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EXHIBIT 4.6
DATED 20TH NOVEMBER 1997
COTT BEVERAGES LIMITED
(FORMERLY COTT UK LIMITED)
and
LLOYDS TSB BANK PLC
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CREDIT AGREEMENT
(AS AMENDED ON 14TH JULY 1998 AND ON 5TH JULY 1999
AND AS AMENDED AND RESTATED ON 27TH MARCH 2000)
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XXXXXX XXXXX SAPTE
0 Xxxxx Xxxxx
Xxxxxx XX0X 0XX
Tel. 000 0000 0000
Fax. 000 0000 0000
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REF. VAE/IMR/116004/BF409150.07
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TABLE OF CONTENTS
CLAUSE HEADING PAGE NUMBER
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1. DEFINITIONS AND INTERPRETATION..................................................................1
1.1 Definitions.....................................................................................1
1.2 Headings.......................................................................................19
1.3 Interpretation.................................................................................19
2. FACILITIES.....................................................................................21
3. PURPOSE........................................................................................21
3.1 Purpose of the Term Loan Facility..............................................................21
3.2 Purpose of the Revolving Credit Facility.......................................................21
3.3 Purpose of Ancillary Facility..................................................................22
3.4 Undertaking by the Borrower....................................................................22
3.5 No liability...................................................................................22
4. CONDITIONS PRECEDENT...........................................................................22
4.1 Conditions precedent...........................................................................22
4.2 Confirmation of satisfaction...................................................................22
5. TERM LOAN FACILITY AND REVOLVING CREDIT FACILITY...............................................22
5.1 Drawdown of Term Loan Facility.................................................................22
5.2 Utilisation of Revolving Credit Facility.......................................................22
5.3 Conditions to each Advance.....................................................................23
5.4 Drawdown Notice................................................................................24
6. THE OPTIONAL OVERDRAFT FACILITY AND THE ANCILLARY FACILITY.....................................24
6.1 Nature of Facilities...........................................................................24
6.2 Utilisation of Optional Overdraft Facility.....................................................24
6.3 Utilisation of Ancillary Facility..............................................................25
6.4 FFE Contracts..................................................................................25
6.5 Guarantees.....................................................................................26
6.6 Counter indemnity from the Borrower............................................................26
6.7 Interest on payments...........................................................................26
7. INTEREST.......................................................................................27
7.1 Interest rate..................................................................................27
7.2 Margin ratchet.................................................................................27
7.3 Interest Periods...............................................................................28
7.4 Default interest...............................................................................29
7.5 Interest, commission and fees under the Optional Overdraft Facility and Ancillary Facility.....29
7.6 Calculation and payment of interest............................................................30
8. REPAYMENT AND PREPAYMENT.......................................................................30
8.1 Repayment of Term Loan.........................................................................30
8.2 Repayment of Revolving Advances................................................................31
8.3 Mandatory prepayment of Disposal Proceeds......................................................31
8.4 Mandatory Prepayment of Extraordinary Proceeds.................................................32
8.5 Mandatory prepayment on Change of Control, Sale or Listing.....................................32
8.6 Voluntary prepayment of Term Loan..............................................................33
8.7 No re-borrowing of Term Loan...................................................................33
8.8 Application of Prepayments.....................................................................33
9. CANCELLATION OF REVOLVING CREDIT FACILITY AND ANCILLARY FACILITY...............................33
9.1 Cancellation of Revolving Credit Facility......................................................33
9.2 Cancellation of Ancillary Facility.............................................................34
9.3 Notice.........................................................................................34
9.4 Limitation.....................................................................................34
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10. CHANGES IN CIRCUMSTANCES.......................................................................34
10.1 Illegality.....................................................................................34
10.2 Increased Costs................................................................................35
10.3 Market disruption..............................................................................36
10.4 Mitigation.....................................................................................37
10.5 Certificates...................................................................................37
11. PAYMENTS.......................................................................................37
11.1 Place and time.................................................................................37
11.2 Funds..........................................................................................38
11.3 Business Days..................................................................................38
11.4 Currency.......................................................................................38
11.5 Accounts as evidence...........................................................................38
11.6 Partial payments...............................................................................38
11.7 Set-off and counterclaim.......................................................................38
11.8 Grossing-up....................................................................................38
12. SECURITY.......................................................................................40
12.1 Security Documents.............................................................................40
12.2 Interest Rate Protection Agreements............................................................40
12.3 Release of security on Disposals...............................................................40
12.4 Vendor Collateral Account......................................................................40
13. REPRESENTATIONS AND WARRANTIES.................................................................41
13.1 Representations and warranties.................................................................41
13.2 Repetition.....................................................................................45
14. UNDERTAKINGS...................................................................................45
14.1 Information undertakings.......................................................................45
14.2 Positive undertakings..........................................................................48
14.3 Negative undertakings..........................................................................51
14.4 Financial undertakings.........................................................................55
15. DEFAULT........................................................................................59
15.1 Default........................................................................................59
15.2 Acceleration, etc..............................................................................62
16. SET-OFF........................................................................................63
17. FEES AND EXPENSES..............................................................................63
17.1 Expenses.......................................................................................63
17.2 Arrangement....................................................................................64
17.3 Commitment fees................................................................................64
17.4 Documentary Taxes indemnity....................................................................64
17.5 VAT............................................................................................65
17.6 Indemnity payments.............................................................................65
17.7 Debiting Authority.............................................................................65
18. AMENDMENTS AND WAIVERS.........................................................................65
18.1 Writing........................................................................................65
18.2 No implied waivers; remedies cumulative........................................................65
19. MISCELLANEOUS..................................................................................66
19.1 Severance......................................................................................66
19.2 Counterparts...................................................................................66
19.3 Publicity......................................................................................66
19.4 Euro...........................................................................................66
20. NOTICES........................................................................................66
20.1 Method.........................................................................................66
20.2 Delivery.......................................................................................66
20.3 Addresses......................................................................................67
20.4 Deemed receipt.................................................................................67
21. ASSIGNMENTS AND TRANSFERS......................................................................68
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21.1 Benefit of Agreement...........................................................................68
21.2 Assignments and transfers by the Borrower......................................................68
21.3 Assignments by the Bank........................................................................68
21.4 Transfers by the Bank..........................................................................68
21.5 Grant of Participations........................................................................68
21.6 Disclosure.....................................................................................68
22. INDEMNITIES....................................................................................69
22.1 Breakage costs indemnity.......................................................................69
22.2 Currency indemnity.............................................................................69
22.3 Transaction Indemnity..........................................................................69
22.4 General........................................................................................70
23. LAW............................................................................................70
SCHEDULE 1 CONDITIONS PRECEDENT...........................................................................
SCHEDULE 2 DRAWDOWN NOTICE................................................................................
SCHEDULE 3 GROUP COMPANIES................................................................................
SCHEDULE 4 MANDATORY COST RATE............................................................................
SCHEDULE 5 PART I -- REPAYMENT OF TERM LOAN...............................................................
PART II -- PERFORMANCE CRITERIA................................................................
SCHEDULE 6 FORM OF NET ASSETS LETTER......................................................................
SCHEDULE 7 THE PROPERTIES.................................................................................
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THIS AGREEMENT is made on 20th November 1997
BY:
(1) COTT BEVERAGES LIMITED (formerly COTT UK LIMITED), a company incorporated
in England and Wales with registered number 2836071 of Xxxxxx Xxxxx, Xxxx
Xxx, Xxxxxxxx, Xxxxxxxxxx XX00 0XX (the "BORROWER");
(2) LLOYDS TSB BANK PLC of Xx. Xxxxxx'x Xxxxx, 0-0 Xxxxxxxxx, Xxxxxx XX0X 0XX
(the "BANK").
WHEREAS
(A) This Agreement sets out the terms on which the Bank has agreed to make
available to the Borrower a sterling term loan facility of
(pound)49,000,000, a sterling revolving loan facility of (pound)13,000,000
(incorporating an optional overdraft facility) and certain ancillary
facilities of (pound)7,500,000.
(B) The facilities to be made available under this Agreement are for the
respective purposes specified in Clauses 3.1, 3.2 and 3.3.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement (including the Recitals):
"ACCOUNTANTS' REPORT" means the report dated on or about 19th November 1997
(which for the avoidance of doubt includes the covering letter and
documents referred to therein) prepared by Messrs. Coopers & Xxxxxxx
relating to the Borrower and the report dated on or about 15th September
1997 relating to the Target and its Subsidiaries, each addressed to the
Bank Parties.
"ACCOUNTING PERIOD" has the meaning specified in Clause 14.1(b).
"ACCOUNTING PRINCIPLES" means the GAAP used in the Accounts of the Borrower
for its Financial Year ended 31st January 1997;
"ACCOUNTS" means in relation to a Group Company, its audited accounts
(which shall be consolidated in the case of the Borrower) (including all
additional information and notes to the accounts) together with the
relevant directors' report and auditors' report.
"ACQUISITION COSTS" means those fees, commissions, costs and expenses
properly incurred by the Borrower in relation to its acquisition of the
Target Shares and the Target Assets.
"ACQUISITION DOCUMENTS" means:
(a) the Share Purchase Agreement together with all other documents entered
into by the Borrower in connection with the acquisition of the Target
Shares;
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(b) the Hive-Up Agreement together with all other documents entered into
by the Borrower in connection with the acquisition of the Target
Assets;
(c) the Crystal Asset Sale Agreement together with all other documents
entered into by the Borrower in connection with the acquisition of
certain of the Crystal Assets;
(d) the Crystal Lease Agreements together with all other documents entered
into by the Borrower in connection with the lease to it of certain of
the Crystal Assets;
but, for the avoidance of doubt, shall not include the Vendors' Disclosure
Letter.
"ACQUISITION GOODWILL" means the net goodwill arising on the acquisition of
the Target Shares, the Target Assets (but not the Crystal Assets).
"ACT" means the Companies Xxx 0000.
"ADVANCE" means a Term Advance or a Revolving Advance.
"AFFILIATE" means, in relation to a company, a Subsidiary or a Holding
Company (as defined in section 736 of the Act) of such company and any
other subsidiary of such a Holding Company.
"ANCILLARY FACILITY" means the ancillary facility referred to in Clause 6
under which Guarantees, FFE Contracts and other accommodation may be made
available to the Borrower by the Bank.
"ANCILLARY LIMIT" means (pound)7,500,000 or such lower figure as the Bank
may specify.
"ANCILLARY OUTSTANDINGS" means the aggregate of:
(a) the Guaranteed Amount of each Guarantee issued by the Bank;
(b) such amount calculated on a xxxx to market basis as the Bank may, in
accordance with its then current credit policy, accord as a risk
weighting to all outstanding FFE Contracts; and
(c) in relation to any other facilities or financial accommodation
provided under the Ancillary Facility, such other amounts as the Bank
determines fairly represents the aggregate exposure at that time of
the Bank in respect of that facility or accommodation.
"AUDITORS" means, in relation to each Group Company, Coopers & Xxxxxxx or
any other firm of chartered accountants of internationally recognised
standing that has been appointed as auditors of such Group Company.
"AVAILABLE ANCILLARY FACILITY" means, at any time, the Ancillary Limit less
the aggregate of the Ancillary Outstandings.
"AVAILABLE REVOLVING CREDIT COMMITMENT" means, in relation to the Bank, its
Revolving Credit Commitment less its Revolving Advances and the amount of
the Optional Overdraft Limit.
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"BANK PARTICIPANTS" means the financial institutions to whom the Bank
grants sub-participation in any of the facilities provided by this
Agreement.
"BANK PARTIES" means the Bank, RBS and any Bank Participant and any person
to whom they transfer their interest whether by assignment, novation,
sub-participation or in any other way.
"BCB" means BCB Beverages Limited, a company incorporated under the laws of
the Republic of Ireland with registered number 220550.
"BCB DEBT" has the meaning given to it in Clause 14.3(n).
"BORROWING BASE" means in respect of the Borrower an amount equal to the
aggregate of:
(a) an amount equal to 70 per cent. of the consolidated book value of its
accounts receivable (as determined in accordance with Canadian GAAP);
and
(b) an amount equal to 40 per cent. of the consolidated book value of its
inventory (as determined in accordance with Canadian GAAP).
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which banks
and foreign exchange markets are open for business in London.
"BUSINESS PLAN" means the business plan for the Group prepared by the
Management in the agreed form.
"CANADIAN GAAP" means the accounting principles, concepts, bases and
policies generally adopted and accepted in Canada.
"CAPITAL EXPENDITURE" has the meaning given to that term by GAAP but shall
exclude those fixed asset additions qualifying as Finance Lease
Expenditure.
"CASHFLOW" means, in respect of the Group in relation to any period, the
aggregate of PBIT and Depreciation charged to the profit and loss account
for that period:
(a) plus the net proceeds of all fixed assets disposed of during that
period including those proceeds applied in prepayment of the Term Loan
in accordance with Clause 8.1.4, 8.3.1 or 8.4 (but provided that no
account shall be taken for the purposes of determining Cashflow of
receipts attributable to transactions in respect of which the proceeds
have been paid to the credit of a Disposal Proceeds Bridging Account
in accordance with Clause 14.3(b)(ii));
(b) plus any decrease, or minus any increase, in Net Working Capital
during that period;
(c) plus any receipts by way of Extraordinary Items and minus any payments
by way of Extraordinary Items, in each case, received or made during
that period;
(d) minus any dividends paid in respect of minority interests for that
period;
(e) plus any dividends received from other fixed assets investments during
that period;
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(f) plus income from participating interests in associated undertakings
and joint ventures to the extent received in cash and minus any
payment made to associated undertakings and joint ventures during that
period;
(g) plus any increase or minus any decrease in provisions for liabilities
and charges (including in respect of pensions) made in respect of that
period to the extent included within PBIT;
(h) minus Capital Expenditure and Finance Lease Expenditure in respect of
that period paid or contractually required to be paid during that
period;
(i) plus realised exchange gains and minus realised exchange losses
received or paid during that period to the extent not already taken
account of in PBIT for that period;
(j) minus the aggregate of all corporation or other similar Taxes paid
during that period;
(k) minus any amount paid or contractually required to be paid under any
hire agreement, credit sale agreement, hire purchase agreement,
conditional sale agreement or instalment sale and purchase agreement
which is not a Finance Lease;
(l) plus any amount amortised in respect of Acquisition Costs in
accordance with FRS4 and any amount written off the value attributed
to Acquisition Goodwill, in each case during that period and to the
extent included within PBIT;
(m) plus in respect of any period ending on or before 31st January 1999,
any amounts not exceeding (pound)2,000,000 received in cash by the
Borrower as the proceeds of subscription for equity share capital in
the Borrower;
(n) minus (to the extent not otherwise taken into account) any
restructuring costs paid by the Borrower during that period;
(o) plus any amounts received by the Borrower during that period from Cott
(or any other member of the Cott Group other than a Group Company) as
the proceeds of subscription by them for equity share capital in the
Borrower or by way of Subordinated Loan; and
(p) minus any management charges (other than under the Retail Brands
Management Agreement) paid by the Borrower or any Group Company to
Cott or any other Cott Group Company (not being a Group Company).
For the purposes of paragraph (o) of this definition the (pound)10,000,000
paid by Cott to the Borrower on 30th December 1999 shall be deemed to have
been received by the Borrower on 10 January 2000 or, if later, on the date
the payment is applied by way of subscription for fully paid up ordinary
share capital of the Borrower and for the purposes of this definition:
(i) "NET WORKING CAPITAL" means the aggregate of Current Assets (excluding
all of cash at bank and cash in hand, all assets in relation to Tax
and accrued interest receivable) less the aggregate of Current
Liabilities (excluding moneys
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due in relation to the Facilities and the Deferred Consideration and
liabilities in relation to Tax, Extraordinary Items and dividends
payable); and
(ii) "CURRENT ASSETS" means, in relation to the Group, the aggregate value
of its assets which are treated as current assets in accordance with
GAAP; and
(iii) "CURRENT LIABILITIES" means, in relation to the Group, the aggregate
value of its liabilities which are treated as current liabilities in
accordance with GAAP excluding any such liabilities relating to
management charges (other than under the Retail Brands Management
Agreement) payable by the Borrower and any other Group Company to Cott
or another Cott Group Company (not being a Group Company) and
excluding in respect of the Financial Year ended 31 December 2000 only
any liabilities relating to any restructuring of the Borrower and its
business up to the Restructuring Costs Limit relating to the
Borrower's management and organisational restructuring but including
any such liabilities to the extent relating to the outsourcing and/or
restructuring of the Borrower's distribution facilities.
"CERTIFIED COPY" means, in relation to a document, a copy of that document
bearing the endorsement "Certified a true, complete and accurate copy of
the original, which has not been amended otherwise than by a document, a
Certified Copy of which is attached hereto", which has been signed and
dated by a duly authorised officer of the relevant company and which
complies with that endorsement.
"CHANGE" means, in relation to the Bank (or any company of which the Bank
is a Subsidiary), the introduction, implementation, repeal, withdrawal or
change in, or in the interpretation or application of, (a) any law,
regulation, practice or concession, or (b) any directive, requirement,
request or guidance (whether or not having the force of law but if not
having the force of law, one which applies generally to a class or category
of financial institutions of which the Bank (or that company) forms part
and compliance with which is in accordance with the general practice of
those financial institutions) of the European Community, any central bank
or any other fiscal, monetary, regulatory or other authority.
"CHANGE OF CONTROL" means the Borrower ceasing to be a wholly owned direct
or indirect Subsidiary of Cott provided that, for the purpose of
considering whether the Borrower is so wholly owned, no account shall be
taken of any options held by any member of Management to acquire not more
than 5 per cent. of the shares of any company of which the Borrower is a
Subsidiary.
"COMMITMENT" means, in relation to the Bank, the aggregate of its Term Loan
Commitment and its Revolving Credit Commitment.
"COMPLETION" means the completion of all of (i) the sale and purchase of
the Target Shares pursuant to the Share Purchase Agreement, (ii) the sale
and purchase of the Target Assets pursuant to the Hive-Up Agreement (iii)
completion of the Crystal Lease Agreement and (iv) completion of the
Crystal Asset Sale Agreements.
"COMPLIANCE CERTIFICATE" has the meaning given to that term in Clause
14.1(e).
"COTT" means Cott Corporation, a company incorporated under the laws of
Canada.
"COTT GROUP" means Cott and each of its direct and indirect Subsidiaries;
and COTT GROUP COMPANY means any one of them.
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"COTT NOTES DOCUMENTS" means each indenture and prospectus in respect of
the 9 3/8% $160,000,000 senior notes due 2005 and the 8 1/2% $125,000,000
senior notes due 2007 of Cott and "COTT NOTES DOCUMENT" means any of them.
"COTT SUPPLY AGREEMENT" means the agreement dated on or about 2nd January
2000 between Cott and the Borrower providing for the long term supply of
concentrates.
"CRYSTAL" means Crystal Drinks Limited, a company incorporated under the
laws of England and Wales with registered number 2186825.
"CRYSTAL ASSETS" means the assets sold under the terms of the Crystal Asset
Sale Agreement and leased by the Crystal Lease Agreements.
"CRYSTAL ASSET SALE AGREEMENT" means the agreement dated on or about the
date of this Agreement made between Crystal and the Borrower providing for
the sale of the stock and work in progress of Crystal to the Borrower.
"CRYSTAL LEASE AGREEMENTS" means the master lease agreement dated on or
about the date of this Agreement ("Master Lease Agreement") relating to the
leasing by Crystal to the Borrower of certain of the Crystal assets and
made between Crystal and the Borrower together with the Premises Lease, the
Plant & Machinery Lease and the Business Assets Lease (as defined in the
Master Lease Agreement).
"CRYSTAL SUBORDINATED LOAN NOTES" means the notes issued by the Borrower to
Crystal and subordinated to the Bank.
"DANGEROUS MATERIALS" means any element or substance, whether consisting of
gas, liquid, solid or vapour, identified by any Environmental Law to be, to
have been, or to be capable of being or becoming, harmful to mankind or any
living organism or damaging to the Environment.
"DEBENTURE" means the debenture dated 31st January 1994 given by the
Borrower (then called Xxxxxxxx Xxxx (Pontefract) Limited) to the Bank.
"DEBT" means all Indebtedness of the Borrower and the other Group Companies
excluding:
(a) Indebtedness to the Vendors in respect of Deferred Consideration;
(b) Indebtedness of a Group Company to another Group Company; and
(c) Indebtedness of the Borrower to Cott or any other member of the Cott
Group other than a Group Company in respect of any Subordinated Loans.
"DEFAULT" means any event specified as such in Clause 15.1.
"DEFAULT NOTICE" has the meaning given to that term in Clause 15.2.1.
"DEFERRED CONSIDERATION" means the deferred consideration paid or to be
paid by the Borrower to the Vendors pursuant to clause 4 and schedule 3 of
the Share Purchase Agreement.
"DEPRECIATION" has the meaning given to that term by GAAP.
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"DISPOSAL" means a sale, transfer or other disposal (including by way of
lease or loan) by a person of all or part of its assets, whether by one
transaction or a series of transactions and whether at the same time or
over a period of time.
"DISPOSAL PROCEEDS" means, in respect of a Disposal by a Group Company, the
gross consideration receivable by that Group Company for that Disposal less
all Taxes, costs and expenses directly incurred in respect of that
Disposal.
"DISPOSAL PROCEEDS BRIDGING ACCOUNT" has the meaning given to that term in
Clause 14.3(b)(ii)(y).
"DISTRIBUTION RESTRUCTURING COSTS" means any costs incurred in relation to
the outsourcing and/or restructuring of the Borrower's distribution
facilities.
"DORMANT SUBSIDIARY" means, on any given date, a Group Company (a) which
has been dormant within the meaning of section 250(3) of the Act for the
period of 12 months ending on that date and (b) in respect of which neither
its assets nor its liabilities exceed in aggregate (pound)5,000 (or, in the
case of Target only, whose assets do exceed (pound)5,000 where those assets
consist solely of its paid up share capital and a right to repayment from
the Borrower of the balance of the consideration for the Target Assets
under the Hive-Up Agreement).
"DRAWDOWN DATE" means the date on which an Advance is made, or is proposed
to be made.
"DRAWDOWN NOTICE" means a notice substantially in the form set out in
Schedule 2.
"ENCUMBRANCE" means any mortgage, charge, assignment by way of security,
pledge, hypothecation, lien, right of set-off, retention of title
provision, trust or flawed asset arrangement (for the purpose of, or which
has the effect of, granting security) or any other security interest of any
kind whatsoever, or any agreement, whether conditional or otherwise, to
create any of the same, or any agreement to sell or otherwise dispose of
any asset on terms whereby such asset is or may be leased to or re-acquired
or acquired by any Group Company.
"ENVIRONMENT" means all or any of the following media: air (including air
within buildings or other structures and whether above or below ground);
land (including buildings and any other structures or erections in, on or
under it and any soil and anything below the surface of land); land covered
with water; and water (including sea, ground and surface water).
"ENVIRONMENTAL LAW" means any statutory or common law, treaty, convention,
directive or regulation having legal or judicial effect whether of a
criminal or civil nature, concerning:
(a) pollution or contamination of the Environment;
(b) harm by pollution or contamination, whether actual or potential, to
mankind and human senses, living organisms and ecological systems;
(c) the generation, manufacture, processing, distribution, use (including
abuse), treatment, storage, disposal, transport or handling of
Dangerous Materials; or
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(d) the emission, leak, release or discharge into the Environment of
noise, vibration, dust, fumes, gas, odours, smoke, steam, effluvia,
heat, light, radiation (of any kind), infection, electricity or any
Dangerous Material and any matter or thing capable of constituting a
nuisance or an actionable tort of any kind in respect of such matters.
"ENVIRONMENTAL REPORT" means the report dated on or about 27th October 1997
prepared by Xxxxxx Xxxxxxx Group plc relating to the Borrower, Crystal and
Target and addressed to the Bank Parties.
"EXCEPTIONAL ITEMS" has the meaning given to that term in FRS3, but
excluding those items listed in paragraph 20 of FRS3.
"EXTRAORDINARY ITEMS" has the meaning given to that term in FRS3, but
including those items listed in paragraph 20 of FRS3.
"EXTRAORDINARY PROCEEDS" means any proceeds (other than Disposal Proceeds)
received in cash of any transaction otherwise than in the ordinary course
of trading of a Group Company (including the proceeds of any claim for
breach of warranty or contract in respect of the Acquisition Documents and
any insurance proceeds not applied to reinstate property in accordance with
the Security Documents).
"EXTRAORDINARY PROCEEDS ACCOUNT" has the meaning given to that term in
Clause 8.4(b).
"FACILITIES" means the Term Loan Facility, the Revolving Credit Facility
and the Ancillary Facility; and "FACILITY" shall be construed accordingly.
"FEES LETTER" means the letter dated the same date as this Agreement from
the Bank to the Borrower relating to certain fees payable to the Bank by
the Borrower in relation to this Agreement, being described on its face as
the "Fees Letter".
"FFE CONTRACT" means a forward foreign exchange contract made or to be made
between the Bank and the Borrower.
"FFE CONTRACT AMOUNT" means, in relation to an FFE Contract:
(a) if under that FFE Contract the Borrower is obliged to pay an amount in
Sterling, that amount; and
(b) if under that FFE Contract the Borrower is obliged to pay an amount in
a currency other than Sterling, the equivalent in Sterling of that
amount (where the equivalent is calculated by reference to the Bank's
spot rate at or about 11.00 a.m. on the day the calculation falls to
be made for the purchase of Sterling with that currency).
"FINAL MATURITY DATE" means in relation to both the Term Loan Facility and
the Revolving Credit Facility, 31st January 2005 (or if not a Business Day
the next preceding Business Day).
"FINANCE LEASE" means any lease, hire agreement, credit sale agreement,
hire purchase agreement, conditional sale agreement or instalment sale and
purchase agreement which
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should be treated in accordance with SSAP 21 (or any successor to SSAP 21)
as a finance lease or in the same way as a finance lease.
"FINANCE LEASE EXPENDITURE" means the capital value of any asset the
subject of a Finance Lease to which a Group Company is a party.
"FINANCIAL GUARANTEE" means a Guarantee being a direct credit substitute to
which the Bank of England attributes a credit conversion factor of 100 per
cent. for the purpose of risk asset weighting calculations in accordance
with its notice "Implementation in the United Kingdom of the Solvency Ratio
Directive" (BSD/1990/3) as amended, supplemented or replaced from time to
time.
"FINANCIAL YEAR", in relation to a company, has the meaning given to that
expression in section 223 of the Act.
"FINANCING DOCUMENTS" means this Agreement, the Fees Letter, the Interest
Rate Protection Agreements, the Security Documents and the Amendment and
Restatement Agreement dated 27th March 2000 between the parties hereto.
"FRS" together with a number means the financial reporting standard issued
by the Accounting Standards Board for application in England and Wales and
identified by reference to that number.
"GAAP" means, in relation to a company, accounting principles, concepts,
bases and policies generally adopted and accepted in England and Wales.
"GROSS OPTIONAL OVERDRAFT LIMIT" means (pound)18,000,000 or such lower
figure as the Bank may specify.
"GROSS OVERDRAFT OUTSTANDINGS" means all amounts outstanding by way of
overdraft under the Optional Overdraft Facility.
"GROUP" means the Borrower, the Target and each of their respective
Subsidiaries; and "GROUP COMPANY" means any one of them.
"GROUP TRADING AGREEMENTS" means the Cott Supply Agreement, the Retail
Brands Management Agreement and the Crystal Lease Agreements.
"GUARANTEE" means any guarantee, bond, indemnity, letter of credit,
documentary or other credit, or any other instrument of suretyship or
payment, issued, undertaken or made or, as the case may be, proposed to be
issued, undertaken or made by the Bank under the Optional Overdraft
Facility.
"GUARANTEED AMOUNT" means, in relation to a Guarantee, the maximum
aggregate amount of the actual and contingent liabilities of the Bank under
that Guarantee.
"HALF YEAR" means each period from and including 1st February to and
including 31st July and each period from and including 1st August to and
including 31st January.
"HERO IP LICENCE" means the trade xxxx Licence dated on or about the date
of this Agreement between Hero AG and the Borrower relating to certain
trade marks of Hero XX.
0
00
"XXXX XXXXXXX" means the licence dated on or about the date of this
Agreement between Target and the Borrower in respect of the use by the
Borrower of the property at Xxxx 00, Xxxxx Xxxx, Xxxxxx Xxxxxxxxx.
"HIVE-UP AGREEMENT" means the sale and purchase agreement dated on or about
the date of this Agreement the date of this Agreement relating to the sale
by Target and the purchase by the Borrower of the Target Assets and made
between Target and the Borrower.
"INDEBTEDNESS" means, in relation to a person, its obligation (whether
present or future, actual or contingent, as principal or surety) for the
payment or repayment of money (whether in respect of interest, principal or
otherwise) incurred in respect of:
(a) moneys borrowed or raised;
(b) any bond, note, loan stock, debenture or similar instrument;
(c) any acceptance credit, xxxx discounting, note purchase, factoring or
documentary credit facility;
(d) the supply of any goods or services which is more than 45 days past
the expiry of the period customarily allowed by the relative supplier
after the due date;
(e) any Finance Lease;
(f) any guarantee, bond, stand-by letter of credit or other similar
instrument issued in connection with the performance of contracts;
(g) any interest rate or currency swap agreement or any other hedging or
derivatives instrument or agreement (calculated, in the case of a swap
agreement, on a net basis);
(h) any arrangement pursuant to which any asset sold or otherwise disposed
of by that person is or may be leased to or re-acquired by a Group
Company (whether following the exercise of an option or otherwise); or
(i) any guarantee, indemnity or similar insurance against financial loss
given in respect of the obligation of any person.
"INFORMATION PACKAGE" means:
(a) the Accountants' Report;
(b) the Legal Due Diligence Report;
(c) the Market Report;
(d) the Business Plan;
(e) the Valuation;
(f) the Environmental Report; and
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(g) the Original Accounts.
"INSTALMENT" has the meaning given to that term in Clause 8.1.
"INSTALMENT REPAYMENT DATE" has the meaning given to that term in Clause
8.1.
"INTELLECTUAL PROPERTY RIGHTS" means all patents, trade marks, service
marks, trade names, design rights, copyright (including rights in computer
software and moral rights and in published and unpublished work), titles,
rights to know-how and other intellectual property rights, in each case
whether registered or unregistered and including applications for the grant
of any of the foregoing and all rights or forms of protection having
equivalent or similar effect to any of the foregoing which may subsist
anywhere in the world.
"INTEREST DATE" means the last day of an Interest Period.
"INTEREST PERIOD" means each period determined in accordance with Clause 7
for the purpose of calculating interest on Advances or overdue amounts.
"INTEREST RATE PROTECTION AGREEMENTS" means each agreement entered into or
to be entered into by the Borrower with the Bank for the purpose of hedging
the Borrower's interest rate liabilities in relation to all or any part of
the Term Loan.
"LEGAL DUE DILIGENCE REPORT" means the report entitled "Legal Due Diligence
Report" dated on or about the date of this Agreement prepared by Messrs.
Xxxxxxx Suddards and addressed to the Bank Parties.
"LENDING OFFICE" means, in relation to the Bank, its office at 0-0
Xxxxxxxxx, Xxxxxx XX0X 0XX or such other office in the United Kingdom
through which the Bank's Commitment is maintained.
"LIBOR" means, in respect of an Advance or other sum and in respect of a
particular Interest Period:
(a) the rate of the offered quotation for Sterling deposits for a period
comparable to that Interest Period which appears on the display
designated as "Page 3750" on the Telerate Service (or such other page
or service as may replace it for the purpose of displaying London
interbank offered rates of prime banks for Sterling) at or about 11.00
a.m. on the first day of that Interest Period);
(b) if no such offered quotation appears on "Page 3750" on the Telerate
Service, the arithmetic mean (rounded upwards to 4 decimal places) of
the rates per annum (as quoted to the Bank at its request) at which
each Reference Bank was offering deposits in Sterling in an amount
comparable with that Advance or other sum, as the case may be, to
leading banks in the London interbank market for a period equal to
that Interest Period at or about 11.00 a.m. on the first day of that
Interest Period.
"LISTING" means the admission of any of the Borrower's shares to the
Official List of the London Stock Exchange Limited or any other recognised
investment exchange (as defined in section 207 of the Financial Services
Act 1986) and their respective share dealing markets.
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"LOANS" means the Term Loan and the Revolving Loan; and "LOAN" shall be
construed accordingly.
"MANAGEMENT" means Xxxx Xxxxxxxx, Xxxx Xxxxxxxx, Xxxxx Xxxxxx and Xxxxx
Xxxxxxx.
"MANAGEMENT ACCOUNTS" has the meaning given to that term in Clause 14.1(b).
"MANDATORY COST RATE" means the rate determined in accordance with Schedule
4.
"MARGIN" means, subject to Clause 7.2, 2.00 per cent. per annum.
"MARKET REPORT" means the market due diligence reports prepared by OC&C
Strategy Consultants:
(a) dated 27th October 1997 and 13th November 1997 addressed to the Bank
Parties; and
(b) dated 15th September 1997 addressed to the Borrower,
each in respect of the Target.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
ability of any Group Company to comply with its obligations under any
Financing Document or (b) the business, financial condition or assets of
the Group taken as a whole.
"NET PROFIT" means, in relation to any period, the consolidated profit of
the Group for that period (including, for the avoidance of doubt,
Exceptional Items and Extraordinary Items) after Taxation and Total Debt
Costs and not taking into account any management charges (other than under
the Retail Brands Management Agreement) up to (pound)1,000,000 per annum
(pro rata for any other period) payable by the Borrower or any other Group
Company to Cott or any other member of the Cott Group (not being a Group
Company).
"OPERATING BUDGET" means, in relation to the Group and the period starting
not later than the date of this Agreement and ending on 31st January 1998,
the Business Plan, and in relation to each successive 12 month period
thereafter during the Security Period:
(a) a projected balance sheet;
(b) a projected profit and loss account;
(c) a projected cash flow statement; and
(d) projected covenant calculations relating to each financial undertaking
contained in Clause 14.4,
relative to each such period and on a month by month basis and with the
Management's commentary drawing on the performance in the previous period.
"OPTIONAL OVERDRAFT FACILITY" means the optional overdraft facility
referred to in Clause 6 under which overdrafts may be made available by the
Bank to the Borrower.
"OPTIONAL OVERDRAFT LIMIT" means (pound)13,000,000 or such lower figure as
the Bank may specify.
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"ORIGINAL ACCOUNTS" means:
(a) the Accounts of the Borrower for its Financial Year ended 31st January
1997; and
(b) the Accounts of the Target for its Financial Year ended 31st December
1996.
"OVERDRAFT OUTSTANDINGS" means all amounts outstanding by way of overdraft
under the Optional Overdraft Facility (net of any credit balance on any
account of the Borrower with the Bank to the extent that such credit
balance is freely available to be set off by the Bank against liabilities
owed to the Bank by the Borrower).
"PARENT LOAN" means a loan of (pound)4,000,000 from the Borrower to Cott
Retail Brands Limited.
"PARTICIPATION AGREEMENT" means an agreement which the Bank may enter into
granting participation in the facilities provided by this Agreement to
other banks.
"PARTY" means a party to this Agreement.
"PBIT" means, in relation to any period, the consolidated profit of the
Group for that period (including, for the avoidance of doubt, Exceptional
Items) before Taxation and Total Debt Costs, but taking into account, for
the avoidance of doubt, all restructuring costs and credits including any
Distribution Restructuring Costs but excluding:
(a) all restructuring costs and credits charged in the Financial Year
ended 31 December 1999 and all restructuring costs (other than any
Distribution Restructuring Costs) up to the Restructuring Costs Limit
incurred in the Financial Year ended 31 December 2000 only;
(b) profit attributable to minority interests;
(c) Extraordinary Items;
(d) any profit or loss arising on the disposal of fixed assets;
(e) any amount amortised in respect of Acquisition Costs in accordance
with FRS4;
(f) amounts written off the value of investments;
(g) amounts written off the value attributed to Acquisition Goodwill;
(h) income from participating interests in associated undertakings and
income from any other fixed asset investment;
(i) realised and unrealised exchange gains and losses; and
(j) all management charges (other than under the Retail Brands Management
Agreement) up to (pound)1,647,000 in respect of the year ending 31
December 1999 and up to (pound)1,000,000 per annum (pro rata for any
other period) thereafter
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19
payable by the Borrower and any other Group Company to Cott or any
other members of the Cott Group (not being a Group Company).
"PBITDA" means, in relation to any period, the aggregate of:
(a) PBIT;
(b) Depreciation charged to the consolidated profit and loss account of
the Group; and
(c) amounts written off the value of Acquisition Goodwill and any amount
amortised in respect of Acquisition Costs to the extent charged to the
consolidated profit and loss account of the Group in accordance with
FRS 4.
"PERMITTED ENCUMBRANCE" means:
(a) any Encumbrance created under the Financing Documents;
(b) any right of set-off or lien, in each case arising by operation of
law;
(c) any retention of title to goods supplied to the Borrower in the
ordinary course of its trading activities;
(d) any right of set-off over credit balances on bank accounts of Group
Companies arising in the ordinary course of the banking arrangements
of the Group;
(e) any agreement entered into by the Borrower in the ordinary course of
its trading activities to sell or otherwise dispose of any asset on
terms whereby that asset is or may be leased to or re-acquired or
acquired by a Group Company;
(f) any Encumbrance over an asset of a company which becomes a Subsidiary
of the Borrower (other than by reason of its incorporation) after the
date of this Agreement, being an Encumbrance which is in existence at
the time at which that company becomes such a Subsidiary but only if
(i) that Encumbrance was not created in contemplation of that company
becoming such a Subsidiary, (ii) the principal amount secured by that
Encumbrance has not been and shall not be increased and (iii) that
Encumbrance is discharged within 6 months of the date on which that
company became such a Subsidiary;
(g) any Encumbrance over an asset acquired by the Borrower after the date
of this Agreement and subject to which that asset is acquired but only
if (i) that Encumbrance was not created in contemplation of its
acquisition by that company, (ii) the amount secured by that
Encumbrance has not been increased in contemplation of, or since the
date of, its acquisition by that company and (iii) that Encumbrance is
discharged within 6 months of the date of its acquisition by that
company.
"PERMITTED INDEBTEDNESS" means:
(a) Indebtedness under any Financing Document;
(b) Indebtedness existing at the date of this Agreement between Group
Companies;
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(c) Indebtedness under any Finance Lease permitted under Clause 14.4.1(f);
(d) Indebtedness (subject to Clause 14.3(f)) of any Group Company to a
Cott Group Company;
(e) Indebtedness of any Group Company to the extent it is the subject of a
Guarantee;
(f) Indebtedness in respect of Deferred Consideration; and
(g) three forward contracts entered into by Target and in existence on the
date of this Agreement for values of $850,000, DM459,177 and
DM300,000.
"POST RESTRUCTURING PBIT" means, in relation to any period, PBIT but
calculated on the basis that all restructuring costs are taken into account
and included in calculating such PBIT and including in the calculation of
PBIT any amounts amortised in respect of Acquisition Costs in accordance
with FRS4 and amounts written off the value attributed to Acquisition
Goodwill.
"POTENTIAL DEFAULT" means an event or omission which, with the giving of
any notice, the lapse of time, the determination of materiality or the
satisfaction of any other condition under Clause 15.1, would be a Default.
"PROPERTIES" means all freehold and leasehold properties listed in
Schedule 7.
"QUALIFYING BANK" means an institution which is a bank for the purposes of
section 349 of the Income and Corporation Taxes Xxx 0000.
"QUARTER" means each period of 3 months ending on a Quarter Date.
"QUARTER DATE" means each 31st March, 30th June, 30th September and 31st
December.
"QUARTERLY ACCOUNTING PERIOD" means the three Accounting Periods ending on
or about a Quarter Date.
"RBS" means The Royal Bank of Scotland PLC.
"REFERENCE BANKS" means the Bank and RBS and/or such other bank or banks
which represent the Bank Participants as may be agreed between the Bank and
the Borrower from time to time.
"RESERVATIONS" means the principle that equitable remedies are remedies
which may be granted or refused at the discretion of the court, the
limitation of enforcement by laws relating to bankruptcy, insolvency,
liquidation, reorganisation, court schemes, moratoria, administration and
other laws generally affecting the rights of creditors, the time barring of
claims under the Limitation Xxx 0000, the possibility that an undertaking
to assume liability for or to indemnify against non-payment of United
Kingdom stamp duty may be void, defences of set-off or counterclaim and
similar principles.
"RESTRUCTURING COSTS LIMIT" means (pound)1,300,000 less any amount by which
actual restructuring costs and credits for the Financial Year ended 31
December 1999 on a net basis are less than (pound)534,000 in credit.
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21
"RETAIL BRANDS MANAGEMENT AGREEMENT" means the management agreement dated
on or about the date of this Agreement between the Borrower, Cott Europe
Trading Limited and Cott Retail Brands Limited.
"RETENTION" has the meaning given to that term in the Share Purchase
Agreement.
"REVOLVING ADVANCE" means an advance made or to be made to the Borrower
under the Revolving Credit Facility or, as the case may be, the outstanding
principal amount of any such advance.
"REVOLVING CREDIT COMMITMENT" means, in relation to the Bank,
(pound)13,000,000.
"REVOLVING CREDIT COMMITMENT PERIOD" means the period from and including
the date of this Agreement to but excluding the Final Maturity Date.
"REVOLVING CREDIT FACILITY" means the Sterling revolving loan facility
referred to in Clause 2.1.1(b).
"REVOLVING CREDIT FACILITY LIMIT" means, subject to Clause
9,(pound)13,000,000.
"REVOLVING LOAN" means, at any time, all Revolving Advances at that time.
"ROYAL CROWN" means Royal Crown Cola Corporation.
"ROYAL CROWN CONTRACT" means the agreement whose terms are set out in a
letter dated 28th January 1994 from Royal Crown to Cott and BCB
International Limited.
"SALE" means the sale of the whole of the issued share capital of the
Borrower to a single purchaser or to one or more purchasers as part of a
single transaction.
"SECURITY DOCUMENTS" means:
(a) the Debenture; and
(b) any guarantee and any document creating security executed and
delivered after the date of this Agreement as security for any of the
obligations and liabilities of the Borrower and the other Group
Companies under any Financing Document.
"SECURITY PERIOD" means the period starting on the date of this Agreement
and ending on the date on which all of the obligations and liabilities of
the Group Companies under each Financing Document are discharged in full,
and the Bank has no continuing obligation in relation to the Facilities.
"SHARE PURCHASE AGREEMENT" means the sale and purchase agreement dated on
or before the date of this Agreement relating to the sale and purchase of
the Target Shares and the Target Debt and made between the Vendors and the
Borrower.
"SSAP" together with a number means the statement of standard accounting
practice issued by the Institute of Chartered Accountants for application
in England and Wales and identified by reference to that number.
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22
"SUBORDINATED LOANS" means any non-interest bearing subordinated loans to
the extent permitted by the Cott Notes Documents and made by Cott (or any
other member of the Cott Group other than a Group Company) to the Borrower
on terms approved by the Bank in writing.
"SUBSIDIARY" means a subsidiary within the meaning of Section 736 of the
Act.
"TANGIBLE NET WORTH" means, on any date, the aggregate amount of the paid
up share capital of the Borrower as at that date including amounts standing
to the credit of the share premium account and any capital redemption
reserves plus or minus, as the case may be, the aggregate amount standing
in the Borrower's capital and revenue reserves (on a consolidated basis) as
at that date:
(a) adjusted as may be appropriate to take account of any variation in
that share capital account and share premium account since the date to
which such accounts shall have been made up;
(b) deducting any amounts attributable to any intangible asset included as
an asset in the Borrower's latest consolidated balance sheet excluding
amounts attributable to Acquisition Goodwill;
(c) excluding any capital accounts or reserves derived from any writing up
of book value of any assets of any Group Company above historic cost
less accumulated Depreciation at any time after Completion;
(d) adding back any diminution due to the writing off of Acquisition
Goodwill;
(e) excluding any minority interest arising on consolidation;
(f) including exchange gains and losses arising on consolidation accounted
for through reserves in accordance with SSAP 20;
(g) adding back any finance or issue costs arising from the transactions
contemplated by the Transaction Documents to which any Group Company
is a party, in accordance with FRS4, to the extent that they have been
written off against either the capital or revenue reserves; and
(h) adding or deducting, as the case may be, any credit or any debit
balance on the Borrower's consolidated profit and loss account (but
not to the extent that the same arises as a result of any
Extraordinary Items) attributable to the period in relation to which
the calculation falls to be made;
(i) deducting any amount set aside for Tax or deferred Tax;
(j) adding an amount equal to the cumulative interest charged from
completion to the Borrower's consolidated profit and loss account in
respect of the Deferred Consideration as at that date (before and
after payment of the Deferred Consideration); and
(k) including any amount equal to the principal amount of any Subordinated
Loans;
in each case, without double counting.
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23
"TARGET" means Hero Drinks Group (UK) Limited, a company incorporated under
the laws of England and Wales with registered number 340485.
"TARGET ASSETS" means the Assets (as defined in the Hive-Up Agreement).
"TARGET DEBT" means the Existing Group Loan Stock as defined in the Share
Purchase Agreement.
"TARGET SHARES" means all of the issued share capital of the Target.
"TARGET SUBORDINATED LOAN NOTES" means the notes issued by the Borrower to
Target and subordinated to the Bank.
"TAXES" includes all present and future taxes, charges, imposts, duties,
levies, deductions, withholdings or fees of any kind whatsoever, or any
amount payable on account of or as security for any of the foregoing, by
whomsoever on whomsoever and wherever imposed, levied, collected, withheld
or assessed, together with any penalties, additions, fines, surcharges or
interest relating thereto; and "TAX" and "TAXATION" shall be construed
accordingly.
"TERM ADVANCE" means the advance made or to be made to the Borrower under
the Term Loan Facility or, as the case may be, the outstanding principal
amount of that advance, and each advance into which a Term Advance is split
pursuant to Clause 7.3.4.
"TERM LOAN" means, at any time, the aggregate of all Term Advances
outstanding at that time.
"TERM LOAN COMMITMENT" means, in relation to the Bank, (pound)49,000,000.
"TERM LOAN FACILITY" means the term loan facility referred to in Clause
2.1.1(a).
"TOTAL DEBT COSTS" means, in relation to any period, all interest,
commissions, periodic fees and other financing charges payable (including
any premium payable in respect of interest rate protection agreements) by
the Group Companies during that period (including the interest element
payable under any Finance Lease) less any interest receivable in respect of
cash balances, less any sums receivable or plus any sums payable by the
Borrower under any interest rate protection agreement of whatever
description during that period and for the avoidance of doubt excluding (i)
any fees and commission paid in relation to the acquisition of the Target
Shares, the Target Debt and/or the Target Assets and (ii) any amounts
amortised on finance costs arising from the acquisition of the Target
Shares and/or the Target Assets in accordance with FRS4 and (iii) any
interest charged to the profit and loss account (but not paid in cash) in
respect of the Deferred Consideration.
"TOTAL FUNDING COSTS" means, in relation to any period, the aggregate of:
(a) Total Debt Costs for that period;
(b) all scheduled payments of Deferred Consideration falling due during
that period;
(c) all scheduled repayments of the Term Loan and all repayments and/or
prepayments of the Term Loan required to be made under Clause 8
falling due
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during that period (including in respect of the relevant period the
amount paid on 30th April 1999);
(d) in respect of the Financial Year ended 31st December 2000 only, the
(pound)10,000,000 prepayment made on 30th December 1999 which for this
purpose shall be treated as having been made on 10th January 2000; and
(e) the capital element of all rentals or, as the case may be, other
payments payable in that period under any Finance Lease entered into
by any Group Company.
"TRANSACTION DOCUMENTS" means, in relation to a Group Company, each of the
following documents to which it is a party: the Financing Documents, the
Group Trading Agreements and the Acquisition Documents.
"2005 INDENTURE" means the indenture dated as of 27 June 1995 executed by
Cott in respect of certain 9-3/8% senior notes due 2005.
"VALUATION" means the valuation report prepared by King Sturge & Co. dated
29th October 1997 in respect of the Properties numbered 1, 2, 3 and 4 in
Schedule 7 below and addressed to the Bank Parties.
"VAT" means value added tax as provided for in the Value Added Tax Xxx 0000
and legislation (or purported legislation and whether delegated or
otherwise) supplemental to that Act or in any primary or secondary
legislation promulgated by the European Community or any official body or
agency of the European Community, and any tax similar or equivalent to
value added tax imposed by any country other than the United Kingdom and
any similar or turnover Tax replacing or introduced in addition to any of
the same.
"VAT GROUP" means, in respect of a person, its "group" within the meaning
of section 43 of the Value Added Tax Xxx 0000.
"VENDOR COLLATERAL ACCOUNT" means the Borrower's account with the Bank
entitled "LTSB plc re Cott Beverages Ltd".
"VENDORS" means Xxxxxxx Xxxxx Limited and Hero AG.
"VENDORS' DISCLOSURE LETTER" has the meaning given to the term "Disclosure
Letter" in the Share Purchase Agreement.
"VIRGIN SUPPLY AGREEMENT" means the sourcing agreement made between Cott
and the Virgin Cola Company Limited dated 28th October 1994 under which the
Borrower is classified as a "Cott Related Party".
1.2 HEADINGS
The headings in this Agreement are for convenience only and shall be
ignored in construing this Agreement.
1.3 INTERPRETATION
1.3.1 In this Agreement (unless otherwise provided):
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25
(a) words importing the singular shall include the plural and vice versa;
(b) references to Clauses and Schedules are to be construed as references
to the clauses of, and schedules to, this Agreement;
(c) references to any Financing Document or any other document shall be
construed as references to that Financing Document or that other
document, as amended, varied, novated or supplemented, as the case may
be;
(d) references to any statute or statutory provision include any statute
or statutory provision which amends, extends, consolidates or replaces
the same, or which has been amended, extended, consolidated or
replaced by the same, and shall include any orders, regulations,
instruments or other subordinate legislation made under the relevant
statute;
(e) references to a document being "IN THE AGREED FORM" means that
document the form and content of which has been approved by the Bank;
(f) references to "ASSETS" shall include revenues and the right to
revenues and property and rights of every kind, present, future and
contingent and whether tangible or intangible (including uncalled
share capital);
(g) the words "INCLUDING" and "IN PARTICULAR" shall be construed as being
by way of illustration or emphasis only and shall not be construed as,
nor shall they take effect as, limiting the generality of any
foregoing words;
(h) the words "OTHER" and "OTHERWISE" shall not be construed ejusdem
generis with any foregoing words where a wider construction is
possible;
(i) references to a "PERSON" shall be construed so as to include that
person's assigns, transferees or successors in title and shall be
construed as including references to an individual, firm, partnership,
joint venture, company, corporation, unincorporated body of persons or
any state or any agency of a state;
(j) where there is a reference in this Agreement to any amount, limit or
threshold specified in Sterling, in ascertaining whether or not that
amount, limit or threshold has been attained, broken or achieved, as
the case may be, a non-Sterling amount shall be counted on the basis
of the equivalent in Sterling of that amount using the Bank's relevant
spot rate of exchange;
(k) accounting terms shall be construed so as to be consistent with GAAP;
and
(l) references to time are to London time.
1.3.2 For the purposes of Clause 7.2 (Margin Ratchet) and Clause 14.4
(financial undertakings) and the related definitions, the
(pound)10,000,000 paid by Cott to the Borrower on 30th December 1999
shall be deemed to have been received by the Borrower on 10th January
2000 or, if later, on the date the payment is applied by way of
subscription for fully paid up ordinary share capital of the Borrower
(but without prejudice to any Default which shall occur by virtue of
Clause 15.1(u) (New Capital Injection)).
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2. FACILITIES
2.1.1 Subject to the terms of this Agreement the Bank agrees to make the
following facilities available to the Borrower:
(a) a Sterling term loan facility in the maximum principal amount
of(pound)49,000,000;
(b) a Sterling revolving loan facility in the maximum principal amount
of(pound)13,000,000 incorporating an optional overdraft facility; and
(c) the Ancillary Facility in the maximum principal amount
of(pound)7,500,000.
2.1.2 Notwithstanding any other term of this Agreement:
(a) the Term Loan shall not, at any time, exceed the Term Loan Commitment;
and
(b) the aggregate of (i) all Revolving Advances and (ii) the Overdraft
Outstandings shall not, at any time, exceed the Revolving Credit
Commitment.
(c) the aggregate of all Ancillary Outstandings shall not, at any time,
exceed the Ancillary Limit.
3. PURPOSE
3.1 PURPOSE OF THE TERM LOAN FACILITY
The proceeds of the Term Loan Facility shall only be used to pay amounts
required to be paid by the Borrower in connection with the acquisition of
the Target namely:
(a) the consideration payable to the Vendors by the Borrower for the
Target Shares and the Target Debt purchased by it pursuant to the
Share Purchase Agreement; and
(b) the Acquisition Costs.
3.2 PURPOSE OF THE REVOLVING CREDIT FACILITY
3.2.1 The proceeds of Revolving Advances shall only be used:
(a) to fund the working capital requirements of the Borrower from time to
time (and, for the avoidance of doubt, not (i) to make prepayments of
the Term Loan, (ii) to finance the making of any loan to any Cott
Group Company or (iii) to finance the payment of any dividend or other
distribution in respect of the Borrower's share capital);
(b) to repay maturing Revolving Advances; and
(c) to enable the Borrower to comply with its obligations under any of
Clauses 15.2.2, 15.2.3 and 15.2.4 following demand by the Bank.
3.2.2 The Optional Overdraft Facility shall only be used for the purposes
specified in Clause 3.2.1(a).
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3.3 PURPOSE OF ANCILLARY FACILITY
The Ancillary Facility shall only be used for the purposes specified in
Clause 3.2.1(a) and, in the case of FFE Contracts, for the purpose of
hedging against foreign exchange rate exposure arising in the ordinary
course of trading by the Borrower.
3.4 UNDERTAKING BY THE BORROWER
The Borrower undertakes that it will only utilise the Facilities as
permitted by this Clause 3.
3.5 NO LIABILITY
The Bank shall not be concerned as to the use or application of the
proceeds of the Advances or the use or applications of amounts made
available under any Facility.
4. CONDITIONS PRECEDENT
4.1 CONDITIONS PRECEDENT
Notwithstanding any other term of this Agreement, the Bank shall not be
under any obligation to make the Facilities available to the Borrower
unless it has notified the Borrower that all the conditions set out in
Schedule 1 have been satisfied on or prior to 21st November 1997.
4.2 CONFIRMATION OF SATISFACTION
The Bank shall, at the request of the Borrower, certify whether or not any
one or more of the conditions set out in Schedule 1 have been satisfied or,
as the case may be, waived.
5. TERM LOAN FACILITY AND REVOLVING CREDIT FACILITY
5.1 DRAWDOWN OF TERM LOAN FACILITY
Subject to the other terms of this Agreement, the Term Loan Facility shall
be drawn down in one Term Advance of (pound)49,000,000 at Completion when
requested by the Borrower by means of a Drawdown Notice in accordance with
Clause 5.4.
5.2 UTILISATION OF REVOLVING CREDIT FACILITY
5.2.1 Subject to the other terms of this Agreement, Revolving Advances shall be
made to the Borrower at any time during the Revolving Credit Commitment
Period when requested by the Borrower by means of a Drawdown Notice in
accordance with Clause 5.4. At close of business on the last day of the
Revolving Credit Commitment Period the Revolving Credit Facility shall
cease to be available for utilisation.
5.2.2 No utilisation of the Revolving Credit Facility may be made unless the
Term Advance has been made.
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5.2.3 The following limitations apply to Revolving Advances:
(a) the Drawdown Date of a Revolving Advance shall be a Business Day
during the Revolving Credit Commitment Period;
(b) the principal amount of a Revolving Advance shall be:
(i) a minimum amount of(pound)250,000 and an integral multiple
of(pound)50,000; or
(ii) the amount of the Available Revolving Credit Facility;
(c) no Revolving Advance shall be made if the making of that Revolving
Advance would result in the aggregate of all Revolving Advances
exceeding the Revolving Credit Facility Limit; and
(d) no more than 5 Revolving Advances may be outstanding at any one time.
5.2.4 The Borrower shall ensure that for a period of at least 10 successive
days in each of its Financial Years there are no Revolving Advances and
no Overdraft Outstandings outstanding (on a net basis in relation to any
net facilities).
5.2.5 Without prejudice to Clause 15, if the Bank gives notice to the Borrower
at any time to cancel the Revolving Credit Facility pursuant to this
Clause 5.2.5, the Revolving Credit Facility Limit shall (except to the
extent the Bank specifies any smaller reductions and/or later dates in
writing (in which case such smaller reductions and/or later dates shall
apply)) be automatically reduced by the amount set out in Column 1 below
at 11.00 a.m. on the date set out opposite such amount in Column 2
below:-
Column 1 Column 2
-------- --------
(Amount of Reduction) (Date)
--------------------- ------
(pound)5,000,000 45th day after notice given to Borrower
(pound)5,000,000 90th day after notice given to Borrower
Amount of the Revolving Credit Facility Limit 120th day after notice given to Borrower
For the avoidance of doubt, Clause 9.1.2 shall apply in respect of any
such cancellation.
5.3 CONDITIONS TO EACH ADVANCE
5.3.1 Subject to Clause 5.3.2, the obligation of the Bank to make an Advance is
subject to the conditions that on the date on which the relevant Drawdown
Notice is given and on the relevant Drawdown Date:
(a) the representations and warranties in Clause 13 to be repeated on
those dates are correct and will be correct immediately after the
Advance is made; and
(b) no Default or Potential Default has occurred and is continuing or
would occur on the making of the Advance.
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5.3.2 In respect of a Revolving Advance to be made for the sole purpose of
repaying an outstanding Revolving Advance (or an amount of Overdraft
Outstanding) in a matching amount, the Revolving Advance shall be made,
notwithstanding the occurrence and continuation of a Default or a
Potential Default or any of the representations and warranties to be
repeated not being correct, unless the Bank shall have served a Default
Notice.
5.4 DRAWDOWN NOTICE
5.4.1 Whenever the Borrower wishes to draw down an Advance, it shall give a
duly completed Drawdown Notice to the Bank to be received not later than
11.00 a.m. on the first Business Day before that Drawdown Date.
5.4.2 A Drawdown Notice shall be irrevocable and the Borrower shall be obliged
to borrow in accordance with its terms.
6. THE OPTIONAL OVERDRAFT FACILITY AND THE ANCILLARY FACILITY
6.1 NATURE OF FACILITIES
6.1.1 The Optional Overdraft Facility forms part of the Revolving Credit
Facility and, subject to the terms of this Agreement, shall be available
for utilisation by the Borrower, provided that, without prejudice to the
continued operation of the Revolving Credit Facility, the Optional
Overdraft Facility may be terminated and cancelled by the Bank at any
time.
6.1.2 The Optional Overdraft Facility shall be made available by the Bank in a
maximum amount equal to the Optional Overdraft Limit. Prior to the
Optional Overdraft Facility being terminated, the Bank shall not transfer
or assign any of its Revolving Credit Commitment if the relevant transfer
or assignment would result in it ceasing to have a Revolving Credit
Commitment at least equal to the Optional Overdraft Limit.
6.1.3 The Ancillary Facility shall be subject to the terms of this Agreement
and a separate facility letter agreed between the Borrower and the Bank
which may be varied and amended from time to time.
6.1.4 The Ancillary Facility shall be made available by the Bank in a maximum
amount equal to the Ancillary Limit.
6.1.5 Each of the Optional Overdraft Facility and the Ancillary Facility shall
cease to be available on the Final Maturity Date for the Revolving Credit
Facility or such earlier date on which it is cancelled in accordance with
the terms of this Agreement.
6.1.6 The Borrower shall complete such mandate and other like documents in
respect of the Optional Overdraft Facility and the Ancillary Facility as
the Bank may reasonably require.
6.1.7 The Bank may specify sub-limits from time to time at its discretion on
the different types of accommodation available under the Ancillary
Facility.
6.2 UTILISATION OF OPTIONAL OVERDRAFT FACILITY
6.2.1 Subject to the terms of this Agreement, the Bank agrees to make the
Optional Overdraft Facility available on a revolving basis to the
Borrower to be utilised on any Business Day
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by way of overdraft on usual banking terms including a term that amounts
outstanding by way of overdraft are repayable on demand.
6.2.2 No utilisation of the Optional Overdraft Facility under Clause 6.2.1
shall be made if it would result in:
(a) the aggregate of (i) all Revolving Advances and (ii) the Overdraft
Outstandings exceeding the Revolving Credit Facility Limit;
(b) the Overdraft Outstandings exceeding the Optional Overdraft Limit;
or
(c) the Gross Overdraft Outstandings exceeding the Gross Optional
Overdraft Limit.
6.2.3 For the avoidance of doubt, the Bank may, without liability, return
cheques unpaid if the payment of those cheques would result in a breach
of Clause 6.2.2.
6.3 UTILISATION OF ANCILLARY FACILITY
6.3.1 Subject to the terms of this Agreement, the Bank agrees to make available
the Ancillary Facility on a revolving basis to the Borrower to be
utilised on any Business Day:
(a) by way of issue of Guarantees up to an aggregate maximum face
amount of(pound)1,000,000;
(b) by way of FFE Contracts;
(c) by way of such other facilities or financial accommodation as the
Bank and the Borrower may agree.
6.3.2 No utilisation of the Ancillary Facility under Clause 6.3.1 shall be made
if it would result in the Ancillary Outstandings exceeding the Ancillary
Limit.
6.3.3 For the avoidance of doubt, Interest Rate Protection Agreements shall not
be and shall not be deemed to be part of the Ancillary Facilities.
6.4 FFE CONTRACTS
6.4.1 An FFE Contract shall:
(a) be on the usual terms of the Bank;
(b) be of a duration of not more than 12 months;
(c) be on terms that the Bank shall have no obligation to make
payments under it at any time after the Final Maturity Date unless
the Bank (in its sole discretion and upon such terms as it
requires) agrees otherwise; and
(d) only be entered into on a Business Day.
6.4.2 All obligations and liabilities owing to the Bank under or in respect of
an FFE Contract shall be deemed to be obligations and liabilities owing
to the Bank under this Agreement.
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6.5 GUARANTEES
6.5.1 The Bank shall not be obliged to issue any Guarantee unless it has
approved the form of the proposed Guarantee.
6.5.2 No Guarantee shall be issued under which a claim could be made at a time
after the Final Maturity Date unless the Bank (in its sole discretion and
upon such terms as it requires) agrees otherwise.
6.5.3 Each Guarantee shall be denominated in Sterling and shall state on its
face the maximum amount payable under it and its expiry date.
6.5.4 A Guarantee shall only be issued by the Bank on a Business Day.
6.6 COUNTER INDEMNITY FROM THE BORROWER
6.6.1 The Borrower shall:
(a) indemnify the Bank and keep the Bank indemnified from and against
all actions, suits, proceedings, claims, demands, liabilities,
damages, costs, expenses, losses and charges in relation to or
arising out of any Guarantee issued on its behalf; and
(b) pay to the Bank on demand the amount of all payments made (whether
directly or by way of set-off, counterclaim or otherwise) and all
losses, costs and expenses suffered or incurred by the Bank under
or by reason of each such Guarantee.
6.6.2 The Bank is irrevocably authorised by the Borrower to comply with the
terms of any demand served or purporting to be served on the Bank
pursuant to any Guarantee without any reference to, or further authority
from, the Borrower and without any enquiry into the justification for
that demand or its validity. Any payment which the Bank shall make in
accordance or purporting to be in accordance with such a demand shall be
binding on the Borrower and be accepted by the Borrower as conclusive and
binding evidence that the Bank was liable to comply with the terms of
such demand and was liable to do so in the manner and for the amount in
which the Bank effected such compliance.
6.6.3 The liability of the Borrower under this Clause 6.6 shall not be
discharged, lessened or impaired by any time being given or by anything
being done or other circumstance whatsoever which, but for this
provision, would or might operate to exonerate or discharge the Borrower.
6.6.4 The indemnity contained in this Clause 6.6 shall constitute and be a
continuing security to the Bank and shall extend to each Guarantee as it
may be varied, modified, amended or extended.
6.7 INTEREST ON PAYMENTS
The Borrower shall pay interest on the amount of each payment, loss, cost
and expense made, suffered or incurred by the Bank under or by reason of
any Guarantee issued on its behalf from and including the date upon which
such payment, loss, cost or expense is made, suffered or incurred up to
and including the date upon which payment or reimbursement of such amount
is demanded from the Borrower. The amount of such
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interest shall be calculated in accordance with Clause 7.4. For the
avoidance of doubt, interest on sums demanded under Clause 6.6 shall also
accrue in accordance with Clause 7.4.
7. INTEREST
7.1 INTEREST RATE
Interest shall accrue on each Advance from and including the relevant
Drawdown Date to but excluding the date the Advance is repaid at the rate
determined by the Bank to be the aggregate of:
(a) the Margin;
(b) LIBOR; and
(c) the Mandatory Cost Rate.
7.2 MARGIN RATCHET
7.2.1 In respect of each Quarter beginning after 31st December 1999, the Margin
shall reduce or increase in accordance with the other provisions of this
Clause 7.2, provided that the Margin shall at no time be greater than
2.00 per cent. per annum or less than 1.25 per cent. per annum.
7.2.2 In this Clause 7.2, "RELEVANT FINANCIAL PERIOD" means, in relation to a
Quarter, the 12 month period ending on the Quarter Date falling
immediately before the beginning of that Quarter.
7.2.3 Subject to the other provisions of this Clause 7.2, in respect of a
Quarter, the Margin shall be 1.75 per cent. per annum if the ratio of
Debt: Post Restructuring PBIT for the Relevant Financial Period is less
than 3.25:1.
7.2.4 Subject to the other provisions of this Clause 7.2, in respect of a
Quarter, the Margin shall be 1.5 per cent. per annum if the ratio of
Debt: Post Restructuring PBIT for the Relevant Financial Period is less
than 2.75:1.
7.2.5 Subject to the other provisions of this Clause 7.2, in respect of a
Quarter, the Margin shall be 1.25 per cent. per annum if the ratio of
Debt: Post Restructuring PBIT for the Relevant Financial Period is less
than 2.50:1.
7.2.6 In relation to a Quarter, for the purpose of this Clause 7.2, any
reduction or increase in the Margin shall be determined on the day
immediately following receipt by the Bank of the Management Accounts for
the Accounting Period ending on or about the Quarter Date occurring at
the end of that Quarter. Any reduction or increase shall, subject to
Clause 7.2.8, take effect on the fifth Business Day following receipt by
the Bank of those Management Accounts. If the Borrower does not deliver
the relevant Management Accounts to the Bank in accordance with the terms
of Clause 14.1(b), the Margin shall, as from the date immediately
following the last date on which such Management Accounts should have
been delivered to the Bank pursuant to Clause 14.1(b) (other than where
such non-delivery is beyond the control of the Borrower) until the date
once such Management Accounts have been so delivered, be reinstated to
2.00 per cent. per annum.
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7.2.7 Where in respect of any Quarter, the Margin has been adjusted on the
basis of Management Accounts and the next Accounts delivered to the Bank
show that such adjustment should not have been made, the said adjustment
shall be cancelled on the next Interest Date to occur after delivery of
those Accounts to the Bank and the Borrower and the Bank shall promptly
make such payments as may be necessary to put themselves in the position
they would have been in if the correct adjustment had originally been
made as shown by reference to the Accounts.
7.2.8 Notwithstanding any other term of this Clause 7.2, if a Default has
occurred and is continuing, the Margin shall be 2.00 per cent. per annum
and any decrease which would otherwise have applied shall not take effect
unless and until such Default ceases to be continuing or is waived in
writing by the Bank.
7.2.9 Notwithstanding any other term of this Clause 7.2, the maximum reduction
in the Margin from one Quarter to the next Quarter shall be 0.25 per
cent. per annum.
7.2.10 For the avoidance of doubt, if in respect of any Quarter of the Borrower,
none of the conditions set out in Clause 7.2.3 to 7.2.6 (inclusive) are
satisfied in relation to the Relevant Financial Period, the Margin for
that Quarter shall be 2.00 per cent. per annum.
7.3 INTEREST PERIODS
7.3.1 Interest payable on each Advance shall be calculated by reference to
Interest Periods of 1, 3 or 6 months duration (or such other Interest
Period as the Bank, may allow) as selected by the Borrower in accordance
with this Clause 7.3 provided that each Interest Period ending on or
before 30th April 1998 shall be of one month's duration.
7.3.2 The Borrower shall select an Interest Period for a Revolving Advance in
the relevant Drawdown Notice. The Borrower may select an Interest Period
for a Term Advance in either the Drawdown Notice (in the case of the
first Interest Period for that Advance) or (in the case of any subsequent
Interest Period for that Advance) by notice received by the Bank no later
than 3 Business Days before the commencement of that Interest Period.
7.3.3 In respect of Term Advances, interest shall be calculated by reference to
successive Interest Periods. The first Interest Period for a Term Advance
shall begin on the Drawdown Date of that Advance. Each succeeding
Interest Period for that Advance shall begin on the Interest Date of the
previous Interest Period.
7.3.4 The Borrower may, by notice to the Bank at least 3 Business Days before
an Interest Date relating to a Term Advance, elect that that Term Advance
be split into two or more Term Advances of at least (pound)1,000,000 each
(and being multiples of (pound)500,000) or such lesser amount equal to
the amount of the Instalment falling due on the next Instalment Repayment
Date. Any such notice shall specify the Interest Periods applicable to
those Term Advances and shall take effect in accordance with its terms
from that Interest Date, provided that there shall not be more than 5
Term Advances outstanding at any one time.
7.3.5 Subject to the other terms of this Agreement, if the Interest Periods for
two or more Term Advances end on the same day those Term Advances shall
be deemed to be a single Term Advance from that day.
7.3.6 If the Borrower fails to select an Interest Period for an Advance in
accordance with Clause 7.3.2, that Interest Period shall, subject to the
other provisions of this Clause 7, be 3 months.
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7.3.7 If an Interest Period would otherwise end on a day which is not a
Business Day, that Interest Period shall instead end on the next Business
Day in the same calendar month (if there is one) or the preceding
Business Day (if there is not).
7.3.8 If an Interest Period begins on the last Business Day in a calendar month
or on a Business Day for which there is no numerically corresponding day
in the calendar month in which that Interest Period is to end, it shall
end on the last Business Day in that later calendar month.
7.3.9 In respect of Term Advances, the Borrower shall select such Interest
Periods to ensure that, on each Instalment Repayment Date, there are Term
Advances with an Interest Period ending on that Instalment Repayment Date
which are, in aggregate, at least equal to the Instalment due on that
Instalment Repayment Date.
7.3.10 If an Interest Period for an Advance would otherwise extend beyond the
Final Maturity Date, it shall be shortened so that it ends on the Final
Maturity Date.
7.4 DEFAULT INTEREST
7.4.1 If the Borrower fails to pay any amount payable under any Financing
Document on the due date, it shall pay default interest on the overdue
amount from the due date to the date of actual payment calculated by
reference to successive Interest Periods (each of such duration as the
Bank may select and the first beginning on the relevant due date) at the
rate per annum being the aggregate of (a) 2 per cent. per annum, (b) the
Margin, (c) LIBOR and (d) the Mandatory Cost Rate.
7.4.2 So long as the overdue amount remains unpaid, the default interest rate
shall be recalculated in accordance with the provisions of this Clause
7.4 on the last day of each such Interest Period and any unpaid interest
shall be compounded at the end of each Interest Period.
7.5 INTEREST, COMMISSION AND FEES UNDER THE OPTIONAL OVERDRAFT FACILITY AND
ANCILLARY FACILITY
7.5.1 Interest on all amounts outstanding by way of overdraft under the
Optional Overdraft Facility shall accrue at the rate per annum which is
the aggregate of:
(a) the Margin; and
(b) the most recently published base rate of the Bank.
7.5.2 Interest under Clause 7.5.1 on amounts outstanding by way of overdraft
shall be paid by the Borrower to the Bank on the Bank's usual quarterly
charging days and the Final Maturity Date.
7.5.3 In respect of each Guarantee, the Borrower shall pay a commission to the
Bank on the Guaranteed Amount of that Guarantee at a rate per annum equal
to the Margin. Such commission shall be paid in advance in accordance
with the Bank's usual practice.
7.5.4 In respect of each FFE Contract, the Borrower shall pay fees and
commissions to the Bank in accordance with the Bank's usual charging
scales as notified to the Borrower from time to time for entering into
forward foreign exchange contracts.
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7.5.5 The Bank may debit all interest, fees and commissions payable by the
Borrower under this Clause 7.5 to any account held by the Borrower with
the Bank.
7.6 CALCULATION AND PAYMENT OF INTEREST
7.6.1 At the beginning of each Interest Period, the Bank shall notify the
Borrower of the duration of the Interest Period and the rate and amount
of interest payable for the Interest Period (but in the case of any
default interest calculated under Clause 7.4, any such notification need
not be made more frequently than weekly).
7.6.2 Interest due from the Borrower under this Agreement shall:
(a) accrue from day to day at the rate calculated under this Clause 7;
(b) except as otherwise provided in this Agreement, be paid by the
Borrower to the Bank in arrear on the last day of each Interest
Period, provided that for any Interest Period which is for longer
than 3 months, the Borrower shall pay interest 3 monthly in arrear
during that Interest Period;
(c) be calculated on the basis of the actual number of days elapsed
and a 365 day year; and
(d) be payable both before and after judgment.
8. REPAYMENT AND PREPAYMENT
8.1 REPAYMENT OF TERM LOAN
8.1.1 The Borrower shall repay the Term Loan by payment to the Bank on or up to
45 days before each date set out in Column 1 of Part I of Schedule 5
(each date being an "INSTALMENT REPAYMENT DATE") of the amount (each an
"INSTALMENT") set out in Column 2 of Part I of Schedule 5 opposite the
relevant Instalment Repayment Date (so that the Term Loan is repaid in
full on or before the Final Maturity Date).
8.1.2 The Borrower shall make additional repayments ("PERFORMANCE REPAYMENTS")
of the Term Loan on the dates and subject to the conditions specified in
Part II of Schedule 5 provided that if the relevant date is not an
Interest Date of the Term Loan the Borrower shall procure that:-
(a) the relevant Performance Repayment is made on the next Interest
Date relating to the Term Loan and to the extent that the
Performance Repayment exceeds (after repayment of any Instalment
which is repayable on such Interest Date) the amount of the Term
Advance(s) whose Interest Date(s) expire on that date, the next
succeeding Interest Date(s)); and
(b) pending any such Performance Repayment, an amount equal to the
required Performance Repayment is credited to a bank account
("Proceeds Account") held with the Bank.
8.1.3 Each Performance Repayment shall be applied against unpaid Instalments in
inverse order to maturity and the Borrower authorises the Bank to apply
relevant amounts standing to the
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credit of the Proceeds Account in fulfilment of the Borrower's
obligations under Clause 8.1.2.
8.1.4 The Borrower shall on or before 31st May 1999 prepay all or part of one
or more Term Advances, equal in aggregate to:
(a) in the event that the Required Disposal takes place on or before
31st May 1999, the sum of (pound)3,500,000 minus the amount (if a
lesser figure) of Disposal Proceeds in respect of the Required
Disposal applied in prepayment (or credited to a Proceeds Account
in accordance with Clause 8.3.1(b)) of the Term Loan pursuant to
Clause 8.3.1 on or before 31st May 1999; or
(b) in the event that the Required Disposal does not take place on or
before 31st May 1999, (pound)2,500,000,
where "REQUIRED DISPOSAL" means a sale of the Property numbered 1 in
Schedule 7.
8.1.5 The Borrower shall immediately on receipt pay 50% of the net proceeds of
its legal claim relating to the benzene contamination which occurred in
1998 to the Bank in prepayment of the Term Loan and the balance shall be
paid into the Borrower's current account with the Bank.
8.1.6 Each prepayment pursuant to Clause 8.1.4 shall be applied against unpaid
Instalments in inverse order to maturity and each prepayment pursuant to
Clause 8.1.5 shall be applied against unpaid Instalments pro rata.
8.2 REPAYMENT OF REVOLVING ADVANCES
8.2.1 Subject to Clause 8.2.3, each Revolving Advance shall be repaid in full
on the Interest Date of the Interest Period relating to that Revolving
Advance.
8.2.2 Subject to the terms of this Agreement, any amounts repaid under Clause
8.2.1 may be re-borrowed.
8.2.3 If all or part of an existing Revolving Advance made to the Borrower is
to be repaid from the proceeds of all or part of a new Revolving Advance
to be made to the Borrower, then, as between the Bank and the Borrower,
the amount to be repaid by the Borrower shall be set off against the
amount to be advanced by the Bank in relation to the new Revolving
Advance and the party to whom the smaller amount is to be paid shall pay
to the other party a sum equal to the difference between the two amounts.
8.2.4 Subject to Clauses 8, 10 and 11 the Borrower may not prepay any Revolving
Advance before the end of its Interest Period.
8.3 MANDATORY PREPAYMENT OF DISPOSAL PROCEEDS
8.3.1 The Borrower shall procure that:
(a) the Disposal Proceeds of any Disposal (other than those set out in
Clause 14.3(b)) made by a Group Company are applied in prepayment
of the Term Loan on the next Interest Date relating to the Term
Loan (and to the extent that the Disposal Proceeds exceed (after
repayment of any Instalment which is
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repayable on such Interest Date) the amount of the Term Advance(s)
whose Interest Date(s) expire on that date, the next succeeding
Interest Date(s)); and
(b) pending any such prepayment, the relevant Disposal Proceeds are
credited to the Proceeds Account.
8.3.2 The Borrower authorises the Bank to apply relevant amounts standing to
the credit of the Proceeds Account in fulfilment of the Borrower's
obligations under Clause 8.3.1(a).
8.4 MANDATORY PREPAYMENT OF EXTRAORDINARY PROCEEDS
The Borrower shall procure that:
(a) all Extraordinary Proceeds of Group Companies are applied in
repayment of the Term Loan on each Interest Date for a Term
Advance immediately following each date on which the relevant
Extraordinary Proceeds are received by a Group Company (and to the
extent that the Extraordinary Proceeds exceed (after repayment of
any Instalment which is repayable on such Interest Date) the
amount of the Term Advance(s) whose Interest Date(s) expire on
that date, the next succeeding Interest Date(s)) provided that,
for the purposes of this Clause 8.4 no account shall be taken,
during any Financial Year of the Borrower, of Extraordinary
Proceeds received by the Borrower in that Financial Year which do
not exceed(pound)50,000; and
(b) pending any such prepayment, the relevant Extraordinary Proceeds
are credited to a bank account (an "EXTRAORDINARY PROCEEDS
ACCOUNT") held with the Bank.
8.5 MANDATORY PREPAYMENT ON CHANGE OF CONTROL, SALE OR LISTING
8.5.1 Notwithstanding Clauses 8.1 and 8.2, if so required by the Bank, on any
date a Sale or a Listing occurs or the date falling 30 days after any
Change of Control occurs (each a "PREPAYMENT DATE"):
(a) the Term Loan shall be repaid in full;
(b) all Revolving Advances shall be repaid in full; and
(c) any amount outstanding by way of overdraft under the Optional
Overdraft Facility shall be repaid in full; and
(d) the Bank's obligations under this Agreement shall be terminated
and its Commitments shall be cancelled.
8.5.2 On a Prepayment Date, the Borrower shall in respect of each Guarantee
issued on its behalf:
(a) use its reasonable endeavours to procure the release of the Bank
from each such Guarantee; and
(b) without prejudice to paragraph (a) above, pay to the credit of
such account as the Bank shall stipulate an amount equal to the
Guaranteed Amount of that
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Guarantee and charge such account in favour of the Bank in such
manner and on such terms as the Bank may stipulate.
8.5.3 On a Prepayment Date, each outstanding FFE Contract shall, if the Bank so
specifies, be terminated and closed out. Upon such termination and
close-out, the Bank shall determine in good faith the applicable closing
gain or loss payable by or to it for the outstanding FFE Contracts,
calculated by reference to the netting of the respective amounts in each
currency which the Bank is contracted to deliver and receive under all
such FFE Contracts. Any amount payable to the Bank or to the Borrower in
respect of the FFE Contracts pursuant to this Clause 8.5.3 shall, subject
to all rights of set-off, be immediately due and payable upon such
termination and close-out.
8.5.4 The Borrower shall give the Bank at least 30 days' prior notice of the
date upon which a Sale or Listing is proposed to occur and shall notify
the Bank as soon as the Borrower becomes aware that a Change of Control
is proposed to occur.
8.5.5 Any prepayment shall be made together with accrued interest on the amount
prepaid and any amounts payable under Clause 22.1.
8.6 VOLUNTARY PREPAYMENT OF TERM LOAN
8.6.1 The Borrower may, by giving the Bank not less than 5 Business Days' prior
written notice, prepay the whole or part (but if in part, in a minimum
amount of (pound)1,000,000 and an integral multiple of (pound)500,000) of
any Term Advance at any time, but subject always to Clause 22.
8.6.2 Any notice of prepayment shall be irrevocable, shall specify the date on
which the prepayment is to be made and the amount of the prepayment, and
shall oblige the Borrower to make that prepayment.
8.6.3 Any prepayment shall be made together with accrued interest on the amount
prepaid and any amounts payable under Clause 22.1.
8.7 NO RE-BORROWING OF TERM LOAN
Any amount repaid or prepaid in relation to the Term Loan may not be
re-borrowed and shall reduce rateably the Bank's Term Loan Commitment.
8.8 APPLICATION OF PREPAYMENTS
Each prepayment of the Term Loan under this Clause 8 shall be applied
against the unpaid Instalments pro rata (other than repayment of an
Instalment made up to 45 days before the relevant Instalment Repayment
Date).
9. CANCELLATION OF REVOLVING CREDIT FACILITY AND ANCILLARY FACILITY
9.1 CANCELLATION OF REVOLVING CREDIT FACILITY
9.1.1 The Borrower may, by giving the Bank not less than 5 Business Days' prior
written notice, cancel all or part of the Available Revolving Credit
Facility, including any unutilised part
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of the Optional Overdraft Facility (but if in part, in a minimum amount
of (pound)1,000,000 and an integral multiple of (pound)500,000).
9.1.2 The Borrower may not utilise any part of the Revolving Credit Facility
which has been cancelled. Any cancellation of the Revolving Credit
Facility shall reduce the Bank's Revolving Credit Commitment rateably and
shall reduce the Revolving Credit Facility Limit by the aggregate amount
so cancelled. Any cancellation of the Optional Overdraft Facility shall
reduce the Optional Overdraft Limit by the aggregate amount so cancelled.
Any amount cancelled may not be reinstated.
9.2 CANCELLATION OF ANCILLARY FACILITY
The Borrower may, by giving the Bank not less than 5 Business Days' prior
written notice, cancel all or part of the Available Ancillary Facility
and the Ancillary Limit shall be reduced accordingly. Any amount
cancelled may not be reinstated.
9.3 NOTICE
Any notice of cancellation shall be irrevocable and shall specify the
date on which the cancellation shall take effect and the amount of the
cancellation.
9.4 LIMITATION
The Borrower may not cancel all or part of the Revolving Credit Facility
or the Ancillary Facility except as expressly provided in this Agreement.
10. CHANGES IN CIRCUMSTANCES
10.1 ILLEGALITY
10.1.1 If it is or becomes illegal for the Bank to maintain all or part of its
Commitment in all or any part of the Facilities, then:
(a) the Bank shall notify the Borrower; and
(b) (i) the Commitment of the Bank shall be cancelled immediately;
and
(ii) the Borrower shall prepay to the Bank all Advances
(together with accrued interest on the amount prepaid and
all other amounts owing to that Bank under this Agreement)
within 5 Business Days of demand by the Bank (or, if
permitted by the relevant law, on the last day of the
Interest Period of the relevant Advances).
Any such prepayment under paragraph (ii) above shall be subject to
Clause 22.
10.1.2 If it is or becomes illegal for the Bank to issue or leave outstanding
any Guarantee, the Ancillary Facility shall cease to be available for the
issue of Guarantees and the Borrower shall use their best endeavours to
procure the release of each Guarantee outstanding at such time.
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10.2 INCREASED COSTS
10.2.1 If, after the date of this Agreement, a Change occurs which causes an
Increased Cost (as defined in Clause 10.2.3) to the Bank (or any company
of which the Bank is a Subsidiary) then the Borrower shall pay (as
additional interest) to the Bank within 5 Business Days of demand all
amounts which the Bank certifies to be necessary to compensate it (or any
company of which that Bank is a Subsidiary) for the Increased Cost.
10.2.2 Any demand made under Clause 10.2.1 shall set out in reasonable detail so
far as is practicable the basis of computation of the Increased Cost.
10.2.3 In this Clause 10.2:
"INCREASED COST" means any cost to, or reduction in the amount payable
to, or reduction in the return on capital or regulatory capital achieved
by, the Bank (or any company of which the Bank is a Subsidiary) to the
extent that it arises, directly or indirectly, as a result of the Change
and is attributable to the Commitment of the Bank or the funding of any
Advance including:
(a) any Tax Liability (other than Tax on Overall Net Income) incurred
by the Bank;
(b) any changes in the basis or timing of Taxation of the Bank in
relation to its Commitment or Participation in the Facilities or
to the funding of any Advance;
(c) the cost to the Bank (or any company of which the Bank is a
Subsidiary) of complying with, or the reduction in the amount
payable to or reduction in the return on capital or regulatory
capital achieved by the Bank (or any company of which the Bank is
a Subsidiary) as a result of complying with, any capital adequacy
or similar requirements howsoever arising, including as a result
of an increase in the amount of capital to be allocated to any
Facility or of a change to the weighting of the Bank's Commitment;
and
(d) the cost to the Bank of complying with any reserve, cash ratio,
special deposit or liquidity requirements (or any other similar
requirements).
"TAX LIABILITY" means, in respect of any person:
(a) any liability or any increase in the liability of that person to
make any payment of or in respect of Tax;
(b) the loss of any relief, allowance, deduction or credit in respect
of Tax which would otherwise have been available to that person;
(c) the setting off against income, profits or gains or against any
Tax liability of any relief, allowance, deduction or credit in
respect of Tax which would otherwise have been available to that
person; and
(d) the loss or setting off against any Tax liability of a right to
repayment of Tax which would otherwise have been available to that
person.
For the purposes of this definition of "Tax Liability", any question of
whether or not any relief, allowance, deduction, credit or right to
repayment of Tax has been lost or set off,
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and if so, the date on which that loss or set-off took place, shall be
conclusively determined by the relevant person's auditors.
"TAX ON OVERALL NET INCOME" means, in relation to the Bank, Tax (other
than Tax deducted or withheld from any payment) imposed on the net
profits of the Bank by the jurisdiction in which its Lending Office or
its head office is situated.
10.2.4 The Borrower shall not be obliged to make a payment in respect of an
Increased Cost under this Clause 10.2 if and to the extent that the
Increased Cost has been compensated for by the payment of Mandatory Cost
Rate or the operation of Clause 11.8 or would have been so compensated
but for the operation of Clause 11.8.3.
10.2.5 If the Borrower is required to pay any amount to the Bank under this
Clause 10.2, then, without prejudice to that obligation and so long as
the circumstances giving rise to the relevant Increased Cost are
continuing and subject to the Borrower giving the Bank not less than 5
Business Days' prior written notice (which shall be irrevocable), the
Borrower may prepay all, but not part, of the Bank's Commitment together
with accrued interest on the amount prepaid. Any such prepayment shall be
subject to Clause 22.1. On any such prepayment the Commitment of the Bank
shall be automatically cancelled.
10.3 MARKET DISRUPTION
10.3.1 If, in relation to an Advance and a particular Interest Period the Bank
determines that, because of circumstances affecting the London interbank
market generally, reasonable and adequate means do not exist for
ascertaining LIBOR for that Advance for that Interest Period the Bank
shall promptly notify the Borrower of that event (such notice being a
"MARKET DISRUPTION NOTICE").
10.3.2 If a market disruption notice applies to a proposed Advance, that Advance
shall not be made. Instead, the Bank and the Borrower shall immediately
enter into negotiations for a period of not more than 30 days with a view
to agreeing a substitute basis for calculating the interest rate for the
Advance or for funding the Advance. Any substitute basis agreed by the
Bank and the Borrower shall take effect in accordance with its terms and
be binding on all the Parties.
10.3.3 If a market disruption notice applies to an outstanding Term Advance,
then:
(a) the Bank and the Borrower shall immediately enter into
negotiations for a period of not more that 30 days with a view to
agreeing a substitute basis for calculating the rate of interest
for the Advance or for funding the Advance;
(b) any substitute basis agreed under Clause 10.3.3(a) by the Bank and
the Borrower shall take effect in accordance with its terms and be
binding on all the Parties;
(c) if no substitute basis is agreed under Clause 10.3.3(a), then,
subject to Clause 10.3.4, the Bank shall certify before the last
day of the Interest Period to which the market disruption notice
relates a substitute basis for maintaining the Advance which shall
reflect the cost to the Bank of funding the Advance from whatever
sources it selects plus the Margin and Mandatory Cost Rate; and
(d) each substitute basis so certified shall be binding on the
Borrower and the Bank and treated as part of this Agreement.
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10.3.4 If no substitute basis is agreed under Clause 10.3.3(a), then, so long as
the circumstances giving rise to the market disruption notice continue
and subject to the Borrower giving the Bank not less than 5 Business
Days' prior written notice (which shall be irrevocable), the Borrower may
prepay the Advance to which the market disruption notice applies together
with accrued interest on the amount prepaid. Any such prepayment shall be
subject to Clause 22.
10.4 MITIGATION
10.4.1 If any circumstances arise in respect of the Bank which would, or upon
the giving of notice would, result in the operation of Clause 10.1, 10.2,
10.3 or 11.8 to the detriment of the Borrower, then the Bank shall:
(a) promptly upon becoming aware of those circumstances and their
results, notify the Borrower; and
(b) in consultation with the Borrower, take all such steps as it
determines are reasonably open to it to mitigate the effects of
those circumstances (including consulting with the Borrower with a
view to transferring some or all of its rights and obligations
under this Agreement to another bank or other financial
institution acceptable to the Borrower) in a manner which will
avoid the circumstances in question and on terms acceptable to the
Borrower and the Bank,
provided that the Bank shall not be obliged to take any steps which in
its opinion would or might have an adverse effect on its business or
financial condition or the management of its Tax affairs or cause it to
incur any material costs or expenses.
10.4.2 Nothing in this Clause 10.4 shall limit, reduce, affect or otherwise
qualify the rights of the Bank or the obligations of the Borrower under
Clauses 10.1, 10.2, 10.3 and 11.8.
10.5 CERTIFICATES
The certificate or notification of the Bank as to any of the matters
referred to in this Clause 10 shall be in reasonable detail and shall be
conclusive and binding on the Borrower except for any manifest error.
11. PAYMENTS
11.1 PLACE AND TIME
All payments to be made by the Borrower in relation to this Agreement
shall be made to the Bank's account (number 0000000) at Treasury
Division, Xxxxxxxx Xxxxx, XX Xxx 000, 00 Xxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX
(sort code 30-15-57) quoting reference "Loans Admin re: Cott Beverages
Ltd" or such other account at such office or bank in London as the Bank
may notify the Borrower for this purpose, provided that all payments to
be made by the Borrower to the Bank in relation to the Optional Overdraft
Facility or the Ancillary Facility shall be made in accordance with usual
procedures for the operation of the Optional Overdraft Facility or, as
the case may be, the Ancillary Facility.
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11.2 FUNDS
All payments to the Bank under this Agreement shall be made for value on
the due date in freely transferable and readily available funds.
11.3 BUSINESS DAYS
If a payment under this Agreement is due on a day which is not a Business
Day, the due date for that payment shall instead be the next Business Day
in the same calendar month (if there is one) or the preceding Business
Day (if there is not).
11.4 CURRENCY
All payments relating to costs, losses, expenses or Taxes shall be made
in the currency in which the relative costs, losses, expenses or Taxes
were incurred. Any other amount payable under this Agreement shall,
except as otherwise provided, be made in Sterling.
11.5 ACCOUNTS AS EVIDENCE
The Bank shall maintain in accordance with its usual practice an account
which shall, as between the Borrower and the Bank, be prima facie
evidence of the amounts from time to time advanced by, owing to, paid and
repaid to the Bank under this Agreement.
11.6 PARTIAL PAYMENTS
11.6.1 If the Bank receives a payment insufficient to discharge all the amounts
then due and payable by the Borrower under this Agreement, the Bank shall
apply that payment towards the obligations of the Borrower in the
following order:
(a) first, in or towards payment pro rata of any accrued interest due
by the Borrower but unpaid under this Agreement;
(b) second, in or towards payment pro rata of any principal due by the
Borrower but unpaid under this Agreement; and
(c) third, in or towards payment pro rata of any other sum due by the
Borrower but unpaid under the Financing Documents.
11.6.2 Clauses 11.6.1 shall override any appropriation made by the Borrower.
11.7 SET-OFF AND COUNTERCLAIM
All payments by the Borrower under this Agreement shall be made without
set-off or counterclaim.
11.8 GROSSING-UP
11.8.1 Subject to Clause 11.8.2, all sums payable to the Bank pursuant to or in
connection with any Financing Document shall be paid in full free and
clear of all deductions or withholdings whatsoever except only as may be
required by law.
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11.8.2 If any deduction or withholding is required by law in respect of any
payment due from the Borrower to the Bank pursuant to or in connection
with any Financing Document, the Borrower shall:
(a) ensure or procure that the deduction or withholding is made and
that it does not exceed the minimum legal requirement therefor;
(b) pay, or procure the payment of, the full amount deducted or
withheld to the relevant Taxation or other authority in accordance
with the applicable law;
(c) increase the payment in respect of which the deduction or
withholding is required so that the net amount received by the
payee (which expression when used in this Clause 11.8.2 shall mean
the Bank) after the deduction or withholding (and after taking
account of any further deduction or withholding which is required
to be made as a consequence of the increase) shall be equal to the
amount which the payee would have been entitled to receive in the
absence of any requirement to make any deduction or withholding;
and
(d) promptly deliver or procure the delivery to the relative payee of
receipts evidencing each deduction or withholding which has been
made.
11.8.3 The Borrower shall not be required to pay an additional amount under this
Clause 11.8 if the payment in respect of which the deduction or
withholding is required is a payment of interest on an Advance and:
(a) at the time that Advance was made, the Bank was not a Qualifying
Bank otherwise than as a consequence of a Change occurring after
the date of this Agreement (and the obligation to deduct or
withhold would not have arisen if that Advance had been made by a
Qualifying Bank); or
(b) at the time when the interest is paid, the Bank is not
beneficially entitled to it or, being beneficially entitled to it,
the Bank is not within the charge to United Kingdom corporation
tax as respects it otherwise than as a consequence of a Change
occurring after the date of this Agreement (and the obligation to
deduct or withhold would not have arisen if the Bank had been
beneficially entitled to the interest and had been within the
charge to United Kingdom corporation tax as respects it).
11.8.4 If the Bank determines, in its absolute discretion, that it has received,
realised, utilised and retained a Tax benefit by reason of any deduction
or withholding in respect of which the Borrower has made an increased
payment under this Clause 11.8, the Bank shall pay to the Borrower (to
the extent that that Bank can do so without prejudicing the amount of the
benefit or repayment and the right of the Bank to obtain any other
benefit, relief or allowance which may be available to it) such amount,
if any, as the Bank, in its absolute discretion shall determine, will
leave the Bank in no worse position than it would have been in if the
deduction or withholding had not been required, provided that:
(a) the Bank shall have an absolute discretion as to the time at which
and the order and manner in which it realises or utilises any Tax
benefit and shall not be obliged to arrange its business or its
Tax affairs in any particular way in order to be eligible for any
credit or refund or similar benefit;
(b) the Bank shall not be obliged to disclose any information
regarding its business, Tax affairs or Tax computations;
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(c) if the Bank has made a payment to the Borrower pursuant to this
Clause 11.8.4 on account of any Tax benefit and it subsequently
transpires that the Bank did not receive that Tax benefit, or
received a lesser Tax benefit, the Borrower shall, on demand, pay
to the Bank such sum as the Bank may determine as being necessary
to restore its after-tax position to that which it would have been
had no adjustment under this Clause 11.8.4 been made. Any sums
payable by the Borrower to the Bank under this Clause 11.8.4 shall
be subject to Clause 17.6.
11.8.5 The Bank shall not be obliged to make any payment under Clause 11.8.4 if,
by doing so, it would contravene the terms of any applicable law or any
notice, direction or requirement of any governmental or regulatory
authority (whether or not having the force of law).
11.8.6 If the Borrower is required to make an increased payment for the account
of the Bank under Clause 11.8.3, then, without prejudice to that
obligation and so long as such requirement exists and subject to the
Borrower giving the Bank not less than 5 Business Days' prior written
notice (which shall be irrevocable), the Borrower may prepay all, but not
part, of the Advances together with accrued interest on the amount
prepaid. Any such prepayment shall be subject to Clause 22 (Indemnities).
On any such prepayment the Commitment of the Bank shall be automatically
cancelled.
12. SECURITY
12.1 SECURITY DOCUMENTS
The obligations and liabilities of the Borrower to the Bank under the
Financing Documents shall be secured by the interests and rights granted
in favour of the Bank under the Security Documents.
12.2 INTEREST RATE PROTECTION AGREEMENTS
All obligations and liabilities of the Borrower to the Bank under or in
connection with any Interest Rate Protection Agreement shall be treated,
for all purposes (other than Clause 11.7), as obligations and liabilities
incurred under this Agreement and, for the avoidance of doubt, the
Borrower's obligations and liabilities under any Interest Rate Protection
Agreement shall be secured obligations and liabilities under the
Debenture ranking pari passu with the obligations of the Borrower under
this Agreement.
12.3 RELEASE OF SECURITY ON DISPOSALS
In respect of any Disposal made by a Group Company which falls within
paragraphs (i) to (v) of Clause 14.3(b) the Bank shall on the completion
of that Disposal release, at the cost and expense of the Borrower, from
the Security Documents, the assets which are the subject of that
Disposal.
12.4 VENDOR COLLATERAL ACCOUNT
The Bank shall on or before 31 January 2000 and provided that no Default
or Potential Default has then occurred and is continuing release from the
Vendor Collateral Account to the Borrower's current account with the Bank
any amounts standing to the credit of the Vendor Collateral Account and
such account shall thereupon be closed.
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13. REPRESENTATIONS AND WARRANTIES
13.1 REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Bank that:
(a) STATUS: each Group Company is a limited company duly incorporated
under the laws of England and Wales, and it possesses the capacity
to xxx and be sued in its own name and has the power to carry on
its business and to own its property and other assets;
(b) POWERS AND AUTHORITY: each Group Company has power to execute,
deliver and perform its obligations under the Transaction
Documents to which it is party and to carry out the transactions
contemplated by those documents and all necessary corporate,
shareholder and other action has been or will be taken to
authorise the execution, delivery and performance of the same;
(c) BINDING OBLIGATIONS: subject to the Reservations, the obligations
of each Group Company under the Transaction Documents to which it
is party constitute its legal, valid, binding and enforceable
obligations;
(d) CONTRAVENTIONS: the execution, delivery and performance by each
Group Company of the Transaction Documents to which it is party
does not:
(i) contravene any applicable law or regulation or any order of
any governmental or other official authority, body or
agency or any judgment, order or decree of any court having
jurisdiction over it;
(ii) conflict with, or result in any breach of any of the terms
of, or constitute a default under, (x) any agreement or
other instrument to which it is a party or any licence or
other authorisation to which it is subject or by which it
or any of its property is bound or (y) any Cott Notes
Document; or
(iii) contravene or conflict with the provisions of its
memorandum and articles of association;
(e) INSOLVENCY: no Group Company has taken any action nor have any
steps been taken or legal proceedings been started or threatened
against it for winding-up, dissolution or re-organisation, the
enforcement of any Encumbrance over its assets or for the
appointment of a receiver, administrative receiver, or
administrator, trustee or similar officer of it or of any of its
assets;
(f) NO DEFAULT: no Group Company is (nor would be with any of the
giving of notice, the lapse of time, the determination of
materiality, or the satisfaction of any other condition) in breach
of or in default under any agreement to which it is a party or
which is binding on it or any of its assets;
(g) LITIGATION: no action, litigation, arbitration or administrative
proceeding has been commenced, or, to the best of the Borrower's
information, knowledge and belief, is pending or threatened,
against any Group Company which, if decided
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adversely, would result in an award or judgment being made against
the relevant Group Company for an amount in excess of
(pound)250,000 nor is there subsisting any unsatisfied judgment or
award given against any of them by any court, arbitrator or other
body;
(h) ACCOUNTS:
(i) the Original Accounts and each of the latest Accounts of
the Group Companies required to be delivered under Clause
14.1(a) is prepared in accordance with GAAP and gives a
true and fair view of the financial position of the
relevant company as at the date to which they were prepared
and for the Financial Year of that company then ended; and
(ii) each of the latest set of Management Accounts required to
be delivered under Clause 14.1(b) shows with reasonable
accuracy the financial position of each of the Group
Companies during the period to which it relates;
(i) ENCUMBRANCES: no Encumbrance other than a Permitted Encumbrance
exists over all or any part of the assets of any Group Company;
(j) NO ENCUMBRANCES CREATED: the execution of the Transaction
Documents by the Borrower and the exercise of each of its rights
and the performance of each of its obligations under the
Transaction Documents will not result in the creation of, or any
obligation to create, any Encumbrance over or in respect of any of
its assets;
(k) AUTHORISATIONS: other than registrations at the Land Registry, the
giving of notice in respect of any contracts being assigned, the
stamping of the Acquisition Documents and the filing of the
statutory declarations referred to in paragraph 1(d) in Schedule
1, all authorisations, approvals, licences, consents, filings,
registrations, payment of duties or taxes and notarisations
required:
(i) for the conduct of the business, trade and ordinary
activities of each Group Company;
(ii) for the performance and discharge of the obligations of the
Group Companies under the Transaction Documents; and
(iii) in connection with the execution, delivery, validity,
enforceability or admissibility in evidence of the
Transaction Documents,
are in full force and effect;
(l) TAXES: each Group Company has complied in all material respects
with all Taxation laws in all jurisdictions in which it is subject
to Taxation and has paid all Taxes due and payable by it and no
claims are being asserted against it in respect of Taxes except
for assessments in relation to the ordinary course of its business
or claims contested in good faith and in respect of which adequate
provision has been made and disclosed in the latest Accounts or
other information delivered to the Bank under this Agreement;
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(m) INFORMATION PACKAGE: to the best of the Borrower's information,
knowledge and belief:
(i) the factual information contained in the Information
Package was, at the date of the relevant report or
document, true and accurate in all material respects and
not misleading in any material respect, there are no other
facts the omission of which would make any fact or
statement in the Information Package misleading in any
material respect and nothing has occurred which would
render any fact or statement in the Information Package
untrue or misleading in any material respect; and
(ii) all estimates, forecasts and projections contained or
referred to in the Information Package, and all assumptions
and presumptions upon the basis of which the same were
made, were fair and reasonable at the time they were made,
and nothing has occurred since the date the same were made
which would necessitate a material revision to any of those
estimates, forecasts or projections in order for them to be
fair and reasonable;
(n) ACCOUNTING REFERENCE DATE: the accounting reference date of each
Group Company is 31st December (or, if not a Saturday, the nearest
Saturday thereto);
(o) CERTIFICATES OF TITLE: the factual information contained in the
certificates of title referred to in paragraph 2(d) in Schedule 1
is at the respective dates of those certificates of title, true
and accurate in all material respects;
(p) CORPORATE STRUCTURE: immediately prior to Completion the Borrower
has and has had no Subsidiaries (other than Cott Beverages Limited
(now called Cott UK Limited) a Dormant Subsidiary) and:
(i) the details of the Target and its Subsidiaries set out in
Schedule 3 are accurate and complete in all respects;
(ii) the Target has no Subsidiaries other than those companies,
relevant details of which are set out in Part II of
Schedule 3; and
(iii) each company listed in Part II of Schedule 3 is a Dormant
Subsidiary;
(q) DISCLOSURES: there is no disclosure made in the Vendors'
Disclosure Letter or any other disclosure to the Acquisition
Documents which has or may have a material adverse effect on any
of the information, prospects, estimates, forecasts and
projections contained or referred to in the Information Package;
(r) STATUTORY DECLARATIONS: each of the directors of Target has
properly made the statutory declarations required to be made by
him under section 155 of the Act and has otherwise procured
compliance with all the relevant provisions of the Act in relation
to the lawful giving of financial assistance directly or
indirectly for the purpose of reducing or discharging the
Borrower's liability incurred in connection with its acquisition
of the Target Shares;
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(s) ENVIRONMENTAL: save as disclosed in the Environmental Report, each
Group Company has and has at all times complied with all
applicable laws including all Environmental Law, every consent,
authorisation, licence or approval required under or pursuant to
any Environmental Law by each Group Company in connection with the
conduct of its business and the ownership, use, exploitation or
occupation of its assets has been obtained and is in full force
and effect, there has been no default in the observance of the
conditions and restrictions (if any) imposed in, or in connection
with, any of the same, and no circumstances have arisen (i) which
would entitle any person to revoke, suspend, amend, vary, withdraw
or refuse to amend any of the same or (ii) which might give rise
to a claim against any Group Company the cost of meeting which
could reasonably be expected to exceed (pound)250,000;
(t) INTELLECTUAL PROPERTY:
(i) each Group Company owns or has the legal right to use all
of the Intellectual Property Rights which are material to
the conduct of its business or are required by it in order
for it to carry on its business in all material respects;
(ii) the operations of each Group Company do not infringe, or
are not likely to infringe, any Intellectual Property
rights held by any third party which infringement has or
might reasonably be expected to have a Material Adverse
Effect;
(iii) no claim has been made in writing by any third party which
alleges any infringing act or process which would fall
within paragraph (ii) above or which otherwise disputes the
right of any Group Company to use any Intellectual Property
Rights relating to that company's business the unfavourable
outcome of which dispute has or might reasonably be
expected to have a Material Adverse Effect and no Group
Company is aware of any circumstances (including any act or
omission to act) reasonably likely to give rise to such a
claim;
(iv) there exists no actual or threatened infringement by any
third party of any Intellectual Property Rights relating to
the business of any Group Company or any event likely to
constitute such an infringement where such an infringement
or threatened infringement has or might reasonably be
expected to have a Material Adverse Effect;
(v) all Intellectual Property Rights owned by it and which are
material to the conduct of the business of the Group are
subsisting and no act has been done or omitted to be done
and no event has occurred or is likely to occur which may
render any registered Intellectual Property Rights subject
to revocation, compulsory licence, cancellation or
amendment the absence of which Intellectual Property Rights
has or might reasonably be expected to have a Material
Adverse Effect;
(u) TITLE TO ASSETS: each Group Company had on the respective dates of
the Original Accounts good and marketable title to or valid leases
of substantially all its assets which are reflected in the
Original Accounts;
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(v) NO MATERIAL ADVERSE CHANGE: since 15th September 1997 no event has
occurred which has had or could be reasonably expected to have a
Material Adverse Effect;
(w) MANAGEMENT FEES: the only management fees payable by the Borrower
are payable under the Retail Brands Management Agreement and to
Cott at a reasonable commercial rate for goods and services
supplied; and
(x) GROUP TRADING AGREEMENTS: the Group Trading Agreements are the
only agreements between the Borrower and other members of the Cott
Group which are necessary or desirable to allow the Borrower to
carry on its business as presently carried on and as envisaged by
the Business Plan; and
(y) INTER-COMPANY DEBT: the inter-company debt due from Cott to the
Borrower of the (pound)4,000,000 was paid in full by Cott to the
Borrower on or before 30th April 1999.
13.2 REPETITION
The representations and warranties set out in Clause 13.1 shall survive
the execution of this Agreement and shall be deemed to be repeated as
follows:
(a) each of the said representations and warranties shall be deemed to
be repeated on the first Drawdown Date; and
(b) each of the said representations and warranties (other than those
made under Clauses 13.1(e), (f), (g), (j), (m), (q), (r), (s), and
(v) inclusive) shall be repeated on each Drawdown Date (other than
the first Drawdown Date) and each Interest Date,
in each case, as if made with reference to the facts existing at the time
of repetition.
14. UNDERTAKINGS
14.1 INFORMATION UNDERTAKINGS
The Borrower undertakes that during the Security Period it shall, unless
the Bank otherwise agrees:
(a) ANNUAL ACCOUNTS: as soon as the same become available (and in any
event within 120 days after the end of each of its Financial
Years), deliver to the Bank the Accounts for each such Financial
Year of each Group Company together with:
(i) the unconsolidated profit and loss account, balance sheet
and cashflow for the Borrower for each such Financial Year;
and
(ii) a copy of the management letter (if any) addressed by the
auditors to the directors of each such company in
connection with its auditing of the relevant Accounts as
soon as reasonably practicable after receipt of the letter
by such company;
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51
(b) MANAGEMENT ACCOUNTS: as soon as the same become available (and in
any event within 30 days or, prior to 31st March 1998, 45 days
after the end of each successive accounting period (none of which
shall be more than 5 weeks in duration) (each an "ACCOUNTING
PERIOD") during each of its Financial Years, deliver to the Bank
the management accounts (the "MANAGEMENT ACCOUNTS") of each Group
Company (and together with, in the case of the Borrower, its
consolidated management accounts) for (x) each such Accounting
Period and (y) the period ("AGGREGATE ACCOUNTING PERIOD") from and
including 1st January in that Financial Year to and including the
last day of that Accounting Period and in such a form as is
acceptable to the Bank (acting reasonably) so as to disclose with
reasonable accuracy the financial position of the Group or, as the
case may be, of the Borrower and which shall include the following
information in respect of each such Accounting Period and
Aggregate Accounting Period:
(i) a statement of profit and loss;
(ii) a balance sheet; and
(iii) a cashflow statement,
together with a comparison, where appropriate, of all such
information with the estimates, forecasts and projections in the
relevant Operating Budget (or any replacement or substitution made
therefor) in relation to each such Accounting Period and Aggregate
Accounting Period including an analysis justifying any variations
therefrom and, if necessary, revised estimates, forecasts and
projections. The Management Accounts shall when delivered to the
Bank be certified by 2 directors of the Borrower as providing a
true and fair view of the financial position of the Borrower and
the Group as at the end of the relevant Accounting Period and
Aggregate Accounting Period.
(c) OPERATING BUDGETS:
(i) provide to the Bank (in a format acceptable to the Bank
(acting reasonably)) an Operating Budget for each Financial
Year of the Borrower during the Security Period, prior to
(or, in the case of each Financial Year of the Borrower
other than that ending 31st January 1999, 3 days prior to)
the start of each such Financial Year, together with a
comparison of the information, estimates, forecasts and
projections contained therein with any relevant
information, estimates, forecasts and projections contained
in the Accountants' Report and the Business Plan including
an analysis justifying any variations therefrom; and
(ii) if the Borrower shall determine that any of the estimates,
forecasts or projections made in relation to any of its
Financial Years should be different from those set out in
the then current Operating Budget (or any substitution
therefor subsequently made and agreed by the Bank), provide
to the Bank revised estimates, forecasts or projections in
respect of any part of each such Financial Year and such
revised estimates, forecasts or projections shall apply
immediately following their approval by the boards of
directors of the relevant company and the Borrower;
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52
(d) OTHER INFORMATION: notify the Bank at least 30 days prior to
making any loan permitted under Clause 14.3(f)(ii) and, promptly
following the Bank's request, provide to the Bank such other
information, estimates, forecasts or projections in relation to
any Group Company and any of their respective businesses, assets,
financial condition, ownership or prospects as the Bank may
reasonably require;
(e) COMPLIANCE CERTIFICATES: provide to the Bank within 30 days or,
prior to 31st March 1998, 45 days of each Quarterly Accounting
Period a certificate (a "COMPLIANCE CERTIFICATE") executed by
2 Directors of the Borrower under the authority of its board of
directors, certifying that in relation to the twelve month period
ending on the last day of that Quarterly Accounting Period (or if
shorter, the period starting on the date of this Agreement and
ending on the last day of that Quarterly Accounting period) all
the undertakings on the part of the Borrower under this Agreement
are for the time being complied with and including calculations
relating to the financial undertakings set out in Clause 14.4.1:
(For the purpose of this Clause 14.1(e), the calculations shall
(other than in respect of the financial undertaking set out in
Clause 14.4.1(g)) be made by reference to the Management Accounts
prepared for the period in relation to which the relevant
Compliance Certificate is to be given and, in relation to a
Compliance Certificate given in relation to each Financial Year,
the Borrower shall use reasonable endeavours to procure that the
Auditors shall, if they are so satisfied, confirm when delivering
the relevant Accounts, in a confirmation addressed to the Bank
that the calculations contained in the relevant certificate are in
their opinion, based on the Accounts, fair and reasonable,
provided that if there have been any breaches of those
undertakings at any time during the period to which that
certificate relates then the Borrower shall include in that
certificate relevant details of all those breaches);
(f) GAAP: ensure that all Accounts and other financial information
submitted to the Bank have been prepared in accordance with GAAP;
and
(g) DEFAULT, LITIGATION, ETC: promptly, upon becoming aware of the
same, notify the Bank of:
(i) any Default or Potential Default;
(ii) any litigation, arbitration or administrative proceeding
commenced against any Group Company involving a potential
liability of any Group Company exceeding (pound)250,000;
(iii) any Encumbrance (other than a Permitted Encumbrance)
attaching to any of the assets of any Group Company;
(iv) any notice, order, direction, requisition, permission or
other like matter whatsoever issued by any landlord or any
competent local or government authority or department to
any Group Company relating to any Property the effect of
which could reasonably be expected adversely to affect the
use of that Property by a Group Company;
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53
(v) any occurrence relating to a Group Company (including any
third party claim or liability) which could reasonably be
expected to have a Material Adverse Effect; and
(vi) any breach by a Cott Group Company of, or event of default
howsoever described arising under, any Cott Notes Document.
14.2 POSITIVE UNDERTAKINGS
The Borrower undertakes that during the Security Period it shall, and it
shall procure that each Group Company shall, unless the Bank otherwise
agrees:
(a) PAY TAXES: pay and discharge all Taxes and governmental charges
payable by or assessed upon it prior to the date on which the same
become overdue unless, and only to the extent that, such Taxes and
charges shall be contested in good faith by appropriate
proceedings, pending determination of which payment may lawfully
be withheld, and there shall (if the Auditors so advise) be set
aside adequate reserves with respect to any such Taxes or charges
so contested in accordance with GAAP;
(b) INSURANCE: comply with all its obligations relating to insurances
contained in the Security Documents;
(c) AUTHORISATIONS: obtain, maintain and comply with the terms of any
authorisation, approval, licence, consent, exemption, clearance,
filing or registration:
(i) which are material and are required for the conduct of its
business, trade and ordinary activities; and
(ii) required to enable it to perform its obligations under, or
for the validity, enforceability or admissibility in
evidence of, any Financing Document;
(d) ACCESS: upon reasonable notice being given to the Borrower by the
Bank, permit the Bank and any person (being an accountant,
auditor, solicitor, valuer or other professional adviser of the
Bank) authorised by the Bank to have, at all reasonable times
during normal business hours, access to the property, premises and
accounting books and records of any Group Company and to the
officers of any Group Company and the Management;
(e) FURTHER DOCUMENTS: at the request of the Bank, do or procure the
doing of all such things and execute or procure the execution of
all such documents as are, in the opinion of the Bank, necessary
or desirable to ensure that the Bank (i) obtains all its rights
and benefits under the Financing Documents and (ii) to ensure that
the Borrower's obligations to the Bank under this Agreement are
secured on all the Borrower's assets (including executing legal
mortgages) and (iii) obtains a legal mortgage over the land and
property numbered 3 and 4 in Schedule 7 to secure the Borrower's
obligations in respect of the Term Loan Facility provided, for the
avoidance of doubt, that the Borrower shall not be required to do
anything which would constitute a breach of the Cott Notes
Documents;
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54
(f) DELIVERY OF DECLARATIONS, ETC: within any relevant period laid
down in any applicable statute, law or regulation make all
necessary declarations and deliver all necessary forms and
documents required to be delivered to, filed with or registered
with any United Kingdom governmental, statutory or other body or
agency by it in connection with the Transaction Documents and any
of the transactions contemplated under the Transaction Documents;
(g) HEDGING: within 30 days of the date of this Agreement enter into
such interest rate protection agreements with the Bank as may be
stipulated by the Bank and comply with and discharge its
obligations and liabilities under those agreements (save that, the
Borrower may close out the (pound)10,000,000 interest rate cap
(strike price 8%) due to mature 31st January 2001);
(h) COMPLIANCE WITH ENVIRONMENTAL LAW: comply in all material respects
with Environmental Law and implement the recommendations and
proposals contained in the Environmental Report substantially
within the time periods specified in that report, or if no such
time periods are specified, as soon as reasonably practicable and
address the category A/B and B issues as recommended in the Report
within 6 months from Completion (unless the Bank agrees to the
Borrower doing something other than take the recommended action);
(i) DANGEROUS MATERIALS: ensure that all Dangerous Materials treated,
kept and stored, produced, manufactured, generated, refined or
used from, in, upon, or under any of the real property owned by
any Group Company are held and kept upon such real property in
such a manner and up to such standards as they would be kept by a
prudent company carrying on the same trade as that Group Company;
(j) COMPLIANCE WITH SECTION 151 OF THE ACT: comply in all respects
with sections 151 to 158 inclusive of the Act, including in
relation to the execution of the Security Documents and the
payment of amounts due under this Agreement;
(k) AUDITORS' CONFIRMATION: use all reasonable endeavours to procure
that, within 10 Business Days of the date of appointment as
auditors of the Borrower, the relevant accountants deliver to the
Bank a letter from such newly appointed auditors confirming that
they are aware of the provisions of Clauses 1, 7.2 and 14.4.1 of
this Agreement;
(l) DORMANT COMPANIES: procure that none of the companies set out in
Part II of Schedule 3 cease being a Dormant Subsidiary, other than
as a result of a liquidation of any such company which would not
be a Default, and do not acquire any assets and do not assume any
liabilities and use its reasonable endeavours to procure that
neither Target's assets nor its liabilities exceed in aggregate
(pound)5,000 as soon as reasonably practicable after the date of
this Agreement;
(m) TRANSMISSION BANKING BUSINESS: ensure that all transmission
banking business of the Group in the United Kingdom shall be
transferred to the Bank within 90 days of Completion and be
maintained with the Bank throughout the Security Period;
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55
(n) PROTECTION OF RIGHTS UNDER THE ACQUISITION DOCUMENTS: take all
reasonable and practical steps to preserve and enforce its rights
arising under any Acquisition Document and notify the Bank of any
breach by any party, or any claim by any party under, any
Acquisition Document;
(o) INTELLECTUAL PROPERTY RIGHTS: take all necessary action to
protect, maintain and keep in full force and effect all the rights
and benefits of each Group Company in relation to Intellectual
Property Rights and notify the Bank of any infringement by any
third party of the Intellectual Property Rights of any Group
Company and any claim by any third party against any Group Company
in relation to any infringement or alleged infringement of
Intellectual Property Rights;
(p) SUB-PARTICIPATION: provide at its own cost such information and
assistance (including presentations and site visits) as the Bank
Parties reasonably require in connection with the grant of
participation in the Facilities (or some of them) pursuant to the
Participation Agreement and enter into direct contractual
arrangements with Bank Participants to put them in the same
position as they would have been in had the Facilities been
syndicated and the Bank Participants been members of the syndicate
PROVIDED THAT nothing in this Clause shall require a Group Company
to enter into any arrangement which would represent a breach of
the Cott Notes Documents;
(q) EMPLOYMENT CONTRACTS: in the case of the Borrower only, maintain
in place a deed of restrictive covenants with each of the
Management on terms approved by the Bank and on or before 31 March
2000 enter into a deed of restrictive covenants with Xxxx Xxxxxxxx
and Xxxx Xxxxxxxx on terms approved by the Bank, in each case such
approval not to be unreasonably withheld or delayed;
(r) CHANGE OF MANAGEMENT: notify the Bank if any of the Management
ceases to be employed by the Borrower and appoint a replacement
approved by the Bank (such approval not to be unreasonably
withheld or delayed) within 180 days of such cessation unless the
Bank is satisfied that a replacement is unnecessary;
(s) HIVE-UP AGREEMENT: at or immediately after Completion enter into
the Hive-Up Agreement and, as soon as possible afterwards, do what
is necessary to vest title to the Target Assets in the Borrower;
(t) PROPERTY ASSIGNMENT: use its reasonable endeavours to procure the
consent of the landlord of the leasehold property at Xxxx 00,
Xxxxx Xxxx, Xxxxxx Xxxxxxxxx to the assignment of the property to
the Borrower within 60 days of Completion and shall (within ten
working days of the issue of such consent) complete the assignment
to the Borrower;
(u) SYSTEMS: as soon as reasonably possible (and in a time scale to
assist sub-participation by the Bank it being recognised that
item (i) is likely to xxxx 0 months) (i) put in place a business
and system disaster recovery plan for its information technology
and systems, (ii) agree an action plan to deal with year 2000
issues and nominate a board member to be responsible for that, and
(iii) appoint a team to look into the EMU issue and nominate a
board member to be responsible for that;
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(v) FURTHER DUE DILIGENCE: the Borrower will employ at its own cost
Coopers & Xxxxxxx to carry out further financial due diligence
(on terms agreed between the Bank and Coopers & Xxxxxxx following
consultation with the Borrower) in relation to forecasts and
sensitivities to assist in sub-participation of the Facilities;
(w) MARKET REPORT: use its reasonable endeavours to procure that OC&C
Strategy Consultants address the report referred to in paragraph
(ii) of the definition of "Market Report" to the Bank Parties;
(x) XXXXXXXXXXXX DISPOSAL: in the case of the Borrower only, use its
utmost endeavours to procure a Disposal of the Property numbered 1
in Schedule 7 on or before 31st May 1999 and comply with its
obligation under 14.1(c)(ii) to produce a revised Operating Budget
within 30 days of that Disposal; and
(y) YEAR 2000 COMPLIANCE: procure that on or before 30th September
1999 the computer systems and production equipment of each Group
Company are compliant with Year 2000 Conformity (within the
meaning of British Standards Institute document PD 2000-1:1998)
save to the extent any failure to be so compliant could not
reasonably be expected to have a Material Adverse Effect.
14.3 NEGATIVE UNDERTAKINGS
The Borrower undertakes that during the Security Period it shall not, and
it shall procure that no Group Company shall, unless the Bank otherwise
agrees:
(a) NEGATIVE PLEDGE: create or permit to subsist any Encumbrance over
any of its assets other than Permitted Encumbrances;
(b) DISPOSAL OF ASSETS: dispose of any of the Target Shares or make
any other Disposal other than a disposal of an asset:
(i) in the ordinary course of its trading activities on arms'
length terms; or
(ii) where the proceeds of the Disposal are used within:
(x) 3 months; or
(y) where the relevant Disposal Proceeds are paid to the
credit of a bank account (a "DISPOSAL PROCEEDS
BRIDGING ACCOUNT") held with the Bank pending their
application as specified in this Clause 14.3(b)(ii),
6 months,
of that Disposal for the purchase of an asset to replace
directly the asset the subject of that Disposal; or
(iii) a Disposal of an asset which is obsolete for the purpose
for which such an asset is normally utilised where the
aggregate value of the assets so disposed in any Financial
Year of the Borrower does not exceed (pound)250,000; or
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57
(iv) a Disposal of cash on terms not otherwise prohibited by
this Agreement; or
(v) a Disposal on arm's length terms where the aggregate value
of the assets the subject of a Disposal by Group Companies
other than in accordance with paragraphs (i) to (iv) above
in any Financial Year of the Borrower does not exceed
(pound)250,000,
(for the purposes of this Clause 14.3(b), the value of any asset
shall be the greater of its book value and the consideration
received for it);
(c) CHANGE OF BUSINESS: make any substantial change to the general
nature or scope of the business of the Group as a whole from that
carried on at the date of this Agreement;
(d) MERGERS: enter into any amalgamation, demerger, merger or
reconstruction or any joint venture or partnership agreement;
(e) FEES: pay any fees or commissions to any person other than (i) on
open market terms and for the purpose of and in the ordinary
course of its trade or (ii) fees incurred under any Transaction
Document;
(f) LOANS: make any loans or grant any credit to or for the benefit of
any person, other than:
(i) amounts of credit allowed by the relevant company in the
normal course of its trading activities; or
(ii) loans made on arms length terms by a Group Company to a
Cott Group Company (all the terms of which are set out in
writing and signed by both parties); or
(iii) loans made by a Group Company to its employees where such
loans do not, when aggregated with all such loans made by
all Group Companies, exceed (pound)25,000 at any time;
(g) INDEBTEDNESS: incur or permit to subsist any Indebtedness other
than Permitted Indebtedness;
(h) ACQUISITIONS: acquire any business of, or shares or securities of,
any company;
(i) INCORPORATION OF SUBSIDIARIES: incorporate any company as its
Subsidiary;
(j) PAYMENTS OF DEFERRED CONSIDERATION: in respect of the Borrower
only, pay, prepay or purchase all or any part of the Deferred
Consideration provided that the Borrower may (i) make scheduled
payments of the Deferred Consideration and (ii) pay interest, if
any, on the Deferred Consideration in accordance with the terms of
the Share Purchase Agreement (as in force at the date of this
Agreement), so long as:
(A) no sum is due and unpaid under this Agreement;
(B) no Default or Potential Default has occurred and is
continuing;
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(C) the making of such scheduled payment or repayment or the
payment of such interest will not in the period of 6 months
immediately following the making of such payment or
repayment (as the case may be) result in a breach of any of
the financial undertakings contained in Clause 14.4.1 and 2
directors of the Borrower have issued a certificate to the
Bank to that effect; and
(D) the Borrower shall have delivered to the Bank one or more
Compliance Certificates required under this Agreement in
relation to the period in respect of which such payment or
repayment (as the case may be) is to be paid (including the
provision of any applicable Auditor's confirmation);
(k) VAT GROUP: permit:
(i) any person (other than a Group Company) to become a part of
the Borrower's VAT Group; or
(ii) any Group Company to have any VAT liability in respect of
any person who is not a Group Company (other than where the
liability of that person relates to a VAT liability of a
Group Company);
(l) VARIATION OF TRANSACTION DOCUMENTS: permit or effect any
variations, novations or amendments to: (i) the Acquisition
Documents, (ii) the Cott Notes Documents, or (iii) the Group
Trading Agreements (and the Bank must give consent unless, in its
reasonable opinion, such variation, novation or amendment would
(or would be likely) to be adverse to the interests of any Group
Company or Bank Party);
(m) OPERATING LEASE PAYMENTS: other than under leases of real
property, make a payment under any hire agreement, credit sale
agreement, hire purchase agreement, conditional sale agreement or
instalment sale and purchase agreement which is not a Finance
Lease if the aggregate of all such payments made by the Group
Companies, in any Financial Year of the Borrower, will exceed
(pound)1,300,000;
(n) COTT SUPPLY AGREEMENT: do or omit to do anything which would cause
or might give rise to a breach by the Borrower or Cott of the Cott
Supply Agreement or by Cott or BCB International Limited or BCB of
the Royal Crown Contract or make any payment to BCB or any other
Cott Group Company in respect of the amount of (pound)2,000,000
owed by the Borrower and outstanding as at 1st April 1999 in
respect of the supply of cola or non-cola concentrate (the "BCB
DEBT") provided that the Borrower may, so long as there is no sum
due and unpaid under this Agreement and no Default or Potential
Default has occurred and is continuing make payment of:
(i) up to (pound)1,000,000 of the BCB Debt at any time 15
days or more after the Borrower has delivered to the Bank the
Management Accounts for the Period starting on 1st January 2000
and ending on 30 June 2000 provided that such Management Accounts
show that PBIT for that period is equal to or greater than
(pound)3,556,000; and
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(ii) the balance of the BCB Debt at any time 15 days or more
after the Borrower has delivered to the Bank the Management
Accounts for the period starting on 1st January 2000 and
ending on 30th September 2000 provided that such Management
Accounts show PBIT for that period is equal to or greater
than (pound)6,380,000
(o) ROYAL CROWN EXCLUSIVITY: do or omit to do anything which would
entitle Royal Crown Cola Corporation to supply any cola or
non-cola concentrates to a person who is not a Cott Group Company;
(p) COTT NOTES DOCUMENTS: not do or suffer anything to be done or
omitted to be done which would give rise to any breach of the
terms of any Cott Notes Documents;
(q) GROUP TRADING AGREEMENTS: not do anything which might cause the
Group Trading Agreements to be terminated and not pay any
management or similar fees to a company in the Cott Group other
than:
(i) under the Retail Brands Management Agreement; and
(ii) to Cott at a reasonable commercial rate for goods or
services supplied but not exceeding (pound)
1,647,000 in the Financial Year ending on or about
31 December 1999 and (pound)1,000,000 in any
Financial Year thereafter
provided always that no Group Company may pay any management,
consultancy or similar fees to any Cott Group Company in any
Financial Year except to the extent (but subject always to a
maximum payment in respect of such fees of (pound)572,000 in the
Financial Year ending 31st December 1999; (pound)1,075,000 in the
Financial Year ending 31st December 2000 and (pound)1,000,000 in
any subsequent Financial Year) that Cott or another Cott Group
Company (not being a Group Company) has, in the case of the
Financial Year ending 31st December 2000, during that Financial
Year first paid at least (pound)1,647,000 (in addition to the
(pound)10,000,000 referred to in Clause 15.1(u)) to the Borrower
(which sum of at least (pound)1,647,000 shall be paid to the
Borrower on or before 29th March 2000) and, in the case of any
subsequent Financial Year, has during that Financial Year first
paid an amount at least equal to the aggregate of such management,
consultancy and similar fees to the Borrower in any case by way of
either:
(iii) subscription for fully paid up ordinary share capital of
the Borrower; or
(iv) to the extent permitted to do so under the Cott Notes
Documents, Subordinated Loan (on terms approved by the Bank
in writing); and
(r) VIRGIN SUPPLY AGREEMENT: permit or effect any variations,
novations or amendments to the Virgin Supply Agreement which might
adversely affect the interests of the Group.
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14.4 FINANCIAL UNDERTAKINGS
14.4.1 The Borrower undertakes to ensure that during the Security Period, unless
the Bank otherwise agrees:
(a) PBIT TO TOTAL DEBT COSTS
the ratio of PBIT to Total Debt Costs for each period referred to
in Column A below shall not be less than the ratio set out in
Column B below opposite that period:
COLUMN A COLUMN B
PERIOD RATIO
-------- --------
The four Quarterly Accounting Periods ending on or about 31.12.99 0.80:1
The four Quarterly Accounting Periods ending on or about 31.3.00 0.825:1
The four Quarterly Accounting Periods ending on or about 30.6.00 1.375:1
The four Quarterly Accounting Periods ending on or about 30.9.00 1.85:1
The four Quarterly Accounting Periods ending on or about 31.12.00 2.00:1
The four Quarterly Accounting Periods ending on or about 31.3.01 2.25:1
The four Quarterly Accounting Periods ending on or about 30.6.01 2.50:1
The four Quarterly Accounting Periods ending on or about 30.9.01 2.75:1
The four Quarterly Accounting Periods ending on or about 31.12.01 3.00:1
The four Quarterly Accounting Periods ending on or about 31.3.02 3.00:1
The four Quarterly Accounting Periods ending on or about 30.6.02 3.00:1
The four Quarterly Accounting Periods ending on or about 30.9.02 3.00:1
The four Quarterly Accounting Periods ending on or about 31.12.02 3.00:1
The four Quarterly Accounting Periods ending on or about 31.3.03 3.00:1
The four Quarterly Accounting Periods ending on or about 30.6.03 3.00:1
The four Quarterly Accounting Periods ending on or about 30.9.03 3.00:1
The four Quarterly Accounting Periods ending on or about 31.12.03 3.00:1
The four Quarterly Accounting Periods ending on or about 31.3.04 3.00:1
The four Quarterly Accounting Periods ending on or about 30.6.04 3.00:1
The four Quarterly Accounting Periods ending on or about 30.9.04 3.00:1
The four Quarterly Accounting Periods ending on or about 31.12.04 3.00:1
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61
(b) CASHFLOW TO TOTAL FUNDING COSTS
the ratio of Cashflow to Total Funding Costs for each period
referred to in Column A below shall not be less than the ratio set
out in Column B below opposite that period:
COLUMN A COLUMN B
PERIOD RATIO
-------- --------
The four Quarterly Accounting Periods ending on or about 31.12.99 0.70:1
The four Quarterly Accounting Periods ending on or about 31.3.00 0.93:1
The four Quarterly Accounting Periods ending on or about 30.6.00 0.83:1
The four Quarterly Accounting Periods ending on or about 30.9.00 1.00:1
The four Quarterly Accounting Periods ending on or about 31.12.00 1.00:1
The four Quarterly Accounting Periods ending on or about 31.3.01 1.00:1
The four Quarterly Accounting Periods ending on or about 30.6.01 1.00:1
The four Quarterly Accounting Periods ending on or about 30.9.01 1.00:1
The four Quarterly Accounting Periods ending on or about 31.12.01 1.00:1
The four Quarterly Accounting Periods ending on or about 31.3.02 1.00:1
The four Quarterly Accounting Periods ending on or about 30.6.02 1.00:1
The four Quarterly Accounting Periods ending on or about 30.9.02 1.00:1
The four Quarterly Accounting Periods ending on or about 31.12.02 1.00:1
The four Quarterly Accounting Periods ending on or about 31.3.03 1.00:1
The four Quarterly Accounting Periods ending on or about 30.6.03 1.00:1
The four Quarterly Accounting Periods ending on or about 30.9.03 1.00:1
The four Quarterly Accounting Periods ending on or about 31.12.03 1.00:1
The four Quarterly Accounting Periods ending on or about 31.3.04 1.00:1
The four Quarterly Accounting Periods ending on or about 30.6.04 1.00:1
The four Quarterly Accounting Periods ending on or about 30.9.04 1.00:1
The four Quarterly Accounting Periods ending on or about 31.12.04 1.00:1
(c) MINIMUM TANGIBLE NET WORTH
(i) Tangible Net Worth shall not at any time during each period
referred to in Column A below be less than the amount set
out opposite that period in Column B below:
COLUMN A COLUMN B
PERIOD AMOUNT
-------- --------
((POUND)000)
The Quarterly Accounting Period ending on or about 31.12.99 27,000
The Quarterly Accounting Period ending on or about 31.3.00 36,500
The Quarterly Accounting Period ending on or about 30.6.00 38,500
The Quarterly Accounting Period ending on or about 30.9.00 39,250
The Quarterly Accounting Period ending on or about 31.12.00 39,750
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COLUMN A COLUMN B
PERIOD AMOUNT
-------- --------
((POUND)000)
The Quarterly Accounting Period ending on or about 31.3.01 39,750 + Y
The Quarterly Accounting Period ending on or about 30.6.01 39,750 + Y
The Quarterly Accounting Period ending on or about 30.9.01 39,750 + Y
The Quarterly Accounting Period ending on or about 31.12.01 39,750 + Y
The Quarterly Accounting Period ending on or about 31.3.02 39,750 + Y
The Quarterly Accounting Period ending on or about 30.6.02 39,750 + Y
The Quarterly Accounting Period ending on or about 30.9.02 39,750 + Y
The Quarterly Accounting Period ending on or about 31.12.02 39,750 + Y
The Quarterly Accounting Period ending on or about 31.3.03 39,750 + Y
The Quarterly Accounting Period ending on or about 30.6.03 39,750 + Y
The Quarterly Accounting Period ending on or about 30.9.03 39,750 + Y
The Quarterly Accounting Period ending on or about 31.12.03 39,750 + Y
The Quarterly Accounting Period ending on or about 31.3.04 39,750 + Y
The Quarterly Accounting Period ending on or about 30.6.04 39,750 + Y
The Quarterly Accounting Period ending on or about 30.9.04 39,750 + Y
The Quarterly Accounting Period ending on or about 31.12.04 39,750 + Y
where Y equals 75% of the Net Profit of the Group for the whole of
the period from 31st December 2000 to the relevant testing date
within the relevant Quarterly Accounting Period provided always
that in respect of any Quarterly Account Period if Y would have a
value less than zero then Y shall and shall be deemed to be zero
and if Y would have a value less than the value (if any)
attributed to Y in the previous Quarterly Accounting Period Y
shall and shall be deemed to have the same value.
(d) PBIT
PBIT for the Quarterly Accounting Period ending on or about 31st
March 1999 shall be not less than (pound)539,000
(e) NET CASH OUTFLOW
Net Cash Outflow for the Quarterly Accounting Period ending on or
about 31st March 1999 and the two Quarterly Accounting Periods
ending on or about 30th June 1999 shall be not greater than,
respectively, (pound)13,000,000 and (pound)9,500,000 (where "NET
CASH OUTFLOW" IS The amount by which Total Funding Costs
(expressed as a positive amount) exceeds Cashflow (whether a
positive or negative amount)).
(f) CAPITAL EXPENDITURE AND FINANCE LEASE EXPENDITURE
no Group Company shall incur any Capital Expenditure or Finance
Lease Expenditure if it would result in the aggregate Capital
Expenditure and Finance Lease Expenditure incurred by the Group
Companies in any period set out in Column A below exceeding the
amount set out opposite such period in Column B below:
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COLUMN A COLUMN B
PERIOD AMOUNT ((POUND)000)
------ -------------------
Closing to 31.1.99 6,000
12 months to 31.1.00 6,000
12 months to 31.1.01 6,000
12 months to 31.1.02 6,000
12 months to 31.1.03 6,000
12 months to 31.1.04 6,000
12 months to 31.1.05 6,000
provided that, if in respect of a period referred to in Column A
above, the Group incurs Capital Expenditure and Finance Lease
Expenditure in aggregate less than the amount set opposite such
period in Column B above, the difference being "ADDITIONAL
AVAILABLE EXPENDITURE", the amount set out in Column B above
opposite the next succeeding period shall be deemed to be
increased by the amount of the Additional Available Expenditure up
to a maximum of 25 per cent. of the amount set opposite the
preceding period.
(g) BORROWING BASE
the aggregate of (i) all Revolving Advances, (ii) the Overdraft
Outstandings and (iii) the Ancillary Outstandings shall not at any
time exceed the Borrowing Base at that time.
(h) COTT BORROWING BASE
the Indebtedness of Cott and its Restricted Subsidiaries of the
type referred to in section 4.03(i) of the 2005 Indenture does not
exceed the limits specified in that section (for the purposes of
this Clause 14.4.1(h) the terms "INDEBTEDNESS" and "RESTRICTED
SUBSIDIARIES" have the meanings specified in the 2005 Indenture).
(i) ADJUSTMENTS
(a) if the Parent Loan is written off (in whole or in part)
then the amount written off shall:
(i) be added to Tangible Net Worth for the purpose of
testing the minimum Tangible Net Worth covenant; and
(ii) (if it is written off through the profit and loss
account) be added to PBIT for the period in which
that happens.
(b) for the purpose of testing the Tangible Net Worth Covenant,
the outstanding nominal amount of the Crystal Subordinated
Loan
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Notes shall be added to Tangible Net Worth during the
period of 60 days from Completion.
14.4.2 (a) If the directors of any Group Company determine at any time during
the Security Period that the accounting reference date of that
Group Company has or should be changed or any of the accounting
principles applied in the preparation of any of the Accounts and
the Management Accounts shall be different from the Accounting
Principles, or if as a result of the introduction or
implementation of any SSAP or FRS or any change in any of them or
in any applicable law such accounting principles are required to
be changed, the Borrower shall promptly give notice to the Bank of
that change, determination or requirement.
(b) If the Bank believes that the financial undertakings set out in
this Clause 14.4 need to be amended as a result of any such
change, determination or requirement or as a result of the
Required Disposal (as defined in Clause 8.1.4), the Borrower shall
negotiate with the Bank in good faith to amend the existing
financial undertakings so as to provide the Bank with
substantially the same protections as the financial undertakings
set out in this Clause 14.4 (but which are not materially more
onerous).
(c) If the Borrower and the Bank cannot agree such amended financial
undertakings within 30 days of that notice, the Borrower and the
Bank shall jointly nominate a firm of chartered accountants to
settle the amended financial undertakings, or in default of such
nomination the Bank shall request the President for the time being
of the Institute of Chartered Accountants in England and Wales to
nominate a firm of chartered accountants for that purpose. Such
accountants shall act as experts and not arbitrators and their
decision shall be final and binding on the Parties. The costs of
such accountants shall be paid by the Borrower.
14.4.3 The calculation of ratios and other amounts under this Clause 14.4 shall
be made by the Bank by reference to the latest Accounts, Management
Accounts and other financial information of the Group Companies (or, in
relation to Clause 14.4.1(h), Cott Group Companies) for the Financial
Year of the Borrower, or other period in relation to which the
calculation falls to be made. Each determination of the Bank under this
Clause 14.4 shall be conclusive and binding on the Borrower except for
any manifest error.
15. DEFAULT
15.1 DEFAULT
Each of the following shall be a Default:
(a) NON-PAYMENT: subject to Clause 15.2.5, the Borrower does not pay
on the due date any amount payable by it under this Agreement at
the place at and in the currency and funds in which it is
expressed to be payable unless the failure to pay such amount is
due solely to administrative or technical delays in the
transmission of funds which are not the fault of that the Borrower
and such amount is paid within 2 Business Days after its due date
for payment; or
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(b) OTHER DEFAULTS: a Group Company breaches any of its obligations
under any Financing Document (other than the obligations referred
to in Clause 15.1(a)) and, if that breach is capable of remedy, it
is not remedied within 5 Business Days after notice of that breach
has been given by the Bank to the Borrower; or
(c) BREACH OF REPRESENTATION OR WARRANTY: any representation, warranty
or statement made or deemed to be repeated by a Group Company
under any Financing Document or in any document delivered by or on
behalf of a Group Company under or in connection with any
Financing Document is incorrect when made or deemed to have been
repeated; or
(d) UNLAWFULNESS, INVALIDITY OR REPUDIATION: it is unlawful for a
Group Company to perform or comply with, or a Group Company
repudiates, any of its obligations under any Financing Document or
the Debenture is invalid or any Cott Group Company contests the
validity of the Debenture; or
(e) CROSS-DEFAULT: any Indebtedness of all or any Cott Group Companies
in excess of, in aggregate,(pound)3,000,000:
(i) is not paid when due or within any originally applicable
grace period; or
(ii) is declared to be or otherwise becomes due and payable
prior to its specified maturity,
or any creditor of all or any of Cott Group Companies becomes
entitled to declare any such Indebtedness due and payable prior to
its specified maturity; or
(f) DEFAULT TO BANK PARTICIPANT: the Borrower fails to fully observe
and perform its obligations under any agreement between it and a
Bank Participant (which relates to this Facility); or
(g) ATTACHMENT OR DISTRESS: a creditor or encumbrancer attaches or
takes possession of, or a distress, execution, sequestration or
other process is levied or enforced upon or sued out against, any
of the assets of any Group Company (having a value of at least
(pound)5,000) and such process is not discharged within 14 days;
or
(h) ENFORCEMENT OF SECURITY: any Encumbrance over any of the assets of
any Group Company becomes enforceable; or
(i) INABILITY TO PAY DEBTS: any Group Company (other than a Dormant
Subsidiary):
(i) suspends payment of its debts or is unable or admits its
inability to pay its debts as they fall due; or
(ii) begins negotiations with any creditor with a view to the
readjustment or rescheduling of any of its Indebtedness; or
(iii) proposes or enters into any composition or other
arrangement for the benefit of its creditors generally or
any class of creditors; or
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(j) INSOLVENCY PROCEEDINGS: any person takes any action or any legal
proceedings are started or other steps taken (including the
presentation of a petition) for:
(i) any Group Company (other than a Dormant Subsidiary) to be
adjudicated or found insolvent; or
(ii) the winding-up or dissolution of any Group Company other
than (A) in respect of a Dormant Subsidiary, (B) in
connection with a solvent reconstruction, the terms of
which have been previously approved in writing by the Bank,
or (C) a winding-up petition which is proved to the
satisfaction of the Bank to be frivolous or vexatious and
which is, in any event, discharged within 14 days of its
presentation and before it is advertised provided always
that no Advances shall be made at any time after any
winding up petition has been presented and remains
undischarged; or
(iii) the appointment of a trustee, receiver, administrative
receiver or similar officer in respect of any Group Company
or any of its assets; or
(k) ADJUDICATION OR APPOINTMENT: any adjudication, order or
appointment is made under or in relation to any of the proceedings
referred to in Clause 15.1(j); or
(l) ADMINISTRATION ORDER: an application is made to the court for an
administration order under the Insolvency Xxx 0000 with respect to
any Group Company (other than a Dormant Subsidiary); or
(m) ANALOGOUS PROCEEDINGS: any event occurs or proceeding is taken
with respect to any Group Company (other than a Dormant
Subsidiary) in any jurisdiction to which it is subject which has
an effect equivalent or similar to any of the events mentioned in
Clause 15.1(g), (i), (j), (k) or (l); or
(n) CESSATION OF BUSINESS: any Group Company (other than a Dormant
Subsidiary) suspends, ceases or threatens to suspend or cease to
carry on all or a substantial part of its business; or
(o) COTT SUPPLY AGREEMENT: The Royal Crown Contract or the Cott Supply
Agreement is terminated or notice of termination of the Royal
Crown Contract or the Cott Supply Agreement is given by either
party thereto or any material variation or alteration is made to
the terms of the Royal Crown Contract or the Cott Supply Agreement
other than where (in the case of a termination or notice of
termination) the Bank has previously approved alternative
arrangements for the supply to the Group of cola and non-cola
concentrates or (in the case of a material variation or
alteration) the variation or alteration has been previously
approved by the Bank; or
(p) MATERIAL ADVERSE CHANGE: any event or series of events occur
which, in the opinion of the Bank, has or could reasonably be
expected to have a Material Adverse Effect; or
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(q) AMENDMENT OF ARTICLES OF THE BORROWER: the Borrower, without the
prior written consent of the Bank, amends any of its articles of
association;
(r) REDEMPTION OF SHARES BY THE BORROWER: the Borrower, without the
prior written consent of the Bank, makes any redemption of any of
its shares, purchases any of its shares or otherwise reduces its
issued share capital; or
(s) ADDITIONAL CAPITAL: within 60 days of Completion the ordinary
share capital of the Borrower is not increased by an amount equal
to the nominal amount of the Crystal Subordinated Loan Notes and
the Crystal Subordinated Loan Notes are not redeemed;
(t) FURTHER ADDITIONAL CAPITAL: the paid up ordinary issued share
capital of the Borrower is not increased by each of:
(i) (pound)1,000,000 on or before 31st May 1999; and
(ii) an amount equal to (x) the amount which the Borrower is
required to apply in repayment of the Term Loan pursuant to
Clause 8.1.4 less (y) the amount (if any) of Disposal
Proceeds in respect of the Required Disposal (as defined in
Clause 8.1.4) applied in repayment of the Term Loan
pursuant to Clause 8.1.4; and
(u) NEW CAPITAL INJECTION: the (pound)10,000,000 paid by Cott to the
Borrower on 30th DecembeR 1999 has not on or prior to 29th
February 2000 been applied by way of either:
(a) subscription for fully paid up ordinary share capital of
the Borrower; or
(b) to the extent permitted to do so under the Cott Notes
Documents, Subordinated Loan (on terms approved by the Bank
in writing).
15.2 ACCELERATION, ETC.
15.2.1 If a Default occurs and remains unremedied the Bank may by notice (a
"DEFAULT NOTICE") to the Borrower cancel the Facilities and require the
Borrower immediately to repay each Loan together with accrued interest
and all other sums payable under this Agreement, whereupon they shall
become immediately due and payable. Upon the service of any Default
Notice the Bank's obligations under this Agreement shall be terminated
and its Commitment shall be cancelled.
15.2.2 Immediately upon the Bank either serving a Default Notice or making
demand, the Borrower shall in respect of each Guarantee issued on its
behalf:
(a) use its reasonable endeavours to procure the release of the Bank
from that Guarantee; and
(b) without prejudice to paragraph (a) above, pay to the credit of
such account as the Bank shall stipulate an amount equal to the
Guaranteed Amount of that Guarantee and charge such account in
favour of the Bank, in such manner and on such terms as the Bank
may stipulate.
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15.2.3 Immediately upon the Bank either serving a Default Notice or making
demand, each outstanding FFE Contract shall be, if so specified by the
Bank, terminated and closed out. Upon such termination and close-out, the
Bank shall determine in good faith the applicable closing gain or loss
payable by or to it for the outstanding FFE Contracts, calculated by
reference to the netting of the respective amounts in each currency which
the Bank is contracted to deliver and receive under all such FFE
Contracts. Any amount payable to the Bank or to the Borrower in respect
of the FFE Contracts pursuant to this Clause 15.2.3 shall, subject to all
rights of set-off, be immediately due and payable.
15.2.4 Immediately upon the Bank either serving a Default Notice or making
demand, the Bank shall:
(a) make demand on each overdraft made available under the Optional
Overdraft Facility; and
(b) terminate all facilities or financial accommodation made available
by it under the Ancillary Facility (and which are not referred to
in Clauses 15.2.2 and 15.2.3),
whereupon any moneys owing to the Bank shall be immediately due and
payable and the Bank may apply any credit balance on any account of the
Borrower with the Bank against any liability owed to the Bank by the
Borrower (to the extent that any such credit balance is freely available
to be set off in this manner).
15.2.5 If the Bank makes a demand under any overdraft provided under the
Optional Overdraft Facility or any facility or financial accommodation
provided under the Ancillary Facility, that demand shall not be a Default
for the purposes of Clause 15.1(a), and the Bank shall not take any steps
to enforce the Security Documents in respect of that demand if (a) that
demand is satisfied in full within 5 Business Days of the date of that
demand and (b) no other Default has occurred and is continuing during
that period. For the avoidance of doubt, if any other Default has
occurred, the Bank may exercise all its rights under this Clause 15 and
may enforce the Security Documents, in respect of the amount so demanded
by the Bank.
16. SET-OFF
The Bank may set off any matured obligation owed by the Borrower under
any Financing Document against any obligation (whether or not matured)
owed by the Bank to the Borrower, regardless of the place of payment,
booking branch or currency of either obligation. If the obligations are
in different currencies, the Bank may convert either obligation at the
relevant spot rate of exchange of the Bank for the purpose of the
set-off.
17. FEES AND EXPENSES
17.1 EXPENSES
The Borrower shall on demand (x) reimburse the Bank for its own account
at such reasonable daily and/or hourly rates as the Bank shall from time
to time reasonably determine for the cost of utilising its management
time and/or other resources and (y) pay all expenses incurred by the Bank
(including legal, valuation and accounting fees but, in
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relation to paragraphs (a) and (c) below, only to the extent the same are
reasonable in amount), and any VAT on those expenses in each case in
connection with:
(a) the negotiation, preparation and execution of the Financing
Documents and the other documents contemplated by the Financing
Documents;
(b) the sub-participation of the Facilities;
(c) the granting of any release, waiver or consent or in connection
with any amendment or variation of any Financing Document; and
(d) enforcing, perfecting, protecting or preserving (or attempting so
to do) any of their rights, or in suing for or recovering any sum
due from the Borrower or any other person under any Financing
Document, or in investigating any possible Default.
17.2 ARRANGEMENT
The Borrower shall pay to the Bank arrangement and agency fees in
accordance with the terms of the Fees Letter. For the avoidance of doubt,
all liabilities and obligations of the Borrower under the Fees Letter
shall be deemed to be incurred under this Agreement and shall be secured
by the Security Documents.
17.3 COMMITMENT FEES
17.3.1 The Borrower shall pay a commitment fee in Sterling to the Bank at the
rate of 0.75 per cent. per annum on the Term Loan Commitment less the
aggregate of all Term Advances. This commitment fee shall be calculated
on a day-to-day basis and a 365 day year in respect of the period from
the date of this Agreement to full drawdown of the Term Advance and shall
be paid on the last day of that period or on any earlier date on which
the Term Loan Commitment equals zero.
17.3.2 The Borrower shall pay a commitment fee in Sterling to the Bank at the
rate of 0.75 per cent. per annum (or, if lower at a rate equal to half
the Margin from time to time) on the Revolving Credit Commitment less the
aggregate of all Revolving Advances and the Overdraft Outstandings. The
commitment fee shall be calculated on a day-to-day basis and a 365 day
year in respect of the Revolving Credit Commitment Period and shall be
payable in arrear on each Quarter Date and also on the last day of the
Revolving Credit Commitment Period or on any earlier date on which the
Revolving Credit Commitment equals zero.
17.4 DOCUMENTARY TAXES INDEMNITY
All stamp, documentary, registration or other like duties or Taxes,
including any penalties, additions, fines, surcharges or interest
relating to those duties and Taxes, which are imposed or chargeable on or
in connection with any Financing Document shall be paid by the Borrower.
The Bank shall be entitled but not obliged to pay any such duties or
Taxes (whether or not they are its primary responsibility). If the Bank
does so the Borrower shall on demand indemnify the Bank against those
duties and Taxes and against any costs and expenses incurred by the Bank
in discharging them.
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17.5 VAT
17.5.1 All payments made by the Borrower under the Financing Documents are
calculated without regard to VAT. If any such payment constitutes the
whole or any part of the consideration for a taxable or deemed taxable
supply (whether that supply is taxable pursuant to the exercise of an
option or otherwise) by the Bank, the amount of that payment shall be
increased by an amount equal to the amount of VAT which is chargeable in
respect of the taxable supply in question.
17.5.2 No payment or other consideration to be made or furnished to the Borrower
by the Bank pursuant to or in connection with any Financing Document or
any transaction or document contemplated in any Financing Document may be
increased or added to by reference to (or as a result of any increase in
the rate of) any VAT which shall be or may become chargeable in respect
of any taxable supply.
17.6 INDEMNITY PAYMENTS
Where in any Financing Document the Borrower has an obligation to
indemnify or reimburse the Bank in respect of any loss or payment, the
calculation of the amount payable by way of indemnity or reimbursement
shall take account of the likely Tax treatment in the hands of the Bank
(as determined by the relevant party's auditors) of the amount payable by
way of indemnity or reimbursement and of the loss or payment in respect
of which that amount is payable.
17.7 DEBITING AUTHORITY
The Borrower authorises the Bank to debit from the Borrower's current
account all fees and expenses arising from time to time under this
Agreement.
18. AMENDMENTS AND WAIVERS
18.1 WRITING
18.1.1 Any term of any Financing Document may be amended or waived with the
written agreement of the Borrower and the Bank.
18.2 NO IMPLIED WAIVERS; REMEDIES CUMULATIVE
The rights of the Bank under the Financing Documents:
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights under the general
law; and
(c) may be waived only in writing and specifically.
Delay in exercising or non-exercise of any such right is not a waiver of
that right.
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19. MISCELLANEOUS
19.1 SEVERANCE
If any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not effect:
(a) the legality, validity or enforceability in that jurisdiction of
any other provision of this Agreement; or
(b) the legality, validity or enforceability in any other jurisdiction
of that or any other provision of this Agreement.
19.2 COUNTERPARTS
This Agreement may be executed in any number of counterparts and this
shall have the same effect as if the signatures on the counterparts were
on a single copy of this Agreement.
19.3 PUBLICITY
The Borrower shall not commission or authorise any press or media
publicity in relation to this transaction and its financing without first
consulting the Bank and if using the name of a Bank Party, such name
shall only be used in such manner as the relevant Party may reasonably
require. All costs of any agreed publicity shall be for the account of
the Borrower.
19.4 EURO
If Sterling is, or is to be replaced by the Euro, the Bank may notify the
Borrower of any amendments to this Agreement, the other Financing
Documents or any other document entered into pursuant to this Agreement
it reasonably considers necessary in order to ensure (i) that the terms
of this Agreement or any other such document reflect market practice at
such time with regard to the introduction of monetary union within the
European Community and/or to reflect market practice applicable to the
Euro (including any rate applicable as LIBOR); and (ii) insofar as
reasonably possible and without prejudice to market practice at such
time, that the Parties shall be left in no worse position than they might
otherwise have been in had the event mentioned in this Clause not
occurred. Any such amendments shall take effect as and when specified by
the Bank in such notice and shall thereupon be and become binding on all
Parties.
20. NOTICES
20.1 METHOD
Each notice or other communication to be given under this Agreement shall
be given in writing in English and, unless otherwise provided, shall be
made by telex, fax or letter.
20.2 DELIVERY
Any notice or other communication to be given by one Party to another
under this Agreement shall (unless one Party has by 10 Business Days'
notice to the other Party
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specified another address) be given to that other Party, at the
respective addresses given in Clause 20.3.
20.3 ADDRESSES
The address, telex number, answerback and fax number of the Borrower and
the Bank are:
(A) the Borrower:
Xxxxxx Xxxxx
Xxxx Xxx
Xxxxxxxx XX00 0XX
Attention: Finance Director
Fax: 00000 000000
(B) the Bank:
Lloyds TSB Bank Plc
Xxxx Xxxxx
Xxxx Xxxxxx
Xxxxxxx
XX0 0XX
Attention: Loans Administration
Fax: 0000 000 0000
with a copy to:
Lloyds TSB Bank Plc
St. George's House
XX Xxx 000
0-0 Xxxxxxxxx
Xxxxxx
XX0X 0XX
Attention: Capital Markets
Fax: 0000 000 0000
20.4 DEEMED RECEIPT
20.4.1 Any notice or other communication given by the Bank shall be deemed to
have been received:
(a) if sent by telex with the relevant answerback appearing at the
beginning and end of the telex, on the day on which transmitted;
(b) if sent by fax, with a confirmed receipt of transmission from the
receiving machine, on the day on which transmitted;
(c) in the case of a written notice given by hand, on the day of
actual delivery; and
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(d) if posted, on the second Business Day following the day on which
it was despatched by first class mail postage prepaid,
provided that a notice given in accordance with the above but received on
a day which is not a Business Day or after normal business hours in the
place of receipt shall only be deemed to have been received on the next
Business Day.
20.4.2 Any notice or other communication given to the Bank shall be deemed to
have been given only on actual receipt.
21. ASSIGNMENTS AND TRANSFERS
21.1 BENEFIT OF AGREEMENT
This Agreement shall be binding upon and enure to the benefit of each
Party and its successors and assigns.
21.2 ASSIGNMENTS AND TRANSFERS BY THE BORROWER
The Borrower shall not be entitled to assign or transfer any of its
rights or obligations under this Agreement.
21.3 ASSIGNMENTS BY THE BANK
The Bank may assign any of its rights and benefits under the Financing
Documents to a Qualifying Bank.
21.4 TRANSFERS BY THE BANK
The Bank may transfer, in accordance with this Clause 21.4, any of its
rights and obligations under the Financing Documents subject (unless the
transfer is to an Affiliate of a Bank) to the prior consent of the
Borrower, not to be unreasonably withheld or delayed.
21.5 GRANT OF PARTICIPATIONS
It is intended that the Bank will grant participations in all or some of
the Facilities to a number of banks and financial institutions. The
Borrower agrees to co-operate with the Bank in granting those
participations and to enter into the Participation Agreement (or such
other documents as the Bank reasonably requires) to put the Borrower, the
Bank and any Bank Participants in the same position they would have been
in (as near as possible) had this Agreement been a syndicated facility,
the Bank been the facility agent and the Bank Participants been banks or
bank transferees under such a syndicated facility. It is intended to
enable Bank Participants to transfer their participations in a manner
similar to the transfer of commitments and participations under a
syndicated facility.
21.6 DISCLOSURE
The Bank (and any Bank Participant) may disclose information about the
Borrower and this Facility to anyone to whom it intends to transfer or
sub-participate its rights under this Facility.
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22. INDEMNITIES
22.1 BREAKAGE COSTS INDEMNITY
The Borrower shall indemnify the Bank on demand against any loss or
expense (including any loss of Margin or any other loss or expense on
account of funds borrowed, contracted for or utilised to fund any amount
payable under this Agreement, any amount repaid or prepaid under this
Agreement or any Advance) which the Bank has sustained or incurred as a
consequence of:
(a) an Advance not being made following the service of a Drawdown
Notice (except as a result of the failure of the Bank to comply
with its obligations under this Agreement);
(b) the failure of the Borrower to make payment on the due date of any
sum due under this Agreement;
(c) the occurrence of any Default or the operation of Clause 15.2; or
(d) any prepayment or repayment of (i) a Revolving Advance otherwise
than on the last day of the Interest Period in relation to that
Advance or (ii) a Term Advance otherwise than on an Interest Date
relative to that Advance.
22.2 CURRENCY INDEMNITY
22.2.1 Any payment made to or for the account of or received by the Bank in
respect of any moneys or liabilities due, arising or incurred by the
Borrower to the Bank in a currency (the "CURRENCY OF PAYMENT") other than
the currency in which the payment should have been made under this
Agreement (the "CURRENCY OF OBLIGATION") in whatever circumstances
(including as a result of a judgment against the Borrower) and for
whatever reason shall constitute a discharge to the Borrower only to the
extent of the Currency of Obligation amount which the Bank is able on the
date of receipt of such payment (or if such date of receipt is not a
Business Day, on the next succeeding Business Day) to purchase with the
Currency of Payment amount at its spot rate of exchange (as conclusively
determined by the Bank) in the London foreign exchange market.
22.2.2 If the amount of the Currency of Obligation which the Bank is so able to
purchase falls short of the amount originally due to the Bank under this
Agreement, then the relevant Borrower shall immediately on demand
indemnify the Bank against any loss or damage arising as a result of that
shortfall by paying to the Bank that amount in the Currency of Obligation
certified by the Bank as necessary so to indemnify it.
22.3 TRANSACTION INDEMNITY
22.3.1 The Borrower agrees to indemnify and hold the Bank and its directors,
officers and agents (the "INDEMNIFIED PARTIES") harmless from and against
any and all claims, damages, liabilities, taxes, costs and expenses
(including reasonable and proper legal fees, travel and other expenses
and disbursements) which may be incurred by or asserted against any
Indemnified Party in connection with or arising out of any investigation,
litigation or proceedings relating to this Agreement or the financing of
the acquisition of the Target Shares and/or the Target Assets (except for
any arising out of such Indemnified Party's gross negligence or wilful
default) whether or not the Indemnified Parties are parties thereto, and
will pay all costs and expenses of the Indemnified Parties (including all
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reasonable and proper legal fees, expenses and disbursements) incurred or
sustained by the Indemnified Parties in connection with the same whether
or not the Facilities are utilised or the acquisition of the Target
Shares and/or the Target Assets is completed.
22.3.2 Any Indemnified Party that proposes to assert the right to be indemnified
under this Clause 22.3 will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in
respect of which a claim is to be made against the Borrower under this
Clause 22.3 notify the Borrower of the commencement of such action, suit
or proceeding, enclosing a copy of all papers served, but the omission so
to notify the Borrower of any such action, suit or proceeding shall not
relieve the Borrower from any liability that it may have to any
Indemnified Party unless the Borrower is effectively precluded from
exercising any of its material rights to contest such claim as a result
of such omission to notify.
22.3.3 In case any such action, suit or proceeding shall be brought against any
Indemnified Party and notification has been made to the Borrower of the
commencement thereof, the Borrower shall be entitled to participate in
such action, suit or proceeding.
22.4 GENERAL
22.4.1 The indemnities in this Clause 22 shall constitute separate and
independent obligations from the other obligations contained in this
Agreement, shall give rise to separate and independent causes of action,
shall apply irrespective of any indulgence granted from time to time and
shall continue in full force and effect notwithstanding any judgment or
order for a liquidated sum or sums in respect of amounts due under this
Agreement or under any such judgment or order.
22.4.2 The certificate of the Bank as to the amount of any loss or damage
sustained or incurred by it shall be conclusive and binding on the
Borrower except for any manifest error.
23. LAW
This Agreement is governed by and shall be construed in accordance with
English law.
IN WITNESS the Parties have caused this Agreement to be duly executed on the
date set out above.
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THE BORROWER
SIGNED by )
XXXXX X XXXXXX ) /s/ B R MACKIE
for and on behalf of )
COTT UK LIMITED )
(now called COTT BEVERAGES LIMITED) )
)
THE BANK
SIGNED by )
XXXXX X XXXXXX ) /s/ X X XXXXXX
for and on behalf of )
LLOYDS BANK PLC )
(now called LLOYDS TSB BANK PLC)
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