EXHIBIT 10.30
[*] = information redacted pursuant to a confidential treatment request. Such
omitted information has been filed separately with the Securities and Exchange
Commission.
DATED 30 November 2001
PALM EUROPE LIMITED
and
FOOTHILL CAPITAL CORPORATION
(as Agent)
-------------------------------
GUARANTEE AND DEBENTURE
-------------------------------
Xxxxxxx Xxxx and Xxxx
Park Gate
00 Xxxxxx Xxxx
Xxxxxx XX00 0XX
Tel: x00 (0)0000 000 000
Fax: x00 (0)0000 000 000
TABLE OF CONTENTS
Clause Page
1. Definitions and Interpretation 1
2. Covenant to Pay 4
3. Charging Clause 5
4. Deposit of Title and other Documents 8
5. Collection of Receivables 8
6. Negative Pledge and other Restrictions 9
7. Further Assurance 9
8. Continuing Security 10
9. General Covenants 10
10. Insurance Covenants 11
11. Property Covenants and Consolidation of Mortgages 11
12. Powers of Sale, Leasing and Accepting Surrenders 11
13. Opening of New Accounts 12
14. Appointment and Powers of a Receiver 12
15. Power of Attorney 16
16. Other Powers Exercisable by the Agent 17
17. Application of Money received by the Agent or a Receiver 18
18. Costs and Interest on Overdue Amounts 18
19. Set-Off 19
20. Transfer 20
21. Disclosure 20
22. Perpetuity Periods 20
23. Forbearance and Severability 20
24. Variations and Consents 21
25. Service of Demands and Notices 21
26. Counterparts 22
27. Adjustment of Account 22
28. Proviso for Redemption and Releases 22
29. Security Trusteeship 23
30. Third Parties 23
31. Governing Law and Submission to Jurisdiction 23
THE FIRST SCHEDULE 26
The Charging Company 26
THE SECOND SCHEDULE 27
Terms of Guarantee 27
Collection Account Side Letters 30
THIS DEBENTURE made the 30 day of November 2001
BETWEEN:
(1) PALM EUROPE LIMITED, a company incorporated in England and Wales whose
registered office is at 000 Xxx Xxxxxx Xxxxxx, Xxxxxx, XX0X 0XX as the
Charging Company (as defined below);
(2) FOOTHILL CAPITAL CORPORATION, a Californian corporation with its principal
place of business at 0000 Xxxxxxxx Xxxxxx Xxxxx 0000X, Xxxxx Xxxxxx,
Xxxxxxxxxx 00000 as agent for itself and the Lenders (as defined below)
(the "Agent");
WITNESSES as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions: In this Debenture, words or expressions defined in the Loan
Agreement (as defined below) shall, unless otherwise defined below, bear
the same meaning in this Debenture and, in addition, in this Debenture
(unless the context otherwise requires) the following expressions have the
following meanings:
"Agent" shall have the meaning given to it in the Loan Agreement and shall
include, where the context permits or requires, any successor or
replacement or other agent or security trustee appointed pursuant to that
agreement;
"Assets" means all the undertakings, property, assets, rights and revenues
of the Charging Company whatsoever, present or future, wherever situated
in the world and includes each or any of them;
"Charged Property" means any assets charged, secured or assigned, whether
in law or in equity, to the Lenders and/or Agent pursuant to this
Debenture;
"Charging Company" means Palm Europe Limited, details of which are given
in the First Schedule, and includes (with effect from its execution and
delivery of an agreement under which it accedes to the Debenture, or of a
Debenture in terms similar to this Debenture) any company which
subsequently adopts the obligations of the Charging Company and also
(where the context permits) includes each or any of them;
"Collection Account" has the meaning given to it by Clause 5 (Treatment of
Receivables);
"Confidential Information" has the meaning given to it in the Loan
Agreement;
"this Debenture" means this Debenture;
"Default" has the meaning given to it in the Loan Agreement;
"Employee Life Assurance Policies" means all assurance policies relating
to accident or permanent health taken out for the purpose of benefiting
any employee or
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his dependants to the extent that the Charging Company is legally obliged
to pay out the benefit of such policies to the relevant employees or their
dependants;
"Enforcement Date" means the date upon which the Lenders and/or Agent
shall first enforce any part of the security hereby created in accordance
with the terms of the Loan Agreement and/or this Debenture;
"Event of Default" means (i) a Triggering Event as defined in the Loan
Agreement or (ii) a Triggering Event as defined in the Palm Global Loan
Agreement;
"Floating Charge Assets" means, insofar only as concerns the floating
charge created by Clause 3 (Charging Clause), Assets for the time being
comprised within such floating charge;
"Holding Company" means a parent undertaking within the meaning of Section
258 of the Companies Xxx 0000;
"Indebtedness" includes any obligation in any currency, whether incurred
as principal debtor or surety, for the payment or repayment of money,
whether present or future, actual or contingent;
"Land" means any freehold and leasehold land in England and Wales and
immovable property in Scotland or the equivalent under any other
jurisdiction and in each case all buildings and structures and fixtures
upon and all things affixed or annexed to Land (including trade and
tenants' fixtures) in which the Charging Company may in the future acquire
an interest;
"Lenders" has the meaning given to it in the Loan Agreement;
"Lien" has the meaning given to it in the Loan Agreement;
"Loan Agreement" means the loan agreement to be made between the Charging
Company (as Subsidiary Borrower), Foothill Capital Corporation, Xxxxxx
Financial Inc., and The CIT Group/Business Credit, Inc. (as amended,
supplemented and/or restated from time to time, including in relation to
an increase in the facilities provided thereunder);
"Loan Documents" means the UK Loan Documents and the Palm Global Loan
Agreement together;
"Palm Global" means Palm Global Operations Limited, a company incorporated
in the Republic of Ireland with company number 317106;
"Palm Global Loan Agreement" means the loan agreement to be made between
Palm Global, Foothill Capital Corporation, Xxxxxx Financial Inc., and The
CIT Group/Business Credit, Inc. (as amended, supplemented and/or restated
from time to time including in relation to an increase in the facilities
provided thereunder);
"Permitted Lien" has the meaning given to it in the Loan Agreement;
"Receivables" means all book and other debts now or in the future owing to
the
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Charging Company and all rights and claims of the Charging Company
against third parties, present and future, capable of being satisfied by
the payment of money (except rights and claims charged in Clauses 3.1.1,
3.1.4 and 3.1.5 and except as provided in Clause 3.8)
"Receiver" means any receiver or receivers appointed under Clause 14
(Appointment of Receiver) and (where the context requires or permits)
includes any substituted receiver or receivers;
"Recoveries" means any money received by the Agent or by the Receiver
under this Debenture and/or under the Loan Agreement on or after the
Enforcement Date;
"Secured Sums" means all money and liabilities covenanted and/or
guaranteed to be paid or discharged or indemnified by the Charging Company
to the Lenders under the Loan Agreement and Clause 2.1 (Covenant to Pay)
or 2.2 (Indemnity);
"Subsidiary" means a subsidiary undertaking within the meaning of Section
258 of the Companies Xxx 0000;
"UK Loan Documents" bears the meaning given to it in the Loan Agreement;
"United Kingdom" and "UK" means the United Kingdom of Great Britain and
Northern Ireland;
"writing" includes telex, facsimile transmission and any other mode of
representing or reproducing words in a legible and non-transitory form,
except in relation to any certificate, notice or other document which is
expressly required by this Debenture to be signed, and "written" has a
corresponding meaning.
1.2 Interpretation: In this Debenture, unless the context otherwise requires:
1.2.1 words denoting the singular number only shall also include the
plural number and vice versa; words denoting the masculine
gender only shall also include the feminine;
1.2.2 gender; words denoting persons only shall include corporations,
partnerships and unincorporated associations;
1.2.3 references to clauses, paragraphs and Schedules are to be
construed as references to clauses, paragraphs and Schedules of
this Debenture;
1.2.4 references to any party shall, where relevant, be deemed to be
references to or to include, as appropriate, their respective
successors or permitted assigns;
1.2.5 references in this Debenture to this Debenture or any other
document include references to this Debenture or such other
document as varied, supplemented, restated and/or replaced in
any manner from time to time and/or any document which varies,
supplements, restates and/or replaces it;
1.2.6 references to "including" shall not be construed restrictively
but shall be
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construed as meaning "including, without prejudice to the
generality of the foregoing";
1.2.7 references to moneys, obligations and liabilities due, owing or
incurred under the Loan Agreement shall include moneys,
obligations and liabilities due, owing or incurred in respect of
any extensions or increases in the amount of the facilities
provided for therein or the obligations and liabilities imposed
thereunder;
1.2.8 expressions defined in the Companies Xxx 0000 shall have the
same meanings in this Debenture, except that the expression
"company" shall include a body corporate established outside
Great Britain;
1.2.9 any reference to any statute or any section of any statute shall
be deemed to include reference to any statutory modification or
re-enactment of it for the time being in force; and
1.2.10 the limitation on liability conferred by section 6(2) of the Law
of Property (Miscellaneous Provisions) Act 1994 ("LP (MP) Act")
shall not apply to the covenants for title implied on the part
of the Charging Company and Section 3(1)(b) of the LP (MP) Act
shall be construed without the words "other than any charges,
encumbrances or rights which that person does not and could not
reasonably be expected to know about".
1.3 Headings: Headings in this Debenture are inserted for convenience and
shall not affect its interpretation.
2. COVENANT TO PAY
2.1 Covenant to Pay: The Charging Company hereby:
2.1.1 covenants that it will on demand in writing made in accordance
with the Loan Agreement pay or discharge to the Agent all money
and liabilities now or in the future due, owing or incurred to
the Agent and the Lenders by the Charging Company under or
pursuant to the Loan Agreement as and when the same fall due for
payment; and
2.1.2 covenants and guarantees that it will on demand in writing made
to it by the Agent pay or discharge to the Agent all money and
liabilities (including all Obligations) now or in the future
due, owing or incurred but unpaid to the Lenders by Palm Global
(except as a guarantor for the Charging Company) under or
pursuant to the Palm Global Loan Agreement;
in either case, whether on or after such demand, whether actually or
contingently, whether solely or jointly with any other person, whether as
principal or surety and whether or not any of the Lenders was an original
party to the relevant transaction, including all interest, commission,
fees, charges, costs and expenses which the Lenders may claim pursuant, in
the case of (a), to the UK Loan Documents, or, in the case of (b), to the
Palm Global Loan Agreement and so that interest shall be computed and
compounded in accordance with the UK Loan Documents (or in the case of
(b),
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the Palm Global Loan Agreement) after as well as before any demand or
judgement.
2.2 Indemnity: The Charging Company further agrees as a separate and
independent primary obligation to indemnify the Agent and the Lenders on
demand in writing made to it by the Agent for and against any loss, cost,
expenses or liability of any kind incurred as a result of any of the
obligations hereby guaranteed or covenanted to be paid by the Charging
Company being or becoming void, unenforceable or ineffective against the
Charging Company or Palm Global for any reason whatsoever whether known to
the Agent or any Lender or not and for all other amounts expressed to be
guaranteed but which are not recovered from the Charging Company or Palm
Global on the footing of a guarantee for any reason whatsoever.
2.3 Terms of Guarantees: The guarantee contained in 2.1.2 (Covenant to Pay) is
given subject to, and with the benefit of, the provisions set out in the
Second Schedule.
2.4 Demands from the Agent: The making of one demand under this Debenture will
not preclude the Agent from making any further demands. The Agent may only
make a demand under this Debenture for payment of the Secured Sums
following the occurrence and during the continuance of an Event of Default
or if otherwise entitled to do so under the Loan Agreement or under Clause
2.1.2 or Clause 2.2.
2.5 Third Parties: No demand may be made under this Debenture in respect of
sums due, owing or incurred under a Loan Document except to the extent
that the Agent has become entitled to make such demand under the relevant
Loan Document, but any third party dealing with the Agent or any Receiver
appointed under this Debenture shall not be concerned to see or enquire as
to the validity of any demand under this Debenture.
2.6 All sums payable by the Charging Company under this Debenture shall be
paid without any set off, counterclaim, withholding or deduction
whatsoever unless required by law (or where such set off, counterclaim,
withholding or deduction is permitted by the terms of the Loan Agreement)
in which event the Charging Company making the payment will (except in
circumstances where it would not be required so to do under the terms of
the Loan Agreement) simultaneously with making the relevant payment under
this Debenture pay to the Lender such additional amount as will result in
the receipt by the Lender of the full amount which would otherwise have
been receivable and will supply the Lender promptly with evidence
satisfactory to the Lender that the Charging Company has accounted to the
relevant authority for the sum withheld or deducted.
2.7 The Agent on behalf of each Lender (but without liability on the part of
the Agent), covenants with the Charging Company that it shall perform its
obligations under the Loan Agreement (including any obligation to make
available further advances).
3. CHARGING CLAUSE
3.1 Charging Clause: The Charging Company with full title guarantee (but
subject to any Permitted Liens) hereby charges to the Agent (for the
benefit of itself and the other Lenders) as security for the payment or
discharge of all Secured Sums:
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3.1.1 by way of first fixed charge, all contracts and policies of
insurance and assurance (or any interest therein) now or in the
future held by the Charging Company to the extent relating to
the Charged Property and all rights and interests of the
Charging Company in every such contract and policy (including
the benefit of all claims arising and all money payable under
such contracts and policies) (but excluding Employee Life
Assurance Policies);
3.1.2 by way of first fixed charge, all Receivables but for the
avoidance of doubt not including bank accounts held by the
Charging Company other than as expressly charged in paragraph
3.1.3 below;
3.1.3 by way of first fixed charge, all money at any time standing to
the credit of any Collection Account including the proceeds of
all its Receivables, which proceeds shall, for the avoidance of
doubt, on payment into such Collection Account, cease to be
subject to the charges contained in the preceding provisions of
this Clause 3.1 but shall be subject to the fixed charge
contained in this paragraph 3.1.3;
3.1.4 by way of first fixed charge, all equipment, machinery, machine
tools, motors, furniture, furnishings, fixtures, vehicles
(including motor vehicles), tools, parts, goods (other than
consumer goods or farm products), now or in the future belonging
to the Charging Company, wherever located, including all
attachments, accessories, replacements, substitutions, additions
and improvements thereto; and
3.1.5 by way of floating charge, all Assets expressed to be subject to
any fixed charge contained in the preceding provisions of Clause
3.1 to the extent that the relevant fixed charge may be
ineffective or invalid or deemed not to constitute a fixed
charge, and any Assets comprised within a charge which is
reconverted under Clause 3.5 (Decrystallisation of Floating
Charge);
but in each case so that the Charging Company shall not (save if and to
the extent permitted by the Loan Agreement) create any Lien over any
Floating Charge Asset (whether having priority over, or ranking pari passu
with or subject to, this floating charge) or take any other step referred
to in Clause 6.1 (Negative Pledge and other Restrictions) with respect to
any Floating Charge Asset and the Charging Company shall not, without the
prior written consent of the Agent, sell, transfer, part with or dispose
of any Floating Charge Asset except by way of sale in the ordinary course
of its business or as permitted under the Loan Agreement.
3.2 Crystallisation of Floating Charge: The floating charges created by the
Charging Company in Clause 3.1.5 (Charging Clause) may be crystallised
into fixed charges by notice in writing given at any time by the Agent to
the Charging Company given:
3.2.1 at any time whilst an Event of Default is continuing; or
3.2.2 in respect of any Charged Property whilst the Agent reasonably
considers the security over it is in jeopardy or which is in
danger of seizure.
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Such crystallisation shall take effect over such Floating Charge Assets or
class or classes of Floating Charge Assets as shall be specified in the
notice. If no Floating Charge Assets are so specified, it shall take
effect over all Floating Charge Assets of the Charging Company.
3.3 Automatic Crystallisation:
3.3.1 Without prejudice to any rule of law which may have a similar
effect if the Charging Company, without the Agent's prior
written consent, resolves to take or takes any step to charge
(whether by way of fixed or floating charge) or otherwise create
any Lien (other than any Permitted Lien) over (or to create a
trust over) any of its Floating Charge Assets or to dispose of
any such Floating Charge Assets except by way of sale or other
disposition in the ordinary course of its business (or as
permitted by the Loan Agreement);
3.3.2 if any person resolves to take or takes any step to levy any
distress, execution, sequestration or other process against any
Floating Charge Asset relating to a liability of the Charging
Company; or
3.3.3 if an Event of Default takes place or if any of the Secured Sums
become due and outstanding prior to their stated maturity;
then the floating charge created by Clause 3.1.5 (Charging Clause) shall
be automatically crystallised (without the necessity of notice) into a
fixed charge over such Floating Charge Asset instantly on the occurrence
of such event.
3.4 Floating Charge Assets acquired after Crystallisation: Except as otherwise
stated in any notice given under Clause 3.2 (Crystallisation of Floating
Charge) or unless such notice relates to all Floating Charge Assets,
Floating Charge Assets acquired by the Charging Company after
crystallisation has occurred under Clause 3.2 (Crystallisation of Floating
Charge) or 3.3 (Automatic Crystallisation) shall continue subject to the
floating charge created by Clauses 3.1 (Charging Clause), so that the
crystallisation shall be effective only as to its Floating Charge Assets
in existence at the date of crystallisation.
3.5 Decrystallisation of Floating Charge: Any charge by the Charging Company
which has crystallised under Clause 3.2 (Crystallisation of Floating
Charge) or 3.3 (Automatic Crystallisation) may, by notice in writing given
at any time by the Agent to the Charging Company, be reconverted into a
floating charge in relation to the Assets or class or classes of Assets
specified in such notice.
3.6 Priority of Fixed Security: Any mortgage, fixed charge or other fixed
security whenever and however created by the Charging Company and
subsisting in favour of the Agent shall (save as the Agent may otherwise
declare at or after the time of its creation) have priority over the
floating charge created by Clause 3.1.5 (Charging Clause).
3.7 Debenture to have Priority: Any debentures, mortgages or charges (fixed or
floating) created in the future by the Charging Company (except those in
favour of the
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Agent) shall be expressed to be subject to this Debenture and shall rank
in order of priority behind the charges created by this Debenture.
3.8 Floating Charges over Receivables to include Intra-Group Receivables: It
is hereby agreed, that the fixed charges given by the Charging Company
over its Receivables under Clause 3 (Charging Clause) shall not apply to
Receivables owing to the Charging Company by any other Group Company which
shall instead be subject to the floating charge contained in Clause 3.1.5
and shall not be required to be paid into the Collection Account.
4. DEPOSIT OF TITLE AND OTHER DOCUMENTS
Except as otherwise expressly agreed in writing by the Agent, the Charging
Company shall deposit with the Agent, and the Agent shall be entitled to
retain, all deeds and documents of title relating to all its Assets
charged by way of fixed charge under Clause 3 (Charging Clause) (including
policies of insurance and assurance).
5. COLLECTION OF RECEIVABLES
5.1 Treatment of Receivables: The Charging Company shall collect and realise
all Receivables in the ordinary and usual course of its business on behalf
of the Agent and shall, except as otherwise permitted by or pursuant to
the Loan Agreement, pay into the account or accounts agreed in writing
between the Agent and the Charging Company on or prior to the date of this
Debenture or such other account as the Agent may direct from time to time
(a "Collection Account") subject to and in accordance with the Third
Schedule all money which it may receive in respect of the Receivables
immediately on receipt. The Charging Company shall, pending such payment,
hold all money so received upon trust for the Agent and in accordance with
the Agent's instructions from time to time. The Charging Company shall
procure that any bank which maintains a Collection Account shall hold all
credit balances thereon to the order of the Agent. The Charging Company
shall procure that the authorised signatories of the Collection Account
shall at all times be such persons as Agent shall direct and no other
persons shall have authority to operate the Collection Account.
5.2 Preservation of Charges: The Charging Company shall subject to and in
accordance with the Third Schedule procure that the bank which holds the
initial Collection Account into which it is required to pay its
Receivables shall enter into such collection account agreements as the
Agent may require under the terms of the Loan Agreement and the Charging
Company shall not modify or cause to be modified such arrangements without
the Agent's prior written consent. The Charging Company shall use best
endeavours to procure that the bank which holds any subsequent Collection
Account that may be opened in accordance with Clause 5.1 shall enter into
such collection account agreements as the Agent may require under the
terms of the Loan Agreement and the Charging Company shall not modify or
cause to be modified such arrangements without the Agent's prior written
consent. In the event that the Agent does not require the Charging Company
to enter into any specific form of collection account agreement, the
Charging Company shall instead promptly give notice to any bank or
financial institution (other than the Agent) with which it holds a
Collection Account in the form set out in the Third Schedule and use all
reasonable endeavours to ensure that the relevant bank or financial
institution acknowledges such notice in
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the prescribed form.
5.3 Preservation of Charges upon Factoring: If the Agent releases, waives or
postpones its rights in respect of any Receivables for the purpose of
enabling the Charging Company to factor or discount them to a third party,
the charges created by this Debenture shall in all other respects remain
in full force and effect. In particular, all amounts becoming due to the
Charging Company from the third party and any Receivables re-assigned, or
due to be re-assigned, by the third party to the Charging Company shall be
subject to the relevant fixed charge created by Clause 3.1 (Charging
Clause), subject only to any defences or rights of set-off which the third
party may have against the Charging Company.
5.4 Delivery of Particulars of Receivables: The Charging Company shall deliver
to the Agent such particulars as to the amount and nature of its
Receivables as the Agent may from time to time reasonably require taking
into account the requirements of the Loan Agreement.
6. NEGATIVE PLEDGE AND OTHER RESTRICTIONS
6.1 The Charging Company shall not, without the prior written consent of the
Agent or save as otherwise permitted under the Loan Agreement (and, for
the avoidance of doubt, with the exception of any Permitted Liens):
6.1.1 create, or agree or attempt to create, or permit to subsist, any
Lien of any kind (including any security conferring power to
convert a floating charge into a fixed charge in relation to any
Asset) or any trust over any of its Assets or permit any Lien to
arise or subsist over any such Assets;
6.1.2 sell, assign, lease, license or sub-license, or grant any
interest in, or otherwise part with possessions of, dispose of,
or cease to control, any of its Charged Property, or the right
to receive or be paid the proceeds arising on collection or
realisation of the same or purport to do any such act (save
that, unless otherwise prohibited by the Loan Agreement or if
the Charged Property is expressed to be subject to a fixed
charge, it may deal with its Floating Charge Assets in the
ordinary course of its business) or allow any subsidiary to do
any such thing; or
6.1.3 dispose of the equity of redemption in respect of any Charged
Property.
7. FURTHER ASSURANCE
To the extent required to comply with the Loan Agreement or any of the
other Loan Agreements, the Charging Company shall, and shall procure that
its Subsidiaries shall, on demand by the Agent in writing, execute and
deliver to the Agent at the cost of the Charging Company and in such form
as the Agent may reasonably require:
7.1 a fixed charge over any interest in any Land in the future belonging to
the Charging Company;
7.2 a fixed charge over its Receivables or the Collection Account and,
following the occurrence of an Event of Default which is continuing,
unless the Agent otherwise
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agrees, shall give a legal assignment of its Receivables and/or give
notice to the relevant debtor or bank holding the Collection Account in
such form as the Agent has previously approved;
7.3 where any of its Charged Property (other than land) is situated outside
England and Wales, such fixed security under the law of the place where
the Asset is situated as the Agent may reasonably require;
7.4 a notice to any third party of any of the fixed charges or assignments
contained in this Debenture provided that the Agent will not require the
Charging Company to give such notice to customers of the Charging Company
unless either (i) such notice is required to perfect Lender's fixed charge
or assignment over the Receivables or Collection Accounts, (ii) any
changes are made to the Collection Accounts arrangements, or (iii) an
Event of Default has occurred; and
7.5 such other documents as the Agent may reasonably require further to secure
the payment of the Secured Sums, or to perfect or protect this Debenture
or facilitate its realisation on the exercise of the Agent's rights
thereunder, or to vest title to any Asset in itself or its nominee or any
purchaser and to register such security or title in any applicable
register, in each case consistent with the jurisdiction in which such
asset is situate with such legal opinions (if any) as the Agent may
reasonably require from lawyers acceptable to it in relation to such new
or additional charge or other security.
8. CONTINUING SECURITY
This Debenture shall be a continuing security and guarantee to the Agent,
notwithstanding any intermediate payment or settlement of account or any
other matter whatever, and shall be in addition to and shall not prejudice
or be prejudiced by any right of lien, set-off, combination or other
rights exercisable by the Agent and/or the Lenders as bankers against the
Charging Company or any Lien, guarantee, indemnity and/or negotiable
instrument now or in the future held by the Lenders and/or the Agent on
their behalf.
9. GENERAL COVENANTS
9.1 Notification of Acquisition of Assets: The Charging Company shall at all
times immediately notify the Agent in writing of its acquisition of any
interest or right in or to any Land material to the operation of any Group
Company's business.
9.2 Negative covenants regarding Receivables: Save as permitted by the Loan
Agreement, the Charging Company shall not, without the prior written
consent of the Agent (and other than to offer trade credit in the ordinary
course of its business, charge, factor, assign, postpone, subordinate,
set-off, release, compound, settle, cease to collect or waive its rights
of action in connection with any of its Receivables, do or omit to do
anything which is likely to materially delay or prejudice the full
recovery of its Receivables or otherwise deal with its Receivables save
than by collecting in and realising the same (to the extent required to do
so under Clause 5.1 (Treatment of Receivables) and paying the proceeds
into the Collection Account.
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9.3 Notification of Acquisition of Land: The Charging Company shall forthwith
notify the Agent of any agreement proposed or made by it (whether now
subsisting or made hereafter) for the acquisition by it or any person on
its behalf of any Land, or any estate or interest in any Land.
10. Insurance Covenants
10.1 Covenant to Insure: The Charging Company shall ensure that the insurance
covenants contained in Clause 6.8 of the Loan Agreement are complied with.
10.2 Application of Insurance Proceeds: All moneys received by the Charging
Company or the Agent on any policies of insurance relating to any Charged
Property shall be applied in the manner specified in Clause 6.8 of the
Loan Agreement and, if any moneys payable under any policies of insurance
are paid to the Charging Company, such moneys will be held on trust
pending their application for such purposes.
11. PROPERTY COVENANTS AND CONSOLIDATION OF MORTGAGES
11.1 Section 93: Section 93 of the Law of Property Xxx 0000, dealing with the
restriction on consolidation of mortgages, shall not apply to this
Debenture.
11.2 Leasing, etc.: The Charging Company shall not, without the prior written
consent of the Agent, exercise any power of leasing, or accept surrender
of leases of, any Land, nor (save where obliged to do so by law) extend,
renew or vary any lease or tenancy agreement or give any licence to assign
or underlet.
11.3 Parting with Possession: The Charging Company shall not part with
possession (except on the termination of any lease, tenancy or licence
granted to the Charging Company) of any Land or share the occupation of it
with any other person, or agree to do so, without the prior written
consent of the Agent.
12. POWERS OF SALE, LEASING AND ACCEPTING SURRENDERS
12.1 Statutory Power of Sale to arise on Enforcement: Section 103 of the Law of
Property Act 1925 shall not apply to this Debenture, but the statutory
power of sale (as varied or extended by this Debenture) shall (as between
the Agent and a purchaser from the Agent) arise on, and be exercisable at
any time after, the execution of this Debenture. However, the Agent shall
not exercise such power of sale until the Agent takes action in accordance
with Clause 9 of the Loan Agreement and/or a demand has been made in
accordance with Clause 2 of this Debenture, or a Receiver has been
appointed, but this provision shall not affect a purchaser or require him
to ask whether a demand or appointment has been made.
12.2 Power of the Agent to grant Leases: The statutory powers of sale, leasing
and accepting surrenders under the Law of Property Xxx 0000 exercisable by
the Agent by virtue of this Debenture are extended so as to authorise the
Agent (whether in its own name or that of the Charging Company) to accept
any surrenders of any lease or vary the terms of any lease as the Agent
may see fit or to grant a lease or leases of any Land vested in the
Charging Company or in which it has an interest, with such rights relating
to other such Land, and containing such covenants on the part of the
Charging
11
Company, and generally on such terms and conditions, as the Agent shall
think fit.
12.3 The Agent may sever fixtures: The statutory power of sale exercisable by
the Agent is extended so as to authorise the Agent to sever any fixtures
from Land and sell them separately.
12.4 Third Parties not to be concerned with validity of demand: No person
dealing in good faith and for value with the Agent or any Receiver, its
agents or brokers, shall be concerned to enquire whether this Debenture
has become enforceable, or whether any power exercised or purported to be
exercised has become exercisable, or whether any Secured Sums remain due
upon this Debenture, or as to the necessity or expediency of any
stipulations and conditions subject to which the sale of any Assets shall
be made, or otherwise as to the propriety or regularity of the sale of any
Asset, or to see to the application of any money paid to the Agent or such
Receiver, or its agents or brokers, and each such dealing shall be deemed
to be within the powers hereby conferred and to be valid and effectual
accordingly.
13. OPENING OF NEW ACCOUNTS
13.1 Ruling off of Accounts: On receiving notice that the Charging Company has
encumbered or disposed of any of its Assets (other than as permitted under
the Loan Agreement), the Agent may rule off the Charging Company's account
or accounts and open a new account or accounts with the Charging Company.
13.2 Credits not to reduce Indebtedness of Charging Company: If the Agent does
not open a new account or accounts immediately on receipt of such notice,
it shall nevertheless be treated as if it had done so at the time when it
received such notice and as from that time all payments made by the
Charging Company to the Agent shall be treated as having been credited to
such new account or accounts and shall not operate to reduce the amount
owing from the Charging Company to the Agent at the time when it received
such notice.
14. APPOINTMENT AND POWERS OF A RECEIVER
14.1 Appointment of Receiver: At any time:
14.1.1 after failure by the Charging Company to pay any Secured Sum due
from it under Clause 2.2 on the due date for payment; or
14.1.2 following the occurrence and during the continuance of an Event
of Default; or
14.1.3 if at any time the Agent shall be of the reasonable opinion that
any material part of the Charged Property of the Charging
Company is in imminent danger of seizure, distress or other
legal process;
the Agent may appoint by writing any person or persons to be a receiver
and manager or receivers and managers of the Charged Property of the
Charging Company and, in the case of Clause 14.1.3, such appointment shall
only be in relation to the part of the Charged Property which the Agent
believes to be in such danger.
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14.2 Powers of Receivers (Joint and Several or Several): Where more than one
Receiver is appointed, they shall have power to act separately unless the
Agent shall in the appointment specify to the contrary.
14.3 Remuneration of Receivers: The Agent may from time to time determine the
remuneration of the Receiver.
14.4 Power of the Agent to Remove Receiver: The Agent may remove the Receiver
from all or any of the Charged Property of which he is the Receiver.
14.5 Further Appointment: Such an appointment shall not preclude:
14.5.1 the Agent from making any subsequent appointment of a Receiver
over all or any of the Charged Property over which a Receiver
has not previously been appointed by the Agent or has been
removed or otherwise ceased to act; or
14.5.2 a Receiver, while continuing to act, consenting to the
appointment of an additional Receiver to act with him.
14.6 Status of Receiver: The Receiver of the Charging Company shall be the
agent of the Charging Company (which shall be solely liable for his acts,
defaults and remuneration) unless and until the Charging Company goes into
liquidation (or its equivalent under any applicable law), after which he
shall act as principal and shall not become the agent of the Agent or the
Lenders, in each case, with respect to the Charged Property.
14.7 Powers of Receiver: The Receiver of the Charging Company shall have and be
entitled to exercise in relation to the Charging Company all the powers
set out in the Law of Property Xxx 0000 and the Insolvency Xxx 0000 and in
addition the Receiver shall have authority on behalf of the Charging
Company:
14.7.1 to take possession of, collect and get in all or any part of the
Charged Property and to take and defend any proceedings
(including proceedings for its winding up or proceedings by way
of arbitration) in its name or otherwise as he shall think fit;
14.7.2 to comply with and perform all or any of the acts, matters,
omissions or things covenanted to be done or omitted by the
Charging Company under this Debenture;
14.7.3 to sell by public auction or private contract or let all or any
part of the Charged Property and to let on hire lease, surrender
and accept surrenders of leases and tenancies, grant rights,
licences, options or easements or exchange all or any part of,
and otherwise deal with or dispose of and exercise all rights,
powers and discretions incidental to the ownership of, any of
the Charged Property in the name of and on behalf of the
Charging Company or otherwise concur in doing any of the
foregoing in such manner and generally on such terms and
conditions and for such consideration (whether in cash,
debentures or other obligations, shares, stocks, securities
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or other valuable consideration and whether payable by a lump
sum or by instalments) as he may think fit and carry out any
such sale by conveying by deed or transferring in the name and
on behalf of the Charging Company or otherwise, and so that
plant machinery and other fixtures and fittings may be severed
and sold separately from the premises containing them, and the
Receiver may apportion any rent and the performance of any
obligations;
14.7.4 to repair, decorate, furnish, maintain, alter, improve, renew or
add to the Charged Property or any part of it as he shall think
fit and effect, maintain, renew or increase indemnity insurance
and other insurances and obtain bonds;
14.7.5 to appoint or dismiss managers, agents, officers, employees,
servants, builders or workmen and employ professional advisers
and others at such salaries or for such remuneration as he may
think fit;
14.7.6 to perform, repudiate, rescind, vary or enter into any
arrangement or compromise any contracts or agreements with
respect to the Charged Property which he may consider expedient;
14.7.7 to settle, arrange, compromise and submit to arbitration any
accounts, claims, questions or disputes whatsoever which may
arise in connection with the Charged Property or in any way
relating to the security constituted by this Debenture and
bring, prosecute, defend, enforce, compromise, submit to and
discontinue any actions, suits, arbitrations or proceedings
whatsoever whether civil or criminal;
14.7.8 to use the name of the Charging Company in the exercise of all
or any of the power and authority conferred by this Debenture;
14.7.9 to exercise or permit the Charging Company or any nominee of the
Charging Company to exercise any powers or rights incidental to
the ownership of the Charged Property or any part of it in such
manner as he may think fit;
14.7.10 to give valid receipts for all moneys and execute all
discharges, assurances and things which may be proper or
desirable for realising the Charged Property or any part of
them;
14.7.11 to sell or concur in selling (where necessary with the leave of
the Court), lease or concur in leasing, licence or concur in
licensing, grant options over and, without the need to observe
any of the provisions of Sections 99 and 100 of the Law of
Property Xxx 0000, let or concur in letting and to terminate or
to accept surrenders of leases, licences or tenancies of all or
any of the Assets of the Charging Company in such manner and
generally on such terms and conditions as he shall think fit in
his absolute and unfettered discretion and any such sale or
disposition may be for cash, debentures, securities or other
valuable consideration (in each case payable in a lump sum or by
instalments) and to carry any such transactions into
14
effect in the name of and on behalf of the Charging Company;
14.7.12 to promote the formation of a Subsidiary or Subsidiaries of the
Charging Company with a view to such Subsidiary or Subsidiaries
purchasing, leasing, licensing or otherwise acquiring interests
in all or any of the Assets of the Charging Company;
14.7.13 to arrange for such Subsidiary or Subsidiaries to trade or cease
to trade in connection with the Charged Property as the Receiver
may think fit from time to time;
14.7.14 to sever any fixtures from the Land of which they form part;
14.7.15 to arrange for the purchase, lease, licence or acquisition of
all or any Charged Property by any such Subsidiary on a basis
whereby the consideration may be for cash, shares, debentures,
loan stock, convertible loan stock or other securities, shares
of profits or sums calculated by reference to profits or
turnover or royalties or licence fees or otherwise, whether or
not secured on the assets of such Subsidiary and whether or not
such consideration is payable or receivable in a lump sum or by
instalments over such period as the Receiver may think fit;
14.7.16 to make any arrangement or compromise with the Agent and/or the
Lenders in connection with the Charged Property as he shall
think fit;
14.7.17 to make and effect all repairs, renewals and improvements to the
Charged Property and to effect, renew or increase insurances
related thereto on such terms and against such risks as he shall
think fit;
14.7.18 to appoint managers, officers and agents for the above purposes
at such salaries as the Receiver may determine;
14.7.19 to pay the proper administrative charges of the Agent and/or
Lenders in respect of time spent by their agents and employees
in dealing with matters raised by the Receiver or relating to
the receivership of the Charging Company in connection with the
Charged Property;
14.7.20 to commence and/or complete any building operations upon any
freehold or leasehold Land of the Charging Company and to apply
for and obtain any planning permissions, building regulation
consents or licences in each case as he may in his absolute
discretion think fit;
14.7.21 to vary the terms of the leases of any such freehold and
leasehold Land;
14.7.22 to take all steps necessary to effect all registrations,
renewals, applications and notifications as the Receiver will in
his discretion think prudent to maintain in force or protect any
of the Charging Company's intellectual property rights with
respect to the Charged Property; and
14.7.23 to do all such other acts and things as may be considered by the
Receiver to be incidental or conducive to any of the above
matters or powers or
15
otherwise incidental or conducive to the preservation,
improvement or realisation of the relevant Assets.
14.8 Third Parties: Neither the Agent nor the Receiver shall be liable to
account as mortgagee in possession or otherwise for any money not actually
received by it or him respectively.
14.9 The Charging Company irrevocably appoints the Receiver as agent of the
Charging Company (which shall be solely liable for his acts, defaults and
remuneration) for the purpose of exercising the authorities set out in
Clause 14.7. Without the express consent of the Receiver or Agent, the
Charging Company hereby covenants not to take any action falling within
the powers of the Receiver listed in Clause 14.7 at a time when a Receiver
has been appointed. The Receiver will exercise the power and authority
given to him in Clause 14.7 solely for the purpose and to the extent that
he reasonably considers necessary or desirable for enforcement against
and/or maximising the value of the Charged Property for the purposes of
realisation of and/or enforcement against the Charged Property. The Agent
and/or the Receiver will give their consent to the exercise by the
Charging Company of the authorities listed in Clause 14.7 except to the
extent that either of them reasonably believe that such exercise by the
Charging Company may materially prejudice the enforcement against, or the
value of, the Charged Property.
15. POWER OF ATTORNEY
15.1 Power of Attorney: The Charging Company by way of security hereby
irrevocably appoints the Agent (whether or not a Receiver has been
appointed) and any Receiver separately the attorney of the Charging
Company (with full power to appoint substitutes and to delegate) for the
Charging Company, in its name and on its behalf, and as its act and deed
or otherwise, at any time during the continuance of an Event of Default
to:
15.1.1 execute and deliver and otherwise perfect any agreement,
assurance, deed, instrument or document; or
15.1.2 perform any act;
which may be required of the Charging Company under this Debenture, or may
be deemed by such attorney necessary or desirable (in circumstances where
a Receiver has not been appointed, where the Charging Company has failed
promptly so to execute, deliver, perfect or perform upon request, but
where a Receiver has been appointed, without any requirement first to make
such a request) to enhance or perfect the security intended to be
constituted by it or to convey or transfer legal ownership of any Assets
or in exercise of all or any powers, authorities and discretions conferred
by or pursuant to this Debenture or by the Law of Property Xxx 0000 on the
Lender or any Receiver.
15.2 Ratification: Without prejudice to the generality of the provisions
contained in Clause 15.1 (Power of Attorney), the Charging Company hereby
covenants with the Agent and separately with any Receiver that if required
so to do the Charging Company will ratify and confirm:
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15.2.1 all transactions entered into by it or (as the case may be) them
at its or (as the case may be) their instance in the proper
exercise of its or (as the case may be) their powers in
accordance with this Debenture; and
15.2.2 all transactions entered into by it or (as the case may be) them
in signing, scaling, delivering and otherwise perfecting any
assignment, mortgage, charge, security, deed, assurance,
document or act as aforesaid;
and the Charging Company irrevocably acknowledges and agrees that such
power of attorney is (inter alia) given to the Agent, or, as the case may
be, the Receiver, or both, to secure the performance of the obligations
owed to him or them by the Charging Company.
16. OTHER POWERS EXERCISABLE BY THE AGENT
16.1 The Agent may exercise Receiver's Powers: All authority of the Receiver
conferred by this Debenture may be exercised by the Agent at any time
after the occurrence of any event listed in Clause 14.1 whether as
attorney of the Charging Company or otherwise and whether or not the
Receiver shall have been appointed and so that Clause 14.7.22 (Powers of
Receiver) shall be read and construed as if the words "be charged on the
Assets of the Charging Company" were substituted for the words "be deemed
an expense properly incurred by the Receiver".
16.2 The Agent empowered to receive Book Debts: The Agent or any manager or
officer of the Agent is hereby irrevocably empowered:
16.2.1 to receive all book debts and other debts and claims which may
be charged under Clause 3.1 or assigned to the Agent pursuant to
Clause 7 (Further Assurance) in the Collection Account and, at
any time after the occurrence of any event listed in Clause 14.1
in any manner the Agent and/or Receiver deem appropriate; and
16.2.2 on payment to give an effectual discharge for them and on
non-payment (whilst an Event of Default is continuing, at its
discretion or otherwise in accordance with the instructions of
the Charging Company) to take and institute (if the Agent in its
sole discretion so decides) all steps and proceedings either in
the name of the relevant assignor or in the name of the Agent
for their recovery and also to agree accounts and to make
allowances and to give time to any surety. The relevant assignor
hereby undertakes to ratify and confirm whatever the Agent or
any manager or officer of the Agent shall do or purport to do
under this Clause 16.
16.3 Exclusion of the Agent's Liability: None of the Agent, nor any of its
agents, managers or officers, shall have any liability or responsibility
to the Charging Company arising out of the exercise or non-exercise of the
rights conferred on it by this Clause 16 except for the Agent's gross
negligence and wilful default.
16.4 The Agent not Obliged to take action relating to Book Debts: The Agent
shall not be obliged to make any enquiry as to the sufficiency of any sums
received by it in respect of any book debts or other debt or claim so
assigned to it or to make any claim
17
or take any other action to collect in or enforce them.
17. APPLICATION OF MONEY RECEIVED BY THE AGENT OR A RECEIVER
17.1 Application of Recoveries: Any money received under the powers conferred
by this Debenture shall, subject to the discharge of any prior-ranking
claims, but without prejudice to the rights of the Lender to recover any
shortfall from a Charging Company, be paid or applied in the following
order of priority:
17.1.1 in satisfaction of all costs, charges and expenses incurred, and
payments made, by the Agent and/or the Receiver, and of the
remuneration of the Receiver;
17.1.2 in or towards satisfaction of the Secured Sums in the manner
applicable under the Loan Agreement; and
17.1.3 as to the surplus (if any), to the person or persons entitled to
it.
17.2 Suspense Account: The Agent may, in its absolute discretion on or at any
time or times after demand and pending the payment to the Agent of the
whole of the Secured Sums, place and keep to the credit of a separate or
suspense account bearing interest at a commercial rate any money received,
recovered or realised by the Agent by virtue of this Debenture for so long
and in such manner as the Agent may reasonably consider necessary to
enable it to claim the full amount in respect of which that money is paid
in any relevant insolvency without any intermediate obligation to apply it
in or towards the discharge of any Secured Sum.
18. COSTS AND INTEREST ON OVERDUE AMOUNTS
18.1 Indemnity: All costs, charges and liabilities (including all professional
fees and disbursements and value added tax and/or any similar tax) and all
other sums paid or incurred by the Agent and/or any Receiver under or in
connection with this Debenture or the Charging Company's affairs shall be
recoverable (on a full indemnity basis) as a debt payable on demand from
the Charging Company, may be debited without notice to any account of the
Charging Company, shall bear interest in accordance with Clause 18.3 and
shall be charged on the Assets of the Charging Company. The Charging
Company shall indemnify the Agent against all and any costs, charges and
expenses arising:
18.1.1 out of any of the property charged or purported to be charged
pursuant to Clause 3 (Charging Clause) or Clause 7 (Further
Assurance) referable to it infringing or allegedly infringing
any third party rights; and
18.1.2 in relation to any proceedings referable to the Charging Company
brought against the Agent or to which the Agent may be joined
whether as plaintiff or defendant which relate to any of such
Charged Property.
18.2 Types of Costs Recoverable: Without prejudice to the generality of Clause
18.1 (Indemnity), the costs recoverable by the Agent and/or any Receiver
under this Debenture shall to the extent the same are recoverable under
the Loan Agreement include:
18
18.2.1 all costs properly incurred by the Agent in preparing and
administering this Debenture or perfecting the security created
by it;
18.2.2 all costs (whether or not allowable on a taxation by the court)
of all proceedings for the enforcement of this Debenture or for
the recovery or attempted recovery of the Secured Sums;
18.2.3 all money properly expended and all costs arising out of the
exercise of any power, right or discretion conferred by this
Debenture; and
18.2.4 all costs and losses arising from any default by the Charging
Company in the payment when due of any Secured Sums or the
performance of its obligations under this Debenture.
18.3 Overdue Amounts: Any overdue amounts secured by this Debenture shall carry
interest at the rate and in accordance with the terms contained in the
Loan Agreement in relation to overdue sums or such other rate as may be
agreed between the Charging Company and the Agent. In each case, such
interest shall accrue on a day to day basis to the date of repayment in
full and, if unpaid, shall be compounded on the terms so agreed (or in the
absence of such agreed terms) with monthly rests on the Agent's usual
monthly interest days. Interest shall continue to be charged and
compounded on this basis after, as well as before, any demand or judgment.
18.4 Currency Indemnity: Moneys received or held by the Agent pursuant to this
Debenture may from time to time after demand has been made be converted
into such currency as the Agent considers necessary or desirable to
discharge the Secured Sums in that currency at such rate of exchange as
may be applicable under the Loan Agreement or, if none, the then
prevailing spot rate of exchange of Xxxxx Fargo Bank, N.A or any successor
thereto (as conclusively determined by the Agent) for purchasing the
currency to be acquired with the existing currency.
19. SET-OFF
19.1 The Agent may apply any money standing to the credit of the Charging
Company with the Agent in any currency upon any account or otherwise (in
any country and whether or not in the Charging Company's name) as cover
for any Secured Sums at any time after an Event of Default has occurred
and is continuing without notice to the Charging Company and may set-off,
combine or consolidate all or any of such money with all or such part of
the Secured Sums as the Agent may select (whether presently payable or
not) and the Agent may purchase with any such money any other currency
required to effect such combination.
19.2 The Charging Company irrevocably authorises the Agent in its name and at
its expense to perform such acts and sign such documents as may be
required to give effect to any set-off or transfer pursuant to Clause
19.1, including the purchase with the money standing to the credit of any
such account of such other currencies as may be necessary to effect such
set-off or transfer.
19.3 The foregoing provisions of this clause shall be in addition to and
without prejudice to such rights of set-off, combination, consolidation,
lien and other rights whatsoever
19
conferred on the Agent by law.
20. TRANSFER
The Agent and the Lenders may at any time transfer all or any part of its
rights in relation to this Debenture and the Secured Sums to any person or
otherwise grant an interest in them to any person to which it is entitled
to make such a transfer under the Loan Agreement.
21. DISCLOSURE
Except as otherwise provided in this Debenture, Agent and Lenders shall
not disclose any Confidential Information without the consent of the
Charging Company concerning the Charging Company, this Debenture and the
Secured Sums other than:
21.1 to any Affiliate of the Agent or the Lenders and their officers,
directors, employees, agents and advisors; and
21.2 to any actual or prospective transferee or grantee referred to in Clause
20 (Transfer) on a confidential basis.
The above authority is without prejudice to any obligation of the Agent
and the Lenders to make disclosure imposed by law, rule or regulation or
required by any authority or regulator.
If Agent or a Lender is required by any law, rule, or regulation or
judicial process to disclose any Confidential Information, to the extent
permitted by applicable law, it shall promptly give notice to Charging
Company so that Charging Company may seek a protective order or other
appropriate remedy. If Charging Company does not obtain such a protective
order or other remedy, to the extent permitted by applicable law, Agent or
the Lender, as applicable, will endeavour to furnish only that portion of
the Confidential Information that it reasonably believes to be legally
required.
22. PERPETUITY PERIODS
The perpetuity period applicable to the trusts hereby constituted shall be
80 years.
23. FORBEARANCE AND SEVERABILITY
23.1 No Waivers: All rights, powers and privileges under this Debenture shall
continue in full force and effect, regardless of the Agent exercising,
delaying in exercising or omitting to exercise any of them.
23.2 Invalidity and Severability:
23.2.1 None of the covenants and guarantees given and none of the
charges created by the Charging Company under this Debenture
shall be avoided or invalidated by reason only of one other or
more of such covenants, guarantees or charges being invalid or
unenforceable.
23.2.2 Any provision of this Debenture which for any reason is or
becomes illegal,
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invalid or unenforceable shall be ineffective only to the extent
of such illegality, invalidity and unenforceability, without
invalidating the remaining provisions of this Debenture.
24. VARIATIONS AND CONSENTS
24.1 Variations in Writing: No variation of this Debenture shall be considered
valid and as constituting part of this Debenture, unless such variation
shall have been made in writing and signed by the Agent and the Charging
Company.
24.2 Variation: The expression "variation" shall include any variation,
supplement, extension, deletion or replacement however effected.
24.3 Conditional Consents: Save as otherwise expressly specified in this
Debenture or the Loan Agreement, any consent of the Agent may be given
absolutely or on any terms and subject to any conditions as the Agent may
determine in its entire discretion.
25. SERVICE OF DEMANDS AND NOTICES
25.1 Notices to Companies: A demand for payment or any other communication to
be given to the Charging Company under this Debenture may be made or given
by any manager or officer of the Agent and must be in writing addressed to
the Charging Company and served on it at the address for service of the
Charging Company stated in the First Schedule or to the address last
notified to the Agent by the Charging Company or its existing or last
known place of business (or, if more than one, any one of such places), or
by facsimile transmission to the facsimile number stated in the First
Schedule or to the facsimile number last notified to the Agent by the
Charging Company or by any other form of electronic communication which
may be available.
25.2 Notices to Agent: Any communication to be given to the Agent under this
Debenture must be given to the Agent in writing served on it at 0000
Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxx Xxxxxx, Xxxxxxxxxx, 00000 (marked for
the attention of the Business Finance Division Manager), or by facsimile
to facsimile number 000 000 0000, with copies to Xxxxxxx Xxxxxxx Xxxxxxxx
LLP, 000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx, 00000,
marked for the attention of Xxxx Xxxxxxx Hilson, facsimile number 213 745
3700, or the address last notified to the Charging Company by the Agent in
writing.
25.3 Deemed Service: A notice or demand shall be deemed to be duly served on
the Charging Company:
25.3.1 if delivered by hand, at the time of actual delivery;
25.3.2 if transmitted by facsimile, at the time the facsimile
transmission report (or other appropriate evidence) confirming
that the facsimile has been transmitted to the addressee is
received by the sender; and/or
25.3.3 if sent by first class prepaid post, at noon on the third
Business Day following the day of posting and shall be effective
even if it is misdelivered or returned undelivered;
21
provided that, where delivery or transmission occurs after 6.00 p.m. in
the place of delivery on a Business Day or on a day which is not a
Business Day, service shall be deemed to occur at 9.00 am in the place of
delivery on the next Business Day.
In proving such service it shall be sufficient to prove that personal
delivery was made or that the envelope containing the communication was
correctly addressed and posted or that a facsimile transmission report (or
other appropriate evidence) was obtained that the facsimile had been
transmitted to the addressee.
25.4 Service on Agent: Any communication to the Agent shall be deemed to have
been given only on actual receipt by it.
26. COUNTERPARTS
This Debenture may be executed by the parties in any number of copies, all
of which taken together shall constitute a single Debenture.
27. ADJUSTMENT OF ACCOUNT
If the state of account between the Lenders and the Charging Company by
reference to which any Secured Sums are calculated for the purposes of
this Debenture requires adjustment at any time because of any claim made
against the Lenders by an officeholder (within the meaning of Section 234
of the Insolvency Act 1986) then, notwithstanding any other provision of
this Debenture:
27.1 the Charging Company's liability to the Lenders will be correspondingly
adjusted; and
27.2 the Agent may treat any release or settlement made by it with the Charging
Company before any such adjustment is required as being of no effect; and
27.3 the Agent may recover from the Charging Company such sum as will place the
Lenders in the same position as if such release or settlement had not been
made.
If any claim is made against the Agent or any Lender under any insolvency
law with reference to this Debenture, the Agent or the Lender may agree
the claim or settle it on any terms it chooses without asking for the
Charging Company's agreement. If the Agent or the Lender does agree or
settle such claim, the Charging Company will be liable under this
Debenture as if a court order had been made containing the terms which the
Agent or the Lender agreed or settled. The Charging Company will be
responsible for all costs and expenses which the Agent or the Lenders
properly incur in defending such a claim.
28. PROVISO FOR REDEMPTION AND RELEASES
(Subject to the provisions of the Second Schedule), following payment and
discharge in full of the Secured Sums to be paid or discharged by the
Charging Company under the Loan Agreement, the Palm Global Loan Agreement
and this Debenture or if the Charging Company wishes to dispose of an
Asset charged by way of fixed charge under this Debenture where such
disposal is permitted under this Debenture the Agent will, at the request
and cost of the Charging Company, execute a release and reassignment of
all or the relevant part of the security given by the Charging
22
Company comprised in this Debenture in such form as the Charging Company
may reasonably require.
29. SECURITY TRUSTEESHIP
The Agent shall hold the guarantees and security created by this Debenture
and any other document creating guarantees or security given by the
Charging Company in trust for the benefit of itself and the Lenders on the
terms and subject to the conditions set out in this Debenture or such
other security document (each a "Relevant Document") and the Loan
Agreement. The Agent shall not have (or be deemed to have) any obligations
to, or trust or fiduciary relationship with, any person other than those
for which specific provision is made in any Relevant Document or the Loan
Agreement. The Agent, in carrying out its functions as agent and security
trustee under any Relevant Documents shall not be agent or trustee for any
party other than the Lenders; and shall, for the avoidance of doubt, have
all the rights, privileges, immunities and indemnities accorded to the
Agent under the Loan Agreement and which are accorded to a gratuitous
trustee under English law.
30. THIRD PARTIES
Third parties shall for the avoidance of doubt be entitled to the benefit
of Clauses 12.4 and (with respect to the agents, managers and officers of
the Agent) 16.3 of this Debenture in accordance with the Contracts (Rights
of Third Parties) Xxx 0000. The Debenture may for the avoidance of doubt
be amended without the consent of any party other than the Charging
Company and the Agent.
31. GOVERNING LAW AND SUBMISSION TO JURISDICTION
31.1 Governing Law: This Debenture shall be governed by and construed in all
respects in accordance with English law.
31.2 Submission to Jurisdiction:
31.2.1 The Charging Company irrevocably submits for the benefit of the
Agent to the non-exclusive jurisdiction of the courts of England
for the purpose of hearing and determining any dispute arising
out of this Debenture.
31.2.2 For the purpose of enforcement of any judgement against its
assets, without prejudice to any other permitted mode of
service, the Charging Company agrees that service of any writ,
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 Charging Company at the address for
notices specified in Clause 25 (Service of Demands and Notices)
or such other address in England or Wales as the Charging
Company may notify from time to time to the Agent.
31.2.3 The Charging Company irrevocably agrees not to claim that any
such court is not a convenient or appropriate forum and agrees
that a judgment in proceedings brought in such courts shall be
conclusive and binding upon them and may be enforced in any
other jurisdiction.
23
31.3 Freedom of Choice: The submission to the jurisdiction of the courts
referred to in Clause 31.2 (Submission to Jurisdiction) shall not (and
shall not be construed so as to) limit the right of the Agent to take
proceedings against the Charging Company in the courts of any country in
which the Charging Company has assets or in any other court of competent
jurisdiction nor shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other jurisdiction
(whether concurrently or not) if and to the extent permitted by applicable
law.
THIS GUARANTEE AND DEBENTURE has been executed by the Charging Company as a Deed
and signed by the Agent on behalf of itself and the other Lenders but shall only
be treated as having been executed and delivered to take effect on the day and
year first above written.
24
Chargors
EXECUTED and DELIVERED as a )
Deed by PALM EUROPE LIMITED )
(pursuant to a resolution of its Board )
of Directors) acting by: )
Director /s/ Xxxx Xxxxxx
Director/Secretary /s/ Xxxxxxx Xx
Agent
SIGNED by )
for and on behalf of ) /s/ Xxxx Xxxxxx
FOOTHILL CAPITAL CORPORATION ) Vice President
25
THE FIRST SCHEDULE
The Charging Company
=============================================================================
Name of Charging Company Registered Address for Service and Fax
Number or Telex Number
-----------------------------------------------------------------------------
Palm Europe Limited 03903962 000 Xxxxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxxxx,
XX00 0XX
Fax number: (00) 000 000 0000
For the attention of the
Legal Department
With a copy to:
Palm Inc.
0000 Xxxxx Xxxxxxx Xxxxxxx
XX00000
Xxxxx Xxxxx XX00000
Fax number: 000 000 000 0000
For the attention of the
General Counsel
=============================================================================
26
THE SECOND SCHEDULE
Terms of Guarantee
1. This Guarantee will continue in full force irrespective of whatever
dealings may occur between the Agent, the Lenders, the Charging Company
and Palm Global including, without limitation, by way of the granting of
additional time for the performance of any obligation or the variation of
any obligation.
2. If this Guarantee ceases for any reason to be binding on the Charging
Company as a continuing security in relation to Palm Global, then the
Agent may break such accounts of the Charging Company and Palm Global with
the Agent as the Agent deems appropriate and open new accounts for the
account holders affected.
If that is done, no money credited to such new account at that time or
later will have the effect of reducing the amount due to the Agent on the
original account. If that is not done, the Agent will still be treated as
if it had broken all such accounts at the time when such notice expired or
this Guarantee ceased to be a continuing security and as if all payments
made to the Agent then or later had been credited to a new account with
the same result.
3. This Guarantee is to be in addition to and is not to prejudice or be
prejudiced by any other guarantee or security (including any other
guarantee signed by the Charging Company) which the Agent may hold from or
on account of Palm Global either now or in the future. This Guarantee may
be enforced without the Agent first taking any steps or proceedings
against Palm Global or having recourse to any such other guarantee or
security.
4. The Charging Company shall not have the right to:
(a) make any claim (whether by way of proof in liquidation or otherwise)
against Palm Global or any property of Palm Global or claim or prove
in competition with the Agent in the liquidation of Palm Global; or
(b) participate in any security held or money received by the Agent on
account of the Secured Sums; or
(c) stand in the place of the Agent in respect of any such security or
money,
until in each case all Secured Sums have been repaid to the Agent in full.
Notwithstanding the foregoing the Charging Company shall have the right,
until the occurrence of an Enforcement Event, to make a claim with respect
to, participate in, or stand in place of the Agent in respect of any
Receivables owing to the Charging Company by any other Group Company which
are subject to the floating charge referred to in Clause 3.8 of this
Debenture.
27
However, if so directed by the Agent but not otherwise, the Charging
Company shall prove in Palm Global's liquidation for the whole or any part
of the money due or owing to the Charging Company from Palm Global in any
manner whatever and the benefit of such proof and of all money received by
the Charging Company in respect of it shall be held on trust for the Agent
and applied in reduction of the Secured Sums.
Notwithstanding paragraphs 4(a), (b) and (c) above, if the Charging
Company holds or receives any security, monies or property, it shall hold
such security, monies or property on trust for the Lenders and it shall
forthwith pay or transfer the benefit of the security, monies or property
to the Agent.
5. The Agent may at any time (without affecting its rights against the
Charging Company under this Guarantee) grant, extend, increase, renew,
vary, waive the terms of, determine or refuse any credit or facility to
Palm Global, or take, hold, exchange, vary, release, abstain from
perfecting or enforcing any guarantee or security for the Secured Sums, or
compromise with or extend time or grant waivers, releases or any
indulgence to Palm Global or any co-surety, or make any arrangement,
concession or settlement with any of them or do or omit or neglect to do
anything whatever which, but for this provision, might exonerate or
discharge the Charging Company's obligations under this Guarantee (except
for a specific written release given by the Agent of such obligations).
6. After this Guarantee becomes enforceable, no payment received by the Agent
from any source in respect of the Secured Sums will be treated (regardless
of the manner in which the Agent may deal with it in its books or
otherwise) as reducing the Charging Company's liability to the Agent under
this Guarantee, so that until the Agent has received payment in full of
all Secured Sums, it will be deemed, as between the Agent and the Charging
Company and except for any payment by Palm Global, to remain wholly
unsatisfied, so that the Agent may prove in Palm Global's and the Charging
Company's liquidation for the full amount outstanding.
7. The Agent may keep the guarantee held by it for the Charging Company's
liability under this Guarantee in order to protect the Agent against any
possible claim under insolvency law for any relevant period after all
Secured Sums has been satisfied which the Agent reasonably considers to be
necessary to avoid any risk under applicable insolvency law. If a claim is
made against the Agent within that period, the Agent may keep the
guarantee until that claim has finally been dealt with.
8. The winding-up or dissolution of Palm Global will not affect the Charging
Company's liability under this Guarantee and any sum payable to the Agent
at the date of the commencement of such winding-up or immediately prior to
such dissolution (as the case may be) will be treated as continuing to be
payable until actually paid in full.
9. If any question arises as to the capacity of Palm Global in relation to
any dealing between Palm Global and the Agent or as to the capacity,
authority or power of any officer, employee or agent of Palm Global to
bind it to any transaction with the Agent, that question shall, as between
the Agent and the Charging Company, be disregarded and the Charging
Company will for the purposes of this Guarantee be and continue to
28
be liable to the Agent in respect of any such dealing, transaction and/or
Secured Sums as if the Charging Company were a principal debtor.
10. Any money received by the Agent under or by virtue of this Guarantee may
be converted by the Agent at any time as it thinks fit (and
notwithstanding any previous conversion) into any currency in which any
part of the Secured Sums is due or owing to the Agent, in which event the
net amount available to the Agent in such other currency (after allowing
for all costs of conversion) shall be deemed to be the amount received by
the Agent under or by virtue of this Guarantee.
11. Any admission or acknowledgement in writing by Palm Global or on its
behalf of the amount of any Secured Sums or otherwise in relation to this
Guarantee, or any judgment or award obtained by the Agent against Palm
Global, or any proof by the Agent in winding up which is admitted, or any
statement of account furnished by the Agent the correctness of which is
certified by any one of its presidents, vice presidents, officers or
managers, will be binding and conclusive on the Charging Company (except
in the case of manifest error).
12. Notwithstanding any other provision of this Guarantee, this Guarantee
shall not operate to guarantee any money or liability if and insofar as
such money was borrowed or such liability was incurred directly or
indirectly for the purpose of the acquisition by any person of shares in
the Charging Company or its holding company or the reduction or discharge
of any existing liability incurred for the purpose of such acquisition and
if and for so long as it would not be lawful under Chapter VI, Part V, of
the Companies Xxx 0000 for such money or liability to be guaranteed by
this Guarantee.
13. Other than with the prior written consent of the Agent, the Charging
Company shall not terminate its guarantee contained in this Debenture
whilst any part of the Secured Sums guaranteed by the Charging Company
remains outstanding.
29
THE THIRD SCHEDULE
Collection Account Side Letters
[*FORM OF NOTICE TO BE SERVED BY THE CHARGING COMPANY TO BANK
HOLDING THE COLLECTION ACCOUNT TOGETHER WITH THE FORM OF
ACKNOWLEDGEMENT REQUIRED FROM THAT BANK*]
To: Bank of America, N.A.
0 Xxxx Xxxxxx
Xxxxxx
X0 0XX
Xxxxxxx
For the attention of Xxxxx Xxxxxx
30 November 2001
We, Palm Europe Limited, refer to the guarantee and debenture (the "Debenture")
dated on or around the date of this notice and made between ourselves and
Foothill Capital Corporation (as the Agent).
1. We each hereby give you notice that pursuant to the Debenture we, with
full title guarantee, have charged by way of first fixed charge to the
Agent all our rights, title and interest in and to all sums which may at
any time be standing to the credit of the accounts listed in the table
below, which were opened by us in your books (the "Collection Accounts"
and each one of them a "Collection Account").
======================================================================
Company/Account Description Collection Bank Branch
Account Number
----------------------------------------------------------------------
Palm Europe Limited Euro Account [*] London
----------------------------------------------------------------------
Palm Europe Limited US Dollar Account [*] London
----------------------------------------------------------------------
Palm Europe Limited Sterling Account [*] London
----------------------------------------------------------------------
======================================================================
2. In connection therewith and by way of security for the Secured Sums (as
defined in the Debenture) we hereby irrevocably and unconditionally
instruct and authorise you (notwithstanding any previous instructions
whatsoever which we may have given you to the contrary):
(a) to disclose to the Agent without any reference to or further
authority from us and without any enquiry by you as to the
justification for such disclosure, such information relating to the
Collection Accounts, the amount from time to time standing to the
credit thereof and the debts represented thereby as the Agent may,
at any time and from time to time, request you to disclose to it;
and
30
(b) unless the Agent so authorises you, not to permit withdrawals from
the Collection Accounts and to hold all moneys from time to time
standing to the credit of the Collection Accounts to the order of
the Agent and pay all or any part of those moneys to the Agent (or
as it may direct) promptly following receipt of written instructions
from the Agent to that effect; and
(c) not to accept any future instructions with respect to the Collection
Accounts from Palm Europe Limited (including, but without
limitation, any instructions concerning the mandates or other
authorities relating thereto and in particular the Bank Authorities
attached to this letter provided to you by Palm Europe Limited in
respect of the Collection Accounts (such attached Bank Authorities,
the "Bank Authorities")) except with the express written consent of
the Agent in each case and to take instructions with respect to the
Collection Accounts only where such instructions include the
signature of one or more of the authorised signatories of the Agent
as such authorised signatories are specified as Category B
signatories in the Bank Authorities until the Agent instructs
otherwise.
3. In consideration of you agreeing to accept such instructions, Palm Europe
Limited hereby agrees to indemnify you against any losses, claims,
actions, proceedings, judgments, demands, damages, liabilities, costs and
expenses (including, without limitation, legal fees and allocated costs
for in-house legal services) which you may incur as a result of compliance
with these instructions in connection with any legal proceedings relating
to the Collection Accounts and/or which you may otherwise incur in
connection with this letter and/or any acceptance by you of such
instructions except insofar as such loss, damages, costs and liabilities
are caused as a direct result of your gross negligence or wilful default.
4. The arrangements and authorisations contained in this letter may not be
modified without the Agent's consent.
5. The Agent by countersigning this letter:
(a) instructs you, until your receipt of further notice from, or
purportedly from, it to the contrary (the "Notice") or,
subject to the provisions of paragraph 6.3 below, the expiry
of six months from the date of this letter, whichever is the
earlier, which Notice may be either delivered to you either by
hand, or by post to 00 Xxxxxxxx Xxxx, Xxxxxxx XX0 0XX, Xxxxxxx
Attn: Client Services or by fax, and if by fax to fax number
020 8313 2170 marked for the attention of Xxxxx Xxxxxx, and
you have a reasonable time, acting promptly, to act on such
Notice, to transfer once on each Business Day (as defined
below) amounts standing to the credit of the Collection
Accounts of Palm Europe Limited on that day to Palm Europe
Limited's current account (being on the date of this letter
(i) in the case of Euro Account Number [*], to Euro Account
Number [*]; (ii) in the case of US Dollar Account Number [*],
to US Dollar Account Number [*]; and (iii) in the case of
Sterling Account Number [*], to Sterling Account Number [*],
in each
31
case held with you in the name of Palm Europe Limited) or to
such other account as the Agent may notify you from time to
time;
(b) permits you to debit from the Collection Accounts outstanding
charges due to you by Palm Europe Limited or which you may
otherwise incur for the maintenance and operation of the
Collection Accounts or to exercise any other rights referred
to in the exceptions set out in paragraph (d) of the enclosed
letter of acknowledgement;
(c) acknowledges and agrees to the other provisions of this
letter.
In the event of a conflict between the provisions of the International Account
Agreement entered into or to be entered into between you and Palm Europe Limited
dated January 29, 0000 (xxx "XXX") and this letter, the provisions of this
letter shall prevail.
6.
6.1 Palm may request the Agent, by written notice (given in accordance with
the terms of the Debenture) given not more than 10 Business Days nor less
than 4 Business Days before the date of expiry of the instructions
referred to in paragraph 5(a) (as such instructions may be renewed from
time to time in accordance with paragraph 6.2 below) and with a copy to
you by fax to fax number 000 0000 0000 marked for the attention of Xxxxx
Xxxxxx, to renew such instructions for a further period.
6.2 The Agent may renew the instructions set out in paragraph 5(a) by notice
delivered to you by, or purportedly by, the Agent either by hand, or by
post to 00 Xxxxxxxx Xxxx, Xxxxxxx XX0 0XX, Xxxxxxx Attn: Client Services
or by fax, and if by fax to fax number 000 0000 0000 marked for the
attention of Xxxx Xxxxxx. Such renewal shall be at the absolute discretion
of the Agent and for such period as the Agent thinks fit. Such notice
referred to in this paragraph 6.3 will not be effective until you receive
such notice and have a reasonable time, acting promptly, to act on it.
6.3 Each of Palm Europe Limited and the Agent acknowledge and agree that you
shall not be obliged to cease making and you shall not be liable to Palm
Europe Limited or the Agent for any failure by you to cease making any
transfer referred to in paragraph 5(a) (as such instructions in such
paragraph 5(a) may be renewed from time to time in accordance with
paragraph 6.2 above) where you have not received a copy of the request
from Palm Europe Limited referred to in paragraph 6.1 above, or the Notice
from the Agent under paragraph 5(a) above. For the avoidance of doubt, for
the purposes of whether or not you have received a copy of such request
from Palm Europe Limited there shall be ignored whether such request was
in fact given by Palm Europe Limited to the Agent by written notice in
accordance with the terms of the Debenture.
7. The Agent acknowledges that your mandate with respect to the Collection
Account is governed by and in accordance with the IAA. Accordingly, any
instructions given to you by the Agent with respect to the Collection
Account (including, without limitation, the instructions in paragraph 5(a)
above or under paragraph 6.2 above) shall be given in accordance with and
subject to the terms of the IAA and you will
32
only be required to comply with the terms of such instructions to the
extent that you would have been required so to comply under the terms of
the IAA if such instruction had been given by Palm Europe Limited.
For the purposes of determining the extent that you are required to comply
with instructions given by the Agent as set out in the preceding paragraph
there shall be ignored the effect of any restriction on Palm Europe
Limited's ability to give instructions or other restrictions in relation
to the Collection Account contained in this letter, or other restriction
on the ability of Palm Europe Limited to give mandatory instructions
arising in connection with enforcement of the charges contained in the
Debenture, or any restriction contained in any document, agreement or
instruction to which the Bank is party of which the Agent has not been
notified prior to delivery of this letter.
8. This letter shall be governed by and construed in accordance with the laws
of England. Each of you, Palm Europe Limited and the Agent agrees that the
courts of England shall have jurisdiction to settle any disputes arising
out of or in connection with this letter and accordingly any proceeding,
suit or action arising out of or in connection with this letter
("Proceedings") may be brought in such courts and each of you, Palm Europe
Limited and the Agent hereby irrevocably submits to the jurisdiction of
such courts. Nothing in this paragraph shall limit any party's right to
take Proceedings in any other court of competent jurisdiction, nor shall
the taking of such Proceedings in one or more jurisdictions preclude the
taking of Proceedings in any other jurisdiction, whether concurrently or
not, to the extent permitted by the law of such other jurisdiction. The
Agent irrevocably agrees that any writ, summons, order, judgment or other
document relating to or in connection with any Proceedings may be served
on it in connection with Proceedings in England and Wales by service on
its agent Xxxxxxx Xxxx and Xxxx of Xxxxx Castle, 00 Xxxxx Xxxxxx, Xxxxxx
XX0X 0XX.
For the purposes of this letter a "Business Day shall mean a day (other
than a Saturday or Sunday) on which banks are open for general business in
London and (a) in relation to any date for payment or purchase of a
currency other than euro, the principal financial centre of the country of
that currency; or (b) in relation to any date for payment or purchase of
euro, which is also a day on which Trans-European Automated Real-time
Gross Settlement Express Transfer payment system is open for the
settlement of euro."
Please confirm your acknowledgement of the terms of this letter by signing
enclosed letter of acknowledgement and by returning the same to Xxxxxxx Xxxx and
Xxxx, Park Gate, 00 Xxxxxx Xxxx, Xxxxxx, XX00 0XX, and to Foothill Capital
Corporation at 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxx Xxxxxx, Xxxxxxxxxx, 00000
(marked for the attention of the Business Finance Division Manager), or by
facsimile to facsimile number 000 000 0000, with copies to Xxxxxxx Xxxxxxx
Xxxxxxxx LLP, 000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx, 00000,
marked for the attention of Xxxx Xxxxxxx Hilson, facsimile number 000 000 0000.
33
Signed by: Palm Europe Limited
acting by: /s/ Xxxx Xxxxxx
Signed by: Foothill Capital Corporation
acting by
34
To: Foothill Capital Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxx Xxxxxx
Xxxxxxxxxx 00000
For the attention of the Business Finance Division Manager
We, Bank of America, N.A. hereby acknowledge receipt of a notice of charge from
Palm Europe Limited and Foothill Capital Corporation of which the attached is a
copy (the "Notice of Charge").
In consideration of the payment by you to us of the sum of (pound)1.00 we hereby
confirm, agree with and undertake to you as follows:
(a) subject as follows, we accept the instructions and authorisations
contained in the Notice of Charge and agree to be bound by and to
perform them upon the terms and subject to the conditions set out in
the Notice of Charge;
(b) to the best of our knowledge we have not received notice of any
other assignment of or charge over or other third party rights in
the Collection Accounts and we will notify you (at the address
specified in the last paragraph of the Notice of Charge) if we do
receive any such notice, and subject as follows, no security exists
in our favour on, over or with respect to the Collection Accounts;
and
(c) we will hold all moneys standing to the credit of the Collection
Accounts to the order of the Agent;
(d) we will not exercise any right to combine accounts or any rights of
set-off, counterclaim or lien or any similar rights in relation to
the moneys standing to the credit of the Collection Accounts except
for: (i) any account charges or other charges in respect of the
maintenance and operation of the Collection Accounts; and/or (ii)
any costs and expenses we may incur by reason of any payment to or
withdrawal from any Collection Accounts in accordance with the terms
of the Notice of Charge; and (iii) any amount payable by Palm Europe
Limited pursuant to the indemnity contained in the Notice of Charge.
This letter shall be governed by and construed in accordance with the laws of
England.
Signed by
...................................
for and on behalf of
Bank of America, N.A.
35
To: The Directors
Palm Europe Limited
30 November 2001
Dear Sirs
Collection Account Letter
We refer to the debenture of today's date (the "Debenture") granted by Palm
Europe Limited (the "Charging Company") to ourselves as the Agent (as defined in
the Debenture).
1. The terms defined in the Debenture shall, where the context so admits,
have the same meanings in this letter.
2. We refer in particular to the following provisions of the Debenture:
(a) by sub-clause 3.1.2 (Charging Clause), the Charging Company created
first fixed charges over book and other debts and monetary claims
(present and future);
(b) by sub-clause 3.1.3(a) (Charging Clause), the Charging Company
created first fixed charges over any cash balances standing to the
credit of any Collection Accounts relating to the Charging Company,
including the proceeds of Receivables; and
(c) by sub-clause 5.1 (Treatment of Receivables), the Charging Company
is required to pay into such account as the Agent nominates,
pursuant to this letter, all debts and claims charged by it pursuant
to the Debenture.
3. In accordance with sub-clause 5.1 (Treatment of Receivables) of the
Debenture, we set out below details of the Charging Company's operating
account which is to be its Collection Account for the purposes of the
Debenture and hereby require that the Charging Company pays into its
Collection Account all moneys which it may henceforth receive in respect
of Receivables and other debts and claims charged by the Debenture until
further instructed by us to the contrary.
=======================================================================
Company/Account Description Collection Bank Branch
Account Number
-----------------------------------------------------------------------
Palm Europe Limited Euro Account [*] London
-----------------------------------------------------------------------
Palm Europe Limited US Dollar Account [*] London
-----------------------------------------------------------------------
Palm Europe Limited Sterling Account [*] London
=======================================================================
36
4. We confirm that we will not at any time before the Enforcement Date as
defined in the Debenture without your consent:
(i) require any transfer to be made to any account other than your
current account (as referred to in the Notice of Charge or in
accordance with paragraph 5 of this letter); or
(ii) give any authorisation or instruction under paragraph 2(b) of
the Notice of Charge which is inconsistent with (i) above.
5. We will, however, if directed by you to do so (at any time before the
Enforcement Date) by notice in writing containing details of your new
current account (being an account in the name of Palm Europe Limited),
notify the bank holding the Collection Account that your current account
has changed for the purpose of paragraph 5(a) of the Notice of Charge.
Please sign and return the enclosed copy of this letter to indicate your
agreement to its terms.
Yours faithfully
----------------------------
For and on behalf of
Foothill Capital Corporation
We hereby acknowledge and agree to the foregoing terms of this letter.
/s/ Xxxx Xxxxxx
----------------------------
For and on behalf of
Palm Europe Limited
Dated:
37
