. | ENFORCEMENT |
142 |
ii
(1) | CROWN WESTFALEN LLC a limited liability corporation incorporated in the State of Delaware whose principal office is at 1251 Dublin Road, Columbus, Ohio 43215, U.S.A. (the Borrower); | |
(2) | CROWN NORTHCORP INC. a company incorporated in the State of Delaware whose principal office is at 1251 Dublin Road, Columbus, Ohio 43215, U.S.A. (the Company); | |
(3) | THE SUBSIDIARIES of the Company listed in Part 1 of Schedule 1 (The Original Parties) as guarantors (together with the Company, the Original Guarantors); | |
(4) | CREDIT SUISSE, LONDON BRANCH as mandated lead arranger (the Arranger); | |
(5) | CREDIT SUISSE, LONDON BRANCH as lender (the Original Lender); | |
(6) | CREDIT SUISSE, LONDON BRANCH as facility agent of the other Finance Parties (the Agent); | |
(7) | CREDIT SUISSE, LONDON BRANCH as issuing bank (the Issuing Bank); and | |
(8) | CREDIT SUISSE, LONDON BRANCH as security agent for the Finance Parties (the Security Agent). |
1. | DEFINITIONS AND INTERPRETATION | |
1.1 | Definitions |
In this Agreement: | ||
Acceptable Bank means: |
(a) | a bank or financial institution which has a rating for its long-term unsecured and non-credit enhanced debt obligations of AA- or higher by Standard & Poors Rating Services, a division of the McGraw-Hill Companies, Inc., or AA- or higher by Fitch Ratings Ltd and Aa3 or higher by Moodys Investor Services Limited; or | ||
(b) | any other bank or financial institution approved by the Agent. |
Accession Letter means a document substantially in the form set out in Schedule 7 (Form of Accession Letter). |
1
Accountants Report means the report relating to the Target prepared by PriceWaterhouseCoopers LLP, in the agreed form and addressed to and/or capable of being relied upon by the Arranger and the other Finance Parties. | ||
Accounting Principles means the accounting principles, standards and practices generally accepted from time to time in the US. | ||
Acquiror means Crown Westfalen B.V. (formerly known as Sabrosa Holding B.V.) a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) incorporated under Dutch law having its corporate seat in Amsterdam, the Netherlands. | ||
Acquiror Group means the Acquiror and its Subsidiaries for the time being (including, from the Closing Date, the Target and its Subsidiaries). | ||
Acquisition means the acquisition of the Target Shares on the terms of the Acquisition Agreement. | ||
Acquisition Agreement means the share purchase and transfer agreement relating to the acquisition of the Target Shares and made between, amongst others, the Company, the Acquiror as purchaser and the Vendor, in the agreed form. | ||
Acquisition Documents means the Acquisition Agreement and all other documents executed pursuant to the Acquisition Agreement or designated as an Acquisition Document by the Agent and the Borrower. | ||
Acquisition Signing Date means the date on which the Acquisition Agreement is signed. | ||
Additional Cost Rate has the meaning given to it in Schedule 4 (Mandatory Cost formulae). | ||
Additional Guarantor means a company which becomes a Guarantor in accordance with Clause 25 (Changes to the Lenders and Obligors). | ||
Affiliate means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company. | ||
Anti-Terrorism Laws means any laws, to which any member of the Group is subject, relating to terrorism or money laundering. | ||
Assignment Agreement means an agreement substantially in the form set out in Schedule 6 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee. | ||
Auditors means Deloitte & Touche or any amalgamation of the same or such other firm of accountants of international repute as may be approved in advance by the Agent (such approval not to be unreasonably withheld or delayed). | ||
Authorisation means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration. |
2
Availability Period means the period from and including the date of this Agreement to and including 31 December, 2006. | ||
Available Commitment means a Lenders Commitment minus: |
(a) | the amount of its participation in any outstanding Utilisations; and | ||
(b) | in relation to any proposed Utilisation, the amount of its participation in any other Utilisations that are due to be made on or before the proposed Utilisation Date. |
Available Facility means the aggregate for the time being of each Lenders Available Commitment. | ||
Base Case Model means the financial model and business plan in the agreed form, assuming completion of the Acquisition. | ||
Break Costs means the amount (if any) by which: |
(a) | the interest (other than the Margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period |
exceeds: |
(b) | the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period. |
BT Treasury Letter has the meaning given to it in the definition of Structure Memorandum below. | ||
Budget means: |
(a) | in relation to the period from 17 July 2006 to 31 December 2006, the Base Case Model; and | ||
(b) | in relation to any other period, any budget delivered by the Company to the Agent in respect of that period pursuant to Clause 21.4 (Budget). |
Business Day means a day (other than a Saturday or Sunday) on which banks are open for general business in London and New York and which is a TARGET Day. | ||
Capital and Liquidity Report means a report on capital requirements under the German Banking Act and the liquidity requirements under the principles of liquidity for banks (Grundsatze uber die Eigemittel und die Liquiditat der Kreditinstitute) prepared by PriceWaterhouseCoopers LLP in an email dated 21 |
3
July, 2006, in the agreed form, and addressed to and/or capable of being relied on by the Arranger and the other Finance Parties. | ||
Capitalised Interest has the meaning given to in Clause 10.5 (Capitalisation of Interest). | ||
Capitalisation Notice means a notice substantially in the form set out in Part II of Schedule 3 (Requests) given in accordance with Clause 11 (Interest Periods). | ||
Cash Equivalent Investments means at any time: |
(a) | certificates of deposit maturing within one year after the relevant date of calculation and issued by an Acceptable Bank; | ||
(b) | any investment in marketable debt obligations issued or guaranteed by the government of the United States of America, the United Kingdom or any member state or participating member state of the European Economic Community provided that such member state was a member state before 1st May 2004 or any or by an instrumentality or agency of any of them having an equivalent credit rating, maturing within one year after the relevant date of calculation and not convertible or exchangeable to any other security; | ||
(c) | commercial paper not convertible or exchangeable to any other security: |
(i) | for which a recognised trading market exists; | ||
(ii) | issued by an issuer incorporated in the United States of America, the United Kingdom or any member state or participating member state of the European Economic Community provided that such member state was a member state before 1st May 2004; | ||
(iii) | which matures within one year after the relevant date of calculation; and | ||
(iv) | which has a credit rating of either A-1 or higher by Standard & Poors Rating Services, a division of the McGraw-Hill Companies, Inc., or F-1 or higher by Fitch Ratings Ltd or P-1 or higher by Moodys Investor Services Limited, or, if no rating is available in respect of the commercial paper, the issuer of which has, in respect of its long-term unsecured and non-credit enhanced debt obligations, an equivalent rating; |
(d) | sterling bills of exchange eligible for rediscount at the Bank of England and accepted by an Acceptable Bank (or their dematerialised equivalent) or bills of exchange issued in the United States of America or the United Kingdom any member state or participating member state of the European Economic Community provided that such member state was a member state before 1st May 2004, eligible for rediscount at the relevant central bank and accepted by an Acceptable Bank (or their dematerialised equivalent); | ||
(e) | any investment accessible within 30 days in money market funds which have a credit rating of either A-1 or higher by Standard & Poors Rating Services, a |
4
division of the McGraw-Hill Companies, Inc., or F-1 or higher by Fitch Rating Ltd or P-1 or higher by Moodys Investor Services Limited and which invest substantially all their assets in securities of the types described in paragraphs (a) to (c) above; or | |||
(f) | any other debt security approved by the Majority Lenders, |
in each case to which any member of the Group is beneficially entitled at that time and which is not issued or guaranteed by any member of the Group or subject to any Security (other than one arising under the Security Documents). |
Change of Control means: |
(a) | Ron E. Roark ceases to control directly or indirectly the Company; | ||
(b) | following the Closing Date, the Target ceases to be a wholly owned Subsidiary of the Company; or | ||
(c) | following the date of this Agreement, the Borrower ceases to be a wholly owned Subsidiary of the Company. |
For the purposes of this definition: |
(i) | control of the Company means: |
(A) | the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to: |
(1) | cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general shareholder meeting of the Company; or | ||
(2) | appoint or remove all, or the majority, of the directors or other equivalent officers of the Company; or | ||
(3) | give directions or cause directions to be given with respect to the operating and financial policies of the Company with which the directors or other equivalent officers of the Company are obliged to comply; or | ||
(4) | in the case of a partnership, the power to appoint or replace the general partner or the partner managing the partnership; and/or |
(B) | the holding and owning beneficially of more than 50% of the issued share capital of the Company (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital). |
(ii) | acting in concert means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition by any of them, either directly or indirectly, of shares in the Company, to obtain or consolidate control of the Company. |
5
Charged Property means all of the assets of the Obligors which from time to time are, or are expressed to be, the subject of the Transaction Security. | ||
Closing means the completion of the Acquisition in accordance with the Acquisition Documents and the Structure Memorandum. | ||
Closing Date means the date on which Closing takes place. | ||
Combined Dutch Parallel Debt has the meaning given to it in Clause 8.4(b)(i). | ||
Commitment means: |
(a) | in relation to an Original Lender, the amount set opposite its name under the heading Commitment in Part II of Schedule 1 (The Original Parties) and the amount of any other Commitment transferred to it under this Agreement; and | ||
(b) | in relation to any other 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. |
Compliance Certificate means a certificate substantially in the form set out in Schedule 8 (Form of Compliance Certificate). | ||
Confidentiality Undertaking means a confidentiality undertaking substantially in a recommended form of the LMA or in any other form agreed between the Company and the Agent. | ||
Default means an Event of Default or any event or circumstance specified in Clause 24 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default. | ||
Delegate means any delegate, agent, attorney or co-trustee appointed by the Security Agent. | ||
Disruption Event means either or both of: |
(a) | a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or | ||
(b) | the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party: |
(i) | from performing its payment obligations under the Finance Documents; or |
6
(ii) | from communicating with other Parties in accordance with the terms of the Finance Documents, |
and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted. |
Dividend Account means the Euro dividend account with Citco Nederland N.V. Bank, Account Number 0635978555 charged in favour of the Finance Parties under the Dutch Pledge over Dividend Account to be granted by the Acquiror into which the Acquiror will pay all dividends and other profit distributions received in cash from the Target and all other Subsidiaries. | ||
Dutch Parallel Debt means, in relation to an Underlying Debt (and subject to Clause 8.4(b) (Fall-back)), an obligation to pay to the Security Agent an amount equal to (and in the same currency as) the amount of that Underlying Debt. | ||
Engagement Letter means the letter or letters dated on or about the date of this Agreement between the Arranger, the Borrower and the Company in relation to the arrangement of the Facility and other matters. | ||
Environmental Claim means any claim, proceeding, formal notice or investigation by any person in respect of any Environmental Law. | ||
Environmental Law means any applicable law or regulation which relates to the pollution or protection of the environment, harm to or the protection of human health, the condition of the workplace or any emission or substance capable of causing harm to any living organism or the environment. | ||
Environmental Permit means any permit and other Authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of any member of the Group conducted on or from the properties owned or used by any member of the Group. | ||
ERISA means the Employee Retirement Income Security Act of 1974 of the United States of America, as amended from time to time, and any applicable regulations promulgated thereunder. | ||
ERISA Affiliate, with respect to any Obligor, means any person that for the purposes of Title IV of ERISA is from time to time a member of the controlled group of any Obligor or under common control with any Obligor within the meaning of section 414 of the Internal Revenue Code. | ||
ERISA Event means: |
(a) | (i) | the occurrence of a reportable event, within the meaning of section 4043(c) of ERISA, with respect to any Plan unless the 30-day notice requirement with respect to such event has been waived by the PBGC; or | |
(ii) | the requirements of section 4043(b) of ERISA applied with respect to a contributing sponsor, as defined in section 4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9), (10), (11), (12) or (13) |
7
of section 4043(c) of ERISA is reasonably expected to occur with respect to such Plan within the following 30 days; |
(b) | the application for a minimum funding waiver with respect to a Plan; | ||
(c) | the provision by the administrator of any Plan of a notice of intent to terminate such Plan pursuant to section 4041(a)(2) of ERISA (including any such notice with respect to a plan amendment referred to in section 4041(e) of ERISA); | ||
(d) | the cessation of operations at a facility of any Obligor or any ERISA Affiliate in the circumstances described in section 4062(e) of ERISA; | ||
(e) | the withdrawal by any Obligor or any ERISA Affiliate from a Plan during a plan year for which it was a substantial employer, as defined in section 4001(a)(2) of ERISA; | ||
(f) | the conditions for imposition of a lien under section 302(f) of ERISA shall have been met with respect to any Plan; | ||
(g) | the adoption of an amendment to a Plan requiring the provision of security to such Plan pursuant to section 307 of ERISA; or | ||
(h) | the institution by the PBGC of proceedings to terminate a Plan pursuant to section 4042 of ERISA, or the occurrence of any event or condition described in section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, such Plan. |
EURIBOR means, in relation to any Loan or for determining a Discount Rate: |
(a) | the applicable Screen Rate; or | ||
(b) | (if no Screen Rate is available for the Interest Period of that Loan or for determining a Discount Rate) the rate determined by the Agent as the three year Euro swap rate, |
as of the Specified Time on the Quotation Day. | ||
Euro, euro, EUR, or euros means the single currency of Participating Member States. | ||
Event of Default means any event or circumstance specified as such in Clause 24 (Events of Default). | ||
Expiry Date means, for the Letter of Credit, the last day of its Term. | ||
Facility means the term loan and letter of credit facility made available under this Agreement as described in Clause 2 (The Facility). | ||
Facility Office means the office or offices notified by a Lender or the Issuing Bank to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days written notice) as the office or offices through which it will perform its obligations under this Agreement. |
8
Fee Letter means any letter or letters dated on or about the date of this Agreement between the Arranger and the Borrower or the Agent, the Security Agent and the Borrower setting out any of the fees referred to in Clause 13 (Fees). | ||
Finance Document means this Agreement, the Engagement Letter, any Fee Letter, any Compliance Certificate, any Transaction Security Document, any Utilisation Request and any other document designated as such by the Agent and the Borrower. | ||
Finance Party means the Agent, the Arranger, the Security Agent, the Issuing Bank or a Lender. | ||
Financial Indebtedness means any indebtedness for or in respect of: |
(a) | moneys borrowed; | ||
(b) | any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent; | ||
(c) | any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; | ||
(d) | the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with the Accounting Principles, be treated as a finance or capital lease; | ||
(e) | the amount of any liability in respect of any advance or deferred purchase agreement if (i) one of the primary reasons behind entering into the agreement is for the person liable under the agreement to raise finance or finance the acquisition or construction of any assets or the purchase of any services (but excluding trade credit on customary commercial terms) or (ii) the agreement is in respect of the acquisition or supply of assets or services and the payment is due more than 90 days after the date of acquisition or supply; | ||
(f) | any agreement or option to re-acquire any asset if arranged primarily as a method of raising finance; | ||
(g) | receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis); | ||
(h) | any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing; | ||
(i) | any Treasury Transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account); | ||
(j) | any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution; and |
9
(k) | the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (j) above. |
Financial Quarter and Financial Year each have the respective meaning given to that term in Clause 22.1 (Financial Definitions). | ||
Group means the Company and its Subsidiaries for the time being (including, from the Closing Date, the Target and its Subsidiaries). | ||
Group Structure Chart means a document in a form to be agreed with the Agent containing a complete Group structure chart as at the relevant date and indicating all loans which exist and all minority interests held by or existing in the Group. | ||
Guarantor means an Original Guarantor and an Additional Guarantor. | ||
Holding Company means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary. | ||
Insufficiency means, with respect to any Plan, the amount, if any, of its unfunded benefit liabilities, as defined in section 4001(a)(18) of ERISA. | ||
Intellectual Property means any patents, trade marks, service marks, designs, business names, copyrights, design rights, moral rights, inventions, confidential information, knowhow and other intellectual property rights and interests, whether registered or unregistered and the benefit of all applications and rights to use such assets of each member of the Group. | ||
Internal Revenue Code means the United States Internal Revenue Code of 1986, as amended, including the Treasury regulations promulgated thereunder. | ||
Interest Period means, in relation to a Loan, each period determined in accordance with Clause 11 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 10.3 (Default interest). | ||
Interest Reserve Account means the Euro escrow account of Crown Westfallen LLC with Barclays Bank plc, Account Number 45553777, charged in favour of the Finance Parties under the US Security Agreement granted by the Borrower into which 1,925,505.40 was deposited by the Borrower on 18th August 2006 and such other Euro account as shall be designated by the Agent as the Interest Reserve Account from time to time. | ||
Joint Venture means any joint venture entity, whether a company, unincorporated firm, undertaking, association, joint venture or partnership or any other entity. | ||
L/C Proportion means in relation to a Lender in respect of the Letter of Credit the proportion (expressed as a percentage) borne by that Lenders Available Commitment to the Available Facility immediately prior to the issue of the Letter of Credit, adjusted to reflect any assignment or transfer under this Agreement to or by that Lender. |
10
Legal Due Diligence Report means the legal due diligence report prepared by White & Case LLP in the agreed form, and addressed to and/or capable of being relied on by the Arranger and the other Finance Parties. | ||
Legal Opinion means any legal opinion delivered to the Agent under Clause 4 (Conditions of Utilisation) or any other provision of this Agreement. | ||
Legal Reservations means: |
(a) | the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors; | ||
(b) | the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim; | ||
(c) | similar principles, rights and defences under the laws of any Relevant Jurisdiction; and | ||
(d) | any other matters which are set out as qualifications or reservations as to matters of law of general application in the Legal Opinions. |
Lender means: |
(a) | any Original Lender; and | ||
(b) | any bank, financial institution, trust, fund or other entity which has become a Party in accordance with Clause 25 (Changes to the Lenders and Obligors), |
which in each case has not ceased to be a Party in accordance with the terms of this Agreement. | ||
Letter of Credit means the bank guarantee in the form set out in Schedule 10 (Form of Bank Guarantee). | ||
Loan means a loan made or to be made or deemed to be made under the Facility or which is treated as a Loan in accordance with Clause 10.5(d) (Capitalisation of Interest) or the principal amount outstanding for the time being of that loan (including any amounts added to that loan in accordance with Clause 10.5(d) (Capitalisation of Interest)). | ||
LMA means the Loan Market Association. | ||
Majority Lenders means: |
(a) | if there are no Loans then outstanding, a Lender or Lenders whose Commitments aggregate more than 662/3% of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 662/3% of the Total Commitments immediately prior to the reduction); or |
11
(b) | at any other time, a Lender or Lenders whose participations in the Loans then outstanding aggregate more than 662/3% of all the Loans then outstanding. |
Make Whole Date means the date falling six months after the first Utilisation Date. | ||
Mandatory Cost means the percentage rate per annum calculated by the Agent in accordance with Schedule 4 (Mandatory Cost formula). | ||
Margin means 12 per cent. per annum provided that: |
(a) | if an increase in the Margin takes effect in accordance with Clause 10.6 (Increase in Margin) then the Margin shall increase from (but excluding) the Margin Increase Date to (but including) the Margin Reduction Date, by an additional 6 per cent. per annum; and | ||
(b) | if prepayment of not less than 15,000,000 principal amount of the Loans pursuant to Clause 9.5(c) (Mandatory Prepayment) does not occur by the Make Whole Date, then: |
(i) | the Margin shall increase by 0.5 per cent. per annum at the end of each consecutive period of a Month thereafter (either (1) up to a maximum rate of 15 per cent. per annum if there is no Margin Increase Date or if there has been a Margin Increase Date and a Margin Reduction Date or (2) otherwise up to a maximum rate of 21 per cent. per annum) until the earlier of the date such prepayment occurs and the first Repayment Date; and | ||
(ii) | the Margin shall then remain the rate in effect on such date (subject to any applicable reduction under paragraph (a) above). |
Margin Increase Date and Margin Reduction Date shall have the meanings ascribed thereto in Clause 10.6 (Increase in Margin). | ||
Margin Stock means Margin Stock or Margin Security within the meaning of Regulation U or Regulation X of the Board of Governors of the Federal Reserve System of the US (or any successor). | ||
Material Adverse Effect means an event or circumstance which has or is reasonably likely to have a material adverse effect on: |
(a) | the business, operations, property, financial condition or prospects of the Group taken as a whole; or | ||
(b) | the ability of an Obligor to perform its payment obligations and comply with the financial covenants under the Finance Documents; or | ||
(c) | the validity or enforceability of, or the effectiveness or ranking of any Security granted or purporting to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents. |
12
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: |
(a) | (subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day; | ||
(b) | if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and | ||
(c) | if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end. |
The above rules will only apply to the last Month of any period. | ||
Multiemployer Plan means a multiemployer plan, as defined in section 4001(a)(3) of ERISA, to which any Obligor or any ERISA Affiliate is making or accruing an obligation to make contributions. | ||
Multiple Employer Plan means a single employer plan, as defined in section 4001(a)(15) of ERISA, that is subject to Title IV of ERISA and that (i) is maintained for employees of any Obligor or any ERISA Affiliate and at least one person (other than the Obligors and the ERISA Affiliates) or (ii) was so maintained and in respect of which any Obligor or any ERISA Affiliate could have liability under section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated. | ||
Non-Obligor means a member of the Group which is not an Obligor. | ||
Obligors means the Borrower, the Company and each of the other Guarantors. | ||
Original Audited Accounts means the consolidated accounts of the Company and its Subsidiaries audited for its Financial Year ended on 31 December 2005. | ||
Original Financial Statements means the Original Audited Accounts and the Original Management Accounts. | ||
Original Management Accounts means the unaudited consolidated quarterly management accounts of the Company for the period 1 January 2006 to and including 31 March 2006. | ||
Participating Member State means any member state of the European Communities that adopts or has adopted the Euro as its lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union. | ||
Party means a party to this Agreement. |
13
Patriot Act means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 of the United States. | ||
PBGC means the Pension Benefit Guaranty Corporation (or any successor). | ||
Permitted Acquisition means: |
(a) | the Acquisition; | ||
(b) | any acquisition by a member of the Group of an asset sold, leased, transferred or otherwise disposed of by another member of the Group or any acquisition of assets in exchange for assets disposed of, in each case in circumstances constituting a disposal under paragraphs (b) or (c) of the definition of Permitted Disposal; | ||
(c) | any acquisition of shares or securities pursuant to a Permitted Share Issue or otherwise permitted under Clause 23.22 (Share capital); | ||
(d) | any acquisition of securities which are Cash Equivalent Investments for treasury management purposes; | ||
(e) | any acquisition of any loan made to another member of the Group permitted under Clause 23.17 (Loans or credit); | ||
(f) | any acquisition which forms part of a transaction falling within paragraphs (b) or (c) of the definition of a Permitted Transaction provided that if an asset acquired was subject to Transaction Security before the Permitted Transactions, the Transaction Security over the relevant asset is preserved or the acquiring company gives equivalent Transaction Security over the relevant asset and complies with Clause 23.32 (Further assurance) in respect thereof; or | ||
(g) | any acquisition of assets in the ordinary course of trading on arms length terms (including, without limitation, any loans or other assets made or acquired by any Regulated Entity in the ordinary course of carrying on its regulated activities). |
Permitted Disposal means any sale, lease, licence, transfer or other disposal which is on arms length terms: |
(a) | of trading stock or cash (other than shares) made by any member of the Group in the ordinary course of trading of the disposing entity; | ||
(b) | of any asset, investments or receivables or businesses (other than shares) by a member of the Group to another member of the Group, provided that: |
(i) | if the disposing entity had created Transaction Security over the relevant asset, the Transaction Security is preserved or the acquiring company gives equivalent Transaction Security over the relevant asset and complies with Clause 23.32 (Further assurance) in respect thereof; |
14
(ii) | if the disposing entity is a Guarantor, the acquiring company must be or become a Guarantor which gives a guarantee which at all times guarantees an amount that is not materially less than the amount guaranteed by the disposing company; and | ||
(iii) | the aggregate consideration for all such disposals made in any Financial Year of the Company does not exceed 500,000 (or its equivalent in other currencies); |
(c) | of assets (other than shares, investments or businesses) in exchange for other assets comparable or superior as to type, value and quality provided that if the assets disposed of are subject to Transaction Security the relevant member of the Group creates equivalent Transaction Security over the assets acquired, and complies with Clause 23.32 (Further assurance) in respect thereof; | ||
(d) | of obsolete, redundant or worn-out vehicles, plant and equipment for cash; | ||
(e) | of cash or Cash Equivalent Investments in exchange for cash or other Cash Equivalent Investments or the disposal of cash to the extent not prohibited by the Finance Documents or the making of any cash payment under the Finance Documents which does not breach any other provision of the Finance Documents; | ||
(f) | arising as a result of the grant of any Permitted Security; | ||
(g) | arising as a result of a transaction falling within paragraph (b) or (c) of the definition of Permitted Transaction; | ||
(h) | the Rooftop sale; | ||
(i) | the sale of the interest in the investment in the Purley Chase Golf Club in accordance with the joint venture agreement relating thereto, |
provided that (subject to customary trading arrangements in relation to disposals falling within paragraph (a) of this definition) any such disposal to a third party is for consideration entirely in cash payable in full on completion of the relevant disposal and on terms that the purchaser thereof does not obtain title or possession of any asset subject to such disposal prior to completion of such disposal and payment of the whole consideration therefor (ignoring for this purpose customary purchase price adjustments or contract provisions in any relevant sale agreement) and the requirements of Clause 9.5 (Mandatory Prepayment) are complied with respect to any such disposal. | ||
Permitted Financial Indebtedness means Financial Indebtedness: |
(a) | arising under the Finance Documents (including the Letter of Credit) (and as varied to the extent permitted by and subject always to the terms of this Agreement); | ||
(b) | arising under a Permitted Loan or a Permitted Guarantee or a Permitted Transaction; |
15
(c) | arising under any finance or capital lease of vehicles, plant, equipment, machinery and computers entered into in the ordinary course of business provided that the aggregate outstanding principal amount does not exceed 500,000 (or its equivalent in other currencies) for the Group as a whole at any time; | ||
(d) | not permitted by any other paragraph of this definition in an aggregate outstanding principal amount which does not exceed 500,000 (or its equivalent in other currencies) for the Group as a whole at any time and which is not owed to any Restricted Person; or | ||
(e) | of the Target existing at the Closing Date and detailed in the Target Balance Sheet. |
Permitted Guarantee means: |
(a) | the endorsement of negotiable instruments in the ordinary course of trade and not in respect of Financial Indebtedness; | ||
(b) | without prejudice to the limitations in paragraph (f) below, any unsecured performance bond or similar bond guarantee or indemnity, guaranteeing performance by a member of the Group under any contract entered into by a member of the Group on arms length terms and in the ordinary course of its trading activities and which is not in respect of Financial Indebtedness nor to or for the benefit of a Restricted Person; | ||
(c) | any guarantee permitted under Clause 23.21 (Financial Indebtedness); | ||
(d) | any guarantee given in respect of the netting or set-off arrangements permitted pursuant to paragraph (b) of the definition of Permitted Security provided that such arrangements do not require any Obligor to guarantee the liabilities of any Non-Obligor; | ||
(e) | any guarantees contained in the Finance Documents; | ||
(f) | guarantees granted by any member of the Group which are not permitted by the other paragraphs of this definition where the aggregate actual and contingent liability for Financial Indebtedness under such guarantees does not exceed 500,000 (or its equivalent in other currencies) in aggregate at any time; | ||
(g) | without prejudice to the limitations imposed by paragraph (f) above, guarantees to landlords provided that the maximum amount guaranteed by all such guarantees does not exceed 500,000 (or its equivalent in other currencies) at any time; or | ||
(h) | without prejudice to the limitations imposed by paragraph (f) above, guarantees or counter-indemnities in favour of financial institutions which have guaranteed rent obligations of a member of the Group provided that the maximum amount guaranteed by all such guarantees does not exceed 500,000 (or its equivalent in other currencies) at any time. |
16
Permitted Joint Venture means any investment in: |
(a) | Purley Chase Golf Club; | ||
(b) | CMBS Servicing Systems LLP; | ||
(c) | TBE; and | ||
(d) | Rooftop Holdings Limited; |
Provided that: |
(i) | in any financial year of the Company, the aggregate (the Joint Venture Investment) of: |
(A) | all amounts subscribed for shares in, lent to, or invested in all such Joint Ventures by any member of the Group; | ||
(B) | the contingent liabilities of any member of the Group under any guarantee given in respect of the liabilities of any such Joint Venture; and | ||
(C) | the market value of any assets transferred by any member of the Group to any such joint venture, |
does not exceed Euro 500,000 (or its equivalent in other currencies); and |
(ii) | in the case of any such Joint Venture the Company has procured that the member of the Group holding the investment in such Joint Venture shall exercise its rights to seek to procure that such Joint Venture (or its subsidiaries) do not incur any further Financial Indebtedness or Security in excess of 500,000. |
Permitted Loan means: |
(a) | any trade credit extended by any member of the Group to its customers on customary commercial terms and in the ordinary course of its trading activities (including without limitation any loans made by any Regulated Entity in the ordinary course of carrying on its regulated activities so long as it does not result in a credit exposure); | ||
(b) | any loan or credit granted by an Obligor to another Obligor, and any loan or credit granted by a Non-Obligor to an Obligor; | ||
(c) | any loan or credit granted by an Obligor to a Non-Obligor, provided that the aggregate principal amount of Financial Indebtedness under any such loans or credit does not when aggregated with the amount of all guarantees outstanding at that time from Obligors in respect of Non-Obligors as permitted under paragraph (f) of the definition of Permitted Guarantees exceed 500,000 (or its equivalent in other currencies) at any time; |
17
(d) | any loan or credit granted between Non-Obligors (other than a loan or credit granted by the Acquiror); | ||
(e) | any loan made by a member of the Group to an employee or director of any member of the Group or to any trustee of any employee share option scheme or employee unit trust scheme for any members of the Group, provided that the maximum aggregate principal amount outstanding under such loans does not exceed 500,000 (or its equivalent in other currencies) at any time; | ||
(f) | any credit constituted by a credit balance on an account of a member of the Group with a bank or financial institution which is not otherwise in breach of this Agreement; | ||
(g) | any loan or credit (other than a loan made by a member of the Group to another member of the Group) which is not permitted by the other paragraphs of this definition so long as the aggregate amount of Financial Indebtedness outstanding under all such loans or credit does not exceed 500,000 (or its equivalent in other currencies) at any time. |
Permitted Reorganisation means the restructuring of the group comprising Crown Northcorp Limited and its subsidiaries and the sale of Crown Northcorp Limited and its subsidiaries Crown Mortgage Management Limited and Crown Mortgage Management GmbH and its interests in TBE and Crown Westfalen Credit Services GmbH to the Target on an arms length basis by the Company for a net purchase price (after all stamp duty, stamp duty reserve, documentary, registration and other similar Taxes, costs, fees and other deductions or liabilities) of not less than 15,000,000 to be satisfied by a cash payment of such price to the Company, to be carried out in accordance with the steps set out at Transaction 1, Transaction 2 and Transaction 3 (as each are defined in the BT Treasury Letter) in the Structure Memorandum. | ||
Permitted Reorganisation Repayment means the repayment of not less than 15,000,000 principal amount of the Loans from the net proceeds of the Permitted Reorganisation. | ||
Permitted Security means: |
(a) | any lien arising by operation of law and in the ordinary course of trading and not as a result of any default or omission by any member of the Group; | ||
(b) | Security constituted by any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances (other than cash collateral) of members of the Group or Security arising by operation of law or under standard terms and conditions of the relevant clearing bank over bank accounts permitted to be maintained and operated under this Agreement, provided that such arrangement does not (i) permit or require credit balances of Obligors or the Acquiror to be netted or set-off against debit balances of Non-Obligors or (ii) give rise to other Security over the assets of Obligors or the Acquiror in support of the liabilities of Non-Obligors; |
18
(c) | any Security arising under any retention of title, hire purchase or conditional sale arrangement or arrangements having similar effect in respect of goods or assets supplied to any member of the Group in the ordinary course of the trading of such Group member and on the suppliers standard or usual terms in respect of the goods or assets supplied (and not arising as a result of any default or omission by any member of the Group); | ||
(d) | any Security arising pursuant to an order of attachment or injunction restraining disposal of assets or similar legal process arising in connection with court proceedings which are contested by any member of the Group in good faith by appropriate proceedings with a reasonable prospect of success and which legal process does not constitute a Default where the total amount secured by all such Security does not exceed 500,000 (or its equivalent in other currencies); or | ||
(e) | Security arising automatically by operation of law in favour of any US taxation or any government authority or organisation in respect of Taxes, assessments or governmental charges which are being contested by the relevant member of the Group in good faith and with a reasonable prospect of success, provided that the circumstances giving rise to the existence of the Security does not constitute a Default where the amount secured by such Security does not exceed 500,000 (or its equivalent in other currencies); or | ||
(f) | any security over any rental deposits in respect of any property leased or licensed by a member of the Group in respect of amounts representing not more than twelve months rental for that property including the rent deposit deed dated 21 November 2000 granted by Crown Mortgage Management Limited in favour of Friends Provident Life Office and security deposit under the tenancy agreement dated 17 March 2000 between Crown NorthCorp Limited and Kenneth Owen and John Pyle, |
Permitted Share Issue means: |
(a) | an issue of ordinary shares by the Company provided that the Company promptly notifies the Agent that such shares have been issued; | ||
(b) | an issue of shares by one wholly owned Subsidiary of the Company to its direct Holding Company (which is another wholly owned Subsidiary of the Company or the Company), provided that if the existing shares in the issuing company are the subject of Transaction Security, such new shares become the subject of equivalent Transaction Security on substantially the same terms; | ||
(c) | the issue of shares as described in the Structure Memorandum where, if the existing shares in the issuing company are the subject of Transaction Security, such new shares become the subject of the Transaction Security in favour of the Finance Parties on substantially the same terms; or |
19
(d) | the issue of shares by the Acquiror (or any member of the Group) under and in accordance with the Warrant Documents. |
Permitted Transaction means: |
(a) | any disposal required, Financial Indebtedness incurred, guarantee, indemnity, or Security given, or other transaction arising under the Finance Documents; | ||
(b) | the Permitted Reorganisation; | ||
(c) | the acquisitions, disposals, guarantees, loans, payments, transactions or Group reorganisations expressly and fully described in the Structure Memorandum; or | ||
(d) | transactions other than (i) any sale, lease, licence, transfer or other disposal and (ii) the granting or creation of Security or the incurring or permitting to subsist of Financial Indebtedness, conducted in the ordinary course of trading on arms length terms. |
Plan means a Single Employer Plan or a Multiple Employer Plan. | ||
Quarter Date means the last day of a Financial Quarter. | ||
Quotation Day means, in relation to any period for which an interest rate is to be determined or any date in respect of which a Discount Rate is to be determined, two TARGET Days before the first day of that period or before that date (as the case may be). | ||
Receiver means a receiver or receiver and manager or administrative receiver of the whole or any part of the Charged Property. | ||
Register has the meaning given to it in Clause 25.11 (The Register). | ||
Regulated Entity means Crown Mortgage Management Limited, Crown Mortgage Management GmbH and, following the Closing Date, the Target. | ||
Relevant Interbank Market means the European interbank market. | ||
Relevant Jurisdiction means, in relation to an Obligor: |
(a) | its jurisdiction of incorporation; | ||
(b) | any jurisdiction where any asset subject to or intended to be subject to the Transaction Security to be created by it is situated; | ||
(c) | any jurisdiction where it conducts any material part of its business or carries on the administration of its business on a regular basis or has its corporate seat; and | ||
(d) | any jurisdiction whose laws govern any of (or the perfection of any of) the Security Documents entered into by it. |
20
Relevant Period has the meaning given to that term in Clause 20.1 (Financial Definitions). | ||
Repayment Date has the meaning given to it in Clause 8.1 (Repayment of Loans). | ||
Repayment Instalment means the principal amount outstanding under the Facility due to be repaid on the relevant Repayment Date. | ||
Repeating Representations means each of the representations set out in Clauses 20.2 (Status) to 20.8 (Insolvency), Clause 20.11 (No default), Clauses 20.13(d) and 20.13(h) (Original Financial Statements), Clause 20.14 (No proceedings pending or threatened), Clause 20.19 (Ranking), Clauses 20.20 (Good title to asset) to 20.21 (Legal and beneficial ownership) and Clause 20.30 (US government regulations). | ||
Reports means the Accountants Report, the Capital and Liquidity Report, the Legal Due Diligence Report and the Structure Memorandum. | ||
Restricted Person means: |
(a) | any person with an interest (direct or indirect) in the shares in the Company or any similar equity interest; | ||
(b) | any joint venture, consortium, partnership or similar arrangement of which any person described in paragraph (a) above is a member; | ||
(c) | any Affiliate of the Company or any person described in paragraph (a) above; and | ||
(d) | any person owning beneficially and/or legally (directly or indirectly) 20 per cent. or more of the equity interest in, or 20 per cent. or more of whose equity interest is owned beneficially and/or legally (directly or indirectly) by, any person described in paragraph (a) above. |
Rooftop Sale means the sale of the Groups 20 per cent. interest in the share capital of Rooftop Holdings Limited on an arms length basis for a net purchase price (after all Taxes, costs, fees and other deductions or liabilities) of not less than 10,000,000 to be satisfied by a cash payment of such net price to the Company. | ||
Screen Rate means the three year Euro swap rate, displayed on the appropriate page of Bloomberg, as selected by the Agent. If the agreed page is replaced or service ceases to be available, the Agent may specify another page or service displaying the appropriate rate after consultation with the Borrower and the Lenders. | ||
SEC means the Securities and Exchange Commission of the United States or any successor thereto. | ||
Secured Parties means each Finance Party from time to time party to this Agreement and any Receiver or Delegate. | ||
Security means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect. |
21
Shareholder Indebtedness means any Financial Indebtedness owed to a Restricted Person. | ||
Single Employer Plan means a single employer plan, as defined in section 4001(a)(15) of ERISA, that is subject to title IV of ERISA that (a) is maintained for employees of any Obligor or any ERISA Affiliate and no person other than the Obligors and the ERISA Affiliates or (b) was so maintained and in respect of which any Obligor or any ERISA Affiliate could have liability under section 4069 of ERISA in the event such plan has been or were to be terminated. | ||
Specified Time means a time determined in accordance with Schedule 9 (Timetables). | ||
Structure Memorandum means the Group corporate and tax structuring information package provided by Baker Tilly, Bury St Edmonds on 21 July 2006 and 24 July 2006 as follows: |
(a) | e-mail dated 21 July 2006 from Adrian Mole of Baker Tilly, Bury St Edmonds to Clifford Atkins of Shearman & Sterling (London) LLP; | ||
(b) | powerpoint presentation entitled Crown Mortgage Management Crown NorthCorp Group Structure before and after Bank Purchase revised May 2006; | ||
(c) | copy letter dated 14 June 2006 from Baker Tilly, Bury St Edmonds to The Secretary, HM Treasury (AP) (the BT Treasury Letter); | ||
(d) | letter dated 16 June 2006 from HM Treasury to Baker Tilly, Bury St Edmonds; | ||
(e) | memo dated 21 June 2006 entitled Project: Crown Westfalen Bank AG prepared by Baker Tilly, Frankfurt; and | ||
(f) | memo dated 27 June 2006 to Adrian Mole of Baker Tilly from Frank Melotte of Baker Tilly, Amsterdam entitled Tax Advisers Re: Crown Mortgage Management; | ||
(g) | e-mail dated 17 July 2006 from Stefan Kirchmann of Baker Tilly, Frankfurt to Adrian Mole of Baker Tilly, Bury St Edmonds; and | ||
(h) | letter from Adrian Mole of Baker Tilly, Bury St Edmunds to Peter Walker of Crown Mortgage Management Limited dated 27 July, 2006, |
in the case of the items described at paragraphs (a), (e), (f), (g) and (h) addressed to, and/or capable of being relied upon by the Arranger and the other Finance Parties. | ||
Subsidiary means a subsidiary undertaking within the meaning of section 258 of the Companies Act 1985. | ||
TARGET means Trans-European Automated Real-time Gross Settlement Express Transfer payment system. |
22
TARGET Day means any day on which TARGET is open for the settlement of payments in Euro. | ||
Target means Westfalenbank AG registered with the commercial register of the local court in Bochum under HRB1941. | ||
Target Balance Sheet means the balance sheet of the Target in the agreed form. | ||
Target Shares means the entire share capital of the Target. | ||
Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same). | ||
Tax Credit, Tax Deduction and Tax Payment each have the meanings given to it in Clause 14.1 (Tax Definitions). | ||
Termination Date means 31 December, 2008. | ||
Total Commitments means the aggregate of the Commitments being 25,000,000 at the date of this Agreement. | ||
Transaction Documents means the Finance Documents, the Acquisition Documents and the Warrant Documents. | ||
Transaction Security means the Security created or expressed to be created in respect of the obligations of any of the Obligors or the Acquiror under any of the Finance Documents pursuant to the Security Documents. | ||
Transaction Security Documents means each of the documents listed as a Transaction Security Document in paragraph 3(d) of Part I of Schedule 2 (Conditions Precedent) or paragraph 8 of Part III of Schedule 2 (Conditions Precedent) and any document required to be delivered to the Agent under paragraph 13 of Part II of Schedule 2 (Conditions Precedent) together with any other document entered into by any Obligor or the Acquiror creating or expressed to create any Security over all or any part of its assets in respect of the obligations of any of the Obligors or the Acquiror under any of the Finance Documents. | ||
Transfer Certificate means a certificate substantially in the form set out in Schedule 5 (Form of Transfer Certificate) or any other form agreed between the Agent and the Borrower. | ||
Transfer Date means, in relation to a transfer, the later of: |
(a) | the proposed Transfer Date specified in the Transfer Certificate or Assignment Agreement; and | ||
(b) | the date on which the Agent executes the Transfer Certificate or Assignment Agreement. |
Treasury Transactions means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price. |
23
Underlying Debt means, in relation to an Obligor and at any given time, each obligation (whether present or future, actual or contingent) owing by that Obligor to a Finance Party under the Finance Documents (including, for the avoidance of doubt, any change or increase in those obligations pursuant to or in connection with any amendment or supplement or restatement or novation of any Finance Document, in each case whether or not anticipated as of the date of this Agreement) excluding that Obligors Dutch Parallel Debts). | ||
Unpaid Sum means any sum due and payable but unpaid by an Obligor under the Finance Documents (other than any Obligors Dutch Parallel Debts). | ||
US and USA means the United States of America or any of its states and territories and the District of Columbia. | ||
US Obligor means an Obligor organised under any State of the US. | ||
US Bankruptcy Code means Title 11 of the United States Code entitled Bankruptcy, as amended, or any successor thereof. | ||
US Solvent and US Solvency mean, with respect to any person on a particular date, that on such date (a) the fair value of the property of such person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such person, (b) such person does not intend to, and does not believe that it will, incur debts or liabilities beyond such persons ability to pay as such debts and liabilities mature and (c) such person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such persons property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability. | ||
Utilisation means a Loan or a Letter of Credit. | ||
Utilisation Date means the date on which a Utilisation is made. | ||
Utilisation Request means a notice substantially in the form set out in Part I of Schedule 3 (Requests). | ||
VAT means value added tax as provided for in the Value Added Tax Act 1994 and any other tax of a similar nature. | ||
Vendor means Bayerische Hypo-und Vereinsbank A.G. | ||
Warrant Documents means the warrant instrument entered into or to be entered into by, inter alia, the Acquiror and the Borrower in relation to the issue of warrants relating to the share capital of the Acquiror in the agreed form (the Warrant Agreement) and any other document or agreement entered into or executed in connection with that instrument or the rights set out in that agreement, each in the agreed form. | ||
Warrants means the warrants issued pursuant to the Warrant Documents. |
24
Withdrawal Liability has the meaning specified in Part I of Subtitle E of title IV of ERISA. |
1.2 | Construction |
(a) | Unless a contrary indication appears, any reference in this Agreement to: |
(i) | the Agent, the Arranger, any Finance Party, the Issuing Bank, any Lender, any Obligor, any Party, any Secured Party, the Security Agent or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees and in the case of the Security Agent, any person for the time being appointed as Security Agent in accordance with the Finance Documents; | ||
(ii) | a document in agreed form is a document which is previously agreed in writing by or on behalf of the Company and the Agent or, if not so agreed, is in the form specified by the Agent (acting reasonably); | ||
(iii) | assets includes present and future properties, revenues and rights of every description; | ||
(iv) | a director in relation to the Acquiror, means a managing director (bestuurder) and board of directors means its managing board (bestuur); | ||
(v) | a Finance Document or a Transaction Document or any other agreement or instrument is a reference to that Finance Document or Transaction Document or other agreement or instrument as amended, novated, supplemented, extended or restated; | ||
(vi) | guarantee means (other than in Clause 17 (Guarantee and Indemnity)) any guarantee, letter of credit, bond, indemnity or similar assurance against loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person where, in each case, such obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness; | ||
(vii) | a Lenders participation in relation to the Letter of Credit, shall be construed as a reference to the relevant amount that is or may be payable by a Lender in relation to the Letter of Credit; | ||
(viii) | indebtedness includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent; | ||
(ix) | a person includes any person, firm, company, corporation, government, state or agency of a state or any association, trust or partnership (whether or not having separate legal personality) or two or more of the foregoing; |
25
(x) | a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation; | ||
(xi) | a provision of law is a reference to that provision as amended or re-enacted; | ||
(xii) | the date of this Agreement is a reference to 31 July 2006; and | ||
(xiii) | a time of day is a reference to London time. |
(b) | Section, Clause and Schedule headings are for ease of reference only. | ||
(c) | Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement. | ||
(d) | A Default (other than an Event of Default) is continuing if it has not been remedied or waived and an Event of Default is continuing if it has not been remedied or waived. | ||
(e) | The Borrower providing cash cover for the Letter of Credit means the Borrower paying an amount in Euro to an interest-bearing account in the name of the Borrower and the following conditions being met: |
(i) | the account is with the Agent; | ||
(ii) | until no amount is or may be outstanding under the Letter of Credit, withdrawals from the account may only be made to pay a Finance Party amounts due and payable to it under this Agreement in respect of the Letter of Credit; and | ||
(iii) | the Borrower has executed a security document over that account, in form and substance satisfactory to the Agent creating a first ranking security interest over that account. |
(f) | The Borrower repaying or prepaying the Letter of Credit means: |
(i) | the Borrower providing cash cover for the Letter of Credit; | ||
(ii) | the maximum amount payable under the Letter of Credit being reduced or cancelled in accordance with its terms; or | ||
(iii) | the Issuing Bank being satisfied that it has no further liability under the Letter of Credit, |
and the amount by which a Letter of Credit is repaid or prepaid under paragraphs (f)(i) and (f)(ii) above is the amount of the relevant cash cover or reduction. |
26
(g) | An amount borrowed includes any amount utilised by way of the Letter of Credit. | ||
(h) | A Lender funding its participation in a Utilisation includes a Lender participating in the Letter of Credit. | ||
(i) | The outstanding amount of the Letter of Credit at any time is the maximum amount that is or may be payable by the Borrower in respect of the Letter of Credit at that time. |
1.3 | Third party rights |
(a) | Unless expressly provided to the contrary in a Finance Document a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the Third Parties Act) to enforce or to enjoy the benefit of any term of this Agreement. | ||
(b) | Notwithstanding any term of any Finance Document the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time. |
27
2. | THE FACILITY | |
2.1 | The Facility | |
Subject to the terms of this Agreement, the Lenders make available to the Borrower a Euro term loan and letter of credit facility in an aggregate amount equal to the Total Commitments. |
2.2 | Finance Parties rights and obligations |
(a) | The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents. | ||
(b) | The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt. | ||
(c) | A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents. |
2.3 | Obligors Agent |
(a) | Each Obligor (other than the Company) by its execution of this Agreement or an Accession Letter irrevocably appoints the Company to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises: |
(i) | the Company on its behalf to supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions (including, in the case of the Borrower, Utilisation Requests), to execute on its behalf any Accession Letter, to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by any Obligor notwithstanding that they may affect the Obligor, without further reference to or the consent of that Obligor; and | ||
(ii) | each Finance Party to give any notice, demand or other communication to that Obligor pursuant to the Finance Documents to the Company, |
and in each case the Obligor shall be bound as though the Obligor itself had given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication. |
28
(b) | Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Obligors Agent or given to the Obligors Agent under any Finance Document on behalf of another Obligor or in connection with any Finance Document (whether or not known to any other Obligor and whether occurring before or after such other Obligor became an Obligor under any Finance Document) shall be binding for all purposes on that Obligor as if that Obligor had expressly made, given or concurred with it. In the event of any conflict between any notices or other communications of the Obligors Agent and any other Obligor, those of the Obligors Agent shall prevail. |
3. | PURPOSE | |
3.1 | Purpose | |
The Borrower shall apply all amounts borrowed by it under the Facility and the Letter of Credit only in making a share premium payment (onbedongen agio storting) to the Acquiror which shall fund payment to the Vendor of the purchase price for the Target Shares in accordance with the terms of the Acquisition Agreement. |
3.2 | Monitoring | |
No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement. |
4. | CONDITIONS OF UTILISATION | |
4.1 | Initial conditions precedent | |
The Borrower may not deliver a Utilisation Request unless, and a Lender shall be obliged to comply with Clause 5.3 (Lenders Participation) (but subject to the conditions specified therein) if, the Agent has received all of the documents and other evidence listed in Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Agent. The Agent shall notify the Borrower and the Lenders promptly upon being so satisfied. |
4.2 | Further conditions precedent | |
The Lenders will only be obliged to comply with Clause 5.3 (Lenders participation) if on the date of a Utilisation Request and on the proposed Utilisation Date: |
(a) | no Default is continuing or would result from the proposed Utilisation; and | ||
(b) | the Repeating Representations to be made by each Obligor are true in all material respects. |
29
5. | UTILISATION LOANS | |
5.1 | Delivery of a Utilisation Request | |
The Borrower shall deliver to the Agent a duly completed Utilisation Request not later than the Specified Time in relation to any Loan to be made under paragraph (a) of Clause 7.5 (Deemed Loan). |
5.2 | Completion of a Utilisation Request for a Loan | |
A Utilisation Request in respect of a Loan to be made under paragraph (a) of Clause 7.5 (Deemed Loan) is irrevocable and will not be regarded as having been duly completed unless: |
(a) | the proposed Utilisation Date is a Business Day within the Availability Period, being the Closing Date; | ||
(b) | the currency of the Utilisation is Euros and the amount of the Loan to be made under paragraph (a) above is the relevant amount to be demanded under the Letter of Credit; and | ||
(c) | the Borrower has delivered to the Agent evidence that the German Federal Agency for Supervision of Financial Services (Bundesanstalt für Finanzdienstleistungsaufsicht) does not and will not raise objections to the Acquisition nor the entry into and performance of the Acquisition Documents and/or the Finance Documents nor the validity and enforceability of the Acquisition Documents and/or the Finance Documents. |
5.3 | Lenders participation |
(a) | If the conditions set out in this Agreement have been met, each Lender shall make its participation in a Loan to be made under paragraph (a) of Clause 7.5 (Deemed Loan) available by the Utilisation Date through its Facility Office. | ||
(b) | The amount of each Lenders participation in a Loan to be made under paragraph (a) of Clause 7.5 (Deemed Loan) will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making that Loan. | ||
(c) | The Agent shall notify each Lender of the amount of a Loan to be made under paragraph (a) of Clause 7.5 (Deemed Loan) and the amount of its participation in that Loan by the Specified Time. |
6. | UTILISATION THE LETTER OF CREDIT | |
6.1 | Currency and amount | |
The maximum amount of the Letter of Credit must be a Euro amount of 25,000,000. |
30
6.2 | Delivery of a Utilisation Request for the Letter of Credit | |
The Borrower may request the Letter of Credit to be issued by delivery to the Agent of a duly completed Utilisation Request not later than the Specified Time. |
6.3 | Completion of the Utilisation Request for the Letter of Credit | |
The Utilisation Request for a Letter of Credit is irrevocable and will not be regarded as having been duly completed unless: |
(a) | it specifies that it is for the Letter of Credit; | ||
(b) | the proposed Utilisation Date is a Business Day within the Availability Period and is the Acquisition Signing Date; | ||
(c) | the currency and amount of the Letter of Credit comply with Clause 6.1 (Currency and amount); | ||
(d) | the form of the Letter of Credit is attached; | ||
(e) | the Expiry Date of the Letter of Credit falls on or before the Closing Date; | ||
(f) | the delivery instructions for the Letter of Credit are specified; and | ||
(g) | the identity of the beneficiary of the Letter of Credit is the Vendor. |
6.4 | Issue of the Letter of Credit |
(a) | If the conditions set out in this Agreement have been met, the Issuing Bank shall issue the Letter of Credit on the Utilisation Date. | ||
(b) | Subject to Clause 4.1 (Initial conditions precedent), the Issuing Bank will only be obliged to comply with paragraph (a) above, if on the date of the Utilisation Request and on the proposed Utilisation Date: |
(i) | no Default is continuing or would result from the proposed Utilisation; and | ||
(ii) | all the representations and warranties in Clause 20 (Representations) are true. |
(c) | The amount of each Lenders participation in the Letter of Credit will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to the issue of the Letter of Credit. | ||
(d) | The Agent shall notify each Lender of the details of its participation in the Letter of Credit by the Specified Time. |
31
7. | LETTER OF CREDIT | |
7.1 | Immediately payable | |
Subject to Clause 7.5 (Deemed Loan), the Borrower shall repay or prepay any amount outstanding under a Letter of Credit immediately. |
7.2 | Claims under the Letter of Credit |
(a) | The Borrower irrevocably and unconditionally authorises the Issuing Bank to pay any claim made or purported to be made under the Letter of Credit and which appears on its face to be in order (in this Clause 7, a claim). | ||
(b) | Subject to Clause 7.5 (Deemed Loan), the Borrower shall immediately on demand pay to the Agent for the Issuing Bank an amount equal to the amount of any claim. | ||
(c) | The Borrower acknowledges that the Issuing Bank: |
(i) | is not obliged to carry out any investigation or seek any confirmation from any other person before paying a claim; and | ||
(ii) | deals in documents only and will not be concerned with the legality of a claim or any underlying transaction or any available set-off, counterclaim or other defence of any person. |
(d) | The obligations of the Borrower under this Clause will not be affected by: |
(i) | the sufficiency, accuracy or genuineness of any claim or any other document; or | ||
(ii) | any incapacity of, or limitation on the powers of, any person signing a claim or other document. |
7.3 | Indemnities |
(a) | The Borrower shall immediately on demand indemnify the Issuing Bank against any cost, loss or liability incurred by the Issuing Bank (otherwise than by reason of the Issuing Banks gross negligence or wilful misconduct) in acting as the Issuing Bank under the Letter of Credit. | ||
(b) | Each Lender shall (according to its L/C Proportion) immediately on demand indemnify the Issuing Bank against any cost, loss or liability incurred by the Issuing Bank (otherwise than by reason of the Issuing Banks gross negligence or wilful misconduct) in acting as the Issuing Bank under the Letter of Credit (unless the Issuing Bank has been reimbursed by an Obligor pursuant to a Finance Document) including in relation to a Loan made by the Issuing Bank under Clause 7.5 (Deemed Loan). | ||
(c) | Subject to Clause 7.5 (Deemed Loan), the Borrower shall immediately on demand reimburse any Lender for any payment it makes to the Issuing Bank under this Clause 7.3 in respect of the Letter of Credit. |
32
(d) | The obligations of each Lender under this Clause are continuing obligations and will extend to the ultimate balance of sums payable by that Lender in respect of the Letter of Credit, regardless of any intermediate payment or discharge in whole or in part. | ||
(e) | The obligations of any Lender or the Borrower under this Clause will not be affected by any act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause (without limitation and whether or not known to it or any other person) including: |
(i) | any time, waiver or consent granted to, or composition with, any Obligor, any beneficiary under the Letter of Credit or any other person; | ||
(ii) | the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor or any member of the Group; | ||
(iii) | the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor, any beneficiary under the Letter of Credit or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security; | ||
(iv) | any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor, any beneficiary under the Letter of Credit or any other person; | ||
(v) | any amendment (however fundamental) or replacement of a Finance Document, the Letter of Credit or any other document or security; | ||
(vi) | any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document, the Letter of Credit or any other document or security; or | ||
(vii) | any insolvency or similar proceedings. |
7.4 | Rights of contribution | |
No Obligor will be entitled to any right of contribution or indemnity from any Finance Party in respect of any payment it may make under this Clause 7. |
7.5 | Deemed Loan |
(a) | Subject to paragraph (b) below any amount demanded from and paid by the Issuing Bank under the Letter of Credit shall be deemed to constitute a Loan made on the due date for payment under the Letter of Credit by the Issuing Bank to the extent that there remains a sufficient amount of the Commitments undrawn at the time (for this purpose the relevant Utilisation by the Letter of Credit being deemed not to be outstanding to the extent of the amount demanded). |
33
(b) | All provisions of this Agreement relating to Loans and the making of them including the provisions of Clause 4.2 (Further conditions precedent) and all provisions relating to the payment of interest, the repayment and prepayment of principal and other amounts shall apply to any Loan made under paragraph (a) above. The proceeds of such Loan shall be applied in satisfaction of the Borrowers obligations to Lenders under the Letter of Credit under this Agreement. |
34
8. | REPAYMENT |
8.1 | Repayment of Loans | |
The Borrower shall repay the aggregate Loans on the following dates (each a Repayment Date) and by the following instalments: |
Repayment Date | Principal Amount to be Repaid | |
31 March, 2007 |
15,000,000 (provided that if the Permitted Reorganisation has completed on or prior to that date, then the principal amount on that date shall be the higher of (i) zero and (ii) 15,000,000 less the principal amount prepaid in accordance with Clause 9.5(c) (Mandatory Prepayment) from the Net Proceeds of the Permitted Reorganisation) | |
Termination Date |
The balance of the Loans outstanding |
If on the first Repayment Date, the principal amount of the Loans outstanding is less than the principal amount specified to be repaid on that Repayment Date, then the principal amount to be repaid shall be instead the balance of the Loans remaining outstanding on that Repayment Date. | ||
8.2 | Reborrowing | |
The Borrower may not reborrow any part of the Facility which is repaid. | ||
8.3 | Accrued Interest | |
On any repayment under Clause 8.1 (Repayment of Loans) accrued interest on the principal amount of the Loans repaid on that date must be paid. | ||
8.4 | Dutch Parallel Debts |
(a) | Dutch Parallel Debts |
(i) | Each Obligor undertakes with the Security Agent to pay to the Security Agent its Dutch Parallel Debts. | ||
(ii) | Subclause 8.4(a)(i) above is: |
(A) | for the purpose of ensuring the validity and effect of any security right governed by Dutch law and granted or to be |
35
granted by any Obligor or the Acquiror pursuant to the Finance Documents; and | |||
(B) | without prejudice to the other provisions of the Finance Document. |
(iii) | Each Dutch Parallel Debt is a separate and independent obligation and shall not constitute the Security Agent and any Finance Party as joint creditors (hoofdelijk schuldeisers) of any Underlying Debt. |
(b) | Fall-back |
(i) | If (notwithstanding subclause 8.4(a)(a)(iii) (Dutch Parallel Debts) above) any Dutch Parallel Debt constitutes the Security Agent as a joint creditor with any Finance Party, the Security Agent may determine (at its discretion) that that Dutch Parallel Debt and one or more other Dutch Parallel Debts shall be combined into one single Dutch Parallel Debt (a Combined Dutch Parallel Debt), whereupon those Dutch Parallel Debts shall be combined into a Combined Dutch Parallel Debt: |
(A) | the amount of which shall be equal to the aggregate of the amounts of the Underlying Debts combined into it; | ||
(B) | which shall, if the Underlying Debts are expressed in different currencies, be expressed in such of those currencies or Euro as the Security Agent may determine (and, for this purpose, each Underlying Debt shall be converted into the currency of the Combined Dutch Parallel Debt at the rate of exchange reasonably selected by the Security Agent); | ||
(C) | which shall, if the Underlying Debts combined into it fall due at different times, fall due in parts corresponding to those Underlying Debts (but otherwise in accordance with Clause 8.4(c) (Payment)); and | ||
(D) | to which this Agreement shall otherwise apply as if the Dutch Combined Parallel Debt were a Dutch Parallel Debt. |
(ii) | If any Underlying Debt is avoided or reduced other than: |
(A) | as a result of payment to, or recovery or discharge by, the Finance Party to which the Underlying Debt is owed; or | ||
(B) | otherwise with the consent of that Finance Party, |
the amount of the Dutch Parallel Debt corresponding to that Underlying Debt shall be equal to the amount which the Underlying Debt would have had if the avoidance or reduction had not occurred. |
36
(c) | Payment |
(i) | No Obligor may pay any Dutch Parallel Debt other than at the instruction of, and in the manner determined by, the Security Agent. | ||
(ii) | Without prejudice to subclause 8.4(c)(i) no Obligor shall be obliged to pay any Dutch Parallel Debt before the corresponding Underlying Debt has fallen due. | ||
(iii) | All payments to be made by an Obligor in respect of its Dutch Parallel Debts shall be calculated and be made without (and clear of any deduction for) set-off or counterclaim. |
(d) | Application | ||
Any payment made, or amount recovered, in respect of an Obligors Dutch Parallel Debts shall reduce the Underlying Debts owed to a Finance Party by the amount which that Finance Party has received out of that payment or recovery under the Finance Documents. |
9. | PREPAYMENT AND CANCELLATION | |
9.1 | Illegality | |
If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Utilisation: |
(a) | that Lender shall promptly notify the Agent upon becoming aware of that event; | ||
(b) | upon the Agent notifying the Borrower, the Commitment of that Lender will be immediately cancelled; and | ||
(c) | the Borrower shall repay that Lenders participation in the Utilisations made to the Borrower on the last day of the Interest Period for each Utilisation occurring after the Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law). |
9.2 | Illegality in relation to Issuing Bank | |
If it becomes unlawful for the Issuing Bank to issue or leave outstanding the Letter of Credit, then: |
(a) | the Issuing Bank shall promptly notify the Agent upon becoming aware of that event; | ||
(b) | upon the Agent notifying the Company, the Issuing Bank shall not be obliged to issue the Letter of Credit; and |
37
(c) | the Company shall procure that the Borrower shall use its best endeavours to procure the release of the Letter of Credit issued by the Issuing Bank and outstanding at such time. |
9.3 | Voluntary prepayment of Loans and Letters of Credit | |
Subject to Clause 9.6 (Make Whole Payments), the Borrower may at any time after the Closing Date, if it gives the Agent not less than 5 Business Days (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of any Loan (or, if only the Letter of Credit is outstanding, the Letter of Credit) (but, if in part, being an amount that reduces the amount of the Loan (or, if only the Letter of Credit is outstanding, the Letter of Credit) by a minimum amount of 500,000). | ||
9.4 | Right of repayment and cancellation in relation to a single Lender |
(a) | If: |
(i) | any sum payable to any Lender by an Obligor is required to be increased under paragraph (c) of Clause 14.3 (Tax gross-up); or | ||
(ii) | any Lender claims indemnification from the Borrower under Clause 14.4 (Tax indemnity) or Clause 15.1 (Increased costs), |
the Borrower may, whilst the circumstance giving rise to the requirement for indemnification continues, give the Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lenders participation in the Utilisation. | |||
(b) | On receipt of a notice referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero. | ||
(c) | On the last day of each Interest Period which ends after the Borrower has given notice under paragraph (a) above (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that Lenders participation in each Utilisation and together with all interest and other amounts accrued under the Finance Documents. |
9.5 | Mandatory Prepayment |
(a) | For the purposes of this Clause 9.5: |
(i) | Acquisition Proceeds means the proceeds of a claim (a Recovery Claim) against the Vendor or any of its Affiliates in relation to the Acquisition Documents or against the provider of a Report (in its capacity as a provider of that Report) and after deducting any reasonable expenses payable and any stamp duty, stamp duty reserve, documentary, registration and other similar Taxes (if applicable) which are incurred by a member of the Group to persons who are not members of the Group in each case in relation to that Recovery Claim; |
38
(ii) | Disposal means a sale, lease, licence, transfer, loan or other disposal by a person of any asset, undertaking or business (whether by a voluntary or involuntary single transaction or series of transactions); | ||
(iii) | Disposal Proceeds means the consideration receivable by any member of the Group (including any amount receivable in repayment of debt owed to other members of the Group remaining after the relevant Disposal) for the Permitted Reorganisation, the Rooftop Sale or any other Disposal made by any member of the Group after deducting all amounts due to the Agent under the Finance Documents in respect of all costs, expenses, liabilities and any stamp duty, stamp duty reserve, documentary, registration and other similar Taxes (if applicable) incurred by the Agent in relation to any release or amendment of any Transaction Security relating to that Disposal and all reasonable expenses which are incurred by any member of the Group with respect to that Disposal to persons who are not members of the Group; | ||
(iv) | Excluded Disposal Proceeds means the proceeds of any Disposal which the Company notifies the Agent are the proceeds of any Disposal referred to in paragraph (a), (b), (c), (e) or (f) of the definition of Permitted Disposal; and | ||
(v) | Insurance Proceeds means the proceeds of an insurance claim received by any member of the Group (other than to meet a third party claim) and after deducting any reasonable expenses in relation to that claim which are incurred by any member of the Group to persons who are not members of the Group. |
(b) | Upon the occurrence of: |
(i) | a Change of Control; | ||
(ii) | Ronald E. Roark resigns as Vice Chairman and/or Group Chief Executive of the Company or ceases to be employed by the Company or to devote the time and attention to the business, trade and offices of the Group or perform the functions required under the terms of is/her service contract; or | ||
(iii) | the sale of all or substantially all of the assets of the Group, whether in a single transaction or a series of related transactions, |
the Facility will be cancelled, the outstanding Utilisations, together with accrued interest, and all other amounts accrued under the Finance Documents shall become immediately due and payable (together with any amount payable under Clause 9.6 (Make Whole Payments)) and the Commitments shall be reduced to zero. |
(c) | Upon the occurrence of the Permitted Reorganisation and upon the occurrence of the Rooftop Sale, the Company shall ensure that the Borrower prepays the Loans (or, if only the Letter of Credit is outstanding, the Letter of Credit) in the amount of the Disposal Proceeds of the Permitted Reorganisation and in |
39
the amount of the Disposal Proceeds of the Rooftop Sale immediately upon receipt of such Disposal Proceeds (together with any amount payable under Clause 9.6 (Make Whole Payments)). | |||
(d) | Upon the occurrence of any Disposal, the Company shall ensure that the Borrower prepays the Loans (or, if only the Letter of Credit is outstanding, the Letter of Credit) in the amount of the Disposal Proceeds (except for Excluded Disposal Proceeds) within 3 Business Days of receipt of the Disposal Proceeds (together with any amount payable under Clause 9.6 (Make Whole Payments)) and pending such prepayment are credited to an account charged in favour of the Secured Parties. | ||
(e) | The Company shall ensure that Acquisition Proceeds and Insurance Proceeds are applied in prepayment of the Loans (or, if only the Letter of Credit is outstanding, the Letter of Credit) within 3 Business Days of their receipt (together with any amount payable under Clause 9.6 (Make Whole Payments)) and pending such application are credited to an account charged in favour of the Secured Parties. |
9.6 | Make Whole Payments | |
If the Borrower prepays any Loan (or, if only the Letter of Credit is outstanding, the Letter of Credit) (in whole or in part) pursuant to Clause 9.3 (Voluntary prepayment of loans) or Clause 9.5 (Mandatory Prepayment) at any time up to and including the Make Whole Date, the Borrower shall, on the date of such prepayment, pay to the Agent for the account of the Lenders a sum calculated using the formula: |
VP x (M x | N 360 |
) | ||||
1 + (Discount Rate x | N 360 |
) |
where | ||
VP = aggregate of the principal amount of the Loan(s) (or, if only the Letter of Credit is outstanding, the Letter of Credit) prepaid. | ||
M = the Margin on the date of such prepayment. | ||
N = number of days from (and including) the actual date of prepayment to (but excluding) the Make Whole Date. | ||
Discount Rate = EURIBOR in respect of the prepayment date. |
9.7 | Restrictions |
(a) | Any notice of cancellation or prepayment given by any Party under this Clause 9.7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment. |
40
(b) | Any prepayment under this Agreement shall be made together with accrued interest on the principal amount of a Loan prepaid, Break Costs (if any) and any amounts payable under Clause 9.6 (Make Whole Payments), but without any other premium or penalty. | ||
(c) | The Borrower may not reborrow any part of the Facility which is prepaid. | ||
(d) | The Borrower shall not repay or prepay all or any part of the Loans or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement. | ||
(e) | No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated. | ||
(f) | If the Agent receives a notice under this Clause 9.7 it shall promptly forward a copy of that notice to either the Borrower or the affected Lender, as appropriate. | ||
(g) | The Agent shall notify the Lenders as soon as possible of any proposed prepayment under this Clause 8.4 and the Company and the Lenders of any calculation pursuant to Clause 9.6 (Make Whole Payments). |
41
10. | INTEREST | |
10.1 | Calculation of interest | |
The rate of interest on the Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable: |
(a) | Margin; | ||
(b) | EURIBOR; and | ||
(c) | Mandatory Cost, if any. |
10.2 | Payment of interest | |
Subject to Clause 10.5 (Capitalisation of interest), the Borrower shall pay accrued interest on the Loan on the last day of each Interest Period. | ||
10.3 | Default interest |
(a) | If an Obligor fails to pay any amount (other than any amount payable in respect of its Dutch Parallel Debts) payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is 2 per cent higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted the Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing under this Clause 10.3 shall be immediately payable by the Obligor on demand by the Agent. | ||
(b) | If any overdue amount consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan: |
(i) | the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan; and | ||
(ii) | the rate of interest applying to the overdue amount during that first Interest Period shall be 2 per cent. higher than the rate which would have applied if the overdue amount had not become due. |
(c) | Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable. |
42
10.4 | Notification of rates of interest | |
The Agent shall promptly notify the Lenders and the Borrower of the determination of a rate of interest under this Agreement. | ||
10.5 | Capitalisation of interest |
(a) | The Borrower may elect to capitalise a portion of the accrued interest on the Loan due and payable on the last day of each Interest Period pursuant to Clause 10.2 (Payment of interest) or a portion of the accrued Letter of Credit fee due and payable on any date pursuant to Clause 13.3(b) (Fees payable in respect of the Letter of Credit) by serving a Capitalisation Notice on the Agent not later than the Specified Time. | ||
(b) | The portion of the accrued interest or accrued Letter of Credit fee which may be capitalised pursuant to paragraph (a) above shall be an amount calculated using the formula: |
8% x O x | N | |||
360 |
where |
O = | in the case of accrued interest, the amount of the outstanding Loan on the last day of the relevant Interest Period and, in the case of accrued Letter of Credit fee, the outstanding amount of the Letter of Credit on the relevant date for payment of such accrued Letter of Credit Fee; and | ||
N = | in the case of accrued interest, the number of days which have elapsed during the relevant Interest Period and in the case of accrued Letter of Credit fee, the number of days which have elapsed since the last payment date for the Letter of Credit fee, |
(the Capitalised Interest). | |||
(c) | Each Capitalisation Notice delivered to the Agent by the Borrower is irrevocable. | ||
(d) | On the last day of each Interest Period in the case of accrued interest and on the relevant date for payment in the case of accrued Letter of Credit fee, the relevant Capitalised Interest (if any) shall be added to the amount of the outstanding Loan or if there is none, shall be treated as a Loan made on that date and payable in accordance with Clause 8.1 (Repayment of Loans). |
10.6 | Increase in Margin | |
If the Warrants are not issued or any other matter required under Clause 23.36 (a) to (c) (inclusive) (Conditions Subsequent in relation to Warrants) is not satisfied prior to the earlier of the Closing Date and the date falling 68 days after the date of this Agreement (the Margin Increase Date), the Margin shall increase by 6.00 per cent. per annum with effect from (and excluding) the Margin Increase Date until (and including) the date on which the Warrants are issued and such other matters specified |
43
in Clause 23.36 (Conditions Subsequent in relation to Warrants) are satisfied (the Margin Reduction Date). | ||
11. | INTEREST PERIODS | |
11.1 | Selection of Interest Periods |
(a) | Subject to the following paragraphs of this Clause 11.1, each Interest Period shall be three Months, ending on a Quarter Date provided that the first Interest Period for a Loan shall end on the first Quarter Date occurring after its Utilisation Date. | ||
(b) | An Interest Period for a Loan shall not extend beyond the Termination Date. | ||
(c) | Each Interest Period for a Loan shall start on its Utilisation Date or (if already made) on the last day of its preceding Interest Period. If another Loan is already outstanding on the Utilisation Date of the first referred to Loan, then the first Interest Period for the first referred to Loan shall end on the same day as the then current Interest Period for such outstanding Loan(s). |
11.2 | Non-Business Days | |
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that Month (if there is one) or the preceding Business Day (if there is not). | ||
11.3 | Consolidation | |
If two or more Interest Periods for different Loans end on the same date, these Loans will be consolidated into and treated as a single Loan on the last day of such Interest Periods. | ||
12. | CHANGES TO THE CALCULATION OF INTEREST | |
12.1 | Market disruption |
(a) | If a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the rate of interest on each Lenders share of the Loan for the Interest Period shall be the percentage rate per annum which is the sum of: |
(i) | the Margin; | ||
(ii) | the rate notified to the Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in the Loan from whatever source it may reasonably select; and | ||
(iii) | the Mandatory Cost, if any, applicable to that Lenders participation in that Loan. |
44
(b) | In this Agreement Market Disruption Event means at or about noon on the Quotation Day for the relevant Interest Period the Screen Rate is not available and the Agent is unable to determine EURIBOR for the relevant Interest Period. |
12.2 | Alternative basis of interest or funding |
(a) | If a Market Disruption Event occurs and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest. | ||
(b) | Any alternative basis agreed pursuant to paragraph (a) above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties. |
12.3 | Break Costs |
(a) | The Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum. | ||
(b) | Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue. |
13. | FEES | |
13.1 | Arrangement fee | |
The Borrower shall pay to the Arranger (for its own account) an arrangement fee in the amount agreed in a Fee Letter on the earlier of the Closing Date and the last day of the Availability Period. | ||
13.2 | Agency fee | |
The Borrower shall pay to the Agent and the Security Agent (for their own respective accounts) agency fees in the amounts and at the times agreed in a Fee Letter. | ||
13.3 | Fees payable in respect of the Letter of Credit |
(a) | The Borrower shall pay to the Agent (for the account of each Lender) a Letter of Credit fee in Euro (computed at the rate equal to the Margin) on the outstanding amount of the Letter of Credit requested by it for the period from the issue of the Letter of Credit until its Expiry Date or, if earlier, the date upon which payment of a drawing is made under the Letter of Credit and there is then no further amount to be drawn. This fee shall be distributed according to each Lenders L/C Proportion of the Letter of Credit. | ||
(b) | The accrued Letter of Credit fee on a Letter of Credit shall be payable quarterly in arrears and on the Closing Date. The accrued Letter of Credit fee is also payable to the Agent on the cancelled amount of any Lenders |
45
Commitment at the time the cancellation is effective if that Commitment is cancelled in full and the Letter of Credit is prepaid or repaid in full. |
46
14. | TAX GROSS UP AND INDEMNITIES | |
14.1 | Tax definitions | |
In this Agreement: | ||
Tax Credit means a credit against, relief or remission for, or repayment of any Tax; | ||
Tax Deduction means a deduction or withholding for or on account of Tax from a payment under a Finance Document; and | ||
Tax Payment means either the increase in a payment made by an Obligor to a Finance Party under Clause 14.3(d) (Tax gross-up) or a payment made under Clause 14.4(a) (Tax indemnity). |
14.2 | Payments to be free and clear | |
All payments to be made by each Obligor under each Finance Document shall be paid free and clear of and without any Tax Deduction (in each case except to the extent required by law). | ||
14.3 | Tax gross-up |
(a) | The Borrower shall, promptly upon it or an Obligor becoming aware that an Obligor is required by law to make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction), notify the Agent of such requirement or change. | ||
(b) | A Lender, upon becoming aware that an Obligor is required by law to make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction in respect of a payment payable to that Lender), shall notify the Agent of this. If the Agent receives such notification from a Lender it shall notify the Borrower. | ||
(c) | If an Obligor is required by law to make a Tax Deduction it shall make that Tax Deduction and any payment required in connection with any Tax Deduction within the time period and in the minimum amount required by law. | ||
(d) | Except as provided by Clause 14.8 (US filings) below, if a Tax Deduction is required by law to be made by an Obligor or the Agent the amount of the payment due from the Obligor shall be increased to an amount which ensures that, after the making of that Tax Deduction, each relevant Party receives on the due date and retains (free from any liability in respect of such Tax Deduction) a net sum equal to the amount of the payment which it would have received and so retained had no such Tax Deduction been required. | ||
(e) | Within 30 days after making any Tax Deduction or any payment required in connection with any Tax Deduction, the Obligor making that Tax Deduction |
47
or payment shall deliver to the Agent for the relevant Party evidence satisfactory to that Party (acting reasonably) that the Tax Deduction has been made and that any payment which is required in connection with any Tax Deduction has been made to the relevant Tax authority or other person. |
14.4 | Tax indemnity |
(a) | Except as provided by paragraph (b) and Clause 14.8 (US filings) below, the Company shall, or shall procure that an Obligor shall, on demand by the Agent, indemnify a Finance Party against any loss, liability or cost which that Finance Party (in its absolute discretion) determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Finance Party in respect of a Finance Document. | ||
(b) | Paragraph (a) above shall not apply: |
(i) | with respect to any Tax assessed on a Finance Party under the laws of the jurisdiction in which: |
(A) | that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for Tax purposes; or | ||
(B) | that Finance Partys Facility Office is located in respect of amounts received or receivable in that jurisdiction, |
if that Tax is imposed on or calculated by reference to the overall net income received or receivable by that Finance Party. Any sum deemed to be received or receivable, including, for the avoidance of doubt, any amount treated as income but not actually received by the Finance Party (such as a Tax Deduction), is not income received or receivable for this purpose; or |
(ii) | if and to the extent that a loss, liability or cost is compensated for by an increased payment pursuant to Clause 14.3(d) (Tax gross up) or would have been so compensated but was not so compensated solely because one or more of the exclusions contained in paragraph (f) of Clause 14.3 (Tax gross up) applied. |
(c) | A Finance Party making, or intending to make, a claim under paragraph (a) above shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrower. | ||
(d) | A Finance Party shall, on receiving a payment from an Obligor under paragraph (a) above, notify the Agent. |
14.5 | Tax credits | |
If an Obligor makes a Tax Payment and the relevant Finance Party determines, in its sole opinion, that it has obtained, utilised and retained a Tax Credit which is attributable either to an increased payment of which that Tax Payment forms part or to that Tax Payment, that Finance Party shall pay to the relevant Obligor such amount as |
48
that Finance Party determines, in its sole opinion, to be attributable to the relevant Tax Payment and as will leave that Finance Party (after that payment) in the same after Tax position as it would have been in if the Tax Payment had not been required to be made by that Obligor. |
14.6 | Stamp Taxes | |
The Borrower shall, or shall procure that an Obligor shall, pay and, within five Business Days of demand by the Agent, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, stamp duty reserve, documentary, registration and other similar Taxes payable in connection with or in relation to any Finance Document. |
14.7 | VAT |
(a) | All amounts set out in, or expressed to be payable under, a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply, and accordingly, subject to paragraph (c) below, if VAT is chargeable on any supply made by any Finance Party to any Party under a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying the consideration) an amount equal to the amount of the VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such Party). | ||
(b) | If VAT is chargeable on any supply made by any Finance Party (the Supplier) to any other Finance Party (the Recipient) under a Finance Document, and any Party (the Relevant Party) is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such Party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the amount of such VAT. The Recipient shall promptly pay to the Relevant Party an amount equal to any credit or repayment from the relevant Tax authority which it reasonably determines relates to the VAT chargeable on that supply. | ||
(c) | Where a Finance Document requires any Party to reimburse a Finance Party for any costs or expenses, that Party shall also at the same time pay and indemnify the Finance Party against all VAT incurred by the Finance Party in respect of the costs or expenses to the extent that the Finance Party determines in its sole discretion that neither it nor any other member of any group of which it is a member for VAT purposes is entitled to credit or repayment from the relevant Tax authority in respect of the VAT. |
14.8 | US filings |
(a) | Each Lender that is a United States person shall, on or prior to the date of the execution and delivery of this Agreement in the case of an Original Lender and on the date of the Transfer Certificate or Assignment Agreement pursuant to which it becomes a Lender in the case of any other Lender, and from time |
49
to time thereafter as required by law and as reasonably requested in writing by the Agent or the relevant Obligor (but only so long as such Lender remains lawfully able to do so), provide the Agent or the relevant Obligor with two properly completed and duly executed Internal Revenue Service Forms W-9, as appropriate, or any successor or other form prescribed by the Internal Revenue Service, certifying that such Lender is a United States person and is not subject to United States backup withholding tax on payments made by an Obligor that is a United States person pursuant to this Agreement. For purposes of this Clause 14.8, the term United States person shall have the meaning specified in Section 7701(a)(30) of the Internal Revenue Code. |
(b) | Each Lender that is not a United States person, on or prior to the date of the execution and delivery of this Agreement in the case of the Original Lender and on the date of the Transfer Certificate or Assignment Agreement pursuant to which it becomes a Lender in the case of any other Lender, and from time to time thereafter as required by law and as reasonably requested in writing by the Agent or the relevant Obligor (but only so long as such Lender remains lawfully able to do so): |
(i) | in the case of a Lender claiming the benefits of an exemption from or reduction in United States federal withholding tax pursuant to a double taxation agreement between the United States and the jurisdiction of which such Lender is or is treated as a resident, provide the Agent or the relevant Obligor with two properly completed and duly executed Internal Revenue Service Forms W-8BEN, or any successor or other form prescribed by the Internal Revenue Service, certifying that such Lender is exempt from or entitled to a reduced rate of United States federal withholding tax under an applicable double taxation agreement on payments made by an Obligor that is a United States person pursuant to this Agreement; or | ||
(ii) | in the case of a Lender claiming the benefits of an exemption from United States federal withholding tax because the payments otherwise subject to such withholding tax are effectively connected with the Lenders conduct of a trade or business within the United States, provide the Agent or the relevant Obligor with two properly completed and duly executed Internal Revenue Service Forms W-8ECI, or any successor or other form prescribed by the Internal Revenue Service, certifying that such payments are effectively connected with the conduct of a trade or business within the United States; or | ||
(iii) | in the case of a Lender claiming the benefits of the exemption from United States federal withholding tax pursuant to Section 881(c) of the Internal Revenue Code with respect to payments of portfolio interest made by an Obligor that is a United States person pursuant to this Agreement, provide the Agent or the relevant Obligor with (x) a certificate to the effect that such Lender is neither (i) a bank (within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code), (ii) a 10-percent shareholder of the relevant Obligor (within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code) nor (iii) a controlled foreign corporation related to the relevant Obligor (as |
50
such term is described in Section 881(c)(3)(C) of the Internal Revenue Code), and (y) two properly completed and duly executed copies of Internal Revenue Service Forms W-8BEN or any successor or other form prescribed by the Internal Revenue Service, certifying that the Lender is a non-United States person; or |
(iv) | in the case of a Lender that is a foreign intermediary or foreign flow-through entity for United States federal income tax purposes, provide the Agent or the relevant Obligor with respect to such Lender two properly completed and duly executed Internal Revenue Service Forms W-8IMY or any successor or other form prescribed by the Internal Revenue Service, as a basis for claiming exemption from or reduction in United States federal withholding tax on payments made pursuant to this Agreement by an Obligor that is a United States person, together with any supplementary information such Lender is required to transmit with such form and, in the case of a nonqualified intermediary that is a Lender or a non-withholding Lender that is a foreign flow-through entity, with respect to each beneficiary or member of such Lender, two forms or certificates described in sub-clause (i), (ii) or (iii) above of this Clause 14.8, as applicable. |
(c) | If a Lender fails to provide the Agent or the relevant Obligor with the appropriate Internal Revenue Service form or, if applicable, the certificate, each as described above and each being properly completed and duly executed, or to update them as appropriate (other than if the failure to furnish such form or certificate is due to a change in law, or in the interpretation or application thereof, occurring after the date on which the form or certificate originally was required to be provided or if such form, certificate or other document otherwise is not required under subsection (a) or (b) of this Clause 14.8), United States backup withholding tax and United States federal withholding tax, in each case, imposed on any amount paid by an Obligor that is a United States person under this Agreement, shall be considered excluded from the gross-up at Clause 14.3 (Tax gross up) and the indemnity at Clause 14.4 (Tax indemnity) under this Agreement by reason of such failure unless and until the Lender provides the appropriate Internal Revenue Service form or certificate that is properly completed and duly executed and establishing (x) an exemption from United States backup withholding tax and (y) a complete exemption from, or a reduction of, United States federal withholding tax on any amount paid by the relevant Obligor under this Agreement, whereupon United States federal withholding tax at such reduced rate only (to the extent a complete exemption is not available to such Lender) shall be considered excluded from such gross-up and indemnity for periods governed by such form and certificate. If any Internal Revenue Service form provided by a Lender pursuant to this Clause 14.8 at the time such Lender first becomes a Lender hereunder or when it first provides such form indicates a United States federal withholding tax rate in excess of zero in respect of interest paid by the relevant Obligor under this Agreement, United States federal withholding tax at such rate shall be considered excluded from the gross up at Clause 14.3(d) (Tax gross up) and the indemnity at Clause 14.4(a) (Tax indemnity) under this Agreement unless and until such Lender provides the appropriate form |
51
certifying that a lesser rate applies, whereupon United States federal withholding tax at such lesser rate only shall be considered excluded from such gross up or indemnity for periods governed by such form; provided, however, that if at the date a Lender transferee under a Transfer Certificate or assignee under an Assignment Agreement becomes a party to this Agreement, the Lender transferor was entitled to payments under Clauses 14.3 (Tax gross up) or 14.4 (Tax indemnity) in respect of United States federal withholding tax in connection with interest paid at such date, then, to that extent, the payments under Clause 14.3 (Tax gross up) or indemnity under Clause 14.4 (Tax indemnity) shall include (in addition to withholding taxes that may be imposed in the future or other amounts otherwise included therein) an amount of United States federal withholding tax applicable with respect to the Lender transferor on such date. If any form, certificate or document referred to in this Clause 14.8 requires the disclosure of information, other than information necessary to compute the Tax payable and information required on the date hereof by Internal Revenue Service Forms W-9, W-8BEN, W-8ECI, or W-8IMY (as applicable) or the related certificate described above, that a Lender reasonably considers to be confidential, such Lender shall give notice thereof to the Agent or the relevant Obligor and shall not be obligated to include in any such form or document any such confidential information. |
(d) | Without prejudice to the survival of any other agreement of the Obligors hereunder, the agreements and obligations of the Obligor that is a United States person contained in this Clause 14.8 shall survive the payment in full of principal, interest and all other amounts payable hereunder and the termination of this Agreement. |
15. | INCREASED COSTS | |
15.1 | Increased costs |
(a) | Subject to Clause 15.3 (Exceptions) the Borrower shall, within five Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation made after the date of this Agreement. | ||
(b) | In this Agreement Increased Costs means: |
(i) | a reduction in the rate of return from the Facility or on a Finance Partys (or its Affiliates) overall capital; | ||
(ii) | an additional or increased cost; or | ||
(iii) | a reduction of any amount due and payable under any Finance Document, |
which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its |
52
Commitment or funding or performing its obligations under any Finance Document. |
15.2 | Increased cost claims |
(a) | A Finance Party intending to make a claim pursuant to Clause 15.1 (Increased costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower. | ||
(b) | Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs. |
15.3 | Exceptions |
(a) | Clause 15.1 (Increased costs) does not apply to the extent any Increased Cost is: |
(i) | attributable to a Tax Deduction required by law to be made by an Obligor; | ||
(ii) | compensated for by Clause 14.4 (Tax indemnity) (or would have been compensated for under Clause 14.4 (Tax indemnity) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 14.4 (Tax indemnity) applied); | ||
(iii) | compensated for by the payment of the Mandatory Cost; or | ||
(iv) | attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation. |
(b) | In this Clause 15.3, a reference to a Tax Deduction has the same meaning given to the term in Clause 14.1 (Tax definitions). |
16. | OTHER INDEMNITIES | |
16.1 | Currency indemnity |
(a) | If any sum due from an Obligor or the Acquiror under the Finance Documents (a Sum), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the First Currency) in which that Sum is payable into another currency (the Second Currency) for the purpose of: |
(i) | making or filing a claim or proof against that Obligor; | ||
(ii) | obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings, |
that Obligor shall and the Company shall procure that the Acquior shall, as an independent obligation, within three Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy |
53
between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum. |
(b) | Each Obligor waives and the Company shall procure that the Acquiror waives, any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable. |
16.2 | Other indemnities | |
The Borrower shall (or shall procure that an Obligor will), within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of: |
(a) | the occurrence of any Event of Default; | ||
(b) | a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 28 (Sharing among the Finance Parties); | ||
(c) | funding, or making arrangements to fund, its participation in a Utilisation requested by the Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Lender alone); | ||
(d) | a Utilisation (or part of a Utilisation) not being prepaid in accordance with a notice of prepayment given by the Borrower; or | ||
(e) | issuing or making arrangements to issue the Letter of Credit requested by the Borrower in a Utilisation Request but not issued by reason of the operation of one or more of the provisions of this Agreement. |
16.3 | Indemnity to the Agent | |
The Borrower shall promptly indemnify the Agent against any cost, loss or liability incurred by the Agent (acting reasonably) as a result of: |
(a) | investigating any event which it reasonably believes is a Default; or | ||
(b) | acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised. |
16.4 | Indemnity to the Security Agent |
(a) | Each Obligor shall promptly indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them as a result of: |
(i) | the taking, holding, protection or enforcement of the Transaction Security, |
54
(ii) | the exercise of any of the rights, powers, discretions and remedies vested in the Security Agent and each Receiver and Delegate by the Finance Documents or by law; and | ||
(iii) | any default by any Obligor or the Acquiror in the performance of any of the obligations expressed to be assumed by it in the Finance Documents. |
(b) | The Security Agent may, in priority to any payment to the Secured Parties, indemnify itself out of the Charged Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 16.4 and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all monies payable to it. |
17. | MITIGATION BY THE LENDERS | |
17.1 | Mitigation |
(a) | Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 9.1 (Illegality), Clause 14 (Tax gross-up and indemnities), Clause 15.1 (Increased costs) or paragraph 3 of Schedule 4 (Mandatory Cost formulae) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office. | ||
(b) | Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents. |
17.2 | Limitation of liability |
(a) | The Borrower shall indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 17.1 (Mitigation). | ||
(b) | A Finance Party is not obliged to take any steps under Clause 17.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it. |
18. | COSTS AND EXPENSES | |
18.1 | Transaction expenses | |
The Borrower shall promptly on demand pay the Agent, the Arranger, the Issuing Bank and the Security Agent the amount of all costs and expenses (including legal fees) reasonably incurred by any of them in connection with the negotiation, preparation, printing, execution and syndication of: |
(a) | this Agreement and any other documents referred to in this Agreement and the Transaction Security; and |
55
(b) | any other Finance Documents executed after the date of this Agreement. |
18.2 | Amendment costs | |
If (a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required pursuant to Clause 29.9 (Change of currency), the Borrower shall, within five Business Days of demand, reimburse the Agent and the Security Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent and the Security Agent (and, in the case of the Security Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement. |
18.3 | Enforcement and preservation costs | |
The Company shall, within five Business Days of demand, pay to the Arranger and each other Secured Party the amount of all costs and expenses (including legal fees) incurred by it in connection with the enforcement of or the preservation of any rights under any Finance Document and the Transaction Security and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Transaction Security or enforcing these rights. |
56
19. | GUARANTEE AND INDEMNITY | |
19.1 | Guarantee and indemnity | |
Each Guarantor irrevocably and unconditionally jointly and severally: |
(a) | guarantees to each Finance Party punctual performance by the Borrower of all its obligations under the Finance Documents; | ||
(b) | undertakes with each Finance Party that whenever the Borrower does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall promptly within three Business Days of demand pay that amount as if it was the principal obligor; and | ||
(c) | indemnifies each Finance Party promptly within three Business Days of demand against any cost, loss or liability suffered by that Finance Party if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal. The amount of the cost, loss or liability shall be equal to the amount which that Finance Party would otherwise have been entitled to recover. |
19.2 | Continuing guarantee | |
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part. |
19.3 | Reinstatement | |
If any payment by an Obligor or any discharge given by a Finance Party (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is avoided or reduced as a result of insolvency or any similar event: |
(a) | the liability of each Obligor shall continue as if the payment, discharge, avoidance or reduction had not occurred; and | ||
(b) | each Finance Party shall be entitled to recover the value or amount of that security or payment from each Obligor, as if the payment, discharge, avoidance or reduction had not occurred. |
19.4 | Waiver of defences | |
The obligations of each Guarantor under this Clause 19 will not be affected by an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 19 (without limitation and whether or not known to it or any Finance Party) including: |
(a) | any time, waiver or consent granted to, or composition with, any Obligor or the Acquiror or other person; |
57
(b) | the release of any other Obligor or the Acquiror or any other person under the terms of any composition or arrangement with any creditor of any member of the Group; | ||
(c) | the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or the Acquiror or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security; | ||
(d) | any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or the Acquiror or any other person; | ||
(e) | any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security; | ||
(f) | any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or | ||
(g) | any insolvency or similar proceedings. |
19.5 | Guarantor intent | |
Without prejudice to the generality of Clause 19.4 (Waiver of defences), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: (i) acquisitions of any nature; (ii) increasing working capital enabling investor distributions to be made; (iii) carrying out restructurings; (iv) refinancing existing facilities; (v) refinancing any other indebtedness; (vi) making facilities available to new borrowers; (vii) any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and (viii) any fees, costs and/or expenses associated with any of the foregoing. |
19.6 | Immediate recourse | |
Each Guarantor waives any right it may have of first requiring any 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 19. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary. |
19.7 | Appropriations |
58
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may: |
(a) | refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and | ||
(b) | hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantors liability under this Clause 19. |
19.8 | Deferral of Guarantors rights | |
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents: |
(a) | to be indemnified by an Obligor or the Acquiror; | ||
(b) | to claim any contribution from the Acquiror or any other guarantor of any Obligors obligations under the Finance Documents; and/or | ||
(c) | to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party. |
19.9 | Release of Guarantors right of contribution | |
If any Guarantor (a Retiring Guarantor) ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor: |
(a) | that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and | ||
(b) | each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor. |
19.10 | Additional security |
59
This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party. |
19.11 | Other Guarantors | |
It is specifically acknowledged and agreed that the Finance Parties may from time to time make any arrangement, compromise, waiver or other dealing with any Obligor in relation to any guarantee or other obligations under the Finance Documents which such Finance Parties may think fit and no such arrangement, compromise, waiver or other dealing shall exonerate or discharge any other Obligor from its obligations under the Finance Documents. |
19.12 | Guarantee Limitations |
(a) | The guarantee and indemnity obligations of each Guarantor incorporated in England and Wales under this Clause 19 do not apply to any liability to the extent that it would result in the guarantee and indemnity constituting unlawful financial assistance within the meaning of Section 151 of the Companies Act 1985. | ||
(b) | Each of the Parties hereby confirms that it is the intention of all such persons that the obligations of each US Guarantor organised under the laws of any state of the United States of America (a US Guarantor) under this Clause 19 do not constitute a fraudulent transfer or conveyance for the purposes of any proceeding of the type referred to in Clause 24.6 (Insolvency) or 24.7 (Insolvency proceedings) or Title 11, US Bankruptcy Code, the United States Uniform Fraudulent Conveyance Act, the United States Uniform Fraudulent Transfer Act or any similar foreign or state law, to the extent applicable to the obligations of a US Guarantor under this Clause 19. To effect the foregoing intention, the Agent, the Arranger, the Issuing Bank, the Security Agent, the Lenders and the Guarantors hereby irrevocably agree that the obligations of each US Guarantor at any time shall be limited to the maximum amount as will result in the obligations of such US Guarantor under this Clause 19 not constituting a fraudulent transfer or conveyance. |
60
20. | REPRESENTATIONS | |
20.1 | General |
(a) | Each Obligor makes the representations and warranties set out in this Clause 20 to each Finance Party. | ||
(b) | In relation to the representations and warranties made on the date of this Agreement and any other date on or before the Closing Date, it is assumed that Closing has occurred. |
20.2 | Status |
(a) | It and each of its Subsidiaries is a limited liability corporation, or, in the case of Regal Mortgages LLP, a limited liability partnership, duly incorporated or established and validly existing under the law of its jurisdiction of incorporation or establishment. In the case of the Company, the Acquior is a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) or a limited liability company (naamloze vennootschap). | ||
(b) | It and each of its Subsidiaries has the power to own its assets and carry on its business as it is being conducted. |
20.3 | Binding obligations | |
Subject to the Legal Reservations: |
(a) | the obligations expressed to be assumed by it or any of its relevant Subsidiaries in each Transaction Document to which it is, or such Subsidiary is, a party are legal, valid, binding and enforceable obligations; and | ||
(b) | without limiting the generality of paragraph (a) above, each Transaction Security Document to which it is or any of the Subsidiaries is a party creates the security interests which that Transaction Security Document purports to create and those security interests are valid and effective. |
20.4 | Non-conflict with other obligations | |
The entry into and performance by it and, in the case of the Borrower, the Acquiror, of, and the transactions contemplated by, the Transaction Documents and the granting of the Transaction Security do not and will not conflict with: |
(a) | any law or regulation applicable to it; | ||
(b) | the constitutional documents of any member of the Group; or | ||
(c) | any agreement or instrument binding upon it or any member of the Group or any of its or any member of the Groups assets or constitute a default or |
61
termination event (however described) under any such agreement or instrument. |
20.5 | Power and authority | |
Subject to the Legal Reservations: |
(a) | it and each of its relevant Subsidiaries has the power to enter into, perform and deliver, and has taken all necessary action to authorise its or such Subsidiarys entry into, performance and delivery of, the Transaction Documents to which it or such Subsidiary is or will be a party and the transactions contemplated by those Transaction Documents; and | ||
(b) | no limit on its powers or, in the case of the Company, the Acquirors powers, will be exceeded as a result of the borrowing, grant of security or giving of guarantees or indemnities contemplated by the Transaction Documents to which it is a party. |
20.6 | Validity and admissibility in evidence |
(a) | All Authorisations required or desirable: |
(i) | to enable it and each of its relevant Subsidiaries lawfully to enter into, exercise its or such relevant Subsidiarys rights and comply with its or such Subsidiarys obligations in the Transaction Documents to which it or such Subsidiary is a party; and | ||
(ii) | to make the Transaction Documents to which it is or, in the case of the Company, the Acquiror is a party admissible in evidence in its Relevant Jurisdictions, |
have been obtained or effected and are in full force and effect except any Authorisation referred to in paragraph (b) of Clause 20.9 (No filing or stamp taxes), which Authorisations will be promptly obtained or effected after the date of this Agreement. | |||
(b) | All Authorisations necessary for the conduct of the business, trade and ordinary activities of members of the Group have been obtained or effected and are in full force and effect and each Regulated Entity is in compliance with all, and no regulatory body is investigating any of, the capital and liquidity requirements applicable to it. |
20.7 | Governing law and enforcement |
(a) | The choice of governing law of the Finance Documents will be recognised and enforced in its Relevant Jurisdictions. | ||
(b) | Any judgment obtained in relation to a Finance Document in the jurisdiction of the governing law of that Finance Document will be recognised and enforced in its Relevant Jurisdictions. |
62
20.8 | Insolvency |
(a) | corporate action, legal proceeding or other procedure or step described in paragraph (a) of Clause 24.6 (Insolvency); or | ||
(b) | creditors process described in Clause 24.8 (Creditors process), |
has been taken or, to the knowledge of the Company, threatened in relation to a member of the Group; and none of the circumstances described in Clause 24.6 (Insolvency) applies to a member of the Group. |
20.9 | No filing or stamp taxes |
Under the laws of its Relevant Jurisdiction it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents: |
(a) | except: |
(i) | registration of particulars of the English Law Debenture and English Law Share Charge (referred to in paragraph 3(d) of Part 1 of Schedule 2) at the Companies Registration Office in England and Wales under Section 395 of The Companies Act 1985 and payment of associated fees; and | ||
(ii) | registration of particulars of the English Law Debenture (referred to in paragraph 3(d) of Part 1 of Schedule 2) at the Trade Marks Registry at the Patent Office in England and Wales and payment of associated fees; |
which registrations will be made promptly after the date of the relevant Finance Document; |
(b) | except any filing, recording or enrolling or any tax or fee payable in relation to the US Security Agreement referred to in paragraph 3(d) of Part 1 of Schedule 2 which is referred to in any Legal Opinion and which will be made or paid promptly after the date of the relevant Finance Document; and | ||
(c) | the filing of a copy of the Facility Agreement with the Securities and Exchange Commission of the US which filing will be made promptly if so required. |
20.10 | Deduction of Tax |
It is not required and, in the case of the Company, the Acquiror is not required to make any deduction for or on account of Tax from any payment it may make under any Finance Document. |
63
20.11 | No default |
(a) | No Event of Default and, on the date of this Agreement and the Closing Date, no Default is continuing or is reasonably likely to result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Transaction Document. | ||
(b) | No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or termination event (however described) under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries) assets are subject which has or is reasonably likely to have a Material Adverse Effect. |
20.12 | No misleading information |
Save as disclosed in writing to the Agent and the Arranger prior to the date of this Agreement: |
(a) | any factual information contained in the Reports and the Base Case Model (the Information Package) was true and accurate in all material respects as at the date of the relevant report or document containing the information or (as the case may be) as at the date the information is expressed to be given. | ||
(b) | the Base Case Model has been prepared in accordance with the Accounting Principles as applied to the Original Financial Statements, and the financial projections contained in the Base Case Model have been prepared on the basis of recent historical information, are fair and based on reasonable assumptions and have been approved by the board of directors of the Company. | ||
(c) | any financial projection or forecast contained in the Information Package has been prepared on the basis of recent historical information and on the basis of reasonable assumptions and was fair (as at the date of the relevant report or document containing the projection or forecast) and arrived at after careful consideration. | ||
(d) | the expressions of opinion or intention provided by or on behalf of an Obligor or the Acquiror for the purposes of the Information Package were made after careful consideration and (as at the date of the relevant report or document containing the expression of opinion or intention) were fair and based on reasonable grounds. | ||
(e) | no event or circumstance has occurred or arisen and no information has been omitted from the Information Package and no information has been given or withheld that results in the information, opinions, intentions, forecasts or projections contained in the Information Package being untrue or misleading in any material respect. |
64
(f) | all material information provided to a Finance Party by or on behalf of the Company in connection with the Acquisition and/or the Target Group on or before the date of this Agreement and not superseded before that date (whether or not contained in the Information Package) is accurate and not misleading in any material respect and all projections provided to any Finance Party on or before the date of this Agreement have been prepared in good faith on the basis of assumptions which were reasonable at the time at which they were prepared and supplied. | ||
(g) | all other written information provided by any member of the Group (including its advisers) to a Finance Party or the provider of any Report was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any respect. |
The representations and warranties made with respect to the Reports are made by each Obligor in this Clause 20.12 only so far as it is aware after making due and careful enquiries. |
20.13 | Original Financial Statements |
(a) | Its Original Financial Statements were prepared in accordance with the Accounting Principles consistently applied. | ||
(b) | Its unaudited Original Financial Statements fairly represent its financial condition and results of operations (consolidated in the case of Target) for the relevant month. | ||
(c) | Its audited Original Financial Statements give a true and fair view of its financial condition and results of operations (consolidated in the case of Target) during the relevant financial year. | ||
(d) | There has been no material adverse change in its or the Targets assets, business or financial condition (or the assets, business or consolidated financial condition of the Group, in the case of the Company) since 31 December, 2005. | ||
(e) | The Original Financial Statements of the Target do not consolidate the results, assets or liabilities of any person or business which does not form part of the Target Shares. | ||
(f) | Its (and in the case of the Company, the Acquirors) most recent financial statements delivered pursuant to Clause 21.1 (Financial statements): |
(i) | have been prepared in accordance with the Accounting Principles as applied to the Original Financial Statements and the Base Case Model; and | ||
(ii) | give a true and fair view of (if audited) or fairly present (if unaudited) its consolidated financial condition as at the end of, and consolidated results of operations for, the period to which they relate. |
65
(g) | The budgets and forecasts supplied under this Agreement were arrived at after careful consideration and have been prepared in good faith on the basis of recent historical information and on the basis of assumptions which were reasonable as at the date they were prepared and supplied. | ||
(h) | Since the date of the most recent financial statements delivered pursuant to Clause 21.1 (Financial statements) there has been no material adverse change in the business, assets or financial condition of the Group. |
20.14 | No proceedings pending or threatened | |
No litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency which, if adversely determined, are reasonably likely to have a Material Adverse Effect have (to the best of its knowledge and belief (having made all reasonable enquiries)) been started or threatened against it or any of its Subsidiaries. |
20.15 | No breach of laws |
(a) | It has not (and none of its Subsidiaries has) breached any law or regulation to which it or its Subsidiaries (as applicable) is subject which breach has or is reasonably likely to have a Material Adverse Effect. | ||
(b) | No labour disputes are current or, to the best of its knowledge and belief (having made all reasonable enquiries), threatened against any member of the Group which have or are reasonably likely to have a Material Adverse Effect. |
20.16 | Environmental laws |
(a) | Each member of the Group is in compliance with Clause 23.3 (Environmental compliance) and to the best of its knowledge and belief (having made all reasonable enquiries) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect. | ||
(b) | No Environmental Claim has been commenced or (to the best of its knowledge and belief (having made all reasonable enquiries)) is threatened against any member of the Group where that claim has or is reasonably likely, if determined against that member of the Group, to have a Material Adverse Effect. | ||
(c) | The cost to the Group of compliance with Environmental Laws (including Environmental Permits) is (to the best of its knowledge and belief, having made all reasonable enquiries) adequately provided for in the Base Case Model. |
20.17 | Taxation |
(a) | It is not (and none of its Subsidiaries is) materially overdue in the filing of any Tax reports or returns or liable to pay any material tax penalties and it is not (and none of its Subsidiaries is) overdue in the payment of any amount in respect of Tax save where the payment of such Taxes is contested in good |
66
faith by a member of the Group and where full provision has been made in the accounts of such Group member for the relevant Tax liabilities and such non-payment will not result in a Security ranking prior to the Transaction Security. |
(b) | No claims, tax audits or investigations are being, nor, to the best of its knowledge and belief (having made all reasonable enquiries), are reasonably likely to be, made or conducted against it or any of its Subsidiaries with respect to Tax which would result, or be reasonably likely to result, in liabilities of or claims against any members of the Group which would have a Material Adverse Effect or result in the creation of a Security ranking prior to the Transaction Security. | ||
(c) | Each of the Obligors and, in the case of the Company, the Acquiror is resident for Tax purposes only in the jurisdiction of its incorporation. |
20.18 | Security and Financial Indebtedness |
(a) | No Security exists over all or any of its present or future assets or shares or the present or future assets or shares of any of its Subsidiaries other than a Permitted Security. | ||
(b) | Neither it nor any of its Subsidiaries has any outstanding Financial Indebtedness or guarantees other than a Permitted Financial Indebtedness. |
20.19 | Ranking |
The Transaction Security has or will have the ranking in priority which it is expressed to have in the Transaction Security Documents and it is not subject to any prior ranking or pari passu ranking Security. |
20.20 | Good title to assets |
It and, so far as it is aware, each of its Subsidiaries has a good, valid and marketable title to, or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary to carry on its business as presently conducted. |
20.21 | Legal and beneficial ownership |
(a) | It and, so far as it is aware, each of its Subsidiaries is the sole legal and beneficial owner of the respective assets over which it purports to grant Security. | ||
(b) | All the Target Shares are or will be on the Closing Date legally and beneficially owned by the Acquiror free from any claims, third party rights or competing interests other than Permitted Security permitted under Clause 23.14 (Negative pledge). |
20.22 | Shares |
The shares and, if applicable, limited partnership interests of any member of the Group which are (or are required by this Agreement to become) subject to the Transaction Security are (or will on the Closing Date be) issued, fully paid (and, in |
67
the case of limited partnership interests, have not been repaid), non-assessable and are not subject to any option to purchase or similar rights. The constitutional documents of companies whose shares are (or are required by this Agreement to become) subject to the Transaction Security do not and could not restrict or inhibit any transfer of those shares on creation or enforcement of the Transaction Security, save as required by law and specified in the Legal Opinions required to be delivered in connection with the relevant Transaction Security pursuant to this Agreement. Except as provided in the Warrant Documents, there are no agreements in force which provide for the issue or allotment of, or grant any person the right to call for the issue or allotment of, any share or loan capital of any member of the Group or the Target (including any conditional right and any option or right of pre-emption, exchange or conversion). |
20.23 | Structure Memorandum |
(a) | The Structure Memorandum accurately records the shareholding structure of the Group as at the date of this Agreement and as it will be immediately following Closing and immediately following completion of Transaction 1, Transaction 2 and Transaction 3 (as each are defined in the BT Treasury Letter), and includes the following information: |
(i) | accurate details of each member of the Group, including its current name and company registration number, its jurisdiction of incorporation and/or establishment, a list of its shareholders and their percentage ownership or is not a company with limited liability; and | ||
(ii) | accurate details of any minority interests in any member of the Group held by any person who is not a member of the Group and accurate details of all companies, joint ventures, partnerships and other persons in which any member of the Group has an interest or participation. |
(b) | All necessary intra-Group loans, transfers, share exchanges and other steps resulting in the final Group structure are set out in the Structure Memorandum and have been or will be made or taken in compliance with all relevant laws and regulations and all requirements of relevant regulatory authorities. | ||
(c) | Crown Intressenter AB is in the course of being liquidated and dissolved. |
20.24 | Intellectual Property |
It and each of its Subsidiaries: |
(a) | is the sole legal and beneficial owner of or has licensed to it on normal commercial terms all the Intellectual Property which is material in the context of its business and which is required by it in order to carry on its business as it is being conducted and as contemplated in the Base Case Model; | ||
(b) | does not (nor does any of its Subsidiaries), in carrying on its businesses, infringe any Intellectual Property of any third party in any respect which has or is reasonably likely to have a Material Adverse Effect; and |
68
(c) | has taken all formal or procedural actions (including payment of fees) required to maintain any material Intellectual Property owned by it. |
20.25 | Accounting reference date | |
The accounting reference date of each member of the Group is 31 December. |
20.26 | Acquisition Documents, disclosures and other Documents |
(a) | The Acquisition Documents contain all the terms of the Acquisition. | ||
(b) | There is no disclosure made to the Acquisition Documents which has or may have a material adverse effect on any of the information, opinions, intentions, forecasts and projections contained or referred to in the Information Package. | ||
(c) | To the best of its knowledge no representation or warranty given by any party to the Acquisition Documents is untrue or misleading in any material respect. |
20.27 | Pensions |
(a) | Neither it nor any of its Subsidiaries is or has at any time been an employer (for the purposes of Sections 38 to 51 of the Pensions Act 2004) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pensions Schemes Act 1993); and | ||
(b) | Neither it nor any of its Subsidiaries is or has at any time been connected with or an associate of (as those terms are used in Sections 39 and 43 of the Pensions Act 2004) such an employer. | ||
(c) | The pension schemes of each member of the Group are funded to the extent required by law or otherwise comply with the requirements of any material law applicable in the jurisdiction in which the relevant pension scheme is maintained, in each case, where failure to do so could reasonably be expected to have a Material Adverse Effect. |
20.28 | No adverse consequences |
(a) | It is not necessary under the laws of its Relevant Jurisdictions: |
(i) | in order to enable any Finance Party to enforce its rights under any Finance Document; or | ||
(ii) | by reason of the execution of any Finance Document or the performance by it of its obligations under any Finance Document, |
that any Finance Party should be licensed, qualified or otherwise entitled to carry on business in any of its Relevant Jurisdictions; and |
(b) | No Finance Party is or will be deemed to be resident, domiciled or carrying on business in its Relevant Jurisdictions by reason only of the execution, performance and/or enforcement of any Finance Document. |
69
20.29 | Holding Company |
Except as may arise under the Transaction Documents, before the Closing Date the Borrower has not traded or incurred any liabilities or commitments (actual or contingent, present or future) other than acting as a Holding Company of the Acquiror. |
20.30 | US government regulations |
(a) | Neither it, nor any of its Subsidiaries, is an investment company, or an affiliated person of, or promoter or principal underwriter for, an investment company, as such terms are defined in the Investment Company Act of 1940, as amended. Neither the making of any Utilisation, nor the application of the proceeds or repayment thereof by any Obligor, nor the consummation of the other transactions contemplated hereby, will violate any provision of such Act or any rule, regulation or order of the Securities and Exchange Commission thereunder. | ||
(b) | No Obligor is and, in the case of the Company, the Acquiror is not engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System of the United States of America) as in effect from time to time, and no proceeds of any Loan will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying any margin stock. |
20.31 | Employee Benefit Plans |
(a) | No ERISA Event has occurred or is reasonably expected to occur that has resulted in or is reasonably expected to result in a material liability of it or its Subsidiaries or any ERISA Affiliate. | ||
(b) | Schedule B (Actuarial Information) to the most recent annual report (Form 5500 Series) for each Plan that has been filed with the Employee Benefits Security Administration of the United States of America, is complete and accurate and fairly presents the funding status of such Plan, and since the date of such Schedule B there has been no material adverse change in such funding status. | ||
(c) | Neither it nor any ERISA Affiliate has incurred or is reasonably expected to incur any Withdrawal Liability to any Multiemployer Plan to the extent such incurrence would have or be reasonably likely to have a Material Adverse Effect. | ||
(d) | Neither it nor any ERISA Affiliate has been notified in writing by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganisation or has been terminated, within the meaning of Title IV of ERISA, and no such Multiemployer Plan is reasonably expected to be in reorganisation or to be terminated, within the meaning of Title IV of ERISA. |
70
20.32 | Solvency |
If it is an Obligor organised under the laws of any state of the United States of America, it and each of its Subsidiaries which is organised under the laws of any state of the United States of America is US Solvent. |
20.33 | Times when representations made |
(a) | All the representations and warranties in this Clause 20 are made by each Original Obligor on the date of this Agreement, the first Utilisation Date, the Closing Date and the date of payment of a claim under the Letter of Credit. | ||
(b) | All the representations and warranties in this Clause 20 are deemed to be made by each Obligor on the Closing Date. | ||
(c) | The Repeating Representations are deemed to be made by each Obligor on the date of each Utilisation Request, on each Utilisation Date and on the first day of each Interest Period (except that those contained in paragraphs (a) (e) of Clause 20.13 (Original Financial Statements) will cease to be so made once subsequent financial statements have been delivered under this Agreement). | ||
(d) | All the representations and warranties in this Clause 20 except Clause 20.12 (No misleading information), Clause 20.23 (Structure Memorandum), Clause 20.26 (Acquisition Documents, disclosures and Other Documents) and Clause 20.29 (Holding Companies) are deemed to be made by each Additional Obligor on the day on which it becomes (or it is proposed that it becomes) an Additional Obligor. | ||
(e) | Each representation or warranty deemed to be made after the date of this Agreement shall be deemed to be made by reference to the facts and circumstances existing at the date the representation or warranty is deemed to be made. |
21. | INFORMATION UNDERTAKINGS |
The undertakings in this Clause 21 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force. | ||
In this Clause 21: | ||
Annual Financial Statements means the financial statements for a Financial Year delivered pursuant to paragraph (a) of Clause 21.1 (Financial statements). | ||
Monthly Financial Information means the financial information delivered pursuant to paragraph (d) of Clause 21.1 (Financial statements). | ||
Quarterly Financial Statements means consolidated quarterly financial statements for a Financial Quarter. |
71
21.1 | Financial statements |
The Company shall supply to the Agent in sufficient copies for all the Lenders: |
(a) | as soon as they are available, but in any event within 90 days after the end of each of its Financial Years: |
(i) | its audited consolidated financial statements for that Financial Year; | ||
(ii) | the audited financial statements (consolidated if appropriate) of each Obligor and the Acquiror for that Financial Year; and | ||
(iii) | the audited financial statements of any other Subsidiary for that Financial Year if requested by the Agent; |
(b) | as soon as they become available, but in any event within 90 days after the end of the first two Financial Quarters of each Financial Year, its consolidated financial statements for that financial half-year; | ||
(c) | as soon as they are available, but in any event within 45 days after the end of each Financial Quarter of each of its Financial Years its consolidated financial statements for that Financial Quarter as filed with the Securities and Exchange Commission of the US together with, if the Agent so requests, the related working papers and, in relation to the Acquiror, a consolidated balance sheet for the Acquiror Group as at the end of such Financial Quarter; | ||
(d) | as soon as they are available, but in any event within 30 days after the end of each month the financial information package, comprising such monthly management information as the Company and its Subsidiaries prepare together with such further information as the Agent may reasonably request. |
21.2 | Provision and contents of Compliance Certificate |
(a) | The Company shall supply a Compliance Certificate to the Agent with each set of its audited consolidated Annual Financial Statements and each set of its consolidated Quarterly Financial Statements. | ||
(b) | The Compliance Certificate shall, amongst other things, set out (in reasonable detail) computations as to compliance with Clause 22 (Financial Covenants). | ||
(c) | Each Compliance Certificate shall be signed by two directors of the Company and, if required to be delivered with the consolidated Annual Financial Statements of the Company, shall be reported on by the Companys Auditors in the form required by the Majority Lenders (acting reasonably). |
21.3 | Requirements as to financial statements |
(a) | The Company shall procure that each set of Annual Financial Statements and Quarterly Financial Statements includes a balance sheet, profit and loss account and cashflow statement. In addition the Company shall procure that: |
72
(i) | each set of Annual Financial Statements shall be audited by the Auditors; and | ||
(ii) | each set of Quarterly Financial Statements includes a cashflow forecast in respect of the Group relating to the three month period commencing at the end of the relevant Financial Quarter. |
(b) | Each set of financial statements delivered pursuant to Clause 21.1 (Financial statements): |
(i) | shall be certified by a director of the relevant company as giving a true and fair view of (in the case of Annual Financial Statements for any Financial Year), or fairly representing (in other cases), its financial condition and operations as at the date as at which those financial statements were drawn up and, in the case of the Annual Financial Statements, shall be accompanied by any letter addressed to the management of the relevant company by the Auditors and accompanying those Annual Financial Statements; | ||
(ii) | in the case of consolidated financial statements of the Group, shall be accompanied by a statement by the directors of the Company comparing actual performance for the period to which the financial statements relate to: |
(A) | the projected performance for that period set out in the Budget; and | ||
(B) | the actual performance for the corresponding period in the preceding Financial Year of the Group; and |
(iii) | shall be prepared using the Accounting Principles, accounting practices and financial reference periods consistent with those applied in the preparation of the Base Case Model unless, in relation to any set of financial statements, the Company notifies the Agent that there has been a change in the Accounting Principles or the accounting practices and its Auditors (or, if appropriate, the Auditors of the Obligor or the Acquiror) deliver to the Agent: |
(A) | a description of any change necessary for those financial statements to reflect the Accounting Principles or accounting practices upon which the Base Case Model was prepared; and | ||
(B) | sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to determine whether Clause 22 (Financial Covenants) has been complied with and to make an accurate comparison between the financial position indicated in those financial statements and the Base Case Model. |
73
Any reference in this Agreement to any financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Base Case Model was prepared. | |||
(c) | If the Agent wishes to discuss the financial position of any member of the Group with the Auditors, the Agent may notify the Company, stating the questions or issues which the Agent wishes to discuss with the Auditors. In this event, the Company must ensure that the Auditors are authorised (at the expense of the Company): |
(i) | to discuss the financial position of each member of the Group with the Agent on request from the Agent; and | ||
(ii) | to disclose to the Agent for the Finance Parties any information which the Agent may reasonably request. |
21.4 | Budget |
(a) | The Company shall supply to the Agent in sufficient copies for all the Lenders, as soon as the same become available but in any event within 90 days before the start of each of its Financial Years, an annual Budget for that financial year. | ||
(b) | The Company shall ensure that each Budget: |
(i) | is in a form and has a level of information reasonably acceptable to the Agent and shall include: |
(A) | a projected consolidated profit and loss account and cashflow statement of the Group for that Financial Year and for each quarter of that Financial Year; | ||
(B) | a projected consolidated balance sheet of the Group as at the end of each quarter of that Financial Year; | ||
(C) | Capital Expenditure, investments, acquisitions and disposals projected to be made by the Group during each quarter of that Financial Year; | ||
(D) | projected covenant calculations in respect of each financial covenant undertaking contained in Clause 22 (Financial Covenants) as at the end of or, as the case may be, in respect of the 12 Months ending at the end of each quarter of that Financial Year; and | ||
(E) | a management commentary on such budget (commenting on proposed activities of the Group during that Financial Year and the principal assumptions upon which the Budget was prepared); |
74
(ii) | is prepared in accordance with the Accounting Principles and the accounting practices and financial reference periods applied to financial statements under Clause 21.1 (Financial statements); and | ||
(iii) | has been approved by the board of directors of the Company. |
(c) | If the Company updates or changes the Budget, it shall within five Business Days of the update or change being made deliver to the Agent, in sufficient copies for each of the Lenders, such updated or changed Budget together with a written explanation of the main changes in that Budget. |
21.5 | Management calls | |
Once in each Month and at any other time if requested to do so by the Agent if the Agent reasonably suspects that a Default is continuing or may have occurred or may occur, at least two directors (one of whom shall be the Group chief executive officer or the chief finance director shall participate on a conference call with the Finance Parties at a time and venue agreed with the Agent concerning the ongoing business and financial performance of the Group and such other matters related thereto as the Agent shall reasonably request (acting on the instructions of any Lender). | ||
21.6 | Year-end |
(a) | The Company shall not change its Accounting Reference Date. | ||
(b) | The Company shall procure that each quarterly accounting period and each Financial Quarter of each member of the Group ends on an accounting date. |
21.7 | Information: miscellaneous | |
The Company shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests): |
(a) | at the same time as they are dispatched, copies of all documents dispatched by the Company to its shareholders generally (or any class of them) or dispatched by the Company, the Acquiror or any Obligors to its creditors generally (or any class of them) or otherwise filed with the Securities and Exchange Commission of the US; | ||
(b) | promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any member of the Group, and which, if adversely determined, are reasonably likely to have a Material Adverse Effect or any material regulatory claim, investigation or proceeding involving any member of the Group; | ||
(c) | promptly upon becoming aware of the relevant claim, the details of any claim which is current, threatened or pending against the Vendor or any other person in respect of the Acquisition Documents and details of any disposal which will require a prepayment under Clause 9.5 (Mandatory Prepayment); |
75
(d) | promptly, such information as the Security Agent may reasonably require about the Charged Property and compliance of the Obligors and the Acquiror with the terms of any Transaction Security Documents; | ||
(e) | promptly following any change to the membership or structure of the Group or the ownership of any member of the Group, a copy of the Group Structure Chart amended to reflect such change; | ||
(f) | promptly following the Closing Date, a calculation of the Total Net Worth immediately following the Closing Date certified by two directors of the Company and, promptly following the occurrence of the Permitted Reorganisation, a calculation of the Total Net Worth immediately following the occurrence of the Permitted Reorganisation certified by two directors of the Company; and | ||
(g) | promptly on request, such further information regarding the financial condition, assets and operations of the Group and/or any member of the Group (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by any Obligor under this Agreement, any changes to management of the Group and an up to date copy of its Shareholders register (or equivalent in its jurisdiction of incorporation)) as any Finance Party through the Agent may reasonably request. |
21.8 | Notification of default |
(a) | Each Obligor shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor). | ||
(b) | Promptly upon a request by the Agent, the Company shall supply to the Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it). |
21.9 | Investigations |
(a) | If an Event of Default has occurred and is continuing or if the Majority Lenders believe in good faith and on reasonable grounds that any financial statements or calculations provided by any member of the Group are inaccurate or incomplete in any material respect, the Agent (acting on the instructions of the Majority Lenders) may (following consultation with the Company as to the scope of the investigation): |
(i) | instruct (or require the Company to instruct) the Auditors or another firm of accountants selected by the Agent to carry out an investigation into the affairs of the Group and/or the financial performance of the Group and/or the accounting and other reporting procedures and standards of the Group; and/or |
76
(ii) | instigate such other investigations and commission such other reports (including, without limitation, legal and valuation reports) as the Agent (acting on the instructions of the Majority Lenders) shall reasonably require into the affairs of the Group, |
in each case, to the extent that the Agent (acting reasonably) considers them to be necessary to establishing the accuracy of such financial statements. The reasonable expense of any such investigations or reports shall be borne by the Company, unless the Company provides all information necessary to show that such financial statements or calculations are not materially inaccurate or incomplete prior to the exercise by the Agent of the rights specified in paragraph (i) or (ii) above following a request from the Agent made on reasonable notice. The Company shall take all reasonable steps to ensure that each of its Subsidiaries co-operates fully with any person conducting an investigation or preparing a report referred to in this paragraph (a). | |||
(b) | If the Agent wishes to discuss the financial position of any member of the Group with the Auditors, the Agent may notify the Company, stating the questions or issues which the Agent wishes to discuss with the Auditors. In this event, the Company must ensure that the Auditors are authorised (at the expense of the Company): |
(i) | to discuss the financial position of each member of the Group with the Agent on request from the Agent; and | ||
(ii) | to disclose to the Agent for distribution to the Finance Parties any information which the Agent may reasonably request. |
21.10 | Use of websites |
(a) | The Company and the Borrower may satisfy its obligation under this Agreement to deliver any information in relation to those Lenders ( the Website Lenders) who accept this method of communication by posting this information onto an electronic website designated by the Borrower and the Agent (the Designated Website) if: |
(i) | the Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method; | ||
(ii) | each of the Company, Borrower and the Agent are aware of the address of and any relevant password specifications for the Designated Website; and | ||
(iii) | the information is in a format previously agreed between the Company and the Agent and capable of being posted on the Designated Website. |
77
If any Lender (a Paper Form Lender) does not agree to the delivery of information electronically then the Agent shall notify the Borrower accordingly and the Company and the Borrower shall supply the information to the Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event the Company and the Borrower shall supply the Agent with at least one copy in paper form of any information required to be provided by it. | |||
(b) | The Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by the Borrower and the Agent. | ||
(c) | The Company shall promptly upon becoming aware of its occurrence notify the Agent if: |
(i) | the Designated Website cannot be accessed due to technical failure; | ||
(ii) | the password specifications for the Designated Website change; | ||
(iii) | any new information which is required to be provided under this Agreement is posted onto the Designated Website; | ||
(iv) | any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or | ||
(v) | the Company becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software. |
If the Company notifies the Agent under paragraph (c)(i) or paragraph (c)(v) above, all information to be provided by the Company and the Borrower under this Agreement after the date of that notice shall be supplied in paper form unless and until the Agent and each Website Lender is satisfied that the circumstances giving rise to the notification are no longer continuing. | |||
(d) | Any Website Lender may request, through the Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website. The Company and the Borrower shall comply with any such request within ten Business Days. |
21.11 | Know your customer checks |
(a) | If: |
(i) | the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement; | ||
(ii) | any change in the status of an Obligor or the Acquiror after the date of this Agreement; or |
78
(iii) | a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer, |
obliges the Agent or any Lender (or, in the case of paragraph (iii) above, any prospective new Lender) to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in paragraph (iii) above, on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in paragraph (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents. Without prejudice to the foregoing, each Obligor will provide to the Finance Parties its name, address and such other information as will allow each of the Finance Parties to identify such Obligor and its Subsidiaries to the extent necessary under the Financial Services Act 1996, the Patriot Act and any applicable Anti-Terrorism Laws. | |||
(b) | Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary know your customer or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents. | ||
(c) | If the accession of such Additional Guarantor obliges the Agent or any Lender to comply with know your customer or similar identification procedures in circumstances where the necessary information is not already available to it, the Company shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or on behalf of any prospective new Lender) in order for the Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with all necessary know your customer or other checks in relation to any relevant person pursuant to the accession of such Subsidiary to this Agreement as an Additional Guarantor. |
22. | FINANCIAL COVENANTS | |
22.1 | Financial definitions: In this Agreement, unless the context requires otherwise, the following expressions shall have the following meanings, and each of the expressions shall refer to the position of the Group on a consolidated basis, unless the context otherwise requires and amounts shall not be double-counted: | |
Borrowings means Financial Indebtedness save for any Financial Indebtedness for or in respect of the items set out in paragraphs (j) or (l) (to the extent it relates to a |
79
guarantee of any of the items referred to in paragraph (j)) of the definition of Financial Indebtedness. | ||
Capital Expenditure means any expenditure or obligation in respect of expenditure of the Group which should be treated as capital expenditure in the consolidated accounts of the Group in accordance with Accounting Principles and, to the extent any capital expenditure is financed by any finance lease, hire purchase or similar arrangement, including the capital element of any expenditure or obligation incurred in connection with such finance lease or similar arrangement. | ||
Cashflow means, in respect of any Financial Quarter and without double counting any amount, EBITDA for that period: |
(a) | less the aggregate of all Capital Expenditure paid by members of the Group during that period; | ||
(b) | less any increase in the amount of Working Capital during that period; | ||
(c) | less any extraordinary or exceptional items paid in cash (including any post-closing adjustments paid in cash by any member of the Group pursuant to the terms of the Acquisition Agreement) during that period; | ||
(d) | less any Tax paid during that period by any member of the Group; | ||
(e) | less any decrease in provisions and other non-cash credits, which are not Current Assets or Current Liabilities, taken into account in establishing EBITDA; | ||
(f) | less (to the extent already included) the amount of any Disposal Proceeds and Acquisition Proceeds which are applied in prepayment of the Loans or provision of cash cover in accordance with this Agreement; | ||
(g) | plus any decrease in Working Capital during that period; | ||
(h) | plus any extraordinary or exceptional items received in cash during that period other than, but only to the extent not applied to mandatory prepayment of the Facility in accordance with this Agreement, any post closing adjustment payments pursuant to the Acquisition Agreement during the relevant period; | ||
(i) | plus any Tax rebate received in cash during that period; | ||
(j) | plus any increase in provisions and other non-cash debits and non-cash charges (which are not Current Assets or Current Liabilities) taken into account in establishing EBITDA; and | ||
(k) | plus the amount of any dividends or other profit distributions (net of Tax) received in cash by any member of the Group during that period from companies which are not members of the Group and less any dividends or other distributions paid to minority shareholders of any member of the Group (other than the Company) or paid to any Restricted Person. |
80
Current Assets means the aggregate of all inventory, trade and other receivables in respect of operating items of each member of the Group including sundry debtors (excluding cash at bank, Cash Equivalent Investments, cash on hand and Interest Receivable due to mature within 12 months of the date of computation) and excluding: |
(a) | receivables in relation to Tax; | ||
(b) | extraordinary items, exceptional items and other non-operating items; | ||
(c) | insurance claims; and | ||
(d) | amounts due from the Vendor in connection with the Acquisition. |
Current Liabilities means the aggregate of all liabilities of each member of the Group falling due within 12 months of the date of computation (including trade and other creditors, accruals, provisions and prepayments) falling due within such 12 month period excluding: |
(a) | interest payable and liabilities for borrowings; | ||
(b) | liabilities for Tax; | ||
(c) | extraordinary items, exceptional items and non-operating items; | ||
(d) | insurance claims; | ||
(e) | liabilities for dividends declared but not paid by the Company; and | ||
(f) | amounts due to the Vendor in connection with the Acquisition. |
EBIT means, in respect of any Financial Quarter, the consolidated profit on ordinary activities of the Group for such period: |
(a) | before any deduction for corporation Tax or other Taxes on income or gains; | ||
(b) | before any deduction for Interest Payable and any addition for Interest Receivable; | ||
(c) | before taking into account any items which are extraordinary or exceptional items; | ||
(d) | after deducting the amount of profit of any member of the Group (other than the Company) which is attributable to any third party (not being a member of the Group) which is a shareholder or partner in such member of the Group; | ||
(e) | after deducting the amount of any profit of any investment or entity (which is not itself a member of the Group) in which any member of the Group has an ownership interest to the extent that the amount of such profit included in the financial statements of the Group exceeds the amount (net of applicable withholding tax) received in cash by members of the Group through distributions by such investment or entity; |
81
(f) | after deducting any gain over book value arising in favour of a member of the Group on the disposal of any business or asset (not being any disposals made in the ordinary course of trading) during such period and any gain arising on any fair value revaluation of any business, asset or liability during such period; | ||
(g) | after adding back any non-cash loss against book value incurred by a member of the Group on the disposal of any business or asset (not being any disposals made in the ordinary course of trading) during such period and any non-cash loss arising on any fair value revaluation of any business, asset or liability during such period; | ||
(h) | before taking account of any realised and unrealised exchange gains and losses including those arising on the translation of Borrowings in a foreign currency; and | ||
(i) | adding back (to the extent otherwise deducted) restructuring costs and transaction costs contemplated in the Structure Memorandum up to an amount not exceeding 100,000; |
in each case, to the extent added, deducted or taken into account, as the case may be, for the purposes of determining profits of the Group from ordinary activities before Taxes. | ||
EBITDA means, in respect of any Relevant Period or Financial Quarter, EBIT for such period adding back depreciation of tangible assets and amortisation of goodwill or intangible assets during that period, to the extent deducted in arriving at EBIT. | ||
Financial Month means each monthly period by reference to which management accounts of the Group Companies are prepared. | ||
Financial Quarter means each of the quarterly periods ending on 31 March, 30 June, 30 September and 31 December in each Financial Year by reference to which the quarterly management accounts of members of the Group are prepared. | ||
Financial Year means each period ending on its Accounting Reference Date in respect of which annual audited consolidated financial statements of the Group are required to be prepared. | ||
Fixed Charge Cover means the ratio of Cashflow to Total Debt Service. | ||
Interest Cover means the ratio of EBITDA to Net Interest Payable. | ||
Interest Payable means, in respect of any Relevant Period or Financial Quarter, interest, commission, fees, discounts, repayment and prepayment premia and other finance payments accrued in respect of any Borrowings of any member of the Group for that period whether paid or payable or capitalised: |
(a) | including the amount of the discount element of any Borrowings amortised during that period; | ||
(b) | excluding any obligation owed by any member of the Group to any other member of the Group; |
82
(c) | including the interest element of payments on leases and other arrangements of the type referred to in paragraph (e) of the definition of Financial Indebtedness; | ||
(d) | including any commission, discounts, repayment and prepayment premia and other finance payments payable by members of the Group under interest rate hedging arrangement in relation to that period; | ||
(e) | excluding any accrued commission, discounts, repayment and prepayment premia and other finance payments payable to members of the Group under any interest rate hedging arrangement; | ||
(f) | excluding amortisation of agreed restructuring costs or transaction costs, to the extent otherwise included; and | ||
(g) | including the amount of cash dividends or other dividends paid by the Parent in that period. |
Interest Receivable means, in respect of any Relevant Period or Financial Quarter, the amount of accrued interest, commission, fees, discounts, repayment and prepayment premia and other finance payments due and payable in cash to members of the Group (other than by other members of the Group) during such period whether or not paid. | ||
Model means the financial model set out in Schedule 11 (Model). | ||
Net Interest Payable means, in respect of any Relevant Period or Financial Quarter, the amount of Interest Payable less the amount of Interest Receivable during such period (excluding any such Interest Receivable which is capitalised or rolled-up or otherwise not currently payable in respect of the period and any Interest Receivable to the extent deemed irrecoverable). | ||
Relevant Cash Equivalent Investments means Cash Equivalent Investments where securities or certificates would, if exchanged into cash, be freely and immediately available to be applied in repayment or prepayment of the Facility or in repayment or prepayment of Financial Indebtedness incurred by such member of the Group in the jurisdiction in which such Cash Equivalent Investments are held. | ||
Relevant Period means a twelve month covenant testing period. | ||
Total Debt means, at any time, the aggregate outstanding principal or capital amount of all Borrowings of the Group but: |
(a) | excluding any Borrowings owed by one member of the Group to any other member of the Group; and | ||
(b) | including in the case of finance leases and other items referred to in paragraph (d) of the definition of Financial Indebtedness only the capitalised value, |
and so that guarantees shall be excluded to the extent the guaranteed Financial Indebtedness has been taken into account and no amount shall be included or excluded more than once. |
83
Total Debt Service means, in respect of any Relevant Period or Financial Quarter, the aggregate of: |
(a) | Net Interest Payable for that period; | ||
(b) | the aggregate of all scheduled repayments of the Facility falling due during that period (as adjusted as a result of any voluntary or mandatory prepayments); and | ||
(c) | the aggregate of all scheduled repayments and all prepayments (whether voluntary or mandatory) of principal under the terms of any other Borrowings of any member of the Group (excluding any Borrowings between any member of the Group and any other member of the Group) falling due during that period: |
(i) | including, without limitation, the capital element of any payments falling due in respect of any Borrowings falling within paragraph (e) of the definition of Financial Indebtedness; and | ||
(ii) | excluding any repayment or prepayment of any overdraft, ancillary or revolving credit facility falling due during that period and capable of being simultaneously redrawn under the terms of the relevant facility, |
and so that no amount shall be included more than once. | ||
Total Leverage means the ratio of Total Debt to EBITDA. | ||
Total Net Debt means, at any time, Total Debt but deducting the aggregate amount of Cash and Relevant Cash Equivalent Investments held by any member of the Group at the relevant time. | ||
Total Net Leverage means the ratio of Total Net Debt to EBITDA. | ||
Total Net Worth means at a particular time: |
(a) | the amount (including any share premium) for the time being paid up or credited as paid up on the issued share capital of the Acquiror (other than shares which are expressed to be redeemable); | ||
(b) | plus the aggregate amount standing to the credit or minus the amount standing to the debit of the consolidated capital and revenue reserves of the Acquiror Group; and | ||
(c) | plus the aggregate amount of accrued profits or minus the amount of accrued losses for previous Financial Years which have been carried forward plus (to the extent not otherwise included) the amount standing to the credit (or minus any amount standing to the debit) of the profit and loss account of the Acquiror Group; |
less (but without double counting) any amount included in the above which is attributable to: |
84
(i) | any dividends or other distributions declared, recommended or made by any member of the Acquiror Group (other than to another member of the Acquiror Group); | ||
(ii) | interests of (if any) third party shareholders in any member of the Acquiror Group (other than the Borrower); | ||
(iii) | any provisions made for Tax; | ||
(iv) | the amount by which the net book value of any asset has been written up since 31 December, 2005 (or, in the case of a person becoming a member of the Acquiror Group after that date, the date on which that person became or becomes a member of the Acquiror Group) by way of revaluation or on its transfer from one member of the Acquiror Group to another; and | ||
(v) | goodwill or other intangible assets; |
but ignoring any variation in the credit or debit balance of the Acquiror Group consolidated profit and loss account since the date of the then latest audited consolidated balance sheet of the Acquiror Group except to the extent reflected in any later Acquiror Group consolidated profit and loss statement delivered to the Agent under Clause 21 (Information Undertakings). | ||
Working Capital means on any date Current Assets less Current Liabilities on such date. | ||
22.2 | Financial condition | |
The Company shall ensure that: |
(a) | Fixed Charge Cover: Fixed Charge Cover in respect of any three month period specified in column 1 below shall not be less than the ratio specified in column 2 below in respect of that three month period. |
Column 1 | Column 2 | |
Three month period | Ratio | |
Period expiring: |
||
30 September 2006
|
2.4:1 | |
31 December 2006
|
0.0:1 | |
31 March 2007
|
0.0:1 | |
30 June 2007
|
1.4:1 | |
30 September 2007
|
1.2:1 | |
31 December 2007
|
4.8:1 | |
31 March 2008
|
3.4:1 | |
30 June 2008
|
3.6:1 | |
30 September 2008
|
5.7:1 |
85
(b) | Interest Cover: Interest Cover in respect of any Relevant Period specified in column 1 below shall be or shall exceed the ratio specified in column 2 below in respect of that Relevant Period. |
Column 1 | Column 2 | |
Relevant Period | Ratio | |
Period expiring: |
||
30 September 2006
|
3.0:1 | |
31 December 2006
|
1.6:1 | |
31 March 2007
|
1.8:1 | |
30 June 2007
|
2.0:1 | |
30 September 2007
|
1.9:1 | |
31 December 2007
|
3.8:1 | |
31 March 2008
|
4.9:1 | |
30 June 2008
|
5.8:1 | |
30 September 2008
|
7.5:1 |
(c) | Total Leverage: Total Leverage in respect of any Relevant Period specified in column 1 below (being Total Debt as at the last day of such Relevant Period to EBITDA for that Relevant Period) shall not exceed the ratio specified in column 2 below in respect of that Relevant Period. |
Column 1 | Column 2 | |
Relevant Period | Ratio | |
Period expiring: |
||
30 September 2006
|
6.2:1 | |
31 December 2006
|
9.9:1 | |
31 March 2007
|
6.5:1 | |
30 June 2007
|
6.2:1 | |
30 September 2007
|
6.9:1 | |
31 December 2007
|
4.0:1 | |
31 March 2008
|
3.3:1 | |
30 June 2008
|
2.8:1 | |
30 September 2008
|
2.2:1 |
86
(d) | Minimum Net Worth: The Total Net Worth shall not on 31st December 2006 and any subsequent Quarter Date be less than 95% of the lower of: |
(i) | 27 million; and | ||
(ii) | the aggregate of 25 million and the Final Amount (as defined in the Warrant Document) provided that if, when the Minimum Net Worth for any test date falls to be calculated, such Final Amount has not been determined, paragraph (i) shall be applicable. |
(e) | Total Net Leverage: Total Net Leverage in respect of any Relevant Period specified in column 1 below (being Total Net Debt as at the last day of such Relevant Period to EBITDA for that Relevant Period) shall not exceed the ratio specified in column 2 below in respect of that Relevant Period. |
Column 1 | Column 2 | |
Relevant Period | Ratio | |
Period expiring |
||
30 September 2006
|
1.0:1 | |
31 December 2006
|
1.8:1 | |
31 March 2007
|
1.8:1 | |
30 June 2007
|
1.6:1 | |
30 September 2007
|
1.7:1 | |
31 December 2007
|
0.7:1 | |
31 March 2008
|
0.4:1 | |
30 June 2008
|
0.4:1 | |
30 September 2008
|
0.1:1 |
(f) | Capital Expenditure: |
(i) | The aggregate Capital Expenditure of the Group in respect of: |
(A) | the period beginning on the date of this Agreement and ending on the expiry of the first Financial Year of the Company specified in column 1 below; and | ||
(B) | each other Financial Year of the Company specified in column 1 below, |
shall not exceed the amount set out in column 2 below opposite that Financial Year. |
87
Column 1 | Column 2 | |||
Financial Year Ending | Maximum Expenditure | |||
31st December 2006 |
| 1,328,750 | ||
31st December 2007 |
| 891,250 | ||
31st December 2008 |
| 980,000 |
If in any Financial Year (the Original Financial Year) the amount of the Capital Expenditure is less than the maximum amount permitted for that Original Financial Year (the difference being referred to below as the Unused Amount), then the maximum expenditure amount set out in column 2 above for the immediately following Financial Year (the Carry Forward Year) shall be increased by an amount equal to the lowest of (1) the Unused Amount and (2) 50% of the maximum amount permitted for the Original Financial Year and (3) the amount which could have been utilised by way of additional Capital Expenditure in the Original Financial Year without causing a breach of the Cash Cover test during that Original Financial Year. | |||
In any Carry Forward Year, the original amount specified in column 2 above shall be treated as having been incurred prior to any Unused Amount carried forward into such Carry Forward Year. | |||
(ii) | The aggregate amount of the capital value of all assets of the Group in respect of which there is any liability under a finance lease or capital lease shall not at any time exceed 500,000. |
22.3 | Financial testing | |
The financial covenants set out in Clause 22.2 (Financial condition) shall be calculated in accordance with the Accounting Principles and tested by reference to each of the financial statements and/or each Compliance Certificate delivered pursuant to Clause 21.2 (Provision and contents of Compliance Certificate) provided that: |
(a) | in the case of Interest Cover, for the first three test dates falling after the date of this Agreement, EBITDA and Net Interest Payable shall be calculated on the basis of EBITDA and Net Interest Payable for the period from 1st July 2006 until such test date; and | ||
(b) | in the case of Total Leverage and Total Net Leverage, for the first three test dates falling after the date of this Agreement, EBITDA shall be calculated on the basis of EBITDA for the period from 1st July 2006 to such test date, annualised. |
23. | GENERAL UNDERTAKINGS | |
The undertakings in this Clause 23 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force. |
88
Authorisations and compliance with laws | ||
23.1 | Authorisations | |
Each Obligor shall (and the Company shall procure that the Acquiror shall) promptly: |
(a) | obtain, comply with and do all that is necessary to maintain in full force and effect; and | ||
(b) | supply certified copies to the Agent of, |
any Authorisation required under any law or regulation of a Relevant Jurisdiction to: |
(i) | enable it to perform its obligations under the Finance Documents and the Acquisition Documents; | ||
(ii) | ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document or Acquisition Document; and | ||
(iii) | carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect. |
23.2 | Compliance with laws |
(a) | Each Obligor shall (and the Company shall ensure that each member of the Group will) comply in all respects with all laws and regulations to which it may be subject where failure so to comply has or is reasonably likely to have a Material Adverse Effect. | ||
(b) | Each Obligor shall (and the Company shall ensure that each member of the Group will) comply with all Anti-Terrorism Laws to which it may be subject. | ||
(c) | Each Obligor shall (and the Company shall ensure that each member of the Group will) comply with the applicable laws or regulations relating to Margin Stock. | ||
(d) | Each Obligor shall not (and the Company shall ensure that no member of the Group will) by act or omission become subject to any categories, laws or regulations described in Clause 20.30 (US government regulations). |
23.3 | Environmental compliance | |
Each Obligor shall (and the Company shall ensure that each member of the Group will): |
(a) | comply with all Environmental Law to which it may be subject; | ||
(b) | obtain, maintain and ensure compliance with all requisite Environmental Permits; | ||
(c) | implement procedures to monitor compliance with and to prevent liability under any Environmental Law to which it may be subject, |
89
where failure to do so has or is reasonably likely to have a Material Adverse Effect. | ||
23.4 | Environmental claims | |
Each Obligor shall (through the Company), promptly upon becoming aware of the same, inform the Agent in writing of: |
(a) | any Environmental Claim against any member of the Group which is current, pending or threatened; and | ||
(b) | any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group, |
where the claim, if determined against that member of the Group, has or is reasonably likely to have a Material Adverse Effect. | ||
23.5 | Taxation |
(a) | Each Obligor shall (and the Company shall ensure that each member of the Group will) pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that: |
(i) | such payment is being contested in good faith; | ||
(ii) | adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Agent under Clause 21.1 (Financial statements); and | ||
(iii) | such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect or to result in the creation of any Security ranking in priority to the Transaction Security. |
(b) | No member of the Group may change its residence for Tax purposes. |
Restrictions on business focus | ||
23.6 | Merger | |
No Obligor shall (and the Company shall ensure that no other member of the Group will) enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction (other than the Permitted Reorganisation). | ||
23.7 | Change of business | |
The Company shall procure that no substantial change is made to the general nature of the business of the Company, the Acquiror, the Obligors or the Group taken as a whole from that carried on at the date of this Agreement. |
90
23.8 | Acquisitions |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and the Company shall ensure that no other member of the Group will): |
(i) | acquire a company or any shares, other equity-related investments or securities or a business or undertaking (or, in each case, any interest in any of them); or | ||
(ii) | incorporate a company. |
(b) | Paragraph (a) above does not apply to an acquisition of a company, of shares, securities or a business or undertaking (or, in each case, any interest in any of them) or the incorporation of a company which is: |
(i) | a Permitted Acquisition; or | ||
(ii) | a Permitted Transaction. |
23.9 | Joint ventures |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and the Company shall ensure that no member of the Group will): |
(i) | enter into, invest in or acquire (or agree to acquire) any shares, stocks, securities or other interest in any Joint Venture; or | ||
(ii) | transfer any assets or lend to or guarantee or give an indemnity for or give Security for the obligations of a Joint Venture or maintain the solvency of or provide working capital to any Joint Venture (or agree to do any of the foregoing). |
(b) | Paragraph (a) above does not apply to any acquisition of (or agreement to acquire) any interest in a Joint Venture or transfer of assets (or agreement to transfer assets) to a Joint Venture or loan made to or guarantee given in respect of the obligations of a Joint Venture if such transaction is a Permitted Acquisition, a Permitted Disposal, a Permitted Loan or a Permitted Joint Venture. |
23.10 | Holding Companies | |
The Borrower shall not and the Company shall procure that the Acquiror shall not trade, carry on any business, own any assets or incur any liabilities except for: |
(a) | the provision of administrative services (excluding treasury services) to its Subsidiaries of a type customarily provided by a holding company to its Subsidiaries; | ||
(b) | ownership of shares in its Subsidiaries (and in the case of the Acquiror, its only direct Subsidiary shall be the Target), intra-Group debit balances, intra-Group credit balances and other credit balances in bank accounts, cash and Cash Equivalent Investments but only if those shares, credit balances, cash |
91
and Cash Equivalent Investments are subject to the Transaction Security provided that the Company shall procure that the Acquiror shall at all times after the date of this Agreement maintain a credit balance in the Dividend Account in an amount not less than 500,000; | |||
(c) | any liabilities under the Transaction Documents to which it is a party and professional fees and administration costs in the ordinary course of business as a holding company. |
Restrictions on dealing with assets and Security | ||
23.11 | Preservation of assets |
(a) | Each Obligor shall (and the Company shall ensure that each member of the Group will) maintain in good working order and condition (ordinary wear and tear excepted) all of its assets necessary or desirable in the conduct of its business. | ||
(b) | The Company shall procure that the Target does not undertake or incur any business, activities, acquisitions or liabilities which will materially reduce its cash or Cash Equivalent Investments except for the Permitted Reorganisation and the payment of dividends to the Acquiror for the purpose of making payments to the Lenders under this Agreement. | ||
(c) | The Company shall ensure that each Regulated Entity maintains capital and liquidity sufficient at all times to comply with its Authorisations and the requirements of its regulators (including, without limitation, in relation to the Permitted Reorganisation). |
23.12 | Pari passu ranking | |
Each Obligor shall (and the Company shall procure that the Acquiror shall) ensure that at all times any claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies in the jurisdiction of incorporation or organisation of such Obligor or the Acquiror as the case may be. | ||
23.13 | Acquisition Documents |
(a) | The Company shall procure that the Acquiror shall promptly pay all amounts payable to the Vendor under the Acquisition Documents as and when they become due (except to the extent that any such amounts are being contested in good faith by a member of the Group and where adequate reserves are set aside for any such payment). | ||
(b) | The Company shall procure that the Acquiror and each relevant member of the Group shall, take all reasonable and practical steps to preserve and enforce its rights (or the rights of any other member of the Group) and pursue any claims and remedies arising under any Acquisition Documents. |
92
(c) | The Company shall: |
(i) | notify the Agent promptly of any material claim made by a Group Company under an Acquisition Document; | ||
(ii) | promptly on request provide the Agent with reasonable details of that claim and its progress; and | ||
(iii) | notify the Agent promptly upon that claim being resolved. |
(d) | The Company shall keep the Agent informed as to the status and progress of the Acquisition. | ||
(e) | Each Obligor shall (and the Company shall ensure that each member of the Group will) comply in all respects with all laws and regulations to which it may be subject under the Acquisition. | ||
(f) | The Company shall keep the Agent informed and consult with it as to: |
(i) | the terms and conditions of any assurance or undertaking proposed to be given by or on behalf of any member of the Group to any person for the purpose of obtaining any regulatory, competition and/or anti-trust Authorisation or clearance necessary or desirable in connection with the Acquisition; and | ||
(ii) | any terms or conditions proposed in connection with any regulatory, competition and/or anti-trust Authorisation or clearance necessary or desirable in connection with the Acquisition. |
23.14 | Negative pledge | |
In this Clause 23.14, Quasi-Security means a transaction described in paragraph (b) below. | ||
Except as permitted under paragraph (c) below: |
(a) | No Obligor shall (and the Company shall ensure that no other member of the Group will) create or permit to subsist any Security over any of its assets. | ||
(b) | No Obligor shall (and the Company shall ensure that no other member of the Group will): |
(i) | sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor or any other member of the Group; | ||
(ii) | sell, transfer or otherwise dispose of any of its receivables on recourse terms; | ||
(iii) | enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or |
93
(iv) | enter into any other preferential arrangement having a similar effect, |
in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset. | |||
(c) | Paragraphs (a) and (b) above do not apply to any Security or (as the case may be) Quasi-Security, which is: |
(i) | Permitted Security; or | ||
(ii) | a Permitted Transaction. |
23.15 | Disposals |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and the Company shall ensure that no member of the Group will) enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset. | ||
(b) | Paragraph (a) above does not apply to any sale, lease, transfer or other disposal which is: |
(i) | a Permitted Disposal; or | ||
(ii) | a Permitted Transaction. |
23.16 | Arms length basis |
(a) | Except as permitted by paragraph (b) below, no Obligor shall (and the Company shall ensure no member of the Group will) enter into any transaction with: |
(i) | any person except on arms length terms and for full market value; and | ||
(ii) | any Restricted Person, |
which has a value in excess of 500,000 or which results in the aggregate value of all such transactions exceeding 2 million. | |||
(b) | The following transactions shall not be a breach of this Clause 23.16: |
(i) | intra-Group loans permitted under Clause 23.17 (Loans or credit); | ||
(ii) | fees, costs and expenses payable under the Transaction Documents in the amounts set out in the Transaction Documents delivered to the Agent under Clause 4.1 (Initial conditions precedent) or agreed by the Agent; and | ||
(iii) | any Permitted Transactions. |
Restrictions on movement of cash cash out |
94
23.17 | Loans or credit |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and the Company shall ensure that no member of the Group will) be a creditor in respect of any Financial Indebtedness. | ||
(b) | Paragraph (a) above does not apply to: |
(i) | a Permitted Loan; or | ||
(ii) | a Permitted Transaction. |
23.18 | No Guarantees or indemnities |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and the Company shall ensure that no member of the Group will) incur or allow to remain outstanding any guarantee in respect of any obligation of any person. | ||
(b) | Paragraph (a) does not apply to a guarantee which is: |
(i) | a Permitted Guarantee; or | ||
(ii) | a Permitted Transaction. |
23.19 | Dividends and share redemption |
(a) | Except as permitted under paragraph (b) below, the Company shall not (and will ensure that no other member of the Group will): |
(i) | declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital); | ||
(ii) | repay or distribute any dividend or share premium reserve; | ||
(iii) | pay or allow any member of the Group to pay any management, advisory or other fee to or to the order of any of the shareholders of the Company; or | ||
(iv) | redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so. |
(b) | Paragraph (a) above does not apply to a Permitted Transaction (other than one referred to in paragraph (c) of the definition of that term). |
23.20 | Shareholder Indebtedness | |
The Company shall ensure that at all times all Shareholder Indebtedness is subordinated to all amounts payable under the Finance Documents, on a basis approved by the Agent, and shall not (and will ensure that no other member of the Group will): |
95
(a) | repay or prepay any principal amount (or capitalised interest) outstanding under any Shareholder Indebtedness; | ||
(b) | pay any interest, fee or charge accrued or due under any Shareholder Indebtedness; | ||
(c) | purchase, redeem, defease or discharge any Shareholder Indebtedness; or | ||
(d) | take any action which would prejudice the subordination of any Shareholder Indebtedness. |
Restrictions on movement of cash cash in | ||
23.21 | Financial Indebtedness |
(a) | Except as permitted under paragraph (b) below, no Obligor shall (and the Company shall ensure that no member of the Group will) incur or allow to remain outstanding any Financial Indebtedness. | ||
(b) | Paragraph (a) above does not apply to Financial Indebtedness which is: |
(i) | Permitted Financial Indebtedness; or | ||
(ii) | a Permitted Transaction. |
23.22 | Share capital | |
No Obligor shall (and the Company shall ensure no member of the Group will) issue any shares except pursuant to: |
(a) | a Permitted Share Issue; or | ||
(b) | a Permitted Transaction. |
Miscellaneous | ||
23.23 | Insurance |
(a) | Each Obligor shall (and the Company shall ensure that each member of the Group will) maintain at its own expense fidelity and other insurances on and in relation to its business and assets against such risks, in such amounts and to such extent as would be prudent for companies owning, possessing or leasing similar assets and carrying on a business of a substantially similar size and nature and operating in the same locations as those of such members of the Group or which are required by law or regulation. Such insurances must: |
(i) | provide coverage against business interruption and loss of profits, fidelity and other matters customary for Regulated Entities, fire, terrorism (to the extent that such cover is available on commercially viable terms), public liability, professional indemnity, pollution and third-party property damage liability but subject to any exclusions typical for insurances of this type; and |
96
(ii) | be in compliance with other insurance obligations binding on such members of the Group such as under any leases of material property to which such members of the Group are party where failure to do so could lead to forfeiture of such lease. |
(b) | All insurances must be with reputable independent insurance companies or underwriters. | ||
(c) | Each Obligor will, and will procure that each of its Subsidiaries will: |
(i) | supply to the Agent promptly following its request copies of each policy or certificate for insurance required to be maintained in accordance with paragraph (a) above, together with copies of the current premium receipts relating thereto, and use all reasonable endeavours to procure that the insurer undertakes to the Agent to notify the Agent within 30 days (or such other period as may be agreed between the Agent and the insurer) should any sum payable by a member of the Group under such insurance not be paid or give no less than 30 days notice (or such other period as may be agreed between the Agent and the insurer) should the insurer intend to cancel, lapse or avoid such policy; | ||
(ii) | promptly notify the Agent in writing of any material change to its insurance coverage from time to time; and | ||
(iii) | promptly notify the Agent in writing of any claim or notification made to its insurers under any of its insurance policies which is for, or is reasonably likely to result in, a claim under such policy for an amount in excess of 500,000 (or its equivalent in other currencies). |
(d) | If any Obligor (or any other member of the Group) fails to purchase or maintain any insurance required by this Clause 23.23 (Insurance), the Agent may purchase such insurance as may be necessary to remedy any such failure and each Obligor shall (and the Company shall ensure that each member of the Group will) indemnify the Agent on demand against any costs or expenses properly incurred by it in purchasing any such insurance. |
23.24 | Pensions |
(a) | The Company shall ensure that all pension schemes operated by or maintained for the benefit of members of the Group and/or any of their employees are fully funded to the extent required by law based on reasonable actuarial assumptions applicable in the jurisdiction in which the relevant pension scheme is maintained. | ||
(b) | The Company shall ensure that no member of the Group is or has been at any time an employer (for the purposes of Sections 38 to 51 of the Pensions Act 2004) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pension Schemes Act 1993) or connected with or an associate of (as those terms are under in Sections 39 or 43 of the Pensions Act 2004) such an employer. |
97
(c) | The Company shall deliver to the Agent at such times as those reports are prepared in order to comply with the then current statutory or auditing requirements (as applicable either to the trustees of any relevant schemes or to the Company), actuarial reports in relation to all pension schemes mentioned in (a) above. | ||
(d) | The Company shall promptly notify the Agent of any material change in the rate of contributions to any pension schemes mentioned in (a) above paid or recommended to be paid (whether by the scheme actuary or otherwise) or required (by law or otherwise). |
23.25 | Access | |
If a Default is continuing or the Agent reasonably suspects a Default is continuing or may occur, each Obligor shall, and the Company shall ensure that each member of the Group will, (not more than once in every Financial Year unless the Agent reasonably suspects a Default is continuing or may occur) permit the Agent and/or the Security Agent and/or accountants or other professional advisers and contractors of the Agent or Security Agent free access at all reasonable times and on reasonable notice at the risk and cost of the Obligor or Company to (a) the premises, assets, books, accounts and records of each member of the Group and (b) meet and discuss matters with management of the Company. | ||
23.26 | Intellectual Property | |
Each Obligor shall and the Company shall procure that each Group member will: |
(a) | preserve and maintain the subsistence and validity of the Intellectual Property necessary for the business of the relevant Group member; | ||
(b) | use reasonable endeavours to prevent any infringement in any material respect of the Intellectual Property; | ||
(c) | make registrations and pay all registration fees and taxes necessary to maintain the Intellectual Property in full force and effect and record its interest in that Intellectual Property; | ||
(d) | not use or permit the Intellectual Property to be used in a way or take any step or omit to take any step in respect of that Intellectual Property which may materially and adversely affect the existence or value of the Intellectual Property or imperil the right of any member of the Group to use such property; and | ||
(e) | not discontinue the use of the Intellectual Property. |
23.27 | Amendments | |
No Obligor shall (and the Company shall ensure that no member of the Group will) amend, vary, novate, supplement, supersede, waive or terminate any term of a Transaction Document (save for a non-material term of an Acquisition Document) or any other document delivered to the Agent pursuant to Clauses 4.1 (Initial conditions precedent) (including without limitation the constitutional documents of the |
98
Borrower, the Acquiror, the Target and each of the other Obligors) or Clause 25 (Changes to the Lenders and the Obligors) or enter into any agreement with any shareholders of the Company or any of their Affiliates which is not a member of the Group except in writing: |
(a) | in accordance with the provisions of Clause 35 (Amendments and Waivers); or | ||
(b) | with the prior written consent of the Lenders; or | ||
(c) | after the Closing Date in the case of a document other than a Finance Document, in a way which could not be reasonably expected materially and adversely to affect the interests of the Lenders. | ||
(d) | The Company shall promptly supply to the Agent a copy of any document relating to any of the matters referred to in paragraphs (a) to (c) above. |
23.28 | Financial assistance | |
Each Obligor shall (and the Company shall procure each member of the Group will) comply in all respects with Sections 151 to 158 of the United Kingdom Companies Act 1985 and any equivalent legislation in other jurisdictions, in each case as applicable, including in relation to the execution of the Transaction Security Documents and payment of amounts due under this Agreement. | ||
23.29 | Group bank accounts | |
If the Majority Lenders so require by notice in writing, the Company shall ensure that within 30 days of the date of any such notice all bank accounts of the Obligors and such other members of the Group as the Majority Lenders may require shall be opened and maintained with a Finance Party or an Affiliate of a Finance Party and, in the case of an Obligor, are subject to valid Security under the Transaction Security Documents. | ||
23.30 | Treasury Transactions | |
No Obligor shall (and the Company will procure that no members of the Group will) enter into any Treasury Transaction, other than: |
(a) | spot and forward delivery foreign exchange contracts entered into in the ordinary course of business and not for speculative purposes; and | ||
(b) | any Treasury Transaction entered into for the hedging of actual or projected real exposures arising in the ordinary course of trading activities of a member of the Group for a period of not more than six months and not for speculative purposes. |
23.31 | Guarantors |
(a) | The Company shall ensure that at all times after the Acquisition Signing Date, the aggregate assets, the aggregate net assets and aggregate turnover (after Tax) of the Guarantors and the Acquiror (in each case calculated on an |
99
unconsolidated basis and excluding all intra-group items) represents not less than 80 per cent. of consolidated turnover (after Tax) of the Group. | |||
(b) | The Company need only perform its obligations under paragraph (a) above if it is not unlawful for the relevant person to become a Guarantor and that person becoming a Guarantor would not result in personal liability for that persons directors or other management. Each Obligor must use, and must procure that the relevant person uses, all reasonable endeavours lawfully available to avoid any such unlawfulness or personal liability. This includes agreeing to a limit on the amount guaranteed. The Agent may (but shall not be obliged to) agree to such a limit if, in its opinion, to do so would avoid the relevant unlawfulness or personal liability. |
23.32 | Further assurance |
(a) | Each Obligor shall (and the Company shall procure that each member of the Group will) promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Security Agent may reasonably specify (and in such form as the Security Agent may reasonably require in favour of the Security Agent or its nominee(s)): |
(i) | to perfect the Security created or intended to be created under or evidenced by the Transaction Security Documents (which may include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of the Security Agent or the Finance Parties provided by or pursuant to the Finance Documents or by law; | ||
(ii) | to confer on the Security Agent or confer on the Finance Parties Security over any property and assets of that Obligor or the Acquiror located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Transaction Security Documents; and/or | ||
(iii) | to facilitate the realisation of the assets which are, or are intended to be, the subject of the Transaction Security. |
(b) | Each Obligor shall (and the Company shall procure that each member of the Group shall) take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Security Agent or the Finance Parties by or pursuant to the Finance Documents. |
23.33 | Permitted Reorganisation and Rooftop Sale |
(a) | The Company shall ensure that the Permitted Reorganisation and the Rooftop Sale are completed as soon as practicable and in any event in the case of the Permitted Reorganisation prior to 31st March 2007 and in the case of the |
100
Rooftop Sale prior to 31st December, 2008. The Permitted Reorganisation shall be completed in accordance with the steps set out at Transaction 1, Transaction 2 and Transaction 3 (as each are defined in the BT Treasury Letter) in the Structure Memorandum which Structure Memorandum may not be amended without the prior written consent of the Agent. | |||
(b) | Prior to the completion of the Permitted Reorganisation and of the Rooftop Sale: |
(i) | the Company shall keep the Agent informed as to the progress of such matters at such intervals as the Agent may specify (or upon request from the Agent); and | ||
(ii) | the Company shall take all such steps as may be necessary or appropriate to preserve or enhance the value of the Crown Northcorp Limited and its relevant subsidiaries and investments to be sold to the Target in accordance with the Permitted Reorganisations and Rooftop Holding Limited and to minimise the tax and other liabilities arising in connection therewith. |
(c) | The Company shall promptly obtain all such Authorisations as may be required for the purposes of the Permitted Reorganisation and the Rooftop Sale. |
23.34 | ERISA reporting requirements | |
Each Obligor shall (and the Company shall ensure that each relevant member of the Group will): |
(a) | ERISA Events and ERISA Reports: (i) promptly and in any event within 10 days after such Obligor or any ERISA Affiliate knows or has reason to know that any ERISA Event has occurred, deliver to the Agent a statement of the finance director of the Company describing such ERISA Event and the action, if any, that such Obligor or such ERISA Affiliate has taken and proposes to take with respect thereto, and (ii) on the date any records, documents or other information must be furnished to the PBGC with respect to any Plan pursuant to section 4010 of ERISA, deliver to the Agent a copy of such records, documents and information; | ||
(b) | Plan Terminations: promptly and in any event within five Business Days after receipt thereof by any Obligor or any ERISA Affiliate, deliver to the Agent copies of each written notice from the PBGC stating its intention to terminate any Plan or to have a trustee appointed to administer any Plan; | ||
(c) | Plan Annual Reports: promptly upon the written request of the Agent, deliver to the Agent copies of each Schedule B (Actuarial Information) to the annual report (Form 5500 Series) most recently filed by it with the Employee Benefits Security Administration of the United States with respect to each Plan; and |
101
(d) | Multiemployer Plan Notices: promptly and in any event within five Business Days after receipt thereof by it or any ERISA Affiliate from the sponsor of a Multiemployer Plan, deliver to the Agent copies of each written notice concerning: |
(i) | the imposition of Withdrawal Liability by any such Multiemployer Plan; | ||
(ii) | the reorganisation or termination, within the meaning of Title IV of ERISA, of any such Multiemployer Plan; or | ||
(iii) | the amount of liability incurred, or that may be incurred, by such Obligor or any ERISA Affiliate in connection with any event described in paragraph (i) or (ii) above. |
23.35 | Interest Reserve Account | |
The Borrower shall promptly convert the US$2,500,000 credited to the initial Interest Reserve Account into Euro once it is no longer in the initial Interest Reserve Account, upon the request of the Agent. No amounts shall be withdrawn from the Interest Reserve Account and the amounts credited to such account shall not be dealt with in any way except to pay the arrangement fee described in Clause 13.1 (Arrangement Fee) and to pay interest under Clause 10.2 (Payment of Interest). | ||
23.36 | Conditions Subsequent in relation to Warrants | |
The Company and the Agent shall use their reasonable endeavours in good faith to agree forms of the Warrant Agreement and each of the other Warrant Documents and the constitutional documents of the Acquiror. As soon as possible and in any event within five Business Days after the forms of such documentation are agreed, the Company shall procure that: |
(a) | the Warrant Agreement and each of the other Warrant Documents, each in the agreed form, are duly executed and delivered by all the parties thereto and all the Warrants provided for thereunder are duly and validly issued to the Arranger or an affiliate of the Arranger, nominated by the Arranger; | ||
(b) | the constitutional documents of the Acquiror are in the agreed form; and | ||
(c) | the Agent receives in such form and with such substance as it shall consider satisfactory such evidence of corporate, shareholder and other authorisations and approvals and filings and such legal opinions as it shall consider appropriate in the context of the execution and delivery of the Warrant Documents, any amendments to the constitutional documents of the Acquiror and the issue of the Warrants. |
23.37 | Conditions Subsequent in relation to German and Dutch Transaction Security |
(a) | The Borrower and the Acquiror shall execute and deliver to the Agent, and the Company shall procure that the Borrower and the Acquiror shall execute and deliver to the Agent, all of the documents and evidence listed in Part III of Schedule 2 (Conditions Precedent), as soon as possible and in any event no |
102
later than 10 Business Days after the date of this Agreement (except in the case of the execution and delivery of the Assignment Agreement referred to in paragraph 8 of Part III of Schedule 2 (Conditions Precedent) which shall be as soon as possible and in any event no later than 10 Business Days after the obtaining of the Vendors consent to such Assignment Agreement), each in a form and substance satisfactory to the Agent. | |||
(b) | The Borrower undertakes that it will make and give, and the Company undertakes that it will procure that the Borrower and the Acquiror make and give (i) all filings, registrations and notices that are necessary to create and/or perfect any Transaction Security to be created in accordance with paragraph (a) above and (ii) all reasonable endeavours to obtain the consent of the Vendor to the Assignment Agreement referred to above. |
23.38 | Conditions Subsequent in relation to Reliance Letters | |
The Company shall use its best endeavours to procure that there is delivered to the Agent as soon as practicable after the date of this Agreement: |
(a) | reliance letters, in form and substance satisfactory to the Agent, in relation to the PWC valuation report referred to in paragraph 5(i) of Part I of Schedule 2, the Legal Due Diligence Report and the Structure Memorandum; | ||
(b) | a copy of the final PWC valuation report referred to in paragraph 5(i) of Part I of Schedule 2; and | ||
(c) | a revised opinion of Dechert LLP covering enforceability of judgements and choice of law on a basis satisfactory to the Agent. |
23.39 | Dividend Account | |
The Company shall procure that the Acquiror shall promptly pay all: |
(a) | dividends, charges, fees or other distributions; and | ||
(b) | interest on any unpaid dividend, charge, fee or other distribution, |
received by the Acquiror in cash from the Target or of the Targets Subsidiaries on or in respect of the Targets or the Targets Subsidiaries share capital into the Dividend Account. | ||
24. | EVENTS OF DEFAULT | |
Each of the events or circumstances set out in this Clause 24 is an Event of Default. | ||
24.1 | Non-payment | |
An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless: |
(a) | its failure to pay is caused by: |
103
(i) | administrative or technical error; or | ||
(ii) | a Disruption Event; and |
(b) | payment is made within five Business Days of its due date. |
24.2 | Financial covenants and other obligations |
(a) | Any requirement of Clause 22 (Financial covenants) is not satisfied or an Obligor does not comply with the provisions of Clauses 21 (Information Undertakings) and/or Clause 23.14 (Negative pledge) or 23.21 (Financial Indebtedness) or 23.36 (Conditions Subsequent in relation to Warrants) or 23.37 (Conditions Subsequent in relation to German and Dutch Transaction Security). | ||
(b) | An Obligor or the Acquiror does not comply with any provision of any Transaction Security Document. | ||
(c) | The Company does not comply with its obligations under the Engagement Letter. |
24.3 | Other obligations |
(a) | An Obligor or the Acquiror does not comply with any provision of the Finance Documents (other than those referred to in Clause 24.1 (Non-payment) and Clause 24.2 (Financial covenants and other obligations)). | ||
(b) | No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 10 Business Days of the Agent giving notice to the Company, the Acquiror or relevant Obligor or the Company, the Acquiror or an Obligor becoming aware of the failure to comply. |
24.4 | Misrepresentation |
(a) | Any representation or statement made or deemed to be made by an Obligor or the Acquiror in the Finance Documents or any other document delivered by or on behalf of any Obligor or the Acquiror under or in connection with any Finance Document is or proves to have been incorrect or misleading when made or deemed to be made. | ||
(b) | No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 10 Business Days of the Agent giving notice to the Company, the Acquiror or the relevant Obligor or the Company, the Acquiror or an Obligor becoming aware of the failure to comply. |
24.5 | Cross default |
(a) | Any Financial Indebtedness of any member of the Group is not paid when due nor within any originally applicable grace period. |
104
(b) | Any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described). | ||
(c) | Any commitment for any Financial Indebtedness of any member of the Group is cancelled or suspended by a creditor of any member of the Group as a result of an event of default (however described). | ||
(d) | Any creditor of any member of the Group becomes entitled to declare any Financial Indebtedness of any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described). | ||
(e) | No Event of Default will occur under this Clause 24.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (a) to (d) above is less than 500,000 (or its equivalent in any other currency or currencies). |
24.6 | Insolvency |
(a) | A member of the Group is unable or admits inability to pay its debts as they fall due or is deemed to or declared to be unable to pay its debts under applicable law, suspends or threatens to suspend making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness. | ||
(b) | The value of the assets of any member of the Group is less than its liabilities (taking into account contingent and prospective liabilities). | ||
(c) | A moratorium is declared in respect of any indebtedness of any member of the Group. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium. | ||
(d) | The Acquiror gives notice under section 36(2) of the Dutch 1990 Tax Collection Act (Invorderingswet 1990) separately or in conjunction with section 60 of the Dutch Act on the Financing of Social Insurance (Wet Financiering sociale verzekeringen). |
24.7 | Insolvency proceedings |
(a) | Any corporate action, legal proceedings or other procedure or step is taken in relation to: |
(i) | the suspension of payments, a moratorium of any indebtedness, bankruptcy, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any member of the Group; | ||
(ii) | a composition, compromise, assignment or arrangement with any creditor of any member of the Group; |
105
(iii) | the appointment of a liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of any member of the Group or any of its assets; or | ||
(iv) | enforcement of any Security over any assets of any member of the Group, |
(b) | Paragraph (a) shall not apply to: |
(i) | any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 14 days of commencement or, if earlier, the date on which it is advertised; or | ||
(ii) | any step or procedure contemplated by paragraph (c) of the definition of Permitted Transaction. |
24.8 | Creditors process | |
Any expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction affects any asset or assets of a member of the Group having an aggregate value of 500,000 and is not discharged within 21 days. |
24.9 | Unlawfulness and invalidity |
(a) | It is or becomes unlawful for an Obligor or the Acquiror to perform any of its obligations under the Finance Documents or any Transaction Security created or expressed to be created or evidenced by the Transaction Security Documents ceases to be effective or any subordination created under the Intercreditor Agreement is or becomes unlawful. | ||
(b) | Any obligation or obligations of any Obligor or the Acquiror under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Lenders under the Finance Documents. | ||
(c) | Any Finance Document ceases to be in full force and effect or any Transaction Security or any subordination created under the Intercreditor Agreement ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other than a Finance Party) to be ineffective. |
24.10 | Cessation of business | |
Any member of the Group suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business except as a result of a Permitted Disposal or a Permitted Transaction. |
24.11 | Change of ownership |
106
(a) | An Obligor (other than the Company) or the Acquiror ceases to be a wholly-owned Subsidiary of the Company; or | ||
(b) | After the Closing Date, the Target and its Subsidiaries cease to be wholly-owned Subsidiaries of the Company, |
24.12 | Audit qualification | |
The Auditors of the Group qualify the audited annual consolidated financial statements of the Company. | ||
24.13 | Expropriation | |
The authority or ability of any member of the Group to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any member of the Group or any of its assets. | ||
24.14 | Repudiation and rescission of agreements |
(a) | An Obligor or the Acquiror (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or any of the Transaction Security to which it is a party or evidences an intention to rescind or repudiate a Finance Document or any Transaction Security to which it is a party. | ||
(b) | Any party to the Acquisition Documents or the Warrant Documents rescinds or purports to rescind or repudiates or purports to repudiate any of those agreements or instruments in whole or in part where to do so has or is, in the reasonable opinion of the Majority Lenders, likely to have a material adverse effect on the interests of the Lenders under the Finance Documents. |
24.15 | Litigation | |
Any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened in relation to the Transaction Documents or the transactions contemplated in the Transaction Documents or against any member of the Group or its assets which has or is reasonably likely to have a Material Adverse Effect. | ||
24.16 | Material adverse change | |
Any event or circumstance occurs which the Majority Lenders reasonably believe has or is reasonably likely to have a Material Adverse Effect. |
107
24.17 | ERISA Event of Default |
(a) | Any ERISA Event shall have occurred and the sum (determined as of the date of occurrence of such ERISA Event) of the Insufficiency of such Plan and the Insufficiency of any and all other Plans with respect to which an ERISA Event shall have occurred and then exist (or the liability of the Obligors and the ERISA Affiliates related to such ERISA Event) exceeds 500,000 (or its equivalent in other currencies). | ||
(b) | Any Obligor or any ERISA Affiliate shall have been notified in writing by the sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to such Multiemployer Plan in an amount that, when aggregated with all other amounts required to be paid to Multiemployer Plans by the Obligors and the ERISA Affiliates as Withdrawal Liability (determined as of the date of such notification), exceeds 500,000 (or its equivalent in other currencies) or requires payments exceeding 500,000 (or its equivalent in other currencies) per annum. | ||
(c) | Any Obligor or any ERISA Affiliate shall have been notified in writing by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganisation or is being terminated, within the meaning of Title IV of ERISA, and as a result of such reorganisation or termination the aggregate annual contributions of the Obligors and the ERISA Affiliates to all Multiemployer Plans that are then in reorganisation or being terminated have been or will be increased over the amounts contributed to such Multiemployer Plans for the plan years of such Multiemployer Plans immediately preceding the plan year in which such reorganisation or termination occurs by an amount exceeding 500,000 (or its equivalent in other currencies). |
24.18 | Acceleration |
(a) | On and at any time after the occurrence of an Event of Default which is continuing the Agent may, and shall if so directed by the Majority Lenders, by notice to the Company: |
(i) | cancel the Total Commitments at which time they shall immediately be cancelled; | ||
(ii) | declare that all or part of the Utilisations, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, at which time they shall become immediately due and payable; | ||
(iii) | declare that all or part of the Utilisations be payable on demand, at which time they shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; | ||
(iv) | declare that cash cover in respect of the Letter of Credit is immediately due and payable at which time it shall become immediately due and payable; |
108
(v) | declare that cash cover in respect of the Letter of Credit is payable on demand at which time it shall immediately become due and payable on demand by the Agent on the instructions of the Majority Lenders; | ||
(vi) | exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents. |
(b) | In the event of a declaration pursuant to paragraph (a)(ii) or (a)(iv) or demand as provided for under (a)(iii) or (a)(v) above, the Borrower shall, within three Business Days of such declaration or demand, pay to the Agent a sum calculated using the formula: |
VP x (M x | N 360 |
) | ||||
1 + (Discount Rate x | N 360 |
) |
where | |||
VP = the amount notified to the Borrower as due and payable
pursuant to paragraph (a)(ii), (a)(iii), (a)(iv) or (a)(v) above. |
|||
M = the Margin on the date of such declaration or demand. | |||
N = the number of days between the date of notification of the
Borrower by the Agent of the amount due and payable and the Make Whole Date. |
|||
Discount Rate = EURIBOR in relation to the declaration or demand date. |
24.19 | US Bankruptcy | |
Notwithstanding Clause 24.18 (Acceleration), upon the actual or deemed entry of an order for relief under the US Bankruptcy Code with respect to any US Obligor, the Facility shall cease to be available to such Obligor, all Utilisations outstanding to such Obligor, and all other amounts owed by such Obligor under the Finance Documents, shall become immediately due and payable, in each case automatically and without any further action by any party hereto. |