Exhibit 10.103
DATED DECEMBER 30, 2005
XXXX XXXXXX (UK) LIMITED (1)
and
BARCLAYS BANK PLC (2)
---------------------------------------------------------------
FRAMEWORK AGREEMENT
relating to 6,000,000 Pounds Sterling multi-currency facility
---------------------------------------------------------------
XXXXXXXX
0 Xxxxxxxxxx Xxxxxx Xxxxxxx Xxxxxxx Xxxxxx XX0X 0XX DX 136546 Bishopsgate 2
TELEPHONE x00 (0)000 000 0000 FAX x00 (0)000 000 0000
OFFICES AND ASSOCIATED OFFICES Aosta Berlin Birmingham Brussels Hong Kong Leeds
London Madrid Manchester Milan Munich Paris Rome Turin
WEBSITE xxx.xxxxxxxx.xxx
REFERENCE: BAR.962-0228
CONTENTS
1 INTERPRETATION......................................................................................1
2 AMOUNT.............................................................................................12
3 CONDITIONS PRECEDENT...............................................................................12
4 EXISTING DEBTS.....................................................................................13
5 PURCHASE...........................................................................................14
6 ACCOUNTS...........................................................................................16
7 COLLECTION AND ADMINISTRATION......................................................................16
8 NON-PAYMENT OBLIGATIONS............................................................................18
9 FEES...............................................................................................18
10 PAYMENTS...........................................................................................19
11 GENERAL REPRESENTATIONS............................................................................19
12 DEBT SPECIFIC WARRANTIES...........................................................................20
13 CREDIT APPROVAL UNDERTAKINGS.......................................................................21
14 GENERAL UNDERTAKINGS...............................................................................23
15 TERMINATION........................................................................................25
16 DEFAULT............................................................................................25
17 LIMITED RECOURSE...................................................................................27
18 INDEMNITY..........................................................................................27
19 INCREASED COSTS....................................................................................28
20 SET-OFF............................................................................................28
21 POWER OF ATTORNEY..................................................................................28
22 ASSIGNMENTS........................................................................................29
23 WAIVERS AND REMEDIES CUMULATIVE....................................................................29
24 MISCELLANEOUS......................................................................................29
25 NOTICES............................................................................................30
26 COUNTERPARTS.......................................................................................30
i
27 JURISDICTION.......................................................................................30
28 GOVERNING LAW......................................................................................30
Schedule 1 FORM OF NOTICE OF ASSIGNMENT AND TRUST...........................................................33
Schedule 2 FORM OF DEBT NOTIFICATION NOTICE.................................................................34
Schedule 3 OPERATIONAL UNDERTAKINGS.........................................................................35
Schedule 4 COMPUTERISED FACILITIES..........................................................................37
ANNEXE 1 ...................................................................................................41
ii
DATE OF FRAMEWORK AGREEMENT 2006
PARTIES
(1) XXXX XXXXXX (UK) LIMITED (registered with the number 01459528) whose
registered office is at Xxxxxxx Xxxxx, Xxxxxxxxxx Xxxxxxxx Xxxx, Xxxxx
Xxxxx Xxxx, Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx XX00 0XX (the "COMPANY");
and
(2) BARCLAYS BANK PLC acting through its Sales Financing division at
Xxxxxxxxx Xxxxx, Xxxxxxxxx Xxx, Xxxxxxxxxxx, Xxxxxxxxx XX00 0XX
("BARCLAYS").
INTRODUCTION
A The Company is a trading entity creating Debts in the ordinary course
of its business.
B Due to the specific working capital requirements of the Company,
certain Debts shall be assigned by the Company to Barclays pursuant to
this Agreement.
C This Agreement provides the framework for the sale of Debts by the
Company to Barclays.
D It is intended that where a Debtor does not make payment of a Debt (in
whole or in part), the Company shall demand from the relevant Debtor
payment of the Debt in full or the Shortfall. It is also intended that
if the Company breaches its obligations to make demand of the relevant
Debtor, the Company shall pay an amount equal to the amount that should
have been so demanded.
E The entry into of this Agreement is for the Company's general corporate
purposes
IT IS AGREED THAT:
1 INTERPRETATION
1.1 DEFINITIONS
In this Agreement:
"ADMINISTRATOR"
means any person appointed under Schedule B1 of the Insolvency Xxx 0000
to manage a person or partnership's affairs, business and property.
"ADVERTISING CONTRIBUTIONS"
means sums payable to the Company by Debtors in consideration of
financial contributions made by the Company in relation to advertising
and other similar expenditure.
"AFFILIATE"
means a Subsidiary or a holding company (as defined in section 736 of
the Companies Act 1985) of a person or any other Subsidiary of that
holding company.
1
"AGED EXISTING DEBTS"
means Existing Debts which were due for payment by the relevant Debtors
on or before 1 July 2005 (and which are therefore not insured by the
Policy).
"AGEING PERIOD"
means 150 days from the last day of the month in which the relevant
Invoice was raised.
"APPLICABLE RATE"
means for the purposes of calculating Discount, in relation to Approved
Currencies, the prevailing base rate of Barclays Bank PLC as varied
from time to time.
"APPROVED CURRENCIES"
means Sterling and US Dollars, and "APPROVED CURRENCY" shall be
construed accordingly.
"APPROVED DEBT"
means a Debt:
(a) in relation to which the Company is not in breach of any
warranty, representation, covenant or undertaking given in
relation to such Debt under this Agreement; and
(b) which does not cause any Limit to be exceeded; and
(c) which is subject to and falling within a Credit Limit; and
(d) which is subject to and falling within a Barclays' Credit
Limit.
"APPROVED JURISDICTIONS"
means for the time being, the member states of the European Union (as
it shall comprise from time to time), Hong Kong, the USA and any other
country Barclays may approve from time to time and "APPROVED
JURISDICTIONS" shall be construed accordingly.
"BANKING DAY"
means a day (other than a Saturday or a Sunday) on which banks are open
for business in London.
"BARCLAYS' CREDIT LIMIT"
means a credit limit referable to a Debtor, which shall until further
notice by Barclays to the Company, mirror the Credit Limit (if any)
referable to such Debtor.
"BREAKAGE COSTS"
means the sum payable in accordance with clause 15(e) (Termination).
2
"COMPUTERISED FACILITIES"
has the meaning given to it in Schedule 4 (Computerised Facilities).
"COLLECTION DATE"
means, in relation to a Debt, the date on which the amount owed by the
Debtor to the Company is received by the Company.
"COMMENCEMENT DATE"
means the date of this Agreement.
"CONTRA ACCOUNTS"
means the actual and potential offset value of any amount owed by the
Company to a Debtor against the amount owed by the Debtor to the
Company as part of a reciprocal trading relationship as determined by
Barclays (acting reasonably) from the month end debtors and creditors
aged analyses.
"CONTRACT"
means an arrangement between a Debtor and the Company under which the
Debtor is obliged to pay for goods sold or services supplied by the
Company.
"CREDIT LIMIT"
means, in relation to a Debtor, the subsisting credit limit (if any)
allowed or issued by the Insurer under the Policy.
"CREDIT NOTE"
means a credit note raised and issued by the Company to a Debtor which
reduces the amount of Debt due under an Invoice.
"CREDIT RISK"
means the risk of financial loss detailed in and covered by the Policy
as a consequence of the failure of a Debtor to pay an Approved Debt
wholly or in part but excluding any amount representing any First Loss
or any VAT in relation to a Debt.
"DEBT"
means the indebtedness of a Debtor to the Company under a Contract
(including VAT and the right to payment of any interest or finance
charges and all other rights as an unpaid vendor under the relevant
Contract or at law including the right to receive, xxx for, recover and
obtain payment, and the goods delivered under such Contract).
3
"DEBIT NOTE"
means a debit note raised and issued by a Debtor to the Company which
reduces the amount of Debt due under an Invoice (including, for the
avoidance of doubt, debit notes issued by Harrods Limited or any
Affiliate of Harrods Limited (company number 00030209)).
"DEBT NOTIFICATION NOTICE"
means a notice substantially in the form of Schedule 2 (Form of Debt
Notification Notice).
"DEBTOR"
means a trade debtor of the Company under a Contract.
"DEBTOR ACCOUNT"
means the bookkeeping account maintained by Barclays in relation to
this Agreement as referred to in clause 6.2 (Debtor Account).
"DEBTOR ACCOUNT BALANCE"
means the balance of the Debtor Account from time to time.
"DEDUCTION"
means the aggregate of:
(a) the aggregate value (from time to time) of Credit Notes and
Debit Notes;
(b) (if the aggregate value of all outstanding Approved Debts at
any time of a single Debtor is equal to or greater than 20 per
cent. of all outstanding Approved Debts at such time (the
"DEBTOR LIMIT")), the amount of any Approved Debt owed by that
Debtor in excess of the Debtor Limit;
(c) (if the aggregate value of all outstanding Eligible Export
Debts at any time exceeds more than 20% of the aggregate value
of all outstanding Approved Debts at such time (the "EXPORT
LIMIT")), the value of any Export Debt owed by any Export
Debtor in excess of the Export Limit; and
(d) (if the aggregate value of all Excluded Export Debts at any
time exceeds more than 20% of the aggregate value of all
outstanding Debts at such time (the "EXCLUDED EXPORT DEBT
LIMIT")), the value of any Excluded Export Debt owed by any
Excluded Export Debtor in excess of the Excluded Export Debt
Limit.
"DEFAULT"
means an Event of Default or an event which, with the giving of notice,
lapse of time, determination of materiality or fulfilment of any other
applicable condition (or any combination of the foregoing), would in
accordance with clause 16.1 (Default) constitute an Event of Default.
4
"DEFERRED ELEMENT"
has the meaning given to it in clause 5.3(b) (Early Payment Percentage
and Deferred Element)
"DISCOUNT"
means 1.50 per cent above the Applicable Rate from time to time.
"DISCOUNT PERIOD"
means 120 days after the end of the month in which the relevant Debtor
becomes Insolvent or any Insolvency Proceedings occur in relation to
the relevant Debtor.
"DISPUTES"
means, from time to time and at any time, the aggregate value of all
and any Debts (in whole or in part) in relation to which the relevant
Debtor has indicated to the Company that it will withhold or refuse to
make payment for any reason.
"EARLY PAYMENT PERCENTAGE"
means, subject to the terms of this Agreement, 75 per cent of the
Notified Value of Approved Debts.
"EVENT OF DEFAULT"
means an event specified as such in clause 16.1 (Default).
"EXCLUDED EXPORT DEBT"
means a Debt created under a Contract the Invoice in relation to which
is addressed to a Debtor outside an Approved Jurisdiction and/or
expressed in a currency which is not an Approved Currency.
"EXISTING DEBT"
means a Debt existing at the Commencement Date.
"EXPORT DEBT"
means a Debt created under a Contract governed by English law the
Invoice in relation to which is addressed to a Debtor in an Approved
Jurisdiction and expressed in an Approved Currency and "EXPORT DEBTOR"
shall be construed accordingly.
"FACILITY"
means the limited recourse confidential invoice discounting facility
provided under this Agreement.
5
"FACILITY ARRANGEMENT FEE"
means 30,000 Pounds Sterling plus VAT.
"FACILITY LIMIT"
means 6,000,000 Pounds Sterling (or its currency equivalent).
"FINANCE DOCUMENTS"
means this Agreement, the Letter of Comfort, the Policy Assignment and
all and any ancillary documentation associated therewith or connected
thereto or designated by Barclays as a Finance Document.
"FIRST LOSS"
means the deductible as referred to or defined in the Policy or any
similar first loss of deduction established by the Insurer.
"FUTURE DEBT"
means a Debt created after the Commencement Date.
"INSOLVENCY PROCEEDINGS"
means, in relation to any person (and for the purposes of this
definition "person" shall include a partnership):
(a) any distress, execution, or sequestration is exercised against
the assets of that person; or
(b) any petition or proposal is presented or a meeting is convened
with a view to a composition, assignment or arrangement with
any creditors of that person; or
(c) a meeting of that person is convened for the purpose of
considering any resolution for (or to petition for) its
winding-up or for its administration or any such resolution is
passed; or
(d) a notice of intention to appoint an Administrator being given
by any person or an Administrator being appointed; or
(e) any person presents a petition for the administration or
winding-up of a person (not being a petition which can be
demonstrated to the reasonable satisfaction of Barclays to be
frivolous, vexatious or an abuse of process of the court or is
validly discharged within 10 Banking Days); or
(f) an order for the winding-up or administration or bankruptcy of
that person is made; or
(g) a moratorium pursuant to Section 1A and Schedule A1 Insolvency
Xxx 0000 or pursuant to paragraph 1A of Schedule 1 of the
Insolvent Partnerships Order 1994 is established; or
6
(h) any petition or proposal is presented or a meeting is convened
with a view to the rehabilitation, administration,
receivership, custodianship, liquidation, winding-up or
dissolution of that person (other than for the purpose of an
amalgamation or reconstruction whilst solvent), or any other
insolvency proceedings involving that person (not being
proceedings which such person can demonstrate to the
reasonable satisfaction of Barclays is frivolous, vexatious or
an abuse of process).
A person (and for the purposes of this definition "person" shall
include a partnership) is "INSOLVENT" if:
(a) it is, or is deemed for the purposes of any law to be, unable
to pay its debts or to be insolvent, or admits its inability
to pay its debts as they fall due; or
(b) it ceases to trade or notifies Barclays of its intention to
cease to trade or Barclays otherwise becomes aware of such
intention through a source reasonably considered to be
reliable; or
(c) any step (including petition, proposal, giving notice,
convening a meeting or applying to court) is taken with a view
to:
(i) a composition or scheme of arrangement (including a
company voluntary arrangement) with any of its
creditors;
(ii) its administration, winding-up, liquidation or
dissolution;
(iii) its receivership or bankruptcy; or
(iv) anything analogous to sub-paragraphs (i) - (iii)
above; or
(d) an Administrator is appointed over it; or
(e) it is insolvent within the terms of the Insolvency Xxx 0000.
"INSURER"
means Euler Hermes (UK) Plc or any other insurer which shall co-insure,
joint insure, or act (with Barclays' prior written consent) as a
substitute or replacement insurer from time to time.
"INVOICE"
means the original sales invoice in respect of a Debt issued by the
Company to a Debtor.
"LA SALLE"
means La Salle Business Credit/La Salle Bank N.A. of 000 X Xx Xxxxx Xx,
Xxxxx 000, Xxxxxxx XX 00000.
"LETTER OF COMFORT"
means the letter of comfort dated on or around the date hereof provided
by the Parent in
7
favour of Barclays in respect of the obligations arising under this
Agreement.
"LIMITS"
means, from time to time, the Facility Limit, the Debtor Limit, the
Export Limit, the Excluded Export Limit the Permitted Dilution
Percentage and the Permitted Ageing Percentage.
"MATERIAL ADVERSE CHANGE"
means a material adverse change to (a) the business, assets, financial
condition or operation of the Company and its Affiliates, or (b) the
ability of the Company to perform the obligations arising under this
Agreement or (c) the ability of the Company and/or the Parent to
perform their respective obligations arising under the Finance
Documents.
"MATURITY DATE"
means, in respect of each Debt, the due date for payment of that Debt
as specified in its Invoice.
"MINIMUM PERIOD"
means a period expiring 12 calendar months after the Commencement Date.
"NOTICE OF ASSIGNMENT AND TRUST"
means a notice substantially in the form of Schedule 1 (Form of Notice
of Assignment and Trust).
"NOTIFIED"
means in relation to a Debt, the inclusion of that Debt in the Sales
Ledger or within a Debt Notification Notice.
"NOTIFIED VALUE"
means the value of a Debt described in the Sales Ledger or within a
Debt Notification Notice.
"PARENT"
means Xxxx Xxxxxx and Company, Inc. (a US corporation incorporated
under the laws of the State of New Jersey, USA).
"PARTY"
means a party to this Agreement.
"PAYMENT ACCOUNT"
means the bookkeeping account maintained by Barclays in relation to
this Agreement as referred to in clause 6.1 (Payment Account).
8
"PAYMENT ACCOUNT BALANCE"
means the balance of the Payment Account from time to time.
"PAYMENT DATE"
means the date:
(a) of receipt by Barclays of the Sales Ledger; or
(b) one Banking Day after receipt by Barclays of a Debt
Notification Notice from the Company.
"PAYMENT DEFAULT"
means the failure by the Company to comply with payment obligations to
Barclays more particularly described by clause 16.1(i) (Default).
"POLICY"
means the Euler Hermes credit insurance policy relating to the Debts
from time to time created by the Company, dated on or around the
Commencement Date or such replacement credit insurance policy as
Barclays may agree in writing to designate as a Policy from time to
time.
"POLICY ASSIGNMENT"
means the assignment dated on or around the Commencement Date in favour
of Barclays of all and any of the Company's rights, interest and
benefit arising under or in connection with the Policy and/or the
noting of Barclays as sole loss payee under the Policy.
"PURCHASE"
means a purchase or purported purchase by Barclays from the Company of
a Debt pursuant to this Agreement.
"RESERVES"
means, without limitation, any event, circumstance, agreement or right,
the effect of which shall restrict the amount which may be payable to
the Company on account of the Purchase Price of Debts which include
(from time to time) the aggregate balance (without double counting) of
Advertising Contributions, Contra Accounts, Credit Notes, Debit Notes,
Excluded Export Debts, Retrospective Rebates, Disputes, Aged Existing
Debts and settlement discounts.
"RETROSPECTIVE REBATES"
means the amount of any turnover or volume related discounts agreed
with Debtors which are accrued for pending settlement by the issue of a
future Credit Note or payment.
9
"SALES LEDGER"
means the fully reconciled sales ledger of the Company (clearly
identifying all outstanding Invoices, Credit Notes and Debit Notes in
an open item format with all cash and other credit terms allocated to
the appropriate Invoices) in the form annexed at Annexe 1.
"SECURITY INTEREST"
means any mortgage, pledge, lien, charge, hypothecation, trust, or
security interest or any other agreement or arrangement having the
effect of conferring security.
"SERVICE FEE"
means 1,750 Pounds Sterling plus VAT per month.
"SHORTFALL"
means in relation to a Debt, any part (not being the whole) of the
Invoice Value of a Debt not received or recovered by Barclays for that
Debt.
"STERLING" OR "POUND STERLING"
means the lawful currency of the United Kingdom.
"SUBSIDIARY"
means, in relation to a person, an entity of which that person has
direct or indirect control or owns directly or indirectly more than 50
per cent. of the voting capital or similar right of ownership and
"control" for this purpose means the power to direct management and the
policies of an entity whether through ownership of voting capital, by
contract or otherwise.
"TERMINATION DATE"
means the date on which this Agreement is terminated under clause 15
(Termination) or clause 16 (Default).
"TRUST ACCOUNTS"
means any bank accounts in the Company's name, mandated in favour of or
otherwise controlled by Barclays and/or declared in trust for Barclays,
and which in each case, the Company has no right, title, interest in or
to any balance standing from time to time to the credit thereof.
"UNAPPROVED DEBT"
means a Debt which Barclays designates as not being, or no longer being
an Approved Debt, or in respect of which the Company is in breach of
any provision of this Agreement.
"US FACILITY AGREEMENT"
means the agreement between La Salle and the Parent pursuant to which
La Salle have
10
agreed to provide the Parent with certain facilities, in the form
subsisting at the Commencement Date (a certified copy of which will be
provided to Barclays for information purposes in accordance with clause
3.2 (Conditions Precedent and Condition Subsequent)).
"US FINANCIAL COVENANTS"
means any financial covenants contained in the US Facility Agreement
(and if La Salle agrees to waive, amend, vary, substitute or replace
such financial conditions, any such waiver, amendment, variation,
substitution or replacement shall only binding for the purposes of this
Agreement to the extent that Barclays agree in writing from time to
time to be bound by it).
"VAT"
means value added tax.
1.2 CONSTRUCTION
(a) In this Agreement, unless the contrary intention appears, a
reference to:
(i) an "AUTHORISATION" includes an authorisation,
consent, approval, resolution, licence, exemption,
filing or registration;
a "REGULATION" includes any regulation, rule,
official directive, request or guideline (whether or
not having the force of law) of any governmental,
inter-governmental or supranational body, agency,
department or regulatory, self-regulatory or other
authority or organisation; and
a "CHANGE OF CONTROL" means when a person or group of
persons acting in concert becomes the beneficial
owner of 50 per cent. of shares in the entire issued
share capital of any company carrying the right to
exercise more than 50 per cent. of the votes at a
general meeting of that company;
(ii) a clause or a Schedule is a reference to a clause of
or a schedule to this Agreement;
(iii) a person includes its successors and assigns;
(iv) a document is a reference to that document as
amended, varied, restated, replaced or substituted;
(v) a time of day is a reference to London time;
(vi) words denoting the singular only shall include the
plural and vice versa;
(vii) the date of this Agreement is to be construed as the
date on which the Company signs this Agreement; and
(viii) references to any statute, law, decree or regulation
shall be deemed to be references to such statute,
law, decree or regulation as re-enacted, amended,
extended, or replaced from time to time;
11
(b) The index to and the headings in this Agreement are for
convenience only and are to be ignored in construing this
Agreement.
1.3 CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
Unless expressly provided to the contrary in this Agreement, a person
who is not a party to this Agreement may not enforce any of its terms
under the Contracts (Rights of Third Parties) Xxx 0000 and
notwithstanding any term of this Agreement, the consent of any third
party is not required for any variation (including any release or
compromise of any liability) or termination of this Agreement.
2 AMOUNT
2.1 By executing and delivering this Agreement, the Company assigns to
Barclays all Existing Debts and all Future Debts. Ownership of Existing
Debts shall vest absolutely in Barclays on the date of this Agreement
and Future Debts shall vest absolutely in Barclays automatically upon
the creation of such Debts without any further act on the part of
either the Company or Barclays.
2.2 Subject to the terms of this Agreement, the amount paid for Approved
Debts by Barclays shall be limited to a maximum aggregate amount
outstanding at any one time which results in:
(a) the Payment Account Balance being no greater than the Early
Payment Percentage of the Approved Debts on the Debtor Account
Balance; and
(b) the Payment Account Balance being no greater than the Facility
Limit.
3 CONDITIONS PRECEDENT AND CONDITION SUBSEQUENT
3.1 Barclays will make no payment in relation to Approved Debts pursuant to
the Facility unless and until Barclays confirms to the Company that the
following has been received or addressed in form and substance
satisfactory to Barclays:-
(a) a copy of the resolution of the board of directors of the
Company approving the terms of, and the transactions
contemplated by, this Agreement;
(b) a specimen of the signature of each person authorised to sign
this Agreement on behalf of the Company and to sign and/or
send all documents and notices to be signed and/or sent by the
Company under this Agreement;
(c) evidence that no Security Interest affects the Debts or a
waiver from any person entitled to any Security Interest in a
form and substance satisfactory to Barclays;
(d) payment in full of the Facility Arrangement Fee specified in
clause 9(a) (Fees) to such account as Barclays may nominate,
together with payment in full of all legal fees incurred by
Barclays in connection with the preparation and negotiation of
the Finance Documents all other ancillary documentation
associated or connected thereto;
(e) evidence of Barclays' reasonable satisfaction with updated
original survey findings dated 15th and 16th December 2005 of
the Sales Ledger;
12
(f) evidence of all proof of delivery information and
documentation;
(g) evidence of 1,000,000 Pounds Sterling product liability
insurance subsisting with an insurer acceptable to Barclays;
(h) evidence of Barclays' reasonable satisfaction that the Company
can produce acceptable Invoices and Credit Note daybooks to
corroborate Total Uploads and the form of all and any
information required to be delivered under Schedule 3
(Operational Undertakings);
(i) the entry into of the Finance Documents;
(j) evidence of the approval and consent of Xxxx Xxxxxx and
Company, Inc. to the entry into of the Finance Documents;
(k) evidence of the approval and consent of La Salle to the entry
into of the Finance Documents;
(l) evidence of the entry into of the Policy together with
evidence that Barclays have been named as joint insured or
first loss payee (to be decided by Barclays) in relation to
the Policy;
(m) confirmation of which suppliers are paid by the Company by
letter of credit; and
(n) any other document, assurance or opinion that Barclays may
reasonably require.
3.2 The Company agrees to provide to Barclays a copy of the US Facility
Agreement, certified as a true and complete copy of that agreement by
the Parent's US legal counsel within 7 Banking Days of the Commencement
Date.
4 EXISTING DEBTS
4.1 Barclays will:
(a) make no payment in relation to Existing Debts pursuant to the
Facility unless:
(i) Barclays has received the Sales Ledger in
substantially the form set out in Annexe 1 (Sales
Ledger) of this Agreement;
(ii) each Existing Debt is denominated in Approved
Currency and is due and payable to the Company in the
United Kingdom within 60 days of the date of payment
of the relevant Invoice;
(iii) the purchase by Barclays of the Existing Debts would
not result in a breach of clause 2.2 (Amount);
(iv) no Default has occurred or will result from the
purchase by Barclays of the Existing Debts; and
(v) the Company provide in relation to the Existing
Debts:-
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(A) a summary debtors aged analysis in a format
reasonably agreed by Barclays (acting
reasonably);
(B) if previously requested by Barclays, copies
of the Invoices evidencing the Existing
Debts; and
(C) any other document Barclays may reasonably
require; and
(b) not make a payment against an Existing Debt unless it is an
Approved Debt.
4.2 The Company will thereafter deliver a Debt Notification Notice to
Barclays in relation to Future Debts no less frequently than once per
week, or as otherwise agreed with Barclays confirming that:
(a) all Future Debts created during the preceding week; and
(b) a summary debtors aged analysis in a format agreed by Barclays
(acting reasonably);
have been Notified to Barclays electronically (in accordance with the
provisions of Schedule 4 (Computerised Facilities) or as agreed between
Barclays and the Company from time to time) so that Barclays are
satisfied that the Company has Notified Barclays of all Future Debts
PROVIDED ALWAYS that Barclays may request hard copy sales ledgers
detailing Future Debts and/or summary debtors aged analysis in a format
agreed by Barclays (acting reasonably) at any time.
4.3 If previously requested by Barclays, the Company agrees to send to
Barclays copies of Invoices evidencing the Future Debts along with the
Debt Notification Notice.
5 PURCHASE
5.1 PURCHASE PRICE
(a) Subject to compliance with the terms of clause 3 (Conditions
Precedent) and clause 4.1 (Existing Debts), Barclays shall pay
an amount to the Company in respect of the Purchase Price of
Existing Debts which are Approved Debts, in accordance with
clause 5.3 (Early Payment Percentage and Deferred Element).
(b) Subject to the terms of this Agreement and compliance with the
terms of clause 4.2 (Existing Debts), following receipt of a
Debt Notification Notice, Barclays shall, at the Company's
request, pay an amount to the Company in respect of the
Purchase Price of Future Debts which are Approved Debts and
which the Company refers to in the Debt Notification Notice,
in accordance with clause 5.3 (Early Payment Percentage and
Deferred Element).
5.2 PURCHASE PRICE
The Purchase Price of each Debt shall be the amount received by
Barclays towards the discharge of the Debt, less in each case Discount
(accrued prior to the expiry of the Discount Period) and any Deduction,
set-off, or claim later made by a Debtor or discount, abatement, claim
or allowance to which such Debtor may be entitled, and any other
deduction permitted or provided for by the terms of this Agreement and
shall be payable
14
by Barclays on the Collection Date ("PURCHASE PRICE").
5.3 EARLY PAYMENT PERCENTAGE AND DEFERRED ELEMENT
(a) Subject to the terms of this Agreement, Barclays shall, in
relation to Approved Debts, make a payment of the Purchase
Price to the Company on each Payment Date, equal to the Early
Payment Percentage of the Notified Value (inclusive of VAT) of
such Approved Debts (or such lesser amount as may be agreed
with the Company) ("EARLY PAYMENT") provided that the making of
any such Early Payment shall not cause any Limit to be
exceeded, and taking into account the aggregate value from time
to time of Reserves.
(b) Subject to the terms of this Agreement, Barclays shall pay to
the Company on each Collection Date, any outstanding balance
of the Purchase Price of Approved Debts, after accounting for
accrued Discount charged or to be charged and the amount of
any Early Payment made in respect of such Debts (the "DEFERRED
ELEMENT") and provided that the payment of any such Deferred
Element shall not cause any Limit to be exceeded.
(c) The payment of the Early Payment and/or the Deferred Element
to the Company by Barclays pursuant to clause 5 (Purchase)
shall constitute a good discharge by Barclays of such monies
so paid.
(d) The Company shall immediately repay to Barclays upon Barclays'
request, the amount of any payment made in excess of any
Limit, or any Early Payment in relation to any Approved Debt
where such Approved Debt becomes an Unapproved Debt.
5.4 ADJUSTMENT OF EARLY PAYMENT PERCENTAGE
(a) If, in any rolling three month period, the aggregate value of
all Credit Notes issued by the Company exceeds 10 per cent. of
the aggregate Notified Value of all Debts Notified to Barclays
during that period (the "PERMITTED DILUTION PERCENTAGE"),
Barclays shall reduce the Early Payment Percentage by 1
percentage point for each increase of 1 per cent. above of the
Permitted Dilution Percentage.
(b) If, on the last day of any calendar month, the aggregate
Notified Value of outstanding Debts which exceed the Ageing
Period exceeds 10 per cent. of the aggregate Notified Value of
all Debts Notified to Barclays and outstanding on that day
(the "PERMITTED AGEING PERCENTAGE"), Barclays shall reduce the
Early Payment Percentage by 1 percentage point for every 1 per
cent. above the Permitted Ageing Percentage.
(c) In the event of any unsatisfactory audit and/or the
non-compliance by the Company with the terms of the Policy
and/or the breach of the US Financial Covenants, Barclays may
reduce the Early Payment Percentage to a level which, in their
discretion, reflects the increased risk associated with such
circumstances.
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6 ACCOUNTS
6.1 PAYMENT ACCOUNT
(a) Barclays shall, on each Payment Date, debit an amount equal to
an Early Payment to the Payment Account.
(b) Barclays shall, on each day a payment of the Deferred Element
is made, debit an amount equal to such payment to the Payment
Account.
(c) Discount in respect of any Debt purchased by Barclays shall be
calculated on the debit balance of the Payment Account from
day to day and shall be maintained as a separate accrual. Such
accrual shall (subject to the Discount Period not having
expired) be debited to the Payment Account on the last Banking
Day of each calendar month.
(d) Discount in respect of each Early Payment shall cease in
respect of any period after the end of the Discount Period.
(e) On the date Barclays receives from the Debtor or the Insurer
(as the case may be) cleared funds in payment of any Debt,
Barclays shall credit an amount equal to the amount received
to the Payment Account.
(f) Any reasonably and properly incurred fees, costs and expenses
(including legal fees and expenses) due and payable under this
Agreement shall be debited to the Payment Account.
6.2 DEBTOR ACCOUNT
(a) Barclays shall, on each Payment Date, credit an amount equal
to the Invoice Value of the Debts to the Debtor Account.
(b) On the date that Barclays is notified of any reduction in the
value of any Debt purchased by Barclays (whether as a result
of payment or otherwise) Barclays shall debit an amount equal
to the reduction in the value of the Debt notified to the
Debtor Account.
(c) On the date Barclays receives from the Debtor or the Insurer
(as the case may be) cleared funds in payment of any Debt,
Barclays shall debit an amount equal to the amount received to
the Debtor Account.
7 COLLECTION AND ADMINISTRATION
(a) The Company shall, as agent and trustee of Barclays, continue
to collect at its own expense all Debts purchased by Barclays
under this Agreement with at least the same standard of
diligence in relation to the collection of such Debts as
undertaken by it prior to the date of this Agreement.
(b) The Company shall, in relation to any amount received or
recovered by it in respect of a Debt, comply in all respects
with this clause 7 (Collection and
16
Administration).
(c) Barclays may at any time communicate with Debtors in the name
of the Company for the purposes of Debt verification and the
Company shall provide Barclays with such assistance as
Barclays may require for such purpose.
(d) The Company shall use all reasonable endeavours to ensure that
Debtors pay (or continue to pay, as the case may be) all Debts
directly to the Trust Accounts and no other bank account.
(e) Without prejudice to clause 7(d) above, in the event that the
Company receives or recovers any cash, cheque, xxxx of
exchange or other remittances or instruments in or towards
payment of a Debt, it shall immediately upon receipt, pay into
the appropriate Trust Account (or such other account as
Barclays may nominate) such identical cash, cheque, xxxx of
exchange or other remittances or instruments in or towards
payment of a Debt, including remittances and other instruments
made payable to the Company, endorsing the same where
necessary without deduction, withholding, debit, retention,
set-off or counterclaim.
(f) The Company confirms and agrees that the proceeds of Debts are
the absolute property of Barclays and pending any transfer in
accordance with clause 7(e) above (and without prejudice to
the provisions of that clause), shall now and hereafter be
held on trust absolutely for Barclays and kept separate from
the Company's own monies.
(g) The Company shall procure that the Trust Accounts and any
other bank accounts maintained pursuant to or for the purposes
of the receipt of monies from Debtors are re-characterised (as
the case may be) and maintained as, and are compliant at all
times with, the definition of Trust Accounts.
(h) Barclays may upon or following a Payment Default complete a
Notice of Assignment and Trust and send it to the relevant
Debtor and Barclays has the right to take proceedings directly
against the relevant Debtor (for the avoidance of doubt, this
right is in addition to any rights of Barclays under clause 16
(Default) and 21 (Power of Attorney). Barclays may in no other
circumstances send such a notice.
(i) Upon Barclays exercising their rights pursuant to clause 7(h)
above, the Company will no longer hold itself out as agent of
Barclays in relation to the relevant Debt, and any authority
delegated to the Company in respect of that Debt shall
immediately determine without any further action on the part
of Barclays or the Company.
(j) The agency appointment referred to in clause 7(a) above:
(i) may be varied or cancelled by Barclays upon the
occurrence of a Default;
(ii) shall be treated as automatically terminated should
Barclays serve notice to terminate this Agreement
upon or following a Default.
17
8 NON-PAYMENT OBLIGATIONS
(a) If any Debt is not paid on or before its Maturity Date, the
Company shall, within the 21 Banking Days following such
Maturity Date, demand payment of that Debt from the relevant
Debtor and (if so requested by Barclays) supply Barclays with
a copy of the demand.
(b) Without prejudice to clause 17 (Limited Recourse), Barclays
has recourse to the Company for repayment of the Debts
purchased by it under this Agreement, in circumstances where
sub-clause 8(d) (Non-Payment Obligations) below applies.
(c) Either as soon as reasonably practicable on any Maturity Date,
or forthwith on the date of service of any Notice of
Assignment and Trust, if there is an outstanding Shortfall for
the relevant Debt, the Company shall:
(i) provide evidence to the reasonable satisfaction of
Barclays that the Company is not in breach of the
relevant Contract; and
(ii) issue a formal written demand for payment from the
relevant Debtor confirming to that Debtor that the
relevant Debt has been assigned to Barclays, and
supply Barclays with a copy of such demand.
A Shortfall (in a situation where Barclays is not reasonably
satisfied in accordance with sub-sub-clause 8
(c)(i)(Non-Payment Obligations)) will be regarded as
outstanding until Barclays has been reimbursed for the
Shortfall in full.
(d) If the Company fails to perform its obligations in respect of
a particular Debt under sub-clauses 8(a), 8(c) and/or 8(e)
(Non-Payment Obligations), the Company shall on demand by
Barclays, pay to Barclays an amount equal to the amount that
should have been demanded by the Company and/or the Shortfall
in respect of that Debt.
(e) The Company shall, at the Company's expense, take whatever
action (including enforcement action and legal proceedings)
Barclays reasonably requires to facilitate:
(i) the realisation of any Debt purchased by it under
this Agreement; or
(ii) the exercise of any right or discretion exercisable
by Barclays in respect of any Debt purchased by it
under this Agreement.
9 FEES
(a) The Company shall pay to Barclays the Facility Arrangement Fee
on the Commencement Date.
(b) The Company shall pay to Barclays the Service Fee on the last
Banking Day of each calendar month. Barclays may debit to the
Payment Account on the last day of each calendar month an
amount equal to the monthly Service Fee.
18
(c) The Company shall pay to Barclays all bank commissions and
charges (at Barclays Bank PLC's prevailing tariff from time to
time) for:
(i) maintaining any Trust Account;
(ii) collecting remittances in relation to Export Debts;
(iii) converting to an Approved Currency the proceeds of
any Debt if not expressed in an Approved Currency, or
if requested to effect any such conversion by the
Company; and
(iv) dealing with dishonoured remittances
(d) all costs, charges, fees and expenses (including legal fees
and expenses) during the negotiation and preparation of, and
during the currency of, this Agreement
10 PAYMENTS
(a) All payments under this Agreement shall be made in an Approved
Currency to the relevant Party to its account(s) at such
office or bank as it may notify to the other Party for this
purpose prior to the date of this Agreement or any other
notified by it to the other Party by not less than 5 Banking
Days' notice. Payments under this Agreement shall be made for
value on the due date at such times and in such currency as
Barclays may specify as being customary at the time for the
settlement of Sterling transactions in an Approved Currency.
(b) All payments made by the Company under this Agreement shall be
made without set-off or counterclaim and without any
deduction. If the Company is compelled to make any deduction
the Company shall pay additional amounts to ensure receipt by
Barclays of the full amount Barclays would have received but
for the deduction.
(c) In the event of Payment Default, the Company shall, without
prejudice to any other rights of Barclays under this
Agreement, pay interest to Barclays on demand on the unpaid
amount (both before and after judgment) at the rate of 3 per
cent. above the Applicable Rate.
11 GENERAL REPRESENTATIONS
The Company represents to Barclays on the date of this Agreement and,
on each Payment Date, that:
(a) it is a limited liability company, duly incorporated and
validly existing under the laws of England;
(b) this Agreement is a legally binding obligation enforceable in
accordance with its terms, is within its powers and has been
duly authorised;
(c) this Agreement does not conflict with any law applicable to
the Company;
(d) all consents and authorisations in relation to this Agreement
have been obtained;
19
(e) no Default is outstanding or might result from the assignment
of a Debt pursuant to this Agreement;
(f) its latest accounts and/or consolidated accounts show a true
and fair view of its then financial condition and/or
consolidated financial condition and there has been no
material adverse change in its financial condition and/or
consolidated financial condition since that date;
(g) no litigation, arbitration or administrative proceedings are
current, pending or to the knowledge of the Company threatened
which might, if adversely determined, result in a Material
Adverse Change;
(h) all material and relevant written information supplied by the
Company to Barclays prior to the date of this Agreement was
true, complete and accurate in all material respects at its
date and nothing has occurred since the date of the supply of
such information which renders it untrue or misleading in any
material respect other than changes that have been disclosed
in other later written information; and
(i) it has made, and will continue to make, all necessary
notifications or registrations under the terms of the Data
Protection Xxx 0000.
12 DEBT SPECIFIC WARRANTIES
In relation to each Debt, the Company will be treated as representing
and warranting to Barclays at the time that it is Notified that:
(a) in relation to the relevant Debtor, there exists a subsisting
Credit Limit and a subsisting Barclays Credit Limit;
(b) such Debt is an existing, legal, valid, binding, undisputed
and enforceable payment obligation of the relevant Debtor
evidenced by an Invoice;
(c) the Debtor is not in default of any sums due to the Company or
Barclays and the Company is not aware (acting prudently and in
good faith, and having taken all reasonable steps to ascertain
the same) of the occurrence of any event likely to result in
Barclays receiving less than the full Notified Value on the
Maturity Date;
(d) the Debtor is not subject to Insolvency Proceedings nor is it
Insolvent;
(e) the Company is the legal and beneficial owner of such Debt,
and such Debt and relevant Invoice are held by it free of any
Security Interest;
(f) the Company's rights under the Contract are not subject to a
Security Interest or equitable interest;
(g) the Debtor has accepted unconditionally and without any
qualification the Contract to which such Debt relates and the
Debtor is accordingly bound to pay such Debt in full, without
set-off, counterclaim or any other deduction or withholding;
(h) all necessary consents, waivers, approvals and authorisations
(if any) required for the assignment by the Company to
Barclays of the benefits of the Contract and/or
20
such Debt arising thereunder have been obtained;
(i) the Company has not assigned or otherwise transferred or
granted any interest in and to all or any of its rights in
relation to such Debt or the relevant Contract to any third
party;
(j) such Debt arises pursuant to a Contract governed by English
law and the Contract does not conflict with any law applicable
to the Company;
(k) the Debt is evidenced by an Invoice and the correct name and
address of the Debtor appears on every Invoice, Credit Note,
Debit Note and on all other relevant documentation sent by the
Company to Barclays;
(l) such Debt is not subject to any withholding tax;
(m) no reservation of title by any third party applies to the
goods, the subject of a Debt, nor can any third party trace
into such goods or to such Debt and no third party has any
lien or right of retention in relation to such goods;
(n) copies of the Contracts which the Company has delivered to
Barclays represent the contractual basis upon which the
Company contracts with the Debtors;
(o) the Company has complied with all material obligations
required to be complied with by it under each Contract, and in
respect of each Invoice and, there is no dispute with the
Debtor outstanding in connection with the Contract;
(p) it relates to a Contract which has not been terminated or
rescinded by the relevant Debtor;
(q) it does not relate to a Contract where goods are supplied on
approval or where the relevant Debtor has the right to return
goods at any time;
(r) the Debt is not owed by an Affiliate;
(s) the Debt has not been previously Notified to Barclays;
(t) the Debt is owed by a Debtor in an Approved Currency; and
(u) the Debt is owed by a Debtor in an Approved Jurisdiction.
13 CREDIT APPROVAL UNDERTAKINGS
13.1 The Company undertakes that the Policy has been assigned to Barclays
and/or Barclays has been noted as sole loss payee under the Policy, and
further undertakes not assign or purport to assign the Policy to any
third party, or note or purport to note any third party as loss payee
thereunder.
13.2 The Company shall at all times comply with all requirements of the
Policy including the payment of all premiums and the completion and
delivery to the Insurer of all declarations, returns, claims and other
documents and information required under the Policy.
21
13.3 As between Barclays and the Company, Barclays shall not be responsible
for compliance with the Policy. In the event that the Company shall at
any time fail to comply with the terms of the Policy, Barclays may but
shall not be obliged to remedy (including by way of paying any premium
due or making any claim capable of being made) such failure at the
Company's expense which expense shall be payable by the Company upon
demand.
13.4 The Company shall, in relation to each Debtor, notify Barclays in
writing of the Credit Limit set by the Insurer in respect of that
Debtor. The Company shall not disclose the existence of such Credit
Limit to the Debtor.
13.5 Where a Credit Limit applies in relation to a Debtor, Barclays shall
until further notice set an identical Barclays Credit Limit, and
(subject to the terms of this Agreement and in particular clause 17
(Limited Recourse)) accept the Credit Risk in respect of Approved Debts
due from such Debtor up to the relevant Credit Limit.
13.6 Barclays may at any time (acting reasonably) refuse to accept the
Credit Risk in relation to any or all Debts due from any Debtor,
although such refusal (being the withdrawal of a Barclays Credit Limit)
shall not apply to any Approved Debts already Notified to Barclays and
in relation to which Barclays shall have already accepted the Credit
Risk.
13.7 Barclays shall cease to accept the Credit Risk in relation to any or
all Debts, concurrently with any withdrawal, termination or variation
by the Insurer of a Credit Limit or the Policy becoming ineffective.
13.8 The Company undertakes to make all claims under the Policy as soon as
practicable after an event giving rise to a claim shall have occurred.
13.9 Barclays shall upon receipt, credit to the Payment Account any moneys
received from the Insurer under the Policy, less any sum received in
respect of VAT (which the Company shall be entitled to claim).
13.10 If required by Barclays, the Company shall absolutely assign the
benefit of any distribution due or becoming due from the Insolvency of
a Debtor in respect of an Approved Debt and in the meantime hold the
same on trust for Barclays.
13.11 Notwithstanding any other terms of this Agreement, Barclays shall not
accept the Credit Risk in relation to any Debt to the extent that:
(a) at any relevant time, such Debt, when aggregated with all
other outstanding Debts, falls outside a Credit Limit, falls
outside a Barclays Credit Limit, or is not an Approved Debt
for any reason; or
(b) any part of such Debt shall fall within the First Loss; or
(c) any part of such Debt shall constitute VAT.
13.12 For the purpose of determining the Debts in relation to which Barclays
shall have accepted the Credit Risk, the Debts due from the relevant
Debtor shall be taken in the order they become due for payment.
22
14 GENERAL UNDERTAKINGS
The Company shall from the date of this Agreement until no amounts are
or may be outstanding under this Agreement or in relation to any Debts
purchased by Barclays:
(a) comply in all respects with the terms of the Policy and/or any
requirements of the Insurer associated thereto or in
connection therewith;
(b) procure that Barclays is allowed access on reasonable notice
to inspect the financial statements, accounting books and
records of the Company;
(c) provide to Barclays written evidence, satisfactory to
Barclays, that the related goods or services in relation to a
Debt have been delivered or supplied in accordance with a
Contract;
(d) forthwith on request by Barclays, supply to Barclays any other
information in connection with any Finance Document, any Debt,
or any Contract as Barclays may reasonably request;
(e) in relation to the US Financial Covenants:
(i) immediately inform Barclays of any breach of the US
Financial Covenants;
(ii) confirm to Barclays quarterly (the first such
confirmation to be given on 1st March 2006) that
during the previous quarter the US Financial
Covenants were complied with in full and without
qualification; and
(iii) upon Barclays' request provide or procure the
provision of any information provided to any person
in accordance with the US Facility Agreement (and in
the event of termination of the US Facility Agreement
as Barclays may reasonably require);
(f) not create or permit to exist any Security Interest on any
Debt, Invoice, Contract or the Trust Account other than an
encumbrance by the Company in favour of Barclays;
(g) not sell, transfer, discount, factor, grant any trust or lease
or otherwise dispose of all or any part of the Debts,
Invoices, Contracts or any amount standing to the credit of
the Trust Account or monies standing to the credit of its
other bank accounts that are held on trust for Barclays under
this Agreement (other than as contemplated by this Agreement);
(h) promptly upon becoming aware notify Barclays of any event
likely to result in the reduction in value of any Debt
purchased by Barclays (whether as a result of payment or
otherwise) or likely to result in Barclays receiving less than
the full Notified Value;
23
(i) comply with all operational undertakings set out in Schedule 3
(Operational Undertakings);
(j) comply with the terms of Schedule 4 (Computerised Facilities)
in relation to any Computerised Facilities provided by
Barclays;
(k) comply in all respects with clause 7 (Collection and
Administration) and hold on trust for Barclays any Debt which
shall fail for any reason to effectively vest in Barclays;
(l) ensure that the warranties given to Barclays when a Debt is
Notified remain unaltered whilst the Debt remains outstanding;
(m) at any time to do such things and to take, continue,
discontinue or abandon such proceedings as Barclays may
prescribe for the purpose of enforcing payment of and
collecting Debts;
(n) exercise such care and prudence in granting credit to and
withholding credit from Debtors (including ensuring that no
lien or right of retention in relation to relevant goods
arises in favour of any third party) and to do such things
(including issuing any requisite legal proceedings) in
procuring or attempting to procure payment of all Debts as
would be exercised and effected by a reasonably careful and
prudent supplier of goods and services of the nature of those
supplied by the Company;
(o) notify Barclays immediately upon becoming aware of any
financial difficulties or Insolvency Proceedings in relation
to any of the Company, an Affiliate, a Guarantor or a Debtor,
or that any such persons are Insolvent;
(p) immediately Barclays are notified of Insolvency Proceedings
relating to any Debtor, or that a Debtor is Insolvent:
(i) notify Barclays (in such form and manner as Barclays
may from time to time prescribe) of the nature of the
Insolvency Proceedings or that it is Insolvent and
the particulars of the Debts owing by such Debtor;
and
(ii) to submit a proof in respect of such Debt in the
insolvent estate of such Debtor and to give to the
person administering such Debtor's estate irrevocable
instructions in such form as Barclays may require
that any dividends or other sums of money payable out
of such estate in respect of any proof or claim by
the Company or Barclays, shall be paid only to
Barclays; and
(iii) to take such other action as shall be reasonably
available to the Company and to execute such other
documents as shall be needed to procure payment to
Barclays of any dividends or in mitigating any loss
which Barclays may suffer by reason of such
Insolvency Proceedings or it becoming Insolvent;
(iv) to pay to Barclays all monies received by the Company
from the estates of insolvent Debtors which relate to
Debts purchased by Barclays.
(q) immediately notify Barclays of any waiver, amendment,
variation, substitution or replacement of the US Financial
Covenants.
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15 TERMINATION
(a) Subject to clause 16 (Default) the Facility is available for a
period of the Minimum Period and shall, in the absence of
notice to terminate served by either Party in accordance with
clause 15(b) (Termination) or clause 15(c) (Termination),
automatically renew for a further 12 months upon each
anniversary of this Agreement.
(b) Subject to clause 16 (Default) the Company may terminate this
Agreement by giving at least 3 months written notice, such
notice to expire upon the date stated in the notice.
(c) Subject to clause 16 (Default) Barclays may terminate this
Agreement by giving at least 3 months written notice, such
notice to expire upon the date stated in the notice.
(d) A request by the Company for termination prior to the expiry
of the Minimum Period shall be subject to payment in full of
the Breakage Costs. The rights and obligations of the Company
and Barclays accrued prior to termination will continue in
full force and effect.
(e) If this Agreement is terminated by the Company for any reason
prior to the expiry of the Minimum Period (save for
termination in accordance with clause 19(d) (Increased
Costs)), then the Company shall pay to Barclays on the date
this Agreement is terminated (the "EARLY TERMINATION DATE")
the Breakage Costs, which shall be an amount equal to the
Service Fee payable by the Company multiplied by the number of
months (in whole or in part) between the Early Termination
Date and the expiry of the Minimum Period.
16 DEFAULT
16.1 Each of the events set out in this clause 16.1 (Default) is an Event of
Default:
(i) the failure by the Company to remit to the correct
Trust Account within 1 Banking Day of Barclays'
demand any amount received by the Company
representing the proceeds of Debts administered or
dealt with in any manner contrary to that prescribed
by this Agreement and/or the Bank Instruction Letter,
or the failure by the Company to discharge within 3
Banking Days of Barclays' demand all and any other
amounts due (but unpaid) to Barclays under or
pursuant to this Agreement;
(ii) the failure by the Company to comply with its
obligations under clause 4.2 (Existing Debts) and
such failure to comply continues unremedied for 3
Banking Days from the date of notice by Barclays to
the Company requiring remedy;
(iii) the Company fails to comply with any other provision
of this Agreement (not addressed by clauses 16.1(i)
and (ii) (Default)) and the failure to
25
comply, if capable of remedy, continues unremedied
for 5 Banking Days from the date of notice by
Barclays to the Company requiring remedy;
(iv) a representation made or repeated in the Finance
Documents delivered by or on behalf of the Company in
connection with this Agreement is materially
incorrect when made or deemed to be made or repeated;
(v) the Company, an Affiliate or the Parent (or any
guarantor from time to time) becomes Insolvent or
Insolvency Proceedings are commenced against such
persons;
(vi) there is a change of control in the Company or its
Affiliates;
(vii) there is a termination or proposed termination of any
waiver, consent, release or priority in favour of
Barclays in relation to any Security Interest over
Debts;
(viii) there has been a Material Adverse Change;
(ix) there arises the termination or proposed termination
of the Letter of Comfort;
(x) any breach of any agreement (other than the Finance
Documents) between the Company and Barclays Bank PLC;
(xi) any breach or the termination (for any reason) of the
Policy; and
(xii) any breach of the US Financial Covenants.
16.2 On and at any time after the occurrence of an Event of Default
specified in clause 16.1 (Default), which is continuing:
(i) Barclays shall not be obliged to make any Early
Payment or the Deferred Element;
(ii) Barclays may immediately terminate this Agreement by
notice to the Company;
(iii) Barclays may immediately reduce the Facility Limit to
zero or such other figure as Barclays may determine;
(iv) Barclays may immediately serve a Notice of Assignment
and Trust on any or all of the Debtors;
(v) the Company shall immediately, if Barclays so
requests, notify any Debtor of the assignment of
Debts under this Agreement;
(vi) all amounts outstanding from the Company to Barclays
under this Agreement will become immediately due and
payable;
(vii) all Barclays' Credit Limits shall be withdrawn;
26
(viii) insofar as Barclays has assumed the Credit Risk in
relation to any Debt, it shall immediately cease to
do so;
(ix) the rights and obligations of the Company and
Barclays under this Agreement prior to termination
will continue in full force and effect; and
(x) combine all accounts the Company may have with
Barclays and/or apply in reduction of such sums the
Company may then or thereafter owe to Barclays
(howsoever arising, whether under this Agreement or
otherwise) any sums which Barclays then or thereafter
owe to the Company to the effect that Barclays shall
only be liable to account to the Company for any net
resulting sum due from Barclays to the Company after
such combination and/or application shall have been
effected.
17 LIMITED RECOURSE
17.1 The Company shall indemnify Barclays and keeps Barclays indemnified
against any losses, costs, expenses (including legal expenses on an
indemnity basis), claims, damages and interest ("LOSS") sustained,
suffered or incurred by Barclays in relation to any breach of this
Agreement and/or the Policy, PROVIDED THAT, without prejudice to clause
17.2 (Limited Recourse), such indemnity shall not apply where:
(a) there is non-payment in whole, or in part, of an Approved
Debt, and
(b) the Insurer has approved the relevant claim in relation to
such Approved Debt, and
(c) the Insurer has effected a payment to Barclays under the
Policy in relation to such claim.
17.2 Without prejudice to clause 17.1 (Limited Recourse) in respect of
Approved Debts only, Barclays hereby confirms that the maximum amount
(including Discount and the Service Charge) that Barclays shall seek to
recover against the Company or the Company's assets in respect of any
monies advanced by Barclays to the Company under this Agreement shall
be limited to the difference between (i) the aggregate value of the
Purchase Price for such Approved Debts which have been credited to the
Payment Account and (ii) if greater, the aggregate of all Early
Payments made by Barclays to the Company in respect of such Approved
Debts.
18 INDEMNITY
The Company will indemnify Barclays and keep Barclays indemnified
against any Loss sustained, suffered or incurred by Barclays in
relation to:-
(a) any act or omission on the part of the Company including
without limitation any breach by the Company of the terms of
this Agreement, the Policy, any Contract or any applicable
law; or
(b) the Debtor making (or claiming to be entitled to make) any
deduction from any amount payable to Barclays in relation to
Debts purchased by Barclays due to:
(i) any provision in the relevant Contract to such
effect; or
27
(ii) any sum owed or allegedly due to the Debtor from the
Company, whether by way of contract, damages or
otherwise; or
(c) the Debtor otherwise claiming to be justified in withholding
all or any part of the Debt by reason of a dispute concerning
the goods or services supplied or delivered or as to terms of
the Contract.
19 INCREASED COSTS
(a) The Company shall, within 3 Banking Days of a demand by
Barclays, pay to Barclays the amount of any increased cost or
reduction in return (whether under this Agreement or on its
capital) incurred by it in respect of performing, maintaining
or funding its obligations under this Agreement as a result
of:
(i) the introduction of, or change in, or change in the
interpretation or application of, any law or
regulation; or
(ii) compliance with any regulation made after the date of
this Agreement,
including any law or regulation relating to taxation, change
in currency of a country, reserve asset, special deposit, cash
ratio, liquidity or capital adequacy requirements or any other
form of banking or monetary control.
(b) Barclays shall, in consultation with and at the expense of the
Company, and to the extent it can do so lawfully, take all
reasonable steps open to it to mitigate any circumstances
which arise and which would result in any amount becoming
payable under clause 19(a) (Increased Costs).
(c) Clause 19(b) (Increased Costs) above does not in any way limit
the obligations of the Company under this Agreement.
(d) If in the Company's reasonable opinion, the increased costs
make the transactions contemplated by this Agreement
uneconomical, then the Company may serve notice of termination
in accordance with and subject to clause 15 (Termination) and
no Breakage Costs shall be payable.
20 SET-OFF
20.1 Barclays may set-off at any time, any obligation owed by the Company
under this Agreement against any obligation owed by Barclays to the
Company. In particular, Barclays may at any time set-off, debit,
transfer or apply the difference between the Notified Value of any Debt
and its Purchase Price in respect of or in satisfaction of all the
actual, contingent, present and future liabilities of the Company to
Barclays under this Agreement. If either obligation is unliquidated or
unascertained, Barclays may set-off an amount estimated by it in good
faith to be the amount of that obligation, although Barclays shall
promptly credit to the Company any amount which, with the passage of
time, can be evidenced to have been set-off in excess of any such
estimate.
21 POWER OF ATTORNEY
The Company, by way of security, irrevocably appoints Barclays (who
shall have the power to nominate any of its directors, company
secretary, authorised signatories and
28
managers (and administrators in the event that such are appointed in
relation to the Company) from time to time from the date hereof to
exercise Barclays' powers under this clause 21) as its attorney or
attorneys in its name and on its behalf to be its attorney to take any
action which it is obliged to take under this Agreement (including the
completion, execution and any Debt Notification Notice or Notice of
Assignment and Trust) and:
(a) sign and execute a legal assignment of all or any of the Debts
in accordance with section 136(1) of the Law of Property Xxx
0000; or
(b) otherwise obtain payment of or perfect its ownership of any
Debts; or
(c) secure the performance of any of the Company's obligations
pursuant to this Agreement;
(d) conducting any claim or other matter under or pursuant to any
relevant fraud and/or credit insurance policy or policies in
relation to all or any Debts;
and the Company agrees that Barclays may at any time appoint a
substitute to act as its attorney, and may revoke any such appointment
without giving a reason. The appointment of a substitute is to be in
writing signed by Barclays (acting through any of its directors,
company secretary or authorised signatories). Every substitute shall
have full powers as the Company's attorney as if appointed by this
clause 21 except this power to appoint a substitute.
Barclays will only exercise its rights under this power of attorney if
a Default has occurred and is continuing.
22 ASSIGNMENTS
The Company may not assign or transfer any of its rights and
obligations under this Agreement.
23 WAIVERS AND REMEDIES CUMULATIVE
The rights of Barclays under this Agreement may be exercised as often
as necessary, are cumulative and not exclusive of its rights under the
general law and may be waived only in writing and specifically. Delay
in exercising or non-exercise of any such right is not a waiver of that
right.
24 MISCELLANEOUS
(a) The Company shall pay within 3 Banking Days of demand if due
and owing:-
(i) Breakage Costs in connection with this Agreement;
(ii) any stamp duties in connection with this Agreement,
the purchase of any Debt by Barclays from the Company
or any documents served or created in connection with
this Agreement;
(iii) all reasonable costs (including, without limitation,
reasonable legal fees and expenses) incurred by
Barclays in connection with the preparation
29
and negotiation of this Agreement and all reasonable
costs (including, without limitation all reasonable
legal fees and expenses) incurred by Barclays in
connection with the enforcement of this Agreement;
and
(iv) losses flowing from any judgement or claim being
payable in a different currency from that agreed
under this Agreement.
(b) Interest and Discount accrue from day to day and are
calculated on the basis of the actual number of days elapsed
and a year of 365 days.
(c) This Agreement will, with effect from or after the first day
of the introduction of Sterling into European Economic and
Monetary Union as contemplated by the Treaty establishing the
European Community, be amended (by notice from Barclays to the
Company), to the extent that Barclays specifies to be
necessary or desirable, to comply with any generally accepted
conventions and market practice applicable to euro-denominated
obligations in the London interbank market or otherwise to
reflect the change in currency.
25 NOTICES
(a) All notices or other communications under this Agreement shall
be given in writing and may be made by facsimile. Any such
notice will be deemed to be given as follows:
(i) if by letter, when delivered personally or on actual
receipt; and
(ii) if by facsimile, when received in legible form.
However, a notice given in accordance with the above but
received on a non-working day or after business hours in the
place of receipt will only be deemed to be given on the next
working day in that place.
(b) The address and facsimile number of each Party for all notices
under this Agreement are those notified by that Party for this
purpose to the other Party prior to the date of this Agreement
or any other notified to the other Party by not less than 5
Banking Days' notice.
26 COUNTERPARTS
This Agreement may be executed in any number of counterparts, and this
has the same effect as if the signatures on the counterparts were on a
single copy of this Agreement.
27 JURISDICTION
The Parties agree that the courts of England have jurisdiction to hear
and determine any proceedings that may arise in connection with this
Agreement.
28 GOVERNING LAW
This Agreement is governed by English law.
IN WITNESS of which this deed has been executed and, on the date set out above,
delivered as
30
a deed.
31
SIGNED as a deed by
XXXX XXXXXX (UK) LIMITED acting by two directors or by one director and the
secretary, and delivered when dated:
DIRECTOR
/s/ Xxxxx Xxxxxxxx
--------------------------
Name: Xxxxx Xxxxxxxx
DIRECTOR/SECRETARY
Signature :
Name :
SIGNED as a deed on the 30th
day of December 2005 on behalf
of BARCLAYS BANK PLC
acting by
/s/ Xxxxx XxXxxx
-----------------------------
Xxxxx XxXxxx
as duly appointed attorney for: Barclays Bank PLC
in the presence of:-
Witness' Signature
--------------------------------
Witness' Name
--------------------------------
Witness' Address
Occupation
--------------------------------
32
SCHEDULE 1
FORM OF NOTICE OF ASSIGNMENT AND TRUST
[On the letterhead of the Barclays Bank Plc]
To: [DEBTOR]
[DATE]
Dear Sirs,
FRAMEWORK AGREEMENT DATED [ ], 2005 (THE "AGREEMENT") BETWEEN [ ]
LIMITED (THE "COMPANY") AND BARCLAYS BANK PLC (THE "BANK")
This letter constitutes notice to you that, pursuant to the Agreement, the
Company assigned all Debts to the Bank and holds all its rights in respect of
the following Debts on trust for the Bank.
INVOICE NUMBER DATE OF INVOICE AMOUNT DUE DATE
All payments due from you in respect of the above Debts shall be paid to the
Bank for its own account [in accordance with your existing payment instructions]
[as follows: Name account details]
Please acknowledge receipt of this notice by signing and returning the attached
copies to Barclays at the address above and to the Company at the address below:
[set out address].
Yours faithfully,
.............................................
BARCLAYS BANK PLC
Authorised signatory
[COMPANY'S ADDRESS]
33
SCHEDULE 2
FORM OF DEBT NOTIFICATION NOTICE
APPROVED DEBTS CREATED IN WEEK [ ]
[On the letterhead of the Company]
To: Barclays Bank PLC
Sales Financing Xxxx
Xxxxxxxxx Xxxxx
Xxxxxxxxx Xxx
Xxxxxxxxxxx
Xxxxxxxxx
XX00 0XX
From: [ ]
[DATE]
FRAMEWORK AGREEMENT DATED [ ] DECEMBER 2005 (THE "AGREEMENT")
Terms defined in the Agreement have the same meaning in this notice.
1 We hereby confirm that we have:
(a) notified you electronically of the Approved Debts created by
us, in the period set out above ("ELECTRONICALLY NOTIFIED
DEBTS") in accordance with the Agreement; and
(b) transferred to you electronically an aged analysis of the
Electronically Notified Debts and certify that, except as
otherwise noted thereon, each Electronically Notified Debt
referenced in the aged analysis is the subject of an Invoice
that is complete and in full force and effect.
2 We confirm that:
(a) no Default is outstanding or will result from any payment;
(b) payment for the Electronically Notified Debts will not result
in a breach of clause 2 (Amount) of the Agreement; and
(c) the goods to be delivered under the Contracts referable to the
Electronically Notified Debts have been delivered to the
Debtor in accordance with the Contract.
By:
[ ]
Authorised Signatory
34
SCHEDULE 3
OPERATIONAL UNDERTAKINGS
1 By the 10th day of each month, the Company shall provide to Barclays a
sales ledger reconciliation in relation to its business operation as at
the last working day of each previous month, and (as applicable) each
such reconciliation shall include, on an Approved Jurisdiction by
Approved Jurisdiction basis:
(a) fully posted aged debtor analysis for each Debtor, aged by
Invoice date in a five column format;
(b) copy open item sales ledger for each Debtor, on a monthly
basis, showing details of the outstanding Debts assigned to
Barclays (in a format agreed by Barclays);
(c) an analysis evidencing that all amounts outstanding to
suppliers are posted to aged creditors analyses;
(d) a contra analysis report in a format agreed by Barclays;
(e) a schedule (in a format agreed by Barclays) specifying all
Invoices, Credit Notes and Debit Notes on a weekly basis (or
such other frequency as may be agreed between the Parties,
acting reasonably);
(f) a schedule of Debts which are not subject to subsisting Credit
Limits;
(g) a schedule specifying all Deductions and Reserves;
(h) a schedule of Unapproved Debts;
(i) a schedule specifying all Export Debts;
(j) a schedule specifying all Excluded Export Debts; and
(k) a report (in a form agreed from time to time by the Company
and Barclays) detailing all known disputes with Debtors.
2 The Company shall retain and hold to the order of Barclays and make
available for inspection by Barclays all documents relating to proof of
delivery of any goods or services.
3 The Company shall allow any employee, representative or agent of
Barclays, at all reasonable times to conduct an audit of which may,
without limitation, include:
(a) entering any premises at which the Company carry on business,
to inspect goods and stocks and Contracts;
(b) inspect, verify and check all such books, accounts, computer
and other records, orders, correspondence and other documents
as Barclays may reasonably require; and
35
(c) to copy (including computer disks), at the expense of the
Company, such of them as it may require or to check or remove
any software or hardware provided by Barclays or any licensor
of Barclays in connection with access to its computer
facilities.
4 The Company must promptly provide to Barclays full details of all new
or amended Contracts and observe and perform its obligations with
regard to the same and if appropriate, obtain consent to the assignment
of Debts to Barclays.
5 The Company shall maintain a record of Credit Notes and Debit Notes and
provide such record to Barclays on a monthly basis in such form as
Barclays may reasonably request.
6 The Agreement shall be reviewed on each anniversary of the Commencement
Date.
36
SCHEDULE 4
COMPUTERISED FACILITIES
1 Where applicable under this Agreement, the Company shall have the
benefit of Barclays' computerised facilities provided in accordance
with this Schedule 4 (Computerised Facilities), and the terms of this
Schedule 4 (Computerised Facilities) shall apply together with the
terms of Barclays' Computer User Guide which shall be treated as
incorporated into these Conditions. These Conditions shall prevail over
any inconsistency with Barclays' Computer User Guide.
2 In this Schedule 4 (Computerised Facilities):
'ADOPTED PROTOCOL' means the accepted method for the interchange of
Messages based on such protocol as may be agreed between the Company
and Barclays.
'COMPUTER USER GUIDE' means the Guide produced by Barclays, in whatever
form and as from time to time amended, describing the facilities
available through access to Barclays' computer and the procedures and
rules to be adopted and observed for such access and for electronic
data interchange.
'DATA' means any information processed into Barclays' computer facility
in relation to the Company's affairs.
'MESSAGE' means Data structured in accordance with the Adopted Protocol
and transmitted electronically between the Company and Barclays,
including where the context admits any part of such Data.
'DATA LOG' means the complete record of Data interchanged representing
the Messages between the Company and Barclays.
3 The terms of this Schedule (Computerised Facilities) shall apply to all
Messages between the Company and Barclays using the Adopted Protocol.
The Company and Barclays agree that all such Messages shall be
transmitted in accordance with the provisions of Barclays' Computer
User Guide.
4 The Company undertakes:
(a) at its sole risk and expense, to maintain on its computer and
in a safe and efficient operating order, at such address as
Barclays may approve, a proprietary communications software
package and modem which shall comply with the standards and
requirements notified by Barclays. The Company shall make
suitable contingency arrangements to cover system or operating
failures and suspension or withdrawal of the computerised
facilities; and
(b) to ensure that all Messages the Company sends are correct and
complete; and
(c) to comply with the requirements and directions of Barclays'
Computer User Guide and in particular all directions as to
security; and
(d) to use the Computerised Facilities only for the Company's own
needs and for the purposes set out in the Computer User Guide.
37
5 The Company shall have a non transferable licence to obtain the
facilities described in the Computer User Guide. Both the extent of the
facilities and the provisions of the Computer User Guide may from time
to time be amended by Barclays, at its sole discretion, to take account
of any technical or procedural alterations or enhancements.
6 In using the facilities the Company will use and comply with the
requirements of Barclays Bank PLC's 'Messageway' system. The Company
will not use any other intermediary.
7 The Company and Barclays undertake to each other:
(a) to notify the other promptly if it learns or suspects that
there has occurred any failure or delay in receiving any
Message, any error or fraud in or affecting the sending or
receiving of any Message or any programming error or defect or
corruption of any Message, and to co-operate with the other
party in trying to remedy the same;
(b) to take all appropriate steps and establish and maintain all
appropriate procedures so as to ensure that as far as is
reasonably practicable Messages are properly stored, are not
accessible to unauthorised persons, are not altered, lost or
destroyed, and are capable of being retrieved only by properly
authorised persons;
(c) to maintain adequate security and to maintain the computer
virus free;
(d) to take reasonable precautions to prevent unauthorised access
to the facilities;
(e) to keep secret and confidential the method of operation of the
facilities, the Computer User Guide, all access telephone
numbers, user numbers, passwords, test keys, access codes and
security procedures;
(f) to notify the other party immediately if it knows of or
suspects any misuse of, or breach of secrecy in respect of,
any of the same;
(g) to ensure that every Message shall identify the sender and
recipient and include a means of verifying the authenticity of
the Message, either through a technique used in the Message
itself or by some other means provided for in the Adopted
Protocol;
(h) to ensure that all Messages are complete, accurate and secure
against being altered in the course of transmission by the
sender;
(i) to accept the integrity of all Messages and to accord these
the same status as would be applicable to a document or to
information sent other than by electronic means, unless such
Messages can be shown to have been corrupted as a result of
technical failure;
(j) to ensure that where there is evidence that a Message has been
corrupted or if any Message is identified or capable of being
identified as incorrect it shall be re-transmitted by the
sender as soon as practicable with a clear indication that it
is a corrected Message;
(k) where the recipient has reason to believe that a Message is
not intended for it then the sender shall be notified and the
recipient will delete the Message from its
38
computer system.
8 Each of the Company and Barclays shall maintain a Data Log of all
Messages sent or received and make the same available to the other on
request. This shall contain such Data as shall from time to time be
agreed or, in the absence of such agreement, shall be the most complete
record of Data which either of Barclays or the Company shall consider
reasonably practicable to maintain. Except to the extent otherwise
agreed between Barclays and the Company in writing, such Data Log shall
be stored unmodified (save as may be necessary to correct any errors)
until the first anniversary of the termination of this Agreement. The
Data Log may be maintained on computer media or other suitable means
provided that the Data can be readily retrieved and presented in
readable form. Barclays' master log of Messages and Data received or
transmitted by Barclays shall, in the absence of manifest error, be
conclusive proof and evidence of the Messages sent or received by
Barclays in connection with or referable to the Computerised Facilities
and of the constituents of such Messages and the times at which they
were sent or received. Barclays may rely upon any Message ostensibly
sent by the Company or on its behalf, even though it may not originate
from the Company or that its employee or officer purporting to send the
message shall lack authority.
9 The copyright and all other rights in any software used or provided by
Barclays or its licensors in connection with the facilities and in any
Computer User Guide issued by Barclays shall at all times remain vested
in Barclays or, if the terms of any contract that Barclays has with any
licensor otherwise specify, in such licensor. The Company will not copy
such software or Barclays' Computer User Guide without Barclays' prior
written consent.
10 The Company accepts that information available from Barclays'
Computerised Facilities will be subject to change before the close of
business each day, particularly details of any Availability from the
Payment Account.
11 Barclays shall not be liable for or in respect of any loss, injury or
damage or any failure to comply, or any delay in complying with its
obligations hereunder or any other obligation in respect of the
Computerised Facilities which is caused directly or indirectly by:
(a) any downtime, unavailability, failure or malfunction of any
computer hardware equipment or software, or of any telephone
line or other communication system, service, link or
equipment;
(b) suspension of the Computerised Facilities;
(c) abnormal operating conditions;
(d) any error, discrepancy or ambiguity in any Message received by
Barclays;
(e) abnormal operating conditions, act or omission of the Company
or of any third party;
12 Barclays shall have the right, without liability to the Company and
without notice, at any time and from time to time, to suspend the
operation of the Computerised Facilities whereupon no further Messages
shall be sent or enquiries made by either the Company or Barclays until
Barclays shall have agreed to re-activate the facilities.
39
13 Either the Company or Barclays may terminate the Computerised
Facilities between the Company and Barclays by giving not less than 24
hours written notice to the other. If the Company terminates the
Computerised Facilities within twelve months of the installation of the
software and modem Barclays shall charge the Company an installation
charge of Pound Sterling500 plus Value Added Tax. If the Computerised
Facility is terminated by either party at any time within two years
after the first anniversary of such installation then the Company will
pay an installation charge of Pound Sterling250 plus Value Added Tax.
14 Upon termination of the facility the Company shall immediately return
to Barclays all copies of the Computer User Guide and any other
documentation or property (including any modem) of Barclays or its
licensors supplied in relation to the facility.
15 The Computerised Facilities shall also be co-terminous with the rest of
this Agreement.
16 The Company shall indemnify Barclays against all liabilities, damages
and expenses arising out of the transmission by the Company or the
receipt by Barclays of incorrect or inaccurate information however
caused.
17 Barclays reserve the right to levy a charge for:
(a) any new electronically delivered services in future; or
(b) reconfiguration of the computerised facilities due to
mix-operation by the Company.
18 If Barclays is required to visit the Company's premises to install the
software package and modem and such installation fails for reasons
outside Barclays' control Barclays will charge the Company an abortive
visit charge of Pound Sterling250 plus VAT.
40
ANNEXE 1
SALES LEDGER
