The Royal Bank of Scotland plc is registered in Scotland No 90312
Registered Office: 00 Xx Xxxxxx Xxxxxx, Xxxxxxxxx XX0 0XX
Agency agreements exist between members of The Royal Bank of Scotland Group
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THIS IS AN IMPORTANT LETTER WHICH SETS OUT THE TERMS AND CONDITIONS OF YOUR
GROUP OVERDRAFT FACILITY. PLEASE NOTE THAT OVERDRAFTS ARE REPAYABLE ON DEMAND.
WE RECOMMEND THAT YOU TAKE INDEPENDENT LEGAL ADVICE IF YOU HAVE ANY DOUBTS
REGARDING THE TERMS AND CONDITIONS OF THE FACILITY.
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The Royal Bank of Scotland
Solent Corporate Centre
Date: 6th March 2006 Address: 0 Xxxxxxxxx Xxxxxxxx Xxxx, PO Box 462
Templars Way, Chandlers Ford
Hants XX00 0XX
Private & Confidential Telephone: 000 0000 0000
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Vicon Industries Limited
Company Number 1551194
Xxxxxx Xxx,
Xxxxxxxxxxx Xxxx,
Xxxxxxx,
Xxxxxxxxx,
XX00 0XX
Dear Sirs
Multi-Currency Overdraft Facility
Account Holding Branch/Office:
Portsmouth Commercial Road Branch (sorting code 56 00 64)
I write to advise the terms and conditions upon which The Royal Bank of Scotland
plc ("RBS") acting as agent for National Westminster Bank Plc is willing to make
available to you a multi-currency overdraft facility for the purpose of your
business.
1 Definitions
1.1 In this letter the following expressions shall have the following
meanings:-
"Bank" means National Westminster Bank Plc, which is the lender under this
letter, and the "Bank" means its successors and assigns;
"euro" means the single currency adopted or to be adopted by participating
member states under the Treaty establishing the European Union;
"Facility" means the multi-currency overdraft facility made available or to
be made available on the terms and conditions set out in this letter;
"Facility Accounts" means the Sterling Current Account and the Foreign
Currency Current Account;
"Facility Limit" means (pound)1,000,000;
"Foreign Currency Accounts" means the Foreign Currency Creditor Account and
the Foreign Currency Current Account;
"Foreign Currency" means any non-Sterling currency (including the euro)
which is freely convertible into Sterling and readily available in the
London Interbank Market;
"Foreign Currency Creditor Account" means the deposit account denominated
in United States Dollars referenced 000-00-00000000 (or as amended from
time to time pursuant to Clause 12.5);
"Foreign Currency Current Account" means the current account denominated in
euros referenced 000-00-00000000 (or as amended from time to time pursuant
to Clause 12.5) on which the Facility is made available;
"Sterling" means the lawful currency of the United Kingdom;
"Sterling Current Account" means the current account denominated in
Sterling on which the Facility is made available, referenced account number
00000000 (or as amended from time to time pursuant to Clause 12.5); and
"United States Dollars" and "US$" mean the lawful currency of the United
States of America.
Overdraft Limit(s) and Utilisation
1.2 The Facility may be utilised by overdrawing the Facility Accounts up to the
Facility Limit. The Facility Limit must not at any time be exceeded.
1.3 For the purpose of calculating utilisation of the Facility:-
(a) any credit balances on the Foreign Currency Accounts will be netted
against any debit balance on the Foreign Currency Accounts in the same
Foreign Currency; then
(b) the Sterling equivalent of the net balances on the Foreign Currency
Accounts shall be calculated by reference to the prevailing market
rate of exchange; and then
(c) the Sterling equivalent of the net balances on the Foreign Currency
Accounts will be netted against (or aggregated with) the balance on
the Sterling Current Account.
1.4 The Bank may decline to pay a cheque (or allow any other payment or
withdrawal) from a Facility Account (whether in credit or debit) which
would result in the Facility Limit being exceeded.
1.5 If the Bank does pay a cheque (or allows any other payment or withdrawal)
resulting in the Facility Limit being exceeded it will not mean that the
Facility Limit has changed or that the Bank will agree to pay any other
cheque (or allow any other payment or withdrawal) which would have that
effect.
1.6 The Bank may disregard any uncleared credits for the purposes of
calculating the utilisation of the Facility (and any interest payable). If
however the Bank does pay a cheque (or allows any other payment or
withdrawal) against uncleared credits this does not mean that it is bound
to do so at other times.
Creditor Account
The Foreign Currency Creditor Account should remain in credit at all times and
the Bank may decline to pay a cheque (or allow any other payment or withdrawal)
which could result in a cleared debtor balance. If the Bank does pay a cheque
(or allows any other payment or withdrawal) resulting in a cleared debtor
balance it will not mean that a borrowing facility has been established or that
the Bank will agree to pay any other cheque (or allow any other payment or
withdrawal) which would have the same effect. 2 Preconditions
2.1 The Bank will not be obliged to make the Facility available until the
following conditions have been met:-
(a) any security required in terms of Clause 9 of this letter has been
valued and completed to the Bank's satisfaction; and
(b) you have accepted the Facility on the terms and conditions set out in
this letter by returning the duplicate of this letter with the
acknowledgement duly signed, within 28 days of the date of this
letter.
3 Availability
3.1 The Facility is repayable upon demand in accordance with normal banking
practice and the Facility can be unconditionally cancelled by the Bank at
any time.
3.2 Subject to the Bank's rights under Clause 5.1 the Facility will be
available until notification to you by the Bank of its intention to cancel
the Facility. Without prejudice to the Bank's rights under this Clause the
Facility will be subject to review on at least an annual basis.
3.3 The Bank will always give notification of its intention to place a
restriction on your ability to make drawings on the Facility.
3.4 You may at any time advise us in writing that the Facility is no longer
required.
4 Set Off, Retention and Appropriation
4.1 In addition to any other rights to which it may be entitled, including
rights under any guarantee or security, the Bank may retain, set off or
appropriate any credit balances (whether current or not yet due) either on
the Facility Accounts, the Foreign Currency Creditor Account or any other
accounts you may have with the Bank against any debit balances on any such
accounts, or any other obligations you may owe to the Bank whether present,
future, actual or contingent.
4.2 The Bank may exercise any of these rights without prior notice both before
and after demand and in so doing may, where required, convert between
currencies at the prevailing market rate of exchange.
5 Interest
Sterling Current Account
5.1 Interest will be charged separately by the Bank on the cleared debtor
balance of the Sterling Current Account as follows:-
(a) for borrowing up to the Facility Limit, at a rate which is equivalent
to 1.5% per annum over the Bank's Sterling Base Rate; and
(b) for borrowing in excess of the Facility Limit, at a rate which is
equivalent to 4.5% per annum over the Bank's Sterling Base Rate.
The Bank's Sterling Base Rate as at 2nd March 2006 was 4.5% per annum.
Changes to the Bank's Sterling Base Rate may be made at any time and
with immediate effect, such changes being advised by way of press
notice.
5.2 Such interest will be calculated both before and after demand, decree or
judgement on a daily basis and a year of 365 days and debited by the Bank
to the Sterling Current Account quarterly on the final business day of
March, June, September and December (or such other dates as the Bank may
advise from time to time).
Foreign Currency Current Account
5.3 Interest on any debtor balance on the Foreign Currency Current Account will
be charged at 1.5% per annum over the Bank's relevant Currency Lending
Rate. The Bank's Currency Lending Rates are variable and will therefore
change from time to time.
5.4 Such interest will be calculated on the Foreign Currency Current Account
both before and after demand, judgement or decree on a daily basis and a
year of 360 days (or such other period as reflects market convention in the
relevant currency) and shall be debited to the Foreign Currency Current
Account quarterly on the first business day of March, June, September and
December.
6 Costs
6.1 An arrangement fee of (pound)1,850 is payable and will be debited to
Sterling Current Account 00000000 following receipt by the Bank of your
acceptance of the terms and conditions of the Facility as set out in this
letter or following your first utilisation of the Facility, whichever is
the earlier. You will also be responsible for paying any costs incurred by
the Bank in connection with the Facility whether as a result of you
breaking the terms of the Facility or not. These costs will include (but
not be limited to) costs of taking and discharging any security; taking
steps, including court action, to obtain payment; enforcing and/or
preserving the Bank's rights under any security held for the Facility;
tracing you if you change address without notice and communicating with you
if you break the terms of the Facility. If such costs remain unpaid then
they may be debited by the Bank to any of the Facility Accounts or the
Foreign Currency Creditor Account.
6.2 Further fees will be payable from time to time in respect of the Bank
reviewing the operation and ongoing availability of the Facility and you
will be advised by the Bank at least 14 days in advance of any such fee
being payable.
7 Security
7.1 The Facility will be secured by the following:-
(a) the existing available security held by the Bank as follows:-
(i) a Debenture by you;
(ii) a first Legal Charge over Site X0, Xxxxxx Xxx, Xxxxxxxxxxx
Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxx Xxxx, Xxxxxxx XX00 0XX and its
associated assets; and
(b) all further available security which the Bank may in future obtain.
7.2 Any additional security will require to be granted in the Bank's preferred
form. The value of the security will be reviewed regularly and, without
prejudice to its overriding right to call for repayment on demand, the Bank
may seek additional security if there is a significant drop in the value of
the security held.
8 Financial Information
8.1 To enable the Bank to monitor the Facility you will provide:-
(a) as soon as they become available but in any event within 180 days
after the end of your financial year, your audited financial
statements and the audited financial statements of any company which
is or becomes your subsidiary within the meaning of Section 736 of the
Companies Xxx 0000 for that year;
(b) as soon as they become available but in any event within 21 days after
the end of the financial period to which they relate and in a format
acceptable to the Bank, your monthly management accounts incorporating
balance sheet, profit and loss account and aged list of debtors and
creditors (the "Management Accounts");
(c) promptly, all notices or other documents sent by you to your
shareholders and/or creditors; and
(d) promptly, such further information regarding your financial condition
and operations as the Bank may reasonably request.
8.2 All accounts and other financial information provided to the Bank will be
prepared consistently and in accordance with generally accepted accounting
standards.
9 Financial Performance
9.1 The financial statements and Management Accounts will require to
demonstrate that on the last day of the period covered by the relevant
statements/accounts:-
(a) Overdraft Utilisation was not more than 40% of the aggregate of
Debtors and Stock less all sums due to preferential creditors; and
(b) Overdraft Utilisation was not more than 66% Debtors
failing which, without prejudice to the Bank's overriding right to
call for repayment on demand, the Bank, after due notice, may amend,
restrict or withdraw the Facility.
9.2 For the purpose of this Clause the following definitions shall apply:-
"Debtors" means the value of your trade debtors aged less than 90 days
excluding, as determined by the Bank (a) inter company debtors, (b)
debtors who are also creditors and (c) debtors in dispute or known to
be doubtful.
"Overdraft Utilisation" means the utilisation of the facility as
calculated pursuant to Clause 2.2 as at the close of business on the
final business day of the period covered by the financial statements
or Management Accounts.
"Stock" means the value of trade stock (at the lower of cost and net
realisable value) excluding (a) obsolete stock, (b) work in progress
and (c) such other stock as the Bank may reasonably decide to exclude.
10 Miscellaneous
10.1 The Bank may debit any of the Facility Accounts in accordance with the
terms of Clauses 7 and 8 of this letter even if it results in the Facility
Limit being exceeded.
10.2 These terms and conditions will not be affected in any way by any of the
Facility Accounts or the Foreign Currency Creditor Account being allocated
another account number/reference by the Bank or being transferred to
another branch, office or department of the Bank.
10.3 The Bank may change any of these terms and conditions by giving at least 30
days' written notice to you.
10.4 In the event of the Bank demanding repayment of the Facility in terms of
Clause 5 of this letter:-
(a) subject to Sub-Clause 12.4(c) below, you will require to repay any
debtor balance on the Foreign Currency Accounts in immediately
available funds of the relevant Foreign Currency (or such other funds
as may for the time being be customary for the settlement of
international banking transactions in such Foreign Currency);
(b) all payments under the Facility will require to be made without set
off or counterclaim and free and clear of any deduction, whether of
present or future taxes, stamp duty or other charges unless you are
required by law to make such payment subject to any deduction or
withholding in which case the relevant payment will require to be
increased to the extent necessary to ensure that the Bank receives a
sum equal to the sum which it would have received had you not been
required to make such a deduction or withholding;
(c) the Bank reserves the right, at any time after the serving of demand,
to convert any balance on the Foreign Currency Accounts (together with
any accrued interest and unpaid costs, charges, fees and expenses
denominated in Foreign Currency) to Sterling at the prevailing market
rate of exchange and pass a corresponding debit against the Sterling
Current Account.
10.5 Any requests for the addition of Facility Accounts and/or Foreign Currency
Creditor Accounts to the Facility must be in writing (in the case of
Foreign Currency Accounts, using the relevant application form required by
the Bank), will be at the Bank's sole discretion and may be subject to
these terms and conditions being suitably amended to the Bank's
satisfaction.
10.6 RBS may act as agent for the Bank in connection with the administration of
the Facility.
Please indicate acceptance of the above terms and conditions by arranging for
the acknowledgement on the duplicate of this letter to be signed and returned to
me. The Bank will not be obliged to provide the Facility until the
acknowledgement on the duplicate of this letter has been returned duly signed.
The Bank may, at its option, treat any usage of the Facility as acceptance
(without amendment) of the terms and conditions of this letter.
Please do not hesitate to contact me if you require clarification of any of the
above terms and conditions.
Yours faithfully
For and on behalf of RBS acting as agent for the Bank
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
Relationship Director
Having decided that the proposed Facility is appropriate and in the interests of
Vicon Industries Limited, the Facility is hereby accepted on the above terms and
conditions.
For and on behalf of Vicon Industries Limited
/s/ Xxxxxxxxxxx X. Xxxx
Signature/s .......................... Date/s ........................
.......................... ........................
59246/CCD/SC/NWSOCO
