PROJECT APOLLO - BRIDGE FACILITY LETTER
Barclays
Leveraged Finance
3rd Floor
00 Xxxxxxx Xxxxxx
Xxxxxx
XX0X 0XX
The Directors
Hertal (Investments) Limited (the "Borrower")
and
The Directors
Hertal Acquisitions Plc (the "Parent")
each of 20 Bedfordbury
London WC2N 4BL
18 January 2003
Dear Sirs
BRIDGE FACILITY
$135,000,000 senior credit agreement dated on or about the date of this letter
between, inter alios, Hertal Acquisitions PLC as Parent and a Borrower, the
Guarantors named therein, Barclays Leveraged Finance and The Royal Bank of
Scotland Plc as Joint Mandated Lead Arrangers and Barclays Bank PLC as Facility
Agent and Security Agent (each as defined therein), as amended from time to time
(the "Senior Credit Agreement").
We are pleased to offer the Borrower an unsecured bridge facility of $31,375,500
(the "Facility") on the terms set out in this letter.
1. DEFINITIONS
Terms not otherwise defined in Schedule 1 hereto shall have the same
meaning as in the Senior Credit Agreement.
2. CONDITIONS PRECEDENT
The Facility may not be drawn or utilised unless Barclays Bank PLC
(the "Bank") has received:
(a) on or before the date of this letter each of the documents,
information and/or other items specified in part 1 of schedule 2
in form and substance satisfactory to it (acting reasonably); and
(b) on for before the first drawdown or utilisation date each of the
documents, information and/or other items specified in part 2 of
schedule 2 (or the Bank is satisfied that, subject only to the
making of the first drawing under this letter it will receive
such documents, information and/or other items) in form and
substance satisfactory to it (acting reasonably).
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3. FACILITY
3.1 The Borrower can utilise the Facility by drawing on its current
account with the Bank by way of dollar overdraft at any time after the
date on which the conditions precedent in clause 2 (Conditions
Precedent) have been satisfied in accordance with that clause up to
whichever is the earlier to occur of the last day of the Certain Funds
Period and the date on which the Equity Subscription (as defined in
the Alchemy Undertaking) is received in full by the Borrower in
accordance with the Alchemy Undertaking.
3.2 The total maximum amount which may be overdrawn and outstanding at any
time in relation to all the Borrower's accounts is $31,375,500.
3.3 The Bank may deduct the fee payable under the Fees Letter from the
first drawing. The Bank may debit unpaid interest relating to the
Facility to the Borrower's current account.
3.4 Without prejudice to clause 2 (Conditions Precedent) and clause 5
(Repayment), during the Certain Funds Period the Bank will not:
(a) invoke any breach, default or Event of Default under this letter
as a ground for refusing to allow any drawing under the Facility
during the Certain Funds Period solely for the purpose specified
in clause 4(a) or (b) (Purpose) (an "Offer Utilisation");
(b) exercise any right, power or discretion to terminate or cancel
the obligation to allow any Offer Utilisation (other than under
clause 15.2 (Illegality));
(c) exercise any right of recission which it may have in respect of
this letter or in respect of any Offer Utilisation; or
(d) exercise any rights conferred on it by any Finance Document to
take any action to recover monies advanced to the Borrower solely
for the purpose specified in clause 4(a) or (b) (Purpose) and not
yet applied for such purpose,
unless a Drawstop Default has occurred under the Senior Credit
Agreement.
4. PURPOSE
Drawings must be used in or towards on-lending the proceeds to the
Parent to be applied by the Parent in or towards:
(a) payment of the cash price payable by the Parent for the Target
Shares pursuant to the Offer and pursuant to the exercise of its
rights under section 204 of the Irish Companies Act 1963;
(b) (only after the Unconditional Date) financing or refinancing the
Offer Costs.
5. REPAYMENT
The Facility is repayable as follows:
(a) on each date on which the Borrower receives any Equity
Subscription (as defined in the Alchemy Undertaking) in
accordance with the Alchemy Undertaking in an amount equal to
each such Equity Subscription or such lesser amount as is
necessary to repay or pay (as the case may be) all amounts
outstanding under the Finance Documents until such time (if any)
as all such amounts outstanding under the Finance Documents have
been repaid or paid (as the
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case may be) in full and the Bank is under no further obligation
under the Finance Documents; and
(b) if later, in full on 30 April 2003.
6. INTEREST
6.1 Interest will accrue and be calculated on the amount for the time
being drawn under the Facility on the basis of the number of days
elapsed and a 365-day year, at the rate determined by the Bank to be
the aggregate of:
(a) 1.00% per annum (the "Margin");
(b) LIBOR for the relevant period; and
(c) the Mandatory Cost (if any).
6.2 If the Borrower fails to pay any amount under this Facility on its due
date (including any amount payable under this clause 6.2) (an "overdue
amount"), the Borrower will pay default interest on that overdue
amount from its due date to the date of actual payment (both before
and after judgment) at a rate (the "Default Rate") determined by the
Bank to be one per cent. per annum above:
(a) where the overdue amount is principal which has become due and
payable before the expiry of the relevant interest period, the
rate applicable to that principal immediately before the date it
fell due (but only for the period from that due date to the end
of the relevant interest period); or
(b) in any other case (including principal falling within clause
6.2(a) once the relevant interest period has expired), the rate
which would be payable if the overdue amount was a drawing made
for a period equal to the period of non-payment divided into
successive interest periods of a duration selected by the Bank
(each a "Default Interest Period").
Default interest will be payable on demand by the Bank and will be
compounded at the end of each Default Interest Period.
6.3 Without prejudice to clause 6.2, if all amounts outstanding under this
Facility have not been repaid in full by 15 April 2003 the Margin
applicable to the Facility shall immediately be increased by a further
one per cent. per annum, until the time when such amounts have been
repaid in full.
6.4 Interest will accrue on a daily basis and will be payable (both before
and after judgment) monthly in arrears. Interest will be debited to
the Borrower's current account (and will thereafter itself bear
interest) on the Bank's usual monthly charging days.
6.5 The statement of the Bank as to the rate or amount of interest payable
under this Facility will be conclusive in the absence of manifest
error.
7. INFORMATION
The Borrower will provide the Bank promptly with such:
(a) financial information relating to the Group Companies; and
(b) information relating to the Offer
in accordance with the Senior Credit Agreement.
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8. PAYMENTS
8.1 All payments by the Borrower under the Facility are to be made in
immediately available funds free and clear of and without any
withholding or deduction for any and all present or future taxes,
duties, levies, fees or other charges and without any set-off or
counter-claim whatsoever.
8.2 If any deduction or withholding is required in respect of any sum
payable under the Facility, the Borrower will increase the sum paid so
that the net amount received by the Bank after the deduction or
withholding (and after the payment of any tax or additional tax which
is due as a consequence of the increase) equals the amount which the
Bank would have been entitled to receive in the absence of any
requirement to make that deduction or withholding.
8.3 The Borrower irrevocably authorises the Bank to debit from time to
time to any accounts it may have with the Bank all or any amounts due
to the Bank in connection with the Facility.
9. INDEMNITY
9.1 The Borrower will at all times on demand indemnify the Bank against
all Indemnified Events and the Borrower will pay to the Bank the
amount of all payments made (whether directly or by way of set-off,
counterclaim or otherwise) and all losses, costs or expenses suffered
or incurred from time to time by the Bank arising under any liability
which the Bank has incurred under any utilisation of the Facility in
accordance with the terms of this letter.
9.2 If, for any reason, any amount payable to the Bank is received or
recovered in a currency other than the contractual currency in which
it is due, then, to the extent that amount actually received or
recovered by the Bank (when converted by the Bank into the contractual
currency at the applicable rate of exchange) falls short of the amount
due in the contractual currency, the Borrower shall, as a separate and
independent obligation, reimburse the Bank on demand (on a full
indemnity basis) for the amount of such shortfall.
9.3 The liability of the Borrower under this clause 9 shall not be
affected by any time being given or by anything being done or not done
by the Bank (save for acts of gross negligence by the Bank).
10. GUARANTEE
The Parent hereby irrevocably and unconditionally guarantees to the
Bank the repayment by the Borrower of all amounts due in respect of
the Facility on the terms set out in Schedule 3.
11. EVENTS OF DEFAULT
11.1 Each of the events set out in this clause 11.1 constitutes an "Event
of Default", whether or not the occurrence of the event concerned is
outside the control of any Group Company.
(a) The Parent or the Borrower fails to pay on the due date any
amount payable by it under the Finance Documents at the place at
which and in the currency in which it is expressed to be payable,
unless the Bank is satisfied that non-payment is due solely to
administrative or technical delays in the transmission of funds
and payment is made within three Business Days of its due date.
(b) The Borrower draws down under the Facility at any time on or
after 26 March 2003.
(c) Any Event of Default (as defined in the Senior Credit Agreement)
occurs under the Senior Credit Agreement.
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(d) Any Event of Default (as defined in the Mezzanine Loan Agreement)
occurs under the Mezzanine Loan Agreement.
11.2 At any time after the occurrence of an Event of Default which is
continuing the Bank may by notice to the Borrower do all or any of the
following, in addition and without prejudice to any other rights or
remedies which it may under any Finance Document:
(a) terminate the availability of the Facility, whereupon the
Facility shall cease to be available for drawing and the Bank
shall be under no further obligation to make advances; and/or
(b) declare all or any drawings, accrued interest thereon and any
other amounts then payable under the Finance Documents to be
immediately due and payable, whereupon those amounts shall become
so due and payable; and/or
(c) declare all or any drawing to be repayable on demand, whereupon
those drawings shall become payable on demand.
12. INTERCREDITOR DEED
Payments in respect of this Facility (save for the avoidance of doubt
under clause 17), may only be made if permitted by the terms of the
Intercreditor Deed and neither the Parent nor the Borrower shall be
solely in default under the terms of this letter by reason of any
payment which would otherwise be due being postponed under the terms
of the Intercreditor Deed. In addition, changes may only be made to
the provisions of this letter to the extent permitted by the
Intercreditor Deed. No transfer may be made of the Bank's rights
and/or obligations under this letter unless the person to whom such
rights and/or obligations are transferred is, or becomes, a party to
the Intercreditor Deed.
13. NOTICES
Unless otherwise provided for in this letter, all notices or
communications to or between the parties will be in writing and:
(a) will be by first class pre-paid post or by fax transmission,
authentificated to the satisfaction of the Bank and if by letter,
receipt will be deemed forty-eight hours after posting (unless
hand delivered and then at time of delivery) and if by fax, when
sent (provided a transmission report is received);
(b) in order to provide that a notice or demand has been made, the
Bank need only establish that the notice or demand was properly
addressed and posted or transmitted;
(c) if given to the Bank it will be given at the address at the head
of this letter or at any other address in the UK which the Bank
may designate at any time by notice to the Borrower;
(d) if given to the Borrower or the Parent, it will be deemed to be
duly given if given at the address shown above or at any other UK
address that the Borrower or the Parent (as the case may be)
designates by notice to the Bank;
(e) the Bank may rely upon any communication by telephone or fax or
purporting to be on behalf of the Borrower or the Parent by
anyone notified to the Bank as being authorised without enquiry
as to authority or identity. Each of the Borrower and the Parent
agrees to indemnify the Bank against any liability incurred or
sustained by the Bank as a result.
14. EXPENSES
The Borrower will pay or reimburse to the Bank (on a full indemnity
basis) all reasonable legal, accountancy, valuation, due diligence and
other fees, costs and out-of- pocket expenses or tax charged
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to or incurred by the Bank in connection with this letter (including
the amendment, waiver, enforcement or preservation of the Bank's
rights) on demand.
15. CHANGE OF CIRCUMSTANCES AND ILLEGALITY
15.1 In the event of any change in applicable law or regulation or the
existing requirements being imposed by, the Bank of England or any
central bank, governmental fiscal, monetary, regulatory or other
authority the result of which, in the sole opinion of the Bank, is to
increase the cost of it funding, maintaining or making available the
Facility (or any undrawn amount thereof) or to reduce the effective
return to the Bank, then the Borrower shall pay to the Bank such sums
as may be certified by the Bank to the Borrower as shall compensate
the Bank for such increased cost or such reduction.
15.2 If it becomes contrary to any law or regulation for the Bank to make
the Facility available or to maintain its participation in any drawing
or its commitment under this letter, then the Bank may give notice to
that effect to the Borrower, whereupon:
(a) the Borrower will in good time before the latest date permitted
by the relevant law or regulation prepay all drawings then
outstanding, together with all interest accrued on those drawings
and pay all other amounts due to the Bank under this letter
(including under clause 9 (Indemnity)); and
(b) the Bank's undrawn commitment (if any) will immediately be
cancelled and the Bank will have no further obligation to make
the Facility available.
16. SET-OFF
Any sum of money at any time standing to the credit of the Borrower or
the Parent with the Bank in any currency upon any account or otherwise
(whether or not any such account is held in the Borrower's or the
Parent's (as the case may be) name), may be applied by the Bank at any
time (without notice to the Borrower or the Parent) in or towards the
discharge of any money or liabilities now or hereafter due, owing or
incurred to the Bank by the Borrower or the Parent hereunder (whether
presently payable or not).
17. LOAN NOTES
17.1 If the Facility is not repaid in full by 30 April 2003 the Borrower
will issue subordinated unsecured guaranteed discounted loan notes
(the "Bridge Loan Notes") to the Bank for an aggregate issue price
equal to the aggregate amount then payable under the Finance
Documents. Subject to the foregoing, the Bridge Loan Notes will be
issued on the same terms as the Alchemy Undertaking Investor Loan
Notes. The Bank hereby agrees to subscribe for the Bridge Loan Notes.
17.2 The issue of the Bridge Loan Notes to the Bank shall discharge the
Borrower's obligations to repay the Facility and any other amounts
payable under the Finance Documents and shall cure and discharge any
then subsisting Events of Default.
17.3 Each of the parties will, at the expense of the Borrower, execute such
deeds and other agreements and otherwise take such action as may be
necessary to facilitate the issue of and subscription for the Bridge
Loan Notes.
18. GENERAL
18.1 If any provision of this letter is or becomes invalid, illegal or
unenforceable in any respect under any law of any jurisdiction, the
validity, legality and enforceability of the remaining provisions of
this letter and the validity, legality and enforceability of those
provisions under the law of other jurisdictions shall not in any way
be affected or impaired thereby.
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18.2 The agreement evidenced by this letter is for the benefit of the Bank
and its successors and assigns including, without limitation, any
entity with which the Bank may merge or amalgamate or by which it may
be absorbed or to which it may transfer all or any part of its
undertaking or assets. No change in the Bank's constitution nor any
such merger, amalgamation, absorption or transfer shall prejudice or
affect its rights under this letter in any respect. Neither the
Borrower nor the Parent may assign or transfer any of its rights,
benefits or obligations under this letter.
18.3 This letter may be executed in counterpart all of which will, when
read together, constitute one and the same document.
19. GOVERNING LAW
19.1 This letter will be governed by and construed in accordance with
English law and each of the Borrower and the Parent submits, for the
exclusive benefit of the Bank, to the jurisdiction of the English
Courts (but without prejudice to the right of the Bank to commence
proceedings against the Borrower and/or the Parent in any other
jurisdiction) and irrevocably waives any objections on the ground of
venue or forum non conveniens or any similar grounds.
19.2 Without prejudice to any other permitted mode of service, the Parent
agrees that service of any claim form, notice or other document for
the purpose of any proceedings in such courts shall be duly served
upon it if delivered or sent by registered post to the Borrower at 00
Xxxxxxxxxxx, Xxxxxx XX0X 0XX marked for the attention of Xxxxxxx Xxxxx
or such other address in England or Wales as the Parent may notify
from time to time to the Bank. The Borrower agrees to act as such
agent.
20. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
The parties expressly agree that no other person not a party to this
letter shall have the benefit of, or the right to enforce, any term of
this letter by virtue of the Contracts (Rights of Third Parties) Act
1999.
Yours faithfully
/s/ Xxxxxx Xxxxxxx
For and on behalf of
BARCLAYS BANK PLC
Xxxxxx and accepted on behalf of )
)
HERTAL (INVESTMENTS) LIMITED )
as the BORROWER by )
/s/ Xxxxxxx Xxxxxxxx
............................................. Director
Date: 18 January 2003
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Xxxxxx and accepted on behalf of )
)
HERTAL ACQUISITIONS PLC )
as the PARENT by )
/s/ Xxxxxxx Xxxxxxxx
............................................. Director
Date: 18 January 2003
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SCHEDULE 1
"Dollars" and "$" means the lawful currency of the United States of America.
"Fees Letter" means the letter from the Bank to the Borrower dated on or about
the date of this agreement referred to in paragraph 4 of schedule 2;
"Finance Documents" means this agreement, the Fees Letter and any other document
designated as a Finance Document by the Borrower and the Bank;
"Indemnified Events" means all actions, suits, proceedings, claims, demands,
liabilities, costs, expenses, losses, damages and charges whatsoever (except
those arising as a result of the gross negligence or wilful misconduct of the
Bank) which may occur in relation to or arising out of any utilisations of the
Facility made available by the Bank or as a consequence of non-performance by
the Borrower or the Parent of any obligation under this letter or any drawing or
overdue amount being repaid or prepaid otherwise than on the last day of an
interest period relating to that drawing or overdue amount.
"UK" means the United Kingdom of Great Britain and Northern Ireland.
Interpretation
Any reference in this letter to:
1. statutes, statutory provisions and other legislation shall include all
amendments, substitutions, modifications and re-enactments for the
time being in force;
2. "control" of any company shall be interpreted in accordance with
Section 840 of the Income and Corporation Taxes Act 1988;
3. "including" shall not be construed as limiting the generality of the
words preceding it;
4. "a Schedule" shall be construed as a reference to the schedule to this
letter;
5. any term or phrase defined in the Companies Act 1985 (as amended from
time to time) shall bear the same meaning in this letter;
6. words importing the singular shall include the plural and vice versa
and words denoting any gender shall include all genders;
7. this letter and to any provisions of it or to any other document
referred to in this letter shall be construed as references to it in
force for the time being and as amended, varied, supplemented,
restated, substituted or novated from time to time;
8. a person are to be construed to include references to a corporation,
firm, company, partnership, joint venture, unincorporated body or
persons, individual or any state or any agency of a state, whether or
not a separate legal entity;
9. any person are to be construed to include that person's assignees or
transferees or successors in title, whether direct or indirect.
Clause headings are for ease of reference only and are not to affect the
interpretation of this letter.
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SCHEDULE 2
Part 1 - Conditions Precedent to signing this letter
1. Facility Letter: Evidence that each of the Borrower and the Parent
have accepted this letter (such acceptance signified by each of the
Borrower and the Parent returning to the Bank the enclosed duplicate
of this letter duly signed on the Borrower's or the Parent's (as the
case may be) behalf).
2. Formalities Documents: each of the Borrower and the Parent delivering
to the Bank a certified copy of a resolution of the Borrower's Board
of Directors or the Parent's Board of Directors (as the case may be):
(a) accepting the terms and conditions stated in this letter;
(b) authorising a specified person or persons, to sign and return a
duplicate of this letter to the Bank;
(c) authorising the Bank to accept instructions and confirmations in
connection with the Facility signed in accordance with the Bank's
signing mandate, current from time to time and to accept
instructions in connection with drawings under the Facility, by
telephone from any person specifically authorised to give such
telephone instructions (full names and position of such persons
required);
(d) each of the Borrower and the Parent delivering to the Bank
confirmed specimen signatures of those persons referred to in
paragraph 2(b) above.
3. Alchemy Undertaking: an undertaking in the form agreed between the
Bank and the Borrower dated on or about the date of this letter
whereby Alchemy Partners (Guernsey) Limited undertakes to the Bank to
make funds available to the Borrower.
4. Fee Letter: the Fees Letter in the form agreed between the Bank and
the Borrower dated on or about the date of this letter duly executed
and delivered by the parties thereto.
5. Legal Opinions:
(a) a legal opinion of Xxxxx Xxxxxxxx;
(b) a legal opinion of XxXxxx Xxxxxxxxxx;
(c) a legal opinion of Xxxxxxx Xxxxxx Xxxxx.
6. Senior Conditions Precedent: Evidence that the conditions precedent
set out in part 1 of Schedule 4 to the Senior Credit Agreement have
been satisfied (or waived by the Facility Agent acting on the
instructions of all the Lenders).
7. Plan: A letter of advice from Xxxxxxxxxxx addressed to the Bank in
form and substance satisfactory to the Bank (acting reasonably)
regarding the giving notices of cancellation by participators in the
Alchemy Investment Plan (as defined in the Alchemy Undertaking).
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Part 2 - Conditions Precedent to first drawdown
1. Fees: evidence that, upon first drawdown, all fees payable in
accordance with the Fees Letter and this letter will be paid.
2. Senior Conditions Precedent: Evidence that the conditions precedent
set out in part 2 of Schedule 4 to the Senior Credit Agreement have
been satisfied (or waived by the Facility Agent acting on the
instructions of all the Lenders) and that clause 4.1(c) of the Senior
Credit has been complied with (or waived by the Facility Agent acting
on the instructions of all the Lenders).
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SCHEDULE 3
Guarantee
1. Guarantee: The Parent irrevocably and unconditionally:
(a) guarantees to the Bank punctual performance by the Borrower of
all the Borrower's obligations under the Finance Documents;
(b) undertakes with the Bank that whenever the Borrower does not pay
any amount when due under or in connection with any Finance
Document, the Parent shall immediately on demand pay that amount
as if it was the principal obligor;
(c) indemnifies the Bank immediately on demand against any cost, loss
or liability suffered by the Bank if the guarantee given under
paragraph 1(a) (Guarantee) or any obligation guaranteed by it is
or becomes unenforceable, invalid or illegal.
2. Further guarantee provisions: The obligations of the Parent under
paragraph 1 (Guarantee) (the "Guarantee Obligations"):
(a) will not extend to cover any indebtedness which, if they did so
extend would cause the infringement of section 60 of the Irish
Companies Act, 1963;
(b) are a continuing security and will extend to the ultimate balance
of all amounts payable by the Borrower under any Finance
Document, regardless of any intermediate payment or discharge in
whole or in part; and
(c) are in addition to and are not in any way prejudiced by any other
security now or subsequently held by the Bank.
3. No discharge: The Guarantee Obligations shall not be discharged,
diminished or in any way adversely affected as a result of any of the
following (whether or not known to the Parent, the Borrower or the
Bank):
(a) any time, consent or waiver given to, or composition made with,
the Parent, the Borrower or any other person;
(b) any amendment to, or replacement of, any Finance Document
(however fundamental) or any other agreement or security;
(c) the taking, variation, compromise, renewal, release or refusal or
neglect to perfect or enforce any right, remedies or security
against the Parent, the Borrower or any other person;
(d) any purported obligation of the Parent, the Borrower or any other
person to the Bank (or any security for that obligation) becoming
wholly or partly void, invalid, illegal or unenforceable for any
reason;
(e) any incapacity, lack of power, authority or legal personality or
any change in the constitution of, or any amalgamation or
reconstruction of, the Parent, the Borrower, the Bank or other
person;
(f) the Parent, the Borrower or other person becoming insolvent going
into receivership or liquidation, having an administrator
appointed or becoming subject to any other procedure for the
suspension of payments to or protection of creditors or similar
proceedings;
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(g) any change in the constitution of the Bank or as a result of the
amalgamation or consolidation by the Bank with any other person;
or
(h) any other act, omission, circumstance, matter or thing which, but
for this provision, might operate to release, reduce or otherwise
exonerate the Parent from any of its obligations under paragraph
1.
4. Determination of Guarantee Obligations: If, notwithstanding paragraph
2(b) (Further guarantee provisions), the Guarantee Obligations cease
to be continuing obligations:
(a) the Bank may continue any account or open one or more new
accounts with the Parent and/or the Borrower and the liability of
the Parent shall not be reduced or affected in any way by any
subsequent transactions or receipts or payments into or out of
any such account; and
(b) the Parent will remain liable in relation to all indebtedness
referred to in paragraph 1(a) (Guarantee) as at the date of
determination (whether demanded or not) and whether or not the
Borrower is then in default under the Finance Documents.
5. Immediate recourse: The Parent waives any right it may have of first
requiring the Bank (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 the Parent under the provisions of
this schedule 3. This waiver applies irrespective of any law or any
provision of a Finance Document to the contrary.
6. No Subrogation: Subject to paragraph 7 (Exercise of subrogation),
until all amounts which may be or become payable by the Borrower or
the Parent under or in connection with any Finance Document have been
irrevocably paid in full the Parent undertakes not to exercise any
rights which it may have:
(a) to be surrogated to or otherwise share in any security or monies
held, received or receivable by the Bank or to claim any right of
contribution in relation to any payment made by the Parent under
this letter;
(b) to enforce any of its rights of subrogation and indemnity against
the Parent, the Borrower or any co-surety;
(c) following a claim being made on the Parent under paragraph 1
(Guarantee), to demand or accept repayment of any monies due from
the Borrower to the Parent or claim any set-off or counterclaim
against the Borrower; or
(d) to claim or prove in a liquidation or other insolvency proceeding
of the Parent, the Borrower or any co-surety in competition with
the Bank.
7. Exercise of subrogation: Following the making of a demand on the
Parent under paragraph 1 (Guarantee), the Parent will (at its own
cost) promptly take such of the steps or action as are referred to in
paragraph 6 (No subrogation) as the Bank may from time to time
stipulate.
8. Turnover: The Parent shall promptly pay to the Bank an amount equal to
any set-off, proof or counterclaim exercised by it against the
Borrower or any co-surety and shall hold in trust for, and promptly
pay or transfer to, the Bank any payment, distribution or benefit of
security received by it, whether arising as a result of a breach of
paragraph 6 (No subrogation) or compliance with directions given under
paragraph 7 (Exercise of subrogation).
9. Suspense accounts: Until all amounts which may be or become payable by
the Parent or the Borrower under or in connection with any Finance
Document have been irrevocably paid in full, any amount received or
recovered by the Bank from the Parent in relation to any amount due
and payable by the Borrower under any Finance Document may be held by
the recipient in a suspense account.
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Amounts deposited in any such account shall accrue interest at the
Bank's usual rate for deposits of a similar amount and nature from
time to time and interest accrued shall be credited to that account.
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