EXHIBIT 4.9
CONFORMED COPY
FACILITY AGREEMENT
FOR AN
ACQUISITION FACILITY
FOR
PREMIER FINANCING LIMITED
DATED 17TH NOVEMBER, 2003
ARRANGED BY
X.X. XXXXXX PLC
UNDERWRITTEN BY
JPMORGAN CHASE BANK
AGENT
AND SECURITY AGENT
X.X. XXXXXX EUROPE LIMITED
XXXXX & OVERY
LONDON
CONTENTS
CLAUSE PAGE
1. Interpretation................................................................................ 3
2. The Facility.................................................................................. 25
3. The Conditions................................................................................ 25
4. Drawings Under the Facility................................................................... 26
5. Interest and Interest Periods................................................................. 26
6. Repayment, Prepayment and Cancellation........................................................ 28
7. Fees and Expenses............................................................................. 33
8. Payments and Taxes; Accounts and Calculations................................................. 35
9. Representations and Warranties................................................................ 39
10. Undertakings.................................................................................. 44
11. Events of Default............................................................................. 60
12. Indemnities................................................................................... 65
13. Unlawfulness, Increased Costs, Alternative Interest Rates..................................... 67
14. Set-Off and Pro-Rata Payments................................................................. 70
15. Assignment, Substitution and Lending Offices.................................................. 72
16. Appointment of Agent.......................................................................... 76
17. Decisions of Banks and Agent.................................................................. 83
18. Cash Collateral Accounts...................................................................... 84
19. Notices and Other Matters..................................................................... 85
20. Governing Law................................................................................. 88
SCHEDULE
1. The Banks and their Commitments............................................................... 89
2. Form of Drawdown Notice....................................................................... 90
3. Documents and evidence required as conditions precedent....................................... 91
4. Calculation of Additional Cost................................................................ 99
5. Form of Substitution Certificate.............................................................. 102
Part 1 (Single TransFers)................................................................... 102
Part 2 (Global Form)........................................................................ 107
6. The Group as at the Date of this Agreement.................................................... 111
7. Structure Chart............................................................................... 114
8. Financial Undertakings and Accounting Terms................................................... 116
9. Form of Annual Auditor's Report............................................................... 122
10. Xxxxx Muse's Fees............................................................................. 124
THIS AGREEMENT is dated 17th November, 2003 and made
BETWEEN:
(1) PREMIER FINANCING LIMITED as the Borrower;
(2) X.X. XXXXXX PLC as the Arranger;
(3) JPMORGAN CHASE BANK as the Underwriter;
(4) THE PERSONS whose names and addresses are set out in Schedule 1 as Banks;
and
(5) X.X. XXXXXX EUROPE LIMITED as the Agent and the Security Agent.
IT IS AGREED as follows:
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement, unless the context otherwise requires:
ACCOUNTANTS' REPORTS means the reports in the agreed forms compiled or to
be compiled by PricewaterhouseCoopers in connection with each Acquisition
and addressed to the Finance Parties and the Senior Finance Parties and
ACCOUNTANT'S REPORT means any one of them;
ACQUISITION means the acquisition by the Borrower (or any other Purchaser)
of a Target;
ACQUISITION AGREEMENTS means:
(a) any sale and purchase agreement in the agreed form (together with
its Schedules) between the relevant Vendor and Purchaser in
connection with any Acquisition; and
(b) all other documents delivered pursuant to or in relation to the
document referred to in (a) above;
ACQUISITION CONSIDERATION has the meaning given to that term in clause
10.6(s)(i);
ACQUISITION PARTIES means Newco 1, Cayman 1, UK Topco, the Borrower and
the Purchasers (to the extent not the same entity as the Borrower);
ACQUISITION PURPOSES means any of the following purposes:
(a) to make payments of all or part of the Acquisition Consideration in
respect of any Acquisition; and
(b) to make payments due of any fees and expenses of the Borrower and/or
the Purchaser (to the extent not the same entity as the Borrower)
incurred in connection with any Acquisition;
ACT means the Companies Xxx 0000;
ACTING IN CONCERT has the meaning given to that term in the Code;
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ADDITIONAL COST RATE has the meaning given to it in Schedule 4;
ADDITIONAL COST means the percentage rate per annum calculated by the
Agent in accordance with Schedule 4;
ADVANCE means each borrowing under the Facility under this Agreement or
(as the case may be) the principal amount of that borrowing outstanding at
any relevant time;
AFFILIATE in relation to any person means a Subsidiary or a Holding
Company of that person and any other Subsidiary of a Holding Company of
that person;
AGENT means X.X. Xxxxxx Europe Limited of 000 Xxxxxx Xxxx, Xxxxxx XX0X 0XX
acting in its capacity as agent for the Banks or such other person as may
be appointed agent for the Banks pursuant to clause 16.13;
ARRANGER means X.X. Xxxxxx plc of 000 Xxxxxx Xxxx, Xxxxxx XX0X 0XX;
ANNUAL BUDGET means, in respect of each financial year of the Group, a
budget for such succeeding financial year containing such information as
the Borrower and the Agent may from time to time agree (acting reasonably)
and including specifically, but without limitation:
(a) (i) a consolidated profit (or loss) forecast, and
(ii) a consolidated cashflow forecast (including Capital
Expenditure),
(in each case) in respect of each month in such financial year
and in respect of such financial year to date prepared down to
the end of such month;
(b) a projected consolidated balance sheet as at the end of each month
in such financial year; and
(c) a commentary on such business plan and budget (including material
Capital Expenditure and cost savings);
APPROPRIATE ACCOUNTING PRINCIPLES means (a) the accounting principles,
policies, standards, practices and bases stated in the audited
consolidated financial statements of the Group for the year ending 31st
December, 2002 (being generally accepted in the United Kingdom or (b)
where any change in (a) has been agreed under clause 10.6(p), such
accounting principles, standards, practices and bases as have been so
agreed;
APPROVED BANK means any bank which is an authorised banking institution
under applicable local law and which has waived in writing in a form
satisfactory to the Agent (acting reasonably) any rights of set-off which
it may have in respect of the account of any member of the Group held with
it;
ASSET SALE means the disposal of substantially all of the assets and
undertaking of the Group (whether by way of a share sale or otherwise) to
a single purchaser or to one or more purchasers as part of a single
transaction or related transactions;
AUDITORS means the auditors for the time being of the Borrower or, if such
auditors are unable or unwilling to provide any certificate or take any
other action contemplated by this Agreement, any one of the chartered
accountants Deloitte & Touche, Ernst & Young, KPMG or
PricewaterhouseCoopers (each a BIG 4 FIRM) as may be selected by the
Borrower after consultation with the Agent;
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AVAILABLE COMMITMENT means, in relation to a Bank in respect of the
Facility at any time, its Commitment in respect of the Facility at such
time less the aggregate amount of its Contribution in respect of the
Facility (as applicable) at that time;
AVAILABLE FACILITY AMOUNT means, at any time and in respect of the
Facility, the aggregate of the Available Commitments of all the Banks in
respect of the Facility at such time;
BANK means each person whose name is set out in the relevant part of
Schedule 1 as a Bank or which assumes rights and obligations in respect of
the Facility pursuant to a Substitution Certificate provided that upon (a)
termination in full of all the Commitments of any Bank, and (b)
irrevocable payment in full of all amounts which may be or become payable
to such Bank under the Finance Documents, such Bank shall not be regarded
as being a Bank for the purposes of determining whether any provision of
any of the Finance Documents requiring consultation with or the consent or
approval of or instructions from the Banks or the Majority Banks has been
complied with;
BANK AFFILIATE means (a) with respect to any person (other than a fund),
any other person directly or indirectly controlling, controlled by, or
under direct or indirect common control with, such first person, where a
person shall be deemed to have control of a corporation if such person
possesses directly or indirectly, the power to (i) vote 50 per cent. or
more of the securities having ordinary voting power for the election of
directors of such corporation or (ii) direct or cause the direction of the
management and policies of such corporation, whether through the ownership
of voting securities, by contract or otherwise or (b) with respect to any
person that is a fund, any other fund which is advised or managed by the
same investment adviser or an Affiliate of that investment advisor;
BANKING DAY means a day (other than Saturday, Sunday or a public holiday)
on which banks are open for business in London;
BOND AND FLOATING CHARGES means the bonds and floating charges in the
agreed form entered into, or to be entered into, by each of Premier Brands
Limited, Melrose Limited, Ridgways Limited and Xxxxxx Xxxxxx & Sons (Est.
1849) Limited in favour of the Security Agent;
BORROWED MONEY means, in respect of any person, Indebtedness in respect of
(without double counting) (a) money borrowed or debit balances at banks,
(b) any bond, note, loan stock, debenture or similar debt instrument, (c)
acceptance or documentary credit facilities, (d) receivables sold or
discounted (otherwise than on a non-recourse basis to the relevant
person), (e) deferred payments for assets or services acquired (other than
current trade liabilities and accrued expenses incurred in the ordinary
course of business), (f) Finance Leases, (g) (except in clause 11.1(f) and
Schedule 8) Derivatives Transactions, (h) any other transaction (including
without limitation forward sale or purchase agreements) having the
commercial effect of a borrowing or of any of (b) to (g) above and (i)
guarantees in respect of Indebtedness of any person falling within any of
(a) to (h) above;
BORROWER SECURITY DOCUMENTS means those of the Security Documents to which
the Borrower is party;
BORROWER means Premier Financing Limited (formerly Crescent Acquisition
Limited), company number 3716362, whose registered office is at 00 Xxx
Xxxxx, Xxxxx Xxxxxx, Xxxxxxxxxx X00 0XX;
BUDGETED CAPITAL EXPENDITURE means Capital Expenditure incurred or to be
incurred in the financial year ending 31 December, 2003 and each financial
year ending 31 December
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thereafter up to a maximum of (pound)18,750,000 or (a) provided that
Permitted Acquisitions have been made after the date on which the Majority
Senior Banks consented to the requests contained in the consent request
letter dated 2 October 2003 for an aggregate Acquisition Consideration of
at least (pound)35,000,000 (or its equivalent), up to a maximum, in the
case of the financial years ending 31 December, 2004 and 31 December,
2005, of (pound)21,750,000 and, in the case of each financial year ending
31 December thereafter, (pound)20,750,000, provided that such increased
amounts shall only apply from and including the financial year in which
the (pound)35,000,000 threshold referred to above is reached, or (b) such
higher limit in respect of any financial year as may be agreed between the
Borrower and the Agent (acting on the instructions of the Majority Banks),
but so that:
(i) where in any financial year actual Capital Expenditure is less than
the Budgeted Capital Expenditure for that year (excluding any amount
which was carried forward from the previous year) an amount of such
deficit not exceeding one-third of the Budgeted Capital Expenditure
for that year may be added to the Budgeted Capital Expenditure for
the following financial year only (and not otherwise or further),
provided that an amount equal to the amount carried over is expended
on Capital Expenditure within the first 6 months of the following
financial year (and to the extent it is not spent, the amount
carried over shall be reduced); and
(ii) Capital Expenditure incurred in a currency other than Sterling shall
be converted into its Sterling equivalent at the date of
expenditure;
CAPITAL EXPENDITURE means any expenditure which should be treated as
capital expenditure in the audited consolidated financial statements of
the Group in accordance with the Appropriate Accounting Principles;
CASH COLLATERAL ACCOUNT means an interest bearing blocked deposit account
in the name of the Borrower opened, or to be opened, with the Security
Agent or the Cash Collateral Account Bank (as the relevant provision of
any Finance Document so provides) pursuant to or otherwise in connection
with this Agreement or any other Finance Document on terms that it (and
amounts credited to it) is subject to the Security Documents;
CASH COLLATERAL ACCOUNT BANK means JPMorgan Chase Bank or any replacement
bank selected by the Agent and agreed to by the Borrower (acting
reasonably);
CASH EQUIVALENTS means:
(a) securities denominated in Sterling, US Dollars or euros with
maturities of one year or less from the date of acquisition issued
or fully guaranteed or fully insured by the Government of the United
States of America or any member state of the European Union (or any
agency thereof) which is rated at least AA by Standard & Poor's
Ratings Group or Aa by Xxxxx'x Investor Service, Inc., or carrying
an equivalent rating by an internationally recognised rating agency
if both the two named rating agencies cease publishing ratings of
investments;
(b) certificates of deposit of, or time deposits or overnight bank
deposits with, any commercial bank meeting the qualifications
specified in paragraph (c) below having maturities of one year or
less from the date of acquisition;
(c) commercial paper of, or money market accounts or funds with or
issued by, an issuer rated at least A-1 by Standard & Poor's Ratings
Group or P-1 by Xxxxx'x Investors Service, Inc., or carrying an
equivalent rating by an internationally recognised rating
6
agency if both of the two named rating agencies cease publishing
ratings of investments;
(d) repurchase obligations with a term of not more than 90 days for
underlying securities of the types described in paragraph (a) above
entered into with any bank meeting the qualifications specified in
paragraph (c) above; and
(e) demand deposit accounts maintained in the ordinary course of
business in accordance with clause 10.6(w);
CAYMAN 1 means HMTF Premier Limited (formerly Xxxxx Limited), a company
incorporated under the laws of the Cayman Islands whose registered office
is at Xxxxxx House, Xxxx Street, PO Box 265 GT, Xxxxxx Town, Grand Cayman,
Cayman Islands;
CAYMAN 2 means Premier Co-Investor Limited (formerly XxXxxxxx Limited), a
company incorporated under the laws of the Cayman Islands whose registered
office is at Xxxxxx House, Xxxx Street, PO Box 265 GT, Xxxxxx Town, Grand
Cayman, Cayman Islands;
CHANGE OF CONTROL, in relation to Premier Holdings, means at any time (a)
Xxxxx Muse, its principals and their affiliates and management (HMTF)
ceasing to have the power, directly or indirectly, to vote or direct the
voting of shares having a majority of the ordinary voting power for the
election of directors of such company, provided that the occurrence of the
foregoing event shall not be deemed a Change of Control if (i) at any time
prior to the consummation of an initial underwritten public offering of
the ordinary share capital of such company to be listed and/or traded on
any recognised investment exchange or market in any country (INITIAL
PUBLIC OFFERING), and for any reason whatever, (A) HMTF (or any of them)
otherwise have the right to designate (and do so designate) a majority of
the board of directors of such company or (B) HMTF and their employees,
directors and officers (the HMTF GROUP) (or any of them) own legally and
beneficially an amount of the ordinary shares capital of such company
equal to at least 50 per cent. of the percentage of ordinary share capital
of such company owned by the HMTF Group (taken together) legally and
beneficially as at the date the Scheme became effective and such ownership
by the HMTF Group represents the largest single block of voting shares of
such company held by any person or persons acting in concert or (ii) at
any time after the consummation of an Initial Public Offering, and for any
reason whatever, (A) no person or persons acting in concert, excluding the
HMTF Group, has become the beneficial owner, directly or indirectly, of
more than the greater of (I) 15 per cent. of the shares then outstanding
and (II) the percentage of the then outstanding voting shares of such
company owned beneficially by the HMTF Group (taken together) and (B) the
board of directors of such company shall consist of a majority of
Continuing Directors or (b) a change of control for the purposes of the
High Yield Bonds, howsoever defined, occurs.
For the purposes of this definition of CHANGE OF CONTROL:
AFFILIATE as to any person, means any other person which, directly or
indirectly, is in control of, is controlled by, or is under common control
with, such person. For the purposes of this definition, CONTROL of a
person means the power, directly or indirectly, either to (a) vote 51 per
cent. or more of the shares (or stock, as applicable) having ordinary
voting power for the election of directors of such person or (b) direct or
cause the direction of the management and policies of such person, whether
by contract or otherwise; and
CONTINUING DIRECTORS means, at any time and in relation to Premier
Holdings, any member of the board of directors of such company who (a) was
a member of such board of directors after the date the Scheme became
effective (and immediately following any elections or
7
resignations following the completion of the acquisition of Premier
Holdings pursuant to the Scheme) or (b) was nominated for election or
elected to such board of directors with, or whose nomination for election
or election to such board of directors was approved by, the affirmative
vote of a majority of the Continuing Directors who were members of such
board of directors at the time of such nomination or election or (c) is a
designee of HMTF or was nominated by HMTF or any designees of HMTF on such
board of directors;
CHARGED ASSETS means any property, assets and/or rights over which
security is granted and/or created under any of the Security Documents;
CHARGING GROUP means the Borrower and those members of the Group which are
Charging Subsidiaries;
CHARGING SUBSIDIARIES means (a) the Original Charging Subsidiaries and (b)
any other person (other than the Borrower, Premier Holdings or Citadel
Insurance Company Limited) which may from time to time enter into any
Security Document in accordance with the requirements of clause 10.2(f),
but in each case only if they have charged all or substantially all of
their assets and undertaking to the Security Agent for the benefit of the
Finance Parties;
CHEF LICENCE means the licence of the "Chef" trade xxxx entered into in
connection with the Irish Second Acquisition between certain of the Second
Vendors and the Irish Second Purchaser;
CODE means the City Code on Takeovers and Mergers from time to time;
COMMITMENT means, in relation to a Bank, in respect of the Facility at any
relevant time, the amount set opposite its name in relation to the
Facility in Schedule 1 and/or, in the case of a Substitute, the amount
novated in relation to the Facility as specified in the relevant
Substitution Certificate;
COMMITMENT COMMISSION RATE means 0.75 per cent. per annum;
COMMITMENT PERIOD means the period commencing on the date of this
Agreement and ending on 16th February, 2004 or, with the agreement of all
the Banks and the Borrower, any date up until 16th October, 2004;
CONSOLIDATED EBITDA has the meaning given to that term in Schedule 8;
CONSOLIDATED EXCESS CASH FLOW has the meaning given to that term in
Schedule 8;
CONTRIBUTION means, subject to clause 13.2, in relation to a Bank the
principal amount of any Advances owing to such Bank at any relevant time;
CREDIT DOCUMENTS means this Agreement, the Third Fee Letters, the
Intercreditor Agreement and any other documents which the Agent and the
Borrower agree may be Credit Documents;
DANGEROUS SUBSTANCE means any radioactive emissions, noise and any natural
or artificial substance (in whatever form) the generation, transportation,
storage, treatment, use or disposal of which (whether alone or in
combination with any other substance) gives rise to a risk of causing harm
to man or any other living organism or damaging the Environment or public
health or welfare, including (without limitation) any controlled, special,
hazardous, toxic, radioactive or dangerous waste;
8
DEFAULT means an Event of Default or an event which, with the giving of
notice, lapse of time or fulfilment of any other applicable condition or
combination of the foregoing (in each case as specified in clause 11.1)
would constitute an Event of Default;
DEMERGER means the disposal of the Premier Holdings' furniture and poultry
businesses in accordance with the Structure Paper;
DEMERGER AGREEMENTS means in, respect of the furniture business, the
demerger agreement dated 27th July, 1999 between Hillsdown International
Limited, HMTF Furniture Holdings Limited, HMTF Furniture Limited,
Furniture Co-Investor Limited and Premier Holdings and, in respect of the
poultry business, the demerger agreement dated 27th July, 1999 between
Hillsdown International Limited, HMTF Poultry, HMTF Poultry Holdings
Limited and Premier Holdings;
DERIVATIVES TRANSACTION means a contract, agreement or transaction which
is:
(a) a rate swap, basis swap, commodity swap, forward rate transaction,
commodity option, equity (or equity or other index) swap or option,
bond option, interest rate option, foreign exchange transaction,
cap, collar or floor, currency swap, currency option or any other
similar transaction; and/or
(b) any combination of such transactions,
in each case, whether on-exchange or otherwise;
DRAWDOWN DATE means the date on which an Advance is made;
DRAWDOWN NOTICE means, in respect of the Facility, a notice substantially
in the terms of Schedule 2;
EBITDA means in relation to any person, its Consolidated EBITDA measured
as if references in the definition thereof to GROUP means to that person
and its Subsidiaries, if any;
ENCUMBRANCE means any mortgage, pledge, lien, charge, assignment for the
purpose of providing security, hypothecation, right in security, security
interest or trust arrangement for the purpose of providing security, and
any other security agreement or other arrangement having the effect of
providing security (including, without limitation, the deposit of monies
or property with a person with the primary intention of affording such
person a right of set-off or lien);
ENFORCEMENT DATE means the date of the first declaration made by the Agent
pursuant to clause 11.2;
ENVIRONMENT means all, or any of, the air (including, without limitation,
the air within buildings and the air within other natural or man-made
structures above or below ground), water (including, without limitation,
ground and surface water) and land (including, without limitation,
buildings, surface and sub-surface soil);
ENVIRONMENTAL CLAIM means any claim by any person:
(a) in respect of any loss or liability suffered or incurred by that
person as a result of or in connection with any violation of
Environmental Law; or
9
(b) that arises as a result of or in connection with Environmental
Contamination and that could give rise to any remedy or penalty
(whether interim or final) that may be enforced or assessed by
private or public legal action or administrative order or
proceedings;
ENVIRONMENTAL CONTAMINATION means each of the following and their
consequences:
(a) any release, discharge, emission, leakage or spillage of any
Dangerous Substance at or from any site owned, occupied or used by
any member of the Group into any part of the Environment; or
(b) any accident, fire, explosion or sudden event at any site owned,
occupied or used by any member of the Group which is directly or
indirectly caused by or attributable to any Dangerous Substance; or
(c) any other pollution of the Environment;
ENVIRONMENTAL LAW means all laws (including, without limitation, common
law), regulations, directives, codes of practice, circulars, guidance
notices and the like having legal effect concerning the protection of
human health, the Environment, the conditions of the work place or the
generation, transportation, storage, treatment or disposal of Dangerous
Substances and in the case of codes of practice, circulars, guidance
notices and the like with which it is customary for persons carrying on a
similar business to the Group to comply with;
ENVIRONMENTAL LICENCE means any authorisation required by any
Environmental Law;
EQUITY PERMITTED PAYMENT means, at any time, an amount which is required
by Premier Holdings in order, and to the extent necessary, to enable
Premier Holdings to pay amounts which are due and payable at such time or
no later than the third Banking Day after such time in respect of:
(a) audit fees, legal expenses and other proper and necessary incidental
expenses and corporate overheads up to a maximum aggregate amount of
(pound)2,500,000 in any financial year;
(b) its Taxes but only to the extent such Taxes are attributable to the
business of the Borrower and its Subsidiaries; or
(c) contingent liabilities of Premier Holdings which existed as at the
Scheme Effective Date which have become actual
(i) liabilities of Premier Holdings provided that: the aggregate
amount paid in respect of all such liabilities shall not
exceed (pound)15,000,000; and
(ii) no breach of any of the Financial Covenants would have
occurred on the most recent Financial Covenant test date if
(and assuming that) the payment concerned had been made one
day before the most recent Financial Covenant test date and
had been included within each relevant Financial Covenant test
as a deduction to the consolidated trading profits of the
Group in calculating Consolidated EBITDA for the relevant
period;
EURO means the single currency of Participating Member States;
EVENT OF DEFAULT means any of the events or circumstances described in
clause 11.1;
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FACILITY means the facility granted by clause 2 or (as the case may be)
the amount of that facility as determined in accordance with that clause;
FINANCE DOCUMENTS means the Credit Documents and the Security Documents
and any other documents which the Agent and the Borrower agree shall be
Finance Documents;
FINANCE LEASE means any lease under which a member of the Group is the
lessee which is or should be treated as a finance lease under the
Appropriate Accounting Principles (and includes any hire purchase contract
or other arrangement which is or should be similarly treated);
FINANCE PARTIES means the Agent, the Arranger, the Underwriter, the Banks
and the Security Agent and (as the context requires) FINANCE PARTY means
any one of them;
FINANCE PERIOD means the period from the date of this Agreement until the
date on which the Agent confirms that none of the Finance Parties and none
of the members of the Group has any actual or contingent liabilities or
obligations under any of the Finance Documents;
FINANCIAL COVENANTS means the financial undertakings set out in clause
10.3 and Schedule 8;
FINANCIAL DEFINITIONS means the definitions set out in Schedule 8, Capital
Expenditure, Borrowed Money, Finance Leases, Net Proceeds, unapplied Net
Proceeds (as defined in clause 6.6) and Taxes;
FINANCIAL MODEL means each agreed form financial model for the Group
delivered to the Agent pursuant to paragraph 13 of Part 2 of Schedule 3;
FLOTATION means the inclusion of any part of the share capital of any
Acquisition Party, Premier Holdings or any member of the Group in the
Official List of the UK Listing Authority or the grant of permission to
deal in the same in the Alternative Investment Market or the European
Association of Securities Dealers Automated Quotation or on any recognised
investment exchange (as that term is used in the Financial Services and
Markets Act 2000) or in or on any exchange or recognised market replacing
the same or on any other exchange or recognised market in any country;
FULL PREPAYMENT EVENT means either (a) a Change of Control or (b) an Asset
Sale;
GOVERNMENT ENTITY means and includes (whether having a distinct legal
personality or not) any supra-national, national or local government
authority, central bank, board, commission, department, division, organ,
instrumentality, court or agency and any association, organisation or
institution of which any of the foregoing is a member or to whose
jurisdiction any of the foregoing is subject or in whose activities any of
the foregoing is a participant and (if the context requires) which, in
relation to Environmental Matters, has regulatory or administrative
authority under Environmental Law;
GROUP means the Borrower and all its Subsidiaries for the time being, and
MEMBER OF THE GROUP means any one of them;
GROUP DEBENTURE means the guarantee and debenture entered into or to be
entered into by the Borrower, Premier Holdings and the Original Charging
Subsidiaries in favour of the Security Agent;
HEDGE COUNTERPARTIES means such persons which shall at any relevant time
be party to any Hedge Transactions;
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HEDGE DOCUMENTS means the documents evidencing the Hedge Transactions;
HEDGE TRANSACTIONS means the arrangements entered into by the Borrower
pursuant to clause 10.5(a);
HEDGING STRATEGY LETTER means the letter from the Borrower to the agent in
respect of the Senior Facilities dated 12 August, 1999 (as amended and
restated on 27 May 2002) relating to hedging;
XXXXX MUSE means Hicks, Muse, Xxxx & Xxxxx Limited, a company incorporated
under the laws of England and Wales with its registered office at 0-0 Xxx
Xxxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxx X0X 0XX;
HIGH YIELD BONDS means (a) the 12 1/4 % Sterling senior notes due 2009 and
(b) the 12% US Dollar senior notes due 2009, in each case issued by Newco
1;
HIGH YIELD BOND DOCUMENTS means the senior note indenture, the note
depository agreement, the exchange and registration rights agreement, the
high yield bonds, any exchange notes contemplated by the senior note
indenture or the exchange and registration rights agreement, the
engagement letter, the fees letter, indemnity letters, underwriting or
purchase agreement and all other documents relating to the issuance of the
High Yield Bonds from time to time;
HMTF GROUP has the meaning given to that term in the definition of CHANGE
OF CONTROL in this clause 1.1;
HMTF POULTRY means HMTF Poultry Limited (company number 3808291) whose
registered office is at 00 Xxx Xxxxx, Xxxxx Xxxxxx, Xxxxxxxxxx X00 0XX;
HMTF POULTRY/BORROWER SUBORDINATION DEED means the subordination deed
entered into, or to be entered into, between HMTF Poultry, the Borrower
and the Security Agent;
HOLDING COMPANY means an entity of which another person is a Subsidiary;
INDEBTEDNESS means any obligation for the payment or repayment of money,
whether as principal or as surety and whether present or future, actual or
contingent;
INFORMATION MEMORANDA means documents which have been or are to be
distributed to Banks or prospective Banks by the Arranger in connection
with the sub-underwriting or general syndication of the Facility or the
transaction contemplated by this Agreement;
INFORMATION PACKAGE means the Information Memoranda, the Reports and the
Financial Model;
INTELLECTUAL PROPERTY RIGHTS means all copyrights (including rights in
computer software), trade marks, service marks, business names, patents,
rights in inventions, registered designs, design rights, database rights
and topographical or similar rights, rights in trade secrets or other
confidential information and any other intellectual property rights and
any interests (including by way of licence) in any of the foregoing (in
each case whether registered or not and including all applications for the
same) which may subsist anywhere in the world;
INTERCOMPANY LOAN AGREEMENT means the loan agreement dated 10 August 1999
entered into by Newco 1 and the Borrower setting out the terms on which
Newco 1 has lent to the Borrower the net proceeds of the High Yield Bonds;
12
INTERCOMPANY LOAN PERMITTED PAYMENT has the meaning given to that term in
the Intercompany Loan Subordination Deed;
INTERCOMPANY LOAN SUBORDINATION DEED means the subordination deed entered
into, or to be entered into, between Newco 1, the Borrower and the
Security Agent;
INTERCREDITOR AGREEMENT means the intercreditor agreement entered into, or
to be entered into, between the Senior Finance Parties, the Finance
Parties and the Borrower;
INTEREST PAYMENT DATE means the last day of an Interest Period;
INTEREST PERIOD means, in relation to any Advance, each period for the
calculation of interest in respect of such Advance ascertained in
accordance with clause 5.1;
INVESTORS' UNDERTAKING means an undertaking in the agreed form granted or
to be granted by each of Cayman 1, Newco 1 and Premier Holdings in favour
of the Security Agent;
IRISH IPR AGREEMENT means the agreement for the sale of certain
Intellectual Property Rights in Ireland entered into in connection with
the Irish Second Acquisition between certain of the Second Vendors and the
Irish Second Purchaser;
IRISH SECOND ACQUISITION means the acquisition by the Irish Second
Purchaser of the Ireland ambient food business of Nestle (Ireland) Limited
pursuant to the Irish Second Acquisition Agreements;
IRISH SECOND ACQUISITION AGREEMENTS means:
(a) the Second SPA;
(b) the Irish IPR Agreement;
(c) the Chef Licence; and
(d) all other documents delivered pursuant or in relation to any of (a)
to (c) (inclusive) above (including, without limitation, the
transitional services agreement entered into between certain of the
Second Vendors and the Second Purchasers in connection with the
Irish Second Acquisition);
IRISH SECOND PURCHASER means Pastam Limited (registered in Ireland with
company number 323282) whose registered office is at c/o Xxxxxx Xxx,
Xxxxxx Xxx Building, Xxxxxxxxx Xxxxxxx, Xxxxxx 0, Xxxxxxx;
JONKER FRIS SECURITY DOCUMENTS means a pledge of stock and receivables and
a guarantee in each case in the agreed form entered into, or to be entered
into, by Jonker Fris B.V. in favour of the Security Agent;
LEGAL DUE DILIGENCE REPORTS means the agreed form reports prepared or to
be prepared by Weil, Gotshal & Xxxxxx addressed to the Finance Parties and
the Senior Finance Parties in connection with each Acquisition and LEGAL
DUE DILIGENCE REPORT means any one of them;
LEGAL OPINIONS means the legal opinions delivered pursuant to clause 3,
clause 10.2(f) and paragraph 4 of Part 1 and paragraph 10 of Part 2 of
Schedule 3 in form and substance satisfactory to the Agent (acting
reasonably);
13
LIBOR means, in relation to a particular period, the rate for deposits of
the relevant currency for a period equivalent to such period at or about
11 a.m. on the Quotation Date for such period as displayed on Telerate
page 3750 (or, as the case may be, 3740) (British Bankers' Association
Interest Settlement Rates) (or such other page as may replace such page
3750 (or, as the case may be, 3740) on such system or on any other system
of the information vendor for the time being designated by the British
Bankers' Association to calculate the BBA Interest Settlement Rate (as
defined in the British Bankers' Association's Recommended Terms and
Conditions (BBAIRS terms) dated August, 1985)), provided that if on such
date no such rate is so displayed, LIBOR for such period shall be the
arithmetic mean (rounded upward if necessary to five decimal places) of
the rates respectively quoted to the Agent by each of the Reference Banks
at the request of the Agent as such Reference Bank's offered rate for
deposits of the relevant currency in an amount approximately equal to the
amount in relation to which LIBOR is to be determined for a period
equivalent to such period to leading banks in the London Interbank Market
at or about 11 a.m. on the Quotation Date for such period;
LOAN NOTE INSTRUMENT means the instrument dated 27 May 2002 constituting
up to (pound)164,656,894 unsecured loan notes due 2017 of UK Topco;
MAJORITY BANKS means at any relevant time Banks the aggregate of whose
Commitments in respect of the Facility exceed 66 2/3 per cent. of the
Total Commitments in respect of the Facility but so that if at such time
the Total Commitments in respect of the Facility have been reduced to zero
references to a Bank's Commitment in relation to the Facility shall be
construed as amongst the Finance Parties (and not so as to give any rights
to any other person) as a reference to that Bank's Commitment in relation
to the Facility immediately prior to such reduction to zero;
MAJORITY SENIOR BANKS means the Majority Banks, as defined in the Senior
Facilities Agreement;
MARGIN means 4.50 per cent. per annum;
MATERIAL ADVERSE EFFECT means any effect, event or circumstance which (on
its own or in combination with other effects, events or circumstances)
has, or is reasonably likely to have, a material adverse effect on (a) the
business, assets, property, condition (financial or otherwise) or
prospects of the Group taken as a whole or (b) the validity or
enforceability of any of the Finance Documents or the rights or remedies
of the Finance Parties thereunder;
MATERIAL ENTITY means:
(a) each Obligor;
(b) each Acquisition Party; and
(c) each member of the Group:
(i) whose EBITDA constitutes 5 per cent. or more of the
Consolidated EBITDA of the Group, as shown by the most recent
audited financial statements (consolidated where applicable)
of that member of the Group and the Group (respectively); or
(ii) whose turnover (consolidated with the turnover of its
Subsidiaries, if any) constitutes 5 per cent. or more of
consolidated turnover of the Group, as
14
shown by the most recent audited financial statements
(consolidated where applicable) of that member of the Group
and the Group (respectively); or
(iii) whose total assets (consolidated with the total assets of its
Subsidiaries, if any) constitute 5 per cent. or more of
consolidated total assets of the Group taken as a whole, as
shown by the most recent audited financial statements
(consolidated where applicable) of that member of the Group
and the Group (respectively); or
(iv) to which has been transferred (whether by one transaction or a
series of transactions, related or not) all or substantially
all of the assets of another member of the Group which,
immediately prior to that transaction or any of the
transactions in that series, was a Material Entity as
determined under paragraphs (i), (ii) or (iii) above; or
(v) which is a Holding Company of any Obligor or any Material
Entity determined under paragraphs (i) to (iv) above;
MONTH or MONTHS means (a) (save as referred to in (b) below) a period
beginning in one calendar month and ending in the relevant later calendar
month on the day numerically corresponding to the day of the calendar
month in which it started, provided that (i) if the period started on the
last Banking Day in a calendar month or if there is no such numerically
corresponding day, it shall end on the last Banking Day in such later
calendar month and (ii) if such numerically corresponding day is not a
Banking Day, the period shall end on the next following Banking Day in
such later calendar month but if there is no such Banking Day it shall end
on the preceding Banking Day and MONTHLY shall be construed accordingly;
and (b) in the context of financial reporting, periods of four or five
weeks by reference to which monthly management accounts are prepared;
NET DERIVATIVES LIABILITY means, at any time, the net liability (if any)
at such time of the Borrower and the other members of the Group taken as a
whole in respect of Derivatives Transactions determined by reference to
the amounts (as determined by the Agent) which would be payable or
receivable by the Borrower and the other members of the Group pursuant to
the terms of such Derivatives Transactions if such Derivatives
Transactions were terminated at such time;
NET PROCEEDS means, in respect of a disposal of an asset, the full amount
of cash proceeds and Cash Equivalents realised on such disposal (including
any such proceeds realised by way of deferred payment or instalment
receivable or purchase price adjustment receivable or otherwise, but only
as and when received) less the costs of such disposal for which purpose
(a) such proceeds not in Sterling shall be deemed to be their Sterling
equivalent at the date of the relevant disposal and (b) COSTS OF DISPOSAL
includes legal fees, agents' commissions, auditors' and accountants' fees,
bankers' fees, registration fees and other customary fees and expenses,
reasonable provisions for Tax payable (after taking into account any
available Tax credits or deductions and any Tax sharing arrangements), and
any amount of such proceeds used to repay any Indebtedness secured on the
relevant asset and any purchase price adjustments reasonably expected to
be payable in connection with any such disposal;
NEW ARTICLES means the articles of association of the Borrower in the
agreed form;
NEWCO 1 means Premier Foods plc (formerly Premier International Foods
plc), company number 3771991, whose registered office is at 00 Xxx Xxxxx,
Xxxxx Xxxxxx, Xxxxxxxxxx X00 0XX;
15
OBLIGORS means the Borrower, Premier Holdings and the members of the
Charging Group and OBLIGOR means any of them;
ORIGINAL CHARGING SUBSIDIARY means each member of the Group listed as such
in Schedule 6;
PARTICIPATING MEMBER STATE means a member state of the European Union that
has adopted or adopts the single currency in accordance with the Treaty;
PERMITTED ACQUISITIONS has the meaning ascribed thereto in clause 10.6(s);
PERMITTED ENCUMBRANCE means an Encumbrance being any of the following,
namely:
(a) title retention arrangements arising in the ordinary course of the
relevant member of the Group's business as carried on by it at the
date of this Agreement or (if later) the date it becomes a member of
the Group;
(b) any Encumbrance arising by operation of law (not by contract or
otherwise) including, without limitation, banker's liens or rights
of set-off and liens arising in the ordinary course of the relevant
member of the Group's business as carried on by it at the date of
this Agreement or (if later) the date it becomes a member of the
Group, so long as any amounts in respect of which such liens or
rights of set-off arise are not more than 60 days overdue for
payment or are being contested in good faith by appropriate
proceedings;
(c) any Encumbrance created by any of the Security Documents or
(provided that an Encumbrance over the same asset is created by a
Security Document) in favour of the Senior Finance Parties;
(d) any Encumbrance created or existing with the prior written consent
of the Agent acting on the instructions of the Majority Banks;
(e) any Encumbrance constituted by any Finance Lease permitted under
clause 10.6(c)(vii);
(f) any Encumbrances for Taxes which are being contested in good faith
by appropriate proceedings, provided that adequate reserves with
respect to such contested Taxes are maintained on the books of the
appropriate members of the Group in conformity with the Appropriate
Accounting Principles;
(g) Encumbrances securing Borrowed Money permitted by clause 10.6(c)(vi)
provided that (i) any such Encumbrance is not extended to cover any
other property or assets upon or following consummation of such
Permitted Acquisition and (ii) the amount of Borrowed Money secured
thereby is not increased other than pursuant to the instrument under
which such Encumbrance was created, which instrument shall not be
amended so as to increase the amount of Borrowed Money secured
thereby at any time after such acquisition;
(h) deposits to secure the performance of bids, trade contracts (other
than for Borrowed Money), leases, Intellectual Property Rights,
statutory obligations, insurance contracts, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
16
(i) Encumbrances securing Borrowed Money of any member of the Group
incurred to finance the acquisition of fixed or capital assets
(provided that (i) such Encumbrances shall be created substantially
simultaneously with the acquisition of such fixed or capital assets,
(ii) such Encumbrances do not at any time encumber any assets other
than the assets financed by such Borrowed Money and (iii) the amount
of Borrowed Money secured thereby is not increased);
(j) Encumbrances securing Borrowed Money existing on any property or
assets at the time of its acquisition by a member of the Group or
existing on such property or assets of any person that becomes a
member of the Group after the date hereof at time such person
becomes a member of the Group (other than any such Encumbrance
created in contemplation of such acquisition) provided that (i) the
Borrowed Money secured thereby is Borrowed Money of, or is assumed
by, the relevant acquiring member of the Group, (ii) no such
Encumbrance is extended to cover any additional property or assets
and (iii) the amount of Borrowed Money secured thereby is not
increased other than pursuant to the instrument under which such
Encumbrance was created, which instrument shall not be amended so as
to increase the amount of Borrowed Money secured thereby at any time
after such acquisition;
(k) Encumbrances on the property of any member of the Group in favour of
the landlord of such property securing licences, subleases or leases
permitted hereunder;
(l) attachment or judgment Encumbrances not constituting an Event of
Default;
(m) Encumbrances not otherwise permitted hereunder so long as neither
(i) the aggregate Indebtedness secured thereby nor (ii) the
aggregate fair market value (as at the date the relevant Encumbrance
is created) of the assets subject thereto exceeds (pound)3,000,000
at any time; and
(n) (to the extent only that the terms of the Senior Facilities
Agreement are complied with) any Encumbrance in favour of an
Ancillary Facilities Bank (as defined in the Senior Facilities
Agreement) over credit balances on bank accounts of Obligors with
such Ancillary Facilities Bank created in order to facilitate the
operation of such bank accounts on a net balance basis for the
purpose of calculating the outstanding drawings by way of overdraft
under the Ancillary Facilities (as defined in the Senior Facilities
Agreement) provided by such Ancillary Facilities Bank, with credit
balances and debt balances on the various accounts being netted off;
PREMIER HOLDINGS means Premier Foods (Holdings) Limited (formerly
Hillsdown Holdings plc) (company number 971448) whose registered office is
at 00 Xxx Xxxxx, Xxxxx Xxxxxx, Xxxxxxxxxx X00 0XX;
PREMIER HOLDINGS/BORROWER LOAN AGREEMENT means the loan agreement dated 10
August 1999 between the Borrower and Premier Holdings pursuant to which
(pound)215,200,000 of the proceeds of the Demerger have been lent to the
Borrower;
PREMIER HOLDINGS/BORROWER SUBORDINATION DEED means the subordination deed
entered into, or to be entered into, between Premier Holdings, the
Borrower and the Security Agent;
PREMIER HOLDINGS PREFERENCE SHARES means the fixed rate preference shares
in the capital of Premier Holdings issued or to be issued upon or at any
time after the Scheme Effective Date;
PURCHASER means a newly incorporated limited liability company
incorporated in England and Wales which (a) has not previously traded or
undertaken any commercial activities of any
17
kind and which does not have any liabilities or obligations (actual or
contingent) save for (i) professional fees and administration costs in the
ordinary course of business and/or incurred for the purposes of the
maintenance of its corporate existence and (ii) liabilities imposed by law
(and not by contract), (b) is or, upon completion of the relevant
Acquisition, will immediately become a Charging Subsidiary and (c) is to
enter into or has entered into any sale and purchase agreement in
connection with an Acquisition;
PUSHDOWN means the completion of all of the following transactions with no
payments of cash being made:
(a) Newco 1 (and therefore indirectly the Borrower) is contributed by
Cayman 1 to Premier Holdings as a gift;
(b) Newco 1 and the Borrower acquire all the existing Subsidiaries of
Premier Holdings (other than Citadel Insurance Company Limited and
X.X. Xxxxx & Co. Limited) in exchange in part for the issue of
shares in Newco 1 to Premier Holdings and in part for the
cancellation of the Premier Holdings Preference Shares held by the
Borrower; and
(c) the Borrower acquires all the shares in the Subsidiaries of Newco 1
(other than the shares in the Borrower) in exchange for the issue of
shares in the Borrower to Newco 1;
QUALIFYING BANK means a person which on any date on which interest is
payable under this Agreement is beneficially entitled to the interest
payable to it under this Agreement and is a UK Lender or a Treaty Lender;
QUARTER means, in respect of each financial year, each of the periods
(each comprising three successive months) ending on or about 31 March, 30
June, 30 September and 31 December in such financial year;
QUOTATION DATE means, in relation to an Interest Period or other period
for which LIBOR is to be determined, the date on which quotations would
customarily be provided by leading banks in the London Interbank Market
for deposits in the relevant currency for delivery on the first day of
that Interest Period or other period provided that, if for any such period
quotations would customarily be given on more than one date, the Quotation
Date for that period shall be the last of those dates;
RECOVERING BANK has the meaning given to that term in clause 15.2;
REFERENCE BANKS means the principal London offices of JPMorgan Chase Bank
Barclays Bank PLC, Citibank N.A. and/or any Banks appointed as such
pursuant to clause 16.14;
REPAYMENT DATE means, in relation to the Advances, 31st March, 2009;
REPORTS means the Accountants' Reports and the Legal Due Diligence
Reports;
ROWNTREES LICENCE means the licence of the "Rowntrees" trade xxxx entered
into in connection with the UK Second Acquisition between certain of the
Second Vendors and the UK Second Purchaser;
SCHEME means the scheme of arrangement in respect of Premier Holdings
pursuant to which the Borrower subscribed in cash for all of the Premier
Holdings Preference Shares in conjunction with Premier Holdings cancelling
all of its share capital existing immediately prior to such scheme of
arrangement becoming effective and Cayman 1 and Cayman 2 subscribing in
cash for all of the ordinary shares in Premier Holdings;
18
SCHEME EFFECTIVE DATE means 27 July 1999, being the date on which the
Scheme became effective;
SECOND ACQUISITIONS AGREEMENTS means the UK Second Acquisition Agreements
and the Irish Second Acquisition Agreements and SECOND ACQUISITIONS
AGREEMENT means any one of them;
SECOND PURCHASERS means the UK Second Purchaser and the Irish Second
Purchaser and SECOND PURCHASER means any one of them;
SECOND SPA means the sale and purchase agreement (together with its
schedules) dated 3 May 2002 between the Second Purchasers, the Borrower
and the Second Vendors relating to the Second Acquisitions;
SECOND TRANSACTION DOCUMENTS means the Second Acquisitions Agreements, the
Loan Note Instrument and the other documents which implemented the
recapitalisation and other steps set out in the structure paper referred
to in paragraph 8.1 of schedule 4 to the Supplemental Agreement;
SECOND VENDORS means Nestle UK Limited, Nestle (Ireland) Limited and
Nestle S.A. and any of their Affiliates which are party to any of the
Second Acquisitions Agreements;
SECURITY AGENT means X.X. Xxxxxx Europe Limited of 000 Xxxxxx Xxxx, Xxxxxx
XX0X 0XX or such other person as may be appointed security agent and
trustee for the Finance Parties pursuant to clause 16.13 and, in each
case, its successors in title;
SECURITY DOCUMENTS means, at any time, those of the following documents
which have been executed (or purported to have been executed) by all
parties thereto and have not been discharged or released at such time: (a)
the Group Debenture, (b) the Share Pledges, (c) the Subordination Deeds,
(d) the Bond and Floating Charges, (e) the Standard Securities, (f) the
Investors' Undertaking, (g) the Jonker Fris Security Documents, (h) the
Voting Undertaking and (i) any and all other Encumbrances, guarantees and
other instruments from time to time entered into by any member of the
Group by way of guarantee and/or security in respect of amounts owed to
the Finance Parties under this Agreement (whether or not also in respect
of any other Indebtedness);
SENIOR AGENT means the Agent, as defined in the Senior Facilities
Agreement;
SENIOR FACILITIES means the Facilities, as defined in the Senior
Facilities Agreement;
SENIOR FACILITIES AGREEMENT means the senior facilities agreement dated 10
August 1999, as amended on 20 August 1999 and 5 November 1999, and further
amended and restated on 27 May 2002 and made between, among others, the
Borrower, X.X. Xxxxxx plc and Barclays Capital (the investment banking
division of Barclays Bank PLC) as Amendment Arrangers, JPMorgan Chase Bank
and Barclays Bank PLC as Amendment Underwriters, the banks and financial
institutions party thereto, and X.X. Xxxxxx Europe Limited as the Agent
and the Security Agent;
SENIOR FINANCE PARTIES means the Finance Parties, as defined in the Senior
Facilities Agreement;
SENIOR FINANCE PERIOD means the Finance Period, as defined in the Senior
Facilities Agreement;
19
SHAREHOLDER INJECTIONS means:
(a) in respect of the Borrower, the making of Subordinated Shareholder
Loans to it and the subscription by Newco 1 for shares in the
Borrower in accordance with clause 10.6(m); and
(b) in respect of any other Acquisition Party, the issuing of shares or
loan notes by such Acquisition Party to its shareholders for cash
and the borrowing of cash by such Acquisition Party from its
shareholders, in each case in a manner and on terms and conditions
not resulting in a Default provided that the proceeds of such
issuance or borrowing are, in a manner and on terms and conditions
not resulting in a Default, directly or indirectly invested by such
Acquisition Party in the Borrower in the manner referred to in (a)
above;
SHARE PLEDGES means the pledges in favour of the Security Agent in the
agreed form entered into, or to be entered into, by:
(a) Hillsdown Europe Limited (in respect of its shares in Hillsdown
Holland B.V.);
(b) Premier International Foods UK Limited (in respect of its shares in
Melroses Limited and Ridgways Limited);
(c) Hillsdown International B.V. (in respect of its shares in Jonker
Fris B.V.);
(d) Hillsdown Holland B.V. (in respect of its shares in Hillsdown
Holdings France S.A.S.);
(e) Hillsdown Holdings France S.A.S. (in respect of its shares in
Xxxxxxx Xxxx X.X. and Premier Brands France S.A.);
(f) the Borrower (in respect of its shares in Premier Brands Limited);
and
(g) Hillsdown Ambient Foods Group Limited (in respect of its shares in
Xxxxxx Xxxxxx & Sons (Est. 1849) Limited);
STANDARD SECURITIES means the standard securities in the agreed form
entered into, or to be entered into, by members of the Group over
properties situate at Blocks 10 and 00, Xxxxx Xxxx, Xxxxxxxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxxx (in each case) in favour of the Security Agent;
STERLING and (POUND) mean the lawful currency for the time being of the
United Kingdom and in respect of all payments to be made under this
Agreement in Sterling mean immediately available, freely transferable
cleared funds;
STRUCTURE PAPER means the structure paper dated 9 August 1999 which set
out the structure of, and the steps involved in, the acquisition of
Premier Holdings pursuant to the Scheme;
SUBORDINATED SHAREHOLDER LOANS means subordinated loans lent by UK Topco,
Premier Holdings, Newco 1 or HMTF Poultry and borrowed by the Borrower
(other than under the Intercompany Loan Agreement or Premier
Holdings/Borrower Loan Agreement), which loans do not bear cash interest,
cannot be repaid during the Finance Period and are otherwise fully
subordinated to the obligations of the Obligors under the Finance
Documents on terms satisfactory to the Agent and where copies (certified
by a director or the secretary of the Borrower as true, complete and
up-to-date copies) of the documents evidencing such
20
Borrowed Money are delivered to the Agent promptly upon those documents
being entered into, or, where the context requires, the documents or
instruments evidencing such loans;
SUBORDINATION DEEDS means (a) the Intercompany Loan Subordination Deed,
(b) the Premier Holdings/Borrower Subordination Deed, (c) the HMTF
Poultry/Borrower Subordination Deed and (d) any other subordination deeds
from time to time entered into in favour of the Security Agent in respect
of Subordinated Shareholder Loans;
SUBSIDIARY means:
(a) in relation to Premier Holdings and the Borrower, a subsidiary
within the meaning of section 736 of the Act and, for the purposes
of clauses 10.1(a), 10.3 and Schedule 8 only, a subsidiary
undertaking within the meaning of section 258 of the Act; and
(b) in relation to any other person, any entity (i) which is controlled
directly or indirectly by that person or (ii) of whose dividends or
distributions on ordinary voting share capital that person is
entitled to receive more than 50 per cent.; and CONTROL for this
purpose means the direct or indirect ownership of the majority of
the voting share capital of such entity or to determine the
composition of a majority of the board of directors (or like board)
of such entity, in each case whether by virtue of ownership of share
capital, contract or otherwise;
SUBSTITUTE has the meaning given to that term in clause 15.3;
SUBSTITUTE BASIS has the meaning given to that term in clause 13.4(b);
SUBSTITUTION CERTIFICATE means a certificate substantially in the terms of
Part 1 or Part 2 of Schedule 5;
SUPPLEMENTAL AGREEMENT means the agreement supplemental to the Senior
Facilities Agreement dated 27 May 2002 made between, amongst others, the
parties to this Agreement;
SYNDICATION COMPLETION DATE means the date which is the earlier of (a) the
date falling 120 days after the later of (i) execution of this Agreement
by or on behalf of all parties thereto and (ii) the date on which the
Arrangement and Underwriting Fee (as defined in the relevant Third Fee
Letter) becomes payable (such period to be increased by a day for each day
during which any proceedings, investigation, examination or enquiry in
respect of any part of any Acquisition are initiated or are ongoing by any
competition authority) and (b) the date on which the Arranger declares
that the syndication of the Facility has successfully completed;
TARGETS means any businesses (comprising either companies or assets (or
both)) acquired by a Purchaser, such Acquisition being funded (in whole or
in part) by an Advance under the Facility and TARGET means any one of
them;
TARGET DAY means a day on which the Trans-European Automated Real-time
Gross Settlement Express Transfer system (TARGET) is operating;
TARGET GROUP means, in respect of each Target, that Target and its
Subsidiaries from time to time and MEMBER OF THE TARGET GROUP means any of
that Target and its Subsidiaries;
TAXES means all taxes, imposts, duties, levies, charges, deductions and
withholdings in the nature or on account of tax whether of the United
Kingdom or elsewhere, together with all interest thereon and penalties
with respect thereto and Tax and TAXATION shall be construed accordingly;
21
TERMINATION DATE means the last day of the Commitment Period;
THIRD FEE LETTERS means the fee letters dated 2 October, 2003 between
(respectively) the Borrower and the Agent and between the Borrower, the
Arranger and the Underwriter;
TOTAL COMMITMENTS means, in respect of the Facility at any relevant time,
the total of the Commitments of all the Banks in respect of the Facility
at such time;
TOTAL CONTRIBUTIONS means, in respect of the Facility at any relevant
time, the total of the Contributions of all the Banks in respect of the
Facility at such time;
TRANSACTION DOCUMENTS means the Intercompany Loan Agreement, the Premier
Holdings/Borrower Loan Agreement, the Subordinated Shareholder Loans, the
Demerger Agreements, the Second Transaction Documents and the Acquisition
Agreements;
TREATY means the Treaty establishing the European Economic Community being
the Treaty of Rome of 25th March, 1957 as amended by the Single Xxxxxxxx
Xxx 0000 and the Maastricht Treaty (which was signed on 7th February, 1992
and came into force on 1st November, 1993) as amended, varied or
supplemented from time to time;
TREATY LENDER means a person which, by virtue of the provisions of a
double taxation agreement between the jurisdiction in which the Borrower
is resident and the country of residence of that person is, subject only
to a prior direction given to the Borrower by the appropriate tax
authority pursuant to an application by that person, eligible, on the date
of this Agreement (or, if later, the date such Bank becomes a party to
this Agreement) to have payments made to it by that Borrower under this
Agreement without any deduction or withholding in respect of Taxes;
UKIPR AGREEMENT means the agreement for the sale of certain Intellectual
Property Rights entered into in connection with the UK Second Acquisition
between the certain of the Second Vendors and the UK Second Purchaser;
UK LENDER means:
(a) a company which is resident in the United Kingdom for tax purposes;
or
(b) a partnership each of whose members is a company so resident; or
(c) a company which is not resident in the United Kingdom for tax
purposes, but which carries on a trade in the United Kingdom through
a branch or agency and is subject to corporation tax on interest
paid to it under this Agreement under section 11(2) of the Income
and Corporation Taxes Xxx 0000;
UK LISTING AUTHORITY means the Financial Services Authority in its
capacity as the competent authority for the purposes of Part VI of the
Financial Services and Markets Xxx 0000;
UK SECOND ACQUISITION means the acquisition by the UK Second Purchaser of
the United Kingdom ambient food business of Nestle UK Ltd pursuant to the
UK Second Acquisition Agreements;
UK SECOND ACQUISITION AGREEMENTS means:
(a) the Second SPA;
22
(b) the UKIPR Agreement;
(c) the Rowntrees Licence; and
(d) all other documents delivered pursuant to or in relation to any of
(a) to (c) (inclusive) above (including, without limitation, the
transitional services agreement entered into between certain of the
Second Vendors and the Second Purchasers in connection with the UK
Second Acquisition);
UK SECOND PURCHASER means Premier Ambient Products (UK) Limited (company
number 4427006) whose registered office is at 00 Xxx Xxxxx, Xxxxx Xxxxxx,
Xxxxxxxxxx X00 0XX;
UK TOPCO means Premier Foods Investments Limited (company number 04426994)
whose registered office is at 00 Xxx Xxxxx, Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxx
Xxxxxxxx X00 0XX;
UNDERWRITER means JPMorgan Xxxxx Xxxx xx 000 Xxxxxx Xxxx, Xxxxxx XX0X 0XX;
VENDORS means, in the case of any Acquisition, the vendors of the relevant
Target and any of their Affiliates which are party to any of the relevant
Acquisition Agreements and VENDOR means any one of them; and
VOTING UNDERTAKING means the agreed form voting undertaking granted, or to
be granted, by Cayman 1 in favour of the Security Agent.
1.2 HEADINGS
Clause headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this
Agreement.
1.3 CONSTRUCTION OF CERTAIN TERMS
In this Agreement, unless the context otherwise requires:
(a) references to clauses and Schedules are to be construed as
references to the clauses of, and Schedules to, this Agreement and
references to this Agreement include its Schedules;
(b) references to (or to any specified provision of) this Agreement or
any other document shall be construed as references to this
Agreement, that provision or that document as in force for the time
being and as from time to time amended in accordance with its terms,
or, as the case may be, with the agreement of the relevant parties
and (where such consent is, by the terms of this Agreement or the
relevant document, required to be obtained as a condition to such
amendment being permitted) the prior written consent of the Agent;
(c) references to a REGULATION include any present or future regulation,
order, rule, directive, requirement, request or guideline (whether
or not having the force of law) of any governmental body, agency,
department or regulatory, self-regulatory or other authority or
organisation which is available to those persons it affects;
(d) references to an AUTHORISATION mean and include any consent,
authorisation, licence, approval, exemption, filing, concession,
registration, notarisation and permit;
(e) words importing the plural shall include the singular and vice
versa;
23
(f) references to a time of day are to London time;
(g) references to a PERSON shall be construed as including references to
an individual, firm, company, corporation, unincorporated body of
persons or any State or any of its agencies;
(h) references to ASSETS include all or part of any business,
undertaking, real property, personal property, uncalled capital and
any rights (whether actual or contingent, present or future) to
receive, or require delivery of, any of the foregoing;
(i) references to a GUARANTEE include references to an indemnity,
standby letter of credit or other assurance against financial loss
including, without limitation, an obligation to purchase assets or
services as a consequence of a default by any other person to pay
any Indebtedness and GUARANTEED shall be construed accordingly;
(j) references to the EQUIVALENT of an amount specified in a particular
currency (the SPECIFIED CURRENCY AMOUNT) shall be construed as a
reference to the amount of the other relevant currency which can be
purchased at the Agent's spot rate (as certified by the Agent) with
the specified currency amount in the London foreign exchange market
at or about 11 a.m. on the day on which the calculation falls to be
made for spot delivery;
(k) references to any enactment shall be deemed to include references to
such enactment as re-enacted, amended or extended;
(l) references to documents being in the AGREED FORM mean documents
initialled by both Xxxxx & Xxxxx (on behalf of the Agent and the
Arranger) and Weil, Gotshal & Xxxxxx (on behalf of the Borrower) or,
in the case of a document not so initialled, in a form to be agreed
between the Agent and the Borrower (acting reasonably);
(m) references to a fixed date intended to mean the end of a financial
period shall be construed, unless the context otherwise requires, as
references to the accounting reference date in respect of that
financial period falling on or about that fixed date;
(n) references to documents being duly certified or to duly certified
copies of such documents shall mean that such documents are
certified as true and complete copies of the executed originals of
such documents by a director of the Borrower; and
(o) references to ORDINARY COURSE OF BUSINESS mean, in relation to any
person, the ordinary course of business of such person carried out
in accordance with the Finance Documents.
1.4 SUCCESSORS AND ASSIGNS
The expressions AGENT, ARRANGER, UNDERWRITER, BANKS, BORROWER, FINANCE
PARTIES, OBLIGORS, SECURITY AGENT and PURCHASER include, in each case,
their respective successors and, in the case of the Finance Parties, their
respective permitted assignees, permitted transferees and Substitutes,
whether immediate or derivative.
24
2. THE FACILITY
2.1 THE FACILITY
The Banks, relying upon each of the representations and warranties in
clause 9, agree to make available to the Borrower a term loan facility in
a principal amount of up to (pound)75,000,000 to be used solely for
Acquisition Purposes.
2.2 SEVERAL OBLIGATIONS
The obligation of each Bank under this Agreement in relation to the
Facility shall be to contribute that proportion of each relevant Advance
under the Facility which its Commitment in relation to the Facility bears
to the Total Commitments in relation to the Facility.
3. THE CONDITIONS
3.1 DOCUMENTS AND EVIDENCE
The obligation of each Bank to make its Commitment available shall be
subject to the condition that the Agent, or its duly authorised
representative, shall have received:
(a) not later than the date of the Drawdown Notice for the first Advance
under the Facility, the documents and evidence specified in part 1
of Schedule 3 in form and substance satisfactory to the Agent
(acting reasonably); and
(b) in respect of each proposed Acquisition and the Advance proposed to
be drawn to assist in the funding of that Acquisition, not later
than the date of the Drawdown Notice for such Advance, the documents
and evidence specified in part 2 of Schedule 3.
The Agent shall promptly notify the Borrower and the Banks when such
conditions have been satisfied.
3.2 GENERAL CONDITIONS PRECEDENT
The obligation of each Bank to contribute to any Advance is subject to the
further conditions that at the date of each Drawdown Notice and on each
Drawdown Date:
(a) the representations and warranties set out in:
(i) clause 9.1 which are repeated pursuant to clause 9.4;
(ii) (in respect of the first Advance only) clause 9.2; and
(iii) (in respect of the then proposed Acquisition and the Advance
proposed to be drawn to assist in the funding of that
Acquisition) clause 9.3
are true and correct in all material respects on and as of each such
date as if each were made with respect to the facts and
circumstances existing at such date; and
(b) all of the conditions in clause 10.6(s) in respect of the then
proposed Acquisition are complied with; and
(c) no Default shall have occurred and be continuing or would result
from such Advance.
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3.3 WAIVER OF CONDITIONS PRECEDENT
The conditions specified in this clause 3 are inserted solely for the
benefit of the Banks and may be waived on their behalf in whole or in part
and with or without conditions by the Agent acting on the instructions of
the Majority Banks in respect of any Advance.
4. DRAWINGS UNDER THE FACILITY
4.1 THE FACILITY
(a) Subject to the terms and conditions of this Agreement, the Advances shall
be made to the Borrower in amounts complying with clause 4.1(b), and
4.1(c) following receipt by the Agent from the Borrower of a completed
Drawdown Notice in the form of Schedule 2 not later not later than 9:30
a.m. on the Banking Day before the Quotation Date in respect of the
proposed Drawdown Date.
(b) The principal amount specified in each Drawdown Notice shall, subject to
the terms and conditions of this Agreement, be not less than
(pound)1,000,000 or the balance of the Total Commitments and shall be used
for the purposes described in clause 2.1.
(c) The Borrower irrevocably instructs the Agent to remit the proceeds of each
Advance, to the extent made for the purposes of funding any part of the
Acquisition Consideration payable under any Acquisition Agreements on the
completion date of any such Acquisitions, to the relevant Vendor (whose
receipt shall be in good discharge to the Agent).
(d) To the extent that the Facility is not drawn in full by the Termination
Date, the undrawn Commitments of the Banks (if any) shall thereupon be
automatically reduced to zero and cancelled.
4.2 ADVANCES GENERALLY
(a) A Drawdown Notice (or notice purporting to be such) shall only be
effective if it complies with this Agreement and only upon actual receipt
by the Agent and, once given, shall be irrevocable.
(b) As soon as practicable after receipt of each Drawdown Notice complying
with this Agreement the Agent shall notify each relevant Bank thereof and
of the date on which the proposed Advance is to be made and of the
relevant Interest Period. Subject to clause 3, each Bank shall on such
Drawdown Date participate in such Advance by making available to the Agent
its portion of such Advance in accordance with clause 8.2.
4.3 APPLICATION OF PROCEEDS
Without prejudice to the Borrower's obligations under clause 10.2(a), none
of the Finance Parties shall have any responsibility for the application
of the proceeds of any Advance by the Borrower.
5. INTEREST AND INTEREST PERIODS
5.1 INTEREST ON THE ADVANCES
(a) Interest obligations
26
The Borrower shall pay interest on each Advance in respect of each
Interest Period on the relevant Interest Payment Date (or, in the case of
Interest Periods of more than 6 months, by instalments, every 6 months
from the commencement of the relevant Interest Period and on the relevant
Interest Payment Date) at the rate per annum determined by the Agent to be
the aggregate of (i) the applicable Margin, (ii) the Additional Cost and
(iii) LIBOR.
(b) Interest Periods for the Advances
(i) The Borrower may by notice received by the Agent not later
than 10 a.m. on the Banking Day before the Quotation Date in
respect of each Interest Period in respect of each Advance:
(A) (subject to clause 5.1(b)(ii)(C)) specify whether such
Interest Period shall have a duration of 3 or 6 or (if
available to all Banks) 9 or 12 months; and/or
(B) after the Termination Date, specify that such Advance
shall be split into two or more Advances or, if the next
Interest Period for that Advance would begin on the same
day as the next Interest Period in respect of any other
Advance, that such Advances be consolidated into one
Advance, in each case with effect from the beginning of
the next Interest Period, provided that:
I. not more than 4 Advances may be outstanding at any one
time under the Facility; and
II. each Advance shall be not less than(pound)1,000,000 (or
any larger sum which is an integral multiple
of(pound)50,000) or the balance of the Commitments in
respect of the Facility.
(ii) Every Interest Period in respect of each Advance shall be of
the duration specified by the Borrower pursuant to clause
5.1(b)(i) but so that:
(A) the initial Interest Period in respect of each Advance
will commence on the relevant Drawdown Date and each
subsequent Interest Period in respect thereof shall
commence forthwith upon the expiry of the previous
Interest Period;
(B) if the Borrower fails to select the duration of an
Interest Period in respect of an Advance in accordance
with the provisions of clause 5.1(b)(i) and this clause
5.1(b)(ii) such Interest Period shall have a duration of
3 months or such other period as shall comply with this
clause 5.1(b)(ii); and
(C) for the purpose of assisting in the syndication of the
Facility, the Interest Periods for the Advances shall
until the Syndication Completion Date be such period or
periods as may be agreed between the Borrower and the
Agent.
5.2 INTEREST ON OVERDUE AMOUNTS
(a) If the Borrower fails to pay any sum (including, without limitation, any
sum payable pursuant to this clause 5.2) on its due date for payment under
this Agreement the Borrower shall pay
27
interest on such sum from the due date up to the date of actual payment
(as well after as before judgment) at a rate determined by the Agent
pursuant to this clause 5.2.
(b) The period beginning on the due date for payment and ending on the date of
actual payment shall be divided into successive periods of not more than 3
months as selected by the Agent (after consultation with the Banks so far
as reasonably practicable in the circumstances) each of which (other than
the first, which shall commence on such due date) shall commence on the
last day of the preceding such period, but so that if the unpaid sum is an
amount of principal which shall have become due and payable prior to the
next succeeding Interest Payment Date relating thereto then the first such
period selected by the Agent shall end on such Interest Payment Date.
(c) The rate of interest applicable to each period referred to in clause
5.2(b) shall be the aggregate as determined by the Agent) of (i) one per
cent. per annum, (ii) the applicable Margin, (iii) the Additional Cost and
(iv) LIBOR.
(d) Interest under this clause 5.2 shall be due and payable on the last day of
each period determined by the Agent pursuant to this clause 5.2 or, if
earlier, on the date on which the sum in respect of which such interest is
accruing shall actually be paid.
5.3 NOTIFICATION OF INTEREST PERIODS AND INTEREST RATE
The Agent shall notify the Borrower and the Banks promptly of the duration
of each Interest Period or other period for the calculation of interest
(or, as the case may be, default interest) and of each rate of interest
determined by it under this clause 5.
5.4 REFERENCE BANK QUOTATIONS
If any Reference Bank is unable or otherwise fails to furnish a quotation
for the purpose of calculating LIBOR where such a quotation is required
having regard to the definition of LIBOR in clause 1.1 the interest rate
for the relevant Interest Period or other relevant period shall be
determined, subject to clause 13.4, on the basis of the quotations
furnished by the remaining Reference Banks.
6. REPAYMENT, PREPAYMENT AND CANCELLATION
6.1 REPAYMENT OF THE FACILITY
The Borrower shall repay the Advances in Sterling in full on the Repayment
Date.
6.2 OPTIONAL PREPAYMENT OF ALL THE BANKS
The Borrower may, subject to the Intercreditor Agreement and clause 6.5,
prepay the Advances at any time in whole or part (in minimum amounts of
(pound)1,000,000), without premium or penalty but without prejudice to its
obligations under clauses 6.5(c), 8.5, 12, 13.2 and 13.4.
6.3 OPTIONAL PREPAYMENT OF A BANK
(a) The Borrower may also prepay (in whole but not in part only), without
premium or penalty, subject to the Intercreditor Agreement but without
prejudice to its obligations under clauses 6.5(c), 8.5, 12, 13.2 and 13.4:
28
(i) (upon notice to the Agent to such effect) the whole of the
Contribution to the Facility of any Bank to which the Borrower
shall have become obliged to pay additional amounts under
clauses 8.5, or 13.2; or
(ii) (upon notice to such effect to the Agent within 10 Banking
Days of receipt of the relevant certificate of a Substitute
Basis) the whole of the Contribution to the Facility of any
Bank to which a Substitute Basis applies by virtue of clause
13.4.
(b) Upon any such notice of such prepayment being given, the Commitment of the
relevant Bank to the Facility shall be reduced to zero.
6.4 MANDATORY PREPAYMENTS
(a) Prepayment Events:
(i) Unless the Agent (acting on behalf of all of the Banks)
otherwise agrees, the Borrower shall, subject to the
Intercreditor Agreement, be obliged to prepay the Advances in
whole immediately upon the occurrence of a Full Prepayment
Event (whether or not also an Event of Default), whereupon the
Total Commitments in respect of the Facility shall be reduced
to zero.
(ii) Unless the Agent (acting on behalf of all of the Banks)
otherwise agrees, the Borrower shall be obliged to apply (or
procure that the same are applied) the aggregate net proceeds
of any Flotation which does not constitute a Full Prepayment
Event as follows:
(A) the first (pound)100,000,000 of such aggregate net proceeds
shall be applied in or towards prepaying (and cancelling a
corresponding part of the commitments under) the Senior
Facilities or, subject to the Intercreditor Agreement, in
prepaying the Advances; and
(B) thereafter, an amount equal to 50 per cent. of any other
aggregate net proceeds shall be applied in or towards
prepaying (and cancelling a corresponding part of the
commitments under) the Senior Facilities, or subject to the
Intercreditor Agreement, in prepaying the Advances.
For the purpose of this clause 6.4(a)(ii) AGGREGATE NET PROCEEDS means the
total cash proceeds realised by any Acquisition Party, Premier Holdings
and/or other entity the subject of a Flotation, less the reasonable costs,
fees and expenses incurred in connection with such Flotation. On each
occasion that aggregate net proceeds are received in respect of a
Flotation not constituting a Full Prepayment Event, such aggregate net
proceeds shall immediately be deposited in a cash collateral account
maintained for the purposes of the Senior Facilities Agreement or, if the
Senior Facilities have been repaid in full, in a Cash Collateral Account
with the Cash Collateral Account Bank and shall be applied in prepaying
(and cancelling a corresponding part of the commitments under) the Senior
Facilities or, subject to the Intercreditor Agreement, in prepaying the
Advances on the next succeeding Interest Payment Dates relating to the
Advances concerned.
(b) Receipts of claims:
Unless the Agent (acting on behalf of all of the Banks) otherwise agrees,
the Borrower will apply (or procure that the same are applied) all moneys
received by it or any other member of the Group (each such receipt being a
RELEVANT RECEIPT) as proceeds (net of associated costs
29
and expenses) of any claim against any Vendor in connection with any
Acquisition or the writers of the Reports or any claim in respect of
advice given in relation to any Acquisition, as follows:
(i) prior to the Enforcement Date the Relevant Receipt shall be
applied:
(A) to the extent the Relevant Receipt relates to a liability of,
or a charge or claim upon, a member of the Group, in the
discharge of that liability, charge or claim (or in
reimbursement of monies disbursed in connection with such
liability, charge or claim) provided that such moneys shall be
properly applied in such manner within six months of receipt
by the relevant member of the Group; or
(B) to the extent the Relevant Receipt relates to an asset
reasonably required in the conduct of the Group's business, in
the acquisition of that asset provided that such moneys shall
be properly applied in such manner within six months of
receipt by the relevant member of the Group; or
(C) to the extent the Relevant Receipt exceeds the aggregate
amount required to be applied under (A) or (B) above, in
prepaying (and cancelling a corresponding part of the
commitments under) the Senior Facilities or, subject to the
Intercreditor Agreement, in prepaying the Advances on the next
succeeding Interest Payment Dates relating to the Advances
concerned. Pending every such application or prepayment, the
Borrower shall procure that on the date of the Relevant
Receipt by a member of the Group, an amount, or amounts in
aggregate, equal to the Relevant Receipt are placed in a cash
collateral account maintained for the purposes of the Senior
Facilities Agreement or, if the Senior Facilities have been
repaid in full, in a Cash Collateral Account with the Cash
Collateral Account Bank; or
(ii) on or after the Enforcement Date the Relevant Receipt shall be
applied in accordance with clause 9 of the Intercreditor
Agreement (and such moneys shall be paid to the Security Agent
for such purposes) or as the Security Agent may otherwise
direct.
6.5 PREPAYMENTS GENERALLY
(a) No prepayment may be made pursuant to clauses 6.3 or 6.4 unless the
Borrower shall have given the Agent 3 Banking Days prior notice specifying
the proposed date of the prepayment and the amount to be prepaid. Every
such notice shall be effective only on actual receipt by the Agent, shall
be irrevocable and shall oblige the Borrower to make the relevant
prepayment on the date specified.
(b) No amount prepaid under the Facility may be reborrowed.
(c) All prepayments shall be made together with (to the extent these relate to
the amounts prepaid) (I) accrued interest to the date of prepayment
(calculated, in the case of any prepayment of a Bank's Contribution to the
Facility pursuant to clause 6.3(a)(ii) and in respect of the period during
which the relevant Substitute Basis has applied by virtue of clause
13.4(b), at a rate per annum equal to the rate certified by such Bank to
be an interest rate equivalent to the aggregate of (A) the applicable
Margin and (B) the cost (including Additional Cost) to such Bank of
funding its Contribution to the Facility for such period); (ii) any
additional amount payable under clauses 8.5 or 13.2 attributable to the
amounts prepaid; and (iii) all other sums payable by the Borrower to the
Banks under this Agreement
30
attributable to the amounts prepaid including, without limitation, any
accrued commitment commission payable under clause 7.2 and any amounts
payable under clause 12.1.
(d) Upon any prepayment being made (other than a prepayment under clause 6.3),
the Commitments of the Banks in respect of the Facility shall be reduced
accordingly (pro-rata the Banks' respective Commitments in respect of the
Facility).
(e) The Borrower may not make any prepayments in respect of the Facility save
as expressly provided in this Agreement.
6.6 APPLICATION OF DISPOSAL PROCEEDS
(a) Subject to clause 6.6(b), unless the Agent (acting on behalf of all of the
Banks) otherwise agrees, the Borrower shall procure that an amount equal
to the Net Proceeds of each relevant disposal (other than, for the
avoidance of doubt, any amounts subject to a valid Reinvestment Notice)
and each mandatory disposal are, as soon as practicable and in any event
no later than five Banking Days after their receipt by a member of the
Group, deposited in a cash collateral account maintained for the purposes
of the Senior Facilities Agreement or, if the Senior Facilities have been
repaid in full, in a Cash Collateral Account with the Cash Collateral
Account Bank and shall be applied in prepaying (and cancelling a
corresponding part of the commitments under) the Senior Facilities or,
subject to the Intercreditor Agreement, in prepaying the Advances on the
next succeeding Interest Payment Dates relating to the Advances concerned.
(b) The Borrower may apply the Net Proceeds of a relevant disposal which are
the subject of a valid Reinvestment Notice in or towards a permitted
application within six months of the relevant disposal. The amount of Net
Proceeds that are subject to Reinvestment Notices shall not exceed
(pound)10,000,000 in aggregate in respect of any financial year of the
Borrower.
(c) Unless the Agent (acting on behalf of all of the Banks) otherwise agrees,
the Borrower shall procure that (I) any unapplied Net Proceeds of a
relevant disposal and (ii) all Net Proceeds of each mandatory disposal are
applied in prepaying (and cancelling a corresponding part of the
commitments under) the Senior Facilities or, subject to the Intercreditor
Agreement, in prepaying the Advances.
For the purposes of this clause 6.6:
(i) a RELEVANT DISPOSAL means a disposal permitted under clause
10.6(f)(iii) (and no other paragraph thereof) in any case which
results in Net Proceeds in excess of (pound)750,000 (or its Sterling
equivalent at the date of receipt) provided that the aggregate
Sterling equivalent of the gross proceeds of such disposals excluded
from this definition of relevant disposal shall not exceed
(pound)3,000,000 in any financial year of the Borrower;
(ii) a MANDATORY DISPOSAL means any disposal of the ownership interests
in or assets of a Target Group or the ownership interests in or
assets of any member of the Group as a result of any Acquisition,
which disposal is required to be made by any relevant competition
authority (or is in order to mitigate against any proceedings,
investigation, examination or enquiry by such a competition
authority);
(iii) UNAPPLIED NET PROCEEDS means, in respect of a relevant disposal
which is not a mandatory disposal, those Net Proceeds (or their
Sterling equivalent at the date of receipt, if denominated in a
currency other than Sterling) of such relevant disposal which are
subject to a valid Reinvestment Notice and which, as at the end of
the period of six months after the date of such relevant disposal
or, in respect of up to
31
(pound)6,300,000 of Net Proceeds of relevant disposals which is at
the date on which the Majority Senior Banks consented to the
requests contained in the consent request letter dated 2 October
2003, deposited in a cash collateral account maintained for the
purposes of the Senior Facilities Agreement, as at the end of the
period ending on 16 October 2004 (EXISTING NET PROCEEDS) (or, if
earlier, as at the date on which the Borrower notifies the Agent
that the Group no longer intends and expects to use all or the
relevant portion of the Net Proceeds concerned towards a permitted
application) have not been applied in a permitted application;
(iv) a PERMITTED APPLICATION means any of (A) the acquisition of a
replacement fixed asset of the same or a similar type and of
comparable or superior value and quality or (B) the acquisition of a
fixed asset the commercial purpose and effect of which is to replace
or improve upon the commercial purpose and effect of the fixed asset
disposed of or (C) the acquisition of fixed assets of comparable or
superior quality for another aspect of the Group's business,
provided in each case (to the extent permitted by law) that such
fixed asset is subject to a fully enforceable legally binding
Encumbrance in favour of the Security Agent and the other Finance
Parties equivalent to or better than the Encumbrance (if any) to
which the asset, the disposal of which resulted in the Net Proceeds
which are being so applied, was subject, and provided further that
the only permitted application in respect of the Existing Net
Proceeds is the application thereof in or towards satisfying the
Acquisition Consideration in respect of Permitted Acquisitions; and
(v) a REINVESTMENT NOTICE means, in respect of the Net Proceeds of a
relevant disposal which is not a mandatory disposal, a written
notice executed by a director or the treasurer of the Borrower and
received by the Agent no later than 5 Banking Days after receipt of
such Net Proceeds by a member of the Group which confirms that no
Event of Default has occurred and is continuing and that a member of
the Group intends and expects to use all or the relevant portion of
the Net Proceeds of the relevant disposal concerned towards a
permitted application.
6.7 CASH SWEEP
Unless the Agent (acting on behalf of all of the Banks) otherwise agrees,
the Borrower shall apply or procure that there is applied in prepaying
(and cancelling a corresponding part of the commitments under) the Senior
Facilities or, subject to the Intercreditor Agreement, in prepaying the
Advances (without premium or penalty) on the next succeeding Interest
Payment Dates in respect of the Advances concerned following the delivery
to the Agent of the audited annual consolidated financial statements of
the Group and the Auditors' statement pursuant to clause 10.1(b)(i) and
10.1(b)(iv) in respect of each financial year ending on or after 31
December 2002 an amount equal to a percentage of the Consolidated Excess
Cash Flow in respect of such financial year determined according to the
ratio of Total Net Debt to Consolidated EBITDA (determined in accordance
with Schedule 8 and clause 10.3) as at the end of the financial year to
which such financial statements relate.
32
% of Consolidated Excess Cash Flow
Total Net Debt: Consolidated EBITDA to be prepaid
---------------------------------------------------------------------------------------------
greater than or equal to 4.5:1 75%
greater than or equal to 3.0:1 but less than 4.5:1 50%
less than 3.0:1 25%
6.8 CITADEL INSURANCE COMPANY LIMITED
The Borrower shall procure that any cash which is surplus to the
reasonable cash requirements of Citadel Insurance Company Limited
(including, without limitation, all cash which is in excess of the amount
required from time to time as cash collateral in respect of insurance
policies written by Citadel Insurance Company Limited) shall be invested
in the Borrower either by way of the subscription for ordinary shares in
the Borrower or by way of shareholder loans to the Borrower which are
subordinated on the same terms as provided for in the Premier
Holdings/Borrower Subordination Deed. The Borrower undertakes to
immediately deposit the proceeds of any such subscription or shareholder
loan in a cash collateral account maintained for the purposes of the
Senior Facilities Agreement or, if the Senior Facilities have been repaid
in full, in a Cash Collateral Account with the Cash Collateral Account
Bank and shall apply such proceeds in prepaying (and cancelling a
corresponding part of the commitments under) the Senior Facilities or,
subject to the Intercreditor Agreement, in prepaying the Advances on the
next succeeding Interest Payment Dates relating to the Advances concerned.
6.9 WAIVER OF PREPAYMENT
A prepayment of the Advances shall not be required to be made under
clauses 6.4(a)(ii), 6.4(b), 6.6, 6.7 or 6.8 while the Senior Facilities
are outstanding to the extent that a waiver of the corresponding
prepayment obligation under the Senior Facilities Agreement has been given
without a breach of clause 13.3 of the Intercreditor Agreement occurring.
7. FEES AND EXPENSES
7.1 ARRANGEMENT, UNDERWRITING AND AGENCY FEES
The Borrower shall pay to the Agent or shall procure that there is paid:
(a) at the time and in the circumstances in which such fee is payable in
accordance with the terms of the Third Fee Letters, an arrangement
and underwriting fee of the amount agreed by the Borrower with the
Arranger and the Underwriter in the Third Fee Letters; and
(b) on the first Drawdown Date and (in advance) on each anniversary
thereof until no amount is outstanding under this Agreement and no
Commitment is in force, for the account of the Agent, an agency fee
of the amounts agreed by the Borrower with the Agent in the Third
Fee Letters.
33
7.2 COMMITMENT FEES
The Borrower shall pay to the Agent, or shall procure that there is paid
to the Agent on the earlier of:
(a) the first Drawdown Date; and
(b) the date on which the Commitment Period is extended beyond 16
February 2004
and thereafter on the dates falling at 3 monthly intervals after such
initial payment date during the Commitment Period and on the Termination
Date, for the account of the Banks (pro-rata their Commitments),
commitment commission computed at the Commitment Commission Rate on the
daily amount (accruing on and from the date of this Agreement or, if
earlier, 17 November 2003) by which the Total Commitments in respect of
the Facility exceed the aggregate amount of the Advances.
7.3 EXPENSES
The Borrower shall pay to the Agent:
(a) all reasonable out-of-pocket expenses (including but not limited to
expenses incurred in connection with the Reports) of the Agent, the
Security Agent, the Arranger, the Underwriter and their Affiliates
associated with the transactions contemplated by this Agreement,
including but not limited to (i) the syndication of the Facility and
publicity associated therewith, (ii) the preparation, execution and
delivery, administration, waiver, modification and enforcement of
the Finance Documents (including documentary taxes and the
reasonable fees, disbursements and other charges of counsel and
consultants) and (iii) all reasonable costs of any investigation,
litigation or subpoena arising out of the transactions contemplated
hereby or any Acquisition; and
(b) after a Default has occurred and whilst it is continuing, on demand,
all reasonable expenses (including legal and out-of-pocket expenses)
incurred by any of the Finance Parties in contemplation of, or
otherwise in connection with, the enforcement or attempted
enforcement of, or preservation or attempted preservation of any
rights under, any of the Finance Documents, or otherwise in respect
of the recovery, or attempted recovery, of moneys owing under the
same.
7.4 VALUE ADDED TAX
All fees and expenses payable pursuant to clause 5 and this clause 7 shall
be paid together with an amount equal to any value added tax thereon
payable by any of the Finance Parties in respect of such fees and
expenses. Any value added tax chargeable in respect of any services
supplied by any Finance Party under any of the Finance Documents shall, on
delivery of a value added tax invoice, be paid in addition to any sum
agreed to be paid under any of the Finance Documents.
7.5 STAMP AND OTHER DUTIES
The Borrower shall pay all stamp, documentary, registration, notarisation
or other duties or Taxes (including any duties or Taxes payable by, or
assessed on, the Finance Parties) imposed on or in connection with the
negotiation, preparation and execution of any of the Finance Documents and
shall indemnify the Finance Parties against any liability arising by
reason of any delay or omission by the Borrower to pay such duties or
Taxes.
34
8. PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS
8.1 NO SET-OFF OR COUNTERCLAIM; DISTRIBUTION TO THE BANKS
All payments to be made by the Borrower under this Agreement shall be made
in full, without any set-off or counterclaim whatsoever and, subject as
provided in clause 8.5, free and clear of any deductions or withholdings,
in the currency in which payment is due on the due date to the account of
the Agent at such bank in such place as the Agent may from time to time
specify for this purpose, in the case of Sterling, in immediately
available funds, and, in any other case, in such funds as may be generally
accepted for settlement of transactions of this kind. Save where this
Agreement provides for a payment to be made for the account of a
particular Finance Party, in which case the Agent shall distribute the
relevant payment to the relevant Finance Party concerned, payments to be
made by the Borrower under this Agreement shall be for the account of all
the Banks and the Agent shall forthwith distribute such payments in like
funds as are received by the Agent to the Banks rateably in accordance
with their Commitments or Contributions, as the case may be. Such
distribution by the Agent shall be good discharge to the Borrower.
8.2 PAYMENTS BY THE BANKS
All sums to be advanced by the Banks to the Borrower under this Agreement
shall be remitted, in the case of Sterling, in immediately available funds
and, in any other case, in such funds as may be generally accepted for
settlement of transactions of this kind on the relevant Drawdown Date to
the account of the Agent at such bank as the Agent may have notified to
the Banks and shall be applied in accordance with the irrevocable
instructions contained in clause 4.1(c) and otherwise be paid by the Agent
on such date in like funds as are received by the Agent to the account of
the Borrower specified in the relevant Drawdown Notice.
8.3 NON-BANKING DAYS
When any payment under this Agreement would otherwise be due on a day
which is not a Banking Day, the due date for payment shall be postponed to
the next following Banking Day unless such Banking Day falls in the next
calendar month in which case payment shall be made on the immediately
preceding Banking Day.
8.4 AGENT MAY ASSUME RECEIPT
Where any sum is to be paid under this Agreement to the Agent for the
account of another person, the Agent may (unless a notice is received by
it to the contrary prior to the time the relevant payment was expected to
be made) assume that the payment will be made when due and may (but shall
not be obliged to) make such sum available to the person so entitled. If
it proves to be the case that such payment was not made to the Agent, then
the person to whom such sum was so made available shall on request refund
such sum to the Agent together with interest thereon sufficient to
compensate the Agent for the cost of making available such sum up to the
date of such repayment and the person by whom such sum was payable shall
indemnify the Agent for any and all loss or expense which the Agent may
sustain or incur as a consequence of such sum not having been paid on its
due date.
8.5 GROSSING-UP FOR TAXES
If at any time the Borrower is required by law or regulation to make any
deduction or withholding in respect of Taxes from any payment due under
this Agreement or any of the Borrower Security Documents for the account
of any Finance Party (or if the Agent, or as the case may be, the Security
Agent is required to make any such deduction or withholding from
35
a payment to a Finance Party), the sum due from the Borrower in respect of
such payment shall, subject to clause 8.6, be increased to the extent
necessary to ensure that, after the making of such deduction or
withholding, each Finance Party receives on the due date for such payment
(and retains, free from any liability in respect of such deduction or
withholding) a net sum equal to the sum which it would have received had
no such deduction or withholding been required to be made and the Borrower
shall indemnify each Finance Party against any losses or costs incurred by
any of them by reason of any failure of the Borrower to make any such
deduction or withholding or by reason of any increased payment not being
made on the due date for such payment. The Borrower shall as promptly as
possible deliver to the Agent copies of any receipts, certificates or
other reasonable proof evidencing the amounts (if any) paid or payable in
respect of any such deduction or withholding. The obligation of the
Borrower to make any increased payment under this clause 8.5 shall survive
termination of this Agreement for a period of nine months after such
termination.
8.6 QUALIFYING BANKS
Each Bank agrees promptly to notify the Agent and the Borrower if it is
not or ceases to be a Qualifying Bank. If any Bank is not or ceases to be
a Qualifying Bank, then (save in circumstances where such Bank ceases to
be a Qualifying Bank by reason of any change in law, regulation or double
taxation treaty or in its application or interpretation, in each case
taking effect after the date of this Agreement or the date such Bank
becomes a party to this Agreement, if later) the Borrower shall not be
liable to pay to that Bank under clause 8.5 any sum in excess of the sum
it would have been obliged to pay if that Bank had been, or had not ceased
to be, a Qualifying Bank.
Each Bank agrees that it will, as soon as is reasonably practicable after
the date of this Agreement, or, if later, the date on which such Bank
becomes a party to this Agreement, complete and file with the Taxation
authority of the country in which it is resident for the purposes of
Taxation, such forms (if any) which will enable interest to be paid
without withholding or deduction for or on account of Taxes of the United
Kingdom, and that, if such forms are returned to such Bank by its Taxation
authority, it will, as soon as reasonably practicable thereafter, file
such forms with the Inland Revenue.
8.7 CLAW-BACK OF TAX BENEFIT
If, following any such deduction or withholding as is referred to in
clause 8.5 any Finance Party shall receive or be granted a credit against
or remission for any Taxes payable by it, such Finance Party shall,
subject to the Borrower having made any increased payment in accordance
with clause 8.5 and to the extent that such Finance Party can do so
without prejudicing the retention of the amount of such credit or
remission and without prejudice to the right of such Finance Party to
obtain any other relief or allowance which may be available to it,
reimburse the Borrower with such amount as such Finance Party shall in its
absolute discretion certify to be the proportion of such credit or
remission as will leave such Finance Party (after such reimbursement) in
no worse position than it would have been in had there been no such
deduction or withholding from the payment by the Borrower as aforesaid.
Such reimbursement shall be made forthwith upon such Finance Party
certifying that the amount of such credit or remission has been received
by it. Nothing contained in this Agreement shall oblige any Finance Party
to investigate whether a Tax credit is payable, rearrange its tax affairs
or to disclose any information regarding its tax affairs and computations.
Without prejudice to the generality of the foregoing, the Borrower shall
not, by virtue of this clause 8.7, be entitled to enquire about any
Finance Party's tax affairs.
36
8.8 BANK ACCOUNTS
Each Bank shall maintain, in accordance with its usual practices, an
account or accounts evidencing the amounts from time to time lent by,
owing to and paid to it under this Agreement or any of the Borrower
Security Documents. The Agent shall maintain a control account showing the
utilisation of the Facility, including (separately) other sums owing by
the Borrower under this Agreement and all payments in respect thereof made
by the Borrower from time to time. The control account shall, in the
absence of manifest error, be conclusive evidence as to the amount from
time to time owing by the Borrower under this Agreement.
8.9 PARTIAL PAYMENTS
If, (I) on any date on which a payment is due to be made by the Borrower
under this Agreement, the amount received by the Agent from the Borrower
falls short of the total amount of the payment due to be made by the
Borrower on such date or (ii) on any date on which the Agent receives any
payment from the Security Agent or otherwise receives any amount
representing proceeds of realisations or other recoveries under any of the
Security Documents, the amount of such payment or other receipt falls
short of the total amount owing to the Finance Parties under this
Agreement on such date then (in any such case), without prejudice to any
rights or remedies available to the Finance Parties under any of the
Finance Documents, the Agent shall apply the amount actually received by
it in or towards discharge of the obligations of the Borrower under this
Agreement in the following order, notwithstanding any appropriation made,
or purported to be made, by the Borrower:
(a) first, in or towards payment, on a pro-rata basis, of any unpaid
costs and expenses (ignoring any fees payable under clause 7.1(a) or
(b)) of the Agent, Security Agent, Arranger or Underwriter under
this Agreement;
(b) secondly, in or towards payment to the Finance Parties, on a
pro-rata basis, of any amount owing to the Finance Parties under
clause 16.12;
(c) thirdly, in or towards payment to the Arranger of any portion of the
arrangement fee payable under clause 7.1(a) which remains unpaid;
(d) fourthly, in or towards payment to the Agent of any portion of the
agency fee payable under clause 7.1(b) which remains unpaid;
(e) fifthly, in or towards payment to the Finance Parties, on a pro-rata
basis, of any accrued commitment commission payable under clause 7.2
which shall have become due but remains unpaid;
(f) sixthly, in or towards payment to the Finance Parties, on a pro-rata
basis, of any accrued interest which shall have become due but
remain unpaid, but so that any amount payable by virtue of clause
8.5 shall be excluded;
(g) seventhly, in or towards payment to the Finance Parties, on a
pro-rata basis, of any principal payable to the Finance Parties
which shall have become due but remains unpaid;
(h) eighthly, in or towards payment to any such Finance Parties, on a
pro-rata basis, of any amount payable to any Finance Parties by
virtue of clause 8.5 which remains unpaid; and
37
(i) ninthly, in or towards payment of any other sum which shall have
become due but remains unpaid (and, if more than one such sum so
remains unpaid, on a pro-rata basis).
Each reference in clauses 8.9(a) to (e) (inclusive) to a category of
unpaid sums shall include interest thereon payable in accordance with this
Agreement (including, without limitation, default interest under clause
5.2). Accordingly, clause 8.9(f) shall be construed as referring to
interest on principal and accrued interest thereon which remains unpaid to
the extent due.
The order of application set out in clauses 8.9(e) to 8.9(i) shall be
varied by the Agent if the Majority Banks so direct, without any reference
to, or consent or approval from, the Borrower.
8.10 CALCULATIONS
All interest and other payments of an annual nature under this Agreement
or any of the Borrower Security Documents shall accrue from day to day and
be calculated on the basis of actual days elapsed and (in the case of
Sterling) a 365 day year and (in the case of currencies other than
Sterling) a 360 day year (or as is otherwise the relevant interbank market
custom in respect of any such currency). In calculating the actual number
of days elapsed in a period which is one of a series of consecutive
periods with no interval between them or a period on the last day of which
any payment falls to be made in respect of such period, the first day of
such period shall be included but the last day excluded.
8.11 CERTIFICATES CONCLUSIVE
Any certificate of, or determination by, a Finance Party as to any rate of
interest or any other amount payable under, or otherwise to be determined
under, this Agreement or any of the Borrower Security Documents shall, in
the absence of manifest error, be conclusive and binding on the Borrower
and (in the case of a certificate of or determination by the Agent) on the
Banks.
8.12 EFFECT OF EUROPEAN MONETARY UNION
If the United Kingdom participates in Economic and Monetary Union in
accordance with Article 109j of the Treaty on European Union, then:
(a) if, and at any time while, Sterling and the euro are at the same
time recognised by the Bank of England as the lawful currency of the
United Kingdom, any amount expressed to be payable under this
Agreement in Sterling shall be paid in Sterling or in euro as (i)
the Agent may (in the case of any amount payable by the Banks) by
not less than three Banking Days' notice to the Borrower and the
Banks to that effect elect or (ii) the Borrower may (in the case of
any amount payable by the Borrower) by not less than three Banking
Days notice to the Agent to that effect elect;
(b) any amount so elected to be paid in euro shall be converted from
Sterling at the rate stipulated pursuant to Article 109l(4) of the
Treaty and payment of the amount in euro derived from such
conversion shall discharge the obligation of the relevant party to
pay Sterling; and
(c) the Agent, the Borrower and the Banks shall consult to consider what
(if any) changes are required to be made to this Agreement to (i)
take account of the participation of the United Kingdom in monetary
union and/or (ii) reflect any consequential changes in market
practice (including, without limitation, the settlement of or
rounding of
38
obligations and the calculation of interest). If, after such
consultation, the Agent (acting on the instructions of the Majority
Banks) reasonably and in good faith considers that any such
amendments are required, the Agent shall notify the Borrower and the
Banks of the amendments which it considers to be necessary and,
notwithstanding clause 16.11, shall be entitled to make such
amendments as to put the parties in the same position as if
participation had not occurred.
Any amendment so made to this Agreement by the Agent shall be promptly
notified to the Banks, the Arrangers and the Borrower by the Agent and
shall be binding on all the parties to this Agreement.
9. REPRESENTATIONS AND WARRANTIES
9.1 REPEATING REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants (subject to the qualifications and
reservations set out in the Legal Opinions (other than those relating to
factual matters) and matters fairly and specifically disclosed by the
Reports (as defined in the Senior Facilities Agreement)) to each Finance
Party in respect of itself, Premier Holdings, and each other member of the
Group that:
(a) Due incorporation: it, the other members of the Group from time to
time and Premier Holdings are duly incorporated and validly existing
under the laws of the respective jurisdictions of their
incorporation and have power to carry on their respective businesses
as they are now being conducted and to own their respective property
and other assets;
(b) Corporate power: it, the other members of the Charging Group and
Premier Holdings have power to execute, deliver and perform their
respective obligations under each of the Finance Documents to which
they are parties and (in the case of the Borrower) to borrow the
Commitments; all necessary corporate, shareholder and other action
has been taken to authorise the execution, delivery and performance
of the same and no limitation on the powers of the Borrower to
borrow will be exceeded as a result of any transaction under any of
the Credit Documents and no limitation on any of their respective
powers to give guarantees and/or to create security will be exceeded
as a result of the execution and delivery of any of the Security
Documents;
(c) Binding obligations: (i) each of the Finance Documents when executed
and delivered by it and/or any other member of the Charging Group
and/or Premier Holdings, as the case may be, will constitute, valid,
legally binding and enforceable obligations of it and all other
members of the Charging Group and Premier Holdings in accordance
with their respective terms and, in the case of the Security
Documents, create the security interests purported to be created
thereby and (ii) it is not necessary, to ensure the legality,
validity, enforceability or admissibility in evidence of any of the
Finance Documents that they or any other instrument be notarised,
filed, recorded, registered or enrolled in any court, public office
or elsewhere in the jurisdiction(s) of incorporation of the
member(s) of the Group party thereto or, as the case may be, Premier
Holdings or that any stamp, registration or similar tax or charge be
paid in such jurisdictions on or in relation to the Finance
Documents and the Finance Documents are in proper form for their
enforcement in the courts of such jurisdictions;
(d) No conflict with other obligations: the execution and delivery of,
the performance of its obligations under, and compliance with the
provisions of, the Finance Documents
39
by it and all other members of the Charging Group and Premier
Holdings will not (i) contravene any existing applicable law,
statute, rule or regulation or any judgment, decree or permit to
which any of them are subject, (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 any of them are a party or
are subject or by which any of their property is bound to the extent
that such conflict or breach would have, or would be reasonably
likely to have, a Material Adverse Effect, (iii) contravene or
conflict with any provision of their respective Memorandum or
Articles of Association or, as the case may be, other relevant
incorporation documents or by-laws or (iv) result, other than
pursuant to the provisions of any of the Finance Documents, in the
creation or imposition of, or oblige any member of the Group or
Premier Holdings to create, any Encumbrance (save for a Permitted
Encumbrance) on any member of the Group's assets, rights or
revenues;
(e) Choice of law: the choice by the Borrower and the Charging Group
members and Premier Holdings (as appropriate) of English law or, as
the case may be, any other law as expressly set out in the relevant
Finance Document to govern each of the Finance Documents which are
expressed to be governed by English law or such other law, as the
case may be, and the submissions to jurisdictions by the Borrower
and the Charging Group members and Premier Holdings contained in the
Finance Documents are valid and binding in all material respects;
(f) Audited financial statements: the then latest audited financial
statements delivered to the Agent under clause 10.1(b)(i) have been
prepared in accordance with the Appropriate Accounting Principles
which have been consistently applied and present fairly and
accurately the financial position of the Borrower, the consolidated
financial position of the Group, Premier Holdings and Newco 1
respectively as at the date to which such financial statements were
made up and the results of the operations of the Borrower, the
Group, Premier Holdings and Newco 1 respectively for the financial
year ended on such date and, as at such date, neither the Borrower
nor any of the other members of the Group nor Premier Holdings nor
Newco 1 had any significant liabilities (contingent or otherwise) or
any unrealised or anticipated losses which are not disclosed by, or
reserved against in, such financial statements (or the notes
thereto) to the extent required by the Appropriate Accounting
Principles; and
(g) Material adverse change: since 31 December, 2001 there has been no
development or event which has had or could reasonably be expected
to have a Material Adverse Effect.
9.2 NON-REPEATING REPRESENTATIONS AND WARRANTIES
The Borrower further represents and warrants to each of the Finance
Parties (subject to the qualifications and reservations set out in the
Legal Opinions (other than those relating to factual matters) and the
matters fairly and specifically disclosed by the Reports (as defined in
the Senior Facilities Agreement)) that:
(a) Historic financial statements: (i) the audited consolidated
financial statements of the Group for the financial year ended 31
December, 2002 have been prepared in accordance with generally
accepted accounting principles and practices in the United Kingdom
which have been consistently applied and present fairly and
accurately the consolidated financial position of the Group as at
the date down to and as of which such statements were prepared and
the consolidated results of the operations of the Group for the
period to which such statements relate; and (ii) as at 31 December,
40
2002, the Group did not have any significant liabilities (contingent
or otherwise) or any significant unrealised anticipated losses which
are not disclosed by, or reserved against in, such financial
statements (or the notes thereto);
(b) Information Package: all factual information concerning Xxxxx Muse,
the Acquisition Parties, Premier Holdings, each member of the Group
and their Affiliates and the transactions contemplated by this
Agreement (other than information of a general economic nature) that
has been or will be made available to any of the Finance Parties by
any Acquisition Party or any of their authorised representatives in
relation to this Agreement when taken as a whole is or will be, when
furnished, complete and correct in all material respects and does
not or will not, when furnished, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements contained therein not materially misleading in
light of the circumstances under which such statements were or are
made;
(c) Group and Acquisition Parties: (i) the details of the Group set out
in Schedules ERROR! REFERENCE SOURCE NOT FOUND. and 7 are accurate
in all material respects and no member of the Group has any
ownership interest in any person other than as set out therein, (ii)
Premier Holdings has no ownership interest in any person other than
as set out in such Schedules, (iii) Newco 1 has no ownership
interest in any person other than the Borrower and (iv) UK Topco has
no ownership interest in any person other than Premier Holdings, its
wholly-owned direct Subsidiary;
(d) Consents etc. relating to the Finance Documents: every consent,
authorisation, licence or approval or filing, notarisation or
registration required to ensure compliance by the Borrower with
clause 10.2(b) has been obtained or made and will be in full force
and effect and there will have been no default in the observance of
the conditions or restrictions (if any) imposed in, or in connection
with, any of the same;
(e) Compliance with consents etc relating to the business of the Group:
(i) the business of the Group has been conducted in all material
respects in accordance with all applicable laws and regulations in
each of the jurisdictions in which it is carried on and there is no
decree or judgment of any Government Entity of any of such
jurisdictions outstanding against any member of the Group except to
the extent that any non compliance or decree or judgment would not
be reasonably likely to have a Material Adverse Effect and (ii)
every material consent, authorisation, licence or approval required
by the Group to ensure compliance by the Borrower with clause
10.2(c) in respect of the business carried on by the Group at the
date of this Agreement has been obtained or made and is in full
force and effect and there has been no default in the observance of
the conditions or restrictions (if any) imposed in, or in connection
with, any of the same except to the extent any failure to obtain or
make or maintain in full force and effect or default would not be
reasonably likely to have a Material Adverse Effect;
(f) No share options etc: there are no agreements in force or corporate
resolutions passed which call for the present or future issue or
allotment of, or grant to any person the right (whether conditional
or otherwise) to call for the issue or allotment of, any share or
loan capital of any member of the Group (including any option or
right of pre-emption or conversion) (other than in favour of another
member of the Group where such other member of the Group may not
transfer or renounce such rights to or in favour of a person who or
which is not a member of the Group);
41
(g) No Taxes: on the basis that all of the Banks are Qualifying Banks,
no Taxes are imposed by withholding or otherwise on any payment to
be made by the Borrower under this Agreement or any of the Borrower
Security Documents or are imposed on or by virtue of the execution
or delivery by the Borrower of this Agreement or any of the Borrower
Security Documents or any document or instrument to be executed or
delivered under this Agreement or any of the Borrower Security
Documents;
(h) Litigation/labour disputes: no litigation, alternative dispute
resolution, arbitration or administration proceeding is taking place
or, to the knowledge of the officers of any Acquisition Party,
threatened against any Acquisition Party or any other member of the
Group and no labour disputes involving any member of the Group are
current or threatened, to the knowledge of the officers of any
Acquisition Party or any other member of the Group in each case to
the extent that the same would be reasonably likely to have a
Material Adverse Effect;
(i) Environmental matters: (i) the Borrower is in compliance with its
undertaking set out in clause 10.2(j) in respect of all members of
the Group, (ii) no member of the Group has received notice of any
Environmental Claim and no member of the Group is not in compliance
with any Environmental Law or any Environmental Approval to the
extent that the same would be reasonably likely to have a Material
Adverse Effect and (iii) there is no Environmental Claim pending or
threatened against any member of the Group which, if adversely
determined, would be reasonably likely to have a Material Adverse
Effect;
(j) No Default: no Default has occurred and is continuing and no member
of the Group is 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
to an extent or in a manner which could reasonably be expected to
have a Material Adverse Effect; and
(k) Intellectual Property Rights:
(i) each member of the Group owns or has licensed to it on arm's
length commercial terms all the Intellectual Property Rights
which are required by it in order for it to carry on its
business as it is being conducted at the date of this
Agreement and to the Acquisition Parties' knowledge none of
the members of the Group have infringed any Intellectual
Property Rights of any third party in any material respect to
the extent that the same would have or would be reasonably
likely to have a Material Adverse Effect;
(ii) each member of the Group has taken all reasonable actions
(including payment of fees) required to maintain in full force
and effect and to preserve its ability to enforce any
registered Intellectual Property Rights owned by or licensed
to it except to the extent any failure to take such action
would not be reasonably likely to have a Material Adverse
Effect. There has been no material infringement or threatened
infringement by any person of any Intellectual Property Rights
owned by or licensed to any member of the Group to the extent
that the same would be reasonably likely to have a Material
Adverse Effect;
(iii) no event or circumstance has occurred which has or could give
rise to the termination of or materially adversely affect the
rights of any member of the Group under or in relation to any
agreement or arrangement relating to any Intellectual Property
Rights to which any of them is a party including
42
(without limit) any licence to any of them to the extent that
the same would be reasonably likely to have a Material Adverse
Effect; and
(iv) to the Acquisition Parties' knowledge no disclosure has been
or will be made of any trade secret used or required in
relation to the business of any member of the Group other than
under enforceable confidentiality undertakings and each member
of the Group will take all necessary steps (including legal
proceedings) to enforce the confidentiality of and prevent any
improper use of the same other than where any failure to do so
would not be reasonably likely to have a Material Adverse
Effect.
9.3 FURTHER REPEATING REPRESENTATIONS AND WARRANTIES
The Borrower further represents and warrants to each of the Finance
Parties, in relation to each Acquisition (subject to the qualifications
and reservations set out in the Legal Opinions (other than those relating
to factual matters) and the matters fairly and specifically disclosed by
the Reports) that:
(a) Information Package: all financial projections, financial models and
business plans which have been or will be prepared by the Borrower
or any of its authorised representatives and have been or will be
made available to any Finance Party or prospective Finance Party
have been or will be prepared in good faith based upon assumptions
which were believed to be reasonable at the time prepared;
(b) Copies of documents to be true and accurate: the copies of the
Transaction Documents and the other relevant incorporation and
constitutional documents or by-laws of it and all other Obligors
delivered to the Agent pursuant to clause 3.1 are true, complete and
accurate in all material respects and have not been amended, varied
or supplemented in any way and, save as otherwise referred to
therein, no other agreements, arrangements or understandings exist
between any member of the Group or any member of the HMTF Group and
all or any of the parties to those agreements and instruments which
would materially affect the transactions or arrangements
contemplated by the Transaction Documents and/or the forecasts,
projections and/or estimates contained or referred to in the
relevant Financial Model and the relevant Accountant's Report;
(c) Group and Acquisition Parties: the details of the Group set out in
the group structure chart to be delivered to the Agent in accordance
with Part 2 of Schedule 3 are accurate in all material respects and
no member of the Group has any ownership interest in any person
other than as set out therein; and
(d) No Borrowed Money or Encumbrances: (i) none of the members of the
Group will have any liabilities in respect of Borrowed Money other
than as permitted under clause 10.6(c) and (ii) no Encumbrances
(other than Permitted Encumbrances) will exist over the assets and
undertaking of any member of the Group.
9.4 REPETITION
The representations and warranties in clauses 9.1, 9.2 and 9.3 shall be
deemed to be repeated on and as of the first Drawdown Date and, in the
case of clauses 9.1 (other than clause 9.1(e)) and (in respect of the then
proposed Acquisition and the Advance proposed to be made to assist in the
funding of that Acquisition) 9.3, each subsequent Drawdown Date and, in
the case of clause 9.1 (other than clause 9.1(e)) only, on each Interest
Payment Date, as if made with reference to the facts and circumstances
existing on each such date.
43
10. UNDERTAKINGS
10.1 INFORMATION UNDERTAKINGS
The Borrower undertakes with each of the Finance Parties that, throughout
the Finance Period:
(a) PREPARATION OF FINANCIAL STATEMENTS:
(i) ANNUAL AUDITED FINANCIAL STATEMENTS: it will prepare (A)
unconsolidated financial statements in respect of itself (and
will procure that Premier Holdings and Newco 1 prepare
unconsolidated financial statements in respect of themselves),
and (B) consolidated financial statements in respect of the
Group in accordance with the Appropriate Accounting Principles
(consistently applied) in respect of each financial year and
cause the same to be reported on by the Auditors; and
(ii) UNAUDITED MANAGEMENT ACCOUNTS: it will prepare management
accounts in respect of itself and unaudited consolidated
management accounts in respect of (x) the Group and (y) each
of the principal operating divisions within the Group (while
operated as separate divisions), in each case in accordance
with the Appropriate Accounting Principles (consistently
applied) in respect of each successive month and each Quarter
in such form as may be specified or agreed by the Agent from
time to time and including, without limitation in respect of
each such month or, as the case may be, Quarter:
(A) a consolidated cashflow statement and profit and loss
account for (I) such period and (II) the financial year
to date and (III) in the case of each Quarter, whatever
periods or rolling twelve month periods are relevant to
the calculations of the Financial Definitions for the
Financial Covenants;
(B) a consolidated balance sheet as at the end of such
period; and
(C) a comparison of all relevant results with the relevant
Annual Budget and a brief commentary from the chief
executive officer, finance director or treasurer on any
significant adverse variations and any material Capital
Expenditure;
(b) DELIVERY OF FINANCIAL STATEMENTS: it will deliver to the Agent, for
distribution to the Banks, sufficient copies for all the Banks of
each of the following documents:
(i) ANNUAL AUDITED FINANCIAL STATEMENTS: at the time of issue
thereof (or promptly thereafter) to the shareholders of the
Borrower (or the shareholders of Premier Holdings or Newco 1)
but in any event not later than 120 days after the end of the
financial year to which they relate, the audited financial
statements referred to in clause 10.1(a)(i) for each financial
year together, in each case, with the report of the Auditors
thereon, the notes thereto, the directors' report thereon and
the certificate referred to in clause 10.1(b)(iv);
(ii) UNAUDITED MANAGEMENT ACCOUNTS: (A) within 30 days after the
end of each month which is not the last month in a Quarter,
and (B) within 45 days after the end of each Quarter
management accounts for the Group in respect of such month
and, as the case may be, such Quarter prepared in accordance
44
with the requirements of clause 10.1(a)(ii) together with the
certificate referred to in clause 10.1(b)(iii);
(iii) DIRECTORS' COMPLIANCE CERTIFICATES: at the time of the
delivery of the annual audited financial statements for each
financial year and at the time of delivery of the unaudited
management accounts for each Quarter as at the end of which
the Financial Covenants are to be tested and in each case as
at the end of such financial year or Quarter a certificate of
the Borrower signed by its finance director, chief executive
officer or treasurer at the time stating:
(A) the respective amounts of the Financial Definitions in
respect of or, as the case may be, as at the end of the
relevant period specified in the Financial Covenants and
the calculations pursuant to clause 10.2(f)(ii);
(B) the application of the respective amounts of the
Financial Definitions to the Financial Covenants and
confirming that, as at the date to which the relevant
financial statements or, as the case may be, management
accounts are made up, the Borrower was in compliance
with the Financial Covenants and clause 10.2(f)(ii) (or,
if not, in each case indicating the extent of the breach
and the steps intended to be taken to remedy the same)
and that, as at the date of the certificate (being a
date not more than seven days prior to the delivery of
the certificate), no Default has occurred and is
continuing (or, if such is not the case, specifying the
same); and
(C) that, to the best of its knowledge and belief, there has
been no material dispute or default (or warranty breach)
under the Transaction Documents or the Senior Facilities
Agreement or, if there is, the nature of the same,
Provided that the Agent may consult with the Auditors in
respect of any certificate delivered under this clause
10.1(b)(iii) and, if reasonable grounds exist for believing
that any such certificate was not correct when delivered with
the result that a breach of the relevant Financial Covenant
arises (and after consultation with the Borrower which shall
include good faith discussions between the Borrower and the
Agent to resolve the Finance Parties' concerns) require them
to give a written opinion to the Agent on such certificate
(the cost of one such requested opinion in any financial year
to be borne by the Borrower);
(iv) ANNUAL AUDITORS' REPORT: at the time of delivery of the annual
audited financial statements a report from the Auditors (in
the form of Schedule 9 or such other form which is acceptable
to the Agent (acting reasonably) and which can be relied upon
by the Agent (for itself and the other Finance Parties))
stating:
(A) the respective Financial Definitions in respect of or,
as the case may be, as at the end of the relevant period
specified in the Financial Covenants and indicating the
manner in which such amounts have been calculated;
(B) the application of the respective amounts of such
Financial Definitions to the Financial Covenants and
confirming that, as at the
45
date at or to which the relevant financial statements
are made up, the Borrower was in compliance with the
Financial Covenants (or, if not, indicating the extent
of any non-compliance); and
(C) which members of the Group are Material Entities and
whether the Borrower is in compliance with clause
10.2(f)(ii) as at the date of such certificate.
Such reports shall (in the absence of manifest error) be
conclusive as to matters contained in them;
(v) ANNUAL BUDGET: (A) as soon as practicable after approval by
the Board of Directors of the Borrower but in any event not
later than 45 days after the beginning of each financial
year, the Annual Budget for such financial year and (B) as
soon as practicable after its approval by the Board of
Directors of the Borrower, any revision to such Annual
Budget;
(vi) REPORTS AND NOTICES TO SHAREHOLDERS AND CREDITORS: at the
time of issue by any Acquisition Party or any member of the
Group thereof, (A) every report, circular, notice or like
document issued to its shareholders which it is required to
issue by applicable law or regulation, (B) every formal
notice issued to its creditors generally or to the holders of
the High Yield Bonds and (z) every notice convening a meeting
of the shareholders or any class of the shareholders of any
Acquisition Party or any member of the Group;
(vii) EQUITY PERMITTED PAYMENTS: notify the Agent of each Equity
Permitted Payment in excess of (pound)250,000 proposed to be
made not later than the fifth Banking Day prior to the date
on which such payment is intended to be made; and
(viii) FURTHER INFORMATION: promptly upon request, such further
information concerning the financial position of any
Acquisition Party or the Group (or any member of it) as the
Agent shall reasonably require;
(c) NOTICE OF DEFAULT: it will promptly upon becoming aware of the same
inform the Agent of (i) any occurrence of which it becomes aware
which could reasonably be expected to have a Material Adverse Effect
and (ii) any Default;
(d) NOTICE OF LITIGATION/LABOUR DISPUTES: it will, upon becoming aware
that the same is threatened and in any case promptly after the
commencement thereof, give to the Agent notice in writing of any
litigation, alternative dispute resolution, arbitration or
administrative proceedings, any labour dispute or any other dispute
affecting any member of the Group or any of their respective assets,
rights or revenues which if adversely determined would be reasonably
likely to have a Material Adverse Effect; and
(e) ENVIRONMENTAL CLAIMS: it will, and will procure that the other
members of the Group will, as promptly as possible upon receipt of
formal written notice of the same, inform the Agent of any
Environmental Claim which has been made or threatened by formal
written notice against any member of the Group or any of the
officers of any member of the Group in their capacity as such or any
requirement by any Environmental Licence or applicable Environmental
Law to make any material investment or expenditure or take or desist
from taking any action in each case where such Environmental Claim
or any such failure to invest or incur expenditure or take
46
or desist from taking any action, or the making of such investment
or expenditure, would be reasonably likely to have a Material
Adverse Effect.
10.2 GENERAL UNDERTAKINGS
The Borrower undertakes with each of the Finance Parties that, throughout
the Finance Period:
(a) USE OF PROCEEDS: it will use the proceeds of Advances exclusively
for the purposes specified in clause 2;
(b) CONSENTS ETC RELATING TO THE FINANCE DOCUMENTS: it will (and will
procure the same in respect of all other members of the Group),
without prejudice to clauses 3.1 and 3.2, obtain or cause to be
obtained, maintain in full force and effect and comply in all
material respects with the conditions and restrictions (if any)
imposed in, or in connection with, every consent, authorisation,
licence or approval of any Government Entity and do, or cause to be
done, all other acts and things which may from time to time be
necessary under applicable law, in each case for the continued due
performance of all its (or the other members of the Group's)
obligations under the Finance Documents except for consents,
approvals, licences or authorisations where the failure to obtain or
comply with the same would not be reasonably likely to have a
Material Adverse Effect;
(c) COMPLIANCE WITH CONSENTS ETC RELATING TO THE BUSINESS OF THE GROUP:
it will comply, and shall procure that all other members of the
Group comply, in all material respects with the terms and conditions
of all laws, regulations, agreements, licences and concessions
material to the carrying on of the business of any member of the
Group as it is being carried on at the date of this Agreement except
to the extent that any non compliance would not be reasonably be
likely to have a Material Adverse Effect;
(d) TAX RETURNS: it will, and will procure that each other member of the
Group will, file or cause to be filed all material tax returns
required to be filed in all jurisdictions in which it is situated or
carries on business or is otherwise subject to Taxation prior to
penalties being incurred and pay all material Taxes shown to be due
and payable on such returns or any assessments made against it prior
to penalties being incurred (other than those being contested in
good faith and where such payment may be lawfully withheld);
(e) PENSION SCHEMES: it will ensure that the levels of contribution to
the pension schemes for the time being operated by the Group are and
continue to be sufficient to comply with all material obligations of
the Group whether under such schemes or generally at law;
(f) GUARANTEES AND SECURITY FROM SUBSIDIARIES: (without prejudice to
clause 10.6(s)) it will procure, unless and to the extent that such
execution and delivery and granting of security would be unavoidably
unlawful or is prohibited by statute or beyond the corporate power
of the company or corporation concerned (and then only if such
corporate power cannot be modified or extended to allow such
execution, delivery and granting of security) or would be reasonably
likely to result in the directors of the company or corporation
concerned incurring actual personal liabilities:
(i) that documentation, in form and substance reasonably
satisfactory to the Agent, supplemental to and/or
incorporating provisions substantially the
47
same as the Group Debenture and/or such other Security
Documents and such ancillary documentation as the Agent may
require (acting reasonably) shall be executed and delivered to
the Agent by any member of the Group which is a Material
Entity and which is not a Charging Subsidiary (in each case
together with legal opinions relating thereto in form and
substance satisfactory to the Agent (acting reasonably)), to
the intent that each member of the Group which is a Material
Entity shall guarantee the obligations of the Borrower under
the Finance Documents and create Encumbrances securing its
obligations under such guarantee equivalent to the
Encumbrances created by the Group Debenture or otherwise to
the extent practicable with respect to any jurisdiction
outside the United Kingdom; and
(ii) that at all times:
(A) the pro forma Consolidated EBITDA of the Charging Group
(for this purpose measured as if references in the
definition of Consolidated EBITDA to the "Group" were
references to the "Charging Group") is at least 95 per
cent. of the Consolidated EBITDA of the Group;
(B) the pro forma consolidated turnover of the Charging
Group is at least 95 per cent. or more of the
consolidated turnover of the Group; and
(C) the pro forma consolidated total assets of the Charging
Group is at least 95 per cent. or more of the
consolidated total assets of the Group,
in each case tested on a rolling 12 months basis as at the end
of each Quarter by reference to the most recent management
accounts for such Quarter delivered in accordance with clause
10.1(b)(ii) and the most recent audited financial statements
delivered in accordance with clause 10.1(b)(i).
Encumbrances will not be required over those assets as to which the Agent
shall determine in its reasonable discretion that the costs (including
with respect to mortgage transfer and other taxes) of obtaining or
administering such an Encumbrance are excessive in relation to the value
of the security to be afforded thereby or to the extent that obtaining
such security is otherwise impracticable. The Borrower will also procure
that the immediate Holding Company of any Material Entity referred to in
clause 10.2(f)(i) executes an Encumbrance over the shares in any Material
Entity referred to in clause 10.2(f)(i) (if such shares are not already
the subject of an Encumbrance created by a Security Document executed by
such Holding Company), which Security Document is governed by the same law
as the law under which such Material Entity is incorporated or formed;
(g) PARI PASSU: subject to the Intercreditor Agreement, it will ensure that
its obligations, and those of each other member of the Group, under each
of the Finance Documents shall, without prejudice to the provisions of
clauses 10.2(b) and 10.6(a), at all times be direct, general and
unconditional obligations and rank at least pari passu with all its other
present and future unsecured and unsubordinated Indebtedness with the
exception of any obligations which are mandatorily preferred by law and
not by contract;
(h) INSURANCE: it will, and will procure that the other members of the Group
will, insure and keep insured all its property and assets of an insurable
nature and which are customarily insured (either generally or by companies
carrying on a similar business)
48
against loss or damage by fire and other risks normally insured against by
persons carrying on the same class of business in a similar location as
that carried on by it with reputable independent insurance companies or
underwriters;
(i) INSPECTION OF BOOKS: it will, and will procure that each other member of
the Group will, permit the Agent to inspect its books and records during
normal business hours upon reasonable notice;
(j) ENVIRONMENTAL: it will, and will procure that each other member of the
Group will, comply with all Environmental Laws and Environmental Licences
to the extent that a failure to so comply could be reasonably expected to
have a Material Adverse Effect;
(k) INTELLECTUAL PROPERTY RIGHTS: it will, and will procure that each other
member of the Group will:
(i) notify the Agent promptly of any infringement or suspected
infringement or any challenge to the validity of any of the present
or future Intellectual Property Rights owned, used or exploited by
to it which may come to its notice and will supply the Agent with
all information in its possession relating thereto if the same is
reasonably likely to have a Material Adverse Effect and take all
necessary steps (including, without limitation, the institution of
legal proceedings) to prevent third parties infringing any
Intellectual Property Rights to the extent that failure to do so
would be reasonably likely to have a Material Adverse Effect;
(ii) take all necessary action to safeguard and maintain its rights,
present and future, in or relating to all Intellectual Property
Rights to the extent that failure to do so would be reasonably
likely to have a Material Adverse Effect (in each case including,
without limitation, paying all applicable renewal fees, licence fees
and other outgoings); and
(iii) not enter into any licence or other agreement or arrangement in
respect of Intellectual Property Rights other than on normal arm's
length commercial terms and will comply with all licences to it of
any Intellectual Property Rights, in each case, to the extent that
failure to do so would be reasonably likely to have a Material
Adverse Effect;
(l) CASH MANAGEMENT OF NON-UK COMPANIES: it will procure that to the extent
that to do so would not cause a breach of law or regulation on the part of
the relevant Group member or any applicable contractual restriction
binding on the relevant Group member at the date of this Agreement and
except to the extent that the directors of such Group member consider that
such Group member would have inadequate resources to meet the forecast
cashflow requirements of such Group member for the following 120 days
(which shall be determined by the board of directors of such Group member,
acting reasonably, having regard to their responsibilities under
applicable law) and except to the extent that it would incur a material
cost (after taking into account any tax considerations) which it would not
otherwise ultimately have incurred, each Group member incorporated outside
the United Kingdom shall deposit its surplus cash balances with a member
of the Charging Group in an account of such member in the United Kingdom,
provided that no such deposit shall be required if the surplus cash
balances which would otherwise have been required to be so deposited are
in aggregate less than(pound)1,000,000 (or its equivalent); and
49
(m) TAX LOSSES AND ALLOWANCES: it will procure that, to the extent
permitted by laws and to the extent practicable, all losses,
allowances, exemptions, set-offs, deductions, credits or other
reliefs relating to any Taxation or to the computation of income,
profits or chargeable gains for the purpose of any Taxation
(RELIEFS) which are, after 10th August, 1999, available to Premier
Holdings (including, without limitation, any advance corporation tax
paid by any such company which has not, at 10th August, 1999, been
set against the liability to corporation tax of any company and any
Reliefs available in respect of interest paid or payable by such
company) are applied (by way of surrender or otherwise) when
reasonably considered appropriate in the interests of the Group by
Premier Holdings in reducing or extinguishing any liability in
respect of the Borrower or any other member of the Group to Taxes or
the amount of its income, profits or chargeable gains which are
subject to Taxation.
10.3 FINANCIAL UNDERTAKINGS
(a) The Borrower undertakes with each of the Finance Parties that, throughout
the Finance Period, it will observe and comply with the Financial
Covenants.
(b) The Financial Definitions in paragraph 2 of Schedule 8 shall be determined
for, and tested as at the end of, each Quarter or, in the case of the
Consolidated Fixed Charge Cover Ratio, each half year by reference to the
management accounts for such Quarter or (as applicable) half year
delivered in accordance with clause 10.1(b)(ii) and the Financial
Covenants in paragraph 1 of Schedule 8 shall be tested as at the end of
each such Quarter or (as applicable) half year, in each case by reference
to such management accounts, provided that if the audited consolidated
financial statements of the Group for any financial year delivered in
accordance with clause 10.1(b)(i) show different determinations for such
Financial Definitions from those shown in the management accounts for the
last month in such financial year such audited consolidated financial
statements shall prevail in respect of such determinations and, where
there was a difference affecting the opening balance sheet position for
the current financial year, each set of management accounts delivered
during such current financial year shall be restated by the Borrower so
that each such set of management accounts is in line with such audited
consolidated financial statements and any Financial Covenant thereby
affected shall be deemed to have been tested by reference to such restated
management accounts.
10.4 CONDITIONS SUBSEQUENT
The Borrower undertakes with the Arranger that, upon the Arranger's
request in connection with the syndication of the Facility, it will (i)
promptly provide all reasonably requested financial and other information
in the possession of the Acquisition Parties with respect to each of the
Acquisition Parties, the Group and their respective Affiliates (save, in
the case of such Affiliates, any entities which are Affiliates (but not
Subsidiaries) of the Borrower solely by reason of being under common
control by Xxxxx Muse), the businesses acquired pursuant to the
Acquisitions (the ACQUIRED TARGET BUSINESSES) and, to the extent relevant
in relation to the Facility, Xxxxx Muse, including information and
projections prepared by the Borrower or its advisers, (ii) make its senior
officers available to Banks and prospective Banks at a reasonable time,
(iii) assist the Arranger in the preparation of any Information Memoranda
or similar documents and other marketing materials to be used in
connection with the syndication of the Facility, (iv) together with the
Arranger, host a meeting and hold discussions with Banks or prospective
Banks, (v) facilitate a site visit if required by the Arranger and (vi)
use reasonable efforts to ensure that the syndication efforts benefit
materially from the existing lending relationships of the Borrower, the
Acquired Target Businesses and Xxxxx Muse.
50
10.5 HEDGE TRANSACTIONS
The Borrower undertakes with each of the Banks that:
(a) it shall enter into (and thereafter maintain for the duration of the
Senior Finance Period) hedging arrangements in relation to the
Senior Facilities and the High Yield Bonds with the Hedge
Counterparties in accordance with the Hedging Strategy Letter; and
(b) it will not, and it will procure that no other member of the Group
will, enter into any Derivatives Transactions which are speculative
or do not relate to the hedging of exposures or liabilities of
members of the Group in the ordinary course of business or in
accordance with the Hedging Strategy Letter.
10.6 NEGATIVE UNDERTAKINGS
The Borrower undertakes with each of the Finance Parties that throughout
the Finance Period, without the prior written consent of the Agent acting
on the instructions of the Majority Banks (or, in the case of clause
10.6(b)(ii), all the Banks):
(a) NEGATIVE PLEDGE: it will not, and will procure that no other member
of the Group will, permit any Encumbrance by it or any other member
of the Group to subsist, arise or be created or extended over all or
any part of their respective present or future undertakings, assets,
rights or revenues, save for any Permitted Encumbrance;
(b) TRANSACTIONS SIMILAR TO SECURITY: (without prejudice to sub-clauses
10.6(c) and (f)) it will not, and will procure that no other member
of the Group will:
(i) sell or otherwise dispose of any of its assets on terms
whereby such asset is or may be leased to, or re-acquired or
acquired by, the Borrower or any other member of the Group
other than as part of a transaction whereby the asset
concerned becomes the subject of a Finance Lease which is
permitted under clause 10.6(c)(viii); or
(ii) sell, factor or dispose of any of its receivables other than
the sale of receivables in connection with a trade
receivables financing transaction which is on arms length
terms in form and substance satisfactory to all of the Banks
(acting reasonably) provided that all of the proceeds of such
sale are immediately applied in prepaying (and cancelling a
corresponding part of the commitments under) the Senior
Facilities or, subject to the Intercreditor Agreement, the
Advances;
(c) NO OTHER BORROWED MONEY: it will not, and will procure that no other
member of the Group will, incur or permit to exist on its behalf any
obligations in respect of Borrowed Money (other than in respect of
any guarantees in respect of Borrowed Money to the extent permitted
by clause 10.6(d) and transactions similar to security permitted by
clause 10.6(b)) to any person except:
(i) the Senior Facilities (including, for the avoidance of doubt,
(x) Borrowed Money to the extent that it is the subject of a
letter of credit issued under the working capital facility
under the Senior Facilities Agreement or a guarantee issued
by an ancillary facilities bank under the Senior Facilities
Agreement and (y) any additional Borrowed Money thereunder
permitted by the Intercreditor Agreement);
51
(ii) Borrowed Money incurred by the Borrower under the
Intercompany Loan Agreement and the Premier Holdings/Borrower
Loan Agreement;
(iii) Borrowed Money owed by: (A) any member of the Charging Group
to another member of the Charging Group, (B) any member of
the Group to a member of the Charging Group provided the
total aggregate amount of all such Borrowed Money (other than
that representing loans permitted under clause 10.6(i)(vii))
at any one time does not exceed (pound)10,000,000 (or its
equivalent in relevant currencies), and (C) any member of the
Group (which is not a member of the Charging Group) to
another member of the Group (which is not a member of the
Charging Group);
(iv) Borrowed Money incurred under any Hedge Transactions not
otherwise restricted hereby; (v) the Facility;
(vi) Borrowed Money of any member of the Charging Group owed to
the seller representing the purchase price of a Permitted
Acquisition provided that (x) the aggregate amount of such
Borrowed Money shall not exceed (pound)5,000,000 and (y) the
amount of any such Borrowed Money outstanding or otherwise is
not subsequently increased;
(vii) obligations in respect of Finance Leases to the extent that
the aggregate amount of the principal element of the
obligations under all such Finance Leases at any time,
calculated in accordance with the Appropriate Accounting
Principles at the relevant time, does not (converting into
its equivalent in Sterling any amount in another currency)
exceed (pound)2,500,000 at any such time;
(viii) Borrowed Money in addition to that permitted by clauses
10.6(c)(i) to (viii) not exceeding (pound)15,000,000 (or its
equivalent in relevant currencies) in aggregate at any time;
and
(ix) the Subordinated Shareholder Loans;
(d) GUARANTEES: it will not, and will procure that no other member of
the Group will (other than to the extent provided in the Security
Documents) incur or permit to exist on its behalf any Indebtedness
under any guarantee in respect of Indebtedness of any person except
for:
(i) guarantees in respect of Indebtedness (not being Borrowed
Money) of a member of the Charging Group permitted under this
Agreement;
(ii) indemnities granted by members of the Group in respect of
performance bonds, bid bonds, guarantees, letters of credit
and other obligations of a like nature incurred in the
ordinary course of business;
(iii) indemnities granted in the Finance Documents, the Transaction
Documents, the Senior Finance Documents, the monitoring and
oversight agreement and the financial advisory agreement
referred to and entered into in accordance with clause
10.6(j) or in the constitutional documents of the members of
the Group; and
52
(iv) indemnities and guarantees made in the ordinary course of
business, or for the purpose of carrying on the same,
provided that such indemnities or guarantees could not
individually or in the aggregate have a Material Adverse
Effect;
(e) OPERATING LEASES: it will not, and will procure that no other member
of the Group will, enter into any obligations in respect of
operating leases relating to assets (other than real property) if as
a result the aggregate liability of all members of the Group with
respect to rentals in any one financial year under such operating
leases (converting into its equivalent in Sterling any amount in
another currency) exceeds by more than (pound)6,000,000 the
aggregate liability of all members of the Group with respect to
rentals in the financial year ending 31st December, 1999 under the
operating leases of the members of the Group as at 31st December,
1998;
(f) DISPOSALS: it will not, and will procure that no other member of the
Group will, sell, transfer, lease, surrender, lend or otherwise
dispose of (each a DISPOSAL) or cease to exercise direct control
over the whole or any part of its present or future assets or
revenues whether by one or a series of transactions related or not
except for:
(i) the disposal of stock-in-trade in the ordinary course of
business;
(ii) the disposal of any tangible asset which is obsolete or worn
out;
(iii) any disposal of any asset (other than receivables) on arm's
length terms for full consideration (of which at least 75 per
cent. is cash) where the market or book value is less than
(pound)15,000,000 (or its equivalent) in respect of the
aggregate of all such disposals in any financial year of the
Borrower provided that the Net Proceeds of such disposal are
applied in accordance with clause 6.6;
(iv) loans and credit permitted pursuant to clause 10.6(i);
(v) the application of cash not otherwise prohibited under the
Finance Documents;
(vi) the disposal of any asset by:
(A) a member of the Group to a member of the Charging Group
but so that where any such asset is subject or is
expressed to be subject to an Encumbrance pursuant to
any Security Document such disposal shall only be
permitted where the Security Agent is satisfied either
that (I) such Encumbrance is not prejudiced as a result
of such disposal and the acquisition of such asset by
the other Charging Group member or (II) the asset
concerned becomes subject to a fully enforceable,
legally binding Encumbrance in favour of the Security
Agent and the other Finance Parties substantially
equivalent to or better than such other Encumbrance; or
(B) any member of the Group which is not a member of the
Charging Group to another member of the Group which is
also not a member of the Charging Group; or
(C) a member of the Charging Group to a member of the Group
which is not a member of the Charging Group provided
that the aggregate
53
market or book value of all such disposals does not
exceed (pound)5,000,000 (or its equivalent in the
relevant currency) and all such disposals are in
accordance with clause 10.6(j);
(vii) licences, leases or subleases of Intellectual Property Rights
(other than the Intellectual Property Rights subject to, or
arising under or in connection with, any or all of the UKIPR
Agreement, the Irish IPR Agreement, the Rowntrees Licence and
the Chef Licence) and leases or subleases of real property in
each case in the ordinary course of business and which do not
materially interfere with the business of the Group;
(viii) the sale and discount of overdue accounts receivable during
the ordinary course of business, but only in connection with
the compromise or collection thereof;
(ix) disposals pursuant to and in accordance with the Demerger
Agreements; (x) disposals permitted under clauses 10.6(b) and
(n);
(xi) disposals of a fixed asset in exchange for a replacement
fixed asset of the same or similar type and of a comparable
or superior value and quality or a fixed asset the commercial
purpose and effect of which is to replace or improve upon the
commercial purpose of the fixed asset disposed of; and
(xii) mandatory disposals (as defined in clause 6.6(c)(ii)) on
arm's length terms for full consideration (of which at least
75 per cent. is cash) provided that the Net Proceeds thereof
are applied in accordance with clause 6.6,
and so that where the asset or assets the subject of a disposal
permitted by this clause 10.6(f) (other than clause 10.6(f)(vi)(A))
is or are subject to a fixed charge created by the Security
Documents or any of them, the consents of the Finance Parties to the
release of such fixed charge (but without prejudice or
responsibility to or in respect of any other requisite consent)
shall not be refused provided that no Default shall have occurred
and be continuing (and the Agent is irrevocably authorised by the
other Finance Parties to instruct the Security Agent to grant such
consent without reference to them);
(g) EQUITY YIELD AND INTERCOMPANY LOAN PAYMENTS: the Borrower will not:
(i) declare or pay (including, without limitation, by way of
set-off, combination of accounts or otherwise) any dividend
or make any other distribution or payment (whether in cash or
in specie), including any interest and/or unpaid dividends,
in respect of its equity or any other share capital for the
time being in issue (other than an Equity Permitted Payment
made in accordance with the Subordination Deeds); or
(ii) make any payment (including, without limitation, by way of
set-off, combination of accounts or otherwise) of interest,
or make any other payment, in respect of any amounts
outstanding under the Intercompany Loan Agreement (other than
an Intercompany Loan Permitted Payment made in accordance
with the Intercompany Loan Subordination Deed), the Premier
Holdings/Borrower Loan Agreement (other than an Equity
Permitted Payment made in accordance with the Premier
Holdings/Borrower Subordination Deed) or the Subordinated
Shareholder Loans;
54
(h) REDUCTION OF CAPITAL: it will not redeem or purchase or otherwise
reduce its equity or any other share capital or any uncalled or
unpaid liability in respect thereof or reduce the amount (if any)
for the time being standing to the credit of its share premium
account or capital redemption or other undistributable reserve in
any manner, in each case, in whole or in part in any circumstances
save where the redemption, purchase or reduction is an Equity
Permitted Payment;
(i) LOANS AND CREDIT: it will not, and will procure that no other member
of the Group will, make any loans or grant any credit other than:
(i) loans or credit permitted by clause 10.7(d)(iii);
(ii) loans or credit in existence on the Scheme Effective Date and
extensions, renewals, modifications or restatements or
replacements thereof, provided that no such extension,
renewal, modification or restatement shall (x) increase the
amount of the original loan or credit or (y) materially
adversely affect the interests of the Finance Parties with
respect to such original loan, or credit or the interests of
the Finance Parties under this Agreement or any other Finance
Document in any material respect;
(iii) promissory notes and other similar non-cash consideration
received by any member of the Group in connection with
disposals permitted under clause 10.6(f);
(iv) loans or credit to directors, officers and employees of the
Group up to a maximum amount at any time of(pound)3,000,000
(or its equivalent) in aggregate;
(v) the granting of credit to trade debtors in the ordinary
course of the relevant member of the Group's business as
carried on by it at the date of this Agreement or (if later)
the date it becomes a member of the Group;
(vi) in respect of cash deposits placed by any member of the Group
in accounts (other than those maintained in accordance with
clause 10.6(w)) with Approved Banks;
(vii) subject to an aggregate limit of (pound)10,000,000 at any
relevant time on loans and credit to, and acquisitions of or
by, companies which are not members of the Charging Group,
loans or credit to members of the Group or companies, the
acquisition of which would be a Permitted Acquisition, where
such loans or credit are funded by:
(A) Consolidated Excess Cash Flow in respect of the
previous financial year not required to be applied in
prepayment of the Senior Facilities or the Facility
pursuant to clause 6.7 and made after the prepayment
required under such clause has been duly made;
(B) the amount of Net Proceeds of disposals not required to
be applied in prepayment of the Senior Facilities or
the Facility pursuant to clause 6.6 and made after the
prepayment required under such clause has been duly
made; or
(C) the proportion of aggregate net proceeds of any
Flotation not required to be applied in prepayment of
the Senior Facilities or the Facility
55
pursuant to clause 6.4 and made after the prepayment
required under such clause has been duly made;
(viii) investments in Cash Equivalents; and
(ix) in addition to the foregoing, loans or credits in the
ordinary course of business on arms' length terms by members
of the Group in an aggregate amount (at cost, without regard
to any write down or write up thereof) at any one time
outstanding not exceeding (pound)1,000,000 (or its
equivalent);
(j) INTRA-GROUP CONTRACTS AND ARRANGEMENTS: it will not, and will
procure that no other member of the Group will, enter into any
arrangement or contract with any of its Subsidiaries or Affiliates
which is not a Charging Subsidiary or any member of the HMTF Group
unless such arrangement or contract is entered into on an arm's
length basis and is fair and equitable to it or, as the case may be,
such other member of the Group and would be entered into by a
prudent person in the position of the Borrower or the relevant
member of the Group. For the avoidance of doubt:
(i) payment may be made of reasonable and customary fees for work
done by directors of any member of the Group, Premier
Holdings or Newco 1 and their expenses may be reimbursed;
(ii) payment may be made to Xxxxx Muse and its Affiliates of fees
and expenses not exceeding the amounts set out in Schedule 10
pursuant to a monitoring and oversight agreement and a
financial advisory agreement, in each case approved by the
board of directors of the Borrower;
(iii) employment arrangements in respect of the procurement of the
services of directors, officers and employees in the ordinary
course of business may be entered into and reasonable fees in
connection therewith paid; and
(iv) the services to be provided by Premier Holdings pursuant to
the Demerger Agreements may only be provided on a non-profit
making basis;
(k) AMENDMENT TO DOCUMENTS: it will not, and will procure that no other
member of the Group nor any Acquisition Party will, terminate, amend
or vary, or acquiesce in any termination, amendment or variation of,
any of the Transaction Documents (other than the Acquisition
Agreements) (other than amendments of typographical errors or
inconsistencies or which do not affect the timing or quantum of
payments due in respect thereof or thereunder and provided that no
such amendments are in the Agent's opinion (acting reasonably)
material to the Finance Parties) and will comply with their material
terms and will in the event that any other party thereto breaches
the same in any material respect forthwith inform the Agent of the
nature and substance thereof. The Borrower undertakes that it will
also procure that the loan notes constituted by the Loan Note
Instrument remain outstanding throughout the Finance Period;
(l) SHAREHOLDERS' MEETINGS AND THE NEW ARTICLES: (in the case of the
Borrower only) it will not convene any meeting with a view to the
alteration of any provision of the New Articles which would
adversely affect any of the rights attaching to the "Golden Share"
referred to in the New Articles or would affect the timing or
quantum of payments due in respect thereof or thereunder or which
would be reasonably likely to have a Material Adverse Effect;
56
(m) NEW SHARE ISSUES: it will not, and will procure that no other member
of the Group will, issue any shares or otherwise acquire any
additional capital in the Borrower otherwise than (i) the issue by
the Borrower of shares which do not carry any right to a return or
to redemption before all amounts (whether actual or contingent)
owing under the Finance Documents have been paid in full and the
Finance Parties have no further obligations thereunder (or to be
converted into shares carrying such rights), (ii) an issue of shares
in connection with a Flotation provided that the resulting
prepayment required by clause 6.6 is duly made and (iii) the issue
of shares by a Charging Subsidiary to its Holding Company (also
being a member of the Charging Group);
(n) AMALGAMATION AND MERGER: it will not, and will procure that no other
member of the Group will, amalgamate or merge with any other company
or person unless (i) such merger is with another member of the Group
and (A) a member of the Charging Group shall be the surviving entity
and the Agent is reasonably satisfied (having taken appropriate
advice from counsel in the relevant jurisdiction) that such merger
will not have a negative impact upon any of the obligations owed by
any Obligor to the Finance Parties or upon any material rights the
Finance Parties may have against any of the Obligors, or (B) such
merger is between members of the Group which are not members of the
Charging Group, or (ii) any member of the Group liquidates or
dissolves in either case on a solvent basis and in connection
therewith all of its assets are transferred to any member of the
Charging Group or, if such member is not a member of the Charging
Group, to another member of the Group;
(o) ACCOUNTING REFERENCE DATE: it will not change its accounting
reference date (or permit any other member of the Group to do so)
from 31st December;
(p) ACCOUNTING POLICY: it will not adopt any accounting policy or change
the consistency of application of its accounting principles from the
Appropriate Accounting Principles unless (i) the revised policy and
practice adopted from time to time is in accordance with generally
accepted accounting practice in the United Kingdom and (ii) prior to
any revised policy and practice being adopted the Borrower notifies
the Agent thereof and, if required by the Agent, negotiates in good
faith with the Agent acting reasonably in order that the Financial
Covenants may be amended as required by the Agent acting reasonably
in order for it to be able to make the same judgments as to the
financial performance of the Group against the Financial Covenants
as it is able to under the present accounting policy provided that
if such negotiations are not concluded to the satisfaction of the
Agent acting reasonably within a period of 30 days from the
commencement of such negotiations the Borrower agrees that it will
either provide financial statements on the same basis as before or
provide financial statements containing a statement reconciling the
previous and the then current accounting policy in order that the
Agent may determine the financial condition of the Group against the
Financial Covenants having regard to the terms of this Agreement;
(q) AUDITORS: it will not change its Auditors save to another Big 4 firm
of chartered accountants which is willing to provide the reports
referred to in clause 10.1(b)(iv) on the same or substantially the
same basis and format as the existing Auditors;
(r) CHANGE IN BUSINESS: it will not, and will procure that no other
member of the Group will, make any material change to the general
nature of its business or cease (or threaten to cease) any material
part of its business, which in either case would
57
constitute a material change in the nature of the business of the
Group taken as a whole from that carried on at the date of this
Agreement;
(s) ACQUISITIONS AND JOINT-VENTURES: save as provided in clause 10.6(t),
it will not, and will procure that no other member of the Group
will, acquire or make any investment in any companies, joint
ventures or partnerships, acquire any tangible or intangible assets
(or interests therein) other than in the ordinary course of
business, or acquire any businesses (or interests therein) other
than the Purchasers and the acquisition of businesses (including
companies) which are related or complementary to the existing
businesses of the Group provided that:
(i) the acquisition consideration (including, without limitation,
any deferred consideration (whenever payable), the assumption
of obligations in respect of Borrowed Money by the Group and
taking the value of any non-cash consideration payable by the
Group at the higher of its stated value under the
agreement(s) for the acquisition in question and the market
value of such consideration) payable by the Group
(ACQUISITION CONSIDERATION) in respect of all such
acquisitions in any financial year shall not exceed
(pound)45,000,000 (or its equivalent in relevant currencies)
(excluding any amount funded with the Shareholder Injections
referred to in (ii) below or by the proceeds of Advances);
(ii) such acquisitions are funded:
(A) by Consolidated Excess Cash Flow in respect of the
previous financial year not required to be applied in
prepayment of the Senior Facilities or the Facility
pursuant to clause 6.7; or
(B) by the Net Proceeds of disposals not required to be
applied in prepayment of the Senior Facilities or the
Facility pursuant to clause 6.6; or
(C) by Shareholder Injections in the Borrower funded by
Xxxxx Muse or funds or limited partnerships managed by
it or (without prejudice to clause 6.4(a)(i)) other
indirect co-investors in Premier; or
(D) by drawings under the Working Capital Facility (as
defined in the Senior Facilities Agreement) (to the
extent permitted under clause 10.6(s)(B)(4) of the
Senior Facilities Agreement); or
(E) by the proceeds of Advances;
(iii) at least five Banking Days prior to entering into any such
acquisition, the Agent shall have received a revised version
of the Financial Model, reflecting the proposed acquisition
therein which shows that none of the Financial Covenants will
be breached during the Finance Period and that no Event of
Default will arise under clause 11.1(a), accompanied by a
certificate signed by the chief executive and one other
director of the Borrower confirming that they believe that
the assumptions upon which the forecasts and projections in
such revised Financial Model are based taken as a whole, and
those forecasts and projections, are fair and reasonable and
confirming that, in making those assumptions and forming
those forecasts and projections the Borrower has taken full
and proper account of all contingent liabilities (including,
without limitation, contingent environmental liabilities)
relating to the assets to be
58
acquired pursuant to the proposed acquisition provided that
if the Acquisition Consideration in respect of an acquisition
is(pound)10,000,000 (or its equivalent in any relevant
currency) or less, then a revised version of the Financial
Model need not be so provided if the chief executive and one
other director of the Borrower can, and do so, certify that
in making such acquisition the Group will not incur any
contingent liabilities which would be likely to have a
material adverse impact on the forecasts and projections
contained in the then applicable Financial Model;
(iv) no Default will arise as a result of such acquisition; and
(v) the aggregate Acquisition Consideration of all such
acquisitions of, or by, companies which are not members of
the Charging Group does not exceed (pound)10,000,000 (or its
equivalent) when aggregated with all loans or credit made or
extended to companies which are not members of the Charging
Group pursuant to clause 10.6(i)(vii) at any relevant time,
such acquisitions being PERMITTED ACQUISITIONS;
(t) BORROWER'S BUSINESS: the Borrower will not carry on any business or
own any material assets other than its shareholdings in its
Subsidiaries, intra-group credit balances and credit balances in
bank accounts;
(u) INTRA-GROUP ACCOUNTS: (without limiting the generality of clause
10.6(f)) it will not subordinate, postpone, defer, assign or
otherwise dispose of or deal with any Indebtedness owing to it by
any other member of the Group and will procure that no other member
of the Charging Group will subordinate, postpone, defer, assign or
otherwise dispose of or deal with any Indebtedness owing to it by
any other member of the Group (other than in favour of another
member of the Charging Group);
(v) DORMANT COMPANIES: it will procure that:
(i) none of the members of the Group which are dormant (within
the meaning of section 250 of the Act) at the date of this
Agreement or hereafter become dormant shall:
(A) carry on any trading activity if it has any material
contingent liabilities; or
(B) demand or accept payment of any Indebtedness owing to
it by a Borrower or a Charging Subsidiary; and
(ii) no Borrower or Charging Subsidiary shall repay any
Indebtedness owing to any dormant company as referred to in
(i) above; and
(w) CASH BALANCES: it will procure that the aggregate amount of cash
balances or deposits of cash held by all members of the Group which
are not placed with Approved Banks at no time exceeds
(pound)1,000,000 (or its equivalent).
10.7 CONDUCT OF THE ACQUISITIONS
The Borrower undertakes with each of the Finance Parties that throughout
the Finance Period:
59
(a) it will not (and will procure that no member of the Group will)
terminate, amend or vary, or acquiesce in any termination, amendment
or variation of, any of the Acquisition Agreements which might
reasonably be expected materially and adversely to affect the
interests of the Finance Parties under the Finance Documents;
(b) it will not (and will procure that no member of the Group will)
waive or fail to invoke any conditions to the completion of any of
the Acquisitions, and will not (and will procure that no member of
the Group will) accept, to the extent they are entitled to refuse,
any disclosures by the relevant Vendors in relation to the
warranties contained in the relevant Acquisition Agreements where
any such waiver, failure to invoke or acceptance might reasonably be
expected materially and adversely to affect the interests of the
Finance Parties under the Finance Documents;
(c) it will keep the Agent updated as to the progress of the
Acquisitions;
(d) unless considered by its directors (acting reasonably and having
first consulted with the Agent in respect of any material matter)
not to be commercially prudent, or otherwise not to be in the
interests of any member of the Group (including, without limitation,
taking account of the quantum of the claim), it will (and will
procure that the members of the Group will) pursue (if necessary by
legal action) against the Vendors or, as the case may be, any issuer
of a Report any material claim to which it may be entitled as a
result of:
(i) a breach of any Acquisition Agreement by the relevant Vendor;
(ii) any inaccuracy in any of the warranties and representations
included in any Acquisition Agreement;
(iii) any indemnity contained in any Acquisition Agreement;
(iv) a right to make a claim under any of the Reports; or
(v) any other claims for damages or other remedies in respect of
any breach of any Acquisition Agreement or inaccuracy therein
and any other claim in respect of the warranties, indemnities
and representations given to the Borrower, any Purchaser or
any member of the Group party to any relevant document
contained in or pursuant to such documents; and
(e) it will not (and will procure that the members of the Group will
not) finally agree or settle the amount of any indemnity or warranty
payment or other claim or potential claim under, or in connection
with, the Acquisition Agreements against any of the Vendors or, as
the case may be, any issuer of a Report (to the extent it has
discretion to do so), without the consent of the Agent if the
relevant claim relates to actual or potential recoveries reasonably
expected to exceed (pound)10,000,000 (or its equivalent) in
aggregate.
11. EVENTS OF DEFAULT
11.1 EVENTS OF DEFAULT
Each of the events set out below is an Event of Default (whether or not
caused by any reason whatsoever outside the control of any Material Entity
(or any other person)) namely if:
60
(a) NON-PAYMENT: any Material Entity or any other member of the Group
fails to pay any sum due from it under any of the Finance Documents
in the currency, at the time (or within five days thereafter in the
case of amounts other than principal) and in the manner stipulated
in the relevant Finance Document; or
(b) BREACH OF CERTAIN OBLIGATIONS: any Material Entity or any other
member of the Group commits any breach of or omits to observe any of
the obligations or undertakings expressed to be assumed by it under
clauses 10.3, 10.6(a), 10.6(b), 10.6(f), 10.6(g), 10.6(h), 10.6(w),
or 10.7(a), 10.7(b); or
(c) BREACH OF OTHER OBLIGATIONS: any Material Entity or any other member
of the Group commits any breach of or omits to observe any of the
obligations or undertakings expressed to be assumed by it under any
of the Finance Documents (other than any such obligations referred
to in clause 11.1(a) and (b)) and, in respect of any such breach or
omission which is capable of remedy, such breach or omission has not
been remedied within 30 days; or
(d) MISREPRESENTATION: any representation, warranty or statement made or
deemed to be made or repeated by or on behalf of any Material Entity
or any other member of the Group in, or in connection with, any of
the Finance Documents or in any notice, accounts, certificate or
statement referred to in or delivered under any of the Finance
Documents is or proves to have been incorrect or misleading in any
material respect on the date made or deemed to be made; or
(e) CROSS-DEFAULT: (i) any Borrowed Money of any Material Entity or any
other member of the Group at any time becomes prematurely due and
payable by reason of a default or any creditor of any Material
Entity or any other member of the Group becomes entitled to declare
any such Borrowed Money due and payable prior to the date when it
would otherwise have become due by reason of a default or any
guarantee given by any Material Entity or any other member of the
Group in respect of Borrowed Money is not honoured when due and
called upon (taking into account any applicable grace period); or
(ii) any Borrowed Money of any Material Entity or any other member
of the Group is not paid as and when the same is or becomes due and
payable (or within any applicable grace period) and the aggregate
amount at any time of all Borrowed Money in respect of which (i)
and/or (ii) applies (without double counting) is equal to or greater
than(pound)5,000,000 (converting into Sterling at its equivalent
amounts in any other currency); or (iii) any amount in respect of
the High Yield Bonds is not paid when due and payable (or within any
originally applicable grace period) or becomes (whether by
declaration or automatically in accordance with the relevant
agreement or instrument constituting the same) due and payable as a
result of a default or any creditor or the trustee on their behalf
becomes entitled to declare any amount in respect of the High Yield
Bonds due and payable prior to the date when it would otherwise have
become due by reason of a default; or (iv) an Event of Default (as
defined in the Senior Facilities Agreement) occurs; or
(f) DERIVATIVES TRANSACTION DEFAULT: any Material Entity or any other
member of the Group fails to make payment in relation to a
Derivatives Transaction of any sum equal to or greater
than(pound)5,000,000 in aggregate at any one time (or its equivalent
in the relevant currency of payment) on its due date (taking into
account any grace period permitted under the documentation for that
Derivatives Transaction) or the counterparty to a Derivatives
Transaction becomes entitled to terminate that Derivatives
Transaction early by reason of default on the part of any Material
Entity or any other member of the Group and the Net Derivatives
Liability in the aggregate
61
payable under all affected Derivatives Transactions at the relevant
time is not less than(pound)5,000,000 (or its equivalent in the
relevant currency); or
(g) PROCEEDINGS CONCERNING THE GROUP: one or more judgements or orders
is made against any Material Entity involving in the aggregate a
liability (not paid or fully covered by insurance) of
(pound)5,000,000 or more and all such judgments or orders shall not
have been vacated, discharged or stayed pending appeal within 30
days from the entry thereof; any execution, distress, sequestration
or other similar process is levied or enforced against all or any
substantial part of the assets of any Material Entity which shall
not have been vacated, discharged or stayed pending appeal within 30
days from the entry thereof; or any Material Entity proposes or
makes any general composition or arrangement with its creditors
other than on a solvent basis which has been approved by the
Majority Banks; or
(h) INSOLVENCY: any Material Entity generally shall not, or shall be
unable to, or shall admit in writing its inability to, pay its debts
(other than intercompany debts) as they become due; or
(i) ADMINISTRATION: (i) any meeting of any Material Entity is convened
for the purpose of considering any resolution to present an
application for an administration order or to serve a notice of
intention to appoint an administrator or to appoint an administrator
or (ii) any person presents an application for an administration
order, or files documents with a court for the appointment of an
administrator, in relation to any Material Entity or an
administration order is sought of the court on the basis of an
undertaking to subsequently present an application or (iii) any
Material Entity passes a resolution to present an application for an
administration order or to serve a notice of intention to appoint an
administrator or to appoint an administrator in relation to any
Material Entity or (iv) an administration order is made or an
administrator is appointed in relation to any Material Entity; or
(j) APPOINTMENT OF RECEIVERS AND MANAGERS: (i) any administrative or
other receiver or any manager is appointed of any Material Entity or
all or any substantial part of any of its assets and/or undertakings
or (ii) the directors of any Material Entity request any person to
appoint such a receiver or manager or (iii) any other legal or
formal steps are taken to enforce any Encumbrance over all or any
substantial part of the assets and/or undertakings of any Material
Entity; or
(k) WINDING UP: (i) any meeting of any Material Entity is convened for
the purpose of considering any resolution for (or to petition for)
its winding up or (ii) any Material Entity passes such a resolution;
or (iii) any person presents any petition for the winding up of any
Material Entity, which is not withdrawn, dismissed or discharged
within 60 days or (iv) an order for the winding up of any Material
Entity is made, not (in any case) being a winding-up of a Subsidiary
of the Borrower involving an amalgamation or reorganisation on a
solvent basis to which the Majority Banks have given their prior
written consent; or
(l) ANALOGOUS PROCEEDINGS: there occurs, in relation to any Material
Entity, in any country or territory in which any of them carries on
business or to the jurisdiction of whose courts any part of their
assets is subject, any event which, in the reasonable opinion of the
Majority Banks, appears in that country or territory to correspond
with, or have an effect equivalent to, any of those mentioned in
clauses 11.1(h) to (k) (inclusive); or
62
(m) SEIZURE: all, or a material part, of the undertaking, assets, rights
or revenues of, or shares or other ownership interests in, any
Material Entity are seized, nationalised, expropriated or
compulsorily acquired by or under the authority of any Government
Entity and such Material Entity has not been adequately and promptly
compensated and recompensed in respect of such action; or
(n) CHANGES OF OWNERSHIP: the Borrower at any time disposes of any
Premier Holdings Preference Share acquired by it other than in
accordance with the Structure Paper;
(o) FINANCE DOCUMENTS: any Finance Document is not or ceases to be
legal, valid and binding on, and, subject to the qualifications and
reservations set out in the Legal Opinions (other than those
relating to factual matters), enforceable substantially in
accordance with its terms against, any Material Entity which is
party to that Finance Document and/or (in the case of Security
Documents) does not provide to the Security Agent, for itself and on
behalf of the other Finance Parties, perfected, enforceable security
over the assets purported to be covered by that Security Document in
a manner and to an extent reasonably considered by the Majority
Banks to be materially adverse to their interests under the Finance
Documents, or is alleged by any Material Entity or any member of the
HMTF Group party to that Finance Document to be ineffective for any
reason and any such failure or cessation as to legality, validity
and binding effect is (if capable of remedy) not remedied within 30
days of notice from the Agent; or
(p) UNLAWFULNESS: it becomes unlawful at any time for any Material
Entity to perform all or any of its obligations under any of the
Finance Documents and such unlawfulness is (if capable of remedy)
not remedied within 30 days of notice from the Agent; or
(q) REPUDIATION: any Material Entity repudiates any Finance Document to
which it is a party or does or causes or permits to be done any act
or thing evidencing an intention to repudiate such a Finance
Document; or
(r) QUALIFICATION OF FINANCIAL STATEMENTS: the Auditors qualify their
report(s) on the audited consolidated financial statements of the
Group or the audited financial statements of any Material Entity (i)
on the grounds of inability to prepare financial statements on a
going concern basis or that, while they had been prepared on that
basis, it was not clear that the Group or the company concerned (as
the case may be) would carry on business as a going concern or (ii)
on the grounds of inadequate information or access to information
being provided to the Auditors or (iii) on any other grounds where
the matter giving rise to the qualification would be reasonably
likely to have a Material Adverse Effect; or
(s) ENVIRONMENTAL MATTERS: an Environmental Claim is made against any
Material Entity and as a result a Material Adverse Effect is
reasonably likely to occur; or
(t) PREMIER HOLDINGS, NEWCO 1, THE BORROWER, UK TOPCO, HMTF POULTRY AND
CITADEL INSURANCE COMPANY LIMITED:
(i) (other than pursuant to Shareholder Injections) Premier
Holdings carries on any business other than that of providing
services pursuant to the Demerger Agreements on a non-profit
making basis and acting as a Holding Company of the Group,
owns any material assets other than all the shares in Newco
1, Citadel Insurance Company Limited and HMTF Poultry or
incurs any liabilities other than under the Finance
Documents, the Senior Finance
63
Documents and the Transaction Documents to which it is a
party or those referred to in the definition of "Equity
Permitted Payment" in clause 1.1 or those otherwise permitted
by the Finance Documents; or
(ii) Premier Holdings disposes of any shares (or any interest
therein) in any of its direct Subsidiaries referred to in (i)
above; or
(iii) (other than pursuant to Shareholder Injections) Newco 1
carries on any business other than acting as a Holding
Company of the Group, owns any material assets other than all
of the issued shares in the Borrower or incurs any
liabilities (whether or not in connection with Borrowed
Money) other than as a result of issuing the High Yield
Bonds, effecting the Pushdown or as a result of its existence
and administrative operation in accordance with this
Agreement; or
(iv) Newco 1 ceases to be a wholly-owned direct Subsidiary of
Premier Holdings; or
(v) the Borrower ceases to be a wholly-owned direct Subsidiary of
Newco 1; or
(vi) (other than pursuant to Shareholder Injections) UK Topco
carries on any business other than acting as a Holding
Company of the Group, owns any material assets other than all
of the issued shares in Premier Holdings or incurs any
liabilities (whether or not in connection with Borrowed
Money) other than as a result of entering into the Second
Transaction Documents to which it is a party or as a result
of its existence and administrative operation in accordance
with this Agreement; or
(vii) Premier Holdings ceases to be a wholly-owned direct
Subsidiary of UK Topco; or
(viii) HMTF Poultry carries on any business, owns any assets or
incurs any liabilities in each case to an extent or in a
manner which results (or is reasonably likely to result) in a
material increase in the Taxes payable (directly or
indirectly) by the Group (including, without limitation, the
Taxes payable by Premier Holdings which are attributable to
the business of the Group); or
(ix) Citadel Insurance Company Limited carries on any business
other than writing insurance in favour of members of the
Group, owns any material assets other than as a result of
writing such insurance or incurs any liabilities other than
as a result of writing such insurance or as a result of its
existence and administrative operation in accordance with
this Agreement; or
(u) INVESTMENT COMPANY: Newco 1 or the Borrower is or could be deemed an
INVESTMENT COMPANY under Section 3(a)(1) of the Investment Company
Xxx 0000 of the United States of America, as amended
(notwithstanding the effect of any safe harbor (including without
limitation the safe harbor under Rule 3a-2 under such act),
exception, exemption, order or no-action letter relied upon or
granted in connection therewith); or
(v) NO SUBORDINATION: any amount outstanding under any Subordinated
Shareholder Loan, or any other amount which is expressly agreed by
the relevant member of the Group and the relevant subordinated
creditor to be subordinated to the amounts
64
outstanding under the Finance Documents, is not, ceases to be or is
claimed by the relevant subordinated creditor not to be subordinated
to the amounts outstanding under the Finance Documents.
11.2 ACCELERATION
Subject to the terms of the Intercreditor Agreement, the Agent if so
requested by the Majority Banks shall, without prejudice to any other
rights of the Finance Parties, at any time after the happening of an Event
of Default, and so long as the same is continuing, by notice to the
Borrower declare that:
(a) the obligation of each Bank to make its Commitment available shall
be terminated, whereupon the Total Commitments in respect of the
Facility shall be reduced to zero forthwith; and/or
(b) all Advances and all interest, fees and commitment commission
accrued and all other sums payable under the Finance Documents have
become due and payable or have become due and payable on demand,
whereupon the same shall, immediately or in accordance with the
terms of such notice, become due and payable; and/or
(c) the Security Documents (or any of them) have become enforceable (in
whole or in part).
On or at any time after the making of any such declaration so long as the
event giving rise to such declaration is still continuing the Agent shall
be entitled, to the exclusion of the Borrower, to select the duration of
Interest Periods.
11.3 DEMAND BASIS
If all Advances have become due and payable on demand pursuant to clause
11.2(b), the Agent, if so instructed by the Majority Banks, shall by
written notice to the Borrower call for repayment of the Advances on such
date as may be specified in such notice whereupon the Advances shall
become due and payable on the date so specified together with all
interest, fees and commitment commission accrued and all other sums
payable under the Finance Documents.
12. INDEMNITIES
12.1 MISCELLANEOUS INDEMNITIES
The Borrower shall within three Banking Days of demand indemnify each
Finance Party, without prejudice to any of their other rights under any of
the Finance Documents, against any loss, excluding loss of Margin, or
reasonable expense which such Finance Party shall certify as sustained or
incurred by it as a consequence of (a) any default in payment by the
Borrower or any Acquisition Party or any other member of the Group of any
sum under any of the Finance Documents when due, (b) the occurrence of any
other Event of Default, (c) any prepayment of any Advance or part thereof
being made otherwise than on an Interest Payment Date relative thereto,
(d) any Advance not being made for any reason (excluding any default by a
Finance Party) after a Drawdown Notice has been given, including, in any
such case, but not limited to, any loss or expense sustained or incurred
in (i) maintaining or funding its Contribution or any part thereof, (ii)
liquidating or re-employing deposits from third parties acquired or
contracted for to fund all or any part of its Contributions or (iii)
closing out open hedging positions arising.
65
12.2 CURRENCY OF ACCOUNT; CURRENCY INDEMNITY
No payment by the Borrower under any of the Finance Documents which is
made in a currency other than the currency (CONTRACTUAL CURRENCY) in which
such payment is required to be made pursuant to the relevant Finance
Documents shall discharge the obligation in respect of which it is made
except to the extent of the net proceeds in the Contractual Currency
received by the Agent upon the sale of the currency so received, after
taking into account any premium and costs of exchange in connection with
such sale. For the avoidance of doubt the Finance Parties shall not be
obliged to accept any such payment in a currency other than the
Contractual Currency nor shall the Finance Parties be liable to the
Borrower for any loss or alleged loss arising from fluctuations in
exchange rates between the date on which such payment is so received by
the Agent and the date on which the Agent effects such sale, as to which
the Agent shall (as against the Borrower) have an absolute discretion. If
any sum due from the Borrower under any Finance Document or any order or
judgment given or made in relation thereto is required to be converted
from the Contractual Currency or the currency in which the same is payable
under such order or judgment (the FIRST CURRENCY) into another currency
(the SECOND CURRENCY) for the purpose of (a) making or filing a claim or
proof against the Borrower, (b) obtaining an order or judgment in any
court or other tribunal or (c) enforcing any order or judgment given or
made in relation to any of the Finance Documents, the Borrower shall
indemnify and hold harmless each Finance Party from and against any loss
suffered as a result of any difference between (i) the rate of exchange
used for such purpose to convert the sum in question from the first
currency into the second currency and (ii) the rate or rates of exchange
at which each such Finance Party may in the ordinary course of business
purchase the first currency with the second currency upon receipt of a sum
paid to it in satisfaction, in whole or in part, of any such order,
judgment, claim or proof. Any amount due from the Borrower under the
indemnity contained in this clause 13.2 shall be due as a separate debt
and shall not be affected by judgment being obtained for any other sums
due under or in respect of any of the Finance Documents and the term RATE
OF EXCHANGE includes any premium and costs of exchange payable in
connection with the purchase of the first currency with the second
currency.
12.3 ACQUISITION FINANCE INDEMNITY
The Borrower agrees to indemnify and hold harmless the Finance Parties and
their Affiliates and their respective officers, lawyers, advisers,
directors, employees, agents and Holding Companies, and each of their
successors, assigns and personal representatives, from and against any and
all losses, claims, damages and liabilities (collectively LOSSES) to which
any such person may become subject arising out of or in connection with
this Agreement, the Facility, the Acquisitions or any other transaction
contemplated herein, or any claim, litigation, investigation or proceeding
relating to any of the foregoing, regardless of whether any such person is
a party thereto, and to reimburse such person upon demand for any
reasonable legal or other reasonable expenses incurred in connection with
investigating or defending any of the foregoing, except that the foregoing
will not apply to any Losses arising from the gross negligence or wilful
misconduct of such indemnified person or a material breach of this
Agreement by such indemnified person.
12.4 ENVIRONMENTAL INDEMNITY
The Borrower shall on demand indemnify each Finance Party against any cost
or loss suffered or incurred by such Finance Party due to any
Environmental Contamination in, on, under or escaping from any property
owned, occupied or leased by any Material Entity other than any such cost
or loss caused by or arising from the gross negligence or wilful default
of such Finance Party.
66
13. UNLAWFULNESS, INCREASED COSTS, ALTERNATIVE INTEREST RATES
13.1 UNLAWFULNESS
If after the date of this Agreement it becomes contrary to any law or
regulation for any relevant Bank to contribute to any Advance or to
maintain its Commitment in respect of the Facility or fund its
Contribution to the Facility, such relevant Bank shall promptly, through
the Agent, notify the Borrower whereupon (a) such relevant Bank's
Commitment shall be reduced to the extent of such illegality and (b) the
Borrower shall be obliged to prepay and/or discharge the Contribution of
such relevant Bank to the Facility on a date not being earlier than the
latest date permitted by the relevant law or regulation. Any prepayment
pursuant to this clause 13.1 shall be made together with all amounts
referred to in clause 6.5(c).
13.2 INCREASED COSTS
If the result of any change occurring after the date of this Agreement in,
or in the interpretation or application of, or the introduction of, any
law or any regulation, including (without limitation) those relating to
Taxation, capital adequacy, liquidity, reserve assets, cash ratio deposits
and special deposits, is to:
(a) subject any Bank to Taxes or change the basis of Taxation of any
Bank with respect to any payment under this Agreement (other than
Taxes or Taxation on the overall net income, profits or gains of
such Bank imposed in the jurisdiction in which its principal or
lending office under this Agreement is located); and/or
(b) increase the cost to, or impose an additional cost on, any Bank or
its holding company in making or keeping available all or part of
such Bank's Commitment or maintaining or funding all or part of such
Bank's Contribution; and/or
(c) reduce the amount payable or the effective return to any Bank under
this Agreement; and/or
(d) reduce any Bank's or its holding company's rate of return on its
overall capital by reason of a change in the manner in which it is
required to allocate capital resources to such Bank's obligations
under this Agreement; and/or
(e) require any Bank or its holding company to make a payment or forgo a
return calculated by reference to or on any amount received or
receivable by such Bank under this Agreement; and/or
(f) require any Bank or its holding company to incur or sustain a loss
(including a loss of profits) by reason of being obliged to deduct
all or part of such Bank's Commitment or Contribution from its
capital for regulatory purposes,
then and in each such case (but subject to clause 13.3):
(i) such Bank shall notify the Borrower through the Agent in writing of
such event promptly upon its becoming aware of the same; and
(ii) the Borrower shall within 5 Banking Days of demand, made at any time
whether or not such Bank's Contribution has been repaid, pay to the
Agent for the account of such Bank the amount which such Bank
specifies (in a certificate setting forth the basis of the
computation of such amount, but not including any matters which such
Bank or its holding company regards as confidential) is required to
compensate such
67
Bank and/or its holding company for such liability to Taxes,
increased or additional cost, reduction, payment, forgone return or
loss.
For the purposes of this clause 13.2 each Bank may in good faith allocate
or spread costs and/or losses among its assets and liabilities (or any
class thereof) on such basis as it considers appropriate.
For the purposes of this clause 13.2 and clause 13.5 HOLDING COMPANY
means, in relation to a Bank, the company or entity (if any) within the
consolidated supervision of which such Bank is included.
13.3 EXCEPTIONS
Nothing in clause 13.2 shall entitle any Bank to receive any amount in
respect of compensation for any such liability to Taxes, increased or
additional cost, reduction, payment, forgone return or loss to the extent
that the same:
(a) is taken into account in calculating the Additional Cost; or
(b) is already the subject of an additional payment under clause 8.5; or
(c) arises as a consequence of (or of any law or regulation
implementing) (i) the proposals for international convergence of
capital measurement and capital standards published by the Basle
Committee on Banking Regulations and Supervisory Practices in July
1988 and/or (ii) the Banking Consolidation Directive (2000/12/EC) of
the European Union (in each case) unless it results from any change
in, or in the interpretation or application of, such proposals or
such directive (or any law or regulation implementing the same)
occurring after the date hereof.
If a Bank does not notify the Agent of its intention to claim pursuant to
clause 13.2 within ninety days after the date of which the Bank becomes
aware of the relevant (i) Taxes (ii) increased cost (iii) reduction in the
rate of return on capital or (iv) loss that Bank shall not be entitled to
claim indemnification for such Taxes, reduction in the rate of return on
capital, increased cost or loss in respect of any period of more than
ninety days before the date on which the Bank does notify the Agent of its
intention to make such claim for indemnification, payment or foregone
interest or other return. The obligation of the Borrower to make any
payment under clause 13.2 shall survive termination of this Agreement for
a period of nine months after such termination.
13.4 MARKET DISRUPTION; NON-AVAILABILITY
(a) If and whenever, at any time prior to the commencement of any Interest
Period:
(i) none or only one of the Reference Banks supplies the Agent
with a quotation for the purpose of calculating LIBOR (where
such a quotation is required having regard to the definition
of LIBOR in clause 1.1); or
(ii) the Agent shall have received notification from Banks with
Contributions aggregating not less than one-third of the
relevant Advance or Commitments aggregating not less than
one-third of the Total Commitments in respect of the Facility
that deposits in Sterling are not available to such Banks in
the London Interbank Market in the ordinary course of business
in sufficient amounts to fund their Contributions for such
Interest Period or that LIBOR does not accurately reflect the
cost to such Banks of obtaining such deposits,
68
the Agent shall forthwith give notice (a DETERMINATION NOTICE) to the
Borrower and to each of the Banks containing particulars of the relevant
circumstances giving rise to its issue. After the giving of any
Determination Notice the undrawn amount of the Total Commitments may still
be drawn down (subject to the other terms of this Agreement) but on a
Substitute Basis in accordance with clause 13.4(b).
(b) During the period of 10 days after the Determination Notice has been given
by the Agent under clause 13.4(a) the relevant Banks shall (having
consulted in good faith with the Borrower) certify an alternative basis
(the SUBSTITUTE BASIS) for making available or, as the case may be,
maintaining their Contributions. The Substitute Basis may (without
limitation) include alternative interest periods, alternative currencies
or alternative rates of interest but shall include a margin above the cost
of funds (including Additional Cost) to such relevant Banks equivalent to
the Margin. Each Substitute Basis so certified shall be binding upon the
Borrower and shall take effect in accordance with its terms from the date
specified in the Determination Notice until such time as the Agent
notifies the Borrower that none of the circumstances specified in clause
13.4(a) continues to exist, whereupon the normal interest rate fixing
provisions of this Agreement shall apply.
13.5 MITIGATION
If, in respect of any Bank, circumstances arise which would, or would upon
the giving of notice, result in:
(a) the Borrower being required to make an increased payment to any Bank
pursuant to clause 8.5;
(b) the reduction of any Bank's Commitment in respect of the Facility to
zero or the Borrower being required to prepay any Bank's
Contribution to the Facility pursuant to clause 13.1;
(c) the Borrower being required to make a payment to any Bank to
compensate such Bank or its holding company for a liability to
Taxes, increased or additional cost, reduction, payment, forgone
return or loss pursuant to clause 13.2(f)(ii); or
(d) the Borrower being required to make a payment determined on a
Substitute Basis pursuant to clause 13.4(b),
then, without in any way limiting, reducing or otherwise qualifying the
obligations of the Borrower under clause 8 and this clause 13, such Bank
shall, in consultation with the Agent and the Borrower, endeavour to take
such reasonable steps (and/or, in the case of clause 13.2(f)(ii)) and
where the increased or additional cost, reduction, payment, forgone return
or loss is that of its holding company, endeavour to procure that its
holding company takes such reasonable steps) as are open to it (or, as the
case may be, its holding company) to mitigate or remove such circumstances
(including a change in the location of its lending office or the transfer
of its rights and obligations under any Finance Document to another bank
or institution acceptable to the Borrower (acting reasonably)) unless the
taking of such steps might (in the opinion of such Bank) have any adverse
effect upon its business, operations or financial condition (other than
any minor costs and expenses of an administrative nature (an amount equal
to which the Borrower shall pay to the Agent for the account of such Bank
within five Banking Days of demand)).
69
13.6 REPLACEMENT OF BANKS
If at any time any Bank becomes a Non-Funding Bank or a Non-Consenting
Bank then the Borrower may, on 10 Banking Days' prior written notice to
the Agent and such Bank, replace such Bank by causing such Bank to (and
such Bank shall) transfer all of its rights and obligations under this
Agreement to a Bank or other entity selected by the Borrower and
acceptable to the Agent (acting reasonably) for a purchase price equal to
such Bank's Contribution and all accrued interest, fees and other amounts
payable to it under this Agreement provided that:
(a) the Borrower shall have no right to replace the Agent;
(b) neither the Agent nor any Bank shall have any obligation to the
Borrower to find a replacement Bank or other such entity;
(c) in the event of the replacement of a Non-Consenting Bank, in order
for the Borrower to be entitled to replace such Non-Consenting Bank,
such replacement must take place no later than 180 days after the
date the Non-Consenting Bank notified the Agent and the Borrower of
its failure to agree any requested consent, waiver or amendment;
(d) in no event shall the Bank hereby replaced be required to pay or
surrender to such replacement Bank or other entity any of the fees
received by such Bank hereby replaced pursuant to this Agreement;
and
(e) the Borrower's right to replace a Non-Funding Bank is, and shall be,
in addition to and not in lieu of all other rights and remedies
available to the Borrower against such Non-Funding Bank under this
Agreement, at law, in equity or by statute.
For the purposes of this clause 13.6:
NON-CONSENTING BANK means any Bank which does not agree to a consent to a
departure from, or waiver or amendment of, any provision of the Finance
Documents which has been requested by the Borrower or the Agent where the
requested consent, waiver or amendment (i) is not one which requires the
consent of all Banks pursuant to this Agreement and (ii) has been agreed
to by the Majority Banks; and
NON-FUNDING BANK means any Bank which has (i) failed to make an Advance it
is obliged to make under this Agreement and the Agent has determined that
such Bank is not likely to make such Advance or (ii) given notice to the
Borrower or the Agent that it will not make, or that it has disaffirmed or
repudiated any obligation to make, any Advances.
14. SET-OFF AND PRO-RATA PAYMENTS
14.1 SET-OFF
The Borrower agrees that each Finance Party may at any time after an Event
of Default has occurred and whilst it is continuing, notwithstanding any
settlement of account or other matter whatsoever, combine or consolidate
all or any of its then existing accounts wheresoever situate (including
accounts in the name of the Borrower jointly with others), whether such
accounts are current, deposit, loan or of any other nature whatsoever,
whether they are subject to notice or not and whether they are denominated
in Sterling or in any other currency, and set-off or transfer any sum
standing to the credit of any one or more such accounts in or towards
satisfaction of any moneys, obligations or liabilities covenanted to be
70
paid by the Borrower or for which the Borrower is liable to such Finance
Party under the Finance Documents and which, to the extent not then
payable, shall automatically become payable to the extent necessary to
effect such set-off. For this purpose each Finance Party is authorised to
purchase with the moneys standing to the credit of such account such other
currencies as may be necessary to effect such application. No Finance
Party shall be obliged to exercise any right given to it by this clause
14.1. Each Finance Party shall notify the Agent promptly upon the exercise
or purported exercise of any right of set-off in relation to any member of
the Group giving full details in relation thereto and the Agent shall
inform the other Finance Parties.
14.2 PRO-RATA PAYMENTS
(a) If at any time any Bank (the RECOVERING BANK) receives or recovers any
amount owing to it by the Borrower under this Agreement by direct payment,
set-off or in any manner other than by payment through the Agent pursuant
to clause 8.1 or 8.9 (not being a payment received from a Substitute in
respect of such Bank's Contribution to the Facility or any other payment
of an amount due to the Recovering Bank for its sole account pursuant to
clauses 6.5, 7, 8.5, 12, 13.1 or 13.2), the Recovering Bank shall, within
two Banking Days of such receipt or recovery (a RELEVANT RECEIPT), notify
the Agent of the amount of the Relevant Receipt. If the Relevant Receipt
exceeds the amount which the Recovering Bank would have received if the
Relevant Receipt had been received by the Agent and distributed pursuant
to clause 8.1 or 8.9, as the case may be, then:
(i) within two Banking Days of demand by the Agent, the Recovering
Bank shall pay to the Agent an amount equal (or equivalent) to
the excess;
(ii) the Agent shall treat the excess amount so paid by the
Recovering Bank as if it were a payment made by the Borrower
and shall distribute the same to the Banks (other than the
Recovering Bank) in accordance with clause 8.9; and
(iii) as between the Borrower and the Recovering Bank the excess
amount so re-distributed shall be treated as not having been
paid, but the obligations of the Borrower to the other Banks
shall, to the extent of the amount so paid to the Agent, be
treated as discharged.
(b) If any part of the Relevant Receipt subsequently has to be wholly or
partly refunded by the Recovering Bank (whether to a liquidator or
otherwise) each Bank to which any part of such Relevant Receipt was so
re-distributed shall on request from the Recovering Bank repay to the
Recovering Bank such Bank's pro-rata share of the amount which has to be
refunded by the Recovering Bank.
(c) Each Bank shall on request supply to the Agent such information as the
Agent may from time to time request for the purpose of this clause 14.2.
(d) Notwithstanding the foregoing provisions of this clause 14.2 no Recovering
Bank shall be obliged to share any Relevant Receipt which it receives or
recovers pursuant to legal proceedings taken by it to recover any sums
owing to it under this Agreement with any other party which has a legal
right to, but does not, either join in such proceedings or commence and
diligently pursue separate proceedings to enforce its rights in the same
or another court (unless the proceedings instituted by the Recovering Bank
are instituted by it in breach of clause 17.4).
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14.3 NO RELEASE
For the avoidance of doubt it is hereby declared that failure by any
Recovering Bank to comply with the provisions of clause 14.2 shall not
release any other Recovering Bank from any of its obligations or
liabilities under clause 14.2.
14.4 NO CHARGE
The provisions of this clause 14 shall not, and shall not be construed so
as to, constitute a charge by a Bank over all or any part of a sum
received or recovered by it in the circumstances mentioned in clause 14.2.
15. ASSIGNMENT, SUBSTITUTION AND LENDING OFFICES
15.1 BENEFIT AND BURDEN
This Agreement shall be binding upon, and enure for the benefit of, the
Finance Parties and the Borrower and its respective successors.
15.2 NO ASSIGNMENT BY THE BORROWER
The Borrower may not assign or otherwise transfer any of its rights or
obligations under any of the Finance Documents.
15.3 SUBSTITUTION
Each Bank (an EXISTING BANK) may (subject to clause 15.9) transfer, by way
of novation (but not by way of assignment or otherwise, save that any Bank
which is a special purpose entity under collateralised debt obligation
securitisation arrangements may assign by way of security its rights in
respect of the Facility as part of such arrangements), all or any part of
its rights, benefits and/or obligations under this Agreement to another
person (a SUBSTITUTE):
(a) until the Syndication Completion Date, after consultation with the
Borrower, but without the consent of the Borrower or the other
Obligors;
(b) thereafter, after obtaining the prior written consent of the
Borrower (such consent not to be unreasonably withheld or delayed)
but without the consent of any other party; or
(c) at any time, without any consultation with or consent from the
Borrower (in the case of a transfer to another Bank or to a Bank
Affiliate of a Bank).
Any such novation shall be effected upon not less than five Banking Days'
prior notice by delivery to the Agent of a duly completed Substitution
Certificate duly executed by the Existing Bank and the Substitute. On the
Transfer Effective Date (as specified and defined in a Substitution
Certificate so executed and delivered), to the extent that the Commitment
and Contribution of the Existing Bank are expressed in a Substitution
Certificate to be the subject of the novation in favour of the Substitute
effected pursuant to this clause 15.3, by virtue of the counter-signature
of the Substitution Certificate by the Agent (for itself and the other
parties to this Agreement) and by virtue of the recording of such
transfers in the Register (as defined in clause 15.11):
(d) the existing parties to this Agreement and the Existing Bank shall
be released from their respective obligations towards one another
under this Agreement (DISCHARGED
72
OBLIGATIONS) and their respective rights against one another under
this Agreement (DISCHARGED RIGHTS) shall be cancelled;
(e) the Substitute party to the relevant Substitution Certificate and
the existing parties to this Agreement (other than such Existing
Bank) shall assume obligations towards each other which differ from
the discharged obligations only insofar as they are owed to or
assumed by such Substitute instead of to or by such Existing Bank;
and
(f) the Substitute party to the relevant Substitution Certificate and
the existing parties to this Agreement (other than such Existing
Bank) shall acquire rights against each other which differ from the
discharged rights only insofar as they are exercisable by or against
such Substitute instead of by or against such Existing Bank;
and, on such Transfer Effective Date, the Substitute shall (unless such
novation is part of the primary syndication process carried out by the
Arranger) pay to the Agent for its own account a fee of (pound)1,000. The
Agent shall promptly notify the other Banks and the Borrower of the
receipt by it of any Substitution Certificate.
15.4 RELIANCE ON SUBSTITUTION CERTIFICATE
The Agent (on behalf of itself and the Security Agent and the Borrower)
shall be fully entitled to rely on any Substitution Certificate delivered
to the Agent in accordance with the foregoing provisions of this clause 15
which is complete and regular on its face as regards its contents and
purportedly signed on behalf of the relevant Existing Bank and the
Substitute and none of the Agent, the Security Agent and the Borrower
shall have any liability or responsibility to any party as a consequence
of placing reliance on and acting in accordance with any such Substitution
Certificate if it proves to be the case that the same was not authentic or
duly authorised.
15.5 AUTHORISATION OF AGENT
Each party to this Agreement irrevocably authorises the Agent to
counter-sign each Substitution Certificate on its behalf for the purposes
of clause 15.3 without any further consent of, or consultation with, such
party.
15.6 CONSTRUCTION OF CERTAIN REFERENCES
If any Bank novates all or any part of its rights, benefits and
obligations as provided in clause 15.3 all relevant references in this
Agreement to such Bank shall thereafter be construed as a reference to
such Bank and/or its Substitute to the extent of their respective
interests.
15.7 LENDING OFFICES
Each Bank shall lend through its office at the address specified in
Schedule 1 or, as the case may be, in any relevant Substitution
Certificate or through any other office of such Bank selected from time to
time by such Bank through which such Bank wishes to lend for the purposes
of this Agreement but subject to clause 15.10. If the office through which
a Bank is lending is changed pursuant to this clause 15.7, such Bank shall
notify the Agent promptly of such change.
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15.8 DISCLOSURE OF INFORMATION
(a) Any Bank may disclose to (a) a prospective transferee, (b) any other
person who may propose entering into contractual relations with such
Bank in relation to this Agreement, (c) any person to whom
information may be required to be disclosed by any applicable law or
any regulatory authority or (d) Standard & Poor's Ratings Group,
Xxxxx'x Investor Service, Inc., Fitch, Inc. or another
internationally recognised rating agency such information obtained
under this Agreement about the Borrower, the other Acquisition
Parties and the Group as such Bank shall consider appropriate
provided that, in relation to a disclosure under (a) and (b) above,
the person to whom such information is to be given has entered into
a confidentiality undertaking in the standard form from time to time
of the Loan Market Association.
(b) Notwithstanding any other provision of any Finance Document, each
party to any Finance Document (and any of its officers, directors,
employees, representatives, professional advisers, or other agents)
may (and has since the commencement of discussions with respect to
the Facility been permitted to) disclose to any and all persons,
without limitation of any kind:
(i) the tax treatment and tax structure (each as defined below) of
the Facility; and
(ii) all materials of any kind (including opinions or other tax
analyses) that are provided to such party relating to such tax
treatment or tax structure.
For the purposes of this clause 15.8(b) the TAX TREATMENT of the
Facility is the purported or claimed U.S. Federal income tax
treatment of the Facility, and the TAX STRUCTURE of the Facility is
any fact that may be relevant to understanding the purported or
claimed U.S. Federal income tax treatment of the Facility.
15.9 DETAILS OF NOVATIONS
(a) Other than the Underwriter or with the prior written consent of the
Underwriter, no Bank may transfer, by way of novation, all or any part of
its rights, benefits and/or obligations under this Agreement (other than
to its Bank Affiliate) until the Syndication Completion Date.
(b) Where a Bank novates part of its rights, benefits and obligations in
respect of the Facility pursuant to clause 15.3, that Bank must novate
equal fractions of its Commitment and Contribution (if any) and, if at the
time when such novation takes effect more than one Advance is outstanding
under the Facility, the novation of its Contribution shall take effect in
respect of the same fraction of each Advance.
(c) The Substitution Certificate relating to any such novation shall be
completed accordingly.
(d) No novation shall be effected if, as a consequence of that novation (or as
a consequence of that and any other novation between the same or related
parties taking effect at or about the same time), the combined Commitment
and Contribution of a Bank would be less than approximately
(pound)5,000,000, or, in respect of any Bank which is not an authorised
banking institution under the applicable local law, (pound)2,500,000
(unless such Bank is novating all of its Commitment and Contribution),
provided, however, that for these purposes persons that are Bank
Affiliates of each other shall be treated together as one Bank so that
individual Bank Affiliates may have total Commitments of less than
(pound)5,000,000 (or, as applicable, (pound)2,500,000) if the total
Commitments of all such Bank Affiliates together are at least
(pound)5,000,000 (or, as applicable, (pound)2,500,000).
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15.10 NO ADDITIONAL AMOUNTS
If any Bank changes its lending office or assigns all or any part of its
rights or benefits or transfers all or any part of its obligations under
this Agreement and at the effective date of such change of office,
transfer or assignment any additional amounts would, but for this clause
15.10, be payable by the Borrower under clauses 8.5 or 13.2, then the
obligations of the Borrower under such clauses to such Bank or the
assignee, transferee or Substitute (as the case may be) shall not, unless
the Borrower has consented otherwise, exceed what the Borrower's
obligations would have been (calculated rateably in the case of a partial
transfer or assignment) had no such change of office, transfer or
assignment taken place.
15.11 THE REGISTER
(a) The Agent, acting as the agent of the Borrower for the purposes of clause
15.3, shall maintain at one of its offices a copy of each Substitution
Certificate delivered to it and a register for the recordation of the
names and addresses of the Banks, the Commitment and Contribution of, and
principal amount of the Advances owing to, each Bank pursuant to the terms
hereof from time to time (the REGISTER). The entries in the Register shall
be conclusive, and the Borrower, the Agent and the Banks may treat each
person whose name is recorded in the Register pursuant to the terms hereof
as a Bank hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary.
(b) Upon its receipt of a duly completed Substitution Certificate executed by
an Existing Bank and a Substitute, and, if applicable, the fee referred to
in clause 15.3, the Agent shall accept such Substitution Certificate and
record the information contained therein in the Register. No transfer
shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this clause 15.11.
15.12 BANK AFFILIATES
(a) It is agreed that notwithstanding any other provision of this Agreement, a
Bank may elect to fulfil its Commitment in respect of Advances to the
Borrower by performing its obligations under this Agreement through a
different lending office or by joining a Bank Affiliate of such Bank as a
party to this Agreement for this purpose in the manner provided for in
clause 15.12(b). Having so joined such Bank Affiliate such Bank and such
Bank Affiliate will be treated as having a single Commitment for the
purposes of the Facility but, for all other purposes other than mentioned
in clauses 15.12(b) and 15.12(c), will each be treated as Banks.
(b) A Bank may provide for a different lending office to participate in
certain Advances in the manner contemplated in clause 15.12(a) by giving
notice to this effect under clause 15.7. A Bank may provide for a Bank
Affiliate to participate in such Advances in such manner by:
(i) joining the relevant Bank Affiliate in as a Bank by means of a
Substitution Certificate in accordance with clause 15.3 (for
which purpose the Bank (as the EXISTING BANK) and the Bank
Affiliate (as the SUBSTITUTE) shall adopt, as a single
Commitment, such Bank's Commitment in respect of the
Facility); and
(ii) giving notice to the Agent and the Borrower, detailing in
accordance with the relevant Substitution Certificate the
Advances in which such Bank Affiliate will participate,
in which event that Bank and its Bank Affiliate:
75
(A) will be treated as having a single Commitment, but, for
all other purposes other than that mentioned in clause
15.12(c), will be treated as separate Banks; and
(B) shall participate in Advances as contemplated by the
notice given pursuant to clause 15.12(b)(ii).
(c) For the purposes of:
(i) compliance with clause 15.3 and
(ii) voting in connection with this Agreement or any other Finance
Document,
each Bank and its Bank Affiliate will be regarded as a single Bank.
16. APPOINTMENT OF AGENT
16.1 APPOINTMENT
Each Bank irrevocably appoints the Agent as its agent for the purposes of
this Agreement and the Intercreditor Agreement and each Finance Party
irrevocably authorises the Agent in such capacity:
(a) (whether or not by or through employees or agents) to take such
action on such Bank's behalf and to exercise such rights, remedies,
powers and discretions as are specifically delegated to the Agent by
this Agreement or the Intercreditor Agreement, together with such
powers and discretions as are reasonably incidental thereto (but
subject to any restrictions or limitations specified in this
Agreement and/or the Intercreditor Agreement). Neither the Agent nor
the Arrangers shall, however, have any duties, obligations or
liabilities (whether fiduciary or otherwise) to the other Finance
Parties beyond those expressly stated in this Agreement and/or the
Intercreditor Agreement; and
(b) to accept on behalf of the Banks the terms of any reliance letter or
engagement letter relating to the Reports or any reports or letter
provided by the report providers in connection with the Finance
Documents or the transactions contemplated therein (including any
net asset letter in connection with financial assistance procedures)
and to bind the Banks in respect of such Reports, reports or letters
and to sign such letters on their behalf and each Bank further
confirms that it accepts the terms and qualifications set out in
such letters.
Notwithstanding that the Agent and the Security Agent may from time to
time be the same entity, the Agent and Security Agent have entered into
this Agreement in their separate capacities as agent for the Banks under
and pursuant to this Agreement and as security trustee for the Finance
Parties to hold the security created or to be created by the Security
Documents on the terms set out in the Security Documents and/or in the
Intercreditor Agreement. However, where this Agreement provides for the
Agent to communicate with or provide instructions to the Security Agent,
while the Agent and the Security Agent are the same entity it will not be
necessary for there to be any such formal communications or instructions
notwithstanding that this Agreement provides in certain cases for the same
to be in writing.
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16.2 AGENT'S ACTIONS
Any action taken by the Agent under or in relation to this Agreement
and/or the Intercreditor Agreement with requisite authority, or on the
basis of appropriate instructions, received from the Majority Banks (or as
otherwise duly authorised) shall be binding on all the Banks.
16.3 AGENT'S DUTIES
The Agent shall:
(a) promptly notify each Bank of the contents of each notice,
certificate or other document received by the Agent under or
pursuant to clause 10;
(b) consult with the Banks and the other Finance Parties as to whether
and, if so, how a discretion vested in the Security Agent is, either
in any particular instance or generally, to be exercised but so that
this shall not prevent the Security Agent, in exceptional
circumstances where time does not permit such consultation and
urgent action is required, from exercising its rights and powers to
preserve the security constituted by the Security Documents so long
as the Security Agent promptly notifies the other Finance Parties
subsequently of such exercise; and
(c) (subject to the other provisions of this clause 16) take such action
or, as the case may be, refrain from taking such action with respect
to the exercise of any of its rights, remedies, powers and
discretions as agent, as the Majority Banks may reasonably direct.
16.4 AGENT'S RIGHTS
The Agent may:
(a) in the exercise of any right, remedy, power or discretion in
relation to any matter, or in any context, not expressly provided
for by this Agreement, act or, as the case may be, refrain from
acting in accordance with the instructions of the Majority Banks,
and shall be fully protected in so doing;
(b) unless and until it shall have received directions from the Majority
Banks, take such action, or refrain from taking such action, in
respect of a Default of which the Agent has actual knowledge as it
shall deem advisable in the best interests of the Banks (but shall
not be obliged to do so);
(c) refrain from acting in accordance with any instructions of the
Majority Banks to institute any legal proceedings arising out of or
in connection with this Agreement and/or the Intercreditor Agreement
until it has been indemnified and/or secured to its satisfaction
against any and all costs, expenses or liabilities (including legal
fees) which it would or might incur as a result;
(d) deem and treat (i) each Bank as the person entitled to the benefit
of the Contribution of such Bank for all purposes of this Agreement
and the Intercreditor Agreement unless and until a Substitution
Certificate shall have been filed with the Agent and shall have
become effective, and (ii) the office set opposite the name of each
Bank in Schedule 1 or, as the case may be, in any relevant
Substitution Certificate as such Bank's lending office unless and
until a written notice of change of lending office shall have been
received by the Agent; and the Agent may act upon any such notice
unless and until the same is superseded by a further such notice;
77
(e) rely as to matters of fact which might reasonably be expected to be
within the knowledge of the Borrower upon a certificate signed by
any director of the Borrower on behalf of the Borrower; and
(f) refrain from doing anything which would, or might in its opinion, be
contrary to any law or regulation of any jurisdiction and may do
anything which is in its opinion necessary or desirable to comply
with any such law or regulation.
16.5 NO LIABILITY OF ARRANGER AND AGENT
Neither the Arranger nor the Agent or any of their respective employees
and agents shall:
(a) be obliged to request any certificate or opinion under any provision
of the Finance Documents or to make any enquiry as to the use of the
proceeds of the Facility unless (in the case of the Agent) so
required in writing by any Bank, in which case the Agent shall
promptly make the appropriate request of the Borrower; or
(b) be obliged to make any enquiry as to any breach or default by the
Borrower or any Acquisition Party or any other member of the Group
in the performance or observance of any of the provisions of any
Finance Document or as to the existence of a Default unless (in the
case of the Agent) the Agent has actual knowledge thereof or has
been notified in writing thereof by a Bank, in which case the Agent
shall promptly notify the Banks of the relevant event or
circumstance; or
(c) be obliged to enquire whether or not any representation or warranty
made by the Borrower or any Acquisition Party or any other member of
the Group pursuant to any Finance Document is true; or
(d) be obliged to do anything (including, without limitation, disclosing
any document or information) which would, or might in its opinion,
be contrary to any law or regulation or be a breach of any duty of
confidentiality or otherwise be actionable or render it liable to
any person; or
(e) be obliged to account to any Finance Party for any sum or the profit
element of any sum received by it for its own account; or
(f) be obliged to institute any legal proceedings arising out of or in
connection with, or otherwise take steps to enforce, any Finance
Document other than on the instructions of the Majority Banks; or
(g) be liable to any Finance Party for any action taken or omitted under
or in connection with any Finance Document or the Facility unless
caused by its gross negligence or wilful misconduct.
For the purposes of this clause 16 the Agent shall not be treated as
having actual knowledge of any matter of which the corporate finance or
any other division outside the agency department of the person for the
time being acting as the Agent may become aware in the context of
corporate finance, advisory or lending activities from time to time
undertaken by the Agent for the Borrower or any of its Subsidiaries or
Affiliates or associated companies or any other person which may be a
trade competitor of the Group or any member of it or may otherwise have
commercial interests similar to those of the Group or any member of it.
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16.6 NON-RELIANCE ON ARRANGER OR AGENT
Each Finance Party acknowledges, by virtue of its execution of this
Agreement or, as the case may be, a Substitution Certificate, that it has
not relied on any statement, opinion, forecast or other representation
(including, without limitation, anything contained in the Information
Memoranda) made by the Arranger or the Agent to induce it to enter into
this Agreement or any other Finance Document and that it has made and will
continue to make, without reliance on the Agent or the Arranger and based
on such documents as it considers appropriate, its own appraisal of the
creditworthiness of the Borrower and the Group and its own independent
investigation of the financial condition, prospects and affairs of the
Borrower and the Group in connection with the making and continuation of
the Facility under this Agreement and the other Finance Documents. Neither
the Arranger nor the Agent shall at any time be deemed to have had or have
any duty or responsibility, either historically, initially or on a
continuing basis, to provide any Finance Party with any credit or other
information with respect to the Borrower or any other member of the Group
whether coming into its possession before the making of any Advance or at
any time or times thereafter, other than (in the case of the Agent) as
provided in clauses 16.3(a) and 16.5(a).
16.7 NO RESPONSIBILITY ON ARRANGER OR AGENT FOR CERTAIN MATTERS
Neither the Arranger nor the Agent shall have any responsibility or
liability to any Finance Party:
(a) on account of the failure of any member of the Group or any
Acquisition Party to perform any of its obligations under any of the
Finance Documents; or
(b) for the financial condition of any member of the Group or any
Acquisition Party; or
(c) for the completeness, adequacy or accuracy of any statements,
representations or warranties in the Information Package or any of
the Finance Documents or any document delivered under any of such
documents; or
(d) for the execution, effectiveness, adequacy, genuineness, validity,
enforceability or admissibility in evidence of the Finance Documents
or of any certificate, report or other document executed or
delivered under any of the Finance Documents; or
(e) to ascertain whether all deeds and documents which should have been
deposited with it under or pursuant to any of the Security Documents
have been so deposited; or
(f) to investigate or make any enquiry into the title of the Charging
Group to any of the Charged Assets; or
(g) for the failure to register any of the Security Documents with the
Registrar of Companies, the Patent Office, H.M. Land Registry, the
Trade Marks Registry or any other public office; or
(h) for the failure to register any of the Security Documents in
accordance with the provisions of the documents of title of the
Charging Group to any of the Charged Assets; or
(i) for the failure to effect or procure the registration of any
floating charge created by any of the Security Documents by
registering under the Land Registration Xxx 0000 any notice, caution
or other entry prescribed by or pursuant to the provisions of the
said Act against any land for the time being forming part of the
security; or
79
(j) for the failure to take or require the Borrower or any other member
of the Charging Group to take any steps to render any of the
Security Documents effective as regards property or assets outside
England or Wales or to secure the creation of any ancillary charge
under the laws of the jurisdiction concerned; or
(k) (save as otherwise provided in this clause 16) for taking or
omitting to take any other action under or in relation to the
Security Documents or any aspect thereof; or
(l) on account of the failure of the Security Agent to perform or
discharge any of its duties or obligations under the Security
Documents; or
(m) (save as otherwise provided in this clause 16) otherwise in
connection with the Facility or their negotiation or for acting (or,
as the case may be, refraining from acting) in accordance with the
instructions of the Majority Banks.
16.8 RELIANCE ON DOCUMENTS AND PROFESSIONAL ADVICE
The Arranger and the Agent shall be entitled to rely on any communication,
instrument or document believed by it to be genuine and correct and to
have been signed or sent by the proper person and shall be entitled to
rely as to legal or other professional matters on opinions and statements
of any legal or other professional advisers selected or approved by it
(including those in the Agent's employment).
16.9 OTHER DEALINGS
The Arranger and the Agent may, without any liability to account to the
other Finance Parties, accept deposits from, lend money to, and generally
engage in any kind of banking or other business with, be the owner or
holder of any shares or other securities of, and provide advisory or other
services to, the Borrower or any Acquisition Party or any of their
respective Subsidiaries, Affiliates or associated companies or any of the
Finance Parties as if it were not the Arranger or the Agent, as the case
may be.
16.10 RIGHTS OF AGENT AS BANK; NO PARTNERSHIP
With respect to its own Commitment and Contribution (if any) the Agent
shall have the same rights and powers under this Agreement and the
Security Documents as any other Bank and may exercise the same as though
it were not performing the duties and functions delegated to it under this
Agreement and/or the Intercreditor Agreement and the term BANKS shall,
unless the context clearly otherwise indicates, includes the Agent in its
individual capacity as Bank. This Agreement shall not and shall not be
construed so as to constitute a partnership between the parties or any of
them.
16.11 AMENDMENTS AND WAIVERS
(a) MAJORITY BANK MATTERS
Subject to clause 16.11(b) and (c) the Agent may, with the consent of the
Majority Banks (or if and to the extent expressly authorised by the other
provisions of this Agreement) and, if so instructed by the Majority Banks,
shall: (i) agree amendments or modifications to this Agreement with the
Borrower and/or vary or waive breaches of, or defaults under, or otherwise
excuse performance of, any provision of this Agreement by the Borrower;
and/or (ii) authorise the Security Agent (on behalf of the Finance
Parties) to agree amendments or modifications to the Security Documents
with the Borrower (on behalf of all members of the Charging Group) and/or
vary or waive breaches of, or defaults under, or otherwise excuse
80
performance of, any provision of any of the Security Documents by any
member of the Charging Group.
Any such action so authorised and effected by the Agent shall be
documented in such manner as the Agent shall (with the approval of the
Majority Banks) determine, shall be promptly notified to the Banks by the
Agent and (without prejudice to the generality of clause 16.2) shall be
binding on all the Banks.
(b) ALL BANK MATTERS; SECURITY
Except with the prior written consent of all the Banks, the Agent shall
not have authority on behalf of the Banks to authorise the Security Agent
to agree amendments or modifications to the Security Documents with the
members of the Charging Group (or the Borrower on their behalf) and/or
vary or waive breaches of, or defaults under, or otherwise excuse
performance of, any provision of any of the Security Documents by any
member of the Charging Group if the effect of such would be to (i) release
any member of the Charging Group from the security constituted by any
Security Document (provided that where such release of a member of the
Charging Group arises as a result of a permitted disposal of such member
pursuant to clause 10.6(f), no such consent of the Banks shall be
required), (ii) release any of the Charged Assets from the security
constituted by any Security Document other than any such release as part
of a disposal which is not restricted by the terms of this Agreement,
(iii) release any member of the Charging Group from any of its guarantee
or other assurance obligations under any of the Security Documents or (iv)
agree with the Borrower or any other member of the Charging Group any
amendment of, or action in relation to, any of the Security Documents
which would have the effect of (x) extending the due date or reducing the
amount of any payment under any Security Document or (y) changing the
currency in which any amount is payable under any Security Document.
(c) ALL BANK MATTERS; GENERAL
Except with the prior written consent of all the Banks, the Agent shall
not have authority on behalf of the Banks to agree with the Borrower any
amendment or modification to this Agreement or to vary or waive breaches
of or defaults under or otherwise excuse performance of any provision of
this Agreement by the Borrower, if the effect of such would be to (i)
reduce the applicable Margin, (ii) postpone the due date or reduce the
amount of any scheduled payment of principal, interest, commitment
commission or other amount payable by the Borrower under this Agreement,
(iii) change the currency in which any amount is payable by the Borrower
under this Agreement, (iv) increase any Bank's Commitment, (v) extend any
period during which a Drawdown Notice may be delivered, (vi) change the
definition of MAJORITY BANKS in clause 1.1, (vii) change any provision of
this Agreement which expressly requires the approval or consent of all the
Banks such that the relevant approval or consent may be given otherwise
than with the sanction of all the Banks, (viii) change the order of
distribution under clause 8.9, (ix) change clause 14.2 or (x) change this
clause 16.11.
(d) DEEDS OF ADHERENCE
For the purposes of this clause 16.11 it is expressly agreed and
acknowledged that the execution of a guarantee and/or deed of adherence by
a new Subsidiary or other charging company or any deed or instrument
pursuant to a further assurance provision in the Security Documents shall
not constitute an amendment or modification to, or variation of, any of
the Security Documents.
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16.12 REIMBURSEMENT AND INDEMNITY BY BANKS
Each Bank shall reimburse the Arranger and the Agent (rateably in
accordance with its Commitment), to the extent that the Arranger or the
Agent is not reimbursed by the Borrower, for the costs, charges and
expenses incurred by the Arranger and the Agent in connection with the
preparation and distribution of the Information Memoranda and advertising
in connection with this Agreement as agreed between the Borrower and the
Arranger and/or in contemplation of, or otherwise in connection with, the
enforcement or attempted enforcement of, or the preservation or attempted
preservation of any rights under, or in carrying out its duties under any
of the Finance Documents including (in each case) the fees and expenses of
legal or other professional advisers. Each Bank shall on demand indemnify
the Agent (rateably in accordance with its Commitment) against all
liabilities, damages, costs and claims whatsoever incurred by the Agent in
connection with any of the Finance Documents or the performance of its
duties under the Finance Documents or any action taken or omitted by the
Agent under any of the Finance Documents, unless such liabilities,
damages, costs or claims arise from the Agent's own gross negligence or
wilful misconduct. The Borrower shall counter-indemnify the Banks against
all payments by them under this clause 16.12.
16.13 RETIREMENT OF AGENT AND SECURITY AGENT
(a) The Agent may (following consultation with the Borrower) retire from its
appointment as Agent under this Agreement and the Intercreditor Agreement
having given to the Borrower and each of the Banks not less than 30 days'
notice of its intention to do so, provided that no such retirement shall
take effect unless there has been appointed by the Banks as a successor
agent:
(i) a Bank nominated by the Majority Banks or, failing such a
nomination,
(ii) any reputable and experienced bank or institution with offices
in London nominated by the Agent.
Any corporation into which the Agent may be merged or converted or any
corporation with which the Agent may be consolidated or any corporation
resulting from any merger, conversion, amalgamation, consolidation or
other reorganisation to which the Agent shall be a party shall, to the
extent permitted by applicable law, be the successor Agent under this
Agreement without the execution or filing of any document or any further
act on the part of any of the parties to this Agreement save that notice
of any such merger, conversion, amalgamation, consolidation or other
reorganisation shall forthwith be given to the Borrower and the Finance
Parties.
(b) Upon any such successor as aforesaid being appointed, the retiring Agent
shall be discharged from any further obligation under this Agreement and
the Intercreditor Agreement (but shall continue to have the benefit of
this clause 16 in respect of any action it has taken or refrained from
taking prior to such discharge) and its successor and each of the other
parties to this Agreement shall have the same rights and obligations among
themselves as they would have had if such successor had been a party to
this Agreement in place of the retiring Agent. The retiring Agent shall
(at the expense of the Borrower) provide its successor with copies of such
of its records as its successor reasonably requires to carry out its
functions as such.
16.14 CHANGE OF REFERENCE BANKS
If (a) the whole of the Contribution (if any) of any Reference Bank is
prepaid, (b) the Commitment (if any) of any Reference Bank is reduced to
zero in accordance with clause 16.5 or 13.1, (c) a Reference Bank novates
the whole of its rights and obligations (if
82
any) as a Bank under this Agreement or (d) a Reference Bank ceases to
provide quotations to the Agent upon request for the purposes of Schedule
4 or for the purposes of determining LIBOR (where such quotations are
required having regard to the definition of LIBOR in clause 1.1) the Agent
may, acting on the instructions of the Majority Banks, terminate the
appointment of such Reference Bank and with the consent of the Borrower
(such consent not to be unreasonably withheld or delayed) appoint another
Bank to replace such Reference Bank.
16.15 UNDERWRITERS
The Underwriter has no obligations of any kind to any other party under
any Finance Document and references to the ARRANGER in clauses 16.5 to
16.9 shall be deemed to include a reference to the Underwriter.
17. DECISIONS OF BANKS AND AGENT
17.1 OBLIGATIONS SEVERAL
The obligations of each Bank under this Agreement are several; the failure
of any Bank to perform such obligations shall not relieve any other
Finance Party or the Borrower of any of their respective obligations or
liabilities under this Agreement nor shall any Finance Party be
responsible for the obligations of any other Finance Party under this
Agreement (except to the extent that any person has obligations in
different Finance Party capacities).
17.2 INTERESTS SEVERAL
Notwithstanding any other term of this Agreement (but without prejudice to
the provisions of this Agreement relating to or requiring action by the
Majority Banks) the interests of the Finance Parties are several and the
amount due to each of the Finance Parties is a separate and independent
debt. Without prejudice to any other provision of this Agreement
(including any requirement for action to be approved or instigated by, or
with the consent or approval of, the Majority Banks and, without
limitation, clause 17.4), each of the Finance Parties shall have the right
to protect and enforce its rights arising out of this Agreement and it
shall not be necessary for any other Finance Party to be joined as an
additional party in any proceedings for this purpose.
17.3 MAJORITY BANKS
(a) Where this Agreement or any of the Borrower Security Documents provides
for any matter to be determined by reference to the opinion of the
Majority Banks or to be subject to the consent or request of the Majority
Banks or for any action to be taken on the instructions of the Majority
Banks, such opinion, consent, request or instructions shall (as between
the Banks) only be regarded as having been validly given or issued by the
Majority Banks if all the (or, as applicable, all the relevant) Banks
shall have received prior notice of the matter on which such opinion,
consent, request or instructions are required to be obtained and the
relevant majority of (relevant) Banks shall have given or issued such
opinion, consent, request or instructions, but so that (as between the
Borrower and the Finance Parties) the Borrower shall be entitled (and
bound) to assume that such notice shall have been duly received by each
Bank and that the relevant majority shall have been obtained to constitute
Majority Banks whether or not this is the case.
(b) If, within 10 Banking Days of the Agent despatching to each (relevant)
Bank a notice requesting instructions (or confirmation of instructions)
from the (relevant) Banks or the agreement of the (relevant) Banks to any
amendment, modification, waiver, variation or
83
excuse of performance for the purposes of, or in relation to, any of the
Finance Documents, the Agent has not received a reply specifically giving
or confirming or refusing to give or confirm the relevant instructions or,
as the case may be, approving or refusing to approve the proposed
amendment, modification, waiver, variation or excuse of performance, then
(irrespective of whether such (relevant) Bank responds at a later date)
the Agent shall treat any (relevant) Bank which has not so responded as
having indicated a desire to be bound by the wishes of 66 2/3 per cent. of
those (relevant) Banks (measured in terms of the relevant Commitments of
those (relevant) Banks) which have so responded.
(c) For the purposes of this clause 17.3, any (relevant) Bank which notifies
the Agent of a wish or intention to abstain on any particular issue shall
be treated as if it had not responded.
(d) This clause 17.3 shall not apply in relation to those matters referred to
in, or the subject of, clause 16.11(b) and 16.11(c).
17.4 BANKS ACTING TOGETHER
If the Agent makes a declaration under clause 11.2 the Agent shall, in the
names of all the Banks, take such action on behalf of the Banks and
conduct such negotiations with the Borrower and any other members of the
Group and generally administer the Advances in accordance with the wishes
of the Majority Banks. All the Banks shall be bound by the provisions of
this clause 17.4 and no Bank shall be entitled to take action
independently against the Borrower or any other member of the Group
without the consent of the Majority Banks.
18. CASH COLLATERAL ACCOUNTS
18.1 APPLICATIONS AND WITHDRAWALS
Each amount from time to time standing to the credit of a Cash Collateral
Account shall be applied in accordance with the relevant provisions of the
Finance Documents and no other withdrawals may be made from any Cash
Collateral Account without the consent of the Agent.
18.2 SECURITY OVER CASH COLLATERAL ACCOUNTS
The Borrower shall, or shall procure that the relevant other member of the
Group shall, execute such further documents as are necessary to ensure
that each Cash Collateral Account is charged in favour of the Security
Agent to the satisfaction of the Agent.
18.3 INTEREST AND BROKEN DEPOSITS
(a) Each amount from time to time standing to the credit of a Cash Collateral
Account shall bear interest by reference to successive deposit periods at
the rate at which the Security Agent or, as the case may be, the Cash
Collateral Account Bank pays interest on deposits for such period from its
corporate customers but the Borrower acknowledges that none of the Finance
Parties shall have any responsibility to it for any loss occasioned as a
consequence of the application of the amount standing to the credit of any
Cash Collateral Account prior to the last day of any such deposit period,
such application being expressly permitted by the terms of the Finance
Documents.
(b) In respect of each Cash Collateral Account, provided no Default shall have
occurred and be continuing, the Security Agent or, as the case may be, the
Cash Collateral Account Bank shall, at the request of the Borrower, pay to
the Borrower any interest that has accrued on the
84
amount standing to the credit of such Cash Collateral Account. Such
interest shall be paid at six-monthly intervals or on such days that the
principal amount standing to the credit of such Cash Collateral Account is
reduced to zero pursuant to the terms of this Agreement.
18.4 PAYMENTS IN ACCORDANCE WITH THE SENIOR FACILITIES AGREEMENT
Where this Agreement requires any amount to be paid into a Cash Collateral
Account, so long as the Senior Facilities Agreement is still in existence
then any payment into a Cash Collateral Account in accordance with the
terms of the Senior Facilities Agreement shall satisfy such requirement
under this Agreement.
19. NOTICES AND OTHER MATTERS
19.1 OBLIGATIONS UNCONDITIONAL
The obligations of the Borrower under this Agreement and the Borrower
Security Documents are unconditional and irrevocable (subject to the
express provisions of this Agreement or any Borrower Security Document)
and shall not be in any way affected or discharged by reason of any matter
affecting the Transaction Documents including, without limitation, any
breach or alleged breach of the same or any claim that the Borrower or any
other member of the Group has, or considers that it has, against any other
party to the Transaction Documents. The Borrower acknowledges that any
authorisation given under this Agreement or any Borrower Security Document
by a Finance Party in relation to the Transaction Documents shall not
constitute any representation or warranty by such (or any) Finance Party
as to the adequacy or effectiveness of such documents, the purchase
consideration payable by the Borrower, the commercial advisability of the
Borrower entering into the arrangements contemplated thereby or otherwise.
19.2 ADDRESS FOR NOTICE
Every notice, request, demand or other communication under this Agreement
shall:
(a) be in writing delivered personally or by first-class prepaid letter
(airmail if available) or telefax;
(b) be deemed to have been received, subject as otherwise provided in
this Agreement, in the case of a letter, when delivered personally
or 3 days after it has been put into the post and, in the case of a
telefax, when a complete and legible copy is received by the
addressee (unless the time of despatch of any telefax is after close
of business in which case it shall be deemed to have been received
at the opening of business on the next business day); and
(c) be sent:
(i) to the Borrower at:
Premier House
Centrium Business Park
Xxxxxxxxx Xxx,
Xx. Xxxxxx
Xxxxx XX0 0XX
Telefax: 01727 815980
Attention: Xxxx Xxxxx
85
with a copy to:
Hicks, Muse, Xxxx & Xxxxx Limited
00 Xxxxxxxxx Xxxxx
Xxxxxx XX0X 0XX
Telefax: 020 7201 2222
Attention: Xxxxxx Xxx
(ii) to the Agent and the Security Agent at:
000 Xxxxxx Xxxx
Xxxxxx XX0X 0XX
Telefax: 020 7777 2360
Attention: Xxx Xxxxxxxx, Agency Loans Department
(iii) to X.X. Xxxxxx plc as the Arranger at:
000 Xxxxxx Xxxx
Xxxxxx XX0X 0XX
Telefax: 020 7777 4788
Attention: Xxxx Xxxxxx
(iv) JPMorgan Chase Bank as the Underwriter at:
000 Xxxxxx Xxxx
Xxxxxx XX0X 0XX
Telefax: 020 7777 4783
Attention: Xxx Xxxxx
(v) to each Bank at its address or telefax number specified in
Schedule 1 or in any relevant Substitution Certificate,
or to such other address or telefax number as is notified by
the Borrower or a Finance Party, as the case may be, to the
Agent and the Agent shall promptly notify the other parties
hereto of any such change.
19.3 NOTICE TO AGENT
Every notice, request, demand or other communication under this Agreement
to be given by the Borrower to any other party shall be given to the Agent
for onward transmission as appropriate and to be given to the Borrower
shall (except as otherwise provided in this Agreement) be given by the
Agent.
19.4 NO IMPLIED WAIVER, REMEDIES CUMULATIVE
No failure or delay on the part of the Finance Parties or any of them to
exercise any power, right or remedy under this Agreement or any Borrower
Security Document shall operate as a waiver thereof, nor shall any single
or partial exercise by the Finance Parties or any of them of any power,
right or remedy preclude any other or further exercise thereof or the
exercise of any other power, right or remedy. The remedies provided in
this Agreement and each of the
86
Borrower Security Documents are cumulative and are not exclusive of any
remedies provided by law.
19.5 COUNTERPARTS
This Agreement may be executed in any number of counterparts and by the
different parties on separate counterparts, each of which when so executed
and delivered shall be an original, but all counterparts shall together
constitute one and the same instrument.
19.6 CONFLICTS
(a) The Borrower acknowledges that JPMorgan Chase Bank and its parent
undertakings, subsidiary undertakings and fellow subsidiary undertakings
(together the ARRANGER GROUP) may be providing debt finance, equity
capital or other services (including financial advisory services) to other
persons with which the Borrower may have conflicting interests in respect
of the Facility or otherwise.
(b) No member of the Arranger Group shall use confidential information from
the Borrower by virtue of the Facility or its relationships with the
Borrower in connection with their performance of services for other
persons. This shall not, however, affect any obligations that any member
of the Arranger Group has as Agent in respect of the Finance Documents.
The Borrower also acknowledges that no member of the Arranger Group has
any obligation to use or furnish to the Borrower information obtained from
other persons for its benefit.
(c) The terms PARENT UNDERTAKING, SUBSIDIARY UNDERTAKING and FELLOW
UNDERTAKING when used in this clause have the meaning given to them in
sections 258 and 259 of the Act.
19.7 COMMUNICATIONS INDEMNITY
The Borrower shall indemnify each Finance Party against any cost, claim,
loss, expense (including legal fees) or liability together with any VAT
thereon which any of the Finance Parties may sustain or incur as a
consequence of any telefax communication purporting to originate from a
member of the Group to the Agent or the Security Agent being made or
delivered fraudulently (unless such cost, claim, loss, expense or
liability is caused by the gross negligence or wilful misconduct of such
Finance Party). For avoidance of doubt, the Borrower shall only be liable
under this indemnity in respect of telefax communications originating or
purportedly originating from a member of the Group. Neither the Agent nor
the Security Agent shall be liable for any damages arising from the use by
unauthorised persons of information or other materials sent through
electronic, telecommunications or other information transmission systems
that are intercepted by such persons.
19.8 NOTICE OF THE END OF THE FINANCE PERIOD
Upon each of the Finance Parties and each of the members of the Group
ceasing to have any actual or contingent liabilities or obligations under
any of the Finance Documents, the Agent shall promptly notify the Borrower
that the end of the Finance Period has occurred.
19.9 THIRD PARTY RIGHTS
No term of this Agreement, other than clause 12.3, is enforceable by a
person who is not a party to this Agreement. Each person referred to in
clause 12.3 which is not a party to this Agreement (a RELEVANT THIRD
PARTY) shall have the right to enforce its respective rights against the
parties to this Agreement under such clauses provided that the Finance
Party to which such Relevant Third Party is or was connected may, by
agreement with the Borrower,
87
vary the rights conferred on such Relevant Third Party by such clauses
(without the consent of any Relevant Third Party and shall not be liable
to any Relevant Third Party for any of its acts or omissions under this
clause 19.9).
20. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English law.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to
be duly executed on the date first above written.
88
SCHEDULE 1
THE BANKS AND THEIR COMMITMENTS
BANK COMMITMENT
(POUND)
-------------------------------------------------------------------------
JPMORGAN CHASE BANK 75,000,000
-------------------------------------------------------------------------
89
SCHEDULE 2
FORM OF DRAWDOWN NOTICE
PART 1
To: X.X. Xxxxxx Europe Limited
125 London Wall [DATE]
Xxxxxx XX0X 0XX
Attention: Xxx Xxxxxxxx, Agency Loans Department
Dear Sirs,
SENIOR SUBORDINATED FACILITY
AGREEMENT DATED [_] 2003 (THE AGREEMENT)
We refer to the Agreement and hereby give you notice that we wish to draw an
Advance under the Facility in the sum of [(pound)_] on _ with payment to be made
in accordance with our irrevocable instructions to you contained in clause 8.2
of the Agreement. [We select a first Interest Period in respect thereof of
............... months.] [The first Interest Period in respect thereof to expire
on ............................. _]
We confirm that the entire Advance will be used for the purposes described in
clause 2.1 of the Agreement.
We confirm that:
(a) no event or circumstance has occurred and is continuing which constitutes
a Default; and
(b) the representations and warranties contained in clause 9.1[, 9.2] and 9.3
of the Agreement which are repeated in accordance with clause 9.4 of the
Agreement are true and correct in all material respects at the date hereof
as if made with respect to the facts and circumstances existing at such
date.
Words and expressions defined in the Agreement shall have the same meanings
where used herein.
For and on behalf of
PREMIER FINANCING LIMITED
.....................
Director
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SCHEDULE 3
DOCUMENTS AND EVIDENCE REQUIRED AS CONDITIONS PRECEDENT
PART 1
1. CORPORATE
1.1 A certificate from Premier Holdings, Newco 1, HMTF Poultry, the Borrower
and each other Obligor incorporated in England and Wales in the form of
annex 1 to this Schedule 3, together with all the documents referred to
therein.
1.2 A certificate from Cayman 1 and each Obligor incorporated outside England
and Wales substantially in the form of annex 1 to this Schedule 3 with
appropriate amendments taking into account its jurisdiction of
incorporation, together with all the documents referred to therein.
2. CREDIT DOCUMENTS
2.1 This Agreement, duly executed by all parties to it.
2.2 The agreed form amendment letter in respect of the Senior Facilities
Agreement, duly executed by all parties to it.
2.3 The Third Fee Letters duly executed by the Borrower.
3. SECURITY DOCUMENTS
3.1 The Intercreditor Agreement, duly executed by all parties to it.
3.2 The Group Debenture duly executed by the Borrower, Premier Holdings and
each of the Original Charging Subsidiaries.
3.3 The Share Pledges, duly executed by each of the parties thereto (other
than the Security Agent).
3.4 The Bond and Floating Charges duly executed by each of the parties thereto
(other than the Security Agent).
3.5 The Standard Securities duly executed by each of the parties thereto
(other than the Security Agent).
3.6 The Jonker Fris Security Documents duly executed by Jonker Fris B.V.
3.7 The Intercompany Loan Subordination Deed duly executed by Newco 1 and the
Borrower.
3.8 The Investors' Undertaking duly executed by each of Cayman 1, Newco 1 and
Premier Holdings.
3.9 The Voting Undertaking duly executed by Cayman 1.
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3.10 The Premier Holdings/Borrower Subordination Deed duly executed by Premier
Holdings and the Borrower.
3.11 The HMTF Poultry/Borrower Subordination Deed, duly executed by HMTF
Poultry and the Borrower.
4. OPINIONS
4.1 An opinion of Xxxxx & Xxxxx, English legal advisers to the Agent.
4.2 Local law legal opinions from legal advisers to the Agent in the
jurisdictions in which Cayman 1 and each Obligor is incorporated.
5. FINANCIAL
A letter from the Auditors confirming that they continue to be appointed
as the auditors of the Borrower and confirming that they will provide the
Auditors' reports in accordance with this Agreement.
6. MISCELLANEOUS
A certificate signed by a director of the Borrower confirming that it is
in compliance with clause 10.2(f)(ii).
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PART 2
1. If entities constituting the Target are to be acquired, the Borrower, or a
Purchaser, will acquire 100 per cent. of the ownership interests in those
entities (which shall be limited liability entities);
2. The Agent has received (in form and substance satisfactory to it (acting
reasonably)) certified copies of board resolutions of:
(a) the Borrower and (if a different entity) the Purchaser making the
relevant Acquisition approving the Acquisition and the Advance of
the Facility; and
(b) the Target, approving the Security Documents to be entered into in
accordance with paragraph 10 below;
3. The Agent has received a certificate of an authorised officer of the
Borrower confirming that no default is outstanding in respect of the High
Yield Bonds, together with a legal opinion from Weil, Gotshal & Xxxxxx
addressed to the Senior Finance Parties and the Finance Parties (in the
same form (save for any consequential amendments) as the legal opinion of
Xxxx Xxxxxxx & Xxxxxx, dated 27 May 2002, addressed to the Senior Finance
Parties) confirming that no breach of the High Yield Bonds will occur as a
result of the Acquisition or the utilisation of the Facility;
4. The Agent has (a) received evidence that, or is otherwise satisfied that,
all governmental and third party approvals necessary in connection with
the relevant Acquisition have been obtained (without any conditions which
are not acceptable to the Agent (acting reasonably)) and (b) received
evidence that, or is otherwise satisfied that, (i) all relevant
competition authorities have decided not to initiate proceedings in
respect of the relevant Acquisition or (ii) the time limit for them to do
so has expired without a decision to initiate such proceedings or (iii)
there are no grounds on which such proceedings may be brought or (iv) no
remedies or conditions will result from any such reference or proceedings
which would be reasonably likely to be materially prejudicial to the
Senior Finance Parties or the Finance Parties.
5. The Agent has received evidence or is otherwise satisfied that the
relevant Acquisition Agreement has become in all respects unconditional in
respect of the Acquisition (other than as to the payment of the purchase
price for the Acquisition, to the extent funded by the Facility) and that
the Acquisition will complete simultaneously with the receipt by the
Vendor of the proceeds of the relevant Advances;
6. The Agent has received a funds flow statement (including a statement of
all anticipated transaction costs) relating to the Acquisition (which is
satisfactory to the Agent (acting reasonably));
7. The Agent has received a certificate from an authorised officer of the
Borrower confirming that:
(a) the arrangements for the Acquisition are in compliance in all
material respects with applicable laws and that no provision of any
Acquisition Agreement has been amended, extended, supplemented,
waived or otherwise modified in a manner which
93
would reasonably be expected to be prejudicial in any material
respect to the interests of the Senior Finance Parties or the
Finance Parties under the Senior Finance Documents or the Finance
Documents respectively;
(b) the proposed utilisation of the Facility and, if being drawn at the
same time in order to fund the Acquisition, the Working Capital
Facility (as defined in the Senior Facilities Agreement) would not
render the Borrower or any other relevant borrower in breach of any
restriction on borrowings applicable to the Borrower or such other
borrower in its respective constitutional documents;
(c) immediately following the completion of the Acquisition, the Target
will have no Encumbrances other than Permitted Encumbrances; and
(d) immediately following the completion of the Acquisition, the Target
will have no Borrowed Money other than as permitted by the Senior
Facilities Agreement and this Agreement;
8. Prior to the Borrower or (if different) the Purchaser entering into any
commitment in respect of the Acquisition, the Agent has received originals
of each of the Reports duly addressed to (or capable of being relied upon
by) the Senior Finance Parties and the Finance Parties (in each case, in
form and substance satisfactory to the Agent (acting reasonably)).
9. The Agent has received pro forma financial statements in respect of the
Target, in each case prepared by a reputable accountancy firm, for (a) the
previous complete financial year (of 12 months) and (b) the most recently
completed 12 month period, showing that the Target (on a consolidated
basis, if it has subsidiaries) has had positive EBITDA during both that
financial year and 12 month period;
10. Immediately upon completion of the Acquisition, each of the entities
comprising the Target shall become a Charging Subsidiary and grant first
ranking (in favour of the Senior Finance Parties) and, on the same terms,
second ranking (in favour of the Finance Parties) security over the
ownership interests in and all of the assets of those entities, in each
case in form and substance satisfactory to the Agent (acting reasonably)
(together with legal opinions relating thereto in form and substance
satisfactory to the Agent (acting reasonably)), unless and to the extent
that (i) the execution, delivery and granting of such security would be
unavoidably unlawful or is prohibited by statute or beyond the corporate
power of the company or corporation concerned (and then only if such
corporate power cannot be modified or extended to allow such execution,
delivery and granting of security) or would be reasonably likely to result
in the directors of the company or corporation concerned incurring actual
personal liabilities or (ii) the Agent has determined in its reasonable
discretion that the costs (including with respect to mortgage transfer and
other taxes) of obtaining or administering such security would be
excessive in relation to the value of the security to be afforded thereby
or to the extent that obtaining such security would otherwise be
impracticable, provided that at all times:
(a) the pro forma Consolidated EBITDA of the Charging Group (for this
purpose measured as if references in the definition of Consolidated
EBITDA to the "Group" were references to the "Charging Group") is at
least 95 per cent. of the Consolidated EBITDA of the Group;
(b) the pro forma consolidated turnover of the Charging Group is at
least 95 per cent. or more of the consolidated turnover of the
Group; and
94
(c) the pro forma consolidated total assets of the Charging Group is at
least 95 per cent. or more of the consolidated total assets of the
Group,
in each case tested on a rolling 12 months basis as at the end of each
Quarter by reference to the most recent management accounts for such
Quarter delivered in accordance with clause 10.1(b)(ii) and the most
recent audited financial statements delivered in accordance with clause
10.1(b)(i), but assuming that the Target was acquired on the first day of
such 12 month period;
11. The Target does not have any material contingent liabilities save to the
extent indemnified by the Vendor concerned or insured against or otherwise
taken into account on a pound-for-pound basis, in each case to the
satisfaction of the Agent (acting reasonably);
12. The Acquisition shall be on arm's length terms and certified copies of the
Acquisition Agreements shall be provided to the Agent in form and
substance satisfactory to the Agent (acting reasonably);
13. At least 5 Banking Days prior to the Borrower or (if different) the
Purchaser entering into any commitment in respect of such Acquisition, the
Agent shall have received a revised version of the Financial Model, in
form and substance satisfactory to the Agent (acting reasonably),
reflecting the proposed Acquisition therein (as set out in the Acquisition
Agreements), which shows that:
(a) the Acquisition would not lead to there being less than 10 per cent.
headroom in respect of the Financial Covenants (other than the
Capital Expenditure covenant) due to be tested on, and in respect of
the Financial Covenant testing period ending on, the Financial
Covenant testing date immediately following completion of the
Acquisition;
(b) after consolidating the Target's accounts (consolidated accounts, if
it has Subsidiaries) with those of the Group in respect of the
previous twelve months on a pro forma basis, the Borrower would have
had not less than 10% headroom in respect of the Financial Covenants
(other than the Capital Expenditure covenant) due to be tested on,
and in respect of the Financial Covenant testing period ending on,
the Financial Covenant testing date immediately prior to completion
of the Acquisition;
(c) the Acquisition would not lead to there being less than
(pound)15,000,000 headroom in respect of the Working Capital
Facility (as defined in the Senior Facilities Agreement) at all
times during the following twelve months;
(d) none of the Financial Covenants will be breached during the Finance
Period; and
(e) no Event of Default will arise under clause 12.1(a) of the Senior
Facilities Agreement or clause 11.1(a),
accompanied by a certificate signed by the chief executive and one other
director of the Borrower confirming that on the date of such certificate
they believe that the assumptions upon which the forecasts and projections
in such revised Financial Model are based, taken as a whole, and those
forecasts and projections, are fair and reasonable and confirming that, in
making those assumptions and forming those forecasts and projections, the
Borrower has taken full and proper account of all contingent liabilities
(including, without limitation, contingent environmental liabilities)
relating to the assets to be acquired pursuant to the proposed
Acquisition;
95
14. The total amount of the Acquisition Consideration and the transaction
costs payable in respect of the Acquisition, when aggregated with those in
respect of previous Acquisitions, shall not exceed (pound)110,000,000 (or
its equivalent in relevant currencies) (excluding any amount funded by way
of Shareholder Injections in the Borrower funded by Xxxxx Muse or funds or
limited partnerships managed by it or other co-investors in Premier
Holdings); and
15. The Agent has received a revised version of the structure chart contained
in Schedule 7 showing the current structure of the Group and reflecting
the Acquisition as if such Acquisition had completed at the date of such
chart.
96
ANNEX 1
DIRECTOR'S CERTIFICATE
[NAME OF COMPANY]
To: X.X. Xxxxxx Europe Limited as Agent under the senior subordinated facility
agreement dated [ ] 2003 between among others, Premier Financing Limited as
Borrower, X. X. Xxxxxx plc as Arranger and JPMorgan Chase Bank as Underwriter
(the AGREEMENT).
I, being a director of [Name of Company], a private company with
limited liability incorporated and existing under the laws of England and Wales
(the COMPANY) hereby certify:
1. CONSTITUTIONAL DOCUMENTS
[The documents annexed to this certificate as annexure "A" constitute a
true, complete and up to date copy of:
(a) the certificate of incorporation;
(b) each certificate of incorporation on change of name of the Company
(if any);
(c) the certificate of re-registration as a public or private company
(if any); and
(d) the memorandum and articles of association of the Company containing
all modifications thereto and there are no other constitutional
documents of the Company.]
[The constitutional documents of the Company delivered to the Senior Agent
pursuant to paragraphs 1.1 and 1.2 of schedule 4 to the Supplemental
Agreement in connection with the Second Acquisitions remain a true,
complete and up to date copy of such documents and no changes have made
since the date of that delivery.]
2. BOARD RESOLUTIONS
(a) The documents annexed to this certificate as annexure "B" are true and
complete copies of the minutes of a meeting of the board of directors of
the Company duly convened and held on [ ]. The resolutions set out therein
were duly passed, are binding and have not been amended or revoked.
(b) The adoption of such resolutions, the entry into the Documents (as defined
in the board resolutions referred to above) and the consummation of the
transactions contemplated thereby are for the purposes of the corporate
benefit of the Company.
3. COMPANY STATUS
No administrator has been appointed in respect of the Company, no order
has been made or resolution passed for winding up the Company, no
application has been presented or documents filed with a court or
registrar for the appointment of an administrator in respect of
97
the Company, and no administrative receiver, receiver, or receiver and
manager has been appointed in respect of the Company.
4. NO BREACH OF BORROWINGS LIMIT
No borrowing limits or other restrictions (or lack of power) in relation
to the giving of guarantees or security or otherwise of the Company will
be exceeded as a result of the Company entering into the Documents, or
borrowing moneys under any Finance Document or Senior Finance Document, or
giving the guarantees and security thereunder or incurring or performing
the obligations expressed to be assumed by it thereunder.
5. AUTHORISED SIGNATORIES
Set out below are true signatures of those persons authorised by the
resolutions of the board of directors of the Company referred to in
paragraph 2 above to sign any of the Documents and to execute all such
undertakings, statements, certificates, notices, acknowledgements and
other documents as may be required to be done, signed and executed by or
on behalf of the Company in connection with the Documents and otherwise in
relation to or ancillary to the same:
NAME POSITION SIGNATURE
[ ] Director
[ ] Director
Terms defined in the Agreement shall bear the same meaning when used herein.
Signed: ........................................
DIRECTOR
Date: ........................................
98
SCHEDULE 4
CALCULATION OF ADDITIONAL COST
1. The Additional Cost is an addition to the interest rate to compensate
Banks for the cost of compliance with (a) the requirements of the Bank of
England and/or the Financial Services Authority (or, in either case, any
other authority which replaces all or any of its functions) or (b) the
requirements of the European Central Bank.
2. On the first day of each Interest Period (or as soon as possible
thereafter) the Agent shall calculate, as a percentage rate, a rate (the
ADDITIONAL COST RATE) for each Bank, in accordance with the paragraphs set
out below. The Additional Cost will be calculated by the Agent as a
weighted average of the Banks' Additional Cost Rates (weighted in
proportion to the percentage participation of each Bank in the relevant
Advance) and will be expressed as a percentage rate per annum.
3. The Additional Cost Rate for any Bank lending through a lending office in
a Participating Member State will be the percentage notified by that Bank
to the Agent. This percentage will be certified by that Bank in its notice
to the Agent to be its reasonable determination of the cost (expressed as
a percentage of that Bank's participation in all Advances made from that
lending office) of complying with the minimum reserve requirements of the
European Central Bank in respect of Advances made from that lending
office.
4. The Additional Cost Rate for any Bank lending from a lending office in the
United Kingdom will be calculated by the Agent as follows:
AB+C(B-D)+E x 0.01
------------------ per cent. per annum
100-(A+C)
Where:
A is the percentage of Eligible Liabilities (assuming these to be in
excess of any stated minimum) which that Bank from time to time
required to maintain as an interest free cash ratio deposit with the
Bank of England to comply with cash ratio requirements.
B is the percentage rate of interest (excluding the Margin and the
Additional Cost and, if the Advance is due and payable but unpaid,
the additional rate of interest specified in Clause 5.2) payable for
the relevant Interest Period for the Advance.
C is the percentage (if any) of Eligible Liabilities which that Bank
is required from time to time to maintain as interest bearing
Special Deposits with the Bank of England.
D is the percentage rate per annum payable by the Bank of England to
the Agent on interest bearing Special Deposits.
E is designed to compensate Banks for amounts payable under the Fees
Rules and is calculated by the Agent as being the average of the
most recent rates of charge supplied by the Reference Banks to the
Agent pursuant to paragraph 7 below and expressed in pounds per
(pound)1,000,000.
5. For the purposes of this Schedule 4:
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(a) ELIGIBLE LIABILITIES and SPECIAL DEPOSITS have the meanings given to
them from time to time under or pursuant to the Bank of England Act
1998 or (as may be appropriate) by the Bank of England;
(b) FEES RULES means the rules on periodic fees contained in the FSA
Supervision Manual or such other law or regulation as may be in
force from time to time in respect of the payment of fees for the
acceptance of deposits;
(c) FEE TARIFFS means the fee tariffs specified in the Fees Rules under
the activity group A.1 Deposit acceptors (ignoring any minimum fee
or zero rated fee required pursuant to the Fees Rules but taking
into account any applicable discount rate); and
(d) TARIFF BASE has the meaning given to it in, and will be calculated
in accordance with, the Fees Rules.
6. In applying the above formulae, A, B, C and D will be included in the
formulae as percentages (i.e. five per cent. will be included in the
formula as 5 and not as 0.05). A negative result obtained by subtracting D
from B shall be taken as zero. The resulting figures shall be rounded to
four decimal places.
7. If requested by the Agent, each Reference Bank shall, as soon as
practicable after publication by the Financial Services Authority, supply
to the Agent the rate of charge payable by that Reference Bank to the
Financial Services Authority pursuant to the Fees Rules in respect of the
relevant financial year of the Financial Services Authority (calculated
for this purpose by that Reference Bank as being the average of the Fee
Tariffs applicable to that Reference Bank for that financial year) and
expressed in pounds per (pound)1,000,000 of the Tariff Base of that
Reference Bank.
8. Each Bank shall supply any information required by the Agent for the
purpose of calculating its Additional Cost Rate. In particular, but
without limitation, each Bank shall supply the following information on or
prior to the date on which it becomes a Bank:
(a) the jurisdiction of its lending office; and
(b) any other information that the Agent may reasonably require for such
purpose.
Each Bank shall promptly notify the Agent of any change to the information
provided by it pursuant to this paragraph.
9. The percentages of each Bank for the purpose of A and C above and the
rates of charge of each Reference Bank for the purpose of E above shall be
determined by the Agent based upon the information supplied to it pursuant
to paragraphs 7 and 8 above and on the assumption that, unless a Bank
notifies the Agent to the contrary, each Bank's obligations in relation to
cash ratio deposits and Special Deposits are the same as those of a
typical bank from its jurisdiction of incorporation with a lending office
in the same jurisdiction as its lending office.
10. The Agent shall have no liability to any person if such determination
results in an Additional Cost Rate which over or under compensates any
Bank and shall be entitled to assume that the information provided by any
Bank or Reference Bank pursuant to paragraphs 3, 7 and 8 above is true and
correct in all respects.
100
11. The Agent shall distribute the additional amounts received as a result of
the Additional Cost to the Banks on the basis of the Additional Cost Rate
for each Bank based on the information provided by each Bank and each
Reference Bank pursuant to paragraphs 3, 7 and 8 above.
12. Any determination by the Agent pursuant to this Schedule 4 in relation to
a formula, the Additional Cost, an Additional Cost Rate or any amount
payable to a Bank shall, in the absence of manifest error, be conclusive
and binding on all the parties to this Agreement.
13. The Agent may from time to time, after consultation with the Borrower and
the Banks, determine and notify all the Banks and the Borrower of any
amendments which are required to be made to this Schedule 4 in order to
comply with any change in law, regulation or any requirements from time to
time imposed by the Bank of England, the Financial Services Authority or
the European Central Bank (or, in any case, any other authority which
replaces all or any of its functions) and any such determination shall, in
the absence of manifest error, be conclusive and binding on all the
parties to this Agreement.
101
SCHEDULE 5
FORM OF SUBSTITUTION CERTIFICATE
PART 1
(SINGLE TRANSFERS)
NB 1. Banks are advised not to employ Substitution Certificates or
otherwise to assign, novate or transfer interests in this
Agreement without first ensuring that the transaction complies
with all applicable laws and regulations, including the
Financial Services and Markets Xxx 0000 and regulations made
thereunder.
2. It is expected that Banks will enter into separate
arrangements dealing with the monies to be paid to the
Existing Bank by the Substitute in consideration of the
novation (e.g. principal, accrued interest, fees and any
mismatched funding adjustment). Unless the Transfer Effective
Date is a rollover date, mismatches of parties' funding may
arise. This Certificate does not deal with these issues, nor
does it deal with any interim risk participation the Existing
Bank may grant to the Substitute pending the Transfer
Effective Date.
To: X.X. Xxxxxx Europe Limited on its own behalf, as agent for the Banks
and on behalf of the Arranger, the Security Agent, the Underwriter,
the Borrower and each other party to the Agreement mentioned below
and the Intercreditor Agreement.
Attention: Xxx Xxxxxxxx, Agency Loans Department [DATE]
SUBSTITUTION CERTIFICATE
This Substitution Certificate relates to a Senior Subordinated Secured Credit
Facility Agreement (the AGREEMENT) dated [_] 2003 between, among others, Premier
Financing Limited as Borrower, X.X. Xxxxxx plc as Arranger, X.X. Xxxxxx Europe
Limited as Agent and Security Agent and the persons whose respective names and
addresses are set out in Schedule 1 thereto as Banks. Terms defined in the
Agreement shall have the same meaning in this Substitution Certificate.
1. [Existing Bank] (the EXISTING BANK) (a) confirms the accuracy of the
summary of its participation in the Agreement set out in the schedule
below; and (b) requests [Substitute Bank] (the SUBSTITUTE) to accept by
way of novation the portion of such participation specified in the
schedule hereto by counter-signing and delivering this Substitution
Certificate to the Agent at its address for the service of notices
specified in the Agreement.
2. The Substitute hereby requests the Agent (on behalf of itself, the other
Finance Parties, the Borrower and all other parties to the Agreement) to
accept this Substitution Certificate as being delivered to the Agent
pursuant to and for the purposes of clause 15.3 of the Agreement and
clause 20.4 of the Intercreditor Agreement so as to take effect in
accordance with the terms thereof on [date of transfer] (the TRANSFER
EFFECTIVE DATE) or on such later date as may be determined in accordance
with the terms thereof.
3. The Agent (on behalf of itself, the other Finance Parties, the Borrower
and all other parties to the Agreement) confirms the novation effected by
this Substitution Certificate pursuant to and for the purposes of clause
15.3 of the Agreement and clause 20.4 of the Intercreditor Agreement so as
to take effect in accordance with the terms thereof.
102
4. The Substitute confirms:
(a) that it has received copies of the Finance Documents and all other
documentation and information required by it in connection with the
transactions contemplated by this Substitution Certificate;
(b) that it has not relied upon any statement, opinion, forecast or
other representation or warranty made by the Existing Bank, the
Arranger, the Underwriter, the Security Agent or the Agent to induce
it to enter into this Substitution Certificate;
(c) that it has made and will continue to make, without reliance on the
Existing Bank or any other Finance Party, and based on such
documents as it considers appropriate, its own appraisal of the
creditworthiness of the Borrower and the Group and its own
independent investigation of the financial condition, prospects and
affairs of the Acquisition Parties, the Borrower and the Group in
connection with the making and continuation of the Facility under
the Agreement and the other Finance Documents;
(d) that neither the Existing Bank nor any other Finance Party shall at
any time be deemed to have had or have a duty or responsibility,
either historically, initially or on a continuing basis, to provide
the Substitute with any credit or other information with respect to
the Borrower or any other member of the Group or the Acquisition
Parties, whether coming into its possession before the making of any
Advance or at any time or times thereafter, other than (in the case
of the Agent) as provided in clauses 16.3(a) and 16.5(a) of the
Agreement;
(e) that it has made and will continue to make its own assessment of the
legality, validity, enforceability and sufficiency of the Agreement,
the Security Documents, each other Finance Document and this
Substitution Certificate and has not relied and will not rely on the
Existing Bank, the Arranger, the Security Agent or the Agent or any
statements made by any of them in that respect;
(f) that, accordingly, none of the Existing Bank, the Arranger, the
Underwriter, the Security Agent and the Agent shall make any
representations or warranties in respect of, or shall have any
liability or responsibility to the Substitute in respect of, any of
the foregoing matters or any other matter referred to in clause 16.7
of the Agreement;
(g) that it is [not] a Qualifying Bank; and
(h) that it has signed an appropriate confidentiality undertaking issued
by the Existing Bank.
5. Execution of this Substitution Certificate by the Substitute constitutes
its representation to the Existing Bank and all other parties to the
Agreement and the Intercreditor Agreement that it has power to become
party to the Agreement as a Bank and the Intercreditor Agreement as a
Senior Subordinated Bank on the terms herein and therein set out and has
taken all necessary steps to authorise execution and delivery of this
Substitution Certificate.
6. The Substitute hereby undertakes to the Existing Bank, the Finance
Parties, the Borrower and each of the other parties to the Agreement and
the Intercreditor Agreement that it will perform in accordance with their
respective terms all those obligations which by the terms of the Agreement
and the Intercreditor Agreement will be assumed by it after acceptance of
this Substitution Certificate by the Agent.
103
7. Without limiting the above paragraphs, nothing in this Substitution
Certificate obliges the Existing Bank to:
(a) accept any re-transfer from the Substitute of any of the rights,
benefits and/or obligations hereby transferred; or
(b) support any losses incurred by the Substitute by reason of any
non-performance by the Borrower or any other party to the Agreement
or any of the Security Documents or any document relating thereto of
any of its obligations under the same.
8. This Substitution Certificate and the rights and obligations of the
parties hereunder shall be governed by and construed in accordance with
English law.
9. This Substitution Certificate may be executed in any number of
counterparts and by different parties on separate counterparts, each of
which when so executed and delivered shall be an original, but all
counterparts shall together constitute one and the same instrument.
NOTE: THIS SUBSTITUTION CERTIFICATE IS NOT A SECURITY, BOND, NOTE, DEBENTURE,
INVESTMENT OR SIMILAR INSTRUMENT.
AS WITNESS the hands of the authorised signatories of the parties hereto on the
date appearing below.
104
THE SCHEDULE
THE FACILITY
Commitment (pound) Portion Transferred (pound)
Contribution (pound) Next Interest Payment Date Portion Transferred (pound)
ADMINISTRATIVE DETAILS OF SUBSTITUTE
Lending Office:
Account for payments:
Telephone:
Telefax:
Attention:
105
[Existing Bank] [Substitute]
By: .................................. By:..................................
Date: Date:
The Agent
By:
.......................................
on its own behalf and on behalf of the other Finance Parties, the Borrower and
all other parties to the Agreement and the Intercreditor Agreement.
106
PART 2
(GLOBAL FORM)
NB 1. Banks are advised not to employ Substitution Certificates or
otherwise to assign, novate or transfer interests in this Agreement
without first ensuring that the transaction complies with all
applicable laws and regulations, including the Financial Services
and Markets Xxx 0000 and regulations made thereunder.
2. It is expected that Banks will enter into separate arrangements
dealing with the monies to be paid to the Existing Banks by the
Substitutes in consideration of the novation (e.g. principal,
accrued interest, fees and any mismatched funding adjustment).
Unless the Transfer Effective Date is a rollover date, mismatches of
parties' funding may arise. This Certificate does not deal with
these issues, nor does it deal with any interim risk participation
the Existing Banks may grant to the Substitutes pending the Transfer
Effective Date.
To: X.X. Xxxxxx Europe Limited on its own behalf, as agent for the Banks and
on behalf of the Arranger, the Security Agent, the Underwriter, the
Borrower and each other party to the Agreement mentioned below and the
Intercreditor Agreement.
Attention: Xxx Xxxxxxxx, Agency Loans Department [DATE]
SUBSTITUTION CERTIFICATE
This Substitution Certificate relates to a Senior Subordinated Secured Credit
Facility Agreement (the AGREEMENT) dated [_] 2003 between among others, Premier
Financing Limited as Borrower, X.X. Xxxxxx plc as Arranger, X.X. Xxxxxx Europe
Limited as Agent and Security Agent and the persons whose respective names and
addresses are set out in Schedule 1 thereto as Banks. Terms defined in the
Agreement shall have the same meaning in this Substitution Certificate.
1. Each of the persons set out as Existing Banks in part A of the schedule
below (the EXISTING BANKS) (a) confirms the accuracy of the summary of its
participation in the Agreement set out in the schedule and (b) requests
each of the persons set out as Substitute Banks in Part C of the schedule
(the SUBSTITUTES) to accept by way of novation the portion of such
participation specified (or calculated as specified) in the schedule by
counter-signing and delivering this Substitution Certificate to the Agent
at its address for the service of notices specified in the Agreement.
2. Each of the Substitutes hereby requests the Agent (on behalf of itself,
the other Finance Parties, the Borrower and all other parties to the
Agreement) to accept this Substitution Certificate as being delivered to
the Agent pursuant to and for the purposes of clause 15.3 of the Agreement
and clause 20.4 of the Intercreditor Agreement, so as to take effect in
accordance with the terms thereof on [date of transfer] (the TRANSFER
EFFECTIVE DATE) or on such later date as may be determined in accordance
with the terms thereof.
3. The Agent (on behalf of itself, the other Finance Parties, the Borrower
and all other parties to the Agreement) confirms each of the novations
effected by this Substitution Certificate pursuant to and for the purposes
of clause 16.3 of the Agreement and clause 20.4 of the Intercreditor
Agreement, so as to take effect in accordance with the respective terms
thereof.
4. Each of the Substitutes confirms:
107
(a) that it has received copies of the Finance Documents and all other
documentation and information required by it in connection with the
transactions contemplated by this Substitution Certificate;
(b) that it has not relied upon any statement, opinion, forecast or
other representation (including, without limitation, anything
contained in the Information Memoranda) or warranty made by the
Existing Banks, the Arranger, the Underwriter, the Security Agent or
the Agent to induce it to enter into this Substitution Certificate;
(c) that it has made and will continue to make, without reliance on the
Existing Banks or any other Finance Party, and based on such
documents as it considers appropriate, its own appraisal of the
creditworthiness of the Borrower and the Group and its own
independent investigation of the financial condition, prospects and
affairs of the Borrower and the Group in connection with the making
and continuation of the Facility under the Agreement and the other
Finance Documents;
(d) that neither the Existing Banks nor any other Finance Party shall at
any time be deemed to have had or have a duty or responsibility,
either historically, initially or on a continuing basis, to provide
the Substitute with any credit or other information with respect to
the Borrower or any other member of the Group or the Acquisition
Parties whether coming into its possession before the making of any
Advance or at any time or times thereafter, other than (in the case
of the Agent) as provided in clauses 16.3(a) and 16.5(a) of the
Agreement;
(e) that it has made and will continue to make its own assessment of the
legality, validity, enforceability and sufficiency of the Agreement,
the Security Documents, each other Finance Document and this
Substitution Certificate and has not relied and will not rely on the
Existing Banks, the Arranger, the Security Agent or the Agent or any
statements made by any of them in that respect;
(f) that, accordingly, none of the Existing Banks, the Arranger, the
Security Agent and the Agent shall make any representations or
warranties in respect of, or shall have any liability or
responsibility to the Substitute in respect of, any of the foregoing
matters or any other matter referred to in clause 16.6 of the
Agreement;
(g) that it is [not] a Qualifying Bank; and [NOTE: SPECIFY FOR EACH
SUBSTITUTE INDIVIDUALLY IF APPROPRIATE]
(h) that it has signed and agrees to be bound by and comply with an
appropriate confidentiality undertaking issued by the Existing
Banks.
5. Execution of this Substitution Certificate by each of the Substitutes
constitutes its representation to each of the Existing Banks and all other
parties to the Agreement and the Intercreditor Agreement that it has power
to become party to the Agreement as a Bank and the Intercreditor Agreement
as a Senior Subordinated Bank on the terms herein and therein set out and
has taken all necessary steps to authorise execution and delivery of this
Substitution Certificate.
6. Each of the Substitutes hereby undertakes to the Existing Banks, the
Finance Parties, the Borrower and each of the other parties to the
Agreement and the Intercreditor Agreement that it will perform in
accordance with its terms all those obligations which by the terms of the
Agreement and the Intercreditor Agreement will be assumed by it after
acceptance of this Substitution Certificate by the Agent.
108
7. Without limiting the above paragraphs, nothing in this Substitution
Certificate obliges any of the Existing Banks to:
(a) accept any re-transfer from any Substitute of any of the rights,
benefits and/or obligations hereby transferred; or
(b) support any losses incurred by any Substitute by reason of any
non-performance by any Obligor or any other party to the Agreement
or any of the Security Documents or any document relating thereto of
any of its obligations under the same.
8. Each of the Substitutes that executes this Substitution Certificate agrees
to be bound by this Substitution Certificate notwithstanding that any
other person (a NON-SIGNING PARTY) that intended to execute this
Substitution Certificate as a Substitute may not do so or may not be
effectually bound. In such circumstances, the amount of each Existing
Bank's Commitment or Contribution that is transferred pursuant to this
Substitution Certificate (as set out in part B of the schedule) shall be
reduced pro-rata as between the Existing Banks by the amount which was
intended to be transferred to the Non-signing Party.
9. This Substitution Certificate and the rights and obligations of the
parties hereunder shall be governed by and construed in accordance with
English law.
NOTE: THIS SUBSTITUTION CERTIFICATE IS NOT A SECURITY, BOND, NOTE, DEBENTURE,
INVESTMENT OR SIMILAR INSTRUMENT.
AS WITNESS the hands of the authorised signatories of the parties hereto on the
date appearing below.
109
THE SCHEDULE
PART A
EXISTING BANKS' COMMITMENTS AND CONTRIBUTIONS BEING EACH OF THEIR PARTICIPATIONS
IN THE AGREEMENT AS AT THE DATE OF THIS SUBSTITUTION CERTIFICATE
[Set out each Existing Bank's participation in the Facility]
PART B
PORTION TRANSFERRED
[Set out the portion of each Existing Bank's Commitments and Contributions
transferred]
The portion of an Existing Bank's Commitments and Contributions to be
transferred to a particular Substitute is [as set out below/calculated as
follows:]
[set out details or method of calculation]
PART C
[Set out names of Substitute Banks and the aggregate amounts of the Commitments
and Contributions being transferred to them]
[Insert execution particulars and each Substitute's administration details]
[Each of the Existing Banks] [Each of the Substitutes]
By: ........... By: .........
Date: Date:
The Agent
By:
..........
on its own behalf
and on behalf of the other Finance Parties, the Borrower and all other parties
to the Agreement and the Intercreditor Agreement.
110
SCHEDULE 6
THE GROUP AS AT THE DATE OF THIS AGREEMENT
The Borrower (company number 3713662)
ORIGINAL CHARGING SUBSIDIARIES
ENGLISH
Xxxxxx Group Limited (company number 1721453)
C & TH (Calne) Limited (company number 183952)
Xxxxxxx Xxxxxxx Limited (company number 2081705)
Country Farms Limited (company number 305182)
Curf Farms (Chatteris) Limited (company number 1461987)
FMC (Meat) Limited (company number 671705)
Formwood Group (UK) Limited (company number 2046126)
Formwood Group Limited (company number 2175715)
H (Barnstaple) Limited (company number 2047347)
HL Foods Limited (company number 2560855)
Hillsdown Ambient Foods Group Limited (company number 1220754)
Hillsdown Europe Limited (company number 2662027)
Hillsdown International Limited (company number 1943509)
Hillsdown Investments Limited (company number 1871848)
Hillsdown UK Limited (company number 1638448)
Xxxxxx Limited (company number 1778744)
Horberry & Xxxxx Limited (company number 1428538)
Lamberde Properties Limited (company number 2277876)
MBM Mosspak Limited (company number 753373)
MBM Produce Limited (company number 426939)
Northwest Prime Investments Limited (company number 2641825)
Premier Ambient Products (UK) Limited (company number 4427006)
Premier Financing Limited (company number 3716362)
Premier International Foods UK Limited (company number 314272)
Xxxx, Manchett & Till Limited (company number 1746676)
Rugby Securities Limited (company number 1869278)
000
XXXXXXXX
Xxxxxxxx Limited (company number 99843)
Premier Brands Limited (company number 96055)
Ridgways Limited (company number 105097)
Xxxxxx Xxxxxx & Sons (Est. 1849) Limited (company number 20563)
DUTCH
Hillsdown Holland B.V.
Hillsdown International B.V .
Jonker Fris B.V.
FRENCH
Hillsdown Holdings France S.A.S.
Xxxxxxx Xxxx X.X .
Premier Brands France S.A .
OTHER SUBSIDIARIES
ENGLISH
Anglo European Food Group Limited (company number 1044222)
Branstons Limited (company number 1081647)
Curf Growers Limited (company number IP2250612)
FMC Limited (company number 671701)
FMC Products Limited (company number 549467)
Glengettie Tea Company Limited (company number 311427)
Xxx Xxxxxx & Sons Limited (company number 1059522)
Harvest Agriculture Limited (company number 615823)
Haywards Foods Limited (company number 2627084)
HF Pension Scheme Trustees Limited (company number 2375077)
Hillsdown Holdings Pension Trustees Limited (company number 2735596)
HMTF Poultry Limited (company number 3808291)
Honeysuckle Foods Limited (company number 3096231)
X.X. Xxxxxxxx Limited (company number 623022)
Kardomah Limited (company number 4059)
Xxxxx and Xxxxxx Limited (company number 444678)
Meriden Tea Company Limited (company number 0444592)
North Devon Pension Scheme Trustees Limited (company number 2375072)
Premier Beverages Limited (company number 1676914)
Crosse & Xxxxxxxxx Limited (company number 587165)
Premier Brands Pensions Trustees Limited (company number 2084542)
Sarson's Limited (company number 274999)
Premier Preserves Limited (company number 1128631)
Premier Teas Limited (company number 2092180)
Pyke Holdings Limited (company number 101992)
Stratford-Upon-Avon Foods Limited (company number 4143852)
Xxxxx International Limited (company number 477546)
The London Fruit & Herb Company Limited (company number 01648788)
The London Herb & Spice Co. Limited (company number 1183027)
The Specialist Soup Company Limited (company number 24168)
112
Typhoo Tea Limited (company number 371003)
Xxx Xxxxxx Limited (company number 387108)
Xxx Xxxxxx Holdings Limited (company number 301131)
X. Xxxxxx (London and Xxxxxx) Limited (company number 523736)
Winsford Bacon Company Limited (company number 855389)
Welgro Limited (company number 02313775)
GERMAN
Diamond Food Lebensmittelhandel GmbH
Formwood Deckensysteme GmbH *
ISLE OF MAN
Citadel Insurance Company Limited (company number 30246)
SCOTTISH
Premier Brands Exports Limited (company number 96054)
Premier Brands Overseas Limited (company number 96053)
Premier Food Limited (company number 105098)
Somniculous No.1 Limited (company number 78060)
Somniculous No.2 Limited (company number 79694)
DUTCH
Formwood Ceilings BV
Formwood Holdings BV *
Luxrite BV *
Hillsdown International Finance B.V.
SPAIN
MBM Spain S.A.
FRENCH
Hillsdown Paris SA
Favois Industrie SA
SCI du Verger
SWITZERLAND
Confitech AG
* denotes companies in liquidation or dissolution proceedings at the date of
this Agreement.
113
SCHEDULE 7
STRUCTURE CHART
[STRUCTURE CHART]
114
[HILLSDOWN INTERNATIONAL LIMITED CHART]
All shareholdings are 100%
unless stated otherwise
115
SCHEDULE 8
FINANCIAL UNDERTAKINGS AND ACCOUNTING TERMS
1. FINANCIAL UNDERTAKINGS:
The Borrower undertakes with each of the Finance Parties that, throughout
the Finance Period, it will ensure that:
1.1 Total Net Interest Cover:
The ratio of Consolidated EBITDA to Consolidated Net Interest Charges in
respect of each period set out in column A and measured at the last day of
the last month in such period shall be not less than the ratio set out in
column B:
A B
PERIOD OF 12 MONTHS ENDING ON:
31 December 2003 2.00:1
31 March 2004 2.00:1
30 June 2004 2.25:1
30 September 2004 2.25:1
31 December 2004 2.40:1
31 March 2005 2.40:1
30 June 2005 2.50:1
30 September 2005 2.50:1
31 December 2005 2.60:1
31 March 2006 2.60:1
30 June 2006 2.75:1
30 September 2006 2.75:1
31 December 2006 3.00:1
31 March 2007 3.00:1
30 June 2007 3.20:1
30 September 2007 3.20:1
31 December 2007 3.50:1
31 March 2008 3.50:1
30 June 2008 3.75:1
30 September 2008 3.75:1
and thereafter (on a rolling 12 month basis, 3.75:1
at the end of each Quarter)
1.2 Consolidated Fixed Charge Cover Ratio:
The Consolidated Fixed Charge Cover Ratio in respect of each period set
out in column A and measured at the last day of the last month in such
period shall not be less than the ratio set out in column B:
116
A B
PERIOD OF 12 MONTHS ENDING ON:
31 December 2003 1.00:1
and thereafter (on a rolling 12 month basis, 1.00:1
on each 30 June and 31 December)
1.3 Total Net Debt to Consolidated EBITDA:
The ratio of the Total Net Debt as at the end of, to Consolidated EBITDA
in respect of, each period set out in column A and measured at the last
day of the last month in such period shall not be greater than the ratio
set out in column B:
A B
PERIOD OF 12 MONTHS ENDING ON:
31 December 2003 4.65:1
31 March 2004 4.30:1
30 June 2004 4.30:1
30 September 2004 3.90:1
31 December 2004 3.90:1
31 March 2005 3.65:1
30 June 2005 3.65:1
30 September 2005 3.30:1
31 December 2005 3.30:1
31 March 2006 3.00:1
30 June 2006
30 September 2006 3.00:1
and thereafter (on a rolling 12 month basis, 3.00:1
at the end of each Quarter)
1.4 Maximum Capital Expenditure:
It will not, and will procure that no other member of the Group will,
undertake any, or enter into any financial commitments with respect to,
Capital Expenditure in any financial year if the total Capital Expenditure
of all members of the Group in such financial year would exceed the
Budgeted Capital Expenditure for such financial year but so that, during
the Finance Period, the Borrower can incur additional Capital Expenditure
which is not otherwise permitted under this paragraph 1.4 not exceeding,
in aggregate, (pound)10,000,000 (or its equivalent at the date of
expenditure).
2. ACCOUNTING TERMS:
In clause 6.7 and paragraph 1 of this Schedule 8 accounting terms are used
and shall be construed in accordance with the Appropriate Accounting
Principles but so that:
ACQUISITION COSTS means all fees, costs, expenses and Taxes incurred by
any member of the Group in connection with the negotiation, preparation,
execution, notarisation and registration of the Transaction Documents, the
Finance Documents and the High Yield Bonds Documents and otherwise in
connection with the making of an Acquisition;
117
CAPITALISED LEASE OBLIGATIONS means, with respect to any person, any
rental obligation (including, without limitation, any hire purchase
payment obligation) which, under the Appropriate Accounting Principles,
would be required to be treated as a Finance Lease or otherwise
capitalised on the books of such person in accordance with such
principles;
CONSOLIDATED CURRENT ASSETS means, at any relevant time, the aggregate of
the current assets of the Group at such time but excluding cash in hand or
at bank and the amount of fixed asset debtors calculated on a consolidated
basis which would fall to be included as current assets in a consolidated
balance sheet of the Group drawn up at such time in accordance with the
Appropriate Accounting Principles;
CONSOLIDATED CURRENT LIABILITIES means, at any relevant time, the
aggregate of the current liabilities of the Group at such time but
excluding the amount of fixed asset creditors, Consolidated Net Interest
Charges, Borrowed Money, Taxes, dividends and debit balances on bank
accounts calculated on a consolidated basis which would fall to be
included as current liabilities in a consolidated balance sheet of the
Group drawn up at such time in accordance with the Appropriate Accounting
Principles;
CONSOLIDATED EBITDA means, in respect of any period, the consolidated
trading profits, but before:
(a) exceptional items and extraordinary items;
(b) profits and losses on disposals of capital assets;
(c) deduction of Acquisition Costs;
(d) amortisation of goodwill and other intangible assets;
(e) depreciation;
(f) Consolidated Net Interest Charges and Taxes; and
(g) any non-cash charges and non-cash income,
of the Group for such period and before taking into account the applicable
share of any profit (except to the extent received in cash) or loss of any
joint venture or associate and after deducting (to the extent otherwise
included) profits (or adding back losses) attributable to minority
interests in Group members, provided that for the purposes of clause
10.2(f) and the determination of compliance with the Financial Covenants
in paragraphs 1.1 and 1.3 of this Schedule 8 Consolidated EBITDA shall
include the trading profits (adjusted as set out above in this definition)
of (or attributable to) any business or assets that have been acquired by
the Group pursuant to a Permitted Acquisition, calculated on the same
basis as trading profits for the Group for such period as if such
acquisition had occurred on the first day of the relevant period for which
Consolidated EBITDA is being calculated;
CONSOLIDATED EXCESS CASH FLOW means, in respect of any financial year, the
amount of the Consolidated EBITDA for such financial year after (without
double counting) adding:
(a) any decrease in Consolidated Net Working Capital (excluding
amortisation of upfront fees and expenses in relation to the Senior
Facilities and the Senior Facility);
(b) any receipts of cash exceptional and extraordinary items;
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(c) any refund received on account of Taxes paid; and
(d) cash dividends and other similar cash payments received in respect
of investments;
and after deducting:
(a) Consolidated Net Interest Charges;
(b) all repayments and prepayments (other than mandatory prepayments
made pursuant to clauses 6.4, 6.6, 10.6(b) or 10.6(f)(xii) or the
equivalent provisions of the Senior Facilities Agreement) of the
Advances, the Term Advances (as defined in the Senior Facilities
Agreement) (and under the Working Capital Facility (as defined in
the Senior Facilities Agreement) to the extent cancelled) made
during such financial year (on the basis that for this purpose
crediting moneys to a Cash Collateral Account (or a cash collateral
account maintained for the purposes of the Senior Facilities
Agreement) pending prepayment will be deemed to be an actual
prepayment);
(c) the principal amount of scheduled rental payments of Capitalised
Lease Obligations during such financial year (whether or not
actually paid);
(d) Net Proceeds which are not yet unapplied Net Proceeds (as defined in
clause 6.6(ii));
(e) payments in respect of Capital Expenditure excluding the principal
amount of Indebtedness incurred in connection with such expenditure;
(f) any increase in Consolidated Net Working Capital (excluding
amortisation of upfront fees and expenses in relation to the Senior
Facilities and the Facility);
(g) any payments of cash exceptional and extraordinary items;
(h) Taxes paid;
(i) the amount of carry over of Budgeted Capital Expenditure into the
next financial year;
(j) the aggregate net increase (or adding back the aggregate net
decrease) in all loans or credit made in cash pursuant to clause
10.6(i)(iv) or (ix);
(k) the aggregate amount of Permitted Acquisitions made which were
funded as referred to in clause 10.6(s)(ii)(D);
(l) the aggregate amount of Equity Permitted Payments and Intercompany
Loan Permitted Payments made; and
(m) the aggregate net increase (or adding back the aggregate net
decrease) in all deposits required to be made in connection with
Derivatives Transactions permitted under clause 10.5.
The amount so produced shall be calculated (showing the calculations on
which it is based) in respect of each relevant financial year by the
Borrower who shall instruct the Auditors to deliver to the Agent a
statement as to the amount of the Consolidated Excess Cash Flow confirming
that in all material respects the calculation has been made in accordance
with the audited consolidated financial statements of the Group for such
year and the provisions of this
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paragraph 2 of Schedule 8, such Auditors' statement to be delivered to the
Agent together with such audited consolidated financial statements in
accordance with clause 10.1(b)(i);
CONSOLIDATED FIXED CHARGES means, in respect of any period, the aggregate
of:
(a) Consolidated Net Interest Charges in respect of such period; and
(b) the total amount of scheduled repayments of the Term Advances (as
defined in the Senior Facilities Agreement);
CONSOLIDATED FIXED CHARGE COVER RATIO means, in respect of any period, the
ratio of:
(a) Consolidated EBITDA plus cash exceptional and extraordinary items
received in such period less (i) the amount (if any) by which
Capital Expenditure during such period exceeds the amount of any
carry over of Budgeted Capital Expenditure from the previous
financial year (and so that if the amount of any such carry over is
greater than the amount of Capital Expenditure this sub-paragraph
(i) shall be zero) and (ii) any amount payable (or reasonably likely
to be payable) in respect of Taxes during such period (or in respect
of any prior period (to the extent not previously taken into account
in determining the Consolidated Fixed Charge Cover Ratio)) and (iii)
cash exceptional and extraordinary items paid during such period; to
(b) Consolidated Fixed Charges for such period;
CONSOLIDATED NET INTEREST CHARGES means, in respect of a period, the
aggregate (calculated on a consolidated basis) of all continuing regular
or periodic costs, charges and expenses incurred in effecting, servicing
or maintaining any Borrowed Money of the Group (other than the
Subordinated Shareholder Loans) in respect of such period (but not agency
or arrangement fees) including:
(a) cash interest, guarantee, fronting and ancillary facility fees and
commitment fees on any form of such Borrowed Money accrued or paid
as an obligation of any member of the Group during the period,
including the interest element of Finance Leases;
(b) the consideration given by the Group during the period by way of
discount in connection with such Borrowed Money by way of acceptance
credit, xxxx discounting or other like arrangement accrued or, as
the case may be, paid in respect of such Borrowed Money; and
(c) net payments in relation to interest rate hedging arrangements after
deduction of net income in relation to interest rate hedging
arrangements;
less the amount of interest accrued or, as the case may be, paid on cash
balances and Cash Equivalents of the Group during such period, provided
that for the purposes of clause 10.2(f) and the determination of
compliance with the Financial Covenants in paragraphs 1.1 and 1.3 of this
Schedule 8 Consolidated Net Interest Charges shall include all the costs,
charges and expenses referred to above (less the deductions referred to
above) incurred in effecting, servicing or maintaining any Borrowed Money
of, or any Borrowed Money incurred by the Group for the purposes of the
acquisition (including the refinancing of any Borrowed Money) of, any
business or assets that have been acquired by the Group pursuant to a
Permitted Acquisition, calculated on the same basis as such costs, charges
and expenses (and deductions) are calculated by the Group for such period
as if such acquisition had occurred on the first day of the relevant
period for which Consolidated Net Interest Charges are being calculated;
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CONSOLIDATED NET WORKING CAPITAL means, at any time, Consolidated Current
Assets at such time less Consolidated Current Liabilities at such time;
and
TOTAL NET DEBT means the principal element of Indebtedness incurred by the
Group in respect of all Borrowed Money (including, without limitation,
pursuant to the Senior Facilities Agreement, this Agreement or the
Intercompany Loan Agreement but excluding the Subordinated Shareholder
Loans and interest accruing on the Premier Holdings/Borrower Loan
Agreement) net of cash and Cash Equivalents;
Provided that no amount shall be added or deducted more than once in any
definition.
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SCHEDULE 9
FORM OF ANNUAL AUDITOR'S REPORT
To: X.X. Xxxxxx Europe Limited
000 Xxxxxx Xxxx
Xxxxxx XX0X 0XX
Attention: Xxx Xxxxxxxx, Agency Loans Department [Date]
Dear Sirs
SECURED CREDIT FACILITY AGREEMENT DATED [_] 2003 (AS FROM TIME TO TIME FURTHER
AMENDED, VARIED, EXTENDED, RESTATED OR REPLACED (THE AGREEMENT)
We refer to the Agreement and deliver this Certificate in respect of the
financial year ended [ ] pursuant to clause 10.1(b)(iv) thereof. Terms defined
in the Agreement shall have the same meaning when used in this Certificate.
1. We confirm that on or as of the last day of the financial year ending [ ],
as determined by reference to the audited accounts of the Group in respect
of such financial year:
(a) The ratio of Consolidated EBITDA to Consolidated Net Interest
Charges for such financial year was [ ];
(b) The Consolidated Fixed Charge Cover Ratio for such financial year
was [ ];
(c) The ratio of Total Net Debt to Consolidated EBITDA for such
financial year was [ ]; and
(d) Capital Expenditure during such financial year was [ ].
Based on the above, we confirm that the Borrower was in compliance with the
Financial Covenants [or, if not, indicate the extent of any non-compliance] as
at the end of such financial year.
2. We confirm that, as determined by reference to the audited accounts of the
Group in respect of such financial year, on or as of the last day of the
financial year ending [ ]:
(a) the pro forma Consolidated EBITDA of the Charging Group (measured as
if references in the definition of Consolidated EBITDA to the GROUP
were references to the CHARGING GROUP) constitutes [95 per cent. or
more] of the Consolidated EBITDA of the Group;
(b) the pro forma consolidated turnover of the member of the Charging
Group constitutes [95 per cent. or more] of the consolidated
turnover of the Group; and
(c) the pro forma consolidated total assets of the members of the
Charging Group constitute [95 per cent. or more] of the consolidated
total assets of the Group,
in each case tested on a rolling 12 months basis and therefore that the
Borrower was in compliance with the undertaking set out in clause
10.2(f)(ii) as at [ ].
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3. We confirm that, as determined by reference to the audited accounts of the
Group in respect of the financial year ending [ ], on or as of the last
day of such financial year, the members of the Group which were Material
Entities within the meanings of sub-paragraph (c)(i), (ii), (iii) or (iv)
of the definition of MATERIAL ENTITY were: [ ]
For and on behalf of
[Name of Auditors]
..........................................................
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SCHEDULE 10
XXXXX MUSE'S FEES
1. Fees due and payable pursuant a monitoring and oversight agreement dated
10 August 1999 by and between the Borrower and Xxxxx, Muse & Co. Partners,
L.P., a Texas limited partnership (HMCO) (in such form, the MONITORING
AGREEMENT), in the amount of an annual monitoring fee of (pound)1,170,000
which monitoring fee shall be adjusted on January 1 of each calendar year
to an annual amount equal to (A) the budgeted consolidated annual net
sales of the Borrower and its Subsidiaries for the then current fiscal
year, multiplied by (B) 0.1%; provided however, that the monitoring fee
shall never be less than (pound)1,170,000.
2. Pro rata share of Allocable Expenditures reimbursed by the Borrower
pursuant to that certain Monitoring Agreement. ALLOCABLE EXPENDITURES
being defined as all variable, fixed and other costs, expenses,
expenditures, charges or obligations (including without limitation letters
of credit, deposits, etc.) that are related to assets utilized, services
provided, or programs administered by HMCo or its affiliates in connection
with the performance by HMCo of financial oversight and monitoring
services on behalf of the Borrower and other participating acquired
companies, including without limitation corporate airplanes, charitable
contributions, retainers for lobbyists and other professionals, and
premiums and finance charges for director and officer insurance maintained
for representatives of HMCo or its affiliates.
3. Fees due and payable pursuant a financial advisory agreement dated 10
August 1999 between the Borrower and HMCo (in such form, the ADVISORY
AGREEMENT) constituting a financial advisor fee for HMCo in the amount of
(pound)9,633,000.
4. Fees due and payable pursuant to the Advisory Agreement constituting
compensation for HMCo's financial advisory, investment banking and other
similar services rendered in connection with any Subsequent Transaction in
the amount of a cash fee equal to 1.5% of the total value of the
Subsequent Transaction, including, without limitation, the aggregate
amount of the funds required to complete the Subsequent Transaction
(excluding any fees payable pursuant to the Advisory Agreement with
respect to Subsequent Transactions) including the amount of the
indebtedness, preferred stock or similar items assumed (or remaining
outstanding). SUBSEQUENT TRANSACTION means, collectively, any future
proposals for a tender offer, acquisition, sale, merger, exchange, offer,
recapitalization, restructuring or other similar transaction directly or
indirectly involving the Borrower, or any of its Subsidiaries, and any
other person or entity.
5. Reimbursement of reasonable disbursements and out-of-pocket expenses
(including fees and disbursements of counsel) incurred by HMCo pursuant to
the Advisory Agreement.
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SIGNATORIES
THE BORROWER
SIGNED for and on behalf of )
PREMIER FINANCING LIMITED ) XXXX XXXXX
by: ) XXXX XXXXXX
(with authority to the Agent to incorporate
into the original document)
THE ARRANGER
SIGNED for and on behalf of )
X.X. XXXXXX PLC ) XXXX XXXXXX
by: )
THE AGENT
SIGNED for and on behalf of )
X.X. XXXXXX EUROPE LIMITED. ) XXXXX XXXX
by: )
THE UNDERWRITER
SIGNED for and on behalf of )
JPMORGAN CHASE BANK ) XXXXX XXXXX
by: )
THE SECURITY AGENT
SIGNED for and on behalf of )
X.X.XXXXXX EUROPE LIMITED ) XXXXX XXXX
by: )
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