[BANK OF SCOTLAND LETTERHEAD]
PRIVATE & CONFIDENTIAL
The Directors
Siteinput Limited
0 Xxxxxx Xxxxxx
Xxxxxxx
Xxxxxxxxx
XX0 0XX
Term Loan
6th November, 1995
The Bank is pleased to offer a facility to the undernoted Borrower on the
following terms and conditions ("this Offer"):
1. Main Financial Provisions
1.1. Name and Address of Borrower:
Siteinput Limited
0 Xxxxxx Xxxxxx
Xxxxxxx
Xxxxxxxxx
XX0 0XX
1.2. Amount of the facility: (Pound)350,000( the "facility")
1.3. Period of the facility: 60 months from the date of the drawing under
the facility.
1.4. An Arrangement Fee of (Pound)3,500 is payable on acceptance of this
Offer and will be debited to the Servicing Account unless otherwise
agreed.
1.5. The Servicing Account is Account Number 00 with the Bank. The
Borrower must ensure that at all times there are sufficient funds
available in the Servicing Account to pay the capital and interest
payments as and when they are due and payable under the facility.
1.6. Interest will be calculated by the Bank on a day-to-day basis on the
outstanding balance of the facility owing to the Bank. Interest
accruing will be debited to the Servicing Account on the last
business day of each month. The interest rate will be 2% per annum
over the Bank's Base Rate, as fluctuating from time to time.
1.7 The Bank's Base Rate at the date of this Offer is 6.75% per annum.
Changes are notified in national newspapers and all the Bank's
Branches.
1.8. The amount drawn under the facility must be repaid as follows:
Number of repayments: Ten
- 2 -
Amount of each repayment: (Pound)35,000
Repayments will be debited to the Servicing Account at intervals of
six months commencing six months after the date of the drawing under
the facility.
2. Use of Facility
The facility may be used only for the funding of the acquisition of the
shares of Effective Sales Personnel Limited.
3. Early repayment of the Facility
3.1. The facility may be repaid in whole or in part earlier than as
specified in paragraph 1.8 of this Offer provided repayment takes
place on the last business day of a calendar month and the
Borrower shall:
(a) give at least 30 days' prior notice to the Bank;
(b) at the time of early repayment, pay an additional amount
equal to three months' interest (at the rate then applicable
to the facility) on the amount of the early repayment; and
(c) pay an administration fee to the Bank; the minimum such fee
at the date of this Offer is (Pound)50.00.
3.2. If only part of the facility is repaid early the Borrower shall
ensure that the repayments required under this Offer shall
continue to be paid until all sums due under this Offer have been
paid.
3.3. Any sums repaid early may not be redrawn.
3.4. Paragraphs 3.1 to 3.3 also apply where a Borrower is required to
repay all or part of the facility early because an asset purchased
by using the facility has been sold.
4. Financial Information
Throughout the period the facility is available (including any extension
of the facility) the Borrower must provide the Bank with the following
financial information relating to the Borrower and each of its
subsidiaries:
Annual financial statements, within 120 days after the end of the
financial year to which they relate;
Annual budget and cash flow projections, not less than one month
before the start of the period to which they relate;
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Monthly management accounts, within one month after the end of the
period to which they relate;
5. Events of Default
5.1. The Bank may declare that an event of default has occurred upon or
at any time after the happening of any of the following events:
(a) if the Borrower fails to pay any sum on the due date for
payment under this Offer or any other sum due and payable to
the Bank (unless the payment was not made due to a technical
error in the transmission of funds beyond the control of the
Borrower, and the payment is then made within two Business
Days of the due date);
(b) if the Borrower fails to comply with any other undertaking
or obligation on its part contained in this Offer or in any
security document and, if such failure is capable of remedy,
such failure is not remedied to the satisfaction of the Bank
within 14 days after the Bank has given written notice;
(c) if the Borrower fails to pay any of its indebtedness on the
due date or within any applicable grace period or following
a demand for repayment;
(d) if a petition is presented or an order is made or resolution
is passed for the bankruptcy, sequestration, winding-up or
administration of the Borrower or (in Scotland) the
appointment of a judicial factor to the Borrower other than
as a result of an action which can be reasonably proven to
the Bank is of a frivolous or vexatious nature;
(e) if any distress, execution, sequestration or other legal
process is levied or enforced or sued out against any of
the assets of the Borrower;
(f) if any person takes possession of, or a receiver is
appointed over, the whole or any part of the assets of the
Borrower;
(g) if the Borrower ceases or suspends payment of sums due or is
unable to pay debts as they fall due or is deemed unable to
pay sums due or is deemed apparently insolvent under
insolvency legislation;
(h) if any consent required to make any or all of the terms of
this Offer or any security document legal, valid and
binding, or to enable the Borrower to perform its
obligations under this Offer or any security document,
ceases to be in full force and effect unless such cessation
is remedied to the satisfaction of the Bank within 14 days;
(i) where the Borrower carries on a business if the Borrower
shall cease or suspend all or a substantial part of its
operations, otherwise as part of a reorganization approved
in writing by the Bank, or shall enter into any unrelated
business;
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(j) there occurs any other event or series of events whether
related or not (including without limitation any material
adverse change in the business, assets or financial condition
of the Borrower) which the Bank may reasonably deem, and will
notify the Borrower in writing of such, would be likely to be
materially adverse (i) to the ability of the Borrower to
perform its obligations under this Agreement or under the
Security Documents or (ii) to the business, assets or
financial condition of the Borrower as a whole, unless, in
either case, the Borrower can remedy, to the Bank's
satisfaction, the situation within 14 days of the Bank's
notice to the Borrower;
(k) if the Borrower is a limited company and control of the
Borrower passes to any person without the Bank's prior
consent;
(l) if notice of withdrawal of any guarantee or security
provided by any third party is served on the Bank or if a
guarantor or provider of third party security (in the case of
an individual) shall die, unless alternative security,
acceptable to the Bank, is provided to the Bank; or if any of
the events specified in clauses (a) to (k) inclusive above
happen in regard to a guarantor or any subsidiary of the
Borrower (unless alternative security, acceptable to the Bank,
is provided to the Bank); or
(m) if, in the Bank's opinion, at any time after the date of this
Offer (i) a risk of the Bank incurring any environmental
protection liability or cost becomes evident under or
arising from any legislation (including delegated
legislation), any consent made or given under any legislation,
and any notice, order or correspondence related to such
legislation or consent and having the force of law (a
"Statutory Control") or as a result of its having taken
security from the Borrower or its subsidiaries (if any) or any
third party, (ii) the value of any assets of the Borrower or
its subsidiaries (if any) is diminished by (or by any matter
arising from) or as a consequence of any Statutory Control, or
(iii) the Borrower or its subsidiaries (if any) does not
comply with the terms of any order, consent or authorisation
under environmental protection legislation or any other
environmental protection regulation affecting the conduct and
continuance of its business, unless within 14 days of these
occurring they are remedied to the satisfaction of the Bank.
5.2. If the Bank declares that an event of default has occurred the
Bank may at (or at any time after) the time of making the
declaration:
(a) by notice in writing to the Borrower cancel the facility;
and/or
(b) by notice in writing to the Borrower demand immediate payment
of the sums outstanding (in which case the sums outstanding
shall become immediately due and payable by the Borrower) or
declare that the sums outstanding shall become due and payable
on demand; and/or
(c) elect that interest at the default rate (being 2% over the
rate specified in this Offer) will apply in which case
interest under the facility will become payable at that rate
before or after any court decree or judgement; and/or
(d) charge an administration fee to compensate it for the
additional time spent in administering the facility.
-5-
6. General Administrative Provisions
6.1. The Bank can withdraw this Offer at any time prior to acceptance.
However, unless it is withdrawn, this Offer is open for acceptance
which must reach the Bank within one calendar month of the date of
this Offer. If this Offer, duly signed, is not received by the Bank
within that period then, unless the Bank agrees otherwise, this
Offer shall lapse.
6.2. If the facility remains undrawn three months from the date of this
Offer (or such longer period as the Bank may agree) then it shall
automatically cease to be available.
6.3. A statement of the sums outstanding at any time and/or interest
and/or charges due to the Bank at any time, duly certified by a
Bank authorised official, shall (except where the Bank has made
an obvious error) be final and conclusive.
6.4. No delay by the Bank in exercising any right, power or privilege
under this Offer shall prevent the Bank from exercising it at a
later date and the Bank can exercise any of the powers conferred on
more than one occasion.
6.5. Unless the Bank otherwise agrees in this Offer, this Offer will be
governed by the law of the country in which the branch of the Bank
specified in this Offer is situated and the courts of that country
will have jurisdiction in relation to any matter relating to this
Offer.
6.6. Any notice from the Bank shall be effectively given if sent by post
to the Registered Office/place of business/residence of the
addressee last known to the Bank. Any notice shall be deemed to
have been given and received forty eight hours after being sent by
first class post.
7. Additional Conditions
7.1 Conditions Precedent Documents and Evidence required as Conditions
Precedent:
(a) A copy, certified as a true, complete and up-to-date copy by
a Director or the Secretary of each Group Company of the
Certificate of Incorporation of the Borrower and each Group
Company;
(b) A copy, certified as a true copy by a Director or the
Secretary of the Borrower and each relevant Group Company,
of resolutions of the Board of Directors of the Borrower
and each Group Company approving the Facilty and the giving
of the Security to which the Borrower or such Group Company
is a party and authorising certain of its officers to
execute and deliver the form of acceptance of this
Agreement and the Security (if appropriate) and to give
all notices and take all other action required of the
Borrower and each Group Company under the same;
(c) A copy, certified as a true copy by a Director or
Secretary of each relevant Group Company of resolutions of
the Board of Directors of such Group Company confirming
that the giving of financial assistance to the Borrower
will cause no reduction in the net assets of such Group
Company or, to the extent that there is a reduction, the
assistance can be provided out of distributable profits
and in determining whether there has been any reduction in
net assets each such Board of Directors shall consider
whether any liability is likely to be incurred in giving
the
-6-
Security and also confirm that no borrowing limit of such
Group Company will be exceeded by any borrowing under this
Facility and/or any other facility made or to be made
available by the Bank to such Group Company or any other
Banking Documents or the execution of the Security and that
the giving of the Security is in the commercial interest of
such Group Company and each such Board of Directors shall
state the reason for their conclusion;
(d) Certified copies of the relevant shareholder's resolutions
approving the financial assistance to be given by each
relevant Group Company thereunder;
(e) Certified copies of the statutory declaration of the
Directors of each relevant Group Company and the report of the
Auditors for the purposes of Section 156(4) of the Companies
Act 1985 and a non-statutory report of the Auditors for the
purposes of Section 155(2) of the Companies Act 1985
addressed to the Bank and such Group Company in the form
required by the Bank;
(f) Specimen signatures authenticated by a Director or the
Secretary of each relevant Group Company of the persons
authorised in the resolutions of the Boards of Directors
referred to in 2. above;
(g) A letter from the Borrower, signed by the Secretary of the
Borrower, listing the Directors of each Group Company and
confirming that those persons are all of its existing
Directors;
(h) Evidence satisfactory to the Bank that:-
i. the Banking Documents have been completed and delivered
in accordance with all their terms;
ii. all charges and securities (other than the Security)
created over all or any of each Group Company's assets
and undertaking and presently existing will be fully
discharged on or before Drawdown.
(i) Confirmation that insurance policies of the Group as required
pursuant to the terms of the Security Documents are in terms
satisfactory to the Bank and are in full force on Drawdown;
(j) A certificate of a duly authorised officer of the Borrower
confirming that at Drawdown the aggregate of the Borrowings of
the Borrower (including borrowings under any Banking
Documents) do not or, as the case may be would not, if fully
drawn, exceed any borrowing limit contained in the Borrower's
Memorandum and Articles of Association or in any trust deed or
other agreement or instrument.
7.2 Financial Covenants:
During the period of the facility and thereafter while any sum
remains owing to the Bank under this Offer the Borrower shall
ensure that:
(a) Tangible Net Worth:
Tangible Net Worth shall not at any time be less than
(Pound)350,000.
-7-
(b) Interest Cover for all Borrowings:
The ratio which EBIT for each 3 month period in the Borrower's
financial year bears to Total Interest for that period
shall not be less than 5:1.
(c) Net Debtor Cover:
The ratio which Trade Debtors bear to Borrowings due to the
Bank shall not at any time be less than 1.75:1.
7.3 Financial Definitions
"Borrowings" means all obligations and liabilities in the nature of
indebtedness (whether present or future, actual or contingent)
including (a) money borrowed or raised and capitalised interest
thereon (b) liabilities under any bond, note, debenture, loan stock
or other instrument or security (c) liabilities in respect of
acceptance or documentary credits or discounted instruments (d)
liabilities in respect of the acquisition cost of assets or services
to the extent payable on deferred payment terms (e) liabilities
under guarantees or indemnities (except product warranties) (f)
liabilities under debt purchase, factoring and similar agreements
and capital amounts owing under finance leases, hire purchase or
conditional sale agreements;
"GAAP" means generally accepted accounting practice in the United
Kingdgom;
"Group" means, at any time, each Borrower and its Subsidiaries, each
Borrower's Holding Company and each such Holding Company's
Subsidiaries. "Holding Company" and "Subsidiary" shall have the
meanings given in s.736 of the Companies Act 1985; and "Group
Company" shall be construed accordingly as any one of these;
"Total Interest" means, in relation to any specified period, the
aggregate amount of interest, commission and other recurrent
financial expenses attributable to Borrowings of the Group charged
or accrued for that period;
"EBIT" means, in relation to any specified period, the earnings of
the Group attributable to such period before deduction of taxation
and interest with such adjustments as the Bank, acting reasonably,
shall from time to time consider to be appropriate in the context of
each Group Company's business and the facility;
"Tangible Net Worth" means the aggregate of the amount from time to
time paid up on the issued share capital of the Group's parent
company and the amount standing to the credit of its consolidated
capital and reserves including any share premium account or capital
redemption reserve, but excluding any revaluation reserve, goodwill
and/or intangible assets which have not been approved by the Bank
but specifically including any goodwill arising from the acquisition
of Effective Sales Personnel Limited) plus or minus the amount
standing to the credit or debit of the consolidated profit and loss
account of the Group all as shown in the latest annual audited
financial statements or the latest management accounts approved by
the Bank;
"Trade Debtors" means debts due to each Group Company which arise
out of and are due and owing in the ordinary course of business,
which have not been outstanding for more than ninety days from the
date of the applicable invoice (or such other period as may be
agreed with the Bank) and which are not bad or doubtful or
determined by the Bank to be
-8-
bad or doubtful (and the Bank shall act reasonably in making such
determination) but excluding (a) any debt owed by a Group Company,
(b) any debt owed by any person who is also a creditor of a Group
Company to the extent of the amount owed by that Group Company to
that creditors and (c) any debt which has been assigned to or is
held in trust for any third party or is subject to any factoring or
invoice discounting or similar agreement, with such adjustments as
the Bank, acting reasonably, shall from time to time consider to be
appropriate in the context of each Group Company's business and the
facility.
8. Security
The Borrower will grant or cause to be granted to the Bank security in a
form acceptable to the Bank (which, unless otherwise stated below, must be
first-ranking and cover not only the amounts owing to the Bank under this
Offer but also all other sums due and to become due to the Bank) as
follows:
a) Debentures, in the Bank's standard format, constituting first
fixed and floating charges over the assets of the Borrower
and its subsidiaries, present and future ("the Group");
b) Guarantees from each member of the Group in respect of all
moneys and liabilities owing or incurred by each member of the
Group to the Bank.
Any security which may subsequently be held by the Bank shall be available
to secure the amounts owing to the Bank under this Offer and all other sums
due to the Bank, to the full extent that the terms of such security permit.
A charge of (Pound)250 will be made to cover the Bank's security
administration costs and will be debited on acceptance of this Offer.
9. Time Limit for Acceptance of Offer
To accept this Offer, the Borrower should please sign below where
indicated, and the completed Offer should be returned to the Bank at the
above address within one calendar month from the date of this Offer. A
duplicate of this Offer is enclosed for the Borrower to keep.
/s/ (illegible)
------------------------------------- Date of Offer: 6th November, 1995
For and on behalf of the Bank
We accept the above Offer.
Signed: /s/ (illegible)
-----------------------------
-------------------------------------
-------------------------------------
For and on behalf of Siteinput Limited
Date: 8th November 1995
--------------------------------
[LETTERHEAD OF BANK OF SCOTLAND]
The Directors
Xxxxxx Marketing Group Limited
(formerly known as Siteinput Limited)
0 Xxxxxx Xxxxxx
Xxxxxxx
Xxxxxxxxx
XX0 0XX
23rd July 1997
Dear Sirs
Supplemental Letter to a (Pound)350,000 Term Loan Facility
This letter is a first supplemental to the facility letter dated 6th November
1995 (the "Facility Letter") and made between Xxxxxx Marketing Group Limited
(the "Borrower") and the Bank of Scotland (the "Bank") under the terms of which
the Bank agreed to make available to the Borrower a secured term loan facility
in an aggregate principal sum not exceeding (Pound)350,000 (the "Original
Facility") in reliance on, the security as specified in the Facility Letter.
Whereas, the Borrower has requested and the Bank is willing to amend certain
provisions of the Facility Letter (as hereinafter set out) upon and subject to
the following terms and conditions:
1. DEFINITIONS
In this Letter, expressions and definitions used in the Facility Letter
shall, unless otherwise defined herein or the context otherwise requires,
have the same meanings herein and all references to Clauses shall be to
Clauses in the Facility Letter.
2. AMENDMENTS TO THE FACILITY LETTER
Forthwith upon the satisfaction of the conditions set out in Clause 3 below
the following amendments shall be made to the Facility Letter with effect
as of and from the date of this Letter and the Facility Letter shall be
read and construed accordingly:-
(a) Clause 1.5 of the Facility Letter shall be amended by inserting the
Account Number of Clause 1.5 into the first sentence;
(b) Clauses 7.2 and 7.3 of the Facility Letter shall be deleted and
replaced by the following new clauses 7.2 and 7.3 which shall read as
follows:-
"7.2 During the period of the facility and thereafter whilst any
sum remains owing to the Bank under the Offer the Borrower
shall ensure that:-
(i) Tangible Net Worth of the Group shall not at any time be
less than (Pound)500,000;
(ii) The ratio of Trade Debtors to Borrowings due to the Bank
shall not at any time be less than 1.75:1.0;
(iii) The ratio of EBIT to Bank Interest shall not be less
than 5.0:1.0;
These covenants shall be measured at the end of each month
with reference to montly management accounts and annual
audited accounts except (iii) which shall be measured on a
quarterly 12 month rolling basis."
"7.3 Financial Definitions
"Borrowings" means all obligations and liability in the nature
of indebtedness (whether present or future, actual or
contingent) including (a) money borrowed or raised and
capitalised interest thereon (b) liabilities under any bond,
note, debenture, loan stock or other instrument or security
(c) liabilities in respect of acceptance or documentary
credits or discounted instruments (d) liabilities in respect
of the acquisition cost of assets or services to the extent
payable on deferred payment terms (e) liabilities under
guarantee or indemnities (except product warranties) (f)
liabilities under debt purchase, factoring and similar
agreements and capital amounts owing under finance leases,
hire purchase or conditional sale agreements;
"Group" means, at any time, each Borrower and its
Subsidiaries, each Borrower's Holdings Company and each such
Holding Company's Subsidiaries. "Holding Company" and
"Subsidiary" shall have the meanings given in Section 736 of
the Companies Act 1985; and "Group Company" shall be construed
accordingly as any one of these;
"Bank Interest" means, in relation to any specified period,
the aggregate amount of interest, commission and other
recurrent financial expenses attributable to Borrowings of the
Group from the Bank charged or accrued for that period;
"EBIT" means, in relation to any specified period, the
earnings of the Group attributable to such period before
deduction of taxation and interest with such adjustments as
the Bank, acting reasonably, shall from time to time consider
to be appropriate in the context of each Group Company's
business and the facility;
"Tangible Net Worth" means the aggregate of the amount from
time to time paid up on the issued share capital of the
Group's parent company and the amount standing to the credit
of its consolidated capital and reserves (including any share
premium account or capital redemption reserve, but excluding
any revaluation reserve, goodwill and/or intangible assets
which have not been approved by the Bank) plus or minus the
amount standing to the credit or debit of the consolidated
profit and loss account of the Group all as shown in the
latest annual audited financial statements or the latest
management accounts approved by the Bank;
2
"Trade Debtors" means debts due to each Group Company which
arise out of and are due and owing in the ordinary course of
business, which have not been outstanding for more than ninety
days from the date of the applicable invoice (or such other
period as may be agreed with the Bank) and which are not bad
or doubtful or determined by the Bank to be bad or doubtful
(and the bank shall act reasonably in making such
determination) but excluding (a) any debt owed by a Group
Company, (b) any debt owed by any person who is also a
creditor of a Group Company to the extent of the amount owed
by that Group Company to that creditor and (c) any debt which
has been assigned to or is held in trust for any third party
or is subject to any factoring or invoice discounting or
similar agreement, with such adjustments as the Bank, acting
reasonably, shall from time to time consider to be appropriate
in the context of each Group Company's business and the
facility."
3. CONDITIONS PRECEDENT
The provisions of Clause 2 shall not come into force and effect until the
Bank has received from the Borrower in form and substance satisfactory to
the Bank, all of the following:-
(i) a copy, certified by a Director or Secretary of the Borrower of
minutes of the meeting of the Board of Directors of the Borrower at
which valid resolutions were adopted approving this Letter and all
other documents relating to this Letter and authorising a person or
persons to sign and deliver this Letter and all other documents
relating to this Letter on behalf of the Borrower, and to sign and
deliver or despatch all notices, communications or documents to be
given by the Borrower pursuant to or in connection with this letter;
and
(ii) the enclosed copy of this Letter together with the form of
acceptance xxxxxxx xxxx signed on the Borrower's behalf by persons
authorised to do so;
(iii) such other documents or information as the Bank may reasonably
require; and
4. CONFIRMATION BY THE BORROWER
The acceptance of this Letter shall be deemed for all purposes to
constitute the Borrower's confirmation that (other than such matters in
respect of which a deferral has been granted in writing by the Bank or
agreed by the Bank in writing) no Event of Default and/or other event
which, with the giving of notice and/or lapse of time would constitute an
Event of Default, has occurred and is continuing or would result by reason
of the execution and delivery of this Letter.
5. SECURITY
In consideration of the Bank agreeing to the amendments set out herein the
Borrower irrevocably and unconditionally confirms and reaffirms that the
benefit of the Security shall extend to and shall apply to all the
obligations and liabilities of the Borrower under the Facility Letter as
amended by this Letter and accordingly the Security shall, subject as
aforesaid, be interpreted and construed as referring to the Facility Letter
as amended by this Letter and the obligations of the Borrower thereunder
shall not be deemed to have been discharged by the acceptance of this
Letter. The Borrower undertakes to perform
3
all its obligations under the Security and confirms that the Security
remains in full force and effect and enforceable against it.
6. INCORPORATION
Upon the amendments hereby made coming into force, this letter shall be
construed as one with the Facility Letter. Accordingly, the Facility Letter
shall, where the context so requires, be read and construed throughout so
as to incorporate such amendments. Save as otherwise provided herein the
Facility Letter shall remain in full force and effect.
7. FEES, EXPENSES AND TAXES
(A) The Borrower will pay to the Bank, on demand, all reasonable costs
and expenses incurred by the Bank in connection with the negotiation,
preparation and execution of this letter (including but not limited
to, the reasonable fees and expenses of legal advisers and any Value
Added Tax). The Borrower shall also reimburse the Bank on demand for
all charges and expenses incurred in connection with the enforcement
of, or the preservation of any rights under this Letter and the legal
charges (including, but not limited to, the reasonable fees and
expenses of its legal advisers and any Value Added Tax).
(B) The Borrower shall pay all documentary and other like duties and
taxes, if any, to which this Letter or the security may be subject or
give rise and shall indemnify the Bank against any and all
liabilities with respect to or resulting from any delay or omission
on the part of the Borrower to pay any such duties.
8. GOVERNING LAW
This Letter shall be governed by and construed in accordance with English
law and the Borrower irrevocably submits and unconditionally submits to the
non-exclusive jurisdiction of the English courts.
Please signify your acceptance of this Letter by returning the attached
duplicate of this Letter, duly signed.
Yours faithfully,
Signed for and on behalf of
the Governor and Company of
the Bank of Scotland
/s/ X Xxxxxx
-----------------------
X Xxxxxx
Manager
