EXHIBIT 10.17
DATED 1998
EUROPEAN MICRO PLC
as Borrower
and
NATIONAL WESTMINSTER BANK PLC
as Bank
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CREDIT AGREEMENT
RELATING TO A
BILATERAL STERLING REVOLVING LOAN FACILITY
OF UP TO /POUND STERLING/3,500,000
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WILDE SAPTE
0 Xxxxx Xxxxx
Xxxxxx XX0X 0XX
Tel. 0000 000 0000
Fax. 0000 000 0000
REF. # LVM/GP/128274/BF323501.06
TABLE OF CONTENTS
CLAUSE HEADING PAGE NO.
1. DEFINITIONS AND INTERPRETAION.........................1
1.1 Definitions .........................................1
1.2 Headings .............................................9
1.3 Intepretation.........................................9
2. FACILITY ............................................10
3. PURPOSE .............................................10
3.1 Purpose .............................................10
3.2 No monitoring........................................10
4. CONDITIONS PRECENDENT................................10
5. DRAWDOWN ............................................11
5.1 Commitment Period....................................11
5.2 Conditions to each Advance...........................11
5.3 Drawdown Notice......................................11
5.4 Limitations on Advances..............................11
5.5 Advances ............................................12
6. INTEREST ............................................12
6.1 Interest rate........................................12
6.2 Interest Periods.....................................12
6.3 Default interest.....................................13
6.4 Calculation and payment of interest..................13
6.5 Bank's determination.................................13
7. REPAYMENT AND PREPAYMENT.............................13
7.1 Repayment ...........................................13
7.2 Prepayment ..........................................14
8. CANCELLATION ........................................15
8.1 Cancellation ........................................15
8.2 Notice ..............................................15
8.3 Effect of cancellation...............................15
8.4 Limitation ..........................................15
9. CHANGES IN CIRCUMSTANCES.............................15
9.1 Illegality ..........................................15
9.2 Increased Costs......................................15
9.3 Market disruption....................................17
9.4 Mitigation ..........................................17
9.5 Certificates ........................................18
10. PAYMENTS ............................................18
10.1 Funds ...............................................18
10.2 Payments ............................................18
10.3 Change of account....................................18
10.4 Business Days........................................18
10.5 Currency ............................................18
10.6 Accounts as evidence.................................18
10.7 Partial payments.....................................19
10.8 Set-off and counterclaim.............................19
10.9 Grossing-up ........................................19
11. SECURITY ............................................21
12. REPRESENTATIONS AND WARRANTIES.......................21
12.1 Representations and warranties.......................21
12.2 Repetition ..........................................23
13. UNDERTAKINGS ........................................24
13.1 Information undertakings.............................24
13.2 Positive undertakings................................26
13.3 Negative undertakings................................27
13.4 Financial undertakings...............................28
14. DEFAULT ............................................#28
14.1 Default ............................................#28
14.2 Acceleration .......................................#30
15. SET-OFF ............................................31
16. FEES AND EXPENSES....................................31
16.1 Expenses ............................................31
16.2 Drawdown fee ........................................31
16.3 Commitment fee......................................#31
16.4 Documentary Taxes indemnity..........................32
16.5 VAT .................................................32
16.6 Indemnity payments...................................32
17. WAIVERS; REMEDIES CUMULATIVE.........................32
18. MISCELLANEOUS........................................33
18.1 Severance ...........................................33
18.2 Counterparts ........................................33
18.3 Entire agreement.....................................33
19. NOTICES .............................................33
19.1 Method ..............................................33
19.2 Delivery ............................................33
19.3 Addresses .. ........................................33
19.4 Deemed receipt.......................................34
20. ASSIGNMENTS AND TRANSFERS............................34
20.1 Benefit of Agreement.................................34
20.2 Assignments and transfers by Borrower................34
20.3 Assignments by Bank..................................34
20.4 Transfers by Bank....................................34
20.5 Consequences of transfer.............................35
20.6 Disclosure of information............................35
21. INDEMNITIES .........................................35
21.1 Breakage costs indemnity.............................35
21.2 Currency indemnity...................................35
21.3 General .............................................36
22. LAW .................................................36
SCHEDULE 1 CONDITIONS PRECEDENT...............................37
SCHEDULE 2 DRAWDOWN NOTICE....................................38
SCHEDULE 3 - Part 1 - GROUP COMPANIES.........................40
SCHEDULE 3 - Part 2 - MATERIAL COMPANIES......................40
SCHEDULE 4 MANDATORY # COST RATE FORMULA......................41
THIS AGREEMENT is made on 1998
BY:
(1) EUROPEAN MICRO PLC, a company incorporated in England and Wales with
registered number 2663964 (the "Borrower"); and
(2) NATIONAL WESTMINSTER BANK PLC as the Bank (as that term is more
particularly defined below)
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1. DEFINITIONS
In this Agreement:
"ACCOUNTS" means the audited consolidated accounts (including all
additional information and notes to the accounts) of the Borrower
together with the relevant directors' report and auditors' report.
"ADVANCE" means in advance made or to be made to the Borrower under the
Facility or, as the case may be, the outstanding principal amount of
any such advance.
"AUDITORS" means Messrs KPMG Peat Marwick or any other firm of
chartered accountants of internationally recognised standing that has
been appointed as auditors of the Borrower.
"AVAILABLE FACILITY" means the Facility Limit less the Loan.
"BANK" means National Westminster Bank Plc and its successors in title,
assignees and transferees.
"BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
banks and foreign exchange markets are open for business in London.
"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 including the European Central
Bank, or any other fiscal, monetary, regulatory or other authority.
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"COMMITMENT PERIOD" means the period starting on the date of this
Agreement and ending on the date falling 3 days before the Final
Repayment Date.
"COMPOSITE GUARANTEE" means a composite guarantee in respect of the
obligations of the other Group Companies to the Bank in the Bank's
standard form.
"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.
"DEFAULT" means any event specified as such in Clause 14.1.
"DELIVERY NOTE" means the delivery note to be attached to a Drawdown
Notice in accordance with Clause 5.3.
"DEPRECIATION" has the meaning given to that term by GAAP.
"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.
"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.
"ELIGIBLE DOCTORS" means the trade debtors of the Group at any time
but excluding:
(a) any debts which are more than 90 days past the due date for
payment;
(b) any debts which have been assigned to LND pursuant to the Invoice
Discounting Agreement; and
(c) any debts that are subject to any factoring or similar
arrangement which any member of the Group may enter into.
"ELIGIBLE INVENTORY" means any product manufactured by a Nominated
Manufacturer which is a current model of such Nominated Manufacturer
and which is capable of being discounted under the Invoice
Discounting Agreement.
"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 Material
Company.
"ENVIRONMENTAl" 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).
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"ENVIRONMENTAL LAW" means any statutory or common law, treaty,
convention, directive or regulation having legal or judicial effect
whether or a criminal or civil nature, concerning:
(a) pollution or contamination of the Environment;
(b) harm, 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
(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.
"EXCEPTIONAL ITEMS" has the meaning given to that term in FRS3, but
excluding those items listed in paragraph 20 of FRS3.
"FACILITY" means the Sterling revolving loan facility granted to the
Borrower under this Agreement.
"FACILITY LIMIT" means, subject to Clause 5.4, (pound)3,5000,000, as
reduced or cancelled in accordance with this Agreement.
"FACILITY PERIOD" means the period starting on the date of this
Agreement and ending on the date on which all the obligations and
liabilities of the Material Companies under the Financing Documents
are discharged in full and the Bank has no continuing obligation in
relation to the Facility.
"FINAL REPAYMENT DATE" means the date falling 364 days after the date
of this Agreement.
"FINANCE LEASE" means any lease, hire agreement, credit sale
agreement, purchase agreement, conditional sale agreement or
installment sale and purchase agreement which 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.
"FINANCIAL YEAR", in relation to a company, has the meaning given to
that term in section 223 of the Companies Xxx 0000.
"FINANCING DOCUMENTS" means this Agreement and the Security #
documents.
"FREE STOCK" means the stock in trade of the Group which is not
subject to any claims under reservation of title, liens or otherwise.
"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 the
jurisdiction of its incorporation.
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"GROUP" means the Borrower and its Subsidiaries; and "GROUP COMPANY"
means any of them.
"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 due date;
(e) any hire purchase agreement, conditional sale agreement or
lease, where that agreement has been entered into
primarily as a method of raising finance or financing the
acquisition of an asset;
(f) any guarantee, bond, stand-by letter of credit or other
similar instrument issued in connection with the
performance contracts;
(g) any interest rate or currency swap agreement or any other hedging
or derivatives instrument or agreement;
(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.
"INTEREST PERIOD" means each period determined in accordance with
Clause 6 for the purpose of calculating interest on Advances or
overdue amounts.
"INVOICE DISCOUNTING AGREEMENT" means the invoice discounting
agreement dated * and made between LND and the Borrower.
"LENDING OFFICE" means the office set out under the Bank's name in
Clause 19.3 or such other office in the United Kingdom through which
the Bank maintains the Facility under this Agreement.
"LIBOR" means, in relation to an Advance or other sum and in relation
to 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 deposits) at or
about 11.00 a.m. on the first day of that Interest Period;
or
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(b) if no such display rate is available, the rate per annum
(rounded upwards to the nearest whole multiple of 1/16% at
which the 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.
"LOAN" means, at any time, the aggregate of all Advances outstanding
at that time.
"LND" means Lombard NatWest Discounting Limited.
"MANDATORY # COST RATE" means the rate determined in accordance with
Schedule 4#.
"MARGIN" means 1.75 per cent per annum.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
ability of any Group Company to comply with its obligations under the
Financing Documents or (b) the business, financial condition or
assets of the Group taken as a whole.
"MATERIAL COMPANY" means the Borrower and each Group Company at any
time:
(a) whose profits are equal to or greater than 5 per cent of the
aggregate profits of the Group; or
(b) whose assets have a value equal to or greater than 5 per cent of
the aggregate value of all assets owned by the Group.
For the purpose of paragraph (a) above, profits shall be measured for
each period of 6 months duration ending on a Quarter Date.
"MORTGAGE DEBENTURE" means a mortgage debenture in the Bank's
standard form.
"NET INDEBTEDNESS" means Indebtedness less cash at bank and cash at
hand.
"NOMINATED MANUFACTURERS" means IBM, Hewlett Packard and Compaq and
"NOMINATED MANUFACTURER" shall be construed accordingly.
"OPERATING BUDGET" means, in relation to the Group and the period of
12 months starting not later than the date of this Agreement, the
Operating Plan, and in relation to each successive 12 month period
thereafter during the Facility Period:
(a) a projected balance sheet;
(b) a projected profit and loss account;
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(c) a projected cash flow statement; and
(d) projected covenant calculations relating to each financial
undertaking contained in Clause 13.4,
relative to each such period and on a month by month basis and with a
commentary drawing on the previous period's performance and forecast
market conditions.
"OPERATING PLAN" means the operating plan for the Group dated 5th
February 1998.
"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
excluding:
(a) profit attributable to minority interests;
(b) Extraordinary Items;
(c) any profit or loss arising on the disposal of fixed assets;
(d) mounts written off the value of investments;
(e) amounts written off the value attributed to net goodwill arising
on any acquisition after the date of this Agreement;
(f) income from participating interests in associated undertakings
and income from any other fixed asset investment; and
(g) realised and unrealised exchange gains and losses.
"PBITDA" means, in relation to any period, the aggregate of:
(a) PBIT; and
(b) Depreciation charged to the consolidated profit and loss account
of the Group during that period.
"PERMITTED ENCUMBRANCE" means:
(a) any Encumbrance subsisting under or in connection with any
Financing Document;
(b) any right of set-off arising by operation of law or in the
ordinary course of trading;
(c) any lien arising by operation of law in the ordinary course of
trading;
(d) any Encumbrance arising out of retention of title
provisions in a supplier's standard conditions of supply
in respect of goods acquired by a Group Company in the
ordinary course of trading; or
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(e) any agreement entered into by a Group Company in the
ordinary course of trading under which it is 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.
"PERMITTED INDEBTEDNESS" means:
(a) Indebtedness outstanding under any Financing Document;
(b) Indebtedness under any arrangement pursuant to which any
asset sold or otherwise disposed of by any Group Company
is or may be leased to or re-acquired by any Group Company
where such arrangement was entered into in the ordinary
course of trading; and
(c) Indebtedness under the Invoice Discounting Agreement.
"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 14.1, would be a
Default.
"PRE SOLD" means Eligible Inventory which a customer has indicated
orally (not more than 7 days before a Drawdown Date) or in writing
(not more than 1 month before a Drawdown Date) it wishes to take
delivery of.
"QUALIFYING BANK" means an institution which is a bank for the
purposes of section 349 of the Income and Corporation Xxxxx Xxx 0000.
"QUARTER DATE" means 31st March, 30th June, 30th September, 31st
December.
"SECURITY # DOCUMENTS" means the documents listed in Column 3 of
Schedule 3 and any other guarantee or document creating, evidencing
or acknowledging security in respect of any of the obligations and
liabilities of any Group Company under any Financing Document.
"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.
"STERLING" and "(POUND)" means the lawful currency for the time being
of the United Kingdom.
"SUBSIDIARY" means a subsidiary within the meaning of section 736 of
the Companies Xxx 0000.
"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.
"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
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may be, the aggregate amount standing in the Group'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 30th June 1997;
(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 the net
goodwill arising on any acquisition after the date of this
Agreement;
(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 the date of this Agreement;
(d) adding back any diminution due to the writing off of the
net goodwill arising on the any acquisition after the date
of this Agreement;
(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; and
(g) adding or deducting, as the case may be, any credit or any
debit balance on the Group'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.
"TOTAL DEBT" means at any time the aggregate (without double
counting) of:
(a) that part of the Indebtedness of Group Companies which
relates to obligations (whether present or future, actual
or contingent and whether incurred as principal or surety)
for the payment or repayment of money in respect of
principal incurred in respect of (i) moneys borrowed or
raised, (ii) any bond, note, loan stock, debenture or
similar instrument, or (iii) any acceptance credit, xxxx
discounting, note purchase, factoring or documentary
credit facility (including, for the avoidance of doubt,
any indebtedness under this Agreement); and
(b) the capital element of all rentals or, as the case may be,
other payments payable under any Finance Lease entered
into by any Group Company.
"TOTAL DEBT COSTS" means, in relation to any period, the aggregate
of:
(a) all interest, commissions and other financing charges
payable by any Group Company in respect of that period;
(b) to the extent not included in paragraph (a) above, all
finance costs (as defined in FRS4) charged to the profit
and loss account of the Group in respect of that period;
(c) all amounts payable by any Group Company in respect of
that period under any interest rate protection agreement
(less any amounts receivable by any Group
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Company in respect of that period under any interest rate
protection agreement); and
(d) the interest element of all rentals or, as the case may
be, other amounts payable in respect of that period under
any Fiancee Lease entered into by any Group Company.
"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.
1.2. HEADINGS
The headings in this Agreement are for convenience only and shall be
ignored in construing this Agreement.
1.3. INTERPRETATION
In this Agreement (unless otherwise provided):
(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 and which has endorsed on it the
words "in the agreed form" and which is initialled by or
on behalf of the Bank and the Borrower;
(f) references to "ASSETS" shall include revenues sand
property 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;
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(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, body corporate, 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; and
(k) accounting terms shall be construed so as to be consistent with
GAAP; and
(l) references to time are to London time.
2. FACILITY
Subject to the terms of this Agreement, the Bank agrees to make
available to the Borrower a Sterling revolving credit facility in the
maximum principal amount of (pound)3,5000,000.
3. PURPOSE
3.1. PURPOSE
The Borrower shall use the proceeds of all Advances to purchase
Eligible Inventory from Nominated Manufacturers.
3.2. NO MONITORING
The Bank shall not be obliged to investigate or monitor the use or
application of the proceeds of the Advances.
4. CONDITIONS PRECEDENT
Notwithstanding any other term of this Agreement, the Bank shall not
be under any obligation to make the Facility available to the
Borrower unless it has notified the Borrower that all the conditions
set out in Schedule 1 have been satisfied on or before 12th June
1998.
5. DRAWDOWN
5.1. COMMITMENT PERIOD
Subject to the terms of this Agreement, Advances shall be made to the
Borrower at any time during the Commitment Period when requested by
means of a Drawdown Notice in accordance with this Clause 5. At the
close of business on the last day of the Commitment Period, the
commitment of the Bank under the Facility shall be automatically
cancelled.
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5.2. CONDITIONS TO EACH ADVANCE
The obligation of the Bank to make available each Advance is subject
to the conditions that on the date on which the relevant Drawdown
Notice is given and on the Drawdown Date:
(a) the representations and warranties in Clause 12 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.
5.3. DRAWDOWN NOTICE
5.3.1. Whenever the Borrower wishes to draw down under the Facility, it
shall deliver to the Bank not later than 10.30 a.m. on the Drawdown
Date:
(a) a duly completed Drawdown Notice confirming:
(i) the proportion of the Eligible Inventory which
is Pre Sold; and
(ii) that Disposal of the Eligible Inventory will
take place before the expiry of the relevant
Interest Period
(b) a copy of the delivery note in respect of which the
Advance is to be made identifying the Eligible Inventory
5.3.2. A Drawdown Notice shall be irrevocable and the Borrower shall be
obliged to borrow in accordance with its terms.
5.4. LIMITATIONS ON ADVANCES
The following limitations apply to Advances:
(a) the Drawdown Date of an Advance shall be a Business Day
falling before the end of the Commitment Period;
(b) the principal amount of an 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 Facility;
(c) no Advance shall be made if the making of that Advance
would result in the Loan exceeding the Facility Limit;
(d) no more than 10 Advances may be outstanding at any one
time;
(e) the amount of an Advance shall not exceed:
(i) 75 per cent of the purchase price of the
Eligible Inventory as shown in the relevant
Delivery Note where at least 30 per cent of such
Eligible Inventory is Pre Sold; or
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(ii) 65 per cent of the purchase price of the
relevant Eligible Inventory as shown in the
relevant Delivery Note where less than 30 per
cent of such Eligible Inventory is Pre Sold; and
(f) a separate Advance must be made in respect of each
Delivery Note.
5.5. ADVANCES
Subject to the terms of this Agreement, the Bank acting through its
Lending Office shall make available to the Borrower on the Drawdown
Date for an Advance an amount equal to that Advance.
6. INTEREST
6.1. 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.
6.2. INTEREST PERIODS
6.2.1. The Borrower shall select an Interest Period for an Advance in the
relevant Drawdown Notice of 1 day, 7 day's, 14 day's or 1 month's
duration (or such other Interest Period as the Bank may allow).
6.2.2. 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).
6.2.3. 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.
6.2.4. If an Interest Period would otherwise extend beyond the Final
Repayment Date, it shall be shortened so that it ends on the Final
Repayment Date.
6.3. DEFAULT INTEREST
6.3.1. 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.
6.3.2. So long as the overdue amount remains unpaid, the default interest
rate shall be recalculated in accordance with the provisions of this
Clause 6.3 on the last day of each
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such Interest Period and any unpaid interest shall be compounded at
the end of each Interest Period.
6.4. CALCULATION AND PAYMENT OF INTEREST
6.4.1. At the beginning of each Interest Period, the Bank shall notify the
Borrower of the rate and amount of interest payable for the Interest
Period (but in the case of any default interest calculated under
Clause 6.3, any such notification need not be made more frequently
than weekly). Each notification shall set out in reasonable detail
the basis of computation of the amount of interest payable.
6.4.2. Interest due from the Borrower under this Agreement shall:
(a) accrue from day to day at the rate calculated under this
Clause 6;
(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;
(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.
6.5. BANK'S DETERMINATION
The determination by the Bank of any interest payable under this
Clause 6 shall be conclusive and binding on the Borrower in the
absence of manifest error.
7. REPAYMENT AND PREPAYMENT
7.1. REPAYMENT
7.1.1. Subject to Clause 7.1.3, the Borrower shall repay each Advance in
full on the last day of the Interest Period relating to that Advance.
7.1.2. Subject to the terms of this Agreement, any amounts repaid under this
Agreement may be re-borrowed.
7.1.3. Subject to Clause 7.1.4, if all or part of an existing Advance made
to the Borrower is to be repaid from the proceeds of all or part of a
new Advance to be made to the Borrower, then 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 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.
7.1.4. Only Advances with an Interest Period of 1 day's duration may be
repaid from the proceeds of a new Advance and in any event no Advance
shall be repaid by a new Advance more than 3 times.
7.2. PREPAYMENT
Subject to Clauses 9, 10 and 21 the Borrower may not prepay any
Advance before the end of its Interest Period.
7.3. EXTENSIONS TO COMMITMENT PERIOD
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7.3.1. The Borrower may at any time by notice to the Bank request an
extension to the Commitment Period, subject to the provisions of this
Clause 7.3.
7.3.2. Upon receipt of any such request, the Bank shall undertake a full
credit assessment of the Borrower. The Bank shall be under no legal
or moral obligation to extend the Commitment Period. No extension
shall be effective unless agreed in writing by the Bank.
7.3.3. If the Borrower requests an extension during the final thirty days of
the Commitment Period, the Bank shall, at its absolute discretion,
have the option:
(a) (subject to Clause 7.3.2) to extend the Commitment Period
for a further period of 364 days from the date on which
the Commitment Period is then due to expire; or
(b) to decline such request.
7.3.4. If the Borrower requests an extension otherwise than in accordance
with Clause 7.3.3., the Bank shall, at its absolute discretion, have
the option:
(a) (subject to Clause 7.3.2) to extend the Commitment Period
for a further period of 364 days from the date on which
the Bank gives written notice to the Borrower of the
Bank's agreement to extend the Commitment Period; or
(b) to decline such request, in which event, the Bank may, at
or after the time of such request, immediately cancel the
undrawn portion of the Facility.
7.3.5. On any extension the Bank may require the Borrower to pay a further
commitment fee.
8. CANCELLATION
8.1. CANCELLATION
The Borrower may, by giving the Bank not less than 5 days' prior
notice, cancel all or part of the Available Facility (but if in part,
in a minimum amount of (pound)500,000 and an integral multiple of
(pound)250,000).
8.2. 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.
8.3. EFFECT OF CANCELLATION
The Borrower may not borrow any part of the Facility which has been
cancelled. Any cancellation shall reduce the Facility Limit
accordingly.
8.4. LIMITATION
The Borrower may not cancel all or part of the Facility except as
expressly provided in this Agreement.
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9. CHANGES IN CIRCUMSTANCES
9.1. ILLEGALITY
If it is or becomes illegal for the Bank to maintain the Facility or
to continue to make available or fund any Advance, then:
(a) the Bank shall notify the Borrower; and
(b) (i) the Facility shall be cancelled immediately and
the Facility Limit shall be reduced to zero;
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
the Bank under this Agreement) within 5 Business
Days of demand by the Bank (or, if later and if
permitted by the relevant law, on the last day
of the Interest Period of the relevant
Advances).
Any such prepayment under paragraph (b)(ii) above shall be subject to
Clause 21.1.
9.2. INCREASED COSTS
9.2.1. If, after the date of this Agreement, a Change occurs which causes an
Increased Cost (as defined in Clause 9.2.3) 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 the Bank (or any company of which the Bank is a
Subsidiary) for the Increased Cost.
9.2.2. Any demand made under Clause 9.2.1 shall set out in reasonable detail
so far as is practicable the basis of computation of the Increased
Cost.
9.2.3. In this Clause 9.2:
"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 Facility or any
Advance or the funding or 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 the Facility or any Advance 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 the Facility or
of a change to the weighting of the commitment under the
Facility or any Advance; and
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(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, 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.
9.2.4. The Borrower shall not be obliged to make a payment in respect of an
Increased Cost under this Clause 9.2 if and to the extent that the
Increased Cost has been compensated for by the payment of Mandatory
Liquid Asset Costs or the operation of Clause 10.9.
9.2.5. If the Borrower is required to pay any amount to the Bank under this
Clause 9.2, 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
10 days' prior notice (which shall be irrevocable), the Borrower may
prepay all, but not part, of the Loan together with accrued interest
on the amount prepaid. Any such prepayment shall be subject to Clause
21.1. On any such prepayment the Facility shall be automatically
cancelled and the Facility Limit shall be reduced to zero.
9.3. MARKET DISRUPTION
If, in relation to a proposed Advance:
(a) the Bank determines that, because of circumstances
affecting the London interbank market generally,
reasonable and adequate means do not exist ascertaining
LIBOR for that Advance for the relevant Interest Period;
or
(b) the Bank is of the opinion that:
(i) matching deposits may not be available to it in
the London interbank market in the ordinary
course of business to fund that Advance for the
relevant Interest Period; or
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(ii) the cost to it of obtaining matching deposits in
the London interbank market would be in excess
of LIBOR for the relevant Interest Period,
the Bank shall promptly notify the Borrower of that event and 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 (whether in
Sterling or another currency). Any substitute basis agreed by the
Bank and the Borrower shall take effect in accordance with its terms.
9.4. MITIGATION
9.4.1. If any circumstances arise in respect of the Bank which would, or
upon the giving of notice would, result in the operation of Clause
9.1., 9.2, 9.3 or 10.9 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 changing its
Lending office or 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.
9.4.2. Nothing in this Clause 9.4 shall limit, reduce, affect or otherwise
qualify the rights of the Bank or the obligations of the Borrower
under Clauses 9.1, 9.2, 9.3 and 10.9.
9.5. CERTIFICATES
The certificate or notification of the Bank as to any of the matters
referred to in this Clause 9 shall be in reasonable detail and shall
be conclusive and binding on the Borrower except for any manifest
error.
10. PAYMENTS
10.1. FUNDS
All payments under this Agreement shall be made for value on the due
date in freely transferable and readily available funds.
10.2. PAYMENTS
10.2.1. Each payment to the Borrower shall be made to the account of the
Borrower with [Nottingham branch], account number 00000000, sort code
60 80 09.
10.2.2. Each payment to the Bank shall be made to [Nottingham branch] for the
account of the Bank, account number 00000000, sort code 60 80 09.
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10.3. CHANGE OF ACCOUNT
The Borrower or the Bank may change its receiving account by not less
than 5 Business Days' notice to the other.
10.4. 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 by the next
Business Day in the same calendar month (if there is one) or the
preceding Business Day (if there is not).
10.5. 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.
10.6. ACCOUNTS AS EVIDENCE
The Bank shall maintain in accordance with its usual practice an
account which shall as between the Borrower and the Ban, be prima
facie evidence of the amounts from time to time advanced by, owing
to, paid and repaid to the Bank under this Agreement.
10.7. PARTIAL PAYMENTS
10.7.1. 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 under this Agreement in the following order:
(a) first, in or towards payment of any unpaid costs and
expenses of the Bank under this Agreement;
(b) second, in or towards payment of any accrued interest due
but unpaid under this Agreement;
(c) third, in or towards payment of any principal due but
unpaid under this Agreement; and
(d) fourth, in or towards payment of any other sum due but
unpaid under this Agreement.
10.7.2. The Bank may vary the order set out in Clauses 10.7.1(b) to (d).
10.7.3. Clauses 10.7.1 and 10.7.2 shall override any appropriation made by
the Borrower.
10.8. SET-OFF AND COUNTERCLAIM
All payments by the Borrower under this Agreement shall be made
without set-off or counterclaim.
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10.9. GROSSING-UP
10.9.1. Subject to Clause 10.9.2, 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.
10.9.2. 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 next amount received
by 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 Bank
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 Bank of
receipts evidencing each deduction or withholding which
has been made.
10.9.3. The Borrower shall not be required to pay an additional amount under
this Clause 10.9 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).
10.9.4. 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 10.9, the Bank shall,
provided that it has received all amounts which are then due and
payable by the obligors under any Financing Document, pay to the
Borrower (to the extent that the 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
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worse position than it would have been in if the deduction or
withholding had not be 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;
(c) If the Bank has made a payment to the Borrower pursuant to
this Clause 10.9.4 on account of any Tax benefit and its
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 10.9.4 been made. Any sums
payable by the Borrower to the Bank under this Clause
10.9.4 shall be subject to Clause 16.6.
10.9.5. The Bank shall not be obliged to make any payment under Clause 10.9.4
if, by doing so, it would contravene the terms of any applicable law
or any notice, direction nor requirement of any governmental or
regulatory authority (whether or not having the force of law).
10.9.6. If the Borrower is required to make an increased payment for the
account of the Bank under Clause 10.9.2, then, without prejudice to
that obligation and so long as such requirement exists and subject to
the Borrower giving the Bank not less than 10 days' prior notice
(which shall be irrevocable), the Borrower may prepay all, but not
part, of the Loan together with accrued interest on the amount
prepaid. Any such prepayment shall be subject to Clause 21.1. On any
such prepayment the Facility shall be automatically cancelled and the
Facility Limit shall be reduced to zero.
11. SECURITY
The obligations and liabilities of the Borrower to the Bank under
this Agreement shall be secured by the interests and rights granted
in favour of the Bank under the Security # documents.
12. REPRESENTATIONS AND WARRANTIES
12.1. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Bank that:
(a) STATUS: each Material 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 Material Company has power to
execute, deliver and perform its obligations under the
Financing Documents to which it is a
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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: the obligations of each Material
Company under the Financing Documents to which it is a
party constitute its legal, valid, binding and enforceable
obligations;
(d) CONTRAVENTIONS: the execution, delivery and performance by
each Material Company of the Financing Documents to which
it is a 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, any
agreement or other instrument to which it is a
party or any license or other authorisation to
which it is subject or by which it or any of its
property is bound; 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 knowledge, information or belief is
pending or threatened, against any Group Company which, if
decided adversely, could reasonably be expected to have a
Material Adverse Effect and nor is there subsisting any
unsatisfied judgment or award given against any of them by
any court, arbitrator or other body;
(h) ACCOUNTS:
(i) each of the latest Accounts required to be
delivered under Clause 13.1(a) is prepared in
accordance with GAAP and gives a true and fair
view of the financial position of the Group as
at the date to which they were prepared and for
the period then ended; and
(ii) each of the latest set of management accounts
required to be delivered under Clause 13.1(c)
shows with reasonable accuracy the financial
condition of the Borrower 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 Material Company;
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(j) NO ENCUMBRANCES CREATED: the execution of the Financing
Documents by the Material Companies and the exercise of
each of their respective rights and the performance of
each of their respective obligations under the Financing
Documents will not result in the creation of, or any
obligation to create, any Encumbrance over or in respect
of any of their assets;
(k) AUTHORISATIONS: all authorisations, approvals, licenses,
consents, filings, registrations, payment of duties or
taxes and notarisations required:
(i) for the conduct of the business, trade and
ordinary activities of each Material Company;
(ii) for the performance and discharge of its
obligations under the Financing Documents to
which it is a party; and
(iii) in connection with the execution, delivery,
validity, enforceability or admissibility in
evidence of the Financing 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
information delivered to the Bank under this Agreement;
(m) NO MATERIAL ADVERSE CHANGE: since 5th February 1998 no
event has occurred which has had or could be reasonably
expected to have a Material Adverse Effect;
(n) ENVIRONMENTAL: each Group Company has and has at all times
complied with all applicable Environmental Law
non-compliance with which could reasonably be expected to
have a Material Adverse Effect, every consent,
authorisation, license 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,
the absence of which could reasonably be expected to have
a Material Adverse Effect, 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, which
default could reasonably be expected to have a Material
Adverse Effect 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 which
could reasonably be expected to have a Material Adverse
Effect having regard to the cost to that Group Company of
meeting such a claim; and
(o) INFORMATION PACKAGE:
(i) the factual information contained in the
Operating Plan was, at the date of the Operating
Plan, true and accurate in all respects and not
misleading in any respect, there are no other
facts the omission of
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which would make any fact
or statement in the Operating Plan misleading in
any respect and nothing has occurred which would
render any fact or statement in the Operating
Plan untrue or misleading in any respect; and
(ii) all estimates, forecasts and projections
contained or referred to in the Operating Plan,
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 revision to
any of those estimates, forecasts or projections
in order for them to be fair and reasonable.
12.2. REPETITION
The representations and warranties in Clause 12.1 shall survive the
execution of this Agreement and (other than those set out in Clauses
12.1(e), (g), (i), (j), (k), (m) and (o) shall be deemed to be
repeated by the Borrower on the date on which each Drawdown Notice is
given and on the first day of each Interest Period for each Advance
as if made with reference to the facts and circumstances existing at
that time.
13. UNDERTAKINGS
13.1. INFORMATION UNDERTAKINGS
The Borrower undertakes that during the Facility Period it shall,
unless the Bank otherwise agrees:
(a) 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 together with the audited
accounts of each Material Company with a copy of the
relevant management letter (if any) addressed by the
Auditors to the directors of the Borrower;
(b) MANAGEMENT ACCOUNTS: as soon as the same become available
(and in any event within 21 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
consolidated management accounts (the "MANAGEMENT
ACCOUNTS") of the Borrower for each such Accounting Period
in form and substance satisfactory to the Bank and which
shall include the following information in respect of each
such Accounting Period:
(i) a statement of profit and loss;
(ii) a balance sheet;
(iii) a cashflow statement; and
(iv) an analysis of the best selling 40 current
products in the Borrower's range,
together with a comparison, where appropriate, of all such
information with the estimates, forecasts and projections
in the relevant Operating Budget or any
-23-
replacement or substitution made therefor) in relation to
each such Accounting Period including an analysis
justifying any variations therefrom and, if necessary,
revised estimates, forecasts and projections;
(c) OPERATING BUDGETS:
(i) provide to the Bank (in a format acceptable to
the Bank) an Operating Budget for each of its
Financial Years during the Facility Period, not
less than 30 days prior to the start of each
such Financial Year; and
(ii) if any Group Company shall determine that any of
the estimates, forecasts or projections made in
relating 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 board of
directors of the relevant company and the
Borrower,
(d) SHAREHOLDERS' DOCUMENTS: deliver to the Bank copies of all
documents despatched by it to its shareholders or its
creditors at the same time as they are despatched;
(e) COMPLIANCE CERTIFICATES: deliver to the Bank:
(i) together with the Accounts and Management
Accounts specified in Clauses 13.1(a) and
(b); and
(ii) promptly at any other time, if the Bank so
requests,
a certificate signed by two of its senior officers on its
behalf certifying that no Default is outstanding or, if a
Default is outstanding, specifying the Default and the
steps, if any, being taken to remedy it;
(f) AUDITORS CONFIRMATION: if the Bank disagrees with any such
calculations relevant to the financial undertakings
contained in Clause 13.4.1 made for the purposes of Clause
14.1(e) the Bank shall notify the Borrower and promptly
thereafter the Borrower shall procure that the Auditors
shall promptly review such calculations and notify the
Bank as soon as practicable as to whether such
calculations are made correctly and in accordance wit the
terms of this Agreement and if not made correctly,
promptly provide the Bank with the correct calculations
thereof made in accordance with the terms of this
Agreement;
(g) OTHER INFORMATION: supply to the Bank such information,
documents and records about the business, financial
condition, operations and prospects of any Group Company
as the Bank may from time to time reasonably require;
(h) GAAP: ensure that all Accounts and other financial
information submitted to the Bank have been prepared in
accordance with GAAP;
(i) DEFAULT, LITIGATION, ETC: promptly, upon becoming aware of
the same, notify the Bank of:
-24-
(i) the occurrence of a Default or Potential
Default;
(ii) any litigation, arbitration or administrative
proceeding commenced against any Group Company
involving a potential liability of any Group
Company in excess of (pound)50,000;
(iii) any Encumbrance (other than a Permitted
Encumbrance) attaching to any of the assets
of any Group Company; and
(iv) any occurrence (including any third party claim
or liability) which could reasonably be expected
to have a Material Adverse Effect; and
(j) MANAGEMENT: notify the Bank if any of Xxxxxxxx Xxxxxxx and
Xxxxxxxxxx Xxxxxxxxx ceases to be an officer or employee
of the Borrower.
13.2. POSITIVE UNDERTAKINGS
The Borrower undertakes that during the Facility 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
extend 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 be set aside adequate reserves with
respect to any such Taxes or charges so contested in
accordance with GAAP;
(b) INSURANCE: maintain insurance cover in relation to its
business and assets of a type and in an amount as is
usual for prudent companies carrying on a business such as
that carried on by it;
(c) AUTHORISATIONS: obtain, maintain and comply with the terms
of any authorisation, approval, license, consent,
exemption, clearance, filing or registration required:
(i) for the conduct of its business, trade and
ordinary activities; and
(ii) to enable it to perform its obligations under,
or for the validity, enforceability or
admissibility in evidence of, any Financing
Document;
(d) ACCESS: 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 and on reasonable notice, access to the property,
premises and accounting books and records of any Group
Company and to the officers of any Group Company;
(e) RANKING OF OBLIGATIONS: ensure that its obligations under
the Financing Documents to which it is a party shall at
all times rank at least pari passu with all its other
present and future unsecured and unsubordinated
Indebtedness except for any obligations which are
mandatorily preferred by law and not by contract;
-25-
(f) 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 obtains all its rights and benefits under the
Financing Documents and in particular but without
limitation will procure that any Company which becomes a
Material Company will execute a Mortgage Debenture and
Composite Guarantee in favour of the Bank;
(g) COMPLIANCE WITH ENVIRONMENTAL LAW: comply in all respects
with Environmental Law.
(h) 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 that 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;
(i) SALES OF ELIGIBLE INVENTORY: ensure that all sales of
Eligible Inventory on credit terms comply with the terms
and conditions of the Invoice Discounting Agreement;
(l) EXCHANGE RATE HEDGING: make all such arrangements that a
prudent company carrying on the same trade as that Group
Company would make in relation to the hedging of its
exchange rate liabilities; and
(k) MILLENIUM RISK: take all such steps as a prudent company
carrying on the same trade as that Group Company would
take in relation to all computer software owned or used by
that Group Company in connection with defects arising as a
result of the date 1st January 2000 and thereafter.
13.3. NEGATIVE UNDERTAKINGS
The Borrower undertakes that during the Facility Period it shall not,
and it shall procure that none of the Group Companies 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: make a Disposal other than:
(i) in the ordinary course of its trading
activities; or
(ii) whether the proceeds of the Disposal are used
immediately to purchase an asset to replace
directly the asset the subject of that Disposal;
or
(iii) 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) and (ii) above in
any Financial Year of the Borrower does not
exceed (pound)1,000,000 (for the purposes of
this paragraph, the value of any asset shall be
the greater of its book value and the
consideration received for it);
-26-
(c) CHANGE OF BUSINESS: make any substantial change to the
general nature or scope of the business of the Borrower or
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) LOANS: make an loans or grant any credit to or for the
benefit of any person, other than amounts of credit
allowed in the ordinary course of its trading activities;
(f) INDEBTEDNESS: incur any Indebtedness other than Permitted
Indebtedness;
(g) ACQUISITIONS: acquire any business of, or shares or
securities of, any company other than where the aggregate
of the consideration payable for, and Indebtedness assumed
by Group Companies in connection with, acquisitions made
by Group Companies in any Financial Year of the Borrower
does not exceed (pound)1,000,00.#
13.4. FINANCIAL UNDERTAKINGS
13.4.1. The Borrower undertakes to ensure that during the Facility Period,
unless the Bank otherwise agrees:
(a) PBIT TO TOTAL DEBT COSTS
The ratio of PBIT to Total Debt Costs for the period of 12
months ending on the last day of each month during the
Facility Period shall not be less than 3:1.
(b) TOTAL LEVERAGE RATIO
The ratio of Total Debt to PBITDA at any time during the
period of 12 months ending on the last day of each month
during the Facility Period shall not be greater than
2.5:1;
(c) MINIMUM TANGIBLE NET WORTH
Tangible Net Worth shall not on the date referred to in
Column A below be less than the amount set opposite that
date in Column B below.
COLUMN A COLUMN B DATE AMOUNT
30th June 1997 (pound)1,500,000 30th June 1998 (pound)2,500,000
(d) NET INDEBTEDNESS COVER
The ratio of the aggregate value of Free Stock and
Eligible Debtors to Net Indebtedness shall not at any time
be less that 1.5:1.
13.4.2. The calculation of ratios and other amounts under this Clause 13.4
shall be made by the Bank by reference to latest Accounts and
management accounts and other financial information of the Group for
the period in relation to which the calculation falls to be made.
Each determination of the Bank under this Clause 13.4 shall be
conclusive and binding on the Borrower except for any manifest error.
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14. DEFAULT
14.1. DEFAULT
Each of the following shall be a Default:
(a) NON-PAYMENT: 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 in relation to the payment of interest
only 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 the Borrower and such
amount is paid within 3 Business Days after its due date
for payment; or
(b) OTHER DEFAULTS: any Material Company breaches any of its
obligations under any Financing Document (other than the
obligations referred to in Clause 14.1(a) but including a
breach of any of the undertakings pursuant to Clause 13.1)
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 any
Material Company under any Financing Document or in any
document delivered by or on behalf of the Borrower under
or in connection with any Financing Document is incorrect
when made or deemed to have been repeated; or
(d) UNLAWFULNESS OR REPUDIATION: it is unlawful for any
Material Company to perform or comply with, or any
Material Company repudiates, any of its obligations under
any Financing Document; or
(e) CROSS-DEFAULT: any Indebtedness of all or any Group
Companies in excess of, in aggregate, (pound)10,000;
(i) is not paid when due; or
(ii) is declared to be or otherwise becomes due and
payable prior to its specified maturity,
or any creditor of all or any Group Companies becomes
entitled to declare any such Indebtedness due and payable
prior to its specified maturity; or
(f) 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 and such process is not discharged within 14 days;
or
(g) ENFORCEMENT OF SECURITY: any Encumbrance over any of the
assets of any Group Company becomes enforceable; or
(h) INABILITY TO PAY DEBTS: any Group Company:
(i) suspends payment of its debts or is unable or
admits its inability to pay its debts
as they fall due; or
-28-
(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
(i) 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 to be adjudicated or found
insolvent; or
(ii) the winding-up or dissolution of any Group
Company other than in connection with a solvent
reconstruction, the terms of which have been
previously approved in writing by the Bank; 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
(j) ADJUDICATION OR APPOINTMENT: any adjudication, order or
appointment is made under or in relation to any of the
proceedings referred to in Clause 14.1(I); or
(k) ADMINISTRATION ORDER: an application is made to the court
for an administration order under the Insolvency Xxx 0000
with respect to any Group Company; or
(l) ANALOGOUS PROCEEDINGS: any event occurs or proceeding is
taken with respect to any Group Company in any
jurisdiction to which it is subject which has an effect
equivalent or similar to any of the events mentioned in
Clause 14.1(f), (h), (i), (j) or (k); or
(m) CESSATION OF BUSINESS: any Group Company suspends, ceases
or threatens to suspend or cease to carry on all or a
substantial part of its business; or
(n) CHANGE OF CONTROL: a person (whether alone or together
with any associated person or persons) becomes the
beneficial owner of shares in the issued share capital of
the Borrower carrying the right to exercise more than 50
per cent of the votes exercisable at a general meeting of
the Borrower (for the purposes of this Clause 14.1(n),
"ASSOCIATED PERSON" means, in relation to any person, a
person who is (i) "acting in concert" (as defined in the
City Code on Takeovers and Mergers) with that person or
(ii) a "connected person" (as defined in section 839 of
the Income and Corporation Taxes Act 1988) of that
person); or
(o) 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
(p) INVOICE DISCOUNTING AGREEMENT: the Invoice Discounting
Agreement is terminated for any reason (other than on
terms which have previously been approved in writing by
the Bank) or any material variation or amendment is made
to the Invoice Discounting Agreement (other than with the
Bank's prior written consent).
-29-
14.2. ACCELERATION
If a Default occurs and remains unremedied the Bank may be notice to
the Borrower:
(a) cancel the Facility and require the Borrower immediately
to repay the Loan together with accrued interest and all
other sums payable under this Agreement, whereupon they
shall become immediately due and payable; or
(b) place the Facility on demand, whereupon the Loan together
with accrued interest and all other sums payable under
this Agreement shall become repayable on demand made by
the Bank.
Upon the service of any such notice by the Bank the Bank's
obligations under this Agreement shall be terminated, the Facility
shall be cancelled and the Facility Limit shall be reduced to zero.
15. 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 spot rate of exchange of the Bank for the purpose
of the set-off.
16. FEES AND EXPENSES
16.1. EXPENSES
The Borrower shall on demand pay all expenses incurred (including
legal, valuation and accounting fees), and any VAT on those expenses:
(a) by the Bank in connection with the negotiation,
preparation and execution of the Financing Documents and
the other documents contemplated by the Financing
Documents;
(b) by the Bank in connection with the granting of any
release, waiver or consent or in connection with any
amendment or variation of any Financing Document; and
(c) by the Bank in 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 or Potential
Default.
16.2. DRAWDOWN FEE
The Borrower shall pay to the Bank a drawdown fee at the rate of 0.5
per cent of each Advance, such fee to be payable on the making of the
relevant Advance.
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16.3. COMMITMENT FEE
The Borrower shall pay a commitment fee in Sterling to the Bank of
(pound)40,000 on the date of this Agreement.
16.4. 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.
16.5. VAT
16.5.1. 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.
16.5.2. 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.
16.6. 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 Bank'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. 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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18. MISCELLANEOUS
18.1. SEVERANCE
If any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
(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.
18.2. 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.
18.3. ENTIRE AGREEMENT
This Agreement in conjunction with the Security # documents
constitutes the entire agreement between the Parties in relation to
the Facility and supersedes all previous proposals, agreements and
other written and oral communications in relation to the Facility.
19. NOTICES
19.1. 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 fax or letter.
19.2. DELIVERY
Any notice or other communication to be given by one Party to another
under this Agreement shall (unless one P arty has by 15 days' notice
to the other Party specified another address) be given to that other
Party at the respective addresses given in Clause 19.3.
19.3. ADDRESSES
The address and fax number of the Borrower and Bank are:
(A) the Borrower:
00-00 Xxxxxx Xxxxxx
Xxxxxxxxxx
Xxxxxxxx XX00 0XX
Attention: *
Fax: 0000 000 0000
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(B) the Bank:
NatWest UK
Corporate Banking Services
0xx Xxxxx, Xxxxxxx Xxxxx
Xxxxxxx Xxxxxxxxx
Xxxxxxxxxx XX0 0XX
Attention: X. Xxxxxxx
Fax: 0000 000 000
19.4. DEEMED RECEIPT
19.4.1. Any notice or other communication given by the Bank shall be deemed
to have been received:
(a) if sent by fax, with a confirmed receipt of transmission
from the receiving machine, on the day
on which transmitted;
(b) in the case of a notice given by hand, on the day of
actual delivery; and
(c) 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 be deemed to have been
received on the next Business Day.
19.4.2. Any notice or other communication given to the Bank shall be deemed
to have been given only on actual receipt.
20. ASSIGNMENTS AND TRANSFERS
20.1. BENEFIT OF AGREEMENT
This Agreement shall be binding upon and enure to the benefit of each
Party and its successors and assigns.
20.2. ASSIGNMENTS AND TRANSFERS BY BORROWER
The Borrower shall not be entitled to assign or transfer any of its
rights or obligations under this Agreement.
20.3. ASSIGNMENTS BY BANK
The Bank may (with the prior consent of the Borrower) assign any of
its rights and benefits under any Financing Document to another bank
or other financial institution.
20.4. TRANSFERS BY BANK
The Bank may with the prior consent of the Borrower) transfer any of
its rights and obligations under any Financing Document to another
bank or other financial institution.
The Borrower shall enter into such documents as the Bank may
reasonably stipulate in order to effect any such transfer.
-33-
20.5. CONSEQUENCES OF TRANSFER
The Borrower shall be under no obligation to pay any greater amount
under this Agreement following an assignment or transfer by the Bank
of any of its rights or obligations pursuant to this Clause 20 if, in
the circumstances existing at the time of such assignment or
transfer, such greater amount would not have been payable but for the
assignment or transfer.
20.6. DISCLOSURE OF INFORMATION
The Bank may disclose to its professional advisers and to any actual
or potential assignee, transferee or sub-participant any information
which the Bank has acquired under or in connection with any Financing
Document.
21. INDEMNITIES
21.1. 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 14.2; or
(d) any repayment or prepayment of an Advance otherwise than
on the last day of the Interest Period in relation to that
Advance.
21.2. CURRENCY INDEMNITY
21.2.1. 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 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.
21.2.2. 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 Borrower shall immediately on demand
indemnify the Bank against any loss or damage arising as a
-34-
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.
21.3. GENERAL
21.3.1. Each indemnity in this Clause 21 shall constitute a separate and
independent obligation from the other obligations contained in this
Agreement, shall give rise to a separate and independent cause 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.
21.3.2. 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.
22. LAW
This Agreement is governed by and shall be construed in accordance
with English law.
IN WITNESS whereof the Parties have caused this Agreement to be duly executed on
the date set out above.
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SCHEDULE 1
CONDITIONS PRECEDENT
The Bank shall have received each of the following in form and substance
satisfactory to it:
1. A Certified Copy of the certificate of incorporation (and any
relevant certificate of incorporation on change of name) and the
memorandum and articles of association of each Material Company.
2. A Certified Copy of the board minutes and resolutions of the Borrower
approving and authorising the execution, delivery and performance of
each Financing Document to which the Borrower is a party on the terms
and conditions of those documents and authorising a person or persons
to sign or otherwise attest the due execution of those documents and
any other documents to be executed or delivered by the Borrower
pursuant to those documents together with a certificate of a duly
authorised officer of the Borrower setting out the names and
signatures of the persons authorised to sign such documents on behalf
of the Borrower.
3. Certificate signed by a director of the Borrower confirming that all
consents, licences, approvals or authorisations of any governmental
or other authority, bureau or agency required by each Material
Company in connection with the execution, delivery, performance,
validity or enforceability of the Financing Documents or any document
to be delivered under the Financing Documents are in place.
-36-
SCHEDULE 2
DRAWDOWN NOTICE
To: National Westminster Bank Plc
From: European Micro plc
*[date] 1998
Dear Sirs,
(POUND)3,500,000 CREDIT AGREEMENT DATED * MAY 1998 (THE "CREDIT AGREEMENT")
Terms defined in the Credit Agreement have the same meaning in this notice.
We request [an] Advance[s] to be drawn down under the Credit Agreement as
follows:
1. Amount of Advance[s]:(pound)* [(pound)*]
2. Drawdown Date:
3. Duration of Interest Period[s]: *[day[s]/month]
4. Payment instructions: * (if applicable)
We attach a copy of the delivery note[s] dated * [and * ] from * [and *].
We confirm that:
(a) the Eligible Inventory referred to in [each of] the attached delivery
note[s] is marked *;
(b) * per cent of the Eligible Inventory [in the delivery note marked*] is Pre
Sold; and
(c) the Eligible Inventory referred to in [each of] the attached delivery
note[s] will be sold, transferred or otherwise disposed of to the
extent that is required to repay in full the relevant advance on or
before the expiry of the [relevant] Interest Period.
We further confirm that today and on the Drawdown Date:
(a) the representations and warranties in Clause 12 to be repeated are and
will be correct; and
(b) no Default or Potential Default has occurred and is continuing or will occur
on the making of the Advance.
-37-
SIGNED
FOR AND ON BEHALF OF EUROPEAN MICRO PLC
-38-
SCHEDULE 3
PART 1
GROUP COMPANIES
COLUMN 1 COLUMN 2 COLUMN 3
NAME JURISDICTION OF INCORPORATION AND SECURITY DOCUMENTS
REGISTERED NUMBER
European Micro plc England & Wales (registered Mortgage Debenture dated 12th
number 2663964) November 1996
European Micro GmbH Germany (registered number None
HRB305196)
European Micro BV Netherlands (registered number None
2663964)
PART 2
MATERIAL COMPANIES
COLUMN 1 COLUMN 2 COLUMN 3
NAME JURISDICTION OF INCORPORATION AND SECURITY DOCUMENTS
REGISTERED NUMBER
European Micro plc England & Wales (registered Mortgage Debenture dated 12th
number 2663964) November 1996
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SCHEDULE 4
MANDATORY COST RATE FORMULA
1. The Mandatory Cost Rate is an addition to the interest rate on an
Advance to compensate the Bank for the cost attributable to an
Advance resulting from the imposition from time to time under or
pursuant to the Bank of England Act 1998 (the "ACT") and/or by the
Bank of England and/or the Financial Services Authority (the "FSA")
(or other United Kingdom governmental authorities or agencies) of a
requirement to place non-interest-bearing cash ratio deposits or
Special Deposits (whether interest bearing or not) with the Bank of
England and/or pay fees to the FSA calculated by reference to
liabilities used to fund the Advance.
2. The Mandatory Cost Rate shall be the rate determined by the Bank (and
rounded upward, if necessary, to 4 decimal places) as the rate
resulting from the application (as appropriate) of the following
formulae:
in relation to an Advance denominated in Sterling:
XL + S(X-X) + F X 0.01
----------------------
100 - (X + S)
in relation to an Advance denominated in a currency other than
Sterling:
F X 0.01
--------
300
where on the day of application of a formula:
X is the percentage of Eligible Liabilities (in excess of
any stated minimum) by reference to which the Bank is
required under or pursuant to the Act to maintain cash
ratio deposits with the Bank of England;
L is the BBA Sterling LIBOR rate quoted at or about
11.00 a.m. on Telerate (now at page 3750) on
that day;
F. is the rate of charge payable by the Bank to the FSA
pursuant to paragraph 2.02 of the Fees Regulations (but
where, for this purpose, the figure at paragraph 2.02b of
the Fees Regulations shall be deemed to be zero) and
expressed in pounds per (pound)1 million of the Fee Base
of the Bank;
S is the level of interest bearing Special Deposits,
expressed as a percentage of Eligible Liabilities, which
the Bank is required to maintain by the Bank of England
(or other United Kingdom governmental authorities or
agencies); and
D is the percentage rate per annum payable by the Bank of
England to the Bank on Special Deposits.
(X, L, S and D shall be expressed in the formula as numbers and not
as percentages, e.g. if X = 0.15%and L = 7%, XL will be calculated as
0.15 x 7 and not as 0.15% x 7%. A negative result obtained from
subtracting D from L shall be counted as zero.)
3. The Mandatory Cost Rate attributable to an Advance or other sum for
any period shall be calculated at or about 11.00 a.m. on the first
day of that period for the duration of that period.
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4. The determination of the Mandatory Cost Rate in relation to any
period shall, in the absence of manifest error, be conclusive and
binding on the Parties.
5. If there is any change in circumstance (including the imposition of
alternative or additional requirements) which in the reasonable
opinion of the Bank renders or will render either of the above
formulae (or any element of the formulae, or any defined term used in
the formulae) inappropriate or inapplicable, the Bank shall be
entitled to vary the same by giving notice to the Borrower. Any such
variation shall, in the absence of manifest error, be conclusive and
binding on the Parties and shall apply from the date specified in
such notice.
For the purposes of this Schedule:
"ELIGIBLE LIABILITIES" and "SPECIAL DEPOSITS" have the
meanings given to those terms under or pursuant to the Act
or by the Bank of England (as may be appropriate), on the
day of the application of the formula.
"FEE BASE" has the meaning given to that term for the
purposes of, and shall be calculated in accordance with,
the Fees Regulations.
"FEES REGULATIONS" means, as appropriate, either:
(a) the Banking Supervision (Fees) Regulations 1998;
or
(b) such regulations as from time to time may be in
force, relating to the payment of fees for
banking supervision in respect of periods
subsequent to 31 March 1999.
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THE BORROWER
SIGNED BY )
)
for and on behalf of )
EUROPEAN MICRO PLC )
THE BANK
SIGNED BY )
)
for and on behalf of )
NATIONAL WESTMINSTER BANK PLC )
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