DATED MARCH 31, 2000
GEOLOGISTICS LIMITED
and
BURDALE FINANCIAL LIMITED
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FACILITY AGREEMENT
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CONTENTS
1. INTERPRETATION..........................................................................................1
2. CONDITIONS PRECEDENT...................................................................................13
3. THE FACILITY...........................................................................................14
4. RESTRICTIONS ON UTILISATIONS...........................................................................14
5. UTILISATION OF FACILITY................................................................................16
6. REPAYMENT AND PREPAYMENT...............................................................................19
7. INTEREST AND COMMISSION................................................................................21
8. RECEIVABLES, STOCK AND EQUIPMENT.......................................................................21
9. COLLECTION OF RECEIVABLES..............................................................................26
10. PAYMENTS AND TAXES.....................................................................................28
11. INCREASED COSTS........................................................................................30
12. ILLEGALITY AND MONETARY UNION..........................................................................31
13. GENERAL REPRESENTATIONS AND WARRANTIES.................................................................32
14. GENERAL UNDERTAKINGS...................................................................................34
15. EVENTS OF DEFAULT......................................................................................43
16. COSTS, EXPENSES AND FEES...............................................................................46
17. INDEMNITIES............................................................................................47
18. EVIDENCE OF INDEBTEDNESS...............................................................................49
19. NOTICES................................................................................................49
20. WAIVER, REMEDIES CUMULATIVE............................................................................49
21. INVALIDITY.............................................................................................50
22. ASSIGNMENT AND PARTICIPATION...........................................................................50
23. GOVERNING LAW AND JURISDICTION.........................................................................50
24. DISCLOSURE OF INFORMATION..............................................................................51
25. COUNTERPARTS...........................................................................................52
SCHEDULE 1...................................................................................................53
SCHEDULE 2...................................................................................................56
SCHEDULE 3...................................................................................................60
SCHEDULE 4...................................................................................................61
SIGNATORIES..................................................................................................63
THIS AGREEMENT is dated March 31, 2000
BETWEEN:
(1) GEOLOGISTICS LIMITED (Registered in England and Wales No. 00112456)
(the "COMPANY"); and
(2) BURDALE FINANCIAL LIMITED (Registered in England and Wales No.
2656007) ("BURDALE").
IT IS AGREED:
1. INTERPRETATION
1.1 DEFINITIONS
In this Agreement:
"ACCOUNT DEBTOR" means a debtor of the Company in respect of a
Receivable.
"ACCOUNT BANKS" means each bank at which a Charged Account is held
and which has been given and has acknowledged all notices required by
the Debenture.
"ACTUAL DAY OF PAYMENT" in relation to a Purchased Receivable means
the date on which full payment in respect of that Purchased
Receivable is made into the Blocked Accounts by the relevant Account
Debtor or the Company.
"AVAILABILITY LIMITS" means the Receivables Limit and the L/C Limit
and each other limit on Utilisations specified in Clause 4.
"AVAILABILITY PERIOD" means the period from the opening of business
in London on today's date until close of business in London on the
date falling five Business Days prior to the Final Repayment Date or
such later date as Burdale may agree.
"AVAILABILITY RESERVES" means, as of any date of determination, such
amounts as Burdale may from time to time establish and revise in good
faith reducing the amount for the purchase of Receivables or the
issuance, or procurement, of L/Cs which would otherwise be available
to the Company under the purchase formula(s) provided for herein: (a)
to reflect events, conditions, contingencies or risks which, as
reasonably determined by Burdale in good faith, do or may affect
either (i) the Collateral or any other property which is security for
the Obligations or its value, (ii) in any materially adverse respect,
the assets, business or condition (financial or other) of the Company
or any Obligor or (iii) the security interests and other rights of
Burdale in the Collateral (including the enforceability, perfection
and priority thereof) or (b) to reflect Burdale's reasonable good
faith belief that any collateral report or financial information
furnished by or on behalf of the Company or any Obligor to Burdale is
or may have been incomplete, inaccurate or misleading in any material
respect or (c) to reflect any state of facts which Burdale reasonably
determines in good faith constitutes an Event of
Default or Default. Without limiting the generality of the foregoing,
an Availability Reserve shall be established by Burdale from time to
time in such amounts as Burdale may reasonably determine to reflect
(a) that Dilution Rate as of any date with respect to the Receivables
for the immediately preceding twelve (12) month period or for the
immediately preceding three (3) month period (whichever percentage is
higher) exceeds five percent (5%), (b) any variances in the ageings
of accounts receivable provided to Burdale pursuant to Clause
8.1(b)(i) of this Agreement, (c) any unapplied cash which has not yet
been applied to the Receivables, and (d) any pass through receivables
or collections for shipping charges and cost of goods owed to the
Company by the receiving party of such goods and owed by the Company
to the shipping party of such goods.
"BLOCKED ACCOUNT" means each of the Company's accounts with Barclays
Bank PLC, Broadgate CBC, 155 Xxxxxxxxxxx XX0X 0XX, sort code
20-19-90, and being:
(a) account number 00000000; and
(b) account number 00000000,
(as the same may be redesignated, renumbered or renamed from time to
time), or such other account as previously approved by Burdale
(together, the "BLOCKED ACCOUNTS").
"BORROWERS" means each of GLNS, BVL, GLS and GLA.
"BVL" means Bekins Van Lines, LLC, a Delaware limited liability
company.
"BUSINESS DAY" means any day not being a Saturday, Sunday or Bank
holiday when banks are open for business in London.
"CANADIAN EXCESS AVAILABILITY" is defined in the Canadian Loan
Agreement.
"CANADIAN FACILITY" means the credit facility in the maximum amount
of Fifteen Million Dollars ($15,000,000) (which may be adjusted from
time to time in accordance with the terms of the Loan Agreement and
the Canadian Loan Agreement) provided by Congress Financial
Corporation (Canada) to GL Canada pursuant to the Canadian Loan
Agreement
"CANADIAN LOAN AGREEMENT" means a Loan Agreement dated on or about
today's date between Congress Financial Corporation (Canada) and GL
Canada, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
"CASH REQUEST" means a request for Burdale to pay to the Company an
amount of unpaid Purchase Price and/or the proceeds of a Loan in
substantially the form set out in Schedule 2 Part II.
"CHARGED ACCOUNTS" means the Blocked Accounts and the Other Accounts.
"COLLATERAL" means any of the assets and undertaking of the Corporate
Obligors charged to Burdale pursuant to the Debenture.
"CONGRESS" means Congress Financial Corporation (Western), a
corporation under the laws of California in the United States of
America.
"CORPORATE OBLIGOR" means each Obligor which is not a natural person.
"DAILY RATE" means L500 per person per day.
"DEBENTURE" means the debenture executed or to be executed by the
Company in favour of Burdale.
"DEED OF PRIORITIES" means the deed of priorities dated on or about
the date of this Agreement made between the Company, Barclays Bank
PLC and Burdale.
"DEFAULT" means any Event of Default and any event which with the
giving of notice and/or lapse of time and/or as a result of any
Utilisation and/or determination of materiality and/or fulfilment of
any condition (or any combination of the foregoing) may constitute an
Event of Default.
"DEFAULT RATE" means the rate determined by Burdale to be 2% above
the Purchase Rate from time to time.
"DILUTION RATE" means for any period, the ratio (expressed as a
percentage) of (a) the aggregate amount of reductions in the
Receivables for such period other than as a result of payments in
cash to (b) the aggregate amount of total sales of the Company for
such period.
"DOLLAR" and "$" means dollars in the lawful currency of the United
States.
"EBITDA" is defined in the Loan Agreement.
"ELIGIBLE RECEIVABLES" means, at any time, any Receivables which are
and continue to be acceptable to Burdale at such time and which are
not Ineligible Receivables.
"ELIGIBLE UNBILLED RECEIVABLES" means, at any time, any Receivable:
(a) which is an Ineligible Receivable solely by virtue of the
criteria in paragraph (h) of the definition of Ineligible
Receivables; and
(b) in relation to which the provision of goods and services to
which such Receivable relates has been completed or is in the
process of completion in accordance with the terms and
provisions contained in any documents relating thereto; and
(c) which remains fully or partly unbilled no more than thirty
(30) days after the sale and delivery of the goods and/or the
completion of the services giving rise thereto.
"END DATE" in relation to an L/C means the earlier of the expiry date
of such L/C and the date on which the L/C is drawn in full.
"ENCUMBRANCE" means any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangements, lien, charge,
security interest, easement or encumbrance or other security
agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any agreement to sell or
otherwise dispose of any assets on terms whereby any such asset may
be leased to or reacquired or acquired by any Obligor or any title
retention agreement having substantially the same economic effect as
any of the foregoing).
"EQUIPMENT" means all the Company's present and future equipment,
machinery, computers and computer hardware and software (whether
owned or licensed), vehicles, tools, furniture and fixtures and all
attachments, accessories and property now or in future relating to
them or used in connection with them and replacements and
substitutions for them wherever located.
"EVENT OF DEFAULT" means any of the events specified in Clause 15.1.
"EXCHANGE RATE" means the prevailing spot rate of exchange of such
bank as Burdale may select for the purpose, at or around 11.00 a.m.
on the date on which any conversion of currency is to be made under
this Agreement.
"FACILITY" means the Receivables Finance Facility.
"FACILITY LIMIT" means the greater of L15,000,000 or $25,000,000
(calculated at the Exchange Rate).
"FINAL REPAYMENT DATE" means the third anniversary of today's date
provided that if the term of the Loan Agreement shall be renewed,
continued or extended pursuant to Section 12.1 of the Loan Agreement,
the Final Repayment Date shall automatically be extended to the same
day.
"FINANCING AGREEMENTS" is defined in the Loan Agreement.
"FINANCE DOCUMENTS" means this Agreement, the Security Documents, the
Deed of Priorities and/or all other agreements, documents and
instruments at any time executed and/or delivered by any Obligor or
any Related Company in favour of Burdale (each a "FINANCE DOCUMENT").
"FOREIGN CURRENCY" means any currency other than Sterling which is
freely available and transferable.
"GAAP" means accounting principles, standards and practices generally
accepted in the United Kingdom as in effect from time to time.
"GIFL" means GeoLogistics International Finance Ltd., a limited
liability company organised under the laws of Ireland.
"GLA" means GeoLogistics Americas, Inc., a Delaware corporation.
"GLC" means GeoLogistics Corporation, a Delaware Corporation.
"GLC GUARANTEE" means the guarantee and indemnity executed or to be
executed by GLC in favour of Burdale in relation to the obligations
of the Company to Burdale.
"GL BERMUDA" means GeoLogistics Holdings (Bermuda) Limited, a company
incorporated in Bermuda.
"GL CANADA" shall mean GeoLogistics, Co., an unlimited liability
company under the laws of Nova Scotia, Canada.
"GLNS" means Bekins Worldwide Solutions, Inc., a Delaware
corporation.
"GLS" means GeoLogistics Services, Inc., a Delaware corporation.
"INELIGIBLE RECEIVABLES" means any Receivable:
(a) which does not arise from the actual and bona fide sale and
delivery of goods by the Company or rendering of services by
the Company in the ordinary course of its business which
transactions are completed in accordance with the terms and
provisions contained in any documents relating to such
transactions;
(b) which remains fully or partly unpaid after its Maturity Date
or such longer period as may be agreed by Burdale;
(c) owing by a single Account Debtor if Receivables representing
50% or more of the aggregate balance owing by such Account
Debtor to the Company are not Eligible Receivables by reason
of the operation of paragraph (b) above;
(d) with respect to which the Account Debtor is a director,
officer, employee, Subsidiary or affiliate of the Company;
(e) with respect to which the Account Debtor has or has asserted a
counterclaim or has a right of set off, to the extent of such
counterclaim or set off;
(f) with respect to which Burdale does not have a valid, equitable
assignment under the Finance Documents;
(g) as to which performance has not been completed by the Company
or as to which all goods and services in connection with such
Receivable have not been delivered to or performed for the
Account Debtor or which is not fully assignable;
(h) which has not been invoiced;
(i) with respect to which the Account Debtor is the subject of any
bankruptcy or insolvency proceeding in any jurisdiction or has
made an assignment for the benefit of creditors or whose
assets have been conveyed to a receiver, administrator,
trustee or other insolvency official;
(j) with respect to which the Account Debtor's obligation to pay
the Receivable is conditional upon the Account Debtor's
approval or is otherwise subject to any repurchase obligation
or right of return, as with sales made on a xxxx-and-hold,
guaranteed sale, sale-and-return, sale on approval (except
with respect to Receivables in connection with which Account
Debtors are entitled to return goods on the basis of the
quality of those goods) or consignment basis;
(k) with respect to which any of the representations and
warranties contained in Clause 8.3 proves to be incorrect in
any respect;
(l) owed by an Account Debtor incorporated or resident outside the
United Kingdom, unless such Receivable is subject to valid and
enforceable credit insurance payable to Burdale issued by an
insurer on terms and in an amount acceptable to Burdale as
determined by it in good faith and the aggregate invoice
values owed by that relevant Account Debtor are within the
insured limit;
(m) owed by an Account Debtor whose total indebtedness to the
Company, as determined by the Company in good faith, exceeds
any credit limit set by Burdale from time to time with respect
to that Account Debtor and communicated to the Company in
writing prior to the date of determination to the extent such
Receivable breaches that credit limit provided that any
reduction in the credit limit as to a particular Account
Debtor will not cause any Receivables owing by that Account
Debtor as of the date of such reduction not to qualify as
Eligible Receivables;
(n) where there are facts, events or occurrences which would
impair the validity or enforceability of or otherwise the
legal right to collect that Receivable or would give the
Account Debtor relating to that Receivable the legal right to
reduce the amount payable or delaying payment of that
Receivable; and
(o) which are not Sterling Receivables.
"L/CS" means letters of credit, merchandise purchase or other
guarantees which are from time to time either (a) issued or opened by
Burdale for the account of the Company or (b) with respect to which
Burdale has agreed to indemnify the issuer or guaranteed to the
issuer the performance by the Company of its obligations to such
issuer.
"L/C EXPOSURE" in relation to any L/C means an amount equal to 100%
of the face amount of such L/C and all other commitments and
obligations made or incurred by Burdale with respect to such L/C.
"L/C LIMIT" means the Facility Limit provided that at any time the
sum of the L/C exposure, the Canadian Letter of Credit Accommodations
(as defined in the Loan
Agreement) and the Letter of Credit Accommodations (as so defined)
shall not exceed the Sterling equivalent of $30,000,000 (calculated
at the Exchange Rate) at such time.
"L/C REQUEST" means a request for a Utilisation of the Receivables
Finance Facility by way of the issue of an L/C in substantially the
form set out in Schedule 2 Part III.
"LIBOR" means:
(a) the thirty day LIBOR sterling rate quoted on the first
Business Day of each month in the Financial Times, London
edition as conclusively determined by Burdale; or
(b) (if for any reason the Financial Times, London edition ceases
or fails to quote such a rate) Burdale's cost of funds from
whatever source it may reasonably request.
"LOAN AGREEMENT" means the loan and security agreement dated on or
about today's date between Congress as Lender and GLNS, BVL, GLA and
GLS as Borrowers.
"MARGIN" means 2.75%, PROVIDED THAT (a) effective from the beginning
of the interest period next following Burdale's receipt of financial
statements of GLC for any fiscal quarter of GLC (commencing with the
third fiscal quarter of GLC's fiscal year 2000 delivered in
accordance with the Loan Agreement, subject to paragraph (b) below,
the Margin shall be increased or decreased, as the case may be, to
the Margin as set forth below based on the EBITDA of GLC for the
consecutive four fiscal quarter period ended such fiscal quarter
calculated based on such financial statements for such quarter as
follows:
-------------------------- ------------------------------------------
MARGIN EBITDA OF GLC
-------------------------- ------------------------------------------
-------------------------- ------------------------------------------
3.00% Equal to or less than $10,000,000
-------------------------- ------------------------------------------
-------------------------- ------------------------------------------
2.75% Greater than $10,000,000 but
equal to or less than $30,000,000
-------------------------- ------------------------------------------
-------------------------- ------------------------------------------
2.5% Greater than $30,000,000
-------------------------- ------------------------------------------
and (b) the EBITDA amounts set forth above shall be reduced by that
portion of the EBITDA for the four (4) fiscal quarter period ended
any such fiscal quarter that is attributable to any Subsidiary of GLC
that has been sold or disposed of pursuant to a sale or disposition
permitted by this Agreement, the Loan Agreement or the Canadian Loan
Agreement.
"MATERIAL ADVERSE EFFECT" means an effect that results in or causes,
or has a reasonable likelihood of resulting in or causing, a material
adverse change in any of:
(a) the business, performance, operations or properties of the
Company and the Related Companies (other than GL Bermuda)
taken either individually or as a whole; and/or
(b) the ability of the Company or any Related Company (other than
GL Bermuda) to perform its respective obligations under any of
the Finance Documents; and/or
(c) the rights and remedies of Burdale under any Finance Document.
"MATURITY DATE" means in respect any Receivable the Business Day
which is, or immediately succeeds the date which is 90 days after the
date of the invoice in respect of such Receivable, save in respect of
Eligible Unbilled Receivables.
"MORTGAGED PROPERTY" means any Property which is from time to time
charged in favour of Burdale by way of a first legal mortgage.
"OBLIGATIONS" means any and all financial accommodations made to the
Company pursuant to this Agreement and all other obligations,
liabilities and indebtedness of every kind, nature and description
owing by any Obligor or Related Company to Burdale and/or its
affiliates, including principal, interest, charges, fees, costs and
expenses, however evidenced, whether as principal, surety, endorser,
guarantor or otherwise, whether arising under this Agreement or
otherwise, whether now existing or hereafter arising, whether arising
before, during or after the initial or any renewal term of this
Agreement, whether direct or indirect, absolute or contingent, joint
or several, due or not due, primary or secondary, liquidated or
unliquidated, secured or unsecured, and however acquired by Burdale.
"OBLIGOR" means the Company and any other person who guarantees
and/or grants security for any of the Company's indebtedness or other
obligations to Burdale at any time, other than a Related Company.
"OTHER ACCOUNTS" means the bank accounts of the Corporate Obligors
specified as Other Accounts in the Debenture and/or such other bank
accounts of the Corporate Obligors with Account Banks as Burdale may
permit.
"OTHER RECEIVABLES" means all Receivables which are not Sterling
Receivables.
"OUTSTANDING PURCHASE PRICE" means the aggregate from time to time of
the Purchase Prices of Eligible Receivables and Eligible Unbilled
Receivables paid to the Company in respect of which Burdale has not
received payment from the relevant Account Debtor or the Company.
"PAYMENT ACCOUNT" means such account in the name of Burdale, as may
be notified to the Company by Burdale from time to time.
"PERMITTED ACQUISITION" means any transaction, or any series of
related transactions by which any Corporate Obligor directly or
indirectly acquires a Subsidiary or any going business or all or
substantially all the assets of another person and which meets each
of the following criteria:
(a) the aggregate consideration to be paid by such Corporate
Obligor in connection with such transaction or transactions
together with all other consideration paid by all Corporate
Obligors in connection with any other Permitted Acquisition,
and by GL Canada and any Borrower (as defined in the Loan
Agreement) in connection with any transaction or series of
transactions by which GL Canada or such Borrower, as the case
may be, directly or indirectly has acquired a Subsidiary or
any going business or all or substantially all the assets of
another person during the term of this Agreement, does not
exceed $5,000,000 (or its equivalent in other currencies);
(b) no Event of Default exists or has occurred and is continuing
immediately prior to and after giving effect to such
transaction or transactions; and
(c) Total Excess Availability is not less than Ten Million Dollars
($10,000,000) (or its equivalent in other currencies) after
giving effect to such transaction or transactions.
Notwithstanding anything to the contrary set forth herein, Burdale
shall have no obligation to include any Receivable acquired pursuant
to a Permitted Acquisition as an Eligible Receivable.
"PROPERTY" means the Corporate Obligors' freehold, leasehold and
rented premises and land from time to time, wherever situated and in
any jurisdiction.
"PURCHASE COMMISSION" is defined in Clause 7.2.
"PURCHASE DATE" in relation to a Purchased Receivable means the date
of delivery of a Purchase Request by the Company with respect to such
Purchased Receivable.
"PURCHASE PRICE" means the purchase price to be paid by Burdale for
Purchased Receivables being:
(a) 85% of the face value of each Eligible Receivable; and
(b) 65% of Eligible Unbilled Receivables,
to be purchased under the Receivables Finance Facility less maximum
discounts, credits and allowances of any nature which may be taken by
or granted to any Account Debtor or other person in connection with
such Eligible Receivable or Eligible Unbilled Receivable as the case
may be.
"PURCHASE RATE" means the aggregate of LIBOR and the Margin.
"PURCHASE REQUEST" means a Request for a Utilisation of the
Receivables Finance Facility in substantially the form set out in
Schedule 2 Part I.
"PURCHASED RECEIVABLE" means a Receivable purchased or agreed to be
purchased by Burdale from the Company in accordance with the terms of
this Agreement.
"RECEIVABLE" means, at any time, the aggregate present and future
obligations of any debtor of the Company for the payment of money to
the Company at such time together with all connected rights, claims,
deposits and payments.
"RECEIVABLES FINANCE FACILITY" is defined in Clause 3.1.
"RECEIVABLES INFORMATION" means the information regarding Receivables
provided to Burdale pursuant to Clause 8.
"RECEIVER" is defined in the Debenture.
"RELATED COMPANIES" means:
(a) GLC; and
(b) GL Bermuda,
(each a "RELATED COMPANY").
"REQUEST" means a request substantially in the form set out in the
relevant Part of Schedule 2 for a Utilisation of the Facility.
"SECURITY DOCUMENTS" means the Debenture, the GLC Guarantee and any
other guarantee or security documents executed in favour of Burdale
from time to time in relation to the obligations or indebtedness of
the Company.
"SENIOR NOTES" is defined in the Loan Agreement.
"STERLING" and "(L)" means the lawful currency for the time being
of the United Kingdom.
"STERLING RECEIVABLES" means all Receivables denominated in Sterling
(each a "STERLING RECEIVABLE").
"SUBSIDIARY" has the meaning given to that term by Section 736 of the
Companies Xxx 0000 and includes a "Subsidiary Undertaking" as defined
in Section 258 of the Companies Xxx 0000 (inserted by Section 21 of
the Companies Act 1989).
"TAXES" includes all present and future income and other taxes,
levies, assessments, deductions, charges and withholdings of whatever
nature together with interest, additions to tax, penalties and fines
in relation to such items and "TAX" and "TAXATION" will be construed
accordingly.
"TOTAL EXCESS AVAILABILITY" means at any time, the aggregate of the
UK Excess Availability, the US Excess Availability and the Canadian
Excess Availability at such time.
"UK DAILY EXCESS AVAILABILITY" means from time to time the amount at
such time by which A exceeds B where:
A =
(1) 85% of the face value of the Eligible
Receivables and 65% of the face value of the
Eligible Unbilled Receivables less maximum
discounts, credits and allowances of any nature
which may be taken by or granted to any Account
Debtor or any other person in connection with
such Eligible Receivables or Eligible Unbilled
Receivables as the case may be; LESS
(2) the amount of Availability Reserves established
by Burdale; and
B = The aggregate amount of:
(3) Outstanding Purchase Price; and
(4) all L/C Exposures.
"UK EXCESS AVAILABILITY" means from time to time the amount at such
time by which A exceeds B where:
A =
(1) 85% of the face value of the Eligible
Receivables and 65% of the face value of the
Eligible Unbilled Receivables less maximum
discounts, credits and allowances of any nature
which may be taken by or granted to any Account
Debtor or any other person in connection with
such Eligible Receivables or Eligible Unbilled
Receivables as the case may be; LESS
(2) the amount of Availability Reserves established
by Burdale; and
(3) the sum of (i) the amount of all then
outstanding and unpaid Obligations, (ii) the
aggregate amount of all trade payables of the
Company which are more than sixty (60) days past
due as of the last day of the immediately
preceding calendar month and (iii) the aggregate
amount of the Company's past due lease and notes
payable; and
B = The aggregate amount of:
(1) Outstanding Purchase Price; and
(2) all L/C Exposures.
"US BORROWERS" is defined in the Loan Agreement.
"US EXCESS AVAILABILITY" is defined in the Loan Agreement.
"US FACILITY" means the credit facility in the maximum amount of
$50,000,000 (which may be adjusted in accordance with the terms of
the Loan Agreement and the Canadian Loan Agreement) provided by
Congress to the US Borrowers pursuant to the Loan Agreement.
"UTILISATION" means a utilisation of a Facility under this Agreement
(with the delivery of a Purchase Request and the payment of Purchase
Price by Burdale pursuant to a Cash Request constituting separate
Utilisations of the Receivables Finance Facility).
"UTILISATION DATE" in relation to a Utilisation means the date on
which such Utilisation is made (being in relation to any Utilisation
of the Receivables Finance Facility, both the Purchase Date and the
date on which any payment of Purchase Price is made to the Company
pursuant to a Cash Request).
"VAT" means Value Added Tax imposed in the United Kingdom and any
equivalent tax applicable in any European jurisdiction.
1.2 CONSTRUCTION
(a) In this Agreement, unless the contrary intention appears, a
reference to:
(i) an "AFFILIATE" of any person includes any Subsidiary,
group member, shareholder, director or employee of
such person;
(ii) "ASSETS" includes properties, revenues and rights of
every description, both present and future;
(iii) an "AUTHORISATION" or a "CONSENT" includes an
approval, authorisation, consent, exemption, filing,
licence, registration and resolution, in each case
given or made in writing;
(iv) financial statements or accounts includes the notes
to such statements or accounts;
(v) a "MONTH" means a calendar month starting on any day;
(vi) a "REGULATION" includes any directive, guideline,
regulation, request or rule (whether or not having
the force of law) of any governmental agency, body,
department or other regulatory or self-regulatory
authority;
(vii) an enactment (be it express or implied) includes
references to any amendment, re-enactment, and/or
legislation subordinate to that enactment and/or any
permission of whatever kind given under that
enactment;
(viii) a Finance Document or other document is a reference
to that Finance Document or other document as
amended, novated, supplemented or replaced (in whole
or in part);
(ix) a "PERSON" includes any individual, company,
corporation, partnership, firm, joint venture,
association, organisation, trust, state or state
agency (in each case whether or not having separate
legal personality);
(x) any party or person includes any person deriving
title from it and any successor, transferee and
assignee;
(xi) a time of day is a reference to London time; and
(xii) Clauses and Schedules are to the clauses of and
schedules to this Agreement.
(b) Unless the contrary intention appears, a term used in any
other Finance Document or in any notice relating to any
Finance Document has the same meaning in that Finance Document
or notice as in this Agreement.
(c) The headings in this Agreement do not affect its
interpretation.
(d) Save where the context requires otherwise, words in the
singular shall import the plural and vice-versa.
2. CONDITIONS PRECEDENT
2.1 DOCUMENTARY CONDITIONS
The obligations of Burdale to the Company under this Agreement are
subject to the condition precedent that Burdale shall have received
all of the documents and evidence specified in Schedule 1 in a form
and substance satisfactory to it.
2.2 FURTHER CONDITIONS
The obligations of Burdale in respect of any Utilisation are subject
to the further conditions precedent that both on the date of the
relevant Request and the proposed Utilisation Date:
(a) the representations and warranties set out in Clauses 8 and 13
to be repeated on such dates are true and correct in all
material respects; and
(b) no Default has occurred and remains outstanding or would
result from the making of such Utilisation.
3. THE FACILITY
3.1 AVAILABLE FACILITY
Subject to the terms of this Agreement and in reliance on the
representations and warranties set out in Clauses 8 and 13, Burdale
agrees to make available to the Company a Receivables Finance
Facility pursuant to which Burdale will from time to time during the
Availability Period (i) purchase Receivables from the Company and
(ii) issue, or procure the issue of, L/Cs for the account of the
Company (the "RECEIVABLES FINANCE FACILITY").
3.2 PURPOSE
The Company will use the Facility only for its general operating,
working capital and other proper corporate purposes and always in a
manner which is not inconsistent with the Finance Documents. Without
affecting the obligations of the Company in any way, Burdale is not
obliged to monitor or verify the application of the Facility.
4. RESTRICTIONS ON UTILISATIONS
4.1 LETTERS OF CREDIT
No Request may be delivered for an L/C to be issued pursuant to the
Receivables Finance Facility unless and until the form of L/C has
been approved by Burdale, the relevant issuer and the proposed
beneficiary of such L/C.
4.2 OVERALL LIMIT
The aggregate amount of:
(a) Outstanding Purchase Price; and
(b) all L/C Exposures.
shall not at any time exceed the Facility Limit.
4.3 SPECIFIC LIMITS
(a) UNBILLED LIMIT: The Outstanding Purchase Price in relation to
Eligible Unbilled Receivables shall not at any time exceed
L1,500,000.
(b) L/C UTILISATIONS: The aggregate amount of all L/C Exposures
shall not at any time exceed the L/C Limit.
(c) AVAILABILITY: Subject to paragraph (d) below, the aggregate
amount of:
(i) Outstanding Purchase Price; and
(ii) all L/C Exposures,
shall not at any time exceed the sum of:
(1) 85% of the face value of the Eligible
Receivables and 65% of Eligible Unbilled
Receivables less maximum discounts, credits
and allowances of any nature which may be
taken by or granted to any Account Debtor or
any other person in connection with the
Eligible Receivables or Eligible Unbilled
Receivables as the case may be; LESS
(2) the amount of Availability Reserves
established by Burdale,
at such time.
(d) In the event that Section 2.1(b)(i)(C) of the Loan Agreement
restricts the aggregate amount of the Loans, Letter of Credit
Accommodations and other Obligations (each as defined in the
Loan Agreement) outstanding at any time under the Loan
Agreement then the aggregate amount of:
(i) Outstanding Purchase Price; and
(ii) all L/C Exposures,
shall be restricted to such amount which Burdale deems
necessary to ensure compliance with Section 2.1(b)(i)(C) of
the Loan Agreement.
4.4 PROHIBITION
No Utilisation may be made by the Company which would cause the
provisions of this Clause 4 to be breached.
4.5 BURDALE'S RIGHTS NOT AFFECTED
In the event that the aggregate amount of Outstanding Purchase Price
and L/C Exposures exceeds the amounts available under the relevant
Availability Limit(s) or the Facility Limit, as applicable, such
event shall not limit, waive or otherwise affect any rights or
Burdale in that circumstance or on any future occasions.
4.6 COMPANY'S LOAN ACCOUNT(S)
Burdale will maintain one or more loan accounts, receivable accounts
and foreign exchange accounts on its books in which will be recorded
(a) all Utilisations of the Receivables Finance Facility and other
liabilities of the Company pursuant to the Finance Documents and
details of the Collateral, (b) all payments made by or on behalf of
the Company and (c) all other appropriate debits and credits as
provided in this Agreement, including, without limitation, fees,
charges, costs, expenses and interest. All
entries in such account(s) shall be made in accordance with Burdale's
customary practices as in effect from time to time.
4.7 STATEMENTS
Burdale will render to the Company each month a statement setting
forth the balance in the Company's loan account, receivables accounts
and foreign exchange accounts maintained by Burdale for the Company
pursuant to the provisions of this Agreement, including principal,
commission, interest, fees, costs and expenses. Each such statement
may be subject to subsequent adjustment by Burdale but shall, in the
absence of manifest error or omission, be considered correct and
deemed accepted by the Company and will be conclusively binding upon
the Company as an account stated except to the extent that Burdale
receives a written notice from the Company of any specific exception
of the Company within 30 days after the date such statement has been
mailed by Burdale. Until such times as Burdale has rendered to the
Company a written statement as provided above, the balance in the
Company's loan accounts, invoice discount accounts and foreign
exchange accounts will be prima facie evidence of the amounts due and
owing to Burdale by the Company.
5. UTILISATION OF FACILITY
5.1 AVAILABILITY OF RECEIVABLES FINANCE FACILITY
(a) Subject to the terms of this Agreement, the Company shall
offer to sell its Receivables to Burdale by delivering to
Burdale from time to time duly completed Purchase Requests
(together with all deeds and documents referred to in such
Purchase Request), delivery of which shall oblige the Company
to sell the Receivables stated in such Purchase Request upon
the terms and subject to the conditions of this Agreement.
(b) A Purchase Request will not be regarded as having been duly
completed unless it is in substantially the form set out in
Schedule 2 Part I.
(c) As soon as reasonably practicable following delivery of a
Purchase Request, Burdale shall determine the Purchase Price
for the Receivables specified in such Purchase Request and
will, upon being requested by the Company, advise the Company
of such determination.
5.2 UTILISATION OF RECEIVABLES FINANCE FACILITY
(a) Subject to the terms of this Agreement, the Company may from
time to time request that Burdale pay sums to the Company of
up to the amount of any unpaid Purchase Price by delivering a
duly completed Cash Request to Burdale not later than 11.00
a.m. on the proposed Utilisation Date for such payment.
(b) A Cash Request will not be regarded as having been duly
completed unless it is in substantially the form set out in
Schedule 2 Part II and, in particular, specifies:
(i) the proposed Utilisation Date, being a Business Day
falling during the Availability Period;
(ii) the amount of the sum to be paid by Burdale which
must be less than or equal to the aggregate of unpaid
Purchase Price; and
(iii) if not already notified to Burdale, the details of
the Other Account into which the payment is to be
made on the Utilisation Date.
(c) Payments made by Burdale pursuant to a Cash Request shall be
deemed to be payments of any unpaid Purchase Price to the full
extent of such unpaid Purchase Price.
(d) Burdale's obligation to pay the Purchase Price of any
Receivable (or any unpaid portion of it as the case may be)
shall be terminated on the earlier of the Actual Day of
Payment and the Maturity Date of such Receivable.
5.3 L/C UTILISATIONS
(a) Subject to the terms of this Agreement, the Company may
request the issue of an L/C by delivering a duly completed L/C
Request to Burdale not later than 11.00 a.m. at least one
Business Day before the proposed Utilisation Date for that
L/C.
(b) An L/C Request will not be regarded as having been duly
completed unless it is substantially in the form attached in
Schedule 2 Part III and, in particular, specifies:
(i) the proposed Utilisation Date, being a Business Day
falling during the Availability Period;
(ii) the amount of the L/C required, the L/C Exposure of
which must be equal to or less than the
undrawn/unutilised amount of the Receivables Finance
Facility and within the relevant Availability Limits
as at the proposed Utilisation Date;
(iii) if not already notified to Burdale, the details of
the beneficiary, payee or addressee of such L/C.
5.4 GENERAL PROVISIONS REGARDING L/Cs
(a) Nothing in this Agreement shall be deemed or construed to
grant the Company any right or authority to pledge the credit
of Burdale in any manner. Burdale shall have no liability of
any kind with respect to any L/C provided by an issuer other
than Burdale unless Burdale has duly executed and delivered to
such issuer the application or a guarantee or indemnification
in writing with respect to such L/C. The Company shall be
bound by an interpretation made in good faith by Burdale, or
any other issuer or correspondent under or in connection with
any L/C or any documents, drafts or acceptances in relation to
any L/C, notwithstanding that such
interpretation may be inconsistent with any instructions of
the Company. Burdale shall have the sole and exclusive right
and authority to, and the Company shall not:
(i) at any time an Event of Default exists or has
occurred and is continuing:
(1) approve or resolve any questions of
non-compliance of documents;
(2) give any instructions as to acceptance or
rejection of any documents or goods; or
(3) execute any and all applications for
steamship or airway guarantees, indemnities
or delivery orders and at all times;
(ii) at any time:
(1) grant any extensions of the maturity of,
time of payment for, or time of presentation
of, any drafts, acceptances, or documents;
and
(2) agree to any amendments, renewals,
extensions, modifications, changes or
cancellations of any of the terms or
conditions of any of the applications, L/Cs,
or documents, drafts or acceptances in
relation to any L/C or any letters of credit
included in the Collateral. Burdale may take
such actions either in its own name or in
the Company's name.
(b) Any rights, remedies, duties or obligations granted
or undertaken by the Company to any issuer or
correspondent in any application for any L/C, or any
other agreement in favour of any issuer or
correspondence relating to any L/C, shall be deemed
to have been granted or undertaken by the Company to
Burdale. Any duties or obligations undertaken by
Burdale to any issuer or correspondence in any
application for any L/C, or any other agreement by
Burdale in favour of any issuer or correspondence
relating to any L/C, shall be deemed to have been
undertaken by the Company to Burdale and to apply in
all respects to the Company.
(c) None of Burdale, any L/C issuer (or any of their
respective correspondents) or any advising,
negotiating or paying bank with respect to any L/C
shall be responsible in any way for:
(i) the performance by any beneficiary under any
L/C of that beneficiary's obligations to the
Company; or
(ii) the form, sufficiency, correctness,
genuineness, authority of any person signing
or the legal effect of any documents called
for under any L/C if such documents appear
on their face to be in order.
5.5 DEEMED PAYMENT
All payments made by Burdale in accordance with the terms of any L/C
or any guarantee or indemnity given by Burdale to the issuer of any
L/C (as the case may be) shall be deemed to be a payment of Purchase
Price to the Company in an amount equal to such payment, drawn down
on the date of such payment and subject to the provisions of this
Agreement with respect to Outstanding Purchase Price (including,
without limitation, as to commission and repayment).
6. REPAYMENT AND PREPAYMENT
6.1 RECEIVABLES FINANCE FACILITY
(a) If in relation to a Purchased Receivable Burdale determines on
the Maturity Date in respect of such Purchased Receivable that
it has not received payment in accordance with Clause 9.1 of
the full amount of such Purchased Receivable, the Company
shall, on demand by Burdale pay to Burdale an amount equal to
the Outstanding Purchase Price of such Purchased Receivable
for which payment has not been received PROVIDED THAT this
provision shall not restrict (nor oblige) Burdale in any way
in or from pursuing and obtaining payment in respect of such
Purchased Receivable from the Account Debtors or otherwise
(which payment shall be made into the Blocked Accounts) and
the Company undertakes that it will do all such reasonable
acts or things necessary or desirable to help Burdale in
pursuing and obtaining such payment.
(b) Burdale shall be entitled to deduct from payments made by
Account Debtors and/or the Company into the Blocked Accounts
in respect of Purchased Receivables the then Outstanding
Purchase Price in respect of such Purchased Receivables and
the balance remaining after such deduction shall be applied in
accordance with Clause 6.2.
6.2 OTHER UTILISATIONS
Subject as provided below all amounts standing to the credit of the
Blocked Accounts from time to time following the deductions referred
to in Clause 6.1(b) shall be applied as follows:
(a) FIRST in payment of any fees, costs and expenses due from the
Company to Burdale under the Finance Documents;
(b) SECOND in payment of all Purchase Commission (or in making
provision for Purchase Commission which will fall due for
payment on the last Business Day of the current calendar
month);
(c) THIRD in or towards satisfaction of any other payment
obligation of the Company under the Finance Documents; and
(d) FOURTH to the Company by way of payment into such Other
Account as the Company may specify to Burdale in writing from
time to time.
Notwithstanding the above, at all times following the occurrence of
an Event of Default and whilst the same is continuing, amounts
standing to the credit of the Blocked Accounts shall be applied to
such of the liabilities of the Company under the Finance Documents
and in such order as Burdale may in its absolute discretion
determine.
6.3 REUTILISATION
Subject to the terms of this Agreement, all amounts of Outstanding
Purchase Price recovered and paid to Burdale, may, subject to the
terms of this Agreement, be reutilised as Utilisations of the
Receivables Finance Facility.
6.4 PREPAYMENT
If at any time the outstanding Utilisations or any part of them cause
any Availability Limit to be exceeded then the Company will
immediately pay into the Payment Account, as cash collateral in
respect of Outstanding Purchase Price and/or any contingent
obligation of Burdale in relation to any L/C or other Utilisation, to
the extent required to ensure compliance with that Availability Limit
and, until such time as that Availability Limit is no longer
breached, no further Utilisations may be requested (including, for
the avoidance of doubt, pursuant to a Cash Request) or will, at
Burdale's option, be made or issued.
6.5 REDUCTION OF FACILITY LIMIT
At the request of the Company by giving not less than ten Business
Day's prior written notice to Burdale, the Facility Limit may from
time to time be reduced provided that on or before the effective date
for such reduction the Company shall pay to Burdale:
(a) such amount as may be necessary as cash collateral for
Outstanding Purchase Price and/or Burdale's contingent
obligations under any issued L/C to ensure that the Company
remains in compliance with the Availability Limits; and
(b) a fee calculated by applying to the amount of the reduction
the applicable percentage set out in column (2) below:
(1) (2)
DATE OF REDUCTION APPLICABLE PERCENTAGE
On or before the first anniversary of today's 2%
date
After the first but on or before the second 1%
anniversary of today's date
After the second but on or before the third 0.5%
anniversary of today's date
Any exercise by Burdale of its rights under Clause 15.2(b) and/or
15.3 and/or the operation of Clause 12.1 shall be deemed for the
purposes of paragraph (b) above to be
a reduction in the Facility Limit in an amount equal to the amount of
the Facility so cancelled.
6.6 FINAL REPAYMENT
The Company will, on the Final Repayment Date, pay to Burdale in full
all outstanding and unpaid liabilities under the Finance Documents
(whether by way of principal, interest, commission, fees, costs,
expenses or otherwise) and shall pay to Burdale such amount as is
necessary to provide full cash collateral for Outstanding Purchase
Price and any contingent obligations which Burdale may have in
respect of any L/C or other outstanding Utilisation. Such payment
shall be denominated in Sterling and will be made by wire or other
automatic transfer to the Payment Account. If the amounts so paid are
received in the Payment Account later than 1.00 p.m. on the Final
Repayment Date then the Company will pay interest on such amounts to
Burdale at the Default Rate until payment has been made in full.
7. INTEREST AND COMMISSION
7.1 DEFAULT INTEREST
(a) Upon the occurrence of an Event of Default and whilst the same
is continuing unremedied or unwaived for 5 Business Days after
notification by Burdale to the Company, all amounts
outstanding under this Agreement shall bear interest (both
before and after judgment) at the Default Rate.
(b) Interest at the Default Rate will be compounded at the end of
each period designated by Burdale and will be determined by
Burdale on the first Business Day of each such period.
7.2 PURCHASE COMMISSION
The Company shall pay to Burdale commission in respect of each
Purchased Receivable at a rate equivalent to the Purchase Rate
applied to the Outstanding Purchase Price for such Receivable from
the date on which Burdale paid such Purchase Price to the Company
down to the Actual Date of Payment (the "PURCHASE COMMISSION").
Burdale shall calculate the Purchase Commission on a daily basis and
it shall be paid by the Company monthly in arrears on the first
Business Day of each month.
8. RECEIVABLES, STOCK AND EQUIPMENT
8.1 REPORTING REGARDING RECEIVABLES
The Company will provide Burdale with the following documents with
all amounts expressed in Sterling and otherwise in a form
satisfactory to Burdale:
(a) on a daily basis with a schedule of Receivables, collections
received and credits issued and on a monthly basis with a
stock report substantially in the form set out
in Schedule 3 Part II together with such further information
regarding Receivables as Burdale may reasonably request;
(b) as soon as practicable and in any event within 15 days of the
end of each month or more frequently as Burdale may reasonably
request:
(i) ageings of creditors and Receivables with details of
all dated invoices; and
(ii) an analysis of preferential creditors in
substantially the form set out in Schedule 3 Part
III;
all in a format to be agreed with Burdale (acting reasonably).
(c) promptly from time to time as Burdale may reasonably request:
(i) copies of shipping and delivery documents relating to
stock and Equipment;
(ii) copies of the ageings of all Receivables paid to the
Company, on a monthly basis by invoice date;
(iii) full details of all Account Debtors (including their
addresses) together with copies of customer
statements and credit notes, remittance advices,
collection schedules and reports and copies of
deposit slips and all monthly bank statements of the
Company and its Subsidiaries or statements for such
other period as Burdale may require;
(iv) such other reports regarding the Collateral as
Burdale may reasonably request from time to time;
(d) on a daily basis, details of any Receivables which have become
or are purported to be, by the relevant Account Debtor or
otherwise, subject to any prohibitions or restriction on
charge or assignment; and
(e) immediately upon becoming aware of the same, details of any
creditor of the Company whose ordinary terms of business
include title retention provisions which are not already
specified in Schedule 3 Part I.
8.2 REPORTING REGARDING ACCOUNT DEBTORS
(A) NOTIFICATION: The Company will notify Burdale promptly of:
(i) any material delay in the Company's performance of
any of its obligations to any Account Debtor or the
assertion of any claims, offsets, defences or
counterclaims by any Account Debtor, or any material
disputes with Account Debtors, or any settlement,
adjustment or compromise of any such matter;
(ii) all material adverse information known to the Company
relating to the financial condition of any Account
Debtor; and
(iii) any event or circumstance which, to the Company's
knowledge, would cause Burdale to consider any then
existing Receivables as no longer constituting
Eligible Receivables or Eligible Unbilled Receivables
as the case may be.
(B) DISPUTES AND SETTLEMENTS WITH ACCOUNT DEBTORS: No credit,
discount, allowance or extension or agreement for any of the
foregoing will be granted to any Account Debtor without
Burdale's consent, except in the ordinary course of the
Company's business in accordance with proper practices and
policies operated by the Company prior to the date of this
Agreement. At any time while an Event of Default is
outstanding, Burdale will, at its option, have the exclusive
right to settle, adjust or compromise any claim, offset,
counterclaim or dispute with any Account Debtor and to grant
any credits, discounts or allowances in relation to such
matters.
8.3 REPRESENTATIONS AND UNDERTAKINGS AS TO RECEIVABLES
With respect to each Receivable, the Company represents and warrants
to Burdale that and undertakes to ensure that at all times:
(a) the amounts shown on any invoice delivered to Burdale and in
any Receivables Information delivered to Burdale are true and
complete;
(b) no payments have been or will be made on such Receivable
except payments collected by the Company and immediately
transmitted or delivered to Burdale or elsewhere pursuant to
the terms of this Agreement;
(c) no credit, discount, allowance or extension or agreement for
any of the foregoing will be granted to any Account Debtor
except as reported to and agreed by Burdale except for
credits, discounts, allowances or extensions made or given in
the ordinary course of the Company's business in accordance
with its proper practices and policies operated prior to
today's date as disclosed to Burdale in writing;
(d) to the best of the Company's knowledge, there are no set-offs,
deductions, defences, counterclaims or disputes existing or
asserted with respect to such Receivable except as reported to
and agreed by Burdale;
(e) none of the transactions giving rise to any Receivable breach
any applicable law or regulation and all documentation
relating to such Receivable is legally enforceable in
accordance with its terms;
(f) each Receivable is genuine, is and will be in all respects
what it purports to be, and is not the subject of a court
judgment;
(g) each Receivable represents undisputed, bona fide
transaction(s) completed in accordance with the terms and
provisions contained in any documents delivered to Burdale
with respect to such Receivable;
(h) the amounts shown on the relevant Receivables Information, the
Company's books and records and all invoices and statements
which may be delivered to Burdale with respect thereto are
actually and absolutely owing to the Company and are not in
any way contingent;
(i) to the best of the Company's knowledge, there are no facts,
events or occurrences which in any way impair the validity or
enforceability of any such Receivable or tend to reduce the
amount payable in respect of such Receivable as shown on the
relevant Receivables Information, the Company's books and
records and all invoices and statements delivered to Burdale
with respect to such Receivable;
(j) to the best of the Company's knowledge, all Account Debtors
have the capacity to contract and are solvent;
(k) the services furnished and/or goods sold giving rise to each
Receivable are not subject to any Encumbrance (except for an
Encumbrance which is permitted by Clause 14(g)); and
(l) to the best of the Company's knowledge, there are no
proceedings or actions which are threatened or pending against
any Account Debtor which might reasonably be expected to
result in a material adverse change in such Account Debtor's
financial condition.
8.4 VERIFICATION
Burdale will have the right from time to time, in the name of any
nominee, to verify the validity, amount or any other matter relating
to any Receivable or other Collateral, by mail, telephone, facsimile
or otherwise.
8.5 RIGHTS AFTER AN EVENT OF DEFAULT
(A) DEALING WITH COLLATERAL AND RECEIVABLES: Burdale may, at any
time that a Default has occurred and is continuing and without
prejudice to any of its rights under Clause 15.2 or otherwise
under this Agreement or any other Finance Document:
(i) extend the time of payment of, compromise, settle or
adjust for cash, credit, return of merchandise or
otherwise, and upon any terms or conditions, any and
all Receivables or other obligations included in the
Collateral and thereby discharge or release any
Account Debtor or any other party or parties in any
way liable for payment of any Receivable without
affecting any of the Receivables, demand or enforce
payment of any Receivables, but without any duty to
do so, and Burdale will not be liable for its failure
to
enforce the payment of any Receivable nor for the
negligence of its agents or attorneys with respect to
any Receivable; and
(ii) take whatever other action Burdale may deem necessary
for the protection of its interests in the
Collateral.
(B) NOTICE TO DEBTORS: At any time that a Default is outstanding,
Burdale or its nominees may, at Burdale's discretion do any of
the following:
(i) having given prior notification to the Company,
notify any or all Account Debtors that the
Receivables have been assigned to Burdale and that
payments in respect of Receivables are to be
redirected to such account as is specified by
Burdale;
(ii) request the Company to give the notification referred
to in Clause 8.5(b)(i) above and/or to ensure that
all invoices and statements in respect of Receivables
issued to the Account Debtors state the information
referred to in Clause 8.5(b)(i); and
(iii) direct any or all relevant Account Debtors to make
all payments in respect of Receivables direct to
Burdale at such account as Burdale may specify.
8.6 BURDALE'S RIGHT TO CURE
Burdale may, at its option:
(a) after giving five days notice to the Company, cure any default
by the Company under any agreement with an Account Debtor in
respect of a Receivable (other than bona fide disputes in the
ordinary course of the Company's business where no Event of
Default has occurred and is continuing) or under any other
agreement with a third party as may be required by Burdale in
good faith to facilitate the collection of the Receivables or
to enable Burdale to have access to any of the Collateral or
any Equipment;
(b) after giving five days notice to the Company, pay or make a
bond in respect of or appeal any judgment entered into against
the Company which, upon execution, attachment or the exercise
of any similar remedy in respect of such judgment, would
result in an Encumbrance being imposed on the Collateral or
would impair Burdale's ability to obtain possession of,
realise or collect any of the Collateral;
(c) discharge taxes, Encumbrances or other encumbrances at any
time levied on or existing with respect to the Collateral; and
(d) pay any amount, incur any expense or perform any act including
without limitation the payment to any creditors in respect of
plant and/or machinery, which, in Burdale's judgment, is
necessary or appropriate to reserve, protect, insure or
maintain the Collateral and the rights of Burdale with respect
to it.
Burdale may charge any monies so expended or costs so incurred by it
to the Company's account, such amounts to be repayable by the Company
on demand. Burdale will be under no obligation to effect any such
cure or payment or incur any such cost and will not, by doing so, be
deemed to have assumed any obligation or liability of the Company.
Any payment made or other action taken by Burdale under this Clause
will be without prejudice to any right it may have to assert an Event
of Default under this Agreement and to proceed accordingly.
8.7 ACCESS TO PROPERTY
From time to time as requested by Burdale on one Business Day's
notice (for the purpose of carrying out an audit in accordance with
Clause 14(j) and in the case of emergency as determined by Burdale)
(but subject to Clause 16.1(g) regarding daily charge rates), at the
cost and expense of the Company:
(a) Burdale or its nominees will have complete access to all of
the Company's Property during normal business hours and having
given prior notice to the Company, or at any time and without
notice to the Company if an Event of Default is outstanding,
for the purposes of inspecting, verifying and auditing the
Collateral and all of the Company's books and records;
(b) the Company will promptly furnish to Burdale or its nominees
such copies of or extracts from such books and records as may
be reasonably requested from the Company; and
(c) Burdale or its nominees may have access to, during normal
business hours, and use, such of the Company's personnel,
equipment, supplies and Property as may be reasonably
necessary for the purpose of inspecting, verifying and
auditing the Collateral and all of the Company's books and
records and if an Event of Default has occurred and is
continuing for the collection of the Receivables and the
realisation of the other Collateral.
8.8 BURDALE'S DISCLAIMER
Burdale will not be responsible for the safekeeping of, any loss or
damage to, any diminution in value of or any act or default of any
carrier, warehouseman, bailee or other person in relation to the
stock, finished goods, Equipment or Receivables.
9. COLLECTION OF RECEIVABLES
9.1 FLOW OF FUNDS
Subject to Clause 9.2, the Company undertakes that during the period
commencing on the date of this Agreement and ending when all its
liabilities under the Finance Documents have been discharged in full
and Burdale is under no further obligation under any of the Finance
Documents:
(a) the Company will collect as agent and trustee for Burdale all
Receivables and immediately pay (or procure that payment is
made) all amounts due:
(i) in respect of each Sterling Receivable, into the
Blocked Accounts; and
(ii) in respect of each other Receivable, into an Other
Account,
provided however that until payment into the relevant Charged
Account it will hold all money so received upon trust for
Burdale and will not commingle in any Charged Account any
monies which are not Receivables or which are not payable to
Burdale;
(b) without prejudice to the Company's obligations under
Clause14(l) and Clause15.1(b), in the event that any Account
Debtor makes a payment in respect of Receivables into another
Charged Account not in accordance with paragraph (a) above,
the Company will ensure that the amounts representing such
payment are promptly transferred into the relevant Charged
Account and will immediately direct the relevant Account
Debtor to make all future payments into such relevant Charged
Account;
(c) all the transfers and collections referred to in paragraphs
(a) and (b) above shall be carried out daily prior to the
occurrence of any Default and thereafter at such intervals as
Burdale may, at its discretion, specify to the Company; and
(d) in the event that during any three month period the average of
amounts due in respect of Other Receivables (converted into
Sterling at the Exchange Rate if necessary) is equal or
greater than 10% of all amounts due in respect of Receivables
(converted into Sterling at the Exchange Rate if necessary)
during such period, the Company will promptly at Burdale's
request:
(i) provide Burdale with security over further bank
accounts (in relation to receipts in the relevant
currency) in London (the "NEW ACCOUNTS") on
substantially the same terms as the security provided
by the Company over the Blocked Accounts in the
Debenture; and
(ii) immediately direct all relevant Account Debtors to
pay all amounts due in respect of the Other
Receivables into the relevant New Account.
9.2 FAILURE OF DEBENTURE
In the event that the Debenture in respect of any Account Bank is
not, at any time, effective or is not in full force and effect, the
Company will (unless otherwise directed by Burdale and without
prejudice to Burdale's rights and remedies under the Finance
Documents), for so long as the Debenture is ineffective or not in
full force and effect and ending on the date when all the liabilities
of the Company under the Finance Documents have been repaid or
discharged in full and Burdale is under no further obligation under
any of the Finance Documents, collect as agent and trustee for
Burdale all Receivables which would otherwise have been payable into
the Blocked Accounts and immediately
pay (or procure the payment of) all amounts due in respect of those
Receivables into the Payment Account.
9.3 REIMBURSEMENT
The Company agrees to reimburse Burdale on demand for any liability
of Burdale to any Account Bank or any other bank or person involved
in the transfer of funds to or from the Blocked Accounts arising out
of Burdale's payments to or indemnification of that bank or person,
and this obligation to reimburse shall survive the termination or
non-renewal of this Agreement.
9.4 EXCESS AMOUNTS
Any amounts received by Burdale from or for the account of the
Company in excess of the amounts then due and payable by the Company
will be dealt with in accordance with the terms of Clause 6 and the
Debenture.
9.5 TIME OF APPLICATION
For the purposes of calculating any Purchase Commission, payments or
other funds received by Burdale will be applied (conditional upon
final collection) in satisfaction or reduction of the Company's
liabilities under the Finance Documents one (1) Business Day
following the date of receipt of funds by Burdale in the Payment
Account. For the purposes of calculating the Facility Limit such
payments will be applied (conditional upon final collection) in
satisfaction or reduction of the Company's liabilities under the
Finance Documents on the Business Day of receipt by Burdale in the
Payment Account, provided that such payments are received within
sufficient time (in accordance with Burdale's usual and customary
practices as in effect from time to time) to credit the Company's
loan and receivable and foreign exchange account on such day, and if
not, then on the next Business Day.
10. PAYMENTS AND TAXES
10.1 PAYMENTS
(a) Subject to Clause 9, all payments to be made by the Company to
Burdale under the Finance Documents will be made on or before
their due date in Sterling in cleared funds for value not
later than 11.00 a.m. on the day in question to the Payment
Account.
(b) If any payment under the Finance Documents would otherwise be
due on a day which is not a Business Day, it will be due on
the next succeeding Business Day or, if that Business Day
falls in the following month, on the preceding Business Day.
(c) If after receipt by Burdale of any payment of, or proceeds of
Collateral applied to the payment of, any of the Company's
payment liabilities, Burdale is required to surrender or
return such payment or proceeds to any person for any reason,
then
the payment liabilities intended to be satisfied by such
payment or proceeds shall be treated as not having been
received by Burdale. The Company shall be liable to pay to
Burdale the amount of any payments or proceeds so surrendered
or returned. This Clause 10.1(c) shall remain effective
notwithstanding any action which may be taken by Burdale in
reliance upon such payment or proceeds and will survive the
termination or non-renewal of this Agreement.
10.2 TAXES
(a) Subject to Clause 10.2(c), all Taxes (other than Tax on the
overall net income of Burdale) due in respect of this
Agreement or any amounts paid or payable under the Finance
Documents will be paid by the Company when due and in any
event prior to the date on which penalties attach to such
Taxes, and the Company will indemnify Burdale for any cost,
loss or liability incurred by Burdale in respect of all such
Taxes.
(b) Subject to Clause 10.2(c), all payments by the Company of any
nature under the Finance Documents will be made without regard
to any equities between the Company and Burdale and in full
and free and clear of, and without any deduction or
withholding (whether in respect of set-off, restriction,
counterclaim, Taxes or otherwise whatsoever) unless the
deduction or withholding is required by law, in which event
the Company will:
(i) ensure that the deduction or withholding does not
exceed the minimum amount legally required;
(ii) pay to Burdale (or procure the payment to Burdale of)
an additional amount being the amount required to
procure that the aggregate net amount received by
Burdale will equal the full amount which would have
been received by it had no deduction or withholding
been made (including, for the avoidance of doubt, any
withholding or deduction on any additional amount
paid);
(iii) pay to the relevant taxation or other authorities
within the period for payment permitted by the
applicable law such amount as is required to be paid
in consequence of the deduction or withholding
(including, but without prejudice to the generality
of the foregoing, the full amount of any deduction or
withholding from any additional amount paid pursuant
to paragraph (ii) above) and supply Burdale with
written evidence that it has made the appropriate
payment; and
(iv) indemnify Burdale against any costs, loss or
liability incurred by it by reason of any failure of
the Company to make any deduction or withholding or
by reason of any increased payment not being made on
the due date for payment.
(c) If the Company has made an additional payment under Clause
10.2(b) in respect of any Tax and such Tax was not properly or
legally been charged or levied then Burdale will, upon the
Company's request and at the Company's expense, provide
such documents to the Company as it may reasonably request to
enable it to contest the imposition of such Tax provided
always that the provision of such documents and the contesting
of the relevant Tax liability shall have no reasonable
likelihood of resulting in any liability for Burdale.
(d) If the Company has made an additional payment under Clause
10.2(b) in respect of any Tax and Burdale subsequently
receives a credit, relief or allowance in respect of that
payment then Burdale will, once a year during the term of this
Agreement or immediately after the term of this Agreement (if
applicable), apply the total amount of such credits, reliefs
or allowances to the reduction of the Company's liabilities
under the Finance Document in such manner as it thinks fit
(provided that (A) such payment to the Company does not result
in any additional liability for Burdale, (B) the Company has
made all the additional payments due from it under Clause
10.2(b) and (C) the Company has supplied evidence of such
payments to Burdale) and thereafter account to the Company for
any balance. Burdale will use reasonable endeavours to obtain
a tax credit as referred to above provided that it will not be
required to seek any such credit if that will result in
additional costs or legal or regulatory burdens on it which
are deemed by Burdale, in good faith, to be material. Burdale
shall have an absolute discretion as to whether to claim any
tax credit and if it does claim, the extent, order and manner
in which it does so. Burdale shall not be obliged to disclose
any information regarding its tax affairs or computations to
any other party.
11. INCREASED COSTS
11.1 INCREASED COSTS
If the result of any change in or introduction of or change in the
interpretation or application of any law, regulation, treaty or
official directive or official request (whether or not having the
force of law but, if not, being of a type with which Burdale is
accustomed to comply) or compliance by Burdale with the same
including, without limitation, those relating to Taxation (but not
Tax on overall net income of Burdale), or any other form of banking
or monetary controls is to:
(a) increase the cost to Burdale of entering into this Agreement
or making or maintaining the Facility or maintaining any of
its commitments under the Finance Documents;
(b) increase the cost to Burdale of funding or having outstanding
any other amount paid out by it under the Finance Documents;
(c) reduce any amount payable to Burdale under the Finance
Documents or the effective return on its capital; or
(d) result in Burdale making any payment or foregoing any interest
or other return on or calculated by reference to any amount
received or receivable by it from the Company under the
Finance Documents,
then and in each such case:
(i) Burdale will notify the Company in writing and
provide to the Company reasonable details of such
event promptly upon its becoming aware of the same;
and
(ii) upon demand from time to time by Burdale, the Company
will pay to Burdale such amount as is necessary to
compensate Burdale for such increased cost (or the
proportion of such increased cost as is, in the
reasonable opinion of Burdale, attributable to its
entering into this Agreement or making or maintaining
the Facility or maintaining any commitment under the
Finance Documents), reduction, payment or foregone
interest or other return.
11.2 CERTIFICATE CONCLUSIVE
The certificate of Burdale specifying the amount of compensation
payable under Clause 11.1 will, in the absence of manifest error, be
conclusive. Burdale will provide calculations in reasonable detail
showing the calculation of any such amount, provided that Burdale
will not be obliged to reveal any information which is confidential
to Burdale.
12. ILLEGALITY AND MONETARY UNION
12.1 ILLEGALITY
In the event that any change in or introduction of or change in the
interpretation or application of any law, regulation, treaty, or
official directive or official request (whether or not having the
force of law but, if not, being of a type with which Burdale is
accustomed to comply) makes it unlawful (or contrary to such
directive or request) in any jurisdiction applicable to Burdale for
Burdale to make available or maintain the Facility or to give effect
to its obligations under the Finance Documents, Burdale may give
seven Business Days written notice to that effect to the Company
whereupon the Facility will be cancelled and all the provisions of
this Agreement will apply as if the cancellations or terminations had
been a reduction of the Facility Limit to zero pursuant to Clause
6.5.
12.2 EFFECT OF MONETARY UNION
If the country of any national currency in which any amount is
expressed to be payable under this Agreement participates in Economic
and Monetary Union in accordance with article 109J of the treaty on
European Union, then:
(a) any amount expressed to be payable under this Agreement in
that national currency shall be made in that national currency
or in euro as Burdale may, by not less than three Business
Days' notice to the Company to that effect, require;
(b) any amount so required to be paid in euro shall be converted
from that national currency at the rate stipulated pursuant to
Article 109L(4) of the Treaty on European Union and payment of
the amount in euro derived from such conversion shall
discharge the obligation of the relevant party to pay such
national currency amount in accordance with, and subject to,
the Regulation(s) made pursuant to Article 109L(4);
(c) after consultation with the Company, Burdale shall be entitled
to make such amendments to this Agreement as it may reasonably
determine to be necessary to take account of monetary union
and any consequent changes in market practices (whether as to
the settlement or rounding of obligations, the calculation of
interest or otherwise howsoever).
Any amendment so made to this Agreement by Burdale shall be promptly
notified to the Company and shall be binding on the Company.
13. GENERAL REPRESENTATIONS AND WARRANTIES
13.1 ACKNOWLEDGEMENT AND WARRANTIES
The Company represents and warrants to Burdale that:
(a) CORPORATE EXISTENCE, POWER AND AUTHORITY; SUBSIDIARIES: Each
Corporate Obligor and each Related Company is a corporation
duly organised and in good standing under the laws of its
state of incorporation and is duly qualified as a foreign
corporation and in good standing in all jurisdictions where
the nature and extent of the business transacted by it or the
ownership of assets makes such qualification necessary, except
for those jurisdictions in which the failure to so qualify
would not have a Material Adverse Effect. The execution,
delivery and performance of this Agreement, the other Finance
Documents and the transactions contemplated hereunder and
thereunder are all within each Corporate Obligor's and each
Related Company's corporate powers, have been duly authorised
and are not in contravention of law or the terms of such
person's constituent or other organisational documentation or
any indenture, agreement or undertaking to which such person
is a party or by which such person or its property are bound.
This Agreement and the other Finance Documents constitute
legal, valid and binding obligations of each Corporate Obligor
and each Related Company (as the case may be) enforceable in
accordance with their respective terms. The Company has no
Subsidiaries except the other Corporate Obligors.
(b) FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE: All
financial statements relating to any Corporate Obligor which
have been or may hereafter be delivered by such Corporate
Obligor to Burdale have been or will have been prepared in
accordance with GAAP and fairly present the financial
condition and the results of operations of such Corporate
Obligor as at the dates and for the periods set forth therein.
Except as disclosed in any interim financial statements
furnished by any Corporate Obligor or on behalf of any
Corporate Obligor to Burdale prior to the date of this
Agreement, there has been no material adverse change in the
assets,
liabilities, properties and condition, financial or otherwise,
of such Corporate Obligor, since the date of the most recent
audited financial statements furnished by such Corporate
Obligor or on behalf of such Corporate Obligor to Burdale
prior to the date of this Agreement.
(c) PRIORITY OF SECURITY; TITLE TO PROPERTIES: The Encumbrances
and security interests granted to Burdale under the Finance
Documents constitute valid and perfected first priority
mortgages and charges and security interests in and upon the
Collateral subject only to the permitted pursuant to Clause
14(g). Each Corporate Obligor and each Related Company has
good and marketable title to all of its properties and assets
subject to no mortgages, pledges, security interests,
encumbrances or charges of any kind, except (i) those granted
to Burdale (ii) Encumbrances granted by GL Bermuda in favour
of the Company and (iii) such others as are specifically
permitted under Clause 14(g).
(d) TAX RETURNS: The Company has filed, or caused to be filed, in
a timely manner all Tax returns, reports and declarations
which are required to be filed by it (without requests for
extension except as previously disclosed in writing to
Burdale). All information in such Tax returns, reports and
declarations is complete and accurate in all material
respects. The Company has paid or caused to be paid all Taxes
due and payable or claimed due and payable in any assessment
received by it, except Taxes the validity of which are being
contested in good faith by appropriate proceedings diligently
pursued and available to the Company and with respect to which
adequate reserves have been set aside on its books. Adequate
provision has been made for the payment of all accrued and
unpaid domestic, foreign and other Taxes whether or not yet
due and payable and whether or not disputed.
(e) LITIGATION: Except as set forth on the Information Certificate
of the Company, there is no present investigation by any
governmental agency pending, or to the best of the Company's
knowledge threatened, against or affecting the Company, its
assets or business and there is no action, suit, proceeding or
claim by any person pending, or to the best of the Company's
knowledge threatened, against the Company or its assets or
goodwill, or against or affecting any transactions
contemplated by this Agreement, which has a material
possibility (as reasonably determined by Burdale) of being
adversely determined against the Company, and if adversely
determined would result in any Material Adverse Effect.
(f) COMPLIANCE WITH OTHER AGREEMENTS AND APPLICABLE LAWS: No
Corporate Obligor is in default under, or in violation of any
of the terms of, any agreement, contract, instrument, lease or
other commitment to which it is a party or by which it or any
of its assets are bound and each Corporate Obligor is in
compliance with all applicable provisions of laws, rules,
regulations, licenses, permits, approvals and orders of any
English, foreign, or local governmental authority where such
default or noncompliance would result in a Material Adverse
Effect.
(g) BANK ACCOUNTS: All of the deposit accounts, investment
accounts or other accounts in the name of or used by the
Company maintained at any bank or other
financial institution are set forth on Schedule 9 to the
Debenture, subject to the right of a Company to establish new
accounts in accordance with Clause 14(l) below.
(h) YEAR 2000 COMPLIANCE: Any reprogramming required to permit the
proper functioning, in and following the year 2000, of (i) the
computer systems of the Company and (ii) equipment containing
embedded microchips (including systems and equipment supplied
by others or with which the systems of the Company interface)
and the testing of all such systems and equipment, as so
reprogrammed, has been completed in all material respects. The
computer and management information systems of the Company are
and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, sufficient to
permit the Company to conduct its business without a material
adverse effect on its assets, business or condition (financial
or other).
(i) ACCURACY AND COMPLETENESS OF INFORMATION: All information
furnished by or on behalf of any Corporate Obligor in writing
to Burdale in connection with this Agreement or any of the
other Finance Documents or any transaction contemplated hereby
or thereby, including, without limitation, all information on
the Information Certificate of such Corporate Obligor is true
and correct in all material respects on the date as of which
such information is dated or certified and does not omit any
material fact necessary in order to make such information not
misleading. No event or circumstance has occurred which has
had or could reasonably be expected to have a material adverse
affect on the business, assets or condition (financial or
otherwise) of any Corporate Obligor, which has not been fully
and accurately disclosed to Burdale in writing.
13.2 SURVIVAL OF WARRANTIES; CUMULATIVE
All representations and warranties contained in this Agreement or any
of the other Finance Documents shall survive the execution and
delivery of this Agreement and shall be deemed to have been made
again to Burdale on each date a Request is submitted and on each
Utilisation Date and shall be conclusively presumed to have been
relied on by Burdale regardless of any investigation made or
information possessed by Burdale. The representations and warranties
set forth herein shall be cumulative and in addition to any other
representations or warranties which the Company shall now or
hereafter give, or cause to be given, to Burdale pursuant to any
Finance Document.
14. GENERAL UNDERTAKINGS
The Company undertakes to Burdale that:
(a) MAINTENANCE OF EXISTENCE: The Company shall at all times
preserve, renew and keep in full force and effect its
corporate existence and rights and franchises with respect
thereto and maintain in full force and effect all permits,
licenses, trademarks, trade names, approvals, authorisations,
leases and contracts necessary to carry on the business as
presently or proposed to be conducted PROVIDED, however, that
the Company may (i) cause any other Corporate Obligor to
dissolve
or otherwise surrender any of the foregoing and (ii) abandon
any permit, license, trademark, trade name, approval or
authorisation it no longer deems material to its business. The
Company shall give Burdale thirty (30) days' prior notice of
any proposed change of name or structure, which notice shall
set forth the proposed new name or structure and Company shall
deliver to Burdale a copy of the amendment to the applicable
constituent document of the Company providing for such change
appropriately certified as soon as it is available.
(b) COMPLIANCE WITH LAWS, REGULATIONS, ETC.: The Company shall, at
all times, comply in all material respects with all laws,
rules, regulations, directives, licenses, permits, consents,
authorisations, approvals and orders applicable to it and duly
observe all requirements of any national or local governmental
authority, and all statutes and any guidance, circular or
regulations issued thereunder, subordinate legislation, common
law, equity, rules, orders, permits and stipulations relating
to environmental pollution and employee health and safety,
where such non-compliance would result in a Material Adverse
Effect.
(c) PAYMENT OF TAXES AND CLAIMS: The Company shall duly pay and
discharge all Taxes, assessments, contributions and
governmental charges upon or against it or its properties or
assets, except for Taxes the validity of which are being
contested in good faith by appropriate proceedings diligently
pursued and available to the Company and with respect to which
adequate reserves have been set aside on its books. The
Company shall be liable for any Tax or penalties imposed on
Burdale as a result of the financing arrangements provided for
herein and the Company agrees to indemnify and hold Burdale
harmless with respect to the foregoing, and to repay to
Burdale on demand the amount thereof, and until paid by the
Company such amount shall be added and deemed part of the
Outstanding Purchase Amount. The foregoing indemnity shall
survive the payment of the Obligations and the termination or
non-renewal of this Agreement.
(d) INSURANCE: The Company shall, at all times, maintain with
financially sound and reputable insurers insurance with
respect to the Collateral against loss or damage and all other
insurance of the kinds and in the amounts customarily insured
against or carried by corporations of established reputation
engaged in the same or similar businesses and similarly
situated. The Company shall furnish certificates, policies or
endorsements to Burdale as Burdale shall require as proof of
such insurance, and, if the Company fails to do so, Burdale is
authorised, but not required, to obtain such insurance at the
expense of the Company. All policies shall provide for at
least thirty (30) days prior written notice to Burdale of any
cancellation. The Company shall cause Burdale to be named as a
loss payee and an additional insured (but without any
liability for any premiums) under such insurance policies and
the Company shall obtain non-contributory lender's loss
payable endorsements to all casualty insurance policies in
form and substance satisfactory to Burdale. At its option,
Burdale may apply any insurance proceeds received by Burdale
at any time to the cost of repairs or replacement of
Collateral and/or to payment of the Obligations, whether or
not then due, in any order and in such manner as Burdale may
determine or hold such proceeds as cash collateral for the
Obligations.
(e) FINANCIAL STATEMENTS AND OTHER INFORMATION:
(i) The Company shall keep proper books and records in
which true and complete entries shall be made of all
dealings or transactions of or in relation to the
Collateral and the business of the Company and its
Subsidiaries in accordance with GAAP and the Company
shall furnish or cause to be furnished to Burdale:
(1) within thirty (30) days after the end of each
fiscal month, monthly unaudited consolidated and
consolidating financial statements of the Company and
its Subsidiaries (including in each case balance
sheets, statements of profit and loss, statements of
cash flow and statements of shareholders' funds), all
in reasonable detail, fairly presenting the financial
position and the results of the operations of the
Company and its Subsidiaries as of the end of and
through such month, (2) within sixty (60) days after
the end of each fiscal quarter, quarterly unaudited
consolidated and consolidating financial statements
of the Company and its Subsidiaries (including in
each case balance sheets, statements of profit and
loss, statements of cash flow and statements of
shareholders' funds, stock figures and valuations for
that quarter, a breakdown of the value and identity
of preferential creditors for that quarter and
details of all input and output VAT at the end of
each VAT quarter), all in reasonable detail, fairly
presenting the financial position and the results of
the operations of the Company and its Subsidiaries as
of the end of and through such fiscal quarter, and
(3) within one hundred twenty (120) days after the
end of each fiscal year, audited consolidated and
consolidating financial statements of the Company and
its Subsidiaries (including in each case balance
sheets, statements of profit and loss, statements of
cash flow and statements of shareholders' funds), and
the accompanying notes thereto, all in reasonable
detail, fairly presenting the financial position and
the results of the operations of the Company and its
Subsidiaries as of the end of and for such fiscal
year, together with the opinion of the Company's
auditors, which shall be a nationally recognised
independent accounting firm or, if not, another
independent accounting firm selected by the Company
and reasonably acceptable to Burdale, that such
financial statements have been prepared in accordance
with GAAP, and present a true and fair view of the
results of operations and financial condition of the
Company and its Subsidiaries as of the end of and for
the fiscal year then ended.
(ii) The Company shall promptly notify Burdale in writing
of the details of (i) any loss, damage,
investigation, action, suit, proceeding or claim
relating to the Collateral or any other property
which is security for the Obligations or which would
result in any material adverse change in any
Company's business, properties, assets, or condition,
financial or otherwise and (ii) the occurrence of any
Default.
(iii) The Company shall promptly after the sending or
filing thereof furnish or cause to be furnished to
Burdale copies of all financial reports which GLC
sends to its stockholders generally and copies of all
reports and registration statements which any GLC or
any other Borrower (as defined in the Loan Agreement)
with the U.S. Securities and Exchange Commission, any
U.S. national securities exchange or the National
Association of Securities Dealers, Inc.
(iv) The Company shall furnish or cause to be furnished to
Burdale such budgets, forecasts, projections and
other information in respect of the Collateral and
the business of the Company, as Burdale may, from
time to time, reasonably request. Burdale is hereby
authorised to deliver a copy of any financial
statement or any other information relating to the
business of any Obligor and any Related Company to
any court or other government agency or to any
participant or assignee or prospective participant or
assignee. The Company hereby irrevocably authorises
and directs all accountants or auditors to deliver to
Burdale, at Company's expense, copies of the
financial statements of any Corporate Obligor or
Related Company and any reports or management letters
prepared by such accountants or auditors on behalf of
any Corporate Obligor or Related Company and to
disclose to Burdale such information as they may have
regarding the business of any Corporate Obligor or
Related Company. Any information provided to Burdale
pursuant to this Clause 14(e)(iv) shall be subject to
the provisions of Clause 24.2. Any documents,
schedules, invoices or other papers delivered to
Burdale may be destroyed or otherwise disposed of by
Burdale one (1) year after the same are delivered to
Burdale, except as otherwise designated by the
Company to Burdale in writing.
(f) SALE OF ASSETS, CONSOLIDATION, MERGER, DISSOLUTION, ETC.: The
Company shall not, directly or indirectly:
(i) merge, amalgamate or consolidate with any other
person or permit any other person to merge,
amalgamate or consolidate with it;
(ii) sell, assign, lease, transfer, abandon or otherwise
dispose of any stock or indebtedness to any other
person or any of its assets to any other person
(except for (1) sales of stock in the ordinary course
of business, (2) the disposition of worn-out or
obsolete Equipment or Equipment no longer used in the
business of the Company so long as (A) any proceeds
are paid into the Blocked Accounts and (B) such sales
do not involve Equipment having an aggregate fair
market value in excess of the Sterling equivalent of
One Million Dollars ($1,000,000) for all such
Equipment disposed of in any fiscal year of the
Company and (3) in connection with the sale of all or
substantially all the assets of the Company or a
Subsidiary of the Company or the sale of all the
share capital of the Company or a Subsidiary of the
Company, sales of such assets or share capital having
an aggregate fair market value not to exceed the
Sterling equivalent of Twenty Five Million Dollars
($25,000,000) less the fair market value of any
assets or share capital previously sold by the
Company or such Subsidiary in connection with the
sale of all or substantially all the assets of the
Company or such
Subsidiary or the sale of all the share capital of
such Subsidiary during the term of this Agreement,
PROVIDED THAT (A) no Default exists or has occurred
and is continuing immediately prior to and after
giving effect to such sale and (B) the Company shall
pay to Burdale the greater of (1) fifty percent (50%)
of the amount by which the aggregate amount (net of
Taxes, assumed liabilities and transaction costs)
received by the Company from all such sales exceeds
the Sterling Equivalent of Five Million Dollars
($5,000,000) and one-hundred percent (100%) of the
amount by which the aggregate amount (net of Taxes,
assumed liabilities and transaction costs) received
by the Company from all such sales exceeds the
Sterling Equivalent of Ten Million Dollars
($10,000,000) or (2) the portion of the amount of
then Outstanding Purchase Price advanced against any
Receivables sold in connection with any such sales
(it being agreed that any such payments to Burdale
shall not reduce the Facility Limit unless made
pursuant to Clause 6.5 and shall not be included in
calculating the lending limits hereunder);
(iii) form any Subsidiaries, unless the aggregate amount of
all contributions made by the Company to such
Subsidiaries is less than the Sterling equivalent of
Three Million Dollars ($3,000,000) in the aggregate
during the term of this Agreement and PROVIDED THAT
(1) no Event of Default or Default, exists or has
occurred and is continuing immediately prior to and
after giving effect to the formation of each such
Subsidiary, (2) if any such Subsidiary is formed on
or prior to April 15, 2000, Total Excess Availability
exceeds Fifteen Million Dollars ($15,000,000)
immediately prior to and after giving effect to such
formation or if any such Subsidiary is formed after
April 15, 2000, Total Excess Availability exceeds Ten
Million Dollars ($10,000,000) immediately prior to
and after giving effect to such formation, (3) any
such Subsidiary formed engages in a line of business
compatible but not competitively adverse with the
Company's line of business and (4) the Company shall
not contribute to any such Subsidiary any Collateral
with a fair market value exceeding in the aggregate
more than Ten Thousand Dollars ($10,000) during the
term of this Agreement or any proprietary information
except that a license to use such proprietary
information on a non-exclusive basis shall not be
deemed to be a contribution of proprietary
information for purposes of this Clause 14(f)(iii);
(iv) acquire the share capital of any person in which such
person would become a Subsidiary of the Company
except for Permitted Acquisitions;
(v) wind up, liquidate or dissolve except following the
transfer of all or substantially all of its assets in
a transaction permitted by Clause 14(f)(iii)(3) and
14(f)(iii)(4) of this Clause 14(f); or
(vi) agree to do any of the foregoing.
(g) ENCUMBRANCES: No Corporate Obligor shall create, incur, assume
or suffer to exist any security interest, mortgage, pledge,
lien, charge or other Encumbrance
of any nature whatsoever on any of its assets or properties,
including, without limitation, the Collateral, except:
(i) the Encumbrances and security interests of Burdale;
(ii) easements, licenses, covenants and other restrictions
affecting the use of real property which do not
interfere in any material respect with the use of
such real property or ordinary conduct of the
business of such Obligor as presently conducted
thereon or materially impair the value of the real
property which may be subject thereto;
(iii) purchase money security interests in Equipment
(including finance leases) not so long as such
security interests do not apply to any property of
such Obligor other than the Equipment so acquired,
and the indebtedness secured thereby does not exceed
the cost of the Equipment so acquired, as the case
may be; and
(iv) the security interests and Encumbrances granted by
the Company in favour of Barclays Bank PLC as at the
date of this Agreement or replacements therefor that
do not extend to any other property or increase the
amounts secured.
(h) INDEBTEDNESS: No Corporate Obligor shall incur, create,
assume, become or be liable in any manner with respect to, or
permit to exist, any obligation for borrowed money or
indebtedness, except:
(i) the Obligations;
(ii) trade obligations and normal accruals in the ordinary
course of business not yet due and payable, or with
respect to which such Corporate Obligor is contesting
in good faith the amount or validity thereof by
appropriate proceedings diligently pursued and
available to such Corporate Obligor, and with respect
to which adequate reserves have been set aside on its
books;
(iii) purchase money indebtedness (including finance
leases) to the extent not incurred or secured by
Encumbrances (including finance leases) in violation
of any other provision of this Agreement;
(iv) indebtedness set forth on the Information Certificate
of such Corporate Obligor, PROVIDED THAT, (1) such
Corporate Obligor may only make regularly scheduled
payments of principal and interest in respect of such
indebtedness in accordance with the terms of the
agreement or instrument evidencing or giving rise to
such indebtedness as in effect on the date hereof,
(2) such Corporate Obligor shall not, directly or
indirectly, (A) amend, modify, alter or change the
terms of such indebtedness or any agreement, document
or instrument related thereto as in effect on the
date hereof, or (B) except as otherwise permitted
under this Agreement, redeem, retire, defease,
purchase or otherwise acquire such indebtedness, or
set aside
or otherwise deposit or invest any sums for such
purpose, and (3) such Corporate Obligor shall furnish
to Burdale all notices or demands in connection with
such indebtedness either received by such Corporate
Obligor or on its behalf, promptly after the receipt
thereof, or sent by such Corporate Obligor or on its
behalf, concurrently with the sending thereof, as the
case may be;
(v) indebtedness owing to a Borrower, GL Canada, GLC or
GIFL, PROVIDED THAT no Default exists or has occurred
and is continuing immediately prior to and after
giving effect to the incurrence, creation or
assumption of such indebtedness; and
(vi) other indebtedness together with other indebtedness
of all other Borrowers not otherwise permitted under
paragraphs (h)(i) to (h)(v) above at any one time not
exceeding the Sterling equivalent of Two Million
Dollars ($2,000,000) outstanding in the aggregate.
(i) LOANS, INVESTMENTS, GUARANTEES, ETC.: No Corporate Obligor
shall, directly or indirectly, make any loans or advance money
or property to any person, or invest in (by capital
contribution, dividend or otherwise) or purchase or repurchase
the stock or indebtedness or all or a substantial part of the
assets or property of any person, or guarantee, assume,
endorse, or otherwise become responsible for (directly or
indirectly) the indebtedness, performance, obligations or
dividends of any person or agree to do any of the foregoing,
except:
(i) the endorsement of instruments for collection or
deposit in the ordinary course of business;
(ii) investments in: (1) short-term direct obligations of
the United Kingdom and (2) negotiable certificates of
deposit issued by any bank satisfactory to Burdale,
payable to the order of the relevant Corporate
Obligor or to bearer and delivered to Burdale,
PROVIDED THAT as to any of the foregoing, unless
waived in writing by Burdale, the relevant Corporate
Obligor shall take such actions as are deemed
necessary by Burdale to perfect the security interest
of Burdale in such investments;
(iii) the guarantees set forth in the Information
Certificate of each Corporate Obligor;
(iv) Permitted Acquisitions and any transaction permitted
by Clause 14(a) and 14(f) ;
(v) loans or advances to, or investments in, or purchases
or repurchases of the shares, assets or indebtedness
of a Borrower or GL Canada or guarantees or the
assumption of letter of credit obligations for the
benefit of a Borrower or GL Canada; provided that,
(1) no Default exists or has occurred and is
continuing immediately prior to and after giving
effect to any such loan, advance, investment,
purchase, repurchase, guarantee or assumption of
letter
of credit obligation and (2) such loans, advances,
investments, purchases or repurchases do not violate
the capitalisation requirements of the relevant
Corporate Obligor under applicable laws;
(vi) loans or advances to GIFL or GLC; provided that, (i)
no Default exists or has occurred and is continuing
immediately prior to and after giving effect to such
loans or advances, (ii) such loans or advances do not
violate the capitalisation requirements of the
relevant Corporate Obligor under applicable laws, and
(iii) all the proceeds of such loans or advances are
immediately loaned or advanced by GIFL or GLC, as the
case may be, to GL Canada or a Borrower;
(vii) loans or advances to the GLC (1) for the purpose of
paying interest due under the Senior Notes, (2) for
the purpose of paying management fees to the Sponsors
(as defined in the Loan Agreement) or any of their
affiliates in an aggregate amount not to exceed the
Sterling equivalent of Seven Hundred Thousand Dollars
($700,000) less amounts paid by any Borrower or GL
Canada for such purpose in any fiscal year of the
Company, or loans or advances to GLC for the purposes
set forth in Schedule 9.10 of the Loan Agreement in
an aggregate amount not to exceed the Sterling
equivalent of $23,000,000 less amounts paid by the
Borrowers or GL Canada for such purposes in any
fiscal year of the Company PROVIDED THAT, (1) no
Default exists or has occurred and is continuing
immediately prior to and after giving effect to such
loans, advances, guarantees or the assumption of
letter of credit obligations, (2) such loans,
advances, guarantees or the assumption of letter of
credit obligations do not violate the capitalisation
requirements of the relevant Corporate Obligor under
applicable laws;
(viii) loans or advances to, or guarantees or the assumption
of letter of credit obligations for the benefit of
GLC or a Subsidiary of GLC (other than a Borrower, GL
Canada) PROVIDED THAT (1) no Default exists or has
occurred and is not continuing immediately prior to
and after giving effect to such loans, advances,
guarantees, (2) such loans, advances, guarantees or
the assumption of letter of credit obligations do not
violate the capitalisation requirements of the
relevant Corporate Obligor under applicable laws, (3)
if such loans, advances, guarantees or assumption of
letter of credit obligations are made on or prior to
April 15, 2000, Total Excess Availability exceeds
Fifteen Million Dollars ($15,000,000) immediately
prior to and after giving effect to such loans,
advances, guarantees or the assumption of letter of
credit obligations or if such loans, advances,
guarantees or the assumption of letter of credit
obligations are made after April 15, 2000, Total
Excess Availability exceeds Ten Million Dollars
($10,000,000) immediately prior to and after giving
effect to such loans, advances, guarantees or the
assumption of letter of credit obligations and (iv)
such loans or advances are evidenced by a promissory
note or notes, the rights to which have been
collaterally pledged to Burdale; and
(ix) other outstanding loans or advances by the Corporate
Obligors not to exceed in aggregate the Sterling
equivalent of One Million Dollars ($1,000,000) at any
time.
(j) DIVIDENDS AND REDEMPTIONS: The Company shall not, directly or
indirectly, declare or pay any dividends on account of any
shares of any class of share capital, as the case may be, of
the Company now or hereafter outstanding, or set aside or
otherwise deposit or invest any sums for such purpose, or
redeem, retire, defease, purchase or otherwise acquire any
shares of any class of share capital or, as the case may be,
(or set aside or otherwise deposit or invest any sums for such
purpose) for any consideration other than ordinary share
capital or apply or set apart any sum, or make any other
distribution (by reduction of capital or otherwise) in respect
of any such shares, as the case may be, or agree to do any of
the foregoing.
(k) TRANSACTIONS WITH AFFILIATES: No Corporate Obligor shall enter
into any transaction for the purchase, sale or exchange of
property or the rendering of any service to or by any
affiliate, except in the ordinary course of and pursuant to
the reasonable requirements of such Corporate Obligor's
business and upon fair and reasonable terms no less favourable
to such Corporate Obligor than such Corporate Obligor would
obtain in a comparable arm's length transaction with an
unaffiliated person. For this purpose, affiliate shall not
include any Borrower, any Corporate Obligor, GL Canada, GLC,
GL Bermuda or GIFL.
(l) ADDITIONAL BANK ACCOUNTS: No Corporate Obligor shall, directly
or indirectly, open, establish or maintain any deposit
account, investment account or any other account with any bank
or other financial institution, other than the Charged
Accounts as set forth in Schedule 9 to the Debenture, except:
(i) as to any new or additional Blocked Accounts and other
such new or additional accounts which contain any Collateral
or proceeds thereof, with the prior written consent of Burdale
and subject to such conditions thereto as Burdale may
establish or as required by this Agreement and (ii) as to any
accounts used by such Company to make payments of payroll,
Taxes or other obligations to third parties, after prior
written notice to Burdale.
(m) FURTHER ASSURANCES: At the request of Burdale at any time and
from time to time, the each Corporate Obligor shall, at its
expense, duly execute and deliver, or cause to be duly
executed and delivered, such further agreements, documents and
instruments, and do or cause to be done such further acts as
may be necessary or proper to evidence, perfect, maintain and
enforce the security interests and the priority thereof in the
Collateral and to otherwise effectuate the provisions or
purposes of this Agreement or any of the other Finance
Documents. Burdale may at any time and from time to time
request a certificate from an officer of any Corporate Obligor
representing on behalf of such Corporate Obligor that all
conditions precedent to the making of a Utilisation and
providing of any L/C contained herein are satisfied. In the
event of such request by Burdale, Burdale may, at its option,
cease to allow any further Utilisation or provide any further
L/C's until Burdale has received such certificate and, in
addition, Burdale has determined that such conditions are
satisfied.
15. EVENTS OF DEFAULT
15.1 DEFAULT
Each of the events specified below constitutes an Event of Default:
(a) any Obligor or GLC fails to pay when due any of the
Obligations (other than interest or fees due hereunder);
(b) the Company fails to pay any interest or fees within three (3)
days after such interest or fees become due hereunder,
PROVIDED THAT such three (3) day period shall not apply in the
event that Company intentionally diverts payments on
Receivables or other proceeds of Collateral from the Blocked
Accounts;
(c) any Obligor or GLC fails to perform any of the terms,
covenants, conditions or provisions contained in this
Agreement or any of the other Finance Documents and such
failure shall continue for ten (10) Business Days, PROVIDED
THAT, such ten (10) Business Day period shall not apply in the
case of (1) any failure to perform a term, covenant, condition
or provision which results in the occurrence of an Event of
Default addressed in any other provision or paragraph of this
Clause 15.1, (2) any failure to perform any such term,
covenant, condition or provision that has been the subject of
two (2) previous failures within the prior twelve (12) month
period or (3) an intentional breach by any Obligor or GLC of
such term, covenant, condition or provision;
(d) any representation, warranty or statement of fact made by the
Company to Burdale in this Agreement, the other Finance
Documents or any other agreement, schedule, confirmatory
assignment or otherwise shall when made or deemed made be
false or misleading in any material respect;
(e) any Obligor or any Related Company revokes or terminates any
of the terms, covenants, conditions or provisions of any
guarantee, endorsement or other agreement of such party in
favour of Burdale;
(f) any judgment for the payment of money is rendered against any
Obligor in excess of the Sterling equivalent of Two Million
Five Hundred Thousand Dollars ($2,500,000) in any one case or
in excess of the Sterling equivalent of Five Million Dollars
($5,000,000) in the aggregate and shall remain undischarged or
unvacated for a period in excess of thirty (30) days or
execution shall at any time not be effectively stayed, or any
material judgment other than for the payment of money, or
injunction, attachment, sequestration, distress, garnishment
or execution is rendered against the Company or any of its
assets;
(g) any Obligor dissolves or suspends or discontinues doing
business;
(h) Any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrative receiver,
administrator or the like is appointed in respect of any
Obligor or any material part of its assets.
(i) The directors of any Corporate Obligor request the appointment
of a liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrative receiver,
administrator or the like.
(j) Any other steps are taken to enforce any Encumbrance over any
material part of the assets of any Obligor.
(k) Any Obligor is, or is deemed for the purposes of any law to
be, unable to pay its debts as they fall due or to be
insolvent, or admits inability to pay its debts as they fall
due.
(l) Any Obligor suspends making payments on all or any class of
its debts or announces an intention to do so, or a moratorium
is declared in respect of any of its indebtedness.
(m) Any Obligor, by reason of financial difficulties, begins
negotiations with all or any class of its creditors with a
view to the readjustment or rescheduling of any of its
indebtedness.
(n) Any step (including petition, proposal or convening a meeting)
is taken with a view to a composition, assignment or
arrangement with any creditors of any Obligor.
(o) A meeting of any Corporate Obligor or 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.
(p) Any person presents a petition for the winding-up or for the
administration or for the bankruptcy of any Obligor unless
(other than in the case of a petition for administration) the
relevant Obligor can demonstrate to the satisfaction of
Burdale (acting reasonably) that the relevant petition is
frivolous, vexatious or an abuse of process of the court or
that it relates to a claim to which the relevant Obligor has a
good defence which it is diligently pursuing.
(q) An order for the winding-up or administration or bankruptcy of
any Obligor is made.
(r) Any other step (including petition, proposal or convening a
meeting) is taken with a view to administration,
custodianship, liquidation, winding-up, dissolution or
bankruptcy of any Obligor or any other insolvency or analogous
proceedings involving any such person unless, in the case of a
petition (other than in the case of a petition for
administration) the relevant Obligor can demonstrate to the
satisfaction of Burdale (acting reasonably) that the relevant
petition is frivolous,
vexatious or an abuse of process of the court or that it
relates to a claim to which the relevant Obligor has a good
defence which it is diligently pursuing.
(s) There occurs, in relation to any Obligor, any event anywhere
which, in the opinion of Burdale, appears to correspond with
any of those mentioned in paragraphs (h) to (r) (inclusive)
above.
(t) any default by any Obligor or any Related Company under any
agreement, document or instrument relating to any indebtedness
for borrowed money owing to any person other than Burdale, or
any capitalised lease obligations, contingent indebtedness in
connection with any guarantee, letter of credit, indemnity or
similar type of instrument in favour of any person other than
Burdale, in any case in an amount in excess of the Sterling
equivalent of Two Million Five Hundred Thousand Dollars
($2,500,000), which default continues for more than the
applicable cure period, if any, with respect thereto;
(u) GLC ceases to hold, directly or indirectly, all of the share
capital of the Company;
(v) the indictment or threatened indictment of any Corporate
Obligor or any Related Company under any criminal statute, or
the commencement or threatened commencement of criminal or
civil proceedings against any Corporate Obligor or any Related
Company, pursuant to which statute or proceedings the
penalties or remedies sought or available include forfeiture
of any of the material property of such Corporate Obligor or
Related Company (as the case may be);
(w) any default by any Borrower or GL Canada or an "Event of
Default" shall occur under the terms of the Loan Agreement or
the Canadian Loan Agreement or any other agreement, document,
note and/or instrument executed or delivered in connection
therewith;
(x) there shall be a material adverse change in the business,
assets or condition (financial or otherwise) of any Corporate
Obligor or any Related Company after the date hereof; or
(y) there shall be an Event of Default under any of the other
Finance Documents and/or Financing Agreements.
15.2 ACTION ON DEFAULT
Upon the occurrence of any Event of Default and whilst the same is
continuing, and without prejudice to any of Burdale's rights under
this Agreement, Burdale may, by notice to the Company:
(a) declare that an Event of Default has occurred; and/or
(b) declare that the Facility shall be cancelled, whereupon the
Facility shall be so cancelled and all fees (including without
limitation pursuant to Clause 6.5(b))
payable in relation to the Facility shall become immediately
due and payable; and/or
(c) declare that the Company shall forthwith pay or procure the
payment to Burdale of a sufficient sum to cover the amount of
all Outstanding Purchase Price and/or any contingent
obligations of Burdale under any outstanding L/Cs, whereupon
the same shall become immediately due and payable and, once
paid, shall be held by Burdale in an interest bearing account
for application against such Outstanding Purchase Price or
contingent obligation (as the case may be), provided that any
sum remaining after settling such payments shall be applied
first in settlement of any other amounts then due and payable
to Burdale under the Finance Documents and, subject to that,
any balance shall be promptly repaid to the Company or other
person entitled to the balance.
15.3 APPOINTMENT OF INSOLVENCY OFFICER
If any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrative receiver, administrator
or any other insolvency officer (or its equivalent in any
jurisdiction) is appointed in respect of any Obligor or any Related
Company or any part of its assets (whether on the application or with
the consent of Burdale or otherwise) then Burdale may (with or
without it first having exercised any of its other rights under the
Finance Documents), by notice to the Company, declare that the fee
specified in Clause 6.5(b) be immediately due and payable or, at
Burdale's option, payable upon demand as if the Facility Limit at
such time had been reduced to zero, whereupon such fee shall become
immediately due and payable or payable on demand (as the case may
be).
16. COSTS, EXPENSES AND FEES
16.1 COSTS AND EXPENSES
The Company shall pay to Burdale on demand all reasonable costs,
expenses, filing fees and Taxes paid or payable in connection with
the preparation, negotiation, execution, delivery, recording,
administration, collection, liquidation, enforcement and defence of
the Obligations, Burdale's rights in the Collateral, this Agreement,
the other Financing Agreements and all other documents related hereto
or thereto, including any amendments, supplements or consents which
may hereafter be contemplated (whether or not executed) or entered
into in respect hereof and thereof, including, but not limited to:
(a) all costs and expenses of filing, registering or recording
(including filing Taxes and fees, documentary Taxes,
intangibles Taxes and mortgage recording Taxes and
presentation fees, if applicable);
(b) all costs and expenses and fees for title insurance and other
insurance premiums, environmental audits, surveys,
assessments, engineering reports and inspections, appraisal
fees and search fees;
(c) costs and expenses of remitting loan proceeds, collecting
cheques and other items of payment, and establishing and
maintaining the Charged Accounts, together with Burdale's
customary charges and fees with respect thereto;
(d) charges, fees or expenses charged by any bank or issuer in
connection with the L/C's;
(e) costs and expenses of preserving and protecting the
Collateral;
(f) costs and expenses paid or incurred in connection with
obtaining payment of the Obligations, enforcing the security
interests and Encumbrances of Burdale, selling or otherwise
realising the Collateral, and otherwise enforcing the
provisions of this Agreement and the other Finance Documents
or defending any claims made or threatened against Burdale
arising out of the transactions contemplated hereby and
thereby (including, without limitation, preparations for and
consultations concerning any such matters);
(g) all out-of-pocket expenses and costs incurred by Burdale's
examiners in the conduct of their periodic field examinations
of the Collateral and any Company's operations, plus a charge
at the rate of the Daily Rate, per day for Burdale's examiners
in the field and office; and
(h) the fees and disbursements (plus VAT) of legal advisors to
Burdale in connection with any of the foregoing.
16.2 FEES
(A) FACILITY FEE: The Company will pay to Burdale today a facility
fee equal to 0.75% on the amount of the Facility Limit.
(B) COMMITMENT FEE: The Company will pay to Burdale a commitment
fee computed at the rate of 0.375% per annum on the daily
undrawn/unutilised balance of the Facility Limit. Accrued
Commitment Fee shall be payable monthly in arrears from
today's date and also on the date on which the Facility is
terminated. Commitment fee shall accrue from day to day and be
calculated on the basis of a 365 day year and for the actual
number of days elapsed.
(C) MONITORING FEE: The Company will pay to Burdale a monitoring
fee of $2,000 monthly in advance with the first payment to be
made on today's date.
(D) L/C FEE: The Company will pay to Burdale a fee equal to 1.25%
per annum on the face amount of each L/C issued at the
Company's request in respect of the period between the date of
issue of the L/C and the End Date of such L/C. The fee shall
be calculated on the basis of a 365 day year and shall be paid
monthly in arrears and on the End Date of such L/C.
17. INDEMNITIES
17.1 CURRENCY INDEMNITY
If any amount payable by the Company under or in connection with any
of the Finance Documents is received by Burdale in a currency other
than that agreed to be payable under the Finance Documents, whether
as a result of any judgment or order or other enforcement, the
liquidation or bankruptcy of the Company or otherwise howsoever and
the amount produced by converting the currency so received into the
agreed currency is less than the relevant amount of the agreed
currency, then the Company will indemnify Burdale for the deficiency
and any loss sustained as a result. Such conversion will be made at
the Exchange Rate, on such date and in such market as is determined
by Burdale as being most favourable for such conversion. The Company
will in addition pay the costs of such conversion.
17.2 OTHER INDEMNITIES
The Company will indemnify Burdale on demand against any loss or
liability which Burdale incurs as a result of:
(a) the occurrence of any Event of Default;
(b) any payment of principal or other amount being received from
any source otherwise than on its due date under this
Agreement;
(c) any Utilisation not being effected after the Company has
delivered a Request in respect of such Utilisation other than
as a result of Burdale's negligence or default;
(d) any prepayment or provision of cash collateral by the Company
not being made in accordance with the terms of this Agreement.
In each case the Company's liability includes (without limitation)
any loss of margin or anticipated profits or other loss or expense on
account of funds borrowed, contracted for or utilised to fund any
amount payable under any Finance Document and on account of any
security given by Burdale in relation to those funds and in relation
to any amount repaid or prepaid in relation to any Finance Document.
17.3 STAMP DUTY
Immediately upon demand, the Company shall pay and indemnify Burdale
against any liability it incurs for any stamp, registration or
similar tax or duty (and any applicable penalties) which is or
becomes payable because of the entry into, performance or enforcement
of any Finance Document.
17.4 GENERAL PROVISIONS REGARDING INDEMNITIES
Each of the indemnities contained in Clauses 17.1 to 17.3 inclusive
(the "INDEMNITIES") will remain in full force and effect until such
time as all amounts to which such Indemnities are expressed to relate
have been paid in full. The Indemnities are additional to and not
instead of any security or other guarantee or indemnity at any time
existing in favour of any person.
18. EVIDENCE OF INDEBTEDNESS
In any proceedings relating to any Finance Document a statement as to
any amount due to Burdale under this Agreement which is certified as
being correct by an officer of Burdale will in the absence of
manifest error be conclusive evidence that such amount is in fact due
and payable.
19. NOTICES
19.1 DELIVERY AND RECEIPT
All notices pertaining to this Agreement shall be given in writing or
facsimile and shall be deemed to be given as follows:
(a) if in writing, when delivered; and
(b) if by facsimile, when received,
save that any notice delivered or received on a non-working day or
after business hours shall be deemed to be given on the next working
day at the place of delivery or receipt.
19.2 ADDRESSES
(a) The Company's address and facsimile number for notices are:
Xxxxx Xxxxx
00 Xxxxxx Xxxx
Xxxxxxx
Xxxx
XX0 0XX
Facsimile no: 0208 626 6855
For the attention of: Xxxxx Xxxx
or such as the Company may notify to Burdale by not less than
10 days' notice.
(b) Burdale's address and facsimile number for notices are:
00 Xxxxx Xxxx Xxxxxx
Xxxxxx X0X 0XX
Facsimile no: 0171 935 5445
For the attention of: Company Secretary
or such as Burdale may notify to the Company by not less than
10 days' notice.
20. WAIVER, REMEDIES CUMULATIVE
The rights of Burdale under the Finance Documents:
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights under the
general law; and
(c) may be waived only in writing and specifically.
Delay in exercising or non-exercise of any right shall not be deemed
to be a waiver of that right.
21. INVALIDITY
If any of the provisions of any Finance Document become invalid,
illegal or unenforceable in any respect under any law, the validity,
legality and enforceability of the remaining provisions will not in
any way be affected or impaired.
22. ASSIGNMENT AND PARTICIPATION
22.1 ASSIGNMENT
The Finance Documents shall be binding upon and inure to the benefit
of and be enforceable by Burdale, the Company and their respective
successors and assigns, except that the Company may not assign its
rights under any Finance Document. Burdale may, after notice to the
Company, assign its rights and delegate any or all of its obligations
under the Finance Documents.
22.2 TRANSFER BY BURDALE
Burdale may at any time assign, transfer or offer participations in
all or a proportion of all its rights and obligations under the
Finance Documents to any other bank or financial institution.
23. GOVERNING LAW AND JURISDICTION
23.1 GOVERNING LAW
This Agreement will be governed by and construed in accordance with
English law.
23.2 JURISDICTION
For the benefit of Burdale, the Company irrevocably agrees that the
courts of England will have non-exclusive jurisdiction to settle any
disputes which may arise out of or in connection with this Agreement
and that accordingly any suit, action or proceeding arising out of or
in connection with this Agreement may be brought in such courts.
23.3 PROCESS AGENT
For the benefit of Burdale, the Company irrevocably accepts its
appointment as GLC's agent for the service of process pursuant to the
GLC Guarantee.
24. DISCLOSURE OF INFORMATION
24.1 PUBLICITY
Burdale may advertise or publicise in such publications and to such
persons as Burdale may in its discretion think fit such particulars
of this transaction as Burdale may in its absolute discretion deem
appropriate.
24.2 CONFIDENTIAL INFORMATION
Burdale agrees to hold, in accordance with its customary procedures
for handling confidential information and safe and sound lending
practices, any confidential information that it may receive from any
Obligor or Related Company pursuant to this Agreement in confidence,
except for disclosure:
(a) to legal counsel, accountants, auditors and other professional
advisors to any Obligor or any Related Company or Burdale;
(b) to regulatory officials having jurisdiction over Burdale;
(c) as required by applicable law or legal process (provided that
in the event Burdale is so required to disclose any such
confidential information, that Burdale shall endeavour
promptly to notify the Obligor or Related Company (as the case
may be), so that the Obligor or Related Company (as the case
may be) may seek a protective order or other appropriate
remedy) or in connection with any legal proceeding to which
Burdale or such Obligor or Related Company (as the case may
be) are adverse parties;
(d) to another financial institution or its counsel in connection
with an assignment or disposition or proposed assignment or
disposition to that financial institution of all or part of
Burdale's interests hereunder or a participation interest
herein, provided that such disclosure is made subject to an
appropriate confidentiality agreement on terms substantially
similar to this Clause; and
(e) to prospective purchasers of any Collateral (other than
competitors of any Obligor or Related Company or their
Subsidiaries unless all Obligations are then due and payable)
in connection with any disposition thereof, provided that such
disclosure is made subject to an appropriate confidentiality
agreement on terms substantially similar to this Clause.
For purposes of the foregoing, "confidential information" shall mean
all information respecting any Obligor or any Related Company, other
than (a) information previously filed with any governmental agency
and available to the public, (b) information previously published in
any public medium from a source other than, directly or
indirectly, Burdale, and (c) information previously disclosed by GLC
or any of its Subsidiaries to any person not associated with GLC
without a written confidentiality agreement.
Nothing in this Clause 24 shall be construed to create or give rise
to any fiduciary duty on the part of Burdale to any Obligor or any
Related Company or their Subsidiaries.
25. COUNTERPARTS
This Agreement may be executed in any number of counterparts and all
of such counterparts taken together will be deemed to constitute one
and the same instrument.
This Agreement has been entered into on the date stated at the beginning of the
Agreement.
SCHEDULE 1
CONDITIONS PRECEDENT
AUTHORISATIONS
1. A certified copy of the memorandum and articles of association and
certificate of incorporation and all certificates of incorporation on
change of name of each Corporate Obligor and copies of the equivalent
US constitutional documentation for GLC.
2. A certified copy of a resolution of the board of directors of each
Corporate Obligor and GLC approving each of the Finance Documents to
which it is a party and the transactions contemplated by each of such
Finance Documents and authorising a specified person or persons to
execute each of the Finance Documents (as a deed where necessary) and
to give all notices, requests, instructions, certificates and other
documents to Burdale in connection with such Finance Documents.
3. A director's certificate executed by a director of each Corporate
Obligor and a secretary's certificate executed by the secretary of
GLC:
(a) certifying that all corporate action of such Corporate Obligor
or Related Company (as the case may be) required to enable it
to enter into, execute and perform each of the Finance
Documents to which it is a party and to authorise the
transactions contemplated therein has been taken;
(b) setting out the specimen signatures of those persons referred
to in 2 above; and
(c) in relation to the Corporate Obligors only, certifying that
utilisation of the Facility Limit would not cause any
borrowing limit binding on it to be exceeded.
4. A certified copy of all other resolutions, authorisations, approvals,
consents and licences (corporate, official or otherwise (including
exchange control consents)) necessary or desirable for the entry into
and performance of the Finance Documents to which each Obligor and
each Related Company is party and/or for the enforceability and
validity of such Finance Documents.
5. A telephone and facsimile indemnity in the form set out in Schedule
4.
DOCUMENTS AND SECURITY
6. The Finance Documents duly executed by each party to them (excluding
Burdale).
7. A certified copy of each notice required to be despatched pursuant to
the Debenture.
8. Acknowledgements from all recipients of the notices referred to in 7
above as required by the Debenture or agreement by the relevant
recipient of the form of acknowledgement to be given by it.
9. Evidence of the level and extent of the insurance of the Company and
that Burdale is stated as loss payee and joint insured and that the
insurance policies comply with the requirements of the Finance
Documents.
10. Details of the amounts standing to the credit of each Charged Account
as at, or immediately prior to, today's date.
WAIVERS AND CONSENTS
11. All waivers, releases, terminations and other documents as Burdale
may request to evidence and effect the termination of any existing
financing arrangements of each Corporate Obligor with any other
lender and the termination and release by any such other lenders of
any and all of its/their interests pursuant to their financing
arrangements with each Corporate Obligor.
12. All consents, waivers, acknowledgements and other agreements from
third persons which Burdale may deem necessary or desirable in order
to permit, protect and perfect the security interests granted by the
Corporate Obligors to Burdale including, without limitation, waivers
by lessors, owners or mortgagees, processors, warehousers or
consignees of any security interests, or other claims which such
persons may have in relation to the Collateral.
AVAILABILITY LIMIT INFORMATION
13. A schedule of Receivables and all such other information as Burdale
requires pursuant to Clause 4 in order to determine the amount of
Eligible Receivables and Eligible Unbilled Receivables as at today's
date.
14. Such information as Burdale may require in order to determine each
Availability Limit for the purposes of Clause 4.
15. Burdale having determined the Availability Limits pursuant to Clause
4 to apply as from today's date.
MISCELLANEOUS
16. Evidence that the total amount available for Utilisation immediately
following the proposed Initial Utilisations shall not be less than
L1,000,000.
17. Any fees due and costs to be met pursuant to Clause 16 having been
paid.
18. Satisfactory results to all final company searches in relation to
each Corporate Obligor.
19. Opinion from Counsel in California.
20. A certified copy of any Inter-company loan agreement.
21. Copies of such other deeds, documents, consents or authorities as it
requires having regard to the transactions contemplated by this
Agreement and the reasonable requirements of Burdale to protect its
interests as a lender.
SCHEDULE 2
PART I - FORM OF PURCHASE REQUEST
Date: *
To: Burdale Financial Limited
00 Xxxxx Xxxx Xxxxxx
XXXXXX X0X 0XX
Attention: Company Secretary
Dear Sirs,
FACILITY AGREEMENT DATED * (THE "FACILITY AGREEMENT")
We refer to the Facility Agreement, terms defined in which have the same meaning
when used in this Purchase Request.
1. We wish to sell to Burdale on or before * or such later date as the
Company agrees with Burdale (the "PURCHASE DATE") the Receivables
numbered assignment * amounting to L* details of which are set out in
the attached Schedule, initialled on each page for the purposes of
identification.
2. We hold the invoice (if any) strictly to your order and agree to
supply it, or a copy (certified by an officer of the Company or
otherwise as Burdale may from time to time approve) together with
certified copies of relevant shipping documents in respect of such
Receivables, and a copy of our irrevocable instructions to the
Account Debtor to pay the full amount of the relevant Receivable
(without deduction, withholding or set off) at maturity to the
Blocked Accounts, forthwith upon your request.
3. We further confirm that the relevant Receivables offered are readily
identifiable from the books of the Company.
[TO BE INSERTED IN FIRST PURCHASE REQUEST ONLY]
4. [In addition to the offer made in paragraph 1 above, we hereby offer
to sell to you all future Receivables (during the continuance of the
Facility Agreement) subject to the terms of the Facility Agreement
(including in relation to the calculation of the Purchase Price).
This offer together with the offer made in paragraph 1 above shall be
regarded as a single composite offer which may be accepted or
rejected in its entirety but not in part only. Your acceptance of
this offer shall be demonstrated by the payment to us of any amount
of Purchase Price in relation to the Receivables described in
paragraph 1 above.]
We confirm that no Default has occurred and is continuing or would result from
Burdale purchasing the Receivables offered, no Availability Limit will be
breached as a result of Burdale
purchasing the Receivables offered and all the representations and warranties in
Clauses 8 and 13 of the Facility Agreement which are to be made or repeated as
at the date of this Purchase Request are true and correct.
The terms of the Agreement shall apply to this Purchase Request.
Yours faithfully
for and on behalf of
[the Company]
SCHEDULE
INVOICE NO ACCOUNT DEBTOR INVOICE DATE
PART II - FORM OF CASH REQUEST
Date: *
To: Burdale Financial Limited
00 Xxxxx Xxxx Xxxxxx
XXXXXX X0X 0XX
Attention: Company Secretary
Dear Sirs,
FACILITY AGREEMENT DATED * (THE "FACILITY AGREEMENT")
We refer to the Facility Agreement, terms defined in which have the same meaning
when used in this Cash Request.
Pursuant to the terms of Clause 5.2, we wish you to pay to us the sum of L* as
follows:
(a) Utilisation Date: *
(b) Payment Instructions: Please credit the following account:
Account Name: *
Bank: * Bank plc
Branch: * Branch
Account No: *
Sort Code: **-**-**
We confirm that no Default has occurred and remains outstanding or would result
from the requested Utilisation being made, no Availability Limit would be
breached by the making of the requested Utilisation and that all the
representations and warranties in Clauses 8 and 13 which are to be made or
repeated as at the date of this Cash Request are true and correct.
Yours faithfully
for and on behalf of
[the Company]
PART III - FORM OF L/C REQUEST
Date: *
To: Burdale Financial Limited
00 Xxxxx Xxxx Xxxxxx
XXXXXX X0X 0XX
Attention: Company Secretary
Dear Sirs,
FACILITY AGREEMENT DATED * (THE "FACILITY AGREEMENT")
We refer to the Facility Agreement, terms defined in which have the same meaning
when used in this L/C Request.
We wish to have [state type of L/C] opened for our account under the Facility
Agreement as follows:
(a) Issue Date: *
(b) Expiry Date: *
(c) Requested Amount: *
(d) Beneficiary: *
(e) Beneficiary's bank account: *
(f) Concerning: [Reference the agreement
under which the liability
arises, describe its nature
and quantify it]
We confirm that no Default has occurred and is continuing or would result from
the requested Utilisation, no Availability Limit will be breached as a result of
the requested Utilisation and all the representations and warranties in Clauses
8 and 13 of the Facility Agreement which are to be made or repeated as at the
date of this L/C Request are true and correct.
Yours faithfully
for and on behalf of
[the Company]
SCHEDULE 3
PREFERENTIAL CREDITOR LISTING
To: Burdale Financial Limited
00 Xxxxx Xxxx Xxxxxx
XXXXXX X0X 0XX
Attention: Company Secretary
Dear Sirs,
As at the month ended * preferential creditors were as follows:
L Period Due Date
Wages & Salary
PAYE/NIC
VAT
Other (Please specify)
Total
--------------------
--------------------
--------------------------------------------------------------------------------
Payments during the month ended * were as follows:
L Period Due Date
Wages & Salary
PAYE/NIC
VAT
Other (Please specify)
Total
--------------------
--------------------
--------------------------------------------------------------------------------
I certify that the information contained in this report is correct:
Signature:....................................
Name:.......................................... Date:
SCHEDULE 4
TELEPHONE AND FACSIMILE INDEMNITY
CORPORATE MANDATE FOR TELEPHONE AND
FACSIMILE INSTRUCTIONS
1. We, (Name of ......................................................(the
"COMPANY") of.............................................. (Registered
Office) refer to the Facility Agreement dated..........................
between Burdale Financial Limited ("BURDALE") and the Company (the
"FACILITY AGREEMENT") pursuant to which Burdale is to operate
account(s) and/or credit or other facilities or banking arrangements
for the Company (together the "FACILITIES").
2. In consideration of Burdale entering into the Agreement and agreeing to
make the Facilities available to act in accordance with the terms of
this Mandate:
(a) notwithstanding the terms of the Facility Agreement, any
existing contractual relationship or any future mandate or
other agreement or course of dealing between Burdale and the
Company, Burdale is requested and authorised to rely upon, and
act in accordance with, any notice, demand or other
communication in respect of the Facilities (each an
"INSTRUCTION" and together "INSTRUCTIONS") which may from time
to time be, or purport to be, given by way of the methods of
communication specified in the Schedule on behalf of the
Company by any two of the persons identified in the relevant
sections in the Schedule without any enquiry on Burdale's part
as to the authority or identity of the persons giving or
purporting to give such Instruction or Instructions and
regardless of the circumstances prevailing at the time of such
Instruction or Instructions;
(b) Burdale shall be entitled to treat any Instruction as fully
authorised by, and binding upon, the Company and shall be
entitled (but not bound) to take such steps in connection
with, or in reliance upon, such Instruction as Burdale in its
sole and absolute discretion may consider appropriate, whether
such Instruction includes an instruction to pay money or
otherwise to debit or credit any account, or relates to the
disposition of any money, securities or documents, or purports
to bind the Company to any agreement or other arrangement with
Burdale or with any other person or to commit the Company to
any other type of transaction or arrangement whatsoever,
regardless of the nature of the transaction or arrangement or
the amount of money involved and notwithstanding any error or
misunderstanding or lack of clarity in the terms of such
Instruction; and
(c) the Company undertakes forthwith on demand by Burdale to
indemnify Burdale and to keep Burdale indemnified against all
losses, claims, actions, proceedings, demands, damages, costs
and expenses incurred or sustained by Burdale, of any nature
and howsoever arising, out of or in connection with its
acknowledgement and compliance with any Instruction or
Instructions.
3. The Company acknowledges and agrees that Burdale and each of Burdale's
nominees or agents shall not be responsible for any claim, action,
proceeding, demands, loss, damage, liability cost or expenses of any
nature and howsoever suffered or incurred arising directly or
indirectly as a result of any act or thing which Burdale and/or such
nominee or agent allows, takes or does or omits to allow, take or do in
relation to the Instructions or any of them under or pursuant to this
mandate other than in respect of Burdale's negligence or wilful
default.
4. The terms of this Mandate shall remain in full force and effect unless
and until Burdale receives a written notice of termination of this
Mandate from the Company giving not less than seven days' notice of
termination and signed by an officer of the Company (as to whose
identity and authority Burdale shall be under no obligation or duty to
the Company to make any enquiry whatsoever) PROVIDED THAT such seven
days' notice period shall not commence until the date, Burdale
acknowledges receipt of such written notice that such termination will
not release the Company from any liability under this Mandate in
respect of any act performed by Burdale in accordance with the terms of
this Mandate prior to the effective date of termination of this
Mandate.
5. This Mandate shall be governed by, and construed in accordance with
English Law. The Company agrees for the benefit of Burdale that the
courts of England shall have jurisdiction to hear and determine any
suit, action proceeding and to settle any disputes which may arise
under or in connection with this Mandate and for such purpose the
Company irrevocably submits to the non-exclusive jurisdiction of such
courts.
Signed........................................................
Dated.........................................................
Duly authorised for and on behalf of (Name of Company)..........................
pursuant to a Resolution of the Board of Directors dated........................
THE SCHEDULE
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*METHOD OF COMMUNICATION PERSONS AUTHORISED TO GIVE INSTRUCTIONS SIGNATURE
---------------------------------- --------------------------------------------- -------------------------------
Telephone
---------------------------------- --------------------------------------------- -------------------------------
---------------------------------- --------------------------------------------- -------------------------------
---------------------------------- --------------------------------------------- -------------------------------
Facsimile
---------------------------------- --------------------------------------------- -------------------------------
---------------------------------- --------------------------------------------- -------------------------------
---------------------------------- --------------------------------------------- -------------------------------
Other (specify):
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---------------------------------- --------------------------------------------- -------------------------------
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* Complete as appropriate - in the absence of completion, no instructions
will be accepted in relation to that method of communication.
SIGNATORIES
THE COMPANY:
GEOLOGISTICS LIMITED
By:
BURDALE:
BURDALE FINANCIAL LIMITED
By:
