Exhibit 10
Euro Sales Finance plc
This document is important. If you are in any doubt about the implications of
signing this agreement you should, before you sign it, consult your solicitors
or accountants concerning your obligations under the agreement.
SALES FINANCE AGREEMENT
We, Euro Sales Finance plc, whose principal office is at Xxxxx Xxxxx, X0 Xxx
000, Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx, XX 13 7WH agree with you Ultralife
Batteries UK Limited (registered number 02927266) of 00 Xxxxxxxx Xxx, Xxxxxxxx
Trading Estate, Abingdon, Oxfordshire, 0X14 1TG that we shall provide you with a
sales finance service on the following terms and conditions and subject also to
our General Conditions, "the General Conditions", which are to be treated as
part of this Agreement.
1. Date: 29th April 2003
This Agreement is made on the date it is signed by us.
2. Type of Facility
(a) This Agreement for the sale and purchase of your book debts does not
involve us (in normal circumstances) having any direct contact with
your Customers and as such clauses 1(f) , 1(g), and 4.6 (b) of the
General Conditions will not apply.
(b) You will notify us of any credit notes or accounting reductions
proposed to be issued or made to a Customer and will not (except
with our prior permission in writing) issue or make any credit notes
or reductions exceeding (pound)1,000 in aggregate.
(c) Notwithstanding the provisions of clause 5(a) of the General
Conditions you will act as our agent to collect payments due from
your Customers in respect of book debts and you will deal with such
payments in accordance with clause 5(c) of the General Conditions,
and in any event forward collections to us forthwith upon receipt,
and not bank them in any of your accounts and hold any monies or
uncleared effects strictly to our order until paid over to us. This
agency will cease upon the termination of this Agreement.
(d) Upon the occurrence of a Termination Event as defined in clause 11
of the General Conditions we may at our discretion:
notify your Customers of the assignment of their book debts to us;
and/or
terminate the agency immediately by written notice; and/or
continue to provide you with facilities upon such terms as we may
specify in writing.
(e) Following termination of the agency, if we collect any book debts we
shall be entitled to charge a collection fee at a rate of 5% of
amounts so collected, without prejudice to our right to charge the
Recoveries Fee but so that the total fee shall not exceed 10%
(f) Within ten days following the end of each month you will send us, in
a form we specify, an aged analysis of book debts and a copy of your
sales ledger control account, together with such other documents as
we may require.
3. Financial and Other Particulars
(a) "Commencement" is
(b) "Administration Fee" is 0.55 per cent of the Gross Invoice Value of
a book debt;
(c) "Discount" is 2.25 per cent above Royal Bank of Scotland Base Rate;
(d) "Payment Percentage" is 70 per cent of the Gross Invoice Value of a
book debt;
(e) "Minimum Fee" is (pound)20,000;
(f) "Arrangement Fee "is (pound)4,500.
4. Entire Agreement
The terms set out in this Agreement represent the whole of the terms
agreed between us to the exclusion of any other statements by us whether
express or implied.
Signed as a deed
By Ultralife Batteries UK Limited
Director /s/ Xxxxx Xxxxxxxx
Director/Secretary /s/ Xxxxxxx Xxxxx
Date 30th January 2003
By Euro Sales Finance plc
Director /s/ Stuart Arenasen
Director/Secretary
Authorised signatory /s/ Xxxxxxx Xxxxxxxx
Date 30/4/03
SALES FINANCE SERVICE
GENERAL CONDITIONS
The clause headings used in this Agreement are for guidance only and are not
intended to affect its interpretation. These General Conditions must be read in
conjunction with any Agreement of which they are expressed to form part. A list
of general definitions can be found in Clause 18.
1. Sale and Purchase of Debts
(a) You agree to sell or assign to us all book debts owing to you at
Commencement and all your book debts arising during the life of this
Agreement. We shall own your book debts from Commencement or as soon
as they come into existence, even if not yet entered in your books
or records as due to you. Should any book debts not come into our
ownership (whatever the reason may be) you must account to us for
the Debt when received and you will hold the proceeds of such debts
on trust for us;
(b) You will sell or assign to us the benefit of any insurance policies
relating to book debts or any goods sold or services supplied which
give rise to any book debts;
(c) On signing this Agreement and as soon as a book debt arises you will
notify us in the form we specify together with such information and
original or copy documents proving the existence of the book debts,
the delivery of goods or the performance of your services in respect
of the book debts as we may request.
(d) While this Agreement continues you will not in any way sell or
assign your interest in any book debts to anyone else.
(e) Should we request, you will sign, pay stamp duty on and deliver to
us a document in a form that we approve legally assigning to us any
book debt or debts together with the benefit of all guarantees given
to you by your Customer and other related securities and, if we ask,
you will immediately give written notice in a form that we approve
to any Customer whose debt has been assigned in this way.
(f) You will print, stamp or otherwise xxxx each invoice with a notice
of assignment or sale of book debts shown in a form which we shall
specify.
(g) If your Customer becomes entitled to a credit or Customer discount
in respect of any book debt you will notify us straight away and
send to us a credit note in
respect of the credited or discounted book debt with any other
documents and information which we may request. We shall be free to
send the credit note to the Customer concerned or to refuse to send
the credit note, which will not affect any of our other rights. In
addition you will repay to us the amount of each credit note so that
we are not out of pocket.
2. Disapproval and Re-Approval
Because we pay you before your Customer pays us we may at any time deduct
from amounts, which we would otherwise be required to send you, a sum
equivalent to any book debt previously purchased by us which looks to us
as though it may be difficult for us to collect either through age,
because it is disputed, or because a particular customer has exceeded
either your credit limits or those which we have notified to you.
If we disapprove book debts in this way we shall be allowed to sell them
back to you or re-approve them for the purposes of calculating amounts
which you are entitled to draw.
3. Payments to you
At any stage during the provision of the service you will have a rolling
account with us which will be calculated as follows: -
1). add the Gross Invoice Value of book debts notified to us; then
2). deduct the value of any Disapproved Debts and add the value of any
reapproved debts; then
3). multiply that amount by the Payment Percentage in your agreement;
then
4). deduct from that amount the value of any Advances made by us to you;
then
5). deduct from that sum any Discount, Administration Fees,
Disbursements or other fees due to us; then
6). add the value of any book debts received from your customers less
the Payment Percentage applied to that book debt and the sum so
calculated, if shown as being due to you, is your "Entitlement."
Upon the occurrence of a Termination Event any further advances to
you will cease automatically and from any balance due to you, we
shall be entitled to deduct all commissions and expenses as provided
in this Agreement.
4. Charges
4.1. Charges will arise either as Discount, Fees or Disbursements as follows:
(a) Discount will be charged on a basis similar to that upon which
simple interest is calculated at a margin ( %) over The Royal Bank
of Scotland base rate from time to time.
b) Discount will be charged on the daily balance outstanding and due
from you to us accrued on a daily basis and invoiced monthly in
arrears.
(c) Any receipt from your Customer will be credited to your account with
us four working days after the day of banking, but not including the
day of banking.
(d) Payments made to you will be debited from your account with us on
the day on which they are made whether the payment is made to you by
cheque or bank transfer.
4.2 Fees
(a) We shall charge Administration Fees as a percentage of the Gross
Invoice Value.
(b) Occasionally Administration Fees may be charged on a fixed monthly
basis, monthly in advance.
(c) We may agree with you to charge you an arrangement fee to cover our
initial costs in setting up your facility.
4.3. Minimum Fees
We may charge a minimum turnover fee in the event that your turnover of
Gross Invoice Value in the 12 month period following the commencement of
the provision of the Sales Finance Service or any subsequent 12 month
period falls below a pre-determined minimum. This may be charged monthly
in advance on a pro rata basis at our discretion.
4.4. Bank Fee
We shall charge (pound)25 each time funds are transferred by banker's
transfer to your account with your clearing bankers.
4.5. Over-payment Fees
We may agree with you to charge over payment fees when you require funds
in excess of your agreed Entitlement from time to time.
4.6. Recoveries Fee
(a). If you cease to trade or if you suffer the appointment of an
administrator, administrative receiver, a liquidator, or if you
propose a voluntary arrangement or winding up of your company, then
we shall be entitled to charge a recoveries management fee which is
equivalent to 10% of the Gross Invoice Value of monies collected, to
reflect the increased cost of collection in the event of insolvency
or cessation of trading.
(b) We shall charge you a late payment fee of 0.5% on all book debts due
from your Customers which are more than 90 days old, invoiced
monthly in arrears.
4.7. Disbursements
(a). We shall deduct from your entitlement all disbursements which are
clearly identifiable as being attributable to you and which are not
covered by our normal service. These may include matters such as
credit reference fees, legal fees for debt recovery and other such
matters, but they will not include travelling costs, stationery
costs and our bank charges or indeed our overheads.
(b). Disbursements however will include any costs incurred by us in
appointing investigating accountants and lawyers.
5. Collection from Customers
(a). From the commencement of the Sales Finance Service we shall have the
sole and exclusive right to collect and enforce payment of every
book debt other than debts sold back to you and you have no right to
collect book debts unless we authorise you to do so in advance in
writing.
(b). You will assist our collection efforts if we so request by providing
all information required and you agree that for collection purposes
we may institute and conduct legal proceedings in your name under
our full control. We shall of course liaise with you but shall not
be under any duty to do
(c). You will immediately pass to us or to any Bank we direct any payment
a Customer makes to you directly in respect of a book debt and you
agree not to xxxx or endorse any negotiable instrument relating to
such payment otherwise than in our favour. You will hold any payment
you receive for a book debt on trust for us until we receive it. You
must not bank any such payment for your own account.
(d). If a Customer makes a general payment either to us or to you without
specifying which debts are covered by it then we shall apply it
firstly against any book debts outstanding and secondly against the
discharge of your liability to us, if any, whether arising under
this Agreement or otherwise, and any balance shall be paid as you
wish.
(e). If there is shown in our books a credit balance with any Customer
which remains outstanding we shall be entitled at our discretion to
make repayments of such credit balance to the Customer out of monies
available to you.
(f). If any book debt received from any Customer is received by us in a
currency other than sterling and the amount produced by converting
the other currency to sterling is less than the amount of any sum
advanced by us in relation to the book debt in question then we
shall be entitled to recoup any such short fall from any Entitlement
and you will in any event as an independent obligation indemnify us
for the deficiency and any loss sustained as a result. Unless agreed
by us in writing in advance any payments due hereunder shall be made
in sterling. Any such conversion shall be made at the prevailing
rate of exchange on the date of clearance of any effects banked by
us in such market as is determined by us as being most appropriate
for such conversion, and you will in addition pay to us, or we shall
be entitled to deduct from your Entitlement any costs of such
conversion.
6. Disputed Goods
If any goods relating to any book debt are returned by a Customer or
delivery is refused or the goods are rejected or repossessed by you, you
agree to transfer to us all your right title and interest in such goods
and, you will put those goods on one side, xxxx them
clearly and prominently with our name as owner and hold them strictly to
our order until they are resold at our direction or until we are fully
reimbursed in relation to any book debt in respect of such goods.
7. Accounts and Set-Off
(a). We shall keep a permanent record to show all sums payable or paid to
you, all payments received in relation to book debts and all fees,
expenses and other sums payable or paid by you under this Agreement
or otherwise. No later than 10 working days from the last day of
each month we will send to you a copy of such account which shall be
taken as undisputed evidence of the matters stated in it at the date
of its preparation unless within 14 days from despatch you notify us
in writing of any discrepancy. This account shall be your invoice
for VAT purposes.
(b). We may at any time draw up an account to record all amounts due to
you from us and to us from you.
(c). We may at any time set off any moines due to us from you whether
pursuant to this Agreement or otherwise against any sums due from us
to you. We shall only ever be obliged to pay you sums which are net
of any discount costs fees and disbursements due to us.
8. Accounting and Access Information
You agree that you will:
(a). keep fully detailed, up-to-date and proper accounting records and
allow us to enter your premises whenever we wish to inspect them and
such other papers as we may wish relating to your business debts
generally and allow us to take possession of such material to enable
us to make copies provided that we return such material to you
within a reasonable time;
(b). cause a proper audit to be completed of the books of account for
yourself and your subsidiaries, if any, for each financial year and
send an audited report and accounts to us as soon as they are
available and in any event within three months from the end of each
financial year;
(c). keep us informed at all times of the credit worthiness of your
Customers and the validity of each book debt and in particular of
any counter-claims, right of set off or other contra items raised by
your Customers in relation to any book debt and assist us in every
way to safeguard our interests;
(d). as and when produced, send us management accounts for your business
and at our request for any Related Company in a format and at
intervals acceptable to us;
(e). if we require, send to us within 10 days from the end of each month
an aged list of your creditors or a copy of your bought ledger;
(f). report to us immediately about reclaimed, repossessed or returned
merchandise, Customers' claims and disputes, and any other matters
affecting any book debts;
(g). provide us with specimen signatures of persons authorised to sign
any documents relating to this Agreement together with a Board
resolution authorising for this purpose such persons and inform us
immediately of any change in the signatories;
(h). give us a signed letter in our prescribed form for all existing bank
accounts (and whenever you open a new bank account) requesting the
bank to pay over to us monies received directly from your Customers;
(i). notify us in writing
as soon as you become aware of any event which affects or may affect
your warranties or our rights of immediate termination;
of any existing mortgages charges liens or other security over your
assets;
immediately when there are any changes in the nature of your
business, your directors or company secretary or a material change
in your ownership (a holding by a person, firm or company of 10 per
cent or more of your equity is for this purpose deemed to be
material);
of any company which becomes or ceases to be a Related Company;
of any Customer which is your associate or an associate of any of
your directors or might otherwise fairly be regarded as connected to
you or any of your directors;
of the terms upon which any goods are supplied to you and obtain
such waivers or variation to such terms as we may require.
If any customer also becomes a supplier to you or to any Related
Company.
9. Warranties
You warrant in respect of each book debt that:-
(a). you will not waive or modify your normal trading terms with any
Customer without obtaining our prior written consent and in
particular you will not extend the time for payment;
(b). we shall obtain a valid binding and enforceable title to the full
amount owing to you on each book debt sold or assigned us and to all
assigned rights and remedies included in the sale of the book debt
to us and that no supplier to you will retain title to any goods
sold by you which are the subject matter of a book debt;
(c). you have already performed all the obligations required for
enforcement of the book debt including delivery of goods or
performance of services;
(d). your Customer will pay the full amount of each book debt no later
than 90 days after the date of invoice;
(e). your Customer has an established place of business and your debtors
are not connected or associated with you and have no right which
would reduce or extinguish the Gross Invoice Value of the book debt.
10. Power of Attorney
You irrevocably appoint us as your attorney both during and after
termination of this Agreement to act in your name and on your behalf to
execute all documents and do all things necessary to give effect to this
Agreement or our rights including making any arrangement or compromise,
taking or defending any proceedings endorsing any negotiable instrument on
your behalf and executing legal assignments of all or any book debt. This
means that we can act on your behalf without reference to you in
connection with the collection of book debts.
11. Duration of Agreement
This Agreement will remain in operation from Commencement-until either you
give us seven days notice or we give you three months notice, to terminate
this Agreement and subject to our rights of immediate termination set out
below.
We may by giving you written notice terminate this Agreement forthwith if:
(a). you commit a breach of any term of this Agreement; or
(b). the nature or volume of your business is in our view substantially
changed; or
(c). there is any change in the person or persons who Control you; or
(d). any of our payments to you are not used in the ordinary course of
your business; or
(e). any monies owing from you to us are not paid within 7 days after
they become due; or
(f). any distress or execution or attachment is levied upon any of your
goods or premises or any garnishee order is made on any person
indebted to you; or
(g). a receiver or administrative receiver is appointed over any of your
assets; or
(h). you become insolvent; or
(i). you convene a meeting for the purpose of passing a resolution for
creditors voluntary winding up, or are the subject of a compulsory
winding up order or a petition for an administration order is
presented and you cease to carry on business or call a meeting of
creditors to make an arrangement or composition with creditors or
permit a judgement to remain unsatisfied for seven days; or
(j). we in our absolute discretion consider that your financial position
has deteriorated to the point at which we believe that repayments of
any amounts due or which may become due from you to us may be put at
risk. Any reference in this clause to you shall be taken to include
any of your subsidiaries.
12. Consequence of Termination
(a). Termination of this Agreement will not affect the rights or
obligations of either you or us in relation to any book debt and
this Agreement will continue to bind us both as long as it is
necessary to satisfy these rights and obligations.
(b). In the event of termination or upon the occurrence of a termination
event then without prejudice to our accrued rights and remedies
under this Agreement you agree to pay us forthwith upon written
demand a sum equal to the amount of all payments we have made to you
under this Agreement plus all fees and charges which have accrued
during the Agreement less the amounts which we have received from
your Customers and which have been allocated to your account with
us.
(c). In the event of termination or upon the occurrence of a termination
event we may retain any amount received by us in respect of any book
debt pending the drawing up of a final account and the payment of
any amount consequently due to us.
(d). Following the drawing up of a final account and any consequent
payment to us we shall re-assign to you without payment any book
debt still outstanding.
13. Security
You will grant us such fixed or floating charges as we may from time to
time require as security for the payment of all sums due or becoming due
to us under this Agreement and you will not give any new charge or other
security to any third party without first obtaining our written consent.
14. Indemnity
You agree to indemnify us against any claim by a Customer and any loss
incurred by us as a result of our entering into this Agreement. No waiver
forbearance or indulgence granted by us to you or to any Customer will in
any way discharge you from your liabilities to us to establish a
precedent.
15. Transfer of Rights
We shall be entitled to assign or charge this Agreement or any of our
rights and obligations hereunder. You may not assign or otherwise deal
with this Agreement or your rights and obligations hereunder without our
prior written consent.
16. Variation
This Agreement may only be varied by a document signed by us and by you.
17. Applicable Law and Notices
This Agreement is to be interpreted in accordance with and governed by
English Law. Any notices to be given by either of us to the other may be
either delivered by hand to the other party or its authorised agent or
sent by pre-paid first class letter, registered post, recorded delivery
fax transmission or telex to such party as its principal place of business
or at its registered office.
18. Interpretation
'Administration Fee' means the sum prescribed in clause 4.2 and your Sales
Finance Agreement;
'Approved Debt' means any book debt in respect of which the Payment
Percentage has been advanced or is payable and which has not been
disapproved by us or which was previously Disapproved and has since been
Reapproved. 'Approve' in relation to any Debt will be construed
accordingly;
'Associate' means any relative, partner, director, shareholder or employee
of you or of any Related Company;
'Control' means the power to secure that the affairs of a company or a
group of people are conducted in accordance with the wishes of those
holding such power;
'Customer' means any person to whom you supply goods or for whom you
perform services;
'book debt' means an amount which is owed to you for goods supplied or
services performed calculated at Gross Invoice Value and includes the
benefit of the sale or supply contract relating to such goods or services
and all rights and remedies arising in connection with such contract
including retention of title to goods, right of lien, stoppage in transit,
or recover of possession;
'Disapproved Debt' means any book debt which, in our absolute discretion,
we exclude for the purpose of calculating any payment due to you and
'disapprove' in relation to any book debt shall be construed accordingly;
'Gross Invoice Value' of a book debt is the total amount thereof including
VAT and before taking into consideration any allowances in respect of
discounts for prompt payment or any other allowable deduction;
'Payment Percentage' means the amount (subject to adjustment) payable on
notification of an Approved Debt;
'Related Company' means a company which either you Control or which
Controls you or which is Controlled by the same person, firm or company
which Controls you;
'Commencement' is the date when this Agreement commences;
'Termination Event' means any of the events described in clause 11.
Signed and acknowledged by Ultralife Batteries UK Limited
Director /s/ Xxxxx Xxxxxxxx
Director/Secretary /s/ Xxxxxxx Xxxxx
Date 30th January 2003
Dated 30th April 0000
XXXXXXXXX
- made between -
Ultralife Batteries UK Limited (1)
Euro Sales Finance plc (2)
THIS DEBENTURE is made the
BETWEEN:
(1) Ultralife Batteries UK Limited a company incorporated in England
(registered number 02927266) whose registered office is at 00 Xxxxxxxx
Xxx, Xxxxxxxx Xxxxxxx Xxxxxx Abingdon, Oxfordshire OX 14 1TG ("the
Client")
(2) Euro Sales Finance plc a company incorporated in England (registered
number 3038707) whose registered office is at Xxxxx House, P0 Xxx 000,
Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx, XX00 0XX ("ESF").
NOW THIS DEED WITNESSES as follows:
1. Definitions and Interpretation
1.1 In this Deed the following words and expressions shall, unless the context
otherwise requires, have the following meanings:
'Charged Assets' means the assets charged under Clause 3;
'Deed' means this document, including its recitals and the Schedule;
'Full Title Guarantee' means full title guarantee as that expression is
defined in the Law of Property (Miscellaneous Provisions) Xxx 0000;
'Receiver' means an administrative receiver, receiver and manager or other
receiver appointed in respect of the Charged Assets;
'LPA' means the Law of Property Xxx 0000;
'Property' means the property, short particulars of which are set out in
the Schedule;
'Secured Obligations' means all sums and liabilities covenanted to be paid
and discharged by the Client;
'Security Interest' means any
mortgage, charge, pledge, lien encumbrance, security interest or other
security arrangement of any kind.
1.2 Unless the context requires otherwise, or unless otherwise defined in this
Deed, words and expressions defined in ESF's General Conditions shall have
the same meanings when used in this Deed.
1.3 Any reference to a statutory provision is a reference to that provision as
for the time being extended, modified or re-enacted.
1.4 Headings in this Deed are for convenience only and shall not affect its
interpretation. Words importing the plural shall include the singular and
vice versa.
1.5 In this Deed the expressions "Client" and "ESF" shall include their
respective successors, assigns or transferees.
2. Covenant to Pay
The Client hereby that it will on demand discharge all obligations and
liabilities whether actual or contingent now or at any time hereafter due
owing or incurred to ESF by the Client anywhere in any manner whatsoever
(whether alone or jointly and in whatever style, name or form and whether
as principal or surety) together with interest at the rate of 3 per cent
per annum above the base rate for the time being of Bank of Scotland on
any late payment (as well after as before any demand or judgement)
calculated and compounded in accordance with ESF's usual practice and all
legal and other costs charges and expenses incurred by ESF in relation to
the Client on a full and unqualified indemnity basis.
3. Charging Provisions
3.1 The Client by way of continuing security for the payment and discharge of
the Secured Obligations hereby charges to ESF with full title guarantee: -
3.1.1 by way of first fixed charge:-
(a). all book and other debts both present and future at any time due or
owing to the Client and the full benefit of all rights and remedies
relating thereto; and
(b). all benefits in respect of all contracts and policies of insurance
whatever nature in relation to the assets charged by clause 3.1.1(a)
above which are from time to time taken out by the Client or in
which the Client has an interest.
3.1.2 by way of first floating charge the undertaking and all property, assets
and rights of the Client whatsoever and whatsoever both present and future
which is or may be from time to time while this Deed is in force comprised
in the property and undertaking of the Client including, without
limitation, the property and assets and rights of the Client referred to
in Clauses 3.1.1 above inclusive (if and in so far as the charges therein
contained shall for any reason be ineffective as fixed charges).
3.2 ESF may at any time by notice in writing to the Client convert the
floating charge into a specific charge as regards any assets specified in
the notice which ESF may consider to be in danger of being seized or sold
under any form of distress execution or other process levied or threatened
and may appoint a Receiver thereof.
4. Continuing Security
This security shall be a continuing security notwithstanding any
settlement of account or other matter whatsoever and is in addition to and
shall not merge with or otherwise prejudice any contractual or other right
or remedy or any other security now or hereafter held by or available to
ESF and shall not be in any way prejudiced or affected thereby or by ESF
now or hereafter dealing with, exchanging, releasing, varying or
abstaining from perfecting or enforcing any of same or any rights which
they may now or hereafter have or giving time for payment or indulgence or
compounding with any other person liable.
5. Restrictions on Dealing
The Client hereby covenants that it will not save with the prior written
consent of ESF:
5.1 sell, assign, discount, factor, pledge, charge or otherwise dispose of the
property and assets referred to in Clause 3.1.1(a) or 3.1.1(b) or any part
thereof or deal with the same;
5.2 create or permit to subsist any Security Interest upon or affecting any of
its undertaking, property or assets (other than this Debenture); and
5.3 part with possession, transfer, sell or otherwise dispose of or attempt or
agree to transfer, sell or otherwise dispose of the whole or any part of
its undertaking, property, assets or rights except in the usual course of
trading and for the purpose of carrying on its business.
6. Covenants
6.1 The Client hereby covenants with ESF that during the continuance of this
security the Client will at all times:
6.1.1 conduct and carry on its business in a proper and efficient manner and
keep or cause to be kept proper books of account relating to such
business;
6.1.2 furnish to ESF copies of its trading and profit and loss account and
audited balance sheet in respect of each financial year forthwith upon the
same becoming available and such other financial statements and
information of the Client as ESF may require; and
6.1.3 punctually pay and indemnify ESF and any Receiver appointed by it against
all rents, rates, taxes, duties, charges, assessments, impositions and
outgoings whatsoever now or at any time during the continuance of this
security payable in respect of the Charged Assets or any part thereof by
the owner or occupier thereof. If any such sums shall be paid by ESF or by
any such Receiver the same shall be repaid by the Client on demand.
6.2 The Client hereby further covenants with ESF that during the continuance
of this security the Client will:
6.2.1 get in and realise in the ordinary course of business all book and other
debts hereby charged and pay the same into any account nominated by ESF
from time to time in accordance with the General Conditions or any other
agreement between the Client and ESF; and
6.2.2 deposit with ESF and permit ESF during the continuance of this security to
hold and retain the following all such documents relating to the Charged
Assets as ESF may from time to time require.
7. Further Assurance
The Client shall whenever requested by ESF execute and sign all such deeds
and documents and do all such things as ESF may require at the Client's
cost over any property or assets specified by ESF for the purpose of
perfecting or more effectively providing security to ESF for the payment
and discharge of the Secured Obligations.
8. When Security Becomes Enforceable
8.1 The security hereby conferred will become immediately enforceable and the
power of sale and other powers conferred by Section 101 of the LPA as
amended or varied by this Deed shall be immediately exercisable:
8.1.1 at any time after the Client's late payment or failure to discharge any of
the Secured Obligations or any part thereof including failure to meet any
demand made in accordance with this Deed; or
8.1.2 if the Client shall have been in default of any of its obligations
hereunder; or under any other agreement between the Client and ESF;
8.1.3 upon crystallisation of the floating charge created by Clause 3.1.2; or
8.1.4 if the Client shall request that ESF shall appoint a Receiver; or
8.2 After this Deed shall have become enforceable ESF may in its absolute
discretion enforce all or any part of the security constituted hereby in
such manner as it sees fit.
9. Enforcement of Security
9.1 The statutory power of sale and of appointing a Receiver conferred on
mortgagees by Section 101 of the LPA, as varied and extended by this Deed,
shall be deemed to arise on the date of this Deed and in favour of any
purchaser or other person shall be deemed to be exercisable on and from
the date of this Deed. Section 93 (restricting the right of consolidation)
and Section 103 (restricting the power of sale) of the LPA shall not apply
to this Deed.
9.2 The statutory powers of leasing conferred on ESF shall be extended so as
to authorise ESF to lease, make agreements for leases, accept surrenders
of leases and grant options as ESF shall think fit and without the need to
comply with any of the provisions of Sections 99 and 100 of the LPA.
10. Appointment and Powers of a Receiver
10.1 At any time after the security constituted by this Deed has become
enforceable ESF may by written notice appoint any person to be a Receiver
of the Charged Assets or any part thereof (with power to authorise any
joint Receiver to exercise any power independently of any other joint
Receiver) and may from time to time fix his or their remuneration and may
remove any Receiver so appointed and appoint another or others in his
place.
10.2 Any Receiver so appointed shall be the agent of the Client and the Client
shall be solely responsible for his acts or defaults and for his
remuneration.
10.3 Any Receiver so appointed shall have all powers conferred by the LPA
(without the restrictions contained in Section 93 and 103 of that Act) and
the Insolvency Xxx 0000 on mortgagors, mortgagees in possession (but
without liability as such), receivers, administrative receivers and
administrators appointed under those Acts. In addition the Receiver shall
have power on behalf and at the cost of the Client (notwithstanding any
liquidation of the Client) to do or omit to do anything which the Client
could do or omit
to do in relation to the Charged Assets or any part thereof and in
particular (but without prejudice to the generality of the foregoing)
any such Receiver may:
10.3.1 take possession of, collect and get in all or any part of the property
in respect of which he is appointed and for that purpose to take any
proceedings;
10.3.2 carry on or concur in carrying on the business of the Client and to
raise money from ESF or others on the security of any of the Charged
Assets;
10.3.3 sell or concur in selling, let or concur in letting and terminate or
accept surrenders of leases and tenancies of any of the Charged Assets
and to carry any such transactions into effect;
10.3.4 sell, assign, let or otherwise dispose of or concur in selling,
assigning, letting or otherwise disposing of all or any of the debts and
any other property in respect of which he is appointed;
10.3.5 make any arrangement or compromise between the Client and any other
person which he may think expedient;
10.3.6 make and effect all repairs, improvements and insurances;
10.3.7 purchase materials, tools, equipment, goods or supplies;
10.3.8 call up any uncalled capital of the Client with all the powers conferred
by the Articles of Association of the Client in relation to calls;
10.3.9 employ, engage and appoint managers and other employees and professional
advisers; and
10.3.10 do all such other acts and things as may be considered to be incidental
or conducive to any other matters or powers aforesaid or to the
realisation of the security constituted by this Deed and which he
lawfully may or can do.
10.4 All money received by ESF or by such Receiver in the exercise of any
powers conferred by this Deed shall be applied after the discharge of
the remuneration and expenses of the Receiver and all liabilities having
priority thereto in or towards satisfaction of such of the Secured
Obligations and in such order as ESF in its absolute discretion may from
time to time conclusively determine (save that the Receiver may retain
the same for such period as he and ESF consider expedient). No purchaser
or other person shall be bound or concerned to see or enquire whether
the right of ESF or any Receiver or Manager appointed by them to
exercise any of the powers hereby conferred has arisen or not or be
concerned with notice to the contrary.
10.5 any such receiver shall be entitled to remuneration appropriate to the
work and responsibilities involved upon the basis of charging from time
to time adopted by the receiver in accordance with the current practice
of his firm without being limited to the maximum rate specified in
section 109(6) of the law of property act 1925.
10.6 the client hereby covenants with ESF on demand to pay all costs charges
and expenses incurred by ESF or by any such receiver or which it or he
shall properly incur in or about the enforcement preservation or
attempted preservation of this security or of the
charged assets or any of them on a full indemnity basis including any
costs incurred by the receiver before his appointment in his capacity of
investigating accountant.
10.7 neither ESF nor any such receiver shall be liable to account as mortgagee
in possession in respect of all or any of the charged assets nor be liable
for any loss upon realisation or for any neglect or default of any nature
whatsoever in connection therewith for which a mortgagee in possession may
be liable as such.
10.8 the client hereby agrees to indemnify and hold harmless both ESF and any
such receiver from and against all actions, claims, expenses, demands and
liabilities whether in contract, tort or otherwise now or hereafter
incurred by it or him or by any manager agent officer or employee for
whose liability act or omission it or he may be answerable for anything
done or omitted in the exercise or purported exercise of the powers herein
contained.
11. Powers of ESF
ESF may exercise without further notice and whether or not it shall have
appointed a Receiver all the powers conferred upon mortgagees by the LPA
as hereby varied or extended and all the powers and discretions hereby
conferred expressly or by implication on a Receiver appointed hereunder.
12. Power of Attorney
By way of security, the Client irrevocably appoints ESF and any Receiver
jointly and severally as its Attorney, with full power of delegation for
it and in its name and on its behalf and as its act and deed or otherwise,
to seal, deliver and otherwise perfect any deed, assurance, legal
assignment, agreement, instrument or act which may be required or may be
deemed proper for any of the purposes set out in this Deed.
The Client shall ratify and confirm all transactions entered into by ESF,
any Receiver, or any delegate of ESF in the exercise or purported exercise
of ESF's or Receiver's respective powers and all things done by ESF, such
Receiver or delegate by virtue of any power of attorney given herein.
13. Set-off
ESF may at any time and without notice to the Client combine or
consolidate all or any of the Client's then existing accounts with and
liabilities to ESF and set-off or transfer any sum or sums standing to the
credit of anyone or more of such accounts in or towards satisfaction of
any of the Secured Obligations. ESF shall notify the Client that such a
transfer has been made.
ESF may at any time and without notice to the Client set-off any
obligation owed by ESF to the Client against the whole or part of the
Secured Obligations.
14. New Accounts
If ESF receives notice of any subsequent Security Interest affecting the
Charged Assets or any part thereof or interest therein ESF may open a new
account for the Client. If ESF does not open a new account then unless ESF
gives express written notice to the contrary to the Client it shall
nevertheless be treated as if it had done so at the time
when it received such notice and as from that time all payments made by or
on behalf of the Client to ESF shall be credited or be treated as having
been credited to the new account and shall not operate to reduce the
amount due from the Client to ESF at the time when it received notice.
15. Currency Clauses
15.1 All moneys received or held by ESF or by a Receiver under this Deed may
from time to time after demand has been made by ESF be converted into such
other currency as ESF considers necessary or desirable to cover the
obligations and liabilities actual or contingent of the Client in that
other currency at the then prevailing spot rate of exchange obtainable by
ESF (as conclusively determined by ESF) for purchasing that other currency
with the existing currency.
15.2 If and to the extent that the Client fails to pay the amount due on demand
ESF may in its absolute discretion without notice to the Client purchase
at any time thereafter so much of any currency as ESF considers necessary
or desirable to cover the obligations and liabilities of the Client in
such currency hereby secured at the then prevailing spot rate of exchange
obtainable by ESF (as conclusively determined by ESF) for purchasing such
currency with sterling and the Client hereby agrees to indemnify ESF
against the full sterling cost incurred by ESF for such purchase.
15.3 No payment to ESF (whether under any judgement or court order or
otherwise) shall discharge the obligation or liability of the Client in
respect of which it was made unless and until ESF shall have received
payment in full in the currency in which such obligation or liability was
incurred and to the extent that the amount of any such payment shall on
actual conversion into such currency falls short of such obligation or
liability actual or contingent expressed in that currency ESF shall have a
further separate cause of action against the Client and shall be entitled
to enforce the charges hereby created to recover the amount of the
shortfall.
16. Miscellaneous
16.1 All the provisions of this Deed are severable and distinct from one
another and if at any time one or more of such provisions is or becomes
invalid illegal or unenforceable the validity legality and enforceability
of the remaining provisions hereof shall not in any way be affected or
impaired thereby.
16.2 No payment to ESF (whether under any judgement or order of any Court or
otherwise) shall discharge the obligation or liability of the Client in
respect of which it was made unless and until ESF shall have received
payment in full and to the extent that the amount of any such payment
shall fall short of such obligation or liability ESF shall have a further
separate cause of action against the Client and shall be entitled to
enforce the charges hereby created to recover such sum as shall pay the
amount of the shortfall.
16.3 No failure or delay by ESF in exercising any right or remedy shall operate
as a waiver thereof nor shall any single or partial exercise or waiver of
any right or remedy preclude its further exercise or the exercise of any
other right or remedy as though no waiver had been made and no relaxation
or indulgence granted.
16.4 It is hereby certified that neither the execution of this Deed nor the
creation of the charges herein contained contravenes any of the provisions
of the Memorandum and Articles of Association or other constitutional
documents of the Client.
16.5 Any change in the constitution of ESF or its absorption in or amalgamation
with any other person or the acquisition of all or part of its undertaking
by any other person shall not in any way prejudice or affect its rights
hereunder.
17. Notices
Any notice to be given under this Deed shall either be delivered
personally or sent by first class recorded delivery post, tested telex or
facsimile transmission. The address of the service of each party shall be
the address stated in this Deed or such other address as it shall have
from time to time notified to the other party. A notice shall be deemed to
have been served as follows:
17.1 if personally delivered, at the date of delivery;
17.2 if posted, at the expiration of 48 hours after the envelope containing the
same was delivered into the custody of the postal authority; and
17.3 if sent by telex of facsimile transmission, at the time of transmission.
18. Governing Law
This Deed shall be governed by and interpreted in accordance with English
law in every particular matter and any proceedings arising out of or in
connection with it may be brought in any court of competent jurisdiction
in England. IN WITNESS whereof each of the parties hereto has executed and
delivered this Deed the day and year first before written.
THE COMMON SEAL of \ SIGNED as a DEED by
Ultralife Batteries UK Limited
was hereunto affixed in the presence of
Director /s/ Xxxxx Xxxxxxxx
Secretary /s/ Xxxxxxx Xxxxx
30th January 2003
THE COMMON SEAL of \ SIGNED as a DEED by
Euro Sales Finance plc
was hereunto affixed in the presence of:
Director /s/ Stuart Arenasen
Director/Secretary
Authorised signatory /s/ Xxxxxxx Xxxxxxxx
30th April 2003
Formal Offer
Facility: Confidential Shadow Ledger Recourse
Provided by Euro Sales Finance plc -
A member of The Royal Bank Of
Scotland Group
On Behalf of: Ultralife Batteries UK Limited
FACILITY PARAMETERS This offer has been prepared with all
figures quoted in GBP
Minimum Agreement Period: 12 Months from the date of this
agreement
Minimum Notice Period: 6 Months
Funding Period: 90 days end of month from invoice date
Sales Territories: United Kingdom
Europe
Rest Of World
Sales Ledger Currency: GBP
Funding Cap: Yes Amount:(pound)450,000
Initial Prepayment: UK Sales - 70% of approved eligible
debts
Non-Notifiable Debts: Cash, pro-forma & credit card sales.
Exports to non-OECD countries. Sales to
Associated Companies (Ultralife
Batteries Inc.) Sales to customers who
are also suppliers. Sales to customers
in the USA who receive prod, directly
from Ultralife Batteries Inc.
ANTICIPATED CLIENT PROFILE
Projected Annual Turnover (inc. VAT): (pound)5,500,000 (excluding
non-notifiable debts)
Customer Credit Terms Standard: 30 days from date of invoice
Exceptional: 60 days from date of invoice
CHARGE FOR SERVICES 60 days from date of invoice
Proposed Commission Charge: 0.55% per annum
Subject to VAT at the standard rate and
expressed as a percentage of gross
annual sales turnover.
Minimum Commission Charge: (pound)20,000 per annum
Subject to VAT at the standard rate.
CHARGE FOR FINANCE
Discounting Charge: 2.25% per annum
Expressed over The Royal Bank of
Scotland Plc base rate currently 4.00%
Arrangement Fee: (pound)4,500 (plus VAT)
Payable upon commencement of this
Agreement
PRECOMMENCEMENT CONDITIONS
Letter of continued support from Ultralife Batteries Inc.
Waiver from Congress Financial Corporation in respect of the trade receivables.
Deed of postponement from Ultralife Batteries Inc. in respect of interest
bearing loan and trade creditor balance.
ENDURING OPERATIONAL/SPECIAL CONDITIONS
ESF will require copies of your management accounts on a quarterly basis to
include a profit & loss account and balance sheet. These are to be provided no
later than 6 weeks from the quarter end.
ESF will require you to obtain proof of delivery for all invoices raised &
funded by us. These documents are to be retained by you & held to our order,
ESF, at its absolute discretion, may request copies of these documents from time
to time.
Debtor concentration limits will be 15%. MOD Concentration limit will be 30% of
the approved eligible debt. Separate application to this can be made on an
on-going basis,
Our facility is reliant on your credit control & collection systems being
correctly implemented. We would not, therefore, expect to see a month when your
sales ledger debt turn exceeded 80 days (excluding intercompany sales
receivables). Should this happen, we shall reduce your prepayment facility
according to the following formula:
Actual days outstanding = 82 days
2 divided by 80 days x 100% = 3%
Your pre-payment facility will reduce to 67% in the following month.
The terms & conditions set out above may be varied according to the following
criteria:
1. The operation of the Agreement.
2. The standard of the proof of debt.
3. The financial standing of the Company
There will be a Maximum Funds In Use (MAFIU) of(pound)450,000 for the Company.
Please indicate your acceptance of these terms and conditions by signing and
dating below and by initialling and dating all other pages of the Formal Offer.
Please retain the second copy for your information. We accept the terms of your
quotation and the conditions attached hereto
Signed: /s/ Xxxxxxx Xxxxx Dated: 30th January 2003
--------------------------------- -----------------
For and on behalf of: Ultralife Batteries UK Limited
